Whistleblower Claims The Wave Continues

POSTED BY MATTHEW A. STEINBERG ON APRIL 1, 2014

"The cover-up is often worse than the crime" – an apt mantra for employers who are being increasingly forced to defend retaliation and/or whistleblower claims brought in myriad industries under a broad spectrum of federal and state laws.

The United States Supreme Court's recent (and landmark) decision in Lawson v. FMR LLC, broadly expanding the scope of potential whistle-blower claims under the Sarbanes-Oxley Act of 2012 (SOX), highlights employers' enlarged whistle-blower-related exposure.  The Lawson decision meaningfully enhances the number of employees who may seek to bring suit under the SOX whistle-blower provision.  Passed in 2002 on the heels of the Enron scandal, SOX prohibits retaliation against employees who report specific violations of SEC regulations and/or other forms of shareholder fraud.  Based on statutory language, up until Lawson, employers generally operated under the belief that it applied only to employees of publicly-traded companies. 

Not so.  In Lawson, writing for a 6-3 majority, Justice Ginsburg held that the SOX anti-retaliation provision applies not only to employees of publicly-traded companies, but also to employees of non-public companies that provide work for public companies.  Justice Ginsburg reasoned that prohibiting retaliation under SOX against non-public company employees furthered Congress' overarching "aim" of SOX, which was to "safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron Corp."  

By so holding, the United States Supreme Court unquestionably expanded SOX whistle-blower coverage and stoked fears that a new wave of SOX whistle-blower litigation is imminent.

In addition to expanded SOX whistle-blower coverage, employers throughout the country face whistle-blower-related exposure under various federal statutes such as the Dodd-Frank Act (in the financial services sector), OSHA, the Fair Labor Standards Act, and the Family and Medical Leave Act, as well as numerous state and local civil rights, discrimination and/or public safety statutes.  In this evolving area of law, it is incumbent upon employers to carefully analyze their internal compliance practices for receiving and investigating all types of whistle-blower complaints.  Human Resources representatives and key members of management – in publicly- and privately-held companies – must be trained regarding the broad range of whistle-blower laws and how to recognize and respond to the various forms of protected whistle-blower complaints, which might arise in the workplace.  

Join us at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss these and other employment law issues.

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Can Employers Regulate Employees' Off-Duty Conduct?

POSTED BY RICHARD D. TUSCHMAN ON MARCH 27, 2014

Employees' off-duty conduct is their own business – until it affects your business.  But where should the line be drawn?  When should an employer attempt to regulate employees' off-duty conduct?  Can an employer regulate off-duty conduct without running afoul of employment laws? 

Employees' outside relationships, political activism, use of social media, drug and alcohol use, and other off-duty behaviors can present vexing questions for legal and human resources professionals.  For example:

  • Does an employer have cause to be concerned if  co-workers are engaged in a romantic or sexual relationship outside of work?  If so, can an employer take action against the employees?
  • If an employee espouses radical political views, can the employer fire the employee?  What if the employee simply supports a candidate or political cause that the employer opposes?
  • Can employers take action against employees who use social media such as Facebook or Twitter to complain about their boss or protest their employer’s policies?
  • Can employers refuse to employ workers who use tobacco?  What about an employee who is suspected of being an alcoholic? 
  • Can an employer terminate an employee who has been arrested for a crime?  What if the employee was convicted? 
  • Can an employer take action against an employee for expressing controversial religious opinions outside the workplace? 

On April 4, as part of the 19th Annual Akerman Labor & Employment Law Seminar, I will answer these and other questions raised by a range of off-duty behaviors that can affect an employer's business.  I look forward to seeing you there!

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The Art of Employee Termination and Severance Agreements

POSTED BY CHRISTOPHER S. DUKE ON MARCH 25, 2014

The process of employee termination is fraught with pitfalls for the unwary employer.  Not only can emotions run high during this time, but failure to comply with all applicable state and federal laws can lead to legal liability for your company.  One wrong step in this process, even if it is unintentional and made with the employee's best interests in mind, can mean big troubles for an employer.  Now more than ever, employers need to make sure they handle the termination of employees the right way.  

However, conducting the termination properly is only the first step in protecting the company from liability.  In today's increasingly litigious society, employers are required to take additional steps to ensure they are protected from claims by former employees.  The best way to achieve this is to enter into a separation agreement with the departing employee.  Only by entering into a valid, binding separation agreement where the employee waives his or her rights to sue can an employer sleep well at night knowing the company is protected from exposure.  Yet like many aspects of workplace laws and compliance, there is no "one size fits all" separation agreement to cover all scenarios.  How much severance is enough?  What claims are released?  Do I have to give the employee a reference?  What if they apply to be rehired?  These are all important questions that must be addressed when preparing the separation agreement and tailoring it to fit the circumstances of the termination.

In addition, today's electronic and digitized workplace makes it easier than ever for disgruntled employees to walk out the door with your valuable confidential information.  Unless steps are taken at or before the termination stage, your company's most valuable assets can walk right out the door with the terminated employee. 

On April 4, as part of the 19th Annual Akerman Labor & Employment Law Seminar, I will be discussing these and other important issues relating to proper employee termination and the drafting of severance agreements.  We will cover each step of the termination process, from the crucial step of documenting early the reasons for termination, to conducting the termination meeting and following through with post-termination follow-up.  We will also cover how to draft and use post-termination severance agreements and releases to limit legal liability and protect your company's valuable business information from being misappropriated.  I look forward to seeing you there.

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The NLRB Invades The Non-Union Workplace

POSTED BY SCOTT T. SILVERMAN ON MARCH 19, 2014

Employers beware!  Although the Board's attempt to require employers to post a notice of employees' federal rights has been defeated, the agency remains active in its regulation of the non-union workplace.  The Board now has a full complement of members, with a Democratic majority, and is posed to continue to render decisions that will impact all places of work.

Too many organizations believe they have no responsibility to employees under federal labor law, simply because they are not unionized.  Unfortunately, nothing could be further from the truth.

Employees who are not represented by a union still have rights under federal labor law, including the right to engage in concerted actions regarding terms and conditions of employment.  Such "protected activity" may not be the basis of an adverse action against an employee.  The Board has found employers to have violated "protected activity" guarantees in a myriad of seemingly irrelevant situations, including taking action on the basis of derogatory social media posts. 

Further, employer confidentiality, non-disparagement and at-will employment policies may also run afoul of labor law protections. An unwitting employer may find itself subject to burdensome and protracted proceedings before the Board.

Join us at the 19th Annual Akerman Labor & Employment Law Seminar where I will discuss how an employer can implement necessary employee policies and regulate employee conduct without running afoul of federal labor law.

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Managing Employees Who File Claims

POSTED BY KAREN M. BUESING ON MARCH 17, 2014

Dealing with an employee who has filed a claim places an employer in a precarious position – the employer needs to properly manage the employee, but avoid a retaliation claim in the process. It's like walking a tightrope.

Employers have seen it many times – a troublesome employee is about to be disciplined, sees the handwriting on the wall, and files a charge as a preemptive measure. The employee believes the filing of a charge is tantamount to job protection – and oftentimes, so do employers.

But that should not be the case. While retaliation is the most common claim filed today – and the most likely to survive in litigation — employers can take affirmative steps to manage employees and avoid retaliation claims. Further, while the courts have broadened who can bring claims and expanded the scope of the conduct that can support them, at least in some contexts, the courts have heightened the standard of proof required of employees.

During our presentation at the 19th Annual Akerman Labor & Employment Law Seminar, we will discuss in a practical way how to handle an employee who has filed a claim, including best practices for avoiding retaliation claims.  We hope you will join us on April 4th!

Irregular Attendance May Render An Employee With A Disability "Unqualified"

POSTED BY ARLENE K. KLINE & JENNIFER T. WILLIAMS ON MARCH 13, 2014

In a recent case, Daniel Mecca v. Florida Health Services Center, Inc., Case No. 8:12-cv-02561 (M.D. Fla. February 3, 2014), a federal court in Florida held that where regular attendance is an "essential function" of a position and leave will not allow regular attendance now or in the immediate future, leave is not a "reasonable accommodation."

After resigning his employment, Daniel Mecca ("Mecca") brought claims against Tampa General Hospital ("TGH") for discrimination and retaliation under the Americans with Disabilities Act ("ADA") and the Florida Civil Rights Act ("FCRA") by reason of TGH's failure to grant an accommodation in the form of leave; and for interference and retaliation under the Family and Medical Leave Act ("FMLA").  Mecca, who worked for TGH as a Peripherally Inserted Central Catheter ("PICC") nurse, suffered from panic attacks and anxiety and requested "that he be allowed to go home or be absent from work if he experienced episodic flare-ups."

While TGH did not dispute that Mecca was a person with a disability, it argued, that "(1) he is not a qualified individual with a disability because he is unable to perform the essential functions of a PICC nurse, [which included regular attendance]; [and] (2) his requested accommodation of intermittent and indefinite leave is not a reasonable accommodation."  

In dismissing Mecca's ADA claim, the court held that a nurse's regular attendance at work is an essential function of the job.  The court stated "[a]n employer does not have to wait indefinitely for an employee's medical condition to be corrected, especially when it is uncertain whether the condition will improve . . . .  Despite [Mecca's] having taken leave on numerous occasions, the leave had not improved Mecca's ability to have regular attendance, nor was there any indication that it would do so at any point in the near future.  Therefore, leave was not a reasonable accommodation." With regard to the FMLA claim, the court found that Mecca had not been denied any leave when he had requested it and that Mecca had failed to show that TGH's legitimate non-discriminatory reason for the adverse employment action was pretextual.  

While the determination of whether an employee is a "qualified individual with a disability," and therefore, whether a requested accommodation is reasonable, is an inherently factual inquiry, Mecca provides employers with some guidance in situations where the employee's regular attendance is truly essential and the only accommodation requested involves the employee's irregular absence.  When engaging in the interactive process, employers in these situations should consider: (1) whether the employee's physical presence is essential to the work; (2) whether the work can be distributed in the event of the employee's absence; and, (3) whether the employee's absence will ensure his or her regular attendance in the immediate future.  Where the first question is answered in the affirmative and the latter two questions are answered in the negative, Mecca may provide support for denying a request of intermittent leave under the ADA.

Of course, employers should also be careful not to interfere with FMLA rights if an employee has a serious health condition that renders him unable to work and is otherwise entitled to FMLA leave.  The ADA and FMLA issues often overlap, so human resource professionals should exercise extreme care when considering terminating an employee because the employee cannot currently do the job.  Engaging in the interactive process early on is very important.  Err on the side of providing an accommodation as a part of your normal business practice, rather than immediately denying it.  Here, the fact that TGH already had granted Mecca multiple leaves and its flexibility in scheduling his work was a favorable factor for the employer.  

Join us at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss these and other employment law issues.

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The Audit's Done, and We Need to Reclassify – Now What?

POSTED BY SAMANTHA ABEYSEKERA ON MARCH 12, 2014

Let's assume you've done an internal audit, or one required by the Department of Labor, and found – as so many companies do – that certain titles/positions require reclassification from exempt to non-exempt under the Fair Labor Standards Act and state law.  What are the next steps?

The task of making reclassification a reality requires consideration of many factors.  For example, will the company pay backpay for some or all of the period during which employees were misclassified?  If so, will current and former employees be paid, or just current employees?  How far back should the company go in calculating backpay?  How many hours – in the likely absence of time records – should the company pay for?  How is the amount of backpay calculated?

Apart from the issue of repayment, companies also need to think about obtaining acknowledgements from employees to limit liability, "messaging" the reclassification to employees, setting new pay rates, and training supervisors to monitor and, if necessary, prevent off the clock work by those who are now non-exempt.

During our presentation at the 19th Annual Akerman Labor & Employment Law Seminar, we will discuss how to handle soup-to-nuts reclassification in a practical way, including best practices for limiting legal claims resulting from the reclassification.  We hope you will join us on April 4th!

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Avoiding Misclassification of Workers Under the FLSA

POSTED BY SUSAN N. EISENBERG ON MARCH 10, 2014

The news of late has been filled with articles about employers who are being sued for the misclassification of workers and the failure to pay overtime.  South Florida continues to be a hotbed of this litigation.  While Florida has only 6% of the nation's working population, it also boasts 27% of cases filed nationally under the Fair Labor Standards Act.  We can continue to speculate as to why Florida has such an active practice in this area, but the reality is, as employers, your best defense to these types of claims is bringing the company into compliance with the law.

The latest types of cases filed under the Fair Labor Standards Act deal with the threshold issue of who is an employee.  The FLSA does not give much guidance to that question as it defines an employee as an "individual employed by an employer."  Therefore, most courts employ a myriad of tests to determine whether a worker is an employee.  There has been a significant increase in the number of claims filed regarding the misclassification of independent contractors and the hiring of unpaid interns.  This is a recent new layer of litigation, which accompanies the still strong ongoing litigation over the question of whether employees are misclassified under the White Collar Exemptions.  It is difficult for employers to keep up with the law in the area of misclassification, as the law is ever changing and the Department of Labor is taking positions with regard to White Collar Exemptions that are inconsistent with positions they took 10 years ago.

At Akerman's upcoming 19th Annual Labor & Employment Law Seminar, I will address these very issues.  First, I will discuss the issue of independent contractors and the various tests that are used to determine whether workers are properly classified as independent contractors, along with potential exposure for those who are misclassified.  In addition, we will explore the problem with unpaid interns and review the recent high profile cases that have been brought in the entertainment industries.  We will also examine the general rule, which is strictly construed, to determine who may be an unpaid intern.  I will also review the White Collar Exemptions, which include  executive, administrative and professional, as well as highly compensated, employees.  We will define the salary level, salary basis and duties tests as they apply to the White Collar Exemptions, which, if properly utilized, will exempt employees from the overtime requirements under the Fair Labor Standards Act.

I hope you will join us for this interesting and informative presentation on wage and hour issues at the April 4th seminar. I look forward to seeing you there.

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Should Background Checks Be On Your New Employee Checklist?

POSTED BY DEBORAH A. CATALANO ON MARCH 5, 2014

"Where there's Pepsi, there's music" … is a slogan from a Pepsi marketing campaign.  No doubt the EEOC agrees – in 2012, Pepsi paid over $3 million to settle race discrimination claims and agreed to provide job offers and training because of its former background check policy.  According to a press release on the EEOC's website, the EEOC determined that "more than 300 African Americans were adversely affected when Pepsi applied a criminal background check policy that disproportionately excluded black applicants from permanent employment."  The EEOC contended that Pepsi’s former policy barred job applicants even where there had been no conviction. 

Also in 2012, Integrity Staffing Solutions reached a settlement involving a black job applicant who had been denied a job based upon a felony conviction occurring 30 years prior to his application.  ISS had a prohibition against hiring individuals with felony convictions.  As part of the settlement, ISS modified this policy to preclude a wholesale ban.

So, does this trend mean that employers should dispense with criminal background checks?  In short, no.  However, the EEOC's position is that employers may not have blanket policies using criminal background checks against applicants or employees. 

The EEOC isn't the only threat to employers when it comes to the use of background checks.  In February, 2014, a class action lawsuit was filed against Whole Foods in California alleging Fair Credit Reporting Act claims stemming from its purported online application process which included forms (to be signed by applicants) which were designed to obtain background check information.  The outcome in the Whole Foods case is likely to impact the plaintiffs' bar and employers.

In light of the EEOC's increasing opposition to the use of criminal records in hiring decisions and the compliance issues arising under the federal Fair Credit Reporting Act, employers must stay current on the law in this area and be able to show that the use of backgrounds checks is either directly related to job performance or justified by a legitimate business necessity.   Additionally, it is imperative that employers have the required disclosure and acknowledgement forms in order to minimize the risk of ending up in the situation in which Whole Foods is now.

I will provide an update on the use of Criminal Background Checks at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss these and other employment law issues.  Hope to see you there!

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Employment Records Retention Requirements – What Employers Need To Know

POSTED BY MELISSA S. ZINKIL ON MARCH 3, 2014

Careful recordkeeping and retention practices in the employment context are required by various federal and state laws, not to mention, essential to protect an employer's interests and limit its liability in the event of an investigation, claim, or lawsuit.

There are a myriad of federal statutes requiring that employers compile and retain employment related records.  These statutes include Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the Fair Labor Standards Act, just to name a few.  Further, federal and state statutory limitations periods impacting employment related claims necessitate the retention of records for particular periods, often beyond those set by statutory recordkeeping requirements.  These retention obligations are compounded in the event of an investigation, claim or lawsuit, in which event, employers are required to suspend regular deletion and destruction practices pertaining to potentially relevant documents and  preserve such records indefinitely.

The task of determining what to keep, and for how long, can be a daunting and confusing task, particularly where the paper (or electronic files) never stop piling up.  So what is an employer to do?

First, employers must assess the landscape and identify laws setting or necessitating recordkeeping requirements.  Second, employers should establish a comprehensive records retention policy to ensure that records the employer is required to keep and records that may be useful for further reference are retained appropriately.  Third, in the event of an investigation, claim, or lawsuit, employers should immediately initiate a "litigation hold" to ensure the preservation of potentially relevant documents beyond normal retention periods, consulting with experienced employment counsel when necessary.

During my presentation at the 19th Annual Akerman Labor & Employment Law Seminar, I will walk you through the recordkeeping and retention requirements set by major federal laws, best practices in light of those requirements, as well as state and federal statutes of limitations, and heightened obligations arising in the wake of an investigation, claim or lawsuit.  I will also review the consequences of failing to retain and preserve required records and documents potentially relevant to an asserted claim.  I hope you will join me on April 4th!

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The Lost Art of Conducting Effective Workplace Investigations

POSTED BY ERIC A. GORDON ON FEBRUARY 27, 2014

You are the HR leader for your organization.  Whether you are an executive, a human resources professional, an attorney, an owner, or – in many cases – hold more than one of these titles, when HR issues arise, they come to you.  

Not a day goes by when you are not faced with a new issue/problem/challenge that forces you to change your priorities for that day and attack this new one.  Whether it involves an employee claiming she (or he) was sexually harassed by their supervisor, or complaints of a manager slurring his speech and falling asleep at his desk, or threats of workplace violence from one employee against another, or receipt of a Charge of Discrimination by an employee claiming she was discriminated against based on her age, sex, religion, disability, etc., the "Employee Relations" part of your job never stops.  The more employees your organization has, the more complaints you receive from current and former employees, and the more workplace investigations you must conduct.

Conducting workplace investigations is one of the cornerstones of any HR professional's job duties.  Although there is not just one way to conduct an investigation, there are certain guidelines you should follow to ensure you are conducting a prompt and thorough investigation.  The initial determinations common to virtually all investigations include:

  • Recognize when an investigation in in order
  • Decide what the investigation should establish
  • Select appropriate investigators
  • Identify potential witnesses, documents, computer data, surveillance tapes, etc.
  • Plan the investigation
  • Organize a list of questions to ask the witnesses
  • Establish security for files and records.

Please join me at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss workplace investigations and other employment law issues.  The workplace investigation breakout session will be a "Case Study" in which we will examine multiple, real life fact patterns and will break down in detail the best way to conduct the investigation.  I hope to see you there.

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Health Care Reform – New Guidance for Employers and Relief for Mid-Size Employers

POSTED BY BETH ALCALDE ON FEBRUARY 25, 2014

Employers in all industries are well aware of the complexities of the Affordable Care Act, and the seemingly constant barrage of guidance that interprets the health care reform requirements that apply to them.  We have a recent perfect example.  A lengthy final rule was issued on February 12, 2014, jointly by the U.S. Department of Treasury and the Internal Revenue Service ("Final Rule"). 

The Final Rule does not delay the fundamental obligation of large employers (i.e., those with 100 or more employees) to offer minimum value, affordable group health plan coverage to their full time employees (i.e., employees working 30 or more hours per week) in 2015 in order to avoid penalties.  But the Final Rule does delay this obligation for mid-size employers with between 50 and 99 employees until 2016.  This is welcome relief for those mid-size companies.

The Final Rule also addresses many lingering questions about how employees' working hours must be counted under the Affordable Care Act.  Some of the categories of employees which have been most administratively problematic and for which we now have more certainty include the following: 

  • Seasonal Employees
  • Variable Hour Employees
  • Independent Contractors
  • Adjunct Faculty
  • Employees with Layover Hours
  • Employees with On-Call Hours
  • Temporary Employees Hired Through Staffing Firms

I will provide an update on this new Final Rule and cover other similar developments during my presentation on the Affordable Care Act – What Employers Need to Know, at the 19th Annual Akerman Labor & Employment Law Seminar. Hope to see you there!

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I-9 Compliance in an Era of Increased Enforcement

POSTED BY SCOTT E. BETTRIDGE ON FEBRUARY 18, 2014

I-9 investigations are at an all-time high.  Audits of employer I-9 forms increased from 250 in fiscal year 2007 to more than 3,000 in 2012. From fiscal years 2009 to 2012, the total amount of fines grew to nearly $13 million from $1 million. The number of company managers arrested has increased to 238, according to data provided by U.S. Immigration and Customs Enforcement (ICE). 

ICE is the principal investigative arm of the U.S. Department of Homeland Security (DHS). Created in 2003, ICE has continued to receive additional funding and now has more than 20,000 employees in offices in all 50 states and 47 foreign countries, with a budget of over $5.65 billion.  Based on its resources, ICE has been able to develop a comprehensive worksite enforcement strategy aimed at promoting national security and protecting critical infrastructure by targeting employers who violate employment laws or engage in abuse or exploitation of workers.  With immigration reform still uncertain, the trend toward increased scrutiny of immigration related employment practices will likely continue in the foreseeable future.  As such, it is even more critical that employers maintain a strong immigration compliance profile.  Employers can no longer afford to believe that because they don’t hire foreign national workers, they don’t have any I-9 exposure or liability.  Employers should take efforts to safeguard I-9 compliance and be prepared for heightened enforcement.

So, how can you best prepare for a potential ICE audit?  For most organizations the key to I-9 compliance starts with a thorough self-examination of existing I-9 forms, current process and operating policy, and past practices aimed at getting your I-9 house in order.  Based on this data, analyze the results, initiate targeted training, and standardize your I-9 practices and procedures. As you will likely discover, the I-9 process is error-prone and hard to centralize. Therefore, you will want to implement a solid system to keep track of all the I-9 documents, deadlines, and work visa re-verification requirements. These steps are especially important for companies that have high turnover rates, large numbers of employees and/or multiple worksites.

Please join me at the 19th Annual Akerman Labor & Employment Law Seminar where we will discuss  these and other employment law issues.

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New York Court Rules that Florida's Non-Compete Law is "Truly Obnoxious"

POSTED BY RICHARD D. TUSCHMAN ON FEBRUARY 13, 2014

A New York appellate court has ruled that Florida law on non-compete agreements is "truly obnoxious" to New York public policy and cannot be applied against a New York employee of a Florida-based company.

The court's decision in Brown & Brown, Inc. v. Johnson and Lawley Benefits Group, LLC, 2014 WL 486750 (N.Y.A.D. 4 Dept., February 7, 2014) is significant because it is common for companies based in Florida to insert choice-of-law provisions in their non-compete agreements which provide that Florida law shall govern in the event of a lawsuit – regardless of where the employee works.  The Brown & Brown decision suggests that employers should rethink this strategy.

Brown & Brown ("B&B") is an insurance intermediary with headquarters in Florida.  B&B hired defendant Theresa Johnson in 2006 to provide actuarial analysis.  Johnson signed an employment agreement that contained three restrictive covenants, including a non-solicitation clause that prohibited Johnson from soliciting or servicing any client of B&B’s New York offices for two years after the termination of her employment.  The agreement contained a Florida choice-of-law provision.  B&B terminated Johnson in February 2011, and Johnson was subsequently hired by Lawley Benefits Group, LLC.  B&B sued to enforce the restrictive covenants.  

The trial court ruled that the choice-of-law provision was unenforceable because Florida bore no reasonable relationship to the parties or the dispute.  The appellate court disagreed but held that the choice-of-law provision was unenforceable for a different reason – because it is “truly obnoxious’ to New York public policy.  Specifically, the court noted that under New York law, one of the factors for determining whether a restrictive covenant is reasonable is whether it imposes an undue hardship on the employee.  In contrast, under Florida law, courts are required to construe restrictive covenants in favor of the party seeking to protect its legitimate business interests, and in evaluating the reasonableness of the covenant the court cannot consider the hardship imposed upon the employee.  Applying New York law, the court held that the non-solicitation covenant could not be enforced.  

The Brown & Brown case is not an anomaly.  The opinion notes that courts in Alabama, Georgia, and Illinois have also concluded that Florida law conflicts with the public policy of their respective states.  On the other hand, many courts in other states will enforce choice-of-law provisions.  So what should a Florida employer do with respect to the restrictive covenants of its out-of-state employees?  The best practice is to consult with legal counsel and determine whether a court in the other state is likely to enforce a Florida choice-of-law provision.  If the answer is yes, a Florida choice-of-law provision may be an employer's best bet.  If the answer is no, the covenants should be drafted so that they will pass muster under the laws of the state in which the employee works.

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The Supreme Court Clarifies the Meaning of the FLSA's "Changing Clothes" Exception

POSTED BY NICHOLAS J. PURVIS ON JANUARY 30, 2014

In a near unanimous decision on Monday, the United States Supreme Court further clarified the multifaceted and oft-litigated issue of whether "donning and doffing" of some protective gear prior to or following a work shift falls within the "changing clothes" exception of the Fair Labor Standards Act ("FLSA").  The Court’s decision permits such actions to be deemed noncompensable in a collective bargaining agreement.   

In Sandifer et al. v. United States Steel Corp., the plaintiff, on behalf of allegedly 800 similarly situated workers, filed suit against U.S. Steel alleging violations of the FLSA, seeking backpay for time spent donning and doffing various pieces of protective gear.  The plaintiff sought backpay compensation despite the collective bargaining agreement in place specifically defining the time as noncompensable.  Because the act of donning or doffing protective equipment, or changing clothes, would otherwise be compensable under the FLSA, U.S. Steel's contention of noncompensability rested upon the validity of the provision in the collective bargaining agreement. The validity of the provision, in turn, rested upon the applicability of an exception to the FLSA contained in 29 U.S.C. § 203(o), which allows parties to decide, as part of a collective bargaining agreement, whether the time spent "changing clothes" is compensable, but not the time spent donning and doffing other equipment or non-clothes items.  

The Court held that the articles donned and doffed by the workers, despite being safety related equipment such as hardhats, work gloves, and a fire-retardant jacket, fell within the ordinary definition of "clothes" and within the § 203(o) exception.  The Court's definition of "clothes" -- derived from dictionaries in circulation at the time the exception was enacted -- "denotes items that are both designed and used to cover the body and are commonly regarded as articles of dress."  Hence, the jacket, albeit fire-retardant, falls within this definition.  

Furthermore, the Court held that even though there were three pieces of equipment that may not fall within the definition of "clothes" (i.e. safety glasses, earplugs, and a respirator), the entire time would nevertheless be noncompensable.  The Court said Congress did not intend § 203(o) "to convert federal judges into time-study professionals."  Rather, "[t]he question for courts is whether the period at issue can, on the whole, be fairly characterized as 'time spent in changing clothes or washing.' "  Therefore, if an employee devotes the vast majority of the time in question to putting on and off clothes as the Court defined that term, the entire period qualifies, and the time spent putting on and off other items of non-clothing need not be subtracted.  

The Sandifer decision applies a common-sense approach to the often litigated and complicated fact-finding analysis of what is properly defined as "clothes" under the law.  However, the knife cuts both ways; time spent donning and doffing predominately non-clothes items, even if coupled with putting on or off relatively minimal "clothes," would render the entire time compensable regardless of a collective bargaining provision to the contrary.  

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