DOJ Reverses its Position on Class Waiver.

The National Labor Relations Act (“NLRA”) was enacted in 1935 to “to protect the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices.”[1] The Federal Arbitration Act (“FAA”) was enacted in 1925 to encourage private dispute resolution through arbitration.[2] Whether two federal statutes can live in harmony or conflict is often a thing of heated legal debate.

Currently before the Supreme Court of the United States (“SCOTUS”) are three consolidated cases that may put to rest a circuit split, deciding whether arbitration agreements that prohibit employees from joining other employees to pursue worked-related claims, including claims for unpaid minimum wages or unpaid overtime, violate the NLRA.[3] In a rare position reversal, the U.S. Department of Justice filed an amicus brief in which it now supports class waiver by arbitration agreements.

While not among the consolidated cases before the SCOTUS, the Sixth Circuit recently supported workers’ rights, holding that the NLRA does not conflict with the FAA, and since the NLRA creates a substantive, nonwaivable right to engage in concerted activity, arbitration agreements that prohibit concerted activities in any forum are unenforceable.[4] It is important to note that the Sixth Circuit does not say that an arbitration agreement cannot require collective or class claims to be brought in arbitration. Rather, the Sixth Circuit says that an arbitration agreement cannot prohibit an employee from pursuing collective claims, class claims or any other concerted activity in all forums. It is an arbitration agreement’s prohibition against concerted activity that violates the NLRA, not the arbitration agreement’s requirement to arbitrate.

Of course, disagreement on this issue is what the SCOTUS will decide. While the DOL’s shift certainly does not bode well for workers, we are hopeful that the legal arguments presented by the Sixth, Seventh and Ninth Circuits prevail. The power balance between workers and historically more powerful employers is facilitated by workers’ rights to join their individually insignificant damages and resources into collectives.

If you feel that you are not being properly paid wages you’ve earned, and if you think you have no recourse because you signed an arbitration agreement; you should call us for a free consultation. You may have a viable claim in court or in arbitration, and we can help you determine the best course of action after thorough consideration of your situation.

We can be reached at 800-274-5927.

[1] https://www.nlrb.gov/resources/national-labor-relations-act

[2] http://www.legisworks.org/congress/68/publaw-401.pdf

[3] https://www.law360.com/employment/articles/935889/doj-reverses-obama-era-stance-in-class-waiver-suit?nl_pk=535043a8-09cf-4835-9108-d6d87bae778c&utm_source=newsletter&utm_medium=email&utm_campaign=employment

[4] See 6th Cir. Opinion at Nat’l Labor Relations Bd. v. Alternative Entm’t, Inc., No. 16-1385(6th Cir. May 26, 2017)

(Advertising Material:  This Notice is for informational purposes and should not be construed as legal advice).

Department of Labor withdraws 2015 and 2016 informal guidance concerning joint employment and independent contractors.

Whether a worker is classified as an “employee” versus an “independent contractor” has significant ramifications. Indeed, according to the Department of Labor, “[t]he misclassification of employees as independent contractors presents one of the most serious problems facing affected workers, employers and the entire economy.”[1] There are many protections for employees that simply are not available to independent contractors. For example, when an employer misclassifies a worker as an independent contractor rather than an employee, the worker may be denied critical benefits and protections including compensation of at least the minimum wage for all hours worked and/or compensation of at least one and one-half the worker’s regular rate for hours worked in excess of 40 hours per week. Other benefits denied to misclassified workers include FMLA benefits, unemployment benefits, workplace safety benefits, and many others.

Additionally, there are many burdens and savings that employers experience whether a worker is classified as an “employee” versus an “independent contractor.” Not only does misclassification harm workers, but it harms employers that play by the rules because those employers that act unlawfully in this regard enjoy a competitive advantage over the law abiding employers.

Another question is whether an individual is an “employee” is the question of who is the “employer.” Sometimes a potential employer evades lawful obligations by creating sham contractor relationships in order to save labor costs. In such situations, as with others, there arises the question of whether one company is the “employer” or if multiple companies are “employers” under the law; often referred to as “joint employers.”

In an effort to ensure the remedial purposes of the Fair Labor Standards Act are met, the Department of Labor, from time to time, issues regulations, interpretive bulletins or opinion letters intended to clarify or frame questions including whether a worker should be classified as an “employee” versus an “independent contractor” or whether one or more companies are “joint employers” under the law. Such efforts are necessary because many workers have no choice but to agree to a mandated classification of “independent contractor.” Guidance by the Department of Labor does not limit the ability of a sophisticated self-employed entrepreneur from choosing his or her own classification. It hurts those who have but two choices: (1) accept the misclassification; or (2) find other work. These two choices are often no choice at all, especially if the worker lives in an economically depressed region where jobs are hard to come by.

Unfortunately, last week the Department of Labor announced that it is withdrawing its 2015 and 2016 informal guidance concerning joint employment and independent contractors.[2] Because employers typically have more power than the employees, the now withdrawn guidance will further increase the power imbalance against workers.

If you feel that you have been misclassified, call us at 800-274-5297 to schedule a free consultation with on of our attorneys.

[1] https://www.dol.gov/whd/workers/misclassification/#resources

[2] https://www.dol.gov/newsroom/releases/opa/opa20170607

(Advertising Material:  This Notice is for informational purposes and should not be construed as legal advice).

Automatic deductions for meal breaks and the law – what you need to know.

Lunch breaks are an essential part of most employees’ work days. However, many employers do not properly compensate employees for this time. When a lunch break becomes interrupted for any job-related duty, no matter how short the interruption lasts, the employee must be paid for the entire lunch break.

Although the Fair Labor Standards Act (“FLSA”) does not require employers to provide breaks or meal periods to workers, specific rules apply to employers who choose to do so. Employees must be paid for breaks lasting 20 minutes or less. Employers may deduct pay for meal periods only if the break takes 30 minutes or more, so long as the employee is completely free from job duties during this time. If any work activity is performed, the meal doesn’t count as a lunch break and remains paid time.

Employers can run into trouble by implementing “automatic lunch deduction policies” as a shortcut around the FLSA’s requirements.  Rather than have employees clock in and clock out for meal breaks, many employers will automatically deduct break time from employees’ hours each day. The problem with this practice is that wages often go unpaid because it does not take into account work performed during a lunch break—whether that is an employee working straight through their lunch, answering a quick phone call or email from a supervisor during a break, or other interruptions during the break because of any other work-related duties.

If you are an hourly employee and you have questions or concerns about being paid properly when working through your lunch period, call our Columbus employment attorney . We look forward to discussing your concerns with you.  Contact us at 614-221-4221.

(Advertising Material:  This Notice is for informational purposes and should not be construed as legal advice).

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