This post was contributed by Tony D. Dick, Esq., an Associate in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Columbus, Ohio.

In the last several years, there has been an explosion in the number of workers who use their own personal mobile devices to perform work functions (commonly referred to as “Bring Your Own Device” or “BYOD”). In fact, according to a study conducted last year by tech giant Cisco, approximately 90% of all workers say they use their own personal smartphones, tablets or laptops in some work-related capacity, whether the practice is officially endorsed by their employers or not. A number of factors have contributed to this trend, including the enormous popularity of personal mobile devices such as iPhones, iPads, and Android devices in general, advances in technology that have made using such devices relatively easy and more intuitive, and the focused marketing of personal devices as potential business tools.

Though the statistics show that the practice of BYOD is widespread across American business, surprisingly, only about 30% of employers have formal BYOD policies in place that provide guidance for employees to follow when it comes to using their personal devices for work purposes. Such policies are especially important given the risks and challenges that come along with BYOD.

One of the most obvious challenges associated with BYOD is the inherent lack of control an employer has over an employee’s personal mobile devices. This lack of control can lead to increased data breaches, privacy violations, and exposure to viruses, malware, and data theft. Compounding these risks is the fact that almost half of all workers that utilize their own personal devices for work admit to not even taking the most basic security precautions, such as using password protection on their devices. Another obvious challenge concerns the potential for overtime violations that can occur when an employee is using their own personal electronic devices to perform work. In fact, in just the last couple years, there have been multiple lawsuits initiated by non-exempt employees who claim they are entitled to overtime pay for the time spent reviewing and responding to business e-mails on their personal devices during non-work hours.

Even with these risks, there are a number of reasons why businesses should embrace BYOD. For one, BYOD is generally more cost effective than the traditional arrangement where the company provides and manages all hardware devices. Studies also suggest that, on average, employees who use mobile devices for both work and their personal lives perform approximately 240 more hours of work per year than those who do not. At the same time, employees are reporting that they feel more satisfied and empowered by being able to use their own electronic devices at work and the flexibility that BYOD affords them.

Whether or not you believe that the benefits outweigh the risks, it does not appear BYOD is going anywhere in the near future. Accordingly, employers should adopt comprehensive BYOD plans to mitigate potential security risks and legal liability that naturally comes along with employees utilizing personal mobile devices to perform work tasks. At a minimum, every BYOD plan should address three core components:
 

Continue Reading Security is Key to “BYOD” Policies

This post was contributed by Esch McCombie, a Summer Associate with McNees Wallace and Nurick LLC. Mr. McCombie will begin his third year of law school at the Penn State University Dickinson School of Law in the fall, and he expects to earn his J.D. in May 2014.

The Supreme Court of the United States continued its hot streak in the arbitration and class action waiver arena with two recent decisions. These decisions are important for employers because they may offer employers a way control expenses related to dispute resolution with employees. Because those expenses can be so high, many employers are considering implementing employment arbitration agreements, consistent with the direction provided by the Court.

In Oxford Health Plans, LLC v. Sutter (pdf), the Supreme Court held that courts owe almost complete deference to arbitrators’ interpretations of arbitration agreements. And, if an arbitrator determines that the parties agreed to allow class proceedings, a court should not overturn the arbitrator’s interpretation no matter how "good, bad or ugly" the interpretation may be. This means that an employer could be forced into a class action arbitration even if not specifically provided for in an agreement. Just a few weeks later, however, the Supreme Court provided direction to employers to avoid the potentially troubling situation presented by Oxford Health.

In the subsequent decision, American Express Co. v. Italian Colors Restaurant (pdf), the Supreme Court held that individuals can waive their right to class proceedings under federal law by agreement.  In short, the Supreme Court ruled that the law only requires that individuals can pursue their statutory claims. Class action waivers, the High Court said, only effect individuals’ abilities to prove, not pursue, statutory claims. The plaintiffs in Italian Colors attempted to bring a class action antitrust suit despite having signed a class action waiver. The expert fees to prove damages would cost over $100,000 (and perhaps up to $1 million) when even the treble recovery would be only around $35,000 per plaintiff. Without a class proceeding, the plaintiffs argued, they could not share this cost and their claims were therefore not worth the cost of proving them.

Nonetheless, the Supreme Court held that a class proceedings waiver is enforceable, unless there is no actual agreement under state law [because the agreement is "unconscionable," for example] or if a federal statute guarantees parties’ rights to class proceedings for a particular claim. The Supreme Court left open the door for plaintiffs, however, to argue that excessive filing and administrative fees, as opposed to expert fees, meet an exception designed to prevent "prospective waiver of [the] right to pursue statutory remedies."

So, you might ask: What does this mean? It is simple, really. An employer who wishes to avoid class proceedings should have employees expressly waive that option in an agreement. In so doing, the employer not only removes the uncertainty associated with an arbitrator’s interpretation of the agreement, but also helps ensure that class proceedings are avoided, assuming there are no statutory rights to class proceedings for the specific claim and that the agreement is not otherwise unenforceable. 

 

As we discussed with attendees at our most recent health care reform compliance seminar in June, we wanted to make the presentation available to the readers of our blog.  You can access the PowerPoint, “Countdown to 2014: PPACA Compliance Priorities for Employers,” by clicking here. 

Readers of this blog will note that we recently reported on a one-year delay in the effective date for PPACA’s employer shared responsibility requirements.  Please keep in mind that the PowerPoint presentation was created prior to the announcement of the change in effective date for the shared responsibility provisions; however, other information and other effective dates referenced in the presentation remain accurate.  For future PPACA developments, stay tuned to this blog at https://www.palaborandemploymentblog.com/tags/ppaca/.

Questions regarding specific PPACA compliance issues and our upcoming PPACA presentations may be addressed to any member of McNees Wallace & Nurick’s Labor and Employment Law and Employee Benefits Practice Groups. 

Many employers received a welcome, though temporary, reprieve yesterday, when the U.S. Department of the Treasury (“Department”) announced a one-year delay in the effective date of one of the key requirements of the Patient Protection and Affordable Care Act (“PPACA”) – the employer “shared responsibility” requirements (a.k.a. “pay or play”).  PPACA’s shared responsibility requirements were scheduled to become effective January 1, 2014, which has left countless employers scrambling to navigate complex regulations to determine what steps are necessary to comply with the mandate and avoid penalties.  (Click here to read our previously-published Employer Alert detailing the shared responsibility provisions and regulations issued to date.) 

The announced delay was prompted by the Department’s recognition that new employer and insurer coverage reporting requirements under PPACA are complex and that businesses need additional time to implement these requirements effectively.  Specifically, PPACA will require information reporting by insurers, self-insuring employers, and other parties that provide health coverage, as well as by certain employers with respect to the health coverage offered to their full-time employees.  The delayed implementation of these requirements is intended to allow the Department time to review and (hopefully) simplify the new reporting requirements and to allow additional time to adapt health coverage and reporting systems while employers move towards compliance with the shared responsibility requirements.

 

The Department’s announcement effectively pushes the deadline for compliance with the shared responsibility rules to January 1, 2015 – including the assessment of shared responsibility payments or penalties.  Importantly, other key 2014 requirements under PPACA, including the implementation of Health Care Exchanges and the so-called individual mandate, as well as the Patient Centered Outcomes Research Institute (PCORI) and transitional reinsurance program fees, remain unchanged.  

 

The Department is expected to issue formal guidance within the next week regarding transitional matters relating to its announcement, as well as proposed rules later this summer implementing the reporting provisions under PPACA.  We will provide additional updates on our blog as they become available.  

 

For more information on the most recent developments under PPACA, click here to view McNees’ recent Healthcare Reform White Paper: Countdown to 2014.  Questions regarding this white paper and specific PPACA compliance issues may be addressed to any member of McNees Wallace & Nurick’s Labor and Employment Law and Employee Benefits Practice Groups.

Last week, the Supreme Court of the United States struck down as unconstitutional a key provision of the Defense of Marriage Act (DOMA) that defined “marriage” for purposes of over 1,100 federal laws as a legal union between a man and a woman. With the Court’s decision, same-sex couples that are legally married under state law are now entitled to the same treatment under federal law as opposite-sex married couples. Chief among the benefits now available to same-sex married couples are equal treatment under the country’s immigration and tax laws and equal rights to participate in its federal health and welfare programs. The Court’s decision striking down DOMA also will have a significant impact on the rights of same-sex married couples under various federal laws relating to employment, extending to same-sex married couples in certain states rights to (1) family leave under the Family and Medical Leave Act (FMLA) to care for a same-sex spouse, (2) favorable tax treatment for spousal health benefits and expense reimbursements, (3) continuation healthcare coverage under COBRA, (4) and spousal rights under retirement plans.

It is important to note, however, that the Court’s decision does not legalize same-sex marriage, address whether same-sex couples have a constitutional right to marry, or consider the constitutionality of a state law banning same-sex marriage. Moreover, the provision of DOMA permitting states to refuse to recognize same-sex marriages performed under the laws of other states was not affected by the Court’s ruling. Accordingly, while the Supreme Court’s decision will have a significant impact on employers in states that recognize same-sex marriage, only 13 states and the District of Columbia presently do. Of the remaining states, 35 have either statutory or constitutional bans on same-sex marriage. Pennsylvania is one such state. The question for Pennsylvania employers, then, is: How does the Supreme Court’s decision affect us?

Continue Reading Pennsylvania Employers Left Wondering How They Are Affected by the Supreme Court’s Decision on DOMA

Although the Patient Protection and Affordable Care Act (“PPACA” or the “Act”) is now over three years old, the Act’s core requirements will not take effect until 2014. The last half of 2013 should be a “wild ride” as the federal agencies charged with implementing the Act scramble to prepare for 2014 and employers weigh their compliance options.

Recently, Eric N. Athey, Esq. and Kelley E. Kaufman, Esq., attorneys in McNees Wallace & Nurick LLC’s Labor and Employment Law Group, prepared a white paper entitled: "Health Care Reform Update: Countdown to 2014.” The White Paper is part of our ongoing PPACA series that is intended to keep clients abreast of recent developments and things to watch for as we count down to 2014. This installment addresses:  

  • PCORI Fees: July 2013 Filing Deadline
  • Compliance Loopholes, Shortcuts and Silver Bullets
  • Update on Required Notice of Health Care Exchanges
  • Final Wellness Program Regulations

The entire white paper is available here  and a pdf version is available here.

This post was contributed by Adam R. Long, a Member in McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group.

At our recent Labor and Employment Law Seminar, we highlighted a number of outstanding legal cases that have the potential to have a significant impact on employer liability. On Monday, the U.S. Supreme Court issued decisions in two closely watched Title VII employment discrimination/retaliation cases. In each case, the Court clarified previously unsettled legal questions in favor of employers.

In Vance v. Ball State University, a 5-4 majority of the Court held that an employee qualifies as a "supervisor" for purposes of Title VII harassment liability only if the employee "is empowered by the employer to take tangible employment actions against the victim." In its analysis, the Court expressly rejected the EEOC’s more expansive definition of "supervisor," which included any employee who had "the ability to exercise significant direction over another’s daily work," even if the employee lacked the authority to take tangible employment actions.  

In University of Texas Southwestern Medical Center v. Nassar, the same 5-4 majority confirmed that to establish a Title VII retaliation claim, an employee must prove that the alleged protected activity was a "but for" cause of the employer’s alleged adverse action. With this decision, the Court rejected the lower standard of proof used in Title VII discrimination claims, which requires proof only that the retaliation was a "motivating factor" in the employer’s action. The "but for" causation standard is the same standard endorsed by the Court in 2009 for discrimination claims arising under the Age Discrimination in Employment Act.

Both Vance and Nassar will assist employers when defending against Title VII discrimination and retaliation claims. The Court in Vance limited the scope of employees who will qualify as "supervisors" for purposes of Title VII’s harassment liability. If the alleged harasser does not qualify as a "supervisor," the plaintiff will need to prove that the employer was negligent in allowing the harassment to occur, a showing not necessary for supervisor-based harassment. With its Nassar decision, the Court made it more difficult for plaintiffs to prove Title VII retaliation claims by necessitating proof of but-for causation. In light of the ever increasing number of Title VII retaliation claims filed with the EEOC and in court, the Nassar decision could have a significant impact for litigants moving forward.   

Recently, we shared with you an article published by our Alcoholic Beverage and Liquor License Practice Group regarding the use of employee tip pools. The article discussed the allure of employee tip pooling, which allows for employees who may not directly interact with customers to share in tips. As we often do, we also mentioned the potential pitfalls associated with this practice. Since the publication of the prior article there have been a couple of high profile disputes that have made headlines, including:

  • A class action lawsuit filed against a restaurant owned by celebrity chef Gordon Ramsay, accusing the restaurant of withholding employee tips and other wage and hour violations.
  • The denial of celebrity chief Daniel Boulud’s attempt to have a class action law suit against him and his restaurant dismissed. The lawsuit alleges that employees were not being compensated appropriately when they performed non-tipped tasks.

Unfortunately, tip pools are making headlines and not in a good way! And we are likely to see more headlines in the future. For example, a federal court in Oregon is set to decide whether the Department of Labor overstepped its authority when it issued rules regarding tip pools (which we discussed with you in our prior article). In addition, there is case pending before the New York Court of Appeals (New York’s supreme court) involving Starbucks’ tip practices, which could have major repercussions for employee tip pool arrangements in New York.

As we mentioned before, it’s important for employers to understand what they are jumping into when they approve employee tip pooling.
 

This post was contributed by Tony D. Dick Esq., an Associate in McNees Wallace & Nurick LLC’s Labor and Employment Practice Group in Columbus, Ohio.

Summer has finally arrived. While many of us will soon become consumed with pool parties, backyard barbeques, and well-deserved vacations, a new crop of summer interns is just beginning their first endeavor in the working world with the hope of making a lasting impression on prospective employers in their chosen fields.

According to various surveys, the number of internships nationwide has climbed significantly over the last two decades. Approximately half of all college graduates report participating in some form of internship during their high school or college careers. Anywhere between 25% and 50% of these internships are unpaid. However, it is becoming an increasingly risky proposition for employers to take on unpaid interns. In fact, in just the past few days, Warner Music Group, Atlantic Records, and media giant Condé Nast have all been sued by former interns who claim that they should have been compensated for their internships. These latest lawsuits come on the heels of a sweeping New York federal court decision finding Fox Searchlight Pictures liable for violating minimum wage laws for failing to pay interns who worked on the 2010 movie Black Swan.

At the heart of these cases is whether the unpaid interns should have actually been classified as employees of the business. If so, the interns would be entitled to wages and overtime pay under the Fair Labor Standards Act (“FLSA”). While there are no bright line rules, the Department of Labor has developed a six-factor test to determine when an intern should be considered entitled to wages under the FLSA. Under these factors, an employer does not violate the FLSA by failing to pay wages to an intern only if:
 

Continue Reading Unpaid Internships May Cost Your Business Dearly in the Long Run

This post was contributed by Eric N. Athey, Co-Chair of McNees Wallace & Nurick LLC’s Labor and Employment Law Practice Group. 

In Pennsylvania, a non-compete agreement (NCA) must be supported by legal "consideration" in order to be enforceable. If a newly hired employee signs a NCA at the time of hire as a condition of employment, the new job is the consideration for the agreement not to compete in the future. On the other hand, once an employee is already employed, his employer cannot foist an NCA on him and expect it to be enforceable unless new consideration is given (e.g. a special bonus, job protection, promotion, severance benefits, etc.). These basic principles are well established under Pennsylvania law.  But what happens if an employer presents a NCA to a new hire after he accepts a written job offer but before he actually starts work?  This scenario was recently addressed by the Supreme Court of Pennsylvania in Pulse Technologies, Inc. v. Notaro.

In Pulse Technologies, the company provided Mr. Notaro with a 2 ½-page offer letter that included a description of the job, salary, benefits, and start date. The letter also stated: "You will also be asked to sign our employment/confidentiality agreement. We will not be able to employ you if you fail to do so." The letter further explained that the employment agreement would contain "definitive terms and conditions" of employment. Mr. Notaro signed and returned his offer letter as instructed. On his first day of employment, he was provided with an "employment/confidentiality agreement" that contained a non-compete provision. Notaro read and signed the agreement without objection, understanding that it contained restrictions on his ability to compete in the future. Significantly, he signed the agreement before he began performing his new job.

Over four years later, Mr. Notaro left Pulse Technologies to take a managerial position with one of the company’s competitors.
 

Continue Reading You’ve Got the Job, Details Will Follow – Employment Offer Letters & Non-Compete Agreements