EEOC Urges Employers to Improve Workplace Anti-Harassment Training

Calling workplace harassment an “all too persistent problem,” two commissioners from the Equal Employment Opportunity Commission (EEOC) are calling on employers to rework and improve their anti-harassment training programs. The commissioners headed a task force that evaluated sexual harassment in the work place. The EEOC’s chairperson seems to agree that more and better training is required. She said, “I thank Commissioners Feldbum and Lipnic and the members of the Select Task Force for their work to combat the persistent problem of workplace harassment. Preventing harassment from occurring in the first place is far preferable to remedying its consequences.”

The EEOC was created by the Civil Rights Act of 1964. It is charged with addressing workplace discrimination issues. It is the federal equivalent of the Massachusetts Commission Against Discrimination (MCAD), which has the same mission. In Massachusetts, training employees on sex harassment issues is not mandatory but is strongly encouraged. Whether and to what extent employers accused of sex harassment have done so is often an important issue at MCAD hearings.

Employers will be well-served to examine their workforces and consider how best to train their employees. Anti-harassment training should be tailored to the needs of individual businesses. Its goal should be to help employees understand what sexual harassment is, how it can damage individuals and companies, and how to deal with it as it arises. No anti-harassment program can be effective unless employees believe their employers are serious about it and are consequently unafraid to use complaint and other systems without fear of retaliation.

U.S. Dept. of Labor Issues New Rules for Overtime Pay

Effective December 1, 2016, new rules will be in effect to cover overtime pay requirements. The long-anticipated changes were the subject of numerous comments after they were proposed in 2015. They focus on updating the salary thresholds for overtime pay purposes and include the following:

  1.  An increase in the minimum salary that must be paid to white collar workers who otherwise are exempt from overtime pay requirements, from $455/week to $913/week ($47,476 per year). Workers who make less than these amounts must receive overtime, regardless of other factors;
  2. An increase in the ‘highly paid’ employee exemption for white collar workers from $100,000/year to $134,004/year. Workers whose earnings exceed these amounts will be exempt from overtime pay; and
  3. A mechanism for automatically adjusting the minimum and highly paid thresholds to keep up with inflation.

The Department expects the changes to cause 4 million new workers to qualify for overtime pay. The changes have been in the works since 2014, when President Obama instructed that the regulations be updated. After publishing proposed rules, the Department received nearly 300,000 comments.

 

Massachusetts Legislators Debate Bill to Provide 12 Weeks of Paid Leave for Employees

The Massachusetts state legislature is considering a bill that would not only provide family leave for employees who now are not entitled to it, but would set up a fund to pay at least part of their lost wages.

Titled “An Act establishing a family and medical leave and temporary disability leave insurance program,” the bill has numerous sponsors in both the House and Senate.  It is currently being considered by the Labor and Workforce Development Committee and is due to be reported out on May 16. Citing the large number of Massachusetts employees who are not entitled to leave provided by the Family and Medical Leave Act (FMLA) due to company size – and decrying the fact that FMLA leave is unpaid and thus difficult for many employees to use in any event – the bill’s sponsors contend that the new law is needed to protect employees who face serious personal or family emergencies.  Among its provisions as currently formulated are the following:

  1. 12 weeks of job protected leave for serious personal /family illness or to care for a newborn, adopted or foster child;
  2. Partial wage replacement in the form of temporary disability coverage that will be funded by employer contributions;
  3. Continued coverage by employers for health care on terms in effect for employees before they begin a leave; and
  4. A one-week waiting period in cases of personal illness and an exemption from funding obligations for employers who provide paid leave benefits, both of which are aimed at controlling costs.

Eligibility for the Act’s benefits would begin after an employee works 1,250 hours for his/her employer. Penalizing employees who take leave would be prohibited. If enacted, the new law will be administered by the Massachusetts Commission Against Discrimination (MCAD). Violators will be subject to the same penalties as apply in discrimination cases generally, including payment of an affected employee’s lost wages, emotional distress and legal fees.

Enforcing Noncompetition Agreements Requires Advance Planning, Strong Evidence

In a case that points up the difficulties employers often have enforcing noncompetition agreements while simultaneously highlighting how potentially damaging the restrictions can be to employees, a superior court judge recently denied an attempt by a hair salon to block two of its employees from moving to a competitor. It’s not the first time Massachusetts courts have refused to apply noncompetition agreements to hair stylists, whose work involves personal customer relationships that employers have difficulty penetrating even if otherwise valid restrictive covenants are in place.

In Elizabeth Grady Face First, Inc. v. Garabedian, et. al., the Middlesex Superior Court refused to block the employees’ use of the so-called ‘Elizabeth Grady Way’ for competitor Sofia E. Day Spa. It found that the plaintiff did not meet its noncompetition burden of submitting evidence that its way of doing business was proprietary or confidential. On the contrary, the court found, Elizabeth Grady trains both employees and non-employees at its schools, and the latter are free to take what they learn and compete in the marketplace. The court concluded that enforcing a noncompetition agreement against employees with only this sort of job knowledge would stretch the reach of restrictive covenants beyond what’s permitted by Massachusetts law. Notably, the court found, there was no allegation that the employees improperly solicited Elizabeth Grady’s customers. The contractual restriction against the employees working for a competition within 25 miles of their former employer was thus not likely to succeed.

The case is instructive to employers and employees alike. For businesses, it points up the need to amass a full and complete record when seeking to enforce noncompetition agreements. It is the employer’s burden in all such cases to demonstrate that their former workers are acting unfairly – cheating, if you will. The failure to do so is among the most common reasons that restrictions against competitive employment are denied by courts in Massachusetts, and employers should remember that simply having a valid contract with specific work restrictions is not enough to justify enforcement. For employees, the Elizabeth Grady case sends an equally important message: be wary what you sign. Regardless of the outcome in this and other cases, the defense of even a failed effort to enforce a noncompetition agreement is costly, time-consuming and stressful. It almost always drains valuable resources that are better spent elsewhere. Whenever possible, employees should decline to sign noncompetition forms or, if that’s not possible, seek to modify them in reasonable ways.

Wage Act may not Require Pay for All Hours of Work

In a recent decision that some plaintiff-side employment lawyers found surprising and perhaps troubling, a judge of the superior court held that an employer does not need to pay for all hours that its employees work. The employer did not violate the Massachusetts Wage Act, Justice Robert Gordon found on February 5, because it honored agreements it entered with its workers and did not transgress minimum wage or overtime laws. He wrote,

“[A]n employer and employee who agree at the outset of their contract that the employee will be paid at an hourly rate for selected tasks, but not for all work, are plainly not violating the Wage Act when the employee is paid in accordance with this agreed understanding. To the contrary, an employer who pays an employee as he has agreed to be compensated—provided (as here) that it complies with all applicable minimum wage and overtime laws—has fulfilled the core aspiration of this statute.”

The facts of the case are important. The plaintiff sought to represent a class of auto mechanics who work on a rate pay basis — that is, they are paid specific hours at agreed rates for work they perform on automobiles. While this arrangement resulted in wages in excess of minimum requirements, it also caused the mechanics to necessarily perform daily task for which they were not paid, such as filing paperwork and cleaning their work stations. They also received no pay for down time despite being required to be present for certain hours each day. Because the employer and employee agreed to this arrangement and did not violate other laws, the court found that it did not violate the Wage Act.

The decision may be an important one for employers who do not pay their workers on either hourly or salary bases, such as those that pay only sales commissions or base employee pay on deliveries of good or services. It addresses a previously open question for those employers that is likely to be revisited by appellate courts in the future. The case is Salerno v. Baystate Ford and is pending in Middlesex Superior Court.

 

State Legislators to Renew Effort to Enact a Noncompetition Law

Though they’ve failed in several tries to reach a compromise on legislation to regulate the use of noncompetition agreements, the Massachusetts legislature is poised to try again. This time, House Speaker  Robert DeLeo seems willing to lead an effort that will include several specific components.

Mr. DeLeo said as much on March 2, according to Massachusetts Lawyers Weekly, when speaking with local business people. He reportedly highlighted three major components that might be part of 2016 noncompetition legislation:

  1. A limit on restrictive covenants to a maximum of 12 months after employment ends;
  2. A requirement that employees get advance notice of noncompetition agreement requirements before they accept a new job; and
  3. A restriction against using non-competes for workers in low wage jobs.

Time will tell whether these ideas or others can become reality in Massachusetts. The notion of noncompetition legislation has been around for some time but has never gained traction in the legislature. Prior to his departure as governor, Deval Patrick made several pushes to enact a bill with varying terms. Because no law on the topic exists, judges are left to decide on a case-by-case basis when restrictions on work are enforceable and to what extent they are valid. That approach commonly leads to expensive litigation as employers fight with their former employees about what they can and cannot do at their new jobs and, sometimes, whether they can work at them at all.

Massachusetts Attorney General Collects Pay Disparity Data from Employers

In apparent anticipation of proposed changes the state legislature is now considering making to the Massachusetts Equal Pay Act – or, perhaps, in an effort to help determine whether and what changes may make sense – the Massachusetts Attorney General is reportedly using its general records inspection authority to demand a wide range of new employee data.

A recent article by Massachusetts Lawyers Weekly reports that the requests differ from those normally sent by the AG. They seek more demographic data and job details with an apparent focus on whether pay disparities based on gender and/or race exist. The requests ask for information such as employee names, genders, ethnicities, job titles, pay, and job descriptions.

The AG has general authority to seek certain payroll and related information from Massachusetts employers. It typically does so as parts of audits or investigations that may be initiated by specific employee complaints about pay practices. Employers from whom such information is sought are generally required by statute to provide it, and it therefore behooves them to ensure that the full and complete records required by law are properly maintained. Penalties and other damages can flow from failures to do so.

Small Employer Forced to Pay more than $100,000 for Wage Violations

A local grocer is learning the hard way how important it is not only to properly pay employees under state wage laws but to keep good records demonstrating that it did so. Following an investigation by the Massachusetts Attorney General’s wage and hour office, the employer was compelled to pay $84,000 in back wages and $21,000 more in penalties. As if that’s not enough, the store and its owner also had their names posted on the Attorney General’s web site so that all could read about their violations of state laws.

The case illustrates the importance of understanding and complying with Massachusetts laws that cover the payment of wages. They include the state’s Wage Act, which requires that employees receive pay for all hours — and minutes — they work and provides mandatory triple damages and legal fees against employers who fail to comply. Massachusetts also has its own overtime and minimum wage statutes, each of which provides broader benefits to employees than do federal counterparts. The state mandates that all employers keep accurate records of hours worked by and payments made to their employees, among other things, and generally requires that workers be treated as employees and not independent contractors. The mandatory triple damage and legal fee rules normally apply to legal transgressions in any of these areas.

New Equal Pay Bill Makes Progress in State Legislature

A bill to replace Massachusetts’ aging equal pay law is making progress in the state legislature and may be heading for final approval. Late last week, a Senate committee produced a revised version of the pending legislation and recommended that it be passed.

The existing law, known as the Massachusetts Equal Pay Act (MEPA), was enacted in 1945. It generally prohibits employers from paying women less than men for comparable work. Because court interpretations of what’s required to demonstrate violations of the law have made enforcement difficult — women’s pay continues to lag behind men’s pay in the Commonwealth — a revised MEPA was proposed and is broadly supported in both branches of the state legislature. It would, among other things:

  1. Make enforcement easier by eliminating the requirement that plaintiffs prove that the substantive content — that is, the specific job duties — are “comparable;”
  2. Extend the statute of limits on comparable work claims to three years;
  3. Invalidate certain defenses and the requirement of filing with the Massachusetts Commission Against Discrimination (MCAD) as a prerequisite to suit; and
  4. Make employer rules against employees discussing their pay with each other illegal.

Employers that, within the 3 years that precede a claim, complete a pay practices self-evaluation and demonstrate reasonable progress in eliminating pay differentials based on gender may escape liability under the bill. Successful plaintiffs will be entitled to double damages and legal fees under the proposed new law, just as they currently are. Agreements to avoid equal pay will not be enforceable. The new law will, of course, be effective to protect both men and women against unequal pay for comparable work.

Massachusetts Minimum Wage Now at $10/Hour

Effective January 1, 2016, the Massachusetts minimum wage was increased to $10/hour. The increase is part two of a three-part process that will increase the minimum wage to $11/hour on January 1, 2017. The state’s minimum for tipped employees — those who regularly receive tips as part of their wages, such as waiters and waitresses — is now $3.35/hour. The total hourly rate for tipped employees must be no less than the state’s minimum of $10/hour, inclusive of tips actually received, and employers must make up any hourly shortfall. Due to strong penalties contained in the Massachusetts Wage Act, all employers should be certain that minimum wages and all other amounts due to employees for work performed are paid in full.