Persuader Rule Update

By George J. Miller

By now, I assume most employers and others who keep up with developments in labor and employment law are familiar with the U.S. Department of Labor’s (DOL) controversial “persuader rule” that was set to take effect on July 1 of this year.  For those who are not familiar with it, here is a summary of what all the fuss is about, followed by some recent court developments.

In 1959, Congress amended the National Labor Relations Act (NLRA) by passing the Labor Management Reporting and Disclosure Act (LMRDA).  The main purpose of the LMRDA was to rid organized labor of corruption and also make it more democratic.  However, the LMRDA also requires labor consultants (including lawyers) to file reports with the DOL identifying their employer clients and the details of the terms of their engagement, including fees paid for their services, if an object of the engagement, either directly or indirectly, is to persuade employees whether or how to exercise or not to exercise their rights to organize or bargain collectively under the NLRA.  The law also requires employers who engage consultants for such purposes to file a similar report.  These filings are a public record.  Willful violations of the LMRDA’s reporting requirements are criminal and are punishable by a fine of up to $10,000 or a year in jail, or both.

However, the LMRDA contains an exception from the reporting requirement for consultants’ “advice” to employers in such matters.  Shortly after the LMRDA was enacted, the DOL issued guidance stating that if a labor consultant (including an attorney) did not communicate directly with employees regarding their

Lawsuit Filed to Enjoin U.S. Department of Labor’s New Persuader Activity Rule

By George J. Miller

On March 30^th, a group of plaintiffs consisting of several industry associations of employers and an Arkansas law firm filed an action in the U.S. District Court in Little Rock seeking an injunction to prevent the U.S. Department of Labor from implementing its new “persuader activity” rule.  This rule, which is set to take effect on April 26^th, would expand the types of activities which employers and labor relations consultants (including attorneys and industry groups) must report to the Department of Labor.  Under the new rule, if a labor relations consultant performs any work for an employer which is intended even “indirectly” to persuade employees in their choice of whether or not to be represented by a labor union (including such activity as supervisor training, seminars for employers, and preparation of employment policies), then all activity of the consultant for that employer in the engagement must be reported, including any advice to the employer which is not itself intended to persuade employees.  In addition, if the terms of the engagement are in writing, then that written document must be filed.  Also, the financial terms of the engagement must be reported. This information would be filed in a public record accessible by anyone.  Failure to comply with the rule is a criminal offense punishable by a fine of up to $10,000 and up to a year in jail.

The suit asks the court to declare the new rule unlawful on the basis that it violates the following: the First and Fifth Amendments to the U.S. Constitution, the federal Administrative Procedures Act and the National Labor Relations Act.  In addition, it unlawfully infringes on

Top Trending Employment Practices Liability (EPL) Claims and EEOC Charges

By Sharon L. Gold

Information gleaned from the EEOC, the DOL and the insurance industry can assist in analyzing what types of claims employers are likely to see in the coming years.

The most recent EEOC statistics reveal that in Kentucky, Indiana, Tennessee and Mississippi, the top filed charges with the EEOC were (in varying order depending on the state): race, retaliation, disability and sex discrimination [see here].  There is no doubt that the EEOC is aggressively pursuing lawsuits and charges against employers in these areas.  In addition,

DC Circuit Reinstates DOL Rule Applying FLSA’s Minimum Wage and Overtime Provisions to Home Care Workers

By Michelle D. Wyrick

On August 21, 2015, in Home Care Association of America v. Weil, the United States Court of Appeals for the District of Columbia Circuit cleared the way for the implementation of regulations extending the Fair Labor Standards Act’s (“FLSA’s”) minimum wage and overtime provisions to many home care workers. The court rejected a challenge to the United States Department of Labor’s (“DOL’s”) authority to change its interpretation of the scope of the FLSA provisions exempting from minimum wage and overtime guarantees domestic-service workers who provide either companionship services or live-in care for the elderly, ill, or disabled. The court’s ruling directly affects home care workers who are employed by third-party providers, like home health care agencies.

For four decades, the DOL interpreted the FLSA’s exemptions for companionship services and live-in workers to apply to employees of third-party providers. The old regulations specifically stated that domestic workers, who were employed “by an employer other than the family or household using their services,” were not included in the FLSA’s protections. Thus, traditionally, those workers have not been eligible for

Sixty-Day Comment Period Open Regarding the DOL’s Proposed Rule Increasing Salary Requirement for Exempt Employees

By Sharon L. Gold

Today begins the sixty-day period when employers can submit comments about the DOL’s proposed rule increasing the salary requirements for exempt employees. The DOL proposes that the minimum salary requirements be raised from $455 per week or $23,660 a year to $970 a week or $50,440 a year. In order to qualify for the highly compensated exemption, an employee would have to make $122,148 annually, which is up from $100,000. In addition to comments on the salary increase, the DOL asks for comments on whether nondiscretionary bonuses and incentive pay should be included in the calculation of the minimum increased salary.

The proposed rule did not make any changes to the duties test that is utilized to determine if an employee is exempt (for instance, some thought the proposed rule would require that a certain amount of time be spent in management). However, the DOL did ask for

Texas Federal Court Stays Enforcement of DOL’s New Definition of Spouse in Texas, Arkansas, Louisiana and Nebraska

The U.S. Department of Labor (DOL) issued a final rule, effective March 27, 2015, changing the definition of spouse for purposes of same-sex spousal leave under the FMLA. The former rule, a “place of residence” rule, stated that an employer was required to provide same-sex spousal leave to qualified employees under the FMLA only if the marriage was enforceable in the employee’s state of residence. The new “place of celebration” rule states that same-sex spousal leave must be provided to qualified employees if the marriage is valid in the place where the marriage is performed. Therefore, under the new rule, if an employee is married in California (where same sex marriage is valid), but resides in Kentucky (where same sex marriage is not valid), the Kentucky employer must provide spousal leave to qualified employees.

Texas, joined by several other states, sued the DOL over the new rule and sought a preliminary injunction in federal court enjoining its enforcement. Texas argued that

Wage and Hour Division Releases Enforcement Statistics

By Michelle D. Wyrick

The U.S. Department of Labor’s Wage and Hour Division recently released enforcement statistics for fiscal years 2009 through 2013. Of particular note to employers, the Wage and Hour Division continues to process a high number of wage and hour complaints, with a particular focus on workers in low-wage industries. Conversely, the number of Family and Medical Leave Act cases has decreased over the last two fiscal years.

According to the enforcement statistics, in fiscal year 2013, the Wage and Hour Division collected approximately $250,000,000 in back wages in wage and hour cases. That number represents a small decrease from the back wages collected in fiscal year 2012 but is still the second highest amount collected since fiscal year 2004. In addition, the number of enforcement hours spent on wage and hour complaints has risen substantially over the last four fiscal years.

The statistics also highlight back wages recovered for workers in low-wage industries. These industries include agriculture, day care, restaurants, garment manufacturing, guard services, health care, hotels and motels, janitorial services, and temporary help. The number of cases filed against employers in low-wage industries continues to increase. Likewise, the amount of back wages recovered for workers in low-wage industries rose significantly during the last two fiscal years ($83,051,160 and $97,912,954, respectively).

Until there is a change in the administration, employers should expect the Wage and Hour Division to continue to emphasize enforcement of the Fair Labor Standards Act, with a priority on workers in low-wage industries.