The Coles Firm P.C.

In The News

2011-05-24T09:10:00.003-05:00

Admittedly, we have been a little quiet here lately at The Coles Firm P.C. blog. Between our case load, some new projects we've been working on, and a hectic travel and event schedule, we have not been able to blog like we would like. That said, we are back.

To ease back into things, we thought we would highlight some employment issues that have been in the news lately and see if we can generate some feedback and comments from our followers.

First, The Equal Employment Opportunity Commission filed a lawsuit in El Paso, Texas against Starbucks for firing a dwarf. The former employee in question requested a stool to perform her job and Starbucks felt she posed a danger to customers and coworkers. The EEOC claims Starbucks' actions constitute disability discrimination. What do you think? Do you think Starbucks was right that the request posed a danger to customers and coworkers? Do you think Starbucks' actions constitute disability discrimination?

The second thing we noticed was an MSNBC article highlighting a growing trend among employers regarding a four day workweek. The trend actually has less to do with work-life balance and more to do with financial issues driven by the tough economy and budget concerns. The article also noted Utah's decision to transition all state workers to four day workweeks. In Utah, employee satisfaction improved, Utah experienced energy savings, and environmental issues improved. What are your thoughts? Is a four day workweek possible for all employers and companies? Does it make sense? Should we incorporate other flex schedules in the workplace? Is the five day workweek simply outdated?

Let us know what you think about these and other issues. We look forward to hearing from you.

Coles Corner Winning Wine: April 2011 (Archive)

2011-05-24T09:02:00.002-05:00

Santa Margherita’s Prosecco – Often called “Poor Man’s Champagne,” Prosecco is typically sweeter than champagne. Santa Margherita’s Prosecco is a brut style sparkling wine more reminiscent of champagne than a traditional Prosecco. This Prosecco is a less expensive alternative to some higher end champagnes.

Coles Corner Winning Wine: March 2011 (Archive)

2011-04-21T13:56:00.002-05:00

Bodega Tamari Reserva. 2009 Malbec. This Argentinian Malbec starts and finishes smooth, making this bottle of wine an easy red. Tamari’s subtle fruit flavors create a great table wine to enjoy at any time. We suggest pairing this wine with a sweet nutty cheese, such as a Manchego.

Coles Corner Winning Wine: February 2011 (Archive)

2011-03-14T09:40:00.001-05:00

Hip Chicks Do Wine Drop Dead Red – A true Pacific Northwest wine, Hip Chick’s Drop Dead Red combines Oregon and Washington grapes into a bold red blend. This decidedly smooth blend carries a hint of smoke that lingers well after your first sip. You can’t miss this bottle on the shelves since Hip Chicks continues with their clever and witty labels and descriptions. Pick up a bottle tonight and enjoy.

Fifth Circuit Court of Appeals Rules that Private Employer Can Refuse to Hire Individual Based on Individual's Previously-Filed Bankruptcy

2011-03-07T11:54:00.005-06:00

Chapter 11 of the United States Code section 525(a) prohibits a governmental unit from denying employment to an individual who has filed bankruptcy. The governmental unit also is prohibited from terminating the individual’s employment or “discriminat[ing] with respect to employment against” an individual who has filed bankruptcy.

A subsection under this Chapter prohibits private employers from “terminat[ing] the employment of, or discriminat[ing] with respect to employment against” an individual who has filed bankruptcy. This subsection is silent as to whether “discriminat[ing] with respect to employment against,” includes refusing to hire based on an individual’s previously-filed bankruptcy.

On March 4, 2011, the U.S. Court of Appeals for the Fifth Circuit held that Chapter 11 of the United States Code section 525(b) does not prohibit a private employer from refusing to hire an individual based on the individual’s previously-filed bankruptcy. The decision is Burnett v. Stewart Title, Inc., Case No. 10-20250. The facts are straightforward and quite common. Ms. Burnett applied for a job with Stewart Title, Inc. and Stewart Title, Inc. offered Ms. Burnett the job contingent on passing a drug test and background check. During the background check, Stewart Title, Inc. discovered Ms. Burnett previously filed bankruptcy. For that reason, Stewart Title, Inc. revoked its employment offer. Ms. Burnett then filed a discrimination lawsuit under 11 U.S.C. § 525(b).

In dismissing Ms. Burnett’s lawsuit, the Court noted section 525(a) specifically prohibited the government from refusing to hire based on bankruptcy status, but Congress omitted this language as to private employers in section 525(b). Accordingly, the Court reasoned Congress’ omission indicated an intentional differentiation between government and private employers’ rights to discriminate. As such, the Court determined that Ms. Burnett could not bring a lawsuit based on the claim Stewart Title, Inc. (a private employer) refused to hire her based solely on the fact she previously filed bankruptcy.

Coles Corner Winning Wine: January 2011 (Archive)

2011-02-18T09:18:00.002-06:00

Ninety Cellars’ Lot 17 Merlot – Deceptive in name, Lot 17 Merlot blends Merlot, Cabernet Sauvignon, and Cabernet Franc resulting in pleasantly smooth and smoky opening note. This blend provides the traditional bold flavor of a Merlot, but lacks the dryness often associated with a Merlot. We recommend this Merlot to those of you who believe a Merlot should be left on the rack.

New Health Care Law Contains Provision to Amend FLSA

2011-02-09T23:12:00.005-06:00

The new health care bill recently signed into law by President Barack Obama contains a little known and often overlooked provision about which all employers should be aware. The provision amends the Fair Labor Standards Act (FLSA) and employers now will be required to provide women with breaks to breastfeed, as well as a location to breastfeed.

Such requirements already exist in sixteen states but the requirement now will be a federal law. Under the law, employers must provide reasonable time and a place for nursing mothers to express breast milk for one year following the child’s birth. The location must be something other than a bathroom, shielded from view, and free from intrusion by coworkers and the public.

In light of the potential burden imposed and the logistical concerns (such as how to provide bus drivers, postal workers, police officers and other mobile workers a place to breastfeed), the Department of Labor Wage and Hour Division is seeking public comment before it begins writing guidelines for the new law. The public can comment through February 22, 2011 at http://www.regulations.gov/#!home. We encourage employees and employers alike to comment and provide their perspectives on this new law.

New U.S. Supreme Court Decision Regarding Retaliation

2011-01-25T13:28:00.000-06:00

Yesterday, the United States Supreme Court ruled that an employer violated Title VII when the employer terminated an employee’s fiancée three weeks after the employee filed an EEOC Charge against the employer. See Thompson v. North American Stainless, LP, 2011 WL 197638 (Jan. 24, 2011). The Supreme Court confirmed that although the fiancée did not engage in a protected activity, the employer could not retaliate against the fiancée because the action might have “dissuaded a reasonable worker from making or supporting a charge.” This decision should not surprise an employer, but the Supreme Court did note the difficulty with determining the type of relationship needed in this circumstance. Will a boyfriend/girlfriend relationship support a retaliation claim? What about very close friends? While the Supreme Court refused to draw a line, the Supreme Court stated firing a close family member almost always equals retaliation, while firing a “mere acquaintance” almost never does. We will wait for the lower courts to draw the line between “close family member” and “mere acquaintance.” Meanwhile, employers must be mindful that courts interpret Title VII retaliation broadly and employment actions against a complainant’s relatives or close friends might constitute retaliation.

Determining the Appropriate Discipline

2011-01-13T14:00:00.003-06:00

If you are a college football fan you might have read that ESPN recently fired a play-by-play announcer for making a sexist remark to a female co-worker. If you haven’t seen the article, the background story is that during the pre-game production meeting for the Chick-fil-A Bowl game, the announcer told his female co-worker “Listen to me, sweet baby, let me tell you something …” After the co-worker told the announcer not to use that language with her, the announcer responded with “OK then, listen to me, assh*le.” ESPN terminated the announcer a few days after the comments were reported to management.

ESPN’s handling of this situation raises an interesting discussion regarding appropriate employee discipline. Most employers have varying levels of discipline ranging from verbal warning to demotion to termination. The question the ESPN situation raises is when should an employer issue a verbal warning versus a demotion or termination?

The law allows an employer to minimize liability from discrimination or harassment lawsuits if the employer can show it took “prompt remedial action” regarding the wrongdoing. Prompt remedial action is often a question for the jury and, therefore, the jury will determine if the employer issued sufficient and appropriate discipline. An employer should show the jury that the employer (1) had an anti-discrimination/harassment policy, (2) trained its employees about the policy, (3) quickly investigated any complaints, and (4) if the investigation revealed a policy violation, the employer issued appropriate discipline. Appropriate discipline is often shown when the employer followed the progressive discipline outlined in the company policy and the discipline stopped the wrongdoing.

In the ESPN case, according to the New York Post, the announcer had a history of making sexual comments towards female co-workers. The prior history of comments probably made it more necessary for ESPN to terminate the announcer as opposed to issuing a lesser disciplinary action. Since ESPN terminated the announcer instead of suspending or demoting the announcer, we’ll never know if a jury would have determined a lesser disciplinary action was appropriate.

DREAM Act Passes House, Awaits Fait in Senate

2010-12-09T09:43:00.002-06:00

Yesterday the U.S. House of Representative narrowly passed (216-198) the DREAM Act. For more information about the specifics of the Act see our previous post. The Senate is scheduled to take a procedural vote on the Act today. Check back for updates.

Coles Corner Winning Wine: December 2010 (Archive)

2010-12-09T09:35:00.001-06:00

Hip Chicks Do Wine 2007 Whole Berry Cabernet Sauvignon - Their labels are creative and their wine names are whimsical. Their 2007 Cabernet Sauvignon starts smoothly and finishes well while delivering excellent spice. The name “Whole Berry” suggests fruit and this Cabernet delivers with fruit forward flavors.

Coles Corner Winning Wine: November 2010 (Archive)

2010-12-09T09:33:00.004-06:00

L’Archet’s 2006 Cuvée Occitane – The Cuvée Occitane blends the highly accessible Grenache with the bright fruit and spice of the Syrah. The Carignan and Mourvèdre add balance and fruit-forward flavors. Aged in French Oak, this blend is a terrific table wine.

‘Tis a Season to Be Mindful

2010-12-02T16:23:00.006-06:00

As an eclectic nation of varying religious and non-religious people, the United States ever is evolving its customs to include, or more importantly to ensure it does not exclude, the varying religious beliefs found here. Not long ago, public school students received a “Christmas vacation.” Then, not to exclude other religious holidays around this time period, public school students instead received a “Holiday vacation.” Now, to ensure no one is excluded, public school students simply receive a “Winter vacation.”

Your workplace likely went through a similar change in designating office closures this time of year. The point of highlighting this change is not to debate whether we as a society are or are not overly politically correct or whether the distinction in names is or is not trivial. Instead, the point is that generally accepted customs, ideas, and thoughts change and evolve over time. Whether you are an employer, manager, supervisor, or co-worker, we all must be mindful that what once was generally acceptable in the workplace may now be considered discriminatory or harassing.

Under both Federal and Texas law it is unlawful for an employer to discriminate against a person based on that person’s religious beliefs. This means an employer cannot discriminate based on someone’s particular religious practice or lack thereof. These employment laws, however, do not preclude individuals from expressing their personal religious beliefs. As an employer or supervisor, though, you must be mindful about your religious beliefs and ensure your employees and/or subordinates do not believe they are treated differently because of their religious beliefs or because their religious beliefs do not align with yours.

With that said, celebrate the season as you wish. Just remember your obligations and responsibilities as an employer.

E-Waste Recycling Update

2010-11-30T16:42:00.005-06:00

The E-Waste Recycling event we recently hosted in the parking lot of our building was a huge success. Many people came out and dropped off their old electronics. As a result, we collected over 1,000 pounds of old electronics for recycling! Thanks so much to everyone who came out. We have received a lot of positive feedback.

If you would like to see us host another one of these events, please drop us a line in the comments section and let us know. If we get enough interest, we'll host another one.

Dustin Paschal and Paul Simon Elected to DAYL Board

2010-11-15T10:01:00.003-06:00

Election results for the Dallas Association of Young Lawyers Board of Directors were announced last Wednesday. We are pleased to announce that Dustin Paschal was re-elected to the Board of Directors for a second term and Paul Simon was elected to his first term on the Board of Directors. Congratulations to both.

The Coles Firm Hosts E-Waste Recycling Event

2010-11-09T13:51:00.004-06:00

This Wednesday, November 10, 2010 from 5:00 p.m. until 7:00 p.m., we are hosting an e-Waste Recycling event in the parking lot of our building (the Reeder Energy building at 4925 Greenville Avenue). A truck and workers will be in the parking lot to unload and collect any old electronics you have. This includes computer monitors, televisions, batteries, cell phones, and more. The flyer above explains it all. Come out and bring your old electronics and do a little something to help our environment.

Coles Corner Winning Wine: October 2010 (Archive)

2010-11-03T09:27:00.002-05:00

Ferrari-Carano 2009 Fumé Blanc – This non-traditional Sauvignon Blanc provides a nice balance between a classic buttery Chardonnay and a characteristic crisp and citrus-flavored Sauvignon Blanc. For those that do not like the extreme of either varietal, this wine is a perfect choice. It pairs well with traditional white wine pairings, but we enjoyed this wine by itself.

Mama's secret family recipe might not be so secret

2010-10-18T16:08:00.006-05:00

A recent article published in D Magazine discusses a decision by the Dallas County District Court involving alleged secret family recipes at Gloria's, a local Dallas Mexican restaurant. According to the lawsuit, Gloria's sued a former employee for allegedly stealing Gloria's recipes and using the recipes at a new competing restaurant. The recipes, which Gloria's claims were passed down from family recipes, never were disseminated in writing to employees. The owner of Gloria's personally taught all the chefs the recipes from memory and kept the recipes in an undisclosed location. Despite these steps to keep the recipes secret, the Dallas County District Court found the recipes did not constitute a "trade secret" under Texas law.

Under Texas law, "a trade secret is any formula, pattern, device or compilation of information which is used in one's business and presents an opportunity to obtain an advantage over competitors who do not know or use it." From this language one would assume Gloria's recipes clearly give the restaurant an advantage over competitors, but Texas courts require more than a showing of competitive advantage. Texas courts examine several factors when determining a trade secret's existence, including the measures a business takes to prevent the trade secret's disclosure. While Gloria's took some protective measures, the Court's ruling indicates Gloria's failed to take enough measures.

Gloria's exemplifies a problem many employers face: failure to document. An important measure for protecting trade secrets is a requirement that employees sign non-disclosure and confidentiality agreements. Gloria's failed to take this important measure and unfortunately, Gloria's is left to compete against its own recipe.

Coles Corner Winning Wine: September 2010 (Archive)

2010-10-06T09:12:00.001-05:00

Marc Bredif’s 2007 Vouvray – Made from the Chenin Blanc grape, this Appellation Vouvray Controlee is sweet without being heavy. Allow this wine to breathe to reduce its sharpness on the finish. Pairs well with mild cheeses and crème-based sauces.

Supreme Court Considers "Cat's Paw" Theory

2010-09-15T14:01:00.006-05:00

The Supreme Court recently granted certiorari in Staub v. Proctor Hospital (09-400). It will hear and decide the case during its term opening in early October. The central question the Supreme Court will address is in what circumstances an employer may be held liable for unlawful discriminatory motives and actions by someone other than the decision maker. This theory of recovery is known as the “cat’s paw theory” and is taken from the 17th Century fable by French poet Jean de La Fontaine. In Fontaine’s fable, a shrewd monkey convinces a cat to steal chestnuts from a fire. While the cat burns her paw in the process, the monkey enjoys the fruits of the cat’s labor by eating all the chestnuts.

In employment law, “cat’s paw” typically arises under Title VII, the primary law related to workplace discrimination. In the Staub case, however, the theory arose under the Uniformed Services Employment and Reemployment Rights Act (USERRA). After an amicus brief by then Solicitor General Elena Kagan, and now, interestingly, a Supreme Court justice, the Court decided the Staub case is an ideal vehicle to address the lower courts’ inconsistent application of the law in “cat’s paw” cases.

Vincent Staub, a member of the Army Reserves, worked as an angiogram technician at Proctor Hospital in Peoria, Illinois. As a member of the Reserves, he attended required occasional weekend training in addition to two-week training during the summer. Staub’s supervisor, Janice Mulally, grew annoyed with Staub’s Reserve commitments. She frequently criticized the Reserves and intentionally scheduled him on weekends when he had training. In the weeks preceding his termination, Mulally disciplined Staub for “insubordinate behavior.” Considering Mulally’s dislike of Staub, the allegations were questionable. Despite this, the Vice President of Human Resources terminated Staub.

At the trial court, Staub asserted the decision maker adopted Mulally’s animus and, therefore, the decision would not have been made if not for Mulally’s discriminatory animus. The jury returned a verdict favoring Staub and awarded him $57,640. On appeal, the Seventh Circuit reversed and remanded the decision and held the “cat’s paw” theory only attributes the discriminatory animus of the non-decision maker to the decision maker when the non-decision maker is the only influence on the decision-maker. The Seventh Circuit ruled that evidence of “singular influence” of the non-decision maker and “blind reliance” by the decision-maker is necessary in “cat’s paw” cases. The Seventh Circuit found clear evidence showed while Mulally did influence the decision-maker, the decision-maker also relied on other information including Staub’s reputation for being a difficult employee and his history of discipline prior to Mulally’s supervision. Furthermore, the Seventh Circuit found the trial court erred in allowing the case to proceed to trial because the trial court should have determined whether the non-decision maker was the singular influence on the decision maker before determining whether the non-decision maker held discriminatory animus. Staub’s attorney contested this decision on the basis that it fails to hold employers accountable when several factors lead to the adverse employment action, including discriminatory opinions from those the decision-maker consults before making the ultimate decision.

The Seventh Circuit essentially articulated a very narrow interpretation of the “cat’s paw” theory by requiring singular influence by the non-decision maker. We do not know how the Supreme Court will decide the case but some speculate that, given its ideological composition, the Supreme Court likely will affirm the Seventh Circuit opinion. Check back here for regular updates.

Sue the Bully?

2010-09-03T16:16:00.001-05:00

What does a workplace bully look like? It may be a boss who screams at subordinates, one who writes false evaluations for good employees in order to put their jobs at risk, or one who sets impossible standards.

Recent studies indicate that bullying in the workplace is on the rise. Zogby International’s 2007 study found that 37% of workers had been bullied at some time throughout their career. Furthermore, a recent University of Phoenix study asserts that the recession is to blame: so-called serial bullies have more justification for bullying, and normal managers now have the sense that they need to extract as much output from as few employees as possible – leading to more instances of workplace bullying. Just days ago, the New York Times reported that The Virginia Quarterly Review has suspended publication for a period following the suicide of its Managing Editor. According to press reports, the Managing Editor’s family claims he had been repeatedly bullied by the top editor of the magazine.

While legal protections exist under existing laws for workers who suffer abuse due to their membership in a protected class (race, ethnicity, sex, age, religious persuasion), ordinary workers who undergo malicious treatment from their superiors have no recourse.

Sixteen states are now considering laws to change this. The New York State Senate passed legislation in May, entitled The Healthy Workplace Bill, which would enable workers to sue for physical, psychological, or economic harm due to abusive treatment at work. The New York state assembly will consider the bill next year and, if the bill passes, employees demonstrating they faced a hostile environment due to a workplace bully could win lost wages, medical expenses, compensation for emotional distress, and punitive damages. In order to recover, the employee must prove that the bullying was done with malice and usually that it occurred repeatedly. Companies who investigate in a timely manner and take measures to correct the problem will have access to affirmative defenses.

This legislation no doubt will add a higher regulatory burden and increase (perhaps dramatically) the number of employment lawsuits. We want to know what you think about this. Do you think this kind of legislation is helpful or problematic? Let us know with your comments below.

Coles Corner Winning Wine: August 2010 (Archive)

2010-09-02T16:47:00.002-05:00

Pali Pinot Noir Riviera (Sonoma Coast) 2008 - This smooth wine carries a distinct dark fruit flavor and finishes nicely on the palate. It is light enough to be a summer red yet substantial enough to pair with meat and poultry.

Update: Wal-Mart Appeals Million Plaintiffs' Class Action

2010-08-26T16:14:00.004-05:00

You may remember our May 13^thpost here about the Ninth Circuit ruling that a class action lawsuit against Wal-Mart, involving over 1 million plaintiffs, could proceed to trial. As predicted, Wal-Mart has appealed to the Supreme Court to overturn the ruling. As a brief refresher, the class action lawsuit, Dukes v. Wal-Mart, claims that Wal-Mart and Sam’s Club systematically discriminated against their female employees by paying them less than male employees, and offering females fewer and less frequent promotional opportunities. At issue is not whether the discrimination occurred, but whether over a million people will be allowed to make this collective claim through a class-action lawsuit, rather than individually or in smaller groups.

Wal-Mart’s main argument is based on the grounds that the proposed class of plaintiffs is far too large and individualized to qualify. In its petition to the Supreme Court, Wal-Mart argued, “the class is larger than the active-duty personnel in the Army, Navy, Air Force, Marines and Coast Guard combined – making it the largest employment class action in history by several orders of magnitude.” It also argued that the Ninth Circuit contradicted earlier Supreme Court and appeals courts’ decisions, and that it improperly frees the plaintiffs of the burden to prove each individual plaintiff had been directly injured by Wal-Mart’s practices.

Some legal experts suggest that if the Supreme Court sides with the plaintiffs and lets the lawsuit proceed as is, it could cost Wal-Mart over $1 billion in damages. Furthermore, the implications for future class action certification procedures will be very far reaching. It is unknown whether the Supreme Court will decide to hear the case, but we will keep you updated. Check back in late Fall for more information.

Coles Corner Winning Wine: July 2010 (Archive)

2010-08-11T08:28:00.003-05:00

Momo 2009 Sauvignon Blanc - Cultivated in New Zealand's lush Marlborough vineyards, Momo's Sauvignon Blanc provides noticeable flavors of apple and pear. This Sauvignon Blanc stays true to its herbaceous roots but does not overpower with its grassy notes.

Coles Corner Winning Wine: June 2010 (Archive)

2010-07-09T08:02:00.002-05:00

Simpson Vineyard 2008 Miner California Viognier – This wine is reminiscent of a Chardonnay absent the traditional oak flavor. Miner’s Viognier is a perfect Summer alternative to the Sauvignon Blanc and Pinot Gris.

Texas Supreme Court Hands Employers a Big Win

2010-06-25T09:53:00.005-05:00

Defending a sexual harassment lawsuit just got a little easier in some respects for employers in Texas. On June 11, 2010, the Texas Supreme Court issued an opinion in Waffle House, Inc. v. Cathie Williams. The facts of this case (which we will briefly summarize below) gave rise to a typical sexual harassment lawsuit in Texas - a sexual harassment cause of action against the company under Chapter 21 of the Texas Labor Code, an assault cause of action against the offending employee, and a negligent retention and supervision cause of action against the company.

In this case, the Plaintiff Cathie Williams alleged a co-worker, Eddie Davis, regularly sexually harassed her and assaulted her. Specifically, Williams claimed Davis made unwanted sexual comments and gestures and flirted with Williams. Williams also alleged Davis pushed her into counters and the grill, held her arms with his body pressed against her, and rubbed his arm against her breasts. Ultimately, Williams sued Waffle House and Davis for the causes of action we outlined above (she later dismissed the assault claim against Davis).

A jury found in favor of Williams and Waffle House appealed. The 2nd Court of Appeals in Texas upheld the jury's verdict and Waffle House appealed to the Texas Supreme Court. Waffle House contended the negligent supervision and retention cause of action should fail as a matter of law because Chapter 21 of the Texas Labor Code is the exclusive remedy for workplace sexual harassment.

In a 7-2 opinion, the Texas Supreme Court held Chapter 21 of the Texas Labor Code is the exclusive remedy for workplace sexual harassment and, therefore, preempts any negligent retention and supervision cause of action when such a cause of action is "entwined with the complained-of harassment." Essentially, the majority held the assault about which Williams complained (and which supported the negligent supervision and retention cause of action) arose from the "same boorish and objectionable conduct." The majority stated Davis' "conduct was assaultive because of the sexually offensive and provocative nature of his verbal and physical contacts with Williams."

As a result of the Texas Supreme Court's decision, the great majority of negligent supervision and retention claims filed in conjunction with sexual harassment claims will now fail. The Court did point out, however, Chapter 21 of the Texas Labor Code "does not foreclose an assault-based negligence claim arising from independent facts unrelated to sexual harassment," but such claims are rare.

Accordingly, the question moving forward becomes whether or not an alleged assault is independent of the alleged sexual harassment. More succinctly stated, is the assault sexual in nature? As the dissent pointed out in this case, that is often a fine and blurred line. For the time being, though, employers should be pleased with this decision.

Update: U.S. Supreme Court Decides Texting Case

2010-06-24T17:21:00.002-05:00

Last week, the United States Supreme Court issued a decision on the texting case we blogged about here and here. We will not recount the facts here, but in a unanimous decision, the Supreme Court upheld a police department's search of a police officer's personal text messages on his department-owned pager. The Supreme Court held the search did not violate his constitutional rights because it said the police department's search was reasonable. Most importantly, the Supreme Court did not outline any rules about privacy of workplace electronic communications. It seems this issue will be a case by case determination moving forward. Was this decision right?

Coles Corner Winning Wine: May 2010 (Archive)

2010-06-08T09:55:00.002-05:00

2009 Chukker – Happy Canyon Vineyard’s 2009 Chukker is a delightful blend of cabernet fran, merlot, and cabernet sauvignon. This Summer red has rich fruit flavors, with a spicy finish. With its smoky notes, an excellent wine to bring to your next bar-b-que.

Recent 5th Circuit Decision Sheds More Light on FLSA Requirements

2010-06-04T09:47:00.007-05:00

On May 27, 2010, the 5th Circuit Court of Appeals issued a decision interpreting the Fair Labor Standards Act’s (FLSA) differentiation between “regular rate” and “per diem” payments. In Gagnon v. United Technisource Inc; AIS Tech Services Inc., the 5th Circuit determined the employer deliberately violated the FLSA by paying a low hourly rate with an offsetting “per diem.” The employer in Gagnon agreed to pay the employee $5.50 per hour (approximately minimum wage at that time) for “straight time” and $20.00 per hour for overtime. In addition, the employer agreed to pay the employee $12.50 for every hour he worked each week up to 40 hours per week or a maximum of $500. The employer referred to this as “per diem.”

The Court determined that pursuant to the FLSA, the employee's hourly regular rate was $18.00 ($5.50 “straight time” plus $12.50 “per diem”). As such, the employer owed the employee $27.00 per hour for overtime. Particularly important in the Court's finding that the $12.50 per hour “per diem” should be considered regular rate was the fact the “per diem” was an hourly calculation as opposed to a flat rate based on travel expenses, living expenses, etc. The Court also looked at the hourly rate of pay for similar jobs at other companies and found the hourly rate varied from $18.32 to $24.00, well above the $5.50 the employer in Gagnon paid.

Whether the employer deliberately circumvented the FLSA requirements or not, the lesson all employers should learn from Gagnon is the FLSA’s payment requirements are complicated. Many terms we commonly hear such as “salary,” “overtime,” “exempt,” and “non-exempt” have different meanings under the FLSA. A mistake in properly paying employees can cost an employer greatly down the road, especially because the FLSA permits attorney’s fees and doubling the amount the employee is owed in certain circumstances. It is always best to consult with your attorney on any and all pay practices and employee classifications (especially when you have complicated and/or unique pay practices).

Arbitration Agreements: Common Place in Sports World, But Are They Good for the Common Employer?

2010-05-28T09:25:00.001-05:00

If you follow sports news with any type of regularity, you probably can recall a dispute between a player and team which involved arbitration (i.e. Terrell Owens' dispute with the Philadelphia Eagles). Whether it is a dispute over how much money a team must pay a player or whether a team can suspend a player, the dispute is rarely played out in open court. Instead, the parties head to arbitration and have an arbitrator decide the merits. Recently a New Orleans Saints employee brought a lawsuit against the team alleging wrongful termination. The Saints invoked an arbitration clause in the employee's employment agreement and now the dispute will be decided by an arbitrator.

In the employment arena, arbitration clauses are becoming more common. This swing in favor of arbitration likely is driven by preconceived benefits of arbitration. Those preconceived benefits include: moderate costs ("potential" - see disadvantages below), expedited resolution, and confidentiality. While these preconceived benefits generally are true, an employer should keep in mind the disadvantages of arbitration. One disadvantage an employer needs to remember is that an employment arbitration generally requires the employer pay the arbitrator's fees for both parties. An arbitrator's fees can add up quickly in a contentious dispute. Another potential disadvantage is an arbitrator's propensity to "split the baby." This is not meant to be a slight on arbitrators, but the unfortunate truth is, arbitrators make money by repeat business. If the employee's lawyer does not like the outcome, that lawyer as well as other plaintiffs' lawyers will not select that arbitrator. Keep these advantages and disadvantages in mind as you evaluate whether to continue or begin using mandatory arbitration clauses in your employment agreements.

United States Supreme Court Issues Key Disparate Impact Ruling

2010-05-25T13:39:00.006-05:00

Yesterday, the United States Supreme Court issued a key decision in a disparate impact case involving written exams in the City of Chicago firefighter application process. In a unanimous decision written by Justice Scalia, the Supreme Court discussed an issue of high importance to employers.

In 1995, the City of Chicago required all firefighter applicants take a written examination. The City announced in January 1996 that it would draw random candidates from the applicants that scored at least 89 out of 100 points. These applicants were designated as "well qualified." Applicants scoring between 65 and 88 were designated as "qualified" and were told they would be kept on an eligibility list. Any applicants that scored below 65 were informed they failed the exam and would not be considered for any firefighter positions. In March 1997, a group of black applicants that scored in the "qualified" range filed Charges of Discrimination with the EEOC and received Notices of Right to Sue. They ultimately filed suit and the lower court certified their lawsuit as a class action. The firefighters prevailed at the lower court level. On appeal, the Seventh Circuit reversed the lower court's decision and found the lawsuit was untimely because the earliest EEOC Charge of Discrimination was filed more than 300 days after the January 1996 decision to sort the test scores into three categories. The firefighters appealed to the Supreme Court.

As an initial matter (and as pointed out by Justice Scalia in the opinion), Title VII of the Civil Rights Act of 1964 prohibits employers from using practices (even if those practices are on their face non-discriminatory) that cause a disparate impact on the basis of race. Tests such as those at issue in this case are often the impetus for disparate impact cases. Title VII also requires plaintiffs to file a Charge of Discrimination within 300 days of the complained-of act prior to filing a lawsuit. The firefighters in this case argued that each time the City used the test scores to make a hiring decision, a new disparate impact cause of action accrued which began the 300 day deadline. The City argued the January 1996 decision to sort the scores was the only relevant date for disparate impact purposes and that each hiring decision thereafter was not a new discriminatory act because the City was only implementing the prior January 1996 decision.

The Supreme Court held that each hiring decision gave rise to a new disparate impact claim. The Court based this decision on the language in Title VII itself that states a plaintiff establishes a disparate impact claim when he or she shows an employer "uses a particular employment practice that causes a disparate impact." The Court said the City's exclusion of applicants (based on test scores) in each round of selection was a "use" as defined by Title VII. Thus, each hiring decision started the 300 day clock and the firefighters in this case timely filed Charges of Discrimination.

So what should employers take away from this key decision? It is important for any employer that utilizes tests and other similar employment practices that may create a disparate impact on its employees to constantly re-evaluate those practices and their impacts. An employer cannot avoid a lawsuit simply by relying on the fact the practice was implemented years ago. If an employer still makes decisions based on the practice at issue, each new decision gives rise to a potential cause of action. Employers, make sure your practices are sound and stay diligent and up to date.

The Forgotten Side Effect of a Troubled Economy - Lower Employee Morale

2010-05-19T15:40:00.005-05:00

We recently read a fascinating article on MSNBC.com about the affect of corporate crises on employee morale. We will not recite the article here but certainly encourage you to read it if you are a business owner or find yourself in the management world with employee oversight and responsibility. The article reminds us of a company's most important asset - its employees. We here at The Coles Firm P.C. have highlighted the importance of employees and employee morale before but it never can be discussed too much.

As the article points out, when companies suffer economic, PR, or other crises, it is often the employees that are hardest hit. Unfortunately employees' troubles often are overlooked in favor of the more salacious media tidbits like crooked executives, insider trading, and coverups. What we often do not think about, though, are the front line employees that lose their jobs because the company must shut down or downsize or cut costs as a result of the crisis.

As the article points out, great companies have strong leaders who will focus on the company's employees and address the employees' concerns and fears directly, openly, and honestly. As a manager, you may not always have the answer an employee wants to hear but that does not mean you stick your head in the sand and avoid the issue. A fearful and uninformed employee is not a productive employee.

The amount of books and information about employee morale is staggering. You may feel there is a secret or a method you must use to have happy employees. That is just not true. There is no magic way to make happy employees. It's very simple. Treat your employees like they are your company's best asset. It does not matter how you do that (whether it be incentives, awards, recognition, an understanding of their issues, or a simple thank you). All that matters is that you do it. You will see your productivity increase and your business thrive.

Wal-Mart Takes a Hit on the Legal Front

2010-05-14T10:42:00.002-05:00

If you have followed business news in the past week, you may have noticed some major developments in a class-action lawsuit against the world’s largest employer, Wal-Mart. On Monday, the 9th Circuit Court of Appeals voted 6-5, allowing a class-action lawsuit go to trial in what may potentially be the largest employment discrimination class-action suit ever. The crux of the lawsuit is whether Wal-Mart discriminates against its female employees by paying them less and limiting their opportunities for advancement. While the lawsuit began in 2001 with allegations from six women who worked in 13 of Wal-Mart’s 3,400 stores, the final class of litigants may well include every woman who has worked at Wal-Mart since 2001 – over 1.5 million women. Now that the appeals court has certified the class, Wal-Mart will likely challenge the decision at the Supreme Court. Let us know your thoughts on the potential impact of the 9th Circuit’s decision. Do you support a class-action lawsuit involving 1.5 million plaintiffs (as the plaintiffs’ attorneys have argued) or do you think plaintiffs should individually pursue claims at the specific Wal-Mart locations that employed them (as Wal-Mart has argued)? Is there a middle ground? We welcome your comments below.

UPDATE: Supreme Court Hears Arguments Regarding Workplace Privacy

2010-05-05T15:20:00.004-05:00

At the end of last year we asked whether an employee should have an expectation of privacy regarding emails, text messages, etc. that were received and sent on company-owned equipment (previous post). The majority of reader responses favored the employers' right to monitor employees' communication. Luckily we should have an answer to this question from the Supreme Court in June. According to one report, the Justices appear to side with the employer. However, this same report indicated Chief Justice Roberts criticized the employer's decision to look at the text messages. Until June though, we can continue the right of privacy debate.

Coles Corner Winning Wine: April 2010 (Archive)

2010-05-01T08:31:00.003-05:00

Lail Vineyards Blueprint 2008 Sauvignon Blanc - Lail's Blueprint Sauvignon Blanc is not the classic herbaceous Sauvignon Blanc. Don't look for over-the-top grassy notes. It offers an earthy nose that suggest a more intense wine, perhaps reminiscent of a Semillon. On the palette this wine has citrus notes combined with a slight hint of carbonation and still honors the Sauvignon Blanc grape and its traditional flavors.

New State Immigration Laws

2010-04-26T13:43:00.006-05:00

If you have watched the news this past couple weeks, you are likely well aware of the new immigration law passed in Arizona. This new law, which many proponents and opponents agree is the strictest immigration law in recent generations, requires immigrants to always carry immigration documents or face criminal prosecution. The purported intent of the new law is to identify and detain illegal aliens. Critics, however, fear the new law leads to racial profiling by the police. According to critics, this new law allows police to question any Hispanic-looking person about their citizenship and status. Arizona's immigration law will not go into effect until August or September. In the mean time, however, expect several attacks on the constitutionality of the law, as well as possible Federal government involvement. We will also need to wait and see if other border-states follow Arizona's lead and pass similar immigration enforcement laws.

While we wait for the courts and the Federal government to weigh in on Arizona's new immigration law, what do you think of the new law? If you disagree with the law, do you have any suggestions to deal with Arizona's ever-increasing issues with illegal aliens?

Coles Corner Winning Wine: March 2010 (Archive)

2010-04-13T09:28:00.003-05:00

EOS Estate Winery 2005 Cupa Grandis Petite Sirah - If you are a fan of dark fruit and smooth finishes, the 2005 Cupa Grandis will deliver that and more. As a Petite Sirah, this wine provides an unadulterated version aged in French oak. The rich, deep color hints at the complexity of the wine and we enjoyed the multi-layered and structured approach from EOS Estate Winery.

Age Discrimination Claims Increasing...But Also Harder to Prove

2010-03-19T15:36:00.005-05:00

Growing up, most of us were taught to respect our elders. Recent trends, however, show that many people may have forgotten how they were raised. A recent online Newsweek article highlighted not only this disturbing trend but also how much more difficult it is for age discrimination victims to prevail.

According to the article, the U.S. Equal Employment Opportunity Commission recorded a seventeen percent (17%) increase in age-discrimination complaints since the current recession began in 2007. The article points out that as the economy suffers, companies usually lay off older workers (i.e. higher wage earners) first. We've often encountered cases like this in our practice - companies can not continue with their current wage costs and often seek to reduce those costs by terminating their highest wage earners. Most times, these high wage earners are the oldest workers. As the article points out, these claims are the easy claims to identify even when wages are used as a proxy for age.

As the article states, the more difficult age discrimination claims to identify and prove are those claims involving the hiring process. Most times, a rejected hire only learns that she or he has not been hired but neither learns the reason nor the identity of the individual who did get hired.

The Newsweek article also pointed out there are professions where age discrimination can be most common. One such area is in the Information Technology field. A recent article in ComputerWorld discussed how the nature of the information technology field itself pushes out elderly workers. The article attributed this push-out to high wages for older workers, the devaluation of experience and skills in favor of longer hours and higher work production, and the desire for laser-like focus on particular projects uninterrupted by "adult responsibilities" like childcare and families.

To make matters worse, all these age discrimination claims now have a much larger hurdle to overcome. In 2009, the U.S. Supreme Court issued its decision in Gross v. FBL Financial Services, Inc. (we previously discussed that decision here). As a result of that decision, individuals claiming age discrimination now must prove that age was the sole (or "but for") cause of the alleged discrimination. As the Newsweek article points out, this is extremely difficult to prove because so many factors can drive an employer's decision.

So what should we take away from all this? When examining cost-cutting measures, employers should be careful that they do not create an age discrimination claim and workers should strive to stay relevant and productive to avoid becoming a "cost saver." In any event, just as in life, we should strive to respect our elders in the workforce. More often than not, experience and wisdom matter.

Do Anti-Discrimination Laws Actually Have a Reverse Effect?

2010-03-12T15:17:00.006-06:00

We recently came across a passage about the law of unintended consequences while reading the book Super Freakonomics. One particular paragraph noted that while the Americans with Disabilities Act (ADA) was passed to safeguard disabled workers from discrimination, data shows that there has actually been a net decrease in jobs for disabled Americans. Specifically, the book claims "[a]fter the ADA became law, employers were so worried they wouldn't be able to discipline or fire bad workers who had a disability that they avoided hiring such workers in the first place."

Do you believe that anti-discrimination laws actually have unintended consequences like those outlined in Super Freakonomics? Have you actually encountered any such unintended consequences? Do you think anti-discrimination laws are still necessary?

Paul Invited to Join Dallas Bar Foundation Fellows

2010-03-05T09:19:00.005-06:00

We here at The Coles Firm P.C. would like to congratulate Paul Simon on his recent invitation to join the Dallas Bar Foundation (DBF) Fellows. The Dallas Bar Foundation provides financial support for law related research, publications, and forums, provides law related scholarships and education, and provides charitable and legal aid for the impoverished. Since 1981, the DBF has awarded more than $4.1 million.

DBF Fellows are attorneys who have demonstrated a high ethical standard and a commitment to the cause of justice and the welfare of the community. Election to the Fellows constitutes a high professional honor and we congratulate Paul on this great accomplishment.

Sports and Employment Law

2010-02-28T14:31:00.003-06:00

We here at The Coles Firm P.C. hope you have not missed us too much in our brief absence these last few weeks. We're back now and while we were gone, we came up with a little something new for the blog. In addition to hearing from you this year on the blog, we decided to add a new regular post feature to the blog - sports. No, we won't be commenting on games and tournaments, and players (although ask any of us about that stuff and we'll most likely keep you busy for a while). Instead, we plan to talk about the intersection of sports and employment law. With that said, we have a great start to this new feature.

We recently read an article about a "charity clause" in Manny Ramirez' (of baseball's Los Angeles Dodgers) $45 million, two-year contract back in March 2009. What is this "charity clause?" Well, apparently there was a clause in Ramirez' contract that called for Ramirez to make a $1 million donation to the Dodgers Dream Foundation. The article went on to say that not only did other Dodgers players have "charity clauses" in their contracts, but so did Major League Baseball players from several different teams.

The idea became so prevalent (more than 100 players had such a "charity clause" in their contracts), that the MLB Players Association filed a grievance against Major League Baseball and claimed players should not be required to make donations to anyone.

Contracts have long been simply a matter of negotiation between the parties involved. In this case, Manny Ramirez negotiated for $45 million to play for the Dodgers and the Dodgers in turn negotiated for a $1 million charitable donation. Is it wrong of the Dodgers essentially to require Manny Ramirez to donate?

How many of you work for an employer and have had the following situation arise? Your boss (or boss' assistant on behalf of the boss) comes to you and tells you his or her child is selling some item as a fundraiser for school or a sports team or an after-school activity. Do you feel you have an option to tell your boss you are not interested in paying $10 for a bucket of cookie dough? What about during the holidays when someone starts collecting donations for Toys for Tots and everyone in the office donates? Do you feel you have the choice not to bring in a toy?

Don't get us wrong, we are all for charity. Charitable contributions provide for people who might not otherwise be able to provide for themselves. But how are these everyday work situations any different (albeit on a lesser scale) than requiring a major league sports player to donate a portion of his or her millions of dollars to charity? One might even argue these sports players are in a better situation than the general working public - the sports players can simply go negotiate with another team that does not require a charitable donation.

There is nothing illegal about what the Dodgers chose to do in Manny Ramirez' case. In fact, through their actions, the Dodgers actually help the less fortunate. But does that make it right? What would you do if your employer wanted to insert a "charity clause" in your employment contract?

Coles Corner Winning Wine: February 2010 (Archive)

2010-02-10T12:01:00.000-06:00

Rombauer Chardonnay 2008 – Rombauer’s Chardonnay is a classic California wine, offering a delightful hint of oak that does not overpower the grape. Beginning smooth on the pallet, this Chard ends with a mult-layered finished.

Coles Corner Winning Wine: January 2010 (Archive)

2010-02-05T11:27:00.006-06:00

January 2010: Lioco 2007

Pinot Noir. This is a Pinot

Noir of a different breed.

Not the light and playful

variety, this Pinot Noir

packs punch. An unfiltered

and unfined wine, the Lioco

Pinot Noir has spicy notes

and an earthiness

reminiscent of South

American wines like the

Malbec and Carmenere.

Dustin Wins 2009 DAYL Outstanding Committee Chair Award

2010-01-26T17:23:00.004-06:00

The Firm wants to congratulate Dustin Paschal on his recent accomplishment of being named the 2009 DAYL Outstanding Committee Chair. Immediate-Past President, Dena DeNooyer-Stroh (pictured to the right) selected Dustin for the Award in recognition for his significant contribution to several DAYL Committees, including, Team Leadership, Historical, and Social.

What is Your Expectation of Privacy in the Workplace?

2009-12-23T09:56:00.001-06:00

Recently the U.S. Supreme Court was asked to determine if an employee has the right to prevent an employer from viewing the employee's text messages sent or received on an employer-issued pager. Here is an article discussing the case. It is fair to say most people (from low-level employees to corporate executives) have sent or received personal correspondence during work, whether it was a telephone call, email, fax, or text message. When you sent or received that correspondence, what was your expectation of privacy? Does your answer change if your employer provides you a written policy stating your employer may record and view all correspondence sent or received on company-owned property? How do you think the U.S. Supreme Court will decide? Post your comments and answers below. We will continue to track this case and see how your responses correspond with the Supreme Court's decision.

New Year - New Formatting

2009-12-22T09:48:00.008-06:00

As we approach 2010 we thought it appropriate to add a new component to the Blog. We started the Blog as a vehicle to promote communication between the Firm and you, our readers. Periodically we will pose employment-related questions regarding current issues in the news or work place. Feel free to provide your thoughts and comments. We would like to hear what you have to say.

Coles Corner Winning Wine: December 2009 (Archive)

2009-12-10T17:30:00.003-06:00

December 2009: Gauge Wines 2007 20 Gauge Chard. This surprisingly smooth chardonnay opens with delicate nots of sweet melon. Slight hints of the classic buttery chardonnay remain but this doesn't taste like a classic chardonnay. Although you might associate this wine with warmer months, try 20 Gauge if you're shooting for a crowd pleaser this holiday season.

HR Isn't All Bad - The Personal Side of Personnel

2009-12-09T14:09:00.006-06:00

Human Resources often is saddled with many unenviable tasks, with the two main culprits disciplining and terminating. As employment lawyers, unfortunately, we usually only interact with Human Resources regarding these unenviable tasks. It seems appropriate as the year winds down and the holiday season approaches to remember all the beneficial and seldom-recognized tasks Human Resources provides to employees and the company as a whole. So if you are in Human Resources and feeling overwhelmed by your unenviable tasks, an executive tired from continually dotting your "i's" and crossing your "t's," or an employee worn out from all the protocols and procedures, remember HR . . .

H onors employees for their years of commitment to the company.

U nites employees and management in a common goal.

M aintains valuable documents and files.

A ssists with new hire orientation and company retreats.

N urtures during difficult times.

R ecognizes employees for outstanding work.

E ncourages teamwork and dedication.

S upports employees throughout their tenure.

O rganizes company events and parties.

U mpires employee disputes.

R esponds to inquiries regarding benefits, job openings, and payroll.

C ounsels employees regarding any and all aspects of their job.

E xplains company policies and procedures.

S erves the company with unwavering enthusiasm.

While this list describes only a small fraction of the services HR provides, the list illustrates all the positive benefits HR provides employees, managers, and the company as a whole. Human Resources is the backbone of any company, so take some time this holiday season to say thanks.

Coles Corner Winning Wine: November 2009 (Archive)

2009-11-30T17:35:00.006-06:00

November 2009: Boutari Skalani. Impress your friends with your taste for rare international wines. Skalani Boutari is a blend of Kotsifali and Syrah. Cultivated on the Isle of Crete, this earthy wine is reminiscent of a South American Malbec. As you sip this wine, one can’t help but imagine the peaceful sounds of waves splashing against the rocky Cretian coast. Find this wine online at www.boutari.gr.

How to Conduct a Proper Harassment Investigation

2009-11-16T11:36:00.006-06:00

Harassment claims are one of the most significant and popular threats against employees and employers today. Harassment and harassment-related claims are destructive to workplace morale, reduce employee productivity, and detract from an employer’s mission and purpose. While the most common form of harassment is sexual harassment, harassment based on any protected status is improper.

To further complicate matters, employers also must be concerned with lawsuits filed by accused harassers who were terminated in the employer’s attempt to provide prompt remedial action without conducting a proper investigation.

To avoid liability to both the complainant and the accused harasser, it is imperative for an employer to conduct responsible, thorough, and effective investigations into harassment complaints. Employers must act affirmatively to create policies against harassment and must effectively implement these policies.

So, what should you as the employer do? The steps below are a good general guide to avoiding harassment claim liability:

Step 1: Create Anti-Harassment Policies – Every employer should promulgate a clearly written, well-publicized anti-harassment policy. Make sure your policy applies to any harassment based on protected status. A policy always should include (1) the company’s opposition to harassment, (2) examples of harassment, (3) complaint procedures, (4) individuals to contact if an employee feels he/she is being harassed, (5) a statement that the company will promptly investigate any complaint, and (6) a strong statement that retaliation against complaining employees will not be tolerated. Always distribute a copy of your anti-harassment policy to all employees and require all employees sign a form acknowledging receipt. You should also post a copy on workplace bulletin boards and periodically redistribute the policy. It is also a good idea to periodically revise and update your policy based on any changes in the law.

Step 2: Implement Anti-Harassment Policies – You should establish an easy line for communicating harassment complaints. You also should designate at least two people, one male and one female, to whom an employee should complain about harassment allegations. Once a harassment complaint is made, you should choose an investigator trained in conducting harassment investigations. The investigator always should be impartial, unbiased, and objective.

Step 3: Conduct a Thorough and Proper Investigation – A good investigation always should begin by reviewing (1) the company’s existing policies and procedures, (2) applicable federal and state discrimination laws, and (3) all relevant documents, including the complainant’s and accused harasser’s personnel files. Next, the investigator should interview the complainant. The interview should be held in a neutral place where other employees cannot observe the interview. A witness should always be present for the complainant’s interview. After the interview, the investigator always should ask the complainant to sign a statement summarizing the complaint. The witness also should take notes of all relevant facts stated during the interview. After the complainant interview, the investigator should interview the accused harasser. Always make sure the accused understands the investigation process and understands the company will not tolerate any retaliation against the complainant. Finally, the investigator should interview all relevant witnesses including (1) those who witnessed the incident(s), (2) those with relevant information, (3) authors of relevant documents, (4) people the complainant asked to be interviewed, and (5) people the accused asked to be interviewed. The investigator always should draft witness statements after interviews and have each witness review and sign the statements.

Step 4: Come to a Resolution – You always must complete the investigation process. This includes final resolution. After all the interviews and document review, the investigator often must make some credibility determinations. After resolving any credibility issues, the investigator must draw a conclusion as to what happened and recommend appropriate corrective action. The goal of corrective action should be to prevent future harassment. The investigator should present his or her written recommendation to a designated supervisor – usually a human resources manager. Once a decision is finalized, you should work to implement the results in a timely manner. First, meet with the accused harasser to explain the results. Second, meet with the complainant to discuss (1) the investigation results, (2) the nature of any disciplinary action, (3) what the complainant should do if he or she experiences retaliation, and (4) continued confidentiality requirements regarding the investigation. There is no need to notify any other employees.

It is important to remember that each harassment case is different and these general guidelines may be insufficient for your particular case. You should take care to create anti-harassment investigation policies that are flexible for each individual case. If you are ever in doubt, your best bet is to contact counsel before proceeding.

Coles Corner Winning Wine: October 2009 (Archive)

2009-11-05T18:37:00.005-06:00

October 2009: Llano 2007 Vinter's Selection Cabernet Shiraz. If you've never tried Texas wine, this wine is a great introduction. The fruit is brighter than a traditional Cabernet and the unmistakable spice of the Shiraz shines through. Grab a bottle of this wine now and next October be sure to mark your calendar for the 17th Annual Llano Estacado "Grape Day."

The Importance of Human Resources

2009-10-20T13:10:00.002-05:00

In our practice, we often encounter companies with little to no Human Resources department, division, or personnel. More often than not, small businesses assign the administrative HR tasks (processing applications, completing I-9s, administering health insurance plans, payroll, etc.) to other office personnel, whether it is an Office Manager, a Staff Accountant, or an Executive Assistant (or some combination/split thereof). While most small businesses view this as a cost-saving measure, these setups can be quite harmful to businesses in the long run.

While HR may not be a traditional revenue-generating arm of your business, HR certainly can save your company money and even may add to the bottom line. To see this, though, you must recognize HR is much more than a payroll and personnel paperwork administrator.

So how can HR save your company money? Any business that has been involved in significant employment discrimination/retaliation litigation should know this answer. In such litigation, the existence of HR personnel, as well as the HR personnel’s performance, is critical. Whether or not a case proceeds to trial (and by extension the risk of a large judgment against the employer) hinges on several key questions:

• Did the company have an HR department?

• Did the company have policies regarding discrimination/retaliation/harassment and complaint procedures?

• Did the company follow those policies and procedures?

• Did the company take steps to remedy any discrimination/retaliation/harassment?

These are issues a highly skilled and trained HR professional handles best. Your payroll clerk, benefits administrator, office manager or accountant may not have the time or skills to assess and address these vital issues adequately and appropriately. As a result, any failures may result in a large judgment assessed against your company. I’m willing to bet your small business does not have a line entry on your balance sheets for “large adverse jury verdict.” A competent HR department (or a competent HR employee) is your first line of defense against such judgments and, by extension, can save you significant money.

You may remember I said earlier that HR can make you money. I know you might be questioning my sanity at this point, but it is true. Statistics regularly show a happy workplace is a more productive workplace. Higher productivity often leads to higher revenue. For example, think about how much it costs you every time an employee quits and you must hire and train a replacement. So how do you get a happy workplace?

We’ll be blogging soon about the human side of HR (which absolutely leads to a happy workplace) but, in the meantime, HR can create a happy workplace if you:

• Act as a sounding board for employees

• Train first-line supervisors and managers about proper employee supervision, providing positive feedback, and resolving employee disputes

• Ensure all company policies and procedures are followed and uniformly applied

• Act as a company’s first-line mediator between feuding co-workers

I think we can agree we each want a happy workplace that is as productive as possible. After today, I hope we also can agree achieving that goal calls for a Human Resources department or, at a minimum, a skilled Human Resources employee.

Coles Corner Winning Wine: September 2009 (Archive)

2009-10-20T12:58:00.011-05:00

September 2009: Wall 2006

Cabernet Sauvignon: For Cab

lovers a big and bold red

wine is a necessity. This Cab

is not quite as big and bold

as a classic Cab. But this Cab is ready to drink and delivers bright mixed berries and

a long finish.

"Salaried" Employees Are Not Always "Exempt"

2009-10-06T11:00:00.020-05:00

Employers often hold a common misconception that salaried employees absolutely are exempt from overtime wages under the Fair Labor Standards Act (FLSA). This misconception, as well as the resulting consequences from misclassifying a non-exempt salaried employee, can be costly. Salary is merely one aspect of some FLSA exemptions. The employee's duties and not his or her title or method of pay truly determine an employee's exempt or non-exempt status under the FLSA. Paying a non-exempt employee a salary does not determine per se whether the employee is entitled to overtime wages.

To best determine an employee's status you should contact an attorney, but the most common exemptions (and those exemptions in which salary is included in the analysis) include:

Professional Exemption: Primary duty requires knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized instruction OR primary duty is work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.
Administrative Exemption: Primary duty is office or non-manual work (must directly relate to management or general business operations of employer or customers). The employee must also exercise discretion and independent judgment on matters of significance.
Executive Exemption: Primary duty must be management and the employee in question must regularly direct the work of two full-time employees (or equivalent). The employee in question also must have authority to hire and terminate employees OR recommendations on these issues are given particular weight.

Again these are simply the three most common exemptions (the FLSA includes a lengthy list of exempt employees) and even the particular requirements for these exemptions can be tricky. Assuming the employer properly classified the employee as exempt, an employer still can destroy this exemption by its actions. Some common actions that destroy exempt status are: docking pay for work quality or quantity and using exempt employees to perform non-exempt work.

Remember, your general conceptions regarding salaried versus non-salaried employees might not be entirely accurate. Ensuring you properly classify your employees as exempt or non-exempt will save you money in the long run.

Coles Corner Winning Wine: August 2009 (Archive)

2009-09-09T18:46:00.002-05:00

August 2009: Terrunyo 2005 Carmenere: In a word, this wine embodies the quintessential red wine: rich fruit, smooth, and bold. The Carmenere grape is most commonly associated with Chile, and this wine showcases the grape and the Chilean contribution to the wine industry. Readers of this blog will know that we prefer light tannins and easily accessible wines and this wine is a prime example.

Are You Prepared? USCIS Conducting Random H-1B Inspections

2009-09-01T09:24:00.002-05:00

If you employ H-1B nonimmigrants you should note the U.S. Citizenship and Immigration Services (USCIS) is conducting thousands of random on-site inspections of employers who sponsor H-1B nonimmigrant employees. Several sources indicate USCIS intends to conduct upwards of 20,000 site visits in 28 cities. The purpose behind the visits is to verify information submitted in the nonimmigrant petitions by the employers. Specifically, USCIS is confirming the employer is paying the prevailing wage and the employee is employed in the position identified in the petition.

What do these inspections mean for employers of H-1B nonimmigrants? First, ensure you fully comply with the H-1B visa requirements, i.e. paying the prevailing wage. Second, properly maintain a Public Inspection file for each H-1B petition you filed. Included in this file should be a copy of the petition and any supporting documentation provided, a copy of the certified Labor Condition Application, proof of the prevailing wage determination, copies of all required posted notifications, and documentation evidencing compensation paid to the H-1B nonimmigrant employee. As many of these inspections are being conducted by contracted workers it is impossible to know the exact information an individual inspector will request. Maintaining a file with the documents identified above, however, should make any inspection less painful. In addition, you should contact your immigration lawyer if USICS contacts you or arrives at your site for an inspection. Your immigration lawyer likely has more knowledge regarding the information provided in the petition.

Keep DREAM-ing

2009-08-19T16:21:00.006-05:00

In March 2009, we wrote a blog on the DREAM Act (http://colesfirm.blogspot.com/2009/03/dream-economic-stimulus.html), a proposed federal law to address, in part, the issue of illegal immigrants in the U.S. Someone recently asked me for an update on the status of the Act. Thus far, the DREAM Act has stalled in Congress. Not surprising, frankly. In this economic climate, granting additional rights for illegal immigrants is hard to sell to constituents. Perhaps we are not selling (or packaging) the benefits of immigration reform properly.

Recently, I was asked why states are not involved in this issue. Historically, many changes in public policy began at the state level. As states lead the way, federal legislation often follows. Additionally, state level efforts often provide an opportunity to test and refine legislative proposals in a real-world environment. With that in mind, I realized state governments have an opportunity to address the illegal immigration problem, even in ways the federal government cannot. Arizona attempted to tackle the problem by threatening businesses with revocation of their license for knowingly employing illegal immigrants. The Arizona statute also mandates employers use the federal E-Verify system to verify if employees are providing legitimate documentation. While that proposal certainly satisfies the anti-immigration forces, I cannot say the new law actually changes anything. Add to that the fact that the E-Verify system has acknowledged flaws and inaccuracies, and the Arizona statute may be more window dressing than legislative action.

Here are a few ideas for state proposals that may have an impact on illegal immigration:

1. Public education – Currently, illegal immigrants attend public elementary and high schools across the country. Post-secondary education, however, is not as available. The authors of the DREAM Act intended to address this issue, but have been unable to do so. States can intercede and institute a number of policy and regulatory changes, including permitting illegal immigrants to enroll in post-secondary institutions and requiring the illegal immigrant students to (a) perform on-campus work, (b) volunteer for community organizations, (c) pursue degrees in industries with labor shortages, like nursing and teaching, or (d) repay the non-resident cost of tuition over a specified term. These policy and regulatory changes provide an opportunity for those illegal immigrants who often reside in the U.S. through no fault of their own and who seek opportunities for greater integration into mainstream society but find most avenues blocked due to a lack of education. This policy and regulatory approach acknowledges the futility of a pure deportation approach and instead seeks to address the underclass of laborers who provide an environment ripe for unscrupulous and predatory employers.

As an aside, states also could offer high school graduates the privilege of a driver’s license. States could provide a license for those students who enroll in post-secondary schools, maintained a certain grade point average in high school or college, and/or otherwise comply with the laws of the state.

2. Corporate taxes – Most states tax employers based on profit and typically permit employers to deduct their employee costs from their gross revenue. States could enact a law or regulation that makes clear that employers may not deduct the salaries paid to individuals without correct Social Security Numbers. States can elect to use the Social Security Administration’s database to determine which employees do not have valid Social Security Numbers. The salaries paid to those employees, as shown by the employer’s quarterly state unemployment tax filings, could be added to the employer’s otherwise taxable revenue to create a greater tax base and effective rate. In effect, the employer does not receive a tax credit for employing illegal aliens.

3. Automobile insurance – It is a commonly-accepted fact in some parts of the country that illegal immigrants create a population of uninsurable drivers. The tax-paying citizens of the state bear the cost of the accidents caused by these drivers. First, uninsured motorist coverage reflects the reality that insured drivers and their passengers need coverage in the event of an accident with an uninsured motorist. Second, county healthcare facilities (and, thus, the taxpayers in the county) often bear the cost of treating patients without insurance coverage. Third, hit-and-run accidents are to be expected when the driver fears deportation for a minor traffic offense.

To be clear, not all uninsured drivers are illegal aliens. That said, culling illegal aliens from that group would decrease the risk of an accident with an uninsured motorist and reduce the cost to taxpayers. But doing so would require states to issue illegal immigrants drivers licenses and mandate insurance companies offer automobile coverage without regard to the driver’s immigration status. States could enact a policy simply stating insurance companies may not charge discriminatory rates or refuse coverage to any driver in possession of (1) a valid license issued by the state and (2) a valid Social Security Number or Individual Taxpayer Identification Number (ITIN). This would encourage illegal immigrants to obtain an ITIN and further the common goal of reducing the cost of illegal immigration. Insurers certainly could charge rates using other factors which apply equally without regard to immigration status.

4. Unemployment tax rates – Most states tax employers 2-3% for unemployment taxes. This rate may be increased by an “experience rating,” which measures an employer’s history of unemployment claims. States could modify their formula to include an increase in unemployment tax rates for employers hiring illegal immigrants. Much like the corporate/franchise tax proposal, this proposal focuses on wages reported by employers and uses the state’s taxing authority to discourage hiring illegal immigrants.

As a final note, these proposals may not work in every state. Some laws and/or regulations currently in place may prevent a state from enacting such a law or pursuing such a policy or regulatory shift. The point of this blog is two-fold. First, we should work collectively and creatively to address a widespread issue that will not go away if we ignore it. Second, purely punitive efforts aimed at illegal immigrants typically punish the community and encourage the criminal.

Employee Codes of Conduct Reconsidered

2009-08-15T09:34:00.004-05:00

This time of year is big news in Dallas, and Texas in general. As high school, college, and professional football seasons begin, even the most casual sports fan will find it impossible to avoid conversations about Cowboys and Longhorns.

In the HR context, recent news from the NFL has focused attention on Employee Codes of Conduct. As you likely heard, two NFL players have been suspended for at least part of the 2009 – 2010 NFL season. Michael Vick, recently released from prison for operating a dog fighting ring, faces an uncertain future; NFL Commission Roger Goodell suspended Vick for his off-field conduct and recently “conditionally reinstated” Vick. When Vick will play in his first game for his new team is a question only Commissioner Goodell can answer. Donte’ Stallworth, however, absolutely knows he will not play NFL football until after the upcoming season ends. Commissioner Goodell suspended Stallworth without pay for the entire 2009 – 2010 season after Stallworth pleaded guilty to DUI manslaughter. Commissioner Goodell suspended Vick and Stallworth, in part, based on the NFL’s personal conduct policies.

The Vick and Stallworth cases are fairly easy cases, at least in the HR context. Both Vick and Stallworth pleaded guilty to criminal acts. An Employee Code of Conduct that prohibits illegal acts hardly raises an eyebrow. But what about acts that are not illegal? Off-duty policies may prohibit a wide range of personal (perhaps private) conduct. Intoxication, smoking tobacco, and nudity are not per se illegal. When and where you do it determines if you violated a law. When, why, and how may an employer regulate such off-duty conduct, especially when such conduct is not prohibited by any state law?

Oddly enough, state and local laws provide some guidance…but in the opposite direction. Several states have enacted “lifestyle discrimination” statutes that protect employee conduct that occurs off-duty and off-premises, so long as that conduct is legal. The vast majority of these statutes protect smokers, while only a handful protect “any legal activity.” In the absence of these legal protections, employers may discipline and/or discharge at-will employees for off-duty conduct wholly unrelated to their work.

To be clear, some employees, some employers, and some conduct are of the sort that bad publicity can be severely detrimental to an employer’s business. In an era where everyone seems to live their private lives in an online public forum, Employee Codes of Conduct have and serve a legitimate business purpose. Most, if not all, businesses will benefit from an Employee Code of Conduct. If nothing else, a candid internal discussion about such a policy will create a more enlightened (and hopefully more self-aware) workforce that understands their role as ambassadors for their organization. Let’s face it, a Code of Conduct is not an attempt to impose a one-life-fits-all approach. At its core, such a policy should remind us that we live each day as representatives of our friends, families, schools, clubs, and employers. Coaches regularly remind their players that they represent their organization and serve as role models in the community. It may shock employees to learn the same applies to them.

Coles Corner Winning Wine: July 2009 (Archive)

2009-08-05T10:08:00.003-05:00

Sokol Blosser's Evolution is a fun and lively blend of nine grapes. A self-described lush, off-dry, somewhat tropical wine, we found it fruit forward and easy to drink. Enjoy it this summer as a great wine for the season.

Immigration Update

2009-07-23T10:02:00.008-05:00

As always, USCIS and DOL continue changing and unchanging rules and regulations. Some important changes of note are the further delay of E-Verify and DOL's lifting of the H-2A suspension. As noted in a previous posting, E-Verify already moved its deadline impacting Federal contractors several times. Recently USCIS announced a further delay and federal contractors will not be required to use E-Verify until September 8, 2009. We will have to wait and see whether this date gets moved once again.

In another change of note, the DOL recently lifted its H-2A visa suspension. Seasonal employers (traditionally farmers) often rely on H-2A visas to staff their temporary and seasonal needs. On December 18, 2008, DOL changed the requirements for employers who sought seasonal workers using the H-2A visa. These new regulations had an effective date of January 17, 2009. DOL, however, on May 28, 2009 announced a nine-month suspension of these regulations. In response to an injunction, DOL lifted the suspension on June 29, 2009. We are now left with the amended regulations posted in the Federal Register on December 18, 2008.

While it is not necessary to discuss the changes in detail, one significant change means employers are required to not only advertise the available position in the area of intended employment, but also advertise in any state which DOL designates as a state of traditional or expected labor supply. This new requirement increases employers' costs as employers must place newspaper advertisements in several states.

Ties That Bind Event a Tremendous Success

2009-07-19T22:51:00.017-05:00

Last week The Coles Firm traveled north to the Collin County Adventure Club and led the DAYL Ties That Bind presentation. Over 50 young men from the YMCA sports camp attended the presentation. The crux of the presentation focused on teaching these young men, ages 12 - 17, the importance of dressing professionally and culminated in necktie tying lessons. It was quite an adventure teaching so many young men at one time how to tie a necktie, but by the end of the day everyone had a perfect knot.

DAYL's Ties That Bind committee works with local schools and organizations to teach young men and women ages 12 - 17 the importance of dressing professionally and making positive first impressions. The participants are taught how to tie neckties and scarves in a variety of knots. Ties That Bind seeks to help young men and women begin laying the foundation for a successful career. If you know a school or organization to whom Ties That Bind can present or if you are interested in conducting a tie drive at your office, please contact Paul Simon at PaulS@colesfirm.com. Ties That Bind will present to over 200 kids this year and greatly appreciates all donations.

Rethinking Ricci

2009-07-15T10:18:00.010-05:00

On April 22, 2009, we posted here about a race discrimination case pending before the United States Supreme Court called Ricci v. DeStefano. In that case, white and Hispanic firefighters in New Haven, Connecticut sued the city, claiming they were denied promotion because of their race. For those of you who have not heard (this case has been all over the news and now plays a significant role in the Supreme Court confirmation hearings for Judge Sonia Sotomayor), the Supreme Court issued a decision on the case on June 29, 2009.

In a 5-4 decision (written by Justice Kennedy and in which Justices Roberts, Scalia, Alito, and Thomas joined), the Supreme Court decided in favor of the firefighters and held the city's action in discarding the promotion test results violated Title VII.

The city argued they discarded the test results because the results appeared to violate Title VII's disparate impact provisions. Specifically, the city argued the test results favored white and Hispanic firefighters over black firefighters. The white firefighters, however, argued the city engaged in disparate treatment discrimination against them. Justice Kennedy sought to resolve the conflict between disparate impact and disparate treatment provisions in Title VII. In doing so, he adopted the "strong-basis-in-evidence standard" to resolve any conflict between disparate treatment and disparate impact provisions.

Justice Kennedy wrote that before an employer can engage in intentional discrimination, the "employer must have a strong basis in evidence to believe it will be subject to disparate impact liability if it fails to take the race-conscious, discriminatory action." Justice Kennedy found the city had no strong basis in evidence that the promotion tests were inadequate or flawed. Justice Kennedy also held fear of litigation alone is not enough.

Moving forward, therefore, employers must remember this strong-basis-in-evidence standard when making race-based decisions in the workplace. Does the employer have a history of racial disparity? Is the employment decision-making process open and fair? What exactly forms the basis for the employer's decision to make a race-conscious decision?

The more interesting (and less discussed) portion of the Court's decision in Ricci is Justice Scalia's concurrence. Justice Scalia argues an inherent conflict between the disparate treatment and disparate impact provisions in Title VII. Justice Scalia argues any race-based decisions made to remedy potential disparate impact are in fact disparate treatment discrimination decisions. Justice Scalia seems to indicate both a willingness and desire to remove disparate impact protection. Although we do not anticipate any such move (based on the Court's current membership), this concurrence may provide support for employers in district and appellate courts as they address lawsuits which invoke the Ricci decision.

Are you ready for the new minimum wage?

2009-07-13T17:28:00.007-05:00

On Friday, July 24, 2009, the federal minimum wage will increase to $7.25/hour. Are you ready? Take this simple quiz:

1. Do you have proper posters that detail the new minimum wage for all your work locations? The same poster for all locations may not be sufficient.

2. Are you prepared for the overtime consequences of a mid-week and/or mid-pay period change in hourly rates? Calculating overtime when the hourly rate changes during the relevant period can be difficult. The money you save by not changing the hourly rate at the beginning of the pay period may be insignificant when compared to the cost of administering payroll for that same period.

3. If you have tipped employees subject to the "Tip Credit," do you have sufficient employee notices posted to qualify for the Tip Credit? A failure to post sufficient notices regarding the Tip Credit could make an employer ineligible for the Tip Credit.

4. Are you monitoring state minimum wage increases? Nearly half of all states have a minimum wage increase scheduled for July 2009, including some states whose increase already became effective on July 1, 2009.

If you cannot answer "Yes!" to each of these questions, we suggest you get started because July 24 will be here before you know it.

Coles Corner Winning Wine: June 2009 (Archive)

2009-07-07T18:01:00.004-05:00

June 2009: August Briggs' 2006 Charbono is an uncommon grape that is easily accessible. The wine brings the earthiness of a Malbec but delivers without overpowering. The tannins are light and the flavor is bold yet smooth with a hint of smokiness and spice.

Big Win for Employers

2009-07-07T14:36:00.004-05:00

On June 18, 2009, the United States Supreme Court issued a decision which gave employers a big win in the employment litigation arena. In Gross v. FBL Financial Services, Inc., No. 08-441, the Supreme Court addressed mixed-motive cases of age discrimination under the Age Discrimination in Employment Act ("ADEA").

Mixed-motive employment cases are cases in which an employee alleges he suffered an adverse employment action because of both permissible and impermissible considerations. In the Gross case, the Plaintiff alleged at trial that he was reassigned and demoted at least in part on his age. The trial court instructed the jury that it must return a verdict for the Plaintiff if the Plaintiff proved that age was a motivating factor in the Defendant's decision to demote the Plaintiff. The jury then found for the Plaintiff. After the Eighth Circuit Court of Appeals reversed the decision (requiring the Plaintiff prove age was the motivating factor), the Supreme Court granted review.

The Supreme Court, in a majority opinion authored by Justice Clarence Thomas and in which Chief Justice John Roberts, Justice Antonin Scalia, Justice Samuel Alito, and Justice Anthony Kennedy joined, vacated the Court of Appeals decision and held a plaintiff bringing an ADEA disparate treatment claim must prove, by a preponderance of the evidence, that age was the "but-for" cause of the challeneged adverse employment action.

You may be asking why the Supreme Court vacated the Court of Appeals decision when it appears the two were in agreement. Why not simply affirm the Court of Appeals decision? The Court of Appeals decision held the trial court incorrectly instructed the jury under the standard established in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In a move sharply criticized by Justice John Paul Stevens in his dissent, Justice Thomas' opinion held the Court of Appeals was in error because a Price Waterhouse jury instruction is never proper in an ADEA case.

In the majority opinion, the Supreme Court held interpretation of the ADEA is not governed by Title VII decisions such as Price Waterhouse because Title VII is materially different with respect to the relevant burden of persuasion. Specifically, Justice Thomas stated "[u]nlike Title VII, the ADEA's text does not provide that a plaintiff may establish discrimination by showing that age was simply a motivating factor." Justice Thomas also pointed out Congress never added such a provision to the ADEA when it amended Title VII, "even though [Congress] contemporaneously amended the ADEA in several ways..."

Moving forward, therefore, "[t]o establish a disparate-treatment claim under the plain language of the ADEA...a plaintiff must prove that age was the 'but-for' cause of the employer's adverse decision." Furthermore, "the plaintiff retains the burden of persuasion to establish that age was the 'but-for' cause of the employer's adverse action."

Whatever your belief regarding the soundness of this opinion, employers certainly benefit greatly. This decision also firmly settles the law regarding mixed-motive analysis in ADEA cases (joining the previously-settled law in Title VII cases). The unanswered areas, though, are ADA cases, as well as state discrimination claims and Section 1981 race discrimination and retaliation claims. It looks like we just may be headed to overtime...

Are You Properly Classifying Employees and Independent Contractors?

2009-06-29T09:50:00.005-05:00

Recently our Firm has noticed a trend with the Texas Workforce Commission ("TWC") in which the TWC finds employers are improperly classifying employees as independent contractors. In Texas, an employer must pay unemployment tax for each employee. An employer, however, does not pay unemployment tax for any independent contractors associated with the employer. TWC uses a twenty factor test to determine whether a worker is an employee or independent contractor and, therefore, whether employers must pay unemployment taxes associated with the worker.

Whether in response to the economic hardships we currently face or a belief that employers are manipulating the system, TWC appears to be auditing companies and industries with a history of classifying workers as independent contractors. Despite these companies' history of classifying workers as independent contractors, TWC has reversed prior decisions and determined these independent contractors should be classified as employees. The repercussions of TWC's determinations are devastating since employers now must pay several years of unpaid taxes and fines. Looking forward, the repercussions could become more severe as the long-standing business structure of many companies loses viability because of the increased unemployment tax. The real consequence, however, is not the minimal state tax (usually 2.7% in Texas). The real consequence is employers may owe the federal government nearly 15% for the same workers. Typically this amount is split 50-50 between employees and employers; employers who fail to withhold, however, may be forced to pay the entire amount.

What does this mean for you, the employer? If you use independent contractors in your business, even if you have used independent contractors for years, check with an attorney to determine if these workers are properly classified. An audit of your workforce should not take long and can save your company legal issues down the road.

Firm Happenings

2009-06-03T18:15:00.003-05:00

Summer has arrived at The Coles Firm, which means we here at the Firm have decided to get out of the office a little.

Food For Thought: In just over two weeks, Food for Thought takes place. Food for Thought is a celebrity chef event hosted by the Dallas Association of Young Lawyers (DAYL) and co-sponsored by The Coles Firm. As a member of DAYL's 2008 Leadership Class, Dustin is one of the organizers on the Food for Thought committee and has been instrumental in the planning and preparation for this fantastic event. The proceeds from the event go to Big Thought, a non-profit creative learning organization striving to make imagination a part of everyday learning for children using arts, culture, and education as tools and catalysts. The event includes several great Dallas chefs, including Lisa Garza of Food Network's The Next Food Network Star, Blythe Beck of Central 214, and Marco Martinez of Matt's Rancho Martinez. Shelly Slater of WFAA Channel 8 will act as the Mistress of Ceremonies for the evening and Rep. Rafael Anchia will present The Gavel of Excellence award to Blockbuster President and CEO Jim Keyes. There is still plenty of time to buy tickets. We look forward to participating in this event and supporting a great cause.

Ties That Bind: This Summer, The Coles Firm also will assist another great DAYL committee, Ties That Bind. Ties That Bind works with local schools and organizations to teach young people the importance of dressing professionally and making positive first impressions. As part of every presentation, young men and women are taught how to tie a necktie or scarf and are provided a necktie or scarf of their own as a gift for their future development. Paul is a leading co-chair on Ties That Bind and is currently preparing several great presentations in the upcoming months. We're very excited to see what Paul has in store for this committee this year.

Teen Leadership Academy: Dustin is also a co-chair for DAYL's Teen Leadership Committee and this July the committee is hosting the inaugural Teen Leadership Academy for high school students entering their senior year next fall. Every high school in Dallas (both public and private) was invited to submit a male and female of their choice to participate and the committee got a great response. Using prominent Dallas leaders, the two-and-a-half day conference will include team building exercises and presentations focusing on leadership, community service, and the future of Dallas. The conference will culminate in a community service project.

DAYL's One to Watch: The Coles Firm also wants to recognize Dustin and Paul for each being named a DAYL "One to Watch." In January, Dustin was recognized by DAYL as "One to Watch" for his active participation and support of DAYL. A few months later, Paul was recognized as the "One to Watch" in May because he personifies the bright young leaders we need in the legal community. The Coles Firm appreciates Dustin's and Paul's enthusiasm and desire to participate in DAYL and further The Coles Firm's mantra, "Committed to Our Community."

As you can see, it's shaping up to be a busy summer. Of course, we wouldn't have it any other way.

Coles Corner Winning Wine: May 2009 (Archive)

2009-06-03T18:10:00.003-05:00

Margerum's M5: Add 50% Syrah, 27% Grenache, 9% Mourvedre, 4% Counoise, and 4% Cinsault, and that leaves 6% to creativity. M5 is an amalgamation of 5 grapes from 15 vineyards. The result is a very drinkable and flavorful red wine that satisfies newcomers and connoisseurs alike. The fruit is vibrant and complex but not overwhelming.

Presentation at the Multi-State Conference

2009-05-20T18:02:00.012-05:00

Last week The Coles Firm presented "From the Mouths of Babes: Straight Talk About Legal Ethics" at the 27th Annual Multi-State Labor and Employment Law Conference held in San Antonio, Texas. While ethics is extremely important to our profession, presentations on the subject often are dry. To maintain attendees' attention and spark intellectual debate, From the Mouths of Babes tracked lawyers, clients, employees, and ex-employees (all played by child actors) through a typical scenario involving the balancing of client demands and the rules of ethics. Below is a video clip of a scene from the presentation involving the defendant's attorney, Fred Buchanan, and the defendant's CEO, Hank Savage.

We enjoyed the opportunity to present at the conference and engage in insightful conversations with attorneys from across the U.S.

Potential Arbitration Changes in Texas

2009-05-20T11:20:00.004-05:00

Arbitration of employment disputes might be in trouble. On March 6, 2009, Representative Dan Gattis (R – Milam, Williamson) introduced House Bill 2696 in the Texas House of Representatives during the 81st Legislative Session. The Bill was co-authored by Representative David McQuade Leibowitz (D – Bexar). The Bill seeks to amend portions of the Civil Practice and Remedies Code related to arbitration proceedings and arbitration agreements.

Specifically, the Bill would amend the Civil Practice and Remedies Code in Texas in the following ways:

1. Arbitration agreements must include a statement, initialed by each party to the agreement, stating the party has chosen to arbitrate a controversy that exists at the time of the agreement (if Subsection (a)(1) of the Civil Practice and Remedies Code applies) or stating each party has chosen to arbitrate any controversy that arises between the parties after the date of the agreement (if Subsection (a)(2) of the Civil Practice and Remedies Code applies);

2. Agreements to arbitrate must be prominently displayed in the document and in 12-point bold type; and

3. A party to a contract may not require any other party to the contract to agree to arbitration as a condition of the contract.

What does this mean? Right now, not a whole lot. The Bill was left pending in committee on April 15, 2009 and no further action has been taken by the Texas House of Representatives. Furthermore, the Texas Legislature adjourns on June 1, 2009 and does not reconvene until 2011 unless the Governor calls a special session. It appears unlikely, therefore, the Texas Legislature will take any additional action on this bill in the next eleven (11) days.

This Bill could signal a change on the horizon, though. If the Bill is re-introduced during the next session and further action is taken, the consequences could be significant. Currently, many employers require their employees to agree to arbitrate any potential employment disputes as a condition of employment. This Bill would prevent such agreements. Arbitration in the employment context could become a thing of the past.

For the time being, nothing is changing but we’ll keep an eye on the next regular legislative session and any special sessions and keep you updated. In the meantime, it is always a good idea to review your arbitration agreements and decide if arbitration is really the best idea for you and your company.

Coles Corner Winning Wine: April 2009 (Archive)

2009-05-11T21:19:00.003-05:00

April 2009 - The 2005 Grenache Blanc from Curran Wines can be described best as starting with strong herbal/grassy notes of a Sauvignon Blanc then balanced with light sweetness and a slight hint of carbonation. But this is no dessert wine. The Grenache Blanc is crisp and delivers a lively fresh glass that is perfect for the season.

Employment-Based Immigration: What Every Student Should Know

2009-04-30T09:04:00.009-05:00

On April 16, The Coles Firm presented the speech "Employment-Based Immigration: What Every Student Should Know" to a room-full of students at a local Dallas college. The speech primarily focused on employment-based visas including, H-1B, J, L, E, and TN. Also discussed were potential pitfalls with Green Card applications and non-immigrant visas.

Indicative of immigration law constantly changing and evolving, on the day of the presentation, the government extended the deadline for government contractors to enroll in E-Verify. Government contractors have until June 30, 2009 to enroll in E-Verify. This is the third extension of the deadline for government contractors. As discussed during the presentation, E-Verify is an internet based system that allows employers to quickly verify employment eligibility of new hires. Currently, E-Verify is voluntary (except Government Contractors) and free to employers. An employer must be enrolled in E-Verify for a student to be eligible for the STEM OPT extension (29 months work authorization versus standard 12 months).

We thoroughly enjoyed answering questions from the students and hopefully provided a framework for the students as they seek employment after graduation.

New Texas Non-Compete Decision

2009-04-27T17:50:00.007-05:00

On April 17, the Texas Supreme Court delivered another opinion on its interpretation and enforcement of non-compete agreements. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding appears to expand, albeit minimally, the Court’s well-known Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson decision. In 2006, the Court in Sheshunoff expanded its prior decisions on non-compete agreements and found a non-compete agreement enforceable where (1) the employer expressly promised to provide the employee confidential information, (2) the employee expressly promised to not disclose the information, and (3) subsequently the employer provided the employee with confidential information.

Mann Frankfort differs from Sheshunoff, however, because the employer in Mann Frankfort made no express promise to provide the employee access to confidential information. Based on this failure to expressly promise to provide confidential information, the Court of Appeals refused to enforce the confidentiality agreement. The Texas Supreme Court, however, reversed the Court of Appeals and held that an implied promise by the employer to provide confidential information satisfies the Sheshunoff requirements.

Is there a possible pitfall with non-compete agreements that rely on an implied promise? The Court in Mann Frankfort, whether or not intentional, appears to limit an implied promise as it relates to non-compete agreements. The Mann Frankfort decision suggests an implied promise exists only “when the nature of the work the employee is hired to perform requires confidential information to be provided for the work to be performed by the employee.” This appears to indicate the Court might find, depending on the nature of the work, an employer did not impliedly promise it would provide confidential information. What type of work would result in an implied promise not being found? It is uncertain, but the Court almost certainly will determine an implied promise exists for CPAs (the position in Mann Frankfort). Beyond a CPA, we must wait to see if the courts extend Mann Frankfort to other professions or jobs.

So what does the prudent employer do? The easiest answer is expressly provide in your non-compete agreement that you (the employer) promise to provide the employee confidential information. There are many other issues with the validity and enforceability of non-compete agreements, but providing this express promise should limit exposure to any pitfalls in the Mann Frankfort decision.

A No-Win Situation

2009-04-22T21:49:00.006-05:00

The United States Supreme Court heard arguments yesterday in the case of Ricci v. DeStefano (click here for a transcript of the oral arguments). The case stems from a decision by the city of New Haven, Connecticut to throw out the results of a fire department promotion exam because too few minorities passed. As a result, a group of 20 white firefighters sued the city for race discrimination under Title VII of the Civil Rights Act of 1964.

The importance of this impending decision and its far-reaching effects resulted in coverage by, among other media outlets, MSNBC and CNN.

While the city argues it risked a disparate impact race discrimination suit by the minority firefighters if it carried out the promotions based on the test results, the white firefighters claim the city intentionally discriminated against them by refusing to promote them on the basis of race. To put it bluntly, and as Justice David Souter stated during oral arguments yesterday, the city is left "in a damned if you do, damned if you don't situation."

If the city carried out the promotions, the minority employees could have sued under Title VII for race discrimination alleging the test created a "disparate impact" due to alleged flaws in the tests that caused minorities to score lower on the tests than white employees. However, since the city threw out the test and the promotions because no minorities would be promoted, the white firefighters argue the city made an employment decision based on race (i.e. intentional discrimination). Both sides make a compelling case.

As you can imagine, this case is being closely watched and has garnered interest from numerous advocacy and business groups. These groups, and all of us really, want to know how far the Court will go in allowing race to be used as a consideration in filling jobs.

While a decision is not expected for a few months, it appears there currently is an ideological split on the Court with Justice Anthony Kennedy as the crucial swing vote. Many insiders believe Justice Kennedy will side with the white firefighters, leading to a 5-4 decision in their favor.

So where does that leave employers? For the time being, without an answer. The best hope is clear guidance from the United States Supreme Court this summer. We'll be sure to update you on their decision as soon as it is released and let you know the impact of that decision on your business.

Coles Firm Chosen to Present at HR Southwest

2009-04-16T09:22:00.003-05:00

The Coles Firm will present "Candid Camera: Secrets from Plaintiffs' Lawyers" on Wednesday October 14, 2009 at 2:00 p.m. at the Society for Human Resource Management (SHRM) HR Southwest Human Resources Conference and Exposition at the Fort Worth Convention Center in Fort Worth, Texas.

HR Southwest, currently in its 68th year, is the largest regional Human Resources conference in the United States and offers more than 100 certified educational sessions and more than 250 exhibitors.

We look forward to presenting to an amazing collection of Human Resources professionals and we hope you can attend our presentation.

H-1B Update

2009-04-10T11:55:00.002-05:00

The End of An Era?

It became a ritual over the last few years. Beginning in February and ending on March 31, immigration lawyers and clients worked against the clock to prepare, package, and file H-1B visa applications. Since 2007, April 1 was (for immigration lawyers and clients) the equivalent of April 15 for CPAs. But unlike CPAs and federal tax-filers across the U.S., immigration lawyers and their clients faced weeks of uncertainty after their filing. When you file your taxes you know you are due a refund or owe for underpayment. For H-1B filers, however, once USCIS received all applications they conducted a lottery to determine whose application would be considered…and whose would be returned to sender.

Apparently that process (and the glut of H-1B filings each April) is no longer. Yesterday, USCIS announced they only received approximately 42,000 applications for the 65,000 visas for the 2009-10 fiscal year. So after submitting our applications for delivery on April 1, and in light of this recent news, here are a few thoughts and observations:

-H-1B applications in the lottery era peaked in 2007, with nearly 200,000 applications filed for 65,000 visas;

-In light of the H-1B lottery, lawyers and clients have used more and more creativity to meet the demand for foreign workers; and

-The recent steep downturn in our economy (combined with the uncertainty of the H-1B lottery system) certainly had a noticeable impact on H-1B applications, cutting filings by 75% from the 2007 peak.

There is a Catch-22 at work here. Just as the Obama administration announced this week that comprehensive immigration reform remained on its agenda, we now see the impact of the economy, which suggests a reduced need for temporary work visas. But do not be misled. The problems with our immigration system primarily derive from the lack of flexibility inherent in our cap-based system. Fixed caps create artificial ceilings that, in most cases, do not reflect current needs. So in 2009, the ceiling may be reached, but the demand changed dramatically from 2007 and 2008. And while we all hope the economy will rebound and recover soon, what does that mean for 2010? The last thing a rebounding business needs in 2010 is increased demand for temporary work visas that returns us to 2007 and 2008. Perhaps a flexible cap tied to national unemployment figures? Or a bifurcated filing season, much like H-2B seasonal visas? There may not be a perfect solution, but our current system needs a healthy dose of realism and pragmatism to avoid past crises.

The Coles Firm Hosts In-House Counsel Panel Discussion for DAYL

2009-04-03T09:59:00.004-05:00

Last Friday, March 27th, we hosted a panel discussion for the Dallas Association of Young Lawyers at the Dallas Bar Association's BELO Mansion. The panel included Camille Corbin of American Airlines, Zach Garsek of Zale Corp., Clayton E. Greenberg of Title Resources Guaranty Company, Michael Li of Ryan and Company, and Kenya S. Woodruff of Parkland Health & Hospital System. Mike Coles of our firm moderated the panel discussion.

The discussion was designed to provide young lawyers with insight and information about how to establish and improve relationships with in-house lawyers. Topics included business development, billing practices and pet peeves, and client service. As a cautionary note for young lawyers, the panelists noted that while extravagant gifts and tickets to sporting events were certainly nice, most in-house counsel recognize these items lead to unnecessarily high billing rates. Certainly something important to keep in mind!

DREAM, An Economic Stimulus?

2009-03-30T16:18:00.008-05:00

With all the finger pointing on Capitol Hill these days about AIG, bailouts, and our economic turmoil, Congress’ DREAM might actually be a viable long-term solution. On March 27 the DREAM [Development, Relief, and Education for Alien Minors] Act was reintroduced in Congress. First introduced in 2001, the Act allows undocumented hardworking young people the opportunity for citizenship eligibility in exchange for a mandatory two years in college or military service.

Sure, providing citizenship to undocumented, educated children sounds nice, but how can DREAM stimulate the economy? Well according to a recent study by the Immigration Policy Center immigration provides tremendous revenue to our economy. A link to the report is provided, but here are a few highlights:

• An estimated $66 billion in new revenue over 10 years would have been generated if the 2006 immigration reform bill had passed.
• New legal immigrants would provide a net benefit of $407 billion to the Social Security Administration over 50 years.
• Immigration as a whole increases the U.S. GDP approximately $37 billion each year.

While I understand both sides of the immigration reform debate, the economic benefit of DREAM seems beneficial to all. DREAM provides these children who complete at least two years of college or military service the opportunity to provide to our economy and boost the nation as a whole.

Disturbing News From the Department of Labor

2009-03-27T17:05:00.009-05:00

Just when you think the economy is the only bad news out there, a new report from the Government Accountability Office offers some unsettling insight into one of our most important government agencies. The New York Times recently published a story about problems in the Labor Department's Wage and Hour Division. This week, Brian Ross, an investigative reporter with ABC News, reported on the same GAO report on Good Morning America.

Whether you are an employee or an employer this report should concern you. I know everyone will agree that our employees should be treated with respect and paid an honest wage for an honest day's work. At The Coles Firm we say "employees are the backbone of any successful organization." While most employers would agree, still there remain those employers whose actions dictate the need for the Wage and Hour Division. When that agency fails employees, everyone suffers.

Besides the obvious moral and ethical concerns involved with protecting all our country's workers, why does this new report matter to employers? There could be far-reaching implications for businesses everywhere. With mismanagement and inaction within the Wage and Hour Division, more and more workers might immediately turn to private litigation against employers for minimum wage and overtime payment violations.

Small claims, mistaken claims, or even frivolous claims that should otherwise be resolved by the Wage and Hour Division at a minimal cost to an employer might instantly become costly litigation. Employers could find themselves spending thousands of dollars defending these lawsuits. To make matters worse, on those occasions where an employer is in violation of wage and hour laws, the Department of Labor's penalties might only consist of back pay to employees while private litigation could result in back pay, liquidated damages (double the back pay award), attorney's fees, and costs of court.

This lax enforcement by the Wage and Hour Division also could result in increased sentiment to strengthen penalties against violating employers. As the New York Times article pointed out, George Miller (a Democratic Congressman from California and the Chairman of the House Education and Labor Committee) said "he would push to enact tougher penalties for wage violations and laws that made it easier for workers to join class-action lawsuits." Wage and hour collective actions already have become one of the fastest growing areas of employment litigation. Suddenly, wage and hour matters could become even more costly. Scary thoughts indeed!

Newly-installed Department of Labor Secretary Hilda Solis has proposed to add 250 more investigators to the Wage and Hour Division in an effort to solve some of the agency's problems. Although we applaud these efforts, we feel more needs to be done with the current Wage and Hour Division workforce. These workers need more training, more oversight, and more motivation. As I said earlier, employees are the backbone of any successful organization.

Welcome to the Coles Firm Blog

2009-03-24T14:35:00.000-05:00

The Coles Firm traces its origin back to March 2004. That's when Firm founder, Mike Coles, left Winstead Sechrest & Minick in pursuit of success as a small law firm. Five years later, we now launch the Coles Firm Blog. "We" means The Coles Firm as a whole. That includes Mike Coles, Dustin Paschal, and Paul Simon as Attorneys and Keitha Berringer and Erica Wills as Legal Assistants. As we blog during the next few weeks you will learn more about us as individual lawyers and as a law firm. And hopefully you will learn a bit about the law we practice.

Two main questions immediately come to mind when starting a blog for our law firm. First, what topics do we plan to include in our blog (also known as "Why should I read this?") and why start a blog now (also known as "What took you so long to get here?").

To answer the first question, we plan to blog about our practice. Readers should expect to see employment- and immigration-related posts. We also will include information on upcoming events, including speeches and seminars. Also, expect to find key updates, including legislative and administrative changes as well as important court cases that impact our clients. In addition, we have vowed to post one Coles Corner Winning Wines entry each month where we highlight a recent wine find by The Coles Firm. Fair warning: we are neither sommeliers nor wine snobs. We just know what we like and we hope you will agree.

To answer the second question, March 2009 is a great time to start a blog because late March and early April seem to be an important time at The Coles Firm. Maybe it's the Spring air, maybe it's the feeling of rejuvenation, but whatever the reason, early Spring is a great time to start a new project or a new venture. Over our history the following events have occurred from March 15 - April 15:

2004 - Mike leaves his prior law firm to start his own
2006 - Dustin joins The Coles Firm

2007 - The Coles Firm Immigration Practice expands to meet record demand for H-1B visas

2008 - Paul joins The Coles Firm
2008 - The Coles Firm moves to its current location
2009 - The Coles Firm launches its blog

When I (Mike) left the large firm life and embarked on this journey a smart lawyer told me the critical date is 5 years. The first 5 years can be full of ups and downs. But if you can make it 5 years you can make it forever. I hope he was right. Actually, at least as far as this law firm is concerned, I'm almost certain he was.