Readers of this blog likely know the first reference. But, how about the second? Give yourself a hand if you said “Richard F. Griffin, Jr., General Counsel (GC) of the National Labor Relations Board.” GC Griffin, a holdover from the Obama administration, decided last week that the new Trump administration was not going to have all the fun in Washington, D.C.  What is it that GC Griffin did, you ask? Well, he decided that your favorite running back from Stanford, or that dynamic wide receiver from Northwestern, are employees under the National Labor Relations Act, entitled to full protection under the Act! Continue Reading Are College Football Players Employees? The NLRB General Counsel Thinks So!

keys-minFor nearly 35 years, automobile dealers relied on the U.S. Department of Labor’s position that service advisors fell within the Fair Labor Standards Act’s exemption from overtime for “salesmen, partsmen, or mechanics primarily engaged in selling or servicing automobiles.” In 2011, the DOL “upended” this interpretation by issuing regulations specifying that the exemption did not apply to “sales personnel” unless they sell vehicles.  Thus, service advisors were deemed non-exempt.

In June 2016, in Encino Motorcars, LLC v. Navarro, No. 15-415, 2016 WL 3369424 (2016), the Supreme Court held that the 2011 regulation was not entitled to deference because it was issued without the requisite reasoned explanation for a change.  The Court did not decide whether service advisors are, or are not, exempt.  The U.S. Supreme Court remanded the case to the U.S. Court of Appeals for the Ninth Circuit (which had decided the case below) with instructions that the appellate court not give any deference to the DOL’s regulations.  In other words, the appellate court should review the duties of the position (the sale of repair and maintenance services) and decide if the duties fell within the statutory exemption.

Continue Reading Automobile Service Advisors: Exempt or Non-Exempt

auction-gavel-HpmTks-clipartAs you may remember, Shawe Rosenthal joined with other law firms in Worklaw® Network in a lawsuit against the U.S. Department of Labor to block its implementation of the controversial “persuader rule” in order to protect your right to seek counsel on employment, labor and HR matters with privacy and confidentiality. Here’s a brief recap of the milestones: Continue Reading Persuader Rule Lawsuit Update

Today, December 1, 2016, the Department of Labor issued a press release announcing that it had filed an appeal to the U.S. Court of Appeals for the 5th Circuit of the emergency nationwide injunction of the new overtime rule, which had been granted last week by Judge Amos Mazzant, as discussed in our November 23 blog, “Overtime Rule Will Not Take Effect on December 1.” The preliminary injunction temporarily blocked the DOL’s new rule raising the required minimum salary level for the Fair Labor Standards Act’s white-collar exemptions from the requirement to pay overtime pay. The rule was set to go into effect on December 1st.

As discussed in our May 18, 2016 E-lert, in order to be exempt from overtime, a white-collar employee must meet three tests: (1) the salary basis test – the employee must be paid on a salary basis, not subject to reductions for fluctuations in quantity or quality of work; (2) the salary level test – the employee’s salary must currently be at least $455 per week (equaling $23,660 per year); and (3) a duties test – the employee must perform certain duties specific to the executive, administrative or professional exemption in question.  There is also a highly-compensated employee exemption under which an employee must currently make at least $100,000 per year and perform at least one exempt duty.

The DOL’s revised rule would have doubled the salary requirement for white collar (executive, administrative and professional) employees from $23,660 per year ($455 per week) to $47,476 per year ($913 per week).  The required minimum salary for the highly compensated employees’ exemption would also have been raised from $100,000 to $134,004. These salary levels would have been subject to automatic adjustments every three years. The new rule did not change the duties test for any of the exemptions.

The new rule was challenged by 21 states and multiple business groups, arguing that such change was unlawful. In issuing the preliminary injunction, the judge agreed, noting that the rule change “creates essentially a de facto salary-only test,” which Congress had not intended. In the press release, however, the DOL stated, “The Department’s Overtime Final Rule is the result of a comprehensive, inclusive rule-making process, and we remain confident in the legality of all aspects of the rule.”

jpgThis week, the United States Citizenship and Immigration Services (USCIS) published an updated I-9 Form on its website, which can be accessed here.

The Immigration Reform and Control Act prohibits employers from hiring people without first identifying their identity and employment authorization.  The I-9 Form is the mechanism to achieve that.  Employers are required to complete the I-9 Form within three days of the first day of work for all new hires.

By January 22, 2017, all employers will need to be using the revised form for all new hires.  Until then, employers can either continue to use the current version, which is dated 03/08/2013, or they can use the new version.  The version date is located at the bottom left corner of the form.

Continue Reading USCIS Issues New I-9 Form

Imagine this: Your cobook 2mpany has policies in your employee handbook determined to be unlawful by the NLRB.  Then, you and the NLRB engage in a line-by-line revision of the policies to ensure compliance with Board law and thereafter you issue a new handbook, with policies approved by the Board, to your employees.  Everything is ok, right? Wrong!  This is exactly what occurred in Boch Imports, Inc. v. National Labor Relations Board.  In affirming the NLRB, the First Circuit determined that the Employer failed to properly repudiate its prior, unlawful handbook policies even though it revised those policies in collaboration with the NLRB Regional Office. Continue Reading Must Employers Repudiate Unlawful Handbook Policies?

“I’ve known Bob Rumson for years and I’ve been operating under the assumption that the reason Bob devotes so much time to shouting at the rain was that he simply didn’t get it.  Well, I was wrong.  Bob’s problem isn’t that he doesn’t get it.  Bob’s problem is that he can’t sell it.”

President Andrew Shepherd (played by Michael Douglas) in The American President.

The NLRB’s Quickie Election Rule just celebrated its first anniversary and you know what?  The union election win rate remained the same–about 65%.  The total number of union petitions filed to hold elections jumped all the way from 2,141 in the year before the new Rule up to 2,144 last year– a “whopping” gain of 3 elections.   NLRB statistics do confirm that the median time from the filing a petition to the election decreased substantially, from 38 days down to 24 days. Continue Reading NLRB’s Quickie Election Rule Turns One

On March 23, 2016, the Department of Labor released the long-pending revisions to the “persuader rule,” drastically expanding employers’ disclosure requirements regarding their use of union avoidance consultants, including attorneys as well as HR consultants and media specialists. Our firm, on behalf of Worklaw, an international management-side network of labor and employment firms, will be filing suit to block implementation of the rule.

Under the “persuader rule” in the Labor-Management Reporting Disclosure Act of 1959 (LMRDA), employers are required to file reports and disclose expenditures to the DOL each time they engage a consultant to persuade employees regarding employees’ rights to organize. However, the LMRDA provides an “advice exception,” which had been interpreted for over 50 years to exclude an employer’s discussions with its labor relations consultants – including legal counsel – regarding opposition to a union organizing campaign, as long as the consultants had no direct contact with employees.

Under the new rule, however, the scope of an employer’s reporting obligations under the LMRDA has been substantially expanded, and will include a broad range of activities beyond “direct contact” provided by labor relations consultants – including attorneys. The intent of this one-sided rule is to discourage employers from retaining such consultants, and thereby promote unionization. Continue Reading DOL Issues Persuader Rule

AT&T Connecticut and the Communications Workers of America were embroiled in bitter contract negotiations in 2009. Among other efforts to let the public know about the dispute, employees, many of whom had to go into customers’ homes, began wearing shirts that said “Inmate” on the front with a black box underneath the lettering. The back of the shirt said “Prisoner of AT$T” with several vertical stripes and bars above and below the letters. The shirt did not have the Union’s name on it. AT&T suspended, for one day, over 100 employees who wore the shirt and who regularly interacted with the public.

Board proceedings ensued and an NLRB ALJ decided that AT&T violated the Act by suspending the employees. In 2011, by a 2 – 1 decision, the Board affirmed the ALJ decision. The Board reasoned that the “special circumstances” doctrine allowing employers to restrict employees from wearing buttons or insignias at work “when the company reasonably believes the message may harm its relationship with its customers and its public image” was not applicable because the “prisoner” shirt was not likely to cause fear or alarm among AT&T customers.

In reversing that decision, in Southern New England Telephone Co. v. NLRB, the U.S. Court of Appeals for the D.C. Circuit started its opinion with:

Common sense sometimes matters in resolving legal disputes. This case is a good example. AT&T Connecticut banned employees who interact with customers or work in public – including employees who enter customers’ homes – from wearing union shirts that said “Inmate” on the front and “Prisoner of AT$T” on the back. Seems reasonable. No company, at least one that is interested in keeping its customers, presumably wants its employees walking into people’s homes wearing shirts that say “Inmate” and “Prisoner.”

In concluding that the Board’s decision failed to take into account the reasonable and practical conclusion that the message on the shirts was offensive and bound to undermine the company’s relationship with its customers, the Court restated, as it had in a previous case a few years earlier that “the Board’s expertise is surely not at its peak in the realm of employer-customer relations.” Because the Court of Appeals found that the special circumstances exception applied, the one-day suspensions were lawful.

Making the NLRB decision particularly head scratching was that just a few years prior to the events in this case there had been, according to The Hartford Courant, “possibly the most widely publicized crime in the state’s history,” involving a home invasion resulting in the murder of several members of a family.

I’d like to say that it’s a sorry state of affairs that a federal Court of Appeals has to rein in the activity of the NLRB that’s supposed to have expertise in enforcing the statute it’s charged with enforcing, but, of course, this is not the first time the D.C. Court of Appeals has had to step in to do so.

Whether Auto Dealer Service Writers (also called Service Advisors) are exempt from federal and state overtime pay requirements has been an issue for years. The U.S. Department of Labor (“DOL”) has flip-flopped on the issue since the exemption for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” was written into the Fair Labor Standards Act (“FLSA”) in 1966. The DOL’s latest position was set forth in 2011 when it issued a Final Rule amending the “salesman, partsman, mechanic” exemption that did not include Service Writers employed at a retail dealership as exempt. This was in contradiction to the DOL’s action in 2008, when it issued a Notice of Proposed Rulemaking in which it stated that it considered Service Writers to be exempt.

The Courts have not always agreed with the DOL’s interpretation of this exemption. The U.S. Courts of Appeals for the Fourth Circuit (which includes Maryland, as well as North Carolina, South Carolina, Virginia and West Virginia) and Fifth Circuit (covering Louisiana, Mississippi and Texas), several federal district courts, and the Supreme Court of Montana have found Service Writers exempt. Specifically, the Fourth Circuit in Walton v. Greenbrier Ford, Inc. found that Service Writers are “salesman” because their job is to sell services for cars, and because their role is to help customers receive mechanical work on their cars they are involved in the general business of “servicing automobiles.” The Fifth Circuit in Brennan v. Deel Motors, Inc. found the duties and pay structure of Service Writers to be functionally similar to those of salesman, partsman and mechanics whom the statute expressly exempts.

Just recently, however, the Ninth Circuit, in Navarro v. Encino Motorcars, LLC (March 24, 2015) disagreeing with the Fourth and Fifth Circuits, decided that it was required to defer to the DOL’s interpretation and ruled that an auto dealer’s service advisors did not fall within the FLSA’s “salesman, partsman, mechanic” exemption. Essentially the court said that, while there were good arguments supporting both interpretations of the exemption, where a regulatory agency, like the DOL, has chosen one interpretation, it must defer to that choice. The DOL’s view is the exemption is limited to salesmen who sell vehicles and partsman and mechanics who service vehicles. Service Writers do neither.

What does this mean for auto dealers in Mid-Atlantic? Ultimately this issue may wind its way to the Supreme Court. In the meantime, the Ninth Circuit decision is not controlling on federal district courts outside the Ninth Circuit, like Maryland. That may not be as comforting as it appears on first blush. The Fourth Circuit case was decided in 2004, well before the DOL’s 2011 Final Rule. Given that fact, and the reasoning of a well-regarded court like the Ninth Circuit, it’s entirely possible that the federal court in Maryland or the Fourth Circuit itself could reach a different conclusion than was reached in 2004.

We also note that the DOL is poised to issue proposed regulations that are intended to substantially revise and limit the FLSA white collar exemptions (executive, administrative and professional employees). Once issued, the public will have the opportunity to offer comments on the proposed regulations, and the DOL will then issue final regulations – a process that could take a year or more. Thus, although any impact of these regulations will not be immediate, auto dealers should keep in mind that further changes to service writers’ exemption status may be forthcoming.

FLSA compliance is a tricky area. Wage-hour litigation is a booming industry for plaintiffs’ lawyers. Now may be a good time to revisit your exemption classification decisions in order to stay ahead of current litigation trends.