Fed Ex Stands By Driver Who Stopped Flag Burning

On Friday a video circulated on social media of a Federal Express Driver stopping protesters from burning a U.S. Flag.  The video can be see  here https://mobile.twitter.com/sgrubermiller/status/824680301003677696/video/1

As you can see from the link, the altercation got a bit heated.  Federal Express has announced that the driver’s employment status will not change  as a result of the incident.   But could the company have fired the driver for his role in this matter? Absolutely.

The driver is likely an at will employee, which means that either he or the company could terminate employment at any time, with or without cause and with or without prior notice. Furthermore, even if he is not an at will employee his conduct likely violates several rules of conduct or company procedures, since he involved himself in a protest while on the job  that did not involve or impact the performance of his duties.  My guess is he kept his job because he has a strong performance record with Federal Express and he stopped flag burning which, while legal, is extremely unpopular and controversial.  Firing this employee likely would have resulted in a backlash against Federal Express.

The take away for employers is when employees engage in conduct that violates your rules, you can legally terminate their employment, even if the termination is unpopular.




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Mandatory Paid Sick Leave For Federal Contractors

Recently the Final Rule implementing Executive Order 13706 (“Final Rule”) was issued which requires certain federal contractors to provide their employees with up to seven days (56 hours) of paid sick leave annually, including paid leave for family care. The highlights of the Final Rule are set forth below.


The Final Rule applies to new contracts and replacements for expiring contracts with the Federal Government that result from solicitations issued on or after January 1, 2017, or that are awarded outside the solicitation process on or after January 1, 2017.


There are four major categories of contractual agreements covered: (a)   Procurement contracts for construction covered by the Davis-Bacon Act (DBA); (b)   Service contracts covered by the McNamara-O’Hara Service Contract Act (SCA); (c)   Concessions contracts, including any concessions contracts excluded from the SCA by the Department of Labor’s regulations; and (d)   Contracts in connection with Federal property or lands and related to offering services for Federal employees, their dependents, or the general public.

Furthermore, any subcontract of a covered contract that (like the upper-tier contract) falls into one of these four categories is subject to the paid sick leave requirements.


The Final Rule does not apply to contracts that are subject only to the Davis-Bacon Related Acts, i.e., Acts under which Federal agencies provide financial and other assistance to construction projects through grants, loans, guarantees, insurance and other methods, but do not directly procure construction services. It also does not apply to contracts for the manufacturing or furnishing of materials, supplies, articles, or equipment to the Federal Government, including those subject to the Walsh-Healey Public Contracts Act.

There are certain narrow exclusions from coverage: (1) grants; (2) contracts and agreements with and grants to Indian Tribes; (3) any procurement contracts for construction that are not subject to the DBA (i.e., procurement contracts for construction under $2,000); and (4) any contracts for services, except for those otherwise expressly covered by the Final Rule, that are exempted from coverage under the SCA or its implementing regulations.


The Final Rule applies to any person engaged in performing work on or in connection with a contract covered by the Executive Order whose wages under such contract are governed by the SCA, DBA, or Fair Labor Standards Act (FLSA), including employees who qualify for an exemption from the FLSA’s minimum wage and overtime provisions. It includes a narrow exemption from the rule’s accrual requirements for employees who perform work duties necessary to the performance of a covered contract (but who are not directly engaged in performing the specific work called for by the contract) and who spend less than 20 percent of their hours worked in a particular workweek performing work in connection with such contracts.


Employees can accrue 1 hour of paid sick leave for every 30 hours worked on or in connection with a covered contract. Contractors also have the option to provide an employee with at least 56 hours of paid sick leave at the beginning of each accrual year rather than allowing the employee to accrue leave based on hours worked.

A contractor’s existing PTO policy can fulfill the paid sick leave requirements of the Final Rule so long as it provides employees with at least the same rights and benefits as the Final Rule requires. In other words, if a contractor provides 56 hours of PTO that meets the requirements described in the Final Rule but employees can use the leave for any purpose, the contractor does not have to provide separate paid sick leave even if an employee uses all of the time for vacation.


Contractors may limit the amount of paid sick leave employees may accrue to 56 hours each year and must permit employees to carry over accrued, unused paid sick leave from one year to the next. The Final Rule also allows contractors to limit the amount of paid sick leave employees have accrued to 56 hours at any point in time. Furthermore, contractors are required to reinstate employees’ accrued, unused paid sick leave if the employees are rehired by the same contractor within 12 months after a job separation unless they provide payment to employees for accrued, unused paid sick leave upon separation. Contractors are not required to pay employees for accrued, unused paid sick leave at the time of a job separation (“cash-out”); however, if they do provide cash-out, they will not be required to reinstate unused leave.


Contractors with covered contracts must comply with the paid sick leave requirements. They must also insert a clause regarding those requirements into any covered lower-tier contracts and ensure that lower-tier contractors comply with them. Contractors are required to provide notice to employees of the paid sick leave requirements. Additionally, contractors will be required to make and maintain records of the notifications sent to employees of the amount of paid sick leave accrued, denials of employees’ requests to use paid sick leave, dates and amounts of paid sick leave used and other records showing the tracking of employees’ accrual and use of paid sick leave.


An employee may use paid sick leave, in increments as small as one hour, for an absence resulting from:

  1. Physical or mental illness, injury, or medical condition of the employee;
  2. Obtaining diagnosis, care, or preventive care from a health care provider by the employee;
  3. Caring for the employee’s child, parent, spouse, domestic partner, or any other individual related by blood or affinity whose close association with the employee is the equivalent of a family relationship who has any of the conditions or need for diagnosis, care, or preventive care described in (i) or (ii); or
  4. Domestic violence, sexual assault, or stalking, if the time absent from work is for the purposes described in (i) or (ii) or to obtain additional counseling, seek relocation, seek assistance from a victim services organization, take related legal action, or assist an individual related to the employee as described in (iii) in engaging in any of these activities.


A request to use paid sick leave may be made orally or in writing. A leave request must be made at least 7 calendar days in advance where the need for the leave is foreseeable, and in other cases as soon as is practicable. A contractor is required to communicate any denial of a request in writing, with an explanation for the denial—which cannot be based on whether the employee has found a replacement worker or on the contractor’s operational needs.


A contractor may require certification from a healthcare provider – or appropriate individual or organization if the leave is for domestic violence, sexual assault or stalking – only for absences of three or more consecutive full days, and the employee must have received notice of the requirement to provide certification before he or she returns to work.


A contractor may not use paid sick leave required by the Final Rule toward the fulfillment of its SCA or DBA obligations. A contractor’s obligations under the Final Rule have no effect on its obligations to comply with, or ability to act pursuant to, the Family and Medical Leave Act (FMLA). Paid sick leave may be substituted for (that is, may run concurrently with) unpaid FMLA leave, and all notices and certifications that satisfy FMLA requirements will satisfy the request for leave and certification requirements of the Final Rule.

With respect to state or local paid sick time laws, contractors must comply with both any such law that applies as well as the Final Rule, but contractors may satisfy their obligations by providing paid sick time that also fulfills the requirements of a State or local law provided that the paid sick time is accrued and may be used in a manner that meets or exceeds all of the requirements of the Final Rule. Where the requirements of an applicable state or local law and the Final Rule differ, satisfying both will require a contractor to comply with the requirement that is more generous to employees.


Employers may not interfere with the accrual or use of paid sick leave and may not discriminate or retaliate against any employee for the exercise of rights under the Final Rule.

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Court Holds Religious Freedom Restoration Act Is Defense To Firing Of Transgender Employee

Last year the United States Supreme Court held that the Religious Freedom Restoration Act (“RFRA”) allowed Hobby Lobby to avoid providing health insurance coverage under the ACA for methods of contraception because doing so violated the sincerely held religious beliefs of the company’s owners. Last week in EEOC v. R.G. and G.R. Harris Funeral Homes, Inc. the United States District Court for the Eastern District of Michigan held that RFRA could provide a defense to a sex discrimination case under Title VII.

In Harris Funeral Homes it was undisputed that the Funeral Home fired a male employee, Stephens, because Stephens intended to “dress as a woman” while at work. Stephens is transgender and transitioning from male to female. The EEOC alleged that the termination violated Title VII because Stephens was terminated due to his transgender status or his gender identity. The court rejected that argument because transgender status and gender identity are not protected classes under Title VII. The EEOC also argued that Stephen’s termination was sex discrimination because Stephens did not conform to the Funeral Home’s sex/gender based stereotype.

The Funeral Home argued that it was entitled to an exemption under RFRA because allowing Stephens to dress as a woman at work would impose a substantial burden on its ability to conduct business in accordance with its sincerely held religious beliefs. RFRA prohibits the government from substantially burdening a person’s exercise of religion. After the RFRA defense was asserted the burden shifted to the EEOC to show that its efforts to prevent the Funeral Home from enforcing its dress code were (a) in furtherance of a compelling governmental interest and (b) the least restrictive means of furthering that compelling governmental interest.

The court held that the EEOC failed to show filing suit for sex discrimination was the least restrictive means of furthering the compelling governmental interest. For example, the court reasoned that if the EEOC’s interest was truly eliminating gender stereotypes, it could have proposed a gender neutral dress code as a less restrictive means of furthering the governmental interest.

Some take aways for employers:

  1. Transgender and sexual orientation are not protected classes under Title VII. However, they might be protected under applicable state or local law;
  2. Discrimination based on the failure to conform to a sex stereotype (e.g. a male employee is not masculine enough) is sex discrimination under Title VII;
  3. For RFRA to apply the government must be taking action against the employer. A suit by an employee, for example, would not be subject to a RFRA defense;
  4. RFRA also requires that an employer’s sincerely held religious belief be impacted by the action in question. This is more likely to be the case when the employer is a closely held corporation; and
  5. The Harris Funeral Homes decision may be appealed to the Sixth Circuit where it could be reversed.

E-Verify Soon Required For Some Tennessee Employers

Thanks to an amendment to a Tennessee law  some Tennessee employers will soon be required to use E-Verify.  Effective January 1, 2017 private employers with fifty (50) or more employees must use E-Verify to verify the work authorization status of all employees hired on or after that date.  This is a change to the Tennessee Lawful Employment Act, which currently allows all employers to choose between using E-Verify or collecting one of eleven specified identification documents in order to comply with the law.

Penalties for noncompliance with the TLEA include a $500 penalty plus $500 per employee or non-employee not verified, or a copy of appropriate verifying documentation not maintained, for the employer’s first offense.  Those amounts increase to $1000 for a second offense and $2500 for a third offense.

The TLEA allows first time violators to receive a warning in lieu of a penalty if the employer remedies the violation within 45 days of receipt of the notice and initial order from the Tennessee Department of Labor.  Employers previously had 60 days to achieve compliance, but the amendment shortened the time to 45 days.  Also, if the employer fails to remedy the violations within 45 days the initial order shall be deemed a final order not subject to further review.

All Tennessee employers should review their verification documentation now by conducting an “I9 Audit” to make sure they are in compliance with the TLEA and applicable federal law.  Tennessee employers with 50 or more employees can enroll in E-verify now, or wait until January 1, 2017 to do so, but make sure you enroll.  The failure to do so can be costly!



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The New DOL Overtime Rules Are Here: What You Need to Know

After much anticipation ( and likely some dread from employers) the DOL released its new overtime rules last night.  The Final Rule makes changes to the salary test for the Executive, Administrative and Professional (EAP) Exemptions as well as the Highly Compensated Employee Exemption.

* Key Provisions of the Final Rule *

The Final Rule focuses primarily on updating the salary and compensation levels needed for EAP workers to be exempt. Specifically, the Final Rule:

  1. Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South, which is $913 per week or $47,476 annually for a full-year worker;
  2. Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally, which is $134,004; and
  3. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.
  4.  Amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level.  A “catch up” payment can also be made in an effort to satisfy the new salary level, provided it does not exceed 10 percent of the new minimum salary. However, HCE employees must still receive at least the full standard salary amount each pay period on a salary or fee basis without regard to the payment of nondiscretionary bonuses and incentive payments.
  5. The Effective Date is December 1, 2016.

Significantly, the Final Rule made no changes to the current duties tests for these exemptions.

Employers  have almost 6 months to prepare before these changes become law.  Use that time wisely to consult with employment law counsel, audit your employees currently classified as exempt and analyze your business to determine the best way to respond .


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Will the New Salary For The White Collar Exemptions Be Lower Than Expected?

Employers are anxiously awaiting the new DOL rules for the executive, administrative and professional  exemptions, which are also known as the “white collar exemptions”.  The proposed new rule would increase the annual salary for these exemptions to $50,440.  But rumors are circulating that the final rule will set the new annual salary at $47,000.  This would be almost exactly double the current salary threshold of $23,660 per year.

We should have the final rule later this month.  Stay tuned for further developments!

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Individual Liability Under The FMLA

A little known fact about the FMLA is that it can provide for individual liability in certain circumstances.  Recently, the Second Circuit Court of Appeals in Graziadio v. Culinary Institute of America served a loud reminder of that fact.

The FMLA defines “employer” as “any person who acts, directly or indirectly, in the interest of any employer to any of the employees of such employer”.  That is a convoluted way of saying an individual can be liable under the Act.  This definition came directly from the FLSA, and in certain FLSA cases individual liability is imposed.

What are the circumstances which can result in individual liability? The Second Circuit adopted a nonexclusive four factor “control” test. The four factors the court recognized are:

  1. The power to hire and fire;
  2. Supervising and controlling employee work schedules or conditions of employment;
  3. Determining the rate and method of payment to employees; and
  4. Maintaining employment records.

In Graziadio the court applied this test and held that there were disputed factual issues as to whether the company’s HR Director met the definition of employer and ruled that a jury will have to decide the question.

This case may lead to plaintiffs suing both the company and an HR Director or some other member of management under the FMLA, particularly if there is some question about the solvency of the company.  Only time will tell.

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Who Owns A Social Media Account Created By An Employee?

Some employers may allow, or even encourage, employees to establish social media accounts identifying them as representatives of the employers. But who owns these social media accounts after the employment relationship ends? The cases that have been decided thus far make it clear that if the employer wants to establish ownership of the accounts it is best to have a policy in place that addresses the issue.

In Eagle v. Morgan Dr. Linda Eagle was fired from her position at Edcomm, and thereafter Edcomm attempted to take control of her LinkedIn account. Once EdComm took control of her LinkedIn account, Dr. Eagle sued. In ruling for Dr. Eagle and rejecting EdComm’s counterclaims the court noted that Edcomm had no policies regarding employee use of LinkedIn, that Edcomm did not pay for employee LinkedIn accounts, and that LinkedIn’s User Agreement states that the account is between LinkedIn and the individual user. Thus, the court held that Edcomm had no ownership rights in the account even though the account was created using Edcomm’s email system and computers and was created to represent Dr. Eagle as an employee of Edcomm.

In Ardis Health, LLC v. Nankivell, Nankivell was terminated by her employer, CYC, and refused to turn over company “Access Information,” which included passwords and other login information for social media accounts and websites, and content on those accounts and websites. When she began working at CYC, the company had her sign a “Work Product Agreement” which provided that all work created or developed by Nankivell was the property of CYC. The court concluded that CYC owned this Access Information and forced Nankivell to return the Access Information to CYC.

In BTS, USA, Inc. v. Executive Perspectives, LLC, the defendant, Bergmann, posted about his new position with a direct competitor to his old company, BTS, USA, Inc. (“BTS”), on his LinkedIn page. Those “linked” with Bergmann could see his postings about his new job. Amongst those “linked” with him included several clients and contacts he developed while at BTS. BTS sued claiming Bergmann’s LinkedIn postings violated the non-compete agreement he entered into with BTS. In holding that this was not a breach of his non-compete agreement the court noted that “BTS had no policies or procedures regarding employee use of social media, did not request or require ex-employees to delete BTS clients or customers from LinkedIn accounts; did not discuss with Bergmann his LinkedIn account in any fashion,” and allowed employees to maintain LinkedIn accounts without monitoring or restriction.

Based on these cases, employers who want to establish ownership of a social media account created by an employee should adopt a policy which expressly states that the employer owns the account. Remember, an ounce of prevention is worth a pound of cure.

New Year’s Resolutions To Avoid Employment Litigation


2016 is here.   Perhaps you made individual resolutions for the New Year. A New Year’s resolution all employers should make is to review their policies and practices to ensure they are following the best practices to avoid employment litigation.

Some of the best practices to follow include the following:

1.                  Confirm that all written employment offers state that the employment relationship will be terminable at will.

2.                  Review and, if necessary, revise personnel manuals and employee handbooks to ensure that they comply with all applicable changes in the law.

3.                  Ensure that your employment application and personnel manual or employee handbook contain a disclaimer which states that the employment relationship is at will and that the document cannot be construed as a contract.

4.                  Instruct everyone who interviews potential employees not to promise “life long” or “permanent” employment, or make other similar promises of job security which might alter the employment at will relationship.

5.                  Conduct harassment training for all employees.

6.                  Train employees who interview potential employees on questions that are prohibited under state and federal law.

7.                  Review and, if necessary, revise job descriptions to ensure they list all essential job functions, including often overlooked mental capabilities such as concentrating, multitasking and communicating in a clear and persuasive fashion.

8.                  Review your exempt and nonexempt classifications to ensure compliance with wage and hour law, particularly in light of the changes in wage and hour law that are coming later this year. (For more on these changes see my December 2015 post).

9.                  Train supervisors on the company’s duty to reasonably accommodate employees with disabilities, including how to respond when an employee claims that he or she cannot do the job because of a physical or mental impairment.

Employers who commit to a New Year’s resolution to follow these best practices will be taking steps to make 2016 a Happy New Year!

Prepare For Upcoming FLSA Changes Now

Last month the Department of Labor announced that the final rule changing the Executive, Administrative and Professional Exemptions under the FLSA, the so called white collar exemptions, is expected to be released in July 2016. After the final rule is released the changes will likely become law 60 to 90 days later. The proposed changes will increase the annual minimum salary for these exemptions from $23,660 to $50,440. And, while there has been no announcement yet, it is still possible that the final rule will change the duties test for these exemptions which could greatly impact what employees qualify as exempt.

Now is the time for employers to begin planning on how to deal with these changes. Certainly, if there is a change to the duties test the change will likely be to narrow the exemption. Employers should conduct an analysis to determine whether it is more economically beneficial to increase the salary of some exempt employees, or reclassify them as nonexempt and pay them overtime. If the decision is made to continue to treat the employees as exempt employers should analyze whether any of that increase in salary can be passed on to their customers and if so, how much.

The analysis should also focus on the duties of every employee that is currently classified as exempt. If there is doubt about whether a particular employee is properly qualified as exempt the employer should determine whether that employee can be given additional duties and responsibilities to remove doubt about the exemption. If that is not possible the employer should consider how to best go about reclassifying the employee.

Reclassification may be viewed as an insult to some employees, so this must be considered in determining how to approach and resolve the issue. Also, employers must determine whether they will increase the pay of reclassified employees, in an effort to soften the blow of reclassification.

Proactive employers who conduct these analyses now will save themselves headaches in the future and be well positioned to comply with the new law as soon as it takes effect.

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