In an unwelcome, mid-summer surprise for the business community, President Obama signed the Fair Pay and Safe Workplaces Executive Order on Thursday July 31, 2014 requiring federal contractors to report violations of federal and state labor and employment laws and prohibiting certain contractors from requiring that employees arbitrate disputes alleging violations of Title VII or claims for sexual assault or harassment. The Executive Order also requires federal contractors to provide relevant information about hours worked and overtime on employee paychecks.
Following principles that federal courts have applied in similar cases under the Fair Labor Standards Act, a California appellate court recently confirmed that employers are not liable under the California Labor Code for off-the-clock work that occurs without the employer’s actual or constructive knowledge. In Jong v. Kaiser Found. Health Plan, Inc., the California Court of Appeal for the First District affirmed the trial court’s grant of summary judgment for the employer, holding that the employee failed to set forth sufficient evidence to demonstrate that the employer actually or constructively knew that the employee worked unrecorded overtime. Read More
Spring training is just around the corner and major leaguers have already reported to their first workout. Meanwhile, an interesting development–three former minor leaguers have filed a lawsuit against Major League Baseball, Bud Selig, and three MLB teams, claiming that the MLB has failed to pay overtime and minimum wages in violation of the FLSA and various state labor laws. According to the plaintiffs, the MLB “has a long, infamous history of labor exploitation dating to its inception” by hoarding players, depressing salaries, and preventing unionization of the minor leagues. See Complaint, Senne v. MLB, No. 3:14-cv-00608-JCS (N.D. Cal. Feb. 7, 2014), ECF No. 1. The case is presently before Magistrate Judge Joseph C. Spero. Read More
Late last month, in the Southern District of Florida, adult entertainers at several Rick’s Cabaret locations filed a lawsuit alleging that they were improperly categorized (and thus improperly compensated) as independent contractors rather than employees. See Espinoza, et al. v. Rick’s Cabaret Int’l, Inc., Case No. 1:13-cv-24565-UU. In light of recent decisions, Rick’s—like other employers classifying workers as independent contractors—should proceed with caution.
The past several months have seen a spate of rulings adverse to employers in the adult entertainment context. Early last year, a Southern District of New York judge approved an $8 million settlement for a class of dancers at another adult establishment who alleged that they were misclassified as independent contractors. See In re: Penthouse Executive Club Compensation Litigation, Case No. 1:10-cv-01145. In September 2013, in a different S.D.N.Y. case, the court in Hart, et al. v. Rick’s Cabaret Int’l, Inc. found that dancers at the New York club location were employees, not independent contractors, for purposes of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law. And just last week a Northern District of Georgia judge who previously certified a class of adult entertainers who alleged they were wrongly classified as independent contractors granted the entertainers’ summary judgment motion with respect to their status as employees under the FLSA. See Stevenson, et al. v. The Great American Dream, Inc., No. 1:12-CV-3359-TWT.
In finding no independent contractor relationship in Hart, the court cited the existence of club guidelines that governed dancers’ dress/appearance (e.g., body glitter forbidden, 4-inch stiletto heels required), behavior in the club (e.g., gum chewing or using a cell phone on the dance floor prohibited), when dancers could be scheduled to work, various fees dancers were required to pay, and manner of performance (e.g., prohibition on more than one knee touching the ground when performing on stage). Of virtually no significance was the fact that there were signed agreements between dancers and Rick’s Cabaret expressing that the employment relationship was that of an independent contractor.
Irrespective of industry, companies that utilize independent contractors are well advised to periodically reexamine the economic realities of those relationships.
On July 17, 2013, the California Supreme Court denied review of the Second Appellate District’s decision in Gonzalez v. Downtown LA Motors, 2013 Cal. App. LEXIS 257 (Cal. App. 2d Dist. Mar. 6, 2013), which addressed minimum-wage requirements for piece-rate workers. The Court of Appeal held that the employer had to pay a separate hourly rate of at least minimum wage during work time when piece-rate employees are engaged in compensable activity that does not directly produce piece-rates. Read More
Under the Affordable Care Act, employers subject to the Fair Labor Standards Act must provide a “Notice of Coverage Options” to each employee. The purpose of this Notice is to inform employees that they may obtain health insurance through their states’ Health Insurance Marketplace. For current employees, the Notice must be distributed before October 1, 2013. For new employees, the Notice must be given within 14 days after work begins. Read More
Given the difficulty of finding a job in today’s economy, unpaid internships are becoming increasingly popular, particularly for students looking to gain resume-boosting experience. Yet just because someone is willing to work for free and will derive some benefit from an unpaid internship, it does not make it legal under state and federal law. Class litigation regarding unpaid interns is on the rise, and likely will increase even more given the recent ruling in Glatt v. Fox Searchlight Pictures. Read More
On June 18, 2012, a 5-4 split United States Supreme Court held in Christopher v. SmithKline Beecham Corp. that under the most reasonable interpretation of the Department of Labor’s regulations, pharmaceutical sales representatives are exempt from overtime as outside salespersons under the Fair Labor Standard Act. This decision resolves the split in authority between the Ninth and Second Circuits in favor of employers and strikes a blow to the deference accorded to the DOL in interpreting its regulations. Read More
As the nation awaits the Supreme Court’s opinion on the constitutionality of its individual health insurance mandate, some lesser-known provisions of the “Patient Protection & Affordable Care Act” (a.k.a. “Obamacare”) have received short shrift. For instance, the Affordable Care Act also amended the Fair Labor Standards Act (“FLSA”) and requires employers to provide nursing employees with “a reasonable amount of break time to express milk as frequently as needed” for up to one year after a child’s birth. The law also requires all employers subject to FLSA to provide employees with a private place to express milk that is not a bathroom.
While at first blush, this law sounds rather broad, it contains several limitations: Read More