Recent Employment Law News for Feb 08, 2010
Obama Budget Boosts Labor Funds to Combat Workplace Fraud
Mon, 8 Feb 2010 06:53:06 - Pacific Time
President Barack Obama's proposed 2011 budget would boost spending to combat unemployment-insurance fraud and add more enforcement officials to thwart improperly classified workers. The Obama administration has proposed $14 billion to fund Labor Department divisions pertaining to work force development and safety, among other initiatives. Several Labor Department divisions, including the Employee Benefits Administration, Occupational Safety and Health Administration and Wage and Hour Division, among others, saw moderate increases to their fiscal 2011 unit budgets from 2010 levels. The Obama administration plans to increase resources to combat unemployment insurance fraud and propose "legislative changes that would reduce improper payments by over $4 billion and employer tax evasion by $300 million over 10 years," the proposed budget said. In an online chat Monday following the budget's release, Labor Secretary Hilda Solis said the department would seek to allocate $1.7 billion for worker protection programs—an increase of roughly $69 million—and also hire about 177 new inspectors and investigators. "Today's budget affirms this administration's strong commitment to vigorous enforcement," Ms. Solis said in a recorded video message. She added, "OSHA received over 100 inspectors in our 2010 budget, as well as an additional 25 requested in 2011. We are also moving 35 inspectors from compliance assistance activities to enforcement." Additionally, Mr. Obama is proposing the creation of a joint effort between the Labor and Treasury departments to ensure the proper classification of workers. The administration said workers are deprived of benefits and protections when they are misclassified. From a federal standpoint, misclassification also leads to the government losing out on potential revenue. "Misclassification of employees as independent contractors results in violations of any number of federal and state employment benefit and protection laws, and state and federal tax laws, including minimum wage and overtime violations," said Nancy Leppink, deputy administrator of the Labor Department's Wage and Hour Division. Read More...
EEOC Posts Data on Job Patterns in Private Sector
Mon, 8 Feb 2010 06:31:51 - Pacific Time
The U.S. Equal Employment Opportunity Commission (EEOC) has posted new data on job patterns in the private sector, as part of the Obama Administration’s Open Government Initiative. The EEOC released eleven new data sets from the most recent edition of its report "Job Patterns for Minorities and Women in Private Industry," commonly known as the EEO-1 survey, on www.Data.gov. The EEOC also posted the information on a new Open Government page at http://www.eeoc.gov/open/. The site offers a one-stop location for EEOC statistics and other performance-related materials. According to EEOC Acting Chairman Stuart J. Ishimaru, "Posting the latest aggregate EEO-1 survey results on Data.gov is the first step in what will be a larger EEOC effort to advance the President’s goal of opening up our government and providing greater access to agency information and operations. . We look forward to working with stakeholders as we create and implement our Open Government plan." The most recent data contains comprehensive labor force profiles of race, gender and ethnicity divided by various job categories. According to the 2008 EEO-1 survey and historical data: (1) of the approximately 62 million private sector employees nationwide covered by the 2008 survey, about 30 million (48%) were women and 21 million (34%) were minorities;(2) The rate of minority employment tripled between 1966 and 2008 from 11% to 34%; (3) Among the four minority groups continuously measured, the employment rate for Black or African Americans increased steadily from 8% in 1966 to 14% in 2008; (4) Hispanics or Latinos had the fastest growth rate in the private sector, increasing from 2.5% to over 13% between 1966 and 2008; (5) Women’s overall participation rate in the private sector jumped from 31% to 48% between 1966 and 2008. In addition to information on race, gender, ethnicity and job categories, the EEO-1 survey provides information on the size, location and industry of employers. Employers with 100 or more employees are required to file the annual survey, as well as employers with federal government contracts of $50,000 or more and 50 or more employees. Read More...
More Suits are Being Filed Against Small and Mid-sized California Businesses
Fri, 5 Feb 2010 06:31:01 - Pacific Time
Foremost Superior Marble Inc. executives wanted to do the right thing when they paid bonuses to employees for doing a good job. The Sacramento, California, company got sued in return. Three employees, backed by a San Jose attorney, claimed the extra money increased their pay rate enough to bump up the amount of overtime compensation they should have received. The lawsuit dragged on for more than 18 months before the company settled. Documents are pending, with a final legal tab of about $400,000. "We got hosed pretty good," Foremost president Paul Howard said. "We had a cushion for the bad economy, we know it goes up and down, but not for something unforeseen like this." Foremost is not alone. Overtime complaints, a staple of employment law, are moving down the food chain from big corporations to midsize and small employers, sources say. Dozens of individual cases have been filed in California against Dallas-based retailer Tuesday Morning Inc. since an appeals court tossed out a class action last year. Tuesday Morning, a closeout merchandise retailer, has seven local stores. Five Sacramento area lawsuits have been filed since December alleging that workers were not paid overtime for extra hours worked. Capital Fitness Network LLC, doing business as Gold’s Gym in Sacramento, Natomas and Elk Grove, California, was served with two lawsuits in January on behalf of seven former employees. They allege failure to compensate employees for hours worked and failure to pay overtime wages, among other complaints. Both companies declined comment due to the pending litigation, but lawyers say these cases are typical of the trend toward smaller employers. As large employers become more savvy, lawsuits move on to smaller targets. Wal-Mart paid $352 million to settle 63 cases in 2008, following allegations the giant retailer forced employees to work “off the clock” without appropriate compensation. Federal Express was ordered to pay California drivers $14.4 million in October 2008 after misclassifying them as independent contractors. Class actions against the "Big Four" largest accounting firms are winding their way through the courts, including one filed by the Sacramento firm Kershaw Cutter Ratinoff LLP against PricewaterhouseCoopers LLP. This case alleges unlicensed accountants were entitled to overtime but not paid for it. The trial court ruled in favor of the workers, but the company has filed an appeal, and a decision isn’t expected until late next year. "Our firm, by and large, hasn’t sued small businesses because, frankly, the economics don’t pencil out," Bill Kershaw said. Read More...
Landwin Management to Pay $500,000 for National Origin Bias and Sexual Harassment
Fri, 5 Feb 2010 06:16:52 - Pacific Time
The U.S. Equal Employment Opportunity Commission has announced the settlement of two lawsuits against Landwin Management, Inc., a San Gabriel, Calif.-based hotel operator, for $500,000 and substantial remedial relief in cases alleging national origin discrimination and sexual harassment. In the first lawsuit, the EEOC charged that non-Chinese banquet servers were not hired due to their national origin when the San Gabriel Hilton severed its contract and hired Landwin Management to operate the establishment in April 2005. The EEOC said that all the non-Chinese banquet servers who previously worked for the hotel at the time, many of whom were Latino, were not hired back during the turnover and instead replaced with less qualified Chinese workers. In the second suit, the EEOC alleged that the San Gabriel Hilton subjected female employees to a sexually hostile work environment, including verbal sexual harassment by the housekeeping department supervisor, who referred to the women as "whores" and "prostitutes" in addition to other offensive language. The supervisor also allegedly reprimanded the female employees if they even spoke to men, and Landwin failed to respond to the employees’ complaints of harassment. In addition to the $500,000 in monetary relief, Landwin must implement hiring and recruiting goals for Hispanic employees; revise its written policies on discrimination, sexual harassment and recruitment and hiring, train its employees on an annual basis regarding regarding discrimination, including national origin discrimination and sexual harassment; retain a consultant to assist with recruiting, hiring, training, revision of policies and record-keeping procedures; and, provide annual reports to the EEOC regarding its employment practices. According to Anna Y. Park, regional attorney for the EEOC’s Los Angeles District office, "The days when employers make decisions based on stereotypes and assumptions shaped by the race or national origin of their employees should be far behind us. Further, sexual harassment should no longer be tolerated in any workplace, and employers should never condone or overlook the mistreatment of vulnerable victims, such as monolingual Spanish-speaking women." EEOC Los Angeles District Director Olophius Perry added, "Employers must take appropriate corrective action when they receive harassment complaints. We hope that other employers take the lead of the San Gabriel Hilton and take proactive action to ensure EEO compliance. Businesses should take advantage of EEOC trainings that are available to encourage compliance and proactive prevention." Read More...
Immigration Raids Yield Jobs for Legal Workers
Thu, 4 Feb 2010 07:24:15 - Pacific Time
When federal agents descended on six meatpacking plants owned by Swift & Co. in December 2006, they rounded up nearly 1,300 suspected illegal immigrants that made up about 10% of the labor force at the plants. But the raids by Immigration and Customs Enforcement (ICE) agents did not cripple the company or the plants. In fact, they were back up and running at full staff within months by replacing those removed with a significant number of native-born Americans, according to a report by the Center for Immigration Studies (CIS).That was the most extreme example of what has become an increasingly common result of the raids: "They were very beneficial to American workers," according to Vanderbilt University professor Carol Swain. "Whenever there's an immigration raid, you find white, black and legal immigrant labor lining up to do those jobs that Americans will supposedly not do," said Swain, who teaches law and political science. Exactly who is filling the jobs has varied, depending on the populations surrounding the plants. Out West, one of the Swift plants raided by ICE, had a workforce that was about 90% Hispanic - both legal and illegal - before the raids. The lost workers were replaced mostly with white Americans and U.S.-born Hispanics, according to the CIS. In the South, a House of Raeford Farms plant in North Carolina that was more than 80% Hispanic before a federal investigation is now about 70% African-American, according to a report by TheCharlotte Observer. Throughout the Great Plains, a new wave of legal immigrants is filling the void, according to Jill Cashen, spokeswoman for the United Food and Commercial Workers union, which represents 1.3 million people who work in the food-processing industry. Plants are refilling positions with newly arrived immigrants from places such as Sudan, Somalia and Southeast Asia. Read More...
Administrative Law Judge Holds That Bank of America Discriminated Against African-American Job Applicants
Thu, 4 Feb 2010 07:18:14 - Pacific Time
A U.S. Department of Labor Office of Federal Contract Compliance Programs (OFCCP) investigation has resulted in an administrative law judge's (ALJ) recommended ruling that Bank of America discriminated against African-American job applicants for entry level positions in Charlotte, N.C., in 1993 and from 2002 to 2005. According to OFCCP Director Patricia A. Shiu, "The Labor Department is committed to ensuring that all workers — including African-Americans — are treated fairly by federal contractors in decisions concerning hiring, promotion and compensation. . .Further, contractors cannot use litigation as a means to obstruct OFCCP's ability to conduct its authorized investigations and pursue relief for victims of discrimination." The ALJ held that the bank intentionally discriminated against African-American clerical, administrative and teller applicants at its Charlotte facility. The ALJ also found that the bank's failure to retain records as required by law without justification did not lessen the statistical disparities found by OFCCP's expert. The ALJ will hold a hearing to determine what remedies should be provided by the Bank of America. After the ALJ issues a recommended decision on a remedy, the case will proceed to the department's Administrative Review Board for a final agency decision. Read More...
EEOC Sues Law Firm For Age Discrimination and Retaliation
Tue, 2 Feb 2010 00:44:40 - Pacific Time
The EEOC has sued Kelley Drye & Warren (Kelly Drye), an international law firm with its primary office in New York City, for alleged age discrimination law. According to the EEOC’s lawsuit, Kelley Drye used a compensation system in which attorneys who practiced law after turning 70 received reduced compensation compared to similarly productive younger attorneys solely because of their age. The EEOC further charged that Kelley Drye unlawfully retaliated against Eugene T. D'Ablemont, an attorney who has practiced law at the firm for over 40 years, by further reducing his compensation after he complained about this discriminatory policy. According to EEOC Acting Chairman Stuart J. Ishimaru, “Law firms that single out older attorneys for adverse treatment simply because of their age run great risk of violating the federal prohibition on age discrimination. . .This lawsuit should serve as a wake-up call for law firms to examine their own practices to ensure they comport with federal law.” The EEOC’s lawsuit alleges that Kelley Drye requires all partners to give up their ownership interest in the firm at 70. If an attorney continues to work, his or her compensation consists of an annual "bonus" payment in an amount which is completely within the discretion of the firm's executive committee. Spencer H. Lewis, Jr., director of the EEOC New York District Office, observed that, "More and more attorneys are effectively practicing law into their 70s and beyond. This is also seen by the fact that most current Justices on the U.S. Supreme Court are over 70 years old." Read More...
Pilgrim's Pride pays more than $1M in back wages
Mon, 1 Feb 2010 07:22:10 - Pacific Time
Pilgrim's Pride Corp. (PPC) reached a settlement with the U.S. Department of Labor to pay about $1 million to settle a review regarding payment to some employees. The U.S. Department of Labor's Web site says the agreement settles allegations that Pilgrim's Pride failed to properly pay overtime back wages as required by the Fair Labor Standards Act, or FLSA. The law's overtime violations occurred in part because the company failed to pay its employees for all hours worked, including time spent putting on and taking off protective clothing, according to the Web site. Additionally, the U.S. government alleged that required record- keeping wasn't maintained. The meatpacker's payment will be distributed as overtime compensation to about 800 current and former employees at the company's Dallas processing facility, the company said Friday. The review focused on pay for the minimal time employees spend in putting and taking off protective work clothing such as smocks, aprons and gloves which are required for their jobs at the plant. As part of the settlement, Pilgrim's Pride agreed to modify some time-collection practices, which it said has been the industry standard for decades. Both Pilgrim's Pride and the federal government also acknowledged the agreement doesn't constitute any admission the company violated any provision of the Fair Labor Standards Act. It was the second settlement between Pilgrim's Pride and the U.S. government in a month. Late last year, the company agreed to pay $4.5 million to settle an investigation into identity theft and other alleged crimes. Read More...