Fox Searchlight Pictures, the maker of last year’s award winning film, Black Swan, is named as the defendant in a lawsuit filed by two former interns claiming multiple violations of the Fair Labor Standards Act (FLSA) and New York state labor law regarding recordkeeping, minimum wage and overtime violations. The suit seeks class action status that would potentially encompass up to 100 individuals who worked as assistants and interns and, it is alleged, were unpaid unlawfully. Of course the lawsuit has to unfold before wrongdoing or lawfulness can be pronounced; however, it noteworthy that this previously somewhat neglected category of FLSA violation is now being scrutinized with a high profile company. This Hollywood spotlight has strong potential to light the way for similar suits.
The difficult economy, lack of job openings and preponderance of students and others willing to accept unpaid internships can create a tempting situation for employers. But this lawsuit sends the message that it’s probably no longer safe for employers to reason, “everyone does it.” The Department of Labor has long had a six factor test for unpaid internships so if you’ve not already done so, and you have interns, you should become familiar with it immediately.
Here are a few additional tips:
Implement procedures that ensure the HR department is always in the loop and managers can never bring anyone on board without HR’s prior knowledge and approval;
If the internship is not tied to an academic program, your chances that it qualifies as unpaid go down;
If the intern is brought on board in lieu of a regular employee doing the work, the intern is actually an employee and the FLSA and state laws apply;
If HR determines the internship position does pass the DOL six factor test, supporting documentation should be kept on file;
Understand and document what interns are doing, how their work is overseen and by whom;
Check state laws as well to ensure both federal and state compliance;
The FLSA makes an exception for bona fide volunteers in the non-profit sector or for state or local government agencies.
The punishment for violating the FLSA can be severe and may include steep fines in addition to back regular pay and back overtime pay, back taxes, and attorneys’ fees for the opposing side. Even when companies prevail, lawsuits are generally costly. It will be interesting see how this version of the Black Swan story turns out.
What does a cat’s paw have to do with managing human resources at your organization? Well, it begins with a fable about a monkey who persuades a cat to remove roasting chestnuts from smoldering embers. The cat burns his paw in the process and, you guessed it, the cat never gets his share of the chestnuts; the monkey runs off with them all.
So what does this 17th century French fable have to do with HR? The American Heritage Dictionary defines the term “cat’s paw” as a person used by another as a dupe or tool. Earlier this year, the Supreme Court issued a ruling based on cat’s paw theory. The case involved an army reservist, Vincent Staub, who worked at a hospital. After review of his personnel file, which included a prior disciplinary action, and after speaking with his supervisors, the HR Manager made the decision to terminate him.
Staub sued for wrongful discharge, contending that he had been fired in violation of the Uniformed Services Employment and Reemployment Rights Act (USERRA) based on time off for military service. The Supreme Court agreed with Staub that the prior disciplinary action in his personnel file was based on biased reporting by his supervisors who maintained an anti-military mindset. They further determined that these biased supervisors had influenced the final decision-maker, the HR Manager, when they caused the prior discipline to be entered into Staub’s records. So, while the HR manager herself showed no anti-military bias, she relied on information that was discriminatory in making the decision to terminate. Under cat’s paw theory, she served as the dupe used by the supervisors.
So what does this mean for your organization? Well, clearly, one should tread carefully with all adverse employment actions. This means thorough fact-finding investigations. You shouldn’t necessarily take a supervisor’s word alone without further digging. Review all anti-harassment policies and all grievance and investigative procedures. Train supervisors in all your policies but particularly in nondiscrimination and anti-harassment. Supervisory performance reviews should reflect how well supervisors coach and develop staff. There are never full guarantees against lawsuits, but implementing sound policies, procedures and training will keep your risk to a minimum to keep you from getting burned!
Not unexpectedly, the Supreme Court ruled Monday that the discrimination bias case brought against Wal-mart did not qualify for proceeding further as a class action suit. The case grew from a 2001 suit brought by an individual, Betty Dukes, and involves accusations that the retail giant pays women less and gives them fewer promotions than their male counterparts.
The court did not rule on whether women have been discriminated against, only that they could not sue Wal-mart as a class. The justices split 5 -4 on ideological lines on part of the decision but unanimously found that the plaintiffs’ lawyers had improperly sued under a certain section of class action rules that was not primarily concerned with monetary damages.
This Supreme Court decision reverses a prior ruling by the 9th District Court of Appeals of San Francisco. If allowed to proceed as a class action suit on behalf of 1.6 million current and former female employees, Wal-mart’s already substantial costs would likely have soared into the billions of dollars and it is likely that similar suits would have cropped up against other organizations. While this ruling is a clear victory of sorts for the big box giant and perhaps other large businesses, litigation by at least two of the several plaintiffs may continue individually meaning Wal-mart is not yet off the hook, though it is a decidedly smaller hook than it would’ve been. Wal-mart claims that its policies prohibit discrimination and that it has taken steps since the suit was filed to address problems.
Outback Steakhouse has settled a class-action sex discrimination suit for $19m. The suit, filed in 2003, alleges that Outback Steakhouse “denied women equal opportunities for advancement and discriminated against female workers in the terms and conditions of their employment. Women were denied favorable job assignments, such as kitchen management experience, which is required for workers to be considered for higher-level, profit-sharing management positions, the EEOC maintained.” Outback Steakhouse’s parent company, OSI Restaurant Partners, has denied all the allegations and stress that the settlement includes no finding of fault on Outback’s behalf. Recently hired CEO Liz Smith stated she was pleased to resolve the “legacy issue” with the EEOC. “There is no glass ceiling at OSI, and we do not tolerate discrimination in any form,” she added. “I have a profound commitment to ensuring not only equal, but very compelling and rewarding employment opportunities for all individuals.”
In order to address this issue further, the company has agreed to hire a consultant to analyze their current process, create a new position called “vice president of people”, as well as unveiling a new online application system for current workers seeking managerial jobs. This new system will be available for employees to have direct access to apply and test for job openings across the country. In addition to creating the vice president of people job, OSI spokesman Joe Kadow said they had enlarged its human resources staff and increased their role.
Cultures of discrimination can lead to very costly lawsuits as Outback Steakhouse learned the hard way. There are many ways to help protect your company including have clear and effective policies and procedures in place for hiring, firing, promotions, and evaluations. As the number one online provider of hr forms, documents, policies, laws, training, and education, HRSentry can help you. Visit our homepage for more information on how you can reduce your risk today.
When most people think of religious discrimination the usual denial of accommodation by the employer comes to mind. A situation that arose with Kelly Services in California puts a different meaning to the term. In the recent case of Noyes v. Kelly Services, an employee was turned down for a promotion and filed a lawsuit charging reverse religious discrimination under the California and federal antibias laws. She claimed that she was discriminated against for not being part of the same faith that the manager belonged to. The woman claimed that after having applied for a promotion she was turned down in favor of someone who had been there six years less, and lacked the masters degree in business administration that the plaintiff held. As proof of this bias the plaintiff pointed to the last six promotions by the manager, five of which were members of the same faith.
The Courts found that:
(1) although Kelly Services argued that the promotion decision was consensus-based, the other managers couldn’t recall reaching a consensus, and one stated that the manager ultimately made the decision;
(2) His actions prevented full consideration of the woman for the job by the other managers;
(3) He favored Fellowship members and the co-worker in particular (for example, paying the co-worker a higher salary for the same job she held and frequently hiring Fellowship members as temporary contractors and giving them management jobs).
The case went to a jury which awarded the employee $647,000 for economic and noneconomic losses, in addition to a whopping $5.9 million in punitive damages.
Workplace favoritism can be an expensive issue, Here are some tactics for avoiding similar problems as seen on BLR.com:
Have clear policies to govern how promotion and hiring decisions are made.
Make sure the promotion selection process includes oversight and review by upper management and/or human resources.
Provide training for managers on the policies and procedures governing promotions.
Get all your policies and desktop training for employees at HRSentry.
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