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THE LAW INTODAY’S WORK PLACE

March 21, 2006

FINANCIAL EXECUTIVESINTERNATIONAL

ENERGY CENTRE • 1100 POYDRAS ST. SUITE 2700 • NEW ORLEANS, LA 70163 (504) 585-3802

koretzky@carverdarden.com

CARVER, DARDEN,KORETZKY, TESSIER, FINN,BLOSSMAN & AREAUX LLC

I. Harold Koretzky

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FEDERAL LAW PROHIBITS DISCRIMINATION/ HARASSMENT/RETALIATION BASED ON:

! ADA: disability! ADEA: age 40 or older (OWBPA)! Bankruptcy - Garnishment Status! COBRA - ERISA - HIPAA! Fair Credit Reporting Act (FCRA)! Fair Labor Standards Act (FLSA)! Family Medical Leave Status (FMLA)! Gender, Pregnancy, Race, Religion (Title VII)! Military - Veteran Status (USERRA) - OFCCP! National Origin/Citizenship (IRCA)! Plant Closure/Mass Lay Off (WARN)! Polygraph - Safety (OSHA) - Whistleblowing (Sarbanes

- Oxley)! Protected Concerted Activity (NLRA)

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A disability is:1) A physical or mental impairment that substantially

limits one or more major life activities; (includes intermittent but not temporary impairments)

2) Having a record of such impairment (even if misclassified); or

3) Being regarded as having such an impairment:a) treated as but does not substantially

limit;b) substantially limits only as result of

attitudes of others; or c) no impairment but treated as

substantially limiting.

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OVERCOMING CLAIMS OF “PRETEXT”

● In 2000, the Supreme Court held that a plaintiff

without direct evidence of discrimination may avoid dismissal by showing the stated reason to be false (i.e., a “pretext”).

● Ensure that the reasons given for an employment action are the real reasons and are consistently stated.

Beware of “sugar coating” or giving reasons without checking with decision makers – avoid shifting/changing reasons.

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RECORD KEEPING IN LIGHT OF JONES ● In 2004, the Supreme Court lengthened to four years the time

an employee has to file suit for post-hire race (or national origin) discrimination under §1981 of the Civil Rights Act of 1871.

● Prior to Jones, Louisiana’s one year prescriptive period applied.

● Jones provides plaintiffs a way to sue without filing an EEOC charge.

“Failure to hire” is still governed by the one-year prescriptive period.

● Employers may now have to defend against claims that are four years old.

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CITIZENSHIP V. NATIONAL ORIGIN

● Under the Immigration Reform and Control of 1986 (“IRCA”), employers are prohibited from knowingly hiring or continuing to employ aliens not authorized to work.

● IRCA prohibits discrimination due to “citizenship status” if the person is either a U.S. citizen or legal resident.

Aliens with applications pending are considered “legal.”

● Employers are permitted to give preference in hiring to a citizen over an equally qualified alien.

● Title VII prohibits discrimination against “any individual” (even undocumented aliens) due to “national origin” - geographic birthplace of person or ancestor.

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POST-KATRINA SUSPENSION OF I-9’s

● 9/6/05 - Department of Homeland Security: for next 45 days, civil sanctions not applicable for hiring employees lacking I-9 required documentation.

● Employers required to have employees complete I-9’s, but not required to review employees’ documents not readily available.

● 10/21/05 - employers to complete I-9’s for recently hired employees unable to provide documentation (but must specify steps taken to verify).

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The Worker Adjustment and Retraining Notification (“WARN”) Act:

● Employers with 100 or more employees (or 4,000 hours per week) must provide at least 60 calendar days advance written notice of a plant closing affecting 50 employees at a single site of employment; a mass layoff is covered if during any 30 day period one-third of the workforce (50 employees) experiences a six-month layoff or a 50% reduction in work.

● If the direct result of a natural disaster (such as a hurricane), employers are obligated to give as much notice as possible; employers may send notice to the employees’ last known addresses, even if their homes are destroyed, as an indication of good faith (if available information is limited).

● If unable to send individual notices (e.g. destroyed or inaccessible records), employer should show good faith by either posting notices at the worksite or web cite (including a statement that individual notice is not possible) and/or by providing notice in a newspaper.

● If no notice, employer may still not be liable (per regs).

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PROTECTED CONCERTED ACTIVITY

Although the National Labor Relations Act ("NLRA") is usually associated with union activity, certain activities of non-union employees also are protected. Section 7 of the NLRA provides:

“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid and protection.”

The critical inquiry: whether the individual acted solely on his/her own behalf (“his own pay”) or with or on behalf of others to further group goals.

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Various States, Counties/Parishes and/or Municipalities provide for causes of action and/or

prohibit discrimination/retaliation based upon:

! Assault - Battery - Defamation - False Arrest -Intentional Infliction of Emotional Harm -Loss of Consortium - Malicious Prosecution -Negligent Hire/Retention

! Breach of Contract! Genetic testing! Political activity/opinion! Sexual orientation ! Sickle cell anemia! Smoking! Wage Payment! Whistleblowing! Worker’s compensation claim

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CREATING AN EMPLOYMENT CONTRACT (LA)

● Offer letters/verbal communications may create a contract for a term.

● In Saacks v. Mohawk Carpet Corp., 855 So.2d 359 (La. App. 4 Cir. 2003), the letter (dated June 19, 2000) offered employment as follows:

COMPENSATION, You will receive a guaranteed salary of $54,000/year through December 2001.

● Employer argued the offer letter merely guaranteed a rate of pay for 18 months, not a term of employment.

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CREATING AN EMPLOYMENT CONTRACT (LA) (cont'd)

● Plaintiff signed an application for employment acknowledging she had “the right to terminate [her] employment at any time with or without notice, with or without cause, and that the Company has the similar right.”

● Nevertheless, the trial court held (and the appellate court affirmed) that a contract for a term had been created, and the employer was liable for the seven months remaining in the 18-month term.

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WHAT CAN EMPLOYERS DO?

● Avoid references to “guaranteed” employment and make it clear that salary/wages are paid at a certain rate rather than for a certain amount of time:

“You will be paid at the rate of $6,000 per month.”

NOT: “You will paid $72,000 for the calendar year.”

● Clarify in writing that nothing in the letter should be construed to create a term of employment or to alter the understanding that employment will be “at will.”

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WHAT CAN EMPLOYERS DO? (cont'd)

●Clarify that the “at will” employment may only be modified by a written agreement executed by the chief executive officer.

●Even if created, an employer still is not bound to retain (or pay) if there is a “serious ground of complaint” or “cause” for termination. La. C.C. art. 2749.

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COVENANTS NOT TO COMPETE● La. R.S. 23:921 authorizes agreements prohibiting

employees "from carrying on or engaging in" a similar business and/or from soliciting customers of the business, for a two year period within defined geographical areas (parishes or municipalities).

● In June, 2001, the LA Supreme Court held that an employee could be prohibited from carrying on his or her own competing business, but not from working for a competitor as an employee.

● Effective August 15, 2003, the legislature clarified that businesses may contract to prevent employees from competing “regardless of whether or not that person is an owner or equity interest holder of that competing business."

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LOUISIANA WAGE PAYMENT STATUTE

● Employees must be paid all “monies” due by the next regular payday or within 15 days of discharge or resignation, whichever occurs first.

● Prior to 2001, the Louisiana wage payment statute required payment within three days of discharge.

● Payment may be made in the “customary” manner or by mail.

● Vacation pay is “monies” due if earned/accrued at the time of separation.

● Employer must pay the undisputed portion.

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LOUISIANA WAGE PAYMENT STATUTE (cont'd)

● An employer is liable for penalty wages for each day (up to 90 days), unless employer acted in good faith.

● Employee may also recover his/her reasonable attorney’s fees even if employer acted in good faith.

● Claims are subject to a three year prescriptive period.

● In Louisiana’s 4th Circuit, “future wages” constitute wages “due” in order to recover penalty wages and attorney’s fees; the 2nd, 3rd and 5th circuits disagree.

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Defining sexual harassment:

! Unwelcome sexual advances

! Requests for sexual favors

! Other verbal or physical conduct of a sexual nature

Types of sexual harassment:

! Quid pro quo - sexual “blackmail”

! Hostile environment - pervasive unwelcome sexual conduct, verbal or physical, which “poisons” the working environment.

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Such conduct is unacceptable when:

! Submission to the conduct is explicitly or implicitly made a condition of employment;

! Submission or rejection of the conduct is used as a basis for employment decisions; or

! The conduct is so pervasive as to interfere with an employee’s work performance or create a hostile, offensive work environment.

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Whose Conduct?! Supervisors, co-workers and non-employee

third parties, such as contract personnel, vendors or consumers of employer’s services

! Both males and females, including both heterosexual and homosexual conduct andrelationships

! Both conduct of a sexual nature(inappropriate touching or lewd comments) and gender-based conduct which is not necessarily sexual in nature (saying females belong at home, assigning demeaning tasks to female employees, basing assignments on gender- based considerations or use of unacceptable terms “girls,” “tomatoes,” “sweetheart,” and “honey”)

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The response to harassment needs to be prompt and effective, including:

! a timely and thorough investigation

! appropriate remedial action

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Why harassment or discrimination in the workplace is unacceptable?

! Adverse impact on employee morale and productivity

! Far reaching personal, family, social, professional, business, community and reputation consequences

! Costly, embarrassing and awkward for employers, supervisors, employees and non-employees

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Does an employee who is harassed by his or her supervisor have any

responsibilities?

! Yes. The employee must take reasonable steps to avoid harm from the harassment. Usually, the employee will exercise this responsibility by using the employer’s complaint procedure.

Is an employer legally responsible for its supervisor’s harassment if the employee failed to use the employer’s complaint procedure?

! No, unless the harassment resulted in a tangible employment action or unless it was reasonable for the employee not to complain to management. (e.g., futility or a legitimate fear of retaliation).

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Dave, a department manager, comes to Bill’s office (he's the General Manager) and tells Bill that while trying to get some business information which had been e-mailed to Jane, a valued employee, he had opened some correspondence between Jane and Jerry (a relatively new employee). Dave then gives Bill the following print-outs:

To: Jerry From: Jane

I had a wonderful time working late with you last night. The evenings that we work late together are very special to me. You know, you really should take me out on a real date.

To: Jane From Jerry

Jane, I wish you would stop. At first I was flattered by your compliments, your cards and your lunch invitations. However, your interest in me over the past several months has made me feel very uncomfortable. My wife is six months pregnant and has started to notice that I seem tense when she asks me about work. I am nervous about your attention, and I am finding it difficult to do my job.

Neither Jane nor Jerry have had any performance issues. Both are well respected. Jerry has not complained regarding Jane's conduct nor have there been any reports of a problem between Jane and Jerry. Indeed, the opposite is true. Leon has observed Jane and Jerry regularly eating lunch together and appearing to enjoy each other's company.

What should Bill do, if anything?

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Mary, the office administrator, found an anonymous note on her desk when she arrived at work. It stated that John, a supervisor, was a "pervert" and something had to be done before someone got hurt.

Mary immediately went to John and asked him what this was all about. He said he had no idea. He was aware of the policy against sexual harassment and was very careful how he treated the women that worked for him. He added, however, that he found the revealing clothing worn by the women in the office to be a distraction and a potential source for future problems.

What should Mary do, if anything?

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One day, while sitting in the break room, Mary, a secretary (recently divorced), is talking to Ralph, a supervisor in another department. Mary and Ralph have been friends for many years. Mary mentions to Ralph that Charlie, a co-worker of Mary's, has been “bothering” her.

Ralph asks, “How has he been bothering you?”

Mary responds, “It's hard to explain. He stands closer than he needs to. And sometimes he will put his hand on my shoulder when I am sitting at my desk and he is talking to me. The way he looks at me, I feel like he is undressing me with his eyes.”

Ralph asks, “Have you talked to your supervisor about this.”

Mary says, “No.” Ralph says, “Would you like for me to talk to your supervisor?” Mary says, “I really don't want to make a big deal out of this, and I don't want to get Charlie in trouble. I'm sure he'll stop when he realizes that I'm not interested in him. Just forget I ever mentioned it.”

Ralph says, “If that's what you want, could you pass me another donut?”

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Those Dirty Four Letter Words:

1) C _ _ _

2) D _ _ _

3) F _ _ _

4) K _ _ _

5) M _ _ _

6) S _ _ _

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THE LAW INTODAY’S WORK PLACE

March 21, 2006

FINANCIAL EXECUTIVESINTERNATIONAL

ENERGY CENTRE • 1100 POYDRAS ST. SUITE 2700 • NEW ORLEANS, LA 70163 (504) 585-3802

koretzky@carverdarden.com

CARVER, DARDEN,KORETZKY, TESSIER, FINN,BLOSSMAN & AREAUX LLC

I. Harold Koretzky