Workforce Bulletin

On April 28, 2023, the U.S. Court of Appeals for the Fifth Circuit reversed and remanded a decision from the Western District of Texas declining to issue a preliminary injunction barring the Department of Labor (“DOL”) from enforcing a regulation known as the “80/20/30 rule.”

As we previously reported, on October 29, 2021, the DOL issued a final rule for determining which tipped employees may receive “tip credit” in lieu of receiving the full minimum wage directly from the employer.  Under the 80/20/30 rule, employers must pay employees at least the minimum wage if they spend more than 20% of their time on tasks that do not immediately and directly generate tips, including wiping down tables, filling salt and pepper shakers, rolling silverware into napkins, and other duties referred to in the industry as “side work,” or if they spend more than 30 consecutive minutes performing such tasks.  The Restaurant Law Center and the Texas Restaurant Association promptly sought a preliminary injunction in the Western District of Texas.

On Thursday, April 20, 2023, the National Labor Relations Board (“NLRB” or “Board”) released a decision in Noah’s Ark Processors, LLC d/b/a WR Reserve, 372 NLRB No. 80, in which it laid out sweeping remedies the Board will consider imposing in cases involving so-called “repeat offenders” of the National Labor Relations Act (“NLRA” or the “Act”).

In Noah’s Ark, the Board affirmed findings made by an NLRB Administrative Law Judge (“ALJ”) that the employer bargained in bad faith with the union representing its employees, implemented its final offer without achieving overall impasse, engaged in regressive bargaining and other impermissible bargaining tactics, and threatened and interrogated employees because of their protected activity, all of which came on the heels of the employer defying a previous federal court injunction related to earlier bad faith bargaining and other unfair labor practice allegations. The Board not only upheld the make-whole remedies ordered by the ALJ, but also announced “the potential remedies the Board will consider in cases involving [employers] who have shown a proclivity to violate the Act or who have engaged in egregious or widespread misconduct.” In doing so, the Board ordered remedies beyond those imposed by the ALJ, noting that the Board “[has] broad discretion to exercise [its] remedial authority under Section 10(c) of the Act even when no party has taken issue with the judge’s recommended remedies or requested additional forms of relief.”

Columbus has joined Toledo, Cincinnati, and a number of states and locales around the country, in banning employers from asking job applicants about their salary history.

Effective March 1, 2024, covered employers in Ohio’s capital will be prohibited from:

• inquiring about an applicant’s salary history,
• screening applicants based on their salary history,
• relying solely on salary history when deciding whether to offer an applicant employment or determining their compensation, and
• retaliating against applicants for not disclosing their salary history.

Salary History

Currently, neither the federal Fair Labor Standards Act (FLSA) nor the Equal Pay Act (EPA) prohibit employers from screening applicants based on prior salary, requesting an applicant’s salary history, or conditioning an applicant’s employment on providing their salary history. However, salary history bans, which are intended to eliminate the perpetuation of discriminatory pay disparities, have become increasingly common both at the state and local level. As of April 2023, more than 40 states and localities have adopted some form a salary history ban.

On March 23, 2023, Utah Governor Spencer Cox signed into law Senate Bill 73 (“SB 73”) expanding the group of employees eligible for tip pooling by allowing employers to include non-tipped employees in a bona fide tip pooling or sharing arrangement.

Historically, only “tipped employees” were permitted to participate in a tip pooling or sharing arrangement under Utah State law. This form of tip pooling is also allowed under federal law and is otherwise known as a traditional tip pool. A “tipped employee” is one who customarily and regularly receives tips or gratuities.”[1] Common examples of tipped employees include waiters and waitresses, whereas dishwashers, chefs, cooks, and janitors are examples of non-tipped employees.

As featured in #WorkforceWednesday:  This week, we unpack the major updates the New York State Department of Labor (NYSDOL) incorporated into its model sexual harassment prevention policy:

The NYSDOL recently released major updates to its model sexual harassment prevention policy. The updates cover issues such as gender identity and remote work. What do employers need to know?

On Tuesday, April 25, 2023, the Equal Employment Opportunity Commission (“EEOC”), Consumer Financial Protection Bureau (“CFPB”), Justice Department’s Civil Rights Division (“DOJ”), and the Federal Trade Commission (“FTC”) issued a “Joint Statement on Enforcement Efforts Against Discrimination and Bias in Automated System” (“Joint Statement”).  According to a press release from the EEOC, by the Joint Statement, the federal agencies pledged to uphold America’s commitment to the core principles of fairness, equality, and justice as emerging automated systems, including those sometimes marketed as “artificial intelligence,” or “AI,” become increasingly common in people’s daily lives – impacting civil rights, fair competition, consumer protection, and equal opportunity.

The lingering morning chill in the air (at least, here, in the Northeast) suggests that summer is not quite here, but as the daylight persists through the evening hours, businesses small and large are gearing up for yet another summer – intern – season.

In anticipation of the arrival of these ambitious and eager workers, companies’ human resources professionals and stakeholders are asking the age-old questions:

Should these interns be classified as “employees” of the company?

Must they be compensated?

Isn’t knowledge and real-world experience the appropriate reward (and maybe some academic credit)?

Is this a wage and hour violation?

The answer to this question is that, it depends, which is a dependably frustrating response from a management-side employment lawyer.

As featured in #WorkforceWednesday:  This week, we bring you our special Spilling Secrets podcast series on the future of non-compete and trade secrets law:

The inevitable disclosure doctrine, expected to be a widely used tool to protect trade secrets after the famous PepsiCo, Inc. v. Redmond case in 1995, has not been as commonly employed as anticipated. But is the legal landscape about to change?

A little over two years ago, the U.S. Court of Appeals for the Fifth Circuit became the first federal appellate court in the country to reject the widespread and longstanding two-step approach of first “conditionally” certifying Fair Labor Standards Act (“FLSA”) collective actions under a very lenient, plaintiff-friendly standard, followed by applying more rigorous scrutiny after the close of discovery at the “decertification” or “final certification” stage.  As we discussed here, the Fifth Circuit concluded in Swales v. KLLM Transport Services, LLC that the FLSA requires not two steps, but instead a single step that carefully examines whether the group of workers at issue is “similarly situated” before a court authorizes any notices to potential opt-in plaintiffs.

As featured in #WorkforceWednesday:  This week, we examine the decision of a Texas district court to strike down an Affordable Care Act (ACA) mandate on preventive medical services and look at the U.S. Department of Justice’s (DOJ’s) third trial loss in prosecuting wage-fixing and no-poach agreements. We also discuss the recent termination of the COVID-19 national emergency and the upcoming end of emergency benefits for employers on May 11, 2023.