July 17, 2012

 

Hello All,

Here is the latest issue of “This & That” Tuesday. I hope you find it to be informative and useful.

 

Possible Misclassification of Employees Costs Novartis $99 Million

Novartis thought it was acting legally when it treated its sales representatives as exempt from overtime under the Fair Labor Standards Act (the “FLSA”). Now it is paying $99 million to settle a class action lawsuit by its sales representatives, not to mention six years’ worth of attorneys’ fees. The entire pharmaceutical industry had long treated its sales representatives as exempt employees, often under the “outside sales” exemption of the FLSA, but this practice proved to be no defense.

 

The outside sales exemption applies to those who make “sales” as defined by the FLSA and customarily perform their jobs outside the employer’s place of business. Courts are now divided as to whether pharmaceutical sales representatives – who typically obtain a non-binding agreement to use the drug – are actually selling anything because there is no contract or exchange of goods or services. Novartis decided settle for $99 million.

 

Novartis’ experience shows what can happen when companies follow industry standards without independently assessing if the law actually supports the longstanding practice. Employers in other industries can learn from Novartis. Before determining that a class of employees is exempt from overtime, employers should consult with someone experienced in wage-and-hour issues. It is not safe to assume the actions of other companies are correct, nor should you assume an exception correctly applied in one case can necessarily be applied to your situation. Employers should take the time now to ensure their pay policies are lawful under state and federal statutes.

 

Convergys Settles EEOC Suit for Religious Discrimination

Convergys Customer Management Group will pay $15,000 and furnish other relief to settle a religious discrimination lawsuit filed by the EEOC. The EEOC charged Convergys with violating federal law by refusing to hire a call center job applicant who could not work on Saturdays due to his religious beliefs.

 

According to the EEOC’s suit, the applicant answered an advertisement for a customer service position at Convergys’s call center. The applicant’s religious beliefs require him to observe the Sabbath from sunup until sundown on Saturday. A recruiter for Convergys interviewed him and told him that he would have to work weekends. The applicant informed the recruiter that he was unable to work on Saturdays due to his religious beliefs. The recruiter then told the applicant that the interview was over unless he could work Saturdays.

 

Religious discrimination in the workplace is prohibited by Title VII of the Civil Rights Act of 1964 and employers are required to make reasonable accommodations to employees’ and applicants’ sincerely held religious beliefs as long as this does not pose an undue hardship. The EEOC filed suit after first attempting to reach a pre-litigation settlement through its conciliation process.

 

The consent decree settling the lawsuit provides for injunctive relief including training for recruiters on religious discrimination and accommodation law and a new procedure for recruiters that will allow applicants to request a religious accommodation once they are offered a job, and will require that the interview application process be completed even if the applicant informs the recruiter about the need for a schedule adjustment. In addition, all job applicants during the decree’s two-year term will receive written notice that they may be entitled to an accommodation.

 

The applicant never had a chance to discuss accommodation options because the recruiter simply cut him off once he stated that because of his religious beliefs he could not work on Saturday. Giving an employee an alternate schedule where hundreds of employees are available to cover the shift was not an unreasonable request. The new procedures, training and notice to applicants provided for in the decree should allow applicants to request and obtain a reasonable accommodation based upon their religious needs. Other employers should take note of these requirements.

 

Refusal to Sign Disciplinary Document Bars UI Claim

Employees are barred from receiving unemployment insurance (UI) benefits if they have been discharged for “misconduct.”

 

A California court recently ruled that an employee’s refusal to sign a disciplinary memorandum can be considered “misconduct” disqualifying him from receiving UI benefits.

 

Four Things a Good Supervisor Should Tell New Employees

1. These are our policies then review key policies and refer the employee to the Employee Handbook for all the details
2. These are my expectations for you then review the employee’s written Job Description
3. Here's how I will let you know how you are doing then explain both your informal review process and your formal Performance Appraisal form.
4. Let me know ASAP when you run into any roadblocks or have any questions.

 

Factoids

• 68% of employers are implementing programs to retain key employees (OI Partners)
• Aviva Investors accidentally fired over 1300 employees when it sent out an email that was intended for one person to the entire company.

 

From Schwab Survey

• 73% of employees say they spend less than 8 hours per year managing their 401(k) plan
• 83% of employees say they want investment advice but only 10% actually get it when offered.
• Nearly 1/3 of employees don’t know they pay fees for their 401(k) plan
• 56% don’t look at the educational materials employers provide

Don’t forget the take my 3-minute Human Resources Mini Audit