Mark Terman, Labor & Employment partner in the Los Angeles office, was recently interviewed for a story on Bring Your Own Device (BYOD) policies for employers. As more and more employees use their own personal devices for work purposes BYOD policies are quickly becoming important for employers to have in place. The story was picked up by news outlets around the country, including in Miami, FL, Seattle, WA, Jacksonville, FL, Toledo, OH, Milwaukee, WI, Spokane, WA and Orlando, FL. To view the story that was carried by CBS 4 in Miami click here. To view posts from LaborSphere on BYOD considerations for employers click here.
Author: Mark E. Terman
President Obama Signs Two Executive Orders to Limit Workplace Discrimination
On April 8, 2014, at an event commemorating National Equal Pay Day (an annual public awareness event that aims to draw attention to the gender wage gap), President Obama signed two executive orders designed to limit workplace discrimination. The first prohibits federal contractors from retaliating against workers who discuss their salaries with one another, while the second instructs the Department of Labor to establish new regulations requiring federal contractors to submit summary data on compensation paid to their employees, including breaking down the data by gender and race.
The protections offered by the anti-retaliation Order overlap with many already existing under state and federal law. For example, the NLRA protects employees’ right to engage in “concerted activities” and thus already prohibits employer discipline against employees who discuss their wages. Further, some state laws, such as California Labor Code §232, already preclude an employer from disciplining an employee who discloses the amount of his or her wages. Nonetheless, the Order may add to these protections, such as by expanding them to management employees (who are not protected by the NLRA), and providing an alternative option for bringing retaliation claims (i.e., through the Office of Federal Contract Compliance Programs rather than the NLRB).
The effects of the Order requiring the collection of compensation data will be unclear until the regulations themselves are formulated. Based on the Order’s mandate to “avoid new record-keeping requirements and rely on existing reporting frameworks to collect the summary data” and to develop regulations that “minimize, to the extent possible, the burden on Federal contractors and subcontractors,” it is possible that the federal government will require that the data be submitted along with a federal contractors’ annual EEO-1 Report.
The President’s signing of these Orders appears to tie into the White House’s previously announced plans to accelerate change in areas it believes are within the authority of the Executive Branch, without the need for legislation. Indeed, the Orders’ provisions mirror parts of the Paycheck Fairness Act (“PFA”), a proposed piece of legislation that would add procedural protections to the EPA and the FLSA to address male–female income disparity. (The PFA came up for a vote in the U.S. Senate on April 9, 2014, where it was blocked by a Republican filibuster). Similarly, in February 2014, President Obama issued an Order raising the minimum wage for federal contractors, at a time when Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.) were urging a bill to raise the federal minimum wage to $10.10 per hour and index it to inflation. Then, in March 2014, President Obama directed the Labor Department to revamp regulations governing which types of employees business may classify as overtime-exempt “executives” or “professionals.” With regard to the Order requiring the collection of compensation data, the OFCCP has been working internally on releasing a proposed compensation data collection tool for the past three years. See http://www.dol.gov/ofccp/Presentation/Compensation_Data_Collection_Tool.htm (publicizing the OFCCP’s August 10, 2011 Advance Notice of Proposed Rulemaking regarding a new compensation data collection tool).
The high profile nature of the Orders provides yet another impetus for employers to evaluate their existing policies, and plan for the future.
What Happens at Work Stays at Work – The California Employer’s Approach To A National Program for Restrictive Covenants and Trade Secret Protection
Partners in the firm’s Los Angeles office recently presented to the Southern California Chapter of the Association of Corporate Counsel a program titled “What Happens at Work Stays at Work – The California Employer’s Approach To A National Program for Restrictive Covenants and Trade Secret Protection.”
The presentation, which was broadcast to in-house counsel viewing in three separate locations spread out around southern California, first looked at the California landscape, giving a refresher and update on non-competition agreements, customer and employee non-solicitation, identifying and pleading trade secrets and misappropriation.
The presentation then looked at considerations for a multi-jurisdictional approach to trade secret protection, including best practices for effective corporate policies and confidentiality and property protection agreements.
The presentation concluded by addressing social media in a trade secret protection program, including Twitter, LinkedIn, and BYOD, and making the most of choice of law and forum selection clauses in restrictive covenants.
A copy of the presentation can be downloaded here.
Unpaid Internships – Opportunity or Liability?
Editor’s Note: The following post by Los Angeles Partner Mark Terman appeared in the latest issue of the California HR Newsletter. To view the entire newsletter click here. To sign-up to receive the California HR Newsletter see the instructions below.
Unpaid Internships – Opportunity or Liability?
By: Mark E. Terman
The Issue: How can employers reduce risks of the sharp increase of class action litigation by unpaid interns and adverse publicity for companies and key executives over failure to pay wages?
The Solution: Employers should evaluate and correct their unpaid internship practices or, alternatively, treat interns as minimum-wage employees who, if properly classified as part-time or a short-term temporary employee, may not be eligible for certain employee benefits.
Analysis: Unpaid internships have long been used by students and newcomers to build a resume, launch a career or simply land a paying job. Employers can capitalize on this to teach their business and find talent; but, they should not use interns just to cut labor costs.
If the intern is closely supervised and taught a curriculum that can be applied to multiple different employers, is not primarily doing work that regular paid employees do, has no guaranty of becoming employed, and an advance writing specifies that there will be no pay, odds are that intern can lawfully be unpaid in California. If a school or college will give course credit, the odds further increase. The overarching theme is that unpaid internships must be educational and predominantly for the benefit of the intern, not the employer.
Non-compliant employers risk expensive class action and regulator’s claims to reclassify interns as employees and to recover unpaid minimum wages, overtime pay, interest, multiple penalties, and attorney’s fees. “Warning bells” include: use of unpaid interns to minimize labor costs or provide extended job interviews; no supervised education and training beyond what the intern might observe; and a predominance of clerical or “go-fer” duties.
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Unpaid Internships – Opportunity or Liability?
Unpaid internships have long been viewed by students, recent graduates and industry newcomers as a chance to gain experience that might help them select or launch a career, and to some, a chance to eventually land a paying job. Employers can capitalize on this to teach their trade or profession and find new talent; but, they should not use interns just to cut labor costs.
The United States Department of Labor and many states use six criteria to determine whether internships in for-profit company operations can lawfully be unpaid: 1) the internship must be similar to training given in an educational institution; 2) regular paid workers are not displaced; 3) the intern works under close observation; 4) the employer derives no immediate advantage from intern activities; 5) there is no guaranty of employment upon internship completion; and 6) it is clear up front that there is no expectation of payment. The overarching theme is that unpaid internships must be educational and predominantly for the benefit of the intern, not the employer.
Some employers have no idea the criteria exist and unwittingly expose themselves to expensive single-plaintiff, class action and regulator’s claims to reclassify interns as employees and to recover unpaid minimum wages, overtime pay, interest, multiple penalties and attorneys fees. [For more on this see our post on Unpaid Interns Deemed Employees Under the FLSA]. Add to that, there are potential employer and decision maker risks for failure to withhold income and employment taxes.
“Warning bell” examples of internship programs that may be subject to reclassification include, use of unpaid internships to simply minimize labor costs or merely as an extended job interview to see if interns can make the cut later for a paid job; no real, supervised education and training, beyond what the intern might happen to observe; and a predominance of work assigned to interns that paid employees would normally do to generate or support the business. Likewise, interns whose work is primarily running errands, answering phones, filing, organizing documents, data entry, scanning or coping images, or cleaning – even though they arguably have good exposure to work going on around them – tend to look like they are merely doing what paid support staff employees ought to be doing.
By contrast, if the intern is closely supervised and taught learning objectives that can be applied to multiple different employers, with occasional support staff type work incidental to the learning, with no guaranty of employment, and a writing that specifies a limited duration of an internship without pay, odds are better that intern can lawfully be unpaid. As a practical matter, if a school or college will give the intern course credit, the odds of legal compliance increase.
A safe path to avoid classification risks is to pay interns at least minimum wage and for any overtime worked, afford meal and rest breaks, and manage their work assignments to reduce overtime needed. Depending on employer policies and applicable laws, an intern who is part-time or a short-term temporary employee may not be eligible for certain employee benefits.
New Year, New Laws for California Employers – Deposition Limits, San Francisco Ordinances and Meal Periods
In the final part of our series, “New Year, New Laws for California Employers,” we take a look at new deposition limits, San Francisco ordinances and meal periods. Prepared by Mark Terman, partner in the Los Angeles office, this series looks at some of the significant new regulations becoming law in 2013 affecting private employers doing business in California.
Deposition Limits
AB 1875 limits a deposition of any person to seven hours of total testimony, similar to the requirement in federal courts. Excepted from this limitation are depositions in employment and complex cases, and of expert witnesses.
San Francisco City Ordinances
For an employer who directly or indirectly employs or exercises control over an employee’s wages, hours and working conditions in the city of San Francisco, Minimum Wage, Health Care Security (HCS) and Paid Sick Leave (PSL) Ordinances benefit those employees (http://sfgsa.org/index.aspx?page=430).
For 2013, hourly minimum wage for employees in San Francisco increases to $10.55 from $10.22, while the statewide minimum wage outside San Francisco remains at $8. The required 2013 “spend per employee,” under the HCS Ordinance for employers with 100 or more employees increases to $2.33 from $2.20 per hour. For employers of 20-99 employees, spend increases to $1.55 from $1.46. Exempt from the HCS Ordinance are employers with 19 or fewer employees, managers and supervisors salaried at $86,593 or more and nonprofit employers of less than 50 employees. So far, there is no change in the PSL Ordinance.
Meal Periods
Of the many court decisions this year affecting employers, perhaps none impact as many employers as the California Supreme Court’s meal period directive in Brinker Restaurant Corp. v. Superior Court.
Before Brinker, California employers were relegated to policing and disciplining employees to ensure they took at least one, 30-minute nonworking meal periods and, if employers did not, they stood to risk class-action and single-plaintiff litigation over regular wages, overtime wages, wage premium (an extra hour of pay for each meal period lost), interest and attorneys’ fees.
By contrast, Brinker ruled that an employer’s obligation is to relieve its employees of all duty, with employees then at liberty to use the meal period for whatever purpose, but the employer need not ensure that no work is done during the meal period. Likewise, an employee may not capitalize on premium pay by intentionally working through provided meal periods, and an employer may not “impede or discourage” a full, uninterrupted meal period. Finally, the court held that an employer must provide a reasonable opportunity to take meal periods of at least 30 uninterrupted minutes, within the proper time frame, and relieve employees of all duties.
While this case is welcome news, employee claims may still surface. For example, some employees may contend that they were impeded or discouraged from taking lunch or leaving their work area, thus triggering premium pay. Some employees may habitually decline to take a meal period to try to consume “regular rate” working time midday and assure that some overtime is worked, forcing the employer to pay overtime rates for those hours. Consequently, some employers may still prefer to require by their own policies that meal periods are actually taken, rather than made available.
Links to the other posts from this series are below.
New Year, New Laws for California Employers – Employer Access to Social Media