Las Vegas Injury Lawyers Blog

The Supreme Court has granted review to an FLSA case that raises several critical arbitration questions such as whether a court will enforce an employee's express agreement that 1) prohibits class action employment claims and 2) waives class action arbitrations. American Express Co. v. Italian Colors Restaurant.

American Express provides card services to retail merchants, including supermarkets. To be an American Express merchant, retailers sign a Card Acceptance Agreement, which contains a clause requiring all claims to be submitted to arbitration and another clause which prohibits merchants from bringing class action claims. While both parties to the Agreement can terminate the contract at any time, American Express reserved the right to change the Agreement at any time.

While American Express initially only provided charge cards to holders, in recent years the company has also offered credit cards. Charge cards require a holder to pay off the balance each month, while credit cards allow the holder to maintain a revolving balance.

In 2009, several retail merchants, including Italian Colors Restaurant, brought individual lawsuits against American Express, claiming that the Card Acceptance Agreement violates U.S. antitrust laws. Specifically the merchants were upset that though the American Express card was becoming more akin to other credit cards, such as Visa and Mastercharge, American Express was still charging the merchants a merchant discount fee 35% higher than the competitive rates for Visa and Mastercharge.

The U.S. District Court for the Southern District of New York consolidated the cases. American Express moved to dismiss citing the arbitration clause, and the district court granted the dismissal. On appeal, the Second Circuit Court of appeals held the arbitration clause; in particular the class action waiver was unenforceable because it essentially protected American Express from antitrust suits. American Express appealed and the U.S. Supreme Court vacated the ruling and remanded for further proceedings. The appellate court still found the class action waiver to be unenforceable, so the high court again granted certiorari to determine if the appellate court's decision was consistent with the high court's decision in AT&T Mobility LLC v. Concepcion, where the Supreme Court held that California's refusal to enforce arbitration agreements on similar grounds was preempted by the Federal Arbitration Act.

Continue reading "Supreme Court Grants Review to FLSA Case Testing Whether an Employee can Waive Arbitration - Las Vegas Employment Law Attorney Andre Lagomarsino" »

The Supreme Court recently heard arguments in Genesis Healthcare v. Symczyk to decide whether a Fair Labor Standards Act (FLSA) collective action should have been dismissed because the named plaintiff's claim became moot.

Laura Symczyk was a registered nurse for Genesis. Two years after she began her job, Symczyk initiated a collective action under 29 U.S.C. § 216(b) on behalf of herself and all similarly situated individuals. The collective action alleged that Genesis violated the FLSA when they implemented a policy that subjected the pay of certain employees to an automatic meal break deduction whether or not the employee performed compensable work during his or her break.

While the case was pending in district court, Genesis served Symczyk with a Rule 68 offer of judgment. She did not respond. Thereafter the district court concluded that Genesis' offer of judgment mooted the collective action and dismissed the case. The 3rd Circuit reversed ruling that the potential for putative members of the as yet uncertified FLSA collective to join the case allowed it to stay alive, even though no other individual had actually opted in.

During oral argument, the high court's Justices initially seemed to focus on whether the named plaintiff's failure to accept the offer of judgment actually mooted her claims. This issue was not decided by the 3rd Circuit. The consensus seemed to be that the plaintiff's claims were not fully satisfied, and the fact that she walked away with nothing was not just a "housekeeping issue" as claimed by the defense.

Regarding the Rule 68 issue, the Justices noted:
1. Concern that "Rule 68 doesn't say anything about dismissing [the] suit" if a plaintiff rejects an offer for complete relief. Rather, by its plain language the rule merely allows for cost-shifting in the event that a plaintiff ultimately recovers less than the amount of the unaccepted offer.
2. The ramifications if a Rule 68 offer could be used to shortcut "the normal process of inviting opt-ins to occur" in FLSA cases.

While many hope that the high court will use this case to clarify the relationship between Rule 23 and § 216(b) and determine whether a putative collective action survives the mooting of the named plaintiff's claim, the Court may limit its ruling to a narrower issue of whether the district court properly found the named plaintiff's claim to be moot.

Continue reading "Supreme Court Hears Argument Regarding Whether a FLSA Collective Action Should be Dismissed when Named Plaintiff's Claim Becomes Moot - Las Vegas Employment Law Attorney Andre Lagomarsino" »

In a recent decision, the California Supreme Court has chosen to not review Harris v. Liberty Mutual Insurance Company. The high court also depublished the Harris case so it cannot be used as a precedent in any subsequent case.

In Harris, Liberty Mutual Insurance Co. classified their insurance claim adjusters as administrative personnel, exempt from Fair Labor Standards Act (FLSA) coverage. Under the FLSA, exempt employees are not entitled to overtime compensation.

In 2001, several insurance claim adjusters sued Liberty claiming the company classified them as exempt solely to deny them overtime pay. The trial court certified the class. After an evidentiary hearing, however, the trial court decertified the class for all claims that arose after October 1, 2000. Claims arising before October 1, 2000 continued to be entitled to class certification. Both the insurance claim adjusters and Liberty appealed.

On July 23, 2012, the Second Appellate Division of the California Court of Appeals held that the insurance claim adjusters were not administrative employees. Instead they were covered by the FLSA and entitled to overtime pay. The appellate court also ordered certification for all claims, regardless of the date filed. Liberty appealed.

The California Supreme Court reversed, holding that the "administrative/production worker dichotomy" is not dispositive in determining whether an employee is exempt or nonexempt. The case was remanded back to the appellate court. On remand, the Court of Appeals once again held that the insurance claim adjusters were nonexempt employees. The appellate court reasoned that though the insurance claim adjusters did perform management administration, such as negotiate settlements for the company, their duties were actually carried out to further along the company's day to day operations. For instance, any settlements above the predetermined range need approval from higher ups. Therefore the insurance claim adjusters' duties were primarily productive, and overtime pay should be paid.

In a recent 9th Circuit District Court case, the court held that insurance sales agents are independent contractors exempt from FLSA. Daskam v. Allstate.

Continue reading "California High Court Holds Insurance Claim Adjusters are NonExempt, but Only in One Particular Case - Las Vegas Employment Law Attorney Andre Lagomarsino" »

According to a recent Eighth Circuit Court of Appeals ruling, an employer does not violate the Fair Labor Standards Act (FLSA) when the employer makes a change of workdays which results in decreased overtime pay to employees. Roy Abshire, et al. vs. Redland Energy Services, LLC.

Redland Energy Services drills and services natural gas wells throughout the state of Arkansas. Drill crew operators, which the appellants were, worked 12 hour shifts for 7 consecutive days, followed by 7 days off. The 7 day workweek went from Tuesday through Monday. This allowed drill operators to have one weekend off every two weeks. Other Redland employees worked a traditional Monday to Friday schedule in a Sunday to Saturday workweek. When Redland decreased the number of drilling crews from five operators to four, it changed the drill operators' workweek to Sunday to Saturday. Because the drill operators still worked Tuesday to Monday, their number of overtime hours decreased since their work week was now split between two payroll periods.

The drill operators sued claiming the workweek change now gave them only 20 hours of paid overtime. That because they still actually worked 84 or more hours of overtime within a workweek, the change was solely for the purpose of not paying overtime which violated the FLSA. The district court granted Redland's motion for summary judgment and the drill operators appealed.

In support of its motion for summary judgment, Redland presented evidence that putting all employees on the same workweek increased efficiency because it reduced the time it took the office manager to prepare payroll from five to two days a month. It also decreased payroll expense by reducing the number of hours that drill operators had to be the FLSA-mandated overtime rate.

The Court of Appeals noted that the Department of Labor has interpreted the FLSA to prohibit employers from changing the beginning of the workweek if it is intended to evade overtime requirements. However, the FLSA does not require a workweek schedule that maximizes an employee's accumulation of overtime pay. Thus, a schedule whereby an employee's actual work schedule is split between two workweeks does not violate the FLSA. District court opinion affirmed.

Continue reading "FLSA Not Violated when Employer Change of Workdays Results in Decreased Overtime Pay - Las Vegas Employment Law Attorney Andre Lagomarsino" »

The Department of Labor (DOL) has forced a Domino's Pizza franchise to pay employees back wages. The franchise, based in Melbourne, paid back wages of almost $400 thousand to over 400 employees who worked at its 19 locations in Palm Beach, Indian River, and Brevard counties. Domino's Pizza has over 30 locations in Las Vegas.

The DOL investigation found the Domino's Pizza franchise owner committed several violations of the Fair Labor Standards Act (FLSA):

1) Tip-earning employees, such as delivery drivers, were not paid for all of the hours they worked nor paid overtime.
2) Employees who worked at nontipped duties, such as cleaning, stocking, and cooking, were paid hourly wage rates as low as $5.15 as if they were tipped employees.
3) Employee wages were illegally deducted for the cost of uniforms; and
4) The franchise owner failed to record and designate hours worked as tipped or nontipped in order to pay employees correctly.

"Restaurants are notorious for not paying tipped and nontipped employees the proper wage," stated Las Vegas Employment Law Attorney Andre Lagomarsino. "With the hundreds of restaurants in Las Vegas alone, businesses that commit this labor violation not only hurt the economy, they also decrease the amount of taxes available for needed federal, state, and city services."

Under the FLSA, covered, nonexempt employees are to be paid at least the federal minimum wage of $7.25 for all hours worked, plus 1.5 times their regular wage rates for hours worked beyond 40 per week or 8 hours per day. Tipped employees are required to be paid at least $2.13 an hour in direct wages provided that that amount plus the tips received equals at least the federal minimum wage of $7.25 an hour. When an employee's tips combined with the employer's direct wages does not equal the minimum wage, the employer must make up the difference. The DOL's Wage and Hour Division has an ongoing enforcement initiative in Florida as well as in other states to remedy widespread noncompliance in the restaurant industry.

Continue reading "Department of Labor Forces Domino's Pizza to Pay Employee Back Wages - Las Vegas Employment Law Attorney Andre Lagomarsino" »

Alabama federal district court judge, Scott Coogler, has decertified another Fair Labor Standards Act (FLSA) collective action of store managers. In Cynthia Richter, et al. v. Dolgencorp, Inc., et al, store managers, who worked for the retail chain Dollar General Stores, claimed they were improperly misclassified as employees exempt from FLSA coverage because they performed more nonmanagement, than management, duties.

After Richter won conditional certification, thousands of current and former store managers joined the lawsuit, citing Morgan v. Family Dollar, a store manager misclassification case in which the Eleventh Circuit upheld a $35 million verdict and refused to reverse a pretrial decision denying the employer's decertification motion. The store managers argued that, like Family Dollar, Dollar General made a single decision to classify the manager position as exempt, rather than on an employee-by-employee basis, store managers were expected to adhere to a company handbook and operating manual, Dollar General only had one job description for the manager position, and store managers spent the majority of their time performing non-management work.

Judge Coogler rejected the store managers' argument, explaining that Morgan upheld certification because to not do so would have been an abuse of discretion, which was not present in the Dollar General case. Judge Coogler also pointed out that the fact that all the store managers in the lawsuit spent a majority of their time on nonmanagement activities did not make all the store managers sufficiently similar to be of the same class since it's not the amount of time spent on management duties but the type of duties which was important, and in this case the store managers did not perform the same type of nonmanagement duties. Further, and most important, because of the latter, to force Dollar General into a single massive trial would deprive the company of its due process rights.

The Richter holding is more similar to the Supreme Court's due process holdings in Wal-Mart v. Dukes, and shows the willingness of courts to not trade the right of a litigant--even a corporate litigant--to defend itself for some measure of efficiency or cost savings. Last month Judge Coogler decertified a nationwide FLSA collective action of store managers who claimed that they were misclassified as overtime-exempt. Knott v. Dollar Tree Stores.

Continue reading "Alabama Federal Judge Decertifies Another FLSA Collective Action Further Diminishing Morgan - Las Vegas Employment Law Attorney Andre Lagomarsino" »

A 9th Circuit District Court recently held that insurance sales agents are independent contractors exempt from FLSA. Summary judgment granted to Allstate.

In determining whether a worker is an employee or independent contractor, a Court must consider the control and financial responsibilities present in the situation. Several factors must be reviewed, including:

1. the degree of the alleged employer's right to control the manner in which the
2. work is to be performed;
3. the alleged employee's opportunity for profit or loss depending upon his
4. managerial skill;
5. the alleged employee's investment in equipment or materials required for his
6. task, or his employment of helpers;
7. whether the service rendered requires a special skill;
8. the degree of permanence of the working relationship; and
9. whether the service rendered is an integral part of the alleged employer's business.

Neither the presence nor the absence of any individual factor is determinative. Further, because each situation is reviewed on a case-by-case basis, that district courts within the 9th Circuit previously found Allstate's insurance sales agents to be independent contractors was considered irrelevant by this district court.

In the present case, Allstate controlled the insurance sales agents' hours, products, and prices, as well as provided insurance forms, training, start-up costs, and other assistance.

However, because Allstate's insurance sales agents were responsible for how much profit or loss they sustained, whether to employ assistants, and how much to spend on advertising and other areas of their business, the 9th Circuit district court held the insurance sales agents were independent contractors. The district court noted that the present relationship Allstate had with its insurance sales agent involved enough freedom and autonomy that an agent can choose to turn his one-man shop into a multi-agent, multi-office business. The agent could also choose to operate on his own. Either way, the agent had a transferrable interest in the business, a circumstance unheard of in a normal employee-employer relationship.

Continue reading "9th Circuit District Court Holds Insurance Sales Agents are Independent Contractors Exempt from FLSA - Las Vegas Employment Attorney Andre Lagomarsino" »

According to the American Bar Association, the number of claims filed against employers for violations under the Fair Labor Standards Act (FLSA) is on the rise. The number of FLSA claims filed in the first nine months of 2010 was 13% higher than for the comparable period in 2009. According to the Bureau of National Affairs, from April 1, 2011 through March 31, 2012, a record number of FLSA claims, over 7 thousand, were filed.

The FLSA covers full-time and part-time workers who work for a school or preschool, a hospital or a business that provides medical or nursing care for residents, the federal, state, and local governments, or a private business that has two or more employees and annual sales or does business of at least $500,000. FLSA covered workers are required to be paid the higher of the national minimum wage established by the US Congress, or the state's own minimum wage. Service workers who receive tips can be paid a lower minimum wage.

Employers must pay overtime pay to FLSA workers who work more than 40 hours per week. Overtime pay is calculated at a rate of at least time and half of their regular rate. For example, if a worker is paid a minimum wage of $8.00 per hour, and works 45 hours in one week, the five hours of overtime pay are paid at a wage rate of $12.00 (1.5 x $8.00) for a total of $60.00 of overtime pay. Workers required to work on a Saturday, Sunday, or holidays do not qualify for overtime pay, as long as this schedule does not push a worker over the limit of 40 hours of work per week.

Employers with FLSA workers are required to keep records that contain at least the following:

• Employee's full name and social security number.
• Address, including zip code.
• Birth date, if younger than 19.
• Sex and occupation.
• Time and day of week when employee's workweek begins.
• Hours worked each day.
• Total hours worked each workweek.
• Basis on which employee's wages are paid (i.e., amount per hour, amount per week, amount per item produced)
• Regular hourly pay rate.
• Total daily or weekly straight-time earnings.
• Total overtime earnings for the workweek.
• All additions to or deductions from the employee's wages.
• Total wages paid each pay period.
• Date of payment and the pay period covered by the payment.

Continue reading "FLSA Claims Increase - Las Vegas Employment Attorney Andre Lagomarsino" »

The Third Circuit has outlined its two-part test for Fair Labor Standards Act (FLSA) collective actions.

First, to meet the conditional certification standard of making a "modest factual showing," named plaintiffs must present evidence "'beyond pure speculation,' that there is a factual nexus between the manner in which the employer's alleged policy affected [them] and the manner in which it affected other employees." Second, before final certification is granted, the court must determine whether the plaintiffs who have opted-in are in fact "similarly situated" to the named plaintiffs. The determination is a factual finding and made in light of the claims, defenses, and "all relevant evidence." Like all other circuit courts, Third Circuit courts will now consider such factors as whether the plaintiffs work in the same department, whether they advance similar claims, whether they seek substantially the same relief, and whether they have similar circumstances of employment. The plaintiff's burden of proof is by a preponderance of the evidence.

The Third Circuit has also outlined that the standard of review for Third Circuit appellate courts reviewing a Third Circuit district court's certification decision has two components. First, appellate courts must select the right legal standard to see whether the proposed plaintiffs are similarly situated. Second, appellate courts must apply that standard to make the required factual finding. The standard of review for a district court's selection of a legal standard is de novo, as a pure issue of law, while the district's factual finding is reviewed only for clear error. As to the impact of the factual finding, the Third Circuit concluded, "We do not believe that the statute gives the district court discretion to deny certification after it has determined that plaintiffs are similarly situated."

In Zavala v. Wal Mart Stores, Inc., the Third Circuit upheld the district court's decertification of the janitors' claims because, although Wal-Mart had a maintenance manual that specified cleaning procedures, and some Wal-Mart employees directed cleaning crews in their work, the janitors worked at 180 stores in 33 states for 70 cleaning contractors. In addition, the individuals worked varying hours and for different wages depending on the contractor. Moreover, the district court noted that Wal-Mart had different defenses available, including that Wal-Mart was not the individual janitors' employer under the FLSA and that Wal-Mart paid cleaning contractors an adequate amount to support an appropriate wage for the cleaners. The Third Circuit reasoned that "common links are of minimal utility in streamlining resolution," because "[l]iability and damages still need to be individually proven." The court explained that similarly situated does not mean "simply sharing a common status" such as an illegal immigrant. Rather, similarly situated means that proposed plaintiffs were subjected to "some common employer practice that, if proved, would help demonstrate a violation of the FLSA." The Third Circuit concluded: "The similarities among the proposed plaintiffs are too few, and the differences among the proposed plaintiffs are too many."

This lawsuit was an overzealous exercise on behalf of thousands of janitors, claiming they were illegal immigrants, against an entity that was not their formal employer but rather was the company contracting with the cleaning companies for which the janitors worked. The lawsuit also featured creative theories of liability, including civil RICO and false imprisonment claims, both of which were dismissed. The FLSA claim faced the hurdle of proving that Wal-Mart--the principal of the cleaning contractors who employed the janitors--was an employer of the janitors. Proving employment status on an agency theory or a joint-employer theory depends on multiple factors that could hardly be the same across a purported class comprising the employees of 70 cleaning contractors at almost 200 stores.

Continue reading "Las Vegas Employment Attorney Andre Lagomarsino - Third Circuit: Higher Standard is Needed to Certify FLSA Collective Actions" »

The Fifth Circuit Court of Appeals recently held that a private settlement under the Fair Labor Standards Act (FLSA) is valid. This ruling marked the first time a federal appellate court enforced a private FLSA settlement. Historically, Federal district and appellate courts have refused to enforce settlements and/or waivers of FLSA rights without Department of Labor (DOL) or court approval.

In Martin et al. v. Spring Break '83 Productions, L.L.C. et al.; No. 11-30671 (July 24, 2012), the four plaintiffs were employed by Spring Beak as lighting and rigging technicians on the movie "Spring Break '83." All four plaintiffs were members of the International Alliance of Theatrical Stage Employees Local 478 Union. When the film completed, the four plaintiffs filed a grievance claiming they were not paid for all the hours they had worked. After an investigation, the Union concluded that trying to determine what days and for how long the four plaintiffs had worked was impossible. Subsequently, the Union (as exclusive representative of the employees in the bargaining unit) and Spring Break entered into a settlement agreement concerning the disputed hours worked and the settlement payments owed the four plaintiffs. In exchange for the settlement payments, the four plaintiffs agreed to waive their right to file any complaints or lawsuits against Spring Break.

Before the settlement agreement was signed by the Union, the four plaintiffs filed a lawsuit against Spring Break and several other individual and corporate defendants to recover their unpaid wages. Spring Break and the remaining defendants asked the district court for a summary judgment, asserting under the settlement agreement, the four plaintiffs waived the right to file any lawsuit. In response, the four plaintiffs argued that they had not agreed to waive their right to file any complaint or lawsuit for their unpaid wages because the settlement agreement had not been signed, or approved by the DOL or by a court of competent jurisdiction.

Adopting the holding and logic of Martinez v. Bhols Bearing Equip. Co., 361 F. Supp. 2d 608 (W.D. Tex. 2005), the district court granted the summary judgment to the defendants. The district court noted there was no binding precedent that addressed whether parties may privately settle disputes regarding unpaid waged under the FLSA. Furthermore, where there is a bona fide dispute as to the amount of hours worked or wages due, a release or waiver under such circumstances is enforceable.

On appeal, the Fifth Circuit Court of Appeals followed the district court, adopted the holding and reasoning in Martinez, and found that the payments offered to and accepted by the four plaintiffs under the settlement agreement, was "an enforceable resolution of those FLSA claims predicated on a bona fide dispute about time worked and not as a compromise of guaranteed FLSA substantive rights themselves." The Court of Appeals noted that the settlement payments the four plaintiffs received and accepted occurred within the context of a lawsuit (because the four plaintiffs had already filed suit when the settlement agreement was executed). There was thus little danger of the employees being disadvantaged by unequal bargaining power.

In reaching its decision, the Fifth Circuit also analyzed and reject the four plaintiffs' argument that the Supreme Court's decision in Barrentine v. Arkansas-Best Freight Sys., 450 U.S. 728 (1981) invalidated the settlement agreement. The Fifth Circuit rejected this argument stating that in Barrentine, "the four plaintiffs' grievances based on the FLSA were submitted by the union to a joint grievance committee that rejected them without explanation, a final and binding decision pursuant to the collective bargaining agreement." But in Martin, the Fifth Circuit noted, the plaintiffs "accepted and cashed settlement payments--[plaintiffs'] FLSA rights were adhered to and addressed through the Settlement Agreement, not waived or bargained away." Thus, the Supreme Court's concern in Barrentine that FLSA substantive rights would be bargained away are not implicated in this case. As the Fifth Circuit explained in Martin, "FLSA rights were not waived, but instead, validated through settlement of a bona fide dispute, which [plaintiffs] accepted and were compensated for."

Continue reading "Las Vegas Employment Attorney Andre Lagomarsino - Fifth Circuit Finds Private FLSA Settlement is Valid" »

Seattle-based Baristas Coffee Co. has settled a back wages lawsuit brought against them by the U.S. Department of Labor (DOL). Under the terms of the settlement, two Baristas' company officers, Barry Henthron and T. Scott Steciw, must pay $50 thousand in back wages, and $25 thousand in damages to 45 current and former employees

In 2011, an investigation of Baristas by the DOL's wage and hour division revealed the company allowed customers to pay employees at espresso stands with checks that were unsigned and had insufficient funds. This resulted in the espresso employees being paid less than the federal minimum wage for the hours worked.

The investigation also revealed that employees working more than 40 hours in a week were not being paid the proper overtime, and the coffee company was not maintaining adequate records of hours worked and wages paid to employees. The DOL brought suit against Baristas in September 2011.

In addition to the back wages and damages, the settlement order requires Baristas to pay $10 thousand in civil money penalties and enjoins the company from future Fair Labor Standard Act violations.

Under the FLSA, covered employees are to be paid at least the minimum wage for regular hours worked. For any hours worked over 40 in a week, the FLSA requires covered employees to be paid at one and one-half times their regular rates. The FLSA also requires employers to maintain adequate and accurate records of wages and hours paid to employees.

Baristas operates espresso stands nationwide and also does business as Pangea Networks, Inc.

Continue reading "Baristas Coffee Co. Settle Back Wages Lawsuit" »

In In re Enterprise Rent-A-Car, the Third Circuit Court of Appeals has determined a test to decide when two enterprises have joint employment under the Fair Labor Standards Act (FLSA).

Nickolas Hickton worked as an assistant branch manager for Enterprise-Rent-a-Car Company. In 2007, Hickton filed a nationwide collective class action under the FLSA against Enterprise Holdings, Inc., the parent company of Enterprise-Rent-a-Car Company of Pittsburgh, for violating the FLSA by failing to pay required overtime wages to its branch managers and assistant managers, later amended to just the assistant managers, by misclassifying them as exempt.

Enterprise Holdings supplied administrative services, including business guidelines, and support to its subsidiaries who rented and sold vehicles. Though the use of the services was optional, subsidiaries did pay corporate dividends and management fees to Enterprise Holdings. Additionally, the Board of Directors for every subsidiary was composed of three C-level executives with Enterprise Holdings who "recommended" several business guidelines to its subsidiaries. For instance, at a 2005 meeting attended by representatives of Enterprise Holdings and its subsidiaries, Enterprise Holdings "recommended" that the subsidiaries not pay overtime wages to "Assistant Managers" and "Assistant Branch Managers" who were employed by subsidiaries other than the California subsidiaries.

The District Court first looked to the FLSA. Under the FLSA, an employee who worked in excess of 40 hours in a workweek shall be compensated for the excess hours at not less than one and one-half times the regular rate at which he or she is employed. The FLSA also defined an employer as "any person acting directly or indirectly in the interest of an employer in relation to an employee." 29 U.S.C. § 203(d).

Furthermore, an employee could have two or more employers if the employers shared or co-determined those matters governing essential terms and conditions of employment. N.L.R.B. v. Browning-Ferris Indus.of PA. Looking at the Ninth Circuit's Bonnette v. California Health & Welfare Agency, which created a test for determining whether an employer was a joint employer under the FLSA, the District Court fashioned their own test. The employer was a joint employer if the employer had:

1. the authority to hire and fire employees, promulgate work rules and assignments, and set conditions of employment, including compensation, benefits, and hours;
2. day-to-day supervision of employees, including employee discipline; and
3. control of employee records, including payroll, insurance, taxes and the like.

Enterprise Holdings had no authority to hire or fire assistant managers, no authority to promulgate work rules or assignments, and no authority to set compensation, benefits, schedules, or rates or methods of payment. Furthermore, Enterprise Holdings, Inc. was not involved in employee supervision or employee discipline, nor did it exercise or maintain any control over employee records.

The Third Circuit Court of Appeals upheld the District Court's finding that Enterprise Holding was not an employer of the plaintiffs and therefore not liable for any alleged overtime under the FLSA.

Continue reading "Third Circuit Court of Appeals Determines if Two or More Employers are Joint Employers Under the FLSA" »

A Mississippi District Court has held that whether a paralegal is an exempt employee under the Fair Labors Standard Act (FLSA), and therefore not entitled to overtime compensation, is a statement of fact for consideration.

Cherie Blackmore was a paralegal at Allen, Vaughn, Cobb & Hood. When Attorney Tom Vaughn left and started a new firm, V&B, Blackmore went with him. At V&B, Blackmore was a salaried employee whose annual salary was $50 thousand. She worked a 40 hour week but had some discretion over her own schedule. Though she chose a schedule of 8 hour days, 5 days per week, commencing at 8:15 a.m. and ending at 5:15 p.m., with a one hour lunch break, she often worked more than 8 hours a day and often exceeded 40 hours each week.

V&B classified Blackmore as an exempt FLSA employee, and per V&B policy, Blackmore was given 1.5 comp hours for every 1 hour of overtime worked in lieu of overtime pay. V&B policy also required exempt employees to get preapproval for any overtime from the partner for whom the staff member worked, and then submit a form to the office administrator outlining the overtime, i.e., working more than 8 hours in a single work day. At no time while working for V&B did Blackmore report nor request overtime compensation. Blackmore was terminated by V&B in December, 2009. One year after her termination, Blackmore filed a Complaint requesting overtime compensation. V&B asserted the affirmative defense that Blackmore was an employee who was exempt from the overtime provisions of the FLSA, and that accordingly the firm is not liable to Blackmore for overtime wages. V&B moved for summary judgment on all of Blackmore's claims. Blackmore moved for partial summary judgment on the issue of being an exempt employee.

The FLSA states that a non-exempt employee who works more than 40 hours in a regular workweek is to be paid at a rate not less than one and one-half times the employee's regular rate of pay. 29 U.S.C. § 207(a) (1). However, if the employee falls within an exemption category, 29 U.S.C. § 207(a) (1) does not apply. The burden is on the employee to prove he or she does not fall within an exempt category. Furthermore, if an employer fails to properly pay overtime to a non-exempt employee, each failure to properly pay overtime for hours worked in excess of forty in a work week represents a new violation of the FLSA. See Knight v. City of Columbus, 19 F.3d 579, 581 (11th Cir. 1994). The statute of limitation for filing an overtime compensation complaint is two years. If the employer acted willfully, the statute of limitations is extended to three years.

The court noted that there are three categories of exempt employees: executive, administrative, and professional. 29 U.S.C. § 213(a) (1). Blackmore was neither an executive or administrative employee. Regarding the final category, an employee meets the duties component of the professional exemption when the employee has a primary duty involving work that requires advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized instruction. 29 C.F.R. § 541.300(a). Furthermore, advanced knowledge is chiefly intellectual in character and traditionally exists in professions such as law, medicine, accounting, engineering and "similar occupations that have a recognized professional status." 29 C.F.R. § 541.301. In July 2011, Title 29 ("Labor") of the Code of Federal Regulations was amended to specifically exclude paralegals as exempt learned professionals because an advanced specialized academic degree is not a standard prerequisite for entry into the field. However, the amendment noted that if the paralegal possessed advanced specialized degrees in other professional fields and applied that advanced knowledge in the performance of his or her duties, then the paralegal would qualify as an exempt FLSA employee.

Blackmore asserted that she possessed a four year undergraduate degree from the University of Southern Mississippi in a double major, paralegal studies and psychology. In addition, she had a master's degree in public relations. V&B asserted that her work was essentially exclusive in the mass tort unit of V&BW where she was the senior paralegal and responsible for organizing and directing tasks of other paralegals. As whether Blackmore's advanced knowledge was used in her paralegal duties is a question of fact, Blackmore's motion for partial summary judgment and V&B's motion for summary judgment are denied. Blackmore v. Vaughn & Bowden, PA, Dist. Court, SD Mississippi 2012.

Continue reading "District Court Decides "Whether a Paralegal is an FSLA Exempt Employee from Overtime is a Statement of Fact"" »

The U.S. Department of Justice (DOJ) has filed an employment discrimination lawsuit against the Nevada Division of Forestry (NDF) on the grounds that the NDF fired a female employee after determining she was pregnant.

Tawnya Meyer was a dispatcher with the NDF. When she informed the NDF she was pregnant, her job was terminated. During the termination discussion, the NDF told Meyer that her pregnancy was a reason for her termination. Up until the time of her termination, Meyer had not received any work performance complaints.

After the termination, Meyer filed an employment sex discrimination complaint with the Equal Employment Opportunity Commission (EEOC). After the EECO found reasonable cause to believe discrimination had taken place, the EEOC referred the charge to the DOJ. The DOJ lawsuit, filed in the Reno Division of the U.S. District Court for the District of Nevada, charges the NDF's actions violated Title VII of the Civil Rights Act of 1964. Furthermore, the lawsuit charges that the NDF did not follow its own policies regarding job terminations. The lawsuit seeks a court order that would require the NDF to develop and implement policies that would prevent its employees from being subjected to discrimination based upon sex. It also seeks monetary relief for Meyer for damages she has sustained as a result of the alleged employment sex discrimination.

In a similar suit, Melodee Megia, a former room service sales employee at the Cosmopolitan Resort and Casino in Las Vegas, has charged the resort and casino with employment sex discrimination. Megia alleges after she became pregnant, her supervisors began to make nasty comments to her. When one supervisor asked her to deliver a pleasure pack, which included condoms, to a guest, the supervisor added, "That's what happens when you get pregnant. And isn't it a little too late for that?"

When Megia was eight months pregnant the resort and casino fired her for saying "bye-bye" on the phone instead of "good bye." Megia alleges that there was no script requiring her to say "good bye," no other room service sales employee had ever been disciplined for being casual and friendly when they said goodbye on the phone, and if saying "good bye" had been a requirement she would have followed the requirement.

Megia is also part of a class action suit against the resort and casino for violating the Fair Labor Standards Act (FLSA). Megia alleges the resort and casino does not pay their employees for the mandatory time spent waiting for and changing into their work uniforms.

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When an employer allegedly violates the Fair Labor Standards Act (FLSA), its employee, who believes his or her's rights were violated, can sue the employer. If the employer is then found in violation of the FLSA, the employer is liable to the employee. But what happens when the employer who commits the violation is sold before the employee initiates his or her's lawsuit? Can the employee sue the successor employer for the FLSA violation? Is the successor employer even liable to the employee for a FLSA violation committed by the company it bought?

In Paschal v. Child Development, Inc., the employee sued the successor employer for a FLSA violation committed by the previous employer. The successor employer filed a motion to dismiss the employee's suit as a matter of law, on the grounds that since the successor employer was not in existence when the FLSA violation occurred, it cannot be liable.

In deciding the motion, the Arkansas Eastern District Court held that a successor employer could be liable for a FLSA violation if:

1. There is a continuity of business, and
2. The successor employer was aware of the violations when it took over the company that committed the FLSA violation,

In making its decision a court can also consider whether:
1. the same plant is being used;
2. the employees are the same;
3. the same jobs exist;
4. the supervisors are the same;
5. the same equipment and methods of production are being used; and
6. the same services are being offered.

The district court found in this particular case the successor employer never proffered any evidence to show that it did not know of the FLSA violation when it took over the company that committed the FLSA violation. The successor employer also did not prove there was no continuity of business. The successor employer's motion to dismiss was premature and therefore denied.

In Battino v. Cornelia Fifth Ave., LLC, the successor employer filed a motion for summary judgment. The District Court, S.D. New York found that there were issues of fact regarding whether the successor employer was an innocent purchaser. As such the successor employer's motion for summary judgment could not be awarded.

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