Outten & Golden: Empowering Employees in the Workplace

Archive for April, 2003

Updates on Previous Postings

Wednesday, April 30th, 2003

Rather than tackling a whole new subject today, I thought I’d take a little time to bring readers up to date on several previous postings.

4/18/03: Will They Ever Learn?

Just maybe they have learned a little bit….because Don Carty is no longer running American Airlines. Shortly after the last post, the brouhaha fully erupted, as outraged union members demanded Carty’s head for demanding wage concessions at the same time executives were slated to receive bonuses and guaranteed pensions. As noted in an article in Business Week entitled “What Was Don Carty Thinking?, the author notes,

Everything and nothing has changed at American Airlines since Apr. 16. That was the day jubilant CEO Donald J. Carty snatched defeat from the jaws of victory by revealing the details of executive-retention bonuses and pension protections after most union members had narrowly voted to accept $1.62 billion worth of annual concessions.

In fact, where Carty was concerned, many commentators asked the same question: what was he thinking? Molly Ivins went even further, asking “Is There Anybody Here With a Lick of Sense?” (See Ivins column.) The unions were still left without a choice as to whether to accept the concessions, and despite talk of rescinding the deals and revotes, ultimately went along with the previously-ratified concessions, with relatively minor changes. (See Reuters article.)

4/14/03: Is She “Scalia In A Skirt”? And Does the Skirt Need a Blue Slip?

3/13/03: She’s BAAAACK! Priscilla Owen Before the Senate Judiciary Committee. Again.

2/13/03: Judges, Judges, Judges! Act Now, Before the Senate Does

The latest on federal judicial nominees: controversial nominees Jeffrey Sutton, Jay Bybee, and Timothy Tymkovich, all of whom WF opposed, have all been confirmed by the Senate. Miguel Estrada’s nomination is still pending, as the Democratic filibuster has held for over three months now. Priscilla Owen, who WF has also opposed, is about to join Estrada among the ranks of filibustered nominees. (See New York Times article.) Carolyn Kuhl is slated for a Thursday (5/1) vote before the Senate Judiciary Committee on her nomination; however, it is likely that this vote will be postponed. Deborah Cook’s nomination is still pending, and could be taken up by the Senate at any time. WF site users have generated hundreds of letters on judicial nominations through our Action Center–it’s not too late to write your first letter–or a second or third, given all of these developments!

Need a Day Off? You're Not Alone

Tuesday, April 29th, 2003

In the face of increasing evidence that workers are more stressed out than ever (see 4/21/03 blog entry), one time-honored way that workers cope is to take vacations. And whether it’s a “mental-health” day or a response to true illness, sometimes workers just need to take sick days. However, at the time these coping mechanisms are most needed, it appears that workers are now either reducing the amount of vacation and sick leave they use, or declining to use them altogether. As companies work to reduce health care costs and shift an increasing amount of benefit costs to employees, this may be a “penny-wise, pound-foolish” solution for both employees and employers. And as we are learning in the case of SARS, a worker who chooses to work even while sick may end up endangering the lives of his or her coworkers (see 4/23/03 blog entry).

The U.S. Bureau of Labor Statistics reports that the number of people taking sick or personal days off dropped last year by 200,000 a week nationally, as compared with two years earlier. According to a survey of human-resource managers by CCH Inc. a Riverwoods, Ill., research firm, employee absentee rates are at or near their lowest levels since 1991. (See Wall Street Journal article.) Doctors also have noted the shift: many are seeing a decline in patients requesting sick notes, and a jump in requests for painkillers that will help them stay at work. “People are afraid they’re going to lose their jobs,” said Banks Turner, a Richmond, VA physician.

What accounts for all this declining use of sick leave? According to a recently published news article, “[t]he bleak job market has spurred more workers to keep their runny noses to the grindstone rather than risk appearing lazy or, worse, dispensable.” (See Seattle Times article.) As Karen Lovich, a Pittsburgh nurse, notes: “Everybody can be replaced.” Some workers are also under pressure from their employers to reduce the number of sick days. Donald J. Carty, the now-departed chief executive of AMR Corp.’s American Airlines, told workers in a phone message earlier this year that the company spends $1 million a day in absences and that he wants employees to call in sick less. Borders Group Inc., the bookstore chain, cut paid personal days to six from nine last year — a move that eventually played a role in two stores’ decision to subsequently unionize.

Those who have accumulated vacation time are not taking it nearly as often as before either. One industry commentator notes

I think because of the economic climate we’re in, many folks are very short-staffed. What we’re finding is many of the executives are holding down dual responsibilities. Demands on time are making getting away more and more difficult, especially with companies in the state they’re in today. . . . I think executives are really buckling down and saying they can’t afford to get away like they used to.

(See Washington Post article.) The problem is not just limited to executives, as those at every level of employment are faced with the same situation. Individuals are doing the work of more than one person. They also want to say, ‘I’m a good team player,’ to boost their job security. In fact, employees who put in extra hours and forego vacation time may be setting an example for executives by putting their personal lives on hold and stepping up to the plate during these difficult times.

Yet foregoing sick leave and vacation time is not without its costs, either. A worker who is truly sick may be physically present at work, but operating at a fraction of his or her usual productivity. One worker who used all of the sick days she was allowed last year, was nonetheless written up and told by her HR department that “good employees have a bank of sick leave.” She now says, “So now, with layoffs and the state of the economy, I’m going to be coming to work — and if that means showing my face with a sinus infection where I’m unable to even think, I’m absolutely going to be there.” (See Seattle Times article.) One analysis estimates that “presenteeism” (the opposite of absenteeism, where a worker is present at work but not fully productive) is responsible for two-thirds of the $250 billion in health-related lost-labor costs each year. AdvancePCS, a health-services company, arrived at the astronomical figure based on phone surveys that asked about 30,000 people to visualize and recount what they did at work on days they weren’t feeling well.

Infection of coworkers is always a concern, especially during cold and flu season. Some try to minimize contact with coworkers and cancel face-to-face meetings, but nonetheless soldier on in the office instead of staying home. However, this approach may become less advisable in the workplace given the advent of SARS, an illness with symptoms mimicking that of the flu which is believed to be transmitted through respiratory droplets. Most companies (and most workers, for that matter) would probably prefer that workers with contagious illnesses take the sick leave they need until the period during which they can infect others has passed, rather than running the risk of even more absenteeism among infected coworkers. But many do not transmit that message to individual employees–instead, workers are pressured to ignore what are seen as minor–albeit contagious–illnesses and keep on working, despite the risk of workplace contagion they present.

Those who do not take the vacation they need may increasingly find themselves rundown (and further susceptible to illness), stressed out, and ultimately less productive. As one executive recognizes, “[p]eople need to get away from it, relax, clear their head, build up energy,” but cannot do these things if they fear taking the vacation time their jobs provide. See Washington Post article.) Families suffer as well, as the typical summer vacation where parents take the time to bond with their children may be in much shorter supply this year. This phenomenon also affects employment statistics and contributes to more unemployment: companies who have required their current employees to work more hours and take less leave time are less likely to hire additional workers, on a temporary, seasonal, or permanent basis, to handle the workload, meaning that those who are currently out of work are less likely to find work, even for a temporary period.

So what should a worker who needs time off do? One consultant recommends asking for days off well in advance whenever possible, and making sure harried co-workers won’t get stuck with too much work, since breeding resentment might make it tougher the next time someone needs a personal day. Another suggests making the point that an occasional personal day can actually contribute to overall improved output. However, she suggests that it pays first to have a clear sense of what’s stressing out your supervisor and framing your requests so they don’t exacerbate his or her own anxieties. (See Wall Street Journal article.) Companies who want to ensure that workers use a minimum of sick leave may increasingly be offering banks of paid time off that employees can use however they see fit. While some fear that this practice may actually encourage workers to come to work sick to avoid “wasting” vacation time, it may also help the worker who just needs to take a break every once in a while take the time they need to be more productive workers, rather than fearing they will be chastized for misuse of sick leave.

Both workers and employers should remember that having a worker be present but minimally productive is not without its costs, and that in many cases, workers taking the time off they need benefits everyone–not just the worker involved. A worker who works too much may not be doing anyone any favors, including even his or her employer.

One Step Forward, Two Steps Backward

Monday, April 28th, 2003

On March 27, the Department of Labor (DOL) announced its long-awaited proposal to change the Fair Labor Standards Act, the federal wage and hour law, which purports to overhaul outdated overtime standards. (See DOL Proposal Summary.) That is a laudable goal, to be sure–there’s more or less universal consensus that the overtime laws are the product of an outdated era, and need to be brought in line with the realities of the modern workforce. (See Christian Science Monitor article.) However, the proposal as it now stands needlessly sacrifices one group of workers to benefit another group–a move clearly designed to thwart opposition to the proposal. While an estimated 1.3 million low-wage earners will gain overtime protection, according to the Labor Department, at the same time, about 640,000 people will lose overtime eligibility. The Labor Department calls it a “fair tradeoff,” given that low-income workers are the primary beneficiary of the changes, while middle-income workers stand to lose the most under the proposal. But was a tradeoff really necessary? And how does the proposal square with claims that the proposal is “family-friendly?”

There are three major changes in the Labor Department’s proposal with which workers should be concerned: 1) The proposal excludes previously protected workers by reclassifying them as managers, administrative or professional employees who are not eligible for overtime pay; and 2) It eliminates certain middle-income workers from overtime protections by adding an income limit, above which workers no longer qualify for overtime. The third change, the one most beneficial to some workers, involves an increase in the minimum salary threshhold for overtime eligibility, so that more workers at lower income levels benefit. Here’s how the proposals will affect workers:

The first change in the proposal affects the “duty test” that determines who falls into the three exempt categories — administrative, professional or executive. Those who fall into the three exempt categories are not eligible for overtime, regardless of their salary level. But because of proposed changes to the three categories, some employees currently eligible for overtime would no longer be able to get it. Currently, exempt workers must earn at least $250 a week and exercise “discretion and judgment” in their jobs to be declared exempt. Administrative employees, to be exempt, must also perform work “directly related to management policies or general business operations.” Professionals, such as engineers, must perform advanced work that typically requires a four-year college degree or higher. (See Hartford Courant article.)

Under the new rules, the “discretion and judgment” test would be out. Instead, employers could declare exempt any administrative employees who “perform work of substantial importance” or “work requiring a high level of skill and training.” In the professionals category, for instance, the duties have been broadened to include employees who gain certain skills through job experience, military training and technical school. In that case, some employees who were hourly could fall into the exempt professionals category. Kathy Roeder, spokeswoman for the AFL-CIO in Washington, D.C., said as many as 1 million employees nationally would no longer be eligible for overtime under the new duties test. (See Detroit News article.) Lawyer Greg McGillivary, who sits on the American Bar Association’s federal labor standards legislation committee, said the proposed rules would “dumb down” the standards for what a “learned professional” exempt from overtime would be. McGillivary notes that “[l]earned professions historically were limited to professions that required specialized degrees, like lawyers, doctors, accountants. But because they include in their new definition something called prolonged course of instruction and include community colleges and technical schools in that definition, we’re afraid that the department is trying to dumb down what a learned professional is.” One example cited by McGillivary is that of cooks who happen to have studied the culinary arts at a community college, who could be reclassified as a “learned professional” and have their titles changed to “executive chef.” (See San Antonio Express-News article.)

The second change in the proposal which targets middle-income white collar workers is a new provision that exempts all employees who make $65,000 a year from overtime if they perform any of a list of certain job duties, such as directing the work of two or more employees. (See East Bay Business Times article.) Under current law, there is no maximum income limit, so it is unclear why the change is necessary if not solely to appease business interests. This change, coupled with the first, will have the effect of removing from overtime protection large numbers of workers in aerospace, defense, health care, high tech and other industries. McGillivary notes that paramedics, police detectives, newspaper reporters, fire sergeants, manufacturing plant foremen, secretaries, loan processors and others could be denied overtime, depending on how employers interpret the rules.

The third significant change, the one that is the most worker-friendly, increases the minimum salary threshhold for exempt status. Under current rules, an employee earning only $155 a week can qualify as a “white collar” employee not entitled to overtime pay. The Department’s proposal would raise this minimum salary to $425 a week—an increase of $270 a week and the largest increase since the Fair Labor Standards Act was passed by Congress in 1938. However, even this change has been subject to some criticism. The AFL-CIO’s Roeder said the minimum salary level does not keep up with inflation. The $155 a week was set in 1975. “If they would have adjusted it for inflation, it should be $27,000 (instead of $22,100),” she said. “The proposed rules will put workers further behind than in 1975.” (See Detroit News article.)

The Labor Department calls this proposal a compromise proposal that meets the needs of both workers and business. According to DOL’s Wage and Hour Administrator Tammy McCutchen,

The unions have been requesting a change to the salary levels for more than 20 years, and during the Carter administration there were attempts to do that. But because it did not address the duties test, the Reagan administration threw it out. You need compromise. You have to have a moderate and measured proposal that has something in it for everyone, or else we’ll have nothing.

Labor lawyer McGillivary disputes that this proposal was ever a compromise, stating that

The problem is that everything they did, every change they made, every example they give in their analysis is pro-employer and pro-exemption. It makes me think they’re the department of small business and not the Department of Labor.

The proposal must also be read in conjunction with a second proposal affecting overtime pay, the Family Time Flexibility Act, reported on in further detail here in the April 10, 03 posting. If the proposed regulations and the Family Time Flexibility Act both pass this year, here is what is likely to happen: a large number of middle-income workers who currently rely on income to support their families will no longer be eligible for overtime, and will be forced to work much longer hours with no additional pay. Those lower-income workers who currently do not receive overtime will be newly eligible, but will be forced to take comp time instead of receiving the additional overtime pay promised by the pending regulatory changes. So very few workers are likely to see additional overtime pay, but employers are able to work their employees harder and harder with no additional financial costs added by doing so. As noted by columnist Molly Ivins, “Everybody gets screwed on this one, except the bosses…the proposed rules changes and the Republican bills provide a strong financial incentive for employers to lengthen the workweek, on top of an already staggering load.”

The overtime laws do not merely exist to compensate certain employees who work over 40 hours per week, but also operate to minimize the number of employees forced to work additional hours over 40 by providing a financial disincentive for employers to require additional work. The middle-income workers most likely to have family responsibilities are the most affected by this proposal, which will cause them to earn less money and work more hours away from their families, while lower-income workers, many of which are teenagers and college students and other young workers in entry-level jobs who are not under the same pressure to simultaneously support and spend time with their families.

If you currently receive overtime and count on it as a component of our overall compensation, and are likely to be affected by this bill, you have a chance to speak out. The proposed rules are open to a 90-day public comment period, ending June 30, 2003. After reviewing the comments, the Wage and Hour Division will make changes deemed necessary; if approved, the proposal will take effect late this year or in early 2004. Comments may be submitted to: Tammy D. McCutchen, Administrator, Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Room S-3502, 200 Constitution Ave. N.W., Washington, DC 20210. You can also fax your comments (20 pages or less) to (202) 693-1432 or e-mail the Wage and Hour Division. Coming soon to the WF site will be the ability to make comments through our Action Center, so check back here for additional information and comments on the proposal. Only through an outcry larger and louder than business groups are likely to make in support of the proposal can we hope to defeat the most onerous and family-unfriendly provisions of the Department of Labor’s proposal.

Neutrality or Censorship?

Friday, April 25th, 2003

Last week, the San Francisco Chronicle fired one of their reporters, Henry Norr, a technology reporter for the newspaper. That alone is not particularly newsworthy, especially since the reason given by the Chronicle for doing so was that Norr falsified his timesheet. However, Norr has claimed the real reason he was terminated was for speaking out against the war in Iraq, and tellingly, the Chronicle has recently revised its policy relating to staff participation in political activity. (See AP article.) Many people during this most recent conflict have held strong opinions about the war, some of which have greatly diverged from the opinions held by coworkers and their employers. For those who speak out and find themselves in hot water, are there any legal protections? And are there (and should there be) different standards for journalists than other employees who have an opinion about the war or who want to participate in political demonstrations?

An anti-war demonstration was planned in San Francisco for the next business day after the war started, which was March 20. Participants were encouraged to participate in non-violent protest to disrupt traffic and commercial activity to draw attention to the issues raised by the American invasion of Iraq. The night before the protest, Henry Norr e-mailed his supervisor to notify the Chronicle that he would not be at work on March 20, because he and his wife, Jean Tepperman planned to participate in the anti-war protest. (See Bay Guardian article.) On March 20, Norr did participate in the protest, and he and Tepperman were arrested. He was released that evening, and returned to work the next day, to complete work on his regular column. He also filled out his time sheet, designating March 20 as a sick day. He explained his use of a sick day as follows:

I filled out my time card and on my time card, I claimed the day I’d spent in jail as a sick day. I did that for a variety of reasons. Partly because were organizing a call-in-sick campaign, and I thought I would join with that. Also, I was feeling sick, as I told the Chronicle. I was feeling nauseated by the lies and the arrogance and the racism. I was feeling deeply depressed. All kinds of reasons. And of course, by the time work started, I was in a lot of pain because the cop had twisted my arm in trying to get me to move. And I will point out that there’s no official definition in the union contract or in any other personnel policy document that I’ve been able to see that defines what constitutes a sick day. People at the Chronicle, as with every other place I’ve ever worked and I’m 57 years old, people take sick days for a variety of personal purposes. They need to fix their car or they need to see a lawyer or whatever. Well I needed to get out there and do my little part to oppose the war.

See Democracy Now! radio show transcript.

After turning in the column to his editor, Norr was notified that the column would not run, and that he could not write for the Chronicle until further notice. He was first notified that he was suspended indefinitely without pay. However, his union, the Northern California Media Workers Guild, demanded that his suspension be for a definite term, so it was changed to a two-week suspension. (See S.F. Examiner article.) At the end of the suspension, Noor was fired, and is now grieving his termination. While Norr’s suspension was pending, the Chronicle also changed its policy concerning staff participation in political activity. At the time of Norr’s arrest last month, Chronicle policies did not ban participation in demonstrations. The paper’s ethics policy stated that “the Chronicle does not forbid employees from engaging in political activities, but needs to prevent any appearance of a conflict of interest.” This policy asked Chron employees to consult with supervisors before engaging in any war-related protest. (See Chronicle opinion piece.) This policy was in effect for about a week, and then scrapped in favor of a policy that prohibited any war-related protest. This change in policy is also being grieved by the newspaper union. (See S.F. Examiner article.)

Noor, who now has much more time to engage in anti-war protests, is also challenging his termination under a California law which makes it illegal for an employer to discriminate on the basis of political activity. (See California Labor Code sect. 1101-1102.) He has filed a discrimination claim with the state Labor Commissioner’s office (also known as the Division of Labor Standards Enforcement (DLSE). Clearly, Noor is benefiting from membership in his union, which is advocating on his behalf, and from being a California resident, protected from discrimination on the basis of political activity, which is not the case in many other states. However, Norr’s case may hinge on how the Chronicle has previously enforced its sick leave policy, since that was the official reason for his termination. Regardless of what happens to Norr, it is probably not wise to take sick leave days to participate in demonstrations or other personal business, even though other employees abuse the company’s sick leave policy.

Setting the sick leave issue aside, should employees who participate in political protests be subject to termination by their employers? Some may argue that journalists should be held to a higher standard than other employees, because of the need to appear neutral and avoid perceived conflicts of interest. Journalists’ codes of ethics often include statements such as “journalists should avoid conflicts of interest, real or perceived; and remain free of associations and activities that may compromise integrity or damage credibility.” (See Society of Professional Journalists code of ethics.) Should this, however, depend upon the topic upon which the reporter typically writes? It makes sense that newspaper editors would want their political reporters to stay out of the fray at anti-war rallies or city council meetings, but censoring the views of a tech writer on political issues seems to be going to far, as it’s not particularly reasonable to fear that the readership would question Norr’s objectivity on tech matters. That might require “more neutrality” from generalists than specialists, and also might discourage reporters from developing specialties that arise from their personal interest in a subject, but it seems like a reasonable way to balance the journalist’s right to be a participating citizen in a democracy with the newspaper’s interest in appearing objective. Similarly, it seems reasonable for a newspaper to forbid their technology and business writers from owning stock in the companies about which they write, but not to have such requirements for their advice columnists and cartoonists.

It remains to be seen whether what happened to Norr is a trend that will happen elsewhere in the workplace, or whether it will be confined to the journalism world. There is some indication it is happening elsewhere, but these complaints may not rise to the level of terminations and/or lawsuits. (See Sacramento Bee article.) And with the conflict in Iraq winding down, perhaps the domestic storm has also passed.

Workers should be aware, however, that workplace protections for speaking out are not particularly strong. A popular misconception is that employees have a “First Amendment” right to speak their minds; however, the First Amendment only applies to public employees, not those working for a private employer, and only then in fairly limited circumstances. The Chronicle is a private employer, and despite the irony of a newspaper demanding First Amendment rights for itself yet denying them in spirit to its employees, it may be free to do so, assuming that neither the union agreement or California law ultimately apply, which is yet to be decided. Employees who speak out on any controversial subject in the workplace may be willing to run the risk of termination, but it is a significant risk in some workplaces nonetheless.

Who Are You Taking to Work Today?

Thursday, April 24th, 2003

Have you noticed more kids than usual at your workplace today? That is probably because today is “Take Your Daughters and Sons to Work Day.” The annual event has been sponsored by the Ms. Foundation since 1993; however, this year, there’s a bit of a new twist. While the event was formerly known as “Take our Daughters to Work Day,” this year, the name has been changed to reflect the participation of both girls and boys in the event.

However, the change is more significant than just formally adding and welcoming the participation of boys in the annual workplace event. As the title of their article “It’s About More Than Just Adding Boys to a Girls’ Day” suggests, the name change also reflects a shift in the day’s focus, according to the event organizers. While the “Daughters” day was focused on showing girls the roles they’ll face at home, on the job, and in their communities and presenting the wide variety of career options now open to women, this year’s event is designed to “expand[] future opportunities for all our children, in both their work and family lives.” (See About the Program.) The goal is that participating girls and boys will share their expectations about work and family to plant seeds that could improve work and family life. (See Boston Globe editorial.)

As acknowledged by the Globe, “two full-time jobs plus household work often equal more than two working parents can do. Sons and daughters who see this now could be a force for family-friendly change as they enter the workplace. Large and small steps can be taken. New fathers might come to feel that they could take paternity leave without the fear of becoming the butt of water-cooler jokes. More parents might take their children to work without notice or fanfare if they had on-site day care. Flexible schedules and job-sharing might become so familiar that they no longer merit news coverage.” The organizers hope that children visiting the workplace will interact with adults working there in a way that will promote change: “We’ve found that companies seem able to hear from children what they sometimes can’t hear from adults. When daughters and sons ask, ‘Why are there mostly men bosses?’ or ‘Can you have a family and work here, too?’ companies will often ask themselves the same questions and even more change can take root.”

The day has historically been subjected to some criticism, however. Some educators claim that taking children out of school is disruptive, conflicts with preparation for required standardized testing, and costs schools aid that is awarded based on attendance. (See Tucson Citizen and Arizona Republic articles.) One commentator more than a little cynically suggests that if we really want to see family-friendly change in the workplace, there should be “Take Care of Your Kid for a Week” where primarily male CEOs try to balance kids and work for a week. “Surely after a week, these CEOs will have a little more insight about why there is no diversity in their senior management teams. And maybe, after a few years, CEOs will start making it possible for women to raise kids and stay on the fast track.” (See The Brazen Careerist.) And many are happy that the Ms. Foundation has officially embraced what has been happening for years at many workplaces: a coed day where both boys and girls can learn from their visit to the workplace. (See Mercury News article.)

Those who do participate, both boys and girls, will hopefully have a better understanding of what career opportunities are available to them, what the working world is like, and how they will one day juggle work and family responsibilities. Like the event organizers, we too hope it will be easier for the next generation to balance work and family life than it is for many adult workers today. Even if you and your children did not formally participate in today’s activities, it’s always a good time to discuss with your children and other children some of the challenges faced in today’s world, and how they can grow up to make a difference.

Fear About SARS Affecting the Workplace

Wednesday, April 23rd, 2003

By now, almost everyone has heard of SARS (severe acute respiratory syndrome)–the mysterious illness which has now infected thousands and killed hundreds worldwide. With no known cure and little known about its transmission methods, the emergence of SARS has caused a great deal of alarm, which is no longer confined to those who live or have contact with the Asian countries where the syndrome first appeared and has had its greatest impact. SARS is finally beginning to impact the American workplace, and raises a number of critical issues for employers and workers alike.

• Travel The first impact of SARS in the workplace was felt by those who travel as part of their jobs. When news of the disease first surfaced, companies began voluntarily limiting travel to Asian countries where the disease was first spotted. The Centers for Disease Control has now issued a travel advisory, recommending that travelers limit all nonessential travel to China, Hong Kong, Singapore, and Hanoi, Vietnam. The CDC has also issued a travel alert for Toronto, Canada. This alert does not recommend that travel to Toronto be limited, however; it recommends only that travelers to Toronto “observe precautions to safeguard their health,” which includes avoidance of settings where SARS is most likely to be transmitted, such as health care facilities caring for SARS patients, and practicing careful hand hygiene. The difficulties lies in determining what travel is nonessential, however. In our global economy, many companies do an extensive amount of business in Asia, some of which cannot be conducted without travel to the region. Will firms sacrifice (even temporarily, until more is known about the illness and its transmission) their business interests to protect the health of their employees, or will workers be forced to choose between traveling (and possibly jeopardizing their health) and doing their jobs effectively? This remains to be seen.

• Workplace Transmission Given that so little is known about transmission methods at this time, what is the risk that a worker with SARS will infect an entire workplace? At this time, that risk appears to be quite significant. While most of the cases of SARS in the United States among those who have not themselves traveled to Asia have involved health care workers who have treated SARS patients and family members of the health care workers, a Florida case in mid-April caused a great deal of concern, because it appeared to be the first workplace transmission case. (See USA Today article.) A Gainesville, Florida woman was hospitalized with a suspicious respiratory infection and is believed to have contracted SARS from a coworker who recently visited Asia. (See Voice of America article.) While there has been some difficulty confirming whether the Florida case was actually an instance of workplace transmission. Due in part to the lack of a definitive test for the disease, SARS can currently be identified only as a set of symptoms and circumstances. (See Tallahassee Democrat article.) After the emergence of the Florida case, the CDC issued Interim Guidelines applicable to the workplace, which include the following:

Workers, who in the last 10 days have traveled to a known SARS area, or have had close contact with a co-worker or family member with suspected or probable SARS could be at increased risk of developing SARS and should be vigilant for the development of fever (greater than 100.4° F) or respiratory symptoms (e.g., cough or difficulty breathing). If these symptoms develop you should not go to work, school, or other public areas but should seek evaluation by a health-care provider and practice infection control precautions recommended for the home or residential setting; be sure to contact your health-care provider beforehand to let them know you may have been exposed to SARS. As with other infectious illnesses, one of the most important and appropriate preventive practices is careful and frequent hand hygiene. Cleaning your hands often using either soap and water or waterless alcohol-based hand sanitizers removes potentially infectious materials from your skin and helps prevent disease transmission. The routine use of personal protective equipment (PPE) such as respirators, gloves, or, using surgical masks for protection against SARS exposure is currently not recommended in the general workplace (outside the health-care setting).

The CDC guidelines identify one precautionary measure which is likely to present problems in the workplace, which is staying away from work. While most workers will voluntarily comply with these guidelines, some may not do so willingly, either because they are disinclined to believe they present a risk or out of financial necessity. Even if the Florida case is determined not to be a case of workplace-transmitted SARS, businesses who employ individuals at risk of contracting SARS will likely be confronting this issue very soon, if not already.

• Quarantining Workers Some major US corporations who do business in Asia have already started to address the issue, in some cases out of necessity. Both Wal-Mart and Intel have already had one of their Asian employees contract SARS, requiring that coworkers be tested, and in Intel’s case, the brief closing of its Hong Kong office. (See Washington Post article. The emerging consensus is that companies should ask their employees traveling from affected countries to stay home for 10 days, with pay. Companies that ask their employees to take time off without pay run the risk that workers will not report their travel plans or exposure to disease. However, there will undoubtedly be companies that try to require their workers to take unpaid leave, raising potential wage disputes. What if workers refuse to take time off after travel to Asia or other affected regions, either because a company refuses to offer paid leave or because they believe they no longer pose a risk? At this time, a company does not have the legal right to quarantine that employee; that type of action could only be taken by public health officials. Both Wal-Mart and Intel are asking their workers to “self-quarantine” and paying them for the time they are unable to work–will other firms follow their lead and act accordingly to simultaneously guard against the risk of workplace exposue and recognize the financial needs of employees who must be quarantined?

If the future progression of SARS indicates that it will continue to pose a workplace threat, we can expect to see battles between employees who may have been exposed to SARS and employers trying to protect their business interests and the health and safety of the rest of their employees. While at this time, many companies are taking a “wait-and-see” approach, smart employers should act quickly to put in place reasonable guidelines which both respond to this sometimes-deadly disease and accommodate the needs of workers at risk.

Supreme Court Helps Define "Employee"

Tuesday, April 22nd, 2003

In today’s changing workplace, where an increasing number of ownership and management structures exist, the question of “who is an employee?” entitled to protection under numerous statutes designed to protect workers can be a difficult one to answer. In a ruling issued today, the U.S. Supreme Court attempted to clarify which individuals in the workplace will be considered “employees” under the Americans with Disabilities Act (ADA), which requires a minimum of 15 employees before a discriminated-against employee can proceed with a lawsuit.

In Clackamas Gastroenterology Associates, P. C. v. Wells, the Court considered the disability discrimination lawsuit of Deborah Anne Wells, who was employed by an Oregon medical clinic as a bookkeeper from 1986 until 1997. In February 1997, Ms. Wells was diagnosed with mixed connective tissue disorder, an auto-immune disease similar to rheumatoid arthritis. In order to accommodate her disability, her employer initially allowed her to start earlier in the day, at 7 a.m. and finish at 4 p.m., but she was often asked to fill in for the receptionist. This added to her regular workload, and she told her boss the extra hours were too much. So on April 25, Ms. Wells’ boss assigned her to work full-time as a receptionist in a different office, about 20 miles farther from Ms. Wells’ home. The new job would shift her hours to later in the day. According to her lawyer, Craig Crispin, Ms. Wells objected to the move, telling her employer, “You know I can’t do that.” “So you’re quitting then?” Ms. Wells says her supervisor responded. He repeated the question several times during conversations he had with Ms. Wells that April, which failed to reach a compromise. Ms. Wells ultimately never made it to her new job. She faxed a notice from her doctor allowing her to stay home from work until May 12. On May 13, she faxed permission to extend the arrangement. However, Ms. Wells didn’t know that seven days earlier, her employer had mailed her a letter stating she was fired, effective May 13. (See “On the Docket” case summary for further information.)

After Ms. Wells was fired, she ended up filing a disability discrimination lawsuit against the medical clinic. The clinic’s primary defense to the lawsuit was that it did not have the minimum number of employees required for Ms. Wells to bring her lawsuit. Although between 16 and 19 people worked at the clinic during the time Ms. Wells worked there, the clinic argued that four of those people should not be considered employees. The four individuals in question were all doctors who were shareholders and members of the board of directors of the professional corporation they created to operate the medical clinic. The question was whether these four people should be treated as partners and owners of the corporation or as the corporation’s employees. The Supreme Court ultimately did not decide that question, but referred the case back to the lower courts for more fact-finding on this issue, based on the standards the Court did establish in the opinion.

In the 7-2 majority opinion written by Justice John Paul Stevens, the Court started its analysis by looking at the ADA’s definition of employee. However, the law was not particularly helpful, as it defines “employee” as “an individual employed by an employer.” 42 U.S.C. § 12111(4). In a previous case, the Court had called a similar definition of employee a “nominal definition” that is “completely circular and explains nothing.” (See Nationwide Mutual Ins. v. Darden, 503 U.S. 318, 323 (1992).) So it was necessary to look elsewhere to determine the appropriate meaning of the law. The Court then looked at the “common law” to determine how the term “employee” had generally been defined in the bulk of previous court cases dealing with this issue. There are some limitations to doing that, since professional corporations (incorporation for the purpose of practicing a profession, primarily by groups of doctors, lawyers, accountants, etc.) are a recent legal development, which have existed under various state laws for only the last few decades.

After looking at the common-law definitions of master and servant, the Court ultimately decided to adopt the test proposed by the Equal Employment Opportunity Commission (EEOC), recognized by the Court as “the agency that has special enforcement responsibilities under the ADA and other federal statutes containing similar threshold issues for determining coverage.” The EEOC had proposed that the standard for determining whether an individual is an employee should hinge on “whether shareholder-directors operate independently and manage the business or instead are subject to the firm’s control,” and offered an additional six factors which would assist in making that determination:

Whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work;

Whether and, if so, to what extent the organization supervises the individual’s work;

Whether the individual reports to someone higher in the organization;

Whether and, if so, to what extent the individual is able to influence the organization;

Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; and

Whether the individual shares in the profits, losses, and liabilities of the organization.

(See EEOC Compliance Manual §605:0009.10).

After adopting this test, the Court was unable to tell from the facts before it whether or not the four doctors in question were employees or not, although the Court did opine that the facts currently “appear to weigh in favor of a conclusion that the four director-shareholder physicians in this case are not employees of the clinic.” Since the lower court did not obviously have before it the legal standard adopted by the Court, however, it is necessary for the District Court (federal trial level court) to take a closer look at how the Clackamas doctors’ situation can be analyzed under this test.

Two justices of the Supreme Court, Justices Ginsburg and Breyer, disagreed with the majority opinion. In their view, it was possible for the doctors to be considered partners for some purposes and employees for other purposes, and that considering them employees in this situation would uphold the purpose of the ADA. The dissenters found it relevant that the doctors had employment contracts under which they received salaries and yearly bonuses, worked at facilities owned or leased by the corporation, were admittedly considered employees under other laws such as ERISA and Oregon’s workers’ compensation law, and voluntarily chose to organize their practice as a corporation, which would limit their personal liability for the clinic’s debts. However, these factors, according to the majority, are not nearly as significant as the “control” test.

What is the significance of this opinion? For now, it means that a significant number of professional corporations and other businesses which have between 15 and 20 workers may not be subject to federal antidiscrimination laws. (However, they still may be sued under the laws of many states. See WF’s minimum number of employees page for more information on the minimum number of employees needed to bring a state claim.) In the future, it may also mean that smaller corporations (professional or not) configure their business in such a way so as to avoid being subject to discrimination lawsuits, and that smaller businesses are less likely to accommodate disabled employees if they believe with certainty that they are not subject to the ADA’s requirements. However, the clarified standards may also benefit some workers, where all of the factors adopted by the Court are not present, therefore allowing employees to file suit with greater certainty that the lawsuit will be allowed to proceed. (See CNN.com article.) While the reading of the law suggested by the dissenting opinion would certainly have been preferable for employees, it remains to be seen how many individuals will actually be affected by today’s ruling.

Stressed Out Workers

Monday, April 21st, 2003

Feeling stressed out right now? If so, you’re not alone. In a recent survey by the Washington, DC-based Pew Research Center for the People and the Press, about a third of the people questioned said they felt depressed by the war with Iraq. War is just the latest stressor, however: according to Russ Newman, executive director for professional practice at the American Psychological Association, said the war was affecting the vast majority of the group’s patients, based on a survey conducted last month, but that “[o]ver the years, the stress people feel just continues to increase.”

One of the primary reasons, besides the war, that workers are stressed, is the fear of losing their jobs in this weak economy. Not only have many people been forced to work more hours, to do the work formerly performed by now-laid-off workers, but the lack of mobility means many people are staying in jobs they might otherwise leave. This creates a climate where bad bosses flourish. (See Knight Ridder article.) According to this article,

When labor markets are lousy, as they are now, bad bosses tend to flourish. People are desperate to get new jobs and let themselves be abused in their present ones. Brutal bosses are only too happy to oblige. Consequently, it is in times like these that bad bosses and complaints against them rise. By all accounts, more and more people now have to struggle and suffer under a bad boss. There is a new tolerance, even admiration, for these types in much of corporate America, given today’s investor-driven emphasis on the bottom line — profits at almost any price. If the boss can make his numbers and hit those oppressive quarterly targets, who cares if he leaves a little blood on the office floor?

So increasingly in the workplace, you have a situation where workers, stressed out by the war, the economy, and their bosses may need mental health care. What happens then? According to one article, workers are increasingly less likely to have the mental health benefits they now need more than ever. (See NY Times article.) The share of employers offering mental health benefits, however, dropped to 76 percent last year from 84 percent in 1998, according to the 2002 benefits survey of the Society for Human Resource Management. Because health care costs are estimated to rise 15 percent this year, “employers are looking for areas where they can cut costs, and mental health is one of the areas that’s easier to cut. People are less likely to protest because of the stigma around it.” Even employers who aren’t cutting benefits outright are increasing co-payments and deductibles and/or reducing out-of-network coverage, which especially affects mental health benefits because many psychologists and specialists do not participate in large health care networks.

Reducing mental health benefits may in fact be penny-wise and pound-foolish. In a study released in February by Mercer Human Resource Consulting and Marsh Inc., 70 percent of 723 employers reported that stress or depression had increased in cost or frequency as a disability condition during 2001. That was a higher figure than for any other health problem, including cancer, lower-back pain or repetitive trauma like carpal tunnel syndrome. “Many industries have been cutting back on staff because of the economy, but the work still has to be done,” said Mercer’s George Faulkner. “That exacerbates the stress.”

What’s an employer with stressed-out workers to do, that doesn’t dramatically increase the cost of health-care benefits? Here are some suggestions that occurred to us:

• Carefully analyze whether cutting mental-health benefits really makes financial sense. As pointed out above, limiting access to mental health care may not pay off in the long run, if the consequences are merely to increase the number of work-related absences and use of short-term and long-term disability leave benefits. If you have made changes in coverage in the past, analyze whether a decrease in mental health benefits actually saved the company money.

• Who is stressed out? Without violating the individual privacy of employees, it still may be possible to discern a pattern of problems in a particular department or among those workers supervised by the same individual. If so, perhaps the problem is primarily the result of a “bad boss” or impossible-to-meet production standards caused by layoffs. While some workers may have conditions that in no way relate to any workplace stressor, others may have new or exascerbated conditions caused by the work environment, over which the employer can exert some control.

• Being more flexible. One way to eliminate some stress that workers may be under is to increase flexibility. For example, an employee working additional hours or taking on more responsibilities may be having increasing difficulty juggling family responsibilities. Flex time, unpaid leave, and the ability to occasionally conduct personal business at work may help make life less stressful without a significant decline in productivity. Many employers, especially small business owners, have recognized that to some workers, flexibility may be more important than a higher salary. (See Cincinnati Enquirer article.)

• What about cafeteria plans? Some workers may need mental health benefits more than other benefits which are often provided to all employees. For example, the employer may offer a vision plan to all employees, but not all employees have vision problems, or dependent health care coverage, even though many employees don’t have children. Instead of offering a standard benefit package to all employees which may not meet the needs of some workers, companies are increasingly turning to cafeteria plans, which allow workers to pick and choose among offered benefits to select those they care most about. This would allow workers who are most in need of mental health coverage to obtain what they need, while perhaps forgoing other benefits currently offered and paid for by the company on their behalf.

While the war may soon go away, there will always be stressed-out workers who will need mental health coverage. By considering creative solutions rather than blindly cutting costs, employers and employees alike may end up less stressed out.

Will They Ever Learn?

Friday, April 18th, 2003

You would like to think that people who ascend to the CEO and director positions of Fortune 500 companies did so because they’re very bright people who also happen to have more than just a knack for business. However, a number of these individuals have recently done quite a few not-so-bright things that make you want to ask: will they ever learn?

Let’s take, for example, the folks who run American Airlines. As you may have heard, American has spent the week threatening to file for bankruptcy unless its three major unions agreed to wage concessions. (See American Airlines Unions Vote on Concessions.) Two of the three unions, the Allied Pilots Association and the Transport Workers Union, immediately voted for the wage concession package, while the flight attendants, represented by the Association of Professional Flight Attendants (APFA), originally rejected the concessions by a close vote. Amidst continuing bankruptcy threats and the claims that some flight attendants were having difficulty casting votes, however, American and the APFA agreed to a redo on Wednesday (4/16), and the concessions were ultimately ratified by a 52 percent to 48 percent margin. (See Flight Attendants Approve Concessions at American.) Some industry experts praised American president Donald J. Carty’s leadership of the airline through this potential financial disaster: one expert called this “Don Carty’s highest moment.”

Carty probably shouldn’t savor the situation for too long. While on Tuesday (4/15), the unions were struggling to have their members accept pay cuts, American quietly filed its quarterly report with the Securities and Exchange Commission, which contained a bombshell. Two significant and previously undisclosed changes were made to American’s executive compensation plan: a plan to pay the airline’s top six executives bonuses equal to twice their salaries if they remain at the airline until January 2005, and the creation of a trust guaranteeing parts of the pension plans for American’s 45 top executives in the event of a Chapter 11 bankruptcy filing. (See American’s Exec Pay Enrages Labor.) Union leaders, which had worked closely with American to encourage their respective memberships to ratify wage concessions, are understandably very upset, and one union leader has threatened to scuttle the deal his union just ratified. Jim Little of the Transport Workers Union said he will reconsider signing the new contract because American’s “failure to timely disclose” the changes was a material breach of its obligation to workers. John Ward, head of the flight attendants union, called American’s move “the equivalent of an obscene gesture from management to employees,” while APFA leadership has posted at the APFA web site the comment “APFA is outraged by these latest revelations, which extend even beyond the sorry course of conduct that the Company pursued throughout the past several weeks.”

While industry experts believe that American weathered this crisis, in part, due to lessons learned from the bankruptcies of United Airlines and US Airways, American obviously didn’t learn from Delta’s similar mistake less than a month ago. As reported here in the 3/26/03 blog entry, Delta disclosed in its quarterly SEC filing that it had paid its chairman and chief executive Leo Mullin $13 million in 2002, given its executives cash bonuses totaling $17.3 million, and created a special $25.5 million executive pension fund, during a year in which Delta lost $1.27 billion and was planning flight cutbacks. Then again, perhaps he did learn something from Delta–amidst all of the bad airline news, the hypocrisy of Delta’s announcement hasn’t seemed to generate that much outrage.

These moves aren’t limited to the obviously-struggling airline industry–they’re happening all over. As recently commented by Steven Pearlstein in the Washington Post, however,

It’s not just that many of the top guys got big raises despite a lousy year for most investors and negligible pay increases for most of their employees. More significantly, the proxies confirm that directors continue to accept the claptrap that the only way to attract and retain top executives is to lavish them with wealth way out of proportion to what other talented humans seem to require.

(See Outrageous CEO Pay Still A Sore Point.) And political cartoonist Tom Toles may have said it best today. (See Toles (4/18/03)).

It’s up to all of us to pay attention. Because it appears the oh-so-smart CEOs and corporate directors won’t ever learn.

The State of Obesity Discrimination in America

Thursday, April 17th, 2003

Somehow it seems fitting, on the day of the death of diet doctor Robert C. Atkins, to look at what is going on in the workplace in regards to obesity. We’ve all heard numerous stories about the recent steep increase in the number of obese Americans–how does that development affect the workplace?

Today’s News Headlines contains a new story about a Connecticut man who recently filed a lawsuit against his local McDonald’s, who he claims refused to hire him because he weighed 420 pounds. I guess that once the class action lawsuit against McDonald’s for causing obesity was thrown out (see CNNMoney article), McDonald’s feels that it has disproved any link at all between McDonald’s food and any overweight Americans. Joseph Connor’s lawsuit, filed last year, claims that McDonald’s acted in violation of the Americans with Disabilities Act and the Connecticut Fair Employment Practices Act. The lawsuit is in the beginning stages, but just survived a challenge from McDonald’s to throw the case out on the basis that Mr. Connor’s morbid obesity should not legally be considered a disability. The judge disagreed, so Mr. Connor will be allowed to proceed with his case and to gather evidence about whether McDonald’s discriminated against him when they failed to hire him. The Connecticut case is noteworthy according to Mr. Connor’s lawyer, Gary Phelan, because “This is the first time a Connecticut court is saying that obesity may be a disability under state discrimination law.” (For more information, see WF’s pages on disability discrimination and Connecticut discrimination law.)

There are few laws specifically making it illegal to discriminate against obese individuals. Michigan has the only state law which makes it illegal to discriminate on the basis of weight; a few cities have local ordinances which also cover weight and/or appearance. (See Anti-Weight Discrimination Laws.) More commonly argued in court is that an obese person is either disabled or perceived to be disabled, and therefore protected by anti-discrimination laws which apply to a wide range of disabilities. These claims have met with varying degrees of success: the more overweight an individual is, the more likely their chances for success, as long as their weight does not preclude them from performing the essential functions of the job at issue. (See summary of case decisions and bibliography on obesity discrimination.)

More work in this area needs to be done; obviously, the law is not as clearly developed as it should be, and more and more individuals are likely to encounter obesity discrimination. While employers concerned about personal appearance and health care costs may be increasingly inclined to discriminate against the obese, they are likely to find that more and more job applicants and employees are going to be part of that category. Like companies who have learned that discrimination is costly, both in terms of exposure to lawsuits and in limiting workplace diversity, those who discriminate against those who are obese will likely learn the same hard lessons, especially if more cases like the one in Connecticut are brought successfully.

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