Shielding Companies From Frivolous Lawsuits In The Labor & Employment Arena

Editor: Please tell our readers about what factors in your background and experience have helped you to develop an interest in labor and employment law?

Estevez: My parents had a family-owned business. Because I worked part-time there since I was about 14, I learned to work with employees in the field and became aware of the various types of employment issues that arise, from compensation to disputes between employees. I really liked being able to understand and resolve the issues in a way that made good sense for the employees and the company.

Editor: Why did you choose Morgan Lewis as the firm in which you wished to apply your skills?

Estevez: I have been practicing labor and employment law since I graduated from law school. Initially I worked at a large regional boutique litigation firm. As I began to build a national employment practice by representing more companies in the Fortune 500, I decided to shoot for the stars and move to the best labor and employment law firm in the nation, where I would have the national platform I wanted and peers across the nation with deep substantive experience whom I could partner with to handle the most complex cases in America regardless of where the case is brought. And, now, I have all of that. My practice has grown from being primarily a Florida-based practice to being very national in scope, and my colleagues with whom I regularly work on class and complex litigation and matters sit all over the country, and in some instances, across continents.

Editor: I understand that you have done a great deal of work in the complex employment and accessibility area. Please give our readers a brief synopsis of the provisions of ADA Title III which deals with accessibility.

Estevez: As part of the complex employment litigation field, ADA Title III is another area in which I and others in our firm practice. Title III addresses accessibility to public accommodations, in other words, whether a public place is accessible to people who are blind, mobility impaired - in wheelchairs - or who are otherwise disabled. We have a team that handles these cases nationally for our clients and, as a result, we have handled the most cutting edge accessibility cases. For example, a few of my colleagues and I represented clients who had their Internet sites challenged as inaccessible to the blind. The plaintiffs argued that Title III required the website to be accessible to blind people so that they could use screen readers to read the website. Other cases we have handled have included multi-site Title III cases all over the nation, stadium cases, and Department of Justice investigations of schools, hospitals, stores, and outdoor sporting events. Fortunately because of our Title III team's experience and results, our clients have seen a decrease in the number of cases being brought against them.

Editor: I understand, too, that much of your work is done in the counseling arena in helping employers set the stage for favorable work environments. What are some of the "bullet points" you make when advising employers?

Estevez: In order to set up a work environment where employees are happy and employers can better protect themselves from liability under the labor and employment laws, employers periodically should conduct a full-scale employment audit of the workplace. In fact, because this started to become increasingly more important for employers in the wake of countless new multimillion dollar wage and hour and discrimination lawsuits, a few years ago we assembled highly specialized audit teams to audit every significant employment issue for small and large companies nationwide. Some of the things we audit include whether the hundreds or thousands of different types of employees are properly classified as exempt under state and federal law; whether the company is paying commissioned employees correctly under state and federal law; whether the company has the best policies and procedures in place to defend a gender, race, age or other discrimination claim or class action; whether the company has appropriate salary grades and levels; whether they have done and/or should do a compensation analysis to determine whether people are compensated at equal levels based on experience, seniority, and other important factors; whether they have taken the appropriate precautions for reductions in force during mergers and changes in businesses, and a multitude of union and benefit related issues.

While it sounds like a monumental undertaking, it is not difficult when it is done with a specialized team who has done this several times. Timing is always going to depend on the size of the company and the practices and procedures that are in place. Oftentimes the area of exempt classifications and pay issues are difficult to interpret. This is an area in which we give a great deal of counseling advice, and conduct specialized audits, for example, in California because that is where there has been the most substantial increase in the volume of cases being brought, even against very small companies. We have cases involving 100,000 class members and cases where there are less than 100. This shows that all companies should be looking at these issues.

The regular rate of pay is one of the areas in addition to employee classification that is showing up more and more in law suits. Regular rate of pay is generally an issue not because there is a problem for employers in understanding regular hourly rates of pay, but rather, because they do not understand how other monetary benefits fit in when it comes to overtime calculations. For example, if the pay structure is set up a certain way to include a fully discretionary bonus, it does not have to be included in calculating the regular rate of pay. On the other hand, if you pay a formulaic, non-discretionary bonus based on company profits, for example, it probably has to be included for purposes of determining the regular rate of pay when calculating overtime compensation.

Editor: I attended a meeting last week where several general counsel indicated their companies had reached a new plateau in the way in which they view the diversity landscape, i.e., they are no longer just looking at numbers. Have you seen any changes among your clients in the way in which diversity is being regarded today in contrast to five years ago?

Estevez: Without question companies are looking at diversity differently now. I know this for a fact because the volume of diversity training that companies are requesting from Morgan Lewis Resources, which is the training division of our labor and employment practice group, has substantially increased. Companies are also providing more training on avoiding sexual harassment and discrimination, union avoidance, OSHA issues, wage and hour issues, management and the law, and other similar employment related issues. With respect to diversity, it is important that people in a company, from the top executives down through the ranks, have a good understanding about what diversity means in terms of people, customers, the work environment, and their business. It all ties together. Adding people from different backgrounds and cultures makes for a better business environment. I think that we now have over 30 trainers we use all over the country through Morgan Lewis Resources to train employees in multiple different industries and even in different languages. A lot of our corporate clients are requesting diversity training tailored to their business. Their aim is to recruit the best and brightest while increasing the pool of qualified candidates for the jobs available. We are fortunate to represent several companies that understand the importance of these issues - they are leading by example.

Editor: Please describe the recent NY Court of Appeals finding in Rosenberg v. MetLife Inc. about which you have written an article recently.

Estevez: The Court essentially decided that a plaintiff could not bring a defamation claim based on a NASD Form U-5 filing in New York. Employers who are required to fill out the form when an employee leaves a financial services firm are given an absolute privilege - immunity - from liability. This is important, particularly for financial services firms where people move from firm to firm, and potential employers want to know the reasons why. This is so important for the public. Without having inhibitions about possible litigation, the public will be better protected. The court is saying that if a broker is let go for doing something dishonest, firms should be able to let others know that without being concerned that they will be sued for disclosing that information. The Rosenberg decision is an excellent decision that should be followed by other courts, not only in financial services industry cases, but also in other cases involving a regulated industry where disclosure is required, or where disclosure will better serve the public.

Editor: How does your fluency in Spanish provide additional benefits to your clients?

Estevez: Many of our clients are expanding their businesses to South America, Puerto Rico and Mexico. My Spanish enables me to communicate with the top level people in those countries, and in some instances, with employees domestically in, for example, cases involving an entire Hispanic workforce that does not speak English well.

Editor: What reform measures for the existing labor laws, such as the FLSA and the ADA, would you suggest that would benefit both employers and employees?

Estevez: One of the best things that could be done for employees and employers, and the court system, would be to provide an automatic exemption from overtime under the FLSA and state laws for highly compensated employees, such as ones that make over $150,000 or maybe $200,000 per year. Then, there would be no challenge or request that these employees lose their autonomy and independence by having to keep a precise schedule, and punch a clock or otherwise have their time tracked. The law was not intended to protect highly compensated individuals, particularly ones who are happy with the manner in which they are compensated. An employee making $200,000 a year should not have to punch a clock.

Title III of the ADA should be amended to have a 30-day pre-notice requirement and cure period. The practice of bringing hundreds of cases in a short time span, suing defendants regardless of the level of non-compliance or the companies' willingness to remedy any issue that exists, seems unfair and to be a waste of our judicial resources. That practice should stop. If, for example, a paper towel dispenser is two inches higher than required by the rules, that should not be the basis for a federal case, particularly where the company would fix it if it was pointed out. But, cases like that are brought far too often. If we had a pre-litigation notice requirement, it would give a company the opportunity to fix those things without having to engage in litigation. The fact that a suit can be brought on those grounds as opposed to notifying a company to correct the problem has the effect of clogging our dockets. With a pre-litigation notice requirement, companies would have at least a short window to fix any minor violations and avoid a federal case. With that, the real cases - those where there are significant barriers - would get the appropriate attention without any question regarding whether they fall into these minor violation cases.

Editor: What approaches should be taken at the highest levels of an organization to eliminate barriers to discrimination?

Estevez: Companies can best prevent litigation and discrimination claims by conducting audits and employee training as well as having a great legal and human resources team empowered to put the right processes, procedures, and policies in place. That, coupled with good training about diversity, discrimination, and any risks inherent in their business or industry, helps companies to prevent discrimination. Everyone in the company needs to figuratively step into the shoes of others in order to understand diversity and perception issues and to modify their own behavior in a way that helps to improve the overall atmosphere in the workplace.

Published May 1, 2007.