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$7.9 M lawsuit award worth employers' attention

There's a common saying that, in business, if you're not growing, you're dying. Some dispute the truth of the saying. Other's stand as hard and fast believers. Wherever you happen to fall, there is one thing that most everyone likely can agree upon - that success doesn't happen without dedicated employees.

We think most would also agree that dedication is not a one-way street. Employers have a stake in pursuing practices that encourage employees to deliver their best. If employers wonder what practices to follow, a good place to start is to understand human resource regulation compliance. The law, as complicated as it can be, serves as a good benchmark.

Cautionary tale

What prompts these observations is a story making headlines. It didn't happen in Pennsylvania, but considering that the company involved has outlets all over the country, including in and around Pittsburgh, it is worth taking notice.

At issue was a claim of wrongful termination by a former manager of a Chipotle Mexican Grill restaurant. According to reports on her case, she was noted for being loyal and hardworking when in 2015, she was fired for allegedly stealing $626 from the store's safe. She denied the accusation, but attorneys for the company said they had video evidence as proof.

Here's where things go sideways. In the course of challenging the accusations, the former manager asked to see the video evidence, only to be told that it had been destroyed. During her wrongful termination suit, her attorney presented evidence to support his argument that his client was making $70,000 a year and was on track for promotion to a position paying $100,000, suggesting she had no motive.

Additional evidence included that the woman's firing came about a month after she had filed a workers' compensation claim for an injured wrist. Her attorney said she continued to work for weeks more and was fired after she took medical leave.

A jury returned a verdict against Chipotle and ordered the company to pay the woman more than $7.9 million in damages. And, facing the prospect of possible punitive damages of up to $71 million, Chipotle and the woman's attorney reached a confidential settlement.

The woman's attorney says the message of the case to businesses is, "That you need to treat your employees fairly and honestly."

Medical marijuana: Employer rights and obligations on testing

A recent news headline might have caught your eye. It reads, "More businesses are mellowing out over hiring pot smokers." The thrust of the item by The Associated Press is that employers across the country, desperate to fill jobs, are beginning to ease drug testing policies by eliminating marijuana from the list of suspect substances checked for in prospective new hires.

Experts cited in the article say the move reflects the fact that it's more difficult today to find qualified candidates for a growing number of open positions and that marijuana tests only make matters worse. One attorney is quoted as saying, "I have heard from lots of clients things like, 'I can't staff the third shift and test for marijuana.'" Even the current administration's labor secretary has suggested employers "step back" on drug testing.

It seems clear that the easing of restrictions on marijuana use in recent years is contributing to this situation. Nearly 10 states now regulate but allow recreational marijuana use. Another 29, including Pennsylvania, allow marijuana to treat medical conditions.

The fast-changing landscape on marijuana certainly means legacy employers and entrepreneurs seeking to start new businesses are facing unique legal challenges. Major issues to address can include such things as:

  • Drafting employment policies that meet your needs while protecting employee privacy
  • Identifying and managing background check and screening methods that pass legal muster
  • Finding ways to mitigate hiring risks while avoiding potential discrimination liability

Such matters have serious implications not just in employment, but across the entire spectrum of business operations. For the sake of current success and the achievement of long-term goals, be confident in your legal positions by consulting skilled employment law attorneys.

What can get an EPLI policy claim denied?

The spotlight is on claims of sexual harassment in the workplace these days. Many point to the allegations by women against film producer Harvey Weinstein as the snowball that grew into the so-called #MeToo movement. A sidebar is that business owners in Pennsylvania and across the country are assessing if they're prepared to manage the risks of employment-related legal disputes.

As part of the process, company leaders might be reviewing their insurance portfolios to see if they have employment practices liability insurance (EPLI). If they don't, they may be thinking about getting a policy. In either case, employers need to understand conditions under which an insurer might deny a claim.

The Value of EPLI

The argument in favor of having EPLI coverage is straightforward. An active policy can minimize financial risk from claims that might arise under federal employee protection law and similar state laws. Typical coverage includes:

  • Legal costs
  • Payment of settlements or judgments

Potential Insurer Loopholes

The benefits under such policies can be jeapordized in a number of ways. Bad timing is one. EPLI policies are often structured on a "claims made and reported" basis. That requires that for a claim to be valid, it must be brought during the time when the policy is in force. It must also be reported to the insurer within the effective policy period. As an example of how this could become an issue, consider the following.

A complaint alleging harassment or discrimination is filed seeking a right to sue. As the employer, you might not see that as cause to file a claim, but your insurer might. In the time between the initial complaint and the suit, your policy period could expire, giving the insurer grounds to deny coverage.

Also, most if not all EPLI policies, stipulate that coverage doesn't begin without the insurer's written consent. What this means is that any costs, legal or otherwise, incurred by your company before a claim is reported won't be covered.

One last thing to note is that claims not filed exactly according to policy requirement can result in a denial.

With all the costs that can result from an employment-related dispute, proper risk management is obvious, and that is best done by enlisting the experience of the Kisner Law Firm to decide if an EPLI policy is right for your business. 

Terminating an Employee on FMLA

The  Family and Medical Leave Act provides 12 weeks of unpaid leave to eligible employees who work for a company that employs 50 or more people. The Act also provides certain protections for eligible employees who avail themselves of the leave. What happens though if the employee taking leave appears to be abusing the protections?  How does an employer protect the business against benefit exploitation?

The importance of transparency

There are limits to the protections that a worker on FMLA can count on, at least according to one Texas court. 

An employee who acknowledged she was not meeting her performance metrics was put on a performance improvement plan. Within days of that action, she reported by email to her boss that she had been to a doctor and would be filing for short-term disability and FMLA.

A few weeks later the woman's boss caught wind that the employee on leave had been spotted at a music concert, in the company's skybox seats. Puzzled, the employer followed up with a voice message to the woman asking for a meeting about the incident.

When the woman balked at that, the employer sent an email insisting she be in touch by a time later that day. When that deadline passed, the boss fired her citing poor performance, her attendance at the concert and her failure to respond when asked to meet. The woman sued, claiming violations of her FMLA status and retaliation.

The case didn't make it far. The judge dismissed the suit, saying that the employer's had a right to investigate the suspected abuse of benefits and that her refusal to respond to legitimate questions was reason enough for the employer to conclude the leave wasn't validly taken in the first place.

One expert's analysis

What employers can take away from this case, according to one observer, is the importance of communication and documentation. Employers have a right to ask workers on leave to respond to legitimate questions about their status and the right to let a worker go if he or she refuses to communicate. It is also important to note that the employer in this case properly documented performance problems before the employee requested FMLA leave and promptly noted its requests for communication and the employee's refusal to comply. 

Of course, each case is different and needs to be gauged on its individual merits. If you have concerns about an employee on FMLA leave or would like training on FMLA procedures to protect your business, contact Kisner Law Firm's experienced employment law attorneys. 

Source:, "Viewpoint: If an Employee Attends a Beyonce Concert While on FMLA Leave, Can She Be Terminated?," Jeff Nowak, Sept. 25, 2017

What's an employer's obligation dealing with sexual harassment?

If you are planning to open a one-person business in Pittsburgh, you might not need to worry too much about the problem of sexual harassment in the workplace. If you have a team of people around you, however, that's another story. Business planning that addresses the broad scope of issues is necessary, including establishing employment policies and assigning consequences in cases of sexual harassment.

Whether you hire full or part-time employees or engage independent contractors in your business, there are laws that you need to comply with to protect your workers. In addition to that, you want to avoid the hassle and costly loss of goodwill that can occur when harassment allegations arise.

The necessity of employer vigilance

Considering the headlines that have splashed across the internet news outlets in recent weeks, it's apparent that issues surrounding sexual harassment are coming front and center. The spotlight is not dim in Pennsylvania, either. As recently reported, there are issues at the State Capitol as well.

Something that should also raise the awareness of current and prospective employers is a recent federal court decision out of the Eastern District of Pennsylvania. In the matter of Jones v. Pennsylvania State Police, a female trooper is claiming that two corporals in her chain of command failed to take prompt action when they were aware, or should have been aware, of harassment by a fellow trooper. To be clear, the alleged misconduct was brought to a halt, but the claimant alleges that it went on for nearly a year before that happened.

In the course of the discovery phase of the case, the PSP noted that it had acted to end the harassment and asked the court for summary judgment. But the court ruled there is a question of fact for a trial to determine about whether the two corporals were management-level employees and whether they acted promptly enough.

The takeaway from the decision, according to legal observers, is that while the law appears clear on what constitutes sexual harassment, there still can be questions about what constitutes proper and timely management response. This requires employers to remain vigilant which means working with experienced legal counsel, like those at Kisner Law Firm, to create a proactive plan to help prevent and defend against harassment and contacting your legal team if questions do arise. 

2018 marks sales tax changes in Pennsylvania

The Pennsylvania Legislature modified its state sales and use tax laws for 2018. Some of the changes are already in effect and others will be rolling out in the coming months.

House Bill 542 was passed on October 30, 2017 after several amendments. The biggest change in the law will affect out-of-state vendors.

The law imposes new requirements on marketplace facilitators, referrers and remote vendors that do at least $10,000 worth of annual sales in Pennsylvania. Starting March 1, 2018 they will now have an obligation to collect and remit tax on sales delivered into the state.

Pennsylvania is offering an opt-out to businesses that comply with reporting requirements and register with the Department of Revenue by March 31.

Pennsylvania businesses affected by new sales taxes

HB 542 also establishes new sales taxes on certain industries. Consumer fireworks will have a special 12 percent tax on the purchase price, which includes state and local taxes. This does not include ground or handheld sparkling devices, novelties or toy caps.

Fees are also being imposed on carsharing purchases. Carsharing is defined as "a membership-based service that provides an alternative to personal car ownership." Fees are $0.25 for rentals under two hours, $0.50 for rentals lasting two to three hours, $1.25 for rentals between three and four hours, and $2 for rentals over four hours.

Exemptions from sales taxes

Other businesses are exempt from sales and use tax under HB 542. Kegs used to contain malt or brewed beverages became exempt as of the bill's passage.

The law also specified, as of its passage, that taxable canned software includes support services "except separately invoiced help desk or call center support." Since August 21, 2016, Pennsylvania has taxed the transfer of certain digital products, including apps, books, canned software, games, music and video.

If you are starting a business in these industries in 2018, an accounting professional can explain how taxes do or do not affect the product you sell and adjust pricing accordingly for your customers. As you are working on the business formation, you can discuss legal needs with an experienced business law attorney who understands how to be successful in Pennsylvania enterprise. 

Justified employee policies to enjoy greater weight, says NLRB

We continue now with our series of deeper dives into a wave of recent decisions by the National Labor Relations Board. As we noted in one recent post, the NLRB reversed a number of rules, specifically targeted were policies that employer advocates felt tilted legal scales toward supporting worker unionizing efforts.

In this post, we intend to examine more closely a decision that overruled an earlier board action that put a crimp on employers' ability to establish certain employee policies - even ones for which an employer might have solid justification. Based on early reaction, it seems businesses feel the move will help avert employee disputes and restore balance to organizing processes protected by law.

The hazards of "reasonable"

In questionwere Section 7 rights granted to workers seeking to organize under the National Labor Relations Act. The standard at issue was that employers could not include policies in their employer handbooks that might be "reasonably construed" by workers as infringing on their rights to organize.

At issue was a policy of the Boeing Company against using any device to take pictures on company property. The policy did not prohibit employees from discussing employment conditions or engaging in NLRA-protected activities. The indications from case documents are that Boeing was concerned about company security. However, a judge ruled that the policy violated the act because it could be "reasonably construed" as an organizing infringement.

In reversing the policy on a 3-2 vote, the board reversed the judge's decision, saying that the "reasonably construe" standard failed to give weight to Boeing's legitimate concerns. It also said that going forward, its employer policy and handbook reviews would seek to strike more balance in cases where employer justification can be shown.

What does this mean for employers? While more latitude may be given, the key take away is that there must be 'justification' for handbook and other employer policies. Therefore, employers will want to carefully review rules and ensure they have good reasons for their policies that do not otherwise run afoul of NLRB or other agency rules. Kisner Law Firm's experienced employment law attorneys can assist in crafting specialized policiies and answer questions about these new rulings. 

One positive effect of reversed 'joint employer' standard

In one of our latest posts, we reported on three recent decisions by the National Labor Relations Board that analysts describe as notably pro-business. In broad terms, the board was able to leverage a brief 3-2 Republican majority to reverse several rules that business advocates found tilted the scales in favor of worker unionization.

In this post, we intend to look more closely at the decision that rolled back the 2015 NLRB established definition of what constitutes a joint employer. Previously the board determined that the joint employer designation could apply in labor disputes, even when one organization exercised only indirect control over another. Critics observed that this broad standard meant it was easier for contractors and employees in franchised businesses to organize.

Reversal provides more business protection

The specific rule in question is the Browning-Ferris Industries decision. In it, BFI was found to be a joint employer with another company it had hired to provide contract workers for various BFI functions. Despite the contractor relationship between the two firms, when workers sought to unionize, the board declared them joint employers based on indirect control.

At the time of the decision, the board said it was needed to "keep pace with changes in the workplace and economic circumstances" as reflected in an economy where gig and contract work is on the rise. However, observers noted the ruling could spark labor relations issues where none had existed before and increase risks for companies that rely on third party staffing or contractors for their human resource needs. The NLRB ruling last month reinstated the direct control test; providing what some call more protection to businesses.

To be clear, the NLRB did not jettison the joint employer standard altogether. It merely rolled the definition back to state that such conclusions depend on applying the test of direct control by the entities involved. Employee disputes will still occur and where counsel or litigation is required, the Kisner Law Firm stands ready to serve.

NLRB closes out year with major pro-business changes

In the waning days of 2017, the National Labor Relations Board delivered some notable pro-business decisions. Earlier this month, the panel reversed three Obama-era rules on labor over which business owners had bridled. These included:

  • A retrenchment on how a joint-employer is defined
  • Easing the standard by which company policies might be deemed to violate worker collective bargaining rights

The board also rolled back a rule that made it easier for subsets of employees within a company to unionize. Employers had long complained that the so-called Specialty Healthcare rule established during the Obama administration set a standard for challenging such micro-bargaining units that was nearly impossible to meet.

How this happened

Analysts are in general agreement that these reversals are the direct result of the fact that for the first time in many years, the NLRB enjoyed a 3-2 Republican majority. All of the recent changes passed along the party line. Observers also note that the flurry of pro-business decisions came as Republican board chairman, Philip Miscimarra, marked the end of his term. He has not been replaced, and the board now features a 2-2 split among its members.

What it means

The decisions are widely hailed as positive by business advocates. One official of the U.S. Chamber of Commerce says they reflect a restoration of "common sense and balance to a board that unfairly favored labor unions over the past eight years."

What the implications are for individual businesses in the U.S., and the Pittsburgh area specifically, is something that deserves closer examination. We plan to dive more deeply into each of the actions in subsequent posts.

While such reversals are undoubtedly welcome by many employers, to be sure of compliance with all employment law, a consultation with experienced attorneys such as those at Kisner Law Firm, LLC, is encouraged.

Importance of local counsel for non-Pittsburgh litigants

The legal profession is notable for having a language all its own. Actually, it's not so much that it has its own language as that it continues to rely on a language (Latin) that is not in widespread use. There's even a little irony in this fact. Latin became the common legal language when the Roman Empire set the boundaries of what was then the known world. Today, the whole globe is the known world and Latin maintains its presence in the legal world.

While business and commerce takes place across myriad state and international borders, legal issues, including those that might be related to employment or transaction disputes, are dealt with at the local level. To be sure that these issues get handled in the most effective manner, it makes sense that you seek the help of someone who knows the local court system. The United States District Court for the Western District of Pennsylvania considers this so important that out of state attorneys hire local counsel who move the Court for their pro hac vice admission, which means, for this occasion.

To meet the pro hac vice admission standard:

  • The attorney must be admitted to practice in the district court of the state in which he or she is admitted and be a member in good standing of the bar.
  • The attorney must attest by affidavit to being in active practice in his or her home state and to reviewing the local rules of the court to which he or she seeks temporary practice privileges.

These are requirements for out of state attorneys with cases in the Western District of Pennsylvania in Allegheny County. Local counsel services may also be needed if you are dealing with an employee discrimination complaint before the Pennsylvania Human Relations Commission or the Pittsburgh Commission on Human Relations. Whether you are called before the Western District of Pennsylvania or a Pennsylvania administrative agency, the Kisner Law Firm has the skill and experience to assist litigants and their out of state counsel in appearances before the local courts and agencies. 

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Pittsburgh, PA 15219
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