Labor intensive: How to drink from the fire hose of workplace litigation

The takeaway for employers is to implement key preventative measures

Labor law is a diverse space that covers cases with premises in discrimination, sexual harassment, wages, healthcare, disability and whistleblowing. Not only do employers need to be able to navigate the complex laws inherent to each of these categories, but they also need to deal with sensitive issues that are historical hotbeds for employers, such as discharging and training employees.

The key takeaway for employers is to implement preventative measures that ensure they’re proactively addressing each of the areas of potential litigation, while encouraging their employees to come forward with issues before they seek legal action.

The more things change…

According to industry experts, labor litigation in 2013 has not been particularly surprising, with the majority of legal activity falling into the category of “classic labor law.” That’s not to say that labor law and litigation is a static space, or that there haven’t been any interesting developments.

According to Joan Ackerstein, partner and national director of litigation at the law firm Jackson Lewis, “Because the world changes and people change, employment law is always changing.” While that may be the case, Ackerstein says that much of the action is still in an area that’s likely to be familiar to most employers. “We’ve continued to see a tremendous number of wage and hour litigations,” she explains. “There doesn’t seem to be any slowdown with that. That’s in every industry in all parts of the country.”

Estimates put the growth of wage and hour litigation in the last 20 years between 300 and 400 percent, and 2013 continued to see an increase. In addition to wage and hour cases, new cornerstone cases have set a precedent for litigation relating to the payment of interns, minimum wages and vacation policies. According to Department of Labor records, 7,764 Fair Labor Standard Act (FLSA) lawsuits were filed to date in 2013, a 10 percent increase from the 7,064 cases in all of 2012.

In addition to wage and hour litigation increases, an amendment to the Americans with Disabilities Act (ADA) in 2008 has made it easier for employees to seek protection and has resulted in a higher volume of disability litigation.

“Employees have become more sophisticated in making the claim that their employer has failed to accommodate them and failed to engage in the interactive process,” Ackerstein says. “Once an employee goes to the employer and says ‘I have a disability and this is what I need,’ an employer really can’t simply say ‘no,’ and they’ve historically said ‘we’d love to help you but we can’t do that.’”

Another area of familiar but changing risk comes from the Equal Employment Opportunity Commission (EEOC). In 2012, EEOC made 99,412 charges against employers, but of those charges, only 122 lawsuits were filed. This was down from 261 suits in 2011, and is said to coincide with the commission’s more aggressive campaign to deal with pattern and practice cases, taking quality of rulings over quantity. When it released its strategic enforcement plan, the EEOC announced it would be more heavily scrutinizing the use of background checks as a barrier to employment.

“We are seeing a lot of activity from the EEOC and plaintiffs’ bar, and a lot of push back from employers and state attorneys general, in the area of background checks,” says Natalie Pierce, shareholder at the law firm Littler Mendelson. “This year alone, five states and two major cities enacted laws restricting the use of criminal records in hiring/employment, so we expect this trend to continue.”

Social disorder

Litigation concerning the use of social media is another area that has seen an increase of activity in the past few years. Using social media to evaluate a candidate can be particularly risky for businesses, says Pierce. “If you have this applicant, and you’re going to look at their LinkedIn profile or Facebook page, maybe the information there is correct and maybe it’s not correct. Maybe you’re going to find something about an applicant that you shouldn’t know, that could later be used against you to suggest that you made a decision on that person because of their background, where they’re from, or even their sexual orientation.”

In addition to issues surrounding the use of social media to assess candidates, questions about an employee’s freedom to air frustrations should also be front-of-mind for general counsel.

The National Labor Relations Board (NLRB) has always protected an employee’s right to voice opinions or concerns about the workplace with other workers, and slowly but surely this has extended to protect conversations that happen on social media platforms as well.

“They (NLRB) want to make sure that any discipline does not interfere with an employee’s right to talk to his co-workers about his working conditions or the terms and conditions of his employment, since it’s a protected activity,” Ackerstein says.

The fuzziness comes in the actual content of the statement. “If an employee is saying to a co-worker ‘do you believe that they just said they’re going to limit our increases to one percent? This is the cheapest company in the world!’ that’s a lot different than if he says to his cousin ‘my company is cheap.’”

And because companies need to protect their corporate images without stepping on the rights of their workers, they need to ensure that any policy they make regarding social media conduct does not give the impression of suppression.

Over the past three years, this has resulted in an increased focus on workers’ Section 7 rights in non-union workplace, according to Brian Hayes, co-chair of Ogletree Deakins and former NLRB member.

“It’s opened up a lot of litigation on employer policies even when they were not enforced, when they’re simply on the books, solely because a policy could be construed by an employee to chill them from the exercise of their Section 7 rights,” says Hayes.

Hayes says that while historically, companies have interpreted Section 7 as a protection of ability to strike, it’s much broader than that, and protects a host of actions including those happening online. While most companies have made efforts to remain compliant to Nation Labor Relations Act, which was passed in 1935, some may not realize the act’s relevance in relation to online communications and could inadvertently break laws by casting too wide of a net with their social media policies.

Hayes says even having unenforced policies that stifle the online conversation, “are potentially minefields for employers, and some of them are finding that out the hard way.”

Working it out

Concerns about whistleblowing etiquette, union activity and medical compliance are also hot buttons in the litigation space. Whether the legal threat is as old as the workplace or as new as social media, identifying and dealing with the risk of workplace litigation is essential for any law department. An unexpected suit could cost untold millions and harm an established reputation.

Ackerstein points out that the first line of defense at any large corporation is the human resources department, and that having a well-trained, legally competent and approachable HR team is the first step to avoiding labor litigation.

“What I would say to general counsel is, employment litigation is increasing, it is a tremendous drain on your resources, if you are proactive and you have a good HR department and you audit your own practices and train your managers, you really may avoid these lawsuits,” Ackerstein adds.

And with social media becoming a new domain of activity protected under the NLRA, Hayes says, “If you haven’t looked at your personnel policies or your handbook’s rules in the last year, there’s probably something that’s a problem, so rather than invite trouble, employers would be well advised to get them reviewed.”

Contributing Author

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Chris DiMarco

Chris DiMarco, Associate Editor of InsideCounsel magazine, has a background in multimedia production with previous involvement in projects in which he developed and created content...

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