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SUPREME COURT ACCEPTS THREE (3) CASES SEEKING TO LIMIT LAWSUITS AGAINST BUSINESSES

The United States Supreme Court building - Washington, D.C., USA

There are three new law cases, impacting employers and business enterprises, that are on the docket of the Supreme Court this Fall.  These cases have been relatively ignored by the media and have the potential to greatly impact businesses.

Case I – Racial Discrimination

Comcast is attempting to stop a lawsuit by Entertainment Studios Networks Inc., which says racial discrimination is the reason it couldn’t get its channels onto the carrier’s cable systems.  At issue is a provision known as Section 1981, a Reconstruction-era law that bars racial discrimination in contracting.  Comcast says the appeals court improperly made it easier to sue under that statute than under other civil rights laws.  Entertainment Studios, owned by comedian and producer Byron Allen, says it tried for years to get its channels carried by Comcast.  The suit alleges Comcast officials refused to reach a deal, even while expanding offerings of less-known, white-owned channels.  The case was dismissed in federal court, but the 9th Circuit revived the lawsuit concluding that the plaintiff only had to show that race was a factor, not that it was the motivating or “but for” to prove discrimination.   The Supreme Court’s decision will decide whether this type of contractual discrimination lawsuit (which can be brought by an enterprise) must be proven by a tougher standard.

Case II – Age Discrimination

In Babb v. Wilkie, the Court will consider the standard of proof for federal government workers who bring claims under the Age Discrimination in Employment Act, as opposed to private-sector employees.  The federal government argued that a strict “but for” standard should apply to federal workers’ claims, meaning that the employee must show the adverse employment action would not have been taken “but for” the employer’s bias.  The employee in the case argued that a more lenient standard should apply that considers whether age bias was a motivating factor for the negative employment decision.

Case III – Employee Retirement Income Security Act

In Intel Corp. Investment Policy Comm. v. Sulyma, a former employee filed a lawsuit against Intel’s retirement plan committee for allegedly breaching fiduciary duties by making poor investments.   The committee defended based upon ERISA’s three-year statute of limitations to file such claims.  Intel argued that the lawsuit is barred because the employee received all the relevant plan investment information more than three years before he filed the complaint. But the employee argued that his claim is timely because he did not discover the problem until he read the investment information, filing the lawsuit.   A result against Intel will result in more claims against employer investment fiduciaries.

Contributed by guest author:  Spognardi Baiocchi LLP, a law firm dedicated to partnering with companies of all sizes to find solutions for labor, employment, human resources, and general business needs.  Contact:  www.psb-attorneys.com.

WageWatch Inc. offers accurate, up-to-date benefit surveys, salary surveys and pay practice data that will allow you to stay current.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, please call WageWatch at 888-330-9243 or contact us online.

 

Posted in Regulatory & Legal Updates on October 30th, 2019 · Comments Off on SUPREME COURT ACCEPTS THREE (3) CASES SEEKING TO LIMIT LAWSUITS AGAINST BUSINESSES

THE IMPORTANCE OF EMOTIONAL INTELLIGENCE IN HUMAN RESOURCES

Emotion Intel
Emotional Intelligence is about an individual’s ability to recognize and understand emotions and how it impacts their behavior and attitudes.  Individuals who have a high degree of emotional intelligence are more in tune with their own emotions as well as the emotions of others.

In the workplace, emotional intelligence involves being sensitive to and perceptive of other people’s emotions and having the ability to intuitively improve performance based on this knowledge.  Individuals with high emotional intelligence are observed and measured as having higher productivity, they are better at conflict resolution, and they build strong bonds with co-workers as they can more easily understand the desires and needs of other people.

In the modern workplace, it is important to have open communication, teamwork, and mutual respect among employees and their supervisors.  Emotional intelligence bears an important impact on the self-development of the manager and their leadership qualities.  Its impact is visible in building positive relations and gaining the emotional commitment of employees.  At a higher level, emotional intelligence helps to strengthen organizational culture, sharpen its resilience, and stretches its flexibility.  Managers who possess emotional intelligence approach supervisory responsibilities from a different perspective than an authoritarian manager. They understand the importance of communicating effectively with staff members, and of treating each employee with respect.

Human Resources can help create a more emotionally intelligent workforce by hiring employees who exhibit a high emotional intelligence, by evaluating employees using emotional intelligence criteria, by integrating emotional intelligence into performance management systems, and by offer training to improve emotional competence.  An emotionally intelligent organization in which employees share strong connections and can work more effectively with each other should result in greater productivity.

Managers and business owners can’t let themselves lose sight of the fact that their employees are people, with real lives and emotions that impact how they think, feel, and act.  Managers with emotional intelligence understand that their staff members are people first and workers second.  Incorporating emotional intelligence into your personal and organizational management philosophy may be the best way to retain key employees and help with overall organizational success.

WageWatch offers accurate, up-to-date HR metrics, benefit survey data, market compensation data, and salary reports that will allow you to stay current with the times. This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards. The PeerMark™ Wage Survey is a custom-built survey tool that allows individual survey participants to select their competitive set for comparison purposes.  Our experienced compensation consultants can assist with your organization’s compensation needs.  We can help you ensure internal equity and compliance with regulations as well as help you structure your compensation programs to support your company’s business strategy and objectives.   For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

HUMAN RESOURCES ROLE IN MERGERS AND ACQUISITIONS

Merge-Acquire

Mergers and acquisitions are extremely challenging and even chaotic events.  Therefore, it is critical that everyone involved has a clear understanding of their role in the process.  Mergers and acquisitions have become the norm in the business world and are often necessary for survival.  Almost every major company in the US today has or will experience a major acquisition.  There is a subtle yet distinct difference between a merger and an acquisition.  A merger is when two separate companies merge into one new entity.  An acquisition is when one company buys the assets of another company.  A merger or acquisition can be desired due to many different strategic reasons including positioning in the market, acquiring another company’s areas of strength or expertise, acquiring capital, diversification and short term growth.  There are several phases or steps in the acquisition process and human resources will typically be involved in at least 2 to 3 of these phases, including the due diligence and investigation process and the post-merger integration process.

The human resource role in the due diligence and investigation process is to perform a thorough review of all human resource contracts, benefit plans, plan documents, systems, personnel, employment records, all forms of compensation, policies and procedures, especially related to human resource regulations that relate to all human resource disciplines including compensation, benefits, recruiting, employee relations, training and development, and payroll and HRIS.  Human Resources will help to determine the organizational structure and staffing models for the new organization.  Some other important items that fall under the Human Resources umbrella are wage and hour or other compliance claims, employment litigations, collective bargaining agreements, any FMLA, OSHA, Workers Compensation, EEOC and OFCCP compliance issues.

Transition issues need to be discovered and addressed, for example, pay levels between the two organizations may be very different and a cost analysis may be needed to determine the cost of bringing pay levels more inline between the two merging entities.  Other transition issues that often need to be addressed are transitioning pay increase and performance review cycles, differences between benefit levels in health care and retirement plans.  Most items will need to be addressed immediately, and some items can be completed during the first or second year following the merger or acquisition.  For example, if the acquisition occurs in the first quarter and your merit increases are done in January, you may be able to wait until the following January for this transition.  Conversely, it will be highly desirable to transition the acquired entity employees immediately to your health and welfare plans rather than take on the administrative burden and ownership risk of additional plans.

Human Resources is also responsible for layoffs, stay bonuses, culture differences, and synergies and will play a key role in the orientation and welcoming of the new employees.  These are just a few key items on the Human Resources Acquisition Checklist.  And each item has its own list of key points and issues that must be addressed.  While most of the transition work will happen prior to the closing date, the job of transitioning employees into your policies, pay models, practices, procedures, and culture does not end at transition date and typically continues for two to three years following the transition date and requires continued review at the management level.

Change can be challenging and demanding.  With over 5,000 properties in our lodging compensation database, 150 casinos, and 125 hospitals and clinics, we regularly see properties being acquired, divested, and rebranded. Consolidations are occurring at a rapid pace in the healthcare industry as well as with hospitals buying physician groups and primary care practices. There are numerous human resources concerns to address every time a property changes hands. WageWatch consultants can guide you through the process of integrating two or more compensation models, rebalancing grades and ranges, examining internal equities between plan documents, developing a market-based approach to resolve inconsistencies, and helping you along the way with all your transition needs.  For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

WHEN TO EMPLOY SHORT-TERM AND LONG-TERM INCENTIVES

An Incentiveemployee compensation plan should provide a competitive wage and reward employees fairly and equitably for behaviors while accomplishing goals and objectives for the organization.  Compensation is the reward an employee receives in return for his or her contribution to the organization.  Basic components of a compensation package include base salary, incentives, and benefits.

Organizations implement incentive plans to help reach overall goals and objectives.  Incentive plans range from variable pay plans to prizes and recognition awards.  Incentive plans can motivate employees to go beyond expectations and produce results that contribute to business success.  They also can attract new talent and encourage company loyalty.  For an incentive plan to be effective, the goals must be obtainable.

So how do you determine whether a short-term or long-term incentive is appropriate?  Short-term incentives are used to create a focus on short-term or immediate goals, and align rewards with individual and business performance.  Long-term incentives are typically designed for executives who make strategic decisions for the company.  They can ensure focus on what’s best for the organization’s future outcomes by placing importance on medium and/or long-term goals and creating a sense of ownership of those goals.  Successful incentive plans can also help organizations align rewards with shareholder interests, and help retain key talent.

Short-term incentives can be for all employee levels from entry-level to middle management to the executive level and they can be large or small and can cover a week, month, quarter, or year of performance measurements and goals.  Short-term incentives can create a better work environment and motivate employees to work to their greatest potential.  Without short-term incentives, employees may feel that their work is unappreciated, and morale can be low.  Short-term incentives align employees to work for the overall success of the company and can clearly define an employee’s specific role in contributing to that success.  Short-term incentives such as prizes, free airline tickets or hotel stays, tickets to events, or a paid day off, can have high impact.  Short-term incentives can be individual and/or team-based.  Rewarding employees for clearly defined goals can go a long way to creating happy employees who work well alone and together striving for success.

It is important to use both short and long-term rewards to produce desired results.  Incentive programs that are carefully and strategically crafted and aligned with company goals and timeframes should lead to more productive, motivated, and loyal team members.  Retaining good employees saves organizations the expense of recruiting and training new workers.

At WageWatch our compensation consultants are focused on your organization’s compensation needs and ready to help you ensure that your compensation programs are supporting your company’s business strategy and objectives.  WageWatch also offers accurate, up-to-date benefit surveys, salary surveys and pay practices data that will allow you to stay current with the times.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, including consulting, salary survey data, benefit survey data and market compensation reports, please call WageWatch at 888-330-9243 or contact us online.

HOW ENFORCEABLE IS YOUR NON-COMPETE AGREEMENT?

Non-Compete

Does your organization have a non-compete agreement in place?  If so, has it been reviewed recently?  Non-compete agreements are driven by state laws.  Over the past year, there have been a few states that have changed their laws, with changes taking effect next year. The revisions that states are enacting move to restrict using unreasonable non-compete agreements with employees.

Washington, New Hampshire, Massachusetts, Maine, Maryland, Oregon, and Rhode Island have modified their non-compete agreements this year and are leading the way in non-compete agreement reform.  These states have not adopted a uniform approach, but each state provides some direction to other states that may be considering reform.  Reasonable non-compete agreements are helpful and often necessary for employers to hire individuals without risking that they will then lose their customers if an employee leaves and tries to take clients with them.  However, some agreements go too far and have become unreasonable.

The Washington Statute, effective January 1, 2020, will be unenforceable for employees earning less than $100,000 in total annualized compensation or independent contractors earning less than $250,000 per year.  Non-compete agreements are unenforceable for a period greater than 18 months and the terms must be disclosed to prospective employees no later the time the employee accepts an offer of employment.  In addition, the statute has several employee protection mechanisms in place, such as requiring an employer to pay an employee’s legal fees and damages should they seek to enforce an unreasonable non-compete agreement.

Potential areas to revise with a non-compete agreement include:

  • A threshold for an employer’s salary, anyone making less than the stated amount are excluded from the agreement (i.e., employees making less than $75,000 are excluded from a non-compete agreement)
  • Length of employment; an employee could not be held to a non-compete agreement if they were not employed for at least a year by the employer or terminated or laid off without misconduct
  • Employees faced with an employer that seeks to enforce an unreasonable agreement should be penalized by having to pay the employee’s legal fees and a small number of damages.  It may be a good time to review your non-compete agreement, especially to determine if your agreement is currently relative to any changes in the law that governs it.

WageWatch offers accurate, up-to-date benefit surveys, salary surveys and pay practice data that will allow you to stay current.  This information is highly beneficial in creating the best salary and benefits packages that meet or rival the industry standards.  For more information on our services, please call WageWatch at 888-330-9243 or contact us online.