BIA REPORT
Employment Law Update
State and federal developments of interest to New Hampshire employers
October 2002 issue:
By Andrea Johnstone, Anne Scheer, and Terry Shumaker*
Overtime Suits Proliferate Nationally
While cases brought under newer workplace laws like the ADA and FMLA may be getting more attention in the press, the early statutes regulating the workplace like the wage and hour laws may well pose greater risks and financial exposure to the average employer.
Along with similar, but not identical, state laws, the Fair Labor Standards Act, first passed in 1938, sets minimum wage and overtime requirements as well as regulating child labor in virtually every American place of employment. The statutes are enforced by the state and federal Departments of Labor as well as providing employees with a right to sue individually or as a class. Most compliance problems arise out of failure to be aware of the regulations at all, misclassification of hourly workers as salaried and not paying them overtime, work performed at home, during breaks or otherwise not recorded on time cards, employees under 18 working too many hours or at prohibited jobs, and the failure of the employer to keep the required records with which to defend itself.
Misinterpretation and mistakes, even if unintentional, can be extremely costly with back pay awards for up to three years. Starbucks just paid $18 million to settle a suit for failure to pay overtime to its assistant managers who had been misclassified as salaried exempt. A federal judge in California recently approved a $35 million award to Pacific Bell non-professional engineers who had been working 50 hours a week without overtime pay and the New Jersey Supreme Court ordered Pepsi Cola to pay overtime to workers who delivered products and stocked shelves rejecting the company's argument that they were exempt outside salespersons.
While not at these levels, there are recent New Hampshire decisions from the federal court and the Department of Labor with significant monetary awards. Defending these cases is also expensive, especially without good records. Prevailing employees can also win double damages and their attorney's fees under the state and federal laws. Technology has changed the workplace and duties of many workers. People who formerly supervised are now doing work themselves via computer and may no longer be exempt from overtime. Experienced wage hour counsel are advising human resource directors to conduct regular reviews of FLSA compliance to avoid significant exposure to overtime and other wage claims.
Can You Discriminate Unknowingly?
Can your company be held liable even if you were unaware that an employee is in a protected class under the discrimination laws? Readers will like the conclusions reached this summer by two different federal appellate courts. The Eleventh Circuit Court of Appeals ruled that an employer did not discriminate against an Orthodox Jewish applicant because the manager who made the hiring decision was totally unaware of his religion despite the fact that the interviewer was. Similarly, since the decision to terminate an employee was made before the employee told the company she was pregnant, and early pregnancy is not noticeable, there could be no finding of discrimination reasoned the Sixth Circuit.
Additionally, the First Circuit, which covers New Hampshire, recently ruled that the mere fact that the decision-makers mentioned that the employee was in the protected age group during the meeting when the decision to fire him was made was not in and of itself evidence of age discrimination. The judges noted that the risk of litigation is often discussed when company officials meet to consider terminating someone.
In Brief
- The New Hampshire Supreme Court has agreed to hear Timkin Aeorospace's appeal from a judgment of over $500,000 awarded to a female employee for sexual harassment by a Sullivan County jury. Employment lawyers and other court observers are watching to see if the Court finds that the employer's response to her complaint was adequate as it did in reversing the Human Rights Commission in another case earlier this year.
- A federal appeals court has upheld a school district's policy of allowing a transgendered male teacher to use the ladies room rejecting the religious and hostile sexual environment discrimination claims of a female teacher who objected to using the same restroom despite the availability of other ones in the building.
- As the number of employers offering "domestic partner" insurance coverage grows in the public and private sectors, readers will be interested to know that a labor arbitrator has ruled that a collective bargaining agreement provision did not require an employer to offer such coverage to unmarried couples of the opposite sex since the intent was to make insurance available to same sex couples unable to marry.
Copyright 2002. This article originally appeared in BIA Report, October 2002.
* Anne Scheer is admitted in New Hampshire.
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