Mark D. Nelson, partner in the Chicago office, authored the article “Social Media: The Bane of HR Leaders’ Existence and How to Manage it” for the fall issue of HR Pulise, the official publication of the American Society for Healthcare Human Resource Administration. In the article Mark discusses social media concerns for health care organizations, including why a social media policy is necessary, how health care providers can avoid social media issues and NLRB standards for social media policies. To read the full article click this link: Mark Nelson – HR Pulse Magazine, fall 2012 issue
Federal Court Holds that FLSA’s “Fluctuating Workweek” Method Violates Pennsylvania Law
A recent decision out of the Western District of Pennsylvania, Foster v. Kraft Foods Global, Inc., Civ. No. 09-453 (W.D.Pa. August 27, 2012), highlights the challenges employers face in simultaneously complying with both local and national wage and hour regulations. In Foster, the court held that the “fluctuating workweek” method of overtime compensation – which is expressly permitted by the FLSA – is not permitted under Pennsylvania law.
Under the fluctuating workweek method, an employer pays a nonexempt employee a fixed weekly salary, regardless of the number of non-overtime hours worked. This method is generally used in industries in which an employee’s hours change unpredictably from week to week based on factors such as customer demand or seasonal variation – e.g., lawn maintenance companies, golf courses, or the travel industry. In using this method, the employer benefits from significant cost savings over traditional methods of overtime calculation and the employee benefits from the stability of a fixed weekly salary.
There are five requirements for using the fluctuating workweek method. The employee’s hours must fluctuate from week to week; the employee must receive a fixed salary that does not vary with the number of hours worked (excluding overtime); the salary must be high enough that the employee’s regular rate of pay is at least the minimum wage; the employer and employee must have a clear mutual understanding that the salary is fixed; and the employee must receive overtime compensation equal to at least one-half the regular rate for all hours worked over forty.
In Foster, the court’s analysis focused on this last requirement. The court held that “the payment of overtime under the FWW method, at any rate less than one and one-half times the ‘regular’ or ‘basic’ rate,” is impermissible under the Pennsylvania Minimum Wage Law. We’ll be watching this decision (if appealed) and subsequent cases closely, because if this interpretation of the Minimum Wage Act is upheld, the primary advantage to the employer in utilizing the fluctuating workweek method is eliminated. In the meantime, Pennsylvania employers who use this method to compensate nonexempt employees should reconsider their policies, given that it may no longer result in cost savings. Moreover, this case should serve as a reminder that, although many local wage and hour regulations are modeled after (and in some respects identical to) the FLSA, compliance with the FLSA does not guarantee compliance with local statutes.
California Joins Other States in Implementing Laws Governing Employer Access to Employee’s and Applicant’s Social Media Accounts
California is poised to be on the front lines of implementing laws governing when and if employers can require applicants or employees to divulge their social media passwords and grant employer access as part of the hiring process or in the course of the employment relationship. Last week, the California Senate voted 28-5 in favor of Assembly Bill 1844, which would prohibit employers from forcing employees and prospective workers to turn over usernames and passwords for their social media accounts and also would ban employers from discharging, disciplining or threatening to retaliate against employees or job applicants who did not comply with such requests. Of note, the Senate’s proposed amendments clarify that employers may request personal social media information when related to an investigation involving alleged workplace misconduct or violations of the law. The Senate also amended the bill to specify that the State’s labor commissioner is not required to investigate or determine any violations of the bill. The proposed bill next moves to the Assembly for a vote.
This proposed California bill comes on the heels of multiple memoranda issued by the National Labor Relations Board analyzing various implications of social media in the workplace and specifically opining on what employers can and cannot review and regulate in the context of employee (and applicant) rights. There currently are hundreds of cases pending before the National Labor Relations Board concerning social media issues — and the Board has made it abundantly clear that its jurisdiction to protect employee rights is not limited to organized (“unionized”) workplaces.
Maryland passed the first state law prohibiting employers from requiring disclosure of social media information which goes into effect October 1, 2012. Illinois also passed a similar law on August 1, 2012 (see our prior coverage here) which takes effect on January 1, 2013. Massachusetts, New Jersey and New York are also currently considering similar legislation.
Is Relief on the Horizon for California Employers Attempting to Enforce Arbitration Agreements as Class Waivers?
In California, a hotbed of wage and hour class and collective action filings, a recent appellate court opinion provides some long-awaited good news for employers attempting to enforce arbitration agreements as class waivers. In Reyes v. Liberman Broadcasting, Inc., plaintiff Jesus Reyes worked for Liberman Broadcasting, Inc. from April to September 2009. Pre-hire, Reyes executed an arbitration agreement. In May 2010, he filed a class action alleging wage and hour violations on behalf of a putative class of security officers. When it initially answered the Complaint, Liberman failed to raise the issue of arbitration. In July 2011, Liberman filed a motion to compel Reyes to arbitrate his wage and hour claims as an individual (versus holding a role as a class representative). The court denied the motion, finding that Liberman had waived its rights via the delay. This led Liberman to appeal, resulting in a decision further interpreting the U.S. Supreme Court’s April 2011 decision in AT&T Mobility v. Concepcion, which held that the Federal Arbitration Act preempts state laws that invalidate class action arbitration waivers. To date, courts have to date [delete] been split on whether Concepcion overruled the California case of Gentry v. Superior Court, which required class arbitration under certain circumstances. However, last Friday, the appellate court, in Reyes, reversed the lower court’s denial of Liberman’s motion to compel arbitration. In so ruling, the Second District Court of Appeal held, “an arbitration agreement silent on the issue of class arbitration may have the same effect as an express class waiver.” (The Second District Court of Appeal declined to decide whether the Gentry case remains good law following the Concepcion ruling, holding instead that Reyes failed to show that the Gentry factors made the arbitration agreement unenforceable.)
The Court of Appeal also held that although Liberman did not mention the arbitration agreement in its answer and had previously engaged in discovery in the case, the company did not waive its right to compel arbitration. In so holding, the appellate court found that Liberman reasonably concluded it could not enforce the arbitration agreement before the Concepcion decision, given the fact that several California decisions pre-Concepcion appeared to require class arbitration in similar contexts. The Court of Appeal opined, the “risk [of compelled class arbitration] diminished substantially when Concepcion changed the legal landscape, and Liberman promptly informed Reyes of its intent to arbitrate one month after the [Concepcion] decision and filed its motion to compel a month later.” Accordingly, the opinion stated, “Liberman did not act inconsistently with a right to arbitrate by not moving to compel until after Concepcion.”
The body of law on enforcing arbitration agreements as class waivers is still developing post-Concepcion, but perhaps Reyes v. Liberman Broadcasting, Inc. indicates that there is some relief on the horizon.
Third Circuit Addresses The Notice An Employee Must Give Of Unforeseeable FMLA Leave
On August 3, 2012, in Lichtenstein v. University of Pittsburgh Medical Center, the U.S. Court of Appeals for the Third Circuit addressed the issue of how much information an employee must provide when notifying an employer of unforeseeable leave under the Family Medical Leave Act, 29 U.S.C. § 2601, et seq. (“FMLA”). By way of background, the FMLA generally entitles eligible employees to take up to twelve weeks of unpaid leave during any twelve-month period to care for themselves or a family member with a “serious health condition,” such as a condition requiring inpatient hospital care or continuing medical treatment. An employee only qualifies for FMLA leave if he or she provides sufficient information to permit the employer to determine whether the FMLA applies. For unforeseeable leave, the regulations require an employee to provide this notice “as soon as practicable.”
In this case, plaintiff Jamie Lichtenstein, a psychiatric technician, telephoned her employer shortly before her shift was scheduled to begin and explained that she “was currently in the emergency room [because her] mother had been brought into the hospital via ambulance, and [Lichtenstein] would be unable to work that day.” A few days later, Lichtenstein provided further information about her mother’s condition and requested a leave of absence but, by that time, the employer had already decided to terminate Lichtenstein’s employment for unrelated conduct pre-dating the mother’s emergency room visit.
In a lawsuit against her employer, Lichtenstein asserted FMLA interference and retaliation claims, alleging that her absence had constituted protected leave and that her employer had impermissibly considered the absence in deciding to terminate her employment. The district court granted summary judgment for the employer, dismissing Lichtenstein’s FMLA claims. Among other things, the district court concluded that Lichtenstein’s notice was inadequate to trigger the FMLA’s protections, because it did not include enough information for the employer to conclude that her mother “necessarily” had a serious health condition. On appeal, the Third Circuit reversed, emphasizing that, “when the leave is unforeseeable, the employee’s obligation is to provide sufficient information for an employer to reasonably determine whether the FMLA may apply to the leave request” (internal quotation marks omitted and emphasis in original).
The Third Circuit explained that, by notifying the employer that her mother had been taken to the emergency room by ambulance, Lichtenstein did not provide enough information for the employer to conclude that her mother necessarily had a “serious health condition,” but did provide enough information for the employer to reasonably determine that her mother may have a “serious health condition” and the FMLA may, therefore, apply. According to the Court, once the employee’s initial notice “reasonably apprises the employer that FMLA may apply, it is the employer’s burden to request additional information if necessary.”
The Lichtenstein case provides helpful guidance for employers. With regard to the FMLA, when receiving information from an employee suggesting that his or her absence may trigger the FMLA, the employer should follow up with the employee and request additional information. This case also acts as a reminder that, when discharging employees, an employer should be sure to document its legitimate, non-discriminatory reasons in order to minimize the risk that an unexpected development, such as unforeseeable leave, provides a basis for employees to allege that the decision was unlawful.
To Compel Discovery Of A Party’s Social Media Content In Pennsylvania, There Must Be A Hook
Pennsylvania trial courts have been particularly active in the past few years in issuing opinions regarding how much, if any, of a party’s non-public Facebook and other social media content are subject to discovery in litigation. A July 2012 opinion issued by Judge Wettick in Allegheny County, Trail v. Lesko, highlights these increasing discovery disputes and outlines the recent trends of the courts addressing the disputes. As Judge Wettick found, courts have compelled very broad access to social media content in cases where one party has articulated that the publicly available portions of the other party’s social media site contains information relevant to the prosecution or defense of a claim.
Although there are no appellate court opinions on this subject matter in Pennsylvania, there are several trial court opinions. On the one hand, some of the cases permit very broad access to Facebook and other social media content. For example, at least three written opinions in Pennsylvania since 2010 have required the party from whom discovery is sought to provide his or her username, password or other login information to the requesting party. In these cases, the requesting party provided the court with specific evidence from the individual’s publicly accessible pages showing the likelihood that full access to the social media account would garner further relevant information. In Zimmerman v. Weis Markets, Inc., the plaintiff claimed personal injuries from a workplace injury and his public profile said he enjoyed “ridin” and “bike stunts” and showed pictures of him with a black eye and his motorcycle both before and after the workplace accident at issue in the litigation. And, as one Pennsylvania trial court put it in McMillen v. Hummingbird Speedway Inc., “[w]here there is an indication that a person’s social network sites contain information relevant to the prosecution or defense of a lawsuit, . . . and given [the case law’s] admonition that the courts should allow litigants to utilize ‘all rational means for ascertaining the truth,’ . . . and the law’s general dispreference for the allowance of privileges, access to those sites should be freely granted.”
On the other hand, a number of Pennsylvania trial courts, in written opinions, have completely denied any and all access to a party’s social media content. Many of the requesting parties in these cases failed to identify any compelling or specific reason for obtaining access to the other party’s non-public social media content. These courts have concluded that the mere fact that a party has a social media account, without anything more, is insufficient to justify broad discovery access to the account.
In Trail, Judge Wettick provides a comprehensive review of Pennsylvania’s case law addressing this question. Judge Wettick also highlights cases from a number of other jurisdictions, which are generally consistent with the approach of Pennsylvania courts that have addressed this question in that the other jurisdictions tend to require some factual predicate suggesting the existence of relevant information prior to ordering access to the information being sought. Unlike Pennsylvania, though, some other jurisdictions have sought to establish more of a middle ground between wholesale denial of the request for social media content and unlimited access to the user’s profile. Judge Wettick reached what is perhaps the obvious conclusion from these cases: litigants seeking access through discovery to a party’s Facebook or other social media content must show that there is a sufficient likelihood that the discovery requested will provide relevant evidence that is not otherwise available. Further, Judge Wettick said the court must consider the level of intrusiveness as balanced against the need for the discovery. Although courts are still wrestling with this question and the answer will continue to evolve, the courts seem to fall back on the age-old principle that discovery should not be an unbridled fishing expedition into a party’s private information. However, with a big enough hook (i.e., publicly accessibly portions of the social networking site suggesting that further relevant postings are likely to be found by access to non-public portions), Pennsylvania courts are willing to provide very broad access to a party’s social media content.