On November 10, 2016, Salvatore G. Gangemi will be speaking at a seminar, Employment Law: Rights, Benefits, and Emerging Issues, in White Plains, New York at the Crowne Plaza. He will be speaking about The Perilous Intersection of FMLA and ADA as well as on Harassment, Retaliation, and Discrimination, Rights and Reprimands. The seminar is being conducted by Sterling Education Services. Information about the seminar is available at Employment Law: Rights, Benefits, and Emerging Issues.
Earlier this month, New York Attorney General Eric T. Schneiderman’s office announced that it had secured an agreement from Examination Management Services, Inc. (“EMSI”) to stop using non-compete agreements for most of its New York employees. EMSI is a Texas-based medical information services provider that required all of its New York employees to sign off on non-compete agreements, without regard to whether they had access to trade secret or other confidential information. The non-compete agreement that EMSI required its New York employees to sign prevented them from working for a competitor for 9 months after leaving EMSI, within 50 miles of any location in which the employee worked for EMSI. According to the Attorney General’s office, most of EMSI’s New York employees worked in non-senior level positions and mainly traveled throughout New York to conduct routine physical examinations.
Following a complaint by a former EMSI employee, whose job offer from a competitor was rescinded because of her non-compete agreement, the Attorney General’s office convinced EMSI to release the former employee from her non-compete agreement, not require non-senior level employees to sign them, and to notify current employees and former employees who left within the last 9 months that the non-compete agreement would no longer be in effect.
According to Attorney General Schneiderman, “[r]estricting rank-and-file workers from being able to find other jobs is unjust and inappropriate. . . . Workers should be able to change jobs without fear of being sued by their prior employer.”
Over the last few years, we have written about misclassification issues arising out of the use of unpaid interns to perform work. A recent case from a New York State court has just made it more difficult for such interns to assert class action claims for unpaid wages. In Rodriquez v. 5W Public Relations, (N.Y.S. Supreme Ct., N.Y. Cty, Index No. 156571/14, July 26, 2016), a putative class of individuals sought to recover unpaid wages from 5W Public Relations, LLC and its CEO for work they performed as unpaid interns. In seeking class certification, the plaintiffs were required to show, among other things, that common questions of law or fact predominated over any questions affecting only individual plaintiffs. Such a showing would be necessary to permit the plaintiffs to sue as a class, instead of individually.
The plaintiffs argued that common questions of law and fact predominated because all of the putative class members were required to agree to a universal employment agreement; performed similar work; were all subject to the identical employee handbook policies; and were all uniformly misclassified as interns not entitled to minimum wage. The court denied the plaintiffs’ motion for class certification despite that the interns appeared to all be subject to the same policies and work, because, according to the court, “the question of whether defendants’ internship program created employment relationships [could] only be answered with individualized proof as opposed to generalized proof.” In other words, although the interns were all part of the same internship program and subject to the same policies, their individual circumstances would need to be considered on the ultimate issue of whether or not they were really employees. The court did not state the precise test it would ultimately apply in determining whether the interns were really employees, but stated that any such test would balance a number of factors that took into account both the benefit of the work to the employer and the individual intern’s experiences.
The court provided the following non-exclusive list of factors that would be relevant in determining whether an intern was really an employee entitled to wages:
The New York State Human Rights Law (NYSHRL) and New York City Human Rights Law (NYCHRL) prohibit discrimination on the basis of sex or gender. Despite the “liberal construction” applied to the interpretation of sex discrimination under the NYSHRL and NYCHRL, a Manhattan Supreme Court held on May 11, 2016, that it does not include terminating an employee because of concerns that the employee is “too cute.”
In Edwards v. Nicolai, 160830/2013, NYLJ 1202758050107, at *1 (Sup., NY, Decided May 11, 2016), Edwards was employed as a yoga and massage therapist by Wall Street Chiropractic and Wellness (“WSCW”) for approximately a year and a half. WSCW was co-owned by Nicolai and his spouse, Adams. According to the complaint, Nicolai maintained a strictly professional relationship with Nicolai and had only met Adams once, at a cordial meeting. Approximately two months into Edwards’ employment, Nicolai told her that is wife might become jealous of her because she was “too cute.”
A year and a half after she was hired she received a text message from Adams “out of the blue,” which stated “[y]ou are NOT welcome any longer at Wall Street Chiropractic. DO NOT ever step foot in there again, and stay the [F….] away from my husband and family!!!!!!! And remember I warned you.” The next day Nicolai emailed Edwards, “You are fired and no longer welcome in our office. If you call or try to come back, we will call the police.”
Today, the U.S. Department of Labor (USDOL) issued its Final Rule modifying overtime requirements under the Fair Labor Standards Act (“FLSA”). The Final Rule makes material changes to the application of overtime exemptions, and will take effect on December 1, 2016.
In 2014, President Obama directed the Secretary of Labor to simplify and modernize the overtime rules to make them easier for employees and employers to understand and apply. As we previously wrote, in July 2015 the USDOL issued its proposed rule changes to the “white collar” exemptions to overtime pay, which apply to Executive, Administrative, Professional, Outside Sales and Computer Employees. The proposed rules addressed the salary basis test but not the duties test, both of which need to be satisfied in order for the exemption to apply. The USDOL requested comments from the public on its proposed changes to the salary basis test and on whether the USDOL should consider changes to the duties test as well.
By the time the comment period ended on September 4, 2015, the USDOL had received approximately 270,000 comments on the proposed rules. Among the concerns expressed was that the USDOL sought a substantial increase in the minimum salary threshold from $455 per week ($23,660 per year) to $970 per week ($50,440 per year), with automatic annual revisions/increases.
The Family and Medical Leave Act (“FMLA”) provides eligible employees with twelve workweeks of unpaid leave in connection with the birth or adoption of a child, caring for an immediate family member with a serious health condition, the employee’s own serious health condition, and exigencies relating to an employee’s or a family member’s service in the National Guard, Reserves, or Regular Armed Forces. Among the FMLA’s protections is an eligible employee’s entitlement to be protected from interference and retaliation by an “employer” for the exercise of FMLA rights.
Until just last week, it was unclear in the Second Circuit (New York, Connecticut and Vermont) whether an individual supervisor or other management official could be sued under the FMLA as an “employer” for interference and retaliation. On March 17, 2016, the United States Court of Appeals for the Second Circuit in Grazadio v. Culinary Institute of America, No. 15-888-cv, ruled that an individual management employee could be considered an employer under the FMLA and held liable for violating an employee’s FMLA rights.
In Graziadio, the plaintiff had sought to take two separate leaves relating to her childrens’ serious health conditions. The first approved leave was taken in connection with her son’s diabetes, and the second leave was sought and taken about a week after she returned to work as a result of her other son having suffered a leg fracture, necessitating surgery. The plaintiff had promptly informed her supervisor that she would need to take an immediate second leave and that she would return approximately 10 days later “at least part time.” Ultimately, the plaintiff sought approval to return to work from this second leave on a reduced schedule and asked whether the employer needed “any further documentation” from her concerning the leave that she had taken.
Although it is still unclear when the U.S. Department of Labor will finalize the proposed rules revising the white collar exemptions to overtime under the Fair Labor Standards Act, earlier this month a group of bipartisan members of Congress signed off on a letter to the Secretary of Labor, expressing “serious concern” over the proposed rules.
The February 9, 2016 letter, signed by 108 members of Congress, asserts that the proposed rule will adversely affect employers, including small businesses, as a result of its modification to the “salary test” portion of the exemption analysis. Currently, employers must pay overtime to employees who make less than $23,660 per year, whether they are paid on an hourly or salary basis. The proposed rule increases the salary threshold to $50,440 per year, which, according to the letter, would result in approximately 5 million employees becoming immediately eligible for overtime pay. The letter also states that the increased threshold ignores the “geographic diversity of our country,” insofar as the purchasing power of a dollar varies both regionally, and between rural and urban areas.
The proposed rules focus on the salary test, and the letter raises concern over possible changes to the “duties test” portion of the exemption analysis. Because no specific changes to the duties test are included in the proposed rules, the letter asks that the public be given an opportunity to comment on any proposed changes prior to their enactment.
Yesterday, we reported in our blog, What Happened to those Federal Rules Revising the White Collar Exemption to Overtime Pay?, that Solicitor of Labor, M. Patricia Smith, had announced at an American Bar Association conference that the proposed rules revising the salary levels for the white collar exemptions under the Fair Labor Standards Act would not be finalized earlier than late 2016. Nevertheless, according to the semiannual regulatory agenda (Fall-2015) published by the Office of Management and Budget (OMB), the proposed rules are scheduled to be finalized in July 2016, thereby rendering it likely that they will be in effect at some point toward the end of the third quarter of 2016. Did Solicitor Smith misspeak or is the OMB overly-optimistic? We will know soon enough.
Our July 2015 blog, Department of Labor Publishes Long Awaited Proposed Rules Revising White Collar Exemptions to Overtime, reported that the U.S. Department of Labor had released for public comment modifications to the “white collar” exemptions to overtime pay under the Fair Labor Standards Act (FLSA). The public comment period for these proposed rules ended on September 4, 2015, and resulted in approximately 270,000 comments, which the Wall Street Journal reported was more than three times the number of comments received during a prior rule change in 2004. Employers and employees expected that the new rules would be finalized by the end of 2015 or at the latest, early 2016. However, during the American Bar Association’s Labor and Employment Law conference held in Philadelphia this month, Solicitor of Labor, M. Patricia Smith, announced that the final rules would likely not be issued sooner than late-2016. She attributed the delay to the large volume of comments received on the proposed rules, which the Department of Labor is still reviewing.
The proposed regulations provide for an increase of the minimum salary level required to qualify for the white collar exemptions to overtime pay. Currently, to qualify for the exemption, a white collar employee must be paid a salary of at least $455 per week ($23,660 per year), in addition to satisfying a duties test detailed in the regulations. The proposed modifications dispense with stating a set salary amount, and instead seek to tie the salary level requirement to the 40th percentile of weekly earnings. Assuming that the rules became effective in 2016, although 2017 is becoming more likely,that would translate to a salary level of $970 per week ($50,440 per year). The higher salary level will result in millions more employees being deemed non-exempt, and therefore entitled to overtime pay.
As the end of the year rapidly approaches, new statutes affecting employers and employees are set to become effective. Among them is a New York City ordinance, titled “Mass Transit Benefits Law,” which requires every employer with twenty or more full-time employees in New York City to offer those full-time employees the option to use pre-tax earnings to purchase “qualified transportation fringe benefits,” except for qualified parking. The law defines “full-time employees” as “employees who work an average of thirty hours or more per week for such employer for such period of time as the commissioner establishes by rule.” Although final rules have not been published, the proposed rules provide that to qualify as a full-time employee, the employee must have worked an average of 30 hours or more per week in the most recent four weeks, any portion of which was in New York City, for a single employer.”
The law entitles only those employees who are eligible to receive “qualified transportation fringe benefits” under the Internal Revenue Code to be offered the option to purchase them. Consequently, the ordinance does not require employers to offer such pre-tax transportation benefits to independent contractors, partners and two percent shareholders of S-corporations. Should the Internal Revenue Code redefine the meaning of qualified transportation fringe benefits at some point in the future, that revision would apply to the New York City ordinance also.
Temporary help firms are specifically addressed in the proposed regulations , because their employees are generally sent to work at various locations and employers. According to the ordinance, a temporary help firm that provides a full-time employee to another organization will be the employer for purposes of complying with the statute, even if the organization/client does not have the requisite number of employees to fall within the statute’s coverage. In determining hours worked each week by an individual employed by a temporary help firm, the employer is required to aggregate the number of hours worked by the employee in the most recent four weeks at all placements.