Federal Judge Strikes Down Obama Administration’s FLSA Overtime Rule

Last Thursday, August 31, 2017, a federal district court judge in Texas struck down the Obama administration’s long-embattled federal overtime pay rule. The rule would have more than doubled the minimum weekly salary required to qualify for the federal Fair Labor Standards Act’s (FLSA) white collar exemptions (from $455 per week to $913 per week). The rule was originally scheduled to go into effect on December 1, 2016, but the same Texas-based judge enjoined its implementation late last year.

How Can Employers Better Prepare for Natural Disasters?

Hurricane Harvey has caused unprecedented damage in Texas, resulting in thousands of companies temporarily (or perhaps even permanently) closing down operations. While the main focus is—and should be—the safety of everyone affected by Harvey, this natural disaster brings with it a host of legal and practical issues for employers. Even if a company is not in the storm’s path, it should consider using Harvey as an opportunity to think through some of the preparations that can make disasters a bit easier to manage. Below are a few common questions employers may be faced with in an emergency.

EEOC Ordered to Reconsider Wellness Regulations

Last week a federal judge in Washington, D.C. directed the Equal Employment Opportunity Commission to revisit its regulations governing employee wellness programs but did not vacate the regulations.  The court noted that striking down the regulations until they could be revised may have “significant disruptive consequences” and it assumed that the EEOC could address the failings it identified in short order.  Nonetheless, the decision not to stay implementation or vacate the regulations creates confusion for employer wellness programs.

The EEOC’s wellness regulations took effect on January 1, 2017.  The regulations were used to address the conflict between the American with Disabilities Act (“ADA”) and the Genetic Information Act (“GINA”), which permit employers to collect medical and genetic information from employees who participate in wellness program as long as the employees provide the information voluntarily, and the Health Insurance Portability and Accountability Act (HIPAA)/Affordable Care Act (ACA) wellness regulations, which expressly permit the use of incentives in wellness programs.  In the regulations the EEOC reversed its previous position that in order for a wellness program to be voluntary employers could not condition the receipt of incentives on the employee’s disclosure of ADA- or GINA-protected information.

Federal Labor Law May Be an Important Factor in Your Decision To Terminate an Employee for Racist Conduct.

With the violent protest events in Charlottesville, Virginia last weekend, it seems particularly timely to address a recent Eighth Circuit Court of Appeals decision on potential labor law protections for racist behavior. While Judge Beam of the Eighth Circuit opined that “no employer in America can be forced to employ a racial bigot,” he did not persuade the rest of the Court’s panel in the recent Cooper Tire v. NLRB decision.

In the Cooper Tire case, the Eighth Circuit Court of Appeals examined tensions between behavioral protections for picketing workers under the federal National Labor Relations Act and an employer’s Title VII obligation to provide a workplace free from behavioral harassment based on race. Cooper Tire involved the lock out of union employees after failed collective bargaining negotiations. During the lock-out, a picketing employee yelled racial slurs at a van carrying replacement workers of color to the workplace. Cooper Tire fired that employee.

Were those racial slurs protected? 

It Just Got a Bit Easier for Minnesota Employees to “Blow the Whistle”

It has become a bit easier for Minnesota employees to blow the whistle against their employers due to a recent decision of the Minnesota Supreme Court. In the case of Friedlander v. Edwards Lifesciences, LLC, et al., the Minnesota Supreme Court eliminated the previous requirement under Minnesota law that in order to establish a claim for a violation of the Minnesota Whistleblower Act, it must be shown that in “blowing the whistle” the employee was acting with the purpose of exposing illegal activity by the employer.  The net effect of this judicial ruling may be a relaxation of the proof required of an employee when bringing a lawsuit under the Minnesota Whistleblower Act.

The issue before the Minnesota Supreme Court was presented in the form of a certified question from the Minnesota federal district court, seeking guidance on the state of Minnesota law following an amendment in 2013 to the Minnesota Whistleblower Act by the Minnesota legislature. The federal district court certified this question: “Did the 2013 amendment to the Minnesota Whistleblower Act defining the term ‘good faith’ to mean ‘conduct that does not violate section 181.932, subdivision 3’ eliminate the judicially created requirement that the putative whistleblower act with the purpose of ‘exposing an illegality?’” The Minnesota Supreme Court ultimately answered “yes” to that certified question. 

Employer Held Liable in Tip Pooling Class Action

A high-profile Minnesota employer, Surly Brewing Company, has been found liable in a state court class action for violations of Minnesota’s wage and hour statute governing the pooling of employee tips. The amount of damages has not yet been assessed but the class of employees who stand to receive payment from Surly under the ruling appears to number in the hundreds. Given the prevalence of various kinds of tip pooling in the hospitality industry, a great many Minnesota employers may be at risk for similar litigation under the tip pooling statute. At a minimum, an employer whose employees receive and share tips should immediately re-assess its risk in light of this ruling, which is one of the few to interpret the tip pooling statute.

Under Minnesota’s wage and hour law, “any gratuity received by an employee or deposited in or about a place of business for personal services rendered by an employee is the sole property of the employee.” The court in the Surly class action noted that the clear language of the Minnesota tip pooling statute requires that each [tipped] employee’s participation in a tip pool be by voluntary agreement. Because each tipped employee has a separate individual right to control his or her tips, this right is not subject to majority rule by a group that includes non-tipped employees such as wait assistants, barbacks, and buspersons who may be part of the service team. “One employee is not allowed to bind any other employee to participate in sharing gratuities.”

DOL Files Brief in Overtime Rule Appeal Seeking to Reaffirm Its Authority to Establish an Exempt Salary Level Test

On June 30, 2017, the U.S. Department of Labor (DOL) filed a brief with the federal Fifth Circuit Court of Appeals in support of its appeal of a lower court ruling that enjoined implementation of its 2016 overtime rule under the Fair Labor Standards Act (FLSA). Had the rule gone into effect when scheduled on December 1, 2016, it would have raised the minimum salary threshold for white collar exempt employees from $455 per week to $913 per week. Under the new Trump administration, the DOL informed the appellate court that it plans to revise the overtime rule that was issued during the Obama administration; however, it will not do so until the Fifth Circuit Court of Appeals confirms that it has the right to set an exempt salary threshold.