Back to the Future: Emerging Employment Law Trends

1. BACK TO THE FUTURE:
EMERGING EMPLOYMENT LAW TRENDS
October 27, 2015| Mark W. Bakker

3. NATIONAL LABOR
RELATIONS BOARD

4. NLRB: GOING BACK IN TIME

5. NATIONAL LABOR RELATIONS ACT
Covers 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”

6. NLRB POLICY SCRUTINY
Prohibitions/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

7. NLRB OVERREACH? CONFIDENTIALITY
• Boeing Co. decision handed down
August 2015
• Past practice: keep investigations
confidential
• Distributed revised notice about
confidentiality in investigations

8. BOEING POLICY ON CONFIDENTIALITY
DURING INVESTIGATIONS

9. 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”

10. 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

11. NLRB COMPLIANT
CONFIDENTIALITY 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

12. FUTURE UNDER THE NLRB
The NLRB Is Here To Stay For a While

13. FAIR LABOR STANDARDS ACT

14. FLSA: GOING BACK IN TIME
• FLSA established in 1938
• Minimum Wage and Overtime

15. EXEMPT VS. NON-EXEMPT STATUS
Exempt employees:
No overtime
Must meet BOTH
• Duties Test
• Salaried Basis Test

16. “DUTIES” TEST FOR EXEMPTION
“White Collar Exemptions”
• Executive
• Administrative
• Professional
• Highly Compensated
Employee

17. EXECUTIVE EXEMPTION
Primary duties test includes all of
the following elements:
• management of
enterprise/department
• directs the work of 2+ FT
employees
• authority to hire and fire

18. ADMINISTRATIVE EXEMPTION
Primary 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

19. PROFESSIONAL EXEMPTION
Primary duties include:
• a learned professional
OR
• Work as a creative
professional

20. 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!

21. 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?

22. NEW DOL REGULATION: WEEKLY SALARY
Major Minimum Salary Increase

23. HIGHLY COMPENSATED EMPLOYEE CHANGES

24. DOL REGULATION
Salary threshold to
be automatically
updated based on
inflation or wage
growth

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

26. IMMEDIATE IMPACT OF NEW RULE
• Increased Labor Costs
• Lost Productivity
• Compliance Costs
• Employee “Engagement”

27. FUTURE TRENDS UNDER NEW RULE
DRAMATIC
IMPACT
01
02 “SALARIED
BASIS”
03 CONTINUED
EXAMINATION
AND AUDIT
04 INCENTIVE TO
LIMIT OT
EXPOSURE

28. JOINT EMPLOYER DOCTRINE

29. JOINT EMPLOYER

30. JOINT EMPLOYER
When does situation arise?
– Contractor provides workers on site
– Temp employees/staffing agency
– Leased employees
– PEO provides HR functions
Distinguish from “single employer”

31. JOINT EMPLOYER DOCTRINE
PRIMARY
VS.
SECONDARY
EMPLOYER
01
02 “SUFFICIENT
CONTROL”
03
RAMIFICATIONS
ON AGGREGATION
AND LIABILITY
04 DIFFERENT
TESTS

32. 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

33. 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

34. TITLE VII (EEOC) & JOINT EMPLOYER
Fourth 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”

35. 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

36. BUTLER FACTORS: CONTROL
Three “control” factors are more equal
 Power to hire and fire
 Day-to-day supervision
 Dictating where and how work takes place

37. FUTURE
Titles and
Formalities
Economic
Reality
<

38. INDEPENDENT CONTRACTORS

39. INDEPENDENT CONTRACTOR UPDATE
• Increased scrutiny
• Misclassification a DOL
“top priority”

40. DOL INTERPRETIVE BULLETIN 2015-1
Test
“economically
dependent”
Summary
“most workers are
employees”

41. 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?

42. 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

43. FUTURE
 More workers found to be employees
 Harder to contract out of employment
relationship
 Increased liability
 IRS: Me too!

44. CRIMINAL BACKGROUND
CHECKS

46. CRIMINAL BACKGROUND CHECKS
Fair Credit Reporting Act
Litigation Increases
2012 EEOC Enforcement
Guidance

47. 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.”

49. BUT…. SEPTEMBER 2015

50. CATCH-22
Broader claims for negligent hiring
and negligent entrustment

51. 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

52. OTHER EMERGING ISSUES
AND TRENDS

53. RELIGIOUS RIGHTS IN THE WORKPLACE

54. ADA LEAVE/ACCOMMODATION
ADA
FMLA
Workers
Comp

55. PREDICTING THE FUTURE

56. THANK YOU
Wyche, P.A. @wychepa Wyche, P.A. wyche.com/atwork