Sexual Harassment Training : ELT, Inc. : AB 1825, Employment Law, Online Harassment, Compliance, and Harassment Training

What could drive successful management-side employment attorneys out of their practices? Money. And we are talking lots of it. “There’s a place in Reno, Nev., that practically mints money” claims last week’s cover story in BusinessWeek.

The magazine isn’t talking about a new Federal Reserve Bank, or a mortgage lender that hasn’t heard the bad news about loose lending protocols…BusinessWeek featured the crippling trend of  wage and hour litigation: Wage Wars: Workers—from truck drivers to stockbrokers—are winning huge overtime lawsuits. 

The article profiled a couple of attorneys who “got smart,” switched sides, and now make tens of millions of dollars (often settling just one case) by suing US employers for wage and hour violations. (For some additional sobering information on super-sized settlements, check out the ELT Webinar: The Wage and Hour War: Managing Risk in an Ever Changing Environment).

Almost Every Employer is a Target 

If you haven’t already been sued for wage and hour violations, your number may come up soon enough. And if it does, it’s likely to be painful. As one plaintiff’s attorney in the BusinessWeek article bragged:

I can hit a company with a hundred sexual harassment lawsuits, and it will not inflict anywhere near the damage that [a wage and hour suit] will.

And boy, is this guy right. It’s estimated that corporate America pays out more than $1 Billion a year to settle and resolve wage and hour claims. And that’s only the tip of the iceberg. Wage and hour lawsuits have more than doubled from 2001 to 2006.

Our Changing Workplace is Driving Wage and Hour Litigation

In the last few years, technology hasn't just transformed how we do our work, but more importantly, when we get our work done. Our jobs now routinely intrude into what is supposed to be non-working time. With cell phones, Blackberries, laptops and the ability to stay connected 24/7, work is finding its way into every nook and cranny of our lives.

The compliance challenge?  Employers are equipping overtime-eligible employees with these modern technological conveniences without much thought to the associated wage and hour risks.  (Is anyone tracking the time spent checking those late night e-mails?  The answer in the vast majority of cases is no.)

We've also seen employers cutting jobs, and expecting their workers to do more in less time.  While employees may embrace this "survival culture” during times of high unemployment to save their jobs (and their companies), the allure and prestige of being a professional "exempt" employee (meaning exempt from overtime pay) is starting to lose its luster.  This is especially true when the job market is strong.

Over the last few years, I think the collective culture surrounding an exempt vs. non-exempt designation has shifted.  Workers feel less stigmatized when they are deemed overtime eligible -- or "hourly." What’s in a label? If the work is sophisticated and interesting, and I can get overtime, all the better.  Might as well get paid for all those long hours, not to mention the psychological burden of the Blackberry "leash."

Employers Facing Massive Wage and Hour Risk

All of these changes have altered the risk profile of employers across the nation. A recent article in the New York Times (O.T. Isn’t as Simple as Telling Time) summed up this new world of technology to a tee. It’s definitely worth a read. Work away from home is still work, and employees need to be paid for their time. Period.

Litigation trends, much like our volatile real estate market, have a large psychological component -- which is why it’s important to stay in tune with workforce trends.  In addition to more employees embracing an hourly worker designation, people putting in extra hours are less willing to "give away" their time -- and they're becoming better educated about OT eligibility. To verify this trend, all you've got to do is track the statistics. Wage and hour class actions now outnumber all other employment law class actions combined.

More than 70% of Employers Are Out of Compliance with Wage and Hour Laws

So what should really be keeping you up at night?  Most of your employees and managers don’t know the most basic information when it comes to wage and hour laws, or your policies (which, by the way, are not all that intuitive.)  This is an area of the law where common sense doesn't always prevail.  For example, most employees, and most managers, assume that an employee can choose to volunteer his or her time, which of course is dead wrong.  So it should come as no surprise that the Department of Labor (DOL) estimates that nearly 70% of employers are out of compliance with wage and hour laws. Experts in the field say the real number is much higher.

The chilling thing about wage and hour liability is that intent doesn’t matter. Keeping employees in the dark about their right to be paid won’t help either. Innocent or well-intentioned decisions that violate the law still trigger strict liability. You either paid your employees right, or you didn’t.

And here are two key risk factors you need to understand:

1. Punitive damages and liquidated (double) damages are excessively common in wage and hour litigation.  That means a damage award of 2 years of back pay per employee can quickly mushroom into 6 years of back pay.  Throw in attorneys fees and other litigation costs, and the math gets staggering.
   
   
2. Without proper documentation of hours worked, the benefit of doubt goes to the employee.  The practical result is that employers are faced with defending the perception of hours worked, versus the reality.  And it's common knowledge that in our work-obsessive culture, most employees overestimate or tend to exaggerate the hours they're putting in.  Add in the allure of lucrative settlement, and in many cases, the "perceived hours" worked tend to multiply.
   
   

The Proper Response: Tackle Wage and Hour Risk Head On

Employers can't just stand by and hold their breath.  Like all other business risks, there are options that can help change an organization’s risk profile today. The best place to start is by developing a comprehensive wage and hour compliance program.  (Check out the excellent whitepapers and presentation slides on the ELT Website as a start place).

The case law in this area has shown that preventative steps can help to establish a valuable affirmative defense in wage and hour litigation. 

And even if you are in the middle of litigation, a compliance program can help to cut off damages the day it’s implemented.

OK -- got your attention?  There’s a tangible ROI to be had here.

A well thought out compliance program can help save millions if and when your organization is faced with a wage and hour lawsuit, or audit.  A critical component of the program? All-employee training, which: 

• Ensures that employees understand the values and rules of your organization (along with formal certifications that evidence acceptance and understanding of your wage and hour policies), 

• Gives employees the tools they need to do things right when it comes to recording their time,

• Teaches employees and managers how to spot and report problems before they get too costly; and 

• Helps managers avoid costly mistakes in the first place.
  
  

Online Wage & Hour Training Changes the Game

The number one reason employers have failed to train in this area?  Logistics.  Given the complexities of state law, as well as industry-specific requirements, employers have assumed they need to train in the classroom.  Given the sheer size of the training audience (particularly with the high turnover in some of the hardest hit industries like retail and hospitality), there has been an assumption that broad scale preventative education is just not viable.  Too unwieldy, and too expensive.

But the game has changed.  With advances in technology and the availability of revolutionary wage and hour e-learning, employers can more readily manage wage and hour risk.  While online compliance education has focused largely on harassment training and ethics training over the last few years, wage and hour is the next tidal wave of e-learning.

Online training in this area is inexpensive, simple to administer and easy to customize.  Internet-based tracking means your are seamlessly collecting valuable training and policy certifications, which are golden in a litigation game that’s almost entirely about data collection.

Technology is largely responsible for some of the fastest growing wage and hour risks.  It’s time to get savvy about using technology to protect your organization and build affirmative defenses.

Just last week, Governor Schwarzenegger signed into law The Safe Place To Learn Act, also known as AB 394.  Even though this California law is limited in scope and application to the public school sector, employers across the country should sit up and take note.   The outpour of public reaction to AB 394 paints a dramatic picture of the diametrically opposed, and passionate viewpoints that people (i.e. your employees) have about sexual orientation and gender identity.

So let’s start with the basics.  What’s AB 394 all about?

Supporters of the new law say that it’s designed to protect students in public schools, including those who identify as lesbian, gay, bisexual, or transgender, from harassment and bullying at school.  The new law requires anti-harassment training for students, parents, and teachers. 

Those on the other side of the coin have a very different point of view. They see the law as an attack on their beliefs, religion and morals. A quick search of the web reveals countless blog posts and comments from objectors. A few of the tamer comments include:

“California conservatives won’t tolerate wide-scale denigration of their beliefs or the sacrifice of the traditional family on the altar of a pro-gay agenda. Practicing Christians (and Jews, and Muslims) won’t willingly attend classes that teach the one-sided ‘tolerance’ the left calls ‘fair.’”  Excerpt from The Random Yak Blog.

The bill is not about safety. This bill is about sexual indoctrination and redefinition of gender.” Excerpt from San Fran. Bay Times Article (March 27, 2007)

Sexual Orientation and Gender Identity in the Workplace

Regardless of what side of the debate you’re on, HR and legal professionals should be watching this development closely.  When it comes to human sexuality and gender, the tensions and emotions run deep … really deep. And your employees are only human. Each person brings his or her personal thoughts and beliefs to work each day.

It doesn’t take much of a stretch to recognize that the attitudes and opinions surrounding AB 394, extend to the debate over protections for sexual orientation and gender identity in the workplace.  Many of you have policies covering sexual orientation and gender identity, and many of you operate in locations where state law tacitly provides clear legal protections – ones much stronger than AB 394.

In other words, you need to contend with the fact that a significant portion of your workforce is morally, religiously or otherwise stalwartly opposed to anti-discrimination measures for employees who identify as lesbian, gay, bisexual, or transgender.  They actually take these legal and policy protections as an assault on their own liberties and belief systems.

Talk about a tough HR challenge.

And if you think that employees can have a civilized discussion about this stuff, think again. Any discussion that involves marital rights, gender roles, gay rights, religion and sexuality is bound to get heated – and dangerous. Each side firmly believes that the other is wrong.  That’s a recipe that quickly escalates to righteous indignation, and ultimately, legal liability.

Employers Have to Set the Tone

California’s AB 394 discourse is not an isolated event that employers can or should ignore. The laws relating to gender identity and sexual orientation are shifting. In the last year alone, four states (Iowa, Colorado, Oregon, and Vermont) passed new laws expanding employment law protections to sexual orientation and gender identity. (NGAL Task Force State Map of Non-discrimination Laws).  We’ve also witnessed progress (although slow) at the federal level with the Employment Nondiscrimination Act.  (Want my prediction?  When the Democrats take the White House in 2009, we’re going to soon see federal discrimination protections for sexual orientation and gender identity.)

What catches most employers off-guard is that they fail to really grasp how emotional these issues are for employees. They miss the signs of tension, or fail to give employees the right direction. The sad truth is that many employees just don’t get it – especially if they feel they can back their position up with religion.  Your workers need to understand that there’s a time a place to voice their opinions about deeply held moral, religious, and political beliefs – but it ain’t at work.

It’s up to employers to set a proper and respectful tone. And this is where harassment training takes a front and center position.  As with most anti-discrimination efforts, education is at the heart of real and long-lasting change.  Employees need to understand that certain communications and behaviors are just not appropriate in the workplace.  Period.  And they also need to learn that there are serious consequences for choosing to cross the line.

Live in Reality

So – California leads the way, yet again, when it comes to harassment training and anti-discrimination protections.  Love us for it, hate us for it, but live in reality when it comes to managing the practical fallout of a vicious civil rights debate that directly impacts your workforce.

 

Based on a recent Gallop Poll, nearly 87-90% of Americans believe that gays and lesbians should have equal rights in terms of job opportunities. While states continue to expand employment law protections (see NGAL Task Force State Map of Non-Discrimination Laws) federal laws still do not expressly prohibit employment discrimination on the basis of sexual orientation.  There’s also no federal coverage for gender identity, which relates to an employee’s beliefs about whether s/he is male or female.  It’s an astonishing gap that puts the U.S. behind the curve on the world stage when it comes to civil rights protections.

But one legislative initiative is putting these issues front and center on the national agenda. It’s called the Employment Non-Discrimination Act. The EDNA is not a new initiative. It’s actually bounced around Congress in one form or another since 1974.  And it’s been languishing for nearly a decade.

Well – the EDNA. It’s back. And it’s making some progress. Democrats in the House are making compromises (and creating some rifts in the bill’s supporters, as well as the gay and lesbian community) hoping to get some form of legislation passed. The revised bill, H.R. 3685, was passed by the Education and Labor Committee on October 18, 2007. The big change?  The bill no longer includes gender identity. It only prohibits discrimination on the basis of sexual orientation.  Some in the house believe it’s the only way to get the ENDA passed.   

If you have some time, tune into the October 3 KQED stream on the Employment Non-Discrimination Act. You’ll gain insight into the politics behind the bill, and how it’s likely to progress.

Even though the Senate doesn’t have a companion bill, the ENDA isn’t likely to make its way through the Senate this year.  Even if it did, a Presidential veto is almost a certainty, but I wouldn’t write this legislation off so quickly.

There is overwhelming public support for equal rights for gays and lesbians. I expect that this issue will stick around well into 2009. If we see a further shift of power in the next election, I predict that our federal employment laws will get a modern face lift – and we’ll catch up with the rest of the world.

In the meantime, closely scrutinize your harassment training programs, and include coverage of sexual orientation and gender identity.  You may already operate in locations with existing state law protections, and your internal policies likely cover these categories, regardless of formal legal protections.  And at the end of the day, you need to recognize and manage the realities of your diverse workforce.  Aside from legal compliance, prohibiting discrimination on the basis of sexual orientation and gender identity is the right thing to do.