Posted by marykeating on July 31, 2010 under retaliation | 
The Sarbanes-Oxley Act imposed higher standards of conduct on publicly-traded companies, to avoid massive stock fraud and other ills in complex companies whose shares traded on public exchanges. The Act also created a degree of protection for whistleblowing employees who had a reasonable belief that their company was violating the law. The problem in implementing the law was the “reasonable belief” part; that created incentives to challenge the employee’s belief and basis.
The law was revised by the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law this month. Now, employees who complain to the Securities and Exchange Commission are automatically covered by the anti-retaliation provision. They are also entitled to double their back pay if the retaliation cost them their job. An employee who objects only within the company is protected from retaliation, but still must satisfy the reasonable belief standard. Finally, the law invalidates any effort to require claims to be arbitrated rather than go to court and be heard before a jury.
Naturally the hope is that employees, usually in the best position to detect fraud, will come forward to prevent the future Enron situations. The protection for internal complaints is helpful, too. Companies should reward employees for whistleblowing activities, given the stakes. Most employers would rather deal with problems internally rather than risk the SEC launching an investigation.
When the fraud is significant, however, the employee is best served by going directly to the SEC. The employee whose complaint leads to a recovery by the SEC is entitled to a share of the fine.
Posted by marykeating on July 29, 2010 under Economic situation, Unemployment compensation |
resident Obama signed into law the restoration of unemployment benefits last week. For workers whose benefits had expired seven weeks ago, that was good news. They are now entitled to a maximum of 99 weeks of benefits. To employers, the news most likely means another future hike in the unemployment tax applied to the payroll. Still, with unemployment near 10% in many places, and unemployment rates up in three-quarters of the metropolitan areas of the country, it is illogical to blame the unemployed.
In the census study, a question went unanswered about the effect of unemployment benefits on the incentive to find work. Keeping in mind that the benefits are relatively low, one would think that most people would continue to look for work at their former pay rate, since lifestyle tends to follow income level. A short article entitled “Five Myths About Unemployment” appeared in Sunday’s Washington Post, and addresses some of the concerns about the extension, and reasons that overall it is good for the country as well as the individual workers who need it.
Posted by marykeating on July 27, 2010 under Economic situation, Unemployment compensation |
A new study released by the census followed a group of people over several years (2004 through 2007) to compare their “spells” of unemployment. A spell of unemployment is defined as a period of a month or more that the person was unemployed, for whatever reason.
The study found that younger workers had more frequent but shorter spells and that workers in the age range 45 to 54 had the longest. The length of the spells was longer for more highly educated and for non-white workers. Women were more likely to experience periods of unemployment, but their spells were no longer than that of men.
The study also looked at whether people receiving unemployment benefits were more likely to be unemployed longer; apparently some policymakers believe that the availability of unemployment insurance acts as a disincentive to finding work. The length of the spell of unemployment was several weeks longer among those receiving the benefits. The study did not draw any conclusions from this difference, stating that it may be related to other factors. More interesting was the fact that only 20% of the individuals followed did receive unemployment benefits.
Posted by marykeating on July 16, 2010 under Uncategorized |
As reported here earlier, a massive gender bias lawsuit resulted in a large award for a class of female sales representatives. A jury in New York awarded compensatory and punitive damages to the class. The parties agreed to a settlement so that Novartis will not appeal the case. The presiding judge must approve the settlement before it resolves the case. Under the settlement, Novartis would pay back pay of about $60 million, another $92.5 million for compensatory damages, and $22.5 million for programs that would cleanse the workplace of discrimination. The 65-page settlement agreement sets forth in some detail the manner in which Novartis is to institute programs to deal with future complaints of sexual harassment or discrimination, and cultivating talents of women in the workforce.
Posted by marykeating on July 15, 2010 under Employment benefit issues |
The Supreme Court will decide an important issue in employee benefits in its next term. Under the federal law that governs employee benefits (ERISA), employees are entitled to get a copy of a summary plan description as well as notification of any important changes to the plan. The summary plan descriptions almost always state that the actual “plan” governs in cases of any differences in language. Although participants in the plan are entitled to obtain the full document upon request, they are not routinely given out without the request. Because pension plan document can easily run more than 100 pages, there are critical differences in language in plenty of cases. The plan amendments are even more difficult to comprehend, sometimes, since they can’t be understood without sitting down with the plan document itself to know how a change to Article IX might affect an employee’s entitlement to disability benefits, for example.
The Supreme Court took this case for a typical reason: different federal circuit courts of appeals used different standards to decide when employees may sue over the discrepancy between the summary plan description and the language of the longer plan. In the case before the Supreme Court, employees charged that CIGNA changed the pension plan, telling employees that it had “enhanced” the plan; in reality, the future benefits available upon retirement would be less favorable. The trial court found that by spinning its communications, CIGNA “wished to avoid the employee backlash likely to result from a thorough discussion of these aspects” of its changes to the plan. Still, the District Court concluded that it could not force the plan to reinstate the old benefits. The employees ask the Supreme Court to make clear that the trial courts are free to provide meaningful remedies for violation of the law.
Posted by marykeating on July 12, 2010 under Workplace privacy |
The Supreme court has agreed to hear a case arising out of California, but which will surely affect employees in Maryland. In NASA v. Nelson, 28 lower level employees of the Jet Propulsion Laboratory, part of California Technical Institute, some with years of service, objected to NASA’s first-ever demand that they undergo background investigations that delved into personal information. The employees objected in part because they were not involved in classified or restricted projects. Their employer, CalTech, had contracts with NASA to do robotics research. NASA’s decision to require the “National Agency Check with Inquiries” meant that the employees would be probed about such topics as the employee’s use of illegal drugs, sexual practices including homosexuality, adultery, and cohabitation, and mental, emotional, psychological and psychiatric issues. The background check would seek information from references, employers and landlords, about the above, as well as “general behavior and conduct.” The employees contended that their constitutional right to privacy was infringed by the use of this background check, given the non-sensitive nature of their work. If they refused to cooperate, they would lose their jobs.
After losing in the trial court, the employees appealed to the Ninth Circuit, which granted their request for an injunction against the background checks, pending a trial on the issues. In the meantime, though, the Supreme Court agreed to hear the case. Because the case has not been fully developed, the Supreme Court’s acceptance of review may mean that it’s interested in drawing a bright line for use of government background checks on non-government employees.
As a result of the proximity of Washington, D.C., as well as the Maryland presence of the National Security Agency, the Goddard Space Center, the Social Security Administration and the Centers for Medicare and Medicaid Services, many academic and private employers have contracts with the government. The federal government often uses its contracting power to effect broad changes. Affirmative action was instituted as a presidential executive order.
Posted by marykeating on July 7, 2010 under Economic situation |
The news has been full of disappointment over a weak job recovery. While economists say the recession has been over for a year, tell that to the long-term unemployed people. Congress failed to renew their extended unemployment benefits before recessing.
A new study shows growth, though it’s weak. The research looks at hard numbers of available jobs, production, sales and unemployment claims, together with polls of how difficult job seekers considere the market. Based on their aggregation, the Conference Board Employment Trade Index concludes that progress is slow and steady, up 9.8% from a year ago.
Posted by marykeating on July 6, 2010 under Family responsibility |
The Department of Labor enforces the Family and Medical Leave Act. In late June, the Department published an interpretation that clarifies its view on when an employee with FMLA rights may take leave to care for a child. An eligible employee may use FMLA time to care for an ill child if the employee has day-to-day responsibilities for the child and/or financially supports the child. That is, the law’s protections covers family members other than biological, adoptive or foster parents, including step-parents, other extended family members, and unmarried or same sex partners.
The law itself defines son or daughter to include “a child of a parson standing in loco parentis.” The Department makes the point that financial support is not necessary to prove if the employee seeking leave in fact has day-to-day responsibilities (at least part of the time) for the child. “Neither the statute nor the regulations restrict the number of parents a child may have under the FMLA.” Therefore, a child whose parents have remarried may have four people who qualify as parent; if a grandparent or other relative lives in one of the houses the number may climb. An employer is entitled to ask whether the employee seeking leave qualifies; but a “simple statement asserting that the requisite family relationship exists” is enough. There will seldom be detailed documentation to show the relationship. Because FMLA is not paid leave, although the employer is entitled to require an employee to use any available vacation or personal time during the FMLA leave, abuse of the privilege is unlikely.
Posted by marykeating on July 5, 2010 under retaliation |
The Supreme Court granted certiorari to a case from the Sixth Circuit, agreeing to hear a case in which an employee was denied protection against retaliation. In that case, an employee complained of discrimination; shortly thereafter, the employer terminated the employment of her fiance. The Sixth Circuit had trouble with the issue, and divided nearly evenly. The petitioner’s brief seeking Supreme Court review points out how effective retaliation could be if an employer were free to punish the worker’s friends and relatives for making a complaint. In some towns, where major employers have a large proportion of the populace employed, the threat of such retaliation would deter most people from making a complaint for fear that people they cared about would suffer.
The EEOC and the National Labor Relations Board both recognize this kind of retaliation as illegal.
Legally, the issue comes down to whether impermissible retaliation focuses on an employer’s method of retaliation, at which point punishing a person’s fiance would clearly violate the law. Or it could focus on the complainer’s work experience, in which case the employee would be unable to show a personal injury if she were still employed and not demoted. The next question becomes whether either the fired worker or the complaining worker has the ability under federal law to sue. The Fourth Circuit says that the complaining worker may not file suit when the relative is fired.
This case is on next term’s docket, so the decision may not be released before next June.
Posted by marykeating on July 1, 2010 under sexual harassment |
The Fourth Circuit Court of Appeals just sent back a sexual harassment case for trial. The sole owner of a medical practice made frequent sexual jokes and remarks, to both men and women alike, and to his employees, patients and vendors. A female doctor was so distressed by his behavior that she quit, and the EEOC sued on her behalf. The medical practice defended first on the basis that the owner “was a generally crude person who made vulgar comments to men and women alike.” This defense is sometimes successful, since a sexual harassment case requires a showing that the harasser’s behavior is so outrageous that it becomes a form of sexual discrimination. When someone is rude and crude to men and women equally, the employer can escape liability because both men and women are treated equally poorly. The Fourth Circuit noted that this doctor made comments to both sexes, but his comments were intended to demean women. In addition, he made “explicit or implicit proposals of sexual activity directly to the female doctor.
The Court spent more analysis on whether the harassment was severe enough to earn court intervention. Courts are skittish about acting as workplace civility police, and do not get involved with “general crudity.” The incidents at the medical practice were more than “a handful of isolated” events, though, and crossed the line into a “series of sexually graphic and unmistakably personal remarks that made her work environment intensely uncomfortable.”
The opinion leaves open a big gray area in which some crude remarks and pictures, and some (but not a lot) of sexual comments, are still legal. But decisions like this one, that require a jury to decide the extent of outrageous versus acceptable workplace behavior, represent a step forward.
