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New Laws on Harassment, Wage and Hour Violations

In my work with organizations I have two focus areas – Executive Coaching and HR Consulting. Keeping clients abreast of new and changing legislation in the dynamic world of California labor law falls into the HR Consulting bucket, but is also important for the executives I coach.

Here’s an update on some key legislation affecting employers in 2019.

New Restrictions on Sexual Harassment Settlement Agreements

Two recently enacted laws will make it more difficult for employers to resolve workplace sexual harassment and discrimination disputes.

The Code of Civil Procedure Section 1001 prohibits settlement agreements that bar the disclosure of facts related to claims filed for:

Sexual assault
Sexual harassment
Workplace harassment or discrimination based on sex
Failure to prevent harassment or discrimination based on sex
Retaliation against a person for reporting harassment or discrimination based on sex

The law allows the identity of the claimant, and any facts that could lead to the discovery of that identity, to remain confidential if requested by the claimant. Employers are still allowed to enter into settlement agreements that prohibit the disclosure of the settlement amount.

Another new law, SB 1300, amends California’s Fair Employment and Housing Act (FEHA) by placing additional limits on settlement agreements. Employers are now prohibited from requiring an employee, as a condition of employment or in exchange for a bonus or raise, to sign a non-disparagement agreement that prevents the employee from disclosing information about unlawful acts in the workplace. The law also adopts a lower standard for liability, as such:

A plaintiff does not need to prove that tangible productivity has declined as a result of the harassment.
A single incident of harassing behavior may be enough to create a hostile work environment. Proof of a pattern of harassing behavior in the past is no longer required.
Harassing behavior is not acceptable based on historical norms, or industry or company custom.

As an employer you should review your harassment policies to ensure that they align with the recent changes in law. Also, take complaints seriously! Remember to always investigate claims using qualified, impartial investigators, and take corrective action. Create a culture that makes it very clear to leaders and employees that harassment of any kind will not be tolerated.

California has expanded mandatory anti-harassment training to smaller employers

Employers with at least five employees must conduct mandatory sexual harassment training by the end of this year to comply with SB 1343, passed in 2018. SB 1343 requires that training of both supervisors and non-supervisors be completed by January 1, 2020. Training for supervisors must be at least two hours, and training for non-supervisors must be at least one hour. Training must be repeated at least every two years. Remember to keep records of training received by employees and supervisors.

Managers may be personally liable for wage and hour violations

According to a recent decision by a California appellate court (Atempa v. Pedrazzani), an owner, officer or managing agent of a corporate employer can be held personally liable for civil penalties for unpaid wages or overtime.

The plaintiff in this case worked at a restaurant owned by Pama, Inc. He sued the company for unpaid overtime, meal period and rest break violations. When Pama, Inc. filed for bankruptcy, the plaintiff successfully pursued recovery from the restaurant owner, Paolo Pedrazzani.

What this means for you as an employer is that you need to be sure that you and your managers consistently follow wage and hour rules. Even unintentionally failing to comply with the law can create personal liability.

Other legal decisions of note

Caldera v. Department of Corrections and Rehabilitation. The plaintiff in this case sued for harassment on the basis of disability after being taunted by his coworkers about his stuttering over a period of two years. The employer argued that the company had an informal, “joking” culture and that the behavior was not severe. The plaintiff won a $500,000 settlement.

This goes back to what I said earlier about creating a culture that is non-tolerant of harassment in any form. Again, the threshold for harassment has been lowered and a pattern of behavior is no longer necessary to prove harassment. If one of your employees is offended by harassing conduct you face potential liability even if the majority of employees are not bothered by the behavior. Again, take complaints seriously and investigate claims right away.

Hurley v. Department of Parks and Recreation. In this case a manager had disclosed private information about a subordinate to a non-manager, violating the plaintiff’s right to privacy. This decision points up the fact that managers should only disclose information about subordinates on a need-to-know basis and never to non-managers. The manager in this case maintained a “drop file” on the plaintiff, containing work performance as well as private information. Private information about employees should only be stored in files maintained by human resources with proper confidentiality protections.

Important updates on the use of arbitration agreements in CA

Epic Systems v. Lewis. In this case the U.S. Supreme Court ruled that the National Labor Relations Act (NLRA) does not prevent employers from making mandatory arbitration agreements a condition of employment, even with a provision waiving the employee’s right to a class action claim.

Along these same lines, two other opinions favored employers with regard to arbitration agreements.

In Sonic Calabasas Al, Inc. v. Moreno, the court ruled that an employer may require an employee to resolve wage disputes through binding arbitration. In Iskanian v. CLS Transportation Los Angeles, LLC, the court rule that an employer may require an employee to pursue claims as an individual and not as part of a class action suit. If you have not implemented mandatory arbitration agreements, I suggest you seek legal advice about the pros and cons of implementing an agreement for your organization.

If you would like more information about any of these legal updates and how they apply to your organization, please contact me for a consultation. Michelle@connecttohr.com.

For These Companies, Giving is a Year-Round Event

As I discussed in my last blog, consumers and job candidates are increasingly looking to do business with and/or work for companies that demonstrate they care about their communities. Do they give back? How do they treat their employees, customers, suppliers and partners? What are the company values and are they adhered to?

For many, these factors are key in their decision process. Companies that are socially responsible have a better public image – with consumers and in the media; have more engaged employees, are able to recruit higher quality talent; and are better able to attract and retain investors. In fact, 55% of consumers say they are willing to pay more for products from socially responsible companies. And, according to a study by Cone Communications, 62% of Millennials would be willing to take a pay cut to work for a socially responsible company.

Here are some examples of companies that practice giving and social responsibility year-round.

Kendra Scott. Kendra Scott grew her jewelry company from a $500 home project to a billion-dollar fashion brand, all the while keeping philanthropy as one of her core values. The company’s annual impact includes more than $4.5 million in monetary donations, $10 million in in-kind contributions, 2,000 employee volunteer hours and more than 10,000 philanthropic partnerships.

cuddle + kind. cuddle+ kind is a family-run business that sells handmade knitted dolls. For every doll sold, the company gives 10 meals to children in need. Not only that, each doll is handcrafted by women artisans in Peru, providing them with a sustainable, fair trade income.

TOMS Shoes. TOMS’ social responsibility model started with them giving a pair of shoes to someone in need for every pair of shoes sold. TOMS’ giveback model has since expanded to include coffee (providing water where needed), bags, eyewear and apparel. “With every product you purchase, TOMS will help a person in need. One for One®.”

Glassybaby. Glassbaby provides glassblower artisans the opportunity to continue their craft, and donates 10% of every glassbaby to the Glassbaby White Light Fund to help people, animals, and the planet. Glassbaby gives back almost $2 million annually. Glassbaby employs more than 80 glassblowers at their locations in Seattle and Berkeley.

As you think about your organization’s plans and strategies for next year, give some thought to how you can create and maintain a culture of giving.

“We make a living by what we get. We make a life by what we give.” – Winston Churchill

Creating a Culture of Giving and Kindness

This is the time of year when many organizations and their employees open their checkbooks and contribute their time to help those in need. There are multiple opportunities to volunteer and streamlined processes to donate during this traditional season of giving.

But here’s the thing: Need isn’t seasonal. It’s an equal opportunity to give, all 12 months of the year.

I’d like to suggest that instead of focusing all your organizational and employee giving efforts just in the months of November and December, you instead create a culture of giving all year round.

How do you do that? Here are some ideas.

At the beginning of the year, select a charity to support through donations and/or volunteering for the year; encourage employees to make individual donations to the charity selected
Ask employees to recommend charities to support and then select a different one each month or quarter to contribute to
Set a company fundraising goal for a particular cause and ask employees to help you reach it
Match employee individual donations
Give employees a set number of hours per year that they can use to volunteer
Have a team competition to see who can raise the most money for a cause or charity

Many people make their buying decisions and their job decisions based on a company’s reputation for giving back. This means that in addition to a giving culture helping those in need, it also provides many intrinsic benefits for your company and your employees.

Consumers want to buy from you
Job candidates want to work for you
Employees feel good working for a company that cares

Another thing about a giving culture is that giving is usually a demonstration of kindness. And it’s clear that in our current divided and often mean environment we can all use a lot more kindness. To those in need and among ourselves.

Leaders, it starts with you. Set the example by treating your individual employees, your team, your customers, your vendors, your job candidates, everyone, for that matter, with kindness. Lead with the question, “How can I help you?” instead of “How will this transaction help me?” Encourage employees to be proactive in helping each other and recognize those who consistently demonstrate that spirit.

Just think about it. Giving and kindness within the organization and giving and kindness to others. What a wonderful world it would be.

A Culture of Empathy Starts at the Top

Research shows that companies who demonstrate they care – about their employees, about their customers, about their community – significantly outperform their less-caring peers. People want to work there. Customers want to buy there. And they all want to tell their friends.

So what’s the magic formula? Building personal connections and developing strong and enduring relationships. When leaders connect with their employees by showing empathy, listening to them, recognizing the value they provide to the organization, and providing growth opportunities, those employees are more likely to care about their work, their customers and the business.

One example of a company that understands the importance of building connections is Zappos. They provide 24/7 customer service – by phone. Zappos encourages phone calls because they enable in-depth conversations with customers and a better opportunity to create personal connections. A June 2017 Forbes article described Zappos’ model this way: “When that one call comes in, Zappos will do anything to make sure it’s an engaging and personable experience for the customer, in the hope that a single great phone interaction will serve as a proxy in the customer’s mind for the overall personality of this company.”

Making personal connections and building relationships have traditionally been relegated to the “soft” side of business skills. But as described in a recent article in Chief Learning Officer Magazine, there’s “hard” science evidence indicating that “our brains are wired to be social” and that we can leverage that information to learn how to create personal connections and build lasting relationships.

According to the article, KPMG partnered with the head of the Wharton Neuroscience Initiative at the University of Pennsylvania to evaluate the strength of their relationships with clients and within the organization. One of the outcomes was “an instructional program on applying practical insights from neuroscience to build trusted relationships.”

Some of those insights were:

Initiating a relationship. The brain seeks social cues – “the real-time behaviors that display connection.” When you first meet someone, make eye contact. Smile, and pay close attention to them. Listen. “Failing to look and listen reduces information flow into the social brain, limiting the potential for building connections, establishing trust and working together.”

Engaging emotionally. Don’t jump into a business conversation. Engage in a conversation to get to know the other person better. Adapt your communication style to theirs – for example, if they’re soft spoken and you tend to be loud, lower you voice. Build rapport by finding things in common.

Engaging cognitively. This is where empathy plays a big part. Ask about and listen to their perspective. Try to see things from their vantage point. “Activating perspective-taking engages the social brain, which enhances your ability to develop understanding, and helps to achieve common goals.”

A culture that fosters strong, trusting relationships – both internally and externally – begins at the top.

As the old adage says, “If you take care of your people, your people will take care of the business.”

Improve Company Performance Through Diversity and Inclusion

There has been much discussion recently about the disparity in pay and opportunity for women and minorities across a variety of industries. And although Silicon Valley companies have created many initiatives over the years to close the gap, the gap in hi-tech remains. But here’s the thing. Those companies who have successfully increased diversity and inclusion – especially at the senior management level – are significantly outperforming those who haven’t.

According to a recent McKinsey & Company report, companies that ranked in the top quartile on executive-level gender diversity outperformed their less diverse peers by 21%. Companies with the most ethnically diverse executive teams outperformed their peers by 33%. Conversely, the report showed that the least diverse companies underperformed their industry peers by 29%. Clearly there’s a correlation between diversity and the bottom line.

In addition to improving financial performance, proactively creating a culture of diversity and inclusion improves employee engagement and helps attract new talent. Companies that embrace differences and provide opportunities for all are far more attractive and motivating workplaces. This is important for leaders to remember, especially now that we’re in an environment where there’s competition for talent.

Although the McKinsey report looked at diversity primarily through the lens of gender and ethnicity, I think it’s important to consider a broader definition. All too often leaders fall into the trap of hiring someone very much like them – similar personality, similar background, similar way of approaching a problem or decision. Yet there is so much to be learned and gained from building a team and organization that includes a variety of personalities, backgrounds, and approaches. When different viewpoints and approaches are brought to the table it spurs innovation, which contributes to the organization’s competitive edge.

Creating a culture of diversity and inclusion can also help attract customers. Today’s consumers have myriad choices, and many are looking to do business with companies that demonstrate they care by providing opportunities, development and advancement for all.

Next time we’ll talk about some things you can do to promote diversity and inclusion in your culture and hiring practices.

Let’s Normalize Kindness

It’s been so heartwarming to see the outpouring of kindness and generosity from neighbors near and far in the wake of the fire disasters in the North Bay. There’s something about disasters that makes people set aside their differences and come together in the spirit of compassion for their fellow human beings.

Why can’t we always be this way? How can we change the bad behavior that is increasingly becoming normalized in the workplace, and normalize kindness instead?

Leaders, it starts with you. Set the example by treating your individual employees, your team, your customers, your vendors, your job candidates, everyone, for that matter, with kindness. Express your feedback – even when negative – in a positive, constructive way. The command and control style of leadership, although we see it in the news every day, should be a thing of the past.

Remember that the number one reason employees leave is because of their boss. With an improved job market, good talent has plenty of options. Don’t lose that talent by normalizing bad behavior. Be kind.

Encourage your employees to be kind by rewarding people for helping others and demonstrating kindness. The seasoned employee who makes an extra effort to help a new employee feel welcome and get acclimated. The leader who inspires his/her team to volunteer for community service. The employee who goes above and beyond to help a customer have a good experience. The leader who consistently models positive behavior in word and deed.

Caution employees not to get caught up in the rumor mill, and to seek the truth, in person, before making assumptions about a situation. All too often conflicts get blown out of proportion because too many people are brought into the loop via emails that are over-copied and over-shared. Remember, emails are one-way communication and you have no control over where that email goes once you send it. Create an environment where employees know that the first step in a conflict is to try to resolve it face to face with the other person, and if that doesn’t work then to involve you, as their leader.

These sayings are old, but definitely apply today: “If you don’t have something nice to say, don’t say anything,” and, “Words, once they are printed have a life of their own.”

Let’s all try to be kinder, EVERY day.

“No act of kindness is ever wasted.” – Aesop

Corporate Social Responsibility: Do Better by Doing Good

American consumers, and increasingly, American workers, have many choices these days in terms of the companies they choose to buy from or work for. And many are making their buying and/or employment decisions based on a company’s social responsibility. How does it give back to the community? How does it support sustainability? How does it treat its employees, customers, suppliers, and partners? How does it rate in integrity, valuing diversity, and gender equality? What are the company values and are they adhered to?

These are all questions that ten years ago or so we may not have factored into our buying decisions. Or thought about when we were searching for our next job opportunity. But these are very important questions today. In fact, 55% of consumers say they are willing to pay more for products from socially responsible companies. And, according to a 2015 Cone Communications study, 62% of Millennials would be willing to take a pay cut to work for a socially responsible company.

Companies that are socially responsible have a better public image – with consumers and in the media; have more engaged employees, and are able to attract higher quality talent; and are better able to attract and retain investors.

Here are a few examples.

Starbucks. Starbuck’s social responsibility is based on: community, ethical sourcing and environment. They develop community stores that partner with local nonprofits. They’ve pledged to hire at least 10,000 veterans and military by 2018, and they focus on diversity and inclusion in the workplace. They are committed to ensuring that their coffee, tea, cocoa and manufactured goods are responsibly and ethically produced and purchased. They build LEED certified stores, recycle, conserve water and energy, and strive to be environmentally friendly in every aspect of their operations.

Companies that do good do better. According to the CECP 2016 report, Giving in Numbers, companies that increased total giving by at least 10% between 2013 and 2015 saw increases in revenue and pre-tax profit, as opposed to all other companies, which saw decreases in both metrics.

“Creating a strong business and building a better world are not conflicting goals – they are both essential ingredients for long-term success.” – William Clay Ford Jr.

Teaming Up for Those in Need

In the wake of the devastation caused by Hurricane Harvey and its aftermath, it has been so encouraging to see how people have put aside their differences – political, racial, ethnic, economic, etc. – to work together to help those who have lost so much – their homes, their belongings, and, in some cases, their loved ones. Times like these make us review our priorities, and, I hope, think about how we can help those in need.

Companies often do team fundraising or volunteer events as part of their year-end giving. I’d like to suggest that you consider moving that up this year, or even adding an additional event to help the victims of Hurricane Harvey. Here are some ideas:

Set a company fundraising goal and ask employees to help you reach it
Match employee individual donations
Have a team competition to see who can raise the most money
Do something fun as a group and ask each employee to contribute a certain amount for the fund

There are many organizations that have established funds to support the region affected by Hurricane Harvey. Here are a few of them:

Also, Silicon Valley Community Foundation (SVCF) and the City of San Jose have launched the Californians Helping Texans – Hurricane Harvey Relief Fund to accept tax-deductible donations to help Harvey victims. SVCF has also vetted a number of national and local organizations accepting funds, which are listed on their site.

“No act of kindness, however small, is ever wasted.” – Aesop

Nurturing Respect and Civility in the Workplace

As I discussed in my last blog, I’ve noticed an increase in complaints of bullying and harassment in the workplace, which I believe is reflective of the polarizing political atmosphere in this country. This bad behavior presents a challenge to leadership, and to HR professionals who have to deal with the complaints. It’s essential that everyone who is in charge of establishing and maintaining policies and Codes of Conduct ensure that those policies and Codes:

Clearly articulate expected behaviors and consequences for behaviors outside of those expectations
Extend the requirements to oral, written and physical behaviors including social media, emails, etc.
Are incorporated into new hire, supervisor/manager and leadership training
Are communicated and reinforced across the organization on a regular basis through a variety of media, e.g., all-hands meetings, company newsletters, company intranet and social media, etc.
Are considered in the performance management process

Here are some additional tips for nurturing and maintaining respect and civility in the workplace:

Walk the talk. Leaders at every level need to set an example of good behavior. When someone in authority bullies or harasses a subordinate or a peer it gives others the license to do so.

Coach positive behaviors. Identify and address conflicts that get out of hand by role modeling and coaching more positive ways to interact and resolve issues.

Be consistent. Managers do not get a pass because they’re overwhelmed or don’t know how to manage. Train them. And make the expected behaviors apply to everyone.

Reinforce the message. In California, employers with 50 or more employees are required to provide supervisors and managers with anti-harassment/anti-bullying training every two years. Even if your company isn’t in California, I highly recommend that even employers with fewer employees provide the training, and that the training be provided to all employees.

Create an inclusive work environment. Establish a culture where everyone is recognized and respected for their qualities, differences, ideas and contributions.

Reward those who live the values. Consider an awards program to recognize individuals and teams who demonstrate your organization’s values.

While setting the tone for respect and civility starts at the top, each individual employee also has a responsibility to role model good behaviors for their peers. As individuals, we need to demonstrate respect for ourselves and respect for others on a daily basis.

“Be the change you want to see in the world.” – Mahatma Gandhi

A Strong Culture is a Recipe for Success: Johnson & Johnson

A clearly defined, communicated and continually reinforced company culture improves productivity, promotes ethical behavior, and contributes to business success. Employees are more likely to be engaged and loyal when they work in an environment of strong ethics, mutual respect, and trust.

I experienced this firsthand at Johnson & Johnson, with the Johnson & Johnson Credo. The Credo is a set of guiding principles that provides a framework for employee behavior. When employees understand the corporate values and expected behaviors, they are empowered to do the right thing. If someone deviates from expected behaviors, the Credo can be used as a coaching tool to help that individual learn what is expected and why.

The Credo states Johnson & Johnson’s responsibility to their customers, their employees, their communities and their stockholders. It was crafted by a member of the founding family nearly 75 years ago, which was, as stated on their website, “long before anyone ever heard the term ‘corporate social responsibility.’ Our Credo is more than just a moral compass. We believe it’s a recipe for business success. The fact that Johnson & Johnson is one of only a handful of companies that have flourished through more than a century of change is proof of that.”

The Johnson & Johnson Credo is infused in every aspect of J&J life. Every new hire is given the history of the Credo and its importance to the company. It’s in the company’s reward systems. When the company I was working for was bought by J&J, we went through a 2-day mandatory Johnson & Johnson training to understand the values. When tough decisions were made, the VP of HR would take out a copy of the Credo to serve as a compass to make the right decision for all the parties involved.

The Johnson & Johnson example shows that it’s not enough just to establish “a great culture.” You have to ensure that the culture becomes a part of the hearts and minds of all employees – from executives to new hires.

If you need help establishing, communicating or reinforcing your company culture, please contact me.