Prepared by Ted Gentry
May 2014

Construction Company Hit With Massive I-9 Penalty

Wyche at Work has previously outlined the dangers of hiring undocumented workers and the importance of maintaining proper I-9 files for your company’s employees.  This point was driven home when ICE’s Homeland Security Investigations Office recently upheld a six-figure fine levied on M&D Masonry, Inc., a business which provides masonry contractor services for projects throughout the state of Georgia.  The substantial fine was upheld primarily because M&D failed to present an I-9 for some employees and/or failed to ensure proper completion of I-9s for other workers.  Making matters worse was that the required certifying signature was done by “rubber stamp” in advance of the hiring of some employees.  Interestingly, ICE initiated an investigation after a newspaper article quoted a hiring foreman who inferred that an airport construction project involved the hiring of undocumented workers.  While the Chief Administrative Hearing Officer did reduce the total fine to $228,000, this result provides a staggering reminder that failing to adhere to proper hiring procedures and maintaining correct I-9 paperwork can lead to significant fines and legal exposure.

Fourth Circuit Addresses Employer’s Responsibility for Harassment by Non-Employees

Wyche at Work has long advised employers to publish anti-discrimination and anti-harassment policies, train their employees to comply with these policies, and take corrective action when violations occur. Less intuitive are the responsibilities that an employer has to address and correct harassing conduct of guests to their facilities. Last month, in Freeman v. Dal-Tile Corp., the U.S. Court of Appeals for the Fourth Circuit, which covers South Carolina, confirmed that an employer can be liable for sexual and racial harassment arising from conduct of a non-employee guest.

The plaintiff, Freeman, was a female African American customer sales representative for Dal-Tile, a stone and tile manufacturer and distributor. Freeman’s harassment claims focused on sex and race-based crude and demeaning comments by Koester, an independent sales representative for a remodeling center that frequently conducted business with Dal-Tile. Freeman and Koester were in contact several times each week. In his regular visits and calls to Dal-Tile, Koester frequently made comments about his recent sexual encounters, showed inappropriate photographs of women, used sexual and racial epithets, and made other crude sexual or racial remarks. When offensive remarks were made, Freeman complained to her supervisor and owner, who were sympathetic but basically told her to ignore Koester; she later complained to Human Resources, which banned Koester from communicating with Freeman and required him to coordinate on-site meetings through Freeman’s supervisor. Freeman subsequently took a medical leave of absence, receiving treatment for anxiety and depression, and shortly thereafter, resigned from her position, alleging that she was constantly worried by the prospect of interacting with Koester.

Addressing Freeman’s harassment and hostile work environment claim, the Court expressly adopted a “negligence standard” for analyzing the employer’s liability for third-party harassment under Title VII. Under this standard, an employer is liable for otherwise actionable harassment by third parties if the employer (1) knew r should have known of the harassment, and (2) failed to take prompt remedial action reasonably calculated to end the harassment.  Because the employer knew of the harassment and that it was ongoing and did not take any corrective action until Freeman reported the harassment to Human Resources, the court reversed the district court’s grant of summary judgment for Dal-Tile on Freeman’s racial and sexual hostile work environment claims and remanded the case to the district court to proceed to trial.

Providing a workplace that is free of unwelcomed and illegal discrimination and harassment is not only required by law but also good for morale. Companies may not be as eager to address claims that a customer, client, or vendor engaged in inappropriate comments or actions as they would when one of their own employees violates workplace or legal norms. The Freeman case is a good reminder that companies may have significant legal exposure if they ignore discrimination or harassment, even if the actions are not initiated or condoned by company employees. Supervisors and managers must be trained to respond to all harassing conduct that occurs in the workplace and help devise a constructive response to an employee who complains about illegal harassment or discrimination. Our employment attorneys are able to help you protect your organization by training employees and by responding to an informal or formal employee complaint, an EEOC charge, or a lawsuit.

Employee Handbooks and Manuals Part V: Employee Conduct Policy

In Part V of our series on employee handbooks and policies, Wyche at Work tackles the thorny issue of employee conduct provisions.  As previously noted, one of the main benefits of an effective handbook is being able to communicate an employer’s expectations to its workforce or, more precisely, the ability of an employer to let its employees know what they may, must, and cannot do while with the employer.  Simply put, this benefit cannot be realized without having a well thought out and well written employee conduct policy.

An effective employee handbook will inform employees on how they should behave to create a stable working environment and let managers respond to and correct misbehavior in a constantly changing work environment.   The key to an employee conduct policy, then, is striking the correct balance between predictability and flexibility.  This can be done by addressing two main drafting issues:

General Standards of Behavior v. Precise Code of Conduct.   Employers can choose to adopt general standards of behavior (“Standards”), a list of specific workplace rules (“Rules”), or a mix of both.

  • Standards are general provisions and expectations.  For example, some policies proscribe that “employees shall not physically or verbally harass, intimidate, or assault fellow co-workers” or “employees are expected to treat their fellow employees respectfully.”  Standards are appealing because they give employers the flexibility to address inappropriate behavior or actions without specifying a long list of prohibited activity.  On the other hand, because standards are by their very nature undefined and general, employees may have a challenging time understanding what they can and cannot do.  Additionally, as Wyche at Work has noted previously, Standards that are too general have been cited by the National Labor Relations Board as restricting rights to engage in protected, concerted activity under the National Labor Relations Act.
  • Rules are generally more specific.  For example, a Rule may state, “employees shall not use racial or ethnic slurs.”  Being specific, Rules are more informative about what employees can and cannot do.  However, Rules give employers little leeway in interpretation or application.  This means that a clever employee can evade the spirit of a Rule (for example, by yelling curse words at another employee) while not violating the text of a Rule (no racial slurs).  Developing lists of Rules to overcome this kind of behavior becomes lengthy and cumbersome.

Progressive Discipline Policy v. Flexible Approach.   When determining how best to redress wrongful employee behavior, employers have the choice of a formal progressive discipline policy or an informal flexible discipline approach.

  • A formal progressive discipline policy generally states the adverse employment actions (i.e., warnings, demotions, probationary periods, termination) and procedures (i.e., conversations, meetings, final decision) that flow from specific employee behavior. This type of policy has the benefit of removing the guess work for management and employees, ensuring more fair and consistent employee treatment. However, these discipline policies can have the effect of handcuffing employers. Employers may want the freedom to terminate immediately for a particular offense and/or may have not adequately documented previous infractions.
  • An informal discipline policy is more along the lines of “violations of any policy may result in adverse employment action up to and including immediate termination.” This gives the employer maximum flexibility to deal with every instance of employee misbehavior on its own terms. However, this flexibility may lead to employee claims that management treats its employees differently for similar misbehavior. These claims may grow or buttress employee claims of discrimination.

As a general rule, Wyche at Work discourages progressive discipline that is framed in mandatory terms. While past concerns about handbooks being “contracts” are not as prevalent today as they were ten years ago, employers should craft these policies with as much flexibility as is practical. Ultimately, then, finding the right mix of flexibility and predictability requires examining and analyzing a workplace culture and crafting appropriate Rules and/or Standards. Accordingly, do not hesitate to contact the Wyche employment team if you need assistance drafting or reviewing your employee conduct policy.

USERRA: Broad Protections for Uniformed Personnel Returning to the Workplace

In the spirit of Memorial Day, Wyche at Work would like to touch on the impact military members have on the workplace by examining an important but often overlooked employment law: the Uniformed Services Employment and Reemployment Rights Act (“USERRA”).

USERRA applies to a broad class of employees who are members of the uniformed services.  The term “uniformed services” is statutorily defined to include:

  • members of the Army, Navy, Marines, Air Force, Coast Guard, National Guard, and their respective reserves as well as members of the Public Health Service and any other military personnel designated by the President,
  • when they are performing activities required for their services including physical examinations, training, active duty services, non-active duty services, disaster response, and funeral honors,
  • regardless of whether their service is voluntary or involuntary.

The statute both restricts how employers may interact with uniformed services members and requires how employers must treat uniformed services members. First, USERRA prohibits employers from discriminating against employees and applicants because of their membership in the uniformed services. Discrimination may be found by overt acts (i.e., termination or refusal to hire, promote, or transfer) or a hostile work environment. Second, USERRA requires employers to re-employ uniformed service members returning from participating in protected activities. As this re-employment requirement is a distinct feature of USERRA, we will take the remainder of this article to discuss its scope and requirements in more detail.

An employee who departs to perform activities for the uniformed services must be re-hired upon his/her return but only if:

1) the employee provided reasonable notice (either in writing or orally) before leaving,
2) the employee has not been away for service for five or more years during his/her time with the employer, and
3) the employee reports to the employer within a reasonable time after finishing his/her most recent service.

Employers should be careful as (a) the statute contains multiple provisions which exempt employees from fulfilling these prerequisites, and (b) both the courts and the regulations interpreting USERRA have given employees considerable leeway in fulfilling these prerequisites.

The single most expansive protection for employees is contained in the specifics of how employers must re-hire them. These conditions are outlined below:

  • Escalator Principle. Returning employees are not merely entitled to return to the same position they left; instead they are entitled to return to a position they would have gotten had they been continuously employed. This means that, effectively, returning employees are treated as if they received all of the promotions and attendant increased pay, benefits, seniority, and duties they would have gotten if they never left.
  • Training and Reasonable Accommodation. Employers must follow the escalator principle even if doing so requires training the returning employee or reasonably accommodating an employee’s disability gained during service. If training or reasonable accommodation is prohibitively expensive or impossible, then employers are required to return uniform service members to a position with reasonably equivalent pay, benefits, and duties.
  • Just Cause Protection. Once uniform service members are returned to employment, their employment is no longer at will.  Instead, during the first 6 months that they return to employment, the employees may only be fired for just cause.

Given the statute’s stringent restrictions for employers and broad protections for employees, employers should be careful to comply with USERRA. This is especially true when considering that employees may recover double damages (including back wages and benefits) for willful violations of the statute. Do not hesitate to contact Wyche to establish or review your USERRA compliance policy.

OSHA and NLRB Unite to Save Whistleblower Claims

Wyche at Work appreciates collaborate efforts as much as the next legal commentator, but the news that the National Labor Relations Board (“NLRB”) and the Occupational Safety and Health Administration (“OSHA”) have joined forces to share information and refer whistleblower claims may be unwelcome news for employers. The Occupational Safety and Health Act provides a 30-day statute of limitations for employees to file health and safety whistleblower retaliation claims. According to the 5/21/14 Memorandum issued by the NLRB announcing the cooperative effort, OSHA estimates that in 300 to 600 cases per year, complainants either decline to file a charge or learn that the charge they did file was dismissed because it was filed after the 30-day deadline expired. The National Labor Relations Act (“NLRA”), on the other hand, establishes a six-month statute of limitations for filing charges of unfair labor practices.  Under the joint effort, OSHA agents will notify all complainants who file an untimely whistleblower charge of their right to file an unfair labor practice charge with the NLRB. This cooperative effort enhances the NLRB’s efforts to provide more options to employees for filing NLRA violations and is part of a growing trend to increase NLRB visibility and reach. As we reported last year, the NLRB and the Department of Justice agreed to allow the agencies to share information, refer matters to each other and coordinate investigations of claims that fall under the jurisdiction of each agency.

If you have any questions about these or other workplace law topics, please contact Ted Gentry.

This update is provided by Wyche for educational and informational purposes only and is not intended and should not be construed as legal advice.