Author: lawofficesofmitchellschleyllc

STARWOOD SETTLES WAGE AND HOUR LAWSUIT FOR NEARLY $1M

Starwood Hotels & Resorts Worldwide, Inc., one of the largest hotel operators in the world, agreed to settle a class action suit brought by waiters working in one of its Westin resorts. 

The complaint alleged that a 20% service charge that was added to customers’ bills at the hotel was not given to food and beverage workers.  Instead, the Westin would either keep a portion of the service charge for itself or use it to pay managers and other non-tipped workers. 

The Westin did not inform customers that the service charge did not completely go to servers and this affected the tips the servers received.  Starwood agreed to pay $940,000 as a settlement and $25,000 to each class representative as incentive payments.

NLRB RULES THAT MCDONALDS IS JOINTLY LIABLE FOR UNFAIR LABOR PRACTICES OF ITS FRANCHISEE OPERATORS

This week, the general counsel of the National Labor Relations Board, Richard R. Griffin Jr., determined that McDonald’s is jointly liable for the employment actions of its franchisee operators.  This ruling comes after various complaints that McDonald’s and its franchisees committed unfair labor practices, including illegal firing, threatening or penalizing workers for pro-labor activities.   If McDonald’s is considered to be a joint employer, it can be held liable if one of its franchisees violates labor laws and even wage and hour laws by not paying minimum wage or overtime.

McDonald’s has approximately 13,000 franchised restaurants in the United States.  Legal experts have predicted that classifying McDonald’s as a joint employer with its franchisee operators will open the door to similar classifications in other industries and companies besides McDonald’s and fast-food chains.  This determination will likely be reviewed by an Administrative Law Judge and the full five-member Board in Washington.

This firm will continue to monitor the developments regarding this decision.

NLRB RULES THAT MERCEDES BENZ PLANT VIOLATED LABOR LAWS REGARDING WORKERS’ RIGHT TO DISTRIBUTE UNION LITERATURE

Last week, Judge Keltner Locke, an administrative law judge for the National Labor Relations Board, ruled that Mercedes Benz U.S. International violated the rights of workers in its plant by not permitting the distribution of union literature in certain areas of the plant.

  Mercedes Benz stated that these restrictions were designed to protect worker safety and production. Judge Locke ruled that employees who are on non-working time can solicit pro-union support from other employees in areas including work areas.

Mercedes Benz ordered the automaker to amend its rules regarding the solicitation and distribution of materials at the plant when employees are considering unionization.  The National Labor Relations Act guarantees the right of workers to distribute union literature and communicate with each other at the workplace during non-work time, e.g., breaks or lunchtime.

  Companies who wish to block a union organizing campaign often have rules to prevent this and discipline employees for violating the rules.  Here, the NLRB ruled that Mercedes Benz’s rules violated the law and ordered them to revoke these unlawful rules.

NEW YORK APPELLLATE DIVISION FINDS THAT IVY LEAGUE CONNECTION TUTORS ARE EMPLOYEES

Ivy League Connection, Inc. provides in-home tutoring services to clients seeking help with schoolwork and test preparation.  In 2012, Ivy League was assessed for unspecified unemployment insurance contributions for its tutors who worked for Ivy League beginning from early 2009. 

In an effort to limit its unemployment insurance costs, Ivy League objected to this assessment and argued that its tutors were independent contractors, not employees.  The assessment was upheld, and the Unemployment Insurance Appeal Board affirmed the decision.  Ivy League then appealed.

On July 24, 2014, the Appellate Division, Third Department, affirmed the Board’s decision.  The court found that Ivy League tutors were in fact employees.  The court applied a test that establishes an employer-employee relationship when an organization screens the services of professionals, pays them a set rate and then offers their services to clients.

  The Court held that because Ivy League screened, interviewed and conducted a criminal background check on tutors, paid tutors an hourly rate based on submitted documentation and matched clients with a tutor that it deemed best suited for the client’s needs, the tutors are considered to be employees.

 

Moreover, the court stated that Ivy League’s non-solicitation agreement with the tutors was further indicative of an employer-employee relationship.

The full decision can be viewed here.

NEW YORK GOVERNOR ANDREW CUOMO SIGNS BILL TO PROTECT UNPAID INTERNS

On July 22, 2014, Governor Cuomo signed into law a new bill that would afford anti-discrimination protection to unpaid interns with respect to hiring, discharge and other terms and conditions of employment.

  This law further protects unpaid interns from sexual harassment by their employers and unlawful retaliation for opposing practices forbidden under the New York Human Rights Law (“NYHRL”) or filing a complaint, testifying or assisting in a proceeding brought under the NYHRL.

 The new law also makes it unlawful to compel an intern who is pregnant to take a leave of absence.  This bill amends the NYHRL by adding a new section, 296-c, entitled, “Unlawful discriminatory practices relating to interns” and is effectively immediately.

U.S. SUPREME COURT RULES THAT WHISTLEBLOWERS IN THE PUBLIC SECTOR ARE PROTECTED FROM RETALIATION FOR COURT TESTIMONY

The U.S. Supreme Court ruled last week that public employees are protected from retaliation when they testify in court against their superiors regarding misconduct at the workplace.  The court unanimously decided that that the First Amendment protects those who tell the truth and reveal corruption.  Justice Sonya Sotomayor wrote that public employees should not have to choose between “the obligation to testify truthfully and the desire to avoid retaliation and keep their jobs.”

This decision clarified a previous ruling in Lane v. Franks, in which Lane, an Alabama community college official, testified against a state legislator for collecting money from the college but performing no work.  After he gave his testimony, he was fired.  He sued several college officials claiming that he was terminated for telling the truth, thereby violating the First Amendment.  The lower court dismissed his claims on grounds that the First Amendment does not protect public employees for exposing internal wrongdoing.  Similarly, in a 2006 case, Garcetti v. Ceballos, the court held that the First Amendment does not protect internal whistleblowers who speak about matters involving their official duties. 

In last week’s decision, however, the court held that testifying in court is protected as it is not part of an employee’s ordinary job duties, and public employees who testify in a corruption probe have an “independent obligation” to tell the truth, which is different then speaking about a workplace dispute.

UNPAID INTERNS IN NEW YORK CITY NOW PROTECTED AGAINST SEXUAL HARASSMENT AND DISCRIMINATION IN THE WORKPLACE

Recently, the New York City Council unanimously voted to pass an amendment to the New York City Human Rights Law, which will protect unpaid interns from sexual harassment and discrimination.

  This amendment was prompted by a 2013 decision, which held that an unpaid intern at Phoenix Satellite Television, could not bring a sexual harassment suit because she was not a paid employee.   This bill is expected to be signed by New York City Mayor Bill de Blasio.
 

Upon signing, New York City will become one of the only cities in the country, along with Washington D.C., to have explicit provisions protecting unpaid workers.

FAMOUS MIDTOWN DELI SET TO PAY $2.65 MILLION TO SETTLE FLSA LAWSUIT BROUGHT BY STAFF

Carnegie Deli has made an agreement in principle to pay approximately 25 current and former waiters, waitresses, bus boys and cooks a total sum of $2.65 million, with an average pay-out of $106,000 per employee.  The workers claim that their hourly pay was between $2.50 and $3.00, and thus below minimum wage and that they also did not receive overtime pay.

  The workers further allege that the owners also subtracted pay for hour-long lunch breaks that were never taken and paid back-of-the-house workers off the books in violation of federal laws.

Both sides had previously agreed that half of the settlement would be paid upfront and the other half a year later.  However, lawyers have informed the judge in the case that one of the owners wished to alter the arrangement by paying out the settlement over the course of four years.

NAIL SALON WORKERS FILED A CLASS ACTION LAWSUIT AGAINST ENVY NAILS FOR FAILURE TO PAY MINIMUM WAGE AND SPYING

Manicurists have filed a class action complaint again Anna Do, owner of Envy Salon, in a Manhattan Federal Court.  Do is the owner of more than 50 nail salons in Manhattan, Queens, Brooklyn and the Bronx.

Plaintiffs allege that Do fails to pay her employees less than minimum wage and sometimes as little as $5.00 per day.  They are paid off the books, and even with tips, Plaintiffs claim that they are paid less than what is required under the law.  Plaintiffs state that most of the workers at Envy Salon have recently arrived from Mexico and Ecuador and are taken advantage of by Do.  When visited by government inspectors, Do also instructs the workers to falsely identify themselves as independent contractors, as opposed to employees.  These practices are common in the manicure and salon industry because the owners can take advantage of recent immigrants and non-English speaking employees.

This firm will continue to monitor further developments in this case.

DOMINO’S PIZZA FINED BY ATTORNEY GENERAL FOR IMPROPER PAY PRACTICES

New York Attorney General Eric Schneiderman recently announced a $448,000 settlement with six Domino’s pizza franchisees operating in New York.  The business owners paid workers less than the $5.65 per hour tipped minimum wage and failed to pay adequate overtime, thereby violating wage and hour laws.  Specifically, delivery drivers were inadequately paid for their work, some receiving only $5.00 per hour, and workers who used their cars to deliver pizza were not reimbursed for their expenses.

  Moreover, employees were shifted from one store to another just before they were to reach 40 hours worked, and a manual override or a system flaw in the timekeeping system prevented an accurate calculation of the overtime worked. The settlement money will be dispersed among approximately 750 employees.

The Attorney General is also investigating Papa John’s franchisees.