Entries by Neil Klingshirn

Rep. Bill Seitz (R) Cincinnati introduced House Bill 690 on November 29 to implement Ohio's new minimum wage law. The bill could be passed by the outgoing General Assembly and signed by ougoing Governor Taft before he leaves office. You should be able to track the progress of HB 690 here.

A quick glance indicates that HB 690 may restrict rights available to employees under Issue 2. For example, Issue 2 requires "employers" to pay "employees" the minimum wage, with only the exceptions contained in Issue 2. HB 690 would make exemptions from the minimum wage under federal law apply to the minimum wage payment under Issue 2. See proposed new ORC section 4111.14(B)(1) ("The term "employee (under Issue 2) incorporates any applicable exemptions from the inimum wage requirements in the Fair Labor Standards Act. . . .") The federal exemptions are found in 29 USC 213(a)(1) through (17). The federal exemptions that HB would incorporate into Issue 2 cover employees in a wide number of different industries, plus white collar workers and outside salesmen.

One of the exemptions made by HB 690 applies to small summer camp operations. This could help the hypothetical summer camp in my previous post. However, since Issue 2 allows only the exceptions to payment of the minimum wage contained in Issue 2 itself, the General Assembly probably does not have the authority to enact additional exemptions for, among others, summer camps.

Non-profits have been asking the most questions about Issue 2 this week. A question from a non-profit summer camp is a good example, being whether camp counselors are covered. The short answer, it appears, is "yes." The following explains why I reach this result. I have no pride in authorship so, if you spot a flaw in the argument, please let me know in a comment or an email.

First, is there a general exclusion for non-profits? No, with the possible exception of an employee engaged as a minister for a religous entity. Even the religious exception is not at all clear under Issue 2, so do not rely on it without an opinion from employment counsel.

Second, must a summer camp pay its counselors the minimum wage? This is important because, right now, most summer camps do not have to pay the minimum wage to their counselors. Issue 2 may change that.

To reach this result we look at two main issues, being:

1. whether the camp is an "employer" covered by a minium wage law and if so,
2. whether its any of its employees in general, or camp counselors specifically, are excluded from coverage.

To answer these two questions, we must look at 3 different minimum wage laws, being:

1. Ohio's current law, which still exists;
2. Ohio's new minimum wage law (Issue 2) and
3. existing federal minimum wage law.

These three laws will exist going forward and will interact with each other. Further, if any one of them applies to the camp without an exclusion of the counselor from coverage, the camp will have to pay the minimum wage. (If any two of them require payment of different minimum wages, the employer must pay the higher wage in some, but not all, cases; more on that later).

Is the summer camp an "employer" covered by the federal minimum wage law?

The camp is an "employer" under federal minimum wage law but, because the Fair Labor Standards Act (the FLSA) does not cover all employers, most camps are not covered by the FLSA.

The FLSA defines "employer" basically to mean any person (including a non-profit company) that pays an employee. The FLSA does not, however, cover all employers. The FLSA only covers employers who are engaged in commerce or the production of goods for commerce. Therefore, if the summer camp is not engaged in commerce or the production of goods for commerce, which is usually the case, then it is not covered by the federal minimum wage law, even though it meets the definition of an "employer." Again, that is because the federal law does not cover all employers, just those engaged in commerce.

Is the summer camp an employer under Ohio law?

Assuming that the camp is not covered by federal law, Ohio minimum wage law might still apply to it. Ohio has a definition of "employer" similar to the FLSA's but Ohio law excludes an employer whose gross volume of sales is less than $150,000. Therefore, the camp could be excluded from Ohio minimum wage coverage as a small employer.

Even if the camp is not excluded as a small Ohio employer, Ohio law specifically excludes camp counselors. Thus, if the camp has revenues over $150,000, it need not pay the minimum wage to the camp counselors. This means that the camp could be covered by existing Ohio minimum wage law but, since counselors are excluded, the camp would not have to pay the minimum wage to the counselor.

Will Issue 2 cover this summer camp and counselor?

I think so.

Issue 2 will take effect on January 1, 2007. It states that

• "every employer shall pay their employees" the new minimum wage.
• "employer" and "employee" shall have "the same meanings as under the Fair Labor Standards Act," with certain exceptions and
• "only the exemptions set forth in (Issue 2) apply to (Issue 2)."

As noted above, the term "employer" under the FLSA is very broad. It basically means any person who pays an employee. The term "employee" under the FLSA does not exempt a camp counselor. Therefore, it looks like the camp is an "employer" and the counselor is an "employee" entitled to the minimum wage.

What about Issue 2's own exemptions? They do not appear to exempt the camp or its counselors. Issue 2 does not have a small employer exemption, the way current Ohio law does. Issue 2 will allow businesses with less than $250,000 in gross revenues to pay the federal minimum wage, if lower, but it does not exempt them altogether. Therefore, it appears that camp counselors will be covered by Issue 2 and entitled to at least the federal minimum wage.

This might come as a difficult surprise for previously exempted employers. If my reasoning is correct, then it could also apply to these other previously exempted Ohio employees:

• individuals engaged in the delivery of newspapers to the
  consumer;
• non-family members working on small farms;
• a member of a police or fire protection agency;
• a student employed on a part-time or seasonal basis by a political subdivision of the state; and, ironically,
• a person employed directly by the house of
  representatives or directly by the senate.

See Ohio Revised Code 4111.01(D).

Again, if I am off the mark here, please let me know. My email is Neil@fklaborlaw.com. I look forward to hearing from you.

Here is a list of Ohio cases on the issue of whether an Ohio employer must pay accrued but unused vacation when an employee quits or is fired. To preview, an Ohio employer is not required by law to give its employees any vacation, holiday or paid time off. Therefore, when an employer provides paid vacation, it can establish the rules under which employees receive that benefit. If the employer's rule is that the employee must use the vacation or lose it, then the employee must use it or lose it. If the rules for vacation pay are not stated in a policy or handbook, they can be shown by the employer’s consistent past practice.

From a legal point of view, Richards probably should not have to pay his victims money damages for his racist tirade. I am talking about their legal right to recover money damages here and not whether Richards' conduct was wrong or whether his words injured his victims. I think it is safe to assume that his conduct was wrong and harmful. However, conduct can be wrong and harmful but still not be actionable, which means money damages can be awarded by a court because of it.

As a general rule, words, no matter how hateful, are not actionable. There are plenty of exceptions, but none that I think apply here. For example, words that harm reputation are actionable in defamation. As another example, words that create a racially hostile environment may be actionable, assuming that they are sufficiently severe or pervasive, are uttered by a supervisor or are ignored despite a complaint to the company. However, one stranger shouting the "n" word at another outside of the employment relationship is probably not actionable.

The closest legal basis for compensation for the victims of Richards' tirade is a theory similar to a racially hostile environment at work, which is a racially hostile environment at a "public accommodation." A public accommodation describes places that serve the public, like restaurants, hotels, hospitals, theaters and comedy clubs. In other words, a comedy club could be sued if it excluded patrons on the basis of their race or created a racially hostile environment.

Richards, however, is not a public accommodation. He was the act. Unless the Laugh Factory knew in advance about his antics or asked him later for an encore performance, it will be difficult to pin the blame on the club (the public accommodation) for the offense caused by a guy hired for an act.

Hence I was grateful to read Lisa Bloom's column. Ms. Bloom writes for Court TV. Her mom represents Richards' victims, a fact Ms. Bloom fully disclosed. Ms. Bloom believes that Richards' victims could convince a jury that they suffered severe emotional distress as a result of Richards' outrageous actions. If so, the jury could award them money damages.

I liked Bloom's column. I found it informative and readable and recommend it to anyone interested in whether the law would support an award of damages. I will leave it up to you whether you agree with Ms. Bloom's conclusion. Personally, I suspect that his victims have not suffered emotional distress severe enough to be actionable. I do not know that. Nor am I saying that Richards' actions could not cause a severe emotional reaction. I am just saying that actionable emotional distress has to be so severe that it is debilitating, which is often an impossible standard to meet.

If I am right, however, then the next question is whether the law should change to make conduct like that of Michael Richards actionable. Your thoughts?

Employment Law Blog has an article about an ever present concern of MEL visitors, which is an employee's right to receive earned wages. Specifically, the State of Washington beefed up its wage payment law. Now a Washington employee can now file a complaint with the Washington State department of labor, which has the authority to recover the unpaid wages. The Employment Law Blog is published by the Law offices of Jill D. Pugh.

The main questions this week about Issue 2, Ohio's new minimum wage law center on the employer's duty to collect and provide employee wage information. Opponents of Issue 2 insisted that it would require employers to release confidential employee information to third parties. With Issue 2's passage, employers now want to know if they must really give one employee wage information to anyone who asks for it. The answer, I believe, will be "no."

New Ohio wage information and reporting requirements

The starting point is what Issue 2 has to say about the employer's new duty to provide employee wage information:

An employer shall maintain a record of the name, address, occupation, pay rate, hours worked for each day worked and each amount paid an employee for a period of not less than three years following the last date the employee was employed. Such information shall be provided without charge to an employee or person acting on behalf of an employee upon request. An employee, person acting on behalf of one or more employees and/or any other interested party may file a complaint with the state for a violation of any provision of this section or any law or regulation implementing its provisions.

So, a plain reading of Issue 2's language says that an employer must collect the following information about each employee:

1. Name
2. Address:
   
3. Occupation;
   
4. Pay rate;
   
5. Hours worked for each day worked and
   
6. Amount paid, presumably for each pay period.

Having collected this information about "each employee," to whom and how much of it must an employer report to someone who asks for it? Issue 2 says that the employer must provide "such information" to the employee. It does not say the employer must give the information to a third party.

This leaves the queston of whether "such information" mean the total database of wage information kept on all employees, or just the wage information of the employee who requests it? Right now, the answer is not clear.

"Such information" should belong to the employee

Issue 2 allows Ohio's General Assembly to:

implement its provisions and create additional remedies, increase the minimum wage rate and extend the coverage of the section, but in no manner restrict any provision of (Issue 2).

Clarifying what "such information" means is within the scope of implementing legislation. Therefore, the General Assembly will almost certainly answer this question.

My guess is that the General Assembly will read "such information" as limited to an employee's own wage information. This would balance the interest of the employee asking for the information with his co-worker's interest in keeping her wage information confidential. If the General Assembly adopts this approach, however, an employee could challenge whether limiting access to just an employee's own wage information "restricts" Issue 2's terms. My guess, for what little it is worth, is that such a challenge would not succeed.

The problem for employers until the question is finally answered is how to respond to a request by an employee (or a union representing employees) for other employees' wage information. I think a prudent approach is to seek the consent of employees before releasing their information. If an employee does not consent, consult employment counsel on how to proceed without violating the rights of one employee over the other.

Update: Rep. Seitz introduced House Bill 690 on November 29, 2006, which is proposed implementing legislation. HB 690 allows employers to obtain written authorization from employees before handing records to persons acting on their behalf.

Seinfeld's Kramer, the real life Michael Richards, exploded in a racist tirade at African American audience members who heckled him during a comedy routine. Pointing, Richards screamed "He's a nigger! He's a nigger! He's a nigger! A nigger, look, there's a nigger!" and, looking up above the stage, he declared "Fifty years ago we'd have you upside down with a f***ing fork up your ass."

Kramer was wrong. The "we" he referred to, like minded people who would lynch and mutilate black men for offending them, did not stop 50 years ago. Without Sanctuary, Lynching Photography in America, described one such event as follows:

Early one morning in the 1960s, two young boys bicycling to a favorite fishing hole happened upon this scene: a [black inmate's] dead weight hanging by the neck in a thorny bramble of Georgia hardwoods. After they reported it to the local authroities, the Georgia Bureau of Investigainons' chief looked briefly at the scene and declared, "Suicide." He snapped a photograph, and the investigation was closed.

More recently, on June 7, 1998, a member of Richards' "we" chained James Byrd behind his pick up truck and dragged him for miles until he was dead.

Without Sanctuary chronicles an American lynching tradition captured in photos. The photographs show page after page of gruesome, mutilated, even charred corpes, surrounded by happy people, pointing and smiling for the camera. Richards should read it. Then he might understand why he is so wrong.

Update: Richards appeared on the Letterman Show to explain his actions. Seemingly in denial, he blamed his outburst on rage, Katrina and the war and "looked and acted confused."

A chronic problem for the American worker is competition from cheap foriegn labor. The minimum wage in China, for example, is set by local governments, who presumably compete for new factories, and varies from $45 to $100 a month. Chinese companies must therefore pay 25 to 50 cents an hour for a 44 hour workweek.

But the problem is much worse. China has no meaningful overtime or minimum wage enforcement mechanism. The only pressure applied to Chinese suppliers is the threat of an audit from its customers, such as Walmart of Nike. That does not appear to be much of a threat, however, as today's lead story in BusinessWeek reveals. Chinese suppliers reportedly fake pay records and "coach" employees to lie to auditors. Even then, an industry watch dog group found an average of 18 violations at every single factory that it audited, despite the presence of a new industry of consultants in China who help suppliers fake documents and coach employees.

This creates a trifecta for minimum wage and overtime violations. First, no laws means no penalties beyond a loss of business. Second, coverups assure that most violations are not caught. Third, "coaching" is nothing more than a threat of termination if the employee speaks the truth. This is retaliation in its purest form.

Compare that to Ohio, which just amended its constitution to require an inflation indexed minimum wage. Ohio's constitution now also requires mandatory employer recordkeeping, allows class action lawsuits and requires an award of damages for retaliation in an amount sufficient to deter future violations.

U.S. trading partners must enforce their minimum wage and overtime laws and prohibit falsification and retaliation. If they choose not to do that, then U.S. tariffs should adjust the price of the goods coming in to recover the reduction in the price of the goods resulting from the violation of the rights of Chinese workers.

A patron threatens an employee of a bar. The employee is very afraid. She carries a gun to work. Is the employer be liable for intentional infliction of emotional distress? Francis Fanning says the employer is probably not legally responsible for threats of physical harm by a patron.

Ohio passed a new minimum wage law on November 7. Ohio's minimum wage is now indexed to inflation. It requires employers to keep significant employee payroll information and has very tough enforcement provisions. Here is a detailed analysis of Ohio's minimum wage law. Employers had better beware.

Because of the attorney-client privilege I cannot blog about conversations with my clients. Instead, I will write about fictional clients who have the same questions as the employees I see in my practice.

Today's fictional client, Donna, complained to human resources about her boss's discrimination against older workers. Her boss was reprimanded so, of course, he retaliated against Donna. Specifically, he leveled unwarranted criticism at her while doing favors for co-workers who had not complained.

Donna's question was whether she had a case for retaliation. The answer was, "probably not," because she had not lost money or otherwise suffered a so-called tangible, adverse employment action. Courts will dismiss retaliation cases if the employee did not suffer a tangible employment loss.

The U.S. Supreme Court recently defined how much the employee must suffer to have a tangible employment action. In Burlington Northern & Santa Fe Ry. v. White, 126 S. Ct. 2405 (U.S. 2006), the Supreme Court defined a tangible, adverse action as one that:

would have been materially adverse to a reasonable employee or applicant. . . . [A] retaliation plaintiff (must) show that the challenged action well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.

In Burlington the company suspended an employee for 37 days without pay after she made a complaint but then reversed course and paid the employee for her lost wages. The question before the court was whether the adverse action (the suspension) was "tangible" because the employee ended up not losing money. The Court said that it was since, based on the test quoted above, a reasonable person would not make the complaint in the first place knowing that she would go 37 days without pay or an assurance of being paid.

So back to Donna. I had to break the news to her that she probably could not successfully sue her employer until she had suffered something more tangible. Personally, telling an employee she must suffer more before the court room doors open to her is tough. Anyone who has been through retaliation knows it is awful, even if they do not lose money as a result of it.

Donna took the news stoically. The good news is that she is still employed. Now, however,she is armed with specific tools to combat and survive the retaliation. More on that later.

The Office on NBC last night showed Michael, the boss, callously outing Oscar as gay. Corporate launched an investigation for insensitivity. Michael called a meeting to prove he was okay with gay. An incredibly tense meeting ends with Michael kissing Oscar on the mouth. The show ends with Oscar counting the money corporate paid him not to sue.

The show merits mention here because:

Entertainment imitates life.

Michael's response to being caught as a homophobe was absurdly realistic. Once caught and left to their own devices, discriminators do absurd things. A real life example, Senator Allen's decison to hold "Ethnic Rallies " when caught mocking Macaca, comes to mind.

Corporate paid Oscar too much.

Employers have no obligation to provide employees with a workplace free from sexual preference harassment. Gays are fair game. While Michael's kiss might amount to a battery (unwelcomed and offensive physical contact) and he may have committed a false imprisonment when he blocked the door to keep Oscar from leaving the meeting, the episode was written with Oscar (sort of) consenting to the kiss and deciding to stay in the meeting.

The concern about being insensitive to gays was, however, ironically refreshing.

In real life bad boss behavior does not play out with such comedy. Here is a question and answer about office harassment and defamation. There, a boss took a new female employee to lunch, returned hours later with them both drunk and later threatened to fire the employee who leaked word of it. In Arizona it seems the employee will have little legal recourse if fired.

I like entertainment better.

The age old question about an employee's right to her final pay is answered here for Florida employees.

When it rains it pours. Today Workplace Fairness flagged an AP story reporting on an Equal Employment Opportunity Commission settlement of a class action discrimination suit against an aerospace manufacturer. The suit alleged that the employer, Woodward Gov., discriminated against minorities and females in hiring, promotions and other terms of employment. Woodward agreed to settle for $5 million, agreed to put in place programs that would eliminate discrimination and agreed to an outside monitor for the next three years.

A tip of the hat to my colleague and friend Chris Thorman and his firm for the fine work they did for their client Tommy Morgan. Last week a federal jury returned a $16 million verdict against New York Life Insurance Company for age discrimination. The "Company You Keep" decided to part company with Mr. Morgan, then 52, and replace him with a younger manager.

The Cleveland Plain Dealer reported that Mr. Morgan was a managing partner at New York Life Insurance Co.'s Northern Ohio.

Morgan was a 20-year employee of New York Life, Thorman said. His career there included a promotion, high marks for job performance and a good reputation among colleagues. One witness described Morgan as the best managing partner he had seen in 40 years, Thorman said.

In September of 2005 New York Life announced a "new generation of managers." Three weeks later New York Life fired Mr. Morgan. Bad timing. The jury returned the largest age discrimination verdict in Ohio history.

So why did the jury award such a large verdict? Federal courts in Northern Ohio are notoriously conservative, so a runaway jury is not the reason. The answer is that Mr. Morgan earned about $500,000 a year when New York Life fired him. He will therefore lose about $5.5 million over the rest of his career, which is what the jury awarded. The jury added another $500,000 for emotional pain and suffering, plus $10 million in punitive damages.

While the jury's verdict undoubtably made Mr. Morgan feel better, he should not plan on spending the money anytime soon. New York Life intends to appeal. An appeal to the Sixth Circuit takes 18 months to 2 years and the Court could reduce or overturn the verdict. If I had to bet, however, I would bet that Mr. Morgan and his legal team will protect this verdict on appeal.

My take: corporate America should stop discriminating. It's bad for business.