HIGHLIGHTS FOR THE MONTH OF JUNE 2008

By: Fiona W. Ong

RECENT DEVELOPMENTS

DOL Issues Opinion Letter On Hours Worked Under FLSA

In a recent opinion letter, the U.S. Department of Labor ("DOL") addressed the issues of missed meal breaks, overtime, and rounding off time under the Fair Labor Standards Act ("FLSA"). In responding to an employer's questions about its break and meal policy, the DOL offered the following guidance:

o No additional compensation is due if an employee misses an unpaid meal break but still works less than 40 hours in the workweek, as long as "the employee's total wages for the workweek divided by the compensable hours worked equal or exceed the applicable minimum wage."

o If an employee works more than 40 hours as a result of missing an unpaid meal break, the time worked during the missed meal break must be counted for purposes of determining overtime pay. As the DOL observed, "Before an employee can be said to be paid statutory overtime compensation due, the employee must first be paid all straight time wages due for all hours worked . . ."

o If an employee begins work before or finishes after his regularly scheduled hours but works less than 40 hours in the workweek, the employee is not entitled to additional compensation as long as "the employee's total wages for the workweek divided by the compensable hours worked equal or exceed the applicable minimum wage."

o If an employee receives certain types of overtime premium pay (e.g. for work in excess of specified daily or weekly work periods, or for working certain special days), the extra compensation does not need to be included in the employee's regular rate of pay for purposes of calculating overtime pay. Furthermore, the extra compensation may be credited towards any required overtime payments.

o An employer may round off time to the nearest five minutes, tenth of an hour, or even quarter of an hour, as long as over a period of time the employee is compensated properly for all time actually worked.

DOL opinion letters, which offer the DOL's interpretation of the FLSA with regard to particular situations or issues, are published on its website, and we expect this opinion letter to appear there soon. For a link to a PDF of the letter, click here.

Ninth Circuit Holds Government Employees Have Privacy Rights In Text Messages

The United States Court of Appeals for the Ninth Circuit held that a government agency's review of its employees' text messages violated the Stored Communications Act, and violated employee privacy rights under the U.S. and California Constitutions.

Facts of the Case. In Quon v. Arch Wireless, a police department contracted with a company to provide wireless text-messaging services for its employees. Although the employees had received and acknowledged a general computer and internet policy that stated that employees had no right of privacy in their use of computer network resources, their supervisor indicated that he would not review their text messages as long as the employees paid for any overages in use. Because of regular overages, however, the police department requested and received copies of the text messages from the text-messaging company in order to determine the amount of personal use.

The Court's Ruling. The Ninth Court determined that, under the Stored Communications Act, the wireless text-messaging company was an electronic communication service ("ECS"), and therefore could not release the text messages without the consent of the addressee or recipient of the communications. The consent of the subscriber, in this case, the police department, was not sufficient. This is significant to employers who provide such resources to employees, because employers will not be entitled to obtain copies of their employees' communications from the service providers without their employees' consent.

The Court further held that reviewing the text messages was a violation of the employees' Fourth Amendment rights to be free from unreasonable search and seizure and their right to privacy under the state Constitution, because the employees' supervisor advised that he would not review the text messages. The Court noted that, without such a statement, the employer's policies providing that it could monitor and review electronic transmissions and that employees had no reasonable expectation of privacy would have controlled.

Lessons Learned. Although private employers are not subject to the privacy provisions of the Fourth Amendment and most state constitutions, the lessons derived from this ruling are: (1) employers should establish electronic communications policies that clearly state that employees have no reasonable expectation of privacy in such communications through company-provided resources, (2) employers must ensure that these policies are actually followed and not countermanded by verbal statements or informal practices, and (3) employers should require an employee's consent to obtain and review such communications.

TAKE NOTE

Maryland Employers Must Track Race And Gender Information. A recently passed Maryland law, HB1156, now requires all employers in the State to maintain records of the racial classifications and gender of employees, in a manner and for a length of time soon to be specified by the State Commissioner of Labor and Industry. Under federal law, employers with more than 100 employees and federal government contractors with more than 50 employees are required to track and annually report (among other categories) workforce race and gender information by filing an EEO-1 form with the Equal Employment Opportunity Commission. The new State law now requires all employers in the state of Maryland to track race and gender information, regardless of size. The actual form of the new record requirement, as well as the length of time that such record must be retained, will be determined by the State Commissioner, who further may require Maryland employers to submit a report based on such records. The purpose of this law is to enable the State Commissioner to study pay disparity issues. Unless extended by the General Assembly, the law will expire in 2013, at which time this new tracking and reporting requirement will no longer apply .

Pennsylvania's No Smoking Law. On June 13, 2008, Governor Rendell signed the Clean Indoor Air Act into law, thereby prohibiting smoking in workplaces and most public places in Pennsylvania. The law, which takes effect 90 days from the date of signing, provides the following with regard to employers: o Prohibits smoking in places of employment, among other places. o Requires employers to post "No Smoking" signs or the international "No Smoking" symbol in the workplace. o Provides an escalating schedule of fines for violations. o Prohibits retaliation against an employee for exercising a right to a smoke-free environment under this Act. The Pennsylvania Department of Health will offer technical assistance to businesses on compliance with the new law.

Federal Contractors. President Bush has signed an Executive Order requiring employers with federal contracts to use the federal E-Verify system to confirm the employment eligibility of their workforce. Citing a concern that federal contractors who employ illegal aliens will have a "less stable" workforce and therefore be less dependable and efficient in the performance of federal contracts, the Executive Order requires federal contractors to verify the work eligibility status of all their employees. The Executive Order further states that federal contractors must use the electronic employment eligibility verification system designated by the Secretary of Homeland Security (known as "E-Verify"), which it deems "the best available means to confirm the work authorization of [an employer's] workforce." While the E-Verify system has been criticized as unreliable, the U.S. Citizenship and Immigration Services has recently announced that improvements have been and are being made to the system to improve its reliability and effectiveness.

FMLA Retaliation. The U.S. Court of Appeals for the Fifth Circuit held that the anti-retaliation provisions of the Family and Medical Leave Act ("FMLA") do not automatically protect co-worker spouses. In Elsensohn v. St. Tammany Parish Sheriff's Office, the plaintiff and his wife both worked for the same employer. The wife brought and settled an FMLA claim against the employer, during which the plaintiff offered his "moral support," but did not otherwise participate in her claim. Subsequently, the plaintiff was subjected to certain adverse employment actions. He claimed that these actions violated the FMLA, which protects individuals who "have given, or are about to give, any information in connection with any inquiry or proceeding . . . ; or have testified, or are about to testify in any inquiry or proceeding" pursuant to the FMLA. He also claimed that the adverse employment actions were retaliation for his association with his wife. ("Association" claims, based on a plaintiff's association with an individual in a protected category, are recognized under certain anti-discrimination statutes, such as Title VII and the Americans with Disabilities Act). While recognizing that individuals who participate in the FMLA claims of others are protected by the Act, (a point employers are well-served to remember) the Court determined that the plaintiff in this case had not engaged in such participation, as he had not testified and was not about to testify in his wife's case. The Court further refused to expand the anti-retaliation provisions of the FMLA to include an association claim.

TOP TIP

No-Loitering Rules May Violate The National Labor Relations Act

When drafting and implementing rules prohibiting loitering on company premises, regardless of whether their workforce is unionized, employers must carefully craft them to avoid infringing on employee rights under the National Labor Relations Act (NLRA). In Tecumseh Packaging Solutions, Inc., the National Labor Relations Board ("NLRB") found that a rule generally prohibiting "[l]oitering on Company property after working hours" violated the NLRA. The employer had implemented the rule to prevent violence and avoid liability for accidents and injuries. While acknowledging the validity of such concerns, the NLRB determined that the rule was "overly broad" and thereby constituted a violation of the NLRA. The NLRB found that the rule would reasonably chill employees in the exercise of their rights under Section 7 of the Act, such as their ability to discuss workplace concerns after work hours. The NLRB noted its decision "does not prevent employers from maintaining rules and policies tailored to those concerns" about employees remaining in the workplace after their work shifts are complete. When drafting such a rule or policy, employers should:

o Identify the legitimate concerns underlying the rule. These can include, but are not limited to, the concerns raised by the employer in the Tecumseh Packaging Solutions case (workplace violence, liability for injuries and accidents) as well as theft prevention, disruption to business activities, and interference with customer relations. Union avoidance is not a legitimate concern.

o Utilize language that specifically addresses the legitimate concerns, e.g. "employees may not engage in horseplay at any time on work premises."

o Consult with an attorney to ensure that the policy is appropriately tailored to address the concerns at issue.

For greater clarification of any of these issues, you may contact any Shawe Rosenthal attorney.

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