Category: Uncategorized

NEW YORK COURT UPHOLDS FAST-FOOD WORKER MINIMUM WAGE INCREASE TO $15

Last year, New York Governor Andrew Cuomo announced that a new minimum wage would gradually be phased in for fast-food workers who work at establishments that are part of a chain of 30 or more locations, including those operating under a franchise agreement where the franchisor owns or operates at least 30 such establishments nationally.    Effective December 31, 2015, the new minimum wage increased to $10.50 for New York City fast-food workers and is on track to increase to $15.00 by 2018.  The minimum wage order was issued by the Commissioner of Labor on May 7, 201.   The National Restaurant Association, a trade group, appealed to the Industrial Board of Appeals (IBA) asserting that the wage order was contrary to law.  The IBA confirmed the wage order, and Petitioner appealed the decision in New York state court.

Last month, the Supreme Court of New York, Appellate Division upheld the decision to increase the minimum wage for fast food workers to $15.00 per hour.  The Court rejected Petitioner’s arguments that it violated the U.S. Constitution’s Commerce Clause, that it was wrongfully delegated to a state agency and that the wage board members appointed by the Commissioner were not true representatives of employers and employees.

 

The Court noted the difficult nature of the work in the fast food industry and that workers often work irregular hours, engage in a variety of complex tasks often under extreme pressure and poor working conditions. The Appellate Division upheld the wage order and agreed with the wage board that “fast food chains have recently experienced significant increases in profits without an accompanying rise in wages for their work, implying that those profits were wrung from the necessities of their employees.”

NEW JERSEY SUPREME COURT RULES EMPLOYERS CANNOT CONTRACTUALLY SHORTEN TIME LIMITS ON WORKER EMPLOYMENT DISCRIMINATION SUITS

On June 15, 2016, the New Jersey Supreme Court, the highest court in this state, issued its decision in Rodriguez v. Raymours Furniture Company, Inc. in which it addressed whether the two-year statute of limitations under the New Jersey Law Against Discrimination (“LAD”) could be shortened by a private agreement.

In that case, Plaintiff Sergio Rodriguez applied for a job at the furniture store.  The last page of the employment application, which he signed and submitted, contained a section that read, in bold capital letters, “I agree that that any claim or lawsuit relating to my service with Raymour & Flanigan must be filed no more than six months after the date of the employment action that is the subject of the claim or lawsuit.  I waive any statute of limitations to the contrary.”   A few years later, Rodriguez suffered a work-place injury, and two days after he returned to full-duty work, he was fired.  He filed a lawsuit seven months after he was terminated alleging employment discrimination based on actual or perceived disability in violation of the LAD.

Defendant argued that because Rodriguez filed the lawsuit after the six-month statute of limitations period, his lawsuit should be dismissed.  The trial court ruled in favor of Defendant, holding that the waiver provision was clear and unambiguous and that the shortening of the statute of limitations period was not unreasonable or against public policy, as Rodriguez contended.  Rodriguez appealed, and the Appellate Division affirmed the trial court’s decision.  Although the court found that the employment application was a contract of adhesion, Plaintiff had ample time to review it.   Rodriguez appealed to the New Jersey Supreme Court.

On appeal, Plaintiff argued, in part, that contractual shortening of the statute of limitations would frustrate the remedial purpose of the LAD.  The court reversed the lower court’s decision and decided in favor of Plaintiff.  The court recognized that although parties have the freedom to contract, there is strong public interest that the LAD serves to protect in trying to elimination discrimination.  The court further stated that the contractual shortening of a limitations period effectively eliminates claims because it would not allow enough time for an aggrieved person to bring forth their claims and the two-year statute of limitations was purposefully designed to create uniformity and certainty.   As such, the court ruled that the two-year time frame to bring a claim under the LAD cannot be altered through a private agreement.

The full decision can be found here.

7-ELEVEN HIT WITH OVERTIME AND RETALIATION SUIT IN NEW JERSEY

 

Three former employees of a 7-Eleven convenience store located in Princeton, New Jersey filed a proposed class action alleging that the franchise failed to pay them minimum wage and overtime pay when they worked beyond 40 hours per week and also fired them when they complained to management.  The plaintiffs seek to represent 90 potential class members of 7-11 stores, either independently owned and operated, or directly owned and controlled by the Texas-based corporation, within the same market.

Plaintiffs contend that they performed tasks such as stocking shelves, cleaning the bathroom and parking lot, serving customers and operating food preparation machines and were paid $6.00-$6.50 per hour in cash, with no overtime pay.  Two workers claim that they were retaliated against for complaining to management about their compensation and the third worker was fired after an attorney representing the two other plaintiffs notified the store of the workers’ claims.    Plaintiffs also claim that defendants failed to provide them with statements regarding their gross and net wages and an itemization of the deductions made from gross wages.

The case is Lopez et al. v. 7-Eleven Inc. et al., case number MER-L-418-16, and was filed in New Jersey state court, County of Mercer.

NEW YORK ATTORNEY GENERAL SUES DOMINO’S PIZZA FOR WAGE THEFT

Last week, New York Attorney General Eric Schneiderman sued Domino’s Pizza Inc. and three New York franchisees for wage and hour violations.  The lawsuit alleges that that from July 2008 to the present, Domino’s franchisees did not pay its delivery drivers minimum wage and failed to adequately pay overtime, due to an in-house payroll software system that undercounted hours worked by employees.  Unlike many other lawsuits, this lawsuit is the first one filed by the Attorney General’s office to claim that the corporate franchisor is liable for the violations of its franchisees under a joint employer theory.

It accuses the company, Domino’s Pizza LLC, of requiring its franchisees to use a computer software system that it knew was flawed and claims that it was heavily involved in individual store operations.  If the state wins, it will make it harder for corporations that run franchises to avoid responsibility for the unlawful actions taken by its franchisees.

Since 2014, the New York Attorney General’s office has settled cases with many other Domino’s franchisees for wage and hour violations, including securing a $446,000 settlement for delivery workers for unpaid minimum wage and overtime, as we previously reported.  And since 2011, Schneiderman has obtained more than $26 million for nearly 20,000 workers who were shorted wages.

DEPARTMENT OF LABOR EXPANDS WHITE COLLAR OVERTIME PROTECTIONS

On May 18, 2016, President Obama announced that the U.S. Department of Labor published its final rule updating overtime regulations affecting white collar, salaried workers.  The new rule focuses on increasing the salary and compensation levels triggering the executive, administrative and professional workers exemption.

Under the Fair Labor Standards Act, employees are required to be paid minimum wage and overtime at the rate of one-and-one-half times their regular rate of pay for every hour worked in excess of 40 hours per workweek.  However, employees employed as bona fide executive, administrative and professional employees are exempt from both minimum wage and overtime pay.  In order to qualify for the exemption, employees must meet certain tests regarding their job duties, and prior to this new rule, also be paid a salary of not less than $455.00 per week ($23,660 per year).  For example, if an employee met the “duties” requirement to qualify for the exemption, but made more than $455.00 per week, they would not be entitled to overtime pay.  This new rule, however, increases the salary threshold to $913.00 per week ($47,476 annually).

This update extends overtime protection to over 4 million workers.  This means that workers will either gain new overtime protections or an employer may raise their salary to the new salary threshold in order to maintain their exempt status.  The effective date of the final rule is December 1, 2016.

WORKPLACE RIGHTS SEMINAR

Most employees are unaware of the many recently added job protections available under New Jersey and federal law.  Mitchell Schley has recently held seminars at various public libraries throughout the state regarding many employment and labor law topics such as: (a) unfair treatment on the job, (b) wrongful discharge, discrimination and harassment, (c) employment contracts and performance reviews, (d) wages, salary, hours, overtime and compensation, (e) disability leave, pregnancy leave and health insurance, (f) severance pay and unemployment benefits, and (g) non-competition agreements.

If you would like to learn about your rights in the workplace and have the opportunity to ask questions relating to your employment, please feel free to attend one of the following speaking engagements:

Sayreville Public Library – May 25, 2016 at 6:30 p.m.

South Plainfield Public Library – June 2, 2016 at 7:00 p.m.

North Edison Public Library – June 6, 2016 at 7:00 p.m.

Edison Public Library (Main Branch) – June 14, 2016 at 7:00 p.m.

BLOOMBERG L.P. TO PAY $3.2 MILLION TO CUSTOMER SERVICE REPRESENTATIVES TO SETTLE OVERTIME SUIT

In 2013, former-Bloomberg L.P. employee, Shavez Jackson, commenced a class action suit against the Company for unpaid overtime pursuant to state and federal laws.  Jackson worked as Global Customer Service Support Representative at a call center located in New York City.  Her primary responsibilities were to answer phone calls and determine where to route the calls within the Company.  In her Complaint, she alleged that her and other call center customer service employees worked before and after their scheduled eight-hour shifts and also worked from home or through their lunch period, without being paid overtime compensation for hours worked in excess of 40 in each workweek.   Bloomberg originally classified these employees as exempt; however, on April 28, 2013, the Company reclassified them as non-exempt pursuant to an agreement entered into by the Company and the United States Department of Labor.

One month ago, Plaintiffs sought preliminary approval of a class settlement in which Bloomberg agreed to settle the case for $3.2 million for 519 plaintiffs.  On April 5, 2016, the Court granted Plaintiffs’ motion.  A final fairness hearing is scheduled for July 13, 2016.

NEW YORK PASSES NATION’S STRONGEST PAID FAMILY LEAVE LAW

On April 1, the New York State Legislature signed into law the strongest and most comprehensive paid family leave policy.  When fully phased in, employees will be eligible for 12 weeks of paid leave to bond with newborns, care for a family member with a serious medical condition or handle responsibilities if someone is called to active military service.  The new policy will be phased in gradually.  Beginning January 1, 2018, workers can get 8 weeks of leave at fifty percent of their weekly pay (capped at $630) followed by up to 10 weeks in 2019 and 2010, and 12 weeks by 2021 with two-third pay.

Currently, the federal Family Leave and Medical Act (FMLA) allows for 12 weeks of leave with no pay.  Unlike the FMLA, New York’s paid leave law will cover full-time and part-time employees and there will be no exemptions for small businesses.  Furthermore, an employee only has to be employed by the company for 6 months, compared to twelve months required by the FMLA.

New York is now the fifth state, after California, New Jersey, Rhode Island and Washington to mandate paid leave.  New York’s bill is the strongest, however.   California and New Jersey offer 6 weeks off, Rhode Island offers 4 weeks, and Washington passed a paid leave law in 2007 but it has not yet been implemented.

SECOND CIRCUIT HOLDS THAT HR DIRECTOR MAY BE PERSONALLY LIABLE UNDER FMLA

Cathleen Graziadio worked a Payroll Administrator for the Culinary Institute of America.  Due to medical issues concerning two of her sons, Graziadio requested a ten day leave under the Family and Medical Leave Act (“FMLA”) and a temporary reduced work schedule for a short period of time.  She submitted paperwork, and asked her supervisor if there was any further medical documentation needed.  Her supervisor then contacted Human Resources Director, Shaynan Garrioch, regarding how she should respond.  Garrioch sent a letter to Graziadio stating that her FMLA paperwork did not justify her absences and that additional updated paperwork was required.  However, despite Graziadio’s request for clarification about what medical documentation was needed to classify her leave as FMLA leave and repeated requests to return to work, Garrioch did not explain how her paperwork was deficient and refused to let Graziadio return to work until a face-to-face meeting occurred.  This meeting never happened, and she was ultimately fired.

Thereafter, Graziadio filed suit against the Company alleging retaliation and interference with her FMLA rights and discrimination under the Americans with Disabilities Act (“ADA”).  She sought to hold the Company liable as well as her supervisor and Garrioch personally liable.  The lower court dismissed the FMLA claim against Garrioch because it did not find Garrioch to be an “employer” within the meaning of the statute since she did not have ultimate authority to terminate employees.  Graziadio appealed to the Court of Appeals for the Second Circuit.

Yesterday, the Second Circuit ruled that a reasonable jury could, in fact, find that Garrioch was an “employer” who exercised sufficient control to be held personally liable under the FMLA.  In reaching this conclusion, the Second Circuit applied the economic-realities test, as used in other statutes such as the Fair Labor Standards Act, to evaluate who constitutes an “employer” under the FMLA.  As such, the Court used several factors under this test to determine Garrioch’s liability, including whether she had the power to hire and fire employees, supervise and control employee work schedules or conditions of employment, determine rate and method of payment and maintain employment records.  The Court held that the evidence presented showed that Garrioch “played an important role in the decision to fire Graziadio” and she also controlled her schedule and conditions of employment with respect to her return from FMLA leave.  Thus, the Court vacated the lower court’s dismissal of her FMLA claims against Garrioch, but sustained the dismissal of her ADA claim.  Graziadio’s claim against her supervisor was not challenged in the appeal.

Nathaniel Charney, Graziadio’s attorney, stated the Second Circuit’s adoption of this individual employer standard was a very good precedent that should benefit employees.

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

EEOC FILES FIRST SUITS ALLEGING SEXUAL ORIENTATION DISCRIMINATION

The EEOC announced Monday that it has filed its first two sex discrimination lawsuits based on sexual orientation.  The EEOC has sued Scott Medical Health Care Center, a pain-control and weight-loss clinic in Pennsylvania and a Maryland branch of IFCO Systems, a global pallet company.

In the case against Scott Medical, the EEOC alleges that a gay male telemarketer, Dale Baxley, was subjected to harassment because of his sexual orientation.  According to its press release, the EEOC stated that the employee’s manager frequently used anti-gay slurs and “other highly offensive comments about his sexuality and sex life.”  When Baxley complained to the clinical director, no action was taken to stop the harassment, and instead, the director reasoned that Baxley’s manager was “just doing his job.”

Similarly, in the EEOC’s claim against IFCO, the EEOC charged that a lesbian employee, Yolanda Boone, was harassed due to her sexual orientation and appearance.  The EEOC alleges that her manager made comments such as, “I want to turn you back into a woman” and asked if Boone was male or female. The manager is also alleged to have made inappropriate and suggestive remarks.  Boone registered her complaints to management and also called an employee hotline about the harassment.  She was asked to resign a few days later, but when she refused, she was fired.

These cases are significant since this is the first time the EEOC has filed suits alleging sex discrimination based on sexual orientation.  Last year, the EEOC issued a landmark ruling that discrimination against gay, lesbian and bisexual employees is against federal law, namely, Title VII of the Civil Rights Act of 1964, and sexual orientation discrimination, by its nature, is considered discrimination because of sex.