Most employers are aware that violations of the Fair Labor Standards Act can result in an investigation by the U.S. Department of Labor, leading to back pay damages, as well as possible liquidated damages in an amount equal to back pay, and even civil penalties up to $1000 for each willful or repeated violation. State departments of labor may also conduct such investigations for violations of state wage and hour laws, which can result in similar monetary consequences. Employees may also bring a lawsuit against their employer in federal or state court. But what many employers don’t know is that they could even end up in jail!
Under the FLSA, willful violations can result in criminal prosecution, with a second conviction resulting in imprisonment! State laws can be even more aggressive, as a Papa John’s franchisee recently learned to his dismay.
As the Wall Street Journal reported this week, the Department of Labor’s (DOL) highly anticipated rules regarding employees’ eligibility for overtime are not likely to be finalized until sometime in mid to late 2016. This timeline, which is later than the Spring-time anticipated date, was acknowledged by the Department of Labor (DOL) Solicitor, Patricia Smith, during the American Bar Association, Labor and Employment Section Conference two weeks ago. I attended the panel at which Solicitor Smith spoke, and counsel for both management and employees were surprised by this revelation.
As my firm previously reported, in June 2015, the DOL proposed revisions to the overtime rules. The proposed rules significantly increased the required salary for employees to qualify as exempt. The current salary threshold is $23,660. The proposed rules more than double it to $50,400! Clearly, this is a significant increase and would make many more employees eligible for overtime pay.
Solicitor Smith said the reason for the delay in the issuance of the final rules is the significant number of comments that were received by the DOL, which are in excess of 200,000! This is three times more than the number of comments received by the DOL when it revised the regulations back in 2004.
So I found this case, Smith v. URS Corp., interesting because it involved a black employee who got what he wanted, but was still able to sue for discrimination.
The black employee received the job he applied for (training specialist) and more pay than he asked for ($57,668 instead of $46,000). He was given a classification title and job code of “Senior Training Specialist (65010)” and a job grade of S5.12. Five months later, a white applicant applied for the same training specialist job but asked for a $65,000 salary. He was hired into a Senior Training Specialist role at his requested salary, with a classification title and job code of “Staff Training Specialist (65010) and a job grade of S5.13. Shortly after that, another black applicant applied for a training specialist position with a desired salary of “58K to 65K.” He was given the same job title, classification, code and grade as the other black employee.
The first black employee sued for race discrimination after he was terminated pursuant to a reduction in force. The trial court threw out his claims on summary judgment before trial because the black employee had received the job he wanted and more pay than he sought. (Hmm, that seems pretty logical, doesn’t it?)
As you may know, the National Labor Relations Board substantially revised the rules governing the union elections process, by which employees choose whether or not they wish to be represented by a union. The controversial revisions greatly sped up the process, with the effect that employer had less time to educate their employees about the impact of unionization before an election is held – which means more unionization (hence the controversy!).
These revised “quickie election” rules took effect in April 2015. Because the rules themselves were not troubling enough for employers, we now have to contend with the Board’s expansive interpretation of those rules. Here’s an example of what I mean.
As part of the election process, the employer must provide a voter list to the union, containing the names and contact information for all employees eligible to vote in the election. Before the revisions, this list consisted of the names and addresses of eligible voters. This information is readily available from a company’s human resources department, through its database or records. The revised rule, however, requires that the list must now include “available” personal e-mail addresses, and home and cell phone numbers.
What does this mean? Well, in the Danbury Hospital of the Western Connecticut Health Network case, the employer generated a list from its HR database. The list contained the addresses and emails for all the eligible voters, and phone number for 94% of them. Continue Reading
So, someone who posed as a nude lumberjack for Playgirl is now upset about the (foreseeable!) consequences of his decision – teasing by his coworkers. And a federal court judge has found that the employee’s sexual harassment claim against his employer, based on his coworkers’ teasing, may have merit. To me, this case, Sawka v. ADP, Inc., is crazy on several levels!
Let’s start with the employee. I find the lack of personal accountability in our society to be appalling. Many people are unwilling to take responsibility for their choices and actions – and, in my opinion, this employee falls into this group. It seems to me that if you choose to put it ALL out there in a sexually-focused publication that is intended for widespread public distribution, you should realize that people (including those you know!) will look at the pictures, comment on them, and, yes, tease you about them. Really, isn’t the whole point of posing for a magazine like Playgirl to invite such attention? Now, I understand that the pictures date from 1991, and perhaps the employee regrets having posed for them at this point in his life. But the passage of time does not and should not absolve him of his responsibility for his (in retrospect) possibly ill-considered decision.
Moreover, his expectations of what his employer should have done were, again in my opinion, unrealistic. The employee initially failed to complain because, in part, he found it “embarrassing.” (Really?) When he finally complained about his coworkers, the employer conducted an investigation, which included interviewing the list of witnesses he provided as well as others. The employee now contends that the employer should have searched the computers of his coworkers to verify that they had looked for his pictures on the Internet. But at the time, I am sure the employer believed it had addressed the issue by speaking with the worst offender about his comments and instructing the Vice President in charge of the office to report any further comments or Internet searches for the employee’s pictures. Given that the employee admittedly did not make any further complaints (although he now alleges that the comments didn’t stop), the employer undoubtedly thought it had resolved the problem.
As you may know, I am a die-hard management lawyer. For example, I recently saw a production of J.B. Priestly’s, “An Inspector Calls.” The titular Inspector forces various members of a wealthy family in Edwardian England to examine their roles in putting a young woman on the path to suicide. In particular, the father had fired the young woman from his factory for being a labor agitator. I know I was supposed to sympathize with the young woman, but I frankly thought the father had behaved in an completely understandable manner (although, of course, it would now be a violation of the National Labor Relations Act to do so). My husband told me, “Well, I guess you’re in the right profession.”
But every now and then, there is a case that just smacks of unfairness to me, even though it may be legally correct. Frederick v. State of New Hampshire was just such a case.
The employee’s new baby had difficulties with bottle feeding. In addition, the employee’s doctor provided a letter explaining that the employee should breastfeed as must as possible to minimize her anxiety disorder. In preparation for returning to work, the employee asked for either an extended break time to go to her baby’s nearby daycare center to breastfeed, or to have her baby brought to her and to be allowed to breastfeed her baby in the employer-provided lactation room.
So as Halloween approaches, a recent religious accommodations case involving the “mark of the beast” seemed seasonally appropriate.
For those of you not so familiar with the Bible, the Book of Revelation tells the story of a satanic beast that comes out of the earth and forces all humans to worship another beast coming from the sea. The worshipers are marked on their right hands or their foreheads with the number “666” – i.e. the “mark of the beast.”
Several years ago, a client implemented a biometric timekeeping system, which used a hand scanning procedure. One of the employees objected to using the new system on religious grounds, based on his fear that the system would either imprint or reveal the mark of the beast (it wasn’t terribly clear exactly what the concern was). My partner, Mike McGuire, noted that the mark appears on the right hand, however, and the employee could simply use his left hand on the scanner. Well, that seemed to fix the problem – a pretty simple solution, wasn’t it?
Unfortunately, it didn’t work out so easily for another company – Consol Energy. In that case, an employee who was an Evangelical Christian objected to the biometric scanning system for the same reasons as our client’s employee. Consol actually provided a letter to the employee from the company that made the system, explaining that the Book of Revelation specifies that the mark will appear only on the right hand (or forehead), and therefore the left hand may be used for scanning purposes.
There’s a part of me that thoroughly enjoys a smackdown between government agencies. (The other part of me is screaming at the government inefficiency and waste of my tax dollars). Here’s a good one.
As most of you know, the U.S. Department of Labor released its proposed revisions to the overtime regulations under the Fair Labor Standards Act. The current regulations set forth three tests for exempt status: (1) the employee must be paid on a salary basis; (2) the salary threshold must be at least $455 per week ($23,660 per year); and (3) the employee must meet duties tests specific to the exemption in questions (executive, administrative or professional). As we discussed (with a highly raised eyebrow) in a previous blog, the proposed regulations contain only one actual change to these tests – an increase in the salary level to over $50,000 per year, with yearly increases thereafter.
The public was invited to submit comments on the proposed regulations – 289,932 individuals and entities took them up on that invitation. One of those was the Small Business Administration – another federal agency. The SBA has an Office of Advocacy, which represents the interests of small businesses before Congress and other federal agencies.
As those companies who are required to submit an EEO-1 form know, the extended deadline for the annual submission is coming up soon – October 30. Generally speaking, covered employers must report on the form, by establishment/company totals and job group (e.g. first level officials and managers, professionals, administrative support employees, etc.), the number of employees by sex and race or ethnic category. The Equal Employment Opportunity Commission requires most private employers with 100 or more employees to submit the EEO-1 form, while the Office of Federal Contract Compliance Programs requires most government contractors with 50 or more employees and $50,000 or more in federal contracts to submit this form.
Originally on the EEO-1 form, multi-racial employees had to be designated a single racial or ethnic category. For example, an individual who had a Black father and a White mother would have to be identified as solely White or solely Black. In 2005, however, the EEO-1 form was revised to include new racial and ethnic categories, including “Two or More Races.” This change was entirely appropriate in our increasingly multi-racial society, and permitted a more accurate reflection of the racial makeup of a company’s workplace.
But what about sex? There has been a lot of recent media attention to gender identity issues (in case you’ve been living in a cave) – and the choice of gender identity is apparently far broader than I could have possible imagined. As Slate reported, in July, Facebook began allowing its users to self-identify as other than just “male” or “female.” In fact, Slate counted 56 options!!! (Whaaaaat?!!! Naïve me.) Many of these terms were ones that I had never heard of before – agender/neutrois, gender questioning, intersex, non-binary, pangender, two-spirit….
On Labor Day 2015, President Obama issued an Executive Order that requires certain government contractors and subcontractors to provide up to 7 days of paid sick leave per year. This leave may be used for illness or injury; medical appointments or treatment; caring for an injured or ill family member, or obtaining medical treatment for them; and, in cases involving domestic violence, sexual assault or stalking, to obtain counseling, seek relocation, seek assistance from a victim services organization, take legal action, or to assist a family member with regard to any of these actions. This requirement will be effective for all contracts entered into or renewed on or after January 1, 2017. (More pain for government contractors…)
Along with the Executive Order, the White House also issued a Fact Sheet: Helping Middle-Class Families Get Ahead by Expanding Paid Sick Leave. According to the Fact Sheet, the Executive Order will extend paid sick leave to 300,000 workers on federal contracts and subcontracts. The White House contends that this action will “improve the health and performance of employees,” will make (sub) contractors competitive by bringing their benefits packages in line with leading firms, and will protect the public health by allowing employees with communicable diseases to remain home.
The Fact Sheet also notes that President Obama is urging Congress to pass the long-languishing Healthy Families Act, which would require all employers with 15 or more employees to provide paid sick leave. Because it is unlikely to pass (snowball’s chance in hell, really), President Obama also specifically called upon cities and states to pass sick leave laws.
Here in Maryland, President Obama’s call is falling on receptive ears in the Maryland General Assembly. A paid sick leave bill has been proposed for the past several sessions, and has gained traction each year, but ultimately has not made it out of the House Economic Matters Committee. In response to the Executive Order, the Chairman of the Committee, Representative Dereck E. Davis was quoted by the Washington Post, in an article on Prince Georges County’s attempt to pass a paid sick leave law, as stating, “I think [sick leave is] a bill whose time has come … I think it would be best if we had one bill that governed everyone in the state, but that does not mean that if the locals want to do something stronger, they are definitely encouraged to do so.” According to the Washington Post, Delegate Davis is “committed to using all his power to push a bill out of the House this session.”
As I previously blogged, there are substantial costs and other non-monetary impacts on employers resulting from a paid sick leave mandate. If the state law passes this year, as many people expect it to do, I believe there will be unintended negative consequences for those workers the law is intended to help, as employers seek to deal with the increased costs of doing business in Maryland.