Ohio Employer's Law Blog, Ohio Employment Law, Practical employment law information for Ohio businesses

Associational discrimination has become a hot employment law topic. The ADA expressly authorizes claims based on one's association to a person with a disability. Earlier this year, the 6th Circuit recognized an associational retaliation claim based on one employee's close relation to another employee who engaged in protected activity. Now, the 2nd Circuit has joined the 6th Circuit in permitting an associational discrimination claim based on the plaintiff's interracial relationship.

In Tetro v. Elliott Popham Pontiac, the 6th Circuit permitted an employee to proceed with a Title VII race discrimination claim based on his biracial child:

A white employee who is discharged because his child is biracial is discriminated against on the basis of his race, even though the root animus for the discrimination is a prejudice against the biracial child. ... If he had been African-American, presumably the dealership would not have discriminated because his daughter would also have been African-American. Or, if his daughter had been Caucasian, the dealership would not have discriminated because Tetro himself is Caucasian. So the essence of the alleged discrimination in the present case is the contrast in races between Tetro and his daughter. This means that the dealership has been charged with reacting adversely to Tetro because of Tetro's race in relation to the race of his daughter. The net effect is that the dealership has allegedly discriminated against Tetro because of his race.

In Holcomb v. Iona College, the 2nd Circuit allowed a white assistant basketball coach to claim that he was fired because he was married to an African-American woman:

[W]here an employee is subjected to adverse action because an employer disapproves of interracial association, the employee suffers discrimination because of the employee's own race.

Unlike associational retaliation claims, this type of associational discrimination claim makes sense under the statute. The adverse action is being taken "because of" the employee's race. The genesis of the discrimination is the fact that the employee is a different race than his spouse, which is "because of" his race.

The bottom line for employers - the race of your employees' spouses and children is none of your business. Supervisors and managers should not go out of their way to inquire about it. Diversity training should incorporate a component making employees aware that this type of discrimination is unlawful and will not be tolerated.

Late last year, the NLRB issued its decision in Register-Guard, which determined that an employer can lawfully prohibit union-related use of company email systems if the employer has a consistently enforced policy prohibiting "non-job-related solicitations." If it was not clear before, after Register-Guard it is clear that an employer's email system is company property and "employees have no statutory right to use [the company's] e-mail system for Section 7 purposes." (For my prior discussion of this case, see NLRB rewrites employee solicitation rules).

To date, the NLRB has decided 5 cases under the Register-Guard standard. To help employers understand the position the NLRB will take on limitations placed on corporate email systems and other employee communications, it has summarized those 5 cases in a published memorandum, which I will further summarize for everyone.

Case #1: The employer had historically allowed the union to use the company's email system to conduct union business and to communicate with the employer about labor relation matters at the facility. Recently, the employer sent a letter to the union stating that it had knowledge that the union was inappropriately using the company's e-mail system by sending broadly distributed emails to company managers outside the facility. The letter cautioned that further similar activity could result in immediate suspension of the union's email account. The NLRB found the rule to be lawful because it concerned how the union was permitted to use the employer's email system and did not otherwise prohibit the union from engaging in protected communications outside the plant or to broad groups of managers.

Case #2: Both before and after the union's organizing campaign began, the employer maintained a no solicitation rule which, on its face, prohibited solicitation for any purpose during working time and in work areas. The employer, however, was inconsistent with its enforcement of the policy. For example, the employer warned and/or disciplined employees engaged in union solicitation activity, yet permitted non-union-related solicitations such as school fund raisers and Avon sales. Because the employer permitted direct solicitations for non-union/non-work purposes, its prohibition of union-related solicitations was discriminatory.

Case #3: The employer had a handbook provision which stated that its email system is intended for reasonable and responsible business purposes and is not intended for personal use, and that employees may not solicit during working time for any purpose. After sending an email communication about a union meeting, an employee received a written warning for using the email system for solicitation purposes in violation of handbook provision. Other employees, however, frequently sent non-work related emails while at work and during working times (such as chain letters, jokes, party invitations, and solicitations for candy sales) and were not disciplined. The NLRB concluded that the employee was unlawfully singled out because of the union-related content of his email. Case #4: An employee, who was dissatisfied with working conditions, circulated an email petition to try to drum up support to take the concerns to management. When the Board of Directors learned who was responsible for the petition, it terminated him for insubordination for participating in the "anonymous email scheme" and inappropriately using the employer's computers in violation of its policy. The NLRB concluded that the employer unlawfully discharged the employee for engaging in protected concerted activities when seeking the support to address working conditions. An employer may not rely on an employee's failure to adhere to a rule that prohibits protected activity as a basis for discipline. Further, because the employer's email policy allowed reasonable personal use of the computer and the employer permitted employees' extensive use of the Internet, email and other company equipment for their personal purposes, it disparately enforced its email policy against protected concerted activity.

Case #5: An employee union organizer led a delegation of union supporters into one of the employer's stores. The group handed the store manager a letter announcing of the formation of a union, together with a written list of demands regarding wages and working conditions. Simultaneously, other union members and supporters distributed union leaflets outside of the entrance. At the time of this event, the employer maintained two bulletin boards, one for official employer announcements and another for employee personal or general non-work-related matters. The employer had no written policy concerning the use of these bulletin boards. The next day, the main union supporter posted on the employee bulletin board the list of demands that had been given to the store manager, along with the union leaflet. The letter and leaflet were removed, yet other personal announcements remained. Thereafter, he noticed that all items that had been previously posted on the general employee bulletin board had been removed and employer materials were now posted there. The store manager informed the union organizer that employees were no longer allowed to post anything on the employee bulletin board. The NLRB concluded that the employer had an anti-union motive and that its actions were directly in response to the union activity. There was no disparate enforcement of a written company-wide policy, but an unwritten policy that was abruptly changed in response to union activities.

Conclusion: If an employer permits a union representing its employees to use the employer's email system, it can place reasonable limits on that use. If, however, an otherwise valid rule is promulgated or enforced for anti-union reasons, Register-Guard will not protect the employer's actions. The key is consistency. A neutral policy should be in place before any union activity or communication occurs. That reasonable policy should then be uniformly and consistently applied and enforced to avoid running afoul of the NLRA's protections for union and other concerted activities.

[Hat-tip: Manpower Employment Blawg]

Remember Reeves v. C.H. Robinson Worldwide from a few weeks ago. It allowed a plaintiff to proceed with a sexual harassment claim even though she was not the target of the alleged offensive conduct. The 6th Circuit has now also weighed in on this issue of second-hand harassment (sort of), in Bailey v. USF Holland, which we discussed Friday. (Please follow the link for the background of the Bailey case.)

The district court found "that a wide variety of racially motivated harassment occurred at the Nashville terminal." The district court concluded that "some of the conduct was, on its face, clearly racially motivated – such as the continued use of the terms 'boy,' 'hey boy,' 'damn it boy,' and variations thereof, in the face of the plaintiffs' requests not to be called those terms, and after the racial implications of those terms had been clearly explained at sensitivity training sessions. ..." The district court also noted that the “more overtly racially offensive behavior, such as the statement 'I can call him a low-down, dirty nigger and he won't mind' sheds light on the otherwise unclear motivations behind some of the other incidents."

Defendant argues that the effect of this overtly racial statement was minimal because it was made by an hourly employee and merely overheard by Smith. Defendant also suggests that the employee apologized to Smith and that the two of them were friends. This misses the point. The district court did not conclude that this statement itself created a hostile work environment; rather, it found that this statement "sheds light" on what could otherwise be seen as the ambiguous motivations behind some of the other examples of harassment"

In an atmosphere in which fliers depicting one of the plaintiffs as "the boy," nooses, and various other forms of "boy" graffiti were absent, the court might be inclined to believe that the plaintiffs were overreacting when their coworkers slipped the word "boy" into the conversation in more subtle ways. But in a work environment that included nooses, offensive flyers, "boy" graffiti, and other frankly racist behavior, the court concludes that, indeed, the plaintiffs were being baited by white employees in additional, more subtle ways.

Defendant is correct that "merely offensive" conduct does not establish a hostile work environment. ... But after reviewing the totality of the circumstances, the district court concluded: "[i]t is unlikely that, after Mr. Bailey and Mr. Smith had spent years complaining about the terms, a white employee could end a sentence to either plaintiff with 'damn it boy' and mean no offense."

This seems like a much more sensible treatment of second-hand harassment than what a different court did in the Reeves case. The 6th Circuit does not say that the second-hand harassment is actionable in and of itself. Instead, it takes the position that the evidence of second-hand harassment is admissible to shed light on the offensive nature of the work environment itself. In other words, while the use of the word "boy" could be innocuous, coupled with the fact that one of its utterers refers to one of the plaintiffs as "a low-down dirty nigger" strongly suggests that "boy" is anything but innocent. Thus, the "low-down dirty nigger" comment is not actionable as harassment in and of itself, but as evidence of the intent of the word "boy."

In Bailey v. USF Holland, the 6th Circuit had occasion to examine whether the employer's response to two African-American employees' claims of racial harassment was sufficiently prompt to defeat liability. This case provides a good case study from which companies can learn how, and how not, to respond to an employee's internal complaint.

Bailey and Smith, both African-American, were dock workers for USF Holland. Throughout their employment, their white coworkers constantly subjected them to the word "boy." When they would complain to their coworkers that the word "boy" is offensive when directed at a black man, they would sarcastically respond, "damn it boy." The more they complained, the more serious the harassment would become. It moved from words to vandalism, including "boy" spray painted on equipment, etched into walls, used to depict black men in cartoon drawings, and even written on a calendar on MLK Day. The harassment was not limited to the use of the word "boy." Bailey discovered a noose hanging in the dock area, and Smith overheard one white coworker telling another that he liked Smith because he could call him "a low-down dirty nigger" and Smith would not do anything about it.

Two years after Bailey and Smith started complaining to management about the offensive use of the word "boy," a new terminal manager and the VP of HR decided to conduct "sensitivity training" at the terminal. During that training it was explained that "boy" was offensive to African-Americans because it was used as a racial epithet during slavery. During the training, "several white employees voiced resistance to the idea that it was wrong to refer to African-American men as 'hey boy' or 'damn it boy.'" One white employee, Fred Connor, even told the terminal manager that "boy" was a "southern thing" and he would continue to use it regardless of company policy.

Not surprisingly, the behavior continued for several months after the training, as did Bailey's and Smith's complaints to management. At that time, USF brought in an outside lawyer who conducted a three-day investigation. He concluded that "while the environment likely is not racially hostile [huh?], it is certainly one in which more sensitive employees can feel uncomfortable." As a result, the VP of HR wrote to Bailey and Smith, telling them that the company could not discipline any employees because the use of "boy" was not racially motivated and that everyone had denied the other alleged conduct.

As the graffiti and harassment continued, USF hired a handwriting expert and terminated the offending employee, Fred Connor. He filed a union grievance and was reinstated. After his reinstatement, Connor reiterated to the terminal manager that "he would not adhere to the policy and would continue to use the word 'boy' as he saw fit."

Finally, in 2006, 4 years after Bailey's and Smith's first complaint and a year after they filed their lawsuit, USF installed 25 security cameras, which finally ended the graffiti.

At a bench trial, the district court judge awarded Bailey and Smith each $350,000 in compensatory damages.

On appeal, USF argued that it could not be liable for the harassment because it took "reasonable, prompt, and appropriate corrective action." The 6th Circuit disagreed:

Defendant cites examples of its corrective action, noting for example that it "consistently had a reasonable harassment policy," conducted employee meetings to respond to plaintiffs' complaints, and disciplined the employee responsible for the graffiti. The district court correctly rejected these actions as insufficient. A harassment policy itself means nothing without enforcement, and the persistent harassment plaintiffs received over an extended period of time caused the district court to conclude that the policy was not consistently enforced. Defendant conducted employee meetings, but plaintiffs' coworkers stated that they did not consider their use of "boy" to be offensive and insisted that they would continue to use it. Defendant discharged Connor once it discovered that he created the graffiti, but he was reinstated soon thereafter. USF Holland was unable to stop the graffiti until it installed security cameras – an act it did not take until after plaintiffs initiated this lawsuit.

Termination of the alleged harasser is not the be all and end all of corrective action. Usually courts do not second guess an employer's course of remedial action. Indeed, had the sensitivity training succeeded in ending the harassment, I doubt that Bailey and Smith would have prevailed. When, however, the offending employee tells the VP of HR during sensitive training that he will continue calling black employees "boy," and others offer similar resistance, a company cannot turn a blind eye and hope that everything will work out. By the time employees started being disciplined and security cameras were involved, it was "too little, too late."

The timeline in this case spanned nearly 4 years from the first complaint to the installation of the cameras. In a case such as this, 4 weeks might not even be quick enough of a response. The severity of the response (i.e., counseling, discipline, termination) can vary depending on the severity of the harassment, but the quickness of the response cannot. Companies that allow problems such as these to fester and continue by dragging their feet in investigating and remedying them do so at their own peril, as the $700,000 verdict in this case illustrates.

In my absence last week, I completely missed my blogiversary. It's been a little over a year now since I launched the Ohio Employer's Law Blog with my first post, The Song Remains the Same -- Has Burlington Northern Really Changed the Landscape of Retaliation Claims? A quick thank you to all of my subscribers, commenters, everyone who's linked to me, provided an idea for a post, and quoted me both online and in print, and to the more than 26,000 people who've visited. Without each of you, I highly doubt I would still be writing more than a year later.

And with that, on to the best of everything else I've read this week.

In Desert Palace v. Costa, the U.S. Supreme Court held that direct evidence of discrimination is not required to obtain a "mixed-motive" jury instruction. The HR Lawyer's Blog reports on a significant case out of the 8th Circuit this week that flat out disagrees with the Supreme Court. So much for stare decisis.

As someone who cannot get a lick of work done without music playing in the background, I was keenly interested in HR World's take on personal technology such as iPods in the office.

For similar personal reasons, I was also very interested in Guerilla HR's take on bad language in the workplace. For a good laugh, be sure to click through to the Cuss Control Academy.

The Business of Management asks if you have an "office spouse"?

Dan Schwartz at the Connecticut Employment Law Blog writes on the worth of companies that sell workplace posters.

The Evil HR Lady posts on the value of exit interviews.

Finally this week, The HR Capitalist gives one scenario of what can happen to a company when it tries to regulate the use of overtime.

The National Law Journal reports that "message boards in the workplace could be a troublesome new source of liability for employers." Many companies have policies that cover the use of traditional bulletin boards. What happens, however, if an employee posts on a company-owned message board that he wants to start a union? Can the company lawfully take action against that employee? What other liability risks do online message boards pose for employers?

DynCorp Inc. v. NLRB sets the standard for employer regulation of bulletin board use in the Sixth Circuit. Like many companies, DynCorp had a bulletin board in its employee cafeteria. Shortly after a union organizing campaign began, an employee posted a pro-union flyer on the bulletin board. A manager removed the flyer and threatened to discipline the employee who posted it. Shortly thereafter, the company designated the bulletin board "For DynCorp Business Use Only." DynCorp unsuccessfully argued that the bulletin board was for company use only and that the Company had consistently removed employee postings on the bulletin board in the past. The Court cited examples of other non-business related postings remaining on the bulletin board. Moreover, no employee had ever been disciplined, or even warned, for posting non-business related materials. Regardless of any policy, the employer's lack of consistency created a practice of allowing non-business related postings, and it was therefore unlawful to remove the pro-Union posting and threaten the employee.

As DynCorp illustrates, consistency is key. If a company want to limit online message boards to discussions of company business only, it must not only have a clear policy stating so, but it also must actively police the message board to prevent violations of the policy. A company cannot turn a blind eye to all sorts of non-troublesome non-business threads, but delete the first thread the pops up talking about a labor union. That selective enforcement is asking for trouble with the NLRB.

Liability risks do not end with the NLRA. Online message boards also present risks from employees who use them as a means to harass or defame a coworker, or post trade secrets and other sensitive confidential information. If a company is going to maintain an online message board, it should be incorporated into sexual harassment policies, technology use polices, and confidential information policies, so that employees understand that online malfeasance will not be treated any differently than any other workplace misconduct.

Of course, policing a message board is much more difficult, time consuming, and expensive than the traditional cork board hanging in a lunch room. That difficulty makes me wonder whether companies are just better off not having employer sponsored message boards in the first place.

The Cincinnati Enquirer writes that "anti-mommy bias persists. There's an assumption that once a woman becomes a mother, she won't be as competent at her job or as committed or dependable - without the employee ever getting the chance to prove herself." The article continues:

Mother's Day recognizes mothers for their dedication, resourcefulness and persistence. But some working mothers say that on the job, they're viewed in opposite terms. They say employers see them as less reliable, focused and committed than their co-workers, and weed them out of job interviews or bypass them for promotions.

The practice has been labeled maternal profiling, and it is the source of a growing body of discrimination lawsuits being filed against employers.

According to the Center for WorkLife Law at the University of California's Hastings College of Law, family-related discrimination cases increased by 400 percent from 1996 to 2005. Some workers sued because they were questioned about their marital status, family plans or child-care provisions during job interviews, then promptly dismissed. Other mothers say they were taken out of contention for jobs that required travel, long hours or physical labor.

Think what you want about parents in the workplace, but a new survey from Adecco found that 71 percent of working moms are likely to work late and respond to emails. That’s only two points below non-parents. However, 32 percent of workers would be less likely to ask working parents to stay late or answer emails after hours.

Nonetheless, 49 percent of moms believe their companies should do better at helping achieve work/life balance.

According to the survey:

• Do Moms Have It Better When It Comes to Access to Work/Life Balance?: Depends on who you ask! 60% of working moms think they have the same level of access to work/life benefits as non-parents. Less than half of non-parents (44%) agree with the statement and one in four (25%) non-parents think they have less access.
• Which is Harder to Manage?: According to working moms, managing career is a piece of cake next to managing family: 71% of working mothers find it more difficult to manage their family vs. career (29%).
• Career & Motherhood Can Go Hand-in-Hand: A majority of working mothers (59%) say becoming a mother has not impacted their career path, while 15% say its actually had negative impact on their career.

So, what's the answer? It mommy bias real, fiction, or somewhere in between? It's hard to ignore the realities of maternal profiling when companies are hit with multi-million dollar verdicts. At the same time, it is only a small minority or working moms (15%) who report that motherhood had a negative impact on their careers. At the end of the day, maternal profiling is real, but simply may not be as big of a problem as the Kohl's case makes it seem. Yet, 49% of moms still believe their companies should do better at helping them achieve work/life balance.

The takeaway for employers is that regardless of whether maternal profiling is as prevalent and widespread as some claim, it is still illegal sex discrimination. Separate and apart from the legalities of mommy bias, promoting a strong work/life balance is becoming increasingly important in the recruiting and retention of quality employees. Purposing screening out parents (moms and dads) from hiring or promotions needlessly removes a significant portion of the population of the workforce from a company. After all, today's young go-getter is tomorrow parent. Mommy tracking employees will result in a revolving door of younger, less qualified employees. And, it's illegal.

The Career Encouragement Blog has posted this week's Carnival of HR. Please take a few minutes out of your day to peruse the best of the of the HR blogosphere.

In White v. Fabiniak, Wal-Mart fired Carla White for threatening to "slap the piss" out of a co-worker, Stephanie Jeppe. Prior to the termination, White had used Wal-Mart's Open Door Policy to complain to her supervisor that Jeppe had been threatening her.

White was an at-will employee of Wal-Mart. At the start of her employment, Wal-Mart provided her an employee handbook that contained, among other provisions, an Open Door Policy. That policy provided:

If you have an idea or a problem, you can talk to your supervisor about it without fear of retaliation. Problems may be resolved faster if you go to your immediate supervisor first. However, if you feel your supervisor is the source of the problem, or if the problem has not been addressed satisfactorily, you can go to any level of management in the Company. But remember, while the Open Door promises that you will be heard, it cannot promise that your request will be granted or that your opinion will prevail.

White claimed that the open door policy created an implied contract between her and Wal-Mart, and terminating for using the policy violated that contract. The court of appeals disagreed:

The policy provides an avenue an employee may use in the event he or she has a work related concern, idea, or grievance. Within the context of the policy, therefore, Wal-Mart admits it will not terminate or otherwise punish an employee for choosing to share his or her ideas or problems with management. Read plainly, this is neither an implied or express promise of continued employment. Rather, it is merely an assurance that an employee can utilize the policy without concern of unfair reprisals on behalf of management or the company at large. ...

[W]e hold the plain meaning of the open door policy assured an employee he or she would not be retaliated against for utilizing it as a means to air his or her grievances. This does not imply the policy guaranteed an employee continuous employment if, for example, he or she breached a separate policy set forth in the manual in the course of utilizing the open door policy. ...

Nothing in the open door policy states that an aggrieved employee who decides to use the policy may utilize or threaten to utilize vigilante tactics if a particular supervisor does not handle the grievance in a manner the employee demands. Quite the contrary, the policy provides that, while an employee will assuredly be heard, an employee's view or opinion regarding the resolution of a problem will not always prevail.

Appellant does not specifically allege Chuba refused to hear her complaint, nor did she provide any evidence that her termination was retaliatory in nature. Appellant acknowledges, and the record demonstrates, she was fired for threatening Jeppe in violation of the workplace violence policy. Nothing in the record indicates Wal-Mart acted inappropriately in terminating appellant on this basis.

This opinion, however, may not be as pro-employer as it seems. It does not say that the employee handbook cannot create a contract, but merely that it does not in this case because Wal-Mart terminated White because she violated its workplace violence policy. The court did not find that White had no legal claim, but that Wal-Mart had a good reason to fire her. Thus, this opinion leaves the door open to the possibility that an employee can make a breach of contract claim if the employer does not have good cause for the termination.

Although unclear from the opinion, it is safe to assume that the handbook contained an at-will disclosure, such as: "This handbook is not a contract, express or implied, and does not guarantee employment for any specific period of time. Although we hope that your employment relationship with us will be long term, you are at all times an at-will employee, which means that either you or the company may terminate this relationship at any time, for any reason, with or without cause or notice." If that is the case, I fail to see how any employee could complain that the handbook creates an implied contract that the employer can breach, even if the employer admitted it fired an employee for using a handbook provision such as the open door policy.

Unless handbook disclaimers are to be rendered meaningless, employees cannot be permitted to bring breach of contract claims based on an employer's failure to follow a policy in the handbook. The claim must be based on some other recognized legal right, such as statutory retaliation or some public policy separate and apart from the handbook language itself.

One article that caught my eye last week while I was out was a piece by Tracy Coenen, on her Fraud Files Blog, about a scam that was uncovered in the Wisconsin prison system. It seems that under the prison's overtime policy, the guards figured out that they could call of sick for their own shift, but then pick up the next shift and collect time-and-a-half for overtime.

It appears that the Wisconsin prison system might be paying overtime when it is not otherwise required. Under the Fair Labor Standards Act, an employee is entitled to paid time-and-a-half for any hours in excess of 40 worked in a given work week. The key word is worked. Sick days are not days worked. Either are vacation days or paid holidays. In calculating the number of hours an employee has worked in a given week, you only look at the number of hours spent working. Now, there are a lot of variables to look at when determining whether an employee is working. But, for certain, sick days, holidays, vacations, and other paid days off are not time spent working.

Let's take as an example an employee who works Monday - Friday, 8 hours a day. That employee takes a paid day off on Monday, works 9 hours Tuesdays, and 8 hours each of Wednesday, Thursday, and Friday. At what rate should that employee be compensated for the extra hour worked on Tuesday - straight time or time-and-a-half? The answer is straight time. While the employee was paid for 41 hours that week, the employee only worked 33 hours. Thus, the employee did not work in excess of 40 hours in that work week.

Part of any wage and hour audit is a review of not just which employees are eligible for overtime, but the work rules under which overtime is calculated and paid. Depending on the size of your organization, thousands, tens of thousands, or even hundreds of thousands or millions of dollars could needlessly be paid to employees for overtime to which they may not be entitled.

After an exciting week in Tulsa, Oklahoma, I have returned. I hope everyone enjoyed some of the hits from the archives I ran last week in my absence. Before we get back to regular posting, let's take a look at some of what else we missed last week.

Recall that in Dewitt v. Proctor Hosp., the 7th Circuit permitted an associational disability discrimination claim to proceed based solely on evidence that the employment decision was made on the basis of increased medical costs. The Workplace Prof Blog reports that the 10th Circuit has followed suit, and permitted a family to bring a claim that they were fired because of healthcare costs associated with their son's illness.

The Pennsylvania Employment Law Blog provides a very thorough comparison of an employer's responsibilities under the FMLA and the ADA, with a helpful chart included.

Last week gave us two interesting posts on the improper use of workplace computers -- the Evil HR Lady on how to handle a termination for "extremely inappropriate web-site browsing", and The Word on Employment Law's John Phillips on potential corporate liability for an employee's use of company computers to store or transmit inappropriate images of children.

One more from the Evil HR Lady, on managing employees' expectations. To add my two cents, I think 90% of employment relations issues could be avoided simply by management having honest conversations with employees about the expectations of the job and the workplace - performance, production, conduct, rules, and policies should all be laid out up front (where possible, in a writing the receipt of which is signed by the employee) to avoid any confusion or disappointment down the road.

Kris Dunn, The HR Capitalist, writes about one company that decided that penalizing employees for smoking made for bad business and rescinded a wellness $100 penalty. Everyone should also check out Kris's new blog, Fistful of Talent. Kris describes it as a conversation on talent, which includes recruiting, in addition to everything you do with the talent once you've got it in the door.

"Farmer Brown has a problem. His cows like to type. " So starts Click Clack Moo, Cows That Type, one of my soon to be two year old daughter's favorite books. In Click Clack Moo, Farmer Brown's cows and hens decide that they need electric blankets to keep warm at night in the barn. They deliver their demand to Farmer Brown on notes typed by the cows on a typewriter. When Farmer Brown refuses their demands, they go on strike, withholding milk and eggs. Ultimately, in a deal brokered by the duck, Farmer Brown agrees to accept the cows' typewriter in exchange for electric blankets. The labor dispute ended, and the cows and hens went back to producing milk and eggs. The deal backfired on Farmer Brown, though, as Duck absconds with the typewriter and leverages it into a diving board for the pond.

Click Clack Moo teaches us some valuable lessons:

1. Fair Treatment: The best means to avoid collective action by your employees is to treat your employees fairly. The barn was cold, and the cows and hens perceived that they were being forced to work in intolerable conditions. When Farmer Brown refused even to consider any concessions, they went on strike. If you want your employees to work hard, not unionize, and not file lawsuits, treat them fairly. Maintain reasonable, even-handed work rules and policies. Apply them equally. Don't discriminate. There is no guarantee that you'll stay out of court, but if you end up there, you'll have a much easier time convincing a judge and a jury of the rightness of your decision if you are perceived as being fair, reasonable, and even-handed.
2. Litigation is an Answer, But Not Always the Best Answer: Even in employment cases, where there are so many emotions in play on both sides of the table, it is only the most frivolous of cases that cannot not be resolved at some dollar figure. It is the job of the employer, working with its attorney, to strike the right balance between the cost of litigation and the cost of settlement. Convictions often get in the way, and often times litigation and trial is the only means to an outcome. But, you should always keep an open mind towards a resolution.
3. Don't Go It Alone: When resolving any case, make sure all your loose ends are tied up in a tidy agreement. Farmer Brown missed this last point. A well drafted agreement that included Duck would have avoided the added expense of the diving board. If Farmer Brown had retained competent counsel, he could have potentially avoided the problem with Duck (who probably went to law school).

"Wage Wars: Workers are Winning Huge Overtime Lawsuits," graces the cover of this week's BusinessWeek magazine. It should serve as a harsh wake up call for all companies. The article cites recent huge wage and hour settlements and verdicts, including an $18 million settlement paid by Starbuck's and eight and nine figure jury verdicts against Wal-Mart. In fact, the article estimates that American companies have collectively paid over $1 billion to settle these types of claims over the past few years.

The sweatshops of the 1920s and 1930s that led to the passage of the Fair Labor Standards Act and its 40-hour workweek are virtually non-existent. Nonetheless, claims for unpaid overtime continue to rise, more than doubling in the federal courts from 2001 to 2006. Almost always, these cases are not the result of the intentional withholding of overtime premiums. Instead, they fall into two classes: off-the-clock pay claims and the misclassification of employees. The former concerns pay for working through lunch breaks, donning and doffing gear, and required travel time. Regarding the latter, employees fall into two basic classes for coverage by the FLSA, exempt and non-exempt. Companies and the employees themselves often mistakenly assume that white collar employees are exempt, and blue collar employees are not. Paying an employee a salary (as opposed to an hourly wage), however, is not enough to qualify an employee as exempt. The FLSA only provides an exemption if an employee meets the specific qualifications for the executive, administrative, professional, outside sales, or computer employee exemptions. These exemptions are highly fact specific, and wholly depend of the nature of the actual work performed, and not a job title. For example, merely labeling an employee as a manager or supervisor is not enough to qualify an employee for the executive exemption, unless that salaried employee customarily and regularly directs the work of two or more other employees, and has the authority to hire or fire. The other exemptions have similarly stringent requirements (click here for a copy of the federal regulations on these exemptions).

The question is not whether companies need to audit their workforces for wage and hour compliance, but whether they properly prioritize doing so before someone calls them on it. According to the BusinessWeek article: "While violations appear widespread, employees themselves rarely think to make wage and hour claims. Instead, they usually have it suggested to them by lawyers." It is immeasurably less expensive to get out in front of a potential problem and audit on the front-end instead of settling a claim on the back-end. The time for companies to get their hands around these confusing issues is now, and not when employees or their representatives start asking the difficult questions about how employees are classified and who is paid what.