By Sean F. Herrmann
The 4th U.S. District Court of Appeals has been relatively quiet as of late, at least with respect to employment law, but there are two fairly recent decisions worth flagging. On Nov. 28, 2017, in a published decision, the Fourth Circuit affirmed the Western District’s grant of summary judgment in Penley v. McDowell County Board of Ed., No. 16-2034 (http://www.ca4.uscourts.gov/opinions/162034.P.pdf). Penley, the plaintiff below, was a teacher at McDowell County High School (“MHS”). After Penley allegedly made an inappropriate comment to his students, MHS suspended him in April 2013. MHS investigated the allegation and recommended that Penley be dismissed. Penley, in turn, brought action against MHS’ principal, superintendent, and board of education, alleging that MHS’ decisions were in retaliation for Penley’s political speech, which was his participation in political campaigns. Judge Cogburn found no credible evidence connecting Penley’s participation in political campaigns to his termination and granted summary judgment. Circuit Judges Wilkinson, Duncan, and Thacker affirmed the decision.
By Logan H. Shipman
On Oct. 18, 2017, Gov. Roy Cooper signed Executive Order No. 24, and he tweeted that North Carolina was taking “another step forward” in making North Carolina a more “welcoming place to all.” The EO prohibits discrimination, harassment, or retaliation on the basis of any of the following protected classes:
race, color, ethnicity, national origin, age, disability, sex, pregnancy, religion, National Guard or veteran status, sexual orientation, and gender identity or expression.
By Rachel Hairr
The Employee Fair Classification Act (EFCA), adopted by the North Carolina General Assembly in August, goes into effect on December 31, 2017. Here’s what employers and employees need to know.
The EFCA’s Purpose
The EFCA was enacted to address the practice of misclassifying employees as “independent contractors,” an issue which gained state-wide, and later national, attention in 2014. By classifying workers as independent contractors, employers can avoid paying state and federal payroll taxes, unemployment taxes, and providing worker’s compensation insurance, which would be legally required if the worker were classified as an employee. The practice of misclassification is particularly rampant in such industries as the construction industry.
I have had the honor and privilege as Section Chair to have lunches around the state with our lively and interesting Section Members. The latest gathering was a great turnout and a fun group at Babalu in Charlotte for $2 Taco Tuesday.
If you would like to schedule a lunch, dinner or any type of networking event in your community for Section Members please let me know and I will coordinate with the NCBA so that the membership has notice. I am happy to help.
Getting to know each other is one of the best benefits of Section Membership!
Best to all,
M. Ann Anderson
By Joseph S. Murray IV
A roundup of notable labor and employment law opinions from the past several weeks:
- Schilling v. Schmidt Baking Co., No. 16-2213 (4th Cir. Nov. 17, 2017): Are employees who drive assorted vehicles in a mixed fleet—a fleet with vehicles weighing more and less than 10,000 pounds—entitled to overtime? Ruling: Yes, the SAFETEA–LU Technical Corrections Act of 2008 amended the FLSA so that employees who drive “in whole or in part” motor vehicles weighing 10,000 pounds or less are entitled to overtime. Court does not decide if there is some de minimis amount of time an employee can drive a vehicle that weighs less than 10,000 pounds and still be exempt.
- Plotnick v. Computer Sciences Corp., No. 16-1606 (4th Cir. Nov. 8, 2017): ERISA case dealing with standard of review that applies to top-hat plan administrator’s benefits decisions. Ruling: No need to decide which method to use, plaintiffs lose no matter what.
- Munive v. Fairfax County Sch. Bd., No. 17-1692 (4th Cir. Nov. 7, 2017) (unpublished): Employer’s failure to remove a reprimand letter as promised, which allegedly led to plaintiff not receiving a promotion, may constitute retaliation. Ruling: Pro se’s Title VII retaliation claim should not have been dismissed.
- Freedman & Sons, Inc. v. NLRB, No. 16-2066 (4th Cir. Nov. 7, 2017) (unpublished): Court finds that NLRB’s ruling that employer discriminated against employee for engaging in protected activity and interfered with employee’s exercise of NLRA rights was supported by substantial evidence.
- Trejo v. N.C. Dep’t of State Treasurer Ret. Sys. Div., COA16-1182 (N.C. Ct. App. Nov. 7, 2017): Does the State Disability Income Plan have the right to offset benefits by the amount of hypothetical Social Security disability payments? Ruling: State law at the time said the Plan must offset the “Social Security disability benefit to which the beneficiary might be entitled,” so plaintiff loses even if she didn’t receive Social Security disability benefits.
- Randolph v. Powercomm Construction, Inc., No. 16-2370 (4th Cir. Oct. 31, 2017) (unpublished): Parties settle FLSA collective action claim for $100,000; plaintiffs had alleged damages of up to $790,000. District court awards attorney’s fees of $183,764. Defendant appeals. Ruling: District court failed to support decision to not deduct fees for work on dismissed plaintiffs’ claims from the award and improperly calculated the reduction based on the plaintiffs’ lack of success. Vacated and remanded.
- Borzilleri v. Mosby, No. 16-1751 (4th Cir. Oct. 17, 2017): Assistant State’s Attorney (ASA) supports incumbent State’s Attorney in a bruising primary battle. Incumbent loses and his opponent promptly terminates ASA upon taking office. ASA sues claiming violation of 1st Amendment. Ruling: ASAs are policymakers who are exempt from the First Amendment’s protection against patronage dismissals.
- Wray v. City of Greensboro, No. 255A16 (N.C. Aug 18, 2017): City claims sovereign immunity in lawsuit by former police chief seeking reimbursement for legal costs. City has resolution stating it will provide for the defense and indemnity for police officers sued based on their actions taken within the scope and course of their employment. Ruling: The resolution is part of the employment contract, and since sovereign immunity is not a defense in a contract claim, plaintiff can proceed with claim.
By Zachary Anstett
A recent Fourth Circuit decision held that alleged statements from a supervisor that included, “We don’t want women working in the morning” and “I don’t want three women on my schedule,” were not sufficient to support a plaintiff’s claims of discrimination or harassment in violation of Title VII. In the unpublished opinion issued October 10, 2017, the Fourth Circuit also stated that placing the plaintiff on a Performance Improvement Process (“PIP”) did not constitute an adverse action that could support her discrimination or retaliation claims. The panel, consisting of Judges Niemeyer, Traxler, and Keenan, affirmed the District Court’s grant of summary judgment for the employer.
By Joseph S. Murray, IV
The EEOC filed two lawsuits in the past couple of months that show one of two things: (1) massive companies are cruel and heartless, with HR Departments that don’t understand the ADA, or (2) the EEOC, despite its own statements in guidances and regulations, continues to believe that the ADA allows employees to take repeated, unforeseeable intermittent leave.
In August, the EEOC filed a lawsuit against Macy’s, Inc., alleging Macy’s fired an employee with asthma for a one-day absence due to complications arising from her disability. EEOC Sues Macy’s For Disability Discrimination (Aug. 16, 2017). In late September, the EEOC filed a lawsuit against Whole Foods Market Group, Inc. alleging that Whole Foods terminated an employee with polycystic kidney disease after she missed work two times in December 2015, due to hospitalizations related to her kidney disease. Whole Foods Market Sued by EEOC for Disability Discrimination (Sep. 28, 2017). In both cases, the EEOC alleges that the companies violated the ADA by failing to modify their leave and absentee policies as reasonable accommodations to allow the employees to take leave related to their disabilities.
By Sean F. Herrmann
Gamblers aren’t the only ones complaining about pay-outs in North Carolina casinos. According to a class/collective action complaint (Clark v. Harrah’s NC Casino, LLC, 1:17-cv-240) filed on August 31, 2017, in the Western District of North Carolina, Harrah’s NC Casino Company, LLC, has failed to pay employees wages and overtime compensation.
Joseph Clark, the named plaintiff, filed on behalf of himself and other similarly situated employees at Harrah’s Cherokee Valley Rivery Casino & Hotel and Harrah’s Cherokee Casino Resort, both of which are operated by Harrah’s NC Casino Co. The complaint includes both Fair Labor Standards Act and North Carolina Wage and Hour Act claims.
Specifically, the complaint states that “Harrah’s willfully, deliberately, and voluntarily failed to pay Plaintiff and other similarly situation gaming floor employees all overtime compensation in violation of the FLSA by requiring them to perform work during their meal breaks, but subjecting them to an automatic 30-minute meal break deduction.” It also explains, “Harrah’s willfully, deliberately, and voluntarily failed to pay Plaintiff and similarly situated gaming floor employees all promised and earned wages on their regular pay day for all hours worked in violation of the NCWHA by requiring them to perform work during their meal breaks, but subjecting them to an automatic 30-minute meal break deduction.” It further alleges violations of the FLSA and NCWHA related to requiring the plaintiff and similarly situated employees to perform work without pay prior to the start of their scheduled shifts.
Clark, in the complaint, asserts that the NCWHA class could be comprised of at least 1,000 individuals. This case is in its infancy, but it’s one to keep an eye on.
By Michael B. Cohen
Under § 213(a)(3) of the Fair Labor Standards Act (FLSA), employees of seasonal “amusement or recreational establishment[s]” are exempt from the statute’s minimum wage and overtime protections. In order to qualify as an exempt establishment pursuant to § 213(a)(3), an amusement or recreational establishment must: (1) not operate for more than seven months in any calendar year; or (2) accrue, during any six months of the preceding calendar year, average receipts of not more than one-third of its average receipts for the remaining six months of such year. Examples of such establishments, according to the legislative history discussing the 1966 FLSA amendment, include “amusement parks, carnivals, circuses, sport events . . . or other similar or related activities . . . .” H.R. Rep. No. 871, 89th Cong., 1st Sess. 35 (1965).