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Christensen Law Group is moving!

movingWe’re so excited to be moving to new digs in Bishop Ranch 3 as of April 15!

Our new address is 2603 Camino Ramon, Suite 385, San Ramon, CA 94583. The telephone and fax numbers remain the same — 925.937.0800 (phone); 925.683.0975 (mobile); and 925.215.4514 (fax).

Come visit soon. No housewarming gifts necessary.

10 quick tips to limit the risk of an employment lawsuit

gavel moneyWhether you are thinking of starting a business, are hiring your first employee, or have been in business for years, this short list of tips can help you avoid some of the big legal pitfalls that come with employees.  (Adapted from a presentation I frequently give to business groups and anyone else who will listen to me for an hour or so.)

10.  Draft, and use frequently, written job descriptions.  Include the job title, essential duties of the job, and the skills, experience, and physical requirements necessary to do it.  Specify whether it’s an exempt position or hourly.  Use the job description when advertising openings, interviewing candidates, evaluating and disciplining employees, and considering ADA accommodations.  Review your job descriptions at least annually to make sure they comport with reality, and fix them if they don’t.

9.  Publish a compliant employee handbook.  A good handbook is a roadmap for dealing with employee issues and managing employee expectations.  Each state has differing laws, and those laws change with some regularity (paid sick leave in California, anyone), so having a lawyer or HR consultant help with drafting is a pretty good investment.  The internet is not a reliable source of handbook forms.

8.  Train supervisors regularly.  Don’t let that handbook gather dust.  Make sure your supervisors are trained in what it says.  In some states, like California, supervisors must receive certain training (on discrimination, harassment and, new for 2015, workplace bullying) every couple of years.  Well-trained supervisors can help nip potential problems in the bud.  Poorly-trained supervisors can create significant problems for which the business will almost always be liable (after an expensive lawsuit.)

7.  Tell your employees they are “at will”, but don’t rely too much on the concept.  Most states presume employees are employed at will, and can be fired (or can quit) at any time and for any reason or no reason at all.  Put at will language in your handbook and offer letters to confirm that the employees know it.  But also make sure you have a business justification for all your employment decisions, because you’ll need one to defend a discrimination case.

6.  Conduct regular employment practices audits.  Hire a consultant or lawyer to look over your handbook and other practices on an annual or biennial basis, and follow their advice regarding fixes.  It’s a modest expense that can limit major liability down the road. This is particularly true in the wage and hour/overtime area.  Almost by definition, practices problems affect every employee, and there can be long look-back periods in lawsuits.  By some studies $1 billion changes hands in wage suits each year.  Keep your share of that in your pocket.

5.  Evaluate employees regularly, and honestly.  Let everyone know how they are doing — it’s the fair thing to do, and it limits the kinds of surprises that lead to lawsuits.  Use a standardized form in you can, and train supervisors so that grading fluctuations are minimized.  And be honest, about good and bad.  Evaluations can be one of an employer’s best defenses against discrimination suits, but only if they honestly document deficiencies.

4.  Don’t fire a pregnant woman.  State and federal laws are extremely protective of expectant mothers, and juries do not like employers who treat them poorly.  (And the jury will see Mama and Baby at trial, you can be sure.)  Maternity leaves may be disruptive in the workplace, but far less so than a lawsuit.

3.  Get insurance.  There are many good insurance products that will protect against some of the risks of an employment lawsuit.  The market for those products is competitive, and the coverage is not expensive.  Don’t face a five- or six-figure defense bill by yourself if you don’t have to.  Talk to your insurance broker.

2.  Keep your eyes open and act promptly to correct problems.  Lawsuits don’t come without warning.  Train supervisors to look for trouble before it erupts into something that can’t be fixed without a jury.  The ostrich approach to employment risks is not a good one.

1.  Write everything down.  Many employment cases come down to documentation, and it’s always the employers job to keep it.  Juries often find that things that are not written down did not happen — or else they would have been written down, right?  An employer will never be given the benefit of the doubt in this context.  Save yourself the trouble and write down important facts, incidents, and discussions.

As a business owner or manager, you have enough to worry about.  Follow these tips and — hopefully — you can leave defending an employee lawsuit out of it.

Employers may owe for employees’ personal cell phone use

expensive billBYOD — “bring your own device” — policies have gained quite a bit of popularity among employers. These policies acknowledge the ubiquitous possession of cell phones and other mostly mobile devices by employees, and encourage or sometimes require employees to use their devices to do their jobs.

That’s a problem in California. The reason is California Labor Code section 2802, which says:

“An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer….”

So employees who use their cars to do the employer’s business need to be reimbursed by the employer for that use. But it goes well beyond that, as the court held recently in Cochran v. Schwan’s Home Service, Inc.

In Cochran, a class of customer service managers sought reimbursement for their personal cell phone use on the job. Cochran sought damages for violation of section 2802. The trial court denied certification of the class (which for these cases generally means the case is over), holding that there were too many individual questions relating to employees’ personal usage plans, etc.

The court of appeal reversed. According to the Court of Appeal, the trial court mistakenly assumed that (1) an employee does not incur any expenses if the cell phone charges are paid by a third person or if the employee did not purchase a different cell phone plan because of work-related cell phone usage, and (2) liability could not be determined without examining the specifics of each class member’s cell phone plan.The Court of Appeal determined that the details of a cell phone plan are essentially irrelevant. When cell phone use is mandatory, an employer must always reimburse an employee for “some reasonable percentage” of the personal cell phone bill, whether or not the employee incurred extra fees or changed plans to accommodate work-related cell phone usage.

The California Supreme Court turned down Schwan’s appeal in late 2014. So this is the law of the land, employers.

Here are the big takeaways for employers:

  1. Employees must be reimbursed for expenses necessarily incurred on the job. Not terribly controversial, but important from the standpoint of the terms and limits of your BYOD policy. If employees are using their own phones for their own purposes, no reimbursement. If they’re using them to do things the employer requires them to do, and doesn’t provide an alternative way of doing without fishing their own phone out, it’s a problem.
  2. How much an employee must be reimbursed is an open question. The court said “some reasonable percentage.” That’s court-speak for, “Don’t bother us with facts, ask a jury.” Which for most employers is a troubling prospect, since it means you don’t know what you owe until two years after the fact, when it’s well too late to do anything about it. This aspect of the decision is likely to spawn a mini-wave of suits to bring some clarity to what is essentially a completely meaningless phrase.
  3. Employee expenses must be reimbursed even if the employee can’t point to any “extra” expense he incurred. Most cell phone plans today come with unlimited or extremely liberal usage plans that are rarely exceeded. And thus, most employees won’t see — and employers won’t be able to quantify — any additional amount due on their bills for the work calls made on the employees’ phones. Doesn’t matter. Employers owe their share, whatever that may be.
  4. It’s helpful for employers to give employees the tools they need to do their jobs. If an employer can show the employees are using their own devices for their own convenience, it will be easier to avoid reimbursement. Employers who try to save a little bit by counting on employees’ devices are looking at a fairly open-ended obligation.
  5. Process counts. Regardless of the expense or how the employer reimburses it (mileage? percentage of personal/business use? flat percentage per month?), it’s a good idea to give employees an opportunity to argue that they are out more than the employer thinks. That idea works for automobile use, anyway, and might be useful to at least minimize penalties or attorneys’ fees if the process is there but the employee doesn’t use it.

Employers need to act to make sure the meter’s not running on their employees’ cell phone bills. Have your HR rep or lawyer check your reimbursement and BYOD policies in California. Otherwise, you’re apt to get an expensive surprise.

Top 10 ways to screw up a harassment investigation

carell 2“Uh, hi, Ms. HR Specialist? John Q. Worker here, from purchasing. I just thought you ought to know that my supervisor just said……”

It almost doesn’t matter what was said. What does matter is what you, as a business owner or HR specialist or supervisor needs to do when on the receiving end of that kind of communication. You need to conduct an investigation. And the way you do that can turn a little, solvable problem into a big, legal-fee-generating, morale-killing, six-figure mess.

So, fresh from the What Were They Thinking desk, the top 10 ways (taken from actual investigation files!) to boot a harassment investigation:

1. Ignore it. It may be human nature to want to minimize other people’s failings, but now is not the time to reflexively defend the alleged harasser, or tell the complainant to man up. If an employee is reporting harassment, it’s a problem, and you have to deal with it. Saying “I’m sure he was just joking,” or “you must have misunderstood,” or “you need a thick skin in sales” is going to make it worse. Respect the complaint, and respect the complainant for giving you the opportunity to fix it, hopefully without a lawsuit.

2. Procrastinate. Investigations are not fun to conduct. They don’t come with a deadline. They don’t add anything to the bottom line. No one likes to make decisions about who’s right and who’s wrong. So sometimes these things get low priority. Big mistake. Delaying an investigation is going to make it much harder to conduct, as people’s memories lapse or alibis get manufactured (yes, you heard me). Delay also violates your legal obligation to take reasonable steps to prevent harassment before it happens and to stop it when it does. Act, and act fast.

3.  Ignore what’s in your handbook and policies. Remember how much you paid for your handbook? Now’s the time to use it. Most likely, it has a description of what will be done in an investigation. That’s your instruction manual. Follow it. If you don’t, you’re going to be accused (and with good reason) of conducting a cover-up rather than a good faith investigation.

4.  Put the alleged harasser’s buddy, or boss, in charge.  Don’t laugh, it’s happened. Investigations are worthless if they are not objective. In fact, they are worse than worthless. They can turn a potentially isolated incident into a major disaster. Get someone who has no connection with either party to conduct the investigation. If you have to, hire someone.

5.  Promise secrecy. You may not promise complete confidentiality. To anyone, in any investigation. You need to talk to others to conduct the investigation. How else can you find out what occurred, or evaluate the credibility of the actors in the frequently-occurring “he said, she said” situation? An employee seeking confidentiality needs to be reminded that the company will not tolerate retaliation (see number 9). But your legal duty to thoroughly investigate means you can’t promise that no one will hear about what happened or who was involved.

6.  Ignore witnesses. If the complainant says someone heard or saw something, talk to them. Ignoring the complainant’s witnesses is another indication of a whitewash. To a jury your not talking to a potential witness means you reached your conclusion before the investigation started. That’s not a good thing.

7.  Keep informal (or no) records. Repeat with me the HR mantra — if it wasn’t documented, it didn’t happen. Write everything down. Keep it all in a separate file until the investigation is complete. If discipline is imposed against someone after the investigation is done, by all means the reason should be included in the appropriate personnel file — just not while the investigation is pending, please.

8.  Conclude with “I don’t know.” Let’s face it, many complaints boil down to one person’s word against another.  You still have to make a decision. Either something happened or it didn’t. Say what you think, and document the objective reasons why you think it.

9.  Retaliate. “I think I’ll just put the complainant on the night shift to separate them while I sort this whole thing out.” Wrong. You just retaliated against the complainant, and added a cause of action to the lawsuit. That goes for anything that could be characterized as adverse (more frequent performance reviews, exclusion from meetings, changes in responsibilities, and many more things can be considered retaliatory). Also, keep the complainant informed of the progress of the investigation, and follow up during and after the investigation to make sure nothing untoward is happening. And, I hope it goes without saying but will say it anyway, stop it if it is.

10.  Let harassment or discrimination slide. If you conclude that something improper happened, you need to do something about it. It doesn’t matter if the harasser is the biggest rainmaker in the firm, conduct that violates the law and your policies must have consequences.

Keep these in mind and things should go well (or as well as can be expected after someone’s complained). Ignore them, and the lesson can be a bit more difficult.

All I need to know about HR I learned in kindergarten

goldenruleThere’s a lot going on every day in employment law. New laws, new cases, new regulations, new requirements. It’s next to impossible for a huge HR department with significant resources to digest it all, let alone a small business owner doing everything else as well.

But there’s one rule every employee, HR rep, or owner knows already, that will serve you well regardless of the situation. I’m talking about the Golden Rule. Treating others how you’d wish to be treated. Basic fairness. That’s what most of us want, regardless of which side of the employer-employee divide you find yourself on.

Think I’m being too simplistic? From the legal point of view the Golden Rule has a lot to say for itself. What happens if you get in a dispute? Sure, you’ll be arguing case law and code sections. But worst case scenario, you are going to have to justify your actions to a jury of regular people. (And even if most cases settle, they settle based in large part on how the parties expect a jury to view the case.) How is the jury of laypeople going to judge what you did? Probably under some version of the Golden Rule.

They’ll ask questions like this:

  • Did the employee know what was expected?
  • Were decisions made after gathering all the facts?
  • Were similarly situated people generally treated the same?
  • Was power abused?
  • Did everyone get his or her say?
  • Was a promise made, and if so was it kept?
  • Was the process and the outcome fair?

And depending on the answers to those questions, they may go to a place no company wants them to be:

  • How much?

Now don’t get me wrong. This doesn’t mean you have to avoid managing, or that you need to keep non-performers or troublemakers in the ranks out of some misguided attempt to give a benefit when all doubt has long since left the building. If you think about it, failing to make the tough personnel decisions is unfair to the other workers, who are going to have to work harder to make up for someone else’s failings. As long as an employer can show it acted humanely, fairly, reasonably, and consistently, it will be well placed to prove that it’s the employee and not the boss who is responsible for the problem.

By all means keep up with all of the many rules, laws, and regulations that apply to workplace relations. And get professional help when you need it. But don’t miss the big picture sorting through the minutiae of statutes, regulations, administrative opinions and court cases. Make sure you run your decisions through the fairness meter as well.

Practice what you learned in kindergarten, and follow the Golden Rule. The jury will.

Ready for paid sick leave in California?

sickHello, California employers! Are you ready for paid sick leave? Better get working!

The California Healthy Workplaces, Healthy Families Act (AB 1522) goes live July 1, 2015. (Actually, it’s already gone live with respect to some elements, more on that later.) The law requires employers to provide California employees with at least three paid sick days per year. There is no small employer threshold — the new law applies to virtually all non-union businesses with a single employee. Employees must accrue at least one hour of paid sick leave for every 30 hours worked, beginning the later of July 1, 2015 or the employee’s 30th day of work. However, an employer can limit the use of sick leave to 3 days or 24 hours per year.

The law provides a few options for employers to comply:

  1. They can provide six hours of paid sick leave to employees in a lump sum at the beginning of the year.
  2. Employees can accrue paid sick leave at a rate of one hour per 30 hours worked. Employers who choose this option, however, must permit employees to accrue up to six days, or 48 hours, of paid sick leave (although use of sick leave can still be limited to 3 days/24 hours per year).
  3. Finally, employers can establish a PTO policy that provides benefits equivalent to or greater than those required by the law.

Employees who accrue sick leave pursuant to options 1 and 3 are entitled to carry over unused time to the following year. However, unless otherwise provided in an employer’s policies, employees are not entitled to payment for accrued but unused sick time upon termination.

Employers must also notify employees of the new law, through a workplace poster and an individual notification to employees hired before January 1, 2015, and to all subsequently hired employees within 7 days of their hire date (or any change in paid sick leave policy). You can find samples provided by the state Department of Labor here and here. The notice requirement became effective January 1, 2015 — so if you haven’t changed your poster or notified your employees, it’s time to get to work.

Don’t get stuck behind the 8-ball when the full law comes into effect on July 1, 2015. Contact your lawyer or HR specialist soon to make sure you’re not on the receiving end of a not-so-friendly notice from the Labor Commissioner.

Employment practices audit — getting up close and personal with your employment risk

proctologistMost people would prefer to volunteer for a colonoscopy than an audit. But, just like the invasive medical examination that identifies potential problems before it’s too late, an employment practices audit is one of the most cost effective way to proactively manage your employment risks — and perhaps save yourself a bundle in the bargain.

In an employment practices audit, a knowledgeable outsider comes to you, to shine a bright light into the dark recesses of your employment practices. Your policies, procedures, handbooks, and posters — and most important of all, your company’s actions — to make sure you are complying with the law and limiting to the extent possible the risks of a claim from an employee. Or a class of them.

What does it involve? Well, every employer is different, and so is every auditor. But in general, an effective audit will include:

  • A face-to-face meeting. The best audits start with a one on one meeting with the auditor. He or she will want to know a lot of information about your company and its employees. Only an auditor that really knows your mission, your values, your plans, and the day-to-day workings of your business will be able to properly advise you on what your risks are and how to address them.
  • A lot of reading. The auditor will need to find out what records and other written material you generate in connection with the business. Policy manuals and employee handbooks are important, but so too are job descriptions, performance reviews, payroll records, medical files, personnel files, employment applications, and on and on and on. All of these need to be evaluated for legal compliance and maintained in the appropriate place and for the appropriate time.
  • Analysis and mitigation of discrimination/EEO risk. The auditor will review your policies and practices to root out potential discrimination risks. Most companies get the basics right in the handbooks, but not all. Far fewer, however, walk the walk. Do supervisors know all of the legally protected classes? What to do if a complaint gets filed? How to perform a proper investigation? Do performance reviews or other documents show a culture of “go along to get along”? These and other issues should be analyzed by the auditor, who can also provide tips on fixing problems that come to light during the audit.
  • Review of payroll policies and practices. The auditor will also examine payroll policies and records to ensure compliance with federal and state laws concerning overtime. Are meal and rest breaks being given at the appropriate time? Are employees properly classified as exempt or non-exempt (an especially tricky issue in California)? Are paychecks being issued with the proper information, at the proper time? An audit should bring to light any potential issues lurking in your payroll policies.
  • Evaluation of policies regarding leaves of absence, medical leave, and pregnancy. The auditor will review procedures and practices relating to FMLA and its state analog CFRA, California’s challenging pregnancy disability leave law and other leaves to ensure compliance with applicable laws and no hidden discrimination red flags.
  • Any other relevant practices or employment issues. The auditor, armed with knowledge of your business and aspirations, should evaluate any other potential problems that might be hiding, including for instance independent contractor issues, OSHA and other workplace safety concerns, employee privacy, etc.
  • A written report card and follow up conferences as needed. A good auditor will prepare a written evaluation or report card at the end of the audit, with a concise identification of problems and concrete proposals to solve them.

A good employment practices audit will take some time to complete, but it shouldn’t take more than a week, at most two. It will take attention from the CEO level all the way through the ranks. Yes, devoting the time to properly do the job can be an inconvenient if temporary diversion from your business. And yes, it’s going to cost some money (check with your EPLI carrier though — some provide premium credits or other financial incentives to do an audit).

But compared to the financial exposure you’ll face when you find out, inevitably after the fact, that you’ve been doing it wrong for the past four years, the expense is well worth incurring.

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