By: Dan Cohen – 1/19/16
I hate to be the one who told you so, but I am telling you so: you better make sure your managers know what they’re doing. They are the ones who get you in trouble 9 times out of 10. This is not because they’re bad people or don’t care about your business. It is a simple question of not having the resources at their disposal. This is particularly true of small businesses where there is no HR Department, HR Specialist or even an Office Manager, who dabbles in personnel issues. How hard is it to gather the troops together for two hours and get them some training? It’s not a daunting task or an expensive proposition.
I can say without hesitation those companies that take the time once a year to sit their managers down and walk them through some basic concepts about discrimination, retaliation and harassment as well as proper ways to document misconduct and performance issues are the ones that stay out of court. If it were me, I would rather pay my attorney for annual training then preparing me for my deposition in a wrongful discharge case that grows out of a poorly documented discharge. Don’t get me wrong: I will gladly and ferociously defend you in that wrongful discharge case, but at the end of the day, you will come away from the experience with a bad taste in your mouth, win, lose or draw.
So, where do you start? Your handbook is the most logical point of reference. This is where your EEO policy with its complaint procedure, your FMLA policy, work rules, attendance policy, benefits and more are most likely published. A basic training program for your managers would identify new provisions as well as why certain policies exist, how they work and what their obligations are under the various company policies. For example, a good harassment policy sets forth prohibited conduct, what employees can do if they feel they have been harassed, assures victims that the company will review/investigate complaints and that the Company will enforce the policy through remedial efforts. It will also provide for some degree of privacy and an anti-retaliation feature. A simple training program would educate managers on their responsibilities under the policy, including the identification of prohibited conduct, how to communicate with victims as well as perpetrators and witnesses, how to document the file and how to manage the situation going forward. The program could also include training on the nuts and bolts of conducting the investigation and wrapping it up.
Many non-union businesses can benefit from training on “union avoidance” given the recent implementation of the NLRB’s “ambush” or “quickie” election rules. These rules greatly disadvantage businesses responding to union election petitions. Explaining the process to managers, how and why employees turn to unions and what can/should be done now and if and when the union comes knocking can make all the difference in the world.
You are better off “getting out in front of these issues” than merely reacting to problems as they arise. For one, most problems can be prevented. More important: cleaning up messes costs more and becomes a distraction for your employees. Don’t wait for a costly mistake. Train your managers and empower them through knowledge.
By: Bill Pilchak – 8/6/15
A recent consultation suggests it is time for a refresher on the subject of producing a personnel file. Employers in Michigan have an obligation to supply a copy of all personnel records regarding an employee upon written request under the Bullard Plawecki Employee Right To Know Act. Sixteen other states grant similar or greater rights to employees of private companies and most states require public employers to provide the file to their employees on request. (Those states are listed at the end of this article.)
In Michigan, an employer is required to produce every “personnel record,” defined as “a record kept by the employer that identifies the employee, to the extent that the record is used, or has been used, or may affect or be used relative to that employee’s qualifications for employment, promotion, transfer, additional compensation or disciplinary action.”
Some companies take a narrow view as to what constitutes a personnel record. A request to a company with this perspective might result in the production of only dry personnel action or status change forms, W-4 forms and the employment application. After all, those are the traditional “personnel records.” However, look again at the definition. A personnel record is a record that identifies the employee:
- And “has been used…relative to that employee’s…disciplinary action,”
- Or “may…affect…that employee’s qualifications for…promotion,” etc.
Most discharges involve documents that bear the terminated employee’s name and which have been considered in the decision to discharge:
- The six e-mails from various co-workers reporting that the employee could be heard shouting and hurling F-Bombs at a supplier inside his office;
- The PowerPoint containing the account rep’s name on page 1, and a dozen or so mistakes that she presented to a valued customer to the embarrassment of the Company;
- A security guard’s signature on the daily activity report indicating that he left at 11:00 p.m., when video shows him abandoning his security post and leaving the facility at 10:30.
Unconventional personnel records can be important in a non-discharge context: if the results of a sexual harassment investigation lead to the conclusion that a supervisor conducts himself so recklessly that he would not be considered for promotion, that documentation of the investigation is a personnel record that must be produced upon request.
The penalty for not producing the personnel record is that the employer is stripped of the ability to use the non-produced document in any litigation filed by the employee – although the employee may use the record if it favors his case. In most cases, the company that considers only the ”traditional” personnel forms to be personnel records will be deprived of their best evidence at trial. Imagine not being able to present the error-laden PowerPoint to a jury when that was the straw that broke the camel’s back. How does one convince a jury that the security guard falsified the daily activity report without introducing that record at trial?
In the non-discharge context, if the supervisor who had been the subject of the harassment investigation in 2013, requests his file in 2014 and sees no reference to the investigation, he might have a better case to argue he was passed over for promotion in 2015 because of age, race, etc. If the results of the 2013 investigation suggested he should not be promoted in the future, some document to that effect should have been provided.
Beyond what MUST be produced to the employee, is the question: What SHOULD be produced? Employees don’t request their files to entertain themselves. They turn the file over to an attorney who advises them whether they have a chance of fooling a jury into believing they were fired for race, sex, national origin, age, etc., instead of the Company’s legitimate business reason. If the file contains no documentation of that legitimate business reason, it is easier for the attorney to convince a jury that the reason for discharge was an illegal reason: discrimination, retaliation, etc. Imagine the argument to the jury: “Of course there’s no documentation of the reason for termination…because it was an illegal reason!”
Wise employers produce a personnel file that show they are loaded for bear! Ideally, it contains a termination memo or letter that specifically identifies the reason(s) that termination must occur. They then collect every scrap of paper and every electronic record that shows: a) how many people were attuned to or dealing with the issue; b) the problems the employee caused, such as scrap parts, increased costs, late fees and penalties, missed customer deadlines; c) and most importantly (according to consultants who assess juror attitudes) the burdens placed on other employees, etc. In this respect, HR should assume the role of detective, considering what documents and e-mails exist to show the employee was released over a real issue that had real implications. Ideally, this is done at the time of termination, since it is sometimes hard to resurrect documents and e-mails that made the difference months or years later. However, if not then, certainly, those documents should be gathered up and turned over when the file request arrives. Moreover, ideally, the employer will number the pages produced (by hand, if necessary) and retain a photo-copy of what had been produced, so the employee cannot claim the crucial document was not supplied.
Finally, let me relate a real life story to make the ultimate point of this article. For many – perhaps 15 -years, not one of our clients had ever been sued over a discharge where our firm had consulted and assisted with the termination letter/memo. Finally, one such employee sued. At the deposition, the we sought to assure that employee was provided with the personnel file pursuant to the request we saw in the file. So, the employee was asked what he did with the stack of papers he received in the mail. The employee testified that after the first five attorneys he consulted refused to take his case upon reviewing the personnel file, he threw it out and met with the attorney who now sat at his side, thus alerting counsel that he was stuck in a case that five other attorneys would not touch.
When you send a personnel file, make sure it contains material that shows there was a business reason, not an illegal reason, for such an important decision. And, be sure you are complying with the particular state statute on producing personnel records.
STATES REQUIRING PRODUCTION OF PERSONNEL FILES BY PRIVATE COMPANIES:
AK, CA, CT, DE, IL, IA, ME, MA, MI, MN, NH, OR, PA, RI, WA, WI
By: Dan Cohen – 1/6/15
Over the years, I have reviewed my share of employee personnel files. I see them when responding to agency charges, when defending wrongful discharge suits and when terminated employees request them under Michigan’s Bullard Plawecki Act. More times than not, I run across unsigned write-ups in those personnel files. Is it because the supervisor never presented it to the employee (a problem when litigation occurs), because employees forget to sign (not likely) or is it because some employees naively believe that by not signing the write-up, they can later argue the write-up never occurred? A fourth possibility is that the individual is generally uncooperative and views the employment relationship as “us against them.”
If it were me, I would discipline/fire an employee who refused to sign a write-up. It’s a small but defiant act, an adversarial move by the employee which would absolutely affect the way I view that employee. In fact, such defiance would strain my relationship with the employee and all but destroy my faith and trust in that employee. So, yes; I would oppose their claim for unemployment benefits, and as long as I got a proper release, I would want to make sure references, who contact me about the employee, find out the employee refused to sign a write-up. But, that’s just me. You laugh, but I’m dead serious. Most employers want team players working for them. They want people who are part of the solution and not the problem. When someone refuses to sign a write-up, rather than sign it with an explanation, they are either not smart enough to be on the team or they are putting a stamp on their forehead that “I’m going to be a problem.”
Call me a curmudgeon, but if you continue to employ an employee who refuses to sign a write-up out of principle, recognize that you have an employee who believes ”Team” is spelled with an “I”, is not very smart or simply does not trust management. And, you likely have someone who is far more likely to challenge you in the future. Obviously, none of these things are good for your business.
The courts have not supported employees who refuse to acknowledge discipline. Cases have upheld the denial of unemployment benefits to employees who were discharged for refusing to sign their disciplinary write-up. In such cases, the employee’s refusal to abide by the request is considered misconduct, which disqualifies the employee from receiving unemployment benefits.
Thus, to protect yourself from claims arising from your decision to fire an employee who refuses to sign a write-up, it would be worth using a disciplinary form that states:
“Your signature acknowledges your receipt of the write-up and does not indicate your agreement with it. Refusal to sign a disciplinary form is grounds for discipline up to and including discharge.”
I would also consider asking applicants whether they have ever refused to sign for a disciplinary write-up and I would make this part of my orientation and work rules.
By: Bill Pilchak – 10/2/14
In approximately one month, readers of Dbusiness will see Pilchak & Cohen’s first-ever display advertisement, as we capitalize upon their selection of our firm for their “Top Lawyers” edition. Given the opportunity to describe what distinguishes us, we included the following statement:
“Legal Scholars using law enforcement investigative and forensic techniques in civil cases.”
Those who have worked with us know that we will attempt to locate evidence beyond the obvious he-said, she-said statements to make the truth undeniable – especially when it favors our clients. Computer forensics, surveillance, even dumpster-diving have cracked open cases in the past. Everything ethical is in play.
Today, something reminded us that our clients, too, can employ evidence-gathering tricks learned from the CSI teams we see on TV. Virtually every one carries a forensic tool with them at all times: a Smartphone. Virtually all modern devices include a camera and most will take videos. Imagine how your documentation supporting discipline will be enhanced by photos taken “on the scene” and printed out for the file. Will the skid-marks showing the hilo was moving too fast when it dumped the load be buffed out by the janitorial crew in the next 24 hours? Snap a photo. Joe inexplicably turns out only 24 parts per hour on the midnight shift? Take a 5 minute candid video of Bob producing one part per minute on the day shift to show that 60 parts per hour is possible. You know that your carrier (like most) will only keep the crucial text for six months? Use another device and take a picture of the text, so that it is preserved forever. Freda is exploding in fury again? Work your inner-Cecil B. DeMille and make a movie. The possibilities are endless.
Beyond the camera feature, most smartphones double as digital recorders. Gone are the days when one must locate a tape recorder and purchase tapes for an interview. If you are investigating an incident and interview a witness who might later be pressured (i.e., by their union or co-workers) to change their story, consider pulling out the cell phone to “take a formal statement.” Although Michigan law permits a participant to a conversation to secretly record it, (it isn’t “eavesdropping” if one is party to the discussion), it is always better to place an introduction on the recorded statement showing that the subject knows of the recording.
As you can see, the possibilities presented by technology are endless. If you can see something or hear something that supports your conclusion, go to work, Sherlock.
By: Dan Cohen – 9/2/14
One of the most difficult things we do as labor and employment attorneys is determine at what point a business can discharge an employee who has been on an extended leave of absence due to a disability. Although the courts have grappled with this question for years, the answer seems simple enough: “until continued leave becomes an undue hardship.” EEOC Policy Guidance on Reasonable Accommodation under the ADA (March 4, 1999). If you are a small employer with fewer than 15 employees, lucky you: you are not covered by the ADA. You smaller employers must look to state law for guidance. In Michigan, small employers will reach the point of no return immediately because employees are not entitled to a leave of absence under the Michigan Persons with Disabilities Act (See e.g. Lamoria v. Health Care & Retirement Corp., 233 Mich. App. 560 (1999).For you larger employers, however, the path to the point of no return requires an “individualized inquiry,” which all but assures you of an uncertain outcome.
Now that I have narrowed it down for you, how do we know when it is appropriate to discharge an employee because his/her continued leave is an undue hardship? I will answer this question with a series of questions:
- What is the job and how important is the job to the organization?
- Has the employee exhausted all other paid/unpaid leaves of absence, including FMLA?
- Have other employees been provided longer leaves?
- Has the employee provided an imminent return to work date?
- Has the employee extended the leave and how many times?
I think you are probably starting to get the picture: there is no definitive answer. There is simply no magical number of weeks of months where an employer automatically reaches the point of no return. All we know for sure is that a disabled employee is not entitled to an “indefinite” leave of absence. So, what is an employer to do?
I would start with a leave of absence policy similar to the one endorsed by the Sixth Circuit in Cash v. Siegel-Report, 2013 U.S. App. LEXIS 24246 (6th Cir 2013). In that case, the employer’s policy stated:
“If an employee is unable to perform, with or without reasonable accommodations, the essential functions of his or her position, or another position that the Company may offer, for a period of 6 months within any 12 month period his/her employment will be automatically terminated, unless prohibited by law.
Any employee subject to termination under this policy may apply for an extension of his/her leave. Requests for extensions will not be considered unless they (a) are received by the Company before termination would otherwise take effect and (b) include medical documentation demonstrating that the employee will be able to return to work, with or without accommodations, on a date certain within a reasonable time after termination would otherwise take effect.”
Mr. Cash was granted a six month leave under the above policy when he injured his back. Just prior to the expiration of the six month period, Cash sought assistance from the HR department on how to apply for LTD benefits. This caused HR to believe Cash would not be returning within six months. Three days before the six month period expired, Cash made application for LTD benefits. He then re-scheduled his follow-up doctor’s appointment so that his examination occurred after the expiration of the six month period. He was released to return to work with lifting restrictions. Cash immediately took his doctor’s restrictions to HR. The HR manager looked at the note, gave it back to Cash and told him he had been discharged three days earlier in accordance with the policy.
The Sixth Circuit affirmed the dismissal of Cash’s ADA case. The Court clarified that the policy was not an “inflexible blanket policy” which provided for automatic discharge after a certain date. Thus, the policy itself was not contrary to the ADA’s “individualized” inquiry requirement. The Sixth Circuit then distinguished the facts from those in Cehrs v. Northeast Ohio Alzheimer’s Research Ctr., 155 F3d 775 (6th Cir 1998) where the employee had requested an extension of leave before the leave expired. Cehrs is the case which said in dicta that there is no per se rule that a very lengthy leave such as one year could never constitute a reasonable accommodation under the ADA. With a policy similar to the one endorsed by the Sixth Circuit in Cash v. Siegel-Report, you can establish a general “point of no return” as long as you are prepared to make limited exceptions depending on the individualized circumstances. Remember, your approach must be flexible. Otherwise, you risk a ruling that you have failed to provide a reasonable accommodation as a matter of law.
By Dan Cohen – 8/6/14
In the past two weeks, I have had occasion to review several employment applications. On each occasion, I was specifically asked to recommend upgrades. Each of the applications was well designed for collecting information about the applicant’s qualifications. I would give them all high marks in this regard. But when it came to protecting the business against failure to hire claims and the full panoply of claims that employees assert, each application scored a “needs to improve.” This is not surprising to me as many businesses need to improve in the area of risk management. So, what were the common provisions missing from the applications?
- The At-Will Disclaimer—I don’t know of any employer these days that doesnot have an at-will disclaimer in their employment application, but I do know some that do not state that both employment and compensation can be terminated at will. I also know of others that do not have a non-modification clause and a superseding clause. The ability to terminate compensation at will allows you to reduce pay and benefits when necessary without facing the argument whether you can or not. The non-modification/non-superseding language is needed to prevent claims that someone modified the at-will nature of the employment relationship as well as claims that someone had made previous promises inconsistent with at will employment. The NLRB has gone as far as to reject at-will disclaimers where they are not subject to modification so it is important that the at-will provision contain a statement that it can be modified. You just want to make sure that modifications can only occur in writing, directed to the applicant/employee personally and only by the President of the Company.
- The Shortened Statute of Limitations—We have been able to get clients out of litigation early and on the cheap because of a reduced limitations period in the application. Most jurisdictions enforce these provisions. In Michigan, courts have repeatedly enforced provisions requiring applicants and/or employees to bring any and all claims against the employer within 180 days of the events giving rise to the claims. I say: why let an applicant or employee wait three years to pursue a discrimination case and up to six years to pursue a wrongful discharge case when you can reduce their opportunity to 180 days? If you choose to adopt this recommendation, make sure you require the applicant to bring suit within 180 days or any shorter limitations period so you don’t increase the 90 day limitations period for whistleblowers.
- The Jury Waiver—The days of significantly reducing your legal fees and greatly expediting the proceeding by arbitrating rather than litigating are likely behind us withthe advent of prolonged discovery and e-discovery in the arbitration forum. Keeping the case from a jury appears to be the remaining advantage of arbitration and because you give up your appeal rights in arbitration, I question whether arbitration is the answer these days. As I indicated in my April 22, 2014 Blog article about jury waivers, courts around the country and in Michigan have enforced them. The jury waiver accomplishes much that arbitration has to offer, without giving up your opportunity for summary dismissal at the front end and your appeal rights at the back-end.
- The Class Action Waiver—The Supreme Court has twice in recent years looked at the question of whether a class action waiver is enforceable and both times said they are. Although both cases involved a class action waiver in an arbitration agreement, lower court opinions have enforced similar provisions outside the arbitration context. As one federal judge noted, “there is no logical reason to distinguish a waiver in the context of an arbitration agreement from a waiver in the context of any other contract.” Palmer v. Convergys Corp., 2012 U.S. Dist. LEXIS 16200, *7 (M.D. Ga 2012). Opponents of such waivers undoubtedly will look to the D.R. Horton case where the NLRB found a class action waiver violated Section 7 of the NLRA. D.R. Horton, however, was rejected by the Fifth Circuit Court of Appeals. Although a decision on class action waivers has yet to reach Michigan, there is no reason to believe a Michigan court will reject them.
We have always preached that an ounce of medicine is worth a pound of cure. How hard is it to add a few more sentences to your certification? Be smart and upgrade your employment application sooner than later. It will take you less than an hour to do it and will save you a lot of money in the long run.