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By Alyssa Levy

Should highly compensated paralegals (likely more experienced paralegals) receive overtime pay? The new DOL Wage and Hour Administrator, Cheryl Stanton, says paralegals earning at least $100,000 annually and performing certain duties are “exempt” employees. The Administrator’s guidance letter zeroed in on the paralegals’ duties to justify their exempt status as a “fair reading” of FLSA Section 13(a)(1).

The Administrator issued her first set of opinion letters on July 1, 2019, on a slew of questions posed by employers. Among the opinions, the Administrator offered guidance to a global trade organization on whether its paralegals are exempt from overtime requirements under Section 13(a)(1) of the FLSA.

FLSA Section 13(a)(1) exempts employees employed in a bona fide executive, administrative, or professional capacity from minimum wage and overtime pay requirements. In addition, an employee is exempt as a highly compensated employee if: (1) the employee’s “primary duty includes performing office or non-manual work”; (2) the employee receives total annual compensation of at least $100,000; and (3) the employee “customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee.”

The Administrator opined that the paralegals at issue satisfy the highly compensated employee exemption. All of their duties are non-manual, and they receive total annual compensation of at least $100,000. The paralegals also customarily and regularly perform at least one exempt duty of an administrative employee. Notably, only one of paralegals’ duties must be that of an exempt administrative employee, and need not be their primary duty.

In March 2019, the DOL proposed raising the highly compensated employee salary exemption threshold to $147,414. The DOL’s letter maintains that because “[a] high level of compensation is a strong indicator of an employee’s exempt status,” the highly compensated employee exemption “eliminate[s] the need for a detailed analysis of the employee’s job duties.” Raising the salary threshold would be in line with this school of thought. Regardless, an employee’s duties will still be given great consideration to justify “exempt” status.

Read the full guidance letter (FLSA 2019-8) here.

The post A “Fair Reading” of the FLSA Exempts Paralegals From Overtime Pay appeared first on Sherman & Howard.

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Sherman & Howard by Samantha Hoffman - 3w ago

By Bill Wright

The Supreme Court’s decision today on “Auer” deference leaves life in the legal trenches untouched.  See Kisor v. Wilkie, No. 18-15 (S.Ct. June 26, 2019)  Under Kisor, when a regulatory agency issues a rule that is really, truly, ambiguous, and the agency subsequently has an appropriate occasion to think about the rule and reasonably reaches a decision on how to interpret the rule, the courts will defer to the agency interpretation.  On the other hand, when an agency issues a deliberately vague rule, and later issues an agenda-driven interpretation of the rule, the courts will agree with the agency interpretation only if the courts find the interpretation persuasive.  So, both before and after Kisor,  when an employer has to argue in court about the proper interpretation of an EEOC regulation, the employer will argue first about whether the rule is ambiguous or merely vague and will then rehearse the agency’s stated reasons for its interpretation.  If the court finds the interpretation “reasonable,” the court might “defer” to the agency.  If the court simply agrees with the interpretation, the court will issue a ruling that “agrees,” “upholds,” or “affirms” the standard.  Our court arguments will be the same either way. Only the headings in the court’s resulting opinion change.

Nevertheless, the nine-justice court generated four opinions in Kisor. The two longest opinions face off over how much the Court should stray from past precedents on this issue.  The justices sometimes called “conservative” favored considering themselves relatively unfettered by previous decisions, free to just decide what’s best.  The justices sometimes called “liberal” favored gathering the old decisions together and systematizing them in a new way, but not “overturning” them.  Only the Chief Justice and Justice Kavanaugh argued the dispute about precedents was a side show of little practical importance in this particular case.

It appears that the Supreme Court will take every opportunity this term to talk about the value of precedents in a well-governed society. At least in this case, the debate seems to have left life on the ground unchanged.

The post “Deference” “Upheld.” appeared first on Sherman & Howard.

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By John Alan Doran

Over thirty-five years ago, the NLRB held that an employer may not prohibit a union organizer’s access to an employer’s privately owned, but publicly accessible areas, such as an employer’s public restaurant or cafeteria, unless the organizer engages in “disruptive” conduct.  A long line of subsequent Board decisions confirmed this rule.  However, last Friday, the Board unequivocally reversed a slew of its prior decisions on this issue in UPMC, 368 NLRB No. 2 (06-CA-102465, June 14, 2019).

UPMC is a hospital facility that provides a publicly accessible cafeteria.  Union organizers held a peaceful lunch meeting with some UPMC employees in the cafeteria.  When UPMC Security learned of this, they called the police and had the organizers removed.  The union filed unfair labor practice charges, and an Administrative Law Judge found in favor of the union. 

On appeal, the Board reversed the ALJ’s decision.  The Board reviewed a long line of federal circuit court decisions resoundingly criticizing the Board’s historical approach to organizer access to public spaces, and noted that the Board’s long-standing position directly contravened existing Supreme Court jurisprudence.  The Board concluded that organizer access to privately owned, public spaces is governed by the Supreme Court’s decision in NLRB v. Babcock & Wilcox Co., 351 U.S. 105 (1965), which held that an employer may lawfully exclude union organizers from its property, except in the very rare instances where either the union has no other reasonable means to communicate with employees or where the employer discriminates against the union by allowing solicitation or distribution by others but not the union.  Applying Babcock & Wilcox to these facts, the NLRB held that the employer did not violate the Act by removing the organizers because they were engaged in distribution and solicitation and the employer had consistently excluded other patrons who engaged in such activities for non-union purposes.

While the UPMC decision noted that the ruling should not impact existing employer no-distribution/no-solicitation rules, it likely does impact the application of existing employer rules for employers that have publicly accessible areas on their private property.  Regardless, this landmark ruling should prompt all employers to revisit both the language and the enforcement of their no-distribution/no-solicitation rules to ensure that they are legal, robust, up to date, and consistently enforced.  Employers are also wise to note that they may not exclude union organizers from public areas merely because they are organizers—it is the conduct of soliciting or distributing that supports their exclusion, not their mere affiliation with a union. 

The post NLRB Says Organizer Access to Public Spaces is Not on the Menu appeared first on Sherman & Howard.

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Sherman & Howard by Samantha Hoffman - 1M ago

By Lindsay H. S. Hesketh

Beginning on January 1, 2020, Nevada will require private employers with 50 or more employees to provide their employees with paid leave. Covered employers must allow employees to accrue paid leave at a rate of .01923 hours for each hour worked.  Employees can begin using their accrued paid leave on their 90th calendar day of employment.  Employers may allow employees to carry over unused accrued leave from year to year, but also may cap the carry-over amount to 40 hours.  Similar to other leave laws, employers must also keep records tracking employees’ accruals and use of paid leave and provide an accounting of available paid leave to each employee on each payday.

Unlike some federal and state leave laws limited to family and sick leave, employees may use paid leave under Nevada’s new law for any reason and do not need to provide a reason for its use to their employer.  However, employees must provide notice of their desire to use paid leave as soon as practicable.  When employees act in accordance with this law, employers cannot deny employees the right to use paid leave, require an employee to find a replacement worker while on paid leave, or retaliate against an employee for using accrued paid leave.  Nevada may collect remedies and penalties, plus a $5000 fine, for each violation.

The law does not apply to otherwise eligible employers during their first two years of operation; temporary, seasonal, or on-call employees; and employers who already provide their employees with the same or a more generous amount of paid leave. 

You can read the entire bill as adopted here.

The post New Paid Leave Law in Nevada appeared first on Sherman & Howard.

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By Matt Hesketh

A Nevada law that goes into effect on January 1, 2020, will make it unlawful for Nevada employers “to fail or refuse to hire a prospective employee because the prospective employee submitted to a screening test and the results of the test indicate the presence of marijuana.”

The law expressly does not apply to applicants for:  (i) a firefighter or EMT position; (ii) a position that requires drug testing to operate a motor vehicle; (iii) a position “that, in the determination of the employer, could adversely affect the safety of others”; and (iv) a position funded by a federal grant.  The law also does not apply to the extent it conflicts with an employment contract or collective bargaining agreement and to the extent it is “inconsistent or otherwise in conflict with” federal law.

The law leaves several issues unresolved.  For example, what type of risk will justify the exception based on the safety of others?  How can employers contract around the law?  How does the federal Controlled Substances Act, which classifies marijuana as a Schedule I substance, affect this law?

As with many issues in this context, Nevada employers should review drug testing policies and will need to be cautious as these and other questions play out in the courts or legislature.

The post Nevada Adds Marijuana Screening Protection for Job Applicants appeared first on Sherman & Howard.

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By John Alan Doran

The EEOC settled a lawsuit challenging its issuance of some 54 “Right to Sue” notices involving BNSF Railway.  Law 360 reports that the case settled when the EEOC agreed to set aside the Right to Sue notices. 

BNSF sued the EEOC, claiming that the EEOC violated the Administrative Procedures Act (“APA”) when it issued the Right to Sue notices.  BNSF asserted that the underlying charge that gave rise to the notices was flawed for a variety of reasons, not the least of which were that the charge did not specify the date of the alleged discrimination, the EEOC Commissioner approved the charge only after he officially left the EEOC, and the EEOC unlawfully disseminated the charge to potential plaintiffs when it was supposed to be confidential.  Last year the trial court found that the notices constituted final agency actions that are subject to challenge under the APA.

This is yet another example of the EEOC’s overreach, which led to unnecessary and costly litigation.  More importantly, the case may provide a roadmap for employers to challenge the bona fides of Right to Sue notices, which the EEOC has historically issued like candy out of a PEZ dispenser.  And, while the EEOC regularly issues self-congratulatory press releases over miniscule settlements, it is notoriously silent on this settlement, which should come as no surprise to any of us. 

BNSF Railway Co. v. EEOC, 4:18-cv-0031 (N.D. Tex. 2019). 

The post EEOC Right to Sue Fiasco Ends in Whimper, Not a Bang appeared first on Sherman & Howard.

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By Matt Hesketh

The Arizona Supreme Court recently ruled that the Arizona Medical Marijuana Act allows cardholders to possess and use marijuana resin and extracts, including forms with concentrated levels of THC like hashish.  Although the case involved a criminal prosecution, the takeaway for employers is that AMMA’s protection extends beyond dried marijuana flowers to edibles and other popular forms manufactured from marijuana resin.  Accordingly, all forms of marijuana are treated the same for purposes of protection under AMMA.  A cardholding edible user has protection as well.

The case is State v. Jones, No. CR-18-0370-PR, 2019 WL 2262277 (Ariz. May 28, 2019).

The post Marijuana Extracts Protected for Arizona Cardholders appeared first on Sherman & Howard.

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By: John Alan Doran

The U.S. Supreme Court ruled today that a plaintiff’s failure to properly perfect an EEOC charge is a “prudential” defense to a Title VII claim, which may be waived by the employer’s failure to promptly raise the defense in litigation.  Fort Bend County, Texas v. Davis (June 3, 2019). 

Davis filed an EEOC charge against Fort Bend County alleging sexual harassment and retaliation.  While that charge was pending, Davis attempted to add a religious discrimination claim to her charge by handwriting on her prior EEOC intake questionnaire the word “religion”, and checking the “discharge” and “reasonable accommodation” boxes on that form, but not on the actual EEOC charge. A trial court subsequently entered summary judgment against Davis on the merits of all her claims.  The Fifth Circuit partially reversed that ruling, and the case returned to the trial court.  It was only then that Fort Bend raised, for the first time, Davis’s failure to claim religious discrimination in her formal EEOC charge.  Fort Bend argued that Title VII’s charge-filing procedures are jurisdictional, meaning they are not subject to waiver and can be raised at any stage of the litigation when the plaintiff failed to follow the charge-filing procedures before the lawsuit.  The trial court agreed and dismissed the remaining claim.  The Fifth Circuit again reversed, holding that Title VII’s charge-filing processes are not jurisdictional and are therefore subject to waiver by the employer. The Supreme Court agreed, holding that the Title VII administrative prerequisites to suit are not jurisdictional, but “prudential.”

Employers frequently seek dismissal of Title VII claims based on a plaintiff’s failure to fully follow Title VII’s charge-filing procedures.  The Supreme Court made clear today that this defense must be raised at the outset of litigation or it may be waived.  Standing alone, the decision is of limited impact.  However, plaintiffs who fail to fully follow the charge-filing procedures will now undoubtedly argue that, if charge-filing procedures are not jurisdictional, they are similarly subject to the “equitable tolling” doctrine, which theoretically excuses plaintiffs from full compliance with the charge-filing process when it is “equitable” to do so.  Equitable tolling promotes plaintiff-contrived “dog ate my homework” excuses for failing to follow Title VII’s charge-filing processes.  These concocted excuses undermine one of the few employer protections provided in Title VII, while simultaneously undermining the Act’s strong conciliatory purpose.  The Court’s decision also fails to explain under what circumstances (or even if) a plaintiff’s non- (or merely partial) compliance with the charge-filing process may be excused by a trial court for “prudential” reasons.  To the contrary, today’s decision further fuels litigation over a plaintiff’s failure to comply strictly with Title VII’s charge-filing procedures, while forcing employers to raise any charge-filing defects immediately at the beginning of a lawsuit. 

The post SCOTUS Limits Common Title VII Defense appeared first on Sherman & Howard.

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By Joseph Hunt

Signed into law on May 16, 2019, by Governor Polis, Colorado employers will soon be at risk of a felony conviction and incarceration for “wage theft.” The new law is an express recognition of labor as a thing of value that can be subject to theft, if an employer willfully refuses to pay wages due. The new law increases the criminal penalty from a misdemeanor to a felony when the theft is greater than $2,000. It also removes the exemption from criminal prosecution for an employer that is unable to pay because of bankruptcy. The law goes into effect on January 1, 2020.

Supporters of the bill noted that increased criminal penalties may serve as additional deterrence for employers looking to skirt civil wage and hour requirements and help combat labor trafficking. The new law, however, will undoubtedly face challenges on the ground and in court.

As a practical matter, wage theft is very rarely prosecuted. The risk is that criminal law enforcement against employers can ensnare workers by crippling the businesses on which they rely for employment (not to mention the possibility of cutting off economic and punitive damages to which an employee would normally be entitled). The new law may be at odds with civil legislation like the Colorado Wage Act, which requires employers to make employees “whole” for unpaid wages. Moreover, it is unclear whether criminalizing the problem will increase encounters between police and unauthorized immigrants, subject to deportation, which the law is meant to protect. We will wait and see whether the wage theft law produces its intended result.

In the meantime, could we see employers asserting Fourth and Fifth Amendment challenges (against searches without a warrant and self-incrimination) to regulatory enforcement or civil procedure disclosures? It is possible. The threat of criminal penalties attaches constitutional protections, including Miranda rights, the right to a jury trial, and a higher standard of evidence required for conviction.

The Colorado wage theft law is another reminder for employers to take seriously their obligations under wage and hour laws. Review your pay practices, consult an attorney, and pay wages owed and on time, or else get used to jailbird orange.

The post Colorado Employers Face Tougher Criminal Penalties for “Wage Theft” appeared first on Sherman & Howard.

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By Lindsay H.S. Hesketh

A correctional officer will be going to trial against her former employer in the District of Arizona on hostile work environment claims.  The plaintiff alleged multiple instances of harassment, including being the target of crude comments, having to listen to sexually explicit stories, and being sexually assaulted in her car by a coworker.  The plaintiff complained to her supervisors, but her employer did not respond in accordance with its policies. During a work investigation on a different issue, her employer found the plaintiff’s handwritten notes documenting the alleged harassment.

While the defendant won summary judgment on the plaintiff’s retaliation claim, the Court denied summary judgment on the hostile work environment claim.  The defendant had argued that the plaintiff’s case for hostile work environment lacked a key element—the plaintiff’s subjective belief that the alleged harassment was offensive.  The defendant pointed out that the plaintiff had included only one instance of alleged harassment in her personal notes, an incident the plaintiff later claimed “did not even matter.”  Despite the defendant’s argument, the Court concluded that a reasonable jury could also find that plaintiff’s contemporaneous notes evidenced that she had found the conduct “disturbing” enough to keep notes.  Thus, the claim could not be resolved without a trial.

Based on the facts of this case, an employee’s contemporaneous notes of workplace events could provide evidence that conduct is subjectively “disturbing” or offensive.  On the other hand, the significance of notes may become diluted if employees routinely take them. Notes or not, though, employers should follow up on employee complaints about alleged misconduct. Having and following proper policies can provide employers with a separate defense against these types of claims.

Hogan v. CoreCivic of Tenn. LLC, No. CV-17-03752-PHX-DLR (D. Ariz. May 8, 2019).

The post Employee’s Personal Notes Lead to Trial appeared first on Sherman & Howard.

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