Refusing to Give Employees a Reason at the Time of Termination May Increase Litigation Costs.

Although Florida employers have no obligation to give a reason or cause for terminating their “at will” employees, their failure to give a reason at the time of termination may increase litigation costs. In Mock v. Bell Helicopter Textron, Inc., the Eleventh Circuit held that the employer’s refusal to give the employee a reason on the day of his firing was enough to preclude dismissal and require a jury trial. The court reasoned that a jury could reasonably find that the employer’s evidence of unsatisfactory job performance (including a post-termination letter stating that reason) was not the real reason for the discharge based on the employer’s refusal to give that reason at the time.

The Good, the Bad, and the Ugly of Severance Agreements.

Employers must proceed with caution in drafting, presenting, negotiating, and executing severance agreements with current or former employees. A carefully drafted and properly executed severance agreement can provide a win-win exchange of financial benefits, release of liability, confidentiality, non-compete, non-disparagement for both parties. However, hastily drafted agreements may not be enforceable at all, particularly if the agreement purports to release certain statutory rights that cannot be waived or if the employer has failed to give certain employees adequate time to review, seek counsel and revoke the agreement.

Beware of Using “Form” Non-Competition Agreements

The ability to enforce a non-competition clauses often turns on what some unwisely deem “form” contract provisions dealing with “consideration”, “choice of law”, “merger” of prior agreements and “successor and assigns.” To avoid common pitfalls, employers should have existing agreements reviewed for enforcement problems and consult with employment counsel about drafting new ones.

Utilizing Human Resources Personnel, Inside Counsel or Outside Counsel for Workplace Investigations.

Deciding who should investigate a workplace complaint is critical to an effective defense against an EEOC charge or other employment claim. Management should consult employment counsel on how the selection of a particular investigator will implicate the following considerations: 1. preserving attorney-client privilege to investigation itself; 2. preserving attorney work product doctrine protections for investigative materials; 3. maximizing perception (by claimant, witnesses, EEOC investigator or future jury) that investigator was independent and able to conduct a fair and impartial investigation of alleged wrongdoer; and 4. maximizing perception that investigator had sufficient knowledge of anti-discrimination laws and employer’s polices to provide a full and complete report on claim

Maintaining Organized Personnel Files Can Ultimately Reduce Unnecessary Fines.

The importance of maintaining organized personnel files is widely overlooked. Many employers, however, are unaware of federal and state laws that require employers to maintain personnel records for various time periods. Maintaining proper personnel files will avoid fines for noncompliance and also become the foundation for defending against unfounded claims of wrongful termination, unpaid overtime or unfair denial of a job application or promotion opportunity. Incomplete personnel files, however, may turn into evidence for the plaintiff in a lawsuit.

Accrued Vacation and Bonus Pay May Be Deemed Unpaid Wages

Under Florida’s Labor Code, accrued but unused vacation and bonus pay is deemed “unpaid wages” and a court may award court costs and attorneys’ fees to a former employee who wins a lawsuit for unpaid wages. Further, an employer’s failure to pay final wages promptly by the next regular pay date may be deemed a violation of the FLSA.

Avoiding Botched Workplace Investigations.

When faced with a complaint of workplace discrimination or other misconduct, employers sometimes wait too long to start an investigation, wrap-up an investigation too early, fail to ensure all staff members are safe pending an investigation, fail to interview all relevant witnesses and/or select the wrong investigator. Management should consult employment counsel to determine how the selection of a particular investigator (general manager or H/R director, H/R staff, in-house counsel outside counsel or another outside investigator) will maximize the company’s interests in preserving its right to assert attorney-client and work product privileges and in promoting confidence (by claimant, witnesses, EEOC or future juror) that the outcome of the investigation is fair and knowledgeable.

Undocumented Workers May Sue to Recover Unpaid Wages Under FLSA (Federal Wage and Hour Law).

In a March 2013 decision of the U.S. Circuit Court of Appeals, Eleventh Circuit, the court rejected arguments of a hurricane shutter company that 7 undocumented workers were not entitled to recover unpaid overtime compensation based merely on their status as “undocumented”.   To the contrary, the court held that undocumented workers were covered as “employees” under the FLSA and, therefore, were entitled to damages in an amount equal to twice their unpaid wages. The court also rejected arguments that the workers could not recover based on their own failure to report income to IRS and their use of false Social Security numbers; the court reasoned that the workers did not actively participate in the particular unlawful activity at issue in the lawsuit. Also noteworthy, the court held that two of the company’s directors were liable as individuals even though they were not officers of the company because the directors exercised “sufficient operational control” over day-to-day operations for such liability.

Employers May Terminate Bona Fide “Exempt” Employees Who Refuse to Work Over 40 Hours Per Workweek

In an Opinion Letter, the Dept. of Labor Wage and Hour Division confirmed that employers may require bona fide “exempt” executive, administrative, or professional employees to work more than forty (40) hours in a workweek; and employers may discipline (including discharge) such employees if they consistently fail to work the required number of hours. However, employers should consult counsel before implementing such hour-of-work requirements in order to avoid violating other FLSA requirements, including the “no-docking” rule against improper deductions from salaries, and the rule permitting suspensions only for violations of “workplace conduct rules”.



Courts Generally Enforce Agreements to Arbitrate Employment Disputes But Not Poorly Drafted Ones.

Employers are increasingly requesting employees to arbitrate all employment disputes as a condition of employment or continued employment. Courts generally enforce such agreements pursuant to the liberal federal policy (under the Federal Arbitration Act) favoring arbitration agreements. In Walthour v. Chipio Windshield Repair LLC. (March 21, 2014), the Eleventh Circuit U.S. Court of Appeals joined other federal courts in holding that employees may even enter into arbitration agreements that waive their right to bring collective actions under the FLSA (federal wage and hour law). However, courts refuse to enforce poorly drafted arbitration clauses where, for example, employees are asked to waive rights without adequate consideration, where an employer retains a unilateral right to modify the agreement without notice and where the agreement purports to restrict some non-waivable substantive right. In Hernandez v. Colonial Grocers, Inc. (October 25, 2013), Florida’s Second District Court of Appeals refused to enforce an arbitration agreement where the arbitration clause was drafted to require the losing party to pay for all attorneys’ fees. The Hernandez court reasoned that the arbitration clause infringed upon the employee’s substantive right (under the FLSA) not to be exposed to paying the employer’s attorney’s fees.

Religious Discrimination Claims on the Rise.

Religious discrimination charges filed with the EEOC are on the rise. Title VII prohibits harassment and discrimination because of one’s religion as well as retaliation against an employee who complains of such misconduct. To minimize the risk of costly litigation, employers should 1. Revise employee handbooks to prohibit religious harassment and discrimination in the same manner as policies and procedures covering sex, race and other unlawful discrimination; 2. Make sure H/R managers are trained to handle complaints of religious harassment or discrimination and to fairly consider requests for reasonable accommodation of religious observances; and 3. Avoid rigid enforcement of workplace dress or appearance requirements merely based on the preferences of customers without due consideration of the EEOC Compliance Manual.

Work Breaks Generally Not Required But Employers Must Follow Strict Rules When Breaks Are Offered.

Except for the breaks required for minors and the newly required lactation breaks for mothers after the birth of a child, employers are not generally required to offer work breaks. But for employers that do give their employees a break, they must follow strict rules to avoid unpaid overtime lawsuits. For example, an employer must continue to pay employees if a “rest break” is 20 minutes or less, and also if a “meal break” is less than 30 minutes. Employers still need to pay for meal breaks where the employee is not completely relieved of duties for the entire break. Having employees acknowledge in writing the time taken for breaks is essential to avoid costly litigation over false claims.

Joint Ownership of Property With Spouses, Children or other Heirs May Not Be A Smart Substitute for a Will or Trust.

Spouses generally benefit from owning their home as tenants by the entirety. However, joint ownership of property (OR insurance policies, bank and retirement accounts) with children, heirs or unrelated persons may result in disadvantages such as: 1. the loss of “stepped-up” basis on capital gains taxes, 2. the loss or diminution of the homestead exemption, 3. the negative effects of the creditor problems by one of the joint owners, 4. the loss of control because all joint owners would be required to sign for a sale and other transactions, and 5. the inadvertent frustration of an agreed estate plan when, for example, one child chooses not to share with other siblings after the parent dies.


A Smarter Solution to Smartphones? Security Issues Related to Employees’ Personal Use of Work-Provided Smartphones.

In response to concerns regarding security issues arising from employees’ personal use of work-provided smartphones, the solution of a split-personality smartphone may put those fears to rest. CNN has reported that many companies, such as AT&T, are presenting the idea of dual purpose smartphones. “Toggle,” for example, is a service that “separates an Android phone into personal and work environments,” where the user can easily switch between the two. The personal mode has no restrictions, while the work mode is secured and can only run approved applications. Data for both modes is kept separate, and the entire system is managed company-wide from a central Web portal. While only time will tell whether these new services produce their desired result, some posit that the dual-role technology could become an issue for trade secret and/or misappropriation litigation. LG, Samsung, Blackberry, and iPhone are also in the running for developing quality split-personality platforms.

Dress Code Requirements may Violate Title VII of the Civil Rights Act.

Dress code requirements, such as prohibiting all tattoos and body piercing, may be seen as religious discrimination under Title VII.   Title VII requires employers with 15 or more employees to “reasonably accommodate employees’ sincerely held religious practices unless doing so would impose an undue hardship on the employer.” Many religious practices today include the use of tattoos and body piercing in visible locations. Prohibiting such practices is possible, but such policies should be narrowly drawn in accordance with legitimate business interests.

Determining How to Pay Hourly Employees for Travel Time

Often employers believe that hourly employees don’t have to be paid for time spent away from their regular duties and travelling between work locations or attending work functions and seminars. However, wage and hour laws contain very technical rules that govern when an employee must be paid for travel times before, during, and after an employee’s regular work day. Employers who are unfamiliar with these legal requirements could face liability for up to 3 years of unpaid regular and overtime wages.

How One Word Can Change Everything: Forum Selection in Non-competition Agreements.

A forum selection clause within a contract allows parties to agree that any litigation resulting from a conflict within a contract will be conducted in a specific forum. In some circumstances, an employee and his or her new employer, a non-signatory, may be bound to the terms within a binding non-competition agreement with a prior employer that contains an exclusive forum selection clause, based on the mandatory or permissive language used regarding such exclusivity as exemplified in cases East Coast Karate Studios, Inc. v. Lifestyle Martial Arts, LLC and A-Ryan Staffing Solutions, Inc. v. Ace Staffing Management Unlimited, Inc. Moreover, as illustrated in Deloitte & Touche v. Gencor Industries, Inc., non-signatories may also be bound by an employee’s former agreement. Attorneys for clients who require forum selection clauses in contracts should 1) draft clauses carefully to increase certainty in selection of both forum and governing law; and 2) ensure that forum selection and choice of law provisions implement the client’s forum expectations as to exclusivity and as to entire range of interactions and possible claims between parties, not just specifics of contractual agreement. Additionally, it is imperative to question potential employees as to whether they have signed any such agreement with a previous employer. If so, it is necessary to review the agreement and determine its validity and scope, applying many of the principles in the aforementioned cases.

Firing After Filing: Illegal Retaliation under Florida Law?

In the last couple of years, cases where an employee is fired after getting injured on the job and subsequently filing a Workers’ Compensation Claim are becoming more prevalent. However, under Section 440.205 of the Florida Statutes (which specifies that following a work-related injury, a covered employee may file a claim under the Florida Workers’ Compensation Law and receive medical and supplemental payments while unable to work), this may constitute illegal retaliation. In order to state a claim for retaliation, the employee must prove that 1) he or she engaged in a statutorily protected activity; 2) an adverse employment action occurred; and 3) the adverse action was causally related to the employee’s protected activity, elements addressed in the case of Ortega v. Engineering Technology Services, Inc. However, this is only applicable when an employee has been discharged because he or she filed a Workers’ Compensation claim and is not relevant when an employee has been discharged for other legitimate business reasons, such as unsatisfactory job performance or excessive absenteeism.

Employers And Supervisors May Be Sued For Tolerating or Encouraging “Off-the-Clock” Work.

Because the FLSA (federal wage and hour law) requires payment for all time that nonexempt workers are “suffered or permitted” to work regardless of whether it is recorded on a time sheet or whether it occurs outside of a scheduled workday, employers should implement training and policy to avoid all “off-the-clock” work. The following are some preemptive strategies that may be appropriate to implement: 1) Revise employee handbooks to communicate that all time must be recorded and that the company has zero-tolerance for violations and prohibits any retaliation against those who report violations; 2) Re-train all management and supervisors to notify them that they cannot require, encourage or even suggest that a nonexempt employee work off-the-clock; and 3) Require timesheets with signed acknowledgement from each employee and supervisor that all time worked has been recorded.

Joint Ownership of Property With Spouses, Children or other Heirs May Not Be A Smart Substitute for a Will or Trust.

Spouses generally benefit from owning their home as tenants by the entirety. However, joint ownership of property (OR insurance policies, bank and retirement accounts) with children, heirs or unrelated persons may result in disadvantages such as: 1. the loss of “stepped-up” basis on capital gains taxes, 2. the loss or diminution of the homestead exemption, 3. the negative effects of the creditor problems by one of the joint owners, 4. the loss of control because all joint owners would be required to sign for a sale and other transactions, and 5. the inadvertent frustration of an agreed estate plan when, for example, one child chooses not to share with other siblings after the parent dies.

Knowing the Dos and Don’ts of Criminal Background Checks

While many employers rely on their ability to perform background checks to ensure a reliable workforce, the U.S. Equal Opportunity Commission (EEOC) has recently cracked down on “blanket policies” concerning who becomes ineligible for a job based merely on a criminal background check. The EEOC has opined that such blanket policies may unintentionally result in discrimination against some protected categories of potential employees. Employers can avoid such discrimination claims by using background checks in a manner that is narrowly tailored to achieve actual business needs.

Employers Should Reasonably Accommodate Religious Practices That Do Not Cause “Undue Hardship”

EEOC charges alleging religious discrimination have risen dramatically in last 15 years. Religious accommodation disputes generally occur when an employee’s work schedule conflicts with a religious observance and when the work dress code is inconsistent with an employee’s religious dress and grooming obligations. To avoid many such conflicts, employers should consult counsel to establish a clear written policy to handle requests for religious accommodations and make reasonable efforts to find a compromise with employers regarding scheduling, dress or grooming before taking any adverse action.

Costly “Technical” Violations of Wage and Hour Laws

It is difficult for administrative staff with part-time H/R duties to intuit the right answer to payroll requirements under the FLSA (Fair Labor Standards Act). Properly classifying employees as “exempt” or “non-exempt”, determining payroll deductions and calculating the correct “regular rate” for overtime require technical knowledge of DOL regulations and Opinion Letters. For example, the time an employee spends on work-related travel is generally not compensable if done outside of regular work hours, but is compensable (possibly at a lower rate) if during work hours even if on weekend days. Employers should develop such payroll policies in consultation with counsel to avoid paying thousands in attorney fees to resolve minor underpayments for “technical” violations.

Private Settlement Agreements and General Releases NOT Enforceable To Resolve Unpaid Wage or Overtimes Claims.

Wage and hour lawsuits are still among the most frequent claims by current and former employees. Resolving such claims with out-of-court settlements cannot be guaranteed because the federal wage and hour law (“FLSA”), like many employment statutes or related regulations, does not allow employees to waive their rights to receive full relief without court approval or Department of Labor supervision. One judge in the Middle District of Florida cautioned that “an employer undertakes a private resolution of an FLSA dispute at his peril” because the employer remains liable for any unpaid wages, attorney’s fees, court costs and liquidated damages that may be “compromised” in such a settlement.

Social Media Posts May Constitute Protected “Concerted Activity.”

Increased interconnectivity across the social media world has clouded the clarity regarding an employee’s right to post information critical of his or her employer or coworkers and the subsequent ability of the employer to institute policies to restrict publication of that information. Under Section 7 of the National Labor Relations Act (NLRA) (which emphasizes the right of employees to engage in “concerted activity”—when an employee acts “with or on the authority of other employees and not solely by and on behalf of the employee him/herself”), the National Relations Labor Board (NLRB) issued a report on the lawfulness of discharging employees based on a violation of the employer’s social media policies. According to the NLRB, if multiple employees were involved in the discussion, and the discussion focused on a term or condition of employment, such conversation might be permissible and protected under the NLRA. Specifically, the particular language used by the employee in the social media post is scrutinized to determine whether that individual sought to initiate or induce group action. Ultimately, there is no “one-size-fits-all” approach as to whether social media comments may be construed as simply unprotected “venting” or as protected “concerted activity” considering that the NLRB’s determinations have at times proven inconsistent and unpredictable. It may be beneficial to review previous cases on the issue for guidance.

Employees May Still Sue Notwithstanding Severance Agreements With General Releases.

Many employment statutes or related regulations prohibit or limit the right of employees to waive statutory rights. For example, employees may not waive their rights to receive minimum wages or overtime pay under the Fair Labor Standards Act without court approval or Department of Labor supervision. Similarly, regulations issued under the Family Medical Leave Act provide that employees cannot waive their FMLA rights. Certain procedures must be followed for employers to obtain a valid waiver of potential age discrimination claims under the Age Discrimination in Employment Act. Employers may not be getting a valid waiver of such claims with do-it-yourself general releases.

Evaluating whether “I just need a simple will!”

A so-called “simple will” is NOT always the best estate planning option. The overall value of one’s personal assets is just one factor to be considered. Other considerations include, but are not limited to: 1
. avoiding probate costs; 2. minimizing estate, gift and generation skipping taxes; 3. appointing someone to care for minor children or disabled relatives; 4. choosing a trustworthy personal representative/executor; 5. planning for any long term disability; 6. planning for the possibility that one’s spouse will renounce the will and opt for an “elective share”; and 7. using so-called “will substitutes” to give certain property directly to another person, immediately upon death.

The Department of Labor and IRS crack down on employee vs. contractor designation

On July 15, 2015, The Department of Labor narrowed the definition of “contractor”, which will result in the Department designating more workers as employees as opposed to independent contractors. The classification of a worker as an employee or contractor is determined based upon how integral their work is to the business, the skills required for the work, the permanency of the relationship, and other factors. Misclassifying employees as contractors could result in a costly lawsuit for payment of up to 3 years of back wages and overtime.

Thinking Ahead: Four Quick Tips to Running a Smarter Business.

A few simple preemptive tricks can ensure that your business runs smoothly even in today’s tough economy: 1) Writing up a corporate governance agreement, such as by-laws, shareholder agreements or operating agreements to clarify responsibilities and reduce the likelihood of litigation between owners; 2) Drafting customer agreements to include reasonable limits on liability for direct damages and limits or waiver of consequential damages; 3) Requiring a signed confidentiality agreement before disclosing confidential information to employees, vendors or potential business partners; and 4) Auditing employees’ job responsibilities and descriptions each year to verify exempt/non-exempt classification and implementing consistent and reliable time-keeping mechanisms to avoid overtime claims.

Accommodating Pregnant Workers

In the recent case of Young vs. UPS, the U.S. Supreme Court ruled that employers would have a high legal burden to pass if any of their policies provided accommodations to some employees but not to pregnant ones. If an employer has a policy for accommodating some employees under the Americans with Disabilities Act or for any other reason, it is important to consider whether the accommodation should also be available to pregnant employees.

Homestead Property: Handle With Care!

Florida has unique constitutional and statutory provisions governing who may inherit homestead property. Before finalizing a last will or other estate planning documents, homeowners should consult counsel on the following, among other, considerations: 1. Does a home qualify as a constitutionally protected homestead?; 2. Will a spouse or minor children have rights to inherit all or some portion of the homestead; 3. Does it make sense for the owner(s) to sell, mortgage or make a lifetime gift of the homestead, or alternatively to change the form of ownership to a “tenancy by the entirety”; and 4. Is the intended beneficiary the surviving spouse or “heir” of the owner who could inherit the homestead and be exempt from forced sale to pay any unpaid debts of the deceased owner.

Unpaid Internships must Comply with Six Federal Requirements to Avoid Violating Wage and Hour Laws.

To have unpaid interns, employers must comply with six federal legal criteria. Three such criteria most often overlooked are: (1) internships must pertain to the training unpaid interns receive at their vocational schools, (2) employers must not receive immediate advantages by having such interns, and (3) unpaid interns must not displace paid workers. If any of these or the other three criteria are not satisfied, the intern will be considered an employee and they must be paid minimum wages and overtime. An official at the Labor Department has warned that there are few circumstances in which a for-profit employer can have an unpaid intern and still comply with the law.