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Congratulations to Don Swift, a partner in our litigation department, for being named to the 26th Class of Leadership Gwinnett!

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If the first purpose of an Employee Handbook is to reduce risk by taking advantage of the legal safeguards afforded to employers by law, the second is to make sure that one that the employer minimizes its legal obligations through well-drafted employment policies.

The FMLA

Companies with more than fifty employees are subject to the Family Medical Leave Act (FMLA), and it is essential to make sure that FMLA obligations are understood, and minimized to the extent permissible by law. A properly written policy allows for FMLA leave to run concurrently with paid leave, so that an employer is not required to provide vacation or sick leave, or PTO, in addition to the twelve or twenty-four weeks of unpaid leave which are required by the FMLA. Likewise, the FMLA allows employers to choose how the twelve-month FMLA entitlement period is calculated (a failure to make this election in a written policy means that the Employer will be stuck with a very burdensome default calculation method).

Some Other Illustrations

An Employee Handbook can be used to make the best out of the legal obligations imposed on your company in many other circumstances. Here is a random sampling of policies which we advise employers to include in their Handbooks. Without these written policies, you will experience at least one of two things, at some point: you may have to pay unemployment compensation to an employee who has been terminated for cause, or you will be legally required to accommodate employee demands that you could have avoided.

– Employee requests for religious accommodations may have to be met, but not all last-minute or unreasonable requests have to be honored – your policy should minimize the burden of Title VII of the Civil Rights Act on your business;

– Have an exacting absenteeism policy, while complying with the FMLA, the Americans with Disability Act, the FLSA or any other law (there’s nothing worse than being taken advantage of by an employee who won’t show up to work);

– Make it clear that certain behaviors may result in termination (being clear that terminations will always comply with the law) – this will minimize your liability for payment of unemployment compensation;

– make it clear to employees that disparagement of the company, or interference with its good reputation, via a social networking site, is not acceptable;

– include a policy which requires employees to consent to any (legal) deductions from their paychecks which you may need to make;

– include a substance abuse and testing policy which meets the standards required of Georgia’s Certified Drug-Free Workplace program, which allows you a discount on your workers’ compensation premiums;

– make it clear to all employees that they are responsible for recording their work time, and that they are prohibited from working unrecorded and/or unauthorized overtime.

– make sure that your written policies describe an employee’s entitlement to payment of sales commission following termination. This is a contentious and legally gray area, and many arguments can be avoided with a policy which has been written or reviewed by a lawyer.

Take-Away: An employee handbook requires a relatively small investment of time and money at the outset, but it is almost guaranteed to pay for itself in saved productivity, legal defense expenses, and unemployment benefits.

Next and final installment of this article: Some final thoughts on Employee Handbooks

By: Eadaoin Waller, a senior associate in our Corporate Department

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As reported on Foxsports.com and in the Atlanta Journal Constitution, due to a plea deal negotiated by Pat McDonough, Falcons defensive tackle Jonathan Babineaux will avoid jail time in a drug related case.

Related Articles

• Falcons DT Babineaux receives probation in drug possession case (nfl.com)
• Babineaux gets probabtion for pot charge (ballhype.com)

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There are a lot of good reasons given to small businesses for adopting an Employee Handbook. Unfortunately, most of the reasons given fall into the “non-urgent” or “unnecessary expense” category. For instance, an Employee Handbook will inform your employees of their obligations so that you and your supervisors don’t have to make policy decisions on the fly (a phonecall to a supervisor is necessary in the event of an unplanned absence – a text message sent from an unknown destination will not do; track suits and flip-flops will not cut it on Casual Fridays; customer phonecalls must be returned within two hours, and so on). A Handbook will apprise employees of the extent of their rights in the workplace (family medical leave may be unpaid; your employment may be terminated at will and for no reason; there is no right to be paid for accrued vacation upon termination of employment). But, you reason, these are issues that can be dealt with as we go, as the need arises. Why the need to write everything down in painstaking detail?

Leaving aside all of the other practical reasons, there are two distinct legal reasons (and countless practical ones) which make an Employee Handbook a necessity for all businesses (apart, perhaps, from those with under five employees). This article will deal with the first of those, and we will post two more articles, in the coming weeks, which discuss the others, and offer some thoughts on implementing and enforcing an Employee Handbook.

Using the Affirmative Defenses that the Law Gave You

The first and greatest advantage of having a well-written employee handbook (at least, from a lawyer’s perspective) is quantifiable risk elimination. Certain affirmative defenses against employment claims exist for employers who have good written employment policies in place. All employers should take advantage of these defenses by making a small investment in an Employee Handbook, prepared by a labor and employment attorney.

An Example – the Fair Labor Standards Act

One prevalent and damaging type of employment liability is that of wage and hour claims arising from the Fair Labor Standards Act (FLSA), the law governing underpayment or miscalculation of overtime, minimum wage, or unlawful deductions from pay. The FLSA contains a “safe harbor” provision, however, which protects employers against liability for certain incidents of improper deductions so long as the employer: (1) has a clearly communicated policy prohibiting improper deductions, which includes a complaint mechanism; (2) reimburses employees for any improper deductions; and (3) makes a good faith commitment to comply in the future. The Federal Department of Labor recommends that this “improper deductions” policy be included in a written handbook, given to each employee upon hiring. With violations of the FLSA creating indescribable burdens, both in terms of time spent on audits, harsh penalties and liability for up to three years of back-pay, the advice of the DOL in this regard should be heeded.

And Another – Sexual Harassment

Similarly, the law on sexual harassment in the workplace has created a safety valve for employers, who are exposed to vicarious liability for the harassment of one employee by another, under Title VII of the Civil Rights Act. If the employer has a written harassment policy in place, giving victims of harassment a procedure for filing a complaint and a choice of managers to whom complaints may be addressed, the employer will have an affirmative defense against claims of sexual harassment if the employee fails to follow the complaint procedure. While not an absolute safeguard, this is a substantial and necessary defense against such claims.

Other Ways in Which Your Handbook Can Come to Your Defense

The presence of certain employment policies in your handbook can make it clear that certain activities are unauthorized in the course of work, and as such, the employer is not responsible or vicariously liable for actions of an employee which are prohibited by the handbook. For example, if an employer were to be sued for copyright violations as a result of internet downloads, it would be helpful to be able to show that employees were under strict instructions not to use the internet for personal reasons. If an employee causes a car accident while driving a company vehicle, because she was talking on the phone, the employer would certainly want to show that the employee was on strict orders to pull in before taking a call. If an employee assaults another employee at work, the employer will need to demonstrate that it had policies and procedures in place for dealing with interpersonal problems and preventing violence at work. And on, and on.

Take-aways:

• There are affirmative defenses against very damaging claims which your employees may make against you.

• Your Handbook can be used to anticipate and deflect liabilities created by your employees – auto accidents, workplace violence, intellectual property infringement, safety violations, etc.

• Take advantage of simple risk-reduction measures by investing in a well-drafted employee manual.

• Use a Labor and Employment Attorney in the State where your business is located. Employment law varies wildly from State to State. Using a form from the internet, or from a national payroll provider, is probably a false economy.

Next installment of this article: Using Your Handbook to Make the Most of the Statutory Burdens On Your Business

By: Eadaoin Waller, a senior associate in our Corporate Department

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Congratulations to our own Thomas J. Andersen, as he was recently selected by his peers for inclusion in The Best Lawyers in America® 2010 in the field of real estate law (Copyright 2009 by Woodward/White, Inc., of Aiken, S.C.).

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Check out the Construction Law Musings blog for “HOAs Go Green with a Bit of Kicking and Screaming” by J. Roger Wood for a quick shout out to our own Amy Bray (also known as @GeorgiaHOALaw on Twitter).

Thanks Roger and Christopher!

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We hope you all have a safe and happy 4th of July!

We will be closed on Monday, July 5th to celebrate our country, our freedoms, and those who keep our freedoms safe!

For your convenience, please use the links below to find celebrations in our area:

City of Auburn fireworks & celebration

City of Duluth

Mall of Georgia

Stone Mountain

Around Atlanta

**NOTE** Gwinnett County cancelled its fireworks.

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It sounds easy. Your homeowners’ association or condominium association wants to change something in the Declaration that governs your community, you hold a vote, and presto-change-o it’s done!

Unfortunately, that’s not exactly how it normally happens.

Let’s rewind the film for a moment and talk about both legal and practical steps to help successfully accomplish an amendment to the governing documents for your community.

First, check the document you want to change. What are the amendment requirements? Break those requirements down into specific steps and start to think about how long it is will reasonably take to accomplish that step.

Second, make sure that you next check your by-laws to make sure you have a strong handle on the requirements for notices, calling meetings, quorum requirements, proxies, and more. These requirements matter, as a current case that is on appeal to the Georgia Court of Appeals shows. (The arguments turn on the content of the ballots and the decision will determine if the amendment stands.)

This step raises a lot of administrative questions. For example, do you have a handle on who is currently eligible to vote on association matters? Do your documents automatically suspend member votes due to non-payment or do you have to take steps to suspend them? Does the amendment language deal with “total association vote” or “members present at the meeting” or “members eligible to vote”?

I’m sure you have noticed by now, we have not even gotten to the substance of the amendment! That’s next on the list of things to consider before you even start to set up your vote.

What are you trying to change? Why are you making the change and what benefit does it give to the neighborhood? Is the effort to change worth the realistic, anticipated benefit? Do you know exactly how you want it worded?

Third, this is also the time to contact an attorney to help with drafting the amendment. I realize that you may read this as a shameless plug, but all too often I have had to try to fix something about an amendment that was not properly adopted, included language that had a different legal effect than was intended, or just was not worded in a way that had the intended effect. Those fixes can be far more expensive, if they can be accomplished at all, than hiring an attorney at the front end of the process.

Some of the value of the attorney writing the amendment is based on their experience with this type of situation, not just the law. It is important to know if the law draws boundaries that prevent what the association wants to do or affects the way it does it. (The case of Walker v. Charter Club on the River, as discussed on this blog in the past here and here, is an example. Only a handful of people, mostly attorneys that deal with community association issues, are aware of this case and the effect that it has on amendments that may be adopted by homeowners associations in Georgia.)

If an attorney is just writing up the amendment, they can probably give you a flat fee quote for the work which will help you budget for the expense.

Fourth, start to communicate the desired change to the neighborhood. Depending upon the nature of the amendment, I often advise clients to form an amendment advisory committee to help with this aspect of the amendment. This group of members will both gather information on what the neighborhood actually wants and distribute information on the desired change. At this point, it can be helpful to make use of newsletters, websites, message boards, surveys, and “town hall meetings” to spread the word about the desired amendment and to make sure that enough people are invested in the change for it to will pass!

This process can also help identify people who really do not want the amendment to pass. Listen to them and find out why they do not want it. In some cases, their concerns can actually be addressed in the way the amendment is drafted.

This part of the process also has the potential to save effort and time, by giving the board of the association insight into what people really want. In associations, apathy is often supreme. Sometimes it causes a breakdown in communication between board members and the rest of the association membership. Board members see the problems in the community from a very different perspective and they also see the solutions differently. For an amendment to pass, the board and the rest of the membership need to be on the same page about what needs to happen.

Once you know exactly what you want the amendment to say and you have a handle on the process to adopt it, draw up a plan and timeline for adopting the amendment. Do not just wing it and react as you go! Plot it out on a calendar and add in the tasks that go with each milestone.

By: Amy H. Bray, a partner in our Commercial Real Estate Department

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On June 18 of this year, the Georgia Court of Appeals ruled on the case of Bailey v. Stonecrest Condominium Association, Inc., 2010 WL 2472501 (Ga.App.). This case arises out of the attempted adoption of a leasing restriction in a condominium and problems arising out of the reasons for which it was adopted. At its core, the case turns on the question of whether the leasing restriction was adopted to allow the exclusion of African Americans from residency at the condominium as tenants.

A unit owner from the Stonecrest Condominium (“Bailey”) filed suit against Stonecrest Condominium Association, Inc. (the “Association”) and the members of the Association board, for compensatory damages, punitive damages, and attorney fees, based upon the claim that the Association adopted amendments restricting leasing of units constituted racial discrimination in violation of the Fair Housing Act (FHA). Bailey further alleged that the board breached its fiduciary duties in proposing those amendments. The trial court granted the Association’s motion for summary judgment and Bailey appealed. The Court of Appeals vacated the summary judgment and the case has been remanded to the lower court for hearing.

The Court of Appeals held that: (1) Bailey failed to present direct evidence of intentional racial discrimination; (2) Bailey’s circumstantial evidence established a prima facie case of racial discrimination; (3) nondiscriminatory reasons proffered by board for adopting amendments satisfied board’s burden of production under McDonnell Douglas framework; (4) a factual issue remained as to whether board’s non-discriminatory reasons were pretext for unlawful discrimination; and (5) factual issues remained as to whether boards’ decision to adopt amendments was arbitrary and capricious, precluding summary judgment in action for breach of fiduciary duty.

An Association board member allegedly made comments to Bailey that the amendments were proposed because Bailey leased her unit to an African-American tenant. Another unit owner also allegedly made racial epithets and other racially discriminatory comments before and during the Association’s annual meeting, including stating that she did not want minorities living at the condominium. However, the Association presented evidence that it had (facially) non-discriminatory reasons for adopting the amendment that passed the current legal standards for evaluating such purposes.

While the Court determined that these comments were not direct evidence of intentional racial discrimination by the Association, they did determine that there were genuine issues of material fact as to whether the non-discriminatory reasons for the Association’s passage of the amendments were a pretext for unlawful discrimination. Because these issues remained, permitting the summary judgment to stand would be improper, as these issues need to be heard and determined in court.

What does this mean for condominium associations? It merely means that even in condominiums, care should be taken in the process of deciding to adopt amendments, having a proper/lawful purpose for adopting those amendments, and documents those reasons. It also means that Association board members need to be aware that anti-discrimination laws do apply to their actions and that they need to consider those laws in fulfilling their service on the Association’s board. Of course, it also helps to get guidance from a community association attorney when issues arise and before an amendment is contemplated to help ensure that the Association does things properly!

Stay tuned, as the case is not over yet. . .

By: Amy H. Bray, a partner in our Commerical Real Estate Department.

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Pat McDonough heads up the criminal defense division for Andersen, Tate & Carr. His criminal practice includes both state and federal white-collar and general criminal defense.

Mr. McDonough has extensive criminal trial experience. He has conducted over one hundred criminal jury and bench trials on allegations including complex fraud, money laundering, identity theft, drug trafficking, armed robbery, drug conspiracy, kidnapping, stalking, aggravated assault, arson, burglary, DUI, as well as death penalty murder.

Prior to joining Andersen, Tate & Carr, Mr. McDonough was the District Attorney in the multi-county Cordele Judicial Circuit, overseeing the District Attorney’s Office, the Victim Witness Program, and the Child Advocacy Center, which he created. While at the District Attorney’s Office, he had a 99.1% conviction rate. He was the youngest serving District Attorney in the State of Georgia. Prior to being appointed District Attorney, he served as an Assistant District Attorney for the Cordele Judicial Circuit.