Author: Gilbert McWherter Scott Bobbitt PLC

Categories
Uncategorized

Donald Sterling, the Tennessee Legislature, and Civil Rights Laws

This year, 2014, should be a celebration of civil rights law. Fifty years ago the Civil Rights Act of 1964 was passed. In my view, it was the most important piece of  legislation of the 20th century. In the streets of Birmingham and in the backwoods of Mississippi, people literally died in order to see equal protection extended to all persons. That was a half century ago. The year 2014 should be a glorious celebration of those accomplishments. Instead, recent events have highlighted how far we have to go.

Unless you have been hiding under a rock, you are aware of the statements that Los Angeles Clippers owner Donald Sterling made. I will not repeat them here. They don’t merit being repeated. Needless to say, they were despicable. They disparage African Americans, and all minorities, in a way that we do not tolerate in the United States. Unfortunately, such cognitive bias is not as rare as we would like to think. It is everywhere. United State Supreme Court Justice Anthony Kennedy once observed:

Prejudice, we are beginning to understand, rises not from malice or hostile animus alone. It may result as well from insensitivity caused by simple want of careful, rational reflection or from some instinctive mechanism to guard against people who appear to be different in some respects from ourselves.

At home in Tennessee, I wish I could report that we are doing better. Unfortunately, on the 50th anniversary of the 1964 Civil Rights Act, the Tennessee General Assembly took a step backwards. Instead of strengthening our civil rights laws, the Tennessee General Assembly recently passed a bill that significantly weakens civil rights protections in Tennessee. The legislation did away with certain remedies available to victims of civil rights abuses, and limited the amount of money they could receive in a draconian manner. For instance, under the current legislation, a victim of a rape in the work place could be limited to $25,000 in compensation in some instances.

In fifty years, we have made a lot of progress. Unfortunately, we still have a long way to go.

Categories
News

Partner Sponsors Heaven’s Cradle Charity Event

Heaven’s Cradle, a fund of the West Tennessee Healthcare Foundation, will host the 2nd annual Twilight Run and Rooftop Rendezvous on Thursday, May 29, 2014. The event includes an evening 5K race, 1 mile Run/Walk and a rooftop rendezvous with live music and dinner by Coyote Blues.

Early registration is $30. Runners must register by May 23 to be guaranteed a t-shirt. Late registration (May 23 or later) is $35. Rendezvous dinner tickets are $10 and open to anyone, not just runners. The run will be held at Parking Garage #3 (700 West Forest Ave.) on the campus of Jackson-Madison County General Hospital with dinner atop the garage. Music, dinner and pre-registration begins at 5:00 p.m. with the run starting at 6:30 p.m.

Gilbert McWherter Scott Bobbitt PLC Managing Partner Clint Scott and his wife Ashby Scott, attorney for Evans | Petree PC, are sponsors of this years’ Heaven’s Cradle Twilight Run and Rooftop Rendezvous.

Heaven’s Cradle was established in 2011 by Gary and Abby Lackey in memory of their son, Davis Arnold Lackey, who was stillborn. The group is working to remove the silence surrounding infant loss and to ease the suffering of grieving parents and grandparents. Funds raised this year will provide “Grace Bags” for all families delivering in Jackson, an addition to the Serenity Garden at Jackson-Madison County General Hospital, start up for Remembering Photography, and facilitated special training for clinical staff working with bereaved families.

The 2014 Twilight Run & Rooftop Rendezvous is presented by: West Tennessee Healthcare, Arrington Funeral Directors & Crematory, FirstBank, Woman’s Clinic, Jackson Regional Women’s Center, Mid-South Perinatal Associates, Jackson Clinic OB/GYN Department, ING/Steve & Brad Little, Clint & Ashby Scott, and Browning & Graves.

Online registration is available at www.twilightrun.eventbrite.com.

Categories
Retaliation Whistleblower Law

Expanded Whistleblower Protections: Sarbanes-Oxley extends to employees of privately held companies

On March 4th, the United States Supreme Court handed down the decision of Lawson, et al.  v. FMR LLC, et al., 2014 U.S. LEXIS 1783 (March 4, 2014). Lawson addressed a situation where employees of a privately held company that contracted with a publically held firm claimed to be “whistleblowers” under the protection of the Sarbanes-Oxley anti-retaliation law.

The majority in Lawson constituted a rather motely crew. Justice Ginsburg, a reliable liberal on the bench, delivered the majority opinion. To no surprise, she was joined by Justice Breyer and Kagan. As a bit of a surprise, she was also joined by Chief Justice Roberts and Justice Scalia. Justice Thomas dissented. He was joined by Kennedy and Alito. Justice Sotomayor also filed a dissenting opinion.

The case involved a Plaintiff who alleged “that he was fired in retaliation for raising concerns about inaccuracies in a draft SEC registration statement concerning certain Fidelity funds.” Fidelity is a publically held company. However, it is a publically held company that has absolutely no employees. Zero. The Plaintiffs were essentially part of a management company, which is not publically held, that provides services to Fidelity. According to the Supreme Court, the issue was whether Sarbanes-Oxley:

shield[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][s] only those employed by the public company itself, or does it shield as well employees of privately held contractors and subcontractors – for example, investment advisors, law firms, accounting enterprises – who perform work for the public company?

The Supreme Court, citing both statutory interpretation and “common sense,” held:

We hold, based on the text of [the statute] the mischief to which Congress was responding, and earlier legislation Congress drew upon, that the provision shelters employees of private contractors and subcontractors, just as it shelters employees of the public companies served by the private contractors and subcontractors.

This makes a whole heck of a lot of sense. A company should not be able to shield itself from whistleblower protection by simply refusing to employ anybody. In other words, it shouldn’t be able to outsource all of their management to a privately held company to avoid Sarbanes-Oxley liability. Moreover, it provides a deterrent to the exact type of illegality that Sarbanes-Oxley attempted to address. Now, lawyers, accountants, consultants, and other contractors who were aware of fraud at a publically held client, can do what they should do. They can blow the whistle on this activity and be assured that the whistleblower protections of Sarbanes-Oxley will protect them in the event they are a victim of retaliation.

[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]

Categories
FLSA Overtime/Wage & Hour

Increase in Salary Basis for Overtime

The Fair Labor Standards Act requires that most employees be paid 1 ½ times their regular rate of pay when they work over 40 hours in a work week. There are a number of exceptions to this, including the so called “White Collar Exemptions.” The White Collar Exemptions say that certain employees may be paid a set salary instead of 1 ½ times their regular rate of pay for overtime. Those regulations are complex and the subject of significant litigation.

One of the requirements for the White Collar Exemptions is that the employees must be paid at least $455 per week. This is a very modest threshold. It is less than $24,000 per year. It seems unfair that a convenience store manager could be paid $24,000 a year for 60-80 hours of work. However, this is often the case. The United States Department of Labor is taking a new look at this threshold.

The Fair Labor Standards Act gives the Department of Labor “rule making” authority to set standards in implementing the overtime provisions of the Fair Labor Standards Act. In other words, the Department of Labor can raise the minimum salary that exempt employees receive without having to go to Congress. The DOL is beginning this process. This is part of President Obama’s initiative to close the income inequality gap in the United States. The Obama administration believes that raising the minimum salary for exempt employees would put more money in consumers’ hands and help grow the economy.

It is also just the right thing to do. The idea that an employer could legally work an employee 60-80 hours per week and pay them less than $24,000 per year is morally troubling.

The following is a link to a March 13, 2014 Wall Street Journal article about these important changes:

http://online.wsj.com/news/articles/SB10001424052702304704504579434183690961244?KEYWORDS=Fair+Labor+Standards+Act&mg=reno64wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304704504579434183690961244.html%3FKEYWORDS%3DFair%2BLabor%2BStandards%2Bct

Categories
FLSA Overtime/Wage & Hour Sex Discrimination

Lilly Ledbetter’s Thoughts on the Paycheck Fairness Act

Lilly Ledbetter’s name was thrust into the public spotlight when the United States Supreme Court decided to hear her case.  To the amazement of many, she lost.  The Supreme Court held that an employer can effectively “run out the clock” on an Equal Pay Act violation.  Ms. Ledbetter was making less money than her male co-workers.  She didn’t know it.  By the time she found out, the Supreme Court said it was too late to sue.

 This led Congress to pass legislation to change the law.  The act, appropriately named the Lilly Ledbetter Act, was the first bill signed into law by President Obama.

More potential reforms are on the horizon.  The Paycheck Fairness Act would be an amendment to the Equal Pay Act and the Fair Labor Standards Act.  The law would give more teeth to the Equal Pay Act.  More about that in a later blog.  The law would also permit employees to share wage information.  This would allow them to be informed about the pay their co-workers receive.  In turn, this would make it easier to for a victim of discrimination to learn that they she was not being paid legally.

In a recent Washington Post op-ed, Ms. Ledbetter shared her thoughts on the Paycheck Fairness Act.  It’s worth a read.  Here’s the link.

http://www.washingtonpost.com/opinions/lilly-ledbetter-says-the-president-can-do-more-for-equal-pay-sign-an-executive-order/2014/01/17/3eae5e62-7e0d-11e3-93c1-0e888170b723_story.html?hpid=z3

Categories
FLSA Overtime/Wage & Hour

UNPAID INTERNSHIPS AND THE FAIR LABOR STANDARDS ACT

It is a tough market for new graduates.  While the job market may not be as tough as it was a couple of years ago, it certainly has not recovered.  My law firm receives resumes from job seekers every week.  Some of those resumes are from students who just want to get their foot in the door. They offer to do unpaid internships. They say they just want experience.  This seems to make sense.  The problem is that this is a ripe area for employer abuse.  Over and over again, we hear stories of students who thought they were getting unpaid internships where they gain valuable work experience.  Instead, they are subjected to long hours, no training, and little experience that would actually benefit them in a future career.

The Fair Labor Standards Act (FLSA) addresses this problem.  Under the FLSA, an intern must be paid a minimum wage and overtime if they are a “covered employee.”  To determine whether an intern is a covered employee, the regulations issued by the Department of Labor look at the following factors:

–          The extent to which the internship provides training similar to the training that would be given in an educational environment;

–          The degree to which the internship experience benefits the intern rather than the employee;

–          Whether the intern displaces regular employees;

–          Whether the intern is closely supervised by existing staff;

–          Whether the company derives immediate advantages from the intern’s activities;

–          Whether the intern is entitled to a job at the conclusion of the internship; and

–          Whether the employer and the intern have reached an agreement that the intern is not entitled to wages for his/her work.

This is a multi-factor test, and no one factor is conclusive.  It is safe to say, however, it is rare that an intern would not be a “covered employee,” and thus entitled  to pay. Students who are working “unpaid” internships would be well-advised to consult with a lawyer to see if they are the victims of wage theft.

Categories
News

Firm Recieves Small Business Excellence Honor

awardGilbert Russell McWherter PLC has been selected for the 2013 United States Excellence Award amongst all its peers and competitors by the Small Business Institute for Excellence in Commerce (SBIEC).

Each year the SBIEC conducts business surveys and industry research to identify companies that have achieved demonstrable success in their local business environment and industry category. They are recognized as having enhanced the commitment and contribution of small businesses through service to their customers and community. Small businesses of this caliber enhance the consumer driven stature that United States is renowned for.

Gilbert Russell McWherter PLC has consistently demonstrated a high regard for upholding business ethics and company values. This recognition by SBIEC marks a significant achievement as an emerging leader within various competitors and is setting benchmarks that the industry should follow.

Read the full press release at SBIEC.org

Categories
FLSA

New Rules for Home Healthcare Workers

As expected, the Department of Labor has issued new rules for home healthcare workers. They provide some long overdue and much needed protection to employees who work in homes of the elderly.  Historically, domestic workers who provide “companionship services” have not been protected by the minimum wage and overtime provisions by the Fair Labor Standards Act. This is due to a number o f historic factors, not the least of which is the refusal of Congress in decades past to pay living wages to employees who largely are minorities.

The Department of Labor has extended the protection of these employees. The most significant change is that the so called “companionship exemption” can only be claimed by individuals. In other words, multi-billion dollar companies who contract to provide in home healthcare can no longer get away with refusing to pay minimum wage and overtime to their employees.

Second, the tasks that are considered “companionship” have become significantly limited. “Companionship” is now defined as providing fellowship and protection for an elderly person or a person with a illness, injury or disability who requires assistance in caring for himself or herself. For example, companionship services include conversation, reading, games, crafts, accompanying personal walk, etc. “Companionship services” can also include the provision of “care” if the care is provided in conjunction with fellowship and protection and does not exceed more than 20% of the total work week. “Care” includes assistance with daily activities, such as dressing, grooming, feeding, bathing, toileting, and transferring. In other words, if a person spends more than 20% of his time actively assisting the person with their daily activities, then they cannot be exempt. Further, performance of household work that primarily benefits other members of the household or the performance of medically related tasks result in the loss of an exemption. Therefore, a housekeeper would not qualify for the companionship exemption.

Finally, the record keeping requirements are expanded so that employers must keep accurate time records for live in domestic service employees.

To give employers an opportunity to come into compliance, the new rules do not take affect until January 1, 2015. Nevertheless, these are important rules that will primarily prevent large corporations from taking advantage of an exemption that was intended to benefit the elderly who were paying “companions” out of their own pocket.

Categories
News

McWherter & Scott Obtain Verdict of Over $2 Million

McWherter and Scott obtain jury verdict in excess of $2 million dollars after two week jury trial in United States District Court for the Eastern District of Tennessee.

Categories
News

Gilbert Russell McWherter Among Best Law Firms

Gilbert Russell McWherter was recently named in the 2014 Best Law Firms listing, for the area of Insurance Law.

Firms included in the 2014 “Best Law Firms” list are recognized for professional excellence with persistently impressive ratings from clients and peers. Achieving a tiered ranking signals a unique combination of quality law practice and breadth of legal expertise.

The 2014 rankings are based on the highest number of participating firms and highest number of client ballots on record. To be eligible for a ranking, a firm must have a lawyer listed in The Best Lawyers in America ©, which recognizes the top 4 percent of practicing attorneys in the US. Over 12,000 attorneys provided over 330,000 law firm assessments, and almost 7,000 clients provided close to 20,000 evaluations. In addition, to provide personal insight, a new Law Firm Leaders Survey was implemented in the decision-making process.

Gilbert Russell McWherter practice Insurance and Employee Rights law in the state of Tennessee, and have offices in Jackson, Nashville, Chattanooga and Memphis.