HR News

Pepsi Agrees to Pay $3 Million After Investigation Into Background Check Policy

Pepsi Beverages (Pepsi) has agreed to pay $3.13 million and provide job offers and training to resolve a charge of race discrimination filed in the Minneapolis Area Office of the U.S. Equal Employment Opportunity Commission (EEOC). Based on the investigation, the EEOC found reasonable cause to believe that the criminal background check policy formerly used by Pepsi discriminated against African Americans in violation of Title VII of the Civil Rights Act.

The EEOC’s investigation revealed that more than 300 African Americans were adversely affected when Pepsi applied a criminal background check policy that disproportionately excluded black applicants from permanent employment. Under Pepsi’s former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense.

Pepsi’s former policy also denied employment to applicants from employment who had been arrested or convicted of certain minor offenses. The use of arrest and conviction records to deny employment can be illegal under Title VII of the Civil Rights Act, when it is not relevant for the job, because it can limit the employment opportunities of applicants or workers based on their race or ethnicity.

“The EEOC has long standing guidance and policy statements on the use of arrest and conviction records in employment,” said EEOC Chair Jacqueline A. Berrien. “I commend Pepsi’s willingness to re-examine its policy and modify it to ensure that unwarranted roadblocks to employment are removed.”

During the course of the EEOC’s investigation, Pepsi adopted a new criminal background check policy. In addition to the monetary relief, Pepsi will offer employment opportunities to victims of the former criminal background check policy who still want jobs at Pepsi and are qualified for the jobs for which they apply. The company will supply the EEOC with regular reports on its hiring practices under its new criminal background check policy. Pepsi will conduct Title VII training for its hiring personnel and all of its managers.

“When employers contemplate instituting a background check policy, the EEOC recommends that they take into consideration the nature and gravity of the offense, the time that has passed since the conviction and/or completion of the sentence, and the nature of the job sought in order to be sure that the exclusion is important for the particular position. Such exclusions can create an adverse impact based on race in violation of Title VII,” said Julie Schmid, Acting Director of the EEOC’s Minneapolis Area Office. “We hope that employers with unnecessarily broad criminal background check policies take note of this agreement and reassess their policies to ensure compliance with Title VII.”

The monetary settlement will primarily be divided among black applicants for positions at Pepsi, with a portion of the sum being allocated for the administration of the claims process.

BLR's 5 Steps to Legal Background Checks That Really Work can help you avoid bad hires and costly lawsuits.

Don’t Mistake Employees for Students and Volunteers

As an employer, if you have student workers or volunteers, are there circumstances under which you treat them as actual employees, meaning that they should be paid accordingly? Here are guidelines for determining when students or volunteers should be given employee status—and paid at least minimum wage plus overtime beyond 40 hours a week.

Check the duties and compensation of students at your college or university:

• Are they conducting research that is tied to the school’s educational mission? If so, they are students even if they are paid a stipend or given a break on room and board or a tuition reduction.
• The less an undergraduate or graduate assistant’s work has to do with his or her education, the more likely the work should be paid at minimum wage and the student qualify for overtime.
• If they are paid to do research through a grant or contract, they are probably still students.
• Students who participate in such extracurricular activities as drama, musical groups, radio stations, or athletics do not qualify as employees, according to DOL.
• Students who serve as residence hall assistants or dorm counselors in exchange for reduced charges or tuition credits are generally not employees.
• But students who work at food service counters, or wait on tables or wash dishes, or sell programs or usher at athletic events are generally seen as employees under FLSA.

Check your volunteers:

• Are they doing altruistic work that is typically associated with volunteers?
• They shouldn’t be working the equivalent of full time.
• They shouldn’t displace any of the organization’s employees or reduce the need to hire.
• They should be only minimally controlled by the organization.
• They should typically volunteer at times that are convenient for them.
• If they are also employees, they shouldn’t volunteer during normal work hours.
• If they perform services for a for-profit company, they are not volunteers.

Help your supervisors understand FLSA regulations with BLR's FLSA - What Supervisors Need to Know audio click n' train.

5 Strategies to Revive Employees' Work Ethic

COBRA Complications Confuse HR

5 Steps to Keep Your Employees Engaged and Committed

We keep hearing in this recessionary economy that employees are taking it on the chin in many, many ways—losing their jobs, receiving no salary increases, perks like the 401(k) match taken away, and as wages stagnate, consistently being asked to do more with less for less. The italicized phrase comes from Mike Ryan, senior vice president of marketing and client strategy for Madison Performance Group. Here’s some of his advice.

Morale matters. Madison Performance Group is a leading developer of employee engagement and incentive marketing programs, featuring automation, for Fortune 1000 companies. But we think his strategies apply in organizations of all sizes.

“Most employees feel overworked and underappreciated,” says Ryan, warning employers that while workers may be too fearful of the poor job market to leave now, they will absolutely leave when conditions improve. Furthermore, he believes, employees who are emotionally and intellectually committed to what they do and who they do it for are more productive than those who are not.

Here are the five steps he recommends that all employers take, regardless of their size or the amount of automation in their performance management process:

1. Repair your culture. A positive corporate culture aligns strategy with behavioral expectations. That is, employees know how they should do what they do in order to bolster the organization’s success, and they have clarity and purpose in their work. Employees should always perceive a corporate framework for their contributions. Check especially for a lack of trust and try to root it out.
2. Foster continuous innovation. No one at the top has all the answers, and every business needs new processes, and new ideas. Many businesses also need new products and new markets. Smart companies understand that innovations happen when complex thinking is applied to problems or opportunities by employees are committed to new and more effective outcomes. Employees must believe that management is open to new ideas and will general support taking prudent risks.
   How to get those principles across? Use your recognition programs to solicit, acknowledge, and communicate new ideas. Programs can ease the fear of failure that stifles innovation. Boost employee collaboration at team meetings and brainstorming sessions.
3. Ensure frontline managers are on board. They need to know their subordinates well, understanding not only their personal and professional goals but also their best skills and talents. Again, the recognition programs are the vehicle to convey the encouragement employees need. If your managers don’t seem committed enough to the development of their subordinates, advises Ryan, look at the C-suite to see whether top management is as involved as it should be in shaping talent management strategies.
4. Focus particularly on remote workers. Rapid development of digital technologies has allowed many more people to work away from their companies’ facilities; indeed, they may be spread around the globe. But overuse of such digital tools as e-mail, texting, and instant messaging can lead to misunderstandings, taking messages out of context, and even alienation. The reason is that facial expressions and vocal inflections are missing.
   Strive to hold frequent conference calls, throwing in an occasional video conference. If at all possible, offer a face-to-face conference at least every 2 or 3 years. Also, consider bolstering internal communication with social media, especially to increase community connections and expand the impact of recognition. Social media can help bring employees with common interests together to share successes and learn from one another.
5. HR: Think and act more like marketers. Human resources people are, or should be, more committed to employee engagement and development than anyone else in the organization. But marketing teams have taken more quickly to using digital media to deliver more efficient and effective messages. Through such media, they build personalized relationships with the brand. HR needs to follow suit, striving to build personalized relationships between employees and the company and brand. One good way for HR to use social media is to communicate about benefits through a frequently updated blog that answers questions and explains plan features.

An Accident, or Race Discrimination?

An Illinois steel worker repeatedly complained to his supervisor about the offensive behavior of an African American employee on the same shift. Assigned to work together on a December day in 2005, the two were handling a 940-pound coil. The black employee mishandled the control panel holding the coil as his co-worker painted it. The coil fell on the white employee’s legs, permanently injuring him. He sued.

What happened. “Yates” and “Jones” worked for Hanna Steel, whose workforce is predominantly white and Hispanic. Although they were initially friends, Yates claimed that Jones soon disliked him because he is white. He told his supervisor that Jones made threatening gestures and promised to kill him. But the supervisor lacked the authority to hire, fire, transfer, or discipline employees. And, the boss never told his superiors of Yates’s complaints.

In fact, the company’s antiharassment policy, which Yates had signed as a condition of employment, advised employees to report any harassing behavior they either witnessed or experienced to Hanna’s general manager or its HR director. Yates never did so, but he sued the company for negligence after he was injured, asserting that Jones had deliberately dropped the coil on him, because he is white.

Before a federal district judge, Yates (or his attorney) so badly mishandled his submissions and exhibits that the judge refused to accept them and hear his case. Yates appealed to the 7th Circuit, which covers Illinois, Indiana, and Wisconsin.

What the court said. Appellate judges reviewed the witness affidavits that Yates had eventually submitted. What they found was that Jones was an “equal opportunity bully” who behaved aggressively toward everyone, regardless of race. They also ruled that Jones’s behavior toward Yates before the coil incident was not severe, pervasive, or motivated by race. Further, another worker provided testimony that he had once mishandled the control panel holding the coil, in much the same way as Jones did.

Judges decided that the coil incident had been a careless accident on Jones’s part, not a deliberate attempt to injure Yates. So Hanna did not act negligently, and Yates’s case was again dismissed. Yancick v. Hanna Steel, U.S. Court of Appeals for the 7th Circuit, No. 10-1368 (2011).

Point to remember: What truly sank Yates’s case was that he had never complained to anyone with genuine authority about Jones’s behavior prior to the accident. The standard for such situations, based on sexual harassment case law, is that an employer has an "affirmative defense" if the employee unreasonably failed to use the company’s complaint procedure.

Are All Diabetics Disabled?

A Louisiana postal manager was diagnosed in 1997 with diabetes and was able to manage his condition without medication until 2004, when he began injecting insulin. His symptoms worsened in early 2006, and his doctor diagnosed it as stress resulting from Hurricane Katrina. He took a medical leave of absence for stress management counseling from March until June, and that caused him a lot of difficulty.

What happened. “Gifford” was managing a New Orleans “twilight” shift for United Parcel Service when he went on leave. His work schedule was 2 p.m. to 10 p.m. weekdays. On his return, though, that position had been filled. Some other possibilities fell through, and Gifford was told that the only opening available was that of midnight hub manager. He insisted that his doctors recommended that he work daytime hours so as to manage his condition effectively, including medication, frequent small meals, and some exercise.

He presented UPS officials with letters from his doctors, one of whom recommended daytime work hours. But the doctor also answered “no” regarding whether Gifford’s impairments substantially limited his ability to perform any major life activities beyond working. No other doctors mentioned any particular work schedule. UPS decided it was not obligated to accommodate his request for a dayshift job, because he was not disabled by his diabetes—a fact that he at one point admitted.

Frustrated, Gifford retired on December 1. And, he did not complain to the regional HR department or raise the issue to the formal employee dispute resolution program. But the following May, he sued, charging violation of the Americans with Disabilities Act (ADA). A judge in federal district court ruled that he was not disabled and thus not protected by ADA. Gifford appealed to the 5th Circuit, which covers Louisiana, Mississippi, and Texas.

What the court said. Judges relied on two important Supreme Court ADA rulings, Sutton (1999) and Williams (2002). Both stressed that whether an individual has a disability must be determined on a case-by-case basis, especially when an “impairment is one whose symptoms vary widely from person to person (Williams).” Otherwise, justices noted, because diabetes is a serious disease, all diabetics would automatically be considered disabled. So judges here agreed with the district judge and ruled against Gifford. Griffin v. UPS, U.S. Court of Appeals for the 5th Circuit, No. 10-30854 (2011).

Point to remember: ADA was amended on January 1, 2009 (well after the incidents of this case), overturning the Sutton and Williams rulings. Congress saw them as interpreting disabilities too narrowly and not as the law intended.

Alcohol in the Workplace: Ho, Ho, No! Real Life Examples Illustrate the Hazards

by Susan E. Schoenfeld, J.D., BLR Senior Legal Editor
As the holiday season draws near and workplace partiesgo into full swing, the issue of whether or not to serve alcohol at those parties arises again (and again). As most employers know, permitting the use of alcohol at work events is at the very least, problematic.

What many employers are not aware of is the great number of legal issues related to alcohol abuse and employment. To illustrate these very real issues, we offer the following scenarios, taken from actual questions posed by our readers.

Limiting Liability When Alcohol is Served

Question: We are having an off-site, non-mandatory holiday party. We will have a bar where anyone may choose to buy his or her own drinks. We will not be serving any alcohol at the tables. How can the employer limit its liability under these circumstances?

 

Answer: Court rulings in many states have held that “persons,” including employers, who serve liquor may be held liable for injuries to guests or third parties as a result of accidents caused by intoxication. Jury verdicts can skyrocket into the millions of dollars in these cases, particularly in situations where a drunken employee on the way home from a company function causes fatal injuries to a third party.

The following are some practical tips for serving alcohol at employer-sponsored social functions:

• Make sure that employees have received a copy of the organization's substance abuse policy. Include a sentence or two clearly stating that the policy includes not only the use of substances at the workplace, but at work-related events as well.
• Move the party off-premises to a club or restaurant, and hold it during nonworking hours.
• Do not conduct company business at the party--even handing out turkeys or company bonus checks or presenting speeches by top management could be interpreted as company business.
• Do not require attendance, or even recommend that employees attend; make it strictly and absolutely voluntary.
• Have the party managed and planned either by the employee association or as a joint effort of management and some informal grouping of responsible employees.
• Do not provide liquor purchased with company funds.
• Hire a professional bartender who will not serve intoxicated individuals.
• Consider closing the bar early in the evening. Many employers make an open or cash bar available for a "cocktail hour" at the beginning of a party but close the bar later (for example, once dinner is served, the buffet opens, etc).
• Serve nonalcoholic drinks and meals or snacks.
• Arrange for certain nondrinking employees, taxis, or limousine drivers to take home those who are unfit to drive themselves.
• Have a clear policy stating that overconsumption of alcohol at company social events is not acceptable, and be sure the policy is effectively communicated to employees.

Because laws and court decisions may vary from state to state, the employer may want to check with a local attorney to determine what exposure you may have by hosting this type of event.

Underage Employees

Question: Is an employer liable for underage employees “sneaking” alcohol at a holiday party? What if the employer institutes a “bring your own” alcohol policy?

Answer: In general, the more involved an employer is with a function, the more likely it is that the employer will be held liable. Variables include: on premises vs. off premises, during work time vs. off work time, mandatory attendance vs. voluntary attendance, whether the employer is a sponsor vs. employees are sponsors, and whether the employer derives benefit vs. whether the employer derives no benefit, etc.

If an employer chooses to allow employees to bring their own alcohol to an event (BYO), the employer's liability may be diminished, but will most likely not be eliminated. The best course may be to adopt a procedure which gives the employer the most control over eliminating the possibility of underaged employees drinking. BYO may not be the best way to control access to alcohol. Instead, the employer may want to consider notifying employees in advance that employees under the age of 21 may not be served alcohol at the event. In addition, using hired bartenders who have the right to "card" party goers may be effective.

Other Issues Related to Alcohol Abuse and the Workplace

Unfortunately, the workplace problems related to alcohol abuse do not end after the holidays. All through the year employers are forced to address many issues of performance and attendance when employees abuse alcohol. In the second article of this series—appearing on HR.BLR.com tomorrow (December 1)—we’ll discuss other alcohol abuse-related issues our readers have had and how we responded.

Susan Schoenfeld, J.D., is a Senior Legal Editor for BLR’s human resources and employment law publications. Ms. Schoenfeld has practiced in the area of employment litigation and counseling, covering topics such as disability discrimination, wrongful discharge, sexual harassment, and general employment discrimination. She has litigated numerous cases before the U.S. Court of Appeals, state court, and at the U.S. Department of Labor. In addition to litigating employment cases in state and federal court, she provided training and counseling to corporate clients regarding employment-related issues. Prior to entering private practice, Ms. Schoenfeld was an attorney with the Civil Rights Division at the U.S. Department of Labor in Washington, D.C., where she advised federal agencies, drafted regulations, conducted inspector training courses, and litigated cases for the Office of Federal Contract Compliance Programs, the Directorate of Civil Rights, and the Mine Safety and Health Administration. Ms. Schoenfeld received her undergraduate degree, cum laude, with honors, from Union College, and her law degree from the National Law Center at George Washington University.

3 Tips for Managing During the Holidays

Managers, supervisors, and executives often find themselves having to set the tone for the holidays for everything from determining who gets time off to hosting the holiday party. Evelyn Williams of Wake Forest Universitysays finding the balance can be the difference between leading through the holidays and landing in the pitfalls.

Williams, who is associate vice president for leadership in the Wake Forest University Schools of Business, teaches undergraduate and graduate students about leadership. Her research into conflict management and team dynamics prepares her to offer three tips for leaders to thrive through the holidays.

1. The Best Gift You Can Give Employees: Gratitude

"At the holidays we're very focused on family and friends," Williams says. "But shouldn't we take this time to express gratitude to people we may see for more hours each day than our family and friends? Take the time to tell your employees how special they are. List their accomplishments or share your appreciation for their effort." Williams says the message of gratitude might accompany a holiday gift, or stand alone.

• Don't forget to thank internal partners or other departments who help you throughout the year.
• Gratitude is inclusive and isn't subject to religious or cultural beliefs.
• A handwritten note or card giving personal and specific feedback will have a huge impact.

"Sending a thank you to internal folks that serve your department or your customers used to be the tradition, but budget cuts and organizational changes may have changed that," Williams says. "We should bring that back. Tell them specifically how they have helped you through the year and you couldn't imagine doing the good job you do without their help. It really makes a difference in how they'll perceive your department and interact with you in the future."

Williams says some might leap on this idea of expressing gratitude while others scoff at it as a way to avoid holiday bonuses or gifts. "Who doesn't want to hear from their boss how special they are? It's a rare employee who says they get too much good feedback."

2. The Best Gift at The Office Party: Sobriety

"From a leadership aspect, you're never off duty. People have different expectations of you," Williams says. "People weight your words differently. An off the cuff comment after three cocktails might be taken as devastating by a junior employee, or give them reason not to respect you." While it's natural for the boss to want to mix and mingle with employees at the holiday office party, Williams suggests you remind yourself the leadership mantle never leaves.

• It's OK to delegate certain tasks around the holiday office party, butleaders should set the tone and make sure behavior and gifts (such assecret Santa) are kept appropriate.
• Remember women lose more credibility than men do around drinking situations when there is a loss of behavioral control.
• Be 100 percent in control of your own behavior.

"Make sure you reflect the culture of your group, not just your own interests," Williams says about the holiday party. "Be inclusive of all your employees, since not everyone celebrates the same holidays."

3. The Best Gift to Give Yourself: Networking

"Networking during the holidays presents a wonderful opportunity to expand and deepen your connections just by saying thank you," Williams says. "At a holiday party, don't make it about your agenda. It's a great time to practice inquiry vs. advocacy. Use your listening skills to really bond on a relational level."

Send a holiday card with a genuine message of appreciation. Emails with earnest messages of thanks can work too, in a pinch. Consider sending a sincere message to a colleagues and copying their boss because you want their manager to know how much their help has meant.

Be heartfelt and real. Give people in your circle something homemade like fudge or cookies or even a small package of chocolates to let them know you're thinking of them.

Reflect what you're hearing back during conversations: "Sounds like you're doing a really amazing job," or "Gosh, sounds like it's been a frustrating year," to enhance your listening skills.

"So much of the year we are focused on solving problems at work," Williams says. "The holidays can be a time that passes by in a blur if we aren't careful. Taking a step back and focusing on the people we work with, really listening to them, saying thank you and respecting their contributions might be the best way to manage through holidays."

What is COBRA?

 

How many times have you had an employee ask: "what is COBRA?" Do you have a simple, straight-forward answer for them? Sometimes it's difficult to keep all of the details of COBRA straight, yet doing so is incredibly important: your company can be subjected to heavy financial penalties for failure to comply.

COBRA regulations provide for a continuation of health insurance coverage for qualified beneficiaries in qualifying events for a limited amount of time. The regulations apply to all healthcare plans except for church plans and plans maintained by an employer that has fewer than 20 employees. Group health plans covered by COBRA include all types of health plans, including dental, vision, health, flexible spending accounts and health reimbursement arrangements.

COBRA's been around since 1986, but many HR professionals are still scratching their heads as they try to decipher COBRA regulations and deadlines – from deciding which employees are qualified beneficiaries and what workplace events trigger COBRA coverage to giving workers notice of their COBRA rights and reviewing healthcare plans to confirm that they're COBRA-compliant. In a BLR webinar titled "COBRA 101: The Legal Dos and Don’ts of Complying With Federal COBRA Regs," Katherine Conklin, Esq., outlined some of the basics to help HR professionals understand their obligations under the COBRA regulations. This article aims to help you understand the basics of what COBRA covers.

The Basics of COBRA Benefits

Here are some details regarding the scope of coverage:

Who is covered? Qualified beneficiaries include employees, their spouses, and dependent children who participate in the group health plan on the day before the qualifying event.

What is the trigger for coverage and when does coverage start? In the webinar, Conklin advised that "there are only certain reasons that you lose health coverage that would entitle you to continue that health coverage after you've lost it under the laws of COBRA. It's not all loss of health coverage; it's only the loss of health coverage that is caused by one of these qualifying events. So, it has to be an event that fits under this list, and, second of all, that event has to cause the loss of coverage."

The trigger for COBRA then, is a qualifying event which causes a loss of coverage under the plan. Different events qualify for differing coverage periods. Termination of employment or a reduction in hours of employment, for example, results in 18 months of coverage. Divorce or legal separation, death, covered employee entitlement to Medicare, or the loss of dependent status will entitle someone to 36 months of coverage. Disabled individuals may be eligible for 29 months of coverage.

Can an employee get an extension?A COBRA continuation period may be extended up to 36 months when a second qualifying event occurs during the initial COBRA continuation period. The initial 18 months also can be extended an additional 11 months, to 29 months, if a qualified beneficiary becomes disabled within the first 60 days of the initial COBRA continuation period.

When is coverage terminated? The coverage can be terminated for several reasons. It can, of course be terminated at the end of the “normal” coverage period. COBRA regulations also allow coverage to terminate before the normal end of the benefit period if the premium payment is not paid or if the employer terminates all of its group health plans. COBRA benefits also end upon Medicare entitlement after COBRA is elected (unless for end-stage renal disease); if the beneficiary joins another qualified plan after COBRA is elected without any pre-existing condition exclusion; and as of the date the beneficiary is no longer deemed disabled under the 11-month disability extension.

The above information is excerpted in part from a BLR webinar titled "COBRA 101: The Legal Dos and Don’ts of Complying With Federal COBRA Regs" with expert Katherine Conklin, Esq. For more information on COBRA regulations, order the webinar recording. To register for a future webinar, visit http://catalog.blr.com/audio.

Katherine Conklin, Esq., is a partner in the New Orleans office of law firm McGlinchey Stafford PLLC. (www.mcglinchey.com) She focuses her practice on employee benefits issues, in both the welfare and retirement benefit areas; a particular area of expertise is compliance with the health continuation requirements of COBRA.