Ritchie v. Rupe: Reversing Shareholder Rights

April 9th, 2015

In the summer of 2014, the Texas Supreme Court handed down a decision that has caused quite a bit of controversy. It’s a new ruling that could bring bad policy to a number of other states, including here in South Carolina.

The decision, Ritchie v. Rupe, 443 S.W.3d 856, 867 (Tex. 2014), deals with the rights of minority shareholders in corporations, and the verdict upended a decision previously made by the Texas Court of Appeals in 1988.

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Noncompete Agreements Hinder Economic Development

April 8th, 2015

We know noncompete agreements are prohibitive, but a new study suggest it doesn’t just hurt an employee’s ability to find meaningful work. South Carolina and other states are losing prized researchers, scientists, inventors, and maybe even sandwich makers, to states that ban such contracts.

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Nursing Home Scores Drop With New Federal Ratings

April 8th, 2015

The Centers for Medicare and Medicaid Services recently revamped its rating system for nursing homes. The result: About one-third of all facilities received lower ratings.

It’s time we raise the standards for nursing homes across the country. The change in the rating system is long overdue. It was last modified in 2008.

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Nursing Homes Losing Patience with Patients

April 8th, 2015

A growing trend in nursing homes has many families worried about their financial futures. Nursing home chains have begun suing for legal guardianship of patients in order to seize control of their assets. While their actions are presented as necessary for patients who do not have the mental faculties to make decisions, in reality it often plays out as just heavy-handed debt collecting.

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Should South Carolina Raise the Minimum Wage?

February 15th, 2015

In the past few months there has been much heated debate over whether state governments should raise their minimum wages. While there’s an argument that paying employees more would raise costs for employers, and might lead to layoffs, an increased minimum wage is necessary to allow workers to live. Read the rest of this entry »

How Surge Pay Impacts Call Center Workers

February 5th, 2015

Zappos, the online retail giant, is already well known for their exemplary customer service, answering 80% of queries within 20 seconds. Recently, they built on that reputation with the implementation of Open Market, an online scheduler for their customer service employees that allows them to schedule their own hours and get compensated based on the customer demand during those hours. Read the rest of this entry »

It’s All Uber But The Shouting: Employee versus Independent Contractor (And Why It Even Matters)

January 25th, 2015

Uber’s in the news yet again. This time, it’s Uber’s service in South Carolina that has spawned complications for the company. Since beginning service in this state in July 2014, Uber, a ridesharing company based in San Francisco, has continued to spread throughout the state, but not without raising the hackles of its competition, taxi companies, as well as the state agency tasked with regulating the industry, the Public Service Commission (PSC). On January 15, 2015, the PSC issued a cease and desist order to Uber for its actions in South Carolina, a move which was publically opposed by Gov. Nikki Haley; the order is in place until the PSC can resolve a request by Uber to be licensed differently than other taxi services are licensed. (Such pushback by regulatory agencies has been happening to Uber around the globe.) Why does this matter to you? Because if Uber is ultimately allowed to operate in South Carolina in the future, there could be significant legal issues that may arise as well, including issues involving employees’ rights.

To illustrate: last year, drivers for Uber brought a class action lawsuit against Uber in California, alleging that Uber has misclassified its drivers as independent contractors instead of employees. The company, recently valued at over $15 billion, uses a smartphone application to connect passengers with drivers of vehicles for hire. Drivers are required to pass Uber’s background screening process. Customers can use the app to request rides and track their reserved vehicle’s location. The app alerts the closest driver, who can accept the ride or not. The drivers then get paid a portion of the fare. But are these drivers Uber’s employees? Or are they just independent contractors? And why does that even matter?

The classification of employee vs. independent contractors is legally significant, as an employee has certain rights that an independent contract would not. For example, in this case, the drivers for Uber are required to pay for their own expenses, such as gas; if the drivers are employees, Uber would be required by California law to reimburse its drivers for these expenses. The classification of independent contractor, then, saves Uber significant money. Generally, employees are also provided other benefits, such as health insurance, that contractors would not receive.

The distinction matters under federal law, including under the Fair Labor Standards Act (FLSA), which governs overtime and minimum wages. Only if a worker is covered under the FLSA’s definition of “employee” would he be provided with the law’s protection. In South Carolina, classification as an employee also affects whether the worker qualifies for protection under certain state laws, such as the South Carolina Wage Payment Act. An employee bringing an lawsuit for unpaid wages has the possibility of receiving damages equal to three times the unpaid wage amount (called treble, or triple, damages), whereas an independent contractor would be limited simply to the amount of unpaid wages. The threat of triple damages provides greater leverage to employees in legal disputes. Employees are also covered by workers’ compensation, and independent contractors are not.

There are other aspects of the law that are affected by this employee/independent contractor dispute, but to go into them all here would likely produce more information than is necessary for you right now. However, if you’re wondering if your job is affected by this classification, or whether you’re really an employee despite being told you’re an independent contract, please don’t hesitate to contact our office and speak with an experienced attorney to get the advice you need to protect your legal rights.

True or FLSA: Employees Should Get Paid for All Hours Worked (Or, Integral and Indispensable Duties under the Fair Labor Standards Act)

October 28th, 2014

The Fair Labor Standards Act (FLSA) is a complex federal law, and it affects millions of workers every single day. In essence, the FLSA requires statutorily-defined employers to pay employees the minimum wage for all hours worked and to pay employees time and a half for all hours worked over 40 per work week, unless the employee is exempt from coverage (for example, professionals, administrators, and executives who are on salary).

The “all hours worked” aspect of the FLSA is important to nail down. It generally does not cover the time spent driving to and from your job, if that time is your regular commuting time. Nor does it cover time spent performing incidental tasks before and after clocking in. But how do you determine if those tasks are merely incidental to your job performance or are integral and indispensable to your job performance? The general rule requires that for the tasks to be integral and indispensable, the preliminary and postliminary activities must be (1) “necessary to the principal work performed” and (2) “done for the benefit of the employer.”

The U.S. Supreme Court will be deciding just such a case this term. In fact, the Court heard oral arguments on that case earlier in October and will be issuing an opinion in the coming months. The last court to hear this case prior to the Supreme Court’s involvement was the Ninth Circuit Court of Appeals, a federal appellate court whose jurisdiction includes Nevada.

The case, Integrity Staffing Solutions, Inc. v. Busk, U.S., No. 13-433, involves employees at an Amazon.com shipping facility in Nevada. The employees are required to submit to a security screening after they clock-out at the end of a shift. The search is intended to prevent employees from stealing merchandise. Employees are not given a choice; they MUST submit to the screening before they can leave. They have to wait up to 25 minutes to be searched, which includes removing their wallets, keys, and belts, and passing through metal detectors. During the entirety of this search process, the employees are not compensated.

The employees bringing the suit allege that the search process was “integral and indispensable” to their job, and as such, they should be compensated for that time. The Ninth Circuit court agreed, stating that because the security screen was required of all warehouse employees and conducted solely for Integrity Staffing’s benefit, it could be found “integral and indispensable” to the employees’ primary job activities of picking and shipping merchandise to Amazon.com customers.

The federal Department of Labor (DOL) does not agree with the Ninth Circuit’s interpretation. The DOL filed an amicus curiae brief (a written argument submitted by a person or entity not a party to the lawsuit), arguing that the “integral and indispensable test” requires “a closer or more direct relationship” between an employee’s principal work activities and the post-shift activity. The screening procedure, the DOL stated, does not meet that standard.

As I stated earlier, the Supreme Court will be deciding this case in the coming months, and I will provide a summary of the case and its practical effects once it is issued.

As an employee, it’s important for you to know your legal rights, so if you or someone you know has a question about the FLSA and whether it applies to your employment situation, please give our office a call.

Perhaps Not-So-Savi: Pregnancy Discrimination in the Workplace

October 22nd, 2014

The Equal Employment Opportunity Commission (EEOC) filed suit last month against Savi Technology, Inc., alleging that the company rescinded its employment offer to Christine Rowe the day after Savi learned Ms. Rowe had recently given birth.

According to the EEOC, “after Christine Rowe successfully completed a telephone interview and an in-person interview, Savi Technology offered her the director of human resources position. The day after Savi Technology extended the job offer, Rowe disclosed to the company vice president and general counsel, who was to be her direct supervisor, that she had recently given birth and had surgery related to her pregnancy. The next day, the vice president and general counsel informed Rowe that Savi Technology was rescinding the job offer….”

If proven, Savi’s conduct violates Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act (PDA), which prohibits sex discrimination on the basis of pregnancy, childbirth, and related medical conditions. The law also covers mothers of infants.

Savi released a statement alleging that Ms. Hughes had made an unacceptable counter offer to Savi’s offer of employment, which is why the offer was rescinded, and that the decision was not due to Ms. Hughes pregnancy.

There are other recent and pending developments that will affect the Pregnancy Discrimination Act, perhaps significantly. Congress is considering The Pregnant Workers Fairness Act, which would award reasonable accommodation to pregnant workers. The U.S. Supreme Court is reviewing whether UPS violated the PDA by not allowing a pregnant employee to take unpaid maternity leave instead of being given a light-duty position. And, in July, the EEOC released new guidance on cases involving pregnancy discrimination.

The Law Office of W. Andrew Arnold, P.C. will continue to track these new developments, which will allow us to better assist those employees who have been discriminated against on the basis of pregnancy.

A Chip On the Ol’ Clock: The ADA’s Reasonable Accommodation Requirements

October 9th, 2014

On September 17, 2008, an employee of Walgreens stopped stocking the store shelves just long enough to open and eat a bag of potato chips without paying for them first. Total cost of potato chips to Walgreens: $1.37. Two months later, Walgreens terminated the employee. Total cost of the settlement Walgreens ultimately paid to the EEOC: $180,000.

Why? Because the employee that Walgreens terminated had Type II diabetes and was eating the potato chips in a frantic attempt to counteract her sudden low blood sugar. Walgreens was aware of the employee’s disability (diabetes), yet in this case it appears that Walgreens failed to reasonably accommodate the employee’s disability that caused the employee to eat the chips.

Walgreens seemingly drastic response to the employee’s action comes from its strict “no grazing” policy, which is intended to prevent employee consumption of food merchandise that the employee has not first purchased (such theft costs Walgreens more than $350,000 annually). The employee alleged that she attempted to buy the chips immediately after her low blood sugar episode, but the cashier wasn’t present, so the employee placed the chips underneath the counter, intending, she stated, to purchase the chips when the cashier returned. Walgreens fired her a few months later.

The employee contacted the Equal Employment Opportunity Commission (EEOC) and filed a complaint against Walgreens, which the EEOC investigated and then brought a lawsuit against Walgreens alleging that the employee was terminated in violation of the Americans with Disabilities Act (ADA).

The ADA provides that “no covered entity shall discriminate against a qualified individual with a disability because of the disability . . . .” 42 U.S.C. § 12112(a) (emphasis added). Employers are required to make “reasonable accommodation” of employees’ disabilities, and the employer’s failure to make the required reasonable accommodations constitutes discrimination.

The settlement that Walgreens agreed to requires it to pay $180,000 to the EEOC and implement serious changes to its antidiscrimination policy and training procedures.