Managing Rules And Risks: Are You Ready For The New Regs? Wednesday, September 15, 2004.
-
Upload
jana-rawles -
Category
Documents
-
view
214 -
download
0
Transcript of Managing Rules And Risks: Are You Ready For The New Regs? Wednesday, September 15, 2004.
Managing Rules And Risks: Are You Ready For The New Regs?Wednesday, September 15, 2004
Welcome Moderator, Mike Orren
Publisher, Texas Lawyer
Balancing Employment Risks and
Managing Risk-Shifting Strategies
Vicki Birenbaum Doug Haloftis Brian Pudenz
EEOC Charge StatisticsFY 1992 Through FY 2003
The number for total charges reflects the number of individual charge filings. Because individuals often file charges claiming multiple types of discrimination, the number of total charges for any given fiscal year will be less than the total of the eight types of discrimination listed.The data are compiled by the Office of Research, Information, and Planning from EEOC's Charge Data System - quarterly reconciled Data Summary Reports, and the national data base.
FY 1992
FY 1993
FY 1994
FY 1995
FY 1996
FY 1997
FY 1998
FY 1999
FY 2000
FY 2001
FY 2002
FY 2003
Total Charges
72,302 87,942 91,189 87,529 77,990 80,680 79,591 77,444 79,896 80,840 84,442 81,293
Race29,548 31,695 31,656 29,986 26,287 29,199 28,820 28,819 28,945 28,912 29,910 28,526
40.9% 36.0% 34.8% 34.3% 33.8% 36.2% 36.2% 37.3% 36.2% 35.8% 35.4% 35.1%
Sex21,796 23,919 25,860 26,181 23,813 24,728 24,454 23,907 25,194 25,140 25,536 24,362
30.1% 27.2% 28.4% 29.9% 30.6% 30.7% 30.7% 30.9% 31.5% 31.1% 30.2% 30.0%
National Origin
7,434 7,454 7,414 7,035 6,687 6,712 6,778 7,108 7,792 8,025 9,046 8,450
10.3% 8.5% 8.1% 8.0% 8.6% 8.3% 8.5% 9.2% 9.8% 9.9% 10.7% 10.4%
Religion1,388 1,449 1,546 1,581 1,564 1,709 1,786 1,811 1,939 2,127 2,572 2,532
1.9% 1.6% 1.7% 1.8% 2.0% 2.1% 2.2% 2.3% 2.4% 2.6% 3.0% 3.1%
Retaliation
All Statutes
11,096 13,814 15,853 17,070 16,080 18,198 19,114 19,694 21,613 22,257 22,768 22,690
15.3% 15.7% 17.4% 19.5% 20.6% 22.6% 24.0% 25.4% 27.1% 27.5% 27.0% 27.9%
Title VII10,499 12,644 14,415 15,342 14,412 16,394 17,246 17,883 19,753 20,407 20,814 20,615
14.5% 14.4% 15.8% 17.5% 18.5% 20.3% 21.7% 23.1% 24.7% 25.2% 24.6% 25.4%
Age19,573 19,809 19,618 17,416 15,719 15,785 15,191 14,141 16,008 17,405 19,921 19,124
27.1% 22.5% 21.5% 19.9% 20.2% 19.6% 19.1% 18.3% 20.0% 21.5% 23.6% 23.5%
Disability*1,048 15,274 18,859 19,798 18,046 18,108 17,806 17,007 15,864 16,470 15,964 15,377
1.4% 17.4% 20.7% 22.6% 23.1% 22.4% 22.4% 22.0% 19.9% 20.4% 18.9% 18.9%
Equal Pay Act
1,294 1,328 1,381 1,275 969 1,134 1,071 1,044 1,270 1,251 1,256 1,167
1.8% 1.5% 1.5% 1.5% 1.2% 1.4% 1.3% 1.3% 1.6% 1.5% 1.5% 1.4%
* EEOC began enforcing the Americans with Disabilities Act on July 26, 1992.
Nationwide Plaintiff Recovery Probability for
Employment Practice Liability Overall (1996-2002)
58% 59%63%
69% 67%71%
75%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pe
rce
nt
1996 1997 1998 1999 2000 2001 2002
Year
Source: Employment Practice Liability: Jury Award Trends and Statistics (2003), Jury Verdict Research
Nationwide Plaintiff Recovery Probability for Sex
Discrimination
64%69%
66%71% 72%
67%
76%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pe
rce
nt
1996 1997 1998 1999 2000 2001 2002
Year
NationwidePlaintiff Recovery Probability for Race
Discrimination
44%
36%
56%59% 57%
63%
71%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pe
rce
nt
1996 1997 1998 1999 2000 2001 2002
Year
NationwidePlaintiff Recovery Probability for Age
Discrimination
55% 57% 57%
75%
61% 59%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Pe
rce
nt
1996 1997 1998 1999 2000 2001
Year
NationwidePlaintiff Recovery Probability for Disability
Discrimination
63%58% 57%
68%
58%
72%67%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Pe
rce
nt
1996 1997 1998 1999 2000 2001 2002
Year
Nationwide Statistical Trends in Discrimination Awards
The compensatory award median, probability range, award range and award mean for all plaintiff verdicts collected for the years 1996 through 2002 involving
discrimination are analyzed in the table below.
Year Award Median Probability Range Total Range Award Mean
1996 $128,000 $35,000 - $375,000 $1 - $19,395,376 $422,982
1997 150,000 45,000 - 401,905 1 - 6,729,073 384,092
1998 170,000 50,000 - 402,200 25 - 80,700,000 781,108
1999 139,985 50,000 - 445,987 1 - 21,000,000 683,081
2000 192,500 55,578 - 680,624 832 - 10,160,000 737,033
2001 171,000 40,250 - 453,875 1 - 5,000,000 391,779
2002 222,158 71,800 - 589,275 3,000 - 1,600,000 403,251
Overall 161,818 50,000 - 464,485 1 - 80,700,000 606,234
Award Range Percentage
To - $ 4,999 45,000 - 9,999 310,000 - 24,999 725,000 - 49,999 1050,000 - 74,999 875,000 - 99,999 7100,000 - 249,999 20250,000 - 499,999 17500,000 - 749,999 8750,000 - 999,999 41,000,000 - 1,999,999 72,000,000 - 4,999,999 45,000,000 + 2
Distribution of Discrimination Awards, Overall (1996-2002)
The following table provides the distribution of compensation awards and percentage of the total number of awards within specific dollar ranges for
overall discrimination awards. This category included a combination of age, disability, national origin, pregnancy, race, religion, sex and sexual orientation
discrimination.
Nationwide Median Awards for Retaliation Cases (1996-2002)
Dolla
rs
228,012
158,000
326,250
46,248
138,596 139,900
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Filing DiscriminationClaim
Filing SexualHarassment Claim
WhistleblowerClaim
Filing Workers'Compensation
Retaliation, OtherRetaliation, Overall
Award Range for Retaliation Cases Percentage
To - $ 4,999 45,000 - 9,999 510,000 - 24,999 825,000 - 49,999 1150,000 - 74,999 875,000 - 99,999 6100,000 - 249,999 18250,000 - 499,999 19500,000 - 749,999 8750,000 - 999,999 41,000,000 - 1,999,999 52,000,000 - 4,999,999 25,000,000 + 1
$214,643
$200,000
$125,173
$169,625 $165,000
$0
$50,000
$100,000
$150,000
$200,000
$250,000
Government Entities Manufacturing/IndustrialCompanies
Service/Retail Entities TransportationCompanies
Overall
Median Award by Defendant Type For Discrimination, Federal District
Court Cases (1997-2003)
Defendant TypeSource: Employment Practice Liability: Jury Award Trends and Statistics, 2004 Edition.
Analysis by Defendant TypeThe following pie chart reveals the industry breakdown of defendant
types based on plaintiff and defendant verdicts rendered from 1996 through 2002.
Nationwide Employment Practice Liability Settlements (1996-2002)
Liability Award Median
Probability Range Total Range Award Mean
Discrimination, Overall $55,000 $22,500 - $150,000 $1 - $508,000,000 $1,262,128
Constructive Discharge 60,000 25,000 - 154,958 2,000 - 2,750,000 196,012
Hostile Work Environment
59,581 29,750 - 121,125 1,500 - 6,750,000 239,465
Retaliation, Overall 39,500 18,750 - 121,250 2,001 - 1,250,000 120,335
Sexual Harassment 61,000 22,250 - 172,500 1 - 1,250,000 150,615
Wrongful Termination 50,000 20,000 - 135,000 121 - 55,000,000 406,654
Employment Cases, Overall
56,750 25,000 - 157,875 1 - 508,000,000 1,252,622
The settlement median, probability range, total range and mean for all settlements collected for the years 1996 through 2002 are analyzed in the
table below.
Nationwide Settlement Trends (1996-2002)
The following table provides the distribution of settlements and the percentage of the total number within specific dollar ranges for the
years 1996 through 2002. Distribution of Settlements
Texas Median Awards for Employment Cases
(2002-Present)
Dolla
rs
Source: Information collected from Westlaw Data Base.
115,000
71,500
103,025
127,000
149,425
17,250
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Title VII Awards ADEA Awards ADA Awards W/C RetaliationAwards
TCHRA Awards FMLA Awards
EPL Considerations
• Nexus Between Retention $’s and Claims
→ Trends→ Employer size
• Relationship to Median
Verdicts/Settlements
• Impact→ Early claim evaluation→ Claim management paradigm
EPL Considerations (Cont’d)
• Duty to Defend Policies→ Pro’s
o Timing of financial contributiono Less worry about allocation
→ Con’so Limitations on lawyer selectiono Constraints of litigation guidelines
• Panel Counsel Evaluation
EPL Considerations (Cont’d)
• Settlement→ Usually require insured’s consent→ “Hammer” clause
• Tension between Economic and Reputational Concerns
→ Common denominator: competent counsel
EPL Considerations (Cont’d)
• Coverage Issues→ Defense costs included within policy limits→ Same policy forms unclear→ Notice of claim
• Exclusions→ “Bodily injury” only excluded→ “Bodily injury and personal injury” exclusion→ Exception to injury exclusion: emotional distress, mental anguish, and humiliation→ Assault and battery
EPL Considerations (Cont’d)
• Breach of Contract→ Within “wrongful act” definition→ Written contract exclusions→ Express contract exclusions→ Oral Contract exclusions
• FLSA Exclusions
EPL Considerations (Cont’d)
• Recap→ Purchase considerations:
o Packageso Inter-corporate coordination
→ Paradigmo Exposureo Retentiono Priceo Counsel relationshipso Scope of coverage
The Fair Labor Standards Act:Old Law, Brand New Regulations
Bill Belt Carrie Hoffman Ron Gaswirth
Collective Actions
Settlements and Judgments
• Shoney’s – $18 MM
• Radio Shack – $27 MM
• Eckerd – $ 8 MM
• Rite-Aid – $25 MM
• Albertsons – $37 MM
• Taco Bell – $13 MM
• Farmers Insurance – $90 MM *
• Pacific Bell – $28 MM
• Wells Fargo – $4.6 MM
Collective Actions
• Section 16 B– Court can order mailed notice
• No Rule 23– Opt-in only
– lower number of plaintiffs
• No res judicata– 2-year statute of limitations
– 3-year willful
Certification – 5th Circuit
• Similarly Situated– Lenient standard to be certified: similarly situated in
job and pay provisionally after close of discovery
– Stringent standard applied at de-certification stage
• Issues– Names and Addresses Produced– Court Ordered Notice
De-certification
• Opt-in Plaintiffs not similarly situated
What To Do?
• Audit– Exempt jobs– Off-clock work– Rules– Wait time– Travel time– Break time
• Make sure overtime is calculated correctly
New Wage and Hour Regulations
Brand New Regulations• DOL issued final regulations on April 20, 2004
• Became effective on August 23, 2004
• Not all of the proposed regulations remain, especially the elimination of the “discretion and independent judgment” duty requirement
• The increased salary requirements remain in the final regulations, but were increased further
• The final rule includes many significant changes that take into account 75,280 comments from the public
New “Fair Pay” Regulations• So-called “white collar” overtime exemptions
• Eliminates the short and long tests and replaces them with one “standard test” per exemption
• Increases the minimum salary paid to a white collar exempt employee (executive, administrative, professional)– From $155/week ($8,060/year) – Former long test– To $455/week ($23,660/year) – New standard test
New “Fair Pay” Regulations• Overtime exemptions do not apply to certain
classifications of employees, regardless of salary:
– “Blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy
– Police officers, fire fighters, paramedics, emergency medical technicians and similar safety and first responder employees
– Licensed practical nurses and other similar health care employees
• Highly Compensated Employees
Highly compensated employees performing office or non-manual work and paid total annual compensation of $100,000 or more (which must include at least $455 per week paid on a salary or fee basis) are exempt from the FLSA if they customarily and regularly perform at least one of the duties or responsibilities of an exempt executive, administrative or professional employee identified in the standard tests for exemption.
New “Fair Pay” Regulations
Executive Exemption• NEW: The employee must be compensated on a salary
basis at a rate not less than $455 per week;
• The employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise;
• The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and
• NEW: The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.
Administrative Exemption• NEW: The employee must be compensated on a
salary or fee basis at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
Professional Exemption - Learned
• NEW: The employee must be compensated on a salary or fee basis at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominately intellectual in character and which includes work requiring the consistent exercise of discretion and independent judgment;
• The advanced knowledge must be in a field of science or learning; and
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.
Professional Exemption - Creative
• NEW: The employee must be compensated on a salary or fee basis at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic endeavor.
To qualify for the computer employee exemption, the
following tests must be met:
- The employee must be compensated either on a salary or fee basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 per hour;
- The employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below;
Computer Employee
To qualify for the computer employee exemption, the
following tests must be met:
- The employee’s primary duty must consist of:- The application of systems analysis techniques and procedures,
including consulting with users, to determine hardware, software or system functional specifications;
- The design, development, documentation, analysis, creation, testing or modification of computer systems or program, including prototypes, based on and related to user or system design specifications;
- The design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
- A combination of the aforementioned duties, the performance of which requires the same level of skills.
Computer Employee (Cont’d)
Outside Sales• The employee’s primary duty must be making
sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
• The employee must be customarily and regularly engaged away from the employer’s place or places of business.
• Salary requirements do not apply.
Maximizing Lawsuit and Class Action Avoidance: Creating The
Right Work Environment and The Data To Prove It
Kenneth Broodo
LAWFUL, adj.Compatible with the will of a judge having jurisdiction.
LAWYER, n.One skilled in circumvention of the law.
LITIGANT, n.A person about to give up his skin for the hope of retaining his bones.
LITIGATION, n.A machine which you go into as a pig and come out of as a sausage.
-Ambrose Bierce, The Devil’s Dictionary
Maximizing Lawsuit and Class Action Avoidance
Maximizing Lawsuit And Class Action Avoidance: Creating The
Right Work Environment
Work Environment/CorrectionHR Organization and PurposeAnti-Discrimination Practices
Statistical Analysis/MeasurementData Collection and CodingMonitoring and Feedback
Decision-Making Processes/PreventionNotice and OpportunityStandards and Consistency
Work EnvironmentHR Organization and PurposeAnti-Discrimination Practices
“Sometimes a cigar-is just a cigar.”
-Sigmund Freud
A. HR Organization1. Functional Integration2. Role of Operations3. Ombudsman
B. Anti-Discrimination & Diversity Measures
1. Posted Non-Discrimination Notice
2. Publication of Revised EEO Policy
Statement
* Review of Value-Based Policy Issues
3. Diversity Training
4. Written Communications
5. Diversity Incentives
C. Discrimination Complaints and Non-Retaliation
1. Program Review2. Written Complaint and Investigation
Procedures3. Non-Retaliation Policy
Statistical Analysis
Data Collection and Coding
Monitoring and Feedback
“Boss, would you mind repeating everything you said after, ‘Max, here’s the plan.’”
-Get Smart
A. Review of In-House Analyses
B. Annual Statistical Analysis
1. Coding Key Information2. “Bad Manager” Report3. Protection of Privilege4. Commitment
Decision-Making Processes
Notice and Opportunity
Standards and Consistency
“As a matter of human history, Captain, it has always been easier to destroy, than to create.”
-Leonard Nimoy as Spock in The Wrath of Khan
A. Job Application and Assignment Procedures1. Job Posting2. Job Descriptions3. Job Assignment Criteria4. Job Path Information5. Job Applications Required6. Job Assignment Approval Form
B. Revision of Hiring Guidelines
C. Review of Compensation Decisions and Criteria
D. Revision of Job Performance Evaluation System
E. Job Testing
F.F. Job Opportunity TrainingJob Opportunity Training
1. Manager Trainee Program1. Manager Trainee Program
2. EEO Training2. EEO Training
3. Addition to New Hire Orientation3. Addition to New Hire Orientation
4. Posting of Training Opportunities4. Posting of Training Opportunities
5. Creation or Expansion of Job Rotation Program5. Creation or Expansion of Job Rotation Program
6. Creation or Expansion of Company “University”6. Creation or Expansion of Company “University”
7. Review of Recognition Programs7. Review of Recognition Programs
8. Creation or Expansion of Mentoring Program8. Creation or Expansion of Mentoring Program
1398075
FUTURE, n.That period of time in which our affairs
prosper, our friends are true and our happiness is assured.
-Ambrose Bierce, The Devil’s Dictionary
“We appreciate your business.”
-Ron GaswirthGardere Wynne Sewell, LLP
Maximizing Lawsuit And Class Action Avoidance: Creating The
Right Work Environment
Q&A Session
All Panelists