Human Resources (HR) Compliance

Back in 2011, I wondered aloud: Might the impact of new arbitration decisions from the U.S. Supreme Court bring about the end to big wage & hour class actions?

At the time, I said it would be premature.

Seven years later – what’s changed?

Well, as it turns out, wage & hour class actions are not dead. Indeed, based on some statistics, they’re as costly as ever.

Earlier this year, the Workplace Class Action Litigation report noted that just the top ten class action settlements totalled over $2.72 billion in 2017. I’d say the class action is still very much alive and well.

Yet there are still signs on the horizon that employers may be able to fight back a bit on these claims.

Late last month, the Ninth Circuit shot down a potential class action against Uber, on the grounds that the arbitration provision barred class actions.  

It’s a significant victory for the company and highlights a way for companies to push back against the threat of class actions.

But the company may still have another obstacle. According to The Verge, counsel for the Uber drivers, are encouraging the drivers to seek arbitration on an individual basis. Indeed, it is seeking thousands of them.  Consider it the “death by a thousand paper cuts” approach.  Will it work?

Stay tuned.  In the meantime, companies ought to still consider arbitration provisions with class action waivers as I noted earlier this year.

In the last few months, I’ve had some inquiries from employers asking about resources for layoffs.

Yawn.

Everyone remembers the layoffs of the recession, right?

Actually no, as it turns out.

In the ten years since the last great round of layoffs, there is a big group of new managers, directors, human resource personnel, lawyers etc that have joined the workforce.  And, as it turns out, they really DON’T remember the layoffs.  Unemployment is low. “Why would I need to worry about a Reduction in Force?

The stock market’s drop yesterday should remind all of us that good times aren’t always going to last.

What’s ironic about this is that back in 2008 — when the unemployment rate was skyrocketing — programs about reductions in force were just taking off and I noted the same concerns about whether employers were sufficiently aware of the issues.

History may repeat itself. Back then, I highlighted a few items that employers had to think about:

  • The WARN Act – If you’re doing a mass layoff, you need to notice affected workers in advance and provide notices to local and state officials.
  • Separation Agreements – If you want employees to sign a separation agreement (and you probably should), you need to give employees who are terminated in a layoff 45 days to consider an agreement and provide additional background information about the layoff itself.
  • Disparate Impact Analysis – With computers, checking your layoff data to ensure that it doesn’t have a disproportionate impact on protected groups (or, if it does, a legitimate business reason why it might) remains important.

Much of this remains valuable advice today.  And for employers who don’t remember this, now would be a good time to start your refresher courses.

Layoffs may not be right around the corner. But employers that are looking ahead in their business plans for 2019, would be wise to ensure that their staff are aware of the obligations that attach if the economy turns cold.

Lawyers love their cocktail chatter. And at a recent bar event, an interesting hypothetical came up among lawyers:

Suppose an employee is trying to get pregnant and is thinking about infertility treatments.  She’s considering time off for rest, and perhaps even for some in vitro fertilization (IVF) appointments. Perhaps even the doctor has said that the employee needs “light duty” work during certain days.   Maybe things are a little more hazy; suppose the employee just says that they are undergoing infertility treatment and needs some time off.

Is the employer obligated to provide such an accommodation?

The answers aren’t entirely clear.

Let’s go through some of the laws that may be implicated:

Employment decisions related to infertility treatments implicate Title VII under limited circumstances. Because surgical impregnation is intrinsically tied to a woman’s childbearing capacity, an inference of unlawful sex discrimination may be raised if, for example, an employee is penalized for taking time off from work to undergo such a procedure.

In doing so, the EEOC has cited to a Seventh Circuit case from 2008 which also found that the employer was liable for discrimination when it terminated employee for taking time off to undergo IVF.

  • ADA – Infertility may be an impairment that may “substantially limit” the major life activity of reproduction. Why is this important? Because it may then qualify the employee under the ADA as having a “disability”.   So, in such an instance, employers should review the “reasonable accommodation” portion of the statute. And the employer may decide that a day off for IVF treatment in “reasonable” under the circumstances.
  • State Laws – Connecticut has comparable laws on the subject as well.  Thus, employers should do the same analysis for CTFMLA and comparable state anti-discrimination laws as well.

But despite this, there are some courts — including the Second Circuit — that have found that a woman suffering from infertility does not have a medical condition related to pregnancy under Title VII and the Pregnancy discrimination Act because infertility is a condition that also affects many men as well.

Employers that have employees undergoing treatment for infertility should tread carefully in this uncertain area of law.  Each set of facts should be looked at on a case-by-case basis and consider enlisting trusted legal counsel for advice.

One of the benefits of writing a blog as long as I have is that you get to track the progress of a law or legal development over a number of years.

It was back in 2012, for example, that I first provided a comprehensive summary of a new medical marijuana bill that was making it’s way through the legislature.

And I was quick to note that the law had enough questions attached to it that employers would be wise to spent a late night or two studying all of the quirks.

Now, years later, we have the first case to look deeply at the statute. And for employers, the answers are becoming clearer.

My colleague, Chris Engler, recently recapped the case in a post on my firm’s sister blog.

The plaintiff in the case had applied for a job with a health and rehabilitation facility. The plaintiff ultimately received a job offer, subject to completing a background check and a drug screen. Prior to the drug screen, the plaintiff informed the company that she was a qualifying patient who used medical marijuana to treat her PTSD. Nevertheless, when her drug screen came back positive, the company revoked the job offer on the day before she was to begin work. Based on these facts, the court granted summary judgment for the plaintiff….

In rejecting the employer’s defenses in the new decision, the court addressed various important issues regarding [the law’s] non-discrimination provision. First, the court clarified that [the law] protects both an individual’s status as a qualifying patient of medical marijuana and that individual’s actual use of medical marijuana. However, the court pointed out that employers can still discipline employees who are under the influence at work.

The case can be downloaded here.  

As more people apply for cards to use medical marijuana, employers would be wise to understand the rules of the road before rejecting job applicants who test positive for marijuana on a drug screen.

Do you remember when the Target store data breach made news? This was not that long ago, and yet, five years later we’ve arguably become immune to the news.

Take Facebook’s latest snafu — 50 million accounts compromised.  And yet, it hardly made headlines for a 24 hour period.

Heck, even the U.S. State Department has had personal information about its employees breached in the last month — though “only” one percent may have been affected – so…yawn.

Have we become that immune to such breaches at this point?  Perhaps.

But that doesn’t mean that employers can let their guard down. Indeed, I would argue that new laws and regulations (including one in California) are making the job of employers even more challenging.

I’ll be talking about all of this at my firm’s upcoming Labor & Employment Seminar later this month with my colleague Ashley Marshall.  It’s scheduled for October 25th at the Hartford Marriott.

Here’s the formal program:

If You Collect It, You Must Protect It: Dealing with Employee Data Privacy Issues
Presenters: Daniel A. Schwartz and Ashley L. Marshall

Cyberattacks are on the rise and employers must take the necessary steps to protect employee data.  This session will address data protection worries of human resources and review state and federal laws and regulations pertaining to workplace privacy, including the Personnel Files Act, GDPR, California statutes, and HIPAA complaint releases. 

We’ve got several other topics being tackled too.  We are probably only a few days away from selling out so be sure to sign up for this complimentary seminar today.

Last year I talked about how the new era of sexual harassment claims was coming.  The open question was: Would the number of claims actually increase?

The answer to that is now known: Yes.

The Equal Employment Opportunity Commission released its preliminary data regarding workplace harassment today. And it’s findings shouldn’t be a surprise if you’ve been paying attention.

Among the notable pieces of data:

  • Charges filed with the EEOC alleging sexual harassment increased by more than 12 percent from FY 2017.
  • The EEOC recovered nearly $70M for victims of sexual harassment through administrative enforcement and litigation, up from $47.5M in FY2017.
  • Reasonable cause findings in harassment claims increased to nearly 1200, up from 900 in FY 2017.
  • And public interest is skyrocketing: The EEOC’s website traffic to its sexual harassment page more than doubled in the last year.

In Connecticut, the Commission on Human Rights and Opportunities hasn’t yet released their statistics on their website.  In years past, it’s been released in the fall — so stay tuned for that. But I anticipate hearing much more from the CHRO this month.

The CHRO is celebrating its 75th anniversary with a whole host of programs including one on Overcoming Barriers in Employment (I’ll be speaking at that one — details soon) and a #MeToo and LGBT Panel Discussion as well.

Interest in sexual harassment cases and actual cases show no sign of slowing down.  If anything, I would argue that public consciousness and awareness of these issues are nearing all-time highs.

Employers should continue to review their policies and procedures in this area and take another look at the training they are providing.

If you’ve been playing close attention, this blog has been a bit quiet of late.  Indeed, it’s probably the longest stretch between posts in the 11 years I’ve been doing this.

It’s not for lack of ideas.

Rather, after many years of spouting off (which, after all, is the underlying purpose of the blog), I found myself desiring to do a lot more listening.  Listening to employers. Listening to my colleagues. Listening to other lawyers.   And the only way to do that was to really stop writing for a while.

I don’t profess to have been original in this aspect.

I’ve admired a blog from afar that preaches this exact point — Listen Like a Lawyer by Jennifer Romig.  Just a few weeks ago, she highlighted the International Day of Listening — and the theme for this year of “Listening — even when you disagree.”

Imagine that.

But it’s really so true.  In employment law, listening can help employers and employees find common ground. Or, at least a better understanding of their respective positions and avoid lawsuits.

Yes, there’s the obvious examples of the claims of sexual harassment, but there also a whole host of other issues that arise in the workplace because one party isn’t doing the listening.

Take, for example, an employee’s performance. Sometimes, an employer will ask us for advice on a termination; the employee hasn’t been performing well and we want to terminate her performance. One of my first questions to the employers is: What have you communicated to the employee and what does she understand?

A few times I’ve heard — Well, I think the employee should know we’re not happy.

That’s where some employment lawsuits get formed.  They can be forged out of misunderstandings. Or they can be forged with the employer hasn’t communicated well with the employee and hasn’t listened to what the employee has to say.

And it goes both ways too.  No one likes hearing criticisms of their work; has the employee been listening to what you have been telling her?

It’s easy for all of us — in the mad scramble that we deal with on a day-to-day basis — to just try to plow forward. To think we know what’s best. Or to shut ourselves off from learning.

But listening provides one way for all of us to break through the background noise that seems ever present with smartphones, social media, and e-mail.

What strategies for listening have worked well in the workplace? And do they help you as an employer address employee-related issues?

Trying to follow both state and federal wage and hour laws isn’t that hard.

But it isn’t that easy either.

Let’s say you’re a restaurant with a waitstaff.  Like most restaurants nowadays, your customers pay by credit card and you, the employer, have to pay the credit card company a percentage on each sale.

You know there are rules regarding deductions of the wages to employees. But what about tips? Can you take out the percentage of fees being charged by the credit card company on the tips?

According to the U.S. Department of Labor: Yes.

In its fact sheet, the USDOL makes it plain that such actions by an employer do not violate federal law, so long as they are limited to the fees on the tips themselves.

Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA.

The DOL also has 2006 opinion letter bolstering its views here. Even Connecticut, in an unofficial guidance, permits the practice.

While that aspect is clear, the remaining aspects of tip pooling are still very much being debated.  According to a DOL Field Bulletin this spring, in the Conolidated Appropriations Act, 2018, the Act provided that certain other portions of DOL regulations that barred tip pooling when employers pay tipped employees at least the full FLSA minimum wage and do not claim a tip credit no long have further force or effect.

As a result, according to the DOL, “employers who pay the full FLSA minimum wage are no longer prohibited from allowing employees who are not customarily and regularly tipped—such as cooks and dishwashers—to participate in tip pools.”

And if that weren’t confusing enough, employers in Connecticut also need to comply with the Wage Order drafted by the Connecticut Department of Labor that has additional guidance on tip pooling.

Employers must continue to tread cautiously in the area of wages. Minefields continue to be ever present — and the impact of a failure to comply with the law can be costly.

 

Typically, in our court system, we operate under the “American Rule” which means that parties have to pay their own attorneys’ fees in cases, regardless of whether they win or lose.  (Contrast that with the English Rule which is a “loser pays” system.)

But there is one big exception to the American Rule — and it can be found in lots of employment law cases.   In several instances, the governing statute allows the prevailing party (or, in some instances, just the Plaintiff — read “employee”) to collect attorneys fees.

This is often seen in wage & hour claims, where an overtime claim may get dwarfed by a claim for attorneys’ fees.  One blog pointed out a few years ago in an FLSA case on “how attorney’s fees can grow to be the tail that wags the dog.”

A recent case out of the District Court of Connecticut also shows the impact in employment discrimination cases too.

The decision flows from a jury trial that awarded damages in an employment discrimination case to an individual suing a major employer.  Afterwards, both parties engaged in extensive post-trial litigation concerning attorneys’ fees, damages and more.  Ultimately, the court issued a ruling and then a final ruling after both parties asked for reconsideration.

The court awarded the Plaintiff in the discrimination claim the following:

  • Compensatory damages: $125,000
  • Punitive damages: $175,000
  • Economic damages (back pay): $ $243,711.89
  • Pre-judgment interest (on back pay): $15,665.37
  • Reinstatement

So, ultimately, the verdict is a little more than $550,000.

But the court also awarded attorneys’ fees.  And these fees far exceeded the verdict itself.

Grand total?  $973,083.50 in attorney’s fees and $30,960.24 in costs.

Such awards make employment cases unique animals in the law.  They provide extraordinary incentives to attorneys to not only take such cases, but pursue them.

For employers, the case is a difficult reminder that even when you value the case as somewhat small based on damages, the award of attorneys’ fees can add a substantial amount to what a case is worth.

 

Cars. Lots of really fancy cars.

That about sums up my Sunday in which I went to the Concorso Ferrari & Friends car event in West Hartford Center.  It has one of the biggest collections of ultra-expensive cars in the state — all to benefit the Connecticut Children’s Medical Center.

What I wouldn’t do to commute in the Pagani supercar! (Anyone have an extra $3 million lying around?)

Now, the odds on you commuting in a supercar and wondering if you’re getting paid by your employer are probably about the same as winning Powerball, but it’s still worth asking the question: Why don’t you get paid for commuting to work?

The answer lies in the law and something called the Portal-to-Portal Act. 

The Act states that employers are not required to pay for the time employees spend on activities occurring before or after (“preliminary or postliminary”) they perform the principal activities for which they are employed.

Thus, compensable working time generally does not include time spent:

  • Traveling to or from work.
  • Engaged in incidental activities before or after work.

A few years ago, an argument was made that state law ought to allow for some compensable travel time to and from work if the employee was travelling with tools.

The Connecticut Supreme Court rejected that interpretation saying such laws were pre-empted by the Portal-to-Portal Act.

And yet, the Connecticut Department of Labor continues to advance a regulation on travel time that, according to same court, “was not promulgated pursuant to any formal rule-making procedures or articulated pursuant to any adjudicatory procedures, has not been time-tested or subject to judicial review in this state.”

In any event, commuting with a supercar might be fun — but it doesn’t change whether you get paid for it under the law.