US Supreme Court Gives Green Light For Employers To Use Offers Of Judgment To Moot FLSA Collective Actions

Today the US Supreme Court issued its long-awaited opinion in Genesis Healthcare v. Symczk. In the case, the Court held that employers could effectively end collective action lawsuits under the Fair Labor Standards Act (FLSA) by agreeing to pay the named plaintiffs in those lawsuits whatever they claim they are owed. The Court held that because the named plaintiff was made completely whole by the employer’s offer her individual claim was moot, and because the named plaintiff’s claim was moot the entire collective action litigation was dismissed. This decision provides a helpful tactical weapon for employers that face the prospect of long and expensive collective action litigation.

How To “Pick Off” A Big FLSA Collective Action Lawsuit
Laura Symczk was employed as a nurse for Genesis, and was non-exempt under wage laws like the FLSA. She filed an FLSA “collective action” against Genesis claiming that it unlawfully failed to pay her and other nurses for meal breaks in which she had to work (the FLSA requires that employers pay employees for all their work time, including during meal breaks when the employee is not relieved of all work duties). Very early in the litigation, Genesis Healthcare issued what is called an “offer of judgment” under Federal Rule of Civil Procedure (FRCP) 68, offering to pay Symczk everything she claimed she was owed for her own unpaid work time (about $7,500, plus her attorney fees to date). The trial court then dismissed her entire collective action lawsuit, finding that because Symczk was made completely whole by Genesis’ offer and no others had yet joined the collective action, the case was “moot.”

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OSHA Issues Interim Final Rules on Whistleblower Protection Provisions Under ACA

The Occupational Safety and Health Administration (OSHA) issued an interim final rule and request for comments regarding procedures for handling employee whistleblower complaints under the Affordable Care Act (ACA), Section 1558. This part of the ACA added a new Section 18c to the Fair Labor Standards Act (FLSA), which protects employees from retaliation for exercising certain rights under the ACA, including (1) receiving a federal tax credit or subsidy to purchase insurance through the employer or a future health insurance exchange, (2) reporting a violation of consumer protection rules under the ACA (which, for instance, prohibit denial of health coverage based on preexisting conditions and lifetime limits on coverage), and (3) assisting or participating in a proceeding under Section 1558.

The interim final rule states the time frames and procedures for bringing a whistleblower complaint under Section 18c and covers the investigation, hearing, and appeals processes. An employee has 180 days from the date of the alleged retaliation to bring a whistleblower complaint to the Secretary of Labor. Where a violation is found, remedies can include reinstatement, compensatory damages, back pay, and reasonable costs and expenses (including attorneys’ fees). If the employee brought the complaint in bad faith, an employer may recover up to $1,000 in reasonable attorneys’ fees.

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Washington Court Affirms That Anti-Retaliation Laws Protect HR Employees

The Washington Court of Appeals recently determined that state anti-discrimination laws prohibit retaliation against human resources and legal professionals who oppose discrimination as part of their normal job duties. The court also declined to extend the same actor inference, a defense against discrimination claims, to retaliation claims.

Lodis worked at Corbis Holdings as a vice president of human resources. As part of his normal job duties, he warned Corbis’s CEO, Shenk, that Shenk’s age-related comments could give rise to liability for age discrimination. Around the same time, Shenk promoted Lodis but almost immediately gave him a negative performance review, placed him on probation, and then ultimately fired him. 

Lodis sued under the Washington Law Against Discrimination (WLAD), claiming that Corbis retaliated against him for opposing Shenk’s comments. The trial court concluded that Lodis was not engaged in protected activity “because he was simply performing his job duties by warning Shenk” about potential discrimination. The court of appeals disagreed.

Step Outside Rule

Corbis urged the court to adopt the “step outside” rule, which governs federal cases under the Fair Labor Standards Act (FLSA). The rule requires an employee to step outside her normal job duties before receiving the FLSA’s protection against retaliation.  

The court declined to adopt the rule for two reasons. First, the court believed that the language of the WLAD could not support a step outside rule. Second, the court concluded that policy considerations favored rejecting the rule. “[A]dopting the step outside rule,” the court said, “would strip human resources, management, and legal employees of WLAD protection.” The court noted the importance of protecting these employees because they are often the most able to oppose workplace discrimination. 

Same Actor Inference

Corbis also argued that the court should apply the same actor inference to dismiss Lodis's retaliation claim.  The same actor inference arises when an employee is both hired and fired by the same decision-makers in a short period of time.  Courts may then infer that the employee was not fired for any attribute that the decision-makers were aware of when they hired her.  Corbis contended that Shenk promoting Lodis despite the warning about potential discrimination proved that he did not retaliate when he later fired Lodis.

The court, however, refused to extend the same actor inference to retaliation claims.  The court was concerned that extending the defense would allow employers to simply promote employees before terminating them to avoid valid retaliation claims.

Thus, Lodis v. Corbis Holdings, Inc. limits the same actor defense to traditional discrimination cases. And perhaps more importantly, the case reaffirms that the WLAD protects all employees from retaliation.

Recordkeeping: The Often Overlooked Element of FMLA Compliance

Most employers grapple with the better-known aspects of the Family and Medical Leave Act (FMLA), such as determining whether an employee’s illness constitutes a serious medical condition, obtaining required certification or providing adequate coverage for workers on intermittent leave. All too often employers focus on the leave itself and breathe a sigh of relief when notice is provided confirming the dates of leave or when the employee has resumed his or her usual schedule. But an employer’s compliance with federal law includes the obligation to maintain adequate records related to the leave. Failure to do so can have significant consequences.

What Records Must You Keep?

FMLA recordkeeping requirements can be found in a single regulation, 29 C.F.R. § 825.500. That regulation requires employers to keep and preserve records in accordance with the recordkeeping requirements of the Fair Labor Standards Act (FLSA).  Records must be retained for no less than three years. Although no particular order or form is required, the records must be capable of being reviewed or copied. 

Covered employers with eligible employees must also maintain records that include basic payroll and data identifying the employee’s compensation. Failure to maintain accurate records can have significant consequences for employers, who have the burden of establishing eligibility for leave. Accuracy is important:  for example, the regulations demand that records document hours of leave taken in cases of leave in increments less than a full day.  Lack of suitable records documenting when leave was taken can also doom an employer’s defense to claims for leave. Special rules apply to joint employment and to employees who are not covered by or are exempt from the FLSA.

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Supreme Court Declares Pharmaceutical Sales Reps Exempt From Overtime

In Christopher v. SmithKline Beecham, a 5-4 decision announced Monday afternoon, the U.S. Supreme Court ruled that pharmaceutical sales representatives are exempt from the overtime requirements of the federal Fair Labor Standards Act ("FLSA") under the outside sales exemption. The Court ruled that the Department of Labor’s interpretation of the exemption, raised for the first time in its brief before the Court, was not entitled to deference. If your business treats some of its employees as exempt from overtime (whether on the basis of the outside sales exemption or another exemption), the case serves as a good reminder to reexamine their job duties to make sure that they satisfy the terms of the applicable exemption.

Read the entire alert here.

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When to Pay Summer Interns: FLSA Guidance You Need to Know

It's that time of year again, here's our post from last year from Matt Durham on this perennial summer concern for employers . . .

Certain things have become the recognizable signs of spring. Budding leaves. Flowers. Chirping birds. And summer intern resumes. Especially during a slow or recovering economy, HR professionals are likely to receive many resumes from eager students or recent graduates hoping to work as interns in order to gain valuable experience and networking opportunities. Often, intern candidates offer to work for nothing in exchange for the chance to learn about a job or industry.

Of course the idea, however enticing, of free labor should raise red flags. In fact, the United States Department of Labor (“DOL”) has made it clear that, unless specific criteria are met, student “interns” working at for-profit companies are actually student “employees,” subject to the minimum wage and overtime requirements of the Fair Labor Standards Act (“FLSA”). The DOL has identified the following six criteria for determining whether an individual meets the test for an unpaid intern:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Only if an internship program meets all of these requirements can participants be considered unpaid interns. And as you can imagine, meeting all of these requirements can be challenging. For example, the internship program must be structured around classroom or academic experience rather than around the employer’s business operations. For this reason, compliant programs are often developed and overseen by colleges or universities, which then give academic credit for participation. Moreover, the more the interns perform productive work for the employer (as opposed to job shadowing or similar activities), the more likely they will be deemed employees, entitled to minimum wage and overtime under the FLSA. You can find the DOL’s fact sheet on internship programs here.

At the end of the day, private employers seeking to benefit directly from eager students or graduates willing to work for the experience will find it difficult to meet DOL requirements. On the other hand, a company willing to provide work experience in order to be a good corporate citizen or to build relationships with schools or students, can structure an unpaid student intern program to meet those goals and comply with the law.

 

Are Remedies Available to Working Moms Who Experience "Lactation Discrimination"?

For many new moms returning to work after the birth of a child, pumping breast-milk is considered to be a necessary evil.  Necessary because pumping ensures that these mothers’ babies can continue to experience the many benefits of breast-milk, and helps the mothers to maintain their milk supplies, relieves painful engorgement, and prevents potentially serious medical conditions like mastitis.  Evil because, well, it is not exactly fun to do, especially if the workplace is not supportive.  The U.S. Centers for Disease Control reports that full-time work for new mothers is “significantly associated with lower rates of breastfeeding initiation and shorter duration,” due primarily to workplace barriers such as “a lack of flexibility for milk expression in the work schedule, lack of accommodations to pump or store breast-milk, concerns about support from employers and colleagues, and real or perceived low milk supply.”  Click here to view CDC's report.

One mother recently faced with this predicament is Donnicia Venters, who alleged in a federal lawsuit that her employer fired her while she was on maternity leave when she inquired about using a back room in the office to pump milk upon her return from leave.  The EEOC brought suit on Ms. Venters’ behalf in the United States District Court for the Southern District of Texas, asserting sex discrimination claims against the employer under Title VII.  See EEOC v. Houston Funding II, Ltd., Case No. 4:11-cv-02442 (S.D. Tex.).  Title VII makes it “an unlawful employment practice for an employer . . . to discharge any individual . . . because of such individual’s . . . sex.” 42 U.S.C. § 2000e-2(a)(1).  The Pregnancy Discrimination Act amended Title VII to state that “‘because of sex’ … include[s] … because of … pregnancy, childbirth, or related medical conditions ….” 42 U.S.C. §2000e(k).

United States District Judge Lynn N. Hughes (who is a male, for the record) recently granted summary judgment in favor of the employer, ruling that “[f]iring someone because of lactation or breast-pumping is not sex discrimination.”  In a rather conclusory fashion, the court reasoned that “lactation is not pregnancy, childbirth, or a related medical condition” and that any “pregnancy-related conditions” experienced by Ms. Venters ended on the day she gave birth to her daughter.  To see the full opinion click here.

In the few short days since it has been issued, this ruling has garnered much critical attention.  As many commentators have pointed out—and this seems quite obvious—only women can lactate, and lactation does not usually happen in the absence of childbirth.  The ruling therefore strikes many as illogical—how can firing someone for lactation or breast-pumping not be because of sex or a childbirth-related medical condition?  The EEOC has stated that it is considering whether to appeal the ruling.  The issue therefore remains far from settled. It remains to be seen whether the appellate court, or other judges who might be faced with this issue, will come to a different conclusion than Judge Hughes did.

Pumping mothers also have a new legal protection that Ms. Venters did not have when she gave birth to her baby in 2008.  Effective March 23, 2010, the Patient Protection and Affordable Care Act (also known as the Healthcare Reform Act) amended the Fair Labor Standards Act (FLSA) to require employers to provide a nursing mother break time to pump.  Specifically, covered employers must provide reasonable break time for an employee to express breast-milk for her nursing child for one year after the child’s birth, each time the employee has need to express milk.  See 29 U.S.C. § 207(r).  Employers must also provide a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast-milk.  Id.

There are, of course, several limitations to this protection.  The FLSA amendment does not require employers to pay employees for such break time.  Id.  The requirements also do not apply to employers with less than 50 employees, if such requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.  Id.

Under this amendment, nursing mothers who experience “lactation discrimination” in the workplace might now have a remedy—albeit a limited one—under the FLSA.  The FLSA makes it illegal for an employer to “discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the FLSA].”  29 U.S.C. § 215.  In most jurisdictions, this provision applies to any employee who complains about an FLSA violation, either formally to an administrative agency, or informally to the employer.  A nursing mother who complains about her employer’s failure to provide reasonable break time for her to pump would therefore be protected by this anti-retaliation provision in the FLSA.  As the language of this anti-retaliation provision makes clear, however, the employee must actually complain to the employer in order to be protected.  Thus, if Judge Hughes’ opinion turns out to be the prevailing view and lactation is not protected under the Pregnancy Discrimination Act or Title VII, there is still a gap in protection, even with the FLSA amendment.  Nursing mothers who are simply fired for pumping at work before ever complaining about an employer’s FLSA violation would have no remedy.  In this scenario, a legislative amendment to Title VII, or legislation at the state level, might be the only potential source of protection.

In fact, many states have attempted to fill the gaps in protection for nursing mothers by passing their own legislation. A complete list of state laws enacted to protect breastfeeding can be found hereOf the states where Stoel Rives has offices, California, Oregon, and Minnesota each have laws that require employers to provide breaks for women to breastfeed or pump. To the extent these state laws are more robust than the FLSA amendment, they are not preempted.  see 29 U.S.C. § 207(r)(4).

DOL Demonstrates Commitment to Wage and Hour Violations with Launch of New "DOL-Timesheet" App

In a highly visual public expression of its commitment to wage-and-hour violations, and to encouraging employees to file wage and hour complaints, the Department of Labor’s Wage and Hour Division entered the world of Smartphone apps when it recently launched its own “DOL-Timesheet” app for the iPad and iPhone. At first glance, the DOL-Timesheet App may not appear to be much more than the contemporary technological equivalent of a pad of paper, pencil, and some simple math. But not only does the DOL-Timesheet app track an employee’s hours and wages, it also: (1) contains a glossary of wage and hour terms; (2) informs workers about their rights under the Fair Labor Standards Act (FLSA); (3) contains easy to use links to contact the DOL’s Wage and Hour Division via phone or email; and (4) specifically instructs employees on how to file a wage violation complaint.

 

With all it does, there are still significant shortcomings and problems with the DOL-Timesheet app. The DOL candidly admits that the app does not address tips, commissions, bonuses, deductions, holiday pay, pay for weekends, shift differentials and pay for regular days of rest. Additionally, the potential for human error or abuse creates inherent problems with reliability which may call into question the apps utility in a court of law. For example, it is unclear whether the DOL-Timesheet app includes metadata that would allow an employer to determine the time and date employees entered their time which in turn creates the potential that employees might overinflate their hours to seek benefits and compensation to which they may not be entitled.

Despite its shortcomings, the DOL left little question that it hopes and intends to use the information an employee tracks through its new app in its enforcement efforts when it stated the following in its press release announcing the app:

 

“This new technology is significant because, instead of relying on their employers’ records, worker now can keep their own records. This information could prove invaluable during a Wage and Hour Division investigation when an employer has failed to maintain accurate employment records.”

 

For employers, the key phrase in the DOL’s statement is the last. An employee’s personal time records are unlikely to supplant or surpass an employer’s properly maintained time records. But in the absence of a well maintained and effective time-tracking system, an employee’s personal time records will quickly rise in value in the court’s eyes.

 

It remains to be seen whether the DOL-Timesheet will garner much attention and use from employees. However, regardless of its ultimate popularity, the DOL-Timesheet app serves as a clarion call to employers to get their proverbial wage-and-hour houses in order. If you are uncertain whether your wage and hour practices hold water under the FLSA, now is as good a time as any to take a good hard look at them.

Supreme Court Rules Oral Complaints Of Wage Violations Are Protected Under FLSA

Today the U.S. Supreme Court issued another employee-friendly opinion in Kasten v. St. Gobain Performance Plastics Corp., holding by a 6-2 margin that the Fair Labor Standards Act ("FLSA") anti-retaliation provisions protect an employee’s oral complaints to supervisors about wage and hour violations. This is the latest of three opinions this term that have expanded the reach of various anti-retaliation provisions in employment discrimination statutes. (See World of Employment's analysis of the other two cases, Thompson v. North American Stainless, LP and Staub v. Proctor Hospital).

In Kasten, the plaintiff complained orally to his supervisors on several occasions that the location of time clocks in the workplace violated the FLSA, because it prevented employees from punching in and out while they were donning and doffing protective clothing and equipment.  Shortly afterwards, his employment was terminated for, ironically, multiple failures to properly punch in and out.  Plaintiff sued, claiming that his termination was in retaliation for his having complained that the Company was violating the FLSA.  The District Court dismissed his case, and the 7th Circuit affirmed, holding that the FLSA anti-retaliation provision, which prohibits employers from taking adverse action against employees because they “file any complaint or instituted or caused to be instituted any proceeding” complaining about wage and hour violations, protects only written complaints, not oral ones. 

The Supreme Court reversed, holding that oral complaints are also protected under the FLSA. The Court held first that the phrase “file any complaint” in the statute was ambiguous; the term “file” generally indicated a writing (although not always), while “any” indicated Congress intended to cover many different types of complaints.  The Court went on to look at the legislative history and purpose, Department of Labor interpretations, and numerous lower court opinions to ultimately decide that Congress must have intended the FLSA to protect oral complaints. 

At the end of the day, this opinion may change little for west coast employers. While the Kasten decision resolves a split among the Circuit courts, the law in the Ninth Circuit (which includes, amongst others, Oregon, Washington and California), has recognized for over a decade that oral complaints are protected under the FLSA. Further, the anti-retaliation provisions of other state and federal anti-discrimination statutes—most notably Title VII—also protect employees who make oral complaints of discrimination. Finally, the opinion merely holds that Mr. Kasten can go ahead with his lawsuit—he still needs to prove his case that his employer fired him because of his protected activity.

Still, Kasten and other recent U.S. Supreme Court decisions in Thompson and Staub provide useful reminders that courts--including the Supreme Court--read anti-retaliation protections broadly.  Employers must be careful to ensure and adequately document that any adverse employment actions against employees who have made any complaints about alleged unlawful activity in the past are for legitimate business reasons only. Retaliation claims are already the most common type of employment claims filed against employers.  This opinion isn’t going to change that. 

Ninth Circuit Issues Split Decisions on Compensation for Travel Time and "Off-the-Clock" Work

 

Employees who drive company vehicles between home and work will find little to cheer about in a recent Ninth Circuit decision . . . unless they live in California.  In Rutti v. Lojack Corporation, a three-judge panel refused to relax the rule that commuting time is non-compensable under the Fair Labor Standards Act (FLSA).  

The employee, who installed vehicle recovery systems, contended that his travel time between home and worksites was compensable under the FLSA and California law because his employer required him to drive company vehicles and significantly restricted his activities while doing so.  For example, the employer prohibited the employee from transporting passengers and engaging in personal pursuits, and required him to drive directly to and from the worksite with his cell phone turned on.  

All three judges rejected that argument under the FLSA, holding that use of an employer's vehicle to commute is non-compensable even if it is a condition of employment and that the restrictions placed on the employee's activities were incidental to his principal job activities.  The unanimous panel also rejected the employee's argument that his commuting time was compensable under the "continuous workday doctrine," under which an employee's workday generally lasts until he has completed all of his principal activities during the day. 

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2009 Mid-Term Federal Legislative Update

We expected many changes in federal labor and employment law in 2009 - for the first time in years, Democrats control the White House and both houses of Congress and have the political ability to make significant reforms.  However, not much has happened in 2009: we have only significant labor and employment bill signed into law.  To be fair, President Obama and the Congress have had other things to worry about:  a war or two, a lousy economy, health care and selecting a new White House dog to name a few.

But, the 2009-2010 legislative session is still not over, and Congress may yet pass some of the many labor and employment-related bills still pending.  Employers may want to take note, as some of these may become law before the end of the session in 2010.  Click on "continue reading" for a complete list.

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Managers Individually Liable for Unpaid Wages Despite Employer's Bankruptcy

A recent case should strike fear into the hearts of all upper-level managers and human resources professionals:  in Boucher v. Shaw, the Ninth Circuit ruled that individual managers were liable for their subordinates' unpaid wages, even though the employer company filed for bankruptcy. 

In Boucher, a group of former casino employees sued the CEO, CFO and the labor relations manager of their former employer, the Castaways Hotel, Casino and Bowling Center.  The three managers moved to dismiss, arguing that they were not "employers" that could be liable for unpaid wages under the Fair Labor Standards Act (FLSA), and that they should receive protections from the Castaways' bankruptcy filing. 

The Ninth Circuit noted that under the FLSA, the term "employer" is to be construed broadly to include individuals who have “control over the nature and structure of the employment relationship,” or “economic control” over that relationship.  It concluded that the three executives, two of whom were also alleged to be co-owners of the casino, fit that definition of "employer."  The court also found that because the three executives were not parties to the bankruptcy proceeding, they were not entitled to any bankruptcy protections. 

As the Stoel Rives World of Employment reported earlier this month, the Washington Supreme Court reached a similar ruling based on almost identical facts in Morgan v. Kingen.  These cases should serve as a reminder to managers everywhere:  if your business is failing, you may want to prioritize paying your employees' wages over everything else.  Failure to do so may lead to personal liability. 

Federal Minimum Wage Rises to $7.25/Hour Today

If you pay your employees minimum wage, prepare to give them a raise effective today:  the federal minimum wage increases to $7.25 per hour, effective July 24.  Of course, you may live in a state that has a higher minimum wage; in that case, employers are obligated to pay the higher of the two wages.  Click here for a state-by-state list of minimum wage rates

What's that you say?  This won't affect your business since you pay higher than the minimum wage?  Don't be so sure.  According to this article from the New York Times, increases in the minimum wage tend to have a ripple effect, as employees with wage rates above the minimum wage want to maintain their lead over their lower-earning counterparts. 

Think the increase in the minimum wage is too much?  You're not alone.  As this article from the Associated Press points out, some business are concerned that the increase in the minimum wage will slow down the economic recovery.  On the other hand, the Times points out that even with this increase, the minimum wage is still no higher now, after inflation, than it was in the early 1980s, and it is 17 percent lower than its peak in 1968.

Proposed "LAW" Would Index Federal Minimum Wage to Poverty Level

The recently proposed Living American Wage Act (LAW) would tie the federal minimum wage to the federal poverty threshold for a family of two with one child. Introduced last week by Rep. Al Green (D-Texas), LAW would index the minimum wage to 15 percent above the poverty line for a full-time worker, or about $8.20 per hour in wages, and it would increase the minimum wage every four years to maintain a wage at least 15 percent above the poverty line. For more information, click to read Rep. Green’s press release on LAW

Such an indexed minimum wage would not be unique. Oregon adjusts its minimum wage each year based on the U.S. City Average Consumer Price Index for All Urban Consumers for All Items.  Currently, Oregon's minimum wage is $8.40 per hour.  For a list of the minimum wages in other states, click here for the Department of Labor's handy list of minimum wages by state, effective January 1, 2009

We’ll keep watching to see if LAW becomes law.  Until then, please note that the federal minimum wage will increase to $7.25 per hour effective July 24, 2009.

Seventh Circuit Rules FLSA Doesn't Protect Verbal Complaints

Most employment lawyers and HR professionals know that firing an employee for making a complaint about being paid properly is a recipe for disaster.  This week in Kasten v. Saint-Gobain Performance Plastics Corp., the Seventh Circuit Court of Appeals thought differently, at least for verbal complaints about violations of the Fair Labor Standards Act.

The plaintiff, Kevin Kasten, was reprimanded three times for failing to clock in and out.  In response, he complained that the location of the time clock was illegal because, among other things, it prevented employees from being paid for time donning and doffing protective gear.  After Kasten failed to clock in a fourth time, he was terminated.  Kasten sued under the FLSA, claiming that he had been terminated in retaliation for his complaint. 

The FLSA protects employees who have "filed any complaint" under FLSA and whose employers retaliate against them for complaining.  The Seventh Circuit ruled that because a complaint must be "filed," verbal complaints are not protected by FLSA

The takeaway?  Despite this ruling, we at the Stoel Rives World of Employment think that employers should be wary of terminating employees for verbal complaints.   As others have noted, the case law in other circuits may contradict the Seventh Circuit on this issue.   Even more crucially, plaintiffs making verbal complaints may have other causes of action under state statutory law or common law.

DOL Secures $3.4 Million Settlement for NY Car Wash Employees

A portend of things to come in federal wage enforcment?  Yesterday, a group of New York car washes have agreed to pay over one thousand current and former employees a total of $3.4 million to settle a lawsuit filed by the Department of Labor (DOL) alleging violations of the Fair Labor Standards Act (FLSA).  Click here to read the consent decree in Solis v. LMC et al

As we reported back in May, the Department of Labor received a budget increase of 10 percent and is devoting most of that increase to enforcement.  Employers can expect to see more activity from the DOL to enforce wage and hour laws, especially large cases against groups of employers. 

In the meantime, sit back, relax and enjoy Rose Royce:

 

Federal Minimum Wage Increases to $7.25 Effective July 24

Employers take note:  the federal minimum wage increases to $7.25 per hour effective July 24, 2009.   For more information, check out the Department of Labor's Fair Labor Standards Act site

Of course, many states also have minimum wage laws, an where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage.  Click here for the Department of Labor's handy list of minimum wages by state, effective January 1, 2009.  (Note:  the chart does not accurately reflect that Nevada's minimum wage will increase effective July 1, 2009 increase from $5.85 per hour to $6.55 per hour, while the minimum wage for employees not receiving health benefits will increase from $6.85 per hour to $7.55 per hour). 

Need the Department of Labor's minimum wage posters?  Here they are:

Minnesota Wal-Mart Employees Get $54 Million Christmas Present

Wal-Mart Stores Inc. announced yesterday that it will pay $54.25 million to settle a class-action lawsuit over allegations that Wal-Mart made its employees work during break time and off the clock after regular working hours.  The class consists of approximately 100,000 current and former hourly employees who worked at Minnesota Wal-Marts and Sam's Clubs between September 11, 1998 and November 14, 2008.  Click here to read MSNBC's coverage of the settlement

This isn't Wal-Mart's first major settlement, and it might not be the last:  according to Wal-Mart's 10-K filings with the SEC, it has to date settled 76 similar class-action lawsuits across the country.  The lesson for employers?  Carefully follow the wage and hour laws of each state in which you do business.  If you have employees in Minnesota, the state's Department of Labor and Industries has a great website with lots of valuable compliance tips and information. 

Washington's Minimum Wage To Rise to $8.55 January 1, 2009

Washington employers get ready to give your minimum-wage employees a raise:  effective January 1, 2009, Washington's minimum wage will increase to $8.55 per hour, allowing Washington to maintain the highest minimum wage in the country.  For more information, click here to read the Department of Labor and Industries' Press Release.  Washington's current minimum wage is $8.07 per hour.

As previously reported in the Stoel Rives World of Employment, Oregon's minimum wage will increase to $8.40 also effective January 1, 2009.  Following voter initiatives, both Oregon and Washington now tie their minimum wages increases to the Consumer Price Index

The federal minimum wage is now $6.55 per hour, but will go up to $7.25 per hour effective July 24, 2009.  For information on minimum wages in other states, check out this interactive map of the United States showing minimum wage rates, available from the U.S. Department of Labor

Cosmetology Teachers, Not Day Care Teachers, Overtime Exempt

Cosmetology teachers, but not day care teachers, are exempt from the Fair Labor Standards Act's (FLSA's) overtime and minimum wage rules, according to two recent opinion letters from the Department of Labor.

The FLSA contains an exemption for professional employees, including any “teacher in elementary or secondary schools.”  Cosmetology teachers qualify for the exemption, according to the DOL, because they teach in an accredited secondary school and because their primary duty is "teaching and instructing students in cosmetology theory."  Yes, you read that correctly:  cosmetology theory.  Click here to read the DOL's opinion letter on cosmetologists

Day care teachers, on the other hand, do not qualify for the exemption because they do not teach in a qualifying institution.  According to the DOL, “[u]nless the daycare center provides grade school curriculums, introductory programs in kindergarten, or nursery school programs in elementary education of the sort described in [the act], the instructors are not within the scope of the teacher exemption of the FLSA.”  Click here to read the DOL's opinion letter on day care teachers.

What lesson can we learn from these opinions?  The FLSA exemptions are highly technical and not always intuitive.  If you are classifying your employees as FLSA-exempt, not only should you make sure the employees meet all of the duties tests under the statute and regulations, but also that your organization meets any requirements that may be imposed as well.  For more guidance on the FLSA exemptions, read this compliance guide on the FLSA from our friends at the DOL.