Department of Labor Offers Employers Clarity By Resuming Its Practice of Issuing Opinion Letters

In a welcome departure from its recent practice, the U.S. Department of Labor’s Wage and Hour Division (WHD) recently issued its first new opinion letters in almost ten years. In addition to issuing three new opinion letters earlier this month, on January 5, 2018, WHD reissued seventeen opinion letters previously withdrawn under the Obama administration.

The resurrection of this practice offers employers a useful tool to ensure compliance with federal employment laws. Prior to the Obama administration, the WHD had a longstanding practice of issuing opinion letters in response to inquiries from employers concerning the application of the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA) and other laws enforced by the WHD. These letters have traditionally provided guidance to both employers and employees concerning compliance with the laws and regulations under WHD’s purview. Significantly, for employers, good faith reliance upon WHD’s opinion letters can provide a defense to potential claims of a violation of the FLSA or other laws under the WHD’s jurisdiction. Continue Reading

Uber Drivers’ Class Action Lawsuit Hits Permanent Red Light

Last week, the ridesharing giant, Uber, secured a resounding legal win when a federal judge dismissed a putative class action lawsuit alleging the company violated the Fair Labor Standards Act by failing to pay drivers overtime. The ruling is enormously important, not simply for Uber, but for the growing rideshare technology industry as a whole.

Less than a decade ago, outside of calling a cab company and hoping for the best, the notion of reliably getting from ‘here to there’ via a few button presses on a cell phone was unthinkable. Things have changed. Uber—the now-ubiquitous application that allows patrons to hail various styles of ride—has wholly disrupted the transportation service industry. According to the latest estimates, over 160 thousand Uber drivers dot the roads. Those drivers provide approximately 40 million rides each month, and the company’s 2017 valuation reached $69 billion. The term “Uber” has become a verb (e.g., “I’ll Uber there”) analogous to “just Google it” or “xerox the document.”

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Chicago Considering Predictive Scheduling: What Employers Need to Know

Following a growing nationwide trend, the Chicago City Council is considering new legislation that would require employers to pay employees for any scheduling changes made with less than two weeks’ notice.  If passed, the Chicago Fair Workweek Ordinance will go into effect on July 1, 2018, and the city will join the likes of San Francisco, Emeryville, Seattle, and New York, as well as the state of Oregon, which have passed similar laws targeted at giving employees more predictable work schedules.

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It’s High Time to Update Your Marijuana Policies

The legalization of recreational use of marijuana in several states, including California, has left many employment policies vague and confused. This article offers insights to questions every employer should be asking in light of legalization.

California’s Rollout of Legal Marijuana

California voters passed the Adult Use of Marijuana Act (“Prop 64”) on November 8, 2016, legalizing recreational marijuana use. However, the California Bureau of Cannabis Control only began accepting, processing, and issuing licenses to commercial marijuana dispensaries as of January 1, 2018. As of April 2018, the Bureau has granted over 5,000 licenses for a variety of commercial uses, including retail sales and distribution. Continue Reading

Texas Federal Court Rules That Anti-Discrimination Statute Protects Transgender Individuals

In a landmark ruling, a federal court judge in Texas issued an opinion holding—unequivocally—that Title VII protects transgender individuals from discrimination based on their gender identity. Wittmer v. Phillips 66 Company, No., 4:2017-cv-02188 (S.D.Tex, April 4, 2018). The ruling is the first of its kind in Texas and will likely have a major impact in Texas workplaces. Indeed, recent studies have shown that approximately 430,000 workers in Texas identify either lesbian, gay, bisexual, or transgender (LGBT). Of that number, 79% of transgender workers in Texas have reported—either formally or informally—some kind of discrimination in the workplace, including harassment, discriminatory hiring practices, and promotion denials. Texas employers should take note of the recently-issued decision. Continue Reading

Update: New York State Passes Budget, Creates New Sexual Harassment Obligations For Employers

On April 12, 2018, Governor Andrew Cuomo signed into law a 2019 New York budget implementing the provisions of S-7848A (the “Budget”). Beyond the obligations created by S-7848A, which we summarized in a previous post, the Budget also obligates New York employers to: (i) distribute a written sexual harassment policy; and (ii) perform annual sexual harassment training. The full impact of the Budget on employers is detailed below. Continue Reading

Sex + Discrimination = Liability, Says First Circuit

In Franchina v. City of Providence, 2018 WL 550511, 2018 U.S. App. LEXIS 1919 (1st Cir., Jan. 25, 2018), the First Circuit offered no sympathy to the City in its appeal of a jury award that found the City’s fire department liable for tormenting a former lieutenant on the basis of her sex. The court’s sentiments were readily apparent from the outset of its opinion, which admittedly “decline[d] to put out flames of the Department’s own making.”

Harassment at the Firehouse

In the underlying trial, the plaintiff testified at length about the workplace harassment she experienced, which began after a superior filed a complaint on her behalf about another firefighter’s sexual misconduct toward her. Following the harassing firefighter’s discipline, the plaintiff was exposed to escalating verbal and physical mistreatment. The plaintiff’s colleagues referred to her in derogatory terms, physically assaulted her, gave her poisoned meals, refused to cooperate in providing emergency care at the peril of civilian lives, and once even flung the blood and brain matter of a suicide victim into her face. Despite awareness of these incidents, the Department failed to intervene. On these facts, the jury awarded the plaintiff front pay in the amount of $545,000  and a separate figure for emotional damages. Continue Reading

New York City Council Enacts Package of Bills to Combat Sexual Harassment

On Wednesday April 11, 2018, the New York City Council enacted a package of eleven bills, collectively titled the Stop Sexual Harassment in NYC Act (the “Act”). The Act awaits final signature from the Mayor. Introduced to the New York City Council just one month ago, the Act was likely inspired by the #metoo movement and includes five sections that will directly affect private employers in New York. These sections include: Continue Reading

Ninth Circuit Holds Prior Salary Cannot Justify Wage Differences

Enacted in 1963, the Equal Pay Act prohibits differential payments between male and female employees doing equal work except when made pursuant to a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or a fourth, catch-all exception for “a differential based on any other factor other than sex.” 29 U.S.C. § 206(d)(1). These exceptions are affirmative defenses which the employer must plead and prove.

In Rizo v. Yovino, 2018 U.S. App. LEXIS 8882, an en banc panel of the Ninth Circuit considered whether an employee’s prior salary was a permissible “factor other than sex” under the Equal Pay Act. Prior Ninth Circuit precedent held that “the Equal Pay Act does not impose a strict prohibition against the use of prior salary.” Kouba v. Allstate Insurance Co., 691 F.2d 873, 878 (9th Cir. 1982). Under Kouba, employers were prohibited from using a factor which “causes a wage differential between male and female employees absent an acceptable business reason.” Id., at 876.

On April 9, 2018, a bare majority of the 11 judge en banc panel of the Ninth Circuit overruled Kouba and held that “a legitimate ‘factor other than sex’ must be job related and that prior salary cannot justify paying one gender less if equal work is performed.” Rizo v. Yovino, 2018 U.S. App. LEXIS 8882, at *15. Writing for the majority, the late Stephen Reinhardt announced a bright-line rule that “prior salary alone or in combination with other factors cannot justify a wage differential.” Id., at *5-6. Five judges concurred in the result, but disagreed with the majority’s holding that prior salary can never suffice to constitute a “factor other than sex” sufficient to justify a wage differential. Continue Reading

New Tip Pooling Guidelines For Employers

The recent passage of the Consolidated Appropriations Act of 2018 (“H.R. 1625”), an 878-page omnibus spending bill, significantly changes the rules for tip pooling under the Fair Labor Standards Act (the “FLSA”). While the conditions for taking a tip credit toward federal minimum wage obligations remain essentially unchanged, H.R. 1625 appears to permit the inclusion of a larger group of employees in tip pools when a tip credit is not taken. At the same time, H.R. 1625 still prohibits an employer from keeping any portion of the tips received by its employees and expands the scope of remedies and penalties available for violations of the tip rules. Continue Reading

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