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Real Workplace Issues
March 2011 |
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Greetings!
Welcome to the latest installment of "Real Workplace Issues," a newsletter dedicated to providing our clients and friends with practical, everyday employment law and HR information.
In this issue, we highlight two important U.S. Supreme Court decisions, New Jersey's position on "rounding" work time, and the USDOL's new practice of connecting employees to an attorney referral system. |
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As always, feel free to contact us should you require any assistance, or have any questions regarding the information contained in this newsletter.
Sincerely,
Halpern Employment Law Advisors
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SUPREME COURT UPHOLDS "CAT'S PAW" THEORY OF EMPLOYER LIABILITY
Consider the following situation: An employee works for a hospital, during which time he is also a member of the United States Army Reserve. The employee's immediate supervisor and the supervisor's supervisor are hostile to his military obligations. The immediate supervisor issues the employee a disciplinary warning for allegedly violating a company rule. The supervisor's supervisor accuses the employee of violating the disciplinary warning. The hospital's human resources vice president, who has no problem at all with the employee's military obligations, relies on the accusation of the supervisor's supervisor and fires the employee. The employee sues the hospital for employment discrimination under the United Services Employment and Reemployment Rights Act of 1984 (USERRA) based on the hostility displayed toward the employee's military obligations by both the supervisor and the supervisor's supervisor.
These were the facts before the U.S. Supreme Court in the recent case of Staub v. Proctor Hosp., 131 S. Ct. 1186 (U.S. 2011). The issue in Staub was whether the employer-hospital could be held liable for employment discrimination based on the discriminatory animus of the supervisor and the supervisor's supervisor who influenced, but did not make, the ultimate employment decision to fire the employee. This case - i.e., one in which an employee seeks to hold his/her employer liable for the discriminatory animus of a supervisor who was not charged with making the ultimate discriminatory employment decision - is often referred to as a "cat's paw" case. The term "cat's paw" derives from the Aesop fable in which a monkey induces a cat by flattery to extract roasting chestnuts from a fire. After the cat has done so, burning its paws in the process, the monkey runs off with the chestnuts and leaves the cat with nothing. As the Supreme Court noted in the Staub decision, "[a] coda to the fable (relevant only marginally, if at all, to employment law) observes that the cat is similar to princes who, flattered by the king, perform services on the king's behalf and receive no reward."
In considering this issue, the Supreme Court examined the language of the USERRA statute, which provides in relevant part that "[a]n employer shall be considered to have engaged in actions prohibited...if the person's membership [in the Uniformed Services] is a motivating factor in the employer's action, unless the employer can prove that the action would have been taken in the absence of such membership." 38 U.S.C. § 4311(a) (emphasis added). Based on this language, as well as general principles of tort and agency law, the Court held that "if a supervisor performs an act motivated by anti-military animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA."
The Staub case emphasizes the importance of effective anti-discrimination training, as well as the necessity of having the ultimate decision-maker conduct an independent investigation before making an employment decision. While the Staub case involved claims of employment discrimination under USERRA, the Supreme Court's holding is likely to apply to other anti-discrimination laws that contain similar "motivating factor" language, the most prominent being Title VII of the Civil Rights Act of 1964 (prohibiting employment discrimination on the basis of race, color, religion, sex or national origin).
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FLSA INCLUDES ORAL COMPLAINTS IN RETALIATION PROTECTIONS
The federal Fair Labor Standards Act (FLSA) contains an anti-retaliation provision that forbids employers "to discharge or in any other manner discriminate against any employee because such employee has filed any complaint or instituted or caused to be instituted any proceeding under or related to [the Act], or has testified or is about to testify in such proceeding, or has served or is about to serve on an industry committee." 29 U.S.C. § 215(a)(3) (emphasis added).
On March 22, 2010, in Kasten v. Saint-Gobain Performance Plastics Corp., No. 09-834, the U.S. Supreme Court answered the question of whether the phrase "filed any complaint" in the FLSA's anti-retaliation provision includes oral as well as written complaints within its scope.
According to his former employer, Saint-Gobain Performance Plastics Corp., Kevin Kasten was fired from his job after repeatedly failing to record his comings and goings on the employer's time clock, per company policy. However, Kasten alleged that he was actually fired in retaliation for complaining to company officials that the location of the company's time clocks prevented employees from being properly paid for the time they spent putting on and taking off (i.e., "doffing and donning") their work-related protective gear. In response, Saint-Gobain argued that the FLSA's anti-retaliation provision only protected employees who filed written complaints.
In finding that a narrow interpretation of the phrase "filed any complaint" would undermine the basic objectives Congress intended when enacting the FLSA, the Supreme Court held that the language "filed any complaint" includes oral complaints.
This decision reiterates why employers need to closely monitor employee complaints of employment law noncompliance. One of the first steps employers should take after receiving such a complaint, whether oral or written, is to reiterate to both the complaining employee and management the company's (hopefully well-documented) policy against retaliation. On an interesting side note, the Supreme Court left open the rather large issue of whether oral or written complaints must be filed with a governmental agency in order to invoke the FLSA's anti-retaliation protection, or whether an internal complaint, like the very one at issue in Kasten, could constitute protected retaliation. Stay tuned...
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NEW JERSEY ADOPTS FEDERAL "ROUNDING" RULES
The federal Fair Labor Standards Act (FLSA) regulations recognize that "in some industries, particularly where time clocks are used, there has been the practice for many years of recording the employees' starting time and stopping time to the nearest 5 minutes, or to the nearest 1/10 or quarter of an hour. Presumably, this arrangement averages out, so that the employees are fully compensated for all the time they actually work." See 29 C.F.R. § 785.48(b). The regulation goes on to state that "[f]or enforcement purposes this practice of computing working time will be accepted, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they actually worked."
Until recently, the Division of Wage and Hour Compliance at the New Jersey Department of Labor and Workforce Development had rejected the federal rounding rule and took the position that while the U.S. Department of Labor allows rounding practices that average out "over a period of time," the Division would assess the impact of rounding on a weekly basis and require rounding to be to the benefit of the employee each week. However, in what is good news for New Jersey employers, the New Jersey Department of Labor and Workforce Development has reconsidered its stance on the issue and has formally adopted, verbatim, the USDOL's federal rounding rule.
Good news aside, all employers who round in accordance with federal and New Jersey law must follow these rules to remain in compliance:
(1) the rounding must work both ways (i.e., both for and against the employer);
(2) the rounding increments cannot exceed a quarter of an hour; and
(3) the rounding over time cannot disproportionately benefit the employer.
Employers that fail to follow these rules (e.g., by only rounding in favor of the employer) could be liable for minimum wage and overtime violations.
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USDOL CONNECTS EMPLOYEES TO ATTORNEY REFERRAL SYSTEM
The U.S. Department of Labor's Wage and Hour Division (WHD) is charged with enforcing and remedying violations of the federal Fair Labor Standards Act (FLSA) and Family Medical Leave Act (FMLA). And although the WHD is able to help the majority of affected employees recover denied wages or lost jobs, each year there are thousands of employees whose claims WHD cannot resolve because of capacity issues. In light of this reality, beginning on December 13, 2010, all employees who are informed that the WHD is declining to pursue their complaints will be given a toll-free number to contact a newly created American Bar Association (ABA)-Approved Attorney Referral System. Through this Referral System, the employee will be given the opportunity to retain a qualified private-sector lawyer in their area.
In addition, in situations where the WHD has already conducted an investigation, the information obtained from that investigation regarding violations at issue and back wages owed will be passed along to the employee, and subsequently, to the private sector attorney the employee retains.
The new ABA-Approved Attorney Referral System is likely to cause an increase in wage and hour lawsuits. For more information on the new ABA-Approved Attorney Referral System, including FAQs, see the WHD's website at www.dol.gov/whd/resources/ABAReferralPolicy.htm.
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