Welcome to Legal Briefs for HR, an update on employment issues sent to over 5000 HR professionals, in-house counsel and business owners all over the U.S. to help them stay in the know about employment issues. Anyone is welcome to join the email group . . . just let me know you’d like to be added to the list and you’re in! Back issues are posted at www.munckcarter.com under Media Center/Legal Briefs.
Here’s news that’s naughty and nice:
1. Yes, Virginia, There is a Clause – The Virginia Court of Appeals refused to enforce a noncompete clause that was too broad in limiting the type of work that can be done, even though the same language had been upheld 22 years ago. The court took no issue with the temporal/time or geographic scope but nixed the prohibition from “engag[ing] indirectly or concern[ing] himself . . . in any manner whatsoever” in pest control “as an owner, agent, servant, representative or employee, and/or as a member of a partnership and/or as an officer, director or stockholder or any corporation, or in any manner whatsoever.” The court could not “blue line” or modify the scope of the limitation and declared it overbroad, while acknowledging that it had upheld identical language in an agreement involving the same company in 1989. Why? The court’s position has been “incrementally clarified” by subsequent decisions. Home Paramount Pest Control Companies v. Justin Shaffer (Va. Ct. App. 11-11). Times change, and perhaps so should your noncompete.
2. No Overtime for Computer Elves –The Computer Professionals Update Act (S. 1747), filed on Oct. 11, 2011, proposes to amend the FLSA and expand the scope of the exemption for computer professionals, to include those who perform certain duties that do not currently fall within the exemption. The part which mandates being paid on a salary basis or at an hourly rate of at least $27.63 remains the same. For info and full text of the proposed changes to the duties test, go to www.govtrack.us/congress/bill.xpd?bill=s112-1747.
3. The Spirit of Sharing– EEOC and OFCCP have updated their Memorandum of Understanding (MOU) for the first time in 12 years, and it promises to continue the spirit of giving. The agencies will share “any information relating to the employment policies and/or practices of employers holding government contracts or subcontracts that supports the enforcement mandates of each agency as well as their joint enforcement efforts.” This means YOUR affirmative action plans, reports, records, complaints/charges and investigation files can be accessed by one agency and shared with another.
4. Holiday Gift for Employers and Veterans– Starting on Dec. 22, 2011 through the end of 2012, employers who hire certain veterans will pocket some hefty tax credits. The amounts available are:
1. Up to $5,600 (40% of first $14,000 in wages) per employee for hiring a veteran who’s been looking for work for more than six months (the Returning Heroes Tax Credit);
2. Up to $9,600 (40% of first $24,000 in wages) per employee for hiring a veteran with a service-connected disability who’s been looking for work for more than six months (the Wounded Warriors Tax Credit); and
3. Up to $2,400 (40% of first $6,000 in wages) per employee for hiring a veteran who’s been looking for work for less than six months, plus the existing WOTC credit of up to $4,800 per employee. The rule was published on Nov. 22, 2011 and takes effect 30 days later.
5. Ring In the New Year (But Not While Driving!)– U.S Department of Transportation issued a final rule prohibiting the use of hand-held cellphones by interstate bus and truck drivers while the vehicle is in operation, including while idling at traffic lights. Penalties for violations can be imposed on both the offending driver ($2750 per violation) and the employer of the driver ($11,000). The rule takes effect 1-3-12 and you find full text on the PHMSA page at www.phmsa.dot.gov/hazmat/regs/rulemaking/final. Click on 76 FR 75470 – Final Rule.
6. The Bum Rap App– U.S. Dep’t of Labor asked smartphone developers to come up with an app that would broadcast investigation and compliance data on hotels, restaurant and retail stores. The idea is that a prospective customer or employee could pull up area establishments and see which ones, if any, were “flagged” by the DOL’s Wage and Hour Division and/or OSHA. The winner was an app called “Eat Shop Sleep” and it shows past violations, back wages paid, penalties but also when an establishment is merely being investigated. Ever heard of bogus claims being filed and “innocent until proven guilty?” Scarlet letters went out of fashion for a reason.
7. Cat in a Hat – Once again, firing an employee over an inconsistently enforced rule came back to bite an employer. The sad tale starts with a supply clerk who wore a hat to work to cover a bad haircut. We’ll call her HatGirl. There was a dress code prohibiting hats, but no supervisor said a word for a week (and others wore hats on occasion). When belatedly confronted with the “no hats” rule, HatGirl opted to go home vs. remove the hat. (I’m thinkin’ that’s a really bad ‘do.) The next day was dress-up for Halloween, so HatGirl came to work in costume with, you guessed it, a hat. HatGirl complained of uneven enforcement when told to remove the hat & was written up for insubordination. In the ensuing weeks, HatGirl noticed and took photos of co-workers with hats and tattoos that were in violation of the dress code & found comfort in discussions with others who agreed that there was unequal enforcement of workplace rules. Two of the four photo subjects agreed to be photographed & posed, but one did not agree and complained. The complaint resulted in HatGirl being fired. But HatGirl filed a complaint with the NLRB who held that her Section 8 rights were violated because she engaged in concerted activity with co-workers by discussing uneven enforcement of the dress code. And the Fourth Circuit agreed with the NLRB. NLRB v. White Oak Manor (4th Cir. 10-11). Lessons? Pick your battles. Before you create a rule ask yourself “Am I really going to enforce this, all the time and every time?” If the answer is no, either don’t create the rule OR do not plan on firing someone for not following it.
8. Stocking Stuffers– A few gentle reminders for this time of year:
1. Holiday Parties– Make it known in advance, by policy and by example, that harassment and substance abuse are not OK at work or work-related events, such as the holiday party. Limit the amount of alcohol served and/or the timeframe for serving. Stop serving well before the party ends. Have nonalcoholic drinks available, as well as food. Plan ahead for alternative transportation (e.g., taxi, designated driver), if needed by someone who’s had too much. If you’ve had trouble in the past, plan a different type of event that does not revolve around an open bar. Skip the mistletoe. And the drinking games.
2. For a Good Cause– The season brings out a desire to help others, via volunteer activities for various nonprofit groups. “Voluntary” is the key word here, since mandating employee involvement, even in a good cause, may make the activity compensable under the FLSA. And employers generally are not allowed to volunteer their employees for unpaid services which are the same or similar to their normal duties.
3. Travel, Near and Far– Encourage safe driving habits to avoid problems with drunk drivers, wintry weather and those who are distracted behind the wheel. Employees who are traveling outside of the U.S. might want to be reminded of changed rules relating to visas needed to re-enter the U.S.
4. Don’t Drive if You’re Tipsy, Buzzed or Blitzen – The Texas Dep’t of Transportation has rolled out its annual cheeky campaign with a serious message, at www.txdot.gov/safety/holiday.htm. Check out the new “31 Days of Cheer” interactive calendar on Facebook.
5. Capped – The statutory cap for H-1B visas for fiscal 2012 was reached on 11-20-11. Filing will open up for fiscal 2012 on 4-1-12.
6. Based - The wage base for computing Social Security tax (OASDI) will increase from $106,800 to $110,000 in 2012.
7. EOY Bonuses – Check out Revenue Ruling 2011-29 (www.irs.gov/pub/irs-drop/rr-11-29.pdf) for the IRS’ latest take on deductibility of bonus payments, where the pool is set in one year but the individual payments are not determined or disbursed until the ensuing calendar year.
9. Stated Differently– Here are some hot topics for you multi-state employers:
1. California – Effective 1-1-13 (not a typo . . . you have a year to get ready for this), any employer who pays an employee in CA on a commission basis must put the agreement in writing, including the method by which commissions are calculated and paid. The subject employee must receive a signed copy and if the agreement expires, the terms remain in full force and effect until a new agreement is executed or the relationship ends. A similar CA law used to apply only to employers who had no fixed place of business in CA, but after that law was invalidated the CA legislature responded with this new version which “fixes” the cause for invalidation. For full text, see AB 1396, which amends CAL LABOR CODE sec. 2751. The new law has no express penalties, but employers can be sued for violations of any part of the CA Labor Code under the Private Attorneys General Act (PAGA)(aka the “Sue Your Boss” Act) which does provide for penalties.
2. Colorado –On 12-5-11, CO became the 11th state to sign a MOU with the U.S. Dep’t of Labor to combat employer misclassification of employees as independent contractors. State penalties for misclassification will increase in January and both entities will share data in an effort to increase investigations and resolutions. U.S. DOL collected $4 million in FY2010 in back pay for unpaid minimum wage and/or overtime due to misclassification. If you want more info and to see the chart of other U.S. states who have signed MOUs, go to www.dol.gov/whd/workers/misclassification/.
3. Connecticut –For guidance on the mandatory sick leave law which takes effect 1-1-12, check out guidance issued by CT DOL on Nov. 18 at www.ctdol.state.ct.us/wgwkstnd/SickLeaveGuidance.pdf
4. Massachusetts– Effective 7-1-12, employment discrimination on the basis of “gender identity” is prohibited. H. 3810 was signed by Gov. Patrick on 11-23-11.
10. For the Birds – If you like being tweeted and want breaking news on employment law changes (and the occasional random cheer for K-State since it’s football season . . . welcome to the Big 12, TCU and West Virginia! Follow me on Twitter. I’m at @amross.
Happy Holidays, y’all!
Audrey E. Mross
Labor & Employment Attorney
Munck Carter LLP
600 Banner Place
12770 Coit Road
Dallas, TX 75251
972.628.3661 (direct)
972.628.3616 (fax)
214.868.3033 (iPhone)
amross@munckcarter.com
www.munckcarter.com
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