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January 5, 2012

First Annual Written Pay Notice under the New York Wage Theft Prevention Act Due by February 1, 2012

            2012 is the first year that private-sector New York employers must provide the annual written pay notice required by the Wage Theft Prevention Act.  Although the initial passage of the Wage Theft Prevention Act over a year ago garnered significant attention, it is worth reiterating now that the February 1 deadline for provision of the annual notice is rapidly approaching and employers should use the remaining time to ensure compliance with the new notice obligations.

           

            On December 14, 2010, then-Governor David Paterson signed the Wage Theft Prevention Act, S. 8380/ A. 11726 (the "Act"), into law in New York State, which amended Section 195 of the New York Labor Law.  Joining a growing number of states with similar wage theft legislation, the Act sought to address classification of employees and payment of statutorily-mandated minimum wages and overtime, and included enhanced civil and criminal penalties for non-compliance.  In effect since April 9, 2011, the requirements applies to all private-sector employers in New York.

 

            Under the Act, every employee, whether full or part-time, whether covered by a union contract or not, and regardless of exempt status, must receive a written pay notice between January 1 and February 1 of each year, including the following information:

  • the employee's rate of pay, including overtime rate of pay, if non-exempt;
  • the basis of the wage payment (e.g., by  the  hour, shift, day, week, salary, piece, commission, or other); 
  • the regular payday;
  • the allowances taken as part of the minimum wage (e.g., tip, meal and lodging deductions); 
  • the employer's official name and any other "doing business as" names; and 
  • the address and phone number of the employer's main office or principal location, and mailing address if different. 

           

2012 is the first year that employers must provide the annual written pay notice, which applies even if none of the information has changed from the prior year.          

 

            Under the Act, the notice must be provided in English and in the employee's primary language if the New York Department of Labor ("NY DOL") offers a translation.  Currently, the NY DOL offers dual language translations in Chinese, Haitian Creole, Korean, Polish, Russian, and Spanish, all of which are available here.  Employers with seasonal employees on layoff between January 1 and February 1 must furnish the notice as soon as the employees return from layoff.  The notice may be distributed electronically, but only if employees' receipt of the notice and acknowledgment is verifiable and if the employee is able to print a copy for their records. 

 

            In addition, the Act requires employers to obtain a signed and dated acknowledgment of the notice from each employee.  Employers must retain copies of the notice and accompanying acknowledgment for six years, and provide them to the NY DOL upon request.  If an employee refuses to acknowledge the notice, an employer should still give the notice and note the refusal on its retained copy.  Moreover, an employee cannot waive the written notice requirement.  The NY DOL can assess penalties of $50 per week per employee if a proper written notice is not provided, and employees can sue for not receiving a proper written notice with damages capped at $2,500 per employee. 

 

            With the February 1, 2012 deadline rapidly approaching, employers should take any remaining steps necessary for to meet the annual notice requirements.  The NY DOL provides web-based, printable model templates for employers seeking guidance, which are available here.  The Act does not require the use of these particular forms, and employers may develop their own forms so long as all the information legally required is included.  The NY DOL has also published a Fact Sheet on the Act, available here, and a set of FAQs, available here.

 

            This post was authored by Matt Lampe, Joseph Bernasky, and Jenny Ma of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

 

 

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January 12, 2012

Spotlight On Legal Complexities Of Telecommuting After Second Circuits Calls It Potential Reasonable Accommodation

            The Second Circuit Court of Appeals recently ruled that telecommuting is a potential reasonable accommodation under the Americans with Disabilities Act ("ADA") and the Rehabilitation Act.  Although new technologies have made telecommuting more commonplace, not all employers have embraced the work-from-home concept.  The Second Circuit's recent opinion, as well as recently proposed and enacted telework legislation, highlight that employers cannot ignore telecommuting, and should consider the myriad legal issues that telecommuting presents, including wage-and-hour liability, privacy and data protection concerns, workplace safety, and other obligations. 

 

The Second Circuit's Opinion on Telecommuting as a Reasonable Accommodation

 

            In Nixon-Tinkelman v. N.Y. City Dep't of Health & Mental Hygiene, No. 10-3317-cv, 2011 WL 3489001 (2d Cir. Aug. 10, 2011), the plaintiff suffered from several physical ailments including cancer, heart problems, hearing impairment, and asthma.  The plaintiff had worked at the New York City Department of Health and Mental Hygiene ("DOHMH" or the "Department") since 1984 and had worked out of DOHMH's Queens office for 21 years as a Regional Director.  In January 2006, she was transferred to the Department's Manhattan location.  The transfer resulted in a longer and more difficult commute for Ms. Nixon-Tinkelman.  As a result, she requested, as an accommodation for her disability, to be reassigned to a "work location closer to home in order to reduce the stress and anxiety associated with the hour and a half commute each way every day."  Representatives from the Department met with Ms. Nixon-Tinkelman to discuss possible alternative assignments.  DOHMH concluded that one of the assignments in which Plaintiff expressed an interest was "inappropriate" because the job required extensive travel and therefore would not resolve Ms. Nixon-Tinkelman's commuting issue.  DOHMH further concluded that Ms. Nixon-Tinkelman's suggestion of a transfer to the Department's Pest Control Office in Queens was not a "viable" option.  Because the Department believed that there was no suitable reassignment that could be made within the organization to accommodate Ms. Nixon-Tinkelman, they denied her request.  Ms. Nixon-Tinkelman filed suit under the ADA and sections 501 and 504 of the Rehabilitation Act, alleging that the Department failed to make a reasonable accommodation.

 

            Under the ADA and Rehabilitation Act, an employer has an affirmative duty to provide a reasonable accommodation when it is aware that an employee has a qualifying disability that prevents the employee from performing essential job functions, so long as the accommodation does not unduly burden the employer.  Granting summary judgment for the defendant, the Southern District of New York ruled that commuting was beyond the scope of the plaintiff's job, and "not within the province of an employer's obligations under the ADA and the Rehabilitation Act."  The Second Circuit reversed, relying on two prior cases in which the Second Circuit ruled that an employer might have an obligation to assist with an employer's commute:  Lyons v. Legal Aid Soc'y, 68 F.3d 1512 (2d Cir. 1995); and DeRosa v. Natl's Envelope Corp, 595 F.3d 99 (2d Cir. 2010). 

 

            In Lyons, the Second Circuit reversed the dismissal of an ADA claim alleging that Plaintiff's employer failed to accommodate her request for a parking space near her office.  The district court dismissed the case on the ground that the accommodation requested by Lyons was unreasonable as a matter of law; however, on appeal, the Second Circuit ruled that the complaint stated a claim on which relief could be granted, holding that "there is nothing inherently unreasonable . . . in requiring an employer to furnish an otherwise qualified disabled employee with assistance related to her ability to get to work."  In DeRosa, the Second Circuit suggested that permitting a disabled employee to work from home was a reasonable accommodation.  The DeRosa court vacated an award of summary judgment for the employer, in which the district court ruled that the plaintiff was judicially estopped from bringing an ADA claim.  In so doing, the Second Circuit did not question the reasonable accommodation--working from home--that the Plaintiff sought.  The Nixon-Tinkelman court's reliance on DeRosa implies that the Second Circuit interprets the decision as standing for the proposition that working from home can be a reasonable accommodation.

 

            In Nixon-Tinkelman, the Court of Appeals explained that the determination of whether an accommodation is "reasonable" must be made on a case-by-case basis and remanded the case back to the trial court to conduct the required "fact-specific inquiry."  The Second Circuit made clear that employers cannot categorically deny requests for an accommodation to work from home or to receive other commuting accommodations.  Rather, employers must assess the circumstances of such requests on an individualized basis as they would with any other request for an accommodation.  The Second Circuit suggested a non-exhaustive list of factors for the trial court to use in evaluating the reasonableness of a potential accommodation, such as:

 

·        The number of individuals employed by the employer;

·        The number and location of the employer's offices;

·        Whether other available positions existed for which the employee was qualified;

·        Whether the employee could have shifted to a more convenient office without unduly burdening the employer's operations; and

·        The reasonableness of allowing the employee to work from home without on-site supervision.

 

The Second Circuit further provided illustrative examples of commuting accommodations that the district court should consider, including whether DOHMH could: (1) transfer Ms. Nixon-Tinkelman back to Queens, (2) permit her to work from home, or (3) provide her a car or parking permit to minimize the burden of her commute and make it easier for her to travel to and from her doctor's appointments.

 

Recent Legislative Initiatives to Increase the Availability of Telecommuting

 

            The Second Circuit's decision is in line with a recent trend favoring telecommuting.  On December 9, 2010, President Obama signed into law the Telework Enhancement Act, which gave federal agencies a six-month window of time to establish a telework policy and notify employees of their eligibility under the policy.  The new law requires each agency to implement a telework policy, designate a telework managing officer to oversee the agency's telework program, and ensure continuity-of-operations planning, particularly when employees' commutes are affected by inclement weather.  Several states, including Connecticut, Florida and Virginia, have also recently implemented or proposed legislation regarding telecommuting.  For example, New Jersey has proposed legislation that provides private sector tax incentives for certain business telecommuting program development and implementation costs and a separate bill that requires state agencies to adopt telecommuting programs.  In June 2010, Connecticut enacted a law to develop and implement telecommuting guidelines for state employees with the goal of having a positive effect on worker efficiency, the environment, and traffic congestion.  In New York, legislation has been proposed to require public employers to establish policies and programs allowing public employees to perform all or a portion of their duties remotely (see, e.g., A00206 / S 1381) as well as establishing tax credits for employers who enact policies to encourage teleworking (see S 2065).  This wave of legislative activity, along with the Second Circuit's recent opinion, provide a good opportunity for employers to consider the legal, operational, and administrative issues related to telecommuting.

 

Wage-and-Hour Concerns Arising from Telecommuting

 

            The Nixon-Tinkelman decision acknowledges that lack of supervision may pose difficultly in allowing an employee to work from home.  This may be particularly true for non-exempt employees.  Aside from the more obvious concern of some employers about a loss of productivity absent on-site supervision, there is also a converse risk that overzealous non-exempt employees would work "off-the-clock," i.e., engage in work without reporting their time, absent on-site supervision.  In the work-from-home context, where the ability of employers to monitor an employee's activity is limited, allegations of violations of federal and state wage and hour laws for such off-the-clock work may prove more difficult to refute than those brought by employees who work at an employer site under direct supervision.  Given this reality, it is important for employers to have specific, well enforced wage and hour policies governing work-from-home employees. 

 

Privacy and Data Security Concerns Arising from Telecommuting

 

            In addition, employees who do work from home are most likely able to do so via remote electronic access to the employer's network, which can raise  a whole host of concerns over the privacy and security of personal information and confidential company information that the employee may be able to access remotely: 

 

·        Whether the remote access to the employer's network will be made via secure connection, which decreases the risk of a security breach while information is in transit, and whether employees will be able to download files directly to their personal computer, reducing the employer's ability to protect the security of those files. 

·        Whether the employee will be using a company-issued computer or a personal computer.  Employee-owned computers increase security risks because the employer has limited ability to monitor the software on the computer and restrict user access.  For example, a personal computer might contain third-party data sharing software that could access company information that has been downloaded to the computer.  Moreover, employers have limited ability to ensure that other home users of an employee-owned computer would not be able to access company files if, for example, the remote connection is left open.  Either situation could trigger notice obligations under state data breach notification statutes if covered personal information is accessed or acquired by an unauthorized person.

·        Whether necessary files and data can be transferred only via a secure network or whether portable media, such as thumb drives, will also be permitted for file and data transfers, and if so, what level of security, such as encryption and password protection, will be required.  The shrinking size of portable media provide greater freedom, flexibility, and mobility, but also pose greater risk of loss or theft due to their diminutive size.

·        How to ensure the security of a work-from-home employee's workstation.  For example, will the screen be visible to others and how will the remote employee secure paper files? 

 

Employers will need to develop and implement both administrative mechanisms, such as clear policies that put employees on notice of their rights and responsibilities, and operational mechanisms, such as implementing encryption and monitoring technology and other electronic security measures, that balance the need to preserve confidentiality and maintain security while allowing for the flexibility and mobility the employer's off-site employees' need.

 

Workplace Safety Issues and Liabilities Arising from Telecommuting

 

            Further, although telecommuters are not at the workplace, employers must still be concerned with workplace safety issues.  Workers compensation laws, OSHA and other workplace safety regulations can still apply to remote employees, so employers must develop ways to ensure that work-from-home employees comply with relevant safety protocols even in their home offices.  Although OSHA has announced that it will not conduct inspections of employees' home offices, and does not expect employers to conduct inspections, the agency will hold employers responsible for injuries or hazards at remote locations, including home offices, if they are caused or created by materials, equipment, or work processes that the employer provides or requires the employee to use at the remote location.  As well, OSHA will conduct inspections of home-based work sites when it receives a complaint or referral that indicates a violation of a safety or health standard that threatens physical harm.   Most state workers' compensation laws, including New York, are not limited to work related injuries that occur at the employer's fixed physical location, and therefore can apply to work-related injuries occurring at a home office or other work location.  The employee will still have to establish that the injury arose out of and in the course of employment, and not during a break or other non-work related activity. 

 

            Another recent area of liability, brought about by the technologies that have helped expand the mobile workforce, stems from injuries and damages caused by employees texting and talking while driving.  For example, in Bustos v. Dyke Industries Inc., Miami Dade Case No. 01-13370 (2001), an employer settled for over $16 million, after a jury initially awarded over $21 million in damages to an elderly woman who was hit and severely disabled by a salesman who was making a work related call on his cell phone while driving, resulting in the accident.  Again, due to the lack of on-site supervision, employers should, at minimum, enact clear policies on workplace safety issues that consider the particular circumstances of remote employees.    

 

            There may certainly be other concerns associated with remote employees in particular industries, and the issues noted above are but a sample of the concerns that telecommuting can raise.  Given the recent trend towards telecommuting, and the Second Circuit's decision clarifying that, in certain circumstances, it can be required as a reasonable accommodation, employers should take the opportunity to review their own telecommuting policies and procedures and consider the various issues that may arise when their own employees work from home or other remote locations. 

 

            This post was authored by Matt Lampe, Joseph Bernasky, David Krieger, and Mariya Nazginova of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.


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February 15, 2012

Suit Against Gucci Executive Remains A Good Fit

It is common to see individuals named as defendants in discrimination cases brought under New York State or New York City law. Unlike Title VII, which does not provide for individual liability according to the Second Circuit (Tomka v. Seiler Corp., 66 F.3d 1295, 1317 (2d Cir. 1995), abrogated on other grounds by Burlington Indus. v. Ellerth, 524 U.S. 742 (1998), both the New York State Human Rights Law and the New York City Human Rights Law provide one or more bases upon which an individual can be held liable for discriminatory conduct.

The issue of individual liability under the State law was recently the focus of a decision by District Judge J. Paul Oetken in Robinson v. Gucci America, et al., 11-CV-3742 (February 9, 2012). In Robinson the Plaintiff, a tax attorney for Gucci, accused the company and several executives, including Matteo Mascazzini, Gucci's Associate President, of several violations of State and Federal discrimination law, including sex, race, national origin and disability discrimination, and retaliation, in connection with her termination of employment. According to the Complaint, Robinson alleged that she had been subjected to sexual harassment by her supervisor "almost from the time she started at Gucci", and that her complaints to Human Resources went unheeded. After several run-ins with Human Resources and other executives, Robinson was placed on the first of two administrative leaves that Gucci directed.

Up to this point, there is no mention of wrongdoing by Mascazzini in the Complaint, a not unsurprising development, given his position as Associate President. Mascazzini became involved, however, upon Robinson's return from her first administrative leave, when Robinson was told to report to a different work location, in New Jersey. When Robinson demurred, Mascazzini directed her to report to New Jersey, and it was this instruction that formed the basis of her claim that Mascazzini retaliated against her under the "aiding and abetting" theory of liability found in the New York State Human Rights Law.

In moving to dismiss the claim against him, Mascazzini conceded for the purpose of the motion that the move to New Jersey constituted an adverse employment action. Nor did he dispute that Robinson engaged in protected activity. Instead, Mascazzini focused on the absence of any allegation in the Complaint that he had knowledge of Robinson's alleged prior protected conduct; therefore, he could not have "retaliated" against her for engaging in that protected conduct.

Citing the "plausibility" standard for determining dismissal motions (that a Plaintiff must plead sufficient facts to state a claim to relief that is plausible on its face), the Court rejected Mascazzini's argument, and denied his dismissal motion. The Court was persuaded by several factors: (1) that Robinson was not licensed to practice in New Jersey, and told this to Mascazzini; and (2) that Robinson told Mascazzini at their meeting that she was being retaliated against. According to the Court, these factors lead to the conclusion that there was "no logical reason" for the direction to work in New Jersey, and that such a circumstance "constitute[s] strong evidence of an intent to discriminate." Thus, based on the pleadings, the Court determined that a reasonable inference that Mascazzini aided and abetted retaliation could be drawn.

The decision provides a cautionary tale for executives one or two levels removed from direct supervsion of an employee turned plaintiff. Presumably, had Mascazzini not inserted himself into the dispute by directing Robinson to report to the New Jersey location, either he would not have been named a defendant, or the Court would have dismissed the claim against him. Mascazzini can take some comfort, however, in the fact that the decision was rendered only at the pleading stage, and that Robinson still has the burden of proving to a jury that he unlawfully retaliated against her.

March 26, 2012

THE NLRB'S EVOLVING GUIDELINES ON SOCIAL MEDIA ISSUES


As employers continue to grapple with use of social media by employees for business, for pleasure, and in and outside the workplace, the National Labor Relations Board (the "Board") has issued another report on social media cases (Memorandum OM 12-31), updating a prior report (Memorandum OM 11-74), which we discussed in an earlier post.  In its news release on the updated report, the Board offers two key take-aways: 

1.            "Employer policies should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees."

 

2.            "An employee's comments on social media are generally not protected if they are mere gripes not made in relation to group activity among employees."

 

The updated report covers 14 cases in total, which involve disciplinary action, including discharges, for employee social media activity.  The conclusions in the report demonstrate the fact-specific nature of an inquiry into whether an employer is enforcing its social media policy in a discriminatory manner, which essentially turns on whether the social media activity that is regulated through the policy is group activity protected by Section 7 of the National Labor Relations Act ("NLRA"), as opposed to individual activity (or "gripes" as they are sometimes referred to in the report).  Of the 14 cases discussed in the report, seven address whether the employer's social media policy was lawful on its face, and five of the policies addressed were found to be unlawfully broad for one reason or another.  Although the Board's news release offers the two main take-aways noted above, there are several other issues and pitfalls addressed in the report that employers need to be aware of when drafting a social media policy:

 

·        Non-Union Employees.  Both union and non-union employees' social media activities are protected by the NLRA.  The report makes no distinction between union and non-union employees in analyzing whether a social media policy is lawful on its face or in its application. 

 

·        Disparaging Comments.  The report considers several examples of policies prohibiting disparaging comments in one way or another, such as general prohibitions on "defamatory" language, "inappropriate conversations," or using "unprofessional communications," or requiring social media communications to be "professional."  The report emphasizes that these types of blanket prohibitions can chill employees in the exercise of their rights under Section 7 of the NLRA to "engage in ... concerted activities for the purpose of collective bargaining or other mutual aid or protection," and were therefore found to be unlawful.  For example, the Board held that a rule prohibiting "[m]aking disparaging comments about the company through any media, including online blogs, other electronic media or through the media" would reasonably chill Section 7 rights because it could reasonably be construed to prohibit an employee from criticizing the employer's pay practices, and did not include any limiting language or examples of prohibited commentary.  Of course, a social media policy still needs to be consistent the employer's policies against harassment and discrimination, which is where limiting language, an issued discussed below, comes into play.   

 

·        Confidential Information.  The report's conclusions on prohibitions on discussing "confidential information" illustrate the careful balance that must be struck between an employer's duty or desire to protect certain information, such as trade secrets, non-public financial information, protected personal information, and the like, on the one hand, and an employee's right to discuss terms and conditions of employment, such as wages, on the other hand.  One policy addressed by the report prohibited employees from disclosing or communicating information of a confidential, sensitive nature, or non-public information concerning the company on or through company property to anyone outside the company without prior approval of senior management or the law department.  The policy was found unlawful because it did not define confidential, sensitive, or non-public information and could therefore reasonably be construed to prohibit employee from discussing matters such as wages and working conditions, which may be non-public but are discussions protected by the NLRA.  Again, limiting language and explanatory definitions can remedy the issue.

 

·        Company Name, Logo, & Marks.  Many organizations seek to limit the use of their company name, logo, and trade or service marks, but the report makes clear that employees have a Section 7 right to use their employer's name or logo in conjunction with protected concerted activity, such as communicating with co-workers or the public in general about a labor dispute.  Accordingly, a policy prohibiting the use of the company name or service mark outside the course of business without approval of the law department was held unlawful. 

 

·        Media Communications.  Restrictions on communications with the media can be another difficult area to navigate.  The report explains that employees have the right to communicate with the public regarding an on-going labor dispute, and that for this reason blanket prohibitions on communicating with the media or requiring prior authorizations will be held to be unlawfully overbroad. 

 

·        Identifying the Employment Relationship.  The report found a policy that required that employees always identify themselves as the employer's employees on social media and state that their views were their own when posting about job-related matters was both (1) unlawfully overbroad, because the Board views personal profile pages as an important function in enabling employees to communicate on social media with co-workers at their own or other locations (although the Board does not explain how the policy impeded this function), and (2) unlawfully burdensome on Section 7 communications because it required employees to repeat that their views are their own in every communication.  In the context of another policy, however, the Board recognized that employers need to carefully navigate between allowing communications protected under the NLRA and the Federal Trade Commission's guidelines on endorsements and testimonials,  pursuant to which individuals who have a relationship to a company, such as employees, must disclosure that relationship when discussing the company's products or services or those of its competitors.  Thus, the Board found lawful a policy that required employees to state that their views were their own and not those of the employer when discussing "promotional content" via social media, and defined "promotional content" as communications designed to endorse, promote, sell, advertise or otherwise support the employer and its products and services, referring to the Federal Trade Commission's regulations. 

 

·        Savings Clauses.  Although the report emphasizes that limiting language can cure overbroad language in a social media policy, a general savings clause may be insufficient to render a social media policy lawful under the NLRA.  For example, one policy discussed in the report stated that "in external social networking situations, employees should generally avoid identifying themselves as the Employer's employees, unless there was a legitimate business need to do so or when discussing terms and conditions of employment in an appropriate manner."  The Board found the policy unlawful because it did not define or explain what was "appropriate," either through specific examples or limiting language, which could chill employees from criticizing the employer's labor policies, treatment of employees, or other terms and conditions of employment.  The policy had a savings clause that provided that the policy would not be interpreted or applied so as to interfere with employee rights to self-organize, form, join, or assist labor organizations, to bargain collectively though representatives of their choosing, or to engage in other concerted activities, or to refrain from engaging in such activities.  The Board concluded that an employee could not reasonably be expected to know that this language encompassed discussions the employer deemed "inappropriate" and thus the savings clause was insufficient to render lawful the otherwise overbroad policy. 

 

·        Limiting Language and Examples.  Although the report includes several examples of overbroad policies, it also includes examples of lawful policies that restrict social media communications on the above-discussed topics, but included limiting language or examples, which kept the policy within the bounds of the NLRA.  For example, a policy that prohibited social media communications that are vulgar, obscene, threatening, intimidating, harassing, or a violation of company policies against discrimination, harassment, or hostility on account of age, race, religion, sex, ethnicity, nationality, disability, or other protected class, status or characteristic, was held lawful because it provided examples of the egregious conduct it prohibited.  Similarly, a policy that prohibited employees from using or disclosing confidential and/or proprietary information was found lawful where it defined confidential and/or proprietary information as including personal health information about customers or patients, and "embargoed information" such as launch release dates and pending reorganizations.  The report explains that the limiting language and examples made clear that the policy was intended to protect the employer's legitimate interest in keeping certain information confidential and the privacy interests of the customers, and the prohibitions would not reasonably be understood to restrict communications protected under Section 7 of the NLRA. 

Appropriate policing of employees' social media activities is necessary given the speed at which online communications are spread, and the potential impact that such communications may have on an employer's operations and reputation.  To be sure, there are a host of legal and business concerns that need to be addressed in a comprehensive social media policy, but the two Board reports are a helpful starting place for employers looking to create or amend social media policies.   

 

This post was authored by Matt Lampe, Joseph Bernasky, and Michele Bradley of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

April 10, 2012

BILL TO ELIMINATE ANNUAL WAGE THEFT PREVENTION ACT NOTICES PASSES NEW YORK STATE SENATE


On February 29, 2012, the New York State Senate passed Bill S60631-2011, which would eliminate the annual notice requirement under the New York State Wage Theft Prevention Act, which we discussed in a prior post.  The Bill does not add text to the Wage Theft Prevention Act, and keeps intact the notice requirements for new hires, but deletes the language regarding the requirement that such notices be provided "on or before February first of each subsequent year of the employee's employment with the employer...." 

The Bill was introduced by Senator DeFrancisco on January 4, 2012.  The Senate Memo summarizing the Bill explains, as its justification, that the annual notice requirement "imposes a new administrative cost on every private sector employer in the state, with aggregate costs in the millions of dollars, and will do little to improve overall compliance with the state's wage laws. The Department of Labor has conceded that wage compliance is an issue for only a small percentage of New York State employers, despite the universal application of this annual notice requirement. This type of annual notification requirement should be reserved for instances where non-compliance has been an issue, however, as an across the board measure, it will add costs and provide little if any additional benefit.  Moreover, this modification to the WPTA leaves in place its most significant reforms intended to assure payment of all wages earned by employees."

Now that the Bill has passed the Senate, it has been delivered to the Assembly, where an identical bill (A08856) is pending, and if passed by the Assembly, will be presented to the Governor for signature.  New York employers should stay tuned for further developments on this Bill. 

This post was authored by Matt Lampe and Joseph Bernasky of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association. 

August 17, 2012

Employer Lawsuits Against Employees Under the Computer Fraud and Abuse Act

The Computer Fraud and Abuse Act, 18 U.S.C. 1030 (the "CFAA"), prohibits the fraudulent access of computer data by individuals "without authorized access" or who "exceed[] authorized access" of a "protected computer," which is defined by the CFAA as either a government computer or one used in or affecting interstate commerce.  The CFAA provided only for criminal penalties until amendments in 1994 added civil remedies, prompting employers to file actions under the CFAA against current and former employees who misappropriate or misuse confidential computer data.  On August 2, 2012, the Department of Justice announced that it would not seek Supreme Court review of a closely watched decision, U.S. v. Nosal,  in which the Ninth Circuit ruled on the application of the CFAA in the employment context.  The Ninth Circuit's decision in U.S. v. Nosal departed from the interpretations of other Circuits, and the federal courts, including the Second Circuit district courts, are split on whether and to what extent an employer can bring an action against an employee under the CFAA.

 

The Ninth Circuit Narrowly Interprets CFAA

In U.S. v. Nosal, the Ninth Circuit considered whether defendant David Nosal violated CFAA by enlisting his former colleagues at Korn/Ferry to download lists, names, and information from a confidential database on his former employer's computer.  676 F.3d 854, 856 (9th Cir. 2012).  The Ninth Circuit upheld the district court's dismissal of the employer's cause of action under CFAA, interpreting the phrases "without authorized access" and "exceeds authorized access" in the CFAA as prohibiting violations of access but not use restrictions.  Id. at *863-864.  The Ninth Circuit pointed out that the CFAA criminalizes improper "access" of protected computers but fails to speak directly about the "misuse" or "misappropriation" of the data found on such computers.  Applying what it deemed to be a "narrower interpretation" of this language, the court reasoned that the statute's phrase "without authorized access" contemplates the "outside hacker," or an individual without any authorization to access the protected computer in the first instance, and the phrase "exceeds authorized access" contemplates the "insider hacker," or one who has limited or restricted access to the protected computer but accesses information not within the scope of his or her authorized access.  Id. at *858.  According to the Ninth Circuit, the CFAA did not cover the situation before the court in which Nosal's colleagues had permission to access their employer's database and the information within that database, by way of a protected computer that they were also authorized to access, but used the information contained therein in an unauthorized manner. The Ninth Circuit expressed concern that reading the CFAA to prohibit unauthorized use of protected computers (as opposed to unauthorized access in the first instance) could effectively criminalize a wide range of common "minor dalliances" by employees, such as shopping on the internet or chatting with friends on a computer that they are authorized to access but are not authorized to use for such purposes.   

 

The Second Circuit District Court Split

The Second Circuit has not yet addressed this issue and the district courts in the Second Circuit are split on whether an employer has a cause of action against an employee under the CFAA for violating his or her use rights under employer policy.  Like the Ninth Circuit, some district courts have rejected claims under the CFAA where an employee has permission or authority to retrieve the confidential information at issue, regardless of whether the employee subsequently misuses the information.  See, e.g. University Sports Publications Co. v. Playmakers Media Co., 725 F. Supp. 2d 378, 385-387 (S.D.N.Y. 2010); Westbrook Techs., Inc. v. Wesler, 2010 WL 2826280 (D.Conn. July 15, 2010).  Further, in one decision, the Southern District of New York observed that the Second Circuit's interpretation of damages under the CFAA in Nexans Wires S.A. v. Sark-USA, Inc., 166 Fed.Appx. 559 (2d Cir. 2006), was consistent with a narrower interpretation of the statute's application.  See Orbit One Comm'ns, Inc. v. Numerex Corp., 692 F.Supp.2d 373, 386-87 (S.D.N.Y. 2010).  In Nexans, the Second Circuit upheld damages under the CFAA for losses in connection with hacking computer information but denied recovery under the CFAA for the misuse of computer information.  Id. 

 

By contrast, in an action against former employees accused of transferring trade secrets to their new employer, the court found that the defendant-former employee exceeded his authorized access of the company computer when he violated the broad confidentiality section of his employment agreement, and in doing so violated the CFAA.  Marketing Tech. Solutions, Inc. v. Medizine LLC, 2010 WL 2034404, at *7 (S.D.N.Y. May 18, 2010).  In another case in which an employee copied and e-mailed proprietary company information (which he was otherwise authorized to access) in violation of his company e-mail policy, the court defined "exceeds authorized access" to include actions whereby an employee has "reason to know" that his access of documents is in "contravention of the wishes and interests of his employer."  Calyon v. Mizuho Securities U.S.A., Inc., 2007 WL 2618658, at *1 (S.D.N.Y. Sept. 5, 2007). 

 

The Federal Circuit Split

Since the Ninth Circuit's ruling in U.S. v. Nosal, the Fourth Circuit has also applied "a narrow reading" of the terms "without authorization" and "exceeds authorized access" in the CFAA, rejecting a cause of action against employees accused of misappropriating computer information, where the employees had permission to access the information at issue.  WEC Carolina Energy Solutions, LLC, 2012 WL 3039213, at *6 (4th Cir. July 26, 2012).  Observing that the CFAA was "meant to cover hackers," the Fourth Circuit declined to apply the statute to employees who "access computers or information in bad faith or [] disregard a use policy."  Id. at *7. 

 

Other Circuit Courts of Appeal, including the Fifth and Seventh Circuits, have applied broader interpretations of the CFAA.  For instance, the Fifth Circuit allowed a cause of action under the CFAA to proceed against an employee who retrieved confidential customer account information, which she was authorized to access, and subsequently transferred to her half-brother for the purpose of committing a fraud.  U.S. v. John, 597 F.3d 263, 272 (5th Cir. 2010).  Interpreting the CFAA clause "exceeds authorized access," the Fifth Circuit found that an employee exceeds authorized access when he or she has reason to know that he or she is not authorized to access such information in furtherance of a criminal scheme.  Id. at 273.   In Int'l Airport Centers, LLC. v. Citrin, the Seventh Circuit upheld the district court's finding that an employee violated the CFAA when, prior to leaving the company to start his own business, he deleted confidential company information on his assigned company computer that he knew the company would have wanted. 440 F.3d 418, 419-20 (7th Cir. 2006).  Although during the course of his employment the employee was authorized to access the company information on his work computer, the Seventh Circuit reasoned that the difference between the CFAA phrases "without authorized access" and "exceeds authorized access" is "paper thin," and concluded that any authority to access the confidential computer information terminated when the employee breached his duty of loyalty to the employer, thereby falling within the scope of the CFAA.  Id. at 420.

 

Practical Implications

Storing company confidential information, customer and employee personal information, and other business records electronically has become the norm.  By extension, maintaining the security of such electronic data has become increasingly important and mandatory in some jurisdictions if such data includes employee or customer personal information.  Effectively maintaining the security of company electronic data of course starts with effective internal policies and procedures; however, legal recourse, such as an action under the CFAA, also presents an effective deterrent for potential violations of company security policies.  As a result of the decision by the Department of Justice not to pursue Supreme Court review of the Ninth Circuit decision in U.S. v. Nosal, the circuit split is sure to remain for the foreseeable future and the application of the CFAA to the employment context will be unresolved.  Although the Ninth and Fourth Circuits' recent decisions applied a "narrower interpretation" of the CFAA than opinions in other Circuits, hinging on the distinction between unauthorized access and unauthorized use, these decisions still leave open the possibility of employer causes of action under the CFAA against employees who breach access restrictions.  Unfortunately, these decisions do not answer what level of access restrictions would be required in order to trigger the protections of the CFAA:  Would an employer policy on access rights alone be sufficient?  Or are technical access restrictions, such as password protection, required?  In this regard, until these questions are answered by the courts, employers should consider access restrictions imposed by company policy and whether technical access restrictions would be beneficial for certain types of sensitive company data. 

 

This post was authored by Matt Lampe, Joseph Bernasky, and Karen Rosenfield of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

 

January 8, 2013

Second Circuit Reverses Summary Judgment Dismissing Claims of National Origin and Racial Harassment

Vacating the district court's grant of summary judgment to the defendants, the Second Circuit, in Rivera vs. Rochester Genesee Regional Transportation Authority, No. 11-762 (12/21/12), concluded that plaintiffs, Enio Rivera and Michael Talton, had presented sufficient evidence to establish a "genuine dispute of material fact" as to whether they had been harassed in violation of federal and state law due to national origin and race, respectively. Rivera and Talton alleged they had been subjected to offensive slurs, physical threats and bullying.

In dismissing Rivera's claim, the district court concluded that the harassment he experienced stemmed from a personal conflict with a co-worker and not his national origin. Acknowledging that the personal conflict between Rivera and his alleged harasser made the case a "close call," the Second Circuit determined that the issue of whether Rivera had been subjected to unlawful harassment based upon his national origin should be left for the jury to decide. The court identified three reasons for arriving at this conclusion. First, Rivera provided direct, non-conclusory testimony that on numerous occasions the co-worker with whom he had the personal conflict and others uttered ethnic slurs concerning his national origin. Second, Rivera's testimony was corroborated by Talton and other non-party witnesses who provided evidence of ethnically and racially hostile comments made outside of Rivera's presence. Third, in addition to the ethnic slurs, Rivera detailed that he was subject to bullying and physical harassment by these same co-workers. The court explained that in view of the totality of the circumstances "a reasonable jury could conclude that the alleged incidents of harassment in the record, including the slurs, constituted more than 'mere offensive utterance[s].'" See Hayut vs. State University of New York, 352 F.3d 733, 745 (2nd Cir. 2003).

Addressing Talton's claim, the court determined that the district court erred in concluding that the evidence reflected only isolated incidents of crude and offensive language taking place over a period of years. It highlighted that Talton provided a detailed and uncontradicted account that both his supervisor and co-workers had directed racial slurs at him with the co-workers combining their remarks with physical threats. Expounding, the court emphasized that "'[p]erhaps no single act can more quickly alter the conditions of employment and create an abusive working environment than the use of an unambiguously racial epithet . . . by a supervisor in the presence of his subordinates.' Richardson vs. New York State Department of Correctional Services, 180 F.3d 426, 439 (2nd Cir. 1999) (citation omitted). The use of racially offensive language is particularly likely to create a hostile work environment when, as here, it is presented in a 'physically threatening' manner." See Hayut, 352 F.3d at 745.

The court also vacated the grant of summary judgment dismissing Talton's retaliation claim. The court ruled that Talton had presented sufficient evidence to raise a triable issue as to whether he had experienced material adverse actions in response to his complaints of racial harassment. This evidence included a statement by Talton's supervisor that he could get fired for filing the EEOC charge. In addition, the court stated that the supervisor's response of "suck it up and get over it" to Talton's harassment complaints could establish an adverse employment action inasmuch as it may constitute "unchecked retaliatory co-worker harassment, if sufficiently severe." Finally, the court cited the employer's "almost immediate response" to complaints lodged against Talton by co-workers. It explained that "a reasonable juror could infer that [the employer's] swift response to the complaints by Talton's co-workers were designed to, and did, send a message that Talton's employment . . . was in serious jeopardy as a result of the EEOC charges."

The court, however, did find that the district court properly dismissed Rivera's retaliation claim. Rivera, the court noted, failed to present any evidence that he suffered any material adverse action related to his filing discrimination charges. It rejected his reliance upon disciplinary citations for insubordination, an unpleasant work assignment, one late overtime payment, and denial of a time off request. The court stated that there was no basis to conclude that the citations represented anything other than the employer's reasonable enforcement of its disciplinary policies. As such "[w]ithout more, no reasonable jury could conclude that these acts of discipline, either alone or in conjunction with the other acts of retaliation Rivera alleges, represented a departure from [the employer's normal disciplinary practices such that they might have 'dissuaded a reasonable worker from making or supporting a charge of discrimination.'" See Burlington Northern & Santa Fe Railway Company vs. White, 548 U.S. 53, 68 (2006).

http://www.ca2.uscourts.gov/decisions/isysquery/a138bc06-8662-40a1-9d79-167c4ffd69a8/3/doc/11-762_opn.pdf#xml

January 10, 2013

EEOC Announces $2 Million Settlement of ADA Class Action Against Dillard's Inc.

The EEOC has reported that Dillard's Inc., a national retail chain, agreed to pay $2 million and adopt company-wide policy changes to settle a class action disability discrimination lawsuit filed by the agency in 2008. The suit stemmed from Dillard's long-standing national policy of requiring employees to disclose personal and confidential medical information as a condition of being approved for sick leave. The settlement also disposes of claims that Dillard's violated the ADA by terminating a class of employees for exceeding their maximum sick leave.

Under Dillard's policy, employees were required to disclose the specifics of their medical condition when requesting sick leave even though they had provided a doctor's statement confirming that their absence was due to medical reasons. The EEOC maintained that the policy violated the ADA's prohibition against inquiring as to an employee's disability except where job-related and necessary for the conduct of business.

Commenting on the settlement, EEOC regional attorney Anna Park stated, "Policies and practices that permit medical inquiries without proof of a valid business necessity run afoul of the law, often having large-scale consequences. All employers should carefully examine their own policies and practices to ensure compliance with federal law."

http://www.eeoc.gov/eeoc/newsroom/release/12-18-12.cfm

January 16, 2013

Eighth Circuit Enforces Mandatory Arbitration Agreement Waiving FLSA Class Claims

The Eighth Circuit, in Owen vs. Bristol Care, Inc., No. 12-1719 (8th Cir. 1/7/13), held that the plaintiff must arbitrate her Fair Labor Standards Act ("FLSA") overtime claim even though the governing mandatory arbitration agreement ("MAA") contained a waiver of class claims barring her proposed collective action.

Owen, a former administrator with Bristol Care, a nursing home operator, brought her FLSA action in federal district court on behalf of herself and other similarly situated current and former employees alleging that she and other administrators had been deliberately misclassified as "exempt" employees for purposes of FLSA and corresponding state laws. The district court denied Bristol Care's motion to compel arbitration in accordance with the MAA and the Federal Arbitration Act ("FAA"). The court reasoned that although the MAA encompassed Owen's claim, arbitration could not be ordered here because the inclusion of the class waiver in the MAA rendered it invalid. In so concluding, the court noted that the Supreme Court's decision in AT&T Mobility LLC vs. Concepcion, 563 U.S. __, 131 S.Ct. 1740 (2011), upholding a class waiver in a consumer arbitration agreement, was not controlling in the employment context. Citing Chen-Oster vs. Goldman Sachs & Co., 758 F.Supp. 2d 394 (S.D.N.Y. 2011) and D.R. Horton, Inc., 357 NLRB No. 184 (2012), it explained that class waivers are invalid in FLSA cases because the FLSA authorizes the bringing of a class action.

In reversing the district court, the Eighth Circuit instructed that Section 2 of the FAA "requires courts to enforce arbitration agreements according to their terms," absent a "contrary congressional command" in another statute overriding the FAA's mandate. It noted that the burden to make this showing rests with the party challenging the arbitration agreement.

Owen, the Eighth Circuit decided, failed to meet this burden. "Owen identifies nothing in either the text or legislative history of the FLSA that indicates a congressional intent to bar employees from agreeing to arbitrate FLSA claims individually, nor is there an 'inherent conflict' between the FLSA and the FAA. In short, the FLSA contains no 'contrary congressional command' as required to override the FAA."

The Eighth Circuit also highlighted that its conclusion is consistent with the five other courts of appeals that have addressed the issue. See Vilches vs. The Travelers Companies, Inc., 413 F. App'x 487 (3rd Cir. 2011); Caley vs. Gulfstream Aerospace Corp., 428 F.3d 1359 (11th Cir. 2005); Carter vs. Countrywide Credit Industry, Inc., 362 F.3d 294 (5th Cir. 2004); Adkins vs. Labor Ready, Inc., 303 F.3d 496 (4th Cir. 2002); Horentstein vs. Mortgage Market, Inc., 9 F. App'x 618 (9th Cir. 2001).

http://www.ca8.uscourts.gov/opndir/13/01/121719P.pdf

Hospital Employee Discharged for Refusing Flu Shot Due to Veganism May Proceed with Religious Discrimination Claim

Denying defendant's motion to dismiss, the United States District Court for the Southern District of Ohio in Chenzira vs. Cincinnati Children's Hospital Medical Center, 1: 11-CV-00917 (S.D. Ohio 12/27/12), found that plaintiff stated a plausible claim of religious discrimination under Title VII and the Ohio Civil Rights Act based upon her adherence to veganism. Chenzira alleged that the hospital violated her religious convictions by discharging her for refusing to receive the flu vaccine. She explained that receiving a flu shot would contravene her convictions as a vegan not to ingest any animal or animal by-products because the flu vaccine is grown in chicken eggs.

The court rejected defendant's argument that veganism represents nothing more than a dietary preference or social philosophy, and, as such, does not qualify as a religion for purposes of the protections afforded by Title VII or the Ohio Civil Rights Act. Instead, referencing the standard to be applied in the context of a motion to dismiss, the court concluded that it was "plausible" that Chenzira could subscribe to veganism with a sincerity equating that of traditional religious views, thereby satisfying the EEOC's definition. 29 C.F.R. §1605.1. It noted that this conclusion was further supported by Chenzira's citation to supporting essays and Biblical excerpts. "Although the Code makes it clear that it is not necessary that a religious group espouse a belief before it can qualify as religious, 29 C.F.R. §1605.1, the fact here that Plaintiff is not alone in articulating her view lends credence to her position."

The court also denied the hospital's motion to dismiss Chenzira's complaint as being untimely. Although Chenzira filed her formal charge with the EEOC beyond the 300-day limit, the court determined that the intake questionnaire that she completed at the EEOC prior to the expiration of that period was sufficiently detailed to satisfy the charge-filing requirement.

http://www.theemployerhandbook.com/ChenziraCincinnati.pdf

January 24, 2013

Comments Made to Employee During Pregnancy Preclude Summary Judgment on Her Title VII Claim Challenging Subsequent Discharge

The United States District Court for the Northern District of Illinois, in Quinlan vs. Elysian Hotel Company, No. 1:11-CV-05956 (N.D. IL 1/4/13), ruled that plaintiff may proceed with her Title VII claim alleging her discharge shortly after she returned from maternity leave constituted sex discrimination. In denying the employer's motion for summary judgment, the court concluded that remarks purportedly made to Quinlan by three management officials who participated in the decision to discharge her raised a genuine issue that their decision was influenced by sex discrimination. The remarks at issue concerned the difficulty of balancing work and being a good mother. The court described Quinlan's claim as asserting "the employer discriminated based on a view that new mothers cannot (or are less able to) do the job."

Acknowledging that certain of the cited comments were attenuated from the Quinlan's discharge having been made more than six months prior, the court found that the remarks attributed to Mary Beth Malone, one of Quinlan's supervisors and one of the three decision makers, standing alone constituted sufficient circumstantial evidence that discrimination may have influenced the decision to terminate Quinlan's employment. These included repeated inquiries as to how Quinlan was going to manage a baby and her workload, as well as recommending that Quinlan consider returning to her career "later in life" because of the difficulty of managing work and being a "good mom."


The court refused to accept for summary judgment purposes, Elysian's contention that Malone's comments were not discriminatory, but represented "girl talk" conversations in which Quinlan and Malone chatted about life as friends. It explained, "at this stage, the Court must view the evidence in Quinlan's favor, and when the content of the remarks are combined with the settings in which they were made, and the repetitiveness with which they were made, and that it was allegedly Malone who repeatedly brought up the subject, the remarks are evidence of discrimination."

http://il.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20130104_0000026.NIL.htm/qx

January 26, 2013

New York City Council Votes to Amend Human Rights Law to Include "Unemployment" as Protected Classification; Veto and Override Expected

On Wednesday, January 23, 2013, the New York City Council passed a bill amending the City's Human Rights Law to prohibit employment discrimination based upon an employee or applicant's "unemployment status." It defines "unemployment status" as "an individual's current or recent unemployment." Under the amendment, however, an employer is not precluded from considering unemployment status data that is substantially job related where it has a bona fide reason for doing so. Nor is an employer barred from inquiring as to prior terminations or demotions, including whether such action was taken for cause.

The amendment also addresses the advertisement of job vacancies by proscribing the inclusion of any statement that being currently employed is a job requirement or that unemployed applicants will not be considered.

It has been reported that Mayor Michael Bloomberg plans to veto the bill. In response, City Council Speaker Christine Quinn was quoted saying that should Bloomberg veto it, she is confident she has the votes to override him.

http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=1102958&GUID=9B3B9F98-4E30-475C-A813-F9E1C99F1D99&Options=ID%7cText%7c&Search=

May 20, 2013

District Court Denies Motion To Dismiss Employer's Action To Enforce Restrictive Covenant

In Locke v. Tom James Co., 2013 WL 1340841 (S.D.N.Y. March 25, 2013), the Court declined to dismiss claims by an employer seeking to enforce a two-year, 50-mile restrictive covenant. Judge Daniels denied summary judgment to the former employee, who was seeking dismissal of claims that he had breached the restrictive covenant and misappropriated trade secrets. The former employee worked as a clothier and salesman for a high-end custom clothing company.

The Court found that the customer list at issue was not publicly ascertainable, and noted that protecting customer relationships is especially important when employees work closely with customers over a long period of time, especially when the employee's services to the customers are significant. (Here, the former employee visited customers at their offices or homes.) The Court also concluded that a two-year duration and 50-mile radius were reasonable, and that the agreement was not obtained under duress.

(Thanks to WRR Committee member Steven T. Sledzik of Jones Morrison, LLP for this contribution!)

May 22, 2013

D.C. Circuit Rules Single Use of "N-Word" by Management Official May Create Hostile Work Environment

The D.C. Circuit in Ayissi-Etoh v. Fannie Mae, No. 11-7127 (4/5/13), reversed the district court's grant of summary judgment for Fannie Mae. It found that plaintiff had established triable race discrimination and hostile work environment claims under the Civil Rights Act of 1866, 42 U.S.C. §1981.

Fannie Mae hired plaintiff as a senior financial modeler and promoted him three months later to modeling team lead. Plaintiff's claim of racial discrimination arose from Fannie Mae's failure to grant him a pay increase in connection with his promotion. He alleged that when he questioned Fannie Mae's chief audit executive concerning this issue, she replied: "For a young black man smart like you, we are happy to have your expertise; I think I am already paying you a lot of money." Noting that the executive denied making this statement, the court instructed that such a credibility contest cannot be resolved at the summary judgment stage against the non-moving party. Instead, it concluded that the "young black man" comment constituted direct evidence of racial bias that entitled plaintiff to a trial on the issue.

In reversing the grant of summary judgment on plaintiff's hostile work environment claim, the court cited both this comment and a subsequent incident in which a Fannie Mae vice president during a meeting on work assignments yelled at plaintiff, "Get out of my office n____." Addressing this latter event, the court suggested, "This single incident might well have been sufficient to establish a hostile work environment." It explained, "perhaps no single act can more quickly alter the conditions of employment" than "the use of an unambiguously racial epithet such as 'n_____' by a supervisor."


http://www.cadc.uscourts.gov/internet/opinions.nsf/5A1A6E0FFB5A980D85257B44004DF52C/$file/11-7127-1429152.pdf

June 4, 2013

Second Circuit Vacates Summary Judgment, Finding District Court Applied Wrong Standard In Evaluating Claims Under NYCHRL

The Second Circuit, in Mihalik v. Credit Agricole Cheauvreux North America, Inc., No. 11-3361-cv (2nd Cir. April 26, 2013), ruled that federal standards do not govern claims under the New York City Human Rights Law ("NYCHRL"). Instead, such claims require a separate and independent analysis. The court explained that that the 2005 amendment of the NYCHRL compels this result.

Citing the First Department's decision in Williams v. New York City Housing Authority, 872 N.Y.S.2d 27 (1st Dep't 2009), the Second Circuit explained that under the NYCHRL the "severe and pervasive standard" is not the test of liability for gender discrimination, but is relevant only to the issue of damages. To prevail on liability, the plaintiff need only demonstrate by "a preponderance of the evidence that she has been treated less well than other employees because of her gender." The court cautioned, however, that the NYCHRL is not a "general civility code." Therefore, the plaintiff still must demonstrate "discriminatory motive," which requires a showing that she has been treated less well, at least in part, due to her gender.

Addressing the standard for a retaliation claim under the NYCHRL, the Second Circuit instructed that the plaintiff must establish that she opposed her employer's act(s) of discrimination and the employer responded with conduct "reasonably likely to deter a person from engaging in such action." The court opined that in the context of this case, Mihalik did not need to demonstrate that she was discharged for opposing her supervisor's alleged offensive behavior because "a jury could reasonably find that publicly humiliating Mihalik in front of her male counterparts and otherwise shunning her was likely to deter a reasonable person from opposing his harassing behavior in the future."

http://docs.justia.com/cases/federal/appellate-courts/ca2/11-3361/11-3361-2013-04-26.pdf

July 9, 2013

The New York City Council Overrides Mayor Bloomberg's Veto of the Earned Sick Time Act By A 47 To 4 Margin

On June 26, 2013, the New York City Council (the "Council") voted 47-4 to override Mayor Michael Bloomberg's veto and adopt the New York City Earned Sick Time Act (the "Act"). The Act will require employers with 20 or more employees to begin providing paid sick leave on April 1, 2014. Employers with 15 to 19 employees would be required to provide paid sick leave starting October 1, 2015. These dates could be delayed depending on economic conditions, as measured against the New York Coincident Economic Index, a Federal Reserve Index that measures the New York City economy.

The Act entitles employees to up to five paid sick days (40 hours) annually, which will accrue at the rate of one hour for every thirty hours worked. Employees can begin to use accrued paid sick time after they have been employed for at least 120 days or 120 days after the Act goes into effect, whichever is later. Both part-time and full-time employees are covered, so long as they are employed more than 80 hours in a calendar year. At the end of the year, the employer must either allow the employee to carry over unused accrued paid sick time to the following year (subject to the 40 hour maximum) or pay the employee for the unused accrued paid sick time. Employers are not required to reimburse employees for unused accrued paid sick time upon the employee's termination, resignation, retirement, or other separation from employment.

Employees are entitled to use sick time for absences due to (1) the employee's mental or physical illness, injury or health condition, need for medical diagnosis, care or treatment, or need for preventative medical care; (2) care of a family member needing such medical diagnosis, care or treatment; or (3) closure of the place of business due to a public health emergency or to care for a child whose school is closed due to a public health emergency.

Employees working for employers with less than fifteen employees will be entitled to up to five days of unpaid, job-protected leave once the Act becomes effective. The Act also imposes sick leave requirements on employers of domestic workers. The Act will not apply to any employee covered by a collective bargaining agreement that expressly waives the Act's provisions or provides for comparable benefits. Any employer with a paid leave policy that provides an amount of paid leave sufficient to meet the accrual requirements of the Act is not required to provide additional paid sick time.

The Act mandates that employers retain records documenting the number of hours worked by employees and sick time accrued and taken by employees for a period of at least two years. Employers are required to provide employees with written notice of their entitlement to paid sick time and display a poster in a conspicuous location highlighting the rights guaranteed under the Act. Additionally, the Act includes non-retaliation provisions, which if violated can lead to monetary penalties and other forms of equitable relief.

The Department of Consumer Affairs (the "Department") is responsible for investigating and enforcing the Act. The Department can impose civil penalties ranging from $500 to $1,000 per violation. The Department can also order the employer to pay penalties to the affected employee. For unlawful termination, the Department can award back pay and equitable relief (including reinstatement). Employees have no right to bring a private civil action for violations of the Act.

Employers should begin to consider what steps are necessary to comply with the Act in advance of the effective date. Even those employers who already provide paid leave will need to review existing policies to determine whether those policies meet the specific accrual requirements of the Act, as well as its unique coverage requirements (which extend protection to both part-time and full-time employees). Furthermore, employers will need to ensure compliance with the recordkeeping and notice requirements of the Act.

This post was authored by Matt Lampe, Wendy Butler, Emilie Hendee, and Joshua Grossman of Jones Day. The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

July 29, 2013

Summary of Proposed Regulations Regarding Permissible Wage Deductions

On May 7, 2013, the New York Department of Labor ("NY DOL") submitted Notice of Proposed Rulemaking concerning the recent amendments to New York Labor Law Section 193 ("Section 193"), which became effective on November 6, 2012.  On July 6, 2013, the period for notice and public comments closed.  Accordingly, the final regulations are expected to be released later this year.

 

The amendments to Section 193 expanded the permissible categories of wage deductions employers can make under New York law.  In addition, the amendments to Section 193 permit employers to recoup overpayments and seek repayment of advances made to employees.  The major highlights of the Proposed Rulemaking are outlined in greater detail below.   

 

Permissible deductions.  The amendments to Section 193 authorized voluntary deductions made "for the benefit of the employee."  The Proposed Rulemaking clarifies that permissible voluntary deductions will be considered to be for the "benefit of the employee" when they provide "financial or other support" for the employee, his or her family or a charitable organization.  12 NYCRR § 195-4.3(a).  The categories of "other support" are limited to health and welfare benefits, pensions and retirement benefits, child care and educational benefits, charitable benefits, dues and assessments, transportation and food and lodging.  Id.  However, deductions made solely for the "convenience" of the employee - absent a benefit to the employee that falls in these permissible categories - are not "recognized benefits" of the employee.  Id. § 195-4.3(b). 

 

Written, informed consent.  According to the Proposed Rulemaking, a deduction shall be authorized if it is agreed to in a collective bargaining agreement or by a written agreement between the employer and employees that is "express, written, voluntary, and informed."  12 NYCRR § 195-4.2(a).  An employee will be "informed" when "the employee is provided with written notice of all terms and conditions of the deduction, its benefit and the details of the manner in which the deductions shall be made."  Id.  Significantly, written notice of the deduction must be provided to the employee prior to the initial authorization and deduction, and prior to any change in the amount of a deduction or "substantial change" in the benefits of the deduction.  Id.  When the amount of the deduction increases, a "substantial" change is presumed for purposes of requiring the employer to issue a written notice.  Id.  Moreover, in the event that the nature of the deduction fluctuates (for example, employee purchases in the workplace cafeteria), the employer and employee may agree in advance to pre-define the permissible range of authorized deductions to obviate the need for any additional notice or authorization.  Id. 

 

Prohibited deductions.  In addition, Subpart Section 195-4.5 of the Proposed Rulemaking identifies specifically prohibited wage deductions, which include:  (i) any repayments of loans, advances or overpayments not made in conformity with the Proposed Rulemaking; (ii) employee purchases of tools, equipment and attire required for work; (iii) recoupment of unauthorized expenses, repayment of employer losses, including spoilage and breakage, cash shortages, and fines or penalties incurred by the employer for the employee's conduct; (iv) fines or penalties for tardiness, excessive leave, misconduct, or quitting without notice; (v) contributions to political action committees, campaigns and similar payments; and (vi) fees, interests or the employer's administrative costs.  12 NYCRR § 195-4.5.

 

Recoupment of overpayments.  To recoup an overpayment made to an employee due to mathematical error or other clerical error, the employer must follow the procedures set forth in Subpart Section 195-5.1.  Specifically, the employer must provide a written "notice of intent" to the employee before commencing the deductions to recover the overpayment.  12 NYCRR § 195-5.1(e).  The employer's notice of intent to recover the overpayment shall contain: (i) the amount overpaid in total and per pay period; (ii) the total amount to be deducted; (iii) the date each deduction shall occur; (iv) the amount of each deduction; (v) a notice to the employee that he or she may contest the overpayment by a set deadline; and (vi) the procedure to contest the overpayment.  Id. § 195-5.1(e).

 

Dispute procedure for overpayment.  The Proposed Rulemaking sets forth specific guidelines governing a permissible dispute procedure for employees to contest the deduction of wages for overpayment.  12 NYCRR § 195-5.1(f)(1).  If an employee avails himself of the employer's dispute procedure, the employer may not commence deductions until at least three weeks after issuing the final determination to the employee.  Id. § 195-5.1(g).  The employer must pay the employee for any deduction found to be improper no later than the time period provided for payment of wages earned on the day of that determination, and may make the payment immediately.  Id. 

 

Effect of collective bargaining agreement.  Significantly, if the dispute resolution procedure of a collective bargaining agreement existing at the time of the issuance of the regulations provides at least as much protection as the dispute procedure contemplated by the regulations, the agreement's procedure will be in compliance with the law.  Id. § 195-5.1(f).  If a dispute resolution procedure is enacted in a collective bargaining agreement after the issuance of the regulations and provides at least as much protection to the employee as the contemplated dispute procedure, and the agreement references Subpart Section 195-5.1(f), that agreement's procedure also will be in compliance with the law.  Id.  

 

Repayment of wage/salary advances.  The amendments to Section 193 also permit an employer to make wage deductions for repayment of wage/salary advances, exclusive of any interest or fees (which may not be reclaimed through deductions).  Prior to paying any advance to an employee, the employer and employee must agree to the timing, duration and manner of repayment by deduction in writing, and no further advance may be given to the employee until the existing advance has been repaid in full.  12 NYCRR § 195-5.2(a). 

 

Dispute procedure for advances.  Similar to the dispute procedure for overpayments, the employer shall implement a dispute procedure for employees to contest the amount and frequency of deductions for advances.  12 NYCRR § 195-5.2(f).      

 

Format of documents and recordkeeping.  The Proposed Rulemaking requires any written authorizations, notices, responses, replies, or determinations set forth therein to be given in writing, through email or by other electronic means.  12 NYCRR § 195-5.3.  Moreover, the employer must keep a record of any authorization obtained from an employee for at least six years following the employee's termination of employment.  Id.

 

This post was authored by Matt Lampe, Terri Chase, and Joanne Alnajjar of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

 

August 28, 2013

EEOC: No Legal Presumption That "Partner" Title Precludes Employee Status Under ADEA

In a pair of informal discussion letters, dated July 25 and July 29, 2013, Equal Employment Opportunity Commission (EEOC) Legal Counsel, Peggy R. Mastroianni responded to public inquiries concerning accounting firm partner coverage under the Age Discrimination in Employment Act of 1967 (ADEA). While declining to comment on the EEOC's investigations or deliberative decision-making process, Mastroianni stated, "there is no legal presumption that an individual who holds the title of 'partner' is never an employee." To the contrary, she noted, it is well established that persons holding the job title of partner may qualify as employees under the ADEA and other federal anti-discrimination statutes. See Clackamas Gastroenterology Assocs., P.C. v. Wells, 538 U.S. 440 (2003); EEOC v. Sidley Austin Brown & Wood, 315 F.3d 696 (7th Cir. 2002); Simpson v. Ernst & Young, 100 F.3d 436 (6th Cir. 1997). She explained that this determination turns on whether the individual: (a) "acts independently" and "participates in managing the organization" (i.e., not an employee); or (b) is subject to the organization's control (i.e., an employee). Accordingly, a determination in any specific case that an individual is an "employee" despite holding the title of "partner" represents" a factual determination guided by existing case law" and not an expansion of the ADEA.


www.eeoc.gov/eeoc/foia/letters/2013/adea_accounting_firm_coverage_7_25.html

www.eeoc.gov/eeoc/foia/letters/2013/adea_accounting_firm_coverage_7_27.html

August 29, 2013

Third Circuit: Existence of Collective Bargaining Agreements Did Not Bar Plaintiffs From Pursuing FLSA Claims

The Third Circuit in Bell v. Southeastern Pennsylvania Transportation Authority, No. 12-4031 (3rd Cir. August 19, 2013), reversed the district court's dismissal of plaintiffs' claims under the Fair Labor Standards Act (FLSA). Plaintiffs, former and current bus drivers and trolley operators, brought an FLSA collective action to recover unpaid wages and overtime compensation relative to the pre-trip inspections to which they were subject prior to the start of their daily runs. In granting SEPTA's motion to dismiss, the district court concluded that the FLSA claims required interpretation of provisions of three collective bargaining agreements (CBA's) between SEPTA and the unions representing the plaintiffs, and, therefore, were subject to the grievance and arbitration provisions of those agreements.

In rejecting the district court's conclusion, Judge Barry explained that the plaintiffs do not contend that SEPTA violated any term of the CBA's, although each contained a provision addressing compensation for time worked prior to the start of the morning shift. Instead, plaintiffs assert that their FLSA claims exist independently of any rights they have under the applicable CBA's. As such, Judge Barry highlighted, resolution of these claims (i.e., failure to compensate for all time worked in performing pre-trip inspections; and exclusion of pre-trip responsibilities from calculation of overtime) do not require an interpretation of the CBA's. Rather, they require "a factual determination of the amount of time [plaintiffs] are required to work prior to their scheduled start and a legal determination regarding whether this time is (1) compensable and (2) subject to the overtime provisions of the FLSA."

Judge Barry distinguished the court's earlier ruling in Valdino v. A. Valey Engineers, 903 F.2d 253 (3rd Cir. 1990), on which the district court relied. In Valdino, the plaintiff, claiming he should have been compensated at the "journeyman" rate and not the "normal" rate under the CBA, alleged that the employer violated the FLSA by failing to pay his hours worked in excess forty per week at one and one-half times the journeyman rate. For this reason, Judge Barry noted that in contrast to the claims in this case, Valdino's FLSA claim was "tethered to the threshold question of whether or not he was entitled to the journeyman wages or normal wages under the governing CBA." In sum, the claim was derivative of his breach of contract claim and necessarily dependent on an interpretation of the CBA.


www2.ca3.uscourts.gov/opinarch/124031p.pdf

August 30, 2013

Second Circuit Holds Class Action Waiver in Arbitration Agreement Enforceable Against Plaintiff's FLSA Claims

The Second Circuit in Sutherland v. Ernst & Young, No. 12-304-cv (2nd Cir. August 9, 2013), concluded that as consequence of the Supreme Court's decision this term in American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), its so-called "effective vindication doctrine" as applied in In re American Express Merchant's Litigation, 554 F.3d 300 (2nd Cir. 2009) ("Amex"), is "no longer good law." Specifically, a showing that plaintiff has no economic incentive to pursue his/her statutory claims individually no longer provides a basis for invalidating a class-action waiver in an arbitration agreement. Instead, interpreting Italian Colors, the court instructed, arbitration agreements should be enforced according to their terms, including class-action waivers, absent a "contrary congressional command" in the statute governing the claim being brought. Finding no "contrary congressional command" in the Fair Labor Standards Act barring waiver of class arbitration, the court held that Sutherland must arbitrate her FLSA claims individually even though the ratio of her costs to potential recovery was approximately 100:1.

Quoting Italian Colors, the court noted that the "effective vindication doctrine" remains available to invalidate "'a provision in an arbitration agreement forbidding the assertion of certain statutory rights . . . . [and] would perhaps cover filing and administrative fees attached to arbitration that are so high as to make access to the forum impractical.'"


www.google.com/search?client=safari&rls=en&q=www.courthousenews.com/home/OpenAppellateOpinion.aspx%3F...79423%E2%80%8E&ie=UTF-8&oe=UTF-8

Sixth Circuit: Arbitration Agreement's Six-Month Limit on Claims Constitutes Invalid Waiver Under FLSA & Equal Pay Act

The Sixth Circuit, in Boaz v. FedEx Customer Information Services, Inc., No. 12-5319 (6th Cir. August 6, 2013), found unenforceable an arbitration agreement provision setting a six-month limitations period as applied to plaintiff's claims under the Fair Labor Standards Act (FLSA) and the Equal Pay Act (EPA). The court reasoned that the limitations provision was effectively an unsupervised waiver of plaintiff's statutory rights, which is barred under both the FLSA and EPA. See Jewell Ridge Coal Corp. v. Local No. 617, UMWA, 325 U.S. 161 (1945).

The court distinguished those cases cited by FedEx enforcing a shortened limitation period for clams arising under other statutes, such as Title VII. It explained that the policy considerations cited by the Supreme Court in prohibiting waivers under the FLSA, and by extension the EPA, are not applicable to clams under Title VII or any of the other referenced statutes. Id. at 167.

www.ca6.uscourts.gov/opinions.pdf/13a0209p-06.pdf

October 4, 2013

Mayor Bloomberg Signs Law Expanding Protections for Pregnant Workers

On October 2, 2013, Mayor Bloomberg signed into law an amendment to the New York City Human Rights Law that expands protections for employees who need reasonable accommodations relating to pregnancy, childbirth, or related medical conditions (Bill No. 0974-2012), after the bill was unanimously approved by the New York City Council on September 24, 2013.  The law will take effect on January 30, 2014 (120 days after it was signed into law). 

The amended law will require most New York City employers to provide reasonable accommodations to pregnant women and those who suffer medical conditions related to pregnancy and childbirth.  The text of the amended law includes examples of reasonable accommodations that might be required, such as "bathroom breaks, leave for a period of disability arising from childbirth, breaks to facilitate increased water intake, periodic rest for those who stand for long periods of time, and assistance with manual labor."  Consistent with existing law, a reasonable accommodation does not include accommodations that would cause "undue hardship" to an employer's business.

The law will apply to all businesses with four or more workers, counting both employees and independent contractors, thereby expanding protections that are already available under existing federal, state and local laws.  Employees who believe they have been discriminated against will be able to file a complaint with the New York City Commission on Human Rights or bring an action in court against their employer.

Employers will be required to provide written notice in a form to be determined by the NYC Commission on Human Rights of the right to be free from discrimination in relation to pregnancy, childbirth, and related medical conditions.  The notice must be provided to: (1) new employees at the commencement of employment; and (2) existing employees within 120 days after the effective date of the new law.  Such notice may also be conspicuously posted at an employer's place of business in an area accessible to employees.  The commission will conduct ongoing public education efforts to inform employers, employees, employment agencies, and job applicants about their rights and responsibilities under this law.

This post was authored by Matt Lampe and Emilie Hendee of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

October 30, 2013

Jersey City Enacts Ordinance Requiring Paid Sick Leave


Under a recently enacted ordinance, businesses in Jersey City, New Jersey with ten or more employees will be required to provide paid sick leave effective January 24, 2014. Under the ordinance, private-sector employees will earn one hour of paid sick time for every thirty hours worked, up to forty hours per year. Sick leave accrual will begin on an employee's first day of work, but will not be available for use until the employee has completed ninety days of employment. Unused paid sick leave will be carried over from year to year. An employer, however, may cap the carry-over at forty hours and limit the usage of paid sick leave to forty hours per calendar year.

Paid leave offered under an employer's existing policy will be counted towards satisfying the requirements of this ordinance provided such paid leave may be used for the same purposes and under the same conditions as paid sick leave under the ordinance. Employees, under the ordinance, may use paid sick leave for their own health needs or those of a family member (i.e., spouse, civil union partner, domestic partner, child, parent, sibling, or grandparent). Paid sick leave may be used in the smaller of hourly increments or the smallest increment used by the employer's payroll system to account for absences or use of other time. Employees may not be compelled to find a replacement to cover their hours as a condition of taking paid sick leave. An employer may require medical verification for an absence of more than three days.

Employees of businesses with less than ten employees will accrue unpaid sick leave at the same rate and subject to the same terms as conditions of usage as applicable to the accrual of paid sick leave by employees at covered businesses.

http://www.cityofjerseycity.com/uploadedFiles/Public_Notices/Agenda/City_Council_Agenda/2013/2013_Ordinance_2nd_Reading/Agenda%20Document(14).pdf

February 7, 2014

New Tax Credit is Now in Effect for Eligible New York Employers of Student Employees Who Earn Minimum Wage

On January 1, 2014, the newly created minimum wage reimbursement tax credit went into effect and could result in significant tax reductions for some New York employers.  The tax credit allows eligible employers to receive a refundable credit on their New York state taxes for hours worked by student employees paid the minimum wage.  The credit is in effect from 2014 until 2019.  On December 30, 2013, the New York Department of Taxation and Finance released Technical Memorandum TSB-M-13(8)C, (7)I to provide guidance on the credit.  The Memorandum outlines who qualifies as an eligible employer and an eligible employee, the amount of the credit, and limitations on the credit.

Eligible Employers: An employer or business owner is eligible for the tax credit if the employer is "a corporation (including a New York S corporation), a sole proprietorship, a limited liability company, or a partnership" and the employer or owner is subject to one of the following taxes: franchise tax on agricultural corporations organized and operated on a cooperative basis (Article 9 § 185); franchise tax on business corporations (Article 9-A); personal income tax (Article 22); franchise tax on banking corporations (Article 32), or franchise taxes on insurance corporations (Article 33).  

Eligible Employees: An employee's work hours may count toward the tax credit if the employee is (1) employed in New York by an eligible employer; (2) paid at the New York minimum wage rate by the eligible employer for at least part of the tax year; (3) at least 16 but under 20 years of age; and (4) a student during the period of time they are paid at the minimum wage rate.

"Students" include employees that are attending secondary school and most post-secondary schools located inside or outside New York State.  Qualifying schools include "any institution that offers a program of training to prepare students for gainful employment in a recognized occupation such as trade, technical, and vocational schools" but not "correspondence schools, schools offering courses only through the Internet, or on-the-job training courses."  Work done during scheduled school breaks still qualifies for the credit if the employee will return to school. 

Importantly, employers are required to obtain documentation of student status and be prepared to make the documentation available to the New York Tax Department upon request.  Adequate documentation could be "a student's identification card, a student's current or future course schedule issued by the school, a letter from the student's school verifying his or her current or future enrollment, or working papers" issued by the New York Department of Labor.

Credit Amount: Eligible employers and owners can take a tax credit at the rate of $0.75 per hour worked at the minimum wage rate by eligible employees for tax years starting in 2014.  The rate goes up to $1.31 for tax years starting in 2015 and $1.35 for tax years starting in 2016-2018.  However, these amounts will be reduced "if the federal minimum wage is increased to more than 85% of New York's minimum wage...to an amount equal to the difference  between New York's minimum wage and the federal minimum wage."

Limitations: The credit cannot reduce the tax below the minimum tax listed for taxpayers under Article 9 § 185, Article 9-A, Article 32, or Article 33.  But, for Article 22 taxpayers (personal income tax), the tax due may be reduced to zero.

Employers should note that this tax credit is not available if an ineligible employee is fired solely so the employer can hire an eligible employee.  Employers cannot use the same eligible employee as the basis for the minimum wage tax credit and another tax credit.  The minimum wage reimbursement tax credit is refundable, with any excess credit treated as a tax overpayment to be either credited or refunded without interest.

This post was authored by Matt Lampe, Emilie Hendee, and Laura Jean Eichten of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.

August 1, 2014

State Lawmakers Pass Bill to Eliminate Annual Wage Notice Requirement

As of June 19, 2014, both the New York State Assembly and the New York State Senate voted to pass a bill (A08106C / S05885-B) to amend the New York Wage Theft Prevention Act to eliminate the annual wage notice requirement (the "Bill").  The Bill will become law if signed by Governor Andrew Cuomo. 

Under the current law, New York employers are required to provide all employees with an annual wage notice before February first of each year, which includes information about the employee's rate of pay and the employer.  The Bill would eliminate this annual notice requirement for employers as long as the same information is provided at the time of hire. The Bill does not change the existing requirements to provide wage notices at the time of hire and/or where changes to employee pay are made.  

In addition to eliminating the annual wage notice requirement, the Bill would increase penalties for certain violations of the New York wage law.  Specifically, employers who fail to provide a wage notice within ten business days of a new employee's first day of work, or fail to provide a wage statement as required by the law, would incur damages of $50 per day (previously $50 per week), up to a total amount of $5,000 (previously $2,500).  An employer who is found to have retaliated against an employee in violation of the wage law could incur a civil penalty of up to $20,000 (previously $10,000). 

Additionally, the bill requires employers who have previously committed wage theft, or whose violation is willful or egregious, to report certain employee and wage data to the Commissioner of Labor to be published online.  The bill makes clear, however, that employers should not report or otherwise disclose individual identifying information of employees.  The bill makes it harder to avoid liability via restructuring by making "an employer similar in operation or ownership to a prior employer who had previously committed wage theft" liable for acts of the prior employer.  It also places increased burdens on contractors found liable for wage violations and sets up a Wage Theft Prevention Enforcement Account to help fund the administration and enforcement of the Wage Prevention Theft Act.

Employers should monitor the Bill and, if and when it is signed by Gov. Cuomo, take steps to adjust their payroll practices accordingly.  

This post was authored by Matt Lampe, Emilie Hendee, and Laura Jean Eichten of Jones Day.  The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association. 

About Employment Law

This page contains an archive of all entries posted to Labor & Employment N.Y. ("LENY") in the Employment Law category. They are listed from oldest to newest.

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Legislative Developments is the next category.

Many more can be found on the main index page or by looking through the archives.