www.fmglaw.com managing public employees in difficult times david a. cole, esq
TRANSCRIPT
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Managing Public
Employees in Difficult Times
David A. Cole, Esq.
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Employment Litigation Statistics
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Total EEOC Charges and Lawsuits Filed
Charges received by the EEOC
Federal workplace suits involving civil
rights*
Federal labor law suits*(FLSA, ERISA, LMRA, LMRDA)
2002 84,442 21,121 14,880
2003 81,293 20,881 17,706
2004 79,432 20,777 17,290
2005 75,428 19,670 18,189
2006 75,768 17,998 18,643
2007 82,792 14,851 16,853
2008 95,402 13,608 18,630
2009 93,277 13,036 16,685
2010 99,922 13,778 17,153
2011 99,947 14,343 18,878
*Based on years ending June 30.Sources: EEOC, Charge and Litigation Statistics & EEOC & Administrative Office of U.S. Courts
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Employment Lawsuits:Its About the Firings
3% 2%12%
2% 3%
78%
0%10%
20%30%40%
50%60%70%
80%90%
ConstructiveDischarge
Demotion EmotionalDistress
Not Hired Not Promoted WrongfulTermination
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Number of Retaliation EEOC Charges
60000
65000
70000
75000
80000
85000
90000
95000
100000
2005
2006
2007
2008
2009
2010
2011
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Retaliation as Percentage of Total EEOC Charges
0
5
10
15
20
25
30
35
40
1992
1995
1997
1999
2004
2006
2008
2009
2010
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Reasons for the Increase
• Broader definition of adverse action than in traditional discrimination claims
– Need not be an ultimate employment decision
– Must only be a “materially adverse action”
– This is one that “might well have dissuaded a reasonable worker from making or supporting a charge of discrimination.”
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Recent Supreme Court Cases
• Kasten v. Saint-Gobain Performance Plastics Corp (2011)– Employee’s oral complaints about FLSA violation protected
activity
• Thompson v. North American Stainless (2011)– Protection extended to others even if they didn’t complain
• Crawford v. Metropolitan (2009)– Employee answering questions can be protected activity
• Gomez-Perez v. Potter (2008)– ADEA has implied retaliation prohibition
• CBOCS West, Inc. v. Humphries (2008)– Section 1981 has implied retaliation prohibition
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Types of Retaliation Experienced by Employees Who Report Misconduct
Excluded from decision and work activity
Given the cold shoulder
Verbally abused by managers
Almost lost job
Not given promotion or raise
Verbally abused by other co-workers
Relocated or reassigned
Other forms of retaliation
Demoted
Physical harm to person or property
62%
60%
55%
48%
43%
42%
27%
20%
18%
4%Source: 2009 National Business Ethics Survey report, Ethics Resource Center.
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Increase of FLSA Claims
Year FLSA Claims Filed*
2003 3,529
2004 2,785
2005 3,583
2006 3,913
2007 4,138
2008 6,992
2009 5,462
2010 5,662
2011 7,028
* Period ending June 30
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Increase of FLSA Claims
Year Percent of Labor Lawsuits*
2003 19.9%
2004 16.1%
2005 19.7%
2006 20.9%
2007 24.5%
2008 37.5%
2009 32.7%
2010 33.1%
2011 37.2%
* Period ending June 30
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FLSA Settlement Trends
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
2007 2008 2009 2010 2011
Mean Settlement Amount* Median Settlement Amount*
*Source: March 22, 2012 NERA Economic Consulting
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
2007 2008 2009 2010 2011
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Settled Wage and Hour Case by Settlement Amount
0
10
20
30
40
50
60
Under$500,000
$500K -$1M
$1M -$2.5M
$2.5M -$5M
$5M -$10M
$10M -$20M
$20M -$50M
$50M andAbove
Nu
mb
er
of
Cases
Source: March 22, 2012 NERA Economic Consulting
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Settled Wage and Hour Cases by Number of Plaintiffs
0
10
20
30
40
50
60
70
Fewerthan 100
500-999 2,500-4,999
10,000-49,999
100,000-199,999
Nu
mb
er
of
Cases
Source: March 22, 2012 NERA Economic Consulting
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Settled Claims by Type of Allegation
2011
43%
7%16%
20%
6%5% 3%
Overtime
Off-the-Clock
Misclassification
Missed Mealsand Breaks
Donning andDoffing
Minimum Wage
Tip Pooling
2007-2011
40%
19%
17%
15%
4%
3%
2% Overtime
Off-the-Clock
Misclassification
Missed Mealsand Breaks
Donning andDoffing
Minimum Wage
Tip Pooling
Source: March 22, 2012 NERA Economic Consulting
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Understanding the At-Will Employment Rule
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Understanding The Legal Claim:If They Are At-Will, Should I Worry?
• Oral employment contract
• Indefinite duration
• Terminable at will by either party
. . .
• But exceptions and federal and state laws have eviscerated the at-will rule
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Public Policy Exceptions
• Refusal to commit an unlawful act
– Refuse to lie to investigator
– Refuse to destroy documents
• Performing a legal obligation
– Testifying at trial
– Serving as a juror
• Exercising a legal right or privilege
– Filing a workers’ compensation claim
– Filing a complaint with a government agency
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At-Will Exception:Contract Implied In Fact
• Promises Of Job Security
– “If you do a good job, you’ll never be fired”
– “You’ll always have a job here as long as I’m here”
• Handbooks And Policy Manuals
– Statements of Periodic Compensation
– “Your salary for the first year you are employed will be $20K”
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Use a Standard Offer Letter
• Emphasize employment at will
– Avoid inferences that employment is for a certain amount of time
• Consider stating pay rate for hourly employees
• Discuss, include employer policies
• Outline position, duties, supervisor
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Another At-Will Exception: Civil Service Systems
• Establish conditions that must be satisfied in order to terminate employee
• Create a property in continuing employment that entitle employee to due process
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Further Limitations: Major Federal Statutes
• 42 U.S.C. § 1983
• Title VII of the Civil Rights Act
• Age Discrimination in Employment Act
• Americans with Disabilities Act
• Civil Rights Act of 1991
• Equal Pay Act
• Executive Order 11246
• Fair Labor Standards Act
• Family and Medical Leave Act
• Immigration Reform and Control Act
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Government Employers
• Subject to most statutes governing private employers
• Cannot violate constitutional rights of employees
– Procedural due process
– Substantive due process
– Freedom of speech
– Right to liberty
– Equal protection
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Section 1983 of the Civil Rights Act of 1871
• Violation of rights protected by constitution or statute
• Proximately caused
• By a person
• Acting under color of state law
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Other State Law Issues
• Georgia Whistleblower Act
• Georgia First Offender Statute
• Potential common law claims:
– Negligent hiring/retention/supervision
– Defamation (libel or slander)
– Invasion of privacy
– Intentional interference with contractual relationships
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Understanding How Discrimination is “Proven”
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But I Didn’t “Intend” to Discriminate
• Common scenarios where employers underestimate case and lose:
– How were similarly situated employees treated?
• Prior disciplinary history
• Similar types of violations
• Warnings, records
• Supervisor’s history
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But I Didn’t “Intend” to Discriminate
• Common scenarios where employers underestimate case and lose:
– Did you follow policies?
• Employee handbook
• Discipline rules
• Progressive discipline
• Past practice
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But I Didn’t “Intend” to Discriminate
• Common scenarios where employers underestimate case and lose:
– Bad Behavior by Management
• Language
• Jokes
• Emails
• It’s rarely about the employee
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But I Didn’t “Intend” to Discriminate
• Common scenarios where employers underestimate case and lose:
– Performance evaluations and documentation
• Lack of documentation
• Poor documentation
• Email documentation
• Favorable reviews lose cases every time
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The Bottom Line
• Every termination has an element of risk to it
• It is an individual decision that will always have two sides to the story
• Do not focus only on your perspective, but evaluate what employee will argue and be explain differences in treatment, documentation issues, and reasons for your decision
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Building Terminations that Minimize Risks
• Effective performance evaluations
• Accurate and thorough documentation of issues before termination
• Follow a termination checklist
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Effective Evaluations
• Regularly scheduled
• Written
• Accurate, specific
• Feedback from employee
• Follow-up
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Common Problems with Evaluations
• Too much time to complete
• Inaccurate overall rating
• No analysis of employer or department-wide bell curve
• No follow-up
• Vague comments
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Common Problems With Evaluation
• Work performance not properly weighted
• Number systems that do not reflect actual performance
• Not acknowledging differences between long term and new employees
• Useless criticism versus objective job goals
• Only one thing really matters: overall score!
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Evaluations That Work
• Quantify Measurements
• New Employee
– Evaluate Basic Skills and Performance of Job Requirements
• Senior Employee
– Set Particular Expectations & Goals
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Discipline Strategies
• Potential juror survey:
The employer is negligent if it does not document an employee’s performance?
Yes 91%
No 9%
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Effective Evaluations
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Documentation that Leads to Problems
• Vague comments –
– Dan is not a team player
– Susan has personality conflicts with other employees
– Richard’s productivity has dropped in recent months
– Violation of Standard Operating Procedure
– Poor Attitude
– Excessive Absences
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Documentation that Leads to Problems
• Never in handwriting
• Never by email
• Never let employee prepare own statement
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Email Documentation – It Never Dies Or Fades Away
• Only write what you would say
• Never discipline or discuss employees by email
• Limit email to business use only
• Understand the privilege – only communications with attorneys are protected
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Actual Quotes From Federal Employee Performance Evaluations
"Since my last report, he has reached rock bottom and has started to dig."
"His men would follow him anywhere, but only out of morbid curiosity."
"I would not allow this employee to breed."
"This employee is really not so much of a has-been, but more of a definitely won't be."
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Actual Quotes From Federal Employee Performance Evaluations
"When she opens her mouth, it seems that this is only to change whichever foot was previously in there.“
"He would be out of his depth in a parking lot puddle."
"This young lady has delusions of adequacy.“
"Works well when under constant supervision and cornered like a rat in a trap."
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Actual Quotes From Federal Employee Performance Evaluations
"She sets low personal standards and then consistently fails to achieve them."
"This employee should go far – and the sooner he starts, the better."
"This employee is depriving a village somewhere of an idiot."
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Documentation that Works
Use Standard Form/Type document
Date of Event
Deficiency described—Be specific
Next step in Process only if Last Chance or your have Progressive Discipline
Put it in personnel file
Employee signature/witness signature
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DOCUMENTATION OF EMPLOYEE DISCUSSIONS Employee's Name: ________________________________________Department: ________________________________________Position: ________________________________________Date: ________________________________________ Details of Interview:_____________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ Action taken: Counseling Suspension ____ days
Transfer/Demotion Discharge Supervisor's Signature: _________________________ Date: __________________Employee's Signature: _________________________ Date: __________________
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Be Consistent In Discipline:Inconsistent = Discrimination
• Treat Like Cases in a Like Manner
• Follow Written Policies
• Be Able to Explain Apparent Discrepancies
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Set A Rule of Thumb For Managers
• At Least 2 Documented Meetings Before Termination
• At Least 1 Involving HR
• All within 6 months of termination
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Termination Checklist
• Is this going to be a surprise?
• Don’t summarily discharge
• Examine prior discipline to others
• Review written file
• Listen to employee’s account
• Communicate decision in calm, confident manner
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Termination Meeting
• Have a witness
• Don’t tape record
• State reason for discharge
• Don’t argue
• Don’t suggest that you don’t agree with the decision
• Document meeting
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Due Process Rights
for Public Employees
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Due Process Rights
• Public employees can have protected property rights to their jobs
• Property rights give rise to due process rights that must be protected from unlawful government taking or intrusion
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Where do the rights come from?
• Statutes
• Regulations
• Ordinances
• Handbooks
• De facto representations
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Waiver of Property Rights and Resignation
• Resignations are presumed voluntary and waives the employees property interest
• If involuntary, it is a constructive discharge and a violation of due process if a hearing was not held
• Involuntary if
– (1) Employer forces the resignation by coercion or duress; or
– (2) the employer obtains the resignation by deceiving or misrepresenting a material fact to the employee
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Pre-Discipline / Pre-Termination Hearing
• Notice of the charges
• Opportunity to be heard
– This does not necessarily have to be a “hearing.” Oral notice, along with an opportunity to respond, is sufficient.
– Create a record by putting notice of pre-discipline hearing in writing, and giving employee time to respond
– Must continue pay employee until pre-discipline/termination hearing.
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Post-Termination Hearing
• Written notice of charges in sufficient detail
• Names of witnesses
• Hearing within reasonable period
• Employee has opportunity to be heard
• Presentation of evidence
• Right to cross examine
• Impartial tribunal
• Right to counsel
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Procedural Violations At Hearings Can Be Cured
• Provide a later procedurally proper hearing
• Cannot violate constitutional requirements unless you don’t fix the problem by allowing another proper hearing
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Name Clearing Hearings
• Public employees have right to liberty interest, even if they are at-will
• Liberty interest includes right to good name
• False, stigmatizing statement made public infringes liberty interest
• Inform employee of right to name-clearing hearing
– Limited procedure
– Notice of charges
– Opportunity to refute
– Impartial tribunal
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Name Clearing Hearing, cont’d
• Not all adverse statements are stigmatizing.
• Must foreclose employee from other employment
• Must be published
• Truth is the best defense
– No hearing required if public statements are true.
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Other Current Issues Facing Public Employers
• Reductions in Force
• Furloughs
• Social Media
• Technology and Right to Privacy
• Georgia E-Verify Rules
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Common Problems in RIFs
• Did not conduct a privileged analysis
• Unable to explain reasons for decision
– Factors that were considered
– Changes in decisions compared to recommendations made
• Supervisors effectively make decisions based on vague criteria without higher level review
– E.g., “identify your weakest performer”
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Common Problems in RIFs
• One job elimination
• Job elimination within a group
• Job eliminations + some transfers
• Selective “non-renewals”
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Reductions in Force
• RIFs are nothing but a series of individual decisions, but in an economic context
• The employee will argue that the RIF was used as pretext to cover discrimination
• At that point, it becomes an individualized comparison to other employees just like any other case
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How to Minimize Risks in RIFs
• Explain reason for RIF in writing:
– Loss of funding
– Loss of students
– Expenses above budget
– Cancellation of programs
– Explain group to be affected
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How to Minimize Risks in RIFs
• Reduce criteria for selection to writing
– Base it on objective criteria as much as possible
– Entire facility or department
– Seniority
– Skill level
– Past evaluations
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How to Minimize Risks in RIFs
• Be able to explain each individual decision:
– Explain why employee was selected
– Explain why others not selected
– Explain why no transfer
• Be specific about subjective decisions:
– Versatility (document capabilities)
– Attitude (give examples)
– Job knowledge (specify capabilties)
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How to Minimize Risks for RIFs
• Analyze the Demographics
– Maintain the privilege
– Evaluate eligible pool and resulting terminations
• Race
• Sex
• Age
– Numbers are important but most times not solely determinative
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How to Minimize Risks for RIFs
• Document and preserve information
• Conduct exit interviews for affected employees
• Consider offering outplacement services or severance agreements– Beware that severance agreements for
employees over 40 selected in a RIF have special disclosure requirements
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Consider Alternatives to RIFs
• Reduced work week
• Work sharing
• Voluntary leaves of absence
• Exit incentive programs
• Furloughs
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Furloughs and Other Issues Under the FLSA
• Non-exempt employees:
– Not precluded from reducing hours or rates
– Must pay full minimum wage and overtime due on regularly scheduled pay day for workweek in which work was performed (i.e. cannot delay payment)
– Only have to pay for hours worked (e.g. only worked partial day due to lack of work)
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Furloughs and Other Issues Under the FLSA
• Exempt employees
– Must be paid on a salary basis
– Generally cannot deduct for absences caused by operating requirements of business
– However, there is an exception for public employers
– Deductions for budget-required furloughs will only disqualify employee from exemption during week in which furlough occurred
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Furloughs and OtherIssues Under the FLSA
• Exempt employees
– Can prospectively reduce salaries (but not below $455 per week)
– Can seek volunteers to take time off due to insufficient work
• Decision must be completely voluntary
• Salary deductions may be made for one or more full days of missed work for personal reasons other than disability or sickness
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Furloughs and Other Issues Under the FLSA
• On-call time during furloughs can cause problems
– Engaged to wait or waiting to be engaged
– Free to effectively use time for own pursuits
• Do not try to skirt travel time requirements
– Travel that is part of day’s work
– Special travel required outside normal commute area
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Summary
• How the at-will rule really works
• How discrimination is “proven”
• Minimizing risks in terminations
• Due process rights for public employees
• Minimizing risks in RIFs
• Complying with the FLSA in furloughs and reduced work scenarios
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Any questions?