Fundamentals of Employment - PowerPoint Presentation

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Fundamentals of Employment Law in the District of Columbia

Tom Harrington, Principal, The Employment Law Group

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Overview/Summary

At-Will Doctrine; Principles and Considerations for Employment AgreementsKey Hiring Considerations – Legal Requirements and Pitfalls Principles of the Fair Labor Standards Act (FLSA)

Family Medical Leave – Overview

The DCHRA

Accommodating Disabilities – Overview

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Employment At Will; and Contractual Employment Relationships

In the District of Columbia, if employers do not offer their employees a definite term of employment, the parties’ relationship is at will, i.e., terminable at the will of either party, so long as the employer does not terminate the employee for an unlawful reason.

Employers choose to offer their employees employment agreements for a variety of reasons.

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Employment At-Will DoctrineAn employee is “at-will” if there is no definite term of employment.

Bible Way Church of Our Lord Jesus Christ of the Apostolic Faith of Washington, D.C. v. Beards, 680 A.2d 419 (D.C. 1996)

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Limits of the Employment At-Will Doctrine

DC recognizes limitations to the at-will doctrineTerminated employees can bring claims based on:Wrongful dischargeBreach of contractBreach of implied covenant of good faith and fair dealing

Promissory Estoppel

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Avoiding Issues with Oral Contracts

Oral promises limit employers’ rights to terminate at-will employees only in very limited circumstances. Oral promises must be definitive and limited in duration. Oral promises can run afoul of the statute of frauds which requires contracts that cannot be performed within one year to be in writing and signed by the party to be charged in order to support a claim for breach of contract.

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Implied Contracts

DC courts recognize that at-will employment can be unilaterally modified by statements issued inEmployee handbooksPersonnel manualsCompany documents

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Implied Contracts

To prove that an implied contract exists, an employee must show that the employee and the employer clearly intended to form a contract. To make this showing, the employee must establish that the communication from the employer to the employee contained unequivocal provisions that the employer intended to be bound.

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Implied Contracts

Employers can defeat implied contractsBy showing that the employee failed to comply with employment policy guidelines - Domen v. Nat’l Rehab. Hosp., 925 F. Supp. 830 (D.D.C. 1996)

By using disclaimers that specify, unambiguously, that an employee’s employment remains at will despite statements in applications, handbooks, and other similar company communications that might be construed to the contrary. - Smith v. Union Labor Life Ins. Co., 620 A.2d 265 (D.C. 1993)

Courts that find a handbook disclaimer to be ambiguous or otherwise imprecisely drafted will give it no effect

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Implied Covenant of Good Faith and Fair Dealing

DC courts have recognized a claim for breach of the IMPLIED covenant of good faith and fair dealing in employment claims. - Paul v. Howard Univ., 754 A.2d 797 (D.C. 2000).  MD and VA do

not

recognize the implied covenant of fair dealing with regard to termination by either side in an at-will employment relationship

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Promissory Estoppel

DC courts have recognized promissory estoppel as a limitation to the employment at-will doctrine. To prove promissory estoppel, an employee must show: the existence of a promise that the promise reasonably induced reliancethat the promise was relied on to the detriment of the employee.

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Key Terms of Employment Agreements

TitleScope of EmploymentAligns expectations re responsibilities and reportingProvides guidance “for cause” and “good reason” early contract termination

Balance employer’s need for flexibility with employee’s desire for certainty

Activities Outside Work - Moonlighting

Integration Clause

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Terms of Agreement

At-Will Employer or employee may terminate the agreement at any time for any legal reasonTerms of Years limits termination before an agreed date to specific circumstances

security to parties

leverage to attract candidates

Length of term – usually 1-3 years.

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Early Termination

Early Termination“Cause” – What circumstances enable an employer to terminate before expiration of term with no further obligations?“Good Reason” – What circumstances enable an employee to terminate before expiration of term without losing benefits?Death or Disability

Voluntary

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Early Termination

“Cause” DefinitionEmployers want it broad with substantial discretionEmployees want:specific and egregious violationsnotice and opportunity to cure

Financial Consequence:

salary and benefits to termination date

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Early Termination:Definition of “Cause”

In D.C., an employee is disqualified from receiving unemployment compensation benefits if he has engaged in gross misconduct in connection with his employment.

D.C. defines “gross misconduct” as “

an act which deliberately or willfully violates the employer's rules, deliberately or willfully threatens or violates the employer's interests, shows a repeated disregard for the employee's obligation to the employer, or disregards standards of behavior which an employer has a right to expect of its employee

.”

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Considerations

Post Employment RestrictionsCompetitionSolicitationCustomersEmployees

Duration

Confidentiality

“Claw Back” provisions for violation

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Prospective Covenants

Employee’s Return of EquipmentLaptops Phones If employer pays for usage, specifically state that employee is responsible for personal charges

Credit Cards

Specifically state that employee is responsible for personal charges that might be discovered

Security Cards

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Prospective Covenants:Non-Competition Agreements

Employers require employees to sign non-competition agreements to prevent employees from taking their talents and employer’s trade secrets to competitors.Courts critically examine and narrowly construe non-compete agreements.

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Prospective Covenants:Non-Competition Agreements

Is the noncompetition agreement/the restrictive covenant enforceable?An employer seeking to enforce a non-compete must show that the restrictive covenant is supported by consideration

Courts will likely enforce a non-competition agreement that is

narrowly drawn to protect the employer’s legitimate business interest

not unduly burdensome on the employee’s ability to earn a living

not against public policy

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Prospective Covenants:Non-Competition Agreements

Courts considerThe temporal scope of the non-compete The geographic scope of the non-compete

The clarity and unambiguous nature of the non-compete

Courts are less likely to enforce restrictive covenants that hinder an employee’s ability to earn a living

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Key Considerations in Hiring

Business NeedsLegal RequirementsAnti-discrimination lawsDisparate TreatmentDisparate ImpactAmericans With Disabilities Act

Accommodation Requirements

Unlawful Questions

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Identifying and Communicating Job Requirements

Functional Job DescriptionsKey DutiesKey Skills

Reverse engineer: what would disqualify a candidate?

Job Qualifications

Minimum QualificationsPreferred Qualifications

Avoid Disparate Impact Liability

Key Principles: Job-Related

& Avoiding

Inconsistent Standards

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Legal Requirements and Pitfalls

RecordkeepingOne-year retention requirement for “any personnel or employment record made or kept by an employer” Two-year retention period for government contractors with 150+ employees

Includes interview notes

Ledbetter Fair Pay Act:

records

relating to pay decisions

should be kept indefinitely

Do not write it down if you

would not want a jury to see it

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Legal Requirements and Pitfalls

Employment Selection TestsUniform Guidelines on Employee Selection Procedures (1978)Renewed EEOC attention to Employment Testing:

Does

the test disproportionately impact a protected group?

Validation studies required to show that test is “job-related and consistent with business necessity”

Need evidence, not opinions

Bottom line: No tests without

HR approval

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Legal Requirements and Pitfalls

Setting Compensation EquitablyLedbetter Fair Pay ActDisparate impactstarting salaries

negotiating differences

Consistent criteria

Fair Labor Standards ActExempt vs. non-exempt

Individual liability

Other Compensation Issues

Commissions

Bonuses

Advances or Relocation Stipends

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Questions to Avoid

DisabilityNo pre-offer questionsPregnancyPersonal Life

Children & Marriage

National Origin

ReligionAge

Instead…

Focus on Job Purpose

Don’t Make Assumptions

Don’t Overpromise

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What You Should Say

QuestionsUnderstanding of the nature of this job?

Ever been asked to leave a job?

Ever had an internal complaint made about you?

Any reason cannot meet hours/travel/physical demands?Resume gaps?

Circumstances that need explanation?

Information

Full disclosure

Consistency

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Transition to the Hire

Choose Best Qualified CandidateDocument basis for choiceCustomer preference issuesJob-related factors only

Offer Letter

At-will employment

Conditional offers

Contract and promissory estoppel

Signs on to company policies

Ancillary agreements

non-compete

intellectual property

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Requirements under the FLSA

Under FLSA, employers must: Pay minimum wage to employees

Pay overtime to employees who work more than 40 hours in a work week

Ensure accurate record-keeping

Regulations identify and exclude certain employees (exempt) from coverage

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Types of Positions

Non-Exempt Employeescovered under the FLSA for time-and-one-half overtime“Common Enterprise” Employees

must be paid time and half for all work at ANY of the enterprises

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Types of Positions

Exempt Employees are not covered by FLSA.Examples:

Executive Exemption

Exempt: CEO and General Manager

Non-Exempt: Electrician and Car Wash Manager

Administrative Exemption

Exempt: CFO and HR Director

Non-Exempt: Clerical Employee and Messenger

Professional Exemption

Exempt: Physician and Attorney

Non-Exempt – Paramedic and Field Technician

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Common Violations of FLSA Overtime Requirements

Misclassifying all IT employees as exempt because of the common misperception that all jobs involving computers are necessarily highly complex and require exceptional expertise.

Misclassifying pharmaceutical sales representatives as “exempt” under the “Outside Sales” exemption merely because the term “sales” is included in the title of the employees’ position.

Misclassifying an employee as “exempt” merely because the employee’s job title includes the term “manager.”

Requiring employees to work “off the clock” without pay

Refusing to pay overtime to an employee where overtime was not approved in advance.

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Partial Day Docking

Generally, an employer cannot reduce an employee’s pay for a partial day because doing so would convert an FLSA exempt employee into a non-exempt employee and make them eligible for overtime pay.34Slide35

Scope of the FLSA Exemption

Exemptions are narrowly construed against employers, and should be limited to those situations that plainly and unmistakably come within the terms of the exemptions. McCloskey & Co. v. Dickinson, 56 A.2d 442 (D.C. Ap. 1947). To qualify as an exempt employee, an employee must meet both the “duties test” and a “salary basis test” for specified exemption.

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How to Avoid Common Mistakes

when Classifying EmployeesDo not equate the exercise of skill with the exercise of discretion and independent judgment

Do not designate an employee as exempt under the professional exemption merely because the employee has an advanced degree

Do not designate an employee as exempt under “computer employee” exemption merely because the employee’s a job title references computers

Do not automatically equate “salaried” with “exempt”

Conduct a thorough job-analysis

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Family And Medical Leave Act Coverage

DCFMLA: 20 or more employees in the District. D.C. Code § 32-516(1). Employee has 1 year of tenure and worked at least 1,000 hours within previous 12 months. FMLA: 50 or more employees within 75 miles for each working day during 20 or more calendar weeks in the current or preceding year. 29 U.S.C. § 2611(2)(B)(ii). Employee has 1,250 hours of service within past 12 months.

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Benefits

DCFMLA: 16 workweeks of leave per 24 month period. D.C. Code §§ 32-502 to 503.FMLA: 12 workweeks per 12 month period. 29 U.S.C § 2612.Employees shall not lose benefits or seniority while on leave.

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Calculating Leave

FMLA – An employer may elect from 4 different ways to calculate the 12 month period provided by 29 C.F.R § 825.200(b). Calendar year;Any fixed 12-month “leave year.” E.g., fiscal year, year required by state law, or starting employee’s anniversary date;

12-month period measured forward from the start of the any employee’s FMLA leave; or

Rolling 12-month period measured backward from the start of the employee’s FMLA leave.

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Intermittent Leave

Leave may be taken intermittently when medically necessary.Employees are expected to consult with their employers prior to scheduling medical treatments and make a reasonable effort to avoid undue disruptions to employer operations.Employees may request a reduced work schedule if medically necessary.

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Theories of Liability

Entitlement/interferenceEmployer denied an employee’s leave.

Employer badgered an employee to the point of interfering with the employee’s right.

Retaliation

Employer discriminates against an employee who took leave or otherwise retaliates.

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DCHRA

It shall be an unlawful discriminatory practice to do any of the following acts, wholly or partially for a discriminatory reason based upon the actual or perceived: race, color, religion, national origin, sex, age, marital status, personal appearance, sexual orientation, gender identity or expression, family responsibilities, genetic information, disability, matriculation, or political affiliation of any individual.

D.C. Code § 2-1402.11

The “Wholly or partially” language allows for a broad causation standard that is easier to meet than under federal anti-discrimination statutes.

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DCHRA

Claims under 42 U.S.C. § 1981 and the DCHRA are analyzed using

the

Supreme Court's approach in

McDonnell Douglas Corp. v. Green

, 411 U.S.

792 (

1973), the seminal case establishing the burden of proof in employment discrimination cases under Title

VII.

Under this familiar framework, the plaintiff first has the burden of proving by a preponderance of the evidence a

prima facie

case of discrimination.

McDonnell Douglas

, 411 U.S. at

802.

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DCHRA

If the plaintiff succeeds in establishing a

prima facie

case, the burden shifts to the defendant

to

articulate some legitimate

, nondiscriminatory

reason for the

adverse action.

Then, assuming the employer articulates a legitimate reason for its actions, the burden shifts back to the plaintiff to demonstrate by a preponderance of the evidence that the employer's stated reason was a pretext for discrimination.

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ADA- Overview

The Americans with Disabilities Act (ADA) prohibits excluding or otherwise denying equal jobs or benefits to a qualified individual because of the known disability of an individual with whom the qualified individual is known to have a relationship or association. 42 U.S.C.A. § 12112(b)(4).

This provision is intended to protect any qualified individual, whether or not that individual has a disability, from discrimination because that person is known to have an association or relationship with an individual who has a known disability. 29 C.F.R. Part 1630, Appendix § 1630.8.

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ADA – Prima Facie

Elements

In a failure to accommodate case, a plaintiff establishes a prima facie case by showing

(1) that he was an individual who had a disability within the meaning of the statute;

(2) that the[employer] had notice of his disability;

(3) that with reasonable accommodation he could perform the essential functions of the position ...; and

(4) that the [employer] refused to make such accommodations

.

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ADA – Qualified Performer

A qualified person can perform the essential functions of his job with or without reasonable accommodation. An individual who cannot perform the essential duties of his job, even with an accommodation, is not “qualified” under the statute.

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ADA - Disability

According to the ADA, an individual is disabled if that individual (1) has a physical or mental impairment that substantially limits one or more of the individual's major life activities; (2) has a record of such an impairment; or (3) is regarded as having such an impairment.

An

impairment is sufficiently severe to substantially limit a major life activity if it prevents an individual from performing a major life activity or significantly restricts the condition, manner, or duration under which an individual can perform a major life activity, as compared to the average person in the general population.

See

29 C.F.R. § 1630.2(j) (1996).

Under the ADAAA and its implementing regulations, an impairment is not categorically excluded from being a disability simply because it is temporary.

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