March 2019 – Vol. 21, No. 3 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, and Richard R. Burns,, 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.



Wednesday, March 4, 2020

Holiday Inn – Downtown, Duluth

Thank you to the 100+ of you who were able to attend this year’s seminar on March 6th. We hope you found it interesting and informative.  We sincerely appreciate all the valuable feedback from the post-seminar surveys.

This Month’s Topics:

  • The Department of Labor Issues New Proposed White Collar Overtime Rules
  • EEOC’s Pay Data Rule Reinstated 
  • Monitoring Social Media Account did not Give Employer ‘Unclean Hands’  
  • Unions Cannot Force Members to Pay for Political Lobbying
  • Tip Of The Month

The Department of Labor Issues New Proposed White Collar Overtime Rules

We now have a minimum salary for exemption status, and it is $35,308, which is almost exactly halfway between the old number – $23,600 – and the prior proposed increase to $47,479.  This means an every two week payment of $1,358 will meet the new requirement.  Up to 10% of the salary can be made up of nondiscretionary bonuses and commissions under the new rule.  This new salary level will apply to all salaried executive, administrative and professional employees who meet the current duties test, as well as employees in computer-related fields meeting a separate duties test.

It is anticipated that this new level will not apply until approximately January 2020 and will impact approximately 1.1 million workers.  The prior proposal would have affected 4 million workers.  The new minimum salary may only be in effect for a couple of years, if a change in administration occurs.  The salary level will be reviewed and possibly adjusted every four years, but only after public input. 

Although there was some expectation there might be changes in the duties rule, are none proposed.  There also are no different salaries for different geographical regions; a previously proposed change that would have created headaches for national employers.  Interestingly enough, the highly compensated number that has a lesser duties test is $13,000 higher than what was proposed by the Obama Administration, and it is now set at $147,414. 

EEOC’s Pay Data Rule Reinstated 

A recent court ruling reinstated the Equal Employment Opportunity Commission (EEOC) rule meant to combat pay discrimination by requiring employers with more than 100 employees to gather data under the so-called “Component 2.”  Component 1 seeks demographic data on race, gender and ethnicity by job category and has long been a requirement.  Component 2, however, requires employers to report W-2 wage data and hours worked for employees within 12 specified pay bands.  The difficulty here is that most employers’ HR software and W-2 compensation data do not integrate with each other.  Some suggest that the data will be worthless, but at least one prior commissioner argued that the additional pay data would have multiple benefits, including helping agencies to rule out possible pay discrimination and better target enforcement efforts while assisting employers and promoting equal pay in their work places.  The question now is when the Component 2 reports will be required.  First is the question of a government appeal to the D.C. Court of Appeals.  Due to the federal government shutdown, the first deadline to submit the revised EEO 1 report was March 31, but then it was changed to May 31.  However now, considering the forms and instructions do not even include Component 2, it is questionable when this new data will be required.  Many assume it will not be until the 2020 recording period. 

Monitoring Social Media Account did not Give Employer ‘Unclean Hands’  

The 3rd Circuit Court of Appeals (northeast) rejected the argument of employees who claimed that because their former employer, Scherer Design Group, LLC (“Scherer”), improperly accessed a Facebook account that the injunctive relief sought by Scherer in a civil suit should be barred. The case originated after an employee of Scherer left the company and formed competing companies, while also recruiting three employees of Scherer to work for the new companies. While analyzing one of the former employee’s computers, Scherer gained access to that employee’s Facebook account because the former employee had failed to logout. For a period of six weeks, Scherer monitored the account and learned that the former employees intended to steal client lists and other proprietary information. As a result, Scherer filed suit claiming tortious interference, breach of the duty of loyalty, and misappropriating trade secrets. Scherer was granted injunctive relief and the employees appealed. On appeal, the 3rd Circuit ruled that because there was no direct nexus between monitoring of the Facebook account and the conduct to be enjoined, the monitoring of the account did not bar the relief sought. The 3rd Circuit did not address whether privacy laws had been violated because it was not an issue that had been presented. Scherer Design Group LLC v. Ahead Engineering, LLC, no. 18-2835 (3rd Cir. 2019).

Unions Cannot Force Members to Pay for Political Lobbying

Under a recent ruling by the National Labor Relations Board (NLRB), unions cannot use union dues paid by non-members for political lobbying purposes if the employee paying the dues objects to use of his/her dues for that purpose.  The NLRB’s decision builds on a U.S. Supreme Court decision from 1988 that precluded unions from using funds collected from non-member employees covered by union-security arrangements for any activities “not germane to a union’s core representational duties of collective bargaining, contract administration and grievance adjustment.”  Communications Workers of America v. Beck, 487 U.S. 735 (1988).  In United Nurses and Allied Professionals (Kent Hospital) and Jeannette Geary, the NLRB concluded that while political lobbying may “incidentally affect” collective bargaining, and by extension a worker’s terms of employment, it is not part of the core collective bargaining duties of the union.  NLRB 01—CB-011135 (March 1, 2019).  Thus, dues paid by non-union member employees objecting to their contributions being used for political lobbying efforts cannot be used by the union for that purpose.  The NLRB further held that the objecting employee is entitled to a verified financial statement from the union providing the breakdown of chargeable and non-chargeable expenses.

TIP OF THE MONTHThe FLSA requires employers to pay employees a minimum wage for all hours worked, but may exclude time spent changing clothes or washing at the beginning or end of each workday.  Courts view this “preparatory activity” exception narrowly.  Thus, employers need to be aware that other preparation activities (other than dressing or washing) must be treated as compensable working time.  This includes time spent preparing tools or workstations, picking up assignments, or time spent walking/driving to a jobsite (not including commute) before an employee’s shift actually begins.

Hanft Fride’s business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth, Minnesota.  Visit our website at 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 2019 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.