The United States Department of Labor today released new regulations that dramatically change the existing rules on when two businesses are “joint employers” under federal wage and hour laws.

I’ve previously discussed the changing rules in some prior posts here and here, so you should catch up there first if this is the first time you’re hearing about it.

The new rules impact so-called “horizontal” and “vertical” joint employment situations, although the DOL has changed the use of the terminology a bit.

In the horizontal situation, as now outlined by the USDOL rule, the employee has an employer but another person simultaneously benefits from that work. The other person is the employee’s joint employer “only if that person is acting directly or indirectly in the interest of the employer in relation to the employee.

How do you know? The USDOL has set forth four factors on whether this other person:

  1. Hires or fires the employee;
  2. Supervises and controls the employee’s work schedule or conditions of
    employment to a substantial degree;
  3. Determines the employee’s rate and method of payment; and
  4. Maintains the employee’s employment records.

In the vertical situation,  an employee works for one employer for several hours and another employer for a separate set of hours in the same workweek.  Why does this matter?

As the USDOL states in the regulation:

[I]f the employers are acting independently of each other and are disassociated with respect to the employment of the employee, each employer may disregard all work performed by the employee for the other employer in determining its own responsibilities under the Act. However, if the employers are sufficiently associated with respect to the employment of the employee, they are joint employers and must aggregate the hours worked for each for purposes of determining compliance with the Act.

So how do you know?

The employers will generally be sufficiently associated if:

  1. There is an arrangement between them to share the employee’s services;
  2. One employer is acting directly or indirectly in the interest of the other employer in relation to the employee; or
  3. They share control of the employee, directly or indirectly, by reason of the fact that one employer controls, is controlled by, or is under common control with the other  employer. Such a determination depends on all of the facts and circumstances.

And if that isn’t clear enough, the regulations state that “sharing a vendor or being franchisees of the same franchisor are alone insufficient to establish that two employers are sufficiently associated to be joint employers.”

Employers in Connecticut that are subject to federal law (that is, most of them), should review this rule carefully to ensure that you are on the right side of whatever line you want to draw (mostly, the non-joint employer side).

But as my former colleagues stated in a 2016 blog post, employers should always beware of Connecticut Workers Compensation Act rules which still may impose a different test:

The Act provides that when any principal employer obtains work to be done by a subcontractor as part of the regular work of the principal employer, the principal employer is liable for payment of workers compensation claims for injuries to employees of the subcontractor.

In that instance, the employers may still be joint under state law, but not federal.

For well over a decade, my first post each year has been a prediction about what the upcoming year will bring in employment. (The less said about my 2019 prediction to dust off the reduction-in-force guidance, the better.)

But there was a year when I didn’t make a prediction 2010 (except that I went “out of my way” to predict that we would not make contact with aliens. You need to read the post.)

So, another decade has gone by and yet I’ve still gone back to that post because it still seems meaningful 10 years later.   In it, I quoted from creator of LexBlog, Kevin O’Keefe — the blogging platform that this has been written on.

I’m going to take a page out of Kevin O’Keefe’s recent post entitled “Why Predict the Future When You Can Make It?” In it he repeats an oft-reminded, yet seldom followed, expression: The Future is What You Make Of It.  As he said: “Good luck in 2010. But remember luck is the residue of design and hard work.”

For employers, there will always been the next case or new law that will need to be tracked and followed, but employers that follow best practices in employment law can worry less about those developments and more about the big picture. The employers that can focus on attracting and keeping the best employees will succeed — no matter what the other developments are during the year.

With that, I wish you all a very Happy New Year.

I think that’s pretty spot on, even a decade later.  This is not to say that you don’t need to be up to speed with all the developments going on. But use 2020 to look at the big picture; sure, sweat the small stuff, but show your employees that you are working to get things right and you’ll go a long way to reducing your legal exposure.

Consider it your first resolution of the year.

Six months after a little-noticed bill passed unanimously by the General Assembly (and was then vetoed by Governor Lamont), a new compromise measure passed yesterday in a special session.  For a full article, check out CT Mirror’s coverage here or CTNewsJunkie here.

The bill uses some of the same concepts that had been previously discussed, particularly at a public hearing in October. But the bill tries to address the issue in a more nuanced way. Perhaps the biggest concession that was made is that existing class actions on wage and hour laws challenging the so-called “dual duties” regulation may proceed though with limits.

You can read the bill here. Governor Lamont has indicated that he will sign the measure. 

Here are the other key provisions:

  • The biggest takeaway is that the bill requires the Department of Labor to revisit a 1950 regulation that has been interpreted by some as requiring time that a server spends on “non-service duties” be segregated.  Despite this regulation, the DOL had guidance that many restaurants had relied upon that said that segregation wasn’t necessary if less than 20 percent of the servers time was on “non-service duties”.The DOL must propose a “notice of intent” to modify the regulations by April 1, 2020 and, in making its proposal “shall consult with representatives of the restaurant industry, restaurant employees, service employees and other interested stakeholders prior to posting such notice.”  The DOL must also consider other state and federal guidance on the subject too.
  • As noted in the OLR’s bill review:  “The bill removes the court’s authority to award attorney’s fees in civil actions alleging wages owed under the current dual duties regulation if the employer had a good faith belief that the wages paid were legal. It specifies that a good-faith belief can include reasonable reliance on written DOL guidance. It does not change the award amounts and attorney’s fees permitted for cases that do not involve a good-faith belief by the employer.
  • The bill also places key restrictions on class action lawsuits including both current and future claims. Specifically,
    “No person may be authorized by a court to sue for the benefit of other alleged similarly situated persons in a case brought for violations of section 31-62-E4 of the regulations of Connecticut state agencies, unless such person, in addition to satisfying any judicial rules of practice governing class action certifications, demonstrates to the court, under the appropriate burden of proof, that the defendant is liable to all individual proposed class members because all such members (A) performed nonservice duties while employed by the defendant, for more than a de minimis amount of time, that were not incidental to service duties, and (B) were not properly compensated by the defendant for some portion of their nonservice duties in accordance with section 31-62-E4 of the regulations of Connecticut state agencies.”
  • Importantly, within 30 days after adoption of the new regulations, per an amendment to the bill that was also passed, the DOL will start conducting “random wage and hour audits of tipped workers” in at least 75 restaurants and prepare a report within a year to the legislature’s Labor committee.   The amendment also allocates funds to hire three more investigators.

For restaurants, the bill is a mixed bag.  Those involved with existing litigation will still have to address those claims in a judicial forum; however, the bill provides a needed “reset” to the existing rules.

It may not be the perfect solution that restaurants wanted after slipping the provision in unnoticed earlier. But it is a compromise that will pay dividends in the future without as much likelihood of a repeal too.  Sometimes you take a step back, to take two steps forward.

As someone who grew up in Connecticut and watched Channel 3 news religiously (at least before the internet), Denise D’Ascenzo, the local news anchor who passed away suddenly on Saturday, was one of a kind.  She was professional, authoritative, knowledgeable, and humble.

I loved watching her both on the news and during the yearly Muscular Dystrophy telethons that she and weatherman Hilton Kaderli used to host every Labor Day.

I didn’t know her other than meeting briefly at a local event or two, but like many viewers, she became one of those people who could you rely upon in times of need.  It’s hard for me to imagine local Hartford news without her steadying presence.

It is a testament to her amazing career that her connection to one of the most famous employment discrimination cases in the state is now merely a footnote.

Back in 1999, former Channel 3 news anchor Janet Peckinpaugh prevailed in an $8.3 million jury verdict contending that her replacement as the prime-time news anchor for the station violated a variety of employment laws. A federal court later reduced the verdict and the parties reached a confidential settlement later that year that vacated the verdict too.

Her replacement? A younger Denise D’Ascenzo.

The station’s manager testified at the time that market research convinced management that D’Ascenzo would team better with Al Terzi over Peckinpaugh.

D’Ascenzo’s longevity in the Hartford market — exclusively with Channel 3 it should be noted — showed how prescient that research would be.

At the time, the case had it all. A sexual harassment allegation years earlier against another popular television anchor Al Terzi.  Testimony from Connecticut Supreme Court Justice Richard Palmer who was romantically linked to Peckinpaugh years earlier.  Gayle King — yes, Oprah’s best friend and CBS This Morning anchor — was subpoenaed to appear too.

And the jury’s verdict remains one of the highest ever awarded for an employment law case in this state.

Years later, a Fox 61 news anchor would also bring suit alleging discrimination and it was the Peckinpaugh case that was brought up as the precursor to the suit.

20 years after the Peckinpaugh verdict, what people will thankfully remember about D’Ascenzo is a wonderful career rather than this employment law footnote.  This moving report by her long-time fellow anchor Dennis House will stay with me for a long time.

I often tell people involved with lawsuits that while their case seems important, it will be relegated to history in time.  Denise D’Ascenzo’s staying power and the fact that few remember the Peckinpaugh lawsuit today are another example about how lawsuits aren’t what truly defines us.

Farewell Denise D’Ascenzo and my sincere condolences to all my news friends who knew her and worked with her.

(Note: I was an associate at the firm that represented Channel 3 during Peckinpaugh’s lawsuit though I was not involved in the case at the time.  All references to the case are based off public reports at time.)

It’s been far too long since our last installment from March 2019, but my ongoing dialogue with Nina Pirrotti, a prominent plaintiff’s-side employment law attorney, is back. In this post, we talked about the highlights from 2019 with a sneak peek at 2020.  My thanks to Nina for her contributions. You can find her firm’s blog posts here as well.  

Dan:  Nina! Good to talk with you again here.  I hope you had a great Thanksgiving; mine was full of turkey, stuffing and even skiing.  But we have so much to talk about. It seems that 2019 has been a busy year in employment law which is kind of surprising because the economy keeps rolling on. I thought we’d look back on 2019 and look ahead to 2020.

From my perspective, it’s tough trying to recap 2019 in just one or two paragraphs. The most obviously trendline to me sees to be that the #metoo movement shows no signs of abating or of a backlash.  And for people like both you and me who care about social justice, this is a great thing. Real change to root out sexual harassment has been long overdue. We’re now going to see training mandated at basically all workplaces and other changes.  But will it be enough or will it stall out in 2020?

Paid FMLA is obviously another big topic but we’re really not going to see those changes until at least 2021.  What else stands out to you from this past year?

Nina: A warm hello to one of my favorite sparring partners.  It is so great to rekindle our feisty exchanges!

Well, Dan, as you may have guessed from the two articles I wrote for the Connecticut Law Tribune in October 2018 and mid-March 2019, the critical issues raised by the #MeToo movement continue to loom large for me this year.

While we have on rare (and much publicized) occasions, seen the pendulum swing too far in the other direction, (See e.g. “’Survivor’ Contestants Apologize After #Me Too” Backlash”), the movement has largely been a force for healthy, overdue change. Continue Reading The Dialogue: A Busy Year in Employment Law in 2019 with a Look Ahead to 2020

  • Did you hear about the guy who went into a rage when he got the shorter end of the wishbone?
    He just snapped!

In prior posts, I’ve described how Valentine’s Day and Halloween have been fowl holidays for employers.  Many a harassment or discrimination complaint has been based on those holidays.

But what about Thanksgiving? Everyone loves it, right?

Gobble gobble.

A search for some cases was as easy as, say, pumpkin pie.  And yes, there are aspects of this holiday that have led to lawsuits:

  • In 2015 and 2016, federal courts rejected claims of discrimination by an Hispanic Customs and Border Protection Officer who was forced to work on Thanksgiving, while allegedly junior and non-Hispanic officers did not.  The court mashed that small potatoes argument up saying there was no evidence that he was treated differently because of a protected characteristic.
  • The denial of vacation around Thanksgiving was also used in an over-stuffed argument but the court quickly melted that buttery claim by saying “the denial of one vacation request is simply not serious and tangible enough to materially alter Plaintiff’s compensation, terms, conditions, or privileges of employment.”
  • While some employees complain about having to work Thanksgiving, others say that the failure of the employer to schedule the employee to WORK on Thanksgiving is discriminatory too. But the court had a tough thyme with that argument.
  • Then there is a case of a movie theater’s President who complained about having to go over to his grandmother’s on Thanksgiving and said “I just don’t want to be—I don’t like to be around old people.”  A jury found that one of the theater’s employees had proven age discrimination in part because of that comment. Oh, and a comment about a “concentration camp” was just gravy on top.

There are more, of course, but most of them are turkeys — never making it past a motion to dismiss or a motion for summary judgment.  Indeed, courts have had little patience for claims arising from this holiday.

So, we’ve come to the end of the post and I’ve run out of Thanksgiving Day puns.

I wish you, your families and your workplaces a very Happy Thanksgiving! I’ll start to look back on 2019 after the holiday and start to look ahead as to what 2020 may bring.

As the decade comes to a close, a time traveler from 2009 might be surprised to see how rapidly laws on marijuana have changed.  Last night’s Democratic Debate even featured a heated discussion about legalizing marijuana.

But let’s imagine that this traveler is from Human Resources. The laws regarding medical marijuana are head-spinning; these laws have resulted in a significant impact in the areas of drug testing, hiring, discipline and ADA accommodations.

Now add the fact that a neighboring state – Massachusetts – has legalized pot and, well, no wonder HR professionals are just trying to play catch up.

Oh, and will Connecticut join Massachusetts in 2020 and legalize pot?

I’ll try to make sense of all of this at an upcoming breakfast sponsored by the Western CT chapter of SHRM. The breakfast is set for December 11, 2019 at 8 a.m. at the Hampton Inn in Danbury.  I’ve even been promised a hot breakfast.

In the interim, I recently came across an excellent slide deck produced by the Connecticut Department of Labor on drug testing. I recommend it as required reading to understand the benefits (and limits) of such testing.   Kudos to Stephen Lattanzio over there for making this resource available for all employers.

 

First off, let me dispense with the elephant in the room — Yes, the show “Survivor” is still on the air and yes, I haven’t missed any of the 39 seasons of it.

In fact, I shared lessons that employers could learn from Survivor way back in 2010.

Last week’s episode of Survivor, however, brought far more reality than most would think a “reality show” could or should bring.

There’s a lot of nuance to the episode that a short blog post can’t get into (though this podcast by Rob Cesterino gives it a try), but the show’s episode revolved around legitimate sexual harassment claims, using harassment claims for nefarious purposes, and bystander syndrome.

And it was ugly. Really ugly.

Why?  Here are a few things that stood out to me from an employment perspective:

First, a female player (Kellee) complained to a producer that another male player (Dan) was a little too “touchy” and made her feel uncomfortable. To be sure, there was plenty of video evidence to back her up.   The male player was given a “warning” and play continued.  But here’s the thing: The female player never knew that a warning was issued and Dan worked with others to get Kellee voted out of the game immediately thereafter.  Not telling the complainant what was going on with her complaint is just one of the ways the producers seem to have mishandled things.

Continue Reading Sexual Harassment Prevention Lessons from the Television’s “Survivor”

Last Friday, I had the opportunity to talk about Artificial Intelligence in the Workplace at the CBIA’s HR Conference.  There was a lot to cover in our discussion and a lot of takeaways too.

For those in Human Resources or in-house lawyers reviewing a company’s potential use of AI in the workplace, here are three areas of concern to think about.

  1. Bias in Recruiting Efforts.  Some areas of AI are further along in adoption than others. One of those areas is in recruiting. Already, there are companies that are marketing services to review hundreds (or thousands) of applicants and give each candidate a “score” based on multiple factors.The potential pitfall is that the output from some of these systems may have a disparate impact on a protected group. The most notable example was a system being developed (and rejected) by Amazon that did not like women.  Thus, HR needs to have a seat at the table when these systems are being considered.  How is the output from any AI algorithm being reviewed and analyzed? Whose responsibility is it to ensure that the law is being followed?
  2. Monitoring Existing Employees.  No longer are employers just checking when employees are punching in or punching out on time. With AI, employers can now monitor nearly everything about an employee’s day. Think about a system that can monitor keystrokes, can analyze the content of e-mail and text messages, can track how long employees are taking breaks and where, and even the employee’s social media content.  And then such a system could predict – is an employee happy? Being productive? Thinking about leaving?While such a system seems far into the future, the truth is that AI is being used NOW for some of these same things. Being the potential for bias being introduced, such a system raises important privacy considerations. In Connecticut, we have an electronic monitoring statute that requires employers to notify employees of the types of monitoring being used. But in Europe, such a system might also implicate GDPR.  And do employees have any remaining expectation of privacy in the workplace? Thinking about this issues holistically before creeping implementation is critical.
  3. Automation and Job Replacement.  Have you met Marty? It’s one of the robots deployed at Stop and Shop to patrol the aisles and assist customers.  (Or, maybe you haven’t met Marty because you do all of your grocery shopping online now).  It might seem a bit foreign for now, but think about the robots that can (and will?) be deployed in the workplace. Imagine one that can go to each employee to determine if he or she has filled out the forms in Open Enrollment and can process all of the data to make sure it matches the information the employer already has.  Or what about a system that will automate the on-boarding process for new employees?   What will HR be needed for in the future?Think this is just fantastical? I think back to the law offices of 25 years ago with big word processing teams, librarians, and more.  It’s far different now. Why? Because automation and technology rest for no one.  Human Resources is no different.   Yet, it will likely lead to roles where higher-level analysis is needed and where a “human touch” is still preferred.  Still, where there is going to be job replacement, employers should document the decision-making process to avoid legal claims.

As one of my co-presenters from Tallan, Doug Smith, said: We are going through yet another technology revolution in the workplace.  HR and Employment Law will continue to need to evolve to play a role in this new workplace.

Somewhere, some employer might be thinking: Hey, why don’t I make employees sign a promissory note to pay me back if they leave before six months! That would be a great idea!

It would also be against the law.

Thus, the next installment of the Employment Law Checklist Project #emplawchecklist.  The law is set forth at Conn. Gen. Stat. Sec. 31-51r. The key prohibitions are set forth in subsection (b) and (c) as follows:

(b) On or after October 1, 1985, no employer may require, as a condition of employment, any employee or prospective employee to execute an employment promissory note. The execution of an employment promissory note as a condition of employment is against public policy and any such note shall be void. If any such note is part of an employment agreement, the invalidity of such note shall not affect the other provisions of such agreement.

(c) Nothing in this section shall prohibit or render void any agreement between an employer and an employee (1) requiring the employee to repay to the employer any sums advanced to such employee, (2) requiring the employee to pay the employer for any property it has sold or leased to such employee, (3) requiring educational personnel to comply with any terms or conditions of sabbatical leaves granted by their employers, or (4) entered into as part of a program agreed to by the employer and its employees’ collective bargaining representative.

Scope:  And here we have yet another definition of what an “employer” is! For this statute, it is “any person engaged in business who has twenty-six or more employees, including the state and any political subdivision thereof.”  Why 26? Why not.

What’s Prohibited or Required? Employers can’t require — as a condition of an employment — that an employee sign an “Employment Promissory Note”.

So what’s an “Employment Promissory Note”? It means “any instrument or agreement … which requires an employee to pay the employer, or his agent or assignee, a sum of money if the employee leaves such employment before the passage of a stated period of time.”  This would include any requirement that such payments would be reimbursement for employer-provided training.

Are There Any Exceptions? Yes, agreements that merely mandate that an employee repay an advance by the employer is permissible, as well as agreements that require the employee to reimburse the employer for anything sold or leased to the employee (such as a house.).  Sabbaticals and agreements under a collective bargaining agreement are also covered by this exception.  And note, this is only prohibiting such notes as a condition of employment.  Nothing in this statute talks about sign on bonuses and even attorneys that represent employees typically find such provisions unobjectionable.  

Private Right of Action or Other Penalty Allowed? No.  The statute simply says that such agreements are against public policy and are void.  But it’s possible that a court might entertain a “declaratory judgment” action to rule that an agreement is, in fact, void.  As a practical matter, though, the biggest takeaway is that such agreements aren’t going to be enforceable.

What May Be Recovered? Nothing.

Any Practical Steps Employers Can Take? Yes.  Double check your onboarding documents to make sure you are in compliance.  If you use signing bonuses, make sure that they are not really just “promissory notes” in disguise.  And anytime you loan an employee money, check with a lawyer to make sure the documentation complies with the law.

Any Other Interesting Information or Background? Not really. What you see with this law is really what you get.