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Archive for the ‘Employment Law Blog (US)’ Category

Was That An Out-Of-Bounds Whistle?

Posted on: February 23rd, 2018

By: Samuel Y. Edgerton, III

On Wednesday, February 21, 2018 the U.S. Supreme Court settled a split of opinion between the Ninth and Fifth Circuit Court of Appeals. The issue before the high court concerned the definition of the term “whistleblower” under the Dodd-Frank Act.

In March 2017, the Ninth Circuit found that former Digital Realty executive Paul Somers was entitled to whistleblower protection under Dodd-Frank after being discharged because he complained to upper management that a senior vice president had eliminated some internal corporate controls. These eliminations allegedly constituted a violation of the Sarbanes-Oxley Act.  However, in 2013, a Fifth Circuit ruling in a similar case, Asadi v. G.E. Energy, found that to be eligible for protection under Dodd-Frank as a recognized “whistleblower,” the employee must show that they took their complaint to the SEC, per the specific wording of the statute.

Mr. Somers’s San Francisco based employer appealed the Ninth Circuit’s ruling to the high court, as it was undisputed that Mr. Somers had not reported to the SEC, but reported elsewhere.

In ruling for a definition of a whistleblower as those who report to the SEC, the Supreme Court excluded Dodd-Frank whistleblower protections to those only reporting at their place of work.

The high court ruling is instructive on two fronts: It means that whistleblower definitions in the enabling statute are to be strictly construed. The high court opinion also suggests quite strongly that lower courts and federal agencies cannot ignore unambiguous language in an enforcement statute and expand the definitional meaning on their own.

Score one for the strict constructionist! The Ninth Circuit was out of bounds.

As stated by Justice Kagan during oral argument last November, “you have this definitional provision, and it says what it says.”

If you have any questions or would like more information, please contact Sam Edgerton at [email protected].

A Millennial Gig

Posted on: February 21st, 2018

By: David M. Daniels

With Contribution By: Jason C. Dineros

The Obama Administration’s federal enforcement relaxations for marijuana use in 2013, brought with it the development of a viable market industry from what was previously looked upon as taboo—akin to “that stoner stage you went through in high school, but grew out of.” As start-ups were popping up wanting to be frontrunners in an industry that had as much anticipation as whiskey distilleries in the years that followed prohibition, so did the need for legal consultation and representation.  No longer was the idea of marijuana dispensaries becoming as common as liquor stores a far too funny dream or overly paranoid nightmare—depending on the effect—concepts including edible bakeries, “weed lounges,” and cannabis-friendly restaurants and pop-ups also materialized.

A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.

The trend toward a gig economy has begun. A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors. Findings from Adobe revealed that as many as one-third of the 1,000 U.S. office workers they polled had a second job and more than half (56%) predicted we would all have multiple jobs in the future. The annual report from Upwork and freelancers Union found that more people than ever are choosing to freelance, up to 55 million this year, or 35% of the total U.S. workforce. As many as 81% of traditional workers they surveyed said they would “be willing to do additional work outside of [their] primary job if it was available and enabled [them] to make more money.

There are a number of forces behind the rise in short-term jobs. For one thing, in this digital age, the workforce is increasingly mobile and work can increasingly be done from anywhere, so that job and location are decoupled. That means that freelancers can select among temporary jobs and projects around the world, while employers can select the best individuals for specific projects from a larger pool than that available in any given area.

Digitization has also contributed directly to a decrease in jobs as software replaces some types of work and means that others take much less time. Other influences include financial pressures on businesses leading to further staff reductions and the entrance of the millennial generation into the workforce. The current reality is that people tend to change jobs several times throughout their working lives; the gig economy can be seen as an evolution of that trend.

In a gig economy, businesses save resources in terms of benefits, office space and training. They also have the ability to contract with experts for specific projects who might be too high-priced to maintain on staff. From the perspective of the freelancer, a gig economy can improve work-life balance over what is possible in most jobs. Ideally, the model is powered by independent workers selecting jobs that they’re interested in, rather than one in which people are forced into a position where, unable to attain employment, they pick up whatever temporary gigs they can land.

The gig economy is part of a shifting cultural and business environment that also includes the sharing economy, the gift economy and the barter economy.

For further information or for further inquiries involving labor and employment law, commercial liability, or hospitality law, you may contact David M. Daniels, the Co-Chair of the Commercial and Complex Litigation Practice Section of Freeman Mathis & Gary, LLP, at [email protected].

 

Governor Wolf Proposes New Overtime Rules for Pennsylvania

Posted on: February 20th, 2018

By: Christopher M. Curci

Employers may recall the Obama administration’s efforts in 2016 to increase the overtime rule salary exemption from $23,600 annually to $47,476 annually.  By way of background, employers are required to pay overtime to employees who work over 40 hours in a given workweek.  However, many “white collar” employees are exempt from the overtime rules if their salary is above the $23,600 annual threshold.

The Obama administration’s proposed changes in 2016 caused quite a hubbub, finding strong support from pro-employee groups and strong opposition from pro-business groups.  Ultimately, the proposed changes were struck down by a federal court and the Presidential administration turned over to President Trump, largely mooting the issue.

However, Pennsylvania employers should be aware that Governor Wolf recently announced a similar change to Pennsylvania’s wage and hour laws as part of his “Jobs That Pay” initiative.  Governor Wolf’s proposal calls for increasing the salary exemption to $31,720 annually in 2020, $39,832 annually in 2021, and $47,892 annually in 2022.  Thereafter, the salary threshold will continue to increase every three years.

The Governor’s office estimates the proposed changes will increase the wages of 460,000 workers in Pennsylvania.  While the proposed changes have not yet been passed and would not take place for some time, employers should always be aware of the potential for significant change in wage and hour laws.  It is important that employers plan well in advance for such significant change to manage their own business finances and avoid costly wage and hour violations.

Christopher M. Curci, Esq., is a Pennsylvania and New Jersey Labor and Employment Attorney and member of Freeman Mathis & Gary’s Labor and Employment Law National Practice Section.  He represents employers in litigation and advises clients on all aspects of employment law.  If you need help with this or any other employment issue, he can be reached at [email protected].

Florida Appellate Court Invalidates Local Minimum Wage Law

Posted on: February 9th, 2018

By: Melissa A. Santalone

A recent decision by Florida’s Third District Court of Appeal invalidated Miami Beach’s local minimum wage law, holding that a state statute preempted the local ordinance.  In 2016, the City of Miami Beach enacted a local minimum wage hike, which would have gone into effect January 1 of this year and would have raised the local minimum wage to $10.31 per hour.  In City of Miami Beach v. Fla. Retail Federation, Inc., the Third DCA analyzed a the ordinance under both a state statute and an amendment to the Florida Constitution.    The state statute, Fla. Stat. § 218.077, enacted originally in 2003, provided, in relevant part, that “a political subdivision may not establish, mandate, or otherwise require an employer to pay a minimum wage other than a state or federal minimum wage.”  In 2004, Florida voters passed a constitutional amendment, brought by citizens’ initiative, that established a higher minimum wage across the state than that provided by the federal minimum wage law.  It also provided that the amendment “shall not be construed to preempt or otherwise limit the authority of the state legislature or  any other public body to adopt or enforce any other law, regulation, requirement, policy or standard that provides for payment of higher or supplemental wages or benefits.”  The Third DCA found that the constitutional amendment did not specifically nullify or limit § 218.077’s preemption provision, and therefore, Miami Beach’s local minimum wage ordinance was invalid.  The City of Miami Beach plans to appeal the decision to the Florida Supreme Court.

Florida employers should look out for the Supreme Court’s ultimate decision on this case, but for now, they can rest assured that there will be no enforceable local minimum wage laws enacted to adhere to in the interim.  Employers in other states disputing local minimum wage ordinances may want to seek advice on preemption statutes in their home venues in light of the approach taken by employer coalitions in Florida.

If you have any questions or would like more information, please contact Melissa Santalone at [email protected].

Are Your Facebook Job Postings Violating the ADEA

Posted on: February 8th, 2018

By: Brenton S. Bean

So say putative class action plaintiffs in the Northern District of California.  See Communications Workers of America et al v. T-Mobile US, Inc., et al, Case No. 5:17-cv-7232 (N.D. Ca), filed Dec. 20, 2017.  Plaintiffs assert that Facebook has become the modern employment agency, providing not only a platform, but also data and strategies to help employers find candidates.  The lawsuit alleges that Facebook allows, and in some instances requires, a target audience be defined, which includes age restrictions.  In addition, Facebook uses its own massive database and algorithms to determine which users will see the ads, often on the basis of age.  This practice of “microtargeting” advertisements for employment discriminates against older workers, plaintiffs say.

Shortly before the lawsuit was filed, the New York Times ran an article regarding Facebook advertising and age discrimination.  Facebook and other social media sites have recently become more popular means by which employers advertise for job openings.  The Times story indicates many companies use Facebook’s ability to target its users by demographics, such as age, and therefore have discriminated against job applicants by restricting the scope of their Facebook ads to younger Facebook users.  Interestingly, that use of an age restriction is not always limited to cases where the advertiser requests such a restriction.  Facebook also takes the parameters identified by the employer and uses its own statistical methodologies to target the ad.  That means age restrictions may have been used in advertisements without the advertiser’s knowledge, according to the claim.

The scope of the case is potentially enormous.  First, the putative class size is immense.  The class as defined includes all Facebook users nationwide who are age 40 and older, who are interested in receiving employment-related advertisements or recruiting from employers via Facebook, and who were excluded from receiving an ad because of their age.  Second, the complaint names not only four defendant employers, but also a defendant class of employers and employment agencies.  Plaintiffs alleged there may be a thousand or more members of the defendant class, which could include every employer that has used age-limited Facebook ads.  In addition to the federal ADEA claim (which is expected to be amended once the charge process runs its course), plaintiffs have asserted claims under state law for discriminatory advertising and disparate impact recruiting and hiring.

While the named defendants are primarily large companies, the putative defendant class may also include many smaller employers.  Whether potentially implicated or not, companies are advised to review their job placement advertising.  At this juncture, it is too early to assess the class’s chances or the merits, either under the ADEA or the articulated state law claims.  We will monitor this matter closely.

If you have any questions or would like more information, please contact Brenton Bean at [email protected].