My law partner, Gabe Jiran, talks today about whether it’s all that easy to change the terms of a collective bargaining agreement.  Is it just as easy as a vote? Or does it require something more? The answer has implications for all employers.  

With all of the talk about the financial difficulties faced by the government, I, and others in here, sometimes get the question of whether the State of Connecticut or other states might try to change the laws on collective bargaining or try to pass legislation to alter the terms of its existing collective bargaining agreements.

Other states have started down this road, but it is not that easy.

Recently, the Connecticut Attorney General was asked to opine on whether the General Assembly could statutorily change the contracts covering State employees to address the fiscal crisis.  A link to the opinion is here.

The short answer is that the State could do so, such as by passing a statute that wage increases be delayed or eliminated in State contracts.

However, the United States Constitution imposes a pretty heavy burden on the State to justify any such changes.

The relevant factors are:

  1. the severity of the fiscal crisis;
  2. the nature and duration of the contractual changes;
  3. the extent that the State has attempted to implement other alternatives in the past;
  4. the extent to which the State has studied and made findings about the feasibility of other alternatives;
  5. whether these alternatives would be a less dramatic option;
  6. the extent to which the fiscal crisis existed or was foreseeable when the State entered into the existing contract; and
  7. the State’s representations during negotiations for the existing contract.

Based on cases utilizing some or all of these factors, the State would face an uphill battle if it wanted to change an existing contract.

For example, a federal appeals court struck down the State of New York’s plan to delay wage increases for employees because New York had alternatives such as raising taxes or shifting money around in its budget.  In another New York case, the same court found that a $1 billion deficit was not a dire enough fiscal crisis to justify a delayed wage increase.

However, one case found that the City of Buffalo was able to impose a wage freeze when it was undeniable that Buffalo was in a fiscal emergency and that the wage freeze was a last resort after looking at other options.

In discussing the matters with others here, we expect that Connecticut and other states will continue to look for creative options to address their financial situations with employees.

However, it is doubtful that these options will involve changes to existing contracts without negotiation with the unions involved.  In addition, any State attempts to change contracts in the private sector would be almost certain to fail.

My colleague, Gabe Jiran, returns the blog today with this quick post updating us on where things stand on the DOL’s proposed changes to the overtime rules (and providing me with an excuse to link to one of the few songs to mention “overtime” in the title.)

As you may recall from some of the prior posts here, employers scrambled to address the Department of Labor’s changes to the salary threshold for white collar exemptions under the Fair Labor Standards Act.  That change would have increased the salary threshold from $23,360 to $47,476 annually in December, 2016.

However, several states challenged this increase, resulting in a federal court in Texas issuing a nationwide injunction stalling the increase.  Of course, many employers had already made changes to address the increase, but the injunction still stands.

Then the election happened. Which changed everything.

Now, the DOL under the new Trump administration has indicated that it will not advocate for a specific salary level under its regulations, but will instead gather information about the appropriate salary levels.

The DOL has thus issued a request for information to get feedback, which can be accessed here.

What does this mean for employers? While this process will most likely result in an increase in the salary levels, it seems that the DOL will do so based on responses to its request for information rather than arbitrarily setting a salary level.

For now, employers should continue to follow the current regulations and the $23,360 salary level while, of course, also following the Connecticut guidelines where applicable too.

But stay tuned here: Developments in this area now seem on the way.

file101235857424For the last six years, you haven’t seen much on this blog about changes to federal employment laws because, well, there just weren’t any.  What we DID see, however, were changes to regulations and enforcement orders.

Nearly six months into the new Trump administration, we’re now starting to see significant shifts in the federal regulatory scheme too.

A lot of national employment law blogs have been starting to recap them so I’m not going to go too in depth here. Among the changes? A death-knell to the persuader rule, and, earlier this month, a pullback of guidance on joint employment and independent contractor rules.   And it looks like the overtime rule changes are still in limbo as well, with the DOL “rethinking” such rules in news articles this week.

You don’t need to have a law degree to understand that these changes will favor companies.

Last night too, the Trump administration named the final member of a new National Labor Relations Board who will, no doubt, start rolling back other labor law decisions that have favored employees and labor unions as well.

But what will the impact be in Connecticut?

It’s still a bit early to tell, but I think the impact may be muted in some ways. After all, we have a CONNECTICUT Department of Labor that still marches to its own drum.  For example, it has taken a pretty aggressive view on who is (or is not) an employee vs. an independent contractor.

Indeed, as I’ve discussed before, the Obama-era rule changes might have, in fact, helped level the playing field for some Connecticut employers who have felt that they have had to comply with stricter Connecticut rules which made them less competitive nationwide.  With the rollback of some of these rules at the federal level, Connecticut’s higher standards may come back into play more often.

That may be overstating it a bit, but Connecticut employers will have to play catchup to figure out the patchwork of federal and state regulations and the interplay between them.

Perhaps it is more fair to say that things are still shaking out this year for Connecticut employers.  The General Assembly session that just ended was more quiet than most.  But at a national level, employers shouldn’t be too quick to make too many changes because there seems to be many more aspects in flux than in years past.

The only thing I’ll predict for the next six months is that we have all the ingredients in place for a wild roller coaster ride with more changes than we’ve seen in some time.

So buckle up.   Things are just getting interesting.

GA2Today is the last day of the Connecticut General Assembly regular session.  So it’s a good time to take a look at some of the bills pending or passed.  Strangely, things seem pretty quiet on the employment law front.  But after the dust settles, I’ll have another update. Here is where we stand as of early this morning (Wednesday).

  • Last night, the Senate approved of the measure (House Bill 6668) expanding protections in the workplace for workers who are pregnant.  It was previously passed by the House.   I’ve covered the bill in depth before but it now goes on to the Governor for his signature.  The bill, if signed, would become effective October 1, 2017.
  • The House also passed a measure last night (H.B. 6907) that exempts certain professional drivers from coverage under the state’s unemployment law.. The exemption applies to drivers under a contract with another party if the driver meets certain conditions. The measure moves to the Senate but given the backlog of bills today, final passage is definitely unclear.
  • The Senate last night passed a measure (H.B. 7132) that streamlines procedures for filing workers compensation claims.  Currently, the law generally requires private-sector employees seeking workers’ compensation benefits to submit a written notice of claim for compensation to either a workers’ compensation commissioner or their employer’s last known residence or place of business. This bill requires private-sector employees who mail the notice to their employer to do so by certified mail. It also allows employers, except the state and municipalities, to post a copy of where employees must send the notice (presumably a specific address). The posting must be in a workplace location where other labor law posters required by the labor department are prominently displayed.  Under the bill, employers who opt to post such an address must also forward it to the Workers’ Compensation Commission, which must post the address on its website. Employers are responsible for verifying that the information posted at the workplace location is consistent with the information posted on the commission’s website.By law, within 28 days after receiving an employee’s written notice of claim, an employer must either (1) file a notice contesting liability with the compensation commissioner or (2) begin paying workers’ compensation benefits to the injured employee (and retain the ability to contest the claim for up to a year). Employers who do neither of these within 28 days of receiving the notice are conclusively presumed to have accepted the claim’s compensability. Under the bill, if an employer posts an address where employees must send a notice of claim, the countdown to the 28-day deadline begins on the date that the employer receives the notice at the posted address.The bill now moves to the Governor for his review and approval.
  • The General Assembly is also continuing to review a possible Paid Family and Medical Leave insurance scheme.  This bill (S.B. 1) is definitely one to watch over the next day and over any special session as well.
  • Senate Bill 929 would expand whistleblower protections under 31-51m. It has passed the Senate and is awaiting a vote in the House.  Existing law prohibits employers from discharging, disciplining, or otherwise penalizing an employee for certain whistleblowing activities, including reporting suspected illegal conduct to a public body.  This bill additionally prohibits employers from taking such actions against an employee for objecting or refusing to participate in an activity that the employee reasonably believes is illegal. Specifically, it applies to such beliefs about violations or suspected violations of state or federal laws or regulations, municipal ordinances or regulations, or court orders. The bill also (1) extends the time an employee has to file such a lawsuit and (2) adds to the possible remedies available to employees, including punitive damages in certain circumstances.

That seems to be it so far. A lot can change though today and employers should continue to be mindful of the shifting landscape. Even bills that appear “mostly dead” sometimes come back to life at the end — and particularly in special session as well. So stay tuned.

GA2Yesterday, the Connecticut House of Representatives voted to pass legislation that would promote pay equity among men and women. However, the bill lacks a key provision that would have barred prospective employers from inquiring into an applicant’s salary history.

The CT Mirror and Hartford Business Journal do a good job reporting on the developments. The bill would:

  • “Ban employers from using a worker’s previously earned wages as a defense against a charge of pay inequity;
  • Protect employees from losing seniority based on time spent on maternity or other family or medical leave;
  • Strengthen the requirement that employers provide “comparable” pay for workers performing similar duties;
  • Clarify the state Commission on Human Rights and Opportunities’ ability to investigate complaints of discrimination when wages are involved.”

The Senate remains split along party lines, but the changes made to the bill make passage much more likely now.

The bill, House Bill 5591, can be downloaded here.

It’s unclear how much of an impact the bill will have. For example, the bill changes Conn. Gen. Stat. 31-75 that bars discrimination for work performed under “comparable” working conditions. Previously, the standard was “similar”.

But even the Office of Legislative Research was skeptical about this change noting “It is unclear whether this change has any legal effect.” After all, one definition of comparable is “(of a person or thing) able to be likened to another; similar”.

Moreover, many employers do not base pay on a “seniority system” but instead focus on merit instead. Thus, any changes to the statute on the “seniority system” will have minimal impact.

In any event, before employers act, it’s wise to wait to see what happens in the Senate. Any changes to the law would be effective October 1, 2017.  

 

 

file0001835967537The Connecticut Supreme Court, in a unanimous decision that will be officially released April 4, 2017, has ruled that employers may not use the “tip credit” for pizza delivery drivers and therefore, the employees must be paid the standard minimum wage.

You can download the decision in Amaral Brothers, Inc. v. Department of Labor here.  The decision is no doubt a disappointment to employers who believe that the Connecticut Department of Labor’s regulations in this area far outstretch the plain language of the applicable wage/hour statute.

The case arises from a request by two Domino’s franchises for a “declaratory ruling” from the Connecticut Department of Labor (DOL) that delivery drivers are “persons, other than bartenders, who are employed in the hotel and restaurant industry, …who customarily and regularly receive gratuities.” The request arises from Conn. Gen. Stat. §31-60(b), which has been amended over the years.

Why would the employer make such a request? In doing so, the employer wanted to take advantage of the “tip credit”, in which employees are paid below the conventional minimum wage, but his or her salary is supplemented by tips from customers.

Originally, as noted by the employer’s brief to the Court: “The DOL denied Plaintiff’s Petition for the following stated reasons: (1) the regulations were valid because they served a remedial purpose, were time-tested and subject to judicial scrutiny…; and (2) the only act of “service” was handing the food to the customer at the customer’s door and so delivery drivers’ duties were not solely serving food as required under Regulations of Connecticut State Agencies § 31-62-E2(c). The DOL’s decision was that only employers of “service employees” as defined by the DOL could utilize the credit, and Plaintiff’s employees were not service employees.

A lower court upheld the DOL’s conclusions “agreeing that the regulations were ‘reasonable’, ‘time tested’, and had ‘received judicial scrutiny and legislative acquiescence’. The court also determined that the ‘minimum wage law should receive a liberal construction.'”  (You can also view the DOL’s brief to the Court here.)

The Connecticut Supreme Court upheld the Department of Labor’s interpretations here finding that the regulations issued by the agency were “not incompatible” with the enabling statute.  In doing so, the Court noted that this is a bit unusual because the employer was contending that the regulations were originally valid when issued, but repealed by implication when there was an amendment to the statute at issue.

The Court’s decision traced the origin of the tip credit in a portion of the decision that only lawyers will love. But then they get to the heart of the matter: “It was reasonable for the department to conclude that the legislature did not intend that employees such as delivery drivers, who have the potential to earn gratuities during only a small portion of their workday, would be subject to a reduction in their minimum wage with respect to time spent traveling to a customer’s home and other duties for which they do not earn gratuities.”

While the court’s decision directly implicates delivery drivers, it only impacts those employed directly by the employer (see also: UberEats, GrubHub etc.).  Nevertheless, in upholding the DOL’s interpretation here, the scope of who falls within the tip credit at restaurants is going to be further challenged in the courts.

Before employers make any further conclusions, Connecticut businesses should also be aware that the scope of the tip credit and of tip pooling is being debated at the federal level as well.  The National Restaurant Association has joined many others in asking the U.S. Supreme Court to hear a case on the subject. We should hear shortly whether the Court will accept such a case.

The Court’s decision is yet another reminder that restaurants in Connecticut should review the situations in which the tip credit is being utilized. Issues regarding tip pooling should be reviewed as well.  This case doesn’t answer all the questions that come up in the restaurant context. But in terms of figuring out the scope of the law, it helps to answer (albeit in a manner not helpful to employers overall) some outstanding questions.

capitoldasIt’s a challenge for employers to keep up with changes to employment laws. What’s the current status? What do I need to change?

So, here are four quick things you can look at right now to ensure that you are up to compliance in Connecticut.

  1. Connecticut increased the minimum wage effective January 1, 2017.  It’s now up to $10.10 per hour. Are all your employees now at that minimum wage?
  2. Connecticut’s new Fair Change Employment Law went into effect January 1, 2017.  That means that most employers are not allowed to ask about a prospective employee’s prior arrests, criminal charges or convictions on an initial employment application unless the employer is required to do so by state or federal law, or a bond is required for the position for which the applicant is seeking.  When did you last update your employment application? 
  3. Last summer, Connecticut updated it’s state family & medical leave law to mirror federal FMLA law that allows an employee to take a leave for a “qualifying exigency”.  Recall too that Connecticut allows employees to take leave in order to serve as an organ or bone marrow donor. When did you last update your FMLA policy?
  4. Effective October 1, 2016, employers may now offer the use of payroll cards to deliver wages so long as the employee “voluntary and express authorizes” the payment of wages by that method and the employer provides a “clear and conspicuous notice” to employees about the use of it.  Have you updated your notices and have your received authorizations from your employees on the use of payroll cards?

 

If at first you succeed, try it again. 

Well, that may not be how the saying goes, but the first back-and-forth post between me and Nina Pirrotti, an employee-side attorney, was so well received that we’re back for another conversation. 

Today’s topic: What legislation are we both keeping our eyes out for at the Connecticut General Assembly?  

The Dialogue Begins

Dan Schwartz: So Nina, our first post was such a hit that I think we’re due for an encore.  Thanks for being up for this.

It has only bewn a few weeks, but it feels like we’re moving at warp speed on developments.  We could spend another post just on The Donald, sorry, Mr. President. Somehow I think we’re likely to talk about that again soon.

But let’s focus today on some of the legislative items we’re keeping an eye on, particularly in Connecticut. Each year, it seems like our General Assembly likes to roll out fresh employment law ideas.

Is there a particular bill that you’re keeping your eye on now from an employee-side perspective?

nina_t_pirrotti1-150x150Nina Pirrotti: I’m so glad you asked!   Yes, let me tell you about one bill that has been on my mind on the federal level (I am speaking about it at an ABA conference in sunny Puerto Vallarta really soon) and then I will give you a couple of highlights from our backyard.  

The federal bill that looms large for me right now (although concededly perhaps not as large as the prospect of sitting on the beach, tequila based beverage in hand) is the misleadingly named  Lawsuit Abuse Reduction Act (“LARA”) which would force judges to respond to Rule 11 motions in a particular manner. 

Rule 11 allows for the possibility of sanctions to be imposed on attorneys or parties who submit (or later advocate for) pleadings which have been filed for an improper purpose or which contain frivolous arguments or claims. 

While Rule 11 motions rear their ugly heads relatively rarely in litigation, a newly invigorated Republican majority in Congress has proposed LARA which would amend the sanctions provisions in Rule 11 to remove all judicial discretion – – regardless of the circumstances of the individual case- – in two critical respects. 

First it would require the court to sanction any attorney, law firm, or party who violates the rule.  Second it forces judges who find the rule has been violated to order the offending party to pay  the other party’s attorneys’ fees and costs.  Those in my world who oppose LARA say that there is no proof Rule 11 is not working in its current form, that the changes would burden the courts and that  its “once size fits all” mandatory sanctions would unfairly penalize employees in civil lawsuits.

Closer to home, two bills come to mind.  The first is a proposed modification of C.G.S.A. 31-51m, a statute which bars employers from retaliating against employees who report  employers’ unethical or legal wrongdoings to public bodies. 

The modification seeks to  protect employees who complain about such conduct internally or who refuse to participate in an activity they believe to be in violation of the law.   It also seeks to extend the timeline to bring an action under the law (employees now have only 90 days to file) and to provide for a greater array of damages if the employer violates the statute.

The second is a proposal to provide eligible employees with paid Family and Medical Leave Act leave.  The proposed legislation would require employees to contribute 1/2 of 1% of their wages to it (there would be no employer contribution) and employees cannot opt out it.   

We plaintiff employment lawyers would welcome both pieces of legislation as long overdue and reasonably tailored to protect Connecticut’s workforce.

What are your thoughts from the other side of the aisle, Dan?    Or is there other proposed legislation that has captured your attention?

Continue Reading The Dialogue: What Legislation We’re Keeping Our Eyes On

justiceI’m back with news of a relatively big decision today from the Connecticut Supreme Court.

In the decision, the Court clarified an important question that the Connecticut Department of Labor had been pushing hard.  It will be welcome news for businesses in the state.

The issue was this: If an independent contractor (and his or her business) works ONLY with one company, can that person still be an independent contractor?

The Court said yes, that person CAN be. But it is important to note that it does not mean that the person will ALWAYS be an independent contractor. Instead, the court will continue to apply the ABC test — balancing several factors. (I’ve discussed the test in a prior post here.)

The case, Southwest Appraisal Group v. Administrator, Unemployment Compensation Act can be downloaded here.  Note that it will not be “officially released” until March 21, 2017.

The only issue in the case was whether the putative employee was “customarily engaged in an independently established trade, occupation, profession or business of the same nature as that involved in the service performed.”

How to make that determination? By looking at the “totality of the circumstances” which also include another series of tests.

Here, the court at least is helpful in setting up what those factors are.   According to the Court, “factors to consider in evaluating the totality of the circumstances under part
C include:

  1. the existence of state licensure or specialized skills;
  2. whether the putative employee holds himself or herself out as an independent business through the existence of business cards, printed invoices, or advertising;
  3. the existence of a place of business separate from that of the putative employer;
  4. the putative employee’s capital investment in the independent business, such as vehicles and equipment;
  5. whether the putative employee manages risk byandling his or her own liability insurance;
  6. whether services are performed under the individual’s own name as opposed to the putative employer;
  7. whether the putative employee employs or subcontracts others;
  8. whether the putative employee has a saleable business or going concern with the existence of an established clientele;
  9. whether the individual performs services for more than one entity;
  10. and whether the performance of services affects the goodwill of the putative employee rather than the employer.

The court does add some additional guidance here noting that, “We emphasize that particular caution is necessary in considering the relative size or success of the putative employee’s otherwise independent business in connection with the totality of the circumstances analysis under part C.”

This is a big decision for employers who also use independent contractors.  Businesses should again review their relationships with these independent contractors to try to satisfy as many of the factors outlined above.

loveWhile the calendar may read Valentine’s Day, I’ve tackled more than my fair share of love-themed posts in the past filled with roses and chocolates.

So instead, I’m going to go in a different direction entirely: Guns. (Though query whether the music group Guns ‘n’ Roses would care to disagree with me.)

See, there was this employee who worked at a car dealership wasn’t in love with guns.  But he believed his supervisor was.  So much so that, according to a complaint filed in state court, the supervisor would sit in “his office looking at and ordering guns.”  The employee then observed that packages containing “guns, including AR-15s, clips, handguns, suppressors and [rifles]” were being delivered to work.

The employee raised the concern to the dealership’s owner. Later that date, the supervisor said allegedly told the employee to “stay the [expletive] out” of the supervisor’s business.  Two days later, the employee was fired.

The employee brought suit claiming that he was wrongfully discharged in violation of a public policy in consideration of Conn. Gen. Stat. 31-49 — which requires employers to exercise reasonable care to provide employees with a reasonably safe place to work.

The Superior Court found that such a claim could survive a motion to strike.   In doing so, it court concludes that there is an important public policy of having an employee “raising his concern over firearms in the employer’s workplace”.

The case, Schulz v. Auto World, is an important reminder that not all causes of actions are clearly spelled out in the law. Sometimes courts look to general principles to take the law in different directions.

In this instance, employers should take notice of the public policy articulated by the court that guns in the workplace in Connecticut are still to be considered unusual.