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“It’s the best time of the year — time for performance reviews!” said no one, ever.

Both managers and employees get anxious when annual reviews come around. But managers may have it worse. 

Performance reviews can win or lose a lawsuit if an employee sues for wrongful termination, so the pressure’s on managers to get them right.

That also puts the onus on employers to create an effective and legally defensible review process.

Reviews: The good and the bad

To help, attorneys Susan DiMickele, Tara Aschenbrand, Jill Kirila, Meghan Hill and Traci Martinez of the law office Squire Patton Boggs compiled a quick-hitting checklist of best practices when it comes to creating defensible evaluations.

Some things they recommend employers do:

• Set up a standardized system for establishing goals, rating performance and suggesting improvement plans
• Be clear about what employees need to do to attain goals and any corrective actions they need to take, including specific recommendations when possible, and
• Balance out criticism by offering up specific examples of what employees do well.

The attorneys also highlighted some common mistakes managers should avoid during reviews.

They are:

• Failing to follow established review procedures and timelines
• Not having enough supporting documentation to back up critiques
• Failing to have written performance ratings sync up with verbal comments made during the review
• Giving inflated ratings to avoid having difficult conversations or hurting workers’ feelings, and
• Putting forth a review not grounded in specific facts.

Many companies already try to hire a variety of employees, like those with intellectual or developmental disabilities (IDD). But in case you need another reason to do so, a study says hiring qualified workers who have an IDD can be good for the bottom line. 

Hard-working, engaged

That’s one of the key points from new research released by the Institute for Corporate Productivity, a company that analyzes high-performing companies’ practices and policies. (Download the report here.)

Even though the companies studied were skeptical about workers who had an IDD at first, many ended up benefiting greatly from doing so.

For example, researchers found:

• over 75% of companies rated qualified employees who had an IDD as “good” or “very good” in terms of attendance, productivity, motivation, work quality, engagement and integration with co-workers
• 80% of companies had positive experiences with those employees, and
• about a third of companies said their experiences with those workers exceeded expectations.

Even better: Researchers say hiring qualified candidates who have an IDD promotes a culture of inclusion, which can attract top talent, lead to better sales, boost customer retention and build a more positive company image.

It’s important to note, however, that the data shows hiring employees who have an IDD just to say you’ve done so typically doesn’t result in those desired effects.

There may be a new type of Obamacare lawsuit looming on the horizon — and this one would target employers. 

Since the enactment of Obamacare’s employer mandate, attorneys and employment law experts have wondered if Section 510 of ERISA could be used to bring lawsuits against employers who cut workers’ hours to circumvent that mandate.

Section 510 says, in part:

“… it shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary of an employee benefit plan for the purpose of interfering with the attainment of any right to which such participant may become entitled under an employee benefit plan …”

Yes, ERISA was written mainly to apply to retirement plans. But could this section be used to sue employers who cut workers’ hours in an attempt to avoid having to provide them with health insurance under the Affordable Care Act?

Well, we’re about to find out.

Employees file class action lawsuit

Employees of Dave & Buster’s just filed a class action lawsuit against the restaurant chain, alleging it violated ERISA’s Section 510 by reducing their hours below 30 per week to avoid Obamacare’s employer mandate to provide full-time employees with health insurance.

In the lawsuit, the employees say Dave & Buster’s main goal in reducing their hours below 30 per week was to avoid having to off them health insurance. This, they claim is exactly the kind of move ERISA was designed to prohibit.

The suit claims that during a meeting at one Dave & Buster’s location, attended by the lead plaintiff Maria De Lourdes Parra Marrin, a company general manager said that the Obamacare mandate would wind up costing the company upwards of $2 million. And to skirt those costs, the restaurant planned to cut the hours of full-time workers, which it then did, according to the suit.

The plaintiffs then claim that similar meetings were held company-wide.

Their case hinges on whether or not ERISA can actually be applied to health plans.

Potential fallout

We’ll have the answer to that soon enough — and employers need to be paying attention.

Rumor has it lots of employers are planning to cut full-time workers’ hours to avoid the individual mandate — or have already done so.

If it’s ruled that the plaintiffs have a legitimate complaint in the Dave & Buster’s case, it would be a huge — and expensive — blow to these employers cost-control strategies.

Then there’s the potential for damages and penalties assessed to those companies that have already deployed this kind of strategy.

Stay tuned. We’ll be following this case closely.

Cite: Marin v. Dave & Buster’s Inc.

Just how far do employers have to bend to provide a scent-sensitive employee a reasonable accommodation? You won’t believe what a federal judge just ruled.  

Christine Brady was a credit manager for United Refrigeration in Pennsylvania. She told her employer she had a long-term “heightened sensitivity to perfumes, fragrant chemicals and lotions.”

After being under a doctor’s care for some time — and treating her sensitivity through medication — Brady’s condition apparently worsened. She asked United’s HR department “if there is a way to have a fragrance free zone or [if she] could be placed in a fragrance free area.”

The employer responded. Here’s attorney Erric B. Mayer’s rundown of the steps the company took:

• Purchased a portable air cleaner for use at the plaintiff’s work station
• Purchased a second portable air cleaner for the plaintiff after she broke the first one
• Distributed — several times — a notice to all employees not to wear perfume, cologne or aftershave to the office
• Purchased face masks for the plaintiff (which she later refused to wear)
• Relocated an employee who had to wear medically-prescribed skin lotion
• Cleaned a wall panel that plaintiff claimed had fragrances on it
• Cleaned the rug around the plaintiff’s workstation, and
• Cleaned the rug around the plaintiff’s work station.

The company also relocated her desk “out of the main stream” and sent her a memo assuring Brady that United “takes your sensitivity seriously.”

But Brady still had a hard time maintaining regular attendance at work. She was finally laid off. In a letter, the firm explained that “… [a]fter what we consider to be extraordinary efforts to accommodate you, you have still not been able to … report to work regularly, which we need you to do. We do not have work available that meets all of your restrictions. Accordingly … you are being laid off.”

And then, of course, she sued. Brady claimed that United’s ban on fragrances wasn’t enforced strictly enough, and that the company violated the ADA by firing her.

Absenteeism as accommodation?

She couldn’t possibly win, right? After all the company did to accommodate her disability?

Well, she won the first round — the court indicated that despite all the steps it took, the company may not have done enough.

The court’s reasoning:

[Brady’s] circumstances do not involve unexplained absences; rather, [her] condition is triggered by stimuli that are at least somewhat within [United’s] power to control. If [United’s] own no-fragrance policies are not being sufficiently administered or enforced, as [Brady] alleges, [United] may have to accept that [Brady] must take some time away from that environment.

Huh? So unless a firm’s policies are perfectly enforced, absenteeism is a reasonable form of accommodation? Pretty tough call for this employer.

Now the company faces an expensive trial or an expensive settlement.

The case is Brady v. United Refrigeration, Inc.

While firms anxiously await the DOL’s new FLSA overtime rules, the agency just announced it will be releasing new information on another key wage-and-hour issue this summer.  

At a recent labor and employment law conference, Dr. David Weil, an administrator with the DOL’s Wage-and-Hour Division, said the agency will release new guidance on independent contractors (ICs).

Clarify criteria

Weil said the agency would clarify the criteria that must be met to properly classify a worker as an IC.

Plus, Weil said he’d “be issuing an administrator interpretation specifically about our [the DOL’s] view of what is a legitimate independent contractor.”

Some employment attorneys have speculated that the feds could include the IC guidance with its revisions to the overtime regs.

That means employers may get hit with a barrage of critical FLSA info all at once. And sifting through that info could pose an administrative nightmare for HR and benefits pros.

Compliance check

While the OT change will no doubt force many firms to make some changes, the contractor clarification isn’t likely to be any great departure from the current guidance.

If you rely on ICs, you may want to review the classifications before the DOL clarification comes out.

To ensure compliance, the agency offers a six factor “economic realities test” that includes the factors the Supreme Court considers significant in determining whether an individual is economically dependent on an employer.

In addition, the following two questions can help determine if an individual is economically dependent on your company:

• Can we require the person to work?
• Can we prevent someone from working?

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