Articles Posted in Employment Litigation

Jennifer Melendez

On September 22, 2015, Texas-based oil and gas services provider Halliburton agreed to pay over $18 million to 1,000 of its nationwide employees following an investigation by the U.S. Department of Labor (DOL). The DOL is a  federal agency tasked with enforcing the Fair Labor Standards Act (FLSA). The FLSA requires that covered employees receive overtime pay for all hours worked above 40 hours in the workweek.

Halliburton is one of the largest oil and gas providers in the energy industry and employs over 70,000 employees. In an investigation intended to crack down on oil and gas companies that are non compliant with the FLSA, the DOL discovered that Halliburton misclassfied 1,000 of its employees as exempt from overtime pay. These employees included field service representatives, pipe recovery specialists, drilling tech advisors, perforating specialists and reliability tech specialists. Halliburton also neglected to keep records of hours worked by those employees. Failing to keep accurate records of employees’ hours and misclassifying employees as exempt from overtime are violations of the FLSA.  According to the DOL, in order to be exempt from overtime, a position generally must meet specific job criteria and have a salary of no less than $455 a week. Secretary of Labor, Thomas Perez, stated:

Owen H. Laird, Esq.

The most publicized labor and employment disputes in America are those that take place between athletes and the entities that they play for. An unfathomable amount of ink has been spilled discussing Tom Brady’s four-game suspension from the NFL and the federal lawsuit that overturned it, NBA and NHL lockouts, and Major League Baseball’s steroid suspensions. While all these events are coated in the sheen of sport and celebrity, they are essentially labor and employment issues faced by workers everyday: workplace discipline, collective bargaining, and drug testing.

The most recent athletics-related employment issue to grab headlines was the 9th Circuit Court’s decision regarding compensation for college athletes. Currently, rules promulgated by the NCAA – the governing body overseeing the vast majority of intercollegiate athletics – prohibit athlete compensation outside of scholarships. That is, colleges and universities are only allowed to pay for their athletes’ tuition and accompanying academic expenses; they cannot provide wages or other financial benefits. NCAA athletics, particularly college football and college basketball, generate billions of dollars of revenue each year, which is divided between broadcasters, coaches – most notably the head football and basketball coaches who are often the highest paid public employees in their respective states, videogame companies, and academic institutions, to name a few, but not – apart from scholarships – to the athletes themselves. The NCAA argues that amateurism is fundamental to its product; if college athletes were paid, it would irrevocably harm the marketability of college sport. The NCAA rests its arguments on the ideal of the “student-athlete” who is a student first and an athlete second, and whose primary concern is receiving an education. This contention is belied by colleges’ and universities’ efforts to ensure that their athletes remain eligible to compete – for example, arranging for star athletes to receive passing grades with minimal to academic work – avoiding the academic hurdles faced by the rest of the student body.

Yarelyn Mena and Owen H. Laird

When the Supreme Court of the United States affirmed the right for same-sex couples to marry, the LGBT community won a long and hard-fought battle for marriage equality. The Human Rights Coalition (HRC), one of America’s largest civil rights organizations committed to ensuring legal rights for the LGBT community, continues the struggle for LGBT rights by supporting the Employment Non-Discrimination Act (ENDA), legislation aimed at protecting the LGBT community from discrimination in the workplace. ENDA would make it illegal for employers to discriminate against potential or current employees based on their sexual orientation or identity.

ENDA resembles Title VII of the Civil Rights Act of 1964 in its purpose to prevent and eradicate discrimination of protected classes in the workplace. The HRC supports passing ENDA because there “is no federal law that consistently protects LGBT individuals from employment discrimination; there are no state laws in 29 states that explicitly prohibit discrimination based on sexual orientation, and in 32 states that do so on gender identity.” Currently, in the states that do not offer protection to LGBT workers, employees and prospective employees face routine and often legal discrimination because of their sexual orientation or gender identity. ENDA will provide LGBT workers with nationwide protection from employment discrimination, filling in the gaps left by state laws. Protection against sexual orientation and gender identity based discrimination is already widespread. According to a report by the HRC, 8 out of 10 voters already believe that discrimination based on sexual orientation and gender identity was illegal, showing that ENDA would provide the legal framework for rights that most Americans already believe exist.

Owen H. Laird, Esq.

Identifying which public-sector employees are entitled to overtime pay is a complex endeavor, fraught with regulations, collective bargaining agreements, and bureaucracy, as well as the numerous requirements and exemptions of the Civil Service Law, New York Labor Law, and the Fair Labor Standards Act. A recent case, Matter of Roberts v. Cuomo, addressed these issues in the context of New York’s response to, and recovery from, Hurricane Sandy.

In Roberts, the New York Appellate Division, Third Department reversed a decision regarding whether “exempt” public sector employees can receive compensation for overtime worked during Hurricane Sandy. “Exempt” workers – those who generally are not entitled to overtime pay – may receive overtime compensation under certain circumstances under New York Civil Service Law § 134[6], including work done in relation to an “extreme emergency.”

Yarelyn Mena and Owen H. Laird, Esq.

At a hearing on April 29, 2015, the House Subcommittee on the Constitution and Civil Justice discussed class action suits. The hearing covered the controversial legislation, “The Fairness in Class Action Litigation Act of 2015” (H.R. 1927). Republican committee members, Bob Goodlatte and Trent Franks proposed the legislation, which would prevent class actions from being certified without proof that each proposed class member suffered property or bodily injury of the same type and extent as the named class representative(s).

Opposition to H.R. 1927 flooded in shortly after the hearing. Paul Bland, Executive Director of Public Justice said that the legislation would make it “essentially impossible for Americans to join together in bringing class action lawsuits for nearly any illegal act a corporation might undertake.” Bland continued: “Think Brown v. Board of Education [the seminal case desegregating public schools] was a good idea? Congressman Goodlatte’s bill would make bringing that case impossible. By eliminating any class action that does not involve quantifiable ‘property’ loss or personal injury, the legislation would eliminate any case that didn’t involve money or blood.” Many fundamental class action lawsuits, such as Brown, that have affected the course of our legal history, would not have been possible under the proposed legislation. Class action lawsuits in federal court are often classified as ‘no-injury’ or ‘overbroad’ in situations where a plaintiff experienced an issue with a product or service, and others who also have purchased the product or service join the action. Cases with similar circumstances would never make it to litigation if adhering to H.R. 1927’s provisions.

Daniela Adao and Edgar M. Rivera, Esq.

Most employees never read their employee handbooks even though such handbooks contain important information that sets the framework for, and terms of, their employment relationships. Employee handbooks often communicate valuable information, such as the employer’s mission, policies, and procedures, as well as employees’ benefits and rights under state and federal employment laws. In some circumstances, an employee handbook may be a contract, creating enforceable rights for employees.

In Braun v. Wal-Mart Stores, Inc., two Wal-Mart employees sued Wal-Mart on behalf of themselves and other similarly situated employees for breach of contract, unjust enrichment, and violations of the Fair Labor Standards Act (“FLSA”), alleging violations of their employee handbook. Wal-Mart’s employee handbook stated that all employees must be paid for meal breaks, and that hourly employees who work between three and six hours per shift must be paid for one short break, and hourly employees who work more than six hours per shift must be paid for two short breaks. Under Pennsylvania law, a handbook is enforceable against an employer if a reasonable person in the employee’s position would interpret its provisions as evidencing the employer’s intent to supplant the at-will rule and be bound legally by its representations in the handbook. The employees claimed that, contrary to their employee handbook, Wal-Mart frequently denied them their meal and short breaks and, when they did receive those breaks, they were not paid for that time. Although federal law does not require employers to provide meal and short breaks, the FLSA requires employers that do offer meal and short breaks to pay their employees for interrupted meal breaks, i.e., meal periods in which employees perform work, and for all short breaks.

Yarelyn Mena and Edgar M. Rivera, Esq.

Divers for the popular Uber car service filed a class action complaint against Uber Technologies, Inc. alleging that Uber misclassifies its drivers as independent contractors resulting in the illegal withholding of the drivers’ funds.  Uber provides car services in cities throughout the country via an on demand dispatch system where drivers are hailed and dispatched through a mobile phone application.

The drivers claim that Uber failed to pay their business expenses and the total proceeds owed from customer gratuities. Under California law, employers must reimburse their employees for work expenses that benefit their employer and are necessary for employees to perform their jobs.  Uber does not reimburse its estimated 163,000 drivers for costs such as vehicle maintenance and gas.  Additionally, the drivers only receive a portion of passenger gratuities. Uber explicitly markets that there is no need to tip their drivers because tip is included in payment.

Ciera Ambrose and Edgar M. Rivera, Esq.

Wage theft is the illegal withholding of wages or the denial of benefits that are rightfully owed to an employee. Examples include the failure to pay overtime, failure to pay minimum wage, employers taking illegal deductions from employees’ pay, employees working off the clock, and, at its most extreme, employers not paying their employees at all. Wage theft is common among low-wage workers because these workers generally lack the resources to protect themselves from abusive employers and to assert their rights. Immigrant workers are uniquely vulnerable because their employers often illegally threaten to report them to immigration authorities after affected employees complain.

In the United States, the Fair Labor Standards Act (FLSA) prohibits wage theft; however, the U.S. Department of Labor estimates that about 70% of employers are noncompliant. Workers are robbed between $40 and 60 billion each year, which exceeds the total amount stolen through robbery, burglary, larceny, and auto theft combined, making employers the number one perpetrators of theft in the United States.

On January 14, 2015, the Supreme Court of New Jersey answered a question of law submitted to it by the Third Circuit Court of Appeals regarding the classification of plaintiffs–as employees or independent contractors–in the case Sam Hargrove, et al. v. Sleepy’s, LLC.

Several tests have been used by different courts to decide the status of workers in wage and hour cases. For example, recently the Federal Court for New York’s Southern District has used the “Economic Realities Test” and the “Common Law Test,” each of which considers a long list of factors and each of which specifies that its list of factors is not to be considered sufficient to decide the question. These tests require courts to consider factors such as the degree of control the worker exercised over the tasks they performed, their freedom to engage in other employment, the benefits they received, the determination of their work schedule, and so on.

At the federal level, the Department of Labor’s Wage and Hour Division has offered its guidance regarding the interpretation of the phrase “employment relationship” for the purpose of determining whether a given person should be treated as exempt form the minimum wage and overtime rules of the Fair Labor Standards Act (FLSA). They explicitly state that the issue requires some subjective judgment, for example: “…while the factors considered can vary, and while no one set of factors is exclusive, the following factors are generally considered when determining whether an employment relationship exists under the FLSA (i.e., whether a worker is an employee, as opposed to an independent contractor)…” They then proceed to list six different factors that are themselves unclear.

When Lorenzo Cook was offered a position at Kmart‘s Hyattsville, Md. store, he told the hiring manager that he would not be able to provide a urine sample as part of the company’s pre-employment drug screening because of his end stage renal disease and dialysis. He requested a reasonable accommodation, some alternative method of testing such as a blood or hair test. Kmart refused any such accommodation and ultimately communicated to him their refusal to allow him to take any drug screening test other than a urine test. Mr. Cook then sued the company for discriminating against him on the basis of his disability, and the Equal Employment Opportunity Commission (EEOC) took up his cause.

On January 22, 2015, Judge George J. Hazel of the District of Maryland issued a Consent Decree approving a proposed settlement of Equal Employment Opportunity Commission v. Kmart Corporation et al. Under the agreement, Cook would receive $102,048, representing his lost wages and benefits from the Customer Service Associate position he was denied in early 2010. Mr. Cook was also awarded extensive non-monetary relief: Kmart must provide reasonable accommodation to applicants in Cook’s situation, provide training to managers and employees regarding ADA complaince, change its policies regarding hiring and drug testing procedures, post applicants’ and employees’ rights in public places.

The interesting kernel of this court decision, the reason the EEOC selected this case for its symbolic value, is that the ADA requires employers to provide reasonable accommodation to persons with disabilities, or perceived disabilities, in all stages and areas of employment including the application and interview process. This was a relatively straightforward case of an employer who had several reasonable accommodations available, but chose not to provide any of those accommodations despite having no good reason for failing to do so.