Ten Things Any Business Owner Can Do Today to Protect Their Company

Navigating employment laws can be an overwhelming task, but there are steps all companies can take to address risks and fix problems before they become costly mistakes.

  1. Update your Employee Handbook – Admit it. You have not looked at the thing since 2001. Things have changed. New laws have been passed. Regulations have been updated. The Employee Handbook is the book that guides your organization- covering everything from sick leave to overtime pay- and it is essential that it does not guide people astray.
  2. Develop a social media plan – Social media is everywhere. Your customers are using social media to engage with your company, and your employees are interacting daily on blogs and social networking accounts. Many companies are surprised to learn that federal law permits employees to engage in certain types of activity online and a company can actually violate the law if it terminates an employee in violation of these rights. It is important that clear protocols are established and that the policies are not so sweeping as to interfere with an employee’s legitimate rights. Developing a comprehensive social media policy not only addresses permissible and improper behavior of employees while online, but it clearly establishes privacy and ownership rights over company accounts and devices and contains protocols to respond to a social media “emergency”before it becomes a public nightmare.
  3. Count your employees – Seriously, I mean it. Different laws apply to companies of different sizes. There are some major thresholds that a company crosses when it expands from a seven-person shop to an office of 15 and then to a superpower of 100 employees. If you noticed you are outgrowing your offices, there is a good chance you are in need of a tune up as to which laws apply to your company.
  4. Prepare confidentiality agreements – Your most valuable assets are your employees and your information. Don’t let your employees walk off with your proprietary information. While there are some protections built into the common laws of various states, you can also require employees to sign agreements to protect your confidential and proprietary information. These agreements need to be narrowly tailored to your protectable interest and drafted in accordance with the laws of your state.
  5. Review your data privacy and security protocols – The laws are constantly evolving in this world. There was a time when the mom and pop shop did not have to worry about hackers stealing their information, but now there are legitimate threats out there that may jeopardize- not only the company’s information- but the private information of its employees and customers. Companies need to ensure that they are protected against breaches and cyber-attacks.
  6. Bring on the BYOD policy – No, I am not talking about a BYOB party from your college years, I am referring to “Bring Your Own Device” policies. It is becoming more the norm than the exception to the rule for companies to allow employees to check their work email on their personal phone. A BYOD policy addresses this arrangement and sets the ground rules for what happens in various scenarios- such as if the employee is terminated, if data is compromised, and the process if the company needs to delete data or company emails from the phone.
  7. Revamp your applications- Oftentimes, the first thing prospective employees read when they come to your company is your application. It is the most general of documents, but it is also a minefield for legal issues. Some questions are simply unlawful to ask on a job application- such as questions relating to an employee’s arrests or an employee’s protected class (race, religion, color, national origin, sex, age, disability, veteran status, or any characteristic protected by applicable law).
  8. Train, train, train your employees – And when you think you have trained them enough, train them again. Training involves more than just the run-of-the-mill “this is how you do your job” approach. Supervisors should get sexual harassment training to help avoid any potential issues and so that the company can utilize appropriate defenses if a lawsuit is nonetheless brought by an employee. All employees should take part in safety training as companies have an obligation to provide a safe and healthy work environment. Job-specific training helps boost productivity and morale as employees will further develop their own niche and expertise.
  9. Audit job classifications – Do you have independent contractors working for your company? Do you have salaried employees who are not eligible for overtime pay? These are the types of positions that are prime targets for lawsuits and should be the focus of an audit. An audit is essentially a third party (such as outside counsel) coming in and reviewing the various job classifications and ensuring that everything is compliant with local, state, and federal law. There are a myriad of factors that need to be considered when evaluating compliance and just because a company and a worker agree to a certain arrangement does not mean it is necessarily lawful.
  10. Check the Form I-9s – Make sure they are properly completed by employees and retained by the company. Failing to properly verify an individual’s identity and eligibility to work can have serious consequences for a company.

*Just for clarity, I am not your attorney and this post is not legal advice (nor are any of the posts on this site). If you need legal advice, you should seek the advice of an attorney practicing in your jurisdiction.

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Live from the White House – An Inside Perspective of the State of the Union

IMG_5176As I told some of my colleagues– prior to this week, I had never been to Washington, D.C., but when the White House invites me, I go. Over 31.7 million people tuned in to watch President Obama give the State of the Union on Tuesday, January 20, 2015, and I had the honor of being invited by the White House to watch the State of the Union at the White House and take part in the post State of the Union White House chat with senior-level White House officials. During the post-SOTU chat, we heard from Sam Stein, Political Editor of the Huffington Post, and Dan Pfeiffer, Senior Advisor to President Obama. Part II included other senior officials, including Secretary of Labor, Thomas Perez.


The Main Event

042_smallMy particular interest in attending the event is two-fold. I wanted to hear more about the President’s community college initiative. As many of the regular readers of the blog know, I serve on the Board of Directors of the Maricopa Community College Foundation which receives and manages gifts on behalf of the Maricopa Community College District’s ten colleges, two skill centers, and multiple satellite centers. As one of the largest educational systems in the nation, the District educates a quarter million students annually. I recently spoke more about my involvement on Sonoran Living on ABC15. In the President’s SOTU spoilers, he had just announced his plan to make two years of community college free for deserving and qualifying students, and I knew it would inevitably be a focus on the State of the Union.

010_smallEqually important- and hopefully all readers know this about me by now- anything new and groundbreaking related to employment law is top on my list of “things I need to know every detail about ASAP.” The President’s plan to mandate seven days of paid leave for workers falls on that list. Right now, companies are not required to provide paid leave– except for limited instances when they may be required to provide leave for voting, jury duty, witness leave, etc. (Those laws vary by state).

Since social media was encouraged at this event to further promote engagement with those watching (or even just interested in) the State of the Union, I live-tweeted the State of the Union, as did the other attendees. The room was a mix of professors, leaders in various industries, social media gurus and bloggers, and some big advocates and supporters of community colleges. Having only watched State of the Union from my home in the past, it was electric to be surrounded by people cheering, shouting out responses, ooh’ing and aah’ing (particularly for the picture of toddler Obama on his bike), and applauding the progress and job growth we have seen over the past year.


The State of the Union 

Spoiler alert: “The State of the Union is strong.” The President covered a lot of areas in his speech, but I’ll focus on just a few that brought me to D.C. and have likely brought you to this blog.

“My fellow Americans, we too are a strong, tight-knit family. We, too, have made it through some hard times.”

Businesses should be particularly interested to hear that jobs are being created at the fastest pace since 1999. The unemployment rate is lower than it was before the financial crisis. Wages are starting to rise and more small businesses are raising employees’ pay now than at any time since 2007. In addition, American manufacturers have added almost 800,000 new jobs.

One major theme in the SOTU is that investing in one’s workforce is in a company’s long-term interest. I think this is something that we see throughout the superstar companies of our state. Spending the time to make everything right on the front-end– with policies, procedures, practices, and training– is worth it in the long run.

Another major point that President Obama made and Secretary Perez emphasized at the post-SOTU chat is that, in the 20th century, making high school free allowed us to train the best workforce in the world. The next step, as they have explained, is making community college free and attainable to everyone. This is important because, by the end of the decade, two of three job openings will require some higher education.

“That’s why I am sending this Congress a bold new plan to lower the cost of community college – to zero.” - President Obama

“Community colleges are the secret sauce to success in America.” - Secretary Perez at the post-SOTU chat

“I want to spread that idea all across America, so that two years of college becomes as free and universal in America as high school is today.” - President Obama

Companies should be excited about this vision as a skilled workforce can only benefit businesses and allow them to grow and compete in a global marketplace.

IMG_5214There were tons more topics addressed that are incredibly important– including gay marriage, relations with Cuba, and even ebola. If you want to read the State of the Union, you can here, or you can watch it here.

What Companies Should Expect

We will be hearing more about the paid leave initiative over the forthcoming months. And, this was not mentioned in the SOTU, but the proposed regulations relating to the white-collar exemptions will likely be issued by the Department of Labor in February.

The President has also asked Congress to pass legislation to address the threat of cyber attacks. I expect that, in the future, companies will have clearly defined reporting obligations in the event there is a breach in online/cyber security. Next month, a report will be issued by the White House that will detail steps that are being taken to strengthen privacy.

Since we were encouraged to engage with others on social media during the White House State of the Union Social, you can check out the play-by-play on my Twitter account: @Employment_Atty. Here are some of my 140 character tweets (mixed with some from the White House and others) below:

IMG_5247 IMG_5248 IMG_5244 IMG_5245 IMG_5243 IMG_5242 IMG_5241 IMG_5240 IMG_5237 IMG_5234 IMG_5235 IMG_5236 IMG_5233 IMG_5232 IMG_5231 IMG_5228 IMG_5227 IMG_5226 IMG_5225 IMG_5224 IMG_5223 IMG_5222 IMG_5221 IMG_5220 IMG_5219 IMG_5218 IMG_5217 IMG_5216 IMG_5229 IMG_5215

I am interested to see where President Obama’s initiatives may go and whether states will back the community college proposal which currently requires 25% of the funding to come from the states. And, since it’s the time of year for the annual recap, I suppose I should share that The State of the Blog is strong. Thanks for reading.

Secretary of Labor - Thomas Perez

Secretary of Labor – Thomas Perez



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Is Your Company Complying with the New OSHA Reporting Requirements?

Employers under federal OSHA’s jurisdiction are now required to report all work-related fatalities within 8 hours and all in-patient hospitalizations, amputations, and losses of an eye within 24 hours of finding about the incident.

Companies can call the nearest area office during normal business hours, the 24-hour OSHA hotline at 1-800-321-OSHA (1-800-321-6742), or (at a later date… likely in mid-January) companies can make a report online at www.osha.gov/report_online.

If a company is in a state that has a state-run plan (such as Arizona), those states may vary with implementation dates.

A fancy diagram that shows whether you need to report an injury/fatality was prepared by the Department of Labor and is available below or here.

OSHA flow

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It’s That Time of Year Again!

It’s that time of year again! Yes, it’s the season to be thankful and there are many holidays on the horizon. And it is also the time where we are overflowing with gatherings and activities for all our organizations and groups. I love the opportunity to connect with our friends and clients and learn and collaborate about all things employment law and everything in between! Here are some highlights:

Photo from Marriott.com … better than the photo I had taken ;)

Photo from Marriott.com … better than the photo I had taken ;)

This past month, I spoke at the Arizona Hospitality Human Resource Association meeting with my colleague, Lisa Coulter. The great thing about this group is it is a perfect excuse to check out amazing hotels around the valley while meeting with other colleagues in the HR industry. This meeting was at the Marriott Renaissance Phoenix Glendale Hotel and Spa. It was a perfect location for the meeting and for those traveling to the Cardinals’ football games.

Anyway, back to the HR stuff. We chatted about The Winding Road of the FMLA and ADA – which I also presented to some Snell clients back at the Employment Toolkit. One creative lawsuit we discussed is Robinson v. Carealliance Health, (D. S.C. 2014). In this case, an obstetrician at a hospital could not remain standing through deliveries due to a broken foot and wanted to perform deliveries and surgeries sitting down. The hospital medical staff suspended his privileges and began an investigation into whether he was competent to perform surgeries. He sued under Title III of the ADA – which requires a place of public accommodation to reasonably accommodate a person with a disability. He didn’t sue under Title I because he is not an employee – he is a contractor. The hospital’s motion to dismiss was denied, and the court explained that Title III is not limited to customers. This case seemed so interesting because typically you only think about the duty to accommodate as it relates to employees – not independent contractors. This case suggests – in that jurisdiction, at least – that companies may need to start considering about whether Title III of the ADA provides any protections to independent contractors.

We also talked about curbing abuse of the ADA - as it seems like we usually focus so much on FMLA abuse. One area companies oftentimes evaluate is whether an employee can/should be able to randomly miss work whenever they need to do so, as an accommodation. There are many examples where administrative employees may not necessarily need to be present and can call in last minute. There are other instances where employees are needed or the rest of the team simply cannot function. Here is one example of a case regarding a neonatal nurse who needed to miss work randomly for her condition and the company was justified in finding that it could not accommodate this request.

“An accommodation that would allow [the employee] to ‘simply . . . miss work whenever she felt she needed to and apparently for as long as she felt she needed to [a]s a matter of law . . . [is] not reasonable’ on its face.”

Samper v. Providence St. Vincent Medical Ctr., 675 F.3d 1233, 1240 (9th Cir. 2012).

Image from http://www.lockheedmartin.com/us/products/f35.html - because I just don't have F-35 (Lighting II) pictures from mid-air.

Image from http://www.lockheedmartin.com/us/products/f35.html – because I just don’t have F-35 (Lighting II) pictures from mid-air.

And then, last week, was the meeting for the National Association of Women in Construction (NAWIC), Phoenix Chapter. We heard from Tauny Woo, the Chief of Engineering and Programs at Luke Air Force Base. The mission at Luke AFB is currently transitioning to accept new Lockheed Martin Joint Strike Fighter (JSF) F-35 aircrafts. This NAWIC group is filled with women from a variety of companies in the construction industry. One area we discussed was the male:female ratio of women in the industry and Ms. Woo’s experience as a woman in the engineering field. It was fantastic to have a leader such as Ms. Woo share her thoughts and I would definitely recommend this group (which I recently joined) to others as well in the industry. [As a side-note, I am a member of my firm’s Women’s Initiative Committee, which was formed as part of our firm’s ongoing commitment to addressing issues and opportunities regarding women in the law on a firm-wide basis. I would encourage all organizations to continue evaluating, as we have done, all aspects of your organization. It is amazing to see what getting some great minds in a room can do.]

photo_4-110And just because I am little behind on my postings – I’ll mention the Fall Seminar in Sedona which is sponsored by the Labor and Employment section of the State Bar. I write about these events fairly often, as I am on the Executive Council of the L&E section of the State Bar, and this particular one is always a solid turnout and represents a great cross-section of attorneys from our state. I actually could only make it to the Friday portion, but am glad I made the trek to Sedona. The schedule was completely packed from beginning to end.


The case study in computer spoliation was phenomenal. It was a great reminder that almost everything can be retraced and uncovered. Just because a party says they deleted an important document does not mean the inquiry necessarily has to stop there.

photo_5-69The restrictive covenants update was really helpful because, as a practitioner, there has been a lot of discussion of Orca v. Noder – both the Arizona Court of Appeals decision, and the recent Supreme Court of Arizona decision issued two weeks ago. The Court of Appeals decision served as a great reminder to ensure that noncompetes and confidentiality agreements are narrowly tailored to a protectable interest. The Supreme Court of Arizona decision tackled the preemption issue- whether the Arizona Uniform Trade Secrets Act (AUTSA) displaces/preempts all common law claims arising from the misuse of confidential or proprietary information. (The court held no, it doesn’t). I always appreciate discussions regarding restrictive covenants as I think it is important for practitioners and companies to always evaluate and reevaluate their strategies to protect their most important assets.

That’s it for now. I hope everyone had a great Thanksgiving weekend.


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A Reminder About the Dangers of Employee Misclassification

3d person crowdThe Ninth Circuit provided a clear reminder to companies to ensure that employees are not misclassified as independent contractors. In Alexander v. FedEx Ground, a group of full-time delivery drivers from FedEx challenged their status as independent contractors, asserting claims for employment expenses and unpaid wages under the California Labor Code, along with other claims. The case has a complicated procedural history, as it was initially heard as part of multidistrict litigation involving a class of 2,300 FedEx drivers in California. The facts, however, are largely undisputed and the message is one that should resonate for companies operating throughout the United States.

In determining whether the drivers should be considered employees or independent contractors, the Ninth Circuit focused on FedEx’s right to control the manner in which the drivers perform their work. For example, the drivers are required to deliver packages to FedEx customers, wear FedEx uniforms, follow FedEx schedules and adhere to FedEx grooming standards. Managers from FedEx may join and supervise each driver up to four times per year. The drivers entered into automatically renewing agreements spanning from one to three years and, with consent from FedEx, the drivers are permitted to hire others to help perform their work. The drivers provide their own vehicles, which are required to meet all applicable federal, state and municipal laws and regulations. The vehicles are ultimately approved by FedEx, which specifies the logos and insignias and requires the vehicles to be painted “FedEx white.” Drivers maintain the vehicles at their own expense, but can only use them for FedEx while they are performing work for FedEx. FedEx asserted that the drivers were given “flexibility and entrepreneurial opportunities that no employee has.”

The parties acknowledged that the determination of employment status under California law is governed by the multi-factor test set forth in S.G. Borello & Sons, Inc. v. Department of Industrial Relations. Borello requires that a number of factors be weighed: “The principal test of an employment relationship is whether the person to whom service is rendered has the right to control the manner and means of accomplishing the result desired.” California courts also consider “secondary” indicia of the nature of the relationship, including:

  • the right to terminate at-will, without cause;
  • whether the one performing services is engaged in a distinct occupation or business;
  • the kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision;
  • the skill required in the particular occupation;
  • whether the principal or the worker supplies the instrumentalities, tools, and the place of work for the person doing the work;
  • the length of time for which the services are to be performed;
  • the method of payment, whether by the hour or by the job;
  • whether or not the work is part of the regular business of the principal; and
  • whether or not the parties believe they are creating the relationship of employer-employee.

These factors, however, are intertwined with one another and none of them are determinative. Likewise, the fact that the parties contractually agreed that the drivers would be independent contractors was not conclusive. Based on its analysis of the factors, the Ninth Circuit held that the drivers are employees as a matter of law under California’s right-to-control test and remanded to the district court with instructions to enter summary judgment for the plaintiffs on the question of employment status.

It is imperative that every company understand the laws of the various jurisdictions in which it operates. There are various state, federal and administrative tests that are used in determining whether a worker is an employee or independent contractor–including the IRS 20-Factor Test and the economic realities test of the Fair Labor Standards Act. Although, a determination by one court or administrative agency does not guarantee that another court or agency will rule the same as the standards can be different.

When a worker is misclassified, the employer may be responsible for substantial penalties, including taxes that should have been withheld from the employee, overtime pay, failure to pay workers’ compensation and failure to provide minimum healthcare coverage. A company should not wait to evaluate the classification of its independent contractors until a complaint has already been made or an agency investigator is waiting at its doorstep.

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