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A former personal assistant of Lady Gaga recently filed a lawsuit against the entertainer’s touring company claiming that she was improperly denied hundreds of thousands of dollars in overtime pay under both the Federal Fair Labor Standards Act (“FLSA”) and New York state law. O'Neill v. Mermaid Touring Inc., Civil Case No. 11-9128 (Southern District of New York, Dec. 14, 2011).  In support of her allegations, the former assistant claims that her position did not qualify for the “administrative exception” to overtime laws because she did not exercise any significant independent discretion or judgment in her role while she, essentially, worked around the clock in exchange for a fixed salary.  Although the assistant worked a mere 13 months for the pop star and was well-compensated for the position (pursuant to the complaint, she was initially paid $1,000 per week and, subsequently, an annual salary of $75,000), she claims that she was on call 24/7 to handle tasks that did not require any independent discretion or judgment and, accordingly, is seeking $380,000 in back overtime compensation for 7,168 overtime hours that she allegedly worked in the star’s home and while touring and traveling with her around the world. 

Cases such as these tend to catch our attention either because of the large amounts of money sought and/or because of the celebrity involved, but often their significance to more typical employment relationships goes unnoticed. 

Regardless of the ultimate merits (or lack thereof) or outcome of the lawsuit, the case illustrates two wage and hour issues that employers should be cognizant of: (1) the administrative exemption to overtime; and (2) the ways in which non-exempt, on-call employees should be compensated and/or treated.

Administrative Exemption to Overtime
Under the U.S. Department of Labor (“DOL”) regulations, an administrative assistant who is paid on a salaried basis and exercises significant independent discretion and judgment is exempt under the "administrative exemption." 29 CFR § 541.203(d). This exemption also applies to employees who exercise significant independent discretion and judgment in performing "office or non-manual" work. Challenges to the applicability of the exemption to executive or personal assistants are not uncommon.  Although some courts have expressed reluctance to rule that well-compensated individuals providing such assistance do not exercise "discretion and independent judgment,” case law remains unclear.

Non-Exempt, On-Call Employment
This case also serves as a reminder that on-call employment must not unduly restrict a non-exempt employee’s ability to spend his or her time away from the job.  The amount of restrictions imposed on a non-exempt, on-call employee’s time not at work will be considered in determining whether or not an employee should be compensated for on-call hours.  For example, if required to remain on an employer’s premises or within such a close distance that prevents the employee from using his or her time effectively or freely, the employee may be eligible to receive overtime pay under wage and hour laws. 

The Take Away
Compliance with wage and hour laws requires an understanding of what it means to be exempt or non-exempt from overtime obligations.  Further, employers of non-exempt employees are often unaware that some requirements of the positions may trigger payment/overtime obligations.  For example, if a non-exempt employee of a marketing group is required to attend networking events outside of normal working hours, such time must be paid.  Similarly, a building superintendent who lives at the building and is required to be “on-call” at all times may have to be compensated for all such “on-call” time if he is not permitted to leave the building (or travel beyond a limited distance) while off-duty but on-call.

Relevant to this personal assistant’s case, employers and individuals who retain personal or executive assistants should be aware of the employment risks associated with such employment and the need to pay such employees on a salaried basis and ensure that the assistants utilize independent discretion and judgment in performing their job duties in order to qualify for the protections afforded by the administrative exemption to overtime payment obligations.

For more information on this decision and how it might apply to your organization or employment, contact Amy Beth Dambeck, member of Stark & Stark’s Employment Group, via email: adambeck@stark-stark.com

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On January 11, 2012, the Supreme Court issued a unanimous decision in the case of Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC (“Hosanna-Tabor”). The decision upheld a religious church-school’s termination of a teacher based on the “ministerial exception” and ruled that employment discrimination lawsuits are barred when the employer is a religious group or organization and the employee is one of the group or organization’s ministers. 

Both the Americans with Disabilities Act (“ADA”) and Title VII of the Civil Rights Act of 1964 contain exemptions that entitle religious institutions to discriminate on the basis of religion – but they do not permit such institutions to discriminate on other legally protected basis, such as race, sex, or disability. The federal courts of appeals, however, have long recognized a broader, ministerial exception: a First Amendment doctrine that bars most employment-related lawsuits brought against religious organizations (“religious employers”) by employees performing religious functions. The circuits have been in agreement about the core applications of the doctrine to pastors, priests and rabbis, but have been divided over the boundaries of the ministerial exception when applied to other employees, particularly those whose duties are more secular in nature.

The question presented to the U.S. Supreme Court in the Hosanna-Tabor case was whether the ministerial exception applied to a teacher at a religious elementary school who taught a full secular curriculum and predominately engaged in secular duties, was a designated “called teacher,” taught religion classes, and regularly lead students in prayer.

Put a bit more simply: the Court was asked whether or not Cheryl Perich could sue her former church-school employer, the Hosanna-Tabor Evangelical Lutheran Church (“Hosanna-Tabor”), for discrimination under the ADA.

In this case, the EEOC filed suit on Ms. Perich’s behalf and against Hosanna-Tabor, claiming that the religious employer had unlawfully terminated her employment in violation of the ADA and, specifically, that it wrongfully fired her in retaliation for her threat to sue the church-run elementary school under the ADA.

In defense of the termination, Hosanna-Tabor claimed that Ms. Perich was a minister, and that, therefore, it had a First Amendment right to fire her for threatening to sue, which was contrary to their belief that Lutherans should resolve their disputes internally, and not within the courts.

In response, Ms. Perich argued that she was not a minister, just a teacher, and argued that Hosanna-Tabor had violated her federal statutory rights to protection against disability discrimination. Although most of Ms. Perich’s duties and teaching subjects were secular, she was a “called” teacher with some religious responsibilities, and the “called” designation was one conferred by the church. The U.S. Court of Appeals for the Sixth Circuit held that because, functionally, Ms. Perich was a secular teacher with few religious obligations, she was not a minister. As such, the Sixth Circuit concluded that Hosanna-Tabor did not have a First Amendment defense, and that Ms. Perich could pursue her ADA claims.  

In the Hosanna-Tabor decision, the Supreme Court rejected the Sixth Circuit’s analysis and concluded that Perich was a minister and, therefore, barred from pursuing her ADA claims.

The Supreme Court’s Decision
By the Hosanna-Tabor decision, the Court held that the Establishment and Free Exercise Clauses of the First Amendment serve as an absolute bar to employment discrimination suits brought on behalf of ministers against their religious employers; upheld the principle that it is impermissible for the government to contradict a church's determination of who can act as its ministers; and provided a fairly broad definition of “minister,” making clear that the designation is not limited to ordained clergy or their counterparts. 

The Court did not address whether or not the bar may also apply to other types of suits brought by ministers against their religious employers – such as breach of contract or tortious interference claims. 

Further, the Court did not articulate a rigid formula for deciding when an employee qualifies as a minister, choosing instead to apply a case-by-case approach which looks at the totality of the circumstances surrounding both the employee and the employment. 

In a Nutshell…

• The Court's decision confirms that the ministerial exception bars ministers from bringing employment discrimination suits against their religious employers.
• However, this bar only applies to employment discrimination suits brought by ministers, not employment discrimination suits brought by other lay employees.
• Further, the Court did not address whether or not the bar may also apply to other types of suits brought by ministers against their religious employers – such as breach of contract or tortious interference claims. 
• The decision establishes the ministerial exception as an affirmative defense, rather than a jurisdictional bar – meaning that unless the employer timely pleads the defense, it will be waived.

The Significance To Religious Employers and Employees
In light of this decision, religious employers must analyze whether an employee in question qualifies as a minister when making any employment decisions that could give rise to potential employment discrimination claims.  Such required analysis must keep in mind that the definition of a “minister” may be broader than one might expect. 

Further, because it is unclear whether or not the bar applies to other types of suits brought by ministers against their religious employers, such employers will still need to carefully evaluate all employment decisions for potential legal exposure – even for those employees who qualify as ministers.

Similarly, employees of religious institutions should be aware that, should the ministerial exception apply to them, they will be precluded from bringing employment discrimination claims against their employers and may be precluded from bringing other types of suits against their religious employers.  In addition, employees that may not consider themselves “ministers,” may, in fact, qualify for the designation, thereby being subject to the bar against bringing employment discrimination, and, potentially, other claims against their religious employers.

For more information on this decision and how it might apply to your organization or employment, contact Amy Beth Dambeck, member of Stark & Stark’s Employment Group, via email: adambeck@stark-stark.com

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Thomas B. Lewis, Chair of Stark & Stark’s Employment Litigation Group, was quoted in the January 14, 2012 New York Post article, Bonus (cry) babies taking the money and running.  The article discusses a recent trend in Wall Street bankers retiring early amidst  fears of skimpy bonus checks this year, and for the foreseeable future. 

Mr. Lewis states, “There’s a strong argument that the gravy-train days of Wall Street may never replicate themselves again. It’s going to be very hard to make an embarrassingly large amount of money at a bank that’s a publicly traded company compared to a private-equity fund or a hedge fund.

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New Jersey has finally enacted a law allowing civil actions for the misappropriation of trade secrets.  The Trade Secrets Act (“The Act”) signed by Governor Christie on January 9, 2012 provides remedies available to the holder of a trade secret that has been acquired by improper means or improperly disclosed. 

The Act provides an arsenal of remedies, including compensatory and punitive damages, injunctive relief and attorneys’ fees. The legislation defines a trade secret as information such as a formula, pattern, business data compilation, technique, invention and/or process. New Jersey now joins 46 other states who have enacted a trade secrets statute.

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Thomas B. Lewis, Shareholder and Chair of Stark & Stark’s Employment Group, was quoted in the December 30, 2011 Chicago Tribune article, Regional firms trump big brokers in adviser hiring.

The article discusses the recent increase in financial advisers switching firms in the last half of 2011. During this time, at least 166 advisers, managing a combined $25 billion of assets, moved to a new firm.

Mr. Lewis states that recruiting packages have reached 300 to 400 percent of a broker's annual production, including up-front and back-end bonuses, whereas ten years ago, a 50-to-100 percent package was considered healthy.

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Thomas B. Lewis, Chair of Stark & Stark’s Employment Group, was quoted in the December 2, 2011 Reuters.com article, Heading up a branch office seen as risky game. 

The article discusses the Financial Industry Regulatory Authority’s recent disciplinary actions against Brandon Tompson and Patricia Collantes, former Citigroup managers in California, after they failed to supervise a sales assistant who stole $750,000 from client’s accounts. Mr. Lewis states that becoming a branch managers comes with great risk and by electing o become a branch manager, brokers are effectively signing up to be responsible for every action of every employee, all day long.

You can read the full article online here.

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As of November 7, 2011, the New Jersey Department of Labor and Workforce Development implemented a new notice posting requirement applicable to New Jersey employers. The required notice contains a detailed description of employer recordkeeping requirements under state employment laws and provides contact information for employees or their representatives to report potential violations. This new requirement is in addition to any other notice posting requirements to which a New Jersey employer is subject.

Under this new mandate, employers are required, by December 7, 2011, to: (1) post the newly published notice conspicuously in the workplace and (2) provide each employee hired prior to November 7, 2011 with a copy of the notice.  Further, any new employee hired after November 7, 2011 must be provided with a written copy of the notice at the time of hire.

The conspicuous posting requirement will be satisfied if: (1) the notice is placed on an employer’s Intranet or Internet site and (2) all employees have access to the electronic posting of the notice.  Otherwise, the notice must be conspicuously posted in areas commonly used for similar postings.

An employer may also choose to satisfy the distribution requirement by providing each employee with a written copy of the notice via e-mail.   If e-mail is not available, then a hard copy must be delivered to each employee and, in such circumstances, it is recommended that employers obtain a signed acknowledgment from each employee to evidence receipt.

Failure to comply with these notice and posting requirements could result in a fine of up to $1,000, as well as criminal penalties. 

New Jersey employers need to ensure that the notice is posted in the workplace and distributed to each employee no later than December 7, 2011.  In addition, employers should distribute copies of the notice to anyone hired on or after November 7, 2011 and must provide a copy of the notice to any new employees upon hire to ensure compliance with these new requirements.

A copy of the 6-page notice can be obtained through the following link to the New Jersey Department of Labor and Workforce Development’s website. For additional information, please feel free to contact me at 609.219.7452 or via email: adambeck@stark-stark.com.

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As our use of social media continues to explode, employers often find themselves in a difficult predicament when they become aware of negative or controversial comments made by an employee on social media outlets such as Facebook or Twitter. Employers, often times without a policy regarding employee use of social media outlets, use their own discretion when determining whether comments made by an employee through a social media outlet are grounds for suspension, discipline, or termination.

Under Section 7 of the National Labor Relations Act (“NLRA”) employees, both unionized and non-unionized, have the right to engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection." These “activities” protect employees engaging in communication regarding wages and working conditions. Section 7 protects traditional face-to-face communication, as well as communication over the Internet and social media sites. In contrast to traditional means of communication however, when employees use social media they reach a much larger audience almost instantaneously, thereby making it more difficult for employers determine the limits of acceptable employee communication and to limit potentially damaging and inappropriate information from being widely disseminated.

Recently, in Hispanics United of Buffalo, Inc. v. Carlos Ortiz, the National Labor Relations Board (“NLRB”) held that off-hours complaints by employees about their working conditions on Facebook were protected by Section 7 of the NLRA. The holding in Ortiz is important because for the first time, employers have a general understanding of what is, and what is not, acceptable social media communication. See Hispanics United of Buffalo, Inc. v. Carlos Ortiz, Case 3-CA-27872.

The Ortiz decision can assist employers drafting social media policies. Employers must recognize the practical, economic, and legal implications of an insufficient or overly restrictive social media policy. Because employers must be aware the protections afforded to employees through the NLRA, careful determination of the contents of their social media policy is essential. Once an employer has decided to draft a social media policy, or update an existing policy, the following issues should be addressed:

1. policies should be specific, not overly broad, and cannot prevent employees from exercising their Section 7 rights under the NLRA;
2. policies should include language that carves out discussions in social media forums protected under the NLRA;
3. employers should implement or update the policy in a manner consistent with prevailing employee policies within the company so that Section 7 rights are preserved;
4. employers should review the content and context of postings, tweets or blogs made by employees (whenever possible) to determine if the content of the posting concerns terms or conditions of employment, relates to other issues, or seeks to involve other employees in discussions regarding conditions of employment;
5. employers should determine if the post is merely a personal grievance and/or whether the responses posted are "emotional support" or a statement about employment conditions; and
6. employers should remain current on NLRB rulings to ensure compliance with the NLRB's current position on social media policies.

A properly drafted social media policy may assist in safeguarding an employers’ business and limit its exposure to potential litigation. However, when drafting and/or updating a social media policy employers would be wise to insure that their efforts are in harmony with protecting the Section 7 rights of their employees.

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Thomas B. Lewis, Chair of Stark & Stark’s Employment Group, was quoted in the September 13, 2011 FundFire article, AllianceBernstein Sues More Departed Advisors.

The article discusses the continiuing legal battle AllianceBernstein is engaged in with financial advisors who recently left their firm and took clients with them. The firm filed suit against eight former brokers, claiming that they violated their non-solicitation agreements after they left without giving sufficient notice and taking their client lists and other confidential information with them.

Mr. Lewis comments on AllianceBernstein’s choice not to partake in the Protocol for Broker recruiting. He states, “The reason they have not joined is because they are concerned that it will make it easier for people to leave AllianceBernstein. They don’t want to join the protocol right now because there’s a great concern that there might more people who would want to leave than join, and in that situation, the protocol would not be a good mechanism for them to use.”

 

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Thomas B. Lewis, Chair of Stark & Stark’s Employment Group, was quoted in the August 16, 2011 Wall Street Journal article, Lehman Pursues Former Brokers' Bonuses. The article discusses Leahman Brothers Holdings, Inc.’s decision to go after former brokers in an attempt to collect bonus money they received when they joined the firm. 

Mr. Lewis states that, “lawyers for the former Lehman brokers may try to argue ‘impossibility’ as a defense against the firm's note claims.  It's impossible to do your job if it's no longer there." 

You can read the full article online here.

 

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