Saturday May 26, 2018

Landmark Supreme Court ruling gives HR a powerful tool to prevent pay lawsuits

Employers everywhere will likely rush to get their employees to sign the type of employment agreement the High Court just ruled has great power to protect businesses from costly wage-and-hour lawsuits.

By a 5-4 vote, the Supreme Court just ruled for the first time that employees cannot band together to challenge violations of federal labor laws like the FLSA if they sign employee agreements to arbitrate claims.

It’s a ruling that could impact the rights of tens of millions of non-union, private-sector workers.

In its ruling the High Court specifically cited the 1925 Federal Arbitration Act (FAA), stating that the FAA trumps the more recent National Labor Relations Act (NLRA) and that employees who sign employment agreements to arbitrate claims are required to do so on an individual basis; they are prohibited from banding together to enforce claims of wage-and-hour violations.

Eliminate greatest risk with the stroke of a pen

The ruling here came from three different cases against Ernst & Young LLP, Epic Systems Corp. and Murphy Oil USA Inc.

In each of the cases, the companies required individual employees, as a condition of their employment, to waive their rights to be part of a class-action suit.

Also in all of the cases, the employees tried to sue as a group, claiming the amounts they could obtain in individual arbitration were negated by the huge legal fees they’d have to pay to bring a claim forward in the first place. The workers also claimed their right to collective action (aka, becoming part of a class status) is guaranteed by the NLRA.

But ultimately the High Court didn’t agree.

Neil Gorsuch, writing for the majority of the Court, said:

“… the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written. Whil Congress is of course always free to amend this judgment, we see nothing suggesting it did so in the NLRA — much less that it manifested a clear intention to displace the Arbitration Act. Because we can easily read Congress’s statutes to work in harmony, that is where our duty lies.”

While the Court’s minority offered a passionate and lengthy dissent, going as far as to call the ruling “egregiously wrong,” employment groups and attorneys everywhere celebrated the ruling.

And for good reason.

Ron Chapman, an attorney who represents management in labor-management disputes, gave this very succinct statement on why this ruling was cause for celebration:

“It gives employers the green light to eliminate their single largest employment law risk with the stroke of a pen.”

And Chapman expects many employers to use that “stroke of a pen” to impose binding arbitration contracts on workers ASAP.


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Revenge in the workplace: Top 10 ways employees get back at each other

There’s always going to be some conflict in the workplace, but the real trouble can happen when employees take their anger a step further. 

A new study by insuranceQuotes, which surveyed over 1,000 U.S. workers, found that 44% of employees admitted to exacting revenge on a co-worker.

These acts of revenge range from small to severe, and were committed by employees from all job levels — but some more than others. Those who were most likely to seek revenge were senior managers, while the group least likely to retaliate was entry level employees.

Reasons for revenge

Employees’ reasons for revenge varied quite a bit, with the top responses being someone “made them look bad” (51%) and a co-worker was “rude or disrespectful” (50%).

Here are some of the other popular reasons employees got revenge (multiple responses were allowed):

  • abuse of power or position (35%)
  • sabotaged their work (23%)
  • spread unflattering rumors (20%)
  • took credit for their ideas (20%)
  • ate their lunch (5%), and
  • planned to fire them (3%).

And here are the top 10 ways employees have gotten revenge on their co-workers:

  • purposely reduced the quality or quantity of their work
  • spread an unflattering rumor about a co-worker
  • quit their job in a strange way
  • hid a co-worker’s possessions
  • got a co-worker fired
  • sabotaged a colleague’s work
  • tampered with someone’s computer
  • ate a co-worker’s lunch
  • stole private information from someone’s computer, and
  • deleted a co-worker’s files.

Some of these acts of retaliation were more severe than others, but oftentimes, the wronged employees had an eye-for-an-eye attitude by doing the same thing a co-worker did to them. 

Preventing revenge

While managers can’t prevent all acts of retaliation, they can keep a close eye on their employees and how they interact with each other. Letting employees know that bad behavior will be dealt with could stop people from taking matters into their own hands.

Building a company culture where employees trust one and another and feel comfortable reporting unacceptable behavior is another key to preventing workplace revenge.

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Need to attract millennials? Offer student loan benefits

If you want to attract and retain millennials, it’s all about the benefits. And no perks are more sought after among this group than studen loan benefits. In this post, guest author Alyssa Schaefer, the chief marketing officer of Laurel Road, a national online lender, explains why employers can’t wait to roll out student loan benefits if they’re serious about hiring the best and brightest millennials. 

Ten years ago, millennials flocked to employers offering free snacks and ping-pong tables, but as this demographic matures, they seek more meaningful benefits from their company with long-term results. Similarly, growing companies have a hyper-sensitive need to appeal to the millennial group because they will soon make up a clear majority of the workforce.

Focused on their financial futures

As the Chief Marketing Officer of a tech-driven bank, I hear from our millennial staff all the time about their needs. My team also talks to our customers, most of which are millennials, every day about how important their financial future is to them.

What I’ve learned is that most millennials have lofty goals, and if a company can help them achieve those goals by supporting their financial future beyond just an income, they have a strong chance of attracting top-performing talent. Millennials also focus on values, so if a company can demonstrate how they support and reflect their employees’ values – financial and otherwise – that goes a long way.

Student loan debt is considered an epidemic in our country and is a major obstacle to the financial independence and goals that millennials seek. We hear it all the time from customers enrolled in our refinancing product. Those with student loans are constantly looking for ways to contribute savings to their payments – from more practical strategies like refinancing or taking on a “side hustle,” to extremes like selling their eggs or participating in medical trials.

Enlightened companies are beginning to recognize how student loan repayment programs can benefit their employees by enabling financial independence, which naturally creates a more positive outlook on their professional and personal life. According to a recent study we conducted with LendEdu, we found that 58% of millennials would prefer student loan refinancing benefits from employers over additional vacation days – pretty powerful! This shows, plain and simple, how millennials are looking for benefits and employers that support their financial well-being.

In my role, I’m also a partner to corporate clients who are offering their employees student loan repayment benefits, so I hear their wishes too. Offering a student debt repayment benefit reinforces that employers care about the same things their employees do, establishing trust and demonstrating how the company and staff have the same values. It also helps to boost employee morale and satisfaction, and a satisfied workforce is one that’s likely more productive, committed to their team’s success and loyal to their company.

Employers as advocates

On the recruitment side, this benefit allows employers to attract top-performing millennials who seek employers that advocate for their financial health. Companies that are first to introduce this benefit are shaping their brand perception as one that’s invested not only in the financial health of their employees, but in doing good for people facing an extreme burden.

In a time where job switching has become more common – and where 50% of millennials carry student loan debt – student loan refinancing benefits can help encourage employees to stick around for the long-haul. This benefit establishes trust and demonstrates that employers care deeply about the financial future and overall well-being of their staff, which, for millennials, is far more appealing than most “work perks.”

Cite: Alyssa Schaefer is the chief marketing officer of Laurel Road, a national online lender.

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50% of employees leave because of their managers: 3 things that’ll get them to stay

Fewer than one-third of employees in the U.S. are engaged in their work, and a recent study links that low number directly to managers. 

Gallup’s latest study surveyed over 7,000 employees to examine how their managers’ behavior impacts engagement, and ultimately, whether or not workers jump ship.

The study found that bad managers have a huge effect on retention and engagement. Fifty percent of employees said they left their jobs because of their managers, and 70% reported managers are responsible for how engaged they feel at work.

Gallup went more in-depth and had respondents identify which manager behaviors made them feel engaged and more likely to stay. Here are the top three responses:

1. Consistent communication

Simply put, the more communication an employee has with their manager, the more engaged they feel. This can be in almost any form — email, phone calls, meetings, etc. The study found that regular meetings can result in employees being three times more engaged.

And work talk is just the half of it. Employees are truly engaged when they feel their managers care about their lives outside of the office. When workers can form a personal connection with their managers, they’re much more likely to stick around.

2. Performance management

Those surveyed said frequent feedback from their managers made them more engaged. When employees aren’t clear on their goals, duties or how they’re performing, they can feel disconnected from the organization. When managers consistently discuss responsibilities and progress, employees are much more focused and engaged.

3. Focus on strengths

The study found that employees respond much better when managers help them build their strengths instead of focusing on their weaknesses. When workers are encouraged to get better at what they’re already good at, they’re 67% more engaged and much more likely to produce good work — people enjoy using their natural talents. Only 31% of those surveyed felt engaged when their managers focused on improving their weaknesses.

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New overtime rule and more: DOL’s to-do list includes some surprising news

When the DOL released its 2018 Spring Regulatory Agenda, it not only offered some insight on its progress in creating a new salary threshold for overtime eligibility, it also suggested it may alter the methods in which employees’ pay is calculated altogether.

Specifically, the DOL said it plans to “clarify, update, and define regular rate requirements” — and it plans to issue a proposed rule on the subject in September. Of course, because the DOL is notorious for not hitting the deadlines it sets in the regulatory agency, you may not want to hold your breath on the agency sticking to this timetable.

It’s worth noting this DOL initiative is completely separate from the agency’s plans to change the current overtime exemption regs.

‘Have not been updated in decades’

As HR pros are well aware, the regular rate of pay refers to an employee’s typical hourly rate, a rate that is multiplied by 1.5 to determine overtime payments when employees work more than 40 hours in a single workweek.

In a statement, a DOL spokesperson said: “Regular rate regulations have not been updated in decades — even though compensation practices have evolved and clarity is needed.”

In terms of the details, how the agency plans to revise the regular rate of pay rules under the FLSA is anybody’s guess . However, a number of prominent employment attorneys have some ideas.

Cohen Milstein attorney Michael Hancock told Bloomberg Law, “It’s a guess, and only a guess, that they [the DOL] will add categories of compensation that are excluded from the regular rate.”

Pushed back further

Another important update from the agenda: The DOL is now estimating the revision to the overtime exemption rules will be January 2019. Originally, the agency said the latest changes to the OT exemption rule would be issued by the fall. One possible reason for the delay: The DOL is still waiting for a confirmation from the Senate on Trump’s pick for DOL administrator, Cheryl Stanton.

Current DOL Secretary Acosta has said on numerous occasions he plans to increase the current OT salary threshold but has yet to offer a clear picture of how much higher it will be. The only consistent info Acosta has offered is comments the new threshold will be somewhere between the current $23,660 threshold and the $47,476 amount the Obama administration had proposed.

Tip-pooling, apprenticeships and more

The regular rate and OT changes are only two of the 49 regulatory actions the DOL laid out in its agenda.

Some of the other noteworthy initiatives include:

  • a proposed rule on tip-pooling that’s expected to include new legislation prohibiting companies from skimming employees’ tips (projected by August 2018)
  • a proposal by the DOL’s Employment and Training Administration to implement Trump’s executive order on revising the registration standards and expanding the availability of the U.S. apprenticeship programs (projected by September 2018)
  • a plan to rescind the Obama-era nondiscrimination and employment opportunity rules that applied to job-training programs (no projected date), and
  • an update to the child labor protections under the FLSA that would allow teenagers to work longer hours in hazardous conditions (projected for October 2018).


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The $600 payroll mistake that cost this company almost $45K

Here’s a cautionary tale about the importance of double-checking for minor mistakes in your company’s overtime calculations.

It’s a lesson one Texas company just learned the hard way.

In the lawsuit, Castro v. Precision Demolition, a company failed to pay an employee overtime for a mere $608.05 in unpaid overtime for his travel time. It’s a fairly common and innocuous mistake when it’s caught in time.

But in this case, it was any neither caught in time nor painless for the employer.

On top of the hassle of being hauled into court over an innocent mistake, the $608.05 in unpaid overtime turned into a $1,216 award by the court, an aware that included penalties.

70 times more costly

But that’s not the worst part.

On top of doubling the unpaid overtime the company was on the hook for, the court also ordered the company to pay out $41,333 in legal fees for the employee. And that amount was actually the court cutting the company a break. Reason: The employee’s attorney had initially sought a reimbursement of $114,000 in attorneys’ fees.

When all was said and done, the company wound up on the hook for $42,459. That amount doesn’t even account for the company’s own legal fees.

And that huge five-digit price tag all stemmed from a simple three-digit overtime error.

Not an area to cut corners

Nobody expects HR pros to be perfect, and mistakes are bound to happen from time to time. This is especially true at companies where HR staffers are being asked to also take on the role of payroll or benefits administrator.

But the lesson here is clear: Simple payroll mistakes can wind up costing employers a fortune. So it’s worthwhile to double-check all regular and overtime hours (or have a second set of eyes take a glance) to ensure a mistake like this doesn’t happen at your company.


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Employee on maternity leave fired: Here’s why the company won the lawsuit

When an employee returns from protected leave, firing them soon after can look like retaliation. But at the same time, an employee on leave doesn’t have immunity if there’s a good reason for their termination. 

Falsified job qualifications

This is the dilemma that Oakwood Healthcare in Michigan faced.

Michelle Bailey worked in the HR department at Oakwood. While she was out on maternity leave for three months, some of her colleagues took over her duties. During this time, they discovered several problems with how she’d been doing her job.

This discovery caused Bailey’s supervisor to take a closer look at the qualifications on her resume. Instead, the supervisor found Bailey had two resumes on file.

The first resume was from two years prior, when Bailey applied to a different position at the company. The more recent resume had been submitted for her current position. But a comparison of the two found some major inconsistencies. Bailey had exaggerated her experience and qualifications on the second resume to appear better suited for the job she currently had.

Between this discovery and the realization that Bailey hadn’t been performing her job well, Oakwood terminated her when she returned from maternity leave.

Employer acted reasonably

Bailey filed a lawsuit, claiming pregnancy discrimination and retaliation. She argued that “falsifications” was too strong a word, saying she simply “embellished” her resume. Bailey went on to say Oakwood didn’t follow its normal disciplinary procedures or give her a chance to correct her performance problems before firing her.

While the court said the “timing of Bailey’s termination was unfortunate,” and the “manner in which the decision was communicated was clumsy,” it still sided with the company, saying Oakwood acted reasonably.

This case shows that if an employer has a good reason to fire someone, it shouldn’t shy away just because the employee took protected leave. However, leave does complicate things, and companies should take extra care in making sure they have everything documented to back up their decisions.

Cite: Bailey v. Oakwood Healthcare Inc., U.S. Crt. of App. 6th Cir., No. 17-2158, 4/23/18.


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Company out $5.1M after forcing employees to ‘harness happiness’

Any employer would love to have workers who are emotionally aware and good at solving problems, but one company went about teaching these skills the wrong way.

New York company United Health Programs of America was sued by the EEOC after allegedly forcing its employees to partake in the practices of a belief system known as “Harnessing Happiness,” or “Onionhead,” which the lawsuit claims to be a violation of Title VII under the Civil Rights Act.

Mandatory group prayers

Onionhead is a nonprofit organization dedicated to teaching conflict resolution and similar life handling skills. The creator of this belief system, who happened to be the CEO’s aunt and was employed as a consultant at United Health Programs of America, would regularly lead employees in certain exercises.

But what the employees were told to do wasn’t exactly your typical team-building exercises.

The company required its employees to participate in group prayers, candle burning and discussion of spiritual texts, all as a part of Onionhead. One employee was fired for refusing to participate, while nine others claimed following these practices against their will created a hostile work environment.

‘Unique type of religious discrimination’

A jury agreed with the EEOC, deciding Onionhead was considered a religion under Title VII, which forbids employers from forcing employees to engage in religious practices in the workplace. Employers are also prohibited from firing those who refuse to participate. United Health Programs of America will pay $5.1 million in damages to ten employees.

Most religious discrimination cases deal with employers preventing workers from following their own religion, and EEOC trial attorney Charles Coleman, Jr. pointed out the reversal:

“This case features a unique type of religious discrimination, in that the employer was pushing its religion on employees. Nonetheless, Title VII prohibits religious discrimination of this sort, which makes what happened at [the company] unlawful.”

While what happened at United Health Programs of America was an extreme case, it’s a good reminder to keep anything related to religion out of the workplace.


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The state of HR: What should be keeping you up at night?

ada, mental health

While HR pros are a little less worried about the ACA and DOL enforcement than in previous years, thanks to the effects of the #MeToo movement and an uptick in sexual harassment lawsuits, a number of other workplace issues have them concerned.

These are some of the key findings from The Littler Annual Employer Survey, 2018, which surveyed 1,111 HR pros, execs and in-house counsel.

To view the full report, visit.

The impact of the #MeToo movement

Sexual harassment in the workplace and the correct way to respond to it is a huge issue for employers right now.

The study found that 66% of employers ranked sexual harassment as the top or the second-most concerning issue on their radar.

And a majority employers have taken proactive steps to combat this problem. In response to the cultural shift the #MeToo movement has created, employers have taken the following steps:

  • added training for supervisors and employees (cited by 55% of employers)
  • updated their HR policies or handbooks (38%), and
  • implemented new tools or investigation procedures to manage complaints (13%).

Just 24% of companies haven’t made any recent changes.

Helene Wasserman, the co-chair of Littler’s Litigation and Trials Practice Group stressed the importance of tackling the issue of harassment in the workplace head-on by stating:

“No company can afford to ignore this issue, and while many already have a good foundation, the past several months have shown the importance of reevaluating and reinforcing policies and procedures. While the law governing harassment in the workplace hasn’t changed much, employee expectations have. In addition to providing training and updating policies, it’s critical that companies have effective complaint procedures in place and that employees feel confident that reports of potential misconduct will be taken seriously and acted upon.”

Fewer concerned about ACA, federal enforcement

When it comes to the regulatory environment of the current administration, employers are a bit less worried about the issues that concerned them in the past. But many are still concerned about uncertainty.

For example, just 15% of employers are expecting a significant impact from the ACA in 2018, compared 33% in the 2017 report. Plus, only 16% of employers expressed a significant concern over DOL enforcement (compared to 25% in 2017), concern over NLRB enforcement tactics dropped from 13% in 2017 to 8% this year.

Still, 64% of employers said that reversals of workplace policies and regulations between presidential administrations put a strain on their businesses. And three-quarters (75%) said they faced challenges as states and localities work to fill perceived policy vacuums at the federal level.

The regulatory changes that have had the greatest impact on employers included a rollback of wage-and-hour policies and the new tax bill, both of which were cited by 62% of employers.

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Toxic co-workers: 3 ways to stop their damaging behavior

Everyone encounters colleagues they don’t get along with, but when they exhibit toxic behavior, it’s an entirely different problem. Toxic co-workers are the ones without the best intentions, always trying to undermine their colleagues.

Some common toxic behaviors include:

  • backstabbing, criticizing, blaming
  • gossiping and spreading rumors
  • hoarding information, and
  • caring only about personal agendas.

This behavior is damaging to the workplace for a lot of reasons. People are less likely to work together as a team, and workers end up spending all their energy watching their backs.

And when toxic behavior isn’t questioned, it becomes a normal part of company culture.

Speaking up

Harvard Business Review contributor Abby Curnow-Chavez has three tips for dealing with a toxic co-worker whose behavior has gotten out of control.

  1. Have an honest conversation. By not saying anything, you’re allowing the behavior to continue — the co-worker isn’t going to wake up one day and realize they’ve been behaving badly. Try to focus more on how their behavior is impacting you. Ask them if anything you’re doing is causing conflict, too. The co-worker won’t want to listen if they feel like they’re being attacked.
  2. Have a goal in mind. It may be tempting to get defensive or resort to personal attacks, but this won’t solve anything. Be a role model for how co-workers should treat each other. Try focusing on the end goal. How will stopping the toxic behavior help the team’s work, or the office, as a whole? Getting the co-worker to see how the workplace could improve will be more effective.
  3. Let your boss know. While it’s good to address the person on your own, your boss could help facilitate a group discussion to work out any conflicts. There’s a good chance others have been impacted by the toxic behavior, so a setting where everyone can speak their mind is a good idea. This would be a great opportunity for the boss to remind everyone of respectful workplace conduct and how to address any future issues.

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