Tag Archives: employer rights

discriminating against transgender employees, Discrimination, Discrimination in the Workplace, Employee Rights, Employer Rights, Race Discrimination

Worshiping both God and the Almighty Dollar

Last month we told you about corporations being able to sue if they were victims of race discrimination.  This month, we learned of a case out of Michigan holding that corporations can claim “sincere religious beliefs” that justify discriminating against transgender employees.

In EEOC v. R.G. & G.R. Harris Funeral Home, a federal judge ruled that the Religious Freedom Restoration Act (RFRA) empowers a for-profit corporation to terminate an employee for transitioning from a man into a woman. According to the court, the employer demonstrated that its religious belief that gender is “an immutable God-given gift” would be “substantially burden[ed],” if the funeral home were required to employ a transgender worker. The district court’s ruling extended the reasoning of the U.S. Supreme Court’s decision, Burwell v. Hobby Lobby Stores, Inc. (2014), holding that a privately held corporation can be a protected “person” under RFRA.

The Michigan decision is unprecedented and raises difficult questions as to whose civil rights are more important — those of the employee protected from discrimination based on sexual stereotypes, or those of the employer, claiming religious beliefs.  What if a corporation claims a “sincerely held religious belief” that disfavors disabled persons, older workers, or racial minorities?  Would the court then allow discrimination against employees in those categories?

We shall see. In any event, privately held companies with religiously active owners can be expected to assert more RFRA rights and religious defenses in the future.  For a related discussion of state religious freedom laws at work, please see the attached American Bar Association paper that I co-presented at the Employment Rights and Responsibilities Committee meeting this spring.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Standard
overtime

The Secret Overtime Worker

falling treePhilosophers and employment lawyers have pondered these two conundrums for years: (1) if a tree falls in the forest and no one hears it, does it make a sound? and (2) if an hourly employee works overtime, but no one is aware of it, is she entitled to overtime pay?

The Update is here to resolve both of these quandaries, once and for all.

First, yes, of course the tree makes a sound.  It’s a physical fact.  Cracking wood emits sound waves even when we humans aren’t there to hear them.  (Update drops the microphone, Bam!)

Second, no, overtime pay is not due if the employee performs the work secretly and against employer policy, so long as the employer is not made aware – actually or constructively — of the extra hours worked.  At least that was the answer of the United States Court of Appeals for the Fifth Circuit in a January decision, Fairchild v. All American Check Cashing, Inc. There the court decided the appeal of a manager trainee who claimed she worked overtime to “get the job done,” but did not report it to anyone. This extra overtime violated company policy that required advance authorization before any work was done.  Moreover, the employee could not show that the company had “constructive knowledge” of her alleged overtime work (an employer is liable to pay wages, including overtime, for any work that it “suffers or permits” to occur, even if not authorized), as she performed the work after she had clocked out, without informing anyone.

The employee claimed that All American Check Cashing “should have known” she was working overtime, because it had access to computer usage records that reflected her after-hours work. But the court held that mere ability to access such information is insufficient to show that the employer knew or should have known about the extra hours. Apparently the employee was unable to put forward any evidence that company management actually was aware of her overtime work, which is unusual in these cases.  Also harmful to the employee’s claim was the fact that she had reported and been paid for certain overtime hours.

So, some helpful takeaways from this walk through the overtime woods:

  • Employers should adopt a policy that prohibits overtime work without authorization to best limit and control overtime. But, be aware that the employer will still be on the hook if it knows the overtime work is being performed, even if not authorized, and it does nothing to stop it.
  • If an employee does feel that she has to work overtime, she should promptly report it on her time sheets — or to human resources if she is being forced to work “off the clock” by her local manager(s) — to ensure the employer has knowledge of all hours worked, and the hours get paid. Secretly performing the work, but not reporting it, may leave the employee standing empty-handed in the lonely, quiet forest, as in Fairchild.
  • Although ignorance was bliss for All American Check Cashing, employers are, generally, better off taking steps to monitor employee computer usage and after hours work to ensure no unauthorized work is being performed off the clock – and creating a risk of liability.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

 

Standard
Fair Labor Standards Act (FSLA), FLSA Requirements, Independent Contractors, US DOL

Crisis = Opportunity with FLSA Changes

time is moneyFrom the outrage and dread being spewed on the blogos-fear, one would think that the latest moves by the U.S. Department of Labor (DOL) on overtime pay and the misclassification of independent contractors are nothing but bad news for employers.

But the Update is here to report a silver lining.

As you may have seen reported in July, President Obama announced proposed federal regulations for the Fair Labor Standards Act that would substantially revise the law on “white collar” exemptions to overtime pay, including more than doubling the minimum salary required for such exempt positions.  As a refresher, “white collar” employees who perform certain executive, professional and administrative duties can be exempt from overtime pay, if they are paid a base salary that exceeds the minimum threshold (currently $455 per week).  The proposed DOL regulations are far from final, but they give employers a great opportunity to review – and change  – any problematic treatment of employees who, arguably, should have been overtime eligible all along.

The same applies to the recent “interpretation” published by the DOL on July 15, 2015, in relation to the misclassification of employees as “independent contractors.”  According to the DOL, “most workers” now should be considered employees rather than independent contractors, and the DOL intends to “crack down” on employers that misclassify portions of their workforce as independent contractors in order to avoid overtime pay obligations, wage taxes, benefit costs and other expenses.  If a worker performs tasks that are “integral to the employer’s business,” then that worker is most likely an employee, according to the DOL.  Likewise, if the worker is “economically dependent” on the employer, then he must be an employee, the DOL contends.

Instead of merely complaining about this double-barreled DOL attack, employers should seize the opportunity to review and revise any longstanding and improper treatment of employees, thus emerging stronger than ever — before any new rules kick in.  If employers find that some employees are currently not being paid overtime – or treated as employees – but they should be, the new DOL efforts provide a good rationale for making a change now, without highlighting to employees that any pre-existing practices could support a claim for back pay.

For example, an employer that has not been paying overtime wages to “assistant managers” who might be seen by the DOL as non-exempt senior retail sales clerks, could use the proposed DOL regulations as a reason to shift the employees from salaried to hourly, with overtime.  A typical announcement in such a situation could state, “In light of newly proposed federal regulations that will change the rules with regard to ‘exempt’ salaried employees, ABC Company has reviewed and updated its pay policies.”  The employer can then bring the employees’ pay into compliance with less chance of raising a red flag — or class action lawsuits – by an employee asking, “Hey, should I have gotten overtime pay in the past?”

Likewise, employers can change independent contractors to employees – where existing law supports the reclassification – and can explain that the DOL has just come out with “new” guidance that, in the company’s view, makes it more appropriate to pay the worker as an employee going forward.

Using the DOL initiatives as the driving force behind such changes in pay is a proven strategy that can reduce the employer’s risk of wage and hour claims, and bring the workforce into greater compliance with federal law.

Action item:  The first step in this process is to conduct a “wage and hour audit,” either internally or with outside employment counsel, to determine whether the employer has any compliance vulnerabilities (most employers do), either under existing law or the proposed changes in the law.  Once that is done, the employer can then work with counsel to determine the best path forward to make any changes needed, including the important “messaging” noted above that can limit the risk of individual or class action suits.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Standard
Employee Rights, Employer Rights, Pennsylvania's Minimum Wage Act

Waiting time compensable?

The U.S. Supreme Court held in December in Integrity Staffing Solutions v. Busk that federal law does not require employers to pay employees for time they spend waiting to undergo antitheft security screenings in the workplace, but that’s not the end of the issue.

Many states have wage payment laws inconsistent with federal law on the duty to pay for activities “preliminary to or postliminary to” the principal work activity. Pennsylvania’s Minimum Wage Act, for example, requires employers to pay for “time during which an employee is required by the employer to be on the premises of the employer,” and that presumably would include waiting time for a security check.

So, be careful out there and check your state laws.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Standard
Employee Rights, Employer Policy, Employer Rights, Valentine's Day, Workplace Romance

Legal Alert – Valentine’s Day Edition: Is Office Romance Forbidden?

Guest Blogger: Adam Gersh, Shareholder, Flaster/Greenberg PC

It is Valentine’s Day and love is in the air, but also at the water cooler. A recent study found that—even in the age of online dating—the largest percentage of spouses met through work (21 percent). Another study found that 18 percent of couples who meet at work get married. Although it is inevitable that romances will develop out of workplace relationships, it is not all champagne and roses for employers, especially if a relationship sours.

From a legal perspective, consensual romantic relationships between coworkers, or even between a supervisor and an employee, do not, constitute sexual discrimination or harassment. Nonetheless, workplace romances can create particularly tricky situations for employers because:

  • Good relationships gone bad create risks (example: when a sexual harassment claim arises out of a failed relationship between a manager and subordinate, there may be extensive evidence of sexual or sexually suggestive conduct that is subject to multiple interpretations, some of which are unfavorable to an employer)
  • Disparity in work assignments arising from the relationship can negatively affect employment (example: upper management wants to discipline an employee who never works the night shift when, in reality, the employee’s schedule is a consequence of his romantic relationship with his direct supervisor who wants to keep the employee’s nights free for dating)
  • Favoritism causes peers to perceive they are being discriminated against (example: a paramour is not disciplined for late arrivals such that when her co-worker is disciplined, the co-worker believes she is a victim of discrimination)

Each situation is unique, but the underlying commonality is that romantic relationships between coworkers can throw off office equilibrium.

Due to the host of potential risks that may arise, employers should consider adopting policies to mitigate the risks caused by employees’ romantic relationships. However, there are no one-size-fits-all solutions. Larger employers may have the capacity to prohibit employee-supervisor relationships and adopt a policy of reassigning one of the employees, but many smaller employers simply cannot create that kind of separation.

Though an outright ban on office romances is not always necessary (and often impractical), employers should make sure they are aware of and document relationships by, at the very least:

  • Adopting a policy requiring employees to disclose a workplace romantic relationship to human resources or a chief officer immediately, especially when the employees are in the same chain of command
  • Requiring the employees to acknowledge their relationship in writing (often with an agreement called a “love contract”), including, among other things, a statement that the relationship is consensual, that the employees understand they are still subject to and protected by the employer’s anti-harassment policies, and that the employees may be subject to discipline if they allow the relationship to interfere with their employment duties
  • Seeking a release of all potential legal claims

The key is for the organization to implement disclosure and response policies that fit the culture and manage risks.

Once an employer is on notice of a romantic relationship in the workplace, it should take steps to evaluate and reduce the risk, including enforcing its policies consistently. The consequences of inconsistent enforcement can be real. In a recent California case, an employee involved in a workplace romance alleged that his employer disciplined him differently from similarly-situated employees who also had workplace relationships.　The employee claimed he was treated differently due to discriminatory motives. This is just one example of the many ways inconsistent enforcement puts an employer at risk even if there is no discriminatory intent.

Does this mean there’s no place for love in the workplace? Certainly not. A number of studies have found that workplace romance can have a positive effect by increasing job performance, overall job satisfaction, an employee’s level of involvement, and organizational commitment. Well-tailored policies help employers maintain stability in the workplace and limit the risks that arise from office romances.

We simply suggest that employers create and enforce strong policies that meet their situation.

This is the blog of Michael Homans. Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

 

Standard
Age Discrimination in Employment Act, Employer Rights

Employer wins age case, despite mandatory retirement policy

Most cases are won or lost on the facts, but that chestnut minimizes the importance of zealous advocacy and persistence in legal battles.

Tokah v. Foxco Insurance Management Services, Inc., decided last month by the U.S. Court of Appeals for the Third Circuit, illustrates why first impressions based on a few “bad facts” do not mean the employer should give up. In Tokah, the plaintiff put forward three seemingly damning facts to support her age discrimination claim:

  • She was fired at age 66 after 14 years of service for the company, and despite not having any performance problems.
  • The company had a “mandatory” retirement policy in its Employee Handbook that required retirement after age 65.
  • A younger person was retained to perform the plaintiff’s job duties, and plaintiff was required to train her to do the job.

Faced with this evidence, especially the mandatory retirement policy, many companies would just say “get out the checkbook” and settle. But Foxco and its lawyers did not. They believed these facts did not tell the whole story, and they fought the case through a jury trial (which Foxco won) and an appeal (which Foxco also won, this month).

How did Foxco do it? Apparently through good old-fashioned hard work and compelling witness testimony to develop and explain the facts justifying the termination for non-discriminatory reasons. Instead of conceding the decisiveness of the plaintiff’s facts, Foxco showed that:

  • The mandatory retirement policy was not enforced and the decision-maker in the termination was not even aware of it until the plaintiff pointed it out.
  • Due to a substantial decline in revenues, the company had to terminate five employees, including plaintiff, and several were younger, showing the lack of an age-based motivation.
  • The retained employee had skills that the plaintiff lacked, justifying the company’s decision to retain her instead of plaintiff.

In the end, we also assume there were credibility judgments by the jury that favored Foxco. Again, this is a credit to the defense lawyer and the company, who obviously spent the time to properly prepare for trial and show why its stated reasons were bona fide, and that the plaintiff was not fired because of her age.

Michael Homans is a Labor & Employment attorney and founding partner of HomansPeck LLC. For more employment law updates, including news and links to important information pertaining to legal developments that may affect your business, subscribe to Michael’s blog, or follow him on Twitter @EmployLawUpdate.

Standard