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Friday, August 28, 2015

NLRB Cripples Temporary Staffing Companies

By: Thomas Eden

Yesterday the National Labor Relations Board (NLRB) issued its most significant decision in 35 years when it expansively broadened the definition of who is a joint-employer to include temporary staffing companies. In Browning-Ferris Industries of California 362 NLRB No. 186 (August 27, 2015), the NLRB held that two or more otherwise unrelated employers may be found to be a joint-employer of the same employees under the  National Labor Relations Act (NLRA) “if they share or codetermine those matters governing the essential terms and conditions of employment.”

The International Brotherhood of Teamsters, Local 350 located in California filed a representation petition seeking to represent sorters, housekeepers, and screen cleaners employed by Leadpoint, a subcontractor of waste recycler Browning-Ferris performing sorting, screen cleaning, and housekeeping work. The Union contended that Browning-Ferris was a joint employer with Leadpoint. An election was held to determine whether Leadpoint’s employees wanted to be represented by Local 350, but the ballots were impounded after the election because the Union filed a request for review by the NLRB on the joint employer issue. The NLRB granted the petition for review and issued its decision yesterday in favor of Local 350.

Before yesterday, the NLRB’s joint employer doctrine was only applied when one employer could “meaningfully affect matters relating to the employment relationship, such as hiring, firing, discipline, supervision and direction” of the staffing company. That is no longer the law according to the NLRB as of today. Now a Company must be must be prepared to defend against union organizing drives and unfair labor practice charges filed not only by their own employees, but against similar claims naming their temporary staffing service, subcontractors, franchisees and other entities who contract with them.

Every sector of the economy is potentially affected by this decision. The most obvious include:
Any business that regularly uses a management company to staff and operate its business;
General contractors;
Any manufacturer that uses a staffing agency to obtain additional or temporary help; and
Any franchisor that contracts with others using a franchise agreements.

Common Sense Counsel: While a U.S. Circuit Court of Appeals challenge is ready to be filed, there is no simple solution to deal with this decision. The appeal for manufacturers to use temporary staffing is greatly diminished by this decision. Fully expect the EEOC, OFCCP, DOL, etc., to eventually adopt this same joint-employer Obama Administrative approach. However, you can be proactive by taking these steps:
Critically have all your service agreements reviewed;
Make sure they have their own employment policies and employee handbooks;
Look at how the work performed by your employees is different from, or the same as, the work performed by the staffing employees;
Look at pay, working conditions, type of work, etc, to see if they are the same or uniquely different; and
Include an expansive indemnification clause in your contract.

Tommy Eden is a partner working out of the Constangy, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901. Blog at and follow on twitter tommyeden3

Thursday, August 27, 2015

OSHA’s Two Lightning Strikes Hit Alabama Roofing Contractor

By: Thomas Eden

Marcus Borden, a Russellville steel and roofing contractor, on March 18, 2013, was supervising a roofing crew of five men in Cordova, Alabama when a severe thunderstorm occurred. Three of the five men were seriously injured in the storm. One worker was thrown against the edge of a new metal roof and suffered a left arm amputation, a second was thrown across the roof and suffered an injured shoulder, and the third worker became wrapped in a sheet of metal, managed to escape, but was carried by the momentum over the roof's edge and fell 30 feet to the ground. The worker broke his wrists, ribs, tailbone and pelvis. None of the workers had been provided with OSHA mandated fall protection equipment. None of them were tied-off to the roof at the time of the accident or had a means to exit the roof quickly.

An OSHA inspector cited Borden for six safety violations following the incident, including a willful citation for failing to provide workers with fall protection while working within 6 feet of an open edge that was 30 feet above the ground. OSHA also cited Borden for four serious violations for exposing workers to severe weather conditions and not securing metal decking during inclement weather conditions. One other violation was cited for failing to notify OSHA about the workers being admitted to the hospital due to a work-related incident.

When questioned by the Inspector, Borden stated that he had been present on the job site on the day of the accident and that he had obtained personal fall arrest equipment to protect workers from falls on March 13, 2013, when actually Borden had retained the equipment on March 18, 2013, after the incident occurred. Borden also claimed that employees had been tied off when he knew, in fact, they were not.

Borden contested OSHA's citations but later settled the case, agreeing to all violations as cited and a penalty of $55,000. The settlement was approved by the Occupational Safety and Health Review Commission.

On April 6, 2015, the U.S. Department of Justice charged Marcus Borden with making false statements and lying to an OSHA Investigator. Borden pleaded guilty to one count of making false statements on May 13, 2015. On August 6 he was sentenced by a Birmingham Federal Judge to three years of supervised probation and must complete 30 hours of community service.

Common Sense Counsel: Keep in mind these 7 Tips When OSHA Comes Knocking: 1) Don’t Lie; 2) Have at least one designated person trained on how to interact with the Inspector; 3) Ask why OSHA is there; 4) Shadow the Inspector and take similar pictures; 5) Prepare your workers for interviews; 6) Know your rights; and 7) Take great notes during the closing conference.

Tommy Eden is a partner working out of the Constangy, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901. Blog at and follow on twitter tommyeden3

Friday, August 21, 2015

No Good Deed Goes Unpunished

By: Thomas Eden

A collective class of Publix Super Markets Inc. workers filed a Fair Labor Standards Act (FLSA) Complaint in Tennessee federal court claiming Publix does not include overtime pay consideration in holiday bonuses and other employee benefits. Publix has a quarterly profit sharing bonus the company gives to hourly employees, a Christmas bonus, paid time for six holidays a year, a Prevention Plus Award for reviewing loss-prevention materials, and tuition reimbursement. The issue is important because under the FLSA, the weekly overtime pay calculation is based on other compensation received by the employee, that is not a gift, but measured by or dependent on hours worked, production, or efficiency. The extra compensation in turn increases the “regular rate” upon which overtime is computed. 

On Wednesday of this week, the Judge ruled that Publix must include holiday pay in employees’ regular rates for overtime calculations since it is not a payment made for a period when no work is performed. However, the judge said the retail bonus, holiday bonus, tuition reimbursement, Prevention Plus Award, and various prizes and awards are excludable from the regular rate calculation. 

The Judge reasoned that, “Publix’s plan requires the employee to work on the holiday, if scheduled, in order to receive the holiday pay. The fact that some employees are not scheduled for work on the holiday (or are excused from work for various reasons) and so receive pay for the holiday even though they did not work does not render the payments excludable from the regular rate.” 

The Judge also found critical that upon receipt of the Handbook, each Publix employee was required to sign a form acknowledging receipt of the Handbook which explicitly states, “This handbook is not a contract of employment” and that “Publix reserves the right to modify, amend, eliminate, or deviate from any or all policies, procedures and practices without prior notice....” Based on these explicit disclaimers the Judge held that that the handbook did not create contractual rights in this case but rendered the other benefits a gift excludable from the overtime rate calculations under the FLSA.

The Judge entered judgment in favor of the Publix employees on the inclusion of holiday pay claim and he will determine damages and attorney fees.

Common Sense Counsel: This continues a trend of plaintiff-side lawyers launching class and collective actions based on technical violations when the employer is trying to do a good deed for it employees. FLSA violations are the most common and costly collective action lawsuit being brought and employers are paying out millions in settlements and attorney fees. With the FLSA self help, to determine if you are in compliance is simply not a legal option and an ounce of prevention with a wage and hour audit is the only risk reduction strategy. The top three most costly violations are: 1) Misclassification of Exempt Employees; 2) Not Counting Every Hour Worked; and; 3) Not Calculating Overtime Pay the FLSA way. 

Tommy Eden is a partner working out of the Constangy, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901. Blog at

Friday, August 14, 2015

The Old Short Blond Girl Wins

By: Thomas Eden

Heartland Employment Services, LLC in Missouri employed Cynthia Thomas as an account liaison from May 2010 until she was terminated on June 24, 2011, at age fifty-three. Thomas challenged the decision alleging an age-based animus (state of mind), against a hospice administrator for Heartland.

According to testimony of a Heartland employee, the supervisor stated in June or July 2011 "that older people didn't work as fast or were as productive as younger people," and made "comments about having fresh blood, younger employees." The supervisor referred to Thomas as "the old short blond girl," and soon after her discharge, he told a Heartland client who expressed concern about Thomas's departure that "he likes to keep himself surrounded with young people." Although he denied that he supervised Thomas or had authority to discharge her, the regional human resources manager for Heartland testified that this supervisor was "an indirect supervisor" of the account liaison personnel, and would have been "perfectly within his rights to have input on whether or not Cynthia Thomas was terminated."

Thomas's position as an account liaison included traveling to establish and maintain relationships with Heartland clients. Heartland permitted Thomas to claim reimbursement for the resulting mileage. Later her mileage claims were evaluated and compared to weekly call plans that Thomas prepared to describe her projected travel for an upcoming week. The reviewers determined that Thomas had claimed reimbursement for more miles than the distance between the calls listed on the call plans for each of the three weeks. The group of three, including her supervisor, concluded that Thomas had falsified her reimbursement claims, and collectively believed that Thomas's termination was required.

They then all met with Thomas to discharge her. When confronted, Thomas responded that she kept records that would explain discrepancies between the claimed mileage and the weekly call plans. According to Thomas, she took additional trips that were not included as projected travel in the call plans, and her mileage claims were truthful and accurate.

The U.S. District Court Judge concluded that Thomas’s supervisor was not a decision-maker or closely involved in the termination decision, and that his age-related comments were thus considered "stray remarks, " and granted summary judgment to Heartland dismissing the age discrimination case. However, this week the U.S. 8th Circuit Court of Appeal viewed the "old short blond girl" in the light most favorable to Thomas, and concluded that they were sufficiently related to Thomas and to the decisional process to constitute direct evidence of age discrimination to get her case before a jury.

Common Sense Counsel: Direct evidence of age discrimination constitutes an expression typically made by the decision maker such as “this old dog just won’t hunt anymore,” or this employee “has been around since Christ was a baby,” or “Old Farts,” or “The Old Short Blond Girl.” Accordingly, it is critical to train your employees and managers never to use age related expressions or stereotyping of employees and your company should not be an ADEA casualty.

Tommy Eden is a partner working out of the Constangy, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901. Blog at

Sunday, August 9, 2015

Sharing Economy Hits California Speed Bump

By Tommy Eden

In some peoples opinion the sharing economy represented by the likes of ridesharing companies like Uber and Lyft, grocery delivery service Instacart, courier service Postmates, and cleaning service Handybook are getting sued to death in California. All of the suits are over these companies’s classification of drivers, or contractors, as independent contractors instead of employees. In the case of Uber, its court case is at the stage where a judge is determining whether 160,000 drivers can sue collectively through a class action. Uber is facing charges of misclassifying workers, which will have implications for the emerging class of on-demand services in the sharing economy.

Uber relies on an army of independent contractors to rideshare, taking a 15% to 20% commission. It’s part of the "gig economy," a much-hyped new class of the service industry where workers are expected to operate like mini-businesses.

In Uber’s view, the company is merely a “technology platform” that connects drivers and passengers. Each driver gets to set their own hours and even choose whom they share a ride with. In this case Uber provided the judge testimonials of more than 400 drivers who expressed how much they enjoy and count on the flexibility they have as Uber drivers. The 400 drivers is still only 0.0025% of all 160,000 drivers in California who have ever worked for Uber, so it is very difficult to call them a class.

How much control Uber exerts over its drivers is a key legal question in the case. Uber’s claims that its contracts with drivers are simply licensing agreements while other claim they are employment contracts. However, Uber takes a certain amount of control when it fires them for low ratings or changes their fare prices.

Class action lawsuits are a huge threat to the gig economy. Not being responsible for employees’ taxes and benefits allows companies to operate with 20% to 30% less in labor costs than the brick and mortar competition, leading to over the top numbers like Uber’s $40 billion valuation or Instacart’s latest $220 million round of funding. Lose this workforce structure, either by regulation or a wave of class-action lawsuits, and there goes the gig economy.

Common Sense Counsel: This is an area of the law where Fair Labor Standard Act laws written in the 1930’s do not align with technology and innovation. Keep a watchful eye if these sharing companies can survive dead by lawsuit or regulation. Many believe that the DOL issued its July 15 employee misclassification guidance to addressing the sharing economy.

Tommy Eden is a partner working out of the Constangy, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law and serves on the Board of Directors for the East Alabama SHRM Chapter. He can be contacted at or 334-246-2901. Blog at with Links to worksheet and regulations on Blog. 

Wednesday, August 5, 2015

Webinar: 7 Drug-Testing Litigation Landmines for Public Employers, and How to Avoid Them: Constangy, Brooks, Smith & Prophete, LLP

Presenters: Thomas M. Eden, IIIW. Jonathan Martin, II

August 25, 2015
RSVP for Event
Attend this webinar to learn about seven drug-testing litigation landmines for public employers, based on recent court decisions. Failure to sidestep the landmines can result in costly mistakes for public employers, and end careers for the individual decision makers.
Key learning objectives of the presentation are as follows:
1.   The importance of supervisor training
2.   Critical steps to take when developing a public employer drug testing policy
3. Implementing your drug testing policy without violating employees’ Constitutional rights                                     
4.   How to properly handle the employee who voluntarily comes forward
5. What supervisors need to know about personal liability for Constitutional violations.                                       
Constangy Partners Tommy Eden and Jonathan Martin will present this fast-paced and entertaining webinar. Tommy and Jonathan both work with private and public employers nationwide to help them solve some of the most challenging drug-free workplace issues. 
August 25, 2015
12:00 - 1:00 p.m. Eastern


For additional information, please contact Kian Wint at