Third Quarter 2015



In This Issue:

Firm News

Legal Update

White Collar Exemptions

And In Other FLSA-Related News

FMLA Protections Further Clarified by Recent Circuit Court Opinion

Colorado’s High Court Rules Against Employee in Medical Marijuana Case

Legislative Update

Changes to “one day rest in seven”

“Wage theft” legislation proposed

The New Economy

Employee or Independent Contractor? “On-Demand” Economy Blurs Lines

Hollywood Model Gains Popularity

And In Other Entertainment News...

In the News

At the Beep, Please Don’t Leave a Message

The Strangest Things We’ve Heard of Late

Published or Quoted Elsewhere:

Timing Works Out Well for Goldstein

Wisconsin Law Journal

Concealed Carry Concerns

Ozaukee Press

Packing Heat: Local Businesses Torn on Concealed Carry Law

Fox Point Patch

Social Media and the Workplace

(SBDC Front Page)

Are Unpaid Internships Legal?

(Dime Crunch)

Loose Lips Sink Ships – Things That Can Get Educators in Legal Hot Water!

(Teachers.Net Gazette)

The Focus on Misclassification

(SBDC Front Page)

Hiring in the New Economy

(SBDC Front Page)

Understanding and Bridging
the Generational Gap

(WORK Spring, 2009)

What is the Role of an
Attorney on the Board?

(Compasspoint Board Café - February 28, 2008)

Also published in - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

(Wisconsin Lawyer - Vol. 81,
No. 2, February 2008)

Previous Issues

Firm News

We would like to introduce the newest members of our team: Attorneys Michael King and Julia Schuster. Michael is a graduate of the University of Wisconsin Law School, where he served on the Law Review as Senior Managing Editor. Julia is a graduate of Marquette University Law School, where she was the recipient of multiple CALI Awards (highest grade in class). Welcome Michael & Julia!

Legal Update

White Collar Exemption Rule Changes Imminent

The Department of Labor’s proposed rule changes regarding white collar exemptions were released June 29, and the comment period on those rule changes ended September 4. We are now waiting for any revisions to the proposed rule, as well as a statement about the rule’s effective date.

Most significantly, the proposed rule changes:

  • Increase the salary threshold for "exempt" status. Currently, certain professionals and managers are exempt from overtime pay if they earn more than $23,660 per year and perform primarily "exempt" duties. Because the salary threshold is so low, it has been practically irrelevant for years. The proposed rule would raise this salary threshold to $50,440 per year, instantly making a large number of “exempt” employees “non-exempt” (i.e., OT-qualifying).
  • Require annual increases to the salary threshold, to keep pace with inflation and the cost of living.

Employer take-away: It may be a year before proposed changes become rules, but there are steps to take now to prepare for the changes and avoid misunderstandings:

  • Audit your exempt v. non-exempt classifications. Are your classifications accurate, and how much will they change under the new law?
  • Educate managers about how to discuss the issue with employees, as employees will become increasingly aware of the possibility that they qualify for OT (1½ their pay for all hours over 40 per workweek).
  • Ask managers to report concerns they are hearing from employees.
  • Plan for which, and how many, employees will shift from exempt to non-exempt under the new rules, and how to manage this transition.

And In Other FLSA-Related News

FedEx to Pay $227M in Settlement with Misclassified Drivers

In one of the largest employment settlements in recent history, FedEx has agreed to pay $227 million to settle multiple lawsuits which allege the delivery company misclassified its California drivers as independent contractors.

State of Wisconsin Owes Governor’s Security Team for Unpaid Overtime

The U.S. Department of Labor (DOL) recently ruled against the Wisconsin State Patrol, finding that the State Patrol must pay overtime to eight sergeants assigned to protect the Governor – going back to 2013. The State Patrol has responded by rescinding a $4/hr. raise and cutting the unit size in half.

The Bucks the Bucks Pay (and Don’t)

Some employers are tripped up by the minimum wage requirement of the Fair Labor Standards Act. A lawsuit against the Milwaukee Bucks suggests that the team's dancers were not paid minimum wage. Much is required of the dancers – practice, wardrobe, all the various required appearances – and they are paid flat stipends per game, practice, and appearance. The lawsuit was only recently filed, but other sports teams have run into similar issues (and paid out big dollars).

Employer take-away: Although the issue of misclassification has been talked and written about for years now, many employers (including sophisticated employers) continue to make mistakes. The stakes are high. This is especially so in light of recent DOL rulings modifying the traditional independent contractor test and announcing changes to the Fair Labor Standards Act.

FMLA Protections Further Clarified by Recent Circuit Court Opinion

The Family and Medical Leave Act (FMLA) allows a qualifying employee up to twelve weeks of unpaid leave for a serious health condition (and the right to have his job held for him while out on FMLA). But what qualifies as a serious health condition? In a recent case, Dalton v. ManorCare, the Eighth Circuit Court of Appeals found that Stage One Chronic Kidney Disease was not sufficiently serious to warrant protections granted under the FMLA because it was treatable and did not affect the plaintiff’s job performance. Further, the employer’s claimed reason for terminating Ms. Dalton (attendance issues, related in part to medical issues) was a bona fide business decision. This is the most recent in a line of decisions that interpret the FMLA more narrowly.

Employer take-away: Despite its many protections, the FMLA is not intended to cover all health conditions. Where a health condition is not sufficiently serious, the FMLA is not implicated and does not afford employees a defense against disciplinary action based on related absences.

Colorado’s High Court Rules Against Employee in Medical Marijuana Case

In the first case to test whether an employee using medical marijuana during off-work hours, as permitted by state law, leads to expanded employment rights, Colorado’s Supreme Court ruled against a quadriplegic man. The Dish Network customer service rep had been fired for testing positive for the drug at work. (He used marijuana to control debilitating seizures and had a medical marijuana card to support his claim.) The employee sued, citing a Colorado law that states that employees cannot be punished for legal activity performed outside of work. The Colorado Supreme Court ruled that the state law permitting marijuana use does not preclude an employer’s disciplinary action relative to marijuana use.

Employer take-away: As many as 24 states now consider marijuana legal in at least some circumstances. This decision reminds that legal is one thing, affecting employment (e.g., driving, productivity, etc.) is quite another.

Legislative Update

Changes to “One Day Rest in Seven”

Wisconsin has eased the “one day rest in seven” requirement (Sec. 103.85, Wis. Stats.) such that employees may now voluntarily waive the requirement. This waiver must be in writing.

Employer take-away: Although this gives flexibility to employers, remember that it applies to factory and mercantile establishments only. Also, how long an employee’s waiver remains valid is an open question.

“Wage Theft” Legislation Proposed

Wisconsin State Senate Bill 5 would increase the penalties for employers who improperly withhold wages, and make it easier for employees to win wage claims. This proposed legislation is just recently introduced, and its chances for passage are less than clear. Stay tuned.

The New Economy

Employee or Independent Contractor? “On-Demand” Economy Blurs Lines

Technology continues to change the way we work and can challenge traditional notions of what constitutes an employer-employee relationship. Uber is a case in point. The on-demand ride services company connects consumers with drivers using smartphone technology. The company asserts that it is, in essence, an app and that drivers are independent contractors. And it has won cases brought by drivers in several states.

However, the California Labor Commissioner’s Office recently ruled in favor of a driver who filed a claim against Uber. And on September 1, a federal judge certified a class of Uber drivers in their lawsuit against the company allowing them to proceed with the lawsuit as a group, and potentially on behalf of other Uber drivers as well.

Hollywood Model Gains Popularity

Trends that start in California sometimes find their way across the country. So it appears will be the case with the “Hollywood model” for project work. In this model, highly skilled teams of workers are brought together for complex, short-term projects (think big-budget movies). Corporate America is finding the model useful for projects as diverse as bridge building, new product development and application design. The team typically works as an adjunct to long-term employees who do the day-to-day work that follows in the wake of the project.

And In Other Entertainment News...

For you audiophiles interested in new approaches to work, the story behind the Netflix approach to culture (and its new unlimited leave policy).

And for those of you interested in the Netflix slide deck on culture (called, by Facebook COO Sheryl Sandberg, "the most important document ever to come out of the Valley").

In the News

At the Beep, Please Don’t Leave a Message

Love it or hate it, voicemail may be becoming a thing of the past. As it turns out, voicemail is surprisingly expensive in terms of productivity and fees – and it’s unpopular to boot.

When JP Morgan Chase recently gave employees the opportunity to opt-out of its voicemail system, approximately two-thirds of employees volunteered (the original goal had been to eliminate half of the accounts). As a result, the bank is saving $10 per person per month. In addition, employees are no longer spending 10-15 minutes each day entering prompts and listening to messages – favoring email, text messaging, Facebook, instant messaging and other collaborative applications to communicate with clients.

Employer take-away: Before dispensing with voicemail for new and more efficient tools, consider your clientele. Those without ready access to computers or smartphones, as well as those who aren’t oriented to technology, may find it difficult to adjust.

The Strangest Things We’ve Heard of Late

A Position to Die For

You know it’s not your typical employment application when questions include “Do you wish to execute a suicide operation?” and “Who should we contact in case you became a martyr?” But the real question is which is stranger – the questions on the Al-Qaeda application or the fact that there’s an application at all?

And Now for Something Completely Different

We have all experienced the ups and downs of “bring your baby to work” policies. When a woman’s pet alpaca died after giving birth, she had to figure out a way to bottle-feed the orphan every two hours (both she and her husband had full-time jobs). Luckily, the woman has a job conducive to non-traditional animals.

The opposite was true in the U.S. Attorney’s Office for the Eastern District of Virginia. In this case, a dispute over bringing dogs to work on the weekends turned into a full-blown email battle and yet another reminder of how easily such things go viral, and how embarrassing it can be for all involved. Here’s one choice excerpt: “If you had any sensitivity to the history and culture of this great institution that is EDVA, you would know that this building was named for a great man who brought his dog to work in this very building. His picture – with his dog – hangs in our lobby.”

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Legal & Legislative Update

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Legal Update

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