First Wednesday — A
Monthly Discussion of Employment Law Issues and Other Hot Topics for Management
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By Jeffrey A. Snyder - Issue No. 61: May 7, 2008 Jeff is a Shareholder of
Thoits, Love, Hershberger & McLean, specializing in
employment law and related litigation.
He can be reached at
(650) 327-4200 or |
Human
Resources 101 ― Top Ten Things NOT To Do
Having
devoted my practice to representing companies and executives in employment law
disputes, I have noticed some recurring mistakes that even the best employers
make. Since many of these First Wednesday bulletins have served as
checklists on how to proceed the right way (for example, in terminating an
employee, compelling arbitration, or handling a wage & hour claim), this
bulletin shifts course. Here, in no
particular order, are my top ten “Don’ts”
for employers:
1.
Terminate a Problem Employee by
“Eliminating His Position” While Simultaneously Interviewing His Replacement. Employers often want to avoid the difficult
talk with a problem employee and not confront performance problems as the
reason for termination. There is nothing
wrong with doing a single-person layoff or job elimination, if that is
what is really happening. However, when the
ex-employee learns he has been quickly replaced by a much younger employee, the
stated reason for termination will appear false, or pretextual. It may then lead to an investigation by the
ex-employee’s attorney into the “real reasons” for termination, which could be claimed
to relate to an age, gender or religious preference, or some other reason that
could be claimed to be “pretextual” or illegal.
It is much better to be straightforward in the company’s two-on-one
termination meeting and mention the performance issues or, if there are no such
issues worth mentioning, consider using the “at-will” doctrine and explaining
that the employment was not a good fit. (See First Wednesday, February 7, 2007.)
2.
Avoid Overtime Claims by Putting
Everyone on a Salary and Calling Them Managers. This strategy will likely fail. Employers, not employees, bear the burden of
proving that an employee claiming overtime is exempt from
3.
Suspend or Terminate an Employee Shortly
After He Makes a Dubious Claim of Sexual Harassment. Investigate, don’t retaliate. Virtually every reported claim of sexual
harassment must be investigated by the employer or an investigator hired by the
employer. This is not only required by
4.
Give “Excellent” Performance
Reviews to Marginal Workers.
The marginal worker who builds a record of “excellent” performance
reviews is a threat in “wrongful termination” litigation and also presents some
practical problems in company decision-making.
The company loses some flexibility.
For example, if the “excellent” employee has built a 10-year record of
strong reviews, then why is he suddenly being fired or demoted for non-performance? In a more subtle example, why is the
“excellent” employee chosen for layoff instead of the employee who merely “exceeds
expectations”? Performance reviews
should not only be used as a Human Resource tool for improving communications
and managing performance expectations, but also as a constant reality check so
the employee is not surprised when terminated for poor performance.
5.
Conduct Sensitive Personnel
Discussions by E-mail.
As everyone knows, e-mail is discoverable in litigation and often serves
as the most damaging evidence used against the employer. E-mail discussions are often quick, frank,
open and unfiltered. E-mail is never
truly deleted and can be recovered by data recovery specialists hired by your
adversary in litigation. If a sensitive,
internal personnel discussion needs to occur, it is much better to conduct that
discussion in person, without extensive note-taking, or by using an erasable white
board.
6.
Challenge Terminated Workers on
Their Claims for Unemployment Benefits. While it is often tempting to challenge an
ex-employee’s claim for unemployment benefits, particularly someone terminated
for poor performance; this is rarely successful and can cause more headaches
for the employer. The decision whether
to grant unemployment benefits is up to the Government, and while the employer
has some say in the matter, it is usually not enough for the employer to say
that the employee was a poor performer, had a bad attitude, or even that the
employee was terminated “for cause.” Typically,
the employer must show that misconduct occurred; a higher standard than a “for
cause” standard justifying your termination.
Misconduct includes theft or damage to company property, drinking on the
job, fighting with co-employees, or other serious violations. But it is not usually “misconduct” for an
employee to be inefficient, fail to meet performance standards or make judgment
errors. Also, if you try to block the unemployment
claim, it could inflame the employee who, instead of going away quietly, may then
focus his sights on filing a wrongful termination suit or other claim against
the company.
7.
Allow Flexible Time Schedules
since Many Employees would rather Work four 10-hour days per week and Skip
Lunch Breaks. With
a few exceptions, this would subject the employer to overtime claims and
penalties. Non-exempt employees who work
over eight hours per day or 40 hours per week are entitled to overtime
pay at 1.5 times their rate of pay, and twice their regular rate for over eight
hours worked on the seventh consecutive workday in a workweek. The exceptions include signed requests for
make-up time within the same week, and alternative workweek schedules, which have
hurdles including an employee meeting, secret ballot vote, agreement, and a filing
with the Labor Commissioner. Lunch
breaks must be provided if the employee works five or more hours, and cannot be
waived by agreement. Based on recent
case law, the penalties for failing to comply with break law can reach back
three years and result in a daily “penalty” of one or two hours per day that a
meal or rest break was missed.
8.
Hold an Employee’s Final Paycheck until
She Returns the Company Keys and Cell Phone. Yes, it is the company’s property and the company
is entitled to get it back. However, the
employee’s final paycheck cannot be used as a hostage. Failure to meet a final paycheck deadline
subjects the employer to waiting time penalties. This penalty is a continuation of the
employee’s wages until the final paycheck is tendered, up to a maximum of 30
days. Final paycheck deadlines depend on
whether the employee was terminated, quit without notice, or quit with at least
72 hours notice. A terminated employee
is entitled to all final wages, including unused vacation, at the time of termination. An employee who quits with fewer than 72
hours notice must receive a final paycheck within 72 hours after giving notice. An employee who quits with more than 72 hours
notice is entitled to a final paycheck on the last day of work.
9.
Avoid Employment Laws Altogether
by Making Everyone an Independent Contractor. This is a potentially disastrous
strategy. Many companies believe that a
worker is considered an independent contractor if the parties agree and sign an
“independent contractor” agreement to that effect. However, independent contractor status is
determined independently of any so-called contract; primarily by the degree of
control the employer can exercise over the person’s work. There are additional factors depending on
which Government agency is conducting the audit or making the decision, but
simply treating everyone as an independent contractor has tax and workers’
compensation implications, and potential wage and benefit liabilities with
several state and federal agencies.
10.
Don’t Give Sexual Harassment
Prevention Training to Your Supervisors. The mandatory sexual harassment training law
was passed in
In
conclusion, most employers want to do the right thing and, by instinct, end up
doing the right thing.
(© 2008 Thoits, Love, Hershberger & McLean)
First Wednesday
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formed as a result of your reading or replying to this newsletter, which
is not intended to provide legal advice on any specific matter, but rather
to provide insight into current developments and issues.
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