I recently wrote about the importance of documenting employee performance deficiencies.  I also tried to outline several items to consider including in that performance documentation.  You can read my post here.

This week, two fellow blawggers posted additional examples about why documenting employee performance problems is essential.  Jay Shepherd at Gruntled Employees provides a humorous post on why "writing it down" is essential to winning a suit against a disgruntled employee.

Next, Michael Fox at Jotting by an Employer’s Lawyer summarizes a real world example where the employer’s failure to document the alleged performance problems caused it, in part, to lose a case against a former employee.

Keep these examples in mind when considering whether to document instances of employee misconduct or performance deficiencies.

Employees frequently stay connected with work through company issued smart phones.  Smart phones, like the iPhone, Blackberry, and Treo, allow employees to have access to their work e-mails, calenders and contacts –in addition to making and receiving calls.  In my practice, a smart phone is incredibly useful in staying in touch with my client’s needs when I’m in court or out  of the office.  However, with every advance in technology, come employment law challenges.

As recently reported in the WSJ.com, several lawsuits have been filed seeking damages for unpaid work time spent reading and responding to e-mails and customer complaints outside of regular business hours.  For example,T-Mobile USA Inc. was sued in July 2009 by three current and former employees for unpaid working time claiming they were required to use their T-Mobile issued phones to read and respond to message outside of working hours. (View the Complaint here).  In March 2009, CB Richard Ellis Group, Inc. was sued by a maintenance worker for unpaid work time after hours that included reading and responding to e-mails on his company-issued smart phone.  (View the Complaint here). 

Jon Hyman at the Ohio Employer’s Law Blog argues that even if employees use smart phones for isolated and sporadic short-term reading and responding to business e-mails, that time is not necessarily compensable time.   Hyman argues that:

Most messages can be read in a matter of seconds or, at most, a few short minutes.  The Fair Labor Standards Act calls such time de minimus, and does not required compensation for it.  "Insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot as a practical administrative matter be precisely recorded for payroll purposes, may be disregarded."

Hyman’s point is a good one; however, can this time be precisely recorded for payroll purposes?  Redwood Technologies, for example, has a smart phone application (Momentum) that allows the user to capture time spent reading and responding to e-mails and time spent on the telephone.  It allows the user to allocate that time to different client accounts.  Although this same technology could be used by employers to capture the time nonexempt, hourly employees spend reading and responding to e-mails.  This may not resolve the administrative impracticality of determining which e-mails are personal or business related, I suppose that there are applications out there which would allow an employer to capture this time if it was so inclined. 

While is remains to be seen whether the time spent reviewing and responding to e-mails outside of normal business hours will be recoverable in an FLSA lawsuit, some commentators have suggested implementing polices to either pay employees for this time or to prohibit (by policy) employees from using company issued smart phones outside of working hours.  The following is a menu of options employers may consider in deciding how to deal with the issue of providing company issued smart phones to nonexempt, hourly employees. 

  • Do not provide nonexempt, hourly employees with company issued phones capable of reading or responding to e-mail (i.e., smart phones). 
  • Purchase a technology solution that captures the amount of time the user spends reading and responding to e-mail and pay nonexempt employees for that time.
  • If the employer does not intend to pay for this off-hours review of e-mails, it should clearly set out its expectations that employees should not read and review those messages outside regular work hours.  For example, implement policies that prohibit employees from reading and responding to e-mails outside of regular working hours; require employees to leave company issued smart-phones at work; require employees to program the smart phones to turn themselves off during non-working hours. 
  • Limit the employees that are provided with company issued cellphones to those who have a legitimate business need to be routinely contacted outside of business hours and limit that outside contact for matters where it is necessary.
  • Pay employees who submit time for the nonbusiness hours review of e-mail and then discipline the employee for violating the employer’s policy prohibiting business use of company cellphones outside working hours (if the employer has implemented such a policy).

If the lawsuits referenced above conclude with successful results for the employees (or in class certification), employers can expect to see many more of these kinds of cases filed. 

Employees occasionally sue Texas employers for breach of contract claiming the employer violated its handbook policies in taking some action against the employee.  Texas law precludes most breach of contract claims premised on violations of an employee handbook where the handbook contains a provision expressly disclaiming any intent to create binding or contractual rights –whether express or implied.  

John Hyman at the Ohio Employer’s Law Blog recently wrote a post explaining the importance of handbook disclaimers.  (See post here).  While John is an Ohio practitioner, the seven vital elements he explains should be included in a comprehensive handbook disclaimer apply equally to Texas employers.  John’s seven vital elements include:

  1. A specific statement that employment is at-will, without exception.
  2. An explanation, in plain English, of what at-will employment means.
  3. A statement that no one can create a contract contradictory to the provisions of the handbook.
  4. A statement that the handbook is merely a unilateral statement of rules and policies which creates no rights or obligations.
  5. A statement that the handbook is not a contract and not intended to create an express or implied contract.
  6. A statement that the employer has the unilateral right to amend, revise, or eliminate policies and procedures as needed.
  7. A statement that employees should not rely on any statement in the handbook as binding on the company.

One word of caution.  If the handbook contains some provisions where the employer does intend to create binding, enforceable contractual rights, such as an arbitration provision or waiver of right to jury trial, those provisions should be specifically carved out of the disclaimer.   Including an effective handbook disclaimer can provide a powerful defense to any breach of contract claim based on handbook provisions. 

In addition to containing reasonable restrictions as to time, geographic scope and scope of activity to be restrained, Texas imposes additional requirements for enforceable covenants not to compete with licensed physicians.  Those additional requirements include that the covenant: 

  1. not deny the physician access to a list of his patients whom he had seen or treated within one year of termination of the contract or employment;

  2. provide access to medical records of the physician’s patients upon authorization of the patient and any copies of medical records for a reasonable fee as established by the Texas Medical Board;

  3. provide that any access to a list of patients or to patients’ medical records after termination of the contract or employment shall not require such list or records to be provided in a format different than that by which such records are maintained except by mutual consent of the parties to the contract;

  4. provide for a buy out of the covenant by the physician at a reasonable price or, at the option of either party, as determined by a mutually agreed upon arbitrator or, in the case of an inability to agree, an arbitrator of the court whose decision shall be binding on the parties; and

  5. provide that the physician will not be prohibited from providing continuing care and treatment to a specific patient or patients during the course of an acute illness even after the contract or employment has been terminated.

This legislative session, the law was amended to clarify that these additional limitations are not required to enforce a noncompetition agreement covering a physician’s business ownership interest in a licensed hospital or licensed ambulatory surgical center.  (Link here).  An ambulatory surgical center is a facility that operates primarily to provide surgical services to patients who do not require overnight hospital care.  In connection with a physician’s ownership interest in those operations, only the standard requirements for enforceability in the non-physician context apply. 

The additional physician-specific requirements for covenant not to compete enforcement appear to still apply to those licensed physicians who perform management or administrative roles within hospitals and healthcare facilities. The new law become effective September 1, 2009.

 Follow the Texas Employment Law Update on Twitter here.

The U.S. Department of Labor recently issued guidance via answers to some Frequently Asked Questions regarding work furloughs.  The FAQs can be found here.  I’ve previously written on employer use of furloughs.  You can read that post here.

Richard Tuschman at the Florida Employment and Immigration Law Blog also has a good post on furloughs that explains some of the potential legal pitfalls furloughs can cause.  You can find his post here.

In many states, an employee’s accrued, but unused vacation time must be paid on termination of employment.  However, under longstanding Texas law, an employee is not entitled to be paid for accrued, but unused vacation, on termination of employment unless the employee has a written agreement with the employee to do so or employer has a specific written policy that it requires vacation be paid on termination.  

The Texas Payday Act defines "wages", in relevant part as "vacation pay, holiday pay, sick leave pay, parental leave pay, or severance pay owed to an employee under a written agreement with the employer or under a written policy of an employer."  Therefore, vacation pay (and holiday, sick or parental leave pay for that matter) that is not paid under a written agreement or policy of the employer that provides that unused vacation is paid on termination does not constitute wages under Texas law and is not required to be paid on termination.

In the trial of most employment discrimination, harassment or retaliation cases, the employer’s documentation of its actions is critical.  An employer defending against these claims will need to be able to prove to a jury that it was its legitimate nondiscriminatory or non-retaliatory reason that motivated its actions as opposed to unlawful animus.  Contemporaneous written documentation of an employee’s performance problems, while not required, can go a long way in persuading a jury what, more likely than not, motivated the decision.  In writing effective performance documentation, here are some tips that can be considered.

  • Address the performance deficiencies or misconduct timely.  Rather than waiting for the "last straw" counsel employees on areas where they need improvement contemporaneously when those issues arise.  This provides the employee with fair notice that his or performance is deficient and will generally provide them with sufficient warning and opportunity to improve the performance.  Jurors, many of whom are employees themselves, expect plaintiff-employees will be given notice of their performance problems (unless sufficiently severe) before they rise to the level of terminable offenses.  
  • While it sounds simple enough, describe what it was that the employee did that violates the employer’s policies or expectations.  Be specific with the dates, times and places of the misconduct or poor performance.  If the employee has only been provided with verbal warnings in the past, describe the dates, times and places of those verbal warnings when it comes time to move to more formal discipline like a written write-up.
  • If the employee has received previous warnings or performance improvement documentation for the same or similar violation, include that information along with the date of the previous write-up and the specifics of that incident(s) as well.
  • If the employee has been advised of the policy or expectation that has been violated, set forth how the employee was informed of the policy or expectation.  For example, if the policy is set forth in the employer’s handbook, note that fact as well as the fact that the employee has been provided a copy of the handbook and signed a written acknowledgment of receipt. 
  • Be sure that the documentation advises the employee that improvement is expected and which such improvement must be accomplished.  For example, a warning for insubordination or safety violations might require immediate improvement whereas improvement based on a performance quota might be accomplished over time –e..g, 90 days.
  • If there is to be some follow-up by the employer, make sure that follow-up takes place and that the employee is given honest feedback on his or her progress toward accomplishing the improved performance.
  • Consider whether you will provide an area for the employee to provide a rebuttal or what the employee intends to do to improve his or her performance.   While this provides the employee with an opportunity to provide an excuse or justification for the poor performance, it also provides employees with an opportunity to give thoughtful consideration to the concrete steps he or she will implement to improve the performance.  This increases the likelihood that the employee will be successful in improving his or her performance.
  • Have a place for the employee to sign and date the form (or for a witness to sign that it was presented and discussed with the employee in the event the employee refuses to sign).  In cases where the employee has not signed the performance documentation, there is the possibility that the employee will deny that the events occurred.  Even worse, the employee could accuse the employer of fabricating the performance documentation for purposes of the termination or litigation.  The presence of an employee signature reduces the ability or effectiveness of an outright denial by the employee that he or she was warned of the prior performance deficiencies or misconduct.
  • Use a preprinted form for performance issues.  This will assist in ensuring that the information suggested in this post is included.  A sample form is available here.

With these tips, employees can be better apprised of their performance deficiencies and the documentation can be valuable evidence in the event the employer has to defend its actions in court.

Driving home recently, I was nearly run off the road by another commuter.  This driver appeared to be driving with her knees while text messaging on her phone.  As I avoided the swerving car and slowed to let the other driver proceed on her merry way, it was clear that this driver never noticed that she almost caused a collision.  

According to studies referenced in a recent NY Times article, drivers using cell phones are 23 times more likely to be involved in an automobile accident and drive about as well as drivers having a .08 blood-alcohol level –over the legal limit in most states.  As the Fort Worth Star-Telegram reported today, talking and texting on cell phones account for more automobile deaths each year than drunk driving.

Most employment and corporate fleet vehicle usage policies prohibit operating company vehicles under the influence of alcohol or other substances likely to have a detrimental effect on the driver’s alertness or responsiveness. Many employer policies also prevent the usage of cell phones in company owned vehicles or while on company-sponsored business unless hands-free devices are used. Given that we live in a world where Darwinian principles don’t work quickly enough to thin the herd of those too "distracted" to realize that they should not text message while driving, employers should considering adding specific prohibitions against using laptop computers, personal handheld devices, GPS/navigation devices and text messaging while driving to their vehicle fleet usage policies and other policies that govern employees who may drive as part of their duties and responsibilities.

One of the first highly publicized lawsuits dealing with distracted drivers using cell phones involved the case against Jane Wagner.  Ms. Wager was an associate for a large law firm.  On her way home from working long hours she struck and killed a 15 year old girl.  The girl’s family not only sued Wagner but also sued her law firm alleging that she was on a business call at the time of the accident.  The lawsuit initially sought 25-30 million dollars.  The law firm settled for an undisclosed amount but Wagner’s case proceeded to trial.  The jury awarded the family $2 Million.   In another case, an Arkansas lumber wholesaler, Dykes Industries, paid $16.2 Million to a woman who was severely disabled in a car accident involving one of its employees who was talking on his cell phone at the time of the accident. 

These cases involved drivers who were allegedly only distracted by talking on their cell phones.  Imagine what the verdicts or settlements would have been had the employees been texting while driving.  Employers should ensure that their fleet usage policies are updated to prohibit the types of activities employees may engage in while using company vehicles or on company business and should vigorously enforce those policies.  Failure to do so can give rise to potential tort claims when those employees are involved in accidents and there is an indication that the driver was distracted because of cell phone, PDA or other non-driving activity.  

This legislative session the Texas Legislature passed, and the Governor signed, amendments that significantly expands the scope of the Texas Commission on Human Rights Act ("Act") as it relates to individuals with disabilities.

The amendment provides that:

  • The definition of "disability" is to be broadly construed to the maximum extent possible and shall include impairments that are episodic or in remission that substantially limit major life activities when active;
  • Whether an impairment substantially limits a major life activity should be made without consideration of the ameliorative effects of mitigating measures;
  • Being "regarded as having [a substantially limiting] impairment" does not include an impairment that is minor and is expected to last or actually lasts less than six months, regardless of whether the impairment limits or is perceived to limit a major life activity.
  • No claim exists for non-disabled individuals for reverse discrimination;
  • No reasonable workplace accommodation is required if the individual’s disability is based solely on being regarded as having an impairment that substantially limits a major life activity.

The new law also adds a definition of "major life activity" that was missing from the Act.  Major life activity under the Act means:

caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working. The term also includes the operation of a major bodily function, including, but not limited to, functions of the immune system, normal cell growth, and digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions.

The new law becomes effective September 1, 2009 and is not retroactive to conduct occurring prior to the effective date. 

What should Texas employers do to prepare for the new law?  Since the Texas amendments are identical to the ADA Amendments Act of 2008 (which was effective January 1, 2009), employers that have already taken steps to comply with the federal amendments may need to do very little.  For employers that have not addressed the changes made to the federal law should consider doing the following sooner rather than later:

  • Review all policies and procedures to ensure that they comply with the new laws (e.g., if there were definitions or examples of major life activities, conform the definition to the amendment; if there are instructions to consider mitigating measures in determining the severity of limitations, change those provisions to conform to the law);
  • Train your supervisors, human resources staff and employees responsibility for assessing requests for reasonable accommodation on the amendments;
  • Update Job Descriptions to ensure that capture all of the essential elements of the relevant job;
  • Focus in the interactive process –determine what the barriers are that need to be accommodated and then provide an effective accommodation that has the least adverse impact on the business.

With the state law mirroring the post-amendment ADA, there is no incentive for plaintiff-employees to file lawsuits under the ADA or in federal court as there might have been in the absence of the Texas amendments.