Connecticut Employment Law Blog

Insight on Labor & Employment Developments for Connecticut Businesses

Drafting Employment Agreements – What Can We Learn from Ralph Lauren

Posted in Highlight, Human Resources (HR) Compliance, Manager & HR Pro’s Resource Center, Wage & Hour
Polo Ralph Lauren's agreement is online

Polo Ralph Lauren’s agreement is online

One of the little facts that’s not widely known is that the SEC typically publishes all sorts of executive employment agreements for publicly-traded companies.  They’re ready and available for download.

Why might the average person do that? Well, for one, these agreements can sometimes contain the latest and greatest “crowd-sourced” language for executive agreements.  For many companies, attorneys have pored over these types of documents making sure that little nuances get covered and don’t turn into big issues.

Let’s take, for example, a company that’s been in the headlines of late: Ralph Lauren.  The company just named a new CEO — Stefan Larsson — to take the reins of this organization.

But in doing so, the company also sent to the SEC the new employment agreement of Larsson.  You can download it here, free of charge.

It’s a fascinating read into what’s in these agreements nowadays. It contains, a multi-year guarantee of employment, compensation details, a relocation “package”, etc.

But it also provides insight into how one company will handle how the relationship ends. For example, it allows the company to terminate the employee “without cause” at any time.  In such a case, however, there is also a draft severance agreement that would kick in with the following provision:

[T]he Corporation shall: (a) beginning with the first payroll period following the fifty-second (52nd) day following the date of termination of Executive’s employment pay the Executive, in accordance with the Corporation’s normal payroll practice, a monthly amount equal to one-twelfth (1/12th) of 400% of Executive’s Base Compensation, as in effect immediately prior to such termination of employment (and without giving effect to any diminution that is the basis for the Executive to resign for Good Reason), for the two-year period commencing on the date of such termination (the “Severance Period”)….

If you’re wondering, 400% of his current salary is $6 million per year.  So, putting it all together: $12M severance payable over two years.  And that doesn’t include the other benefits, stock awards, etc.

There’s much more to the agreement, including a non-compete provision that prohibits Larsson from participating in a “business engaged in the designing, marketing or distribution of premium lifestyle products”.

Ken Adams, of Adams Drafting, has much more on retrieving such agreements. The easiest way is through a paid service, but with a bit of sleuthing, the agreements are free and can be used for both drafting ideas and concepts.

When Parent Has Been Unlawfully Fired, Can Kids Sue Employer? Court Overrules Precedent

Posted in Discrimination & Harassment, Highlight, Human Resources (HR) Compliance, Litigation, Wage & Hour

crybabyThe Connecticut Law Tribune reported earlier this month on a new Connecticut Supreme Court case that, for the first time, allowed claims brought by kids to proceed based on injuries suffered by their parents.

Plaintiffs’ lawyers have a new weapon in their arsenal. The state Supreme Court, in a split decision, has ruled that Connecticut children have the right to sue for loss of consortium in personal injury cases. Previously, only spouses were eligible to collect such damages.

The court, in overturning longtime precedent, reasoned that there was a “unique emotional attachment” between parents and children, and that the grown-ups provide “critically important services” to their offspring.

So what’s the big deal for employers? Well, in doing so, the court reversed a decision nearly twenty years ago that had everything to do with employers.  That case,  Mendillo v. Board of Education for the Town of East Haddam, involved a wrongful discharge by a former high school principal.

In that suit, there was also a claim for loss of parental consortium — in other words, were the principal’s kids entitled to compensation because of the actions of the employer impacted their relationship with their parents. As noted by the Tribune: “The principal argued that the wrongful discharge forced her to take a job much further away from home, and thus the long commute deprived her kids of her love and affection.”

The court rejected the claim in Mendillo. But now, the new decision in Campos v. Coleman suggests that such a claim is revived:

Upon reconsideration of the relevant considerations, including the five factors that this court found determinative in Mendillo, we now agree with the concurring and dissenting opinion in Mendillo that the public policy factors favoring recognition of a cause of action for loss of parental consortium outweigh those factors disfavoring recognition. More specifically, we agree that the unique emotional attachment between parents and children, the importance of ensuring the continuity of the critically important services that parents provide to their children, society’s interest in the continued development of children as contributing members of society, and the public policies in favor of compensating innocent parties and deterring wrongdoing provide compelling reasons to recognize such a cause of action.

The court does place some limits on this new claim.  First, the claim must be joined with the parent’s “negligence claim whenever possible.”  Second, the claim does not survive if there has been a settlement or an adverse judgment against the parent.  Third, the child can only claim damages for the period when the child is a minor.  The court also suggests that the claim should be limited to damages arising from injury to the parent’s life.

The court goes on to add that a fact finding reviewing this must also “consider whether the parent’s injuries were insignificant or serious and whether they were temporary or permanent”.  Those will be determined by a case-by-case basis.

Is a parent’s termination of employment that last six months enough to state a claim? This last limitation by the court suggests perhaps not.  But suppose the employee now takes a job two hours away and doesn’t see her kids as often. What then?

At a minimum, the court’s overturning of Mendillo opens the door to a whole new set of potential claims against employers for terminating employees. How big an opening the court created remains to be seen.

Can You Keep a Secret in Human Resources?

Posted in Human Resources (HR) Compliance, Manager & HR Pro’s Resource Center

secretsEarlier this month, The New York Times ran another column in its Workalogist series that asked the following question:

Are conversations with a human resources department confidential? I’m contemplating retirement in about three years and would like to gather benefit information from human resources now — but I do not want my supervisor to know. Once I decide, I would like to give three weeks’ notice.

In responding, the Workalogist quotes one SHRM professional as saying that, “An H.R. professional should maintain the employee’s confidentiality to the extent possible.”  But note the caveat: HR is at the “razor’s edge of balancing confidentiality with the overall needs of the business.”  He notes that many workers assume some confidentiality even where it doesn’t exist:

Workers often assume there’s some sort of H.R. parallel to the confidentiality they’d expect from a doctor or a lawyer. That’s not the case, says Debi F. Debiak, a lawyer and labor and employment consultant in Montclair, N.J. Barring circumstances involving, for instance, a medical condition, “there is no legal obligation to maintain confidentiality” about a retirement discussion, she says.

Suzanne Lucas, the Evil HR Lady (her name, not mine), has often touched on this subject in her blog and columns.  She was asked whether it was “illegal” or immoral for the HR representative to forward to the company’s COO an employee’s angry e-mail:

Well, it’s not illegal (she says in her non-lawyer, non legal advice way). HR people are not required to keep a confidence as a doctor, priest or lawyer is. In fact, part of our job is to blab. Which means that I’m also going to suggest that it wasn’t necessarily immoral either.

Indeed, there may be times when such a referral is necessary to protect the company. Complaints of sexual harassment often need to be investigated, or reviewed.  In those instances, employers may not be able to honor a request to keep things “confidential”.

In short, those in human resources should realize that they shouldn’t make promises they can’t keep.  Protecting the company and investigating harassment complaints are two common areas when HR should be speaking up — instead of keeping silent.

Despite Ruling, Free Speech Statute Continues To Offers Some Defenses

Posted in Human Resources (HR) Compliance, Litigation, Wage & Hour

In two prior posts this week here and here, I talked about the significance of a new Connecticut Supreme Court case that has expanded the free speech rights of employees in the workplace.

For more on the case itself, check out these articles from the Hartford Courant and the Connecticut Law Tribune

But do employers have any other defenses to these types of claims? The “too long; didn’t read” answer is yes.

To answer the question, we need to look at the statute itself – Conn. Gen. Stat. Sec. 31-51q:

Any employer … who subjects any employee to discipline or discharge on account of the exercise by such employee of rights guaranteed by the first amendment to the United States Constitution or section 3, 4 or 14 of article first of the Constitution of the state, provided such activity does not substantially or materially interfere with the employee’s bona fide job performance or the working relationship between the employee and the employer, shall be liable to such employee for damages caused by such discipline or discharge, including punitive damages, and for reasonable attorney’s fees as part of the costs of any such action for damages. If the court determines that such action for damages was brought without substantial justification, the court may award costs and reasonable attorney’s fees to the employer.

I’ve highlighted portions that may be overlooked in defending such a claim, but shouldn’t.

First, the statute is pretty clear that not all adverse employment decisions are covered. Rather, it is only discipline or discharge that is covered. Thus, the employee who alleges that they are being harassed by their co-workers because of their speech isn’t likely to have the strongest claim.

But second, and more importantly, the state statute offers a form of protection that doesn’t have a federal counterpart.  The employee must show that the speech does not “substantially or materially interfere” with an employee’s job performance or working relationship.

Notice how I said “the employee”; I have long argued that it is the employee’s burden — according to the terms of the statute itself — to prove that the speech did not interfere.  That’s not typical of statutes, but it is one that has seen support in cases I’ve been involved with.

So what does this mean? Well, I suspect we’ll hear more about this aspect in the future.  For example, how does this play into the Pickering/Connick balancing test outlined by the Connecticut Supreme Court.

And lastly, the statute is unusual in that it provides an avenue for an employer to recover its own attorneys fees if the claims are found to have been brought without “substantial justification”.

Now, I grant you that this hasn’t been invoked by employers with success often (indeed, I haven’t been able to find a reported case in favor of an employer on this aspect.). But for negotiation purposes, it’s still there.

Thus, as employers digest the new case, it’s best not to forget that there are still other defenses to claims brought under this statute.

The new case from the Connecticut Supreme Court may have taken away one strong defense, but that doesn’t mean that employers need to roll over when such claims are brought.

Expanding Employee Free Speech Rights: How Bad Is the Court’s Decision for Employers?

Posted in Highlight, Human Resources (HR) Compliance, Litigation, Wage & Hour

microphoneIn yesterday’s post, I alerted you to a new Connecticut Supreme Court decision (Trusz v. UBS Realty Investors, LLC) that expanded employee free speech rights under the Connecticut Constitution.

But I wanted some time to think about the answer to the following question: How much did the court expand it?

And to that question, there are really two answers.

In some ways, the expansion is nearly unprecedented. After all, the U.S. Supreme Court in the Garcetti case ruled that free speech rights in the workplace were limited if the speech arises out of the employee’s official job duties.

In the Trusz case, though, the Connecticut Supreme Court explicitly rejected Garcetti and instead adopted the reasoning from Justice Souter in his Garcetti dissent, saying the Connecticut Constitution provides citizens with more free speech rights than their peers in every other state.

Employers and politicians who already believe that Connecticut is an unfriendly business climate will have one more piece of evidence for their argument.

In other ways, however, the decision’s impact may (and I emphasize may) be a little more muted.

So, let’s walk through some of the analysis.  First, as I noted above, the court rejected the Garcetti rule which established that workplace speech that relates to an employee’s official duties is not protected.

However, the court did not hold the opposite — that all speech pursuant to job duties IS protected — is true. Instead, what the court said is that only speech regarding matters of public concern (and, as limited by the Court’s decision as explained below), is still protected. This is, in essence, what the law was in Connecticut BEFORE Garcetti.

Indeed, before Garcetti, the U.S. Supreme Court, in what was known as the Pickering/Connick balancing test, held that employee speech in a public workplace is protected from employer discipline if it involves a matter of public concern AND if the employee’s interest in commenting on the matter outweighs the employer’s interest in promoting the efficient performance of public services.

It is this test that is adopted by the Connecticut Supreme Court in Trusz, as modified by the Trusz case itself.

So what is the new modified test? Here’s the key quote:

If an employee’s job related speech reflects a mere policy difference with the employer, it is not protected. It is only when the employee’s speech is on a matter of public concern and implicates an employer’s official dishonesty…other serious wrongdoing, or threatens to health and safety that the speech trumps the employer’s right to control its own employees and policies.

The court then goes on to say that it views the difference between the Garcetti test and the test its adopted here as a limited one:

The only employee speech that is protected by the modified Pickering/Connick test and that is not protected by Garcetti is speech pursuant to an employee’s job duties that is on a matter of public concern and involves the employer’s “official dishonesty…other serious wrongdoing, or threats to health and safety….

The court reiterates elsewhere that it views as a minor burden on employers: “[W]e conclude that the modified Pickering/Connick test does not place a significantly greater burden on the speech rights of private employers than does the Garcetti test.”

So, I come back to what I said earlier — the impact may be more muted.  It’ll be up to the courts to see how broadly they are willing to interpret the court’s holding here.  What is a “mere policy difference”? What constitutes “serious wrongdoing”? Are mere disagreements by the employee over the threat to “health and safety” enough to satisfy this burden?

We should see one immediate decision interpreting this case — namely when the federal court case that referred the matter to the Connecticut Supreme Court for an answer to the question of whether Garcetti applied, still needs to apply the the rule to the facts.  In other words, will the plaintiff, Trusz, win under this analysis?

But that’s just one case.

And in the short term, I suspect we’ll see a modest jump in cases that add this claim to their lawsuit.  So, for employers, I think it’s fair to say that 2016 promises to be a busier one than 2015. Just how busy? We’ll have to wait and see.

BREAKING: Connecticut Supreme Court Expands Employee Free Speech Claims

Posted in Highlight, Human Resources (HR) Compliance, Litigation, Wage & Hour
Connecticut Supreme Court

Connecticut Supreme Court

In an unanimous decision that was released late this morning, the Connecticut Supreme Court ruled the limits to free speech limits established by the U.S. Supreme Court in its Garcetti decision — namely that speech pursuant to an employee’s official job duties was not protected — did not apply to claims brought under the Connecticut Constitution.

In other words, there are broad protections for employees who raise issues of public concern in both the private and public workplaces after this decision.

Back in 2012, the Connecticut Supreme Court ruled in Schumann v. Dianon that First Amendment’s protections in the workplace didn’t extend to speech related to an employee’s job duties.

But the court left open the question of whether the Connecticut Constitution provide an independent and greater right of free speech for public (and even private) employees than the First Amendment of the U.S. Constitution.  In doing, the court stated: “We decline to reach the state constitutional issue raised in the plaintiff’s alternative ground for affirmance….”

That question was finally decided by the Court today in Trusz v. UBS Realty Investors, LLC and ruled that Connecticut’s Constitution does apply such protection.  It is, in essence, an adoption of the dissent in Garcetti.

The decision had been expected for some time.  Before oral argument in March, I previewed the decision in a post.

Mara Lee of the Hartford Courant, also previewed the decision back then.

Back in January before oral argument , I predicted a victory for employers but that the decision wouldn’t be unanimous.  So much for predictions.

In so ruling, the court is bringing its ruling back in line with the modified “Pickering/Connick” test outlined years ago by the court. The rule does not use the bright-line test of Garcetti, but still afford some protection to employers.  We’re reviewing exactly what that means today.

In full disclosure, my colleagues and I prepared an amicus brief on behalf of the Connecticut Business & Industry Association, in which we argued for a limited application of the Connecticut Constitution so I’m not going to get into an in-depth discussion yet in this post.

But suffice to say that this is probably one of the most significant Connecticut Supreme Court cases for employers in some time.  Stay tuned.

A Final Look at CHRO Case Statistics – Part 3

Posted in CHRO & EEOC, Discrimination & Harassment, Highlight, Human Resources (HR) Compliance

franklinSo, in my prior two posts about the new case statistical reports from the Connecticut Commission on Human Rights and Opportunities, I’ve looked at the case statistics to see that harassment and terms & conditions claims are up, and that ancestry, race & color claims filed are also up.

But what else can we glean from these numbers?

First, according to the reports, there are a lot more cases pending at the agency than in the last couple of years resulting in a big backlog of cases.  Specifically, there are 2670 active and pending cases at the agency by the end of the fiscal year. Contrast that with just 757 in 2014, and 209 in 2013.

That means that employers are likely to have many more of these cases floating around and they are moving at the proverbial snail’s pace.  Clearly, if these numbers are right, something isn’t working at the agency.

Second, there has been a (very modest) increase the number of referee decisions at the CHRO — ostensibly being that more cases are being tried through a public hearing.  But before you draw many conclusions, the numbers are still paltry.  In 2015, just 16 cases had a referee decision. That’s up from six in 2014 and three in 2013.

Nonetheless, the calendar schedule for contested hearings looks busy for the rest of the year so it remains to be seen whether this process will continue at the same levels.

Finally, for those that think that every case is a battle that is won or lost, think again. The plurality of cases at the agency alone are still closed through settlement. In 2015, 968 out of 2334 case closures came through a withdrawal with settlement.  And that doesn’t account for the 543 cases that are “released” from jurisdiction so that employees may file in court directly (and whether those cases are settled too).

In short, for employers, the process at the CHRO is slow and you’re still likely to end up trying to settle the case more often than not.

Statistics don’t tell us everything; but to ignore the numbers here is a mistake. Employers do best when they understand and adapt to today’s trends and not simply go by how things were 10 to 15 years ago.

Because the change has been substantial.

BREAKING: Connecticut Department of Labor Commissioner to Retire At End of Year

Posted in Labor Law & NLRB, Legislative Developments, Wage & Hour

Sharon Palmer, the Commissioner of the Connecticut Department of Labor, will retire at the end of this year, news that was first reported by the CT Mirror website.

According to CT Mirror:

In an interview, she described her decision to retire as driven by age and circumstance, not politics or a consequence of overseeing the Department of Labor at a difficult juncture. She laughed and added, however, “It’s tired me out, that’s for sure.”

Governor Dannel Malloy issued a press release announcing the retirement and commending the service of Commissioner Palmer:

Governor Dannel P. Malloy today announced that Connecticut Department of Labor Commissioner Sharon M. Palmer has opted to retire from the agency at the end of this year.  Commissioner Palmer began her position as the head of the department in August 2012 and was reappointed earlier this year when the Governor began his second term in office.

“I have always known Sharon to be an advocate for helping others, and have been impressed with her focus on workforce and education issues in our state, because both create good jobs and deliver a strong economy for Connecticut,” Governor Malloy said.  “Under Sharon’s tenure, many successful employment programs and services were developed and launched. I thank her for her unwavering dedication and her service.”

While Palmer’s background was as a teachers’ union president and AFL-CIO offer, her tenure at the CTDOL was marked by the lack of any major new department worker initiatives similar to those announced on a federal level. Instead, the Department has continued to focus on grants and training programs.

Indeed, while the press release says that the department “ramped up efforts to fight misclassification” of workers as independent contractors, we haven’t seen nearly the same publicity or efforts that have been attached to the United States Department of Labor activities.

Malloy said that a search for her successor begins now and presumably one will be named before Palmer’s departure.

Harassment and “Terms & Conditions” Claims Up Big; A Look at CHRO Statistics Part 2

Posted in CHRO & EEOC, Discrimination & Harassment, Highlight

chro2In yesterday’s post, I talked about how employment claims being filed are up big at the CHRO.

Indeed, in looking at the statistics further, I realized that it is the second highest number of claims being filed in the last 15 years.

So, FY 2015 was a very big year for claims.

But typically, in an improving economy, claims go down.  At least that’s the prevailing wisdom. So, what gives?

I wondered if the statistics could help explain the increase further?

In part, yes.

abacusIf you look at the “discharge” claims — that is, the claim that “I was fired because of discrimination” — those claims are basically the same (1174 for FY 2015 vs. 1164 in 2014.)

Compared with 2003 – the peak year for employment claims at 2211 — discharge claims are actually down substantially.  Indeed, in 2003, there were 1385 claims.  Thus, discharge claims are actually down 15 percent since 2003.

So, where are these claims coming from? One is from an obvious source: Retaliation claims.

In 2003, there were 516 claims filed. In 2014, 625. And in 2015, 753.  A 46 percent increase in the last decade or so and 20 percent over the last year alone.

Another is from a not so obvious source: from the “terms and conditions” area.  That is, employees who claim that they are being discriminated against in the “terms and conditions” of their employment when it comes to such things as hiring, firing, promotions, and pay. It also means an employer may not discriminate, for example, when granting breaks, approving leave, assigning work stations, or setting any other term or condition of employment – however small.

In 2003, there were 411 such claims filed. In 2014, 782. And in FY2015 —  a spike to 941.  That translates to a 130 percent increase in such claims over the last 12 years and 20 percent over the last year alone.

In my mind, that means that many current employees are bringing discrimination claims against their employers based on the terms and conditions of their employment.

One other source? Harassment claims.  Notably, I’m not talking about sexual harassment claims which are actually down from last year and down 24 percent from 2003.

Instead, this is the catch all claim for “I’m harassed” because of some other reason.  503 claims were filed in FY 2015 vs. 380 in 2014 and just 175 in 2003.  That’s an increase of nearly 190 percent in the last 12 years and 32 percent last year alone!

Again, these are typically brought by current employees who may be dissatistifed with things at work and believe that they are being “harassed” by their supervisor.

Indeed, the notion of “workplace bullying” movement is premised, at least in part, on this idea.

So, what’s the takeaway here? You may be looking for claims in the wrong spot. Dismissal claims are fairly constant, but it is claims by current employees that are up substantially over past years.

And while we’ve talked about the increase in retaliation claims for many years, but harassment and “terms & conditions” claims are now the hot areas — at least in Connecticut.

Is there anything else to be gleaned from the statistics? Any other reasons why we’re seeing an increase? Stay tuned for the next post.

Employment Discrimination Complaints Up Over 11 Percent in 2014-2015; A Look at CHRO Statistics Part 1

Posted in CHRO & EEOC, Discrimination & Harassment, Highlight
Numbers everywhere

Numbers everywhere

As I noted on Friday, the Connecticut Commission on Human Rights & Opportunities has, at long last, released case statistics for 2014-2015 fiscal year and has updated their statistics for the last several years.

As a result, there are lots of new numbers to pore over and information to be gleaned.

The biggest takeaway? The number of discrimination complaints filed with the agency is up — and up big over the last few years.

For the fiscal year ending June 30, 2015, 2482 complaints were filed state-wide, up from 2172 the year before and up from a low of 1838 just three years ago.

For those playing at home, that translates to a whopping 35% increase in discrimination complaints from FY2012 to FY2015.

Now, not all complaints filed with the CHRO are employment-related. But even those employment discrimination complaints are also up big.  In FY2015, 2017 employment complaints were filed, up from 1817 the year prior and up from 1559 three years ago.

Thus, employment complaints are up 29 percent in the past three years, and up 11 percent in the last year alone.

Given the improving economy and the corresponding drop in claims at the federal level, these state statistics are pretty surprising.

Diving deeper in the numbers, raises more eyebrows.  Where is this increase coming from?

  • Age claims? 503 in 2014 vs. 505 in 2015. Nope.
  • Sexual orientation claims? 62 in 2014 vs. 51 in 2015. A decrease.
  • Sex claims? 544 in 2014 vs. 575 in 2015. A modest increase.
  • Physical disability? 450 in 2014 vs. 484 in 2015. Again a modest increase.

But a few areas stand out:

  • Ancestry? 133 in 2014 vs. 189 in 2015. A huge increase of 42 percent!
  • Color? 409 in 2014 vs. 480 in 2015. Another big increase of over 17 percent.
  • Race? 538 in 2014 vs. 596 in 2015.  An increase of 11 percent, consistent with the overall trend.
  • National origin? 218 in 2014 vs. 258 in 2015.  A corresponding increase of over 18 percent.

Thus, while the statistics can only tell part of the story, it is apparent that claims for race, color, ancestry and national origin all account for a substantial part of the increase.

What does this mean for employers? What else can we glean from the statistics? Why are complaints going up in a relatively good economy?

I’ll tackle these questions and more in upcoming posts.