Volume 8, Issue 4
April 2019
EEOC reached a $700,000 Settlement with IHOP Franchisees over Sexual Harassment 

The EEOC reached a $700,000 settlement with IHOP franchisees over sexual harassment charges. The lawsuit claimed that IHOP franchises in Nevada and New York had a policy, in place since 2005, requiring employees to report any sexual harassment within 72 hours of the incident to a national office or waive the right to recovery. In their complaint, the EEOC alleged the "onerous requirements" of the policy created an atmosphere where employees and managers "regularly and continuously engaged in sexual harassment". Additionally, the agency stated that many employees, who did report, had hours reduced with some being terminated. 

The consent decree has the defendants paying $700,000 to a class of female employees, eliminating the 72-hour policy, hiring an outside monitor, and providing extensive training on harassment and retaliation to all employees including managers and supervisors.

The EEOC announcement reminded employers that sexual harassment remains a problem and that any impediments on the ability of employees to complain only intensifies the problem. In a statement, Wendy Martin, director of the EEOC's Las Vegas office said "Employers should remember that they are responsible for creating an environment free of harassment... This includes empowering managers to address such conduct when they become aware of it."
Proposed Amendment to Fair Labor Standar Act (FLSA)

Proposed amendments to Fair Labor Standards Act (FLSA) regulations will alter white-collar overtime exemptions. The US Department of Labor (DOL) issued these proposals on March 7, 2019. The proposals will increase the minimum salary necessary to qualify for the executive, administrative, or professional exemptions.

When efforts to increase these salary levels were rejected by a Texas federal district court, the DOL went back to the drawing board and has issued its revised proposals. The new proposals address only the salary tests with the following increases:
  • Minimum weekly salary requirement rises to $679: $35,308 per year
  • Total annual compensation requirement HCE status rises to $147,414
The increases come with previously unavailable flexibility. DOL proposes that employers be permitted to pay 90% of the weekly threshold ($611.10) in salary and make up the remaining 10% in non-discretionary bonuses and/or commissions. If the weekly salary and (10% of the) non-discretionary compensation did not satisfy the annual salary threshold of $35,308, e mployers will also be able to make a catch-up payment.

Employers may not use non-discretionary compensation to satisfy the minimum weekly standard requirement for the HCE exemption.

Proposed regulations are open for public comment until May 21, 2019. Thereafter, DOL will evaluate those comments and issue a final rule (which may be altered from the proposed regulations). DOL anticipates that these regulations will become effective in January 2020.

These proposed regulations remind employers to stay vigilant in monitoring exempt classifications. Litigation challenging exempt classifications continues apace (and most often as class or collective actions sweeping in large numbers of employees with high dollar exposure in potential damages).
Employers May Not Delay FMLA Designation

Often, employees ask if they can first use paid time off, available under the employer's leave policies, in order to save their unpaid, protected, Family and Medical Leave Act (FMLA) leave. While many employers permit this approach, they are not realizing that both paid and unpaid FMLA leave can run concurrently.

On March 14, 2019, the DOL issued an opinion letter against this practice, stating that "the employer may not delay designating leave as FMLA-qualifying, even if the employee would prefer that the employer delay the designation." 

In reaching this conclusion, the DOL relied heavily on the FMLA regulation precluding the waiver of FMLA rights, stating that, in light of the prohibition on such waivers, neither the employee nor the employer "may decline FMLA protection" for FMLA-qualifying leave. The DOL also noted that delaying FMLA leave until after paid leave is exhausted would run afoul of the regulation that requires employers to provide the FMLA designation notice within five business days of having sufficient information to determine that leave is for an FMLA-qualifying reason. 

The opinion letter assures that when an employee takes leave for an FMLA-qualifying reason, the employee receives the protections of the FMLA, both with respect to the ability to take leave in the first place, and with respect to other protections such as the right to reinstatement following the conclusion of such leave.
Upcoming Management Update Seminars



Breazeale, Sachse & Wilson, L.L.P. Labor & Employment Attorneys

John T. Andrishok
john.andrishok@bswllp.com
225.381.8020
Murphy J. Foster, III
murphy.foster@bswllp.com
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Philip Giorlando
philip.giorlando@bswllp.com
504.680.5244
225.381.8056
Rachael Jeanfreau
rachael.jeanfreau@bswllp.com
504.584.5467
Steven B. Loeb
steven.loeb@bswllp.com
225.381.8050
Eve B. Masinter
eve.masinter@bswllp.com
504.584.5468
Sunny Mayhall
sunny.mayhall@bswllp.com
225.381.8049
Matthew M. McCluer
matthew.mccluer@bswllp.com
504.584.5469
E. Fredrick Preis, Jr.
504.584.5470
Jacob E. Roussel
jacob.roussel@bswllp.com
225.381.3172
Melissa M. Shirley
melissa.shirley@bswllp.com
225.381.3173
Jerry L. Stovall, Jr.
jerry.stovall@bswllp.com
225.381.8042

Cody Waagner
cody.waagner@bswllp.com
225.381.8049

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