Seven Legal Survival Tips for the Office Holiday Party – Asset Protection

This week marks the traditional start of the holiday party season for many businesses and most readers will attend multiple holiday parties and perhaps even host one or more. Attending a few of these events myself I’m always surprised to see employers with exemplary employee interaction throw all caution to the wind at this time of year, often with unpleasant results. While I certainly don’t want to scare you out of having a party and sharing the holiday spirit with your valued employees, we must address the way people really behave at these events and what it means for your practice.

As discussed in previous columns, employee liability is a major issue that we are always trying to be proactive about. Most employment liability centers around a lack of clear rules and procedures and perhaps most importantly, a set of well enforced behavioral expectations that they support. Below are some simple tips and issues to consider when planning your party. 

Invite your “guests” — don’t require their attendance.
Make it clear that the party is an optional perk, not a required work activity that is linked to their job requirements. If they are required to attend it raises your liability.

Lead by example.
“The boss” or some kind of hall monitor being present goes a long way. Be friendly and collegial but control your drinking, get people to eat, and make sure someone is clearly in charge and visible as the host. Many of our clients have been involved in lawsuits related to the conduct of their partners while everyone was making sure the guests were behaving. The rules apply to everyone, especially you and all management.

Set the tone with a dress code.
Make sure your colleagues and employees understand that this is a business event, not a nightclub atmosphere. Encourage appropriate dress for the event and set guidelines if you know some attending may dress in a manner that is inappropriate or overly suggestive. Communicate it clearly and in advance so your guests are not surprised or embarrassed.

Feed them first.
Put some food in your guests, before the drinks are really flowing if possible. This will keep them busy, slow their drinking and help ensure they don’t drink until they are full.

Control and limit the booze.
It’s not realistic to expect that many offices will abstain from serving alchohol completely, but this is the number one source of problems at most parties. Remember that you are responsible for just about everything that happens during and even after the party, including liability for those who may injure themselves or others (even people not in attendance) as a result of excessive drinking or as their lawyer will put it, “being over served.” You can do this by limiting service hours at the bar, providing drink tickets for a specific reasonable number of drinks, or by having the drinks passed and served at intervals.

Consider the venue and limit access if it’s at the office.
During the day everyone knows where they are allowed to be and what is and is not appropriate, the lines get blurred after a few cocktails. Consider hosting your party off-site. It’s often more fun and helps transfer liability on some issues to the “professional” hosts at a restaurant or other venue. Make sure the venue itself does not create additional liabilities or an environment that may promote inappropriate contact or behavior or excessive consumption; cross the “Home of the Barber Shop Shot Chair and Mechanical Bull” bar off your list. If logistics don’t allow that, limit access to the office and request that the computers not be used. The last thing you want to happen is to have four employees gather in a cubicle watching Internet porn (true story). Make sure that items that are sensitive, controlled, or dangerous are off limits and inaccessible. Remember that you may have strangers in your office like caterers or delivery people and that no one will be watching them.

Have a good time.
Have some genuine fun and make sure others are doing the same. We often see that “boring” parties create the most issues as people drink, fight, argue and gossip to keep themselves busy. On the other hand a well-organized party with a flow that keeps people talking, eating, moving, and interacting reduces the opportunity for much bad behavior.

Arizona Employers: Is Your Workplace Ready for Medical Marijuana?

With the passage of Proposition 203, Arizona recently became the 15th state to legalize marijuana for certain medical uses. Guest Author Rachel Weiss, an employment lawyer with Gammage & Burnham, urges Arizona employers to educate themselves about the Arizona Medical Marijuana Act and how it will affect the workplace.

 Is Your Workplace Ready for Medical Marijuana?

Emplyment Law Attorney Rachel Weiss

 Arizonans with qualifying medical conditions will soon be able to buy and use marijuana.  Some of them might be your employees.  Others could be filling out job applications in your lobby.  Employers need to adjust their policies and practices to comply with the new law and protect themselves from liability. 

 First, anti-discrimination policies must be updated to prohibit discrimination against employees or applicants based on their status as registered cardholders.  You can’t fire or refuse to hire someone because he is legally allowed to smoke pot, just like you can’t fire or refuse to hire a woman because she is a woman.

Second, drug testing policies must have an exception for cardholders who test positive.  Unless your card-carrying employees come to work stoned or spark up while on duty, they can’t be fired for failing a drug test.  You should modify your policy accordingly.

 Third, when a worker tells his boss that he uses medical marijuana, he is probably putting his employer on notice that he has a disability that brings him within the protections of the Americans with Disabilities Act.  Although the employer does not have to accommodate that employee by allowing time off to roll a joint, this knowledge may trigger your obligation to determine whether other reasonable accommodations are available. 

 This is only the tip of the iceberg.  The Medical Marijuana Act raises a bewildering number of questions in a variety of fields besides employment law, such as health care, land use, law enforcement and revenue, to name just a few.  Attorneys at Gammage & Burnham authored Proposition 203 and will be actively participating in the Department of Health Services’ rulemaking process.  If you would like assistance with your employment policies and practices, or if you have questions about any other aspect of the new law, please contact me at rweiss@gblaw.com.

Two Types of Liability Insurance Your Practice Needs (and likely lacks)

To address two common exposures that are often overlooked and important in protecting your business against a potential lawsuit;  employment practices liability and cyber liability, I turned to insurance expert Aaron Stauss at Gilbert Insurance  for some details on how you can be protected.

If you have employees, a website, or your business works with or stores personal, medical, financial or other valuable data, then your business has exposures that most likely are not covered in your general liability policy.

Employment Practices Liability

As the number and severity of employee practices claims rise, business with employees should have in place an employment practices liability (EPLI) policy to protect the business against costly litigation and / or damages.

An EPLI policy will provide coverage / defense cost from a potential lawsuit brought forth by an employee for…
• Discrimination (racial, religious, gender, age)
• Sexual Harassment
• Wrongful Termination
• Failure to Promote
• Retaliation
• Employee Related Libel, Slander, Defamation
• Mental Anguish, Emotional Distress
• Invasion of Privacy

According to the Equal Employment Opportunity Commission (EEOC), the average number of EPLI cases filed per year is 80,000 cases. A recent study finds the average payout on an employee-related claim is approximately $180,000. We could list hundreds of example of employee lawsuits, but to get the idea all you need to do is go to the EEOC’s website and browse through the hundreds of cases in the Newsroom.

Cyber Liability Insurance

As businesses continue to rely more on technology and the internet, it also increases the potential for data security and privacy breaches. The average cost of a data breach is $204 per lost record. Question… Is your computer network protected from…
• Hacker Attack
• Human Error
• Fraud
• Virus Transmission
• Employee Sabotage
• Power Failure
• Natural Disaster
• System Malfunction

Examples of the Impossible that Actually Happened

An employee of a financial institution loses a laptop with client data. Multiple lawsuits are pending with defense costs exceeding $700,000.

Computer hackers breach your electronic system containing your patients’ medical records, and you are sued by the patients for failure to protect private information.

Don’t pay out of pocket or spend your time defending yourself against a potential lawsuit. If you feel your company has a need for either EPLI or Cyber Liability call Aaron Stauss at Gilbert Insurance Group (480) 926-9020.  To learn more about their services and team, please visit their website at www.gilbertinsurancegroup.com.

Employers Beware: The Department of Labor is Out to Get You

Employers often think they understand wage and hour laws, but the fine print is more complicated than they realize and can lead to serious legal and financial exposures.  When the new Secretary of Labor announced that “There’s a new sheriff in town,” she wasn’t kidding.  As Emloyment Law Attorney Rachel Weiss explains, employers would be wise to heed the Secretary’s warnings and get good employment law counsel to review their polices and procedures now, BEFORE the exposure exists. –  Ike

Employers Beware:  The Department of Labor is Out to Get You

 This is not a threat, it’s reality.  The DOL’s focus has shifted from helping employers comply with the Fair Labor Standards Act (FLSA) to nailing those who do not.   

This is also not a secret.  In fact, watch for public service announcements in multiple languages featuring the Secretary of Labor and celebrities urging employees to call their hotline if they believe they are being paid unfairly.  (See for yourselves at http://www.dol.gov/wecanhelp/psa.htm)   Aptly named the “We Can Help” campaign, this initiative was launched just one week after the DOL announced that it is abandoning its practice of publishing Opinion Letters, which historically have provided important guidance to employers.  Reliance on DOL Opinion Letters has also served as a defense to liability for back-wages and other damages.  Instead, broader “Administrator Interpretations” will be issued that will not address the finer points of particular policies and practices, thereby requiring litigation to determine their application to the facts of each case.  

Then there’s the “Plan/Prevent/Protect” initiative, which proposes new regulations that will require employers to audit their pay practices, document how each employee’s exempt status and pay calculations are determined as well as the reasons why certain individuals are categorized as independent contractors and not employees.  Employers would need written plans and be required to track how they are implemented.  The failure to do all of this to the DOL’s satisfaction will be deemed noncompliance and result in sanctions and/or costly litigation.  The pending Employee Misclassification Prevention Act (H.R. 5107, S. 3254) seeks to impose similar obligations. 

If you think I’m trying to scare you, you’re right.  Most employers also don’t realize that once a violation is established in an FLSA lawsuit, the burden is on the employer to prove why double damages should not be awarded, and the employer will be liable for the employee’s legal fees.  Moreover, the owner of the company, or whoever was responsible for the decisions that led to the violation, will be held personally liable along with the company, regardless of laws that limit personal liability in other contexts.  Unlike cases brought under Title VII for discrimination, there are no administrative hoops to jump through before employees can go to court.  And remember, too, that wage and hour claims are not usually covered by insurance. 

Now more than ever, employers need to develop not just a plan for compliance, but a culture of compliance.  Consider conducting an internal or external audit of your employee classifications and pay practices, and seek advice from an employment attorney.  Wage and hour laws are complex and nuanced, and the DOL clearly is not interested in educating you.  If that were the case, it would have created an employer “help desk.”  Instead, it beefed up its enforcement staff with 250 new investigators and got famous people to reach out to employees. 

Lest there be any misunderstanding, I do not mean to imply that the DOL should not be an advocate for employee rights or that employers should be able to shirk their obligations under the FLSA.  Just consider this a public service announcement for the other side.    

Rachel Weiss practices labor and employment law with the law firm of Gammage & Burnham in Phoenix.  If you have questions about wage and hour issues, you can reach her at (602) 256-4448 or rweiss@gblaw.com.