Tag Archives: FLSA

Favorite Firing: Termination for Admitting Violation of Employer Policy Is Retaliation Under FLSA


policeman-146561_640I’ve mentioned before that retaliatory discharge claims under Title VII are hard to defend, but retaliation claims are equally problematic under other employment statutes. In Avila v. Los Angeles Police Dep’t, (9th Cir. 2014), a police officer alleged he was fired for testifying in a co-worker’s lawsuit claiming non-payment of overtime wages in violation of the Fair Labor Standards Act.

The Facts: Leonard Avila was a police officer for the Los Angeles Police Department. He testified in another officer’s lawsuit alleging unpaid overtime wages and admitted he had frequently worked through his lunch break without reporting the extra hours, in violation of the LAPD’s policy.

Shortly thereafter, Officer Avila was discharged for insubordination. The insubordination? His failure to claim overtime wages in violation of department policy.

The LAPD Board of Rights that recommended Officer Avila’s termination found:

“Prior to 2008, you [Officer Avila], while on duty, were insubordinate to the department when you failed to submit requests for compensation for overtime that you had worked, as directed through department publications.”

The Ninth Circuit opinion states the facts as follows:

“Leonard Avila, a police officer, periodically worked through his lunch break but did not claim overtime. According to his commanding officer, Avila was a model officer. The Los Angeles Police Department (LAPD), however, deemed Avila insubordinate for not claiming overtime and fired him.

“Not coincidentally, that termination occurred only after Avila had testified in a Fair Labor Standards Act (FLSA) lawsuit brought by fellow officer, Edward Maciel, who sought overtime pay for working through his lunch hours. Avila then brought this action, claiming that he was fired in retaliation for testifying, in violation of the FLSA antiretaliation provision, 29 U.S.C. § 215(a)(3). The evidence at trial was that the only officers disciplined for not claiming overtime were those who testified against the LAPD in the Maciel suit, notwithstanding uncontested evidence that the practice was widespread in the LAPD.”

The Moral: As the dissenting opinion in Avila stated, “retaliation claims based on federal statutes are increasingly a major part of employment litigation in federal courts.” That is probably the single biggest moral to be taken from this case.

The dissent focused on the fact that Officer Avila and the other officers discharged after their testimony admitted violating department policy in that testimony:

“the only officers singled out for discipline were those who testified at the Maciel action and who admitted under oath that for years they knowingly and repeatedly violated policies that they were specifically told would subject them to termination.” [emphasis in original]

The dissent argued that employees should not be immunized from the consequences of their admissions, but the majority upheld the jury verdict in favor of Officer Avila. The case focused primarily on jury instructions, and, finding no error in the instructions, the majority affirmed.

So another moral from this case is that employers cannot necessarily rely on admissions of wrongdoing by employees, if those admissions are made during lawsuits against their employer. Employers must be careful when seeking to discharge any employee who has raised any type of employment claim or participated in any way in another employee’s claim. As I’ve said before, the retaliation claims are often more difficult to defend than the underlying complaint, whether it be for illegal employment discrimination, unpaid wages, worker’s compensation, or any other employment action.

The Atkinson, Andelson, Loya, Ruud & Romo law firm, which represents employers, wrote on its blog:

“This decision is important as the Court of Appeals’ analysis suggests that an employer is restricted from exclusively using information obtained from an employee’s protected activity for purposes of initiating an adverse action.  Instead, the Court of Appeals focused on the fact that the City did not have other independent evidence of alleged wrongdoing beyond Avila’s protected activity when terminating his employment to avoid liability under the FLSA’s anti-retaliation provision. Ultimately, the Court of Appeals left open the question as to whether an employer is strictly forbidden from using any information of employee wrongdoing that is obtained during testimony in another lawsuit.”

And as Branigan Robertson, a plaintiff’s attorney, said on his blog:

“Avila v. Los Angeles Police Department is a win for employees as it shows employers that they need to be extremely careful when firing someone for complaining or being part of a legal proceeding against them.”

In my opinion, the LAPD would have been wiser to have documented a warning to Officer Avila and the others who admitted violating department policy and told them that any future violations would be grounds for termination.

Perhaps that shouldn’t be the case, but this was an expensive lesson for the department. Officer Avila received $50,000 in liquidated damages, and his attorneys were awarded $579,400 in attorney’s fees.

What do you think—should LAPD have lost this case?

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Fair Labor Standards Act and the Expanding (or Contracting) Work Week


laptop-260x173I’ve written before about the need to update the Fair Labor Standards Act. A recent article on the Knowledge@Wharton website reminded me of this need again. See Management, If Not 40 Hours, Then What? Defining the Modern Work Week, Jan. 28, 2015.  As the article states, “With the advent of telecommuting, flexible hours, globalization and answering emails after hours and on vacation, the American worker has entered the era of the fuzzy work-home divide.”

The blurring of work and home lives began decades ago for many professionals. As an attorney in the early 1980s I could bill hours from home or on the road, though face time at the office was definitely important. But today, with smartphones in the hands of every worker, even many traditionally hourly occupations can be performed anywhere and anytime. Whether this is a positive or detrimental development depends on how it is managed—both by management and by employees themselves.

There are also differences in what workers want. Some want longer work weeks for more pay. Others want shorter work weeks for more time for other activities. Similarly, managers want more work for the same pay, but they also want productive workers who are engaged in their roles (which requires that the rest of their lives also be running smoothly).

1. Which Direction Are We Headed?

The eight-hour day was one accomplishment of the early 20th century labor movement, protecting workers from terribly long hours in dismal factory conditions. It was also intended to spread work out across more laborers during the Great Depression. The eight-hour day and forty-hour week were certainly not traditional in the agrarian society that predated the Industrial Revolution. There is nothing set in stone about the eight-hour day or forty-hour week, other than that it is mandated for non-exempt employees under the FLSA and similar laws in other nations.

The Wharton article focuses on a number of possible developments in defining the work week of the future, mostly focused on requiring fewer hours in the week. And yet, U.S. workers currently work an average of 46.7 hours per week, and 18% work more than 60 hours.

Will workers continue to increase their time spent working? Will managers permit more flexibility?

With today’s more flexible work and more flexible technology, the fixed eight-hour day may have outlived its usefulness. Yet in which direction will the work week of the future move—toward more hours or fewer? There are strong arguments for both. Whichever direction we take, managers will be challenged to comply with regulations that change much more slowly than the workplace does.

2. How Do We Manage?

imagesTraditional management: One option in managing work time is for companies to forbid any work by hourly employees except during certain hours. This makes compliance with the FLSA easier, but the trade-off is that company policies typically then do not permit employees to perform personal assignments during working hours. Otherwise, productivity suffers.

This option also penalizes employees who want to put in extra time or have flexibility in when and where they do their work. Unfortunately (or fortunately, perhaps, depending on your perspective), the FLSA is set up to regulate defined work times and to require payment for all time spent working.

Tracking Time: Another option for managing time is to require hourly employees to keep time sheets, where they log on and off the clock to handle personal matters. This is a difficult policy to enforce, and also runs the risk of violating the FLSA’s requirements that non-exempt employees must be paid for all breaks unless the break is long enough for them to leave the premises. So, employees could be permitted a half-hour of personal time in the middle of the day, but not a series of five-minute breaks to handle personal phone calls.

I predict that companies will develop diverging policies on this issue. Some will become more flexible, despite the management challenges. Others will hold to traditional schedules, at least until the FLSA changes significantly.

Congress should debate this issue and develop 21st Century laws for 21st Century workplaces.

What do you think? Should the FLSA permit more flexibility?

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Proposed Changes to Overtime Regulations Don’t Update Wage Laws Sufficiently


Obama SOTUIn his State of the Union speech on January 28, 2014, President Obama promised to use his regulatory authority and executive orders to bypass Congress when they could not reach a deal. He has begun to follow through aggressively on this promise in the labor arena.

This call for new regulations to cut back on the FLSA exemptions from overtime is the subject of this post.

imagesIn general, the FLSA requires overtime pay for workers who work more than 40 hours/week, unless they fit into one of several categories of employees who are “exempt” from FLSA requirements. The largest exempt categories are for executive, administrative, and professional employees.

In his March 13 memorandum, President Obama stated:

. . . regulations regarding exemptions from the Act’s overtime requirement, particularly for executive, administrative, and professional employees (often referred to as “white collar” exemptions) have not kept up with our modern economy. Because these regulations are outdated, millions of Americans lack the protections of overtime and even the right to the minimum wage.

Therefore, I hereby direct you [DOL] to propose revisions to modernize and streamline the existing overtime regulations. In doing so, you shall consider how the regulations could be revised to update existing protections consistent with the intent of the Act; address the changing nature of the workplace; and simplify the regulations to make them easier for both workers and businesses to understand and apply.

Labor experts expect that the Department of Labor will increase the salary threshold for these exempt workers from $455/week to somewhere in the neighborhood of $970/week.

I’m not adverse to an increase in the salary threshold. The current threshold of $455/week has been quite low, equating to $24,000/year, and was last increased ten years ago.

However, I have two concerns about changing the FLSA regulations—the first that it won’t improve workers’ wages as the President said, and the second that it doesn’t get at the heart of the problems with the FLSA.

1.  Businesses will change their hiring practices in response

An increase in the salary threshold of the anticipated magnitude will greatly expand the number of workers eligible to receive overtime pay. But businesses will not stand still in response.

Rather than increase the overtime wages they have to pay, many businesses are likely to change the way they structure jobs. They may pay their supervisory workers overtime and hire fewer non-supervisory workers to offset the overtime paid to the supervisors. They may hire more workers, but work them fewer hours to avoid the extra cost of overtime. They may cut back everyone’s hours to keep labor costs the same. Businesses are not likely to let an increase in overtime pay increase their cost structures increase without any response.

As one commentator stated,

“Employers should begin to consider, however, how increases to the required salary level and revisions to the duties tests under the “white collar” exemptions may impact long-standing staffing and compensation models for a wide range of employees.”

These changes may or may not be good for the economy. But if President Obama thinks more workers will automatically get “the protections of overtime” with an increase in the salary threshold, he is wrong. Some workers may find their pay cut when their hours are reduced.

2.      FLSA is out of date in many respects

My second concern is that we are missing a big opportunity to improve our wage laws overall. The FLSA was adopted in 1938 in response to the Great Depression. The labor market has changed substantially in the last 76 years, and many aspects of the FLSA regulations do not fit today’s labor market.

One issue that many employers and employees alike have requested is additional flexibility on the definition of “work week” and the ability to offer “compensatory time off” in lieu of overtime wages. For example, defining a two week period of 80 hours, rather than a single week of 40 hours, and permitting employees and employers to agree to flexible schedules, or occasional fluctuations, across that longer period of time before overtime is payable.

Moreover, we no longer live in a world where most employers do all their work at the employer’s place of business. Many workers do some work from home, or at least answer work-related calls and emails. Policing overtime work is increasingly difficult, and if the new regulations do not address the problems of monitoring employees’ working hours will set employers up to pay for time they never intended employees to work.

Any regulatory change that only addresses the narrow issue of the salary threshold for white collar exemptions is missing a huge opportunity to update one of our nation’s core labor laws.

Many of the broader changes in the FLSA would require statutory change, and the President cannot address these problems unilaterally. But it would be a big step forward if President Obama worked with Congress to bring the FLSA into the 21st century, offering changes that employers want in addition to increasing overtime and minimum wage levels as Democrats want. Rather than unilateral executive actions, we need a bipartisan approach to updating work rules across the board.

What aspects of the FLSA do you think are out of date?

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Fair Labor Standards Act Bites Employers of Unpaid Interns


imagesThe Fair Labor Standards Act (FLSA) is an archaic statute that still packs a punch. Passed in 1938, when the nation was in the throes of the Depression, the law was designed to maximize the number of jobs created by limiting the number of hours that employees could work.

In essence, the FLSA requires employers (a) to pay at least a minimum wage, and (b) to pay overtime wages (at 1.5 times the base wage rate) to employees who work more than 40 hours/week. Employees are covered by this law, unless they fit into an exemption. There are four primary categories of “exempt” employees: managerial/executive employees, administrative employees, professional employees, and outside sales employees.

FLSA litigation has expanded in the last ten to fifteen years. Many lawsuits arise out of disputes over whether an employee is exempt or non-exempt. Other cases deal with what time is compensable (time spent donning and doffing uniforms, clocking in, commuting time, breaks, etc.)

These cases are increasingly brought as class actions – with plaintiffs’ attorneys seeking huge damage awards across the class. If a thousand employees making even just $10/hour are underpaid for fifteen minutes/day for 250 working days in a year for a two year limitations period, the damage award – at straight time! – is a total of $1,250,000. And in many cases, the damages are at higher wages rates, or for overtime, or for a three year limitations period, or for more employees. Plus, damages can be doubled in a case of intentional wrongdoing.

And the attorneys always get their fees on top of the wage awards. These can be time-consuming cases, and are therefore lucrative for lawyers.

Office Clocks Showing Different TimesThe FLSA requirements and the recent recession have given rise to an increase in cases involving unpaid interns. In today’s job environment, recent college graduates and others seeking employment are often willing to work for nothing to get a foot in the door. Many employers want to reduce their costs, and will use unpaid interns for free labor. This practice has been particularly prevalent in the media industry – both old and new media.

For more on the prevalence of unpaid interns, see the Wall Street Journal article, Interns Are Increasingly the Route to Winning a Job, by Melissa Korn, published on June 6, 2013, and the MSNBC story The unpaid internship racket, by Timothy Noah, June 20, 2013.

Under a Department of Labor interpretation (Fact Sheet #71, issued in April 2010), the criteria for using unpaid interns are:

  1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
  2. The internship experience is for the benefit of the intern;
  3. The intern does not displace regular employees, but works under close supervision of existing staff;
  4. The employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
  5. The intern is not necessarily entitled to a job at the conclusion of the internship; and
  6. The employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Now, why would an employer use an unpaid intern if the employer provides no immediate advantage from the intern’s activities, and, in fact, the employer’s business might even be impeded by the intern? Obviously, DOL does not like unpaid interns.

Even when the interns are still students, the practice of using them as unpaid workers is problematic. It is easier in student situations to show the intern is receiving training and that the experience is for the benefit of the student. But still, their presence probably provides some advantage to the employer, or they wouldn’t be there.

??????????????????In Glatt v. Fox Searchlight Pictures, a recent federal case in New York, two interns who worked on Fox movie productions sued for wages after their unpaid internships ended. The district court judge found that these interns were employees, and permitted them to pursue a class action against Fox. The judge ruled that, even though the interns’ work was menial (filing, etc.), it was essential to the business and would have required paid employees if the interns had not been there.

I don’t have much sympathy for for-profit companies seeking to use unpaid labor. While I believe that the FLSA needs substantial updating to be relevant to today’s workforce, employers should design their organizations to pay for the work they need done.

When I was practicing employment law, I advised my clients, even those in the media business, that they faced a substantial uphill battle to justify using unpaid interns. I didn’t like the practice then, and it is even riskier now.

As one commentator has opined,

Employers that use unpaid interns should pay careful attention to this issue. It is far better to scrutinize interns under the DOL’s six factors before the agency, or a group of plaintiffs, swoop in and do it for you. It is even better to formalize the relationship in a written internship agreement that formally spells out how each of these six questions is answered in your favor. Or maybe it is best simply to assume that except in rare cases, there is no such animal as an “unpaid intern,” and you should simply accept the fact that if you are going to label entry-level employees as interns, you need to pay them for their services.

I think using unpaid interns in a non-profit employer is a closer question. In the non-profit context, when are people employees and when are they volunteers? For example, a non-profit social service agency may pay a receptionist, but may have a volunteer fill in when the employee is on vacation. Or a church may hire a groundskeeper, but rely on parishioners to perform much of the grounds-keeping labor.  Shouldn’t these practices be acceptable?

When do you think unpaid interns should be permitted?

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