While it is easy to shy away from controversial subjects in the workplace, they can often lead to conflict, strained relationships, and sometimes discrimination and harassment by co-workers. Employers and supervisors must be conscientious of the manner in which controversial issues manifest themselves in the workplace, because there is potential legal liability for both parties, if one or the other adopts the ostrich approach and buries its head in the sand. However, employers and supervisors can take some proactive steps to limit that potential liability. And while generally applicable to all employers, public employers and employers subject to a collective bargaining agreement will have some additional considerations.

Establish clear policies on workplace conduct

The first step in creating a safe and healthy workplace for all employees is to establish policies that encourage a respectful work environment, and prohibit unsafe and threatening behavior. Most employers have policies that prohibit harassment or discrimination based on any number of protected classes. Employers should review their policies to ensure that they encompass all currently recognized protected classes, but can also go further and encourage a generally respectful and cooperative workplace. Although the latter portion is not necessarily legally enforceable, it sets the tone for a cooperative and respectful work environment.

Employers should also adopt a workplace violence policy that prohibits physical violence, threats and intimidation in the workplace. Additionally, these policies can prohibit aggressive or hostile behavior that creates a reasonable fear of injury or subjects another person to emotional distress. Employers are also free to prohibit employees from possessing weapons of any kind on any of the employer’s premises, including the parking lot.

Both policies focus on co-worker interaction, but should also extend to customers, visitors and others that the employees may encounter while representing the company.

This section of the policy handbook should also include a discussion of the appropriate reporting channels and encourage employees to report any instances of prohibited conduct. The reporting channel must allow an employee to report around his or her direct supervisor, if that is the person engaging in the prohibited conduct, or in the event the supervisor is not acknowledging or investigating the employee’s report.

Circulate these policies and explain them

Once the employer establishes or revises these policies, it should circulate them to the workforce and explain the reasoning behind them. Employers can do this electronically, but should consider calling a meeting to discuss any major changes. This meeting also affords employees the opportunity to ask questions (though employees should also be encouraged to follow up with their supervisor, HR personnel or management with any additional questions or concerns).

Employers can also present training on these subjects, and should have employees acknowledge their attendance at these trainings on a sign-in sheet, as well as signing an acknowledgment when any revised handbook policies are circulated. Even if employers are not revising their handbooks, they can still consider calling a meeting to remind employees about existing policies, and encourage reporting violations when appropriate.

Supervisors should also be given a separate training to ensure that they understand their obligations to correct any violations or report them up the chain so that corrective measures can be implemented. Supervisors should also be reminded that they might face individual legal liability should they turn a blind eye to harassment, discrimination or an otherwise hostile work environment.

Investigate complaints and enforce policies

When a complaint is reported, an employer must promptly and thoroughly investigate in accordance with its policies. The investigation should include interviews of the complaining party, the accused party and any witnesses, and employers should ask these witnesses for any documentary evidence that supports the allegations.

The employer should then perform a neutral evaluation of all of the evidence and determine whether discipline is warranted. If discipline is administered, it should be done in a consistent fashion, based on the level of the violation. To the extent there is an ongoing conflict between two specific employees, an employer can consider bringing in a mediator from outside the workplace to help the employees work through their unique issues.

Some employees may want to make reports anonymously out of fear of retribution. Employers should be careful not to offer complete confidentiality, or at least explain that should the person want to remain anonymous, the employer’s investigation may be hampered by its inability to further interview the complaining party, and that any potential resolution may not be catered to that anonymous person’s specific concerns.

Consider off-duty conduct where appropriate

Generally, an employer is prohibited from regulating off-duty conduct or using that conduct as a basis for discipline. The exception to this rule is when there is a connection (or nexus) between the off-duty conduct and the workplace.

There are three primary forms that this connection can take. First is where the off-duty conduct harms the employer’s reputation or business (e.g., breaches of confidentiality). Second is where the employee is unable to perform his or her duties at work because of the off-duty conduct (e.g., drug and alcohol abuse, moonlighting that leads to fatigue at the day job). Third, and most pertinent to this discussion, is when the off-duty conduct has an impact on other employees.

Other employees may refuse to work with that employee given his or her off-duty conduct, whether harassment, discrimination, intimidation or violence. When an employer receives reliable information regarding off-duty discrimination, harassment, intimidation or violence, it has an affirmative duty to investigate and remedy the situation in accordance with its policies (just like it would if the conduct had occurred in the workplace). Ignoring the problem simply because it occurred outside of the workplace or after hours can expose the business to serious liability. Again, prompt investigation and consistent application of discipline are keys to limiting liability.

These are just a few of the proactive steps employers and supervisors can take to limit potential liability arising from conflict in the workplace, and employers should work with their legal counsel and human resources division to customize these suggestions accordingly.

Tyler Volm is an attorney with Barran Liebman LLP. He focuses his practice on employment litigation and advice as well as traditional labor relations for business owners, managers and human resources professionals. Contact him at 503-276-2111 or tvolm@barran.com.

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Late last year the Oregon Bureau of Labor and Industries (BOLI) quietly changed its interpretation of the interplay between daily and weekly overtime requirements. The change was in response to a lawsuit filed by the employees of Portland Specialty Baking.

Most employers are aware that overtime pay is required for hourly employees that work more than 40 hours in any given workweek – known as weekly overtime. Employers may be less familiar with the accompanying Oregon law that requires overtime pay when workers “employed in a mill, factory or manufacturing establishment” work more than 10 hours in one day – known as daily overtime.

BOLI’s guidance before the December 2016 change advised employers that they only had to pay the greater of the two overtime pay amounts, but not both. BOLI’s new interpretation states that the two laws operate independently, so the worker must receive overtime under both laws, and not simply the greater of the two amounts.

For example, consider an employee works 12 hours on Monday, eight hours on Tuesday, five hours on Wednesday, five hours on Thursday, and 11 hours on Friday for a total of 41 hours in the workweek. Before BOLI revised its interpretations, this employee was entitled to only three hours of daily overtime pay. Under the revised guidance, the employee is entitled to four hours of overtime pay: three hours based on the daily overtime worked on Monday and Friday, and one hour of weekly overtime, because the employee worked a total of 41 hours that week.

The revised guidance created significant liability for employers in the traditional mill, factory and manufacturing industries, but also exposed employers like industrial bakeries and others to significant overtime expenses.

There was also concern that BOLI may attempt to apply this interpretation retroactively and reach back to correct payments made over the prior, two-year statute of limitations period. BOLI’s Wage and Hour Division indicated that it would not apply the new interpretation retroactively, but only to time worked on or after Jan. 1, 2017. However, even if BOLI did not go after employers for noncompliance with the new rules, employees could still choose to sue their employer to recoup overtime pay for hours worked prior to Jan. 1, 2017.

Union members were the only employees unaffected by the revised interpretation. BOLI’s technical assistance also stated that “a valid collective bargaining agreement may set aside” the statute’s requirements. That language could be clearer, but BOLI indicated that the collective bargaining exemption was unchanged under the new interpretation.

In a ray of hope for employers, on March 9, 2017, Multnomah County Circuit Court Judge Kathleen Dailey held that employees working in mills, factories and manufacturing establishments are entitled to only the greater of daily or weekly overtime pay in a workweek, but not both as encouraged under BOLI’s revised guidance.

In the opinion, Judge Dailey explained that BOLI’s new rules failed to properly interpret the relationship between Oregon’s weekly overtime law and the particular daily overtime law for workers in mills, factories and manufacturing establishments. The court ruled that BOLI’s pre-December 2016 interpretation of the two overtime laws is the proper interpretation. While the opinion may be appealed, it provides relief for many Oregon employers by requiring them to pay only the greater of the daily or weekly overtime amounts owed to employees. This decision is likely to stick even if appealed, because Judge Dailey was not even swayed by a sworn statement from the labor commissioner explaining the reasoning behind BOLI’s revised rules.

The Oregon Legislature also has pending Senate Bill 984, which would codify the “greater of the two” calculation method, but the question of what constitutes a “mill, factory or manufacturing establishment” remains unclear. In the meantime, Judge Dailey’s decision applies to all employers through the state of Oregon and allows employers to return to the old way of paying overtime – by providing the greater of either daily or weekly overtime. As always, affected employers should contact their labor and employment counsel to confirm proper payroll procedures.

Tyler Volm is an attorney with Barran Liebman LLP. He works with business owners and managers to ensure compliance with changes in the law, and defends employers against complaints when they arise. Contact him at 503-276-2111 or tvolm@barran.com.

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In 2014, the United States Department of Labor (DOL) was charged with updating the regulations relating to overtime pay under the Fair Labor Standards Act (FLSA). Under the regulations currently in place, nonexempt employees must be paid one and one-half times their regular hourly rate for all hours worked over 40 in the workweek. The DOL released the long-awaited proposed revisions to the overtime regulations in June 2015. The biggest proposed change is a substantial increase in the salary an employee must be paid in order to qualify for one of the exemptions.

Under current FLSA regulations, certain employees are exempt from overtime pay. Categories of exempt employees include professional, executive, administrative, outside sales, and some computer professionals. These are often referred to collectively as the “white collar” exemptions. In order to qualify for an exemption, the employee must meet both the duties test (their duties must be primarily executive, administrative, etc.), and the salary basis test. The rules relating to the different duties test for each category of exempt employees is beyond the scope of this article, but employers should carefully review these rules alongside their exempt employees’ job descriptions and actual duties to confirm that they are classified properly. This is another area of focus for DOL enforcement actions. With respect to the salary basis test, employees must currently be paid a salary of at least $23,660.

Under the proposed rules, the DOL is more than doubling the salary threshold from $23,660 to $50,440. The obvious impact of this increase is that many more employees will qualify for overtime pay once the new regulations take effect. In fact, nearly 5 million workers will be affected. The DOL implemented such a large increase in the salary threshold because the previous increase occurred in 2004. The DOL perceives the current salary threshold to be way behind the times. According to the DOL, the percentage of full-time salaried workers paid overtime has decreased from 62 percent in 1975 to just 8 percent today. The new rules also propose to automatically update the salary threshold on an annual basis, so employers will have to keep a close eye on annual changes to this amount for their currently exempt employees earning at or near the $50,400 salary minimum.

Late last year, the DOL’s chief law enforcement official, Solicitor M. Patricia Smith, announced that the DOL would likely issue the final changes to the overtime rules in late 2016, just in time for election season. The proposed salary minimum of $50,440 was based on the first quarter of 2015, and may change by the time the final rules are announced later this year. Some pundits are speculating that the final rule will set the salary threshold at about $40,000 per year. The DOL received over 270,000 comments during the comment period.

Although the new overtime rules will likely not take effect until early 2017, employers should look ahead to these anticipated changes, especially because it will affect those employees earning an annual salary between $23,660 and $50,440. Although it will require an individualized assessment tailored to each employer, a basic economic analysis audit will help determine whether it makes sense to increase the employee’s salary to the higher level, switch the employee to hourly pay with eligibility for overtime, or split the position so that two or more employees share job duties. The approach chosen by the employer could create morale issues and affect the prestige that certain employees appreciate about an exempt management position, even if they might make more money as an hourly employee. An early assessment now will help ease the transitional burden once the final regulations are in place.

While employers continue looking for ways to increase productivity with decreased labor, they must also be vigilant in enforcing rules that prohibit working unauthorized overtime. Federal and state agencies are expected to increase their enforcement actions as soon as the final rules go into effect.

Employers should review their classifications of exempt employees with their legal counsel to confirm that their employee classifications comply with the anticipated new duties tests and increase salary requirement. Remember, the employer bears the burden of demonstrating that it has properly classified its exempt employees as such. Penalties for misclassification or failure to pay overtime can include back pay (calculated at the overtime rate), interest, and additional penalties and fines for intentional noncompliance. Criminal enforcement is also authorized by the FLSA. In addition, an employee who prevails in a lawsuit may recover attorney fees and costs.

Tyler Volm is an attorney with Barran Liebman. He works with business owners and managers to ensure compliance with changes in the law, and defends employers against complaints when they arise. Contact him at 503-276-2111 or tvolm@barran.com.

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Employers are rightfully concerned with their employees’ off-duty and after-hours activities. Off-duty conduct can have an adverse impact on productivity within the workplace, employee relations and morale. Employers must be thoughtful, however, about when and how they choose to regulate off-duty conduct because a myriad of laws reinforce employee privacy outside the workplace.

These laws range from privacy and Title VII protections, to credit check restrictions and prohibitions on regulating off-duty tobacco use. Public-sector employee constitutional rights as well as protected union activities provide additional protections to some employees engaging in certain off-duty activity.

Generally, an employer is prohibited from regulating off-duty conduct or using that conduct as a basis for discipline. For the most part, what an employee does on his or her own time is his or her own business. The exception to this rule is when there is a connection (or nexus) between the off-duty conduct and the workplace.

There are three primary forms that this connection can take. First is where the off-duty conduct harms the employer’s reputation or business. This is discussed in connection with breaches of confidentiality below. Second is where the employee is unable to perform his or her duties at work because of the off-duty conduct.  Drug and alcohol abuse, discussed below, as well as moonlighting that leads to fatigue on the job, are examples of off-duty conduct that may inhibit the employee’s job performance. Third is when the off-duty conduct has an impact on other employees. In this instance, other employees may refuse to work with that employee given his or her off-duty conduct. Then off-duty instances of discrimination or harassment may create liability for an employer that does nothing in response to reliable reports.

In our digital age, intellectual property represents a large percentage of the average company’s value, such that breaches of confidentiality or violations of nondisclosure agreements can have serious repercussions. In addition to establishing confidentiality protocols and having employees sign nondisclosure agreements at the outset of employment, employers should remind their employees periodically of these obligations and that they extend outside the workplace (whether the employee is talking with family, friends or a competitor). A minor slipup can cost a company years of investment in research and client development.

In the event a breach does occur, a prompt investigation – including appropriate disciplinary action – should be undertaken. Also, a temporary restraining order should be secured from the court, and the recipient of the information should be notified that it was disclosed in violation of a nondisclosure agreement. Time is of the essence, so be prepared to act fast with the internal investigation and be consistent with the discipline that is handed down to employees that violate those agreements.

Off-duty drug and alcohol use may also be disciplined if it is in violation of the employer’s drug and alcohol policy or if such use impacts the employee’s ability to perform his or her duties.  Employers are free to have a zero tolerance drug and alcohol policy, though many employers choose to permit their employees to consume alcohol off-duty, so long as they are not under the influence while at work.

However, an off-duty DUII that causes a driver to lose his or her license may lead to on-the-job discipline if the employee is no longer able to perform necessary driving duties required of the position. Additionally, off-duty drug or alcohol abuse that leads to decreased productivity or more mistakes on the job can lead to discipline based on job performance.

Furthermore, given the recent vote to decriminalize marijuana use and possession in Oregon, employers should remind their employees of the details of their drug and alcohol policy, including whether there is a prohibition on marijuana use. Despite the decriminalization vote, employers are still free to prohibit the off-duty use of marijuana by employees, and to discipline employees for violations of the drug and alcohol policy. Educating the employees on this rule will help avoid uncertainty when the new law takes effect this July.

Last, but certainly not least, is off-duty discrimination and sexual harassment. Such behavior clearly has a nexus to the employer’s business, as it will undoubtedly permeate the workplace and impact employee relations. In fact, when an employer receives reliable information regarding off-duty discrimination or harassment, it has an affirmative duty to investigate and remedy the situation in accordance with its anti-discrimination and anti-harassment policies just like it would if the conduct had occurred in the workplace.

Ignoring the problem simply because it occurred outside of the workplace or after hours can expose the business to serious liability. Again, prompt investigation and consistent application of discipline are keys to limiting liability.

Not all employee off-duty misconduct may be subject to discipline.

The best approach is to: 1, consistently regulate off-duty conduct when there is a legitimate operational or business need; 2, analyze the connection between the conduct and the employee’s job duties; and 3, use balanced judgment on a case-by-case basis. Educating the workforce about when off-duty conduct may result in discipline and being consistent with the disciplinary process will help drive home the importance of maintaining a professional demeanor inside and outside the workplace.

Tyler Volm is an attorney with Barran Liebman LLP, and focuses on providing employment litigation and advice for business owners, managers and human resources professionals. Contact him at 503-276-2111 or tvolm@barran.com.

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Recent changes to the regulations that govern affirmative action plans (AAPs) for veterans and individuals with disabilities (IWDs) have many federal contractors scrambling to update their AAPs. While most of the changes pertaining to AAPs can be phased in at the start of the next plan year, some of the others took effect on March 24, 2014. Following is a look at these changes and recommendations for how contractors can comply.

Changes effective immediately

Changes that took effect on March 24 include new mandatory language that must be included in a contractor’s equal opportunity clause as well as the inclusion of certain mandatory language in all contracts. This language can be found at 41 C.F.R. § 60-300.5(a) and (d) for veterans plans, and 41 C.F.R. § 60-741.5(a) and (d) for IWD plans.

The new regulations also include changes to the self-identification process under both plans. The Office of Federal Contract Compliance (OFCCP), which is responsible for the enforcement of affirmative action plans and equal opportunity employment, hosts on its website a form that is strongly recommended for IWD self-identification, and Appendix B to the regulations for veterans plans contains sample language for self-identification of veterans.

Additionally, the new regulations require contractors to invite voluntary self-identification for IWDs at the pre-offer stage, invite current employees to voluntarily self-identify every five years, and remind employees that they may change their disability status at any time. Veterans should now be invited to self-identify as a “protected veteran” at the pre-offer stage and the preamble permits the invitation to be made at the same time race/gender information is requested to harmonize with the EO 11246’s Internet Applicant Rule.

Contractors must keep all information obtained through the self-identification process confidential and in a separate file from the employee’s general personnel file.

Changes subject to phase-in

One recent change to the AAP regulations subject to phase-in is a new 7 percent utilization goal for employment of IWDs. Contractors are required to annually compare the representation of IWDs in each job group to that 7 percent goal (unless the contractor has fewer than 100 employees, in which case it may apply the goal to the workforce as a whole). If the contractor identifies any problem areas, it must develop and execute a responsive, action-oriented program.

The OFCCP made clear that, at least for the time being, it will not fine or penalize a contractor that fails to meet the 7 percent utilization goal, unless that contractor also fails to take annual remedial steps to increase that figure. Similarly, the changes to veterans AAPs now require contractors to set hiring benchmarks, using either the national percentage of the civilian labor force (published on the OFCCP website) or by using the five factors outlined in the regulations.

Certain changes that impact both types of AAPs include: 1, enhanced data collection requirements; 2, increased external dissemination, outreach and positive requirement obligations; 3, increased document retention periods; and 4, the requirement that the policy statement must indicate the top U.S. executive’s support for the AAP.

Changes to the data collection regulations now require contractors to document: 1, the number of applicants who self-identified pre-offer as protected veterans or IWDs; 2, the total number of job openings and jobs filled; 3, the total number of applicants for all jobs; 4, the number of protected veteran or IWD applicants hired; and 5, the total number of applicants hired. Contractors must keep these records for three years.

New external dissemination, outreach, and positive recruitment requirements mandate that the new regulations require contractors to send written notice of their AAP to subcontractors, including subcontracting vendors and suppliers, and request appropriate action on the part of the subcontractor. Contractors must also conduct annual self-assessments of their efforts and document the criteria used to evaluate each effort, reach a conclusion about the effectiveness of the efforts, and if unsuccessful, identify and implement alternative efforts.

One mandatory criterion used to evaluate each effort must be the data collected pursuant to the new data collection requirement discussed above. Contractors must document their outreach and recruitment efforts and keep those records for at least three years.

With respect to internal dissemination, the new regulations require contractors to incorporate their AAPs into their policy manuals or otherwise make them available to employees, and a contractor that is a party to a CBA must notify the union official of the policy and request their cooperation.

Action plan

Before their next AAP plan year starts, contractors are strongly encouraged to:

• invite applicants to self-identify pre- and post-offer using the approved OFCCP form;

• conduct initial self-identification surveys of current employees;

• implement documentation procedures for outreach and recruitment efforts and self-audit reporting systems;

• conduct documented assessment of outreach and recruitment efforts and implement procedures to conduct such assessment annually;

• train employees engaged in key personnel activities;

• conduct data analysis related to applicants and hires;

• draft a policy statement showing the top executive support for AAP;

• ensure applicants and employees have equal access to the contractor’s personnel processes; and

• conduct annual workforce assessments, applying the utilization goal or hiring benchmark, identifying problem areas, and developing responsive, action-oriented plans.

Contractors seeking clarification about compliance with the new regulations should consult attorneys.

Tyler Volm advises employers and represents management in employment-related litigation at Barran Liebman LLP. He works with business owners and managers to ensure compliance with changes in the law, and defends employers against complaints when they arise. Contact him at 503-276-2111 or tvolm@barran.com.

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