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Employer Law Report

Tag Archives: FLSA

DOL memo says most workers are FLSA employees, not independent contractors

Posted in Wage & Hour

Following on the heels of its proposed rule expanding the number of employees entitled to overtime under the FLSA, the Department of Labor’s Wage & Hour Division has issued an Interpretation Letter that addresses independent contractor misclassification. Though the Letter, issued by WHD Administrator David Weil, contains no earthshaking new compliance obligations for employers, it does suggest that businesses can expect a more aggressive enforcement regime from the Department of Labor on independent contractor issues. In fact, the Letter directly states that “applying the economic realities test in view of the expansive definition of “employ” under the Act, most workers …

Recent decision provides a useful reminder that FLSA exemptions are still “narrowly construed” against the employer

Posted in Wage & Hour

Although we’ve noticed that the U.S. Supreme Court may be taking a more practical approach to interpreting the sometimes-impractical Fair Labor Standards Act, a recent Sixth Circuit decision reminds us that FLSA exemptions are still strictly interpreted by the courts. In Bacon v. Eaton Corp., a group of “front line” supervisors sued their employer under the FLSA. They argued they were misclassified as exempt employees, and as a result of that misclassification, they were entitled to overtime for any workweeks in which they worked more than forty hours. The employer, understandably, argued these employees were properly exempt under the …

Supreme Court interprets meaning of “changing clothes” under FLSA collective bargaining exception

Posted in Wage & Hour

The Supreme Court recently clarified the meaning of “changing clothes” under Section 203(o) of the Fair Labor Standards Act in Sandifer v. United States Steel.  In general, non-exempt employees who spend time “donning” (putting on) and “doffing” (taking off) certain articles of clothing associated with their job must be compensated for that time. Section 203(o) provides an exception to this requirement in the context of collective bargaining—if an employer and the employees’ union agree that employees will not be paid for time spent “changing clothes,” the employer does not have to compensate for that time.

In a unanimous decision, …

When Managers and Social Media Collide: Court Finds That Blog and Drunken Facebook Posts By Coyote Ugly’s Managers Do Not Amount to Adverse Actions or are Enough for Constructive Discharge Claim

Posted in Social Media, Wage & Hour

Stewart v. CUS Nashville, LLC, No. 3:11-cv-0342, 2013 U.S. Dist. LEXIS 16035 (M.D. Tenn. Aug. 8, 2013) serves as a cautionary tale to employers about the disastrous impact that can happen when managers and social media collide. And while this case turned out well for the employer in the end, that end was after a long and expensive two-day bench trial that I am sure the employer would have much rather avoided.

If you are not familiar with the Stewart case, here is the background you need to know. CUS Nashville, LLC owns Coyote Ugly franchises. (Yes, the …

Sixth Circuit Holds Six-Month Limit in Employment Agreement Is A Waiver and Cannot Be Used to Bar FLSA and EPA Claims. Wait, EPA Claims Too! What? Why?

Posted in Wage & Hour

The Sixth Circuit held that a six-month time limitation in an employment agreement constitutes an invalid waiver of an employee’s claims brought under the Fair Labor Standards Act (“FLSA”) and, more surprisingly, the Equal Pay Act (“EPA”).

In Boaz v. FedEx Customer Information Services, Inc. No. 12-5319 (6th Cir. Aug. 6, 2013), the plaintiff, Margaret Boaz, was employed with FedEx since 1997. Her employment agreement with FedEx (the “Agreement”) included the following provision: “To the extent the law allows an employee to bring legal action against Federal Express Corporation, I agree to bring that complaint within the time prescribed by …

Court Denies Employer’s Access to Social Media Posts in FLSA Collective Action and Sends Warning: If You Want Access to Social Media, Come with Both Barrels Loaded … Leave the Water Gun at Home

Posted in Employment Class & Collective Actions, Wage & Hour

A federal court has denied a defendant-employer’s request that plaintiffs sift through and turn over all their social media posts made during their work hours in an FLSA collective action in which the plaintiffs claim their employer failed to give them meal breaks. How did that happen? I thought you’d never ask.

By way of background, Jewell v. Aaron’s Inc., is a nationwide,1,700+ FLSA collective action pending in the Northern District of Georgia. In the suit (Complaint accessible here), the class plaintiffs (current and former employees of Aaron’s) claim they were not paid for their 30-minute meal periods. …

Genesis: A Unicorn, or the Beginning of a New Tactic? Supreme Court Holds Employers Can “Pick Off” a Named Plaintiff and Defeat a FLSA Collective Action with an offer of Judgment, but Leaves Open If All Employers Can Employ This Strategy

Posted in Wage & Hour

By a tight five-to-four decision, the United States Supreme Court’s Genesis Health Care Corp. v. Symczyk decision provides employers a method to "pick off" the lead plaintiff in an FLSA collective action using a Federal Rule of Civil Procedure 68 offer of judgment and by doing so, take out the remaining collective action. For reasons we will explain in a bit, however, the Court merely "assumed" — without deciding — that an unaccepted Rule 68 offer of judgment that offers complete relief moots the named plaintiff’s individual claim and, in the absence of any other claimant having opted into the …

Defending an FLSA Auto-Deduct Policy Case Starts with the Foundation — Another Smart Employer with Smart Policies Sends Another Group of Nationwide Plaintiffs Packing

Posted in Employment Class & Collective Actions, Wage & Hour

The Northern District of Ohio is the latest in a long line of courts to send the following message to nationwide collective class plaintiffs: Stop seeking nationwide class certification where the plaintiffs are spread across facilities and have too many factual differences to be "similarly situated" and to have experienced a common injury under the Fair Labor Standards Act ("FLSA").

In Creely v. HCR ManorCare, Inc. (N.D. Ohio Jan. 31, 2013), a group of 318 nurses, licensed practical nurses, certified nursing assistants, and admissions coordinators opted into a collective action lawsuit alleging that their employer, HCR ManorCare, Inc. ("HCR"), …

Stick a Fork in It: Supreme Court Declines Review and Allows Fifth Circuit’s Ruling Approving Private Settlements in FLSA Cases to Stand

Posted in Wage & Hour

We have kept you up to speed on Martin v. Spring Break ’83 Productions, L.L.C., here and then here, a Fifth Circuit case in which the Fifth Circuit approved a private settlement of employees’ claims for unpaid overtime under the Fair Labor Standards Act ("FLSA"). More specifically, the court held that parties could privately settle and release wage claims, under the right circumstances, and that doing so would not compromise employee rights guaranteed by the FLSA. The plaintiffs asked the Supreme Court to review the case arguing that the decision creates a split among the circuits, which it does. …

A Helpful Trend? Employees’ Failure to Follow Timekeeping Procedures Doom Two Recent FLSA Claims

Posted in Wage & Hour

It’s no secret that employers face an uphill battle when defending claims of unpaid hours worked by employees. These claims usually involve a similar pattern: the employee fails to report or record time worked, then the employee later raises that unpaid time worked in the form of a Fair Labor Standards Act claim for unpaid overtime against his employer. Many courts side with employees because the Fair Labor Standards Act places the burden upon employers, not employees, to accurately record time worked. But two recent federal appellate court decisions show that things may not be so grim when employers have …

Sixth Circuit Awards Employer Over $55,000 in Costs in FLSA Collective Action

Posted in Employment Class & Collective Actions, Wage & Hour

In September, we told you about the Sixth Circuit’s decision in Frye v. Baptist Memorial Hospital, Inc., where the court handed down, not one, but two favorable rulings for employers in an FLSA collective action. First, the court held that automatic pay deduction policies for unpaid meal breaks do not per se violate the FLSA, and that a class representative plaintiff in a collective action must formally opt-in to their own case to "commence" suit and stop the running of the statute of limitations or be barred from suit. Here’s that blog.

After considering the employer’s motion for …

Martin v. Spring Break ’83 Productions, LLC … the Sequel or Part Deux? The Supreme Court is Asked to Review Whether a Private Settlement Agreement Dismissing FLSA Claims is Enforceable

Posted in Wage & Hour

As you might recall, in August we blogged on Martin v. Spring Break ’83 Productions, LLC, a case involving the blockbuster movie "Spring Break ’83" [stated with sarcasm], where the Fifth Circuit became the first federal appellate court to enforce a private FLSA settlement. In that blog, available here, we crossed our fingers and hoped the Fifth Circuit’s decision would come to a jurisdiction near you. Well, that hope is one step closer to reality as the plaintiffs/appellants – now the Petitioners – filed a Petition for Writ of Certiorari (the "Petition") and asked the United States Supreme …

The Sixth Circuit Gives Employers a “Twofer”: An Employer’s Automatic Pay Deduction Policy Does Not Automatically Violate the FLSA and a Class Plaintiff Must “Commence” Suit

Posted in Employment Class & Collective Actions, Wage & Hour

In Frye v. Baptist Memorial Hospital, Inc., the United States District Court for the Sixth Circuit handed down not one, but two favorable rulings for employers in an FLSA collective action. First, in considering an automatic pay deduction policy for unpaid meal breaks in a collective action for the first time, the Court held that such a policy does not automatically, or per se, violate the FLSA. Second, a class representative plaintiff must formally opt-in to their own case to "commence" suit and stop the running of the statute of limitations.

1.  The Sixth Circuit Holds that Automatic Pay

Coming Soon to a Jurisdiction Near You (Hopefully), The Fifth Circuit Holds That a Private Settlement Agreement Dismissing FLSA Claims is Enforceable

Posted in Labor Relations

With Martin v. Spring Break ’83 Productions, LLC,, the Fifth Circuit put a much-needed (and 30-year-in-the making) dent in a long line of case law refusing to enforce private Fair Labor Standards Act (FLSA) waivers between employees and employers that are not approved by the Department of Labor (DOL) or by a court during litigation. This case is one that will be well-received by employers and, optimistically, followed by courts outside the Fifth Circuit, which governs Louisiana, Mississippi and Texas. With any luck, FLSA settlements will be increasingly private matters between employer and employee, like other agreements settling employment-related …

Supreme Court finds pharmaceutical sales reps exempt under the outside sales exemption

Posted in Employment Class & Collective Actions, Wage & Hour

In a highly anticipated decision under the Fair Labor Standards Act, the United States Supreme Court handed down a big win on Tuesday for the pharmaceutical industry when the Court found pharmaceutical sales representatives are covered by the outside sales exemption in Christopher v. Smith Kline Beecham Corp. We covered in previous posts the differing interpretations of the Second Circuit, which held the reps to be non-exempt, and the Ninth Circuit, which said they were exempt. The Court agreed with the Ninth Circuit that the sales activity pharma sales reps engaged in were sufficient "outside sales" even though federal …

Hiring Unpaid Summer Interns? Keep These Important Tips In Mind

Posted in Wage & Hour

Many employers consider hiring interns during the summers or school year to help students gain experience or learn about a certain industry or career. However, when these interns are unpaid, there are certain rules employers need to follow to guard against liability for failure to pay minimum wage or overtime under the Fair Labor Standards Act—which carries risks of lawsuits by former interns (a few of which have been very recently filed), class actions, and DOL investigation and other enforcement activities.

In fact, in the last few years the DOL has focused some attention on unpaid internships, as we said …

FLSA Hot Topic: The Fluctuating Workweek and Commission Pay

Posted in Wage & Hour

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 …

Sixth Circuit Applies “Primary Benefit” Test To Uphold Unpaid Internship Program

Posted in Wage & Hour

In a decision issued on April 28, 2011, the Sixth Circuit Court of Appeals offers employers some clarity on the test to determine whether using unpaid interns or other student trainees violates the Fair Labor Standards Act (FLSA). In this case, Solis, Secretary of Labor v. Laurelbrook Sanitarium and School Inc., 6th Cir. No. 09-6128, the Court threw out a U.S. Department of Labor lawsuit against a Tennessee religious school’s student work experience program.

The Department of Labor brought an action against the Laurelbrook school alleging that its students were "employees" and had to be paid under the FLSA. …

Supreme Court Holds That Oral Complaints Can Form the Basis for a FLSA Retaliation Suit

Posted in Wage & Hour

Yesterday, the U.S. Supreme Court held that an employee’s Fair Labor Standards Act (FLSA) retaliation claim can be based on an oral complaint made by the employee to his employer regarding wages or other issues covered by the Act.

An employee of Saint-Gobain Performance Plastics Corp. complained orally to Company officials about the Company’s timeclocks, which he claimed were located in an area that prevented the employees from receiving credit for the time they spent donning and doffing work-related protective gear. After making the oral complaints, he was discharged.

The employee then sued the Company for terminating him in violation …

Supreme Court Declines to Hear Case Involving the Exempt Status of Pharmaceutical Sales Representatives

Posted in Wage & Hour

Just weeks after the Ninth Circuit created a circuit split by ruling that pharmaceutical sales representatives are exempt under the Fair Labor Standards Act’s outside sales exemption (see our earlier post on that decision), the Supreme Court has declined to hear Novartis Pharmaceutical Corp.’s appeal of a Second Circuit decision reaching the opposite conclusion. As a result, the existing circuit split will continue to exist, and drug companies facing current and potential litigation should not expect clarity on the issue in the foreseeable future.

Ninth Circuit Upholds Treatment of Pharmaceutical Sales Representatives As Outside Sales Employees

Posted in Wage & Hour

In August 2008, sales representatives from GlaxoSmithKline PLC filed a class action against the company, claiming they were non-exempt and entitled to overtime pay. They had always been treated as exempt by the company under the FLSA’s outside sales exemption. However, they argued, in part, that their exempt classification was improper because they do not actually "make" any sales. Rather, they argued, they simply present information to physicians regarding the company’s drugs in the hope the physicians will then prescribe those drugs. The sales representatives do not actually sell the drugs to anyone.

The employees lost at the District Court …

Bridge to Increased Wage & Hour Litigation Now Open

Posted in Wage & Hour

In addition to adding 350 new wage-and-hour investigators to its staff, the U.S. Department of Labor recently announced a new collaboration between its Wage-and-Hour Division and the American Bar Association Standing Committee on Lawyer Referral and Information Service that will likely further increase the amount of FLSA and FMLA litigation.  Through this new collaboration, which the DOL has named the "Bridge to Justice," the DOL and ABA are now providing an attorney referral service to individuals who contact the DOL to allege violations of the FLSA or FMLA by their employers.

As explained on this recently released FAQ website, …

DOL Issues Guidelines on New Requirement for Break Time for Nursing Moms

Posted in EEO, Leave Administration, Traps for the Unwary, Wage & Hour

The federal health care reform legislation passed in March of this year included an amendment to the Fair Labor Standards Act (FLSA), requiring employers to provide reasonable unpaid break time to nursing mothers to express breast milk for the nursing child. The requirement to provide breaks extends for one year after the child is born. The DOL has just released a fact sheet with general information about the requirements.

Briefly, the law requires that employers provide "reasonable break time… each time such employee has need to express milk." Employers must provide a private location, free from intrusion, other than a …

DOL Issues a Fact Sheet Regarding Unpaid Internships

Posted in Wage & Hour

Less than a month after the New York Times ran an article on the DOL’s position regarding unpaid internships, the U.S. Department of Labor’s Wage and Hour Division has released a Fact Sheet explaining the test used to determine whether an intern is an employee under the FLSA. Although the test – which is laid out in one of our previous posts – remains unchanged, the Fact Sheet provides information regarding the test’s factors that may be useful to employers trying to discern whether their interns are covered by the FLSA’s overtime and minimum wage provisions.

The first factor is whether …