Preventing Third Party Harassment

By Matthew G. Dunning

While most employers are aware of their legal obligation to protect employees from harassment by co-workers, supervisors, and managers, a recent case from Mississippi highlights the need to prevent harassment by third parties, including patients and customers. Previous cases have involved harassment by customers at restaurants and casinos, with differing results based on the specific facts.

The plaintiff from the case in Mississippi worked as a CNA for an assisted living center, and was assigned to care for a patient with dementia who had a history of violent and sexual behavior toward patients and employees. The plaintiff alleged that the patient repeatedly made sexual comments and requests, and that he would physically grab her. Management was aware of the behavior based on employee complaints, documentation in the patient’s chart, and firsthand observation. The plaintiff was ultimately terminated for allegedly taking a swing at the patient in a particularly abusive incident during which she was groped and punched repeatedly. Following another incident with a fellow resident, the patient was moved to a nearby all-male facility. Based on affidavits, deposition testimony, and other documentation, the lower court granted summary judgment to the assisted living center, and dismissed the case.

On appeal, the Fifth Circuit noted that Title VII does not prohibit all harassment; a plaintiff must subjectively believe there is severe and pervasive harassment, and the plaintiff’s belief must be objectively reasonable. Previous cases involving repeated verbal sexual harassment by home health and nursing home patients were determined not to be sufficiently severe and pervasive when the conduct was not “physically threatening or humiliating, and did not pervade the work experience of a reasonable nursing home employee.”  That is, potential liability must be considered in light of the specific environment, and the “unique circumstances involved in caring for mentally diseased elderly patients.”  The appeals court held that, contrary to the lower court’s opinion, the allegations of persistent and often physical harassment in this case were sufficient to send the case to a jury.  “The ultimate focus of Title VII liability is on the employer’s conduct; in the case of alleged harassment by a third party, “a plaintiff needs to show that the employer knew or should have known about the hostile work environment, yet allowed it to persist.”

Regardless of potential legal liability, employers should take care to protect employees from this type of behavior. Mandatory training regarding sexual and other harassment should be provided to all employees, and a clear and effective policy and complaint mechanism should be in place so an employee has the opportunity to make allegations, and have them addressed. Supervisory and management personnel should receive separate training on how to recognize harassment and other discrimination, and human resources personnel should be trained on conducting investigations and recommending action by management that will prevent the harassment from continuing.

© 2018 Vandenack Weaver LLC

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#METOO: An Employer’s Response to Sexual Harassment Allegations

Charles Swindoll once said, “I am convinced that life is 10% what happens to me and 90% of how I react to it.” Employers must prepare and react appropriately to sexual harassment in the workplace, and the failure of which may result in public litigation. There are several simple steps that should be taken to assist in stamping out sexual harassment in the workplace, and in doing so, the added benefit is that it may also reduce a business’s liability exposure.

Through the employee policy or handbook (cumulatively “Policy”) and employee training, the entity should make its stance clear: zero tolerance for sexual harassment. An entity Policy should include specific examples of what sexual harassment looks like. Clarifying sexual harassment will empower employees to report their experiences, as well as provide the entity a framework to identify such wrongful behavior. Additionally, the company’s posture should be shared with the workforce through regular proactive training and reminders. Make the training mandatory. Revisit the training periodically throughout the year to impress upon the workforce the seriousness of sexual harassment. Continually update the Policy to reflect recent legal developments and/or any new procedure that may have been developed through actual situations that occurred within the entity. Through the Policy and training, liability will be reduced as entity workforce culture aligns with the entity: zero tolerance for sexual harassment.

Employers must provide clear procedure for dealing with sexual harassment, such as reporting and investigating. The entity must establish open channels of communication that provide the employee with specific individuals to whom they may confidentially report any incident of sexual harassment. Establishing a specific hierarchy for reporting can encourage employees to disclose sexual harassment early on. Remember, 10% is what happens to you and 90% is how you react. Take seriously claims of sexual harassment regardless of severity—upon disclosure, react! Immediately preserve any records of disclosure and any other correspondence related to the claim, as contemporaneous notes establish a timeline and the diligence of the employer to respond as quickly as possible. Also, carefully determine who and how the matter is best investigated.  Investigation can be done internally, by in-house legal, human resources, or other persons as designated or it may be done by outsourcing the investigation to a neutral third party. Employers may find that the most prudent investigations occur when neutral third parties are retained given the inherent conflict that could arise should any internal party discover that the allegations of harassment are founded. Upon concluding the investigation, a decision must be made on whether further legal action should be sought. Regardless, the entity must properly document any decision or evidence gathered through the investigation to establish the basis for its reaction and response to the allegations.

Ninety percent of any situation can be governed by how you react; and, reacting to sexual harassment allegations is a cumulative, ongoing process. In the advent of sexual harassment, an entity must provide an employee the ability to securely reveal sexual harassment, whereby upon the disclosure of such, the entity acts. Simple prudence not only prevents sexual harassment, it also precludes further harassment upon discovery. Ultimately, it limits the employer’s liability by clearly establishing its position: zero tolerance for sexual harassment.

© 2018 Vandenack Weaver LLC
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SSA Updates Social Security Taxable Wage Base for 2018

By Joshua A. Diveley

In October, the Social Security Administration (SSA) announced an adjustment to the Social Security taxable wage base to take effect in January based on an increase in average wages. Based on the wage data Social Security had as of October 13, 2017, the Social Security taxable wage base was set to increase to $128,700 in 2018, from $127,200 in 2017. Based on newly released data obtained by SSA, the new Social Security taxable wage base for 2018 is $128,400.

This lower taxable amount is due to corrected W2s provided to Social Security in late October 2017 by a national payroll service provider. Approximately 500,000 corrections for W2s from 2016 were received by SSA and resulted in the downward adjustment for 2018.

For more information about the updated 2018 taxable maximum amount, please visit www.socialsecurity.gov/oact/COLA/cbb.html

 

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Department of Labor Clarifies Stance on Still-Pending Overtime Rule

By James Pieper

In 2016, a dramatic overhaul of the rules for eligibility and payment of overtime under the Fair Labor Standards Act (FLSA) was on the verge of taking effect before being halted by an injunction issued by a federal judge.

With a new administration taking over the Department of Labor, the status of the overtime revisions has been uncertain.  Nor was it known whether the Department would defend its authority to revise the rules in the subject litigation.

In a brief filed on June 30, the Department’s new leadership finally provided some clarity.  The Department defended its legal authority to adopt a new rule (as had been challenged by the plaintiffs), but did not defend the actual changes proposed by the prior administration.

Accordingly, although the rule remains in legal and administrative limbo, it is clear that it will not take effect in the form proposed in 2016.  Should the courts conclude that the Department does have authority to set the earning threshold (under which overtime must be paid to non-exempt employees) by administrative rule, then the new Department leadership will adopt a threshold lower than the amount of $47,476 that was set prior to the injunction.

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Department of Labor Withdraws 2016 Guidance on “Joint Employment”

By James Pieper

On June 7, 2017, new Secretary of Labor Alexander Acosta withdrew guidance provided under the prior administration by the Department of Labor’s Wage and Hour Division that had staked out a broader interpretation of when “joint employment” exists pursuant to the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).

When two or more employers “jointly” employ an employee, the employee’s hours worked for all of the joint employers during the workweek are aggregated and considered as one employment, including for purposes of calculating whether overtime pay is due. Additionally, when “joint employment” is found to exist, all of the joint employers are jointly and severally liable for compliance with the FLSA and MSPA.

Under a traditional “common law” approach to employment, such “joint employment” would only exist if both employers are able to exercise “control” over the employee’s work.  The 2016 guidance sought to recognize “broader economic realities of the working relationship” and thus “cover some parties who might not qualify as [employees] under a strict application of traditional agency law principles.”

Accordingly, the guidance indicated that a number of scenarios that have not been historically considered “joint employment” – including, particularly, franchisee, staffing-agency and subcontractor relationships – might give rise to “joint employment” under the FLSA and MSPA, thus broadening the potential legal exposure for entities that had in the past not been considered joint employers.  The intent of the Department of Labor to implement such a broader interpretation is now withdrawn.

Although the action reduces some of the potential legal risk, particularly for franchisors and franchisees – who had actively sought the withdrawal of the guidance – the potential for “joint employment” remains a complex area requiring careful attention to potential penalties.

© 2017 Vandenack Weaver LLC
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New Minimum Wage Law in Iowa

Iowa enacted a new law, Iowa House File 295, that prohibits counties and cities from regulating certain employment matters that are regulated by the state. On a practical level, for employers, this will reduce some compliance burdens, including eliminating different minimum wage rates across the state. The law, which took effect on March 30, 2017, preempts city and county rules pertaining to minimum wage, employment leave, hiring practices, employee benefits, and similar matters that pertain to terms of employment. For example, Johnson County, Iowa, had a minimum wage of $10.10 an hour, but that has preempted with the new state law, which means the minimum wage in Johnson County is now $7.25 an hour. Now, regardless of the action taken by county or city government, including actions taken prior to the new Iowa law, the state law will preempt and govern practices by employers.

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Employers in Nebraska and Iowa Should be Aware of Changes in Pay Discrimination Lawsuits

A recent court case, stemming from an Iowa employer, may have a significant impact on how employers throughout Nebraska and Iowa view pay differential between employees. On April 3, 2017, the Eighth Circuit Court of Appeals ruled in Dindinger v. Allsteel, Inc., a case pertaining to gender based pay discrimination. In the ruling, the Court suggested that market forces and economic conditions, often used as an affirmative defense in pay discrimination claims, may not be sufficient as a defense without a clear connection. The result is that an employer may not be able to assert that economic conditions are the reason for pay differential between men and women without being able to show how the economic conditions caused the pay differential for the specific employees in question.

 

This case stems from an Iowa furniture manufacturer, where three female employees claimed gender based pay discrimination. As an affirmative defense, the business argued that market forces and economic conditions were the reason for the pay differential, not gender discrimination. This affirmative defense is often raised by employers and, generally, does not require a specific correlation between the economic condition and the employee. However, the Court in this case noted that to successfully argue the “factor other than sex” defense, the business must show how economic conditions directly resulted in the pay differential. For employers in the Court’s jurisdiction, including those in Nebraska and Iowa, an increased burden may exist when asserting the market forces affirmative defense and could necessitate taking action before any potential pay discrimination claims arise.

 

Employers should recognize the added challenge of defending pay discrimination lawsuits and, potentially, take preemptive action by auditing current pay and employment practices. A copy of the opinion can be found at the following link:  http://media.ca8.uscourts.gov/opndir/17/04/161305P.pdf

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