Posts tagged as:

wage and hour suits

…and the right to volunteer one’s labor (earlier), from frequent Overlawyered commenter Gitarcarver at his blog [Raised on Hoecakes]:

Volunteers serve in National Parks around the country without ever being paid for their labor.

Why does the government encourage people to labor without pay for some activities and not others? …

We think that volunteering is noble, rewarding and educational independent of whether the cause is “for profit” or not.

Our issue is not with volunteering.

The issue is what right does the government have in saying where a free citizen of this country can donate his or her time and efforts to?

If you have a friend who is starting a business and you want to help him succeed, why can’t you volunteer your time, efforts and expertise? If a neighbor wants to build and extension onto their offices and you donate a set of architectural or engineering plans because that is your area of expertise. what right does the government have to say “you can’t do that?” If you design web pages and do some work on a web page for a fellow parishioner at your church, what concern is that of the government? How many small businesses have “friends” who donate time to repair or maintain the business’ computers?

The bottom line is the application of the labor of a person is the individual’s choice – not the government’s.

P.S. Small though it was, Westover “produce[d] the greatest variety of ports in the United States,” reports Baylen Linnekin. More from Darleen Click at Protein Wisdom. And in our comments section a reader identifying himself as William Smyth, owner of Westover Winery, comments here.

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“California has a state law that prohibits for-profit companies from using volunteer labor.” That spelled doom for little Westover Winery in Castro Valley, which cleared around $11,000 in profits a year for its owning couple and used unpaid volunteers, many of them amateurs who wanted to learn the wine business. The state hit the business with $115,000 in fines and wiped it out, to the unhappiness of some of the displaced volunteers. [Scott Shackford, Reason; Rebecca Parr, Daily Review/San Jose Mercury News] More: A Debra Saunders column. And I mention this episode, along with the one linked below about a California law combating off-books contractors, in a new Cato post about how licensed and compliant businesses often support making government more powerful and invasive so as to go after the other kind.

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Labor and employment roundup

by Walter Olson on September 18, 2014

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Mallory Musallam had been a plaintiff in a class-action suit seeking minimum wage and overtime against the talk-show host on behalf of former interns. Now she has apologized and withdrawn her name, saying “lawsuit-hungry attorneys” had approached her at “a weak vulnerable time, facing student debt” and talked her into taking part in an action whose exact nature she didn’t recognize. “I cannot apologize enough for this debacle. I do not believe in getting something for nothing — that’s not how I was raised.” Her “now-former lawyer, Lloyd Ambinder, did not return a call for comment.” [N.Y. Daily News]

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The many, many pitfalls of wage-and-hour law: “The Los Angeles City Council on Tuesday finalized a $26-million legal settlement to end a lawsuit over a ban on lunchtime naps by trash-truck drivers. … Sanitation officials had imposed the no-nap rule to avoid the bad publicity that would come if a resident, business owner or television news crew stumbled across a sleeping city employee. But lawyers for the drivers said the city, by limiting workers’ mealtime activities, had essentially robbed them of their meal breaks.” [Los Angeles Times]

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  • After Harris v. Quinn, states and unions begin dropping mandatory dues collection for home health carers [Michigan Capitol Confidential, Fox; my two cents at Free State Notes on Maryland's heel-dragging]
  • Macy’s in suburban Boston is opening target for NLRB bid to install gerrymandered “micro-unions” [The Hill, earlier here, etc.]
  • Federal contractors to fork over pay demographics, the better to be sued [Department of Labor]
  • Speaking of the barrage of executive orders coming out of the White House, it’s beyond silly to pretend that all the costly new employment mandates will promote “efficiency and cost savings” [Coyote]
  • “Gay Christian conservative employee sues gay bar for sexual, religious harassment” [Volokh]
  • “House Hearing Highlights Problems in the Fair Labor Standards Act” [Alex Bolt]
  • “Forcing Kids to Do Chores Not a Federal Crime” [Courthouse News, Volokh]

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Labor roundup

by Walter Olson on July 11, 2014

  • California tenure lawsuit exposes rift between Democratic establishment and teachers’ union [Sean Higgins, Washington Examiner]
  • NLRB pushing new interpretation to sweep much outsourcing into “joint employment” for labor law purposes [Marilyn Pearson, Inside Counsel]
  • Restaurant “worker centers” campaign against tipping. Perhaps a sign their interests not fully aligned with waitstaffs’? [Ryan Williams, DC]
  • NLRB’s edict against non-union employers’ confidentiality policies emblematic of its activist stance lately [Karen Michael, Times-Dispatch]
  • Three public sector unions spent $4.3 million on Connecticut state political activities in 2011-2013 cycle [Suzanne Bates, Raising Hale]
  • Sen. Lindsey Graham prepares funding rider to block NLRB “micro-union” recognition [Fred Wszolek, background]
  • “Table Dance Manager” glitch alleged: “Exotic dancers + allegedly malfunctioning software = Fair Labor lawsuit” [Texas Lawyer]

Writing checks for overtime (or sending managers home before they reach the point of being entitled to it) is only the more visible cost to business of the Obama administration’s scheme to reclassify layers of junior management as hourly employees. Small businesses told the Wall Street Journal this spring (summarized) of the forbidding morale cost of discouraging ambitious employees from upwardly mobile, which usually means salary-oriented, thinking:

Emo Pentermann, owner of Bell ATM Service Inc., a distribution and repair shop for ATMs and other money machines in Centennial, Colo. …worries that making more people eligible for overtime pay could remove the inherent incentive for lower-level managers to hustle to earn a promotion.

“You work hard, develop the maturity for a salaried position, and then move up,” he says. “It takes away that whole level of maturity and freedom of choosing to get the job done in the time allotted. So for all practical purposes, they just might as well be on a time card.”

Jeffrey Harris has 70 salaried employees at his Chicago-based Inte Q, a marketing firm that specializes in customer-loyalty programs for brands such as Reebok and Office Depot. … He has tried to create a workplace environment that de-emphasizes keeping up with a time clock. For instance, employees can take time off work to attend a child’s performance in school….

…when he heard about the proposal, he said he immediately thought it would affect the type of work culture that has yielded results for him in both profits and employee retention. Only 2% of workers have voluntarily chosen to leave the company in the past three years, he says.

Whole piece here, and earlier on the manager-overtime scheme here and here.

P.S. Proposed regulations anticipated by November 2014, final regulations “unlikely to arrive until Spring 2015″ [Wage and Hour Insights]

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Labor roundup

by Walter Olson on June 13, 2014

  • “Coming to Your Workplace Soon? Union Organizing Efforts Via the Company’s Email System” [Daniel Kaplan, Foley & Lardner]
  • “Pennsylvania Unions Still Exempt from Harassment [Law], Continue Harassing with Impunity” [Trey Kovacs, Workplace Choice, earlier here, here, here]
  • Music production gravitates to right to work states attract in part because union musicians less afraid of discipline for taking gigs there [Variety on union's dispute with videogame-composer member]
  • New definition of “nationwide strike”: protesters show up at a few Wal-Marts, few workers pay attention [On Labor]
  • Presently constituted NLRB and U.S. Department of Labor are zealous union partisans, not impartial arbiters [Alex Bolt]
  • “Workers filing wage-and-hour lawsuits under Labor Act at record pace” [Crain's Detroit Business]
  • “Despite repeated failures, Card Check still top Big Labor priority” [Sean Higgins, Washington Examiner]
  • Blockbuster “web accessibility” issue, with potential for massive disruption of online life, continues to drag on without action in Washington despite urgings from academics; but at Ninth Circuit’s behest, California Supreme Court will decide whether state’s Disabled Persons Act covers websites [David Ettinger, Horwitz & Levy] More: Amy Alkon and commenters;
  • Federal district judge (E.D.N.Y.), suspecting foul play in multiple ADA filings, sends staff to investigate, but that’s a no-no as the Second Circuit reminds him [Josh Blackman]
  • Noting “continuing paranoia and obsession,” Vermont Supreme Court rebuffs bar applicant claiming discrimination on basis of mental illness [ABA Journal]
  • Just fine and dander: optician’s shop in suburban Detroit turns down worker’s request to bring service dog for generalized anxiety disorder, will pay $53,000 in settlement [EEOC]
  • Attack on “sheltered workshops” fits into multi-front effort to extend reach of federal wage-hour law: “Landmark DOJ settlement with RI provides road map to disability-law compliance for 49 other states” [ABA Journal]
  • Coalition politics counts: prominent disabled-rights groups [AAPD, DREDF, Bazelon Center, etc.] favor driving up cost of at-home attendants at expense of their own putative constituents [Benjamin Sachs, On Labor, on Harris v. Quinn amicus]
  • “Alcoholism and the ADA: Not as clear-cut as you think” [Dan Wisniewski, HR Morning, on Crosby v. F.W. Webb Co.] “Playing golf and having sex are major life activities under the ADA” [Eric B. Meyer]

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From a casual glance at the account by the Pew Foundation’s StateLine in USA Today, you might think President Obama’s proposal to require overtime for home health carers (covered earlier here and here) was not so very costly or burdensome. “States wary home care worker rules could cost millions,” reads the headline. Paragraph 6 seems to confirm that the stakes are just in the low millions, which would be minor as health care policy changes go: “The U.S. Department of Labor estimates the rule will cost $6.8 million a year over a 10-year period, with private businesses and state Medicaid programs picking up the tab.”

On the other hand, you might find the above-cited number to be suspiciously low, what with advocates of the rule promoting it as a major boost to the take-home pay of nearly 2 million home care workers ($6.8 million works out to about three and a half bucks per year for each such worker). Thirteen paragraphs later, the tune has changed: “California, which already applies its $8 minimum wage to home care workers, but not overtime, estimates the new overtime requirements will cost the state more than $600 million in 2015-2016.” That is to say, just one state (California) gives an annual cost estimate for the rule that’s about 100 times the national cost estimate recited earlier in the piece. What gives?

This September account from Littler Mendelson, while not itself as clear as one might like, sheds some light on the discrepancy:

The DOL estimates the new regulations will affect approximately 1.9 million home care workers in the United States. The DOL contends the primary effect is “the transfer of income from home care agencies (and payers because a portion of costs will likely be passed through via price increases) to direct care workers, due to more workers being protected under the FLSA.” While described by the DOL as a “transfer of income,” in actuality the DOL’s numbers are the estimated annual cost to the home care agencies as a result of the new regulations. With respect to annual costs incurred for minimum wages, travel wages and overtime, the DOL estimates home care agencies will pay an average of $210.2 million the first year of implementation, increasing each year to an estimated $468.3 million on average by year 10. For annual regulatory familiarization, hiring costs (based on overtime hours needed to be covered by newly hired employees), and deadweight loss, the DOL projects home care agencies will incur $20.7 million on average in the first year, decreasing to an average of $5.1 million in year 10.

However, a March 2012 Navigant Economics Study: Estimating the Economic Impact of Repealing the FLSA Companion Care Exemption suggests a much higher cost to home care agencies. Although Navigant studied the economic analysis published by the DOL in the 2011 Notice of Proposed Rulemaking (NPRM), the study continues to suggest that the DOL has underestimated the compliance costs of the new regulations. According to Navigant, the DOL has: disregarded the impact on live-in workers, a group the study contends are disproportionately more likely to incur extended periods of pay at the overtime wage under the new regulations; underestimated the cost of paying home care workers for travel time; and underestimated the increased cost to the home care agencies for compliance with the minimum wage protection afforded by the FLSA. Ultimately, the study concludes the annual cost to home care agencies is significantly higher than the DOL has predicted.

It’s almost as if DoL has been doing its part to promote the president’s proposal by systematically lowballing, complicating and hiding its costs. The USA Today story has this relevant passage about some other costs that may be less readily monetized:

Joseph Bensmihen, president of United Elder Care Services, Inc., a caregiver referral service in Boca Raton, Fla., said the most likely alternative for most of his clients, besides moving into a facility [emphasis added], will be to rotate caregivers to ensure that none works more than 40 hours a week. “This means that one of the most cherished benefits of home care among the elderly, disabled, and infirm, namely continuity of care, will be lost.”

It won’t take many hapless elderly persons moving from home and family care into nursing home facilities to exceed that absurd $6.8 million cost underestimate all by itself.

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I’ve got a new post at Cato about the latest federal court smackdown of overreaching enforcement by the Obama administration, this time in a Department of Labor prosecution regarding a Texas company’s wage-and-hour classification. I mention some greatest hits of the past couple of years reversing DoL, the EEOC, the EPA and other agencies, and suggest that a useful step might be for regulated businesses to contest unreasonable cases more often rather than, as is so often the norm now, paying to get them over with.

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  • “Will ‘Microaggressions’ Make Their Way Into Employment Discrimination Cases? Have They Already?” [Daniel Schwartz]
  • More phone and pen: Obama executive orders will forbid federal contractors from retaliating against employees who discuss pay with colleagues, direct DoL to require compensation data from contractors based on sex, race [AP, White House]
  • List of best and worst states for employee lawsuits (from employer’s perspective) includes some surprises, although California’s status as worst isn’t one of them [Insurance Journal] $20K to fend off suit “for harassment and intimidation by her manager — when the manager was her sister” [Coyote; sequel to "Ventura County blues," on which earlier here and here]
  • Wage/hour activists step up pressure for federal enforcement, more detailed pay stubs to combat off-clock work, alleged misclassification [ABA Journal]
  • “A National Minimum Wage Is a Bad Fit for Low-Cost Communities” [Andrew Biggs and Mark Perry, The American] “Immigration, Eugenics, and the Minimum Wage” [Matt Zwolinski, Bleeding Heart Libertarians]
  • Court decision may amount to end run enactment of something like ENDA minus the legislative compromises and exceptions [Tamara Tabo, and thanks for link to "good reasons" for opposition; a second view from Jon Hyman]
  • “DOL (Department of Labor) Persuader Rule Undermines Attorney-Client Privilege, Attorney Generals Say” [Howard Bloom and Philip Rosen (Jackson Lewis), National Law Review, earlier]

April 4 roundup

by Walter Olson on April 4, 2014

  • “Helmet maker not to blame in football player’s injury, jury finds” [L.A. Times]
  • “New Corporate Survey Illustrates Burdens Of Document Preservation And Benefits Of Proposed [Rule 26 Discovery] Reform” [Mark Chenoweth/WLF, Timothy Pratt/Abnormal Use, NJLRA, earlier]
  • Have divorce statistics been misreported? [Kay Hymowitz, Robert VerBruggen]
  • “Intoxicated Man Loses Big at Casino, Wants His Money Back” [Abnormal Use]
  • “SCOTUS Deferred to Executive Agencies. What Happened Next Will Infuriate You!” [Ilya Shapiro, Cato on Peri & Sons Farms v. Rivera]
  • Overtime scheme: Obama doesn’t “worry about being held accountable for the unwelcome consequences” [Steve Chapman] Advice for small business on complying with salaried employee classification [Suzanne Lucas ("Evil HR Lady") at Inc., earlier here and here]
  • Religious liberty, discrimination law and how spurious rights drive out the real [Jacob Sullum] Timely: “Harvard Hosts Conference on Religious Accommodation in the Age of Civil Rights” [TaxProf]

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  • If you imagine the primary goal of occupational licensure is to protect consumers, think again [Donald Boudreaux, Ramesh Ponnuru]
  • “U.S. Civil Rights Commissioners Take EEOC to Task on Background Checks” [Nick Fishman, Employee Screen; Seyfarth Shaw]
  • Pennsylvania lawmakers consider ending union exemption from stalking laws; Illinois, Nevada and California also shelter them from liability [Washington Examiner]
  • “How Disruptive Can an Aggressive NLRB Be in a Non-Union Setting? More Than You Might Think” [Michael Fox]
  • “A call for the DOL to fix what is wrong with our wage-and-hour laws” [Jon Hyman]
  • Restaurant Opportunities Center, known for staging employee protests, bars own employees from same privilege [Florida Watchdog via Sean Higgins]
  • Conference honoring assassinated professor Marco Biagi showcases classical liberal labor law scholarship (or so one would hope) [my comment at Workplace Prof, related call for papers, earlier]

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  • Nomination of David Weil as Labor Department wage/hour chief could be flashpoint in overtime furor [Terence Smith, Hill] Another reaction to President’s scheme [Don Boudreaux, Cafe Hayek, earlier here and here]
  • Oregon: longshoreman’s union says NLRB charges of blinding, threatened rape meant “to distract” [Oregonian]
  • Who thinks hiking the minimum wage would kill jobs? Company chief financial officers, to name one group [Steve Hanke, Cato]
  • Tourists’ casual naivete about union politics at NYC hotel made for tension, hilarity [How May We Hate You via @tedfrank]
  • Just for fun: Wichita business’s creative responses to union’s “Shame On…” signs reach Round 2 [Volokh on first round, Subaru of Wichita on second round]
  • Workers’ comp claims at government agencies in Maryland can be odd [Baltimore Sun via Jeff Quinton]
  • Are unions losing their grip on the California Democratic Party? [Dan Walters]

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So says Coyote, and I agree with him (earlier here).

…companies will quickly restructure their work processes to make sure no one works overtime. And since their new hires are working just a straight 40 hours (with mandatory unpaid lunch break time in CA), they will likely pay less. If I am paying $40,000 a year for someone who will work extra hours for me, I am not going to pay that amount to someone just punching a time clock. And the whole psychological relationship is changed – a salaried person is someone on the management team. A person punching a timeclock may not be treated the same way. …

…for those who think schools assign too much homework, this could well be the end of homework. The most dangerous possible thing with hourly workers is to give them the ability to assign themselves unlimited overtime. Teachers could do this at home with grading papers. If I were a school, I would ban teachers from doing any grading or schoolwork prep at home — after all, it’s hourly and probably overtime and they could work unlimited hours at home and how would you get it under control? The only way to manage it would be to ban it entirely.

He marches through some of the implications, all bad, for employee travel (why allow it except for the direst company needs if every hour on the road is going to be paid at time and a half?), ObamaCare incentives, and the erosion of a minimum pay guarantee for those whose salary now provides one. (On the homework issue, incidentally, teachers are exempt under current FLSA rules; grading papers at home would only be dangerous assuming a change in those rules.)

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