Back to Square One at the NLRB

The National Labor Relations Board (NLRB) is left wondering what is going to happen after the Supreme Court invalidated three appointments by President Obama.

On January 4, 2012, President Obama made three NLRB member recess appointments. The United States’ Constitution has a clause that allows the President to make appointments without Senate approval when the Senate is in recess. Therefore, when the Senate went into recess in 2012 and there were three vacancies on the National Labor Relations Board, President Obama decided to appoint new members to fill the empty seats. However, the Supreme Court has reasoned that these appointments are invalid because the Senate was not truly in a “recess” when it did not meet from January 3-6, 2012. The Opinion states, “Three days is too short a time to bring a recess within the scope of the Clause.”

Now that these appointments have been deemed invalid by the highest Court, the NLRB is scrambling to determine what the future holds for the approximately 436 decisions made during that time. Notably, one decision that is now in question changed the workplace landscape by protecting workers from being fired for complaining about their employment on social media. However, while all cases are now invalid as only two properly-appointed members of the five-member board were in attendance (at least three valid members would need to be in attendance to allow the decisions to stand), it is unclear if the cases will be decided the same way if and when they are reconsidered.

If you have any questions regarding the National Labor Relations Board and their decisions, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Massachusetts Governor Signs New Law Increasing Minimum Wage and Reforming Unemployment Insurance System

This morning Governor Deval Patrick signed a bill, previously discussed here, into law that will raise the minimum wage in Massachusetts gradually from $8 per hour to $11 per hour by 2017 and will make changes designed to stabilize unemployment taxes. This bill also increases the minimum wage for tipped employees from $2.63 to $3.75 by 2017.

The first change we will see is in January 2015 when the minimum wage will increase to $9 per hour and the tipped employee minimum wage will increase to $3 per hour.

In 2016, the minimum wage will increase to $10 per hour and the tipped minimum wage will increase to $3.35 per hour. The final scheduled increase will be to $11 per hour in 2017 and $3.75 per hour for tipped employees. After 2017, the minimum wage will increase every year at the same rate as the consumer price index.

In addition to increasing the minimum wage, this new law will also freeze unemployment insurance rates for employers for three years and will extend the period the Department of Unemployment Assistance reviews an employer’s usage of unemployment insurance benefits from one to three years.

If you have any questions regarding the minimum wage or other wage and hour law issues, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Connecticut Makes Employer-Friendly Changes to Paid Sick Leave Statute

In 2012, Connecticut became the first state to mandate employers to provide paid sick leave to their employees. Under the current legislation, any employer with 50 or more employees in Connecticut are required to provide 40 hours of paid sick leave per calendar year to non-exempt “service workers.” “Service workers” are specifically identified in the statute as employees engaged primarily in an occupation within one of the occupation code numbers and titles, as defined by the federal Bureau of Labor Statistics Standard Occupational Classification system, and who are paid on an hourly basis or are otherwise not exempt from the federal Fair Labor Standards Act (FLSA) minimum wage and overtime requirements. Each service worker accrues one hour of paid sick leave for every 40 hours worked and employees may accrue up to a maximum of 40 hours of such leave per calendar year, which may be carried over from one year to the next if unused.

Employers should be aware of a few important changes to Connecticut’s Paid Sick Leave Act, which will go into effect on January 1, 2015. Under the current law, an employer must pay sick leave to employees if it employs 50 or more employees during any quarter during the previous calendar year. The new act will streamline this eligibility requirement by requiring employers to determine if they meet the 50-employee threshold based on the number of employees on payroll during the week of October 1 the previous year. This amendment will have a positive impact on employers that experience seasonal fluctuations in their workforce, but otherwise would not meet the 50-employee threshold during the majority of the calendar year.

It is worth noting that the amendments also include a penalty provision for any employer who attempts to avoid meeting the 50-employee threshold by temporarily transferring employees from one location to another outside of Connecticut or dismissing employees before October 1. However, neither the current law nor the new amendment provide workers with a private right of action to sue for violations of this law, and instead only allow for workers to file a complaint with the Connecticut Department of Labor. In order to avoid a perception of impropriety, employers should carefully document explanations for any personnel changes that might result in a fall in payroll to below 50 employees.

Additionally, the amendments will allow for some flexibility for employers in determining the timeframe for accruing paid sick leave. Under the current law, employers must pay qualifying employees 1 hour of sick leave for every 40 hours worked during the calendar year, beginning January 1. However, the new legislation allows employers to start the benefit year on any date the employer uses to calculate employee benefits, rather than limiting employers to a January 1 start date. This will allow employers to streamline their benefit packages, with all benefits beginning on the same start date.

Finally, employers should be aware that the amendment will expand sick leave pay to cover radiologic technologists, who were not previously included on the list of service workers who qualify for paid sick leave.

If you have any questions regarding paid sick leave, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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New Proposed Policy About Who is Family Under the Family and Medical Leave Act

The Department of Labor recently announced a proposal to extend protections of the Family and Medical Leave Act (FMLA) to all eligible employees in legal same-sex marriages across the country. The proposal came in light of the United States Supreme Court’s decision in U.S. v. Windsor, which struck down a provision under the Defense of Marriage Act (DOMA), which narrowly interpreted “marriage” and “spouse” only in the context of opposite-sex couples.

Under current federal law, the definition of “spouse” only applies to same-sex couples residing in states which recognize same-sex marriages. The proposed change would amend the definition of “spouse” under FMLA to allow all eligible employees in legal same-sex marriages to take FMLA leave to care for a spouse or relative regardless of which state the employee resides.

In a nutshell, FMLA protections will not be based on the law of the state where the employee resides, but rather on the law of the state where the marriage took place. For example, if an employee got married in Massachusetts but currently resides in Georgia, a state which does not recognize same-sex marriages, under the current proposal, he or she would be eligible to take FMLA leave to care for his or her spouse.

Once this proposal is finalized, employers should review their FMLA policies and procedures to ensure compliance with these changes in the law. If you have any questions regarding your obligations under FMLA please contact any of the attorneys at Royal LLP at (413) 586-2288.

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One Last Stop Before the Minimum Wage Increases

The Massachusetts House of Representatives and the Massachusetts Senate have both passed a bill that would raise the state’s minimum wage to $11 an hour by 2017. The bill is currently sitting on Governor Duval Patrick’s desk waiting for his signature. If the Governor signs this bill into law, the new minimum wage for non-tipped employees will be $9 an hour on January 1, 2015 and the minimum wage for tipped employees will increase from $2.63 an hour to $3.75 an hour.

If you have any questions regarding wage and hour law, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Beware Acting on Complaints without Proper Investigation

The United States Court of Appeals for the First Circuit recently held in Valazquez-Perez v. Developers Diversified Realty corp. that an employer can be liable for sex discrimination under Title VII of the Civil Rights Act of 1964 (Title VII) for terminating an employee because of criticisms of a spurned co-worker intent on revenge, even though the employee was not the Plaintiff’s supervisor.

According to the plaintiff in this case, he and a female co-worker enjoyed a flirtatious working relationship for almost a year. However, when the co-worker attempted to initiate a romantic relationship during a business trip, the plaintiff rejected her advances. At this time the co-worker began to harass him, threaten to have him fired, send angry and suggestive emails, criticize him to his supervisors, and provided a detailed memorandum of her complaints and recommendation that he be terminated to company officials. During this time, the plaintiff complained about his co-worker’s actions to his supervisor who responded by instructing him to send her a “conciliatory email” because if he did not she was going to get him terminated. The plaintiff’s supervisor also jokingly suggested that the plaintiff should have sex with the jilted co-worker. Soon after, the plaintiff was terminated for absenteeism, failure to report, and unsatisfactory performance.

The plaintiff filed a lawsuit alleging sex discrimination and hostile work environment in violation of Title VII. The Federal District Court granted summary judgment against the plaintiff and he appealed. The First Circuit found that the employer could be liable under Title VII for allowing the female co-worker’s discriminatory acts to cause the plaintiff’s termination. The First Circuit stated an employer “should be liable if it fires the victim based on complaints that it knew (or reasonably should have known) were the product of discriminatory animus.”

This case serves as a reminder to employers to carefully investigate all claims by employees before taking adverse action to ensure that discriminatory animus doesn’t impact an employer’s decision. To prevent similar claims employers should properly investigate all complaints and properly train all supervisors in how to handle employee complaints.

If you have any questions regarding sex discrimination and hostile work environment harassment, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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Inevitable Disclosure Doctrine Not Viable Substitute for Non-Competition Agreement

Last month, the United States District Court for the District of Massachusetts made it clear that a non-disclosure agreement and an argument that employment for a competitor would inevitably require disclosure of trade secrets does not offer the same protection as a non-competition agreement. In the case leading to this decision, a medical device manufacturer attempted to use a non-disclosure agreement to prevent a former employee from working for a competitor. The former employer argued that since the employee would be doing strikingly similar work, disclosure of materials and information relating to operation procedures, products, design specification, trade secrets, research, development or marketing plans would be inevitable and such disclosure would violate the non-disclosure agreement.

The court determined that this was not sufficient to restrain the former employee from working for a competitor in the absence of a non-competition agreement. However, the court did order the employee not to use or disclose “Proprietary Information” of the former employer to the new employer and ordered the employee to return all “Proprietary Information” to his former employer.

This case highlights the need for carefully worded restrictive covenants. Whether it is for non-solicitation, a non-competition, or a non-disclosure; the importance of specificity and accuracy cannot be understated. To ensure an agreement will be effective and valid, it would behoove all employers to contact employment counsel prior to drafting or using any agreement.

If you have any questions regarding the restrictive covenants, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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One Step Closer to a Higher Massachusetts Minimum Wage and More Stable Unemployment Taxes

Yesterday, Massachusetts took one more step in the long journey to raise the minimum wage and to reform the state’s unemployment insurance system. The Senate voted on the House of Representatives’ bill addressing these issues and replaced language in the House’s bill with language the Senate has already voted to implement. Previously, the Massachusetts Senate has addressed these two issues separately while the House of Representatives has compiled their plans on these two issues into one bill in hopes of gaining more support. Although the House and Senate are like-minded on these issues, their bills do have significant differences.

In November, the Senate passed its bill that would raise the state’s minimum wage to $11 an hour with economic indexing provision that would raise the minimum wage every year at the same rate as the consumer price index starting in 2016. The House’s bill proposing a minimum wage increase would raise the minimum wage only to $10.50 an hour and contained no economic indexing provision.

Then in February, the Senate passed a bill proposing a reform of the state’s unemployment system that would stabilize rates for employers over a four year period and prohibit senior officers or owners of a company from laying themselves off, collecting unemployment, then re-hiring themselves. The House’s bill would also stabilize unemployment rates for businesses and would create a Massachusetts employment fund to pay for job training for unemployed or underemployed workers.

While the Senate and House are moving in the same directions on both of these issues they have set different standards. While it is clear some form of these bills will likely become law, it is unknown which version will reign.

If you have any questions regarding the minimum wage or unemployment insurance, please contact any of the attorneys at Royal LLP at (413) 586-2288.


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H1B: One More Hurdle to Creating Your Dream Team

This past Tuesday thousands of applications were submitted for coveted H1B visas. These visas are necessary for U.S. employers who want to hire high-skilled foreign workers. The majority of these applications are for workers with advanced degrees and many have graduated from United States’ universities.

Unfortunately, even if you believe you have the best candidate for your company IN THE WORLD, there is still no guarantee they will be awarded the visa you spent hours filling out. Approximately half of all H1B visas will be rejected randomly by a computer-generated lottery. More unfortunately, this percentage of rejections will likely only increase in the future as the baseline annual limit remains at the same level set by Congress in 1990 but the demand for H1B visas is increasing.

Even with this difficult obstacle to hurdle, employers should still apply for a visa for the excellent candidate from a foreign country. To give your company the greatest chance of approval for an H1B visa, make sure you get it in on time and it is correctly filled out. The next deadline for H1B visas is April 1, 2015. These applications are complex and complicated and it would be wise to consult with employment counsel during this process.

If you have any questions regarding foreign employees, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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A Whole New Game: College Athletes Are Employees

The National Labor Relations Board (NLRB) has decided that Northwestern University athletes are employees of the University and, as such, are allowed to form a union. The athletes claim they just want a seat at the table to discuss issues. However, the NLRB only allows employees to form unions; therefore, it was imperative that the “student-athletes” were deemed employees.

The NLRB defines an “employee” as “a person who performs services for another under a contract of hire, subject to the other’s control or right of control, and in return for payment.” The athletes are compensated with scholarship packages worth over a quarter-of-a-million dollars during their time at the university, Northwestern earned about $235 million in revenue from the athletes’ efforts between 2003 and 2012, and the athletes are subject to complete control in their duties as football players. For these reasons, the NLRB regional office determined these athletes were employees.

This decision will likely have widespread consequences on and off the field. Now athletes may be eligible for worker’s compensation for injuries from training or a game, may be entitled to wages under the Fair Labor Standards Act, or the University could become subject to unemployment insurance laws. As the first quarter ends the crowd is left to wonder “who else might be an employee?”

But these players shouldn’t plan their touchdown dance yet. This game is going into overtime as Northwestern plans to appeal this decision.

If you have any questions regarding employee classifications, please contact any of the attorneys at Royal LLP at (413) 586-2288.

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