Top 10 COVID-19 Employment Law Tips

Top 10 COVID-19 Employment Law Tips

I’ll be honest. I don’t really like employment law.

Wait a minute, Wolfe. Your little profile at the end of these posts says you do non-compete and trade secret litigation. Isn’t that “employment” law?

Not really. I see departing employee litigation as essentially contract and tort law (with a statutory overlay). In contrast, when you say, “employment law,” I think of a 100-page employee manual nobody reads that spells out how sick leave accrues and what happens to it when an employee quits.

Blah, blah, blah . . .

Here’s when it hit me. Years ago, I was leaving a big law firm to go to work for a much smaller firm, and the big firm sent out an email attaching the new office dress code with thanks to the Dress Code Committee.

Dress Code Committee, I thought. Seriously? They had to have a whole committee for this? And the dress code really got down in the weeds. There’s something comical about an official memo from a team of elite lawyers using terms like “spaghetti straps” and “crop top.” Employment lawyers live for stuff like that. Me, not so much.

I think it boils down to two reasons. First, I don’t like authority and nit-picky rules. My employee manual would just say “dress appropriately and be cool to each other.”

Second, I don’t like the whole “paper the file” feel to employment law. Who actually reads that 100-page handbook? It feels like it’s just there for the employer to cite if there’s a problem.

But I get it. Obviously, my attitude isn’t going to cut it in corporate America. Employers are trying to avoid liability, and a vague directive that sounds like something from Bill and Ted’s Excellent Adventure creates too much space for discrimination. If the manager was cool with the white male employee wearing Birkenstocks with wool socks, why did he have a problem when the minority employee did it? A detailed dress code avoids this problem.

The same points apply to all this COVID-19 employment law stuff. Everybody’s got a COVID-19 blog post, a COVID-19 webinar, a COVID-19 client alert. I’m sure there’s a COVID-19 employment law podcast. Everybody’s jumping on the bandwagon, but it just doesn’t excite me.

If I ran the zoo, most office employers would use this crisis as an opportunity to ditch their expensive office leases and have more people work from home. I’ve got a friend in the business world who recently told me that’s exactly what he’s doing with the company he runs. Think how much time and gas money his employees will save.

Plus, as Brett Holubek reports in Remote Work and COVID-19, one comparative study found that working from home resulted in a big boost in productivity and a significant reduction in employee attrition.

But again, I get it. WFH won’t work for everybody. Most employers will eventually need guidance on how to bring employees back to work, and other employment law issues raised by the pandemic.

Fortunately, I don’t have to reinvent the wheel. Instead, I present this curated list of the best COVID-19 employment law tips I’ve gathered from lawyers who actually like employment law.

I remember when “curated” only applied to museums. Here, it means I went through a rigorous process of scrolling through my LinkedIn feed and Googling some employment lawyers I know.

1, 2, 3, 4, 5, 6, 7, 8, 9 . . .

It’s the 10 COVID commandments.

#1 Avoid WARN Act issues

The WARN Act generally applies to employers with 100 or more employees, and it requires giving 60 days’ notice of mass layoffs. If you have a hundred or more employees and laid off 50 or more of them temporarily, you may need to act quickly to bring employees back to avoid violating the WARN Act. Holubek’s Texas Labor Law Blog covers the details at How to Reopen a Business and Recall Employees.

#2 Offer a severance agreement

I often get calls from employees who lost their jobs and want to know if the employer is required to pay severance compensation. The short answer is no. Unless the employee has a contract that says otherwise, the employer can lay off the employee and doesn’t have to pay a dime more than what the employee earned before the layoff.

As my friend Stanley Santire once put it, Texas follows the at-will employment rule like most states, but the difference is that Texas really means it. Generally, you can fire an employee for any reason or no reason.

I say generally, because of course there are exceptions. Certain kinds of discrimination and retaliation are unlawful. For that reason, it’s often in the employer’s interest to get a release from the employee.

The employer should consider offering severance in exchange for a release. This lets the employer do something good—cushioning the blow of a layoff—while getting something in return. In the words of Alexis de Tocqueville, it is intérêt personnel bien compris.

If you require employees to sign a release, be sure your form of release complies with the Age Discrimination in Employment Act (ADEA), including a 21-day notice period and a seven-day revocation period.

#3 Be selective about enforcing non-competes

Speaking of severance agreements, sometimes employers try to include a non-compete in the severance agreement. If the employee didn’t already have a non-compete, this is going to be hard to enforce. I’m not saying it’s impossible, but it’s difficult.

On the other hand, if the employee already had a non-compete, then in theory the fact that the employer laid off the employee does not prevent the employer from enforcing the non-compete. I say “in theory” because if you have to file a lawsuit to enforce it, the judge is going to have a lot of discretion, and most judges will be sympathetic to laid off employees in this crisis, as they should be. I explained this in my recent post Can They Lay Me Off *And* Enforce My Non-Compete?

So think about whether you really need to enforce the non-compete. Do you have evidence the employee has taken truly confidential information? Is the employee trying to divert key customers to a competitor? Then you may have no choice. Otherwise, maybe you’ve got bigger fish to fry.

#4 Protect real trade secrets

There’s always a chance a disgruntled former employee will try to use a company’s confidential information against it. Even if the employee doesn’t have a non-compete, you can use trade secrets law to try to prevent this. See my posts When Is a Customer List a Trade Secret? and The Price Undercutting Theory in Texas Trade Secrets Litigation for guidance on some common scenarios.

#5 Manage remote workers reasonably

Here’s another one where I’m probably not the best guy to ask. My Work From Home policy would be something like “stay in touch and keep doing great work.” My philosophy is if you want employees to act like adults, don’t treat them like children.

But I realize some employers will need a little more than that. So you may need to adopt some specific policies setting out expectations about things like responding to emails, Zoom conference etiquette, and returning phone calls.

Just don’t make the policies too rigid. Don’t be “that guy” who expects his midnight email to be answered immediately, and don’t be that company that requires employees to install webcams so you can keep tabs on them.

There is one work from home issue where employers may need to be more strict: cyber-security. It will be even more important for employees to use secure internet connections, take common-sense precautions with devices containing company data, and be on the lookout for scams like “spear-phishing.”

Pro tip: an early morning email from your managing partner simply stating “can you do me a favor?” may not be what it seems.

And if you’re the managing partner, never send an email like this.

You can learn more about data privacy issues with employees working from home in this episode of the Vorys at Work podcast with Jackie Ford and Lisa Reisz. (I told you there would be a podcast!) And Brett Holubek addresses a host of work from home issues at his blog post, including making sure hourly employees know they are not to work “off the clock.”

#6 Keep employees safe and minimize potential liability

Protecting employees from contracting the virus when they return to work breaks down into two categories: (1) screening, and (2) social distancing.

The challenge with screening is to protect employees from the virus while respecting employee privacy and avoiding discrimination. Haynes & Boone has a helpful checklist with suggestions on how employers can screen applicants and employees for symptoms of COVID-19 the right way:

  • To avoid discrimination, the employer should follow the same screening practice for all employees in the same type of job.
  • For consistency and documentation, consider using a written questionnaire.
  • Keep the results of any screening confidential.

Should screening include temperature checks? This strikes me as a little too much. If you’re still that concerned, maybe it’s a sign you should not be bringing employees back yet. But if you must bring them back, and especially if social distancing is not feasible in your workplace, temperature checks may be a necessary part of your screening.

The checklist cited above has some helpful Do’s and Don’ts for this. It also has good common-sense suggestions for on-site safety and social distancing strategies. Also check out Seyfarth Shaw’s Strategies for Developing a Return to Work Action Plan.

#7 Comply with the Family First Coronavirus Response Act

The Families First Coronavirus Response Act makes certain employees eligible for paid sick leave and expanded family medical leave, and it provides refundable tax credits to small and midsize employers to reimburse them for the costs of leave related to COVID0-19.

I don’t touch tax law, see Most Smug Areas of Law Practice, so I won’t try to interpret the FFCRA, but the IRS has a helpful summary and list of FAQs.

#8 Don’t underreact or overreact to COVID-19 positive employees

Don’t let an employee who tests positive for COVID-19 come to work. That should be obvious. Then again, I thought it would be obvious that injecting yourself with disinfectant is not the optimal treatment.

In theory, you also need to keep an employee’s positive COVID-19 status confidential. I say in theory because, let’s be real, his co-workers are going to know. I suppose the point is that people should hear it from the employee himself, not from management. As explained on the Vorys at Work podcast, employers should prepare managers ahead of time on how to handle this.

For employees who get the virus, the Haynes & Boone checklist recommends following CDC guidelines regarding the appropriate time to return to work, and that makes sense to me.

#9 Avoid disability discrimination

The Americans with Disabilities Act (ADA) and other employment laws still apply, but reasonable employer responses to COVID-19 are likely to be accommodated. The best resource on this topic is probably this EEOC page with FAQs and the updated publication Pandemic Preparedness in the Workplace and the Americans With Disabilities Act.

My main takeaways: employers may screen employees and applicants for COVID-19 because it poses a direct threat to health in the workplace, the ADA does not prevent employers from requiring employees with COVID-19 to leave the workplace, and a medical exam is permitted after a conditional offer of employment.

The EEOC page also addresses reasonable accommodations for employees who, due to an existing disability, are at higher risk from COVID-19. “Reasonable accommodation” is always a difficult and fact-intensive issue, but the bottom line is that employers should be flexible.

#10 Be flexible

Flexibility. That seems to be the theme of the day. We’re all going to have to find new ways to be flexible, especially when more people go back to work.

A Very Special Cinco de Mayo Special

If you want more details, mark your calendar for May 5th. You can’t go to your favorite Tex-Mex joint for margaritas, but you can tune in to a great webcast from TexasBarCLE called Top 10 COVID-19 Employment Law Issues. Hosted by Brett Holubek of the Texas Labor Law blog and Zach Wolfe of Five Minute Law.

Wait a minute. Wolfe? He doesn’t even like employment law.

I know, I know. It’s a dirty job. But someone’s got to do it.

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IMG_4571Zach Wolfe (zwolfe@fleckman.com) is a Texas trial lawyer who handles non-compete and trade secret litigation at his firm Fleckman & McGlynn, PLLC. This post is dedicated to all the 80s kids who stayed up too late to watch Late Night with David Letterman.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

Decisions, Decisions. How Should Employees “Return” Electronic Files?

Decisions, Decisions. How Should Employees “Return” Electronic Files?

TexasBarToday_TopTen_Badge_VectorGraphicPress reports like this one say IBM has a policy banning its employees from using USB drives. The apparent purpose is to prevent the loss of IBM’s confidential information and trade secrets, whether it’s an employee intentionally taking company files to a competitor or accidentally leaving a USB drive in an airport lounge.

This policy brings to mind that workplace sign, “The floggings will continue until morale improves.”

But I understand where IBM is coming from. Transferring files to a USB drive is the most common way that employees take company files right before walking out the door. With the possible exception of emailing company files to a personal email address. And don’t forget copying files to Dropbox or Google Drive.

Employees do these things all the time, and not necessarily for nefarious reasons. When you need to work at home or on the road, you need some way to get files from Point A to Point B, especially if you use personal devices to do company work. But when a key employee jumps to a competitor, the timing, volume, and content of the copied files can raise suspicion.

A familiar scenario

Let’s consider my favorite hypothetical departing employee case: Paula Payne Windows v. Dawn Davis. As the top sales person for Paula Payne, Dawn Davis routinely emailed herself PowerPoint presentations before hitting the road to pitch to potential customers. These files would include company information on prices and customer preferences.

That was fine with Paula Payne Windows, but things went south when Dawn suddenly announced she was leaving the company—these announcements are always “sudden”—and turned in her company laptop.

Sensing something fishy, Paula Payne had its IT department check Dawn’s laptop for suspicious activity. They found that the day before leaving, Dawn transferred 117 files from the company server to a USB drive connected to her laptop.

Next thing you know, Paula Payne’s lawyer, John Laurens, fires off a letter to Dawn Davis. The letter demands she cease and desist using any of Paula Payne’s confidential information, and that she immediately return all company documents as expressly required by the Non-Competition and Confidentiality Agreement she signed when she joined Paula Payne.

Dawn emails the letter to her lawyer, Maria Reynolds, and asks what she should do.

“Is it true that you transferred company files to a USB drive the day before you left?” Reynolds asks Dawn. “It’s true,” Dawn says. “I needed those documents to prove that Paula Payne owed me $26,000 in commissions,” she adds. “I knew they would stiff me as soon as they found out I went to Real Cheap Windows.”

“And I was right,” Dawn says. “When I asked the CFO about my commissions, she said ‘what commissions?’”

Screen Shot 2018-05-28 at 9.28.43 PM

“Ok,” Reynolds says, “but the letter says one of those files was a complete customer list for the entire company.” “Why did you need that?”

“It doesn’t matter,” Dawn says. “The only thing I’ve done with that drive is copy the files to my personal laptop. I haven’t opened a single one of those files since leaving.”

This is a common scenario. I’ve seen multiple variations on this theme in my own cases and in opinions I’ve read.

A multiple choice test

So what should Dawn’s lawyer do in this situation?

A. Physically deliver the USB drive to opposing counsel and have Dawn delete the files from her laptop. This is the best way to comply with Dawn’s agreement.

B. Have an expert make forensic copies of the USB drive and Dawn’s hard drive, and produce copies of the company documents to opposing counsel. This is the best way to comply with both the agreement and the duty to preserve evidence.

C. Email copies of the documents to opposing counsel and tell Dawn—in writing—not to open any of the files. Even if this is a technical breach of the contractual duty to “return” the files, it is not a breach that causes any damages.

You can make a plausible case for each of these answers, but I think (B) is the safest.

It’s not an easy question, because there are several competing considerations:

– the contractual duty to “return” the company documents

– the duty to preserve relevant evidence, including relevant metadata, when litigation is reasonably anticipated

– the need to preserve evidence to prove the client’s claim to commissions

– avoiding unnecessary expense to the client

Let’s break down how each answer deals with these factors.

Go ahead and give it to me

The first part of Answer (A) is physically delivering the USB drive to opposing counsel. This has the benefit of complying with the contractual duty to return company documents.

But there’s a problem: you can’t be assured opposing counsel will properly preserve the metadata on the USB drive. It may be important later to determine when the USB drive was plugged in, what was transferred from it, etc.

The second problem raised by (A) is what to do with the files copied to the employee’s laptop. The employer may argue the employee has the same duty to return these files as if they were on paper. But “returning” copied electronic files is really a non sequitur.

So maybe you can accomplish the purpose of returning the files by deleting them?

The problem is that the employee has a duty to preserve evidence, including potentially relevant metadata. If the employee deletes the files, the employer could seek sanctions for spoliation of evidence.

The other side of the coin is that the employee may want the files to prove they were not opened. For these reasons, deleting relevant files is generally a bad idea, and (A) is not the best answer.

Answer (B) is safer because it preserves all the electronic evidence, including metadata. You may not always need the metadata, but at least this approach leaves your options open.

But is it enough to produce copies of the files to the employer’s lawyer? The agreement says the employee must return the files. If the employee keeps copies, the employer can argue that the employee breached the contract.

Are you experienced?

This came up in a case I had where an employee kept company documents needed to prove he earned a promised performance bonus. Opposing counsel told me the company was upset when they found out he had the documents. I explained that he kept the documents because he feared (correctly) the company would refuse to pay his bonus, and the documents proved he was entitled to it. “Well he could have returned the documents and then asked for them in discovery,” opposing counsel said.

Yeah, right.

As this experience illustrates, sometimes you have to make a judgment call and keep copies of the documents, even if it may give the company the argument that your client breached the contract.

Ok, you say, but if you’re going to accept this risk anyway, then what’s wrong with Answer (C), just telling the client not to use the documents?

Here’s the problem. If your client has taken company documents, then opposing counsel, the judge, and the jury (if you get that far) will probably already be suspicious. You don’t want to compound that suspicion. It’s usually better if your client can say—truthfully—“as soon as I found out a lawsuit was likely, I turned everything over to my lawyer and didn’t touch it.”

But I wouldn’t say Answer (C) is always wrong. Sometimes, the expense of making forensic copies may not be justified. The former employer’s demand letter may just be a “shot across the bow” to get the employee to back off a little. In some cases a suit may never get filed.

So there is no one-size-fits-all solution to the problem of “returning” electronic files taken by a departing employee. But if you’re the lawyer representing the employee who took the documents, you should at least discuss the options.

If you’re the employee, consider not taking any documents in the first place.

And if you’re the employer? I hear IBM has some ideas.

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IMG_4571Zach Wolfe (zwolfe@fleckman.com) is a Texas trial lawyer who represents employers and employees in non-compete and trade secret litigation at his firm Fleckman & McGlynn, PLLC. Follow @zachwolfelaw on Instagram to keep up with his latest shenanigans.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

 

Texas Employees Can Still Sue Employers for Common-Law Assault

Texas Employees Can Still Sue Employers for Common-Law Assault

Steak N Shake: Texas sexual harassment statute does not preempt a common-law assault claim if the “gravamen” of the claim is assault 

I had a friend in college who liked to end every argument around the dining hall table by saying “it’s really just a question of where you draw the line.”[1] It was supposed to be a joke. He was making fun of the overuse of that line—it had become the academic version of the cliché “it is what it is” on sports talk radio. But the funny thing is that he was often right.

The Texas Supreme Court’s decision last week in B.C. v. Steak N Shake proves that legal issues often do come down to a question of where you draw the line. The Steak N Shake court had to decide how to draw the line between sexual harassment and sexual assault in the workplace.

It’s a distinction that has important legal consequences in Texas. If the court classifies the claim as sexual harassment, then the claim will be subject to limits imposed by the Texas Commission on Human Rights Act (TCHRA), including a cap on damages. If the court classifies the claim as sexual assault, then it’s governed by common law, which means no cap on damages.

You can already guess which one a savvy plaintiff’s lawyer is going to pick. If the harassment involved any objectionable physical contact, the plaintiff will typically plead the claim as sexual assault, not sexual harassment, to get around the limits of the TCHRA. The plaintiff will also sue the employer for common law negligence, such as negligent hiring or retention.

Not so fast, the Texas Supreme Court said in 2010. In Waffle House v. Williams, the court held that the TCHRA’s statutory framework for sexual-harassment claims preempted an employee’s common law negligent supervision and retention claim.[2] “If [the employee’s] common-law claim for negligent supervision and retention is allowed to coexist with the statutory claim,” the Waffle House court reasoned, “the panoply of special rules applicable to TCHRA claims could be circumvented in any case where the alleged sexual harassment included even the slightest physical contact.”[3]

In other words, Waffle House said you can’t get around the limits of the TCHRA by calling sexual harassment something else, like common law assault.

The problem with the distinction is obvious. In many cases, as in Waffle House, the conduct alleged by the plaintiff qualifies as both harassment and assault. The Waffle House court adopted the “gravamen” test to address this problem. “Where the gravamen of a plaintiff’s case is TCHRA–covered harassment,” the court said, “the Act forecloses common-law theories predicated on the same underlying sexual-harassment facts.”

Gravamen is a fancy legal word for “essence,” or the most substantial part of a grievance.

The “boorish and objectionable conduct” alleged in Waffle House included both non-physical harassment and objectionable physical contact.  The manager allegedly pushed the employee, held her arms with his body pressed against her, rubbed against her breasts with his arm while she reached up to put plates away, and “cornered” her on several occasions.[4] The court said that the gravamen of this alleged conduct was harassment, not assault.

Personally, I disagree with the preemption rule adopted in Waffle House. I would have joined the two dissenting justices. The Texas legislature knows how to say that a statute preempts the common law–as it did in the Workers Comp statute. The TCHRA, in contrast, doesn’t expressly state that it preempts common-law claims based on the same facts, so I would have held that the plaintiff can still pursue the common-law claims. But I can at least see the logic of the preemption argument.

And the rest of the Waffle House decision makes some sense to me. If you’re going to say that the statute preempts common-law claims that are based on allegations of harassment, then the “gravamen” test is probably the most workable way to distinguish between harassment and assault.

And Waffle House seemed to get it right when it said that the essence of the manager’s boorish conduct was harassment, even though the conduct would also meet the definition of assault. You have to draw the line somewhere.

But what if the manager’s conduct in Waffle House had been more violent and egregious?

Let’s say the male supervisor attacked a female employee in a restaurant restroom during an overnight shift. He pushed her against a sink, grabbed her by the back of the head, and tried to kiss her. During the struggle, the supervisor allegedly exposed himself, pulled the woman’s pants down, and put his hand up her shirt.  Although the supervisor and employee had socialized before—such as sharing beer and cigarettes in the restaurant parking lot—there was no sexually suggestive conduct by the supervisor prior to the alleged assault.

What would the gravamen of those allegations be, harassment or assault?

That was the issue in Steak N Shake. Applying Waffle House to these more egregious allegations, the Texas Supreme Court found that the gravamen or “essence” of the claim was assault, not harassment. Therefore, the common-law assault claim was not preempted by the TCHRA.

You could see this coming. Even this pro-business court doesn’t want to see the headline “Texas Supreme Court Says Victim of Bathroom Attack Can’t Sue Employer.” But where does this leave Texas law?

Putting Waffle House and Steak N Shake together, the “gravamen” test seems to turn on two factors. First, how violent or egregious is the physical assault? The alleged physical contact in Waffle House, while offensive and objectionable, was not shockingly violent.  In contrast, the assault alleged in Steak N Shake was a violent struggle in a restroom. Second, was the assault part of a pattern of harassing conduct, or was it an isolated incident? Where the assault is part of a pattern, as in Waffle House, the gravamen of the claim is more likely to be “hostile work environment,” a type of sexual harassment.

Of course, it’s easy to imagine harder cases. The next case that goes up on appeal will likely involve allegations that are more egregious than the pattern of boorish behavior in Waffle House, but not as violent as the conduct alleged in Steak N Shake. It’s not always easy to know where to draw the line.

I for one look forward to a day when workplace incidents like these are a thing of the past, regardless of whether you call them assault or harassment. But sadly, that day is probably a long way off.

It is what it is.

*Update: How would the “gravamen” rule of Waffle House and Steak N Shake apply to a claim of harassment and assault of a 16-year-old minor who lacked the legal capacity to consent? The Texas Supreme Court may soon consider that issue. See  Solis v. S.V.Z., 566 S.W.3d 82 (Tex. App.–Houston [14th Dist.] 2018, pet. filed).

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IMG_4571Zach Wolfe (zwolfe@fleckman.com) is a Texas trial lawyer who handles non-compete and trade secret litigation at his firm Fleckman & McGlynn, PLLC.

These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.

[1] Yeah, we got pretty wild and crazy back then. Don’t tell my kids.

[2] Waffle House, Inc. v. Williams, 313 S.W.3d 796, 812 (Tex. 2010).

[3] Id. at 807.

[4] Id. at 799.