Welcome to Legal Briefs for HR!  This update on issues that matter to employers is provided as a service of the SHRM Texas State Council, which I serve as Co-Director of Legislative Action.  Feel free to forward this email to anyone who would benefit . . . all are welcome to join this FREE service with over 3000 subscribers!

A special welcome to new subscribers I had the pleasure of speaking to at SHRM chapter meetings in San Angelo and Beaumont!  And I look forward to addressing the Dallas Bar Association Computer Law section on Monday, August 21 on the subject of electronic communications in the workplace.

Here’s what’s up:

Pension Protection No Longer Pending – The Pension Protection Act of 2006 became law on August 17, after wrangling over tax breaks and the federal minimum wage ceased.  The measure, which was supported by SHRM, tightens how companies fund their pensions (so that a taxpayer-funded bailout of the PBGC can be averted), allows employers to automatically enroll employees in their 401(k) plans and removes obstacles to plan-provided investment advice to participants.  For full text, go to http://thomas.loc.gov and type in H.R. 4 or Pension Protection Act.

Congressional Hearing . . . in Plano! – The U.S. House of Representatives Committee on Education and the Workforce Subcommittee on Employer-Employee Relations came to us, to conduct a field hearing on immigration and employment verification.  SHRM member Geri Simmons of ConAgra Foods testified about her company’s use of the SSA Basic Pilot electronic verification system, since bills pending in the House and Senate, if passed, will mandate employer verification of all hires via this type of system.  The transcript from the hearing reveals a number of concerns with the Basic Pilot system (e.g., accuracy, speed), the proliferation of false documents and a request to make any new electronic verification system replace rather than add to the I-9 process.  Stay tuned.

Round One to Wal-Mart – Remember the new state law in MD that requires any for-profit employer with 10,000+ employees in the state to spend at least 8% of total wages on employee medical benefits, or pay into a state fund?  Remember ERISA? Well, they don’t mix well.  A retail trade association sued to invalidate the law and the court agreed that the state law was preempted by ERISA.  Retail Indus. Leaders Association v. Fielder (D. Md. 7-10-06).  This is not the last you’ll hear of this issue.  So-called “fair share” bills have surfaced in about 30 states, especially those struggling with Medicaid costs.

Uniform Rules – DOL has reiterated its rule, via a Wage and Hour Opinion Letter, that employers may not deduct the cost of uniforms (or their cleaning) from nonexempt employees’ pay or tips, even if the employee agrees to it.  The letter is a must-read for those in the hospitality biz and you can find it on the U.S. Dep’t of Labor website at www.dol.gov/esa/whd/ by clicking on “Opinion Letters” in the far right column.

It’s Hot Out There – California has replaced its temporary heat regulations with a final rule which requires employers with outdoor workers to provide adequate water and access to shade, in order to avoid or recover from heat illness.  Even if you’re not in CA, check that sufficient water is available (i.e., one quart per person, per hour), coach supervisors to encourage regular hydration among workers and find (or make) nearby shady spots.

Hot Topic – Mandatory harassment training is on the agenda in CA, too.  The FEH Commission adopted a modified proposed regulation which makes the training mandatory for all supervisory employees if the employer has 50 or more employees or contractors, regardless of where they are employed in the U.S.  No need to have at least 50 employees in CA and no need for the affected supervisor(s) to work or live in CA (so long as they directly supervise ees in CA).  The training is to occur every two years, and within six months for newly hired or promoted supervisors.  The training is to be at least two hours long, but can be done in increments of least 30 minutes apiece.  The trainer, including instructional designer, must have legal education or practical experience in harassment, discrimination and retaliation training, be knowledgeable about the relevant CA and federal laws and be able to answer questions from the supervisors.  The training must be interactive, and if e-learning is used, the supervisors must be able to ask questions and get an answer within two business days.  For full text of the proposed regulation, go to www.fehc.ca.gov/ and click on Modified Harassment Training Regulations.  Even if you don’t have a single worker in CA, don’t forget that the U.S. Supreme Court made harassment training your best friend (as an element of your affirmative defense) in cases involving supervisory harassment.  And other decisions limit or eliminate liability and/or punitive damages if the employer had a policy, a complaint procedure and did training. 

Lesson Learned – Even teachers can learn something new.  A motorcycle repair school that prohibited unapproved overtime work, but may have told teachers not to record OT even if it was worked, will find out its fate at trial.  In denying a motion for summary judgment, the court said “mere promulgation of a rule against such work is not enough . . . management has the power to enforce the rule and must make every effort to do so.”  The court also noted that the rule against unapproved OT is no defense, where the employer has actual or constructive knowledge that work is being done.  Fletcher v. Universal Technical Inst., Inc. (M.D. Fla. 6-15-06).

McLawsuit – McDonalds prevailed and their RIF’d employees’ age claims were dismissed, on a finding that the ADEA waivers the plaintiffs signed were valid under the OWBPA.  The OWBPA amendment to the ADEA sets forth the requirements for a “knowing and voluntary” waiver of claims.  If the waivers are offered as part of an exit incentive or other employment termination program offered to a group or class of employees, they must be provided along with a list specifying the job titles and ages of those who were considered and those who were selected for the program, in order to more easily identify potential age bias in the process.  Here, the employees were given info about their region (Atlanta) but not national RIF data.  The lower court took the broader view of the “unit” but the appeals court narrowed it down to the Atlanta region, relying on the EEOC’s interpretive regulations.  Burlison v. McDonald’s Corp. (11^th Cir. 7-11-06).

More Info for Employers – A number of proposals are pending which could make info on applicants more readily available to employers, without a middleman.  There is a Senate bill pending which, if passed, would create a national Internet database that would list convicted child molesters and be searchable by zip code.  The Dep’t of Justice is recommending that employers have access to the FBI’s criminal history database, so long as each employer certifies that it will use the info without violating state and federal EEO laws.  The DOJ report containing this proposal is available at www.usdoj.gov/olp/ag_bgchecks_report.pdf.

Noncompete Nixed  – Some courts will modify (“blue pencil”) an overbroad noncompete in order to make it enforceable, but they may not if the overreaching goes too far.  In a case involving a house-cleaning business, the court explained that it could strike out unreasonable provisions but could not add terms that were not part of the original agreement.  The departing office manager did have knowledge of the customers’ names, addresses and requirements, which is a protectible interest, but the two-year, 25-mile radius prohibition against owning, managing or materially participating in a substantially similar business went too far.  The subject of the unenforceable restraint said she could agree to a ban on soliciting the company’s customers and employees for a reasonable amount of time, but the court would not add the “new” term and declared the agreement unenforceable.  MacGill v. Tina Reid dba Reid’s Housekeeping (Ind. Ct. App. 7-18-06).

Kudos! – Congratulations to Irving, TX-based Fluor Corporation for being a 2006 Freedom to Compete award recipient!  The EEOC recognized Fluor for its mentoring circles program, which provides five to seven mentees and one executive (who serves as a mentor) the opportunity to regularly meet and learn more about the company and each other.  The press release (www.eeoc.gov/initiatives/compete/award/2006/fluor.html) reports there are 24 active mentoring circles in Houston involving 210 employees.  Way to go, Fluor!

Until next time . . . stay cool!

Audrey E. Mross

Labor & Employment Attorney

Munck Carter, LLP

600 Banner Place Tower

12770 Coit Road

Dallas, TX 75251

972.628.3661 (direct)

972.628.3616 (fax)

214.868.3033 (cell)

amross@munckcarter.com