First Quarter 2012

 

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In This Issue:

In the News

Hiring for character

A shot in the arm

Legislative &
Regulatory Update

Tax Matters

IRS offers amnesty to employers who convert independent contractors to employee status

IRS on issue of cell phones

IRS announces 2012 standard mileage rates

New tax credits encourage hiring of veterans

Social Media: Blurring the line between the personal and professional

Who owns the LinkedIn account?

Whose followers are they?

Litigation Update

Recent Verdicts and Settlements

Kohler Co. faces FLSA collective action

Target employee fired for working through lunch break and after hours

Lady Gaga being sued for overtime pay

Right to bear arms bears fruit for advocacy group

Law firm employee fired while on maternity leave wins appeal

Tyson Fresh Meats settles sex discrimination cases with U.S. Department of Labor

Racine Unified School District settles with family of abuse victim

The Strangest Things We’ve Heard of Late

Published or Quoted Elsewhere:

Concealed Carry Concerns

Ozaukee Press

Packing Heat: Local Businesses Torn on Concealed Carry Law

Fox Point Patch

Social Media and the Workplace

(SBDC Front Page)

Are Unpaid Internships Legal?

(Dime Crunch)

Loose Lips Sink Ships – Things That Can Get Educators in Legal Hot Water!

(Teachers.Net Gazette)

The Focus on Misclassification

(SBDC Front Page)

Hiring in the New Economy

(SBDC Front Page)

Understanding and Bridging
the Generational Gap

(WORK Spring, 2009)

What is the Role of an
Attorney on the Board?

(Compasspoint Board Café - February 28, 2008)

Also published in Blueavocado.org - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

(Wisconsin Lawyer - Vol. 81,
No. 2, February 2008)

Previous Issues

In the News

Hiring for Character. The news has been filled as of late with discussions around the topic of “character.” The passing of Penn State Coach Joe Paterno raises questions about his legacy vis-à-vis the recent child abuse scandal at that school. Ongoing revelations about the sunken cruise ship off the Italian coast suggest its captain displayed, first, extremely poor judgment, and then utter cowardice.

We all know that character counts, but how does one hire for character? Two recent articles on the subject offer some clues:

  • On a scale of 1 to 10, how weird are you? That is one of the many unorthodox questions being asked by HR professionals these days in an attempt to uncover attributes such as critical thinking, passion and creativity. The rationale, in part, is that traditional questions such as “what are your strengths and weaknesses?” don’t reveal enough about an applicant. What might you learn from the answer to, “If you could be any superhero, which one would it be?” At a minimum, it is guaranteed to start a different sort of conversation. Read more about creative approaches to interviewing here.
  • Organizations can create, or at least enable, ethical behavior in staff. That’s the conclusion of a study conducted by Harvard business professor Rohit Deshpande, who focuses on business ethics and global branding. Professor Deshpande looked at the behavior of employees at the Taj Mahal Palace Hotel in Mumbai, India when the hotel was under siege for two nights and three days in 2008. His conclusion? The staff went to extraordinary lengths -- many putting their own lives in danger -- to help guests safely escape. He learned that the hotel actively recruits for characteristics such as respect and empathy and has a training and reward system in place that encourages traits such as kindness. Learn more here.

Employer take-away: Businesses today want employees with character, as well as hard skills and experience. What steps do you have in place to identify and reinforce “soft skills” and related employee traits?

  • A shot in the arm. Flu season is upon us, begging the question: Can employers require employees to get a flu shot? The short answer is “it depends.” The law generally sides with the employer, and especially if there is a reasonable purpose for requiring the shot (such as working in health care or with vulnerable populations). If there is a reasonable purpose for requiring the shot (such as working in health care or with vulnerable populations), the law generally sides with the employer. If an employee has objections related to religion or an underlying medical condition, the employer could bump up against Title VI, the ADAAA (Americans with Disabilities Act Amendment Act), and similar state laws by forcing the issue. With respect to other employee objections or simple complacency, consider providing the shot on-site, covering the cost, or providing incentives (carrot) or a deadline (stick) for getting the shot.

Legislative & Regulatory Update

Tax Matters. Employers will want to take note of a few recent IRS changes and initiatives that affect 2012 taxes.

  • IRS offers amnesty to employers who convert independent contractors to employees. The Classification Settlement Program allows employers to reclassify contractors as employees if they:
    1. Have consistently treated the workers as independent contractors;
    2. Have filed all required 1099 forms for the workers for the previous three years;
    3. Are not currently under audit by the IRS, the Department of Labor or a state government agency concerning worker classification; and
    4. If previously audited by the IRS or the Department of Labor concerning classification of workers, complied with the results.

    Read more here.

    Employer take-away: While the IRS offer may be an attractive one, remember that it could easily tease up other issues – including how state law will treat the workers and whether the workers themselves will decide they have a claim against the employer.

  • IRS on issue of cell phones According to IRS Notice 2011-72, cell phones issued to employees primarily for business purposes, and cash allowances and reimbursements for cell phones used by employees primarily for business purposes, are non-taxable to the employee. Prior to this clarification by the IRS, these cell phones, cash allowances, and reimbursements were subject to onerous recordkeeping requirements in order to be non-taxable.
  • IRS announces 2012 standard mileage rates. Beginning January 1, 2012, the standard mileage rates for the use of a car, van, pickup or panel truck are:
    • 55.5 cents/mile for business miles driven
    • 23 cents/mile driven for medical or moving purposes
    • 14 cents/mile driven in service to charitable organizations
  • New tax credits encourage hiring of veterans. On November, 21, 2011, President Obama signed into law two new tax credits designed to promote the hiring of veterans. The Returning Heroes Tax Credit provides businesses a credit of up to $5,600 per unemployed veteran hired, and the Wounded Warriors Tax Credit offers a credit of up to $9,600 per veteran with service-connected disabilities hired. Read more here.

Social Media: Blurring the line between the personal and professional

Two pending lawsuits point to the ongoing issues associated with the use of social media for business purposes.

  • Who owns the LinkedIn account? When Sawabeh Information Services bought Edcomm, the founders of the company moved on, but Sawabeh sought to retain the LinkedIn account of one of the founders, Dr. Linda Eagle. Dr. Eagle argues that the account is akin to her own personal rolodex. Sawabeh reasons that the account is company property, citing the fact that Dr. Eagle had others in the company access, manage and develop the account. The case is pending. Read more here.
  • Whose followers are they? When Noah Kravitz, a blogger and frequent “tweeter” at his company, left his job, the ownership of his Twitter account – or more specifically its 17,000 followers – became a matter of contention. Mr. Kravitz changed his Twitter name but kept the followers, the parties having agreed that he would continue to tweet on the company’s behalf from time to time. Eight months later, the company sued for $340,000 ($2.50/month per follower), claiming that the Twitter followers were a company list and, accordingly, company property. Stay tuned. Read more here.
  • Employer take-away: Are social media contacts akin to a personal or business rolodex? While law is not yet established on this topic, the prudent approach is to be proactive and (1) establish a written policy for your organization; and (2) be mindful of the potential value of social media accounts and contacts when negotiating severance agreements with departing employees.

Litigation Update

Recent Verdicts and Settlements

  • Kohler Co. faces FLSA collective action. Kohler administrative employees allege that they completed assignments before or after assigned shifts and during unpaid lunch breaks, for which they were never paid. The case may involve as many as 140 employees. Read more here.
  • Target employee fired for working through lunch break and after hours. A former Target employee, Jason Kellner, has sued Target in federal court. Kellner and several other employees were outspoken opponents of the store’s break policy. Kellner claims that while the store will not pay for working during breaks, employees are often required to respond to issues while on break and perform other work after hours. Target’s position is that it repeatedly advised Kellner to not work off-the clock and that when he continued to do so it had no choice but to terminate him for violating company policy. Read more here.
  • Lady Gaga being sued for overtime pay. Some may think that being a superstar's personal assistant is reward enough. However, Lady Gaga's former personal assistant doesn't think so. She is suing for what she says she is owed for working around the clock for the celebrity. Typically in such cases, the employer claims that the employee is exempt under the administrative exemption. However, this is Lady Gaga. "Typical" probably doesn't apply. The case is pending. Read more here.

Employer take-away: As demonstrated in these three recent cases, there continues to be confusion regarding work-related activities that occur before or after employee shifts or on break. It is not enough to simply state in a handbook or elsewhere that overtime is not permitted. Employees who violate this policy must be disciplined, or perhaps even discharged. If not, the company is subject to the contention that, the rule against overtime notwithstanding, the company has an “unwritten rule,” culture, or expectation that employees perform work before or after their shifts or during unpaid breaks.

  • Right to bear arms bears fruit for advocacy group. The City of Madison will pay $10,000 to settle a federal civil rights suit brought by Wisconsin Carry Inc., a gun rights advocacy group, and five of its members. The individuals were ticketed after they openly carried firearms at a Madison Culver’s restaurant last year. Read more here. This suit provides food for thought: What would you do if a patron complained about another patron carrying a weapon?
  • Law firm employee fired while on maternity leave wins appeal. The marketing director for a Chicago-based law firm, fired by phone while on maternity leave, recently won her federal court appeal. The woman is claiming pregnancy discrimination under Title VII of the Civil Rights Act of 1964 as well as interference with her rights under the Family Medical Leave Act and unlawful retaliation for the exercise of those rights. Though informed that her termination was the result of a corporate restructuring, the woman alleges that the HR director told her she was actually terminated because she was pregnant and had taken medical leave – a claim that the HR director now denies. The case had been dismissed on summary judgment and now returns to the district court for trial. Read more here.
  • Tyson Fresh Meats settles sex discrimination cases with U.S. Department of Labor. The company will pay $2.25 million in back wages, interest and benefits to more than 1,650 female job applicants who were rejected for employment at various company facilities. The company will also provide jobs to at least 220 of the applicants as positions become available.
  • Racine Unified School District settles with family of abuse victim. The school district will pay $150,000 to resolve a civil claim filed by the family of an elementary school special education student who was reportedly sexually assaulted by an educational assistant. A criminal case is remains pending. Read more here.

The Strangest Things We’ve Heard of Late

The owner of a convenience store chain held a “firing contest” in which he asked employees to predict the next employee to be fired. The “rules” read in part: “…write on a piece of paper the name of the next cashier you believe will be fired….And no fair picking Mike Miller….He was fired at around 11:30 a.m. today for wearing a hat and talking on his cell phone. Good luck!!!!!!!!!” Store employees who resigned as a result of the contest filed for unemployment benefits. The store owner objected, citing the fact that the employees quit. An administrative law judge awarded the employees benefits, ruling that the owner’s behavior justified their quitting. Read more here.

We'd love to hear your feedback. Send comments to Mark J. Goldstein, S.C.

If you would like more information about any of the cases, laws, or other developments cited, feel free to contact Mark J. Goldstein S.C.

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3/15/12

Legal Updates

SRKA (SHRM Racine/Kenosha Chapter)



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