Hot Topics for In-House Counsel:

Transcription

1 Jointly Present Hot Topics for In-House Counsel: News You Can Use Featuring Speakers Gigi O Hara, Vicki Buter & Amy Van Horne Wednesday, August 13, 2014 KutakRock.com This seminar is approved for 1 hour of CLE credit in Nebraska and Iowa. Atlanta Chicago Denver Fayetteville Irvine Kansas City Little Rock Los Angeles Minneapolis Oklahoma City Omaha Philadelphia Richmond Scottsdale Spokane Washington, D.C. Wichita

2 AGENDA & TOPICS 11:30-12:00 Registration and Lunch 12:00-12:20 Gigi O Hara will present 20 Tips in 20 Minutes, a speedy round of practical advice and tools for handling common employment issues. 12:20-12:40 Vicki Buter will discuss hidden traps found in familiar contract provisions and how to avoid such concerns when negotiating and drafting contracts. 12:40-1:00 Amy Van Horne will discuss useful company strategies for handling potential exposure and mitigating the risk of future litigation.

3 Gillian O'Hara Office: Omaha Business Phone: (402) Description Ms. O'Hara, a partner in Kutak Rock's Omaha office, maintains a broad general employment practice. She has successfully defended clients in various state and federal courts, including Nebraska, South Dakota, Kansas, Missouri and Nevada, against claims of discrimination, harassment, retaliation, equal pay violations, FMLA violations, whistleblower retaliation, breach of contract, defamation, constructive discharge and wage and hour violations, including allegations brought in class actions and FLSA collective actions. Ms. O'Hara counsels clients on a range of employment matters, such as employee discipline, performance, drug testing, terminations, misappropriation of trade secrets and breaches of fiduciary duties. She regularly drafts employment contracts, separation agreements and restrictive covenants. She also frequently advises clients regarding wage and hour issues, including minimum wage and overtime compensation, exemptions, deductions, compensable hours worked and donning and doffing. Ms. O'Hara regularly assists employers in conducting internal position audits and classification investigations, as well as navigate wage and hour audits by the U.S. Department of Labor, Wage and Hour Division. Ms. O'Hara investigates employee complaints and defends employers against charges of discrimination, harassment and retaliation filed with federal, state and local administrative agencies. She also defends employers against Fair Housing complaints and appeals awards of unemployment benefits and classification determinations to the Nebraska Appeal Tribunal. In addition, Ms. O'Hara has experience representing and advising employers on labor matters arising under the NLRA. She has investigated and successfully defended management against unfair labor practice charges filed with the National Labor Relations Board involving various allegations of retaliation and discrimination, including claims related to threats made, or adverse action taken, as the result of union activity, organization or sympathies. Ms. O'Hara counsels clients regarding protected concerted activity in the workplace and avoidance of NLRA violations, as well as labor relations issues arising out of grievances and union-organizing campaigns. Ms. O'Hara also maintains a commercial litigation practice, which includes an emphasis in tort and products liability asbestos defense for national clients. Ms. O'Hara graduated from law school with honors and is admitted to practice in all Nebraska courts, South Dakota, the Eighth Circuit Court of Appeals and the U.S. District Court for the District of Nebraska.

4 Education Professional Organizations Law School Syracuse University College of Law Degree/Distinction J.D., cum laude, 2002 Undergraduate B.A., University of Redlands, 1995 American Bar Association; Nebraska State Bar Association; Omaha Bar Association; The State Bar of South Dakota Practice Areas Litigation Employment Law ERISA and Benefits Litigation Labor Law Energy and Environmental Litigation Business and Class Action Litigation Product Liability, Mass Torts and Personal Injury Toxic Torts Defense Risk Management

5 Vicki H. Buter Office: Omaha Business Phone: (402) Description Ms. Buter represents clients in state and federal court and before arbitration panels in numerous complex commercial and business litigation disputes. She has advised clients in securities litigation matters, products liability cases and trademark and copyright infringement cases. In addition, Ms. Buter has represented clients in cases involving breach of contract, defamation, employment discrimination, non-compete clauses and trade practices violations. She also provides counsel to clients in Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) enforcement actions and advises clients in the securities industry on compliance with various FINRA and other regulatory rules and guidelines. National counsel for more than 35 securities arbitrations filed against financial services firm. Lead trial counsel in successful defense of fraud case brought against lender. Co-trial counsel for plaintiff who obtained $3.7 million judgment against guarantors of commercial loan. Primary responsibility in representation of national brokerage firm in commercial dispute involving contractual issues and privacy. Assisted in obtaining summary judgment in favor of helicopter operator that resulted in an $18.3 million settlement in favor of plaintiffs. Admissions: Nebraska, 2008 Iowa, 2007 U.S. District Court, Northern District of Iowa, 2008 U.S. District Court, Southern District of Iowa, 2007 U.S. District Court, District of Nebraska, 2008 U.S. Court of Appeals, Eighth Circuit, 2009 Education Professional Organizations Law School Queen's University, Belfast, Northern Ireland Degree/Distinctions LL.B., First Class Honors, 2003; LL.M., with Distinction, 2004 American Bar Association Iowa State Bar Association Nebraska State Bar Association Distinctions: Selected for inclusion in Super Lawyers - Rising Stars Great Plains Edition, 2013

6 Government Service Law Clerk, The Hon. Jerry J. Larson, Iowa Supreme Court, Practice Areas Litigation Securities Litigation Business and Corporate

7 Amy L. Van Horne Practice Group:Litigation Office: Omaha Business Phone: (402) Description Ms. Van Horne focuses her practice on products liability, personal injury, wrongful death, trucking accident defense and general commercial litigation. She has special expertise in defending food products claims across the supply chain. She also has extensive experience in managing products liability defense, both in the lead trial counsel role and in supervising litigation across the United States being handled by local counsel. Ms. Van Horne works with clients to create policies and procedures related to crisis planning and communication to ensure a prompt and appropriate response to unexpected events. She advises clients on compliance with FDA and USDA regulations and food product market withdrawals and product recalls. She advises clients regarding disputes before industry self-regulatory entities such as the National Advertising Division of the Council of Better Business Bureaus (NAD) and the Children s Advertising Review Unit of the Council of Better Business Bureaus (CARU). Ms. Van Horne serves on the Board of Directors of Legal Aid of Nebraska. She also volunteers regularly with the Nebraska State Bar Association Volunteer Lawyers Project and on behalf of Toy Drive for Pine Ridge, a nonprofit organization that provides resources to the residents of the Pine Ridge Indian Reservation in South Dakota. Ms. Van Horne is active in the Robert M. Spire American Inn of Court, a group of judges and trial lawyers who meet monthly to promote professionalism, civility and ethics. Ms. Van Horne is admitted to practice in Nebraska, Iowa, the United States District Court for the District of Nebraska, the United States District Court for the Northern District of Iowa and the United States District Court for the Southern District of Iowa. She practices regularly before the state and federal courts in Iowa and Nebraska. Education Professional Organizations Law School University of Iowa College of Law Degree/Distinctions Articles Editor, Journal of Corporation Law; Iowa State Bar Association Graduating Senior Award; J.D., with Distinction, 2002 Graduate M.A., 1997, M.S., 1998, The University of Nebraska at Omaha Undergraduate B.A., magna cum laude, Dana College, 1988 American, Iowa, Nebraska and Omaha Bar Associations; Robert M. Spire American Inns of Court, Defense Research Institute, Nebraska Association of Trial Attorneys, Iowa Defense Counsel Association, Nebraska Defense Counsel Association Government Judicial Clerkships

8 Service Iowa Supreme Court, Hon. Jerry Larson Practice Areas Litigation Product Liability, Mass Torts and Personal Injury Foodborne Illness Personal Injury Defense Toxic Torts Defense

9 20 TIPS IN 20 MINUTES: PRACTICAL ADVICE AND TOOLS FOR COMMON EMPLOYMENT ISSUES August 13, 2014 Gigi G. O Hara Kutak Rock LLP Gigi.OHara@KutakRock.com

10 TIP 1 Know the Law

11 Recruitment and Advertisement

12 TIP 2 Recruitment and Advertisement Job Postings: Do not advertise position specifying preference for or excluding individuals of a certain age, such as young, college student, or retired person, or gender, such as male help wanted or female help wanted, unless bona fide occupational requirement for the position. Burden on employer E.g., young, energetic applicants sought or male applicants only (unless there is a bona fide qualification required, for instance, a male restroom attendant for male restrooms). 161 IA Admin. Code Secs. 8.15(4) (Age); 8.31 (Disability); 8.48, 8.56 (Sex)

13 TIP 3 The Hiring Process Interview: Do not make unlawful inquiries regarding age, race, sex, religion, national origin, pregnancy, disability, marital status (Nebraska), sexual orientation (Iowa) or gender identity (Iowa). DON T ask about race or citizenship, accent or birthplace. (But can ask if eligible to work in the U.S. or if fluent in English or a foreign language if job-related). DON T ask how old. (But can ask if over the age of 18). DON T ask if married or about daycare arrangements. DON T ask about religious beliefs or holidays celebrated. DON T ask if in good health.

14 TIP 4 The Hiring Process Medical examinations and tests: General Rule: At the preoffer stage, an employer cannot require examinations that seek information about physical or mental impairments or health. Agility or fitness test permissible if job-related and consistent with business necessity. E.g., police department tests police officer applicants ability to run through an obstacle course designed to simulate a suspect chase in an urban setting. E.g., employer requires applicants to lift a 30 pound box and carry it 20 feet.

15 TIP 5 Hotspots for Employers in Discrimination and Harassment Can be based on sex, race, religion, national origin, age, disability, etc. Failure to respond or take prompt, remedial action. Failure to undertake a complete and thorough investigation. Discipline and discharge decision-making. Failure to adequately investigate and document disciplinary problems. Failure to demonstrate fairness in decision-making.

16 TIP 6 Best Practices for Preventing Sexual Harassment Prevention is the best tool for the elimination of sexual harassment. Take the following steps to prevent sexual harassment from occurring: Affirmatively raise the subject with employees. Express strong disapproval for such conduct. Develop appropriate discipline for such conduct. Inform employees of their right to make a complaint and how to report the issue of harassment. Develop methods to sensitize all concerned.

17 TIP 7 Understanding Retaliation Federal and state laws prohibit employers from retaliating against a person who files a charge of discrimination, participates in a discrimination investigation, proceeding or hearing, or otherwise opposes an unlawful employment practice. E.g., demoting or terminating an employee for filing or threatening to file a charge of discrimination. Of the 93,727 individual charges of discrimination filed with the EEOC in 2013, 38,539 (41%) included a claim of retaliation.

18 TIP 8 Whistleblower Retaliation Dodd-Frank Wall Street Reform and Consumer Protection Act ( Dodd-Frank Act ). Sarbanes-Oxley Act of 2002 ( SOX ). False Claims Act ( FCA ). Another avenue an employee can take in pursuing a retaliation claim against an employer. All create a private cause of action for certain individuals against employers who retaliate against them for taking specified protected actions.

19 TIP 9 Requests for Promotions General Rule: Encourage all employees to improve their skills and experience. Opportunities and advancement will follow. Educate employees on the internal application process: postings, deadlines, procedures to apply. Educate employees that promotions are not based on seniority or any other arbitrary reason. No automatic promotions. Promotions are handled the same way as new hires: all internal/external candidates are considered based on skill assessments and qualifications.

20 TIP 10 Employee Evaluations The Dos Have a process in place. Use standardized company forms with set criteria for guidelines, adhere to a regular, logical schedule, identify the key employees in charge of evaluations. Consider what is important to success in the position during this process, then apply the criteria to all individuals who work in that position. Take time to give employee evaluations the attention they deserve. Fully document both good and poor performance in evaluations. Do not ignore a policy infraction in an evaluation simply because it is otherwise documented.

21 TIP 11 Employee Evaluations The Dos Refer to prior performance issues in the current evaluation. E.g., John Smith s written work product has not improved despite being counseled regarding frequent typos, incorrect grammar, and the use of erroneous statistics in his last performance review given March 2, Keep evaluations confidential. Evaluations should be accessible by only those with a need to know. Do not want to undercut employee improvement.

22 TIP 12 Employee Evaluations The Don ts Avoid evaluation inflation. Reserve higher praise and ratings for those employees who factually are superior performers. Avoid false praise and generalities. Ground your evaluations in facts, not impressions or speculation. Refer back to the job description. E.g., Do not tell an employee that s/he simply has a bad attitude. Provide examples in which the bad attitude impeded job performance, teamwork, client satisfaction and how such behavior fell below standards for the position. Avoid straying beyond issues that are job-related.

23 TIP 13 Disciplining Employees The Dos Objectively outline the problem, facts and recommendation for appropriate corrective action. Refer to employee handbook and/or code of conduct. Sets out company expectations. Provides a guideline to use when documenting discipline. Explains disciplinary process: verbal warning, written warning, suspension, termination. Have employee sign the disciplinary action. If employee refuses to sign, document same on the disciplinary action, then date and sign.

24 TIP 14 Disciplining Employees The Don ts Don t use discipline as a personal weapon. Hinders consistency. Employees must be treated equally under the progressive discipline system. The object behind a progressive discipline policy should be to rehabilitate employees, not punish them. Don t ignore the employee s explanation for the conduct. Document the employee s explanation without judgment, sarcasm or patronizing responses. Don t allow the employee to make things personal.

25 TIP 15 Terminating the Right Way Before you terminate: Think through the basis for the termination. Document the reason in writing. Refer to prior records in termination notice. Confer with senior managers and Human Resources. Review prior terminations of employees in similar job roles for similar reasons. Make sure termination does not violate an employment contract, statute or public policy. Follow the company s policies and practices.

26 TIP 16 Understanding FLSA Compliance for Non-Exempt Employees Not all employees are paid the same. Exempt vs. Non-Exempt. Don t assume because an employee receives a salary he/she is non-exempt. Don t assume a position is exempt just because the job title identifies an employee as a manager, supervisor or administrator. Don t assume that just because you work outside of normal business hours, your staff should work the same hours without compensation.

27 TIP 17 Off-the-Clock Work Not paying non-exempt employees for all hours worked. Requiring responses to voic s, s, questions, or to perform other job functions when employee is off the clock. Uncompensated time most frequently occurs when employers fail to pay for work performed: Before and after an employee s scheduled work period; During an employee s scheduled meal break; and During the weekend or after hours.

28 TIP 18 Contracting Out Work Be careful of classifying workers as independent contractors. Heightened scrutiny by U.S. DOL and state agencies. Financial, tax and legal consequences if classification is incorrect. Proper classification of individuals working as contractors requires focus on true nature of worker s relationship with company. Various factors used to evaluate contractor status. Courts and government agencies vary on standard. No single test.

29 TIP 19 Recordkeeping Be aware of the record retention requirements under federal and state law. Be aware of the statutes of limitation to bring relevant claims under federal and state law. Be aware of what records to keep, what records to destroy, how long records must be kept, and how and where those records are to be stored. Develop, implement and enforce written recordkeeping policy. Train managers about the recordkeeping policy.

30 TIP 20 Contact Employment Counsel Gigi G. O Hara Kutak Rock LLP Gigi.OHara@KutakRock.com Omaha Office: 1650 Farnam Street Omaha, NE (402) (Main) (402) (Direct)

31 POTENTIAL ISSUES WITH COMMON CONTRACTUAL PROVISIONS August 13, 2014 Victoria H. Buter Kutak Rock LLP

32 Arbitration Clauses Typical Arbitration Clause [i]n the event that any dispute arises with respect to the interpretation, execution, or enforcement of this Agreement, the same shall be submitted to binding arbitration. Manion v. Nagin, 255 F.3d 535 (8th Cir. 2001)

33 Arbitration Clause Seeking Injunctive Relief in Court Eighth Circuit Manion v. Nagin, 255 F.3d 535 (8th Cir. 2001): District courts do not have authority to grant injunctive or other preliminary relief in aid of a pending arbitration, unless the parties have specifically agreed to give the court such authority. Peabody Coalsales Co. v. Tampa Elec. Co., 36 F.3d 46 (8th Cir.1994): Injunctive relief is inappropriate in a case involving arbitrable issues unless the contract terms contemplate such relief and it can be granted without addressing the merits. Manion Agreement Specifically permitted the parties to request interim relief directly from a court without prior authorization of the arbitrator(s). Such a request for interim relief was not to be deemed incompatible with, or a waiver of, the requirement to arbitrate disputes. A party would be entitled to injunctive relief in case of any breach. Manion Holding Language not sufficient to entitle movant to injunctive relief.

34 Arbitration Clause What language will entitle a movant to injunctive relief? Contract should provide for continuing performance for duration of Arbitration Peabody Coalsales Co. v. Tampa Elec. Co., 36 F.3d 46 (8th Cir. 1994) Sufficient detail such that the court is not required to determine the merits of the claims

35 Choice of Law Provision Typical Provision This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of Nebraska without regard to its conflict of laws rules. Significant Contractual Provision Controls every aspect of the parties respective obligations under the contract Generally valid and enforceable

36 Choice of Law Provision Does not mean always enforceable Section 187 of the Restatement (Second) of the Conflicts of Laws is widely followed, including by Nebraska courts Provides that a court will follow the law of the state chosen by the parties to govern their contractual rights and duties... unless either (a) the chosen state has no substantial relationship to the parties or to the transaction or there is no other reasonable basis for the parties choice; or (b) application of the law of the chosen state would be contrary to fundamental policy of a state which has a materially greater interest than the chosen state in the determination of a particular issue and which... would be the state of applicable law in the absence of an effective choice of law by the parties.

37 Choice of Law Provision Exception 1: No substantial relationship to the parties or to the transaction or other reasonable basis Exception 2: contrary to policy of the state Example enforceability of a noncompete clause in a Nebraska court applying the law of another state DCS Sanitation Management, Inc. v. Castillo, 435 F.3d 892, 895 (8th Cir. 2006) (because Nebraska courts have expressly rejected judicial reformation of noncompete agreements, application of Ohio law, which permits such reformation, would violate a fundamental policy of Nebraska) Hill v. Antioch Co., 2009 WL (D. Neb. Nov. 17, 2009) (applying Nebraska law to the interpretation of a noncompete agreement rather than the parties choice of Minnesota law because applying Minnesota law would violate the public policy of Nebraska)

38 Severability Clause Typical Clause If any provision of this Agreement is held illegal or unenforceable in a judicial proceeding, such provision shall be severed and shall be inoperative, and the remainder of this Agreement shall remain operative and binding on the parties. Purpose To deal with a potentially unenforceable or illegal provision in an agreement by severing the problematic provision. The agreement otherwise remains in effect.

39 Severability Clause Effect of Deleting an Unenforceable Clause When the provision is a key component of the Agreement May result in a significantly different bargain than originally struck Modifying Rather Than Deleting the Unenforceable Clause By the Court? What if the jurisdiction does not allow blue penciling? By the parties?

40 Integration Clauses Typical Clause This Agreement represents the complete agreement of the parties and supersedes any and all prior agreements. Purpose Disregard evidence of prior (or even contemporaneous) agreements Risk of Including Integration Clauses in Certain Circumstances

41 Contact Victoria H. Buter Kutak Rock LLP Omaha Office: 1650 Farnam Street Omaha, NE (402)

42 STRATEGIES FOR MITIGATING RISK August 13, 2014 Amy Van Horne Partner Kutak Rock LLP

43 Plan Advance Planning Have a Plan Contact information Centralized communications Insurance

44 Plan Advance Planning Have a Plan Publish It Senior staff Responsible employees (supervisors, etc.) Senior person for anyone on-site outside normal operations or when management is not available

45 Plan Advance Planning Have a Plan Publish It Practice It

46 Plan Advance Planning Have a Plan Publish It Practice It Update It New people New numbers New procedures New areas

47 Process Crisis Implementation Immediate If first responders or law enforcement needed safety first Communicate one person, one voice

48 Process Crisis Implementation Immediate Secure Personnel Witnesses Scene Documents (policies and procedures, records, insurance)

49 Process Crisis Implementation Immediate Secure Report Crisis plan reporting Governmental agencies, if needed Insurance Union

50 Anticipate Claims Management Communicate Control message, internal and external Have counsel involved immediately Attorney-client privilege issues

51 Anticipate Claims Management Communicate Document Litigation hold Witness interviews Photographs Required reporting Pre/post relevant records

52 Anticipate Claims Management Communicate Document Analyze Outside counsel Government involvement Insurance

53 Improve Continuous Improvement Analyze event and aftermath Identify areas for improvement Determine ongoing areas of concern Identify new areas for planning and preparation Update plan

54 Contact Amy Van Horne Kutak Rock LLP Omaha Office: 1650 Farnam Street Omaha, NE (402)