Author Archives: Gail Farb

Arbitration Update: Eleventh Circuit Finds in Favor of Florida Employers

Florida employers are beginning to benefit from recent U.S. Supreme Court and National Labor Relations Board (NLRB or Board) rulings.  On June 26, 2018, the federal Eleventh Circuit Court of Appeals issued two decisions in favor of Florida employers in which it rejected NLRB rulings that the employers had violated the National Labor Relations Act (NLRA). The cases are Everglades College, Inc. v. NLRB and Cowabunga, Inc. v. NLRB.

Applying the Supreme Court’s Epic Systems decision (for further information on Epic, click here), the Eleventh Circuit held in both cases that the inclusion of class and collective action waivers in these employers’ mandatory arbitration agreements did not violate the NLRA. Additionally, relying on the Board’s Boeing decision (for more information, on Boeing click here), the Eleventh Circuit vacated the NLRB’s holdings that the arbitration agreements were unlawful because employees could “reasonably believe that they were prohibited from filing unfair labor practice charges with the NLRB.”

In Boeing, the NLRB retroactively changed the rationale it used to evaluate the lawfulness of facially neutral employee policies, thus eliminating the broadly applied “reasonably believe” standard that prohibited any rule that could be interpreted as covering protected activity. Without that standard, the Board could not defend its prior decisions in the appeals. Therefore, the Eleventh Circuit remanded the remaining issues in the cases to the NLRB so that it can apply its new Boeing rationale, which does not interpret ambiguities against the drafter and does not ban all activity that could conceivably be included in generalized provisions.

Even with the NLRB General Counsel’s recent memo addressing the application of the Boeing standard (for more on the memo, click here), it is unclear how the Boeing rationale will apply to arbitration agreements. Regardless, employers should remain hopeful as the new standard provides for a more balanced review.

Gail E. Farb
gfarb@williamsparker.com
941-552-2557

[Editor’s Note: Williams Parker attorney Gail E. Farb represented the employer in the Everglades College, Inc. case cited above.]

The NLRB’s Holiday Gift to Employers

The new General Counsel for the NLRB recently issued a memorandum explaining that the NLRB would be moving swiftly to review several of the more controversial, and arguably anti-employer, decisions issued in the last eight years.  On December 14, thirteen days later, on the third night of Hanukkah, nine days before Festivus, and less than two weeks before Christmas, the NLRB took the first steps towards fulfilling this promise, when it issued two employer-friendly decisions that overturned two of the most controversial rulings of the NLRB under the Obama administration.  Happy Holidays, Employers!

First, in Hy-Brand Contractors the NLRB overturned the Browning-Ferris joint employer standard. When issued, the Browning-Ferris decision was shocking as it changed years of NLRB precedent. Through the Hy-Brand decision, NLRB has returned to the long standing test for joint employment that focuses on whether joint control is exercised (rather than merely reserved), whether such control has a “direct and immediate” impact on employment terms (rather than a merely indirect impact), and whether such control is not merely “limited and routine.”

Next, in Boeing Co. & Society of Professional Engineering Employees in Aerospace, the NLRB overturned the somewhat paternalistic Lutheran Heritage standard that has been used to invalidate policies in employee handbooks if it was determined by the NLRB that employees could “reasonably construe” the policy as barring them from exercising their rights under the NLRA. In application, the Lutheran Heritage standard was often applied in a way that caused employers to opine that the NLRB thought employees were lacking in intellect or common sense if they were to construe the policies as chilling or prohibiting their rights.  On pages 3-4 of the Boeing opinion, the NLRB states that the new standard will be as follows:

Under the standard we adopt today, when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, would potentially interfere with the exercise of NLRA rights, the Board will evaluate two things: (i) the nature and extent of the potential impact on NLRA rights, and (ii) legitimate justifications associated with the rule. We emphasize that the Board will conduct this evaluation, consistent with the Board’s “duty to strike the proper balance between . . . asserted business justifications and the invasion of employee rights in light of the Act and its policy,” focusing on the perspective of employees, which is consistent with Section 8(a)(1).

As the result of this balancing, in this and future cases, the Board will delineate three categories of employment policies, rules and handbook provisions (hereinafter referred to as “rules”):

  • Category 1 will include rules that the Board designates as lawful to maintain, either because (i) the rule, when reasonably interpreted, does not prohibit or interfere with the exercise of NLRA rights; or (ii) the potential adverse impact on protected rights is outweighed by justifications associated with the rule. Examples of Category 1 rules are the no-camera requirement in this case, the “harmonious interactions and relationships” rule that was at issue in William Beaumont Hospital, and other rules requiring employees to abide by basic standards of civility.
  • Category 2 will include rules that warrant individualized scrutiny in each case as to whether the rule would prohibit or interfere with NLRA rights, and if so, whether any adverse impact on NLRA-protected conduct is outweighed by legitimate justifications.
  • Category 3 will include rules that the Board will designate as unlawful to maintain because they would prohibit or limit NLRA-protected conduct, and the adverse impact on NLRA rights is not outweighed by justifications associated with the rule. An example of a Category 3 rule would be a rule that prohibits employees from discussing wages or benefits with one another.

Although this standard is somewhat complicated, it should provide employers more confidence in their ability to have appropriate policies for their workplaces, including those that have business justifications which outweigh potential adverse impacts on employees’ protected rights.

In addition to the foregoing, on December 12, 2017, the NLRB issued a Request for Information Regarding Representation Election Regulations and in doing so provided employers with hope that the 2014 “quickie election rule” may eventually be a rule of the past.

Hopefully, the holiday gifts from the NLRB continue through the season.

This post was co-authored by Gail E. Farb and Jennifer Fowler-Hermes.

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557

Jennifer Fowler-Hermes
jfowler-hermes@williamsparker.com
(941) 552-2558

BREAKING NEWS: Overtime Rules Overruled

Employers, the wait is over. You finally have an answer regarding the 2016 overtime regulations. Yesterday afternoon, a Texas federal judge issued an order invalidating the U.S. Department of Labor’s overtime rules that had been set for implementation on December 1, 2016, but preliminarily stopped nationwide only days before by that same judge.

As noted in our earlier blog posts (“Breaking News: Federal Judge Halts Implementation of the DOL’s New Overtime Regulations” from November 23, 2016 and “2016 Overtime Regulations: They Are Still Out There” from June 13, 2017), the DOL had issued a final rule that was predicted to affect over 4.2 million workers, with Florida as the third most effected state. Those workers would no longer be exempt from overtime compensation due to increases in the minimum salary level for “white collar” exemptions from $455 per week ($23,660 annually) to $913 per week ($47,476 annually) and highly compensated employees from $100,000 to $134,000 annually.

The DOL quickly appealed the preliminary injunction to the Fifth Circuit Court of Appeals, which left employers wondering whether the hold would be lifted by the appellate court or the appeal withdrawn. The uncertainty increased on July 25, 2017, when the DOL published a formal Request for Information so the DOL could issue a new proposal related to overtime regulations.

In the order, the court granted summary judgment to the business group and other plaintiffs who had challenged the new overtime rules and issued a final judgment on their behalf. The court held that the white collar exemptions were intended to apply to employees who perform “bona fide executive, administrative, or professional capacity” duties, and that the DOL does not have the authority to use a salary-level test that will effectively eliminate the duties test or exclude those who perform the duties based on salary level alone.  Because the new overtime rules would have “exclude[d] so many employees who perform exempt duties” and are “not based on a permissible construction of [the law]”, the DOL did not carry out Congress’s unambiguous intent, exceeded its authority, and has “gone too far” with the rules.  In sum, the overtime rules have been overruled, and may be disregarded by employers.

Read the full order here.

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557

Employers are Required to Post New Federal Posters This Month

All employers who are subject to the Fair Labor Standards Act’s (“FLSA”) minimum wage provisions and the Employee Polygraph Protection Act (“EPPA”) must post, and keep posted, notices explaining these laws. The notices must be posted in a prominent and conspicuous place in every establishment where they can readily be observed by employees and applicants for employment. These posters have been revised, and as of August 1, 2016, employers must post the revised versions.

You may download the revised posters from the United States Department of Labor (“DOL”) website at:

FLSA:  https://www.dol.gov/whd/regs/compliance/posters/flsa.htm

EPPA:  https://www.dol.gov/whd/regs/compliance/posters/eppa.htm

If you are unsure about whether you are required to post these new federally mandated posters, or would like more information about which federal posters you are required to post, you may access the DOL’s FirstStep Poster Advisor for guidance at: http://webapps.dol.gov/elaws/posters.htm.

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557

Independent Contractor or Employee? That is the Question!

A person can provide services to a company as an employee or an independent contractor depending upon the nature of the relationship between the service provider and the company. Misclassification of employees as independent contractors remains a primary focus of many government agencies, including the IRS, U.S. Department of Labor, Florida Department of Economic Opportunity Reemployment Assistance Programs, and Florida’s Division of Workers’ Compensation.  Investigations by these agencies can be extremely costly, time-consuming, and even lead to personal liability and criminal penalties!

The presentation in the following link explains the detailed federal and Florida tests that are used by these four agencies to properly classify service providers.  It also provides practical examples in which the tests can be applied.  Additionally, the presentation includes guidance to help mitigate the potential for employer liability regarding other wage and hour complexities and pitfalls.

Independent Contractor or Employee? That Is the Question!

Gail E. Farb
gfarb@williamsparker.com
(941) 552-2557