PPG slapped with $470,000 judgment in vendor rep case
A PPG Paint rep who claimed overtime for the hours he worked at several Lowe’s stores won $24,400 — double his back pay — in a Washington State court, according to a summary in the Washington Employment Law Letter. Counting the plaintiff’s attorneys’ fees, PPG Industries was ordered to pay $470,000 in a case that could reverberate through the aisles of big-box stores across the nation.
Andrew Fiore, a territory manager for PPG Industries, was responsible for promoting Olympic brand paints and stains in 11 Lowe’s stores (nine were in Washington and two were in Oregon). His responsibilities included stocking shelves, maintaining the displays and paint chip racks, and helping customers. Fiorce was required to visit two stores each day and spend four hours in each store. Each of his 11 stores had to be checked on at least three times a month. A lot of driving time was involved.
Responding to email, voicemail and writing reports put Fiorce way over a 40-hour work week, considered the maximum number of hours without overtime.
After his discharge from PPG, Fiorce sued for unpaid overtime, which he calculated at $12,000, based on his hourly rate. PPG argued that Fiorce was an administrative employee and therefore exempt.
The trial court disagreed. Fiorce had been misclassified as an “exempt” employee, it said. Mostly he performed manual labor and had no authority to mark down prices or change promotional materials without the store manager’s approval. Nor did he work with PPG’s financial or budgetary departments. Because the failure to pay overtime was found to be “willful,” the $12,000 was doubled to $24,000 as per state law.
PPG made an unsuccessful attempt to transfer the case to federal court, upping the legal fees for both parties. It also appealed to the Washington Court of Appeals, where it lost.
An attempt to reach PPG Industries for comment was unsuccessful.
In its analysis of the case, the Washington Employment Law Letter warned employers that “The administrative exemption is the most difficult of all the overtime exemptions to apply.” And when it comes to relatively modest wage and overtime claims, think about the attorneys’ fees before you rush off to court.
How to avoid botched investigations
Among the mistakes employers sometimes make when investigating workplace misconduct: waiting too long to get started, limiting the scope of the investigation, failing to take interim measures to curb bad behavior and selecting a biased investigator.
During a July 2012 webinar, Allison West, SPHR — an employment attorney who specializes in training, conducting workplace investigations, and coaching executives and managers — said she evaluates several over-arching issues:
• Is everybody safe? If not, what interim measures must be put in place to ensure safety?
• Has there been a policy violation?
• Are there legal issues that might arise?
West, founder of Employment Practices Specialists in Pacifica, Calif., and a frequent speaker at SHRM’s Annual Conference & Exposition, provided recommendations to avoid legal and reputation damage in investigations during a webinar hosted by i-Sight.com, an Ottawa, Canada, Web-based case management software provider.
Some of the mistakes employers should avoid:
Delaying an investigation: Some companies adopt an “I’ll get to it when I have time” attitude when they hear allegations of wrongdoing in the workplace. Employees do not have to put a complaint in writing in order for an investigation to begin, West explained. Moreover, it’s important not to promise confidentiality if one hears about a potential violation.
“You’re on notice and you have to do something,” West said during the webinar. Otherwise, memories start to fade, documents and evidence can disappear, and the bad behavior can continue. And courts have held that failure to investigate might be considered adverse employment action, West said.
However, she advised webinar participants to avoid implementing policies that specify a precise time frame during which an investigation must be launched and completed because witnesses might be on vacation or unavailable for a legitimate reason.
“You need to say ‘we take (the allegation) seriously and we will do a prompt and thorough investigation,’ ” West said. “Prompt for me means you at least get the ball rolling. Each investigation is unique and there can’t be a guideline that will cover each and every type of situation.”
Having a biased investigator: Some investigators are simply too close to the situation and can’t be objective. If they’re friends with — or have coached or worked closely with — the person being investigated, they might have a personal stake in the outcome.
Others might lack the skills, training or ability to perform the task well or might not be familiar with and be able to follow federal guidelines on conducting investigations, West noted.
“Many companies have been slammed because of who they selected as the investigator,” West explained. If someone in the C-suite, vice president or director level were being investigated, an HR generalist with little or no investigation training would not be appropriate, West said.
Organizations should make it possible for individuals to say that they might not be the right person to conduct an investigation and to suggest that someone else in the organization — or an outside investigator — should be brought in to do the job, she said.
Not preparing and developing a strategy: West recently began an investigation into an employee’s claim that she was being “picked on” and treated differently because of a medical condition. One of her first steps was to consider where to conduct interviews. Since the employee’s office was relatively small — fewer than 10 employees — West decided to hold interviews off site.
Investigators should consider other factors as well such as who to interview first. Many investigators always interview the complainant first, West said, but she recommends flexibility.
“Sometimes you want to meet with the alleged wrongdoer up front,” West noted.
Other strategic decisions: consider public relations and legal issues that might arise and “get lawyers involved early,” if necessary, she added.
Wrapping up the investigation early without following the facts: Saying “I don’t need to interview other people” or “I don’t need to hear any more of your explanation” is problematic on many levels, West said. “You need to see where the evidence will take you, not where you think you will take it,” West said. This means interviewing all relevant witnesses, not “all witnesses that exist,” she added.
Having an investigation ‘gone wild’ with rampant gossip or worse: Take control of the investigation, West advised. The complainant might try to “run the show” and dictate a list of interviewees, she explained. It’s OK to ask them who else might have “relevant” information, but the investigator should make the final decision about whom to interview.
Watch out for divisiveness among teams and departments once an investigation is under way, West urged webinar participants, and decide if someone needs to remind employees that everyone is expected to behave in an appropriate and professional manner.
Declaring ‘case closed’ and failing to guard against retaliation: It’s important to avoid reaching a conclusion prematurely, West noted. In addition, employers should be on the alert for potential retaliation, she added, since investigators and employers often don’t follow up with witnesses to make sure “everyone is OK.”
Pamela Babcock is a freelance writer based in the New York City area.
Have HR-related questions and concerns? Get access to essential forms, policies and guides, plus a live call center, at ToolkitHR.com, powered by HCN and the Society for Human Resource Management (SHRM).
Japanese firm purchases large HVAC company in U.S.
Daikin Industries, a small presence in the U.S. air-conditioning market, has purchased Goodman Global for $3.7 billion, putting the Japanese firm just ahead of Carrier in the global HVAC business, according to an article in the Wall Street Journal.
Daikin is buying Goodman from a private equity firm named Hellman & Friedman, which paid $2.7 billion, plus the assumption of debt, to take the company private in 2007, the newspaper reported.
Demand for heating and cooling from the United States, already the largest market for HVAC sales, continues to grow. Houston-based Goodman, which operates factories in Texas and in Tennessee, will bring Daikin technology, new products and distribution channels that the Japanese powerhouse now lacks. HVAC revenues at Daikin reached $13.2 billion in its last fiscal year.
The Goodman Global deal is expected to close in the fourth quarter.