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SHRM Newsletter: California Marriage Roller Coaster Ride

08/13/2010

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August 13, 2010

This is Utah SHRM Legal-mail no. 2010-11 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM).

CONTENTS:

-  CALIFORNIA MARRIAGE ROLLER COASTER RIDE
-  CONTROL ISSUE PARAMOUNT IN EMPLOYEE CLASSIFICATION ISSUES
-  NEW FINAL RULES ON ELECTRONIC I-9 PROCESS
-  EMPLOYMENT LAW TRENDS REFLECTED IN RECENT NEWS STORIES
-  SEXUAL HARASSMENT ALLEGATIONS CAN REACH EVEN INTO THE C-SUIT

CALIFORNIA MARRIAGE ROLLER COASTER RIDE:  Among other things, California is known for its great theme parks and their exciting roller coasters…Space and Big Thunder Mountains at Disneyland, the GhostRider at Knott’s Berry Farm, Six Flags Magic Mountain, etc.  But they pale in comparison to the California roller coaster ride that same sex marriage has taken us all on during the last few years.  First, the California Supreme Court decided that a prohibition on same sex marriage violated the California state constitution and same sex couples rushed to get married in the Golden State.  Next, the voters of California narrowly approved Proposition 8, which expressly amended the California state constitution to ban same sex marriage.  Thereafter, the California Supreme court rejected a challenge to that ban brought under state law.  Then, advocates of same sex marriage filed a lawsuit in federal court challenging the ban under federal law and the United States Constitution.  These plaintiffs were represented by Democrat David Bois and Republican Theodore Olson, who in their last big lawsuit just happened to be the lawyers opposed to each other in the Bush v. Gore case that decided the 2000 presidential election.  Recently, after a lengthy trial, the federal judge in that case concluded that the same sex marriage ban violated the U.S. Constitution and ordered that same sex couples be allowed to marry again in California.  Proponents of the same sex marriage ban are now seeking a stay of that ruling while it goes up through the federal system on appeal.  So besides the sheer entertainment value of the legal roller coaster, what does all this mean to you as an employer?  In the long term, if the United States Supreme Court upholds this ruling, it will require that all American employers recognize same sex spouses for employment benefit purposes.  In the short term, it means you will not have to recognize same sex partners of employees in states that do not recognize same sex marriage (including Utah).   However, you may or may not have to recognize same sex relationships for your California employees (and employees in other same sex marriage states such as Massachusetts, Connecticut, Vermont, Iowa and New Hampshire…and Maryland and New York, which recognize same sex marriages from other states) depending on whether or not your employment benefits package is governed by state law as insurance or governed by federal law (ERISA…go here for a good summary of this law: http://www.dol.gov/compliance/guide/erisa.htm) (one example, self-funded plans).  And employers must still consider the impacts on these issues of various state domestic partner laws.  In other words…call your lawyer ASAP and yell HELP!!!  (Thanks to Jones Waldo tax and employment benefits lawyer Bruce Babcock for his assistance in drafting this section.) For a good and more detailed discussion on this issue, see: http://www.seyfarth.com/dir_docs/news_item/5c86c56d-4b31-4078-b6f9-366de92db13d_documentupload.pdf

CONTROL ISSUE PARAMOUNT IN EMPLOYEE CLASSIFICATION ISSUES:  If you have been paying even the slightest of attention to these updates regularly, you know that one of the major risks for employers today is the misclassification of an employee as an independent contractor.  A recent decision by the federal appeals court that covers the Pacific coast states has affirmed that a fact intensive analysis of a company’s “right to control the manner and means by which the [work] product is accomplished” is the essential question in distinguishing an employee from an independent contractor.  The court outlined that this question is answered by analyzing factors such as: (1) The skill required; (2) The source of the instrumentalities and tools; (3) The location of the work; (4) The duration of the relationship between the parties; (5) Whether the hiring party has the right to assign additional projects to the hired party; (6) The extent of the hired party's discretion over when and how long to work; (7) The method of payment; (8) The hired party's role in hiring and paying assistants; (9) Whether the work is part of the regular business of the hiring party; (10) Whether the hiring party is in business; (11) The provision of employee benefits; and (12) The tax treatment of the hired party.  From my experience, most employers who are calling workers independent contractors probably should be classifying them as employees.  Make sure you carefully review your classifications so you do not have this problem too.

NEW FINAL RULES ON ELECTRONIC I-9 PROCESS:  The United States Department of Homeland Security (DHS) recently has issued final rules regarding I-9 electronic signature and storage.  The new rule allows employers to complete, sign, scan and store the I-9 electronically as long as certain conditions are met.  For more details, see this article from national SHRM: http://www.shrm.org/LegalIssues/FederalResources/Pages/DHSElectronicStorage.aspx.  

EMPLOYMENT LAW TRENDS REFLECTED IN RECENT NEWS STORIES:  Some recent news stories are good indicators of legal trends to which employers should pay some attention.  First, the Illinois Legislature just approved a new law restricting employers from using credit information in employment decisions.  Several other states (Hawaii, Oregon, Washington) have adopted similar laws, all intended to minimize the impact of the Great Recession on an applicant’s ability to get a job.  Second, nationally, claims brought before state wage agencies are up.  These types of claims include claims regarding termination pay, vacation pay and deductions from wages.  One Eastern employment lawyer has commented that he is seeing a “wage and hour firestorm spread from California across the country.  Make sure you know about and comply with applicable state wage laws that apply based on where your employees live/work.  Finally, a couple of recent new lawsuits suggest more men are filing sex discrimination claims with women—and other men-- portrayed as the villains.  These include a TV show stage manager’s complaint that he was fired and replaced by a less qualified woman and a construction worker’s complaint that his male boss called him “sexy,” caressed his hands and back and blew him kisses on the job.

SEXUAL HARASSMENT ALLEGATIONS CAN REACH EVEN INTO THE C-SUITE:   How many of you wonderful HR folks smile but then quickly turn the other way and grimace when you hear/learn/notice that your CEO is politely skipping out on the mandatory EEO and sexual harassment training which is mandatory for everyone else?  It is an understandable approach, but you may want to rethink it.  If there was any doubt before, there cannot be doubt any more, that sexual harassment allegations can reach right up into the top echelons of the executive washroom and the C-suite.  Look no further than the recent news headlines about the allegations against the Hewlett-Packard (HP) CEO regarding his relationship with a female former contractor of HP.  Although HP’s internal investigation of these allegations ultimately concluded its sexual harassment policy was not violated, the CEO is not working there anymore and there have been lots of confidential settlement agreements signed by all involved.  All this is pretty traumatic stuff for in-house legal counsel HR, staff, etc., not to mention the CEO and the former contractor.  Like every other employee, members of the C-suite and even your board of directors need to understand the EEO legal requirements and the implications of even toying with circumstances that might lead to sexual harassment and other claims.  Next time your CEO hints that he or she wants to skip out of that training, find a way to JUST SAY NO!

Written by: Employment Attorney, Michael Patrick O'Brien
Utah State and Salt Lake SHRM legal director
Email: mobrien@joneswaldo.com
Phone: 801-534-7315
Website: www.joneswaldo.com

Legal-mail is a legal and legislative update service sent out about twice a month to various Utah SHRM members and chapters. As a courtesy to SHRM, the Utah law firm of Jones Waldo Holbrook & McDonough P.C. underwrites the costs of the service. If you have any questions or comments, please contact Michael Patrick O'Brien.

Disclosure: These updates are merely updates and are not intended to be legal advice. Receipt of this information does not create an attorney-client relationship.