Legal Clinic

Disposing of Employee Property

HR leaders should develop procedures on how to handle items left behind by employees that recognize applicable state laws. The Legal Clinic also addresses what HR executives should do to prevent perceptions of reverse discrimination.

Monday, October 4, 2010
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Question: What rights do employers have to discard an employee's personal property left on the employer's premises after the employee has terminated their employment with the company? Any suggestions on how to best go about getting rid of the left-behind property?

Answer: Personal property should be returned to employees upon their separation of employment either by mailing the property to the employees or by allowing the employees to retrieve their belongings from the work premises.

Challenges occur however when employees refuse to come collect their belongings or when employees have moved and cannot be located. In such cases, an employer faced with clearing out a former employee's workspace will be required to comply with the applicable state laws governing abandoned property.

Generally, in order to establish that someone has abandoned property, the holder of the property must show that the owner intended to, and succeeded in, permanently relinquishing the item. See, e.g., United States v. Crawford, 239 F.3d 1086 (9th Cir. 2001), as amended, 2001 Cal. Daily Op. Serv. 1335 (9th Cir. Feb. 14, 2001) (applying California law); Bruner v. Geneva County Forestry Dep't, 865 So. 2d 1167 (Ala. 2003); Bobo v. Vanguard Bank & Trust Co., Inc., 512 So. 2d 246 (Fla. 1st DCA 1987); Right Reason Publ'ns v. Silva, 691 N.E.2d 1347 (Ind. Ct. App. 1998); Allamakee County v. Collins Trust, 599 N.W.2d 448 (Iowa 1999); Riverside Drainage Dist. of Sedgwick County v. Hunt, 99 P.3d 1135 (Kan. 2004); Walker-Rogers Post No. 662, Veterans of Foreign Wars of U. S., Inc. v. Vigeant, 407 N.E.2d 1316 (Mass. 1980); Van Slooten v. Larsen, 299 N.W.2d 704 (Mich. 1980).

In other words, property is formally abandoned only if it has been "renounced utterly." United States v. Real Property At 2659 Roundhill Dr., Alamo, Cal., 194 F.3d 1020, 1026 (9th Cir. 1999).

Courts have found that a lapse of time and nonuse may imply an intent to abandon an item. Zych v. Unidentified, Wrecked & Abandoned Vessel, Believed To Be SB "Lady Elgin", 755 F. Supp. 213, 214 (N.D. Ill. 1990); City of Houston v. Van De Mark, 83 S.W.3d 864 (Tex. App. 6th Dist. 2002), petition for review denied, (Jan. 16, 2003).

This is especially true when considered along with the owner's failure to conduct sufficient efforts to recover the property. Zych, 755 F. Supp. at 214.

Generally, when an employee knows that his or her property is on the employer's premises, and the employer has requested that the employee take possession of the property, the employee's failure over time to collect the items could be considered abandonment.

Though this offers a useful starting point for employers left with unwanted property, employers should keep in mind that state statutes vary widely in their provisions governing abandoned property.

For example, Delaware defines abandoned personal property as property "which the rightful owner has left in the care or custody of another person and has failed to maintain [or] pay for the storage of ... for a period of one year." Del. Code Ann. tit. 25 § 4001.

The holder of the property must also attempt to give notice to the true owner. Del. Code Ann. tit. 25 § 4003(a).

After one year has elapsed, the holder must attempt to notify the owner that his or her property rights are about to expire. Del. Code Ann.. tit. 25 § 4003(b). The holder must also make an application to a Delaware court to acquire legal ownership of the property. Id.

In Texas, an owner has rights to the property for up three years, but once that statutory period has ended, the owner's stake in the property is immediately dissolved and no application to a court is necessary for the holder to take legal possession. Tex. Prop. Code Ann. § 72.101.

An employer left with a former employee's personal property should be aware of such statutory requirements in its particular state and comply when necessary.

Employers can steer clear of any unwanted personal property issues by giving employees, when possible, an opportunity to collect their property immediately after their employment is terminated, or at least very soon thereafter. This hopefully avoids any issues related to the separated employee moving with no forwarding address.

In cases where an employee simply leaves the employer's premises (or resigns from a remote location) and then ignores the employer's requests to collect the property, an employer may then ship the personal belongings to the last known address.

When even this is not possible because the employer knows the employee has moved but has no way of contacting that individual, the employer should determine if there is a statutorily required time period it must hold the property before it is considered abandoned.

If the applicable state law has such a minimum, the employer must hold the property for that length of time. Obviously, the employer must also comply with any statutory notification requirements as well.

If there is no formal time requirement, the employer is still advised to hold the property for a reasonable length of time (one year, for example), before considering the property abandoned.

When storing the property, the employer should be careful to keep it in a secure location, preferably inaccessible to other employees. It is also advisable to document the chain of custody of the property.

Once the time period, whether statutory or self-imposed, has expired, the employer is advised to attempt to contact the employee one last time at their last-known address (via certified return-receipt correspondence) to unequivocally inform them that their property will be discarded if it is not collected within a certain time period, say 10 business days. After that time has expired, the employer is free to discard the property.

Question: Lately the company has been hiring people of the same ethnic group at our company. Can this indicate a serious issue?

Answer: At every stage of the hiring process, employers must be careful not to illegally discriminate against applicants. Because discrimination is prohibited on the basis of race, gender, national origin, age, religion and disability -- and by now most job applicants know that -- any indication of bias in the hiring process might lead to serious legal repercussions. See, e.g., 42 U.S.C. §§ 2000e et. seq, 29 U.S.C. §§ 621-34; 42 U.S.C. §§ 12101 et seq.

Title VII and the 14th Amendment to the U.S. Constitution, as well as various state antidiscrimination statutes, protect individuals of every race and ethnicity, which can give rise to reverse discrimination claims. 42 U.S.C. §§ 2000e et. seq; U.S. Const. amend. XIV.

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This occurs when individuals not typically associated with being the victims of discrimination (e.g., white males) assert that members of other racial or ethnic backgrounds are receiving preferential treatment.

An ironic aspect of a reverse-discrimination claim is that it's often the result of an employer's attempt to honor diversity. An employer who is seeking to hire more people of color can expose themselves to liability from disgruntled white job applicants.

The Equal Employment Opportunity Commission has recognized workforce diversity as a lawful business-management concept to voluntarily promote an inclusive workplace, provided that diversity efforts are "designed to open up opportunities to everyone." EEOC Compliance Man. § 15(VI)(C).

However, diversity targets, inflexible goals, and other forms of quotas lack the requisite level of openness required by federal and state EEO laws. In fact, quotas are per se illegal under the regulations of the Office of Federal Contract Compliance Programs and the EEOC; Title VII of the Civil Rights Act of 1964 and court decisions. See 29 CFR § 1608.4; 41 C.F.R. § 60-2.16(e)(1) ("Placement goals may not be rigid and inflexible quotas, which must be met ... . Quotas are expressly forbidden."); 42 U.S.C. § 2000e-2(j); Johnson v. Transp. Agency, 480 U.S. 616, 636 (1987).

As such, employers seeking to create a more diverse workforce cannot simply determine it will hire a specific number of employees of various ethnicities or races.

If an employer, especially one that struggled with diversity in the past, is suddenly hiring only minority applicants, this can certainly cause a rejected job applicant to become suspicious of the employer's motives.

Because basing hiring decisions primarily on race or ethnicity is strictly prohibited, as are quotas, to improve diversity numbers, it is critical that an employer be able to articulate the nondiscriminatory criteria it bases its hiring decisions on.

If a white applicant sues and asserts he was denied a job in favor of a minority candidate solely because of race or ethnicity, the employer needs to be able to show hard facts, such as resumes, interview notes and background skills and knowledge, which prompted its hiring decision.

That being said, it is generally unadvisable for an employer to hire only from a particular racial or ethnic group, as this can easily create an appearance of discrimination that could lead to litigation and possible liability.

Turning back to the point of the reader's question: If it appears that only people from a certain same ethnic group are being hired (to the exclusion of other ethnic groups), the employer and/or the HR director should review the applicant pool and speak with the decision-makers to understand why the people hired were chosen over the rejected applicants.

Additionally, it would also be prudent to have employment counsel provide diversity/ inclusion/sensitivity training to make sure that everyone is aware of the antidiscrimination laws that apply to these situations and, more importantly, that everyone is following them.

Keisha-Ann G. Gray is senior counsel in the Labor & Employment Law Department of Proskauer in New York and co-chair of the Department's Employment Litigation and Arbitration Practice Group.

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