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Employer Liability for Mobile Devices and Continuous Connectivity
Avoiding Legal Pitfalls: Wage and Hour, Harassment and Personal Injury Claims
presents
Today's panel features:Alexander J. Passantino, Partner, Jackson Lewis, Reston, Va.
Daniel J. McCoy, Partner, Fenwick & West, Mountain View, Calif.Lee Schreter, Shareholder, Littler Mendelson, Atlanta
Tuesday, September 15, 2009
The conference begins at:1 pm Eastern12 pm Central
11 am Mountain10 am Pacific
The audio portion of this conference will be accessible by telephone only. Please refer to the dial in instructions emailed to registrants to access the audio portion of the conference.
A Live 90-Minute Audio Conference with Interactive Q&A
Employer Liability for Mobile Devices and Constant
Connectivity
Sponsored by the Legal Publishing Group of Strafford Publications
Sponsored by the Legal Publishing Group of Strafford Publications
September 15, 2009
Avoiding Legal Pitfalls: Wage and Hour, Harassment and Personal Injury Claims
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Speakers
Alexander J. Passantino, Esq.Jackson Lewis LLPWashington D.C. Region
Lisa A. Schreter, Esq.Littler Mendelson, P.C.
Atlanta, [email protected]
www.littler.com
Daniel J. McCoy, Esq.Fenwick & West LLP
Mountain View, [email protected]
www.fenwick.com
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Cases & Settlements
An assistant on Oprah claimed $32,000 of overtime in less than three months
A recently-filed lawsuit alleges that employees were issued smartphones and were required to review and respond to communications (telephone calls, conference calls, emails and text messages) from other employees at all hours. The total additional time employees spent working
was up to 15 hours
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Suffer or Permit
The FLSA requires employers to pay their non-exempt employees at least the minimum wage for all time spent working
The FLSA defines the term “employ” as to “suffer or permit to work.”
Suffer or permit to work means that if an employer requires or allows employees to work, they are employed and the time spent is likely to be hours worked
Time spent performing work not requested by the employer, but still allowed, is generally hours worked the employer knows or has reason to believe that the
employee is continuing to work and the employer is benefiting from the work being done.
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Management Control
In general, “it is the duty of the management to exercise its control and see that the work is not performed if it does not want it to be performed. It cannot sit back and accept the benefits without compensating for them. The mere promulgation of a rule against such work is not enough.”
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De Minimis Rule
In recording working time, insubstantial or insignificant periods of time outside the scheduled working hours that cannot practically be precisely recorded may be disregarded.
Courts have held that such periods of time are de minimis (minimal). The rule typically applies where a few seconds or minutes of work
are involved and where the failure to count such time is due to considerations justified by workplace realities.
An employer may not arbitrarily fail to count as hours worked any part, however small, of the employee’s fixed or regular working time. The DOL’s enforcement manual makes clear that, where an employer
fails to pay an employee for any part of the employee’s fixed or regular working time, however small, it would be considered a violation of the FLSA
What about cumulative effect of multiple de minimis periods of time?
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Portal-to-Portal Act/Principal Activity
Portal-to-Portal Act excludes from “hours worked” time spent traveling “to and from the actual place of performance of the principal activity or activities which such employee is employed to perform either prior to the time on any particular workday at which such employee commences, or subsequent to the time on any particular workday at which he ceases, such principal activity or activities.”
Employer is not liable to pay wages (overtime or otherwise) for “activities which are preliminary to or postliminary to said principal activity or activities”
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Continuous Workday
According to the Supreme Court, “during a continuous workday, any walking time that occurs after the beginning of the employee’s first principal activity and before the end of the employee’s last principal activity is excluded from the scope of the [Portal Act], and as a result is covered by the FLSA. ”
If a nonexempt employee starts her day at 6 a.m. by using her laptop and stops working at 9 p.m., the last time she uses her laptop, under the continuous workday rule she generally must be paid for the entire time, except for breaks that are at least 30 consecutive minutes
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Recordkeeping
Under the FLSA, employers are required to keep the following information: Employee's full name, social security number, address, birth date (if
younger than 19), and sex. Employee’s occupation. Time and day of week when employee's workweek begins. Hours worked each day and total hours worked each workweek. Basis on which employee's wages are paid (e.g., "$9 per hour", "$440
a week", "piecework") and the employee’s regular hourly pay rate. Total daily or weekly straight-time earnings and total overtime earnings
for the workweek. All additions to or deductions from the employee's wages and the total
wages paid each pay period. Date of payment and the pay period covered by the payment.
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Developing a Wage-Hour Compliance Program Prevents compliance issues Uncovers compliance issues before litigation
and retain maximum flexibility to fix issues consistent with business operations
Develops evidentiary record to establish good faith defenses
Ensures that employees are paid correctly
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FLSA Good Faith Defenses
Portal-to-Portal Act Section 10: Complete bar to monetary liability Employer acted in good faith in reliance on a written regulation,
order, ruling, approval or interpretation of the Wage & Hour Administrator
Portal-to-Portal Act Section 11: Defense to liquidated damages Employer acted in good faith and had reasonable grounds
for believing that it was not in violation
Third year of back wages for willful violations
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Components of a Wage-Hour Compliance Program
1. Assessment2. Policies & Procedures3. Implementing Change4. Complaint Process5. Training6. Technology7. Maintaining Compliance
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Assess Wage-Hour Practices
Time & Attendance System Supervisory edits Automatic meal period deductions Rounding
Payroll Programming Overtime calculation formulas Compensation included in in regular rate Deductions from wages (state law, salary basis) Paychecks below minimum wage
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Assess Wage-Hour Practices
Classifications Review documents and interview employees Update job descriptions Prepare legal opinion memoranda
Other State Law Issues Meal and rest breaks Day of rest, holidays Reporting pay, split-shift pay Paycheck issues: method, frequency, disclosures Final wages
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The Assessment Process
Identify internal and external resources Consider strategic issues
Attorney involvement Public disclosure obligations (SOX) Back wages and other remedial measures
Plan/design the assessment Identify topics for review Develop assessment protocols
Conduct and document Implement remedial measures
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Benefits of Written Policies and Procedures Creates culture of compliance Consistent standards Eliminates workplace myths
and misunderstandings Provides basis for discipline
and termination of employees
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Key Wage-Hour Policies
Work Time Policy Training/meeting time Travel time On-call time Volunteer activities
Payroll Integrity Overtime Meals and Rest Periods Vacation
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Written Procedures
Time adjustments Paycheck method, frequency,
disclosures Earnings and deduction codes
Designate earnings included in regular rate
Prohibit deductions from exempt wages that violate salary basis
Classification of employees Payment of final wages
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Resolving Compliance Issues
An employer has three options to resolve an uncovered compliance issue: Focus on compliance going forward Future compliance and payment of back wages Future compliance and payment of back wages
in cooperation with federal and state DOLs
The employer should consider its preferred approach before beginning a wage-hour assessment
Doing nothing is not an option
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Future Compliance
Reclassification Job restructuring Correcting regular rate issues Payroll system reprogramming Changes to policies and procedures
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Effective Complaint Process
Allows employer to uncover and correct issues before litigation Also required for safe harbor provision of FLSA salary basis test
Treat wage-hour complaints like other workplace complaints Use existing complaint processes and mechanisms, including
ethics or compliance hotline (1-800 #)
Apply same standards Well publicized, with multiple avenues for complaints
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Investigation & Resolution
Follow through on complaints Written investigation procedures Assign accountability so complaints do not fall through the
cracks
Ensure confidentiality to extent possible Investigate promptly and thoroughly Fix problems promptly, and provide closure to
complaining employee Failure to resolve complaints could lead to “willful”
violations
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Is Training Worth the Cost?
Most employees don’t know the basic rules or understand them
Just 20 minutes of training could prevent unintentional wage-hour violations
If you want your employees to do the right thing, you must train them – and not just managers
Training gives your employees the tools they need to become compliance allies
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When to Train
Employee orientation New manager training When there are new legal developments
or policy changes At least every 2 years, but more often
for highly specialized compensation jobs
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Leveraging Technology
Future wage-hour exposure can be minimized through leveraging technological innovation
Three key uses for technologyAutomated time, task and payroll systemsAuditsWeb-based training
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Time, Task and Payroll Systems
Automated and integrated time, attendance and payroll systems can reduce wage-hour compliance issues More accurate time records More likely that employees will record all hours worked More difficult for managers to shave hours
Example: Electronic badge scanned upon entering and exiting
link to time clock to confirm that employee clocks in and out in timely manner generate email to confirm no work done during gap if necessary, escalate to supervisor
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Web-Based Training
Reach large, geographically-dispersed workforces
Customizable Uniformity among employees Proof training was completed Content of training can be duplicated
for evidentiary purposes
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Maintaining Compliance
Perhaps the most important component of a comprehensive wage-hour compliance program
Efforts to achieve initial compliance wasted without mechanism to maintain compliance in the future
Employers should use:Employee acknowledgmentsEmployer audits
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Legal Risks
Vicarious Liability Employee acting within scope of employment Employee using device for benefit of employerGenerally, employer responsible for foreseeable harm
Workers’ Compensation Blackberry Thumb Cellphone Elbow Blackberry Addiction
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Cases and Settlements
$500,000 settlement when employee killed motorcyclist while employee distracted on cellphone
$21 million verdict in Miami when employee caused accident while on cellphone
$5.2 million for accident caused by employee making work-related call
Northern Virginia case suggested employers can be liable even if phone calling not within scope of employment
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Establishing and Implementing Policies Know and consider the requirements of your business Set a clear policy against talking (with or without a hands-free
device) or texting while driving require phones to be turned off while driving remind employees that they are not expected to make calls while
driving. some employers have gone so far as to ban cellphones from
work If talking ban is not possible, may consider more specific
guidelines, such as: Pulling over when making a call Dialing when the car is not moving Using a hands-free device
Require an employee to sign the policy
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Additional Issues
Educate managers and supervisors on the policy and ensure that they are not causingviolations of the policy
Ensure that employee policies or practices do not require employees to immediately answer phones, e-mails, or text messages
Enforce violations of company policy
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Protecting Confidential Information
Establish, and adhere to, clear policies regarding protection and permissible use of company – issued confidential data
Encryption protocols should extend to company-issued mobile devices and personal devices/systems that are used for work
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Best Practices Upon Separation
Retrieve company-issued devices immediately
If suspicious of foul play, image hard drives before re-circulation and retain email
Examine server/database logs for suspicious access/downloads/data queries/copying
Have employee certify in writing the return of all equipment and data (incl. from home systems)
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Protecting Private Personnel Information Mobile devices inherently increase the risk of loss or
theft of private personnel data When loss or theft occurs, Step 1- use common sense:
Notify employees promptly Take proactive measures to head off identity theft (e.g. offer to
pay for credit reports)
Step 2 – evaluate state and/or federal reporting obligations Particularly important where employee health/medical
information is lost or stolen.
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Monitoring of Electronic Data
Why Do It? The reasons include the need for employer to learn about and stop/mitigate: Misuse of confidential information
Disloyalty
Other employee misconduct (e.g. harassment, child porn)
Productivity loss based on excessive personal use during work
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Monitoring of Electronic Data
Primary Legal Risks of Monitoring: Constitutional and/or Common Law Invasion of Privacy Electronic Communications Privacy Act (ECPA) Violations
Generally, employers can avoid liability with clear written policies that: Cover all company devices (incl. PDAs, memory sticks) Convey that employees have no expectation of privacy and give notice
that employer may review/monitor without notice
Practices should conform to and be consistent with policies Avoid what occurred in Quon v. Arch Wireless (9th Cir, 2008) (summary
attached)
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Monitoring of Electronic Data
Right to monitor personal email and social networking pages accessed through company devices is less clear: See Van Alstyne v. Electronic Scriptorium, Ltd., (9th
Circuit 2009) See also Pietrylo v. Hillstone Restaurant Group (NJ
Fed. Dist. Ct. 2009) (summary attached) Evolving nature of the case law on this issue amplifies
need for clear policies re: monitoring and review.