Hunton Employment & Labor Perspectives

On March 17, 2016, the U.S. Court of Appeals for the Second Circuit decided Graziadio v. Culinary Institute of America, holding that sufficient evidence existed to find that the Culinary Institute of America’s (“CIA”) human resources director was an “employer” under the Family and Medical Leave Act (“FMLA”) and could therefore be held individually liable for violations of the FMLA. In reaching this decision, the court found that the economic-realities test used to analyze whether an individual is an “employer” under the Fair Labor Standards Act (“FLSA”) should also be used to determine whether an individual is an “employer” under the FMLA. The Second Circuit vacated and remanded the Southern District of New York’s summary judgment decision on the question of individual liability for further consideration under the economic-realities standard. The application of this test likely means an increased risk of individual liability for human resources directors, supervisors, and other members of management charged with violating an employee’s rights under the FMLA.

We have written on several occasions in this space about the NLRB’s controversial new joint employer standard and the damaging impact it may have on business-to-business relationships in the United States.  This morning, Labor & Employment partner Kurt Larkin testified before the U.S. House of Representatives’ Small Business Subcommittee on Investigations, Oversight and Regulations in a hearing on the negative effects the new standard may have on small business.  The House is currently considering an amendment to the National Labor Relations Act that would return the joint ...

The United States Department of Labor (the “DOL”) has announced a Notice of Proposed Rulemaking (“NPRM”) to implement Executive Order 13706, which requires federal government contractors to provide employees with up to 7 days of paid sick leave annually. As a result, the DOL estimates that employers will be compelled to provide additional paid leave to 828,000 employees, including 437,000 employees who do not currently receive any paid sick leave.

Coverage

On March 1, 2016, the United States Equal Employment Opportunity Commission (“EEOC”) sued employers for the first time for sexual orientation discrimination. The EEOC filed lawsuits in federal courts in Pittsburgh and Baltimore against manufacturing and health care employers for unlawful sex discrimination on behalf of employees alleging they were harassed and discriminated against based on their sexual orientation.

On February 12, 2016, the West Virginia legislature overrode Governor Earl Ray Tomblin’s veto of the Establishing West Virginia Workplace Freedom Act and in doing so became the 26th state to enact “right-to-work” legislation.

On March 1, 2016, the Securities and Exchange Commission (“SEC”) settled administrative charges against a popular telecommunications equipment supplier, Qualcomm Incorporated, under the Foreign Corrupt Practices Act (“FCPA”). According to the SEC, in addition to unlawfully providing meals, gifts and entertainment to foreign officials in an effort to win new business, Qualcomm also offered full-time employment and paid internships to family members and friends of foreign government officials in an effort to curry favor. In some cases, it appears these friends and family members would not have otherwise qualified for employment at Qualcomm and special accommodations were made to hire them. To settle the case, Qualcomm agreed to cease and desist from future violations, paid a $7.5 million civil monetary penalty and agreed to other heightened compliance measures.

Under the Fair Labor Standards Act (FLSA), employers who use a tip credit to satisfy their minimum wage obligations for tipped employees must follow certain rules related to those tips.  One of those rules relates to  the use of tip pools – i.e., pooling of tips received by multiple tipped employees and then dividing the total among the pool participants based on a specified formula.  Under Section 3(m) of the FLSA, employers who rely on the tip credit and who require their tipped employees to contribute their tips to a tip-pooling arrangement must ensure that the only employees who participate in the pool are those that “customarily and regularly” receive tips.  This typically means that managers, hostesses, cooks, dishwashers, and other non-tipped employees cannot participate in the tip pool if the employer wants to rely on the FLSA’s tip credit.

The Equal Employment Opportunity Commission (“EEOC”) has issued proposed rules regarding the extent to which employers may offer inducements for providing information about the current or past health status of an employee’s spouse without violating the Genetic Information and Nondiscrimination Act (“GINA”).

We previously have discussed that, as expected, the implementation of the NLRB’s ambush election rules in April 2015 considerably shortened the average time between the date of a petition being filed by a union and the date of election.  This change substantially impacts the employer’s ability to conduct an effective campaign in the event of a union petition.

The Equal Employment Opportunity Commission (“EEOC”) has implemented nationwide procedures which require all EEOC offices to release copies of an Employer's entire position statement, together with all non-confidential documents submitted in support of the position statement, to an Employee who has filed a discrimination charge, or his or her representative (including attorneys). These procedures apply to all position statements requested after January 1, 2016. Previously, such disclosures were made in the discretion of the particular field offices or investigators, and practices were inconsistent. As often as not, EEOC investigators might summarize the Employer’s evidence and arguments for the Employee, in order to solicit the latter’s response.