In this episode of The Florida Bar Podcast from the 2017 Annual Florida Bar Convention, host Laurence Colletti reviews updates in the field of employment with Kevin Johnson, including a couple specific cases and how they’ve affected the law. They include Schaefer v. Walker Bros, Mercedes-Benz v. International Union, UAW, and other cases that dive into topics like telecommuting, arbitration agreements, and overtime rules.
Kevin Johnson is a labor and employment law attorney with the law firm of Thompson Sizemore Gonzalez & Hearing in Tampa, Florida.
The Florida Bar Podcast
2017 Annual Florida Bar Convention: Employment Law Updates
Intro: Welcome to The Florida Bar Podcast, where we highlight the latest trends in law office and law practice management to help you run your law firm, brought to you by The Florida Bar’s Practice Resource Institute. You are listening to Legal Talk Network.
Laurence Colletti: Hello, welcome to The Florida Bar Podcast brought to you by The Practice Resource Institute on Legal Talk Network. This is executive producer Laurence Colletti recording from The 2017 Annual Florida Bar Convention in Boca Raton, Florida. It’s quite warm outside. Thank you for joining us today.
And you might notice that this is not Jonathon Israel or Christine Bilbrey, I am actually substitute hosting for them. They’ve got other convention duties and are a little bit busy today, and so they asked me to stop by and do this, and I was happy to oblige because I have Mr. Kevin Johnson joining us again on Legal Talk Network.
Kevin Johnson: Good morning.
Laurence Colletti: Good morning Kevin. So I think we’ve definitely interviewed you in the past and I think it’s always been Employment Law, is that right?
Kevin Johnson: That’s right.
Laurence Colletti: So how many years have you been doing the Employment Law Update at the Florida Law Update.
Kevin Johnson: I’ve been doing the Employment Law Update for probably about five or six years now, it’s been a lot of fun.
Laurence Colletti: Yeah, it seems like you enjoy it up there and I think this year was Bob particularly active from what I could gather and I caught just the tail in it, I didn’t get like the upfront part, but just by way of recap here there was just so many different topics that were brought up; age discrimination, you had remote workers and telecommuting, you had essential, but not routine side worker services, I mean, there was just a ton of things going on today. So, I guess, because you’re the expert where should we start?
Kevin Johnson: Well, let’s start with some of the ones that are probably going to be some of the most politically un-watched cases, certainly everyone’s going to be watching us in the cases that have gone to the Supreme Court about mandatory arbitration, and for those that aren’t familiar with it, those agreements are typically signed by employees when they start employment, and the employee agrees that they’ll take any claims arbitration instead of court of law, and employers have used arbitration agreements over the last several years that include a provision saying that the employee is going to give up the right to file in a class or collective actions in arbitration and that they will only litigate their own individual claims.
Well, over the last several years people on the employees’ side have pushed back against that and they’ve said that that’s a violation of the National Labor Relations Act, and you might be thinking, well, what does the National Labor Relations Act have to do with that, isn’t that that –
Laurence Colletti: I was thinking exactly that, Kevin.
Kevin Johnson: So, you know, the issue is National Labor Relations Act protects the right of employees to act in a concerted fashion to affect their terms and conditions of employment, and so typically that means getting together to go complain to the boss about how long the smoke breaks are, or about how long they have to work.
In this case this is something that might involve legal actions that are taking place long after they’ve left employment, but in some cases while they are still working there. If they’re suing for back wages, for example, and so, they’ve argued that it’s a violation of National Labor Relations Act to force me to give up my right to combine with other employees to sue about my wages, and that started to get some traction with some of the circuit courts.
In particular, the Ninth Circuit found that it was a violation of the NLRA and struck down Ernst & Young’s arbitration agreement. So Ernst and Young is now appealed to the Supreme Court there are two other cases that are going up at the same time and the court has agreed to look at this, and it’s really going to be a balance between the aims of the Federal Arbitration Act which are focused on trying to make arbitration a good forum, and one, that’s workable and efficient for both employers and employees versus the National Labor Relations Act. So the court is going to have to do some prioritize on there.
Laurence Colletti: So just for when I’m gathering here, it sounds like the employees are not like in the arbitration agreement, the employers like it, but there’s been some blow-back, but you and I did a little pre-game before the interview started and these class actions could potentially have a big impact on the service industry.
Kevin Johnson: They really do and I deal with a lot of restaurant clients and they’re very, very prevalent there because there are so many different compliance burgers under the Fair Labor Standards Act. It has so many different features that you have to get just right and not everybody knows all of them. So especially if you get one wrong and you get one wrong not just for one employee but for a whole class of employees that leaves you open to a collective action, and so, if you think about it in the restaurant industry in particular where you’re running very high labor costs, typically, if you look at how much — how many employees it takes you to generate a dollar of profit in a restaurant company versus how many it takes Apple to generate a dollar of profit, there’s no comparison.
So you have to really be careful because you have relatively low margins of profit, and so, if you’ve got a lot of things wrong with your wage an hour compliance and you’ve hit one of these big collective actions, it could really break you. So that’s why there’s so much focus on this and a lot of companies have used arbitration agreements as a way to say, let me insulate myself from that risk by at least agreeing that we’re going to deal with this on an individual basis, and the plaintiffs bar obviously makes a lot of money doing collective actions and they’re trying to push back and say, no, we need the freedom to represent these plaintiffs vigorously and really look out for their rights.
Laurence Colletti: So if I’m hearing you right, it’s very possible that the cost of my cheeseburgers are going to increase.
Kevin Johnson: Very well could, you’re seeing so much competition in that industry right now particularly as the fast casual people move in and now we’ve got UberEATS, so yeah, all of these things do have a direct relationship to the cost of your goods and your services, and so, if we have these additional litigation costs they will add the cost to that cheeseburger.
Laurence Colletti: Remote workers in telecommuting, now this is an issue near and dear to my heart because we have the way that our workplace works at Legal Talk Network, a lot of our employees work remote, and so we work in these collaborative environments third party and we collaborate share in remote locations from each other, it’s great, it’s a wonderful tool for us to work, but it sounds like this is beginning to kick up a little dust in the employment law arena.
Kevin Johnson: It is, it’s something that we’re seeing a lot more of. We get a lot of calls from clients about people that are proposing to telecommute. For some employers it’s a welcome development because they can cut down on their cost of providing workplaces just let people work from home, but for others they need those people there because they need to be part of a team environment, they need them there for customer service to interact or to be able to supervise them effectively, and so, for those employers having someone work from home means they are not under control and maybe they’re not as productive. So where you get into a lot of discussion about this is under the ADA, the Americans with Disabilities Act, because under the ADA a lot of people are asking for work from home as a reasonable accommodation, and so it comes down to a question of whether it allows them to get the essential functions of their job done if they’re working from home, and whether that’s a reasonable accommodation.
And even if you could say that it might be a reasonable accommodation, the employer typically has the option to provide a different reasonable accommodation that it thinks would work better and has the right to say you have to try my proposal first before you get the one you want.
So it really creates a lot of the opportunity for employers to really work with the attorneys and get some good advice on this.
Laurence Colletti: Yeah, I think it’s going to be a growing area just because it is so in today in the high speed Internet and just the nature of technology and collaborative software, it is very easy to work at home and at remote offices, and so, the need to actually physically be in the same room is decreasing, but I mean, I understand, it doesn’t apply for all forms of employment.
So next up, and we kind of hit this one a little bit, Shaefer v. Walker Bros.?
Kevin Johnson: Sure.
Laurence Colletti: And this was the side – the side work is a server case that you were talking about earlier.
Kevin Johnson: Right, it’s fascinating case to me. It’s actually out of the Seventh Circuit and it deals with a question of the servers and servers are generally tipped employees, they’re generally paid a sub minimum wage, an employer counts some of their tips to make up the minimum, and there are some conditions on that.
Number one is, they have to be able to keep all their tips, number two is, you have to give them notice of what the requirements are under the law, and number three is, you can’t use that sub minimum wage to have them do a whole bunch of unrelated work, so I can’t take advantage of my server by having them work as my janitor for 20 hours a week, those 20 hours as a janitor, I’ve got to pay them full minimum wage.
What’s happened is that there is a regulation called the Dual Jobs Regulation, it sort of codifies that. It says, if they’re working as a janitor they get paid full minimum wage.
The Department of Labor issued a provision of its field operations handbook a number of years ago, it’s been seized upon in recent years, and what that provision says is that even if they’re doing duties that are related to their tipped work, if those duties by themselves are theoretically non-tip producing, there has to be a 20% limit on them. So it creates real practical difficulties because all the employers are arguing that that’s not part of the law itself, it’s not part of the regulation, it doesn’t flow from the regulation, it’s not within the Department of Labor’s authority, and think about what it means from an employer’s perspective.
That means, for example, if I have you come in and start work as a server and you have to cut some lemons and make some ice tea that you’re going to serve your guests and maybe wipe the booth that the previous guests left a little messy so they don’t sit in a pile of ketchup. All right, that theoretically is work that may help you earn tips down the road, but of course, the employees can argue, that’s not tip producing, they didn’t hand me a dollar bill for doing that, I got a dollar bill for how I worked with them at the table and how I helped them order, and so that you have to count that against my 20% limit, if I spent too much time making tea, cutting lemons or rolling silverware, then I’m out of the tipped employee wage, you have to pay me full minimum.
It’s a huge problem, because if you imagine that that’s really the way it works, then the employer is going to have to be in the business of following behind the employees with stopwatches trying to count how much time they spent cutting the lemons and making the tea versus time spent at the table. It’s really impractical
Laurence Colletti: It sounds like an area that the law threw a big monkey wrench into what was working relatively smoothly before.
Kevin Johnson: We tend to do that as lawyers, we get creative, we sort of follow things to the Nth degree in the logical extension and they found that one provision in the Department of Labor handbook, that is an area that sparked a lot of litigation particularly a lot of collective actions. It’s going to be a high priority I think for employers with this new administration to try to get some clarity as to what that means and how it should be interpreted. So look for change in that area.
Laurence Colletti: I think both sides of an argument have got good and valid points, and I certainly worked in the service industry, tip based positions, the work, the expectations versus the people maybe working in the back in the kitchen, and that’s a tough one, and I think that just administratively just creates a nightmare perhaps a software solution out there for some developer, I don’t know.
Kevin Johnson: They can wear body cameras.
Laurence Colletti: Everyone else does.
Kevin Johnson: You punch a button when you move from tip producing to non-tip producing.
Laurence Colletti: There you go, there you go.
Kevin Johnson: So let’s hope technology can be our savior because it’s a bear right now for the employers.
Laurence Colletti: Yeah, I know, actually I mean, I kind of said that tongue-in-cheek but actually some software, some development there might actually help a little bit with that.
Kevin Johnson: Yes.
Laurence Colletti: So I wanted to touch on the Union membership and the solicitation, so this is the Mercedes v. International Union, UAW.
Kevin Johnson: Right, and this is a case that had to do with what are called non-solicitation and non-distribution rules, and everywhere you go you might see a little sign outside a door of a store saying, no solicitation or no distribution, that’s because they don’t want union agents coming in and soliciting their employees. All right, what about the employees who are already there? What if some of them have Union sympathies and they might want to hand out some flyers advertising union meeting or they might want to talk to someone about the idea of, hey, wouldn’t a union be good here? Generally speaking, the employer can prohibit them from having conversations like that on their work time or with someone else who’s on their own work time, but if it’s a coffee break or at lunch, you can talk to them all you want with some very limited exceptions there.
Now, the other thing has to do with distribution. So if you’re handing out materials the employer can say, look, I don’t want flyers getting dropped on my work floor and creating this huge litter problem, so if you’re going to distribute materials that has to be in non-working areas. So this case involved what Mercedes-Benz called team centers, which were sort of like, mixed use areas, they might use it as a lunch room during lunch time, but the rest of time they were there working computers or doing business-related stuff, and the court said, look, to the extent Mercedes was trying to bar people from having solicitation in these areas during non-working time, that’s clearly wrong, you’ve got to let them talk to each other when they’re not working.
But as to the distribution, it depends on whether that’s a permanent, mixed work or mixed use area or whether it’s converted, it just a very esoteric distinction, but the gist of it is, look, if most of the time it’s a work area and the employees can’t do stuff in there that’s personal they can only do that during the lunch hour, then you can ban distribution there during the time it’s being used for work, but you can’t ban it during the limited period of time that’s used for non-work. So again, this stuff gets down to very esoteric distinctions.
Laurence Colletti: That sounds really complicated.
Kevin Johnson: So the nature of the NLRB, that’s why employment lawyers continue to remain in business even after all these years.
Laurence Colletti: Oh, yeah, I mean, the facts of each case could really change result there, I mean, that is a very fact-driven point.
Kevin Johnson: It is and particularly with National Labor Relations Act the last several years have seen the Obama administration really push in the direction of trying to regulate non-union workplaces which they typically had left alone but they’ve done this by really setting restrictions on different employer policies that might affect employee desires to unionize. And I think that’s something you can look for a lot of political change on in the next couple of years because it’s really gotten to a point where a lot of employers would argue that it’s gone too far, there’s your guidance out there that says you can’t tell people in the handbook that they have to be nice to each other, because sometimes when you’re having an argument with your boss over the terms and conditions of work, you might not be nice, but you’re still protected by the NLRA.
Laurence Colletti: Do you have that in your handbook, Kevin?
Kevin Johnson: Luckily we’re six weeks old, we’re still drafting our handbook.
Laurence Colletti: Okay.
Kevin Johnson: Hopefully it’ll change by then because we want our employees be nice to each other. Of course employers, right?
Laurence Colletti: Yes, exactly.
Kevin Johnson: When they think that that’s something you couldn’t put your handbook, but if it’s not clear and it might be interpreted as chilling concerted activity, the NLRB currently takes the position that that’s wrong, which is just a shock to most employers.
Laurence Colletti: Oh my goodness, oh my goodness. It sounds very complicated once again.
So I got three more questions for you, so, the first two, they had to do with which you closed your segment out with — you started with things that attorney should be watching out for this year, and so my second question is going to be about predictions, but let’s start with that, what should attorneys working in the employment law space be looking at for?
Kevin Johnson: One thing everyone’s going to have their eye on is what the new Department of Labor under Trump is going to do about the overtime rule because most people are aware that last fall we thought we were about a couple days away from the Department of Labor implementing a new rule for what are called White Collar Employees, the professional, the administrative, the executive employees, and that was going to raise the minimum amount of salary you had to pay them to roughly the $47,000 range, and if you were below that you were just strictly ineligible, you were going to have to be put on overtime and you could no longer be treated as a salaried exempt employee.
Laurence Colletti: We’re going to have some non-employment law lawyers listening to this just by defaults, The Florida Bar Podcast and so could you walk me through that a little bit, I mean, so that this is a new area where you’re being considered. This is salaried versus hourly.
Kevin Johnson: So everyone thinks about it. When you’re starting your own business you’ve probably heard, oh, if I don’t want to pay overtime I can just put someone on salary and I’ll be fine. Well, there’s a caveat to that. You can put them on salary, but they have to have the right duties to be eligible to be exempt, and those — the white collar exemptions all about what those duties are, for example, to be an exempt executive employee you’ve got to supervise two or more people, that management has to be your primary duty, you have to be involved in hiring and firing, and there’s similar types of duties requirements for the other exemptions.
But what the old administration was doing was saying that regardless of what duties you have if you’re not paid enough we’re not going to let you be exempt from overtime, and that was a change, and the Eastern District of Texas struck that down and said that that was inconsistent with the language of the FLSA because the FLSA itself had always spoken about these categories in terms of their duties and not in terms of the wage threshold.
So we’re going to watch to see what Trump does with that. My guess is that Trump and his DOL will pull back from that rule. They are probably going to have to develop a new rule to try to address some of that because that’s going to be the big question. Do we just leave it alone, do we leave those regulations where they were, where does the administration go with maybe a modified version of them and invest the time and energy to go through notice and comment rule-making on that, but I will bet that they are not going to defend these things before the Supreme Court.
Laurence Colletti: That is a big one. That is a big one, I mean, financially for businesses around the country that is enormous.
Kevin Johnson: It does make a huge difference and you’re already seeing switches in the Trump’s position on certain issues. We talked about the mandatory arbitration cases. At the lower court level before the Ninth Circuit the prior administration’s Department of Labor filed amicus briefs in support of the employees. The DOL has now filed amicus brief on the other side, taking the exact opposite position and emphasizing the Federal Arbitration Act over the NLRA, and at this time they’re supporting the employer before the Supreme Court. So you’re seeing the effects of politics on how labor law and employment law comes out.
Laurence Colletti: Wow. So Kevin, what were some of the other areas that attorneys need to keep their eye on?
Kevin Johnson: We are certainly going to be watching for that regulatory impact on things like arbitration. I think what we’re also seeing is some continued development by the courts in the area of sex discrimination, in the area of what happens with transgender employees, what happens with employees who have a sexual orientation that’s not heterosexual and we’re seeing a lot more willingness to cover them under Title VII which previously was thought only to cover sex and not to reach out to the level of covering transgender.
So I think you’ll see more legislative development of that as a reaction to those cases either saying that we are going to go ahead and say that sexual orientation and transgender status are covered or there’s going to be a renewed push in the legislature to see if they can get a supplemental act through like the Employment Non-Discrimination Act.
Laurence Colletti: Okay, I think we ought to close things out with predictions, so obviously, you’re in the space and you’re seeing a lot of developments and there’s a new administration in office in the executive branch, and obviously, there’s going to be some changes, so where do you see things going in terms of employment law?
Kevin Johnson: I think you’re going to see a lot more activity over local ordinances and State laws, because to the extent that the employee advocates are frustrated by the current United States Legislature they’re finding they might have a more receptive audience and that the State houses or in local communities particularly in urban centers that vote heavily Democratic, and they’ll pass things like living wage ordinances or things that are essentially employment laws and what that does is create sort of a patchwork of regulations and you’re seeing a battle over whether states can pass laws that say, our liberal cities should not be able to pass those laws. We are going to have one law that’s at the State level that preempts, for example, a city from passing a living wage ordinance. You’re going to see a lot more of a battle over the politics of that. It’s going to be the democratic laboratory in action.
Laurence Colletti: Interesting, interesting, well, just one last question for you, Kevin, before we sign off. For listeners out there they want to follow up and learn a little bit more, how can they reach you?
Kevin Johnson: My email is [email protected], so I look forward to talking all of them because you can tell I love talking about this stuff.
Laurence Colletti: Well, it’s been another edition of The Florida Bar Podcast, brought to you by The Practice Resource Institute on Legal Talk Network. I want to thank our guest, Kevin, for joining us, and if you liked what you heard today please find us and rate us in iTunes. I’m Laurence Colletti, until next time thank you for listening.
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