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Legal Briefs for HR

Posted on March 6, 2013

Welcome to Legal Briefs for HR, an update on employment issues sent to over 5000 individual HR professionals, in-house counsel and business owners plus HR and legal professional organizations (who have asked and been permitted to republish content via their newsletters and websites), to help them stay in the know about employment issues. Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in! Back issues are posted at www.munckwilson.com under Media Center/Legal Briefs and you can also join the group by clicking on “Subscribe.” Here’s some March Madness, employment-style!

  1. Happy Birthday FMLA – How does the U.S. Department of Labor celebrate 20 years of enforcing FMLA? By serving employers a slice of new regulations which expand the reach of the statute and place new obligations on employers, effective March 8. A few key changes are summarized below and there is a comprehensive seven-page “Side-by-Side Comparison of Current/Final Regulations” posted at www.dol.gov/whd/fmla/2013rule/comparison.htm that will be useful in revising your FMLA policy.
    1. New Poster – A sample is on the DOL website and posting is mandatory at each establishment if you have 50+ employees in the U.S., including locations where there are no eligible employees
    2. New Forms – Samples are available on the DOL website and the forms are optional, however, the scope of your inquiry is limited to the type of information on the form so don’t get too creative in designing your own forms<.li>
    3. Tracking Intermittent Leave – Use the smallest increment of time used for other types of leaves and in no case use an increment larger than one hour, even if your PTO policies require use of the benefit in larger increments such as half day or full day
    4. Military Exigency Leave – Employees who take FMLA to assist their parent, spouse or child who has been deployed can only do this when the deployment is to a foreign country. Time off to be with the military member who is on R&R is expanded from five to 15 days. Leave to care for the military family member’s parent who is incapable of self-care has been added.
    5. Military Caregiver Leave – Definitions for “serious injury or illness” and “covered servicemember” have been expanded.
    6. Airline Flight Crews – Rules changed to reflect the realities of the hours worked by flight crews
    7. Adult Children With Disabilities – The definition of “disability” has been expanded to be in synch with the ADAAA of 2008.
  2. Recess Appointment Rift Expanding – The D.C. Circuit Court of Appeals ordered that the NLRB’s appeal over its “ambush election” rules be held in abeyance. Round one of the dispute, at the district court level, went against the NLRB because NLRB member Brian Hayes did not participate. After the dust-up in Noel Canning, where three members’ recess appointments were declared invalid (because their appointments by Pres. Obama were not during a Senate recess), the employer’s rep in the instant case pointed out that even if Hayes had participated, there was another voting member, Craig Becker, who was similarly and improperly appointed. Becker is not among the three members who were declared invalid in Noel Canning, but his appointment has the same flaw . . . no recess, no valid recess appointment. The D.C. Circuit’s order may be a foreshadowing of fourth invalidated member and more NLRB decisions (going back to Becker’s appointment date of August 27, 2011) called into question. President Obama re-nominated members Richard Griffin and Sharon Block (both Democrats) on February 13, but has not named Republican candidates for the remaining two vacancies, so the likelihood of the Senate acting on the renominations is slim or none. The Board claims it’s business as usual, but three U.S. Senators introduced a bill (S. 90) to cut off their funding for any function that requires a quorum (i.e., 3 of 5 members). The bill similarly cuts off funding to the Bureau of Consumer Financial Protection for activities that are authorized only upon confirmation of the Director (who also has a “recess appointment” problem). This is getting good . . . .
  3. Out With the Old & In With the New – OFFCP has nixed use of its 2006 guidance when evaluating federal contractors’ and subcontractors’ pay practices and replaced it with new guidance (Directive 307) described as being a more flexible and case-specific approach. Unfortunately, the Directive does not specify how their investigators will evaluate your methods. The “old” Compensation Standards and Voluntary Guidelines still apply to any review scheduled, opened or otherwise pending on February 28, 2013. The seven-page Guidance and an eleven-page FAQ are posted at www.dol.gov/ofccp/regs/compliance/CompGuidance/.
  4. Say Bye-Bye to Biz License – Chicago is getting serious about employers who fail to properly pay their workers, by passing a new “wage theft” ordinance which takes effect July 1, 2013. The City can deny an application for a business license or suspend/revoke an existing one if, during the five-year period prior to the application, the applicant or licensee has admitted to or been found guilty/liable in any judicial or administrative proceeding of committing or attempting to commit a willful violation of any federal or state law regulating payment of wages. The denial/suspension/revocation occurs on the second offense, if not “willful.” Pay attention to the details here. First, since it applies to violation of any law relating to pay, the penalty can be triggered on your operations in Chicago for a violation that occurred elsewhere in the U.S. Second, notice that the violations are not limited to a judgment in a court of law . . . administrative agency findings are given equal weight. Third, if you have operations in IL, keep in mind that their state wage law tracks the FLSA before the employer-friendly 2004 amendments. Finally, if you ignore the City and continue to operate after your license to do business has been denied/suspended/revoked, the fine is $500 to $1000 . . . per day. If you operate in Chicago, you may want to audit your pay practices, starting with proper classification (e.g., exempt/nonexempt, employee/contractor) and continuing with minimum wage, overtime, paid on a “salary basis” and payday law issues like regular paydays, timing of final pay and more.
  5. Heads’ Up, Federal Contractors – In a “me too” move, the OFCCP issued guidance similar to that issued by the EEOC in April 2012, warning that use of arrest and conviction records in employment decisions may result in a disparate impact based on race and violate anti-discrimination provisions of Title VII and Executive Order 11246. Directive 306 (eight pages long) is posted on the DOL website at www.dol.gov. In order to avoid or defend against such claims, employers who use criminal history as a factor in employment decisions need to either validate the screening process using the Uniform Guidelines on Selection Procedures or apply the EEOC’s test to show that the screen in sufficiently job-related. The EEOC’s three-part test looks at how long ago the offense occurred, it’s severity and nature and how the offense relates to the job being sought or held.
  6. SNOPA Says No Snooping – It’s back! The Social Networking Online Protection Act (SNOPA) died in committee during 2012, but has been reintroduced via H.R. 537. The bill prohibits employers from requiring or requesting that an employee or applicant provide a user name, password or other means for accessing a private email account or a personal account on any social networking website, of the employee or applicant. It also makes it unlawful for an employer to discharge, discipline or discriminate or deny employment or threaten such actions based on the employees or applicants refusal to provide this type of information. The bill has only six co-sponsors and was introduced on February 6. You can follow developments and read full text via http://thomas.loc.gov. Similar limitations already exist in six states (CA, DE, IL, MD, MI, NJ) and at least 21 states, including TX, have bills currently pending. Local governments, including Philadelphia, are also considering similar measures.
  7. Creditworthy? – The Equal Employment for All Act (H.R. 645) was introduced on February 13 with the goal of amending the Fair Credit Reporting Act (FCRA) to prohibit a current or prospective employer from using a consumer report or from causing one to be procured for employment purposes or for making an adverse action, if the report contains information that bears upon the subject individual’s creditworthiness, credit standing or credit capacity. There are certain exceptions to the prohibition, including when the individual applies for or currently holds a supervisory, managerial, professional or executive position at a financial institution. Limitations on employers’ ability to use credit info in employment already exist under state law in CA, CT, HI, IL, MD, OR, VT and WA.
  8. No WARNing Required – The federal WARN Act requires employers who effect a plant closing or a mass lay-off to provide at least 60 days’ written notice to affected workers, local government and the state employment agency. Less than 60 days’ notice may be acceptable under the exception referred to as “unforeseeable business circumstances.” Flexible Flyer’s fortunes had been up and down over the years and in the end, it closed and filed for bankruptcy. It gave employees WARN notices, but not 60 days in advance. Employees filed a WARN lawsuit, but did not prevail. The bankruptcy court, the district court and the 5th Circuit all agreed that the UBC exception applied. Why? The company had been dealing with mixed signals about its future health for years. Their parent company had threatened to cut funding for years, but did not until the very end. The management team suffered setbacks (e.g., large recall of product, customer deferral of a large order) but also scored some wins (e.g., customer agrees to accelerate payments, vendor agrees to accepting late payment, competitor goes out of business). When the parent company finally made good on its threat to cut funding, only then did they give up. The court observed that foreseeability means probability, not possibility, that an event will occur and WARN “allows good faith, well-grounded hope, and reasonable expectations.” Here, “encouraging events continued to renew probabilities that better days may be ahead and the loss of funding was deemed unforeseeable. Flexible Flyer Liquidating Trust (5th Cir. Feb. 2013).
  9. Blackberry Causing Sour Grapes? – A FLSA collective action has been conditionally approved for a class of Chicago police officers who claim they were denied overtime pay for work done after hours via a City-issued Blackberry. The officers claim they were expected to be available via their devices 24/7 and they felt obliged to respond to “an onerous amount of email and telephone calls on a daily basis” while off the clock. Allen v. Chicago (N.D. Ill. Jan. 2013).
  10. Money Matters – President Obama called for an increase in the federal minimum wage, from $7.25 to $9.00 per hour, in his February 12 State of the Union speech. Rep. Donna Edwars (D-Md) reintroduced the Working for Adequate Gains for Employment in Services (WAGES) Act on February 13, proposing to increase the base hourly pay for tipped employees to $3.75 per hour, and to $5.00 per hour one year later.
  11. Contractor Conundrum – Misclassification of employees as contractors will cost an employer $1.3 million in backpay under the FLSA, for failure to pay minimum wage, overtime and for recordkeeping violations. The company provides directory assistance and enhanced information services via a network of individuals who work from their homes across the U.S., responding to customers’ text messages. The workers were paid via a piece rate based on the number of texts they respond to without regard to the actual number of hours worked. In addition to the monetary hit, the consent judgment prohibits the employer from classifying any worker as an independent contractor unless the individual fails to meet the definition of an employee under the FLSA. Solis v. kgb USA Inc. (E.D. Pa. Jan. 2013).
  12. March Badness – It is hoops fans’ favorite time of year, and watching the game no longer requires calling in sick or taking a long lunch at the nearest sports bar. Live feeds can be found everywhere (e.g., ncaa.com, cbssports.com, conference websites) and who doesn’t have easy access to a desktop computer, laptop or smartphone? If you’ve got concerns about lack of individual productivity and a drain on your organization’s computer bandwidth, you might want to just say “no.” Gambling can be a concern, too. Increasingly, though, employers are looking for ways to use the excitement about the games as a team-building opportunity and to have some fun. Ideas range from casual days (sporting of one’s team colors/logo encouraged), converting a TV-equipped conference room into a watch party with snacks, brackets/pools with prizes (or the donated cash going to a favorite charity), games (match the mascot or logo to the name of the school) and talent contests (e.g., sing your alma mater, free throw prowess, best celebration dance). Have some fun with it, bay-bee!
  13. Save the Date – If you like to immerse yourself in two days of labor and employment presentations, please join me in Austin on May 16 & 17 for the 20th Annual University of Texas School of Law Labor and Employment Law Conference. The program and registration info is now posted at www.utcle.org/conference_overview.php?conferenceid:. I will speak on May 16 and my topic is Hire Power: Developments in Hiring Practices. Hope to see you there!
  14. Stated Differently – Here are some hot topics for you multi-state employers:
    1. Arizona (Phoenix) – The City Council expanded its anti-discrimination ordinance, to prohibit discrimination in employment and other transactions (e.g., housing, public accommodations) based on sexual orientation and gender identity or expression. There is a similar ordinance on the books in Tucson, but no corresponding state or federal law.
    2. California – The 9th Circuit held that employees need not request “suitable seating” to be entitled to seating under the state’s Wage Orders and a plaintiff’s case for alleged violation of the law is not dismissed for failure to have asked for a seat. Green v. Bank of America (9th Cir. Feb. 2013).
    3. Massachusetts – If passed, the recently filed Noncompetition Agreement Duration Act will make noncompetes that last longer than six months after employment ends presumptively unreasonable, with a few exceptions contained within the proposed law.
    4. New Jersey – A-2878, if passed, will prohibit employers from requiring a current or prospective employee to provide or disclose any user name or password, or in any way provide the employer access to a personal account or service through an electronic communications device. The bill also prohibits employers from asking the individual if they have an account or profile on any social media site.
    5. North Carolina – Faced with a $2.5 billion debt to the federal government under its state unemployment comp system, NC enacted belt-tightening measures. They include [a] reduction of the weekly maximum benefit from $535 to $350; [b] reduction of the maximum duration of benefit from 26 weeks to 20 weeks plus imposition of system that further reduces this maximum when the unemployment rate is 5.5% or less; [c]increase in employers’ tax rates; [d]elimination of the exception to disqualification for benefits if the person left work due to a disability; and [e] a new definition of “suitable work” as any employment that pays at least 120% of the claimant’s weekly benefit amount . . . after ten weeks of receiving benefits, claimants will be cut off if he or she refuses an offer of “suitable employment.”
    6. Texas – Two legislators filed bills (S.B. No. 674 and H.B. No. 1524) to amend Texas’ right to work law and require that any collective bargaining rep must be elected by a secret ballot and by a majority of the employees directly affected by the union. This would nix representation via a stack of signed authorization cards and/or a simple majority would not suffice. The Texas Attorney General echoed the sentiment in a February 20 press release, which contains a link to a “Texas Workers Bill of Rights” which proclaims in bold font “TEXAS WORKERS CANNOT BE FORCED TO JOIN A LABOR UNION” and “WHETHER TO JOIN A UNION IS YOUR CHOICE.” The press release and suitable-for-posting notice from the AG can be found at www.oag.state.tx.us/oagnews/release.php?id=4303. You can find copies of the Texas bills and follow their progress at www.capitol.state.tx.us.
  15. For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State . . . Go Cats!), follow me on Twitter. I’m at @amross.

Until next time,

Audrey E. Mross
Labor & Employment Attorney
Munck Wilson Mandala LLP
600 Banner Place
12770 Coit Road
Dallas, TX 75251

972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)
amross@munckwilson.com
www.munckwilson.com

 

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