Category: Overtime/Wage & Hour

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FLSA Overtime/Wage & Hour

SNL NOT LAUGHING: NBC UNIVERSAL PAYS $6.4 MILLION TO SETTLE WAGE AND HOUR CLAIM BY INTERNS

There are more tears than laughs at Saturday Night Live these days. NBC Universal paid $6.4 million to settle a claim by interns who worked on a variety of shows, including SNL. This follows a $110,000 settlement from the producers of the Charlie Rose Show, which also compensated interns for the work they performed.

 In the current job market for college students and new graduates, employers often use the economy as an opportunity to get free work. The Fair Labor Standards Act (FLSA) is clear that most unpaid internships are flat out illegal. If an employer gets the benefit of work from an employee, then the employee probably has to be paid.

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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

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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

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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.

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FLSA Overtime/Wage & Hour

D.R. Horton and Class Action Waivers

                As noted on an earlier post, the United States Supreme Court has held that arbitration agreements that contain class action waivers are generally enforceable. This was the holding in a case called Concepcion. That case specifically held that such agreements were enforceable under the Federal Arbitration Act.

                Subsequent to Concepcion, the National Labor Relation Board handed down a decision in a case called D.R. Horton. This decision held that such waivers in FLSA collective actions were not enforceable because they violated the National Labor Relation Act prohibition against agreements that banned “concerted activity.”

                D.R. Hornton was an exciting moment for employee rights advocates. It was a glimmer of hope in an otherwise sea of bad news. D.R. Hornton was appealed to the Fifth Circuit. This was an important strategic decision that the employer made. The employer could have either appealed the decision to the Fifth Circuit or the D.C. Circuit. Because the Fifth Circuit has jurisdiction over the case but not the agency, any decision of the Fifth Circuit would be binding in that Circuit but not on the NLRB.

                Oral arguments in D.R. Hornton were held on February 5, 2013. Subsequent to the Board’s ruling, however, courts have not been receptive to D.R. Hornton. In fact, 27 courts have rejected D.R. Hornton, while only two have followed it. Interestingly, the two that have followed it have been a couple of the more recent decisions. One was out of the Eastern District of Missouri.

                That sets up a situation where the agency with jurisdiction over labor agreements has said that agreements are not enforceable, while courts around the country have said that they are. If that did not create enough confusion, the D.C. Circuit handed down a case called Noel Canning v. NLRB. In this case, the D.C. Circuit held that the President’s recess appointments to the NLRB were not valid because Congress was not in recess. As if this was not confusing enough, three circuits have rejected the Noel Canning case. Moreover, because of when the D.R. Hornton decision came out, there is some question about whether Canning applies to D.R. Hornton. Some read the Canning decision to only apply to appointments within a limited time period. Others read the Canning decision to go back to prior appointments, which would capture the D.R. Hornton decision.

                What does all this mean? I have no earthly idea. Fortunately, I do not wear a black robe. Unfortunately for myself and my clients, the law is in a great state of confusion in this area. Stay tuned.

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FLSA Overtime/Wage & Hour

Tennessee Dish Network Installers Receive Conditional Certification

The Western District of Tennessee has conditionally certified Hollis & Eberline v. Dump Cable Inc. & Raghid Baker Ardahji as a collective action under the Fair Labor Standards Act.  In this case, satellite installers and technicians who are/were employed by Dump Cable, Inc. and misclassified as “independent contractors” are seeking unpaid overtime wages.

With the court’s approval, notice will be sent to all current and former installers who meet the class definition, giving the installers a right to join the case.  

What do I do if I receive a notice?

If you receive a notice and are interested in joining the case to recoup lost overtime wages, complete the consent form and return it to our office as quickly as possible.  If you have any questions or concerns, please do not hesitate to contact our office.

Contact

If you would like additional information please call:

(731) 664-1340 or 1-888-354-3476

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FLSA Overtime/Wage & Hour

Arbitration Agreements and the “Effective Vindication of Rights” Argument

                 In 2011, the U.S. Supreme Court handed down the consumer case of AT&T Mobility, LLC v. Concepcion, 131 S.Ct. 1740 (2011). Generally speaking, Concepcion held that arbitration agreements which banned class actions are enforceable.

                After Concepcion, advocates argued that there was at least one exception to Concepcion. Importantly, Concepcion did not overrule a 1985 United State Supreme Court case called Mitsubishi Motor Corp. v. Soler Chrysler-Plymouth. That line of case effectively held that agreements which prevent plaintiffs from vindicating their rights are not enforceable.

                Therefore, some advocates argued that any arbitration agreement containing a class action waiver that was drafted in a way that it effectively prevented plaintiffs from vindicating their statutory rights were unenforceable. That was the only way, they argued, to reconcile Concepcion and Mitsubishi Motor Corp.

                In 2012, the Second Circuit handed down In Re American Express Merchants Litigation, 667 F.3d 204 (2d Cir. 2012). In this case, the Second Circuit found that the plaintiffs had proved they would be unable to effectively vindicate their rights under the Sherman Act, and thus the agreement at issue was unenforceable.

                The United States Supreme Court granted certiorari on the American Express case and recently heard oral arguments. Stay tuned.

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FLSA Overtime/Wage & Hour

Donning and Doffing: What are “Clothes”?

                  What does it mean to change clothes? This was the issue in Sandifer v. United States Steal Corp., 678 F.3d 590 (7th Cir. 2012). In Sandifer, Judge Posner found that protective gear was “clothes” within the §3(o) exemption of the FLSA.

                  As you may know the §3(o) exemption excludes changing clothes from compensable time when it is part of the “express terms of or by custom or practice under a bonafide collective bargaining agreement applicable to the particular employer.” In Sandifer, the plaintiffs argued that steal workers were not changing clothes but were changing “safety equipment.” Judge Posner disagreed.

                  That was not, however, the final word. The United States Supreme Court granted certiorari on the issue. Alas, we will get to find out what the Roberts court considers to be “clothes.”

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FLSA Overtime/Wage & Hour

Home Healthcare Workers: New Regulations are on the Way

                 Home healthcare workers work long hours for low pay. They are among the lowest paid employees in our workforce. Unfortunately, they are often exempt from both the minimum wage and overtime requirements of the FLSA. The reason is an accident of history. Thankfully, help may be on the way.

                It is important to note that home healthcare workers are not underpaid because the industry is broke. In 2009, the home healthcare industry had $24 billion in profit. That’s not revenue; that’s profit. They are among the five fastest growing industries in the country.

                Originally, the home healthcare workers’ exemption – known as the companionship exemption – was created for “companions.” In other words, Congress did not want grandma to have a heart attack while she was alone at home. Therefore, Congress thought it would be a good idea to encourage grandma to pay somebody to sit on the couch and watch General Hospital with her. These were companions. However, when Congress passed the exemption, they gave the Department of Labor authority to interpret “companion.”

                The Department of Labor expanded the definition to include workers to perform certain domestic services. The United States Supreme Court reviewed this interpretation and hinted it was a little quirky, but still deferred to the Department of Labor.

                At last, the Department of Labor has now proposed new regulations. While the final version is not out, the drafts did three important things: (1) they said that general household work was not included in companionship; (2) they excluded providing medical care as companionship; (3) they created a rule that no more than 20% of companions’ time can be used performing non-companionship services; and (4) they specifically provide that employees of third party home health agencies are not exempt.

                The fourth provision is especially important. For-profit companies who make a great deal of money providing “companionship services” frequently rely on the FLSA exemptions. They rake in tons of revenue while paying employees a pittance.

                The notice and comment period of the new regulations closed in 2012. We are just waiting to see if the Department of Labor will adopt them. We hope they will come out in April or May of 2013. In the interim, there is at least a bit of hope on the horizon for “companions” of the elderly.

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FLSA Overtime/Wage & Hour

Private Settlements of FLSA Claims

It has always been black letter law that any settlement of an FLSA claim must be approved either by a court or by the Department of Labor. In my experience, many defendants elect to “take their chances” with a private settlement that involves a single plaintiff. As a plaintiff’s attorney, I have generally thought that is a risk the defendant can take if they so choose. If an employer wants to pay my client money without getting a valid release, what do I care? However, I have always operated off the assumption that such settlements were not operable if they were challenged.

The Fifth Circuit seems to cast doubt on my assumptions. I suppose we have to take the Fifth Circuit with a “grain of salt.” It seems to be the place where employers always run when they want to make bad law for employees. Thankfully, the rest of the country often just scratches their head and ignores them.

Bad facts make bad law. Perhaps bad movies also make bad law. In a case called Martin v. Spring Break ‘83 Productions, LLC, the Fifth Circuit recently found that a private settlement in a wage and hour case was binding even though it had not been approved by the court. Martin was an unusual situation. A group of lighting and rigging technicians on the set of a movie filmed in Louisiana filed a grievance with their union. They complained that they were not paid for all of the time they worked. The union entered into a settlement agreement, which was never signed by the plaintiffs, in which they were paid for the disputed hours. The plaintiffs also filed a lawsuit. The Fifth Circuit decided that the settlement by the union was binding because the plaintiffs “personally received and accepted compensation for the disputed hours.” Martin, 688 F.3d at 257.

A couple of courts outside the Fifth Circuit have already objected the reasoning of Martin. See e.g. Dietz v. Budget Innovations and Roofing, Inc., No. 4:12-cv-0718 (M.D.Pa. Dec. 13, 2013). However, Martin may give employers a bit of comfort if they decide to settle small wage and hours cases and forgo court or Department of Labor approval.