Monday, October 16, 2017

3d Cir: Pay Employees for Breaks Under 20 Minutes

Ah, the miracle of computers. If employees work on computers, employers can track whether they are working right down to the exact minute. That's what the employer did in Sec. U.S. Dept. of Labor v. American Future Sys., Inc. If employees were logged off for more than 90 seconds, they did not get paid for that time.

This runs counter to the Department of Labor's regulations regarding short breaks:
Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They must be counted as hours worked. Compensable time of rest periods may not be offset against other working time such as compensable waiting time or on-call time.
Not official use.
29 C.F.R. § 785.18. Ultimately, the Third Circuit (jurisdiction including Pennsylvania) adopted this bright line rule, holding that "the Fair Labor Standards Act does require employers to compensate employees for all rest breaks of twenty minutes or
less."

This is a bright line rule that prevents absurdities like forcing employees off the clock for two-minute bathroom breaks. However, as the employer (and some amici) argued, it also limits the flexibility of the employees. One child advocacy group even argued that it harms children because it will prevent parents who work from home from taking short breaks to "address child-related needs."

Before: These employees could take breaks whenever they wanted for whatever reason they wanted, so long as they logged off. That's good on flexibility, but they don't get paid for short breaks, which harms their bottom line.

After: We don't know for certain yet. I have counseled employers that the FLSA requires them to pay for breaks under 20 minutes for years (based on the regulation). The usual result is that they adopt a policy that employees only get one or two paid breaks (sometimes one in the morning and one in the afternoon) of 15 minutes. That's not very flexible - but, without such a policy employers run the risk of employees taking any number of paid 20 minute breaks throughout the day. That's simply not a viable business practice.

* None of this applies to bona fide meal breaks of 30 minutes or more, which are generally unpaid.

Thursday, October 12, 2017

About that Barstool Sports contract, and contracting around the right to be offended

Twitter highlighted a "Moment" featuring contractual language allegedly used by Barstool Sports:
Predictable Twitter outrage ensued.

What's the point of this clause? I presume that it relates to harassment claims. Harassment is a form of discrimination, and it is prohibited by the workplace anti-discrimination statutes (most notably, Title VII at the federal level). One component of a harassment claim is that the harassment must be objectively offensive to a reasonable person and subjectively offensive to the actual victim.

Logo used in commentary on Barstool Sports,
not authorized use.
A hypothetical: If you show up to work every day and there are people engaged in sexual intercourse right in front of you . . . that's probably a hostile work environment. However, if you work for a porn company, that's pretty much part of the gig (assuming you work in production). That does *not* mean it's impossible to sue for sexual harassment at a porn company though. For example, if an accountant is pressured to sleep with the head of accounting at a porn company - that's still unlawful harassment.

What does the Barstool contract do?

1. It puts potential employees on notice that the creative process (and their end product) includes potentially offensive jokes and speech, and maybe even nudity and "sexual scenarios." I have only a passing familiarity with Barstool . . . it is *not* a porn company, but it does include material that may be offensive. The contract will presumably weed out people who are offended.

2. If an employee tries to file a harassment lawsuit claiming that (s)he was subjectively offended (one of the elements of a harassment claim) by offensive jokes, that employee will be confronted with the contract. It would probably weaken their claim.

What does the Barstool contract not do?

Employees cannot preemptively sign away their rights to sue for harassment or file a charge with the EEOC. If that's what Barstool is trying to do, it will not work. The employees can still pursue harassment claims. I doubt the contract would have any effect on a quid pro quo claim, or a hostile work environment claim premised on harassment personally directed at the employee (there's a not-so-fine line between offensive jokes and commentary for publication, and directed discriminatory harassment).

* This analysis assumes the person signing the contract is an employee and not an independent contractor.

Thursday, October 5, 2017

Lawffice Links - FAA v. NLRA

The Supreme Court is back! On Monday they heard oral arguments in Epic Systems Corp. v. Lewis, or as I call it, FAA v. NLRA. The issue is:

Whether an agreement that requires an employer and an employee to resolve employment-related disputes through individual arbitration, and waive class and collective proceedings, is enforceable under the Federal Arbitration Act, notwithstanding the provisions of the National Labor Relations Act.

Here are some fresh-baked Lawffice Links on the topic:
My prediction: Closely divided court, with a slight edge for the FAA. 

Friday, September 29, 2017

The other employment law SCOTUS cert. grant . . .

Of course, the big news yesterday was that SCOTUS is going to take another look at Abood (constitutionality of compulsory union dues for public employees). However, the Supreme Court also granted certiorari in Encino Motorcars, LLC v. Navarro to address:
Whether service advisors at car dealerships are exempt under 29 U.S.C. § 213(b)(10)(A) from the Fair Labor Standards Act's overtime-pay requirements.
The FLSA is chock-full of exemptions, including one for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” 29 U.S.C. §213(b)(10)(A). That's a pretty narrow exemption so this case will likely be irrelevant to most employers, but incredibly important to car dealerships.

Thursday, September 28, 2017

Abood back on the SCOTUS chopping block

SCOTUS was expected to finally pull the trigger and overrule Abood v. Detroit Bd. of Ed. last year in Friedrichs v. California Teachers Ass'n. The setup:
Abood recognized that compulsory public union dues could violate the First Amendment for certain ideological or political speech... but allowed the compulsory fees for collective bargaining. I'll broadly generalize the argument in Friedrichs as: Any time a public union is negotiating with the state, it is engaging in political speech; and forcing people to pay fees to support that activity violates their First Amendment rights. In other words, the carve-out for collective bargaining in Abood should be ruled unconstitutional.
Everyone expected Abood to fall last year . . . but, then, Justice Scalia died. The end result was an even split on an 8-member Supreme Court, which meant that Abood lived to see another day.

It certainly looks like its days are numbered though. This morning, the Supreme Court granted certiorari in Janus v. AFSCME, addressing the issue:
Whether Abood v. Detroit Board of Education should be overruled and public-sector “agency shop” arrangements invalidated under the First Amendment.
It will presumably all come down to Justice Gorsuch. If I were a betting man, I'd start playing taps about now. 

Wednesday, September 27, 2017

Lawffice Links - Title IX Developments

I mostly focus on employment law on this blog, but my practice includes a lot of college and university law too. The law is constantly changing with regard to Title IX obligations to respond to allegations of sexual misconduct. Here are a few Lawffice Links on recent developments:
Stay tuned because, per the Department's statement, "In the coming months, the Department intends to engage in rulemaking on Title IX responsibilities arising from complaints of sexual misconduct. The Department will solicit comments from stakeholders and the public during the rulemaking process, a legal procedure the prior administration ignored." (ouch, not saying the prior administration doesn't deserve the criticism, but that was a little harsh). 

* NACUA is the National Association of College and University Attorneys. 

Tuesday, September 26, 2017

3d Circuit on "willful" FLSA violations

Wage and hour claims under the Fair Labor Standards Act (FLSA) generally have a two year statute of limitations - but, that gets bumped to three years for a "willful" violation. Obviously, the issue of whether a violation is "willful" is huge.

In Souryavong v. Lackawanna County, the Third Circuit issued a precedential opinion addressing the issue. The short version of the facts: Several employees worked in two distinct part-time capacities but the employer failed to aggregate their time to pay overtime when they worked more than a combined 40 hours in a workweek (doh!). They dub this the "two-job problem."

The employer found out about the problem in early 2011, but some violations continued into 2012 (notably the violations did not involve the actual plaintiffs in the case). 
The Supreme Court defines “willfulness” to include situations when the employer, at the time of its FLSA violation, either “knew” its conduct was prohibited by the FLSA or “showed reckless disregard for the matter.” McLaughlin v. Richland Shoe Co., 486 U.S. 128, 133 (1988). Acting only “unreasonably” is insufficient—some degree of actual awareness is necessary.
The employer was generally aware of its FLSA obligations, but not specifically aware of the two-job problem. The Court held that a willful violation requires specific awareness of the actual violation, or "manipulation and concealment," or "ill will." Mere negligence is not enough. Simply being aware of the FLSA generally, and taking some time to correct the problem for non-party employees after the employer was made aware of the problem is not a willful violation.

The Court affirmed the trial court decision granting judgment as a matter of law, holding that there was no willful violation.