In a split decision, the Fifth Circuit Court of Appeals has rejected the view of the National Labor Relations Board (the Board). According to the Court’s majority opinion, an arbitration agreement that requires employees to arbitrate all employment disputes but restricts the arbitration proceedings to individual arbitrations only (i.e., not allowing class or collective arbitrations) does not violate Section 7 of the National Labor Relations Act. D. R. Horton v. National Labor Relations Board (December 3, 2013). The Board is considering an appeal.
Why is this important? Continue Reading
With a growing number of employers using direct deposit to pay their employees instead of paper checks (or even rarer, actual cash!), employers need to be aware of restrictions on the use of debit cards for such payments. Since some employees may not have checking accounts, employers may provide them with a “debit card” – usually issued by a local banking institution – to which the employee’s pay is credited on each payroll date. The employee can then use the card like “cash” for any purchases.
The Consumer Financial Protection Bureau (CFPB) recently issued a bulletin (No. 2013-10) reminding employers that they cannot force their employees to receive wages on a payroll card. The bulletin also pointed out other consumer protections that may apply to payroll cards such as fee disclosure, access to account history, limited liability for unauthorized use, and error resolution rights. The CFPB indicated that it had received reports of employees using payroll cards who complained of unexpected fees for using automatic teller machines or checking the balance on their card.
The CFPB pointed out that employees must have “options” when it comes to how they receive their wages. Under the Federal Electronic Fund Transfer Act (EFTA), payroll card users must be provided the following protections:
- The right to receive written disclosure of fees imposed for electronic transfers of funds to and from the cards;
- Access to their account history, either through periodic statements or telephone and internet access to their 60-day account histories;
- Limited liability for unauthorized use of the card; and
- The right to have the financial institution respond to their timely report of an error.
Most states, including Tennessee, also have laws concerning the manner in which employers may pay wages. Some states, including Tennessee, address the use of debit cards for payment of wages.
T.C.A. §50-2-103 (sometimes referred to as the Tennessee Wage Payment Statute), specifically permits payment through the electronic automated transfer of funds as well as credit to a prepaid debit card. T.C.A. § 50-2-103(e)(2) requires that an employer who chooses to compensate its employees using prepaid debit cards must also give employees the choice of being paid by electronic transfer. The employer must explain the system to the employee and provide full written disclosure of any applicable fees associated with the prepaid debit card. If the employee still chooses not to designate an account at a financial institution for the electronic transfer of payroll funds, then the employer may arrange to pay the employee by prepaid debit card. The employer must also ensure that each employee has the ability to make at least one withdrawal or transfer from the prepaid debit card per pay period without cost to the employee for any amount contained on the card.
In an opinion issued in 1986 upholding the payment of wages by direct deposit, the Attorney General referred to the EFTA which prohibits an employer from forcing an employee to become a member of a specific credit union in order to receive payment of wages. That opinion held that an employee can be required to choose from a list of financial institutions selected by the employer.
As more and more employees even in rural areas generally maintain checking accounts in one of their local financial institutions, the problem is less prevalent than it was in previous years, but there are still instances where employees do not have a checking account into which their “pay check” can be deposited directly. In such instances, it is appropriate for the employer to provide the employee with a debit card, but the employee should be given some choice in which institution issues the card, and be provided with the information required under the EFTA.
A federal circuit court’s recent ruling provides more evidence of a prevalent employment law trend that has developed in the last few decades. The trend? Candid interactive communication about an employee’s rights and an employer’s responsibilities.
Over the past few decades, attentive employers have seen courts favor those who communicate forthrightly concerns or issues and correspondingly disfavor those who do not. While there are anecdotal exceptions, we have seen this trend in the following: Continue Reading
“Micro-unit” is the term used to refer to a small portion of the total number of employees at a particular worksite which a labor union seeks to represent. Recent decisions by the National Labor Relations Board (“NLRB” or the “Board”) have raised employers’ concerns that unions will focus organizational efforts on such small groups, or “units” of employees. Smaller units often are easier for a union to organize; if the union is successful in convincing a small unit to choose union representation, the employer will face bargaining with one or more unions over small portions of its workforce, creating numerous operational inefficiencies at the very least. Continue Reading
In 2011, the Department of Labor (DOL) initiated a crackdown on employers who misclassify employees as independent contractors. Employers are not required to withhold income taxes from an independent contractor’s pay, and they do not have to pay FICA (Social Security and Medicare) and FUTA (federal unemployment) taxes for the contractor. Employers also do not contribute to state programs such as unemployment insurance and workers’ compensation funds for independent contractors. Misclassification denies workers access to benefits and protections, such as Family and Medical Leave, overtime, minimum wage, unemployment insurance, and certain employer-provided benefits like health insurance and retirement plans that are available only to qualifying employees.
Since the Misclassification Initiative’s introduction in 2011, the DOL has hired more than 350 new investigators in the Wage and Hour Division alone. As these investigators have completed training and integrated into the Department, we have seen an uptick in investigations. The DOL’s Misclassification Initiative includes a Memorandum of Understanding (MOU) with the IRS that states the agencies will share information regarding misclassified employees. The DOL has MOU’s with several state agencies, as well. At this time, Tennessee has not entered into such an agreement with the DOL.
What Does This Mean? Continue Reading
The Supreme Court recently narrowed the definition of “supervisor” in harassment suits. In Vance v. Ball State University the Court defined supervisors as those empowered by the employer to take tangible employment actions against the alleged victim. Previously those that directed employees’ day-to-day activities were considered supervisors. While seemingly mere “word games,” this decision will have an important impact on employment litigation.
As news of the decision made its way around the web, some commentators misconstrued the decision by stating or implying employers face liability only if a supervisor engages in harassment. Such a construction is flat-out wrong. There are three standards of liability in harassment cases brought under Title VII:
- strict liability for supervisor harassment: harassment that results in a tangible employment action (i.e., hiring, firing, failing to promote, reassignment with significantly different responsibilities, or a decision causing a significant change in benefits);
- vicarious liability for supervisor harassment: harassment that does not result in a tangible employment action, but places the burden on the employer to establish a defense; or
- direct liability for co-worker harassment: harassment for which the employer has been negligent in addressing.
The Vance ruling simply defines who fits into which scenario. Resolving a circuit split in favor of a narrow definition “supervisor,” the Court limited the number of people who could subject their employers to strict or vicarious liability. The negligence standard now applies in a greater number of instances, thus placing the burden on the plaintiff employee to establish not only a prima facie case of harassment, but also that an employer has been negligent in addressing that harassment.
The case is good news for employers: fewer of their employees can subject them to vicarious liability. The Supreme Court’s narrow definition of supervisor means fewer employees will be considered supervisors, and more harassment scenarios will involve co-workers. As noted, these cases require claimants to show an employer has been negligent in addressing that harassment. The Vance decision, however, should not be wrung for more than it can give. The Court was clear that simply re-labeling positions will not protect employers from vicarious liability. Those employees who have the knowledge and judgment necessary for taking an adverse employment action will likely be considered supervisors, regardless of their title or whether others officially take the action while relying upon that knowledge and judgment. Additionally, workers given some authority over others, while continuing to work closely with their co-workers, are often the employees charged with implementing employer policies and addressing potentially-harmful situations as they occur. Employers should continue to invest in training and relationship-building with these employees so that potential issues can be identified and resolved as quickly as possible.
Finally, this issue may not be resolved. The dissent called upon Congress to correct the Court’s “wayward interpretation of Title VII” as it had in the past. Keep apprised of developments in the law and stay in contact with your employment attorneys who will be watching for action in Congress, interpretation of the decision by lower courts and guidance from the EEOC. Continue Reading
The U.S. Supreme Court has agreed to review whether the National Labor Relations Board (“NLRB”) has a sufficient number of members to issue rulings. The Supreme Court will review the decision of the District of Columbia Circuit in NLRB v. Noel Canning Div. of Noel Corp.. There, the D.C. Circuit ruled that the NLRB lacked the necessary three-member quorum to decide an unfair labor practice case. The D.C. Circuit determined that President Obama’s recess appointments of two of the three members of the NLRB panel occurred when there was not a true “recess,” making the appointments unconstitutional. The decision has the potential to impact hundreds of NLRB decisions dating back to at least January 2012 as well as the NLRB’s recent expedited election rulemaking discussed in more detail below. Continue Reading
The Supreme Court’s Defense of Marriage Act (“DOMA”) ruling will impact the “spouse” definition in the Family and Medical Leave Act (“FMLA”) (among other extensive impacts in the employment law and employment benefits industry). Employers can expect the Department of Labor to issue, relatively soon, some guidance on the definition of spouse in light of the DOMA ruling.
It is anticipated that the definition of spouse will look to the state of celebration – that is, the state where the same-sex union was performed, or what state issued the license, regardless of the state of residence of the couple. But, until the guidance is issued, what should an employer do “in the meantime?” Continue Reading
On June 24, the U.S. Supreme Court agreed to consider whether a neutrality agreement between Hollywood Greyhound Track Inc. d/b/a Mardi Gras Gaming (“Mardi Gras”) and UNITE HERE Local 355 (“UNITE HERE”) violated Section 302 of the Labor Management Relations Act (“LMRA”).
A “neutrality agreement” is an agreement between an employer and a union by which the employer agrees not to campaign against a union’s attempt to organize its workforce. In the neutrality agreement at issue in Mulhall v. UNITE HERE Local 355, Mardi Gras agreed to give UNITE HERE access to nonpublic work areas to organize employees during work hours, provide the union with the names and home addresses of employees, and remain neutral during UNITE HERE’s attempts to organize. In exchange, UNITE HERE agreed to “lend financial support to a ballot initiative regarding casino gaming” and “refrain from picketing, boycotting, striking, or undertaking other economic activity against Mardi Gras,” should the majority of Mardi Gras’ employees recognize UNITE HERE as their exclusive bargaining representative. Continue Reading
A trucking company has a practice of not returning any trucker to a driver position if that trucker has admitted to being an alcoholic, even if the trucker completes a treatment program. The EEOC sued on behalf of a trucker and challenged this practice. In this instance, however, the trucker did not complete a treatment program. He explained that he did not complete a program since it would be futile – he could not get his job back anyway.
In a recent ruling, a District Judge in Arkansas ruled that the trucking company’s practice of automatic disqualification of the alcoholic trucker violated the Americans with Disabilities Act (“ADA”). The Court ruled that a jury will have to decide the merits of the specific driver’s claim, but the Court entered an injunction against the trucking company from further use of its practice. EEOC v. Old Dominion Freight Line, Inc. (W.D. Ark. June 24, 2013) found here. Continue Reading