Employers Prepare for Minimum Wage Increases in 2014


Florida's current $7.79 hourly minimum wage rate will increase to $7.93 effective January 1, 2014.  Florida's minimum wage law requires the Florida Department of Economic Opportunity to recalculate Florida's minimum wage annually based upon the increase in the federal Consumer Price Index for Urban Earners and Clerical Workers in the Southern Region. This minimum wage increase applies to all employees who are covered by the federal Fair Labor Standards Act.

This hourly increase also impacts wages paid to tipped employees working in Florida. For tipped employees who receive tips as part of their compensation under the FLSA's tip credit rules, employers may count those tips as wages under Florida's minimum wage law. Employers may take a credit of up to $3.02 per hour for all tipped employees.  However, tipped employees must also receive a direct hourly wage. Effective January 1, 2014, this direct hourly wage must be at least $4.91 – calculated as Florida's minimum wage ($7.93) minus the permissible tip credit ($3.02).

Other states are also increasing minimum hourly wages for non-exempt employees in 2014:

  • Arizona: $7.90 effective January 1, 2014.  
  • Connecticut: $8.70 effective January 1, 2014.
  • California: $9.00 effective July 1, 2014.
  • Montana: $7.90 effective January 1, 2014.
  • New York: $8.00 effective December 31, 2013; $8.75 effective December 31, 2014.
  • Ohio: $7.95 effective January 1, 2014.
  • Oregon: $9.10 effective January 1, 2014.
  • Rhode Island: $8.00 effective January 1, 2014.
  • Washington: $9.32 effective January 1, 2014.

States with pending announcements regarding 2014 minimum wage increases include Colorado, Missouri, and Vermont.

*Florida's 2014 minimum wage posters are available for downloading in English and Spanish from the Department of Economic Opportunity website.



Aery is Scary for Florida Whistleblower Act Defendants


The Florida Whistleblower Act ("FWA") prohibits employers from retaliating against employees who object to, or refuse to participate in, the employer’s violation of a law, rule, or regulation.  But most courts have held that an employee must show that he opposed an actual violation of a law, rule or regulation; a good faith belief that a violation occurred or is about to occur is insufficient.  

Florida’s Fourth District Court of Appeal apparently disagrees.  In Aery v. Wallace Lincoln Mercury of Lake Park (Fla. 4th DCA, July 31, 2013), the court addressed the FWA claim of John Aery, an automobile parts manager, who believed that the body shop manager was installing used parts in customers’ cars but billing the insurance company for new parts. Aery informed the general manager that this practice was in violation of industry standards and also "against the law." Several months later the general manager fired Aery.  Aery brought suit under the FWA. The trial court dismissed the case on the employer's motion for summary judgment, and Aery appealed.  One of the employer's arguments on appeal was that Aery had failed to state a cause of action because he did not tell his supervisor what laws the body shop manager was breaking.  The Fourth DCA disagreed, holding that "it was not necessary that Aery provide his employer with statutory and case law citations to support his claim of illegal conduct."  And, the court held that a plaintiff asserting a FWA claim need only show that he had a "good faith, objectively reasonable belief" that his the employer’s activities were illegal.  

Aery leaves the burden of proof in a FWA claim in a state of uncertainty.  The "actual violation" standard places a high burden on plaintiffs and is more favorable to FWA defendants.  It is also the standard that the Florida Supreme Court seemingly endorsed in its pattern jury instructions. The "good faith, objectively reasonable belief" standard – the same standard used in Title VII cases – is significantly lower and opens the door to many more FWA claims.  Which standard applies will be determined by the court in which the parties find themselves– at least until the Florida Supreme Court decides the issue.


It's Official - Offering Full Monetary Relief Without a Judgment Will Not Moot FLSA Case


Last year we reported on the Eleventh Circuit's decision in  Zinni v. ER Solutions, Inc. (11th Cir., August 27, 2012), which seemed to signal that a defendant in a Fair Labor Standards Act case cannot moot the case by offering full monetary relief to the plaintiff without also offering a judgment to the plaintiff.  The issue is significant because a judgment will trigger a plaintiff's entitlement to attorney’s fees.  In Zinni, a defendant could not avoid an award of fees to plaintiff, even when offering the full amount of damages that could be recovered. But, Zinni was not a FLSA case – it was a Fair Debt Collection Practices Act case.
Recently, the Eleventh Circuit confirmed the conclusion that Zinni seemed to portend.  In Wolff v. Royal American Management, Inc. (11th Cir., October 1, 2013), the court held that the defendant's tendering of full monetary relief to the plaintiff did not moot her FLSA case and the plaintiff was therefore entitled to her attorney's fees. 

The plaintiff, Phyllis Wolff, claimed she was owed $1,800 in overtime wages and an equal amount in liquidated damages.  The defendant, Royal American Management, Inc. ("RAM"), tendered $3,600 to plaintiff through her attorney and moved to dismiss the complaint.  Wolff's counsel returned the check.  RAM then offered to settle the case for $5,000, but Wolff's counsel never submitted the offer to Wolff because it was not in writing.  When Wolff learned of the offer, she met with RAM on her own, signed a general release, and took the $3,600 check.  The district court approved the settlement but found that the settlement had not mooted the case. The court entered judgment for Wolff and awarded her attorney's fees in the amount of $61,810.44.

On appeal, the Eleventh Circuit affirmed.  The court held that RAM's offer did not constitute full relief that would moot Wolff's claim, because full relief must include an offer of judgment.  The catch, of course, is that a judgment triggers the plaintiff's entitlement to attorney's fees. 

The Supreme Court's recent decision in Genesis Healthcare Corp. v. Symczyk, 133 S.Ct. 1523 (2013), does not change the analysis.  Genesis involved a settlement offer that included an offer of judgment.  The Supreme Court held that, assuming such an offer mooted the plaintiff's case, it also mooted a putative collective action where there were no other plaintiffs in the case.  Genesis did not answer the question of whether a defendant can moot a FLSA case by offering full monetary relief, but not a judgment, to the plaintiff. 

In the Eleventh Circuit, Wolff provides the answer to that question and makes it clear that plaintiff's attorneys will continue to have a financial incentive to file even low-dollar FLSA cases in court.  A defendant cannot buy off the plaintiff without also paying her attorney.  And as the facts of Wolff illustrate, a defendant's failure to realize that early in the case can be a very expensive mistake.



Can Employer Who Has Granted Employee's FMLA Request Dispute Employee's FMLA Eligibility?


An employee sends an email to her manager requesting FMLA leave to care for her father "while he deals with issues surrounding his terminally ill brother."  The supervisor writes back, "Approved," and the employee takes leave.  Neither the FMLA nor the employer's FMLA policy allows leave to care for a terminally ill uncle.  Based on the employee's absence, the employer rescinds a temporary promotion the employee had received.  The employee sues the employer for FMLA retaliation.  Can the employer argue in defense that the employee was ineligible for FMLA leave?  That was the issue presented in a recent case decided by the Eleventh Circuit Court of Appeals, Dawkins v. Fulton County Government, Case No. 12-11951 (11th Cir., September 30, 2013).  

Equitable estoppel is a doctrine that prevents a party in litigation from asserting a claim or fact that is inconsistent with a position that the party has previously taken, if the other party has reasonably relied on that position.  In Dawkins, the employee argued that in light of her supervisor’s approval of her FMLA leave request, her employer should have been prevented from disputing her FMLA eligibility.  That argument raised two questions:  Does the Eleventh Circuit recognize equitable estoppel to extend FMLA coverage?  And assuming it does, did the employee’s equitable estoppel argument have merit?

Unfortunately, the court decided the second question only.  The court held that the employee did not reasonably rely on her supervisor’s approval of her FMLA request.  The court noted that the employee had previously taken FMLA leave and knew that completing FMLA paperwork was required for the employer to determine FMLA eligibility.  So, any reliance on the supervisor’s email approval was not reasonable. Additionally, before receiving the supervisor’s approval, the employee asked for her FMLA paperwork to be sent to her uncle’s address in Florida. This showed that the employee was intent on taking leave regardless of her FMLA eligibility and that she did not actually rely on her supervisor’s approval.

The court declined to decide whether equitable estoppel can ever be used to extend FMLA coverage. The court stated: "The relief Dawkins requests would require this court to create a new federal common law equitable estoppel applicable to the FMLA.  The times when we should create new federal common law are few and restricted."  But in a dissenting opinion, Judge Wilson noted that every other circuit to have considered the issue has decided that equitable estoppel can apply in FMLA cases. So it remains to be seen how the Eleventh Circuit will resolve this issue.

For employers, the Dawkins case should serve as a reminder about the importance of carefully considering FMLA leave requests.  While employers should not deny legitimate FMLA requests made by eligible employees, employers should be hesitant to grant FMLA leave requests made by ineligible employees. Under the right set of facts, an ineligible employee might be able to persuade a court that the employer's actions prevent the employer from disputing his FMLA eligibility – even if his leave was to care for his sick uncle.


With This Ring, I Thee Confer Benefits... The Meaning of "I Do"


Based upon an IRS determination which took effect last week, same-sex couples who enter into marriages in jurisdictions that recognize such marriages are now treated as married for federal tax purposes, regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage.  The IRS will now allow pre-tax dollars to be used to pay premiums for same-sex spouse benefits, such as health insurance coverage. 

With regard to employer-provided benefits, the IRS ruling does not confer an obligation for employers to provide spousal coverage.  However, if an employer has a benefit plan which entitles spouses to certain benefits, and the term "spouse" is not defined as an opposite-sex marriage, the same-sex spouse may be covered under those plans, even if same-sex marriage is not recognized in the state where the couple resides.  The IRS ruling follows upon the determination by the United States Supreme Court in U.S. v. Windsor, 133 S. Ct. 2884 (June 26, 2013) that key parts of the "Defense of Marriage Act," unconstitutionally denied federal recognition to same-sex spouses.  Other benefits, such as job-protected leave under the Family and Medical Leave Act ("FMLA") have not yet caught up. 

Under the FMLA, the definition of "spouse" depends upon state law.  In August, 2013, the U.S. Department of Labor reiterated that the term "spouse" means "a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including 'common law' marriage and same-sex marriage."  So basically, an employee may be able to provide health insurance to his or her same-sex spouse, but not take leave if that spouse develops a serious health condition, depending upon whether their marriage is recognized in the jurisdiction where they live.

Unless and until DOL aligns with the IRS, an employer's definition of "spouse" with regard to employee benefits may be open for interpretation.  Currently there are thirteen states which recognize same-sex marriages, whether by legislation, court decision or popular vote (California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Washington, plus the District of Columbia).  If you have employees in those jurisdictions, same-sex spouses would be entitled to leave benefits under the FMLA.  For employers who have employees with same-sex spouses residing in jurisdictions where same-sex marriage may not be recognized, take a look at your policies.  It is possible that any references to "spouses" or "marriages" within your employee benefit plans, including health insurance and retirement plans, may be construed to include same-sex spouses.  Depending upon the size of your workforce, this impact may not be significant.  However, now is a good time to review your policies and determine whether it would be appropriate to amplify the definition of spouse, such as an "opposite-sex marriage," to ameliorate the impact of the IRS ruling where such broad coverage may not be intended, particularly in jurisdictions where same-sex marriages are not currently legally recognized.


Continued Employment in Dead-End Job May Entitle Employee to Incentive Benefits


In Florida, employee handbooks, procedure manuals, and other statements of an employer's policy are generally non-binding and do not give rise to enforceable contract rights.  But suppose an employer induces an employee to continue working by offering a long term incentive plan? That was the issue addressed in a recent decision by Florida’s Fourth District Court of Appeal, Turton v. Singer Asset Finance Co., LLC (Fla. 4th DCA, September 4, 2013).

Singer Asset Finance Company was in the business of purchasing, servicing and securitizing assets, including state lottery awards and structured settlement payments.In 2000 or 2001, Singer decided to cease all business except to become a "run down" entity, functioning solely for the collection of its structured settlement portfolio.  To incentivize employees to stay with the company during the "run down", Singer offered the "2001 Singer Long Term Compensation Plan."  One of the express purposes of the Plan was to "[c]reate enough incentives so that employees will not resign their positions."  The Plan guaranteed employees at least twenty-five shares per year and contained a formula for how employees would receive shares in the Plan each year.  The Plan also contained formulas for determining the value of shares, how much each shareholder would receive for the shares, and how payments would be made to shareholders. 

Margaret Turton worked for Singer from 1997 through December 2009.  Upon her resignation, she demanded payment of the value of her vested shares in the Plan.  Singer refused payment, and Turton sued for breach of contract.  Turton argued that she relied on the offer of long term  compensation – that she would not have continued working for Singer in her "dead end job" beyond 2001 if not for the offer of compensation under the Plan.  Singer argued that the Plan was neither a contract nor an offer and that any compensation from the Plan was discretionary.  The trial court agreed with Singer and granted the company’s motion for summary judgment, noting that that there was no explicit language in the Plan stating that it was a binding contract.

On appeal, the Fourth DCA reversed.  The court noted that the Plan was not only designed to compensate employees for hard work, but also to compensate employees for not quitting a dying business.  Thus, there were questions that a jury would have to resolve: Whether the transmission of the Plan to Turton constituted a continuing offer to avoid Turton's resignation, and whether Turton's continued employment was a continuing acceptance of the offer.

It seems likely that a jury of Turton's peers will answer these questions in her favor.

For employers, the Turton case should serve as a reminder of the importance of careful drafting.  If you want an offer of compensation or benefits to an employee to be discretionary and non-binding, state that clearly in the document.  Absent such a disclaimer, the employee’s acceptance of your offer is likely to create a binding contract. The defense that "we didn't mean what we promised" is not very appealing, especially when employees rely on that promise. 


Minimum Wage and Overtime Pay Extended to Certain Direct Home Care Workers


On September 17, 2013, the U.S. Department of Labor's Wage and Hour Division announced a final rule extending the Fair Labor Standards Act's minimum wage and overtime protections to cover certain direct care workers such as certified nursing assistants, home health aides, personal care aides, caregivers and other companions who provide essential home care assistance to elderly people and people with illnesses, injuries, or disabilities. The new rule will take effect January 1, 2015. 

Since 1974, the Fair Labor Standards Act ("FLSA") has covered workers who perform a "domestic service" – i.e., services of a household nature performed by a worker in or about a private home, whether permanent or temporary. This term includes services performed by companions, babysitters, cooks, waiters, maids, housekeepers, nannies, nurses, janitors, caretakers, handymen, gardeners, home health aides, personal care aides, and family chauffeurs, among others.  However, the FLSA also provides for a Companionship Services Exemption, exempting certain domestic service workers from minimum wage and overtime protection including, but not limited to, casual babysitters and domestic service workers employed to provide "companionship services" for an elderly person or a person with an illness, injury, or disability if they meet certain regulatory requirements described below.  

The amended regulations narrow the Companionship Services Exemption in two ways. First, they narrow the definition of "companionship services". Second, they provide that the exemption may only be claimed by the individual, family, or household using the services.

Under the revised regulations, the term "companionship services" means the provision of "fellowship" and "protection" for an elderly person or a person with an illness, injury, or disability who requires assistance in caring for himself or herself. "Companionship services" also include the provision of care, such as assisting a person with activities of daily living, provided that that such care requires no more than 20 percent of the employee's time worked for the person during the workweek. "Companionship services" do not include the performance of medically related services or household work not performed primarily for the elderly person or person with an illness, injury or disability who requires assistance, or household services.  Also, under the revised regulations, the Companionship Services Exemption is only available to the individual, family, or household solely or jointly employing the worker, and only if the companionship services duties test is met.  Third party employers of direct care workers, such as home care staffing agencies, are not permitted to claim this exemption, even when the employee performs companionship services and is jointly employed by the third party employer and the individual, family, or household using the services.  As such, third party employers must pay their workers the Federal minimum wage for all hours worked and overtime pay at time and one-half of the regular rate of pay for all hours worked over 40 in a workweek.



Urging an Employee to Retire is Not Necessarily Evidence of Age Discrimination


Mandatory retirement is generally unlawful under the Age Discrimination in Employment Act.  So when an employer urges an employee to retire, isn't this evidence of age discrimination that an employer should avoid?  

Not necessarily, as illustrated by a recent decision by the Eleventh Circuit Court of Appeals, Woolsey v. Town of Hillsboro Beach (11th Cir., September 6, 2013). 

James Woolsey is a police officer employed by the Town of Hillsboro Beach.  In 2008, the town's Chief of Police promoted Woolsey, who was 49 years-old at the time, to Captain, or second-in-command. But by 2010 Woolsey's relationship with the Chief soured because Woolsey had implemented certain practices the Chief did not agree with.  Woolsey claimed the Chief twice demanded that he retire and was silent when Woolsey asked why.  The Chief also provided Woolsey with materials for the Florida Retirement System's Deferred Retirement Option Program (DROP).  Woolsey claimed that the Chief told him that if he did not retire, he "was going to take [him] down in an embarrassing ball of flames."

That year, the Chief demoted Woolsey from Captain to Patrol Officer.  The Chief cited the following reasons for his decision: lack of loyalty, lack of supervisory skills, failure to perform at the level expected of Captain, failure to support the Police Department's accreditation process, and disagreements about how the Department should have been run.  

Woolsey sued the town, claiming that the Chief was motivated by age discrimination. The district court granted the town's motion for summary judgment, and Woolsey filed an appeal. 

The Eleventh Circuit affirmed the district court's decision.  The court noted that in support of the Chief's stated reasons for Woolsey's demotion, the town submitted multiple letters of counseling/reprimand and performance evaluations issued to Woolsey explaining his specific deficiencies and what needed to be done for him to improve, including a warning of possible demotion or termination if he did not.  While Woolsey argued that these were all subjective reasons, the court stated that a subjective reason is legally sufficient as long as the employer "articulates a clear and reasonably specific factual basis upon which it based its subjective opinion." In fact, Woolsey acknowledged that he had disagreements with the Chief about how the Department should be run. Also of significance was the fact that the Chief had promoted Woolsey just a couple of years earlier when Woolsey was 49 years old.  In short, the Eleventh Circuit held that Woolsey's claim of age discrimination was so weak that the district court was correct in granting summary judgment in the town's favor. 

Interestingly, the court's opinion attributed no significance to the Chief's repeated demands that Woolsey retire.  In the context of this case, that makes sense.  An employer may be aware that an employee is eligible for retirement benefits but be motivated to terminate or demote the employee for legitimate, non-discriminatory reasons.  In that scenario, urging an employee to accept retirement benefits as an alternative to a lawful discharge does not necessarily evidence a discriminatory intent.


Keeping the Jury at Bay: Workers' Compensation Retaliation Claim is Subject to Arbitration


A workers' compensation retaliation claim must be arbitrated under the parties' arbitration agreement, according to a recent decision by Florida's Second District Court of Appeal, Audio Visual Innovations, Inc. v. Spiessbach (Fla. 2d DCA, August 16, 2013)
Michael Spiessbach injured his back while working for Audio Visual Communications, Inc. (AVI).  He claimed that after filing a claim for workers' compensation benefits, AVI treated him differently and eventually terminated his employment because of his claim.  Spiessbach then filed suit under Florida's workers' compensation retaliation law, section 440.205, Florida Statutes.
AVI moved to compel arbitration, but the trial court denied the motion.  On appeal, the Second District Court of Appeal considered several issues.  First, did the arbitration agreement substantially diminish the statutory remedies under section 440.205?  The court held that it did not.  The employee was not required to pay the arbitrator's fees, and the arbitrator was authorized to grant any relief that a court could grant.
Second, was the workers' compensation retaliation claim a claim for "workers' compensation benefits" that was excluded under the parties' arbitration agreement?  The court held that it was not, noting that a petition for workers' compensation benefits is filed with the Office of the Judges Compensation Claims, whereas a claim for workers' compensation retaliation is filed in Circuit Court. 
Third, did the employer waive its right to arbitration by filing two motions for extension of time to answer the complaint, participating in mediation, and waiting five months before demanding arbitration?  The court held that the employer did not waive its right to arbitration because it did not file a responsive pleading or otherwise take a position on the merits that would be inconsistent with its right to arbitration.
The court therefore reversed the trial court's order and directed the trial court to grant AVI's motion to compel arbitration. 
For employers, the Spiessbach case is a good illustration of the pros and cons of arbitration.  The main benefit to the employer is that the case will be decided by an arbitrator rather than a jury.  For employers who fear hostile, "runaway" juries, that is a good thing.  On the other hand, arbitration agreements are often challenged by employees.  The cost of defending the arbitration agreement in court, coupled with the arbitrator's fees, may prove to be more expensive than litigation.  In addition, if the employer has a good case for summary judgment, court may be a better option, as arbitrators are hesitant to make an award for an employer without a hearing.  Accordingly, whether to have an arbitration agreement depends on many factors that should be carefully considered.    


The Continuing Saga of Unpaid Workers & Misclassification Issues


Worker misclassification continues to be an issue at the forefront of today's workplace.  Along with the use of unpaid interns, we are now seeing litigation brought on behalf of unpaid volunteers seeking compensation.  In the last week alone, three court filings highlight various issues related to unpaid workers:
  • On August 6, 2013, an unpaid summer intern working at Columbia Music Corp. filed a class action lawsuit in New York state court to recover unpaid minimum wages under New York state labor laws.  The named plaintiff (Britt'ni Fields) worked in Columbia's Promotions Department during the summer of 2008. According to the complaint, Fields' duties included general office task such as making photocopies and handling mass mailings.  The complaint alleges that Fields and other interns should have been compensated for this time because Columbia would otherwise have needed to hire new employees or pay additional wages to existing employees to perform this type of work. 
  • On August 7, 2013, an unpaid volunteer working at Major League Baseball's "FanFest" filed a hybrid class and collective action lawsuit in federal court for the Southern District of New York seeking to recover unpaid minimum wages under both the federal Fair Labor Standards Act and New York state labor laws. Plaintiff John Chen claims that he and other volunteers should have been compensated for the time they spent working as greeters, manning the information booth, and handling event hospitality.  The lawsuit alleges that volunteers were required to attend a mandatory orientation session, pass a background check, and wear a "uniform" consisting of sneakers and khaki pants or shorts.  Instead of wages, Chen and the other volunteers received Major League Baseball souvenirs. 
  • Also on August 7, 2013, two former unpaid interns filed a petition with the United States Supreme Court seeking to resolve a conflict among federal appeals courts as to the appropriate legal test for determining whether an unpaid intern is entitled to wages under the FLSA.  The petitioners, Risa Kaplan and Linda O'Neill, both completed externships as part of earning a degree in medical billing and coding at MedVance Institute.  Both Kaplan and O'Neill claimed that they were entitled to unpaid minimum wages for their work checking the status of medical claims and reviewing accounts during the course of their externships.    

These cases, coupled with the recent ruling against Fox Searchlight Pictures that unpaid interns working on the production of the film Black Swan were misclassified, may signal increased litigation related to unpaid interns and volunteers. Employers should review existing internship and volunteer programs to ensure that programs comply with the specific guidance issued in April 2010 by the U.S. Department of Labor.  Our July 2, 2013 Practice Update addresses the DOL's guidance in detail and provides practical suggestions for evaluating workplace internship and volunteer programs.



Healthcare Employers Beware: OSHA Campaign Is Targeting You


On July 16, 2013, the Occupational Safety and Health Administration (OSHA) announced that it is launching a campaign that aims to protect healthcare workers from musculoskeletal disorders (MSDs).  While this campaign expressly targets the District of Columbia and three nearby states, it is part of a broader campaign by OSHA, unions, and health worker advocates to put increased pressure on inspections in the healthcare industry.

As part of this effort, on July 17, the Washington-based pro-union, advocacy group Public Citizen released a report — "Health Care Workers Unprotected" — that criticized OSHA for not inspecting more healthcare industry establishments and lacking standards addressing healthcare industry hazards.  Officials from the Service Employees International Union and American Nurses Association appeared on a Public Citizen telephone news conference to endorse the report.

The Public Citizen report states that healthcare workers suffer more injuries and illnesses on the job each year than those in any other industry, but OSHA conducts relatively few inspections of healthcare facilities and is stymied in its ability to take action to address unsafe conditions by an absence of needed safety standards. 

The Public Citizen report also argued that the lack of regulations applicable to healthcare hinders inspectors, who are hesitant to cite employers under the general duty clause for a violation that does not correspond to a specific safety standard. The report noted that OSHA issued an ergonomic standard that could have protected healthcare workers in 2000, but Congress repealed it before it could take effect.  In the report, Public Citizen recommended that OSHA increase the number of inspections of the healthcare industry facilities and pursue standards to ensure that workers are protected from the risks posed by MSDs, workplace violence, and other threats. The report also recommends that Congress significantly increase funding of OSHA. 

In addition to MSD injuries, the report states that workplace violence is another serious hazard in the healthcare industry. Public Citizen recommended that OSHA develop a standard for workplace violence.  This standard, according to Public Citizen, should require employers to adopt zero-tolerance policies for violence and threats, provide protection for employees to deter co-worker retaliation, and develop workplace safety plans.  [In 2004, OSHA published guidance on preventing workplace violence in healthcare settings.]

The report identified injuries from surgical instruments and needles as a third major concern.  Although Public Citizen praised OSHA's bloodborne pathogen standard, it said the agency should update that rule to require injury logs that are reviewed by both managers and workers to assess potential hazards. The updated standard, according to Public Citizen, should also mandate employers purchase best available technology in needles and instruments, and that they consult with workers before making those purchasing decisions.  [OSHA has begun a review of the standard and has said it will end its review and issue findings in later this year.]

These union-backed efforts follow the release of a little publicized OSHA letter of interpretation, dated April 5, 2013, wherein the agency announced for the first time that during an inspection of non-union worksites, employees can be represented by anyone selected by the employees, including outside union agents.  OSHA's new policy will undoubtedly encourage unions to get involved in OSHA inspections in non-organized facilities as a means of gaining access to the facility.  In short, these OSHA developments provide an open door to many union organizers targeting the healthcare industry — an industry sought after by labor organizations in recent years. 

Now more than ever, healthcare employers should engage in vigorous compliance with federal and state safety standards. 


NLRB Has Full Complement Of Board Members


The Senate confirmed all five of the President's nominees to serve as National Labor Relations Board (the "Board") members on July 30, 2013.  This gives the Board a full complement of Senate-confirmed members for the first time in a decade. 

The Board now includes Democrats Board Chairman Mark Gaston Pearce, whose term was set to expire in August, Kent Hirozawa, who has served as Pearce's chief counsel, and Nancy Schiffer, a retired associate general counsel at the AFL-CIO. The two Republican members are Philip Miscimarra, a partner at Morgan Lewis & Bockius LLP, and Harry I. Johnson III, a partner at Arent Fox LLP.  

The nominations of Hirozawa and Schiffer on July 16, 2013 were part of a Senate deal to avert a filibuster showdown.   Hirozawa and Schiffer replaced the previous renominations of Richard F. Griffin, Jr. and Sharon Block, on February 13, 2013.  One may recall that it was their appointment as Board Members on January 4, 2012, during what the President considered to be a recess, that led to the D.C. Circuit's Noel Canning decision that the Senate was not actually in recess and the appointments were unconstitutional.   That decision is currently on appeal to the U.S. Supreme Court. 

Republicans engaged in efforts to block the Griffin and Block nominations, as well as several other nominations, and Democrats countered by threatening a rule change to end filibusters of executive nominations. As a compromise, Democrats agreed not to force the rule change, and Republications agreed  not to  filibuster the two new nominees or Pearce's renomination.

The new nominations remove any doubt about Board authority going forward and are not expected to cause a shift in the Board's approach to labor law issues, because the Board still contains a Democrat majority.  Further, even if Noel Canning is upheld on appeal to the U.S. Supreme Court, the new Board will be able to reissue all the decisions called into question.



Don't Forget To File Your EEO-1 Reports


All private employers who are subject to Title VII and have at least 100 employees must file the Employer Information Report ("EEO-1 Report"). The Equal Employment Opportunity Commission ("EEOC") requires that the EEO-1 Report must be filed by September 30, 2013.  In addition, private employers who have fewer than 100 employees, but are owned or affiliated with one or more other companies, or who have centralized control or management with other companies, such that the group of companies is a single enterprise may also have to file the EEO-1 Report.  Where such an enterprise employs at least 100 employees, the company must file an EEO-1 Report.  Most federal contractors and first-tier subcontractors are also required to file an EEO-1 Report.

The EEO-1 Report requires the disclosure of various types of company information, including federal contractor status, and employment data by job category, race/ethnicity, and gender.  The EEOC prefers that employers file the EEO-1 Report online using the EEOC's website.  For more information, click here to access the EEOC's website about EEO-1 Reports.


Employer's Back Door Settlement of FLSA Claim Backfires


An employer's settlement of a Fair Labor Standards Act claim directly with a former employee rather than with the former employee's attorney was invalid and should not have been approved by the federal district court, according to a recent decision by the Eleventh Circuit Court of Appeals, Nall v. Mal-Motels, Inc. (11th Cir., July 29, 2013). 

Candace Nall worked for Mal-Motels, which is owned by Mohammad Malik.  Nall quit her job because she was not being paid overtime.  She then hired an attorney and filed suit against Mal-Motels and Malik. Malik, who apparently did not want to pay an attorney any more than he wanted to pay Nall overtime, filed an answer.  Malik then met with Nall to discuss a settlement of her lawsuit.  Malik told Nall she was "ruining his business" and proposed a settlement of two thousand dollars in exchange for a dismissal of the lawsuit.  Nall, who was homeless and needed the money, accepted the settlement and filed a voluntary dismissal of the case.  The court rejected the dismissal because it had not been filed by her lawyer.  Malik then hired a lawyer, who moved to enforce the parties' settlement.  At the hearing on the motion to enforce the settlement, Nall's attorney objected to the settlement. Nevertheless, the court approved the settlement as "a fair and reasonable resolution of a bona fide dispute under the FLSA" and dismissed her complaint. 

On appeal, the Eleventh Circuit reversed.  The court began by reaffirming the rule stated in Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982) that back wage claims arising under the FLSA can be settled or compromised only by the Department of Labor or by a court-supervised settlement that results in a "stipulated judgment" after the court has scrutinized the settlement for fairness.  The settlement did not meet the Lynn's Food Stores requirement of a stipulated judgment because "it takes two (or more) to stipulate," the court wrote, "and a judgment to which one side objects is not a stipulated one."  Although Nall had agreed to the settlement, the fact that Nall's attorney objected to the settlement was significant: 

When a plaintiff's attorney asks the district court to reject a settlement agreement that was reached without the attorney's knowledge or participation, whatever else the judgment approving the agreement may be, it is not a "stipulated judgment" within the meaning of Lynn's Food.

Employers should take a couple of lessons from the Nall decision.  First, hire a lawyer if your company is sued under the FLSA.  A non-lawyer cannot represent a corporation and is probably unqualified to understand the rules regarding the settlement of FLSA cases.  Second, if the plaintiff is represented by an attorney, do not attempt a "back door" settlement directly with the plaintiff.  Cutting out the plaintiff's attorney may seem like a clever idea, but the plaintiff's attorney will not simply go away.  In the long run, you will pay more by doing what Malik did than by defending the case the right way.  But you don't have to take my word for it. The Eleventh Circuit's opinion in Nall begins with this observation:

This appeal grew out of an effort by two people to settle an FLSA lawsuit involving an overtime claim.  They attempted to settle the litigation without the advice and assistance of attorneys, which only led to the involvement of attorneys and more litigation.  The case presents issues about how a lawsuit involving an FLSA claim can be settled, and it demonstrates how a few dollars saved can lead to a lot more dollars spent.



Supervisor Misconduct Alone is Insufficient to Impute Employer Liability Under the OSH Act


On July 24, 2013, in Comtran Group, Inc. v. U.S. Department of Labor, the U.S. Court of Appeals for the Eleventh Circuit overturned a final decision of the Occupational Safety and Health Review Commission ("Review Commission") and issued an important decision affecting employer liability under the Occupational Safety and Health Act ("OSH Act") in a case involving supervisor misconduct.  

A supervisor for the employer, Comtran Group, was digging in a six-feet deep trench with an unprotected five-feet high "spoil pile" at the edge of the excavation — a violation of an OSHA standard.  The case on appeal before the Eleventh Circuit involved the Department of Labor's contention that it is appropriate to impute a supervisor's knowledge of his own violative conduct to his employer under the OSH Act, thereby relieving the Secretary of Labor of her burden to prove the "knowledge" element of her prima facie case.  In reversing the Review Commission's decision, the Eleventh Circuit answered the question of first impression for this circuit in the negative.

In disagreeing with the Review Commission, the Court found that the Secretary failed to show that the employer knew or should have known that the OSH Act was being violated.  To establish employer liability for OSH Act violations, the DOL must show all of the following:

  • The regulation cited applied; 
  • It was violated;
  • That an employee was exposed to the hazard that was created; and
  • The employer "knowingly disregarded" the OSH Act’s requirements.

In Comtran, the DOL established the first three prongs of the four-prong test, but the Eleventh Circuit found that the DOL failed to prove the knowledge element. Even more importantly, the Eleventh Circuit decided that the DOL cannot meet its burden under the fourth prong by supervisory misconduct alone.  

The Court noted that there's a distinction between a supervisor's knowledge of a subordinate's misconduct, which can be imputable to an employer, and the supervisor's knowledge of his own misconduct. An employer can only act through its agents, of course, and the supervisor is the employer’s "eyes and ears," such that his knowledge is the employer’s knowledge. However, when the misconduct is the supervisor's own, the employer in such instance has no "eyes and ears," the Court stated. "It is, figuratively speaking, blind and deaf. To impute knowledge in this situation would be fundamentally unfair." The result would be arbitrary and capricious, the Court said, and not in accordance with the law;  thus, it reversed the Review Commission’s decision.


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