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Thursday, June 23, 2016

“Persuader Rule” Compliance Date Is July 1

By: Thomas Eden

The U.S. Department of Labor (DOL) on March 24 issued regulations that adopt a new interpretation of the "persuader" reporting requirements under the Labor Management Reporting and Disclosure Act. If not enjoined by a court before July 1 (Wednesday a Minnesota Federal Judge ruled in favor of the DOL) the regulations will take effect for agreements entered on or after that date between private sector employers and their outside consultants and lawyers that are for “persuader activity.” The regulations, where applicable, will impose reporting obligations for employers and their attorneys and consultants that are potentially significant.

Under the new regulations, “reportable” persuader activity includes all outside consultant and lawyer activity for covered employers that has a “direct or indirect object” of persuading employees in the exercise of their union organizing rights. Employers, labor consultants, and lawyers, subject to limited exemptions, will be required to report persuader activities and monies for such activities on Forms LM-10 (Employer Report) or LM-20 (Consultant Report). These two forms dovetail to require reporting on another form, Form LM-21 (Consultant Receipts and Disbursements Report).

The current rule similarly requires private sector employers and their labor consultants to report on persuader activity. But an "advice exemption" excludes the activities of attorneys and consultants that are "advisory" to the employer (in other words, as long as the attorneys and consultants do not communicate directly with employees, their activities are covered by the exemption).

The new DOL regulations limit the advice exemption to (1) advice that does not have persuasion of employees as its “object,” and (2) representation in collective bargaining, and legal and administrative proceedings. Any service that does not fall into one of these categories is labeled by the DOL’s new interpretation of the LMRDA as indirect or direct persuader activity and not "advice."

The DOL has clarified that the new regulation will not apply to any agreement entered into before July 1 that would not have resulted in reporting obligations (even though the services and payments for the services occur on or after July 1). Thus, agreements made before July 1 are “grandfathered” under the current rule.

As might be expected, at least three lawsuits seeking to block the “Persuader Rule” were filed shortly after the DOL issued the rule in March. Links to copies of all three lawsuits are available here. The outcome of those lawsuits in the near and longer terms is uncertain, and the DOL is not backing down. Private sector employers using outside consultants or attorneys to handle ANY labor relations matters should stay up to date and in close communication with their lawyers. We will keep you posted as events unfold.

Common sense counsel: an employer's failure to take action now to have a written engagement letter with a management labor firm to advise on what the DOL calls persuader activities will severely hamper your ability to fend off a Union Campaign in the future.  


Tommy Eden is a management labor attorney working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a member of the ABA Section of Labor and Employment Law. He is offering no obligations engagement letters to those making a request by June 30, 2016 and can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com

Thursday, June 16, 2016

Conducting Post-Accident Drug Tests Under OSHA’s New Reasonable Reporting Procedure Regulation: Four Risk Reduction Strategies

By: Thomas Eden

      On August 10, 2016, OSHA will begin enforcing its new regulation requiring employers to have a “reasonable procedure” for employees to report work-related injuries and illnesses.  The rationale for this new requirement is that employees should not be punished in any way for exercising their right under the Occupational Safety and Health Act to report a work-related injury.  Any adverse action that is taken because an employee exercises this right to report is viewed by OSHA as a violation of §11(c) of the OSH Act, and as of August 10, 2016, of §1904.35 as well. 

      Under this new regulation, §1904.35(b)(1), a procedure is not reasonable “if it would deter or discourage a reasonable employee from accurately reporting a workplace injury or illness.”  Although the regulation itself does not mention drug testing, the Agency made clear in the Preamble to the new rule published in the Federal Register on May 12, 2016, that it believes “blanket post-injury drug testing policies deter proper reporting” and would thus be subject to OSHA citation. 

     OSHA’s interpretation of its new reporting regulation is generating confusion among employers who are concerned that they will be prohibited from conducting any post-accident drug tests. If an employer’s motivation for having post-accident drug testing is for some valid reason other than discouraging employees from reporting injuries and illnesses, most commentators believe the policy will not run afoul of §1904.35.  For example, many states, including Alabama, have Drug Free Workplace (DFWP) statutes that offer employers a reduction in their worker’s compensation insurance premiums if they adopt a program in compliance with the terms of the statute, that includes post-accident drug testing. Therefore, consider these 4 strategies:

1st risk reduction strategy—make sure your written policy is in compliance with the Alabama DFWP and secure a letter of acceptance from the Alabama DOL;

2nd risk reduction strategy—obtain a written document from your Work Comp carrier, or fund, that you are receiving a premium discount for a program that includes post-accident drug testing;

3rd risk reduction strategy—like the DOT post-accident testing regulations. employers should give consideration to expanding their post-accident definition as evidence that it is not a blanket test, but based on specific objective safety related triggering events; and

4th risk reduction strategyif an employer has a post-accident reasonable suspicion checklist for supervisors, such would most likely prove on its face that the post-accident test was not a blanket test. 

Common Sense Counsel: In August, OSHA will be providing some guidance in the form of Frequently Asked Questions, and based on what we’re hearing informally, those FAQs will allow post-accident drug testing under a State Drug-Free Workplace Policy. Consider these four risk reduction strategies as we await the FAQ’s so your program will not be a workplace casualty.

Tommy Eden is a partner working out of the Constangy, Brooks, 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. The above information was taken from a more extensive Client Alert published by his law firm’s OSHA Practice Group. Tommy can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com


Friday, June 10, 2016

The FLSA Half-Time Salary Alternative



By: Thomas Eden

From my presentations to HR professionals thus far, there is fear and gnashing of teeth surrounding the 100% increase in the threshold for meeting the Department of Labor Fair LaborStandard Act (FLSA) White Collar Exemption test of $47,476.00 annual salarythat takes effect on December 1, 2016.  

I thought it a good time to reveal to my readers the “The Fluctuating Rules for the Fluctuating Workweek” currently allowed under the FLSA as an alternative for those who will not meet the new salary level test. As you will see, there is a clear advantage to paying your newly christened salaried non-exempt employees via the fluctuating workweek method. However, you want to make sure you meet the FLSA’s four-pronged test to qualify. Paying a salary does not render an employee automatically exempt from the FLSA’s overtime requirements.

Employers have two very different options to pay salaried non-exempt employees:

First Option: under the standard method, you calculate the employee‘s weekly rate based on the salary divided by the number of hours worked that week, and then pay the employee 1.5 times that rate for all overtime hours. For Example, if a non-exempt employee earns a salary of $600 a week, and works 50 hours in a week, the employee would earn an additional $18 per hours worked over 40 ($600 / 50 = $12 per hour base weekly rate x 1.5 = overtime premium of $180). Thus, in this week, the employee would earn an additional $180 for the 10 hours of overtime, rendering their total pay for that week $780, not their customary $600 exempt salary.

Second Option: under the fluctuating workweek method, if during the course of 4 weeks this employee works 40, 37.5, 50, and 48 hours, the regular hourly rate of pay in each of these weeks is $15.00, $16.00, $12.00, and $12.50, respectively. Since the employee has already received straight-time compensation on a salary basis for all hours worked (assuming up to 50 in a workweek), only additional half-time pay is due. For the first week the employee is entitled to be paid $600; for the second week $600; for the third week $660 ($600 plus 10 hours at $6.00 or 40 hours at $12.00 plus 10 hours at $18.00); for the fourth week $650 ($600 plus 8 hours at $6.25, or 40 hours at $12.50 plus 8 hours at $18.75). Example taken directly from 29 CFR 778.114.

Common Sense Counsel: There is a clear economic advantage to employers using the fluctuating workweek calculation to pay overtime to salaried non-exempt employees. Under the FLSA, however, an employer cannot unilaterally implement the fluctuating workweek calculation. Instead, to pay salaried, non-exempt employees using this method, you must meet these four elements:

•  the employee’s hours must fluctuate from week to week;

• the employee must receive a fixed salary that does not vary with the number of hours worked during the week (excluding overtime premiums);

•  the fixed amount must be sufficient to provide compensation every week at a regular rate that is at least equal to the minimum wage; and

• the employer and employee must share a “clear mutual understanding” that the employer will pay that fixed salary regardless of the number of hours worked (best in a written document signed by the employee).

Under the FLSA, however, an employer cannot unilaterally implement the fluctuating workweek calculation. Employers realize a 66 percent savings on your overtime pay using this method. Do it correctly, otherwise your efforts to save some dollars in overtime could result in a costlier wage-and-hour lawsuit.

Tommy Eden is a partner working out of the Constangy, Brooks, 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 teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com
with Links on Blog. Send an email to cjohnson@constangy.com if you wish to be placed on the free Constangy newsletter list.




Friday, June 3, 2016

When the Litigation Clock Starts

By: Thomas Eden

Marvin Green, a black male, worked for the Postal Service for 35 years. In 2008, he was serving as the postmaster for Englewood, Colorado when he applied for a promotion to the vacant postmaster position in nearby Boulder. When Green was passed over he claimed race discrimination. At that point Green’s relations with his supervisors crumbled according to his court complaint. Tensions peaked on December 11, 2009, when two of Green’s supervisors accused him of intentionally delaying the mail, a criminal offense.

They informed Green that the Postal Service’s Office of the Inspector General (OIG) was investigating the charge and that OIG agents had arrived to interview him as part of their investigation. After Green met with the OIG agents, his supervisors gave him a letter reassigning him to off-duty status until the matter was resolved. Even though the OIG agents reported to Green’s supervisors that no further investigation was warranted, the supervisors continued to represent to Green that “the OIG is all over this” and that the “criminal” charge “could
be a life changer.”

On December 16, 2009, Green and the Postal Service signed an agreement where the Postal Service promised not to pursue criminal charges in exchange for Green’s promise to leave
his post in Englewood.

On March 22, 41 days after submitting his resignation paperwork to the Postal Service on February 9, but 96 days after signing the settlement agreement on December 16, Green contacted an Equal Employment Opportunity (EEO) counselor to report an unlawful constructive discharge. He contended that his supervisors had threatened criminal charges and negotiated the resulting agreement. His case was dismissed by the District Court as not being timely filed.

Last week, the U.S. Supreme Court issued a decision reinstating Green’s case and resolving disagreements over the question of when a constructive discharge claim accrues. The lower courts didn’t agree on when the clock should start ticking on claims by employees that they were forced to quit, creating uncertainty for plaintiffs who faced the possibility that their claims would be barred by the statute of limitations if they didn’t sue soon enough.

As with claims of wrongful discharge, the clock will start running when the employee is notified, or gives notice of termination, not necessarily the last day of work. Justice Sotomayor wrote: “Likewise, here, we hold that a constructive-discharge claim accrues and the limitations period begins to run when the employee gives notice of his resignation, not on the effective date of that resignation.”

Common Sense Counsel: Sometimes determining the “last discriminatory act” can be difficult and murky. The Supreme Court’s rule is easy to follow and a plaintiff will still have a strong incentive to act promptly. As Justice Sotomayor noted, a constructive discharge claim “requires proof of a causal link between the allegedly intolerable conditions and the resignation.” The longer the employee waits to resign (after the employer’s last discriminatory act), the weaker that showing of “intolerability” becomes.

Tommy Eden is a partner working out of the Constangy, Brooks, 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 teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com