On March 5, 2018, the California Supreme Court changed the test for factoring flat sum bonuses into the overtime rate in Alvarado v. Dart Container Corporation of California, ordering a calculation that will increase the costs of overtime for employers who pay such bonuses. Under the federal formula, an employer must divide an employee’s total weekly pay (including non-discretionary bonuses) by the total number of hours the employee worked in a week to get the regular rate; the employer then must pay time-and-a-half that rate for all overtime hours. But under the Alvarado court’s formula, the employer must divide the total weekly pay by only “the number of nonovertime hours the employee [actually] worked during the pay period.” That smaller divisor will lead to higher overtime rates.
Yesterday, the National Labor Relations Board vacated Hy-Brand Industrial Contractors amidst controversy surrounding Member Bill Emanuel’s participation in the decision. That decision leaves intact the Obama-board’s expanded joint employer standard from Browning-Ferris Industries of California, at least until the Board finds another vehicle to overturn the case.
The NLRB’s Office of Inspector General issued a report finding that Member Emanuel should have recused himself from the Hy-Brand decision in light of the close connection between his prior law firm, which represented one of the parties in Browning-Ferris, and the issues in Hy-Brand. The Board noted that report when it issued its Order vacating the decision.
On February 15, 2018, the U.S. House of Representatives passed the ADA Education and Reform Act, HR 620, by a vote of 225 to 192. The bill aims to curb “drive by” public accommodation suits by requiring that potential plaintiffs first give notice to the allegedly offending business – along with the opportunity to fix the problem – before filing an ADA suit.
Following the recent wave of sexual harassment and assault allegations, a wake of news stories emerged about how HR departments have failed to conduct proper investigations into such complaints. Women claimed HR failed to write down their complaints or take any action; one woman claimed HR told her “We don’t want to get involved in this.” The stories asserted that HR “is supposed to protect the company’s interests,” not the employee’s. But as any experienced employment lawyer or HR manager knows, HR cannot protect the company if it conducts a subpar investigation.
Two of the most common harassment investigation missteps include (1) using investigators that lack sufficient training about how to conduct an investigation, and (2) failing to involve legal counsel at the right time.
Earlier this month, the Wage and Hour Division of the Department of Labor reissued 17 opinion letters from the Bush administration. The letters provide employers important guidance on a wide-range of issues under the Fair Labor Standards Act.
The reinstatement marks the first publication of opinion letters since the DOL announced last June that it would bring back that form of guidance. The Obama administration had eliminated the practice and withdrawn many existing opinion letters, including many of those reissued this month.
The reinstated letters do not upend any existing laws, but they provide important guidance and a possible safety net to employers facing similar situations. Many of the reinstated letters concerned application of Section 13(a)(1)’s overtime exemption for executive and administrative employees. The letters also discussed whether certain bonuses must be included in the regular rate for purposes of calculating overtime and whether certain on-call time qualified as compensable working hours.
The letters contain a cover letter noting that someone had specifically asked the DOL to reissue that particular opinion letter. Thus, employers who would like to rely on previously withdrawn opinion letters should consider asking the DOL to reissue them under its new policy.
The California Court of Appeals held late last week that a plaintiff does not have standing to pursue California Private Attorneys General Act (PAGA) claims on behalf of the state or other employees once he accepts an offer to settle his individual claims. The court in Kim v. Reins International California, Inc. B278642 (Dec. 29, 2017), held that once the plaintiff accepted the settlement offer, he no longer qualified as an “aggrieved employee” within the meaning of the statute. The case expands the potential impact of offers of judgment in California wage-hour class actions.
In its fifth major decision in five days, the Board overruled a 2016 decision that limited what changes to terms and conditions of employment that an employer can make without bargaining. In so doing, the Board returned to a broader view of what it means to maintain the “status quo.” In Raytheon Network Centric Systems, 365 NLRB No. 161 (Dec. 15, 2017), the Board held that employers do not need to bargain when “the employer takes actions that are not materially different from what it has done in the past.” In Raytheon, that meant the employer lawfully modified employee medical benefit plans after the CBA expired because the employer had made similar modifications annually for 11 years.
Late Friday evening, the NLRB overruled Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), the decision that permitted unions to organize “micro-units” of employees. In PCC Structurals, Inc., 365 NLRB No. 160, the Board returned to “the traditional community of interest standard” for evaluating the appropriateness of a petitioned-for bargaining unit.
Today, the NLRB issued two landmark cases reversing precedent on the Board’s test for work rules and joint employment. In The Boeing Company, 365 NLRB No. 154, the Board reversed a 2004 decision that prior Boards used to find unlawful “a large number of common-sense work rules and requirements that most people would reasonably expect every employer to maintain.” In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156, the Board overruled the Browning-Ferris joint-employment test and returned to requiring direct control over essential terms and conditions of employment before it will find joint employment status.
On Monday, December 11, 2017, the Board issued a decision holding that Administrative Law Judges can approve an employer’s offer to settle unfair labor practice charges so long as the settlement offer is “reasonable,” even if the general counsel and charging party object to the settlement. The case reverses Obama-era precedent that held that an ALJ can approve a settlement only if the settlement provides “complete relief” for every alleged unfair labor practice. That standard made it impractical for employers to settle unfair labor practice charges because employers received no compromise in exchange for foregoing full-blown litigation.