Wednesday, November 28, 2012

Franco v. Arakelian Enterprises, Inc.

LACBA Daily E-Briefs

Filed November 26,2012

-Labor and Employment Law-

U.S. Supreme Court rulings upholding contractual class action waivers did not overrule California precedent setting forth several factors to be applied on a case-by-case basis to determine whether a class action waiver precludes employees from vindicating their statutory rights.

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Tuesday, November 27, 2012

Dos Taquitos Mexican Restaurant in Raleigh, NC, to pay more than $48,000 in back wages to 26 employees following US Labor Department investigation

News Release

WHD News Release: [11/20/2012]
Contact Name: Michael D’Aquino
Phone Number: (404) 562-2076
Release Number: 12-2186-ATL

RALEIGH, N.C. — Dos Taquitos Mexican Restaurant in Raleigh has agreed to pay 26 employees $48,125 in back wages following an investigation by the U.S. Department of Labor's Wage and Hour Division that found violations of the Fair Labor Standards Act's minimum wage, overtime, child labor and record-keeping provisions.
Investigators found that employees were paid fixed salaries without regard to the number of hours worked. This practice resulted in the employees' regular rates of pay (defined as their salaries divided by the total weekly hours worked) falling below the federal minimum wage of $7.25 per hour. The employer also failed to pay overtime compensation at time and one-half the employees' regular rates for hours over 40 in a workweek, as required. Additionally, the restaurant employed a 14-year-old who was allowed to work beyond the hours permitted by the FLSA's Child Labor Regulation No. 3, which limits the total hours and times of day that 14- and 15-year-old employees may work. Finally, the employer failed to keep accurate records of hours worked, wages paid and proof of dates of birth for workers under 18.
"The Wage and Hour Division is committed to protecting low-wage employees in the restaurant industry, where we have found widespread FLSA violations. Employers must not profit by exploiting some of our most vulnerable workers," said Richard Blaylock, director of the Wage and Hour Division's Raleigh District Office. "This case should serve as notice to other employers who may not be paying their employees in accordance with federal law."
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Simply paying employees a salary does not exempt them from minimum wage and overtime protections. In general, "hours worked" includes all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal work activity to the end of the last principal activity of the workday. Additionally, the law requires that accurate records of employees' wages, hours and other conditions of employment be maintained.
The FLSA's child labor provisions protect young workers by limiting the types of jobs and the number of hours they may work. Children under 14 may not be employed in nonagricultural occupations covered by the FLSA. Fourteen- and 15-year-olds may be employed outside of school hours in a variety of nonmanufacturing and nonhazardous jobs for limited periods of time and under specified conditions.

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Federal judge orders ILWU to stop filing grievances or lawsuits over disputed work

November 23, 2012

Office of Public Affairs

A district court judge has ordered the International Longshore and Warehouse Union to stop processing grievances and filing lawsuits regarding its dispute with the International Brotherhood of Electrical Workers over the work of plugging in, unplugging and monitoring refrigerated shipping containers at the Port of Portland.
Both unions claim the work, citing various contracts and collective bargaining agreements. In August 2012, the National Labor Relations Board issued a decision concluding that the employees represented by the IBEW are entitled to the work. Despite that ruling, the ILWU and two of its locals have continued to file and process grievances against carriers at the port, seeking lost wages for work assigned to the IBEW. The ILWU also filed a claim against the IBEW in federal court under the Labor-Management Relations Act.
In granting the petition for injunctive relief from the NLRB's Regional Office in Seattle late Wednesday, U.S. District Judge Michael H. Simon found that, by filing grievances and seeking enforcement of subsequent awards despite the Board's decision, the ILWU had the unlawful secondary object of pressuring shipping carriers to cease doing business with the Port of Portland. He enjoined the union from filing, processing, maintaining, prosecuting, or threatening grievances or new lawsuits in the matter.

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Wednesday, November 21, 2012

Suncoast Seabird Sanctuary in Indian Shores, Fla., to pay more than $21,000 in back wages to workers following US Department of Labor investigation

Press Releases
U.S. Department of Labor
INDIAN SHORES, Fla. -- Suncoast Seabird Sanctuary Inc. in Indian Shores has agreed to pay nine employees a total of $21,336 in back wages following an investigation by the U.S. Department of Labor’s Wage and Hour Division that found violations of the Fair Labor Standards Act’s minimum wage and overtime provisions.
Investigators found that the employer failed to pay some employees for several workweeks, which resulted in minimum wage violations. Additionally, some workers were paid fixed salaries without regard to the number of hours worked, which resulted in their pay falling below the federal minimum wage of $7.25 per hour. These salaries also failed to include compensation for overtime hours – those beyond 40 per week – at time and one-half employees’ regular rates, as required by the FLSA.
“Employers are legally obligated to pay for all hours worked, including overtime when employees work more than 40 hours in a week,” said James Schmidt, district director of the division’s Tampa District Office. “The Wage and Hour Division is using every enforcement tool available to ensure workplace protections, and to prevent employers who choose not to comply with the law from gaining an unfair advantage in the market over those who do comply. We remain vigilant in securing for workers the wages that they rightfully have earned.”
Suncoast Seabird Sanctuary is a wild bird hospital.
The FLSA provides an exemption from both minimum wage and overtime pay requirements for individuals employed in bona fide executive, administrative, professional and outside sales positions, as well as certain computer employees. Simply paying employees a salary does not exempt them from overtime. To qualify for the exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all of the requirements specified by the department’s regulations.
The FLSA requires that covered, nonexempt employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also are required to maintain accurate time and payroll records.

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US Labor Department recovers more than $212,000 in back wages for 40 construction workers employed on renovation project in Cleveland

Press Releases
U.S. Department of Labor

P.S. Construction Group violated prevailing wage law, has been debarred from federal contracts for 3 years

CLEVELAND -- The U.S. Department of Labor has recovered a total of $212,269 in back wages for 40 employees of Copley-based P.S. Construction Group LLC. An investigation by the department’s Wage and Hour Division found that the employees had been underpaid while performing general construction work on a renovation project for the city of Cleveland involving St. Luke’s Hospital on Shaker Boulevard. The project was funded under an agreement with the U.S. Department of Housing and Urban Development.
Investigators found that P.S. Construction Group and its principal, Peter G. D’Agostino Jr., violated provisions of the Davis-Bacon and Related Acts as well as the Contract Work Hours and Safety Standards Act by paying workers less than required prevailing wages. The company also falsified payrolls to create an appearance that workers had received the correct wages. The company and D’Agostino have been debarred from competing for federal contracts for three years.
“Not only does the practice of skimping on required wages and fringe benefits shortchange the workers involved, it results in unfair competition,” said George Victory, director of the Wage and Hour Division’s Columbus District Office. “Enforcement of prevailing wage laws levels a competitive playing field for all contractors, some of whom are tempted to gain an advantage by cheating. Our investigation and debarment of this company demonstrate the Labor Department’s commitment to enforcing laws that protect both employers and employees. We will continue to use all of the tools at our disposal to ensure that taxpayer dollars are properly spent.”
The DBRA requires all contractors and subcontractors performing work on federal and certain federally funded projects to pay their laborers and mechanics proper prevailing wage rates and fringe benefits as determined by the secretary of labor.
The CWHSSA applies to federal service contracts and federal and federally assisted construction contracts exceeding $100,000. It requires contractors and subcontractors on covered contracts to pay laborers and mechanics employed in the performance of the contracts one and one-half times their basic rate for all hours worked over 40 in a week.

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Monday, November 19, 2012

NLRB finds Facebook posting that caused salesman’s discharge at Chicago-area BMW dealership was not protected

October 01, 2012

The National Labor Relations Board has found that the firing of a BMW salesman for photos and comments posted to his Facebook page did not violate federal labor law, because the activity was not concerted or protected.
The question came down to whether the salesman was fired exclusively for posting photos of an embarrassing and potentially dangerous accident at an adjacent Land Rover dealership, or for posting mocking comments and photos with co-workers about serving hot dogs at a luxury BMW car event. Both sets of photos were posted to Facebook on the same day; a week later, the salesman was fired from Knauz BMW in Lake Bluff, IL.
The Board agreed with Administrative Law Judge Joel P. Biblowitz, who found after a trial that the salesman was fired solely for the photos he posted of a Land Rover that was accidently driven over a wall and into a pond at the adjacent dealership after a test drive. Both dealerships are owned by the same employer.
In a charge filed with the NLRB, the salesman maintained that he was principally fired for posting photos and sarcastic comments about his dealer serving hot dogs, chips and bottled water at a sales event announcing a new BMW model. “No, that’s not champagne or wine, it’s 8 oz. water,” the salesman commented under the photos. Following an investigation,the regional office issued a complaint. Judge Biblowitz found that this activity might have been protected under the National Labor Relations Act because it involved co-workers who were concerned about the effect of the low-cost food on the image of the dealership and, ultimately, their sales and commissions.
The Land Rover accident was another matter. A salesperson there had allowed a customer’s 13-year-old son to sit behind the wheel following a test drive, and the boy apparently hit the gas, ran over his parent’s foot, jumped the wall and drove into a pond.  The salesman posted photos of the accident with sarcastic commentary, including: “OOPS”.
The National Labor Relations Act protects the group actions of employees who are discussing or trying to improve their terms and conditions of employment. An individual’s actions can be protected if they are undertaken on behalf of a group, but the judge found, and the Board agreed, that was not the case here.
As Judge Biblowitz wrote, “It was posted solely by [the employee], apparently as a lark, without any discussion with any other employee of the Respondent, and had no connection to any of the employees’ terms and conditions of employment. It is so obviously unprotected that it is unnecessary to discuss whether the mocking tone of the posting further affects the nature of the posting.” Because the posts about the marketing event did not cause the discharge, the Board found it unnecessary to pass on whether they were protected.
However, the three-member panel differed in its opinions of a “Courtesy” rule maintained by the employer regarding employee communications. Chairman Mark Gaston Pearce and Member Sharon Block found the language of the rule to be unlawful because employees would reasonably believe that it prohibits any statements of protest or criticism, even those protected by the National Labor Relations Act.
Dissenting, Member Brian E. Hayes found that the employer’s rule was “nothing more than a common-sense behavioral guideline for employees” and that “nothing in the rule suggests a restriction on the content of conversations (such as a prohibition against discussion of wages)”.
The Board ordered Knauz BMW to remove the unlawful rules from the employee handbook and furnish employees with inserts or new handbooks. The decision, dated Sept. 28 but made public today, was the Board’s first involving a discharge for Facebook postings; other such cases are pending before the Board.

Board finds Hotel Bel-Air violated labor law by failing to bargain to impasse with union

October 04, 2012

The National Labor Relations Board has found that the Hotel Bel-Air violated federal labor law by offering severance packages in exchange for a waiver of recall rights to laid-off employeeswithout bargaining to impasse with the union representing its workers. The hotel, on the west side of Los Angeles, laid off about 250 union workers when it temporarily closed in 2009 for renovations.
In its Sept. 28 decision, the Board ordered the hotel to meet and bargain with UNITE HERE Local 11, which represents the hotel workers, regarding the effects of the temporary shutdown, and, at the request of the Union, torescind the waiver and release forms signed by union members in 2009.
According to the Board decision, the hotel bargained with the union for nine months about the terms of a separation agreement and recall rights for employees who would lose their jobs during the renovation. While the parties were engaged in a series of “off-the-record” discussions to narrow their differences, the hotel on its own contacted its employees and offered them severance payments in exchange for waiving their right to return to their jobs upon Hotel Bel-Air’s reopening.
Hotel managers claimed they had reached impasse with the union and said the Board shouldn’t consider the “off-the-record” exchanges to be a continuation of bargaining. But the Board rejected that view, finding that anything that creates a new possibility of fruitful discussion breaks an impasse. Under Board law, a union and employer must bargain over layoffs or the effects of layoffs until the parties reach an agreement or arrive at legitimate impasse.
The Board further found that the hotel engaged in unlawful direct dealing by contacting the employees about severance packages without going through the union.

NLRB contracts with FMCS to provide mediators in Board Alternative Dispute Resolution program

October 23, 2012

As part of its ongoing efforts to encourage the settlement of cases, the National Labor Relations Board has contracted with the Federal Mediation and Conciliation Service (FMCS) to provide mediators to parties who participate in the Board’s alternative dispute resolution (ADR) program.
Since 2005, the Board’s ADR program has provided parties with the assistance of a mediator to aid them in settling unfair labor practice cases pending before the Board.  Parties reached a settlement in 60% of the cases mediated under the ADR program, and the Board approved the settlements in each of those cases.  ADR programs provide the parties with several benefits, including savings in time and money, greater control over the outcome of their cases, and more creative, flexible, and customized resolutions of their disputes.  Settlement discussions conducted with the assistance of an ADR neutral tend to broaden resolution options, often going beyond the legal issues in controversy, and can be particularly useful where traditional settlement negotiations are likely to be unsuccessful or have already been unsuccessful.
Until now, the Board has primarily used Administrative Law Judges to serve as mediators.  The Board’s FMCS contract will bring new resources to the ADR program by providing parties with the opportunity to use experienced FMCS mediators.  Parties will continue to have the opportunity to use the ADR program director as a mediator as well.
The Board established the ADR program in response to the success experienced by other federal agencies and the federal courts in settling contested cases through ADR, as well as the success of the NLRB’s own settlement judge program at the trial level.  About 90% of meritorious NLRB cases are settled by agreement at some point in the process, whether at the Regional Office where the charge is filed, before or during an Administrative Law Judge trial, or while the case is pending before the Board.
Participation in the ADR program is voluntary, and a party who enters into settlement discussions under the program may withdraw from participation at any time.  There are no charged fees or expenses for using the program.  The Board stays further processing of the case while the case is in the program.  Cases generally may not be in the program longer than 30 days, and in no event longer than 60 days.

Advice Memos find at-will clauses in two employee handbooks are lawful

October 31, 2012

NLRB Acting General Counsel Lafe Solomon today released an analysis of at-will employment clauses in two employee handbooks, finding that both are lawful under the National Labor Relations Act.
Charges filed with the NLRB alleged that the handbooks, distributed by a California trucking company and a restaurant in Arizona, defined at-will employment so broadly that employees would reasonably think they could not engage in activity protected by the National Labor Relations Act. However, the two memos prepared by the NLRB’s Division of Advice in Washington DC found that they were not overly broad.
As both memos explain, an employer violates the Act by maintaining work rules or policies that explicitly prohibit NLRA-protected union or concerted activity, such as joining a union or discussing terms and conditions of employment with coworkers. Even if not explicit, a rule can be unlawful if employees would reasonably construe the language to prohibit such activity.
The clause in a handbook maintained by Rocha Transportation in Modesto, California advised drivers that their employment is at-will and may be terminated at any time. “No manager, supervisor, or employee of Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will,” it continued. “Only the president of the Company has the authority to make any such agreement and then only in writing.” The Division of Advice Memo notes that this clause explicitly states that the relationship can be changed, and so employees would not reasonably assume that their NLRA rights are prohibited.
At Mimi’s CafĂ© in Casa Grande, Arizona, the Teammate Handbook description of at-will employment includes the sentence: “No representative of the Company has authority to enter into any agreement contrary to the foregoing “employment at will” relationship.” The Advice Memo found this was not unlawfully broad because the clause does not require employees to agree that the employment relationship cannot be changed in any way, but merely highlights that the employer’s representatives are not authorized to change it.
The Advice Memos are provided as guidance for employers and human resource professionals in a developing area that has drawn considerable attention recently. They distinguish the language in the two handbooks from another at-will clause that was recently found by an NLRB Administrative Law Judge to be unlawfully broad. That case was settled before Board review.
Because Board law in this area remains unsettled, the Acting General Counsel is asking all Regional Offices to submit cases involving employer handbook at-will provisions to the Division of Advice for further analysis and coordination.

NLRB Administrative Law Judges issue 207 decisions and settle 438 cases in FY 2012

November 06, 2012

The National Labor Relations Board’s Division of Judges disposed of 645 cases in FY 2012, issuing 207 decisions and settling 438 cases. Half of the decisions issued within 82 days of the close of hearing and within 41 days of the receipt of briefs or submissions.
The high ratio of settlements to decisions reflects a continuing effort by the Division to encourage the resolution of cases by the parties themselves, through judges’ involvement in pre-trial conference calls and on-site meetings.
Total case intake increased slightly from the previous year, from 1,161 to 1,192. The total case intake includes all cases docketed with the Division by NLRB regional offices at the time a complaint is issued by the General Counsel. Many of the docketed cases are withdrawn or settled by the regional offices before the assignment or involvement of an NLRB judge. Absent settlement, judges conduct trials and issue initial decisions that may then be appealed to the 5-member Board.
The NLRB employed 37 Administrative Law Judges at the end of the fiscal year, compared to 40 at the end of FY 2011. All ALJ decisions are available through this page.

DC Circuit enforces Board order; Daycon Products must reinstate former strikers

November 08, 2012

The United States Court of Appeals for the D.C. Circuit on Tuesday enforced the National Labor Relations Board’s order finding that a Maryland janitorial supply company prematurely declared impasse in negotiations with its employees’ union and unlawfully failed to reinstate workers after they went on strike to protest that declaration.
In its unpublished opinion, the Court summarily enforced the Board’s September 2011 order requiring Daycon Products Company, Inc., to reinstate all striking employees and make them whole for any losses incurred because of the refusal to reinstate them earlier. The Court also affirmed that the company illegally subcontracted out work without negotiating with the union, and ordered Daycon to rescind any unilateral changes and resume bargaining.
Daycon employees have been represented by the Drivers, Chauffeurs and Helpers Local Union 639, affiliated with the International Brotherhood of Teamsters, since 1973. In April 2010, after about 10 negotiating sessions for a new contract, the company declared it had reached impasse and implemented its last bargaining order. Days later, union employees walked out on strike because of the unfair labor practice. They offered to return unconditionally in early July of that year.
If a strike is called in response to an employer’s unfair labor practices, the employer must reinstate striking workers when they offer unconditionally to return to work, even if it means displacing workers who were hired in the meantime. However, Daycon refused.
In enforcing the Board’s order, the Court agreed that “the Board’s findings are supported by substantial evidence in the record.”  It also rejected Daycon’s procedural challenges, including a claim that the Board denied it a fair hearing by issuing a press release summarizing the case following a decision by an administrative law judge.

NLRB Judge finds 24 Hour Fitness arbitration clause violates federal labor law

November 09, 2012

An NLRB Administrative Law Judge has issued a decision finding that 24 Hour Fitness USA, Inc. maintained and enforced an unlawful arbitration policy that required employees to give up their federally protected rights to take concerted action.
The California-based corporation, which operates fitness centers across the country, required new employees to agree in writing to submit all employment-related claims to individual arbitration. Employees were also prohibited from discussing such claims with their co-workers.
The employee handbook advised employees they could opt out of the policy by taking a series of steps. However, Judge William L. Schmidt found that the provision was “an illusion” because the process was “convoluted” and because employees would be unable to identify others who had also opted out with whom they could discuss their case.
Judge Schmidt relied on the Board’s recent decision in DR Horton, which detailed Appellate and Supreme Court decisions dating back to the 1940s reaffirming the principle that “employers cannot enter into individual agreements with employees in which the employees cede their statutory rights to act collectively.”
He rejected the arguments of 24 Hour Fitness and the Chamber of Commerce, which filed an amicus brief in the case, saying they wished “to establish an employer’s right to restrict employees, in order to hold a job, from exercising their statutory right to use the full-range of legal remedies generally available to all citizens.”
The fitness center operator successfully pursued enforcement of the individual arbitration clause in at least eight lawsuits filed by employees at several California facilities alleging discrimination and wage and hour violations.
In his decision, Judge Schmidt ordered the company to remove the prohibition against class or collective actions from the employee handbook, and to notify all employees of the change. He also ordered 24 Hour Fitness to notify all arbitral or judicial tribunals where it has pursued enforcement of the clause that it desires to withdraw the request.

Friday, November 9, 2012

Class Certification is Denied where there are significant individual issues

November 7, 2012

Morgan v. Wet Seal, Inc.

Trial court did not abuse discretion in denying certification of class action by employees claiming they were required to purchase clothing and merchandise from employer as a condition of employment and to travel between business locations without reimbursement for mileage. There were significant liability issues that needed to be resolved on an individual basis, as claims were not founded on any written or uniformly followed company policy; a number of putative class members and supervisors declared that employees were not required to purchase merchandise; and plaintiffs? own evidence refuted inference of company-wide failure to reimburse employees for mileage. 

Employer may not force former employee to arbitrate claims, even if she led executives to believe she signed arbitration agreement before resigning

October 17, 2012

Gorlach V. The Sports Club Co., California Courts of Appeal
-2nd District No. B233672, October 16, 2012

    Susan Gorlach worked for The Sports Club Co. as the director of human resources. In 2010, Sports Club revised its employee handbook to include an agreement to arbitrate claims, which all employees had to sign as a condition of their employment with Sports Club. Although Gorlach led Sports Club executives to believe she had signed the arbitration agreement, she did not. On Aug. 6, Gorlach resigned. In 2011, she sued Sports Club for wrongful termination, retaliation, and sexual harassment. Sports Club moved to compel arbitration of her claims, and argued that even though Gorlach had not signed the agreement, she assented to it because she continued to work for Sports Club after learning that it was condition of her employment. Gorlach argued that the arbitration agreement was not enforceable given that she had not signed it. The trial court denied the motion to compel arbitration, finding that no arbitration agreement existed.
    Affirmed. Even if an employee does not sign an arbitration agreement, an agreement to arbitrate may be implied when the employee accepts the agreement by continuing her employment. However, such a contract will only arise when there is a mutual agreement between the parties and intent to promise. In this case, Gorlach did not sign the agreement, and never planned on doing so. Thus, there was no mutual intent to agree to the arbitration agreement, and never planed on doing so. Thus, there was no mutual intent to agree to the arbitration agreement. Further, the employee handbook only urged employees to agree to arbitration and did not unilaterally impose an arbitration agreement on its employees. As such, by choosing not sign the agreement, Gorlach did not intend to be bound by it. Consequently, there was no implied agreement to arbitrate, and the trial court's denial of the petiton to compel arbitration was correct.
Opinion by Justice Suzukwa