Managing Work Force Reductions

What to do About Workplace Violence

Anne Bancroft — Sat, 16 Jan 2010 18:06:06 -0500

Unfortunately, one of the possible responses to a reduction in force, and other internal and external stressors, is workplace violence. Employers can be liable to employees and customers for their negligence that allows workplace violence to occur. What steps can employers take to protect their employees and themselves?

Many circumstances can result in violence in the workplace. A termination of employment, reduction in force, demotion, poor review , internal complaint, or any adverse employment action can cause a violent response. Outside stressors such as financial, health or family concerns can cause problems in the workplace as well. Domestic violence often carries over into the workplace. Moreover, some businesses, such as healthcare or late-night retail, are more prone to incidents then others.

Employers can take important steps to preventing violence in their workplace.

1. During the hiring process, an employer should:

- Centralize recruiting, interviewing and hiring.

_ Review all info before hiring.

- Investigate all gaps.

- Conduct background checks.

- Consider non-discriminatory selection tools.

- Extend offers pending background results.

- Record investigative & screening efforts.

2. Training: Employers should train supervisors in identifying and responding to risks of violence in the workplace, in the same way employers train supervisors on other safety risks, such as drug use, fire and accidents.

3. Supervision: Communicative supervison can give a disgruntled employee an outlet before she or he turns to violence. Employers should ensure that employees know how to voice their concerns via an Open Door Policy and that managers know how to resolve disputes.

4. Monitoring employees: With proper notice to employees and implementation of policy, employers should take full advantage of employee monitoring, including drug testing; accessing employees use of email and the internet; searches; and, video monitoring. While employers should make sure they do not exceed the appropriate privacy boundaries of such monitoring, employers need to be aware of what their employees are doing at work.

5. Don’t ignore employee personal issues that enter the workplace. Employers should require employees to advise them of any temporary restraining orders to which they are a party.

6. Emphasize individual responsibility. Employers should train employees on the importance of taking responsibility for their own behavior and safety in the workplace.

7. Implement policies prohibiting workplace violence. Employers also should implement other policies related to workplace safety, including policies on visitors, confidentiality, use of interactive systems, video and other monitoring and workplace searches.

8. Be sensitive to warning signs from employees, such as:

- Threats of harm (direct or veiled).

- Intimidating and/or harassing behavior.

- Carrying and/or flashing weapons.

- Paranoia (“They’re out to get me”).

- Moral righteousness (“I’ve been wronged”).

- Can’t (or won’t) take criticism; does nothing wrong.

- Holds a grudge, especially against management.

- Expresses desperation over work, family, personal.

- Has history of violent behavior (on or off job).

- Fascinated with incidents of workplace violence.

- Approves of violence by “screwed” employees.

- Ignores co-worker safety.

- No life outside of work.

- A loner; “he was a quiet man.”

9. Assess readiness. Employers should assess physical and electronic security (office/home); internal resources (HR, legal, risk management, Media/PR); and external resources (police, security, legal, EAP, outplacement) regularly.

10. Manage separations. Whether performance or economic-driven, employers must manage separations appropriately. Employers should communicate separations humanely and offer assistance such as severance, EAP and outplacement services where possible to ease the transition. In addition to protecting the interests of the departing employee, employers also should protect their own interests by cutting off access to the interactive systems, customers, and the premises. Employers can use confidentiality and non-solicitation agreements and covenants-not-to-compete to protect their business interests.

When confronted with a suspected incident of violence, employers should:

· Focus on the employee’s conduct, not on his/her motivation!

• Treat like violators alike.

• Weigh the risks of being wrong.

When in doubt, kick them out.

Top Ten Tips for Terminating Employees

Anne Bancroft — Mon, 04 Jan 2010 08:35:52 -0500

1. Don't make snap decisions to terminate an employee. Suspension is a better immediate response.

2. Investigate the facts first. Don't rely on assumptions.

3. Review the personnel file before a termination. Does the file (prior evaluations, warnings) support the decision?

4. Review written policies. Is the termination consistent with policy? If not, does the policy need to be revised?

5. Draft appropriate policies if yours are lacking. Having a formalized procedure can be an important tool to help supervisors handle separations appropriately and consistently (but as with all policies include them in a handbook with an at-will disclaimer that the policy does not create a contract and can be changed.)

6. Treat the employee respectfully during the process. How the message is delivered can be as important as the message itself.

7. How were other employees in similar circumstances treated? If they were treated differently, what is the objective and defensible reason for terminating this employee? Can the employee claim discriminatory treatment?

8. Document performance issues as they happen. Progressive discipline is easier to defend then immediate and unsupported terminations.

9. What is the employee's status? Has the employee recently taken a protected leave of absence or made a complaint that could be the grounds for a retaliation claim?

10. Train employees on personnel issues, especially managers and supervisors.

WARNing - Part Two

Anne Bancroft — Mon, 19 Oct 2009 18:07:03 -0500

Like New Jersey, New York also has recently implemented changes to its plant closing law. The NY WARN requires covered employers to provide affected employees with at least 90 days notice of an employment loss. The NY WARN applies to employers with 50 or more employees (WARN applies to employers with 100 or more employees) and requires 90 days notice (WARN requires 60 days). The NY WARN also defines mass layoff more broadly than WARN (layoff of at least 50 full time employees and 33 percent of the workforce, or at least 500 employees). Under NY WARN, a mass layoff is a reduction of force of at least 25 employees and 33 percent of the workforce or at least 250 employees.

NY WARN also more broadly defines "plant closing" as the permanent or temporary shutdown of a single site of employment resulting in an employment loss for 25 or more full time employees in a 30 day period. Federal WARN defines plant closing as a loss of 50 or more employees in a 30 day period.

Like the NJ law, NY WARN requires notice to employees and their collective bargaining representative.

Employees aggrieved under NY WARN can seek relief from the Dept of Labor or through a private lawsuit. Penalties include backpay up to a maximun of 60 daysor half the number of days the employee was employed by the employer, whichever is lesser.

In sum, the new NY WARN law applies to smaller employers and smaller reductions of force, and requires more notice, than its federal counterpart.

WARNing - Don't Forget Local WARN Acts - Part One

Anne Bancroft — Thu, 15 Oct 2009 18:00:53 -0500

The federal WARN Act generally requires employers with over 100 full time employees to provide 60 days notice in the event of a plant closing or mass layoff. Many states have their own versions of WARN as well and businesses implementing covered employment changes must make sure to comply with all applicable plant closing laws.

For example, New Jersey recently implemented the Millville Dallas Airmotive Plant Job Loss Notification Act. This new law requires notice to the Commissioner of Labor and Workforce Development, the chief elected official of the municipality where the establishment is located, each employee to be terminated and the collective bargaining representative. Note that federal WARN requires that each employee receive notice only if not represented by a union.

The penalties under the NJ law are more draconian than under the federal counterpart. Under WARN, liability is reduced based on the amount of notice provided by the employer. Under the NJ law, failure to give the full 60 days subjects an employer to the full penalty, which is one week of severance for each full year of employment in addition to any other employer-provided severance. While back pay received under WARN is credited against the NJ sevevrance entitlement, there is no 60 day cap.

Moreover, NJ law does not recognize the faltering business and unforeseen business circumstances exceptions recognized under WARN, which is particularly significant in the current economic climate. Even loss of a major customer will not excuse compliance with the NJ requirements.

In addition, the "State Response Team" can provide workers with information regarding their legal rights, in addition to job placement counseling, which could influence an employee to bring a claim.

Finally, under the NJ law, an employee who is offered a job in NJ and within 50 miles of the establishment does not suffer an employment loss. WARN requires the new job to be within reasonable commuting distance. Covered businesses in NJ need to comply with both.

More on Retaliation Claims

Anne Bancroft — Mon, 21 Sep 2009 14:19:53 -0500

Not only the victims of alleged harassment or discrimination are protected for exercising their right to complain and be protected. Employees who oppose such practices or participate in an investigation of a harassment or discrimination claim also are protected from retaliation for those activities. The Equal Employment Opportunity Commission ("EEOC") recently filed suit against Sara Lee Corp. for firing an African American employee employed at its Houston facility who complained about allegedly discriminatory practices directed at her and other employees. The director of the EEOC's Houston office commented, "Even if an alleged discriminatory action is found to lack merit, the EEOC will still hold employers accountable for any retaliation related to it."

An employee's stated dissatisfaction regarding diversity efforts alone, however, may not be protected activity. For example, in Hood v. Pfizer, the Third Circuit held that an employee who asked at a meeting "why more wasn't being done to promote diversity within [his department]" did not complain about discrimination but rather expressed a generalized concern about the extent of his employer's affirmative diversity efforts.

As part of any investigation of a harassment or retaliation complaint, employers must ensure that the complainant and any employee participating in the investigation are protected from retaliation. The best way to prevent retaliation is to keep complaints as confidential as possible - if managers and employees don't know about a claim, then they can't take an adverse action related to it. While absolute confidentiality cannot be promised, only those with a need to know should be privy to a complaint. In addition, once the complaint is resolved, even if it is determined to be without merit, as I stated in my last post - it ain't over.

It Ain't Over When It's Over

Anne Bancroft — Tue, 15 Sep 2009 16:57:17 -0500

Employers who take an adverse action against a current employee who brought a complaint or participated in an investigation of a complaint by another employee may face a claim that such action was in retaliation for protected activity. Federal and state anti-discrimination laws prohibit retaliation against an employee for protected activity to the same extent as the harassment or discrimination itself. An employee may even have a claim for retaliation where the underlying claim is resolved or unfounded.

In Burlington Northern v. White, the United States Supreme Court expanded the meaning of retaliation under Title VII in determining that the anti-retaliation provisions were not limited to those actions that affect the terms and conditions of employment. Rather, retaliation can include acts that go beyond those that are employment related, such as conduct by co-workers.

In a recent New Jersey state court decision, Fernando Roa et al v. LaFe and Marino Roa, the Appellate Division, consistent with Burlington Northern, held that the plaintiff could pursue his claims for actions that occurred after his termination ended. Specifically, plaintiffs alleged that their former employer unfairly claimed that the plaintiffs were dismissed for misconduct when they applied for unemployment benefits. In addition, Mr. Roa claimed that the company improperly cut off his health benefits, which he did not discover until after he left employment.

In addition to the conduct alleged in the Roa case, employers need to be careful of other post-employment conduct, such as negative references.

In light of the judicial expansion of the type of conduct that can constitute retaliation under anti-discrimination laws, employers who take adverse action against an employee who has complained about harassment or discrimination, participated in an investigation or engaged in other protected activity need to make sure there is no causal link. If an employee presents a performance, attendance or other issue, then managers should promptly and progressively discipline the employee and not expect to initiate such action about a prior problem following a protected complaint by the employee. Employers also should be aware of whether any employees slated for a lay-off have engaged in protected activity that could be the basis for a retaliation complaint. Such steps protect employee rights and protect employers from retaliation claims that ultimately may be more challenging to defend than the underlying harassment or discrimination allegations.

Agreements not to Reapply

Anne Bancroft — Mon, 31 Aug 2009 09:10:00 -0500

As part of a separation agreement and release in exchange for severance, many employers include a provision that the separated employee will not reapply or be re-employed. Such a provision can protect an employer from retaliation or other claims in the event the employer declines to rehire the separated employee if s/he reapplies. It is important that "employer" in the context of a no-reemployment clause be defined to reflect properly the understanding of the parties - which entities are covered? The clause should properly protect the employing entity but not be too broad.

The Equal Employment Opportunity Commission recently filed suit against AT&T, Inc. accusing it of retaliation against older workers for refusing to rehire them. This suit is consistent with the EEOC's position that no-reemployment clauses can be per se retaliatory, even where they are consideration for a release agreement.

In order to protect themselves in the event of a challenge, employers should make sure that no-reemployment clauses do not have a disparate impact on any protected group (such as older workers) and include a severability clause in any separation agreement to prevent invalidation of the release in the event one clause is stricken.

To Everything There is a Season

Anne Bancroft — Thu, 13 Aug 2009 11:56:41 -0500

Guest Entry:

To Everything There is a Season"

-the Byrds

Just like the weather, every business has its seasons. As we wrap up the summer, you may be entering your busy season. Hopefully, you have taken steps earlier in the year to be ready, including:

Developing a Recruiting Process
Including set questions, assessment tools, and management training to assist with Title VII, Executive Order 11246, and state anti-discrimination law compliance
Updating Job Descriptions
Outlining the responsibilities, requirements, and FLSA classification of each job to improve productivity and reduce exposure to FLSA and ADA and other federal and state anti-discrimination laws
Designing a Performance Evaluation Program
Including templates, process, and employee and managerial training so that employees receive formal, fair, and regular feedback on their performance

Is this a slow season for your business? If so, then now is a great time to take the proactive HR measures that you just can't seem to get around to during busier times. These include:

Anti-discrimination/Non-harassment Training
Annual training of managers and employees on the company's non-harassment policy and procedures helps minimize employer exposure to Title VII, ADA, ADEA, and state anti-discrimination laws and improve morale and productivity in the workplace
Audit of personnel files and I-9s
Assists with IRCA, Title VII, ADA, ADEA, and state anti-discrimination law compliance
Handbook Updates
Communicates company policies and incorporates federal and state laws including 2009 updates to the FMLA, ADA and NJ Paid Family Leave
HR and Facility Audit
Identifies gaps in the HR structure and opportunities to close these gaps as well as potential exposures to violations of Title VII, ADA, ADEA, and state anti-discrimination laws

Of course, regardless of what "season" you're in, from a HR professional's point of view, it's never the wrong time to start on any of these initiatives.

Cristina L. Amyot, SPHR

President & CEO

EnformHR

125 Half Mile Road, Suite 200
Red Bank, NJ 07701

Office: 732-534-7844

www.enformhr.com

Cristina L. Amyot, SPHR is the President and CEO of EnformHR®, LLC a Human Resources firm specializing in helping companies protect and grow their business. She can be reached at 732-534-7844 or camyot@enformhr.com.

Telecommuting

Anne Bancroft — Sat, 01 Aug 2009 09:17:53 -0500

Allowing employees to work remotely can be a RIF-alternative that saves employers expenses for overhead, rent and facilities. In addition, it can be a low or no cost benefit to retain and recruit talent when other benefits or compensation may be cut. It can also save employees computer expense and time.

When considering either a specific request for telecommuting or the implementation of a telecommuting policy, employers should look at the following:

• Is the individual employee and the work s/he performs suitable? Has the employee’s in-office performance been satisfactory? Is the employee reliable and a good communicator?

• Can the employee’s supervisor manage a telecommuting relationship? Does s/he have the time? Is s/he a good communicator and evaluator?

• What will be the impact on the rest of the workforce? Will other employees resent the relationship? Will there be a flood of requests? Is there capacity to provide in-office support to the telecommuter?

• How will the employer respond to the risk of liability for injury to the employee or third-parties in the employee’s home or damage to equipment?

Telecommuting can raise many problems that need to be addressed before implementing a policy or permitting such an arrangement. First, in order to protect itself from liability for injuries, the employer needs to make sure that the employee is in a safe work area. The employer also needs to evaluate the employee’s performance and productivity through time recordation and appropriate supervision. It is critical that the method and frequency of communication with supervisors, co-workers and clients or customers be established. In addition, the employer needs to ensure that its confidential and proprietary information and interactive systems are secure. Finally, other legal issues to consider are whether the employee can work from home during a leave of absence; whether there are tax, jurisdiction, or policy implications when employees work in another state; and, whether there is an applicable collective bargaining agreement.

One of the most significant legal concerns is whether telecommuting is a reasonable accommodation of a disability under the Americans with Disabilities Act (“ADA”) or other applicable anti-discrimination laws. Disabled employees must be able to perform the essential functions of their job, with or without reasonable accommodation, in order to be protected by the ADA or similar state laws. While employers may assume that regular attendance is an essential job function, it may not be if telecommuting is an option, whether based on policy or past practice.

The Equal Employment Opportunity Commission suggests that the following factors be considered in determining the feasibility of an employee working at home:

1. The employer is able to supervise the employee adequately;

2. Any duties require use of certain equipment or tools that cannot be replicated at home;

3. There is a need for face-to-face interaction and coordination of work with employees;

4. There is a need for in-person interaction with outside colleagues, clients or customers; and/or

5. The position requires the employee to have immediate access to documents or other information located only in the workplace.

Under the ADA regulations and various court decisions, reasonable accommodations run a broad spectrum including leaves of absence, reassignment, changes in work schedule, “light duty” work, transfer to a vacant position, and modification of work area. Employers need to consider whether they can provide other accommodations that enable employees to perform their essential functions in the workplace, rather than granting a request to work from home, or whether they can truly demonstrate that allowing employees to work from home would constitute an undue hardship.

In order to address the foregoing concerns, employers should implement an adequate, effective telecommuting policy, which:

• Provides eligibility criteria: job type, skills, performance

• Addresses safety and liability issues, including guidelines for the work area and use of equipment and supplies

• Requires regular communication and interaction, including business and social office events

• Restricts child (or other dependent) care while working

• Addresses compensation, time recordation and reimbursement of expenses

• Requires confidentiality and security of interactive system

• Provides guidelines and requirements for work assignments, attendance and work hours

• Provides for “results-oriented” evaluation of performance

• Addresses application of Company policies, including the Employee Handbook

• Requires employees to review on-site statutory notices

• Maintains the right of the employer to end the arrangemen

In addition to implementing a policy, an employer also should train the employees, co-workers, support staff and supervisors involved in the telecommuting arrangement. Employees should be provided with guidance on applicable policy; setting up a home office; resisting distractions; adjusting their families to the arrangement; use of interactive systems and equipment; and, maintaining communication. Employers should instruct managers how to identify good candidates and positions; manage varied work schedules; assign work; monitor work performance, attendance and hours worked; maintain communication; and use interactive systems. Support staff and co-workers should understand work assignments and communication.

If an employer is responding to an individual request rather than implementation of a policy, an individual agreement may be appropriate. Such an agreement should include: the employee’s agreement to follow Company policy; the employer’s right to end arrangement; a provision that employer rights are not limited; the supervisor’s agreement; a disclaimer of liability; and, individual requirements and performance goals. An employer, however, should exercise caution in responding to individual requests in the absence of a policy and training because all of the issues and concerns are applicable to any telecommuting arrangement, whether permanent or temporary. In addition, it is important that responses are consistent so as to avoid claims of discrimination or disparate impact.

Clearly, a policy stating that “the employer will respond to requests for telecommuting on a case-by-case basis” or permitting telecommuting on an informal, ad hoc basis can create many issues and possibly liability for an employer. Employers are better served by giving careful consideration to the pluses and minuses of telecommuting and establishing guidelines or agreements in advance.

This article originally appeared in the June 5, 2008 issue of Employment Law 360.

Employment Policies and At-Will Employment

Anne Bancroft — Fri, 24 Jul 2009 13:23:36 -0500

While progressive discipline and adherence to company policy can help an employer defend a challenge to an adverse employment action, employers need to keep in mind that, in the absence of agreement otherwise, in most jurisdictions employees are "at-will." "At-will" employment means that employees can be terminated at any time for any reason (other than unlawful), or no reason at all, with or without notice. Likewise, at-will employees can terminate their employment in the same manner. In a non-union setting, employers should avoid policies that commit them to steps in imposing discipline for performance, conduct or absenteeism or responding to employee complaints. Even with a disclaimer advising that policies are not contractual and are subject to change, employees can assert claims based on reliance, contract, or differential or discriminatory application. It is much better for employers to retain discretion.

In addition, employers should avoid policies that are confusing and difficult to implement, or that will not be applied in practice. Employers should reconsider policies where exceptions swallow the rule.

For more on employment policies that can do more harm than good, see my comments on SHRM's website at: www.foxrothschild.com/Newsstand/News.aspx

EEOC Issues Technical Guidance on ADEA Waivers

Anne Bancroft — Mon, 20 Jul 2009 13:45:15 -0500

On July 15, the Equal Employment Opportunity Commission (EEOC) issued technical assistance on waivers of discrimination claims, including age discrimination claims, in a Q&A format(www.eeoc.gov/policy/docs/qanda_severance-agreements.html).

The guidance, directed at employees faced with waiving claims, explains the following criteria for a release to be enforceable:

- The release must be in exchange for consideration over and above that which an employee is already entitled.

- The release must be knowing and voluntary, which means:

it was written in a manner that was clear and specific enough for the employee to understand based on his education and business experience;
it was not induced by fraud, duress, undue influence, or other improper conduct by the employer;
the employee had enough time to read and think about the advantages and disadvantages of the agreement before signing it;
the employee consulted with an attorney or was encouraged or discouraged by the employer from doing so;
the employee had any input in negotiating the terms of the agreement; and
the employer offered the employee consideration (e.g., severance pay, additional benefits) that exceeded what the employee already was entitled to by law or contract and the employee accepted the offered consideration.

In order to ensure that a release is knowing and voluntary, the release should name the claims to be released, including discrimination claims.

Also, as explained in the new guidance, even if an employee signs a release, s/he can still bring a claim, either challenging the waiver itself or with the EEOC or other agency (which would not be covered by an employee release). However, arguably a severance agreement can require an employee to return any severance payment attributable to a claim the employee pursues (under a "tender back" provision), or any recovery on the employee's behalf. A release cannot require an employee to waive his/her right to bring an EEOC charge or cooperate in an EEOC investigation. A release also cannot waive prospective claims.

The new guidance also explains the additional requirements that must be met for an effective release of an age claim under the Age Discrimination in Employment Act. Specifically:

A waiver must be written in a manner that can be clearly understood.
A waiver must specifically refer to rights or claims arising under the ADEA.
A waiver must advise the employee in writing to consult an attorney before accepting the agreement.
A waiver must provide the employee with at least 21 days to consider the offer.
A waiver must give an employee seven days to revoke his or her signature.
A waiver must not include rights and claims that may arise after the date on which the waiver is executed.
A waiver must be supported by consideration in addition to that to which the employee already is entitled.

In the context of an exit incentive, which is a termination of two or more employees, a release of an age claim also must give the employee 45 (instead of 21) days to consider and identify the decisional unit, eligibilty factors, time limits, job titles and ages of all individuals who are eligible for the program, and the job titles and ages of all individuals in the same job classifications or organizational units who are not eligible for the program.

At the July 15 commission meeting at which the guidance was issued, EEOC Acting Chairman Stuart Ishimaru commented that more older workers are staying on the job as a result of current economic conditions; more workers are age 40 and older; and, EEOC age charges are rising (private sector age discrimination charges in fiscal 2008 increased by 29% compared with the prior year and comprised neary 25% of all EEOC charges). While the burden on employees to prove age discrimination may be high under current judicial interpretation of the ADEA, employers still must avoid age-related stereotypes and "ageist" comments in the workplace.

The Employee Handbook: Sword and Shield

Anne Bancroft — Mon, 13 Jul 2009 16:11:37 -0500

While no law requires an employer to have a handbook, employers should implement and distribute certain policies in order to defend themselves from potential claims from employees. The employee handbook is an appropriate, centralized and convenient medium for doing so. In addition, the handbook can be an important resource to employees who have questions about company policies, work rules, and benefits. Equally important, the employer can use its handbook to put forward a positive corporate image to its employees, which can be effective in highlighting favorable benefits, keeping employee morale high, and avoiding union organization.

While there is no "one size fits all" employee handbook, employers should consider the following policies when implementing an employee handbook:

- Disclaimer: All employee handbooks should include a prominent disclaimer at the beginning of the handbook advising employees that the handbook is not a contract, that employees are employed at-will, and that the employer can terminate their employment or change benefits at any time for any reason. The employer should require employees to sign an acknowledgment that they received the handbook and reviewed and understand its contents, including the at-will disclaimer.

- Privacy issues: Employers now have the capability to monitor computers, e-mail, and telephones; videotape; conduct drug and genetic testing; and eavesdrop. Many states recognize that employees have a common law protection from invasion of privacy by their employer and recognize tort claims for violation of that right, including claims for defamation, false imprisonment, false arrest, and intentional infliction of emotional distress. Accordingly, employers should include policies in the employee handbook that diffuse expectations of privacy, where reasonable to do so.

For example, the handbook should include a policy that advises employees that any containers or packages (regardless of ownership) that they carry in or out of the company’s premises are subject to inspection, as well as desks, lockers, cabinets ( as well as voice mail, e-mail, and computer data) and other similar items on company property. The employer can provide that a refusal to consent to such a search is grounds for discipline of the employee.

In addition, employers must have a policy advising employees that the e-mail system is owned by the employer and that employees have no reasonable expectation of privacy in their e-mail communications and internet searches. The policy should advise employees that the employer can retrieve even deleted messages. The policy should prohibit employees from accessing each other’s e-mails, as well as illegal and improper uses of e-mail and the internet, such as pornography, obscenity, harassment, and gambling. The employer also should prohibit employees from subscribing to information without employer permission; violating copyrights; or, issuing defamatory statements. Employers should issue passwords to employees and prohibit them from sharing those passwords, while maintaining the employer’s right to know all passwords and access an employee’s e-mail at any time.

Employers must remember that even with such notice, employer monitoring of personal communications, and attorney-client privileged communications, is still restricted.

- Telecommuting: For employers, telecommuting offers the benefits of decreased office space requirements and more flexibility in hiring. The employee gains flexibility in terms of work hours and commuting. However, there are several potential pitfalls presented by allowing employees to telecommute, including lack of direct supervision, costs involved with establishing an appropriate home work environment, and attendant liability and implementation issues. To address these issues, a telecommuting policy should include a statement that telecommuting is at the employer’s discretion; a length of service and satisfactory performance requirement; a trial period; restrictions on child and other dependent care; safety and confidentiality protections; and, requirements for face-to-face and telephone or other regular interaction. In order to comply with the record-keeping requirements of federal and possibly state wage and hour laws, the employer must require non-exempt employees to keep and submit a record of all hours worked. In addition, the employee must be required to notify the employer immediately of any injuries sustained in the home office.

- Non-harassment: In response to a hostile work environment harassment claim, in the absence of a tangible employment action, the employer may raise an affirmative defense based on a showing that it exercised reasonable care to promptly prevent and correct any sexually harassing behavior, and that the employee unreasonably failed to avail himself of any preventative or corrective opportunities offered by the employer. A non-harassment policy, which the employer has distributed to employees and in which the employer has trained employees, is a critical part of such a defense. A non-harassment policy should include a clear statement that the employer will not tolerate any harassment on the basis of any protected trait or activity. The policy should define harassment and specify that its terms apply to work-related settings such as business trips and business-related trips, as well as in the office. The policy should cover all employees, managers, and outside clients or vendors doing business with the company. While the employer may be limited in what action it can take against non-employees for harassing its employees, the employer can limit, change, or end the relationship with the client or vendor who is the source of the harassment. The non-harassment policy should advise employees how to report harassment that they experience or witness; how the employer will investigate the alleged conduct and communicate the results; how an employee can appeal the conclusion; and, what sanctions may be imposed (including termination). The non-harassment policy should explicitly prohibit retaliation against an employee for making a complaint.

- Reasonable accommodation: Under federal and some state anti-discrimination laws, employers may have an obligation to “reasonably accommodate” an employee’s disability or religious belief. Generally, reasonable accommodations are those adjustments or modifications which specifically assist the employee in performing the duties of a particular job. However, an employer is not required to make reasonable accommodations where the accommodation(s) would cause the employer undue hardship, such as where the accommodation is too expensive or disruptive or would be ineffective. A reasonable accommodation policy should institute a procedure for evaluating requests and, where appropriate, for providing the appropriate accommodation to the employee. The policy should require the employee to report his or her disability or religious belief to the employer and make a request for an accommodation where the condition at issue is not readily apparent. The employer must balance the request for the accommodation against the hardship it may impose, based on the employer’s size, type and financial strength. Employers should document requests for accommodations, discussions pertaining thereto, and decisions regarding implementing or denying the request.

- References: Employee references can be the basis for defamation and retaliation claims against former employers for releasing potentially damaging information regarding an employee. Accordingly, employers must control who responds to reference requests and what information is released. An employee reference policy must designate an individual to respond to requests and prohibit other employees from doing so. The policy should limit the information that will be released, such as to job title and terms of employment, unless the former employee has signed his or her consent to the release of any additional information.

- Cell phone use: In order to limit liability, employers should include polices in their handbooks governing cell phone use for business purposes by driving employees. Employers also should be cognizant of state laws that place restrictions on cell phone use while driving.

- Leaves of absence: Employers who are covered by the Family and Medical Leave Act ("FMLA") must have a FMLA policy in their employee handbooks. In addition to addressing employee rights and responsibilties under the FMLA, the policy should address interaction with any applicable state leave law rights, other employer leaves, and paid time off.

- State laws: Employment laws differ from state to state. Mutli-state employers must supplement core policies with applicable state law requirements.

- Other: In general, an employee handbook should contain certain basic policies addressing, for example, compensation, leaves, equal employment opportunity, substance abuse, and benefits. The handbook also can describe a company’s structure, goals, and philosophy.

Drafting and implementing the handbook are only the first steps. Employers must train supervisors in how to apply the policies, as deviation from policies and practices can be evidence of improper motive, such as discrimination, as well as create feelings of unfair treatment among employees.

While every employee handbook must be tailored to the business at issue, depending on its goals, culture, location, and practices, all handbooks can have the common results of meeting legal obligations and bringing structure to the workplace.

Effect of Furloughs on Employee Benefits

Anne Bancroft — Mon, 06 Jul 2009 14:55:59 -0500

In order to avoid layoffs and reduce costs, many employers are imposing unpaid leaves of absence, or furloughs, on active employees. How do these leaves affect employee benefits?

Section 401(k) and Profit Sharing Plans

It may be more difficult for furloughed workers to meet the 1,000 hour service threshold, permissible under the tax code and often defined by employers. Some employees may have to wait an additional eligibility period, such as until their next anniversary. The same issue could arise with respect to eligibility requirements for profit-sharing plans, and vesting in pension plans.

Unpaid leaves also could affect employer matches and profit sharing contributions. How matches have to be paid is defined by the plan documents.

If an employee has borrowed from his/her 401(k), which may be a more frequent occurrence in today's economy, 401(k) plan loan repayments could also be affected, as such loans are usually repaid through salary reductions. If a leave is unpaid, the employee will have to write a check or s/he could go into default.

Employers can address some of these problems by amending plan documents to credit employees for service during furloughs.

Health Insurance

Some employees also may lose health insurance if their hours dip below the threshold to participate in an employer's plan.

In order to address this issue, employers could again treat furloughed employees as active for insurance purposes. Employers also could modify their plan documents and contracts with insurers to cover employees who work fewer hours.

COBRA Subsidy

Employees who lose insurance due to a reduction in hours or furlough are generally eligible to continued coverage under COBRA, but may not be eligible for the new COBRA subsidy of their premium payments. Under the new COBRA subsidy, if an employee is forced to quit due to a reduction in hours or furlough, the separation could be an involuntary termination qualifying the employee for the COBRA premium subsidy.

Other Fringe Benefits

Employee contributions to flexible spending accounts also may be affected, for example if an employee needs less daycare because s/he is on an unpaid leave of absence. Whether an employee can change his/her election depends on whether that employee qualifies as having a change in status under Section 125. A reduction in hours alone may not be enough.

Employer Benefits

Employer policies, such as those in an employee handbook, should address how eligibility for or accrual of employer-provided benefits, such as paid time off or tuition assistance, are affected by voluntary and involuntary unpaid leaves, and employees on unpaid statutory leaves, such as under the Family and Medical Leave Act, or other applicable state leave laws, should be treated as favorably.

Age Must Be Main Factor Leading to Adverse Employment Action

Anne Bancroft — Wed, 01 Jul 2009 14:36:13 -0500

Adverse employment actions, such as reductions in force, are often challenged by older workers. A recent decision of the United States Supreme Court may make it easier for employers to defend themselves against such claims.

In Gross v. FBL Financial Services, Gross, an employee of FBL, sued for age discrimination after FBL demoted him and transferred some of his responsibilities to a younger worker. The Supreme Court held that employees asserting federal age discrimination claims under the Age Discrimination in Employment Act ("ADEA") must prove that age is the main factor behind an adverse employment action. The issue in the FBL case was whether employees must present direct evidence of age discrimination in order to shift the burden of proof to the defendant under a "mixed-motive" analysis (where a decision is allegedly based on both permissible and impermissible factors). The Court concluded that under the ADEA, unlike Title VII, the employee must show that "but for" the employee's age, the employer would not have implemented the adverse action - not just that age played a part in the decision.

A legislative response to this employer-friendly decision is a definite possibility.

Corporate Wellness - Is it Healthy for Employers?

Anne Bancroft — Mon, 15 Jun 2009 19:57:03 -0500

In an unhealthy economy, keeping employees healthy may be a way for employers cut costs while attracting and retaining talent.

There are many employer benefits to having a healthier workforce. Healthy employees may be absent less, take fewer leaves of absence, be more productive, work longer, and have a better overall quality of life. In addition, and probably most important to most businesses, employers may pay less for health insurance. With these goals in mind, many employers are implementing corporate wellness initiatives.

Effective corporate wellness programs identify and reduce risks and educate and motivate employees to improve individual health. Discounts or penalties on health care premiums, health exams and screenings, health coaches, energy management exercises, weight-loss and smoking cessation programs, and rewards such as gift cards or vacations are a few approaches used by employers. Some employers go even further and implement outright restrictions on employment or health insurance based on weight, smoking, and even hazardous activities, such as skydiving. While the results may be beneficial to both employers or employees, the end won’t necessarily justify the means. Unless implemented properly, efforts to improve employee health can face challenges from several fronts, including claims of invasion of privacy and unlawful discrimination.

Many corporate wellness initiatives are about behavior that occurs outside of work. Most workplaces are non-smoking, but many employers don’t want their employees to smoke at all. Employers can offer only healthy food and snacks in the cafeteria, but that doesn’t help if the employee eats junk and fast food the rest of the time. But employer attempts to regulate or prohibit such “outside” behavior and to monitor employee compliance can give rise to claims for invasion of privacy.

Another potential source of privacy rights for employees is the Health Insurance Portability and Accountability Act (“HIPAA”), which protects the privacy of personal health information. HIPAA nondiscrimination regulations regarding “bona fide wellness programs” require that wellness programs be designed to promote good health; allow for annual qualification; make awards available to all similarly-situated individuals; and, provide a reasonable alternative, and notice thereof, to employees unable to comply with program requirements due to a medical condition. Under the recently promulgated regulations, the value of rewards (such as discounts, contribution rebates, or waiver of cost-sharing requirements) for the wellness program is limited to 20% of the unsubsidized cost of employee-only coverage under the health insurance plan. Compliance with HIPAA, however, does not mean a program will survive challenges on other grounds, such as discrimination.

Some employees may feel harassed or discriminated against when faced with healthy workplace initiatives. Employees may claim that they are treated differently because of their protected status (“disparate treatment”), or that their employer’s policy or practice adversely impacts a protected group (“disparate impact”). Accordingly, wellness program participation, use and confidentiality of employee health information, and screening must be consistent with federal, state and local anti-discrimination laws.

The Americans with Disabilities Act (“ADA”) - which was recently amended to expand its protections - for example, prohibits discrimination against a qualified individual with a disability who can perform the essential functions of the job with or without reasonable accommodation. A disability is defined as a physical or mental impairment that substantially limits a major life activity. Employees also are protected from discrimination if they are “regarded as” or “have a record” of a disability – even if they are not currently disabled – and if they associate with a disabled person. Employers should avoid making assumptions about employee health based on appearance, age, or any other criteria. I n addition, under the ADA, employers have an obligation to provide a reasonable accommodation to a disabled employee who can perform the essential functions of the job. This obligation would apply to an employee’s participation in a corporate wellness program.

The Equal Employment Opportunity Commission (“EEOC”) has indicated, with qualifications, that voluntary wellness programs do not violate the ADA. Penalizing employees for not participating, such as through higher insurance premiums, can render a program involuntary, however.

In addition, the ADA limits the use of medical examinations and inquiries in hiring and employment. Generally, employers are not permitted to make disability-related inquiries or to conduct medical examinations unless job-related and consistent with business necessity. Many wellness initiatives use Health Risk Assessments (“HRAs”) to obtain employee health information. The EEOC has indicated that HRAs are permissible where they are part of a voluntary wellness program - but may be discriminatory if completion is required in order to participate in the program. However, behavioral questions regarding eating, sleeping, exercise and other habits, may fall outside the scope of ADA restrictions. Health information obtained from HRAs must be kept confidential. It remains to be seen whether the recently enacted protections to genetic information including medical histories and other data solicited on HRAs.

Some state or local anti-discrimination laws also prohibit discrimination on the basis of “disability” and/or “handicap,” and may define those conditions more broadly than a “disability” under the ADA. Weight is an area of focus for many wellness programs. Obesity, usually where morbid or caused by another medical condition, may be a disability under ADA or state law if it meets the statutory definition, and some local ordinances specifically prohibit discrimination on the basis of weight.

Corporate wellness programs also could be subject to challenge on the basis of other protected classifications, such as race, national origin, gender and age, if employers screen or penalize employees for conditions more prevalent among those protected groups. Certain health conditions may be exhibited more frequently in older workers or employees of a particular race or national origin. Some states also prohibit discrimination on the basis of atypical cellular or blood trait or genetic information, which could also constitute a basis for challenging corporate wellness initiatives such as health screenings.

Many states, including New York, New Jersey and Colorado, also restrict employers from engaging in “lifestyle discrimination” which can range from discrimination against smokers to discrimination based on any lawful activity off employer premises during working hours. Employers attempting to regulate out-of-work activity may run afoul of these laws.

Employers who use physical characteristics in employment decisions, such as hiring, could be subject to claims for discrimination. Employers should avoid disability-related inquiries; health or physical-related criteria; restrictions on personal activities; and physical or medical testing unless work-related and applied consistently across employees in a job category and not just to members of one protected class.

While there are many benefits to improving employee health, reducing the cost of health insurance is a primary consideration. Some employers impose surcharges or higher premiums on employees who do not meet the company wellness thresholds or who refuse to participate in wellness initiatives. But there are other alternatives that can significantly reduce costs without employer involvement in employee health. For example, audits of health plans to determine whether enrolled employees and dependents are eligible – such as confirming current employment, marital, domestic partner or civil union status, and dependant age and relationship – can significantly reduce costs. Higher deductibles and health savings accounts (“HSAs”) can make employees more financially responsible, and thus provide incentives for employees to improve their own health.

Despite these challenges, more employers are beginning to take aggressive steps to improve the health of their employees, and benefiting from the results. Companies interested in implementing wellness programs should keep the following guidelines in mind:

- Maintain safe and healthy work environments.

- Use a third party to implement corporate wellness programs.

- Use voluntary programs, such as employer-paid physicals, on-site exercise facilities and personal trainers, wellness reimbursements, smoking cessation and weight-loss programs, health coaches, and healthy food options in the cafeteria/vending machines.

- Audit health plan participation.

- Aggregate data and trends.

- Maintain confidentiality of individual health information.

- Incentivize don’t penalize.

- Focus on education.

- Corporate wellness and employment decisions need to be separate.

- Train employees who implement corporate wellness programs to comply with the law and company policy.

Properly implemented wellness programs that are voluntary; motivate through incentives rather than penalties; use health information in a permissible way; maintain confidentiality of health information; operate at arms length from hiring and employment decisions; and, focus on education and behavior can achieve the goals of a healthier and more productive workforce and lower health insurance costs without subjecting employers to liability.

For more detailed information on corporate wellness programs, see my recent article from The Practical Lawyer at: www.foxrothschild.com/Newsstand/News.aspx

Personnel Files

Anne Bancroft — Mon, 01 Jun 2009 14:40:00 -0500

A personnel file is one of the most relevant pieces of evidence in bringing or defending an employment-related claim.

What should be in the file?

- Pre-employment documents, such as the employment application, resume, background check information (including notices and authorizations under the Fair Credit Reporting Act when applicable), college transcripts, offer letter, new hire reporting, and copies of any relevant licenses.

- Job description, which should include a statement of relevant qualifications and essential and non-essential job functions. Job descriptions are relevant to claims for discrimination based on disability or religion, and failure to accommodate, as well as claims for mis-classification as exempt under federal and/or state wage and hour law.

- Employment records related to hiring, promotion, demotion, transfer, layoff, rates of pay, compensation, and education and training.

- Agreements, such as employment agreements, confidentiality agreements and other restrictive covenants.

- Emergency contact information.

- Records relating to employment practices and policies, such as acknowledgement of receipt of the company's employee handbook and non-harassment policy and record of attendance at company harassment avoidance training. Such acknowledgements are very helpful in proving that an employee was on notice of employer prohibitions against harassment and discrimination, as well as reporting procedures.

- Disciplinary notices or warnings. It is difficult to defend a performance or behavior based adverse action in the absence of any documentation.

- Complaints or compliments.

- Performance evaluations. See "Evaluating Employee Evaluations" posted April 13, 2009 for more on the importance of performance evaluations.

- Exit interviews

- Termination records, including a separation agreement.

What should not be in the personnel file?

- Medical records

- EEO data

- Immigration forms (I-9)

- Safety training records

These should be maintained in separate, confidential files.

Who should have access?

Whether or not an employee has a right to see his/her personnel file differs from state to state. In some states, employees may have a statutory right to access and possibly copy their file. Even in the absence of a statutory right, some courts have recognized a claim for retaliation when an employee has asked to look at his/her file when seeking information regarding an allegation of discrimination or harassment.

Supervisors with a need to know should have access to personnel information, and possibly medical information when implementing a request for reasonable accommodation of a disability.

Employers also should keep in mind that auditing or investigating agencies, such as the EEOC, INS, OSHA,and state and federal Departments of Labor also may access personnel files. In addition, if an employee brings a claim, his/her personnel file may be discoverable, as well as the personnel files of other, relevant employees and even the employee' s supervisor. Employers should keep these eyes in mind.

What Employers Can Do to Get the Laptop Back

Anne Bancroft — Tue, 26 May 2009 14:05:43 -0500

If a departing employee refuses to return his laptop, in many states an employer cannot deduct the value of the laptop from the final pay, or at least without employee authorization. And the laptop itself in many cases is the least significant aspect of the loss as documents, intellectual property and confidential information most likely went with it.

The Computer Fraud and Abuse Act (CFAA) may provide some relief. In Lasco Foods, Inc. v. Hall and Shaw Sales Marketing & Consulting, 2009 WL 151687 (E.D.Mo. 2009), the court held that the employer satisfied the "loss" and "damage" elements of the CFAA by showing that the employees at issue refused to return a computer when requested and deleted information from the computer. Significantly, the court noted that "loss" within the meaning of the CFAA included the cost of investigating or remedying damage to a computer, and the cost incurred because service was interrupted. In this case, the employer had to conduct a forensic investigation to determine what was lost.

Under this decision, deletion of information from a single laptop could constitute damage under the CFAA. Notably, the court did not consider the availability of the information elsewhere, such as on the company's network, as a factor. Moreover, the Lasco court considered withholding the laptop to be an "interruption in service" under the CFAA because the company could not use its property. Finally, the cost of hiring an expert constituted a "loss."

Under Lasco, the CFAA can be an effective way for employers seeking to retrieve laptops and confidential or proprietary information from departed employees.

Are you safe from sabotage?

Anne Bancroft — Wed, 20 May 2009 13:49:56 -0500

The risks of employee terminations no longer end with a signed separation agreement and release. Now employee saboteurs can cause catostrophic damage weeks or months after discharge, even after they are off-site. Computer sabotage can destroy a business.

The “Lordstown Syndrome” of Today

In response to a rigid system of quality control imposed by General Motors at its Lordstown, Ohio plant in the 1970’s, employees who perceived their assembly line work to be dehumanizing committed acts of employee sabotage on the assembly line that resulted in the manufacture of lower quality cars. This event gave rise to what is now commonly known as the “Lordstown Syndrome,” defined as acts of sabotage committed by workers who perform dehumanizing, monotonous work. Aspects of the syndrome include high absenteeism, low productivity, sabotage and wildcat strikes.

Employees can wreck havoc in many ways – damaging supervisors’ cars or personal items; damaging company property; arson; destroying retail merchandise; interfering with deliveries; failing to perform assigned duties or performing them improperly; damaging the company’s reputation – the list is limited only by the imagination of the employee. Dependence on computers, however, has raised the stakes to an unprecedented level, and in this area computer savvy employees can destroy a business without warning. In addition to the horrendous practical and economic consequences of computer sabotage, an employer can face liability for release of the confidential information of clients and customers and for failure to protect assets under the Sarbanes Oxley Act.

Who is the Employee Saboteur?

Generally, the employee saboteur is seeking revenge for a perceived wrong inflicted on the employee, peers, or even society as a whole. Employees subject to performance warnings, demotion, or termination can be suspects. Employees who oppose the employer’s activities on philosophical or political grounds could also seek to commit harm. Unfortunately, an employee can be laying the groundwork for an act of sabotage, perhaps as insurance against the inevitable discipline or discharge, long before the employer takes any action against the employee.

Computer Sabotage

Employees can intentionally misuse or exceed an authorized level of network, system or data access in an unauthorized or illegal attempt to view, disclose, retrieve, delete, change or add information to an employer’s interactive systems. Employees can use techniques such as “data diddling” (alteration of data before or during its entry into the system); “piggybacking” (accessing the system without detection); “Trojan horses” (instructions imbedded in a program that carry out unauthorized functions); “logic bombs” (special programming instructions scheduled to detonate at a specified time); and, viruses.

U.S. v. Lloyd is an illustrative case. Omega Engineering Corp. employed Timothy Lloyd as its only computer system administrator. The government alleged that during the course of his employment Lloyd was an uncooperative, obstructionist, and belligerent employee who had engaged in verbal and physical altercations with other employees. Witnesses testified that he repeatedly elbowed, shoved and bumped colleagues in the hallways. In May, 1995, because of these interpersonal problems, Omega transferred Lloyd to a non-supervisory position. Although the company characterized the move as “lateral,” Lloyd’s supervisor testified that the removal of supervisory responsibilities actually constituted a demotion. In addition, Lloyd’s percent increase and evaluation were lower than in prior years. In June, 1996, Lloyd instituted a policy requiring all employees to “clean-up” individual computers and save files to the file servers as opposed to their own back-ups. Shortly thereafter, concerned that access to the computer network was too centralized in Lloyd, the company directed Lloyd to provide access to three other management employees, but Lloyd never did so. Following another altercation with a co-employee, Omega terminated Lloyd’s employment on July 10, 1996.

On July 31, 1996, Omega lost more than 1,200 programs, some used to manufacture Omega’s specialized products, causing Omega a 9% decrease in growth and losses of approximately $10 million. Not one individual computer had back-up and the programs on the file server were deleted and purged and could not be retrieved.

The government alleged that Lloyd sabotaged the network of Omega by planting a time bomb prior to his termination following his transfer/demotion and less than favorable performance review and raise. The government pointed to Lloyd’s level of access to the network; advanced computer programming skills; tests of the time bomb while Lloyd was present in the office; program and commands on Lloyd’s home computer hard-drive; acceptance of another position prior to his termination from Omega; and, threatening and boastful comments Lloyd made to co-workers prior to his termination. Lloyd was convicted on one count of computer sabotage in violation of the Computer Fraud and Abuse Act. The court sentenced Lloyd to 41 months in prison and fined him $2,043, 394 in restitution damages.

An Ounce of Prevention

Employers must take both legal and practical steps to prevent employee sabotage before it occurs.

Legal advice:

° Draft and implement policies that address the use of the internet; use of computers, information networks, and systems policies; and, use of passwords. Make sure employees understand the limits of their access and the employer’s right to monitor employee use. Obtain signed acknowledgements from employees.

° Include computer system use and confidentiality provisions in employment and separation agreements.

° Enforce contracts, agreements, collective bargaining agreements, policies and rules.

Practical protections:

° Carefully screen applicants, particularly for computer or technology positions. Employers should be wary of applicants with a persecution complex or cause.

° Justice and fair treatment are important to employees. Equitable personnel policies, evaluation processes, progressive discipline, open communication with management, and employee assistance programs can give employees a voice. Job demands should be reasonable.

° Increased security measures should be implemented. Employers should:

- Advise employees in writing, via policy, on-screen pop-ups, and/or agreement, that the employer monitors their activities and that their privacy rights in the workplace are limited.

- Take advantage of the monitoring rights permitted them and ensure that management is vigilant about employee actions.

- Limit the personal items that employees can bring into the workplace (personal laptops, camera phones).

- Monitor remote access to a company’s system.

- Use and rotate confidential passwords.

- Limit access to the employer’s facilities and computers.

- Include in job descriptions responsibility for all information with which an employee works.

- Raise the computer sophistication of supervisors and managers. The computer savvy of employees often exceeds that of management.

- Decentralize data and access.

- Conduct periodic audits of computer accounts.

- Improve computer security.

- Protect the premises from physical attacks such as fire and floods.

° Train employees about the company’s policies on computer usage and confidentiality.

° Use a termination checklist for employees, temporary employees, and contractors to ensure that procedures are in place to terminate access to the computer systems and facilities.

° Consider purchasing Cyber Insurance.

Responding to an act of sabotage

Once the fox is in the henhouse, there are still steps employers can take against an employee saboteur.

° Call law enforcement where appropriate. Law enforcement authorities can retrieve stolen property from employees, such as computers, discs and information stored on personal lap-tops. While the property will remain in police custody, it will not be in the hands of the saboteur.

° Obtain and maintain evidence in accordance with the Rules of Evidence (use chain of custody forms, authenticate senders and recipients).

° Use computer forensic specialists to obtain evidence.

Employers also can pursue the following causes of action.

The Computer Fraud and Abuse Act makes it criminal to access a computer without authorization and provides civil and equitable remedies to employers. Liability can be imposed for unauthorized access where the access results in obtaining something of value; causing damage; or, obtaining information. Employers can recoup losses suffered by the misappropriation of trade secrets and other proprietary information if their losses exceed more than $5,000.00 within a year. “Loss” is defined as “any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring the data, program, system, or information to its condition prior to the offense and any revenue lost, cost incurred, or other consequential damages incurred because of interruption of service.”

The Economic Espionage Act makes it a crime to steal or receive (including uploading or downloading) trade secrets. However, proof of this offense may require the employer to disclose the trade secret at issue.

Employers also may have claims under state computer laws.

Employers also can and should seek injunctive relief to prohibit the release of confidential information. Employers can enforce confidentiality agreements and other applicable restrictive covenants. Even in the absence of an employee agreement, employers can pursue claims for the breach of the duty of loyalty.

Conclusion

Employers must protect access to their assets as vigilantly as the assets themselves. Disgruntled or discharged employees pose a significant risk not only to co-employees, at times, but also to the entity itself. While legal remedies are available, they will not fix damage that is done.

This article was previously published in the Labor & Employment Law Quarterly, a publication of the New Jersey State Bar Association.

Corporate Social Responsibility and RIFs

Anne Bancroft — Mon, 18 May 2009 14:58:22 -0500

While some employers may be able to assert the economic downturn as a legitimate business reason for an adverse employment action or as an unforeseeable business circumstance excusing notice under WARN, others may face a heightened expectation from juries and courts to "do the right thing." Drug companies are often challenged to forego profits in the name of corporate social responsibility when faced with demand for drugs such as Tamiflu. Will there be a similar expectation for employers to maintain employment and benefits rather than add to the swell of unemployed or uninsured? If employers may be faced with a social responsibility standard, it is even more critical that an adverse action be defensible. Employers, and those implementing the decisions, must thoroughly understand the underlying business reasons. And employers who don't "share the pain," even if complying with the letter of law, may face an unfavorable reaction to their decisions.w ww.leadgood.org.

For more on the idea of corporate social responsibility and ethics in business leadership, see "Is Employment a Corporate Social Responsibility?" by Jason Meyer at

Why me?

Anne Bancroft — Mon, 04 May 2009 20:36:17 -0500

"Why me?" It's the most basic question in challenging a RIF, but it may be harder to answer than employers think. Poor scores or evaluations alone will not be enough.

The importance of well-reasoned RIFs is clearly demonstrated in EEOC v. Boeing Co., decided April 8, 2009. Boeing selected two female employees, Antonia Castron and Renee Wrede, for lay-off based on their low scores on reduction in force assessments. The two employees then filed charges of gender discrimination with the Equal Employment Opportunity Commission (the "EEOC"), which filed suit against Boeing. The court found that the EEOC had presented sufficient evidence to proceed with its claims based on the following:

Antonia Castron:

- Derogatory and demeaning remarks made by one supervisor, although not directed at Castron, were possible evidence of discrimination.

- Castron's former supervisor had possibly induced Castron to accept a transfer by promising that she would not be laid off during training. However, once training was completed, her employment was terminated based on an evaluation by her new supervisor.

- The new supervisor's evaluation of Castron was suspect because he did not solicit Castron trainer's input or take into consideration her past performance. Notably, the court considered co-worker testimony that the supervisor treated Castron unfairly.

Renee Wrede:

- One year after filing a sexual harassment claim, which Boeing substantiated, Wrede received lower scores in her RIF evaluation and was eventually terminated.

- Male employees who received lower RIF scores were not terminated, but instead found other positions in Boeing, partly due to supervisor assistance that was not extended to Wrede.

- The court noted that the fact that the same actors who ultimately downgraded Wrede's review previously gave her scores high enough to avoid a RIF could create an inference that no discrimination took place. However, the inference in this case was weaker as applied to less overtly positive employment decisions, such as refraining from firing an employee or giving a "lukewarm" review, as compared to positive decisions such as promotion. The court explained "[e]ven an extremely biased supervisor who would never hire or promote members of a particular protected class might still act cautiously by lowering an existing employee's scores over time."

- In some instances, the evaluators could not explain or support the downgraded scores, which were refuted by co-workers.

Employers implementing a reduction in force can learn some important lessons from this decision. An inference of discrimination can be created by: a discriminatory environment based on even non-specific comments about a protected class; assurances, such as of job security, that are later broken; unsubstantiated negative evaluations; a disregard of co-worker assessments; and, favoritism.

Front line supervisors must be able to substantiate their decisions objectively. Management cannot rely on poor evaluations or RIF assessments only without testing the supervisor's decision. Courts and juries will not accept explanations of adverse employment decisions on their face, and in the absence of credible substantiation, will attribute suspect and even discriminatory motives to employers.