Wyatt Employment Law Report


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U.S. Supreme Court Extends SOX Whistleblower Protection to Employees of Private Contractors Who do Business with Public Companies

By R. Joseph Stennis

In Lawson, et. al. v. FMR LLC, No. 12-3 (decided March 4, 2014), a divided U.S. Supreme Court confirmed that the whistleblower protections contained in the Sarbanes-Oxley Act of 2002 (“SOX”) extend to employees who work for private contractors that do business with public companies. At issue in the case was a bit of text in SOX which provides that, “[n]o public company. . . or any . . . contractor . . . of such company may [retaliate] against an employee . . . because of [SOX- protected activity].”

The U.S. Court of Appeals for the First Circuit had held this language applied exclusively  to employees of  public companies and not to employees of private contractors that do business with public companies. The First Circuit’s ruling was  in sharp contrast to  decisions issued by the Administrative Review Board of the U.S. Department of Labor (“ARB”).  For example, in Spinner v. David Landau & Assoc. LLC, Nos. 10-111 and 10-115 (decided May 31, 2012), the ARB held that a private contractor’s employee who was a whistleblower as to fraudulent activity by his company was covered by SOX and therefore protected by its anti-retaliation provisions.

In Lawson, the whistleblower plaintiffs were employed by private companies that performed as advisers to public mutual fund institutions.  Petitioners, Jackie Lawson and Jonathan Zang, urged the High Court to overrule the First Circuit and extend whistleblower protections to employees of private contractors of publicly held companies. The respondents argued that the petitioners’ interpretation would lead to an unlimited application of the statute.  Ultimately, the Supreme Court in a 6-3 ruling—penned by Justice Ginsburg—concluded that the plain meaning of SOX’s text, SOX’s legislative history, and its overall statutory purpose favored a wider interpretation and reading of the provisions than favored and advocated by the respondent companies.

Thus, Lawson establishes that an employee of a private contractor that does business for a public company and is retaliated against for engaging in SOX protected conduct would be entitled to pursue an anti-retaliation claim under SOX against that private employer.


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White House Seeking Expansion of Overtime Pay Under the FLSA

By Mitzi D. Wyrick

President Obama has directed the U.S. Department of Labor (“DOL”) to revise regulations under the Fair Labor Standards Act to make more workers eligible for overtime pay.  Specifically, the DOL will be reviewing the executive, professional, and administrative exemptions, sometimes referred to as the “white-collar” exemptions from the requirement to pay overtime for hours worked over 40 in a workweek.  The salary basis threshold, which is currently set at $455 per week, will be one area of focus.  In addition, the White House has directed the DOL to review other exemptions changes to which would result in more overtime pay based on the type of work performed.  For example, under the revised regulations thought to being considered, store managers who also perform non-management duties may be entitled to overtime pay unless they can demonstrate that the majority of their time is spent performing management work.  Read more about it at:  http://t.co/KgEmpdqfZT


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President to Announce Minimum Wage Hike for Certain Federal Contractor Employees

By Edwin S. Hopson

Several news outlets, including the New York Times, are reporting that President Obama plans to announce tonight
during his State of the Union address that he plans to sign an executive order requiring that certain workers, including janitors and construction workers, who are employed by federal contractors be paid at least $10.10 an hour as a minimum wage.  This effort, which avoids the need for Congressional approval, may be the only way the President can effect such a change.


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Labor Department Releases Data on Union Membership Rates in 2013

By Edwin S. Hopson

On January 24, 2014, the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) released 2013 data on union membership in both the private and public sectors.

The statistics are virtually unchanged from 2012.  In 2013, BLS reported that the union membership rate overall was 11.3%, just as it was in 2012.  The number of workers belonging to unions was 14.5 million.  BLS noted that in 1983, the first year that comparable data is available, there were 17.7 million workers belonging to unions and the membership rate was 20.1%. Continue reading


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Employers Beware: The Lateral Transfer Of An Employee Can Be An Adverse Employment Action

by Michael D. Hornback

On January 14, 2014, the U.S. Court of Appeals for the Sixth Circuit reversed a grant of summary judgment in favor of the employer, finding that a jury should determine whether the lateral transfer of an employee constituted an adverse employment action. Continue reading


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OSHA 300 Form Must be Posted by February 1, 2014 For Many Employers

By Edwin S. Hopson

It is that time of year again!

Most employers, with some exceptions (such as those with 10 or fewer employees during all of the previous year), must post their OSHA 300 log from February 1, 2014 to April 30, 2014 “in each establishment in a conspicuous place or places where notices to employees are customarily posted. You must ensure that the posted annual summary is not altered, defaced or covered by other material,” per OSHA regulations.

Injury and illness recordkeeping forms must be maintained on a calendar year basis.  In addition, they must be retained for 5 years at the establishment and must be available for inspection by representatives of OSHA, or appropriate state agency, which in Kentucky is the Kentucky OSH Program. To review the industries/establishments that are exempt from having to even fill out the form take a look at:

SIC Code

Industry

525

Hardware Stores

542

Meat and Fish Markets

544

Candy, Nut, and Confectionery Stores

545

Dairy Products Stores

546

Retail Bakeries

549

Miscellaneous Food Stores

551

New and Used Car Dealers

552

Used Car Dealers

554

Gasoline Service Stations

557

Motorcycle Dealers

56

Apparel and Accessory Stores

573

Radio, Television, & Computer Stores

58

Eating and Drinking Places

591

Drug Stores and Proprietary Stores

592

Liquor Stores

594

Miscellaneous Shopping Goods Stores

599

Retail Stores, Not Elsewhere Classified

60

Depository Institutions (banks & savings institutions)

61

Nondepository Institutions(credit institutions)

62

Security and Commodity Brokers

63

Insurance Carriers

64

Insurance Agents, Brokers, & Services

653

Real Estate Agents and Managers

654

Title Abstract Offices

67

Holding and Other Investment Offices

722

Photographic Studios, Portrait

723

Beauty Shops

724

Barber Shops

725

Shoe Repair and Shoeshine Parlors

726

Funeral Service and Crematories

729

Miscellaneous Personal Services

731

Advertising Services

732

Credit Reporting and Collection Services

733

Mailing, Reproduction, Stenographic Services

737

Computer and Data Processing Services

738

Miscellaneous Business Services

764

Reupholstery and Furniture Repair

78

Motion Picture

791

Dance Studios, Schools, and Halls

792

Producers, Orchestras, Entertainers

793

Bowling Centers

801

Offices & Clinics Of Medical Doctors

802

Offices and Clinics Of Dentists

803

Offices Of Osteopathic Physicians

804

Offices Of Other Health Practitioners

807

Medical and Dental Laboratories

809

Health and Allied Services,Not Elsewhere Classified

81

Legal Services

82

Educational Services (schools, colleges,universities and libraries)

832

Individual and Family Services

835

Child Day Care Services

839

Social Services, Not Elsewhere Classified

841

Museums and Art Galleries

86

Membership Organizations

87

899

Engineering, Accounting, Research,Management, and Related Services

Services, not elsewhere classified


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Supreme Court Approves of Contractual Limitation Period for Filing Suit Under ERISA

Supreme Court of the United States Seal

Supreme Court of the United States Seal (Photo credit: DonkeyHotey)

In a unanimous opinion issued December 16, 2013, and authored by Justice Thomas, the U.S. Supreme Court held in Heimeshoff v. Hartford Life & Accident Insurance Co.,  571 U.S. __ (2013), No. 12-729, that an appeal of a denial of disability benefits was untimely under the terms of the group long term disability plan.  The court noted that ERISA does not contain its own statute of limitations governing judicial review of plan determinations.  However, so long as the limitations provision in the plan is reasonable, and there is no controlling statute to the contrary, courts should enforce plan limitations periods. In this case, the limitations provision stated that any suit to recover benefits denied must be filed within three (3) years after the filing of the proof of loss. The plaintiff in this case filed suit well after the three (3) period.