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

Employers struggle with conduct that appears ambiguous but is interpreted by the “victim” as unlawful.  The dilemma arises most often in a sexual harassment setting.  For example, a co-worker comments that another’s clothes make her “look good” or that he “really likes” her perfume.  Employers, and courts, struggle with the intent behind this conduct.  For example, a recent case involved racial harassment allegations based in part on bananas and banana peels littering the truck of an African-American co-worker. Daily Report Online wrote about this case on its website last week.

Would such anonymous conduct support a claim for a racially hostile environment?  In December 2010, in granting summary judgment to an employer, an Alabama Federal District Court said, “No.” Continue Reading Employer Dilemma – How Should An Employer Respond to Ambiguous Workplace Conduct

A recent ruling reinforces that “how” an employer does what it does often is as important as what it does.  The case appeared relatively straightforward.  An employee missed a work shift and claimed intermittent FMLA leave.  One manager, who had been skeptical about some past intermittent leave use, saw the employee at a birthday party on the same day of the missed work shift.  The employer investigated.  There was evidence that the employee was at the party at the same time as some of the hours of her missed work shift.  The employee claimed she attended the party only after her shift would have ended, and that she was feeling better after resting for most of the day.

The employer terminated the employee, explaining it had an honestly-held belief that the employee had been at the party during her shift and was lying about it.  Rather than grant summary judgment to the employer, the Court ruled a jury trial was necessary.  Why?

Here are the reasons the Court did not defer to the employer’s claimed honestly-held belief under the “honest belief” rule: Continue Reading Employers Beware – “How” You Do Is Often As Material As “What” You Do

In a move that could significantly increase employer costs in the home care market, the Department of Labor has published proposed rules that will severely limit the current minimum wage and overtime exemptions for those who provide “companionship services.”

The proposed rules basically do two things:

  1. The rules narrow the definition of “companionship services. The Fair Labor Standards Act includes a specific exemption from minimum wage and overtime requirements for employees who “are employed in domestic service employment to provide companionship services for individuals who (because of age or infirmity) are unable to care for themselves.” 29 U.S.C. § 213(a)(15).  Currently, the DOL regulations define “companionship services” to include “fellowship, care, and protection for a person who, because of advanced age or physical or mental infirmity, cannot care for his or her own needs.” The regulations also provide that “such services may include household work related to the care of the aged or infirm person such as meal preparation, bed making, washing of clothes, and other similar services.” Such services may also include the performance of general household work provided that such services do not exceed 20 percent of the total hours worked each week.  See 29 CFR § 552.6.The proposed regulations remove from the definition of companionship services the provision of “care”  for the elderly and limit the services to “fellowship” and “protection”.  “Fellowship” is defined as “social, physical, and mental activities” such as “conversation, reading, [and] games” and protection is described as being present with the person in their home or accompanying the elderly person outside the home to “monitor” their “safety and well-being”. “Intimate personal care services” may be provided as long as such services do not exceed 20 percent of the work performed.  “Companionship services” no longer includes any general household work unless such service happens to be incidental to the “fellowship” and “protection” being provided.
  2. The new rules prohibit third party employers from claiming the exemption. Not only is the scope of “companionship services” to be greatly limited but the exemption is now only available to the elderly person or their family.  Third party employers of employees who provide companionship services, even if such services meet the new limited definition, will not be able to take advantage of the exemption from the minimum wage and overtime requirements.

As a matter of federal law, employers can require employees to agree to arbitrate any employment dispute.  But, can that arbitration agreement force an employee to arbitrate only individual claims, not class (or collective) claims?  Recently, the National Labor Relations Board said NO.  Click here for the Board’s ruling.

This ruling appears at odds with a ruling by the United States Supreme Court in AT&T Mobility LLC v. Conception.  There, the Supreme Court considered a California state law that invalidated any arbitration agreement that included a mandatory waiver of class claims.  The Supreme Court noted that the right to pursue class claims is a procedural right, not statutory, and overturned the California law.  Some employers then adopted arbitration agreements that included waivers of an employee’s ability to pursue class or collective actions.  Continue Reading Labor Board Rules that Arbitration Agreements Forbidding Class Arbitration is Unlawful

Jury dutyMost Tennessee employers are required to pay employees their “usual compensation” for jury duty.  But, what time is included in the phrase “jury duty” for the purpose of paying employees who serve?

That question was the subject of a recent Tennessee Attorney General opinion.  The Attorney General clarified that, under Tennessee law, jury duty includes the travel time to and from court to report for jury service, even if the employee’s “usual compensation” at his/her job does not include travel time.

Based on Tennessee law, a juror is entitled to an excused absence from work and, for certain employers (unless have less than five employees) to payment in the amount of their “usual compensation” for the time attributed to jury service (unless the employee has been employed for less than six months).  Attorney General Robert Cooper noted that the compensation provision of the law expressly states that the employer is not required to pay more than the employee’s time “spent serving and traveling to and from jury duty.” Tenn. Code Ann. § 22-4-106(b) (emphasis added).  Thus, in an opinion that is not surprising given this statutory language, commuting time to and from court is included in an employee’s jury duty pay.

Based on recent developments, employers wonder how much leave is really required under the ADA.  It seems that employers with even generous policies and practices have run afoul of the EEOC either in individualized cases, or, worse yet, in class claims.

Most recently, Verizon Communications Inc. settled for a record $20 million payout based on EEOC allegations that Verizon’s no-fault attendance policies did not adequately provide for an individualized assessment of an employee’s condition.  The EEOC has been focusing on such “no-fault attendance” and “maximum leave” policies.

How much leave is required, however, is not the correct question.  The better question is:  “What must be included in the employer’s process of evaluating an employee’s need for leave?”

Compliance with the ADA is often a “process driven” evaluation.  How you do something is almost as important as what you do. Continue Reading ADA Developments – “How Much Leave Is Required?” Is the Wrong Question

Social media sitesThe NLRB’s Division of Advice recently issued memoranda in several different cases, showing that not all activity by employees on social media sites constitute protected activity.  These reports show that the Labor Board, like many employers, struggle with what is “protected concerted activity” – and thus protected from any employer discipline – and what are mere individual gripes – and most likely not protected.

The NLRB’s attempt to provide guidance in these memoranda does show the Labor Board’s adoption of a more realistic view of what is protected activity on social media than some had feared (and more realistic than some critics had charged).  In short, “protected concerted activity” even on social media must show more than an individual employee’s private complaint or gripe about her/his employer. The employee must be expressing group complaints (acting “with or on the authority of” other employees) and generally must be interacting with employees in such expression. Forbes.com posted a good article illustrating the differences. In one instance, the NLRB even examined whether a particular employee’s Facebook wall included ‘friends’ who were co-workers. Continue Reading Labor Board Report Shows Its Struggles with the Realities of Social Media

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

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