Archive for January, 2011

Widespread Racial Bias Charged Against Industrial Contractor

Former and current employees of Lousiana-based Turner Industries Group have charged the Gulf Coast contractor with widespread racial discrimination in hiring, pay, promotions and on-the-job treatment.

The lawsuit caught some observers by surprise, the Wall St. Journal suggested today, since the company settled similar allegations of discrimination in an agreement with the Equal Employment Opportunity Commission last July. That followed a finding by the EEOC in March of “reasonable cause to believe” that discrimination had occurred.

However, that settlement seems only to have encouraged other alleged victims of racial discrimination to come forward.

In an unusual twist, the former and current employees are suing individually and not as a class.  Perhaps their attorneys are awaiting the U.S. Supreme Court’s forthcoming ruling in the Wal-Mart sexual harassment class action, which is expected to clarify the legal requirements for combining individual claims of discrimination into one class claim.

Turner is a large contractor that does work for oil refineries across the Gulf Coast. So this lawsuit, if it goes to verdict, has the potential to inflict far-reaching monetary pain on the company. This may be one if wants to settle, depending on the strength of the plaintiffs’ case and on how the Supreme Court rules on class action issues in Wal-Mart.

So Much for Comity: Business Groups To Fight Becker Renomination for NLRB

Republicans and Democrats may have sat next to each other during President Obama’s State of the Union address, and Obama has made visible overtures to meet business groups halfway, but now it’s back to traditional battle lines as the political adversaries spar over Obama’s renomination of Craig Becker to a seat on the National Labor Relations Board.

Becker currently serves on the NLRB under a recess appointment, which means his appointment expires at the end of 2011. To keep him on the Board for a full term, Obama renominated him recently. To get a full term, Becker will have to submit to a Senate vote again. The first time he did that, the Republicans filibustered, so the full body never got to conduct an up-or-down vote on his nomination.

With more Republicans now in the Senate, odds of a successful filibuster grow even stronger.

And if the GOP pursues this course, they will have an ally in the U.S. Chamber of Commerce, which vowed last week to fight the nomination just as it did in 2009 and 2010. The problem with Becker, according to the chamber, are his pro-union views, which in the chamber’s view, have led to pro-union rulings by the Board. Unions, of course, see these rulings are merely restoring a level playing field that had tilted too much toward management.

“We’ve now had a year to see what he [Becker] actually will do, and I think that kind of confirms some of our issues with this nominee,” said Glenn Spencer, an executive director for the chamber.

Yes, this is the same Chamber of Commerce that Obama has reached out to with more business-friendly moves, like the appointment of William Daley as chief of staff, extension of the Bush-era tax cuts, and other actions.

But nominations to federal positions are where many ideological battles are fought out these days, so don’t expect the Chamber or the Democrats to back down on this one.

HR Managers a Large Revenue Stream for LinkedIn

A while back I wrote about how many HR managers are now tapping the LinkedIn database to recruit applicants for job vacancies.

Now there are some numbers to back up that assertion.

As many of you might know, the professional networking site recently filed papers with the Securities and Exchange Commission for an initial public offering. As the Wall St. Journal reported this week, “LinkedIn’s listing documents provide one of the first detailed looks at how profitable the business of social networking can be.”

According to the listing documents, LinkedIn’s revenue reached $161 million in the nine months ending Sept. 30, with net income of $1.85 million. The company, founded in 2003, became profitable in 2010 following a $3.4 million loss in the first nine months of 2009.

The company doesn’t expect to be profitable in 2011 because it is making some new investments.

Here’s the interesting part. LinkedIn says in its SEC documents that it has three revenue streams, including advertising, premium subscriptions, and hiring solutions for HR managers who tap its database (emphasis added). “The last category has grown the most quickly in recent months, accounting for some 41% of revenue in the first nine months of 2010.”

So this is further evidence that HR is increasingly turning to professional networking sites to learn more about job candidates, who in turn now have an extra incentive to put their best professional face on display.

Handling FLSA Issues During a Snowstorm

As I write this, I can look out at the winter wonderland that 8 inches of snow turned the Washington, D.C. metropolitan area into yesterday and overnight.

That got me thinking as to what are the Fair Labor Standards Act implications for snowstorms, especially when employers are forced to shutdown operations.

Here’s some guidance from Sam Narisi on

I’m going to go back to enjoying the snow now. Talk to you tomorrow.

Employers Can Pay Dearly for Social Media Blunders

If employers aren’t more careful about how they handle their employee’ use of social media like Facebook, they may find themselves keeping plaintiffs’ attorneys busy with complaints and litigation that can drain time and resources from the most well-intentioned company.

Like every technological advance, social media is a two-edged sword. It can be used for good, or used for bad. And more employers are finding out, the hard way, unfortunately, the difference between the two.

For example, the Wall St. Journal reported that this week a National Labor Relations Board judge will consider whether a medical-transportation company illegally fired an employee after she criticized her boss on Facebook. It’s the NLRB’s first complaint linked to social media, the Journal said.

“The intersection of social media and the office is a potential minefield,” said Philip L. Gordon, Denver-based chairman of the privacy and data-protection practice group at law firm Littler & Mendelson PC. Gordon cited “reputational risks” to an employer even if it prevails in such actions.

Here are other examples of actions against employers that got tripped up over social media:

  • workers sued a restaurant company when they were dismissed after managers accessed a private Myspace page the employees set up to talk about work;
  • Cisco Systems Inc. has settled two lawsuit stemming from comments by an anonymous blogger (a Cisco attorney) about two Texas lawyers and their patent-infringement suit against Cisco;
  • former Georgia high school teacher Ashley Payne sued the local school district in Barrow County, claiming she was forced to resign over Facebook photographs that showed her holding a glass of wine during a European vacation.

And in a case that has perhaps received the most notoriety in this field, two restaurant workers sued their employer in federal court in New Jersey after they were fired for allegedly violating the company’s core values.

The violation in question? The workers had created a password-protected Myspace page meant for employees but not managers. A jury found that the employer, Hillstone Restaurant Group, violated the federal Stored Communications Act and the equivalent New Jersey law, and awarded them $3,403 in back pay and $13,600 in punitive damages. The parties reached a settlement before the restaurant appealed.

But who wants to be sucked into that maw? The moral of the story; make sure you have a social media policy that outlines what is and isn’t appropriate, and then train employees (especially supervisors) on the policy.

Retaliation Against Third Parties Illegal, U.S. Supreme Court Rules

In a major win for employees, the U.S. Supreme Court ruled unanimously yesterday that Title VII prohibits retaliation not only against an employee who files a discrimination claim or engages in other protected activity but also the employee’s spouse or friend who suffers an adverse employment action because of the employee’s protected activity.

The long-awaited ruling in Thompson North American Stainless (No. 09-291) opens the door to so-called “third party” harassment claims by individuals who suffer injuries because of adverse action taken against a complaining spouse or friend.

In this case before the court, Miriam Regalado sued Kentucky-based North American Steainless in February 2003, alleging that male supervisors treated her unfairly. Three weeks after the complaint was filed with the Equal Employment Opportunity Commission, her then-fiancee Eric Thompson, who also worked for the company, was fired from his job as a metallurgical engineer.

Thompson filed his own retaliation claim. The Sixth Circuit Court of Appeals in Cincinnati ruled he had no standing to sue for retaliation since he did not himself engage in any “statutorily protected activity,” such as protesting his fiancee’s treatment or assisting in her complaint.

However, the U.S. Supreme Court ruled Thompson has standing to sue for retaliation. The anti-retaliation provision in Title VII is “worded broadly,” Scalia noted. “We think it obvious that a reasonable worker might be dissuaded from engaging in protected activity if she knew that her fiancee would be fired.”

So employers should now be on guard not only to make sure that no retaliation occurs against employees who file complaints, but also collaterally against friends or spouses who suffer adversely because of such complaints.

Succession Planning Working Better in Theory Than in Practice, New Study Reveals

Many companies talk a good game about planning for unanticipated vacancies at the top but surprisingly few businesses have actual succession plans in place, a new survey reveals.
In December, the American Management Association, a nonprofit training and consulting organization, surveyed 1,098 senior managers. According to the study, about 22 perent of senior managers said their company is not prepared for the sudden loss of key senior managers; about 14 percent said their employers were well-prepared.
Nearly 40 percent of respondents said their company’s leadership pipeline is inadequate, versus 10 percent that said it was “robust.” About 47 percent said their pipeline was adequate.
Even some employers that have written succession plans ignore them when push comes to shove. According to the survey, 34 percent of managers said senior management often ignores the management-succession plan and recruits from the outside instead.

.Jobs Websites Give Big Players a Run for Their Money

A start-up venture that allows employers and applicants to precisely focus their ads and responses by profession and location is shaking up the Internet recruitment industry, threatening to give megasites CareerBuiler and Monster a run for their money.

The Washington Post reported this week on the launch of a “massive network of employment Web sites–where any employer can list job openings for free–…over the protests of newspapers and online recruitment companies, who fear billions of dolllars in lost revenue.”

The initiative, which is backed by nearly 600 industry titans such as Google, American Express, IBM, Northrup Grumman and Lockheed Martin, is the creation of DirectEmployer Association, an Indianapolisbased nonprofit run by a former Monster president who left in 2000.

Association members, who pay an annual fee of $15,000, enjoy perks on the site such as getting their job openings placed at the top, the Post reported.

Monster and CareerBuilder don’t like it because it threatens their bottom-line. But others caution that the megasite still have brand and name recognition and that the new .job sites will have to prove themselves viable over the long haul by drawing employers and job seekers away from the big boys.

So Monster and CareerBuilder shouldn’t be too concerned about their dominance just yet. But stay tuned.

Pass the Earplugs: Labor Department Pulls Workplace Noise Regulation

For now, employees working in loud places can ask their employers for earplugs to mute the sound or ask them to turn down the volume. More stringent measures will have to wait.

Employers won’t have to install new noise-reducing equipment, thanks to the U.S. Department of Labor, which on Wednesday withdrew a new regulation on noise in the workplace proposed by the Occupational Safety and Health Administration (OSHA) last year.
The proposed interpretation entitled “Interpretation of OSHA’s Provisions for Feasible Administrative or Engineering Controls of Occupational Noise” would have clarified the term “feasible administrative or engineering controls” as used in OSHA’s noise standard. The proposed interpretation was published in the Federal Register on Oct. 19, 2010.
Hearing loss caused by excessive noise levels remains a serious occupational health problem in this country,” said Dr. David Michaels, assistant secretary of labor for occupational safety and health. “However, it is clear from the concerns raised about this proposal that addressing this problem requires much more public outreach and many more resources than we had originally anticipated. We are sensitive to the possible costs associated with improving worker protection and have decided to suspend work on this proposed modification while we study other approaches to abating workplace noise hazards.”

Michaels met earlier this month with the offices of Sen. Olympia Snowe (R-Me) and Sen. Joseph Lieberman (I-Conn), members of the Senate Committee on Small Business and Entrepreneurship, in response to a letter from the senators. Sens. Snowe and Lieberman are also co-chairs of the Senate Task Force on Manufacturing.

Thousands of workers every year continue to suffer from preventable hearing loss due to high workplace noise levels. Since 2004, the Bureau of Labor Statistics has reported that nearly 125,000 workers have suffered significant, permanent hearing loss. In 2008 alone, BLS reported more than 22,000 hearing loss cases, and Michaels emphasized that OSHA remains committed to finding ways to reduce this toll.

As part of this effort, the agency will:

  • Conduct a thorough review of comments that have been submitted in response to the Federal Register notice and of any other information it receives on this issue.
  • Hold a stakeholder meeting on preventing occupational hearing loss to elicit the views of employers, workers, and noise control and public health professionals.
  • Consult with experts from the National Institute for Occupational Safety and Health, and the National Academy of Engineering.
  • Initiate a robust outreach and compliance assistance effort to provide enhanced technical information and guidance on the many inexpensive, effective engineering controls for dangerous noise levels.

Safety advocates raised suspicions that the move was related to President Obama’s editorial in the Wall St. Journal this week ordering the government to get rid of burdensome rules.

A difficult-to-prove charge, though it would surprise no one if corporate interests resistant to the new rule made their voices heard by their representatives in Congress and downwind by the regulators charged with writing the rule.

Feds Can Require Background Checks on Contractors, High Court Holds

The U.S. government may require background checks of applicants and employees who work under government contracts, a unanimous U.S. Supreme Court ruled Wednesday.

The court turned back a challenge by 28 scientists and engineers at the Jet Propulsion Laboratory in Pasadena, Calif.  The laboratory is run by the California Institute of Technology under a contract with NASA.

When the government asked the scientists and engineers about past drug use and sent open-ended questions on a form given to their references, they went to court and persuaded the 9th U.S. Circuit Court of Appeals that the questions violated their constitutional right to “informational” privacy.

In an opinion by Justice Alito, the high court unanimously overturned the appeals court decision. The opinion said that, assuming that a right to informational privacy exists, quesions about drug use and treatment are pertinent, because the govenrment “seeks to separate out those illegal-drug users who are taking steps to address and overcome their problems.”

“Reasonable investigations of applicants and employees aid the government in ensuring the security of its facilities and in employing a competent, reliable workforce,” Alito wrote. It makes no difference whether the workers were employed by the government or were contract workers, Alito added, since the government’s interest as “proprietor” in managing its operations does not turn on such formalities.

Affirming that the government can also ask open-ended questions during reference checks, Alito noted that such questions are common in both private and public employment.

The case is NASA v. Nelson.