Sexual Harassment Part II - The Employer's Perspective

Voiceover:

After an accident, minutes matter, your words and actions matter even more. You need help and you need it now. This is David versus Goliath, brought to you by Dolman Law Group accident, injury lawyers, a boutique firm with a reputation for going head to head with the insurance company giants and putting people over profits. Thanks for joining us. This is an episode from our back catalog. So the episode numbers and firm name may have changed, but this is quality information. So instead of scrapping them, we decided it was more important to make sure you still had access. Enjoy the episode and listen to new episodes of David versus Goliath at domanlaw.com.

Matt Dolman:

Welcome to the eighth episode of the Dolman Law Group podcast. I'm here with employment lawyer, Trescot Gear. Trescot say hello to our audience.

Trescot Gear :

Matt, pleasure to be back.

Matt Dolman:

So today we're going to keep it kind of employer focused, go over issues that are really germane, just to employers only.

Trescot Gear :

Let's do it.

Matt Dolman:

All right. So tell me about what are the overtime laws and unpaid wages? What do we need to know?

Trescot Gear :

Okay. So typically if you're working more than 40 hours in a given week, and depending on the kind of occupation you have, you should be eligible for what's known as time and a half, which is your hourly rates multiplied by a half, add together. That should be what you make in overtime, anything over 40 per week.

Matt Dolman:

Okay.

Trescot Gear :

You were so say you make 15 bucks an hour, you work 45 hours. That's five hours of overtime. You should be making 22.50 per hour for any of those hours over 40 per week. Now the key with this is that not everyone is eligible for overtime. You and I, for instance, as licensed professionals, are ineligible for overtime, you can work your associates at Dolman Law Group, like mules.

Matt Dolman:

I know.

Trescot Gear :

Good to know.

Matt Dolman:

Yeah.

Trescot Gear :

And as long as you're paying them more than right now, 23,000 bucks per year. So maybe you're right around that floor of the associates.

Matt Dolman:

A little bit above it.

Trescot Gear :

Maybe a little bit above it, then you can work them almost as long as you want. Now there are new overtime laws coming into effect. We're trying to do some retroactive analyses of these. The overtime standard right now is going to possibly, if the DOL enacts it, bump it up to $47,700. If you are below that salary threshold and you fit into all the various exceptions and exemptions, then you qualify for overtime, anything over 40 per week, you get your time and a half.

Matt Dolman:

Sounds good.

Trescot Gear :

Now, but the key with this is that, like I just mentioned with the professionals, not everyone is eligible. If you're an engineer, for instance, if you're a doctor or lawyer, if you're an administrative work, for instance, these are all different exemptions that prevent you from getting that overtime.

Matt Dolman:

Okay.

Trescot Gear :

And so honestly, it's a case by case basis. You, as an employer, say you run a tech firm, for instance, you've got 15 employees, all doing a variety of different tech based jobs. Some of those people may qualify for overtime. Some may not it's honestly on a case by case basis, based on upon the job done, that's what's known as the duties test.

Matt Dolman:

Okay.

Trescot Gear :

The court, if say someone goes, who's working as a administrative assistant at a tech firm, worked 55 hours that last week for about a year. She definitely wants her 15 hours per week for the rest of the last year to be compensated by you.

Matt Dolman:

Yeah. 750 hours she's on.

Trescot Gear :

Exactly.

Matt Dolman:

Yeah.

Trescot Gear :

And whatever she's making per, time and a half. Well, the court is going to look at what was she being asked to do? Was she ever in control of a department of people? Was she ever being asked to do high level work? The kind of highly skilled expertise work that someone like a CEO, a CFO or someone in some sort of management would be asked to do, if she's not being asked to do this that's clerical, then she may have a case for it. Honestly, it just each individual story is told.

Matt Dolman:

So what is the litmus test? So she may have a case. She said she doesn't necessarily have a case. What's the gray area?

Trescot Gear :

The, the gray area right now is called the administrative exemption. It's are you performing higher level work for your corporation? To the extent that is existing in the running of the corporation, as opposed to say filing papers, are you an accountant? Like an accountant may not be eligible for overtime, but someone who is a file clerk could. So honestly, if you think you have an unpaid overtime case, you've got to come to people like us to analyze what you're doing on a day to day basis.

Matt Dolman:

Let us know about the case.

Trescot Gear :

Exactly. Because from an employer standpoint, there are two things I can tell employers all the time. If you want to be safe, make sure everyone's making at least $455 per week, 455 per week right now is the threshold. If you bump everyone up to 455 or more per week, you don't have any sort of problems.

Matt Dolman:

Okay.

Trescot Gear :

And the alternative, if you just don't want to spend the 455 per week on employees, start making them either independent contractors or start making everyone, everyone's duties need to be clearly delineated.

Matt Dolman:

at's the difference between a: 1099

Trescot Gear :

This is the newest thing that's been going on.

Matt Dolman:

Yeah. I understand: 1099

Trescot Gear :

person who's been listed as a: 1099

Trescot Gear :

acterizing their employees as: 1099

Matt Dolman:

Okay.

Trescot Gear :

o be having your employees as: 1099

Matt Dolman:

Yes. All.

Trescot Gear :

That means that you have the ability to exercise daily control over them, over their tasks, their activities in exchange, they don't have to worry about their payroll taxes at the end of the year because you're taking, it's being taken out of each paycheck.

Matt Dolman:

So the penalty for violating, this is what?

Trescot Gear :

Penalty for violating it is the misclassified employee.

Matt Dolman:

Yeah.

Trescot Gear :

the end of each year if he's: 1099

Matt Dolman:

Yep.

Trescot Gear :

at they're not qualifying for: 1099

Matt Dolman:

It can all hit you at once too.

Trescot Gear :

Exactly. Because employees talk to each other, they unfortunately will band together, not as class action, but they'll start dumping different plaintiff law firms with cases.

Matt Dolman:

Correct. And what is the ramifications for the employer in terms of attorney fees? Can they be stuck on the hook for paying the other side's fees?

Trescot Gear :

Now? I'm actually not sure if there's an attorney's fees provision laid out.

Matt Dolman:

Okay.

Trescot Gear :

In this type of action.

Matt Dolman:

Okay.

Trescot Gear :

But not only do you have issues from a lawsuit standpoint, you also have an IRS issue because if you've been misclassifying your employees,

Matt Dolman:

You're not paying proper tax.

Trescot Gear :

Not paying proper taxes and uncle Sam will always get his.

Matt Dolman:

h. Any other issues regarding: 1099

Trescot Gear :

,: 1099

Matt Dolman:

Okay. So best business practices is someone like myself ensuring that the duties are spelled out.

Trescot Gear :

Yes.

Matt Dolman:

Has full control over my employees, that they're not just operating at their own discretion.

Trescot Gear :

o describe it. Yes. If you're: 1099

Matt Dolman:

Yes.

Trescot Gear :

But you've got some latitude that you don't already have.

Matt Dolman:

You have to answer to them, but you're given a lot of room and a lot of rope.

Trescot Gear :

The latitude. Exactly. Exactly. Yes. Okay.

Matt Dolman:

As an employer, what do I have to look for in terms of discriminatory behavior? How do I nip it in the bud if I see it early, what do I look for? I know it's kind of, it's a very liberal movement right now. The me too movement and a lot of very similar actors are taking place. What rise, the level of discrimination? When is it in the gray area? When is it not discrimination?

Trescot Gear :

So yes, obviously it's a very heightened environment that we're currently,

Matt Dolman:

Sure.

Trescot Gear :

Currently in. And I'm sure some employers can feel as though they're under incredible scrutiny in either the me too movement or any sort of racial discrimination of the kind. The first thing you want to be doing, is by nipping in the bud, by simply going, knowing what your employee's doing day to day. If you're exercising the control, like the W2 employees, you need to be monitoring your employees, not talking about a big brother security here, but you need to be monitoring their emails, their correspondence, especially in the new age of social media, the interoffice correspondence. Now, possibly at a firm like this, you may have some sort of instant messenger function where different employees can talk to each other, through instant messages.

Matt Dolman:

Sure.

Trescot Gear :

You'd be amazed at how so much harassment can just occur interoffice through this new digital media. So you need to have the ability to review your messages. You may have concerns, innovation of privacy.

Matt Dolman:

That's what's natural when there's a conversation.

Trescot Gear :

There's no reasonable expectation of privacy in a workplace like this when it comes to instant messages.

Matt Dolman:

Okay.

Trescot Gear :

Or even emails. If it's on on correspondence, if it's on your servers, you have the same access to it that they do. Now, you can't bug, you can't go and bug the bathroom.

Matt Dolman:

Of course.

Trescot Gear :

You can't go and bug your office. Those are federal violations. But when it comes to reviewing instant, you can review instant messages. You can review emails, anything that's involving you, your employers overall, all, your logo or your entity's essence. You need to be in control of that and nipping stuff in the bud before it becomes a problem. Now, things may become just a dispute between two employees. That's not in and of self discrimination. It's when you're noticing that either a single employee is being singled out. Or maybe not. The word bully too is thrown my way too much, I think.

Matt Dolman:

Maybe like a campaign of harassment?

Trescot Gear :

A campaign of harassment would be a better way of,

Matt Dolman:

Okay.

Trescot Gear :

Of describing it. This once again comes into the fact of where you have an HR function at your workplace. Do you have just a simple pamphlet or an employee handbook? I tell all my employer, clients, you've got to have something in writing.

Matt Dolman:

We do here. We have something that delineates, what is allowed and what isn't allowed, but when is it too detailed? And when are we missing certain elements that should be to cover our proverbial ass. I mean, it's a CMA.

Trescot Gear :

CYA, CYA.

Matt Dolman:

When are we not covering our ass? When are we missing things that it should be covered? What are you seeing out there now?

Trescot Gear :

You're missing things when you're not allowing some sort of internal grievance process to come into effect you, it's not required by law, but there are ways to cut the problem off before it starts growing legs. If you don't have some sort of informal mediation process between two disgruntled employees or an ability for an employee to reasonably bring concerns, not the comment box, but reasonably bring concerns up the chain of command to a supervisor without fear of a reprisal.

Matt Dolman:

Yeah.

Trescot Gear :

You've got to have that. You've got to have something that empowers your employees to not feel as though they've been threatened by the coworkers or the supervisor. And then ignored by management. If it's laid out in your handbook, that everything is confidential, every complaint is confidential. And if there's some sort of dispute resolution process internally, that will save you so much trouble down the line. This can be something as simple as putting the two people in the same room with each other, having paying for an informal third party. This is the one time you may actually want to consider having a small outlay for a mediator of some kind when it involves a dispute between two higher employees.

Matt Dolman:

Okay.

Trescot Gear :

Let's be Frank. If these are two, $8 an hour employees who are calling each other names or bullying each other,

Matt Dolman:

The juice isn't worth the squeeze.

Trescot Gear :

Exactly. Yeah, but these are especially they're salaried employees at a higher threshold. You need to be nipping the stuff in the bud by removing the threat of a future lawsuit. You remove that by showing to a third party or to a future investigator that you've taken every amiable effort to resolve the internal dispute. And now when it comes to individual discriminations, you got to be compliant with ADA. Now at a public buildings, you've got to have access. If your employees are sick, you can't fire them for being sick, but you can lay out appropriate absence procedures. You can lay out appropriate procedures for calls out. What's the number one cause of terminations in America. It's a no call, no-show, someone doesn't follow an appropriate internal procedure stays in all day. Then it comes to work next day and realizes they're fired. Well, they may think that they've been fired because they were sick. If you've laid out in your internal procedures, a simple, no call, no-show policy that is enacted across the entire workplace equally, they can't try and then claim that they've been singled out.

Matt Dolman:

Okay.

Trescot Gear :

These are all some of the ways that you can just get them before this thing grows like a virus.

Matt Dolman:

When you, going back a minute, when you talked about going up to chain of command and having the ability to, reconcile some of these issues, what about if you have a very small business with only three or four employees, how does that transcend? And what if you are the sole arbitrator being the owner, but the issue might lie with you.

Trescot Gear :

You've just got to be so careful. Especially since you as the small business owner,

Matt Dolman:

Yes.

Trescot Gear :

Are almost the sole arbiter. As you said of disputes in the office, any favoritism you may show, especially for instance, whether it's true or not, whether you're a white male and the person who is bringing the action is an African American female for instance, you cannot show that you've put placed undue weight on the race, being a factor or her gender being a factor in her treatment.

Matt Dolman:

One way or the other.

Trescot Gear :

One way or the other. You, it sounds crazy, but you have to remain completely neutral. Even if in a small business, you're going to have certain biases that are just inherent biases. You have to remain, which is why you bring in a third party. You either bring us in as your HR functionary or you have to bring in a mediator or an arbitrator to resolve the internal dispute.

Matt Dolman:

Is that common at big businesses?

Trescot Gear :

It's common, big businesses now with small, with people under 10 employees.

Matt Dolman:

Yeah.

Trescot Gear :

Oftentimes the issue that comes in is that you, as a business owner have a legitimate right to run your business as efficiently and effectively as possible. And if this person is being an irritant and a bother to you, you've got to find a reason for them to either quit the behavior or leave your corporation without the optics of a discriminatory or a retaliatory event.

Matt Dolman:

So let's case scenario.

Trescot Gear :

Okay.

Matt Dolman:

Right. Somebody had a fact pattern. You are the employer, I'm the employer.

Trescot Gear :

Okay.

Matt Dolman:

And somebody's bringing possibly a discriminatory case or starting to allege those facts, but it's a smaller business. We have 30 employees here, but let's say we're a smaller business and only have three or four employees.

Trescot Gear :

Okay.

Matt Dolman:

I'm the sole arbiter of that issue. I'm also the person who created the issue or at least that's the allegation, how do I resolve the issue?

Trescot Gear :

So the first thing you want to do, and we're going to go back to episode seven for a second.

Matt Dolman:

How's mediation seem neutral, if I'm the person hiring the mediator?

Trescot Gear :

Well, a mediator is supposedly supposed to be a completely neutral entity. Even if you're paying them, oftentimes in a, let's go back into the way we do day to day from a legal standpoint, both sides contribute to the mediator's fees.

Matt Dolman:

Sure.

Trescot Gear :

So that there's no impropriety. Now, when you suffer higher than the mediator? What you're going to want is to have the mediator create a reason statement as to the outcome of the incident.

Matt Dolman:

Okay.

Trescot Gear :

So, you're paying them not only to be there and be present and hopefully resolving any sort of internal dispute, also paying them for their own analysis of your danger zones of,

Matt Dolman:

Okay.

Trescot Gear :

You're basically paying for a risk assessment. The mediator can act as your risk assessor in this, because the next step that the employee's going to do is file a charge with the proper agency.

Matt Dolman:

EOC.

Trescot Gear :

EOC or FCHR.

Matt Dolman:

Yeah.

Trescot Gear :

So you can remove a lot of your internal stresses as a small business owner by either having a reward system in place for your employees or making them feel as though they're empowered to seek solutions other than litigation.

Matt Dolman:

Okay.

Trescot Gear :

Against you.

Matt Dolman:

Wrongful termination cases. What do we watch out for there?

Trescot Gear :

Well,

Matt Dolman:

I know we kind of skated around the issue. We've touched on a little bit.

Trescot Gear :

Yeah. I feel like wrongful termination. You're always sort of skating around it. And in Florida, most owners are going to know that we're an at will state. You could be hired or fired for almost any reason, which a lot of owners are going to fall back on. Terminated because they weren't learning quickly enough. Especially as from an efficient business standpoint, you see this a lot in law firms. You just don't have time to train certain people. And if they're not going to be able to make up the ground in time, they got to go.

Matt Dolman:

Yep.

Trescot Gear :

But if this person in a protected class or this person has been showing a pattern of behavior, wrongful termination, Florida doesn't really exist. It only exists if it was tied to a discriminatory act, event, AKA your race, disability, age, gender, sexual orientation, little fuzzy on whether that's actually become becoming of the class these days. If that was a basis for the termination or the retaliation. Other than that, you are safe in Florida. If you can show a legitimatory, non-discriminatory motive for your termination of them. For instance, we all know people who were fired just because it was a bad fit.

Matt Dolman:

Sure. Happens every day.

Trescot Gear :

But when it's a bad fit, you need to have documented the reason for the bad fit for the inevitable possible lawsuit. The first thing an investigator is going to do when someone files, what could be a frivolous EOC charge, they're going to ask you what was the reason for termination? Same for an unemployment. Okay. This happens a lot of times in unemployment cases.

Matt Dolman:

Sure.

Trescot Gear :

If you don't want to pay, pay for their unemployment for the next two or three months, you're going to challenge their unemployment finding. The good news in Florida is that if you're found to be the cause of your own termination, you're not eligible for unemployment. So when you're trying to fight unemployment, you are laying out why it was a bad fit. And there was why there was no sort of malfeasance on your part.

Matt Dolman:

Okay.

Trescot Gear :

You need to be very careful of course, that any action you took, would've been done to any employee that deviated from the standards of conduct, like episode seven, we talked about how you can create your own standard of conduct and standard of performance. Anyone who drops below it, whether they are disabled, whether they are a war veteran, whether they're just a waspy white male, all fall into the same category and are held to the same standards. If you can legitimately show that you're going to be insulated from almost all liability under the sun.

Matt Dolman:

Fair enough.

Trescot Gear :

It's all by insulation.

Matt Dolman:

You said it well, severance agreements. What do we need to know there? What's a proper severance agreement? What are the considerations, what goes into in putting together a severance agreement?

Trescot Gear :

So Florida's one of several states. As you can tell that are pretty employer friendly. A lot of labor laws support the employers, at the end of the day. I advise my clients though, that severance agreements at the end of the day are going to be worth the couple thousand dollars that you put into them. A severance agreement from a general definition standpoint is an agreement between the terminated employee or to terminate the employees of resigning and the previous employer that in exchange for money, they would not have already earned. They release the employer from liability and waive all claims they have to sue the employer for anything that happened during the course of the employment.

Matt Dolman:

Okay.

Trescot Gear :

So AKA, the person who's been to discriminate against, let's say it's actually been a discriminatory event. Let's say that you as the employer or the five person company, you think, "Well, crap, we may have gone from teasing this person to maybe there was a little bit of harassing behavior. Maybe we're not totally going to be at fault, but there's enough wiggle room, enough gray area."

Matt Dolman:

Sure.

Trescot Gear :

In this,

Matt Dolman:

Some exposure.

Trescot Gear :

Let's offer them a severance agreement. Severance agreement says, Hey, for a certain number of years that they work for the company. So they worked there, there for five years. You offer typically one to two week severance for every year of employment.

Matt Dolman:

Okay.

Trescot Gear :

Unless they're really high, high level employee, which case it could be more money being offered. You want to offer just enough money to make them question whether they want to sign it or not. Now, unfortunately it's not, it's not really an economic threat. It's sort of an economic reality. Can you afford the extra two months that we're offering you in exchange for not suing the corporation ever again? Or are you willing to take the chance of filing a lawsuit and getting nothing? So you have this agreement that says, "Hey, John Smith, you worked at this firm five years. We're offering you $10,000 in severance in exchange will also offer Cobra to you." Cobra is the carryover.

Matt Dolman:

Sure. When for when you lack health insurance.

Trescot Gear :

When you lack health insurance, yes. You allow them to elect into Cobra, you offer to write them a letter of rec, you offer that you won't contest their unemployment compensation. You're doing all this as an employer to protect yourself down the line. If you honestly feel though that you are completely secure and there's not even a chance or a whiff of discrimination, then just pay them their final paycheck that they were already owed and have them be in their way. Severance agreements I say are used for two kinds of cases, cases where there's enough of smoke, where there could be fire down the road for retaliation harassment or for a high level employee that's performed well for you. And you want to create a standard of conduct to entice future employees down the line.

Matt Dolman:

Okay.

Trescot Gear :

AKA use sort of a carrot and stick approach to bring people in. If the word around town is, "Hey Smith incorporated, they'll offer severance to their employees." That's actually a perk that you can offer at the outset of employment that, hey, we're not just going to terminate you and walk away.

Matt Dolman:

You could also be seen as a weak link, or you could be seen as the, somebody could be taken advantage of by offering such.

Trescot Gear :

You could be, you could be seen as that.

Matt Dolman:

The various allegation will, the response will be that we'll come back with a severance.

Trescot Gear :

And that's why you need to, you don't give severance to everyone. You don't give severance to the person who stole from your company, or you don't give severance to a person who screwed up and cost your firm tens of thousands of dollars.

Matt Dolman:

Sure.

Trescot Gear :

You're giving severance to the people that you don't want to be seeing them in two years in federal court or the people that were such a high value to you, that you want to create a positive working relationship with them in the future somehow. And you realize that opinions in the community can go a long way in the future. But from a severance standpoint, you're not required to in the state of Florida. There is no requirement that you give severance and this, by the way, everything we've been talking about deals with private employees and private employers.

Matt Dolman:

Yes.

Trescot Gear :

If you're a public employee in the state of Florida, you have your own internal grievance process. You have your own standards for severance. As we always joke that you had to kill someone to ever get fired. If you work for the government, we're only half kidding. You have an incredible amount of job security when you're a public employee.

Matt Dolman:

Sure do.

Trescot Gear :

So a lot of this has been talking about was private employers and for private employees, just as a disclaimer to this video.

Matt Dolman:

So in all severance agreements, are we looking at a contemporaneously, receiving a release or confidentiality?

Trescot Gear :

Yes. You're looking for in exchange for me cutting you a check in 10 days for the amount of money, you're signing a release, releasing all liability, waving all claims once it's assigned. So it's basically a contract that severance agreement is a contract.

Matt Dolman:

Sometimes confidentiality.

Trescot Gear :

Confidentiality's going to be in play. A nondisclosure is going to be in play. We haven't even touched. And maybe we want to touch briefly noncompetes.

Matt Dolman:

Sure.

Trescot Gear :

Inside of this, oftentimes in a severance agreement, and this is a very, this is not devious, but a really clever outside council will incorporate a non-compete in this as well. Especially if it's a highly specialized type of industry, sales. You see so many non-competes with sit in sales contracts, or in sales, severance agreements, non compete basically says, "Hey, because of the amount of confidential information you've received in the course of your employment, and because of all the highly detailed proprietary information that you've received for the next two years, you can't work for so and so, in this geographic range up to two years." Anything over two years is going to be invalid in Florida. Anything more than 150 miles is going to be seen as probably being invalid, unless you are a national corporation.

Matt Dolman:

Okay.

Trescot Gear :

Now judges may overturn the non-compete years from now, but what you're buying, you're buying peace of mind. You're buying that hey, I'm giving them cash and they're getting a nice exit out the door, but I'm getting something back for this. I'm getting the protection of knowing they can't turn around and go to my competitor, utilize my trade secrets, my proprietary info, and screw me over on the back end. I suggest noncompetes for any employee in some sort of capacity or any employee in any sort of capacity where they have access to such confidential information and proprietary information that makes it damaging to your brand. If they,

Matt Dolman:

You got to prove it's proprietary. You show it affects the Goodwill of the business.

Trescot Gear :

Yes, you have to show that it is so tangible to have the running of your business. And it's so specialized to your business. Can't just be that, Hey, you work for a hospital. Therefore you can't work for a hospital anymore.

Matt Dolman:

Sure.

Trescot Gear :

Also there's public policy standards too. If someone is like a paramedic, you can't prevent them from never working for another hospital or a paramedic corporation. So there's still certain public policy restrictions on this, but non-competes restrictive covenants and the like, should be used sparingly. But when they are used are incredibly effective.

Matt Dolman:

When they're not ambiguous.

Trescot Gear :

When they're not ambiguous. And the key with this, I tell people on both sides of the aisle, the noncompetes only as valid as a person trying to enforce it is. So the person never tries to enforce noncompete and you violate it. There's really no harm, no foul. It's when you violate it and your previous employer learns about it, then they can go and litigate you for a breach of contract, because it's technically a contractual term.

Matt Dolman:

Sure.

Trescot Gear :

And so they can litigate your breach of contract. And also in your severanceagreement, you want attorneys fees to be a provision in any severance agreement you have. You want any dispute about agreement a year from now two years from now, however long it's in validity to have a prevailing party fee statute in there or fee provision in there.

Matt Dolman:

Okay.

Trescot Gear :

You want that.

Matt Dolman:

Any other issues you want to discuss today?

Trescot Gear :

I think we put the employers on a pretty good footing right now.

Matt Dolman:

Yeah. I think we were pretty thorough today. I really appreciate coming on Trescot Gear. This concludes episode number eight of the Dolman Law Group podcast. Thank you very much.

Trescot Gear:

Thank you.

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