Archive for the ‘Personnel Policy Fun’ Category

If we are being honest we must admit that many of us will eventually get “too old” to do our jobs. This won’t happen to everyone. I have had cases against lawyers in their 90’s who were quite capable. I imagine that Jack LaLanne would have been a fine lifeguard or firefighter even in his 80’s. But most of us could not do those jobs in our 80’s.

Don’t take this post the wrong way; I’m strongly against age discrimination. Although I usually work for employers, I’ve successfully represented older workers who have been real victims of age discrimination. It’s ugly. And the resulting emotional and economic harm to an older worker can be devastating. While racial discrimination is often subtle and covert, age discrimination can be blatant and overt.

This post is aimed at the very real situation of a good employer having an elderly worker who can no longer perform all of the job duties. In this economy with people unable to retire, and because baby boomers are aging, this is a situation that frequently repeats itself. Take this hypothetical “damned if you do; damned if you don’t” situation, which is a mixture of real cases I’ve worked on. Say an employer has a much older worker; elderly, in fact. Far from wanting to discriminate, the company feels great affection for the employee, and has kept him much longer than his performance warrants. Let’s say that the public’s or the client’s safety depends on the employee performing his job duties.

What is the employer to do? By letting the employee slide for years, the employer is in a weak position because it has no record of poor performance. If the employer fires the employee, it exposes itself to an age discrimination claim. If the employer does not fire the employee, clients may be dissatisfied, or someone could be injured. Damned if you do; damned if you don’t. There may also be physical issues that make the employee qualified as disabled under state and federal law, requiring that you provide reasonable accommodations before termination.

There’s no magic bullet to this situation, but if it is a safety issue, you have to err on the side of safety. But it is clear that employers must rely on objective criteria. Well-drafted and honest job descriptions, which are enforced for all employees equally, are your first line of defense. Performance evaluations are your second line of defense. If you routinely evaluate, or even test, all of your employees in an equal, objective, unbiased fashion, and record the evaluations, you will be in a better position (You have to be careful that the evaluations or tests themselves are not biased, which could lead to liability). Also, you should have objective and equal responses to the evaluations/testing. You cannot let some employees slide, because you have then set a precedent that will allow an employee to show bias if you enforce your standards against only some of your employees. Document everything when it happens. Employment lawyers have a saying, “if it’s not in writing, it didn’t happen.”

This will cost you time and money, I get that. But don’t look at it as a waste of time. In addition to helping you avoid liability, won’t it also help you to serve your customers? Won’t it reinforce to your workers that the job description is important and that you take it seriously? Won’t it help you to revise your job descriptions if they are not accurate? Won’t you discover where you need more training? Won’t it help you get valuable feedback from your employees? Won’t you weed out underperforming workers and strengthen your business? Only you can answer these questions, but I’d be surprised if you said “no” to all of them. Maybe this isn’t feasible for every company and every position, but if you put your mind to it, you should be able to come up with some objective ways to evaluate employees.

The other advice here is to be honest with your employees. Of course, don’t say “you’re too old” for the job. Don’t suggest that the employee retire. I said honest, not suicidal. In fact, age really isn’t the issue, in spite of what I wrote above. The issue is the individual’s performance. Some people can suffer early onset dementia at age 60. Some people have their wits about them in their 90’s.

Make it about their performance. Don’t try to soften the blow and tell the employee that you’re eliminating the position when you are not. Don’t tell employees that you are moving in a new direction, or seeking some “new blood,” which is code for hiring younger workers. Just be factual and rely on performance issues. It will still hurt the employee, and they may not want to accept that they cannot perform. But deep down, they will know that you are right. I think it is easier to accept that we all get older and lose some of our abilities than to accept that your employer rejected you just because you are older. If you make an employee feel the latter, you may well buy yourself an expensive lawsuit.

If you have any questions on how to deal with an underperforming worker, call me at 617.338.7000.

By Adam P. Whitney

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Here’s a very interesting read from a fellow blogger, Attorney Jon Hyman, who has an excellent blog on employment law in Ohio: http://www.ohioemployerlawblog.com/2011/08/if-your-workplace-has-no-bra-thursday.html

As you can read from the post and the attached complaint, the employee alleges that her supervisor asked her sign a note agreeing that he could sexually harass her.

It should go without saying that an employee cannot be forced to waive her rights against sexual harassment. In limited circumstances, participation in sexual banter can be a defense to a sexual harassment claim, but it’s really a defense of last resort, because it is an admission of a sexually charged atmosphere. Moreover, even if an employee seems to participate in sexual banter or jokes or whatnot, the employee may feel that there is no choice other than to play along. Or, the employee may be terminated and suddenly find the banter offensive and hostile.

The takeaway is obvious. Don’t tolerate any kind of sexual banter in the workplace, unless you want to try your luck explaining to a government agency, judge or jury why it was okay to do so.

If you have any questions about sexual harassment, call me at 617.338.7000.

By Adam P. Whitney

Much of what you may think you know about employment contractual issues could be wrong. Is your company exposing itself to liability because of misinformation or a lack of information about contracts? Employment law creates traps for unwary employers. For example, you could be damned by a poorly drafted commission plan, which could subject you to triple damages, costs and attorneys’ fees even where you think an employee is owed nothing. You could be damned by your own personnel manual, which inadvertently creates contractual rights in employees. You could be damned by firing a minority owner of your business (stockholder, partner or LLC Member) without legal advice. Here is a brief guide, which just scratches the surface of these complex issues.

Does a Contract Have to Be in Writing?

Yes and no. Ideally, every employment agreement should be in writing to clarify the rights and obligations of both parties. Sometimes, a simple offer letter will do. To some extent, oral contracts can be enforceable if they can be performed within one year. If the contract cannot be performed within one year, then it must be in writing to satisfy the statute of frauds. Like many things in the law, there are exceptions to these rules. For example, if an employee relied on an oral promise of a contract for a term of years, the employee might be able to enforce the oral promise using the court’s equitable powers? Also, a promise of employment for life can be performed within one year because anyone can die within a year. Thus, an oral promise of employment for life can be enforceable.

Does a Partner in a Partnership, a Shareholder in a Small Corporation, or a Member of an LLC Have Rights Against Being Terminated by the Majority Owners?

Yes, to an extent. This is a very complicated area of the law and depends on the specific facts of each case. In general, if the owner-employee has a reasonable expectation of continued employment, he cannot be fired unless there is a business purpose for the firing and no less harmful alternative. This is because the majority owners owe the minority owner the utmost duty of good faith and fair dealing. Thus, majority owners should seek sound legal advice before terminating or taking other action against a minority owner employee.

Can Other Employees Be Fired Without Cause?

The general rule is that, if an employee is “at-will,” which means that the employment is not for a specified period of time and there is no contractual protection to employment, the employer can fire the employee for any reason or for no reason. If an employee has a specific contract (or if a personnel policy creates rights against termination, as set forth below), usually the employer can terminate the employee only if there is “cause” to do so. Well-drafted contracts define the specific “for cause” reasons for termination.

Also, there are dozens of statutory and common law protections which protect employees from discrimination and other matters. Thus, if the employer terminates the employee without cause, the employee may believe that there is a discriminatory or other reason for the termination.

Does the Employee Manual or Personnel Manual Create an Employment Contract Giving Rights to the Employee?

Yes, no, maybe. Typical lawyer answer, I know, but it is the right answer. A well drafted manual usually will not create contractual rights in favor of employees. However, there are reported cases where a poorly drafted manual inadvertently gives rights to employees that prevent their termination without cause. Employers should have their manual reviewed by a qualified employment lawyer to protect themselves from suit.

Can an Offer Letter Create an Employment Contract for a Term?

Yes. Employers can unintentionally create an implied contract for a term by the wording in an offer letter. Employers should have their offer letters reviewed by a qualified employment attorney before sending them.

Should Employees Be Told of the Reason for Termination?

Probably, but it depends on the situation. What employers should not do is lie or tell a half-truth, even to save the employee’s feelings. This does not mean that the employer has to be harsh or intentionally hurt an employee’s feelings, but if you do not tell the truth at termination and you are then sued, it’s hard to change your story later. The employee’s lawyer will accuse you of changing your story and that your real reasons were discriminatory. Also, you should document the reason for the firing. Employment lawyers have a saying – if it is not in writing, it didn’t happen.

Additionally, there are new statutory requirements about what employers must put in an employee’s personnel file and how the employer must inform the employee of any negative information. All employers should review these new requirements with a competent employment attorney.

Can an Employment Contract Control over Statutes and Common Law?

Generally, no. Although parties are free to set forth the terms of the employment in writing, there are limitations. For example, employees must be paid minimum wages and must be paid either weekly or bi-weekly. These rights cannot be contracted away. An employer also could not have an employee waive an employee’s rights under anti-discrimination or other protective statutes, such as the Family and Medical Leave Act. However, unless there is some statutory or public policy prohibition, parties are free to tailor their agreement as they see fit.

Are Contracts Requiring Arbitration Enforceable?

To some extent, yes, if the contract is well-drafted, fair and reasonable. An employee is always allowed to challenge whether there is a valid arbitration provision, which is an issue for a court, not an arbitrator. Arbitration can also be waived by the party seeking to enforce it. Also, arbitration clauses cannot prohibit employees from filing with the Massachusetts Commission Against Discrimination, or from filing wage claims or other claims with the Attorney General or other governmental entities. Arbitration issues are complex, so if you are an employer who seeks to enforce an arbitration clause, make sure you have it reviewed by a competent employment attorney.

Can an Employer Make Sure that a Worker Is Not Classified as an Employee by Entering Into an Independent Contractor Agreement?

No. In Massachusetts, there is a strict three-part test for determining whether someone providing services for your company is an employee or independent contractor. This is a complex legal and factual question, but in general, if the individual is providing services within your line of business, or you have some control over the individual’s work, or if the employee does not have his own business or profession, the individual will likely be deemed to be an employee. There can be severe penalties and liabilities for misclassifying a worker as an independent contractor, so have a competent employment lawyer review this issue for you.

Does an Employee Have any Rights and Remedies if a Contract Has Been Breached?

Usually, but it depends on the wording of the contract and whether the employee has suffered damages. Employees will normally have a duty to mitigate damages. Thus, an employee must seek another comparable job after termination. The normal damages would be the loss of earnings during the contract term, minus amounts earned or which could have been earned in mitigation. There could be other damages, depending on the wording of the contract and the situation.

Does an Employer Have to Provide Severance Pay?

Generally, no, unless there is a contractual right or a specific, enforceable policy to do so. There may be exceptions to this general rule, but the exceptions do not apply to most employers and employees.

Does an Employee Have a Contractual Right to Bonuses and Commissions?

Yes, no, maybe. Commissions and bonuses are creatures of contract, but can potentially be enforced through payment of wages statutes. One must first look at the specific wording of any written contract or compensation plan, and also examine the course of dealing of the parties and the standards in the industry. If an employer has a vague commission plan or one that favors the employee, the employee may have a contractual right to commissions, even after termination. Worse yet, the employee could be entitled to triple damages and attorney’s fees, litigation costs and interest. Thus, any commission or bonus plan must be very carefully crafted by a competent employment attorney. A “bonus” is usually thought of as being wholly discretionary and, thus, not subject to contractual or statutory rights. However, “bonus,” is just a word used and the word itself does not control. Employers can inadvertently create employee rights to a “bonus” by a poorly worded compensation plan or a course of dealing.

Can an Employer Make any Employee a Salaried Employ by Putting that in the Contract?

No. There are specific guidelines under federal and state law regarding who is an “exempt employee” and who is a “non-exempt employee” for overtime purposes. Contrary to the belief of some employers, you cannot simply pay any employee a salary and not expect to keep track of their hours and pay overtime. You must first determine whether the employee meets the exempt guidelines, which can be very complicated. For example, lawyers and doctors are professionals and can be paid on a salaried basis, as can some (but not all) executives, managers and computer programmers.

The above is not meant to be legal advice, but merely general information. Employment law is extremely complex, and legal advice cannot be given without a full review of the facts and the law. The above may or may not apply to any particular employer or employee.

By Adam P. Whitney 617.338.7000.

Many employers may think that they have the right to charge employees for things such as broken products, lost uniforms, fines for safety violations, loans, lost money, alleged theft, etc. In Massachusetts at least, an employer will face exposure for deducting such amounts from wages. Massachusetts General Law Chapter 149, Section 148 requires full and prompt payments of wages due to employees. Employers cannot contract their way out of this requirement.

There is a provision of the statute that appears to allow a “valid set-off.” A valid set-off is a little like sasquatch. Such a creature may exist, but no one can prove it. The Attorney General of Massachusetts has taken a very strict reading of what could constitute a valid set-off. And the Courts have followed the Attorney General’s lead.

The Supreme Judicial Court recently endorsed this line of thinking in the case of Camara v. Attorney General, 458 Mass. 756 (2011). In this case, a disposal service company enacted a policy whereby an employee found at fault for an accident involving a company truck could either to discipline or a fine deducted from wages earned. The policy had the laudable goal of reducing accidents. The company’s statistics showed that the policy worked.

The company argued that the fines were a valid set-off, but the Attorney General and the Supreme Judicial Court disagreed. The Court ruled that there must at least be some form of due process through the court system for such a set-off. However, the company cannot play judge, jury and executioner, as it did in this case. As fair as the company may have intended to be, there is obviously the potential for abuse by unscrupulous employers.

As a result of the ruling, the company had to reimburse the employees for the monies deducted. Additionally, it had to pay fines of $9,410. The result could have been worse. The employees could have sued for automatic triple damages and recovery of their attorneys’ fees and costs of litigation.

This is one of many examples of how employers should be very careful to not violate laws regarding wages paid to employers. There are lawyers whose entire practice area involves finding employers who have committed technical violations of wage statutes and then suing them for triple damages and attorneys fees. These claims often are brought as class actions to maximize the damages recoverable against the employer. The Attorney General also has independent enforcement power, which she uses in certain cases, such as the Camara case. If you are any employer who has any questions about any wages, salary, overtime, vacation time, independent contractor misclassification, etc., call me at 617.338.7000.

By Adam P. Whitney.

Most employers I have spoken with mistakenly believe that any employee can be tested for drugs. Nothing is that easy, especially in Massachusetts. If you want to minimize exposure (to legal liability, that is), you had better have a policy that is narrowly tailored and carefully crafted.

That is because Massachusetts is tougher on employers in this regard than other states are. In Massachusetts, an overly broad drug testing policy will subject the employer to liability for invasion of privacy and, if an employee is terminated for refusing to be tested, possibly for wrongful discharge. The Massachusetts Supreme Judicial Court ruled that peeing into a cup is a private act (yes, judges think about such things) and that your medical information is also private.

This is another area of the law where the employer may have to treat individual employees differently. For example, an employer would be justified to test employees who drive a company vehicle for many miles per year (under certain federal statutes, such as the trucking industry, drug testing can be mandatory; this trumps state law). Also, an employer would be justified testing employees where their jobs are such that being under the influence of drugs would pose a danger to themselves and/or the public. But for other employees who just sit in an office, their privacy interests may outweigh the employer’s interest in a drug-free workplace.

There are several other factors to consider when drafting a drug testing policy. Thus, an employer must retain a knowledgeable employment lawyer. The dollars that you spend on the drafting end could save you tens of thousands for what you might spend on the litigation end if you are sued and have a poor policy. Self-serving? Definitely. But in reality, most employers decide against drug testing after they learn the legal issues involved.

By Adam P. Whitney, 617.338.7000.