The HR Team December 2009 Newsletter

Do you watch TV?  I'll admit it, I watch TV and I watch Desperate Housewives.  It's a guilty pleasure.  A recent story line really has me intrigued from an HR perspective, and I wanted to share it with you.

A main character, Lynette, discovers that she is pregnant with twins.  She's just about to tell her boss (the CEO) about her pregnancy when he stuns her by offering her the position of Senior VP, which comes with a 50 percent pay increase.  Why did he choose her over another co-worker?  Well, that co-worker just announced that she was pregnant.  Lynette decides to delay the news. 
 
Quite some time passes, and Lynette still hasn't announced her pregnancy. She found some "creative" ways to hide the truth, concealing her stomach and letting co-workers believe that she had breast augmentation surgery.  Different reasons present themselves to continue the farce, until finally the CEO's wife sees Lynette outside of work, realizes that Lynette is pregnant, and proceeds to tell her husband.
 
The next day, the CEO offers Lynette a position in Florida, saying, "I'm not firing you Lynette, I'm offering you a promotion." The only option he's left her with is quitting. 
 
The next day, the staff throws Lynette a "Bon Voyage" party.  Her boss gives her old office away, and moves her into her temporary office, a closet. "We have an opening for you in our Florida office, but your job here has already been given to Tim," the CEO tells her, adding, "I guess this gives you no choice but to quit."

At that point, Lynette decides to sue the CEO and the company.
 
The CEO's next move is to give Lynette an impossible assignment, a report that he demands be ready by 9 a.m. the next day.  She's an hour late with completing her task, so the CEO, with his lawyer by his side, orders her to clear out her desk. Lynette promises, "I will not go quietly."  The CEO then tells her, "I don't care how you go. I just want you gone."
 
I know that Desperate Housewives is a fictional television show.  However, the scenario above could very well be real.  So I asked several employment attorneys for their perspective on the situation, and got some interesting feedback.
 
Those attorneys are: Randi Hyatt, Shareholder, Kollman Saucier; Melissa Jones, Counsel, Tydings and Rosenberg; Laura Rubenstein, Shareholder, Offit Kurman, and Harriet Cooperman, Partner, Saul Ewing.  All agreed that the "Lynette" scenario is quite troubling.  Highlights from their feedback:
 
Ms. Jones has some strong words for the CEO, "The CEO should brace himself for not one but two lawsuits.  Terminating an employee or forcing her to quit because she is pregnant is unlawful discrimination under state and federal law.  So is passing someone over for promotion because she is pregnant.  Pregnancy falls under prohibitions against gender discrimination.  He may try to defend himself by claiming that he terminated Lynette for cause (not completing the project on time).  But, if she can prove that the impossible assignment was a set-up, the court may find that his actions were a pretext for firing her because of her pregnancy.  In that case, Lynette wins."
 
Ms. Cooperman's opinion is that, "The company's transparent attempt to conjure up a performance based termination for not meeting an impossible deadline is just further fuel for the fire on both claims.  This is particularly fatal given Lynette's rather stellar record (a promotion and 50% pay hike just a few months before learning of her pregnancy!)."
 
However, Ms. Rubenstein made note that, "In the Desperate Housewives scenario, it appears, on its face, that Lynette's boss discriminated against her because of her pregnancy.  However, there are always two sides to every story and we do not have access to Lynette's personnel file to determine how her performance had been during her pregnancy."
 
Ms. Rubenstein also let me know, "In fiscal year 2008, the EEOC received 6,285 complaints involving pregnancy discrimination.  While half of those complaints were found to be without reasonable cause, the other half were not.  As employers, it is important to ensure that your pregnant employees are not treated any differently because of their condition."
 
What will happen?  In the words of Ms. Cooperman, "Damage control is needed--resolve the dispute with Lynette now.  This is not a case the company wants to try before either a judge or jury.  Get training for the CEO and his management team (perhaps even the spouse of the CEO can sit in on the class, too)!"
 
While it may or may not be the case in this scenario, HR offices are filled with managers who supervise non performers for years.  The managers don't seek to discipline or provide feedback to the individual on their performance until the person announces they are pregnant, needs time off for a personal matter, has a workers compensation related injury, and the list goes on and on.  As Ms. Rubenstein stated, employees need to be treated the same as before the condition.  So if the poor performance was acceptable prior to the pregnancy, suddenly enforcing performance standards can be seen as treating someone differently.
 
I think this Desperate Housewives situation can best be summed up by Ms. Hyatt who said that if the CEO were her client, her advice would be, "Mr. CEO.  It's time to get out your checkbook.  Be prepared to write many zeros."
 
Is your performance management process up to snuff?  Are your managers trained on what their responsibilities are as managers? Then why not give The HR Team a call to discuss what we can do for you?

COBRA Continuation Coverage Assistance under ARRA
The stimulus package, which was enacted as the American Recovery and Reinvestment Act of 2009 (ARRA), temporarily reduces the premium for COBRA coverage for eligible individuals. COBRA (the Consolidated Omnibus Budget Reconciliation Act of 1985) allows certain people to extend employer-provided group health coverage, if they would otherwise lose the coverage due to certain events, such as divorce or loss of a job.

Individuals who are eligible for COBRA coverage because of their own or a family member's involuntary termination from employment that occurred from September 1, 2008 through December 31, 2009 and who elect COBRA, may be eligible to pay a reduced premium. Eligible individuals pay only 35% of the full COBRA premiums under their plans for up to 9 months. The employer (or other responsible entity) may recover the remaining 65% of the premium by taking the subsidy amount as a credit on their quarterly employment tax return. This premium reduction is generally available for continuation coverage under the Federal COBRA provisions, as well as for group health insurance coverage under state continuation coverage laws.

That having been said, the COBRA premium reduction eligibility is set to expire at the end of this month.  However, there is pending legislation that could extend the ARRA premium assistance. Stay tuned, and be sure to contact The HR Team for assistance in COBRA, ARRA, or anything else benefits-related.

New Mileage Rates for 2010
The Internal Revenue Service issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
 
Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be: 

The new rates for business, medical and moving purposes are slightly lower than last year's. The mileage rates for 2010 reflect generally lower transportation costs compared to a year ago.

Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates.


EEOC Files Nationwide Hiring Discrimination Lawsuit Based On Company's Use of Credit Checks.

In October of this year, the EEOC ("Equal Employment Opportunity Commission")  charged Freeman (also known as the Freeman Companies), a nationwide convention, exhibition and corporate events marketing company with engaging in a pattern or practice of unlawful discrimination by refusing to hire a class of black, Hispanic, and male job applicants across the United States..
 
What did Freeman do?  They used criminal and credit checks as the basis for hiring applicants.  The EEOC claims that since at least 2001, Freeman has rejected job applicants based on their credit history and whether they have had one or more various types of criminal charges or convictions.  The EEOC charged in its lawsuit that Freeman's practice has an unlawful discriminatory impact because of race, national origin, and sex, and is neither job-related nor justified by business necessity.
 
As a result of these practices, the company was charged with violating Title VII of the Civil Rights Act of 1964, according to the lawsuit (Civil Action No. 8:09-cv-02573-RWT).  It is a violation of Title VII to use hiring practices that have a discriminatory impact because of race, national origin, or sex and that are not job-related and justified by business necessity.
 
The EEOC attempted to reach a voluntary settlement before filing suit.  They seek injunctive relief in their lawsuit, as well as lost wages, benefits and offers of employment for people who were not hired because of Freeman's use of job applicant credit history and criminal charge and conviction information.

According to the EEOC, workplace discrimination charge filings with the federal agency nationwide rose to an un­prece­dented level of 95,402 during Fiscal Year 2008 a 15% increase from the previous fiscal year.
 
Of course, using background checks in making employment decisions can be legal.  However, this case shows that employers need to be certain that the reason for the background checks can be justified for business purposes, and that the background checks don't disqualify otherwise qualified applicants.  Therefore, we highly recommend that companies consult with The HR Team and their outside attorneys when conducting background checks of applicants.


As I end the last issue of 2009, I'll leave you with this quote...
"An optimist stays up until midnight to see the New Year in.  A pessimist stays up to make sure the old year leaves." Bill Vaughan

Happy Holidays,
Eileen

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