Earlier this week, I reported in Murtha Cullina’s Labor and Employment Group News that the Second Circuit, which covers New York, Connecticut and Vermont, clarified that a single racist comment could support a claim for a discriminatory hostile work environment on the basis of race, where the comment constituted a “severe racial slur.” To read the full article, simply click on the following link: A Single Racist Comment Can Create a Hostile Work Environment.
Last week the EEOC released data for FY2016 indicating that the number of workplace charges filed with the EEOC increased for the second year in a row. According to the data, the EEOC received 91,503 charges of employment discrimination during FY 2016, which is a bit higher than the 89,385 charges it received in FY 2015. The breakdown of charges reflects that once again more charges were filed alleging retaliation than any other category. In FY 2016, there were 42,018 charges filed with the EEOC, which reflected 45.9% of all charges filed. The newly released data also provides information about LGBT claims, and show that the number of LGBT filings in FY 2016 (1,768) were more than double those filed in FY 2013 (808). The EEOC’s press release details other more specific information concerning charge resolutions and litigation.
It will be interesting to see the data for FY 2017 following the new administration’s EEOC priorities. Yesterday, President Trump named Victoria Lipnic as acting chair of the EEOC. Ms. Lipnic has been a Commissioner of the EEOC since 2010, and is well regarded by Democrats. From 2002 to 2009, she was Assistant Secretary of Labor for Employment Standards under President Bush. It is likely that she will ultimately be appointed chair because she is the only Republican Commissioner at the EEOC.
Over the last several years, federal courts have relied on the Federal Arbitration Act (“FAA”) in enforcing predispute mandatory arbitration agreements between employers and employees, which require an individual employee to waive his or her rights to assert employment related claims in court, in favor of arbitration. Such agreements, however, do not by themselves mandate that class or collective actions be submitted in court or arbitration. Consequently, employers have included class and collective action waiver provisions in such agreements; these waivers serve to prevent employees from bringing class and collective claims in any forum.
The National Labor Relations Board (“NLRB”) has opposed class and collection action waivers, and has held that requiring employees to agree to such waivers as a condition of employment violates the National Labor Relations Act (“NLRA”). Not surprisingly, there has been a split among the U.S. Circuit Courts of Appeal, with some disagreeing with the NLRB and others agreeing that class and collective action waivers violate the NLRA.
U.S. Circuit Courts Finding No Violation of the NLRA
On December 28, 2016, the New York State Department of Labor (“NYSDOL”) adopted final regulations scheduled to be effective, December 31, 2016, increasing the minimum salary thresholds for employees to be exempt from overtime under New York law. Although the NYSDOL had proposed the regulations in October 2016, they garnered little attention due to the proposed increase of the minimum salary threshold under the federal Fair Labor Standards Act, which was higher and scheduled to become effective on December 1, 2016. In light of a nationwide injunction granted by a federal court in Texas, the FLSA’s minimum salary threshold has not increased. Nevertheless, the injunction had no effect on the NYSDOL’s proposed increases under New York law, which took effect on December 31, 2016– three days after the adoption of the final regulations.
As a result, New York employers are still required to increase the minimum salary thresholds for the executive, administrative, and professional exemptions under New York law, although the increases are not as high as those that were proposed under the FLSA. The minimum salary thresholds for the overtime exemptions under New York law are now based on geographic location and in New York City, by employer size. These thresholds are set forth in the New York State Department of Labor’s Wage Order Summary for Miscellaneous Industry.
In addition, the minimum wage for employees has also increased, effective December 31, 2016. Although the basic minimum wage rate is now $9.70, in New York City large employers (of 11 or more employees) are required to pay a minimum hourly wage of at least $11.00, and small employers in New York City are required to pay $10.50 per hour. Employers in Long Island and Westchester are required to pay an hourly minimum wage rate of $10.00. The minimum wage rate is expected to increase each year until December 31, 2021. Information on these rates and tip credits is set forth in the Wage Order Summary for Miscellaneous Industry. The Hospitality Industry (including restaurants and fast food establishments) is subject to a separate Wage Order, and provides that as of December 31, 2016, Fast Food Workers are entitled to an $11.00 minimum wage in New York City, and a $10.70 minimum wage throughout the remainder of New York State. This information, including the effect of tips on the cash wage paid, is set forth on the Wage Order Summary for Hospitality Industry.
On December 6, the New York Council introduced several bills as part of New York City’s “Fair Work Week” initiative. The bills primarily apply to certain fast food employers, as well as some retail establishments. These bills may never be enacted into law, and are still subject to negotiation and debate:
- Int. 1384-2016 – Allows fast food employees to designate amounts from wages for contribution to a non-for-profit of their choice, and employers are required to remit such amounts.
- Int. 1387-2016 – Bans “on-call scheduling” for retail employees, and prohibits providing retail employees with less than 20 hours of work during any 14-day work period (not counting time the employee voluntarily takes off).
Yesterday the U.S. Department of Labor issued a response to the recent federal court decision that blocked the Department of Labor from implementing the Overtime Final Rule on December 1, 2016. We wrote about the decision earlier this week in Wage/Hour Alert: Court Issus Nationwide Block of Overtime Exemption Regulations. According to the Department of Labor’s statement on its website:
On November 22, 2016, U.S. District Court Judge Amos Mazzant granted an Emergency Motion for Preliminary Injunction and thereby enjoined the Department of Labor from implementing and enforcing the Overtime Final Rule on December 1, 2016. The case was heard in the United States District Court, Eastern District of Texas, Sherman Division (State of Nevada ET AL v. United States Department of Labor ET AL No: 4:16-CV-00731). The rule updated the standard salary level and provided a method to keep the salary level current to better effectuate Congress’s intent to exempt bona fide white collar workers from overtime protections.
Since 1940, the Department’s regulations have generally required each of three tests to be met for the FLSA’s executive, administrative, and professional (EAP) exemption to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (“salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (“salary level test”); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (“duties test”). The Department has always recognized that the salary level test works in tandem with the duties tests to identify bona fide EAP employees. The Department has updated the salary level requirements seven times since 1938.
At the request of 20 states, the federal District Court in Texas has issued a nationwide preliminary injunction blocking the U.S. Department of Labor’s rule increasing the minimum salary threshold for the “white collar” exemptions to overtime under the Fair Labor Standards Act (“FLSA”). The Department of Labor rule requires that effective December 1, the minimum salary level for the exemption to apply would be increased from $455 per week ($23,660 per year) to $912 per week ($47,892 per year), and then automatically thereafter. Our May 18, 2016 blog addressed this rule.
In State of Nevada, et al. v. U.S. Department of Labor, et al. (4:16-CV-00731), the United States District Court for the Eastern District of Texas, concluded that the states had demonstrated a likelihood of success on the merits of the lawsuit, and that a failure to preliminarily block the rule would cause irreparable harm to the states (and, presumably, private employers). The court credited the states’ arguments that the Department of Labor exceeded its authority in increasing the minimum salary threshold, because it disregarded the requirements of the “duties” test under the FLSA. The court also took issue with the Department of Labor’s automatic updating mechanism to increase the minimum salary threshold, because it does not require public notice and comment. The updating mechanism was intended to ensure that the minimum salary level would be linked to the 40th percentile of weekly earnings of full-time salaried employers in the country’s lowest wage region.
The court’s decision comes at a time when most employers have already addressed the increase in salary thresholds that were originally set to take effect in a few days. Nevertheless, the future viability of the Department of Labor rule, particularly the automatic updating mechanism, remains in question.
Salvatore Gangemi will be presenting “Harassment: The Difference Between Political Correctness and Obeying the Law” at the St. John’s University School of Law’s Fall 2016 Continuing Legal Education weekend program on Sunday, November 6, 2016. The two day program (November 5th and 6th) provides attorneys with 16 credits (3 Ethics, 6 Skills, and 7 Practice). Registration Form
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.”