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FMG Law Blog Line

Archive for September, 2018

Many Drivers Don’t Appreciate Limitations of Driver Assistance Technologies

Posted on: September 28th, 2018

By: Wes Jackson

Pump the breaks, George Jetson! While car technology is quickly advancing towards autonomous vehicles, we aren’t there yet. Even so, a recent study from the AAA Foundation for Traffic Safety suggests many drivers overestimate the abilities of new driver assistance technologies, which could lead to unsafe driving habits.

The study examined drivers’ attitudes toward and interactions with “advanced driver assistance systems,” or ADAS. Anyone who has recently purchased a new car is likely familiar with many of the latest ADAS technologies such as forward collision warning, automatic emergency breaking, lane departure warning, lane keeping assist, blind spot monitoring, rear cross-traffic alert, and adaptive cruise control.

While the study found that most drivers trusted and used these ADAS features, it also revealed that most drivers do not appreciate their limitations. For example, only 21% of owners of vehicles with blind spot monitoring knew that such systems could not detect vehicles passing at a high rate of speed. Similarly, only a third of owners of vehicles with automatic breaking systems knew the systems relied on cameras and sensors that could be compromised by dirt or other debris.

What’s worse, some drivers with ADAS systems admitted to adopting unsafe driving habits in response to the new technologies. For instance, 29% of respondents to the study reported feeling comfortable engaging in other activities while using adaptive cruise control. Similarly, 30% of respondents admitted to relying exclusively on their blind spot monitoring system without checking their blind spots, and 25% of respondents admitted to backing up without looking over their shoulder when using a rear cross-traffic alert system.

These new ADAS technologies can certainly help motorists driver more safely. However, drivers should not succumb to the illusion that these new technologies made alert driving a thing of the past. Until we’re all flying around in autonomous space-age vehicles, be sure to keep your eyes on the road and always look twice before backing up or changing lanes.

The Transportation Law Team at Freeman Mathis & Gary, LLP is on the cutting edge of autonomous vehicle issues. If you have any questions about the AAA Foundation’s report or issues concerning autonomous vehicles, please contact Wes Jackson at [email protected].

U.S. Supreme Court to Decide Whether Age Discrimination Statute Applies to Small Public Employers

Posted on: September 27th, 2018

By: Brent BeanKoty Newman

The U.S. Supreme Court recently granted certiorari in Mount Lemmon Fire Dist. v. Guido, 200 L. Ed. 313, (U.S., Feb. 26, 2018), to determine whether the Age Discrimination in Employment Act (“ADEA”) applies to state political subdivisions, regardless of size.

Generally, the ADEA prohibits employers from discriminating against individuals based on the individual’s age if that individual is at least forty years of age.  29 U.S.C. § 621-634.  But who qualifies as an employer for the purposes of the ADEA?  The ADEA defines “employer” as:

a person engaged in an industry affecting commerce who has twenty or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year. . . .  The term also means (1) any agent of such a person, and (2) a State or political subdivision of a State and any agency or instrumentality of a State or a political subdivision of a State, and any interstate agency, but such term does not include the United States.  29 U.S.C. 630(b).

The Sixth, Seventh, Eighth, and Tenth Circuits have all held that the ADEA’s twenty-employee threshold applies to state political subdivisions.  However, the Ninth Circuit recently disagreed and ruled that the ADEA’s twenty-employee minimum does not apply to state political subdivisions, reasoning that the statute can be read to include all state and political subdivisions without the cap.

In the case before the Ninth Circuit, John Guido and Dennis Rankin were hired in 2000 by the Mount Lemmon Fire District.  They were the two oldest full-time employees of the Fire District when they were both terminated on the same day, June 15, 2009.  The district court dismissed their case, agreeing with the Sixth, Seventh, Eight, and Tenth Circuits that the ADEA twenty-employee requirement applies to state political subdivisions.  However, on appeal, the Ninth Circuit reversed, accepting the argument that the word “also” in the statute supports the proposition that there are three distinct groups of employers: (1) private employers who employ twenty or more employees; (2) their agents; and (3) state public employers regardless of how many people they employ.

Despite these arguments, the Fire District has a “powerful rebuttal,”—as the Ninth Circuit recognized but ultimately dismissed—because it has the weight of four other circuits on its side, who have all declared 29 U.S.C. § 630(b) to be ambiguous.  The Fire District asserts that the “also means” sentence in § 630(b) “clarifies what the first includes,” and therefore does not create a separate distinct category of public employer that is not subject to the ADEA’s twenty-employee threshold.

The Supreme Court has scheduled argument for October 1, 2018.  Thus, it will not be too long before the legal world can start reading the tea leaves regarding the Justices’ reactions to the parties’ arguments.

If you have any questions or would like more information please contact Brent Bean [email protected] or Koty Newman at [email protected].

Is Wellness Activity Participation Compensable?

Posted on: September 25th, 2018

By: Joyce Mocek

The Department of Labor (DOL) recently issued an opinion letter on whether employees must be compensated under the Fair Labor Standards Act (FLSA) for the time they spend participating in wellness activities.   In this inquiry, the employer advised the DOL that it allowed its employees to participate in wellness programs including “biometric screening,” (ie cholesterol levels, blood pressure and nicotine usage screening), during and outside of regular work hours.  The screening information could result in a decrease in the employee’s health insurance deductible.  The screening was not related to the employee’s job, there were no restrictions on the time an employee could participate in the events, and participation was not required by the employer.

In its opinion letter, the DOL noted the employer received no financial benefit as a result of the employee participation in the activities, and the employee’s voluntary participation predominantly benefited the employee.  The employer did not require the employee to perform any job related duties while they were participating in the activities.  Thus, since the activities predominantly benefited the employee, the DOL opined that the time the employees spent participating in the wellness program did not constitute worktime under the FLSA.  Further, since the employee was relieved of all duties, and not restricted in the amount of time they could participate in the activities, the time spent was considered non-compensable “off  duty” time.

Employers with wellness programs should review their policies concerning such programs, to ensure they follow the guidance recently outlined by the DOL in this opinion letter to avoid potential FLSA issues.

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

Here’s Your Tip Of The Day – Another Appellate Court Defers To DOL On Use Of 80/20 Rule For Tipped Employees

Posted on: September 24th, 2018

By: Brad Adler & Koty Newman

The Ninth Circuit’s recent decision in Marsh v. J. Alexander’s, 2018 U.S. App. LEXIS 26387 (9th Cir. Sep. 18, 2018) is important for employers trying to navigate the FLSA and pay their tipped employees the correct amount.  The Ninth Circuit has joined the Eighth Circuit in deciding that the Department of Labor’s (“DOL”) dual jobs regulation, 29 C.F.R. § 531.56(e) (a/k/a “80/20 rule”), and its interpretation found in the Wage and Hour Division’s Field Operations Handbook are entitled to judicial deference.  This affects what employers must pay their tipped employees in these jurisdictions.

Generally, the federal hourly minimum wage is $7.25 per hour.  However, employers may legally pay their employees in tipped occupations, under federal law, as little as $2.13 per hour.  This is due to the FLSA’s tip credit provision, which permits employers to take a tip credit for employees in tipped occupations, such as serving or bartending.  The tip credit offsets the employer’s duty to pay the minimum wage to their tipped employees.  Even so, when a server’s tipped wages come up short of the hourly minimum wage of $7.25 per hour, the employer has a duty to make up the difference.

But how much is an employer required to pay an employee when that that employee performs some tipped duties and some untipped duties?  With the Ninth Circuit’s recent decision, the wages that an employer must pay an employee who receives tips turns upon whether the employee’s untipped duties are related to the employee’s tipped duties, and how long the employee spends performing each of those duties.

In the case before the Ninth Circuit, Alec Marsh and thirteen other former servers and bartenders challenged their employer’s payment practices under the FLSA.  Plaintiffs alleged that their employers abused the FLSA’s tip credit provision in two ways.  Plaintiffs alleged that employers violated the provision by treating them as tipped employees when they performed work that was unrelated to serving or bartending, such as when they cleaned restrooms or washed windows. Further, plaintiffs alleged that it was a violation for their employers to treat them as tipped employees when they performed untipped tasks related to serving and bartending, such as filling salt and pepper shakers, when those tasks consumed an excess of twenty percent of their time worked during the workweek.

In the Ninth Circuit’s view, the alleged payment practices of plaintiffs’ employers – in essence, crediting an employee’s tips toward the employers’ obligation to pay the full minimum wage for a non-tipped occupation – effectively allowed the employers to treat their employees’ tips as payments to the employers rather than the employees, thereby minimizing the employers’ obligation to pay their employees the full minimum wage for time spent performing work in a non-tipped occupation.  Marsh, 2018 U.S. App. LEXIS 26387, at *6 & n.2.

The Ninth Circuit ultimately determined that this practice is disallowed.  The Ninth Circuit held that the DOL “foreclosed an employer’s ability to engage in this practice by promulgating a dual jobs regulation in 1967, 29 C.F.R. § 531.56(e), and subsequently interpreting that regulation in its 1988 Field Operations Handbook.”  Marsh v. J. Alexander’s, 2018 U.S. App. LEXIS 26387, at *6.  The Court concluded that both the regulation and the DOL’s interpretation of that regulation were entitled to deference.   This result aligns the Ninth Circuit with the Eighth Circuit and its decision in Fast v. Applebee’s Int’l, Inc., 638 F.3d 872 (8th Cir. 2011).

As a result of giving deference to the regulation and its interpretation, the Court concluded that Marsh “stated two claims for relief under the FLSA: first, that he is entitled to the full hourly minimum wage for the substantial time he spent completing related but untipped tasks, defined as more than 20% of his workweek; and second, that he is entitled to the same for time he spent on unrelated tasks.”  Marsh, 2018 U.S. App. LEXIS 26387, at *42.

If you believe that separating employees’ tasks and pay in this manner is unworkable, the Ninth Circuit would disagree.  The Court believes the system is workable because an employer may “keep track of time spent on related tasks by requiring employees to clock in any time spent rolling silverware or cleaning the restaurant before and after the restaurant closes or when business is slow.”  Marsh, 2018 U.S. App. LEXIS 26387, at *38-39.  Of course, it remains to be seen how the other appellate courts will deal with this issue, particularly in light of the arguments asserted in the lawsuit filed by a restaurant group in Texas that the 80/20 rule is invalid (see blog on Texas lawsuit).

Thus, practically speaking, an employer with tipped employees needs to pay careful attention to who is performing tasks unrelated to those tipped occupations, and who dedicates a substantial amount (more than twenty percent) of their working time to tasks that are untipped-yet-related to their tipped occupation.  Because now, payment of those employees is subject to both the DOL’s regulation and interpretation, at least in jurisdictions covered by the Eighth and Ninth Circuits.

If you have any questions or would like more information, please contact Brad Adler at [email protected] or Koty Newman at [email protected].

DOL Guidance On No Fault Attendance Policies

Posted on: September 21st, 2018

By: Joyce Mocek

The Department of Labor (DOL) Wage and Hour Division issued a new opinion letter on an employer’s no-fault attendance policy which effectively froze an employee’s attendance points that had accrued prior to taking the FMLA leave.  The DOL maintained that the no-fault attendance policy did not violate the FMLA if it was applied in a non-discriminatory manner, and applied consistently with other types of leave.

The FMLA prohibits employers from “interfering with, restraining, or denying” an employee’s exercise of FMLA rights, and prohibits employers from “discriminating or retaliating against an employee.. for having exercised or attempted to exercise FMLA rights.”  29 CFR 825.220.  In its opinion letter, the DOL noted that employees cannot accrue points for taking FMLA leave under a no-fault attendance policy.  Further, the FMLA does not entitle an employee to superior benefits simply because they take FMLA leave.

In the opinion letter, the DOL advised that since the employee’s number of accrued points remained frozen during the FMLA leave the employee neither lost a benefit that accrued prior to taking the leave, nor accrued any additional benefit which he or she would not have been otherwise entitled.  The DOL thus advised that this policy would not violate the FMLA.  However, the DOL noted that if the employer counted other types of leave (i.e. active service) under its no-fault policy, then the employer may be discriminating against employees that take FMLA leave as this inconsistency would violate the FMLA.

Employers should be mindful of this recent DOL opinion letter guidance and review their no-fault attendance policy to ensure compliance and consistency with other leave policies.

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