Fair Labor Standards Act Law

Incorporating GINA’s Safe Harbor Language into Employment Policies

2012-05-08T16:56:00.001-04:00

This article first appeared in the May/June 2012 issue of Staffing Now, the North Carolina Association of Staffing Professionals (NCASP) Ezine. Authored by Womble Carlyle's Jill Benson.

The Genetic Information Nondiscrimination Act of 2008 ("GINA") makes it illegal for employers (that employ 15 or more employees) to discriminate against applicants or employees because of their "genetic information." Under GINA, employers are prohibited from requesting genetic information from applicants or employees and cannot use genetic information in making employment decisions. The Equal Employment Opportunity Commission is responsible for enforcing GINA’s anti-discrimination provisions.

More American Workers Sue Employers for Overtime Pay

2012-04-16T12:57:00.002-04:00

From USA Today: Americans were pushed to their limit in the recession and its aftermath as they worked longer hours, often for the same or less pay, after businesses laid off almost 9 million employees.

Now, many are striking back in court. Since the height of the recession in 2008, more workers across the nation have been suing employers under federal and state wage-and-hour laws. The number of lawsuits filed last year was up 32% vs. 2008, an increase that some experts partly attribute to a post-downturn austerity that pervaded the American workplace and artificially inflated U.S. productivity.

US Labor Department Sues Bluefield, W.Va., Accounting Firm and President To Recover Back Wages

2012-04-06T13:35:00.002-04:00

The U.S. Department of Labor has filed a lawsuit against Bluefield accounting firm Raymond A. Froy Jr. CPA, PC and its president, Raymond A. Froy Jr., for alleged violations of the federal Fair Labor Standards Act that affected five employees. The suit followed an investigation by the department’s Wage and Hour Division that found the defendants had violated the FLSA’s minimum wage, overtime and record-keeping requirements.

FLSA Headlines

2012-03-30T13:53:00.003-04:00

CarMax Faces Unpaid Overtime Class Action (Lawyers and Settlements)

Wage and Hour Litigation is Big—and Getting Bigger (Corporate Counsel)

Fourth Circuit finds duty to defend Fair Labor Standards Act case (Lexology)

Minimum Wage Proposal For Servers Opposed By Restaurant Owners (Courant.com)

Jill Benson to Discuss Employment Law Changes with NCASP Members

2012-02-23T13:48:00.002-05:00

Womble Carlyle attorney Jill Benson will be a speaker at the 2012 North Carolina Association of Staffing Professionals (NCASP) Annual Training Conference, to be held May 17-19 in Wrightsville Beach, N.C.

Benson has been a regular speaker at the NCASP Annual Training Conference in recent years, speaking on a variety of employment law compliance topics. This year, she will discuss recent changes in employment law that will affect NCASP members. Benson’s presentation takes place Saturday, May 19th.

Womble Carlyle is a Bronze Sponsor of the event.

Career GPS for In-House Counsel

2012-02-14T16:38:00.000-05:00

Womble Carlyle Chief Leadership and Executive Development Officer Vandana Allman will participate in a discussion of “Career GPS for In-House Counsel” with members of the Washington Metropolitan Area Corporate Counsel Association (WMACCA). The luncheon takes place from noon-2 p.m. on Feb. 29th at the Tysons Corner Marriott, 8028 Leesburg Pike in Tysons Corner, Virginia. The “Career GPS For In-House Counsel” presentation will provide a guidance system for in-house counsel who want to design and implement professional-growth routes that will help them reach their destination as quickly and efficiently as possible.

WMACCA’s Career GPS for In-House Counsel is 12-2 p.m. Feb. 29 at Tysons Corner Marriott http://bit.ly/yzHfMJ. Register today.

Federal Courts Increasingly Unhappy with Proposed FLSA Settlements

2012-02-06T11:54:00.004-05:00

Federal courts are increasingly unhappy with proposed settlements of FLSA collective actions in which attorneys’ fees are disproportionate to the back pay for plaintiffs and “class” members, as the attached decision out of the Southern District of Florida demonstrates. Such cases are not conducive to percentage contingent fee arrangements in any event, but where, as here, the suggested fee was three times the aggregate back pay, Judge Donald Graham threw a flag and ordered a replay.

Southern District of Florida Settlement (pdf)

When “letting off steam” becomes protected activity under the FLSA

2012-01-27T16:23:00.003-05:00

The Fourth Circuit Court of Appeals today held that an employee who complains to her employer about alleged violations of the Fair Labor Standards Act is protected from retaliatory action from the employer. In Minor v. Bostwick Laboratories, Inc., 10-1258, the court joined the majority of circuit courts of appeals in giving a broad interpretation to the anti-retaliation provisions of 29 U.S.C. § 215(a)(3). Although prior Fourth Circuit authority appeared to require an employee to file a formal complaint with the Department of Labor or the court, today’s opinion makes clear that an employee’s intracompany complaint to management will be sufficient to warrant protection. Ms. Minor had complained to a senior executive that she believed her supervisor was altering time cards to eliminate overtime. The executive responded that he would look into it. A few days later, the company terminated Ms. Minor allegedly for being disruptive in the workplace. She sued claiming illegal retaliation.

The court recognized that employees simply letting off steam will not be sufficient to invoke the protection of the FLSA. The employee’s report to the employer must be “sufficiently clear and detailed for a reasonable employer to understand it, in light of both content and context, as an
assertion of rights protected by the statute and a call for their protection." The court did not decide if the facts of the case supported a verdict. It simply decided that Ms. Minor had alleged enough facts to pursue the claim.

Employers need to be careful in how they respond to employee complaints regarding wage and hour issues.

By David Yandle

Mr. Yandle represents employers in all facets of employment law, including Title VII, ADA, ADEA, FLSA and FMLA.

Revenge of Dukes - Another One Bites the Dust

2012-01-13T12:45:00.001-05:00

Relying on Wal-Mart v. Dukes, the US District Court for the Central District of California in Aburto v. Verizon California, Inc. has found no “commonality” in Rule 23 class claims brought by a Verizon “First Level Manager” in its fiber-optic cable workgroup. Since the claims were raised under California law and not under the FLSA, the “relatively lenient” collective action certification rubric did not apply, so traditional Rule 23 class principles were in play. Plaintiff failed to satisfy the court that common, class-wide questions of law and fact predominated; instead, individual assessments would need to be made, thus dooming the class action. Expect an appeal.

Click here to read the full opinion.

Horton Hears a WHAT?

2012-01-13T10:41:00.001-05:00

Can the National Labor Relations Board reverse the Supreme Court? These days, nothing seems impossible, but the attached NLRB order, D. R. Horton, Inc., is remarkable both for its disregard of the decision last April in AT&T v. Concepcion, ___ U.S. ___, 131 S.Ct. 1740, which approved the signing of class action waivers in consumer contracts requiring arbitration, and for its delving into the province of the Department of Labor. At issue was an employer-required “mutual arbitration agreement,” challenged by a construction superintendent. The problem came to a head when the superintendent’s attorney informed the employer that he had been retained to represent a class of superintendents who claimed they had been misclassified as exempt executives. When the employer replied that there had been no notice of intent to arbitrate, the superintendent filed an unfair labor practice charge.

Click here to read the full opinion.

Obama Moves To Extend Wage Protections To Home Care

2011-12-21T14:19:00.001-05:00

The Obama administration revealed a proposal Thursday to extend minimum wage and overtime protections to nearly 2 million in-home care providers by revising federal rules on the exemption for companion workers.

After several legislative proposals to expand coverage languished in Congress, the White House opted to narrow the exemption by having the U.S. Department of Labor update its rules on what duties a companion could have under the Fair Labor Standards Act.

Click here to read more from Law360.com...

The Fluctuating Workweek and Commission Pay

2011-12-16T15:46:00.005-05:00

We’ve noticed some cases recently filed challenging employers’ use of the fluctuating workweek method to determine the overtime compensation for employees who receive commission payments. Plaintiffs are alleging that this practice is not permitted by the Fair Labor Standards Act (FLSA) when employees earn commissions in addition to their salaries. However, this issue is unresolved, and precedent seems to favor the employer defendants.

The fluctuating workweek method is permitted by FLSA regulation 29 C.F.R. § 778.114, promulgated by the Department of Labor to implement the Supreme Court's holding in Overnight Motor Transp. Co. v. Missel, 316 U.S. 572, 580 (1942). This method permits employers to pay non-exempt employees pursuant to the fluctuating hours method if five criteria are met:

1. The employee's hours must fluctuate from week to week;

2. The employee must receive a fixed weekly salary that remains the same regardless of the number of hours worked per week;

3. The fixed salary must be sufficient to provide compensation at a regular rate not less than the legal minimum wage;

4. The employee must receive at least 50 percent of his regular hourly pay for all overtime hours worked; and

5. The employer and the employee must have a clear mutual understanding that the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek.

Dr Pepper Hit With Wage Suit Over OT, Lunch Breaks

2011-11-07T12:30:00.005-05:00

Employees of Dr Pepper Snapple Group Inc. on Friday launched a proposed class action in Florida federal court, claiming the beverage giant unlawfully deducted lunch breaks from pay and withheld overtime compensation.

Lead plaintiff Rony Mitial lodged a suit on behalf of several hundred current and former Dr Pepper Snapple Group employees, claiming the company and its subsidiary American Bottling Co. failed to adequately compensate employees, in violation of the Fair Labor Standards Act.

Ex-Hostess Tackles Colts In FLSA Minimum Wage Suit

2011-10-14T16:36:00.001-04:00

An ex-hostess launched a putative collective action Wednesday accusing the Indianapolis Colts of running afoul of the Fair Labor Standards Act by failing to pay hostesses, who attend to people in the press box area of the Colts' stadium, the federally required minimum wage.

Read the case.

More On Papa John's

2011-10-14T16:32:00.003-04:00

Over the employer’s objections that the practice constituted enabling of solicitation with court approval, Judge Audrey Fleissig allowed use of prepaid return envelopes in connection with notice of the ability to opt in to an FLSA collective action against Papa John’s in the Eastern District of Missouri.

Click to read the order.

See our previous post (10/7/11).

Papa John's Drivers Assail Class Notification Roadblock

2011-10-07T15:57:00.000-04:00

A group of Papa John’s Pizza delivery drivers seeking to expand their class in a wage-and-hour suit asked a federal judge on Wednesday to reconsider a ruling that barred attorneys from using prepaid return envelopes in notifying potential class members of the suit.

Burger King Managers Denied Class Cert. In OT Fight

2011-10-07T15:55:00.001-04:00

A Florida federal judge on Thursday shot down a group of Burger King Corp. franchise managers' bid for class certification in their wage and hour suit claiming the fast-food giant failed to pay them overtime, ruling the plaintiffs' managerial duties were too varied.

DOL Set to Share Employee Misclassification Information with the IRS and States

2011-10-06T15:41:00.002-04:00

In what appears to be another example of cracking down on the improper use of independent contractors, the U.S. Department of Labor (“DOL”) recently announced it is entering into agreements with the IRS, as well as some state agencies (including Illinois state agencies), to share information regarding employers who have improperly classified employees. The DOL maintains that these arrangements are necessary to share information and coordinate law enforcement with the participants to end the practice of misclassifying employees. However, it is clear that this collaboration has as much to do with enhancing the inflow of tax revenues as it does with protecting employees.

What this practically means for businesses is that if the DOL determines that an independent contractor is misclassified, it can share that determination and evidence with, for example, the Illinois Department of Employment Security or other state agencies, which could very well lead to additional investigations, fines, fees and liability upon the business beyond those by IDOL. In light of this, every company with a business model based, in whole or in part, upon the use of independent contractors should prepare itself for this new enforcement activity and immediately consult with an employment attorney to perform an audit of those workers.

Skycaps Can Coordinate Cases Over Airlines' Fees

2011-10-05T15:46:00.002-04:00

A Massachusetts federal judge agreed to allow skycaps in a proposed class action against US Airways Inc. over its bag-checking fee and plaintiffs in a similar suit against United Airlines Inc. to coordinate their cases with a class action against American Airlines Inc., the plaintiffs’ attorney said Wednesday.

Judge Rules Ohio-based Cascom Employees Misclassified as Independent Contractors

2011-10-04T16:18:00.000-04:00

Judge rules Ohio-based Cascom employees misclassified as independent contractors, denied overtime pay in suit brought by US Labor Department.

Maybe Not So Ho Hum at the Supreme Court: FLSA and Wal-Mart v. Dukes

2011-10-04T16:00:00.001-04:00

"The use of Wal-Mart Stores, Inc. v. Dukes in an FLSA case is a key link for those who are advocating for greater control by the courts of FLSA collective actions. Unfortunately, as the 9th Circuit opinion shows, while the case is an FLSA case it is also a Rule 23 case on the state law claims. So, the linkage is not as definitive as one would like."

Can You Hear Me Now?

2011-10-04T14:08:00.000-04:00

In order to obtain legal protection against retaliation when you complain to your employer, be certain your complaint is specific enough to allow the employer to investigate and take appropriate action. That’s the lesson of Shadduck v. United Parcel Service (attached). Even though the Supreme Court has allowed at least a degree of FLSA protection to internal complaints (see our earlier post (“Beware of Verbal Discrimination Complaints,” August 10, 2011)), communication skills are still important: it’s not enough that you know what you’re talking about if no one else does. And for employers, the cautions are still in play: even a vague complaint may be deemed sufficient, and you shouldn’t bank on finding a judge who agrees with your professed lack of understanding. Finding out the answer from a federal court isn’t a good business strategy, and finding out from a jury is even less so. After all, Mark Twain is claimed to have said the American jury system is the world’s best way of resolving disputes other than rolling dice.

Read the case...

A Touch of Class?

2011-10-04T12:41:00.003-04:00

Yesterday the Supreme Court vacated a Ninth Circuit decision, Chinese Daily News, Inc. v. Wang, dealing with the formidable procedural problems created when an FLSA collective action - in which no one can participate as a plaintiff or "class" member without affirmatively opting in,in writing - with claims under state law which also seek class treatment. The state claims (or, occasionally, ones advanced under other federal laws without the special FLSA procedural requirements)would be governed by traditional class action standards, which involve the certification of a class and the exclusion of individuals who are "similarly situated" only if they opt out. Some courts see no problem with this apparent inconsistency, while others attempt to reach a case-by-case balance. One such examination is found in last week's D.C. Circuit opinion in Shahriar v. Smith & Wollensky Restaurant Group, and another in the January 18 Seventh Circuit opinion in Ervin v. OS Restaurant Services (where the court said that the employer's attorneys had been unable to identify any "concrete examples of confusion" produced by the different standards).

The Wang case resulted in a $7.7 million judgment to employees of the Chinese-language World Journal arising out of allegations that the newspaper required off-the-clock work and denied employees meal breaks and itemizations of their pay. A jury awarded $2.5 million, and after that the judgment ballooned due to liquidated damages, penalties and interest. In the process, the Journal secured opt-out authorizations from nearly 3/4 of the group (as well as some whom weren't within the defined class at all). Much of this activity was attributed to employer intimidation, the appeals court found.

The Supreme Court's order, issued on the first day of the new term, sent the case back to the Ninth Circuit for reconsideration inlight of Wal-Mart v. Dukes, the decision earlier this year which invalidated nationwide class action treatment of gender discrimination claims agaist the nation's largest retailer. The Ninth Circuit - which had also decided the Dukes case - must now re-evaluate its analysis to see if a different result is in order. In the meantime, expect more litigation to clarify this important procedural problem, and more uncertainty in the interim.

Exotic Dancers Are Employees Under FLSA: Judge

2011-09-09T11:01:00.003-04:00

www.law360.com

Law360, New York (September 8, 2011) -- A Georgia federal judge said Wednesday that a class of 80 current and former exotic dancers should be classified as employees and not independent contractors in their suit over unpaid wages against Galardi South Enterprises Consulting Inc., proprietors of Atlanta’s Club Onyx.

U.S. District Judge Richard W. Story granted the dancers' motion for partial summary judgment, holding that their relationship with club owners and operators constituted an employee-employer relationship under the Fair Labor Standards Act. Judge Story ordered the parties to mediate the rest of the claims in the case.

“We are thrilled with the court’s decision, which, like numerous decisions before it, recognizes that the relationship between a club and its dancers is an employer-employee relationship,” plaintiffs’ counsel Anna Prakash of Nichols Kaster PLLP said in a statement.

Susan K. Murphey of Schulten Ward & Turner LLP, an attorney for the defendants, said Thursday that they were disappointed by the decision and were exploring their options.

"We believe that we raised novel but valid arguments, and further believe that if neither party desired or intended to create an employment relationship then one ought not be created by operation of law," Murphey said.

The defendants — Galardi South, Pony Tail Inc., CEO Jack Galardi and COO Michael Kap — claimed that since the dancers were paid directly by customers and did not receive paychecks, they should be considered independent contractors. They also claimed that Onyx did not profit from the dancers and that the dancers did not necessarily drive the club's business.

Depositions from both plaintiffs and defendants, however, suggested otherwise. While the parties disagreed over who set the prices for tableside dances and how much of their gross receipts dancers were required to turn over in the form of “house fees” and disc jockey fees, about $94,000 in fees were paid to LVA Management, a company controlled by Galardi.

While accounting ledgers showed that the club made most of its money from alcohol sales to customers, Clifford I. Adams, an Onyx manager, testified that he never fired an exotic dancer because “girls make the club busy, as far as if you don't have enough girls in the building, your customers won't stay,” according to the order.

“To believe defendants' statement that 'Club Onyx does not profit from the dancers,' would require a juror to believe that the club's profit would be the same regardless of whether the club had any nude entertainment. The record presents no logical path to such a conclusion,” Judge Story said.

The defendants also said that they had made no real investment in the dancers' employment, since the dancers themselves paid to have their hair, nails and bodies look a certain way in order to pass “body checks” conducted by managers. Accounting ledgers showed that from 2007 to 2009, the club spent about $900,000 per year on equipment, advertising, maintenance and alcohol, but the most a plaintiff spent on her appearance was $50,000 per year.

The defendants argued that the definition of “employee” was broad but not intended to cover people who work for their own advantage at the establishment of another. But Judge Story said that was not the case here because of the degree of control the club owners and operators had over the work of the dancers.

“This is a trend we're seeing in these types of exotic dancer misclassification cases. These are very positive developments and we're seeing the trend move in favor of plaintiffs in these types of cases,” Prakash said Thursday.

On Aug. 1, a California judge gave preliminary approval to a settlement that would reimburse exotic dancers at a club in Los Angeles who claim they were erroneously classified as independent contractors and pressured into giving other employees a cut of their tips. And in April, a Washington judge ruled that five dancers at a Washington strip club were considered employees and were entitled to minimum wage.

Counsel for the defendants in the immediate suit did not immediately respond to requests for comment Thursday.

The plaintiffs are represented by Anna P. Prakash, Donald H. Nichols, E. Michelle Drake and Steven A. Smith of Nichols Kaster PLLP as well as by Jenny K. Mason of Campano & Sperling LLC.

The defendants are represented by Dean R. Fuchs and Susan K. Murphey of Schulten Ward & Turner LLP.

The case is Clincy et al. v. Galardi South Enterprises Inc., case number 1:09-cv-02082, in the U.S. District Court for the Northern District of Georgia.

--Additional reporting by Jonathan Randles. Editing by Eydie Cubarrubia.

Do we have to pay employees for checking e-mail outside of work?

2011-08-19T13:51:00.003-04:00

Franczek Radelet PC

Bill Pokorny

August 5 2011

Q. Our company provides remote access to e-mail for all employees, and some of our hourly employees carry iPhones and Blackberries with access to their work e-mail. Most non-exempt employees only work during regular business hours, but some will occasionally check and respond to e-mail after hours or on weekends. Do we need to pay employees for this time? If so, how do we track it?

A. Yes, employees need to be paid for time spent reading or responding to work-related e-mail. If this occurs only sporadically and the time involved is truly de minimus - for example, if the employee occasionally types out "Thanks" or "OK" in response to a short message - it may not be an issue. However, if you do not have any mechanism for employees to track and report this time, you may have no way to prove that the time spent was in fact minimal. When a disgruntled current or former employee files a complaint asserting that they worked an hour or two extra every week for three years, will you be able to prove otherwise?

There are several ways to address this problem. The safest approach from a wage and hour perspective, though perhaps not the most practical, is to limit remote e-mail access to exempt employees. If that is not possible, it is vital to adopt a policy requiring employees to report their time, and a realistic means for them to do so, either through manual timesheets, the company's timekeeping system, or some other means. Perhaps even more important than adopting policies is making sure that they are followed. Supervisors need to be trained to check employee time records against the work that they know (or should know) their employees are performing. HR or payroll should follow up and ensure that the supervisors are doing their jobs. If the policies are not followed, appropriate counseling and discipline should follow - both for any employees who fail to properly record their time, and any supervisors who fail to properly enforce the policy.

If you know that employees will regularly spend a certain amount of time per day checking e-mail outside of work, you can also adopt a policy providing a fixed amount of paid time outside of work for tasks like checking e-mail, in addition to the work time recorded for each day. For example, an employee who works 7.5 hours per day could be paid for an extra 15 minutes per day to cover any time spent outside of work checking e-mail. If the employee actually spends 15 minutes or less on e-mail, no additional pay will be due. However, any time worked in excess of the allotted 15 minutes would need to be paid, and the company would still need to provide a mechanism to report this time.