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:  http://www.employment-matters.com/compliance/young-v-ups-murky-guidance-from-the-supreme-court/.

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.

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 (https://www.dol.gov/whd/overtime/fs17a_overview.htm), 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.

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.

As WKPZ celebrates its 40th anniversary this year, Margo, Amanda, and I reflect on our five years with the firm and what makes WKPZ so special.

 Letting People Explore their Talents

By Margo Melendez Karr

For me, WKPZ’s continued growth and success lies in its ability to find and build on the best personal strengths of its talent.

I left the workforce for a few years to raise kids a/k/a become a full time taxi driver, maid, cook, nurse, mediator, therapist, shopper and cheerleader. It is an under-rated, under-paid job I highly recommend. When I decided to re-enter the workforce part-time I knew I would not be able to find what I really wanted: a part-time marketing position. As I sifted through various sites, I found an overall office assistant position with varied duties at Levine & Associates. I now know that Mark received more than 400 resumes and interviewed 5 people. (He enjoys telling the story of finding my resume.) A few days later, Mark asked if I would take the OMNI Profile Job Candidate Personality Test. He volunteered to take it as well so that we could confirm our personalities would complement each other. My profile suggested that I need daily challenges and diversity of duties to remain excited about a job. In my mind, this meant Levine & Associates would be a temporary job, and Mark would admit today that he also knew he would be hard pressed to keep me interested.

Our move from Levine & Associates to WKPZ changed everything.  I took on new duties helping with Firm newsletters and marketing activities, and not long after, the shareholders asked me to assume the role as Marketing Director. Albeit a hybrid position, since I still assist lawyers in their cases, I now have an additional role that allows me to utilize my skills. My days fly by and are exciting, coexisting between the roles I hold and I truly believe it is the keen skills of the management team to allow me to explore and pursue my talents.

Diversity in the Workplace 

By Amanda Gutierrez

Diversity is a fun “hot topic” for business advisors to theorize about, but for me it is a benefit just as important as a 401k plan or health insurance.  As a young Hispanic woman, it was paramount in my job prospects.  We would occasionally joke that Mark was the minority Caucasian at Levine & Associates and the only male attorney. Our move to WKPZ allowed us (and me in particular) to work with more lawyers and many female lawyers (of various racial groups) who have expertise in a variety of different areas of the law.  In fact, when I joined the firm most of the associates were women. The female shareholders serve as fantastic role models. Likewise, I have been able to make my own unique contribution to our collective voice.  WKPZ works for me because we have a great mix of people, a benefit I never take for granted.

Governance by Consensus

By Mark J. Levine

I spent many months thinking about closing down Levine & Associates and joining WKPZ. I had two primary concerns. First, I wanted to make sure my people would have the opportunity to succeed. WKPZ exceeded my expectations as you can see above. Second, I did not know if I would be a good teammate after so many years as my own boss.   I discovered quickly that we govern by consensus, far different than some other professional service firms that rule by ego-driven perceived self-importance. At my first shareholder meeting in April 2011, I overheard a shareholder whisper to the Office Manager, “Am I the Firm President this year?” The point, I would learn with time, is that every person’s opinion matters equally and that no one assumes more power than another no matter their title, tenure, or name on the door. That is a fantastic — but unfortunately unusual — dynamic at a law firm. We talk through an issue until we reach consensus, and if we don’t have one, we move on to something else and return to the topic when we are prepared to reach a conclusion. The solidarity of our team makes it so easy to focus on what matters: clients. What makes WKPZ special is that the lawyers set their ego aside and focus on a team effort to provide best quality legal services to clients.

I hope you enjoyed this newsletter and to see you on April 21.

I get comments that my job requires a great deal of patience, occasionally even complements for my capacity to listen and provide guidance. I thank them and explain that my wife has a master’s degree in social work and that my ability to practice at my best began when Allison “retired” (at age 29) so that she could focus her attention on a single client: me.  Somewhat humorous, although my point is sincere: we each perform at the top of our game when we appreciate and recognize that our strength comes from the team effort.

Build Positive Relationships through Trust

Many years ago I worked at a sweatshop law firm.   I barely noticed the crazy long hours.  I was too busy enjoying the exciting work and the challenging experiences my outstanding mentor provided.    He was always open to new ideas and strategies.  The positive environment inspired great success for our clients.  Other associates were jealous of my experiences and pressed their bosses to give them more opportunity.

I shed some tears as I explained to my boss that the in-laws had called and advised I would need to relocate to Houston.   Twenty years later I can still remember that wonderful job and my dedication to a great boss (and a great firm).  My mentor prospered personally and financially because a happy worker makes for a profitable company.

Share the Credit and the Blame

The ego maniac in the workplace drives talent to leave as the credit for team effort is claimed by the arrogant boss. The people at the top have to spread the reward to the whole team and distribute the rewards for good work.

On this note, does anyone really think I write this newsletter without help? I started these newsletters in October 2010 because Chris Akers, my executive coach, forced it upon me.  Margo acts as Editor in Chief to ensure I meet deadlines, say something smart (hopefully), and politely comment on my sense of humor. Amanda is a valuable asset to the team.  She approaches her work with a vigor and excitement that complements the outcome of each project she takes on.

The flip side of the equation might be more important. Not everything goes perfect. A person who is quick to point fingers loses respect and has little ability to retain employees.  A boss willing to own a role in a mistake earns credibility and loyalty.

I hope you have a safe and happy New Year.

Today, I want to dismantle the notion that a jury trial is like a roll of the dice at a craps table.   Litigation has nothing to do with dice.  The better analogy is poker, my favorite game.
I recently had an enjoyable trip to Las Vegas with a few friends. When in Vegas, I am always drawn to that raucous attention that surrounds the craps tables.  But I last played craps in 1996.  I spend my time far away from the fun-loving hip people at the craps tables, instead submerged in the poker room where people of all ages congregate to show off their strategy, math skills, and smarts.  These same qualities, and not the luck of the dice, determine success in litigation.  Let me explain…

Know “your hand”

We all know a good starting hand in Texas Hold’em: a pair of aces (“bullets”), ace-king, and suited big connectors.  We also know what a good defense looks like in an employment claim.  Rather than looking for high cards and suits (not lawsuits but: ♣ ♠ ♦ ♥),  we focus on key questions:

• Is there good documentation to support the decision?
• Was the employee given a fair opportunity to correct his behavior?
• Was the discipline consistent with the employer’s practices?
• How long was the employee with the company?
• Was the employment decision vetted by management in consultation with human resources?

Employers need to know their “hand” before acting on a significant employment decision.

You can improve your position at poker and in litigation

Sometimes my son (see photo on right from summer vacation) and I watch Youtube segments of World Series of Poker tournaments.  We love to study how players act as they try to improve their position at the table with the flop, turn, and river. Smart litigators draw on similar strategies working to improve their hand as the case progresses.

My trademark —  Helping Employers Avoid the Courthouse®  — reflects my strategy working with clients.  I love helping clients strategize an approach to a complicated situation.   Sometimes we create the facts that determine the hand we will be dealt.    For example, when we counsel a client to place an employee on a performance improvement plan rather than terminate we are consciously aware that our hand is not yet strong enough to justify firing someone.  Sometimes, my job is to help a client decide that waiting to terminate is a mistake and that its time to cut the relationship before the hand goes south.  It’s all about reading the facts (the hand) to decide how to best act.

You can exit litigation and poker graciously

I quickly learned to hate the rollercoaster ride from euphoria to depression that I will always associate with playing craps.  While emotionally exciting, there is zero skill in craps.  Just as you are riding high, suddenly the 7 hits and all your money goes away.  Hence, I gave it up years ago.

As Kenny Rogers explains, Poker, in contrast, allows a player to “know when to fold them.”   So too employers need to assess the situation and know how to play a weak hand.  Indeed, the real talent in the practice of law is not winning a good hand but knowing how to play out weak cards.

I hope you enjoyed my thoughts for the month, and more important, I wish you and your families a wonderful holiday season.

Today’s newsletter is a recap for those who could not attend my October 21 lunch and learn presentation on intermittent leave.    The FMLA allows employees to take intermittent leave; that is, to take time off in separate blocks of time generally through a reduced number of hours worked in a workweek or workday.   Here are five quick tips to confronting the challenges created by intermittent leave.

• Permit intermittent leave only if the employee can perform his normal job duties while at work.

Whether leave is to be taken continuous or intermittent should be dictated by the employee’s doctor on a completed “Certificate of Health Care Provider” Form (WH-380). If the physician indicates the employee cannot perform his normal job duties for an extended period of time, then the employee may be entitled to continuous leave but not intermittent leave.  The FMLA does not allow an employee to work intermittently if the employee cannot perform his normal job duties during the time that he can be at work.   Never let an employee exploit FML intermittent leave as a means of lessening their job duties.   An employee seeking modification of job duties must turn to the ADA, not FMLA, for relief.

1. Establish the leave entitlement in writing.

An employer should examine the actual number of hours an employee works during the prior 12 months to determine the leave entitlement.  For example, if an employee regularly works a 50 hour work week, than 10 hours of leave time equates to 1/5 of a week of the employee’s 12 weeks of FMLA entitlement.  Similarly, if an employee only works 30 hours a week, than 10 hours of leave is 1/3 of a week of the employee’s 12 weeks of FMLA entitlement.  The employer should establish these parameters in writing to avoid any subsequent controversy or debate.

• Deduct all leave time.

Employers should take more advantage of DOL regulations that allow for deducting FML time from mandatory overtime that an employee rejects based on the FML condition.   If the employee would normally be required to work overtime, any overtime the employee cannot work because of the FML condition should count against the person’s leave time. In contrast, overtime that is voluntary or worked on an “as needed” basis may not be deducted against FML use.

1. Don’t relax the rules.

Employers may require employees on intermittent leave to comply with “usual and customary” notice requirements.  This includes call-in policies.  Thus, an employer may discipline (and even discharge) an employee who fails to call-in an absence in which the employee contends qualifies for intermittent FML.   The opposite is true as well.  An employer should never discipline an employee for an absence if FML is already known to be connected to the absence. Most obviously, an employer must apply these policies uniformly or otherwise face the risk of retaliation claims.

• Consider temporary job transfers.

Employers should consider a temporary transfer as a substitute for intermittent leave.  If an employee cannot perform all her job duties because of an FML condition, an employer may offer a temporary transfer to another job that allows an employee to continue working full-time.  The alternative position must have equivalent pay and benefits, but not equivalent duties.   The transfer cannot be punitive or designed to discourage the employee from taking leave.

I hope you found these tips helpful and to see you at my next Lunch & Learn in February 2016.

Last month I mentioned my favorite movie, The Godfather. Today, I want to talk about one of my favorite TV shows: Seinfeld. Seinfeld had a magical way of tackling a complex or taboo topic. George Costanza made me laugh the most. His ridiculous antics are difficult to forget, and he most certainly knew how to get fired:

• Fired from Pendant Publishing because he had sex with the cleaning lady on his desk;
• Fired because he pretends to be handicapped so he can use his boss’ private bathroom;
• Fired as a kid from Dairy Queen after he put his feet in the soft serve.

Did George ever get a write up or go through progressive discipline? Did George ever get a PIP?

The lesson from George Costanza is this: An employer should end the employment relationship when an employee engages in a genuine act of stupidity for which there is no explanation. This is particularly true when the individual cannot grasp that the conduct was idiotic. Think George and the cleaning lady. His reaction, “I thought it was frowned upon,” not against the rules.

Yet, employers worry so much about litigation and strict readings of their policies that they sometimes lose sight of common sense. For example, I bet George was right. There probably was no rule against having sex with the cleaning lady. I can’t imagine that was covered in the Pendant Publishing Employee Manual. But his employer nevertheless wisely fired him recognizing that George was not likely a strong candidate for future success given his serious lack of judgment.

The other lesson George taught us is that being fired is not a catastrophe. People move on to find a better fit. For George it was Pendant Publishing to the New York Yankees. Okay, it was a stretch in the plot line, but I know from my 20 + years defending wrongful termination claims that most people end up making more money within a reasonable time after losing the job that was the subject of their suit.

I required that my wife watch The Godfather before our engagement. It is still one of my favorites and the classic, often quoted one liners keep the movie current. “It’s Business, Not Personal” is certainly one of the most often repeated expressions that you won’t hear me use. Most of my work is personal. Even the tag line “Employment Matters” is a double entendre drawing on the emotional issues of my profession.

Our client’s struggle with a similar issue: how to balance being a compassionate employer while avoiding the problems caused by employee personal problems.  Things like childcare, divorce, and other trouble at home nearly always show up in absenteeism, a general decline in work quality, and a lack of commitment. Some supervisors will cut a worker slack for the unusual, unexpected personal matter that causes someone to be late, absent or otherwise interferes with work.

The trick is defining when a little slack turns into a long rope that the employer cannot pull in fast enough.   Kindness to one worker might be perceived as favoritism by others. Being consistent with generosity is difficult.   A persistent favor may in hindsight look like an accommodation available for all.

So what is an employer to do?

Start with fair policies

An employer should provide sick leave, vacation or some alternative combination of paid time off. It should be reasonable, not overly generous. An employer with no sick time forces people who should be off to expose others to illness.   Fair policies should allow for compassionate treatment.

Stick with the policy

If you have fair rules, they don’t need to be bent. If the rules force too many people out, maybe they are unreasonable and need to be reexamined. Allowing supervisors to have discretion to modify and bend the rules is a recipe for claims. I have said this before and it warrants repeating. Reprimand supervisors for making exceptions to rules without approval from human resources.

Don’t confuse personal problems with protected status

Before taking disciplinary action, an employer should make sure that an employee’s absence for the care of a family member does not qualify for Family Medical Leave. Employers cannot place the burden of requesting FML on an employee. If the employer knows of facts that would support FML, the employer must send notification of FML rights.

If you must bend the rules, define the parameters

Sometimes there will be occasions that management wants to make a special exception. When those situations arise, consider documenting the basis for the exception and the parameters for it. For example, an employer might extend additional sick leave to an employee to allow for additional paid leave with a tradeoff that the additional leave be deducted from a bonus.

I hope you enjoyed this newsletter and if you haven’t already, take time to watch the Godfather (Parts I and II… only).

I detest when my tax dollars (and yours) are wasted by agencies of the executive branch in pursuit of hypocritical agendas.  During my last lunch and learn presentation I discussed a few examples.  For those who missed it, here is a recap of a few EEOC action items that reek of hypocrisy and might make you irate too.

EEOC campaign against use of criminal conviction records

The EEOC has sued five employers in the past six years claiming each discriminated against minorities with policies that screened applicants with criminal convictions.

• Peoplemark: Suit filed September 29, 2008;
• Freeman: Suit filed September 30, 2009;
• Kaplan Higher Education: Suit filed December 21, 2010;
• Dollar General: Suit filed June 11, 2013; and
• BMW: Suit filed June 11, 2013.

The first problem with the EEOC’s move is that it waited until April 25, 2012, after filing the first three suits, to issue guidelines on the topic.  Those guidelines state:

“An employer’s neutral policy (e.g., excluding applicants from employment based on criminal conviction) disproportionately impacts a protected group, which violates the law if not job related and consistent with business necessity.”

More troubling is that employers fighting these EEOC lawsuits discovered an interesting twist: the EEOC has a policy that considers criminal conviction records in its hiring process.  In the Dollar General case, which is on-going, Dollar General has demanded information about how the EEOC has enforced its criminal record policy.  The EEOC is fighting the request while simultaneously demanding ten years of documents from Dollar General. Now that’s hypocrisy!

The EEOC clearly is not the only government agency that conducts criminal record checks.  For an interesting example of how the government cannot get on the same page look at the opinion letter from the EEOC to the Census Bureau challenging the Bureau’s policy precluding employment of persons with convictions.  See http://www.eeoc.gov/eeoc/foia/letters/2011/titlevii_crimial_history.html

Fortunately, our constitution created three branches of government and the judiciary has called out the EEOC’s double standards.   For example, in the Peoplemark case the Court sanctioned the EEOC and ordered that it pay $750,000 to the employer.  Unfortunately, every dime spent by the EEOC – including the sanctions – comes out of our tax payer money.  And the worst news: the EEOC seems convinced that it should continue to pursue its agenda against the use of criminal convictions in employment.

EEOC policy on pregnancy accommodation

The EEOC takes the position (in published guidance) that pregnant women are similarly situated to injured workers, and thus an employer must provide pregnant women the same form of accommodation as someone hurt on the job.  I wrote about this issue in last month’s newsletter when discussing the recent Supreme Court case, Young v. UPS. 

In the Young case, the Supreme Court ridiculed the EEOC’s position and guidance on the topic calling it severely limited because “of timing, consistency, and thoroughness of consideration.”  Our highest Court pointed out that the EEOC’s guidance was inconsistent with positions for which the Government has “long advocated.”  It cited to a 1996 case in which the Government took an opposite position.  The Court also questioned how the EEOC and Department of Justice could take contradictory positions.  The DOJ, arguing on behalf of the United States Postal Service, had previously taken the position that pregnant employees with work limitations are not similarly situated to employees with similar limitations caused by on-the-job injuries and thus not entitled to the same treatment.  Yet, here the EEOC took the exact opposite position. It’s a sad state of affairs when the Supreme Court, the highest court in the land, has to point out to government agencies the hypocrisy in their positions.

On September 16, I will host another lunch and learn.  I would love to hear from you about topics you would like me to address.