Tuesday, March 31, 2015

Are Meerkat and Periscope the “next big thing” for employers to worry about?


Have you downloaded Meerkat or Periscope to your iPhone? Do you even know what Meerkat and Periscope are? They are new apps that permit you to live-stream video. They essentially work the same way—when you launch a live-stream, the app tweets out a link for your followers to watch your video. The only real difference in the experience (aside from the aesthetics of the apps) is that once you stop your stream on Meerkat the link goes dead and the video disappears, while Periscope can keep the link live for 24 hours of replay viewing.

Last week, within hours of Meerkat’s and Periscope’s launches, a massive building explosion on New York’s Lower East Side gave us a glimpse of the potential power of these apps, as they turned everyone with an iPhone into instant video-journalists. As for me, so far I’ve only used them to send out video of my dog sleeping on the couch (although I hope to put Periscope to use for some video legal updates in the near future).

Should employers worry about these apps? They offer employees tremendous power. Imagine your workers live-streaming alleged safety violations in your plant, or active sexual harassment, or a termination meeting, or an employer trying to break up a picket line?

Yet, this technology isn’t the-sky-is-falling for employers. For years, the iPhone has placed this same power into employees’ hands. An iPhone + an active internet connection + a YouTube account isn’t that much different than these new live-streaming apps. These apps remove some of the friction from the posting experience, but otherwise don’t create any new opportunities for your employees to journalize your workplace.

Employers shouldn’t knee-jerk ban these apps (or mobile devices in general) from the workplace. It’s possible that the NLRB would permit employers to ban the use of these apps in the workplace, but it’s just as likely that the NLRB will look at such policies with a harsh eye under its section-7 lens. Until we get some guidance from courts on these issues, there is real risk in broad-based bans of mobile technologies or apps.

Instead of rolling out a reactionary policy that could catch the NLRB’s attention, train your employees on their responsible use of the Internet, and your managers and supervisors on the need to be very aware of the possibility that everything that happens at work no longer necessarily stays at work. Indeed, if it happens at work, it is just as likely to end up on Facebook, Twitter, Instagram, YouTube … or Periscope.

You can follow me on Periscope @jonhyman, and tune in at 5 pm on April 11, where I’ll be broadcasting some of my daughter’s performance live from the Rock and Roll Hall of Fame.

Monday, March 30, 2015

6th Circuit deals blow to independent contractors


TheCableGuyHave you ever had the cable guy show up to your house, only to see the name of some random LLC on the side of his work truck? Many cable companies use the services of “independent contractor” installers. But, are those installers truly “independent contractors,” or are they employees of the cable company? According to the 6th Circuit, in Keller v. Miri Microsystems LLC (3/26/15) [pdf], the answer is likely the latter.

In examining whether the plaintiff satellite dish installer was an employee or contractor, the court applied the six-factored “economic realities” test:

  1. the permanency of the relationship between the parties;
  2. the degree of skill required for the rendering of the services;
  3. the worker’s investment in equipment or materials for the task;
  4. the worker’s opportunity for profit or loss, depending upon his skill;
  5. the degree of the alleged employer’s right to control the manner in which the work is performed; and
  6. whether the service rendered is an integral part of the alleged employer’s business.

The majority applied a fact-based analysis to conclude that there were too many facts in dispute to make a legal determination on the issue. The dissent, however, took a more common-sense approach to the issue:

Despite our cataloging of the various factors that inform our decision, in the end we must take a common sense approach and look at the situation in its entirety. What does that show? Miri [the plaintiff’s single-member LLC] served as a middleman in the satellite installation business. The LLC had a single member: Anthony Miri. Its business plan was to work with individuals such as plaintiff who carry out the actual installations. Miri does not provide benefits to these individuals or withhold taxes. Nor does it enter into an employment contract with them. Plaintiff moved from providing installation services for another middleman, to Miri, and later to HugesNet directly, and provided additional products and services to customers directly while doing installations for Miri. It seems abundantly clear that both plaintiff and Miri intended that plaintiff be an independent contractor and conducted themselves accordingly. It is not clear what more the parties could have done that would have satisfied the Majority that plaintiff was an independent contractor.

What does all this mean? It is very difficult to establish, as a matter of law, that a worker is an independent contractor. Unless you want a jury deciding this complex issue, err on the side of “employee” unless it is abundantly clear that the worker is an independent contractor under the above six-factored test.

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Friday, March 27, 2015

WIRTW #361 (the “#RaceTogether” edition)


Have you heard the one about the coffee chain that wants its employees to engage customers about issues of race and racism in America? Here are the best things I read this past week on this issue, courtesy of Robin Shea’s Employment & Labor Insider:

And here’s the best thing I watched this past week on the issue, care of John Oliver’s Last Week Tonight on HBO.

Here’s the rest of what I read this week:

Discrimination

Social Media & Workplace Technology

HR & Employee Relations

Wage & Hour

Labor Relations

BREAKING: FMLA’s “same-sex spouse” rule on hold, for now


Today, the new rule that would permit FMLA benefits for same-sex spouses was to take effect. However, late yesterday, a federal judge in Texas granted a preliminary injunction [pdf] temporarily halting the rule.

The plaintiffs—the attorney generals of four states that do not recognize same-sex marriages—successfully argued that they were likely to succeed on the merits of their claim that the FMLA rule infringed on their states’ rights under section 2 of the Defense of Marriage Act to ignore same-sex marriages lawfully entered in other states.

This is only a temporary victory for the plaintiffs in this case. And, while it legally only impacts the four states that are plaintiffs in this action, practically, the DOL will hold any implementation of this rule until this case plays itself out.

As for the merits of the case itself, as Robin Shea points out, this case could become moot (clearing the way for the FMLA rule-change) if the Supreme Court legalizes same-sex marriage later this term. Fingers crossed.

Thursday, March 26, 2015

I’ll give you one guess where the NLRB is holding its “ambush election” training?


Since I’ve already provided more than 3,000 words of quality labor-and-employment content this week, today’s post will be on the (much) shorter side.

On April 14, the NLRB’s “ambush election” rules take effect. You can read all about these rules here. In advance of this implementation, the NLRB is training its employees on the ins and outs of these new rules. Do you know where the NLRB is conducting this training?

According to the U.S. Chamber of Commerce, the NLRB is holding its “ambush election” training at the New York City office of the Service Employees International Union. Does it seem a bit … disingenuous / offensive / plain-ol’-wrong … that the NLRB has chosen to train its own employees (federal employees, paid by your and my tax dollars) at the office of an organization that will be the beneficiary of these pro-union election rules? I’ll give the NLRB one thing. At least it doesn’t play hide-the-ball with its very pro-union agenda.

Wednesday, March 25, 2015

BREAKING: McDonnell Douglas lives! #SCOTUS applies decades-old test to pregnancy accommodation claims


This morning, the U.S. Supreme Court issued one of its most anticipated employment-law rulings of this term, in Young v. United Parcel Service [pdf]. The case asked under what circumstances an employer must provide a workplace accommodation to a pregnant employee.

In its ruling, the court rejected the positions offered by both the employer and the employee.

  • UPS argued that the Pregnancy Discrimination Act requires courts to compare the accommodations an employer provides to pregnant women with the accommodations it provides to others within a facially neutral category (such as those with off-the-job injuries) to determine whether the employer has violated Title VII. The Court rejected this argument as too narrow of a reading of the statute.
  • Young argued that the PDA requires an employer to provide the same accommodations to workplace disabilities caused by pregnancy that it provides to workplace disabilities that have other causes but have a similar effect on the ability to work. The Court rejected this argument because the PDA, on its face, does not grant pregnant workers an unconditional “most-favored-nation” status.

Instead, the Court crafted its own interpretation by applying a modified McDonnell Douglas analysis to pregnancy accommodation claims:

Thus, a plaintiff alleging that the denial of an accommodation constituted disparate treatment under the Pregnancy Discrimination Act’s second clause may make out a prima facie case by showing, as in McDonnell Douglas, that she belongs to the protected class, that she sought accommodation, that the employer did not accommodate her, and that the employer did accommodate others “similar in their ability or inability to work.”

The employer may then seek to justify its refusal to accommodate the plaintiff by relying on “legitimate, nondiscriminatory” reasons for denying her accommodation. But, consistent with the Act’s basic objective, that reason normally cannot consist simply of a claim that it is more expensive or less convenient to add pregnant women to the category of those (“similar in their ability or inability to work”) whom the employer accommodates….

If the employer offers an apparently “legitimate, nondiscriminatory” reason for its actions, the plaintiff may in turn show that the employer’s proffered reasons are in fact pretextual. We believe that the plaintiff may reach a jury on this issue by providing sufficient evidence that the employer’s policies impose a significant burden on pregnant workers, and that the employer’s “legitimate, nondiscriminatory” reasons are not sufficiently strong to justify the burden, but rather—when considered along with the burden imposed—give rise to an inference of intentional discrimination.

The plaintiff can create a genuine issue of material fact as to whether a significant burden exists by providing evidence that the employer accommodates a large percentage of nonpregnant workers while failing to accommodate a large percentage of pregnant workers. Here, for example, if the facts are as Young says they are, she can show that UPS accommodates most nonpregnant employees with lifting limitations while categorically failing to accommodate pregnant employees with lifting limitations. Young might also add that the fact that UPS has multiple policies that accommodate nonpregnant employees with lifting restrictions suggests that its reasons for failing to accommodate pregnant employees with lifting restrictions are not sufficiently strong—to the point that a jury could find that its reasons for failing to accommodate pregnant employees give rise to an inference of intentional discrimination.

What’s the problem with this decision? As Justice Scalia astutely and correctly points out in his dissent, by permitting a pregnant worker to establish pretext by demonstrating a disadvantage presented by the application of a facially neutral work rule, the majority’s opinion allows one to establish intentional disparate treatment by demonstrating a disparate impact. What does this mean for employers? It means that employers must analyze the impact of work rules on pregnant workers and accommodate accordingly. Thus, in application, the majority’s rule grants pregnant workers the unconditional “most-favored-nation” status that the majority says it was rejecting.

My practical take for handling pregnant workers remains unchanged. Unless you can unequivocally demonstrate that you’ve never provided an accommodation to a disabled worker, you should be prepared to offer the same to your pregnant workers.

A lesson on salaried employees: Ohio court confirms that fluctuating work week cannot apply retroactively


Just because you pay an employee a salary does not render that employee “exempt” from the overtime requirements of the Fair Labor Standards Act. A salaried employee can be non-exempt if the employee fails to meet the non-salary aspects of the tests for the exemption. For example, a assistant retail manager who exercises no independent judgment in how he or she “manages” the store, but merely serves as a glorified, and more highly paid, babysitter for the other employees.

As an employer, you have two options to pay these salaried, non-exempt employees:

  1. Under the standard method, you calculate the employee‘s weekly rate based on the salary divided by the number of hours worked that week, and then pay the employee 1.5 times that rate for all overtime hours. Thus, if a non-exempt employee earns a salary of $1,000 a week, and works 50 hours in a week, the employee would earn an additional $30 per hours worked over 40 ($1000 / 50 = $20 per hour base weekly rate x 1.5 = overtime premium of $30). Thus, in this week, the employee would earn an additional $300 for the 10 hours of overtime, rendering his total pay for that week $1,300, not the customary $1,000 salary.

  2. Under the fluctuating workweek method, you include the base-rate part of the overtime premium in the employee’s weekly salary, and only pay the 0.5 premium kicker as overtime. Using the same example as in number 1 above, the employee would still have an hourly rate of $30, but would only earn an additional $100 for the week, as under this method, $20 of the $30 overtime rate has already been paid as part of the base salary.

As you can see, there is a clear economic advantage to employers using the fluctuating workweek calculation to pay overtime to salaried non-exempt employees. You’ll realize a 66 percent savings on your overtime pay. Under the FLSA, however, an employer cannot unilaterally implement the fluctuating workweek calculation. Instead, to pay salaried, non-exempt employees via this advantageous method, you must meet these four elements:

  1. the employee’s hours must fluctuate from week to week;
  2. the employee must receive a fixed salary that does not vary with the number of hours worked during the week (excluding overtime premiums);
  3. the fixed amount must be sufficient to provide compensation every week at a regular rate that is at least equal to the minimum wage; and
  4. the employer and employee must share a “clear mutual understanding” (best confirmed in a written document) that the employer will pay that fixed salary regardless of the number of hours worked.

Recently, an Ohio federal court examined whether an employer, sued in a misclassification case, can use the fluctuating work week for its calculation of unpaid overtime. The court said no, for one key reasons: in a misclassification case, it is impossible for the employer and its employee to have had the required “clear mutual understanding.” Because the parties never agreed to an essential term of a fluctuating work week arrangement—that overtime would be paid at different rates depending on the number of hours worked per week—it is improper to use that calculation for purposes of back pay in a misclassification case.

What are the takeaways from this case?

  1. If you haven’t recently audited your wage-and-hour practices, it’s a good idea to do so sooner rather than later. Classification issues should be a key component of any wage-and-hour audit. Do not mis-assume that an employee is exempt merely because you pay a salary.

  2. If you have non-exempt salaried employees who work hours fluctuate from week to week, give strong consideration to implementing a fluctuating work week, via a written agreement that explains, in plain English the arrangement.

  3. If a salaried employees whom you’ve been treating as exempt sues claiming a misclassification, it is likely that you will have to pay damages at the full time-and-half overtime rate, not at the half-time fluctuating work week rate.

Tuesday, March 24, 2015

NLRB judge’s analysis of T-Mobile’s handbook is of note for the provisions she concluded to be lawful


Yesterday, I examined, in detail, the NLRB’s General Counsel’s memo on employer policies. Today, I’m going to examine a recent decision by an NLRB judge putting those principles to use.

The opinion [pdf] consolidated seven different unfair labor practice complaints against T-Mobile, challenging 17 different provisions in T-Mobile’s employee handbook, Restrictive Covenant and Confidentiality Agreement, and Code of Business Conduct.

More interesting than the work rules that the ALJ concluded violated employees’ section 7 rights are the work rules that the ALJ concluded did not.

Recording in the Workplace

Recall, yesterday, the NLRB-approved clause in the Wendy’s employee handbook, which provided employees a roadmap to their local NLRB regional office. In the T-Mobile case, the ALJ confirmed as legal the same type of policy—a workplace recording policy—without the NLRB boosterism.

Here’s the policy the ALJ approved in T-Mobile:

To prevent harassment, maintain individual privacy, encourage open communication, and protect confidential information employees are prohibited from recording people or confidential information using cameras, camera phones/devices, or recording devices (audio or video) in the workplace. Apart from customer calls that are recorded for quality purposes, employees may not tape or otherwise make sound recording of work-related or workplace discussions. Exceptions may be granted when participating in an authorized TMUS activity or with permission from an employee’s Manager, HR Business Partner, or the Legal Department. If an exception is granted, employees may not take a picture, audiotape, or videotape others in the workplace without the prior notification of all participants.

Apart from customer calls that are recorded for quality purposes, do not tape or otherwise make sound recordings of work-related or workplace discussions without the permission of all participants and Human Resources or the approval of the Legal Department. Failure to request and receive such permission violates Company policy and may violate the law.

Because of the risk presented by employee’s surreptitiously recording the workplace, the ALJ concluded that this policy did not impinge in employees’ section 7 rights:

The policy explicitly sets forth valid, nondiscriminatory, rationales for its existence. Concerns for safety, maintenance of a harassment free work environment, protection of trade secrets, and a workplace free from unnecessary distractions are all valid reasons for promulgating the rule. The policy expresses a rationale narrowly tailored to address these concerns; and there is no evidence of it being applied in a discriminatory manner.  It is not unreasonable for the Employer to fear that a workplace with surreptitiously recorded conversations would foster hostility, suspicions, low morale, and impede free and open discussion among members of its work force.  It would certainly hinder the open lines of communication between supervisors and employees because of fears that discussions could be secretly recorded for use against them at a later date.

Workplace Conduct

The ALJ also concluded that the following “Workplace Conduct” Policy was lawful:

Employees are expected to maintain a positive work environment by communicating in a manner that is conducive to effective working relationships with internal and external customers, clients, co-workers, and management.

Why?

Within the context of the policy, all employees would understand a prohibition against fighting to mean a physical altercation and by any standard, including the Act, fighting would be inappropriate in the workplace. I do not believe that the rule can reasonably be read as pertaining to Section 7 activity. In the words of the Board, “To ascribe such a meaning to these words is, quite simply, farfetched. Employees reasonably would believe that this rule was intended to reach serious misconduct, not conduct protected by the Act.”

Conclusion

Reading this decision in conjunction with the NLRB General Counsel’s Report confirms what I have believed for a long time—the NLRB is splitting hairs in drawing fine distinctions between employment policies that violate employees’ section 7 rights and those that don’t. Regardless of whether the Board and its judges are splitting hairs, you need to have these issues on your corporate radar. The T-Mobile issues got to the Board through efforts by the Communications Workers of America, which has been pushing for years for T-Mobile’s employees to join its union.

Don’t assume that a) your policies are good enough, or b) a labor union will not target your company. Unions are using the current pro-employee regulatory environment to ramp up their organizing efforts. If your company becomes a target, a union will use overly broad work rules as an inroad to the NLRB and to your employees. Act now to make sure your handbook and other policies pass NLRB muster, before someone (or something) else makes that decision for you.

Monday, March 23, 2015

Analysis of the NLRB’s guidance on employer rules (or, meet the new boss … same as the old boss)


It’s been nearly two years since then-acting NLRB General Counsel Lafe Solomon issued his office’s guidance on social media policies under Section 7 of the NLRA. At the time, I called the Board’s position “a bungled mess.”

Last Wednesday, current NLRB General Counsel Richard Griffin issued his 30-page missive on employer policies under Section 7 of the NLRA [pdf]. I’m sad (but not surprised) to report that not much has changed in the NLRB’s misguided approach to facially neutral employment policies. The NLRB continues to take facially neutral policies, spin a parade of non-existent anti-union horribles, and conclude that because some hypothetical employee could under the exact proper set of circumstances, that the policy could restrict an employee’s right to communicate with a labor union or complain about work, said policy violates all employees’ section 7 rights.

Notably, the Board seems to be splitting hairs between what is a lawful policy and what is an unlawful policy. Consider the following (non)distinctions the NLRB is drawing:

 

Confidentiality

Unlawful: “Never publish or disclose [the Employer’s] or another’s confidential or other proprietary information. Never publish or report on conversations that are meant to be private or internal to [the Employer].”

– vs –

Lawful: “Misuse or unauthorized disclosure of confidential information not otherwise available to persons or firms outside [Employer] is cause for disciplinary action, including termination.”

 

Conduct Towards the Company and Supervisors

Unlawful: “[B]e respectful to the company, other employees, customers, partners, and competitors.”

– vs –

Lawful: “No rudeness or unprofessional behavior toward a customer, or anyone in contact with the company,” and “Being insubordinate, threatening, intimidating, disrespectful or assaulting a manager/supervisor, coworker, customer or vendor will result in discipline.”

 

Conduct Towards Fellow Employees

Unlawful: “Do not send unwanted, offensive, or inappropriate emails.”

– vs –

Lawful: “No harassment,” and no “use of racial slurs, derogatory comments, or insults.”

 

Interaction with Third Parties

Unlawful: “Associates are not authorized to answer questions from the news media…. When approached for information, you should refer the person to [the Employer’s] Media Relations Department.”

– vs –

Lawful: “Events may occur at our stores that will draw immediate attention from the news media. It is imperative that one person speaks for the Company to deliver an appropriate message and to avoid giving misinformation in any media inquiry…. Answer all media/reporter questions like this: ‘I am not authorized to comment for [the Employer] (or I don’t have the information you want). Let me have our public affairs office contact you.’”

 

Use of Company Logos, Copyrights, and Trademarks

Unlawful: “Company logos and trademarks may not be used without written consent.”

– vs –

Lawful: “[I]t is critical that you show proper respect for the laws governing copyright, fair use of copyrighted material owned by others, trademarks and other intellectual property, including [the Employer’s] own copyrights, trademarks and brands.”

 

Restricting Photography and Recording

Unlawful: Prohibition from wearing cell phones, making personal calls or viewing or sending texts “while on duty.”

– vs –

Lawful: “No cameras are to be allowed in the store or parking lot without prior approval from the corporate office.”

 

Restricting Employees from Leaving Work

Unlawful: “Failure to report to your scheduled shift for more than three consecutive days without prior authorization or ‘walking off the job’ during a scheduled shift” is prohibited.

– vs –

Lawful: “Entering or leaving Company property without permission may result in discharge.”

 

Conflict-of-Interest

Unlawful: “Employees may not engage in any action that is not in the best interest of [the Employer].”

– vs –

Lawful: Employees must refrain “from any activity or having any financial interest that is inconsistent with the Company’s best interest” and also must refrain from ‘activities, investments or associations that compete with the Company, interferes with one’s judgment concerning the Company’s best interests, or exploits one’s position with the Company for personal gains.”

How does the NLRB spell splitting hairs? Wow, the Board’s GC is drawing some very narrow distinctions, based on little more than the use of few different words.

 

One More Thing

If you’ve seen any of the recent Marvel movies, you know to stick around though the credits, because there’s always an extra scene hinting at what will happen next in movies to come. Is General Counsel Griffin is taking his cue from Marvel? If you stick around to the end of his report, you’ll find revised policies that the NLRB approved as part of a settlement with Wendy’s. The devil, however, is in the details. Consider this policy on Phones, Cameras, and Recording Devices, given the NLRB’s seal of approval:

Due to the potential for issues such as invasion of privacy (employee and customer), sexual or other harassment (as defined by our harassment /discrimination policy), protection of proprietary recipes and preparation techniques, Crew Members may not take, distribute, or post pictures, videos, or audio recordings while on working time. Crew Members also may not take pictures or make recordings of work areas. An exception to the rule concerning pictures and recordings of work areas would be to engage in activity protected by the National Labor Relations Act including, for example, taking pictures of health, safety and/or working condition concerns or of strike, protest and work-related issues and/or other protected concerted activities.

How do you feel about policies that provide employees with a roadmap to your local NLRB regional office? Guess what? I’m not a huge fan either.

Regardless, this report confirms that employee handbooks and other workplace policies will continue to remain in the middle of the NLRB’s radar for the foreseeable future. If you haven’t recently updated your employee handbook and other policies, now would be a good time to have your friendly neighborhood employment lawyer do so.

Come back tomorrow for a real-world example of how NLRB judges are applying these rules.

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