Texas Employment Law Update : Texas Employment Lawyer & Attorney : Russell D. Cawyer : Kelly Hart & Hallman Law Firm : Dallas TX Labor Updates

Employers should provide (and pay for) the cell phones and other PDA's used by their sales force.  Why?  So that the company is entitled to, and can insist on, the return of the telephone, the assigned telephone number and the contacts and other wealth of information contained on those devices when the employment relationship ends.  If a company allows an employee to use his or her own cell phone or telephone number (even if the company reimburses the employee for the service) , the company may not have a right to insist the telephone be turned over to it to clear the customer information from the phone.  Even worse, when your customers use the normal telephone number to place an order with their sales contact, who has since left your employment, they will be connected with your former employer who is now working for your competitor --and the employee didn't even have to do anything to solicit the customer's business for the new employer. 

Consequently, a comprehensive effort to protect confidential information, trade secrets and company goodwill may well include providing company-owned cell phones for the sales staff.

 Follow me on Twitter @RussellCawyer.

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Prompt and thorough investigations of complaints of harassment and discrimination can provide solid legal defenses to employee lawsuits.  Even where there may not be a technical, legal defense (e.g., supervisory harassment resulting in an adverse employment action), investigating employee complaints of inappropriate behavior can paint the employer in a favorable light and is just a good business practice for employers concerned about providing a professional workplace. 

One of the first choices an employer receiving an employee complaint of discrimination, harassment or even misconduct, has to make is who will investigate the complaint on behalf of the company.  Complaints do not necessarily have to be investigated by lawyers or even those external to the company.  However, there are certain qualities an employer should consider in selecting the investigator (not all qualities are necessarily required for a prompt and thorough investigation).

• Experienced --someone with prior human resources experience and that has conduct prior investigations of discrimination, harassment, retaliation or workplace misconduct;
• Unbiased and objective --someone that is neither accused of misconduct or who reports to or is the direct organizational chain of the the person being complained about;
• Articulate --an individual who is well-spoken and makes both good verbal and physical appearance.  This will be the company's spokesperson at any trial where the company has to describe and defend its investigation and any remedial measures taken as a result of the investigation;
• Knowledgeable --person should be knowledgeable of the subject matters being investigated as well as the company policies that apply to the investigation and the misconduct alleged;
• Approachable --someone that the complaining party, witnesses and the person being complained about will open up  to.  For example, in the investigation of a sensitive sexual harassment investigation, it may be (but is not required to be) that a person who is the same gender as the person making the complaint may be the proper choice.
• Available --the individuals selected needs to have the time devoted the conduct and conclude the investigation promptly.

As prompt and thorough investigation can be an effective defense to a discrimination, harassment or retaliation lawsuits.  The best defense starts with selecting the right quarterback to run the investigation.

Follow me on Twitter @RussellCawyer.

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One of the most popular posts (i.e., most read) I've written is one I published two years ago on whether employer can or should ban the use of e-cigarettes in the workplace.  Some employers have gone so far as to implement the complete ban on the use of all products containing nicotine --both during and after work.  I thought that now would be a good time to update my thoughts on the subject.

Recently, the U.S. Department of Transportation issued a press release announcing its proposal to explicitly ban electronic cigarettes on U.S. flights.  According to the DOT's release:

Electronic cigarettes cause potential concern because there is a lack of scientific data and knowledge of the ingredients in electronic cigarettes.  The Department views its current regulatory ban on smoking of tobacco products to be sufficiently broad to include the use of electronic cigarettes.  The Department is taking this action to eliminate any confusion over whether the Department’s ban includes electronic cigarettes.  The proposal would apply to all scheduled flights of U.S. and foreign carriers involving transportation to and from the U.S.

Amtrak has banned the use of electronic smoking devices on trains and in any area where smoking is prohibited. The Air Force Surgeon General issued a memorandum highlighting the safety concerns regarding electronic cigarettes and placed them in the same category as tobacco products. The U.S Navy has banned electronic cigarettes below decks in submarines.  Further, several states have taken steps to ban either the sale or use of electronic cigarettes.

This is a fairly contentious issue.  On the one hand, smokers and supporters of e-cigarettes claim that they are odorless devices that emit nothing more than water vapor and are no more harmful to coworkers than allowing a nearby employee to chew nicotine gum or wear a nicotine patch.  On the other hand, some employers have expressed concern over the lack of scientific evidence over what is emitted into the air from the electronic cigarettes; over the perception that the employer is condoning or sponsoring any kind of addiction or dependence; and whether some of the types of employment (i.e., retail or customer service) are inconsistent with image the company wants to foster.

In the end, and assuming that nicotine dependence is a disability that must be reasonably accommodated under the ADA, an employer can reasonably accommodate the disability without allowing the use of e-cigarettes in the workplace or at work stations.  It is the long-standing rule that the employer gets to select the accommodation provided among various effective accommodations.  For example, the employer could allow the use of e-cigarettes in the same manner as it allows employees to use other tobacco products (e.g., outdoors during break times).  Similarly, the employer could allow the the employee to use nicotine gum during working time.  If the employer allowed the use of e-cigarettes during working time or in working locations (and assuming it is not prohibited by state law), the employer could require that the employee refrain from using scented e-cigarette flavors to further reduce the potential effect on nearby co-workers.

Follow me on Twitter @RussellCawyer.

DOT Notice of Proposed Rulemaking here.

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One of North Texas' largest employers announced that it will not longer hire or consider for hire any individual who uses any nicotine product (i.e., cigarettes, nicotine gum or patches, chewing tobacco or electronic cigarettes).  Baylor Health Care Systems announced its new policy on the careers page of its website stating:

As a health care system committed to improving the health of those we serve, we are asking our employees to model the same behaviors we promote to our patients. Beginning January 1, 2012, Baylor will no longer hire individuals who use nicotine products. Applicants who profess to use nicotine will not have their applications processed. Anyone who is offered and accepts a position with BHCS will be tested for nicotine during our regular post-offer pre-employment testing. Applicants who test positive for nicotine will be eliminated from consideration and pending job offers will be rescinded.  We encourage candidates who do not pass the nicotine testing to consider taking steps to stop the use of nicotine and reapply for consideration after a period of 90 days. 

The policy appears to screen out any applicants, regardless of the type of product used containing nicotine and whether the product is use on non-working time off the employer's premises.  Smoking or nicotine dependence has not historically had success in the courts as being a recognized ADA disaiblity.  However, it will be interesting to see if in a post-ADAAA world, where the definition of disability has been greatly relaxed, this policy comes under scrutiny by the EEOC or applicants rejected for employment based on their use of products containing nicotine. 

Baylor is not the first hospital to implement such a policy.  However, similar policies are not without their critics.  The National Workrights Institute, a nonprofit human rights organization focused on workplace issues, has been quoted that "such policies are a slippery slope — that if they prove successful in driving down health care costs, employers might be emboldened to crack down on other behavior by their workers, like drinking alcohol, eating fast food and participating in risky hobbies like motorcycle riding." 

Presumably Baylor had its policy fully vetted by its legal experts and believes it can defend the policy.  However, a quick, admittedly nonexhaustive research search, failed to find any cases holding that nicotine addiction is not a disability under the ADAAA.  Only time will tell whether these kinds of policies will be upheld by the courts.

Follow me on Twitter @RussellCawyer.

Other Articles on Failure to Hire Tobacco Users:

Refusing to Hire Tobacco Users --Valid Argument or Just Blowing Smoke?

Hospital Hiring Goes Up in Smoke.

Hospitals Shift Smoking Bans to Smoker Ban

ADA Amendments May Open the Door for Nicotine Addiction Claims

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I am always skeptical when I hear a deal that sounds too good to be true.  Because of my healthy skepticism, I hope that I am unlikely to be scammed by the phishing e-mail advising me a foreign distant relative has left me a lot of money and I only need to send a few thousand dollars to an off-shore bank to release the funds (however I also probably won't return the phone call when I really win a legitimate lottery).  This was my thought when I read about the new IRS Voluntary Classification Settlement Program that lets companies that have misclassified employees as independent contractors to prospectively reclassify the workers as employees and only pay ten percent of the prior year's payroll taxes --with no penalties or interest.

This sounds like a pretty good deal.  Come clean and fix prior mistakes all while paying a fraction of the back taxes and no interest and penalties and a promise that the IRS won't audit prior financial years on this topic.  Some of you are probably saying "where do I sign up?"  (Of course, none of you have misclassified any employees as independent contractors.)

One downside to the IRS's program is while the government is showing some leniency by providing companies with a limited safe harbor to remedy prior mistakes, wage and hour plaintiff' lawyers are unlikely to be so forgiving.  Participation in the IRS program will be tantamount to admitting that the workers were misclassified as independent contractors and all the baggage that goes along with such a misclassification. 

Since companies rarely keep records of the hours worked by independent contractors, the newly classified employees can seek several years of unpaid overtime and the employer is unlikely to have any records to rebut the employees' claims of hours worked.  Moreover, to the extent companies have benefit or incentive plans in which employees participate (but independent contractors do not), companies may face claims for benefits or other incentives (bonuses, options, stock etc.) that were not provided to the misclassified contractors.

The IRS program is an interesting opportunity for companies with misclassified independent contractors to reclassify their workers with less downside to the company.  However, the program could have been more palatable (thereby likely getting better participation) had the IRS included such protections for companies from the other negative consequences that come along from a misclassification of employees as independent contractors such as providing immunity from overtime, benefit or incentive claims for the period of misclassification or providing that agreements with the IRS shall not be admissible in any proceeding involving the company.  Companies will need to weigh all of the benefits and consequences in deciding whether to participate in the Voluntary Classification Settlement Program.

Follow me on Twitter @RussellCawyer.

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Next week is the deadline for all covered employers (i.e., those subject to Title VII and with 100 or more employees; or first tier or prime federal contractors with 50 or more employees or more than $50,000 in federal contracts) to file their federal EEO-1 surveys.  The EEOC has a FAQ page if you are new to or unfamiliar with the annual filing requirement.

Follow me on Twitter @RussellCawyer.

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If you are are regular reader of this blog, you know that by November 14, 2011, most private employers (union and non-union) have to post notice of employees' federal labor rights to form and join a union.  Some of you may have even already posted the NLRB-sanctioned poster.  

However, several lawsuits have been filed seeking to have the new NLRB rule declared invalid.  The U.S. Chamber of Commerce and the South Carolina Chamber of Commerce sued in federal district court to have the new posting rule declared invalid.   The U.S. Chamber's lawsuit follows on the heels of last week's suits seeking similar relief by the National Federation of Independent Business and the National Association of Manufacturers.

Given the uncertainty about whether the posting requirement will actually take effect, it may be prudent to wait and see whether one or more federal courts will enjoin the NLRB from enforcing its new rule.  And while an injunction may or may not be binding on the NLRB in Texas (because neither lawsuit seeking an injunction was filed in Texas) an injunction could prohibit the NLRB from enforcing it nationwide.  In the meantime, employers should hold off on posting the new poster until November 14, 2011 so that the courts have an opportunity to address this issue.

Follow me on Twitter @RussellCawyer.

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In jury selection of an employment discrimination case, the employer addresses the potential jury pool after it has already heard from the employee's lawyer. When the employee's lawyer has done an effective voir dire (i.e., jury selection), the employer might start to see the panel members begin to express verbal and nonverbal cues that the jurors are beginning to form opinions about the case that would tend to favor the employee.  The plaintiff employee, as the party bearing the burden of proof, always has a real advantage in getting to talk first and last at every stage of a trial. 

While the trial judge will undoubtedly advise the jury that nothing the lawyers say is evidence, it is important to remind the jury to refrain from from forming their opinions until all of the evidence is in (read:  the employer has a chance to put its case on).  I've even some some defense lawyers go so far as to ask potential jurors at the beginning of jury selection if, having heard the plaintiff employee's voir dire, was anyone leaning just a little toward thinking the plaintiff might have a case.  That is usually following by some example to show that every story has two sides and the jury can't really decide what happened until they have heard all of the evidence. 

The importance of ensuring that jurors are reminded to keep an open mind until they have heard all of the evidence is exemplified in two posts written by two of my colleagues about the same case.  On September 8, 2011, the EEOC announced that it filed a lawsuit against Walgreens for allegedly violating the Americans with Disabilities Act when it fired an employee for eating chips to stop a hypoglycemic attack.    The EEOC summarized the facts as follows:

Josefina Hernandez, a cashier at Walgreens’ South San Francisco store, was on duty when  she opened a $1.39 bag of chips because she was suffering from an attack of  hypoglycemia (low blood sugar). Hernandez  had worked for Walgreens for almost 18 years with no disciplinary record, and Walgreens  knew of her diabetes. Nevertheless, Walgreens  fired her after being informed that Hernandez had eaten the chips because her  blood sugar was low, even though she paid for the chips when she came off  cashier duty.

Jon Hyman, who represents employers, defended Walgreen's actions on his blog the Ohio Employer Law Blog.  He wrote that:

You might think that a $1.39 bag of chips, for which the employee later paid, is not a fireable offense. Yet, no rule is more important to a retailer than its no-shoplifting rule. Most stores have zero tolerance policies, both for customers and employees. It may seem unreasonable to fire a diabetic employee over one bag of chips. Consider, however, that the employer might not want to set a precedent that it is acceptable to eat food off the shelf without paying for it first. If customers see an employee consuming merchandise without paying first, they might think it’s allowed by the store, which makes shoplifting and loss prevention that much more difficult for the employer to control.

After reading Jon's post, you might be inclined to side with the employer and believe that the EEOC overstepped its bounds by suggesting that Walgreens had to, as a reasonable accommodation, excuse one of its personal conduct rules.

Shortly after Jon's post was published, Chris McKinney (a fellow Texas lawyer) who represents employees, suggested that Jon's defense of Walgreens was as good as could be done if not a little over the top in accusing Ms. Hernandez of stealing the chips and further suggesting the company's defense was factually false.  Chris had the following closing argument on Walgreen's actions:

At trial, Walgreens will presumably say that Ms. Hernandez had any number of alternative actions available to her, including: 1) leaving her station to get some food from her purse or locker (for which she would undoubtedly be fired; or 2) risk going into diabetic shock.  From the company's point of view, choice 2 is obviously the preferable solution.

No one can accurately predict how this case will ultimately conclude (although I'd bet a large sum of money that like most civil cases --and most brought by the EEOC --it will end with a settlement) but it a good reminder that every case has at least two sides and the jury must be reminded not to forms its opinions until it has heard all of the evidence.

Follow me on Twitter @RussellCawyer.

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Yesterday, the Supreme Court of Texas heard oral argument in two employment cases.

In El Apple I, Ltd. v. Olivas, (No. 10-0490), the Court is considering whether detailed lodestar attorney fee calculation is required with breakdowns for each specific task.  Also under consideration is whether appellate fees should be calculated in advance or only upon remand from appeal.  You can access a video of the oral argument here.

I've written before about the Prairie View A&M University v. Chatha case, which I believe was wrongly decided by the court of appeal.  (post here).  In Chatha (No. 10-0353), the Court is considering whether the statute of limitations on an employee's complaint of discriminatory pay commences on the date the decision is communicated to the employee or on the date the paycheck reflecting the allegedly discriminatory pay decision is issued to the employee. You can watch the video in Chatha here.

Follow me on Twitter @RussellCawyer.

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I've previously written about the new NLRB requirement that most employers post notice of employee's NLRB rights (post here).  The posting requirement is effective November 14, 2011, for both union and non-union employers.  Yesterday, the NLRB made available an appropriate posting for download.   The NLRB's site also has answers to some commonly asked questions about the posting requirement that you can access here.

Follow me on Twitter @RussellCawyer.

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This week the Fifth Circuit held that a cause of action exists for hostile work environment under the ADEA –the first such express holding in the Circuit.  In Dediol v. Best Chevrolet, the plaintiff filed a hostile work environment and constructive discharge claim against the employer.

During the brief two months of employment, Dediol claimed that his direct supervisor repeated referred to him by profane, derogatory names invoking his age; made offensive remarks about his religious beliefs; threatened him both economically with the loss of his job and with physical threats of violence and intimidation. When Dediol’s requested transfer to another department was denied by his supervisor, he told the company’s management that he could no longer take the abuse and ceased reporting for work. The employer terminated his employment for job abandonment. He filed a charge of discrimination; received a right to sue letter and file a hostile work environment suit based on age, religion, harassment and constructive discharge.

In the first holding of its kind in the Fifth Circuit, the panel held that a plaintiff’s hostile work environment claim based on age discrimination under the ADEA could be advanced in court. In setting out the parameters for such claim, the Court borrowed liberally from Title VII hostile work environment jurisprudence.   The court held that the plaintiff must show that 1) he is over age 40; 2) the employee was subject to harassment, either through works or actions, based on age; 3) the nature of the harassment was such that it created an objectively intimidating, hostile, or offensive work environment; and 4) there is some basis for liability on the part of the employer. In determining whether the harassment is intimidating, hostile or offensive, the conduct must be both objectively and subjectively offensive.

Having concluded that an ADEA hostile work environment based on age exists in this Circuit, the Court examined the record and concluded that genuine factual disputes existed as to each of Dediol’s causes of action. The court reversed the trial court and sent the case back for further consideration –including, potentially, a full trial on the merits.

You can download the complete opinion here.

Follow me on Twitter @RussellCawyer.

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Pre-game preparations are underway for the first Monday in October when the U.S. Supreme Court will commence its 2011-12 Term.  Here are the employment-related cases that are expected to be decided this Term.

Hosanna-Tabor Church v. EEOC (10-553)  To decide whether the ministerial exception, which prohibits most employment-related lawsuits against religious organizations by employees performing religious functions, applies to a teacher at a religious elementary school who teaches the full secular curriculum, but also teaches daily religion classes, is a commissioned minister, and regularly leads students in prayer and worship.— (to be argued Oct. 5, 2011)

Coleman v. Maryland Court of Appeals (No.10-1016) To decide whether Congress constitutionally abrogated states’ Eleventh Amendment immunity when it passed the self-care leave provision of the Family and Medical Leave Act. 

Knox v. SEIU (No. 10-1121) To decide whether (1) a State, consistent with the First and Fourteenth Amendments, condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a notice that includes information about that assessment and provides an opportunity to object to its exaction and (2) a State, consistent with the First and Fourteenth Amendments, condition continued public employment on the payment of union agency fees for purposes of financing political expenditures for ballot measures?

Follow me on Twitter @RussellCawyer. 

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Texas employers have the option of purchasing workers’ compensation insurance or going as a nonsubscriber.  Deciding whether to be a nonsubscriber or purchase workers’ compensation insurance requires an idea of what your anticipated workers’ compensation premium will be (usually obtained through your insurance broker) as well as understanding what legal protection a Texas employer gets by becoming a workers’ compensation insurance subscriber. Here is a quick summary of the differences between being a subscriber versus a nonsubscriber.  

Workers' compensation is a form of insurance purchased by employer to provide coverage for medical expenses, partial income and disability benefits for an employee suffering an injury or illness arising in the course and scope of his or her employment. In Texas, employers are permitted to opt-out of the state worker’s compensation. These employers are called nonsubscribers. There are advantages and disadvantages

The primary advantage of worker’s compensation coverage is that workers compensation subscribers (i.e., employers having workers compensation insurance coverage) cannot be held liable in court for employee injuries or illnesses that occurred in the course and scope of the employee’s employment. This protection does not apply to individuals who are independent contractors of an employer. The primary disadvantage to worker’s compensation coverage is its cost. Another disadvantage is that worker’s compensation subscribers cannot discriminate or retaliate against employees who report or have workplace injuries, and employees can sue employers if they experience an adverse employment action shortly after reporting or having a worker’s compensation claim.

Nonsubscribers, on the other hand, cannot be sued for discrimination or retaliation for taking adverse action against an employee that has been injured on the job.  They can, however, be sued by the employees for negligence and gross negligence when they are injured at work. The law is written to encourage employers to purchase workers compensation insurance. Consequently, nonsubscribers have few defenses to these claims such as claims for contributory or comparative negligence (aka “proportionate liability”) where liability is apportioned between the employer and employee based on percentages of relative fault. The only legal defenses a nonsubscriber has to a claim that an employee was injured in the course and scope of employment are that the employee was the sole cause of the injury or was intoxicated at the time the injury occurred. 

Understand that your general liability, homeowners or umbrella insurance policies alone do not provide coverage employee injuries or illnesses. Most such policies have exclusions that do not cover claims made by employees or those otherwise providing services for the employer (i.e., independent contractors). Whether to purchase worker’s compensation insurance is an important business decisions and the pros and cons of that decision should be weighed carefully.

Follow me on Twitter @RussellCawyer.

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When I started the Texas Employment Law Update almost three years ago, there were only three employment law blogs I was familiar with written by Texas attorneys:  Work Matters -Texas Employers Blog, Jottings by an Employer's Lawyer and the Texas Employment Law Blog. Today there are a number of other good blogs focused primarily on developments in Texas law.  Some has an employer's focus and some focus on issues of importance to employees and individuals.

As you consider which votes to cast the the ABA Journal Blawg 100 (i.e., the list of the top 100 legal blogs), and after you've voted for the Texas Employment Law Update for the Blawg 100 (nomination form here), check out the following employment blogs authored by Texas attorneys to see if one or more of them should be nominated too (voting ends September 9, 2011). 

San Antonio Employment Law Blog (employee)

Houston Employment Law Blog (employee)

Employment Law Blog by Strasburger & Price (employer)

Smooth Transitions (noncompete law employee and employer)

Dallas Noncompete Lawyer (noncompete law employee and employer)

Texas Employer Handbook (employer)

If you're in a voting mood, you can also cast your ballet for the LexisNexis Top 25 Employment Law Blogs.  I'd appreciate your vote for that honor as well.  Voting ends September 12, 2011.   You can find out how to vote for the LexisNexis Top 25 here and see other blogs outside of Texas that are worthy of following.

Follow me on Twitter @RussellCawyer.

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Next week we celebrate Labor Day; the first Monday in September (although my Labor Day celebration starts a little later today).  Labor Day is and has been one of my favorite holidays.  As a child, we didn't start school until after Labor Day and it marked the end of summer vacation.  Now, my children start school much earlier; but they still get an extra day off.  In most years when a trial or other proceeding hasn't been unfortunately scheduled the week after the Labor Day, I also get to spend an extra day with the family. 

But Labor Day wasn't started so school children (and their lawyer fathers) could get an extra day off.  Labor Day was originally celebrated to honor workers and as a force for changes in the workplace.  In particular to encourage reforms in employee safety, working conditions and pay.  On Monday, celebrate America's workers and the sacrifice they make (albeit not unrewarded) for their employers and their families.

Have a safe and happy Labor Day holiday weekend.

Now for a little Texas Labor Day employment law (or as evidenced below, the lack of Texas employment law).

Texas Holiday or Premium Pay for Labor Day

Unlike some states, there is no requirement that employees be paid premium pay or overtime merely because they work on an official holiday like Labor Day.  Of course, if the employee is non-exempt and the work on Labor Day pushes him over the 40 hour per week threshold, the FLSA would require overtime be paid for those hours worked over 40 per week.

Follow me on Twitter @RussellCawyer.

More Labor Day resources:

U.S. Department of Labor's 2011 page.

A History of Labor Day and More Labor Day History.

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