FLSA Wage Increase

President Obama announced this week a proposed rule change to the Fair Labor Standards Act (“FLSA”) that will affect every business.  The proposed rule change will increase the minimum required salary for employees to qualify as exempt under the FLSA from $455 a week to $970 a week.  Accordingly, this rule will require employers to pay overtime to those employees

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earning $50,440 a year ($970 a week) or less.  It will expand the number of people eligible for overtime from approximately 8 percent of the salaried workforce to about 40 percent according to the fact sheet provided by the Department of Labor.  Under this rule, 5 million more Americas will be entitled to overtime pay.

The new regulation is the most sweeping policy undertaken by the President to assist the middle class, and the most ambitious intervention in the wage economy in at least a decade. Administration aides have warned the new regulation will not always lead to wage increase because in many instances employers might cut back employee hours worked rather than pay the required time-and-a-half. Conservatives and business groups are fiercely opposed to the new policy, which means this executive order, like all executive policies, will be challenged in court and most likely in Congress.

Wage and hour laws are also under reform in Louisville, Kentucky.  This week, a new minimum wage ordinance took place raising wages from $7.25 an hour to $7.75 an hour. On June 29, 2015, a circuit court judge upheld ruled the City’s minimum wage ordinance, but that decision is likely to be appealed.  The law will gradually increase the city’s minimum wage to $9 an hour by July 1, 2017.

In light of these new and proposed regulations, employers will have many considerations.  In Louisville, the main consideration is budgetary.  However, when the FLSA is amended, employers will have to review all current exempt positions and determine if under the new minimum salary requirements those employees will remain exempt.  This, too, has obvious budgetary implications, but it will also impact the overall management and operations of the business.  Employers will be faced with determining whether to provide a salary increase to those employees making less than $970 a week to be within the minimum weekly salary or change their classification to non-exempt allowing for overtime compensation.  This may also require a review of a company’s employee policy manual with regard to when overtime will be approved.

We will be following the changes to the FLSA closely and are available to provide guidance on these issues.

C. Effinger

Cynthia L. Effinger, attorney with McBrayer, McGinnis, Leslie & Kirkland, PLLC is located in the firm’s Louisville office. Ms. Effinger’s practice is concentrated in the areas of employment law and commercial litigation. Her employment law practice is focused on drafting employment manuals and policies, social media, wage and hour, non-compete agreements and workplace discrimination. Ms. Effinger can be reached at ceffinger@mmlk.com or (502) 327-5400.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

Gone, But Not Forgotten – A Deactivated Facebook Account Can Be Discoverable

Courts have long grappled with social media in a legal context. The struggle to understand social media issues — and to craft coherent applicable legal policy — renders Crowe v. Marquette Transportation Co. Gulf-Inland, LLC amusing to show how the less-than-honest actions of an employee-plaintiff can make these difficult legal questions fairly simple for a court.

In May of 2014, Brannon Crowe sued Marquette Transportation, his employer, for an injury to his knee that he claimed to have suffered in an accident at work. Interestingly, however, Crowe allegedly sent a co-worker a message on Facebook which stated that he received the injury during a fishing trip, and not at work. When confronted with the message to the co-worker by opposing counsel during a deposition, Crowe stated the account the message was sent from was Brannon “CroWe,” and it couldn’t be his because he didn’t have a capital “W” in his last name.

Bucharest Romania - Jan 23 2014: Photo of Facebook web page. Facebook is an online social networking service. Its name comes from a colloquialism for the directory given to students at some American universities.

At the deposition, Crowe also said that he no longer had an account after the previous October, and his response to a discovery request for the contents of his account was that, in addition to such a request being vague, overbroad and unduly burdensome, he didn’t presently have a Facebook account. The court ordered Crowe to provide the contents of his account for the court to review in camera to determine if the contents of the account should indeed be discoverable. Later, however, Crowe’s counsel submitted to the court 4,000 pages of Facebook account information from the Brannon CroWe account, with an interesting wrinkle – the records of the account indicate that the account was deactivated – not deleted – four days after the discovery request for the account’s contents.

The court was understandably unamused, and suggested that the in camera review of 4,000 pages of Facebook account information would be a waste of time since this account information should have been produced earlier in response to Marquette’s request. The contradiction with Crowe’s testimony alone was enough to render the account information discoverable. Rather than review the documents fully in camera, the court ordered Crowe to turn over every single page of the Facebook account history to Marquette, as well as any login information for any Facebook accounts Crowe had at that time or in the past, and Crowe was ordered to consent to any authorization for Marquette to subpoena his Facebook information.

In effect, Crowe made the contents of the account discoverable through his attempts to keep it from being discovered, and that made the court’s decision on the issue clear. Luckily for Crowe, he only deactivated the account rather than deleted it, since he had a duty to preserve evidence in litigation. Spoliation of evidence is the negligent or intentional destruction or alteration of evidence that may be required in a lawsuit. Even though the evidence doesn’t look good for Crowe in the present case, had he deleted the account entirely, he would have been subject to the spoliation inference, which is a negative evidentiary inference in favor of the opposing party. A showing that a party has destroyed relevant evidence can lead to punitive sanctions against him as well.

Social media provides an abundant resource of data about a litigant, and both employers and employees alike should be a wary of even private messages sent to others in that context. When employees raise issues against employers in a legal setting, their interactions with coworkers on social media may be discoverable. This case also raises questions about how far those involved in legal proceedings can or should go to protect themselves with regard to their social media accounts. As courts become increasingly comfortable with the legal implications of social media and technology, issues such as evidence spoliation through deactivation and deletion will become more and more prominent as a trap for the unwary.

The legal issues surrounding social media accounts and courts are myriad and complex. For help in making sense of it all, contact the attorneys at McBrayer.

Brittany KochBrittany Blackburn Koch is an associate attorney practicing in the Lexington office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She is a native of Pikeville, Kentucky, and a graduate of Centre College and the University of Kentucky College of Law. Ms. Koch’s practice focuses primarily on family law, employment law, criminal law and civil litigation. She may be reached at bkoch@mmlk.com or at (859) 231-8780, ext. 300.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

Every step you take…can your employer be watching you?

It sounds like something out of an Orwell novel: an employer demands an employee provide electronic notice of her whereabouts at all times, on and off the clock. The employee must now face a choice – protect her privacy outside of work, or lose her job. This is, however, a true story, and one without a happy ending for the employee.

Msecurity guard watching video monitoring surveillance security syrna Arias, a sales executive with the wire transfer company Intermex, was given a company phone and told to install the Xora app. This app performs several employment functions, such as providing a time clock, but it also includes a GPS component that provides data back to her employer at all times. She was told to always have the phone on her and powered on, which meant that the GPS function would report her information back to her employer. Arias complained to her supervisor that, while she didn’t mind the tracking taking place during work hours, she felt that it was an invasion of her privacy to keep tracking her away from work. She later uninstalled the Xora app to protect her privacy, and she was soon fired. On May 5th, 2015, Arias brought suit against her employer for invasion of privacy and unlawful retaliation, among other counts. There has not yet been any further activity of import in the case.

With the increasing ubiquity of GPS-equipped smartphones and apps such as Xora, employers may be tempted to use these tools to track employees. They can give employers a sense of what an employee is doing or how long a task is taking when the employee is offsite, and they can provide ways for employers to determine and improve employee efficiency. While there’s a new wrinkle when ‘bring-your-own-device’ policies might require employees to install apps such as Xora on their personal phones, the phone at issue in the Arias case was company property. The question then becomes whether employers can or should continue to track and receive information about an employee during that employee’s time off the clock.

Invasion of privacy aside, there is no federal law that currently prevents the type of tracking in the Arias case. The question of the propriety of monitoring non-employment employee activity prompts a further exploration for employers, however – could the data from this type of tracking expose that employer to liability under federal laws? For instance, if the employee visits a mosque in her off-hours, and later claims employment discrimination because of her religion, would the employer’s tracking of her movements provide the employer constructive or even actual notice of her religious faith absent other evidence? What if the employer visited a dialysis clinic, or a substance abuse treatment facility? There are a myriad of locations that an employee could visit in his or her off-hours that might provide the employer with more information than the employer should have. This information, in turn, could be viewed as constructive or even actual notice that the employee has a protected condition or is in a protected class, exposing the employer to liability should a discrimination case arise. Keeping tabs on an employee’s conduct away from work may seem desirable to some employers, but too much knowledge about an employee’s off-hours conduct might only hurt an employer in the long run. There is such thing as too much information.

For more information as the Arias v. Intermex case progresses, or for helpful hints on best practices for employers, contact the attorneys at McBrayer.

B. JohnsonBrandon K. Johnson is an Associate in the Louisville, KY office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Johnson practices primarily in the areas of insurance defense, employment law, and general litigation. He can be reached at bjohnson@mmlk.com or at (502) 327-5400.

This article is intended as a summary of state and federal law and does not constitute legal advice.

What Employers Need to Know about Religious Discrimination after EEOC v. Abercrombie & Fitch

It’s rather fitting that the Supreme Court’s decision in EEOC v. Abercrombie & Fitch Stores turns on the idea of one’s belief; it is, after all, a decision about religious discrimination under Title VII of the Civil Rights Act of 1964. The belief at issue, however, is not the belief of the claimant of religious discrimination, but rather the belief of the employer.

Discrimination Underlined With Red MarkerIn Abercrombie, an applicant for a position with an Abercrombie & Fitch store wore a hijab, a headscarf worn out of devotion to the Muslim faith, throughout her interview with the store’s assistant manager. Although the assistant manager determined that she was qualified for the position, the headscarf would be a violation of the store’s “Look Policy,” which prohibits head coverings of any kind. The assistant manager then sought the advice of the district manager, telling him that she believed the applicant wore the headscarf because of her religion. The district manager then suggested that any headwear, religious or not, would be a violation of the store’s policy and then directed the assistant manager not to hire the applicant. At no time did the applicant give the store employees any actual notice of the reason she wore the hijab, nor did she request any accommodation from the store policy to wear one if she were hired.

The crucial question of the case, then, was whether the potential employer needed actual knowledge of the employee’s religious reasons for the headscarf or if the manager’s belief that the hijab may have been part of a religious practice was enough to implicate Title VII. The Supreme Court agreed with the EEOC that actual knowledge was not required if the potential need for a religious accommodation was a motivating factor in the employer’s hiring decision. Because the employer was aware that there may be a need for an accommodation, it showed disparate treatment under Title VII to the applicant due to her religion. The court focused on the language of Title VII in 42 U. S. C. §2000e–2(m), which states that, “an unlawful employment practice is established when the complaining party demonstrates that race, color, religion, sex, or national origin was a motivating factor for any employment practice.” There is no knowledge requirement in the text, merely a prohibition on discriminatory motivating factors in employment decisions. It was significant for the court that some antidiscrimination laws such as the Americans with Disabilities Act do contain knowledge requirements, while Title VII clearly does not.

The Abercrombie case may be the strongest statement yet from the court on Title VII protections for religious discrimination. The import for employers is tremendous, in that an employer cannot merely claim ignorance of actual knowledge of the applicant or employee’s religion when the employer made an employment decision based on the employer’s belief that the person may need a religious accommodation. Employers should take caution when faced with potential religious accommodation issues, and they should evaluate potential trouble spots where otherwise neutral policies such as the appearance policy at issue in this case might conflict with the religious practices of applicants or employees. Simply put, a belief about another’s belief may be enough to rise to a claim of discrimination.

For more information on employment practices and policies and ways employers can accommodate religious practices, contact the attorneys at McBrayer.

B. JohnsonBrandon K. Johnson is an Associate in the Louisville, KY office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. Mr. Johnson practices primarily in the areas of insurance defense, employment law, and general litigation. He can be reached at bjohnson@mmlk.com or at (502) 327-5400.

This article is intended as a summary of state and federal law and does not constitute legal advice.

Morbid Obesity is Not a Disability in Kentucky – For Now

There’s no question that obesity is a national health crisis, with the Centers for Disease Control and Prevention estimating that more than a third of adults in the U.S. are obese. In 2013, the American Medical Association pronounced that it now finds obesity to be a disease, adding more fuel to the fire that suggests individuals afflicted with this disease could be considered “disabled” under the Americans with Disabilities Act (“ADA”). With regard to state law, however, the Kentucky Supreme Court closed the door – at least, for the time being – on disability claims with regard to obesity in the case of Pennington v. Wagner’s Pharmacy, Inc.[1]

Disabled. Single flat icon on white background. Vector illustration.

The Kentucky Civil Rights Act tracks the original text of the ADA closely, defining a disability as “(a) A physical or mental impairment that limits one or more of the major life activities of the individual; (b) A record of such an impairment; or (c) being regarded as having such an impairment.” KRS §344.010. The Kentucky law does not, however, track the language of the amendments to the ADA in 2008 (the Americans with Disabilities Amendments Act (“ADAA”), which expanded the definition of “major life activities” and “regarded as,” among other legally operative phrases. This difference might be crucial in future jurisprudence on the same topic.

In Pennington, a manager told the plaintiff’s supervisor to fire her because of her personal appearance. The plaintiff was morbidly obese and had been so for the duration of her employment. Pennington ultimately could not prove that her obesity was the result of a physiological cause, a prerequisite for a prima facie case of disability discrimination, according to the Kentucky Supreme Court. In other words, an obese person is not a disabled person in the court’s eyes under interpretations of the law in place at the time of Pennington’s firing.

Kentucky’s prohibition on obesity as a disability may not be as final as the Pennington holding suggests. Multiple federal courts have ruled that obesity might constitute a disability under the ADA as amended, and the court in Pennington alluded to the fact that the ADAA does not apply in the present case, as the relevant facts took place before the passage of the act. The court in Pennington noted that “the Kentucky Civil Rights Act was modeled after federal law, and our courts have interpreted the Kentucky Act consistently therewith.”[2] If this interpretation holds true, obese victims of discrimination in Kentucky may see a different result in the future than the one in the present case. The Kentucky Supreme Court stated in no less than three footnotes that the ADAA doesn’t apply in the present case, taking pains in at least one of these footnotes to note that the ADAA indicates a trend to treat morbid obesity as a disability. The court even cited as authority a case that had been explicitly superseded by the provisions of the ADAA. It appears as though the Kentucky Supreme Court, in an unpublished opinion, might have left a trail of breadcrumbs to follow for future interpretations of the Kentucky Civil Rights Act. Obesity as disability in Kentucky is down, but not out, and employers should be wary of adverse actions taken against employees on any basis that could be considered due to their obesity.

For assistance in understanding the holding in Pennington and what may or may not constitute disability under Kentucky’s Civil Rights Act, contact the attorneys at McBrayer.

Cindy EffingerCynthia L. Effinger, attorney with McBrayer, McGinnis, Leslie & Kirkland, PLLC is located in the firm’s Louisville office. Ms. Effinger’s practice is concentrated in the areas of employment law and commercial litigation. Her employment law practice is focused on drafting employment manuals and policies, social media, wage and hour, non-compete agreements and workplace discrimination. Ms. Effinger can be reached at ceffinger@mmlk.com or (502) 327-5400.

This article is intended as a summary of  federal and state law and does not constitute legal advice.

[1] Pennington v. Wagner’s Pharmacy, Inc., ___ S.W.3d ___, 2013-SC-000541-DG (Ky. 2015)

[2] Pennington at 5, quoting Howard Baer, Inc. v. Schave, 127 S.W.3d 589, 591 (Ky. 2003)

 

How Serious is “Serious” under the FMLA?

The Family and Medical Leave Act (“FMLA”) provides protections for eligible employees who must take time off of work to deal with serious medical conditions. These protections, codified at 29 U.S.C. § 2612(a)(1), allow employees time away from work and prevent employers from taking adverse employment actions against the employee as a result of serious medical conditions. At issue, however, is the definition of “serious” – just how serious must a medical condition be to warrant FMLA protection? In the case of Dalton v. ManorCare, the Eight Circuit added yet another to a list of items that aren’t serious enough to trigger the protections of the statute.

Sick Woman Sleeping In BedroomIn Dalton, a nurse at a nursing home was terminated after she had received several warnings about poor performance. She also had been diagnosed with Stage One Chronic Kidney Disease (“CKD”), and these warnings about poor work performance came during her evaluation and treatment of this condition. Her repeated requests for FMLA leave were also denied, prompting her suit against ManorCare. Holding in favor the defendant ManorCare, the Eighth Circuit found that her CKD was not sufficiently serious enough of a health condition to warrant the protections of FMLA. For one thing, it was only Stage One, an early indicator of future problems, but something that can be corrected. For another, the plaintiff’s health conditions did not affect her job performance, and her employer granted every leave request she made for actual medical visits. Finally, the employee’s termination came from poor job performance, not excessive absenteeism due to medical treatment.

It is important for employers and employees alike to note that not only must an employee be eligible for FMLA leave, the health condition itself must also be sufficiently serious. 29 U.S.C. § 2612(a)(1)(D) protects employees from a “serious health condition that makes the employee unable to perform the functions of the position of such employee.” Not every medical condition will qualify for FMLA under this definition, and, in fact, most will likely not. Serious health conditions require inpatient care or continuing treatment by a health provider, and the Department of Labor regulations at 29 C.F.R. § 825.115 suggest that continuing treatment of a serious health condition involves both treatment and incapacity. Short-term conditions such as a cold or the flu, minor ulcers and headaches don’t qualify, and other courts have found that chronic conditions such as depression don’t qualify, either. In Hurely v. Kent of Naples, an Eleventh Circuit case, the court held that not every leave that is medically beneficial for a chronic health condition such as depression qualifies for FMLA protection without a showing that the employee is somehow incapacitated or unable to work.

This determination of seriousness of a health condition protects employers against employees who may use any long-term health condition as a shield against adverse employment actions taken because of employee failures. Courts seem loath to extend FMLA protections too broadly as those protections are highly potent remedies designed to protect employees who are truly in need due to very serious conditions. The FMLA protects employees, but only insofar as their health conditions truly affect their ability to work.

If you need help with addressing FMLA issues or training employees on serious health conditions with regards to FMLA leave and protections, contact the attorneys of McBrayer, McGinnis, Leslie & Kirkland, PLLC.

Amy CubbageAmy D. Cubbage is Of Counsel in the Louisville office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She concentrates her practice in litigation in the areas of employment, complex tort and commercial litigation, including class actions, toxic torts and mass torts. Ms. Cubbage may be reached at (502) 327-5400, ext. 308 or acubbage@mmlk.com.

This article is intended as a summary of state and federal law and does not constitute legal advice.

It Takes Two (Racial Slurs to Support a Claim of Harassment, That Is)

Before we begin the analysis of the recent Fourth Circuit opinion in Boyer-Liberto v. Fontainebleau, let’s take a moment to clear something up: When asking how many times an employee may permissibly hurl a racial slur at another employee, can we all agree that the answer is none? Employers, we beseech you – do not, under any circumstances, allow your employees to berate any other employees with racial slurs. It may not necessarily rise to actionable levels under Title VII, but it is just atrocious and unacceptable behavior (and, as the court in this case noted, it CAN rise to actionable levels under Title VII).

conceptual - a pawn expelled from group

Now that we have that cleared up, let’s discuss the holding in Boyer-Liberto, in which the Fourth Circuit, sitting en banc and reversing an earlier panel opinion, found that two racial slurs from a supervisor were sufficient to support a facial claim of racial discrimination and retaliation.

Ms. Boyer-Liberto, a Black woman, was a waitress at a hotel in Ocean City, Maryland. A restaurant manager twice called her a racial slur (a “porch monkey”) and threatened her with the loss of her job. The manager further referred to her as a “girl,” which on its face is not a racial slur, but becomes racially charged in this context. Boyer-Liberto reported the exchange to higher-ups at the hotel, but her complaint of racial harassment prompted the hotel owner to inquire about her job performance, after which she was sacked.

The Fourth Circuit, sitting en banc, held 12 to 3 that, even though the incidents with the racial epithets involved were isolated, the nature of the language made them extremely serious – serious enough to warrant a jury trial on whether racial discrimination took place. This overturned the decision of the district court, which found that no reasonable jury could find that racial discrimination had taken place – a fact that becomes important in the retaliation analysis.

From a purely legal perspective, the most interesting aspect of this case was the analysis of the plaintiff’s retaliation claim. In a retaliation claim under Title VII, a plaintiff must prove that he or she was involved in a protected activity, that the employer took an adverse employment action, and that there was a causal link between the two events. The protected activity in this case was the reporting of racial harassment to the superiors, the adverse employment action was the employee being fired, and the causal link between the two was that the hotel owner only looked into this employee’s record as a result of the complaint of racial harassment and thereby terminated her. While this seems simple enough, the district court and the original panel, upon determining that no reasonable jury could find that the racial slurs would constitute a hostile work environment, found that Boyer-Liberto could not reasonably believe that a Title VII violation had taken place, and therefore she was not protected from retaliation. The interpretation that an employee must have complained about an incident sufficient to create a hostile work environment to have possessed a reasonable belief that a Title VII violation was taking place came from an earlier Fourth Circuit case, Jordan v. Alternative Resources Corp. The Fourth Circuit explicitly overruled that holding here, finding that the fact that the employee reported an isolated incident of harassment, even if insufficient to show a hostile work environment, was enough to protect her from retaliation for making that report.

This holding is important to employers for a few reasons.

  • Employers should understand that employees should never be allowed to harass or intimidate fellow employees or those that they supervise. Employers should create strict codes of conduct concerning harassment, train employees on them, and enforce them consistently, as this holding shows even a few isolated incidents can give rise to claims of discrimination.
  • Employers (and others) should educate themselves about common racial slurs. In reading the reactions of both the employer and the original judges hearing Ms. Boyer-Liberto’s claims, it appears they did not fully appreciate the egregiousness of the slur. If you as an employer do not understand the seriousness of a slur, you cannot react appropriately.
  • Employers should maintain a clear and open channel for employees to report harassing incidents. One of the cruxes of the court’s opinion in Boyer-Liberto is that employees should feel safe and comfortable reporting unacceptable behavior in the workplace, not afraid for their continued employment for bringing bad actors and actions to light.
  • Finally – and we can’t bang this drum enough – employers should document everything, especially when receiving reports of unacceptable employee behavior or when taking adverse employment actions.

For assistance with creating workplace policies that protect employers and create healthy working environments, contact the attorneys at McBrayer, McGinnis, Leslie & Kirkland, PLLC.

Amy CubbageAmy D. Cubbage is Of Counsel in the Louisville office of McBrayer, McGinnis, Leslie & Kirkland, PLLC. She concentrates her practice in litigation in the areas of employment, complex tort and commercial litigation, including class actions, toxic torts and mass torts. Ms. Cubbage may be reached at (502) 327-5400, ext. 308 or acubbage@mmlk.com.

This article is intended as a summary of state and federal law and does not constitute legal advice.