EEOC’s Proposed Rule on Employee Health Wellness Programs

By DeMaris E. Trapp

On June 19, 2015, public comments were submitted for the EEOC’s much anticipated proposed rule to amend the Title I of the ADA to clarify how the statute applies to certain employee health wellness programs. The EEOC’s stated goal for the rule is to harmonize wellness programs’ use of incentives to encourage participation with the ADA’s requirement that disability-related inquiries and medical exams as part of a wellness program must be voluntary and not penalizing in nature.

The Issue: Incentivizing Wellness Programs

The ADA generally prohibits employers from making disability-related inquiries or requiring medical examinations, but provides an exception for voluntary medical examinations, including voluntary medical histories, which are part of a wellness program.  The wellness program is voluntary so long as an employer neither requires participation nor penalizes employees who do not participate.  Prior to the EEOC’s proposed rule, neither the statute nor EEOC regulations addressed the extent to which incentives for participation might affect the voluntary nature of a wellness program, but recent lawsuits filed by the Commission caused concern among employers regarding whether incentivizing wellness programs to any extent violated the ADA.

The Solution: The Proposed Rule

The EEOC drafted the proposed rule to be in line with current ACA and HIPAA regulations regarding wellness programs generally and the use of incentives specifically.  The main points of the rule are as follows:

  • Incentives – Employers are allowed to offer incentives up to 30 percent of the cost of employee-only coverage to employees who participate in a wellness program without violating the “voluntary” requirement of the ADA. E.g., if the total cost of coverage paid by both the employer and employee for self-only coverage is $5,000, the maximum value of incentives for an employee under that plan is $1,500.
  • Confidentiality – Wellness programs that are part of a group health plan may generally comply with their obligation to keep medical information confidential by complying with the HIPAA. Specifically, medical information collected as part of a wellness program may be disclosed to employers only in aggregate form that does not reveal the employee’s identity.
  • Reasonable Accommodations – Employer must provide reasonable accommodations that enable employees with disabilities to participate and to earn whatever incentives the employer offers.  E.g., an employer would need to provide wellness program materials in large print or Braille if necessary to accommodate a participant with vision impairment.

While there is not yet an anticipated date for a final rule, the Commission encourages employers to start complying with the proposed rule now.


Worth the Fight: Conditional Certification of FLSA Collective Actions is Not Automatic

By William R. Horwitz

Conventional wisdom holds that courts reflexively grant motions for conditional certification in Fair Labor Standards Act (“FLSA”) collective actions. As a result, some employers do not even oppose these motions. They are making a mistake. As two recent decisions demonstrate, an employer that opposes these motions has a chance to defeat them or, at least, narrow the scope of the collective.

The Allegations

Earlier this month, judges in the U.S. District Courts for the Southern and Eastern Districts of New York issued decisions on motions for conditional certification in Mata v. Foodbridge LLC, 2015 WL 3457293 (S.D.N.Y. June 1, 2015), and Anjum v. J.C. Penney Co., 2015 WL 3603973 (E.D.N.Y. June 5, 2015). The plaintiffs in both cases were non-exempt employees asserting claims for violations of the FLSA and New York Labor Law, alleging (among other things) that their employers failed to pay them overtime when they worked over 40 hours per week. In Mata, the defendants operated two restaurants and the plaintiff was a pizza counter worker. In Anjum, the defendants operated numerous department stores and the plaintiffs were former sales associates in a store in Staten Island.

The Standard

In order to obtain conditional certification, plaintiffs must establish that they and the putative collective action members are “similarly situated” with respect to an alleged violation of the FLSA. In both Mata and Anjum, the courts discussed the “lenient standard” that courts apply to this analysis, indicating that it requires only a “modest factual showing.”

The Mata Conditional Certification Motion

In Mata, the plaintiff filed a motion to conditionally certify a collective action of all non-exempt employees working at the defendants’ restaurants including “cooks, line-cooks, dishwashers, food preparers, cashiers, delivery persons, and counter persons.” In support of the motion, the plaintiff only submitted his own declaration, in which he described his employment and compensation at the defendants’ restaurants and further alleged that, “through observations of and conversations with other employees, he learned that they were subject to similar violations.”

In deciding the motion, the Mata court acknowledged that a single declaration may provide enough evidence for a court to grant a motion for conditional certification. In this case, however, the court determined that “the declaration actually submitted by Plaintiff in support of his motion does not suffice.” According to the court, the plaintiff attested that he observed other employees working, but provided “no actual support demonstrating knowledge of a common scheme impacting the diverse array of employees” he sought to include. Nor did the plaintiff include sufficiently detailed descriptions of his observations of and discussions with co-workers. Thus, the court concluded that “conditional certification would be inappropriate at this juncture.”

The Anjum Conditional Certification Motion

In Anjum, the plaintiffs filed a motion to conditionally certify a collective action of sales associates in all 47 of defendants’ New York State department stores. In support of the motion, the four plaintiffs and five additional opt-ins submitted declarations detailing their experiences working off-the-clock.

With regard to the declarations, the Anjum court explained that “each of the four Named Plaintiffs has personally attested to the violations they claim occurred during their employment as Sales Associates at the Staten Island Store, and they have identified by name similarly situated employees at both the Staten Island Store and the Manhattan Store, at least some of whom have since opted-in to the collective action.” The court concluded that the plaintiffs satisfied their burden to demonstrate that sales associates in the Staten Island and Manhattan stores were similarly situated. However, according to the court, the plaintiffs presented “no firsthand evidence” of violations at any other stores, relying instead on hearsay and their “belief” that the thousands of employees in the defendants’ other New York stores were subject to the same unlawful policies. Therefore, the court certified the collective action, but limited its scope to sales associates working in the Staten Island and Manhattan stores, excluding thousands of employees working in the employer’s other 45 locations.


Courts plainly grant more FLSA motions for conditional certification than they deny. Nonetheless, this first step in the two-step procedure that plaintiffs must follow in FLSA cases is not automatic. As courts often state, the plaintiff’s burden of proof at this stage is low, but “it is not non-existent.” Accordingly, employers should rarely, if ever, consent to conditional certification. As the Mata and Anjum cases demonstrate, employers have a real opportunity to defeat these motions or narrow the scope of the collective.


The DOL’s Upcoming Proposed Revisions to the FLSA’s White Collar Exemption Regulations

By Dennis Mulgrew

This month the Department of Labor is expected to propose, for the first time since 2004, revised regulations concerning the executive, administrative, professional, outside sales, and computer exemptions under the Fair Labor Standards Act. These revisions were prompted by President Obama’s March 13, 2014 memorandum to the Secretary of Labor, which stated that the exemptions “have not kept up with our modern economy” and which “direct[ed] [the DOL] to propose revisions to modernize and streamline the existing overtime regulations.” After the memorandum was issued, the agency began writing proposed regulations and announced on May 5, 2015, that it had completed drafting them and had submitted them (as required by Executive Order 12866) to the Office of Management and Budget for review.

Procedurally, the “proposed rules” will be published in the Federal Register (an action known as a “Notice of Public Rulemaking” or “NPRM”) for public comment following the OMB’s review, and the DOL has stated that it expects to take this step this month. After the public comment period closes, the DOL will consider the public comments in drafting “final rules;” submit them for a final review by the OMB; and then publish them in the Federal Register with an effective date on which they become law. Although implementation of the final rules may not occur until well into 2016, traditionally the final rules do not differ substantially from the proposed rules. Accordingly, employers should get a sense this month of what the future regulatory landscape will look like.

So what can we expect from these revisions? As an initial matter, it’s almost certain that the DOL will raise the $455 minimum salary requirement, which hasn’t changed since 2004. With regard to the other revisions, however, the DOL’s drafting process has been opaque, and official pronouncements have been largely limited to the Presidential Memorandum and the DOL’s description of the regulatory action on its Spring 2015 agenda, neither of which provide any specific detail. Nonetheless, unofficial pronouncements (including the Secretary of Labor’s remarks before the International Association of Firefighters on March 18, 2014) have repeatedly stressed the DOL’s position that the current regulations result in too many employees falling under the exemptions, particularly retail managers who spend a large portion of their time performing non-exempt duties. Accordingly, there is speculation that the DOL may eliminate the “concurrent duties” provision of 29 CFR 541.106, which provides that simultaneously performing both exempt and nonexempt duties will not automatically disqualify an otherwise exempt employee from the executive exemption. There is also speculation that the regulations may impose a set percentage cap on the amount of time an exempt employee may spend on non-exempt duties, similar to exemption provisions under some state laws (such as California and Connecticut) and to some provisions of the pre-2004 FLSA regulations.

In any event, one thing is certain – some employees who are properly classified as exempt under the current regulations will no longer be exempt under the new rules. Employers will shortly have a preview of just how drastic these changes will be, and should begin evaluating their compliance with the regulations well in advance of the implementation of the final rules.

New Guidance Regarding Employee Handbooks Part Five: Rules Restricting Employees From Leaving Work: What Are The Boundaries?

By Valerie Dutton Kahn

This post is the fifth in a series providing guidance on federal rules regarding permissible and impermissible employer handbook policies and rules. See Guidance Regarding Confidentiality Rules Here, Employee Conduct Rules, Rules Related to Company Logos, Copyright, and Trademark  and Rules Restricting Photography and Recording.  While the recent guidance was issued by the National Labor Relations Board (NLRB), (found here) this guidance is applicable to both unionized and non-unionized employers. The National Labor Relations Act (NLRA) restricts all employers from issuing policies or rules – even if well-intentioned – that inhibit employees from engaging in activities protected by the act, such as discussing wages, criticizing management, publicly communicating about working conditions and discussing unionization.

Restrictions on Leaving Work: Language to Avoid

Although the NLRB acknowledges that employers have a legitimate interest in keeping employees from leaving their posts without warning, they are also adamant that one of employees’ most fundamental rights under Section 7 of the NLRA is the right to go on strike. Accordingly, it is important to make sure that any employer policies restricting employees’ ability to leave work cannot be reasonably read to prohibit walkouts or protected strike activity. While context always matters, the NLRB provides a few clear guidelines to keep in mind when reviewing or drafting policies restricting employees’ ability to leave work.

• DO NOT use words such as “strike” or “walkout” when describing prohibited activity.

• DO NOT prohibit “work stoppages” or “disruptions.”

• DO NOT impose a broad ban on employees entering the employer’s property without permission. This could be interpreted as denying off-duty employees access to outside non-working areas, which is often interpreted as a violation of Section 7.

Permissible Policies Placing Restrictions on Leaving Work

Obviously, employers do have the ability to keep their employees from abandoning their posts for reasons unrelated to protected concerted activity. It appears that it is acceptable to have a relatively broad policy, as long as it avoids the specific language mentioned above. The NLRB has provided two examples of policies that restrict employees’ ability to leave work without infringing on their Section 7 rights:

• “Leaving Company property without permission may result in discharge.”

• Policy prohibiting employees from “[l]eaving Company premises during working shift without the permission of management.”

As always, it is important to remember that policies that do not strictly adhere to these rules can be found to be permissible under the right circumstances. For example, the NLRB found that a broad “no walkout without permission” rule was reasonably read to ensure that patients at a dementia facility were not left without adequate care (rather than as a complete ban on strikes) when taken in context. See Wilshire at Lakewood, 343 NRLB 141, 144 (2004), vacated in part, 345 NLRB 1050 (2005), enforcement denied on other grounds, Jochims v. NLRB, 480 F.3d 1161 (D.C. Cir. 2007). Accordingly, always be mindful of the particular circumstances of the employer in question when crafting policies of this nature.

Labor & Employment Team Secures Arbitration Victory for CDI

Partner Tom Barton and associate Dennis Mulgrew obtained a complete victory for the firm’s client, CDI, following four years of litigation that culminated in a two-week arbitration. In May 2010, Eileen Helfand, a senior client executive, filed suit in Essex County Superior Court against CDI and her supervisor claiming age and gender discrimination, retaliation and hostile work environment because she was disciplined and demoted for failing to diversify her business activities even though she was one of the company’s top revenue generating sales executives.

After the lawsuit was filed, CDI moved to compel arbitration and was successful in doing so after convincing the New Jersey appeals court to reverse the trial court’s refusal to compel arbitration.  The parties arbitrated the case before Arbitrator Jon Sands in November, 2014.  In all, more than 7,000 pages of testimony were taken that included numerous witnesses and several experts.  In a 50-page written opinion and order issued June 1, 2015, Arbitrator Sands found that CDI had successfully proven that it did not discriminate or retaliate against Ms. Helfand.  He recognized that CDI was placed in a “difficult and touchy situation” when it demoted Ms. Helfand during the course of the lawsuit and, rather than finding retaliation, accepted CDI’s defense that it actually treated Ms. Helfand more favorably due to her lawsuit.  This required the company witnesses to acknowledge that the lawsuit did play a factor in their decision-making.