Tag Archives: McGrath North Attorney Ruth Horvatich

Does A Degree Make An Employee Exempt Under Wage And Hour Law?

wage-and-hour timesheetA recent federal court decision examined the potential exempt status of entry-level audit associates working for KPMG. In that case, the U.S. Court of Appeals for the Second Circuit found that those employees were exempt under the “professional exemption” even though they performed many routine tasks. Would that decision be the same for all professionals with certain degrees? The answer to that question will depend upon the particular facts of the case.

The Fair Labor Standards Act (FLSA) requires that most employees be paid overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. However, the FLSA does recognize certain exemptions from this requirement, including the “professional exemption.” To qualify for that exemption, the employee must (1) be compensated on a salary or fee basis at a rate of at least $455 per week; (2) have the primary duty where the performance of work requires advanced knowledge, which includes work requiring the consistent exercise of discretion and judgment; (3) the advanced knowledge must be in a field of science or learning; and (4) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction. This exemption is not restricted to the traditional professions of law, medicine, and teaching, but includes professions that have a recognized status and are based on the acquirement of professional knowledge through prolonged study. Generally speaking, these include professions such as nursing, accountancy, engineering, architecture, etc.

In the KPMG case mentioned above, the court relied heavily on the degrees required for the position and found that an entry-level member of a profession is still a professional and may fall under the exemption. The Court found it “hardly surprising” that the audit associates did not make high-level decisions for KPMG’s business, but noted that the professional exemption does not require that the professional reach conclusions that guide or alter the course of business. The critical question, according to the Court, was whether the workers act in a manner that reflects knowledge and requires judgments characteristic of a worker practicing that particular profession.

A reading of this case indicates that the answer to the question asked in the title of this article is “no.” A degree alone will not make an employee exempt under the professional exemption under wage and hour law. As acknowledged in the KPMG case, the critical question for the professional exemption is whether the employee’s particular position requires duties that are appropriately considered professional for that particular profession, entry-level or otherwise.

If you have a question regarding whether an employee falls into an exemption, it is important to look at the facts of your particular situation and get legal counsel involved if necessary. Remember that even though an employee may not fall under the professional exemption, they may fall under another exemption, such as the executive, administrative, or computer employee exemption.

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Employees Can Use Company Email for What?!

On December 11, 2014, the National Labor Relations Board (the “NLRB”) issued the long-awaited decision regarding employee use of company email in Purple Communications, Inc. The NLRB held that employee use of email for protected communications during non-working time is presumptively an employee right for any employee provided access to a company’s email systems.

The NLRB’s 3-2 decision overruled the NLRB’s previous 2007 decision in Register Guard. In the Register Guard decision, the NLRB held that an employer may completely prohibit employees from using the employer’s email system for communications related to union activity or protected concerted activity (Section 7 rights) so long as the employer’s ban is not applied discriminatorily. The National Labor Relations Act grants employees the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, such as communicating with other employees about union organizing.

Now, the NLRB has decided that it is presumed that employees who have access to their employer’s email system have a right to use the email system to engage in Section 7-protected communications on non-working time. The Board did not completely shut the door for employers to regulate email. However, an employer may rebut the presumption by demonstrating that “special circumstances necessary to maintain production or discipline justify restricting its employees’ rights.” That appears to be something of an illusion, though, since the Board stated that it anticipated that it would be the “rare case” where special circumstances justify a total ban on non-work email use by employees. The Board also emphasized that the “mere assertion of an interest that could theoretically support a restriction will not suffice” and that employers must demonstrate a connection between the interest it asserts and the restriction.

Other than recognizing in a footnote that an employer’s interests in protecting its email system “from damage or from overloads due to excessive use, would of course be relevant”, the Board did not elaborate on what the “special circumstances” may be that would justify restrictions on email. This will undoubtedly cause a headache for employers when looking to adopt restrictive email policies. While it is uncertain as to what these “special circumstances”, if there ever could be any, are that would allow an employer to restrict its employees’ email use, the limitations of this decision are certain:

  1. This decision is limited to only email systems and does not apply to any other electronic communications systems.
  2. The decision is limited to email use by employees only. The Board did not find that nonemployees have rights to access an employer’s email system.
  3. The decision does not require an employer to grant employees access to its email system where it has not chosen to do so.
  4. The presumption that employees with access to email have a right to use that email for Section 7-protected communications is limited to nonworking time.
  5. Employers are not prohibited from restricting employee use of email if the employer can show that special circumstances make the presumption described above inappropriate in its workplace.
  6. Employers are not prohibited from establishing uniform and consistently enforced restrictions, such as prohibiting large attachments or audio/video segments, if the employer can demonstrate that they would interfere with the email system’s efficient functioning.
  7. Employers are not prohibited from monitoring their computers and email systems for legitimate management reasons, such as ensuring productivity and preventing email use for purposes of harassment or other activities that could give rise to employer liability.

The decision equally leaves open many uncertainties, with more expected as the cases develop in this area. For instance, the decision fails to answer the following questions:

  1. How is the line drawn between working and non-working time?
  2. Which employee’s “time” is it? Is it the sender’s time or the receiver’s time? What happens when an employee on a break emails another employee who is not on a break?
  3. How are emails from a private source to a company email to be treated?
  4. May employees forward emails to coworkers from third parties?
  5. How are emails with attachments to be treated (e.g. attached union cards)?
  6. Are employers allowed to implement restrictions based on the quantity of emails? Are employers required to allow 100 emails in a day?
  7. May employers still limit employees’ personal use of email systems?

This decision illustrates the Board’s current agenda, which is to expand employee rights. Employers should review their employee handbooks and communication policies to determine whether their current policies restrict employee use of email systems. Employers should be cautious in adopting any ban on nonbusiness-related emails. We will continue to monitor these cases and provide updates as cases interpreting this decision develop.

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Supreme Court Narrows Categories Of Work Covered By The FLSA

Are all activities required by employers compensable under the Fair Labor Standards Act? How about activities that are for the primary benefit of the employer? Not necessarily, according to the United States Supreme Court.

On December 9, the Supreme Court unanimously ruled that a staffing agency was not required to pay workers at Amazon warehouses for the time they spent waiting to go through a required security screening at the end of the day. In that case, Integrity Staffing Solutions, Inc. provided warehouse staffing to Amazon.com throughout the United States. The warehouse employees were employed to retrieve products from the shelves and package those products for delivery to Amazon customers. Integrity Staffing required the warehouse employees to undergo a security screening before leaving the warehouse at the end of each day. During the screening, employees were required to remove items such as wallets, keys, and belts and pass through metal detectors.

Two employees filed a putative class action against Integrity Staffing on behalf of similarly situated employees and alleged that they were entitled to compensation under the Fair Labor Standards Act (FLSA) for the time spent waiting to undergo and actually undergoing the security screenings, which the employees claimed amounted to 25 minutes. The employees also alleged that the screenings were solely for the benefit of the employers and their customers because they were conducted to prevent employee theft. The United States Court of Appeals for the Ninth Circuit found that these activities were compensable because Integrity Staffing required the security screenings to prevent employee theft and that the screenings were necessary to the employees’ primary work as warehouse employees and done for Integrity Staffing’s benefit.

The Supreme Court disagreed. The Portal-to-Portal Act (the Act), which amended the FLSA, provides that companies need not pay for “preliminary” or “postliminary” activities. The Supreme Court previously interpreted the Act to require pay only for tasks that are an “integral and indispensable part of the principal activities for which covered workmen are employed.” The Court determined that the security screenings were not the principal activity or activities which the employee is employed to perform. The employees were not employed to undergo security screenings but rather to retrieve products from warehouse shelves and package those products for shipment to Amazon customers. As a result, the Court found that the activity, even though required by the employer, was not compensable under the FLSA.

This decision is a win for employers because it further narrows the categories of work that are covered under the FLSA. Additionally, the Court made clear that the integral and indispensable test is “tied to the productive work that the employee is employed to perform” and explicitly rejected tests that focused on whether an employer requires a particular activity or whether the activity is for the benefit of the employer as overbroad.

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Five Practical Tips For Providing Reasonable Accommodations in 2014

ADA requestIn recent years, the EEOC has put an emphasis on reasonable accommodations under the Americans with Disabilities Act (“ADA”) and its amendments, which has led to increase in failure to accommodate claims under the ADA. Set forth below are five practical tips to remember when a disabled employee is entitled to a reasonable accommodation.

1. Recognize a Request and Immediately Engage in the Interactive Process. Under the ADA, employers are required to engage in the interactive process when an employee requests a reasonable accommodation. In fact, part of an employee’s claim that an employer failed to accommodate the employee is a claim that the employer failed to engage in the interactive process. The first step of the interactive process is recognizing that a request has been made. Generally, it is the employee’s duty to make a reasonable accommodation request. The employee is not required to use any magic buzzwords. It is important for employers to recognize when an employee has made such a request and important to train supervisors and managers in recognizing such a request. The employee only needs to ask for some change or adjustment in the workplace and link that request to his or her disability. The employer’s response to the request must be “expeditious”, and a delay in responding may be a cause of action for the employee. After a request has been made, the employer has an obligation to engage in the interactive process, which requires the following steps: (i) recognize an accommodation request; (ii) gather information; (iii) explore accommodation options; (iv) choose a reasonable accommodation; (v) implement the reasonable accommodation; and (vi) monitor the reasonable accommodation.

2. Let the Employee Do the Talking. The best source of information about a reasonable accommodation request will likely come from the employee since he/she is the one requiring the accommodation. A good tool to use during the interactive process is a questionnaire for the employee to fill out. The employee should be asked to describe his or her impairment, identify his or her limitations, and provide suggestions for accommodations. Additionally, seriously considering the employee’s preference may be the best choice in maintaining a happy workforce and preventing a later claim, as long as such a request is reasonable. For example, a federal appeals court recently found that an employee was denied a reasonable accommodation where the employer rejected the employee’s choice of telecommuting to work, despite the fact that the employer offered other options to accommodate the employee. For more information on this case, see “Do I Really Need To Come To Work? New Frontiers In ADA Accommodation”. As an update on that case, on August 29, 2014, the United States Court of Appeals for the Sixth Circuit voted to rehear the case en banc. This means that the previous ruling by the court has been vacated and the case will be heard again by the full court. Stay tuned for an update when the Sixth Circuit issues its new decision.

3. Don’t Forget About Reassignment. If an employee has permanent restrictions and can no longer perform the essential functions of his or her job, an employer is still required to engage in the interactive process and consider job reassignment. If there is no vacant equivalent position for which the employee is qualified, the employee may be reassigned to another job with less pay and benefits as an accommodation. Don’t forget about the FMLA, however, which requires that an employee be restored to his or her original job or to an equivalent job with equivalent pay, benefits, and other terms and conditions of employment upon return from FMLA leave. Remember, employers are not required to create a new job, move another employee, promote the employee or violate other employees’ rights under a collective bargaining agreement or other employment agreement when considering reassignment as an accommodation. Additionally, in the Eighth Circuit, which includes Nebraska, Minnesota, Iowa, Missouri and North and South Dakota, if there is a vacant position, the employer may follow company policy by choosing the most qualified candidate for that position.

4. Don’t Get Caught in the Indefinite Leave Trap. In the Eighth Circuit, an employer may deny a request for leave if the leave is indefinite and the employee cannot provide a return date or a timeframe for when they will return. The EEOC, on the other hand, requires that an employer prove an undue hardship before denying an indefinite leave accommodation request. These types of situations should always be evaluated closely by both the employer and counsel prior to terminating the employee.

5. Tread Lightly if using a Maximum Leave Policy. Many employers have a maximum leave policy and terminate employees for exceeding the maximum amount of leave available under the policy (for instance if an employee takes a medical leave of absence and cannot return to work after six months they are automatically terminated). The EEOC has taken the position that these policies are a per se violation of the ADA. For more information on the EEOC’s position, see “EEOC And Inflexible Leave Of Absence Policies: A Hot Button Issue For 2013”. However, a federal appeals court recently rejected the EEOC’s position and concluded that these types of policies are not inherently discriminatory, but rather protect the rights of disabled employees. For more information on that decision, see “Maximum Leave Policy Found To Be Fair And Lawful” . Because of the EEOC’s position and the unknown position of other courts, employers should still be wary about such policies. Employers should still engage in the interactive process and discuss the possibility of additional leave with a disabled employee in the event the employee reaches the maximum leave under such a policy rather than enforcing automatic termination under such a policy.

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A Temporary Impairment May Be a Disability Under The ADAAA

When does an impairment become a covered disability under the Americans with Disabilities Act? In the first published federal appellate court decision to apply the expanded definition of “disability” contained in the Americans with Disabilities Act Amendments Act of 2008 (“ADAAA”), the Fourth Circuit held that a temporary impairment caused by an injury may be a disability if it’s sufficiently severe to substantially limit a major life activity.

In Summers v. Altarum Institute Corp., an employee who worked as a senior analyst for a government contractor fell and injured himself while exiting a commuter train on his way to a work assignment. Because of the employee’s severe injuries, his ability to walk was impaired, and doctors projected that he would need at least 7 to 8 months of recuperation before being able to return to his normal duties. Despite minimal discussions relating to working from home, the employer terminated the employee less than two months after his injuries because he could not perform his duties on site.

The employee brought an action under the ADAAA alleging that he was terminated as a result of a disability. The district court below dismissed the employee’s claim reasoning that a temporary condition lasting one year or less does not qualify as a disability. The Fourth Circuit disagreed. In reaching its decision, the Court observed that Congress enacted the ADAAA to abrogate a series of U.S. Supreme Court decisions, which included a decision that suggested a temporary impairment could not qualify as a disability. The Court also looked at the ADAAA regulations, which, although not specifically applicable to this case, provide that in relation to a “regarded as” disability claim, a plaintiff will not be disabled if the impairment is of an actual or expected duration of six months or less. There is no similar durational requirement for the “actual-disability” prong, but the regulations expressly provide that “effects of an impairment lasting or expected to last fewer than six months can be substantially limiting” for purposes of proving an actual disability. Additionally, the Court noted that the EEOC regulations include a significant lifting restriction lasting several months as an example of a covered disability. The Court also rejected the employer’s argument that deference should not being given to the EEOC regulations, which defined disability to include short-term impairments.

Ultimately, the Fourth Circuit ruled that “[u]nder the ADAAA and its implementing regulations, an impairment is not categorically excluded from being a disability simply because it is temporary.” This decision reinforces the expansive reach of the ADAAA and serves as a reminder that the determination of whether an employee has a disability requires an individualized assessment that should always be done on a case-by-case basis.

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