SCOTUS: Prove FLSA exemptions using the preponderance-of-the-evidence standard

A unanimous Supreme Court on Wednesday held that FLSA exemptions are proved using the preponderance-of-the-evidence standard, not the clear-and-convincing evidence standard. EMD Sales v. Carrera (US S Ct 01/15/2024) [PDF]

The case involved sales representatives who claimed they were denied overtime payments. The employer argued they were outside salesmen and therefore exempt. The trial court—using the clear and convincing evidence standard—found they were not exempt.

The Supreme Court reversed in a unanimous opinion. Now the case goes back to district court to re-decide the issue.

NLRB's Thryv remedies shot down

Back in 2022 the NLRB announced that it will routinely award additional remedies for employees who are unlawfully terminated. This required employer to compensate employees for any direct or foreseeable pecuniary harms incurred as a result of the unlawful adverse actions against them, including reasonable search-for-work and interim employment expenses, if any, regardless of whether these expenses exceed interim earnings. Thryv, Inc, 372 NLRB. No. 22 (2022) [PDF].

Now the 3rd Circuit says this exceeds the NLRB's authority under the NLRA. Starbucks v. NLRB (3rd Circuit 12/27/2024) [PDF].

The court's reasoning was pretty simple. The NLRA allows the NLRB to award equitable relief. This includes reinstatement and back pay. But the statute does not give the NLRB authority to award legal relief.

As the court put it, "While the Board can certainly award some monetary relief to the employees, that relief cannot exceed what the employer unlawfully withheld."

Starbucks raised other arguments that the court did not reach:

* Nondelegation doctrine—that the Board’s reading of the NLRA would transfer Congress’s legislative power to the agency without an intelligible principle to constrain that delegation.

* Due-process.

* Seventh amendment right to a jury trial.

* Right to adjudication in federal court under Article III.

Employment law pop quiz #20 – Denial of a transfer

Is denial of a transfer an "adverse employment decision"?

Some courts are saying "No."
So no Title VII violation.

A recent example: Bradley v. Ohio County Bd of Ed (West Virginia Ct App 11/12/2024) [PDF].

Bradley alleged that she was denied a transfer for 16 positions, and those positions were filled by individuals under the age of forty with less seniority and experience.

The court held that refusal of a transfer is not an “adverse employment action”—even after Muldrow v. St. Louis, 601 U.S. 346 (2024)—because there has been no disadvantageous change in employment conditions.

Muldrow involved an involuntary transfer to a position with less perks, and the Supreme Court said she did not need to show she suffered SUBSTANTIAL harm.

The West Virginia court is saying Bradley suffered no harm at all.

I think that decision is wrong. Bradley has indeed suffered harm because of her age. Younger employees have more mobility, the ability to change locations, change supervisors, change co-workers. Bradley is denied all that due to her age. She is stuck in one spot.

Would the result be the same if members of one race were stuck this way?
I think not.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Get all the Pop Quizzes (20 so far) in one PDF – email me: RossRunkel@gmail.com.

Judge stops FLSA rule—nationwide

Nationwide: FLSA minimum salary threshold increases for the white-collar overtime exemption held invalid.

A federal judge in Texas has invalidated—on a nationwide basis—three recent changes in the Department of Labor's regulations governing the salary threshold for the FLSA's “white collar” overtime exemption:

(1) The July 1, 2024 increase from $684 per week to $844 per week.

(2) The increase to $1,128 per week that was scheduled for January 2025.

(3) Automatic increases every three years.

The case is Texas v. US Department of Labor (ED Texas 11/15/2024) [PDF].

Even if DOL appeals to the 5th Circuit, I expect the Trump administration will not follow through on an appeal.

NLRB: Captive audience speeches are unlawful.

For 76 years it has been lawful for an employer to require employees under threat of discipline or discharge to attend meetings in which the employer expresses its views on unionization.

The NLRB now says that is a violation of the National Labor Relations Act.

The decision is Amazon.com Services LLC (11/13/2024) [PDF].

The Board did say that an employer may lawfully hold meetings with workers to express its views on unionization so long as workers are provided reasonable advance notice of: the subject of any such meeting, that attendance is voluntary with no adverse consequences for failure to attend, and that no attendance records of the meeting will be kept.

The Board's press release:

"The Board articulated several reasons why captive audience meetings interfere with employees’ rights under the Act, thus violating Section 8(a)(1). First, such meetings interfere with an employee’s right under Section 7 of the Act to freely decide whether, when, and how to participate in a debate concerning union representation, or refrain from doing so. Second, captive audience meetings provide a mechanism for an employer to observe and surveil employees as it addresses the exercise of employees’ Section 7 rights.  Finally, an employer’s ability to compel attendance at such meetings on pain of discipline or discharge lends a coercive character to the message regarding unionization that employees are forced to receive. The employer’s ability to require attendance at such meetings demonstrates the employer’s economic power over its employees and reasonably tends to inhibit them from acting freely in exercising their rights.

The Board made clear that this change in the governing standard will be applied prospectively only."

Of course, this decision will be overruled once President-Elect Trump appoints a Republican-dominated Board.

Employment law pop quiz #19 – Ad for "recent graduates"

A job advertisement seeks a ‘‘recent college graduate."
Is that age discrimination?

In a recent case from the Connecticut Appellate Court, a 55-year-old man claimed that Yale University advertised for a ‘‘recent college graduate" and that Travelers insurance advertised for a "recent graduate." He claimed that these were a proxy for age, and a violation of Connecticut's statute prohibiting age discrimination.

The court upheld a lower court's findings that these words did not express a preference for a younger class of applicants.

It's important to note that the claim was that these postings were inherently unlawful per se and that there doesn't need to be proof of discriminatory effects or proof of intent to have a discriminatory effect.

This a very narrow holding.

I certainly don't recommend using this language in a job advertisement.

The case is Commission on Human Rights v. The Travelers (Conn Ct App 10/29/2024) [PDF].

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Get all the Pop Quizzes (19 so far) in one PDF – email me: RossRunkel@gmail.com.

Employment law pop quiz #18 – Firing NLRB's General Counsel

Can the incoming President fire the NLRB's General Counsel?

Yes, indeed.

President Biden fired the Republican GC on his first day in office.
Federal Circuit Court decisions held this was perfectly legal.

So, I expect President Trump will fire the current Democrat General Counsel—Jennifer A. Abruzzo. Then he can appoint an acting GC of his own choosing and nominate a permanent GC, who will need the Senate's approval.

This will change what happens at the NLRB. The General Counsel is independent from the Board, and decides which cases actually get prosecuted.

The President also can (and I think will) appoint a new Board Chairman. That will be the sole Republican Member—Marvin Kaplan.

In contrast, the statute says Board Members can be fired "upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause." This is being challenged in the courts, with the argument that—under the separation of powers doctrine—the President has to be able to fire them at will. We are a long way from a ruling from the Supreme Court on that issue.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Get all the Pop Quizzes (18 so far) in one PDF – email me: RossRunkel@gmail.com.

1st amendment protects Elon Musk's tweet

NLRB: Elon Musk's tweet was coercive, and must be deleted.
5th Circuit, en bank: That remedy violates the 1st amendment.

The NLRB ruled that a tweet by Elon Musk was a threat to rescind stock options if employees unionized. As a remedy, the Board ordered that the tweet be deleted.

In a 9-8 en banc decision, the 5th Circuit refused to enforce the Board's order.

Tesla v. NLRB (5th Cir 10/25/2024) [PDF]

An opinion signed by 8 judges (a "plurality") ruled that ordering deletion of the tweet would violate the 1st amendment. They said, "Deleting the speech of private citizens on topics of public concern is not a remedy traditionally countenanced by American law."

They said they didn't need to reach the issue of whether the tweet was an unfair labor practice.

One judge concurred in the judgment only.

Eight dissenters said, "there is no First Amendment issue posed by the deletion remedy because, contrary to the plurality’s naked assertion, Musk’s coercive tweet was not “constitutionally protected speech.”

Three constitutional attacks on the NLRB

Employers are going after the NRB on three different grounds.
[Watch the video]

First, the NRB Members can only be removed for cause. The argument is that this violates the separation of powers.

Second, the ALJ is the same thing.

Third, certain remedies that the General Counsel wants maybe have to have a jury trial.

So the NLRB members can't be fired at will by the President. And there's a 2022 Supreme Court case involving the Securities Exchange Commission. The Court held that the President can remove them at will. Now the question is whether the NLRB exercises executive powers. Well, certainly, when the General Counsel wants to go to district court to get an junction, she has to get the Board's approval and that is clearly an executive power.

When it comes to the ALJs, they're doubly removed because they're entitled to a hearing in front of the Merit System Protection Board, and those folks can't be removed by the President except for malfeasance.

And finally, the General Counsel is coming up with new remedies. For example, an employee who's illegally discharged gets reinstated with back pay and that's fine. Then she wants things like, well, maybe that employee had to pay their own doctor fees or they got behind on the mortgage, and she wants those to be remedied. Well, that's starting to sound more like a legal remedy rather than an equitable remedy which brings in to play the 7th Amendment which requires a jury trial, which of course the NLRB cannot do.

Predicting a unanimous US Supreme Court decision

I rarely predict that the US Supreme Court will decide a case unanimously. I'm doing so now.

On October 4, 2024, the Court granted certiorari in Ames v. Ohio Dep’t of Youth Servs. [Briefs]

Marlean Ames is a heterosexual woman who alleged that her employer—the Ohio Department of Youth Services—discriminated against her because of her sexual orientation in violation of Title VII. The 6th Circuit upheld summary judgment in favor of the Department. [Opinion here]

Ames interviewed to be the Department’s Bureau Chief of Quality, but she didn't get it. Four days later, the assistant director and the HR administrator terminated her from her existing position and demoted her. The Department then selected a gay man for Ames' former position and selected a gay woman as its Bureau Chief of Quality.

The 6th Circuit said it was easy for Ames to make out a prima facie case.

Just one problem – In order for a heterosexual to prevail she must also show “background circumstances to support the suspicion that the defendant is that unusual employer who discriminates against the majority.” Typically this is done by showing either (1) that the decisionmaker was gay or (2) that there was a pattern of discrimination against heterosexuals.

First, Ames was terminated from her previous position by two individuals who are both heterosexual.

Second, Ames’s only evidence of a pattern of discrimination against heterosexuals is her own demotion and the denial of the Bureau Chief position.

This decision is plainly wrong.

(1) Adding the "background circumstances" requirement has no basis in Title VII's text. That's the sort of thing the Supreme Court tends to be quite unhappy about.

(2) Requiring "background circumstances" for heterosexuals does exactly what Title VII forbids—treats some individuals worse than others.

Therefore, I predict a unanimous reversal.

Employment law pop quiz #17 – NLRB & the constitution

Is the NLRB unconstitutional?

So far, no court has said so. But storm clouds are forming courtesy of Amazon, SpaceX, Starbucks, and Trader Joe’s.

A prime target for the naysayers is the fact that NLRB Members can be removed by the President only "upon notice and hearing, for neglect of duty or malfeasance in office, but for no other cause."

The argument is simple: NLRB Members must serve at the will of the President, period. So the President can remove them for any reason or no reason.

This argument gets some support from the US Supreme Court case of Seila Law v. Consumer Financial Protection Bureau, 591 US 197 (2020) [PDF].

In the Seila case the CFPB was headed up by a single director who wielded a lot of executive powers. He was removable by the President only for “inefficiency, neglect of duty, or malfeasance in office.”

The Court held that violated the constitution's separation of powers.

As a remedy, the Court did not trash the entire agency. It simply severed the director’s removal protection from the other provisions of the statute. It seems that would be the worst case scenario for the NLRB.

Does the NLRB really exercise executive powers? They are what the Court has labelled “quasi-legislative” and “quasi-judicial" functions. Yet they do exercise one important executive power. The General Counsel cannot sue for an injunction in federal district court without the Board’s approval.

The NLRB's General Counsel exercises executive functions, and is removable at the President's will.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Get all the Pop Quizzes (17 so far) in one PDF – email me: RossRunkel@gmail.com.

Employment law pop quiz #16 – Federal overtime

Does federal law require overtime payments for more than 8 hours in one day?

No.

Federal law – the Fair Labor Standards Act – requires overtime payments (1.5 times the regular rate) for hours that are more than 40 in one week.

Federal law does NOT require overtime payments for more than 8 hours in one day.

Many state statutes do require overtime payments calculated on a daily basis, so you need to check you local laws.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Get all the Pop Quizzes (16 so far) in one PDF: email me: RossRunkel@gmail.com .

Employment law pop quiz #15 – Temporary back pain

Is this an ADA disability? – Temporary back pain, with chiropractor's limitations on lifting and bending.

[Morgan v. Allison Crane (3rd Cir 09/04/2024) [PDF] prompted me to ask this.]

First, don't be fooled by "temporary." Years ago the US Supreme Court held that an impairment must be “permanent or long term” in order to qualify. But Congress changed that in the ADA Amendments Act (ADAA) in 2008. "Temporary" is no longer a show-stopper.

Congress mandated that the “definition of disability . . . shall be construed in favor of broad coverage of individuals” and “to the maximum extent permitted.” In response, the EEOC explained that even an impairment that is expected to last less than six months can constitute an actual disability “if it substantially limits the ability of an individual to perform a major life activity as compared to most people in the general population.”

Second, consider what major life activities are involved. In our example, we have lifting and bending. An EEOC regulation specifically lists lifting and bending as major life activities.

Third, ponder "substantially limits." EEOC regulations say an impairment "need not prevent, or significantly or severely restrict” to be substantially limiting. They also say “substantially limits” should be “construed broadly in favor of expansive coverage.”

Fourth, the employee in the case cited above testified that “it hurt to sit, hurt to walk,” and it hurt to “turn[] left or right.” That was enough to prevent the employer from getting a summary judgment, but the ultimate winner will be decided by a jury.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #14 – NLRB & Amazon

Has the NLRB ruled that Amazon is a joint employer of subcontracted delivery drivers?

No, even though recent click-bait headlines are saying this.

The NLRB itself has not made such a ruling.

An NLRB Regional Director in California has made a "merit determination" which is an early step in a process that could put the issue in front of the NLRB itself.

Amazon does not directly employ drivers who deliver packages. Amazon has contracts with companies it calls Delivery Service Partners – DSPs. These DSPs employ the drivers. There are over 3,000 DSPs employing some 275,000 drivers.

The Teamsters Union was able to unionize employees at one of the DSPs in California – Battle Tested Strategies. Teamsters wanted Amazon to negotiate a collective bargaining agreement, but Amazon refused. So Teamsters filed unfair labor practice charges.

Teamsters is arguing that Amazon is a joint employer of the Battle Tested Strategies employees. This is because Amazon exercises significant control over the drivers, such determining their routes, setting delivery targets, and monitoring their performance.

There are many steps yet to be taken – the General Counsel filing a complaint, a hearing before an administrative law judge, a hearing before the NLRB, an NLRB decision, and possible review by a US Court of Appeals.

Unless there is a change in the membership of the NLRB, I expect the Board will side with the Teamsters.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)

Employment law pop quiz #13 – FLSA & jurisdiction

Can I opt in to a FLSA collective action without proving the court has personal jurisdiction over MY claim?

"No," according to a recent 7th Circuit decision. A court overseeing a collective action must secure personal jurisdiction over each plaintiff's claim, whether representative or opt-in, individually. Vanegas v. Signet Builders (7th Cir 08/16/2024) [PDF].

A Wisconsin resident brought a Fair Labor Standards Act collective action in federal court in Wisconsin against a Texas-based employer. He had hoped that other employees from various states outside of Wisconsin would opt in, to establish a nationwide collective action.

This will now be practically impossible. Each opt-in plaintiff has to prove that the court has personal jurisdiction over his or her claim.

The 7th Circuit relied on Bristol-Myers Squibb v. Superior Ct, 582 US 255 (2017). The only difference was that Bristol-Myers involved state court jurisdiction. But a federal district court in Wisconsin has no more extra-territorial jurisdiction than a Wisconsin state court would have.

FLSA collective actions are different from class-actions. In a class-action, the class itself is essentially the plaintiff. But FLSA collective action is no more than a "consolidation of individual cases, brought by individual plaintiffs."

One judge dissented, arguing that this outcome is not mandated by Supreme Court precedent or personal jurisdiction law.

Your results may vary. If you have this issue, consult a good employment lawyer.
(Not me, I'm an arbitrator.)