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Labor and Employment Law Newsletter
Summer 2000

Articles:

EDITOR'S WELCOME
Robin E. Shea
Winston-Salem Office

I am honored to be taking over editorial responsibility for the Constangy newsletter from Zan Blue of our Nashville office, who provided the thoughtful, and downright visionary, viewpoints on labor and employment issues that you have become accustomed to seeing in these pages.  Zan has made the decision that he cannot continue as editor-in-chief and still do justice to his many other responsibilities, as new head of our Nashville office, a member of our Executive Committee, co-chair of our Marketing Committee, and - most important, serving our clients.

The good news is that Zan has agreed to contribute to the newsletter in the future, so you have not heard the last of him.

During the coming year, you will be seeing some changes in this newsletter, including the following.

  • Change to a more visually pleasing format, including new layout and more graphics.
  • Identification of the lawyers who contribute to the newsletter.
  • The addition of "in-every-issue" features, including question-and-answer and expansion of Zan's popular "Reason Prevails" feature to include decisions, regulations, and rulings that are notably unreasonable. 
  • News about our firm.  Constangy is expanding rapidly to better serve a more diverse geographical area; however, we want to maintain the close relationships with our clients that we have had in the past.  We hope that keeping you up to date on what's happening with us will help in that regard.

We also want your feedback.  If you have any suggestions for topics to include in the firm newsletter, as well as any comments - good or bad - about the "new" newsletter, we would very much appreciate hearing from you.  You can e-mail your comments to me at rshea@constangy.com, or fax them to 336-748-9112.

We are excited about going forward with you.


BEHIND THE TIMES:  Wage-Hour Laws Fail to Keep Up With 21st-Century Workplace

Donald W. Benson
Atlanta Office

Wage and hour laws are an antiquated quilt-work of Depression-Era statutes, regulations, and advisory opinions that have little applicability to today's workplaces.  Although the Government Accounting Office ("GAO") has recommended changes to the current overtime exemptions for white-collar employees, consensus as to how this should be done is sorely lacking. 

In the meantime, employers need to know how to pay their employees so that they are in compliance with the law.  Barring a miracle cure for governmental paralysis, employers would be well advised to periodically review their pay practices to determine whether formerly "exempt" jobs ought to now be treated as non-exempt.

The following are some of the key areas in which modern workplaces run afoul of the wage and hour laws:

Supervising computers instead of people.  Computers have greatly reduced the need for humans  in many departments.  Accordingly, supervisors in such departments may no longer supervise two or more employees, and thus fail to qualify for the executive exemption from the FLSA's overtime requirements.  This is a common problem in purchasing departments, for example, which used to have multiple employees but now may have nothing more than a purchasing "manager" and a computer.

"Indiscretion."  Computerized information also means that many employees have lost the discretion they used to exercise in their jobs. 

To return to the purchasing example, a purchasing agent who used to select vendors and negotiate prices now may merely use a list from a corporate data base, with vendors and pricing determined by the home office.  Thus, he or she may no longer "customarily and regularly exercise discretionary powers," another must for exemption from FLSA overtime requirements.

The "Ultra-Delivery" employee.  Many companies have hired highly qualified individuals to deliver products to customers with the intention of having those "delivery persons" provide top-quality customer service and make sales as well.  Such companies often pay such employees on a salary basis and pay them much more than they would a mere deliverer of goods.

As usual, federal regulations throw a monkey wrench into companies' desire to better serve their customers in this way.  They require that the amount of time spent on "non-exempt" functions be measured in determining whether an employee is exempt.  Because these employees do spend a substantial amount of their work days making deliveries (a non-exempt function), they are at risk of being declared non-exempt.
Off-site work.  There is little question that time spent on the job, no matter where performed, is work time for FLSA purposes.  Less clear, though, is whether the following also constitute "time worked":

  • Receiving instructions at the end of the day for working at a customer site the following work day;
  • Handling work-related tasks on a car phone while commuting home;
  • Commuting in general, when the employee continues working once arriving home.

A related question is whether substantial work off site means that the employee's primary duty no longer consists of the "management of a customarily recognized department," as required for the executive exemption from overtime laws.

It is dangerous to assume that a position is still exempt, just because it "always has been."  As jobs change and efficiencies create unprecedented productivity, employers must continually reassess the way their shiny new jobs fit into the rusty, creaking machinery of the FLSA.

Don Benson is in Constangy's Atlanta office, and practices in the areas of general prevention, litigation, and wage and hour.  

 
FIRST UNION TAKES LUMPS IN "WOMAN BASHING" CASE

Kristine M. Howard
Winston-Salem Office

The Fourth Circuit Court of Appeals has held that First Union National Bank will face a jury trial based on a former employee's allegations of her supervisor's "sexist" but non-sexually- provocative behavior.

In Smith v. First Union National Bank, the Fourth Circuit Court of Appeals reversed the district court's grant of summary judgment on the plaintiff's sexual harassment claim under Title VII despite the fact that the plaintiff had failed to report her supervisor's conduct for approximately two years.

The plaintiff alleged that her supervisor made numerous derogatory comments about women, including the following:  women were too emotional to be good managers; women got ahead only by sleeping their way to the top; and men were preferable in management because they were "natural leaders."  He had also behaved toward her in a physically threatening manner.

First Union tried to defend itself by pointing to the plaintiff's long delay in bringing her allegations to the attention of management.  However, the Court found that the delay was reasonable on the plaintiff's part because the bank's harassment policy did not explicitly address non-sexually-provocative behavior.  Thus, said the Court, the plaintiff was justified in believing that the harassment policy did not apply to her situation.

The Court also found that, according to the plaintiff's allegations, the bank had responded poorly to her complaint once she made it.  The human resources manager treated the investigation as relating to the supervisor's "management style" and ignored the harassment issue, failed to follow up with key leads, and never even asked the supervisor whether he had made any of the alleged remarks. 

The court also found that when First Union finally took action, it was either inadequate or downright harmful to the plaintiff.  The bank ignored the advice of the plaintiff's employee assistance counselor to remove her from any potential contact with the supervisor.  And although the plaintiff applied for 75 positions in an attempt to get away from the supervisor, she was interviewed for only two positions and was not hired for either one.

This case, which is noteworthy mainly because of the size and presumed sophistication of the employer, contains several lessons:

  • Make sure that your company's no harassment policy includes discriminatory as well as "sexually provocative" behavior and comments.
  • Ensure that managers as well as employees understand the harassment policy and that managers understand how to respond to complaints.
  • Follow all leads during the investigation of a harassment complaint.
  • If the complainant receives counseling, be prepared to follow the recommendations of the counselor or have a solid reason why you can't.
  • Don't require an employee in a severe harassment situation to return to the position that was causing her problems.

Companies must be able to demonstrate through their policies and actions that they are  genuinely concerned about preventing and promptly addressing unlawful  harassment.

Kristine Howard, from Constangy's Winston-Salem office, practices in the area of employment litigation.


CHECK US OUT!

Constangy attorneys have been published in the following recent "out-of-house" publications:

Mike Blumenthal (Kansas City), "The Brain Drain:  Protecting Your Company's Interests," Kansas City Business Journal, April 21, 2000 . . .

Don Benson (Atlanta), "White-Collar Exemptions Need Revision," HR Atlanta (April 2000) . . .

Pat Tyson (Atlanta), "Whistleblowers," Safety and Health Magazine (April 2000) . . .

Al Rolnick and Tom Grow (Atlanta), "Preventing Workplace Violence:  Advice for  Dealing With a Hard Reality," Bobbin (April 2000) . . .

Craig Moore (Nashville), "English-Only Rules in the Workplace," The Labor Lawyer  (January 2000) . . .

Robin Shea (Winston-Salem), "The Dirty Dozen:  Top Twelve FMLA Mistakes," HR Magazine (January 2000) . . .


KUDOS

Zan Blue (Nashville) has been appointed chair of the Continuing Legal Education Committee of the Nashville Bar Association and named to the Board of Directors of Nashville Bar Association Member Services, LLC, a non-profit organization providing placement and other support services for the legal community in Nashville . . .

John Doyle (Winston-Salem) has been named Individual Supporter of the Year by Goodwill Industries of the Southeastern Piedmont, Inc. . . .

Jonathan Martin (Macon) has been elected Chairman-Elect of the Employer's Duties and Problems Committee of the Georgia Young Lawyers Division . . .

Congratulations to Zan, John, and Jonathan!
 Organizing Issues in the Health Care Industry


WHITE IS BLACK, AND SUPERVISORS
ARE NOT "SUPERVISORS''

Kimberly H. Seten
Kansas City Office

Unionizing in the health care industry is an increasing concern.  This is the first of what will be a three-part series by Kimberly Seten from Constangy's new office in Kansas City.

Are your charge nurses "supervisors"?  The NLRB is striving mightily to keep them in the ranks of non-management employees.  Before 1994, the Board had taken the position that supervisory tasks that were "incidental to patient care" were not "supervisory tasks".  In other words, to the extent that a charge nurse directed less-skilled employees in patient care, he or she was not "exercising authority in the interest of the employer."

 (Apparently, in the Board's view, health care employers had no "interest" in ensuring good patient care.)

The U.S. Supreme Court sensibly nipped this in the bud in 1994, rejecting the Board's standard.

Now the Board is back.  In August 1999, it issued a Guideline Memorandum modifying its earlier position, but not by much.  (The Memorandum provides an outline for the regional offices to follow when investigating disputes regarding a charge nurse's supervisory status.) Under its new standards, a charge nurse is not a supervisor if he or she merely exercises routine technical judgment in directing less-skilled employees, for the purpose of delivering services in accordance with the employer's standards.

Charge nurses are many employers' front line supervisors:  valuable channels of communication during a union organizing campaign to promote the employer's message.
Thus, health care employers should evaluate the duties and authority of their charge nurses to ensure that they are true "supervisors."

What Is a "Supervisor"?

The Act defines a supervisor as "any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not merely of a routine or clerical nature, but requires the use of independent judgment."

Here are some of the areas the Board examines in determining whether a charge nurse is a true supervisor:

Independent judgment.   Does the charge nurse supervise, or does he or she merely direct employees in routine health care tasks?  If the charge nurse is not a supervisor, who would be the employee's immediate supervisor?  Does the charge nurse help prepare patient care plans?  Do charge nurses have the authority to depart from established guidelines and protocols?

Assignment and Direction of Work.  Is the charge nurse authorized to recruit additional nurses or aides as he or she sees fit?  Is he or she authorized to reassign nurses to another floor or wing if the current floor is overstaffed?  Is he or she the individual who determines whether the floor is understaffed?  Does he or she make assignments?

Discipline. Is the charge nurse authorized to discipline employees or recommend discipline?  Can the charge nurse issue counseling forms?  To what extent does higher management independently investigate disciplinary reports?  Do charge nurses institute progressive discipline?

Performance Eval-uations. Does the charge nurse evaluate employees?  Do the evaluations include recommendations for wage increases or promotions?  How effective is the charge nurse's recommendation?

Adjustment of Grie-vances.  What role, if any, does the charge nurse have in resolving employee complaints?  What authority does the charge nurse have to resolve employee grievances?  What disputes must be referred to higher management?

These questions are only a sample of those asked by the Board during an investigation of the supervisory status of charge nurses.  If you are unsure of the status of your charge nurses, we recommend that you conduct an audit, ideally with the assistance of legal counsel, to determine whether they have sufficient authority to be considered true supervisors.

 Constangy Clinches Third Expansion in 11 Months


BIGGER AND BETTER

Constangy continued unprecedented growth as we merged effective May 1 with the Florida law firm of Malfitano, Campbell & Dickinson.  Effective January 1, 2000, we added an office in Kansas City, Missouri — our first office ever in the Midwest and in July 1999, the entire Macon, Georgia, office of another labor and employment law firm joined us, enhancing our representation of Southeastern clients outside the Atlanta area.

With these three additions and new attorneys in other offices, our national attorney base has increased more than 40 percent, and we have increased our total number of offices to 11.

Florida

The Malfitano firm has offices in Tampa, Jacksonville, and Lakeland, Florida.  Mike Malfitano is head of the Tampa office and John Dickinson heads the Jacksonville office.  The other Tampa attorneys are John Campbell, Angelique Groza Lyons, Ross Spano, Gregory Lineberry, and Matthew Effland.  The other Jacksonville attorneys are Damon Kitchen, Margaret Philips, and Martha Bolton.

Attorneys from both offices also spend part of their time serving clients from the Lakeland office.

The Florida attorneys practice primarily in the employment litigation area, and also practice in the areas of traditional labor, and pension and welfare benefit programs.

Kansas City

Heading the Kansas City office is Robert Janowitz, formerly chair of the labor and employment section of Shook, Hardy & Bacon, LLP, in Kansas City.  He is joined by Steve Schuster, Mike Blumenthal and Kim Seten.  Many clients will remember Mike Blumenthal, who left Constangy in 1994 to join Shook, Hardy.  We were sorry to lose Mike in 1994 and are happy to have him back, as well as Bob, Steve, and Kim.

The Kansas City attorneys have developed extensive depth in the area of union organization issues in the health care industry, as well as the ability to provide the full range of representation in labor and employment issues.  Kim has a feature article in this edition of the newsletter.

Since joining Constangy, the Kansas City office has hired one new attorney:  Tim Marks, a 1997 graduate of Duke University School of Law, practices primarily in the litigation defense area.

Macon

In July 1999, the Macon office of the law firm of Haynsworth, Baldwin, Johnson, & Greaves, LLC, became Constangy's sixth office.  The office is headed by Mel Haas, who is joined by Ed Ennis, Jeff Thompson, Bill Clifton, Kristin Smith, Jonathan Martin, Frank Butler, and Brett Bartlett.

Mel and Jeff practice primarily in the traditional labor area, and the other Macon attorneys focus on employment advice and litigation defense.

In case you need a scorecard, Constangy now has offices in Atlanta; Birmingham, Alabama; Nashville, Tennessee; Columbia, South Carolina; Winston-Salem, North Carolina; Arlington, Virginia; Macon, Georgia; Kansas City, Missouri; and Tampa, Jacksonville and Lakeland, Florida.

 "And, next time, we'll feature some HR managers who are very upset with their 40-something CEOs . . .''

A recent edition of USA Today contained a feature called "Young execs burn up fast track," on CEOs who were in their 40s. 

Some of these junior fast-trackers, who shall go nameless, and one head-hunter, made ill-advised comments regarding their theories for believing that CEOs were becoming younger, including the following:

  • People in their 40s have a high energy level. 
  • Baby boomers are more open, more informal, and less hierarchical than the older generation. 
  • "The real innovators tend to be young up-and-comers.''

A refreshing contrast came from G. Richard Wagoner, a mere 47 years old, who will become CEO of General Motors in June.  Wagoner conceded that CEO was a high-energy position but said, "I know 60-year-olds who can run circles around 47-year-olds."

It was not readily apparent whether the others realized that their comments, published in a national newspaper, could and would be used against them in the event that any of their employees sued their companies for age discrimination.
 

REASON PREVAILS . . .

Obnoxious lawyers lose fees.  The winning lawyers in a race discrimination case had their fees reduced from $1.6 million to $312,000 after engaging in "locker room" behavior and inflating the hours they claimed to have spent on their case.

Walking held an "essential function" of playing pro golf.  The Court of Appeals for the Seventh Circuit, which covers Illinois, Wisconsin, and Indiana, held that a disabled golfer was not entitled to a golf cart as a "reasonable accommodation" in a professional golf tournament.

. . . and Reason Flails . . .

Obnoxious lawyers get fees.  The aforementioned obnoxious lawyers still received $312,000 in fees after engaging in "locker room" behavior and inflating the hours they claimed to have spent on their case.

Walking held NOT an "essential function" of playing pro golf.  The Court of Appeals for the Ninth Circuit, which covers California, Washington, Oregon, Idaho, Montana, Hawaii, Alaska, Arizona, Nevada, and Guam, held that a disabled golfer was entitled to a golf cart as a "reasonable accommodation" in a professional golf tournament.

Alleged embezzler wins reinstatement.  The Connecticut Supreme Court upheld an arbitrator's decision to reinstate an employee who pleaded "no contest" to embezzling funds from his employer, opining that a "no contest" plea was not equivalent to "guilty beyond a reasonable doubt."

Occupational hazards of phone sex.  An operator for a phone sex business in Florida won workers' compensation benefits for carpal tunnel syndrome resulting from self-abuse performed in the line of duty.


 QUARTERLY QUIZ

 True or False:  The maximum damage award a plaintiff can recover in a federal discrimination suit is $300,000.

Answer to Quarterly Quiz -- In addition to the maximum of $300,000 compensatory and punitive damages that applies to lawsuits brought under Title VII and the ADA, the winning plaintiff in a federal discrimination lawsuit can recover back pay, back benefits, possibly front pay and benefits, costs and attorney's fees.  (Of course, a greedy plaintiff can also sue under other laws that may have no damage cap whatsoever.)