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Posts Tagged ‘DOL’

Are We There Yet?: Auto Service Advisor Exempt Status Under the FLSA Makes Return Trip to the Supreme Court

Posted on: November 28th, 2017

By: Will Collins

Last year, the Supreme Court narrowly avoided a collision with the question of whether service advisors at car dealerships are exempt as “salesmen” under the overtime requirements of the Fair Labor Standards Act (FLSA). However, as Encino Motorcars, LLC v. Navarro returns to the Supreme Court, the case is poised to squarely address this issue and, hopefully, provide much-needed clarity.

As previously discussed, the Supreme Court sent the Encino case back to the Ninth Circuit Court of Appeals to reconsider the exempt status of service advisors, instructing the Ninth Circuit to give no deference to the Department of Labor’s (DOL) regulations providing that service advisors were not exempt.

After considering the case on remand, the Ninth Circuit still held that service advisors do not fall within the FLSA’s exemption for “salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles.” As a result, the Supreme Court will again consider the exempt status of auto service advisors and all indications are that the Court will resolve the discrepancy between the DOL regulations, the Ninth Circuit decision, and prior decisions by the Fifth and Fourth Circuits.

After a long road of uncertainty, many are hopeful that the Supreme Court will provide clarity when it finally resolves this issue. As the case is scheduled for oral argument in January, we will continue to monitor the case and provide an update of any developments.

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

Updates on the “Joint Employer” Standard

Posted on: October 10th, 2017

By: Tim Holdsworth

More than two years have passed since the National Labor Relations Board (“NLRB”) handed down its new and controversial joint employer standard in Browning-Ferris Industries of California, 362 NLRB No. 186 (August 27, 2015). As you may recall, that decision greatly expanded the standard under which an entity could be found as a joint employer under the National Labor Relations Act (“NLRA”). In departing from its own well-established standards, the NLRB announced that they will no longer require a joint employer to possess and exercise authority to control employees’ terms and conditions of employment, but instead will find sufficient control if the entity merely reserves this authority. They also announced they will no longer require the employer’s control to be exercised directly and immediately. Instead, the NLRB declared that control exercised indirectly, such as through an intermediary, can establish the requisite control.

The U.S. Department of Labor (“DOL”) adopted a similar standard for who it considered a “joint employer” under the Fair Labor Standards Act (“FLSA”) and the Migrant and Seasonal Agricultural Worker Protection Act shortly thereafter.

Neither of these controversial steps has fared well. The Browning-Ferris decision has been under attack in courts, while the DOL rescinded its guidance earlier this year under new Labor Secretary Alex Acosta.

Legislative efforts also have been made to give further guidance to businesses that have struggled with the uncertain and convoluted joint employer scheme. Recently, the U.S. House of Representatives Education and Workforce Committee approved a bill that would amend both the NLRA and FLSA to require that a company exert “direct, actual and immediate” control over workers to be considered an employer.

We will continue to monitor this legislation and provide any updates. For now, however, employers need to know that the Browning-Ferris standard is still in effect.

If you have any questions about federal, state, or local wage and hour laws, please contact Tim Holdsworth at [email protected] or any of the attorneys in FMG’s Labor & Employment Law Section.

Wage and Hour Issues Evolving at a Rapid Pace

Posted on: March 6th, 2013

By: Brad Adler and Marty Heller

ConfidentialWage and hour lawsuits continue to be some of the fastest growing civil suits in our court system. In Georgia alone, FLSA lawsuits increased 40 percent in 2012, outpacing the approximately 13 percent increase nationwide by a significant margin.

Mirroring this increase in suits is an increase in significant decisions interpreting various aspects of the FLSA. For instance, the settlement of FLSA cases is an area that continues to be ripe for debate. Traditionally, courts have held that FLSA lawsuits cannot be settled unless the court reviews and approves the parties’ settlement agreement. Lynn’s Food Stores, Inc. v. U.S. Dept. of Labor, 679 F.2d 1350, 1353 (11th Cir. 1982).

A recent ruling from the Eastern District of New York, however, challenges this notion. In Picerni v. Bilingual SEIT & Preschool, Inc., the court concluded that private settlements of FLSA cases generally do not require court approval. The court distinguished the Lynn ruling as applying only in cases where there are atypical facts, such as pro se plaintiffs or where the defendant settles to avoid a Department of Labor investigation. While this case provides hope that a new trend may be established allowing settlement of FLSA cases without court approval, the Eleventh Circuit precedent set in the Lynn’s case continues to control wage and hour claims brought in federal courts in the states of Georgia, Florida and Alabama.

The requirement that courts review and approve FLSA settlements can be significant for employers, because it creates a potential public relations problem since most employers want settlement agreements to remain confidential. In non-FLSA cases, employers avoid this issue by including a confidentiality clause in the settlement agreement. The inclusion of such a clause in a typical employment claim is expected (and lawful), but there is a growing trend among federal judges to reject settlement agreements in FLSA claims that contain confidentiality provisions.

A recent case in the U.S. District Court for the Northern District of Georgia highlights this trend. The parties (both represented by counsel) submitted a proposed settlement agreement, which contained a confidentiality provision, for review and approval. The Court rejected the agreement due to the confidentiality provision, stating “[a] confidentiality provision furthers resolution of no bona fide dispute between the parties; rather, compelled silence unreasonably frustrates implementation of the ‘private-public’ rights granted by the FLSA and thwarts Congress’s intent to insure widespread compliance with the statute.” The Court also found that sealing the settlement agreement “thwarts Congress’s intent both to advance employees’ awareness of their rights and to ensure pervasive implementation of the FLSA in the workplace.”

This case represents a growing trend among federal courts around the country. As such, companies wishing to settle FLSA lawsuits likely will continue to find it increasingly difficult to ensure that such settlements are confidential. Of course, an employer and plaintiff are free to settle a wage and hour matter privately and the plaintiff may file a stipulation of dismissal. However, without court approval of the settlement, the release is not binding on any future claim by the plaintiff, and the employer runs the risk (albeit a low one) that the employee may re-file their action and seek additional compensation for any amount allegedly not paid as part of the resolution.

DOL Issues Final Rule Implementing FMLA Expansions for Military Caregivers and Airline Flight Crew Employees

Posted on: February 6th, 2013

By: La’Vonda McLean

injured service-memberOn February 5, 2013, the Department of Labor (“DOL”) issued its Final Rule implementing statutory amendments to the FMLA regarding leave for military caregivers and airline flight crews.  These statutory changes incorporate amendments made by the National Defense Authorization Act for Fiscal Year 2010 (“FY 2010 NDAA”) and the Airline Flight Crew Technical Corrections Act (“AFCTCA”).  The final rule also clarifies changes regarding the calculation of intermittent or reduced schedule leave.

Before the FY 2010 NDAA was enacted, military caregiver leave was limited to eligible employees who were the family members of current service-members with a serious injury or illness incurred in the line of duty on active duty.  The DOL’s Final Rule, however, expands military caregiver leave to eligible employees who are family members of certain veterans with a serious injury or illness incurred or aggravated in the line of duty on active duty and that manifested before or after the veteran left active duty.

The Final Rule expands the definition of serious injury or illness for a current service-member to include preexisting conditions that were aggravated by service in the line of duty on active duty.  The Final Rule also expands qualifying exigency leave to eligible employees with a spouse, son, daughter, or parent in the Regular Armed Forces.  Before the Final Rule, a qualifying exigency only included members of the National Guard and Reserves.

The DOL’s Final Rule also amends the regulations to implement the AFCTCA.  The AFCTCA established a special minimum hours of service eligibility requirement for airline flight crew-members and flight attendants that reflect the unique scheduling requirements of the airline industry.  The Final Rule modifies the FMLA’s existing rules so that airline flight crew-members and flight attendants are better able to qualify for coverage under the FMLA based on the hours of service eligibility requirement.

The DOL’s announcement is available here.

Healthcare Act: DOL Extends March 1st Deadline for Employers to Give Notice of Exchanges

Posted on: February 5th, 2013

By: David Cole

Benefits ApplicationThe Affordable Care Act requires employers to provide written notice to employees of the availability of insurance through state or federal health exchanges, which are scheduled to begin operation on January 1, 2014.  The written notice must inform employees about the following:

(1)   the existence of an Exchange in their state, including a description of Exchange’s services, and how the employee may contact the Exchange for assistance;

(2)   the employee may be eligible for a premium tax credit or cost sharing reduction for buying qualified insurance through the Exchange if the insurance plan offered by the employer does not pay at least 60 percent of the total allowed costs of benefits; and

(3)   if the employee buys qualified insurance through the Exchange, he may lose the employer’s contribution (if any) to any health benefits plans offered by the employer, which if received, may be tax deductible.

The statute requires that this notice be provided to all new employees at the time of their hire, and to existing employees by no later than March 1, 2013.  With this deadline approaching quickly and no regulations or other guidance provided yet (such as a model notice), the Department of Labor (“DOL”) has officially announced an indefinite extension of the deadline.  The DOL did not announce a new deadline, but only stated that it “expects that the timing for distribution of notices will be the late summer or fall of 2013, which will coordinate with the open enrollment period for Exchanges.”  In addition, the DOL confirmed that it is considering providing model, generic language that employers could use to satisfy the notice requirement.

The complete text of the DOL’s announcement is available here.  Between now and this summer, the DOL is expected to issue regulations providing further guidance on the notice requirement and other aspects of the law, including the automatic enrollment requirement applicable to large employers with 200 or more employees.  In the meantime, employers can breath a little easier knowing that they do not have to scramble to provide notice to their employees by March 1st.