BUT, months later, after the manager had been suspended and had his pay docked (a “fine”), the employer has fired the manager (yet he still qualified for a large bonus), the manager’s assistant has resigned, the manager’s supervisor has resigned, another high ranking official with the employer has resigned and the employer is in the midst of a public relations nightmare.

You might recognize that the employer is Rutgers University.  The “manager” is head basketball coach Mike Rice.  The others who have resigned are an Assistant Coach, the Athletics Director and the University’s General Counsel.  The University President also is feeling some heat.

Readers of this blog might remember from a previous post the adage that how an employer does what it does (i.e., process) is sometimes as important as what it does.  However, this is a good example of how a seemingly strong process came to the wrong conclusion.

So what went wrong?

Based on the public reports of what occurred, here are a few observations:

The University President says he never actually viewed the video evidence against Coach Rice.

Practical Tip

If you are participating in the decision of what discipline to impose, personally review all of the basic evidence, especially any objective evidence such as video, photographs or email messages.  The objective evidence is very difficult to refute and will have to be explained – either by the manager who engaged in the behavior when questioned during the investigation or by the employer if it comes to a conclusion that does not appear to “fit” the misconduct observed.

The University did not recognize the message its more limited discipline sent to players, other coaches and the public.

Practical Tips

• In deciding what discipline to impose, look not just at the offending manager and his subordinates but also at the larger constituency groups impacted.
• Evaluate whether a manager who has behaved in such a manner can ever recover a platform from which to instill professionalism.  You can hold high level managers to a higher standard, especially if those same managers are charged with instilling such decorum and professionalism in the persons they supervise (or coach).
• Remember that in today’s world, pictures, videos and emails make their way into the public domain.  Will your choice of discipline appear reasonable in light of the evidence or will it appear to be protective of the “overclass”?

The University appears to have allowed a concern with the “legalities” to over-ride its mission focus and its practical judgment.

Practical Tips

• Unfortunately, in today’s world, an employer sometimes must decide which lawsuit it would rather defend.  Here, the University appears to have chosen not to risk a lawsuit with Coach Rice by terminating him, for fear such a termination would violate his contract.  While this reader has not examined Coach Rice’s contract, I cannot imagine that Coach Rice’s contract was so narrow in defining “cause” as to allow him to engage in such behavior.  And, if it were that narrow, why was the University able to terminate him months later on essentially the same basis?
• Do not let the litigation-avoidance “tail” wag the operations “dog”.  The employer must remain mindful of what provides the only job security – satisfied customers.  Job security is the only thing that keeps any of us employed, and that goal requires efficient operations, which develop a product or service a consumer wants to buy, at a price the consumer can afford.
• Of course, here, a more cynical observer could conclude the University was not concerned with legalities but rather with the damage to its basketball program if it changed coaches in mid-season.  Any such calculus appears woefully wrong now.  Some employers will choose to “look the other way” when a “ne-er do well” manager or salesperson acts out, rationalizing that the person is “making the Company way too much money to get rid of.”  Any such rationale, however, is premature until you later see how much money (or publicity damage) that bad actor’s conduct actually costs the Company when brought to light.

Savvy deal attorneys have long been aware of the “successor employer” doctrine as it relates to unionized employers. This doctrine means that even in an “asset deal,” Newco likely will be subject to a duty to bargain with the incumbent union at the very least. The Seventh Circuit has applied that same “federal common law doctrine” to a wage/hour settlement. In this instance, Newco knew of the wage/hour settlement, had expressly excluded that liability in the purchase documents, but yet acquired an ongoing business (albeit in receivership), continued to operate in the same manner, with the same equipment and with most of the same employees. Thus, the Seventh Circuit reasoned, even though the bid in receivership by the purchaser was expressly contingent on the sale being “free and clear of all liabilities,” the wage/hour settlement by the predecessor employer was the responsibility of the buyer.

The reach of this decision could be significant, particularly if the liability that could attach is not merely a wage/hour settlement (it was a liquidated sum and the violation had been established) but a wage/hour violation (or even an alleged violation).

So what does this mean?

1. Not surprisingly, due diligence is even more critical, particularly for possible wage/hour (and other federal law) claims. The Seventh Circuit, in its reasoning, did not limit the reach of the federal common law doctrine to only wage/hour claims but, in dicta, mentioned other federal statutes, including discrimination claims.
2. Recognize in pricing and in structuring the deal that potential federal violations may attach to the asset deal.
3. Note that this occurred even in a receivership and thus an asset purchase even in a reorganization could be impacted.

1. Continue to post signs that weapons are not permitted on their property.  The law allows employers to continue to prohibit weapons in the employer’s building, and it allows employers to continue to prohibit weapons even in parking lots, if the employee or visitor does not have a valid carry permit.
2. Adopt a policy requiring any employee who brings a gun to work in accordance with the statute:
   • To park in a specific designated parking area of the employer’s premises,
   • To notify the company that the employee has a weapon in the vehicle, and
   • To provide proof to the employer that the employee holds a valid permit to carry a concealed weapon.

Discussion

On February 28, the Tennessee House of Representatives passed by a wide margin (72-22) legislation allowing holders of Tennessee concealed carry permits to bring their handguns onto their employers’ parking lots, provided they comply with certain conditions (HB 118). The companion bill (SB 142) passed in the state Senate by a similar majority (28-5) two weeks earlier.  The Governor has now signed the legislation into law, and it takes effect July 1, 2013.

The new statute will permit the holder of a Tennessee handgun carry permit (or a permit issued by another state and recognized by Tennessee) to bring his or her handgun and/or ammunition onto a parking lot located on private property (excluding a parking area on the grounds of an owner-occupied, single-family detached residence, or a tenant-occupied, single-family detached residence) provided that the permit holder’s vehicle is parked in a location where it is permitted to be, and the firearm or ammunition in the vehicle is kept from ordinary observation if the permit holder is in the vehicle, or kept from ordinary observation and locked within the trunk, glove box or interior of the motor vehicle, or in a container securely fixed to such vehicle, if the permit holder is not in the vehicle.

Under prior law, most private property, and certain public areas such as parks, schools, etc., could be “posted” to prohibit the bringing of firearms of any description onto that property.

Under the new statute, employers can continue to post their property as to employees or visitors who do not have a valid handgun carry permit, and can impose restrictions on bringing firearms or other weapons into the employer’s building whether it is a manufacturing plant, distribution center, office, or other type of facility. The new statute also contains a broad indemnity provision for the owner or possessor of the property.

In the discussion of the legislation, both at the committee level and on the floor of the House of Representatives, the sponsors of the legislation emphasized that the purpose of the new bill was to remove the possibility of any criminal prosecution against an individual possessing a valid handgun carry permit, who elects to bring his handgun to work, or onto other private property, for his or her protection, provided that the conditions set forth in the statute are met. The sponsors emphasized that employers could continue to maintain work rules or policies prohibiting possession of guns or firearms on their property as to non-permit holders. Although the sponsors also stated that since Tennessee is an “employment at will” state, an employer could presumably enforce its work rules or policies even against permit holders, there is a strong likelihood that termination of an employee who came within protection of the new statute would have a claim for retaliatory discharge under Tennessee law in spite of the fact that the state is an “employment at will” state. The Tennessee Supreme Court has recognized a “public policy” exception to the employment at will rule.

Under the statute, an employer can require employees who elect to bring their guns to work in accordance with the statute to park in a specific designated area, notify the company that they have a weapon in their vehicle, and provide proof that they hold a valid carry permit. Under current Tennessee law, records of individuals who hold such permits are considered “public” records; so an employer could also conduct a search of those records to confirm that an employee has a current permit.

All employers must verify the identity and work authorization of each new employee (citizens and noncitizens) hired to work in the United States after November 6, 1986 using the Form I-9. For those employees whose work authorization expires on a certain date, employers are required to re-verify the work authorization on or before the expiration date provided. Employers are also responsible for retaining the Form I-9s either for three years after the date of hire or for one year after employment is terminated, whichever is later. Failure to complete a Form I-9 for each new hire may result in fines for the employer.

The other, more substantive impact is limited. The new regulations relate primarily to employees who are active military or retired. For a qualifying exigency leave, the definition of “active duty” is now “covered active duty” and will somewhat narrow coverage for eligible employees – the coverage will now extend only to those whose related service members are being deployed to a foreign country. On the other hand, military caregiver leave has been expanded. That leave – which provides for as much as 26 weeks of leave in 12 months – now includes eligible employees who are caring for covered veterans as well as covered service members. Covered veterans are those with a “serious injury or illness” who were discharged or released under conditions other than dishonorable within five years of an eligible employee’s initial request for leave (subject to certain exclusions extending the time for requesting leave). These and other new provisions are included on the revised FMLA Employee Rights and Responsibilities Poster (WH 1420). Employers should obtain new posters now for posting by March 8.

If you have questions about the new regulations and how they will affect your leave policies or would like assistance obtaining the revised poster, contact any of our Labor and Employment attorneys.

The issue was whether an employer whose employees are represented by a union must bargain with the union before imposing discretionary discipline on a unit employee. After a majority of its employees voted in favor of representation by a union, but before execution of a first collective bargaining agreement, the employer disciplined certain employees without providing the union notice and an opportunity to bargain. The NLRB concluded as a matter of policy that, where a collectively bargained grievance and arbitration system does not yet exist, as is usually the case where an employer and a union are bargaining a first contract, an employer generally may not unilaterally exercise discretion in imposing significant discipline (e.g., suspension and termination). Instead, the employer must give the union notice and an opportunity to bargain before imposing such discipline on an employee. The NLRB defined discretion to include any instance in which management reserves to itself the right to consider all the circumstances, including the severity of the offense by an employee and possible mitigating circumstances, before imposing discipline.

Of course, almost all savvy employers have a progressive discipline system that preserves discretion for the employer in determining what step of the discipline process to impose. Thus, practically speaking, according to the Board, any employer who has lost a union election but has not yet negotiated an initial contract must bargain with the union before imposing a termination or suspension on a bargaining unit employee.

Reversing 50 years of settled precedent, the NLRB recently ruled that a “dues check-off” provision in a union contract continues to require an employer to deduct union dues from employees’ paychecks even after the union contract expires. This ruling shows the Board’s continuing path of “pro-union” decisions and significantly impacts union/employer negotiation leverage in favor of a union’s position at the bargaining table.

In those states that do not have right-to-work laws, employees can be required to become members of, and pay dues to, a labor union in order to keep their jobs. Leveraging off the ability to maintain a “closed shop,” unions typically seek two terms in collective bargaining agreements with employers in those states. The first, referred to euphemistically as a “union security” provision rather than “forced membership,” reflects the closed-shop nature of the workplace, and requires that employees become members of the union (usually by paying a hefty initiation fee and agreeing to pay monthly dues) within 30 days of hire, or else the employer must terminate their employment. The second term is commonly referred to as a “dues check-off” provision, and requires that the employer deduct union dues from employee paychecks and remit the deductions directly to the union, effectively functioning as the union’s collection agent and thereby relieving the union of the expense and burden of having to seek dues payments directly from the employees. Since an NLRB decision 50 years ago, the law has been settled that an employer need not continue to remit union dues to a union following the expiration of a collective bargaining agreement containing a dues check-off provision. In this case, the NLRB discarded a half-century of settled law, holding that employers now must continue to deduct union dues from employee paychecks and send the deducted funds to the union, even after the contract requiring it to do so has expired.

Similarly, on December 18 (the same day that the EEOC announced its strategic plan), the EEOC announced a $2m settlement with Dillard’s Inc. based on similar allegations. There, Dillard’s was accused not only of having a practice of terminating employees after a specific period of leave but also of having a practice of seeking specific medical information from an employee seeking sick leave. According to the EEOC, these practices violated the ADA.

Again, as many savvy employers who have read similar posts before, employers should:

• Eliminate any “automatic termination” language – and eliminate any such practice of automatically terminating – any employee based on the exhaustion a set amount of leave.
  • An employer must conduct a “case-by-case” analysis of the specifics of each employee’s circumstances and must invite the employee into that process as part of an “interactive” discussion
  • Suggested language – “If at the end of the leave period the employee remains unable to return to his/her regular job even with reasonable accommodation, the employee and the employer will discuss what options may be available based on the employee’s circumstances and the employer’s operational needs.”
• Consider at least one “extension” of another period of leave

Note, however, that granting job-protected leave, under the FMLA or if required in your jurisdiction, under the ADA, that does not mean that the employer must “hold the job open.” Rather, it means that whoever is hired to do the job (if a temporary employee or a contract worker), that person is in that role temporarily for a time, given that someone is on leave.