Recent Case Could Make Ohio Employers More Vulnerable To Defamation Claims

Posted on January 11, 2008 by Rob Stalter

Employers certainly have the right to comment about alleged employee misconduct in a grievance proceeding, right? Not so fast. A recent Ohio court of appeals decision suggests that Ohio employers may want to be even more careful regarding what they say about alleged employee misconduct. In Gintert v. WCI Steel, Inc., 2007-Ohio-6737 (11th Dist. Trumbull County 2007), a union employee was fired, in part because three fellow employees said they heard him use a racial slur toward another employee. Denying that he used the slur, the terminated employee sued the company, his supervisors, and two employees for defamation. Continue reading . . .

Court Finds That Immigrant Workers’ Transportation and Visa Expenses Must Be Taken Into Account For Minimum Wage Purposes

Posted on January 10, 2008 by Rob Stalter

A recent wage-and-hour case illustrates the effect payroll deductions can have on minimum wage compliance. In Rivera v. Brickman Group, Ltd., No. 05-1518 (E.D. Pa. Jan. 7, 2008), a company brought Guatemalan and Mexican workers to the United States for seasonal employment under H-2B visas. Although the workers were paid amounts that appeared to be above the minimum wage, the company failed to take into account certain travel expenses and other employment-related costs incurred by the workers – expenses that reduced the workers’ earnings below minimum wage levels. Continue reading . . .

General Assembly to Consider the Healthy Families Act

Posted on January 10, 2008 by Kathy Krisher

Secretary of State Jennifer Brunner announced that the Ohio Healthy Families Act (see previous post), which mandates seven paid sick days for employees at Ohio companies with 25 or more workers, easily had enough signatures to pass petition requirements. The petition had 154,693 valid signatures of Ohio registered voters and only 120,683 were required. The Act will now be passed on to the General Assembly for action.  Continue reading . . .

IRS Targets FedEx’s Treatment of Drivers as Independent Contractors

Posted on January 9, 2008 by Brian Hall

From FedEx Corporation’s most recent 10Q filing comes the following:

“On December 20, 2007, the Internal Revenue Service (“IRS”) informed us that its audit team had concluded an audit for the 2002 calendar year regarding the classification of owner-operators at FedEx Ground. The IRS has tentatively concluded, subject to further discussion with us, that FedEx Ground’s pick-up-and-delivery owner-operators should be reclassified as employees for federal employment tax purposes. The IRS has indicated that it anticipates assessing tax and penalties of $319 million plus interest for 2002. Similar issues are under audit by the IRS for calendar years 2004 through 2006. We believe that we have strong defenses to the IRS’s tentative assessment and will vigorously defend our position, as we continue to believe that FedEx Ground’s owner-operators are independent contractors. Given the preliminary status of this matter, we cannot yet determine the amount or a reasonable range of potential loss. However, we do not believe that any loss is probable.”

With the IRS on its back and multiple class actions to defend, FedEx’s experience demonstrates the need for companies to consider very carefully their independent contractor arrangements to ensure that workers are properly classified. Given the IRS’s recent emphasis on this area, we suspect this is just the tip of a very large iceberg.

FTC Levies $50,000 Penalty Against Company That Fails to Dispose Properly of Credit Report Information

Posted on January 9, 2008 by Brian Hall

Does your company have a policy for disposing of human resources records that contain employee social security numbers and other personal information? A recent Fair Trade Commission (FTC) enforcement action may make such policies a priority for companies in 2008. 

The FTC just agreed to a settlement with American United Mortgage Company of Northbrook, Illinois.  The FTC accused American United of violating the FTC’s Disposal Rule (, which requires companies to dispose of credit reports and credit report information in a safe and appropriate manner. According to the FTC’s Complaint, American United repeatedly disposed of intact consumer credit reports, which contained consumers’ personal information, in an unsecured dumpster near its office. The settlement, which was announced by the FTC on December 18, 2007, requires, among other things, that American Mortgage pay a $50,000 civil penalty for violations of the Disposal Rule and obtain, every two years for the next 10 years, an audit from a qualified, independent, third-party professional to ensure that its security program meets the standards of the settlement order.

2008 Will Bring Important Trade Secrets Ruling From Ohio Supreme Court

Posted on January 9, 2008 by Brian Hall

If a Franklin County Court of Appeals decision is upheld, Ohio employers may reap the benefits of even greater protection against former employees who engage in competing business endeavors. For this reason, the Ohio Supreme Court’s ruling will be closely watched by employers and employees alike.

“In the absence of a no-compete agreement between an employer and its former employee, does the employee’s compilation from memory and competitive use of a list of his former employer’s customers constitute a violation of Ohio’s Uniform Trade Secrets Act?” That is how the Ohio Supreme Court framed the issue pending before it in Al Minor & Associates, Inc. v. Robert E. Martin, a case in which the Court held oral argument on November 6, 2007. The case has been briefed and argued – all that awaits now is the Court’s decision.

Will President Bush Ultimately OK a Family and Medical Leave Expansion?

Posted on January 7, 2008 by Kathy Krisher

On December 28, 2007, President Bush “pocket vetoed” the National Defense Authorization Act (H.R. 1585), which passed both houses of Congress in mid-December. The Act would have provided 12 weeks of FMLA leave to immediate family members (spouse, child or parent) of any reservist or member of the National Guard who is called to active duty in the military. The Act also would have provided over six months of leave to employees to care for family members who are combat-injured armed service members.

Ironically, President Bush allowed the legislation to fail despite the fact that it was recommended by the President’s Commission on Care for America’s Returning Wounded Warriors. The Commission reported that about 21 percent of wounded service members had a family member or close friend relocate to help in their recoveries and that many of them gave up their jobs to find the time to do so.