Oregon’s Workplace Fairness Act (Senate Bill 726) will take effect on Oct. 1, 2020. It expands the statute of limitations for filing a discrimination or harassment claim from the current one-year standard to a new five-year deadline (from the date on which the alleged unlawful practice occurred). The act also makes it illegal for an employer to enter into an agreement with a current or prospective employee that contains a nondisclosure provision, a non-disparagement provision, or any other provision that prevents the employee from disclosing or discussing conduct that constitutes covered discrimination that includes but is not limited to sexual assault.

The only exceptions to this new blanket rule are that those provisions are still permissible if: (a) the employee alleging a violation of those laws requests one or more of those provisions be included in the agreement; or (b) the employer reaches a good faith determination that the employee who is being asked to sign the agreement engaged in discriminatory or harassing conduct. The act also requires that any agreement containing a nondisclosure, non-disparagement or no rehire provision, provides the employee with at least seven days to revoke his or her signature, and empowers employers to void severance and separation agreements entered into between the company and a manager, if the employer determines in good faith that the manager’s discriminatory or harassing conduct was a “substantial contributing factor” in causing the separation from employment.

New written policy requirements

The Workplace Fairness Act also requires every Oregon employer to adopt a written policy containing procedures and practices for the reduction and prevention of discrimination and harassment, including sexual assault. In particular, every employer must have a written policy that: (a) provides a process for reporting prohibited conduct; (b) includes the name of one person and one alternate who are responsible for receiving reports; (c) includes information about the relevant statute of limitations; (d) reaffirms that an employer cannot require employees to sign a nondisclosure agreement (and defines nondisclosure agreements); (e) states that an employee who is aggrieved may request a nondisclosure or non-disparagement provision in the agreement, and may revoke the agreement within seven days of signing it; and (e) advises employees to document incidents of discrimination and harassment.

The written policy must also explicitly prohibit discrimination and sexual assault, be made available to employees and provided to new hires, and be provided in writing whenever an employee brings forth a complaint or allegation of discrimination or harassment. The Bureau of Labor and Industries is in the process of developing a model policy for employers’ use.

In short, an employer will now be required to not only have a written policy, but also actively educate its employees about prohibited conduct, and encourage documentation of all incidents of discrimination and harassment. While these policy requirements may be familiar to companies with employees working in California, they will likely force just about every Oregon employer to review their handbooks and policies to ensure that all of the mandatory points are covered.

What are you teaching your employees?

Although the Workforce Fairness Act does not mandate that employers provide discrimination and harassment trainings, employers would be wise to update trainings as they work to incorporate revised written policies.

Traditional trainings often focus too much on examples that rotate around obviously prohibited conduct and end up dividing attendees into either victims or violators. Further, those trainings are frequently reduced to a list of things employees should not say or do, leaving employees without the tools to effectively interrupt and stop improper conduct when it occurs around them.

Trainings are more effective in preventing future misconduct when they focus on how every employee should be an “active bystander” and speak up if and when inappropriate conduct occurs. Employers should educate employees on raising concerns in a timely and productive fashion. I have also found that having employees practice what they would say if something inappropriate happens in their presence equips them with concrete tools they can implement should inappropriate conduct occur in the workplace.

Likewise, employers should ensure that their trainings include some discussion of the role of power dynamics and consent. I always talk about “consensual dating” in the workplace, and how those relationships can turn into problematic situations for one or both people involved.

One of the lessons we can learn from the #MeToo movement is that individuals in positions of power need to be extremely careful about when and if consent exists. The fact that a subordinate did not say “no” is not sufficient to prove consent. Instead, there must be an affirmative “yes.” Perhaps more importantly, can a CEO prove that a receptionist or janitor consented to his or her sexual advances? Or will the CEO’s argument in favor of establishing consent be undermined by the nature of that power dynamic and whether the receptionist or janitor felt that he or she had to say yes in order to keep his or her job and opportunities for advancement within the company intact?

Although the Workplace Fairness Act stops short of requiring Oregon employers to provide training on specific subjects, employers would be wise to take this opportunity to not only update their written policies, but also consider how their training programs should be updated to ensure they remain current on cutting-edge issues, such as power dynamics, consent and the role of active bystanders in ensuring a professional and respectful work environment.

Andrew Schpak is co-managing partner of Barran Liebman LLP. He represents and advises management in a variety of employment law matters. Contact him at 503-276-2156 or aschpak@barran.com.

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As 2016 approaches, now is as good a time as any to review three big legal developments affecting workplaces.

Recreational marijuana

No new law received more attention in 2015 than Measure 91, which legalized recreational marijuana in Oregon. Personal use and possession became legal on July 1, 2015, and medical marijuana dispensaries began selling recreational marijuana to adults 21 or older in October. On Jan. 4, 2016, the Oregon Liquor Control Commission regulations will go into effect and state taxation of recreational marijuana sales will begin. Many employers are left wondering how to respond to recreational marijuana use by employees.

Perhaps the most important fact to bear in mind is that the new law did nothing to change marijuana’s classification as a Schedule 1 drug in the Federal Controlled Substances Act. As a result, marijuana remains illegal under federal law and employers retain the right to prohibit marijuana use by employees.

Employers have discretion to establish drug and alcohol testing on the following grounds: 1, post-offer but pre-employment; 2, random; 3, reasonable suspicion; and/or 4, post-accident or near miss. If a company has federal contracts, the Drug-Free Workplace Act may require that it maintain a zero tolerance drug policy. Perhaps more importantly, if a company is subject to the Omnibus Transportation Employee Testing Act, it is required to not only have a policy, but also perform testing of its employees.

Some companies have adopted a more laid-back approach, opting not to test or perhaps not have a policy at all. As long as the employer is not subject to the Drug-Free Workplace Act or the Omnibus Transportation Employee Testing Act, such a choice is most likely legal, but companies must remember that failure to adopt and communicate a drug and alcohol testing policy limits their ability to require an employee to take a drug or alcohol test. In addition, an employer that knowingly allows an employee under the influence of drugs or alcohol to work may be liable for negligence and perhaps an OSHA violation if that employee injures a co-worker or customer.

Regardless of whether a company has a policy, communicating it to all employees is imperative, as is reminding employees that marijuana still qualifies as an illegal drug under federal law.

Ban the box

In 2015, Oregon passed a law that prohibits employers from screening job applicants by asking on applications whether they have ever been arrested or convicted of a crime. Notably, this “ban the box” law does not prohibit companies from performing background checks or considering convictions when making hiring decisions. Instead, it simply prevents employers from requiring applicants to disclose criminal convictions prior to the initial interview. If the company does not perform initial interviews, it cannot require disclosure of criminal histories until a conditional offer of employment is made.

Not to be outdone, Portland passed its own “ban the box” law, which is far more restrictive. That law prohibits businesses with six or more Portland employees from inquiring about an applicant’s criminal history before a conditional offer of employment is made. Whereas Oregon’s law became effective on Jan. 1, 2015, Portland’s will not go into effect until July 1, 2016. Portland’s law also prohibits employers from considering arrests that do not lead to a conviction; expunged convictions; or, in some cases, charges that were dropped after an applicant went through a deferral program. Whereas applicants do not have a private right of action against prospective employers under the Oregon law, they do under the Portland ordinance (with a civil penalty of up to $1,000 per violation).

Companies should review employment application forms and processes to ensure that questions regarding an applicant’s criminal history are not asked until the appropriate point in the hiring process. Companies should also perform the necessary training so that the individuals responsible for application intake and interviews understand the laws regulating inquiries into criminal histories.

Paid sick leave

For requiring protected sick leave, Portland beat the state to the punch.

Portland’s law took effect on Jan. 1, 2014 and guarantees employees who work at least 240 hours in a year within the city limits at least one hour of sick time for every 30 hours worked. For companies with six or more employees, the sick time must be paid time off.

Oregon’s sick leave law will take effect on Jan. 1, 2016. The law applies to all employers who have one or more employees working anywhere in the state. It also calls for at least one hour of sick time for every 30 hours worked. Employers also are required to let employees carry over at least 40 hours of accrued but unused sick time from one year to the next. However, they can cap the accrual at 80 hours and/or not allow an employee to take more than 40 hours in a year. Also, the Oregon law requires the sick time to be paid if the company has 10 or more employees in the state.

What makes the Portland and Oregon sick leave laws so notable are the grounds on which employees can take protected leave. Qualifying grounds for protected leave under the new laws include not just any condition that would entitle an employee to protected leave under the Oregon Family Leave Act, but also: 1, time spent for diagnosis, care or treatment of a mental or physical illness, injury or health condition (including preventive medical care for oneself or a family member); 2, reasons related to domestic violence, harassment, sexual assault or stalking; or 3, a public health emergency. Companies should communicate with their human resources, benefits and payroll departments to confirm that sick leave is being tracked and accrued as required by applicable law. Companies also should ensure that managers understand the new law and the protections it affords to employees.

Many other legal developments impact how companies must treat their employees, but these three stand out with respect to the amount of training and policy review necessary to ensure compliance.

Andrew Schpak, a partner with Barran Liebman LLP, represents and advises management in employment law matters. Contact him at 503-276-2156 or aschpak@barran.com.

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One of the first questions I ask a company when one of its former employees files a lawsuit against it is: “What’s in the personnel file?” Although Oregon is an “at-will employment” state, employers are expected to have documented, legitimate, nondiscriminatory justifications for their actions. Consider the following practical tips for handling discipline and termination; they should help minimize the amount of legal exposure associated with such action.

Investigate and get the facts straight

Employers should always investigate allegations of misconduct before terminating an employee. This usually involves interviews with the accuser, accused, and any witnesses, along with a review of any relevant documents, emails, photos or other physical evidence. Avoid any imputation of bias by excluding from the fact-finding and decision-making process anyone who has bias toward the employee.

Enforce written and unwritten policies and practices consistently

One of the best defenses an employer can have in response to an allegation of wrongful termination is that other employees who committed the same infraction received the same punishment. It therefore is paramount that companies follow their own written and unwritten policies and impose discipline consistently regardless of who committed the infraction.

Minimize the element of surprise and consider progressive discipline

Although most employees will say they were surprised by their termination, employers can and should take steps to minimize such surprise. One way to do so is by applying progressive discipline, which typically involves imposing verbal counseling or written discipline for a first infraction with punishment that increases to suspension, last chances agreements, and then finally termination.

Also, consider the timing of the termination decision. If the termination decision is made shortly after the employee complains or participates in an investigation into allegations of discrimination, harassment, safety or company ethics, the potential for liability increases. Likewise, avoid terminating employees who have recently invoked the workers’ compensation system or recently indicated a need to take maternity or medical leave.

Say enough, but not too much

It is rarely easy to communicate the decision to discipline or terminate an employee. However, what you say in that moment is incredibly important. Be sure to communicate clearly to the employee the performance deficiencies that have triggered the action as well as what policies (if any) the conduct in question violated.

If meeting to discuss discipline, also be sure to cover the performance expectations going forward and areas requiring improvement. Never mention the employee’s protected class, or complaints the employee has made about the company or the employee’s supervisors, in a discipline or termination meeting. Finally, resist any urge to engage in an argument with the employee about the reasons for the employment action and avoid the temptation to apologize or make comments about “how good of a person” the employee is.

Document, document, document

Supervisors and human resources professionals should document performance deficiencies on a rolling basis as they occur, and also document each time that a discussion about those deficiencies takes place with the employee.

Documentation of discipline is most effective when it clearly identifies objective deficiencies in performance, attendance and effort. It should then build on itself, with a later written notice of discipline or notice of suspension referring back to the dates of prior discipline and counseling. Make sure that the supervisor or a member of the executive or human resources team proofreads all written discipline and confirms the dates and dates contained therein before it is finalized and provided to the employee.

Don’t break the law

At the risk of stating the obvious, a company puts itself at a serious disadvantage if it breaks any employment law in reaching the decision to terminate an employee or in the process of executing termination. Remember that, in general, it is against the law to discipline or terminate an employee if a substantial or motivating factor or doing so is the employee’s race, color, national origin, sex (including pregnancy), disability, religion, age, sexual orientation, military service, use of protected leave, injured worker status, or good faith complaint about a safety, health, legal compliance, discrimination, harassment, or retaliation issue.

Also, strict laws govern how quickly an employee must receive his or her final paycheck and tight restrictions determine what deductions an employer can take from the final paycheck. Although there is no state or federal law that requires payout of accrued but unused vacation, sick or PTO time, companies can create a legal obligation to pay out those banks of time through company policies and past practices.

Finally, most employers who offer medical, dental or vision benefits to their employees are required to offer terminated employees the opportunity to continue those benefits at their own expense for a set period of time.

Consider offering a severance agreement and release

Whether a company is worried there may be some risk associated with termination of a long-term employee, or simply wants to provide the employee with some severance pay, consider making an offer of additional pay and/or extended insurance coverage in exchange for a release of all claims. It is far cheaper to pay a couple of months of pay and benefits at the time of separation than to defend against a lawsuit through trial. Employers can negotiate such agreements to include confidentiality, non-disparagement, and noncompetition provisions. Importantly, technical requirements must be satisfied in order for the release to be effective.

Hopefully, these tips will help companies manage their employees’ performance and execute effective terminations. If there is ever a time for a company to consider spending money to talk to an employment law attorney, it is when it’s deciding whether enough information and support exists for a decision to discipline or terminate an employee.

Andrew Schpak, an attorney with Barran Liebman LLP, represents management in employment litigation and provides advice in employment matters. Contact him at 503-276-2156 or aschpak@barran.com.

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The average member of the board of directors of a typical homeowners’ association is a resident with a “day job” who volunteers because someone has to do the work. Board members have the best intentions, but often receive little training about the new legal duties that come with the position as well as the possibility of exposure to personal liability.

Fiduciary duty

Board members generally owe a fiduciary duty to the organization – in this case, the HOA (and possibly its owners). When they act as board members, they must place the interests of the organization before their own personal interests.

That means that a board member who has a conflict of interest, such as a direct or indirect interest in the outcome of a board vote that prevents a decision from being made with the HOA’s best interests in mind, should disclose that conflict to all other board members. HOA governing documents may specify a process for curing conflicts, but board members cannot follow the process if they don’t know about the conflict.

This is where size can be a big help. Large corporations have entire departments dedicated to human resources and benefits administration; HOAs do not. Instead, the HOA, by and through the board members, are expected to “run the company” as well as its employees – such as groundskeepers, maintenance persons and/or property managers.

Board member knowledge

Board members are expected to take prompt and effective action when they receive certain kinds of information, regardless of whether that information is delivered in a board meeting or passed along casually by a fellow resident. Once a board member knows something, it may not really matter how the information was learned.

To bring some order from the chaos that may result, HOA boards can adopt a communications policy that specifies who residents should contact with certain types of questions. Allegations of harassment, discrimination, conflict of interest or fraud should be taken seriously and investigated promptly. Investigations (and investigators) should neither be biased nor appear so.

Accusations of misconduct

If a board member is accused of misconduct, the board must ensure that the employee or resident making the accusation is able to do so free of retaliation. Board members also may have to recuse themselves from the investigation and/or decision-making process depending on the nature of the accusations.

Insurance and indemnity

When claims are asserted, HOA policies or insurance policies may indemnify board members by holding them harmless or at least reimbursing the cost of defense. However, even if those policies do exist, board members may lose protection under the applicable policies if they fail to act in good faith and in the best interests of the organization.

Confidentiality

There are times when board members must be particularly careful to maintain the confidentiality of HOA board information. Attorney-client privileged advice received from the HOA’s attorney and information transmitted during the executive session portion of a board meeting should not be disclosed to other residents or third parties because doing so many waive the applicable privilege.

Executive session should be used carefully and limited mostly to situations in which the board will: evaluate or consider disciplining an employee; review and discuss a complaint against an employee or board member; or exchange privileged communications with the HOA’s attorneys.

Legal filings

HOA boards need to pay close attention to legal filings received by the HOA as well as threats of litigation sent by attorneys representing employees, residents or third parties. There are often legal deadlines for answers and responses.

HOAs have a duty to notify their insurance carriers within a short window of time after receiving notice of a claim. Failure to notify the insurance carrier and tender defense of the matter to the insurance company may result in a loss of coverage.

Finally, any attorney providing advice to the board most likely represents the HOA and its residents, not board members individually. If a board member’s personal interests diverge from those of the HOA or its residents, a conflict of interest may arise and it may be prudent for that board member to consult a different attorney in order to fully understand his or her rights and obligations.

Prospective board members shouldn’t be dissuaded from serving just because there may be legal challenges associated with serving on the board of a HOA. Certainly, it is wise to take a step back and evaluate how functional the board is and how deeply rooted any problems are before joining the board; however, that is precisely when the service of energetic and thoughtful board members is most needed.

Board members will do well to stay informed; keep the lines of communication between board members, residents and employees open; and tackle problems promptly and directly if and when they arise. Sound legal or other professional advice can help HOA boards work through a complicated issue that falls outside the scope of board members’ expertise.

Andrew Schpak, an attorney with Barran Liebman LLP, represents management in employment litigation and provides advice in employment matters. Contact him at 503-276-2156 or aschpak@barran.com.

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Internal investigations are an effective way to gather facts relevant to a complaint brought to a company’s attention, or an incident that occurs in the workplace.

If a company executes an investigation properly and takes reasonable steps to end any inappropriate behavior that it discovers, it might be entitled to an affirmative defense that shields it from liability. If that same company either fails to investigate or investigates poorly, it might expose itself to liability on claims ranging from harassment and retaliation to invasion of privacy and false imprisonment.

Following are some tips on when to initiate an internal investigation and how to conduct one that is both fair and effective.

The first question to ask is: When should a company initiate an internal investigation? In general, investigations should be performed when: 1, there are instances of known misconduct; 2, the company has actual or constructive notice of suspected misconduct; and 3, prior to taking an adverse employment action against an employee.

Although it is important to have a policy that establishes the procedure for communicating complaints and emphasizes that an employee will not suffer retaliation for making a complaint in good faith, companies have a duty to investigate any known or suspected misconduct, even if the person who submitted the complaint did not follow the complaint procedure outlined in the policy.

The company should begin the investigation as soon as possible after receiving a complaint. It should select investigators who are unbiased, not closely connected to the complainant or the accused, and have the expertise and time to plan and complete the investigation promptly. Ideally, a two-person team conducts the interviews so that one person asks the questions and runs the interview while the other person acts as a witness and takes notes.

From the outset of an investigation, the company must diligently preserve confidentiality. This requires structuring the investigation so that it preserves the attorney-client privilege and protects any confidential information received from witnesses. At the same time, companies should recognize that they may end up waiving the privilege in the event of litigation.

The investigators should document each step of the investigation, including what triggered it, the plan for it, summaries of witness interviews, copies of all important documents, and, if appropriate, the investigators’ findings of fact. Documentation should be done on a rolling basis at or near the time that the underlying events occur. Investigators should proofread their documentation carefully and keep the worst case scenario in mind: a jury reviewing an enlarged copy of the document in the middle of a lawsuit brought by the subject of the investigation.

Investigators should start by identifying the scope of the investigation and who to interview. The scope should be framed by the complaint or incident that triggered the investigation but should grow and evolve based on information provided by the witnesses and evidence that might suggest that a broader investigation is needed.

The investigators should next prepare a list of the witnesses they plan to interview and a list of questions for each witness. If possible, the investigators should begin by interviewing the person who filed the complaint or brought the subject of the investigation to the company’s attention. The investigators should remember to ask all witnesses whether they know of anyone else who might have relevant information.

When interviewing witnesses, investigators should not promise absolute confidentiality. Instead, investigators should tell witnesses that they will make every reasonable effort to keep their identity and testimony confidential. Investigators also can notify witnesses before their names are disclosed so that they will not be surprised if the accused learns of the disclosure and confronts the witness about it.

Investigators should interview each witness separately. Although it is important to prevent third parties from hearing what is said in the interview, it is equally important that the witness not feel trapped or unable to leave. Investigators should begin by explaining the process and then asking open-ended questions that allow the witness to tell the story and create a timeline of important facts.

Witnesses should be reminded that company policy prohibits retaliation for providing truthful information as part of an investigation and should immediately report if they feel they have suffered retaliation. Investigators should not lie about the potential consequences of the investigation or promise “immunity” to any witnesses interviewed. They also should explain the accusation with enough detail to allow innocent suspects to clear their names.

When investigators believe they have interviewed as many relevant witnesses as possible and considered all evidence, they should meet with the complainant and accused separately to summarize the steps taken in the investigation and give each of them one last opportunity to identify other witnesses to interview or facts to consider. The investigators also should schedule meetings with both individuals to provide a debriefing after the investigation is complete.

At the conclusion of the investigation, the company may want a written or verbal report of the findings. The company should then decide what corrective action to take (if any). It should review its policies and confirm that any action contemplated is permitted. It should also review its past practices to ensure that any action proposed is proportionate to any action taken in response to similar situations in the past.

In the end, what matters most is whether the investigation was objectively and subjectively fair.

Andrew Schpak, an attorney with Barran Liebman LLP, represents management in employment litigation and provides advice in employment matters. Contact him at 503-276-2156 or aschpak@barran.com.

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In employment law cases, the power of the law extends far beyond the boundaries of written contracts. Although breach-of-contract claims remain common in the employment law context, there has been a spike in the number of cases in which a former employee alleges that a former employer broke the law even though there is no written contract in place to support that contention. In these cases, the key factor is the reasonable expectations of the parties, and not what the contract says. When an employee has a reasonable expectation of some benefit, that expectation may be enforceable in court.

The Oregon Supreme Court has long held that the law imposes a duty of good faith and fair dealing in the performance of every contract. The purpose of the duty of good faith and fair dealing is to effectuate the reasonable expectations of the parties. Although the duty is applicable in matters pertaining to the ongoing performance of at-will employment agreements, it is not applicable to an employer’s right to discharge an employee at will.

Reasonable expectations may be based on language found in an employee handbook, a company’s past practices, or even a comment made in passing by a company executive or manager. Notably, the express terms of any written contract help define what expectations are objectively reasonable, and a court will not find that that there is a breach of the duty of good faith and fair dealing if the actions taken were expressly contemplated by the written contract.

What makes these claims so difficult (and expensive) to litigate is that they often present a question of fact sufficient to preclude dismissal of the claim on a motion for summary judgment. For example, the employee might testify that a manager promised her a larger bonus if certain deliverables were satisfied. The manager, in turn, might deny making such a promise and instead point to a clear written policy outlining the bonus structure. Because there is a question of fact as to whether the manager did indeed promise the employee a larger bonus, the judge likely will deny a motion for summary judgment and will instead allow the claim to go to trial so a jury can decide who they believe is telling the truth.

So, what can an employer do to avoid a breach of the duty of good faith and fair dealing claim?

The first step is to have clear workplace policies. The employee handbook should be clear, and it should include express language indicating that none of the policies included in it shall constitute a contract, that it replaces and supersedes any former handbooks, and that the employer reserves the exclusive right to modify and interpret company policies at any time.

The second step is to communicate with all managers (ranging from line managers to the company president) that their words can create obligations on the part of the company, and that it is important to avoid making promises to employees. If a supervisor is in doubt about the company policy on a particular issue, that supervisor should refer the inquiring employee to either human resources or some other individual who knows the answer; a supervisor’s guess about a specific company policy may lead to an employee’s enforceable expectation of a given benefit.

The third step is to clarify any policies that have confused employees in any way. This is an important step because employers have the right to modify the terms and conditions of an at-will employee’s employment, so long as those modifications are clearly communicated and only enforced prospectively.

An employer that is clear and consistent about company policies minimizes the risk of a claim based on the reasonable expectations of an employee. However, sending a clear and consistent message is not as easy as it sounds, and it requires cooperation and communication among all levels of management within a company. Although the cost of coordinating communication and cooperation sounds high, it is likely less than the amount an employer will have to pay defense attorneys to defend a breach of the duty of good faith and fair dealing claim through trial.

Andrew Schpak practices labor and employment law as an attorney at Barran Liebman LLP. Contact him at 503-276-2156 or aschpak@barran.com.

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