SCOTUS Season Concludes with a Labor Decision and a Surprise

Yesterday, the Supreme Court concluded its 2017-18 term. I'll start with the huge news that Justice Kennedy announced his retirement. Hopefully, we'll soon know who President trump nominates to replace him, and do a little employment law background check on him or her. Here is President Trumps 'short list' from November 2017.

The big news for the hour or so before the retirement announcement was that the Supreme Court issued its opinion in Janus v. AFSCME. The 5-4 majority opinion from Justice Alito is 49 pages, so I'll bypass the complicated legal analysis and cut to the conclusion:

States and public-sector unions may no longer extract agency fees from nonconsenting employees . . . . This procedure violates the First Amendment and cannot continue. Neither an agency fee nor any other payment to the union may be deducted from a nonmember’s wages, nor may any other attempt be made to collect such a payment, unless the employee affirmatively consents to pay. By agreeing to pay, nonmembers are waiving their First Amendment rights, and such a waiver cannot be presumed. Rather, to be effective, the waiver must be freely given and shown by “clear and compelling” evidence. Unless employees clearly and affirmatively consent before any money is taken from them, this standard cannot be met.

(citations omitted). This is big news and will have a big impact on states where public employee unions require a "fair share."

Miles on Regime Change in Washington

Straight from the Department of Shameless Self-Promotion, I present to you a recent story in the Pennsylvania Business Central: Change in management - The impact of regime change in Washington on labor law. The article includes extended comments from me, and another local employment law attorney, Amy Marshall.

I suppose now is as good a time as any to also note that Lawffice Space was selected by Feedspot as one of the Top 75 Employment Law Blogs on the web.

Trump picks Puzder for Labor

Yesterday, President Elect Donald Trump named Andy Puzder (CEO of Carl's Jr. and Hardees) to head the Department of Labor. You can read more about him via Reuters: Trump picks opponent of higher minimum wage for Labor Department. I saw a lot of chatter on Twitter about his comments regarding robots:

What the new labor secretary said about replacing human workers with robots: #Puzder pic.twitter.com/dNXQ0aSKej

— Marci✌️️&❤️ (@marcifromCO) December 9, 2016

Not official use.

On the one hand, I can see why this upsets some people... on the other hand, I'd be more concerned if the new head of DOL did *not* understand the implications of the rapid advances in automation and AI.

I think it's safe to say we'll see some significant changes from the Obama years. The first thing on his plate will likely be the overtime regulations appeal, which just received an expedited briefing schedule at the Fifth Circuit.

Lawffice Links - Court enjoins contractor blacklisting rules

Yesterday, the final rule implementing President Obama's "Fair Pay and Safe Workplaces" executive order, including the so-called "blacklisting" rules for federal contractors, was supposed to take effect (generally, it requires contractors to publicly disclose certain labor law violations and instructs federal agencies how to factor in those violations in awarding contracts). But, wait! At the last minute, a federal court enjoined most of the rule. I baked some Lawffice Links to bring you up to speed:

• Of course, you'll want the final rule and the Department of Labor's final guidance. 
• Or at least the brief overview on DOL's website.
• And then, you'll want to read the Judge's Memorandum and Order Granting Preliminary Injunction from the Eastern District of Texas. 
• Or at least some quality blogging about the decision, like maybe Eric Meyer's A Texas judge has enjoined practically all of the DOL “blacklisting” rules;
• Or maybe Seth Borden's Federal District Court Enjoins Reporting and Arbitration Requirements in Administration’s Contractor Blacklisting Rules; Allows Paycheck Transparency Provisions to Stand. 

Now, remember kids, it's only a preliminary injunction at a district court . . . so, the game is far from over. 

Just in from SCOTUS: Compulsory public union fees for collective bargaining survive

It was supposed to be a ginormous (that's a word, right?) labor law decision. In Friedrichs v. California Teachers Ass'n, the Supreme Court was going to decide:

(1) Whether Abood v. Detroit Board of Education should be overruled and public-sector “agency shop” arrangements invalidated under the First Amendment; and  

(2) whether it violates the First Amendment to require that public employees affirmatively object to subsidizing nonchargeable speech by public-sector unions, rather than requiring that employees affirmatively consent to subsidizing such speech.

 In other words, can public sector unions collect mandatory fees from employees who don't want to pay those fees?

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.

Abood suffered some criticism and setbacks in recent Supreme Court decisions (like Knox v. SEIU and Harris v. Quinn). Friedrichs was going to finally pull the trigger... it was going to kill the Abood carve-out once and for all. But then, Justice Scalia died.

The end result? The United States Supreme Court split 4-4, which means the 9th Circuit opinion relying on Abood was affirmed. As I stated on Twitter:

Just in: Abood lives, because Justice Scalia died. Friedrichs affirmed by equally divided court in per curiam opinion. #SCOTUS

— Philip Miles (@PhilipMiles) March 29, 2016

Mandatory fees for collective bargaining by public unions appears safe. For now. Although the Supreme Court issued only a per curiam opinion with no analysis, we know they were "equally divided" (presumably split 4-4). Will the Court take up this issue again when they're back at nine? We'll see.

Breaking: SCOTUS on Mandatory Union Fees in Harris v. Quinn

The Supreme Court just issued its opinion in Harris v. Quinn. The general holding is:

The First Amendment prohibits the collection of an agency fee from Rehabilitation Program PAs who do not want to join or support the union.

However, the Court has declined to reverse Abood (generally allowing mandatory fees to public employee unions). I'll need some time to fully analyze, but this looks like a narrow or limited holding. The Court notes that the employees in this case are "quite different from full-fledged public employees."

So, the Court will not reverse Abood, but will also not extend it to the employees in this case. It looks like the opinion includes some criticism of Abood too - its days may be numbered but it survives for now.

We have a 5-4 (conservative bloc plus Kennedy) split in this one.

Northwestern Football Players Win Round 1 in Union Battle

By now, you've probably already heard the big news. That's always a dilemma for niche bloggers like me. On the one hand, I'd be a pretty awful employment law blogger if I didn't tell you an NLRB regional director held that Northwestern's football players are employees who can vote on unionizing. On the other hand, it's such a big story that you've probably already seen it all over the news (and I just don't have time to keep up with the full time journalists).

Anyway, here's the opinion in Northwestern University and College Athletes Players Association. The decision notably holds that Brown University is inapplicable, but goes on to analyze the factors under Brown anyway (reaching the same conclusion - football players are employees). In Brown, the NLRB held that graduate student assistants were not employees.

I know everybody is excited/infuriated/elated about this decision, but a quick reality check: this will be appealed. The NLRB will review it and it will probably end up in the federal courts. I would be surprised if Northwestern football ever unionizes as a result of this petition. That said, agencies and courts have surprised me before.

One other quick note, many college football teams play for public colleges and universities. Those schools generally fall under a state public employee relations act (PERA). So, this decision will not directly affect them (it may provide some "persuasive" authority to the state labor relations boards though).

Image: NLRB seal used in commentary on NLRB. Not official use.

3d Cir. on Severability of Indefinite CBA Termination Clause

The Third Circuit recently issued an interesting non-precedential opinion in the world of collective bargaining: Int'l Union of Op. Engineers, Local Union No. 542 v. Allied Erecting and Dismantling Co. (opinion here).

The setup is pretty simple. Management and the union entered into a CBA with a severability clause and the following termination clause:

[T]his Agreement shall terminate upon [Allied’s] completion of the [Fairless Hills PA dismantling] Project. As to any jobsite to which this Agreement is extended on a jobsite-by-jobsite basis[,] . . . the Agreement and [Allied’s] recognition of the Union for employees employed at such jobsite shall terminate upon the completion of [Allied’s] work at such jobsites.

Can you spot the issue? I've gotta say - this is a tough one (it would make a good bonus question for a labor law prof).

The Third Circuit held that the termination clause afforded the employer the power to extend the CBA to new jobsites at its discretion. Therefore, the agreement was for an indefinite term - a no-no under the NLRA. In the words of the Court, "The agreements are indefinite because one party unilaterally controls the termination event."

So, what did the Court do about it? The Court relied on the agreements severability clause to carve out the language that made the agreement indefinite - i.e. the language extending the agreement on a "jobsite-by-jobsite" basis. The end result being that the agreement would terminate upon completion of the Fairless Hills project.

This is some new ground in the Third Circuit, and they relied heavily on decisions from other circuits.

HT: I get these great emails about once a month from the FBA Labor and Employment Law Section with interesting cases from the Circuit Courts of Appeals. That's where I saw this case.

Northwestern Football Players . . . to Unionize?

I rarely blog mid-day, but this seems worthy. The National College Players Association (NCPA) has petitioned the NLRB to form a union comprised of college athletes. They filed the petition on behalf of Northwestern's football team, including an undisclosed number of signed union cards.

As Professor Paul Secunda tweeted:

Biggest problem: not covered employees under NLRA. RT @PhilipMiles: Northwestern players seek to join labor union http://t.co/1uyXi8ojpF
— Paul M. Secunda (@psecundaWrkProf) January 28, 2014

That does appear to be a problem. And one echoed by the NCAA's response:

This union-backed attempt to turn student-athletes into employees undermines the purpose of college: an education. Student-athletes are not employees, and their participation in college sports is voluntary. We stand for all student-athletes, not just those the unions want to professionalize. Many student athletes are provided scholarships and many other benefits for their participation. There is no employment relationship between the NCAA, its affiliated institutions or student-athletes. Student-athletes are not employees within any definition of the National Labor Relations Act or the Fair Labor Standards Act. We are confident the National Labor Relations Board will find in our favor, as there is no right to organize student-athletes.

The NCPA president claims an "overwhelming majority" of Northwestern's players support unionizing. It will certainly be interesting to see where this goes.

SCOTUS DIGs "most significant labor case in a generation"

This just in, the Supreme Court issued this order dismissing Unite Here Local 355 v. Mulhall (SCOTUSBlog page) as improvidently granted (i.e. DIG'd). This case was dubbed, "the most significant labor case in a generation." The Court was supposed to decide:

Whether an employer and union may violate § 302 [of the Labor-Management Relations Act] by entering into an agreement under which the employer exercises its freedom of speech by promising to remain neutral to union organizing, its property rights by granting union representatives limited access to the employer’s property and employees, and its freedom of contract by obtaining the union’s promise to forego its rights to picket, boycott, or otherwise put pressure on the employer’s business?

For those of you keeping track at home, this is the second labor and employment law case that SCOTUS has DIG'd this term. Earlier they dismissed Madigan v. Levin, a public employee age discrimination case. Knock it off SCOTUS (or, if you must, DIG some of those patent or criminal procedure cases I don't follow instead)!

The dismissal in Unite Here was a one-line per curiam. That said, Justice Breyer (joined by Justices Sotomayor and Kagan) penned a three-page dissent.

Lawffice Links - SCOTUS hears "the most significant labor case in a generation.”

Yesterday, the Supreme Court heard oral arguments in Unite Here Local 355 v. Mulhall.Harvard prof. Ben Sachs describes it as potentially "the most significant labor case in a generation." The question presented is:

Whether an employer and union may violate § 302 [of the Labor-Management Relations Act] by entering into an agreement under which the employer exercises its freedom of speech by promising to remain neutral to union organizing, its property rights by granting union representatives limited access to the employer’s property and employees, and its freedom of contract by obtaining the union’s promise to forego its rights to picket, boycott, or otherwise put pressure on the employer’s business?

Sounds complicated, so I baked some Lawffice Links to help sort things out:

• SCOTUSblog has a nice argument preview: Unite or disunite - another roadblock to union organizing and collective bargaining.
• How big is this case? Even the NYT is on it: Supreme Court to Take Up Challenges to Union Practices (featuring the Sachs quote above).
• Let's not forget the transcripts from the oral arguments.
• Sachs and fellow Harvard prof. Jack Goldsmith have a blog called On Labor, with extensive coverage of the case and arguments. 
• Reuters also chimed in with coverage of the arguments: Supreme Court weighs employer-union organizing deals.

Now we just sit back and wait for the Supreme Court to drop an opinion on us.

$666 Raise Spawns Devilish Claim - COTW #166

Just in time for Halloween, the latest Case of the Week prominently features Satan and the mark of the beast - 666. The Cleveland State University Chapter of the American Association of University Professors filed this unfair labor practice charge.

The charge is based in part on the following allegations:

[F]aculty generally received one of the following merit raises: $5,000, $3,000, $666, $0. Dean Boise manipulated [the] merit raise increases in order to . . . award the bulk of AAUP organizers a six-six-six wage increase . . . . In effect Dean Boise has called AAUP's organizers and AAUP Satan.

Maybe it's just me, but that sounds like a bit of a stretch.

HT: Volokh Conspiracy post emailed to me by Mike Chittenden of Miller & Chevalier.

SCOTUS 2013-14 Labor Law Preview

Another Supreme Court season is upon us! The Court has a pretty decent lineup of labor law cases this year. I'll break the employment law cases into a separate post. Let's cut to the chase:

Recess Appointments

NLRB v. Noel Canning will probably get the most media attention of the bunch. The case will address whether President Obama's appointments to the NLRB were constitutional. Per the cert. petition, the questions presented are:

1. Whether the President's recess-appointment power may be exercised during a recess that occurs within a session of the Senate, or is instead limited to recesses that occur between enumerated sessions of the Senate.

2. Whether the President's recess-appointment power may be exercised to fill vacancies that exist during a recess, or is instead limited to vacancies that first arose during that recess.

This case could have a big impact on the President's recess-appointment power beyond just the NLRB. Argument set for December 4, 2013.

Compensation for Changing Clothes
Sounds silly, right? But, in Sandifer v. U.S. Steel, steel workers claim they spend up to a few hours per week changing into their work attire. Under an FLSA exception, "changing clothes" may be excluded from compensation by a CBA.

Here, the "clothes" include things like flame-retardant jackets, metatarsals (steel-toed boots), and "snoods" (head and neck protectors). In other words, "donning and doffing" safety gear that is ordinarily compensable - but the gear is kind of clothes-y so maybe it's not. SCOTUS will hopefully draw the line.

Fun fact: I interned at a U.S. Steel plant in Pittsburgh in the IT department in 1998. When I went into the mill I wore the jacket and metatarsals (and hardhat and goggles), but no "snood" - I guess they didn't care that much about me ;-). Argument set for November 4, 2013.

Mandatory Dues
In Harris v. Quinn, the Supreme Court was petitioned to review the following questions:

1. May a State, consistent with the First and Fourteenth Amendments to the United States Constitution, compel personal care providers to accept and financially support a private organization as their exclusive representative to petition the State for greater reimbursements from its Medicaid programs?

2. Did the lower court err in holding that the claims of providers in the Home Based Support Services Program are not ripe for judicial review?

This could make union dues-collecting more difficult. Set for argument on November 13, 2013. Update: Not yet set for argument, but probably January of February 2014.

Labor-Management Organizing Agreements

In Unite Here Local 355 v. Mulhall, the employer promised not to oppose union representation and granted union access to its property, and the union agreed to forego rights to picket, boycott, etc. The question presented:

Whether an employer and union may violate § 302 [of the Labor-Management Relations Act] by entering into an agreement under which the employer exercises its freedom of speech by promising to remain neutral to union organizing, its property rights by granting union representatives limited access to the employer’s property and employees, and its freedom of contract by obtaining the union’s promise to forego its rights to picket, boycott, or otherwise put pressure on the employer’s business?

Set for argument on November 13, 2013 (same day as Harris v. Quinn - it's a labor law doubleheader!).

3d Cir.: FLSA Claims May Proceed Without CBA Grievance Arbitration

My home circuit, the Third Circuit, issued an FLSA opinion this week in Bell v. SEPTA (opinion here). Bus drivers and other vehicle operators claimed that they were not paid for pre-trip activities such as reading bulletins, checking detours, and performing vehicle inspections (and, as they worked 40 hours per week on top of these activities, all of that time was unpaid overtime). The district court dismissed the FLSA claims, holding that the claims were subject to collective bargaining agreement (CBA) grievance procedures.

On appeal, the Third Circuit noted that the FLSA claims existed independently of the CBA. The workers did not seek interpretation of the CBA, but merely payment for time spent working as required by the FLSA. The Third Circuit contrasted this with prior precedent holding:

[I]f a FLSA claim depends on the disputed interpretation of a CBA provision, an employee must first go to arbitration—through the representative union—before vindicating his or her rights in federal court under the FLSA.

The Court vacated the dismissal of the FLSA claims and sent them back to the district court where they can proceed without exhausting the CBA's grievance arbitration procedure.

Image: Third Circuit logo used in commentary on Third Circuit. Not official use.

Lawffice Links - Labor Law Bonanza!

What happened!? Suddenly labor law stories are dominating the mainstream media, so I cooked up some fresh Lawffice Links to mark the occasion:

• Michigan becomes a "right to work" state - Michigan becomes number 24. "Right to work" laws generally prohibit mandatory union membership and dues.
• Right to Work Map - Shows a map of the U.S. indicating which states are right to work states. Click on a state to view its right to work legislation. [Note: Link goes to Right to Work advocacy org.]
• Drinking Chrysler Employees Reinstated - Remember those auto-workers the medica caught drinking and "apparently" smoking dope on their breaks? Through the magic of labor arbitration, they were reinstated.
• Saints Bounty Players' Suspensions Revoked - Former NFL commissioner Paul Tagliabue heard appeals from the Saint players accused of participating in a bounty ring. They allegedly had a pool of money and the pot went to whoever took out the opposing quarterback. Well, their suspensions were just revoked.
• Steven Crowder Punched at Michigan Protest - Alright, I admit it . . . I'm a closet Red Eye fan. You can watch video of the frequent Red Eye guest getting punched in the face at the link.

Did I miss any hot labor stories? Drop a comment and let me know. Also, don't forget to VOTE FOR LAWFFICE SPACE in the ABA Blawg 100!

Does CBA Arbitration Clause Preclude Statutory Discrimination Lawsuit? - COTW #114

The Case of the Week comes to us from the Eastern District of Pennsylvania: Harrell v. Kellogg Co., 2012 WL 3962674 (Sept. 11, 2012). The plaintiff filed racial discrimination, retaliation, and hostile work environment claims against his employer under 42 U.S.C. s1981. The employer filed a motion to dismiss, arguing that a mandatory arbitration provision in the collective bargaining agreement (CBA) divested the Court of jurisdiction.

The CBA contained a generic arbitration provision, mandating that all grievances were subject to arbitration. In turn, grievances were defined as "disputes or disagreements concerning the interpretation and application of the provisions of this Agreement." Working our way down, the CBA's provisions included a broad nondiscrimination provision. So, the employer argued that the CBA mandated arbitration of grievances; grievances cover disputes over provisions; and the provisions included nondiscrimination - therefore the employee had waived his right to bring suit in federal court.

The Court does an amazing job of explaining this issue, and detailing the relevant precedent. I highly recommend reading the whole opinion, but cutting to the chase, the Court held:

[A] prerequisite to enforcing arbitration of federal statutory claims is that the waiver in the CBA "must be clear and unmistakable" . . . . [the leading cases] lead to the clear conclusion that a CBA with a general arbitration provision and a nondiscrimination provision that does not expressly mention the federal antidiscrimination statute under which the employee seeks redress, does not contain an explicit waiver to the employee's right to litigate his/her statutory claims in a judicial forum.

As the Court noted, the nondiscrimination provision in the CBA at issued did not explicitly reference s1981, the statute under which the employee filed suit. Therefore, the CBA did not clearly and unmistakably waive the plaintiff's right to bring his statutory discrimination claims in federal court. Accordingly, the Court denied the employer's motion to dismiss.

Knox v. SEIU - COTW #97

The Supreme Court issued its opinion in Knox v. SEIU yesterday. It probably felt a bit like the wrong person walking in to a surprise party: the room is filled with anticipation... deep breath... annnnd... and then universal disappointment. "You're not the health care opinion!" said everyone. But, Knox is still an important opinion, and it's a labor and employment law opinion... and now it's truly blessed because it's also the Lawffice Space Case of the Week!

The background of the case is that a public sector union can take "chargeable expenses" from nonmembers for union services related to collective bargaining. But, the union cannot require nonmembers to fund political projects (compelled speech is a First Amendment no-no). In this case, the union provided notice of the dues and chargeable expenses and nonmembers had an opportunity to opt-out of the dues.

Then, the union levied a special assessment for political purposes. Per the syllabus, "Nonunion employees were not given any choice as to whether they would pay into the fund." And therein lies the First Amendment concern.

The Court first decided a mootness issue, which hardly broke any new ground. If a party voluntarily ceases the challenged conduct, the Court will hear the case anyway because the party could just start back up after the case is dismissed.

The meat of the case is its First Amendment holding:

Under the First Amendment, when a union imposes a special assessment or dues increase levied to meet expenses that were not disclosed when the regular assessment was set, it must provide a fresh notice and may not exact any funds from nonmembers without their affirmative consent.

Justice Alito, for the majority, spent a good deal of time laying into opt-out schemes that require nonmembers to opt out of funding political speech instead of affirmatively opting in:

To respect the limits of the First Amendment, the union should have sent out a new notice allowing nonmembers to opt in to the special fee rather than requiring them to opt out.

Justice Alito finished with a concise summary of the case:

Public-sector unions have the right under the First Amendment to express their views on political and social issues without government interference. See, e.g., Citizens United v. Federal Election Comm’n, 558 U. S. ___ (2010). But employees who choose not to join a union have the same rights. The First Amendment creates a forum in which all may seek, without hindrance or aid from the State, to move public opinion and achieve their political goals. “First Amendment values [would be] at serious risk if the government [could] compel a particular citizen, or a discrete group of citizens, to pay special subsidies for speech on the side that [the government] favors.” United Foods, 533 U. S., at 411. Therefore, when a public-sector union imposes a special assessment or dues increase, the union must provide a fresh Hudson notice and may not exact any funds from nonmembers without their affirmative consent.

By my count, that's the last true labor and employment law case of the Supreme Court season. Of course, employers and employees (and pretty much everyone) is waiting for the health care opinion, which should be here at about 10:00 AM on Monday.

BREAKING: SCOTUS Grants Cert. in Two Labor and Employment Law Cases

The Supreme Court issued an order granting certiorari (agreeing to review) in two labor and employment law cases this morning:

First, in Knox v. SEIU, the Petitioner presents the questions as (HT: SCOTUSblog):

1. May a State, consistent with the First and Fourteenth Amendments, condition employment on the payment of a special union assessment intended solely for political and ideological expenditures without first providing a Hudson notice that includes information about that assessment and provides an opportunity to object to its exaction?

2.May a State, consistent with the First and Fourteenth Amendments, condition continued public employment on the payment of union agency fees for purposes of financing political expenditures for ballot measures?

The second case is Coleman v. Maryland Court of Appeals, asking:

Whether Congress constitutionally abrogated states’ Eleventh Amendment immunity when it passed the self-care leave provision of the Family and Medical Leave Act (FMLA).

Again, from the Petitioner's Brief, and see also, the SCOTUSblog case page.

Something to look forward next Supreme Court session!

Posted by Philip Miles, an attorney with McQuaide Blasko in State College, Pennsylvania in the firm's civil litigation and labor and employment law practice groups.

NFL v. Players Association - NLRB Complaint

I'm still recovering from watching my beloved Steelers lose the Super Bowl, and I'm already getting worried about next season. If you haven't heard, labor relations seem a little rocky these days. Yesterday, the League filed an unfair labor practice charge over the Players Association's plan to decertify (NBC Sports).

For the technical details, here's a copy of the actual Complaint. Credit where it's due, Seth Borden and Labor Relations Today have great coverage and provided the Complaint in NFL Files Unfair Labor Practice Charge Against NFLPA. The specific charges include delaying the scheduling of bargaining sessions, failing to respond in a timely and/or meaningful manner to contract proposals, inducing proposals that are then categorically rejected, insisting upon disclosures of financial data and suspending negoatiations absen such disclosures, and more.

As the NBC Sports story describes it:

The NFL believes that the union has engaged in "surface bargaining," along with tactics designed to avoid reaching an agreement before the CBA expires, so that the union can file antitrust litigation.

They better get things straightened out so the Steelers can make another run at seven!

HT Eric Meyer via Twitter for the link to the Complaint; and Donnell Thompson via Facebook for the NBC Sports story.

Posted by Philip Miles, an attorney with McQuaide Blasko in State College, Pennsylvania in the firm's civil litigation and labor and employment law practice groups.

Home Health Care Aides Entitled to Overtime in PA - COTW #18

In Bayada Nurses, Inc. v. Dept. of Labor & Indus., 2010 WL 4630856 (Pa. Nov. 17, 2010), the Pennsylvania Supreme Court held that home health care aides employed by an agency are likely entitled to overtime pay under the Pennsylvania Minimum Wage Act (PMWA). More specifically, they are not exempt under the "domestic services" exemption.

In Pennsylvania, the PMWA requires employers to pay employees 1.5 times their ordinary wage for hours worked in excess of 40 hours in a workweek (this "time and a half" concept is similar to the federal FLSA overtime requirements, which I will return to later). The PMWA contains an exemption, however, for "[d]omestic services in or about the private home of the employer." 43 P.S. § 333.105(a)(2).

The Pennsylvania Department of Labor and Industry promulgated a regulation defining the exemption as

Work in or about a private dwelling for an employer in his capacity as a householder, as distinguished from work in or about a private dwelling for such employer in the employer's pursuit of a trade, occupation, profession, enterprise or vocation.

34 Pa.Code § 231.1(b). Which, as the Court explained, means that:

[W]orking for the householder employer permits an exemption from overtime requirements. Working for a third-party agency employer does not.

Thus, the Court concludes that "an employer may enjoy the domestic services exemption [of the PMWA] only if it is a householder" and third-party agency employers do not qualify.

This case creates an interesting situation for Pennsylvania employers. The United States Supreme Court recently held that home elder care providers employed by an agency were not entitled to overtime under the FLSA. Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007). Indeed, the PA Supreme Court itself recognized that "the federal regulations under the FLSA exempt third-party agency employers from paying overtime." 29 C.F.R. § 552.109(a). The employees qualified for the "companionship services" exemption of the FLSA.

So, in Pennsylvania, employees of home care agencies may be exempt from FLSA overtime provisions but not exempt from the PMWA overtime provisions. The ultimate practical effect being that they are entitled to overtime.

Additional Coverage:
Agency home care aides must be paid overtime in Pennsylvania.

PA Supreme Court: In-Home Nurses Entitled To Overtime Pay

Posted by Philip Miles, an employment lawyer with McQuaide Blasko in State College, Pennsylvania.