Department of Labor

Governor Cuomo Signs Amendment to New York Wage Deduction Law

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On September 7, 2012, Governor Cuomo signed a law that will relax some of the stringent prohibitions against wage deductions under New York Law.  Beginning on November 6, 2012, the law will now permit employers, with voluntary employee consent, to take wage deductions for certain employee benefits such as health club membership dues and cafeteria purchases. (See Amendment to New York’s Labor Law Expands the Universe of Permissible Wage Deductions)  Significantly, Section 193 of the New York Labor Law will now allow employers to take wage deductions to recoup overpayments of wages due to mathematical or clerical errors.  However, the New York Department of Labor is expected to issue regulations on how these overpayments will be allowed to be deducted.  The amendment also imposes heightened requirements on the type of notice and authorizations that employers must obtain from their employees before taking any of the newly authorized deductions, and employers will be expected to keep those authorizations for their employees’ entire career and for six years after the end of employment.  Even with these hurdles, employers will welcome this reprieve from New York’s restrictive wage deduction laws.  Click here to read the full alert.

Christopher v. SmithKline Beecham – Supreme Court holds Pharma Reps Exempt Outside Salespersons

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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 →

Department of Labor Rejects Title VII Framework in SOX Whistleblower Cases

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Whistle

A new opinion from the Department of Labor (“DOL”) makes clear that the department will treat the burden of proof in whistleblower retaliation claims under the Sarbanes-Oxley Act (“SOX”) differently from typical retaliation claims under Title VII.  In an opinion issued in late March – Zinn v. American Commercial Lines Inc. – the DOL’s Administrative Review Board (“ARB”) reversed an administrative law judge’s decision that applied Title VII’s “burden shifting” framework to dismiss Zinn’s whistleblower retaliation claim.  Specifically, the ARB removed the third prong of the traditional “burden shifting” analysis as discussed further below.

Under Title VII, once an employee makes a prima facie case of retaliation, the burden shifts to the employer to provide a legitimate non-retaliatory reason for taking the adverse employment action at issue in the case.  If an employer provides such a reason, the burden then shifts back to the employee to show that the employer’s reasons were actually a pretext for retaliation.  In Zinn, the ARB found it was incorrect to apply this framework and “conflat[e] the SOX burden of proof standard with the Title VII burden of proof.”  Under SOX, the employee needs to show that she engaged in protected activity that contributed to an adverse employment action.  The burden then shifts to the employer to demonstrate, by clear and convincing evidence, that it would have taken the same adverse action absent the protected activity.  However, the ARB clarified that it was unnecessary for the employee to then show that the employer’s actions were pretextual.  Instead, once an employer produces evidence to support that its actions were non-retaliatory, an administrative law judge should “weigh the circumstantial evidence as a whole” to “gauge the context of the adverse action in question” and determine whether the case should proceed.  With this distinct standard and its rejection of the familiar Title VII framework, the DOL has made it evident that SOX whistleblower cases will continue to be a unique and developing area of employment law.