July 2010 Archives

July 30, 2010

Statute of Limitations for Disparate Impact Claims

Disparate impact discrimination occurs when an employment policy or practice that may appear to be neutral on its face nonetheless adversely affects a particular protected group of employees or applicants. The statute of limitations is a cutoff point that protects employers from defending lawsuits for employment actions that were made years in the past. For Title VII claims, the rules require that a charge be filed with the Equal Employment Opportunity Commission (EEOC) within 300 days of the latest discriminatory act.

Just a few months ago, in Lewis v. City of Chicago, the United States Supreme Court held that a disparate impact employment discrimination charge is deemed timely if it is filed with the EEOC within 300 days of the discriminatory practice's application.

Let me explain. The City of Chicago had created a hiring list for its firefighters based on the results of a written exam taken more than two years earlier. A class of approximately 6,000 African American applicants who were not hired filed suit against the City claiming that the test had a disparate impact on minority candidates and therefore violated Title VII.

The City of Chicago claimed that if any discriminatory act occurred, it occurred at the time the test was administered and graded - more than 300 days earlier. The plaintiffs claimed that the discriminatory act occurred when the employment decisions were actually made. The U.S. Supreme Court agreed with the plaintiffs and held that a disparate impact employment discrimination charge filed with the EEOC within 300 days of a discriminatory practice's application will be deemed timely.

This means that test scores sitting in an applicant's or employee's file can form the basis of a new discrimination claim if those test scores are used as the basis for a new employment decision. Thus, if testing is being used to select potential employees, it's extremely important that these tests are reviewed by an employment discrimination attorney before any of the results are used in making employment decisions.

July 29, 2010

New Executive Compensation Requirements Contained in the Wall Street Reform and Consumer Protection Act

Last week I wrote about the many whistleblower protections contained in The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Act"). The same Act also contains new requirements with respect to executive compensation paid by public companies. I will discuss many of those new requirements below. Please keep in mind that this list is not meant to be exhaustive and it is therefore recommended that you speak to an executive compensation attorney to fully understand the law.

Shareholder Vote on Executive Compensation (Say on Pay)

The Act requires that, at least once every three years, public companies solicit a non-binding shareholder vote to approve the compensation of their named executive officers. In addition, at least once every six years, shareholders must be able to vote on whether the "say on pay" shareholder vote will occur every one, two, or three years. The first "say on pay" approvals (including the separate vote on the frequency of "say on pay" voting) are required beginning with shareholder annual meetings occurring on or after January 21, 2011.

Shareholder Vote on "Golden Parachutes"

The Act also includes a requirement for a non-binding shareholder vote of "golden parachute" compensation (payments to named executive officers upon a change of control), unless the compensation was previously subjected to a regular "say on pay" vote. Any condition upon which the payment of such compensation is based must also be disclosed.

Disclosure of Executive Compensation

In addition, the Act requires the SEC to amend its rules to modify the executive compensation disclosure requirements to include "pay versus performance" and "internal pay disparity" disclosures. The Act requires disclosure of the relationship between executive compensation actually paid and the company's financial performance, taking into account any change in the value of the company. In other words, companies will be required to include in its annual proxy statement a clear description of compensation paid to its executives and how the compensation relates to the issuer's financial performance.

Independence of Compensation Committees

The Act requires the SEC to issue rules requiring national securities exchanges to mandate that each member of a company's Compensation Committee be independent. In determining a director's independence, companies will be required to consider relevant factors, including: (i) the source of a director's compensation, including any consulting, advisory or other compensatory fee paid by the company to the director, and (ii) whether the director is affiliated with the company or any of its subsidiaries or affiliates.

Recovery of Erroneously Awarded Compensation (Clawback)

Lastly, the Act requires the SEC to issue rules mandating that companies establish a policy to recover (clawback) incentive compensation from current or former executive officers in cases following a restatement of financial results. If a company files a restatement that discloses a material noncompliance with any financial reporting requirement, the clawback applies to incentive compensation that was based on the erroneous financial statements and was paid during the three-year period preceding the date the restatement is required.

July 28, 2010

Starting Your Own Business Satisfies an Employee's Duty to Mitigate Damages

As a New York employment attorney, I was recently reviewing cases that dealt with the calculation of back pay. There was one opinion that I came across that especially sparked my interest - Serricchio v. Wachovia Securities, LLC, 606 F. Supp. 2d 256 (D. Conn. 2009).

Before I discuss the case, it is important to understand that the largest portion of damages awarded for an unlawful discharge is usually back pay. This amount is calculated by subtracting what the plaintiff earned since that discharge from the amount that would have been paid had the plaintiff not been discharged. The plaintiff always has a duty to mitigate damages by making reasonable efforts to find suitable alternative employment. When the plaintiff fails to make a reasonable effort to find comparable employment, the amount subtracted will be what s/he could have earned through reasonable diligence.

In Serricchio, a jury found that the plaintiff had been constructively discharged from his employment as a financial advisor in violation of the Uniform Services Employment and Reemployment Rights Act, 38 U.S.C.A. ยง 4301, et seq. ("USERRA"). After he was terminated, the plaintiff went into the start-up tanning salon business with his wife instead of finding another job in the financial field. When calculating damages, the employer argued that the plaintiff should be barred from recovery because he failed to mitigate his damages when he made the decision to pursue self-employment instead of finding another job in the financial field.

However, the court rejected the employer's argument and instead concluded that "pursuing [self-employment], rather than . . . seeking other employment in the finance sector was consistent with [the plaintiff's] duty to mitigate his losses."

This case makes clear that the decision to become self-employed, alone, does not indicate a lack of reasonable diligence. Reasonable diligence should be evaluated in light of the individual characteristics of the plaintiff and the job market. When self-employment is undertaken in good faith as a reasonable alternative to seeking other comparable employment, the plaintiff has satisfied the duty. Whether or not the business immediately succeeds is not very relevant. What counts is how much effort the plaintiff put into making that business a success. In other words, mitigation will be measured by effort, not results.

July 28, 2010

New York State Department of Labor Further Revises WARN Act Requirements

On July 9, 2010, the New York State Department of Labor (NYSDOL) filed a new and revised Notice of Emergency Adoption and Proposed Rule Making implementing the New York State Worker Adjustment and Retraining Notification (NY WARN) Act. Effective on the date of filing, the new and revised regulations supersede and replace all former rules.

The NY WARN Act requires private employers with 50 or more employees in New York State to provide 90 days notice prior to a plant closing, mass layoff, relocation, or other covered reduction in work hours.

The NY WARN Act covers plant closings affecting 25 or more employees, mass layoffs involving 25 or more employees (if the 25 or more employees comprise at least 33% of all the employees at the worksite), mass layoffs involving 250 employees (regardless of what percentage of the workforce is involved), and certain other relocations and covered reductions in work hours. Part-time employees are not included for purposes of deciding whether notice is required. However, once notice is required, part-time employees who will be affected by the employer's action are entitled to receive the notice.

New Changes

1. A new section was added relating to the rescission of notice of a plant closing, mass layoff, relocation or covered reduction in hours. This section provides that if, after the required notice is given, an employer determines it will continue its operations and that the announced plant closing, mass layoff, relocation, or covered reduction in hours will not occur, the employer is required to give a notice of rescission as soon as possible after such determination is made. The notice of rescission must include reference to the earlier notice, the reason why such action is no longer required, and must meet all of the requirements of the original notice as to parties entitled to notice.

2. The definition of "affected employee" was changed to exclude an officer, director, or shareholder, as well as a business partner, a consultant or contract employee who has a separate employment relationship with another employer and is paid by that employer or is self-employed.

3. The required statement giving notice must now inform the employee that she may be eligible for unemployment insurance after her last day of employment, and further inform her that she can obtain information on employment assistance and unemployment benefits from the NYSDOL's local offices.

4. Although the NY WARN Act already empowered the NYSDOL to recover back wages and benefits on behalf of employees and impose civil penalties (up to $500 for each day of violation) against employers that fail to provide the required notice, the new regulations state that an employer would not be subject to a civil penalty only if the employer pays each affected employee the total amount for which the employer is liable, including back pay and all fringe benefits, within three weeks from the employee's date of layoff. Paying employees their regular wages and benefits over the period of violation (that exceeds three weeks) would not exempt the employer from civil liability.

5. The administrative review requirements were revised to provide that the Commissioner of Labor is to notify an employer of any violations identified and the amounts due for wages, benefits, and/or penalties associated with such violations. The Commissioner is not to issue an order or determination addressing such violations without first holding a hearing on the matter, unless the employer waived such right pursuant to a settlement upon terms accepted by the Commissioner.

As is rather obvious, the NY WARN Act requirements are fairly complicated and difficult to understand. As such, to guarantee complete compliance with this law, it is always recommended that employers first consult with a New York WARN Act attorney.

July 27, 2010

Does Your Employment Agreement Contain an "Express, Unequivocal Agreement to Arbitrate?"

On June 21, 2010, in Rent-A-Center, West, Inc. v. Jackson, the United States Supreme Court held that when an employee signs an arbitration agreement that contains an "express, unequivocal agreement to arbitrate," it is the arbitrator's responsibility to determine the overall enforceability of the agreement. The Court held that the only question a court will be permitted to consider regarding an arbitration agreement is whether the agreement contains an "express, unequivocal agreement to arbitrate."

In this case, Rent-A-Center required its employees to sign mandatory arbitration agreements that failed to contain an "express, unequivocal agreement to arbitrate." Although the plaintiff had signed the agreement, he nonetheless sued Rent-A-Center in federal court for discrimination.

The plaintiff argued that Rent-A-Center's mandatory arbitration agreement was "as a whole, unconscionable" and therefore unenforceable. However, he did not contend that the agreement failed to create an "express, unequivocal agreement to arbitrate."

Due to this failure, the Supreme Court found that the enforceability of the agreement as a whole was a matter for the arbitrator to resolve. The Court explained that because the plaintiff failed to challenge the validity of the provision of his arbitration agreement which gave the arbitrator exclusive authority to determine all issues between the parties, including the arbitration agreement's enforceability (he never challenged whether there was an express, unequivocal agreement to arbitrate), the arbitration agreement was upheld.

Thus, it is now clear that the only viable challenge that an employee can make in court is whether there is an "express, unequivocal agreement to arbitrate." As a New York employment contract attorney, I can help ensure that the proper and requisite language is included in all employment agreements.

July 26, 2010

An Employee's Obligation to Provide Notice of his Request for Leave Pursuant to the Family and Medical Leave Act (FMLA)

The FMLA applies to private employers that employ 50 or more employees for each working day during 20 or more workweeks in the current or preceding calendar year. For public employers, which include federal and state governmental employers, the number of employees doesn't matter.

To be covered by the FMLA, a worker must be employed for at least 12 months at the time the leave begins (the 12 months need not be consecutive), complete at least 1,250 hours of service with the employer during the 12-month period immediately preceding the leave, and be employed at a work site at which the company employs at least 50 employees or work within a 75-mile radius of a work site that employs 50 employees.

Under the FMLA, eligible employees are entitled to unpaid leave during any 12-month period for one or more of the following reasons: (1) the birth of a child and to care for the child, (2) the placement of a child for adoption or foster care, (3) to care for an immediate family member (spouse, child, or parent) who has a serious health condition requiring inpatient care or ongoing treatment, (4) their own serious health condition that requires inpatient care or ongoing treatment, (5) because of any "qualifying exigency" for a spouse, child, or parent arising out of active duty in the armed forces in support of a contingency operation (or being notified of an impending call or order to active duty), or (6) to care for a covered service member with a serious injury or illness if the employee is the spouse, child, parent, or next of kin of the service member ("military caregiver leave").

Proper Notice

To exercise one's rights under the FMLA, an employee must request leave and, in doing so, provide the employer with notice that he is requesting leave for a qualifying reason. That doesn't mean that the employee is required to specifically mention the FMLA. It does, however, require that employee to indicate the specific reason for his request. Merely calling in "sick" is not enough. Moreover, unless the need for leave is not foreseeable, the employee is required to provide notice as soon as possible under the circumstances.

But how much notice is necessary? Generally, the statute requires that an employee give advance notice (typically 30 days) but that requirement is examined on a case-by-case basis, and whether the notice was reasonable will depend on whether the need for leave was foreseeable.

Before any final decisions are made with respect to an employee's request for FMLA leave, it is recommended that you first get the advice of an FMLA attorney.

July 24, 2010

NYC Comptroller Liu Announces Nearly $1 Million Recovered On Behalf Of 33 Cheated Workers

See Official Press Release Here

July 23, 2010

Congress Attempts to Curb the Misclassification of Employees as Independent Contractors

In addition to enforcement actions from the many government regulatory agencies, there are also two bills in Congress dealing with the misclassification of employees as independent contractors.

The Taxpayer Responsibility, Accountability and Consistency Act of 2009 allows individuals classified as independent contractors to petition the Internal Revenue Service (IRS) to determine their proper classification, limits the ability of employers to classify individuals as independent contractors, and increases penalties for misclassification.

Specifically, The Taxpayer Responsibility, Accountability and Consistency Act of 2009 amends the Internal Revenue Code to:
(1) Require reporting to the IRS of payments of $600 or more made to corporations;
(2) Set forth criteria and rules relating to the treatment of workers as employees or independent contractors; and
(3) Increase penalties for failure to file correct tax return information or comply with other information reporting requirements.

Another bill, the Employee Misclassification Prevention Act, would amend the Fair Labor Standards Act (FLSA) to strengthen enforcement and penalties for misclassification of employees as independent contractors. If the misclassification accompanied a violation under the FLSA's maximum-hours or minimum-wage requirements, a worker could recover double his or her liquidated damages, or the amount equal to any wages lost. Additionally, the legislation would require the Department of Labor to target industries it determines to have frequent incidents of misclassifying workers for audits, such as the construction industry.

Specifically, the Employee Misclassification Prevention Act:
(1) Amends the FLSA to require every person to keep records of non-employees (contractors) who perform labor or services (except substitute work), including through an entity such as a trust, estate, partnership, association, company, or corporation, for remuneration; and provide certain notice to each new employee and new non-employee, including their classification as an employee or non-employee and information concerning their rights under the law;
(2) Makes it unlawful for any person to discharge or otherwise discriminate against an individual (including an employee) who has opposed any practice, or filed a complaint or instituted any proceeding related to this Act, including with respect to an individual's status as an employee or non-employee; and fail to classify accurately an employee or non-employee;
(3) Doubles the amount of liquidated damages for maximum hours, minimum wage, and notice of classification violations by an employer;
(4) Subjects a person who violates such requirements (including recordkeeping requirements) to a civil penalty of up to $1,100; or repeatedly or willfully violates such requirements to a civil penalty of up to $5,000 for each violation;
(5) Directs the Secretary of Labor to establish a webpage on the Department of Labor website that summarizes the rights of employees under this Act and other appropriate information;
(6) Amends the Social Security Act to require, as a condition for a federal grant for the administration of state unemployment compensation, for the state's unemployment compensation law to include a provision for auditing programs that identify employers that have not registered under the state law or that are paying unreported compensation where the effect is to exclude employees from unemployment compensation coverage; and establishing administrative penalties for misclassifying employees or paying unreported unemployment compensation to employees; and
(7) Requires any office, administration, or division of the Department of Labor to report any misclassification of an employee by a person subject to the FLSA that it discovers to the Department's Wage and Hour Division (WHD).

July 22, 2010

Workplace Bullying Might Soon Be Illegal in New York

The New York State Senate recently passed a bill that would give employees the right to sue their employer for workplace bullying. However, in order for the bill to become law, it still needs to be passed by the State Assembly.

Most people, at one point or another, have had a boss that is just plain mean and obnoxious. Some bosses are notorious for intentionally embarrassing their employees and others are so rude that the office atmosphere becomes a tense and passive aggressive environment. There are too many bosses who abuse their title and take advantage of their employees. Unfortunately, as the law stands right now, there really isn't much an employee can do if the obnoxious behavior is not motivated by a discriminatory animus. Most people have a difficult time understanding this concept. Basically, you cannot sue an employer for being mean. Your boss's unacceptable behavior doesn't have to be fair - it just has to be legal.

However, this all might soon change. New York's Healthy Workplace/Workplace Bullying Bill would allow employees that were verbally assaulted in the workplace to sue their boss and receive lost wages, compensation for emotional distress, as well as punitive damages. A bullying boss, according to the bill, is someone who is motivated by malice and who is destructive and injurious. The law would make it unlawful for one employee to subject another employee to malicious conduct, and furthermore, the law will provide protection against retaliation for complaining about such conduct.

Nonetheless, the bill gives employers an opportunity to not be held liable when it exercises reasonable care to prevent and promptly correct the abusive conduct.

Be sure to check back for all updates with respect to this bill. In addition, if you feel that there is currently a problem with bullying in your office, it is always smart to contact an anti-harassment employment attorney.

July 21, 2010

Important Whistleblower Protections in Wall Street Reform and Consumer Protection Act

As a New York whistleblower attorney, the new whistleblower protections contained in The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Act"), signed into law by President Obama, are of special interest to me. The new law includes a number of provisions designed to protect employees who report fraud and securities law violations to the U.S. Securities and Exchange Commission ("SEC") and commodities board.

These sections close loopholes in the anti-retaliation provisions in the Sarbanes-Oxley Act of 2002 ("SOX"), a corporate whistleblower law, by covering subsidiaries of publicly traded companies. Until now, most courts have interpreted those provisions as applying only to the parent entity and not to its subsidiaries. Also important is the fact that it gives whistleblowers a private cause of action for damages stemming from any illegal retaliation.

The Act also includes a qui-tam provision that provides monetary rewards for whistleblowers who disclose original information that the government did not know about concerning major fraud in the commodity and stock exchanges. Under the Act, the SEC will pay whistleblowers cash rewards of between 10% and 30% percent of any monetary sanctions in excess of $1,000,000 that the government, as a result of the whistleblowers' assistance, recovers through either civil or criminal proceedings.

Lastly, the Act also prohibits mandatory arbitration on Wall Street related whistleblower claims, permits jury trials under SOX, requires the SEC to establish a whistleblower protection office, and sets a three-year statute of limitations for retaliation cases under the False Claims Act.

July 19, 2010

New York Employers- Requesting Doctor's Notes for Health-Related Absences

If an employee will be absent for more than a certain period of time, many employers require that employee to submit a doctor's note to avoid possible sick-leave abuse. However, it is relatively easy these days to procure a doctor's note from one's personal physician or even a friend. It is important that employers take the time to consider the steps they want to take to verify the doctor's note, and then apply those policies consistently to avoid potential discrimination claims.

Employers should establish a policy that requires employees to provide a doctor's note affirming that the employee was medically unfit for work if they were absent for a certain period of time. If the doctor's note seems intentionally vague, employers should always request additional information. Employers can legally ask for more information to verify whether the employee was actually not able to perform the essential functions of his or her work.

Also, as long as the employer pays the costs, employers always have the option of asking employees to be examined by a doctor of the employer's choosing.

However, before taking any action, employers must read and review all contractual agreements to which the employee is a party, including collective bargaining agreements. If the employee is covered by an agreement or contract, the terms of that agreement could dictate the employer's actions.

Lastly, it is always recommended that employers consult with an FMLA attorney to ensure that they do not violate federal and state laws including the Family Medical Leave Act ("FMLA") and/or the Americans With Disabilities Act ("ADA"). Each law has specific rights and obligations for employers when it comes to managing health-related absences.

July 16, 2010

A New York Employer's Failure to Renew an Employment Agreement May Violate Anti-Discrimination Laws

An employee who alleges unlawful discrimination under Title VII and the Age Discrimination in Employment Act ("ADEA"), as well as other federal discrimination laws, must first establish that (1) she is a member of a protected class, (2) she is qualified for the job at issue, (3) she suffered an adverse employment action, and (4) the adverse action occurred under circumstances that led to an inference of discrimination. Although the first two elements are usually rather easy to satisfy, these cases very frequently center on whether or not a materially adverse employment action was taken.

In Leibowitz v. Cornell University, the Second Circuit (New York's federal appellate court) held that when an employee seeks the renewal of his or her employment contract, the employer's decision not to renew the contract may constitute an adverse employment action under anti-discrimination laws and serve as the basis for a legal claim. This is true even if the employer's decision whether to renew or not is completely discretionary.

The court stated that there is simply no reason that the discrimination laws should not apply with equal force to an employer's decision regarding a current employee who is denied a renewal of an employment contract. An employee seeking a renewal of an employment contract, just like a new applicant or a rehire after a layoff, suffers an adverse employment action when an employment opportunity is denied and is protected from discrimination in connection with such decisions under Title VII and the ADEA. The mere fact that the employer's decision not to renew is completely discretionary does not mean that it is not an "adverse" employment decision.

Because contract renewal decisions can potentially subject your company to claims of discrimination, it's vital to consult with an employment discrimination attorney when make decisions affecting employment contracts.

July 15, 2010

Does your company's anti-discrimination policy list a "supervisor" as someone to whom employees may complain about harassment?

If the answer is yes, you might want to think twice about it, as potential problems may arise in instances where the supervisor is also the harasser.

When the alleged harasser is in a supervisory position over the plaintiff, the objectionable conduct is automatically imputed to the employer. However, the employer is nonetheless permitted to raise the Faragher/Ellerth affirmative defense to liability and/or damages. This defense states that an employer may avoid liability for harassment that does not involve an adverse employment action (e.g., termination or demotion) if the employer can demonstrate: (1) it took reasonable steps to prevent and promptly correct harassment in the workplace, and (2) the aggrieved employee unreasonably failed to take advantage of the employer's preventive or corrective measures.

In Gorzynski v. Jetblue Airways Corp., the Second Circuit (which includes New York) held that it is not unreasonable for an employee to complain of harassment to only his or her harasser if that person is designated in the employer's plan as one of the people with whom to lodge complaints. The court therefore held that an employer is not, as a matter of law, entitled to the Faragher/Ellerth defense simply because an employer's anti-harassment policy provides that the plaintiff could have complained to other people in addition to the supervisor/harasser.

The court made clear that the facts and circumstances of each case must be examined to determine whether, by not pursuing other avenues provided in the employer's anti-harassment policy, the employee unreasonably failed to take advantage of the employer's preventative measures. There is no requirement that an employee exhaust all possible avenues made available where circumstances warrant the belief that some or all of those avenues would be ineffective or antagonistic.

To limit potential liability, it is always important to consult with an employment attorney when drafting your company's anti-harassment and anti-discrimination policies.

July 14, 2010

New York Limits Ability of Plaintiffs Who Do Not Live or Work in New York to Assert Claims Under City and State Human Rights Laws

As a New York City employment attorney, this is one case that I feel is especially important. On July 1, 2010, the New York Court of Appeals, in Hoffman v. Parade Publications, held that nonresident plaintiffs who do not work in New York City or New York State and who cannot establish that the alleged discriminatory conduct had an "impact" within either location may not invoke the protections of those laws.

Plaintiff Howard Hoffman, a Georgia resident, worked in Parade Publications' Atlanta office. He did not service any accounts in New York. In October 2007, the president of Parade called Hoffman from Parade's New York City headquarters to inform Hoffman that his employment would be terminated. Thereafter, Hoffman filed age discrimination claims under the New York City and New York State Human Rights Laws.

Regarding the New York City Human Rights Law, the court found that requiring the discriminatory decision to have an "impact" within the City would ensure predictable results and limit the law's protections to those who were meant to be protected--people who live or work within New York City. As Hoffman did not fall under either category, the court dismissed his City Human Rights Law.

Using a similar rationale, the court also dismissed Hoffman's State Human Rights Law claim, holding that a "non-resident must plead and prove that the alleged discriminatory conduct had an impact in New York" state. According to the court, the State Human Rights Law was enacted to protect the "inhabitants" of New York, as well as those persons "within" the state.

Lastly, the court also noted that the State Human Rights Law not only protects those New York residents, domestic corporations, and corporations doing business in New York from discriminatory acts committed outside the state, but also prohibits New York residents and domestic corporations from discriminating against New York residents outside of New York. Therefore, "while New York residents may bring a claim against New York residents and corporations who commit 'unlawful discriminatory practices' outside the state," the court held that the Human Rights Law was not intended to protect an individual who neither resided nor worked in New York, and who could not demonstrate that the alleged discriminatory act had any impact within the state.

July 12, 2010

New York State Expands Domestic Workers' Rights

1287061_businessman_in_the_office_1.jpgNew York State recently passed the nation's first law protecting the rights of domestic workers, The Domestic Workers Bill of Rights, effectively amending New York State's current labor law.

The new law creates guidelines for employers of housekeepers, nannies and other workers in an industry that is unregulated and without clearly defined work benefits. Up until now, domestic workers had virtually no recourse when their employers exploited them, discriminated against them, or even sexually harassed them.

New York's new law entitles all domestic workers to the same rights and benefits as workers in other industries, like standardized work weeks, temporary disability benefits, unemployment insurance, overtime pay, protection from employment discrimination and paid days off after a set term of service.

If you feel that your employer is violating your rights, it's imperative to contact an employment attorney as soon as possible.

July 9, 2010

New York Federal Court Rules Pharmaceutical "Sales" Reps Are Entitled to Overtime Pay

On July 6, 2010, in In re Novartis Wage and Hour Litigation, the United States Court of Appeals for the Second Circuit ruled that pharmaceutical "sales" representatives whose primary job duty is to visit doctor's offices, drop off drug samples and announce pre-scripted messages describing their employer's pharmaceuticals, are entitled to overtime pay under federal and New York state law. The court held that the reps are not subject to either the federal and state "outside sales" or "administrative" exemptions to overtime pay. This decision is especially important because it is the first federal appellate decision finding that the outside sales and administrative exemptions don't cover pharmaceutical sales reps.

The Court concluded that when a pharmaceutical rep visits a doctor's office, drops off a sample and delivers a pre-scripted company message about his employer's drugs, the rep is not making a sale to the doctor within the meaning of federal and state overtime law and regulations. The Court held that the reps were promoting pharmaceuticals to the doctor and, as the decision stated, "a person who merely promotes a product that will be sold by another person does not, in any sense, intended by the [overtime] regulations make the sale."

The Second Circuit also found that that the reps were not exempt "administrative" employees, as they were unable to exercise the required discretion or independent judgment. The Court determined that although the reps were free to decide the sequence in which to visit doctor's offices, free to decide how best to gain access to those offices, free to decide how to allocate their budgets for promotional events, and free to determine how to allocate their samples, the reps played no role in: (1) planning the company's marketing strategy; (2) formulating the "pre-scripted core messages" they must deliver to physicians; and are required to: (a) visit a given physician a certain number of times per trimester; (b) promote a given drug a certain number of times per semester; and (c) hold a designated number of promotional events.

July 7, 2010

The U.S. Department of Labor Broadens Interpretation of the Family and Medical Leave Act

On June 22, 2010, the U.S. Department of Labor ("DOL") issued an Administrative Interpretation Letter clarifying who may take time off under the Family and Medical Leave Act ("FMLA") to care for a newly born, adopted, or sick child. While not law, DOL regulations and DOL's interpretation of those regulations are accorded certain deference by the court.

The FMLA generally allows employees to take up to 12 work weeks of unpaid leave during any 12-month period "[b]ecause of the birth of a son or daughter of the employee and in order to care for such son or daughter," "[b]ecause of the placement of a son or daughter with the employee for adoption or foster care," and to care for a son or daughter with a serious health condition.

According to the DOL, the terms "son or daughter" should be interpreted more broadly than the traditional biological or adoptive sense, concluding that employees who have no biological or legal relationship with a child may nonetheless stand "in loco parentis" to the child and be entitled to FMLA leave.

In order for an employee to establish an "in loco parentis" relationship with a child, the employee need only establish that he or she provides day-to-day care for the child or financial support. It is not necessary that the employee provide both day-to-day care and financial support. These employees can include companions of biological/adoptive parent, close neighbors, aunts, uncles, cousins and close friends. Virtually anyone who provides day-to-day care or financial support should be able to qualify.

It is important to always get the advice of an FMLA attorney when determining whether you are entitled to FMLA leave.

July 6, 2010

Affirmative Defense No Longer An Option for Employers Sued under the New York City Human Rights Law

As a New York employment attorney, I always make sure to follow all cases involving the legal rights of employees. In Zakrzewska v. The New School, the New York Court of Appeals (highest court in New York State) recently held that in cases brought under the New York City Human Rights Law (NYCHRL), employers sued for unlawful harassment couldn't invoke the Faragher-Ellerth affirmative defenses set out in previous United States Supreme Court decisions. Employers are thus strictly liable for any unlawful harassment committed by their managers and supervisors under the City's anti-discrimination law.

Since 1998, employers have been able to use the Faragher-Ellerth affirmative defense to avoid liability in unlawful harassment and retaliation cases brought under Federal, State, and City anti-discrimination laws. This defense states that an employer may avoid liability for harassment that does not involve an adverse employment action (e.g., termination or demotion) if the employer can demonstrate: (1) it took reasonable steps to prevent and promptly correct sexual harassment in the workplace, and (2) the aggrieved employee unreasonably failed to take advantage of the employer's preventive or corrective measures.

Although the New York Court of Appeals held that the Faragher-Ellerth defense isn't available under the NYCHRL, the Court noted that an employer may still mitigate its damages under the NYCHRL by demonstrating the existence of policies, programs, and procedures for the detection and prevention of unlawful discrimination.