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US Employment Laws for Greek Businesses & Investors

George S. Kounoupis has been a member of the PA, NJ Bars since 1987 and 1988 and became a member of the Greek Bar in 1990. He is the ABA Liaison to Greece.

Almost all businesses in the United States spend a substantial part of their revenue on "human resources" consulting, employment and labor law compliance as well as related investigations, administrative proceedings and litigations. In the US Federal Court system employment and wrongful termination litigation has risen dramatically in the past 20 years creating substantial damages exposure for both small and large companies. US employment and labor law is highly complex and regulation intensive. Moreover the statutory damages and attorney fees exposure (and even punitive damages exposure) can be very large.

Such exposure is magnified when foreign companies, perhaps not as well versed in US employment and labor laws, retain (directly or indirectly) individuals in the US - either as employees or independent contractors. (I say directly or indirectly because formal agreements or stipulations as to who the employer is may be ignored by the courts which may look to see who the "real" entity is that guides, manages or controls the employee).

US employment and labor law is governed by Federal law; State law; and local law. This law can be statutory, regulatory, or common (i.e. made by case law and not found in statutes - unlike in the Greek Code Law system).

A general starting proposition is that employees are "at will" in most states. "At will" means that no reason or condition is required to terminate an employee - nor is that employee entitled to anything upon termination such as notice or severance or damages. However, the "at will" rule simply means that "everything is legal which is not illegal" - and therefore the rule has little practical application. Exceptions to the "at will" rule are:

  1. Collective Bargaining Agreements in unionized workplaces;
  2. Contracts (both express and implied and/or both written or verbal);
  3. Civil Service systems;
  4. Constitutional protections for public employees;
  5. A large number of "whistleblower" or "wrongful discharge" laws;
  6. State and federal wage and hour legislation;
  7. State and federal unfair labor practice legislation;
  8. Federal and state legislation regarding pensions and benefit plans (such as health plans - ex. ERISA);
  9. Federal and state statutes regarding discrimination, harassment and retaliation in the workplace;
  10. Federal and state medical or family leave entitlement statutes;
  11. State workers' compensation and unemployment benefit systems and regulations.

The above is by no means a complete list but only a starting point (for example the employer can unlawfully violate employee privacy; commit unlawful torts; illegally disseminate employee health information - HIPAA; violate COBRA - employee health benefits continuation etc...)

We need not spend a lot of time discussing many of the above. Suffice it to say, most employees do not have private contracts such as executive employment agreements which are extensively negotiated (with golden parachutes, severance, strict termination conditions and such). Collective Bargaining Agreements in unionized workplaces also do not need a lot of discussion here because the Union Agreement defines the employees' rights (except to note that it is an illegal labor practice to retaliate against organized and/or concerted employee conduct - even in a non-unionized workplace).

We also need not spend a lot of time on civil service or constitutional law protection found primarily in public employment and public sector employment. In summary, these legal regimes regulate "cause" for termination and implement hiring, seniority and discipline processes and grievances, among other things.

Workers Compensation laws provide for mandatory insurance benefits and wage loss coverage for employees injured on the job. Unemployment Compensation laws (mostly state based) provide for wage benefits to employees who are terminated without misconduct or rule violation. As to the myriad of "whistleblower" and wrongful discharge laws and regulations, if you are an employer who conducts activities which put the health, safety and welfare of the public at risk (ex. dangerous products; dumping toxic waste; committing accounting or insurance fraud etc...) you may be sued for substantial damages for terminating an employer who objected to this and "blew the whistle. In addition, if you are overcharging or defrauding the federal or state government these are qui tam or False Claim Act causes of action available to employees who report your company.

As to the Federal and State wage and hour laws (you must comply with both therefore the strictest applies), in brief these laws impose minimum wage and overtime regulatory schemes on certain classes of non-exempt employees)-i.e. non-management and non-professional. Additional legislation, regarding mass layoffs and/or substantial reductions in force, also applies, e.g. WARN ACT (requiring advance notice to affected employees).

Perhaps the greatest sources of liability are Federal and State discrimination, harassment and retaliation laws, as well as laws for medical or pregnancy leave or other family leave. I will discuss the major federal laws - pointing out however that each state has its own parallel legislation and laws [statutory (made by legislators); regulatory (made by administrative agencies such as the EEOC); and case law (made both by federal and state courts)]. Again, the strictest of the federal versus the state laws will apply.

The main federal laws are Title VII; the ADA - Americans with Disabilities Act; the ADEA, Age Discrimination in Employment Act; and the FMLA - the Family Medical Leave Act. Title VII (Civil Rights Act of 1964, as amended) protects employees against discrimination based on race, religion, ethnicity and gender. Protection against "gender" discrimination includes protection against sexual harassment in the workplace, as well as pregnancy discrimination.

The ADA, provides protection to workers with a "disability". This statute not only provides protection against discrimination but also requires the employers to "accommodate" a disabled employee in the workplace. The ADEA provides protection from terminations and other adverse job activities based on age. The Family Medical Leave Act provides mandated medical leave protection (for "serious medical conditions") in workplaces of over 50 employees.

All of the above statutes provide for protection from discrimination, hostile work environment/harassment and retaliation based on the above factors. The applicable state and federal regulations and case law requires employers to take affirmative action and have in place proper policies and procedures to prevent, identify and remediate any of the above violations.

Lastly it should be noted that US employers abroad or foreign employers controlled by US entities may have to comply with the US employment laws - in particular the antidiscrimination laws. As a general rule, US citizens working abroad for a US controlled entity will be covered by these laws.

In conclusion, any foreign company doing business in the US has to exercise substantial care and due diligence in entering the US and utilizing the US workforce.

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Hahalis & Kounoupis, P.C. - Greek Law Group
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