Wednesday, March 14, 2018

Testing, Testing: The U.S. Department of Labor is Testing a Wage and Hour Self-Reporting Program

On March 6, 2018, the U.S. Department of Labor (DOL) announced a new pilot program, the Payroll Audit Independent Determination (PAID) program. The PAID program encourages employers to self-report inadvertent overtime and minimum wage violations under the Fair Labor Standards Act (FLSA). According to the DOL, “the program's primary objectives are to resolve such claims expeditiously and without litigation, to improve employers' compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed—faster.”

The estimated start date for the PAID program is April of 2018. Here is what we currently know about the parameters of this new program:

Monday, February 26, 2018

Supreme Court Clarifies Narrow Definition of “Whistleblower” Under Dodd-Frank Act

On Wednesday, Feb. 21, 2018, the Supreme Court issued a ruling that significantly narrows the category of employees who may be protected whistleblowers under the Dodd-Frank Act.1 In a case entitled Digital Realty Trust, Inc. v. Somers, the Court held that Dodd-Frank’s prohibition on employer retaliation against whistleblowers only covers individuals who made reports of suspected violations of the securities laws to the Securities Exchange Commission (SEC).

Paul Somers was an employee of Digital Realty Trust, a San-Francisco based realty firm, whose employment was terminated by Digital Realty Trust in 2014, after he allegedly reported concerns of possible securities law violations by the company to senior management internally. Importantly, Somers did not bring his concerns to the SEC’s attention at any time. Following his termination, Somers brought suit against his former employer, alleging his termination constituted illegal retaliation for making the reports and thus violated the whistleblower protections of the Dodd-Frank Act. Both the district and appeals courts agreed with Somers, initially saying he was entitled to whistleblower protections even though he didn't disclose his allegations to the SEC.

Tuesday, February 20, 2018

Federal Judge Rules that Grubhub Drivers are Independent Contractors, Not Employees

With many laws protecting workers classified as employees and not offering protection for those classified as independent contractors, a worker’s classification has broad implications for the worker and for the company using the worker’s services. In the rise of the “sharing economy,” companies like Uber Technologies, Inc. and Grubhub, Inc. have classified their drivers as independent contractors; and workers have turned to the courts to challenge that classification. 

Friday, January 26, 2018

Trade Secrets Lawsuits Keep Trending Up: Are You Minding the Store?

Lawsuits involving claims for misappropriation of trade secrets are continuing to trend upward, even in an era when litigation as a whole is believed to have decreased. At a time when companies’ most sensitive confidential and proprietary business information is becoming ever more digitalized – and thus easily transportable – all employers should maintain vigilance in protecting their crucial business information. Not surprisingly, a significant amount of trade secret litigation involves situations where former employees accessed company information before their departures, copied it and later used that information to compete against the former employer.

Tuesday, January 23, 2018

First Sick Leave Settlement Reached in Minneapolis

The Minneapolis Department of Civil Rights has settled its first case of retaliation under the paid sick-leave ordinance that went into effect on July 1, 2017. The paid sick-leave ordinance requires that employers with six or more employees provide Minneapolis employees with one hour of paid sick leave for every 30 hours worked within Minneapolis. The ordinance applies to full and part time employees, temporary employees, and paid interns. Under the ordinance, retaliation against employees for exercising their sick leave rights is strictly prohibited.

Thursday, January 18, 2018

Employer Beware: Your Current Bonus Program May Be Irrevocable

Last week, in Boswell v. Panera Bread Co., the Eighth Circuit Court of Appeals held that Panera Bread illegally imposed caps on amounts paid to managers under its bonus program. In order to recruit and retain managers, Panera had created a program under which managers were eligible to receive a one-time bonus to be paid five years after the managers signed at-will employment agreements containing the bonus program. In order to receive the bonus, the manager had to be employed as a manager at the time of payment.

However, after a downturn in profits, Panera decided to place a $100,000 cap on the manager retention bonus. Managers were notified of the cap in 2011 and informed that the cap would become effective in 2012. Plaintiff, Mark Boswell, sued Panera in 2014 on behalf of himself and a class of similarly situated managers. Boswell argued that Panera’s unilateral bonus cap was a breach of contract. Panera disagreed, maintaining that its 2011 notice of the cap constituted a new oral contract with the managers that they accepted by continuing employment. Panera also argued that the managers waived any potential contract claim by continuing to work for Panera with notice of the program change and that the managers were estopped from raising any claims due to the passage of time since 2011.

Friday, January 5, 2018

New Tax Law Eliminates Employer Deductions for Certain Types of Sexual Harassment Settlements

In the midst of the growing “Me Too” movement, employers may find it more expensive to settle employment claims of sexual harassment or sexual abuse. A provision in the new tax law signed by President Trump on Dec. 22, 2017 (the Tax Cuts and Jobs Act) provides that, effective as of the signing of the law, a business can no longer deduct the costs incurred to settle employment sexual harassment or abuse claims if a nondisclosure agreement is included in the settlement.  This provision was added to the tax law in response to the “Me Too” movement and growing criticism of the historic practice of conditioning settlements on confidentiality. In addition, the new tax law contains limits on the ability to deduct attorney’s fees related to a sexual harassment or abuse settlement.