DOL Game Changer

Posted on July 31, 2017 in Consulting

The stability and predictability of 78 years of wage and hour law has been in flux over the past year, and things got really interesting just last week. On Wednesday, July 26, 2017, the Department of Labor issued a Request for Information (“RFI”) that suggests the government might – I stress might – rework the fundamentals of wage and hour law. The RFI seeks comments on the regulations related to exemptions for executive, administrative, professional, outside sales, and computer employees and can be found at:

One question in the RFI struck me as particularly interesting and potentially game changing:

Question 7: Would a test for exemption that relies solely on the duties performed by the employee without regard to the amount of salary paid by the employer be preferable to the current standard test? If so, what elements would be necessary in a duties-only test and would examination of the amount of non-exempt work performed be required?

This question suggests that the DOL is seriously considering the abolishment of the salary-basis test in favor of classifying employees as exempt from overtime based solely on the type of work they perform. The history-geek in me finds this fascinating because a minimum “salary” for white-collar professionals has been required since 1938 without substantial challenge.

In fact, only recently did the DOL create an uproar when it sought to increase the salary threshold from $455/week to $913/week effective December 1, 2016. On the eve of that effective date, however, a federal judge enjoined the enforcement of the increased salary threshold. The DOL quickly appealed. Interestingly, the DOL acknowledged in its brief that it no longer seeks to enforce the salary threshold increase and insisted that the salary-basis test is valid. If you are unfamiliar with this litigation, please check out:

Yet now – because the story needs another twist – the DOL has issued an RFI that questions whether a salary-basis test even makes sense. What does this all mean? In short, the DOL is reconsidering fundamentals of overtime exemption regulations.

And the DOL is correct to rethink this issue. Whether someone earns money on an hourly, daily, or weekly basis has no economic significance. Instead, an exemption from overtime should be based on a minimum annual income test adjusted periodically based on a formula driven by published data from the Congressional Budget Office. Thus, the DOL should abolish the salary-basis test in favor of something more akin to a requirement that the FLSA exemption be governed by a minimum guaranteed annual compensation. I leave it to economists to set that figure, but I am pleased to see the government rethink the issue.


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Vacation Policies 101

Posted on May 31, 2017 in Consulting


I love my work, but vacations even more.  I soon leave for summer vacation — a trip looking at colleges and then an escape with the wife sans children.  Before I take my much needed break, I decided to offer some tips on employer vacation policies. Or, as I note first, let’s consider calling it paid time off.

Tip One: Strongly consider Paid Time Off rather than vacation or sick time

Many employers offer paid vacation and paid sick leave as distinct benefits.  In this context, employees use vacation for rest and relaxation and sick leave for medical needs.  But we all know they get jumbled.  An employee wanting an extra day off may end up ill just before a planned vacation. Employees abusing sick leave for additional time off is an irritation to management and is a complete annoyance to HR.

Paid-time off evolved as a means of stopping the policing of sick leave.  PTO bundles sick and vacation time to eliminate the need to monitor time away.  With PTO we dispense with the obligatory doctor’s note every time someone has a bad cold or a stomach bug, based on policy.  PTO policies may also eliminate fake illnesses as the reason for the time off as it requires no explanation.  Some employees judge this to be more fair since healthy workers get as much time as workers who get sick more often.

Tip Two: Never “loan” PTO or vacation time

I have never understood why an employer would grant an employee PTO in excess of what is stated in a policy.  The “loan” is a request to violate policy.  Good employees never ask employers to break the rules.   Additionally, the “loan” establishes a new standard that all employees could claim and, if not granted, might create fodder for discrimination claims.   Keep it simple: stick to the policy and never advance additional PTO (or vacation time).

Tip Three: Cap PTO Roll Over

Allowing employees to roll their unused PTO (or vacation) into the next calendar year is bad for business.   The banked time can create a sizable liability on the balance sheet.  Also, large amounts of accumulated leave may make it difficult to manage the time off when an employee wants to uses it in long increments.  Most important, good employees need to be rewarded with time off and encouraged (perhaps forced) to use their annual PTO entitlement or risk forfeiting it.

I hope you all enjoy your summer vacations and that you encourage your colleagues to do the same.

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Picking Bad Fights

Posted on April 26, 2017 in Consulting

Employers often spur challenging litigation or government investigations by picking a fight with a former employee over an unworthy issue.   The fight might involve an employee taking something that does not belong to them and typically not of any real value (e.g., a uniform or some small company tool).  Similarly, a business may feel compelled to send a cease and desist letter with no intention of filing suit to enforce the non-compete the employee signed.  Perhaps the most common dispute relates to docking an employee’s final paycheck and soon thereafter the DOL appears for a random audit or OSHA shows up for an inspection.

Today I write to discuss some tips employers should consider before they send a letter that spurs a former employee to pursue a claim in court or with a government agency.

Call the Lawyer First

If your thinking this advice results in more work for me and obvious self-promotion, not true.  In reality, I have for twenty plus years frequently persuaded clients to make choices that avoid litigation and decrease legal fees. A 30 minute conversation with your attorney can generally pinpoint the concerns that might warrant an employer backing off a petty issue to avoid a real fight.

Know Your Exposure

Nearly every DOL audit, and subsequent review of overtime obligations, comes from an anonymous phone call to the DOL from a disgruntled former employee.  The DOL never pays any attention to the integrity of the caller.  The government could not care less that the employee, by way of example, was smoking marijuana while driving or stole from the company.  (Both are true stories.)  Thus, an employer needs to think about whether it is prepared to open its time records and payroll before launching into a controversy against an angry former employee.

Likewise, many EEOC Charges of Discrimination stem from fights employers start.  One extreme example proves my point.   A client forwarded an EEOC Charge with allegations of sexual misconduct so detailed that I was embarrassed to have it lying on my desk.  The Charge was filed long after the employee quit and within 30 days of the company sending her a letter informing her that she should not be in communication with clients of her former employer.  The company was not intending to fight the non-solicitation of clients provision and only wanted to scare the woman away from competing.  It did not bode well for the employer.

Assess the Potential Gain

Employers need to know what they want to achieve and be committed to the position before they start a battle with a former employee.  Having the last word or trying to send a message is rarely a worthy purpose.   The business should assess the real cost of the fight and be willing to engage in the war, not the battle.

The Lesson:  slow down and think before you poke a former employee.

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Posted on January 5, 2017 in Consulting

Uncertainty surrounds the wide ranging changes President-elect Trump has promised that are certain to impact employers.   Time will tell which campaign pledges come to fruition that impact the workplace. Whatever those changes may be will not, however, have a dramatic affect on employment-related litigation. Instead, employer will avoid the courthouse when they focus on strong fundamentals no matter who sits in the Oval Office Here are some basics all employers should focus on in 2017.


Effective Communication


My first news letter in October 2010 ( argued that effective communication avoids workplace issues from becoming employment claims.  That will always be true.  Effective communication is direct, honest, and conveys a clear message.  Anything short of this leaves the employee questioning the bosses intentions and motivations.


I was reminded of this recently at a lunch with a lawyer-litigator friend who asked whether I thought an employer should tell someone the reason for termination in an exit interview.  Many people (really smart people too) hold tight to the premise that at-will employment means an employer never owes a person a reason for losing their job.  While that is true, an employee who does not hear the rationale for termination will draw their own conclusions and might lean toward conspiracy theories or illegal ulterior motives.


I highly recommend employers communicate effectively and provide a clear, concise explanation for termination.  It may be harsh but there is no substitute for the truth.


Read your Policies


Hypocrisy emerges most often when HR folks fail to achieve their own understanding of the company’s policies.  Managers must also know company policies.  Unfortunately, too little attention is placed on studying policies.  We assume that people will take the time to read the handbook and other pertinent policies.


Take some time this month to read those policies, and while doing so, look for and propose needed changes.  Also, borrow a lesson from our colleagues who handle HS&E and learn from the example of “tail gate” meetings.  Before work begins the crew talks about the task at hand, the environment, and the safety protocol.


Too bad the work day does not begin with “the policy of the day.”  Perhaps it should.


Be Accessible


All good legal work starts with an attentive lawyer who listens to the facts with an open mind to help clients achieve the best possible results.  Good HR begins with the same approach.


The ideal HR department will be available and approachable creating an environment that welcomes a person seeking to make a good faith complaint.  Likewise, HR needs to create an environment that encourages management to seek their guidance.  A few easy rules for HR personnel:


  • Avoid the appearance of favoritism.  For example, eat lunch with a diversity of people;


  • Keep your door open;


  • Speak in positive terms.  Avoid such terms as: “You can’t do that.”  Think: “How can I help”.

I wish you the best in the new year and hope to see you at my upcoming Lunch & Learn.

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Confronting Political Conversation in the Workplace

Posted on October 13, 2016 in Consulting

I could not escape talking some politics after the recent revelation from Access Hollywood of the Trump video.  This election, perhaps like none in recent times, has brought vibrant and divergent issues to the water cooler.  The good news is that this controversy should end in 30 days.  But when it’s over plenty of other political topics will stir up workplace problems.  Here are my tips for dealing with hot topics in the workplace.

Know your Employer Rights

The First Amendment precludes the government from restricting speech.  It does not extend into the private sector.  Thus, an employer may ask employees to refrain from bringing controversial topics into the workplace that might offend others.  A manager is entitled to pull aside an employee who is spewing his view about, for example, immigration reform when it might upset Latinos.  A manager is obligated to stop the speech if it crosses into discriminatory tone.

Teach Respect

I have never been a fan of people who have an opinion about everything.  Three kids and a wife remind me that I don’t know enough to have insight on all topics, and I acknowledge they are correct.  There are, however, those people we work with who seem to know it all and want to share their wisdom.  Such people might be advised that the best co-workers find a way to respect the opinions of others.  Employers should stress that good people welcome multiple perspectives.  The best of us recognize that our personal histories shape who we are and what we think.  There should be room in the workplace for divergent opinions, provided, of course, that those opinions do not cause or mean harm to others.

Managers should Be Silent on Hot Topics

Managers should never engage in a politically controversial decision.  It’s just that simple. If a supervisor picks a side on a hot topic, those who oppose his views may feel disadvantaged and disfavored.  Better yet, a supervisor not focused on work sets a terrible example.

A Few Topics that Should be Avoided at Work

Knell or Not KnellColin Kapernick made the cover of Time recently. Some find his action deplorable. Others respect his attempt to confront racial tension in America.  I will not state my opinion here, but I will share one point.  Debating this topic at work will be fodder for a race discrimination claim so leave it out of the workplace.

 The Middle East.   The most frequent religious accommodation issue we see relates to prayer requests by Muslim employees.  Meanwhile, anti-Muslim sentiment appears to be on the rise with a corresponding increase in EEOC religious discrimination claims.  I most certainly have a strong view on the Middle East, but, again, I do not need to share them, and I know that some topics are best left out of the workplace.

Pro-Life/Pro-Choice.   Only Seinfeld could confront the highly divisive issue of abortion and escape unscathed. See if you’d like, but don’t watch at work.

I hope you enjoyed this newsletter and hope to see you at my Lunch & Learn on October 20.  Please let us know soon if you would like to attend.


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Punishing Employee Theft

Posted on September 27, 2016 in Consulting

I learned valuable lessons through personal experience in dealing with employee theft.  The story involved my father and the men’s clothing store he owned in a small South Texas town. (I can share the story without concern of the attorney-client privilege because the store closed in 2005 when my father passed.)   Many years ago, my dad sought advice from me about an employee who was regularly stealing merchandise.  My father was so concerned about potential repercussions over firing a long-term employee in a small community that he chose to ignore my advice to immediately terminate the employee.  He thought the theft may have been small.  Eventually, he did fire the employee after concluding the theft was much more substantial but only told the employee he had “lost confidence in him.”  My dad would not press charges and the thief was never confronted with his crime.


I want to share some wisdom from this experience and many others I have experienced with clients.  My message is simple: prosecute thieves.


  • Always Press Charges



In my experience, most companies have little interest in pressing charges and prosecuting an employee for theft. They focus on getting some of their money back through private settlement agreements that provide for a portion or repayment on long-term payment plans.  Businesses simply have too little trust in the criminal justice system.


I understand the financial motivation, but criminal prosecution often includes reparations too.  Additionally, not pressing charges sends a terrible message in your workforce, and often scandals of this type become the subject of gossip.  Thieves win and business suffers.


I suggest employers break the trend of leniency and press charges when the evidence exists to prosecute.  In recent years, we have helped clients coordinate with local district attorneys to prosecute workplace thieves.  The police and the district attorney take these cases seriously and will pursue charges.


  • Advertise Your Policy of Prosecution



So much is included in a typical handbook that does not need to be there.  But how many employers tell employees that all theft will be subject to prosecution without exception.  Perhaps very few do.


I suggest employers adopt and publish a policy that states:  “The Company will immediately terminate and press charges against any employee caught stealing from the Company. No exceptions will be considered.”


  • Don’t Let Sympathy Change your Mind



Employers should not judge who and who should not be prosecuted.  Our rule of law places that responsibility in the criminal justice system, not with company management. The justice system is riddled with attacks on the discriminatory treatment of minorities.  Employers should not add to the problem by exercising their discretion to the mix.


I hope you enjoyed this newsletter and will share it with colleagues and friends.  Please join me on October 20, 2016, at my next Employment Matters Lunch & Learn Series.

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FOX NEWS ALERT: Sexual harassment is still illegal

Posted on July 29, 2016 in Uncategorized

I opened my Sunday New York Times to read a very interesting article about the sexual harassment scandal at Fox News.    We’ve all seen the allegations against Roger Ailes and read of his resignation from the news empire he built.  The Times article focuses less on Ailes and more on other allegations of sexual harassment at Fox News.  The article and the allegations offer some valuable lessons to employers.

First lesson:  Stop thinking that he’s “just not that type of person.”  You have no idea how many times I hear that line in my work.  The Times article reminds me that harassment and gender discrimination is perpetrated across economic and social classes by people who by all other accounts would be impervious to allegations of harassment.  However, employers sometimes rationalize bad workplace behavior as the actions of the “lower class” and “uneducated.”   Relying on this theory, I once read a case from a U.S. Circuit Court that actually concluded that construction workers should be judged on a different standard because they are prone to be crass.  (It’s not good law anymore.)  With 20+ years of experience, I can assure clients that sexual harassment occurs in all sorts of workplaces committed by persons of all level of social status irrespective of the harasser’s education or financial means.  Mr. Ailes clearly proves this point.

Second lesson: Employers should be cognizant of the public relations nightmare that can surround allegations of sexual harassment.  The Fox case is an extreme example because the victims are news women with a massive following who have an opportunity to share in a very personal way the harm that sexual harassment creates.    The other networks have and will continue to seize upon Fox News current disgrace as any business competitor would.   For a humorous example you might enjoy Colbert and Stewart’s take on the Fox News story:

Third lesson:  The New York Times piece was filled with other examples of sexual harassment having nothing to do with Mr. Ailes and might never have been made public but for the scandal at the top.  Because of the courage of a few brave women to take their complaint public, all the other bad actors might never have answered publicly for their behavior.


If you would like to read the Times article, here is a link to it:





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EEOC Disappointment: Long Awaited (and unhelpful) EEOC Guidance

Posted on June 16, 2016 in Compliance

EEOC Disappointment: Long Awaited (and unhelpful) EEOC Guidance

On May 9, 2016, the EEOC issued long awaited guidance regarding leaves of absences as a form of reasonable accommodation under the Americans with Disabilities Act Amendments Act (the “ADAAA” or “ADA”, as we often refer to it).  We hoped the EEOC would address the big question: how much leave does an employer have to provide? The EEOC skirted its opportunity to be bold and instead issued rules that remind employers of the uncertainty associated with leave as a form of accommodation.  However, we can pry some useful information out of the EEOC’s latest guidance.

Employers must amend and bend policies to provide for leave as an accommodation.

The EEOC makes the valid point that an employer cannot hide behind its policies as a mechanism for denying leave as a form of accommodation.  Historically, employers distinguished in their policies between persons injured at work and those who needed leave for other reasons.  The new guidelines remind employers that the source of the disability is not a basis for denying leave irrespective of company policies and practices.  This will surprise some employers who think of worker’s compensation as a special case.  In fact, employers need to be very conscious of being consistent in how long they permit someone on leave in all circumstances to avoid claims of bias.  The Supreme Court shed some light on this issue in a case called Young v. UPS.  See Mark’s article:

FMLA is a floor, not a ceiling.

Many employers believe the Family Medical Leave Act (“FMLA”), or a state law equivalent, sets the maximum amount of leave that an employee may be entitled. Employers with less than 50 employees mistakenly think they are exempt from providing leave.  The new guidelines make clear that both assumptions are incorrect.  The EEOC reminds employers that ADA leaves should always be considered after an employee has exhausted FMLA and as an option for employees who are not eligible for FMLA leave either because the employer has too few employees or the employee has not been with the employer the requisite 12 months.

You cannot outsource ADA compliance.

Employers often rely on third-party administrators (“TPA”s) to handle short-term and long-term disability benefits.  Some TPAs will provide, for an extra charge, ADA leave administration.  The new guidelines make the fair point that outsourcing leave administration does not relieve an employer of its obligations or liability.  Frankly, our experience suggests that TPAs are a poor option for ADA leave administration.  We are happy to elaborate on this opinion privately.

More ADA claims is the unfortunately most likely consequence of the new EEOC guidance.  So employers need to have heightened awareness to employee requests for leave and circumstances where the employer knows leave should be considered as a reasonable accommodation.


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DOL Shakeup: New Salary Thresholds for the White Collar Exemptions

Posted on May 23, 2016 in Uncategorized



Employers should prepare for a dramatic change in overtime law.  On December 1, 2016, an employer can utilize the so-called “white-collar” exemption only if it pays an employee a guaranteed weekly salary of $913 ($47,476 annually). This constitutes one of the more dramatic changes in overtime law in many years because the old rule set the salary threshold at a mere $455/week ($23,660 annually).  The old threshold was below the poverty level for a family of 4; the new threshold is game changing for an estimated 4.2 million American workers,  370,000 in Texas alone according to the DOL.


This newsletter provides thoughts on how employers should prepare for the change.


  • Remember the Duties Test



One comon misconception in employment law is that paying an employee a guaranteed salary in and of itself makes the person exempt from the Fair Labor Standards Act overtime requirement. Paying a guaranteed salary is only one-half of the test.  The employee must also perform duties that meet one of the “white-collar” exemptions: (a) professional (e.g, a lawyer, doctor, or accountant) ; (b) executive (e.g., a CEO, manager of a department of two or more people); or (c) administrative (e.g., Office Manager, Director of Safety).  The duties test can be found on the DOL website (, and we can help walk you through it iif needed.


As companies examine how to implement the new salary threshold, they should also assess whether their presumed non-exempt workers truly meet the duties test. If not, the new salary threshold is irrelevant and the employee must be paid overtime for all hours worked over 40 in a workweek.


  • The new rule does not mandate pay raises



Clients are already calling concerned that the DOL has effectively instituted a pay raise. Not so.  The DOL does not set compensation standards.  That is left to employers.


For the same reason, when converting an employee from salary to hourly, an employer is not required to use the employee’s last salary as the basis for calculating an hourly rate. An employer can use empirical data to calculate an hourly rate that allows employees to make what they made on salary by working the overtime expected of them when they were paid on a salary-basis.  The important part of these conversions is in communicating effectively with the workforce that the change is not intended to decrease their pay.


Similarly, even though someone could be exempt if paid on a salary-basis, it does not mean they have to be paid on a salary-basis. For example, a lawyer (working as a lawyer) can be paid on an hourly basis even if they could be deemed exempt if paid the minimum threshold salary.


  • Avoid creativity



There is no room for original thought or creative design when trying to comply with the FLSA. If an accountant or other service professional suggest otherwise, you should run to your lawyer for a second opinion.  Do not look for easy outs or complicative payment schemes.  They will fail.


Employers must utilize the next six months to implement any needed changes. Let us know if we can be of assistance.












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Quality Documentation

Posted on March 2, 2016 in Consulting, Employment Litigation

There is an old adage in HR: document, document, document.   A better motto is good documentation beats a bad claim.  Only well written documentation matters when an employer is trying to win an unemployment claim, fight off a claim by a former employer, or, in the most extreme scenario, to convince a jury that it acted appropriately.


Let me demonstrate my point with a typical scenario.  A client forwards me a demand letter from a lawyer representing a former employee claiming wrongful termination.  My first focus turns to the personnel file.  I hope to find documentation that stands on its own to explain the rationale for the employee’s termination that I can voluntarily send to the lawyer so that he understands his client’s allegations are irrelevant.  The easiest way to knock the wind out of a blowhard plaintiff’s lawyer is to freely share with him evidence that his case is far weaker than he hoped.  More often than not that will come from a personnel file.


Well written personnel decisions have the following characteristics:


  • Signed and dated by the author;
  • Relies on objective facts (examples where appropriate), not opinions or speculation;
  • Cites to appropriate detail (the relevant event, date of incident, witnesses);
  • Explains the investigation that occurred to support the conclusion;
  • References applicable rule or policy and perhaps attaches it;
  • Identifies prior discipline if applicable;
  • Provides employee opportunity to sign and state his/her defense.

Consider the alternative scenario.  I get a demand letter alleging wrongful termination and my client forwards me a personnel file with a few “check box” form without any elaboration.  The checked boxes fail to tell the story.  I have to set up a conference call with the supervisor to provide detail, assuming, of course, he still works for the client and still recalls the situation.   The opposing lawyer will request the personnel file, and I either volunteer it or leave him speculating that my refusal to share is a sign of weakness.  Now my client has to consider the costs of defending a claim and, most likely, starts debating what it will cost to defend a potential suit.  All because of the lack of quality documentation.

Keep it simple and teach your managers the significance of well written documentation.


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