Should we really be this panicked about the DOL overtime regs? Probably not.

Wild Rumpus.

By now, everyone is aware that on May 18, 2016, the Department of Labor (DOL) issued its final rule updating the Fair Labor Standards Act (FLSA) overtime regulations. (Defining and Delimiting the Exemptions or Executive, Administrative, Professional, Outside Sales and Computer Employees.) Since then, there have been dozens of helpful articles, analyses, explanations, and in-person and electronic trainings to explain the rule. Panic is rampant, as employers attempt to understand the change to the regulations. But stay calm – it’s not that complicated.

Although the final rule, to be published in the federal register on May 23, is over 160 pages long, the changes made to the existing regulations are not numerous. Much of the method used to determine who is entitled to overtime under the FLSA will stay the same – although the numbers used in those calculations have changed substantially.

What stays the same?

  • Under the FLSA, hourly employees generally are entitled to overtime pay in the amount of time-and-one-half for hours worked over 40 in a week. That basic concept has not changed.
  • There currently exist certain exemptions from minimum wage and overtime pay for executive, administrative, professional, outside sales, and computer employees. These are referred to as the ‘‘white collar’’ exemptions, as set forth in 29 CFR part 541 (“Part 541”), and have not changed
  • To be considered exempt under Part 541, employees still must meet certain minimum requirements related to their primary job duties and, generally must be paid on a salary basis at not less than minimum amounts specified in the regulations. (This typically is referred to as the “salary basis” test.) That mechanism remains the same.
  • The definitions of and parameters for those Part 541 exemptions have not changed – even though there was some reference to possible changes when the revisions first were announced months ago.
  • Part 541 also includes a “highly compensated” exemption which states that an employee automatically is considered to be exempt if that individual earns a certain amount of annual compensation, and customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee. That test remains unchanged.
  • Employers still are responsible for tracking the hours of non-exempt employees.

What has changed?

  • The Final Rule updated the salary level upon which the basic Part 541 exemptions are based, increasing it from the previous level of $455 per week (the equivalent of $23,660 per year) to a new level of $913 per week (the equivalent of $47,476 per year). That means that an individual employee earning an annual salary less than $47,476 automatically is entitled to overtime for hours worked over 40 per week.
  • The DOL has decided to permit nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard weekly salary level threshold, provided these forms of compensation are paid at least quarterly.
  • The “highly compensated” annual salary – over which the individual is considered to be exempt, so long as he or she performs one or more duties of an exempt employee – was set at $100,000 in 2004, and now has been raised to $134,004.
  • The Final rule establishes a mechanism for automatically updating the salary and compensation levels every three years to “ensure that they continue to provide useful and effective tests for exemption.”
  • Because many more individuals may be classified as non-exempt, an employer’s responsibility for tracking the work hours of their employees is likely to expand – so when in doubt, keep track.
  • The DOL has set an effective date of December 1, 2016 for employers to implement the Final Rule, explaining that this will provide sufficient time – over 180 days – to make any changes that are necessary to comply with the final regulations.

With this information as a starting point, employers can begin the real work of determining how to classify – or re-classify – their employees to assure that each individual entitled to overtime pay under the FLSA’s two-step salary-level-and-duties test is properly designated and paid.

And now, “Let the wild rumpus start. . . .”


Illustration and quote from Maurice Sendak’s Where the Wild Things Are, beloved children’s book first published in 1963 by Harper & Row.  Mr. Sendak did his own illustrations.



Political Discussions in the Workplace: Banter or Battle?

Nacho Libre

In a year where political rhetoric has included name calling, jeers, and physical threats – and all of these coming directly from the candidates themselves – what can employers do to manage workplace discussions about political issues before those discussions become disruptive?

A nationwide survey conducted by CareerBuilder and Harris Poll ahead of the 2012 election showed that nearly a quarter of the 7700 workers surveyed reported that they had been involved in a “heated discussion or fight” with a co-worker, boss, or someone else “higher up in the organization.” According to that same poll, 10% of the workers surveyed said that their opinions of a co-worker changed for the negative after discovering that person’s political preferences.

Employers are caught in the Catch-22 of attempting to reinforce civil behavior – and possibly risking an NLRB charge in the process (see William Beaumont Hospital)and allowing individuals to express their own thoughts and beliefs without implementing restrictions on the discourse, even if argument ensues.

Knowledgeable employers can find a middle ground by doing three things:

  • Understanding the line between argumentative workplace discussions and the “concerted protected activity” protected under the National Labor Relations Act;
  • Training managers to recognize potentially problematic discussions and teaching them how to de-escalate those discussions; and
  • Consistently enforcing company policies related to violence.

The NLRA allows employees to discuss the terms and conditions of employment without interference by the company, even if that discussion includes some negative comments and criticisms. But the rules governing workplace violence and unsafe behavior continue to apply to employee interactions to keep even protected discussion from escalating into physical confrontation and violence.

Harassment and anti-violence policies must be posted, disseminated, and consistently enforced. Assure that managers are aware of and conversant in those policies, are able to recognize the difference between basic conversation and a more heated, argumentative exchange, and can take effective and prompt action to de-escalate those second types of situation.

Additionally, discussions of the “terms and conditions of employment” protected under the NLRA are unlikely to include individual political beliefs, so some parameters can be instituted around such discussions. Boundaries can be set to preclude posting political signs or holding political rallies during work hours. Employers can support the civic involvement of employees without allowing the workplace to be disrupted by non-work-related events and discussion.

The key in the coming months will be to pay attention and to enforce workplace policies with a focus on work performance, and not individual political beliefs.


Photos from Nacho Libre, 2006, Paramount Pictures, starring Jack Black and Hector Jimenez.

How much “interactive process” is enough to preclude ADA liability?

no ladders

To support a failure-to-accommodate claim under the Americans with Disabilities Act, a plaintiff must establish both a prima facie case of discrimination and an employer’s failure to accommodate it. But how far must an employer go to fulfill the “interactive process” requirement of the ADA in deciding upon and implementing a reasonable accommodation? A recent decision by the 8th U.S. Circuit Court of Appeals may provide some useful guidance. Kelleher v. Wal-Mart Stores, Inc., 8th Cir., No. 15-2105, March 31, 2016.

Kathy Kelleher began working for Wal-Mart as a truck unloader in 1995. In 1997, she switched positions to “stocker,” working the third/overnight shift. In that same year, Kelleher was diagnosed with multiple sclerosis, and her doctor imposed a work restriction of “no ladder use.”

Using the ladder was an integral part of the stocker job. However, between 1997 and 2011, Wal-Mart accommodated Kelleher’s restriction, along with several other verbal requests for accommodations, including extra time during her shift to take medication and an extra 15-minute break in addition to her normal breaks. In fact, in 2009, a local human resources manager recommended that the request for extra break be denied for lack of medical support, but store management honored the request, allowing Kelleher to continue in her position, and implementing her requested accommodation.

In January 2011, Kelleher requested and was granted FMLA leave for an appendectomy. Upon her return, Kelleher’s permanent restrictions included no ladder climbing and no working in extreme temperatures, both of which were accommodated. In June of that year, Kelleher submitted a request for a second extra 15-minute break.

Months earlier, Wal-Mart’s procedure for determining accommodations had been centralized, so Kelleher’s her request was reviewed by corporate headquarters under the new procedure. Corporate headquarters suggested that Kelleher be taken out of her position and placed on leave until a “suitable reassignment meeting her work restrictions” could be found. Kelleher’s store manager began to look for such a position, stating to the store’s personnel manager that he wanted to “find something that would work for” Kelleher.

Kelleher then was placed in an overnight cashier position, which included a $.20/hour raise from the stocker position. The duties of the new position were very similar to the stocker duties, but with some additional responsibilities, including occasionally staffing a customer check-out lane.

Kelleher expressed that she was “nervous” that customers might make comments about her impairments. However, she provided no medical evidence that she was unable to perform the duties of the new position.

Although she began to work in the new position – with her “no ladder” restriction in place – she ultimately filed a lawsuit claiming that Wal-Mart had failed to accommodate her disability, and that she had been harassed and retaliated against, as well. Kelleher specifically claimed that Wal-Mart managers discriminated and retaliated against her by lowering her performance evaluation from “exceeds expectations” from “solid performer” and by “forcing her to work alone, giving her assignments that were difficult, rolling their eyes at her and acting exasperated when she walked by.”

The lower court granted summary judgment in Wal-Mart’s favor on all claims, and that decision was upheld on appeal to the Eighth Circuit. While the appellate court premised its decision on its finding that Kelleher did not suffer the requisite “adverse action” to support her claims, the specific facts that form the basis of the holding indicate that in this case, the company took actions that positively influenced the court’s decision, including the following:

  • There was no documentation or evidence that Kelleher actually was subjected to harassment or comments by customers in her job as a cashier, or complained of such;
  • There was no particular job responsibility that Kelleher was medically unable to perform in the position into which the company chose to move her;
  • The company allowed the “no ladder” restriction to remain in place;
  • The hourly wage in the new position was $.20/hour higher than in the old position; and
  • The company fully documented the business-related reason for the decrease in Kelleher’s performance evaluation.

In this case, the time and effort spent by the employer to take seriously the medical restrictions, continue to attempt to allow the plaintiff to work productively, consider alternative jobs when changing her position became appropriate, and making a general effort to treat plaintiff fairly, all culminated in a dismissal of Kelleher’s claims that the company discriminated against her by failing to accommodate her disability.

Non-employee’s racial bias may lead to liability for employer.


Most – if not all – employers are aware that both federal and state laws preclude employment discrimination based upon the race or national origin of an employee, and know that illegal activity can include both discriminatory actions and biased statements. Most employers, however, are unaware that certain of those laws also preclude discrimination by a customer, client, or patient of an employer against an employee.

Recently, a federal district court in Michigan denied a hospital/employer’s motion for summary judgment, finding that the lack of a written policy instructing hospital employees to reject the racial preference of patients regarding treatment, and the absence of training on the issue, raised a question that must be decided by a jury. McCrary v. Oakwood Healthcare, Inc., E.D. Mich., No. 4-14-cv-14053, March 16, 2016. 

Caprice McCrary, an African-American female, is a respiratory therapist at Oakwood Hospital in Dearborn, Michigan. McCrary, who began working at the Hospital in 2013, typically works a 6:30 p.m. to 6:30 a.m. shift three days a week, and is rated as a “very good” and “hardworking” therapist who is qualified to do her job. She reports directly to Elisa Benscoter, the manager of the Respiratory Care Department; when Benscoter is not at the hospital, McCrary reports to a senior respiratory therapist or charge therapist.  

On October 8, 2014, a patient was admitted to the Hospital through the Emergency Room. After he had been stabilized, the patient told a nurse-in-training that he wanted no “black people” tending to him during his hospital stay. The nurse left the patient’s room and reported the situation to a supervisor, who told her to note the statement in the patient’s record and to notify the charge nurse. The nurse noted the patient’s statement in the record, as directed. 

At some point that same day, the patient was transferred into a hospital room on a floor on which McCrary was assigned to provide respiratory care. When McCrory entered the patient’s room to provide care, the patient asked her to leave, referencing the statement in his chart. When McCrory asked the treating nurse why the patient had acted as he had, the nurse told McCrory about the patient’s preference, as noted in the chart.  

Later that night, McCrory again attempted to provide a respiratory treatment to the patient, and was again rebuffed. McCrory reported the situation to the senior respiratory therapist and to her own supervisor (Benscoter). She also called the Hospital’s human resources person, who apologized to McCrory and said that the request should not have been included in the patient’s chart. 

Subsequently, the patient was told by the Hospital he could not preclude medical personnel from treating him, regardless of race, and McCrory was informed of the same.  However, when McCrory returned to work the next day, the patient had been moved to a floor on which McCrory did not provide respiratory treatment to patients. 

McCrory filed a lawsuit claiming race discrimination under Section 1981, contending that the Hospital violated that law by allowing the assignment of its employees to care for the patient based upon race. The Hospital moved for summary judgment, arguing that it had acted promptly to correct the situation, and that after they acted, the patient was treated by several African-American caregivers during his stay. 

The district court denied the Hospital’s motion, pointing out that there was no written policy instructing Hospital employees to reject a patient’s request for care based on race, and no training or other advice to its employees on how to handle race-based requests. Based on the absence of the written policy and employee training, the court held that a “reasonable jury could find that by recording patients’ race-preference requests in the patients’ record and not training its employees to reject those requests, [the Hospital] purposely allows for the assignment of its employees’ duties based on their race.” 

This decision underscores the importance of anti-discrimination policies, including those related to anti-discrimination by customers, clients, and patients. Those policies should be written, broadly disseminated, effectively implemented, and consistently enforced. In addition, training should be developed and conducted to assure the understanding and enforcement of the policies.  Anything less than this muti-factor approach creates a clear risk of legal liability.


San Francisco on the Verge of Imposing Employer-Funded Paid Parental Leave: FAQs on the Groundbreaking Ordinance

This post is written by Charles L. Thompson, IV, a shareholder in Ogletree’s San Francisco office and originally was published on the firm’s blog. The San Francisco paid parental leave ordinance is of note as the first in the country; it also is noteworthy that the employee need only work in, not live in, San Francisco in order to be covered by the law.


On April 5, 2016, the City of San Francisco moved one step closer to imposing paid parental leave on certain employers when the city’s Board of Supervisors passed the “Paid Parental Leave Ordinance.”  The Board will vote again at its next meeting and, if it passes, will send the ordinance to Mayor Ed Lee.

Under current California law, the state’s Paid Family Leave (PFL) program pays to employees 55 percent of their weekly wages, up to a maximum weekly benefit amount, to bond with a new child or care for a seriously ill family member. Employees contribute to this program through the State Disability Insurance (SDI) program.

The San Francisco Paid Parental Leave Ordinance requires employers to pay the remaining 45 percent of an employee’s weekly wages during the leave.

Q: Which employers are covered?

A: The ordinance establishes a phase-in period. As of January 1, 2017, employers with 50 or more employees regardless of location must comply with the ordinance. As of July 1, 2017, employers with 35 or more employees – regardless of the company’s location – must comply with the ordinance if they employ individuals within the city of San Francisco. Beginning January 1, 2018, employers with 20 or more employees – again, regardless of the location of the company – must comply.  In other words, employers may be covered even if they do not employ 50 (or 20) employees within the City of San Francisco.

Q: Which employees are eligible?

A: An employee is eligible if he or she meets four separate criteria:

  1. The employee must have worked for the covered employer for at least 180 days before taking leave.
  2. The employee must work at least eight hours each week within the city.
  3. The employee must work at least 40 percent of his or her total weekly hours within the city.
  4. The employee must be eligible to receive funds under the California PFL program for baby bonding purposes.

The ordinance bases eligibility on whether the employee works in San Francisco, not on whether the employee lives in San Francisco.

Q: How much must employers pay? 

A: Employers must pay “Supplemental Compensation” that bridges the differential between the amount the state is paying and 100 percent of the employee’s normal gross weekly wage. However, employers calculate the gross wage of employees receiving the maximum weekly benefit amount under the California PFL program by dividing the state’s maximum weekly benefit amount by the percentage rate of wage replacement provided the PFL program.

Q: May employers require that employees use their accumulated vacation time?

A: Yes.  Employers may require that employees use up to two weeks of accrued unused vacation at the start of the leave. If an employee refuses, the employer is relieved of the obligation to pay Supplemental Compensation.

Q: Are employers required to post a notice?

A: Yes, a covered employer must post, in a conspicuous place, a notice prepared by the city.  Employers must post the notice in English, Spanish, Chinese, and any language spoken by at least 5 percent of the workforce at the worksite.

Q: Are employers required to retain records?

A: Yes, employers must retain records documenting Supplemental Compensation for a period of three years.

Q: What other rights does the ordinance provide employees?

A: The ordinance protects employees from discrimination and/or retaliation for exercising their rights to Supplemental Compensation. A covered employer that takes adverse action against an employee within 90 days of the employee engaging in protected activity, such as filing a complaint or cooperating with an investigation, faces a rebuttable presumption that the employer retaliated against the employee. The employer can overcome the presumption only through clear and convincing evidence establishing that it took the action solely for a reason that was not retaliatory.

Q: Does the ordinance apply to employees covered by a collective bargaining agreement?

A: Yes, the ordinance applies to employees covered by a collective bargaining agreement unless either (1) the agreement expressly waives the ordinance in clear and unambiguous terms, or (2) the agreement was entered into before the ordinance’s effective date.

Q: How is the ordinance enforced and what are its remedies and penalties?

A: San Francisco’s Office of Labor Standards Enforcement (OLSE) has the authority to enforce the ordinance administratively through a hearing. The OLSE may order “any appropriate relief,” including payment of Supplemental Compensation withheld and an additional amount to the employee that is the greater of $250 or the amount withheld times three. The agency also can order an administrative penalty of $50 per day to each employee whose rights were violated.

Either the city or “a person or entity acting on behalf of the public as provided for under applicable state law” may bring a civil action in court for ordinance violations. The same remedies and penalties described above, plus attorneys’ fees, apply.

Check future posting by Charles Thompson on the Ogletree Deakins’ blog for progress of the ordinance.

4 Things to Know About the EEOC’s Updated Position Statement Procedures

No 4

By now, most employers are aware of the fact that the EEOC has announced changes related to the way that an employer’s position statement – the initial document filed by a company, outlining its defenses to a Charge of Discrimination – are being handled, and that those changes became effective on a nationwide basis on January 1, 2016. The changes can be summarized in these four points:

  • An employee now can ask, while his or her EEOC charge is pending, for the employer’s position statement and any non-confidential attachments. Prior to this recent revision, employees could not obtain that information until after filing a lawsuit in federal court.
  • The EEOC has listed less than 10 categories of information designated as “confidential” and that will be redacted prior to providing an employer’s position statement to the complainant. That means that employers no longer can assume that every document or fact considered by the company to be confidential will be viewed by the EEOC as such. (. . . [T]he agency will not condone blanket or unsupported assertions of confidentiality.”)
  • Complainants will be allowed 20 days within which to submit, to the EEOC, a written response to an employer’s position statement, to refute factual assertions made by the employer. However, the charging party’s response will not be provided to the employer during the investigation.
  • A new “Digital Charge System” allows employers to transmit and receive notices and documents through a secure online portal after a written Charge of Discrimination has been filed. (An upcoming phase will allow individuals to file a charge online, but that has not yet been implemented.)

The EEOC has posted separate Q&A pages for charging parties/complainants and employer/respondents, addressing issues of importance to each side, and outlining the Commission’s preferred methods for the submission of a position statement and any response to the same.

These four points raise the stakes for employers in several ways, including that a complainant now will be provided with more information and documentation in the early stages of the process. That means that employers must increase the level of care taken in writing clear, concise, and complete position statements that accurately and fully reflect the reasons on which the company’s disputed decision was made, to avoid confusing or incomplete submissions. Further, the position statement must be signed by an “officer, agent, or representative of [the company] authorized to speak officially on its behalf.”

The EEOC has provided a detailed road map of its expectations for position statements in a website posting concisely titled “Effective Positions Statements.” The posting outlines the information that the EEOC expects to see in a position statement, specifically including the types of documentary evidence that can support a defense (statements or affidavits from witnesses with direct knowledge of the alleged events, payroll records, personnel records, and documentation outlining the reasons for termination decisions).

It also sets forth the circumstances under which it will allow an extension of the original 30 day limitation for submission of a position statement (requiring some indication of due diligence, including “partial submission of information related to the allegations in the charge”).

In essence, this procedure includes and/or constitutes an anticipatory document production prior to filing a discrimination lawsuit. In some cases, that may provide a more complete understanding of the complaints and defenses and could lead to early resolution, but in others, it may create an adversarial situation earlier than normally occurs. Whether the new position statement procedures will result in more litigation or less litigation remains to be seen.

Lawyers: Here are five things you can do right now to increase mindfulness.

Sesame Street 5

(Brought to you by the Number 5, and Sesame Street’s Count von Count.)


Here’s an incident to which almost every lawyer can relate:

Your out-of-town trial (or client meeting, or high-profile presentation) starts in three days. You’re packing files, luggage, and one last cup of coffee for the trip to the airport. You’re running a little late for the flight (because you had to make one last call – done on speaker-phone, of course, and you were packing your suitcase as you talked), so you want to get everything to the car in one trip. Suitcase in one hand, briefcase strap over your shoulder, and coffee and cell phone in the other hand, you get to your car, only to remember that your keys are in your jacket pocket. Rather than put anything down, you try to snag the keys with a couple of fingers on the hand holding the cell phone and coffee. I don’t have to tell you what happens next – but it involves keys on ground, coffee in your shoe, and a wet cell phone.

This scenario may seem overly predictable and simplistic. But ask yourself how often things like this happen – and how many extra minutes it takes to clean up the unintended mess. Mindfulness can help to avoid this type of dilemma.

If you were asked to list the top five things that you could do to increase your level of success in 2016, that list might include things like: working faster/more efficiently; attending industry-related seminars and “working the crowd” to meet potential clients; expanding your network by speaking, writing, and training; delegating more work to associates; and joining management committee to raise your profile within the firm. Very few lawyers would add to that list things like “take a breath” or “slowly count to ten” or any other technique regularly associated with mindfulness training.

The quantifiable effects of mindfulness:

Recent studies of the effect of mindfulness on business-related success have shown important – and unexpected – results. According to the Harvard Business Review, one company’s study showed that on average, stress levels of employees participating in a mindfulness program dropped by 28%. If that doesn’t impress you, that same study showed that participants gained an average of 62 minutes of productivity each week. (Do the math for the yearly gain, using your own billable rate.) Studies show that mindfulness actually changes our brains.

What is mindfulness? In essence, it consists of actively observing the world around you, one thing at a time, and being aware of that thing in its full context. The “thing” could be the car in front of you on the road, the face of your client in reaction to your explanation of legal strategy, or just the way your feet feel as you walk down the courthouse steps. Mindfulness keeps you in the present moment and allows you to fully feel that moment without worrying the about the next one.

Don’t confuse “motion” with “action”:

What isn’t mindfulness? Reading e-mails while you walk to your car on a sunny day; calling your stockbroker from your car while you head to the courthouse for a hearing; editing a brief while “listening” to a webinar; there are hundreds of examples that we, as lawyers, do every single day.

Most of us confuse “motion” with “action” – but the two are distinctively different, and it’s mindfulness that is at the core of that difference. Mindfulness keeps us in the present moment, puts things in perspective in a practical way, and allows us to save the energy of our thoughts for the important things when they happen. It allows us to navigate communication more effectively (which of us hasn’t half-listened to a spouse, child, or co-worker, and then felt remorseful afterward?), and to manage our own behavior by being more aware of what we say and how we act.

Five things to do now:

Start with these five things to begin your own mindfulness training:

  1. Stand still. No, really – just stand still. Stop where you are and look around you for ten seconds. Don’t speak; don’t text; just stand. You don’t have to accomplish anything in that ten seconds. The point is simply to be still.
  2. Take a deep breath. When is the last time you actually filled your lungs with air? Breathe in through your nose, fully filling your lungs from the bottom to the top (it’s harder than it sounds). Hold that breathe for a second or two, and then breathe it all out through your mouth. If you feel really adventurous, raise your arms while you breathe in and lower them as you breathe out.
  3. Stop answering the phone after the first ring. Lawyers are trained to be responsive. But grabbing the phone as soon as it rings means that you’re stopping something else in mid-track . . . being less mindful of that ongoing task than of the phone call. When the phone rings, use the first ring to focus on what you’re leaving in order to take the call. If you decide that the call is more important than the task, stop mindfully and answer the call on the second (or even third!) ring, so that when you go back to that task, you won’t have to re-do anything to catch up to your pre-call status.
  4. Eat real food. This one is a little less direct than the others. In essence, eating “real” food – as opposed to fast food made by others who have no connection to either you or the food – allows you to be more mindful of what you’re putting into your body, and how the food really tastes. It allows you to be fully aware of the time that you’re spending and of the purpose of eating, which is to provide energy to get through your day in a positive and productive way. Start packing your lunch – it doesn’t have to be fancy, but it will help you to give some mindful thought to what you plan to eat.
  5. Learn something new every day. We’re lawyers – of course we learn something new every day, whether it’s statutes, cases, or court rulings. I’m not talking about that. How about learning the capital of Australia (Canberra), the name of the dance move that would most embarrass your teen if you did it in public (the Dab), or the Prime Minister of Canada (Trudeau – Not that one. His son, Justin). Being mindful of things other than those familiar to you can help to increase your creativity, which is something that every lawyer should be thinking about.

In 2011, New York City instituted an unusual way of increasing mindfulness of its drivers, in an attempt to make them more aware of the dangers of driving without attention. Traffic warning street signs written as haiku/senryu appeared on poles around the five boroughs, posted by the New York City Department of Transportation. The poems and accompanying artwork were created by artist John Morse. My favorite – and one that I’ve saved since then to remind me to be mindful of my actions – is:

Imagine a world

Where your every move matters.

Welcome to that world.


Practical effect of DOL’s recent expansion of its “joint employer” analysis remains to be seen.

Saif underclingin in a crack 2010

(Photo of Saif underclinging a fissured rock wall in Keene Valley, NY in 2010.)

In a marked deviation from current regulatory standards and judicially accepted parameters of “joint employment,” the Wage and Hour Division (WHD) of the Department of Labor (DOL) issued – through Administrator David Weil Administrator’s Interpretation (AI) No. 2016-1, setting forth its “guidance” for determining employees’ rights and employers’ obligations under the Fair Labor Standards Act. (The AI also addresses joint employment under the Migrant and Seasonal Agricultural Worker Protection Act. The MSPA and the FLSA differ substantively, but share the same definition of “employ.”)

In the AI, Administrator Weil brings strong overtones of his book, “The Fissured Workplace,” to his job as Administrator of the WHD. Weil’s 2014 book attributes “declining wages, eroding benefits, inadequate health and safety conditions, and ever-widening income inequality” to outsourcing of workers by companies. He calls that growing inequality “fissuring” – a separation between employers and their workforce.

The January 20, 2016 AI is consistent with the goal Weil proposes in his book, which is to modernize regulatory policies and laws so that employers can meet their obligations to workers while ostensibly allowing companies to keep the beneficial aspects of the outsourcing and down-sourcing.

The AI begins with the basic premise that an employee can have two or more employers for the work he or she is performing. Under joint employment, an employee’s hours worked for all of his/her joint employers during the workweek are aggregated and considered as one employment for compliance with the Fair Labor Standards Act (FLSA) – including to calculate whether overtime pay is due, and whether the employers are jointly and severally liable under that Act.

Overview of AI 2016-1:

The AI addresses both “horizontal” and “vertical” joint employment.

  • Horizontal employment exists where an individual has employment relationships with two or more employers, and those employers are sufficiently associated or related that they all are deemed to employ that person; horizontal employment focusses on the relationship between the employing entities.
  • Vertical employment exists where an individual has an employment relationship with one employer – staffing agency, subcontractor, etc. – and the facts show that he or she is economically dependent on, and thus employed by, another entity involved in the work.

The AI addresses both, beginning with the statement that unlike the common law control test (which analyzes whether a worker is an employee based on the subject employer’s “control” over the worker), a joint employer relationship should be analyzed under a broader “economic realities” view of the relationship under the FLSA.

Further, Administrator Weil points out in a footnote that “[A]spects of both horizontal and vertical joint employment may be present in a single joint employment relationship. For example, both forms of joint employment could potentially exist where two warehouses share employees and use a staffing agency to provide them with labor.”

The AI goes into detail on the relationships that could constitute joint employment under the economic realities perspective – both from a horizontal and vertical standpoint – providing examples, and lists of factors to be included in any analysis of such relationship.

The joint relationship is painted with an extremely broad brush in this AI, expanding the joint employment concept in a way that obviates many benefits of outsourcing, staffing through agencies, and sub-contracting specialty jobs. Further, while the AI has broad applicability, its language specifically targets certain industries, including home health care, construction, janitorial, warehousing/logistics, and hospitality entities.

While the DOL has clarified that the AI was not meant to target franchised businesses, its Q&A on the guidance includes this statement: “Ultimately, of course, whether a particular franchisee and franchisor jointly employ a worker is based on the facts of each situation and must be made on a case-by-case basis applying the analyses discussed in the AI.” That language clearly leaves the door open for the WHD to subject franchise arrangement to the same level of scrutiny that the guidance seems to indicate will be given to other business entities.

Practical Effect of the AI:

The language of the AI is directed primarily at employers, but its practical effect is likely to begin with employees who are taking or considering legal action under the FLSA. Although the AI is couched as “guidance,” it is sure to be cited to courts in the near future as persuasive authority. The level of judicial deference to the AI, and the extent on which it will be relied in court opinions then will determine its ultimate effect on any extension of the “joint employer” analysis.

In addition, the DOL investigators on cases involving joint employment issues are sure to use the AI as leverage when attempted to move cases toward resolution outside of trial.

In short, and in order to avoid unintended liability under the FLSA, employers should become familiar with the content of the AI, its possible ramifications, and the specifics of the proposed parameters of the analysis that will be used by the WHD in future investigations.

Is binding arbitration an effective alternative to litigation for employment disputes? One PA federal court thinks it’s not.

soccer flick

In a case that could act as a jumping off point for discussion regarding the pros and cons of mandatory arbitration in employment cases, the U.S. District Court for the Eastern District of Pennsylvania ultimately upheld an arbitrator’s decision that a soccer coach’s firing did not violate his employment agreement. Nowak v. Penna. Professional Soccer, et al., EDPA, No. 12-416 (January 11, 2016). In its published opinion, the court provided its own view of binding arbitration as a problem resolution mechanism – and the language is not supportive of that form of ADR.

Basic background of the case:

Piotr Nowak, a soccer coach employed via a contract with the Philadelphia Union professional soccer team (“the team”), was fired for behavior deemed by the team to be violative of his contract.

Nowak filed a lawsuit, to which the team responded by asking the court to move the case to mandatory arbitration, spelled out in a provision of the employment agreement. The case was sent to arbitration, and the parties agreed upon an arbitrator who ultimately found against Nowak and determined that his firing was appropriate under the terms of his contract. The arbitrator entered a Final Award, also directing Nowak pay the defendants’ attorneys’ fees and costs.

Nowak appealed, asking the court to vacate the award; the team asked the court to uphold it.

A court’s standard of review of an arbitrator’s award:

A federal court reviewing the decision of an arbitrator selected by the parties gives extreme deference to that arbitrator’s findings. Parties to arbitration should recognize – before participating – that federal courts do not second-guess an arbitrator’s award, but instead presume the reasoned award is enforceable. A court cannot vacate an arbitration award simply because it disagrees with the arbitrator’s findings on the merits or because it believes that the arbitrator made a factual or legal error.

The court began its review by citing the Federal Arbitration Act’s list of the narrow circumstances under which a court may vacate an arbitration award. Under that Act, awards may be vacated where: “(1) procured by corruption, fraud, or undue means; (2) the arbitrator demonstrated evident partiality or corruption; (3) the arbitrator was guilty of misconduct in refusing to postpone the hearing upon sufficient cause shown, in refusing to hear evidence pertinent and material to the controversy, or of any other misbehavior by which the rights of any party have been prejudiced; or (4) the arbitrator exceeded her powers or so imperfectly executed them that a final and definite award upon the subject matter submitted was not made.”

Because none of those circumstances was found to apply in Nowak’s case, the court upheld the arbitrator’s decision.

The court’s comments regarding binding arbitration:

In its “Conclusion” however, the court did not mask its concern about the use of binding arbitration as a problem-solving mechanism in employment issues:

To our continuing surprise, intelligent and worldly parties often sign agreements to arbitrate future disputes and limit their fulsome due process citizen rights to a federal court believing they will obtain a quicker answer with less costs. . . . Federal courts continue to resolve matters . . . more expeditiously than in many private arbitrations. As confirmed in this case, the lawyer and arbitrator fees and costs in private arbitrations are often equal or exceed the fees in a taxpayer-funded and Article III Court from which there are meaningful rights to appeal. Lastly, as the parties learned in this case, once they seek judicial scrutiny or confirmation in the public courthouse, they may lose secrecy.

We favor alternative dispute resolution especially between parties of equal bargaining power motivated to finally resolve their dispute in private and with no appeal right. Parties can always seek the aid of this Court or, if necessary, an experienced private mediator, including men and women who formerly served this Court with distinction, in reaching a confidential settlement. While we encourage private settlements, this case, and many like it, should remind parties and counsel of the risks in cavalierly agreeing to mandatory arbitration when they should know, from experience, of a need to often ask a judicial officer to vacate findings from a private forum and the judge’s deference to the private forum.

While the court raised valid and arguable points in its analysis, those comments stand alone in the opinion, without an opposing voice. It will be interesting to see whether the case is appealed to the Third Circuit and, if so, whether that court will take the opportunity to either add to or disagree with the comments and the district court’s clear concern regarding binding arbitration in the employment arena.



Soccer flick-up still taken by permission from “22 Flick Up Advanced Soccer Tricks”


“Aberrant” behavior by a police officer supported employer’s decision not to return the officer to work after brain surgery .

doctors note

The 6th U.S. Circuit Court of Appeals has held that under the Americans with Disabilities Act (ADA), an employer may rely on a credible, scientifically-based medical opinion to exclude someone from returning to work, even if that opinion is contradicted by another medical provider’s opinion.

This holding came in the case of a city that decided not to allow a police officer to come back to work after his medical leave for brain surgery. Michael v. City of Troy Police Department, et al, 6th Circ., No. 14-2478, December 14, 2015. Here’s a timeline of the relevant facts:

  • Todd Michael began working for the City of Troy, Michigan, as a police officer in 1987;
  • In 2000, Michael was diagnosed with a non-cancerous brain tumor;
  • Michael underwent surgeries in 2000 and 2001, each of which was only partially successful in removing the tumor;
  • The City granted paid leave for each surgery and returned Michael to work after each, once his surgeon cleared him for work;
  • In 2007, the City became aware of certain “aberrant” behavior on Michael’s part that continued into 2009;
  • The behavior included episodes in which Michael secretly recording marriage counseling sessions with his then-wife and then used the recordings in an attempt to charge her with perjury;
  • He also filed a lawsuit against the police chief after the chief was provided a number of steroid vials (some of which were labeled “for veterinary use only” and some with labels in foreign languages) belonging to Michael;
  • Finally, the City learned that Michael accompanied a drug dealer to several drug deals without explanation or work-related reason;
  • The City began an internal investigation into these issues, but the investigation was suspended when, in early 2009, Michael informed his superiors that he needed additional brain surgery;
  • The surgery took place in 2009, and Michael’s surgeon subsequently cleared him to return;
  • In light of Michael’s pattern of behavior beginning in 2007, the City informed Michael that he had to pass a psychological evaluation before he returned to work.

The neuropsychologist to whom Michael was referred by the City interviewed Michael for a total of seven hours, conducting various neurological tests, and then drafted an 11-page detailed written report in which she opined that he “may be a threat to himself or others.” Based on that report, the City put Michael on unpaid leave.

Subsequently, Michael sought his own evaluations and received opinions from other medical providers that he was fit to return to duty. (One other neuropsychologist hired by Michael to evaluate him agreed with the original opinion of “direct threat” – but Michael did not provide that report to his superiors.)

Michael then sued the City of Troy and its police department under the ADA, alleging that he was a “qualified individual with a disability,” and that the City had discriminated against him on that basis. The lower court granted summary judgment in favor of the City, holding that Michael was not qualified for the position of patrol officer. Michael appealed to the Sixth Circuit, which upheld the lower court’s ruling.

The ADA protects individuals who are qualified for their positions from unfair firings or demotions. However, under that same law, a disabled individual is deemed not to be qualified if he or she poses a “direct threat” to the health or safety of others which cannot be eliminated by a reasonable accommodation.

Whether an employer properly determines an individual to be a direct threat, for purposes of the ADA, depends upon the objective reasonableness of the employer’s actions. For example, an employer’s actions are deemed to be reasonable when the employer relies on a medical opinion that itself is objectively reasonable. That opinion does not have to be uncontroverted and may conflict with other opinions, but still can be viewed by the courts as objectively reasonable if based on sound and thorough medical reasoning.

The Sixth Circuit pointed out that there have been cases in which courts have held medical opinions of “direct threat” to be unreasonable – but those cases did not involve the level of detail found in the report regarding Michael.  In one case, a doctor opined that an individual could not be a lifeguard because “he’s deaf” and in another, a doctor simply provided “two scribbled lines at the bottom of a boilerplate evaluation form.”

According to the Sixth Circuit, the combination of the neuropsychologist’s testing and opinion, along with the investigation of Michael’s own conduct, led the City to its objectively reasonable conclusion. A well thought-out and detailed dissent in this case raises points for discussion, including questions regarding the court’s criteria for the determination of what constitutes a “reasonably objective” medical opinion. This issue seems to be far from clear, and is one that both employers and employees should be watching for further development.