In Massachusetts, individuals who are free from control and direction in performing their service, who perform their service outside the employer's usual course of business, and who customarily perform their service independently, are considered to be true independent contractors and not employees.
In 2004, Gangemi Law Firm, PC filed an action in New York State against FedEx Ground on behalf of its current and former New York delivery drivers, seeking a determination that the drivers were really employees, and not independent contractors. See Louzau, et al. v. FedEx Ground Package System, Inc., Civil No. 3:05-cv-00538 (NY). The civil action alleges that drivers were subject to unlawful wage deductions and were required to make "payments by separate transaction"--in violation of New York State Labor Law Sections 193(1) and (2). The matter is currently pending in federal court before the Multi-District Litigation Panel in Indiana.
The 97 page settlement agreement must still be approved by the court and could potentially cover thousands of female Novartis employees. Another $22.5 million was proposed for anti-discrimination policies, programs and training. Within nine months of the effective date
of the settlement agreement, Novartis will have to increase its Human Resource and Employment Relations staff--ensuring that there is one Employment Relations Investigator for every 1,000 Novartis employees. A Compliance Master will be appointed by the New York federal court to monitor Novartis's compliance with the settlement agreement's terms and conditions.
Plaintiffs' attorneys are seeking attorneys' fees of up to $38,125,000 and expenses in the amount of $2,000,000. Novartis's counsel has agreed not to object to such motion for fees and expenses. The Jury awarded compensatory damages to named individual class members and testifying witnesses in a range from $175,000 to $425,000. Such damages, however, are subject to Title VII's $300,000 statutory cap.
In rejecting the application of the outside sales exemption to overtime pay, the Second Circuit found it significant that the sales representative did not engage in any actual sales of pharmaceuticals. Rather, the representatives' duties involved visiting physicians with information about Novartis's products, and encouraging the physicians to prescribe the drugs to patients. Although the representatives provided drug samples to physicians, the representatives did not engage in any sales. The Second Circuit rejected the administrative employee exemption to overtime pay because the sales representatives did not exercise sufficient "discretion" and "independent judgment" to fall within the exemption.
Although the court's analysis focused on the requirements of the FLSA, it concluded that the laws of New York and California law were not materially different from the FLSA and, therefore, the sales representatives would be entitled to overtime pay under those laws as well. Although seemingly redundant, New York's overtime pay laws provide a six year statute of limitations, compared with a two year (three year for willful violations) statute of limitations under the FLSA. Consequently, more sales representatives would be covered under New York's law, and for a greater number of years. In re Novartis Wage and Hour Litigation (09-0437-cv)
]]>The WHD also provided guidance on the types of activities that are both permitted and not permitted in an internship setting. Typically, an internship for educational or training purposes will not create an employment relationship. An internship that is structured around an educational experience, primarily known as an internship for credit, will not create an employment relationship. When an intern receives training for skills that can be used in other employment settings, such activity will not create an employment relationship. Also job shadowing, or activities requiring close and constant supervision, will not create an employment relationship. If the intern, however, is performing the productive work of the employer (e.g., filing, performing clerical work, etc.), substituting for, or augmenting the regular workforce, or requires the same level of supervision as the employer’s workforce, such activities would create an employment relationship.
With the current state of the economy, and historically high unemployment levels, employers are offering more internship opportunities with their businesses. The WHD plans to continue to review the need for guidance in this area to ensure employers follow the WHD’s criteria for unpaid internships.
The New York Department of Labor likewise scrutinizes internships to make sure that they are not just unpaid jobs. New York law requires that employees be paid the minimum wage for hours worked, as well as overtime for hours worked in excess of 40 in a given workweek.
Abusive conduct includes verbal abuse (derogatory remarks, insults, verbal or physical conduct) and conduct that sabotages or undermines an employee’s work performance. An abusive work environment is one in which the conduct is so severe that the employee suffers physical or psychological harm (such as loss of sleep, severe anxiety, depression, or post-traumatic stress disorder).
The bill provides for affirmative defenses that allow employers to defend against a cause of action for an abusive work environment. The employer is entitled to the defense when it can prove that it exercises reasonable care to prevent and correct the abusive conduct, and the plaintiff unreasonably fails to take advantage of corrective or preventive opportunities. Where the employee suffers an adverse employment action, such as termination or demotion, however, the employer will not be entitled to the affirmative defense.
But, where the employer makes a negative employment decision which is consistent with its legitimate business interests, the employer will be entitled to prove the affirmative defense. The bill provides for a one-year statute of limitations, emotional distress damages, and punitive damages. The bill also authorizes a cause of action for retaliation.
New Jersey and Connecticut had also introduced bills similar to New York; however, Connecticut’s bill failed to make it out of the 2010 legislative session and will have to be reintroduced in 2011. It is anyone’s guess whether New York’s bill will pass in the State Assembly. And, even if it does, there is no guarantee that Governor Patterson will sign this piece of legislation (he vetoed the “study only” bill, passed both the Assembly and Senate in 2009).
We will keep you informed of this and other developments in New York law.
]]>The Department of Labor found that certain job duties were typical for a mortgage loan officer. These job duties included responsibilities such as receiving internal leads, collecting required financial information from customers, running credit reports, assessing loan products, compiling customer documents, and finalizing documents for closings. Under the FLSA's administrative exemption, "the employee's primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer's customers."
The Department of Labor went on to analyze the job responsibilities of a typical mortgage loan officer. Case law and the regulations were reviewed, and a determination was made that a mortgage loan officer's primary duty is that of making sales. Any work performed incidental to, or in furtherance of, sales would also be considered sales work according to the Department of Labor. The Department of Labor reasoned that collecting financial information from customers and explaining to potential customers what their terms and options would be, constituted the "production work of an employer engaged in selling or brokering mortgage loan products." Selling or brokering mortgage loan products do not "relate to the internal management or general business operations of the company." Such duties involve carrying out the employer’s business on a day-to-day basis.
To the extent that the Department of Labor opinion conflicted with earlier opinions or guidance, those earlier opinions were withdrawn.
The administrative exemption also exists under the New York minimum wage and overtime laws, although what constitutes an administrator for purposes of the exemption is slightly different, and in some respects, substantially broader. Consequently, it is likely that the New York Department of Labor or New York courts would find that a mortgage loan officer was not exempt from New York's overtime and minimum wage requirements.
]]>Gorzynski complained to her supervisor, and another manager, about the gender and age discrimination, and she was subsequently put on 60 days probation. During this time, Gorzynski also witnessed her supervisor exhibit behavior, and make comments, that were racially offensive.
Gorzynski, and several co-workers, made complaints of race discrimination. Approximately one month after she complained about race discrimination, and four months after she alleged age and gender discrimination, Gorzynski was terminated and replaced by a 22-year-old co-worker with a history of disciplinary problems.
Typically, when the harasser is a supervisor, the harassing conduct is automatically imputed to the employer. The employer, however, is entitled to raise the Faragher/Ellerth affirmative defense. The Faragher/Ellerth affirmative defense consists of two elements. The first, is that "employer exercised reasonable care to prevent and correct promptly any harassing behavior." The second is that the plaintiff "unreasonably failed to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise."
Jet Blue moved for summary judgment dismissing the case on the ground that Gorzynski had taken advantage of Jet Blue's internal harassment complaint procedures. The lower court agreed with Jet Blue and dismissed the case, finding that that Gorzynski should have complained to other members of management or to its human resources department.
The United States Court of Appeals for the Second Circuit, which covers New York, Vermont and Connecticut, reversed the lower court's decision. The Second Circuit found that Jet Blue was not entitled to the Faragher/Ellerth affirmative defense. The Court found that the Gorzynski was not required to go from "manager to manager" until she found someone to address her complaints. A harassed employee is not required to exhaust every avenue available to her, especially when doing so would be "ineffective or antagonistic." There may be instances where it would be unreasonable for an employee to only complain to the harasser, but Gorzynski's actions, under these circumstances, were not unreasonable. The Second Circuit further held that a determination of what is "unreasonable" should be made on a case by case basis and upon the facts and circumstances particular to that case.
The Second Circuit's decision relates to sexual harassment violations under federal law-- Title VII of the Civil Rights Act of 1964. The standard of liability is quite different under the New York City Human Rights Law, which automaticaly imposes liability on the employer if the harassment is perpetuated by a supervisor or manager. Even where the employer has a sexual harassment complaint policy, under New York City law an employer will not be completely released from liability. At best, under the New York City law such a policy can be considered by a jury in determining the amount of damages the employee would be entitled to receive. Consequently, employees working in New York City have substantially more protection against sexual and other types of harassment, than employees working throughout New York State.
]]>The FLSA requires employers to pay non-exempt employees one and a half times their regular rate of pay for any hours worked in excess of 40 hours during any given workweek. A "Professional" is exempt from the FLSA's overtime provision if his or her work requires "advanced knowledge" (i.e., work that is intellectual in character), if the advanced knowledge is in a field of science or learning, and the "advanced knowledge was acquired through a prolonged course of specialized intellectual instruction."
The Second Circuit held that the professional exemption applied to employees in positions that require "knowledge that is customarily acquired after a prolonged course of specialized, intellectual instruction or study." The professional exemption will not apply to a job that does not require this type of knowlege, regardless of the job duties performed. The court also took into consideration the fact that no employee in plaintiff's job had needed advanced education or instruction. Ultimately, the court held that Mr. Young was not an exempt professional under the FLSA, and was entitled to overtime compensation.
]]>FY2009 also showed an increase in investigator producitivity. In FY 2009, Investigators resolved the second highest number of charges, per investigator, in the past 20 years. Ultimately, the EEOC collected approximately $376 million in monetary relief for victims of discrimination and resolved 85,980 charges nationwide in FY2009.
Historically the EEOC has been both underfunded and understaffed, which has affected its ability to timely handle the record numbers of charges filed with the Commission each year. Despite a hiring frenzy by the EEOC in FY2009, expect the backlog in the resolution of charges to continue.
]]>A worker is employed in a bona fide administrative capacity if he or she performs work "directly related to management policies or general business operations" and "customarily and regularly exercises discretion and independent judgment." 29 C.F.R. § 541.2(a). However, production or sales-related work does not constitute "administrative" type work sufficient to trigger the exception. The Second Circuit reversed the district court, and found that Whalen was employed in a "production" and not administrative capacity.
According to the court,
we have drawn an important distinction between employees directly producing the good or service that is the primary output of a business and employees performing general administrative work applicable to the running of any business.]]>
Under Title VII, a plaintiff is not required to prove that the discriminatory basis was the "but for" reason for the adverse employment action. Rather, a plaintiff suing under Title VII only need prove that the discriminatory basis was a "motivating" reason for the adverse action, which means that a plaintiff can still prevail under Title VII even if there are other reasons for the adverse action taken.
The Supreme Court in Gross distinguished age discrimination matters from other matters, based upon the different statutory language used in the ADEA, which, according to the Supreme Court, did not appear to support a "motivating factor" standard.
The Protecting Older Workers Against Discrimination Act would overrule Gross by amending the ADEA to state that a plaintiff could prevail under the ADEA by demonstrating that age was a "motivating factor" for the complained of practice.
Although it appears that the amendment will become law, for the time being the decision in Gross should have no effect on age discrimination cases asserted under the New York State and New York City Human Rights Laws. Unlike federal law, New York State's and New York City's laws do not distinguish between different types of discrimination. Consequently, although New York state and federal courts look to federal law in interpreting New York State's and New York City's anti-discrimination laws, nothing in the New York State and City laws would support the interpretation applied in Gross.
The Protecting Older Workers Against Discrimination Act was introduced in the House and Senate as H.R. 3721/ S. 1756.
]]>The amendment does not apply retroactively. Rather, the notice must only be provided to employees hired on or after October 26, 2009.
You can review the amendment by clicking here: New York Labor Law Amendment.
]]>According to an article on forbes.com, "Unpaid internships can leave employers open to increased liability by financially binding them to students' universities if liabilities arise, such as workers compensation obligations. At present, one in five internships in the U.S. has an illegal compensation structure."
]]>According to the court, Manhattan Apartments' potential liability depended upon whether Brooks was its hiring agent, or apparent hiring agent, when Halpert was interviewed for the position. The court determined that there were issues of fact precluding dismissal of the case because it was not clear whether Brooks was acting on his or Manhattan Apartments' behalf.
Consequently, the court reversed the decision of the District Court (Southern District of New York) and reinstated the claim.
Although the case involves age discrimination, its reasoning applies equally to all types of discrimination claims.
]]>The amendment appears to shift the burden of proof on this point directly upon the employer. Thus, in a case in which an employer is found to have violated New York's Payment of Wages law, an employer will be required to pay liquidated damages, unless it can show that it acted in good faith and believed that its nonpayment of wages complied with the law.
Clearly, this amendment benefits employees, who will no longer need to demonstrate willfulness in order to recover liquidated damages under New York's Labor Law.
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