Whistle(blow) While You Work: Supreme Court Rules That “Watchdog” Employees Are Protected Under CEPA

Posted in State Law, Whistleblower

On July 15, 2015, the New Jersey Supreme Court settled the debate over whether employees who are responsible for monitoring and reporting employer compliance may seek whistleblower protection under New Jersey’s Conscientious Employee Protection Act, N.J.S.A. § 34:19-1 et seq. (“CEPA”), and if so, under what circumstances. Ultimately, the court in Lippman v. Ethicon held that CEPA protects such “watchdog employees.”

Plaintiff Joel Lippman was employed by Ethicon. His position involved determining whether medical products were too dangerous for distribution, and if so, whether a recall was required. In 2006, Ethicon discharged Lippman for a sexual relationship with a subordinate. Lippman sued, claiming that in fact he was fired in retaliation for blowing the whistle on Ethicon’s distribution of seven products he viewed as dangerous or defective.

The trial court dismissed the matter on summary judgment, concluding that Lippman failed to distinguish his job duties from whistleblowing activities, and therefore could not prove he was fired for whistleblowing. The trial court relied on Massarano v. New Jersey Transit, in which the Appellate Division held that a security operations manager who alerted the company to confidentiality issues could not sue under CEPA because she “was merely doing her job as the security operations manager by reporting her findings and her opinion.”

In Lippman, however, the Appellate Division overturned the trial court’s decision and expressed its disagreement with the Massarano holding. The court reasoned that watchdog employees are “the most vulnerable to retaliation because they are uniquely positioned to know where the problem areas are and to speak out when corporate profits are put ahead of consumer safety.” The appellate court did, however, place an enhanced burden of proof on Lippman, requiring that he prove as part of his prima facie case that he had exhausted all internal means of compliance or refused to participate in the conduct at issue prior to filing a CEPA claim.

Both parties appealed this decision. Ethicon challenged the appellate court’s holding, while Lippman challenged the enhanced burden of proof for watchdog employees. The New Jersey Supreme Court affirmed the Appellate Division’s holding, but modified it to remove the enhanced burden of proof that had been applied to Lippman as a watchdog employee. The court held that CEPA does not limit its definition of “employees” to those with certain job duties, and therefore applies to all employees equally. Additionally, the court held that an enhanced burden of proof for watchdog employees is “nowhere found in the statutory language” and cannot be applied to them absent legislative amendment.

This decision poses significant challenges for employers, particularly those in industries that typically employ workers to monitor compliance, such as the pharmaceutical industry. Such individuals are employed for the very purpose of bringing concerns or potential issues to the attention of the company, and as such may engage in activity that is protected under CEPA simply by performing their jobs. To succeed on a claim, however, such individuals would still have to prove that they suffered an adverse employment action (such as termination or demotion), and that the adverse action occurred because of the protected activity.

DOL Says Most Workers Are Employees Under Federal Law

Posted in Department of Labor, FLSA

Today, the U.S. Department of Labor (“DOL”) issued an Administrator’s Interpretation regarding the misclassification of employees as independent contractors. Having received numerous complaints from workers on this issue over the last several years, the DOL has concluded that most workers are employees under the Fair Labor Standards Act (“FLSA”).  The 15-page memorandum emphasizes that proper classification of workers is necessary to ensure that workers receive workplace protections such as minimum wage, overtime compensation and unemployment insurance.

The DOL explained that the key test to determining whether an employment relationship exists is the “economic realities” test, which focuses on whether the worker is truly in business for him or herself to warrant independent contractor status, or if he or she is economically dependent on the employer and therefore an employee. The agency outlined six factors to consider in analyzing this issue: (1) the extent to which the work performed is an integral part of the employer’s business; (2) the worker’s opportunity for profit or loss depending on his or her managerial skill; (3) the extent of the relative investments of the employer and the worker; (4) whether the work performed requires special skills; (5) the permanency of the relationship; and (6) the degree of control that the employer has over the worker. The DOL cautioned that no single factor is entitled to particular weight or focus, and these factors should not be analyzed “mechanically or in a vacuum.” Rather, the economic realities test must be applied with the understanding that each factor is just one portion of the broader concept of economic dependence. Through several real world examples of how these factors should be analyzed, the DOL concluded that most workers are employees under federal law. In short, this guidance reinforces the FLSA’s “expansive coverage for workers,” and highlights that a careful, detailed analysis is critical when employers classify their workers.

This Administrator’s Interpretation comes just two weeks after the DOL’s proposed rule to expand federal overtime pay regulations and further emphasizes that the DOL is seeking both to increase the number of workers who may receive overtime and decrease the number of workers that are classified as independent contractors. See more about the DOL’s new proposed rule here.

Greenberg Traurig to Host ‘Is Your Business Model Ready for Overtime Pay Protection and the New Proposed Rules from the Department of Labor?’ Webinar

Posted in Event

 

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The Department of Labor has released proposed rules regarding overtime pay protection, including substantial changes to the minimum salary needed to establish exempt employee status and other expansions to the class of non-exempt workers. Please join Greenberg Traurig’s Labor & Employment Practice for a timely webinar discussion on the new proposed regulations and how they may impact your company’s policies, practices, and your business model.

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DOL Proposes Dramatic Expansion to FLSA Overtime Protections

Posted in FLSA

On June 30, for the first time in a decade, the Department of Labor (DOL) proposed a rule to broaden federal overtime pay regulations under the Fair Labor Standards Act (FLSA). The proposed changes will affect an estimated 5 million Americans and their employers, making it more difficult to meet the overtime exemption.

The DOL proposed two primary changes to federal overtime pay regulations. Specifically, the DOL proposes to dramatically increase the minimum salary required to qualify for the FLSA exemptions from overtime pay (“white collar” exemptions). Additionally, it proposes to similarly increase the annual compensation requirement for “highly compensated employees” (HCE).

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Massachusetts Earned Sick Time Law Becomes Effective July 1, 2015

Posted in Benefits, Employee Policies, Labor, State Law

The Massachusetts Earned Sick Time Law (Mass. Gen. Laws ch. 149, § 148C), approved by a statewide ballot question last fall, goes into effect July 1, 2015. As of July 1, 2015, all employers must comply with the statute. Applicable regulations promulgated by the Massachusetts Attorney General have also been issued.

Importantly, all employers operating in Massachusetts are subject to the law and all employees whose “primary place of work” is in Massachusetts are eligible for benefits. The new law generally calls for accrual of one hour of sick leave for every 30 hours worked for a maximum of 40 hours of sick leave per year.

Employers with 11 or more employees must provide paid leave. Employers with fewer than 11 employees are obligated to provide unpaid leave.

Employers need to pay close attention to this new law, as even employers who have generous sick time or paid time off (“PTO”) policies may find themselves not in compliance. The law has strict provisions regarding the rate of accrual, the rollover of time, qualifying circumstances, and increments of use. Additionally, employers must comply with the law’s notice and record keeping requirements.

An immediate priority for covered Massachusetts employers is to decide whether they will come into full compliance with the law immediately or take advantage of the law’s safe harbor provision for the remainder of 2015. Additionally, employers should post the notice required by the Attorney General’s Office as of July 1, 2015.

Greenberg Traurig to Host ‘Global Workforce Strategies: Managing Your Global Workforce’ Webinar

Posted in Event, Global Workforce Strategies

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Global Workforce Strategies: Managing Your Global Workforce

Please join Greenberg Traurig’s Global Workforce Strategies team, in conjunction with the Labor & Employment Practice, for a timely discussion in our webinar series focused on some of today’s most challenging cross-border issues that international businesses face while managing a global workforce. These matters span labor, employment and immigration for businesses both inside and outside of the United States.

Our panelists will discuss key risk and compliance issues that in-house counsel and human resources professionals must frequently navigate to stay ahead of the curve in regards to global workplace risk. Continue Reading

Greenberg Traurig to Host ‘Massachusetts Employment Law Update’ Webinar

Posted in Event

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Massachusetts Employment Law Update 

The new Massachusetts sick leave law goes into effect on July 1, 2015. Is your organization ready to implement this new law along with the recently enacted domestic violence leave and parental leave laws? Please join Greenberg Traurig’s Labor & Employment Practice for a timely webinar discussion on these new laws and how they may impact your company’s policies and practices. Continue Reading

NYC Council Passes Law Limiting Employer’s Right to Conduct Criminal Background Checks

Posted in Legislation

The New York City Council passed a bill today precluding employers from doing criminal background checks on applicants until after a conditional offer of employment has been extended to the applicant.  The law would also require certain steps to be taken (similar to those under the Fair Credit Reporting Act) regarding providing information to the applicant about the criminal background check process and results, including providing a three-day period for the applicant to respond to the report.  There are certain limited exceptions, most relating to the public sector.  Employers may do criminal background checks after a conditional offer of employment is made, but are still limited in using the results of the background check by restrictions imposed by the New York State Corrections Law.  Earlier this year, the City Council passed a bill precluding employers from doing credit checks on job applicants.

Court Upholds NLRB’s ‘Quickie’ Election Rules

Posted in Labor, NLRB, NLRB Elections, Unions

shutterstock_110397776_smallAs we previously reported, on April 15, 2015, the National Labor Relations Board implemented new union election rules (Election Rules) that made sweeping changes to the Board’s proceedings for processing election petitions, holding hearings, and conducting secret-ballot elections. At the time the Election Rules took effect, legal challenges to the Election Rules were pending in the United States District Courts for the District of Columbia and the Western District of Texas. Continue Reading

Amendment to Florida Civil Rights Act Codifies and Extends Florida Supreme Court’s 2014 Prohibiting Pregnancy Discrimination

Posted in Discrimination, State Law

Effective July 1, 2015, the Florida Civil Rights Act (FCRA) will include an amendment expressly prohibiting pregnancy-based discrimination in employment practices and places of public accommodation. See Ch. 2015-68, §§ 1-8, Laws of Fla. The bill codifies and extends the Florida Supreme Court’s 2014 ruling, Delva v. Continental Group, Inc., in which the Court held that the FCRA’s prohibition against sex discrimination in employment practices includes a ban on pregnancy-based discrimination. See 137 So. 3d 371 (Fla. 2014) (hereinafter Delva II); Ch. 2015-68, §§ 2-6, Laws of Fla. The Court’s decision did not address whether the same rule applies as to pregnancy discrimination in places of public accommodation. However, the recent amendment to the FCRA clarifies that it does.

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