Employment Law Blog

Janet L. Dhillon, Corporate Lawyer, New Chair of the EEOC

After a two-year delay, President Trump’s nominee, Janet L. Dhillon, has finally been sworn in as Chair of the U.S. Equal Employment Opportunity Commission (EEOC) in Washington, D.C.

Dhillon, 57, was first nominated by President Trump on June 29, 2017, to one of the Republican seats on the Commission. She finally was confirmed by the U.S. Senate on May 8 by a vote along partisan lines of 50-43. Her five-year term will extend until July 1, 2022.

With Dhillon’s swearing-in, the Commission regains the quorum that it had lost on January 3 following the departure of former commissioner Chai Feldblum. Dhillon joins Republican Victoria Lipnic, who has been Acting Chair, and Democrat Charlotte Burrows on the EEOC board. Two of the five commission seats remain vacant at present.

The five-member Commission requires at least three seats to be filled to make decisions on large lawsuits, major spending, and other important policy decisions.

Dhillon is an experienced corporate lawyer, having practiced law in the private sector for over 25 years. She has no experience working in the public sector or leading a government agency.

Prior to joining the EEOC, Dhillon served as General Counsel of Burlington Stores, Inc. Previously, she was General Counsel of JC Penney Company, Inc. and of US Airways Group, Inc. Dhillon’s husband of 34 years, attorney Uttam Dhillon, is currently working in the White House Counsel’s office on President Trump’s Compliance and Ethics team.

A two-year impasse had resulted in Congress over Dhillon’s nomination due to fears by liberals that she would change the EEOC’s position on lesbian, gay, bisexual, and transgender (LGBT) workplace rights. The Commission currently maintains that Title VII of the Civil Rights Act of 1964 prohibits job discrimination based on sexual orientation and gender identity—a stand that is at odds with the Department of Justice, and that Dhillon has declined to say she would continue. The U.S. Supreme Court is expected to render a decision in the near future on the issue.

Dhillon, a native of California, began her legal career at the New York City power law firm of Skadden, Arps, Slate, Meagher & Flom LLP, where she practiced for 13 years. She is a 1984 graduate of Occidental College, and the UCLA School of Law, both in Los Angeles. At UCLA Law, where she received the J.D. degree in 1991, she ranked first in her class of 322 students.

Democratic U.S. Senator Chris Van Hollen of Maryland was among those who opposed the Dhillon’s confirmation, saying that she “has spent her career protecting corporations that are accused of discrimination by their workers. … Ms. Dhillon’s nomination to chair the EEOC is yet another way that the Trump Administration keeps rigging the system for their corporate allies and stacking the deck against working people.” The NAACP also opposed the nomination, stating that “Janet Dhillon’s interests lie in protecting the interests of businesses, not in protecting or advancing workers’ rights.”

In contrast, many national business groups, including the U.S. Chamber of Commerce and the National Association of Restaurants, urged the Senate to confirm Dhillon.

The EEOC is the federal government agency that enforces federal anti-discrimination laws throughout the country. It’s also responsible for collecting and analyzing workforce data through the EEO-1 report, which currently collects demographic employee information, organized by race, sex, and ethnicity.

#####
About the author: Angel Castillo, Jr. is a partner with DLD Lawyers with many years of experience in counseling clients in employment law matters and representing them in litigation, arbitrations, and administrative agency proceedings.

May 16, 2019

Employers Required to Report Additional Pay Data by September 30, 2019

A federal judge has ordered private employers with one hundred or more employees to start reporting for the first time their employees’ W-2 annual earnings and hours worked. The new requirement is part of a government campaign to improve the enforcement of federal laws prohibiting pay discrimination.

The employers’ reports for 2018, reporting the pay data for workers of different sexes, races, and ethnicities, known as “Component 2,” will be due by September 30, 2019.

The Obama Administration had attempted to start requiring the collection of the data in 2016, but the following year the Trump Administration stayed the requirement indefinitely. The new reporting requirements were originally supposed to have gone into effect by the annual filing deadline in March 2018.

U.S. District Judge Tanya S. Chutkan of Washington, D.C. has now declared that the stay was illegal, and cleared the way for the U.S. Equal Employment Opportunity Commission (EEOC) to start collecting the employee data in order to determine and analyze nationwide pay disparities by race, sex, industry, occupational groupings, and Metropolitan Statistical Areas.

The judge, a 2011 Obama appointee, also ordered the EEOC to collect a second year of pay data from employers, giving the agency a choice – to be announced by May 3 — between collecting employers’ 2017 data or making it collect 2019 data down the road. The court’s order also applies to federal contractors with 50 or more employees.

Pursuant to Title VII of the Civil Rights Act of 1964, employers are required to make and keep records relevant to the determination of whether unlawful employment practices have been or are being committed, and produce reports as mandated by the EEOC. The Equal Pay Act of 1963, for example, prohibits sex-based wage discrimination between men and women in the same workplace who perform jobs “that require substantially equal skill, effort and responsibility under similar working conditions.”

Since 1966, the EEOC has required that employers with one hundred or more employees file with the agency the “Employer Information Report EEO-1” (“EEO-1”), which requires employers to report the number of individuals employed by job category, sex, race, and ethnicity. These reports, known as “Component 1,” are due by May 31 this year.

In 2010, the EEOC had joined other equal employment opportunity enforcement agencies in seeking to identify ways to improve enforcement of federal laws prohibiting pay discrimination, leading to the requirement of additional data reporting by employers in 2016.

However, on August 29, 2017, Neomi Rao, an official of the U.S. Office of Management and Budget (OMB), sent a memorandum to the EEOC stating that OMB had decided to initiate a review and stay of the EEOC’s new collection of pay data under Component 2. She stated that OMB was concerned that some aspects of the revised collection of information lacked practical utility, were unnecessarily burdensome, and did not adequately address privacy and confidentiality issues. Judge Chutkan rejected those explanations in vacating the stay, which she concluded had been “arbitrary and capricious.”

The judge’s decision, announced from the bench on April 25, came in a lawsuit filed on November 15, 2017, by two public interest advocacy organizations, the National Women’s Law Center and the Labor Council for Latin American Advancement. They argued that the stay of the data collection requirement had not complied with applicable laws, and that they needed the additional employee data to advance their missions by using the data in their publications and as part of their public education and advocacy campaigns.

Lawyers for the federal government told Judge Chutkan that the EEOC would rely on an outside data and analytics contractor — at a cost of $3-million — to perform the collection of data that employers will now be required to report to the EEOC.

According to the EEOC, its preferred method of identification for the race/ethnicity categorization of employment data is self-identification. Employers are required to attempt to allow employees to use self-identification to complete the EEO-1. If any employee declines to self-identify, employers may consult with employee-provided information when on-boarded, or the employer may use visual observation.

April 25, 2019

U.S. Labor Department Proposes New Overtime Pay Rule

The U.S. Department of Labor (DOL) has finally issued its long-awaited proposed replacement of the Obama administration’s prior and controversial overtime rule.

In a Notice of Proposed Rulemaking made public on March 7, the DOL proposes to increase the minimum salary threshold required for workers to qualify for the Fair Labor Standards Act’s “white collar” exemptions to $35,308 per year, up from the current $23,660.

An additional 1.3 million Americans who work more than 40 hours a week would become eligible for overtime pay under the new rule. This is a more modest expansion than the rule proposed by the Obama administration, which said at the time that its rule would cover about 4-million workers.

The new rule proposal will be subject to a public comment period, and the DOL anticipates that the proposed rule, once finalized, will become effective in 2020.

Under currently enforced law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime premium pay of at least 1.5-times their regular hourly rate of pay if they work more than 40 hours per week and are not exempt from overtime under the Fair Labor Standards Act. This salary level was set in 2004; when first enacted in 1938, the weekly salary level for exemptions was $30.00.

This new proposal would update the salary threshold using current wage data, projected to January 1, 2020. The result would boost the standard salary level from $455 to $679 per week (equivalent to $35,308 per year).

A $35,308 threshold is expected to leave out over half of the workers who would have been granted new or strengthened overtime protections under the Obama’s administration’s higher threshold.

The FLSA exemption from minimum wage and overtime pay requirements applies to executive, administrative, professional, outside sales, and computer employees, based on their actual work duties. These exemptions are often referred to as the FLSA’s “EAP” or “white collar” exemptions.

To be exempt from overtime pay requirements under the FLSA, employees must generally be paid on a salary basis at or above a specified minimum weekly salary level and meet certain requirements related to their primary job duties. Meeting the salary threshold doesn’t automatically make an employee exempt from overtime pay; the employee’s job duties also must primarily involve executive, administrative, or professional duties as defined by the regulations.

The Department also proposes to update the total annual compensation requirement for the “highly compensated employee” test, and to revise the special salary levels for employees in the motion picture industry and in certain U.S. territories, namely, Puerto Rico, the Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa.

The prior rule, which was blocked by a federal judge in Texas in 2016, had doubled the minimum salary required to qualify for the exemptions from $23,660.00 annually to just over $47,000.00.

The DOL is also asking for public comment over whether periodic automatic increases to the proposed new threshold should be part of the final rule as they were with the 2016 version.

It is difficult to predict the result of the new rule in the American workplace, since employers may opt to raise salary levels, reorganize workloads, adjust work schedules, or spread work hours in order to avoid payment of overtime pay.

The DOL estimates that an additional 2-million white collar workers who are currently nonexempt because they do not satisfy the EAP duties tests, and currently earn at least $455 per week but less than $679 per week, would have their overtime-eligible status strengthened in 2020 because these employees would then fail both the salary level and duties tests.

In considering the new proposed rule DOL received over 200,000 comments from a broad array of stakeholders, including small business owners, large companies, employer and employee associations, state and local governments, unions, higher education institutions, non-profit organizations, law firms, workers, and other interested members of the public. Several employers expressed concern that raising the standard salary level as high as $913 per week, as previously promulgated, could lead to significant costs for employers.

In announcing the new proposed rule DOL stated that, “The Department believes an update to the salary level tests is long overdue. Long periods between adjustments result in large changes in the salary levels to restore the appropriate relative position of the ‘dividing line’ between nonexempt and potentially exempt workers. The size and unpredictability of these changes in the past are challenging and costly to employers, because there are significant familiarization, adjustment, and managerial costs associated with infrequent updates.”

The proposed new rule, and a 219-page DOL analysis of its anticipated impact, may be read online at https://www.dol.gov/.

March 7, 2019

Three Strikes and Miami Beach Minimum Wage Law is Out

The dream of former Miami Beach Mayor Philip Levine that the city should have its own, higher minimum wage law has finally crashed and burned at the newly reconstituted Florida Supreme Court in Tallahassee.

By a 4-3 vote on August 29 last year, the justices had agreed to consider a discretionary appeal by Miami Beach in the minimum-wage case, and oral argument had been scheduled for March 6.

However, since then Florida’s new Republican governor, Ron DeSantis, took office on January 8 and appointed former appellate judges Barbara Lagoa and Robert Luck and former U.S. Department of Education General Counsel Carlos Muniz to the Supreme Court. The vacancies had resulted following the retirements in January of three longtime justices who left the court because of a mandatory retirement age. The newly constituted court may have a more conservative judicial philosophy.

In a 5-2 order issued on February 5, the court reversed its prior ruling and dismissed the Miami Beach appeal without a decision. Two of DeSantis’s new appointees, Lagoa and Muniz, were in the majority, while Luck dissented.

The Miami Beach City Commission had voted unanimously in June of 2016 to create a new citywide minimum wage proposed by then Mayor Levine that was higher than both the state and federal minimum wages.

The federal minimum wage is currently $7.25 an hour, while the Florida state minimum wage is now $8.46 an hour. The Miami Beach minimum wage was to have been set at $10.31 an hour, and then increased a dollar a year until 2021, when it was supposed to reach $13.31, a 65% increase. Business organizations, including the Florida Retail Federation, as well as the state of Florida, fought the ordinance in court, filing a lawsuit to seek to have the ordinance declared illegal.

In the initial courtroom battle, Miami-Dade County Circuit Judge Peter R. Lopez ruled on March 27 last year that the Miami Beach ordinance violated a 2003 Florida statute that prohibits municipalities from adopting their own minimum wage laws and was therefore invalid. Twenty-seven states prohibit local governments from enacting local minimum wages.

In Round 2, the city’s subsequent appeal was also decided against Miami Beach last December 13 by a unanimous three-judge panel of the Florida intermediate Third District Court of Appeal, which upheld the ruling by Judge Lopez.

“Section 218.077(2) of the Florida Statutes is a preemption statute that expressly prohibits political subdivisions of the state from establishing a minimum wage,” the appeal court concluded.

The Third District held unanimously that the Florida Constitution authorizes the state legislature to preempt municipal powers by statute. They also categorically rejected the city’s principal argument that Article X, Section 24 of the Florida Constitution, a citizen initiative approved by the state’s voters in 2004, had implicitly nullified the statute’s preemption provision and therefore the statute was unconstitutional.

Round 3 in Tallahassee was a strikeout for Miami Beach, putting an end to the legal battle.

“Upon further consideration,” the Supreme Court stated in its two-paragraph decision, “we exercise our discretion and discharge jurisdiction. Accordingly, we hereby dismiss this review proceeding.”

February 13, 2019

Florida Minimum Wage $8.46 in 2019

While the Federal minimum wage of $7.25 hasn’t moved in nearly a decade, several states and cities have set their own higher minimum wages, and many of those are planning increases in 2019. In the District of Columbia the new minimum wage is $14.00 an hour.

In Florida, the minimum wage is going up 21 cents effective on January 1, 2019 — to $8.46 an hour. Many economists believe that a minimum wage of $15.00 an hour is necessary to make ends meet in Florida.

Millions of U.S. workers will see increased pay in 2019 due to minimum-wage increases in 20 states and 21 cities.

Eight states — Arizona, California, Colorado, Maine, Massachusetts, Missouri, New York, and Washington State— are phasing in increases that will eventually put their minimum wages at $12 to $15 an hour.

In addition, 13 cities and counties are increasing their minimum wages to $15.00 an hour or higher in the new year.

On January 1, New York City’s new minimum hourly wage goes from $13.00 to $15.00 for businesses with 11 or more employees.

The state wage hikes range from an extra nickel per hour in Alaska to a $1-an-hour bump in Maine and Massachusetts and for California employers with more than 25 workers.Seattle’s largest employers will have to pay workers at least $16.00 an hour.

December 30, 2018

EEOC Reports Increase in “#MeToo”-inspired Sexual Harassment Complaints

The “#MeToo” national wave of women’s sexual harassment complaints has left a noticeable mark on the workload of the U.S. Equal Employment Opportunity Commission.

Charges filed with the EEOC regarding sexual harassment by both men and women alleging workplace discrimination increased by 13.6 percent during fiscal year 2018, which ended on September 30, over the previous year. There were 7,609 such charges filed in 2018 compared to 6,696 in 2017. It was the first time in a decade that the EEOC registered a year-to-year increase in the number of employment sexual harassment complaints. The statistics have been updated from prior numbers released by the agency in October.

The EEOC reported the increase on October 4, near the one-year anniversary of the New York Times and New Yorker Magazine Pulitzer Prize winning articles that took down Hollywood film producer Harvey Weinstein and galvanized support for the #MeToo movement. The two publications first reported a year ago that dozens of women had accused Weinstein of rape, sexual assault, and sexual abuse over a period of at least 30 years. More than 80 women in the film industry later also accused Weinstein of such acts. On May 25, 2018, Weinstein, 66, was arrested in New York City, charged with rape and other offenses, and released on bail while awaiting trial.

The EEOC itself filed 66 harassment lawsuits in 2018 against employers, including 41 that included allegations of sexual harassment. That number reflects more than a 50 percent increase in suits challenging workplace sexual harassment in the courts over fiscal year 2017.

The EEOC recovered nearly $70-million for the victims of sexual harassment through litigation and administrative enforcement in FY2018, up from $47.5-million in FY2017.

Acting EEOC Chair Victoria Lipnic said the agency had “stepped up to the heightened demand of the #MeToo movement to make clear that workplace harassment is not only unlawful, it is simply not acceptable.”

The EEOC’s training program, “Respectful Workplaces,” which teaches skills for employees and supervisors to promote and contribute to respect in the workplace, has been in high demand since it was launched in October 2017. Over 9,000 employees and supervisors in the private, public, and federal sector work forces participated in the EEOC trainings during FY2018. An additional 13,000 employees participated in EEOC’s anti-harassment compliance trainings.

The EEOC is the federal government agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), or disability or genetic information.

October 10, 2018

Miami Beach Minimum Wage Law Goes to Florida Supreme Court

The Florida Supreme Court has agreed in a split decision, by a 4-3 vote, to decide the City of Miami Beach’s second appeal of a lower court’s decision declaring invalid the city’s proposed local minimum wage law.

Florida Supreme Court Justices Barbara J. Pariente, R. Fred Lewis, Peggy A. Quince, and Jorge Labarga voted on August 29 in favor of considering the appeal. Chief Justice Charles T. Canady and Justices Ricky Polston and Alan Lawson dissented.

Miami Beach will have to serve its initial appeal brief by Sept. 18 and the state of Florida and various business groups opposing the wage law will have 20 days to respond with their own briefs.

The Miami Beach City Commission had voted unanimously in June of 2016 to create a new citywide minimum wage proposed by then Mayor Philip Levine that was higher than both the state and federal minimum wages.

The federal minimum wage is currently $7.25 an hour, while the Florida state minimum wage is now $8.25 an hour. Starting on Jan. 1, 2018, the Miami Beach minimum wage would have been set at $10.31 an hour, and then increased a dollar a year until 2021, when it was supposed to reach $13.31, a 65% increase.

However, the Florida Retail Federation, the Florida Chamber of Commerce, and the Florida Restaurant & Lodging Association, among other business groups, took the city to court, arguing that the wage ordinance violated state law, and the state of Florida intervened in their support.

On March 27 last year Miami-Dade County Circuit Judge Peter R. Lopez ruled that the Miami Beach ordinance violated a 2003 Florida statute that prohibits municipalities from adopting their own minimum wage laws and was therefore invalid.

The city’s subsequent appeal was then decided against Miami Beach last December 13 by a three-judge panel of the Florida intermediate Third District Court of Appeal, which upheld the ruling by Judge Lopez.

“Section 218.077(2) of the Florida Statutes is a preemption statute that expressly prohibits political subdivisions of the state from establishing a minimum wage,” the appeal court concluded.

First Assistant City Attorney Robert F. Rosenwald Jr. said that Miami Beach was “thrilled” the Florida Supreme Court has accepted the case.

August 31, 2018

EEOC: Age Discrimination in Hiring Remains a Significant Barrier for Older Workers

Fifty years after Congress prohibited discrimination in the workplace on the basis of age, more than three-fourths of older American workers surveyed have reported that their age was an obstacle in getting a job.

Six out of every 10 older workers have seen or experienced age discrimination in the workplace, and 90 percent of those say it is common. African Americans/Blacks report much higher rates of having experienced age discrimination or knowing someone who had, at 77 percent, compared to 61 percent for Hispanics/Latinos, and 59 percent for Whites. More women than men also say older workers face age discrimination.

These are among the findings of a report issued on June 25 by Victoria A. Lipnic, Acting Chair of the U.S. Equal Employment Opportunity Commission (EEOC), on the State of Older Workers and Age Discrimination 50 Years After the Age Discrimination in Employment Act (ADEA) of 1967. The ADEA is a federal statute that was enacted to prevent and stop arbitrary discrimination against employees over 40 years of age, and it requires employers to consider individual ability, rather than assumptions about age, in making an employment decision.

The EEOC is the federal agency charged with enforcing federal laws against discrimination in private sector employment, and since 1979 it enforces the ADEA, previously under the jurisdiction of the U.S. Labor Department.

“As of this month, the nation is experiencing its lowest unemployment rate in 18 years,” Ms. Lipnic noted. “But age discrimination remains a significant and costly problem for workers, their families, and our economy.”

Throughout the history of its ADEA litigation program, many of the EEOC’s major ADEA cases have focused on discriminatory reductions-in-force, denial of benefits, and mandatory retirement policies. In the past decade, the EEOC has also focused on challenging discriminatory hiring policies, both individual and systemic.

The Lipnic Report notes that both the age and diversity of the U.S. workforce has increased considerably over the past decades and will continue to increase in the coming decade. Since 2000,the participation rate of both women and men age 55 and older in each of the four-major race and ethnicity groups — Black, White, Hispanic, and “Asian and other” — has increased. The percentage of the labor force age 55 and older consisting of racial and ethnic minorities has grown substantially, and is expected to continue to do so into the next decade.

Today, according to the Report, more than 42 percent of older workers are in management, professional, and related occupations, a somewhat higher proportion than that for all workers. Thirty-six percent of older workers are engaged in blue-collar work. Workers age 65 and older are in part-time jobs at more than double the rate of younger workers, but they are increasingly seeking and obtaining full-time employment. Finally, an increasing number of older workers are self-employed; the rate of self-employment is much higher for older than for younger workers.

According to Ms. Lipnic, “Unfounded assumptions about age and ability continue to drive age discrimination in the workplace. Most people have specific negative beliefs about aging and most of those beliefs are inaccurate. These stereotypes often may be applied to older workers, leading to negative evaluations and/or firing, rather than coaching or retraining.”

“Decades of social science research document that age does not predict one’s ability, performance, or interest,” according to the Lipnic Report. “Aging and its effect on cognitive abilities is highly individualized, as ability, agility and creativity vary widely among people of the same age. Many older people out-perform or perform as well as young people, and intellectual functions can actually improve with age.”

The largest and most recent field study of age discrimination in hiring was conducted in 2015 and involved over 40,000 applications for over 13,000 jobs in 12 cities across 11 states. It found evidence of age discrimination against both men and women, with older applicants — those age 64 to 66 years old — more frequently denied job interviews than middle-age applicants age 49 to 51. Women, especially older women but also those at middle age, were subjected to more age discrimination than older men. Older women often experience both age and sex discrimination in the workplace.

Age discrimination can also result in significant monetary costs for employers. The largest ADEA suit to date, Arnett v. California Public Employees’ Retirement System, settled for $250 million. Sprint Nextel settled an ADEA collective action for $57.5 million, and an age discrimination lawsuit brought by older workers at the Livermore National Laboratory settled for $37.5 million in 2015. The EEOC resolved its own lawsuits involving mandatory retirement policies against Johnson & Higgins for $28.1 million and against Sidley and Austin for $27.5 million. The 3M company resolved three-related ADEA lawsuits for $15 million, and recent EEOC cases challenging age discrimination in hiring against Texas Roadhouse settled for $12 million and against Seasons 52 Restaurants for $2.85 million.

Today, every state except South Dakota has a law prohibiting age discrimination in the workplace. In Florida, the Civil Rights Act of 1992 prohibits age discrimination in employment without setting a 40-year-old threshold. The Florida statute makes it unlawful for employers to discharge or to fail or refuse to hire any individual, or otherwise to discriminate against any individual with respect to compensation, terms, conditions, or privileges of employment, because of such individual’s age.

Ms. Lipnic’s Report recommends that in order to prevent age discrimination, employers include age in diversity and inclusion programs and efforts. A study by PriceWaterhouseCoopers found that 64 percent of firms surveyed in 2015 had diversity and inclusion strategies, but only 8 percent of those included age.

“Experts also recommend an assessment of interviewing strategies to avoid age bias,” the Lipnic Report observes, “as studies and experience show that interviewers tend to favor job candidates who remind them of themselves. An age-diverse interview panel for prospective employees may be viewed more positively by candidates and may be less vulnerable to implicit bias. Training interviewers as to how to frame age-neutral questions and using a standard or structured process can help avoid age bias throughout the interview process.”

“The ADEA,” the Lipnic Report concludes, “has helped to bring equality and fairness to the workplace for older workers. But age discrimination persists based on outdated and unfounded assumptions about older workers, aging and discrimination. No one should be denied a job based on stereotypes and it’s time to put these outdated assumptions to rest. Ability, experience, and commitment matter, not age. To achieve the promise of the ADEA, it’s time to recognize the value of age diversity in the workplace and the benefits of a multi-generational workforce.”

The full Lipnic Report is available free online at the EEOC’s website.

June 26, 2018

Supreme Court Approves Class Action Waivers in the Workplace

In a much awaited decision, the United States Supreme Court has decided, by a 5-to-4 vote, that employment agreements requiring out-of-court private arbitration of workplace wage disputes, and prohibiting group class lawsuits in court, are valid and enforceable.

More than half of private-sector employers have mandatory arbitration procedures, and 30 percent of these include class action waivers, the Economic Policy Institute, a Washington, D.C. think tank, reported in a study last year. Under typical mandatory arbitration agreements, workers whose rights are violated can’t pursue their claims in court but must submit to one-by-one arbitration procedures that according to the Institute overwhelmingly favor employers.
These agreements are usually presented to employees on a “take it or leave us” basis by their employers.

Trump appointee Neil Gorsuch wrote the majority opinion issued on May 21, joined by Chief Justice John Roberts Jr. and Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito Jr. Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan dissented.

The court’s decision overruled an Obama-era decision issued in 2012 by the National Labor Relations Board. In the D.R. Horton case, the Board had decided that employment agreements that require employees to use arbitration for all work-related disputes and prohibited class actions interfered with employees’ right to engage in concerted activities under the National Labor Relations Act (NLRA), and thus were illegal. That decision by the Board had reversed
77 years of contrary precedent. Once in office President Trump sought to nullify the Board’s pro-employee ruling.

The 61-page decision — including a lengthy dissenting opinion — in Epic Systems Corp. v. Lewis came in a trio of cases from three different federal circuit courts of appeals decided jointly. Two of the lower court opinions had ruled in favor of the employees. The cases all involved employee claims for wages under the federal Fair Labor Standards Act (FLSA), and efforts to assert class actions joining other affected employees in the same court case.

The majority held that the Federal Arbitration Act requires courts to enforce agreements to
arbitrate, including the terms of arbitration that the parties — employers and employees — select. The Act declares arbitration agreements to be “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”

“The NLRA secures to employees rights to organize unions and bargain collectively,” Justice Gorsuch wrote, “but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum. … The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written.”

In dissent, Justice Ginsburg wrote that “by joining together with others similarly circumstanced,
employees can gain effective redress for wage underpayment commonly experienced.” She called the majority’s decision “egregiously wrong.” She compared the current employment arbitration agreements to the “yellow-dog” contracts (now illegal) used by employers at the end of the 19th century and the beginning of the 20th requiring employees to agree as a condition of employment not to join labor unions.
In the view of the four dissenting justices, the NLRA’s protection of employees’ rights “to engage in other concerted activities for the purpose of . . . mutual aid or protection” should also protect their right to litigate their wage claims in court as class actions. Any conflict between the Federal Arbitration Act and the National Labor Relations Act should be resolved in favor of the latter, they opined.

In response to the dissenters, Justice Gorsuch, a strict constructionist, called the comparison to “yellow contracts” an “apocalyptic false alarm. … Our decision does nothing to override Congress’s policy judgments. As the dissent recognizes, the legislative policy embodied in the NLRA is aimed at ‘safeguard[ing], first and foremost, workers’ rights to join unions and to engage in collective bargaining.’ Those rights stand every bit as strong today as they did yesterday.”

May 21, 2018

Gay Rights Advocates Score an Important Win in a Federal Appeals Court

In a major victory for gay rights advocates, an influential federal appeals court has decided that the principal federal law against employment discrimination protects gay as well as heterosexual employees.

The federal Circuit Court of Appeals for the Second Circuit, based in Manhattan, decided in the case of Zarda v. Altitude Express, Inc. on February 26 that Title VII of the 1964 Civil Rights Act protects gays — even though the statute itself does not say so. Title VII states that employment discrimination is prohibited on the basis of “sex,” and most federal appeals courts in the past have ruled that “sex” means biological gender, not sexual orientation or preference. In fact, in a footnote the en banc Zarda majority opinion states that “This opinion assumes [for the sake of argument] that ‘sex’ in Title VII means biologically male or female.”

The Second Circuit decision is especially significant because it was decided by the entire membership of the court, all 13 judges sitting “en banc” to decide the issue, something that happens very infrequently and only on issues of major importance. As if to underscore the complexity of the issues involved, the judges filed eight separate opinions totaling 163 pages, including three dissents.

The Second Circuit majority ruled in favor of the estate of a deceased skydiving instructor named Donald Zarda, who had claimed that he was fired from his job by his employer, Skydive Long Island, after telling a client that he was gay. The employer said it had fired Zarda because during the summer of 2010 a female student had complained that during a tandem skydiving jump in Long Island Zarda had groped her. In such tandem skydives the instructor is strapped hip‐to‐hip and shoulder‐to‐shoulder with the client while jumping out of an airplane with parachutes.

The U.S. Equal Opportunity Commission, a federal agency that enforces most federal laws against discrimination, had held in 2015 that the prohibition against gender discrimination in Title VII of the Civil Rights Act of 1964 extended to sexual orientation. However, the courts have not widely adopted the agency’s interpretation, and the U.S. Supreme Court has yet to weigh in with its own decision.

The Atlanta-based Eleventh Circuit Court of Appeals, which covers Florida, decided last year in a divided ruling in the case of Jameka Evans v. Georgia Regional Hospital that sexual orientation is not protected by Title VII. In contrast, the Chicago-based Seventh Circuit decided, also last year, by an 8-3 en banc decision in the case of Hively v. Ivy Tech Community College, that such rights do exist under the federal statute. The divergent views on the issue were demonstrated when in appeal briefs filed with the Second Circuit in the Zarda case, the EEOC argued that gays were protected by Title VII, while another agency of the Trump Administration, the U.S. Justice Department, argued that they were not.

Chief Judge Robert A. Katzmann wrote for the Zarda majority: “Because Congress could not anticipate the full spectrum of employment discrimination that would be directed at the protected categories, it falls to courts to give effect to the broad language that Congress used.”

“Title VII’s prohibition on sex discrimination applies to any practice in which sex is a motivating factor,” Judge Katzmann wrote. “Sexual orientation discrimination is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted, making it impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account.”

In dissent, Judge Gerard E. Lynch wrote that there is no interpretation of the text that would show that Congress included protections for gay men and women when it enacted Title VII. “The Civil Rights Act [of 1964] as a whole was primarily a product of the movement for equality for African-Americans,” he noted, and the word “sex” was added to the law at the insistence of women’s rights groups. “Discrimination against gay women and men … was not on the table for public debate. … there was no discussion of sexual orientation discrimination in the debates on Title VII of the Civil Rights Act. … By prohibiting discrimination against people based on their sex, [the Act] did not, and does not, prohibit discrimination against people because of their sexual orientation. ”

Lynch added, however, “Speaking solely as a citizen, I would be delighted to awake one morning and learn that Congress had just passed legislation adding sexual orientation to the list of grounds of employment discrimination prohibited under Title VII of the Civil Rights Act of 1964.”

U.S. Attorney General Jeff Sessions criticized the decision as being wrong about Title VII’s reach. “I guess maybe the judges woke up that morning, read the New York Times or something, and decided their previous ruling was wrong,” he told a group of state attorneys general in Washington, D.C. on the day after the ruling was published.

Zarda had filed his lawsuit in September of 2010, but while it was pending he was killed in a BASE parachute jump in Sex Rouge, Switzerland, on October 3, 2014, at age 44. A native of Missouri, Zarda had lived in Dallas for 14 years before moving to New York. An airplane pilot, Zarda also engaged in BASE jumping as a member of an elite group of wingsuit athletes.

At the trial level U.S. District Judge Joseph F. Bianco in Central Islip, New York, had dismissed Zarda’s Title VII claim on summary judgment, finding that Title VII did not prohibit discrimination based on sexual orientation, and that decision was upheld by a three-judge panel of the Second Circuit. The new en banc decision reverses both of those prior rulings and allows the suit to continue, now in the name of Zarda’s Estate. Two of the judges who had ruled against Zarda in the earlier three-judge panel decision, Dennis Jacobs and Robert D. Sack, voted in his favor this time, while the third, Judge Lynch, wrote the principal dissenting opinion.

Since Congress has shown no interest in amending Title VII to protect gays, the legal environment will remain murky until the U.S. Supreme Court tackles the subject. And that may not happen anytime soon. Just last December the Court declined to review the Eleventh Circuit’s ruling in the Jameka Evans case that Title VII did not protect gay rights. In that case the Circuit Court had affirmed the dismissal of a lesbian security guard’s allegations that a Georgia hospital had violated her rights under Title VII by firing her over her sexuality.

However, if not settled out of court by the parties, the Zarda litigation may well reach the Supreme Court in the not too distant future and provide another opportunity for the justices to construe the extent of Title VII’s protections in the workplace. Whether the Court would take up that case is anybody’s guess.

February 26, 2018

Should Customer Tips Belong to Employers Rather Than to Servers and Bartenders?

Should restaurant wait staff and bartenders get to keep customer tips — or should the tips belong instead to their employers?

Under current law the employees get to keep the tips, but under President Trump the United States Department of Labor (DOL) is considering a proposed new rule reversing existing practice. If a proposed new rule goes into effect, bartenders and servers could face a substantial pay cut. The proposed new rule would rescind a 2011 rule amending the agency’s interpretation of the Fair Labor Standards Act. The new rule would allow restaurant owners to keep all of the tips left by customers—without the customers’ knowledge or consent—as long as the restaurants pay their wait staff and bartenders at least the minimum wage, currently $8.25 an hour in Florida.

A new report by the National Employment Law Project (NELP) and Restaurant Opportunities Center United (ROC), both New York-based employee advocacy organizations, shows that servers and bartenders depend on tips for more than half of their earnings, with the median share of hourly earnings from tips accounting for 58.5 percent of wait staff’s earnings, and 54 percent of bartenders’ earnings.

The national median monthly tip earnings for wait staff and bartenders is $867.00. On an annual basis, servers and bartenders have median earnings of $19,990 and $20,800, respectively, according to a Bureau of Labor Statistics survey of employers that measured employment and wages.

The U.S. Census Bureau’s current population survey by the Economic Policy Institute and the University of California-Berkeley found that even including tips the national median hourly earnings for waiters and bartenders are just $10.11, only $2.86 above the current federal wage minimum of $7.25.

Black workers in these occupations have a national median hourly wage of $9.62, including tips, and Latino workers earn $9.93—suggesting that taking gratuities away from tipped workers will greatly impact workers of color and their families, according to the report.

“The Trump administration’s proposed rule undermines decades of federal and state law and precedent that protects tips as the property of workers, not their employers,” said Teofilo Reyes, national research director of Restaurant Opportunities Centers United and report co-author. “Our research shows that allowing employers to take control of their employees’ tips would lead to greater financial instability and poverty. We also know that tip instability leads to greater sexual harassment for America’s restaurant workers. This rule would only serve to keep all restaurant workers’ wages low and let customer tips make up the difference.”

The DOL has suggested that restaurant owners might use tips to give their workers more hours of work, at a lower effective wage, or to subsidize wages for back-of-the-house non-tipped employees, but it acknowledges that employers could use the tips in any manner they see fit, such as for capital improvements, the report said. The DOL says that its proposal would help decrease wage disparities between tipped and non-tipped workers such as restaurant cooks and dish washers.

“A standard economic analysis found that $5.8-billion will be transferred from workers directly to employers as a result of this rule,” according to the report.

After lawmakers and workers’ advocates called on the Department of Labor to give stakeholders more time to weigh in, the agency extended the original deadline for comments on its proposal to let hospitality employers redistribute workers’ tips if they pay at least minimum wage.

The DOL will accept comments on its proposed new rule until February 5. So far the Department has received almost 110,000 comments.

January 12, 2018

Florida Reemployment Tax Rate to Remain at its Lowest in 2018 for Third Year in a Row

Florida businesses will continue to pay a low rate for reemployment taxes next year for the third year in a row.

The minimum tax rate will remain at $7.00 per employee in 2018. More than 60 percent of Florida’s employers will pay the minimum tax rate, which is the highest number of employers at the lowest reemployment tax rate since 2004, according to Florida Governor Rick Scott.

The $7.00 per employee minimum tax rate for 2018 is down from a high of $120.80 per employee in 2012. Since 2012, Florida businesses have had their reemployment tax reduced by more than 94 percent, resulting in a savings of more than $4.9 billion, said Scott.

“By keeping the reemployment tax low, we are putting more money back into the hands of job creators so they can invest in their businesses,” Governor Scott said. “This continued low rate is another example of the steps we are taking to make Florida number one in the nation for job growth and opportunities.”

Florida businesses pay the reemployment tax as a percentage of the first $7,000.00 in wages they pay each employee. Reemployment taxes, or taxes on payroll, fund Florida’s Reemployment Assistance Trust Fund, which provides income assistance (formerly known as unemployment benefits) to Floridians who lose their jobs through no fault of their own.

December 15, 2017

Time to Update Florida Minimum Wage Poster for 2018 – up to $8.25 an hour

Florida’s state minimum wage rises 15 cents to $8.25 an hour on January 1, 2018, an increase from $8.10 an hour this year

Florida law requires the Florida Department of Economic Opportunity to calculate a minimum wage rate each year. The annual calculation is based on the percentage increase in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers in the South Region for the 12-month period prior to September 1, 2017.

The Florida minimum wage applies to all employees in the state who are covered by the federal minimum wage, which is currently $7.25 an hour. Employers must pay their employees the hourly state minimum wage for all hours worked in Florida.

An employer may not retaliate against an employee for exercising his or her right to receive the minimum wage. Employees who are not paid the minimum wage may bring a civil action against the employer or any person violating Florida’s minimum wage law. The state attorney general may also bring a court action to enforce the minimum wage.

Florida Statutes require employers who must pay their employees the Florida minimum wage to post a minimum wage notice in a conspicuous and accessible place in each establishment where these employees work. This poster requirement is in addition to the federal requirement to post a notice of the federal minimum wage.

Florida’s minimum wage poster is available for downloading free of charge in English, Spanish, and Creole from the Florida Department of Economic Opportunity’s website at: http://www.floridajobs.org/docs/default-source/2018-minimum-wage/poster-fl_minwage2018.pdf?sfvrsn=2

December 15, 2017

Miami Beach Minimum Wage Ordinance Held Invalid by a Second Court

Miami Beach’s audacious effort to give the city its own minimum wage law has crashed and burned in court for a second time, in an appeal.

The Miami Beach City Commission had voted unanimously last year to create a new citywide minimum wage proposed by Mayor Philip Levine that was higher than both the state and federal minimum wages.

The federal minimum wage is currently $7.25 an hour, while the Florida state minimum wage is $8.10 an hour. Starting on Jan. 1, 2018, the Miami Beach minimum wage would have been set at $10.31 an hour, and then increase a dollar a year until 2021, when it was supposed to reach $13.31, a 65% increase.

However, the Florida Retail Federation, the Florida Chamber of Commerce, and the Florida Restaurant & Lodging Association, among other business groups, took the city to court in December last year, arguing that the wage ordinance violated state law, and the state of Florida intervened in their support. On March 27 this year Miami-Dade County Circuit Judge Peter R. Lopez ruled that the Miami Beach ordinance violated a 2003 Florida statute that prohibits municipalities from adopting their own minimum wage laws and was therefore invalid.

The city’s appeal has now been decided against Miami Beach by a three-judge panel of the Florida intermediate Third District Court of Appeal, which upheld the ruling by Judge Lopez.

“Section 218.077(2) of the Florida Statutes is a preemption statute that expressly prohibits political subdivisions of the state from establishing a minimum wage,” the appeal court concluded.

The appellate judges — Norma Lindsey, Kevin Emas, and Edwin A. Scales III — held unanimously on December 13 that the Florida Constitution authorizes the state legislature to preempt municipal powers by statute. They also categorically rejected the city’s principal argument that Article X, Section 24 of the Florida Constitution, a citizen initiative approved by the state’s voters in 2004, had implicitly nullified the statute’s preemption provision and therefore the statute was unconstitutional.

“It is clear,” the appeal court observed in an opinion authored by Judge Scales, “that the relevant provision of the [constitutional] amendment contains no language expressly nullifying or limiting the statute’s preemption provision.”

Miami Beach, however, is not conceding defeat, and is going to seek another, higher appellate review.

“We are disappointed with the decision, but we have always known that the Florida Supreme Court would ultimately have to decide this case,” said Miami Beach City Attorney Raul J. Aguila. “We will immediately seek review in that court, and we are optimistic that the justices will accept the case and rule in our favor.”

December 14, 2017

State Approves a 9.8% Decrease to Florida’s Workers’ Compensation Insurance Premiums for Employers

State Insurance Commissioner David Altmaier has ordered a 9.8 percent decrease in the premiums that private employers pay for workers’ compensation insurance for their employees.

The new rates will apply to both new and renewal workers’ compensation insurance policies effective in Florida as of January 1, 2018.

“The Office will continue to monitor the marketplace and support reforms that provide additional cost savings for Florida’s businesses,” said Altmaier.

“Florida’s job creators will no doubt appreciate this significant cost savings, a step that will support our state’s growing economy,” said Florida’s Chief Financial Officer Jimmy Patronis. “I’m pleased to see the cost of business going down, and as the Legislature looks at our workers’ compensation system, I will be working with them on proposals to lock in these lowering rates.”

The National Council on Compensation Insurance, Inc. (NCCI) received the rate decrease approval on November 9 from the Florida Office of Insurance Regulation. The NCCI rate filing had been pending since August 28.

The rate decrease is expected to assist small businesses in being able to afford workers’ compensation insurance, lessening the number of employers that do not carry such insurance for their employees. Workers’ Compensation insurance provides medical and income benefits for employees who are injured in the course of their work-related activities.

December 11, 2017

New I-9 Form Must be Used by Employers Starting September 18, 2017

Employers are required to use the new version of the Form I-9 (dated 07/17/17) for all new employees beginning on Sept. 18, 2017. Although the changes to the Form I-9 are minimal, failure to use the new form can result in significant fines.

The new form, provided by the United States Citizenship and Immigration Services (SCIS), has a printed expiration date of Aug. 31, 2019. Employers should not complete new forms for current employees. Current storage and retention rules have not changed.

Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the United States. All U.S. employers must ensure proper completion of Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens alike. Both employees and employers (or authorized representatives of the employer) must complete the form. The new version renumbers all “List C” documents except the Social Security card.

On the form, an employee must attest to his or her employment authorization. The employee must also present his or her employer with acceptable documents evidencing identity and employment authorization. The employer must examine the employment eligibility and identity document(s) that an employee presents to determine whether the document(s) reasonably appear to be genuine and to relate to the employee and record the document information on the Form I-9.

The list of acceptable documents (passports, etc.) can be found on the last page of the form. Employers must retain Form I-9 for a designated period (either for three years after the date of hire or for one year after employment is terminated, whichever is later) and make it available for inspection by authorized government officers.

The new form, a new 15-page set of instructions for the form, and an updated Handbook for Employers, a valuable resource for those handling Form I-9 issues, are available for reading and downloading free of charge on the USCIS online website at https://www.uscis.gov/i-9.

September 17, 2017

President Trump Scraps Obama Rule That Would Have Required More Gender, Race, And Ethnicity Pay Data To Be Collected

In one of a continuing series of actions moving away from the prior administration’s labor law policies, President Trump has canceled a requirement that employers provide the federal government additional gender, race, and ethnicity information about their compensation practices.

The Obama Administration had approved a new policy on September 29, 2016, requiring employers with 100 or more employees, and federal contractors with 50 or more employees, to collect and report data to the federal Equal Employment Opportunity Commission (EEOC) about how much they pay workers of different genders, races, and ethnic groups. The rule, which never took effect, was announced as seeking to remedy perceived pay disparities and pay discrimination in the workplace.

President Trump agreed with business leaders and elected Republican officials who had complained that the new requirement would be onerous and expensive for employers to comply with.

Ivanka Trump, who is serving as an unpaid adviser to her father in the White House, said in a statement that the proposed new Obama reporting requirement “would not yield the intended results. We look forward to continuing to work with EEOC, OMB, Congress and all relevant stakeholders on robust policies aimed at eliminating the gender wage gap.”

The Office of Management and Budget (OMB), in a memorandum to the EEOC dated August 29, stated that it was “concerned that some aspects of the revised collection of information lack practical utility, are unnecessarily burdensome, and do not adequately address privacy and confidentiality issues.”

The expanded reports, called EEO-1s, would have been due on March 31, and were expected to cover about 60,000 employers and 63 million employees throughout the United States. The updated form would have grouped workers in ten categories, from service employees to managers, to executives. It would have also aggregated them into 12 wage bands, from about $19,000 a year to $208,000 and higher.

The EEOC had projected employers’ compliance costs to be about $54-million and to require about 1.9 million hours of staffing time. But a survey conducted by the U.S. Chamber of Commerce estimated the employers’ costs at $400-million and about 8 million hours.

Republican Senators Virginia Foxx of North Carolina and Bradley Byrne of Alabama issued a joint statement expressing relief at the OMB’s decision to pause and take a fresh look at the expanded data collection policy. The Obama-era changes “simply didn’t make sense” and didn’t actually combat pay discrimination, they said. “That’s why we were concerned when the EEOC spent its time and resources creating a convoluted reporting regime instead of addressing an unacceptable backlog of unresolved discrimination charges.”

Fatima Goss Graves, president and chief executive of the National Women’s Law Center, said the policy about-face contradicts President Trump’s claim that he wants prosperity for every American. “It’s not enough to say ‘equal pay,’ ” Grave said. “It matters what policies you stand behind.”

Proponents of the Obama proposal had defended it on the grounds that it would have created an evidence-based foundation on which to address pay discrimination through federal legislation. Jenny R. Yang, an Obama appointee and former chairwoman of the EEOC, said when the rules were drafted that, “Having pay data in summary form will help us identify patterns that may warrant further investigation.”

The EEOC may continue to use the previously approved EEO-1 form to collect employers’ data on race/ethnicity and gender during the review and stay of the proposed new rule.

Acting EEOC Chair Victoria Lipnic cautioned that businesses are still bound by their previous reporting requirements, and that the agency is not softening its focus on pay discrimination. Component 1 of the EEO-1 forms is still in effect and employers must still file it by March 31, 2018. That component seeks demographic data on race, gender, and ethnicity by job category that employers have long been required to report.

Lipnic said that the OMB’s decision won’t do anything to lessen the EEOC’s commitment to fighting wage inequity. She noted the agency “has been in the business of doing this for 50 years” and has brought numerous such enforcement actions in recent years under both the Equal Pay Act and Title VII. “Our enforcement [will] go forward,” Lipnic said. “It’s a high-priority area for the commission to focus on.”

Ms. Lipnic, an Obama appointee, was named Acting Chair of the EEOC by President Trump on January 25, 2017.

August 31, 2017

Florida Workers’ Compensation Premiums Going Up By 14.5%

Florida employers should expect a 14.5 percent increase in their workers’ compensation insurance premiums based on a new appellate court decision.

The increase should become effective soon, unless another appeal is filed with the state Supreme Court.

Florida’s First District Court of Appeal in Tallahassee approved the increase on May 9 after, by coincidence, the state Legislature adjourned without taking any action on the issue.

The appeal court issued its ruling in two consolidated appeals, National Council on Compensation Insurance v. James F. Fee, Jr. It reversed a decision by Leon County Circuit Judge Karen A. Gievers that had invalidated the 14.5 percent increase.

The 14.5 percent rate increase was approved by the Office of Insurance Regulation (OIR) and State Insurance Commissioner David Altmaier in October last year. The approved increase was lower than the 19.6 percent hike originally requested by the National Council on Compensation Insurance (NCCI).

OIR regulates all insurance activities in Florida, including all activities relating to workers’ compensation insurance. Insurance companies writing workers’ compensation insurance policies in Florida must seek approval from OIR when setting or changing insurance rates by filing a rate proposal. OIR reviews filings seeking a rate change to determine if the proposed rate, under the Florida Statutes, is “excessive, inadequate, or unfairly discriminatory . . . in accordance with generally accepted and reasonable actuarial techniques.” NCCI compiles data regarding the loss, expense, and claims experience of workers’ compensation insurance carriers.

NCCI had announced in May last year that, as a consequence of the Florida Supreme Court’s decision in Castellanos v. Next Door Company, issued on April 28, 2016, premiums would have to be increased significantly. That decision had declared unconstitutional a statutory cap on claimants’ attorneys’ fees in workers’ compensation cases. Of the 14.5 percent rate increase, 10.1 percent was attributed specifically to the Castellanos decision.

The new appeal decision resulted from a lawsuit filed by James F. Fee, Jr., a Miami attorney whose law firm purchases workers’ compensation insurance, who claimed that NCII had engaged in violations of the state’s Sunshine Law in the rate increase process. Judge Gievers had agreed with him, but the appeal court concluded that no statutory violations had been committed.

“The trial court erred in declaring OIR’s final order void and in concluding that NCCI and OIR violated the Sunshine Law,” the appeal court concluded in 19-page opinion written by Judge Lori S. Rowe on behalf of a three-judge panel.

Reacting to the First District’s ruling, the Property Casualty Insurers Association of America praised the decision, saying that the court had recognized “the importance of organizations like NCCI who can independently review Florida’s workers’ compensation system and offer recommendations.”

John K. Shubin, a Miami attorney who represented Fee in the appeal, said that he and his client were “obviously disappointed by the court’s decision,” and would look into “whether there is merit in pursuing further the important issues addressed by the underlying lawsuit.” He did not say whether further review would be sought from the full District Court of Appeal or from the Florida Supreme Court.

April 10, 2017

Miami Beach Minimum Wage Law Ruled Invalid

Miami Beach Mayor Philip Levine’s campaign to establish a higher minimum wage for his city has run into a judicial roadblock, as a Miami judge has declared the local wage ordinance illegal and unenforceable.

Miami-Dade County Circuit Judge Peter R. Lopez ruled on March 27 that the Miami Beach ordinance that had established a separate and higher minimum wage for private employers doing business in the city violated a Florida statute and was therefore invalid.

Mayor Levine issued a statement that he was “extremely disappointed” by the ruling but that the city would appeal to the Florida Third District Court of Appeal, and possibly to the Florida Supreme Court if necessary. The mayor, a Democrat, is believed to be planning a run to be elected Florida’s governor in 2018. He said he will try to bring the minimum wage issue before the voters in a statewide referendum next year to amend the state constitution.

Robert Rosenwald, first assistant Miami Beach city attorney and the author of the ordinance, said that Judge Lopez “simply got it wrong … when a prior statute conflicts with the will of the people expressed in a constitutional amendment, it is the people’s judgment that controls.”

The Miami Beach local minimum wage for private employers had been set to become $10.31 as of January 1, 2018, higher than both the Florida state minimum wage of $8.10 and the federal minimum wage of $7.25. The Miami Beach ordinance, adopted in June of 2016, would require a $13.31 minimum rate citywide by 2021. That is the hourly rate that the city currently requires for employees of city contractors.

The Florida Retail Federation, the Florida Restaurant & Lodging Association, the Florida Chamber of Commerce, and other business groups representing employer interests, had filed suit last December 14, arguing that the city ordinance violated a 2003 state statute (Section 218.077) that preempts local governments from setting their own minimum wages. Florida state Attorney General Pam Bondi intervened in the litigation to defend the controlling validity of the state “wage preemption” statute.

The city’s position was that a 2004 Florida constitutional amendment that set a state minimum wage higher than the federal rate (Art. X, Section 24) gives local governments the ability to set their own minimums, and that Section 218.077 of the Florida Statutes is therefore unconstitutional.

Judge Lopez rejected Miami Beach’s argument and granted summary judgment to the business groups that had challenged the ordinance. “The city’s minimum wage ordinance is not valid under [the Florida statute], which preempts local minimum wages,” Judge Lopez wrote in an eight-page decision. “Florida courts have made clear that municipal ordinances must yield to state statutes,” he explained. “This Court finds that the City reads the plain language of the [constitutional] Amendment erroneously. This Amendment does not prohibit other laws, such as section 218.077, from preempting a local minimum wage ordinance.”

The state law allows local so-called “living wage” ordinances for municipal employees, but prohibits city or countywide minimum wage laws that apply to private employers.

Judge Lopez concluded that Miami Beach had misinterpreted the Florida constitutional provision, which he found had established the state’s minimum wage without invalidating Florida’s wage preemption statute. “The City’s minimum wage ordinance conflicts with and violates section 218.077, a valid wage preemption statute.”

R. Scott Shalley, president and CEO of the Florida Retail Federation, one of the plaintiffs, called the decision “great news for Florida retailers and the entire business community, as this ruling does not place an additional mandate on local businesses by requiring Miami Beach business owners to provide wages above what the state has previously established in law.”

Christine Owens with the National Employment Law Project, which supported Mayor Levine’s position, said that “The court’s ruling invalidating Miami Beach’s minimum wage ordinance — and upholding the legislature’s ban on cities’ addressing local needs for higher wages — is unfortunate and will hurt communities across the state. It also flies in the face of the opinion of leading constitutional experts, who filed a legal brief agreeing that the legislature’s ban was illegal.”

March 30, 2017

Florida’s Minimum Wage Increases a Little Bit for 2017

While the federal minimum wage remains stuck — since 2009 — at $7.25 an hour, Florida’s own state minimum wage has increased to $8.10 for 2017. It had been $8.05 an hour.

Of the 21 states that have raised their minimum wages for 2017, Florida is one of four that increased the existing minimum wage by only a nickel. The other three are Alaska, Missouri, and Ohio. Massachusetts and Washington state will have the highest new state minimum wages in the country, at $11.00 per hour.

Employers generally must pay workers the highest minimum wage prescribed by federal, state, or local law. There are 29 states with a minimum wage higher than the federal minimum.

Municipalities have been busy setting their own local minimum wages. As of July 1, 2018, San Francisco is expected to become the first U.S. city to reach a local minimum wage of $15.00 an hour, while Los Angeles and Washington D.C. will reach the $15.00 mark in 2020.

In Miami Beach the local minimum wage is set to become $10.31 as of January 1, 2018, depending on the outcome of a legal challenge currently being litigated in the Miami-Dade County state circuit court.

The Florida Retail Federation, the Florida Restaurant & Lodging Association, the Florida Chamber of Commerce, and other business groups representing employer interests, filed suit last December 14, arguing that the city ordinance violates a state statute (Section 218.077) that preempts local governments from setting their own minimum wages.

The city contends that a 2004 Florida constitutional amendment that set a state minimum wage higher than the federal rate (Art. X, Section 24) gives local governments the ability to set their own minimums, and that Section 218.077 of the Florida Statutes is therefore unconstitutional.

The case has been assigned to Circuit Judge Peter R. Lopez. No trial date has yet been scheduled.

January 5, 2017

Obama Administration to Appeal Ruling Prohibiting New Overtime Pay Rule

The U.S. Department of Labor‎ will appeal a recent nationwide injunction that blocked the implementation of a new overtime pay rule that had been set to take effect on December 1.

The DOL said it would appeal to the Fifth U.S. Circuit Court of Appeals in New Orleans a November decision by U.S. District Judge Amos Mazzant of Sherman, Texas, preliminarily blocking the rule pending a full trial on the merits of two consolidated suits challenging its legality.

The new rule will not take effect while the appeal is pending.

The DOL’s new rule doubled the minimum salary threshold required to qualify for the white-collar exemption to $47,476 per year,and created an index for future automatic increases.

The states and business groups that filed suit claim that only Congress has the authority to enact such modifications to existing law.

###
About the author: Angel Castillo, Jr. is a partner with DLD Lawyers with many years of experience in counseling clients in employment law matters and representing them in litigation, arbitrations, and administrative agency proceedings.

December 2, 2016

Obama’s New “White Collar” Overtime Rules Blocked by Texas Federal Judge

A federal judge in Sherman, Texas, has issued a nationwide preliminary injunction blocking the implementation of new Obama Administration “white collar” exemption rules.

The new rules were set to take effect on December 1, and would have expanded by more than four million the number of American workers entitled to receive overtime pay. The Department of Labor has estimated that the change would automatically extend overtime pay provisions — and nullify existing exemptions — for more than 4.2 million workers in the first year of implementation, and an additional 3.9 million in the second year.

In a 20-page decision, U.S. District Judge Amos L. Mazzant III ruled on October 22 that Nevada and 20 other states (not including Florida), and more than 50 business groups, that had sued to block the new rules appeared to him to have a significant chance of ultimate success in their lawsuit, and that they would suffer serious financial harm if the rule went into effect as scheduled.

“The Court finds the public interest is best served by an injunction,” Judge Mazzant wrote in his opinion.

Judge Mazzant, 51, a 2014 Obama appointee to the federal bench, made a preliminary finding that President Obama’s Labor Department acted illegally by raising the salary cap below which all workers must receive overtime pay from $455 a week to $921 a week or $47,892 a year, a big jump from the current $23,660. He found that the changes contained in the new rules, including an automatic indexing mechanism for the threshold minimums, should have been made by law by Congress, by amending the Fair Labor Standards Act, and not by executive branch rules.

The injunction halts enforcement of the rules throughout the United States unless the government can win an appeal to the United States Circuit Court of Appeals for the Fifth Circuit in New Orleans or the U.S. Supreme Court. If the government does appeal while Obama remains in office, it is possible that the appeal would be discontinued once Donald Trumps is sworn in as the new president on January 20.

The state government plaintiffs successfully argued that if allowed to go into effect the new rules would harm the public by increasing state budgets, causing layoffs, and disrupting governmental functions.

November 23, 2016

New Form I-9 Required for Employers as of January 22, 2017

Employers may obtain and start using the new I-9 “Employment Eligibility Verification” federal government form for their employees now, but must start doing so no later than Sunday, January 22, 2017. On that date, all previous versions of Form I-9 will be deemed invalid.

After January 21, 2017, employers must use only the revised Form I-9 for new hires, and also to reverify the employment authorization of current employees. If a current employee requires reverification after January 21, 2017, employers must complete Section 3 of the new form and attach it to the employee’s existing Form I-9.

The newest version of the Form I-9, together with instructions for its completion, is now available online, free of charge, at https://www.uscis.gov/i-9.

There also is no fee charged for submitting the completed form.

The current version of the I-9 form expired on March 31, 2016, but the Office of Management and Budget approved the revised form only recently. The new form is dated “11/14/2016 N” on the lower left corner and lists an expiration date of 08/31/2019.

U.S. Citizenship and Immigration Services (USCIS) says that the new form has been promulgated to help employers reduce technical errors for which they may be fined, and also to make it easier to complete the form using a computer.

The new form contains some new questions, including asking employees to disclose “other last names used” to protect the privacy of employees who may have previously used a different first name. Citizens of foreign countries are now allowed to provide either their Department of Homeland Security Form I-94 number (Arrival and Departure Record) or foreign passport information, but not both, as previously required. Enhancements to the I-9 Form online include drop-down lists and calendars for filling in dates, on-screen instructions for each field, easy access to the full instructions, and an option to clear the form and start over.

Employers completing the new form will still need to obtain handwritten signatures from their employees.

U.S. Immigration and Customs Enforcement (ICE) agents and auditors inspect Forms I-9 for compliance, and impose monetary fines for a range of violations that include from minor technical violations to egregious substantive violations, such as employing unauthorized workers. Form I-9 errors are now subject to fines ranging of $216 to $2,156 per violation.

With the incoming Trump Administration, it is probable that Form I-9 compliance and enforcement will once again become a priority for both USCIS and ICE, something that had declined in importance under the Obama Administration. By coincidence, Donald Trump will be sworn in as President two days before the new I-9 Form becomes mandatory.

November 21, 2016

New Overtime Pay “White Collar” Rules Challenged in Lawsuits Filed by 21 States and More than 55 Business Groups

The state attorneys general of Nevada and Texas have a filed a federal court lawsuit seeking to declare invalid the Obama Administration’s new “white collar” exemption rules governing the payment of overtime compensation. They ask the court to vacate and set aside the new rules.

Nineteen other states, not including Florida, also joined the lawsuit against the United States Department of Labor (DOL) and Labor Secretary Thomas P. Perez. The lawsuit, filed in Sherman, Texas, on September 20, has been assigned to Chief U.S. District Judge Ron Clark, 63, who was named to the federal bench by President George W. Bush in 2002. From 1997 to 2002 Clark served as a Republican member in the Texas House of Representatives.

In a separate lawsuit filed at the same time in the same court, more than 55 Texas and national business groups led by the Chamber of Commerce of Plano, Texas, and including the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Automobile Dealers Association, and the National Retail Federation, also challenged the rules on behalf of private employers. That lawsuit was assigned to U.S. District Judge Amos L. Mazzant, III. Mazzant, 51, was named to the bench in 2014 by President Obama. Previously, Texas Republican Gov. Rick Perry had appointed Mazzant to the Texas Fifth Court of Appeals.

The two lawsuits will likely be consolidated.

“Under the premise of updating regulations related to the Fair Labor Standards Act (FLSA), DOL has disregarded the actual requirements of the statute and imposed a much-increased minimum salary threshold that applies without regard to whether an employee is actually performing ‘bona fide executive, administrative, or professional’ duties,” the states’ lawsuit alleges.

The new overtime rules exceed Constitutional authorization, the states’ lawsuit claims, because they require state governments to pay overtime to state employees who are performing executive, administrative, or professional functions if the State employees earn a salary less than an amount determined by the Executive Branch of the federal government.

The states therefore claim that the new rules violate the Tenth Amendment to the U.S. Constitution, which provides that “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or the people.” The new overtime rules “commandeer, coerce, and subvert the States by mandating how they structure the pay of State employees and, thus, they dictate how States allocate a substantial portion of their budgets,” the court complaint claims. Additionally, the new rules were enacted in violation of the federal Administrative Procedure Act, the lawsuit also alleges.

The states’ lawsuit claims that in its new rules DOL has gone beyond what is allowed by the FLSA statutes, and that the new rules are “arbitrary and capricious” and “in excess of Congressional authorization, and must be declared invalid and set aside.”

The states’ lawsuit alleges that the Department of Labor disregarded original Congressional intent by making the exemptions focus on salary and not on whether an employee is actually performing “white collar duties” to qualify for exempt status. The lawsuit specifically claims that the new salary threshold overlooks the fact that some workers in the designated salary range perform management duties that would make them ineligible for overtime.

Both lawsuits are also critical of the Labor Department for including an automatic indexing “escalator” mechanism that will raise the salary level every three years, regardless of economic conditions.

In their lawsuit, the business groups allege that the Obama Administration violated the federal Administrative Procedure Act in enacting the new overtime exemption rules. They claim that the new rules exceed the authority of the DOL under the FLSA and are “arbitrary, capricious, contrary to procedures required by law, and otherwise contrary to law,” and “defy themandate of Congress to exempt executive, administrative, professional, and computer employeesfrom the overtime requirements of the FLSA.”

“The new minimum salary level will result in defeating the exemption for a substantial number of individuals who could reasonably be classified as bona fide executive, administrative, or professional employees on the basis of their duties,” the business groups’ complaint alleges. “The Department’s new salary threshold is so high that it is no longer a plausible proxy for delimiting which jobs fall within the statutory terms ‘executive,’ ‘administrative,’ or ‘professional,’ ” and “contradict the congressional requirement to exempt such individuals from the minimum wage and overtime requirements of the FLSA.”

The new rules, an initiative of President Obama, are set to take effect on December 1, 2016. In them, DOL determined that the required minimum salary level for the “white collar” exemptions to apply will now be $913 per week, or $47,476 annually. The revised rules nearly double the previous salary test level of $455 per week, or $23,660 per year.

The Department of Labor has estimated that the change will automatically extend overtime pay provisions — and nullify existing exemptions — for more than 4.2 million workers in the first year of implementation, and an additional 3.9 million in the second year. “This long-awaited update will result in a meaningful boost to many workers’ wallets, and will go a long way toward realizing President Obama’s commitment to ensuring every worker is compensated fairly for their hard work,” the agency said.

The Plaintiff States estimate that the new overtime rules will increase their employment costs significantly based, in part, upon the number of salaried employees who will no longer be overtime exempt. They argue that because the states cannot reasonably rely upon a corresponding increase in revenue, they will have to reduce or eliminate some essential government services and functions unless the court intervenes. Iowa, for instance, estimates that the new rules will add approximately $19.1 million of additional costs on the State of Iowa government and its public universities in the first year alone.

“Once again, President Obama is trying to unilaterally rewrite the law,” Texas Attorney General Ken Paxton, a Republican, said in a statement. “And this time, it may lead to disastrous consequences for our economy. The numerous crippling federal regulations that the Obama administration has imposed on businesses in this country have been bad enough. But to pass a rule like this, all in service of a radical leftist political agenda, is inexcusable.”

Joining Texas and Nevada as plaintiffs in the lawsuit are Alabama, Arizona, Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Michigan, Mississippi, Nebraska, New Mexico, Ohio, Oklahoma, South Carolina, Utah and Wisconsin. All except Louisiana have Republican governors, although the Louisiana state legislature is controlled by Republicans.

U.S. Labor Secretary Thomas Perez said in a statement that the DOL is confident in the legality of all aspects of its final overtime rule and would be vigorously defending the department’s “efforts to give more hard-working people a meaningful chance to get by.”

“Despite the sound legal and policy footing on which the rule is constructed, the same interests that have stood in the way of middle-class Americans getting paid when they work extra are continuing their obstructionist tactics,” Perez said. “The overtime rule is designed to restore the intent of the Fair Labor Standards Act, the crown jewel of worker protections in the United States.”

Texas AFL-CIO President John Patrick said the new overtime rules do not by themselves require employers to pay workers more, but instead require a higher threshold before employers can “demand all but unlimited work hours.”

“Our nation’s overtime law was designed to promote a society in which people work to live rather than live to work,” Patrick said. “The decision by Texas to file a lawsuit against the overtime rule is a backward-gazing insult that tells hundreds of thousands of Texans that neither their extra work nor their family time is valued.”

The business trade groups said losing the overtime exemption for “frontline executives, administrators and professionals” would cost employers the ability to effectively and flexibly manage their workforces. They said millions of employees across the country would have to be reclassified from salaried to hourly workers, a move that would impose restrictions on their work hours “that will deny them opportunities for advancement and hinder performance of their jobs — to the detriment of their employers, their customers, and their own careers.”

About the author: Angel Castillo, Jr. is a partner with DLD Lawyers with many years of experience in counseling clients in employment law matters and representing them in litigation, arbitrations, and administrative agency proceedings.

September 20, 2016
Last Edited: September 21, 2016

California Farmworkers Get New Overtime Pay Benefits

California, often a path-breaking state in the field of workers’ rights, has adopted legislation expanding the right to receive overtime pay for an estimated more than 825,000 farmworkers across the state.

The bill, promoted by the United Farm Workers of America, was signed into law by Democratic Governor Jerry Brown on September 12 after it was approved by the California State Legislature over significant opposition from some lawmakers. The bill endured a tortuous path through the legislative halls since it was first introduced on February 26, 2015. It amended the state Labor Code by removing existing exemptions for agricultural workers regarding hours of work, meal breaks, and other working conditions, including specified wage requirements, that had long protected other workers while excluding farmworkers.

The new law, called the “Phase-In Overtime for Agricultural Workers Act of 2016,” will be phased in beginning in 2019 and take full effect for most farms by 2022, and in 2025 for small farms of 25 or fewer employees. California farmworkers will become the first in the U.S. to receive overtime pay if they work more than eight hours in a day.

Beginning on January 1, 2022, the new law will require that any work performed by farmworkers in excess of eight hours in any one workday, or in excess of 40 hours in any one workweek, must be paid at one and one-half times the employee’s regular hourly rate of pay. The extra pay requirement will apply to all hours worked over eight hours in any workday or over 40 hours in any workweek. Additionally, work performed in excess of 12 hours in a single day must be compensated at the rate of no less than twice the employee’s regular hourly rate of pay.

When the United States Congress enacted the federal Fair Labor Standards Act (FLSA) in 1938 it excluded agricultural workers from wage protections and overtime compensation requirements. The FLSA requires the payment of overtime to covered employees only on a weekly (but not a daily) basis.

United Farm Workers President Arturo S. Rodriguez welcomed the new law by stating that, ‎”For 78 years, a Jim Crow-era law discriminated against farm workers by denying us the same overtime rights that other workers benefit from. Governor Brown has corrected a historic wrong and set an example for other states to follow.” Founded in 1962 by the late Cesar Chavez, the United Farm Workers of America is the nation’s largest farm workers union, currently active in 10 states.

California recently passed legislation that will increase that state’s $10.00 minimum wage to $15.00 per hour by 2022.

Prior to 1941, the California Labor Code had been silent on the issue of overtime pay for agricultural workers. That year the Legislature officially exempted all agricultural workers from the statutory requirements of overtime, just like the FLSA had done three years earlier. Until now, agricultural workers in California had been eligible for overtime compensation for all hours worked over 10 hours in any workday and for the first 8 hours on the seventh consecutive day of work.

In enacting the new law, the State Legislature declared that its intent was “to provide any person employed in an agricultural occupation in California with an opportunity to earn overtime compensation under the same standards as millions of other Californians.”

Some prominent business groups, led by the California Farm Bureau Federation and a coalition of agricultural producers, had lobbied against the bill, arguing that it would impose higher production costs on farmers and growers. California has a $54-billion annual agricultural economy.

Legislators opposed to the bill also argued that California farmers were already struggling with burdensome regulations and an ongoing water crisis. They predicted that the bill would backfire on hundreds of thousands of workers, as farmers and growers would probably have to limit their working hours and hire more employees in order to avoid overtime costs.

Florida does not have special minimum wage or overtime provisions for farmworkers, and follows the federal FLSA and its exemptions for those working in agriculture. Although exempt from the overtime requirements of the FLSA, agricultural employees generally must be paid the minimum wage, currently $8.05 in Florida, although there are a number of exemptions from minimum wage requirements.

The states with the highest farmworker populations are California, Texas, Washington, Florida, Oregon, and North Carolina. Nearly 80% of farmworkers are male, and most are younger than 31. Of all farmworkers in the United States, 75% were born in Mexico. According to a 2005 survey, 53% of farmworkers are undocumented.

The national median annual wage for agricultural workers was $20,090 in May 2015. Farm work is the second lowest paid job in the nation after domestic labor.

September 19, 2016

NLRB Rules Once Again That Employers Cannot Prohibit Employees From Asserting Class Actions — Even Though the Courts Hold to the Contrary

Refusing to acknowledge court decisions to the contrary, the National Labor Relations Board (NLRB) has ruled once again that an employer that enforces a policy requiring its employees to waive their right to pursue class, collective, or representative actions in an arbitration or in court, is violating federal labor laws.

In two cases involving former employees of Florida-based MasTec, Inc., NLRB Administrative Law Judge Michael A. Rosas decided on August 31 that MasTec’s waiver policy illegally interfered with its employees’ exercise of their rights guaranteed by Section 7 of the National Labor Relations Act (NLRA). That federal statute guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

MasTec argued unsuccessfully that the right to engage in class or collective action litigation is not a protected “concerted activity” under Section 7 of the NLRA.

Rosas ordered MasTec to immediately rescind or revise its Dispute Resolution Policy, contained in its employee handbook. The company must inform all its employees that the agreement required of all employees to arbitrate workplace disputes does not constitute a legally binding waiver of their right to maintain employment related class or collective actions in an arbitration or in court on behalf of groups of aggrieved employees.

Two federal district judges in Orlando and Tampa had ruled in 2015 that MasTec’s arbitration requirement was valid, and dismissed two purported collective action lawsuits claiming payment of overtime wages by two groups of employees, requiring them to arbitrate their claims on an individual basis. The suits had been filed pursuant to the Fair Labor Standards Act (FLSA), respectively, by Jose Luis Sanchez and Moishe Ben Levison. Rosas concluded that MasTec violated federal labor law at the time that it filed each motion in federal court seeking to enforce its waiver policy and send the disputes to arbitration.

Judge Rosas concluded that he was required to ignore contrary court decisions and instead had to follow the NLRB’s own prior decision in the 2012 case of D. R. Horton, Inc. In that case, the Board had held that Section 7 of the NLRA creates a substantive right for employees to pursue collective actions and, thus, a required waiver of that right violates federal labor laws. The NLRB’s D. R. Horton decision was subsequently overruled in 2015 by the United States Circuit Court of Appeals for the Fifth Circuit in New Orleans. However, earlier this year, two other federal appeals courts, the Seventh and Ninth Circuits, approved of the Board’s D.R. Horton decision. The Second and Eighth Circuit Courts of Appeals, like the Fifth, have ruled that class action waivers are enforceable.

The U.S. Supreme Court has not decided the exact issue in an employment context. However, in a 2015 decision, the Court upheld a contract provision in DirectTV’s standard contract with its subscribers stating that in any dispute the customer could only assert a claim on an individual basis, and not with other customers in a collective class action. The DirecTV customer contract included a waiver of class arbitration, stating that “[n]either you nor we shall be entitled to join or consolidate claims in arbitration.” The Supreme Court ruled that the waiver was valid and legally enforceable.

“Until the Supreme Court says otherwise, an administrative law judge is bound to follow the Board’s controlling precedent finding class action waivers unlawful,” Rosas concluded.

On September 9, the NLRB filed a petition for certiorari review with the United States Supreme Court, asking it to decide whether or not arbitration agreements containing class waivers are legal and can be enforced. The petition seeks review of a 2015 order by the United States Circuit Court of Appeals for the Fifth Circuit in New Orleans which became final on May 23, 2016.

In that litigation the NLRB had concluded that Murphy Oil USA, Inc. had unlawfully required employees at an Alabama facility to sign an arbitration agreement waiving their right to pursue class and collective actions, but the appellate court reversed the Board’s ruling. Murphy Oil, headquartered in El Dorado, Arkansas, operates more than 1,000 gas stations in 21 States, including Florida.

“The validity of agreements that waive workers’ right under the National Labor Relations Act to proceed on a class or collective basis is a question of exceptional importance that warrants this Court’s review,” the NLRB said in its petition to the Supreme Court. Certiorari review is not automatic and is granted on a discretionary basis by the Supreme Court.

MasTec did not immediately announce whether it would comply with the NLRB’s decision or challenge it in court. Unless the U.S. Supreme Court or Congress deal with the waiver issue, it appears that the NLRB and the courts will continue interpreting the NLRA differently, leaving both employers and employees uncertain of what their rights and obligations are regarding class actions.

In a prior similar case in 2013, MasTec had previously had its class action waiver policy held to violate federal labor law by another NLRB administrative law judge, Joel P. Biblowitz, but the company was then successful in having that decision overruled by the Fifth Circuit Court of Appeals.

Meanwhile, in the Sanchez case, after the parties engaged in arbitration proceedings, they reached a settlement that was approved by U.S. District Judge Gregory A. Presnellon August 12. The Defendants in that lawsuit – MasTec and AT&T Digital Life, Inc. — agreed to pay six plaintiffs a total of $35,800.00 in damages, together with $35,561.457 in attorneys’ fees and $3,638.55 ion court costs.

The Levison lawsuit, in which DirecTV, Inc. is also a defendant together with MasTec, is still pending. In that case U.S. District Judge Richard A. Lazzara observed in an order in February that “every district court in the Eleventh Circuit [which covers Florida], including this Court, has rejected the argument that the right to bring a collective action is a non-waivable substantive right under the Fair Labor Standards Act. … While orders of the NLRB enjoy considerable deference, they are not binding precedent.”

MasTec, headquartered in the Miami suburb of Coral Gables, is a multinational company engaged in the business of performing engineering, procurement, construction, and maintenance of infrastructures for electric transmission and distribution, oil and natural gas pipelines, and communications systems, including the installation of satellite television systems, home security systems, home automation systems, and other related services. The Company, traded publicly on the New York Stock Exchange, currently estimates 2016 annual revenue to approximate $5.0 billion. MasTec is the second largest Hispanic-owned company in the United States, and has over 13,000 employees in North America.

September 6, 2016
Last Edited: September 13, 2016

Democratic Congressmen Seek to Delay Full Implementation of New Overtime Rules

A bill co-sponsored by North Florida congresswoman Gwen Graham, D-Tallahassee, is seeking to slow down the full implementation of impending changes to the overtime classification regulations pushed through by the Obama Administration.

The new regulations enacted by the U.S. Labor Department are set to go into effect on December 1, 2016, affecting every private employer in the country.

They change the way in which certain employees may be classified as exempt from overtime pay benefits under the federal Fair Labor Standards Act, and are expected to increase employers’ payroll costs. President Obama implemented these changes administratively in an effort to increase the pay of eligible employees after he failed to get Congress to increase the federal minimum wage of $7.25 an hour.

The President has estimated that the new regulations will affect about 4.7-million American workers in 2016, including 370,000 in the state of Florida.

To be properly classified as exempt, employees must meet certain job duties criteria that remain unchanged. These typically salaried “white collar” exempt categories include executive, administrative, and professional employees, along with certain computer employees and “outside salesmen” (salespersons who work outside the office).

What has now changed dramatically is the minimum salary threshold that also must be met to qualify for the exemption, which is being more than doubled. Starting on December 16, an employee must earn at least $913.00 per week ($47,476.00 per year) to be exempt. The threshold salary minimum to qualify for an exemption up to now had been at least $455.00 per week, that is, $23,660.00 a year.

The higher salary threshold is expected to result in many employees losing their professional “exempt” status and being switched to the status of hourly paid employees with the right to be paid 1-1/2 times their regular hourly rate for all overtime hours worked in excess of 40 in any week.

Additionally, under the new rules the threshold will be adjusted automatically every 3 years to meet a pre-determined formula, maintaining the level “at the 40th percentile of full-time salaried workers in the lowest-wage Census region.”

The new bill, introduced on July 14 by Congressman Kurt Schrader, D-Oregon, together with Graham and three other Representatives, all Democrats, is called the “Overtime Reform and Enhancement Act” (H.R. 5813). It seeks to gradually phase-in the Department of Labor’s final overtime regulations. The legislation would still provide eventually for a salary threshold increase to the $47,476.00 level, but would provide additional time for employers to ensure compliance, communicate changes to their employees, and accurately reclassify any employee if necessary. According to Schrader, “Without sufficient time to plan for the increase, cuts and demotions will become inevitable, and workers will actually end up making less than they made before.”

The legislation is being promoted by the Society for Human Resource Management (SHRM), whose members include more than 285,000 Human Resources professionals. SHRM argues that “DOL’s increase of more than 100 percent to the salary threshold in the first year is simply too far, too fast.”

If enacted into law, H.R. 5813 would phase-in the DOL’s new salary threshold over three years, starting with a 50% increase to approximately $35,984.00 on December 1, 2016, with additional increases effective in December 2017, 2018, and 2019.

Once the new overtime rules take effect, employers will need to decide whether or not to raise exempt employees’ salaries to at least the new minimum threshold in order to retain the exemption; or to keep current salaries below the new threshold and start paying overtime for hours worked in excess of 40 in a week. The new rules will likely impact managers and supervisors in the retail, fast-food, and janitorial industries right away.

August 30, 2016

In a precedent-breaking decision, the National Labor Relations Board rules that college student assistants are employees and may unionize

The National Labor Relations Board (NLRB) has decided that graduate and undergraduate student teaching and research assistants who perform paid duties at private colleges and universities are employees with the right to form unions and negotiate collective bargaining agreements.

In a case deciding petitions filed by student assistants at Columbia University and at The New School, both located in Manhattan, the NLRB ruled on August 23, by a 3-1 vote, that in its view collective bargaining between a university and its students, and all the resultant union activities on campus, can co-exist in an educational setting.

In doing so in a 34-page decision, the Board rejected and overturned its own prior decision in a 2004 Bush-era case involving Brown University, like Columbia an Ivy League school. The Board went back to its earlier holding that student assistants were employees in a 2000 New York University case that had been overruled in the Brown case. Student teaching assistants at public colleges and universities have long had the right to unionize.

“We have decided to overrule Brown University,” the Board explained, “because, in our view, the Board erred as to a matter of statutory interpretation … [and] deprived an entire category of workers of the protections of the Act, without a convincing justification in either the statutory language or the policies” of the National Labor Relations Act (NLRA).

The NLRB has five Members appointed by the President to 5-year terms with Senate consent, and is responsible for conducting elections involving union representation and deciding cases that involve federal labor law. It often overrules its own decisions when the membership changes and a different political party controls the majority. At present one seat is vacant. The three Members who voted to overrule the Brown decision are all Democrats appointed by President Obama: Chairman Mark Gaston Pearce, Kent Y. Hirozawa, and Lauren McFerran.

“We are workers as well as students,” according to the student organizing group at Columbia, Graduate Workers of Columbia GWC, UAW. “The NLRB clearly recognizes the increasingly indispensable role we play in carrying out Columbia’s world-class research and teaching missions—we teach hundreds of classes and help bring in roughly $1 billion in research grants each year.” The student organization is affiliated with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, AFL–CIO (UAW), which supported the litigation. The union welcomed the NLRB decision as a “landmark” and “sweeping”.

In interpreting who is an “employee” under Section 2(3) of the National Labor Relations Act, the Board followed the 1995 decision of NLRB v. Town & Country, in which a unanimous U.S. Supreme Court held that “The ordinary dictionary definition of ’employee’ includes any ‘person who works for another in return for financial or other compensation.” The NLRA itself broadly defines “employee” as “any individual employed by an employer.”

In opposing the students’ petition to the NLRB, Columbia argued that “the economic and inherently adversarial model of collective bargaining under the NLRA is not appropriate” for an educational setting. “The teaching and research performed by graduate student assistants at Columbia is an integral part of the academic program, and the relationship of those students with the university is primarily, if not entirely, educational.”

Board Member Philip A. Miscimarra, the only Republican Board member, wrote a dissenting opinion. He stated that for students enrolled in a college or university, “their instruction-related positions do not turn the academic institution they attend into something that can fairly be characterized as a ‘workplace.’ … I believe collective bargaining and, especially, the potential resort to economic weapons protected by our statute fundamentally change the relationship between university students, including student assistants, and their professors and academic institutions.”

Bringing union strikes and lockouts, and the permanent replacement of striking students, to private college campuses “will wreak havoc,” Miscimarra predicted.

Columbia, founded in 1754 and one of the nation’s oldest private institutions of higher education, has approximately 30,000 students including 8,500 undergraduates and 21,500 graduate students. The New School, founded in 1919, has 6,752 undergraduate students and 3,328 graduate students.

Unless the new NLRB ruling is invalidated by a court, or by Congress, the Columbia decision will impact all private colleges and universities throughout the United States. There are 1.7 million graduate students in the United States. A small fraction — about 2 percent — are represented by unions, nearly all of them at public universities, which are governed by state, instead of federal, labor laws.

No date has been set yet for an election to be conducted at Columbia so that eligible student assistants can vote on whether or not they wish to form a union.

August 24, 2016

Update on Miami Beach Minimum Wage

Miami Beach’s City Commission has voted unanimously to create a citywide minimum wage proposed by Mayor Philip Levine that is higher than both the state and federal minimum wages.

Only businesses that have a business license with the city of Miami Beach and are required to pay the federal minimum wage will be required to pay the new citywide minimum.

The federal minimum wage is currently $7.25 an hour, while the Florida state minimum wage is $8.05 an hour. Starting on Jan. 1, 2018, the Miami Beach minimum wage will be set at $10.31 an hour, and increase a dollar a year until 2021, when it will reach $13.31, a 65% increase. Thereafter, the City Commission will have the discretion to increase the minimum wage further using the local consumer price index.

June 8, 2016

EEOC Increases Penalty for Notice Posting Violations

In an effort to motivate employer compliance, the U.S. Equal Employment Opportunity Commission (EEOC) has more than doubled the maximum penalty for employers that violate the notice posting requirements of Title VII and other discrimination statutes, from $210 to $525.

The final rule is in the process of being published, and will take effect 30 days after it is published. The higher penalty will not be retroactive, and will apply only to fines assessed after the rule’s effective date.

Under Title VII of the Civil Rights Act of 1964, and other discrimination statutes, all employers must post notices in their workplaces describing the pertinent provisions of the statutes. The law requires an employer to post a notice describing the federal laws prohibiting job discrimination based on race, color, sex, national origin, religion, age, equal pay, disability, or genetic information. These laws include Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Equal Pay Act, and the Genetic Information Nondiscrimination Act.

Employers holding federal government contracts or subcontracts must also advise their employees of their rights against discrimination and retaliation under Executive Order 11246, Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans’ Readjustment Assistance Act.

The EEOC said that “the great majority” of employers covered by the regulations already comply with the posting requirements, and that the economic impact of the penalty increase “will be minimal.”

A poster available from the EEOC summarizes these laws and explains how an employee or applicant can file a complaint if he or she believes that he or she has been the victim of discrimination or retaliation. The poster is available in English, Arabic, Chinese, and Spanish.

Employers may access a free copy of the “Equal Employment Opportunity is the Law” poster at the EEOC’s website at http://www1.eeoc.gov/employers/poster.cfm.

June 2, 2016

Miami Beach Mayor Proposes Local $13.31 an Hour Minimum Wage

The Mayor of Miami Beach appears to be setting up a legal battle with the state by proposing a new minimum wage for those working inside his city’s boundaries that would be above the Florida state minimum wage. State law prohibits such a municipal enactment.

Mayor Philip Levine, a Democrat with ties to President Obama and former President Bill Clinton, has announced that he will propose enacting a new minimum wage to the city commission at its May 11, 2016, meeting. Levine was first elected in November of 2013 and is in his second term lasting through next year.

Levine’s proposal would raise the minimum wage within the city for both private and public sector employees to $10.31 in July of 2017. The city’s minimum wage would then increase $1.00 per hour per year until it reaches $13.31 in February of 2020. Thereafter, the city commission would have discretion each year to decide whether additional increases would take effect based on the rate of inflation. The four-year minimum wage increase proposed by Levine would amount to a 65% jump.

Levine’s proposal appears to be illegal under existing Florida state law. That is because on June 13, 2013, Florida Governor Rick Scott signed into law House Bill 655, now part of Section 218.077(2) of the Florida Statutes. That state law, effective since July 1, 2013, preempts and nullifies laws enacted by counties, cities, and other local governmental units that require private employers to pay wages more favorable than those required under federal and state laws. Eighteen states, including Florida, now have such local pre-emptive legislation in effect.

However, the state law itself could be unconstitutional, and if Levine has his way the clash of conflicting laws will surely generate a lawyers’ field day at one or more courthouses. That is because Levine’s proposal may be protected from the state pre-emption statute by the 2004 amendment to the Florida state constitution that first established a state minimum wage higher than the federal rate.

The 2004 amendment, now Section 24(f) of Article X of the state constitution, states that it “provides for payment of a minimum wage and shall not be construed to preempt or otherwise limit the authority of the state legislature or any other public body to adopt or enforce any other law, regulation, requirement, policy or standard that provides for payment of higher or supplemental wages or benefits, or that extends such protections to employers or employees not covered by this amendment.” (Italics supplied).

Levine said in a statement that his proposed legislation “addresses the growing gap between wages and the cost of living in South Florida by proposing a minimum living wage for our community. We continue to hear stories from our residents who are unable to live and work in Miami Beach because of the high costs of rent, transportation, and basic living costs.”

Levine did not address the potential conflict between his proposal and the existing state law.

The City of Miami Beach is governed by a city commission/city manager type of government. The city commission consists of six elected Commissioners and Mayor Levine.

If approved by the city commission, the new law would make Miami Beach the first local government in Florida to mandate all employers to adhere to a minimum wage set locally above both state and federal minimum wage laws. It would immediately impact the city’s important leisure and hospitality industry, composed of tourist-oriented service occupations including hotels, fast-food and other restaurants, and cultural, entertainment, and recreational establishments, many of whose employees are paid minimum wage.

Presently the federal minimum wage is $7.25 an hour and the state minimum wage is $8.05. The Florida rate has a built-in adjustment structure pursuant to a 2004 state constitutional amendment that requires yearly review and possible increases in the state minimum wage based on the rate of inflation.

California recently passed legislation that will increase that state’s $10.00 minimum wage to $15.00 per hour by 2022, and New York, whose minimum wage is currently $9.00 an hour, has also done so effective in stages through 2021. Both states have Democratic governors, while Florida’s Republican Governor Rick Scott has criticized those increases. Recent proposals by Democratic state legislators to increase the Florida state minimum wage to $15.00 have not prospered in Tallahassee.

There have been recent developments around the United States in which some cities have enacted their own local minimum wage, and 24 localities have adopted minimum wages above their state’s minimum wage. For example, Los Angeles, San Francisco, and Seattle have approved a $15.00 minimum wage – an idea being championed at the national level by Democratic presidential candidate Bernie Sanders — that will fully phase in by 2021.

Twenty-nine states, including Florida, and the District of Columbia, currently have a minimum wage higher than the federal minimum wage.

The Miami-Dade County “Living Wage” Ordinance governing county service contracts and county employees, as well as employees working at Miami International Airport, has been in effect since 1999, and is annually indexed to inflation. It currently requires a minimum wage of $12.63 per hour for employees with an employer-provided health benefit plan, and $14.46 per hour for those without health benefits. It remains in effect because the 2013 pre-emptive state law carved out from its coverage local minimum wage laws for employees of political subdivisions, and for employers who contract with political subdivisions for goods and services.

Academic research on the economic effect of a minimum wage increase is mixed, with findings ranging from little or no impact on employment rates to rising unemployment. The non-partisan Congressional Budget Office has concluded that an increase in the minimum wage is likely to cause at least some job losses.

May 5, 2016

Retaliation Charges Continue to be Number 1 at the EEOC

Employment-related retaliation charges increased by nearly 5 percent in 2015, and continue to be the leading category of discrimination charged filed by aggrieved individuals with the United States Equal Employment Opportunity Commission (EEOC).

The EEOC received a total of 89,385 employment discrimination charges across the nation during its last fiscal year, which ran from Oct. 1, 2014, through Sept. 30, 2015. Retaliation claims made up almost 45% of all complaints. The total of charges was significantly fewer than the 99,947 recorded in 2011.

Race-based charges were the second most often filed last year, about 35 percent of the total, followed by disability discrimination claims. Sex and age discrimination charges were fourth and fifth on the list.

The EEOC said in its annual report released on February 11 that it resolved 92,641 charges in fiscal year 2015, and secured more than $525 million for victims of discrimination in private sector and state and local government workplaces through voluntary resolutions and litigation.

The agency filed 142 lawsuits against employers last year, up from 133 the previous year. The majority of the lawsuits filed alleged violations of Title VII of the Civil Rights Act of 1964, followed by suits under the Americans with Disabilities Act (ADA). This included 100 individual lawsuits and 42 lawsuits involving multiple victims of discriminatory policies, of which 16 were deemed to have involved “systemic” discrimination.

The agency listed the following “milestones” in its annual report:

In the Abercrombie case(EEOC v. Abercrombie & Fitch, first filed in 2009), the U.S. Supreme Court held that an employer may not make a job applicant’s religious practices a factor in employment decisions, even if the employer only suspects that the practice is religious in nature;
The EEOC issued an updated pregnancy guidance to ensure that employers make reasonable accommodations for pregnant women who need them to keep working;
The EEOC’s sexual harassment and retaliation case against New Breed Logistics resulted in the U.S. Court of Appeals for the Sixth Circuit ruling for the first time that Title VII of the Civil Rights Act of 1964 protects workers from retaliation for telling harassers to stop their harassment; and
The EEOC resolved a race discrimination case against BMW Manufacturing Co., LLC, in which the U.S. District Court for the District of South Carolina ordered BMW to pay $1.6 million and provide job opportunities to the alleged victims. EEOC alleged that BMW excluded African-American logistics workers from employment at a disproportionate rate when the company’s new logistics contractor applied BMW’s criminal conviction records guidance to incumbent logistics employees.

The EEOC is currently in the process of soliciting public input on a proposed update of enforcement guidance addressing retaliation and other related issues. The effort is part of what the agency says is its commitment to inform the public about how it interprets the law and to promote voluntary compliance by employers.

The EEOC commemorated its 50th anniversary on July 2, 2015.

February 16, 2016

U.S. Labor Department Issues “Joint Employer” Guidance Memorandum

In a guidance to employers, the United States Labor Department has issued an “administrator’s interpretation” memorandum regarding joint employer relationships – and joint liability — in minimum wage and overtime cases.

David Weil, the administrator of the department’s Wage and Hour Division, stated that the guidance was issued to “serve as a road map to compliance so that labor violations can be prevented and workers will receive the hard-earned pay to which they are legally entitled.”

The interpretation memorandum will likely be consulted by judges when private and government litigants assert joint employer theories in lawsuits

Weil said that his division considers joint employment issues in “hundreds” of investigations every year, and that the number of such cases is increasing.

Joint employment exists when a person is employed by two or more employers such that the employers are both responsible, both individually and jointly, for compliance with labor laws, including the federal Fair Labor Standards Act. In other words, each joint employer is individually responsible, for example, for the entire amount of wages due an employee. If one employer cannot pay the wages because of bankruptcy or other reasons, then the other employer must pay the entire amount of wages, as the law does not assign a proportional amount to each employer.

“Economic forces and technological advancements have been changing the nature of work for a long time,” said Weil. “As a result, more and more businesses are changing their organizational and staffing models by, for instance, sharing employees or using third-party management companies, independent contractors, staffing agencies or other labor providers. We often see these kinds of arrangements in the construction, agricultural, janitorial, distribution and logistics, staffing, and hospitality industries.”

Violations of the law can be expensive for employers. Last summer, for instance, a federal court in Seattle ruled that DirecTV was a joint employer of the installers hired by its contractor, resulting in DirecTV paying $395,000 in back wages and damages for minimum wage and overtime violations. And in October, J&J Snack Foods Corp. agreed to pay $2.1 million in back wages and damages to temporary production line workers hired by two staffing firms that J&J contracted with to provide labor.

The administrator’s interpretation issued by the Labor Department on January 20 addresses who is an employer, pulling together relevant authorities – statutory provisions, regulations, and court decisions – to provide comprehensive guidance on joint employment under the FLSA. The administrator’s interpretation reflects existing department policy, and provides employers with examples of how the department considers joint employment in its enforcement of these laws. It differentiates between “horizontal” and “vertical” joint employment.

Horizontal joint employment can exist when an employee is employed by two or more technically separate but related or overlapping employers. For example, where a waitress works for two separate restaurants that are operated by the same entity and the question is whether the two restaurants are sufficiently associated with respect to the waitress such that they jointly employ the waitress; or where a farmworker picks produce at two separate orchards and the orchards have an arrangement to share farmworkers. In these scenarios, there would already be an established employment relationship between the waitress and each restaurant, and between the farmworker and each orchard. This joint employment analysis focuses on the relationship of the employers to each other.
Vertical joint employment may be present when the employee of the intermediary employer is also employed by another employer – the potential joint employer. In vertical joint employment situations, the other employer typically has contracted or arranged with the intermediary employer to provide it with labor and/or perform for it some employer functions, such as hiring and payroll. There is typically an established or admitted employment relationship between the employee and the intermediary employer. That employee’s work, however, is typically also for the benefit of the other employer.

In contrast to the horizontal joint employment analysis, where the focus is the relationship between the employers, the focus in vertical joint employment cases is the employee’s relationship with the potential joint employer and whether that employer jointly employs the employee. Examples of situations where vertical joint employment might arise include garment workers who are directly employed by a contractor who contracted with the garment manufacturer to perform a specific function.
The interpretive memorandum advises employers that the possibility of joint employment should be regularly considered in FLSA minimum wage and overtime cases, particularly where (1) the employee works for two employers who are associated or related in some way with respect to the employee; or (2) the employee’s employer is an intermediary or otherwise provides labor to another employer. “The analysis must determine whether, as a matter of economic reality, the employee is economically dependent on the potential joint employer,” according to the memorandum.

The interpretive memorandum states that: “The scope of employment relationships subject to the protections of the FLSA is broad. The FLSA defines ‘employee’ as ‘any individual employed by an employer,’ and ‘employer’ as including ‘any person acting directly or indirectly in the interest of an employer in relation to an employee,’ ” The FLSA’s definition of the word employ “includes to suffer or permit to work,” and the U.S. Supreme Court has held that the “suffer or permit” definition of employment is “‘the broadest definition that has ever been included in any one act.’”

The Administrator’s Interpretation, No. 2016-1, may be accessed free of charge online at http://www.dol.gov/whd/flsa/Joint_Employment_AI.htm.

January 23, 2016

Florida Minimum Wage Remains at $8.05 for 2016

Under the Florida Minimum Wage Act, the Department of Economic Opportunity is required to calculate an adjusted state minimum wage rate by increasing the state’s minimum wage, when applicable, by the rate of inflation for the 12 months prior to September 1.

In calculating the adjusted state minimum wage, the Department of Economic Opportunity uses the Consumer Price Index (CPI) for Urban Wage Earners and Clerical Workers, not seasonally adjusted, for the South Region as calculated by the United States Department of Labor.

Due to a low inflation rate in Florida during the last four months of 2014 and the first eight months of 2015 the statutory automatic wage increase provision was not triggered for 2016.

Accordingly, the Florida state minimum wage will remain at $8.05 an hour, continuing to supersede the lower federal minimum wage of $7.25 an hour, which also is not changing for 2016, within the state.

Even though there will be no change in the state minimum wage, employers need to replace the Florida minimum wage notice in their workplaces. The revised notice is specific to 2016 and has an effective date clearly labeled as January 1, 2016.

December 30, 2015

U.S. Supreme Court Validates Class Action Waivers in Arbitration Agreements

The United States Supreme Court, in a 6-3 decision favoring DirecTV over its customers, has once again affirmed its long standing support for the enforcement of arbitration agreements.

In the latest case, decided on December 14, the Supreme Court reversed California state courts’ interpretation of its own state laws, finding that the Federal Arbitration Act pre-empts those laws and court decisions, and renders them unenforceable. At issue in the dispute were the DirecTV contract’s early termination penalty fees.

The effect of the Supreme Court decision was to validate a contract provision in DirectTV’s standard contract with its subscribers stating that in any dispute the customer can only assert a claim on an individual basis, and not with other customers in a collective class action.

The Federal Arbitration Act (FAA) states that a “written provision” in a contract providing
for “settle[ment] by arbitration” of “a controversy . . . arising out of ” that “contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract,” Justice Stephen G. Breyer stated in the majority opinion, quoting from Section 2 of Article 9 of the United States Code.

So-called “class action waivers” contained in many arbitration agreements – including in employment contracts and employee handbooks — have been the subject of a great deal of litigation in recent years, especially in California, which has had a strong state policy against them, based on a belief that they are damaging to consumer rights.

The DirecTV contract, which two of its customers, Amy Imburgia and Kathy Greiner,
challenged in a California state court in 2008, included a waiver of class arbitration, stating that “[n]either you nor we shall be entitled to join or consolidate claims in arbitration.” The Supreme Court ruled that the waiver is valid and legally enforceable.

The Supreme Court reminded California’s and other lower courts throughout the country that they are required to follow its prior decision in the 2001 case of AT&T v. Concepcion, in which the Court had affirmed the strong federal policy favoring the enforcement of arbitration agreements.

The Supremacy Clause of the United States Constitution forbids state courts to dissociate
themselves from federal law because of disagreement with its content or a refusal to recognize the superior authority of its source, Justice Breyer noted.

Justices Clarence Thomas, Ruth Bader Ginsburg, and Sonia Sotomayor dissented from the majority opinion.

“It has become routine, in a large part due to this Court’s decisions, for powerful economic enterprises to write into their form contracts with consumers and employees no class-action arbitration clauses.” Justice Ginsburg wrote. “The form contract in this case contains a Delphic provision stating that ‘if the law of your state’ does not permit agreements barring class arbitration, then the entire agreement to arbitrate becomes unenforceable, freeing the aggrieved customer to commence class-based litigation in court.”

“This Court,” Justice Ginsburg continued, “reads that provision in a manner most protective of the drafting enterprise. I would read it, as the California court did, to give the customer, not the drafter, the benefit of the doubt. … I would take no further step to disarm consumers, leaving them without effective access to justice.”

December 14, 2015

New Overtime Rule Not Coming Until Late 2016

The U.S. Department of Labor (DOL) will not release its final rule re-defining which employees are and are not exempt from the right to be paid overtime until late 2016, Solicitor of Labor Patricia Smith has announced.

The announcement regarding the timing of the expected changes to the “white collar” exemption for executive, administrative, and professional employees raises the possibility – of interest to all private sector employers — that the time between publication of the final rule and its effective date next year will be relatively short.

The last time the overtime rules under the Fair Labor Standards Act (FLSA) were revised, in 2004, the department provided 120 days for employers to review the new regulations and to make the necessary changes in their classifications and practices. That might not be the case with the new revisions.

The proposed new rule was released on June 30 of this year and received 264,093 comments during the comment period this summer. It more than doubles the exempt threshold qualification from the current $455 a week to the DOL’s proposed $970 a week, with annual raises after it becomes effective. In spite of the numerous comments, the final rule is anticipated to closely resemble the proposed original rule.

The proposed revised rule would extend overtime protections to nearly 5-million white collar workers in the United States within the first year of its implementation.

As a practical matter, for employees who often work more than 40 hours a week employers will need to double their salaries to continue to pay them salaries without overtime, or make other changes to their compensation practices.

November 18, 2015

OSHA Publishes Comprehensive New Guide to its Training Standards for Private Sector Employers

Under the federal Occupational Safety and Health (OSH) Act of 1970, private sector employers are responsible for providing a safe and healthful workplace for their employees. Those duties include providing proper training for employees on how to perform their jobs safely.

Now the Occupational Safety and Health Administration (OSHA), the federal government agency that sets and enforces protective workplace safety and health standards, has published a comprehensive, 256-page guide explaining its training standards. Employers are required to provide such training in a language that their employees can understand.

There are OSHA standards in the new Guide for Construction work, Agriculture, Maritime operations, and General Industry, which are the standards that apply to most worksites.

These standards limit the amount of hazardous chemicals workers can be exposed to, require the use of certain safe practices and equipment, and require employers to monitor hazards and keep records of workplace injuries and illnesses. Examples of OSHA standards include requirements to provide fall protection, prevent trenching cave-ins, prevent some infectious diseases, assure that workers safely enter confined spaces, prevent exposure to harmful substances like asbestos, put guards on machines, provide respirators or other safety equipment, and provide training for certain dangerous jobs.

Employers must also comply with the “General Duty” Clause of the OSH Act, which requires employers to keep their workplace free of serious recognized hazards.

When OSHA investigates a workplace injury its representatives always ask the employer about the training that was provided to the injured employee.

The new Guide, entitled, “Training Requirements in OSHA Standards,” covers the training requirements contained in OSHA’s standards, and are organized
into five categories: General Industry, Maritime, Construction, Agriculture, and Federal Employee Programs.

An example of a training requirement is found in the revised Hazard Communication standard, which improves the quality and consistency of hazard information in the workplace. This standard states:

Employers shall provide employees with effective information and
training on hazardous chemicals in their work area at the time of
their initial assignment, and whenever a new chemical hazard the
employees have not previously been trained about is introduced into
their work area. Information and training may be designed to cover
categories of hazards (e.g., flammability, carcinogenicity) or specific
chemicals. Chemical-specific information must always be available
through labels and safety data sheets.

Most private sector employees in the nation come under OSHA’s jurisdiction in all 50 states, the District of Columbia, and other U.S. jurisdictions, either directly through Federal OSHA or through an OSHA-approved state program. State programs are in place in 21 states and Puerto Rico, although not in Florida. Section 19 of the Occupational Safety and Health Act and presidential Executive Order 12196 of February 26, 1980,
contain special provisions to assure safe and healthful working conditions for federal employees.

Only the self-employed, immediate family members of farm employers that do not employ outside employees, and workplace hazards regulated by another Federal agency (such as the Mine Safety and Health Administration, the Federal Aviation Administration, and the Coast Guard) are not covered by OSHA.

Employers must provide their employees with a workplace that does not have serious hazards and follow all relevant OSHA safety and health and training standards, and must find and correct safety and health problems. OSHA further requires employers to try to eliminate or reduce hazards first by making changes in working conditions rather than just relying on masks, gloves, ear plugs, or other types of personal protective equipment. Switching to safer chemicals, enclosing processes to trap harmful fumes, or using ventilation systems to clean the air are examples of effective ways to get rid of or minimize risks, according to OSHA.

Employers must also:

Inform employees about hazards through training, labels, alarms, color-coded systems, chemical information sheets and other methods;
Keep accurate records of work-related injuries and illnesses;
Perform tests in the workplace, such as air sampling required by some OSHA standards;
Provide hearing exams or other medical tests required by OSHA standards;
Post OSHA citations, injury and illness data, and the OSHA poster in the workplace where employees will see them;
Notify OSHA of all work-related fatalities within 8 hours, and all work-related inpatient hospitalizations, all amputations and all losses of an eye within 24 hours; and
Not discriminate or retaliate against employees for using their rights under the law.

The OSH Act provides employees with the right to:

Ask OSHA to inspect their workplace;
Use their rights under the law without retaliation and discrimination;
Receive information and training about hazards, methods to prevent harm, and the OSHA standards that apply to their workplace;
Get copies of test results done to find hazards in the workplace;
Review records of work-related injuries and illnesses; and
Get copies of their medical records.

The OSHA Guide may be accessed online free of charge at:
https://www.osha.gov/Publications/osha2254.pdf.

# # #

August 12, 2015

“Economic Realities” Test Applies to Independent Contractor vs. Employee Relationship, says U.S. Department of Labor

For employers classifying providers of personal services as “independent contractors” rather than employees, the United States Department of Labor (DOL) has just issued a warning: In its view, “most” American workers are really employees.

The Department’s Wage and Hour Division issued a 15-page interpretative “guidance” memorandum on July 15, seeking to clarify the sometimes difficult question of who should be classified as an employee for purposes of federal wage and hour laws.

While most misclassified employees are labeled “independent contractors,” increasingly employers are also classifying individuals rendering personal services as “owners,” “partners,” or “members of a limited liability company,” instead of as employees. Some employers intentionally misclassify employees as a means to cut costs and avoid compliance with labor laws.

According to the DOL, employers must apply an “economic realities” test to determine whether a worker is an employee or an independent contractor. Certain key factors should be considered in light of the ultimate determination of whether the worker is really in business for him or herself (and thus is an independent contractor) or is economically dependent on the employer (and thus is its employee).

The classification issue is important because employees improperly labeled as independent contractors miss out on legal protections like minimum wage and overtime pay, reemployment assistance benefits, Workers’ Compensation insurance, and private group benefits.

In the guidance, Wage and Hour Division Administrator David Weil listed the following factors as requiring case-by-case analysis to properly determine an individual’s classification, with each factor having to be examined and analyzed in relation to one another, and no single factor being determinative:

Is the Work an Integral Part of the Employer’s Business?
Does the Worker’s Managerial Skill Affect the Worker’s Opportunity for Profit or Loss?
How Does the Worker’s Relative Investment Compare to the Employer’s Investment?
Does the Work Performed Require Special Skill and Initiative?
Is the Relationship between the Worker and the Employer Permanent or Indefinite?
What is the Nature and Degree of the Employer’s Control?

Under the Fair Labor Standards Act of 1938 (FLSA), “the scope of the employment relationship is very broad,” according to Mr. Weil.

The FLSA defines “employee” as “any individual employed by an employer,” and “employ” includes to” suffer or permit to work.” This “suffer or permit” concept has broad applicability, according to Mr. Weil, and is critical to determining whether a worker is an employee and thus entitled to the FLSA’s protections. The “suffer or permit” standard was specifically designed to ensure as broad of a scope of statutory coverage as possible, the guidance memorandum states.

The memorandum goes on to state that “Unlike the common law control test, which analyzes whether a worker is an employee based on the employer’s control over the worker and not the broader economic realities of the working relationship, the ‘suffer or permit’ standard broadens the scope of employment relationships covered by the FLSA.”

An agreement between an employer and a worker designating or labeling the worker as an “independent contractor” is not indicative of the economic realities of the working relationship and is not relevant to the analysis of the worker’s status, according to Mr. Weil.

“The ultimate inquiry under the FLSA,” the memorandum states, “is whether the worker is economically dependent on the employer or truly in business for him or herself. If the worker is economically dependent on the employer, then the worker is an employee. If the worker is in business for him or herself (i.e., economically independent from the employer), then the worker is an independent contractor.”

The guidance memorandum may be accessed free online at:
http://online.wsj.com/public/resources/documents/InterpretMisclass.pdf

July 15, 2015

The Obama Workplace Revolution Continues: Employers Now Need to Update Employees’ Overtime Classifications — and Will Likely See an Increase in Payroll Costs

While President Obama has not been able so far to obtain necessary Congressional support for increasing the federal minimum wage, he is moving expeditiously to increase the number of American employees eligible for overtime pay.

This he can do by himself through executive action — without Congressional legislation.

Under the federal Fair Labor Standards Act of 1938 (FLSA), employers must pay their employees “time-and-a-half” wages (one and a half times the employee’s regular hourly wage) for all hours worked in excess of 40 in any work week.

However, certain employees can be classified as being “exempt” from overtime pay if their work duties meet certain criteria established in the FLSA and in Labor Department Regulations. These typically salaried “white collar” exempt categories include executive, administrative, and professional employees, along with certain computer employees and “outside salesmen” (salespersons who work outside the office).

One of the threshold criteria to qualify for an exemption is that the employee must earn at least $455.00 per week, that is, $23,660.00 a year. Today only 8 percent of full-time salaried workers fall below that income level. (The federal poverty line for a family of four is $24,008.00).

Obama, through new regulations that he directed the Labor Department to announce on June 30, is pushing the qualification threshold up to salaries of at least $970.00 per week or $50,440.00 per year.

The President estimates that the proposed change will affect about 4.7-million workers in 2016, including 370,000 in the state of Florida. The announcement was the culmination of a project set in motion by a March 13, 2014, Presidential Memorandum in which Obama had directed the Department to update the regulations defining which ‘‘white collar’’ workers are protected by the FLSA’s minimum wage and overtime standards.

The Labor Department is also proposing automatically updating the salary level threshold in the future “to prevent the level from becoming outdated with the often lengthy passage of time between rulemakings”. The proposed new regulations would contain a mechanism to automatically update the salary and compensation thresholds on an annual basis using either a fixed percentile of wages or the CPI–U (Consumer Price Index that only considers the prices paid for goods and services by those who live in urban areas). The CPI–U calculates inflation by measuring the average change over time in the prices paid by urban consumers for a set basket of consumer goods and services.

Additionally, DOL is considering whether revisions to the job duties tests are necessary in order to ensure that these tests fully reflect the purpose of the exemptions. Possible revisions include requiring overtime-ineligible employees to spend a specified amount of time performing their primary duty (e.g., a 50 percent primary duty requirement as required under California state law) or otherwise limiting the amount of nonexempt work that an overtime-ineligible employee may perform, as well as adding to the regulations additional examples illustrating how the exemption may apply to particular occupations.

The federal minimum wage has stayed at $7.25 for the past six years, while the regulations determining who is entitled to receive overtime pay have not changed since 2004. President Obama has called on Congress to raise the national minimum wage, and took action last year by signing an Executive Order to raise the minimum wage to $10.10 for all workers on Federal construction and service contracts.

The Labor Department estimates that 128.5 million workers throughout the United States are subject to the FLSA and the Department’s regulations, while 15.7-million are not. Most of the protected workers are covered by the FLSA’s minimum wage and overtime pay protections.

Once the new overtime rules take effect, employers will need to decide whether or not to raise exempt employees’ salaries to the new threshold to retain the exemption; or to keep current salaries below the new threshold where they are and start paying overtime for hours worked in excess of 40 in a week. The new rules will likely impact managers and supervisors in the retail, fast-food, and janitorial industries right away.

The Notice of Proposed Rulemaking published by the Labor Department on July 6, 2015, in the Federal Register invited all interested parties to submit written comments on the proposed rule by September 4, 2015. After reviewing and considering all the comments, the Labor Department will determine the final language of the rule next year.

The text of the proposed rule and commentary, totaling 97 pages, may be accessed free online at:
http://www.gpo.gov/fdsys/pkg/FR-2015-07-06/pdf/2015-15464.pdf.

July 14, 2015

Uber Gets Rear-Ended Trying to Classify its Drivers as Independent Contractors Without Benefits

Any first year lawyer could have told Uber management that classifying their drivers as independent contractors – rather than employees — was an extremely risky business gamble.

Now Uber (Uber Technologies, Inc., a Delaware corporation) is having to face the consequences of its calculated bet thanks to an unfavorable decision by the California Labor Commissioner. The Commissioner ruled on June 3 that a San Francisco Uber driver named Barbara Ann Berwick was legally an employee, as she claimed in her complaint, and not an independent contractor, as Uber claimed. The Commissioner awarded Ms. Berwick $4,152.20 as reimbursable expenses, plus interest, incurred during the two months that she drove for Uber during the summer of 2014.

Uber, founded five years ago as “UberCab,” is an international transportation network company headquartered in San Francisco that markets and operates the Uber mobile app. The smartphone app allows consumers to submit a trip request on their mobile phones which is then routed to Uber-affiliated local drivers who may wish to pick up the passenger. The quasi-taxi service is now available in 58 countries and 300 cities worldwide, including Miami, Fort Lauderdale, West Palm Beach, Orlando, and other Florida cities, and is valued at $40-$50 billion.

The company has been so successful so fast that investment bankers are getting in line to now provide it a $2 billion credit line.

Uber’s business model is built around not owning any passenger cars and not having any driver employees. Uber says it is engaged in the business of “providing lead generation” to its affiliated drivers, comprised of requests for transportation service made by individuals using Uber’s mobile phone app. The app, says Uber, “provides a platform” for would-be passengers to connect with Uber-affiliated drivers and arrange for paid trips on a one-to-one basis, with Uber charging a commission for each trip. Thus, Uber claims that it is not a transportation company, but a “neutral technological platform,” designed simply to enable drivers and passengers to transact the business of transportation with each other directly through their mobile telephones.

Along the way, Uber has generated public protests and lawsuits from its own drivers, competing taxi drivers accustomed to monopoly privileges, and traffic accident victims, as well as from a 26-year-old woman alleging that she was raped by her Uber driver in Delhi, India.

At the heart of Uber’s commercial success is its firmly entrenched corporate dogma that all its drivers are not employees, but independent contractors who like to set their own hours and work only when they feel like it. More than 160,000 drivers actively transported paying passengers using the Uber app at the end of 2014 in the United States.

Companies like Uber have a great profit incentive to classify people who work for them as independent contractors. For instance, an employer must generally withhold federal income taxes, withhold, match, and pay over Social Security and Medicare taxes, and pay unemployment tax on wages paid to an employee, but not to an independent contractor. Companies are not liable under respondeat superior principles for the tortious acts of independent contractors. And independent contractors are not entitled to overtime pay, paid vacation or sick days, group medical, dental, disability, or life insurance, or to any of the benefits flowing from the many federal, state, and municipal laws that protect employees, such as the FLSA, FMLA, Title VII, and state unemployment and workers’ compensation laws. Also, independent contractors are not covered by the National Labor Relations Act and cannot unionize under its protection.

The decision by the California Labor Commissioner is not the first legal hole in the Uber conceptual bulwark.

On May 5, Uber suffered a similar administrative defeat in Florida in the case of a driver named Darrin McGillis, 46, of Cutler Bay, a community southwest of Miami. While dropping off a passenger earlier this year, a scooter rammed McGillis’ car, and he tried to get Uber to pay for the repairs with its insurance, but Uber refused. Out of work, McGillis decided to file for unemployment benefits (now called reemployment assistance) with Florida’s Department of Economic Opportunity, which are only available to employees and not to independent contractors. After considering how Uber’s relationship with its drivers worked, the state agency decided that Gillis was Uber’s employee, making him eligible for unemployment compensation. Uber has now filed an administrative appeal of that decision, insisting that McGillis was an independent contractor. The dispute might well move later into the Florida court system.

In California, before the Labor Commissioner, Uber argued – as it has steadfastly maintained in every similar dispute — that it exercised “very little” control over Ms. Berwick’s activities, and that she was an independent contractor, and, therefore, she was not entitled to recover any claimed wages or to be reimbursed for her work-related expenses such as gas and tolls. But it was to no avail. Hearing Officer Stephanie Barrett ruled in favor of Ms. Berwick.

Uber, ruled Ms. Barrett, does control the drivers and is “involved in every aspect of the operation.” It vets prospective drivers, who must provide to Uber their personal banking and residence information, as well as their Social Security Numbers, and who cannot pick up passengers unless they pass Uber’s background ant DMV checks.

Uber, according to the hearing officer, controls the tools the drivers use; they must register their cars with Uber, and none of their cars can be more than ten years old; they must submit to passengers’ five-star rating submissions, and lose their Uber privileges if the rating falls below an average of 4.6 stars.

Further, the drivers are prohibited from accepting tips because Uber considers that such additional discretionary compensation from customers would be counterproductive to its advertising and marketing strategy.

IRS and U.S. Labor Department regulations, as well as multiple decisions by the U.S. Supreme Court (notably in its 1992 decision in Nationwide Mutual Insurance Co. v. Darden) and other federal and state courts have long established that employers must conduct a common sense economic reality check when making an independent contractor classification.

The IRS, for example, focuses on three principal aspects of the worker’s relationship with the business to determine employee versus independent contractor status: (1) the degree of behavioral control that the business can exercise over the individual; (2) the degree of financial control that the business can exercise over the individual; and (3) the parties’ views and perceptions of the relationship (whether they view it as an independent contractor or an employment relationship).

What is most puzzling about Uber’s strategy in California is this: Rather than pay Ms. Berwick the $4,152.20 she was awarded, Uber decided to appeal the ruling to the California Superior Court in San Francisco. If it loses there, Uber will then be faced with a much more compelling court decision on the independent contractor issue than the administrative decision applying only to Ms. Berwick. A negative ruling could also expose Uber to sanctions under California Senate Bill 459 of 2011, now part of the state’s Labor Code, which prohibits the willful misclassification of individuals as independent contractors and allows civil penalties of between $5,000 and $25,000 per violation.

Uber, however, apparently is already planning a way to extricate itself from the independent contractor legal quagmire by simply doing away with all its drivers.

Uber co-founder and CEO Travis Kalanick recently said that Uber plans to eventually move to using driverless cars, and it is already developing its own self-driving car technology in Pittsburgh.

Über, after all, is the German word for “above,” “over,” or “beyond”. The driverless car may well turn out to be an uber-cool idea for Uber. Although Uber’s current drivers may not see it that way.

June 22, 2015

Careful before you fire an openly racist employee – the feds may come after you

A company that fired an employee for violating its workplace anti-harassment policies by making racist remarks on a picket line has been ordered to give him his job back with back pay plus interest.

The fired employee, who was a member of the United Steelworkers union, had made the racist statements in 2012 while on a picket line protesting a management lockout.

The employer, Cooper Tire & Rubber Company of Findlay, Ohio, had locked out its 1,050 unionized employees as a result of a collective bargaining agreement dispute, and hired temporary replacement workers to keep manufacturing tires.

The replacement workers including many African-Americans. As vans carrying them into the plant arrived to work on January 7, 2012, picketing union member Anthony Runion, a white employee who had worked at the plant for five years, yelled several racist statements, which were videotaped, at the vans, including:

“Hey, did you bring enough KFC for everyone?” and
“I smell fried chicken and watermelon!”

As the vans crossed the picket lines, the union members held up signs and yelled objections to the replacements entering the plant. Their statements included profanity, name-calling, accusations that the replacement workers were un-American and were stealing the locked out employees’ jobs, statements that the picketers did not want them there, and demands that they “go home” and “get out of here.”

Runion also held up his middle finger at the vans, and an unidentified person shouted, “f___ing monkey scabs” and “f___ing ni__er scabs.” Another unidentified person yelled at the replacement workers, “Go back to Africa, you bunch of f___ing losers.”

Cooper Tire fired Runion, and when his union grieved his termination, an arbitrator upheld the Company’s decision, finding that there had been “just cause” for the employer’s decision. The arbitrator found that Runion’s racist statements violated the explicit terms of Cooper Tire’s harassment policy because both statements were related to race and were disrespectful of the dignity and feelings of the African-American replacement workers. The union appealed to the National Labor Relations Board (NLRB).

When the dispute reached NLRB Administrative Judge Thomas M. Randazzo of Washington, D.C., he ordered Cooper Tire to reinstate Runion with back pay, holding that his firing had violated the National Labor Relations Act (NLRA).

The NLRA protects employees’ freedom of speech and guarantees employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

“I find that Runion was discharged for engaging in picketing activity,” the judge decided. “Runion’s ‘KFC’ and ‘fried chicken and watermelon’ statements most certainly were racist, offensive, and reprehensible,” wrote Judge Randazzo in a June 5, 24-page decision, “but they were not violent in character, and they did not contain any overt or implied threats to replacement workers or their property … The statements were also unaccompanied by any threatening behavior or physical acts of intimidation by Runion towards the replacement workers in the vans.”

The judge stated that the arbitrator’s ruling upholding Runion’s termination was “clearly repugnant” to the NLRA in part because picketing activity “is evaluated by a different standard than workplace activity.”

“Runion’s conduct and statements did not tend to coerce or intimidate employees in the exercise of their rights under the Act [NLRA],” wrote Judge Randazzo, “nor did they raise a reasonable likelihood of an imminent physical confrontation. … The Board [NLRB] has held that a striker’s or picketer’s use of even the most vile language and/or gestures, standing alone, does not forfeit the protection of the Act, so long as those actions do not constitute a threat.”

Judge Randazzo’s order can be appealed to the NLRB in Washington if Cooper Tire chooses to do so. If no appeal is filed, the judge’s order becomes the order of the NLRB.

The National Labor Relations Board is an independent federal agency that sits in the nation’s capital with the mission of protecting the rights of private sector employees to join together, with or without a union, to improve their wages and working conditions. All five current Board members have been appointed by President Obama. Three are Democrats and two are Republicans. Judge Randazzo’s decision can be accessed online in PDF format at http://www.nlrb.gov/case/08-CA-087155.

June 11, 2015

U.S. Labor Department Updates FMLA Forms,Now good through May 31, 2018

The Wage and Hour Division of the U.S. Department of Labor, which is responsible for administering and enforcing the Family Medical Leave Act for most employees, has published new FMLA forms on its web site.

The revisions are not very dramatic, notably including references to the Genetic Information Nondiscrimination Act of 2008 (GINA).

The revised forms are meant to catch up with statutory amendments to the FMLA that expanded the FMLA’s military caregiver leave and qualifying exigency leave provisions. The amendments extended military caregiver leave to eligible employees whose family members are recent veterans with serious injuries or illnesses, and expanded the definition of a serious injury or illness to include injuries or illnesses that result from preexisting conditions. The amendments also expanded qualifying exigency leave to eligible employees with family members serving in the Regular Armed Forces, and added a requirement that for all qualifying exigency leave the military member must be deployed to a foreign country.

The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.

Covered private sector employers are those who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year.

In order to be eligible to take leave under the FMLA, an employee must work for a covered employer and have worked 1,250 hours during the 12 months prior to the start of leave; work at a location where the employer has 50 or more employees within a radius of 75 miles; and have worked for the employer for 12 months. The 12 months of employment are not required to be consecutive in order for the employee to qualify for FMLA leave. In general, only employment within seven years is counted unless the break in service is (1) due to an employee’s fulfillment of military obligations, or (2) governed by a collective bargaining agreement or other written agreement.

Eligible employees are entitled to:

Twelve workweeks of leave in a 12-month period for:
- the birth of a child and to care for the newborn child within one year of birth;
- the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
- to care for the employee’s spouse, child, or parent who has a serious health condition;
- a serious health condition that makes the employee unable to perform the essential functions of his or her job;
- any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or

Twenty-six workweeks of leave during a single 12-month period to care for a covered military service member with a serious injury or illness if the eligible employee is the military service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

In recent amendments the Department of Labor clarified the definition of “son and daughter” under the FMLA “to ensure that an employee who assumes the role of caring for a child receives parental rights to family leave regardless of the legal or biological relationship,” and specifying that “an employee who intends to share in the parenting of a child with his or her same sex partner will be able to exercise the right to FMLA leave to bond with that child.

In February 2015, the Department of Labor also amended the definition of “spouse” under the FMLA to extend FMLA leave rights and job protections to eligible employees in a same-sex marriage or a common-law marriage entered into in a state where those statuses are legally recognized, regardless of the state in which the employee works or resides. As a result, even if an employee works where same-sex or common law marriage is not recognized, that employee’s spouse triggers FMLA coverage if the employee married in a state that recognized same-sex marriage or common law marriage.

Here are links to the revised FMLA forms online:

The forms also can be accessed for free at: http://www.dol.gov/whd/fmla/2013rule/militaryForms.htm

June 1, 2015

Retaliation Claims in the Workplace: A growing threat for employers

In 2014, 3,261 claims of workplace retaliation were filed against employers in Florida with the United States Equal Employment Opportunity Commission (EEOC). The EEOC concluded that fully 63% of them had no basis, and yet employers were forced to spend considerable amounts of time and money in defending them. Texas, Florida, and California were the states with the largest number of retaliation claims filed.

In Fiscal Year 2014 (Oct. 1, 2013, to Sept. 30, 2014) the percentage of EEOC charges alleging retaliation — 43% — reached its highest amount ever, while the percentage of charges alleging race discrimination, the second most common allegation, remained steady at approximately 35 percent.

In this 32-slide PowerPoint presentation we look at the nature of these fast-growing claims and suggest some steps that employers can take to prevent them altogether — or at least to improve their ability to defend when they are filed with the EEOC or in court.

May 27, 2015

Lakeland Eye Clinic will Pay $150,000 to Settle Transgender Discrimination Suit

In its continuing legal crusade to prevent workplace discrimination against transgender employees, the EEOC has sued a Lakeland, Florida, eye care facility and quickly settled the case for a $150,000.00 payment and the institution of an employee training program.

The settling employer is Lakeland Eye Clinic, P.A. (“LEC”), an organization of health care professionals including eye doctors and optometrists based in Lakeland, Florida. Its president is Kevin Dorsett, M.D, a Board Certified Ophthalmologist who has previously served as Chief of Ophthalmology at Lakeland Regional Medical Center.

The lawsuit against LEC, filed in the federal district court in Tampa, was one of the first two lawsuits ever filed by the U.S. Equal Employment Opportunity Commission (EEOC) alleging sex discrimination against a transgender individual in the workplace. The two lawsuits are a part of the EEOC’s ongoing efforts to implement its Strategic Enforcement Plan (SEP), which the Commission adopted in December of 2012. The SEP includes coverage of lesbian, gay, bisexual, and transgender individuals under Title VII’s sex discrimination provisions as a top Commission enforcement priority.

The principal federal law enforced by the EEOC that prohibits employment discrimination on the basis of gender — Title VII of the 1964 Civil Rights Act — does not specifically cover discrimination on the basis of sexual orientation or identity. However, both President Obama and Attorney General Eric Holder have been arguing that Title VII should apply in such cases. They have been relying on a legal theory adopted by some court decisions holding that when an employer discriminates against an employee who does not conform to the employer’s “gender-based stereotypes,” the result is discrimination on the basis of gender.

In the LEC case, the EEOC alleged that the clinic illegally discriminated based on gender by firing its Director of Hearing Services after she began to present as a woman and informed the clinic that she was transgender, despite the fact that the employee had performed her duties satisfactorily throughout her employment. The court complaint alleged that the employee was terminated because of being transgender, transitioning from male to female, and because she did not conform to the employer’s gender-based stereotypes about how men and women are supposed to behave.

LEC, on the other hand, has asserted throughout the litigation that it fired the transgender employee for legitimate, non-discriminatory reasons, and that the employee’s gender, including transgender status, transition from one sex to another, and any other gender-related factor, were not considered in any way in terminating her employment. LEC did not admit to any wrongdoing in the settlement agreement with the EEOC.

Under the court approved settlement agreement, LEC will pay $150,000 to the fired employee, including her lawyer’s fees — and provide the former employee a neutral job reference to assist her in finding a new job. The clinic also will implement a new gender discrimination policy in its workplace and provide training to its management and employees regarding the prevention of transgender/gender stereotype discrimination in violation of Title VII. The case settled barely six months after a team of seven lawyers from the Washington, D.C., Tampa, and Miami offices of the EEOC filed the suit.

U.S. District Judge Mary S. Scriven of Tampa will retain jurisdiction over the case for the next two years to ensure LEC’s compliance with the terms of the settlement agreement and a consent decree filed with the court.

The EEOC enforces federal laws prohibiting employment discrimination, including Title VII and the Pregnancy Discrimination Act, the Equal Pay Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Genetic Information Nondiscrimination Act. The EEOC has taken the position that when an employer considers an employee’s sex in taking an adverse action — for example, if an employer fires a transgender employee because the employee does not conform to the employer’s expectations or stereotypes regarding how someone “born” that sex should live or look — the employer is violating Title VII.

The other similar EEOC lawsuit alleging discrimination against a transgender employee is on-going. In a federal lawsuit filed against Detroit-based R.G. & G.R. Harris Funeral Homes, Inc., the EEOC is alleging that Harris fired a funeral director/embalmer because she is transgender, because she was transitioning from male to female, and/or because she did not conform to the employer’s gender-based expectations, preferences, or stereotypes. The employer has denied any wrongdoing in that case, which was filed on the same day as the lawsuit against the Lakeland Eye Clinic.

April 16, 2015

If You Call Your Boss a “Nasty M-F” You Will Get Fired, Right?

No, not if you are engaging in “protected, concerted” activity, according to the National Labor Relations Board (NLRB).

In another in a continuing series of decisions protecting employees who post negative comments online on Facebook about their employers, a three-member panel of the NLRB has ordered that Hernan Perez be reinstated to his server’s job with back pay by Pier 60, a Manhattan caterer.

The NLRB, based in Washington, D.C., is the federal government agency tasked with protecting the rights of private sector employees to join together, with or without a union, to improve their wages and working conditions. Through a five-member board appointed by the President, the NLRB enforces the provisions of the National Labor Relations Act of 1935 (NLRA). Among other provisions, Section 7 of the Act states that private sector employees have the right to unionize and to “engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection”. Section 7 has been called “the First Amendment” of the American workplace.

Perez, a server with 13 years of service at Pier 60, had been fired in the middle of a union organizing campaign after complaining about being addressed in what he considered a disrespectful manner by his supervisor, Robert (Bob) McSweeney. While in the middle of a catered function, Perez went to the bathroom during a break and posted this statement (without the ellipses used here) to his personal Facebook page using his iPhone:

Bob is such a NASTY M_____R F____R don’t
know how to talk to people!!!!!! F__k his mother and
his entire f_____g family!!!! What a LOSER!!!! Vote
YES for the UNION!!!!!!!

Perez’ post was visible to his Facebook “friends,” which included ten Pier 60 coworkers, and to others who visited his personal Facebook page. The incident occurred two days before an employee election at Pier 60 in which the union prevailed and was chosen to be Pier 60’s employees’ collective bargaining representative.

Following an investigation by the Human Resources Department, Perez was fired two weeks after his Facebook post was published online. Pier 60 said that Perez’s Facebook comments had violated a company policy entitled “Other Forms of Harassment”.

That policy prohibited harassment “on the basis of age, race, religion, color, national origin, citizenship, disability, marital status, familial status, sexual orientation, alienage, liability for services in the U.S. Armed Forces, or any other classification protected by Federal, State or Local laws.” As examples of prohibited workplace harassment, the policy mentioned “unwelcome slurs, threats, derogatory comments or gestures, joking, teasing, or other similar verbal, written or physical conduct directed towards an individual because of one of these protected classifications.”

After a trial on the unfair labor practice charge filed by Perez, Administrative Judge Lauren Esposito determined in a 29-page opinion that Perez’ Facebook posting constituted part of an ongoing sequence of events related to the servers’ dissatisfaction with the manner in which they were being treated by Pier 60’s managers, and constituted protected speech under the NLRA.

In reviewing Perez’s termination on appeal, the NLRB panel similarly concluded in a March 31, 2015, ruling, that “Perez’ Facebook comments, directed at McSweeney’s asserted mistreatment of employees, and seeking redress through the upcoming union election, constituted protected, concerted activity and union activity” protected by Section 7 of the National Labor Relations Act.

In a 2-1 decision, the Board decided that Pier 60 had committed an unfair labor practice by terminating Perez’s employment in retaliation over his Facebook posting. The two panel members voting in favor of Perez were Board Chairman Mark Gaston Pearce and Member Lauren McFerran, both Democrats. The five-member NLRB is made up of three Democrats and two Republicans.

Dissenting, Board Member Harry I. Johnson, III, a Republican, wrote that “In condoning Perez’ offensive online rant, which was fraught with insulting and obscene vulgarities directed toward his manager and his manager’s mother and family, my colleagues recast an outrageous, individualized griping episode as protected activity. I cannot join in concluding that such blatantly uncivil and opprobrious behavior is within the Act’s protection.”

“We live and work in a civilized society, or at least that is our claimed aspiration, “ Johnson continued. “The challenge in the modern workplace is to bring people of diverse beliefs, backgrounds, and cultures together to work alongside each other to accomplish shared, productive goals. Civility becomes the one common bond that can hold us together in these circumstances. Reflecting this underlying truth, moreover, legal and ethical obligations make employers responsible for maintaining safe work environments that are free of unlawful harassment. Given all this, employers are entitled to expect that employees will coexist treating each other with some minimum level of common decency.”

“Perez’ comments lost the Act’s protection, and [Pier 60’s] discharge of him for his opprobrious Facebook posting was lawful,” Johnson concluded in his minority opinion.

April 2, 2015

It’s Time to Update Employee Handbooks

It is always a good idea for private sector employers to review their employee handbooks or manuals periodically to make sure that they are in compliance with constantly changing local, state, and federal workplace laws and court and agency decisions.

A recent memorandum issued by the General Counsel of the National Labor Relations Board (NLRB), Richard F. Griffin, Jr., illustrates the potential problems that can be generated by an out-of-date or carelessly written employee handbook.

The NLRB, based in Washington, D.C., is the federal government agency tasked with protecting the rights of private sector employees to join together, with or without a union, to improve their wages and working conditions. Through a five-member board appointed by the President, the NLRB enforces the provisions of the National Labor Relations Act of 1935. Among other provisions, Section 7 of the Act states that private sector employees have the right to unionize and to “engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection”. Section 7 has been called “the First Amendment” of the American workplace.

The NLRB’s General Counsel, appointed by the President to a 4-year term, is independent from the Board and is responsible for the investigation and prosecution of unfair labor practice cases, and for the general supervision of the NLRB’s 26 regional field offices (including in Miami and Tampa) in the processing of cases.

In a 30-page guidance Memorandum dated March 18, 2015, Mr. Griffin has laid out what he sees as significant legal deficiencies in some employer handbooks. “Although I believe that most employers do not draft their employee handbooks with the object of prohibiting or restricting conduct protected by the National Labor Relations Act,” Mr. Griffin said in his introduction, “the law does not allow even well-intentioned rules that would inhibit employees from engaging in activities protected by the Act.”

Under the NLRB’s 2004 leading decision in Lutheran Heritage Village-Livonia, 343 NLRB 646, the mere publication and maintenance of a work rule by an employer may constitute an unlawful “unfair labor practice” if, among other things, the rule has a “chilling effect” on employees’ activities protected under Section 7. It is enough for a violation to exist if employees would “reasonably construe” the rule’s language to prohibit protected Section 7 activity.

Employer rules that often are found unlawful by the NLRB include confidentiality rules, professionalism rules, anti-harassment rules, trademark rules, photography/recording rules, and media contact rules. Employers, of course, have the right to challenge the NLRB’s decisions in court, where from time to time judges overrule the Board.

While every workplace rule that reaches the NLRB for consideration will be judged on its specific text and context, employers may obtain valuable guidance from the examples provided by Mr. Griffin of the types of handbook rules that have been determined to be unlawful by the NLRB.

Confidentiality Rules

Because employees have a Section 7 right to discuss wages, hours, and other terms and conditions of employment with fellow employees, as well as with nonemployees, such as union representatives, an employer’s confidentiality policy that either specifically prohibits employee discussions of terms and conditions of employment—such as wages, hours, or workplace complaints—or that employees would reasonably understand to prohibit such discussions, violates the Act, according to the Memorandum. Similarly, a confidentiality rule that broadly encompasses “employee” or “personnel” information, without further clarification, will reasonably be construed by employees to restrict Section 7-protected communications, and thus be illegal, according to Mr. Griffin.

Examples of confidentiality rules that the NLRB has found unlawful as too broad include:

Do not discuss “customer or employee information” outside of work, including “phone numbers [and] addresses.”

“You must not disclose proprietary or confidential information about [the Employer, or] other associates (if the proprietary or confidential information relating to [the Employer’s] associates was obtained in violation of law or lawful Company policy).”

“Never publish or disclose [the Employer’s] or another’s confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to [the Employer].”

Prohibiting employees from “[d]isclosing … details about the [Employer].”

“Sharing of [overheard conversations at the work site] with your coworkers, the public, or anyone outside of your immediate work group is strictly prohibited.”

“Discuss work matters only with other [Employer] employees who have a specific business reason to know or have access to such information… . Do not discuss work matters in public places.”

“[I]f something is not public information, you must not share it.”

Confidential Information is: “All information in which its [sic] loss, undue use or unauthorized disclosure could adversely affect the [Employer’s] interests, image and reputation or compromise personal and private information of its members.”

Rules Regarding Employee Conduct toward the Company, Supervisors, and Other Employees

Because employees also have the Section 7 right to criticize or protest their employer’s labor policies or treatment of employees, rules that can reasonably be read to prohibit protected concerted criticism of the employer will usually be found unlawfully overbroad by the NLRB. For instance, a rule that prohibits employees from engaging in “disrespectful,” “negative,” “inappropriate,” or “rude” conduct towards the employer or management, absent sufficient clarification or context, will usually be found unlawful.

Moreover, according to Mr. Griffin, employee criticism of an employer will not lose the Act’s protection simply because the criticism is false or defamatory. Accordingly, a rule that prohibits employees from making “false statements” will be found unlawfully overbroad unless it specifies that only maliciously false statements are prohibited.

In addition, according to the NLRB, employees’ right to criticize an employer’s labor policies and treatment of employees includes the right to do so in a public forum. Notably, that includes comments posted on internet social media sites such as Facebook and Twitter or in online blogs. In the NLRB’s view, employers may not generally prohibit an employee from commenting online about the Company’s business, policies, or employees without authorization, or prohibit them from doing so anonymously.

Thus the Board has found the following workplace rules to be unlawfully overbroad because employees reasonably would construe them to ban protected criticism or protests regarding their supervisors, management, or the employer in general:

“[B]e respectful to the company, other employees, customers, partners, and competitors.”

Do “not make fun of, denigrate, or defame your co-workers, customers, franchisees, suppliers, the Company, or our competitors.”

“Be respectful of others and the Company.”

No “[d]efamatory, libelous, slanderous or discriminatory comments about [the Company], its customers and/or competitors, its employees or management.”

“Disrespectful conduct or insubordination, including, but not limited to, refusing to follow orders from a supervisor or a designated representative.”

“Chronic resistance to proper work-related orders or discipline, even though not overt insubordination” will result in discipline.

“Refrain from any action that would harm persons or property or cause damage to the Company’s business or reputation.”

“[I]t is important that employees practice caution and discretion when posting content [on social media] that could affect [the Employer’s] business operation or reputation.”

Do not make “[s]tatements “that damage the company or the company’s reputation or that disrupt or damage the company’s business relationships.”

“Never engage in behavior that would undermine the reputation of [the Employer], your peers or yourself.”

The NLRB has concluded that the following workplace rules were unlawfully overbroad or ambiguous because employees would reasonably construe them to restrict protected discussions with their coworkers.

“[D]on’t pick fights” online.

Do not make “insulting, embarrassing, hurtful or abusive comments about other company employees online,” and “avoid the use of offensive, derogatory, or prejudicial comments.”

“[S]how proper consideration for others’ privacy and for topics that may be considered objectionable or inflammatory, such as politics and religion.”

Do not send “unwanted, offensive, or inappropriate” e-mails.

“Material that is fraudulent, harassing, embarrassing, sexually explicit, profane, obscene, intimidating, defamatory, or otherwise unlawful or inappropriate may not be sent by e-mail.”

Rules Regarding Employee Communications with Third Parties, Including the News Media, Outside the Workplace

The NLRB has found the following rules regarding third party communications to be unlawfully overbroad because employees reasonably would read them to prohibit protected communications with the news media:

Employees are not “authorized to speak to any representatives of the print and/or electronic media about company matters” unless designated to do so by HR, and must refer all media inquiries to the company media hotline.

“[A]ssociates are not authorized to answer questions from the news media. .. . When approached for information, you should refer the person to [the Employer’s] Media Relations Department.”

“[A]ll inquiries from the media must be referred to the Director of Operations in the corporate office, no exceptions.”

“If you are contacted by any government agency you should contact the Law Department immediately for assistance.”

Rules Regarding Employee Use of Company Logos, Copyrights, or Trademarks

Handbook rules that restrict employee use of company logos, copyrights, or trademarks also have run into trouble with the NLRB. As Mr. Griffin observes, although copyright holders have a clear interest in protecting their intellectual property, handbook rules cannot prohibit employees’ fair protected use of that property. For instance, a company’s name and logo will usually be protected by intellectual property laws, but employees have a right to use the name and logo on picket signs, leaflets, and other protest material. Therefore, a broad employer prohibition on such use without any clarification will generally be found unlawfully overbroad.

Accordingly, the NLRB has found that the following employer rules were unlawful because they contain broad restrictions that employees would reasonably read to ban fair use of the employer’s intellectual property in the course of protected concerted activity:

Do “not use any Company logos, trademarks, graphics, or advertising materials” in social media.

Do not use “other people’s property,” such as trademarks, without permission in social media.

“Use of [the Employer’s] name, address or other information in your personal profile [is banned] … . In addition, it is prohibited to use [the Employer’s] logos, trademarks or any other copyrighted material.”

Company logos and trademarks may not be used without written consent … .”

Rules Restricting Photography and Recording

In Mr. Griffin’s view, employees have a Section 7 right to photograph and make recordings in furtherance of their protected concerted activity, including the right to use personal devices to take such pictures and recordings. Thus, he continues, workplace rules placing a total ban on such photography or recordings, or banning the use or possession of personal cameras or recording devices, are unlawfully overbroad where they would reasonably be read to prohibit the taking of pictures or recordings on non-work time.

The Board has found that the following handbook rules unlawfully overbroad because employees reasonably would interpret them to prohibit the use of personal equipment to engage in Section 7 activity while on breaks or other non-work time:

“Taking unauthorized pictures or video on company property” is prohibited.

“No employee shall use any recording device including but not limited to, audio, video, or digital for the purpose of recording any [Employer] employee or [Employer] operation … .”

A total ban on use or possession of personal electronic equipment on Employer property.

A prohibition on personal computers or data storage devices on employer property.

Prohibition from wearing cell phones, making personal calls or viewing or sending texts “while on duty.”

Rules Restricting Employees from Leaving Work

In his Memorandum, Mr. Griffin states that “one of the most fundamental rights employees have under Section 7 of the Act is the right to go on strike”. Accordingly, rules that regulate when employees can leave work are unlawful if employees reasonably would read them to forbid protected strike actions and walkouts. Thus, these workplace rules have been found by the Board to be unlawful:

“Failure to report to your scheduled shift for more than three consecutive days without prior authorization or ‘walking off the job’ during a scheduled shift” is prohibited.

“Walking off the job …” is prohibited.

The NLRB found the following rule unlawful because it was phrased broadly and did not include any clarifying examples or context that would indicate that it did not apply to protected Section 7 activities:

Employees may not engage in “any action” that is “not in the best interest of [the Employer].”

No Distribution/No Solicitation Rules

Many employers include provisions in their handbooks to the effect that “It is our policy to prohibit the distribution of literature in work areas and to prohibit solicitation during employees’ working time. ‘Working time’ is the time an employee is engaged, or should be engaged, in performing his/her work tasks for us. These guidelines also apply to solicitation and/or distribution by electronic means.”

The NLRB has found that such a rule was unlawful because it restricted distribution by electronic means in work areas. In the NLRB’s view, an employer may lawfully restrict distribution of literature in paper form in work areas, but it has no legitimate business justification to restrict employees from distributing literature electronically, such as sending an email with a “flyer” attached, while the employees are in work areas during nonworking time. Unlike distribution of paper literature, which can create litter and a production hazard even when it occurs on nonworking time, electronic distribution does not present such problems.

In the final section of his Memorandum, Mr. Griffin discusses a case involving the employee handbook of the Wendy’s fast food restaurant chain in 2014. The NLRB concluded that many of the Wendy’s employee handbook rules were unlawfully overbroad and pursuant to a settlement agreement, Wendy’s modified its handbook rules. The discussion contains many useful examples of do’s and don’ts for employee handbooks.

The full Memorandum (Document No. GC 15-04) may be found online at: http://www.nlrb.gov/reports-guidance/general-counsel-memos.

March 25, 2015

Federal Appeals Court Protects Rights Of Lactating Employees In The Workplace

In a precedent-setting decision that should be of interest all private sector employers, a federal appeals court has ruled that discharging a female employee because she is lactating or expressing breast milk in the workplace constitutes sex discrimination in violation of federal anti-discrimination laws.

The U.S. Equal Employment Opportunity Commission (“EEOC”), on behalf of employee Donnicia Venters (“Venters”), had sued Texas companies Houston Funding II, Ltd. and Houston Funding Corp. (“Houston Funding”) in July of 2011. The EEOC alleged that they had unlawfully discharged Venters, a new mother, because she was lactating and wanted to express milk at work. The EEOC alleged that Houston Funding had unlawfully discriminated against Venters based upon her sex, including her pregnancy, childbirth, or related medical conditions, by ending her employment. According to the EEOC, the discharge violated Title VII of the 1964 Civil Rights Act, as amended by the Pregnancy Discrimination Act of 1978, which specifically protects against workplace discrimination based on an employee’s pregnancy.

In finding workplace discrimination in the Venters case, the federal Fifth Circuit Court of Appeals in New Orleans reversed the decision of the trial court, which had come to the opposite conclusion and ruled in favor of the employer. U.S. District Judge Lynn N. Hughes of the Southern District of Texas court in Houston had concluded in a February 2012 order that “lactation is not pregnancy, childbirth, or a related medical condition. Firing someone because of lactation or breast pumping is not sex discrimination. The law does not punish lactation discrimination”.

The Fifth Circuit covers the states of Louisiana, Mississippi, and Texas, but federal district courts in Florida often look to its decisions for guidance.

Venters had worked as an account representative/collector for Houston Funding from March 2006 until she was fired in February 2009. In December of 2008 she took a maternity leave of absence and ten days later gave birth to a girl. During one conversation with a male supervisor during her leave, Venters informed her employer that she was breastfeeding her baby and asked whether it might be possible for her to use a breast pump at work upon her return. Her request was peremptorily denied on the telephone by the supervisor.

Venters had suffered complications from her C-section and had to stay away from work slightly longer than anticipated. In February of 2009 she called her employer to inform that her doctor had released her to return to work, and she mentioned again that she was lactating, and asked whether she could use a back room to pump milk. After a long pause, she was informed on the phone that her position had been filled during her absence. She then received a letter from her employer telling her that she was had been discharged due to “job abandonment”. The EEOC argued in court that the reason given by the employer was false and a pretext for discrimination.

The Fifth Circuit found in its May 30, 2013, decision that Title VII covers a “far range” of employment decisions “entailing female physiology”. Writing for a unanimous panel of three judges, Circuit Judge E. Grady Jolly stated: “We hold that lactation is a related medical condition of pregnancy. Lactation is the physiological process of secreting milk from mammary glands and is directly caused by hormonal changes associated with pregnancy and childbirth. Lactation is a physiological result of being pregnant and bearing a child.”

Accordingly, the Fifth Circuit vacated the trial court’s summary judgment order in favor of Houston Funding and sent the case back to Judge Hughes in Houston for a trial to be held.

“Now that the Fifth Circuit has reaffirmed the EEOC’s long-standing position about the broad coverage of the Pregnancy Discrimination Act, we look forward to trying the underlying case,” said Claudia Molina-Antanaitis, trial attorney in the EEOC’s Houston District Office which filed the lawsuit. “We hope this litigation sends a message to other women that discrimination based on pregnancy, childbirth, and related conditions is against the law and that the EEOC is here to help.”

One of the six national priorities identified by the EEOC’s Strategic Enforcement Plan is for the Commission to address emerging and developing issues in equal employment law, including issues involving pregnancy-related limitations.

Besides the possibility of sex discrimination claims, private sector employers need to be aware that the federal wage and hour laws enforced by the U.S. Department of Labor now includes specific provisions protecting lactating non-exempt (i.e., hourly paid) employees in the workplace. So do the state laws of some states. Failing to follow those provisions can also result in workplace claims.

Under the federal Fair Labor Standards Act of 1938 (“FLSA”), an employer must generally provide “reasonable break time for an employee to express breast milk for her nursing child for one (1) year after the child’s birth each time such employee has need to express the milk.” Employers are also required to provide “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.”

According to the Labor Department, a workplace bathroom, even if private, is not a permissible location. The location provided must be functional as a space for expressing breast milk. If the space is not dedicated to the nursing mother’s use, it must be available when needed in order to meet the statutory requirement. A space temporarily created or converted into a space for expressing milk or made available when needed by the nursing mother is sufficient, provided that the space is shielded from view, and free from any intrusion from co-workers and the public.

Employers are not required under the FLSA to compensate nursing mothers for breaks taken for the purpose of expressing milk. However, where employers already provide compensated breaks, an employee who uses that break time to express milk must be compensated in the same manner that other employees are compensated for break time. In addition, the FLSA’s general requirement that the employee must be completely relieved from duty during a break, or else the time must be compensated as work time, applies.

Employers with fewer than 50 employees may be exempt if they can establish an undue hardship. Whether compliance would be an undue hardship is determined by looking at the difficulty or expense of compliance for a specific employer in comparison to the size, financial resources, nature, and structure of the employer’s business.

The employee lactation provisions were added to the FLSA by the Patient Protection and Affordable Care Act (“Obamacare”), and became effective on March 23, 2010.

According to the U.S. Centers for Disease Control and Prevention, approximately 75 percent of mothers start breastfeeding immediately after birth, but less than 15 percent of them are still breastfeeding exclusively six months later. As a part of the “Healthy People 2020 initiative”, the national goal is to increase the proportion of mothers who breastfeed their babies in the early postpartum period to 81.9 percent by the year 2020.

The protection of lactating employees in the workplace at the state level varies greatly from state to state. Forty-five states (including Florida), the District of Columbia, and the U.S. Virgin Islands have laws that specifically allow women to breastfeed in any public or private location, while 24 states (although not Florida), the District of Columbia, and Puerto Rico have laws related to breastfeeding in the workplace.

For example, the New York Labor Law states that employers must allow breastfeeding mothers reasonable unpaid break times to express milk, and make a reasonable attempt to provide a private location for her to do so. It also prohibits employment discrimination against breastfeeding mothers. Similarly, the California Labor Code provides that employers need to allow a break and provide a room for a mother who desires to express milk in private while at work. And in Puerto Rico local laws provide that breastfeeding employees must have the opportunity to breastfeed their babies for half an hour within the full-time working day for a maximum duration of 12 months.

The Fifth Circuit decision may be accessed free online here: http://caselaw.findlaw.com/us-5th-circuit/1633088.html

February 9, 2015

Supreme Court Decides That End-Of-Shift Anti-Theft Employee Screenings Are Not Compensable Work Time Under The FLSA

The U.S. Supreme Court has held unanimously that hourly-paid employees don’t have to be paid for the time that they spend passing through after-work security screenings, reversing a Ninth Circuit ruling in favor of former employees of an Amazon.com warehouse against a staffing agency.

The Court handed a victory to employers over employee pay, ruling that companies do not have to pay employees for the time they spend undergoing security checks at the end of their shifts.

On a 9-0 vote, the Court decided on December 9, 2014, that employees of Integrity Staffing Solutions, Inc. facilities in Nevada, where merchandise is processed and shipped for Amazon.com, the internet retail giant, cannot claim compensation for the approximately 25 minutes that they spend each day waiting for and undergoing security screening at the end of their shift. The screenings are aimed at protecting against employee theft. Integrity Staffing Solutions provides warehouse staffing to Amazon.com throughout the United States. During the screenings, employees have to remove items such as wallets, keys, and belts from their persons and pass through metal detectors.

Justice Clarence Thomas wrote on behalf of the Court that the screening process is not a “principal activity” of the employees’ jobs, or an “intrinsic element” of retrieving products from warehouse shelves or packaging them for shipment under the Fair Labor Standards Act of 1938 (FLSA) and therefore is not subject to compensation.

For employees to be paid, the activity in question must be “an intrinsic element” of the job and “one with which the employee cannot dispense if he is to perform his principal activities,” Justice Thomas wrote.

Justice Thomas noted that prior Supreme Court decisions had identified several activities that satisfy this test. For example, the time that battery-plant employees spend showering and changing clothes because the chemicals in the plant are “toxic to human beings” and the employer conceded that “the clothes-changing and showering activities of the employees [were] indispensable to the performance of their productive work and integrally related thereto,” was found to be compensable. Similarly, the time that meatpacker employees spend sharpening their knives because dull knives would “slow down production” on the assembly line, “affect the appearance of the meat as well as the quality of the hides,” “cause waste,” and lead to “accidents,” also was held to be compensable. In contrast, the Court has found to be non-compensable the time that poultry-plant employees spend waiting to don protective gear because such waiting is “two steps removed from the productive activity on the assembly line.”

“We hold,” wrote Justice Thomas, “that an activity is integral and indispensable to the principal activities that an employee is employed to perform—and thus compensable under the FLSA—if it is an intrinsic element of those activities and one with which the employee cannot dispense if he is to perform his principal activities.”

Justice Sonia Sotomayor, joined by Justice Elena Kagan, wrote a brief concurring opinion to stress that the Court’s opinion was consistent with U.S. Labor Department regulations, stating that “undergoing security screenings [is] not itself work of consequence that the employees performed for their employer.”

The Supreme Court reversed an April 2013 ruling by the 9th U.S. Circuit Court of Appeals, based in San Francisco, which had found that the screenings were an integral part of the warehousing job done for the benefit of the employer and should be compensated. Former employees had sued Integrity Staffing Solutions for back wages and overtime pay, arguing that they should have been paid for the time spent going through the security screenings at the end of their shifts.

Amazon, the world’s largest online retailer, is not directly involved in the case. But a business group called the Retail Litigation Center, in a brief supporting the warehousing company, said the industry in general loses $16 billion annually in thefts.

The decision is likely to benefit other companies facing similar lawsuits, including Amazon, CVS Health Corp., and Apple, Inc., according to Integrity’s lawyers.

President Barack Obama’s administration had backed the warehousing company’s position. Both the company and the government said the security checks are not central to warehouse work and instead are more like waiting in line to punch a time clock, an activity some courts have found does not require compensation. The FLSA itself does not define what “work” consists of.

In its legal brief asking the Supreme Court to overturn the Ninth Circuit’s decision, Integrity’s lawyers had argued that the security screenings “are indistinguishable from many other tasks that have been found non-compensable under the FLSA, such as waiting to punch in and out on the time clock, walking from the parking lot to the workplace, waiting to pick up a paycheck, or waiting to pick up protective gear before donning it for a work shift.”

However, in its Integrity decision the Supreme Court did not directly address the issue of employees’ wait time for punching in and out, and that issue, and whether employees must be paid for such wait time remains somewhat unclear.

In 1947 Congress passed the Portal-to-Portal Act to limit the FLSA liability of employers to pay for certain employee activities, such as (1) walking, riding and traveling to and from the actual place of work; (2) clothes changing in certain circumstances; and (3) other activities that are “preliminary to or postliminary” to principal work activities.

In a 2005 decision, IBP, Inc. v. Alvarez, cited by Justice Thomas in today’s decision, the Supreme Court recognized in passing that the time that employees must spend waiting to check in or out is generally a “preliminary” or “postliminary” activity that occurs outside of the continuous workday and therefore does not count as compensable work time under the Court’s “de minimis” (too little to matter) doctrine. However, that decision dealt with the time that employees had to spend “donning and doffing” (putting on and taking off) protective clothing and equipment at a poultry processing plant in Portland, Maine, and it did not directly address the legal issue of whether merely waiting to punch in or out is compensable work time.

For purposes of computing employee work time recorded by a time clock or similar device, the U.S. Department of Labor has adopted a regulation that generally allows time rounding practices. 29 CFR § 785.48(b) provides:

It has been found that in some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees’ starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work. For enforcement purposes this practice of computing working time will be accepted, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.

The text of the Court’s Integrity opinion is available free online here:
http://www.supremecourt.gov/opinions/14pdf/13-433_5h26.pdf

February 9, 2015

Half A Million U.S. Employers Now Using E-Verify To Check Job Applicants’ Status

More than 500,000 employers now use E-Verify in about 1.5-million workplaces, the federal government’s free online service that allows United States employers to confirm their new employees’ eligibility to work in this country.

U.S. law requires companies to employ only individuals who may legally work in the United States – either U.S. citizens or foreign citizens who have the necessary authorization.

Operating since1996, E-Verify is a free Internet-based system that allows businesses to determine the eligibility of their employees to work in the United States. Employers who use E-Verify receive a response on an employee’s work authorization status within seconds — 98.8 percent of work-authorized employees are automatically confirmed instantly or within 24 hours, requiring no further employee or employer action.

“Participation in E-Verify is largely voluntary, so the fact that half a million companies have signed up demonstrates significant confidence in the program,” said Lori Scialabba, Acting Director of U.S. Citizenship and Immigration Services (USCIS). “Employers using E-Verify find it helps them maintain a legal workforce in a quick, secure and accurate way.”

During the program’s first 16 years annual enrollments have increased tenfold, from 11,474 in 1996 to 111,671 in 2012. Last year employers used E-Verify more than 25 million times, according to USCIS.

Recent system enhancements include:

The introduction of “Self Check”, which allows individuals to look up their employment eligibility status and correct their records before they seek work;
The capability to combat identity fraud by locking Social Security numbers suspected of being misused for employment eligibility verification; and
A redesigned website to include “more plain-language content and easy-to-follow graphics.”

The U.S. Senate and the House both have pending immigration reform proposals mandating the use of E-Verify by private employers nationwide. Both bills would phase in employers’ obligation to use an E-Verify program over a period of years, depending on an organization’s size.

The Society for Human Resource Management (SHRM) and the Council for Global Immigration are advocating for a single “reliable and secure” verification system that pre-empts state laws and uses identity-authentication tools, such as knowledge-based authentication, to protect against identity theft so that businesses can confidently hire work-authorized employees.

“The current E-Verify program can be defeated by identity theft,” said Mike Aitken, SHRM vice president for government affairs. “While E-Verify can confirm that the documents presented by a job applicant are real, it cannot confirm that the prospective employee is the person who owns that identity. This leaves the door open for unauthorized individuals to use impostor identities to gain verification of work authorization.”

Employers and other interested persons may visit www.uscis.gov/E-Verify online for more information about the program, both in English and Spanish. USCIS has recently released “E-Verify for Business Leaders,” a new four-minute video that introduces the program’s benefits to prospective users. It is accessible free online at:http://www.uscis.gov/videos/video-e-verify-business-leaders.

February 9, 2015

EEOC Issues Updated Enforcement Guidance On Pregnancy Discrimination

The U.S. Equal Employment Opportunity Commission (EEOC) has issued a new Enforcement Guidance on Pregnancy Discrimination and Related Issues, along with a question and answer document about the guidance, and a Fact Sheet for Small Businesses.

They are all available free online at eeoc.gov. (See URLs below).

This is the first comprehensive update of the Commission’s guidance on the subject of discrimination against pregnant workers since the 1983 publication of a Compliance Manual chapter on the subject. This guidance supersedes that document and incorporates significant developments in the law during the past 30 years. Private sector employers should be well informed about these issues in order to avoid unnecessary claims and litigation.

Pregnancy discrimination in employment is a kind of sex based workplace discrimination prohibited by the 1978 pregnancy discrimination amendments to the 1964 Civil Rights Act. In the state of Florida, the 1992 Civil Rights Act prohibits sex discrimination but does not specifically mention pregnancy. Nonetheless, the Florida Supreme Court, in Delva v. The Continental Group, Inc., interpreted the Florida statutes last year by a 6-1 vote to prohibit discrimination on the basis of pregnancy as a kind of sex-based discrimination. A bill to amend the Florida statute to include pregnancy discrimination failed to pass last year.

In addition to addressing the requirements of the Pregnancy Discrimination Act (PDA), the new EEOC guidance also discusses the application of the Americans with Disabilities Act (ADA) as amended in 2008, to individuals who have pregnancy-related disabilities.

“Pregnancy is not a justification for excluding women from jobs that they are qualified to perform, and it cannot be a basis for denying employment or treating women less favorably than co-workers similar in their ability or inability to work,” said EEOC Chair Jacqueline A. Berrien.

The guidance sets out the fundamental PDA requirements that an employer may not discriminate against an employee on the basis of pregnancy, childbirth, or related medical conditions; and that women affected by pregnancy, childbirth, or related medical conditions must be treated the same as other persons similar in their ability or inability to work. The guidance also explains how the ADA’s definition of “disability” might apply to workers with impairments related to pregnancy.

Among other issues, the guidance discusses:

The fact that the PDA covers not only current pregnancy, but discrimination based on past pregnancy and a woman’s potential to become pregnant;
Lactation as a covered pregnancy-related medical condition;
The circumstances under which employers may have to provide light duty for pregnant workers;
Issues related to leave for pregnancy and for medical conditions related to pregnancy;
The PDA’s prohibition against requiring pregnant workers who are able to do their jobs to take leave;
The requirement that parental leave (which is distinct from medical leave associated with childbearing or recovering from childbirth) be provided to similarly situated men and women on the same terms;
When employers may have to provide reasonable accommodations for workers with pregnancy-related impairments under the ADA and the types of accommodations that may be necessary; and
Best practices for employers to avoid unlawful discrimination against pregnant workers.

Besides the PDA, pregnant employees also have rights under another federal law, The Family and Medical Leave Act (FMLA), which allows eligible employees of employers with 50 or more employees to take up to 12 workweeks of unpaid leave for, among other things, the birth and care of the employee’s newborn child and for the employee’s own serious health condition. The Department of Labor enforces the FMLA.

Also, Section 4207 of the Patient Protection and Affordable Care Act amended the Fair Labor Standards Act (FLSA) to require employers to provide “reasonable break time” for hourly employees to express breast milk until the child’s first birthday. Employers are required to provide “a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.”

Employers with fewer than 50 employees are not subject to this requirement if it “would impose an undue hardship by causing significant difficulty or expense when considered in relation to the size, nature, or structure of the employer’s business.”

The new EEOC Enforcement Guidance is available free online at:
http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm

A Q&A on the Guidance may be viewed at: http://www.eeoc.gov/laws/guidance/pregnancy_qa.cfm

A Fact Sheet for Small Businesses Regarding Pregnancy Discrimination is available at:
http://www.eeoc.gov/eeoc/publications/pregnancy_factsheet.cfm

February 9, 2015

EEOC Issues New Guidances On Disability Discrimination At The Workplace

The U.S. Equal Employment Opportunity Commission (EEOC) has issued four revised guidance documents regarding protection against disability discrimination, pursuant to the goal of the agency’s Strategic Plan to provide up-to-date guidance on the requirements of antidiscrimination laws.

The documents address how the Americans with Disabilities Act (ADA) applies to job applicants and existing employees with cancer, diabetes, epilepsy, and intellectual disabilities. These documents are available free online on the agency’s website at:

Cancer: http://www.eeoc.gov/laws/types/cancer.cfm

Diabetes: http://www.eeoc.gov/laws/types/diabetes.cfm

Epilepsy: http://www.eeoc.gov/laws/types/epilepsy.cfm

Intellectual Disabilities: http://www.eeoc.gov/laws/types/intellectual_disabilities.cfm

“Nearly 34 million Americans have been diagnosed with cancer, diabetes, or epilepsy, and more than 2 million have an intellectual disability,” said EEOC Chair Jacqueline A. Berrien. “Many of them are looking for jobs or are already in the workplace. While there is a considerable amount of general information available about the ADA, the EEOC often is asked questions about how the ADA applies to these conditions.”

The revised documents reflect the changes to the definition of disability made by the ADA Amendments Act (ADAAA, effective since January 1, 2009) that make it easier to conclude that individuals with a wide range of impairments, including cancer, diabetes, epilepsy, and intellectual disabilities, are protected by the ADA. Each of the documents also answers questions about topics such as: when an employer may obtain medical information from applicants and employees; what types of reasonable accommodations individuals with these particular disabilities might need; how an employer should handle safety concerns; and what an employer should do to prevent and correct disability-based harassment.

February 9, 2015

Florida State Senator Seeks Prohibition On Checking Job Applicants’ Criminal Records

If it is approved in the next Florida legislative session, a proposed new state law would prohibit private employers from inquiring into, or considering, a job applicant’s criminal history on an initial employment application.

Such screenings would only be allowed after the employer has determined that a job applicant meets the minimum requirements to qualify for a job offer.

Bill SB-214, introduced in Tallahassee on December 23, 2014, by State Senator Jeff Clemens (D-Lake Worth), is entitled “An act relating to discrimination in employment screening.” It seeks to address what Clemens describes as a statewide need to reduce barriers to employment for people who have a criminal history, with the goal of lowering unemployment rates in communities that have concentrated numbers of people who have a criminal history.

According to the preface to the proposed new law, “Restricting an employer from inquiring into or considering an applicant’s criminal history on an initial employment application increases employment opportunities for those who have a criminal history, thereby reducing the rate of recidivism and improving economic stability.”

The new statute, to become effective on July 1, 2015, if approved, provides as follows:

Unlawful employment screening.—Unless otherwise required by law, an employer may not inquire into or consider an applicant’s criminal history on an initial employment application. An employer may inquire into or consider an applicant’s criminal history only after the applicant’s qualifications have been screened and the employer has determined that the applicant meets the minimum employment requirements specified for a given position.

Clemens’ proposal tracks the position on job applicants’ criminal histories adopted by the United States Equal Employment Opportunity Commission (EEOC), the Washington-based agency that enforces federal laws against employment discrimination.

The EEOC believes that an employer’s use of an individual’s criminal history – especially if focusing on arrests rather than convictions — in making employment decisions may, in some instances, violate the prohibition against employment discrimination under Title VII of the Civil Rights Act of 1964.

A violation may occur when an employer treats criminal history information differently for different job applicants, based on their race or national origin, so that disparate treatment results. According to the federal agency, national data supports a finding that criminal record exclusions have a disparate impact on job seekers based on race and national origin.

Nationally, African Americans and Hispanics are arrested in numbers disproportionate to their representation in the general population. In 2010, 28% of all arrests were of African Americans, even though African Americans only comprised approximately 14% of the general population. In 2008, Hispanics were arrested for federal drug charges at a rate of approximately three times their proportion of the general population. Moreover, African Americans and Hispanics were more likely than Whites to be arrested, convicted, or sentenced for drug offenses even though their rate of drug use is similar to the rate of drug use for Whites.

Furthermore, African Americans and Hispanics also are incarcerated at rates disproportionate to their numbers in the general population. Based on national incarceration data, the U.S. Department of Justice estimated in 2001 that 1 out of every 17 White men (5.9% of the White men in the U.S.) was expected to go to prison at some point during his lifetime, assuming that current incarceration rates remain unchanged. This rate climbs to 1 in 6 (or 17.2%) for Hispanic men. For African American men, the rate of expected incarceration rises to 1 in 3 (or 32.2%). Based on a state-by-state examination of incarceration rates in 2005, African Americans were incarcerated at a rate 5.6 times higher than Whites.

Thus, according to the EEOC, an employer’s neutral policy (e.g., excluding all job applicants right away from employment based on certain criminal conduct) may disproportionately impact some individuals protected under Title VII, especially minorities, and may violate the law if not job related and consistent with business necessity.

Therefore, the EEOC recommends that employers develop a targeted initial criminal history screen for job applicants that considers the nature of the crime(s), the time elapsed since the offense(s), and the nature of the job. The employer’s policy should then provide an opportunity for an individualized assessment for those people identified by the screen, to determine if the policy as applied is job related and consistent with business necessity. Applicants with a criminal history should be provided an opportunity to explain their circumstances and personal history before a final employment decision is made.

February 9, 2015

Favoring Unions, NLRB Grants Employees The Right To Organize Using Their Employers’ Email Systems During Nonworking Time

The National Labor Relations Board has decided, 3-2, that employees have a right to use their employers’ e-mail systems for communicating about union organizing during breaks and other nonworking time.

The 76-page decision, which favors labor unions, overruled a seven-year-old board ruling which had found the opposite. In doing so, the Board gave preference to employees’ communication rights over employer property rights. It invalidated a company policy prohibiting employee use of employer-provided email system for non-work-related messages.

It applies only to employees who have already been granted access to their employer’s email system in the course of their work, and does not require employers who have not done so to now provide such access.

The ruling could be appealed in the federal courts.

The three Democrats on the five-member board voted in favor of the decision, while the two Republicans voted against it. All five were appointed by President Obama.

The Board, based in Washington, D.C., is an independent federal government agency that enforces the National Labor Relations Act (NLRA), a 1935 federal statute that seeks to protect employee rights to act together in “protected group activity” to try to improve their pay and working conditions. One of the principal activities protected by Section 7 of the federal law is employees’ efforts to organize a union in their workplace.

The NLRB’s email rights ruling, issued on December 11, 2014, stemmed from a case that the Communications Workers of America, AFL-CIO (CWA) union filed two years ago after it failed in its attempt to organize employees of Purple Communications, Inc., in Rocklin, Calif., a company that provides interpreting services for the deaf and hard of hearing.

The union argued that prohibiting Purple Communications’ employees from using the company’s email system for non-business purposes, and on behalf of organizations not associated with the company, interfered with the CWA’s organizing efforts and the employees’ protected speech under the federal law.

The company maintained that its email restrictions were aimed at cutting down on workplace distractions. Businesses argued that reversing the 2007 ruling known as Register Guard could violate employers’ property rights, congest employers’ email servers, diminish employee productivity, and infringe on companies’ First Amendment rights not to communicate the unwanted messages of others. They also said that employees have personal email accounts that they could use on their own devices for non-job related purposes.

Register Guard was also decided by a 3-2 vote during the Bush II administration, on December 16, 2007, with the three Republican board members voting in favor and the two Democrats voting against the decision. In that case the NLRB had ruled that employers could prohibit employees from using company email for union purposes even if they allowed employees to use the email for other personal, non-commercial purposes.

The CWA argued to the NLRB that if an employer grants its employees access to the company’s email system, employees should be able to use it to discuss workplace issues, including those related to unionization.

“Employee use of email for statutorily protected communications on nonworking time must presumptively be permitted by employers who have chosen to give employees access to their email systems,” the majority opinion said. “Employees’ exercise of their Section 7 rights necessarily encompasses the right effectively to communicate with one another regarding self-organization at the jobsite.”

The NLRB set two limitations to this new employee email right under Section 7 of the NLRA:

(1) Companies are not required to provide email access to employees at all. Rather, the right attaches once the employer has granted that access; and

(2) An employer may justify a comprehensive prohibition of non-work-related emails by demonstrating that special circumstances make the ban necessary to maintain production or discipline.

One of the Republican dissenters, Board Member Philip A. Miscimarra, wrote a separate opinion stating: “Even if one could identify a colorable need for employees to use an employer’s business email system to engage in union organizing and other concerted activities, I believe the majority’s creation of such an employee right impermissibly fails to accommodate the substantial employer property rights associated with its computer resources, which typically involve substantial acquisition and maintenance costs.”

The other Republican dissenter, Board Member Harry I. Johnson, III, wrote in his own opinion, that “in light of the vast growth of personal devices and social media accounts, not to mention face-to-face and other traditional methods of communications, employees have numerous options available to them in order to communicate with one another about their wages, hours, and working conditions. Given the availability of all of these fora, employees do not need to use their employer’s email system to communicate with one another on these issues.

“It is easy for an employee during his or her nonwork time to send a text message, or make a phone call, or access the internet via smartphone in order to send a message through a social media site and communicate with colleagues, or even to send an email on a personal email service,” Johnson added.

Unless reversed on appeal, the Purple Communications ruling by the NLRB will require employers to review their personnel policies and modify any email-use policies that universally prohibit non-work-related messaging through employer-provided email systems.

The NLRB’s Purple Communications decision, Case No. 21-CA-095151, can be accessed free online at:

http://www.nlrb.gov/cases-decisions/board-decisions

February 9, 2015

Obama Administration Adds Transgender Protections Not Enacted By Congress

Acting unilaterally to expand federal civil rights laws to protect transgenders in the workplace – although Congress has failed to do so – the Obama Administration has announced that it will push forward with its own interpretation of Title VII of the 1964 Civil Rights Act.

Reversing the prior position of the U.S. Justice Department, outgoing Attorney General Eric Holder has announced that his new interpretation of Title VII has led him to believe that the federal statute prohibiting employment discrimination on the basis of sex also applies to transgender people. Going forward, Holder announced, the Civil Rights Division of the Justice Department will be able to file Title VII claims against state and local public employers on behalf of transgender individuals claiming discrimination. The Justice Department does not have authority to sue private employers, and the new interpretation does not affect that.

Title VII provides that it is unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” Title VII applies to private employers with 15 or more employees, including state and local governments. It also applies to employment agencies and to labor organizations, as well as to the federal government.

“This important shift will ensure that the protections of the Civil Rights Act of 1964 are extended to those who suffer discrimination based on gender identity, including transgender status,” Holder said in a statement on December 18, 2014. “This will help to foster fair and consistent treatment for all claimants. And it reaffirms the Justice Department’s commitment to protecting the civil rights of all Americans.”

“The most straightforward reading of Title VII,” according to Holder, is that discrimination “because of . . . sex” includes discrimination “because an employee’s gender identification is as a member of a particular sex, or because the employee is transitioning, or has transitioned, to another sex.” He acknowledged that “Congress may not have had such claims in mind when it enacted Title VII.”

On July 21, 2014, President Obama had issued an executive order providing that discrimination based on gender identity was prohibited for purposes of federal employment and government contracting.

The federal government’s Office of Personnel Management defines transgender individuals as “people with a gender identity that is different from the sex assigned to them at birth,” and defines “gender identity” as an individual’s “internal sense of being male or female.” Among other things, its policies state that once a transgender employee has begun living and working full-time in the gender that reflects his or her gender identity, agencies should allow access to restrooms and (if provided to other employees) locker room facilities consistent with his or her gender identity.

Congress has considered this issue in the past but has never amended Title VII to include coverage for transgenders. In contrast, Congress amended Title VII in 1978 to make it clear that sex discrimination covers discrimination on the basis of pregnancy, childbirth, or related medical conditions.

The U.S. Equal Employment Opportunity Commission and a number of courts have concluded that protection for transgenders is included in the Title VII prohibition of discrimination on the basis of sex, but the issue has not yet reached the U.S. Supreme Court.

Many courts have recognized that gender identity discrimination claims may be established under a “sex-stereotyping” theory. In 1989, in the case of Price Waterhouse v. Hopkins, the Supreme Court interpreted Title VII’s prohibition of discrimination because of “sex” as barring discrimination based on a perceived failure to conform to socially constructed characteristics of males and females. But it did not rule specifically that transgenders were covered by Title VII.

Eighteen states (not including Florida) and the District of Columbia have state employment non-discrimination law that cover transgenders with protections based on sexual orientation and gender identity. Many municipalities across the nation also protect transgenders against discrimination, including Miami-Dade County.

“The decision by Attorney General Holder will go a long way toward advancing equality for the transgender community,” said Sarah Warbelow, legal director for the Human Rights Campaign of Washington, D.C., which promotes civil rights for lesbian, gay, bisexual, and transgender Americans. “Transgender people continue to face some of the highest levels of discrimination in the workplace. We are thrilled to see the Department of Justice take this important step.”

In contrast, Peter Sprigg, senior director for policy studies of the conservative Family Research Council in Washington, D.C., criticized Holder, saying that the original intent of the 1964 Civil Rights Act most certainly did not cover transgendered people. “Probably not one person thought they were passing a bill to protect men who wanted to become women or women who wanted to become men,” Sprigg said. “This is another example of the Obama administration circumventing the role of Congress in imposing its own radical re-interpretation of the law.”

In a two-page internal Justice Department memorandum outlining his new interpretation of Title VII, Holder acknowledged that a number of courts have reached varying conclusions about whether discrimination based on gender identity in and of itself—including transgender status—constitutes discrimination based on sex. The memorandum is available free online at:

http://www.justice.gov/sites/default/files/opa/press- releases/attachments/2014/12/18/title_vii_memo.pdf

February 9, 2015

Domestic Service Employees Who Provide “Companionship Services” To Elderly And Sick People Now Protected By Federal Wage Laws

Effective on January 1, 2015, a new U.S. Labor Department regulation will extend minimum wage and overtime protections to home care workers, one of the fastest-growing occupations in the country. About two million Americans will benefit from the new policy in that they will now be protected by the minimum wage, overtime, and recordkeeping provisions of the 1938 Fair Labor Standards Act (“FLSA”).

The new rule will end the 38-year-old carve out that had excluded workers who attend to the elderly and disabled in their homes from the basic labor protections enjoyed by most American workers. The home care industry had waged a prolonged lobbying campaign against the proposal, claiming it would raise prices on low-income customers and force companies to cut workers’ hours.

Most hourly workers in the U.S. are protected by the FLSA, which established the federal minimum wage and time-and-a-half for hours worked over 40 in a week. But when Congress amended the law in 1974, it added a “companionship exemption,” which excluded workers who provide “companionship services for individuals who (because of age or infirmity) are unable to care for themselves.”

Those changes effectively carved out home care workers, whose ranks have grown significantly in recent years as the elderly have come to rely on their care. Such workers tend to clients who can’t handle all the basic chores of home life on their own, like bathing, dressing, and eating. According to the Labor Department, the occupation is expected to grow by 70 percent between 2010 and 2020, “much faster” than the average for other jobs in the U.S. economy.

The 1974 statutory text had explicitly granted the Labor Department the authority to define the terms “domestic service employment” and “companionship services” by regulation.

In issuing the new rule, the Labor Department stated that it “believes that the lack of FLSA protections harms direct care workers, who depend on wages for their livelihood and that of their families, as well as the individuals receiving services and their families, who depend on a professional, trained workforce to provide high-quality services.”

The new regulation updates the definition of “companionship services” in order to restrict the term to encompass only workers who are providing the sorts of limited, non-professional services Congress envisioned when creating the exemption. It provides that “companionship services” means the provision of fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself. It also defines “fellowship” as engaging the person in social, physical, and mental activities, and “protection” as being present with the person in his or her home, or to accompany the person when outside of the home, to monitor the person’s safety and well-being.

In order to better ensure that live-in domestic service employees are compensated for all hours worked, the new regulation also requires the keeping of actual records of the hours worked by such employees.

The new regulation can be accessed free online here:

http://www.dol.gov/whd/homecare/final_rule.pdf

February 9, 2015