Employer Law Report

Tag Archives: wage and hour

DOL seeks to limit joint employer liability for wage and hour claims

On April 1, 2019, the Department of Labor (DOL) announced a proposed rule to narrow the definition of a “joint employer” under the Fair Labor Standards Act (FLSA). Because joint employers are jointly and severally liable for wage and hour claims brought under the FLSA, the change could have a significant impact on wage and hour litigation as we know it, offering franchisers and businesses that hire workers through staffing firms a shield from liability for some minimum wage and overtime pay violations.

Proposed regulation

Image depicting stack of wage and hour claims

Part 791 of Title 29 of the Code of Federal Regulations contains the DOL’s

Wage and Hour Division announces pilot limited “amnesty” program

The U.S. Department of Labor’s Wage and Hour Division (WHD) has announced a new nationwide pilot program, called the Payroll Audit Independent Determination (PAID) program, which is designed to facilitate resolution of potential overtime and minimum wage violations under the Fair Labor Standards Act (FLSA). According to the WHD’s website describing the program, the program’s primary objectives are to resolve wage and hour claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage obligations and to ensure that more employees promptly receive any owed back wages.

WHD states that it will implement this pilot program …

November election results likely will significantly impact labor and employment law in coming years

Now that it is clear that Donald Trump will be the 45th President of the United States, questions are continuously being asked about how the regime change when he takes office in January of 2017 will impact labor and employment law. Acknowledging that any discussion of Trump’s policies before he takes office on Jan. 20, 2017 is purely speculation, it is important for employers to consider the potential implications on labor and employment law.…

Assistant managers’ wage hour battle with Bob Evans Farms settled for $16.5 million

It is not news that class action lawsuits for unpaid overtime are on the rise. A settlement agreement approved recently by the United States District Court for the Southern District of Ohio shows just how costly those claims can be.

In Thorn v. Bob Evans Farms, Inc. the U.S. District Court in Columbus, Ohio approved a settlement between Bob Evans Farms, Inc. (BEF) and a class of 1,566 current and former assistant restaurant managers. The assistant managers had been treated by BEF as exempt from overtime requirements under federal and state law. In the class action lawsuit, the assistant managers …

EEOC proposed wage reporting rules: could be a major problem

Think for a moment about all of the employment law obligations you face as a Human Resources professional or employment legal counsel. As extensive as those are, there is actually very little that you have to report to the federal or state government on a regular basis about your employment activity. You have very few obligations to report to the government on your personnel actions, including compensation – at least as of now. In fact, about the only obligation to report information to the federal government is the annual federal EEO-1 report, which must be filed by companies with 100 …

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

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

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?

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

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

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

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

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

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

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

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

Find an updated post on this topic, published May 7, 2018, here. 

 

Many employers allow students to intern in their workplaces so that the students can gain exposure to real world work, learn about a particular industry or career, or earn credit hours towards their degree requirements. However, if these interns are unpaid, employers risk liability for failure to pay minimum wage and overtime under the Fair Labor Standards Act (FLSA). Employers that enter into these arrangements, often made with the intent of helping students and being good corporate citizens, without careful consideration risk lawsuits from former interns, including …

FLSA Hot Topic: The Fluctuating Workweek and Commission Pay

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

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

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

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

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

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

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

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 …

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