Legislators introduce bill to address BOLI's new interpretation of manufacturing overtime rule

By Stacey Mark
March 7, 2017

We recently reported on BOLI 's new guidance overturning its long-standing interpretation of ORS 652.020, Oregon's overtime rule applicable to manufacturing establishments.   The Oregon Legislature has now weighed in on this issue.

Under ORS 652.020, nonexempt employees working in mills, factories, and manufacturing establishments must be paid overtime for hours worked in excess of 10 in any day and hours worked in excess of 40 per week.  BOLI's prior interpretation of that rule required employers to calculate overtime hours worked on both a daily and weekly basis and pay the greater of the two.  Under the new guidance, employers are required to pay both daily and weekly overtime.  

The revised BOLI guidance has raised many questions.  Not only has BOLI done an about-face, the timing of the new guidance is puzzling as the interpretation of the manufacturing overtime rule is the subject of a pending class action filed in Multnomah County Circuit Court, which is likely to resolve the issue.  

In an attempt to address the uncertainty created by the new guidance in the manufacturing sector, the Oregon Legislature introduced a bill last Thursday to put the issue to rest.  Under SB 984, manufacturers would only be required to pay the greater of the daily or weekly overtime.

Ater Wynne's employment group is available to answer questions regarding the application of the manufacturing overtime rule and other wage and hour concerns.

 

Litigators beware: two acts designed to curb litigation abuse

By Daniel Lis
February 10, 2017

On January 30, 2017, the House Judiciary Committee received two bills that could have a significant impact on litigators and their clients. One bill seeks to impose mandatory penalties on lawyers, law firms, and parties who file frivolous lawsuits. The other bill seeks to prevent fraudulent joinder of parties and prevent plaintiffs from adding defendants solely for the purpose of destroying federal jurisdiction, only to drop those defendants later.

The Lawsuit Abuse and Reduction Act, H.R. 720, would amend FRCP 11 to require judges to sanction attorneys, law firms, or parties who file frivolous pleadings.  The mandatory sanction under the new rule would require parties to pay costs and attorneys’ fees. The rule would also give the court broad discretion to impose a variety of other sanctions, including striking pleadings, dismissing the lawsuit, and requiring that a party pay a penalty to the court. Further, the amendment would eliminate a party’s ability to avoid sanctions by voluntarily withdrawing claims within 21 days.  The House Judiciary Committee already voted 17-6 in favor of H.R. 720. If it is passed, it will likely cause a substantial decrease in lawyers asserting frivolous claims, as they will have to consider the possibility of mandatory sanctions.

The Innocent Party Protection Act, H.R. 725, seeks to prevent small businesses from being subject to fraudulent joinder. The bill seeks to protect these small businesses by allowing judges more discretion to see through an attorneys’ motives for naming a party and dismiss a party that was fraudulently joined in a lawsuit.  The House Judiciary Committee already voted 17-4 in favor of H.R. 725.  If it is passed, it may help protect small businesses from the hardship caused by paying attorneys’ fees in a lawsuit in which the business should have never been involved in the first place. 

Executive Order Impacts H-1B Visa Petitions

By Andrea Bartoloni
February 8, 2017

President Trump signed an Executive Order on January 27th banning entry into the United States by people from seven Muslim-majority countries.  Other Executive Orders, including one affecting temporary visas, have been drafted by the new administration. In light of that information, it is even more important to get an early start on applications. 

Unless changes are announced, the United States Citizenship and Immigration Service ("USCIS") will begin accepting new H-1B petitions starting April 1, 2017, for employment commencing on October 1, 2017.

In past years, only 85,000 H-1B visas were available annually, and historically there has been very high demand for these visas. Businesses considering employment of foreign workers in need of an H-1B visa,should file their H-1B petitions no later than April 1, 2017 to avoid a potential shortage.

Federal legislators take steps to repeal Davis-Bacon Act

By Stacey Mark
February 3, 2017

Federal legislators have renewed steps to repeal -- or at least undermine -- the prevailing wage requirements under the Davis-Bacon Act, which mandates payment of prevailing wages and benefits to workers employed under federally-funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works.  

U.S. Senator Jeff Flake (R-Ariz.) recently introduced the Transportation Investment Calibration to Equality (TIRE) Act, which would eliminate prevailing wage requirements under the Davis-Bacon Act on all federal highway construction contracts.  In addition, U.S. Senator Mike Lee (R-Utah) introduced a bill to repeal all prevailing wage requirements under the Davis-Bacon Act (S. 244), and Representative Steve King (R-Iowa) re-introduced a companion bill in the House (H. 743), entitled the "Davis-Bacon Repeal Act."  

Federal law also requires federal contractors who provide certain services and manufactured goods to the Federal Government to pay prevailing wages under the McNamara-O'Hara Service Contract Act and the Walsh-Healey Public Contracts Act, respectively.  Although previous steps to repeal these laws failed (see., e.g., S. 1229 (1993), co-sponsored by Senator John McCain (R-Ariz.)), it seems likely that repeal efforts will be renewed under the current administration.   

Already complex prevailing wage requirements were expanded under the Obama administration.  Mistakes can be expensive and result in debarment. Federal contractors are, therefore, well-advised to stay informed and comply with their obligations.  Ater Wynne's labor and employment attorneys can provide assistance with your wage and hour questions.

BOLI Issues New Guidance Advising Manufacturers to Double Count Daily and Weekly Overtime

By Alexandra Shulman
February 1, 2017

In January, BOLI issued new guidance expanding the scope of overtime compensation owed to nonexempt employees who work in mills, factories, or manufacturing establishments.  The new guidance reverses BOLI's long-standing interpretation on this issue.

Under Oregon law, most nonexempt employees who work in mills, factories, and manufacturing establishments must be paid overtime for hours worked in excess of 10 in any day and hours worked in excess of 40 per week.  ORS 652.020ORS 653.261.  Until recently, BOLI advised manufacturers that "when employees who are entitled to daily overtime have worked more than 40 hours in the workweek and have also exceeded the maximum number of hours on one or more days, thereby earning daily overtime, the employer should calculate overtime hours worked on both the daily and weekly bases and pay the greater amount."  However, under the new guidance, BOLI states that covered employers must pay daily and weekly overtime compensation because "[t]he two statutes enact distinct overtime requirements and serve different purposes with respect to restrictions on hours worked by employees."

For example, if a manufacturing establishment employee works three daily overtime hours and one weekly overtime hour, under BOLI's previous interpretation of the overtime statutes, the employee should receive three hours of overtime compensation.  Under BOLI's new interpretation, the employee should receive four hours of overtime compensation.  Additional examples and information are available on BOLI's Technical Assistance website.

BOLI does not explain the reason for this sudden about-face, which is bound to catch many employers unaware.  In addition, the interpretation of the manufacturing overtime rule is currently being considered in a pending class action.  In light of these events, manufacturing companies in Oregon are well-advised to review their overtime practices with counsel.  Ater Wynne's employment group is available to assist with any questions on BOLI's new guidance.

Texas Court Issues Nationwide Injunction Against Overtime Rule

By Alexandra Shulman
November 22, 2016

Today, the U.S. District Court for the Eastern District of Texas issued a nationwide preliminary injunction blocking the U.S. Department of Labor ("DOL") from implementing its latest revisions to the Fair Labor Standards Act ("FLSA").

In March 2014, President Obama issued a memorandum directing the Secretary of Labor to "modernize and streamline" the existing overtime regulations for executive, administrative, and professional employees.  On May 23, 2016, the DOL published the Final Rule, increasing the salary level required to qualify for "white collar" overtime exemptions from $23,660 ($455 per week) to $47,476 ($913 per week).  Additionally, the Final Rule increased the total annual compensation requirement for "highly compensated employees" from $100,000 to $134,000.  The Final Rule was to take effect on December 1, 2016, with a mechanism for automatically updating the salary and compensation levels every three years.

A coalition of 21 states and more than 50 business organizations challenged the DOL's Final Rule in federal court, arguing that the Obama administration overstepped its authority.  The court ultimately concluded that the states established a prima facie case that the DOL's salary level under the Final Rule and the automatic updating mechanism are without statutory authority and issued a nationwide preliminary injunction.

Persuader Rule permanently enjoined

By Stacey Mark
November 16, 2016

In June of this year, we reported that a judge in Texas issued a nationwide preliminary injunction blocking enforcement of the Department of Labor's controversial Persuader Rule, which would have required disclosures by any consultant -- including a company's attorney -- who engaged in activities for the purpose of directly or indirectly persuading employees in connection with their right to union representation. In a November 16 order, Judge Sam Cummings made the earlier injunction permanent, with nationwide effect. Judge Cummings' order notes that his preliminary injunction is currently on appeal to the U.S. Court of Appeals for the Fifth Circuit.  

Given the upcoming change to a Republican administration, it seems unlikely that the Persuader Rule will be revived.

Our prior report on the Persuader Rule is available here.

Washington initiative increases employee wages and benefits

By Stacey Mark
November 10, 2016

The passage of Initiative Measure 1433 in Washington means that minimum wage workers who are at least 18 years old will see their wages increase from $9.43 to $11 per hour, effective January 1, 2017.  Subsequent wage hikes each year will increase the minimum wage in Washington to $13.50 per hour by 2020, after which the minimum wage will be adjusted for inflation each year. Employers are precluded from counting any portion of tips or service charges toward the minimum wage.

In addition, beginning January 1, 2018, Washington employers will be required to provide paid sick leave to all employees.  Sick leave will accrue at a rate of not less than one hour for each 40 hours worked by employees, who are entitled to carry over at least 40 hours of unused sick leave to the following year.  Although employers are not required to pay out unused sick leave upon termination of employment, employees who terminate with sick leave on the books are entitled to have their unused balance restored if they return to work with the same employer within 12 months.  Employers may permit the use of paid sick leave for other purposes.  Consequently, an employer that provides more generous leave benefits may choose to modify its existing plan to cover paid sick leave obligations under the new law.

Feds issue new anti-trust guidance for human resource professionals

By Stacey Mark
November 1, 2016

Competition is essential to a growing and healthy economy, which is widely said to benefit consumers.  However, according to the White House, when companies compete, it also benefits workers. 

Earlier this year, President Obama issued an executive order requiring executive departments and agencies to identify specific anti-competitive practices, such as blocking access to critical resources that may restrict meaningful consumer or worker choice or unduly stifle new businesses.  Departments and agencies were also tasked with identifying potential actions to address those anti-competitive practices and promote more competitive markets. 

In a separate statement, the White House cited research suggesting that low-wage workers without access to trade secrets are increasingly being required to sign non-competes, and that many workers are poorly informed about the existence and legal implications of their non-competes.  The White House called for individual states to address the anti-competitive impacts of non-competes, noting that such agreements negatively affect worker mobility and bargaining power, constrict the labor pool, prevent workers from launching new companies, and may ultimately restrict consumer choice.  The statement cited several examples of states, including Oregon, that have already taken steps to restrict the use and scope of non-compete agreements.

In furtherance of the President’s Executive Order, the FTC and the DOJ's Antitrust Division last week issued anti-trust guidance for human resource professionals and others who are involved in hiring and compensation decisions.  The targeted conduct includes express or implicit agreements not to compete on terms of employment by agreeing on wages or other terms and conditions of employment, or entering into “no-poaching” agreements that would minimize competition between employers that would otherwise compete for workers.  The guidance makes clear that “[a]ny company, acting on its own, may typically make decisions regarding hiring, soliciting, or recruiting employees.  But the company and its employees should take care not to communicate the company’s policies to other companies competing to hire the same types of employees, nor ask another company to go along.”   

Merely sharing information with competitors about terms and conditions of employment can run afoul of the anti-trust laws.  Even if an individual does not agree explicitly to fix compensation or other terms of employment, the exchange of competitively sensitive information could serve as evidence of an implicit illegal agreement.  The DOJ stated that it intends to criminally investigate and proceed against parties who enter into naked “no-poaching” and wage-fixing agreements, which are per se illegal under anti-trust laws.  The DOJ is empowered to criminally prosecute individuals, the company, or both.  Both the DOJ and the FTC may bring civil enforcement actions, and a private party injured by an agreement that violates anti-trust laws may bring a civil lawsuit for treble damages.

Not all information exchanges are illegal, however.  Parties may lawfully exchange information for legitimate purposes through a third party aggregator (e.g., a compensation survey), or in the course of determining whether to pursue a merger or acquisition.   Human resources professionals are often in the best position to identify and address practices that may cross the line. 

Employers need to stay abreast of the rapidly changing legal landscape as it pertains to anti-competitive conduct and agreements, as mistakes in this area of the law can have unintended, and sometimes devastating consequences.  To that end, employers should update their employee non-compete, non-solicitation, confidentiality, and assignment of rights agreements annually.  

The employment lawyers at Ater Wynne LLP are available to answer questions and help you stay current.

Update on DOL Persuader Rule

By Stacey Mark
June 28, 2016

Many of our clients have been contacted by law firms seeking to enter into agreements designed to avoid the effect of the Department of Labor’s Final Persuader Rule, which was scheduled to go into effect on July 1, 2016. The Final Rule interprets the Labor-Management Reporting and Disclosure Act of 1959, which requires disclosure of consultant activities undertaken with an object, “directly or indirectly,” to persuade employees with regard to their right to choose union representation or engage in collective bargaining. Employers and consultants previously were not required to file a report covering services that qualified only as “advice.” The DOL’s Final Rule significantly expands the scope of labor services that must be reported and narrows the exception for legal advice. However, the DOL said it would not apply the Final Rule to arrangements or agreements entered into prior to July 1, 2016.

On June 27, 2016, the U.S. District Court for the Northern District of Texas issued a nationwide preliminary injunction against the Persuader Rule. If that injunction is lifted or reversed, there could be an extension of time for employers to get an agreement in place, but employers cannot count on that happening. Therefore, it may be prudent to sign an agreement prior to July 1 to avoid the uncertainties surrounding the application of the Final Rule.

The employment lawyers at Ater Wynne LLP are available to answer questions about the Persuader Rule.