Category Archives: HR profession

Of RIFs and FMLA Requests

Every HR professional knows that FMLA requests can get tricky, and that non-compliance can get costly. A recent court ruling shows there might be a price to pay even when an employee doesn’t explicitly make an FMLA request.

According to Crain v. Schlumberger Technology, Gregory Crain worked for 10 years as a regional sales manager for Schlumberger Technology Corp. and its predecessor company.

Terminated from his position as part of a reduction in force, Crain subsequently filed an FMLA interference claim, contending that the company violated his leave rights by letting him go just days after informing the organization that he needed to undergo surgery that would force him to take time off from work.

In October 2016, a jury agreed with Crain, awarding him $77,007; the amount of his severance. More recently, the United States District Court for the Eastern District of Louisiana affirmed that ruling, awarding Crain the original verdict award along with an additional, equal amount in liquidated damages. In other words, Schlumberger must now pay double the damages.

Why? The timing of Crain’s termination was certainly a factor, according to Tina Syring, a Minneapolis-based partner at Barnes & Thornburg and a member of the firm’s labor and employment law department.

As Syring points out, Crain’s name was included in the list of employees to be included in the RIF; a list that surfaced two days after his surgery.

“Prior to the formal notification, however, the plaintiff’s name was never included in any company RIF documents, even though the employer’s witnesses claimed that the decision to include him in the RIF was made weeks before such notice.”

In the end, she says, “the jury found the employer’s witnesses less credible than the company’s lack of documentation surrounding the decision to include the plaintiff in the reduction in force.”

Syring describes this decision as a “great reminder” that documentation matters when mapping out a reduction in force.

“According to the court, given the weight of the evidence (or lack thereof) and the temporal proximity of the termination, it was not an unreasonable decision by the jury to find in favor of the plaintiff.  Thus, when addressing RIFs, employers should take the time to carefully document which employees are being considered for the RIF and update this documentation throughout the decision-making process.”

Adding another wrinkle to this case is the fact that Crain didn’t specifically mention FMLA when he told the company that he would undergo surgery and would subsequently require time away from work. He did, however, inquire as to short-term disability leave, which ultimately compels the company to weigh the possibility of FMLA leave.

“As the Crain court noted, an employee is not required to use any sort of ‘magic words’ to provide notice of the need for FMLA leave,” says Syring.

“In this situation, the plaintiff made an inquiry to human resources about short-term disability. The Crain court found that to be sufficient notice to the employer to at least make an inquiry as to whether FMLA leave notice and adherence obligations were triggered,” she says, adding that testimony had also been given to confirm that the plaintiff told his former supervisor and two HR representatives that he was going to have surgery.

“Because the company could not demonstrate that it even considered the possible application of FMLA leave prior to [Crain’s] termination, the court found that the employer’s actions were neither in good faith or reasonable.  As a result, liquidated damages were awarded against the company.”

 

 

Trump Nixes ‘Blacklisting’ Rule

The Trump regulation rollback parade rolled over a few more Obama-era rules on Monday, including the Fair Pay and Safe Workplaces rule.

(As colleague Mark McGraw noted in a previous post on the uncertain fate of the rule Obama signed in 2014, the regulation was put on hold by an October 2016 court order determining that it exceeded congressional limits.)

The rule had been aimed at forcing government contractors to disclose violations of federal labor laws as they sought more work, according to the Washington Post. The “blacklisting rule” required contractors to disclose violations of 14 federal labor laws, including those pertaining to workplace safety, wages and discrimination.

The White House argued the rule would “bog down” the federal procurement process, according to the Post report, while business groups said that it would increase compliance costs, adding that Republican lawmakers and the Trump administration have made curbing government regulation a top priority this year.

 

CNN reports the rollback was sponsored by Rep. Virginia Foxx, a North Carolina Republican who argued the rule had the potential to blacklist some government contractors. Foxx said that the rule allowed the Labor Department to deny business to contractors based on “alleged” violations.

“Under this rule, bureaucrats can determine employers are guilty until proven innocent and then deny them the ability to do business with the federal government,” Foxx said.
The White House said in a February statement that Trump intended to sign the bill.
“The administration strongly supports the actions taken by the House to begin to nullify unnecessary regulations imposed on America’s businesses,” read the statement of administration policy.

 

Dozens of resolutions pulling back various Obama-era rules have been introduced under an expedited process established through the Congressional Review Act, the Post notes. Under that process, a regulation is invalidated when a simple majority of both chambers pass a joint resolution of disapproval and the president signs it.

 

 

A Call for Digital Mindfulness

Is social media ruining our lives? I guess ComPsych would say so — gone unchecked, that is.

That’s why the Chicago-based employee-assistance-program-services provider is offering a new training course to its more than 33,000 organizations covering more than 89 million people worldwide focused on tackling the problem.

The course is designed to enhance people’s “digital mindfulness,” which suggests — in the words of Dr. Richard A. Chaifetz, founder, chairman and CEO of ComPsych — that “people examine priorities and set limits around time spent on social media so they can be more effective at work, and also find more satisfaction in life overall.”

In a survey of more than 1,200 respondents, ComPsych asked employees how many times, per day on average, they checked social media while at work. The telling result: Almost 20 percent said they check it more than 10 times during their workday. Specifically, their answers were:

  • “0 times per day” — 12 percent
  • “1-5 times per day” — 60 percent
  • “6-10 times per day” — 10 percent
  • “10-plus times per day” — 18 percent

This, according to Chaifetz, is no light-hearted or laughing matter. As he puts it:

“Social media can be a significant distraction both at work and during personal time. This leads to lack of focus and a constant changing of gears that can negatively impact performance, relationships and the ability to be fully present.”

Those taking the course, he says, will come out able to understand the impacts of consumer and digital overload, identify priorities and ways to simplify their lives, and recognize how becoming digitally mindful can lower stress and improve their well-being.

Granted, many of us need to be using social media as part of our jobs. Here at HRE, we’re tweeting, sharing stories and posting on LinkedIn, and checking our Facebook site or others’ for pertinent news.

But the message of the survey and course is a good one and shouldn’t be ignored: Keep it under control lest it control you. In the words of the course description:

“In today’s digital age, people are exposed to a vast number of choices about what to read, watch, listen to or purchase. The result is that people often are more distracted, confused and stressed by the increasing complexity of consumer choices and online social-media activities.”

Whether I do anything with its course or not, I’m glad ComPsych is raising this red flag.

Supreme Court Rules on NLRB

The  Supreme Court decided 6-2 today to uphold a lower court’s ruling that then-President Barack Obama exceeded his legal authority with his temporary appointment of a National Labor Relations Board general counsel in 2011, meaning former NLRB Acting General Counsel Lafe Solomon improperly held that position for nearly three years while his nomination to assume the General Counsel role fulltime was pending.

The Court specifically found that Solomon’s service as the Acting General Counsel while his nomination was being considered violated the Federal Vacancies Reform Act.

“This ruling effectively invalidates Solomon’s three-year tenure as the Acting General Counsel from 2010 to 2013,” writes David J. Pryzbylski, a partner at Barnes and Thornburg in a post on the National Law Review.

The lawsuit arose when Southwest Ambulance challenged an unfair labor practice complaint that had been filed against it by Solomon when he was Acting General Counsel, Pryzbyiski says. The Court’s conclusion that Solomon was not appropriately in that role means that the complaint against Southwest Ambulance was invalid.

So what does this ruling mean for employers? According to a statement on Fisher Phillps’ web site, the only sure thing is that Southwest, the employer in this case, is off the hook for the unfair labor practice charge.

The Court’s opinion, the firm says, is a modest victory for employers “who are protected from overreaching presidential appointments, such as the long-term, temporary NLRB General Counsel designee in this case who served without the advice and consent of the Senate.”

Paying CEOs to Fail

Scott MacDonald thinks the contract language and hiring processes for chief executive officers need to change. As he sees it, some CEOs are great leaders who deserve their seemingly extravagant salaries, but others are highly paid despite their poor performance. And even when they’re fired, they don’t lose out because they’re given a golden parachute — millions of dollars for failing, he says.

In some back-and-forth with me recently about this, MacDonald — former CEO at the Australian company Investa, who wrote a book about his experience there, Saving Investa: How An Ex-Factory Worker Helped Save One of Australia’s Iconic Companies (here’s his website’s information about the book and here’s the Amazon link) — said this to me:

“Every year, we read stories of corporate boards of directors firing a senior executive for unsatisfactory performance and then paying the executive millions of dollars upon his or her departure.

“Several years ago, for example, the Walt Disney Co. hired Michael Ovitz [as president] and then terminated him 14 months later. Ovitz reportedly received a severance package of $140 million. Recently, Wells Fargo admitted that thousands of their employees opened new accounts in customers’ names without consent to generate bigger fees and commissions. The scandal has damaged the bank and led to many investigations and potential fines. The person in charge of the retail division where the scandal occurred announced her retirement and reportedly received about $125 million upon her departure.”

MacDonald says the real problem stems from the narrow definition of “cause” in current CEO’s employment contracts; specifically, the clause that says the executive may be fired “for cause,” in which case nothing more is owed to him or her.

But the definition of cause is still limited to being found guilty of felony acts, committing fraud or stealing from the company. It almost never includes poor performance.

MacDonald’s had a successful career as a CEO turning around struggling companies, often by addressing performance issues. Through his years of experience, he says,

” … the benefits gained from changing personnel have always outweighed the short-term financial cost … . Once, I fired a talented chief financial officer because he was not a team player, typically promoting himself while disparaging other team members. The cost of his termination was significant because being a bad team member was not defined in his “for cause” contract definition, but the entire company performed much better after his departure.”

So how did “cause” become so narrowly defined and almost unenforceable? It’s unclear, MacDonald says, but he has a theory, based on the past 40 years of business as usual, and it even includes human resources. Here’s how he lays it out:

“Generally, a board retains an employment consultant to help negotiate the contract or provide an opinion that the contract is fair and competitive in the industry. The same consultant will often seek to see human resource-related consulting services to CEOs in the future. If a consultant recommends approval of a CEO’s favorable employment contract, the consultant is more likely to be favorably considered when that CEO approves hiring an HR consultant.

“After one board agrees to a narrow definition of ’cause,’ it quickly becomes cited by other executives and their attorneys as the standard. … When an executive is terminated for poor performance but not ‘for cause’ … he or she is typically entitled to all the compensation and benefits that he or she would have received if he or she had not been terminated. This usually includes salary not yet paid, bonuses not yet earned, stock options not yet vested and various other entitlements. If a terminated executive has three years left on a contract, the company often has to pay three years of full compensation as if the executive had been a stellar executive.”

So what can we do to turn this around? Simple. According to MacDonald, just broaden the definition of “cause.” Successive years underperforming [against] a pier group of companies should be cause for termination. And if a dispute occurs over the performance measures, submit it to an arbitration panel for resolution.

Other items we might consider cause for dismissal could include successive poor results on confidential employee surveys, failure to meet budget targets in successive years, failure to follow written directives from the board … his list goes on.

Companies that provide audit services to another company are generally not permitted to provide other consulting services to avoid influencing the impartiality of the audit. Similarly, says MacDonald, “companies that provide employment-contract services could be forbidden from providing other consulting services to the company involved.”

Finally, he says, when an employee is terminated without cause, he or she should not be paid full bonuses for all the remaining years of their contract. “Clearly,” he says, “the bonuses would not be earned.”

Downsizing the DOL

As many expected, the Department of Labor didn’t escape President Trump’s 62-page budget plan (released yesterday) unscathed. But the extent of the proposed cutbacks should certainly raise a few eyebrows.

On a percentage basis, the DOL tied the Agriculture Department for third place on the list of agencies being targeted for biggest cutbacks (with a 21-percent decrease), just behind the Environmental Protection Agency (31.4-percent decrease) and the State Department (28-percent decrease).

From a dollar standpoint, under the plan, the proposed DOL budget would be slashed by $2.5 billion—to $9.6 billion.

So how will the DOL find these savings?

The budget plan points to areas such as job-training grants, Bureau of International Labor Affairs’ grant funding, the closing of Job Corps centers, the elimination of less-critical technical-assistance grants from the Office of Disability Employment Policy, and Occupational Safety and Health Administration’s training grants. In many of the cases, the administration’s hope is to shift more of the burden onto the shoulders of the states.

But as Washington-based Seyfarth Shaw Senior Counsel Larry Lorber pointed out yesterday in a phone interview, the cited cuts (some with dollar figures attached to them, others without) won’t get the DOL close to its $2.5 billion goal.

“There’s a big gap between the cutbacks announced and $2.5 billion,” Lorber said. “So the big question is, where are you going to make up the difference?”

Lorber said it’s ultimately going to have to come from salaries and expenses. He specifically pointed to the Wage and Hour Division and OSHA as possible candidates, since salaries and expenses make up a substantial part of their overall budgets.

So what does this all mean for employers?

Well, for starters, Lorber said, staff and travel cutbacks at entities such as WHD and OSHA are inevitably going to translate into less enforcement. Many employers, he suggested, may very well welcome the fact that if travel is reduced, enforcement isn’t going to happen.

But, he added, some employers aren’t going to be pleased to see many of the training programs and grants go away, as is being proposed. (The plan specifically proposes the elimination of the Senior Community Service Employment Program, which transitions low-income unemployed seniors into unsubsidized jobs—calling the program “ineffective.”) Lorber said it’s not likely that states are going to pick up the slack here.

Things, of course, can certainly change between now and when a more detailed budget makes its way through Congress. But it’s probably safe to expect that R. Alexander Acosta — assuming he is confirmed as Secretary of Labor — is going to have a fairly downsized department to work with as performs his duties. (Acosta’s confirmation hearings are now scheduled to begin on March 22.)

Psychopaths in Silicon Valley

As we’ve written previously in HRE, psychopaths are more likely to be found in the C-suite than in the general population (according to research by psychologists Robert Hare and Paul Babiak, who found that while psychopaths make up 1 percent of the population at large, their numbers in the executive ranks could be as high as 4 percent). This week, a panel at the SXSW festival in Austin, Texas, examined the phenomenon of psychopathic CEOs in Silicon Valley — and why HR may be to blame for not holding them in check.

He’s charming and gregarious … but quite possibly a psychopath.

As reported in yesterday’s Guardian, a panel of psychologists, social scientists and venture capitalists discussed what they consider to be Silicon Valley’s high proportion of psychopathic CEOs. “Psychopath” doesn’t necessarily describe someone like Norman Bates — in fact, most are non-violent. However, their combination of remorselessness, callousness and lack of empathy — along with an uncanny ability to mask these traits with a veneer of charm and gregariousness — allows them to cause serious (non-physical) damage all the same, the experts said.

In fact, many of society’s most-successful people have traits that resemble psychopathy — including many successful presidents, said panelist Michael Woodworth, a forensic and clinical psychologist who’s studied psychopathic murderers in high-security prisons.

Psychopaths are often successful in start-up environments, said venture capitalist Bryan Stolle. “You have to have a tremendous amount of ego [and] self-deception to embark on a journey … you have to make sacrifices and give up things, including sometimes a marriage, family and friends. And you have to convince other people. So they are mostly very charismatic, charming and make you suspend the disbelief that something can’t be done.”

Psychopathic executives are classic manipulators of people, said social scientist Jeff Hancock. But when they don’t get their own way or things suddenly go wrong, their “mask of sanity falls off,” he said.

Often, HR tends to protect a psychopathic CEO, said Stolle, which only furthers the damage. “Because they are the founders and leaders, they tend to get protected by HR … this reinforces the behavior,” he said.

Company investors are also often at fault, because they’re willing to overlook bad behavior in order to protect their stake in the organization, said Stolle.

Having a psychopath in charge can hurt employee retention, said Hancock, citing FBI research which found that departments managed by psychopaths have lower productivity and morale (go figure!).

Hancock has developed software that’s designed to analyze written language for cues associated with psychopathy. Psychopaths tend to write in a way that’s “disfluent” and hard to understand, he said, and — because they’re more interested in themselves than others — tend to refer to other people a lot less than non-psychopaths.

Text-based communications are a good way to detect psychopaths, said Hancock. “Text-based communications improve your chances of not being manipulated, as they are verbally not very skilled. You can smoke them out in an online context.”

Headscarf Ban OK’d By Euro Court

With most of the East Coast layered under a thick coat of snow and sleet today, we bring you news from across the pond: the BBC is reporting Europe’s high court has ruled that bans on wearing religious headscarves in the workplace are not necessarily a form of discrimination.

According to the report, workplace bans on the wearing of “any political, philosophical or religious sign” such as the Muslim practice of hijab need not constitute direct discrimination, European Court of Justice has ruled.

But the ban must be based on internal company rules requiring all employees to “dress neutrally” and cannot be based on the wishes of a customer, the court ruled.

This is the court’s first ruling on the wearing of headscarves at work, and it was prompted by the case of a receptionist fired for wearing a headscarf to work at a Belgium-based security firm.

Rights group Amnesty International said Tuesday’s ECJ rulings were “disappointing” and “opened a backdoor to . . . prejudice.”

Meanwhile, the Conference of Rabbis expressed worry about the ruling: “With the rise of racially motivated incidents and today’s decision, Europe is sending a clear message; its faith communities are no longer welcome.”

While the court’s ruling likely comes as a blow to religious freedom advocates as well as working Muslim women in Europe, it is unlikely to alter any American policy, which largely aligns with the ECJ ruling regarding “neutral” rules in the workplace.

This fact sheet from the American Civil Liberties Union, meanwhile, highlights some of the challenges hijab-practicing Muslim women face in the modern American workplace.

Sad State of Parental Leave

Tuned into a pretty interesting, if not depressing, Facebook Live session on Wednesday. Seems the at-least-slow progress in paid parental leave we’ve been writing about here on HRE Daily and on our HREOnline website isn’t as promising as some think.

At least that’s according to the Society for Human Resource Management, which released during the session its National Study of Employers — a self-described “comprehensive look at employer practices, policies, programs and benefits that address the personal and family needs of employees.” (Here’s the press release for those of you who don’t have the time for an entire study right now.)

Ellen Galinsky, president and co-founder of the Families and Work Institute, talked during the session about the study’s key findings — namely that, despite reports from well-known companies (such as Netflix, Amazon, Microsoft, Johnson & Johnson and Ernst & Young — see our own posts linked above) announcing their expansions of paid-parental-leave benefits, the average amount of caregiving and parental leave provided by U.S. employers has not changed significantly since 2012.

Specifically, over the past 11 years, the number of organizations offering at least some replacement pay for women on maternity leave has increased from 46 percent to 58 percent. But the study also found that, among employers offering any replacement pay, the percentage offering full pay has continued to decline, from 17 percent in 2005 to 10 percent in 2016.

In fact, of all employers with 50 or more employees, only 6 percent offer full pay. In addition, daily flexibility, the kind needed for emergencies, has gone down actually, from 87 percent in 2012 to 81 percent in 2016, a statistic Galinsky called “critical.” She added:

“The fact that that kind of flexibility has gone down is a critical [and alarming] finding.”

According to Galinsky, HR has a major role in turning this around. As she put it during the session:

“Flexibility is now the norm. HR should be thinking this way. It used to be, ‘Should or shouldn’t we provide flexibility?’ Now it’s a given that we should.”

Unfortunately, she said, HR needs to do a better job of telling workers what is offered at their organizations. The study found only 23 percent of companies making a real effort to communicate the programs they have.

Here are some other key findings:

  • Small employers (50 to 99 employees) were more likely than large employers (1,000 or more employees) to offer all or most employees 1) traditional flextime, the ability to periodically change start and stop times (36 percent versus 17 percent), 2) control over when to take breaks (63 percent versus 47 percent) and 3) time off during the workday to attend to important family or personal needs without loss of pay (51 percent versus 33 percent).

  • Growth of workplace flexibility has been stable over the past four years. Out of 18 forms of flexibility studied, there were only four changes:

  1. An increase in employers that offer telework, allowing employees to work at least some of their paid hours at home on a regular basis (40 percent in 2016 versus 33 percent in 2012).
  2. An increase in employers that allow employees to return to work gradually after childbirth or adoption (81 percent in 2016 versus 73 percent in 2012).
  3. An increase in organizations that allow employees to receive special consideration after a career break for personal/family responsibilities (28 percent in 2016 versus 21 percent in 2012).
  4. A decrease in organizations that allow employees to take time off during the workday to attend to important family or personal needs without loss of pay (81 percent in 2016 versus 87 percent in 2012).

In Galinsky’s words:

“Whether high-profile companies offering paid [parental] leave are out of step with the majority of employers or leading the way remains to be seen. Given our findings that 78 percent of employers reported difficulty in recruiting employees for highly skilled jobs and 38 percent reported difficulty in recruiting for entry-level, hourly jobs, these high-profile companies could be leading the way in the strategic use of leave benefits.”

And, apparently, that’s not happening. Not yet anyway.

Is Signet’s Response Enough?

On Tuesday, my colleague posted a piece on the gender-discrimination suit against Signet Jewelers Limited and some of the coverage it’s garnered.

As most of you are aware, The Washington Post reported on Feb. 27 that, according to arbitration documents obtained by the paper, hundreds of former employees of Sterling Jewelers, parent of Jared, the Galleria of Jewelry and Kay Jewelers, claimed “that its chief executive and other company leaders presided over a corporate culture that fostered rampant sexual harassment and discrimination.”

The story said …

“Declarations from roughly 250 women and men who worked at Sterling, filed as part of a private class-action arbitration case, allege that female employees at the company throughout the late 1990s and 2000s were routinely groped, demeaned and urged to sexually cater to their bosses to stay employed. Sterling disputes the allegations.”

Well, yesterday, Signet announced it would be taking additional steps “in the spirit of continuous review and improvement of its policies and practices.”

Signet Chairman Todd Stitzer pointed out in a press release that the retailer “outperforms national averages in the percentage of its store management staff who are female.” But in its quest to be “an employer of choice, we are taking a number of additional steps to ensure our policies and practices are functioning as intended and to identify areas where we can further improve.”

These steps includes the formation of a new board committee focused on “respect in the workforce”—and programs and policies aimed at supporting the advancement and development of the company’s female team members, the release states. The new committee, it states, will appoint an independent consultant to conduct a thorough review that will cover “current and future company policies and practices regarding equal opportunity and workplace expectations, including those covering non-harassment, training and reporting, investigation and non-retaliation.”

The committee will also establish an independent Ombudsperson office to provide confidential advice and assistance to employees who express workplace concerns.

Of course, these steps by the company are all well and good. But are they also simply one more example of a “too little, too late” response. Thomas B. Lewis, an attorney with Stevens & Lee in Princeton, N.J., thinks so.

“The company is talking about its training, its policies, its procedures–and that’s all great. But the real question should be, Did the company take action and enforce its own rules and policies to make sure this behavior is not rampant in the various stores?”

Lewis puts Signet’s problems in two buckets. First, there is the legal aspect, he says. At some point, according to him, that’s going to be resolved. The other—and perhaps bigger issue—is the public-relations problem, he says. Because of all of the negative press, Signet’s sales could take a hit, Lewis says, noting that “you could have a lot of people boycotting the stores and shopping somewhere else because of these allegations.”

In outlining the steps it’s planning to take, he adds, Signet is effectively responding to what the U.S. Equal Employment Opporunity Commission will most likely require them to do.

“It’s a smart thing to do, but they’re really doing it from a public-relations point of view,” he says. “They want to get the message [out] that they’re taking these allegations seriously.”