Tis the season when many thoughtful employers show their holiday spirit by throwing a party for employees. There are many benefits to such events, from showing employees appreciation for hard work to fostering team spirit and boosting morale. However, even the most well-meaning company can make the naughty list if it does not work to avoid some of the problems inherent in such festivities. Some of the issues that should be considered include:

1. Invitations: Think twice before inviting only some employees and not others to the holiday party – for example, the failure to invite women residents to a party celebrating a hospital’s new residents supported a gender discrimination claim (Tuli v Brigham & Women’s Hosp). By contrast, another federal district court recently stated that being excluded from a holiday party was too trivial of an action to support an employee’s retaliation claim (Mahoney v Donovan).
2. Attendance: Do not make holiday party attendance mandatory – particularly if the party has a religious theme. Several states have laws that allow workers to opt out of meetings where employers communicate their views on religion. In addition, requiring attendance at a party with a religious theme could be seen as discriminatory against employees who practice other religions.
3. Flirting: Caution employees and managers to act professionally. Sexual harassment suits often include allegations of sexually suggestive or offensive comments made at office parties (e.g., Spikes v La State Univ). Although stray comments made at holiday parties are unlikely, by themselves, to support a hostile work environment claim; such comments will be taken into consideration along with other evidence.
4. Santa’s lap: Similarly, if you are going to have a Santa Claus at your holiday party, think twice before having employees sit on his lap. In one recent California Court of Appeals case, an employee alleged that having women sit on the lap of a manager dressed as Santa Claus was part of a sex-based hostile work environment. The jury bought that claim, although the court later rejected it since the employee herself was not asked to sit on his lap (Brennan v Townsend).
5. Alcohol: If you serve alcohol, consider limiting consumption by, among other things, having a cash bar rather than an open bar and offering beer and wine instead of liquor with higher alcohol content. Avoiding overindulgence by employees will not only help avoid inappropriate behaviors or comments that could later support harassment claims; but it could also avoid liability for drunk driving. Some states have laws that hold social hosts liable for accidents caused by drunken guests if the host continued to serve alcohol to someone appearing intoxicated and likely to drive home. In addition, employers could be held liable for injuries caused by an employee’s drunken negligence under the doctrine of respondeat superior if attending the party was considered part of the job.
6. Extravagance: If you are terminating employees around the holidays for the stated reason that the company has to cut back on expenses, consider cutting back on what you spend on the holiday party as well. Some plaintiffs have argued that the extravagance of a holiday party coming on the heels of a termination or RIF was evidence that the employer’s stated reason for the RIF – financial difficulties – was pretext for discrimination.

Last but not least, let employees know that most of the employer’s expectations concerning appropriate conduct in the office also apply at office parties, notwithstanding the merriment. Just in case, it might also be a good idea to avoid hanging mistletoe.

As Memorial Day approaches, it is a good time to be aware of incentives for hiring veterans, and of the federal laws applicable to the employers of our veterans and their family members.

Incentives for hiring veterans. Employers that hire qualified veterans can receive the federal WOTC tax credit. The credit applies to veterans who have received food stamps and certain disabled veterans. An employer must request and receive certification from its state workforce agency that the new hire is qualified before claiming the credit. In response to the high unemployment rate of vets returning from Iraq and Afghanistan, Congress is also considering a bill (the VETs Jobs Bill) to reinstate the WOTC credit that expired at the end of 2010 for employers hiring vets who left service in the last five years.  Additional information on the WOTC is available online at www.doleta.gov and at www.IRS.gov.

Similarly, the Hiring Heroes Act, recently introduced in the Senate by U.S. Senator Patty Murray (D-WA), with companion legislation in the House by Rep. Sanford Bishop Jr., D-Ga, seeks to help veterans struggling to find work and to address rising unemployment among veterans.  The bill would require broad job skills training for all service members returning home, would create a new direct federal hiring authority, and would improve veteran mentorship programs in the working world.

In addition, the Veteran Benefits Administration provides benefits and incentives for employers hiring disabled veterans, such as training programs and salary reimbursement for up to 50% of an eligible veteran’s salary for six months.

Discrimination. Every employer is covered by USERRA (38 U.S.C.S. § 4301 et seq.), which prohibits discrimination based on military service, including active duty, training, examinations of fitness, and funeral honors. USERRA does not cover independent contractors or individuals who were dishonorably discharged, but part-time employees are covered.

Employers may not deny employment or reemployment, terminate, fail to promote, or fail to provide a benefit of employment based on military service, obligation, or application for military membership. USERRA also prohibits retaliation for exercising rights or participating in proceedings under the Act. In March 2011, the Fifth Circuit ruled that USERRA does not create a cause of action for harassment on the basis of military service, however, and dismissed a hostile work environment claim by a class of airline pilots (Carder v. Cont’l Airlines, Inc., (5th Cir 2011). 

Leave. USERRA requires employers to grant military leave to employees who are in the military, provided the employee gave reasonable notice to the employer and the employee performed five years or less cumulative military service while employed by that employer (excluding certain kinds of service, such as training periods). On February 28, 2011, a federal appeals court ruled that an employee did not abandon his civilian career and waive USERRA’s protection, even though he worked for the employer only four days in the four years prior to his termination. The five-year cap had not been reached and there was no clear evidence that he had abandoned his employment, ruled the court (Erickson v. United States Postal Serv., (Fed Cir 2011).

On request, employers must allow employees to use paid leave accrued before the absence but may not require that vacation or other leave be used. FLSA regulations prohibit docking exempt employees for absences caused by temporary military leave in a week when the employee performed some work. Wage differentials paid voluntarily by employers while employees are on active duty may be exempt from FICA and FUTA taxes.

Reemployment. Employers generally must reemploy a military member who applies for reemployment in the position he or she would have been in if not interrupted by military service. If military leave lasts more than 90 days, the employee may alternatively be put in another position with the same seniority, status, and pay. If the employee is not qualified for that position, after reasonable efforts to qualify him or her, the employee must be returned to the position held when military service began. Reemployment is not required if the employer’s circumstances have changed and reemployment is impossible or unreasonable, the original job was temporary with no reasonable expectation of continuation, or the individual is disabled and reemployment would impose an undue hardship. Additional information is available on the DOL website at www.dol.gov/vets/programs/userra/main.htm.

Benefits. Employees entering active military service may continue their health coverage through the employer’s group policy for 24 months or until the employee’s right to apply for reemployment expires. Certain qualified employees may cash out unused amounts in health FSAs and cafeteria plans to avoid losing benefits under the use-it-or-lose-it rule. A reemployed individual generally is entitled to benefits as if continuously employed during military duty, including full seniority for the time on duty, automatic pay raises based on time employed, and retirement and pension benefits based on time employed. Returning employees must be allowed to make up any missed contributions to defined contribution pension plans, and employers must make any corresponding employer payments.

Limits on termination. Under USERRA, a reemployed employee may not be terminated without cause:  within one year of reemployment if the employee served more than 180 days; or within 180 days of reemployment if employee served between 30 and 180 days. The employer must show the termination was reasonable and that the employee had notice the conduct was grounds for discharge.

Military Family and Medical Leave. The FMLA requires employers to provide two types of leave for qualifying relatives of members of the Armed Services. The first type of leave allows an eligible employee up to 12 weeks of FMLA leave because of “any qualifying exigency” that arises because the employee’s spouse, son, daughter, or parent is on active duty or has been called to active duty in certain military operations. Qualifying exigencies include events such as short-notice deployment, military events, and childcare. This provision allows an employee to help manage the personal affairs of a family member called to active military duty.

The second type of FMLA leave applies to employees caring for a covered family member with a serious injury or illness incurred on active duty. Leave is available for up to 26 weeks. Leave is available to family members of veterans for up to five years after leaving service, if the veteran develops a service-related injury or illness while on active duty. Leave may be taken intermittently or on a reduced leave schedule. Additional information on FMLA leave for military families is available at www.dol.gov/whd.

Government Contractors. VEVRAA, which was covered in detail in a May 3, 2011 blog, applies to certain employers with federal contracts. Among other requirements, VEVRAA prohibits discrimination against veterans, imposes affirmative action obligations towards veterans, requires that openings be listed with local employment agencies, and requires annual reports.

Beyond Memorial Day. It is appropriate that that there are incentives for hiring veterans and laws protecting their employment rights while they are busy protecting our freedoms. But employers should also consider the inherent benefits of hiring individuals who, because of their military service, have proven themselves to be loyal, dependable, and flexible team players. In a May 2011 interview with CCH, a Wolters Kluwer company, Emily King, president of Military Transitions™ (www.militarytransitions.biz), and a nationally recognized expert on the transition from military service to civilian employment, had several suggestions for employers interested in hiring veterans.

Employers could post jobs on relevant online sites, such as www.vetsuccess.gov, participate in job fairs geared towards service members, connect with organizations chartered to serve veterans and employers, such as the Veteran’s Employment & Training Service, advertise in publications geared to service members, such as G.I. Jobs or Military Times, and solicit referrals from existing employees with a military background. These suggestions and more may be found in Emily King’s “Field Tested,” AMACOM, © 2011, which will be published in November, 2011.

Faced with rising health care costs and a growing concern over the health of their employees, a vast majority of multinational organizations plan to place a higher priority on workforce health initiatives and the overall well-being of their workers over the next few years, according to a new survey by Towers Watson. The survey also found that wellness programs have become prevalent worldwide as more multinationals promote health and well-being. The survey found that three out of four companies said workforce health and promoting health and well-being will be more of a priority this year and next, while 87 percent said it will be a higher priority over the next two to four years. To address this growing priority, nearly half of the respondents (47 percent) plan to implement a global workforce health strategy over the next two years. Currently, less than one-third (32 percent) of multinationals have a global workforce health strategy in place.

“Given the variety of health systems and market practices around the world, and the significant differences in costs for employers to sponsor health plans, the need for a global workforce health strategy has never been greater,” said Francis Coleman, a senior international consultant with Towers Watson. “Multinationals with a clear strategy can better coordinate local health activities to improve their overall workforce health and increase the efficiency of their total spending on health care.”

When asked to rank the three most important objectives for their health strategy, more than half (54 percent) of all respondents said it was to demonstrate their continued interest in employee well-being, resiliency and stress management, while slightly fewer (52 percent) said it was to help control rising health costs. There were, however, significant differences by regions. More than two-thirds (69 percent) of multinationals headquartered in the Europe, Middle East and Africa (EMEA) region ranked employee well-being and stress management in the top three. By contrast, 62 percent of Asia-headquartered respondents ranked providing competitive rewards among the top three objectives. Not surprisingly, 59 percent of North American companies –primarily U.S.-based –listed controlling costs in the top three.

“Multinationals in various regions have different needs and goals, “said Coleman. “Corporations in the Americas, for example, are much more focused on medical cost containment, while European corporations are concerned with disability, lost productivity and absenteeism. EMEA employers are focusing on using their strategy to directly influence employees’ health. Asia-based corporations view their health programs as a way to attract and retain top talent.”

Wellness programs gaining popularity. Overall, three in four (75 percent) multinationals currently offer a wellness program, which can include preventive care, health screenings or education. And these programs have been growing in popularity over the past few years. The one exception can be found among Asia-headquartered multinationals where only 62 percent of employers offer a wellness program. The survey noted that this may be due to the emerging nature of preventive care in the region.

“Wellness programs, not surprisingly, can be found mostly in advanced economies. In many emerging economies, these programs are offered only to senior managers,” said Nicole Serfontein, a senior international consultant at Towers Watson. “To get full value from health and wellness programs, multinational employers should clearly define the role wellness and health and productivity programs will play in their global health strategy, and in their overall business strategy. If an organization is in an industry that competes for talent, for example, its approach to health 3/4 especially in some regions –could be a factor in attracting and retaining employees.”

Other findings from the survey include:

• Companies that have a health strategy are not sharing it broadly with employees. Only 13 percent of respondents say they’ve explained their strategy to their entire global workforce. In the next three years, multinationals will rely increasingly on more global governance of their health care benefit programs.
• Data management, third-party vendor support and offering of prevention and wellness programs are the areas most likely to come under some type of global governance at respondent organizations.

Source: Towers Watson; www.towerswatson.com.

A recent Wall Street Journal article noted that new data from the U.S. Commerce Department indicates that U.S. multinational corporations companies cut their work forces in the U.S. by 2.9 million during the 2000s, while increasing employment overseas by 2.4 million—a big change from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.

Suggesting that Corporate America certainly isn’t doing its part to help bring America out of its economic downturn, the paper surveyed employment data by some of the nation’s largest “brand-name” corporations: General Electric, Caterpillar, Microsoft, Wal-Mart, Chevron, Cisco, Intel, Stanley Works, Merck, United Technologies, and Oracle. For example, in 2001, Oracle created 22,008 jobs in the U.S., while 20,919 were outside the U.S. However, in 2010, 39,000 jobs were in the U.S. while 66,000 were outsourced. GE’s data indicates that in 2001, 158, 000 jobs were U.S.-based, as opposed to 152,000 outside the country. Those figures in 2010 changed to  133,000 and 154,000 jobs, respectively. Another company, Caterpillar, had 38,664 jobs in the U.S. in 2001 compared to 33,340 outside the country. In 2010, it was 47,319 and 57,171.

At the 2009 Strategic Outsourcing Conference, attended by many of the most powerful companies in the U.S., more than 70 senior executives who attended the conference were asked questions about the behavior of their companies in response to the economic downturn. The results were that 57 percent increased the use of outsourcing, 34 percent significantly restructured one or more outsourcing agreements and only nine percent said they terminated some outsourcing agreements.

With numbers like these, it’s no wonder that a Washington Post/ABC News poll released last week indicated that 44 percent of Americans feel that the economy is getting worse rather than better. And with “American” companies leaving them behind, it’s not hard to figure out where their malaise comes from.

After being subjected to threats of violence and verbal abuse, a Home Depot employee who described herself as “intersexed” or a “partial hermaphrodite” proffered sufficient evidence to defeat the home improvement store’s summary judgment motion on her hostile work environment sexual harassment claim (Hughes v The Home Depot, Inc, April 11, 2011, Irenas, J). However, the employee failed to establish a casual link between her complaints of harassment and her termination and, therefore, her retaliation claim did not survive summary judgment.

Alleging that she was born with male sex organs and also a large amount of female hormones, the employee lived as a male until she was 14 years old, when she changed her name. She was hired by Home Depot and soon began hearing “whispers and rumors” around the store that she was a man and that male customers were making threats toward her. The employee complained to a human resources manager, who investigated and prepared a report indicating that the store manager was not cooperative, that despite her direction, he was not taking the HR manager’s advice seriously—a particular concern because other employees would emulate the store manager’s actions.

Soon other employees began to complain about the employee’s treatment, and his locker was adorned with the word “faggot.” During a meeting, a coworker allegedly said that if the employee came near him, he “would respond with violence.” The employee’s car was tagged in soap with the phrase “we don’t need your kind here, go home.” The HR manager recommended that the perpetrators be disciplined and the employee transferred, but her recommendations were not adopted. When the store manager departed, the employee told her new manager about the harassment. After another incident at the store, the employee again complained to human resources, but an HR manager suggested that the employee may have brought the problems on herself by telling people her “business.” When the employee was terminated, allegedly for violating Home Depot’s attendance policies, she brought suit under New Jersey’s Law Against Discrimination, alleging harassment and retaliation.

Contrary to Home Depot’s assertions, the employee’s claim for harassment was not barred by the two-year statute of limitations under New Jersey’s LAD, the district court found as an initial matter. While certain instances of harassment indeed occurred outside the limitations period, “the statute of limitations does not begin to run until the wrongful action ceases,” the court wrote, citing to a New Jersey Supreme Court decision, Roa v Roa. Here, there was a dispute of material fact as to whether the employee had been subject to continuing harassment. The facts alleged by the employee supported a reasonable inference that the employee suffered a pattern of harassment that continued into the relevant limitations period. Therefore, her case was not time-barred.

The court next opined that the employee raised factual questions on numerous issues sufficient to withstand summary judgment on her hostile work environment claim. For example, she presented evidence that supported her claims that she was harassed because of her gender; that the harassment was severe and pervasive, and that a reasonable woman could believe that the harassment altered the terms and conditions of employment. Having done so, the employee defeated Home Depot’s motion for summary judgment on her sexual harassment hostile work environment claim.

However, the employee failed to establish a prima facie case of retaliatory discharge. Specifically, she was unable to demonstrate that there was a causal link between her complaints of harassment and her ultimate termination. Therefore, Home Depot prevailed on its motion for summary judgment on the employee’s retaliation claim.