Monthly Archives: January 2012

NLRB Issues New Summary of Social Media Cases

In a follow up to its early memo summarizing social media cases, the NLRB Office of General Counsel has issued an updated report discussing its social media cases from the past year.

It does not forge much new ground. The two big takeaways are still: (1) the need for narrowly tailored policies that don’t restrict legitimate organization and; (2) that employees may still be disciplined for posting complaints online about their work/coworkers that do not legitimately relate to wages or other protected activity.

Social media isn’t going away, so employers must adapt with rules and policies recognizing their employees’ rights to coordinate while still maintaining effective discipline for disparaging online matters.

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Internal Complaints Enough for Retaliation Suit Under FLSA

In a case of first impression, the Fourth Circuit Court of Appeals held that an internal complaint about an employer’s failure to pay overtime could form the basis of a FLSA retaliation claim.

In Minor v. Bostwick Laboratories, an employee complained to her company’s chief operating officer that employees were not being paid for overtime worked. She was fired soon thereafter. The trial court ruled in the employer’s favor, holding that the intracompany complaint (as opposed to a complaint to a governmental agency or court) could not be the basis for a retaliation lawsuit.

The Fourth Circuit disagreed. It held that an internal complaint was sufficient to trigger protection under the FLSA retaliation provisions.

Don’t Forget About Plan Damages

A federal court in California, while rejecting an employee’s claim for damages, provided a good reminder of what all is at stake in wage discrimination litigation. Obviously, employees can recover back wages, compensatory damages, and, on occasion, things like punitive damages in employment discrimination cases.┬áBut employers also face another potentially large issue: retirement plan contributions.

If employers are forced to pay back wages to make up for discriminatory compensation in the past, they may also have to make equivalent contributions to the employees’ retirement plans.

For example, an employer may make a 3% employer contribution on behalf of an employee with artificially low compensation due to discrimination. If the employee recovers those wages, the plan sponsor then has a fiduciary duty to make up the differential. This could prove costly in large class actions or cases in which alleged discrimination has continued for years.

Fee Disclosure Rules Result in More Affordable 401(k)s

The USA Today reports that in anticipation of new fee-disclosure rules by 401(k) providers, several plan providers are rolling out new, more cost-effective plans for smaller employers.

Smaller employers typically find their fees for 401(k) providers are up to twice as much as large plans. The Department of Labor has introduced new fee-disclosure rules that will require simpler explanations of the fees plan providers charge.

If you are a small employer who’s let the cost of 401(k) administration keep you away, it may be a good time to rethink.

EEOC Releases Draft Strategic Plan for Comment

The EEOC has released a draft of its 2012-2016 Strategic Plan for public comment.

The Plan, which sets out EEOC’s goals and initiatives for the next four years, is now open for comment. It focuses largely on systemic discrimination and a reduction of backlogged charges.

Its focus is unsurprising, especially given the EEOC’s recent attention on nationwide issues such as using arrest and conviction records and credit checks, and the interaction between the FMLA and the ADA.

And, hopefully, the backlog issue will speed the process to resolve charges more quickly.

Proof of Competition Not Required Under Trade Secrets Act

The Virginia Supreme Court last week rejected the argument that an employer must prove that a former employee who took trade secrets to his current employer was actually in competition with the prior employer.

The trial court dismissed the GSI’s (the former employer) claim against the employee, now employed by Boeing. GSI argued the employee took its trade secrets and was using them at Boeing. The trial judge ruled that GSI’s claims must be dismissed because it failed to prove that the employee was “in competition” with GSI in his current role at Boeing.

The Virginia Supreme Court reversed. It held that the Trade Secrets Act does not require the former employer to prove direct competition. The Court did, however, remind that the Trade Secrets Act requires a showing of concrete damages, which may effectively require a showing of competition to prove.

U.S. Supreme Court Upholds “Ministerial Exception” to Employment Discrimination Laws

The U.S. Supreme Court has settled the so-called “ministerial exception” issue exempting religious organizations from federal antidiscrimination laws based on their hiring and firing of “ministers.”

The Court held that a religious-school teacher, who was also a “minister” in the same denomination, could not maintain her lawsuit alleging she was fired in violation of the ADA. The Supreme Court ruled that the First Amendment prohibits the application of any federal employment discrimination laws to the hiring and firing decisions of a religious organization’s ministers.

Although it didn’t explicitly define who is a “minister,” it held that the school teacher was because she led the students in prayer and devotions (among other things), even though she taught the same curriculum as non-minister teachers.