Reference no: EM133161198

The Box (Key West, Florida) 

The Uncorked Box is an art studio where you can bring your own wine and friends for a relaxing night of painting - even if you have no artistic experience whatsoever!  They offer birthday packages and girls-night-out/guys-night-out as well as weekend opportunities to get together and relax. Trained artists lead the group through painting a selected piece of work, from Van Gogh's Sunflowers to University mascots.  It is a chain headquartered in Key West, Florida, with fifty full-time employee artists in all the various locations throughout the United States and sixty full-time and part-time support staff to help with parties, marketing, managing the business, and working special events. 

Everyone that works there is an employee (no independent contractors), no one has a contract of employment and there is no union representing any of the workers.   Managers are paid a salary of $33,560 a year for full-time work; they do   all hiring, firing and directing of the workforce. Workers at the Uncorked Box make $16.50/hour and the work is super fun - workers get to play with everything from finger paints to watercolors to oil paints and get paid for it!

Tanya, the manager of one of the locations of The Uncorked Box, works about 60 hours a week.  Late one night, she decides she wants to try out a new homemade paint.  She mixes it herself, believing she may have something she could mass produce.  The colors are more vibrant than traditional oil paints and Tanya loves the way it applies to the canvas.  When she tries it out with the customers, they love it, too. Tanya doesn't tell anyone what is in it, but Tony, a full-time worker, finds some cans in the back of the studio that lead him to believe Tanya might have been messing around with hazardous chemicals.  When Tony talked to Tanya, she denies everything and says the new paint was made exclusively from herbal ingredients. She even has a receipt to show him where she got the ingredients. And, she posted a "how to make new paint" tutorial to YouTube. She claims that the material he found in the back of the store was for cleaning the store, not for mixing the paint.  Tony wants to talk to owner of The Uncorked Box about the situation and asks Tanya how to get in touch with him.  Tanya says, "I'm not going to tell you" and promptly fires Tony for questioning her authority. 

As it turns out, maybe Tony was right to be worried about toxicity.  Two employees and three customers need to be taken to the hospital after working a party where they mixed and/or used the special paint for five hours straight.  They needed to be in the hospital for five days for ICU and are still in there for observation and medical treatment to detox their bloodstream from a mix of chemical substances.  Tanya says she can't understand it, because she didn't use anything but herbs.  The hospital says there were toxins that were not herbal in their system.

Now Tony no longer works there but he goes to upper management to tell them about the dangers of the special paint.  He tells them that Tanya endangered the workers and the customers with her experimentation.  Tanya is put on unpaid leave while management conducts an investigation.  Management tells her it could take months before the investigation is complete. 

Tanya quits and tries to get another job because she needs to make money.  Whenever her potential employers check her references, corporate HR tells them she experimented on customers and poisoned them, so she is suspended pending an investigation. 

This has made its way to senior management, and Jacquelyn Smith, the Senior Vice President of Operations wants some answers.  She hears you are a bit of an expert in HR and employment law, so she flies you in to meet with her at the Key West headquarters.  She wants to pick your brain on this situation and has prepared a list of questions for you.  Please answer them in a Word document organized by numbered question and your answer. You should upload your Word document to Canvas when you are done and before the deadline!

Here are Jacquelyn Smith's questions on behalf of The Box

1. Do we need to pay the two employees in the hospital for their medical expenses and/or for days they miss work?  Does this depend on whether the company offers paid sick leave or whether they have health benefits through the company?  What law applies here?  Please explain.

2.  Last week, we got a letter from the Florida Reemployment Assistance Program (the new name for what used to be called the Florida Unemployment Compensation Program).  It says that Tony applied for unemployment benefits after Tanya fired him.  We have two weeks to decide whether to oppose him getting unemployment benefits.  Should we oppose?  Will he get them?  What's the standard for this decision?

3.  Yesterday, we got a letter from the Florida Reemployment Assistance Program saying that Tanya has applied for unemployment benefits as well. Should we oppose?  Will she get them?  What's the standard for this decision?

4.  We received a letter from Tanya's brother, who is a lawyer representing her.  It states that she is going to sue us for FLSA violations, reserving the right to bring other claims along with that lawsuit.  Tanya is claiming that she wasn't paid for hours of overtime she regularly worked.  We have her classified as exempt under the FLSA as a creative professional, so it is our understanding that we did not need to pay her specifically for the overtime hours she worked.  We don't dispute that she worked those hours - we have all of our employees clock in and clock out - but we didn't pay her overtime because she's a salaried, exempt employee.  Are we in trouble here or is this just a nuisance lawsuit?

(Questions 5 - 8) We are concerned about possible tort lawsuits.  Is the Uncorked Paintbrush subject to any lawsuits in tort by Tony, Tanya, the two employees in the hospital, or the three customers in the hospital?  If so, what tort(s) and do you think they will be successful?  Why?  Please walk me through your reasoning here.

5.  Please answer the above question re: Tony.

6.  Please answer the above question re: Tanya.

7.  Please answer the above question re: the two employees in the hospital.   

8.  Please answer the above question re: the three customers in the hospital.

9.  What policy changes would you recommend for our HR department to implement to prevent or minimize our liability in cases like these in the future?

10.  I think I've laid out all of our legal concerns, but are there any other laws I should be concerned about or anything I've missed that you want to mention?