Archive for the 'Employment' Category

Disney to Pay Out $3.8M in Wage-an-Hour Lawsuit

A little over a week ago saw news of an immense payout as Disney agreed to pay $3.8M to employees of their many resorts and timeshares.  The agreement comes after the United States Labor Department began an investigation into Disney which concluded that they routinely failed to pay employees for around fifteen minutes of work performed before and after their shifts.  Disney was also accused of deducting the expenses of uniforms from employees pay in such a manner that it would occasionally make it so that an employee received less than the minimum wage.

This agreement covers an enormous number of employees, well over sixteen thousand workers.  Thus, this payout isn’t quite as immense as it initially appears–coming out to a bit over $200 per employee.  However, it’s a good example of one of the most common types of legal action in the U.S. –wage-an-hour conflicts.  With this in mind, we’re going to look at exactly what wage-an-hour is and how it works to help you protect your rights as an employee or protect your business from costly lawsuits.

How Wage-an-Hour Works

Wage-an-hour lawsuits generally fall into a couple of categories.  First, where an employee isn’t being paid minimum wage–an obvious violation.  An extension of these lawsuits is what happened in the case of Disney, not paying employees whatsoever for hours worked.  Clearly, zero dollars is below the minimum wage anywhere in the country .  Second, where a company fails to pay their employees overtime hours which they are owed.

DisneyThe Fair Labor Standards Act (FLSA) guarantees each employee will be paid the federal minimum wage throughout the country, currently $7.25 an hour.  However, almost every state has their own individual law which is quite similar to the FLSA.  Minimum wage obviously varies a fair bit from state to state, as does the approach each state takes to enforcing minimum wage.  However, while the legal procedures of pursuing a case may vary a bit state to state, all the cases come down to establishing that you were not paid minimum wage for time worked.  This includes salaried positions where your salary paid divided by your hours worked comes out to less than minimum wage.  There are a couple exceptions to this general rule under the FLSA and many state laws: where tips compensate for what would otherwise be pay below minimum wage, student learners, and employees in training.  Not all of these exceptions are mirrored on the state level, and many of them are quite controversial in effect as they essentially allow pay well below a living wage.  Where an employer fails to pay minimum wage, an employee may sue them–or in many states file an action with a government organization specifically designated to handle such actions–and receive the pay they are due within the time period of the statute of limitations along with potential additional damages through state statutes.  Disney’s agreement bypassed any legal action, instead simply agreeing to pay a fixed amount in reparation for their failure to pay for all the hours their employees worked.

The second common wage-an-hour action, failure to pay overtime, does not particularly apply in Disney’s case.  However, it is important to know as cases dealing with unpaid overtime are extremely common.   Overtime generally includes any hours in excess of 40 in a week, 8 hours in a day, or being required to work more than 6 consecutive workdays.  Where you work overtime, an employer must pay generally pay you time and a half–although some states have situations where an employer must pay an even higher multiplier of your base wage.  There are situations where an employee may be exempt from overtime–most commonly where they receive pay of over $455 per week and have duties -usually within specific statutory categories–which require a certain amount of independent decision making in performing work.  Each state has a different approach to exactly when a position is overtime exempt, and more recently it’s been an issue targeted at the federal level as well.

The Importance of Keeping Complete Records

Disney’s case focuses on failure to pay for time worked, and there was apparently a fair bit of evidence to this point.  However, Disney is rather well known as a particularly litigious company.  So you might be asking yourself, why didn’t Disney fight it out?  The answer may be in the record-keeping practices of the resorts the employees worked at.

The FLSA requires employers to keep accurate records of the hours their employees work as well as wages earned.  These recordkeeping requirements can become more involved from state to state, and even the FLSA has some more specific requirements.

This requirement to keep proper records has sunk many an employer’s chances in a wage-an-hour case.  This is because, where an employer fails to keep proper records, employees can rely on representative evidence to establish the hours they’ve worked. This evidence only needs to be sufficient for a reasonable inference that the employees’ evidence is an appropriate approximation of the hours they worked.  For this reason, it is incredibly important for an employer to keep legally compliant records.  If they don’t, their employees basic approximations of time worked in what format they can provide it–from testimony to crudely kept notebooks–will determine what hours the court will consider that they worked.

Apparently, Disney’s resorts failed to keep statutorily compliant records of the hours worked by many of the employees in the class action lawsuit brought against them.  This likely was the straw that broke the camel’s back when it came to deciding whether to fight the case against them.  Without properly maintained records their chances of success dropped precipitously, they likely simply decided that around $200 per employee wasn’t too much to pay in light of the expenses of litigation and their chances of success.  So as an employer, remember, if bad record keeping can sink Disney it definitely will do you no favors.  As an employee pursuing a wage-an-hour case, if it sank Disney it’s worth determining whether your employer has kept sufficient records if you believe you have been paid unfairly.

Dress Code: Trump’s Alleged Requirements for Female Staffers is Surprisingly Legal

Long before he became President of the United States, President Donald Trump was obsessed with his public image, despite his apparent inability to get a decent haircut, and the image projected by those surrounding him.  This obsession with how he and his staff look has not gone away since he took office, but it has come under increased scrutiny. Now, thanks to a few comments made by one of President Trump’s campaign assistants, people who have already derided President Trump’s misogynistic ways have a new reason to hate him because he prefers that his female staffers dress “like women.” This particular preference has reportedly led to women feeling pressured to eschew pants in favor of dresses when in President Trump’s political workplace.

It is legal for an employer to have a dress code and even grooming standards. For certain industries, these restrictions are necessary for safety, such as prohibiting hospital employees from wearing jewelry that might interfere with their ability to assist patients or requiring construction workers to wear steel-toed boots. In other industries, these restrictions are part of the image presented by the company, which is the case with Disney and its infamous grooming requirements for theme park employees.

If Women Must Dress Like Women, Then Men Must Dress Like Men

dress codeEven though dress codes and grooming standards are legal, they are subject to anti-discrimination laws on both the federal and state level. In terms of laws prohibiting gender discrimination, employees of one gender cannot be required to adhere to far more regulations than employees of another gender. For instance, a restaurant cannot require male wait staff to wear three-piece bespoke navy suits while allowing female wait staff to dress however they want, regardless of whether that clothing choice is a ball gown or dirty old sweatpants.

To that end, though, a company can require its employees to dress within certain perimeters, if those perimeters are comparable between genders. A company can require all of its employees to dress in jeans and t-shirts or in suits and dresses. The courts have already made it clear that the dress code can, to the average person, appear to be sexist, so long as it is equal. An example of a dress code that may appear to be sexist at first would be cocktail waitress outfits. These outfits are notoriously skimpy, and many people label them as sexist because they promote the objectification of women. However, so long as the male counterparts of the waitresses have a similarly demanding dress code, a dress code demanding skimpy outfits is perfectly legal.

Since the courts have determined that requiring women to dress a certain way is not discriminatory, so long as it is comparable to what the men must wear, it is not discriminatory for Donald Trump to request that women wear feminine attire, as long as he makes a similar request of men to dress in masculine attire. It does appear that men who work for Donald Trump are required to wear suits complete with ties. Requiring a man to wear a suit with a tie is comparable to making a woman wear a dress or other such feminine business attire. Thus, Donald Trump’s requirement for women to dress “like women” appears to be perfectly legal because he requires his male staffers to essentially dress like men, meaning that the burden for both genders is equal.

Dressing Like a Woman Does Not Mean Wearing an Ivanka Trump Dress

Now, if Donald Trump were to start requiring his female staff to wear Ivanka Trump-brand dresses, which he might start doing to increase the sales of his daughter’s clothing line, then he might wind up running afoul of the law. This is because making employees wear a specific item of clothing from a specific manufacturer or brand is tantamount to making them wear a uniform like those worn by McDonald’s employees. An employer can require the employees to wear uniforms if it is used to promote the brand or for any reasons why a dress code can be implemented. Additionally, under federal law, an employer can take the money required to cover the cost of the uniform out of the employee’s paycheck or require the employee to buy the uniform, the latter method being the one preferred by retail stores that have their employees dress in the store’s clothing. However, the amount used to cover the cost of the uniform cannot be so high that the employee is left with a wage that is below their state’s minimum wage. With the average Ivanka Trump-brand dress costing anywhere between $50 and $150, some lower-level staffers for the White House may end up facing clothing bills that would exceed their paychecks. Thus, if Donald Trump does end up requiring female White House staffers to wear dresses from his daughter’s clothing label, then he would likely be legally obligated to cover the cost of the dresses because they are very specific clothing items and their prices most likely make them cost-prohibitive to some employees.

Of course, requiring his female staffers to wear dresses from Ivanka Trump’s clothing line may lead to other problems for Donald Trump and his staff because of his position in the federal government, which are problems that President Trump may already be dealing with outside of the media’s scrutinizing eye due to his preference to see male staffers in Trump-brand ties. Employees of the executive branch are free to wear whatever clothing brands they want, but they cannot actively promote the brand that they are wearing. Doing so is seen as a “misuse of position,” and is prohibited by a regulation put forth by the Office of Government Ethics. Kellyanne Conway, a counselor to President Trump, was recently accused of violating this regulation when she talked about Ivanka Trump’s clothing line on a television program and encouraged people to buy clothes from the brand. Often, employers have their employees wear clothing from only one brand in order to promote that brand, especially where the employees are working for a clothing brand in a retail store setting. Even though the White House is not a clothing retailer, requiring all of its female employees wear the same brand of clothing may give the impression that it is promoting that particular brand and, thus, a misuse of the White House’s position in the federal government.

It is also a misuse of position if a holder of a public office uses their government position for their own private gain or the private gain of their friends or family. If President Trump were to put all of his female staffers into Ivanka Trump-brand dresses at their own expense, he would be using his position as President to provide financial gain to his daughter as a private business owner. Additionally, if President Trump were to use federal funds to pay for the dresses, much like a traditional private employer would use company funds to cover the cost of uniforms, then Ivanka and her clothing line would be receiving a direct financial gain from the federal government as a result of her dad being President.

Even if Donald Trump were to pay for the dresses out of his own pocket, the female staffers would only be wearing the dresses as a result of Donald being President, so Ivanka would be experiencing a personal financial benefit from the White House female staffers wearing her company’s dresses courtesy of her father’s position. Ergo, Donald Trump would be misusing his official role as President of the United States in two ways if he required his female staffers to wear Ivanka Trump’s dresses: by promoting his daughter’s company and by providing her with private financial gain.

Ultimately, It Is Allowed

While it may come off as sexist, Donald Trump can require his female staffers to dress “like women,” so long as he continues to hold his male staffers to the same general standard for grooming and dress codes. However, if the dress code becomes more restrictive by Donald Trump making his female staffers all wear dresses from one brand, especially if the dresses come from Ivanka Trump’s clothing line, then such a restrictive dress code may be illegal and in violation of federal government regulations. If you are facing a dress code at work that seems to be unfairly restrictive or heavily biased toward one gender, then you may want to talk to an employment lawyer about your rights as an employee in the workplace.

Uber is Under Fire, Again, for Sexual Harassment

Uber, the online transportation company whose app allows its users to hire private drivers, is making headlines again. About a month ago, angry customers began tweeting the #DeleteUber hashtag after Uber decided to suspend surge pricing during a taxi strike at JFK airport in protest of President Trump’s immigration ban. Customers accused Uber of strikebreaking and taking advantage of the immigration ban in order to promote itself.

The #DeleteUber hashtag has again appeared on social media following a claim of sexual harassment by a former employee.  Susan J. Fowler, a former Uber engineer, released an essay reflecting on her two year employment. She described it as “a strange, fascinating, and slightly horrifying story,” recounting a time when a manager propositioned her for sex.

Uber’s Response to Sexual Harassment Allegations

UberFowler claims that she complained to Human Resources about her manager’s request for a sexual relationship. In response, H.R. told Fowler that this was his first offense and that they were not going to reprimand him for his behavior. Instead, they made Fowler feel like she was in the wrong and encouraged her to transfer to a new team or risk getting a bad review from her manager. Feeling like she had no other choice, she ultimately transferred teams. Fowler later discovered the manager had propositioned several female Uber employees for sex and H.R. turned a blind eye to his behavior because he was a “top performer”.

In response to Fowler’s essay, Uber CEO Travis Kalanick has hired two attorneys to independently investigate the accusation.

What is Sexual Harassment?

Sexual harassment is a type of employment discrimination consisting of unwelcome sexual advances, requests for sexual favors, and other verbal or physical harassment of a sexual nature.

There are two types of sexual harassment: quid pro quo and hostile work environment. Quid pro quo harassment occurs when a supervisor or an authority figure requests sex, sexual favors or a sexual relationship in exchange for either not firing or punishing the employee or in exchange for favors, such as a promotion or raise.

Hostile work environment harassment occurs when there are frequent or pervasive unwanted sexual advances, comments or requests. It can also occur when there is other verbal or physical behavior, like sexual jokes, displaying inappropriate offensive material (such as watching porn on your computer screen in the workplace), or persistent unwanted interactions, such as asking for dates continually.

Other Allegations of Sexual Harassment

According to Fowler’s essay, there were several female employees who complained that the same manager propositioned them for sex and when these women reported the behavior to H.R., they were told it was the manager’s first offense, just like Fowler. Since Fowler’s essay surfaced, another female employee has come out and said her manager groped her breasts at a company retreat in Las Vegas. Other Uber female engineers have acknowledged that Uber has a systemic problem with sexism. There may be more stories of sexual harassment that have not been publicized due to fear of retaliation or non-disclosure clauses in their employment contracts.

Can Fowler Sue Uber for Sexual Harassment?

While Fowler certainly can sue Uber for sexual harassment, she is unlikely to prevail. Her essay recalls an instance where her superior requested she engage in a sexual relationship with him. The sexual conduct did not appear to be made a term or condition of her employment at Uber. Further, Fowler was neither promised a benefit if she acquiesced, nor threatened harm if she refused. For this reason, a claim of quid pro quo sexual harassment would not be found.

Neither would a court of law find Uber guilty of a hostile work environment. Fowler describes a single incident. One of the key elements of hostile work environment sexual harassment is that the conduct must be both severe and pervasive. In other words, the behavior must last over time, not just be a singular incident. It is important to note that the conduct must be pervasive with regard to a particular employee and continuous over time. Even though Fowler’s manager propositioned other women at Uber for sex, it is unclear whether he made sexual advances to any one employee more than once and over a long period of time. What we do know is Fowler was approached once. Without more evidence of continuous harassment, hostile work environment sexual harassment would not be found.

Retirement May Have to Wait After Trump’s Latest Executive Order

The presidential orders continue to come thick and fast from the Trump administration.  One of President Trump’s most recent orders, titled Presidential Memorandum on Fiduciary Duty Rule, takes aim at deregulating those who invest your retirement funds.  It does this by undercutting something we have discussed on this blog before–the Obama Administration’s changes to the duty somebody investing your retirement funds has to you.

Planning for retirement is always challenging.  With that in mind, you always want the best possible advice.  However, the standards the people giving you that advice are held to might surprise you–and not in a good way.  The fiduciary duty rule was designed to make sure your always got the best advice possible.  So let’s take a look at exactly what the rules being targeted do and how Trump’s new memorandum will affect them.

What Are the Changes Being Targeted?

RetirementEarly last year, the Obama administration announced through the Department of Labor that they were changing the rules when it came to the duties a retirement investor owes their clients.  As it was, retirement advisors generally owed their clients “suitable advice.”  The new rule applied a higher level of obligation, known as a fiduciary duty, between client and retirement investor.

fiduciary duty is a legal duty to put the interests of a person or party above all else; violating this duty leads to legal repercussions. Somebody who has a fiduciary duty is called a fiduciary. In 1974, the Employee Retirement Income Security Act (ERISA) was passed to help create standards and practices for retirement and health plans. The original act applied a broad rule, assigning fiduciary duty to those rendering investment advice regarding a retirement plan for compensation. However, one year after ERISA was passed, the act was amended so that the application of fiduciary duty to retirement advisors was substantially limited.  Thus, the usual standard applied to retirement investors has been, as mentioned above, “suitable advice.”  Suitable advice requires an advisor to provide investing suggestions which the adviser believes are, as the name of the advice suggests, suitable to the client’s interest.  This is as opposed to providing advice that puts the interests of their client above all else–as per a fiduciary duty.

So just how much damage can entrusting your retirement to an advisor who is held to less than a fiduciary standard do? While there are certainly advisors who will provide non-conflicting advice regardless of the standard they are held to, the damage caused by conflicted advisors is substantial.  Leading up to the rule change, the Obama administration issued a study estimating that conflicts of interest cost retirement plans about $17 billion a year. The Department of Labor estimated that conflicted investment advice “could cost IRA investors between $95 billion and $189 billion over the next 10 years and between $202 billion and $404 billion over the next 20 years.”

The way the lack of fiduciary duty might be costing you money is where an retirement advisor suggests investment opportunities that provide them better commissions instead of providing you better returns. It is very common for companies to offer percentage commissions or rewards to advisors on certain investments or types of investments.  For example, the company Table Bay offered “a Maserati to advisers who sell at least $7.5 million in annuities in 2014 and a BMW, Range Rover, or Porsche to those with at least $6 million in sales.” These sort of deals can lead a retirement advisor to recommend investments with the best commissions as opposed to investments that are best for your retirement portfolio—leading to the costs described above.

Looking at these facts, this rule change certainly seems like it’s pretty beneficial to the public.  However, it has had its critics since it was first announced.  Those opposed to the rule have said that the changes may push some advisors out of the market by decreasing their profits.  They have also argued that it will lead retirement investors to offer services to lower income individuals.  While there hasn’t much evidence to indicate investors would abandon such a substantial market, it seems President Trump has been listening intently to the fiduciary duty rule’s detractors as he took the time to focus an entire memorandum on gutting the rule.

What Exactly Does the Presidential Memorandum Do?

A Presidential Memorandum has less formalities than an executive order, but carries similar force.  This means that, because the fiduciary duty rule was an agency policy change by the Obama administration as opposed to a Congressional Act, the rule is the sort of thing Trump can target directly through executive orders.

As it is, his memorandum is slightly more measured in its approach.  The memorandum states that the fiduciary duty rule is not consistent with the policies of Trump’s administration.  With this in mind, the memorandum requires the Secretary of Labor to review the rule in order to ensure that three tenants apparently crucial to any regulation under Trump’s watch.  First, the Secretary needs to determine is the rule, or any element of it, is likely to harm investors due to a reduction of access to advice–essentially ask advisors whether they will offer less services if they have to provide advice exclusively in the best interests of their client.  Second, whether the rule, or any of its parts, has caused disruption in the retirement investment industry sufficiently to have a negative effect on investors or retirees.  Third, the Secretary must determine whether the rule will cause an increase in litigation–an almost certain byproduct of holding investors to a higher standard of duty–as well as an accompanying increase in price for those seeking retirement services.  If, after a review of the legal and economic impact of the rule, it is determined that any of the three points in the memorandum are at issue then the Secretary of Labor must get rid of–or at least revise–the fiduciary duty rule.

Is This the End of the Fiduciary Duty Rule?

Given how broad the three elements in the memorandum are, it’s a pretty good bet that the fiduciary duty rule will be done for in the next few months.  At a minimum, we can expect a substantial delay before the rule takes effect.  Unfortunately, this change is part of a trend of demanding deregulation even where it doesn’t necessarily make sense.  What could have been a substantial step in consumer protection seems like it will, unfortunately, never materialize.

EEOC Fights Mental Health Discrimination

Disabilities come in many shapes and forms, from obvious to the eye to harder to pin down.  Few types of disabilities are less widely understood than mental disorders.  These disabilities encompass a huge variety of illnesses and disorders; mood disorders, schizophrenia, anxiety disorders, panic disorders, OCD, PTSD, autism, and many more.  Greater than one in four Americans older than 18, approximately 26.2%, suffer from some sort mental illness–around 57.7 million people.  In fact, mental disabilities are the cause of disability in the U.S. for people between the ages of 15 and 44.

EEOC Mental HealthGiven how widespread and varied mental disabilities are, it is no surprise that employment discrimination based on such disabilities is an incredibly hot button issue.  Just last month, the Equal Employment Opportunity Commission (EEOC) released a comprehensive publication on the rise of discrimination based on mental health throughout the nation.  This has created heightened focus on an employer’s role in preventing such discrimination throughout the nation.  This heightened focus has been accompanied by a rise in the number of lawsuits alleging employment discrimination based discrimination.  The EEOC said in their publication last month that they alone had handled over 5,000 claims and received around $20M in settlements for mental health discrimination cases in 2016 alone.

With this in mind, it’s never been more important to understand how to approach mental health discrimination as an employer or the understand your rights if you suffer from a mental disability.  So how should a mental disability be handled by an employer?

Understanding Mental Disability Discrimination as an Employer

Federal law bars employers from taking adverse employment action (not hiring somebody, firing somebody, refusing promotions, etc.) based on a protected classification such as race, national origin, religion, gender, veteran status and disability. Specifically, the Americans with Disabilities Act (ADA) protects against discrimination based on an actual or perceived (by an employer) disability. This includes mental disabilities.  Thus, an employer cannot take adverse employment action based on an employee or would-be employee’s mental disability.  What’s more, employers must make reasonable accommodations—any accommodation that would not cause undue hardship for the employer—for the special needs of an employee with some sort of mental disability.

So what steps can you take as an employer to ensure your business doesn’t run afoul of the law?  The EEOC’s first recommendation is, as with any disability, always act on facts as opposed to stereotypes about a mental disability.  An anxiety disorder, for instance, should not automatically disqualify an applicant for a position that is particularly stressful.  Instead, an employer should only take adverse action where they have actual evidence that a mental condition disclosed by an applicant would make them incapable of performing a jobs duties.  Additionally, where there is evidence that a mental disability would cause an applicant to create a serious safety risk–regardless of reasonable accommodations–an employer may fire or refuse to hire that person based on their mental disability.

We’ve mentioned reasonable accommodations a couple times now, and it’s worth explaining how they work.  They’re basically exactly what they sound like, you need to make changes to workplace environment, work schedule, etc. so long as they aren’t so costly as to put a serious burden on an employer.  Some examples from the EEOC include altering work schedules to allow an employee to attend therapy sessions, providing quiet work spaces, specific shift assignments, etc.

Obviously an employer does not need to make any and all accommodations, sometimes the cost of such an accommodation will simply make it a bridge too far.  However, it’s important to understand that you must at least attempt accommodations for an employee before taking action unless you’re eager for a discrimination lawsuit.

What Does That Mean for You?

We’ve established that an employer can’t usually take adverse employment action based on any mental disability you may have–this includes firing you, refusing to hire you, denying you promotions or raises, forcing you to take leave, or even relegating you to worse duties or shifts than your peers.

Generally, you are allowed to keep your condition private and an employer may only ask about any condition you have in certain specific situations.  First, if you ask for accommodations–more on that later.  Second, after it has made you an actual job offer but before you start work.  Third, when they are engaged in some sort of affirmative action in hiring–focusing on tracking employing people with disabilities.  Finally, when there is some objective evidence that you either pose a danger or are incapable of performing your duties due to your condition. 

There may be situations where you choose to disclose any condition you may have, such as where you need specific accommodations in order to perform your duties.  You may also want to disclose in order to establish that you should receive benefits through other laws such as the Family and Medical Leave Act–a federal law requiring employers to provide employees with a certain amount of unpaid leave for medical reasons or to take care of family members.  As a rule, it is better to disclose a condition and receive accommodations or benefits before they become necessary.

Any disability qualifies under the ADA which, without treatment, would substantially limit, for example, your ability to communicate, care for yourself, concentrate, interact with other people or make your duties harder, more uncomfortable, or particularly time-consuming.  This is true even if you have the condition under control via treatment.  It is important to understand that a mental condition does not need to be extremely severe or even permanent in order to receive protection and accommodations under the ADA.  In fact, temporary mental conditions are more likely to merit accommodations such as leave because they will eventually pass.  The question in whether a temporary mental condition will qualify is not necessarily how frequently it could limit you, but instead how restrictive they are on what you can do when you are afflicted. 

How to Protect Your Rights as an Employee with a Mental Disability

If you think an employer has violated your ADA rights, reporting the situation to the EEOC will allow them to advise you on the situation and begin an investigation of their own.  You should also report to the EEOC if you are harassed in the workplace over your condition, and an employer fails to take steps to correct this despite being informed of the issue.  It is also illegal for an employer to retaliate against you for reporting to the EEOC or bringing an action against them.  Remember that there is a time limit on bringing suits such as these, generally 180 days after the violation occurs, so know your rights and if you think you are mistreated–act before it is too late.