On April 1 2017, the reform of the German Act on Temporary Agency Work (Arbeitnehmerüberlassungsgesetz) came into force bringing major changes for agencies and their clients. Agencies and their customers have to revisit work processes and agreements. The same is true for the use of external staff based on service or work contracts (e.g., facility management, IT services) The time to act is now, since not all changes are subject to transition periods. In fact, material changes already came into force on April 1,2017, the violation of which may result in severe sanctions up to criminal penalties.
Posts by: Mike Delikat
With some exceptions, the ADEA applies to the U.S.-incorporated subsidiaries of foreign corporations. It remains unsettled whether employees can sue foreign parent companies of U.S. subsidiaries for age discrimination under the ADEA. Recently, in Downey v. Adloox Inc., Case No. 16-CV-1689 (JMF) (S.D.N.Y. Feb. 28, 2017), the U.S. District Court, Southern District of New York, found that the plaintiff plausibly alleged age discrimination under the ADEA against both his United States employer and its French parent company on a “single-employer” theory.
On March 8, 2017, a divided panel of the Ninth Circuit issued an opinion in Somers v. Digital Realty Trust Inc. that further widened a circuit split on the issue of whether the anti-retaliation provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act apply to whistleblowers who claim retaliation after reporting internally or instead only to those who report information to the SEC. Following the Second Circuit’s 2015 decision in Berman v. [email protected] LLC, the Ninth Circuit panel held that Dodd-Frank protections apply to internal whistleblowers. By contrast, the Fifth Circuit considered this issue in its 2013 decision in Asadi v. G.E. Energy (USA), LLC and found that the Dodd-Frank anti-retaliation provisions unambiguously protect only those whistleblowers who report directly to the SEC. READ MORE
The United States Senate is slated to consider Andrew (Andy) Puzder, CEO of CKE Restaurants, as the next Secretary of Labor (“DOL”). Although his confirmation hearing which was set for February 7, 2017 has been delayed reportedly to give Mr. Puzder additional time to complete government ethics disclosures, Mr. Puzder has stated that he is fully committed to becoming Secretary of Labor and says that he is “looking forward to [his] hearing.”
CKE Restaurants operates “fast food” restaurants known as Carl’s Jr. west of the Rockies and Hardee’s in the east. The restaurants, perhaps better-known for their commercials featuring women models in skimpy swimsuits, began a new advertising campaign last fall focusing on its employees talking about the quality of the food offerings — burgers made with grass fed beef, hand-breaded chicken tenders, hand-scooped ice cream, and scratch made biscuits. If confirmed, Mr. Puzder in all likelihood, would also steer the DOL in a new direction with a decidedly more business-friendly approach than his predecessor, Tom Perez. We consider what would a Puzder DOL would likely focus on. READ MORE
The SEC released its Fiscal Year 2016 Annual Report (the “Report”) to Congress on the Dodd-Frank Whistleblower Program on November 15, 2016. The Report analyzes the tips received over the last twelve months by the SEC’s Office of the Whistleblower (“OWB”), provides additional information about the whistleblower awards to date, discusses the OWB’s efforts to combat agreements that chill whistleblowers, and describes the OWB’s recent activity in the anti-retaliation arena.
Breakdown of Tips Received in FY 2016
The OWB reported a modest increase in the number of whistleblower tips and complaints that it received in 2016–4,218 tips in 2016 compared to 3,923 tips in 2015. Overall, the 2016 whistleblower tips were similar in number and type of whistleblower tips reported in 2015. As in 2015, the most common types of allegations in 2016 were Corporate Disclosure and Financials (22%), Offering Fraud (15%), and Manipulation (11%). Most whistleblowers, however, selected “Other” when asked to describe their allegations.
The OWB received whistleblower tips and complaints from all 50 states, the District of Columbia, and Puerto Rico. Domestically, the largest number of whistleblower complaints and tips were from California (547), New York (296), Florida (239), and Ohio (230). Additionally, the OWB received whistleblower tips from individuals located in 67 foreign countries. Of these, the countries from which the largest number of tips originated were Canada (68), the United Kingdom (63), Australia (53), the People’s Republic of China (35), Mexico (29), and India (20), with Germany, Ireland, and Taiwan being other countries from which the SEC received more than 10 tips.
On December 1, 2016, the date that the Department of Labor regulations were set to become effective, the government filed a notice of appeal [link to http://dciconsult.com/wp-content/uploads/2016/12/DOL-appeal.pdf] of the November 22, 2016 the United States District Court for the Eastern District of Texas’s Order granting a nationwide preliminary injunction “from implementing and enforcing” the DOL’s new overtime regulations. Those regulations would have raised the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). The Court’s ruling was based, in part, on its holding that the DOL exceeded its delegated authority by changing the salary basis test at a level that was contrary to Congress’ intent that executive, administrative and professional employees be exempted from coverage of the FLSA. A full copy of the injunction order can be found here. In the wake of the Court’s ruling and now uncertain future regarding the DOL’s new overtime rules, we thought it would be helpful to provide some interim guidance on frequently asked questions we have received since the Court’s ruling. READ MORE
After the Obama administration’s employee friendly policies, employers will have a wish list of changes they believe a Trump administration would favor. Here are ten items that should be at the top and why employers want to see action. READ MORE
On October 24, 2016, U.S. District Court Judge Marcia Crone of the Eastern District of Texas granted a nationwide preliminary injunction enjoining implementation of the Fair Pay and Safe Workplaces regulations. In addition to enjoining implementation of the reporting obligations, the court also enjoined enforcement of the pre-dispute arbitration ban on Title VII claims.
Today, the SEC announced that an Atlanta-based company, BlueLinx Holdings, is settling charges that its severance agreements contained provisions that it in its view might impede employees from communicating directly with the SEC about possible securities law violations. The company has agreed to pay a $265,000 sanction and to engage in other corrective actions as described below.
The specific provision at issue provided:
- Employee further acknowledges and agrees that nothing in this Agreement prevents Employee from filing a charge with…the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other administrative agency if applicable law requires that Employee be permitted to do so; however, Employee understands and agrees that Employee is waiving the right to any monetary recovery in connection with any such complaint or charge that Employee may file with an administrative agency. (Emphasis added.)
With respect to this bounty waiver, the Commission stated that “by requiring its departing employees to forgo any monetary recovery in connection with providing information to the Commission, BlueLinx removed the critically important financial incentives that are intended to encourage persons to communicate directly with the Commission staff about possible securities law violations.”
Last week, Germany’s Financial Supervisory Authority (BaFin) unveiled a centralized platform for receiving whistleblower complaints, including anonymous complaints, of alleged violations of supervisory provisions within the financial sector. The move appears to represent a shift in German ideology toward a more favorable view of anonymous reporting, which for many years was discouraged in Germany and more broadly in the EU due to the risk of “organized systems of denouncement.” Under the new program, whistleblowers may submit reports in writing (on paper or electronically), by phone (with or without recording the conversation), or verbally. BaFin’s press release announcing the program states that it will make the anonymity of whistleblowers a “top priority,” and that it will not pass on the identity of whistleblowers to third parties. The program is “aimed at person with a special knowledge of a company’s internal affairs – for example because they are employed there or have some other contractual relationship or relationship of trust with the company.”
BaFin was required to implement this new platform due to an amendment to the German Act on Financial Services Supervision. Notably, the Act only applies to the financial services sector, not including external accountants, tax consultants and attorneys. It provides that employees working in the financial services sector may not be held liable for reporting potential or actual breaches of law under either employment law or criminal law, unless the report was false or grossly negligent.