Archive | Advice for Employers

A Reminder To Employers About Punitive Damages


The standard a plaintiff must meet in order to secure an award of punitive damages is high. Due to that, punitive damages are difficult to obtain. However, when they are awarded, there is a chance they could well exceed the amount of compensatory or nominal damages awarded to a plaintiff as recently confirmed in a Title VII case out of the 9th Circuit, Arizona v. Asarco, LLC, 733 F.3d 882 (9th Cir, 2013). In that case, the jury awarded no compensatory damages and $1 in nominal damages to the plaintiff. The jury also awarded over $800,000 in punitive damages. The employer appealed arguing that the punitive damages award was unconstitutionally excessive. The Court found that the original award was unconstitutional as it exceeded the applicable cap of $300,000 but declined to definitively impose a number on the punitive damages award it thought was reasonable. Rather, it suggested $125,000 could be reasonable based on the highest awarded ratios of compensatory to punitive damages but directed that the matter of punitive damages should be re-tried unless the plaintiff agreed to accept a remittur to $125,000.

This case is a good example of the possible impact of punitive damages. I also note that punitive damages are generally not covered by insurance in Pennsylvania. Accordingly, punitive damages are a
direct and substantial risk to employers.

Firing a Drunk Employee May Not Violate the FMLA


A recent case (Sheridan v. Arthur J. Gallagher & Co., NO. 4:13-CV-1969 (S.D. Texas, December 11, 2014)) reflects that an employer may not have to accommodate an employee who shows up to work intoxicated. In that case, the employee had a history of alcohol issues, treatment, and relapses. This ultimately led to an agreement wherein the employee agreed, among other things, not to use alcohol while working.  Thereafter, the employee showed up to work one day visibly intoxicated. The employer terminated his employment. However, during that same conversation, the employee purportedly requested FMLA leave. Nevertheless, the employer proceeded with terminating his employment. This termination was upheld by the Court. The decision in this case confirms that an employer is not obligated to overlook an employee’s intoxication in the workplace as it puts both the employee and other employees at risk.

Wage and Hour Issues Pose a Significant Risk for Employers

wagehour_lawsOne of the most prevalent issues currently facing employers is wage and hour issues. This is due to several reasons:

  • First, there are many common misperceptions about the wage and hour laws, which cause employers to inadvertently stumble into trouble.
  • Second, a changing or growing workforce can quickly turn what was lawful into an unlawful situation and/or can cause employers to overlook potential pitfalls.
  • Third, the exposure in these cases can be significant and oftentimes is not covered by insurance. The exposure can be significant for a few reasons. Back wages add up quickly. Oftentimes a mistake in the handling of a personnel matter can affect more than just one employee. Wage and hour issues can also easily lead to class action lawsuits.

In light of these risks, we offer a few tips:

  • Confirm that any people classified as an independent contractor meet the definition of an independent contractor as set forth in the FLSA.
  • Confirm that any employees labelled as exempt fit within one of the narrow exemptions set forth within the FLSA
  • Make sure that all job descriptions are accurate based on the present workforce and company.
  • Ensure that non-exempt employees are being paid for all time worked, which could include them checking email at home once they leave the office and/or working over their lunch hour.
  • Ensure you have an appropriate overtime policy in effect that is monitored and enforced.

Do you have an upcoming holiday party at your office?

office_partyHere are a few helpful hints for employers as this could be a liability producing event in addition to being a fun event:

  1. If it is a mandatory party, be prepared to grant exemptions for those employees who are unable to participate due to religious or medical reasons.
  2. Watch for potential hazards, which could result in a work injury (i.e. falling off a ladder while hanging decorations).
  3. If costumes or holiday sweaters are being worn, advise employees to avoid offensive or revealing costumes. If someone shows up in such a costume, send the employee home to change unless a modification can be made at work (i.e. covering up an offensive logo) but be careful not to infringe on anyone’s religious practices or beliefs.
  4. Watch for potential food allergies if food is being served and label any food items that may contain allergens (i.e. nuts, milk, gluten).
  5. Be cautious of the level of alcohol consumption by your employees.