National Preliminary Injunction Blocks New FLSA Salary Test from Taking Effect on December 1, 2016

A federal court issued a national preliminary injunction prohibiting the Department of Labor’s new salary rule for Executive, Administrative, Professional, Outside Sales and Computer Employees from taking effect. The final rule, published on May 23, 2016 would have gone into effect on Dec. 1, 2016. We wrote about this previously and at this time, recommend that employers suspend, but not cancel their implementation plans.

The rule mandated that employees falling under the executive, administrative or professional exemptions must earn at least $913 per week ($47,476 annually), which would more than double the currently existing minimum salary level of $455 per week. In State of Nevada v. U.S. Dep’t of Labor, No. 4:16-cv-731 (E.D. Tex. filed November 22, 2016) District Court Judge Amos L. Mazzant III (appointed by President Obama) ruled that the Department of Labor cannot impose the new salary requirement as a condition of exempt status of executive, administrative or professional (“EAP”) employees because the plain language of the Fair Labor Standards Act focuses on the duties of exempt EAP employees, and not their level of pay.

Continue reading “National Preliminary Injunction Blocks New FLSA Salary Test from Taking Effect on December 1, 2016”

2016 Presidential Election Aftermath: What Can be Expected in the Labor & Employment Law Space

We continue to analyze and assess what the 2016 election results mean in the Labor & Employment Law space, and what we can expect from a GOP White House, House and Senate.  The last two times that this GOP alignment was present were 1929 and 2007 (let’s hope that the financial events that followed those two occasions – the Great Depression and the Great Recession – do not repeat themselves this time around).

It is difficult to predict what President Donald J. Trump’s actual agenda will be, because his campaign was long on broad concepts and very short on serious, detailed policy presentation. While Candidate Trump said many things, including contradictory things, about many topics, some themes can be discerned from pre-election and post-election comments.  Also, some issues have been on the GOP wish list for some time, but until they could have the alignment of White House and Congress that will be in place in January, those wish list items, as a practical matter, were just wishes.  Here are our impressions about what changes will occur.

Continue reading “2016 Presidential Election Aftermath: What Can be Expected in the Labor & Employment Law Space”

Ruling Postponed on Whether the DOL Exemption Rules will be Enjoined Before December 1, 2016

Since our November 10 Post, Will the DOL Exemption Rules Be Enjoined Before December 1, 2016?, federal District Court Judge Amos L. Mazzant, III heard nearly 3.5 hours of argument today on the Emergency Motion for Preliminary Injunction to stop nationwide implementation of the Department of Labor’s May 16, 2016 Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees.  If not enjoined, this Final Rule will require that, by December 1, 2016, employees be paid a weekly salary of at least $913 (annually, $47,476) to maintain “white collar” exemption from overtime and other federal Fair Labor Standards Act requirements, as long as the employees’ duties satisfy the exemption rules too.

Continue reading “Ruling Postponed on Whether the DOL Exemption Rules will be Enjoined Before December 1, 2016”

Will the DOL Exemption Rules Be Enjoined Before December 1, 2016?

The Department of Labor’s May 16, 2016 Final Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees require that, by  December 1, 2016, employees must be paid a weekly salary of at least $913 (annually, $47,476) to maintain “white collar” exemption from overtime and other federal Fair Labor Standards Act requirements, as long as the employees’ duties satisfy the exemption rules too.  We wrote about this previously.

Last month, twenty-one states, led by Nevada and Texas, filed an emergency motion to enjoin implementation of the Final Rule in a federal court action commenced the month before.  State of Nevada, et al. v. DOL (USDC, Eastern District of Texas, case No., 4:16-cv-00731-ALM).  At its core, the action challenges DOL authority to increase the salary threshold and set automatic increases, and whether the Final Rule infringes on state government employer’s sovereignty.  This blog post does not analyze the merits of this action, but instead updates our clients and friends on its status given that we are now just a few weeks away from December 1.

Continue reading “Will the DOL Exemption Rules Be Enjoined Before December 1, 2016?”

Federal Court Orders Stop to DOL’s Persuader Rule

On June 27, 2016, a Texas federal court granted a preliminary injunction preventing the Department of Labor (DOL) from moving forward on a nationwide basis with the July 1st enforcement of its Final Rule Interpretation of the “Advice” Exemption to Section 203(c) of the Labor Management Reporting and Disclosure Act (LMRDA) (also known as the DOL’s “Persuader Rule”). The court order was based on findings that plaintiffs in the case of National Federation of Independent Business, et al. v. Perez, 5:16-cv-00066-C, were likely to succeed on the merits of their claims in establishing that the DOL’s Persuader Rule is inconsistent with federal law and exceeds the DOL’s statutory authority.

Continue reading “Federal Court Orders Stop to DOL’s Persuader Rule”

In Wiest v. Tyco Electronics Corp., the Third Circuit Further Clarifies a Plaintiff’s Prima Facie Burden for a Retaliation Claim under SOX

Wiest v. Tyco Electronics Corp., a case that has been closely watched by Sarbanes-Oxley (“SOX”) practitioners, may have finally come to a close after nearly six years of litigation. In its decision (click here to view), the Third Circuit affirmed the District Court’s granting of summary judgment for Tyco, and provided additional clarification on what a plaintiff must do to make out a prima facie retaliation claim under SOX.

Tyco asserted that it fired Plaintiff Jeffrey Wiest in 2008 for inappropriate sexual relations with two female co-workers and sexual harassment. He then brought suit under SOX, alleging that Tyco terminated him for raising concerns to his managers about excessive corporate expenditures.

The case has twice been on appeal to the Third Circuit. In 2010, Tyco successfully moved to dismiss Wiest’s complaint on the basis that his complaints did not amount to “protected activity” under SOX. Upon appeal, the Third Circuit reversed and remanded, adopting the worker-friendly standard that an employee engages in “protected activity” where he has a “reasonable belief” that the employer has violated or may violate the law or SEC rules (rejecting the standard, announced and later abandoned by the DOL’s Administrative Review Board, that the complaint must “definitively and specifically” relate to an existing violation of a particular anti-fraud law).

After remand, Tyco was eventually granted summary judgment on the basis that Wiest’s complaints were not a “contributing factor” in his termination. Wiest again appealed to the Third Circuit, which affirmed, and in the process adopted the standard of several other Circuits that a “contributing factor” was “any factor, which alone or in combination with other factors, tends to affect in any way the outcome of the decision.”

The “contributing factor” standard is a relatively low bar, specifically when compared to the causation standard for retaliation claims under some other statutes. Under Title VII, for example, an employee must establish that his protected activity was a “but-for” cause of the adverse action. See Univ. of Texas Southwestern Med. Ctr. v. Nassar, 133 S.Ct. 2517, 2521 (2013) (“Title VII retaliation claims require proof that the desire to retaliate was the but-for cause of the challenged employment action.”). Nonetheless, the Third Circuit had no trouble finding that Wiest was unable to meet his burden, noting that there was a ten-month gap between Wiest’s alleged protected activity and the adverse action; that he received praise and commendations in the interim; that the persons who initiated the investigations into Wiest’s inappropriate behavior had no knowledge of his protected activity; and that other persons in the accounting department who were involved (or more involved) in the same activity as Wiest did not receive any negative treatment.

Further, the Court also held that, even if Wiest were able to establish a prima facie case, his claim would have failed regardless. An employer may still rely on the defense that it would have taken the adverse action in the absence of protected activity, and the Court held that “Tyco has demonstrated that it would have taken the same actions with respect to Wiest in the absence of Wiest’s accounting activity given the thorough, and thoroughly documented, investigation [into his inappropriate activity] conducted by its human resources director.”

The Wiest decision is useful guidance for employers defending against SOX retaliation claims, as it outlines potential arguments (concerning the temporal relationship between the protected activity and adverse action, intervening events, and the thoroughness of internal investigations) that may be used to defeat an inference of causation or to establish the affirmative defense that the adverse action would have occurred regardless.