gc summit presentation
TRANSCRIPT
Doug BesmanDirector, Corporate Claims
and LitigationNestle, USA
Robert A. CutbirthPartner, Tucker Ellis
San Francisco
Identifying, Responding, and Defending Current Risks to Employers - 2016
Federal “Blacklisting” Law
• Fair Pay and Safe Workplaces Executive Order 13673– Violation Reporting - 10/25/16!! Paycheck Changes – 1/1/17
• Current and Bidding Contractors (> $500k)
• Requires Paycheck, Independent Contractor, post-Dispute Resolution, and other “Disclosures” and Changes
• Requires assessment and disclosure of 14 federal labor and employment law violations occurred within the three prior years– Wage and Hour/Safety and Health, Collective Bargaining, Family and
Medical Leave, and Civil Rights– The Final Rule and DOL Final Guidance broadly interpret the “violation” –
effectively, all proceedings must be reported at least every six months unless reversed or vacated.
Hiring• Job Application Forms
– Age/Criminal/Credit Checks• Drug testing• Pre-Employment Physicals• Job Offer Letters/Commission Agreements
Consequences Easy target for class action litigation
“Documents” Prove Their CaseStatutes/Regulations Apply
Damages include wages, and attorneys’ fees
TrainingCalifornia (Req’d every two years for supervisors) – now requires prevention of “abusive” conduct in the workplace; new reporting/action standards
New Jersey (not statutory, but Supreme Court noted importance of sexual harassment training to all employees to avoid liability)
OhioThe OAC states “prevention is the best tool for the elimination of sexual harassment. An employer should take all steps necessary to prevent sexual harassment from occurring, such as affirmatively raising the subject, expressing strong disapproval, developing appropriate sanctions, informing employees of their right to raise and how to raise the issue of harassment…and developing methods to sensitize all concerned.”
Consequences Depends, but it may negate otherwise viable defenses; failure to train in face of known obligation may create a punitive damage exposure
Short and Long-Term Leaves
• FMLA/State Leave Laws – Designation Choices and Failures of Destination
• Minimum paid sick days (California, NJ, MY, RI)– Now cities (S.F. – 6 weeks fully paid/NYC – 12 weeks)
• Pregnancy Leaves (Consecutive vs. Concurrent)• Disability (ADA Informational Rights vs. FMLA Limits)• Other leaves (school, organ donation, domestic violence)
Consequences Litigation Risks – Individual and Class Action Employee Management Risks Upon Workplace Return
FLSA – Meal and Rest Breaks• New FLSA Standards for Exempt/Non-Exempt
– 12/31/16 -- $913/week + predominant (we have separate guidance)• New City/County “Minimum Wages”
• Meal And Rest Breaks
• Employee Expense Reimbursement
Consequences• Class Action & Individual Exposures• Unpaid Wage, Penalty, and Attorneys’ Fees
Uniforms, “Bag Checks,” and Record Keeping
• Retailers – “Bag Checks” • Manufacturers/Product Handlers –
Uniform/Safety Equipment• All - Time Sheet Approvals
Tyson Foods, Inc. v. Bouaphakeo (S.Ct. 2016)Record Keeping and Burden of Proof Changes
Consequences Overtime/Unpaid Wage Penalties/Attorneys’ Fees Changes in Business Practices
Joint Employers - Independent Contractors• New laws stating that temporary employee companies create “joint”
employer situations– Addresses wage and hour and benefit obligations
• New laws/standards making it harder to classify individuals as “independent contractors”– And not just in California; Kansas and North Carolina– Higher “wage” floors; stricter standards on “independence”
Consequences Taxes, penalties, designations on websites Unpaid Wages – Under All Laws Audits on Broader Issues by Regulators
“Fair Pay” and PayChecks/Check Stubs• New laws specifically prohibit a policy against pay disclosure by
employees – “Fair Pay Acts”Consequences: NLRA or Discrimination Complaint
• “Blacklisting” Exec. Order’s new Paycheck Disclosure Rules/ Many States’ paycheck disclosure laws
• Even with national payroll vendors, you still have to be careful, and you might not have indemnity from the vendor
– Correct Corporate Address/Start and End Dates– Hours-Rate-Pay/Deductions
Consequences: Class Action Exposures - “per pay period” Penalties, attorney’s fees. May not get defense/indemnity from vendor.
Dispute Resolution Provisions• Where do you want the dispute resolved?
– Jurisdiction• Usually cannot avoid the employee’s state
– Arbitration• May have to create “due process” and employer-paid arbitration clauses – Federal Contractors may be barred
– Class action/representative action waivers• Unenforceable – Ill., Wisc., Ind. (per D.R. Horton)• Enforceable – Elsewhere … But, expect more litigation given D.R. Horton
and NLRA issues
Additional Considerations: No longer faster, cheaper No right of appeal. Not a “public” proceeding, but now rarely “confidential”
Non-Compete/Confidentiality Clauses
• Some states bar “noncompetition” agreements for employees and, often independent contractors
– California, North Dakota, Oklahoma– But, all bar improper and Employee’s or Former Employee’s use of
“Confidential Information”• What is “Confidential Information”?
• Other states, like Ohio, allow reasonable non-competes: (i) no greater than required to protect employer’s legitimate business interest, (ii) does not impose undue hardship on employee, and (iii) not injurious to the public.
Consequences: Overly broad can result in the clauses being voided, and negate any protection
And, Just Because
• Forms/Agreements/Websites– Multiple Languages– Clarity– Stand the Test of Time
• Conflicts with Employees in the Defense of Claims– Fear of Personal Liability/Actually Named in the Complaint– Offering/Withdrawal of a Defense or Indemnity– Differences in Current and Former Employees
This presentation is not intended to give legal or regulatory advice. The information presented in this presentation is for preliminary information purposes only; it is not intended to be a complete description of all legal risks or exposures, or potential insurance solutions. Any coverage actually afforded by potential policies described herein is subject to, and governed by, the terms and conditions of each policy that may be issued, with different insurers providing different coverage terms.
Robert A. Cutbirth, PartnerOne Market Plaza, Steuart Tower, Suite 700San Francisco, CA [email protected]
QUESTIONS?Douglas Besman, Senior Counsel, Head of LitigationNestle USA, Inc.30000 Bainbridge RoadSolon, OH [email protected]