Have a general question about employment law? Want to share a story? I welcome all comments and questions. I can't give legal advice here about specific situations but will be glad to discuss general issues and try to point you in the right direction. If you need legal advice, contact an employment lawyer in your state. Remember, anything you post here will be seen publicly, and I will comment publicly on it. It will not be confidential. Govern yourself accordingly. If you want to communicate with me confidentially as Donna Ballman, Florida lawyer rather than as Donna Ballman, blogger, my firm's website is here.

Friday, August 15, 2014

"Jail 'Em" Says Pennsylvania Senator About Employers Who Misclassify

I've written here recently about the one-sided Criminalization of Employment Law. It seems that employees are getting tossed in jail while scofflaw employers sail off in their yachts laughing at the 99%. Well, at least one state Senator is doing something to balance things out.

Senator Mike Stack has proposed a bill in Pennsylvania to toss employers who misclassify employees in jail. Employers who declare employees to be independent contractors are illegally avoiding paying worker's compensation premiums, overtime and employment taxes, and at least Senator Stack is doing something about it.

Pennsylvania already has a law, as do many other states, providing civil penalties to employers who misclassify, but it isn't working. Employers are wiping their collective you-know-whats with this law and the Fair Labor Standards Act. Some states have cut deals with the Department of Labor to help enforce these laws. However, Pennsylvania reports that only 1/3 of pending cases have been resolved.

This new proposed law will allow prosecutors to step in and press criminal charges against recalcitrant employers. Stack said this about the need for the law: “Pennsylvania’s record of enforcement is a disservice not only to working families, but also to every taxpayer in the state. Federal officials understand that misclassification of workers means payroll taxes are not withheld, resulting in reduced tax collections. Everyone pays while a few benefit.”

While some state and local governments have passed wage theft laws cracking down on nonpayment of wages, wage theft remains rampant. Some municipalities have tried to deny licenses to thieving employers. Some states are finally passing laws that allow prosecution of wage thieves, but they're a small minority. There have been some prosecutions, but employers landing in jail are few compared with employees being prosecuted for trade secrets, eating cookies, blowing the whistle, and being disloyal.

This proposed bill in Pennsylvania may help balance the equities. After all, it hurts legitimate businesses, taxpayers and voters to have employers running around evading taxes, injuring employees without having insurance, and not paying wages. Will legislators in other states (yeah, I won't hold my breath in Florida) follow suit? Will we finally start demanding these corporation-persons be held accountable for their misdeeds?

Stay tuned.

Friday, August 8, 2014

President Obama Orders Contractors To Disclose Labor Violations, Stop Mandatory Arbitration

In a gutsy and controversial move, President Obama signed an executive order placing new tough restrictions on federal contractors. If your employer contracts with the federal government it may have to disclose all labor violations in order to bid, and also have to stop mandating arbitration of employment disputes.

The pre-bid disclosure language is tough. It requires anyone bidding for a contract of $500,000 or greater to disclose:
[A]ny administrative merits determination, arbitral award or decision, or civil judgment, as defined in guidance issued by the Department of Labor, rendered against the offeror within the preceding 3-year period for violations of any of the following labor laws and
Executive Orders (labor laws):
(A) the Fair Labor Standards Act;
(B) the Occupational Safety and Health Act of
(C) the Migrant and Seasonal Agricultural Worker
Protection Act;
(D) the National Labor Relations Act;
(E) 40 U.S.C. chapter 31, subchapter IV, also known as the Davis-Bacon Act;
(F) 41 U.S.C. chapter 67, also known as the Service Contract Act;
(G) Executive Order 11246 of September 24, 1965
(Equal Employment Opportunity);
(H) section 503 of the Rehabilitation Act of
(I) 38 U.S.C. 3696, 3698, 3699, 4214, 4301-4306, also known as the Vietnam Era Veterans' Readjustment Assistance Act of 1974;
(J) the Family and Medical Leave Act;
(K) title VII of the Civil Rights Act of 1964;
(L) the Americans with Disabilities Act of 1990;
(M) the Age Discrimination in Employment Act of
(N) Executive Order 13658 of February 12, 2014
(Establishing a Minimum Wage for Contractors); or
(O) equivalent State laws, as defined in guidance issued by the Department of Labor.
This means employers won't be able to hide under the confidentiality of arbitrations any longer. They'll have to disclose safety violations, unpaid wages and discrimination/retaliation violations. Employers won't have to disclose settlements, so this will be an extra incentive for them to resolve claims quickly.

The arbitration language will be pretty easy for employers to get around. It only applies if the bid is for a contract of $1 million or more, and it doesn't apply if the employee has an arbitration agreement in place before the bid is made. You can expect employers to start racing around demanding employees sign arbitration agreements right before the bid goes out. However, employers whose contracts say they can change the terms of the contract (which most of them say) will still be out of luck on mandatory arbitration, so you may still be able to force them into court.

There are some other nice provisions of this order, like paycheck transparency and providing guidance to contractors to help them improve, so if you want to see the whole order, it's here.

This order comes on the heels of orders requiring contractors to pay a minimum of $10.10/hour, stop discriminating based on sexual orientation, and stop retaliating against employees who compare and discuss pay.

The message is clear: the United States is going to stop wasting taxpayer dollars on companies that don't comply with U.S. laws. It's about time.

Wednesday, August 6, 2014

Fourth Florida Court Recognizes Gay Marriage

Adding to the landslide of cases coming down in Florida, a Palm Beach court ruled that it must recognize a Delaware same-sex marriage. In this case, another silly result from Florida's constitutional amendment banning recognition of same-sex marriages was that a widower couldn't be designated as a personal representative for his spouse's estate.

“There is no justification in denying Mr. Simpson the privilege of acting as the fiduciary, based solely on the gender and sexual orientation of his now-deceased spouse,” ruled the judge.

No clerks of court have started issuing marriage licenses in Florida, and all the cases are stayed pending appeal. I'll keep you posted here of the latest developments.

And now that I have your attention, I want to remind you that the American Bar Association's nomination period for the ABA Blawg 100, in which this blog has had the honor of being included the past several years, ends Friday at 5 p.m. Eastern time. The nomination form is here. If you enjoy my posts, I'd sure appreciate your nomination. They'll ask you for some links to posts you liked. Some I can suggest are:

When Is A Company A Joint Employer With Its Franchise Operators?

Tuesday, August 5, 2014

Third Florida Court Strikes Gay Marriage Ban (But No Licenses Being Issued Yet)

Broward County Circuit Judge Dale Cohen ruled Monday that the silly Florida constitutional amendment saying Florida won't recognize gay marriages done in other states is unconstitutional. No surprise there. In this new case, Judge Cohen couldn't grant a divorce without first acknowledging there was a marriage. The amendment would force gay couples who move to Florida to be trapped in marriages. Can you say Full Faith and Credit?

The ruling was stayed, just like the ones in Key West and Dade. In the meantime, folks on both sides of the issue are pushing for the Florida Supreme Court to weigh in on the issue.

I'm still waiting for some brave clerk of court to start issuing licenses, but none have yet. I think it's their duty as officers who obey the constitution to issue marriage licenses to gay couples. If couples do apply and are turned away, they may have some nice legal claims since the clerks are on notice that failure to issue is a constitutional violation. Stay tuned.

Friday, August 1, 2014

When Is A Company A Joint Employer With Its Franchise Operators?

The National Labor Relations Board made a finding that has caused management-side employment lawyers to blow several gaskets, namely, that McDonald's is a joint employer with a franchise owner and is thus responsible for labor law violations that occurred in a McDonald's workplace. And you're thinking, "duh," right? I mean, why wouldn't McDonald's be responsible for what happens in a McDonald's?

As with everything else in my chosen profession, it's not that simple. For many years, corporations have escaped liability for discrimination, labor law issues, overtime and unpaid wages by pointing the finger at the poor schmo who bought a franchise from them instead of manning up and taking responsibility for what happened under their name. (And yes, I said "manning," which could be sexist, but if companies are people and what kind of people is based on who is on the board, then almost all corporations are male people, aren't they?)

In general, two employers are considered joint employers if both exert significant control over employees. There are lots of complicated tests for this that make sense only to lawyers. I've pretty much always thought that franchisors (the parent companies) should be considered joint employers under most of these tests, but the companies have frequently managed to escape liability.

In the McDonald's case, employees were able to show that McDonald's provides software to franchise operators that tells them how many employees should work at any given time, and that the company also weighed in on how much employees should be paid. I can also point to some other types of control these parent companies have. They frequently train employees or provide training materials, provide uniforms, inspect uniforms, decide the very specifics of how employees are to do their jobs all the way down to portion size and customer greetings, send secret shoppers to gauge how employees are performing, and exercise other control over these employees.

Why do we care? Two reasons:

  • Deep pockets: While the small company that bought the franchise may be tiny and barely solvent, the mega-parent companies can usually pay big bucks judgments.
  • Counting employees: Federal discrimination laws don't cover employers with fewer than 15 employees. Family and Medical Leave Act doesn't kick in unless the employer has 50 employees within a 75 mile radius of the employee work location. There are quite a few employment laws that require minimum numbers of employees. If you can count all the franchises and parent-owned entities, you can count to 15 or 50 pretty easily, which means liability on both parent and franchise owner.

This ruling will have parent companies scrambling to exercise less control over franchise operations, which, in my opinion, is penny wise and pound foolish. If you can't count on all McDonald's restaurants looking the same, serving the same quality food and having employees look and act the same, they lose their brand. Instead, companies should be scrutinizing their franchises to make sure they are complying with employment laws instead of saying, "It's not my problem."

Saturday, July 26, 2014

Miami-Dade Court Rules In Favor Of Gay Marriage

As I predicted yesterday in my post about the Key West ruling favoring gay marriage, the other Florida courts that have cases pending on same-sex marriage are starting to rule. Miami-Dade Judge Sarah Zabel ruled yesterday (after my blog post) that denying gay marriage violates the Equal Protection Clause of the U.S. Constitution.

Don't rush to Miami yet. The judge stayed her ruling pending appeal.

Will any Florida clerks of court have the guts to start issuing licenses because they swore to uphold the U.S. Constitution? The BoulderDenver and Pueblo Colorado clerks did. Stay tuned.

Friday, July 25, 2014

Now That Florida Has Gay Marriage, How Does That Affect Employee Rights?

Okay, okay. I know we don't have gay marriage in Florida quite yet. The July 17 Florida ruling on gay marriage only applies to the Keys, and it's stayed pending appeal. Still, there are multiple cases pending around the state, and it's only a matter of time before someone starts issuing licenses and performing marriages.

How does that affect employee rights? There are several ways Florida employees and employers will be impacted once gay marriage starts happening in Florida, so start preparing now:

Family and Medical Leave: Because FMLA applies to leave for care of spouses, Florida employers will have to start granting leave for gay employees who are married. If you have a sick partner and are married, you may qualify for FMLA leave, assuming your employer is large enough and you've been there at least a year. Start gathering those forms and have them ready for your spouse's doctor to fill out so you can put in for leave once you're married if your partner is sick.

Pensions: Spousal benefits will have to be updated to include gay married couples. You will need to make sure you adjust any defined benefit plans if you want to include your new spouse.

Benefits: Health and life insurance will have to be updated to include spouses of gay employees. If your new spouse needs coverage, you need to contact HR to get them on the plan ASAP.

Marital status discrimination: While it still isn't illegal in Florida to discriminate based on sexual orientation, except in some counties and cities, it will be illegal to discriminate against employees just because you don't believe in gay marriage or don't like that they married a same-sex partner. If your employer starts treating you differently after your marriage, you may have a discrimination claim.

Tax filing status: Once you're married, you'll be able to update your tax filing status and employers will have to deal with updated W-4 forms with revised withholdings.

Confidentiality: If you have an agreement that says it can't be disclosed to anyone but your spouse, you may now disclose it to your married partner. This is one of the things I always have to caution unmarried couples, gay or straight about. You could be severely sanctioned if you tell a boyfriend/girlfriend/partner about, say, how much severance you got. All they have to do to mess you up is tell the employer they know what you got and all hell will break loose. Once you're married, you can probably tell and not be sanctioned for it.

Privilege: I absolutely hate having to exclude gay partners from attorney-client meetings, but it's necessary so there's no waiver of attorney-client privilege. Once you're married, your spouse can attend even attorney-client meetings with your permission.

Start planning now, because it's going to start happening very soon. Have your plan in place as to how you will protect your spouse before you say, "I do." And Florida employers, best have your management-side lawyer start updating your policies and forms to make sure you aren't caught flat-footed.