www.fmglaw.com managing public employees in difficult times david a. cole, esq

www.fmglaw.comwww.fmglaw.com

Managing Public

Employees in Difficult Times

David A. Cole, Esq.


Employment Litigation Statistics


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


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


Number of Retaliation EEOC Charges

60000

65000

70000

75000

80000

85000

90000

95000

100000

2005

2006

2007

2008

2009

2010

2011


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


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.”


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


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.


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


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


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


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


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



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



Understanding the At-Will Employment Rule


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


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


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”


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


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


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


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


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


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


Understanding How Discrimination is “Proven”


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




– Did you follow policies?

• Employee handbook

• Discipline rules

• Progressive discipline

• Past practice




– Bad Behavior by Management

• Language

• Jokes

• Emails

• It’s rarely about the employee




– Performance evaluations and documentation

• Lack of documentation

• Poor documentation

• Email documentation

• Favorable reviews lose cases every time


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


Building Terminations that Minimize Risks

• Effective performance evaluations

• Accurate and thorough documentation of issues before termination

• Follow a termination checklist


Effective Evaluations

• Regularly scheduled

• Written

• Accurate, specific

• Feedback from employee

• Follow-up


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


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!


Evaluations That Work

• Quantify Measurements

• New Employee

– Evaluate Basic Skills and Performance of Job Requirements

• Senior Employee

– Set Particular Expectations & Goals


Discipline Strategies

• Potential juror survey:

The employer is negligent if it does not document an employee’s performance?

Yes 91%

No 9%


Effective Evaluations


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


Documentation that Leads to Problems

• Never in handwriting

• Never by email

• Never let employee prepare own statement


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


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."



"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."



"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."


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


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: __________________


Be Consistent In Discipline:Inconsistent = Discrimination

• Treat Like Cases in a Like Manner

• Follow Written Policies

• Be Able to Explain Apparent Discrepancies


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


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


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


Due Process Rights

for Public Employees


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


Where do the rights come from?

• Statutes

• Regulations

• Ordinances

• Handbooks

• De facto representations


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


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.


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


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


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


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.


Other Current Issues Facing Public Employers

• Reductions in Force

• Furloughs

• Social Media

• Technology and Right to Privacy

• Georgia E-Verify Rules


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”


Common Problems in RIFs

• One job elimination

• Job elimination within a group

• Job eliminations + some transfers

• Selective “non-renewals”


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


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



• Reduce criteria for selection to writing

– Base it on objective criteria as much as possible

– Entire facility or department

– Seniority

– Skill level

– Past evaluations



• 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)


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


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


Consider Alternatives to RIFs

• Reduced work week

• Work sharing

• Voluntary leaves of absence

• Exit incentive programs

• Furloughs


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)



• 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


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



• 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


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


Any questions?

www.fmglaw.com managing public employees in difficult times david a. cole, esq

Documents

employment rule slide

nera economic consulting

types of retaliation

forms of retaliation

employment lawsuits

flsa settlement trends

flsa violation

hour cases