The national attention devoted to Paula Deen provides an excellent opportunity for employers to review their policies and procedures concerning harassment and inappropriate conduct in the workplace with all employees, but most particularly, supervisors and members of management. Supervisors and managers are the first line of an employer’s defense in the prevention of claims for harassment or discrimination. At the same time, under certain circumstances, the actions of supervisors and managers can result in strict liability for the employer if the supervisor or manager engaged in conduct that is considered to be harassment and the affected employee suffers a tangible change in his/her employment, such as termination or demotion. Thus, it is critical that all supervisors and managers understand their responsibilities with regard to addressing and preventing claims of workplace harassment.

What has been lost in the ongoing debate over Ms. Deen’s use of the “n” word is a description of other troubling conduct on her part. For example, it was revealed in her deposition that she was aware that her brother, a part owner in the business, was viewing pornography at work. In addition, Ms. Deen’s testimony displayed a rather cavalier attitude about the use of jokes about race and religion. These are the kinds of behaviors that should not be tolerated in a workplace.

Our recommendation: We recommend that every employer engage in regular training sessions with its supervisors and managers to reinforce the employer’s policy against harassment in the workplace.  There are three main reasons for this recommendation:

First, supervisors and managers need to be aware of the types of conduct and comments that are deemed unacceptable by the employer.

Second, in the event that a supervisor or manager is accused of committing harassment, and the complaining employee suffers no tangible detriment to his/her employment, the employer can avoid liability by showing it has effective policies and procedures to prevent harassment and effective policies and procedures to address and remedy harassment when it occurs. One important element of proof in this defense is to show that the employer took the initiative to conduct regular training of its supervisors and managers in harassment avoidance.

Third, an employer is also liable for the acts of non-supervisory employees when it knew or should have known of the conduct but failed to take prompt remedial action pursuant to a policy prohibiting sexual harassment. Supervisors and managers are responsible for taking action when they become aware of potentially harassing conduct in the workplace and should be aware of their duties and responsibilities to report such conduct to the appropriate person (usually a human resources representative) so that prompt, effective action can be taken by the company.

The time and money spent in training supervisors and managers in learning to recognize and avoid harassment in the workplace is far less than the cost of litigating a harassment lawsuit. Now is a good time to make sure that such training is up to date.

Union membership in the U.S. continues to dwindle, with the percentage of American workers in unions dropping to 11%, and less than 7% in the private sector. The decline in organized labor continues in spite of a very pro-union administration in power, and a favorable NLRB. Apparently, the AFL-CIO has now concluded that it cannot achieve gains in organized labor alone, so its current push is to expand relationships with other groups. These other groups include large national organizations, as well as more local worker groups.

From a national level, the AFL-CIO during September passed a resolution to try to bring large national groups that might have a common cause with it under some type of umbrella. Some of the groups the AFL-CIO hopes to include in this type umbrella organization include the National Organization for Women, the Blue Green Alliance, the NAACP, the National Council of La Raza, and the Sierra Club. These optimistic plans were scaled back somewhat in the recent resolution, however, because the voting members did not want to give such outside groups full membership and participation in the governing power. The plan is apparently to address each outside group on a case-by-case basis, with the type of coalition to vary from one organization to the other.

A second but related AFL-CIO development relates to their increasing efforts to get involved with local community groups, often called worker centers. The idea is to provide services or help or in some cases grants to these worker centers, working closely with them so that they can encourage labor organization contacts with traditional unions. Many such worker centers relate to ethnic groups or particular occupations. Examples include the New York Taxi Workers Alliance, claiming 17,000 members and the National Domestic Workers Alliance, claiming 10,000 members. Last year, one international union gave $2.5 million to the New York Communities for Change, which this year conducted a series of 1-day strikes involving more than 2,000 fast-food workers in a number of cities. These workers are asking for $15 an hour and a speedy process to join a union.

Labor leaders say unions must create new models to reverse their steady decline. The actions in places such as New York, Chicago, and Detroit involve fast-food workers at McDonald's, Burger King, and other fast-food restaurants, and the worker groups are not considered "labor organizations" under the law, even though they receive support from traditional unions. The idea is that if unions cannot organize through the NLRB, they can seek coalitions through worker centers as a way to show workers how coordinated action can win concessions from employers. The idea is to make such workers more sympathetic to the idea of joining a union later.

Some of these worker centers have more credibility with workers than traditional unions, and offer some advantages due to the fact that the labor laws may not apply to them. Several Republicans in the House of Representatives and a business group known as the Center for Union Facts contend that such worker centers, by not registering as unions, are wrongfully avoiding the laws that govern unions. For example, during July, two House Republicans asked the Labor Department to investigate whether worker centers should be subject to the Labor-Management Reporting and Disclosure Act, which requires unions to submit annual financial reports to the DOL. Some of the worker groups that have been identified include the Koreantown Immigrant Workers Alliance, the Organization United for Respect at Wal-Mart, Restaurant Opportunity Center United, Working America, and Fast Food Forward. These groups have been identified as "front groups" for organized labor. International unions particularly involved with these groups include the United Food and Commercial Workers, Unite-Here, AFL-CIO, and the Service Employees' International Union.

These efforts also include attention to industries that have not traditionally been subject of union organizing, including domestic workers and taxi drivers. Other such worker groups include day laborers, daycare workers, university graduate students, and others. Unions have been successful in organizing marijuana dealers in states that have legalized the drug for recreational or medical use.

On May 8, 2013, the U.S. Department of Labor (DOL) provided temporary guidance about the soon-to-launch Obamacare exchanges. According to the guidance, employers must provide notice about the exchanges to current and all newly hired employees starting no later than Oct. 1, 2013 (“Exchange Notice”).

DOL also announced an updated model election notice that plans must provide to inform departing employees about continued health care coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) (“COBRA Notice”).

Model Exchange Notice Issued - Model language for the Exchange Notice is available at http://www.dol.gov/ebsa/healthreform/index.html. There is one model Exchange Notice for employers that offer a health plan to some or all employees and another model Exchange Notice for employers that do not offer a health plan. Employers may use one of these models or a modified version, provided the notice satisfies certain requirements. The notice must be provided to each and every employee without exception. Employers are not required to provide a separate notice to dependents or other individuals who are or may become eligible for coverage under the plan but who are not employees.

Timing of Exchange Notice - Beginning Oct. 1, 2013, the guidance requires employers to provide the exchange notice to each new employee at the time of hiring. For 2014, the DOL will consider a notice to have been timely delivered if it is provided within 14 days of an employee’s start date.

Model COBRA Notice Revised - DOL revised the Model COBRA Notice to inform qualified beneficiaries of coverage options available through government-run health care exchanges under Obamacare. The COBRA Notice is available in modifiable electronic form at http://www.dol.gov/ebsa/cobra.html.

Commentary – Although the DOL guidance "requires" the issuance of the Notices, some question whether the DOL has the authority to issue such guidance without issuing appropriate regulations. In any event, DOL has admitted that there is no penalty for failing to issue the Notices.

According to published reports, the U.S. Immigration Customs Enforcement Agency ("ICE") has sent out some 1,000 notices of immigration audits across the U.S. The large number of notices during September is apparently tied to the close of the end of the government's fiscal year on September 30. The government refuses to release the names of the companies being audited, but reportedly the audits particularly have involved restaurants, food processing, agriculture, and manufacturing. Some say the large number of audits are related, at least in part, to the push in Washington to pass immigration reform legislation.

In such audits, ICE sends a notice of an audit demanding various documents, including I-9 forms, and various payroll lists. After reviewing the documents, ICE issues a "Notice of Suspect Documents" listing suspect workers. Employers receiving such notices are required to notify the workers of their challenge by the government and that they must be terminated unless they show additional legitimate papers. The government is getting increasingly tough on the amount of time it gives the employers to terminate the suspect workers.

Audited employers later receive a second notice indicating the amount of any applicable fines, which can range from $110 to $1,110 per I-9 form, depending on the seriousness of the paperwork errors. Some errors are deemed substantive, while some are deemed procedural. In the latter situation, the employers are given 10 days to correct the errors, the failure of which results in fines.

Many employers erroneously think that simply being on the government's E-Verify system protects them from fines, but that is not the case. In a few cases, there have been substantial criminal fines in addition to the normal penalties, and, in at least two cases, the amount of the penalties have exceeded $1 million. These more expensive situations have occurred where there is potential criminal prosecution for knowingly hiring unauthorized workers.

The U.S. Department of Labor has announced two final rules that will add to the already substantial reporting requirements imposed on federal contractors by the Office of Federal Contract Compliance Programs (OFCCP). These rules will be effective 180 days from the date of publication in the Federal Register. OFCCP enforces Executive Order 11246, which has required companies that do $10,000 or more of business with the U.S. Government to submit detailed affirmative action plans (AAPs) documenting their efforts to employ minorities and women (and subjects them to scrutiny and potential liability if their efforts are found wanting). The new regulations adds new requirements to the Affirmative Action Plans (AAP) for disabled veterans and individuals with disabilities.

Starting in the spring of 2014, covered employers will be subject to the "aspirational goal" of having 7% of their workforce composed of persons with disabilities, and 8% of disabled veterans. One set of rules updates requirements under the Vietnam Era Veterans' Readjustment Assistance Act of 1974 (VEVRA); the other updates those under Section 503 of the Rehabilitation Act of 1973.

The VEVRA rule provides contractors with a "quantifiable metric" (in effect, an informal quota) to measure their success in recruiting and employing veterans by requiring contractors to annually adopt a benchmark either based on the national percentage of veterans in the workforce (currently 8%), or their own benchmark based on the best available data. The rule imposes accountability and record-keeping requirements, as well as job listing and subcontract requirements to facilitate compliance.

The Section 503 rule similarly introduces a hiring "goal" for federal contractors and subcontractors that 7 % of each job group in their workforce be qualified individuals with disabilities. The rule also details specific actions contractors must take in the areas of recruitment, training, record keeping and policy dissemination - similar to those that have long been required to promote hiring and retention of women and minorities.

The shift in emphasis from the ability to do the work to status - "disability-hood" - runs counter to the theme of the Americans with Disabilities Act (ADA), which was enacted to prohibit employers from discriminating against disabled workers who can perform the essential functions of their job with or without reasonable accommodation. But it is consistent with recent regulations proposed by the Equal Employment Opportunity Commission (EEOC) which encourage disabled workers to "self-identify" and be counted towards utilization goals.

What does this mean for federal contractors? More paperwork, certainly: the new regs will add chapters to existing AAPs. Applicants will have an incentive to broadcast less-than-obvious disabilities, in the hope that their status will make them a more attractive hire. Employers will have an incentive to scour their current workforce to "out" the disabled to meet the metrics (though they will have to tread carefully to avoid running afoul of the ADA). And, of course, everyone can expect more litigation.

Wimberly, Lawson, Steckel, Schneider & Stine

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