fisherphillips.com

KEEPING YOUR BUSINESS CLASSLESS

George A. Reeves III

greeves@fisherphillips.com

Phone: (803) 255-0000

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Today’s Objectives

•Educate

•Update

•Scare

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Consider This

Ken brings suit alleging his employer has failed to include bonuses paid to him in calculating his regular rate. As a result, he was improperly paid overtime for a period of 6 months.

At trial, the jury finds in his favor and awards him:

1. $365.00 in unpaid overtime

2. $730.00 in liquidated damages

3. $2,560.00 in costs

4. $25,000.00 in attorney’s fees

5. Total award = $28,655.00

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Now Consider This…

What if Ken was one of 100 current employees in this

position?

What if this is a high-turnover position?

How many employees have been in that position over the past 2

years?

How many employees have been in that position over the past 3

years?

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The Ins and Outs

Class Actions

• Title VII, ADEA, ADA, FCRA, state wage payment claims

• All members are included unless they opt out

• Damages and limitations of specific statute apply

Collective Actions

• FLSA, EPA

• Members are notified and must opt-in

• Damages: unpaid wages, liquidated damages, attorney’s fees and costs

• Limitations: 2 year/3 year

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Other Considerations

• Notice to current and former employees

• What about those who do not join?

• “Copycat” claims

• EPLI may not cover

• Time required to produce information

• Defense costs

• Bad press

• No confidentiality in settlements

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Top 10 Private Plaintiff Employment Discrimination Settlements of 2016

1. $19.5 Million – Qualcomm Inc. (Gender pay)

2. $15 Million – U.S. Department of Commerce (background)

3. $8.2 Million – Daiichi Sankyo (Gender pay)

4. $7.5 Million – Walmart Stores (Health benefits same-sex)

5. $7.21 Million – Comcast (Race)

6. $7.15 Million – Medicis Pharmaceutical Corp. (Gender)

7. $4.6 Million – BAE Systems Norfolk Ship Repair, Inc. (Gender)

8. $4.1 Million – Farmers Group (Gender pay)

9. $3.65 Million – New Jersey Transit (Race)

10. $2.19 Million - Publicis Groupe (Gender pay/pregnancy leave)

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Top 10 Private Plaintiff Wage and Hour Settlements of 2016

1. $240 Million – FedEx Ground Package System, Inc. (IC)

2. $226 Million – FedEx Ground Package System, Inc. (IC)

3. $41 Million – RS Legacy Corp. (FWW)

4. $36 Million – Bank of America Corp. (Misclassification)

5. $35 Million – Ecolab, Inc. (Misclassification)

6. $28 Million – Schneider National, Inc. (Meal/rest/wait time)

7. $27 Million – Lyft Inc. (IC)

8. $27 Million – Children’s Hospital Los Angeles (Overtime/breaks)

9. $19 Million – Robert Half International, Inc. (Misclassification)

10. $16.5 Million – Bob Evans Farms, Inc. (Overtime)

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Top 10 Government Initiated Settlements

1. $8.7 Million – Puerto Rico Police Department (DOL – overtime)

2. $8.6 Million – Lowe’s Co., Inc. (EEOC – disability)

3. $8 Million – Tesoro Corp. (NLRB – denied bonus payments)

4. $7.1 Million – PBI Bank, Inc. (DOL – ESOP)

5. $4.8 Million – Essex County, New Jersey (DOL – overtime)

6. $3.7 Million – Fred Fuller Oil Co., Inc. (EEOC – sex harassment)

7. $3.1 Million – Focused Technologies Imaging Services

8. $3.1 Million – City of Chicago (DOJ – national origin/citizenship)

9. $3.1 Million – New Prime, Inc. (EEOC – gender - training)

10. $2.1 Million – Mavis Discount Tire, Inc. (EEOC – gender – applicants)

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ERISA Settlements in 2016

• Total of top 10 settlements = $807.4 Million • Down from $9.26 Million in 2015

• Highest payout - $352 Million – Providence Health & Services

• Included treating plans as “church plans,” breach of fiduciary duties, failure to make contributions to retirement funds

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In Summary …

• Top 10 private plaintiff settlements = $1.58 Billion • Down from $2.48 Billion in 2015

• Top 10 government initiated settlements = $52.3 Million • Down from $82.8 Million in 2015

• Wage and Hour = $695.5 Million

• Discrimination= $79.81 Million

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In Summary . . .

• Total number of employment actions filed in 2016 (federal courts): • Wage and hour = 8,308

• Discrimination = 11,593

• ERISA = 6,530

• Most FLSA actions are filed as collective actions • Retail and hospitality industry saw largest number of suits

• Expect rise in discrimination cases as 2014 and 2015 saw record number of charges filed

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10 Ways to “Stay Classy”

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1. Have a Blanket Criminal History Prohibition

• Disparate impact claims still being brought

• Continued focus for EEOC

• No Blanket policies

• Consider: • The nature and gravity of the conduct/offense • Time that has passed since conduct/offense • Completion of sentence • Nature of job held or sought

• Conduct individualized assessment

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2. Violate the Fair Credit Reporting Act

• Hot class action topic • $5.7 Million – Autozone (200,000 applicants)

• $2.2 Million – Lowe’s (applicants)

• Easy class claim – same forms typically used for all employees or applicants

• Most claims come from authorization/consent forms • No forms

• Employer adding information to form

• Including release language on form

• Failure to give pre and post adverse action notice

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3. Charge Fees for Pay Cards

• Cheaper than checks

• Allowed under most state laws • Must allow free withdrawal, etc.,

• Class claims being filed regarding charging employees fees to check balances, make withdrawals, etc.

• Employers control the fees charged to employees • Companies charge more fees to make the cards cheap

• Employers can negotiate the fees/absorb costs

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4. Misclassify Your Employees

• Number of largest settlements in 2016

• Common issues • Classic exempt/Non-exempt misclassifications

• Making improper deductions from exempt salary

• Independent contractors

• Recent proposed changes to white collar exemptions provided opportunity to review positions • Also focused attention on potential misclassification

• If regulations are not amended what will happen?

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5. Don’t Pay Employees for Working During Breaks and Meal Time

• Employees must be paid if they perform any work during meal and/or break time

• If they are taking break/having meal at work station then they are likely performing work

• Train supervisors/managers

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6. “Off the Clock” Work

• Watch out for: • The overachiever who really doesn’t mind helping

• Employees being asked to get started on something before clocking in or after clocking out

• Smartphones/tablets with access to work email or server

• VPN access from home computer

• Exempt employees who have recently been reclassified

• Review/implement/enforce policies

• Train managers

• Use timekeeping apps

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7. Pay Women Less Than Men

• Equal Pay Act prohibits gender-based differences in compensation

• Employees often choose to pursue under EPA because statute provides for double damages (Title VII does not)

• Often brought together with Title VII claims (as collective action and class action)

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8. Pregnancy Leave and Accommodations

• Inconsistent application of policy

• Lack of policies

• Deviation from past practices

• Treat pregnancy leave/restriction issues the same as any other leave or accommodation • Young v. UPS – if you can accommodate light duty for a workers

comp restriction, you must accommodate for pregnancy

• Remains an EEOC focus

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9. Receive Numerous Charges of Discrimination

• Offices share information

• Request for Information seeking pattern and practice information • Expansive use of subpoena power

• EEOC focus on systemic claims • 2017-2021 Strategic Enforcement Plan focuses on systemic barriers

in recruiting and hiring

• FY 2016 EEOC stats: • 273 Systemic discrimination investigations • 21 settlements or conciliations = $20.5 Million • 31 of 86 lawsuits filed dealt with systemic claims

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Final Questions

Presented by:

George A. Reeves III

E-mail: greeves@fisherphillips.com

Phone: (803) 255-0000