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You spoke...
we listened…
we have added a session on the new COBRA regulations.
The Employer's Legal Resource
2009 Workshop
Topics Include:
- Union Issues In A Non-Union Workplace
- American Recovery and Reinvestment Act of 2009 and COBRA
- ADA Amendments Act of 2008
- Drug and Alcohol Testing in the Workplace
- FMLA - How to survive the new regulations
Cost: $100 which includes a continental breakfast and lunch.
Registration begins at 8:00 AM.
Workshop begins at 8:30 AM and runs until 4:00 PM.
Oklahoma City - April 2, 2009
Clarion Meridian Hotel & Convention Center
737 South Meridian
Oklahoma City, OK 73108
"The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program. It means that this program has met the HR Certification Institute’s criteria to be pre-approved for recertification credit."
Presented by Doerner, Saunders, Daniel & Anderson, L.L.P.
320 South Boston, Suite 500 - Tulsa, OK 74103
201 Robert S. Kerr, Suite 700 - Oklahoma City, OK 73102
Retaliation
THE SUPREME COURT GETS FREAKY
By far the best line from the recent Supreme Court decision on retaliation in the workplace is “[n]othing in the statute [Title VII] requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when asked a question.” The decision is Crawford v. Metropolitan Government of Nashville and Davidson County.
The facts in Crawford are fairly simple: Human Resources asked Ms. Crawford whether she had witnessed inappropriate conduct by her supervisor. Ms. Crawford responded that several times her supervisor had grabbed his crotch at her, pushed his crotch up to her window, asked to see her breasts, and in one instance grabbed her head and pulled it to his crotch. Ms. Crawford reported during this interview with Human Resources that she told her supervisor “bite me,” and flipped him the bird. Two other employees reported being harassed by the same supervisor. After the investigation, all three employees including Ms. Crawford were fired. Ms. Crawford was fired for embezzlement.
Ms. Crawford’s employer had a couple of defenses. First, the employer argued that Ms. Crawford did not oppose the harassment because doing things like saying “bite me” and flipping him the bird were not appropriate opposition and that reporting the events during the internal investigation did not amount to opposition. Second, the employer argued that the anti-retaliation provision in Title VII did not apply to an internal investigation. While the trial court and the appeals court bought these arguments, the Supreme Court of the United States rejected them - - as freakish.
Title VII’s anti-retaliation provision makes it “an unlawful employment practice for an employer to discriminate against any of his employees . . . [1] because he has opposed any practice made an unlawful employment practice by this subchapter, or [2] because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.” Specifically, the Supreme Court disagreed. First, it stated that opposition to unwanted behavior derives its meaning from the most basic definition of the term opposition. For example, they noted, people can “oppose” the death penalty without writing letters and “taking it to the streets,” so to speak. Second, the Supreme Court stated, when an employee describes employment practices prohibited by Title VII in response to a company investigation or inquiry, that employee has engaged in conduct protected by the opposition clause of Title VII’s anti-retaliation provision.
Let’s Break It Down
There are two types of retaliation prohibited by Title VII (and many other anti-discrimination laws): that prohibited by the Opposition Clause and that prohibited by the Participation Clause.
Opposition:
The opposition clause of Title VII makes it “an unlawful employment practice for an employer to discriminate against any of his employees . . . because he has opposed any practice made an unlawful employment practice by” Title VII. You may recall from past articles (hopefully not from past lawsuits) that it is important for employers to have established proper workplace policies including a prohibition on retaliation.
In the Crawford case, the employer alleged that Ms. Crawford’s claims of harassment were only discovered during the company’s internal investigation of the supervisor and hence did not trigger the “opposition clause” of Title VII. The Supreme Court disagreed, stating: “[n]othing in the statute [Title VII] requires a freakish rule protecting an employee who reports discrimination on her own initiative but not one who reports the same discrimination in the same words when asked a question.” In other words, the opposition clause goes into effect regardless of when, how, or in what context the employee opposes the violation. Bottom line - if an employee has told you about Title VII violations, she has opposed the violations…meaning you may not retaliate against her for telling you.
As a side note, while the best way for your employee to let you know someone is engaging in practices that violate Title VII is for them to report the offender, chances are you have a few employees who like Ms. Crawford may be more likely to merely say, “bite me.” The Supreme Court’s interpretation of an employee’s opposition to unwanted harassment tells us that opposition can come in many forms, and under many circumstances. Bottom line - - an employee does not have to formally say, “I oppose this behavior,” and does not have to file an EEOC complaint before her actions amount to opposition to violations.
Participation:
Although the decision did not directly discuss this clause, the decision may influence the interpretation of an employee’s reporting of harassment via participation in an investigation.
Remember, Title VII’s language is broad and provides protection to anyone who has “participated in any manner in an investigation, proceeding, or hearing under” Title VII. The Crawford decision should make it clear that the Supreme Court is construing an employee’s actions concerning Title VII investigations as liberal triggers for the anti-retaliation provisions of Title VII.
Practical Lessons:
- When the Supreme Court calls your interpretation of events or your defense “freakish,” you are going to lose. But seriously…
- Understand the basic rule of Crawford - - when in an internal investigation or inquiry an employee describes actions which violate Title VII, that employee has engaged in conduct protected by the opposition clause of Title VII’s anti-retaliation provision.
- As always, have proper policies and procedures in place that prohibit violations of Title VII, but also allow employees to report those violations without fear of retaliation.
- Have a neutral person (HR, perhaps) oversee personnel decisions to make sure something fishy is not happening, i.e. someone is being demoted because they reported a violation of Title VII. Remember that retaliation can be found in many types of adverse actions, including but not limited to reductions in pay, diminution in responsibility, change in job title or duties, and discharge.
- Ms. Crawford was fired very shortly after she reported her supervisor’s violations. Take note, in many retaliation cases, the closer in time to an employee’s reporting, the more likely the action will be seen as in retaliation against the employee for reporting.
- Again as always, document the circumstances surrounding any reports of violations, as well as personnel actions. Lawsuits can stretch out for years and years, and it is often difficult to go back and reconstruct the reasons why you took the actions you did, meaning it will be more difficult to prove your actions were legitimate.
By McLaine DeWitt Herndon, mherndon@dsda.com.
WARN Act
MASS LAYOFFS/PLANT CLOSINGS MAY TRIGGER WARN ACT PROTECTIONS
In tough economic times, reductions in workforce are an unfortunate and sometimes unavoidable part of business. The federal Worker Adjustment and Retraining Notification Act (called “WARN” for short) applies to employers with 100 or more full-time employees and requires 60 days advance written notice of terminations that result from certain plant closings or mass layoffs. The advance notice is meant to give workers and their families a transition time to seek other jobs or enter training programs.
The two main triggering events under WARN are plant closings and mass layoffs. “Plant closings” include a temporary or permanent shutdown of an employment facility or particular work unit resulting in the employment loss of any 50 or more employees during any 30-day period. “Mass layoffs” include any employment loss at a single employment site during any 30-day period that results in either a reduction of at least 50 employees who make up at least 33% of the active workforce at that site, or a reduction of 500 or more employees. There is a very limited defense for failing to give 60 days notice if an employer can prove layoffs were the result of an “unforeseen business circumstance” or natural disaster. The courts have made proving this defense very difficult for employers.
The WARN Act also contains an aggregation rule that prevents employers from terminating several small groups of employees over a long period of time to avoid the notice requirements. Two or more groups of separations over any 90-day period can be counted together to trigger the WARN notice requirements. Be aware that any employment losses within any 90-day period might be added together to meet the WARN threshold levels, unless you can demonstrate that the separations were the result of separate and distinct actions and causes.
The WARN notice requirements only apply to layoffs at a “single site of employment.” For example, if you manage two facilities on opposite sides of town, those facilities are treated separately under WARN - layoffs at one site would not be counted with layoffs at the other. Also, WARN applies to the closing of a particular work unit within a single site of employment, not just the closing of the entire site.
Employees to be counted for WARN purposes include hourly and salaried workers, as well as managerial and supervisory employees. Part-time employees are not counted; this includes employees who have worked less than 6 of the last 12 months or who work an average of less than 20 hours a week. You also don’t have to count terminations for cause, voluntary departures, or retirements. Also, “employment loss” under WARN includes a 50% or more reduction in an employee's hours of work during any 6-month period.
If the WARN act applies, you must provide 60-days written notice to the following: each affected employee or their bargaining representative; Oklahoma’s Dislocated Worker Unit; and the chief elected official of the unit of local government in the area where your closure or layoff will occur.
You must give the notice to all employees who you reasonably expect will be terminated because of the closing or mass layoff. Affected part-time employees need to be given notice even though they are not counted towards the threshold numbers triggering the notice requirement. The Act is specific about what the notices must contain and the required content depends on the recipient. You should consult the Act and the Department of Labor regulations to find out what should be specifically contained in each notice.
Failure to give the required notices may result in extensive liability to your company. Employees can recover pay and benefits for the period in which notice was not given, up to 60 days, and you may be subject to an additional civil penalty of up to $500 for each day of the violation.
If your company is considering a reduction in force, you should get advice as to whether the WARN Act applies and, if so, how you can best structure the reduction in force to minimize any legal risk.
By N. Lance Bryan, lbryan@dsda.com
Benefits Checklist
401(k) SPRING CLEANING
A couple of times a year, you should review your 401(k) retirement plan, along with all benefit plans to determine that all is in order (doesn't Spring seem like an appropriate occasion?). While not exhaustive, the list below will guide you in reviewing your 401(k) and other defined contribution plans.
- Has your Plan been amended for all changes in the law?
- Are the terms of the Plan being followed (a common mistake)? Prepare up-to-date and clear policies and procedures to be followed.
- Have employees been allowed to enroll in the Plan on time?
- Does the Plan have procedures in place to prevent excess participant deferrals; for 2009, $16,500?
- Are all participants who turn age 50 in a Plan Year allowed to make catch-up contributions (up to an additional $5,500)?
- Are employer matching contributions and non-elective employer contributions being made on a timely basis?
- Are the terms of the Plan followed in making plan loans: amount, interest rate, payback schedule?
- Does the employer submit to the trust all employee deferrals, catch-up contributions and loan payments in a timely manner? Such contributions must be made as soon as reasonably possible by the employer.
- Are the terms of the hardship rules for withdrawals being met? If an employee takes a hardship, is he prevented from making elective deferrals for the next 6 months?
- Have summary plan descriptions been updated in a timely manner and provided to participants?
To keep a Plan running smoothly, these are a few questions to address on a regular basis.
By Anita K. Chancey, achancey@dsda.com
Non-Compete Agreements
Non-Competes Still Subject to Rule of Reason
Although we have debated for years over the terms under which an employer may prohibit a former employee from doing things like competing or soliciting other employees from leaving the employer, the Oklahoma Legislature passed a law in 2001 which attempted to address (and limit) the rights of the employer. Now, the Oklahoma Court of Appeals has issued the first written opinion interpreting this law. The law reads:
A. A person who makes an agreement with an employer, whether in writing or verbally, not to compete with the employer after the employment relationship has been terminated, shall be permitted to engage in the same business as that conducted by the former employer or in a similar business as that conducted by the former employer as long as the former employee does not directly solicit the sale of goods, services or a combination of goods and services from the established customers of the former employer.
In the March 2009 case of Inergy Propane, LLC v. David L. Lundy, the Oklahoma Court of Appeals was squarely faced with how to interpret this provision.
Here are the facts. In 1992, Mr. Lundy sold his propane business to Beck & Root (who later sold to Inergy). As part of this sale, Mr. Lundy and Beck & Root entered into a non-compete agreement (concerning the sale of good will which is governed by a different law not discussed here). In June 2002, Lundy accepted a position with Inergy. As partial consideration for that job, he signed a Non-solicitation Agreement (a rose by any name and all that . . . ).
For purposes of this article, the Non-solicitation Agreement prohibited Lundy, for two years following termination, from soliciting or diverting the business of any Inergy customer which was defined as a business (1) located within 50 miles of the office to which Lundy was assigned and (2) that was either an Inergy customer within the 12 months prior to Lundy’s termination or received a proposal from Inergy within 6 months prior to Lundy’s termination.
In January 2005, Lundy left Inergy and opened a new propane business. Inergy filed a lawsuit and sought a preliminary injunction to stop Lundy. Lundy acknowledges that some of his customers were customers of Inergy, but argues that he did not solicit the customers, but they voluntarily sought him.
Rule of Reason. Prior to Section 219A, courts determined the validity of these non-competes under the rule of reason. Basically, the courts would look to what is the relevant market, what is the effect of the restraint on competition in that market, and if the effect is “anticompetitive,” are there any procompetitive benefits that outweigh the anticompetitive effects? This was a very fact intensive analysis and often led to unpredictable and contrary results.
Section 219A and the Rule of Reason. So the Oklahoma Legislature adopted Section 219A. While you might think it does away with the Rule of Reason, the Oklahoma Court of Appeals does not agree. The Court noted that Section 219A addresses the third question of the Rule of Reason but does not provide enough guidance to fully answer the question. For example, Section 219A does not address the appropriate time of such a restriction. Is one year okay? What about ten years? What about forever? Section 219A does not address geographic boundaries. The Court believes that Section 219A expresses the Legislature’s position on the procompetitive versus anticompetitive effects, but still leaves in place prior case law regarding the Rule of Reason. For Lundy, the Court found enough likelihood that Inergy would prevail on its position and left the preliminary injunction in place pending the trial court’s resolution of the entire matter.
Your takeaway. Section 219A is not the end of the game. Any agreement you give to a prospective employee must, at a minimum, comply with Section 219A. However, that is not all. Any other provisions you include as well as the overall effect must pass the Rule of Reason. Unfortunately, since the Rule of Reason is not settled until a court says it is, employers must carefully draft these agreements to maximize enforceability. Like in life, there are no guarantees.
By Kristen L. Brightmire, kbrightmire@dsda.com
What's New
ANNOUNCEMENTS
KEVIN COUTANT AND JIM MILTON RECEIVE LEADERSHIP AWARDS
Doerner, Saunders, Daniel & Anderson, L.L.P. is pleased to announce that Kevin C. Coutant, chair of the Firm’s Transactional Practice Group, and James C. Milton, chair of the Firm’s Water Law Section, will each be awarded the Journal Record 2009 Leadership in Law award. The award is given annually to lawyers who exercise leadership, contribute significant time and effort to volunteerism, and have significant achievements in their chosen area of the legal profession. Kevin’s practice is focused on real estate and transactional matters, and Jim practices in the areas of water law and trust and estate litigation. They are among a select group of lawyers in the State of Oklahoma who will receive the award at the May 1 Law Day Luncheon in Oklahoma City.
Congratulations Kevin and Jim.
ANITA K. CHANCEY WRITES ABOUT GINA
The March 14, 2009 Oklahoma Bar Journal published the article “Up Next: Genetic Information Nondiscrimination Act”, 80 OKLA. BAR J. 491 (2009), written by Anita K. Chancey. For more information, contact Anita at achancey@dsda.com. To read Anita’s article click here.
COURTNEY L. BRU CO-AUTHORS ARTICLE ON EMPLOYEE BLOGGING
Courtney Bru co-authored "Invasion of the Blogs: An Introductory Survival Guide for Assessing, Addressing and Managing Employee Blogs and Other Alien Publication Life Forms," published by the Media Law Resource Center Employment Law Committee in March, 2009. Employee blogs generate a variety of practical and legal concerns for employers. For more information, contact Courtney at cbru@dsda.com or click here for more information on the report.
KRISTEN L. BRIGHTMIRE AUTHORS ARTICLE ON WRONGFUL DISCHARGE IN OKLAHOMA
Kristen Brightmire wrote an article on the state of wrongful discharge law in Oklahoma from an employer’s perspective. The article appears in the March 14, 2009 Oklahoma Bar Journal and is titled “A Defendant’s Perspective: Kruchowski Raises More Questions Than Answers”, 80 OKLA. BAR J. 491 (2009). For more information, contact Kristen at kbrightmire@dsda.com.
CHAD BURRIS NAMED AS ONE OF THE TOP 40 UNDER 40
From more than 250 nominations, a panel chose this year’s class of top 40 Oklahoman’s based on their extraordinary achievements, character and care for their communities. Chad Burris was chosen as one of these distinguished individuals and is featured as such in the April 2009 Oklahoma Magazine. To read this article click here.
Dates to Remember
CALENDAR OF NOTABLE EVENTS
April 2, 2009
Doerner Saunders presents The Employer’s Legal Resource 2009 Workshop at the Clarion Meridian Hotel & Convention Center in Oklahoma City from 8:30 a.m. through 4:00 p.m. Topics include union avoidance, the new COBRA regulations, ADA Amendments Act of 2008, drug and alcohol testing in the workplace, and the new FMLA regulations. To register call (918)582-1211, or click here for the registration form.
April 3, 2009
Form I-9 Update. After a two-month delay, beginning April 3, 2009, employers will no longer be able to accept any expired documents as part of the verification process. Under the old rule, documents establishing identity only, also known as “List B Documents,” were acceptable to prove identity, even if expired. Documents on this list include, for example, driver’s licenses, state ID cards with photographs, and school ID cards with photographs. The new rule also adds additional documents that employees may present to demonstrate both identity and employment authorization, also known as “List A Documents.” These new acceptable documents include certain I-551s that appear on foreign passports and certain admission documents for persons holding passports from Micronesia or the Marshall Islands. The new rule does not require employers to complete a new I-9 form for existing employees. Employers should use the new form only for employees hired on or after April 3, 2009, and for re-verifications performed thereafter. To get a copy of the new Form I-9, click here. For more information contact DSDA attorney Hilary L. Velandia at hvelandia@dsda.com.
April 7, 2009
Doerner Saunders is providing multiple speakers for a seminar in Oklahoma City on Water Rights Sales and Transfers In Oklahoma. The Firm's attorneys will cover issues ranging from regulatory and environmental issues to water supply contracts and tribal water rights. For more information, or to register, click here.
April 22, 2009
Earth Day.
May 6, 2009
Courtney L. Bru will be presenting as a speaker for Tulsa Equal Employment Opportunity Coordinators Association at 7th and Houston at the Interurban Restaurant from 11:30 a.m. to 1:00 p.m. She will be speaking on Personnel Files and Record Retention. The presentation will focus on what types of materials should be kept in employee records and how long each type of material should be kept, with specific attention to requirements imposed by major state and federal employment laws as well as confidentiality considerations. For more information, contact Courtney at cbru@dsda.com or visit TEEOCA’s website here.
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