This year is shaping up to be a dynamic one in labor and employment law. From changes to minimum wage and overtime protections to large-scale Equal Employment Opportunity Commission (“EEOC”) investigations, there are several seminal cases to watch in 2016.
1) New Rule for Overtime Pay
As discussed in our Client Alert last month, the U.S. Department of Labor (“DOL”) has proposed amending the rules that govern overtime for salaried workers under the Fair Labor Standards Act (“FLSA”) by more than doubling the salary threshold for mandatory overtime coverage. If the rules are revised as anticipated, this year about 5 million more American employees may be eligible for overtime wages—and, as a result, employer payrolls and personnel expenses will balloon.
Under the proposed DOL regulations, the salary at which workers become exempt from overtime will jump to $50,440—nearly the median U.S. household income. All employees earning less than the threshold will now be eligible for overtime pay, thus sweeping in some managers and supervisors into the overtime-eligible pool.
If the proposed regulations go into effect, nearly all employers will see a very tangible impact on their workforces and costs. Employers should prepare for the potential impact of the new rules, including considering reducing employee hours to trim overtime costs, restructuring your workforce salaries to minimize exempt workers, reclassifying workers as non-exempt, and enforcing stricter rules prohibiting overtime. Our L&E Team can help evaluate your options to make the best decision for your bottom line.
2) More “Systemic” Investigations by the EEOC
Coming off a year of big wins, the EEOC is expected to continue its push for large-scale, or “systemic,” investigations of workplace bias, rather than individual investigations. Building on its momentum from its win in the high-profile U.S. Supreme Court decision regarding religious accommodation in the workplace, the EEOC is expected to push through broad investigations into areas such as LGBT rights and pregnancy bias claims.
The reason for such systemic investigations is because they are far more likely to result in litigation—and employers should be prepared.
While individual investigations tend to land an employer in court 5% of the time, systemic investigations meet the “reasonable-cause” threshold more than a third of the time. Commission Chairwoman Jenny Yang recently stated in the EEOC’s budget report that the systemic investigations and cases are a key part of the EEOC’s strategy for 2016, because they address workplace discrimination on a broader scale: across an industry, geographic area or profession. She added that larger investigations are an efficient use of the Commission’s resources, targeting conduct and practices with a broad impact.
This expanded focus means that employers should review their policies and be ready to readjust to defend against increased EEOC scrutiny.
3) A Potential Boost for Big Labor
A seminal labor case to be decided in 2016 is Miller & Anderson Inc., before the National Labor Relations Board (“NLRB”), which could bolster unions’ ability to organize bargaining units.
The case involves a sheet metal workers union that petitioned to represent construction workers jointly-employed by electrical and mechanical contractor Miller & Anderson, Inc., and Tradesmen International, a staffing firm. Under the current standard, employers must consent in order for unions to organize bargaining units that include both workers solely employed by the company and jointly-employers workers, like those supplied by staffing firms. Often, jointly-employed workers don’t get the same terms and conditions of employment as the solely-employed workers—thus opening the door to considering union representation in the first place.
If the Board abandons the employer consent requirement, it could allow only one of the companies to assent to a collective bargaining agreement that would affect all workers—both from the staffing agency as well as those employed solely by the user company.
The effect? Unions are more likely to win collective bargaining disputes because of the expanded definition of the bargaining unit.
The NLRB has received a high volume of amicus briefs, as the ruling will affect staffing contractors and the companies who use them. A decision is expected sometime this year.
4) Wage & Hour Watch: An “Injury” Without an Injury?
Can a plaintiff move forward with a class action if some of the individuals in the purported class have not suffered any harm?
In November, the U.S. Supreme Court heard oral argument on this question, considering whether courts can certify class and collective actions that cover non-injured members. The outcome of the case, Tyson Foods, Inc. v. Bouaphakeo et al., will have a significant impact on the continued viability of class or collective actions to decide wage and hour lawsuits, as well as the size of classes bringing employment-related claims under the FLSA, Equal Pay Act and Title VII.
The case presents an ideal opportunity for the justices to either bless or forbid class actions that rely on a composite—or average—plaintiff, also known as “trial by formula.” This issue resuscitates the infamous 2011 Dukes case, in which the Court rejected “trial by formula” when it prevented the plaintiffs’ attempt to try the claims of only a subset of class members, and then extrapolate the rulings to the wider class without further individualized proceedings. Despite Dukes, the Tyson trial court allowed the plaintiffs to prove both liability and damages via a statistical “average” class member, thus permitting plaintiffs to include in their class definition members who, the plaintiffs concede, were never actually injured.
Tyson is challenging the resulting $5.8 million judgment (upheld by the Eighth Circuit) against the company to compensate workers for time spent donning and doffing protective gear and walking to their workstations. Tyson argues that the lower court erred in certifying the class, asserting that Dukes’ streamlined standard for class certification controls.
However, during oral argument, the U.S. Department of Justice told the justices that the jury was properly instructed that if it found that all the workers’ activities were similar, then it could find classwide liability—which it did.
The implications of the Court’s ruling on statistical sampling could be far-reaching for employers, affecting plaintiffs’ ability to bring not only wage-and-hour lawsuits, but also Title VII and Equal Pay Act cases. A ruling is expected this year.
5) Increased EEOC Scrutiny on Social Media Policies
Social media issues should already be on employers’ radars, especially in light of the NLRB’s ruling last year that Facebook “likes” constitute protected activity. Now this year, the EEOC is joining the fray and is expected to scrutinize employer restrictions of employees’ social media use.
In December, at a meeting of the EEOC’s Select Task Force on the Study of Harassment in the Workplace, the Commission discussed how social media can be used as a positive platform for workers’ rights, such as spreading an anti-harassment message or bringing complaints to the attention of the public. The EEOC has also held other meetings addressing how social media platforms serve as a kind of “modern day watercooler,” affecting the workplace in areas such as recruitment and hiring, harassment, records retention and litigation. Experts expect the Commission to focus on employers’ use of social media against such watercooler activity. Areas of potential scrutiny include social media activity perceived as restricting employees’ social media rights in a way that could inhibit their ability to use it for reporting harassment and other discriminatory behavior. The Commission has suggested that this could constitute the employer attempting to “resist” employees’ rights to complain about discrimination, therefore opening the door to a “resistance” cause of action against the employer.
In light of these developments, the L&E attorneys at LeClairRyan can help employers shore up their social media policies to strike a balance between lawful restrictions on employee social media conduct, without crossing the line to unlawfully resisting your employees’ protected activity.
6) The Case Against the Union “Ambush Election” Rule
Another labor-side case we’ll be watching is a Fifth Circuit challenge to the NLRB’s rule streamlining the union election process.
The rule, which took effect in April, made a few significant changes to NLRB procedures, including eliminating a 25-day delay between the time a regional director initiates an election and the election itself, thereby delaying the employer’s challenges to voter eligibility issues until after the election is held. The change has been dubbed the “ambush election” rule because it gives unions a mechanism to quickly gain representation, before management is able to mount an effective challenge.
NLRB data regarding the first six months after the rule took effect shows that union elections have happened faster than ever, decreasing to about 32 days from petition to election from a median of 67 days from petition to election during the same period in 2014.
On the other hand, unions argue that the shorter election process will not negatively impact employers’ anti-union campaigns, as they allege employers essentially have a captive audience already.
The Associated Builders and Contractors of Texas appealed the dismissal of their lawsuit to the Fifth Circuit after the District Court ruled that they failed to show that the rule on its face violated either the NLRA or the Administrative Procedure Act. The outcome of their appeal could have a heavy impact on unionized employers’ future ability to challenge NLRB elections.