Texas Employment Law Update

Texas Employment Law Update

A Resource for Texas Employers

Austin, Texas Passes Fair Chance Hiring Ordinance for Private Employers

Posted in Human Resources, News & Commentary

The City of Austin, Texas has joined the long list of municipalities nationally that have adopted ordinances restricting employers ability to make inquiries into an applicant’s criminal background and to act on that information.  Under Austin’s new Fair Chance Hiring Ordinance, an employer with fifteen or more employees in the City of Austin may not:

  • publish or cause to be published information about a job that states or implies that an individual’s criminal history automatically disqualifies the individual from consideration for the job;
  • solicit or otherwise inquire about the criminal history of an individual in an application for a job;
  • solicit criminal history information about an individual or consider an individual’s criminal history unless the employer has first made a conditional employment offer to the individual.
  • refuse to consider employing an individual who submits an application for a job because the individual did not provide criminal history information before the individual received a conditional employment offer.
  • take refuse to hire, promote or revoke an offer of employment or promotion because of the individual’s criminal history unless the employer has a good faith belief that the individual is unsuitable for the job based on an individualized assessment of the individual’s criminal history.

An employer who does uses an individual’s criminal history to deny employment or a promotion must inform the individual in writing that the adverse action was based on the individual’s criminal history.  The ordinance also includes an anti-retaliation provision and administrative enforcement provisions.  Importantly, the ordinance creates no criminal penalty but does impose a modest civil penalty of $500 per job that violated the ordinance.  However, no civil penalty will be issued for an offense occurring prior to the first anniversary of the ordinance.  Furthermore, the ordinance does not create a private right of action.

One consequence of this ordinance is that Austin employers will likely have to revise their initial employment applications to remove questions about an applicant’s criminal history.  Questions about an applicant’s criminal history will now have to wait until after the employer extends a conditional job offer.

You can review the draft ordinance here.

HR Directors Beware: You Too Can be Sued for FMLA Violations

Posted in Case Summaries, Human Resources, Leave of Absence

A recent case from the Second Circuit Court of Appeals should remind HR Directors (and supervisors) to be particularly vigilant in handling employee FMLA leaves of absence. In Graziadio v. Culinary Institute of America, the appellate court reversed a trial court victory for the employer and the two individual supervisors (one of whom was the HR Director) who were sued for alleged FMLA violations of interference with and retaliation for taking FMLA leave. While the facts, if true, suggest that the Director of Human Resources acted relatively cavalierly with respect to the employee’s repeated requests for FMLA forms and clarification about what documents the employer required to approve her leave of absence, the case does not break new ground on the issues of individual supervisory liability under the FMLA (although the case may be the first time the Second Circuit dealt with the question). It is well-established in the Fifth Circuit (the federal court of appeals covering Texas appeals) that individual managers or supervisors who participate in FLSA violations can be sued and held individually liable for violations of the Fair Labor Standards Act. Because the FMLA’s definition of employer is the same as in the FLSA and not the definition found in Title VII, it is not surprising that the Second Circuit joined other circuit courts concluding that individual managers or supervisors acting directly or indirectly in the interest of an employer with respect to its employee may also be deemed employers subject to suit under the FMLA.

The case is, however, an important reminder that HR generalists, managers and directors (those who routinely administer the leave of absence programs of employers) can and are often sued along with the company when an FMLA claim is asserted and should therefore process employee leaves with extreme care. Documentation of efforts to obtain FMLA documentation from employees along with summaries of the communications had with those employees can be critical in defending the company and individual human resource employees from FMLA suits.

A full copy of the Second Circuit’s opinion in Graziadio v. Culinary Institute of America is available here.

From the Archives: Spring Break Edition II

Posted in Human Resources

In today’s From the Archives: Spring Break Edition, we go back to a 2011 post to remind employers why it is a good idea for managers and supervisors to stick to a neutral reference policy when providing employment references on former employees.  In Managers and Supervisors Should Follow Their Employer’s Neutral Reference Policies, I mentioned a company that works with former employees and plaintiff employment attorneys to contact companies pretextually to find out what information the really give out on former employees.  Presumably, this information is then used for litigation purposes.  This is just one of many good reasons to have and follow a neutral reference policy.

Spring break is over soon and I expect to be back with a new post next week.

Follow my on Twitter @RussellCawyer.

From the Archives: Spring Break Edition

Posted in Wage & Hour

While many of the kids (and a few employment law attorneys) are on Spring Break, I thought I would dust off a few posts from the archives.  Back in 2009 I wrote about the rules that apply to the payment of accrued but unused vacation time on termination of employment in Texas.  If you are not on a ski slope or sandy beach this week, you can read Vacation Pay not Automatically Due and Owing on Termination of Employment.

Follow me on Twitter @RussellCawyer.

Paying Nonexempt Employees at Different Rates for Different Work

Posted in News & Commentary, Wage & Hour

With the slowdown in the oil patch, many service providers are looking for ways to better match employee compensation with reduced amount of work and revenue available without having to reduce headcount.  One way to accomplish this objective is to pay different rates for different work.  For example, a company may elect to pay a nonexempt employee a certain hourly rate for revenue generating work and a different, typically lower hourly rate for non-productive or non-revenue generating work (e.g., shop time).

The DOL’s regulations explain how a company calculates the overtime rate where an employer compensates its nonexempt employees at two different rates.  The regulations provide that:

Where an employee in a single workweek works at two or more different types of work for which different nonovertime rates of pay (of not less than the applicable minimum wage) have been established, his regular rate for that week is the weighted average of such rates. That is, his total earnings (except statutory exclusions) are computed to include his compensation during the workweek from all such rates, and are then divided by the total number of hours worked at all jobs.

Compensating employees at different rates for different work is an effective way to pair employee compensation with revenue a company is generating and can delay or reduce the number of layoffs a company many have to conduct during times of slow work.

Follow me on Twitter @RussellCawyer.

Fifth Circuit Refuses to Enforce Illusory Handbook Arbitration Provision

Posted in Arbitration, Case Summaries

It’s a rare day when a Texas state court or federal court sitting in Texas refuses to enforce an arbitration agreement.  The Texas law is well-developed on this issue and the table is heavily tilted in favor of arbitration.  Consequently, most employer arbitration programs in Texas are enforced.  However, a recent opinion from the Fifth Circuit Court of Appeals gives hope to those who wish to avoid the confines of arbitration.  In Nelson v. Watch House International, LLC, the plaintiff sought to avoid the mandatory arbitration of his race discrimination claim arguing that the agreement lacked a Halliburton savings clause.  A Halliburton-type savings clause in an arbitration clause is one where the employer places some limitations on its right to unilaterally change the arbitration policy but limits that unilateral right only after providing employees advance notice of the change and applying it only prospectively to claims arising after the change.  The Fifth Circuit has articulated a three part test for evaluating whether retention of the unilateral right to change the arbitration clause render the agreement illusory.  As the Nelson court reiterated:

[Retaining] termination power does not make an agreement illusory so long as that power (1) extends only to prospective claims; (2) applies equally to both the employer’s and employee’s claims, and (3) so long as advance notice to the employee is required before termination is effective.

The Watch House provision failed to provide that the employer give employees advance notice of changes to the arbitration provision before it was effective and was therefore illusory and unenforceable.

Takeaway:

If your arbitration provision retains the unilateral right to modify the terms in the future, it needs to have three components.  First, it should only apply to claims arising after the change.  Second, it must apply to both employee and employer claims.  Third, employees must be provided some advance notice prior to implementation of the change.  Of course, where the employer retains no right to unilaterally change the policy, a Halliburton-type savings clause may not be necessary.

If you are a Texas employer utilizing arbitration agreements, check your agreements to ensure they contain a savings clause or are otherwise not subject to the same defect as Watch House International’s agreement.

You can download the full opinion in Nelson v. Watch House International, LLC here.

Follow me on Twitter @RussellCawyer.

Houston Court of Appeals Holds that Allegation of Constructive Discharge Must be Included in the Charge of Discrimination

Posted in Case Summaries, Race, Retaliation, Sex and Gender

In an opinion likely to prove useful to employers defending a termination based on a constructive discharge theory, a Houston Court of Appeals held that a resigning employee whose charge of discrimination lacks an allegation of constructive discharge, fails to exhaust his administrative remedies on that theory.  In court of appeals opinion, Parker was an African American pharmacy supervisor for the Harris County Hospital District from 2006 until 2012.  He reported to the pharmacy operations manager, who in turn reported to the Director of Ambulatory Pharmacy Services.

Parker didn’t like the way his supervisor was treating him and complained about it to the Director of Ambulatory Pharmacy Services.  He ultimately took an FMLA leave of absence claiming he was stressed due to the hostile work environment his supervisor placed on him.  While on leave, Parker filed a charge of discrimination complaining of race and sex discrimination and retaliation.  Importantly, the charge never mentioned constructive discharge.  With his charge of discrimination, he also filed an intake questionnaire and attached a statement to the questionnaire.  The intake questionnaire largely tracked the language used in the charge of discrimination but also added the allegation that, “I will be constructively discharged by my employer on October 30, 2012.”  Parker was terminated on October 16, 2012 following an investigation that confirmed he violated various corporate policies.  He filed a lawsuit shortly after receiving a right to sue letter.

The employer challenged Parker’s constructive discharge theory arguing that he failed to exhausted his administrative remedies on that theory because he did not identify constructive discharge in the allegations of discrimination in the charge.  Parker pointed to his intake questionnaire as proof that he identified his constructive discharge theory to the EEOC.

The court of appeals held that to consider the content of an intake questionnaire to establish that the charging party exhausted his administrative remedies, the facts in the intake questionnaire must be a reasonable consequence of a claim in the charge AND the employer had actual knowledge of the contents of the questionnaire during the course of the agency investigation.  Stated another way, the allegations in the intake questionnaire cannot be read to expand the scope of the charge; rather, it can only be used to supplement claims contained in the actual charge of discrimination itself.  Because the charge of discrimination did not mention constructive discharge and there was no evidence the employer had actual notice of the content of the intake questionnaire, the court of appeals concluded Parker had not exhausted his administrative remedies on his constructive discharge theory and affirmed the trial court’s dismissal of that allegation.

As I noted in a recent post, employers are not routinely provided copies of the employee’s intake questionnaire.  Where the charge fails to mention certain legal theories such as disparate impact, constructive discharge, patter or practice allegations or the continuing violation theory, the Parker opinion may support a conclusion that the charging party failed to exhaust administrative remedies.  This can be the case even where those theories may be mentioned in the intake questionnaire if the employer was not aware of those theories during the course of the investigation.

You can download the full opinion in Harris County Hospital District v. Parker here.

Follow me on Twitter @RussellCawyer.

If Your Company Circulates This Memo, You Might Have and HR Problem

Posted in News & Commentary

According to a recent Vanity Fair article, Zenefits, the company providing cloud-based HR administration systems, circulated a memo to its workforce advising employees that it was against company policy to have sex in the stairwells at work.  The memo “warned staff that smoking, drinking, and having sex was inappropriate office behavior after security found several used condoms in its building’s stairwells.”  This followed, according to an article, a memo from the CEO banning consumption of alcohol in the workplace due to the difficulty in “defin[ing] and pars[ing] what is ‘appropriate’ versus ‘inappropriate’ drinking in the office.”

If your CEO circulates memos like the two described above, it is a red flag that the organization likely has a culture and HR issues.

Follow me on Twitter @RussellCawyer.

AT&T Warning Employees to Update Skills or Become Obsolete?

Posted in News & Commentary, Wage & Hour

The New York Times profiled AT&T’s corporate education program where the company offers to pay for all or part of the classes employees take to help modernize their skills. The program has been in place for approximately two years and the purpose of the program, according to the article, is to “retrain its 280,000 employees so they can improve their coding skills, or learn them, and make quick business decision based on a fire hose of data coming into the company.” Employees are expected to “take these classes on their own time and sometimes pay for them with their own money.”

The article does not state whether this training time is considered compensable time for nonexempt employees, but provides a good opportunity to provider a refresher on the rules that apply when determining whether nonexempt employee time spent on training activities qualifies as compensable time.

As a general rule, attendance at lectures, meetings, training programs and similar activities does not constitute compensable time so long as

  • Attendance is outside of the employee’s regular working hours;
  • Attendance is in fact voluntary;
  • The course, lecture, or meeting is not directly related to the employee’s job; and
  • The employee does not perform any productive work during such attendance.

Where attendance is mandatory or if the employee is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected by nonattendance, then the training is not voluntary and it is compensable. Where the training is designed to make the employee handle his job more effectively as distinguished from training him for another job, or to a new or additional skill, the training time is directly related to the employee’s job and the time spent on training is compensable. Conversely, where the employee, on his own initiative attends an independent school, college or independent trade school after hours, the time is not hours worked for his employer even if the courses are related to his job.

An employer considering whether to adopt a training program like AT&T’s should evaluate whether such training time will be considered compensable time for nonexempt employees.

Follow me on Twitter @RussellCawyer.

 

 

EEOC Announces New Procedures for Disclosing Employer Position Statements to Plaintiff Attorneys

Posted in News & Commentary

Last week the EEOC announced that it had issued new practices for transmitting employer position statements to charging parties and their attorneys.  Historically, most Commission field offices did not provide copies of the actual position statements to the charging parties during the course of the investigation.  Rather, investigators typically retyped or summarized relevant positions of the position statement in a letter to the charging party or read them to charging party or attorney to obtain a response.

With the newly announced procedures, position statement requested after January 1, 2016, and all nonconfidential attachments to those statements will be forwarded, upon request, to the charging party or her representative.  To designate information as confidential, the employer/respondent must take specific steps to label and designate the confidential information.  Lacking from the new procedures is a reciprocal provision that the Commission will provide a copy of the charging party’s intake questionnaire or other information the charging party provides to the Commission to the employer.  The Commission further clarifies that any information received from the Charging Party in response to the position statement will also not be shared with the respondent employer (so much for an impartial, independent investigation).

For more information on the Commission’s new practices, you can read its press release on the new procedure here.

EEOC Questions and Answers for Employers here.

EEOC Questions and Answers for Charging Parties here.