Below is a review of the posts on Facebook and LinkedIn from the past week. You can check out the full posts by clicking on the links.
The post on Sunday 7/14/2024 told us the US Chamber of Commerce sued Federal Trade Commission (FTC) over (alleged) power grab related to ban of non-compete agreements. This post includes both a podcast and transcript.
The Chamber’s President and CEO Suzanne Clark issued a statement immediately after the FTC’s final vote to ban employer non-compete agreements. She said, in part, that the “decision to ban employer non-compete agreements across the economy is not only unlawful, but also a blatant power grab that will undermine American businesses and their ability to remain competitive … the FTC has never been granted the constitutional and statutory authority to write its own competition rules. Noncompete agreements are either upheld or dismissed under well-established state laws governing their use … The chamber will sue the FTC to block this unnecessary and unlawful rule ….” Not long ago the Chamber of Commerce fulfilled its promise, arguing in a lawsuit filed in federal court in TX that the FTC overstepped its authority by issuing rules that define unlawful methods of competition. The Chamber was joined by three other business groups (identified in the post). Information on the FTC’s vote is also in the post. Ryan LLC, a tax services firm in Dallas, also sued the FTC, generally raising similar arguments. And the FTC’s statement? See the post.
So here’s how the arguments stack up. On the one hand, companies use non-competes to protect trade secrets and avoid training employees who then hop over to work for a competitor. On the other hand, the FTC and others say that non-compete agreements suppress competition for labor, pushing down wages. Those supporting and opposing that position are listed in the post. This move may also have been emboldened by the current Supreme Court. Why is that? See the post.
TAKEAWAY: The ban is on hold in some areas, but still slated to become effective soon in others Know how your business will need to proceed.
The post on Monday 7/15/2024 asked: what to do when salaried employees fall below the new overtime threshold? There is more to that question, and its answer, than employers may realize, especially given future increases in the threshold and pending (or threatened) litigation.
Prior to July 1, for example, if an outside sales professional earned an annual salary of $43,000, that compensation exceeded $35,568 per year, so she was not eligible for overtime pay under the Fair Labor Standards Act’s regulations. However, that changed effective July 1st. The U.S. Department of Labor published its final rule updating overtime pay eligibility, which increases the FLSA’s minimum annual salary threshold via a pair of changes set to take effect over the next several months.
July 1 is the first increase – from the current minimum of $35,568 per year to $43,888 per year. The next threshold increase is on Jan. 1, 2025, and periodically thereafter – all as noted in the post. So now the sample salesperson’s employer has some choices to make. The employee could be kept at her current pay level and converted from exempt to nonexempt, making her eligible for overtime pay. Alternatively, the employer could increase her pay to exceed the new threshold so that she remains exempt from overtime pay. But there is a lot that goes into the decision.
First, identify which employees are affected by the new threshold. Why? See the post (both as to dollars and the actual job duties). This might be a good opportunity to redo job descriptions and duties for the reasons set forth in the post.
Next is to run the numbers and analyze potential effects. What does that mean? How much will it take to keep those employees’ pay above the new threshold. But that cannot be done in a vacuum. Other things to consider in that area are in the post, including that if one employee’s pay is increased to maintain overtime exemption, other employees who currently make more than that employee might be unhappy. But there are other ways to increase compensation – see the post for ideas.
If the decision is made not to increase pay above the new threshold, then the employee becomes non-exempt. This may not play well for some salaried employees’ thinking and functionality– see the post. The effect of converting someone from exempt status to non-exempt goes beyond just the dollars – see the post. And there might be timekeeping logistics to overcome too if someone is converted from exempt to non-exempt pay status. That too is in the post.
Two other steps employers should take as part of this process are listed and discussed in detail in the post.
TAKEAWAY: Knowing how to properly classify workers is the starting point for determining applicability of the new overtime pay threshold, but not the ending point. Work through this with an employment lawyer if needed.
The post on Tuesday 7/16/2024 noted Southwest Airlines is back in court over firing of flight attendant with anti-abortion views. The issue centers on whether a flight attendant was fired for her religious beliefs or for improper conduct when she sent graphic anti-abortion material and disparaging messages to a union leader. Southwest Airlines and the union are trying to have an appellate court reverse an $800,000 award to the woman. Also at issue is the trial judge’s contempt order that required three of the airline’s attorneys to undergo religious liberty training from a conservative advocacy group. The appellate court heard arguments from both sides in the suit filed by flight attendant Charlene Carter against the airline and her union. One of the judges on that court set forth what was seen as the key question – see the post for what it is.
Southwest argues that it broke no laws by firing Carter because she violated company rules requiring civility in the workplace. What Carter did is also in the post. The judge questioned whether Carter was treated fairly by what Southwest did that ultimately resulted in the discharge – again, see the post. Why Southwest argues that its action was ok is also in the post. Carter’s argument to the contrary is also noted in the post. She says that her discharge violated federal law shielding employees from religious-based discrimination and that Southwest management and the union should be held liable. The Judge had an interesting question for Carter; it is in the post.
The recent oral arguments did not address another aspect of the appeal — a contempt order requiring religious law training for three Southwest attorneys. What each side has said about that piece is in the post. The contempt order was issued after the trial judge ordered Southwest to tell flight attendants that under federal law, it “may not discriminate against Southwest flight attendants for their religious practices and beliefs.” What Southwest instead did is in the post (hint: it did not follow the judge’s order). So the judge found Southwest in contempt last August and ordered Southwest to pay Carter’s most recent legal costs, dictated a statement for Southwest to relay to employees, and ordered the training (details of which are in the post).
The initial monetary award against Southwest and the union was $5.1 million, most of which was to be paid by Southwest. The trial judge reduced it to about $800,000 (because of statutory caps. How that was calculated is also in the post.
TAKEAWAY: We all know about religious liberty, but this case puts it at a crossroads with an employer’s right to control workplace conduct. Stay tuned (and discuss any such issues in your workplace with an employment lawyer before taking adverse action).
The post on Wednesday 7/17/2024 was about residential/storage condos advancing – one way to get around condo/HOA parking restrictions. Interesting – look at the plan/pic in the post. A planning commission approved a conditional-use permit (CUP) in late June for construction of 15 part residential/part storage condominium units at the current site of a vacant, triangular-shaped parcel. The site was rezoned from single-family residential to two-family residential earlier this year; the difference that makes is noted in the post.
The owners want to build what they call “Boat House Motor Condos”, a multi-residential development with five separate buildings having from two to four units per building. The owner-occupied condos would have a living area and space to store boats and other vehicles. Each buyer would determine the internal layout of the unit. The planning commission did have some questions and suggestions, including one involving a theme common to most community associations these days – see the post for that.
What was not common was that representatives of the County Astronomical Society expressed concerns about the light emanating from the development having a negative impact on nighttime viewing at the nearby Observatory. What they suggested, and the example they gave, is in the post.
Ultimately the planning commission approved the permit request with five conditions: (1) All exterior lighting is to be night-sky friendly and shielded (as detailed in the post), (2) five trees of the ornamental or dwarf species, as specified in the street tree policy, are to be planted along specified street frontage where wires currently exist, and the other 3 detailed in the post (look at that last one closely). But that’s not the end of the tunnel – more is still needed on the municipal end as noted in the post.
TAKEAWAY: Parking of vehicles other than standard cars and small trucks is a growing issue in community associations; this is thinking outside the box on one way to handle it. Perhaps a discussion as to the future is in order with a community association lawyer.
In the post on Thursday 7/18/2024 we saw it was NOT Christmas in July for these owners in a suit with their HOA over holiday display. The couple involved in the suit was known for hosting massive holiday shows, but the recent federal appeals ruling was anything but Christmas in July for them.
In a split decision, court has mostly ruled on the side of the homeowner’s association in its opposition to Jeremy and Kristy Morris’ extravagant holiday display in a dispute that’s lasted years and even was featured on Apple TV+ titled: ‘Twas the Fight Before Christmas (yes, the link should work). The judges agreed that the trial court was correct in 2019 by throwing out an earlier jury decision and $75,000 in damages in favor of the couple’s Christmas display.
But, in a written opinion of 105 pages, the court also disagreed with some of what the trial court judge did (see the post). So they ruled that the case could be subject to a new trial, if the parties decide to pursue it. The actual language on that is in the post.
The ruling was issued nearly eight years after the Morrises moved to the community and held two Christmas shows that featured more than 200,000 lights and a camel. They got pushback from the HOA (even before moving to the neighborhood) but put on their show anyway in 2015. Then in 2016, they organized an even bigger show that included 48 volunteers and four “hot chocolate elves.” How things progressed from there is detailed in the post. A jury in 2018 sided with the Morrises on all counts and awarded them $75,000 in damages. But then in 2019, the trial court judge reversed the jury’s decision. The basis upon which he did that is also in the post. Jeremy Morris appealed.
The appellate judges were not unanimous in their decision – see the post. They also discussed the strengths and weaknesses the parties should keep in mind should they pursue the case. That too is in the post.
TAKEAWAY: Any time there is litigation, both the condo/HOA and owner have risk; think carefully about it, try to resolve the matter without litigation, and get a community association lawyer involved early on.
The post on Friday 7/19/2024 told us Weis Markets to pay $75,000 in EEOC sexual harassment, disability discrimination suit. According to the EEOC’s suit, a male supervisor at a Mifflintown, Pennsylvania store subjected a female employee to a sexually hostile work environment. What that included is in the post (and makes one go “ugh”). Another supervisor witnessed some of the conduct but failed to take action to stop it. And then when the female employee reported the conduct to the general manager, Weis did not take reasonable action to end the harassment and prevent its reoccurrence. But that’s not all. The EEOC also alleged that Weis later required the female employee to participate in the company’s employee assistance program (EAP) – how and why that came about is in the post. When she refused to participate in the EAP, Weis suspended and then fired her.
So after conciliation failed, the EEOC brought suit in federal court in Harrisburg under Title VII and the ADA in 2023. The suit’s caption is in the post in case you want to look it up. The EEOC and Weis have since settled the case by a mutually agreed consent decree approved by the court on June 17. But it involves more than the payment of monetary damages – see the post for the detailed listing of what else Weis must do.
TAKEAWAY: Make sure to stop discrimination and harassment in your workplace – and not to take adverse action against those who report it.
Finally, in the post yesterday 7/20/2024, we learned that But For, or Not But For: That is the question for FMLA retaliation claims. In other words, must an employee show that an adverse employment action would not have happened but-for (i.e., it happened only because of) their request for FMLA leave or other protected activity? Or does an employee have to show only that the request for FMLA leave or other protected activity was a motivating factor for the adverse employment action? There is now a split among the U.S. Circuit Courts of Appeals as to the answer.
In reverse, the less-demanding motivating factor standard is satisfied by a showing that the employee’s request for FMLA leave (or other FMLA-protected activity) was a motivating factor for an adverse employment action, even though other factors also motivated the adverse action. Contrast that with the more-demanding but-for standard which is satisfied only by a showing that an adverse employment action would not have happened but-for the protected activity.
The Eleventh Circuit recently adopted the but-for standard. The rest of the tally has the Second, Third, and Ninth Circuits having adopted the motivating factor standard and the Sixth Circuit waffling on which standard is appropriate. Let’s look a bit more closely at the recent 11th Circuit opinion since it is an outlier at this point.
In that case, Walgreens terminated an employee who took intermittent FMLA leave after a history of performance issues, insubordination, and dishonesty. The employee sued Walgreens, alleging interference with her FMLA rights and retaliation. She alleged that her request to take FMLA leave was a motivating factor for the termination, citing to decisions from the Second, Third, Sixth, and Ninth Circuits in support of her argument that the motivating factor standard should apply. The district court disagreed and ruled that the but-for standard applied for FMLA retaliation claims.
On appeal, the Eleventh Circuit affirmed, relying on the Supreme Court’s analysis in University of Texas Southwestern Medical Center v. Nassar (a summary of which is in the post). The Eleventh Circuit concluded that based on Nassar, Congress would have included language in the retaliation provisions of the FMLA had it intended the standard to be motivating factor causation. The Eleventh Circuit continued its reliance on the statutory language as noted in the post, thus disregarding the findings of the Second, Third, Sixth, and Ninth Circuits.
This new decision applying the but-for standard is good news for employers in the Eleventh Circuit because employees now must meet a higher standard to prevail on FMLA retaliation claims. What they need to prove is detailed in the post.
But outside of the Eleventh Circuit, that is not the standard. For example, Pennsylvania is subject to decisions of the Third Circuit which uses a motivating-factor standard (thus a lower burden for employees bringing FMLA retaliation claims). Employers in those jurisdictions (including PA) may want to be more proactive, including having clear leave polices and the other things listed in the post, before taking any adverse employment action against an employee who has engaged in protected activity under the FMLA.
TAKEAWAY: The more that employers in PA (and the other motivating-factor jurisdictions) can do to demonstrate that an adverse employment action was taken for reasons other than something related to the FMLA, the easier it will be to defeat an FMLA retaliation claim. Get an employment lawyer involved early on.
York, Pennsylvania 17403