California Passes Comprehensive Social-Media Privacy Laws

Posted by Molly DiBiancaOn August 31, 2012In: Privacy In the Workplace, Social Media in the Workplace

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California is now the third state to pass legislation banning employers from requesting or requiring the social-networking passwords of employees and applicants. The bill was passed by the state Assembly on Wednesday, reports the WSJ Blog. Maryland was the first state to pass a social-media password-protection law, with Illinois following suit just a few weeks ago. The bill now moves to the desk of the Governor for signature by the end of the month.

Last week, the California Senate unanimously passed a bill that prohibits colleges and universities from requesting access to student's social-media accounts. Delaware was the first state to pass social-media privacy legislation applicable to students and academic institutions. With the passage of the employer-based bill, California's protections will be the most comprehensive in the country.

The WSJ Blog article also references Bradley Shear, a Maryland attorney who has "advised lawmakers around the country on social media privacy legislation" and who the article quotes as saying that the California bill "is a huge win for the business community because it may provide California businesses with a legal liability shield from plaintiffs who may allege that businesses have a legal duty to monitor their employees' personal password protected digital content."

Seriously? Who does he think he's kidding with that nonsense? The law imposes new restrictions on employers--and new liability to go with those restrictions. It limits an employer's ability to regulate its workplace, investigate wrongdoing, and, in some instances, to protect employees. There has never been a successful lawsuit based on an employer's failure to "monitor [its] employees' personal password protected digital content." So, if the law protects employers from something that never happens but imposes new restrictions and liability, I fail to see how that counts as a "win" for employers.

Of course, it is a win for Mr. Shear, who, apparently, is devoting his time to the passage of these laws and enjoying the media resulting from his involvement. But I doubt this line on his resume will help him secure many businesses as clients because, contrary to his claim otherwise, businesses don't like these laws because they are unnecessary and overly broad.

Social Media Round-Up

Posted by Molly DiBiancaOn August 29, 2012In: Social Media in the Workplace

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Happy Wednesday, dear readers! There have been a number of interesting social-media stories in the news headlines recently. And, although I'd love to devote a post to each of them, my day job makes that ambition a bit unrealistic. But they are worthy of mention, so I'm going to so in today's post. Here goes!

Anti-Government Posts Lead to Trouble for Commenters

First, there are two stories of individuals who've gotten into trouble for their political speech online. The first of the two comes from Virginia, where a judge ordered the release of a 26-year-old former Marine, who was questioned by the FBI and then detained for a mental-health examination because of comments he posted on his Facebook page that, according to the FBI, indicated an intent to engage in violent and/or terroristic activities.

The second of the two stories comes from the Netherlands, where a 28-year-old man was given a six-month suspended sentence for threatening and insulting Queen Beatrix. The man posted his insults on Twitter. The court found that the tweets were "offensive to her dignity" and held that, whether the Queen actually saw the insults was irrelevant to their decision. The Irish Times reports that the decision is the first of its kind from the Dutch court.

In the Courtroom

The federal Judicial Conference Committee on Court Administration and Case Management published an updated edition of Proposed Model Jury Instructions. The instructions are aimed at juror's use of social media and other new technology while serving jury duty.

There are several important changes to these new Proposed Model Instructions but, to me, the key change is the inclusion of a reporting instruction. If a juror learns that another juror has violated the instructions, he is to inform the judge.

This issue has come up for lawyers, too. The ethics rules of some states require an attorney to report any suspected violation by a juror. But other states, including Delaware, have no such rule. Absent a specific rule, the question has been posed at more than one seminar I've attended (as attendee and speaker), but I've never heard a definitive answer. (If asked what I would do--as opposed what I would be obligated to do, the answers may not be the same. I can assure you that the answer to the former is, "report it at once.") via ABA Journal

Social-Media Privacy

An interesting development in social-media security has been announced by McAfee called, Social Protection. The Facebook app and browser plugin is said to display users' photos as blurred images, which will be displayed as actual photos only once the user's Facebook friends have installed the app.

Even more interesting are the app's other protections, which prevent photos from being downloaded, shared, or captured as screen shots. (How that works, I have no idea but it sure does sound cool!) It's a fascinating concept and I will look forward to seeing how it is received by Facebook users. Social Protection is currently available as a free public beta version. via AllFacebook.com

Is the NLRB In Need of a Dictionary?

Posted by Molly DiBiancaOn August 28, 2012In: Union and Labor Issues

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A recent decision by the NLRB has many employers (and their lawyers) up in arms. It has left me wondering whether maybe the Board needs a dictionary. Blacks-Law-Dictionary.jpg

In Banner Health Systems, 358 NLRB 93 (2012), the Board held that an employer's instruction to employees to keep information confidential during an internal investigation violated the employee's Section 7 rights under the NLRA. In that case, an employee filed an internal whistleblower complaint about instructions he'd received from his supervisor that the employee felt would endanger patients. An HR consultant told the employee not to discuss the matter with co-workers while it was being investigated.

The ALJ held that this prohibition did not violate the NLRA but the NLRB disagreed.
As the basis for its finding, the NLRB found that, although an employer could require its employees to maintain the confidentiality of an investigation, it must first determine whether that step is really necessary. The Board held that, to make this determination, an employer must first look at whether: (1) witnesses were in need of protection; (2) evidence was in danger of being destroyed; (3) testimony was in danger of being fabricated; and (4) there was a need to prevent a cover-up.

So, dear readers, have you ever conducted an internal investigation in the workplace? An "investigation," by its very definition, implies that there is a suspicion and/or report of wrongdoing. (You don't say that you're going to "investigate" whether an employee put in all-star effort to exceed his sales quota last month, do you?). If you are conducting an investigation of any kind and under any circumstances, I would argue that, at the very least, the last three questions suggested by the Board will be answered in the affirmative.

If you didn't care whether the to-be-questioned witnesses got together and matched their stories up in advance, you wouldn't call it an investigation, would you? You'd call it conversation. Heck, you may even call it party talk, or dinner-table chit-chat but you would not call it an "investigation."

But you needn't take my word for it. Black's Law Dictionary, defines the word, investigate as follows:

To inquire into (a matter) systematically; to make (a suspect) the subject of a criminal inquiry

Black's 7th ed. at p. 830. I believe this definition further supports my thesis--the Board apparently is without a dictionary. Perhaps we should all chip in--the holidays will be here before we know it. The hefty Black's Law Dictionary with its sultry black leather cover makes it a great gift for those who take themselves quite seriously. We'll be sure to bookmark page 830 and highlight the definition of "investigate" before we wrap it, though.

What Does "Good Faith" Mean for the EEOC?

Posted by Molly DiBiancaOn August 27, 2012In: EEOC Suits & Settlements

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The District of Hawaii is the latest federal court to address the obligations of the EEOC during conciliation before it files suit. In EEOC v. La Rana Hawaii, LLC, the court determined that the Ninth Circuit's decision in EEOC v. Pierce Packing required a "genuine investigation, reasonable cause determination and conciliation [as] jurisdictional conditions precedent to suit by the EEOC." The court explained that, in light of this precedent, the EEOC must actually investigate the claims of discrimination and harassment and attempt to resolve the claims through good-faith conciliation.

The court next considered whether the EEOC's conciliation efforts in this case adequately satisfied Title VII's pre-suit requirement. The court acknowledged that the Ninth Circuit has not yet articulated a standard for determining the sufficiency of conciliation. Nevertheless, the court found that the EEOC had failed to conciliate in good faith by failing to provide the defendants with enough information with which they could evaluate the EEOC's claims.

Specific problems that the court identified included the EEOC's "obstinate refusal" to provide the defendants with any specific information about the class members or the allegedly unlawful acts. This refusal constituted a failure to demonstrate a "willingness to work toward settlement." The court found that the EEOC's "take-it-or-leave-it" offer further demonstrated the insufficiency of its efforts.

Having found that the EEOC failed to satisfy its pre-suit conciliation obligation, the court explained that the EEOC should be provided the opportunity to cure any defect in the process. As a result, the court stayed the case pending the completion of a good-faith conciliation by the parties. The court instructed the EEOC to provide the defendants with information necessary to make an informed decision about the case. For example, the EEOC must provide the number or identity of the claimants that it had identified during its investigation, as well as information about the specific incidents of harassment or discrimination.

EEOC v. La Rana Hawaii, LLC.pdf

See also:
When the EEOC Goes Too Far
When the EEOC Goes Too Far--Part II

How to Nail Your Law-Firm Interview

Posted by Molly DiBiancaOn August 22, 2012In: Hiring, Purely Legal

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I take very seriously the job of interviewing potential candidates. There are certain things that a candidate can do or say to sabotage their chances at getting an offer. Many of these "offer killers" are more common than you might think. Many of the lawyers I've talked with have expressed frustration about similar behaviors from the candidates they've interviewed. In an effort to help future candidates, I humbly suggest some things to avoid.

Only Fools and Egomaniacs Submit a Less-than-Perfect Resume

No student should ever--and I do mean ever send out a resume that hasn't first been reviewed by several professionals. Whether it's through your school's Career Services department, through a formal resume-review program, or just by the smartest professional adults you know, there are plenty of resources for having your resume reviewed.

When I receive a resume that misses the mark in even the smallest way, I find it difficult to take the candidate seriously. It tells me that the candidate has one of two equally undesirable personality traits. He is either: (1) sloppy and lazy; or (2) thinks he is smarter than everyone else. There are no other explanations for a student who fails to have his resume reviewed (repeatedly) prior to submitting it. I do not want to work with a new lawyer who falls into either category.

One Error In a Cover Letter Is One Error Too Many

The same rules apply with respect to cover letters. I cringe when I think of the number of times I have seen a cover letter that starts with, "I am a second year law student" instead of the properly hyphenated, "I am a second-year law student." It's called a phrasal adjective, kids. It's ok if you don't know what one is but you'd better find someone who does so they can point out your mistake.

If a dork like me receives a cover letter that contains an error in the first sentence, you're facing an uphill battle. And not just because of your claim, two paragraphs later, that you have "outstanding writing skills." For me, the real frustration is that you could have gotten right, you just didn't bother to take the time to ask someone. You have a legal-writing teacher, don't you? Ask him or her to look at your letter and thank him or her profusely if they return it to you covered in red ink.

Get the Name Wrong and You've Got No Chance

The cardinal sin for cover letters, though, is not grammatical. It's far, far worse. Although far less common, I am still amazed when I read a cover letter that, at least once in the body of the letter, makes reference to the wrong firm.

Yes, it happens. Usually right around the third paragraph, which must be when students grow weary of editing their own work, the author reiterates how confident she is that she will be an attribute to Smith, Jones, and Smith, LLP. Except, I don't work for Smith, Jones, and Smith, LLP. Smith, Jones, and Smith, LLP, is my firm's competitor.

To me, this error demonstrates the candidate's lack of editing skills and, more important, lack of interest. Neither of which are positive qualities in a potential new hire.

Your Resume Is Not the Place to Demonstrate Your Creativity

Creativity is a desirable trait for a lawyer. But resumes are not the place to show us how creative you can be. Save it for your legal analysis. There are two common failures in this regard.

First is the Overly Long Resume. Legal resumes should be one page in length and no more. You are not, I guarantee, so amazing as to require additional pages. Brevity in writing is a skill, so start practicing.

Second is the Oddly Formatted Resume. Lawyers don't use crazy fonts. If you want to demonstrate your prowess for typeface, go into graphic design, not into the practice of law. Your resume is not the place to use distracting borders or other "fun" formatting techniques.

Mind Your Manners

Try to recall every lesson your mother ever taught you about proper etiquette. Then try harder to remember some more. And take them to heart.

My entire interaction with you is limited to a 20-minute interview. None of these 20 minutes should be spent slouched in your chair. Sit up straight. Look me in the eye when you are answering a question. And don't interrupt me when I'm speaking. The same rules apply in the courtroom and I don't want to have to teach these rules to you now--you've got plenty of other things to learn, trust me.

Speak Like a Grown-Up, Even If Your Interviewer Doesn't

Language matters. Word choice matters. We are lawyers and we care how you speak. Do not use any words such as "cool" or "yeah" during your interview. And, I know it's hard but try to limit the amount of times you say the word, "like." You wouldn't believe how many times a candidate utters that word during a short interview. It would make your head spin. I understand that this is a habit that is difficult to break. But try anyway.

Be wary if your interviewer is on the younger, cooler side of the lawyer spectrum. I am sure that I tend to come off as more casual than many of the interviewers that candidates meet. But don't let my preference for pink fool you. I still expect you to conduct yourself in the same way that you would if I was wearing black pinstripes.

I may be partly to blame for this casual leaning because of my inclination to be friendly and my desire to make the interviewee feel comfortable. But being comfortable in an interview is not the same as being comfortable in a college dorm room. Keep this in mind.

Some Parting Thoughts

Candidates of the future, you have been warned. Now that you know what bothers your interviewer, it's up to you to avoid these pitfalls. And, once you land the gig, consider reading this article about ways to make sure you get an offer to return. The cleverly named article was written by Ben Potts, an all-star summer associate who recently finished his first summer in our firm's summer-associate program. Take his advice, he writes from experience and his suggestions are dead-on.

Gordon Ramsay, A Hotel, and a Hen House

Posted by Molly DiBiancaOn August 21, 2012In: Jerks at Work

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Last night I watched the second episode of Gordon Ramsay's new show, Hotel Hell. If you're not familiar with the show, the basic premise is this: Gordon visits a failing hotel and, after lots of screaming and yelling, turns the owners into decent human beings who don't treat their staff like savages and who see the error in their ways. The team all pulls together at the end and turns the place around. [FN 1]

Like the premiere episode last week, last night's episode provided no shortage of "teaching moments." [FN 2] The main lesson from last night's show was this: leave the farming to the farmers. Just because you have enough change in your pocket to buy a parcel of land does not mean that you should be operating a John Deere. The chickens will cluck at you from the hen house and the cows are likely to give you a swift kick with a hoof if you so much as think trying to milk one of them. Blue Hen of Delaware.jpg

In this case, there was no farm, no tractor, and no animals. It was worse--there was a lawyer with a hotel. A lawyer who had no experience whatsoever in the hospitality industry. But, one starry night, he was talking to his wife about what they should do to celebrate their wedding anniversary when he had the bright idea to buy the local landmark hotel instead of, let's say, just booking a dinner reservation.

And, poof, just like that, the lawyer became a hotelier. Not a successful hotelier, mind you. But a hotelier nonetheless. Soon, Gordon was on site to save the day.

He nearly fell over when he learned that Mr. and Mrs. Hotel Owners had no experience in any aspect of hotel or restaurant management. He told them, or, technically, screamed at them, that they ought to just sell the place; that they were not cut out for this business. As it turns out, it seems that Gordon may have been right, the post-script following the show indicated that the bank foreclosed on the property, despite Gordon's valiant efforts. So what's the "teaching moment" from this low-grade disaster?

Don't pretend to be something that you're not.

If you find yourself responsible for a project in a subject matter far beyond your scope of knowledge, admit it. And, for the love of Ramsay, don't try to boss around the real subject-matter experts. If you do, you'll be the laughing stock of the hen house. [FN 3]

***Footnotes***

[FN1] Don't misread my description as a negative review--I heart Gordon Ramsay. If it's his show, it's great, and that's that.

[FN 2] A "teaching moment," for those who many not know, is a major screw-up that, 15 years ago, would have resulted in taunting and teasing but, today, prompts insightful discussion by those who did not cause said screw-up.

[FN 3] In Delaware, you'd have Blue Hens in your proverbial hen house, as it's the Delaware State Bird.

Employer Liability for Employee Injuries In the Company's Gym

Posted by Molly DiBiancaOn August 21, 2012In: Cases of Note, Policies, Wellness, Health, and Safety

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Health-and-wellness benefits are all the rage. Some employers offer their employees a discount on gym memberships. Some offer a monthly stipend to be used towards the fees at a health-club. And some have an on-site fitness center.

Employers who are considering building an on-site fitness center for employees commonly want to know how they can protect themselves against a personal-injury lawsuit. For example, an employee drops a dumbbell on his foot and breaks a toe. (Don't laugh, people, broken toes are brutal!)

What's to stop the employee from suing his employer for his injury? Assuming that lifting weights is not part of the employee's job, it would not have been an injury incurred in the "course and scope" of his employment and, therefore, would not be covered by workers' comp. And you, dear employer, own the equipment, including the dumbbell, so you'd surely be the first defendant to be named.

To avoid the "no-good-deed-goes-unpunished" phenomenon, employers will ask whether they can require employees to sign a waiver or release as a condition of using the fitness center. Until a few years ago, the answer was, "not really." Of course, you could require that they sign a waiver but it would not be effective if you ever needed to use it because the law prohibited waivers of claims for future injury.

In 2008, in Slowe v. Pike Creek Court Club, the Delaware Superior Court held that such claims could be released but only if "the language makes it crystal clear and unequivocal that the parties specifically contemplated such a release." In Slowe, the court held that the waiver at issue did not meet this "crystal-clear-and-unequivocal" standard and, consequently, the waiver was not effective, but left open the possibility that a "properly-worded release might effect a waiver of premises liability."

In July, the court had the opportunity to address the issue again and, this time, found the waiver to be enforceable. In Hong v. Hockessin Athletic Club, the plaintiff, a member of the athletic club, signed a comprehensive waiver of liability and release in connection with her membership agreement. The waiver expressly stated that she and all others on her membership assumed the risk of "any injury or damage incurred while engaging in any physical exercise or activity or use of any club facility on the premises," including the use of "any equipment in the facility." The court held that this was sufficient to constitute a waiver in "crystal clear and unequivocal" terms and dismissed the suit.

There are no guarantees in life or in the law and this situation is no exception. Although this case offers employers some very good news when it comes to avoiding liability for on-site injury of employees and visitors, it is, of course, not a guarantee. Nevertheless, in light of this case, there seems to be no reason not to require a waiver for your on-site fitness center.

Hong v. Hockessin Athletic Club, No. N12C-05-004-PLA (Del. Super. July 18, 2012).

Legal Extortion of Employers With the FLSA

Posted by Molly DiBiancaOn August 20, 2012In: Fair Labor Standards Act (FLSA), Union and Labor Issues, Wages and Benefits

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Continuing the FLSA theme from last week, today's post is about the impact of a recent decision by the 5th Circuit in Martin v. Spring Break Productions, LLC, No. 11-30671 (5th Cir. July 24, 2012). The relevant facts of the Martin decision are very simple. Employees filed a grievance with their Union, in which they alleged that they had not been paid for all time worked. The Union investigated the claims but concluded that it could not determine whether or not the employees had worked on the days alleged. The Union and the employer entered into a settlement agreement to resolve the dispute.

The agreement recognized that "disputes remain[ed] between the parties as to the amounts that may be due." Despite the disputes, the agreement prohibited the employees from pursuing future legal action against the employer after receiving their settlement payments. The agreement was not signed by, nor was it intended to be signed by the employees themselves but, instead, by the Union on the employees' behalf. The agreement expressly provided that the Union had the full power and authority to enter into the settlement on the employees' behalf.

Before the agreement was signed by the Union, the employees filed suit in California state court. The employer removed the suit to federal court. The court dismissed the claims based on the settlement agreement. The employees appealed the decision to the U.S. Court of Appeals for the Fifth Circuit, where they made two arguments with respect to the settlement agreement.

First, the employees argued that the agreement was not enforceable against them because they had not signed it and never agreed to it. The employees did not dispute that they'd received "full payment" for their claims pursuant to the agreement or that they'd cashed the checks they'd received pursuant to the agreement. The 5th Circuit quickly rejected this part of the employee's argument and found, instead, that they were bound by the decision of its Union, which had been recognized as the exclusive representative of the bargaining unit.

Second, the employees argued that, even if the agreement was binding on them, the release that it contained was invalid because individuals may not privately settle FLSA claims. This argument was predicated on a decision by the 11th Circuit in 1982, Lynn's Food Stores, Inc. v. United States. In that decision, the court held that FLSA claims may not be settled without the approval of the Department of Labor or a court. The dispute arose as a result of a U.S. DOL investigation and the employees, who did not speak English and who had not consulted with an attorney, did not know that the DOL had determined they were owed back wages.

The 5th Circuit held that the rationale of Lynn's Food Stores did not apply to the facts before them. Instead, the court held, a private compromise of claims under the FLSA is permissible where there exists a bona fide dispute as to the hours worked or compensation due. In that context, a release of party's rights under the FLSA is enforceable.

The potential impact of the Martin decision is expansive, particularly in light of the Third Circuit's holding in Genesis Health Care (which currently is on appeal to the U.S. Supreme Court), that an FLSA collective action is not mooted when an employer pays the full amount claimed. Now, it seems that there is at least the possibility that an employer can prevent a collective action altogether if it tenders a payment to the employee pursuant to a settlement agreement, provided the amount of wages owed is a bona fide issue of dispute and that the employee is represented by counsel.

This is particularly important when an employer receives a demand letter from an employee's lawyer, threatening suit unless the employer agrees to pay the employee an amount of allegedly unpaid wages. Previously, the employer could (and often times would) pay the employee at least some portion of the demand and the parties would memorialize their agreement in writing. The employer would then keep its proverbial fingers crossed in the hopes that the employee would not file a lawsuit seeking the remaining amount of claimed wages. If, however, the employee did later sue, the employer would not have had much hope of having the suit dismissed due to the settlement agreement. In other words, the Martin decision, at least potentially, helps to remove one way in which employees (and employees' lawyers) use the courts as a way to exact legal extortion to receive as much money as they want to claim they are owed.

Top 10 FLSA Blogs: Sharing the E-Law Love

Posted by Molly DiBiancaOn August 17, 2012In: Fair Labor Standards Act (FLSA), Wages and Benefits

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The FLSA has been the subject of several posts on this blog recently. See, e.g., this post about tip-pooling this one on missed meal breaks, this one on the 3d Cir.'s recent decision on the class-certification standard, and this one on an important FLSA case on appeal to the Supreme Court.

And there are several important FLSA decisions about which I've not yet posted. See Phil Miles' post on the 3d Cir.'s decision on joint employment in FLSA cases and Michael Fox's post on the 5th Circuit's opinion enforcing a private FLSA settlement, to tide you over till I get caught up.

[Don't begrudge me, dear readers, I do have a day job, after all.]

But the fact of the matter is unavoidable--wage disputes continue to capture the attention of employers across the country. If you need proof beyond my representation of such, I'll direct you to the results of a recent study by Seyfarth Shaw, which shows that FLSA lawsuits are at an all-time high this year.

So, what's an employer to do to avoid being on the defense side of an FLSA lawsuit? The best way to avoid getting sued for FLSA violations is to not violate the FLSA. Although most employers think they are in compliance, the unfortunate reality is that, often times, they are not. The best thing to do, then, is to get educated about the many intricacies of the FLSA. And a great (and free) way to do that is through the wonderful world of employment-law blogs.

Here, in alphabetical order except for the first, which is my pick for #1, are the FLSA blogs that I consider to be the best of the best:

Overtime Law Blog, written by Andrew Frisch

Epstein Becker Green's Wage & Hour Defense Blog

Fisher & Phillips, LLP's Wage and Hour Laws blog

Fox Rothschild's Wage & Hour Blog

Francezek Radelet's Wage & Hour Insights

Greenwald Doherty's Overtime Advisor

Jackson Lewis' Wage & Hour Law Update

Littler's Wage and Hour Counsel blog

Seyfarh Shaw's The Wage & Hour Litigation Blog

Wage & Hour Defense Institute, which is published by the organization's member firms.

And, although they don't publish posts with enough frequency to qualify for my Top 10, these blogs also deserve a place on your feed reader:

Womble Carlyle's Fair Labor Standards Act Law blog.

Independent Contractor Compliance, Pepper Hamilton, LLP

Have I missed one? Leave a comment if you read (or write) an FLSA-specific blog (general employment-law blogs like mine doesn't count).

FLSA Lessons from Gordon Ramsay

Posted by Molly DiBiancaOn August 15, 2012In: Fair Labor Standards Act (FLSA)

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The FLSA's tip-pooling prohibition made news headlines in March when the restaurant group owned by Chef Mario Batali was reported to have settled an FLSA lawsuit for $5.25 million. Apparently, though, the news headlines did not make its way to Vermont. At least not to the Juniper Hill Inn, anyway. If you watched the premier episode of Gordon Ramsay's new show, Hotel Hell, you already know that Juniper Hill Inn was the project du jour.

The hotel had lots of problems, of course, but the biggest problem was with management. The two co-owners were not exactly "good leaders." And, although I could surely spend an entire post rambling on about the employment-law lessons to be learned from the stars of prime-time reality-dramas, I'll limit myself to just one this time.

During a meeting with Ramsay, the staff confided that the owners "shared" in the tip pool. In other words, staff had to tip the owners at the end of the shift. When Ramsay confronted one of the owners about it, he admitted to having "shared" the staff's tips. He proceeded to explain that he had been so frustrated by the staff's failings that he believed that taking their wages was the only way to get them to improve their performance.

Dear readers, I ask that you humor me for just a moment, as I walk down the road of the obvious. If you regularly belittle your employees, they are not likely to respond positively or work harder to impress you. And if you then make them pay you for treating them badly (even if you call it "tip sharing"), they are almost certainly not going to "aim to please."

I was, I'll admit, fairly surprised that the show's legal team allowed the program to air with the "FLSA confession" segment left in. The statute of limitations is, after all, far from expired. Perhaps the show's happy ending, in which the owners turn their act around and changed their ways for the better will prevent them from getting sued at all. Here's to hoping.

In the meantime, let's take this opportunity to review the tip-pooling rules of the FLSA.

The FLSA permits employers to pay tipped employees a reduced minimum wage. provided they follow certain rules. One of the biggest rules, and the one that's made the news lately, is that tipped employees must keep all of the tips they receive except those that are shared with other tipped employees as part of a tip pool.

Management (and owners) may not share in a tip pool. Thus, absent some fact to which the audience was not made privy, our friends in Vermont, who are, indeed, owners, were prohibited from taking any portion of their staff's tips.

Now, let's tip our hats to our friend, Gordon Ramsay, for giving us another valuable lesson in employment law.

The Inherently Dangerous Nature of Selling on a Street Corner

Posted by Molly DiBiancaOn August 14, 2012In: Independent Contractors

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Independent contractor or employee? It's a hot question these days, for sure. A recent decision from the Delaware Superior Court answers the question in an unusual way--yes and no. In Colon v. Gannet Co., Inc.,
No. N10C-04-007-MMJ (Del. Super. July 26, 2012), the court held that the plaintiff was an independent contractor but that the employer still could be found liable for harm caused to him during the course of his work.

The plaintiff, Jesus Colon, was selling newspapers as a street hawker when he was struck and injured by a motor vehicle. A street hawker, according to the court, is an "independent contractor who purchases and resells copies of the newspaper at predetermined locations."

The publisher had a contract with Keith Walker, who, in accordance with the contract, purchased papers daily and resold them in a designated territory. Pursuant to the agreement, Walker could contract with other parties to assist in selling the papers. Colon was one such party. The agreement also contained an indemnification provision whereby Walker would indemnify the publisher for any claims against it brought by any of Walker's agents.

Colon filed suit against the newspaper's publisher, Gannett Company, Inc., alleging negligence and reckless disregard for his safety. The publisher answered the complaint and filed its own, third-party complaint against Walker and the driver of the vehicle. The publisher later filed a motion for summary judgment on the grounds that Colon's status as an independent contractor precluded a finding of liability.

The court acknowledged that, generally, an employer will not be liable for the torts of an independent contractor that are committed in the performance of contracted work. However, the court went on to explain, the general rule is subject to three exceptions. First, the employer can be liable for its negligence in selecting, instructing, or supervising the contractor. Second, the employer can be liable when it has delegated non-delegable duties that arise out of some relation to the public or the particular contractor. Third, the employer can be held liable where the work that the contractor was hired to perform was "specially, peculiarly, or 'inherently' dangerous."

The court found that the first two exceptions did not apply before turning to the third. The third exception, the court held, applies not only to inherently dangerous work but also to work that involves a risk of harm is present where the work is performed in the ordinary manner.

The court went on to conclude that, whether a street hawker, who sells newspaper on the street corner and who, in the course of doing so, would enter the roadway many more times a day than the ordinary pedestrian. As a result, the court found that it would be up to the factfinder to determine whether this risk constituted an inherently dangerous risk that would prevent Gannett from avoiding liability with the independent-contractor defense.

3d Cir. Decides Certification Standard for FLSA Class Claims

Posted by Molly DiBiancaOn August 13, 2012In: Fair Labor Standards Act (FLSA)

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In an FLSA collective action brought in Delaware, Pennsylvania, or New Jersey (the three states within the 3d Circuit), there is a two-step process for class certification. At the initial stage, called conditional certification, the burden is low. At the second stage, called final certification, the standard is more stringent but the precise test that should be applied has been unclear. Until now.

On August 9, 2012, the Third Circuit issued an opinion in Zavala v. Wal Mart Stores, Inc., in which it decided the standard that courts must apply. Specifically, the Third Circuit held that, at the final-certification stage, the district court must "make a finding of fact that the members of the collective action are 'similarly situated'" and that the burden to establish this fact by a preponderance of the evidence rests with the plaintiffs.

The court adopted an ad hoc approach to making the decertification decision. This approach requires the consideration of all relevant factors to determine similarity on a case-by-case basis. Factors that may be relevant include: whether the plaintiffs are employed in the same department, division, and location; whether they advance similar claims; whether they seek the same form of relief; and whether they have similar salaries and circumstances of employment. The plaintiffs may be found to be dissimilar based on the existence of individualized defenses.

Finally, the court concluded that the plaintiffs must meet their burden to establish similarity by a preponderance of the evidence in order to obtain final certification and proceed with the case as a collective action.

This is the second opinion from the Third Circuit on important FLSA issues. in the last several weeks. The court's decision on a third important FLSA issue, Smyczyk v. Genesis Healthcare Corp., has been appealed to the U.S. Supreme Court, where arguments will be heard this term. Needless to say, the FLSA remains a very hot topic in the world of employment law.

Facebook "Like" as 1st Am. Speech: The Appeal

Posted by Molly DiBiancaOn August 10, 2012In: Cases of Note, Public Sector, Social Media in the Workplace

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Does a Facebook "Like" constitute speech for the purposes of the 1st Amendment? In April, a federal judge in Virginia concluded that it did not in Bland v. Roberts (E.D. Va. Apr. 24, 2012). Many legal spectators, including me, disagreed with the holding and speculated that the decision would be appealed.
facebook-like.png
It's nice to be right once in a while.

The case has been appealed to the Fourth Circuit and, on Monday, Facebook filed an amicus brief in support of having the decision reversed. The brief is not quite as exciting as I'd hoped and contains only minimal legal analysis. Most of the brief is devoted to providing factual background about Facebook, how it's used, and the idea of "Liking" a page or post.

To the credit of Facebook's counsel, though, I suppose there's not much legal analysis to provide. The analysis, actually, is quite simple. Contrary to the District Court's finding, Liking online content is speech--it is a statement by the User. In Bland, the plaintiff-appellant Liked a candidate in the Sheriff's race (who happened to be running against the plaintiff's boss). Liking the campaign Page was the digital equivalent of putting a sign in your front lawn that reads, "Support X for Sheriff."

Moreover, because the Like was an endorsement of a candidate running for elected office, it seems difficult to imagine how it would not be considered political speech, which receives the highest level of First Amendment protections.

The District Court avoided this conclusion by holding that the Like did not "involve[] actual statements." But "statements" are not the only type of "speech" to receive constitutional protection. It has been long settled that "symbolic" speech receives First Amendment protection. The example that comes to mind is the burning of the American flag, which the U.S. Supreme Court held to constitute symbolic speech protected by the First Amendment in Texas v. Johnson.

If the appellate court does reverse, the plaintiff-employee does not win by default. The employer still could argue that he was not terminated as a result of his protected speech or any other defenses that may apply. In the meantime, I'll be curious to see how the employer deals with the present question--is Liking a Facebook page or post "speech" for the purposes of the First Amendment.

See also: Judge's Facebook "Like" Leads to Ethics Complaint

E.D. Pa. Dismisses Nurses' Claims for Missed Meal Breaks

Posted by Molly DiBiancaOn August 9, 2012In: Fair Labor Standards Act (FLSA), Wages and Benefits

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Essentially, the FLSA contains just two requirements for non-exempt employees: (1) that the employees be paid minimum wage; and (2) that they are compensated at a rate at least one and one-half times the regular rate for all time worked in excess of 40 hours in a workweek.

"Gap time" is not covered by the FLSA. Gap time is time worked but not paid. To qualify as gap time, the time worked must not: (1) put the employee in the over-40-hours-in-a-week category, which would trigger the overtime requirement; or (2) bring the employee's hourly rate below the minimum wage.
Gap Time FLSA
An example.

Assume Employee X's regular rate of pay is $20 per hour. Also assume that she worked 38 hours but was paid for only 36 hours in a given workweek. Thus, the employee was paid $720 ($20 x 36) but should have been paid $760 ($20 x 38).

The 2 hours unpaid constitutes "gap time." The employee may have a state-law claim to recover the unpaid $40 but the FLSA would not apply because the 2 hours would not put the employee over 40 hours and, even when the 2 hours are included, her regular rate is more than minimum wage ($720 / 38 = $18.95 per hour).

Gap-Time Claims and the FLSA

The issue of gap time is common in cases involving missed or interrupted meal breaks and in cases of pre- and post-shift work performed before or after the employee clocks in or out. Where an employee alleges that her time was deducted to account for a break but that she did not actually take the break, she is likely to have nor more than a couple of hours a week of unpaid time. And, many times, these 2 or 3 hours is not sufficient to bump the employee into overtime. Thus, they are gap-time claims not properly brought under the FLSA.

In a decision issued yesterday by the Eastern District of Pennsylvania, the court dismissed six related collective action lawsuits brought by registered nurses who alleged they had not been properly paid for training, pre- and post-shift work, and missed meal breaks.

In the order, the court explained that, since the nurses were suing under the overtime provisions of the FLSA, they had to allege that they had worked more than 40 hours in a workweek and that they had not been paid for that time. Instead, the nurses had alleged only that they had worked and not been paid--but failed to allege that the additional time worked put them into the over-40-hours-in-a-week category. In other words, the nurses had alleged only a claim for gap time, which was not a proper claim under the FLSA.

Lynn v. Jefferson Health Sys., Inc., No. 2:09-cv-05549 (E.D. Pa. Aug. 8, 2012)

When the EEOC Goes Too Far--Part II

Posted by Molly DiBiancaOn August 8, 2012In: EEOC Suits & Settlements

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In my post, When the EEOC Goes Too Far, I wrote about an opinion from the Middle District of North Carolina, issued in June. In that case, EEOC v. PBM Graphics, Inc., the court found that the EEOC had caused an unreasonable delay in pursuing its claims, based on a 5+-year-long investigation and seemingly superficial conciliation efforts. The court ordered the parties to engage in limited discovery to determine whether the EEOC's delay had prejudiced the defendant-employer. If so, the court ruled, the employer would be entitled to have the complaint dismissed in accordance with the doctrine of laches.

A laches defense to overzealous claims by the EEOC seems to be gaining traction. A decision issued yesterday by the Western District of North Carolina went farther than the PBM Graphics decision and actually dismissed the case based on this defense.

The facts are similar in both cases. Like the complaint in PBM Graphics, the claims asserted in Propak Logistics were based on the employer's alleged practice of hiring Hispanics and refusing to hire non-Hispanic persons for non-management positions. Similar to the multi-year delay in PBM Graphics, there was a nearly seven-year delay between the time of the initial Charge and the filing of the Complaint. A few other important, albeit unsettling facts, include:

  • the EEOC did not interview the Charging Party until six months after he'd filed his Charge and did not interview him for a response to the employer's position statement until a year after it had been submitted;
  • the EEOC referred the Charge to the DOJ, which initiated and completed its investigation in less than a year, resulting in a No-Cause Finding;
  • there was a four-and-a-half-year delay between the Charge filing and the EEOC's attempt to conduct additional interviews of the relevant decisionmakers;
  • the Charging Party's federal lawsuit was dismissed with prejudice two months before the EEOC issued its Cause Finding;
  • the Charging Party requested a Right-to-Sue-Letter no less than four times;
  • there was a two-year delay between the time the EEOC designated the Charge as a class claim and the first interview of a potential class member;
  • the employer's VP of HR was deposed more than eight years after the Charge was filed; and
  • the facility at which the Charging Party had worked (for all of two months) closed in 2008.
And, as in PBM Graphics, here the employer also filed a motion to dismiss on several grounds, including on the defense of laches. The court denied the motion to dismiss based on failure to state a claim and gave the parties three options: (1) agree to proceed with discovery; (2) have the court consider the motion as a motion for summary judgment; or (3) submit additional briefing and evidence.

The EEOC apparently conceded that there had been a delay. (Indeed!!) This is where we left off in PBM Graphics--the court ordered the parties to engage in limited discovery on this issue. Here, though, the court found that the record contained sufficient evidence to answer the question.

The court explained that, for the purpose of laches, evidence of prejudice may include unavailability of witnesses, change in personnel, and the loss of pertinent records. The court also pointed out that there were periods when the EEOC "took little or no action toward completing the investigation," during which the "back pay meter has been running" as the defendant-employer could be liable for that period. Because back pay is an equitable remedy within the court's discretion, though, the court considered this to be further evidence of potential prejudice.

Finding that the employer had established its laches defense by proving that it "suffered material prejudice as a result of the EEOC's unreasonably lengthy delay," the court explained:

The fact remains, however, that Propak no longer conducts business at the facility at which the alleged discrimination occurred. The purported class of individuals allegedly discriminated against last existed in 2004 and it is uncertain that these individuals could even be identified at this late date. Meanwhile, for the last eight years, Propak has been embroiled in both the EEOC investigation and two lawsuits stemming therefrom, during which time it has continuously incurred attorney's fees. The interests in vindicating Propak's conduct has been served while it appears to be impossible to vindicate the private interests of unidentified and unavailable class members.

Legal music to my ears. The case is a stellar example of a victory of common sense and fairness. It seems that the employer had excellent legal representation, who continued to assert the company's defenses instead of throwing in the towel and being cooperative to a fault. And that was rewarded by the court, which recognized that there are limits to the EEOC's power--i.e., there is a difference between an investigation and a persecution.

I have no doubt that many employers will find this to be an important and valuable resource in their arsenals to defend against the EEOC when it goes too far.

As a side note, the court found that the EEOC's failure to provide its damages calculations to the employer was evidence of an unreasonable delay. This appears to support the use of a laches defense where a defense of failure to conciliate may not be successful, particularly in jurisdictions like the Fourth Circuit that require only the most minimal effort by the EEOC to meet its statutory burden to conciliate in good faith.

EEOC v. Propak Logistics, Inc., No. 1:09cv311 (W.D.N.C. Aug. 7, 2012).