Recent Supreme Court decisions are creating significant changes in the practice of employment law. Hosted by Geoff Probst at the Florida Bar Annual Convention, Kevin Johnson discusses what lawyers need to know about these developments. They highlight recent cases and examine how Kisor vs. Wilkie affects the balance of power between courts and agencies. Later, they briefly discuss employment law developments around the classification of gig economy employees and the impacts of medical marijuana in drug-free workplaces.
Kevin D. Johnson is a shareholder of Johnson Jackson LLC and has represented management in labor and employment law matters for 25 years.
The Florida Bar Podcast
Florida Bar Annual Convention 2019: Employment Law Updates
Intro: Welcome to The Florida Bar Podcast, where we highlight the latest trends in law office and legal practice management to help you run your firm, brought to you by The Florida Bar’s Practice Resource Center. You are listening to Legal Talk Network.
Geoff Probst: Hello and welcome to The Florida Bar Podcast, recorded from the 2019 Florida Bar Annual Convention in Boca Raton, Florida. This is Geoff Probst and I’m the host for today’s show.
Today, we have joining us Kevin Johnson. Welcome to the show.
Kevin D. Johnson: Thank you. Good morning.
Geoff Probst: Kevin, before we get to our topic, an Update on Employment Law, why don’t you tell us a little bit about yourself, what you do and where you work.
Kevin D. Johnson: Sure. I’m an employment lawyer. I work at a firm called Johnson Jackson in Tampa, Florida, where we specialized in management side, labor and employment law. We’ve had that firm for about two years and we love nothing more than talking about employment law and trying to make sense of it for our clients and for anybody who might be interested.
Geoff Probst: All right, well you’re dealing with somebody who doesn’t have a knowledge base in employment law at all. So you’re going to have to go easy on me and if you can help me understand it, I’m sure the listeners will understand it as well.
All right, so I understand that you spoke recently and one of the things that you spoke about were some recent Supreme Court developments. Is that right?
Kevin D. Johnson: Yeah, so I just gave the Florida law update before the general practice solo and small firms section. And as part of that, I got up this morning, checked my email and found out that the Supreme Court had done me this great favor of putting out a whole new case that is really relevant and changes a lot of things for us.
Now, it’s not a true employment case, okay, it’s more of an administrative law case. It’s called Kisor v. Wilkie and so this morning, I got up and spent about 45 minutes reading this case and working into my presentation and I think I understand it well enough to try to summarize it for you.
Basically, what it comes down to is the balance of power between courts and agencies. So if an agency passes a regulation and it writes a regulation that maybe is ambiguous in some way, it doesn’t anticipate the details or maybe it uses the wording in a little bit of ambiguous way, how is the court going to solve that ambiguity? Does the court take the lead in deciding what the statute means and what the regulation means or does it give some deference to the administrative agency?
And for last, probably 30 years or so, we’ve had a tradition of giving a lot of deference to administrative agencies that was known as Auer deference, it was the name of the case that came out with it.
In Kisor v. Wilkie was a case was taken, because there’s been a lot of criticism of Auer over the last 20 or 30 years. People are saying it gives the administrative agencies too much power. And so the Supreme Court took it up, it’s very hotly contested case and ultimately, it decided to keep Auer around for now. But the details are what matter.
Geoff Probst: Okay, and so how do you see this affecting some of your clients in their day to day?
Kevin D. Johnson: So it can affect both employment law cases and other cases, because what it does is in the interest of trying to save Auer deference and not just uprooting something that’s been relied on heavily for 30 years, they’ve tried to say, we’re still going to have it around, but you’ve got to pay attention to some really important principles to preserve the court’s power when it interprets these cases.
And so they’ve given you sort of a list of the different types of things that they think matter. The first thing they say is the court before it ever resorts to giving deference to administrative agency, should start by applying traditional statutory construction, look at it, decide if you can figure out the ambiguity on your own accord and if you can’t, then you have to look at, look, is this a problem here where the agency is really using its expertise and doing what Congress intended it to do or is this more of the agency coming up with an interpretation that’s off-the-cuff or designed to advance its litigation position or not really within its area of expertise or maybe not something we should listen to because it reverses a bunch of other things the agency has said in the other direction over the last 10 or 20 years.
So all those factors come into play when you decide how much deference to give. So you asked about how it might affect my practice and I’ll give you one real good example. We do a lot of litigation for restaurants and one of the rules that applies to restaurants is something called the Tip Credit Rule. Basically says if you’re going to have a server, you can pay them less than the full minimum wage because they’re going to get enough tips to make up for the difference.
So the difference is called the tip credit. You can only do that if they’re actually working in what’s known as a tipped occupation and there’s some rules that go into how you define what a tipped occupation is.
Well, the Department of Labor is rightly concerned about the idea that maybe somebody who is unscrupulous would say look, I’m going to send my tipped server outside to do lawn mowing or janitor work, have them clean the bathrooms, clean all the grease out of the hoods in the kitchen, and I’ll pay them the sub minimum wage to do that gives me an advantage.
And so they passed a regulation, it’s called the dual jobs regulation. Well that says is you only get to take that sub minimum wage for the time they actually spend in their tipped occupation. If they’re actually doing janitor work, that’s a second job, you got to pay them full minimum wage at least for that second job.
Geoff Probst: It sounds like it gets very specific with a case-by-case factual analysis of what’s happening.
Kevin D. Johnson: Yes, it’s really critical if you’re trying to run a restaurant predict whether you can pay somebody a sub minimum wage or not. Where it gets complex is in passing that dual jobs regulation the DOL included an example. An example had to do with when a server does things like toasting bread or making coffee and it referred to those things as being related duties in the tipped occupation and so long as they’re doing those duties and they don’t become excessive in nature, then okay, you can still pay that employee the tip credit wage.
So Department of Labor issued another document okay, many, many years ago probably 35-40 years ago and it was called the Field Operations Handbook. I think it came out in ’88 actually, okay, and in that handbook, first of all, it’s a guide for their investigators. It’s not something gets through notice and comment rulemaking.
It basically says it should not be taken for interpretive purposes. It’s just an internal document and they said if you spend more than 20% of your time doing related duties that are not tip producing, you can’t be paid the sub minimum wage at all. So it’s not just that if you go to 21% of non tip producing duties, we take 21% out of your hours. It’s that you lose it all together. It’s a big punishment, very severe.
So you’re paying back that full tip credit for all the employees that you blew this on. It’s caused employers a lot of class action, collective action litigation and there’s been a lot of debate. The Circuit Courts of Appeal have taken it up and they have upheld this.
The problem with it is nobody knows what a tip producing duty is versus non-tip producing duty. There is no official DOL publication that tells what one is. If you talk to restaurant people they don’t even agree.
So very ambiguous and the courts have stepped in and said we’re going to handle that on a case-by-case basis, but we are going to continue to apply the 20% rule. Well Donald Trump is appointed – elected, he appoints some new people to the Department of Labor, the Department of Labor changes its mind and says, we’re going to put out a new opinion letter, a new Field Operations Handbook that says there’s no such thing as an 80/20 rule.
So now you have court decisions up to the Circuit Court of Appeals level that are built on that rule. So what happens, do you follow those Circuit Court rules and say they’re now interpretation of the regulation or is the fact that that lower level Field Operations Handbook went out the window, does that matter, does that undermine those prior cases.
And so as practitioners, we’re going to have to figure that out. We’re going to have to go back and look at does Kisor v. Wilkie mean that those Circuit Court opinions don’t have a good foundation and you have to revisit all of that or the people on the other side will argue, look it was just an interpretation of a rule and the Department of Labor didn’t give real strong reason for why they changed their mind on it.
So really complex.
Geoff Probst: So I’m guessing that as soon as you leave the Florida Bar Annual Convention, you’re expecting a number of phone calls from clients with lots of questions.
Kevin D. Johnson: I think we are going to have lots of questions as to how this impacts us, we have had a lot of clients have been watching this very closely, especially in the hospitality industry and it’s going to be a real open question as to how all this plays out. I think from my standpoint as someone who litigates in favor of employers, my argument would be that one of the things the Supreme Court said in Kisor, was you look at whether this was really the official statement of the agency.
And for a long time, it was just in a low-level document that was not labeled as being something should be given interpretive authority. And so, if that’s not what it was intended for, why is that the official position of the agency. They didn’t really make it their official position until briefing in the middle of a case that went to the Circuit Court of Appeals a couple of years ago.
So there’s an argument there that that’s sort of an ad hoc rationalization for what’s been going on, so it’s real complex.
Geoff Probst: So I’m guessing that when you agreed to speak on developments in employment law, you are not expecting some of the developments that you were going to have to talk about to be quite that recent.
Kevin D. Johnson: No that was a new one on me to have to deal with one that came out that morning to try to adjust, it typically happens.
Geoff Probst: But it sounds like you’ve got a good handle on it quickly. Are there other Supreme Court decisions relatively recent? Obviously, not that recent that we should talk about.
Kevin D. Johnson: Yeah, we’ve had a couple out there, one of the ones that was important although it’s sort of limited in its reach has to do with whether or not if you blow your deadline, okay, if you do not file a charge of discrimination that contains all the different theories that you’re going to rely on, let’s say you’re doing age, sex, religion and retaliation, but you only mentioned one of those in your charge of discrimination, can the defendant, the employer come in and say, you failed to exhaust your administrative remedies.
You never let EEOC have a chance to solve those other three types of issues. So the Supreme Court had a case that was out of Fort Bend okay and went up to the Fifth Circuit and what happened was the lawyers for the public employer litigated the case for about four years before realizing that the employee had missed filing two of those theories in their charge, as they raised basically a defense and they were saying that look, this thing is a failure to exhaust administrative remedies that goes to subject matter jurisdiction, because the subject matter jurisdiction you can bring it up at any time, so it doesn’t matter they were four years late in raising this.
And this the Circuit Court of Appeals said we agree and the Supreme Court said no, actually that’s not jurisdictional, because it doesn’t go to subject matter jurisdiction, you waiver that sucker, it’s a bad result for the employer, good result for the employee.
Geoff Probst: Yeah, yeah.
Kevin D. Johnson: But usually it’s not as groundbreaking as I think was originally represented. People that talked about that case made it sound like oh you never have to go to the EEOC anymore, you still have to go to the EEOC, because if the employer brings that up on a timely basis like most employers will, you will lose. So you better still go to the EEOC.
Geoff Probst: Interesting.
Kevin D. Johnson: Yeah.
Geoff Probst: All right, I know we’re running a little bit short on time, but there are at least two more things that I’d love for you to have an opportunity to discuss. So we have talked about developments with the Supreme Court. I understand there are some new developments with respect to the gig economy and the way employees are classified. Can you talk about that a little bit?
Kevin D. Johnson: Yeah, so we’re seeing some clarifications from both the Department of Labor and some other agencies in terms of who’s an employee, and who’s an independent contractor. And so the Department of Labor has just come out with a new task, and they focus on four different elements and what they’re saying is you look at whether the supposed joint employer has actual control, not just for the right to control.
Where that matters is if you think about a lot of the cases in which you get your employees from let’s say a PEO or a leasing agency, they might reserve some theoretical control over those employees but really you the main employer have the right to tell them what to do in a day to day basis.
So when the PEO or the leasing company is alleged to have been a joint employer and had some control over it, they now can say look, that control is really pretty theoretical, all we did was really run the payroll form so we should not be a joint employer.
So it makes a difference there and you’ll see things like that also coming up in terms of cases involving Uber and whether people are independent contractors. There’s an interesting case that just came out that involves the Super Shuttles at airports. And if you have written on SuperShuttle you know it’s the van that picks you up, and drops five or six people off on route into the downtown right?
Geoff Probst: Sure right.
Kevin D. Johnson: Those people apparently buy their own vans, they have a franchise agreement with the SuperShuttle Company and they have to follow a lot of really complex regulations from the airport. In this case Dallas–Fort Worth. And so the NLRB was the only case that had to do with whether they could unionize, if they were independent contractors they couldn’t.
And what the NLRB found was that if you took the common law test and you looked at all these factors, you really should focus on whether they had the opportunity to earn a living and to be entrepreneurial. They said they weren’t required to take all of the rides that are offered, they could be smart about which ones they picked up, they could be smart about what type of van they bought, they could be smart about how they maintained it, and they would have an opportunity to make more money than their competitors who were also franchisees just by virtue of that and that tipped the balance under what otherwise would be a pretty close case in favor of calling them independent contractors. So really relevant to Uber and people like that.
Geoff Probst: Very interesting. Well listen, we have time for one more topic, one more question, and I think employers and employees would be equally interested in this. So tell us a little bit about Medical Marijuana and the balance with a drug-free workplace?
Kevin D. Johnson: Sure. So Florida passed an Amendment to its Constitution a few years ago, providing and allowing for the use of Medical Marijuana and originally that did not involve smoking it, it only involved edibles and liquids and things like that. Because of the way the legislature actually implemented that amendment and so there’s been a lot of litigation over that.
So now recently Governor DeSantis has put forth and gotten the legislature degree to a new rule says, you can now smoke it as well. So what does this mean? Now that we have all this marijuana floating around and people finding medical uses for it, if they come into the workplace and they still have THC traces in their bloodstream, do they lose under the employer’s drug-free workplace policy, can the employer fire them? And the answer today it has been yes.
That the original legislation said it did not affect an employer’s right to take action against employees and to enforce its drug-free workplace. You know and especially to the extent involved with the use of marijuana in the workplace or the effects of marijuana in the workplace, which obviously we’re not going to want people come in and smoke at work, but what if you smoked over the weekend, and you have one of these licenses or cards, and you got your marijuana from a doctor’s prescription, and you come into work and you have to give the infamous pee in a cup. Can you be fired? Right now the answer is yes, but there are other states that have taken similar laws and have interpreted them in ways that would restrict an employer’s ability to do that.
So this may be an area for further development. It is certainly ones where employers are struggling right now to decide how tight they want to enforce their drug-free workplace policies, it also raised some questions if you think about FMLA or ADA, do I have to give someone leave, if their treatment consists of smoking marijuana. I have to give them time off to go do that? And the answer might be depending on how you look at this, yes you do. But then are they going to get fired if they immediately come back to work and they test positive. So we have a lot of really interesting questions we’re going to be sorting out over the next four or five years.
Geoff Probst: It sounds like there are a lot of significant developments and that they’re going to continue developing for some time.
Kevin D. Johnson: Yeah.
Geoff Probst: All right. Well it looks like we have reached the end of our program I want to thank Kevin Johnson for joining us today. If our listeners have questions or wish to follow up how can they reach you?
Kevin D. Johnson: So my email address is kjohnson@johnsonjacksonlaw, you can find our website on the web at johnsonjackson.com, we’re in Tampa Florida and we are always happy to talk to people about employment law.
Geoff Probst: That’s wonderful. Well, that’s all the time we have for this episode of The Florida Bar Podcast. Thank you to our listeners for tuning in.
If you like what you have heard, please rate and review us in Apple Podcasts, Google Podcasts, Spotify or your favorite podcasting app.
I am Geoff Probst, until next time, thank you for listening.
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