Category Archives: legal issues

Message to GE Capital Bidders: Hands Off!

It’s no secret General Electric is in the process of getting out of banking.

ThinkstockPhotos-180797634As the Washington Post reported on April 10, General Electric announced that day “it will sell most of its GE Capital assets over the next two years, shedding businesses in a sector where it has had a tough time generating acceptable returns.”

Investors immediately applauded the move, as well as GE’s announcement of a share buyback, by bidding up GE shares to their highest level in roughly two years. (They’ve since retreated slightly.)

It’s anyone’s guess, of course, who ultimately will acquire these businesses, but, apparently, according a story featured in today’s print edition of the Wall Street Journal (and posted online yesterday; subscription required), GE officials aren’t taking any chances as far as losing key talent in advance of any deal.

“General Electric Co. may be getting out of finance but, until then, it is trying to keep its bankers,” the WSJ piece leads off.

According to the report, GE has offered retention bonuses to select executives, as most companies commonly do, but is also requiring bidders interested in purchasing its $16 billion leveraged-finance operation to agree not to hire GE’s employees for 12 months.

The story continues …

“GE is in the difficult position of trying to keep people in the finance businesses it has said could take as long as two years to sell. Losing its top deal makers would erode the value of the operations that once contributed half of GE’s annual profits, and could result in lower offers. Unlike GE’s industrial businesses that sell sophisticated machinery like jet engines, locomotives and gas power turbines, much of the strength of the finance operation rests on its bankers.

Those terms, considered restrictive for a deal of this type, have caused some suitors to balk, according to people familiar with the matter.”  [The Journal article quotes one source saying bids for GE Capital’s private-equity arm, known as Antares, were due Thursday.]

The WSJ article goes on to note that the “restriction that GE asked prospective buyers of the Antares unit to sign is unusual because it is a ‘nonhire agreement,’ meaning bidders would be prevented from hiring a GE employee, even if they didn’t initiate the approach. That prohibition applies to any ‘officer or key employee’ of the leveraged finance business.”

A GE spokeswoman told the Journal that the terms are appropriate and that the company continues to have a large pool of potential suitors. But experts point out that a formalized agreement like this is somewhat unorthodox.

“While this is not an uncommon practice, especially in private-equity deals and bidding, it is more typically in the form of a gentleman’s agreement and rarely pursued for enforcement,” Jason Hanold, CEO of Hanold Associates, a Chicago-based search firm, told me yesterday. “It is questionable whether the courts would enforce this, and it’s reasonable for employees to consider a departure from a company that is offering itself up for bid.”

Hanold suggested that GE needs to be cautious of the negative impact on engagement for their existing employees, including those who have no intention of considering another employer. “Employment at will means something and implies departure at will. A company that sends the message about employee growth and development is bringing more specificity to that message with this stand: ‘We care about your growth, development, future financial success and hope you thrive … as long as it is within the confines of our organization [and] unless we sell the business in which you are employed.’ ”

That creates an emotional detachment that’s difficult to heal, he added.

Guess we’ll have to wait and see if GE suffers any repercussions. But in the meantime, on an entirely unrelated and non-HR topic, to each and every mother out there reading this, a heartfelt Happy Mother’s Day! (My apologies for not coming up with a better segue.)

 

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Mixed Interpretations of Mach Mining Decision

Reactions to last week’s U.S. Supreme Court ruling in Mach Mining v. EEOC are plentiful, and mixed. The decision essentially came down 78805354 -- Supreme Court for left sidein favor of employers and against the U.S. Equal Employment Opportunity Commission, but just who the real winner is — and by how much — is subject to interpretation.

In the case, Mach Mining was accused by the EEOC of discriminating against women who applied for jobs at its Johnson City, Ill., coal mine. The EEOC filed suit in 2008 after an unsuccessful job applicant complained to the agency that the company never hired a female miner.

In response, Mach argued for an intensive federal-court review of conciliation efforts the EEOC should have engaged in, but Mach argued were not carried out — as required under Title VII of the Civil Rights Act — prior to the company being sued.

“In language that is sure to be repeated back to the EEOC for years to come, the Supreme Court held that ‘[a]bsent such review, the commission’s compliance with the law would rest in the commission’s hands alone,’ ” say Seyfarth Shaw attorneys Gerald L. Maatman Jr., Christopher Cascino and Matthew Gagnon in this blog post. “This, the Supreme Court said, would be contrary to ‘the court’s strong presumption in favor of judicial review of administrative action.’ ” They go on:

“While the Supreme Court did not rule that the intensive review that Mach Mining argued for was required, the case nevertheless represents a significant win for employers and resounding defeat for the EEOC. The EEOC will no longer be able to file suit against employers after paying mere lip-service to its conciliation efforts, and to give them the back of the hand in response to requests for fulsome information about liability and exposure in a threatened lawsuit. And employers will, as a result, be in a better position to settle meritorious claims  on reasonable terms before the EEOC files suit, thus saving employers from unnecessary litigation expense.”

But not so fast. According to points raised by Jon Nadler, a Philadelphia-based employment attorney with Eckert Seamans Cherin & Mellott, the ruling is actually a win for the EEOC, despite the prevailing commentary and headlines. Though the court ruled the EEOC’s conciliation efforts are subject to some judicial review, “that review is extremely limited (‘relatively barebones,’ in the court’s words,” his notification says.

On the contrary, it goes on, the “EEOC will merely need to show it provided the employer with notice of the allegations — the specific alleged unlawful practices, and identification of those allegedly harmed — and to engage in some bilateral communication with the employer in an attempt to resolve the matter.”

Nevertheless, Nadler points out, though employers have complained in some instances that the EEOC “failed even to provide this basic information, now [it’s] clearly required.”

Further, in points raised by Don Lewis, shareholder with Nilan Johnson Lewis, the Supreme Court also chose not to adopt a “good faith” standard of review previously adopted by the Fourth, Sixth and Tenth Circuits. “Employers,” his notice reads, “will be pleased that the high court has recognized that the EEOC’s obligation to conciliate is enforceable in court, and that its obligation includes a requirement to disclose and discuss the essential elements of its claims and identify the parties for which it seeks relief.”

Meanwhile, in this posting, the EEOC calls the decision a “step forward for victims of discrimination” in its rejection of the “intrusive review proposed by the company and its supporters.”

The agency goes on to say that the “court recognized … the scope of review is narrow and a sworn affidavit is generally sufficient to meet the statutory requirements. If the employer has concrete evidence that such efforts were not made and the court finds in favor of the employer,” it says, “the remedy is [simply] further conciliation.”

This story on the Inside Counsel site, written in January after oral arguments were presented in the case, offers great background on the history, arguments and questions surrounding all this.

So what does it mean? Obviously, it depends on who you talk to … on whose glass is half full or otherwise. Yes, the scope of judicial review articulated in the decision “is a narrow one,” Maatman and company write, but bottom line, the court “vigorously upheld the fundamental principle that judicial review of administrative action [however slight] is [still] the norm in our legal system.”

Further, they state, “the EEOC now has to present its position in a federal court, and its litigation strategies are apt to be very different when it must justify and show the basis for its conciliation positions before a neutral fact-finder.” In their words,

“Suffice it to say, employers’ defense of ‘failure-to-conciliate’ is still alive and well, and the EEOC’s litigation strategies are now likely to be in need of rebooting.”

Or not …

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Confidentiality Agreement Crackdown, Revisited

If there was any question whether the Securities and Exchange Commission was serious in its efforts to clamp down on confidentiality statements, Office of the Whistleblower Chief Sean McKessy put it to rest during a recent American Bar Association webinar titled “New Developments in Whistleblower Claims and the SEC,” which took place on Wednesday.ThinkstockPhotos-155172325

Some of you may recall the story we published earlier this month titled “Cracking Down on Confidentiality Agreements,” in which I reported on the SEC’s first “enforcement action” against a company it said had used restrictive language in its confidentiality agreements.

More precisely, the SEC charged the Houston-based engineering firm KBR Inc. of violating whistleblower protection Rule 21F-17 by requiring witnesses in certain internal-investigation interviews to sign confidentiality statements saying violators could face discipline, including termination, if they discussed the matters with outside parties without KBR’s approval.

Most of the experts I spoke to for that story predicted that the SEC wasn’t likely to stop with KBR in pursuing such violations—and  McKessy’s remarks on Wednesday seemed to back up those claims.

On Thursday, Seyfarth Shaw attorney Ada W. Dolph, who was one of the sources for my original story, provided some commentary on McKessy’s remarks, writing in a memo that McKessy pointed out in the ABA webinar that the SEC rule is “very broad,” and “intentionally so.”

Dolph, based in her firm’s Chicago office, continued …

“McKessy stated that this initiative remains a ‘priority’ for him and his office. ‘To the extent that we have come across this language [restricting whistleblowers] in a Code of Conduct’ or other agreements, the SEC has taken the position that it ‘falls within our jurisdiction and we have the ability to enforce it.’ He noted that ‘KBR is a concrete case to demonstrate what I have been saying,’ referencing public remarks he has made in the past regarding SEC scrutiny of employment agreements. He stated that the agency is continuing to take affirmative steps to identify agreements that violate the Rule, including soliciting individuals to provide agreements for the SEC to review. Additionally, he reported that the SEC is reviewing executive severance agreements filed with Forms 8-K for any potential violations of the Rule.”

Dolph pointed out that McKessy also addressed the question of whether the SEC would apply the KBR order to private companies under the U.S. Supreme Court’s 2014 ruling in Lawson v. FMR LLC, 134 S.Ct. 1158 (2014)—which expanded Sarbanes-Oxley’s whistleblower protections to employees of private companies who contract with public companies. McKessy, she reported, “stated that the SEC has not officially taken a position on this issue, but in his personal opinion he ‘certainly can see a logical thread behind the logic of the Lawson decision’ to be ‘expanded into this space [private companies],’ and that ‘anyone who has read the Lawson decision can extrapolate from it the broader application.’ ”

In short, Dolph concluded, “it is clear that we can expect further SEC enforcement actions in this area.”

Granted, that’s pretty much been the expectation all along. But McKessy’s remarks should, at the very least, be considered a not-so-friendly reminder that you might not want to wait too long before reviewing your confidentiality agreements and policies in order to ensure they aren’t worded in a way that would catch the attention of SEC officials.

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Increased Skepticism Around EEOC Claims?

lawsuitAccording to at least one attorney, a recent Sixth Circuit appeals court ruling in a disability discrimination case underscores the federal courts’ increasingly cynical view of EEOC claims.

An overview of what led to the April 10 decision in EEOC v. Ford Motor Co.:

Jane Harris, a now-former Ford employee with irritable bowel syndrome, sought a job schedule of her choosing, which would allow her to work from home as needed, up to four days a week. Ford denied her request, determining that “regular and predictable on-site attendance” was essential to Harris’s “highly interactive” job as a resale buyer with the company.

Early in her career with Ford, Harris—who joined the automaker in 2003—earned awards and accolades for what court documents describe as her “strong commodity of knowledge” and “diligent work effort.” Her performance soon deteriorated, however, and by her fifth full year with the company, Harris ranked in the bottom 10 percent of her peer group within Ford. By 2009, her last year with the organization, she “was not performing the basic functions of her position,” according to court records.

In addition, Harris missed an average of 1.5 work days per week in 2008, and frequently arrived at work late and left early, court records indicate.

Harris’ irritable bowel syndrome naturally exacerbated the situation, with her symptoms contributing to greater stress. In turn, the added stress worsened her symptoms and made it more likely for her to miss work.

Court records suggest that Ford “tried to help” Harris, adjusting her work schedule and allowing her to work from home on an ad hoc basis, for instance. But, despite these measures being taken, Harris was still “unable to establish regular and consistent work hours” and failed “to perform the core objectives of the job.”

After Ford attempted to offer alternative accommodations—some of which Harris rejected—she was terminated in September 2009, as a result of what the company called “several years of subpar performance and high absences.”

In August 2011, the EEOC sued Ford under the Americans with Disabilities Act. While the Sixth Circuit ruled against Ford in an April 2014 decision, an appellate panel voted to rehear that ruling. The court ultimately reversed that decision, noting that an employee with a disability is not qualified for a position if he or she cannot perform the necessary functions of the role with or without reasonable accommodation. The court noted that telecommuting may be a reasonable accommodation per the ADA, except in a scenario in which regular attendance is essential to performing the job’s critical functions.

The EEOC “has been pursuing telecommuting claims on a regular basis,” says Mark Girouard, a Minneapolis-based labor and employment attorney with Nilan Johnson Lewis.

This decision, however, figures to make establishing these claims more difficult for the organization, says Girouard.

“Obviously, each position must be analyzed individually, but the Sixth Circuit’s description of the job at issue in this case could be applied to many other positions.”

In other words, there are many jobs where availability to participate in face-to-face interactions should necessitate regular and predictable performance, he says, adding that “the en banc decision makes clear that courts should defer to employers’ business judgment on that issue.”

Last week’s decision “adds to the list of recent major losses for the EEOC,” says Girouard. “Separate and apart from the substance of the decision, the fact that the EEOC lost another major lawsuit highlights the increasing skepticism applied to the EEOC by the federal courts.”

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Get Set for the NLRB’s ‘Quickie-Election’ Rule!

If you thought April 15 was a date to keep you awake at night, the day before — April 14; that’s tomorrow, folks! — could be worse. 116040122 -- labor unionTomorrow is the day the National Labor Relations Board’s “ambush-election rules,” aka “quickie-election rules,” governing how union representation is voted on by employees, takes effect.

Late last month, I was made aware of this post at LaborUnionReport.com, pointing out (in pretty cryptic terms) that “as President Obama’s union attorneys controlling the National Labor Relations Board push through their so-called ‘ambush-election rules’ … the NLRB is conducting ‘practitioner’ training at NLRB offices and other locations (including a union office) across the country.”

The post says little else, but does include the PowerPoint presentation being used for the practitioners’ education. I found it somewhat interesting. You might too.

Meanwhile, NLRB General Counsel Richard F. Griffin Jr. did release early last week a guidance memo on modifications to organized-labor-representation procedures effective April 14 — specifically, how new cases will be processed from petition filing through certification. In his words,

“I am confident that the guidance provided herein will allow regions to implement the final rule effectively and efficiently.”

What effect these new rules will have remains to be seen, though Joel Barras, employment attorney at Reed Smith, says he’s pretty  confident they’ll “dramatically limit the time employers have to run pro-company campaigns.” As he puts it:

“I believe unions will now wait to file their union representation petitions until the new rules take effect. If I am right, and we see a high number of petitions filed in mid to late April, that would serve as an excellent indication that unions agree with employers that the new rules will dramatically improve the likelihood that employees will vote to join unions.”

In a webinar Friday by several Littler attorneys, addressing what more than one called this “new reality,” Tanja Thompson, Memphis, Tenn.-based office managing shareholder for Littler, confirmed that her office has seen a recent “slowdown” in the number of union petitions filed, indicating many are, indeed, probably waiting to file under the new rules, as Barras predicts.

“Make no mistake; this rule change is designed to see increases in union win rates,” she said. ” … We do anticipate accelerated activity starting April 14.”

She and the others shared cautionary tips for making sure nothing is missed in the new system, such as adhering to deadlines for supplying lists of personal contact and job information of all likely and eligible union members … and remembering that union notices will now be coming via email, not fax, and “unions don’t always get it right in who they email, yet that’s who’s being served,” said Thompson.

They also laid out all kinds of strategies for being proactive and not waiting to take action until a petition is filed under the new system, which is expected to change the current six-week election process to something closer to two-to-three weeks.

Action plans should include putting your employer statement out now on unions and how you view them, ensure supervisors and managers are comfortable talking with employees about that view, and ensuring all workers understand the value of their wages and benefits.

“My fear for employers,” said Jeff Harrison, a Minneapolis-based Littler shareholder, “is they’ll be busy meeting the many requirements [of responding to a petition] at the expense of focusing on their [anti-union] campaign communication strategies.”

For a further frame of reference on what’s coming, here is our most recent post by Michael J. O’Brien on the “current ‘quickie’ kerfuffle,” as he calls it — namely, the vote on March 19 by the U.S. House of Representatives, passing a GOP-led resolution to overturn the rule. With Obama almost certain to veto it, the vote appears to have created hardly a wrinkle in the NLRB’s preparations, as I indicated above.

Here, too, is some good discussion of the GOP’s effect on the NLRB that Tom Starner raised in a January news analysis. Specifically, he writes, “while the NLRB has characterized its actions as ‘modernizing its processes,’ legal experts representing employers say the real impact will deny employers an adequate chance to stage an anti-union campaign prior to employee voting.”

So … “gather your bragging points now,” as Harrison said in the webinar. “Conduct vulnerability assessments,” with special focus on employees being treated fairly, with dignity and respect, and with robust employee-appreciation programs … those catch phrases “you often find in union petitions,” he said.

Bottom line, look closely at your people issues, said Harrison. “Are your people treating your people right?” Because it’s those types of complaints — treatment ones — that “are almost always behind” employees being driven to unionize.

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Krawcheck Calls for Greater Diversity

Sallie Krawcheck

Sallie Krawcheck

The second day of SHRM’s Employment Law & Legislative Conference featured a morning talk by Sallie Krawcheck, a former high-profile Wall Street executive who’s now the chair of Ellevate, a New York-based mentoring network for women (formerly known as 85 Broads).

In describing her experiences as one of the few female leaders in an industry that continues to be dominated by white males, Krawcheck paid tribute to HR. “The first young man I had to fire threatened to kill me,” she said. “He said he would hunt me down in a dark alley. The second young man I had to fire insisted that I was doing so because I was actually in love with him. He suggested that I put him up in a love nest. So, I have a great deal of respect for what you in HR have to deal with.”

She also offered her own take on what led to the financial meltdown of 2008: “I don’t think it was greed so much as groupthink,” she said. “And what breaks groupthink? Diversity of thought.”

Krawcheck called on HR to “keep us honest, give us training on this, encourage us to have those courageous conversations where we say, ‘Dave, you interrupted Susie five times during her presentation, but you didn’t interrupt Bill once during his.’ ”

Companies today suffer from a surplus of mentoring opportunities for women but a deficit of sponsoring programs, she said, in which executives actively advocate for women in their careers. “Some companies are actually replacing their mentoring programs with sponsoring programs.”

Companies can demonstrate their commitment to diversity by making it a key developmental milestone, said Krawcheck. “Here’s a thought: Give responsibility for diversity to a high-potential white guy.”

Later on that day, a breakout session featured two board members from the National Labor Relations Board, who sought to explain the Board’s reasoning on controversial matters such as so-called “ambush elections” rule regarding union-certification elections.

“I’m told the best part of the new rule starts on page 500, where [Harry] Johnson and I write our dissent,” said Philip Miscimarra, who is — along with Johnson — one of the two Republican appointees to the five-member Board.

He and Johnson disagreed with the new elections rule on a number of different issues, particularly its dramatic compression of the time allowed between when a union files a certification petition and the election. “The [National Labor Relations Act] is silent with respect to timing,” said Miscimarra. “How fast is too fast, or how slow is too slow — it is silent on those issues.” He noted that both houses of Congress have passed a “resolution of disapproval” of the new rule — a resolution that could potentially nullify the rule should a Republican win the next presidential election and sign the resolution into law.

One of the most contentious issues the Board continues to wrestle with, said Miscimarra, is the extent to which companies have the right to restrict concerted activities by employees that could be considered as “disrespectful, discourteous or insubordinate.”

“Employers have been surprised to learn that rules they have in place for a good reason — rules that require employees to show courtesy and respect — are unlawful under our statute,” he said.  “I do hope the Board can do a better job of devising a standard in this area that people will find helpful.”

 

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SHRM Legal Conference Gets Under Way

You’ve probably heard of the best-selling book What To Expect When You’re Expecting. Well, what about what to expect when your employees are expecting? This was, in fact, the title of a session during the first day of SHRM’s 2015 Employment Law & Legislative Conference this Monday, where employment attorney Courtney Perez reminded a packed room that the Equal Employment Opportunity Commission has made targeting pregnancy discrimination one of its top enforcement priorities.

“This topic is personal for me,” said Perez, a working mom of two and the expectant mother of a third. As a senior associate at Dallas-based Carter Scholer Arnett Hamada & Mockler, she advises clients regularly on how to avoid discriminating against employees and ending up on the wrong end of a lawsuit.

Mothers make up a huge chunk of the workforce: 57 percent of women with children 1 years old or younger hold down jobs outside the home, according to the Bureau of Labor Statistics, while 62 percent of women who give birth are in the workforce at the time and 40 percent of U.S. households with children younger than 18 have mothers who are the sole or primary breadwinners, she said.

As the number of women in the workforce has grown, so too has the rate of pregnancy discrimination: The number of pregnancy discrimination charges filed with the EEOC went up by 35 percent between 1997 and 2008, said Perez. One of the biggest areas of contention revolves around the topic of light duty for pregnant workers: The Supreme Court is expected to announce its ruling soon in Young vs. UPS, in which delivery driver Peggy Young filed suit against the package delivery company after it required her to go on unpaid maternity leave instead of providing her with light duty during her pregnancy. UPS said Young didn’t qualify for a program in which temporarily disabled employees were given light duty until they could resume their regular jobs.

Should the Supreme Court rule in favor of Young, “it may expand the definition of the Pregnancy Discrimination Act,” the 1978 law passed by Congress in response to an earlier Supreme Court ruling that employers who discriminated against pregnant employees were not guilty of sex discrimination, said Perez.

Although pregnancy itself is not considered a disability under the law, the EEOC’s guidelines recommend that employers treat pregnant employees whose condition limits their job abilities the same as other temporarily disabled employees, said Perez.

She recommended a set of best practices for HR to follow, chiefly that HR ensure that a company’s policies and practices related to hiring, promotion and pay do not disadvantage pregnant employees or those who plan to take or have taken maternity leave. And beware the “mommy track,” she said, referring to the practice of steering pregnant employees into less-prestigious, lower-paying jobs.

“That’s the stuff of which discrimination lawsuits are made,” said Perez.

State governments aren’t waiting on the Supreme Court or Congress to give increased protections to pregnant workers, said Jonathan Segal, a partner at Duane Morris in Philadelphia. At least nine states have passed laws that go further than the federal PDA in requiring companies to accommodate pregnant employees, he said, part of a trend in which states are taking a more activist role in workplace matters.

“There may be gridlock at the federal level, but at the state level we’re seeing a lot of action,” said Segal during the session “All Politics is Local: State Law Trends.”

Thirteen states so far (and at least 90 municipalities) have passed so-called “ban the box” laws that prohibit employers from asking job candidates on their initial application whether they’ve ever been convicted of something. Four states have passed laws specifically protecting interns from discrimination and harassment. Twenty one states have passed laws banning discrimination on the basis of sexual orientation, and 19 of those states also have laws banning gender-identity discrimination.

“With the 2016 election, you can expect to see more ballot initiatives pertaining to paid sick leave, raising the minimum wage, gender identity — more Democratic voters tend to participate in presidential elections than mid-term ones, and these issues resonate with them,” said Segal.

Conservative state lawmakers have also been active: Twenty-two states have passed laws protecting the right of employees to store guns in their cars while they’re at work. A new law proposed in Pennsylvania would even allow employees to store guns on the outside of their vehicles, said Segal. Meanwhile, the number of “right to work” states is at an all-time high of 26, having recently been joined by Wisconsin and Michigan.

All of this poses a special burden for multi-state employers, said Segal, who must comply with a patchwork of regulations across the country.

In some cases, he said, the best approach is to keep it simple. With respect to ban-the-box, it might make sense to simply remove the question from all job application forms, rather than having differing forms for different jurisdictions.

“Does it really make sense to have multiple forms for different states?” asked Segal. “This is an area where we’re certainly going to see more states adopt this rule. It’s one thing that actually attracts support from both Republicans and Democrats.”

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Marijuana Acceptance Marches On

It’s still highly unlikely that any employer will ever have to allow an employee to work while he or she is stoned, whether there’s a safety 146967521 - smoking dopeor security risk or not, but the chips seem to keep falling away from those sturdy walls that made marijuana unacceptable, illegal and disallowed for years.

The latest indication that pot is going mainstream comes in this Illinois Appellate Court ruling (found on the Canna Law Blog site) affirming a Circuit Court’s ruling that just because a worker was fired for violating his employer’s drug-and-alcohol-free workplace policy doesn’t mean he can’t collect unemployment benefits.

Seems this maintenance worker for the Jefferson County Housing Authority fessed up to his employer — just before a random mandatory drug screening — that he might not pass because he had smoked pot several weeks earlier while on vacation. He was fired, even though his tests results were negative, and was turned down for unemployment benefits because of the nature of his termination.

The Housing Authority’s policy prohibits employees from being under the influence of any controlled substance “while in the course of employment.” Both the Circuit Court and Appellate Court agreed “course of employment” was interpreted too broadly by the Illinois Department of Employment Security to include off-duty hours.

“Among the reasons the Circuit Court found the agency’s interpretation unreasonable,” the blog states, “was the fact that marijuana is now legal in some states and the fact that it unreasonably restricted off-duty time while serving no legitimate public purpose.”

Yes, indeed, marijuana is absolutely now legal in some states, as this news analysis and this blog post by me indicate. But it’s more than going legal, as I also indicate. It’s becoming big business. Make that a huge industry.

Just this month, news releases came across my screen announcing a Cannabis Career Institute opening in San Diego as well as three others in Florida, Illinois and Nevada, all designed, as the releases state, to teach “ganjapreneurs how to succeed in the marijuana industry as the green rush continues.”

Attorneys and experts I’ve talked to assure me employers will always have the legal right — and responsibility — to keep their workplaces safe and drug-free. I just wonder how all this nudging from the “cannabusiness” community and the courts is going to impact how those employers sleep at night.

 

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2014’s Top 10 Posts

Here at The Leader Board, it was another interesting year covering the HR arena, with issues ranging from the controversy surrounding the HR certification, to lawsuits based on a worker’s commute, to HR leaders’ efforts to ensure their organizations’ compliance with the Affordable Care Act and various other legal requirements, just to name a few.

Below are links to the top 10 most-read posts of 2014, according to Google Analytics.

When viewed together, the posts create an accurate mosaic of the issues HR leaders are faced this year and are likely to continue dealing with into the new year.

Enjoy!

  1. SHRM Rolls Out New Certification (May 13)
  2. HR Plaintiffs Build Their Case Against Lowe’s (Jan. 24)
  3. Google Tackles Incentives and Rewards (April 29)
  4. More Restrictions on Criminal-Background Checks (Feb. 10)
  5. Employers Missing ADA Coverage in FMLA Cases (June 30)
  6. Friedman Shakes It Up at SHRM (June 23)
  7. ‘The 27 Challenges Managers Face’ (July 28)
  8. Who’s Leading the Way? (Nov. 13)
  9. Woman Sues Ex-Employer Over Commute (July 2)
  10. Giving HR the Boot (April 9)
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NLRB: Targeting McDonald’s as ‘Joint Employer’

I suspect most of you have been following, to some extent, the fast-food worker protests of the past couple of years. As recently as Dec. 4, fast-food workers from around the country demonstrated in front of their restaurants, continuing their fight for a $15-an-hour wage. 486860229

Well, the latest update in the story came on Friday, when the National Labor Relations Board issued complaints against McDonald’s franchisees and their franchisor, McDonald’s USA, as joint employers, alleging that they violated the rights of employees participating in the protests by making threats and retaliating against them.

Kendall Fells, organizing director of the Fight for 15, a group formed to advance the cause of a $15 living wage, told the Chicago Tribune (registration required) that “McDonald’s exerts such extensive control over its franchised business operations that, for all intents and purposes, McDonald’s is the boss. It’s obvious that the company should share responsibility with franchisees for the treatment of its workers.”

The NLRB’s General Counsel, Richard Griffin, issued 78 charges against McDonald’s and its franchisees. In response to the NLRB announcement, McDonald’s issued the following statement

“McDonald’s is disappointed with the Board’s decision to overreach and move forward with these charges, and will contest the joint employer allegation as well as the unfair labor practice charges in the proper forums. These allegations are driven in large part by a two-year, union-financed campaign that has targeted the McDonald’s brand and impacted McDonald’s restaurants. McDonald’s has taken the appropriate measures, working properly with its independent franchisees, to defend itself against that attack on its business. McDonald’s serves its 2,500 independent franchisees’ interests by protecting and promoting the McDonald’s brand and by providing access to resources related to food quality, customer service and restaurant management, among other things. These optional resources help entrepreneurs operate successful businesses. This relationship does not establish a joint-employer relationship under the law—and decades of case law support that principle.”

On Friday afternoon, I asked Marshall Babson — counsel in the New York and Washington offices of Seyfarth Shaw, who served as a member of the NLRB from 1985 to 1989 — for his take on the board’s move. “I can’t imagine what evidence the general counsel at NLRB has to justify the issuance of the complaints, but for more than 50 years, the general view has been that you can’t be a joint employer unless you’re an employer,” he said.

“My understanding is that if you’re McDonald’s and most [other] franchisors, you don’t become engaged in the hiring and firing of these employees,” he went on. “You don’t set their wages, benefits, and terms and conditions of employment on a day-to-day basis. You don’t say that [someone] should be terminated for this or that. … So [the NLRB complaints] represent an extraordinary departure from the past.”

In the 40 years he’s been doing employment law, Babson said he doesn’t recall a single instance when an otherwise legitimate relationship has been challenged in this manner. Babson said his advice to employers continues to be the same: If you’re a franchisor, keep focusing on brand integrity: What kind of uniforms people should wear and the way products should be prepared; and don’t act in the capacity of an employer.

“If it takes the Supreme Court or Congress to once again remind the board that the common-law definition of employer applies here, then [so be it],” he said. “But, in the meantime, it’s unfortunate that this has the potential to disrupt long-term traditional business relationships.”

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