Hospitality Labor and Employment Law Blog

Hospitality Labor and Employment Law Blog

Seventh Circuit Court of Appeals Sides with NLRB on Class Action Waivers and Mandatory Arbitration

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Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the hospitality industry: “Federal Appeals Court Sides with NLRB – Holds Arbitration Agreement and Class Action Waiver Violates Employee Rights and Unenforceable.

Following is an excerpt:

The US Court of Appeals for the Seventh Circuit in Chicago has now sided with the National Labor Relations Board (NLRB or Board) in its decision in Lewis v. Epic Systems Corporation, and found that an employer’s arbitration agreement that it required all of its workers to sign, requiring them to bring any wage and hour claims that they have against the company in individual arbitrations “violates the National Labor Relations Act (NLRA) and is unenforceable under the Federal Arbitration Act FAA).” …

The decision of the Seventh Circuit, finding that the Board’s view was not inconsistent with the FAA, sets the ground for continued uncertainty as employers wrestle with the issue.  Clearly, the question is one that is likely to remain open until such time as the Supreme Court agrees to consider the divergent views, or the Board, assuming a new majority appointed by a different President, reevaluates its own position.

Read the full post here.

Update on DOJ Website Accessibility Regulations and Mobile Accessibility: Employer Considerations

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Our colleagues Joshua Stein, co-chair of Epstein Becker Green’s ADA and Public Accommodations Group, and Stephen Strobach, Accessibility Specialist, have a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the hospitality industry:  “DOJ Refreshes Its Efforts to Promulgate Title II Website Accessibility Regulations and Other Accessible Technology Updates – What Does It All Suggest for Businesses?”

Following is an excerpt:

On April 28, 2016, the U.S. Department of Justice, Civil Rights Division, withdrew its Notice of Proposed Rulemaking (NPRM) titled Nondiscrimination on the Basis of Disability; Accessibility of Web Information and Services of State and Local Government Entities.  This original initiative, which was commenced at the 20th Anniversary of the ADA in 2010, was expected to result in a final NPRM setting forth website accessibility regulations for state and local government entities later this year. Instead, citing a need to address the evolution and enhancement of technology (both with respect to web design and assistive technology for individuals with disabilities) and to collect more information on the costs and benefits associated with making websites accessible, DOJ “refreshed” its regulatory process and, instead, on May 9, 2016, published a Supplemental Notice of Proposed Rulemaking (SNPRM) in the federal register. …

The questions posed in the SNPRM indicate that DOJ is considering many of the issues that Title III businesses have been forced to grapple with on their own in the face of the recent wave of website accessibility demand letters and lawsuits commenced on behalf of private plaintiffs and advocacy groups.  It would be a positive development for any eventual government regulations to clearly speak to these issues.  Conversely, it may be even longer before we see final regulations for Title III entities. …

While most current settlement agreements regarding website accessibility focus on desktop websites, many businesses are anticipating that the next target for plaintiffs and advocacy groups will be their mobile websites and applications.  Such concern is well founded as recent DOJ settlement agreements addressing accessible technology have included modifications to both desktop websites and mobile applications.

Read the full post here.

Employers: DOL Final White Collar Exemption Rule Takes Effect on December 1, 2016

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Our colleagues Jeffrey Ruzal and Michael Kun at Epstein Becker Green have a post on the Wage & Hour Defense Blog that will be of interest to many of our readers in the hospitality industry: “DOL Final White Collar Exemption Rule to Take Effect on December 1, 2016.”

Following is an excerpt:

Nearly a year after the Department of Labor (“DOL”) issued its Notice of Proposed Rulemaking to address an increase in the minimum salary for white collar exemptions, the DOL has announced its final rule, to take effect on December 1, 2016. …

According to the DOL’s Fact Sheet, the final rule will also do the following:

  • The total annual compensation requirement for “highly compensated employees” subject to a minimal duties test will increase from the current level of $100,000 to $134,004, which represents the 90th percentile of full-time salaried workers nationally.
  • The salary threshold for the executive, administrative, professional, and highly compensated employee exemptions will automatically update every three years to “ensure that they continue to provide useful and effective tests for exemption.”
  • The salary basis test will be amended to allow employers to use non-discretionary bonuses and incentive payments, such as commissions, to satisfy up to 10 percent of the salary threshold.
  • The final rule does not in any way change the current duties tests. …

With the benefit of more than six months until the final rule takes effect, employers should not delay in auditing their workforces to identify any employees currently treated as exempt who will not meet the new salary threshold. For such persons, employers will need to determine whether to increase workers’ salaries or convert them to non-exempt.

Read the full post here.

OSHA’s Electronic Recordkeeping Rule: New Pitfalls for Employers

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Our colleague Valerie Butera, a Member of the Firm at Epstein Becker Green, has a post on the OSHA Law Update blog that will be of interest to many of our readers in the hospitality industry: “OSHA’s New Electronic Recordkeeping Rule Creates a Number of New Pitfalls for Employers.”

Following is an excerpt:

On May 12, 2016, OSHA published significant amendments to its recordkeeping rule, requiring many employers to submit work-related injury and illness information to the agency electronically.  The amendments also include provisions designed to prevent employers from retaliating against employees for reporting injuries and illnesses at work.  The information employers provide will be “scrubbed” of personally identifiable information and published on OSHA’s website in a searchable format. …

OSHA plans to rely upon computer software to remove personally identifiable information from these records.  The software will supposedly remove all of the fields that contain identifiers such as the employee’s name, address, and work title, and to search the narrative field in the form to ensure that no personally identifiable information is contained in it.  OSHA’s reliance on a computer system to detect every piece of identifiable information in a narrative is terribly risky and increases the potential for a data breach.

Read the full post here.

NLRB May Make It Harder for Employees to Decertify Unions

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Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the hospitality industry: “NLRB Looks to Make It Harder for Employees to Decertify Unions.”

Following is an excerpt:

National Labor Relations Board (NLRB) General Counsel Richard F. Griffin, Jr., has announced in a newly issued Memorandum Regional Directors in the agency’s offices across the country that he is seeking a change in law that would make it much more difficult for employees who no longer wish to be represented by a union to do so.  Under long standing case law, an employer has had the right to unilaterally withdraw recognition from a union when there is objective evidence that a majority of the employees in a bargaining unit no longer want the union to represent them. …

An employer faced with evidence that a majority of its employees no longer wish to be represented by their union has always faced a difficult choice – whether to petition for an election or to respect its employees’ request and take the risk of charges and litigation by immediately withdrawing recognition. Clear understanding of the law and facts, as well as the potential consequences of each course of action has always been critical.  By issuing this Memo and announcing his goal, the stakes have clearly been raised, and the right of employees to decide—perhaps the ultimate purpose of the National Labor Relations Act—has been placed at serious risk.

Read the full post here.

Maryland Casino May Have to Pay Trainees – Employment Law This Week

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The top story on Employment Law This Week: Casino trainees could be entitled to minimum wage.

The U.S. Court of Appeals for the Fourth Circuit recently revived a class action suit from a group of trainees at a casino in Maryland. Applicants who wanted to work the casino’s new table games were expected to attend a 12-week “dealer school,” during which they went mostly unpaid. Several of the trainees sued, alleging that the practice violated the Fair Labor Standards Act. Though the district court dismissed the case, the Fourth Circuit ruled that the company could be found to be the primary beneficiary of the training and remanded the case for further fact-finding. Our colleague Nathaniel Glasser, from Epstein Becker Green, goes into further detail.

View the episode below or read more about this story in a previous blog post.

Fourth Circuit Decision Highlights Need for Employers to Assess Whether Training Time Should Be Compensated

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CasinoWhether time spent in training is compensable time under the Fair Labor Standards Act (“FLSA”) is an issue that the courts have addressed in a variety of contexts. A new Fourth Circuit decision – Harbourt v. PPE Casino Resorts Maryland, LLC – addressed that issue in the context of pre-hire training provided to some casino workers in Maryland and concluded that the casino workers alleged sufficient facts to proceed with their claims that they should have been paid for pre-hire training.

After Maryland legalized full-fledged casino gambling in November 2012, the state had a supply and demand problem. Casinos had six months to hire workforces before the law went into effect, but they found that there were not enough trained dealers to staff the table games. Maryland Live!’s solution was to create a “dealer school.”

Needing approximately 830 dealers to work its 150 table games, the casino vetted more than 10,000 applicants to participate in a free, twelve-week instructional program to equip them with the skills needed to work as dealers at Maryland Live! The trainees attended 20 hours of instruction per week, receiving training in techniques that the trainees contend were specific to Maryland Live!’s operations

The trainees were not paid for attending the program, and, after completing much of the school, some of the trainees filed a putative class and collective action lawsuit alleging that they should have been compensated as employees under the Fair Labor Standards Act (“FLSA”) and Maryland state law for time spent attending the dealer school.

Maryland Live! moved to dismiss the lawsuit, which was granted by the District of Maryland. The Fourth Circuit reversed, allowing the lawsuit to proceed. In reaching its decision, the Fourth Circuit applied the “primary beneficiary” test to determine whether the attendees were “trainees” who were not eligible for compensation, or “employees” who were eligible. In so doing, the Fourth Circuit reaffirmed prior precedent and joined the Second and Eleventh Circuits in rejecting the application of the U.S. Department of Labor’s six-factor test to determine whether an individual is a trainee or employee.

The court concluded that the plaintiffs had alleged sufficient facts to state a claim that the casino was the primary beneficiary of the school such that the attendees would be “employees” under the FLSA.

In reaching the decision to permit the lawsuit to proceed, the court rejected the casino’s argument that it could not be the primary beneficiary of the school because the trainees did not interact with customers and the casino did not receive any monetary benefit from their training. Rather, the plaintiffs sufficiently alleged that the casino received an immediate benefit — “an entire workforce of over 800 dealers trained to operate table games to the casino’s specification at the very moment the table games became legal.”

Because the Fourth Circuit addressed this issue in the context of a motion to dismiss, it only considered the sufficiency of the plaintiffs’ allegations. Maryland Live! will have an opportunity to rebut the plaintiffs’ allegations as the case proceeds.

While Maryland Live! may still establish that the trainees, and not the casino, were the primary beneficiaries of its dealer school such that their training time is not compensable, the decision to permit the lawsuit to proceed highlights the need for employers to review their own policies and practices relating to training. Employers that have training programs that do not pay attendees for their time should review those programs closely to determine whether they are for the primary benefit of the attendees and, if not, consider either paying the attendees for their attendance or restructuring them so that they primarily benefit the attendees, not the employer.

Among other things, employers who wish to implement or continue unpaid training programs should:

  • Ensure that attendees do not expect to be paid for the training;
  • Provide skills that are transferrable to other potential employers, rather than skills that are specific to the employer’s workplace;
  • To the extent possible, provide the training in an educational environment rather than the employer’s workplace.
  • In the context of internships, attempt to tie the training to a formal education program for the student or intern.
  • Not guarantee jobs to the attendees at the end of the training program; and
  • Not require the attendees to perform work that will displace current workers.

DOL Releases New Poster and Employer’s Guide to FMLA

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Hospitality employers should note that the Department of Labor’s Wage and Hour Division (“DOL”) has just released a new Family Medical Leave Act (“FMLA”) poster and The Employer’s Guide to The Family and Medical Leave Act (“Guide”).

New FMLA Poster

The FMLA requires covered employers to display a copy of the General FMLA Notice prominently in a conspicuous place. The new poster is more reader-friendly and better organized than the previous one. The font is larger and the poster contains a QR code that will connect the reader directly to the DOL homepage. According to the DOL, however, the February 2013 version of the FMLA poster can continue to be used to fulfill the FMLA’s posting requirement.

The Employer’s Guide to The Family and Medical Leave Act

According to the DOL, the Guide is intended to provide employers with “essential information about the FMLA, including information about employers’ obligations under the law and the options available to employers in administering leave under the FMLA.” The Guide reviews issues in chronological order, beginning with a discussion of whether an employer is covered under the FMLA, all the way through an employee’s return to work after taking FMLA leave. The Guide includes helpful “Did You Know?” sections that shed light on some of the lesser-known provisions of the FMLA. The Guide also includes hyperlinks to the DOL website and visual aids to improve the reader’s experience. Overall the Guide helps navigating the complex FMLA process; however, it does not provide any guidance beyond the existing regulations.

NLRB Argues “Misclassification” of Independent Contractors Is Unfair Labor Practice

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Our colleague Steven M. Swirsky, a Member of the Firm at Epstein Becker Green, has a post on the Management Memo blog that will be of interest to many of our readers in the hospitality industry: “NLRB Argues ‘Misclassification’ as an Independent Contractor Is Unfair Labor Practice.”

Following is an excerpt:

In a further incursion into the area of the gig and new age economy, the Regional Director for the National Labor Relations Board’s Los Angeles office has issued an unfair labor practice complaint alleging that it is a violation of the National Labor Relations Act (the “Act”) for an employer to misclassify an employee as an independent contractor. …

The issuance of the complaint in this case comes less than a month after the Board’s General Counsel issued General Counsel Memorandum 16-01, Mandatory Submissions to Advice, identifying the types of cases that reflected “matters that involve General Counsel initiatives and/or priority areas of the law and labor policy.”  Among the top priorities are “Cases involving the employment status of workers in the on-demand economy,” and “Cases involving the question of whether the misclassification of employees as independent contractors,” which as reflected in the IBT complaint the General Counsel contends violates Section 8(a)(1) of the Act.

Read the full post here.

Paid Parental Leave in San Francisco: Employer Alert

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Our colleagues Steven R. Blackburn and Elizabeth J. Boca, attorneys at Epstein Becker Green, have a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the hospitality industry: “San Francisco Paid Parental Leave.”

Following is an excerpt:

Under the proposed San Francisco ordinance, for up to six weeks employers must bridge the gap between the amount the employee receives in PFL and one-hundred percent of the employee’s gross weekly wages (referred to as “Supplemental Compensation”) for parental bonding purposes.  In other words, the employer must pay the remaining forty-five percent of the employee’s gross wages. However, if the employee is already receiving the maximum weekly benefit under the PFL law, the employee’s gross weekly wage is calculated by dividing the maximum weekly benefit amount by the percentage rate of wage replacement provided under the PFL.

Read the full post here.

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