Click here to read the full case: Tamika Ray v International Paper Company
Friday, November 30, 2018
International Paper Company (IPC) in Spartanburg, SC, which manufactures and distributes packaging boxes, hired Tamika Ray in 2002 to work as a “bundler” in its converting department. Beginning in 2003, Ray’s supervisor started acting inappropriately toward her, according to a court opinion, including asking Ray to engage in sexual activity with him and offering to pay her for those acts. The supervisor also allegedly made several overtly sexual comments to Ray, stating that he wished he could “bend her over his desk,” that he would father a child with her, and that he would engage in sexual activity with Ray’s sister-in-law if Ray did not acquiesce to his demands. The supervisor also asked Ray to show him her “cootie,” “cha-cha,” and “monkey,” comments that Ray construed as requests to see her body parts. The supervisor continued this conduct despite Ray’s repeated refusal of his advances and asking him to stop.
In 2013, several years after her supervisor’s conduct began, Ray finally reported his behavior to two other IPC supervisors. Ray explained that her supervisor would not leave her alone and was ragging her because she would not have sex with him. Although they offered to say something about Ray’s allegations, she declined out of fear of retaliation.
Under IPC’s anti-harassment policy, when a supervisor is notified of potential harassment or discrimination, the supervisor is required to report that allegation to his manager, to a human resources representative, or to IPC’s legal department. Neither of the other two supervisors formally reported any of Ray’s complaints.
In early 2014, her supervisor learned that Ray had complained about his conduct. He confronted Ray and asked if she had reported him for sexual harassment. Ray denied making any complaints, and her supervisor informed her that such a report could get him in a lot of trouble. Around the same time, Ray’s supervisor informed her that she could no longer perform voluntary overtime work. Before imposing this restriction, Ray often had arrived four hours before her scheduled shift to perform overtime work, which represented a significant portion of her income.
IPC investigators conducted interviews and learned that the supervisor had told two other employees that he wanted to have sex with Ray. Although the accused supervisor denied ever saying anything sexual to or about Ray, the IPC investigators concluded that he was lying. Nevertheless, IPC did not discipline the supervisor because Ray’s allegations were not corroborated by the statements from other employees.
The U.S. Equal Employment Opportunity Commission backed Ray in Federal Court, saying in an amicus brief that a reasonable jury might find that IPC supervisors weren't properly trained on compliance with the company's anti-harassment policy and also that the company did not enforce its policy reasonably or promptly with respect to Ray. Both elements are critical to an affirmative employer defense.
This week the 4th U.S Circuit Court of Appeals ruled that Ray’s case could go to a jury, finding that IPC’s failure to discipline the supervisor, retaliation by taking away overtime, and lack of adequate and meaningful supervisory harassment training were all highly significant.
Common Sense Counsel: The #MeToo era dictates that employers ramp up harassment prevention policies, training, and investigative compliance to stay out of the EEOC’s crosshairs.
Tommy Eden is a partner working out of the Constangy, Brooks, Smith & Prophete, LLP office in Opelika, AL and can be contacted at firstname.lastname@example.org or 334-246-2901. Link to full case at www.alabamaatwork.com
Friday, November 16, 2018
Last Thursday while I was attending the ABA Labor & Employment Law Section meeting, the U.S. Department of Labor Wage and Hour Division, issued an advisory opinion letter, FLSA 2018-17, that amends previous guidance regarding the “tip credit provision,” sometimes known as the 80/20 rule. The “tip credit” provision addressed the payment of minimum wage and applies to employees of a business that usually receive at least $30 per month in tips. These “tipped employees” are not required to be paid federal minimum wage (currently $7.25 per hour), but instead, only $2.13 per hour. In 2011, the Department of Labor had issued an opinion rescinding a 2009 opinion and instituting what has colloquially been called the “80/20 rule.” By FLSA 2018-17, the Department of Labor fully reinstated the prior 2009 determination, which will have far reaching consequences for employers of “tipped employees,” in the restaurant industry.
In order to understand this change, it is important to understand the old 80/20 rule. That rule is illustrated by the following example: A server primarily engages in the act of serving customers, or a “tip-producing” occupation. However, the server may engage in other work that does not directly generate tips, often called “side work.” This side work may involve folding napkins, wrapping silverware, cleaning tables, and similar tasks. The 80/20 rule, at its core, mandated that if such “non-tipped” tasks exceed twenty percent (20%) of an employee’s duties, the employer would not be able to use the “tip credit provision,” and could be required to pay the employee minimum wage. This led to numerous claims by employees that an employee’s collateral duties exceed twenty percent of the employee’s working time and demands that an employee be paid full minimum wage. The rule turned into a nightmare for the small business.
Last week’s new guidance from the Department of Labor undoes the 80/20 rule. Now, there will be no limitation on the amount of duties that do not directly produce tips, provided they are related to the tip-producing occupation, and are performed contemporaneously with direct customer service or “tip-producing” duties, which would include folding napkins, wrapping silverware, cleaning tables, and similar tasks.
Note that this would not apply to employees who engage in dual occupations, rather than those who complete some non-tipped work related to an employee’s customer service duties. For instance, the opinion letter cites the example of an employee who performs both duties as a waiter and a maintenance man. The employer is not entitled to take the “tip credit” for the time that the employee works as a maintenance man, because this is not a “tipped” profession. The opinion is limited to work performed that is related to the “tipped” profession. Also, be advised that this determination applies only to federal minimum wage standards. Certain states and localities may have different laws and regulations concerning minimum wage.
Common Sense Counsel: Other than Tipped Employees, there are several FLSA Compensable Time Issues That Can Trip You Up Big Time! The FLSA clearly defines what qualifies as compensable time. Do the following count: Waiting time, On-call time, Rest and meal periods, Sleeping time, Lectures, Meetings and training programs, Travel time, Meal time, after hour emails/text messages?
Problems occur when employers fail to have legally defensible handbook policies, employee sign-offs and notices, and supervisors trained to recognize and count certain hours worked as compensable time. Getting it wrong can be costly.
Wednesday, November 7, 2018
On November 6, the U.S. Supreme Court handed down its opinion in Mount Lemmon Fire District v. Guido, holding 8-0 that the Age Discrimination in Employment Act of 1967 applies to all state and local governmental employers, regardless of the number of employees. Justice Brett Kavanaugh took no part in the consideration or decision of the case.
According to the Court, Section 630(b) of the ADEA has two separate categories of “employer.” “Employer” means: (1) “a person engaged in an industry affecting commerce who has twenty or more employees . . .” and (2) “a State or political subdivision of a State.” The Court noted that the language “also means” should be read as connoting “in addition to.” Accordingly, the Court ruled that the 20-employee minimum applicable to private sector employers did not apply to state or local governmental employers.
The employer unsuccessfully argued that the ADEA should be interpreted in accordance with Title VII of the Civil Rights Act of 1964, which applies to states and political subdivisions with 15 or more employees. In rejecting the employer’s argument, the Court noted that, when enacted, neither Title VII nor the ADEA applied to state or local governments at all. Congress amended Title VII in 1972, and the ADEA in 1974, to apply to state and local governments, but in doing so, had used different language.
Notably, the 1972 amendments to Title VII did not change the definition of the term “employer” – “a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year . . .” Nevertheless, the amendments changed the definitions of “person,” and “industry affecting commerce.” Specifically, Congress changed the Title VII definition of “person” to include “governments, governmental agencies, [and] political subdivisions.” Congress changed the definition of “industry affecting commerce” to “include any governmental industry, business, or activity.” As a result of these two definitional changes, since 1972, all governmental entities are Title VII “employers” if they have 15 or more employees.
The impact of the Court’s decision in Mount Lemmon is expected to be considerable, as state and local governmental employers with fewer than 20 employees are now subject to suit under the ADEA. Although the Eleventh Amendment to the U.S. Constitution will shield state employers of all sizes from private ADEA actions, state employers with fewer than 20 employees (as well as larger state employers) will be subject to age discrimination lawsuits filed by governmental entities such as the Equal Employment Opportunity Commission. Moreover, because Eleventh Amendment immunity does not apply to local governmental entities such as municipalities, counties, and school boards, the Mount Lemmon decision exposes those local governmental employers with fewer than 20 employees to suit under the ADEA from private and governmental plaintiffs alike.
Common Sense Counsel: Read my column from last week on Age Discrimination “Code Words” to avoid, which are being used as direct evidence of age discrimination in employment claims.