September 2007
Volume 3, Issue 3
 

By Amanda L. Walls

School buses are rolling, football stadiums around the country are full of cheering crowds, and the subtle changes of autumn foliage and weather are upon us.  Among the many enjoyable aspects of the Fall season is your opportunity to attend one of BDB’s upcoming employment and workers’ compensation law seminars.  These half-day programs are hosted in three different locations around Ohio and are designed to provide our clients and friends with an interesting and interactive chance to learn how day-to-day personnel policies and practices can result in legal ramifications for your organization.

This year, the format for the seminars will include a mock mediation of a pregnancy discrimination claim.  Through this simulation, attendees will learn about the importance of and procedures associated with alternative dispute resolution mechanisms.  In addition, issues addressed through the mediation will include gender discrimination, Family and Medical Leave Act (FMLA) administration, Americans with Disabilities Act (ADA) and reasonable accommodations by way of light duty or modified work schedules, as well as settlement of workers’ compensation claims.  The program will conclude with brief presentations highlighting the most recent and pertinent updates to employment and workers’ compensation law that may impact your organization.

The schedule for the seminars is:

• Wednesday, October 10 at the Fairlawn Hilton Garden Inn

• Tuesday, October 16 at the Walsh University Barrette Business Center

• Tuesday, October 23 at the Ohio State University Fawcett Center

All of the seminars will run from 8:00 a.m. to 12:00 p.m. and are free of charge.  Additionally, this year BDB has sought accreditation, which is currently pending, from the Human Resource Certification Institute for 2.5 general CE credits for those attendees who are PHR or SPHR certified.

I hope to see many of you there!

Amanda Walls is an Associate in the Employment & Workers' Compensation Practice Group.  She can be reached at awalls@bdblaw.com or 330.491.5315.

By Sally Still

An earlier article appearing in the June 2007 newsletter, discussed recent increases in the volume of Fair Labor Standards Act (FLSA) actions filed in federal court (note that they also may be filed in state court) and ways to remedy common errors that leave employers susceptible to FLSA actions before they are sued. This article discusses, from the perspective of a defense-side litigation attorney, what happens when an employer is sued, despite its efforts at compliance.

Common Themes

First, a complaint filed in federal court requires nothing more than a “short plain statement” of the facts supporting the claim. Consequently, plaintiffs/employees who file claims under the FLSA often put few details into their complaints, generally pleading only that they worked overtime and were not paid an additional sum in overtime compensation. Rarely will they indicate how many hours of unpaid overtime they worked, or acknowledge whether they received any compensation for that unpaid overtime (such as straight time rather than time and a half).

Second, the vague and ambiguous complaints serve plaintiffs’ lawyers. Rather than commit to a specific claim (for instance, that an employee worked 10 hours of overtime each week for which no overtime compensation was ever paid), plaintiffs may leave open the possibility of amending their allegations to include an “off-the-clock” claim through their vague wording. Since the much-publicized Wal-Mart overtime cases, claims that employees performed work “off the clock” are becoming increasingly popular. These claims are especially prevalent with restaurants, retailers and other industries that have the possibility of extended work hours (compared to, say, a doctor’s office, which would have defined and limited work hours).

Maintenance of Action

After the complaint is filed, the employer answers the complaint, typically denying that overtime was not paid; the employer also denies that it does not have accurate time records. Assuming that these statements are true, it answers that in fact overtime was paid, time was accurately recorded, and the employee was paid time and one-half for all hours worked.

Next, pursuant to the federal rules, and prior to engaging in formal “discovery” of evidence, the parties exchange initial disclosures. The employer shows its hand: time cards, payroll registers, records showing payment of time and one-half for all overtime hours worked. It may even show that the employee signed off on the weekly time sheets verifying that they are accurate. So you would think the plaintiff’s lawyer would walk away, right? Not necessarily. The employee’s lawyer may come up with a modified theory that some of the overtime was not paid — for instance, that the employee worked additional overtime hours off the clock, and, while the employee has no records to prove he or she did so, the employer has none that prove that the employee did not work off the clock (proving a negative is very hard to do).

Defenses

In such a case, the issue becomes one of credibility regarding the strength of the records. Does the fact-finder believe the employer’s clear, apparently accurate records that the employee has verified each week? Alternatively, does the fact-finder believe the employee who has changed his or her theory of the case and has no records to support the claim? The jury or fact-finder will probably believe the employer, but getting the claim to the jury is costly because the credibility issue generally precludes summary judgment. The plaintiff’s lawyer may understand this and use this to his or her advantage to obtain a settlement. Of course, if the employer has a lot at stake, it may choose to fight the claim to its bitter pyrrhic end.

Two Strategies Suggested

With regard to these concerns, two strategies may pay off for employers.

1.  Make an Offer of Judgment. The first is the offer of judgment, which may act to preclude a large plaintiff attorney’s fee award and provides little incentive to prolong needlessly litigation of a claim. An offer of judgment is a formal offer to settle a claim where the defendant acknowledges liability in a certain amount. An offer of judgment is usually presented after informal settlement discussions have failed, for instance because the plaintiff has demanded more than what the plaintiff can expect to recover at trial. If the plaintiff rejects the offer and then at trial fails to recover any more than the defendant had offered, the defendant can ask the court to limit the prevailing plaintiff’s attorney’s fee award. In other words, the court would be asked to determine whether it was reasonable for the plaintiff, and the plaintiff’s lawyer, to continue litigating the case after the defendant offered to settle; if the court finds it was not reasonable to continue to litigate after the offer was made, the court may decide not to award any fees incurred after the offer was made. Thus, the offer of judgment is a tool to limit the company’s exposure to prevailing plaintiff’s attorney’s fees where liability is likely because it removes some of the incentive to run up fees prosecuting the action.

2.  Initiate Defensive Practices. The second strategy is to institute practices that anticipate problems. The employer can require employees not only to verify their records, but in addition, can create, post and distribute policies stating that off-the-clock work is not permitted and provide avenues to correct the time/payroll records through a neutral party (such as human resources rather than through the supervisor allegedly demanding the employee work off the clock). In addition, employers can keep records of the times that employees (either the plaintiff or other employees) bring such discrepancies to management’s attention and the efforts to correct them. This will provide some defense to a claim that the employee was too afraid to bring his or her concerns to management for fear of termination.

With these comprehensive policies in place, an employer may be able to avoid litigation. The employee may have difficulty finding a sympathetic ear when the facts are laid out for the plaintiff’s counsel. 

Outcomes

In any event, FLSA litigation is costly and is a fee-shifting, prevailing plaintiff statute. This means that if the plaintiff prevails, the employer is most certainly paying a “reasonable attorney’s fee” to the plaintiff’s lawyer. Conversely, even if the employer/defendant prevails, there is little chance of recovering any of the costs associated with the defense of the action.  Accordingly, avoiding litigation is the best practice.

This article was adapted from a recently published article in Thompson Publishing Group’s Employer’s Guide to the Fair Labor Standards Act and Fair Labor Standards Handbook for States, Local Governments and Schools.
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Sally Still is a Partner in the Employment & Workers' Compensation Practice Group.  She can be reached at sstill@bdblaw.com or 561.241.0414.

By Barbara A. Knapic

Governor Ted Strickland is moving forward with his changes to the Ohio workers’ compensation system.  In May 2007, Marsha Ryan took the helm as Administrator of the Bureau of Workers’ Compensation.  She comes to the position with a wealth of experience in the private sector through her role as vice president at American Electric Power.  She also has public sector experience from working with several state agencies.  She is still seeking to fill the positions of Chief Operating Officer and Chief Financial Officer for the BWC.

In addition, the governor appointed Gary M. DiCeglio as employee member and chairman of the Ohio Industrial Commission, replacing Patrick Gannon.  Mr. DiCeglio is an attorney and has worked for the United Rubber Workers, the United Steel Workers and the AFL-CIO.  In 1998, he became the Director of Compensation and Safety for the AFL-CIO.  He has worked as a lobbyist and was instrumental in drafting Ohio Senate Bill 7.

In addition to the new administrator and chairman, a new BWC Board of Directors was named to replace the former BWC Oversight Commission. The new board is an independent body of fiduciaries entrusted with setting overall administrative policy for the BWC, advising the BWC administrator on policy and operations, safeguarding the assets of the system and maintaining the solvency of the fund and providing independent verification of the BWC’s financial and operational performance.

The new board is comprised of professionals representing the broad constituency of the Ohio workers’ compensation system and is designed to provide for transparency and accountability in the system.

The new members of the 11-person board are:

• William Lhota, self-insured employer representative, currently president and CEO of the Central Ohio Transit Authority.

• James Hummel, employer member and vice president of human resources for Lauren International.

• Jim Matesich, employer member and president and CEO of Matesich Distributing Company.

• James Harris, who represents employee organizations and works part-time on workers’ compensation legislation for the United Auto Workers.

• David Caldwell, also representing employee organizations, and a 37-year member of the United Steelworkers of America.

• Philip J. Fulton, employee representative and owner of Philip J. Fulton Law Office, representing claimants.

• Larry Price, public member, a former state representative and president and chief consultant for L Price and Associates Consulting.

• Charles Bryan, an actuary with 35 years experience as a casualty actuary.

• Kenneth Haffey, licensed as a CPA in Ohio since 1986.

• Robert Smith, 30 years of experience in investing, finance, accounting, management and marketing and the current president and CEO of Spero-Smith Investment Advisers, Inc.

• Alison Falls, investment and securities expert, operating her own practice in Port Clinton, Ohio, servicing financial institutions, mid-cap and non-profit corporations.

The new Board of Directors held its first meeting on August 23, 2007, was sworn in and immediately began focusing on ethics training, fiduciary responsibility and the Board’s organizational structure.  Mr. Lhota will serve as chairman. 

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Barb Knapic is a Partner in the Employment & Workers' Compensation Practice Group.  She can be contacted at bknapic@bdblaw.com or 330.491.5237.

By Kristina M. Harless

Governor Ted Strickland signed an Executive Order on July 17, 2007 establishing collective bargaining rights for independent home care providers.  In Executive Order 2007-23S, Governor Strickland asserts that independent home care providers should have access to effective representation to negotiate work-related benefits, and orders that the State of Ohio recognize a single representative as the exclusive collective bargaining representative for all independent home care providers.  This Executive Order prescribes how a collective bargaining representative would be elected. 

While acknowledging that independent home care providers are not employees of the State of Ohio, Governor Strickland asserts that Ohio engage in collective bargaining with an elected representative of independent home care providers regarding reimbursement rates, benefits, and other terms of their employment. 

Republican lawmakers attack Governor Strickland’s Executive Order, arguing that it is a payback for union support of his campaign.  While Governor Strickland asserts that this Executive Order is exempt from federal and state antitrust laws, Republican lawmakers characterize this concept of independent home care providers unionizing to exact benefits from the state as price-fixing because the independent home care providers at issue often provide their services under direct care service agreements administered by various Ohio governmental agencies. 

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Kristina Harless is an Associate in the Employment & Workers' Compensation Practice Group.  She can be contacted at kharless@bdblaw.com or 330.491.5231.

If you are interested in obtaining information on upcoming seminars or would be interested in having speakers from Buckingham, Doolittle & Burroughs, LLP make a presentation to your organization, please contact: Lorna Henderson, Client Relations Administrator lhenderson@bdblaw.com or 800.686.2825 ext. 86473.