In a decision issued on June 9, the Sixth Circuit Court of Appeals (which covers Ohio, Michigan, Kentucky and Tennessee) affirmed the dismissal of sexual harassment claims brought by the Equal Employment Opportunity Commission (EEOC) on behalf of three female AutoZone employees. In its decision, the Court reaffirmed some important principles.

The case involved a store manager who was transferred into an AutoZone store in Cordova, Tennessee. Shortly after arriving, he began to make lewd and obscene sexual comments and propositions to one female employee in particular and also made sexual comments to two other female employees as well. Under AutoZone’s system, the store manager did not have the authority to fire, promote, reassign and take tangible employment actions with respect to store employees (even though he could make some hires). Those responsibilities were reserved for the district manager (who visited the store at least once a week).
Continue Reading Sixth Circuit decision in EEOC v. AutoZone provides road map to sexual harassment defense

We would like to thank Adam Bennett, one of Porter Wright’s summer law clerks, for his significant contributions to this blog post.

If a recent federal court case is any sign of the times, employers should think twice before engaging in their own forensic crime scene style investigations of employee questionable behavior—even if the employee

Summertime brings company picnics, charity walks and softball leagues. Great moments for increasing employee morale, but these activities may lead to employer liability if an employee is injured while participating in such activities.

In Ohio, employees injured while engaged in an employer-sponsored recreational or fitness activity are entitled to workers’ compensation benefits unless the employee

On Tuesday, March 31, 2015, the NLRB issued an order upholding an ALJ decision that Pier Sixty LLC violated Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act when it terminated an employee who wrote on his Facebook page that his supervisor was a “NASTY M____ F____ER.”

According to the Board’s majority opinion, a

The NCAA men’s basketball tournament, a/k/a March Madness, kicks off Sunday, March 15 with Selection Sunday, then rolls on Tuesday, March 18 with a couple of play-in games and then on to the actual tournament, which begins Thursday, March 20. The brackets, the gambling, the office conference rooms dedicated to the games, the continual online streaming of games, the excitement…it’s all here! And with Warren Buffet recently announcing he will give $1 billion to anyone who can pick a perfect bracket, the stakes just got higher! While the Billion-Dollar Bracket may be new this year, March Madness, Super Bowl betting and Fantasy Football pools have long been ingrained in the American workplace, and with managers, supervisors and human resources professionals alike participating in the action, the slew of workplace issues associated with these events keeps increasing.

There is no question these events cause major distractions in many workplaces and gambling pools associated with these events create a wide range of risks for employers, like productivity loss, discrimination, whistleblower issues, disability issues and even criminal penalties. These risks are often overlooked because no one wants to be Debby Downer, but before burying their heads in the sand, employers should be familiar with some of the risks and some helpful solutions:

Is Workplace Gambling Legal?

The most obvious issue: Workplace gambling. But the real question: Is it even legal? On a federal level, probably not. If an office NCAA bracket pool crosses state lines or is conducted online (as many of them now are), it may violate the Interstate Wire Act of 1961. This act prohibits those “engaged in the business of betting or wagering [who] knowingly use a wire communication facility for the transmission in interstate or foreign commerce” to place bets on sporting events or contest. Because the Internet is a “wire communication facility”, an online pool seemingly violates this Act if its participants pay entry fees as a wager to win a bigger prize – yet we all know that such pools are readily available from mainstream internet sites, e.g. ESPN. There is a fantasy sports exception, but bracket pools do not seem to fit within this exemption because they require individuals to bet on the outcomes of the games.

The next federal law is the Professional and Amateur Sports Protection Act, which makes it illegal for anyone to operate “a lottery, sweepstakes, or other betting, gambling, or wagering scheme…in which amateur or professional athletes participate.” The Act grandfathered in previously authorized sports gambling in four states (Nevada, Delaware, Oregon, and Montana), but March Madness bracket pools were not included in the grandfathering.

Lastly, the Uniform Internet Gambling Enforcement Act (“UIGEA”) provides, “no person engaged in the business of betting or wagering may knowingly accept” funds “in connection with the participation of another person in unlawful Internet gambling.” The UIGEA has an exception that permit fantasy sports if: (1) the value of the prizes is not determined by the number of participants or the amount of fees paid and the prize is made known to participants before the contest begins; (2) all winning outcomes reflect the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individual athletes in multiple real-world sporting or other events; and, (3) the fantasy game’s result is not based on the final scores or point-spread of any single real-world game and not solely on any single athletes’ performance in a single event. March Madness bracket pools fail the second and third prongs.

On a state level, whether the tournament is illegal or not depends on the state. Although most states ban gambling, state gaming laws typically provide exceptions for “social” or “recreational” gambling, but to qualify for these exceptions (in most instances) the following must occur: (1) all of the money in a pool must go to a winner or a charitable organization, i.e. the “house” cannot receive any of the proceeds; (2) there must be a maximum amount a person can wager (like a $20 entry fee); and, (3) the pool must be limited to a certain number of people with pre-existing relationships (like co-workers). So, in some states, NCAA bracket pools that meet these requirements may be permissible. Ohio’s Constitution bans gambling, except lotteries, charitable bingo, casinos and racinos.

While law enforcement is probably not concerned with workplace bracket tournaments, employers should be aware that if they choose to sponsor a pool, theoretically at least, they risk fines and criminal penalties.

Controlling Gambling in the Workplace

Based on the information above, there are sound arguments that March Madness bracket gambling is likely prohibited by law, including in Ohio; however, this legal/illegal minor detail has never seemed to stop the gambling tradition. As such, employers need to figure out how to deal with these issues as they creep into their workplaces over the next few weeks and when fantasy football season comes around in the fall.

The safest and easiest approach for employers is to prohibit gambling, including NCAA bracket pools, in the workplace and describe acceptable and prohibited behaviors, e.g., using company-owned computers and servers for gambling purposes and identify work areas (e.g., offices, cafeterias and parking lots) where gambling is prohibited.

Recognizing that many, if not most, employers will not want to interfere, employers who choose to allow workplace gambling should consider implementing a workplace gambling policy, or update their current one, to include the following:

  • The policy should describe the type of gambling that is allowed. If gambling is limited to March Madness brackets, the policy should expressly say so. If, however, an employer wishes to allow for fantasy leagues, OSCAR polls, Super Bowl polls, etc., the employer should take the time to make sure all allowed workplace gambling is included in the policy;
  • The policy should require that the specific type of gambling being done in the workplace be approved by human resources to ensure it fits within the legal requirements set forth above;
  • The policy should define if and how the employer’s property can be used to engage in the workplace gambling. For example, if workplace televisions, copiers, computers, email, etc. are not allowed to be used for such activities, the policy should expressly say so. If they are, the policy should clearly communicate policies regarding employee breaks, email and Internet use so employees know what is acceptable;
  • The policy should inform employees that the gambling activities cannot interfere with production or work;
  • The policy should outline the employer’s complaint procedure in the event there is an issue; and
  • The policy should outline the discipline that may be lodged against an employee in the event of a policy violation.


Continue Reading Are You Ready, Baby? March Madness = Workplace Madness

The Internet is burning up this morning with the story of an Applebee’s waitress who was fired for posting on Reddit, a social news and entertainment site, the receipt from a customer who gave her no tip on a $35.00 check, writing "I give God 10% why do you get 18?" Unfortunately, the waitress did

I know we haven’t posted anything in a couple of weeks, so some of you might think that I am reaching when I write about a Utah state court decision overturning a lower court decision that had denied the plaintiff the right to amend his complaint. Normally, this would generate a big yawn, but it is not every day that I read a case where the plaintiff alleges that his supervisor had him waterboarded as a motivational tool for his workforce.
Continue Reading Sales Managers Gone Wild?

It may be that it’s Monday morning as I write this but I have to admit I got a kick out of the news articles circulating late last week that reported that Goldman Sachs has revised its electronic communications policy to prohibit the use of any profanity in emails. The edict apparently results from emails that became public

President Obama signed the “Jobs Bill” into law on March 18, 2010. Part of the Jobs Bill is the HIRE or “Hiring Incentives to Restore Employment” Act. The HIRE Act grants employers a tax exemption for their 6.2 percent Social Security (or FICA) payroll contribution for every new qualified employee hired between February 3, 2010, and before January 1, 2011, for wages paid beginning March 19, 2010.

A qualified employee is someone who has been unemployed for 60 days prior to accepting employment. Being “unemployed” means having worked less than 40 hours during the preceding 60-day period. To be qualified, the employee must not be hired to replace another employee unless the employee quit voluntarily or was fired for cause, which includes employees who were terminated as part of downsizing. Finally, a qualified employee must not be “related” to the employer as defined in the U.S. Tax Code.

 

In addition to the 6.2 percent exemption, employers may earn an income tax credit that is equal to 6.2 percent of paid wages, or up to $1,000, for every new qualified employee who is retained for 52 consecutive weeks. This credit will be taken on the employer’s 2011 income tax. To ensure eligibility for the income tax credit, the employer must ensure that the wages paid to any qualified employee during the last 26 weeks are at least 80 percent of what was paid to that employee during the first 26 weeks.

 


Continue Reading HIRE Act Provides Tax Exemptions for Employers