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. 

DOL Officially Changing Course on Persuader and Overtime Rules

Just days after withdrawing some of its guidance on joint employer and independent contractor issues, the U.S. Department of Labor (DOL) indicated it will soon reconsider the much maligned “Persuader Rule” and white-collar Overtime Rule that were both enjoined last fall. The DOL wants to rescind the Persuader Rule and plans to seek additional public comment on the white-collar salary thresholds set forth in the Overtime Rules.

As a reminder, the Persuader Rule would have required employers to publicly disclose when they use consultants (including lawyers) to obtain labor relations advice and services for the purpose of persuading employees regarding union organizing. The consultants/lawyers would also have been required to file reports containing details about their advice and the payments received for such advice. Previously, such reports were only required when a consultant providing advice had direct contact with employees. On June 12, 2017, the Federal Register published the DOL's proposal to rescind the Persuader Rule in order to consider “the potential effects of the Rule on attorneys and employers seeking legal assistance” and “the impact of shifting priorities and resource constraints.” Comments on this proposal are due by August 11, 2017.

The Unpopularity of the Proposed EEOC and OFCCP Merger

The Trump administration’s proposed budget for the upcoming federal fiscal year contains a streamlining proposal that is evoking strong opposition from both employer and employee groups. Namely, the administration has proposed merging the federal Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP).

Employers and employee rights groups are rarely on the same side of regulatory matters, but in this case, there is almost unanimous opposition to the proposed agency merger. Presumably, the Trump administration believes an EEOC and OFCCP merger is a plausible streamlining approach, because both organizations focus on enforcing federal laws focused on employment discrimination. Employee groups, however, worry that a merger will result in decreased enforcement efforts due to a lack of adequate agency funding, staff, and resources. The Trump administration’s merger proposal provides for the EEOC to absorb the OFCCP with no new financial resources to address merger logistics.

Department of Labor Withdraws Guidance on Joint Employer and Independent Contractor Liability

The U.S. Department of Labor (DOL) has withdrawn two informal regulatory interpretations, issued in 2015 and 2016, on the subjects of joint employer and independent contractor liability of employers. (See our previous blog posts about the related risks for employers, available here.)

The DOL’s announcement this week appears to signal a major course reversal in the wage and hour arena, particularly from 2016 when its Wage & Hour Division had made joint employment “a major focus.” This is likely true even though the DOL said, in announcing the withdrawal: “Removal of the two administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act . . . as reflected in the Department’s long-standing regulations and case law.”