Two Ward and Smith labor and employment attorneys evaluated a real-life scenario many employers face while managing employees in the modern business environment.
The roundtable discussion, part of Ward and Smith’s Employment Law Symposium, challenged attorneys to share their insights on workplace issues such as employee nonperformance, social media posts, and how to minimize risk exposure in regard to termination practices.
The session — Boldly Go: A Day in the Life of HR — used the Labor and Employment Practice Group’s signature live-action role-playing (LARPing) technique to explain the legal concepts and ramifications.
Session presenters included Justin Hill, a labor and employment attorney, and Devon Williams, a labor and employment attorney who is also one of the firm’s Managing Directors. To begin, the attorneys presented a hypothetical situation involving Full Throttle, LLC ("Full Throttle"), a fictional company that quickly grew as it pivoted from making beer koozies to masks.
Firing without Legal Ramifications
As mask demands grew, Full Throttle started hiring for vacant company positions both in North Carolina and across the United States. The result was that the company quickly grew to include 45 full/part-time employees and 30 independent contractors, many of whom work remotely in several states.
Seminar participants were asked to put themselves in the shoes of an HR professional on the first day of the job. In what could potentially be described as a nightmare scenario, the company CEO James Kirk says the following:
- "I know it’s your first day, but I want you to fire Kathryn Janeway."
- "Kathryn said false things about the company on Facebook."
- "I don’t care how you do it, but I want her gone immediately."
- "Just make sure there are no legal ramifications."
At this point, the only information the HR professional has are the comments from the CEO, who indicated Kathryn posted the following on Facebook:
“Full Throttle is just a good ol’ boys club that does not pay female employees as much as male employees, and the CEO is a racist. Anyone who buys Full Throttle products is contributing to a company that oppresses minorities and women.”
The CEO further explains that, though the company does not have written documentation, Kathryn is consistently 20-30 minutes late. Also, several of her fellow employees have stated that she tries to "stir up trouble," and makes negative remarks about people when they are not around.
James says Kathryn generally "performs fine"; however, he feels her work performance doesn’t redeem her character flaws. It is also important to point out that Full Throttle has yet to create an employee handbook or a list of employee policies.
Understanding Different Perspectives
As with many other things in life, it’s critical to try to understand the perspective of other people before moving forward with employee terminations. Although the comments from the CEO regarding the social media post were accurate, Kathryn's Facebook post included the additional information:
“Their CEO said he would pay the ‘top end’ of my pay scale to be the full-time Senior Sales Coordinator. I found out the new white man they hired is being paid 25 percent more than me for an ENTRY level sales position. Good ol’ boys club, right?”
Ultimately, Kathryn is complaining about the terms and conditions of her employment, pay, and the treatment of herself and others. “Arguably, she’s making claims of discrimination or harassment or other unfair treatment that would violate various federal and state laws,” said Williams.
Since her complaint ends with a question asking if anyone agrees, and that carries with it the implication of asking others if something can be done about it, her post could be considered Protected Concerted Activity. “Employees don't have free rein to say whatever they want,” noted Williams, “But you want to look at this carefully.”
Responding to comments from seminar participants on the lack of documentation and employee policies, Hill explained that, “There is no social media policy because there’s no handbook, so there’s nothing at all. There is nothing to say Kathryn was supposed to be in at a certain time. As of right now, it’s like the Wild Wild West.”
Hill’s advice would be to take the time to speak with Kathryn. This could show that there's been a misunderstanding due to a lack of policies, or it might highlight how Kathryn is acting in accordance with other employees.
Avoiding Retaliatory Responses
Talking to the employee can help avoid a knee-jerk reaction that could be deemed retaliatory. “You should always hold a conversation and try to get to the bottom of things,” Hill added. “If what she is saying about the pay issue is accurate, you should probably slow down before jumping to fire her.”
Even if there is documentation related to Kathryn’s performance and tardiness issues, employers need to be careful. “Maybe these issues have been there for months, but maybe there hasn’t been a final warning. Then suddenly, this call occurs and she’s fired,” Williams noted. “Now, it looks like we’re trying to use the attendance issues as a pretext for the actual reason behind the firing. Even with documentation, the employer is likely not going to be in the clear in this situation.”
Seminar participants also mentioned that Kathryn took the time to register a formal complaint with her supervisor. “This is a good learning point,” said Hill. Part of the role of a supervisor is to limit the company’s risk exposure. The person who received the complaint is supposed to take it up the chain of command. “If that person doesn’t get it to whoever it is that needs to register that complaint, the company can still be on the hook for some of these issues because she has made a complaint, whether you have a policy in place or not,” Hill explained.
Pay Equity and Contractor/Employee Classification
If the goal is to fire Kathryn Janeway, figuring out whether there are systemic pay equity issues at the company is an essential component of the process. To shed light on how to address this issue as well as a few others, the attorneys advised the new HR professional to interview Junior Sales Coordinator Harry Mudd, a contractor based in Colorado who is supervised by Kathryn Janeway. Although they don't spend much time in person, as he is located in another state and works remotely, Harry Mudd likes Kathryn. However, Harry Mudd knows Kathryn is a gossip and does not want to get on her bad side.
Though happy with his pay, Harry said in his interview that before he joined the company, he was asked how much he made with his previous employer, and then he was offered five percent more. Harry wishes the company provided him vacation and sick pay, considering he typically works more than 40 hours each week. Also, Kathryn let him know that another Junior Sales Coordinator based in Raleigh, who was hired at the same time, does receive vacation and sick pay.
Near the end of the interview, Harry asks the new HR professional to stop asking so many questions because it’s ruining his buzz. “We had to throw in a little fun to make it messy,” laughed Williams.
“The thing is, we don’t know if Harry is under the influence of something that is decriminalized in Colorado but still illegal under federal law. We also don’t know if he’s on CBD, which is legal,” noted Williams.
If Harry is doing something that is legal in his home state and there is no policy in place, then the company really cannot dictate what he does. The strength of the point is compounded by the fact that Harry is a contractor and not an employee.
A key component of the independent contractor versus employee analysis is the control aspect. Some companies may hire remote employees in other states and call them contractors because they think they have no control over workers located in another state.
“Another good test to look at with independent contractor versus employee is to look at what they are doing. If you have an employee who is apparently doing the same role as an independent contractor, and they are classified as different roles just because of the state they live in, that’s a red flag,” added Williams. Misclassification can become a serious issue. Also, it is illegal to ask Harry what he made at his previous job in the state of Colorado.
Colorado, along with numerous other states, has laws prohibiting employers from asking about a candidate's salary history or using such information to set the candidate's pay.
So what is the new HR professional to do? The attorneys agreed on the importance of advising the CEO of the potential financial repercussions that could arise from terminating Kathryn.
“Clearly, she’s somebody who believes she has a pay equity claim, a gender discrimination, perhaps a racial discrimination claim, and she’s going to add an NLRA claim, so firing her may not be advisable in this instance,” said Williams.
Instead, Full Throttle should focus on developing and documenting policies in its new handbook; provide training for supervisors on how to handle complaints and avoid discrimination; develop a progressive employee discipline and review system; educate the CEO on the value of strategic HR professionals; and document this incident.
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