Category Archive: Employment Law

Jan 30

Minor Leaguers, Minor Wages, Major Problems

By Joseph Gentile.

Major League Baseball (“MLB”) and the Major League Baseball Players Association (“MLBPA”) recently came to terms on a new collective bargaining agreement (“CBA”), which will last through the 2021 MLB season. This means that, by the end of the next CBA, the MLB will have gone twenty-six consecutive seasons without a work stoppage.

The MLBPA represents players designated on the forty-man major league roster; so what does that mean for Minor League Baseball players who fell short of making the forty-man roster? Another year of making less than minimum wage.

Minor Leaguers are not entitled to minimum wage or overtime because of an exemption in Section 213 of the FLSA. It provides that minimum wage and overtime provisions do not apply to employees of an “amusement or recreational establishment” if the establishment does not operate more than seven months per year, or if the employer can prove that total revenue in one-half of the preceding year was less than one-third of the total revenue in the other half of the same preceding year.

At the lowest level of the Minor Leagues, players earn wages that amount to less than $4 per hour if players received their regular hourly wage for the first forty hours of the week and time-and-a-half for the remaining 20 hours. At the highest level of the Minor Leagues, players earn a salary that puts them barely above minimum wage.

Unionization is one possible way to combat this problem, but asking minor leaguers to pay union dues out of their already-miniscule salaries is asking a lot. Additionally, the ultimate goal of these minor leaguers is to get out of the Minor Leagues as quickly as possible, which makes it difficult to gain momentum in the effort to unionize Minor Leagues.

There have been efforts to unionize the Minor Leagues in the past, but no real progress was made. The only hope would be fore a large union to come in and organize, but the players are more likely to want to remain quiet while trying to advance to the Major Leagues. If a Major League team were to promote an advocate for Minor League unionization, it would surely cause more distractions than the Major League team may be willing to handle.

It seems as if Minor Leaguers will continue to earn less than minimum wage until MLB owners are ready to step in, which, unfortunately, does not seem likely to happen soon.

Nov 16

NLRB Adjusts Reimbursement Calculation for Unlawfully Discharged Employees

By Natalie Russell.

In a recent decision issued by the National Labor Relations Board (the “Board”), King Soopers, Inc. and Wendy Geaslin, persons who were wrongfully terminated may receive full reimbursement of search-for-work and interim employment expenses. Case 27-CA-129598 (2016). For over 80 years, the Board has awarded search-for-work damages. However, the Board’s traditional calculation of these damages failed to make a dischargee whole because the search-for-work damages were considered offsets to a dischargee’s interim earnings. This meant that if a dischargee spent more money searching and relocating for an interim job than they actually earned at that job, they would only be repaid up to the amount of the interim wages they earned. Id. at 5. In King Soopers, Inc., the Board found that the traditional approach, which limited the damages, not only “fail[ed] to make victims of unlawful discrimination whole . . . [but also] discourage[d] discriminatees in their job search efforts.” Id. at 5.

Faced with the challenge of balancing fairness to the wrongfully terminated with the authority granted to the Board through Section 10(c) of the National Labor Relations Act (the “Act”), the Board concluded that it has “ ‘broad discretionary’ authority to order remedies that will ‘effectuate policies’ of the Act.” Id. at 3 (quoting NLRB v. J.H. RutterRex Mfg., 396 U.S. 258, 262–63 (1963)). The Board not only has a duty to the wrongfully terminated, but also must create deterrents so that employers are discouraged from engaging in unlawful and discriminatory conduct. Id. at 3. By granting make-whole relief in the form of full reimbursement of search-for-work and interim-employment damages, the Board has fulfilled its duty.

The story of Juana Perez is a primary example of the positive impact make-whole relief will have on the wrongfully terminated. Ms. Perez worked at a location, earning $1,000 per month prior to her unlawful discharge. In seeking interim employment, Ms. Perez spent $6,000 on relocation costs, training, and job searching. She ultimately found employment, earning $750 per month for two months. Under the Board’s traditional reimbursement approach, Ms. Perez would receive only $1,500 because the search-for-work expenses would only be offset against the interim earnings. Id. at 5. However, under the new make-whole formula, Ms. Perez would be reimbursed for the full $6,000 of search-for-work expenses, regardless of how much she earned from her interim employment.

By providing full reimbursement of search-for-work and interim employment benefits, the Board assures that the wrongfully terminated employees are made whole.

May 09

Transgender Employee Rights

By Natalie Russell.

Lesbian Gay Bisexual Transgender (“LGBT”) workers are seeing progress in the protection of transgender employee rights by the Equal Employment Opportunity Commission (“EEOC”). Title VII of the Civil Rights Act of 1964 protects employees against workplace discrimination “based on . . . sex.” Traditionally, however, the term “sex” was defined as one’s gender at birth. Any claims that were filed for sex-related acts of discrimination, other than those relating to one’s gender at birth, could not be adjudicated by the EEOC.

The term “sex” was expanded in the 1989 Price v. Waterhouse decision when the U.S. Supreme Court held that sex stereotyping was protected under Title VII. The law continued to evolve and, in 1998, rendering the majority opinion in Onacle v. Sundowner Offshore Services, Justice Scalia acknowledged that same-sex harassment is also discrimination under Title VII.

Still, it was not until the 2012 landmark decision, in Macy v. Dep’t of Justice, when the EEOC recognized that claims based on transgender discrimination are protected under Title VII and can be adjudicated according to 29 C.F.R. Part 1614 of the EEO complaint process. Under Macy, a transgender individual who experiences sex discrimination in the workplace can establish a case under three theories: sex, gender stereotyping, and gender identity. Sex discrimination based on gender identity exists when an agency denies employment because the applicant is transgender, terminates employment based on transgender status or repeatedly uses the incorrect gender pronoun when interacting with or talking about a transgender employee.

On April 9, 2015, the EEOC v. Lakeland Eye Clinic, P.A. $150,000 settlement marked a “historic” moment for the EEOC. It was one of the first times the EEOC filed a case for sex discrimination against a transgender employee. The EEOC has made LGBT coverage under Title VII a priority through its Strategic Enforcement Plan (“SEP”). In 2015 alone, the EEOC held over seven hundred events where LGBT rights were discussed. With its directed attention on LGBT coverage, the EEOC has resolved one hundred eighty-four cases and settled twelve of two hundred seventy-one transgender/gender-identity claims it received in 2015.

The EEOC continues its efforts to educate, prevent, and correct LGBT rights and has committed to protecting sex-discrimination rights of transgender individuals.

Apr 18

Equal Pay for Equal Play

By Mary Cunningham.

On April 12, the U.S. observed Equal Pay Day—a day created to discuss the pay gap between men and women. Equal Pay Day received special attention this year because of its temporal proximity to the day the U.S. Women’s National Soccer Team (USWNT), represented by five of its best players, filed a complaint with the Equal Employment Opportunity Commission against the U.S. Soccer Federation alleging wage discrimination. The U.S. Soccer Federation is the governing body of soccer in all its forms in the United States. U.S. Soccer also determines compensation for members of both the U.S. men’s national soccer team (USMNT) and the women’s national team.

The women’s team asserts that the players for the men’s team are paid almost four times more than the women’s players. Their complaint notes, for example, that the men are paid no less than $5,000 for an exhibition game, and as much as $22,625 for winning the game. In contrast, the women are paid $3,600 to play an exhibition, and are paid only $4,950 for a similar win.  The team bonus the women received after winning the 2015 World Cup was also several million dollars short of the team bonus the men received in 2014 after being eliminated in the second stage of the tournament. This pay disparity seems unjustified particularly in light of USWNT’s claim that they bring in more revenue than USMNT.

U.S. Soccer disagrees with USWNT on revenue, arguing that USWNT is drawing from a particularly successful year to make broad conclusions. The federation also notes that FIFA tournament payout for men’s soccer is dramatically higher than payout for women’s soccer. They argue the difference in payout primarily explains the pay gap for the men’s and women’s World Cups.

For a wage discrimination claim under Title VII, USWNT has the difficult task of showing proof of U.S. Soccer’s discriminatory intent. To establish a prima facie case for wage discrimination under the Equal Pay Act (EPA), they must show that the women’s and men’s players perform equal work, which involves substantially equal skill, effort, and responsibility in similar conditions. If this standard is met, the burden shifts to U.S. Soccer (the employer) to prove that the difference in pay is justified by one of four defenses: “(i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.”

The fourth defense—“factor other than sex”—has been broadly interpreted. For example, the Seventh and Eighth Circuits have held that “acceptable business purposes” arising from “factor other than sex” does not need to be a reasonable business purpose to constitute a defense.  Essentially, if U.S. Soccer is correct and the men’s team produces significantly more revenue than the women’s, paying the women less may be acceptable to a court unwilling to adjudicate the wisdom of business decisions. U.S. Soccer, however, would likely avoid simply arguing women’s pay is justified because “market forces,” such as the professional soccer job market, have determined that women are paid less than men. This argument seems problematic because, if adopted, it frustrates the EPA’s goal of overcoming historic sex-based wage discrimination created by market forces.

At this point, a likely strategy for USWNT involves tackling wage issues during their collective bargaining negotiations to avoid what would be an interesting, but tricky, legal battle.

Apr 04

TYSON FOODS, INC. v. BOUAPHAKEO

By Courtney Sokol.

On March 22, in Tyson Foods, Inc. v. Bouaphakeo, the U.S. Supreme Court, in a 6-2 decision, upheld an Eighth Circuit ruling that certified a group of workers at Tyson Foods as a class under both a Rule 23(B)(3) class action and a Fair Labor Standards Act of 1938 (FLSA) collective action. Tyson Foods did not pay its employees for time spent “donning and doffing” necessary protective gear. The employees argued that Tyson Foods violated FLSA and the Iowa Wage Payment Collection Law by not paying appropriate compensation for time spent putting on and taking off the protective clothing at the beginning and end of the day and lunch break. While the central issues addressed by the Court address certification of a class with non-identical members, of which many were uninjured, the decision offers broader implications for the strength of worker protections.

Delivering the opinion of the Court, Justice Kennedy noted the grueling and dangerous conditions that Tyson’s workers experienced along with the necessity of such gear. Until 1998, the workers were paid under a system called “gang-time,” where employees were compensated for time spent only at their workstations. This time did not include when they were required to put on or take off protective gear. In response to a federal-court injunction, Tyson in 1998, began to pay all employees for an additional 4-minute period called “K-code time.” The four-minute period is the time estimated by Tyson for how long employees needed to put on their gear. However, in 2007, Tyson stopped K-code time, and instead only paid some employees beyond their gang-time wages for time spent dressing and undressing.

In response to this change, the employees filed suit in the United States District Court for the Northern District of Iowa, alleging FLSA violations. FLSA requires that a covered employee who works more than 40 hours a week receive excess time worked “at a rate not less than one and one-half times the regular rate at which [the employee] is employed.” 29 U.S.C. §207(a). Additionally, FLSA requires employers to pay employees for activities which are integral and indispensable to their regular work, even if the work does not occur at the work station.

Here, the employees argued that putting on and taking off their protective gear were integral and indispensable to their hazardous work, and therefore, compensation for such is required by FLSA. The employees raised the same claim under the Iowa Wage Payment Collection Law, which includes FLSA mandated overtime.

At trial, the employees had to prove that they worked 40 hours or more per week in order to qualify for FLSA overtime. Respondents proposed to bifurcate proceedings by requesting that the District Court address first, whether the time spent preparing their protective gear was compensable under FLSA and how long the activity took on average; and second, a statistical methodology be used to determine how much each employee would recover.

Tyson Foods did not move for a hearing regarding either of the above issues raised by the employees, but instead challenged the class certification under FRCP Rule 23(B)(3) and FLSA collective action. Tyson Foods argued that the varying amounts of time it took employees to don and doff different protective equipment made the lawsuit too speculative for class-wide recovery.

The Court turned to its decision in Anderson v. Mt. Clemens to explain that when employers violate their statutory duty to keep proper records, which prevents employees from establishing how much time they spent doing uncompensated work, the “remedial nature of [FLSA] and the great public policy which it embodies . . . militate against making” the burden of proving uncompensated work “an impossible hurdle for employee[s].”

The court held that the class members were joined under a common question, which satisfies the requirements for a class-action suit irrespective of differences among the members. Although the case was decided on procedural grounds, Kennedy’s majority opinion put great emphasis on the danger of the Respondent’s profession paired with the necessity of the protective gear. In evoking the remedial nature of FLSA, the Court is seemingly united behind pro-labor sentiment.

Mar 01

New York City Restaurants Adopt a No-Tipping Policy

By Charles Lazo on March 2, 2016.

In the past few decades, Fair Labor Standards Act (“FLSA”) lawsuit filings have been increasing at a steep rate. This can partly be contributed to FLSA, but also to states’ parallel wage and hour laws. In particular, state laws that pertain to tip credit.

Under FLSA, a restaurant can take a “tip credit” towards its minimum wage obligation for tipped employees equal to the difference between the required cash wage of at least $2.13 per hour and the federal minimum wage of $7.25 per hour. Under New York Labor Law (“NYLL”), restaurants may take a tip credit of $1.50 per hour toward their $9.00 per hour minimum wage obligation. However, for a restaurant to take a tip credit, it must comply with both FLSA’s and NYLL’s strict notice requirements—something that many restaurants fail to meet, despite their good intentions.

To avoid costly wage and hour lawsuits, some restaurant employers are deciding to forgo the advantages of the tip credit and instead pay its waitstaff a higher hourly wage. In effect, the restaurant employers do not need to meet the strict notice requirements, and consequently, do not need to protect themselves from wage and hour lawsuits.