Fourth Quarter 2019

 

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In This Issue:

Quick Hits

Forced Arbitration – FAIR or not?

New Developments in Drug Testing for Unemployment Benefits

Supreme Court to Weigh in on LGBT Rights

Flexible Workweeks and Overtime Pay

Regulatory Update

Fair Labor Standards Act ("FLSA") Overtime Pay Rule Finalized

Company Pays Nearly $1 Million in EEOC Discrimination Case Settlement

Legal Update

Recent Family and Medical Leave Act Decisions

Legislative Update

New Illinois Labor Laws

Workplace Trends

California's Strict Employee Classification Law: Coming Soon to a State Near You?

The Work Environment's Role in Attracting and Retaining Employees

In the News

The Dwindling Wisconsin Workforce

McDonald's CEO Makes Supersized Mistake

Links of Note

A Good-ish Idea

The Changing Workday

Civility in the Workplace

Strangest Thing We've Heard of Late

A Little Bird Told Me

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 Blueavocado.org - June 17, 2008

How Do I Handle an
Underperforming Staff Person?

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

Previous Issues

Quick Hits

Forced Arbitration – FAIR or not?

In September, the House passed H.R. 1423, the Forced Arbitration Injustice Repeal Act ("FAIR Act"). Proponents of the Act contend that arbitration agreements infringe upon an employee’s right to access the court system. Opponents believe that arbitration provides a quicker path to justice than the court system. While experts predict the FAIR Act will be "dead on arrival" in the Senate, there remains significant opposition to arbitration agreements on public policy grounds. For now, consider your employee make-up and business needs in determining whether an arbitration agreement is right for your workplace.

New Developments in Drug Testing for Unemployment Benefits

In 2015, the State of Wisconsin authorized drug testing of applicants for unemployment benefits. The U.S. Department of Labor ("DOL") recently issued similar rules, though implementation of the program is uncertain at this time. The testing applies only to those who work in industries requiring regular drug tests. Moreover, those who fail drug tests will still have an opportunity to qualify for benefits conditioned on drug rehabilitation.

Supreme Court to Weigh in on LGBT Rights

The United States Supreme Court is hearing cases on LGBT rights as related to the Civil Rights Act of 1964. The court is contemplating the interpretation of the Act’s prohibition of discrimination on the basis of sex. Two cases involving men who were fired because they are gay consider the issue of sexual-orientation discrimination. A third involves a woman who was fired after disclosing her transgender status. It bears noting that the Court of Appeals for the Seventh Circuit (which covers Wisconsin, Illinois, and Indiana) has already extended Title VII protections to individuals who are discriminated against on the basis of sexual orientation. Expect a decision on these cases in May or June 2020.

Flexible Workweeks and Overtime Pay

The U.S. Department of Labor ("DOL") is exploring a more flexible fluctuating workweek method for calculating overtime pay. The fluctuating workweek calculation can be utilized for employees whose hours vary from week to week. Eligible employees must meet specific criteria for this method to apply, and some employers find the concept confusing. The DOL proposal seeks to resolve this confusion through a variety of clarifications and changes. Comments on the DOL proposal are due by December 5, 2019.

Regulatory Update

Fair Labor Standards Act ("FLSA") Overtime Pay Rule Finalized

In September, the DOL announced its final rule regarding overtime pay, effective January 1, 2020. The final rule increases the threshold from $455/week to $684/week ($35,568 annually) for salaried employees and from $100,000 to $107,432 (annually) for “highly compensated employees.” In addition, employers may satisfy up to 10% of this salary requirement with nondiscretionary bonuses and incentive payments (e.g., commissions).

As we have cautioned previously, the salary threshold is just one component of the exemption test. To be exempt from overtime pay under the FLSA, an employee must also meet the duties test of the corresponding exemption (e.g., administrative, executive, professional). The final rule does not directly affect this requirement or change any of the elements of the various duties tests. However, this remains the most overlooked consideration in determining exemption eligibility.

Business Takeaway: You still have six weeks to get your "ducks in a row" on this one. In auditing your workforce, consider compensation, of course, and actual job duties (not just job titles or an outdated list of duties). As to compensation, start by focusing on exempt employees who are making less than $35,568 per year. The 2004 changes led to a spike in FLSA litigation, and the proposed 2015 changes prompted quite a scramble amongst business owners before they were halted. Contact Adam at 414-446-8800 or adam@goldsteinsc.com regarding these changes and any related employee classification questions.

Company Pays Nearly $1 Million in EEOC Discrimination Case Settlement

Breakthru Beverage Illinois has settled with the EEOC for $950,000 and other terms, including anti-discrimination training, diversity initiatives, revisions to its anti-discrimination policy, and the implementation of a tracking system relative to workplace demographics. At the center of the case is whether sales employees were discriminated against relative to their account and territory assignments. This perception (of discriminatory assignments) can be found in many industries, including law.

Business Takeaway: Many presume workplace discrimination to be more explicit (e.g., pay discrepancies, applicants rejected on an arguably protected basis). However, this investigation focused on the opportunities provided to various sales employees. While the company in this case maintains it was not discriminating (and that "pay and benefits are the same" for all employees), the settlement sum suggests it sensed it had significant exposure on the issue. Contact Corey at 414-446-8800 or corey@goldsteinsc.com regarding employee discrimination.

Legal Update

Recent Family and Medical Leave Act Decisions

The Circuit Court of Appeals for the Fifth Circuit (Louisiana, Mississippi, and Texas) recently upheld a lower court’s decision, finding that a plaintiff’s termination one day after he was informed that he was eligible for FMLA leave was lawful. The former employee had a history of work conduct issues and, when confronted on the matter, sought medical treatment for his elevated blood pressure and notified the company of safety risks he recorded (but did not report) months previously. While the company confirmed his FMLA leave eligibility, it also terminated him the following day for failure to report.

Conversely, the Massachusetts Supreme Judicial Court upheld a $1.3 million damage award to an employee who was terminated for taking a vacation while he was on FMLA leave. According to the trial court, the employer terminated the employee based on "shock, outrage and offense" after the employee requested additional leave and the employer discovered he went on vacation to Mexico while on leave. The company’s HR director even admitted that she believed (erroneously) that an employee could not take a vacation while on FMLA leave.

Business Takeaway: On the one hand, it is important to keep in mind the nuances of employee protections afforded by the FMLA. On the other, employees exhibiting poor performance or other unacceptable conduct are not immune from discipline simply because they are also eligible for FMLA leave. Contact Mark at 414-446-8800 or mark@goldsteinsc.com regarding regarding employee discrimination.

Legislative Update

New Illinois Labor Laws

Chicago recently passed the Chicago Fair Workweek Ordinance which addresses employee concerns about irregular schedules, short notice of shift changes, and other unpredictable elements of their work. The ordinance requires employers to provide adequate notice of work schedules as well as estimates of an employee’s average weekly hours within the first 90 days of employment. The ordinance also imposes penalties for schedule changes without notice. The new law takes effect July 1, 2020.

The Workplace Transparency Act, effective January 1, 2020, restricts certain non-disparagement and non-disclosure clauses in employment agreements, separation agreements, and settlement agreements. The Act also requires annual sexual harassment training and restricts mandatory arbitration policies for sexual harassment and other discrimination claims.

Business Takeaway: A timely reminder for those with any employees who work in Illinois, and especially Chicago and Cook County. Also perhaps a harbinger of what is to come for other regions of the country. Contact Mark at 414-446-8800 or mark@goldsteinsc.com if you have questions regarding these recent Illinois developments.

Workplace Trends

California's Strict Employee Classification Law: Coming Soon to a State Near You?

In September, California Governor Gavin Newsom signed AB 5 into law which introduced strict new rules for employee classification. Under the new law, workers will be considered employees—and not independent contractors—unless they meet three conditions (labeled the "ABC test"):

  1. The person is free from the control and direction of the business, both under the contract and in fact.
  2. The person performs work that is outside the usual course of the business’s product or service offerings.
  3. The person is customarily engaged in an independently established business.

The new law has faced significant opposition from various lawmakers and businesses, including gig-economy companies such as Uber (which faces lawsuits under existing law too). AB 5 takes effect January 1, 2020.

Business Takeaway: With respect to legal developments, it is often said that "as goes California, so goes the country." While this is a California law (i.e., not authoritative or binding outside California), it may be a sign of things to come. For example, companies with California operations may adapt their entire business models to be California-compliant for administrative reasons. How would transitioning contractors to employees affect your business?

The Work Environment's Role in Attracting and Retaining Employees

A Comcast call center in Delaware improved its employees’ work environment and experience by adding live plants, a fish tank, quieter rooms, games, and more. This stands in stark contrast to the former space (and typical call centers). However, some question whether changes such as these are simply "window dressing," and as such, fail to resolve the real issues facing employees who work there (e.g., customer confrontation, poorly designed or broken systems). As Zeynep Ton, author of The Good Jobs Strategy, points out, "A nice office can go only so far if there are fundamental problems with the job." Additionally, Harvard Business Review suggests that workplace wellness programs are surprisingly ineffective, while a Future Workplace survey demonstrates employees’ top priorities for workplace improvement included such basics as air quality and natural light, not ping-pong or pool tables.

Business Takeaway: While business productivity suffers when there are high rates of job dissatisfaction and workplace toxicity, how best to address these issues varies from company to company. Facility upgrades might work for some businesses while others may require a systematic overhaul in other areas, including company policies and practices. Contact Mark at 414-446-8800 or mark@goldsteinsc.com for additional information on employee engagement.

In the News

The Dwindling Wisconsin Workforce

U.S. Census data suggests that Wisconsin is losing working-age men and women and that the under-18 population is also decreasing. Such population changes could indicate a future worker shortage (particularly as increasing numbers of baby boomers retire) and may hinder efforts to grow local businesses or attract new ones to the area. Some proposed solutions include increasing efforts to attract students and workers from other states and countries as well as a renewed effort to break down barriers to employment for those who have been previously incarcerated.

Business Takeaway: How are you thinking differently these days about attracting and retaining talent?

McDonald's CEO Makes Supersized Mistake

McDonald’s recently fired its CEO, Stephen Easterbrook, following the discovery that Easterbrook and another McDonald’s employee had been engaged in a consensual sexual relationship. Even though the relationship was consensual, it violated McDonald’s company policy. McDonald’s head of HR also left the company because of the issue.

Business Takeaway: This is a reminder that your company policies should reflect your company’s identity and values. Whether you own a small business, or your company is the size of McDonald’s, setting the "rules of the game" for your workplace is critical to establishing your desired workplace culture. Contact Adam at 414-446-8800 or adam@goldsteinsc.com if you have questions about revising or improving your company policies.

Links of Note

A Good-ish Idea

We all like to think of ourselves as good people; however, such thinking may be detrimental, according to psychologist Donny Chugh. Individuals assuming that they are good will resist challenges to their actions and thinking (as any such suggestion is perceived as an attack on their basic character), whereas those who embrace the "good-ish" mindset are open to the possibility that they may be wrong or could do better.

The Changing Workday

Recent experiments with shortened workweeks (and fewer work hours per day) suggest that we are going through a work transformation. Author and professor Cal Newport suggests that "work today is where automobile manufacturing was in 1913." In other words, there is a revolution going on in the world of work (specifically related to the transition from manufacturing to "knowledge work"). Much as Ford’s assembly line transformed manufacturing, the changing nature of work is transforming our work life. The practice of law is not immune.

Civility in the Workplace

In a recent podcast, author Christine Porath speaks to incivility in the workplace, and its effect on work environment and morale. Porath emphasizes that (1) incivility is toxic to all (not just the perpetrator and victim), (2) civility actually boosts productivity, and (3) there is an important distinction between being civil and being nice.

Strangest Thing We've Heard of Late

A Little Bird Told Me

Two former Twitter employees were recently exposed as spies for Saudi Arabia. The employees had access to personal information and account data for millions of Twitter users. Mike Chapple, former NSA computer scientist, concedes that Twitter was a victim (as a target of its employees), but also argues that Twitter "had a responsibility to make sure that their resources weren’t being misused." Of note, neither employee was in a role that would have required access to the user information they pilfered. Do you think Twitter was a victim, at fault, or both?