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Friday, February 24, 2017

What Not To Do During a Wage Hour Investigation


By Thomas Eden

El Tequila, LLC owned by Carlos Aguirre, is a restaurant with four locations in the State of Oklahoma, which was subject to a series of investigations by the Department of Labor (DOL) Wage and Hour Division in response to employee wage complaints. The Tenth Circuit Court of Appeals issued an opinion in early February 2017 detailing misconduct by Aguirre as he instructed employees to lie during interviews, provided falsified “white-out” and “edited” employee time records to the DOL investigators. By the government’s calculations, Aguirre owed the employees over $600,000 in back wages.

More specifically, the Court found that “the records Mr. Aguirre provided during the … Investigation, known as middle sheets, were based on his false summaries of how many hours employees worked, rather than actual clock-in and clock-out times…. Mr. Aguirre withheld [the actual] time sheets during the … Investigation, and many time entries had been “white-out” and edited to conform with the Federal Labor Standards Act (FLSA).”

At trial “employees revealed that Mr. Aguirre instructed them to lie in their interviews during the … Investigation.” Subsequently, “employees told the WHD investigator that they had been working from 60 to 70 hours per week and were paid a salary…. They said the time sheets were not accurate, and ‘that they were forced to sign’ them.” During the litigation, Mr. Aguirre admitted that the time sheets and middle sheets were not correct, and that he “told his employees what to say in their interviews.”

Under the FLSA, employees are also entitled to liquidated damages as a multiplier of their back pay wage claim; an additional two years or three years for a willful violation. The government argued that Aguirre willfully violated the FLSA by: (1) falsifying payroll records, (2) withholding records requested by the WHD investigator, (3) lying to the WHD investigator and instructing his employees to lie, (4) recklessly disregarding his duty to determine whether it was violating the FLSA, (5) recklessly disregarding FLSA requirements, (6) and recklessly disregarding his duty to keep accurate records.

The Tenth Circuit concluded that the “evidence indicates that Mr. Aguirre took affirmative steps to create the appearance that El Tequila complied with the FLSA, including adjusting records to suggest that workers were properly paid, withholding documents, misrepresenting how employees were paid, and instructing employees to do the same. A reasonable jury could not conclude El Tequila’s violations were negligent” but willful. The Tenth Circuit affirmed a $2 Million Dollar Willful judgment against Aguirre and his restaurant. The FLSA allows for personal liability of the owner. 

Common Sense Counsel: Don’t lie during a FLSA Investigation interview and don’t use white-out to edit time records. Having a sit down wage and hour audit is the only way to make sure you are in compliance with the multitude of wage and hour regulations. 

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and a Contributor to the ABA 2016 FLSA Supplement published by Bloomberg BNA. He can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com







Friday, February 17, 2017

Employers How To Handle “Day Without” Protest Strikes


 By Thomas Eden

As politics spill over into the workplace, this is common sense counsel on how to react:

Question: This week we’ve had immigrant strikes, and there has been talk recently about a “Day Without a Woman” strike that might take place next month. What recourse does an employer have? Would a strike like this be “protected concerted activity,” which means that the employer might not be able to take adverse employment action against a participant?

Answer: It depends. The National Labor Relations Act (NLRA) defines protected concerted activity as any action taken by two or more employees for the mutual aid and protection of workers (or action taken by one employee on behalf of other employees). Protected actions must somehow relate to the terms and conditions of their employment. Practically, this can mean discussing their wages or working conditions, bringing complaints to management’s attention, or taking part in organizing activities. It can also mean airing their grievances publicly — for example, by posting negative information about their employer online, engaging in a strike, or speaking to news organizations.

As a corollary, while the Act gives the employees these rights, it also generally restricts employers from taking any disciplinary action against employees for exercising them. Thus, when an employer restrains an employee from engaging in protected concerted activity with discipline or threat of discipline, it generally commits an unfair labor practice unless the right to engage in the activity has been waived, for example, by a no-strike provision in a collective bargaining agreement. That can eventually end you up before the National Labor Relations Board.

Question: If an employee wanted to take the day off work to participate in the strike and gave the employer reasonable notice, and maybe even had Paid Time Off or vacation time available, should the employer let the employee take the day off for that purpose? Even if the employer disapproves of the idea of a “strike”?

Answer: If the employer would normally allow an employee to take the day off under its policy, then it would in all likelihood need to allow it for the strike, as well. Otherwise, the employer runs the risk of being accused of discriminatorily applying its policies and procedures, in a direct effort to prevent an employee from engaging in protected concerted activity.

Question: Does it make any difference if the employee taking the day off (either with or without notice) is a member of management, as opposed to a non-management employee?

Answer: The NLRA applies only to non-supervisory employees, and accordingly, supervisors (and managers) are not entitled to the Act’s protections.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and can be contacted at teden@constangy.com or 334-246-2901. This advice was given by my Partner Leigh Tyson in a bulletin to all Constangy clients this week. Blog at www.alabamaatwork.com with link to full bulletin.


Thursday, February 9, 2017

Canada Preparing to Legalize Marijuana

By Thomas Eden

The federal government is preparing to legalize marijuana, causing many to ask: what will a regulated cannabis industry in Canada look like?

The Task Force on Cannabis Legalization and Regulation has released its much-anticipated report to help guide the federal government on the best approach to regulating legal access to cannabis. The comprehensive report casts a wide net to address issues from public health and safety to advertising, and supply chain regulation. To inform its recommendations, the Task Force sought input from provincial, territorial and municipal governments, representatives from Indigenous governments and organizations as well as experts in relevant fields. Canadians had the opportunity to share their views through an online public consultation this past summer.


What You Need To Know
·     The report is not law nor is it draft law. The federal government is expected to introduce draft legislation in the spring of 2017.1 After draft legislation is tabled, there will be an opportunity for stakeholders to comment. Cannabis will not be legalized until the new legislation comes into force after being passed by Parliament and once regulations have been developed.
·     In the meantime, production, cultivation, and sale of cannabis for recreational use continues to be illegal in Canada. Only production, cultivation and sale of cannabis by licensed producers, and personal cultivation for medical use is legal. Medical users can also designate a producer to grow cannabis on their behalf.
·     There are no recommendations in the report directed to the grandfathering of licenses of current producers of cannabis for medical use under the new legislation.
·     The report urges all levels of government to increase capacity in many areas relating to production, distribution and retail, quality control and enforcement, and research and surveillance before legislation is finalized. This will include building capacity for licensing and inspection at all levels of government: federal (e.g., for production and laboratories), provincial and territorial (e.g., for distribution and retail), and municipal (e.g., for home-cultivation permits).
·     The Task Force's key recommendations are highlighted below:
o  Set a national minimum age of purchase of 18, but allow provinces and territories to set a higher age if they wish to do so.
o  Limit personal possession of non-medical dried cannabis in public to 30 grams and limit personal cultivation, for non-medical purposes, to four plants per residence.
o  Regulate the production of cannabis and derivatives (i.e., edibles) at the federal level.
o  Regulate the wholesale distribution and retail sales of cannabis at the provincial and territorial level.
o  Maintain the current legal system for access to cannabis for medical use but eliminate the category of the designated producer.
o  Tax potent strains at higher rates to discourage their purchase.
o  Prohibit mixed products, such as cannabis-infused alcoholic beverages or cannabis products with tobacco, nicotine or caffeine.

Overcoming the Challenges Ahead
The recommendations for an effective regulatory framework for cannabis address a number of challenges that the government will face as it moves forward with legalization. Among the more notable challenges are issues involving retail sales, advertising and packaging, production of cannabis, and public safety. The Task Force's key recommendations in relation to these areas are highlighted below:
Retail Sales of Cannabis and Cannabis Products
·     Provinces should control retail sales.
·     Limit the density and location of storefronts and implement requirements for appropriate distances from schools and community centres.
·     Avoid co-location of alcohol or tobacco and cannabis sales wherever possible to help mitigate combined use.

Advertising, Packaging and Labelling
·     Restrictions on the advertising and promotion of cannabis should be analogous to those imposed on alcohol and tobacco. For example, in Canada, tobacco cannot be promoted by sponsorships, testimonials or lifestyle advertising (evoking images of glamour, risk, etc.). Similarly, alcohol advertising cannot associate alcohol with social or personal achievement.
·     Therapeutic claims about the benefits of cannabis should comply with legislative requirements.
·     Plain packaging for cannabis products should limit label information to company name, strain name, price, amounts of THC, and warnings.
·     Packaging should not be "appealing to children" and should be opaque and child-resistant. For example, it should not be designed to look like candy, use bright colours, cartoon characters, etc.
·     Edibles should have packaging consistent with requirements for food and beverages, with standardized servings, and a THC symbol.

Production
·     Apply good production practices, which are already in place for cultivation of cannabis for medical use, to recreational production. This includes restricting the use of pesticides and fertilizers to those approved for use on cannabis plants.
·     Use licensing and production controls to encourage a competitive market.
·     Allow outdoor cultivation to promote eco-friendly production and a seed-to-sale tracking system to monitor the movement of cannabis plants and resulting products throughout the supply chain—from production to distribution to final sale, and to facilitate product recalls.

Public Safety and Protection
·     Maintain criminal offences for illicit production, trafficking, possession for the purposes of trafficking, possession for the purposes of export, and import/export, and trafficking to youth.
·     Introduce administrative penalties (with flexibility to enforce more serious penalties) for contraventions of licensing rules on production, distribution and sale.
·     Federal and provincial governments should invest immediately in the development of a national, comprehensive public education strategy to warn of the dangers of cannabis-impaired driving as well as support the development of an appropriate roadside drug screening device for detecting THC levels.

Footnotes
1. Statement from the Government of Canada on the Receipt of the Report from the Task Force on Cannabis Legalization and Regulation. December 13, 2016. Available online at news.gc.ca.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.


ADA Done Right

By Thomas Eden

Charles McLane worked primarily as a groundskeeper for the Mishawaka City School in Indiana during the summer and snow removal in the winter. Where he worked consisted of two baseball diamonds, two softball diamonds, a soccer field, and tennis courts and related facilities such as restrooms and a press box. McLane’s job duties including maintaining the baseball and softball diamonds, mowing the grass, edging, preparing for ballgames, and maintaining the facilities by cleaning the bathrooms, taking out the trash, and general clean up. The School’s job description for the groundskeeper position also sets forth as essential job functions the ability to "bend, stoop, climb a ladder, stand for extended time periods and lift up to one hundred (100) pounds." A Work Activity Assessment of the job was performed by a physical therapist, who obtained the information for the essential functions of the groundskeeper position through his discussions with McLane, his observations of McLane, and by looking at the duties performed by McLane.

McLane's supervisor later observed that at times McLane was doing his job but that other times it appeared that McLane was having difficulty bending over and picking items up, was not able to walk consistently nor could he walk more than ten or fifteen feet. He noted that McLane had difficulty with other tasks, such as cleaning bathrooms (due to the required bending) and cleaning bleachers, and generally noted that McLane looked like he was in pain when trying to go about normal activity. He expressed concern to the School’s Legal Counsel that he did not wish to see McLane get hurt. The School decided that it would exercise its right to have McLane undergo a fit for duty exam. According to School policy, a fit for duty exam is appropriate when a concern is raised regarding an employee's ability to perform his or her job related functions in a safe manner. As a result of the exam, the Doctor found McLane fit for duty but requested that a job site functional capacity evaluation be performed by a licensed physical therapist. His findings were that McLane was unsteady, had difficulty walking, could not walk frequently, was unable to bend properly, could not squat, and noted that McLane's knees didn't allow him to crawl or use safe body mechanics. Based on such observations, he determined that performing the above functions would put McLane at risk for injury and that McLane's physical deficits would not improve with education and instruction. McLane was transferred to a Hall Monitor Position, for which he failed to show and was fired.

Recently, the federal district judge ruled against McLane in his federal ADA case holding that difficulty bending and lifting supports an ADA “Direct Threat” Defense.

Common Sense Counsel: 5 Step Winning ADA Strategy: 1) employers may require a fitness for duty exam when they observe an employee engaged in actions that present a risk of substantial injury – even if the employee has not identified a medical issue or asked for an accommodation; 2) Employers would be well-advised to have a written fitness for duty policy; 3) hire an independent physician and vocational resources to perform the fitness for duty exam; 4) have an ADA compliant written job description; and 5) transfer the employee to a job that did not pose a risk of danger, rather than fire them. 

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and can be contacted at teden@constangy.com or 334-246-2901. Blog at www.alabamaatwork.com


Friday, February 3, 2017

FMLA Done Wrong


  By Thomas Eden

Tracy Wink was a clerical employee for Miller Compressing Company from 1999 until 2012, and apparently did a good job and was thoroughly cross-trained. At some point during her employment, she had a son. The little boy, who was autistic, started going to day care, but he was expelled in 2012 because of his bad behavior.

The boy’s grandmother could take care of the boy three days a week, but not five. Ms. Wink asked to telecommute on the two days that her mother was unavailable. She submitted an FMLA certification from her son’s health care provider saying that her son was autistic and was a danger to himself and others.

Miller agreed that Ms. Wink could telecommute two days a week. If she worked, the time counted as regular time worked. But the time that she was unable to work because she was taking care of her son counted as FMLA leave.

The company also had a no-cell-phone policy but made an exception for Ms. Wink to take calls during the workday from her son’s health care providers.

 “This story’s about to go bad, isn’t it? I can just feel it.”
Everything seems to have gone fine until the summer of 2012. By then, the company had fallen on hard times and was making some reductions in force. Among the employees who would be staying, the company decided to ban all telecommuting and require the clericals to be onsite from 8 a.m. until 4 p.m. Monday through Friday. It also decided to ban all cell phone use during working hours, with no exceptions.

At the end of the workday on Friday the 13th the Human Resources Manager called Ms. Wink in and told her that starting the following Monday she would have to work onsite from 8 a.m. until 4 p.m. and would not be able to telecommute any more. She could have time off for her son’s doctor’s appointments and therapy, but that was it. And she wasn’t allowed to talk with her son’s health care providers during work hours any more. Ms. Wink started crying and said that she could not make alternate arrangements for her son by Monday morning.

There was more talk that evening, and on Monday morning, Ms. Wink told the HR Manager that she could not commit to the new schedule. The HR Manager directed that her “resignation” be accepted, with Friday as her last day worked.

The jury sided with Ms. Wink in her Wisconsin wage payment suit and her claim of FMLA interference. Last month the Seventh Circuit affirmed and awarded Ms. Wink additional attorneys’ fees.

Common Sense Counsel: If you are thinking about terminating an employee who is on FMLA leave or telling her that she can’t have intermittent leave any more — please do these things first.

Step 1: Consult with someone who really knows the FMLA.

Step 2: Empathize. Before you act, think about how you would feel if you were in the employee’s shoes, and act accordingly.

Step 3: Keep an open mind. If she cries and says it’s impossible to meet your demands take a time out and discuss it with your employment lawyer.

Step 4: Consider all options before you deliver ultimatums.

Step 5: As soon as you realize you made an FMLA mistake, fix it.

Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP offices in Opelika, AL and West Point, GA and can be contacted at teden@constangy.com or 334-246-2901. Robin Shea, Constangy partner posted this full story on the firm’s blog site this week.