A recent decision by the Seventh Circuit Court of Appeals highlights the importance of paying commissions to employees as soon as practicable. Waiting too long to pay commissions, even if this wait is in accordance with employment contracts governing ...

 

Are You Paying Commissions Soon Enough? and more...



Are You Paying Commissions Soon Enough?

A recent decision by the Seventh Circuit Court of Appeals highlights the importance of paying commissions to employees as soon as practicable. Waiting too long to pay commissions, even if this wait is in accordance with employment contracts governing when commissions should be paid, could be in violation of the Illinois Wage Payment and Collection Act

The case, titled Daryl Sutula-Johnson v. Office Depot, Inc., involved a plaintiff who sold furniture for Office Depot. She received a commission on furniture she sold, and Office Depot usually paid these commissions 45 days after the end of each quarter. The Illinois Wage Payment Act requires employees to be paid twice a month, but creates an exception for commissions, stating that they can be paid monthly. 

The court held that because Office Depot paid its commissions 45 days after the end of each quarter, and not monthly, it was in violation of the Wage Payment and Collection Act. It rejected Office Depot’s argument that commissions are not earned until they are paid, holding that it did not make sense for the company to determine that a commission was earned three months after a sale was completed. This is despite the fact that Office Depot had a contact with the employee that stated that commissions are not earned until they are paid. 

This decision could be problematic for employers. Often companies are not paid for sales until months after the sale has taken place. Under the court’s interpretation of the Wage Payment and Collection Act, in such a situation the employer would have to pay the employee commission even before receiving payment. 

Since this case involved a federal court ruling on Illinois law, it is not binding on Illinois courts. However, it is persuasive, and it is possible that Illinois courts will follow the Seventh Circuit’s interpretation of this issue. Therefore, employers should probably try to pay employees their commissions within one month of the employee earning it. If the employer cannot pay a commission that frequently, it should document the reasons why it cannot do so, and make sure that this documentation shows that paying these commissions monthly would be extremely burdensome to the business. Feel free to contact me if you have questions about how to do this.  

 

NLRB Determines Further Guidelines on Employee Misconduct

With newly appointed members joining the National Labor Relations Board, comes new considerations for employers. Recently, the Board has looked at the question that many employers find themselves asking: “When has an employee’s ‘outburst’ gone too far?” While the Board has not created a specific test to answer this question, it has determined an important guidance on how it will be addressed in the future.

The National Labor Relations Act protects employees when they make an attempt to improve working conditions for themselves and other workers. However, as we have seen in previous blog posts (see here and here), employees do not always conduct themselves in the most professional manner in certain situations. While acting in “unprofessional” manner might not be enough to lose the protection provided by the Act, an employee can, and sometimes does, go too far.

When tackling this issue, the Board has a number of considerations they take a look at. The Board considers where the discussion took place, the subject matter of it, the nature of the discussion, and whether the employer may have “provoked” such a discussion by acting unprofessional or in violation of the Act. The further away the employee is from acting in his capacity as an employee, the more likely the Act can protect what is said.

More specifically, the Board has made determinations based on these considerations that provide further guidelines in the decision making process. Recent insight into these guidelines came from a decision made after the Board heard a case involving an employee who had argumentative conversations with several managers regarding a new position in the workplace. The employee believed the position was unnecessary, seeing it as a way for the employer to “babysit” him, and challenged the decision at a meeting. As the discussion escalated, the meeting turned into a large argument leading the employee, and other coworkers, to approach human resources and complain. During this complaint, the employee and HR official raised their voices, with the HR official making many dismissive comments. After the HR official told the employee to leave, the employee would not, and the police were called on him. Needless to say, the employee was discharged for “intimidating” and “threatening” the HR official and escalating the disputes he made regarding the new position with the managers. The employee then filed an unfair labor practice against the employer.

In the end, the case was introduced to the Board who determined that the employee had not gone too far to lose the Act’s protection. Although the employee did raise his voice to both the managers and the HR official, and the police were called on him, he still was engaging in protected activity by complaining about a workplace concern and the manager’s conduct.

Although the decision is not based on a new test, it does show employers one important idea: The Board will give employees leeway in their behavior when, otherwise, they are exercising their rights that are protected under the Act. Remember, an employee cursing or acting in an overall unprofessional manner is not necessarily enough for an employer to take disciplinary actions. However, employers can support their decision in taking disciplinary actions by making sure their own actions remain professional and act in a way they expect their employees to act.
 

A $3.5 Million Reminder of Why Sexual Harassment Prevention is Important

Yet another lawsuit has come to light that reminds us all of just how important active prevention of sexual harassment is in the workplace. Alorica, a company that provides customer support services to a number of Fortune 500 firms, recently found this out the hard way. And what is the price Alorica is paying to put an end to such a lawsuit? $3.5 million.

The Equal Employment Opportunity Commission filed its lawsuit against the company in 2017 with allegations that began in 2012. The claims were serious enough to result in Alorica’s agreement to pay such a high settlement amount. The claims highlighted events from two female employees, among many others involved, alleging almost constant verbal and physical harassment.

The first employee, whose events prompted the lawsuit, alleged that her supervisor harassed her at a press conference by telling the employee that his “piece” was so big and that he would “pimp slap hoes.” Additionally, the same supervisor would talk about his favorite sex positions and comment on the employee’s breasts. He would ask her what kind of bra she wore and would tell others that he liked the employee’s butt. After reporting these allegations, the employee was placed on a two week leave. Once the two weeks ended, and the employee returned to her job, company officials allegedly tried to intimidate her into backing off of her claims. Eventually, the employee quit as a result.

While this specific employee’s harassment was primarily verbal, the lawsuit highlights another employee’s experience that contained more physical claims. This former worker made allegations that she was sexually harassed by a male team manager who often made inappropriate gestures to her at the workplace and told her several times that she “looked like she was ready for the bedroom.” Additionally, the same manager would rub his open hand on her buttocks and once held a soda bottle to his genitals and then rubbed her with the same bottle. This employee was ultimately fired for what the company said was poor attendance.

Other allegations that were made in this lawsuit include that a male team manager told a female worker she would have to provide sexual favors in order to advance in the company. Another female employee claimed that a male worker exposed his genitals to her.

Alorica’s representative ensured that the company fully investigated the allegations and fired or punished all workers found to be culpable. However, this same representative refused on many occasions to say exactly who or how many workers the company took these actions against.

This case is the largest settlement to date for a sexual harassment claim in the workplace. To both the company and every other employer, the case serves as a very strong reminder of the importance of training of all employees on how to spot, report, and prevent sexual harassment at work.
 

NLRB Offers New Guidance Regarding Employee Handbooks

NLRB General Counsel Peter Robb recently issued a memorandum outlining how his office plans to prosecute claims of unlawful workplace rules, and it is something that employers should probably become familiar with. This memorandum comes in light of the NLRB’s Boeing decision (365 NLRB No. 154 (Dec. 14, 2017)), which created a new employer-friendly standard as to how the NLRB would prosecute claims of unlawful workplace rules. Take a look at our discussion of the Boeing decision by clicking here.

The Boeing decision established three categories for evaluating employer work rules: 1) rules that are generally lawful; 2) rules that merit a case-by-case determination; and 3) rules that are plainly unlawful. The NLRB’s memo identifies the proper category for a number of typical workplace rules.

Category 1 (Lawful) Rules: These rules are generally lawful, as they either do not implicate an employee’s rights under federal law or because an employer’s business interests outweigh any relatively insignificant restrictions on those rights. Some of the examples mentioned in the memo include:
  • Rules prohibiting uncivil behavior (like the use of disparaging or offensive language)
  • No-photography rules and no-recording rules
  • Rules against insubordination or other on-the-job conduct that negatively affects the workplace
  • Disruptive behavior rules (like creating a disturbance or causing problems with clients or co-workers)
  • Rules protecting confidential, proprietary, and customer information or documents
  • Rules against defamation or misrepresentation
  • Rules against using employer logos or intellectual property
  • Rules requiring authorization to speak for the company
  • Rules banning disloyalty, nepotism, or self-enrichment

Category 2 (Case-by-Case) Rules: These rules are not clearly lawful or unlawful. Rather, the employer’s and employees’ interests must be weighed on a case-by-case basis to determine whether the rule is justified. Examples of such rules include:
  • Broad conflict-of-interest rules that do not specifically target fraud and self-enrichment and do not restrict membership in or voting for a union
  • Confidentiality rules regarding employer business or employee information (as opposed to confidentiality rules regarding customer or proprietary information [which are generally lawful], or confidentiality rules directed at employee wages, terms of employment, or working conditions [which are generally unlawful])
  • Rules regarding disparagement or criticism of the employer (as opposed to civility rules regarding disparagement of fellow employees)
  • Rules regulating use of the employer’s name (as opposed to rules regulating use of the employer’s logo/trademark)
  • Rules generally restricting speaking to the media or third parties (as opposed to rules restricting speaking to the media on the employer’s behalf)
  • Rules banning off-duty conduct that might harm the employer (as opposed to rules banning insubordinate or disruptive conduct at work, or rules specifically banning participation in outside organizations)
  • Rules against making false or inaccurate statements (as opposed to rules against making defamatory statements)

Category 3 (Unlawful) Rules: These rules are generally unlawful because they restrict the employees’ rights severely enough to outweigh any potential employer justifications for them.  The memo provides only two examples of rules that fit this category:
  • Confidentiality rules specifically regarding wages, benefits, or working conditions
  • Rules against joining outside organizations or voting on matters concerning the employer

These distinctions are all pretty sensible, and it is likely that most employee handbooks have rules that are generally in compliance with them. However, it might be worth reviewing your handbook just to be sure. If you haven’t revised your employee handbook in the last few years, then it might be time to do so.  Feel free to contact me for help doing so.
 

Amputee given classroom aide as reasonable accommodations

Last week, the United States Court of Appeals for the District of Columbia revived a claim raised by a former teacher of a nonprofit afterschool program that was dismissed in 2014.

In 2013, Brien Hill began working for Associates for Renewal in Education Inc. (ARE), a non-profit that provides both care and education programs to underserved children and adults. Hill was employed by ARE as a teacher and program aide in their three-story building located in Washington, D.C. Due to a surgery that he underwent that resulted in the amputation of his leg, Hill uses a prosthetic leg. Because of this, he requested accommodations for his disability, including being assigned a classroom on a lower level of the building and for a classroom aide to assist him in supervising students.

Hill’s accommodations were granted by ARE up until August 2007 when Hill was reassigned to a classroom on the third floor of the building with no assistance of a classroom aide. Hill alleges that he expressed his concerns regarding these changes and requested to be placed back on a lower level floor and have an aide. He states that despite making these requests daily throughout the school year, the accommodations were never provided and he remained the only teacher in the program without an aide. Around this time, Hill began to have disciplinary issues at work and was changed to a part-time position due to his “excessive tardiness and inconsistent call-ins.” His supervisor suggested that he be terminated on the same day that Hill requested a review of his denied accommodations. It was shortly after that when Hill was fully terminated from his position at ARE.

Hill then sued ARE claiming it of violating the ADA by refusing to both place him on a lower floor of the building and for refusing to provide him with a classroom aide and for creating a hostile work environment. In 2014, the U.S. District Judge John Bates granted summary judgment in favor of ARE on the hostile work environment claim and the claim regarding the request of a classroom aide. The remaining claim involving the request to be placed on a lower floor was sent to the jury and Hill was awarded $40,000.

Four years later, the 9th Circuit brought back the case. While the court decided to decline the revival of Hill’s hostile work environment claim for failure to allege severe and pervasive conduct by ARE, it did bring back his claim involving the denial of a classroom aide. Circuit Judge Robert Wilkins stated,
a reasonable jury could find that if ARE provided Hill a classroom aide as it did for his colleagues, that aide could help Hill supervise students in the classroom and during outdoor activities, reducing his need for prolonged standing and mitigating the alleged “hazard of pain and bruising".
The three-judge panel unanimously agreed that Hill had adequately alleged that an aide was appropriate accommodation under the Americans with Disabilities Act because of the extreme pain that was associated with standing on a prosthetic leg for long period of time.