Counseling & Compliance Training - Page 66 of 91

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

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.

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.

FMLA’s New Definition of “Spouse” Halted in Four States

The Department of Labor’s revised definition of “spouse” under the FMLA was recently struck down in Texas. On March 26, 2015, in Texas v. United States, the United States District Court for the Northern District of Texas granted a request made by the states of Texas, Arkansas, Louisiana, and Nebraska for a preliminary injunction with respect to the Department of Labor’s Final Rule that revised the regulatory definition of “spouse” to include same-sex partners under the Federal Family and Medical Leave Act (“FMLA”).

After the Supreme Court struck down Section 3 of the Defense of Marriage Act (“DOMA”) in United States v. Windsor, which defined spouse under federal law, as a person of the opposite sex, President Obama called for a review of all relevant federal statutes to implement the decision. Under the then-existing FMLA regulation defining spouse, eligible employees in same-sex marriages recognized in their “state of residence” could take FMLA leave to care for a same-sex spouse with a serious health condition. However, this definition did not allow an eligible employee to take FMLA leave on the basis of the employee’s legal same-sex marriage if the employee lived in a state that did not recognize same-sex marriage.

On February 25, 2015, in order to provide FMLA rights to all legally married same-sex couples consistent with the Windsor decision, the Department of Labor issued a Final Rule revising the definition of spouse under the FMLA. Essentially, the Rule provided that any eligible employee who is in a legal same-sex marriage can take FMLA leave to care for his or her spouse, regardless of the state in which that employee resides. To determine who could be considered a spouse, the revised definition looks to the law in the “state of celebration,” that is, the jurisdiction in which the marriage was entered into, instead of the law of the state in which the employee resides. The Rule was to be effective March 27, 2015.

On March 18, 2015, the State of Texas filed a Complaint for Declaratory and Injunctive Relief and Application for Temporary Restraining Order, arguing that the Final Rule should be enjoined because Texas law does not recognize same-sex marriages. On March 25, 2015, Texas amended its Complaint to add Arkansas, Louisiana and Nebraska as plaintiffs. The other plaintiff states have similar restrictions on state recognition of same-sex marriages. The court granted the plaintiffs’ request for a preliminary injunction, holding that Congress intended to preserve a state’s ability to define marriage without being obligated under the laws of another jurisdiction which may define it differently. The court concluded that the DOL exceeded its authority in changing the definition because it forced employers to choose between complying with the FMLA and with other certain state laws prohibiting the recognition of same-sex marriages.

The DOL’s Final Rule has been temporarily stayed in Texas, Arkansas, Louisiana and Nebraska. While the preliminary injunction remains in effect, the DOL cannot take any action to enforce the “state of celebration” rule in those four states.

What is the bottom line for employers? Employers outside of Texas, Arkansas, Louisiana and Nebraska should review their FMLA policy to ensure that it includes the new definition of “spouse.” Employers should also make sure that human resources personnel, supervisors and managers are aware of the new definition and its impact on employees requesting leave under the FMLA. Employers doing business in Texas, Arkansas, Louisiana and Nebraska should monitor the developments in Texas v. United States to determine if the new definition of spouse will be implemented in those states.

Twenty-Seven Day Elections (Or Less) Likely Under NLRB’s New Quickie Election Rules

The NLRB’s “quickie election” rule goes into effect today. And while the National Labor Relations Board (NLRB) has avoided a clearly mandated time frame for processing union representation petitions, employers can expect elections to be held just 27-days (or less) after petition filing under the NLRB’s new representation election rule.

In speaking to interested stakeholders during an informational training session held on April 7^th, Peter Sung Ohr (“Ohr”), Regional Director of the NLRB’s Region 13, described a timeline whereby union petitions will be processed and served electronically on employers the same or next day after filing. Pre-election hearings will be scheduled eight days later, but absent significant questions concerning representation or jurisdiction, issues of individual employee eligibility will not be litigated or resolved pre-election. Assuming consecutive-day hearings, elimination of rights to file post-hearing briefs, and a three-day period for the receipt of hearing transcripts, it is likely that Regional Director hearing decisions and directions of election will issue within four-days of scheduled hearing dates.

The NLRB’s new election rule directs Regional Directors to schedule elections for the “earliest date practicable.” While an employer has two-days post-decision to provide the petitioning union a final voter eligibility list (containing employee names, work locations, shifts, job classifications, available home addresses, personal email address and home/personal cellphone numbers), the Regional Director could order an election held a few days afterwards, assuming the union is willing to waive a 10-day voter list review period.

The Board’s new election procedures are expected to shorten the average election period in contested cases from 42- to 27-days, with unions driving election timelines in individual cases. The NLRB will start applying its new election procedures to all petitions filed on and after April 14^th. New representation case forms are now available on the NLRB’s website. Noncompliant employers risk waiver of rights to challenge petitioned-for bargaining units and overturned elections under the NLRB’s new election rule.

NLRB’s New Election Rule Implementation Update

In preparation for the NLRB’s new “quickie election” rules going into effect next week, the NLRB General Counsel yesterday published a 36-page Guidance Memorandum intended to explain how representation cases will be processed under the NLRB’s final rule. While the lengthy memorandum describes specific changes to Board procedures in great detail, it leaves unanswered significant questions such as how Regional Directors will process petitions on a “real world” basis, what opportunities employers are left with to challenge bargaining unit compositions, and ultimately, whether the NLRB’s “quickie elections” result in significantly shorter election time periods. Indeed, the GC acknowledges that the Board “will not be able to fully assess what impact the rule will have” until after it begins processing representation petitions. The GC instead directs the NLRB’s Regional Directors to “continue to process representation petitions and conduct elections expeditiously” consistent with the Board’s revised rules.

What seems certain is that employers should prepare themselves for implementation of the Board’s new regulations on April 14^th. Last week President Obama vetoed a congressional resolution to disapprove the final rules, and while two pending federal cases challenge the Board’s statutory authority to publish the revised rules, it remains unlikely any such legal challenge will delay the Board’s implementation of its final rule next week.

Workplace Anxiety and the ADA

For employers, weighing an employee’s health issues with workplace concerns, such as employee safety and productivity, often requires a delicate balance. The challenge may be even greater when handling issues related to mental health. Questions abound on both sides: employees wonder if they should tell their employers about personal events that may be affecting their mental well-being, and employers struggle with difficult decisions concerning employment status when they have an ineffective worker.

The Americans with Disabilities Act (“ADA”) generally bars discrimination against an employee with a disability who is able to perform the essential functions of his or her job with or without a reasonable accommodation. The ADA defines “disability” as a “physical or mental impairment that substantially limits one or more major life activities.” The associated regulations define “mental impairment” as encompassing “any mental or psychological disorder, such as intellectual disability, organic brain syndrome, emotional or mental illness, and specific learning disabilities.” Navigating these definitions and avoiding lawsuits and potential liability for claims of mental disability present a serious challenge for employers.

Earlier this month, the U.S. Court of Appeals for the Fourth Circuit attempted to clarify the terrain. In Jacobs v. N.C. Admin. Office of the Courts, No. 13-2212, 2015 U.S. App. LEXIS 3878 (4th Cir. March 12, 2015), the Fourth Circuit reversed the lower court’s summary judgment dismissal of a lawsuit in which the plaintiff, who alleged that she suffered from “social anxiety disorder,” claimed that her former employer violated the ADA by: (1) discriminating against her on the basis of her disability; (2) failing to provide her with a reasonable accommodation; and (3) retaliating against her for seeking to exercise her rights under the ADA. The plaintiff, a deputy court clerk, alleged that her disability left her unable to engage in social interactions with the public at the courthouse’s front counter. In particular, she asserted that “working at the front counter caused her extreme stress and panic attacks.” The plaintiff alleged that, approximately three weeks after requesting reduced public interaction, the defendant terminated her employment.

The Jacobs Court, the first Court of Appeals to address “social anxiety disorder” under the ADA in the employment context, held that interacting with others is a major life activity and that social anxiety disorder can substantially limit one’s ability to engage in this activity. Thus, according to the Court, social disability disorder may constitute a disability under the ADA. The Court also considered the fact that many deputy court clerks at the defendant courthouse did not regularly interact with the public and, therefore, public interaction was not an essential function of the job. The Court concluded that a reasonable jury could find evidence supporting each of the plaintiff’s ADA claims. Accordingly, it reversed the lower court’s judgment and remanded the case for trial.

According to the National Alliance on Mental Illness, approximately 1 in 4 adults suffer from a mental health disorder. These disorders include depression, bipolar disorder, panic, post-traumatic stress and generalized anxiety disorders. Given the statistics, it is important for employers to understand their obligations under the ADA and similar state and local laws, and to consult with counsel when questions arise.