The NLRB's War on Employee Policies

 {Before skipping this post because you don’t have a union, remember that the National Labor Relations Act (NLRA) applies to employers without unions too.  You can read about the application of the NLRA to non-union employers here.}

War might be an extreme description, but the NLRB has been issuing decisions that declare run-of-the-mill employee policies as unlawful.  For example, earlier this month the NLRB determined that an employer’s conduct policy was unlawful.  The unlawful provisions of the policy stated that “employees will not make negative comments about our fellow team members”, “employees will represent [the employer] in the community in a positive and professional manner in every opportunity”, and “employees will not engage in or listen to negativity or gossip”.  What’s wrong with prohibitions against gossip and being rude?  Well, the NLRB found that the prohibitions might discourage employees from exercising their rights under the NLRA.  It’s not that the employer actually disciplined anyone for engaging in protected rights it’s that the employee might believe that she can’t engage in protected conduct.

Other policies that have been under attack include confidentiality policies, social media policies, dress code policies, confidentiality during workplace investigations, and at-will employment policies.

Before throwing out all your policies and handbooks and declaring anarchy at the workplace, remember that the NLRB isn't prohibiting you from having policies.  It is requiring that the policies you have are narrowly tailored and specific about the type of conduct you expect from your employees.  Instead of pitching the policies, have them reviewed to ensure that you aren't unknowingly violating the NLRA (or any other laws!)

The Skill of Knowing When to Fold Them

A Federal District Court Judge in Brooklyn ruled that poker is a game of skill, rather than a game of chance.  At issue was whether game operators should be prosecuted under the federal law that prohibits running an illegal gambling business.  Judge Jack Weinstein noted in his ruling that the "most professional poker players earn the same celestial salaries as professional ballplayers," and reviewed statistics which showed that in a sample of 100 million poker hands played, over 70% of those hands were won before cards were turned over.  Instead, he reasoned "[t]he pot went not to the luckiest among them but to the most deft — the player who could guess his opponents’ intentions and disguise his own, make calculated decisions on when to hold and fold, and quickly decide how much to wager." 

Iowa Fence Law Legislative Update

As an update to previous entries regarding Iowa's fence law, the 2011 proposed legislative changes (Senate File 2102) failed to make it out of subcommittee.  We will have to wait another year to see whether the legislature decides to modify the century-old statute, in particular limiting its application to agricultural uses.  Until then, the statute will continue to operate in a gray area.

Election Day in Iowa: Know Your Rights

On this much anticipated first Tuesday after the first Monday in November, millions of people are flocking to the polls to cast their ballots.  For Iowa voters, there are some nuances to election law that are important to keep in mind:

  • Unregistered voters can register and vote on election day.  You must be at the precinct where you live, complete a voter registration application, sign a written oath, and present appropriate identification.  Iowa Code § 48A (2008).
  • A student who attends an Iowa college or university may vote in their hometown or at their college residence.  Obviously, you have to choose one or the other.  Iowa Code § 48A (2008). 
  • People convicted of felonies who have completed their sentence (including probation, parole, & supervised release) before July 4, 2005 are eligible to vote.  On that date, Governor Vilsack signed Executive Order No. 42, which granted a blanket restoration of the right to vote and hold public office to persons who were disqualified from registering to vote because of conviction for a felony or aggravated misdemeanor.

If you have any questions, contact your county auditor.  Remember, the polls in Iowa close at 9 p.m., so make sure to cast your ballot before then! 

Think from the End when Starting a New Business

The best time to make decisions regarding how to exit a business venture is at the beginning, especially if the business is to have more than one owner.  Why?  Because, although this my seem a little cynical, it is in all likelihood precisely the time when the soon-to-be business partners will be most closely aligned and focused on a common goal.  It is at this time, when leaving the business is the furthest thing from the partners minds, that objectivity can be achieved and a fair buy-sell agreement can be created that allows a partner out, without placing an undue burden on the remaining partner(s) and business.  At a bare minimum a carefully crafted buy-sell agreement will cover, (1) How the value of an owners interest in a business will be determined; (2) What, if any, internal or external events will trigger a buy-out; and (3) Is the sale of a departing owners interest restricted in anyway.

For information on different types of buy-sell agreements and their tax implications see Structuring Corporate Buy-Sell Agreements by David Joy, Jo Koehn  

Debt Collectors Save Us All Money in 2007?

In a national study entitled "Value of Third-Party Debt Collection to the U.S. Economy in 2007:  Survey and Analysis" , which was conducted by PricewaterhouseCoopers and commissioned by ACA International, it was determined that in 2007 the collection industry was able to return $40 billion in bad debt back to large and small businesses that had previously extended consumer credit.  That $40 billion return represented a greater than twenty (20) percent reduction in private-sector bad debt.  The study suggested that this return of $40 billion translated to an average savings of $354 per American household, as the reduction in bad debt helped companies keep their margins low and in turn sell there products at a lower price.  So there you have it...through the diligence and hard work of its employees the collection industry benefits us all.

Retaliation

I recently attended an employment law seminar in St. Paul, Minnesota. One key topic that kept resurfacing in the sessions I attended was RETALIATION. Title VII retaliation claims have increased 19% from 2006

An employer retaliates when it makes an adverse employment decision which tends to discourage an employee from engaging in protected conduct. What is an adverse employment decision? Although not clearly defined, the Supreme Court has made it clear that it is not necessarily have to be a tangible employment decision, such as termination. What is protected conduct? Whistleblowing, filing a complaint, taking FMLA leave or making a worker’s compensation claim are all examples of protected conduct.

What should employers do to minimize retaliation claims?

  • Have a clear policy prohibiting retaliation;
  • Educate managers and supervisors about retaliation;
  • Enforce policies consistently for all;
  • Refrain from making hasty decisions when employees have engaged in protected activity in the recent past even if you believe the decision is warranted;
  • Investigate all retaliation claims and discipline those who have engaged in retaliation. Inform the employee alleging retaliation of your findings and whether any disciplinary action will take place;

Some Mechanics of Iowa Mechanic's Lien Law

Mechanic's Liens are a valuable tool used by contractors to help insure that they are fully compensated for the materials they supply and the improvements that they make to buildings or land.  However, if you are a contractor providing materials or making improvements to an "owner-occupied" dwelling, essentially a residential remodeling contractor, then the mechanic's lien that you file may not be worth much more than the paper that it is printed if you neglect one crucial step.

Under Iowa's Mechanic's Lien law, Chapter 572, a contractor who enters into a contract with a home owner to provide labor or  furnish materials for a owner-occupied dwelling and who has or will hire sub-contractors for the job must provide in the written contract with the home owner the following notice: 

"Persons or companies furnishing labor of materials for the improvement of real property may enforce a lien upon the improved property if they are not paid for their contributions, even if the parties have no direct contractual relationship with the owner."

In the alternative a contractor who does not enter into a written contract with the home owner must, within ten (10) days of beginning work on the property, provide the owner with written notice stating the name and address of all subcontractors that the contractor intends to use for the construction and, that the subcontractors or suppliers may have lien rights if they are not compensated for the labor or material that they provided in completion of the project.

If written notice required under Chapter 572 is not provided to the owner in a timely manner then the contractor is only entitled to a lien for the work or materials that it actually performed or the materials that it actually provided and would not be entitled to a lien as it pertained to any labor performed or materials furnished by a subcontractor.

Landlords: Beware of Dog

The Iowa Court of Appeals recently had before it a sad (sad for the child that was injured and sad for the dog) and somewhat surprising dog-bite case in which they decided that a fact question was created, necessitating further review, when a landlord had knowledge that a dog had a propensity towards violence and yet that landlord allowed the dog to remain on the property.

The abbreviated facts are as follows:  Landlord's son, who was also a tenant, had a German Shepard as a pet.  German Shepard was kept outside, possible neglect occurring (Disclosure Alert: dog owner writing this blog post). German Shepard attacks neighbor.  Landlord/father is aware that tenant/son's dog attacked neighbor.  Steps are taken to insure that dog does not get loose again.  Tenant/Son sent jail for unrelated matter.  Dog left in fenced in yard (testimony showed neglect).  Landlord/father insists that dog be removed.  Son/ex-tenant threatens suicide, father/ex-landlord relents.  Dog eventually escapes and severely injures neighbor boy.  Court of Appeals finds, among other things, that a fact issue requiring further review had been created as to whether the landlord was negligent in allowing a dangerous dog to remain in his property.

The lesson:  If you are going to allow your tenants to have pets you should have your tenants provide you with information regarding the animals demeanor and any past displays of abnormal aggression.  Also, you should put a provision in your leases that would allow you to terminate the lease should you become aware of an animals aggression and after such aggression the tenant refuses to find alternate accommodations for pet. 

Photo by flickr

Good Tenants Make Good Landlords

Four Legacies Mortgage - Chief Inspiration Officer - Brent Rauch recently put together an informative article addressing the phenomenon of accidental landlords  if you review his article pay special attention to the section titled: Tenents of Tenants. 

It has been my experience that the wrong tenant can make being a landlord a nightmare (side note: the 1990 movie Pacific Heights with Michael Keaton, Melanie Griffith and Matthew Modine comes to mind).  Making a poor choice when deciding on a tenant can turn the once profitable rental property into a money-pit.  The inconsiderate tenant will eat into your profits both though extra damage to the realty and through the non-payment of rent.

Bottom line for success as a one or two unit landlord:  First, choose a property that will increase in value at least as much as your market average. Second, just as Brent suggests, do your due diligence when selecting a tenant to rent your property and with a little luck you just may find that being a landlord can be both enjoyable and profitable.

Mediation: Good for the Family

In Polk County Iowa all litigants in family court, which include divorcing couples and couples in the middle of paternity, custody and support cases, must submit to mediation (unless they are able to resolve their case prior to the mediation deadline). In outlying counties either party may request mediation. Luckily, in Iowa, there are many excellent and experienced family law mediators.

In divorce and other family law mediations, a neutral facilitator will help you and your spouse (significant other) discuss needs and wants. The goal is to reach a mutually acceptable agreement without going to trial. The process is confidential. The majority of time the mediator is an attorney; however, effective mediators have other diverse backgrounds as well.

I am a huge advocate of mediation for the following reasons: Mediation is usually less expensive than a trial, preferred by judges, more satisfactory to the parties and fosters higher compliance. Most importantly, it allows both parties to retain control over case outcome.

Maintaining a Temporary Worker's Status as Temporary

The Question of the Week posted this week got me thinking about the classification of temporary employees. Temporary workers are workers that are employed by a staffing agency which supplies workers to the client company. Temporary workers report to the client, but receive pay and benefits from the staffing agency. Temporary workers, therefore, are considered to be the employee of the staffing agency rather than the client company.

The risk of having a temp become an employee of the client company arises when the client company retains a certain amount of control over the temp. If that happens, the client company may face liability for a wide variety of employment related issues including discrimination and wage and hour violations.

How can the client company reduce the risk of having a temp become classified as an employee? The suggestions listed below are taken from “Get Smart When Using Temporary Employees” and a 2004 Iowa case, Willms v. Associated Materials Inc.

  • Allow the staffing agency to communicate the rate of pay and hours to the temp;
  • Require the staffing agency to perform drug testing or background checks;
  • Request the staffing agency perform periodic visits to the job site;
  • Differentiate the temp uniforms, badges, parking spaces, break rooms, etc. from the permanent employees’;
  • Allow the staffing agency to make hiring and firing decisions as well as take disciplinary action;
  • Limit the time period a temp works at the site;
  • Refer to the temp as a worker who is assigned rather than an employee who is hired;
  • Always have your attorney review your agreement with the agency.

In short, treat temporary employees different than your permanent employees. A client company may not be able to completely eliminate the risks of having temporary workers classified as employees, but by using some of the suggestions above the risk will be reduced.

Photo on flickr by DCvision2006

If You are Going to Acquire a Rental Unit, Don't Forget the Rental Certificate

Given the current real estate market with its increasing foreclosure rate and ensuing credit crunch, individuals and families are choosing to rent rather than buy.  If you have the financial ability and the interest in owning rental property then this could be an intriguing possibility.  However, there is more to owning rental property than simply finding a property and suitable tenants.  If you own a rental unit in central Iowa, before you can move any tenants into your property you must first obtain a rental certificate, according to the Iowa Uniform Residential Landlord and Tenant Act and the City of Des Moines Municipal Code. 

 

If in your haste you neglect to obtain a rental certificate it could come back to haunt you should you find yourself in the unenviable position of having a tenant whom neither pays nor exits the premises on their own volition.  Under Iowa Law, without a valid rental certificate the tenant is considered a tenant at will and the landlord must give thirty days notice prior to eviction, on top of that the past due rent will not be recoverable either.  Bottom line, if you are a current landlord or a prospective landlord, be sure that you have a  rental certificate for each unit before renting.

Photo on Flickr by The Rocketeer

Internet Usage

Julie Elgar of That’s What She Said uses the employees of The Office to illustrate the pervasiveness of internet use in the workplace. Elgar recognizes that unmonitored internet usage can lead to a decline of productivity and even worse harassment among employees. What should employers do? As Elgar says it’s important to develop a monitoring system and inform the employees that the system is in place.   Communicating the policy to the employees reduces their exepctation of privacy in the workplace.  Inform employees of any disciplinary policy you may have regarding violations of the intenet usage policy.

 

Photo on flickr by *diggin an old dude*

IF YOU WANT TO GET PAID, GET IT IN WRITING (part 2)

I can't speak for all businesses, but from my perspective most businesses have a signed agreement before they provide services for either an individual or a business. However, invariably it is those transactions in which the agreement was never actually signed that cause the most problems for the business owner.  

The typical fact pattern goes something like this:   an individual wants some work done to his home, he approaches an electrical contractor for a bid,  the contractor gives the homeowner a bid, the homeowner says, "yeah, that is fine but I need the work done right away because of (insert any emergency situation here)."  

Contractor, says,  "great, it just so happens that I have some time available within your time frame, if you will just sign this agreement I will go ahead and order the material that I will need for the job."    

Homeowner, says "Yeah, I will sign it, I just can't do it today because (insert any half-baked excuse you can imagine). 

That should be definite red-flag to the contractor, or to any other business owner for that matter; however, due to a downturn in the construction industry  and perhaps being a little strapped for cash and against the contractors better judgment he reluctantly takes the homeowner at his word and begins the project. 

At the end of the day the contractor incurred the expense of the project and now the homeowner is unwilling to pay and the contractor is placed in the unenviable position of having to decide to cut his losses and move on or he can go after the homeowner for his damages, which will require a further outlay of cash and time.

The point of this post is this,  if you are going to provide a service and would like to give yourself the best opportunity to be paid for that service, then you must get the agreement in writing.  I know that this is not earth shattering information, but it is worth repeating as everyone knows that they need to put an agreement in writing, yet from time to time exceptions are made and the exception leads to a big headache. 

The bottom line is this:  If you want to increase you ability to get fully paid for every service you provide and therefore increase your bottom line then you must not perform any work before you receive a signed writing spelling out the extent of the agreement. 

If for some unknown reason you find yourself proceeding without an agreement, then my advice to you would be to begin rubbing your rabbit's foot or looking for that four leaf clover because it will likely take all of the luck in the world for you to get paid in full and on time.  If someone does not want to put it in writing then they certainly do not want to pay for it. 

IF YOU WANT TO GET PAID, GET IT IN WRITING (part 1)

In an ideal world, when a business provides a service, the person or entity benefiting from the service promptly pays the provider for that service (assuming of course, that the service was performed as the service recipient expected).  As anyone who has been in business for longer than a week can tell you, when it comes to customers paying for the services that they receive, the world is not perfect. 

Because not all customers pay as agreed, it is imperative that before performing any work the service provider must first get a service agreement signed by the service recipient.   I know that this seems obvious and I would guess that the majority of businesses do get the bulk of their agreements in writing, yet it is always the small exceptions that end up causing business owners the biggest problems. 

Now, I know that there is portion of small business owners reading this that are likely saying to themselves:  "we do business on a handshake and a person's word is just as good as any contract," and  I would agree that that is the case 95% of the time,  but it does not take too many disputes over payment to begin to negatively effect your bottom-line.  When a service has been provided yet the recipient unjustifiably refuses to pay for that service,  then the business owner has a choice to make:  either eat the costs of the service or enlist the services of an attorney.   It has been my experience that most business owners would rather shove a stick in their eye then have to choose between those two options, but whether you like it or not, this is the decision that the business owner has to make.  

As you may have guessed, I mainly talk to the latter, business owners that chose to contact an attorney, and without exception the first question I will ask my client is whether there is a contract.  The answer to that question is determinative of the likelihood of being able to recover this debt for the business owner.   

If the answer is "yes, we have a contract signed by the service recipient and I will send it to you immediately", then I feel pretty good about the client's likelihood of recovery.  Conversely, if the client answers, "no, but...", then the client's prognosis for recovery has suffered a two-fold set back, first, it will be more difficult to prove the existence of a oral agreement to the satisfaction of a court and therefore, more attorney fees and second, and I may be generalizing here, but it has been my experience that if someone is unwilling to sign a contract for a service then they are equally unwilling to voluntarily pay for that service.

Tomorrow I will continue with part 2.