Termination

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The Equal Employment Opportunity Commission issued its new “Enforcement Guidance on Retaliation and Related Issues” on On August 25, 2016. Careful readers will be able to deduce from the section titled “Expansive Definition” that the EEOC uses an expansive definition of what constitutes protected activity. This activity is “protected” in the sense that any adverse action taken against someone for engaging in it is, by definition, retaliatory.

The EEOC Enforcement Guidance lists the following types of protected activity:

  1. Complaining about discrimination against oneself or others – This is the prototypical protected activity.
  2. Threatening to complain about discrimination against oneself or others
  3. Providing information in an employer’s investigation of discrimination or harassment
  4. Refusing to obey an order reasonably believed to be discriminatory
  5. “Passive resistance” – The EEOC gives the example here of a supervisor refusing a request to dissuade subordinates from filing EEO complaints. Apparently, the refusal doesn’t need to be articulated. Just not acting on the request is considered protected.

    Copyright: rtimages / 123RF Stock Photo
    Copyright: rtimages / 123RF Stock Photo
  6. Advising an employer on EEO compliance
  7. Resisting harassing behavior – The EEOC gives the example of an employee telling a supervisor to “leave me alone” and “stop it.” The fact that it’s a supervisor seems important here because the supervisor’s knowledge is imputed to the employer.
  8. Intervening to protect others from harassing behavior – Again, the EEOC example involves a co-worker intervening to stop harassment by a supervisor.
  9. Requesting accommodation for a disability or religion
  10. Complaining that pay practices are discriminatory – There doesn’t need to be an explicit reference to discrimination. If a woman says her pay is unfair and asks what men in the job are being paid, the EEOC deems that protected.

By taking a very broad view of what constitutes protected activity, the EEOC all but ensures that retaliation claims will remain the most popular charge it receives. We’ve previously described six steps that employers should take to protect themselves from these charges. As with so many types of employment claims, it pays to be proactive.

Many people are saying that this California Employment Law Blog doesn’t spend enough time discussing Mississippi law. Well today that’s going to change.

On August 8, 2016, the Fifth Circuit Court of Appeals overturned a decision saying that a company can fire an at-will employee for having a firearm in his truck in the company parking lot. In Swindol v. Aurora Flight Sciences Corporation, the employer had a rule against bringing a firearm onto company property. When it learned that Swindol had a firearm locked in his truck in the company lot, it terminated his employment.

Swindol sued for wrongful termination relying on section 45-9-55 of the Mississippi Code. That statute generally prohibits employers from having a policy or rule that “has the effect of prohibiting a person from transporting or storing a firearm in a locked vehicle ….” So the court ruled that, under Mississippi law, terminating an at-wil employee for having a gun in his car is unlawful.

Copyright: fxquadro / 123RF Stock Photo
Copyright: fxquadro / 123RF Stock Photo

How does this affect California employers? It doesn’t! We have no such statute here. If an employer wants to prohibit employees from having guns in their cars on company property, it may do so. If an employee breaks that rule, the employer can discipline the person, including termination in appropriate situations. Or, you can transfer them to Mississippi. Take your pick.

Bridgeport Continuing Education will be hosting a seminar titled: “Wrongful Termination, Harassment and Discrimination Claims” on July 29, 2016 in San Francisco. I will be speaking about Litigating and Defending Discrimination Claims, along with Jocelyn Burton. The program offers 5 hours of Mandatory Continuing Legal Education. You can get details and register here.

I hope to see you there!

Copyright: carlosphotos / 123RF Stock Photo
Copyright: carlosphotos / 123RF Stock Photo

The Equal Employment Opportunity Commission reports that, in fiscal year 2015, 44.5% of the charges it received alleged retaliation. That makes retaliation the most popular charge it received by a large margin. Previous statistics showed that retaliation claims were even more popular at the Department of Fair Employment and Housing – the EEOC’s California counterpart.

Copyright: bds / 123RF Stock Photo
Copyright: bds / 123RF Stock Photo

A lesson for employers here is that successfully addressing a discrimination complaint is only half the battle. Plenty of deficient discrimination claims have led to valid retaliation claims.

Expect retaliation claims to remain popular. Proactive employers should take steps now to minimize their risk. Last September, I discussed these six steps employers can take to avoid retaliation claims.

We recently updated a 15-page brochure that summarizes California’s unique employment law requirements. And it’s completely free. No postage and handling. No commitments to buy more. No need to provide your e-mail or credit card information. Just download the pdf and it’s all yours.

Copyright: drstokvektor / 123RF Stock Photo
Copyright: drstokvektor / 123RF Stock Photo

Spending a little time to determine if your company is sufficiently protected is a lot quicker and cheaper than waiting for a lawsuit, even if California has supposedly dropped to #2 on the list of judicial hellholes.

Special thanks to Tyreen Torner for her work updating this guide and Christina Armstrong for her work on prior versions.

I’ve just ordered my family’s holiday cards and started making my gift lists.  I know that the holidays will creep up on us quickly and before I relax with a gingerbread latte, there is work to be done.  I wanted to share my list of the five HR-related to-dos California employers should consider before the end of this year.

Year-end HR To-Do List
Copyright: mexrix / 123RF Stock Photo
  1. Review Your Independent Contractors: This year’s numerous court decisions and administrative guidelines make it virtually impossible for companies to categorize workers as independent contractors. Now is a good time to review who you are still paying via Form 1099. January 1 is the best time to convert misclassified independent contractors to W-2 employees so that tax paperwork will be as clean as possible and hopefully not raise any concerns. When in doubt, classify workers as employees and talk to your attorney to help craft the appropriate communication.  For classification criteria if you choose to continue to work with contractors, I invite you to read a Law360 article written by my colleague Colin Dougherty, entitled “Nothing New in DOL Worker Misclassification Memo.”
  2. Ensure Employees Are Properly Classified: While the DOL’s proposed amendments to increase the salary threshold for employee overtime exemptions are usually ignored by CA employers, if these amendments pass, they will indeed impact many CA workplaces. So, it is worth taking a look at questionably classified employees whose salaries are below the proposed threshold. Effective January 1, 2016, this amount in California will increase to approximately $800 per week ($41,600 per year) when California’s minimum wage increases to $10.00 per hour. The new federal proposal raises that amount to $970 per week ($50,440 annually). There is also a proposed increase in the “highly compensated” exemption from $100,000 to $125,148 annually. You may have a suspicion that some of your employees within this salary band should be earning overtime, in which case, the new year is as good a time as any to minimize overtime liability and reclassify those employees.
  3. Organize Personnel Files: Consider this a second chance at spring cleaning. At the end of each year, take the time to organize your employee files and I-9 Forms and separate the terminated employees from the active. Keep I-9 files separate from employee personnel files and maintain them for one-year post-termination. Keep terminated employee personnel files for three years after the date of separation.  Once that retention requirement has been met, grab the shredder.
  4. Review Your Paystubs: Why start another year wondering if you might get hit with the PAGA suits that are plaguing other California employers? Don’t assume your third-party payroll provider has it covered. Especially with the new reporting requirements on paid sick leave, best practices demand that accounting, human resources and payroll administrators are collaborating to ensure compliance. Luci Li recently posted a go-to list of what must be included on every employee’s regular wage statement.
  5. Analyze Compensation Practices: The California Fair Pay Act goes into effect January 1st so your policies and practices need to be in compliance. Evaluate employees by job duties, not title, to ensure men and women are compensated equally. If you find disparity, either fix it or be sure you can justify it. Jeff Polsky recently posted a rundown on the Fair Pay Act and what factors can legitimately be used to justify pay disparities.

Well, until the year-end close-out phone calls start rolling in, I think I’ll head over and get that latte… in a red cup, of course.

You terminate an employee.  Before you disable that employee’s login password, he downloads sensitive information to take with him.  Ideally, that information is encrypted and can’t be read on any outside computer.  But you never know what a capable hacker can do and once the information has been taken, the damage might be irreversible.  The Computer Fraud and Abuse Act (CFAA) may be one way for employers to recover for their economic harm.   Under the CFAA, an employee or former employee may be liable for obtaining information through intentional unauthorized access to the employer’s computer.  Generally, if the person intends to defraud the employer and obtains any information worth $5,000 or more within a 1 year period, or causes damage or loss to the computer system, that person is liable for the employer’s economic harm.

Copyright: andose24 / 123RF Stock Photo
Copyright: andose24 / 123RF Stock Photo

Recently at least one California court recognized that CFAA liability does not require circumvention of any technological barriers (i.e. hacking).  CFAA liability can arise when an employee or former employee’s log-in information is still functioning, but: 1) the employee has lost permission to access the employer’s systems (i.e. his employment ended), 2) knows he does not have permission, and 3) logs in to obtain information anyway.

The CFAA is not limited to employees or former employees.  It extends to contractors and anyone who once had authority to access the employer’s computer system but no longer has that privilege.

Takeaway: The best way to avoid employee theft of data and digital information is to have sophisticated barriers to prevent unauthorized access.  It is also a good idea to terminate a former employee’s log-in rights as soon as possible after their employment ends.  While prevention is key, it is not uncommon for companies to suffer data breaches at the hands of their employees.  If the employer suffers such an employee theft of proprietary information, the employer can recover damages from that employee under the CFAA.

To stay up to speed in this area, check out Fox Rothschild’s Privacy Compliance and Data Security Blog.

One of this blog’s most popular posts has been 24 Questions to Ask Before Terminating an Employee. Here’s another question to ask: Why now?

One way that employees and their lawyers attack the employer’s justification for the termination is to question the timing. Why wasn’t the decision made closer in time to the event the employer complains about? Why wasn’t it made after an earlier, more egregious occurrence?

Copyright: sifotography / 123RF Stock Photo
Copyright: sifotography / 123RF Stock Photo

If the termination gets challenged, the employee and his or her lawyer will have months to come up with holes in the employer’s rationale for terminating. So it’s important for employers and their counsel to give serious thought to how their justification will withstand that scrutiny. Therefore, add “Why now?” to my earlier list of questions to ask before terminating.

Of all the employment decisions employers make, none get litigated more often than termination decisions. To protect your company, review these questions before any termination.

  1. Does the employee have a contract of employment? If so, what does it say about grounds for termination?
  2. Has the employee acknowledged in writing that employment is terminable at will?
  3. Does the employer have any policies requiring it to take specific steps before termination? If so, has it taken those steps?
  4. Has the employee recently engaged in protected activity, such as complaining about discrimination, harassment, or some unethical or unlawful activity?
  5. Has the employee asked for an accommodation for a disability? Is there reason to believe that the reason for termination may be attributable to a disability?
  6. What is the reason for the termination?
  7. How strong is the evidence to support that reason?
  8. Has the issue been addressed with the employee? If so, is that documented?
  9. How long has the employee worked for the company?
  10. Does the employer plan to refill the position? If not, how will the former employee’s duties be covered?
  11. Is the employee in any protected category that is underrepresented within the organization?
  12. Has the employer considered less severe actions (warning, suspension, a cut in pay)?
  13. Has the employer dealt with similar issues in the past? If so, is this issue being handled consistently with the prior ones? If not, what’s the basis for treating this one differently?
  14. If the reason for termination is performance related, has the employee received performance evaluations that identify the problem?
  15. Has the employee received any awards or positive recognition?
  16. If the reason for termination is based on misconduct, has the employee been given a chance to tell his or her side of the story? Has the issue been investigated?

    Copyright: omnimages / 123RF Stock Photo
    Copyright: omnimages / 123RF Stock Photo
  17. Is there reason to believe that the employee has not received all the compensation and meal or rest breaks that applicable law requires?
  18. Does the person hold any other positions with the organization (such as being a corporate officer or director or trustee of a benefit plan)?
  19. If the employee challenges the decision, what grounds does the company think the employee will raise?
  20. Is there any particular reason why the decision may be perceived as unfair?
  21. Are there steps the company needs to take before termination to preserve client or customer relationships?
  22. Are there steps the company needs to take before termination to protect its information systems or confidential information?
  23. Is there any pending or threatened litigation that will require the employee’s involvement?
  24. Is there reason to be concerned that this employee may react violently?

The answers to these questions will help you determine if termination is appropriate and if you should take further steps, such as consulting experienced counsel, to protect your company.

Here’s an update I did on this post’s 1st birthday.

People identify with their jobs. Ask someone what they do and they’ll just assume you’re asking what their job is. They may spend more time sleeping than working. They may even spend work time sleeping. But no one ever responds to “What do you do?” with “I sleep.”

So it’s no surprise that some people react poorly to being terminated. However, the recently fired head of the Pacifica Foundation, which runs several radio stations (including public radio station KPFA in Berkeley) is not going away peacefully. In fact, as reported in the Mercury News, she cut the locks and barricaded herself in her old office. This occurred on March 17, 2014, four days after the foundation’s board voted to fire Summer Reese. At that point, she was one month into her tenure as Executive Director (although she’d previously held the position on an interim basis.) She is joined by her mother and other supporters and, as far as I can tell, they’re still there.

There are important lessons here for people who have to inform employees that they’re being terminated. You really can’t predict how they’re going to react, but you should expect them to be emotional. Emotional people don’t always think clearly. That means you may have to explain things more than once. You don’t want them leaving without a clear understanding of the basis for the decision. (At the same time, you don’t want to say something to make the situation worse.)

You also need to stay calm yourself and be prepared to diffuse tense situations. Or if you can’t diffuse the situation, you need to remove yourself and get assistance, which may be someone from security, human resources, or, if storming the barricades is necessary, the military.

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