Firing an "At-Will" Employee

Gina Madsen is one of the really bright small business attorneys in Nevada.  She recently asked me to write an article on a ‘real-life’ situation – and I chose the concept of firing an at-will employee.

Even though most states abide by at-will concepts (you can fire an employee at any time for any reason – other than a few exceptions), there are many compliance and management principles that should be followed.

Here’s the blog on her great website – http://www.madsenlawoffice.com/

California Alternative Workweek Schedules

One of the best ways of improving morale without costs is to consider Alternative Workweek schedules.  Up until January 1, it has been most difficult to implement.  However, California law regarding alternative workweek schedules have been eased somewhat as a result of AB 5.

Alternative workweek schedules allow non-exempt employees in a “work unit” to work in excess of 8 hours per day without incurring overtime. (California law includes a daily overtime requirement.) Generally, an employer may propose AWS work schedules of up to ten hours per day (12 for healthcare workers). Hours in excess of 10 per day, or 40 per week are overtime. Typically employers propose schedules consisting of four ten hour days or a “9/80” schedule. Special procedures describe advance disclosure and a secret ballot election prior to implementation of the AWS.

The AWS can apply to a “work unit” within a company, rather than to all employees. Previously, the Labor Code did not define “work unit,” although state regulations included a definition. The new law defines a work unit as “a division, a department, a job classification, a shift, a separate physical location, or a recognized subdivision thereof.” The amendment also clarifies that even a single employee may qualify as a work unit as long as his job function meets the definition.

In setting up an AWS, an employer may propose a single work schedule, or it may propose a menu of work schedule options for workers to select. Can the “menu” include a traditional 5 day week for those employees who do not want to work longer days? The amended law clarifies that the menu options may indeed include a regular schedule of five eight-hour days in a workweek. Consequently, employees who do not wish to work an AWS schedule may still vote in favor of the AWS by choosing to work the regular 8 hour day. This change greatly increases the odds of achieving the 2/3 employee supporting vote need to implement an AWS.

Additionally, the new law specifies how often employees may move from one schedule option to another on the menu. For example, if an employee opts to work four 10 hour days, how frequently can he opt to go back to regular 8 hour days? As amended, Labor Code § 511 allows employees to move from one schedule option to another on a weekly basis.

Independent Contractor or Employee? Better Be Sure, And Fast!

Many employers incorrectly classify an employee as an independent contractor.  Some employers do it intentionally (to avoid workers’ compensation and payroll taxes); but most are unaware of what the difference in classification actually is.

If you use Independent Contractors (also known as 1099’s), you better audit all of them at once.  The IRS is about to launch comprehensive audits of 6,000 businesses.  The focus is – you guessed it – properly classifying employees.

Please take a moment to review the criteria the IRS uses to determine whether a person should be classified as an employee or Independent Contractor.  It’s about control.  I’ve had clients insist a person is classified as a 1099 simply because that person requested classification that way! (That’s wrong as well, by the way).

Get a qualified consultant or employment attorney to audit your practices and procedures as soon as possible.

Courtesy Baker Hostetler

Managing Social Media in the Workplace

The impact of social media in the workplace is growing.  Time is being wasted, employees are ‘friending’ each other and liability for these issues is a litigation attorney’s dream come true.

RSJ/Swenson has prepared a special report on Managing Social Media in the Workplace, based on Eric Swenson’s recent presentation at the CalCPA Employment Practices Conference.  You can download the report here.

And bosses & managers: Don’t “friend” your employees!

Why You Should Never Include A "Discipline Policy" In Your Employee Handbook

If your business is in an “at-will” state (and you are, unless you’re in Montana), you should never ever include disciplinary steps in an employee handbook.

Latest case in point: Buttrick v. Intercity Alarms, LLC.  This company, located in Massachusetts, had a section in their employee handbook called “Disciplinary Policy”which indicated the severity of any disciplinary action taken by the company would “in accordance with the following: Verbal Counseling . . . Written Counseling . . . Suspension.”.

Guess what?  An employee was terminated after one verbal counseling, but not written counseling or suspension.  That is a business owner’s right – unless it’s in writing in the employee handbook!

So, the employee sued, and won $41,888 from Intercity Alarms.  (To say nothing of the legal fees incurred by Intercity).

Don’t put a discipline policy in your handbook.  Train your management team in appropriate steps and anytime an employee needs to be disciplined, run it by your HR department or your HR Consultant.

A great write-up on the case is here from Ogletree Deakins.

Nevada Expands Parental Leave Requirements

Effective August 15, Nevada has expanded its parental leave entitlements for employees who wish to attend or participate in school activities of their children.

AB 243 allows parents, guardians and custodians of children in private or public schools up to 4 hours of unpaid leave per school year for each child.

The law requires employers who have 50 or more employees to grant that unpaid leave.

More detailed information from Rick Roskelley of Littler Mendelson.

Can You Prevent Employees From Leaving?

We live in a free society, and all businesses (except Montana and limited other exceptions) must abide by the ‘at-will’ employment concept – employees can leave at any time for any reason.

Many employers ask us what they can do from preventing valued or critical employees from leaving (and taking their clients or proprietary information with them). The answer is – not much, unless you have a really good employment attorney.

Let’s review the basic components (adapted from a terrific article by Joseph Shelton of Fisher & Phillips LLP)

Non-Compete Agreements

A non-compete provision prohibits a departing employee from competing with the former employer after termination. Most states highly restrict their use.

Non-solicitation

Non-solicitation provisions allow an employee to work for a competitive business, but prohibit the solicitation of specific customers. The employee is free to compete and is free to work in whatever territory he or she desires, so long as the employee does not solicit business from a specific group of customers.

Non-recruitment

A non-recruitment (or no-raid) clause is designed to protect your employees from being hired away by former employees. Non-recruitment covenants restrict departing employees from trying to take others with them.

Non-disclosure

A confidentiality (or non-disclosure) provision usually limits the employee’s ability to disclose information learned about customers, suppliers, or the employer’s operations. While non-disclosure agreements often include the term “trade secrets,” most states have a trade-secrets statute that prohibits misappropriation of such information even without a contract.

Return of property

A return of property agreement typically states that the employee must return all company property and all documents related to the company upon termination of employment. While all employers expect their employees to return company property upon termination of employment, there is oftentimes a dispute as to what is company property and what is the employee’s property.

For example, many employees may claim that their rolodex or list of business prospects is their “property,” despite the fact that such information was assembled on company time and with company resources. A return of property agreement may help an employer avoid such disputes by defining via contract what the company considers to be its property rather than the employee’s.

Bottom Line: These agreements are highly legal in nature and should only be implemented with the input and agreement from a qualified employment attorney.