One of the interesting strains to come out of the new round of publicity surrounding sexual harassment is a renewed focus on mandatory arbitration provisions.

And it comes from an unexpected source: former Fox News anchor Gretchen Carlson.

Indeed, Carlson recently gave an interview with former ESPN producer and self-titled “Commander-in-She” Valerie Gordon that may have slipped under radar in which she talks about such provisions.

She notes that mandatory or “forced” arbitration provisions enable sexual harassment to exist under the radar.

I’m doing some advocacy work on Capitol Hill, working on gathering bipartisan support to take the secrecy out of arbitration.  You know the forced arbitration in employment contracts makes these things secret.  We have to stop the silence around it.

In another recent interview, Carlson suggested that these arbitration provisions are often “in the fine print” and not focused on when people start a new job.  She’s talked about it during Senate press conferences this year as well.

I’ll be interested in reading more about Carlson’s perspective in her new book being released today.

Carlson’s message should be well taken by employers; if employers are using these arbitration provisions merely as a means to allow a system of harassment to continue, then shame on them.

But here’s the issue: As with most things employment law related, it’s far more nuanced.

There are times when arbitration makes sense for BOTH the employer and employee. Litigation is expensive — very expensive, some of my clients would say — and is filled with uncertainty and time-consuming drama.  I talked more about this in a 2014 post.

Arbitration can be less expensive and can allow both sides to be heard by a neutral third party much more quickly and effectively than a court system.

And yes, it avoids some publicity but again, that can benefit employees too.

By filing in arbitration, rather than court, an employee’s claims won’t be public and won’t seen by future employers as a potential lawsuit waiting to happen.

The U.S. Supreme Court is set to review this once more in a trio of consolidated cases, including whether employers can force employees to sign away rights to pursue a class actions.

And we shall see if the Connecticut General Assembly revisits the issue in the upcoming session in January 2018.  Until then, employers should continue to monitor developments in this area and figure out if mandatory arbitration provisions are right for your business.

 

If at first you succeed, try it again. 

Well, that may not be how the saying goes, but the first back-and-forth post between me and Nina Pirrotti, an employee-side attorney, was so well received that we’re back for another conversation. 

Today’s topic: What legislation are we both keeping our eyes out for at the Connecticut General Assembly?  

The Dialogue Begins

Dan Schwartz: So Nina, our first post was such a hit that I think we’re due for an encore.  Thanks for being up for this.

It has only bewn a few weeks, but it feels like we’re moving at warp speed on developments.  We could spend another post just on The Donald, sorry, Mr. President. Somehow I think we’re likely to talk about that again soon.

But let’s focus today on some of the legislative items we’re keeping an eye on, particularly in Connecticut. Each year, it seems like our General Assembly likes to roll out fresh employment law ideas.

Is there a particular bill that you’re keeping your eye on now from an employee-side perspective?

nina_t_pirrotti1-150x150Nina Pirrotti: I’m so glad you asked!   Yes, let me tell you about one bill that has been on my mind on the federal level (I am speaking about it at an ABA conference in sunny Puerto Vallarta really soon) and then I will give you a couple of highlights from our backyard.  

The federal bill that looms large for me right now (although concededly perhaps not as large as the prospect of sitting on the beach, tequila based beverage in hand) is the misleadingly named  Lawsuit Abuse Reduction Act (“LARA”) which would force judges to respond to Rule 11 motions in a particular manner. 

Rule 11 allows for the possibility of sanctions to be imposed on attorneys or parties who submit (or later advocate for) pleadings which have been filed for an improper purpose or which contain frivolous arguments or claims. 

While Rule 11 motions rear their ugly heads relatively rarely in litigation, a newly invigorated Republican majority in Congress has proposed LARA which would amend the sanctions provisions in Rule 11 to remove all judicial discretion – – regardless of the circumstances of the individual case- – in two critical respects. 

First it would require the court to sanction any attorney, law firm, or party who violates the rule.  Second it forces judges who find the rule has been violated to order the offending party to pay  the other party’s attorneys’ fees and costs.  Those in my world who oppose LARA say that there is no proof Rule 11 is not working in its current form, that the changes would burden the courts and that  its “once size fits all” mandatory sanctions would unfairly penalize employees in civil lawsuits.

Closer to home, two bills come to mind.  The first is a proposed modification of C.G.S.A. 31-51m, a statute which bars employers from retaliating against employees who report  employers’ unethical or legal wrongdoings to public bodies. 

The modification seeks to  protect employees who complain about such conduct internally or who refuse to participate in an activity they believe to be in violation of the law.   It also seeks to extend the timeline to bring an action under the law (employees now have only 90 days to file) and to provide for a greater array of damages if the employer violates the statute.

The second is a proposal to provide eligible employees with paid Family and Medical Leave Act leave.  The proposed legislation would require employees to contribute 1/2 of 1% of their wages to it (there would be no employer contribution) and employees cannot opt out it.   

We plaintiff employment lawyers would welcome both pieces of legislation as long overdue and reasonably tailored to protect Connecticut’s workforce.

What are your thoughts from the other side of the aisle, Dan?    Or is there other proposed legislation that has captured your attention?

Continue Reading The Dialogue: What Legislation We’re Keeping Our Eyes On

So this week, I’ll be speaking at our firm’s semi-annual Labor & Employment Law seminar.  Amazingly, we have reached capacity for this event and are now taking names for a waiting list! Many thanks to all who have signed up.  It should be a lot of fun.

Frequent blog contributor (and, well, a colleague) Chris Engler and I will be talking about the nuts and bolts of the hiring process.  Hiring is, after all, the engine that runs companies.  And making good hiring decisions can yield a ton of benefits in the long run.  Moreover, hiring good employees can help avoid lawsuits from arising too.

So what are we going to talk about? Well, we’re going to look at some of the new laws on hiring.  “Ban the Box” is the latest law to arise — limiting the ability of employers to ask about criminal histories on job applications.  Limits on the use of credit reports is another relatively recent law in the last few years.

After I put together the presentation, though, I came across a really interesting article in the Wall Street Journal about how some companies are using quirky interviews in their hiring process.    In doing so, the companies are striving for “culture fit”.

At Zappos, an online retailer famed for its offbeat office culture and corporate values, veteran employees size up candidates’ ability to blend in—and have veto power over those who miss the mark. The culture experts ask candidates questions that seemingly have little to do with the job, such as “If you were to write your biography, what would the title be?”

Rick Jordan, who leads talent acquisition for the nearly 1,500-person company, says longtime employees sometimes have a “gut feeling” about who is likely to succeed. About 1 in 8 don’t make the cut, he notes. “People who are true fits to the culture and believe what we believe—they’ll do anything for the business.”

But as the article notes, “culture-fit interviews raise concerns among employment experts, who warn that such screenings may be rife with potential for bias. Though these screenings haven’t been at the center of a major employment lawsuit, legal experts are concerned that they could put companies at risk.”

Indeed, there’s already a backlash against such interviews. Facebook, the article notes, “discourages its managers from using culture fit as a criteria in hiring, and calls the term ‘a bias trap,’ according to a spokeswoman.”

Where to from here? Well, employers should continually look at their hiring processes to ensure that the message of fair, non-discriminatory hiring is getting across to those who are making the decisions.

We’ll discuss this and more at the upcoming seminar. If you’re coming, please feel free to introduce yourself to me (during a break!).  See you then.

(P.S. Many thanks to Jon Hyman who alerted me to the hilarious video of President Obama’s “job interview” with Stephen Colbert. Worth a watch.)

interviewOn Friday, I had the opportunity to speak to the Human Resource Association of Greater New Haven. My sincere thanks to them for the invitation.

The group asked me to talk about various legal traps employers face in the hiring process and solutions to avoiding those issues.  Here are some of the points we talked about.

  1. Don’t Ask Bad Interview Questions – This is, in some ways, the easiest area to fix.  There are several types of questions that are (mostly) improper for employers to ask, such as, “Are you disabled?” or “Are you planning on having kids soon?”.  I’ve talked about this before, but the key is to plan your questions ahead of time and know which areas to avoid.
  2. Train Your Managers – Now that you know which questions are proper or improper to ask, be sure to let your hiring supervisors who are doing many of these interviews what the rules are as well. Don’t assume that they will ask good questions. Provide some training to them to give them the do’s and don’ts in the hiring process.
  3. Check the I-9s.  This is an area that can be overlooked, but it is important for employers to review the proper documentation at the time of an employee’s hire. New employees who forget their identification papers in the hopes that you’ll forget about it in a few days are cause for concern. Beyond that, be sure to keep your documentation on this or you’ll be susceptible to a government audit.
  4. Comply with FCRA.   Do you use a third-party to do background checks on new hires? If so, be sure to follow the Fair Credit Reporting Act, which mandates certain documentation be provided to employees and certain procedures to be followed. I’ve talked about it in a prior post as well.
  5. Implement Restrictive Covenants at Hiring.  When you use restrictive covenants (such as non-solicitation provisions) for your key employees, be sure to have that paperwork done at the time of an offer, or, on the employee’s first day at work. While continued employment could be enough consideration in some agreements, making a new job contingent on the restrictive covenants is a near sure-fire way to make sure there is sufficient consideration.  Some states, like Oregon, even mandate it in their laws.

A few years back, I had the opportunity to meet Allison West at a conference out in California.  She runs Employment Practices Specialists and does workplace investigations. (She’s also a terrific speaker and I’d highly recommend you go to a session where she is speaking.)

She recently let me know about an Association of Workplace Investigators institute that is coming to Connecticut for the first time in May of this year.  I asked her a few questions about it via e-mail and have edited that conversation here for those that have an interest in the subject.

So Allison, what exactly is the Association of Workplace Investigators? 

Allison: AWI is the premier organization in the nation dedicated to promoting and enhancing the quality of impartial workplace investigations. Its members include professionals from around the country who conduct workplace investigations.

Before I ask about the institute, can you share your thoughts about why companies should hire an outside investigator and in what circumstances?

Allison: Sure.  The law of workplace investigations is evolving and courts and agencies around the country have made it absolutely clear that employers have a legal obligation to conduct prompt, thorough and effective investigations when certain allegations of wrongdoing in the workplace arise.

One of the essential elements of an effective investigation is an impartial investigator.

Sometimes, investigations should be handled internally.

But there are times when it is critically important to bring in an outside investigator.

For example, say an employee makes allegations of harassment by the employer’s top executive. It will be difficult for an HR manager, who ultimately reports up to that top executive, to be (and, just as importantly, to appear to be) impartial and unbiased.

Can you provide some common mistakes you see from companies and its investigators when conducting an investigation?

Allison: We see a lot of mistakes, and they can be quite costly for employers.

One of the most common mistakes is the perceived or actual impartiality or bias of the investigator. Engaging someone who has skin in the game, so to speak, can render even a well-conducted investigation suspect.

Another mistake is a lack of thoroughness. Investigators will sometimes look at some of the evidence, or speak to some of the witnesses, but miss critical pieces. For an investigation to pass legal muster, it needs to account for all of the allegations and the evidence related to them.

Finally, another serious mistake we often see is the investigator doesn’t assess credibility. This is a crucial element in order to effectively reaching findings. Investigators must assess the credibility regarding motive, plausibility of the testimony, corroboration and other factors. Without assessing credibility, the investigator puts his or her own credibility at risk.

Happy to see that Connecticut will host the next institute. Can you tell us a little more about it? Is it open and how do people join?

Allison: You’re right, Dan. AWI is holding its first Institute outside of California for workplace investigators on May 4-8, 2015 in Mystic, Connecticut.

Personally, I think this week-long program is one of the most comprehensive trainings available for workplace investigators. We’ve got a nationally-recognized expert faculty and gold standard curriculum, so this program will provide attendees with a solid foundation and confidence they need to effectively conduct workplace investigations.

As to who should attend, I’d say: New and seasoned investigators; Attorneys, HR professionals, private investigators, security; Professionals from private and public sectors; Internal employee investigators of organizations; Outside, third-party investigators.

The program limit is 60 students, and we’re nearly half-full already.  Each previous Institute sold out close to the early registration deadline. That deadline is actually next week — on January 15th! You can get more information and register for the Institute on the AWI website.

People can contact AWI with any questions they might have at admin@aowi.org.

Thanks Allison for sharing the information. Sounds like an interesting program close to home. 

 

Six years ago, posts about layoffs were in vogue.  But it’s been a long while since we focused on posts about hiring.

With the economy generally stable (or shall we dare say improving?), it seems appropriate to talk about job interview questions.

There are lots of posts about the “best” job interview questions you can pose as an employer. (Where do you want to be in five years?)

So are there any questions that are off limits?

Yes, plenty of them. And I’m not talking about ridiculous hard ones like the ones posed by Google. Rather, the questions that have the potential to get you and your company into hot water.  Are they always illegal? Not necessarily. But there are just better ways to frame your question.

But first, a caveat: These types of lists have been done before. It’s hard to be original because the so-called “banned” questions don’t really change over time. So I’m going to pick five that I think are among the trickiest but commend you to posts like this that have much more detail.

1) Do you belong to a club or social organization?  Ok, perhaps this isn’t fair to start with this one. After all, it’s a fairly innocuous question.  However, ask yourself how the information you receive will be relevant to whether the applicant is qualified to do the job.  It has the potential of revealing information that you shouldn’t be considering about a person’s religious affiliation or sexual orientation.

What can you ask instead? Are there any professional or trade association groups you belong to? 

2) Do you have or plan to have children? This falls into the “just trying to make conversation” trap.  Most of the time, it’s not done for nefarious reasons. But it could be viewed that way.  And so long as the applicant does the job, his or her family obligations should not be a consideration.  If overtime is a consideration, ask specifically about that. Or travel.

What can you ask instead? Can you work overtime? Have you worked overtime in the past? And if the job requires travel, are you comfortable with traveling several days a month for business? 

3) Do you smoke? You may want a healthy workplace, but with limited exceptions, Connecticut law actually prohibits employers from discriminating against employees on the basis of their outside-the-workplace smoking habits.  If the concern is that it will interfere with a job or that employees have been violating company policies, be more specific. Ultimately, these types of questions probably won’t give you the answers you are seeking.

What can you ask instead? Have you ever been disciplined for violating employer policies on smoking in the workplace? 

4) Do you have a disability?  Perhaps the applicant has a visible disability. Don’t get carried away by your curiousity. Focus on the job qualifications.

What can you ask instead? Can you perform the job and, based on what you know about the position, how would you do so?

5) How much longer do you plan to work before you retire? I understand why you would want to know this information: You’re trying to stay away from hiring an older worker who will want to leave in a few years.  But the law says you can’t do so.

What can you ask instead? What are your long-term career goals?

And avoid word association tests.

One final cautionary note: It should be obvious, but don’t ever give Word Association tests. A classic late-night skit demonstrates that point.

(Caution: Even though it’s just from Saturday Night Live the language is now generally considered NSFW in this clip.)

Last week, I had the great fortune of being interviewed by the Lexblog Network — which help provide support to this blog.  The interview focused on best practices for employers in engaging in social media.

A few tidbits: We did this interview via Skype. If that’s not cool enough, I did so using my iPad on a wireless connection.  That’s it. No fancy microphones. No expensive cameras.  Truly amazing.

If you’re an employer, though, just think about how your employees could use the same technology — both in positive and negative ways.  As I’ve said before on this blog, the days of employers relying on firewalls to keep data from walking out the door are quickly disappearing with the widespread use of smartphones and tablets.

Regan MacBain Traub, CPC, SPHR

Today brings another installment of an occasional feature of “Five Questions”, in which we ask five questions of a noteworthy person in the employment law and human resources areas.  I’m pleased that Regan MacBain Traub, CPC, SPHR, founder and managing principal of The Human Resource Consortium, was able to take some time to respond to some questions.

Regan has extensive experience in dealing with complex strategy, change management, staffing and retention issues.  She has served as Connecticut State Director for the Society of Human Resource Management and a Member of the Executive Board for the Human Resource Association of Central Connecticut.

As you can see from the interview, she’s got a wealth of expertise and I thank Regan for sharing her thoughts and her time.  Let us know what you think about these issues in the comments section below.  If you know of others who you’d like to see interviewed,  feel free to comment as well.

1) Are companies starting to hire again? In other words, do things seem to be picking up?

We are seeing a number of positive business climate indicators on the HR front at this time. Organizations are beginning to invest in enhancing their human resource management infrastructure and practices again.

Since, unfortunately, many companies still see HR (particularly when it’s transaction-mired) as a cost center rather than revenue generator (when it’s achieved a more consistent strategic and consultative level), this definitely is a positive sign. We also are hearing more firms talking about, and taking action on, hiring again. We’re also seeing some investments in training initiatives. However, I still hear CFOs questioning the ROI they’ve received from significant expense in training in the past so training budgets will probably lag a bit unless they can prove ROI or are regulatory-driven.

Continue Reading Five Questions with… Regan MacBain Traub, Founder, The Human Resource Consortium

 

Continuing our occasional series of interviews with people of interest to human resource professionals in Connecticut, today we talk with Mathew Krukoski, CPA of J.H. Cohn’s Glastonbury, CT offices. Matthew is a Partner there and we had the opportunity to talk about the importance of having auditors review employee benefit plans, particularly as that employer grows. 

We’ll have some more of these types of interviews over the next few weeks as well.

1. You’ve been doing a lot more audits lately. For a company that is growing, at what point do they need to start bringing in an auditor to review their employee benefit plans?

A compliance review can be performed at any time. However, generally speaking, the Department of Labor requires an audit when a Company’s employee benefit plan exceeds 100 eligible participants at the beginning of the plan year. For growing companies with an existing plan, the filing requirements contain a provision, known as the "80-120 Participant Rule", that allow a plan sponsor to elect a deferral of the audit requirement until participation has exceeded 120 eligible participants at the beginning of the plan year. Once participation in a plan reaches 121 eligible participants or more, an audit will be required.

2. What types of tasks do you perform during an employee benefit plan audit?

An audit of a plan is not only for compliance with accounting principles generally accepted in the United States of America but also requires a review of its operations for compliance with Department of Labor and Internal Revenue Service laws and regulations. Procedures typically include a review of the plan’s internal control environment, testing of pertinent plan transactions (i.e., contributions, distributions, participant loans, etc…) and to ensure consistent application of the plan’s provisions. A sample of plan transactions are reviewed and tested at the plan level as well as for individual plan participants. The end product of an audit is a complete set of financial statements and auditor’s opinion that are required to be attached to the plan’s Form 5500 filing.

3. What are some common issues that you see when doing an audit?

Our audit compliance testing have revealed errors related to the calculation of participant contributions, the calculation of employer matching or profit-sharing contributions, the distribution of appropriate vested account balances and the utilization of a plan’s stated definition of compensation. However, for contributory defined contribution plans, the most common deficiency relates to the timely remittance of employee contributions.

4. A big topic of discussion lately has been the new 403(b) Plan Requirements. Can you talk about that a bit and what employers ought to be considering with respect to these plans?

In the past, sponsors of 403(b) plans had very limited reporting requirements. Beginning with the 2009 Form 5500 filings, the reporting requirements of these plans will become more in line with that of traditional 401(k) plans, including the Department of Labor’s audit requirement. Obviously, employers of large plans will need to engage an independent qualified public accountant to perform the audit of their 403(b) plan. However, the first item that a plan sponsor should focus on is the preparation of their plan records. This may involve talking with their ERISA attorney to clarify the need for an audit, talking with their service provider for the timing and availability of the plan’s financial information and potentially engaging the services of a third-party administrator to coordinate the recordkeeping and other compliance aspects of plan administration. Plan sponsors of 403(b) plans will need to allocate a significant amount of time and resources this year to understand and comply with the new reporting requirements.

 

Continue Reading Five Questions with… Mathew Krukoski, CPA on Employee Benefit Plan Audits