New DOL Rules Regarding Tips and Joint Employment Face Uncertainty In Courts

By Robert G. Chadwick, Jr., Seltzer, Chadwick, Soefje & Ladik, PLLC.

The Fair Labor Standards Act (“FLSA”), which governs minimum wage, overtime pay, equal pay and child labor, expressly authorizes the Secretary of Labor to promulgate rules interpreting the Act. Historically, such rules have received deference in court if the statutory language is ambiguous and the interpretation is reasonable.

In 2016, however, the U.S. Supreme Court determined in Encino Motorcars, LLC v. Navarro that a rule recently promulgated by the U.S. Department of Labor (“DOL”) was not entitled to deference. At issue was a 2011 rule interpreting an FLSA exemption from the overtime  pay requirement for “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership. In justifying its decision, the Court explained the DOL had not given adequate reasons for the new rule which was a substantial departure from an earlier rule.

Tips

On October 8, 2019, the DOL published a Notice of Proposed Rulemaking. regarding the FLSA’s tip credit. 29 U.S.C. 203(m). Under the proposed rule, the 20% limitation on non-tip producing work, which has historically been followed by the agency in determining the availability of the tip credit, will be replaced by a task-based limitation. The proposed rule follows a 2018 opinion letter from the Wage & Hour Administrator offering a similar interpretation.

So, will this new rule, if implemented, be afforded deference by the courts or suffer the same fate as the 2011 rule at issue in Navarro? Recent court cases indicate a brewing battle regarding this question.

Several courts have already rejected the interpretation offered by the 2018 opinion letter, instead opting to enforce the 20% limitation. See Cope v. Let’s Eat Out, Inc.354 F.Supp.3d 976 (W.D.Mo. 2019); Esry v. P.F. Chang’s China Bistro, 373 F.Supp.3d 1205 (E.D.Ark. 2019); Spencer v. Macado’s, Inc., 399 F.Supp.3d 545 (W.D.Va. 2019); Belt v. P.F. Chang’s China Bistro, Inc., 401 F.Supp.3d 512 (E.D.Pa. 2019); Flores v. HMS Host Corp., 2019 WL 5454647 (D.Md. Oct. 23, 2019); Berger v. Perry’s Steakhouse of Illinois, LLC, 2019 WL 7049925 (N.D.Ill. Dec. 23, 2019).

Other courts have already accepted the interpretation offered by the 2018 opinion letter. See Matusky v. Avalon Holdings Corp., 379 F.Supp.3d 657 (N.D.Ohio March 29, 2019); Shaffer v. Perry’s Restaurants, Ltd., 2019 WL 2117639 (W.D.Tex. April 3, 2019).

To be sure, an opinion letter is entitled to less deference than a DOL rule.  Still, the proposed rule is a substantial departure from the 20% limitation historically used by the DOL and courts. Employers should thus expect the cases above to be a precursor of the challenges to the proposed rule, if implemented.

Joint Employment

On January 16, 2020, the DOL published a new rule purporting to update and revise the agency’s interpretation of joint employer status under the FLSA; the rule is scheduled to be effective March 16, 2020. In the rule, the DOL provides a four-factor balancing test for determining FLSA joint employer status.

Many courts, however, have already developed their own tests in determining joint employer status under the FLSA. Indeed, there is a notable split amongst circuit courts after the Fourth Circuit in Hall v. DirecTV, LLC, 846 F.3d 757 (4th Cir. 2017) set a low bar for establishing joint employment.

Many courts, therefore, will be faced with the choice of following their own precedent regarding joint employment or deferring to the new DOL rule.  Only time will tell which choice courts will make.

Takeaway For Employers

DOL rules often provide reliable guidance to employers for compliance with the FLSA. As to the issues of tip credits and joint employment, however, it is advised employers consult legal counsel rather than the DOL rules. As to these two issues, following DOL rules may actually be a risky option.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment law issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

TexasBarToday_TopTen_Badge_VectorGraphic

The Thinning Tightrope For Harassment Investigations

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

As many employers already know, sexual harassment claims are often disputed. A female victim alleges improper behavior by a male supervisor or co-worker. The accused male denies the allegations and suggests a possible ulterior motive for a false harassment claim.

If the employer is even slightly biased toward the accused as to a sexual harassment claim, the risk is a costly legal claim by the accuser. This risk remains even if the claim is of questionable credibility. In the wake of the #metoo movement, siding with the accused also risks a social media firestorm and poor female employee morale, especially if the employer has historically decided for accused harassers in sexual harassment investigations.

If the employer is even slightly biased toward the accuser as to a sexual harassment claim, the risk again is a costly legal claim by the accused. Again, this risk remains even if the accused harasser’s story is of questionable credibility.  In the wake of last year’s Kavanaugh hearings, siding with the accusers risks a social media backlash and poor male employee morale, especially if the employer has historically decided for accusers in sexual harassment investigations.

It is not an overstatement, therefore, to describe the challenge faced by an employer presented with a disputed sexual harassment claim as a legal tightrope.  Only by conducting a thorough and unbiased investigation can the employer successfully navigate the tightrope.

As indicated by lawsuits stemming from sexual harassment claims, however, some employers have decided they have more to fear from accusers than accused harassers. Rather than conducting thorough and unbiased investigations, these employers instead made rushes to judgment against accused harassers. From these lawsuits has developed a body of law outlining the frameworks by which accused harassers can sue under federal, state and municipal laws prohibiting sex discrimination in employment.

Menaker v. Hofstra University, 935 F.3d 20 (2nd Cir. 2019)

In this suit filed on March 6, 2017, a male coach who had been hired by Hofstra University as its Director of Tennis and Head Coach of the men’s and women’s varsity tennis teams alleged he was terminated in response to allegedly malicious allegations of sexual harassment by a female student who was a member of the tennis team. The male coach alleged sex discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”), the New York State Human Rights Law and the New York City Human Rights Law.

The U.S. District Court for the Eastern District of New York granted Hofstra’s motion to dismiss for failure to state a claim. On August 15, 2019, the Second Circuit reversed.

According to the Second Circuit, it is sufficient for an accused harasser to state  a prima facie case of sex discrimination, if he can show (1) an adverse employment action against the employee, (2) in response to allegations of sexual misconduct, (3) following a clearly irregular investigative or adjudicative process, (4) amid criticism for reacting inadequately to allegations of sexual misconduct by one sex.

The Second Circuit declined to define precisely what sort of irregularities would support a prima facie case of sex discrimination, but did cite two examples of irregularities which would be sufficient. For instance, “[w]hen the evidence substantially favors one party’s version of a disputed matter, but an evaluator forms a conclusion in favor of the other side (without an apparent reason based in the evidence), it is plausible to infer (although by no means necessarily correct) that the evaluator has been influenced by bias.” Similarly, where decision-makers choose “to accept an unsupported accusatory version over [that of the accused], and declined even to explore the testimony of [the accused’s] witnesses,” this too “gives plausible support to the proposition that they were motivated by bias.”

Sassaman v. Gamache, 566 F.3d 307 (2nd Cir. 2009)

A male former employee sued his former employer for sex discrimination after being forced to resign in response to a sexual harassment complaint. According to the plaintiff, he was told by his supervisor:

“I really don’t have any choice. [She] knows a lot of attorneys; I’m afraid she’ll sue me. And besides you probably did what she said you did because you’re male and nobody would believe you anyway.”

The U.S. District Court for the Southern District of New York granted the employer’s motion for summary judgment.  On May 22, 2009, the Second Circuit reversed.

According to the Second Circuit, genuine issues of material existed as to whether the male former employee was a victim of “an invidious sex stereotype”:

“We appreciate that employers who fail to address claims of sexual harassment expose themselves to civil liability. However, fear of a lawsuit does not justify an employer’s reliance on sex stereotypes to resolve allegations of sexual harassment, discriminating against the accused in the process. To be sure, Title VII requires employers to take claims of sexual harassment seriously [citation omitted]. It also requires that, in the course of investigating such claims, employers do not presume male employees to be ‘guilty until proven innocent’ based upon invidious sex stereotypes.”

The Second Circuit elaborated:

“… when an employer considers how to respond to an employee’s allegation of discrimination, it may take into account the risk that the complaining employee might file an action against the employer. Indeed, it is in part the threat of such action that helps ensure the rights Title VII was enacted to protect. That said, an employer may not rely on a fear of a lawsuit as a reason to shortcut its investigation of harassment and to justify an employment decision adverse to the putative harasser that in itself violates Title VII. Indeed, just as the lack of an investigation of a reported claim of harassment may factor into the determination of an employer’s liability for discrimination against the complainant, so too may it indicate discrimination by an employer whose adverse determination against the putative harasser otherwise bears indicia of prohibited discrimination.”

Kelman v. Woolrich, Inc., 2002 WL 356389 (D.Md. March 5, 2002)

In response to an allegation of sexual harassment by a female employee, a male employee was terminated by Woolrich, Inc.  In his exit interview, the male employee was allegedly told: “It doesn’t matter. You’re a man, she’s a woman. She’s right, you’re wrong.” The male former employee sued for sex discrimination under Title VII in the U.S. District Court for the District of Maryland.

In denying Woolrich’s motion for summary judgment, the court said:

“The court concludes that a jury could infer that the comment “You’re a man, she’s a woman. She’s right, you’re wrong” reflects a stereotype that when men are accused of sexual harassment, the charges more likely than not (if not always) are true. Further, a jury could infer from the fact that [the manager] made the comment in the same conversation in which he informed plaintiff he was terminating him because of accusations of sexual harassment by a woman (who said she was going to sue Woolrich unless plaintiff was fired), that the decision was based on a discriminatory motive.”

Final Thoughts

By showing biases in favor of the accusers in the aforementioned cases, the employers did more than risk the lawsuits ultimately filed against them; they allowed federal courts to develop precedent for future lawsuits filed by alleged harassers.  In 2019, federal courts have now moved beyond stereotypical comments as a basis for finding sex discrimination. It is now possible for an alleged harasser to proceed with a sex discrimination based upon more circumstantial evidence.

In other words, even a slight bias toward the accuser is now riskier than ever. The thinning legal tight rope of sexual harassment investigations brought about by employers taking shortcuts is to blame.

TexasBarToday_TopTen_Badge_VectorGraphic

 

What Does The Future Hold For Severe Obesity Claims Under The ADA?

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

The Fall Edition of Professional Liability Defense Quarterly, published by the Professional Liability Defense Federation, features an article by Robert G. Chadwick, Jr. entitled “What Does The Future Hold For Severe Obesity Claims Under The ADA?

READ ARTICLE

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment law issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

Combating Sexual Harassment By Narcissists

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Much has been written recently about the rise of individualism in America. Some psychologists have even posited that the most severe form of individualism, narcissism, has become an epidemic in this country. See The Narcissism Epidemic: Living in the Age of Entitlement, by Jean M. Twenge, Ph.D., and W. Keith Campbell, Ph.D. (2010).

The term “narcissism” has both clinical and subclinical meanings. The clinical meaning is set forth in the DSM-IV-TR, which defines Narcissistic Personality Disorder (NPD) as “an all-pervasive pattern of grandiosity (in fantasy or behavior), need for admiration or adulation and lack of empathy ….” Drs. Twenge and Campbell estimated 1 in 16 of the general population have experienced NPD.

The broader subclinical meaning of narcissism is self absorption to the point of having little or no empathy for others. Some studies estimate that around 17% of the general population have experienced subclinical narcissism. Some industries, such as the financial sector, may have an even higher percentage.

One consequence of narcissism is intolerance for information which challenges a person’s belief system. In a May 31, 2017 article, Tom Nichols, a Professor at the U.S. War College and the Harvard Extension School, opined that this disregard isn’t just human nature, but a product of growing narcissism: “Surrounded by affluence, enabled by the internet, and empowered by an educational system that prizes self-esteem over achievement, Americans have become more opinionated even as they have become less informed, and are now utterly intolerant of ever being told they’re wrong about almost everything.”

Another consequence of narcissism is disregard for other people’s sensitivities. Indeed, exploitation of others is classic narcissistic behavior.

Predictably, these consequences of narcissism present formidable obstacles in traditional sexual harassment training. Such training normally aspires to achieve four goals – (1) increased awareness of types of gender discrimination, (2) increased awareness of the laws against discrimination and harassment, (3) review of the employer’s sexual harassment policy (including how to file complaints), and (4) alteration of employee attitudes about what type of behaviors in the workplace are wrong.  These are the four goals achieved by an online sexual harassment training video developed by New York City in 2018 for private employers.

For the narcissist, the reaction to such traditional training can be apathy, boredom, amusement or even ridicule. Worse, the training may lead him or her to believe sexual harassment is not a big deal.

Indeed, one study found that men who score high on a likelihood to sexually harass showed greater acceptance of sexual harassment after training than before training. See Lori A. Robb & Dennis Doverspike, Self-Reported Proclivity to Harass as a Moderator of the Effectiveness of Sexual Harassment-Prevention Training, 88 Psychol. Rep. 85 (2001). Another study indicated that men who completed harassment training were more likely to believe that both parties contribute to inappropriate sexual behavior. See Shereen G. Bingham & Lisa L. Scherer, The Unexpected Effects of a Sexual Harassment Educational ProgramThe Unexpected Effects of a Sexual Harassment Educational Program, 37 J. Applied Behav. Sci. 125 (2001). Still another study showed that personal attitudes of participants toward sexual harassment were minimally changed or completely unchanged after training. See Vicki J. Magley et al., Outcomes of Self-Labeling Sexual Harassment, 84 J. Applied Psychology, 390 (1999).

So, how can an employer overcome these shortcomings of traditional harassment training for employees inclined to narcissism?

The short answer may be as simple as a reminder of the personal stake of all employees in maintaining a work environment free of sexual harassment. This personal stake can include continued employment with the employer and personal liability under certain state laws. For the self-absorbed personality, self preservation may be the only interest which motivates compliance with an employer’s sexual harassment policy.

In fact, Jonathan Segal is quoted in the June 2016 Report of the EEOC Select Task Force on the Study of Harassment in the Workplace as advocating such an approach to all sexual harassment training. In describing this approach, he said: “[Compliance training] is not training to change your mind. It is training to keep your job.”

Of course, an employer must follow through on any warning that compliance with sexual harassment policies is essential to continued employment. In the training itself, it is helpful to cite examples of other (unnamed) employees being disciplined, terminated or sued for harassment. If the training is exposed to be a bluff, the reaction of a narcissist may be more dire than if the training never occurred.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Why Your Workforce Should Not Be Debating Trump’s Tweets

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

In a tweet on July 27, 2019, President Trump described Representative Elijah Cumming’s Congressional District in Baltimore as “a disgusting, rat and rodent infested mess.”

On July 14, 2019, President Trump also tweeted: “So interesting to see ‘Progressive’ Democrat Congresswomen, who originally came from countries whose governments are a complete and total catastrophe, the worst, most corrupt and inept anywhere in the world (if they even have a functioning government at all), now loudly… and viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government is to be run. Why don’t they go back and help fix the totally broken and crime infested places from which they came.”

Not surprisingly, these tweets are a hot topic of debate across America. On one side of the debate are those who describe President Trump’s tweets as racist. On the other side of the debate are those who describe the accusations of racism as hypocritical, partisan or unfounded.

So, why should such debates be avoided in the workplace? The answer is two-fold:

First, the debates themselves may be cited as part of a charge or lawsuit alleging race discrimination or harassment under Title VII of the Civil Rights of 1964 (“Title VII”), the Civil Rights Act of 1866 or state or local law.

To illustrate this point, consider the debate which continues today regarding the 1995 murder trial of O.J. Simpson. Workplace remarks stemming from such debate are still cited as evidence in cases alleging race discrimination or harassment in employment. In Chattman v. Toho Tanex America, Inc., 686 F.3d 339 (6th Cir. 2012), for example, the claim that a human resources manager was racially biased included a joke as to O.J. Simpson’s innocence. A racially-charged disagreement as to the O.J. Simpson verdict was also at the heart of a race discrimination claim in Campbell v. Hamilton County, 2001 WL 1322785 (6th Cir. Oct. 17, 2001).

Other racially-charged debates have been referenced in race discrimination cases. In David v. Trugreen Partnership, Ltd., 1999 WL 288686 (N.D. Tex. May 5, 1999), it was a debate regarding the trial of police officers who had allegedly beaten Rodney King. In Neal v. Whole Foods Market Company, Inc., 2018 WL 2219362 (E.D.La. May 15, 2018), it was a discussion regarding Bill Cosby’s alleged sexual misconduct.

Second, the very nature of the debate surrounding President Trump’s tweets forecloses any argument the debate is benign as a matter of law.

Take for example the evidence at issue in EEOC v. WC&M Enterprises, Inc., 496 F.3d 393 (5th Cir. 2007).  In this case, the plaintiff was an Indian and practicing Muslim who alleged a hostile environment at work. The U.S. District Court for the Southern District of Texas granted summary judgment in favor of the employer, but the Fifth Circuit reversed. As grounds for reversal, the Fifth Circuit said sufficient evidence existed to support the claim that the plaintiff was discriminated against on the basis of national origin and religion. This evidence included the taunt: “Why don’t you just go back where you came from if that is what you believe?”

In Siam v. Porter, 2006 WL 1530155 (N.D.Cal. June 5, 2006), a Title VII case alleging race and national origin discrimination, a federal court cited evidence that a decision-maker harbored prejudices against Asians generally, and Filipinos in particular. Such evidence included a complaint by the decision-maker that an Asian family had moved in next door and caused a cockroach infestation.

To be sure, not all remarks made during a racially-charged debate will support a claim of race bias. As many employers already know, however, even frivolous lawsuits cost money to defend.

Especially as to a newsworthy racially-charged debate, such as President Trump’s tweets, the urge to take a side can be overwhelming. Where the debate spills into the workplace, however, the risk to an employer is a costly claim or litigation. Employer inaction or acquiescence only increases this risk.

Prudent risk management thus dictates that an employer include debates rooted in race amongst prohibited activities in the workplace. Better yet, such a prohibition should be part of the employer’s discrimination and harassment training program.

[This post is an update from a May 2018 post entitled “Why Your Workforce Should Not Be Debating Roseanne’s Demise!]

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

What Dallas Employers Need To Know About New Paid Sick Time Ordinance

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

[Update: On July 30, 2019 a lawsuit was filed in the U.S. District Court for the Eastern District of Texas to stop the Dallas ordinance from taking effect].

Earlier this year, Dallas became the third Texas municipality (after Austin and San Antonio) to enact a paid sick time ordinance applicable to private employers. Unlike the ordinances in Austin and San Antonio, this ordinance is now effective as of August 1, 2019. There is no corresponding Texas state law which mandates paid sick time in the private sector.

In July, the City of Dallas published rules for the administration of the ordinance.

What Employers Are Covered By The Ordinance?

The ordinance applies to any “person, company, corporation, firm, partnership, labor organization, non-profit organization or association that pays an employee to perform work for an employer and exercises control over the employee’s wages, hours and working conditions.”  The ordinance does not limit its coverage to employers with a minimum number of employees.

The ordinance does not apply to (1) the United States, (2) a corporation wholly owned by the United States, (2) the state or a state agency, (3) the City of Dallas, or (4) any other agency that cannot be regulated by city ordinance.

What Employees Are Covered By The Ordinance?

The ordinance covers any “individual who performs at least 80 hours of work for pay within the City of Dallas, Texas in a year for an employer, including work performed through the services of a temporary or employment agency.” The ordinance does not apply to independent contractors or unpaid interns.

How Much Earned Paid Sick Time Is Mandated By The Ordinance?

An employer must grant one hour of earned paid sick time for every 30 hours worked for the employer within the geographic boundaries of the City of Dallas. Earned paid sick time is accrued starting at the later of the employee’s start date or the effective date of the ordinance. Earned paid sick time accrues only in hourly increments, unless the employer has written policies establishing the accrual of earned paid sick time in fraction of an hour increments.

An employee who is rehired by an employer within six (6) months following separation from employment may use any earned paid sick time available to the employee  at the time of the separation.

An employee does not lose earned paid sick time upon transfer to a work site outside the geographic boundaries of the City of Dallas.

Are There Any Caps To Earned Paid Sick Time Mandated By The Ordinance?

An employee of an employer with 15 or fewer employees, excluding family members, can only accrue up to 48 hours of earned paid sick time in a year, unless the employer chooses a higher limit. An employee of a larger employer can only accrue up to 64 hours of earned paid sick time in a year, unless the employer chooses a higher limit. All available earned paid sick time up to the applicable limit shall be carried over to the following year.

An employer is not required to allow use of earned paid sick time by an employee for more than eight (8) days in a year.

For What Absences Can Earned Paid Sick Time Be Used By An Employee?

An employee is entitled to available earned paid sick time if the employee makes a timely request for the use of earned paid sick time before the employee’s scheduled work time. There is an exception for unforeseen circumstances.

Available earned paid sick time can be requested by an employee for an absence caused by:

  1. the “employee’s physical or mental illness, physical injury, preventative medical or heath care or health condition”;
  2. the “employee’s need to care for their family member’s physical or mental illness, physical injury, preventative medical or health care or health condition”; or
  3. the “employee’s or their family member’s need to seek medical attention, seek relocation, obtain services of a victim services organization, or participate in legal or court ordered action related to an incident of victimization from domestic abuse, sexual assault, or stalking involving the employee’s family member.”

The term “family member” is defined as an employee’s “spouse, child, parent, any other individual related by blood, or any other individual whose close association with an employee is the equivalent of a family relationship.”  Family members include “step parents, step-sibling, step-children, step-grandparents, step-grandchildren, anyone who can be claimed as a dependent, and anyone who can claim someone as a dependent.”

Can An Employer Require Verification Before Paying For Sick Time?

An employer may adopt reasonable verification procedures to establish that an employee’s request for earned paid sick time for more than three (3) consecutive work days is a qualifying absence. An employer may not adopt verification procedures that would require an employee to explain the nature of domestic abuse, sexual assault, stalking, illness, injury, health condition, or other health need when making a request for earned paid sick time.

How Is Earned Paid Sick Time Calculated?

The employer shall pay earned paid sick time in an amount equal to what the employee would have earned if the employee had worked the scheduled work time, exclusive of overtime premium, tips or commissions, but no less than the state minimum wage.

Rules published by the City of Dallas address the calculation of paid sick time for piece rate employees, salaried employees, employees whose hourly rate of pay fluctuates and employees who are scheduled to work shifts of indeterminate length.

What Does The Ordinance Proscribe?

An employer may not:

  1.  require “an employee to find a replacement to cover the hours of earned paid sick time as a condition of using earned paid sick time”;
  2.  erase earned paid sick time upon “an employee’s transfer to a different facility, location, division, or job position with the same employer”; or
  3.  “transfer, demote, discharge, suspend, reduce hours, or directly threaten such actions against an employee because that employee requests or uses earned sick time, reports or attempts to report a violation of [the ordinance], participates or attempts to participate in an investigation or proceeding under [the ordinance]; or otherwise exercises any rights afforded by [the ordinance].

Unlawful retaliation may include the following: “considering use of paid sick time in performance reviews or setting wages … reporting or threatening to report an employee or employee’s family member to law enforcement in connection with the use of paid sick time, or discouraging … employees from using their accrued paid sick leave.”

What Employment Policies Are Unaffected By The Ordinance?

The ordinance does not affect employer policies which allow an employee to donate available earned paid sick time to another employee.

The ordinance does not prohibit an employer from allowing an employee to voluntarily exchange hours or voluntarily trade shifts with another employee or prohibit an employer from establishing incentives for employees to voluntarily exchange hours or voluntarily trade shifts.

What Records Are Mandated Of Employers By The Ordinance?

On at least a monthly basis, an employer must provide electronically or in writing to each employee a statement showing the amount of the employee’s available earned paid sick time.

An employer that provides an employee handbook to its employees must include therein a notice of employee rights and remedies under the ordinance.

Each employer must display a poster in a conspicuous place or places where employee notices are customarily posted. The prescribed poster can be found here.

An employer which, as a matter of company policy, uses a 12-consecutive-month period other than a calendar year for purposes of determining an employee’s eligibility for and accrual of earned paid sick time must provide its employees with written notice of such policy.

Does The Ordinance Provide Employees With A Private Of Action?

No. For violations, the ordinance only provides for a civil penalty assessed by the City.

How Is The Ordinance Enforced?

The ordinance is enforced by the director of the department designated by the city manager for its implementation, administration and enforcement. A complaint alleging a violation must be filed with the director by or on behalf of an aggrieved employee with two years from the date of the violation.

What Is The Civil Penalty For Violation Of The Ordinance?

No civil penalty for a substantive violation may be assessed prior to April 1, 2020. Thereafter, an employer which fails to cease a violation by the end of the 10th business day after the employer receives notice of the violation by the director is liable to the City for a civil penalty of up to $500 for that violation.

Civil penalties of $500 per violation for retaliation, however, can be assessed on and after the applicable effective date.

Are Any Affirmative Defenses Available To Employers Under The Ordinance?

The ordinance does not expressly provide any affirmative defense for a failure to pay an employee earned paid sick time. Presumably, the City will consider any lawful reason for an adverse employment action taken against an employee who has (1) requested or used earned paid sick time, (2) reported a violation of the ordinance, or (3) participated in an administrative proceeding under the ordinance.

What Is The Effective Date Of The Ordinance?

The ordinance is effective August 1, 2019.  For employers with five (5) or less employees, however, the ordinance is not effective until August 1, 2021.

When Is The Time for Dallas Employers To Implement Earned Paid Sick Leave Policies?

For Dallas employers with more than five (5) employees, the time is now.  There is presently no legislation being considered in Austin, nor litigation pending in Dallas, which will forestall the ordinance from taking effect on August 1, 2019.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

Supreme Court To Decide Whether Title VII Bars LGBT Discrimination

The Summer 2019 Edition of Professional Liability Defense Quarterly, published by the Professional Liability Defense Federation, features an article by Robert G. Chadwick, Jr. entitled “Supreme Court to Decide Whether Title VII Bars LGBT Discrimination.”

Read Article

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor and employment law issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com.

 

Texas’ New Employment Laws

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

The Texas 86th Legislature recently concluded with the passage of several new employment laws affecting private employers.

Disclosure of Information Regarding Sexual Misconduct

Effective June 10, 2019, a new law provides limited immunity from civil liability for disclosing certain information to designated persons regarding sexual misconduct by an employee, volunteer, or independent contractor of a charitable organization.

Disclosures protected by the new law are those made in good faith as to information reasonably believed to be true. A person is not immune from civil or criminal liability for acting in bad faith or with a malicious purpose.

The only persons to whom protected information may be disclosed under the new law are current or prospective employers of the charitable organization’s employee, volunteer or independent contractor.

The disclosures which may be made under the new law include allegations of (1) sexual misconduct, (2) sexual abuse, (3) sexual harassment, or (4) a sexual offense under the Texas Penal Code. Child abuse may be disclosed only if previously reported to an appropriate agency under Section 261.103 of the Texas Family Code. An individual is not immune from civil or criminal liability for reporting the individual’s own sexual misconduct.

Civil immunity under the new law extends to charitable organizations, and employees, volunteers and independent contractors of charitable organizations.

Jury and Grand Jury Service

Currently, Section 122.001 of the Texas Civil Practice & Remedies Code provides only that “[a] private employer may not terminate the employment of a permanent employee because the employee serves as a juror.”

A new law, which becomes effective on September 1, 2019, amends Section 122.001 to state that “an employer may not discharge, threaten to discharge, intimidate, or coerce any permanent employee because the employee serves as a juror, or for the employee’s attendance or scheduled attendance in connection with the service, in any court in the United States.”

Another new law, which becomes effective on September 1, 2019, amends Section 122.001 to include “grand jury” service.

Report of Child Abuse or Neglect

Currently, Section 261.110 of the Texas Family Code states that an employer may not suspend or terminate the employment of, or otherwise discriminate against, a person who is a professional and who in good faith … reports child abuse or neglect.”

A new law, which becomes effective on September 1, 2019, extends the prohibition of Section 261.110 to any adverse employment action. “Adverse employment action” is defined as “an employee’s compensation, promotion, transfer, work assignment, or performance evaluation, or any other employment action that would dissuade a reasonable employee from making or supporting a report of abuse or neglect…”

The new law also now enables a claimant to sue for injunctive relief.

Age Discrimination in Training

Currently, Section 21.054(b) of the Texas Labor Code limits the prohibition against age discrimination in certain employment training programs to “an individual who is at least 40 years of age but younger than 56 years of age.”

A new law, which becomes effective on September 1, 2019, repeals the age cap.

Minimum Wage for Disabled Workers

Section 14(c) of the Fair Labor Standards Act authorizes employers, after receiving a certificate from the Wage & Hour Division of the U.S. Department of Labor, to pay sub-minimum wages to disabled workers.

A new Texas law, which becomes effective on September 1, 2019, sets forth a mechanism for increasing the wages paid by community rehabilitation programs to the federal minimum wage not later than September 1, 2022.

Competition & Trade Secrets

An amendment to the Texas Citizens Participation Act clarifies that, effective September 1, 2019, the Act is not applicable to a legal action arising from an officer-director, employer-employee, or independent contractor relationship that (1) seeks recovery for misappropriation of trade secrets or corporate opportunities, or (2) seeks to enforce a non-disparagement agreement or a covenant not to compete.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

Disgruntled Employees & Gun Violence: The Disturbing New Reality

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

In the aftermath of the mass shooting at a municipal building in Virginia Beach on Friday, May 31st which left twelve dead and others wounded, two familiar words were used to describe the gunman – “disgruntled employee.”

In the past two years, workplaces in Virginia Beach (May 31, 2019), Aurora, Illinois (Feb. , 2019), Harford County, Maryland (Sept. 20, 2018), Edgewood, Maryland (Oct. 18, 2017), San Francisco, California (June 14, 2017), and Orlando, Florida (June 5, 2017) have been victims of mass shootings by gunmen described as “disgruntled” current or former employees. Workplace shootings by “disgruntled” current or former employees have also occurred in Albuquerque, New Mexico (Nov. 13, 2018), Las Vegas, Nevada (April 16, 2018), Birmingham, Alabama (March 14, 2018), Taylor, Michigan (February 1, 2018), Nashville, Tennessee (Jan. 11, 2018), Houston, Texas (Dec. 29, 2017), Bronx, New York (June 30, 2017), New York, New York (Oct. 5, 2017), Charleston, South Carolina (Aug. 24, 2017), Cleveland, Ohio (June 15, 2017). and Dallas, Texas (April 24, 2017), amongst other locations.

So, why the surge in shootings? Postulations regarding the phenomenon of school shootings may provide an answer. In an October 12, 2015 New Yorker article, Malcolm Gladwell theorized that school shootings are akin to “a slow-motion ever-evolving riot in which each new participant’s action makes sense in reaction to and in combination with those who came before.” If this theory is accurate as to “disgruntled” workers, the explanation for past shootings also serves as an ominous sign of the future.

If employers have not yet become alarmed regarding the prevalence of workplace shootings, their employees certainly have. According to data compiled by the Society for Human Resources Management (“SHRM”) in 2019, approximately one out of seven Americans do not feel safe at work.  The same data indicates that nearly 50% of human resources professionals have experienced a workplace violence incident.  In a March 19, 2019 press release, SHRM President and CEO Johnny C. Taylor remarked: “This data shows we have a lot of work to do in terms of security, prevention, training and response.”

To be sure, not all gun violence is preventable by an employer.  An unavoidable consequence of the prevalence of gun violence, however, is the increasing pressure to hold employers legally responsible. As noted in another blog article by this author, the Occupational Safety & Health Administration (“OSHA”) can and has issued citations arising from workplace violence under the general duty clause of the Occupational Safety and Health Act. State worker’s compensation laws do not always insulate employers from wrongful death suits, especially in states where worker’s compensation insurance is optional.

With each new incident of gun violence, therefore, comes inevitable scrutiny as to the employer’s action or inaction beforehand. Increasingly, questions are being asked as to whether (1) the employer had a workplace violence prevention plan, (2) the “disgruntled” employee had a violent background before being hired by the employer, (3) the employer had policies and procedures regarding threats of workplace violence, (4) the employer had training for recognizing the signs of imminent violence, (5) there were any warning signs of violent behavior by the “disgruntled” employee, (6) the employer had security protocols for preventing firearms in the workplace, (7) the employer had security protocols for denying access to former employees, (8) the employer had a response plan, and (9) whether employees were trained as to the response plan.

The disturbing new reality for employers, therefore, is the immediate need to understand the importance and severity of the threat of gun violence by “disgruntled” workers. Guidance in this area is already available from OSHA and SHRM. From this guidance and legal advice, policies and procedures can be formulated by employers to mitigate the risk of loss of human life and legal liability.

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues. To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com

NLRB Restresses Risk Of Firing Employees Who Discuss Pay

By Robert G. Chadwick, Jr., Managing Member, Seltzer, Chadwick, Soefje & Ladik, PLLC.

Employers understand the disruption to workplace morale which can result from open discussions about employee compensation.

For instance, on February 24, 2011, MCPc, Inc., a non-union company, invited employees to a “team building” lunch. The lunch quickly devolved from “team building” to complaints by employees about their excessive workloads. One employee urged the company to hire additional employees to alleviate these heavy workloads. He added the company could have hired several employees for the $400,000 annual salary being paid to a newly hired executive. Other employees agreed. Employee morale was worse after the lunch than it had been beforehand.

MCPc, Inc. responded to the ill-fated “team building” lunch by terminating the employee who had accessed and shared the salary of the newly hired executive. At the time, the company likely did not anticipate this decision would be the catalyst for more than eight years of costly litigation culminating in a May 23, 2019 Order that the employee be (1) reinstated without prejudice to his seniority and with all records of his prior dismissal expunged, (2) made whole for lost earnings and other benefits, with interest, (3) compensated for “search-for-work” expenses, and (4) compensated for the adverse tax consequences, if any, of receiving a lump sum backpay award.

So, what did MCPc, Inc. allegedly do wrong? According to the National Labor Relations Board (“NLRB”) Decision accompanying the May 23, 2019 Order, the employee’s conduct at the “team building” lunch was protected concerted activity under the National Labor Relations Act (“NLRA”). Specifically, the employee had contributed to shared employee concerns regarding staff shortages. The NLRB found the company violated Section 8(a)(1) of the NLRA by discharging the employee for his protected concerted activity.

To be sure, MCPc, Inc. can, and likely will, appeal the NLRB decision in a federal appeals court. Still, its experience serves as a cautionary tale for other employers. The NLRA is applicable to both union and non-union employers. What an employer may regard as a disruption to workplace morale, the NLRB may regard as legally protected conduct. When employee misconduct even arguably implicates shared concerns over terms or conditions of employment, prudent risk management demands that the NLRA be considered before taking any further action.

TexasBarToday_TopTen_Badge_VectorGraphic

Robert G. Chadwick, Jr. frequently speaks to non-profit organizations regarding labor & employment issues.  To contact him for a speaking engagement please e-mail him at rchadwick@realclearcounsel.com