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Lawsuits Waiting To Happen: The Top Ten Reasons Dealerships Get Sued By Employees 7.29.2010
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  • 1. KPA CONFIDENTIAL Lawsuits Waiting To Happen:Lawsuits Waiting To Happen: The Top Ten Reasons Dealerships Get Sued ByThe Top Ten Reasons Dealerships Get Sued By EmployeesEmployees

2. Presenter John P. Boggs, Esq. Fine, Boggs & Perkins LLP (650) 712-8908 [email protected] 3. KPA Company Profile Nationwide compliance expert on Safety, Environmental, HR Colorado Headquarters 23 Years Experience 3000 + Clients Dealerships, Service, Repair 20 Offices Serving 41 States Compliance products and services OSHA DOT EPA Workers Comp Background checking Onboarding Harassment Red Flags Onsite inspections Online and onsite training and tracking And many more 4. What To Expect In 2010 Although more than 40 different labor and employment law bills were proposed in 2009, Congress acted on very few of them. In 2010, the story could be quite different - especially since Congress passed health care reform legislation At least seven areas of labor and employment law have great potential to be "hot" this year: Health Care Employee Leave Rights Traditional Labor Law Arbitration of Disputes Occupational Safety and Health Discrimination Laws Government Contracts Employers should expect 2010 to be a year of dramatic change in workplace laws and regulation. 5. Employers are required to comply with a myriad of complicated local, state and federal employment regulations. These regulations are difficult to understand, poorly communicated by regulatory agencies and continually changing. As the cost of non-compliance continues to skyrocket in both punitive fines and employee litigation costs & settlements, the challenge is made worse by economic downturn and the increase in employee ligation that results from hard times. EVER FEEL LIKE YOU ARE PREY? Webinar Overview 6. Lawsuits Waiting To Happen:Lawsuits Waiting To Happen: The Top Ten ReasonsThe Top Ten Reasons Dealerships Get Sued ByDealerships Get Sued By EmployeesEmployees 7. REASON NO. 1 HIRING THEHIRING THE WALKING LAWSUITWALKING LAWSUIT 8. Through Forced FunctionThrough Forced Function The only way to WIN THE BATTLE is to follow a standardized step-by-step process Application Interview Conditional Offer Drugand/or Background Screening New Hire Packet Company Policies & Training FIND QUALITY EMPLOYEES ELIMINATE THE WALKING LAWSUIT Bullet-Proof Your Employment PracticesBullet-Proof Your Employment Practices 9. APPLICATION New Hire Packet Company Policies & Training Conditional Offer Drugand/or Background Screening Application Interview 10. THE APPLICATION Application with Legal Protections Review The Application-- Look For The Key Indicators of the Walking Lawsuit Blanks Multiple Employers and/or Short-term Employment Reasons for Leaving Employment Gaps in Employment The Victim Mentality Web-Based Employment Application 11. REASON NO. 2 DOING THE TYPICALDOING THE TYPICAL INTERVIEWINTERVIEW (Worthless)(Worthless) 12. INTERVIEW New Hire Packet Company Policies & Training Conditional Offer Drugand/or Background Screening Application Interview 13. Interview Studies show that interviewing a candidate for a job position is only 14 percent effective in determining job fit. On a nice day, it would be just as effective and more enjoyable to sit on a park bench and hire every seventh person who walks by! 14. HIRING IS LIKE COURTING FOR MARRIAGE The interviewer concludes, Well, he/she is not perfect, but Ill train him after I hire him. 15. HOW DO YOU IMPROVE THE INTERVIEW PROCESS? Sound familiar? Have you ever regretted hiring someone on the very first day? It hurts, doesnt it? Or someone asks, What idiot hired that person? But you dont give up. You pay for training, trying to mold the person to do a job he will never do well. Eventually you begin the sad process of firing the employee. This, too, is a traumatic and often costly process. In our litigious society, it can be very costly. 16. VELVET HAMMER INTERVIEW LISTEN! STOP TALKING ASK OPEN ENDED QUESTIONS DONT ASK ILLEGAL QUESTIONS 17. Questions to Ask: Work Ethic and Attitude What skills are required to get along with and work cooperatively with others? Describe the qualities of a good boss? Employee? What do you believe is characteristic of bad management? Good management? What does being motivated mean to you? 18. What would your supervisor have to say about you? Co-workers? Subordinates? How were problems resolved at your last job? How many weeks did you work without interruption over the past 12 months? Remember: Open Ended Questions! 19. Age or birth date Marriage status or child care Nationality or background Disability Club memberships Pregnancy Can you work weekends? It is UNLAWFUL to ask for information pertaining to: InterviewInterview 20. REASON NO. 3 FAILING TO MAKE EXPECTATIONS CLEAR BEFORE EMPLOYMENT BEGINS 21. CONDITIONAL OFFER New Hire Packet Company Policies & Training Conditional Offer Drugand/or Background Screening Application Interview 22. Is it UNLAWFUL to obtain a drug screen BEFORE extending an offer to hire? False Hiring Promises Eliminated CONDITIONAL OFFERCONDITIONAL OFFER 23. REASON NO. 4 DONT BOTHER TO DO DRUG TESTING AND BACKGROUND SEARCHES 24. DRUG AND BACKGROUND SCREENING New Hire Packet Company Policies & Training Conditional Offer Drugand/or Background Screening Application Interview 25. Background Screening Background checks include Credit hits Character Checks Criminal background information DMV records, etc. Workers Compensation Claims History Civil Claims History Sex Offender Registry 26. Background Screening Background checks require: 1. Initial written authorization 2. Proper legal disclosures and info 3. Opportunity to get a copy of report 4. Intent not to hire and copy of report and federal and state disclosures 5. Final rejection letter $10,000.00 per violation minimum penalty 27. REASON NO. 5 HAVING INADEQUATE NEW HIRE PAPERWORK 28. NEW HIRE PACKET New Hire Packet Company Policies & Training Conditional Offer Drugand/or Background Screening Application Interview 29. Employment Agreements 30. REASON NO. 6 FAILING TO DO NEW HIRE TRAINING 31. COMPANY POLICIES AND TRAINING New Hire Packet Company Policies & Training Conditional Offer Drugand/or Background Screening Application Interview 32. An employee must have access to the employee handbook to be held accountable to the policies New signatures should be obtained when any significant change is made COMPANY POLICIES AND TRAININGCOMPANY POLICIES AND TRAINING 33. Policies Posters Training The law requires that dealerships take reasonable steps to prevent harassment Reasonable steps means: Anti-Harassment Training 34. REASON NO. 7 FAILURE TO FOLLOW GOOD WAGE/HOUR RECORD KEEPING PRACTICES 35. MEAL BREAKS & REST PERIODS #1 Basis for Wage/Hour Suits Against Dealers 30 minutes for each five hours, unless less then six or less than 12 hours (can be waived only if first not waived). Must clock in and out or at the very least keep a record that the lunch break was taken 10 minute rest period (paid) for each four hours of employment 36. What Should You Do? Contact legal counsel to ensure that your policies reflect the most prudent practices relating to meal and rest breaks and tracking employee time. Always track hours worked and not worked by all nonexempt employees. Make sure supervisors and managers consistently enforce your policies and procedures, in particular, as they relate to meal and rest breaks for exempt and nonexempt employeesStrongly consider a written certification under penalty of perjury confirming that all meal breaks and rest periods were taken. 37. POPULAR WAGE- HOUR LAWSUITS Meal Break and Rest Period Claims Commission Pay Plan Problems Overtime Exemptions Challenges Unlawful Deductions from Pay Charge-Backs Costs of Doing Business Proper Overtime Calculations Regular Rate of Pay Issues Bonuses Variable/Hybrid Pay Plans 38. COMPENSATION PRIMER: THE BASICS Fine $100/$200 per Pay Period per Person fine Problem Areas Lunch Periods for Sales, F&I, Service Writers Record Keeping Accurate record of hours worked each day/week and amounts paid and deducted 39. DEALERSHIP PROFIT-BASED PAY PLANS UNDER ATTACK! DO YOU NEED TO CHANGE YOUR PAY PLAN? DEALERSHIP PROFIT-BASED PAY PLANS UNDER ATTACK! DO YOU NEED TO CHANGE YOUR PAY PLAN? Packs represent potential problems, if they are used, they should be specifically identified by dollar amount (no hidden undisclosed packs) in a signed pay plan. Packs should never be identified as a way to allocate overhead or expenses, but instead should be described as an amount of the gross profit on which the salesperson is not paid a commission. If salespeople are not paid on under-allowances, or if over- allowances are charged against commissionable gross, that should also be identified. Likewise, if salespeople are not paid on factory incentives and/or holdback, that should be made clear in the pay plan. 40. PAID VACATION No Use it or Lose It Maximum Accrual is Okay PTO treated like Vacation PAID HOLIDAYS Be Careful On Floating Holidays PAID SICK LEAVE A Good Thing for Salaried Managers 41. REASON NO. 8 HASTY DISCIPLINARY DECISIONS 42. 1. Do you feel comfortable after your investigation that you will be able to prove, with evidence, that the employee violated the rule, or the standard of performance was not met, and that you have treated other similar situations with the same level of discipline in similar circumstances? Legal Liability Checklist 43. 2. Are there any prior commitments (written agreements or promises) in employee's personnel file regarding a specific term of employment, continued employment or a requirement of just cause for termination of employment? Legal Liability Checklist 44. 3. Are there any complaints or claims (formal or informal) that the employee has made against the company, any co- worker, customer or vendor? (e.g., harassment, discrimination, retaliation, unpaid wages, workers compensation claims, safety issues, labor regulation violations, dishonesty, customer fraud or other claims that the company violated the law in any way, etc.) Legal Liability Checklist 45. 4. If the employee falls into a "protected category" (e.g., minority, race, religion, color, sex, sexual orientation, national origin, ancestry, citizenship status, uniform service member status, marital status, pregnancy, age/over 40, medical conditioncancer related or HIV/AIDS related, disability, or transgender status), does the employee's "protected category" represent a relatively small portion of your workforce or the employee's work group. Legal Liability Checklist 46. 5. Has the employee taken any leaves of absence within the last year? (Medical leave, Family Care leave, Pregnancy leave, Drug/Alcohol Rehabilitation leave, Workers Compensation leave, etc.) Legal Liability Checklist 47. 6. Have you disciplined others for this same general rule violation or performance deficiency? Legal Liability Checklist 48. 7. Has the level of discipline imposed been substantially the same for the same violation or performance deficiency for other employees? Legal Liability Checklist 49. 8. Have you failed to discipline anyone for the same general rule violation or performance deficiency, even though some other employees may have been disciplined for it? Legal Liability Checklist 50. 9. Have you given different levels of discipline to different employees for the same general rule violation or performance deficiency? Legal Liability Checklist 51. 10. Do you plan to terminate the employee? Legal Liability Checklist 52. REASON NO. 9 LOSE THE BATTLE OF THE WITS ON CALIFORNIA LEAVE AND DISABILITY LAWS 53. TYPICAL TYPES OF LEAVETYPICAL TYPES OF LEAVE - VACATION (PAID), PAID TIME OFF (PTO OR PDO) - SICK LEAVE (PAID AND UNPAID) - MILITARY LEAVE (non-FMLA) - FLOATING HOLIDAY (PAID) - CIVIC DUTY LEAVE (E.G. JURY DUTY, WITNESS DUTY, VOTING LEAVE) - UNPAID FAMILY SCHOOL PARTNERSHIP LEAVE - PREGNANCY DISABILITY LEAVE OF ABSENCE (non-FMLA, PAID OR UNPAID) - FAMILY LEAVE (non-FMLA, UNPAID OR PAID) - LEAVE FOR VICTIMS OF FELONY CRIMES - LEAVE FOR VICTIMS OF DOMESTIC VIOLENCE & SEXUAL ASSAULT - TIME OFF FOR EMERGENCY DUTIES - BEREAVEMENT LEAVE - ALCOHOL/DRUG REHABILITATION LEAVE - PERSONAL LEAVE OF ABSENCE (OTHER) - FAMILY AND MEDICAL LEAVE ACT (AND STATE LAW EQUIVALENT) - WORKERS COMPENSATION INJURY/ILLNESS LEAVE - DISCRETIONARY MEDICAL LEAVE (non-FMLA for ADA) 54. FMLA and Workers Comp Conflicts Employees injured on the job under the Workers Compensation provisions may still be eligible for FMLA leave. Employees on Workers Comp must be put on FMLA leave -- just as if they were on a non-work related injury medical leave Employees on FMLA leave are entitled to have their health insurance covered for the first 12 weeks of Workers Comp, then they should be put on COBRA if your Health Plan is governed by ERISA. 55. What if the Employee Wont Return the Health Care Provider Certification? Reasonable period of time of not less than 15 days - whats that? What action can you take against the employee? Deny the leave retroactively? What happens to the leave? It becomes absence without approved leave. 56. FMLA vs. CFRA Under FMLA, pregnancy is a serious health condition Under CFRA, pregnancy is not a serious health condition. 57. PREGNANCY Result is that a pregnant employee gets: Up to 4 months of pregnancy leave due to pregnancy or pregnancy-related disability Up to 12 weeks of leave under FMLA as pregnancy is a serious health condition Up to 12 weeks of leave after the baby is born for bonding purposes. YES, thats up to a total of 7 months of leave. 58. American with Disabilities Act A qualified individual with a disability who, with or without reasonable accommodation, can perform the essential elements of the employees job A physical or mental impairment that substantially limits one or more of the employees major life activities. A record of such an impairment. Or being regarded as having such an impairment. Interactive process Provide a Reasonable Accommodation Discretionary Medical Leave, for example. 59. Definitions Overlap and Conflict ADA Disability is not always FMLA serious health condition. FMLA A serious health condition is not always ADA disability. Employees on Workers Comp Disability may not be covered by ADA or FMLA. Temporary impairments are not covered by the ADA. 60. An available light duty position must be considered as a form of reasonable accommodation under the ADA. Workers' Compensation gives employers the option of providing light duty, but it is not required. The system encourages employers to provide light duty by financially penalizing those who do not. Yet FMLA prohibits employers from requiring employees to return to light duty positions during their 12-week protected period. FMLA and Workers Comp Conflicts 61. Reminders FMLA and Workers Comp may run concurrently Make sure the employee has received written notice re: FMLA designation Rely on medical opinions Make sure FMLA poster is displayed 62. REASON NO. 10 IGNORE PROBLEMS UNTIL THEY BOIL OVER 63. ACT FAST AND FIX THE PROBLEM 1. Use the HotlinkHR Employee Hotline 2. Use the HotlinkHR HR Advice Hotline 3. Talk to the Employee 4. Talk to Witnesses 5. Make a decision 6. Follow-up with the Employee 64. Contact Information www.kpaonline.com [email protected] 866-356-1735

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– KPA CONFIDENTIAL – Lawsuits Waiting To Happen: Lawsuits Waiting To Happen: The Top Ten Reasons Dealerships Get Sued By The Top Ten Reasons Dealerships Get Sued By Employees Employees
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