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SHRM Newsletter: EEOC Receives Record Amount of Charges/Damages in 2010

12/01/2010

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December 1, 2010

This is Utah SHRM Legal-mail no. 2010-18 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:

- EEOC RECEIVES RECORD AMOUNT OF CHARGES/DAMAGES IN 2010

- RETAILER PAYS $86 MILLION TO SETTLE TERMINATION WAGE CLAIMS

- UK LAPTOP THEFT RESULTS IN HEAVY (LOTS OF POUNDS) FINE

- REMEMBER LITIGATION HOLDS AND PERILS OF E-DISCOVERY

- LEGISLATIVE NEWS

EEOC RECEIVES RECORD AMOUNT OF CHARGES/DAMAGES IN 2010: The Equal Employment Opportunity Commission (EEOC) received a record number of discrimination and retaliation charges- and obtained a record amount of damages- during its most recent fiscal year. For the fiscal year 2010 (ending September 30, 2010), almost 100,000 charges were filed with the EEOC, the most in its 45 year history. The EEOC currently has a backlog of just over 85,000 unresolved charges, a reduced number due to increased resources made available to the agency. The EEOC reports that, during the past year, it recovered more than $319 million for claimants, its highest total ever. These statistics should be a sobering warning for employers, who clearly will face a newly-invigorated agency at a time when record numbers of claims are being made.

RETAILER PAYS $86 MILLION TO SETTLE TERMINATION WAGE CLAIMS: A large national retailer has paid $86 million to settle claims that it failed to pay over 200,000 former employees earned wages when they terminated employment. The lawsuit, pending in federal court in California, alleged employees were not properly paid vacation and other wages due on termination. The case history also demonstrates some of the massive burdens associated with such employment law litigation. According to news reports, the company produced over 1,000,000 pages of corporate records and had to defend 21 depositions at its corporate headquarters. The company has implemented an automated pay system in an effort to avoid future problems in timely paying terminated employees. Termination pay is largely governed by state law. California law requires immediate payment to employees involuntarily terminated and pay with 72 hours to those persons who voluntarily separate (unless the person has given 72 hours advance notice before quitting, in which case pay is due immediately upon quitting). Utah law requires final pay within 24 hours for involuntary termination and by the next pay period for voluntary separations.

UK LAPTOP THEFT RESULTS IN HEAVY (LOTS OF POUNDS) FINE: A national employment law firm is using the story of a laptop theft in the United Kingdom (UK) to remind employers in the USA to protect personal data. A UK employer was fined almost $100,000 (the heavy amount of 60,000 British pounds) after one of its employees took home a laptop with personal employee/client data (regarding about 24,000 persons) on it. The laptop was stolen from the employee’s home. The story is an effective reminder that various state and federal laws also require that employers protect personal identifying information. You can read the full article here:  http://www.seyfarth.com/index.cfm/fuseaction/publications.publications_detail/object_id/9e8e810f-5b14-495b-8499-655c97f0e525/TheftofLaptopContainingUnencryptedPersonalDataResultsin60000FinetoEmployer.cfm

REMEMBER LITIGATION HOLDS AND THE PERILS OF E-DISCOVERY: More and more of what employers do today is done electronically…email, texting, etc. The convenience and efficiency of electronic communication also means that employees typically will create more documentation (that is stored somewhere) about their various activities. Thus, when a dispute, lawsuit or claim (e.g. an EEOC claim) arises, more of the evidence related to the same will be in an electronic format. Employers must take steps to issue litigation hold notices when such circumstances arise. Indeed, most agencies will include an instruction to hold records when they send an employer a copy of the charge filed against it. A litigation hold notice is a prompt and written communication to the involved persons (the likely custodians of records relevant to the particular dispute), as well as to the company’s IT department, asking all such persons to take steps to preserve all records (electronic or otherwise) possibly related to the case. This hold must include having IT suspend normal and automatic e-mail or e-record deletion processes. The failure to put a litigation hold on possibly-relevant records can haunt an employer involved in such a dispute, even if the employer has good defenses on the underlying claim. This happens because courts and agencies can choose to penalize such employers who let records be destroyed. And such penalties can include drawing adverse inferences, i.e. concluding that the destroyed or missing documents would have hurt the employer’s arguments, or simply refusing to recognize certain employer defenses at all. Don’t let this happen to you. Make sure you have a litigation/dispute records hold policy in place and that you trigger it whenever required to preserve documents that may be relevant to an underlying employment dispute.

LEGISLATIVE NEWS: The United States Senate has declined to take any action on the Paycheck Fairness Act, discussed recently in these updates. Given the GOP gains in the last elections, the Act is probably dead for the foreseeable future and will not be considered again next year. The Utah Legislature commences its annual 45 day session in mid-January of 2011. Not many proposed bills are available yet for review on the Legislature’s website. However, the Legislature seems destined to consider hot employment law issues as legal and illegal immigration, guest worker status and state affirmative action. Here, for example, is a link to a recent Salt Lake Tribune article discussing some of the pending immigration issues: http://www.sltrib.com/sltrib/home/50785456-76/bill-robles-federal-waiver.html.csp. Stay tuned for further developments!

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.