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Employment Law News Archives

Supreme Court Reaffirms Applicability Of Federal Arbitration Act

Last week, the Supreme Court reaffirmed the authority of the Federal Arbitration Act ("FAA") over all state and federal claims within its purview. Facts: Eddie Lee Howard and Shane D. Schneider began working for Nitro-Lift Technologies, LLC, in 2008 and 2009, respectively. 273 P.3d 20, 24. During their employment, Howard and Schneider entered into confidentiality and non-competition agreements with Nitro-Lift that contained an arbitration clause. 2012 WL 5895686, at * 1. The arbitration clause in question stated "Any dispute, difference or unresolved question between Nitro-Lift and [the employees] shall be settled by arbitration..." Id.

Supreme Court to Hear Oral Arguments in Symczyk v. Genesis Healthcare Corp.

On December 3, 2012, the Supreme Court will hear oral arguments in Symczyk v. Genesis HealthCare Corp., 656 F.3d 189 (3d. Cir. 2011). On appeal from the Third Circuit, a Supreme Court decision in favor of the employer could effectively end use of collective actions under the Fair Labor Standards Act ("FLSA"). Facts:  Laura Symczyk worked as a registered nurse for Genesis HealthCare Corp. ("Genesis") from April through December 2007. 656 F.3d at 190. During her employment, Genesis implemented a policy of reducing the pay of certain employees for mandatory meal breaks, whether or not the employees performed work during the thirty minute period. Id. As discussed in a previous blog post, such deductions violate the FLSA, and thus Symczyk and other employees may be owed a substantial amount of overtime pay.

FLSA Liquidated Damages

The Fair Labor Standards Act ("FLSA") provides that an employer who violates the FLSA shall be liable for unpaid overtime pay, plus an "additional equal amount as liquidated damages." 29 U.S.C. § 216(b). Willfulness not necessary. Many attorneys mistakenly believe they must show a "willful" violation of the FLSA to recover liquidated damages. Courts award liquidated damages under the FLSA automatically, absent the showing discussed below. See Bernard v. IBP, Inc. of Neb., 154 F.3d 259, 267 (5th Cir. 1998). Section 11 of the Portal-to-Portal Pay Act of 1947 qualified the FLSA's liquidated damages provision. See 29 U.S.C. § 260. If an employer shows good faith and reasonable grounds for believing the act or omission was not a violation of the FLSA, a court may, in its discretion, award no liquidated damages. Id. Section 260 was meant to mitigate the strict liability nature of FLSA violations. However, employers continue to face a "substantial burden" in showing both good faith and reasonable belief. Bernard, 154 F.3d at 267. So, what does it take to meet this burden? Employers must show both "good faith" and "reasonable grounds." The Fifth Circuit law is clear that an employer must show both good faith and reasonable belief. See Mireles v. Frio Foods, Inc., 899 F.2d 1407, 1415 (5th Cir. 1990) ("Because the trial court did not find that Frio acted both in 'good faith' and 'reasonably' in its efforts to comply with the law, it erred in not awarding liquidated damages equal to the full amount of unpaid wages due plaintiffs under [the FLSA]."). "Good faith" requires some action by an employer. An employer may not assert ignorance of the FLSA laws in an effort to avoid liquidated damages. See Barcellona v. Tiffany English Pub, Inc., 597 F.2d 464, 468-69 (5th Cir. 1979) (stating "[e]ven inexperienced businessmen cannot claim good faith when they blindly operate a business without making any investigation as to their responsibilities under the labor laws"). A finding of "good faith" requires some duty to investigate potential liability under the FLSA. See Dalheim v. KDFW-TV, 712 F.Supp. 533, 539 (5th Cir. 1989). "Reasonable grounds" requires the violation to be objectively reasonable. The fact that an employer has not received previous complaints from employees does not meet the reasonability requirement. See Martinez v. Food City, Inc., 658 F.2d 369, 376 (5th Cir. 1981) ("[t]hat an employer (has) broken the law for a long time without complaints from employees is plainly not the reasonable ground to which the statute speaks."). Often, whether the actions are objectively reasonable focuses on an employer's interpretation of the Department of Labor's regulations regarding the FLSA. See Dalheim, 712 F.Supp. at 539-40. Ultimately, the decision of reducing liquidated damages is up to the Court. Even where a court finds an employer acted in good faith and with a reasonable belief, a court is within its discretion to award liquidated damages. See 29 C.F.R. § 790.22. Where an employer does not show both good faith and reasonable belief, a court does not have discretion to reduce or eliminate liquidated damages. Id. The FLSA was drafted nearly seventy-five years ago and continues to be one of the most violated employment laws in the country. Seeing that liquidated damages are automatically awarded absent some good faith action, employers should contact an employment attorney to ensure they are in compliance with federal law and are properly interpreting the FLSA. AWR  

Who Are Employees?

One of the most commonly litigated issues in employment law is whether an individual is an employee or an independent contractor. The distinction between employees and independent contractors is critical for several reasons. Most importantly, independent contractors do not enjoy the same state and federally-protected rights that employees are provided under Title VII of the Civil Rights Act of 1964, the Texas Commission on Human Rights Act, the Fair Labor Standards Act, the Age Discrimination in Employment Act, etc. In addition, employers need not provide unemployment insurance, workers' compensation coverage or federal income tax withholdings to independent contractors. So, the question is, how is it determined whether or not an individual is an employee? Well, the answer depends on what laws are being enforced, and in what court. Several different "tests" exist depending on the issues and location of a particulars lawsuit. Texas common law focuses on the "right to control" test. Texas courts focus mainly on an alleged employer's ability to control the individual in determining whether the individual is an employee. Among the factors considered is the alleged employer's control over:

Waiters and Tipped Employees Often Shorted Pay

The Fair Labor Standards Act ("FLSA") provides that all non-exempt employees who work over 40 hours in a workweek are entitled to overtime pay at one-and-one-half times their regular hourly rate. 29 U.S.C. § 207. The FLSA also provides that all employees must be compensated a minimum hourly rate of at least $7.25 per hour. 29 U.S.C. § 206(a)(1)(C). However, each of these provisions is modified for tipped employees. A "tipped employee" is defined as a person who customarily and regularly receives $30 or more per month in tips. Generally, this includes waiters, valets, bartenders and similar professions. The modifications made for tipped employees have made things quite complicated for employers, to where both large chain restaurants like Chili's and small restaurants owned by world-famous chef Mario Batali have been alleged to violate the rules. If you are a tipped employee, here are a few things to keep in mind.

iDOL - Keeping Track of Hours in the Workplace

In the age of the iPad, iPhone, and iPod, businesses and individuals are finding new ways to make their lives simpler. Apple's App Store now offers over half a million apps, many of which are free or are only $0.99. These apps can entertain us, connect us to others, pay our bills, turn on our car or even tell us the name of the song playing over the radio. We can now add the Department of Labor  ("DOL") to the list of developers with apps available in Apple's App Store for free download. The app. In 2011, the DOL's Wage and Hour Division released its first app, DOL Timesheet. DOL Timesheet allows employees to record their hours worked and calculate the amount of wages that may be owed by their employer. The calculations include overtime pay at a rate of one and one-half times the regular rate of pay as provided for by the Fair Labor Standards Act ("FLSA"). See 29 U.S.C. § 207.

Why Employers Should Fear Retaliation Claims

Employers have good reason to fear retaliation claims and plaintiff's attorneys good reason to like them. Title VII of the Civil Rights Act makes it illegal to discriminate against an individual because of race, color, national origin, religion and sex. However, the best claims from an individual's perspective are found in the section of Title VII that prohibits retaliation against individuals who oppose a discriminatory practice, make a complaint of discrimination or participate in an proceeding under Title VII, such as an Equal Employment Opportunity Commission ("EEOC") proceeding or lawsuit. Here's why employers should fear such cases.

U.S Supreme Court Interprets Anti-Retaliation Provision

Earlier this year, in the case, Thompson v. North American Stainless, L.P., 131 S.Ct. 863 (2011), the United States Supreme Court interpreted the anti-retaliation provisions of Title VII of the Civil Rights Act of 1964 ("Title VII"), a statute that, among other things, protects employees from retaliation for making complaints of racial, religious, national origin and sex discrimination. The Court's decision is good news for employees. The Facts. Miriam Regalado and her fiance, Eric Thompson, both worked for North American Stainless ("NAS"). Ms. Regalado filed a charge of sex discrimination against NAS, and in February 2003 the Equal Employment Opportunity Commission notified NAS. Three weeks later, NAS fired Mr. Thompson.

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