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FMLA Master Class: Feb. 12, 2014

Posted by Molly DiBiancaOn January 22, 2014In: Fair Labor Standards Act (FLSA), Seminars, Past, Wages and Benefits

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The Family and Medical Leave Act has been a part of the workplace for more than a decade, so it’s gotten easier for HR to administer, right?  Not so.  Confusing regulations, coupled with numerous recent changes at both the legislative and regulatory levels and conflicting court decisions, ensure that FMLA continues to be one of the biggest compliance headaches for employers.

Let us help you clarify the confusion surrounding the numerous legislative and regulatory changes to the FMLA and get answers to all your FMLA questions at this advanced-level seminar just for Delaware employers.  Learn More.

Register now for the one-day seminar, and you'll learn:

  • The latest expansion, so you don’t risk noncompliance
  • What recent FMLA court decisions really mean, so you can adjust your policies accordingly
  • Why FMLA record-keeping continues to trip up even the savviest human resource managers, and effective solutions to avoid similar mistakes
  • How to tame the intermittent leave and reduced schedule beasts, and put a stop to abuse and fraud
  • How FMLA, ADA, and your state's leave and workers’ comp laws overlap, so you don’t violate any statute
  • What to expect when an employee’s expecting, so you can balance your business needs with her personal requirements, all within the spirit and letter of the law
  • How to judge a "serious health condition" the way a real judge would, and eliminate disputes about what does and doesn’t constitute it
  • And more...

Visit HRhero.com to see your full Agenda.

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How to Register:

  • Register Now online or call (800) 274-6774.
  • Please mention Seminar Code S1694A when calling

2d Cir. Drops the FLSA Hammer

Posted by Molly DiBiancaOn August 12, 2013In: Fair Labor Standards Act (FLSA), Wages and Benefits

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The FLSA continues to wreak havoc for countless employers. I’ve written numerous times about the difficulties in defending against a claim brought under the FLSA or its state counterparts.  Even meritless claims can be incredibly costly to litigate, leaving many employers feeling like they have no choice but to settle. I believe the term I’ve used on more than one occasion to describe such situations is “legal extortion.” 3d man with hammer

There are, however, some small glimmers of hope from the courts. I’ve written about a line of cases that have rejected plaintiff’s auto-deduction cases.  I also wrote recently about an 8th Cir. decision, Carmody v. Kansas City Board of Police Commissioners, in which the court awarded summary judgment against a class of plaintiff-police officers who failed during discovery to identify with specificity the hours they claimed to have worked but not been paid. This decision was a very big deal for employers.  Which is why a new decision from the 2d Circuit offers even more hope that the law will trend towards dismissal of meritless cases involving legal extortion.

In Dejesus v. HF Management Services, LLC, the plaintiff’s overtime claim was dismissed by the trial court because her complaint did not include “any approximation of the number of unpaid overtime hours worked, her rate of pay, or any approximation of the amount of wages due.”  Instead, her complaint merely alleged that she worked more than forty hours per week during “some or all weeks” of her employment.

On appeal, the 2d Cir. affirmed the decision of the trial court, finding that the plaintiff had not plausibly alleged that she worked overtime without proper compensation under the FLSA.  The court reiterated the standard that it had announced in Lundy v. Catholic Health System of Long Island, decided earlier this year.  Specifically, the standard requires a plaintiff to sufficiently allege 40 hours of work in a given workweek as well as some uncompensated time in excess of the 40 hours.” 

In Lundy, the court did not go so far as to require that the plaintiff include an approximation of the number of overtime hours sought but it did say that including such an approximation “may help draw a plaintiff’s claim closer to plausibility” and thereby avoid dismissal.

Perhaps the most powerful part of the court’s opinion in Dejesus was the acknowledgment that the information about the plaintiff’s allegations rest squarely with the plaintiff.  As the court explained, if an employee has absolutely no recollection whatsoever about the times worked, then he or she should not have pursued a claim in court. 

Hopefully, this trend continues and, with any luck, courts in other circuits will begin to adopt this reasoning in FLSA cases.

Dejesus v. HF Mgm’t Servs., LLC, No. 12-4565 (2d Cir. Aug. 5, 2013).

See also

Another Auto-Deduct Case Bites the Dust (Raposo v. Garelick Farms, LLC (D. Mass. July 11, 2013)).

8th Cir- FLSA Plaintiffs Must Spell It Out (Carmody v. Kan. City Bd. of Police Comm’rs (8th Cir. Apr. 23, 2013)).

2d Cir- FLSA Does Not Cover Gap Time (Lundy v. Catholic Health Sys. (2d Cir. Mar. 1, 2013)).

Another Employer's Auto-Deduct Policy Is Upheld (Creeley v. HCR ManorCare, Inc., (N.D. Ohio Jan. 31, 2013)).

6th Cir. Affirms Dismissal of FLSA Gotcha Litigation (White v. Baptist Mem'l Health Care Corp. (6th Cir. Nov. 6, 2012)).

The Legality of Automatically Deducting Meal Breaks (Camilotes v. Resurrection Health Care Corp. (N.D. Ill. Oct. 4, 2012)).

E.D. Pa. Dismisses Nurses' Claims for Missed Meal Breaks, Part I and Part II (Lynn v. Jefferson Health Sys., Inc. (E.D. Pa. Aug. 8, 2012)).

FLSA Victory: Class Certification Denied (Pennington v. Integrity Comm’n, LLC (E.D. Mo. Oct. 11, 2012)).

Another Employer's Auto-Deduct Policy Is Upheld

Posted by Molly DiBiancaOn February 19, 2013In: Fair Labor Standards Act (FLSA), Wages and Benefits

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In Creely v. HCR ManorCare, Inc., a class of 318 nurses, LPNs, CNAs, an admission coordinators alleged that they had not been paid for time worked during meal breaks. The employer was a nationwide provider of short- and long-term medical and rehabilitation care with more than 300 facilities. Each facility had its own management team and HR personnel but its policies were developed at company headquarters and implemented at all facilities.

The employer's meal-break policy required that hourly employees take a daily 30-minute meal break. The employer's timekeeping system automatically deducted 30 minutes from the time worked a shift longer than 5 or 6 hours.

Employees did not clock in or out for their breaks. An employee who missed a break was required to fill out a "missed-punch" form and submit it to a manager, who would sign it and turn it into the Payroll Department. Payroll personnel would then adjust the timecard to reverse the automatically deducted 30 minutes.

Unlike the plaintiffs in White v. Memorial Baptist Hospital, the plaintiff-employees here did not argue that the policy was per se illegal. They also did not argue that the employer had an unofficial "policy to violate" its lawful policy. Instead, they argued that they were denied overtime pay due to the employer's implementation of the auto-deduct policy. Specifically, they claimed that they had not been paid for breaks that they'd not taken because:

1. Defendant illegally shifted the burden of monitoring time worked to the employees by requiring them to cancel the automatically deducted time;
2. Defendant took no affirmative measures to monitor whether the employees actually received their meal breaks;
3. Defendant failed to train or inform employees or management what to do if a meal break was missed or interrupted; and
4. The employees didn't report missed breaks because they were discouraged from doing so.

It was these arguments that led the court to decertify the class, finding that the plaintiffs were not similarly situated for the purposes of the FLSA. The court found that the application of the lawful auto-deduct policy varied between managers and facilities. For example, some managers provided follow-up training to the plaintiffs on the missed-punch forms, while other managers were accused of actively discouraging the plaintiffs from submitting the forms. In other words, the Plaintiffs' knowledge of and training on the policy, and the application of the policy itself, varied in large part depending on the individual managers at the employer's facilities.

This case is yet another in a growing line of auto-deduct cases that fail at the final certification stage.
Creely v. HCR ManorCare, Inc., No. 09-2879 (N.D. Ohio Jan. 31 2013).

See also
The Legality of Automatically Deducting Meal Breaks
E.D. Pa. Dismisses Nurses' Claims for Missed Meal Breaks

Going Gaga over the Not-So-Little Overtime Monster

Posted by Molly DiBiancaOn February 13, 2013In: Fair Labor Standards Act (FLSA), Wages and Benefits

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Lady Gaga has cancelled the remaining dates in her Born This Way Ball tour. Try to hold back those tears, dear readers. I know you're upset.

I, too, am upset by this news, particularly because I had tickets to next week's show in Philadelphia. Ok, I didn't buy the ticket, it was a gift, but, dag nab it, I was going to put it to good use! Although "Mother Monster," as she's known, doesn't exactly make regular appearances on my playlist, she's supposed to put on one heck of a show and, by George, I was excited to see it!

Alas, it appears that the Rock 'n Roll gods, which would be the musical gods I pay homage to most days, may be punishing me for straying into the land of popular music. Hopefully I will be forgiven by attending the Mumford & Sons show on Sunday and The Who show in Atlantic City next Friday.

But I digress. Back to Gaga.

As I said, I am disappointed to hear that Gaga won't be able to perform next week. Disappointment is a sentiment that the pop star understands. She was very disappointed when her former personal assistant (and personal friend), sued her in federal court.

In the suit, the assistant, Jennifer O'Neill alleges that she is owed more than 7,000 hours in overtime pay because, she claims, she was "on call" 24 hours a day, 7 days a week. (No, really, that's what she alleges). She was paid--in case you're wondering--$75,000 per year.

Lady Gaga's defense rests, in part, on her claim that the assistant was not "on the clock" during all of those long nights but, instead, was hanging out with Gaga as her friend. Gaga insisted that she and O'Neill were spending time together as friends, not as employer and employee. Gaga went on to say that she had showed O'Neill the "time of her life," and that O'Neill "slept in Egyptian cotton sheets every night, in five-star hotels, on private planes, eating caviar."

That may be all well and true but it does not serve as a legal defense to a claim for unpaid wages. The FLSA provides that workers cannot waive their right to wages earned. So, even if O'Neill had said, "Ahh, Gaga, you needn't pay me anything for this work. It's payment enough that I have the honor to hang out with such a superstar and her jet-setter friends," she would not have waived her right to be paid for time worked.

Of course, that doesn't mean that she's entitled to overtime, either. We'll have to wait and see what the court says.

Until then, though, here's a snippet of entertainment to hold you over. During her deposition, Gaga gave plenty of entertaining testimony, as reported by the New York Post. Many of her comments sound like what I'd like to say to FLSA plaintiffs. Here are a few other gems with my comments in brackets:

"Are you going to stare at me like a witch this whole time -- honestly?"
[How many times I would have liked to say that to my opposing counsel and/or the plaintiff who is sitting across the table from me, giving me the death stare.]

"I'm quite wonderful to everybody that works for me, and I am completely aghast to what a disgusting human being that you have become to sue me like this."
[The sentiment of many employers, who feel the same way when an employee files suit.]

"You don't get a schedule that is like you punch in and you can play [expletive] Tetris at your desk for four hours and then you punch out at the end of the day. This is -- when I need you, you're available."
[Boy, that sounds an awful lot like "you're on call."]

And, now, my personal favorite:

"This whole case is bulls--t, and you know it."
[Well, that pretty much sums it up, doesn't it?]

Maybe Gaga is cooler than I've given her credit for, after all. For more celebrity testimony, see this post about rap star Lil' Wayne's deposition.

10th Cir. Victory for Employer in Off-the-Clock Claim

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

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Wage-and-hour lawsuits continue to plague employers around the country. Off-the-clock claims are some of the most difficult to defend because, by definition, the employee did not record the time in dispute. Trying to disprove an allegation is about as easy as boxing shadows.

Employers who face these off-the-clock claims are understandably frustrated by the ability of an employee to bring a lawsuit based on the employee's failure to comply with workplace rules. A recent trend has been the application of an affirmative defense similar to the one used in harassment cases. This defense is a very positive development for employers.

A recent decision by the 10th Circuit applied a similar reasoning with a similarly positive result. In Brown v. ScriptPro, LLC, the plaintiff-employee claimed that he'd worked from home during a 4-month period so he could take time off before the birth of his child. Despite the company's policy that required employees to record and submit time worked, the plaintiff claimed that he did not report the time. After he was fired for performance issues a few months later, he filed suit

The district court dismissed the suit, finding that the employee had failed to meet his burden to produce evidence of the overtime he claimed to have worked. He argued that the employer failed to keep the required time records. As a result, he argued, his burden to prove the amount of time worked should be lessened. The 10th Circuit disagreed.

Instead, the court found that the employee not only could have submitted the time he worked from home but, also, that he should have done so as required by the employer's policy. Thus, the employee's failure to record and report all time worked was fatal to his claim.

Brown v. ScriptPro, LLC, No. 11-3293 (10th Cir. Nov. 27, 2012).

A Christmas Miracle? Employer Awarded Costs in FLSA Suit

Posted by Molly DiBiancaOn December 18, 2012In: Fair Labor Standards Act (FLSA), Wages and Benefits

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In Frye v. Baptist Memorial Hospital, the Sixth Circuit upheld the legality of automatically deducting meal breaks. The decision was not the first to hold that an automatic-deduction policy does not constitute a per se violation of the FLSA. Nor will it be the last.

But it is an important one to employers who utilize these policies.

In Frye, the court affirmed the decertification of the collective action. As a result, the opt-in plaintiffs' claims were dismissed. The named plaintiff's claims also were dismissed because he had not filed a notice of consent within the three-year statute of limitations.

With the entire suit dismissed, the employer sought to have its defense costs reimbursed by the plaintiff. And, in what can be described only as a total victory, the employer's request was granted. The Sixth Circuit affirmed the award of more than $55,000.

The court first held that nothing in the FLSA precludes an award of costs to a prevailing defendant. As most employers know, the FLSA specifically provides for an award of costs to a prevailing plaintiff. It does not, however, address prevailing defendants. Nevertheless, the Federal Rules of Civil Procedure does contain such a provision. Rule 54, specifically, provides that a prevailing party may seek to have their costs reimbursed.

Here, the court held, the employer was, indeed, a "prevailing party" because it had been successful in having the class decertified and the named plaintiff's claims dismissed. Thus, the court found, the defendant was entitled to recover the costs expended in defending against the lawsuit.

Could this be the wave of the future? Costs awarded to the defendant employer in claims brought under the FLSA? Ah, to dream a little dream.

[Editor's Note: This post erroneously described the award as including fees and costs, whereas the award represented costs only. The post was modified to correct the error.]

See also,

E.D. Pa. Dismisses Nurse's Claim for Missed Meal Breaks

6th Cir. Affirms Dismissal of FLSA Gotcha Litigation

Posted by Molly DiBiancaOn November 12, 2012In: Fair Labor Standards Act (FLSA), Wages and Benefits

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FLSA lawsuits based on missed meal breaks and automatic-deduction policies are one of many current trends in of wage-and-hour litigation. Meal-break claims brought by nurses and hospital staff are a particularly common scenario. But employers in the health-care sector need not give up hope, as there have been several recent opinions in favor of the employer in such cases. See FLSA Victory, Class Certification Denied. A recent decision by the 6th Circuit offers another positive example.

In White v. Baptist Memorial Health Care Corporation, (6th Cir. Nov. 6, 2012),the plaintiff, an ER nurse, did not have regularly scheduled meal breaks but was permitted to take them as the demands of her work allowed. The hospital had an automatic-deduction policy, whereby 30 minutes were deducted from time worked unless the employee submitted a time-exception form. The plaintiff in the case did not submit the form when she missed her meal break and did not complain that she was not being paid for that time.

After the district court awarded summary judgment to the employer, the employee appealed to the Sixth Circuit. The appellate court affirmed the decision, finding that the employee's failure to comply with the hospital's procedures by submitting the time-exception form precluded the hospital from knowing about the unreported time.
This line of reasoning is similar to the affirmative defense available to employers in harassment lawsuits. The theory behind it is that an employer cannot be held liable for conduct of which it does not know. The burden to report unlawful harassment--and, in this case, unpaid time--falls to the employee.

This is not only a logical holding but, also, an important one for employers. It supports the idea that an employee will not be permitted to sit on information and wait to use it against her employer whenever she's so inclined. The decision is a bar against "Gotcha" litigation, which I've also described as "Legal Extortion." With any luck, federal courts will continue to embrace this approach in similar FLSA cases and collective actions.

FLSA Victory: Class Certification Denied

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

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Ask any employment lawyer what the worst employment law is and I'd be willing to bet the overwhelming majority would answer, "the FLSA." Although the Fair Labor Standards Act (FLSA) was written with the right idea in mind--to ensure employees are paid for the work that they perform--the law is sorely out of date and subject to gross abuse by employees and employees' lawyers. Most of the FLSA cases I see look more like extortion than enforcement actions.

Despite the law's rampant abuse, the number of suits filed under the FLSA continue to increase. There are any number of reasons for this. One (big) reason is the potential recovery for the plaintiffs' lawyers. A victorious plaintiff in an FLSA claim is entitled to recover all of his reasonable attorney's fees and costs. When the parties reach a settlement--which is overwhelmingly the case--the employees' lawyer usually gets one-third of his clients' recovery, often resulting in a disproportionately large payday for the lawyer even when his client receives a small sum.

Another reason for the popularity of FLSA claims is the easy standard for conditional certification. The burden is very, very low for a plaintiff seeking to conditionally certify a class of employees. And, once certification is granted, the likelihood of settlement increases exponentially.

Which is why I get particularly excited when I read about a decision denying conditional certification of a collective action under the FLSA. One such decision, Pennington v. Integrity Communications, LLC, was issued by a federal court in Missouri on October 11, 2012.

In Pennington, the two plaintiffs worked as cable installers. They alleged that they were improperly classified as independent contractors. They contended that they should have been classified as employees and, consequently, were owed back-pay overtime and other damages. The plaintiffs moved to conditionally certify a class of similiarly situated individuals and notify potential class members.

The court reiterated that the burden on the plaintiffs at this stage is low, explaining that, typically a motion for conditional certification is decided only on the plaintiffs' affidavits. Here, the plaintiffs had, indeed, submitted affidavits, in which they averred that they regularly worked more than 40 hours per week--specifically, they averred that they worked, on average between 50 and "at least" 70 hours per week. The plaintiffs also averred that they were aware of other cable installers, who similarly worked more than 40 hours per week.

What the plaintiffs did not aver, however, was that those other installers weren't paid at an overtime rate for those hours worked over 40 in a workweek. Because of this omission, the court denied the plaintiffs' motion for conditional certification, finding that they'd failed to meet their burden to point to similarly situated individuals. As a result, the court denied the motion to certify a class.

And that is good news for employers. But there's bad news, too. The decision is not a total victory for the employer. The plaintiffs will get another bite at the proverbial apple and are entitled to re-file their motion with revised affidavits. Nevertheless, every small win under the FLSA is an important one. And it's important that the court adhered to the proper standard, instead of granting the motion in a rubber-stamp manner.

Pennington v. Integrity Commun's, LLC, No. 1:12-cv-5 SNLJ, 2012 U.S. Dist. LEXIS 146296 (E.D. Mo. Oct. 11, 2012).

See also
The Legality of Automatically Deducting Meal Breaks
Here's to [My] Job Security
The FLSA Is Legal Extortion of Employers
Top 10 FLSA Blogs

The Legality of Automatically Deducting Meal Breaks

Posted by Molly DiBiancaOn October 10, 2012In: Fair Labor Standards Act (FLSA), Wages and Benefits

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Many employers automatically deduct thirty minutes for employees' meal breaks. The employer's policy provides that an employee must take their allotted 30-minute break unless a supervisor authorizes the employee to work through the break. And, in the unusual case when the employee does have to miss her break, she must report it to ensure she gets paid.

There are several reasons to have an automatic-deduction policy. For example, for employees who spend most of the workday out of the office without access to a time clock, an automatic-deduction policy can be the only realistic option for timekeeping purposes. It also means less administrative work and room for error when employees forget to clock back in after a break. Auto-deduct policies are very common in hospitals and other health-care facilities.

But this type of meal-break policy isn't popular only with employers; plaintiff's counsel have taken a liking to it, as well. Over the last few years, numerous suits have been filed as class actions under the state and federal (FLSA) wage laws. The suits allege that the employees did not get the benefit of the full meal break but were not paid for the time because of the automatic-deduction policy. As with any class or collective action, meal-break suits can mean big costs for employers.

But the news isn't all bad. Several opinions have been issued recently finding against plaintiffs in automatic-deduction cases. A case issued last week by a court in the Northern District of Illinois is yet another indication that the tides may have turned in favor of employers. In Camilotes v. Resurrection Health Care Corp., No. 1:10-cv-00366 (N.D. Ill. Oct. 4, 2012), the court decertified the FLSA collective action, finding that the claims and defenses were too individualized to justify proceeding as a class.

Specifically the court pointed to the fact that the plaintiffs worked different shifts and reported to many different supervisors, each of whom enforced the meal-break policy differently. The court also looked to the fact that the plaintiffs alleged different numbers of missed breaks whether those missed breaks actually caused the plaintiffs to have worked overtime.

Although the case is a victory for the employer, it was a victory hard fought, as the employer had to get through the costly discovery process before succeeding on decertification.

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).

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)

Cal. Meal-Break Decision and Delaware Employers

Posted by Molly DiBiancaOn April 16, 2012In: Cases of Note, Fair Labor Standards Act (FLSA), Wages and Benefits

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The California Supreme Court issued its long-awaited decision in Brinker Restaurant Corp. v. Superior Court on April 12, 2012. The decision contains some very good news for employers regarding obligations relating to employee meal breaks and could have some significant implications for Delaware employers covered by Delaware's meal break law, 10 Del. C. § 707.

Background

Brinker Restaurant Corporation operates 137 restaurants in California, including Chili's Bar and Grill, Maggiano's Little Italy, Romano's Macaroni Grill and others. In 2002, a former employee brought a putative class action against Brinker on behalf of nearly 6,000 hourly restaurant employees. The complaint alleged that Brinker failed to provide rest and meal periods in accordance with California legal requirements, required employees to work off-the-clock during meal periods, and unlawfully altered their time records. The plaintiffs obtained class certification in the trial court on each of these claims, but the Court of Appeal reversed, holding that class certification was improper as a matter of law. The Supreme Court, in a unanimous decision, partially agreed and partially disagreed with both the trial court and the Court of Appeal.

Meal Periods

There were two distinct questions before the Supreme Court concerning meal periods. First, does an employer have a duty to ensure that a meal period is taken and thus violates the law if the employee does not in fact take a 30-minute duty-free break? To that question, the Supreme Court answered "no" - employers are not required to ensure that an employee performs no work during the meal period. Instead, the Supreme Court held that an employer satisfies its meal period obligations by:

• Relieving the employee of all duty for the period;
• Relinquishing control over the employee's activities;
• Permitting the employee a reasonable opportunity to take an uninterrupted meal period; and
• Neither impeding nor discouraging the employee from taking the meal period.

The Court cautioned that employers unlawfully discourage employees from taking meal breaks if they provide incentives for or encourage skipping breaks, coerce employees to forego them, or otherwise make it difficult for employees to take breaks, whether through scheduling or otherwise.

It is this ruling that has the most significance for Delaware employers. Under the Delaware meal break law, an employer "must allow" a 30 minute meal break to persons working 7 ½ or more consecutive hours. Like the California law, the break must be given after the first 2 hours of work, but unlike the California law, the Delaware statute imposes an additional restriction in that the meal break must be given "before the last 2 hours."

Based on the guidance from Brinker, as long as a Delaware employer "allows" the employee to take a meal break during the specified time, the employer need not require the break. If the employee, without any employer pressure, works through his or her break and is paid for it, that would not be a violation of the law. It should also be noted that the Delaware law does not mandate that the meal break be a paid break.

The second meal period question in Brinker concerned the timing of meal periods (the so-called "floating five-hour rule"): must meal periods be scheduled so that an employee is not working more than five hours either before or after the meal period? The Court answered "no" to this question too. The employees in Brinker were sometimes required to take their meal periods an hour into their shifts, such that they were working seven hours after the meal period.

The Court held that this practice was not unlawful and that there is no limit on the number of hours that can be worked after the meal period. Instead, it concluded that:

• Employees must be provided a 1st meal period at some time before the end of the 5th hour of work; and

• Employees who work 10 or more hours must be provided a 2d meal period before the end of the 10th hour of work.

Since the Delaware law is more specific as to when the break must occur, this holding has less significance for Delaware employers. For employees working 7 ½ consecutive hours, the meal break must be allowed no later than 5 hours after the beginning of the work day. Delaware law is silent on the need for a second break if the work day extends beyond 7 ½ hours.

Rest Periods

There were two questions regarding rest period rules. First, does California law require that the rest period be taken before the meal period is taken? The Court answered "no" to this question.

Second, what does the Wage Order mean when it says that employees have a right to a 10-minute rest period for each "four hour work period or major portion thereof"? The Court rejected Brinker's argument that "major portion" means 3-1/2 hours, and held instead that it means "more than two hours." Since Delaware has no rest period law at present, that ruling has no Delaware implications.

Off-the-Clock Work

The sole question regarding the off-the-clock work claim was whether class certification should have been granted or denied. In support of class certification, the plaintiffs had offered anecdotal evidence of "a handful of individual instances" of off-the-clock work. The Court held this evidence insufficient to establish a "uniform, company-wide policy" of allowing off-the-clock work. Instead, Brinker's written policy prohibited working off the clock.

Furthermore, Brinker's time records showing an employee was clocked out created a presumption that the employee was not working. Finally, an employer is liable for off-the-clock work only when it knew or should have known that the employee was performing work off the clock. The Court held that to rebut the time records and establish employer knowledge would require individual evidence and determinations. Therefore, liability could not be established on a class-wide basis, and class certification was improper.

Bottom Line

The Brinker decision is a welcome relief to employers because the California Supreme Court declined to impose strict liability for missed or non-compliant meal periods. Since California has been a leader in providing work benefits to employees, and over time, policies that began in California have drifted to Delaware (the implied covenant of good faith and fair dealing being a prime example), the Brinker ruling should cause Delaware employers to breathe a sigh of relief.

FLSA Compliance: There's an app for that

Posted by Molly DiBiancaOn May 10, 2011In: Internet Resources, Wages and Benefits

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The Wage-and-Hour Division of the Department of Labor (DOL) has released an app called "DOL-Timesheet."  The app works on the iPad and iPhone but may later be released for Android and Blackberry. As described by the DOL:DOL Timesheet app

This is a timesheet to record the hours that you work and calculate the amount you may be owed by your employer.  It also includes overtime pay calculations at a rate of one and one-half times (1.5) the regular rate of pay for all hours you work over 40 in a workweek.

The app does not handle tips, commissions, bonuses, deduction, holiday pay, shift differentials or other non-standard methods of pay.

One notable feature of the app is the ability to send a copy of the report via email.  This may be of particular use to employees who work "on the road" or even from home, especially if their time entries are sporadic.  For example, if an employee sends a series of emails from his iPhone at home, after the end of the normal business day, this may be a helpful way for him to record that time worked and communicate it to his employer.

To set up the app, the user is asked to enter the Employer name, the hourly rate of pay, and the start of the workweek.  (Picture at left).  A nifty little feature occurred when I entered $6.00 as the hourly rate.  A warning popped up, alerting me that I'd entered an amount less than the federal minimum wage.  (Picture at right).

DOL Timesheet appPicture3

The three screens below show how users can create a new timesheet; create a new time entry using either the timer or manually; and send the report via email.

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There is also a glossary of wage-and-hour terms and, conveniently, contact information for the DOL's WHD.

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Ah, technology.  Whatever will they think of next?

Civil Unions: Federal Tax and Benefit Implications

Posted by Lauren Moak RussellOn April 28, 2011In: Wages and Benefits

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Last week, we addressed some of the implications of Delaware's Civil Union and Equality Act (the "CUEA") of 2011, which will become effective on January 1, 2012. In this post, we will address the ways in which the bill may or may not affect employers whose benefit structure is governed by federal law.3D Figure Holding Hundred Dollar Bill

As a preliminary matter, it is important to recognize that the CUEA is a Delaware law, so it  has limited impact on matters governed by federal law. By contrast, the definition of marriage under federal law is governed by the Defense of Marriage Act ("DOMA"), which defines marriage as being between one man and one woman. While the Obama Administration has indicated that it believes DOMA is unconstitutional, and will no longer defend the statute in court, DOMA is still in effect. Consequently, for federal tax and ERISA purposes, the definition of marriage remains limited to heterosexual relationships.

Federal Employee Benefits

Many employers who provide benefits to their employees are governed by ERISA, not state law. ERISA governed benefits include both healthcare and retirement benefits, such as health insurance, life insurance, and 401k. If you are a private employer who pays for a portion of the benefits provided to your employees, chances are good that you are subject to ERISA. Because ERISA preempts state law, an employer subject to ERISA generally cannot be required to provide benefits to partners in a civil union.

There is an important distinction, however, between insured and self-insured plans. While self-insured plans are fully governed by ERISA, insured plans are subject to an exception that leaves them open to state insurance laws. Consequently, to the extent that Delaware's insurance code or regulations imposed by the Insurance Commissioner require coverage or benefits for married spouses and civil union partners, those laws or regulations will apply to insured ERISA plans.

It is important to remember, however, that just because you may not be required to provide such benefits doesn't mean you can't provide them. Many employers have determined that it is good policy to provide equal benefits to homosexual and heterosexual partners, regardless of marital status. If your business subscribes to that philosophy, there is no reason to change it now.

Taxation of Employee Benefits

Federal taxation of employee benefits will not be altered by the CUEA. Under federal tax law, insurance and other benefits provided to an employee's spouse are generally tax exempt. Similar benefits provided to a civil union or domestic partner are generally not tax  exempt. That will not change.

However, employers should be aware of an exception to this rule. Benefits provided to a civil union or domestic partner, where the partner is a tax dependent (i.e. the partner receives more than 50% of his or her support from the employee), are tax exempt regardless of marital status. For example, if an employee's partner stays home to care for children, and is covered under the employee's health insurance, the value of the insurance benefit to the partner is tax exempt, regardless of marital status. This exception does not apply to cafeteria or flexible spending plans.

Learn More!

The attorneys of Young Conaway's Employment Law Section will be discussing the contours of the CUEA and its employment law implications at the Annual Employment Law Seminar, on May 11, 2011. Please join us to learn more about this topic, which is sure to impact all Delaware employers directly or indirectly!