A recent study released by UCLA-RAND Center for Law and Public Policy detailed the “average” defense costs and jury awards in California employment law discrimination cases.

The study shows:

• The median legal costs to a defendant/employer through trial are $150,000. Even if the case goes to summary judgment — meaning a judge dismisses the charges before going to trial — the employer’s legal costs are about $75,000.
• And all that cash doesn’t include awards to employees who successfully waged lawsuits. The data for 360 cases in which 207 plaintiffs won show the median award in the low six figures.
• Of the 207 cases in the study where the plaintiff prevailed, the verdicts ranged from mid-five figures to low seven figures. The median verdict was in the low six figures.
• Verdicts for race and national origin discrimination tended to be at the higher end; discrimination for medical conditions and sexual orientation tended to be on the higher end.

The research was conducted by Kelly Services, Inc, between October 2009 and January 2010 — in the teeth of the recession. It essentially asked 134,000 people to describe their level of loyalty to their employers, and how that level had changed with the dire economy. Here’s how the employees responded:

• 27% said their level of loyalty to their employers had gone up as a result of how the employers treated workers during the tough times — and not necessarily because of increases in pay and benefits.
• 10% said employer reaction and treatment of employees during tough times had lessened loyalty to the company.
• 63% said their level of loyalty stayed the same.

The apparent lesson: Employees sympathize that times are difficult and employers have to make tough choices. Employees don’t sympathize when they perceive that companies are taking advantage of the times to mistreat workers who, because of the job market, are afraid to look elsewhere.

The bottom line: The job market will get better. And when it does, companies that handled employee relations with integrity will have the edge.

The fact that the Ledbetter case involved a 20-year-long pay dispute has lead to the thinking that payroll and associated records have to be kept nearly forever. Of course it’s a good idea to keep comprehensive records, but –

• Pay records alone may not be the best defense against a bias claim, and
• Courts recognize that there’s a limit to the amount of recordkeeping companies can maintain, especially small companies.

So, what is the best defense against wage-bias claims? The attorneys at Fisher & Phillips recommend:

• Providing employees with a system to challenge wage decisions on the basis of discrimination. This will both help prevent discrimination as well as provide the employer with the ability to create a record at the time of the decision.
• Adding objective factors to the decisionmaking process that allow decisions to be defended. In other words, try to be sure that your process has defined measures — output, quality, etc. — for awarding pay raises and promotion. That’s better than just vaguely saying or writing, “You did a good job this year.” What’s a “good job”?
• Setting a baseline for all raises and requiring written documentation and review for any deviation from the baseline, up or down. If almost everyone gets, say, a 3% raise, what justifies some people getting more or less than that?
• Providing decisionmakers with forms that guide them in explaining their decisions. As much as possible, don’t leave it up to supervisors to be creative. Hand them the forms that meet your criteria.

Nothing will guarantee that your company will never be sued for wage discrimination. All you can do is set up the best system to prevent lawsuits and to defend yourself in case of a lawsuit.

In opinion letters and other rulings, the DOL has set out six ironclad rules for taking on interns. A violation of any of those rules could cost your company in fines and legal fees:

1. There should be actual training involved, similar to what an intern would get at a vocational school. To fully cover the training stipulation, many firms write out detailed training plans, including goals and objectives for the trainee.

2. The training is mainly for the benefit of the trainee, and not just for the company.

3. Trainees do not displace regular employees.

4. The company that provides the training derives no immediate advantage from the activities of the trainees and on occasion the employer’s operations may actually be impeded.

5. There is no agreement or requirement that trainees will receive a job after completion of the training period. That doesn’t preclude companies from hiring trainees; it just means there can’t be a promise of employment before or during the training period.

6. The organization and the trainees understand that the trainees are not entitled to wages for the time spent in training.

Note: Legal advisers suggest that you avoid terms such as “hire,” “job,” “employee” or “employer” in documents associated with an intern program.

Legislators’ reasoning goes like this: If someone’s out of work and consequently piling up debts, how is that person supposed to climb out of a hole when those very same debts make the person unemployable?

Following that reasoning, Congress is looking at a bill that would ban the use of credit checks as a hiring tool.

Already, 16 states have proposed such bills or have some sort of ban in place

States looking at legislation: Connecticut, Georgia, Illinois, Indiana, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Oklahoma, Pennsylvania, South Carolina, Vermont, Wisconsin.

States that have legislation in place: Hawaii and Washington; Oregon has passed legislation that will take effect July 1, 2010.

U.S. Rep. Steve Cohen, D-TN, has introduced a similar legislation in Congress.

Note: Just about any existing or proposed legislation doesn’t ban credit checks for jobs in financial fields or where potential employees might have access to company funds of financial records.

The COBRA subsidy program was set to expire, but President Obama extended for one month the program enacted under the American Recovery and Reinvestment Act. [HR 4691, The Temporary Extension Act of 2010.]

Under the program, eligible individuals pay 35% of their healthcare premiums, and the feds reimburse the employer for the remaining 65% through a tax credit.

The fine print
So why just one month? Congress wants to extend the program through the end of the year but needs to decide how it’ll enact revenue provisions to pay for certain programs (e.g., COBRA subsidy and unemployment benefits programs). The extension buys legislators another four weeks.

To qualify for the subsidy, people must experience a COBRA-qualifying event – i.e., be involuntarily terminated – between 9/1/08 and 3/31/10. Note that the subsidy’s now also available to those who:

• first lose their coverage because of a reduction in hours between 9/1/08 and 3/31/10, and
• are then involuntarily terminated on or after 3/2/10 but by 3/31/10.

The premium reduction applies to periods of health coverage that began on or after February 17, 2009 and lasts for up to 15 months.

Right now, the Senate’s debating HR 4213, which would extend the COBRA subsidy program through the end of the year. We’ll keep you posted.

You’ll find updated COBRA info on the Department of Labor’s Web site.

First, before discussing the politics of the bill, let’s describe the key proposals. Employers who hire the unemployed will receive:

• An exemption from the 6.2% Social Security payroll tax for each worker hired through December, and
• An additional $1,000 tax credit per worker if new workers stay on the job a full year.

As they say in the late-night infomercials, “But wait — there’s more.” And that’s not necessarily good.

The current bill, at $35 billion, is a modification of one the House had passed in December with  $50-billion price tag, including a six-month extension of jobless aid.

The Senate pared that to a smaller measure. The House amended the Senate’s measure to conform with so-called pay-as-you-go budget rules requiring future spending increases or tax cuts to be paid for with either cuts to other programs or equivalent tax increases.

That tweak means the bill will have to go back to the Senate for approval — or further modification — before President Obama get his chance to sign off on the measure. All of that means we’re probably looking at a minimum of a few more days before the bill becomes law.

Sarah Kohl-Leaf of Taylors Falls, MN, complained in an e-mail to Evergreen Entertainment, which operates a chain of movie theaters, about several service shortcomings and payment problems at the company’s St. Croix Falls cinema. In the letter, she threatened to take her business to a competitor:  “I would rather drive to White Bear Lake, where they obviously know how to run a theater than have this experience again.”

Evergreen VP Steven Payne reacted with this response (which we cleaned up to achieve a rating of PG):

“Drive to White Bear Lake and also go f*** yourself. If you don’t have money for entertainment, get a better job, and don’t pay for everything on your credit or check card. You can also shove your time and gas up your f****** a**. Also, find better things to do with your time. This email is an absolute joke. We don’t care to have you as a customer. Let me know if you need directions to White Bear Lake.”

Something resembling customer-service sense must have kicked in later for Payne, because he followed up that message with another that apologized for the first message.

As you might imagine, the whole thing ended up on Facebook, motivating the formation of a group calling itself “Boycott St. Croix Falls Cinema 8.” At last count, it had 4,300 members — twice the population of St. Croix.

And, yes, there is a rival Facebook group called “We Support Steven Payne.” It has 68 members.

To get a better understanding of what meets the standard for appropriate documentation, answer True or False to the following:

(Answers are at the bottom.)

1. If you’re writing up documentation about an employee’s major violation of behavior or performance standards, you should try to stick with the major problem, and don’t include other minor violations.

2. For performance appraisals, the following statement is acceptable: “Your work is consistently below the quality of others in the group.”

3. Promises of promotions, raises or other employee rewards are binding only if they’re in writing.

Answers

1. True. Courts are suspicious of documentation that starts to look like a grab-bag of offenses. If you’re writing someone up for a string of unexcused absences, it’s dangerous to let the write-up wander into something like, “And you were five minutes late twice.”

2. False. The problem: Making a comparison with others doesn’t address the important question: Was the employee’s performance below acceptable quality standards? Better to give examples of deficiencies, such as, “You missed three important deadlines.”

3. False. Many court cases have illustrated that spoken promises can be as binding as written ones. Of course, spoken promises are tougher to prove, but no one wants to be put in a position in court where a lawyer asks: “Did you say you’d promote Miss Smith?”

The draft “Diagnostic and Statistical Manual of Mental Disorders” contains proposals to expand the category of disabilities to include a number of disorders, including binge eating and pathological gambling. Some have taken that to mean that employers will have to accommodate such disorders, or face penalties under the ADA.

The truth: It’s unlikely, for at least two reasons:

• When psychiatry classifies some disorders as disabilities, that doesn’t automatically mean they’ll fall under qualified disorders under the ADA. In fact, some recognized mental disabilities are specifically excluded from ADA protection, such as compulsive theft and pyromania.
• The proposals are in draft form only, and the psychiatry association has three years to field and incorporate public comment into the proposals. So, nothing will happen prior to 2013, and there could be a host of changes by then.