Happy Holidays from all of us at Hanft Fride
December 2017 – Vol. 19, No.12
The Employer E-Letter: Labor and Employment Law News
from the Duluth, Minnesota law firm of
Hanft Fride, A Professional Association.
Co-Editors, Scott A. Witty, firstname.lastname@example.org and Richard R. Burns, email@example.com, or 218-722-4766. Please feel free to forward this e-mail or share it with others. If there are other topics of interest to you or any other suggestions concerning this newsletter, please let us know.
This Month’s Topics:
- Browning-Ferris Joint Employer Standard Overruled by NLRB
- Third Circuit Rules Short Rest Breaks are Compensable Time
- Employer’s alleged Failure to Follow Policy is Not Pre-text
- Employee’s Complaint to HR May Suspend MHRA Statute of Limitations
- Tip Of The Month
Browning-Ferris Joint Employer Standard Overruled by NLRB
In a split decision issued on December 14, 2017, the National Labor Relations Board again changed the standard for determining joint-employer liability under the National Labor Relations Act. The decision overruled the Board’s 2015 decision in Browning-Ferris Industries, which held that a company could be liable for labor law violations committed by another entity for which it had “indirect control” over the terms and conditions of employment, or where it had “reserved the authority” to control the terms and conditions of another company’s employees. Under its decision in Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (Dec. 14, 20147), the pre-Browning-Ferris Industries standard for joint liability will again apply. Thus, in all pending and future cases, two or more entities will be deemed joint employers under the NLRA if, and only if, the evidence shows that one company has actually exercised control over the essential terms and conditions of employment with respect to another company’s employees, and has done so “directly and immediately.” The Board further noted that “joint employer status will not result from control [by one entity over another entity’s employees] that is limited and routine.” Board members recently appointed by President Trump, who now give the Board a Republican majority, voted in favor of overturning the Obama-era Browning-Ferris decision. The change in the joint employer liability standard is welcome news for franchisors and companies that frequently retain subcontractors in the construction industry.
Third Circuit Rules Short Rest Breaks are Compensable Time
The Third Circuit Court of Appeals, which covers Pennsylvania, Delaware and New Jersey, recently held that employers are required under the Fair Labor Standards Act to pay workers for breaks of up to 20 minutes, ruling against a publishing company whose policy was to not pay sales workers who were logged off their computers for more than a minute and a half. The Circuit Court held that Section 785.18 of the FLSA’s regulations, which states, “Rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry. They promote the efficiency of the employee and are customarily paid for as working time. They must be counted as hours worked” is a “bright-line rule.” While the Eighth Circuit has yet to rule on this issue, federal district courts in New York, Nebraska, Ohio, Arkansas, Wisconsin, and Indiana have followed this approach. This decision serves as an important reminder for employers to compensate employees for short rest breaks as hours worked, even if their state law does not require paid rest breaks.
Employer’s alleged Failure to Follow Policy is Not Pre-text
An employee claimed that her employer discriminated and retaliated against her for taking FMLA leave. The United States District Court in Minnesota determined that sufficient evidence existed to establish a prima facie claim of discrimination due to the temporal proximity between adverse employment action (termination) and the protected activity (FMLA leave). However, the Court also concluded there was a non-pretextual reason for the adverse employment action. The employee argued the employer’s failure to follow an internal policy regarding FMLA leave was evidence of pre-text. The Court ruled that even if the employer failed to follow internal policies in relation to FMLA leave procedures, an employer’s failure to follow its own policies is not on its own sufficient to prove pre-text. The Court used the example of an employer who has not fully investigated an employee’s claim in accordance with its policy. The Court stated that failure to do so is a business judgment decision and not evidence of pre-text. Harrell v. Handi Med. Supply, Inc., (D. Minn. 9/28/2017).
Employee’s Complaint to HR May Suspend MHRA Statute of Limitations
The Minnesota Supreme Court recently held that an employee’s complaint about age discrimination to his employer’s human resources department suspended the statute of limitations for a claim under the Minnesota Human Rights Act (MHRA) because the parties were “voluntarily engaged” in a dispute resolution process involving a claim of unlawful discrimination. This case serves as a reminder that, under the concept of tolling, an employee may file an MHRA discrimination claim long after the statutorily prescribed one-year time limit. For this reason, employers should try to address and resolve employees’ discrimination complaints as promptly as possible or make clear that the dispute resolution process has concluded. Peterson v. City of Minneapolis, 892 N.W.2d 824 (Minn. 2017).
TIP OF THE MONTH: As snow is what we desire for the Holiday Season, it is good to be reminded of the Fair Labor Standard Act rules that apply during the work week, particularly as they may be relevant in weather-related closures.
Hourly employees do not need to be paid when they do not show up for work because of inclement weather or even when the employer closes the business early during inclement weather, such as a snowstorm. Exempt salaried employees, however, cannot be docked pay for partial days missed or full days missed when you close your business. The Fair Labor Standard Act (FLSA) rules make it clear that, if you provide personal days or vacation, you, in fact, may require a salaried employee to apply vacation or other paid time off. For example, if you close your office after two hours on one day and remain closed the next day, you could require a salaried employee to deduct 14 hours of vacation or paid time off. To the extent a salaried employee has used all of his/her vacation or paid time off, you need to pay them without any deduction. On the other hand, if a salaried employee simply does not show up because he/she feels, for example, “snowed in”, this could be considered an absence for personal reasons, and you can deduct a full day of pay. However, if a salaried employee decides to leave early to make sure he/she gets home safely, your only alternative is to use paid time off or vacation, as you cannot dock for partial days without risking loss of exempt status.
Obviously, there are safety reasons to be considered, so you would not want employees to report in many instances, and good employee relations may dictate not making any or only partial deductions. However, these pronouncements do give you some options if you desire to use them. Finally, please recall the pronouncement under the FLSA reminding employers to have a written policy against improper salary deductions so that an occasional correction of a mistake in pay calculations does not result in a loss of exempt status.
Hanft Fride’s business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth, Minnesota. Visit our website at www.hanftlaw.com for general information on the firm and our attorneys. Our employment lawyers include Tom Torgerson, Rob Merritt and Scott Witty. Richard Burns is now of Counsel.
The information provided in this E-letter is general in nature and should not be used as a substitute for professional services and advice. The communication and receipt of this information is not intended to create an attorney-client relationship. Readers should consult with their legal counsel before taking any action on matters covered in this E‑letter.
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Copyright 2017 by Hanft Fride, P.A. All rights reserved. Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802. Phone 218.722.4766; Fax 218.529.2401.