Some employers use last chance agreements (“LCA”), particularly in union settings, to allow hourly employees “one last chance” to improve performance.  In return, the employee waives the right to use the union’s grievance and arbitration process if later termination is due to continued failure to improve performance or due to another policy violation.  Employers will explain that the employee otherwise would be terminated, but can remain employed in return for signing this “one last chance” agreement; if the employee fails to sign the LCA, the employee will be terminated for the underlying violation which led the employer to offer the LCA.

Some employers also require employees to release statutory civil rights in an LCA.  As an employer recently learned, this practice is hazardous and can lead to significant liability.

Continue Reading Last Chance Agreements – Asking for Waiver of Discrimination Claims Perilous

Lawsuits under the minimum wage and overtime laws have become a cottage industry. Filings of these lawsuits have increased 400% from 2000 to 2011. Why? While some reasons may depend upon whom you ask (and their political leanings), there are clearly some trends, as noted in a recent article here.

A few reasons:

  • The Fair Labor Standards Act (FLSA) was passed in 1938 and the substance of its provisions has remained constant since then. But, our economy has changed dramatically – from a primarily manufacturing-based economy then, to a primarily service-based economy now. This leads to some “square peg/round hole” problems as employers try to apply concepts from a bygone era to a new economic reality.
    Continue Reading Wage and Hour: Why So Many Lawsuits?

The National Labor Relations Board’s recent attempt to change its union election rules has been halted by a federal district court in Washington, D.C. The Court ruled that the attempted changes were not valid because the vote to approve the rules occurred when the Board did not have a quorum (Chamber of Commerce v. NLRB, D.D.C., No. 11-cv-2262, 5/14/12).

Interestingly, the decision hinged on what is sufficient “participation” in an electronic vote to satisfy quorum requirements. Board member Brian E. Hayes did not vote or take any action in the December 16, 2011 electronic vote. Is that like being present but abstaining, and thus counting toward a quorum? No, said the Court. Hayes was only sent the notification calling for a vote; he did not vote or even abstain. His silence was as if he was not in attendance at an in-person meeting, and thus, no quorum was present for the election rules to have been properly adopted.

Continue Reading Federal Court Halts Board’s Changes in Election Rules

On April 25, the EEOC approved enforcement guidance on an employer’s use of criminal background checks in making hiring decisions. By a 4-1 vote, the EEOC clarified that a criminal background check is not unlawful.

BUT, the Commission explained its view that the use of criminal histories can be discriminatory in “impact” on minorities and will result in liability for employers if they cannot show “business necessity” for rejecting an applicant based on the applicant’s criminal past.

Continue Reading EEOC Issues Guidance on Criminal Background Checks

The EEOC recently ruled that Title VII’s prohibition of discrimination “because of . . . sex” now includes protection for any transgender individual. With this ruling, the EEOC expressly overturns earlier EEOC decisions to the contrary dating back to 1984, 1994 and 1996. Employers should be aware that, according to the EEOC’s current interpretation, any transgender applicant or employee enjoys all of Title VII’s protections against discrimination or harassment.

The complainant had applied for a job with the ATF while a male and believed she was going to be hired given certain promises made in the application process. Later, when the ATF learned she was transitioning from male to female, she was told that funding for the job was no longer available; that information, she later learned, was not accurate.

Continue Reading Transgender Status Now Protected Under Title VII

Employees in Michigan, Ohio, Kentucky and Tennessee who believe they have been wrongfully denied workers’ compensation benefits now have a new weapon – RICO. In Brown v. Cassens Transport Co., 6th Cir., No. 10-2334, 4/6/12, five employees sued their employer, a claims adjuster and a doctor alleging conspiracy to deny them workers’ compensation benefits. The Sixth Circuit Court of Appeals ruled that the lawsuit stated a claim under RICO.

RICO, the Racketeer Influenced and Corrupt Organizations Act, requires that an alleged victim identify four elements: (1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity. Each element requires an additional analysis: an “enterprise” is marked by association and control; a “pattern” requires a showing of “continuity”, which is continuous and related behavior that amounts to, or poses a threat of, continued criminal violations; and “racketeering activity” involves the violation of designated federal laws. In addition, an alleged victim must allege that he was injured in his business or property “by reason of” a violation of RICO’s substantive provisions. Continue Reading Sixth Circuit Recognizes Potential RICO Claim If Employees Wrongfully Denied Workers’ Compensation Benefits

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Social media continues to gain attention in the employment law field.  From recent NLRB advice memoranda to Congress considering new legislation, to every employer now being advised to at least have a “policy” on social media, the news keeps pouring in. (Read this article by Eric Yaverbaum on The Washington Post blog, or this one on Mashable, or the many other articles online.)

Now, Maryland has become the first state to ban employers from asking for the social media site passwords of employees and applicants.  Relying on privacy concerns, the Maryland General Assembly passed legislation prohibiting employers from requesting or requiring usernames or passwords to personal online social media sites.  The legislation also bans an employer from taking disciplinary action, or threatening such action, if an employee or applicant refuses to disclose such information. Continue Reading Demanding Social Media Site Passwords Now Illegal in Maryland

tip poolingOn February 13, 2012, the federal district court for the Middle District of Tennessee granted conditional certification of a class action case under the Fair Labor Standards Act (“FLSA”) against Coyote Ugly saloons. As reported by Law360, the court conditionally certified several distinct classes, the most interesting of which is all employees who “worked as bartenders, barbacks, or waitresses at any company-owned Coyote Ugly saloon at any time within the last three years who were required to contribute their tips to a “tip pool” in which security guards also participated.” Under the FLSA, an employer may take a “tip credit” against the minimum wage owed to employees.  That is, an employer may pay a tipped employee $2.13 an hour under the FLSA (note that the amount of the tip wage can vary by state or local law), and then rely on the tips received by a server to make up the difference between $2.13 and the minimum wage. (If the tips received by the employee are insufficient to bring the employee’s compensation up to minimum wage, the employer must make up the difference.)

The FLSA also permits a “tip pool”; that is, an employer may require servers to contribute a portion of their tips to a tip pool and then pay out the funds in the tip pool to other employees who “customarily and regularly” receive tips (See Wage and Hour Fact Sheet #15: Tipped Employees under the Fair Labor Standards Act).  Such a rule immediately reveals the nature of the challenge in complying with the FLSA regulations regarding a tip pool.  If the employees “customarily and regularly” received tips directly, they wouldn’t need to be in a tip pool!  The regulations and case law have gradually come to define an employee who “customarily and regularly” receives tips as an employee who participates in directly providing service to the customer – such as the hostess at the front door and perhaps a busboy or bartender (as opposed to the dishwasher in the “back of the house”.)  One of the factors used to determine whether an employee may be paid out of the tip pool is the extent to which they have any “face-to-face” contact with the customer.  See Kilgore v. Outback Steakhouse of Florida, Inc., 160 F.3d 294 (6th Cir. 1998).  Continue Reading Do Bouncers Provide Customer Service? The Challenges of Tip Pooling

A Cautionary Reminder for Employers

A Texas Federal Court recently ruled that terminating an employee because she wanted to pump breast milk at work is not sex discrimination.  The Equal Employment Opportunity Commission sued on behalf of an individual employee who had mentioned her need to pump breast milk at work and soon thereafter was fired for job abandonment.  The employer claimed that the employee had not kept the employer informed during her leave or about her desire to return to work.  The employer explained that its decision to terminate the employee for job abandonment already had been made before the employee’s request.

The Washington Post reported on this ruling last week. Continue Reading Texas Court Rules Against EEOC – “Lactation Discrimination” Is Not Unlawful Sex Discrimination But …

Assume an employee asks for leave, to be taken in the future. At the time of the request, the employee is not covered by the FMLA because the employee has not yet been employed for one year. Later, the employee is terminated, and the termination occurs before the employee has been employed for a year. Does the employee’s advance request for leave make the employee “protected” under the FMLA, even though the employee was never eligible for leave?

In a ruling on January 10, 2012, the 11th Circuit recently said yes. The Court found that the FMLA “protects a pre-eligibility request for post-eligibility leave.” The Court reversed the lower court’s dismissal of the case, explaining that the lower court’s ruling would allow an employer to terminate an employee to avoid having to provide rightful FMLA leave once the employee becomes eligible. Continue Reading Employee Not Yet Eligible for Leave Still Protected Under FMLA

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

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