A Shield or a Sword? The Role of Performance Evaluations in Employment Litigation

By Zoe Bekas on Posted in Employment Counseling & Workplace Claims Prevention, Employment Discrimination Harassment & Retaliation, Employment Investigations & Audits, Employment Litigation

Performance reviews are intended to provide feedback and identify opportunities for growth. They can also help an employee understand how well the employee is meeting the employer’s expectations. But make no mistake – the significance of performance reviews does not always cease at the time of termination. If the employment relationship goes south, performance reviews can develop a second life in subsequent litigation.

After an employee is terminated, it is not uncommon for an employee to claim that the employer’s proffered reason for termination was pretext, and the real reason for the termination was unlawful discrimination or retaliation. This argument—that the employer’s stated reason for termination is a cover up for an unlawful motive—carries significantly less weight when the employer can point to the employee’s negative performance evaluations in support of the termination. Performance evaluations are particularly effective in legitimatizing the employer’s stated reason for termination if the evaluations showed a decline in performance over time and culminated in termination. Continue Reading

Supreme Court Slams Public Sector Union Rights

By Brittany Buccellato on Posted in Employment Litigation, Labor Relations

The Supreme Court has declared that mandatory union dues for public employees are unlawful, overturning 40 years of precedent. In Janus v. American Federation of State, County, and Municipal Employees, the Court ruled that requiring public sector employees who are not union members to pay “fair share” or “agency fees” to unions that represent them in collective bargaining violates the First Amendment.

In so doing, it overturned its 1977 decision in Abood v. Detroit Board of Education, which held that such fees were constitutional, and which withstood four prior challenges in as many decades.

The case was brought by Mark Janus, an Illinois state child support specialist whose unit is represented by the American Federation of State, County, and Municipal Employees. Mr. Janus, however, did not join the union because he does not agree with many of its positions. Specifically, he believes that many of the union’s policies were bankrupting the state. Under Illinois law, non-union members whose unit is in a union may be required to pay “agency fees” — partial dues to cover the union’s cost of negotiations and other functions. In 1977, the Supreme Court drew a distinction between such mandatory agency fees and other voluntary union dues, which could be used for lobbying or other political activities. The Supreme Court, then led by Warren Burger, found that the government’s interest in helping unions prevent employees from taking advantage of the benefits offered by unions without having to pay their fair share of the costs outweighed the employees’ free speech rights.

Mr. Janus challenged this law, claiming that paying these fees violates the First Amendment by forcing him to fund policies he opposes.

In finding that mandatory agency fees violate the First Amendment, the Supreme Court rejected the rationale in Abood that: (i) the fees promote labor peace by avoiding the disruption that would result if employees in the same unit were represented by more than one union and (ii) the fees avoid the risk of free riders. The Court found that the fears regarding labor peace were unfounded and the benefits to a union of being the exclusive representative outweigh any extra burden of representing non-members.

This ruling only applies to public sector employees and, as a result, it does not have a direct impact on unions in the private sector. The effect in the public sector, however, may be significant.  Twenty-two states have fair share laws permitting agency fees like those required of Mr. Janus. The Janus decision effectively means that public employees must consent prior to paying union fees – to opt in, rather than having to opt out. The other 28 states are “right to work” states, where state laws prohibit unions from charging nonmembers these sorts of fees.

The Janus decision will have an obvious financial impact on unions in the public sector in those states as employees cease paying agency fees and unions lose a secure source of financial support.  Moreover, it may lead to public employees opting out of union membership altogether, and unions in the public sector needing to work harder to retain current members and gain new ones.

States may also step in to protect unions in the public sector in the wake of this decision.  For example, in anticipation of the decision in Janus, New York passed legislation providing that a union’s duty of fair representation to a public employee whose unit is in a union but who is not a union member is limited to the negotiation and enforcement of the collective bargaining agreement.  The union is not required, for example, to represent a non-union member in the grievance and arbitration process.  Other states may decide to follow New York’s example.

Akerman Labor and Employment attorneys will continue to monitor the impact of the Janus decision.

Congress and the Trump Administration Cannonballs into the Tip Pool

By Vincent Avery on Posted in Employment Counseling & Workplace Claims Prevention, Wage & Hour

Buried in the 2,232 page omnibus budget bill recently signed by President Trump was an important change regarding the use of tip pools. Employers who do not take a tip credit are not required to police their employees to determine if their tip pool includes “back of the house” employees, which would have previously been unlawful. However,  an employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.

This amendment to the Fair Labor Standard Act represents a significant change. Prior to the amendment, restaurants were required to ensure that the only employees who participate in a tip pool – an arrangement where the waiters, bartenders, and other employees who receive tips directly from the customers “pool” their tips with other employees at the restaurant – were those who “customarily and regularly” provide customer service and receive at least $30 per month in tips (e.g., wait-staff, bartenders, hosts, bussers, bar-backs, runners, etc.).  Due to a 2011 regulation during the Obama administration, this was true regardless of whether the employer took a “tip credit” towards the minimum wage for the employees who received tips (federal law permits employers in certain industries to pay employees as much as $5.12/hour below minimum wage so long as they receive tips in excess of that amount to cover the difference), as well as employers who do not take the tip credit. In other words, under the Obama-era regulations, even those employers who did not take a tip credit were required to ensure that tip pooling arrangements at their restaurants did not include employees outside of the chain of employees who provide direct customer service. In practice terms, this means that tip pooling arrangements that included cooks, dishwashers or other “back of the house” employees would be deemed to violate the FLSA even if the employer was not taking the tip credit for any of its employees. Continue Reading

New Paid Leave Laws Extend to Domestic Violence

By Sasha B. Segall on Posted in Employee Handbooks & Policies, Medical & Other Leaves

A new breadth of employee laws are sweeping the nation, and this time they are directed at providing employees paid leave to take care of themselves or a loved one in a domestic violence situation.

The United States has a very serious domestic violence problem. On average, nearly 20 people per minute are physically abused by an intimate partner in the United States. During one year, this equates to more than 10 million women and men.

To help combat these horrifying statistics, laws have been, and are continuing to be, enacted all over the country to grant domestic violence and sexual assault victims leave to recover, take steps to escape the situation, or seek legal remedies. Previously most of these state laws only permitted employees to take unpaid leave. However, increasingly, the new wave of paid sick leave laws are being amended to include paid safe leave. In addition, states that do not already have paid sick leave are starting to pass paid sick and safe leave as a joint measure.

A case in point: the NYC Paid Safe and Sick Leave Law took effect last month. NYC made headlines when it became one of the first major cities on the east coast to permit employees to take up to 40 hours a year of paid sick leave. NYC now permits these hours to be used for paid safe leave as well. Under the NYC law, employees are permitted to use this time to seek legal and social services assistance or take other safety measures if the employee or a family member may be the victim of any act of domestic violence or unwanted sexual contact, stalking, or human trafficking. Continue Reading

The Challenges of Poor FMLA Certifications

By Christopher J. Eby on Posted in Medical & Other Leaves

Did that FMLA certification arrive illegible? Is the information provided too vague? Are the responses to the questions internally inconsistent? Do you suspect that it wasn’t filled out by a healthcare provider at all?

Employers navigating the FMLA maze – especially those who outsource the function – may not get the information they need in the certification. Many simply accept what they receive and designate the leave as FMLA without sufficient documentation. But that can hamper an employer’s legitimate efforts to work with an employee who has a medical condition down the road. Yes, it’s challenging, but it’s worth making sure the FMLA documentation you receive meets the statutory requirements. Continue Reading

Conditioning Severance on Post Employment Obligations: Tricky Business

By Christopher R. Lepore on Posted in Employee Handbooks & Policies, Employment & Consulting Contracts, Employment Counseling & Workplace Claims Prevention, Employment Litigation

Employers often want to be sure that departing employees won’t disclose confidential business information or make disparaging remarks about the company, and therefore include such obligations in severance agreements. But there are risks, unless the provisions are carefully tailored to account for recent legal developments.

For example, in Baylor Univ. Med. Ctr., an Administrative Law Judge found that Baylor violated the National Labor Relations Act by offering an employee $10,000 severance in exchange for executing a severance agreement with problematic clauses. The Act protects employees who engage in protected concerted activity to address work-related issues. The National Labor Relations Board provides these examples of protected concerted activity: “talking with one or more co-workers about your wages and benefits or other working conditions, circulating a petition asking for better hours, participating in a concerted refusal to work in unsafe conditions, and joining with coworkers to talk directly to your employer, to a government agency, or to the media about problems in your workplace.” Continue Reading

#EqualPayMeToo

By Zarra R. Elias on Posted in Employment Counseling & Workplace Claims Prevention, Employment Discrimination Harassment & Retaliation, Employment Investigations & Audits, Employment Litigation

The #MeToo movement not only has highlighted harassment in the workplace; it also has prompted courts and lawmakers to take a closer look at pay equity.

The EEOC warned employers about “[e]nsuring equal pay protections for all workers” when it identified this area as one of its priorities in its Strategic Enforcement Plan for Fiscal Years 2017-2021, and it is following that warning with enforcement actions. Last month, the EEOC entered into a $2.66 million settlement with the University of Denver’s Sturm College of Law following allegations that female law professors were paid less than their male counterparts. The settlement required the law school to, among other things, revise its EEO and discrimination policies, hire an independent labor economist to conduct an annual pay equity study, and hire an independent consultant to evaluate the law school’s compliance with its EEO policies and recommend modifications to the law school faculty compensation’s system as necessary. And in March of this year, a North Carolina federal court approved the Family Dollar Store’s bid to end a lengthy lawsuit by approving a $45 million settlement that the company reached with female store managers who alleged that the company had paid them less than similarly situated male store managers. Continue Reading

U.S. Supreme Court Rules That Class Action Waivers Are Enforceable

By Jeffrey A. Kimmel and Paul J. Rutigliano on Posted in Employment & Consulting Contracts, Employment Counseling & Workplace Claims Prevention, Employment Litigation

Employers may require employees to enter into arbitration agreements that waive such employees’ ability to participate in a class or collective action lawsuit, the U.S. Supreme Court ruled this week. In a long-awaited decision that represents a significant victory for employers, the Court in Epic Systems Corp. v. Lewis held that such agreements do not violate the National Labor Relations Act and are enforceable.

The employees in the case argued that the NLRA statutorily prevents employees from waiving their right to assert claims as a class or collectively, thus falling within the “saving clause” of the Federal Arbitration Act (FAA), which permits courts from enforcing arbitration agreements that are illegal. At the outset, Justice Neil Gorsuch, writing for the Court’s majority in a 5-4 decision, rejected the employees’ contention, reasoning that the “saving clause” recognizes only defenses that apply to “any” contract, such as fraud, duress or unconscionability. In reaching this holding, the Court emphasized the FAA’s mandate that courts generally enforce, not override, the terms of arbitration agreements. Continue Reading

SOS: Students Stuck Outside

By Rachel L. Perez on Posted in Immigration Planning & Compliance

A new and unexpected policy change will cause problems for students who plan to process visa applications from abroad. Foreign nationals who overstay their student visas could be barred from re-entering the U.S. under a draft policy memorandum issued by the U.S. Citizenship and Immigration Services (USCIS) on May 11. The new policy, which will supersede existing policy that’s been in place for nearly two decades, tightens rules for foreign students and exchange visitors by changing how immigration authorities calculate “unlawful presence” in the United States. The proposed policy will count significantly more days as time illegally spent in the United States, and will result in a surge of students violating their terms of admission and becoming illegally present in the United States. The policy is set to take effect on August 9, 2018. Continue Reading

DOL Again Offers Opinion Letters to Employers

By Megan M. Kokontis on Posted in Employment Counseling & Workplace Claims Prevention, Medical & Other Leaves, Wage & Hour

Employers will once again have another source of guidance on wage and hour issues from the U. S. Department of Labor, which last month reinstated the practice of issuing opinion letters. The DOL stopped issuing opinion letters during the Obama administration, and instead switched to a practice of offering Administrator’s Interpretations (AI), which have broader applicability. Employers, who can rely on opinion letters to establish that they acted in good faith in cases arising under Fair Labor Standards Act, were discouraged by the move. However, after Trump took office last year, the DOL announced that it would resume the practice of issuing opinion letters, and in fact, reinstated 17 letters that were written but never sent at the end of the George W. Bush administration.

The DOL has now issued its first set of opinion letters since 2009. The letters provide opinions on three topics – whether 15-minute rest breaks requested by a doctor are covered by the FMLA and are compensable under the FLSA; whether travel time under certain conditions for hourly technicians is compensable under the FLSA; and whether lump-sum payments from employers to employees are earnings for garnishment purposes under Title III of the Consumer Credit Protection Act.  Continue Reading

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