Friday, September 28, 2012

Asking Employees for the Facebook and Social Media Passwords

Thank goodness the California Legislature has acted swiftly to avoid an economic catastrophe ... Oh, that's right, it didn't.  But at least we have the Legislature worrying about employees' rights to lead a secret social media life without employer scrutiny. 

The governor signed AB 1844.  It prohibits an employer from asking or requiring an applicant or employee to:
  • Divulge a social media username or password;
  • Access social media in the presence of the employer; or
  • Divulge any personal social media. 
This law does not affect an employer's "existing right or obligation" to request disclosure of social media information if it is reasonably believed to be relevant to an investigation of misconduct or violation of law.  Notice that the disclosure in this case need not relate to particular employee whose media may be examined.  However, what does the law mean when it says "existing right or obligation"?  I am not aware of another law affording an employer the express right to examine social media.  Nor am I aware of any law that specifically obligates an employer to examine social media. 

Presumably, this exception was intended for those situations when an employee uses social media to harass another worker.  However, the law does not clearly articulate this point.  Where there is ambiguity, there is litigation. 

Moreover, what must an employer show to prove that it "reasonably believed" the social media to be relevant to an investigation of wrongdoing? 

And what happens when the social media does not contain information related to the allegation of wrongdoing, but might have information regarding wrongdoing in another matter that was unknown to the employer?  Can that information be used to conduct a new but "related proceeding"?  Or must the related proceeding be based on information discovered someplace other than the social media? 

Social media continues to be a confusing area of the law.  Employers must carefully develop social media policies and carefully enforce those policies. 

Perhaps another consequence of these laws is to simply encourage employers to terminate the employment of employees without making a request in violation of AB 1844.  If requesting access to social media could lead to litigation, why not just terminate the employment relationship?  Provided that the action does not breach an employment contract or violate public policy, the termination probably won't result in litigation.  In fact, AB 1844 allows employers to terminate the employment relationship if it is otherwise not prohibited by law. 



Thursday, September 27, 2012

Does It Really Take An Appellate Court To Tell Us Check Fraud and Timecard Fraud Are Grounds For Termination? Dutra v. Mercy Medical Center Mt. Shasta

Ms. Dutra was upset with her employer, Mercy Medical Center, when she was confronted about her gossiping (for which she had been disciplined in the past), check fraud and time card fraud.  She, with her union representative, attended a meeting with her supervisors.  These three issues were discussed, and given, as grounds for the termination of her employment. 

Ms. Dutra did not back down, and sued Mercy Medical Center for defamation, and wrongful termination in violation of Labor Code section 132a.  This code section prohibits an employer from discriminating against an employee because the employee has been injured on the job or has filed a workers' compensation claim.  Three months prior to the termination, before the acts of fraud were discovered, Ms. Dutra fell on the job and injured herself. 

Defamation Occurring During The Termination Meeting

The claim of defamation was based on the meeting among the supervisors, union steward and Ms. Dutra.  It is interesting to me that a defamation claim could have been brought in the first place.  The supervisors were Mercy Medical representatives.  Therefore, they were not "third-parties".  Thus, a defamation action should not be permitted when the communications were made by and in the presence of the company's management representatives.  Moreover, the union steward was present at Ms. Dutra's request.  He was her representative.  She had the right to have a union representative present.  Mercy Medical could not prevent the steward's presence.  Therefore, it seems to me that a defamation lawsuit should not be permitted to go forward because Ms. Dutra brought her representative. 

Mercy Medical still prevailed on the claim, but did so because of a privilege under Civil Code 47(c).  A privilege means that even if the communication was made to a third-party, it was privileged and cannot be the basis for a defamation lawsuit. 

Civil Code section 47(c) permits one interested person (Mercy Medical) to make a statement to another person of interest (steward) without incurring liability for defamation, provided the statement was made without malice.  In this case, the Court of Appeal concluded that the only reasonable interpretation of the statements made during the employment termination were made without malice (presumably to inform Ms. Dutra of the charges against her). 

It might appear obvious to an HR professional that statements made to an employee and her representative at a termination meeting should not form the basis of a defamation claim.  However, few things are obvious in the law, or the California HR world.  Now employers can rely on this case for the position that such statements are privileged. 

Labor Code Section 132a Claims Must Be Brought Before The WCAB

Ms. Dutra also claimed that the termination occurred because she was injured three months earlier.  Section 132a allows an employee to assert this claim before the Workers' Compensation Appeals Board ("WCAB").  However, Ms. Dutra made the argument that section 132a claim could be asserted as a civil action for wrongful termination.  She based this argument on the case, City of Moorpark v. Superior Court (1998) 18 Cal.4th 1143, which said that the WCAB was not the exclusive remedy for claims brought by an injured worker against his/her employer.  Moorpark specifically said that an employee injured on the job could assert a 132a claim before the WCAB and also a cause of action for wrongful termination for disability discrimination in a civil court. 

Moorpark has been used incorrectly in my opinion by many plaintiffs' attorneys.  I had such a case.  The court permitted the plaintiff to assert a 132a claim in civil court, in spite of my urging that the claim must be brought before the WCAB.  I argued that the WCAB has exclusive jurisdiction of 132a claims -- something that was supported by years of case law.  However, the court, relying on Moorpark, concluded that a 132a claim could be brought as a civil claim. 

Ms. Dutra was not lucky on this claim.  The Court of Appeal correctly held that section 132a cannot be the basis of a claim for wrongful termination in violation of public policy.  Section 132a provides a procedure for adjudication.  It also provided a very specific remedy.  If a litigant could make a 132a claim in civil court, it would eviscerate both the procedure and remedy provided by section 132a. 

Why Is It So Difficult To Get Rid Of A Problem Employee?

It shouldn't be this difficult to terminate the employment of a worker who engages in check fraud, time card fraud and gossip.  It seems to me that firing a person for fraud is a "no-brainer."  I am disappointed the courts allowed the claim to persist so far. 

This case is instructive on several levels.  First, maintain at-will employment.  I have already posted a blog on how to maintain at-will employment.  This will at least eliminate claims of breach of contract. 

Second, explain the reasons of termination to the employee alone.  I understand that an employee may have the right under a collective bargaining agreement to bring in a union representative.  Work with it.  But if this does not exist in your workplace, inform the employee without others present.  Those who should be present on the employer's side are the HR Director and the supervisor. 

Third, be prepared with good evidence of wrongdoing.  If you claim check fraud, then have evidence showing check fraud.  If you claim time card fraud, obtain the evidence of time card fraud.  Be prepared to litigate the matter.  Defamation is actionable only if the statements made are untrue.  Truth is the ultimate defense. 

Fourth, be prepared to fight.  A good offense is often the best defense.  Make sure employees understand that you devote the resources necessary to protect your company.  If you do this on one case, your other employees know what they can expect if they file a lawsuit. 

Tuesday, September 25, 2012

Reporting Time Pay, Split Shift Premiums & Attorneys' Fees

In Aleman v. AirTouch Cellular, 2012 DJDAR 13269, a group of customer service representatives who sold cell service and equipment in kiosks filed suit claiming the company did not pay them properly for attending store meetings.  The company required employees to attend periodic training meetings lasting approximately 90 minutes.  Sometimes the meetings ended early.  In addition, some employees were required to attend the meeting and then report to work at a later shift in the day.  The primary claims asserted were that AirTouch did not pay reporting time pay or split shift premiums. 

Reporting Time Pay
Under California wage orders, if an employee reports for work as required, but is not provided at least half of his/her scheduled or usual shift, then the employee must be paid half of his/her scheduled or usual shift, no less than two hours, no more that four hours.  This is referred to as reporting time pay. 

Employees testified that they were asked to attend a 90 minute meetings, but that the meetings would end 30 minutes early.  They claimed that under the reporting time pay provision of the wage order, they were entitled to two hours of compensation.  (A very disingenuous claim!) 

The court examined the language of the wage order.  Employees were scheduled to work 90 minutes.  They attended a meeting that lasted 60 minutes.  This was more than half of the scheduled shift.  Thus, the reporting time pay provision does not apply. 

Split Shift Premiums
When an employee works a split shift, one hour of pay must be paid to the employee in addition to the minimum wages for the workday.  This is referred to as a split shift premium.  Employees who attended the training meeting and then reported for work later in the day claimed they were entitled to receive the split shift premium. 

The court denied the relief requested.  It reasoned, consistent with the position of the DLSE, that if the employee's wages for the day are more than minimum wage plus one hour of minimum wage, a split shift premium has already been paid.  AirTouch employees earned an hourly rate of pay that when multiplied by the number of hours worked, exceeded minimum wage for those hours plus one additional hour at minimum wage.  

Attorneys' Fees
This is where the case gets interesting.  AirTouch sought attorneys' fees for successfully defending against these two claims.  The trial court initially awarded AirTouch approximately $300,000 in fees, which was appealed.  The Court of Appeal remanded the cast to the trial court for a review of the attorneys' fees issue in light of Kirby v. Immoos Fire Protection, Inc. (2012) 53 Cal.4th 1244.  (Discussed in a prior blog.)

The award of attorneys' fees depended upon whether the lawsuits were brought under Labor Code section 1194 or 218.5.  Section 1194 is a one-way attorneys' fee provision.  It applies to lawsuits for unpaid minimum wages or overtime.  Only a successful plaintiff can recover attorneys' fees under section 1194. 

Section 218.5 is a two-way attorneys' fee provision.  It applies to lawsuits for the non-payment of wages.  A successful defendant as well as a successful plaintiff can recover attorneys' fees under section 218.5. 

The court concluded that a claim for a split shift premium is a claim for unpaid minimum wages.  Therefore, section 1194 applies to these cases.  However, a reporting time pay claim is not a claim for unpaid minimum wages or overtime.  Thus section 218.5 applies to these claims. 

On remand, the trial court awarded attorneys' fees to AirTouch on the reporting time pay provision. 

What Does This Mean?
Many employment-based lawsuits are focused on attorneys' fees.  Consider the barista who sued Starbucks for not providing him with what he considered to be his full reporting time pay.  A lawsuit was brought on a claim of less than $10.  Why?  Because the attorney believed he could make big money. 

What I predict is that attorneys will be less likely to bring frivolous or negligible claims for reporting time pay.  Attorneys, or more appropriately, their clients, will be less willing to risk an adverse claim for fees in the event they are unsuccessful.  (By the way, it is not the unsuccessful attorney who pays the other side's attorneys' fees; it's the unsuccessful litigant.)  Rather, attorneys will focus on claims governed by section 1194, where a successful employer won't have the right to seek attorneys' fees if it prevails. 

But my advice doesn't change.  Employers should focus their efforts on compliance.  Avoiding the claim is the least expensive alternative for an employer. 


Tuesday, September 18, 2012

Avoiding Grade Inflation on Personnel Evaluations -- Brutal Honesty

Per our firm's practices, we periodically purge files.  Recently, I reviewed a file containing old seminar materials.  In the file were examples of poor employer behavior. 

Years ago I had a client, an owner of a prominent company, tell me that his secretary, who was recovering from back surgery was a horrible employee.  He told me this as she was preparing to return to work after a leave of absence.  She had requested, as an accommodation, a special chair and the opportunity to stand and stretch or walk more frequently than one every couple of hours. 

The owner could not put up with those restrictions and he wanted me to know that she had never been a good secretary.  Get rid of her was his direction. 

Having examined situations like this on numerous occasions, I decided to look at the secretary's personnel file.  On top was the most recent evaluation.  On a scale from 1 to 5, with five being "excellent" the secretary 21 top scores.  The remaining scores were all 4's, or "very good." 

I did not advise firing the employee.  I recommended providing an accommodation and working through whatever problems they had. 

This evaluation demonstrates a serious problem that arises when an employer uses grade inflation on a review.  Assuming the owner was telling me the truth, the secretary was not a competent employee.  However, he gave her top scores.  Was he trying to avoid confrontation?  Was he hoping she would quit before he had to speak with her? 

Assuming the owner was telling me an untruth, the evaluation contradicted him. 

In a lawsuit, neither position is enviable.  Think of it.  What will a jury think if it hears the owner say, "She was a terrible employee" but sees a stellar evaluation?  The jury is likely to think the owner is a liar and he really wants to fire her because she took a leave of absence and wants an accommodation.  The only way the owner wins is if he convinces the jury that he actually lied on the evaluation, which was suppose to be a candid and truthful assessment of the employee's performance.  That is NOT the argument to present.  That is not the argument the employer will win. 

Most employers do not provide accurate evaluations for one of two reasons:  (1) They are too lazy to put in the time to provide a careful assessment; or (2) they want to avoid confrontation.  Neither reason justifies the employer's behavior. 

Employees deserve to receive an honest evaluation.  Their livelihood depends on it.  They want to improve and become of greater value.  Thus, it is imperative that an employer provide an honest assessment. 

In addition, an employer wants to avoid lawsuits.  They are avoided with honest assessments, not dishonest silence.  When an employee with high evaluations receives word of a termination what will(s)he think?  The employee will think that someone had it in for him/her.  The employee will think that there is an unlawful reason for the termination.  The employee will find a lawyer and attempt to articulate a claim. 

In the case I described, the employee would have thought, "I am being fired because I have a disability and took a leave of absence."  That gives rise to a lawsuit -- and attorneys' fees.  That's a great case for a plaintiff's lawyer.  Years of dedicated service.  Elderly secretary.  Stellar reviews.  Fired only after she experienced a health problem. 

That is a big money case! 

So what should an employer do?  Be brutally honest.  Tell the employee where the deficiencies are.  Give examples.  Provide training opportunities to improve.  If performance does not improve, then you go to the employee and say, "It's not working out." 

And guess what?  The employee doesn't have to guess why the decision was made.  The employee says, or at least thinks, "I understand.  I have not improved on my performance."

Now that's how to avoid a lawsuit.  Be honest.  Be fair.  Be candid. 


Wednesday, September 5, 2012

Maintaining At-Will Employment In California -- Good, Better and Best Methods

California employers love at-will employment.  It is a valuable tool that allows employers to take adverse action against employees while lessening the risk of litigation.  The problem arises, however, when an employer does not take appropriate steps to maintain at-will employment. 

The Parameters of At-Will Employment

Per Labor Code section 2922, "An employment, having no specified term, may be terminated at the will of either party on notice to the other."  This means that if an employer hires a worker and does not specify the term of employment, then the relationship can be terminated by either party.  That's at will employment -- the ability to terminate the employment relationship without notice, reason or obligation. 

However, at-will employment is not absolute.  An employer cannot terminate the employment relationship if doing so violates public policy.  For example, an employer cannot fire a worker because of the worker's age, race, religion, or other protected classification.  Such action would constitute unlawful discrimination.  The law protects also protects workers for other reasons as well.  For example, an employer cannot fire an employee because the employee has complained of safety violations.  When an employer engages in these types of activities, it is violating public policy.  At-will always gives way to public policy. 

A second type of wrongful termination claim is breach of the employment contract.  An employer cannot breach a term of an employment contract when ending the employment relationship. 

Implied Contracts of Employment

Most employers don't have express written contracts with their employees.  Rather, the employer merely informs the employee that (s)he has been extended a job offer for a certain position for a certain wage.  The letter might even say that the employment relationship is at-will.  However, this does not resolve the issue of at-will.  An employer's subsequent behaviors, coupled with other factors, may imply a contract of employment. 

Factors that may imply a contract of employment include industry practices, the length of the worker's employment, and an employer's policies and practices.  Moreover, the fact that the agreement is "implied" makes termination issues even more difficult because the conditions for termination are not clearly articulated.  Instead, the ability to terminate is phrased in terms such as "good cause" or "just cause". 

The problem with the standard of "just cause" is two-fold.  First, what is just cause, or in other words, when does the employer have cause sufficient to terminate?  Second, who makes the determination of just cause?  Perhaps the answer to the second question will help answer the first question.  If a worker sues its employer, the jury makes the decision of just cause.  Jurors typically are not business owners, HR professionals, or senior managers.  Juries are often made up of government employees (who understand civil service), retired persons, the unemployed and staff employees.  More likely the jury will be more closely aligned with the worker suing the employer. 

What cause is just?  It will depend on the jury.  This is not an enviable position for an employer. 

Typical Faux Pas Creating Implied Contracts of Employment

The most common way for an employer to create an implied contract is with a policy of "probationary employment."  Probation typically considered a testing time when the employer can terminate the employment relationship for any reason and at any time.  Probation is the equivalent of at-will employment. 

What is the employee's status at the end of probation?  I often hear terms such as "regular" or "permanent".  These are not terms consistent with at-will.  They suggest that the worker cannot be fired but for just cause. 

Another common practice that implies a contract of employment is progressive discipline.  Such a policy suggests that an employee will not be fired unless certain steps or procedures are followed.  Combine poor documentation with a progressive discipline policy an an employer has no evidence that the worker is unsatisfactory and that sufficient cause exists for termination of employment. 

Employers often make statements, without considering the consequences, that suggest an implied contract.  For example, during an evaluation, the boss says, "We enjoy having you here at XYZ Corporation; you have a job here as long as you want." This might imply employment that cannot be terminated but for just cause. 

Methods to Maintain At-Will Employment

So how can an employer maintain at-will employment?  In my practice I have seen several methods of maintaining at-will employment.  However, these methods are not equal.  All are good.  But some are better and one is best. 

Good.  Most employers will include at-will language in documents communicated to employees.  For example, an offer letter with reference of at-will is a good way to maintain at-will employment.  Similar language can be found in an application for employment or a handbook. 

Better.  A better way to maintain at-will employment is by having the employee acknowledge at-will status.  For example, when completing orientation, an employer may ask its employee to acknowledge his/her at-will status.  This is better than simply informing the employee of his/her at-will status because it shows the employee's understanding as well. 

Best.  There is yet an even better way to maintain at-will employment.  It is done by entering into a contract with a worker for at-will employment.  A contract is better than an acknowledgement.  It is something to which the employee has given his/her assent, and not merely an acknowledgement of understanding. 

The contract is also best because it should include an integration clause.  This clause prevents an employee from introducing evidence from outside the  employment agreement.  Thus, if the handbook includes a poorly-drafted policy implying at-will, the integration clause prevents it from being introduced at trial. 

I recommend that all my clients use at-will employment agreements with integration clauses for all employees.  It is the absolute way to avoid a claim of breach of the implied employment contract.  I also like to add an arbitration provision in the contract.  But that's a subject for another blog.