BACK TO THE FUTURE:EMERGING EMPLOYMENT

LAW TRENDSOctober 27, 2015| Mark W. Bakker

NATIONAL LABOR RELATIONS BOARD

NLRB: GOING BACK IN TIME

NATIONAL LABOR RELATIONS ACTCovers most

private-sector employees

“Section 7” rights to engage in “concerted” and “protected” activities with other employees

Protected activities include: • Discussing wages, discipline,

unions• Complaining about policies,

supervisors• Complaining about

terms/conditions of employment

NLRB counsel: not “new” but “catch up”

NLRB POLICY SCRUTINYProhibitions/Policies NLRB Says Can Be “Overbroad”

– Inappropriate Discussions– Social Media – Gossip– Defamation– Disparagement– Privacy/Surveillance/Monitoring– Restricted Use of Company Name, Address and Logo– Confidentiality

NLRB OVERREACH? CONFIDENTIALITY

• Boeing Co. decision handed down August 2015

• Past practice: keep investigations confidential

• Distributed revised notice about confidentiality in investigations

BOEING POLICY ON CONFIDENTIALITY DURING

INVESTIGATIONS

NLRB STRIKES DOWN BOEING POLICY Recommend = Request = Direct

• Communicated clear desire• Employees required to sign• No assurance that employee could decline

Need for Confidentiality > Section 7 Rights

• Opposed to universal application to all investigations

• Articulate legitimate business justification “in this specific situation”

NLRB BEST PRACTICES Avoid “blanket” rules Intentionally consider need for

confidentiality vs. employee rights Memorialize each investigation to

justify confidentiality Modify policies to permit flexibility

NLRB COMPLIANTCONFIDENTIALITY POLICY

Articulate interest– Protect witnesses from

harassment, intimidation, retaliation

– Destruction of evidence concerns

– Prevent cover-up

Articulate future objectives– Company may decide

in some circumstances to maintain strict confidence in investigation

– If Company reasonably imposes such a requirement & employee does not comply – discipline

FUTURE UNDER THE NLRB

The NLRB Is Here To Stay For a While

FAIR LABOR STANDARDS ACT

FLSA: GOING BACK IN TIMEFLSA established in 1938

Minimum Wage and Overtime

EXEMPT VS. NON-EXEMPT STATUSExempt

employees: No overtime

Must meet BOTH

• Duties Test • Salaried Basis

Test

“DUTIES” TEST FOR EXEMPTION“White Collar

Exemptions”

• Executive• Administrative• Professional• Highly Compensated

Employee

EXECUTIVE EXEMPTIONPrimary duties test includes all of the following elements:• management of

enterprise/department• directs the work of 2+

FT employees• authority to hire and fire

ADMINISTRATIVE EXEMPTIONPrimary duties test must

include:• office or non-manual

work • directly related to

management or operations or customers

• exercises discretion and independent judgment concerning matters of significance

PROFESSIONAL EXEMPTION

Primary duties include:• a learned

professional

OR• Work as a creative

professional

SALARIED BASIS TEST(1)Minimum $455/week(2) No reduction for

variations in quality or quantity of work

(3) Pay full salary for any week in which any work performed

• Improper deductions from salary can imperil exempt status!

DOL REGULATION TIMELINE

2004

Salary Threshold Updated

March 13, 2014

Signal that Overtime Regulations Need to

be Modernized & Updated

July 6,

2015

Proposed Regulations Published

September 4, 2015

Deadline for Accepting Written

Comments

2016

Implementation Date?

NEW DOL REGULATION: WEEKLY SALARYMajor Minimum Salary Increase

HIGHLY COMPENSATED EMPLOYEE CHANGES

DOL REGULATIONSalary threshold to be automatically updated based on inflation or wage growth

FIRST STEPS• Identify affected employees• Respond–Raise salaries (avoid overtime)– Lower salaries (offset overtime)–Reclassify to non-exempt hourly

IMMEDIATE IMPACT OF NEW RULE• Increased Labor

Costs• Lost Productivity• Compliance Costs• Employee

“Engagement”

FUTURE TRENDS UNDER NEW RULE

DRAMATIC IMPACT

01

02 “SALARIED BASIS”

03 CONTINUED EXAMINATION

AND AUDIT

04INCENTIVE TO LIMIT OT

EXPOSURE

JOINT EMPLOYER DOCTRINE

JOINT EMPLOYER

JOINT EMPLOYERWhen does situation arise?–Contractor provides workers on site–Temp employees/staffing agency–Leased employees–PEO provides HR functions

Distinguish from “single employer”

JOINT EMPLOYER DOCTRINE

PRIMARY VS.

SECONDARY EMPLOYER

01

02 “SUFFICIENT CONTROL”

03RAMIFICATIONS

ON AGGREGATION AND LIABILITY

04 DIFFERENT TESTS

NLRB: MODIFYING SETTLED LAW

NLRB will consider, but no longer require, that an entity exercise:· direct and immediate

control over employment terms and conditions

· control in more than a limited and routine manner.

NLRB will now find relevant whether the entity:· reserved authority to

control employment terms and conditions

· exercises indirect control of employment terms and conditions

August 2015 NLRB decision changes 1982 doctrine

FUTURE IMPACT OF NLRB CHANGES• Larger entities are more likely to

be joint employers of contractors’ employees– Contractors may be economically

dependant– Greater leverage for advantageous

contract terms• Franchises

TITLE VII (EEOC) & JOINT EMPLOYERFourth Circuit Case

(2015) Butler v. Drive Automotive• Plaintiff: temp staffing

employee • Alleged sexual

harassment• Drive: We aren’t the

employer

Appellate Court: multiple entities could be “employers”

BUTLER FACTORS• Authority to hire and fire the worker• Day-to-day supervision and discipline of the worker• Furnishing of equipment and place of work• Possession of and responsibility over employment records

(payroll, insurance, taxes)• Length of service between the worker and the entity where

he/she works• Provision of formal or informal training to the worker• Similarity of the work to the duties performed by regular

employees of the entity• Exclusivity of the assignment (i.e., whether the worker is

assigned to other entities)• Intent to enter into an employment relationship

BUTLER FACTORS: CONTROLThree “control” factors are more

equal Power to hire and fire

Day-to-day supervision

Dictating where and how work takes place

FUTURE

Titles and Formalities

Economic Reality<

INDEPENDENT CONTRACTORS

INDEPENDENT CONTRACTOR UPDATE

• Increased scrutiny

• Misclassification a DOL “top priority”

DOL INTERPRETIVE BULLETIN 2015-1Test

“economically dependent”

Summary

“most workers are employees”

ECONOMIC REALITIES TEST Is work integral part of employer’s

business? Does worker have opportunity for

profit/loss? Relative investments of

worker/business? Does work require special skill and

initiative? Is relationship permanent or

indefinite? Nature and degree of control over

worker?

WHAT IS NOT DETERMINATIVE AS ECONOMIC REALITY?

Label employer gives the working relationship

Agreement between employer and worker designating or labeling the worker as an IC

Form 1099

FUTURE More workers found to be employees Harder to contract out of employment

relationship Increased liability IRS: Me too!

CRIMINAL BACKGROUND

CHECKS

Mark W. Bakker

Put van of Libyans in this slide

CRIMINAL BACKGROUND CHECKSFair Credit Reporting

Act Litigation Increases

2012 EEOC Enforcement Guidance

EEOC GUIDANCE“Even when employers apply criminal record exclusions

uniformly, the exclusions may still operate to

disproportionately and unjustifiably exclude persons

of a particular race or national origin.”

BUT…. SEPTEMBER 2015

CATCH-22Broader claims for negligent hiring

and negligent entrustment

BEST PRACTICES Eliminate “blanket”/general anti-hire

policies Develop narrowly tailored policy Limit inquiries to “job related” and

“consistent with business necessity” Establish appropriate confidentiality

OTHER EMERGING ISSUES

AND TRENDS

RELIGIOUS RIGHTS IN THE WORKPLACE

ADA LEAVE/ACCOMMODATIONADA

FMLA

Workers Comp

PREDICTING THE FUTURE

THANK YOU

Wyche, P.A. @wychepa Wyche, P.A. wyche.com/atwork