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Employment Playbook 2010 – 2011 Season

Employment Playbook 2010 – 2011 Season. Marilyn M. Fish, Esq. November 11, 2010. Gameplan. League Changes for Team Owners The Players Union The Disabled List (“DL”) Reverse Play Team Changes Take a Closer Look at Salary Caps and Free Agency Player Salaries and Watch-outs

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Employment Playbook 2010 – 2011 Season

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  1. Employment Playbook 2010 – 2011 Season Marilyn M. Fish, Esq. November 11, 2010

  2. Gameplan • League Changes for Team Owners • The Players Union • The Disabled List (“DL”) • Reverse Play • Team Changes • Take a Closer Look at Salary Caps and Free Agency • Player Salaries and Watch-outs • Free Agents or Dual-role Players • Updates on Salary and Hold-outs • Protective Gear – the Dodd Frank Act • Huddle

  3. League Changes for Team Owners Legislative Changes for Employers • The Players Union – Employee Free Choice Act • The Disabled List (“DL”) – Check-up on Your Disability & Health Policies • Reverse Play – Reverse Discrimination • Team Changes – Pro-employer Changes

  4. The Players Union • Employee Free Choice Act (EFCA) • Legislators plan to “keep up the pressure” • Card Check • Mandatory arbitration of contract terms • RESPECT Act • Narrows definition of “supervisor” to “responsibly directs work” • Increases types of people who can join a union • Recent Appointments to NLRB • Craig Becker • Mark Pearce

  5. Prevent Defense • Continue practicing preventative medicine • Union avoidance training • Policy reviews • Make employee engagement a priority • Recognition • Surveys • Employee empowerment projects

  6. The Disabled List Check-up on Your Disability & Health Policies • ADA Amendments Act Regulations (under consideration) • Proposed rule issued in September 2009 • EEOC currently reviewing comments; July 2010 targeted for final regulations • Genetic Information Non-Discrimination Act (effective November 21, 2009) • Consider it “HIPAA-plus” • Bars employers from obtaining or collecting “genetic information” or using such information for employment decisions • Regulations are being finalized and are expected to be issued this summer • Health Care Legislation (Patient Protection and Affordable Care Act) • Many provisions do not take effect until 2014 • Aspects of legislation to consider now: • Reinsurance program for early retirees • Auto-enrollment provisions • Reasonable break time for nursing mothers

  7. Prevent Defense • Update workplace posters, employee manuals, and other internal documents to reflect changes in the law • Review forms currently used for employee leaves of absence or accommodation requests to ensure they do not request family medical history or other data that could be deemed “genetic information” • Avoid “water cooler” discussions about medical issues that could lead to liability for discrimination based on genetic information or perceived disability • Be mindful of benefits changes you will need to make now

  8. The Reverse Play Consider Reverse Discrimination Risks • Reverse discrimination claims are on the rise • Recent cases have put reverse discrimination on the radar • Ricci v. DeStefano (Supreme Court) • Caucasian & Hispanic firefighters claimed reverse discrimination after they performed well on promotional exam only to have test results discarded because few African Americans scored well enough to be promoted • Supreme Court ruled in firefighters’ favor • Bryant v. Jones (Georgia) • Caucasian county managers claimed that top county officials forced Caucasians out and replaced them with African-American employees • Jury awarded more than $180,000

  9. Prevent Defense • However benevolent an action may seem, make sure race or gender does not factor into the decision • Always select the most qualified candidate and ensure the decision is supported by documentation • Review selection devices on the front end and avoid changing course mid-steam

  10. Expansion Plans Take Advantage of Pro-Employer Changes • Hiring Incentives to Restore Employment Act of 2010 (HIRE Act) • Signed into law March 18, 2010 • To stimulate hiring unemployed workers, the HIRE Act exempts business that hire “qualified individuals” from paying the employer’s 6.2% share of Social Security payroll tax. Exemption applies for wages for employment between March 19, 2010 and December 31, 2010 • Also provides up to a one-time $1,000 credit for each “retained worker” for any tax year ending after March 18, 2010 • Proposed Non-Compete Legislation, Georgia HR 178 • In Georgia, restrictive covenants are only permitted to the extent they are reasonable in duration, territory and scope of activity. If any portion of the covenant is unenforceable, the entire agreement fails • HR 178 would permit “blue-pencil” rule • Passed by House and referred by Senate in March 2010 • Voter voted “YES” in November 2010 elections

  11. Prevent Defense • Take advantage of the HIRE Act • Cannot overlap with Work Opportunity Tax Credit • Create affidavit for “qualified individuals” • Support favorable changes to Georgia non-compete law (HR 178) • Keep an eye out for other pro-employer changes

  12. Salary Caps and Free Agency Look Closer at Employee Compensation • Player Salaries and Watch-outs • Review Salaries • Changing Standards • Free Agency or Dual-role Players: “Get it Right”; Independent Contractors and the Co-employment Dilemma • Additional Legislation • Increased Agency and Court Actions • Office of the Commissioner Updates on Salary and Hold-outs: Wage & Hour Update

  13. Player Salaries & Watch-outs • Ledbetter Fair Pay Act (passed January 29, 2009) • Recall: Ledbetter Fair Pay Act extended statute of limitations on claims alleging a discriminatory compensation decision or “other practice;” “Other practice” is not defined • Courts interpreting “other practice” tend to reject failure to hire or promote claims, but tenure and transfer claims have been permitted • Paycheck Fairness Act (under consideration) • Prohibits retaliation against employees who ask about or disclose their wages • Drum v. Leeson Electric Corp. (8th Cir.) • Male employee’s superior negotiating skills cannot justify $20,000 salary differential

  14. Prevent Defense • Review employee salaries • Make sure all employees fall within determined salary bands • Identify and resolve outliers • Prior payroll problems, policy changes and negotiation skills are do not justify pay disparities • “The market made me do it” is not a defense • Keep an eye on changing standards • Possible movement with Paycheck Fairness Act • Creative plaintiffs trying to stretch the scope of “other practices” • Don’t forget about garnishments • Federal: Cannot discharge an employee for a garnishment • Georgia: Limits amount of garnishment; OCGA 18-4-20

  15. Free Agents or Dual-role Players Independent Contractors & Co-employment • Continued trend towards legislation aimed at streamlining definitions and closing loopholes • Taxpayer Responsibility, Accountability and Consistency Act of 2009 • Employee Misclassification Prevention Act of 2008 • Independent Contractor Proper Classification Act of 2007 • Uptick in government agency activities • DOL to add 100 new positions • IRS to audit 6,000 employers • State initiatives (task forces, legislation) • Class actions continue with sizeable settlements • Snyder’s of Hanover: $10 million

  16. Man-to-Man Defense • Now more than ever, it is crucial to “Get It Right” • Since federal and state laws offer differing tests, consider the following factors when reviewing contractor arrangements: • Do you have employees doing the same sort of work? • What sort of instruction do you give to the contractor? • Do you evaluate the contractor’s performance? • Do you provide training? • Is the contractor allowed to work for other companies in addition to yours? • Is the arrangement short-term / limited to a particular project? • Is the work performed by the contractor central to your business, or is it “secondary”? • Think twice before retaining a former employee as an independent contractor

  17. Office of the Commissioner Wage & Hour Developments • DOL Initiatives • Requested $20 Million increase in budget for 2011 • Restoring and expanding enforcement capacity through more investigators, including many bi-lingual • Target investigations • “Plan, Prevent, and Protect” Strategy • DOL plans to propose rules requiring employers to adopt compliance plans; employers will need to: • Create a ‘plan’ to find and fix problems • ‘Prevent’ problems by thoroughly implementing plan • ‘Protect’ employees by ensuring follow-through • States taking notice of misclassification and FLSA issues • Significant areas of litigation • Compensable Time • Donning and Doffing • Tipping and Tip Pooling

  18. Prevent Defense • Be diligent in review of classifications • Job title alone is not enough • Watch for contractor issues • Changes to duties and responsibilities over time may change exemption applicability • Recognize the issue • DOL and Plaintiffs’ counsel focusing on industry, not just organizations where a complaint is filed • Watch for websites and other solicitations of possible plaintiffs • Conduct self-audits to determine if there is an issue • Conduct mock audits to prepare for actual audit

  19. Pads & Protective Gear Whistleblower Incentives & Protections • Dodd Frank Act (July 21, 2009) • Incentivizes employees to report securities violations and accounting irregularities to the SEC • Employees who provide “original information” to the SEC that results in $1M + in monetary sanctions may receive reward ranging from 10% to 30% of amount recovered • Applies to any securities law violation • Enhances whistleblower protection for employees reporting irregularities • Allows employees to bring private actions directly in federal court (without agency proceedings) • Additional provision provides detailed whistleblower protection for financial services employees

  20. Prevent Defense • Ensure effective internal process for reporting suspected financial irregularities • Multiple reporting channels • Anonymous tip line • Prompt investigation • Ensure no retaliation or perceived retaliation • Review any job changes, performance assessments, salary adjustments, etc. • Schedule periodic “check-ins” with employee reporting irregularities to ensure employee remains comfortable in work environment

  21. Huddle Social Networking – “Friend or Foe” • Various methods of using social networking • “Friend” • Employers use for branding, marketing, building loyalty among employees and customers, communicating with employees/public, recruiting • Employees use to find jobs, communicate with other employees, professional networking • “Foe” • Violations of privacy, inappropriate disclosure of confidential information or trade secrets, defamation, unauthorized monitoring, excessive personal use during work time, harassing other employees or contacts, misrepresentation • Little guidance from courts at this time

  22. Watch for the Penalty Flag • Potential Minefields • Employee representations on Blogs • Surveillance/monitoring of employee blogs • Privacy/defamation • State protection of “legal recreational activities” • National Labor Relations Act • Disclosure of trade secrets and/or confidential information • Harassment and discrimination • Fair Labor Standards Act • Use in lawsuits/on-line references • Employee relations

  23. Prevent Defense • Ensure solid policies and keep updating as changes in law/technology • Control the message • Educate employees on the benefits and risks • Avoid surprising employees • Warn employees of monitoring policy • Warn applicants of background search • Warn employees that violations may lead to termination • Audit company policies to ensure compliance • Keep abreast of current articles and anecdotes and developing laws and regulations to be pro-active as issues arise “Technology is changing fast than the law and faster than our social norms. So the law and the courts don’t really know how to handle this. And it’s not like they’ll catch up.” Nicholas Thompson, Senior Editor of Wired Magazine

  24. Adjustments at Halftime • Now is a good time to revise and update your policies • Keep your eyes open for changing standards and technology • Education employees on issues and risks • Be pro-active, self-audit • Unconventional theories and claims are becoming the new frontier for Plaintiffs’ counsel 24

  25. Questions ? Marilyn M. Fish Bryan Cave LLP 1201 West Peachtree Street NW Atlanta, Georgia 30309 404-572-6632 marilyn.fish@bryancave.com

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