Our colleagues , 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: “New York Paid Family Leave Regulations Finalized: How Do They Compare to Prior Versions?

Following is an excerpt:

On July 19, 2017, the New York State Workers’ Compensation Board (“WCB” or the “Board”) issued its final regulations (“Final Regulations”) for the New York State Paid Family Leave Benefits Law (“PFLBL” or the “Law”). The WCB first published regulations to the PFLBL in February 2017, and then updated those regulations in May (collectively, the “Prior Regulations”).

While the Final Regulations did clarify some outstanding questions, many questions remain, particularly pertaining to the practical logistics of implementing the Law, such as the tax treatment of deductions and benefits, paystub requirements, certain differences between requirements that pertain to self-funding employers and those employers intending to obtain an insurance policy, and what forms and procedures will apply. …

Read the full post here.

Yesterday, the Ninth Circuit issued its opinion in cases involving the Department of Labor’s (“DOL”) “80/20 Rule” regarding what is commonly referred to as “sidework” in the restaurant industry.  Agreeing with the arguments made by our new colleague Paul DeCamp, among others, the Ninth Circuit issued a decidedly employer-friendly decision.  In so doing, it disagreed with the Eighth Circuit, potentially setting the issue up for resolution by the United States Supreme Court.

As those in the restaurant industry are aware, restaurant workers and other tipped employees often perform a mix of activities in the course of carrying out their jobs.  Some tasks, such as taking a customers’ orders or delivering their food, may contribute directly to generating tips.  Other tasks, such as clearing tables, rolling silverware, and refilling salt and pepper shakers—activity generally known in the industry as “sidework”— arguably generate tips indirectly.

In 1988, the DOL issued internal agency guidance purporting to impose limits on an employer’s ability to pay employees at a tipped wage, which under federal law can be as low as $2.13 per hour, if employees spend more than 20% of their working time on sidework.  This guidance, commonly known as the “80/20 Rule,” has led to a wave of class and collective action litigation across the country, including a 2011 decision from the U.S. Court of Appeals for the Eighth Circuit deferring to the Department’s guidance as a reasonable interpretation of the Fair Labor Standards Act (“FLSA”) and its regulations.

Today, the Ninth Circuit issued a 2-1 decision in Marsh v. J. Alexander’s LLC, concluding that the Department’s attempt to put time limitations on how much sidework an employee can perform at a tipped wage is contrary to the FLSA and its regulations and thus unworthy of deference by the courts.

The Department adopted the 20% limitation as a purported clarification of the Department’s “dual jobs” regulation, which addresses employees who work in separate tipped and non-tipped jobs for the same employer.  The Ninth Circuit explained, however, that the 20% limitation on sidework was inconsistent with the statutory notion of an “occupation,” as well as the regulation’s focus on two distinct jobs.

Because the 80/20 Rule did not in reality stem from the statute or the regulations, the Court determined that it constitutes “an alternative regulatory approach with new substantive rules that regulate how employees spend their time” and thus amounts to a “‘new regulation’ masquerading as an interpretation.”

In reaching this conclusion, the Court disagreed with the Eighth Circuit’s analysis and conclusion, noting that “the Eighth Circuit failed to consider the regulatory scheme as a whole, and it therefore missed the threshold question whether it is reasonable to determine that an employee is engaged in a second ‘job’ by time-tracking an employee’s discrete tasks, categorizing them, and accounting for minutes spent in various activities.”

The plaintiffs in these cases may well seek rehearing en banc, and it remains to be seen what approach the Department will take regarding the 80/20 Rule in response to today’s decision. And the split between the circuits certainly suggests that this is an issue that may well be resolved by the Supreme Court.

When: Thursday, September 14, 2017 8:00 a.m. – 4:30 p.m.

Where: New York Hilton Midtown, 1335 Avenue of the Americas, New York, NY 10019

Epstein Becker Green’s Annual Workforce Management Briefing will focus on the latest developments in labor and employment law, including:

  • Immigration
  • Global Executive Compensation
  • Artificial Intelligence
  • Internal Cyber Threats
  • Pay Equity
  • People Analytics in Hiring
  • Gig Economy
  • Wage and Hour
  • Paid and Unpaid Leave
  • Trade Secret Misappropriation
  • Ethics

We will start the day with two morning Plenary Sessions. The first session is kicked off with Philip A. Miscimarra, Chairman of the National Labor Relations Board (NLRB).

We are thrilled to welcome back speakers from the U.S. Chamber of Commerce. Marc Freedman and Katie Mahoney will speak on the latest policy developments in Washington, D.C., that impact employers nationwide during the second plenary session.

Morning and afternoon breakout workshop sessions are being led by attorneys at Epstein Becker Green – including some contributors to this blog! Commissioner of the Equal Employment Opportunity Commission, Chai R. Feldblum, will be making remarks in the afternoon before attendees break into their afternoon workshops. We are also looking forward to hearing from our keynote speaker, Bret Baier, Chief Political Anchor of FOX News Channel and Anchor of Special Report with Bret Baier.

View the full briefing agenda and workshop descriptions here.

Visit the briefing website for more information and to register, and contact Sylwia Faszczewska or Elizabeth Gannon with questions. Seating is limited.

Our colleague Joshua A. Stein, a Member of the Firm at Epstein Becker Green, has a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the hospitality industry: “Start Spreading the News – EDNY Denies Motion to Dismiss Website Accessibility Complaint.”

Following is an excerpt:

While the ADA finished celebrating its 27th anniversary at the end of July, for plaintiffs looking to bring website accessibility complaints in New York the party is still ongoing. Following on the heels of last month’s decision of the U.S. District Court for the Southern District of New York in Five Guys, Judge Jack B. Weinstein of the U.S. District Court for the Eastern District of New York, in Andrews vs. Blick Art Materials, LLC, recently denied a motion to dismiss a website accessibility action, holding that Title III of the ADA (“Title III”), the NYS Human Rights Law and the New York City Human Rights Law all apply to websites – not only those with a nexus to brick and mortar places of public accommodation but also to cyber-only websites offering goods and services for sale to the public. …

Read the full post here.

Our colleague Joshua A. Stein, a Member of the Firm at Epstein Becker Green, has a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the hospitality industry: “As the ADA Turns 27, Recent Developments Suggest No End to Website Accessibility Lawsuits.”

Following is an excerpt:

Today marks the 27th Anniversary of the Americans with Disabilities Act (ADA).  Unfortunately for businesses, two recent developments in the context of website accessibility suggest that there is no reason to celebrate and every reason to believe the ever-increasing wave of demand letters and lawsuits in this area will continue unabated.

First, in Lucia Marett v. Five Guys Enterprises LLC (Case No. 1:17-cv-00788-KBF), the U.S. District Court for the Southern District of New York has finally issued a decision directly speaking to the applicability of Title III of the ADA (Title III) to websites, denying Five Guys’ motion to dismiss, and holding that Title III does indeed apply to websites.  Facing a class action lawsuit brought by serial plaintiff, Lucia Marett, Five Guys sought to dismiss the claim that its website (which, among other things, allows customers to order food online for delivery or pick up at its brick and mortar stores) violated Title III and related state/local statutes because it is inaccessible to the blind, on the grounds that Title III does not apply to websites and, even if it did, the case was moot because Five Guys was in the process of updating its website to provide accessibility.  The Court rejected Five Guys’ arguments.  Citing both the text and the broad and sweeping purpose of the ADA, the Court held that Title III applies to websites – either as its own place of public accommodation or as a result of its close relationship as a service of Five Guys’ restaurants (which the court noted are indisputably public accommodations under Title III).  …

Read the full post here.

Employers often struggle to provide employees with their requested accommodations and to comply with disability laws while still effectively running their business. This struggle has been compounded with the Equal Employment Opportunity Commission’s aggressive pursuit of litigation in this area in recent years.  A New York federal court recently weighed in on the issue in Kelly v. Starwood Hotels & Resorts Worldwide, Inc., 15 Civ. 6309 (DLC), 2017 U.S. Dist. LEXIS 43485 (S.D.N.Y. Mar. 24, 2017), holding that an employer is only required to provide an employee with a “plainly reasonable” accommodation, not the employee’s requested accommodation.

In Kelly, the plaintiff, a service express agent (“agent”) at the Westin Hotel, alleged that Starwood failed to provide her with reasonable accommodations for her disabilities in violation of the Americans with Disabilities Act (“ADA”) and the New York City Human Rights Law (“NYCHRL”).  Agents at the Westin are staffed 24 hours a day across three shifts, morning, afternoon and overnight, and are responsible for answering hotel guest phone calls, and facilitating guest services such as wake up calls and room service.  The shifts are generally determined by seniority pursuant to the collective bargaining agreement but are subject to change depending on the hotel’s staffing needs.

In December 2014, the plaintiff provided Starwood with a doctor’s note indicating that she had been diagnosed with hypertension, hyperthyroidism, osteoarthritis, chronic elbow pain and cardiac arrhythmia, and recommending that the plaintiff avoid working long hours and night shifts, which could exacerbate her condition. The plaintiff requested that Starwood accommodate her by not assigning her to work double shifts or overnight shifts.  Starwood denied the requested accommodation because granting that request would have violated the seniority system dictated by the collective bargaining agreement.  Starwood proposed alternative accommodations that it would make for the plaintiff, including: (1) she would not be required to work double shifts; (2) when she was scheduled to work overnight, Starwood would post a sign-up sheet to allow other employees to volunteer to switch shifts with the plaintiff; and (3) when the plaintiff was unable to switch out of an overnight shift, Starwood would allow her to use paid time off, sick leave or leave pursuant to the Family and Medical Leave Act of 1993 (“FMLA”), with the assurance that she would not be disciplined for doing so.

Despite the fact that the plaintiff did not work a double shift or overnight shift after she requested an accommodation, she nevertheless argued that Starwood violated Federal and City disability laws because it did not provide her with the specific accommodation she had requested. Specifically, the plaintiff maintained that Starwood should have either refrained from assigning her any overnight shifts or should have offered other agents overtime pay as an incentive to take her assigned overnight shifts.

The Court disagreed. In granting Starwood’s motion for summary judgment and dismissing the Complaint, the Court held that “[h]aving offered a plainly reasonable set of accommodations to [the plaintiff], Starwood is not required to do more.”  Even under NYCHRL’s more liberal standard, the Court held that Starwood was not required to provide the plaintiff with the specific accommodation that she requested, but rather any “reasonable accommodation,” which it had done; the Court found that the accommodations offered by Starwood in not assigning the plaintiff to double shifts, and affording her opportunities to avoid working overnight shifts, were reasonable.  Additionally, the Court noted that the plaintiff was unable to identify any essential functions, benefits or privileges of employment from which she was excluded.  On the contrary, the Court held that the accommodations that Starwood offered the plaintiff allowed her to “satisfy the essential requisites of a job” and “to enjoy the right or rights associated with the position.”

Employers defending the reasonableness and sufficiency of an accommodation presented to an employee should take heed of the Court’s analysis in Kelly.  An accommodation need not be the employee’s preferred accommodation.  Rather, an accommodation will meet the statutory requirements so long as it provides the employee with the ability to perform the essential functions of the job, while also enjoying full and equal benefits and privileges of employment.

Chipotle recently obtained decertification of a conditionally certified collective action of salaried “apprentices” under Section 216(b) of the Fair Labor Standards Act (“FLSA”) in Scott et al. v. Chipotle Mexican Grill, Inc. et al., Case No. 12-CV-8333 (S.D.N.Y. Mar. 29, 2017), a case in New York federal court involving claims of unpaid overtime based on misclassification.  In that case, Chipotle effectively leveraged disparities between the job duties and activities of putative class and collective action members across six states to show that they were not similarly situated.

Chipotle could not repeat its success in a more recent FLSA collective action brought by plaintiff employees and former employees filed in Minnesota federal court. In Harris et al. v. Chipotle Mexican Grill, Inc., Case No. 13-CV-1719 (D. Minn. June 12, 2017), hourly employees who worked in Chipotle’s Crystal, Minnesota restaurant asserted claims for unpaid wages and overtime under the FLSA and Minnesota law.  The Minnesota federal court found that the named and opt-in plaintiffs were similarly situated for purposes of pursing their claims in an FLSA collective action, and denied Chipotle’s motion to decertify.

In Harris, five named plaintiffs holding various hourly positions – including crew member, kitchen manager and service manager – claimed that Chipotle had a company-wide unwritten policy of requiring hourly employees to work “off the clock” without pay.  Specifically, the plaintiffs alleged that after the restaurant stopped serving the public and the closing shift ended, employees were required to clock out and continue working until the restaurant was fully cleaned and all work was completed.  Chipotle’s timekeeping system also reset at a certain time each night, automatically clocking out any employee who had not already done so.  These unwritten policies, the plaintiffs alleged, resulted in hours of unpaid work time each week.

Early on in the Harris litigation, the court conditionally certified as a collective employees at Chipotle’s Crystal, Minnesota restaurant who either (1) were automatically punched off the clock by the timekeeping system and continued to work, or (2) otherwise worked “off the clock” during closing shifts, resulting in non-payment of regular wages or overtime wages.  Twenty-three opt-in plaintiffs subsequently filed a consent to join the collective action.

Chipotle argued in its recent motion to decertify that the only “superficial common thread” binding the putative collective action members was the location of the restaurant at which they worked, and that the alleged unpaid after-hours work stemmed from scattered and unrelated causes, rather than a common policy (i.e., managerial directive versus automatic clock-out, among other reasons).  Disagreeing with Chipotle’s argument, the court pointed out that the FLSA collective it had conditionally certified encompassed both types of off-the-clock work, and noted that the collective was “limited to a single store, a single shift, and to a relatively small number of plaintiffs who worked in generally three positions (crew member, kitchen manager, and service manager), for a limited number of general managers and apprentice managers.”  The court also rejected Chipotle’s contention that the alleged FLSA violations were attributable to different types of work for varying amounts of time.  To the contrary, the court held, the collective action members at issue performed the same duties in one restaurant:  cleaning, counting money, prepping food, locking up, and attending meetings. Viewing the facts in this context, the court held that decertification was not appropriate.

The court further found that Chipotle’s assertion of individualized defenses against certain named and opt-in plaintiffs similarly did not warrant decertification, including the following: (1) lack of notice to Chipotle of any work performed after an automatic clock out due to the timekeeping system’s nightly reset; (2) lack of evidence that managers issued directives to work off-the-clock; (3) certain types of activities allegedly performed by the plaintiffs did not constitute compensable work; (4) work allegedly performed off-the-clock was de minimis and therefore not compensable; (5) employees failed to utilize Chipotle’s procedures for accurately recording hours or remedying errors in recorded work time; and (6) criminal history of certain plaintiffs affecting their credibility.  The court held that each of these defenses went to the merits of the plaintiffs’ claims and did not weigh in favor of decertification.

Based on the lack of discernible differences among the named and opt-in plaintiffs, the court found that the issues in the case were appropriate for classwide resolution and that a collective action would serve the interests of judicial economy and more efficiently resolve the plaintiffs’ claims.

* * *

The Harris decision highlights the types of issues owners/operators in the hospitality industry face when defending against collective actions under the FLSA, even those in which the universe of putative plaintiffs may be small or limited to one or two locations.  Minor nuances in the nature of work performed, variety in the reason for the work, and individualized defenses that go to the merits of the claims at issue may not be sufficient to decertify a collective action.  In seeking to obtain decertification, owners/operators should emphasize as many disparities as possible in the policies and practices governing work time and timekeeping that may result in differences that would prevent a putative collective group of employees from being considered a similarly situated class.

Our colleague Joshua A. Stein, a Member of the Firm at Epstein Becker Green, has a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the hospitality industry: “Latest Website Accessibility Decision Further Marginalizes the Viability of Due Process and Primary Jurisdiction Defenses.”

Following is an excerpt:

In the latest of an increasing number of recent website accessibility decisions, in Gorecki v. Hobby Lobby Stores, Inc. (Case No.: 2:17-cv-01131-JFW-SK), the U.S. District Court for the Central District of California denied Hobby Lobby’s motion to dismiss a website accessibility lawsuit on due process and primary jurisdiction grounds.  In doing so, the Hobby Lobby decision further calls into question the precedential value of the Central District of California’s recent outlier holding in Robles v. Dominos Pizza LLC (Case No.: 2:16-cv-06599-SJO-FFM) which provided businesses with hope that the tide of recent decisions might turn in their favor. …

Read the full post here.

Featured on Employment Law This Week – New York City has enacted “fair workweek” legislation.

Mayor Bill de Blasio has signed a package of bills into law limiting scheduling flexibility for fast-food and retail employers. New York City is the third major city in the United States, after San Francisco and Seattle, to enact this kind of legislation. The bills require fast-food employers to provide new hires with good-faith estimates of the number of hours that they will work per week and to pay workers a premium for scheduling changes made less than 14 days in advance.

Watch the segment below, featuring our colleague Jeffrey Landes from Epstein Becker Green. Also see our recent post, “New York City Tells Fast Food Employees: ‘You Deserve a Break Today’ by Enacting New Fair Workweek Laws.”

Our colleague Joshua A. Stein, a Member of the Firm at Epstein Becker Green, has a post on the Retail Labor and Employment Law blog that will be of interest to many of our readers in the hospitality industry: “Nation’s First Website Accessibility ADA Trial Verdict Is In and It’s Not Good for Places of Public Accommodation.”

Following is an excerpt:

After years of ongoing and frequent developments on the website accessibility front, we now finally have – what is generally believed to be – the very first post-trial ADA verdict regarding website accessibility. In deciding Juan Carlos Gil vs. Winn-Dixie Stores, Inc. (Civil Action No. 16-23020-Civ-Scola) – a matter in which Winn-Dixie first made an unsuccessful motion to dismiss the case (prompting the U.S. Department of Justice (“DOJ”) to file a Statement of Interest) – U.S. District Judge Robert N. Scola, Jr. of the Southern District of Florida issued a Verdict and Order ruling in favor of serial Plaintiff, Juan Carlos Gil, holding that Winn-Dixie violated Title III of the ADA (“Title III”) by not providing an accessible public website and, thus, not providing individuals with disabilities with “full and equal enjoyment.”

Judge Scola based his decision on the fact that Winn-Dixie’s website, “is heavily integrated with Winn-Dixie’s physical store locations” that are clearly places of public accommodation covered by Title III and, “operates as a gateway to the physical store locations” (e.g., by providing coupons and a store locator and allowing customers to refill prescriptions). …

Read the full post here.