The email curfew for wage-and-hour compliance

As a company you’re doing everything you can to attract and retain young talent, including implementing a broad BYOD policy enabling your Gen-Yers to connect their iDevices to your network. If those employees are non-exempt under the wage-and-hour laws, how do you prevent them from claiming overtime wages for the off-the-clock time they spend receiving, reading, and sending work-related emails?

Have you heard of an email curfew? Me neither, until I read this article in the Kansas City Business Journal (h/t Today’s General Counsel). Here’s the concept:

The law requires employees to be paid for work that their boss either knew or should have known they were doing. If the boss had no reason to know or suspect employees weren’t complying with the curfew, they could be protected.

In other words, you draft a policy (either stand-alone, or as part of your technology or BYOD policies) prohibiting non-exempt employees from emailing off-duty.

At least one management-side lawyer, quoted in the K.C. Business Journal article, is skeptical of using these curfews as a wage-and-hour compliance tool.

“While an email curfew is a clever idea that might in certain circumstances be justified, it typically isn’t going to be much of an answer.” That’s because in most cases it’s unenforceable or could potentially anger clients who might find other companies that are willing to respond to requests 24/7.

I’m not nearly as cynical about the effectiveness of an email curfew to stave off wage-and-hour issues for off-the-clock emailing. If you tell employees not to read, send, or otherwise work on emails off work hours, and an employee disobeys, that employee is subject to being disciplined. Yes, you still have to pay him or her for the “working” time (which would be at a time-and-a-half premium if the typical work week totals 40 hours), but punishing one employee for violating an email curfew will go a long way to deterring the many from future violations.

The more difficult issue, however, is balancing the need for instant access versus the cost of paying your employees for that responsiveness. This business decision will vary from company to company (based, in part, on a company’s culture), and will dictate how you react to this compliance idea.

photo credit: Thomas Hawk via photopin cc

EEOC tackles national-origin discrimination

Have you seen the story about the employee at an Ephrata, Washington, Burger King, fired for posting, “Now Hiring Must Be Mexican” on the store’s marquee?

This story is particularly timely, since last week, the EEOC held a public meeting addressing issues with national-origin discrimination. 

The seven speakers highlighted various issues, including the plight of immigrants, harassment, English-only policies, and the challenges facing multi-cultural workplaces. 

America’s workforce will continue to personify our melting-pot moniker. Employers need to u detests nd and pay attention to these issues of national-origin discrimination, if for no other reason than the fact that the EEOC is watching, and litigating enforcement actions when necessary. 

When the boss is accused of unlawful acts, respond appropriately #RobFord

My law school alma mater, Case Western Reserve University, is currently embroiled in a nasty lawsuit filed by a professor, who alleges that the Dean retaliated against him after he opposed the Dean’s sexually harassing behavior. This is how my school publicly responded:

To the Alumni of the School of Law:

I write today to announce the appointment of health law scholar Jessica Berg and international law expert Michael Scharf as Acting Deans of the School of Law. Longtime faculty at the school, they bring unique experience and expertise to the roles, as well as a history of effective collaboration with one another on school committees. They are widely respected among faculty, staff and students, and will do an outstanding job of building on the school’s recent academic progress….

Of course, we also face obstacles. The pending litigation and accompanying publicity has proved challenging for all of us. Even as the school focuses on its academic priorities, we continue to pursue a thorough and deliberate process regarding the claims raised. As mentioned earlier, we have engaged outside counsel, who in turn has retained an independent investigator. The investigator will review the claims raised and also assess the reviews we conducted in 2011 when concerns first came to our attention. We are committed to taking the time necessary to handle this matter in a full, fair and objective manner; it is not only the right thing to do, but also is in the best interest of the school and university in the long run.

As always, we appreciate your support and involvement with the School of Law. You will continue to receive updates from me and our Acting Deans as developments warrant.

Toronto Mayor Rob Ford is currently embroiled in a mess of his own, which includes, among other things (i.e., smoking crack), that he sexually harassed a former assistant. This is how Rob Ford publicly responded (warning, salty language ahead):

How you choose publicly to respond to allegations is open to cross-examination in later depositions and at trial. Which response would you be more comfortable defending, CWRU’s or Rob Ford? The answer is obvious, and should guide your company’s actions when a high-profile lawsuit demands a public response.

WIRTW #297 (the “Mulhall” edition)

On Wednesday, the Supreme Court heard oral argument in Unite Here Local 355 v. Mulhall. This case will decide (hopefully) whether labor unions can legally circumnavigate the secret-ballot election procedures of the National Labor Relations Act by reaching agreements with employers to recognize labor unions upon a presentation of recognition cards signed by a majority of employees.

My favorite exchange from the oral argument illustrates my concern over the coercive nature of card-check recognition:

CHIEF JUSTICE ROBERTS: Well, will you … concede that [card check agreements are] more coercive than a secret ballot? … The union organizer comes up to you and says, well, here’s a card. You can check I want to join the union, or two, I don’t want a union. Which will it be? And there’s a bunch of your fellow workers gathered around as you fill out the card.

…

JUSTICE SCALIA: And he’s a big guy.

(Laughter.)

Here’s what some of my fellow bloggers had to say in the wake of the Mulhall oral argument:

• Mulhall Oral Argument — from Workplace Prof Blog
• SCOTUS hears “the most significant labor case in a generation.” — from Phil Miles’ Lawffice Space
• CATO’s Trevor Burrus on the “Niggling Problem” in Mulhall — from On Labor
• Supreme Court Hears Argument on Legality of Neutrality Agreements — from Labor Relations Today

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

Discrimination

• My favorite legal theory, the “honest belief” rule — from Warren & Associates Blog
• Employment Law Made Unscary: Gina — from Manpower Employment Blawg
• Between two laws: When ADA and FMLA overlap — from HR idiot
• Employment Law Statistics Tell Part of a Story; Still Waiting for CHRO — from Dan Schwartz’s Connecticut Employment Law Blog
• Is it Only a Matter of Time Before LGBT Individuals Have Federal Employment Protection?? — from The Blue Ink
• ENDA (Banning Sexual Orientation Discrimination) Passes In Senate What It Will Mean If It Becomes Law — from Donna Ballman’s Screw You Guys, I’m Going Home
• Employer’s Injured-player Analogy Backfires in ADA Suit — from Smart HR Manager
• What should we do? Employee says he’s allergic to co-worker’s service dog — from Business Management Daily

Social Media & Workplace Technology

• Your Phone Number Is Going To Get A Reputation Score — from The Not-So Private Parts
• Former Employee Defames Employer with Website — from San Antonio Employment Law Blog
• How to Balance Your Personal and Professional Lives on Social Media — from Social Media Strategies Summit Blog
• Seventh Circuit Weighs In on Firing for Facebook Posts — from Corporate Counsel
• Another Facebook Firing Is Upheld — from Molly DiBianca’s Delaware Employment Law Blog
• Social media: Are courts being more understanding? — from HR Morning

HR & Employee Relations

• Four Ways Bosses Cause Stress in the Workplace — from Mike Haberman’s Omega HR Solutions
• Is it a smart move for a company to make work-life balance policies? — from ABA Journal Daily News
• Disney on the Defensive for Background Screening Policies — from employeescreenIQ Blog
• “Drug-Free Workplace Policy Builder” from the Department of Labor — from Eric Meyer’s The Employer Handbook Blog
• Non-Solicitation Means Don’t — from Work Place Coach Blog News
• Microsoft axes its controversial employee-ranking system — from The Verge
• What I Don’t Know About Your Non-Compete Can’t Hurt Me, Right? — from Suits by Suits
• Curse Words & Racial Slurs — from CostofWork
• Nine preliminary lessons from the Miami Dolphins workplace bullying story — from Minding the Workplace

Does social media change the meaning of “solicitation?” (redux)

Earlier this year, I asked the following question: “Does social media change the meaning of solicitation?” I concluded that absent a contract directly defining social media connections as a “solicitation,” “passive” social media activities, such as “continuing an already existing online relationship via social media” will not violate a non-solicitation agreement.

In my earlier post, I was discussing whether maintaining already existing Facebook friends violated a non-solicitation agreement. Yesterday, the National Law Journal brought us the next evolution of this issue: whether a LinkedIn profile update alerting connections about a new job constitutes a “solicitation of business” in violation of a non-compete agreement. According to the order issued by a Massachusetts trial court judge in KNF&T Inc. v. Muller [pdf], the answer is no.  

In that case, Charlotte Muller’s former employer claims that she violated the no-solicitation covenants in her non-competition agreement by posting her new position on her LinkedIn profile, which, in turn, notified her hundreds of contacts of her job change. Her old company claimed, “To the extent this notification has been sent to current KNF&T clients, this notification constitutes a solicitation of business in direct violation of her non-competition agreement.”

The trial judge addressed the LinkedIn issue in a footnote in his order denying the company’s request for a preliminary injunction:

The same reasoning applies to the evidence that Muller currently has a Linkedln profile disclosing her current employer, title, and contact information, and counting among her “Skills & Expertise” such things as “Internet Recruiting,” “Temporary Staffing,” “Staffing Services,” and “Recruiting.” There is no more specific mention of any of KNF&T’s “Fields of Placement” than this. So long as Muller has not and does not, prior to April 12, 2014, solicit or accept business in the Fields of Placement for herself or others (including her new employer), she will not have violated the covenant not to compete.

In other words, the company’s own agreement doomed its argument that the LinkedIn update constituted a breach.

How do you protect your company if you want to include social media announcements of a new job as violations of a non-solicitation agreement? Draft the agreement accordingly:

“Solicitation” includes, but is not limited to, offering to make, accepting an offer to make, or continuing an already existing online relationship via a Social Media Site, or updating an account or profile on a Social Media site to communicate to, publicize to, or otherwise advise online connections or relationships about a new position of employment with an employer other than the Employer to this Agreement. “Social Media Site” means all means of communicating or posting information or content of any sort on the Internet, including to your own or someone else’s web log or blog, journal or diary, personal web site, social networking or affinity web site, web bulletin board or a chat room, in addition to any other form of electronic communication.

We’ve yet to see a case in which a judge has been asked to uphold such an agreement. It should go without saying, though, that you have a much better chance of enforcement with the language than without. More importantly, however, this case illustrates that social media is not creating new laws, but is merely creating new applications of existing laws to an evolving communication and technology tool.

The fluctuating rules for the fluctuating workweek

After yesterday’s jaunt through Bikini Bottom, I’m swinging the blogging pendulum back to more academic pursuits. Today’s lesson: the Fair Labor Standards Act’s fluctuating workweek.

Merely paying an employee a salary does not render an employee exempt from the FLSA’s overtime requirements. Indeed. There is a whole class of non-exempt salaried employees. These employees, even though salaried, earn overtime for any hours worked in excess of 40 in a week.

How is that overtime calculated? As an employer, you have two options:

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 his 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. 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” that the employer will pay that fixed salary regardless of the number of hours worked.

For a salaried non-exempt employees, the first three elements are usually easy to meet. It’s number four—the clear mutual understanding—that tends to trip up employers. Consider, for example, Black v. SettlePOU, recently decided by the 5th Circuit Court of Appeals. In that case, the court relied both on the company’s employee handbook’s definition of “workweek” as a predefined number of fixed hours, coupled with the company’s refusal to pay any overtime no matter how many hours the plaintiff worked in a week, to conclude that the employer and employee lacked the requisite “clear mutual understanding.” Thus, the court required that the employer to pay back pay for unpaid overtime based on the standard overtime calculation, not the fluctuating workweek calculation.

Employers, there is a clear advantage to paying your salaried non-exempt employees via the fluctuating workweek. You’ll realize a 66 percent savings on your overtime pay. Just make sure you meet the FLSA’s four-pronged test, and, most importantly, that you and your salaried non-exempt employees share a “clear mutual understanding” (best in a written document) that you will pay them a fixed salary no matter the number of hours worked. Otherwise, your efforts to save some dollars in overtime could result in a more costly wage-and-hour lawsuit.

SpongeBob SquarePants, employment law professor

On a cold, snowy night in the suburbs of Cleveland, what is there to do besides snuggle on the couch with your 5-year-old son to watch the world premier of SpongeBob, You’re Fired? That’s exactly what Donovan and I did last night.

Who knew that such high art would provide the inspiration for today’s post?

The story begins with Mr. Krabs firing SpongeBob from his fry-cook job at The Krusty Krab to save a whole five cents by not paying his wage. Minimum wage be damned, SpongeBob offers to work for free to keep his job. Amazingly, the historically cheap Krabs turns him down, telling SpongeBob that he already looked into it, and it’s illegal to let employees work for free.

Bravo to Eugene Krabs for bringing the plight of the unpaid intern to the forefront of pop culture. Unless you meet the very limited test for an unpaid intern, if you have employees, you must pay them. Employees are not allowed to volunteer their time or work for free.