Castor Sprattlin Law Group, LLC


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November 2016

Nationwide Injunction Issued Putting On Hold FLSA Salary Increase Rules - What Does It Mean For Employers?

 By Nancy Castor Sprattlin, Esq.


It seems employers may have received an early holiday present from a judge in Texas. Judge Amos Mazzant of the Eastern District of Texas has issued a nationwide injunction stopping the implementation of the new rules applicable to the White Collar Exemptions under the Fair Labor Standards Act (FLSA). The new rules, originally scheduled to go into effect on December 1, 2016, would have required employers to raise exempt employees ' salaries to meet the new threshold of $913 weekly or $47,476annually or reclassify them as non-exempt.  Essentially, the rules have now been delayed for employers, for now!


 What does this injunction mean for you, employers?  Employers may now have options depending on whether they have already taken steps to implement the new rules.  If you have already made changes and communicated them to employees, it would be best to consult with employment law counsel prior to changing anything back.  If you have not yet made any changes, you no longer need to make those changes by December 1, 2016. We will continue to keep this website updated on this issue. But, in the interim, feel free to contact us 404.410.3075 (Direct)  or 770.952.5000 (Firm) with any questions or any request for an audit to ensure compliance.


The Season To Be Jolly Soon Approaching, Employers Beware

By Nancy Castor Sprattlin, Esq.


November is here, thus the holidays are right around the corner!  It is that time again when employers must grapple with the dilemma as to whether to hold a holiday party for their employees.  Holiday parties are a legal minefield for employers!  It goes without saying that there is always a risk involved in holding company-sponsored events, especially if alcohol is served. Serving alcohol definitely compounds the problems typically encountered by employers during Company parties, particularly holiday parties.  Such problems involve everything from excessive drinking to inappropriate jokes to sexual advances to physical injuries and fatalities resulting from fighting and/or driving while intoxicated.  As a result, we recommend the following 7 quick tips to minimize legal liability as you prepare for your holiday parties:

1.  Do not serve alcohol; instead have a catered lunch or early dinner with non-alcoholic beverages at the office.

2.  If serving alcohol, consider serving only wine (and perhaps beers) as well as non-alcoholic alternatives with the meal. We highly recommend inviting spouses and significant others.

3. Hire professional bartenders and make sure you instruct them to report anyone who they think has had too much to drink. Ensure that bartenders are complying with the law. Your supervisors or managers should NEVER be used as bartenders during Company parties!!!

4. Provide accommodations (i.e. arrange for Company paid car service or even a hotel room) for any employee who feels that he/she is too intoxicated to drive home.  

5.  Managers should be instructed to monitor their subordinates to ensure they do not drink too much.

6. Do not hang or allow employees, particularly managers, to hang mistletoes at the party!

7. If the big guy, Santa, makes an appearance at the party, do not encourage employees to sit on his lap in jest or for pictures, particularly if a manager or corporate officer/director is Santa. Sorry Santa!


 May 2016

The DOL Has Released Final Rules On New Threshold For Exemption From Overtime

by Nancy Castor Sprattlin


The U.S. Department of Labor has finally released its final rules on the new requirements for exemption from overtime. The good news is that the new rules will not become effective until December 2016, so you and/or your corporate clients have time to prepare accordingly.  Currently, exempt employees such as qualified administrative employees, supervisors, and professionals making at least $23,660 a year or $455 a week are exempt from time and a half overtime pay for work done beyond 40 hours a week under the Fair Labor Standar ds Act.  The new rules will significantly raise the threshold pay to $47,476 a year /$913 a week.  Arguably, more employees will become eligible to receive overtime pay from their employers when the new rules become effective in December.  The DOL plans to update the earnings requirements for exemption every three years, making it likely that the threshold will be more than $51,000 a year by 2020 and that even more workers will join the non-exempt fold. 


You can access the White House's Press Release by clicking on this link

https://www.whitehouse.gov/the-press-office/2016/05/17/fact-sheet-growing-middle-class-paychecks-and-helping-working-families-0



 



February 2016

Student Athletes' Wage Suit Against NCAA and Universities Is Dismissed

A federal judge in Indiana dismissed the remaining claims of a lawsuit filed by student athletes, alleging that they were "employees" and therefore entitled to the minimum wage under the Fair Labor Standards Act.  The suit was initially filed in 2014 by Samantha Sackos, a soccer player for the University of Houston. Ms. Sackos alleged that she and other student athletes were "temporary employees" and therefore were entitled to minimum wage.  Ms. Sackos eventually dropped out of the case but was replaced by plaintiffs Lauren Anderson, Gillian Berger, and Taylor Hennig, all track and field athletes at the University of Pennsylvania.  Because all of the three plaintiffs were current or former Penn students, the other schools moved for dismissal, arguing that the plaintiffs had no standing to sue them. U.S. District Court Judge William T. Lawrence agreed, and dismissed the claims without prejudice.   Theoretically Plaintiffs can try again with amended claims, or by adding plaintiffs from other schools.  That may not be worth the trouble, though, because the judge also dismissed the claims against Penn on their merits.  Specifically, the judge found that Penn was not the employer of the plaintiffs. The claims against Penn were dismissed with prejudice.


Source: Courtesy of Client Bulletin #572 of Constangy, Brooks, Smith & Prophete, LLP

November 2015

Combating Gender Discrimination Is A Priority Issue For The EEOC

by Nancy Castor Sprattlin, Esq.


While Title VII of the Civil Rights Act of 1964 does not explicitly include gender identity in its list of protected bases, the Equal Employment  Opportunity Commission ("EEOC"), consistent with case law from the Supreme Court and other courts, has  interpreted the statute's sex discrimination provision as prohibiting discrimination against employees on the basis of gender identity.  Back in April 2012, the EEOC confirmed its intention to protect transgender employees under Title VII of the Civil Rights Act.  In fact, just recently the EEOC has made it clear that combating gender identity discrimination is a "priority issue"  by joining a lawsuit initiated by a transgender male (transitioning from female). In the lawsuit, the plaintiff employee claims he was required by his Employer to dress and act as a woman in the workplace so as not to confuse customers. The employee has sued for gender identity discrimination under Title VII.  Employers are required by law to reasonably accommodate transgender employees, including as to their dress and appearance, as well as bathroom usage, among other issues.








October 2015

Employers, Be Vigilant About FCRA Compliance

By Nancy Castor Sprattlin, Esq.


Chipotle was recently sued for violations of the Fair Credit Reporting Act ("FCRA").   The lawsuit seeks recovery under both FCRA and California law. This is one of a number of lawsuits that have been filed recently against employers, serving as a reminder that employers must be vigilant about FCRA compliance when conducting background checks on which employment decisions will be based.  The named plaintiff in the lawsuit against Chipotle alleges that Chipotle's FCRA disclosure is buried in its employment application and surrounded with distracting language. However, FCRA requires that such disclosures are made in a "standalone" document, i.e. consisting solely of the disclosure. The plaintiff also claims that Chipotle did not provide her the required summary of her rights under FCRA and failed to provide a box to check to indicate that she wanted a copy of the background check report.  So employers, make sure background checks are performed properly, the devil is in the technicalities!


Recent NLRB Decision Could Have Detrimental Impact  On Franchisor and Franchisee Arrangements

By Nancy Castor Sprattlin, Esq.


The recent Browning-Ferris Industries decision issued on August 27, 2015 by the National Labor Relations Board (NLRB) is a critically important decision because it has overturned an over three decades long "joint employer" standard. This case involves Browning-Ferris Industries (BFI)’s use of an outside staffing firm. The union sought to represent the workers employed by the staffing firm and argued that they should be deemed employees of BFI and thus able to be part of the union.


According to the old standard, a company utilizing the services of employees of another company would not be considered a joint-employer unless it had “direct control” over the employees’ working conditions, such as the direct ability to hire and fire employees.  Based on this new decision and standard, two or more employers are considered joint employers if they “share or codetermine those matters governing the essential terms and conditions of employment.”   It is somewhat unclear now what are considered the “essential terms and conditions of employment”.   As the Court’s decision states, the essential terms and conditions of employment certainly include, “hiring, firing, discipline, supervision, and direction,” but the NLRB states that it intends to be inclusive and that this list is “non-exhaustive.”  Hence, many employers, particularly within the franchise and outside staffing contexts, are very nervous by the NLRB’s so-called “non-exhaustive list”.   Indeed, if a company is deemed a joint employer, it could then be subject to collective bargaining and a large variety of employment-related claims formally reserved for the direct employer.


While this case doesn’t involve franchise arrangements, it is clear that the decision could have a detrimental impact on such arrangements in the franchise industry.  Franchisors may start withdrawing valuable support and resources fearing that these resources may be used as evidence of control.  On the one hand, franchisees are independent businesses and do not want the franchisor telling them who to fire or how to run their business on a day-to-day basis. On the other hand, franchisees generally expect resources from franchisors and enter into these franchise contracts to benefit from the brand name, experience and support. For a franchisor to maintain ownership and control of its trademark, it must protect the brand quality. If it loses this control, it can lose rights to its trademark. So trademark law and employment law appear to pull the franchise industry in opposite directions. Franchisors fear that certain support and controls create a risk that may make the franchisor a joint employer. T here are sure to be many cases in the future litigating this issue in many contexts including the franchise context.


References from Ross Eisenbrey's BLOG at http://www.epi.org/blog/nlrb-decision-in-browning-ferris-restores-employer-accountability-for-wages-and-working-conditions/ 




August 2015

Top 6 Strategies To Minimize The Risks of Workplace Violence

by Nancy Castor Sprattlin



Employers have legal and ethical obligations to promote a work environment free from threats and violence.  Some situations are beyond employers' control and are simply not preventable.  However many situations can be prevented by doing some or all of the following:

• Adopting a workplace violence policy and prevention program AND communicating the policy/program to your employees.
• Providing regular training in preventive measures for all new/current employees, supervisors, and managers.
• Fostering a climate of trust and respect among workers and between employees and management.
• Supporting, not punishing, victims of workplace harassment and providing assistance programs.
• When necessary, seeking the assistance of outside resources, including threat-assessment psychologists, psychiatrists and other mental health professionals.
• Doing pre-employment screening.  While pre-employment screening is an obvious means of preventing workplace violence, it must, however, be consistent with privacy protections and anti-discrimination laws. There are many other creative means that may be helpful! Please contact us today to discuss further.




July 2015

Top 5 Strategies To Minimize Risk of Wage Discrimination Claims Based On Gender

By Nancy Castor Sprattlin, Esq.

It’s rather easy for employers to create situations that seem to foster gender discrimination. To minimize the risk of discrimination claims based on gender, employers should conduct periodic audits of their compensation practices to determine if gender groups are treated differently, and if they are, to clarify that such disparities are based on legitimate non-gender-based factors and supported by objective documentation. We recommend the following five (5) strategies to employers to minimize the risk of wage discrimination claims based upon gender:

1. Have salary guidelines that are based on objective criteria such as education and skill level, going market rates, and performance level.

2. Have any merit, seniority, or productivity bonus, or commission programs in writing. The guidelines for the program should be clearly described.  Training on the mechanics and logistics of the program should be provided to all employees whose salaries will be affected by the program.

3. Make a concerted effort to recruit and hire qualified candidates of both genders in every job classification, particularly those classifications that are normally dominated by a particular gender group.

4. Define any subjective elements of performance ratings, such as “initiative,” and provide concrete examples of what the element means. Similarly, when documenting a rating, offer concrete examples of employee behavior.

5. Document the reasons for any non-performance-based deviations from normal salary structures (e.g., sign-on bonus, etc.) in the affected employee’s compensation file at the time the deviation takes place. Employers should make sure to also date such documents at that time as contemporaneous documentation will generally be accepted as legitimate. Documentation made after the fact carries less impact and may be seen as falsification.

From gender-based discrimination to misclassification of employees to overtime, managers and supervisors are often clueless about the legal ramifications of these wage/hour issues. The best way to minimize the resulting liability exposure for companies along with the expensive litigation associated with the defense of these claims is for employers to train, train, train!


January 2015

10-K Conundrum: How SEC Filings Breed Employment Claims

Article from Law360, New York (January 27, 2015)



10K Cunnnundrum -.pdf


 July  2014

4 Tips To Avoid Landing In Trade Secrets Hot Water

By Bill Donahue, Law360, New York (July 09, 2014, 7:09 PM ET) —

Companies are getting smarter about protecting their trade secrets alongside the rest of their intellectual property, but they also need to be equally wary about accidentally stealing somebody else’s. With high-profile criminal cases, dramatic overseas accusations and the talk of new federal legislation, companies are more aware than ever of the importance of locking down the kind of highly valuable secrets — customer lists, unpatented processes, source code — that drive their business. But that’s only half of the equation. Without proper precautions, a marquee lateral hire or a failed attempt at a joint venture can leave companies with a wholly different risk: a product tainted by a competitor’s trade secrets, negative press and costly litigation.   Though perhaps not as bad as losing your own secrets, no company wants to end up on the wrong end of a misappropriation suit.  “Over the last three to five years, trade secret protections have become a more important body of law, and companies are getting more focused on protection of their own information, but now we’re counseling that clients also get equally focused on making sure that their own products are not tainted,” said Mark A. Klapow, a partner at Crowell & Moring LLP.  “These big trade secrets cases that involve competitors and key products are very expensive to litigate,” Klaplow said. “Just as in a large patent case, there can be tens or even hundreds of millions of dollars at stake.” Good written policies and other standard measures are a must, but here are a few quick tips ...

View Full Article 



Tips To Avoid Trade Secrets Hot Water.pdf


June 2014

Employers, Beware of Older Workers’ Benefit Protection Act’s “Knowing and Voluntary” Requirements!

Employers need to be very mindful of the Older Workers’ Benefit Protection Act’s “knowing and voluntary” requirements in drafting severance agreements, particularly in connection with a reduction in force. Consider a federal court’s invalidation of the release of an age discrimination claim in a recent case (Foster v. Mountain Coal Company, LLC) in Colorado.

See Full Article below.



Release Invalidation Under OWBPA.pdf

 

April 2014

 The NLRB Is At It Again…Striking Down Hospital’s Anti-Gossip Policy

In a case involving Hills and Dales General Hospital in Michigan, the National Labor Relations Board (NLRB) struck down the hospital’s policy prohibiting employees from participating in or listening to gossip, concluding that such policy could prevent employees from discussing legitimate work issues. According to the NLRB’s order issued on April 1st, “[t]his is the standard remedy to assure that employees may engage in protected activity without fear of being subjected to an unlawful rule”. This case is just the latest in which the NLRB took employers to task for common provisions of employee handbooks. Thus, we urge employers to avoid overly broad provisions that could be reasonably construed to prohibit protected conduct.

March 2014
Courts of Appeals to Consider Legality of Paying Incentive Compensation to Fluctuating Workweek Employees

Courtesy of Robert W. Pritchard – March 11, 2014

In a pair of appeals that will have significant implications for employers that utilize the fluctuating workweek (FWW) method of calculating overtime compensation, the U.S. Courts of Appeals for the Second and Sixth Circuits are considering whether the payment of incentive compensation (in addition to fixed weekly salary) is incompatible with the FWW method. Nothing says “no good deed goes unpunished” quite like a claim that the payment of additional compensation invalidates an otherwise lawful compensation plan.



Incentive Compensation to Fluctuating Workweek Employees.pdf 270.2KB

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