Tuesday, June 19, 2018

PennDOT Employee's Facebook Rant Receives Constitutional Protection

The Commonwealth Court of Pennsylvania issued an opinion applying the First Amendment to a Facebook rant in Carr v. Commw. Dept. of Trans.

A PennDOT road worker posted this to a Facebook group:
Rant: can we acknowledge the horrible school bus drivers? I’m in PA almost on the NY boarder [sic] bear [sic] Erie and they are hella scary. Daily I get ran off the berm of our completely wide enough road and today one asked me to t-bone it. I end this rant saying I don’t give a flying shit about those babies and I will gladly smash into a school bus.
She followed up with some sassy replies in the comments. She got fired.

Public employees enjoy some First Amendment free speech protections generally not afforded to private employees. For speech to receive protection, the Court will inquire whether:
  • The employee spoke as a citizen on a matter of public concern; and
  • Whether the relevant government entity had an adequate justification for treating the employee differently from any other member of the general public (including whether the speech has some potential to affect the entity’s operations).
(See opinion for citations and quotations).

The Court held that her rant did touch on a matter of public concern: "Carr’s speech touched on the safety of schoolchildren and the traveling public." On the second issue, the Court applied the first four of the seven "Sacks factors":
1. Whether, because of the speech, the government agency is prevented from efficiently carrying out its responsibilities;  
2. Whether the speech impairs the employee’s ability to carry out his own responsibilities;  
3. Whether the speech interferes with essential and close working relationships;  
4. The manner, time and place in which the speech occurs[;] . . . .  
5. Whether the speaker was in a position in which the need for confidentiality was so great as to justify dismissal for even completely accurate public statements[;] 
6. Whether narrowly drawn grievance procedures required submission of complaints about the operation of the agency to superiors for action prior to taking complaints to the public[; and]  
7. Whether a statement that was knowingly or recklessly false, if it were neither shown nor could reasonably be presumed to have harmful effects, would still be protected by the First Amendment.
I'll spare you the blow-by-blow, but the Court concluded: "the Department’s generalized interest in the safety of the traveling public does not outweigh Carr’s specific interest in commenting on the safety of a particular bus driver." Ultimately, the employee was reinstated.

Even public employees should not read this as some kind of blanket protection for Facebook rants. This decision addressed the exception rather than the rule.

HT: Court: PennDOT Employee Who Wrote on Facebook That She'd 'Gladly Smash Into a School Bus' Must Be Reinstated via The Legal Intelligencer.

Wednesday, June 6, 2018

Quoted in HR Dive on Arbitration (Plus Additional Commentary)

Important information from the Lawffice Space Department of Important Information: HR Dive quoted me extensively in Lisa Burden's article, Employers Shouldn't Rush to Adopt Arbitration Agreements in Light of 'Epic,' Experts Say. It's a good article with some nice insight from others as well.The article relates to the Supreme Court's recent ruling in Epic Systems (see, Supreme Court Okays Class Action Waivers in Arbitration Agreements). 

For those of you  who just can't get enough, here are my full comments:

On when employers should use arbitration

Not everyone likes arbitration. I happen to like it. Generally (though not always), arbitration will be faster and cheaper. Employers can also agree to confidentiality, and select a convenient geographic location. The big development in this case is that arbitration agreements can also mandate one-on-one arbitration, effectively precluding class or collective actions. Class actions, like state wage and hour laws for example, are generally “opt out” – meaning that employers can be on the hook for people who have never (and otherwise never would have) filed a claim. Even FLSA collective actions (which are “opt in”) may draw in employees who would not ordinarily file their own claims, but would opt in to a collective action. One-on-one arbitration agreements are a way to prevent any liability for those employees.

There are some downsides to arbitration. For example, there are very limited appeal options (great if you win, not-so-great if you lose). Also, employers may face serial claims that would be better handled in one consolidated class or collective case. Every time I say arbitration is faster and cheaper, somebody tells me I’m crazy – sometimes it is, sometimes it isn’t (I still think *on average* it’s faster and cheaper). You face the prospect of fractured rulings – you may win one case, but then lose the next one even though the facts (other than the identity of the employee) are exactly the same.

Others have pointed out that employers may face backlash from forcing employees into secret one-on-one arbitrations. For example, the #MeToo movement has been very critical of serial harassers essentially evading detection because their cases were repeatedly resolved in confidential proceedings, or with confidential settlement agreements.

Employers have many options though. They can require one-on-one arbitration, or allow collective actions. They can use jury trial waivers to avoid jury trials, but still litigate in court. Ultimately, employers should consult with their attorneys regarding their options. In my humble opinion, employers will generally be better off with arbitration agreements – especially if they can avoid class or collective actions.

On whether the Epic Systems ruling extends beyond the NLRA

Yes. The parties challenging the arbitration agreements focused on the NLRA (in Epic Systems). Their theory of the case was that the NLRA protects employees’ rights to engage in “concerted activities,” which they argued includes the right to bring class and collective actions – including class and collective actions under other statutes. In fact, Epic Systems itself was originally filed as an FLSA claim for unpaid overtime. Epic Systems sought to compel arbitration, but the District Court held that the waiver of class and collective actions in the arbitration agreements was unenforceable because it violated the NLRA right of employees to engage in concerted activities. In fact, Epic Systems is actually three cases consolidated by the Supreme Court. All three cases arose from FLSA wage and hour (overtime) collective actions (although NLRB v. Murphy Oil was separately filed as an unfair labor practice charge with the NLRB). Also, at least one of the cases (Ernst & Young LLP v. Morris) included a class action claim for overtime under California state law.

So, yes, this ruling is broad and will impact other labor and employment law cases outside of the NLRA. The heart of the holding is that employers and employees can enter into arbitration agreements that require individual (i.e. one-on-one) arbitration to resolve employment disputes. If an employee who signed such an agreement files a class or collective action claim in court, the employer can compel one-on-one arbitration instead. This result is driven by the FAA (Federal Arbitration Act), and is not specific to any one labor and employment law.

On whether Congress will do anything about it

This decision came with a fair amount of controversy. However, most of the criticism came from the “left” side of the political spectrum; and the four dissenting Supreme Court Justices were the traditional “liberal bloc.” In her dissent, Justice Ginsburg expressly calls for “Congressional correction.” However, realistically, the ideological opponents of this decision are simply not in power. Democrats hold only a minority of the House and Senate; and, of course, President Trump is a Republican. In this case, the Office of the Solicitor General actually switched positions after the changeover from President Obama to President Trump, and ultimately supported the employer side. Presumably, that is an indication of President Trump’s view of the case. In short, I doubt we’ll see legislative action any time soon.

Monday, June 4, 2018

Some Thoughts on Masterpiece Cakeshop

By now, you have probably already heard that the Supreme Court issued its opinion in Masterpiece Cakeshop v. Colorado Civil Rights Commission. This is the case where the bakery refused to make a wedding cake for a same-sex couple, and was charged with violating Colorado's law against discriminating on the basis of sexual orientation.

The case set up a conflict between the First Amendment's free exercise clause (also, arguably, free expression - but the Court focused primarily on exercise of religious beliefs), and Colorado's civil rights law. The Court ducked the major issues to issue a narrow ruling. Ultimately, the Court ruled for the cakeshop but based on some circumstances that were very specific to this case:
  • At a public hearing, a Colorado commissioner made some stupid comments disparaging the cakeshop owner's religious beliefs as "despicable" and merely "rhetorical," and invoking religious defenses of slavery and the holocaust. That type of anti-religious commentary is a recipe (sorry, I couldn't resist) for First Amendment issues. 
  • "[O]n at least three other occasions the Civil Rights Division considered the refusal of bakers to create cakes with images that conveyed disapproval of same-sex marriage, along with religious text. Each time, the Division found that the baker acted lawfully in refusing service." In other words, each bakery's viewpoint appeared to dictate the result. That type of disparate treatment just won't cut it (dammit, I can't help myself). 
  • The Court also noted that same-sex marriage was not yet legal in Colorado, but that wasn't really a main ingredient in the Court's opinion - more like icing on the cake (okay okay, I'm done now). 
Perhaps as important as the decision itself is what the decision is not
  • First, the cakeshop here offered to sell the same-sex couple "birthday cakes, shower cakes . . . cookies and brownies." This was not a case about generally refusing service on the basis of sexual orientation. 
  • Even in the context of same-sex weddings, the Court expressed skepticism about how far businesses could go with a First Amendment argument. The Court noted that clergy can obviously refrain from performing marriage ceremonies. "Yet if that exception were not confined, then a long list of persons who provide goods and services for marriages and weddings might refuse to do so for gay persons, thus resulting in a community-wide stigma inconsistent with the history and dynamics of civil rights laws that ensure equal access to goods, services, and public accommodations." Yes, Justice Kennedy, the extent of the exception and its confines are *exactly* why we're here! Alas, he never gets there, relying on the rationale above instead. 
  • This decision is most definitely not a license to discriminate against the LGBTQ community generally. In fact, quite the opposite, as the Court notes: "[I]t is a general rule that [religious and philosophical] objections do not allow business owners and other actors in the economy and in society to deny protected persons equal access to goods and services under a neutral and generally applicable public accommodations law."
In short, the eagerly anticipated decision was mostly a dud. A reaffirmation that government agencies can't be openly hostile to religious beliefs and engage in viewpoint discrimination. The Court failed to address the difficult line-drawing issues that will surely keep the lower courts busy in the near future. 

Tuesday, May 22, 2018

New Whitepaper: Supreme Court Okays Class Action Waivers in Arbitration Agreements

Yesterday, the Supreme Court issued an important decision regarding arbitration agreements (specifically, agreements requiring one-on-one arbitration as opposed to class or collective actions). Read all about it in my new whitepaper: Supreme Court Okays Class Action Waivers in Arbitration Agreements.

Monday, May 21, 2018

Can employers pay exempt employees an hourly wage for extra hours?

The federal Fair Labor Standards Act (FLSA) requires employers to pay employees an overtime premium (time-and-a-half) for hours over 40 worked in a workweek. Of course, there are a ton of exemptions. Generally, the exemptions depend on the employee's primary duties and require that (s)he get paid on a salary basis.

Not official use.
Can employers ask salaried exempt employees to work extra hours in exchange for extra pay (without losing the exemption)? This always seemed a little counterintuitive to me . . . after all, the point of the salary basis test is that employees get paid a set amount regardless of how many hours they work. However, it turns out the DOL regs expressly provide for this kind of dual-payment scenario:
An employer may provide an exempt employee with additional compensation without losing the exemption or violating the salary basis requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly-required amount paid on a salary basis . . . Such additional compensation may be paid on any basis [including a] straight-time hourly amount.
29 CFR § 541.604 Minimum guarantee plus extras (emphasis added).

There you have it. Employers can actually pay exempt employees on an hourly basis and not lose the exemption (so long as the employee is also paid the minimum required salary, currently $455/week).

The reg also expressly identifie
s other "extra" payments:

  • Commissions on sales;
  • Flat sum;
  • Bonus payment;
  • Time and one-half; and
  • Paid Time Off (PTO).
Don't forget to check state laws though!

Friday, May 18, 2018

Liquidated Damages in Pennsylvania Wage Cases

The Pennsylvania Wage Payment and Collection Law (WPCL) provides some nice perks for employees who successfully sue for unpaid wages. For example, successful plaintiffs receive mandatory attorneys fees.

The WPCL also has a liquidated damages provision. Employees are entitled to their wages, plus an additional 25% of the wages due. 43 P.S. § 260.10. Employers can avoid liquidated damages where there is a "good faith contest or dispute."

The Legal Intelligencer has an interesting case summary for Yablonski v. Keevican Weiss Bauerle & Hirsch, LLC (subscription). The employer paid back some of the money it allegedly owed prior to trial (where they lost), and then argued that the repaid money should be excluded from the liquidated damages calculation. The Allegheny County Court of Common Pleas apparently disagreed:
Relying on 43 P.S. §260.10, the court concluded that plaintiff's wages remained unpaid for 30 days beyond the regularly scheduled payday. The plain meaning of the language in the statute called for calculating liquidated damages utilizing the total wages due 30 days beyond the payday, and not at the time of trial.
It's helpful for employers to understand the potential penalties under the WPCL, although this decision is not binding on other trial courts.

Wednesday, May 2, 2018

PA Commonwealth Court: Security consultant was employee, not independent contractor

As longtime readers know, independent contractor versus employee classification is one of my favorite issues. The Pennsylvania Commonwealth Court recently added a new unemployment compensation case to the mix: HPM Consulting v. UCBR.

These cases are often convoluted, and very fact-intensive. This case involved a safety consultant, who signed multiple contracts with HPM Consulting to go to other states and work. The contracts specifically referred to him as a "1099 contractor" (1099 refers to the tax form, and is issued to independent contractors as opposed to employees, who receive W-2s).

Of course, labels on a contract are not controlling on the courts. The majority opinion still concluded that the consultant was an employee. The worker did not solicit his own work, did not pay for his certifications, and HPM set his rate of pay.

Two points worth noting: (1) in unemployment compensation cases, we start with a strong presumption that someone working in exchange for compensation is an employee; and (2) in unemployment compensation cases, the UCBR is the ultimate fact-finder (if it has evidence to support its conclusion).