An Anti-Fraternization Policy Means One Thing To An Employer But Another Thing To A Court

By Peter K. Newman

I. Introduction

“What’s in a name? That which we call a rose by any other word would smell as sweet”

— from Romeo and Juliet (II, ii, 1-2)

This quote from Shakespeare has often been used to highlight situations when parties appear to go out of their way to create issues over commonly used words. Recently a court engaged in such behavior in striking down an employer’s anti-fraternization policy. This case confirms that employers must carefully draft their workplace policies to ensure that they do not directly or indirectly interfere with employee rights.

II. Guardsmark, LLC v. NLRB, 475 F. 3D 369 (February 2, 2007)

Guardsmark, a nationwide company providing security guard services, included in its employee handbook a section stating that employees must not “fraternize on duty or off duty, date or become overly friendly with the client’s employees or with co-employees.” The National Labor Relations Board (NLRB) rejected a Union unfair labor practice charge challenging the policy finding that the anti-fraternization policy was lawful because employees would reasonably understand the rule to prohibit only romantic personal relationships, rather than any activity protected by the NLRA.

Unwilling to let common sense get in the way of creating a legal issue, the D.C. Court of Appeals disagreed with the NLRB and held that the policy was unlawful. After consulting numerous dictionaries on the meaning of “fraternize,” the court concluded that each source listed fraternal association as the primary meaning, with social and intimate associations as a secondary meaning. Therefore, the court held that Guardsmark’s anti-fraternization policy would have a chilling effect on employees’ rights because they could interpret the rule to prohibit discussion about terms and conditions of employment with their union – a fraternal association as found in the definitions.

The court also noted that Guardsmark’s alleged business justification for the rule – to prevent security break downs caused by interpersonal relationships between guards – could still be achieved without violating the NLRA. The court suggested that Guardsmark either remove the word “fraternize” and defining personal or romantic relationships, or by adding an exception for “protected concerted activities.”

III. Practical Advice

If you think the court was unnecessarily splitting hairs over the meaning of the word “fraternize”, we agree. Even more amazing, there was no evidence that any employee ever interpreted the anti-fraternization policy in the way the court interpreted it. Finally, given that the term “protected concerted activity” has no firm definition, the Court’s suggestion that Guardmark fix its policy by adding an exception for “protected concerted activities” must be rejected because this broad exception would undermine the policy’s objective.

Despite our criticism of the court’s decision, it reaffirms that employers need to be careful in drafting their workplace policies. Here are four simple rules to follow in drafting any policy:

1. do not put anything in your employee handbook or other documents distributed to employees unless you mean it;

2. say only what you mean, and say it clearly;

3. for every policy ask yourself: do I really need to say this?; and

4. analyze every possible interpretation of the policy from a devil’s advocate point of view and then revise the policy language if any of those interpretations is different from what you intended.

If you have any questions about this eBriefing or would like to suggest a topic for a future eBriefing, please contact us.

Finally, mark your calendar for the April 24, 2007 “HRCI Credit on Wheels” co-sponsored by the Greater Cincinnati Human Relations Association (GCHRA), the Butler/Warren Society of Human Resources (Butler/Warren SHRM), and Wood & Lamping LLP. We have chartered a bus to take local SHRM members to Columbus for SHRM’s annual legislation day. On the trip to Columbus, I will be speaking on “Today’s Employee Claims and Effective Ways To Avoid Them.” On the return trip, Peter Burrell will be speaking on “How To Prevent Your Competitors From Stealing Your Trade Secrets And Key Employees.” We will be sending additional information about this program shortly.

If Your Company Is Not Managing Employee E-Mails, Internet Use, and Blogging, You Could Be Exposing Yourself To Unforeseen Legal Liability

By Peter K. Newman

I. Introduction

Although the advantages of employee use of e-mail, the internet, and blogs are obvious, it has created a significant number of potential legal problems for employers. Your employees’ electronic communications can expose you to potential legal liability. To prevent or limit this liability, every employer needs to proactively manage employee e-mail, Internet use, and blogging.

II. Overview Of The Potential Legal Challenges Created By Employees’ Electronic Communications and Practical Advice On How To Address Them

At yesterday’s PCMS’ Best Practices 2006 Seminar, I made a presentation entitled “Why Every Employer Needs To Proactively Manage Employee E-mail, Internet Use and Blogging.” A copy of my presentation materials is attached for your review. As you will read, the main take away message from my presentation is that every employer needs to proactively manage their employees’ electronic communications The following is a list of five preventive steps you should consider adopting:

. Decide which employees at your company need access to electronic media and restrict access to just those employees.

2. Assign these employees secret codes and passwords so that you can ensure that access is limited and monitor use by the authorized employees.

3. Adopt an E-mail, Internet Use and Blogging Policy, communicate it to your employees, and train them on the policy.

4. Adopt a Computerized Information Retention Policy and make sure all the key players in management, legal, human resources, and IT know what they must do when a claim is threatened or brought so you can avoid spoliation of evidence charges.

5. Finally, stay abreast of the new legal developments regarding electronic communications in the workplace and be prepared to respond to these new challenges.

III. Attend Our December 7, 2006 Employment Law Update

One way in which you can stay abreast of the latest legal developments regarding employee electronic communications and today’s other “hot” workplace issues, is by attending our Employment Law Update. Our Update is complimentary and has been approved for 4 hours of SHRM certification credit.

Significant Employment Law Developments: A Look Back At 2006 And A Look Forward To 2007

By Peter K. Newman

I. Introduction

We are happy to announce the return of the weekly e-Briefings. As before, our goal is to use our e-Briefings to keep you up-to-date on the latest developments in labor and employment law and to provide practical advice on how you can address them. If you have a suggested topic for a future e-Briefing, please contact us. The purpose of this e-Briefing is two fold. First, we will provide you with a quick summary of the five most significant employment law developments of 2006. Second, we will give you our prediction regarding the significant developments to watch in 2007.

II. The Five Most Significant 2006 Employment Law Developments.

A. The U.S. Supreme Court’s New “Reasonable Employee” Test For Determining When Employer Behavior Rises To The Level Of Unlawful Retaliation (Burlington Northern and Santa Fe Railway Co. v. White)

The Court rejected the position taken by several Circuit Court of Appeals that in order to prevail on a retaliation claim the plaintiff had to show an ultimate employment decision such as a termination or demotion. Instead, the Court held that any employer action that materially injures or harms an employee who has complained of discrimination and would dissuade a “reasonable employee” from making or supporting a discrimination charge will be actionable retaliation.

This case will undoubtedly encourage the plaintiff’s bar to file more retaliation claims. As Judge Alito bluntly stated in his concurring opinion, the majority’s broad reasonable employee test will “make a federal case out of any small difference in the way an employee who has engaged in protected conduct is treated.”

In the face of Burlington Northern’s reasonable employee test, every employer should consider adopting the following preventive measures:

1. Pre-Complaint prophylactics

a. Create a culture where complaints are welcomed.

b. Ensure that your policies have no retaliatory language

c. Develop written policies and standardized responses for recurring violations.

d. Clearly state employees’ performance expectations and regularly document their performance deficiencies.

2. Anti-retaliation training for all managers and supervisors.

3. Take all discrimination complaints seriously, thoroughly investigate them, and, where appropriate, take prompt corrective action.

B. Wage and Hour Collective and Class Actions.

The plaintiff’s bar have discovered a potential gold mine bringing collective actions under the Fair Labor Standards Act (FLSA), class actions under state wage-and-hour laws, or a combination of both. To avoid such claims, employers must do the following:

1. Work with your employment law attorney to conduct a wage-and-hour audit to ensure that:

a. your employees are being paid for all of their work time; and

b. they are properly classified as either exempt or non-exempt.

2. Based on the audit results, promptly implement any changes that need to be made and document the reasons for the changes.

3. Train your managers and supervisors to avoid practices that could become the basis for a disgruntled employee or group of disgruntled employees’ wage-and-hour claims (e.g. forcing employees to work “off the clock” or during their breaks).

C. A Public Employer’s Management Rights Prevail Over An Employees First Amendment Rights When The Employee Speaks As An Employee. (Garcetti v. Ceballos).

Reaffirming the management rights of public employers, the U.S. Supreme Court in Garcetti held that the balance of competing interests must be struck in favor of a public employer’s right to function efficiently where a public employee speaks not as a citizen, but as an employee.

For every public employer, the basic lessons to be learned from Garcetti are clear:

1. A public employee’s speech is unprotected in any case if the speech is unrelated to a matter of public concern.

2. However, if the speech is related to a matter of public concern, the employer must first identify the employees’ duties and then determine whether the employee’s speech was part of those duties because speech pursuant to job duties is no longer protected.

D. Claims for Interference and Retaliation Under The Family and Medical Leave Act (FMLA).

The FMLA permits covered employees to bring two types of claims:

1. Interference. If an employer denies FMLA leave to an employee who is entitled to such leave or fails to reinstate an employee who is entitled to reinstatement, an interference violation has occurred.

2. Retaliation. The FMLA prohibits an employer from harassing, disciplining, or terminating an employee for exercising his or her FMLA rights.

To avoid FMLA claims, every employer should:

1. First determine whether it is a covered employer.

2. If you are a covered employer, make sure you have posted the required federal poster, have the appropriate FMLA Policy in your employee handbook, and use the appropriate FMLA forms for employees to request leave, the FMLA Certificate of Health Care Provider and the employer’s response from. Properly documenting how your respond to an employee’s request for FMLA leave is extremely important.

3. Train your managers and supervisors to spot a FMLA issue and to direct the employee to the appropriate HR representative to respond appropriately. For example, an employee does not have to make a direct reference to the FMLA in order to be found to have requested FMLA leave. Instead, all the employee has to do is to put the employer on notice of his or her need to take FMLA eligible leave in order to trigger the employer’s legal obligation to respond to such a request. If your managers or supervisors do not know this, you could be needlessly exposing your company to potential employee FMLA claims.

D. The NLRB’s New Guidelines For Determining Who Is A Supervisor – Not Entitled To Union Representation (Oakwood Health Care, Inc.).

Section 2(11) of the National Labor Relations Act (NLRA) defines a “supervisor” as an employee who has authority to, among other things, “assign other employees,” or “responsibly to direct them,” and, in doing so, use “independent judgment.” In Oakwood Healthcare, Inc., the National Labor Relations Board issued new interpretations regarding these key terms. Based on these new interpretations, the Board found that 12 RNs who worked as charge nurses on a permanent basis, are supervisors.

How can employers take advantage of the Board’s new guidelines? For those employers who already have a unionized workforce, the costs of trying to remove a few employees from a bargaining unit based on an argument that they are now supervisors under the new guidelines probably will outweigh the benefits. On the other hand, for those employers facing a union organizing attempt or a potential for such an attempt, the new guidelines may be very useful because removing even a small number of employees from the potential bargaining unit could ultimately change the results of a union election.

II. Our Prediction For The Most Significant Employment Law Developments To Watch For In 2007.

A. The plaintiffs’ bar will take full advantage of the Burlington Northern “reasonable employee” test and file more retaliation claims against employers.

B. Following the lead of California plaintiff attorneys, employers will see more wage-and-hour collective actions under the FLSA and wage-and-hour class actions under state law. In fact, a leading plaintiff employment lawyer practically predicted this increase in such claims in a recent article published in the Cincinnati Bar Association Report discussing Ohio’s new minimum wage law.

C. With three major obesity cases pending in the courts, employers will see an increase in the number of obesity discrimination and harassment claims. The McGuire Woods law firm felt that this employment law development will be so significant that it recently launched an e-mail news alert dedicated solely to obesity and obesity-related litigation.

D. Expect the Democratically-controlled Congress to attempt to reverse the NLRB’s new guidelines for determining supervisor status announced in Oakwood Healthcare, Inc.

E. Because too many employers do not take potential employee claims under the FMLA seriously, the plaintiff’s bar will continue to file an increasing number of employee claims for FMLA interference and retaliation.

IV. Conclusion.

The above discussion should get you caught up on the five most significant 2006 employment law developments. We have also given you our prediction for what to watch for in 2007.

As we go forward, please keep in mind Vender Sender Law’s quotation that “experience is a hard teacher because she gives the test first, the lesson afterwards.” When these wise words are applied to today’s workplace, the message for every employer is clear: the preventive measures you adopt today will help you avoid employee claims tomorrow.

Wal-Mart Faces The Largest Employment Discrimination Class Action In History. Why Every Employer Should Be Concerned About This Decision.

By Peter K. Newman

I. Introduction

On February 6, 2007, a three-judge panel of the U.S. Court of Appeals for the Ninth Circit affirmed a controversial June, 2004 class certification order from the U.S. District Court for the Northern District of California that had certified a massive class action against Wal-Mart involving more than 1.5 million employees nationwide. (Dukes, et al. v. Wal-Mart Stores, Inc.). Because this decision addresses several cutting-edge class action issues regarding employment discrimination litigation, every employer should be concerned about the potential ramifications of this decision.

II. Facts of the Case.

In 2001, six female employees sued Wal-Mart in federal court in San Francisco alleging that Wal-Mart’s corporate culture in practice and in reality meant lower pay and fewer management positions for women in violation of Title VII of the Civil Rights Act of 1964. Specifically, the plaintiff’s alleged that Wal-Mart’s subjective promotion system prevented women from applying for or being considered for management-track positions.

III. The District Court’s Opinion.

In June, 2004, district court certified the class of over 1.5 million current and former female Wal-Mart employees. The court’s rationale was that plaintiffs had shown that Wal-Mart’s pay policies were significantly uniform across stores and that the policies “contain a common feature of subjectivity” relevant to plaintiffs’ claims of class-wide sex discrimination.

IV. Significant Parts Of The Ninth Circuit’s Decision.

A. The Court Found That The Class Representatives Are Typical.

In opposing class certification, Wal-Mart argued that personnel decisions at its stores were made by thousands of individual store managers across the country, thereby making it impossible for the plaintiffs to establish commonality and typicality. The Ninth Circuit rejected Wal-Mart’s argument finding that the plaintiffs had shown: (1) sufficient evidence supporting the existence of company-wide policies and practices; (2) expert opinion supporting the existence of company-wide policies and practices; (3) expert statistical evidence of class-wide gender disparities attributable to discrimination; and (4) anecdotal evidence from class members around the country of discriminatory attitudes held or tolerated by management.

B. The Court Also Found That the Plaintiffs’ Request For Punitive Damages And Back Pay Was Not A Bar To Class Certification.

The Ninth Circuit also rejected Wal-Mart’s argument that class certification was inappropriate under Federal Rule of Evidence 23(b)(2), which requires that injunctive relief predominate over claims for monetary relief.

Wal-Mart argued that, because so many of the class members were former employees, they would not benefit from injunctive relief and, consequently, such relief could not predominate. Wal-Mart also argued that the district court abused its discretion in finding that injunctive relief predominated simply because the plaintiffs claimed that it did.

The Ninth Circuit rejected both of these arguments. The Court found that: (1) the fact that some potential class members are former employees does not alter the primary intent of the plaintiffs as a whole; and (2) Wal-Mart failed to offer any evidence to cast doubt on the plaintiffs’ motivation.

C. In addition, The Court Found That Individualized Hearings Were Unnecessary.

The most controversial parts of the Ninth Circuit decision is its findings that individualized hearings were unnecessary and (2) Wal-Mart was not harmed because it was not able to make a defense to each individual class member’s claim.

Wal-Mart argued that it was entitled to individualized hearings on both punitive damages and lost pay issues, so that it would have an opportunity to present defenses to individual employee claims. Wal-Mart also argued that class certification was impossible because the examination of these issues would turn the class action into a series of mini-trials for each class member, thereby making the action unmanageable.

In rejecting these arguments, the Ninth Circuit determined that no legal authority required individualized hearings, and that statistical methods could be used to determine the appropriate relief in a manageable fashion.

V. The Dissenting Opinion.

In a blistering dissent, Judge Kleinfeld argued that certification threatens the rights of the woman involved in the lawsuit, as well as deprives Wal-Mart of the chance to mount an appropriate defense. He also worried that by certifying the class, Wal-Mart could be forced to settle even though it may have strong defenses that should be heard in court. Judge Kleinfeld suggested that the majority’s opinion put Wal-Mart in a position where it would be forced to settle: A lawsuit, like surgery, cannot be risk-free. Defendants are ordinarily wise to settle for an amount equal to the risk of losing multiplied by the potential loss. When the potential loss is stratospheric, a rational defendant will settle even the most unjust claim.

VI. Why The Court Of Appeals’ Decision Is Important To All Employers.

Wal-Mart reportedly will seek en banc review of the decision before the entire Ninth Circuit and may well ultimately seek review by the U.S. Supreme Court. Until this case is finally resolved, the plaintiffs’ bar will undoubtedly attempt to take advantage of the very pro-plaintiff parts of the Nint h Circuit’s decision by filing copycat lawsuits against smaller employers. Although your Company is not as big as Wal-Mart, you may eventually be targeted for class action litigation.

What can you do now to avoid being targeted? Two things. First, monitor the Dukes case to find out whether the full Ninth Circuit or the U.S. Supreme Court reverses this awful decision. Second, work with your employment attorney to conduct an audit of your pay and promotional practices to determine if your Company is susceptible to the same type of claims that the plaintiffs filed in Dukes. If so, take the appropriate preventive measures so you can avoid these potential claims.