The Google Memo – Is Misogyny Protected Activity?

Kelley Drye & Warren –
The blogs and networks have been buzzing over the past few days with news that a senior software engineer at Google – James Damore – had taken it upon himself to write and post on an internal Google mailing list a ten page memo, explaining his theory on why Google’s efforts to diversify its workforce were not working. In his words, Google’s “politically correct mononculture” had reached the point where efforts to create diversity by hiring and promoting more women (and other under-represented groups) was actually hurting the company.

Implicit in his criticism was what seemed like an undercurrent that men were somehow better suited than women for many tech jobs, and that Google was hiring or promoting women over men, even when the woman might not be the best person for the role.

In the course of this memo, Damore made a number of openly sexist and stereotypical comments about women, which many employees of both sexes took great offense to. Most disturbing was his core view, that the reason women did not succeed in tech jobs was “biological”.

For instance, he opined:

that women were more apt to have a stronger interest in “people rather than things” and that tech was an industry which focused on things

that women had a higher level of “agreeableness”, which is why they had a harder time negotiating salary

that women had “higher anxiety/lower stress tolerance”

Finally, he theorized that the reason there were not more women in leadership roles at tech companies was because they did not have the same “drive for status” or to succeed as men did.

Damore also was very critical and dismissive of Google’s diversity programs, training, and other company initiatives aimed at helping women and diverse employees advance.

The memo of course went viral, and was soon circulating outside of Google and all over the world.

Putting aside the fact that Damore’s views were perpetuating stereotypes and that any dialogue with a woman who has risen to a leadership role or managed large projects at work, while also managing a home and family will tell him – a woman’s ability to multi-task, handle stress, and desire for success knows no bounds. However, the immediate question that Google’s senior management had to confront was how to react to this memo.

Many employees, male and female, were greatly offended by the memo and felt that it did not accurately reflect the opinions and culture of most people at the company. More fundamentally, many felt that this memo was openly hostile to, and advanced stereotypical views of, women at Google. It also perpetuated the myths and challenges that tech companies like Google face, as they work on bringing more women into senior positions.

Moreover, as many who follow this area know, the Department of Labor is currently suing Google for salary discrimination, and there have been rumors of class actions looming against companies in this industry. See Anita Hill, Class Actions Could Fight Discrimination in Tech, THE NEW YORK TIMES (Aug. 8, 2017). Given this backdrop, the company needed a strong response.

It did not take long for Google to respond – CEO Sundar Pichai announced that Damore was being terminated. He explained that the idea that women were “less biologically suited” to work at Google was “contrary to our basic values and Code of Conduct”.

However, the drama has not ended, as Damore has filed a charge with the National Labor Relations Board and stated that he was “exploring all possible legal remedies” against Google.

What are Damore’s remedies and did Google do anything illegal?
I do not believe Google violated the law – A company has a right to take steps to prevent such openly destructive and offensive communications in its workplace.

First, terminating Damore was the right thing to do. If there is any debate about that, would anyone question the firing of an employee who sent out a memo saying that employees of one race were “biologically inferior” to those of another race? Is there any question that such a racist document would not be tolerated, and that author would be fired?

Second, the law recognizes that, while an employee has the right to speak out and protest, there are certain types of speech which the law does not protect.

What is the law?
This is not a free speech or First Amendment issue. Google is a private employer and there are generally no free speech rights within a private company.

Damore may claim that the memo was “protected concerted activity” under the National Labor Relations Act. The answer here is not 100% clear, but I think this would be a challenge for Damore. In an e-mail exchange with The New York Times, Damore stated “As far as I know, I have a legal right to express my concerns about the terms and conditions of my working environment and to bring up potentially illegal behavior, which is what my document does.” Given this statement, it appears Damore will argue that his memo is protected under the Act since it discusses terms and conditions of employment. However, in order to be protected Damore also has to be engaging in “concerted” activity or speaking out on behalf of or for a group of employees. A personal gripe, which his reference to “my concerns” indicates, may not be enough to support an NLRB charge.

While the NLRB is certainly a pro-employee agency and often takes an expansive view of what kind of speech is protected under the Act, it is not clear that Damore’s memo was raising any issues on behalf of a group of employees. If anything, he talks more about his opinion of certain programs – but does not identify any specific event or practice (like a salary program) that he believes is illegal. His primary criticism is that some of the programs were not good for the company, not that they violated the rights of certain employees.

Similarly, it is not clear that Damore’s memo was protected activity under Title VII of the Civil Rights Act.

Title VII prohibits retaliation against an employee for raising a legitimate concern about discrimination. But, the employee must make that complaint in a reasonable way. Title VII does not, in other words, protect all speech and does not protect racist or sexist speech.

The EEOC (the agency that enforces Title VII) has issued guidance concerning retaliation and what constitutes protected activity. Specifically, the EEOC has stated that an employee must oppose unlawful conduct in a reasonable manner in order for the opposition to be considered protected activity. If the employee doesn’t act in a reasonable manner, he or she may lose the protection of Title VII. While publicly disclosing a complaint is not per se unreasonable under the EEOC’s guidance, if the public disclosure is done “in so disruptive or excessive a manner as to be unreasonable,” then the employee may lose statutory protection.

Courts have utilized a long-standing balancing test to determine whether an employee’s manner of opposition is reasonable. In doing so, the courts balance the purpose of Title VII in protecting individual rights against the employer’s legitimate demands for loyalty, cooperation, and a productive work environment. By use of the balancing test, courts have held that when an employee makes frequent “spurious” discrimination complaints, those complaints are no longer reasonable and lose protection under Title VII’s anti-retaliation provisions. See Rollins v. Florida Dep’t of Law Enforcement, 868 F.2d 397, 399, 401 (11th Cir. 1989). Likewise, courts have refused protection for employees who make constant complaints of discriminatory practices when those complaints are made at inappropriate times and settings and the complaints damage team morale. See Hochstadt v. Worcester Foundation for Experimental Biology, 545 F.2d 222, 234 (1st Cir. 1976). It is also possible that Damore’s memo will not be considered protected activity if the act of drafting and disseminating the memo, along with the contents of the memo, violated a legitimate company rule, in this case Google’s Code of Conduct. See Unt v. Aerospace Corp., 765 F.2d 1440, 1446 (9th Cir. 1985).

If Damore proceeds with his charge at the NLRB, or also files with the EEOC, I believe that the company will be successful. As the CEO stated, while I am sure that Google values open communication among its employees, that does not give employees free rein to make offensive and discriminatory comments. If there is any doubt of that, ask yourself whether any company would tolerate a memo like that about Asian or black employees? Clearly the answer is no.

The bottom line is that, while Damore may have a right to have this opinion, he did not have the right to express his opinion the way he did, to the entire company, thereby denigrating and insulting half of the workforce.

I wish Google all the best in defending his charge.

7 Ways to Avoid Data Walking Out The Front Door When Employees Leave

Exterro – With all the news surrounding data breaches and information leaks, it’s easy to overlook the fact that the number one path sensitive/confidential information illegally enters the public domain is when employees leave their organization, according to Osterman Research’s, “Best Practices for Protecting Your Data When Employees Leave Your Company” (Dec. 2016).

In fact, 69% of organizations have experienced data loss from employee movements (departure, changing roles, re-location), and 50% of employees who left their jobs in the last 12 months kept confidential corporate data.

Here are seven security measures which can help you and your organization prevent data from walking out the front door.

Security Measure #1: Limit Access to Data

Even though employees may be inconvenienced by more stringent access to certain data repositories, limiting the number of repositories where data is stored streamlines the tracking of data when legal proceedings are at issue.

  • Understand Who has Access to What: Implement policies to track employee data and put procedures in place to create alerts when certain data may have been accessed inappropriately.
  • Consider VPN Policies: This technology empowers organizations to limit access to specific data repositories when employees are working remote, diminishing the risk that important data is not transferred to personal data sources.
  • Consult IT & End Users: Before limiting access to any data, have a frank conversation with business and IT leaders about the tradeoffs between security and efficiency. Depending on how organizations use data, limiting access to data may not be the best course of business.

Security Measure #2: Evaluate Over-Archiving Policies

There’s too much data within a business to ensure all of it is archived, which is why it’s important to evaluate data archiving policies to safely secure information.

  • Identify the Must Haves: Start by first asking these questions – Is the organization under regulatory requirements to store data? Are there document retention policies that enable the organization to know exactly the types of data will be archived? What technology is available to support these archiving activities? Once these questions are answered, then organizations can reasonably enforce their archiving policies.
  • Get Rid of the Junk: To streamline the process for identifying data, take measures to de-duplicate data within archives and repositories, only keeping one copy of a given document at a time.

Security Measure #3: Clearly Communicate Policies

Creating the right data management policies is only half the battle. Just as important, organizations must find ways to effectively communicate these policies to their employees or else risk data loss.

  • Understanding the Why: One of the primary reasons data is lost when employees leave is that employees don’t understand the importance of ensuring all corporate data is handed over, making it essential that employees are continually briefed on the importance of these data management policies.
  • Train Third Parties: Clear communication of policies extend to external entities (vendors, law firms, etc.) as well. Typically, during legal proceedings, third parties will need to access corporate data. Ensure your data management policies address third parties and how they access data, which may include training so third parties clearly understand them.

Security Measure #4: Leverage Technology to Track Employee Status Changes

Some companies track employee movements (i.e. departures, new hires, role changes) using manual processes (i.e. assigning individuals to review spreadsheets). But as with any manual process, human error is inevitable. Use technology to automate, cutting time, errors, and stress.

  • HR System Integration: Using technology which integrates with HR systems allows legal teams to track and monitor changes not only when somebody leaves the organization, but when they change departments, locations, or job titles. Based on these results, the appropriate actions regarding employee data can be taken.
  • Develop Customized Workflows: Look for technology that can automatically task employees to take a corrective action, which may include collecting data from a departing custodian data source, suspending document retention policies for a recently departed custodian under legal hold, etc.
  • Keep an Audit Trail: Ensure all actions taken with the technology are time-stamped and recorded, just in case this process is ever questioned by opposing counsel and/or the courts.

Security Measure #5: Utilize Robust Employee Agreements

It is vital that employees are aware of exactly what is at stake regarding their use of company data (both for the company and the individual), and avoiding boilerplate employment agreements is an effective way to ensure clarity.

  • Consider State Employment Laws: Non-compete, non-solicitation, nondisclosure agreements vary significantly between states. Some, like California, are much stricter on allowing companies to impose restrictions on employees, making it imperative to stay up on state employment laws. Include specific terms showing the scope and restrictions in the agreement are reasonable, which can help get a temporary restraining order or an injunction to protect corporate data.
  • Confirm Employees Understand this Agreement: From both a deterrent and legal remedy perspective, employees should sign employee agreements regarding data separate from other employee forms. HR should walk through the policies with them to certify their understanding, then memorialize it in the HR file, so it’s clear that this agreement is not just another signature on a page.

Security Measure #6: Implement Coordinated Security Measures

It’s important to balance physical security with network security, while keeping things convenient for users, yet effective.

  • Manage All Data Sources: Implementing strong passwords and using keycards to access company property is a no brainer. But remember to consider other less-obvious protection measures like locking down USB storage devices. Simply put, make sure all data sources are managed and under the purview of IT.
  • Use DLP Software to Monitor Data on the Cloud: Whether using managed cloud storage solutions, like Office 365 or box.com, or more standard platforms, like Dropbox or a personal Google Drive, data leak protection (DLP) software provides added security by alerting and logging when files are moved or accessed. This will limit the damage when employees attempt to remove secure data from the network (maybe by downloading it to a USB).

Security Measure #7: Conduct Exit Interviews

Exit interviews accomplish two aims: first, to determine if the employee might potentially go to work for a competitor; and second, it’s an opportunity to remind the employee of any policies or agreements, and certify that they understand their obligations when leaving the company.

  • Interviews Can Evaluate Risk Potential: The exit interview can be a good opportunity to learn if risk is heightened (e.g. an employee who might be disgruntled or going to work for a competitor). If that’s the case, the company may take steps, such as sending a letter to the new employer of this employee’s obligations. An exit interview can also provide evidence if the employee happens to lie about what he or she is going to do, and legal remedy is pursued.
  • Exit Interviews are Easy to Skip (So Don’t!): Often, the exit interview is a step that companies skip, but the interview can be valuable in determining if action needs to be taken, whether that means monitoring an employee’s computer or automatically preserving its data rather than immediately wiping it.

Conclusion:

We all lose things: keys, phones, remotes. And sometimes, when we can’t find them, there are consequences—some bigger than others. Corporate legal teams are no different when it comes to company data – except the stakes are much higher and the consequences are far reaching and costly. Following these best practices can go a long way toward keeping everything secure and safe.

Author – 

Jim Gill

Don’t go nuclear: get mediation

Don't Go Nuclear: Get Mediation

NZ – Dundas Street Employment Lawyers – 

I would pay good money to be a fly on the wall at a mediated meeting between US President Donald Trump and North Korean Leader Kim Young.

The Pope, when asked to comment on the situation, urged world leaders to seek a solution through diplomacy. He went further and suggested that a third party, such as Norway, should put themselves forward to mediate the dispute between North Korea and the US.

Norway is no stranger to this role, having successfully facilitated an agreement between Israel and the Palestinians in the early 1990s, known as the ‘Oslo Accords’.

Mediation is a process that is well established in employment law. In fact around 80% of disputes between employers and employees are resolved in mediation instead of being escalated to the Employment Relations Authority or Employment Court.

In its simplest sense, mediation involves an independent third party facilitating discussions between the two sides in a dispute and assisting them to reach a resolution themselves.

Most employment mediations are arranged through the Ministry of Business, Innovation and Employment (‘MBIE’) which offers a free mediation service. However, it is also possible to engage private mediators provided agreement can be reached on the rules that will govern the mediation process.

Mediations are confidential and without prejudice, meaning the discussions are off the record and cannot later be referred in the Court if efforts to resolve matters are unsuccessful. This means that  parties can make concessions and compromises at mediation without worrying that they will later come back to haunt them. This is often a big factor in helping get disputes settled.

In terms of how a mediation works, usually each side will open the mediation by setting out their respective views on the issue. The mediator will then facilitate discussions on firstly what has occurred, and then what it will take to resolve the issues that have arisen.

Record of Settlement

How the process works can vary depending on the mediator’s assessment of what will work best. In some situations the parties will remain in one room discussing matters face to face, and in others they will be put into separate rooms with the mediator facilitating the discussion by shuttling between them.

Where an agreement is reached at mediation, this is almost always set out in a Record of Settlement which, once certified by an MBIE mediator, is full and final. Any breaches of a Record of Settlement can be enforced in the Employment Relations Authority relatively efficiently and may result in the party who has breached the agreement being ordered to pay a penalty.

One of the biggest concerns that parties often have about doing a deal at mediation, is whether it will be kept confidential. Whilst settlement agreements nearly always include a term requiring confidentiality, there have been a number of instances where parties have breached this term. In such instances, there are enforcement procedures and potential damages that can be claimed against the party breaching confidentiality, and this is not something to be taken lightly.

Effective Process

By and large, mediation is generally a very effective process for resolving employment disputes. This is important as in many cases, the cost of preparing for and going to Court can easily outweigh the potential remedies that might be recovered by a successful grievant. And then there is the stress associated with having one’s employment relationship problem being aired in an open forum and becoming a matter of public record.

Employment disputes can also be resolved outside of mediation and this often happens through direct negotiations between the employer and employer, or their representatives. However, there are no shortage of situations where for a variety of reasons, the intervention of an independent mediator is the nudge needed to break down entrenched positions. This is especially so in situations where emotions run high and parties can struggle to see the wood from the trees.

In terms of the North Korean crisis, the stakes are obviously a lot higher, the personalities involved larger than life, and the issues entirely different to what we encounter in the workplace. There is clearly no simple fix.

The Pope’s suggestion of a mediation may unfortunately be wishful thinking, as it is difficult to imagine that the key players will be able to agree on the ground rules, let alone be capable of achieving a successful resolution.

Author – 

Susan Hornsby-Geluk is principal in Dundas Street Employment Lawyers, a leading New Zealand employment law firm.

What Sort of Justice Will Neil Gorsuch Be?

What Sort of Justice Will Neil Gorsuch Be?

Orrick –

After the Supreme Court sat with an empty seat for more than one year, and following a hard-fought nominations process which saw the failed nomination of Judge Merrick Garland and Republican lawmakers resorting to the “nuclear option,” the Senate confirmed Neil Gorsuch of the Tenth Circuit to be the next Supreme Court Justice.  His first day on the job was Monday, April 17th.

But for those who are not familiar with Judge Gorsuch, the question remains: what kind of Justice will he be?

Although Supreme Court Justices can—and sometimes famously do—change their judicial philosophies once they’ve joined the Court, commentators often look to a candidate’s judicial record as a way to divine how he or she may rule in future cases.

During Justice Gorsuch’s eleven year tenure on the Tenth Circuit, he penned 212 opinions and numerous dissents, ultimately emerging as a strict adherent to the principles of textualism and originalism.  In many cases, his judicial tendencies were displayed in his employment law decisions.

Gorsuch has shown reluctance in applying Chevron deference to agency action.  In TransAm Trucking v. Administrative Review Board, 833 F.3d 1206 (10th Cir. 2016), dissented from the majority’s ruling that a company violated the whistleblower provisions of the Surface Transportation Assistance Act (“STAA”) when it fired an employee who abandoned cargo after being pressured to work in unsafe conditions.

In his dissent, Gorsuch criticized the majority for applying Chevron deference to a loose DOL interpretation of the STAA, especially considering the agency never argued Chevron deference applied to its interpretation.  Gorsuch’s seeming disinclination to defer to agency interpretation could prove determinative if the Supreme Court decides whether the anti-retaliation provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act also apply to whistleblowers who claim retaliation after reporting internally, or whether those protections only apply once an individual reports directly to the SEC. Currently, the Second and Ninth Circuits have given deference to the SEC’s position that internal reporting is protected, while the Fifth Circuit has rejected the position.

In the discrimination context, Gorsuch issued several rulings in cases that were matters of first impression before the Tenth Circuit. In particular, he concluded in Almond v. Unified School Dist. No. 501, 665 F.3d 1174, 1175 (10th Cir. 2011) that the Lilly Ledbetter Fair Pay Act only applies to discrimination in compensation claims, not in cases “alleging discrimination in hiring, firing, demotions, transfers, or the like.”

He also wrote the Tenth Circuit’s opinion concluding that plaintiffs may not maintain an employment discrimination action under Title II of the ADA. See Elwell v. Okla. ex rel. Bd. of Regents of the Univ. of Okla., 693 F.3d 1303, 1305 (10th Cir. 2012).  During his tenure on the Tenth Circuit, Gorsuch has shown an open disdain for the McDonnell Douglas burden-shifting framework.  For instance, in Paup v. Gear Prods., 327 Fed. Appx. 100 (10th Cir. 2009) he accused the framework of “improperly diverting attention away from the real question posed by the ADEA — whether age discrimination actually took place — and substituting in its stead a proxy that only imperfectly tracks that inquiry.”

Most recently in Walton v. Powell, Gorsuch opined, “in the narrow remaining class of (summary judgment, circumstantial-proof) cases, it may be that McDonnell Douglas is properly used only when the plaintiff alleges a ‘single’ unlawful motive — and not ‘mixed motives’ — lurking behind an adverse employment decision.

A potentially crippling limitation given that Title VII’s statutory language doesn’t ever require plaintiffs to establish more than mixed motives to prevail. Indeed, given so many complications and qualifications like these, more than a few keen legal minds have questioned whether the McDonnell Douglas game is worth the candle even in the Title VII context.”  Although Gorsuch has not discussed how he would modify the McDonnell Douglas test, in his new role as Supreme Court justice, he might seek an opportunity to craft an alternative burden structure for discrimination claims.

Further, Gorsuch has shown a willingness to indulge trade secret holders a full range of remedies to enforce their rights. In one case interpreting the Utah Uniform Trade Secrets Act, Gorsuch rejected the notion a company needs to show an employee derived a commercial gain through misappropriated trade secrets in order to state a claim; instead, disclosure to a competitor was enough to show trade secrets theft regardless of the former employee’s motives.

See StorageCraft Technology Corp. v. Kirby, 744 F.3d 1183 (10th Circuit 2014).  In another Gorsuch opinion, he rejected the notion that trade secrets could be preempted by patent law, stating, “traditional trade secret claims can peacefully coexist with patent law.” Russo v. Ballard Medical Products, 550 F.3d 1004 (10th Circuit 2008).  While these cases fell under state trade secret laws, it remains to be seen whether Gorsuch would look to apply similar analysis to claims involving the federal Defend Trade Secrets Act (“DTSA”).  Indeed, the Supreme Court has not heard a case yet involving the DTSA, but issues have been percolating in the lower courts since the DTSA’s enactment.

Finally, Gorsuch’s prior opinions indicate he will likely continue the Supreme Court’s trend finding in favor of pre-emption under the Federal Arbitration Act (“FAA”). In one opinion reversing and remanding a trial court’s decision denying a defendant’s motion to compel arbitration, Gorsuch wrote, “Everyone knows the Federal Arbitration Act favors arbitrations . . . Parties should not have to endure years of waiting and exhaust legions of photocopiers in discovery and motions practice merely to learn where their dispute will be heard.  The Act requires courts process the venue question quickly so the parties can get on with the merits of their dispute in the right forum.” See Howard v. Ferrellgas Partners LLP, 748 F.3d 975 (10th Cir. 2014).

Similarly, Gorsuch dissented in Ragab v. Howard, 841 F.3d 1134 (10th Cir. 2016), where the majority of the three-judge panel upheld a district court’s denial of a motion to compel arbitration after it determined conflicting arbitration provisions in multiple agreements showed no meeting of the minds between the parties.

Gorsuch would have compelled arbitration, explaining “the federal policy favoring arbitration embodied in the FAA and armed with preemptive force” trumped a New Jersey doctrine that prohibited arbitration when multiple contracts contained conflicting terms.  Gorsuch may have an opportunity to directly apply this reasoning soon, especially considering the Supreme Court has agreed to hear several consolidated cases concerning the legality of class action waivers in arbitration clauses.

In February of last year, we noted, “With Justice Scalia’s passing, the Court lost a commanding and influential voice on a wide range of issues; employment law was no exception.  Only time will tell how the post-Scalia Court will interpret or modify the legacy he left.” Assuming Justice Gorsuch retains his judicial approach, it will re-create the 5-4 majority for the Court’s conservative wing and put an end to many of the 4-4 deadlocks that have occurred since Justice Scalia’s passing. If that is the case, it appears that Scalia’s legacy will remain intact for years to come as Justice Gorsuch fills his vacancy on the Court.

 

Bill O’Reilly’s Fox News Exit & The Bad News That Is Sexual Harassment

Bill O'Reilly and the Bad News That Is Sexual Harassment

Dundas Street Employment Lawyers – 

Fox News presenter, Bill O’Reilly was until recently the host of America’s highest rating cable news show. That didn’t stop the network from relieving him of his duties last week after it emerged that he had been the subject of multiple sexual harassment complaints.

The beginning of the end for O’Reilly came on 1 April when the New York Times reported that Fox News and its parent company, 21st Century Fox, had stood by him while entering into settlements with five women who had complained about O’Reilly subjecting them to sexual harassment and other inappropriate behaviours.

Apparently, the settlements were collectively worth $13 million.

This led to a public furore with widespread calls for O’Reilly to be dismissed, and many advertisers pulling their support from his news show.

Ultimately, the issue came to a head when Fox’s owners, the Murdoch family, reviewed the findings of an internal investigation that was carried out into O’Reilly’s behaviour.

Despite the seriousness of the issues that arose, O’Reilly has still walked away from the controversy with a pay-out reported to be worth around one year’s salary, which for him is the exorbitant sum of US$25 million (NZ$36 million).

Since O’Reilly’s sacking, multiple women who worked with him have publicly commented on his behaviour and the impact it had on them. One former Fox contributor, Margaret Hoover has alleged that she avoided being left alone with O’Reilly.

Another contributor claimed that when she raised issues about O’Reilly with the network, she was told simply to accept that O’Reilly was a relic of the old-school workplace.

In New Zealand, sexual harassment includes situations where someone asks another person for sex, sexual contact or some other sexual activity with a promise of better treatment or a threat of worse treatment. Notably, a threat or promise can be implied, and therefore does not necessarily need to be explicit.

Sexual harassment also includes the use of sexual language, visual materials or physical behaviour which is unwelcome or offensive and which is either repeated or of such a significant nature that it has a detrimental impact on the recipient.

Behaviour of the nature O’Reilly reportedly engaged in clearly crosses the threshold into sexual harassment that would usually warrant summary dismissal.

There are however plenty of scenarios where whether something amounts to sexual harassment will be less clear cut. An obvious example is where two employees engage in a personal relationship. This is not in itself sexual harassment provided the relationship is consensual.

But what happens if the relationship is between a superior and a subordinate? Again if the relationship is consensual, it won’t necessarily be sexual harassment. However, given that sexual harassment can include implied threats of adverse treatment, there is always the risk that the more junior employee only went along with the relationship out of fear of adverse consequences should they say no.

The work environment is also directly relevant, so conduct that may be sexual harassment in one workplace might not be in another. Having said this, just because sexual language might be more routinely used in some environments does not necessarily make it acceptable. Where the line is drawn is demonstrated in a Human Rights Review Tribunal case concerning a sex worker employed by a brothel.

In that case, the employee claimed she was subjected to sexual harassment which took the form of highly personal questions from the brothel manager about her sexual practices. The Tribunal accepted the employee had been subjected to the questioning and held that even in a brothel, language that is sexual in nature will be inappropriate if used in a suggestive, oppressive or abusive context. The employee was therefore successful and was awarded $25,000 compensation.

While that is a relatively high compensation award by New Zealand standards, it doesn’t even register with the payout O’Reilly received, which is both ironic and unjust.

However, Fox News needs to shoulder its share of the blame given its failure to do anything about the issue until it became front page news. Clearly, in settling five sexual harassment complaints and reportedly brushing off a complaint on the basis that O’Reilly was a relic, it failed to take appropriate steps to stamp out O’Reilly’s behaviour and in many ways, enabled it.

Ultimately, it is employers that need to take the lead in ensuring sexual harassment is not tolerated in the workplace and in this regard, Fox well and truly fell short of the mark.

The Contingent Workforce: What happens when a job for life becomes a job for a day?

The Contingent Workforce: When a Job for Life Becomes a Job for the Day

EY.com –

For decades, businesses have relied on the contingent workforce to backfill labor gaps, access specialist skills and meet short-term labor shortages. Until recently, however, it has operated as an adjunct to the traditional full-time workforce.

In the EY Contingent Workforce Study survey, US employers reported that contingent workers comprise, on average, 17% of their total workforce.1 This is consistent with various other estimates that place current proportions of contingent workers in the US workforce at anywhere from 16% to 40%.

Although the definition of the contingent workforce, or gig economy, varies considerably, we can all agree that this is a substantial number — and that it’s growing fast. Research undertaken by Lawrence F. Katz of Harvard University and Alan B. Krueger of Princeton University indicates that, over the last 10 years, the number of workers employed in alternative work arrangements in the US has increased by more than 66%.2

The world is entering the fourth industrial revolution, a period of innovation and disruption that is upending business models and requiring organizations to rethink their workforce needs. In this context, the contingent workforce is expected to continue to emerge from the shadows and play a far more prominent role in the total workforce composition — turning many jobs for life into jobs for a day.

In doing so, it is important for both employers and workers to understand the implications — and to dispel the myths that could be stigmatizing the role that the contingent workforce can and will play in the future of business.

Five employer myths about the contingent workforce

1. It is just another workforce fad

The nature of when, how and where we work is constantly evolving. Nine-to-five jobs and 40-hour weeks have given way to roles based on utilization and productivity. Cubicle farms have morphed into open-concept work environments and then, more recently, into mobile offices where workers can work from anywhere, anytime. Now, full-time employment is giving way to jobs on demand.

EY recently surveyed both major employers and contingent workers in the US on the topic of the contingent workforce, where 50 percent of organizations reported an increase in their use of gig workers over the last five years.

This is consistent with other research that suggests that the contingent workforce could grow to be as much as 50% of the entire workforce by 2020.3

Although there are many reasons why the size and use of the contingent workforce is on the rise, there are two that stand out: the global recession and rapid advances in technology. The 2008 global financial crisis, which spawned the worst economic downturn globally since the Great Depression of the 1930s, set in motion a wave of organizational cost-cutting to address revenue shortfalls and eroding margins. Among the largest casualties of these cost-cutting measures were workers.

Between December 2007 and early 2010, the US shed approximately 8.7 million jobs.4 The US economy began creating jobs again in 2010. However, these new jobs often required skills that laid-off workers did not have.

This is, in large part, because rapid advances in new technology, when combined with migration of manufacturing and production to lower cost jurisdictions, made obsolete the more traditional manufacturing and other unskilled labor jobs upon which middle-class America had relied for decades. At the same time, technology has provided the tools for employers to reimagine their business models, creating something like the “digitization” of work.

In recent years, advances in automation, robotics, machine learning and artificial intelligence have, in some cases, made humans themselves obsolete. Organizations that are hiring want specialized skill sets to manage these new technologies. They are also breaking full-time roles into discrete tasks that they are increasingly looking for contingent workers to complete. The result is that as many as 47% of the total US employment is at high risk of being automated over the next decade or two.5

These trends and others mean that more than being a passing fad, the rise of the contingent workforce, and the disruption it represents, is here to stay.

2. The contingent workforce is evolving at the same pace around the world

The contingent workforce is not evolving at the same pace everywhere. Some countries are embracing it more rapidly and comprehensively than others.

In the EY US Contingent Workforce Study survey, US employers reported that their contingent workforce comprises, on average, 17% of their organization. In the UK, the number of self-employed workers has grown 28% over the 10 years to 2016, against only 6% growth in UK employees in the same time period.  There are similar stories of rapid growth in the self-employed workforce in the Netherlands, Belgium, France and even Australia. The rise of the gig economy is increasingly a global phenomenon.

However, the contingent workforce is not evolving at the same pace everywhere. Some countries are embracing it more rapidly and comprehensively than others.

According to the 2016 Contingent Workforce Index, New Zealand ranks the highest for contingent workforce engagement globally. Singapore, the Philippines, Israel and India follow closely behind.6The US dropped in ranking from second in 2015 to sixth in 2016 largely because of higher labor costs.7

However, availability of workers in both the US and Canada (ranked seventh globally) is significantly higher than the majority of other countries, particularly in the Americas. In Europe, Middle East and Africa, the UK’s and Ireland’s talent pools and relatively moderate regulatory requirements make them among the most attractive options behind Israel for organizations looking for contingent workers.8

How the rise of the contingent workforce will progress country by country will depend largely on how governments, organizations and regulators balance availability and cost-efficiency with legislation and regulations to create a win-win work environment for employers and workers, while also considering the tax and legal implications associated with alternative work arrangements.

3. Organizations hire contingent workers solely to avoid payroll taxes and benefits

Increasingly, organizations appear to be hiring contingent workers as a means to achieve cost efficiencies. In the EY US Contingent Workforce Study, 55% of employers we surveyed say that the main reason for using contingent workers is to avoid labor costs.

However, for roughly the same percentage of survey respondents (56%), the primary reason for hiring contingent workers is to complete projects requiring specific expertise beyond their existing workforce. For 42%, it’s to respond to seasonal workforce requirements. And for 16% it’s to improve the existing workforce culture and productivity. Ultimately, employers hire workers for a number of reasons other than to solely avoid payroll taxes and benefits.

Obviously, there are benefits to paying for talent on an as-needed basis. But there are also tax- and classification-related risks that organizations need to be mindful of.

Typically, organizations in the US don’t have to pay employment taxes on a 1099-classifiedicontingent worker. However, if a local, state or federal government, or IRS (US Internal Revenue Service) determines that the contingent worker is, in fact, a full-time employee, the financial risks can be substantial. In January 2016, three subsidiaries of a global supply chain company were sued in California for misclassifying drivers as contractors. In May 2016, a class-action lawsuit was filed on behalf of the drivers of a ride sharing company in Florida and Illinois to reclassify them as employees in order to recover tips.

Similarly, in November 2015, drivers of a ride sharing company in the UK filed an employee misclassification claim that seeks to change their status so that they are employees of the company. More recently, in February 2016, UK drivers of a transportation company sued the company for workers’ rights and compensation for lost earnings. The previous year, in July 2015, a cleaning services company was forced to shut down its operations amid a lawsuit over worker misclassification.

Red flags that the government or the IRS will look for in determining whether an individual is a contingent worker or a full-time employee may include: how the contingent worker is paid; what levels of access the worker has to internal systems; how the worker is embedded into a team; and whether the worker is enrolled in any reward and recognition programs.

Although avoiding payroll taxes and benefits may be a by-product of hiring contingent workers, it is rarely an organization’s sole strategic driver for using the contingent workforce — nor should it be.


i As defined by the US Inland Revenue Service, a 1099 job is a job that is performed by a self-employed contractor or business owner as opposed to one of your employees.

56% of employers surveyed use contingent workers to complete projects requiring specific expertise / capability beyond their existing workforce.

 

4. Contingent workers compromise the cultural fabric of an organization

In the EY US Contingent Workforce Study, employers raised a concern relating to the impact of contingent workers on the culture of the existing workforce. One in five employer survey respondents indicate that they see a negative impact of contingent workers on the culture of the existing workforce. Respondents also raised questions over whether using contingent workers impedes the skills development of the existing workforce, with 37% suggesting it does.

On the flip side, however, almost one-third of respondents see contingent workers as having a positive impact on their full-time employees. Half of respondents suggest that using contingent workers can be a good way to overcome resistance to change within a legacy workforce; 43% say that existing workforces benefit from skills transfer from contingent workers; and 36% acknowledge that contingent workers are the workforce of the future. In addition, 16% say their main reason for using contingent workers is, in fact, to improve the existing workforce culture and productivity.

Although 37% of organizations say they lack the confidence in their ability to address the impact of contingent workers on organizational culture, they need to try, particularly as the benefits and opportunities that contingent workers offer to the full-time workforce often will outweigh the risks of compromising the existing culture.

5. Regulations will kill the contingent workforce

According to the EY US Contingent Workforce Study, 44% of organizations expect more regulation in relation to contingent workers. However, it is not so much an increase in regulations that could impede the growth of the contingent workforce, but organizations’ ability to implement policies and procedures to remain compliant.

Currently, many human resource departments have a poor grasp of the issues and risks relating to the contingent workforce. As a result, they have not yet implemented the programs and policies necessary to adhere to even existing, let alone new, workforce regulations.

Awareness of the risks is key not only to address compliance issues and avoid unexpected liabilities and costs, but also to facilitate the growth of a workforce demographic that organizations arguably see as the workforce of the future.

The reality is that the contingent workforce has to work for everyone

Disruption is fundamentally altering how the world works. As shifting demographics, consumer demands and disruptive technologies continue to alter the business landscape, organizations have to shift their legacy workforce model to one that equitably balances traditional permanent employees with contingent workers, innovation and automation with human interaction and collaboration, and efficiency with fairness.

Organizations cannot choose one at the expense of the other, without both raising the specter of regulatory intervention and economic collapse.

The future of work includes a contingent workforce. It is time to dispel the myths that it raises and focus on how to make the proliferation of contingent work a win-win for everyone.

1 Is the gig economy a fleeting fad, or an enduring legacy?, EY, 2016.

2 Lawrence F. Katz and Alan B. Krueger, The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015, 29 March 2016. (Note: the contingent workforce is taken to be equivalent to employees in alternative employment arrangements.)

3 Ardent Partners, The State of Contingent Workforce Management 2015-2016, 2015, © 2015 Ardent Partners Ltd.

4 “Chart Book: The Legacy of the Great Recession,” Center on Budget and Policy Priorities, http://www.cbpp.org/research/economy/chart-book-the-legacy-of-the-great-recession, 8 November 2016.

5 Carl Benedikt Frey and Michael A. Osborne, The Future of Employment: How Susceptible Are Jobs to Computerisation?, 17 September 2013. Accessed at http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf.

6 Contingent Workforce Index 2016 Global Analysis, ManpowerGroup ©2016.

7 Ibid.

8 Ibid.