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Employer Law Report

Tag Archives: wage and hour

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 …

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. …

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

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 …

Supreme Court to Decide Whether Pharmaceutical Sales Reps Fall within FLSA Outside Sales Exemption

Posted in Wage & Hour

Employers are closer to a nation-wide rule on the appropriate classification of pharmaceutical sales representatives (PSRs). On Monday, the Supreme Court granted cert to resolve a split between the Ninth and Second Circuits on whether PSRs are covered by the outside sales exemption of the Fair Labor Standards Act (FLSA).

In February, we covered the Ninth Circuit’s decision in Christopher et al. v. SmithKline Beecham Corp., where it held that GlaxoSmithKline’s PSRs were properly classified as exempt. In that decision, the Ninth Circuit disagreed with the Second Circuit, which in 2010 held such employees to be non-exempt in In

DOL Regulations Set To Take Effect May 5

Posted in Wage & Hour

As we advised last month, several changes initiated by the DOL’s Wage and Hour Division’s new regulations are set to take effect on May 5, 2011. On that date, the maximum federal tip credit will increase from $4.42 an hour to $5.12. That means that, under federal law, an employer can pay a tipped employee $5.12 less than the minimum wage so long as the individual’s overall compensation equals at least the legal minimum wage. In addition, the DOL’s finding that "bonus and premium payments . . . are incompatible with the fluctuating workweek method" may impact how some …

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. …

DOL Wage-and-Hour Division Issues New Regulations

Posted in Wage & Hour

On April 5, 2011, the Department of Labor’s Wage and Hour Division (WHD) published new regulations. Among other changes, the WHD raised the maximum federal tip credit from $4.42 an hour to $5.12. That means that, under federal law, an employer can pay a tipped employee $5.12 less than the minimum wage so long as the individual’s overall compensation equals at least the legal minimum wage.

Perhaps most noteworthy, however, is what the WHD did not do in issuing the regulations. In its 2008 proposed rules, which were issued during the Bush Administration, the WHD indicated that it was considering …

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 Considering Changes to FLSA Recordkeeping Requirements

Posted in Wage & Hour

Yesterday, the Department of Labor published its semiannual agenda of regulations that have been selected for review or development during the coming year. One of the proposed rules would significantly change the FLSA’s recordkeeping requirements. Specifically, as stated in a Wage and Hour Division Fact Sheet, the proposed rule would require “[a]ny employers that seek to exclude workers from the FLSA’s coverage . . . to perform a classification analysis, disclose that analysis to the worker, and retain that analysis to give to WHD enforcement personnel who might request it.” This would obviously be incredibly burdensome for employers.


Additionally, the DOL …

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 …

DOL to Scrutinize Unpaid Internships

Posted in Traps for the Unwary, Wage & Hour, Workforce Strategies

As noted in a recent New York Times article, researchers have found that the number of unpaid internships has risen, likely due to employers’ limited ability to provide new paying jobs and students’ willingness to gain increasingly hard-to-come-by experience. However, officials from the Department of Labor have indicated that many unpaid internship arrangements violate federal law. Nancy Leppink, Acting Director of the DOL’s Wage and Hour Division, stated: "If you’re a for-profit employer or you want to pursue an internship with a for-profit employer, there aren’t going to be many circumstances where you can have an internship and not be paid and …

A Provision of The Health Care Reform Bill Requires Employers to Provide Reasonable Breaks for Nursing Mothers

Posted in Traps for the Unwary, Wage & Hour, Workplace Privacy

Employers may not realize that the recently signed health care reform law includes a provision which amends the Fair Labor Standards Act to require reasonable unpaid breaks for nursing employees. In addition to the unpaid break time, the amendment to the FLSA (29 U.S.C. § 207(r)(1)) provides that employers must furnish a private location, other than a restroom, which may be used by the employee to express breast milk. Employers with fewer than 50 employees are not subject to these requirements if such requirements would cause an undue hardship on the employer.

This amendment creates some confusion with existing federal law on the …