The Weekend File - February 10, 2018

Trump Seeks to Undo Protections for Tipped Employees

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Under the Obama administration’s 2011 regulations, tips, according to the Fair Labor Standard Act, are considered the “property of the employee,” specifically service-facing employees such as waiters, bussers and bartenders. Tips can be shared in a valid tip pool only among those employees but not with dishwashers, cooks, chefs and janitors, who are paid at least the federal minimum wage ($7.25 an hour) and therefore aren’t customarily tipped.

As it stands in Texas and most states, employers may take a “tip credit,” allowing them to pay their tipped service-facing staff less than the minimum wage, at $2.13 an hour, as long as workers' tips will bring that hourly pay up to $7.25. For some servers, a busy night could yield well more than that.

The Trump administration’s proposal would allow restaurants to keep tips for themselves or force waitstaff to share them with untipped workers such as cooks, dishwashers and other back-of-house employees.

Read the entire article at the Dallas Observer

News From Around The Web

Tort Reform Is A Lie: Hot Coffee Still Being Used to Mislead

Here's the lie:

The lies used to support corporate efforts to continue to restrict regular people's access to the courthouse are powerful. And, sadly, they work. Routinely, potential clients who are sitting in my office will reference the famous McDonalds "Hot Coffee" case and try to assure me that their case isn't like the Hot Coffee case.  Their case is real. 

Here's the thing, the story everyone knows about the Hot Coffee case is a myth. It's a lie pushed by big business and their tort "reform" groups to poison the minds of potential jurors and make it harder for those who have been legitimately injured to received fair compensation. 

So, What Happened?:

In 1992, 79-year-old Stella Liebeck bought a cup of takeout coffee at a McDonald’s drive-thru in Albuquerque and spilled it on her lap. She sued McDonald’s and a jury awarded her nearly $3 million in punitive damages for the burns she suffered.

Before you hear all the facts, your initial reaction might be "Isn’t coffee supposed to be hot?" or "McDonald’s didn’t pour the coffee on her, she spilled it on herself!" But that would be before you hear all the facts.

Here are the facts:

Mrs. Liebeck was not driving when her coffee spilled, nor was the car she was in moving. She was the passenger in a car that was stopped in the parking lot of the McDonald’s where she bought the coffee. She had the cup between her knees while removing the lid to add cream and sugar when the cup tipped over and spilled the entire contents on her lap.

The coffee was not just “hot.” It was very dangerously hot. McDonald’s policy was to serve it at an extremely hot temperature that could cause serious burns in seconds. Mrs. Liebeck’s injuries were far from minor. She was wearing sweatpants that absorbed the coffee and kept it against her skin. She suffered third-degree burns (the most serious kind) and required skin grafts on her inner thighs and elsewhere. (See the video above for pictures.)

Importantly Mrs. Liebeck’s case was far from an isolated event. McDonald’s had received more than 700 previous reports of injury from its coffee, including reports of third-degree burns, and had paid settlements in some cases.

Mrs. Liebeck offered to settle the case for $20,000 to cover her medical expenses and lost income. But McDonald’s never offered more than $800, so the case went to trial. The jury found Mrs. Liebeck to be partially at fault for her injuries, reducing the compensation for her injuries accordingly.

But the jury’s punitive damages award made headlines — upset by McDonald’s unwillingness to correct a policy despite hundreds of people suffering injuries, they awarded Liebeck the equivalent of two days’ worth of revenue from coffee sales for the restaurant chain. Two days. That wasn’t, however, the end of it. The original punitive damage award was ultimately reduced by more than 80 percent by the judge. And, to avoid what likely would have been years of appeals, Mrs. Liebeck and McDonald’s later reached a confidential settlement for even less than that.

Here is just some of the evidence the jury heard during the trial:  

  • McDonald’s operations manual required the franchisee to hold its coffee at 180 to 190 degrees Fahrenheit.
  • Coffee at that temperature, if spilled, causes third-degree burns in three to seven seconds.
  • The chairman of the department of mechanical engineering and biomechanical engineering at the University of Texas testified that this risk of harm is unacceptable, as did a widely recognized expert on burns, the editor-in-chief of the Journal of Burn Care and Rehabilitation, the leading scholarly publication in the specialty.
  • McDonald’s admitted it had known about the risk of serious burns from its scalding hot coffee for more than 10 years. The risk had repeatedly been brought to its attention through numerous other claims and suits.
  • An expert witness for the company testified that the number of burns was insignificant compared to the billions of cups of coffee the company served each year.
  • At least one juror later told the Wall Street Journal she thought the company wasn’t taking the injuries seriously. To the corporate restaurant giant those 700 injury cases caused by hot coffee seemed relatively rare compared to the millions of cups of coffee served. But, the juror noted, “there was a person behind every number and I don’t think the corporation was attaching enough importance to that.”
  • McDonald’s quality assurance manager testified that McDonald’s coffee, at the temperature at which it was poured into Styrofoam cups, was not fit for consumption because it would burn the mouth and throat.
  • McDonald’s admitted at trial that consumers were unaware of the extent of the risk of serious burns from spilled coffee served at McDonald’s then-required temperature.
  • McDonald’s admitted it did not warn customers of the nature and extent of this risk and could offer no explanation as to why it did not.

After the verdict, one of the jurors said over the course of the trial he came to realize the case was about “callous disregard for the safety of the people.” Another juror said “the facts were so overwhelmingly against the company.”

That’s because those jurors were able to hear all the facts — including those presented by McDonald’s — and see the extent of Mrs. Liebeck’s injuries.

But that's not the story that the public has heard. Tort reform advocates lied about the facts of the case and the fake story gained traction. It went viral. So viral that now this story is what is most often cited by jurors and others when explaining why they don't trust lawyers, why they don't like lawsuits, and why they think plaintiffs are just out for a quick buck. 

And it's all a lie.

 

 

If you want to read more, start here.

Fox Running the Hen House -- Trump Nominates Corporate Lawyer as EEOC Chair

Janet Dhillon, general counsel and corporate secretary for Burlington Stores, Inc., has been nominated by President Trump to fill a vacant seat on the Equal Employment Opportunity Commission and to become its Chair. If confirmed, Ms. Dhillon will serve a five-year term that will expire July 1, 2022.

Dhillon has spent her entire career defending corporate interests. She has served as Burlington Stores' Executive Vice President, General Counsel and Corporate Secretary since July 2015. Prior to that, she was an Executive Vice President, General Counsel and Corporate Secretary of JC Penney Company, Inc. from February 2009 through March 2015. Prior to joining JC Penney, she served as Senior Vice President, General Counsel and Chief Compliance Officer of US Airways Group, Inc. Prior to that, Ms. Dhillion was an associate and later a "counsel" with international corporate firm, Skadden Arps. 

I don't know much about Dhillon because she hasn't been much of a player in the EEO/Labor law community during her career.  Frankly, her selection is a bit of a surprise. (Given the current White House I guess we should be pleased that the Chair wasn't filled with a random TV celebrity.) However, the fact that her entire career has been spent in service of giant corporate interests is not an encouraging sign for American workers. 

$51 Million Dollar Verdict Awarded In Age Discrimination Case

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A former Lockheed Martin engineer, who sued for age discrimination after being laid off at age 66, was awarded $51.6 million by a jury in a federal court in New Jersey. This may be the highest amount ever awarded to an individual in an age discrimination case, and stands as a stark reminder that age discrimination remains a big — and potentially very expensive — issue for HR.

Robert Braden was a mid-level manager who spent almost 29 years at a Lockheed Martin facility in Moorestown, NJ. He claims that he was a target in a reduction in force plan to replace older workers with younger ones, and that he and other older workers consistently received less pay and lower reviews and raises than younger workers.

In his lawsuit complaint, Braden said that he was the oldest of six engineers in Lockheed's Electronic Systems-Mission Systems and Sensors unit, that his title was project specialist, senior staff, and that he was the only one let go in that round of layoffs. He said that he was given no specific reason for his termination and that his job performance had been "excellent." He also said that supervisors and company executives regularly made remarks about older workers.

The $51.6 award breaks down like this:

  • $50 million for punitive damages under the New Jersey Law Against Discrimination,
  • $520,000 for economic loss,
  • $520,000 for willful action against the Age Discrimination and Employment Act (ADEA) and
  • another $520,000 for pain and suffering.

(Note that in Texas, the size of the this verdict would have been greatly reduced by the application of damages caps passed by the Texas legislature to protect companies who commit this type of wrongful conduct.)

Discrimination Against Older Workers Remains A Significant Problem

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While the size of the Lockheed verdict is certainly surprising, workplace age discrimination, unfortunately, is not. A 2013 AARP study found that almost two in three workers ages 45 to 74 said they have experienced workplace age discrimination.

And with an aging US population and ongoing economic uncertainty, more people plan to or must stay in the workforce well past the age of 65. As a result, managers and supervisors should take steps to ensure all employees are vigilant and sensitive to behavior and practices that can be grounds for an age discrimination claim.

Reporting Harassment or Discrimination is a Tricky Business

Mike Haberman has a post out this week titled "Who Do You Report Harassment To If the Harasser Is the CEO?".  It is a thoughtful article and it makes the excellent point that HR for every company needs to bake into their policies a method by which an employee can internally report sexual harassment being committed by the CEO or owner of a company without risk of retaliation. I think that is an excellent goal to strive for and I hope that all HR departments set that as a goal.  There is only one problem with the premise of the article. 

The effort will almost certainly fail. 

 Extra Credit if you can identify the initials of the Florida "businessman" Frank and Michael are discussing in this scene.

Extra Credit if you can identify the initials of the Florida "businessman" Frank and Michael are discussing in this scene.

 

 

Michael Corleone: "C'mon Frankie... my father did business with HR, he respected HR."
Frank Pentangeli: "Your father did business with HR, he respected HR... but he never trusted HR!"

 

 

 

 

HR is, in my opinion, possibly the most challenging role for any manager to do and do well. It is arguably designed to fail. The problem is obvious: HR serves two masters. On the one hand, HR is designed to serve as a helpful ombudsman to employees. To assist employees who are being mistreated. To conduct thorough investigations and correct inappropriate behavior against employees. On the other hand, HR is required to defend management against accusations of unlawful employment practices. HR is usually directly involved in the termination decisions that lead to EEOC filings. HR is then in charge of or at least heavily involved in drafting the company's defensive statement of position filings, arguing that the company is blameless. Thus, the very department that an employee is supposed to trust with his or her career and feel comfortable making a complaint to is the same department that will be spearheading the fight against the employee when it all goes south. 

What this means in most companies is that, no, you cannot trust HR to help you. While many HR officers have their hearts in the right place when they start working in the field, they can't help but know who is responsible for signing their paychecks. Hint: it's not the employee bringing a complaint against a member of management.  

So, should you bring complaints to HR? Yes, you should. In fact, in many cases you are legally required to do so or you risk waiving any claims you may have against the company for the discrimination or harassment you are reporting. Just don't assume that HR's only role is to help you. Because it isn't. While HR may be trying to assist you they are also assessing corporate risk, documenting your complaint in a way that will assist the company in defending against your complaint, and looking for ways to satisfy the demands of management. 

Here are a couple of quick tips: 

  1. Make all reports in writing. When push comes to shove down the road, HR is liable to either not "remember" you made a complaint or to remember it substantially differently than you do. Putting your report in writing is the only way to prove you made a complaint, when you made it, and to whom the complaint was made.  
  2. You know that written report from number 1, above?  KEEP A COPY. A written complaint does you know good if you send the only copy to HR. It might...you know...get lost. 
  3. Consider going outside the organization to the EEOC. If your complaint involves EEO-based (age, sex, race, religion disability, color) discrimination or harassment then consider making a complaint to the EEOC sooner rather than later. There will be little question that a report to the EEOC is protected activity under the law. This gives you a somewhat higher level of protection from retaliation than if you merely report internally. 
  4.  Consult with an employment lawyer. If you are in a situation in which you feel you need to make a complaint against management then, make no mistake, you job IS at risk. Start looking for a qualified employment attorney who represents employees. Be warned, in many parts of the country there aren't that many who lawyers who specialize in representing employees. So start looking before you need one. And don't expect such a lawyer to visit with you for free. This is not a simple car accident case and you aren't looking for a PI lawyer who can take your case on a contingent fee basis. Employment law is very specialized and contingency fees are generally not available for consulting services. If you find a qualified lawyer to advise you, however, it is money well spent. 

Bottom line: Yes, you should report harassment or discrimination internally to your company's HR department. But that doesn't mean you should blindly trust the HR department. Understand that they serve two masters and protect yourself accordingly.