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© 2016 Zuckerman Spaeder LLP

Showing 11 posts in Wage and Hour‎.

Hello, Federal: Can Out-of-State Employers Contract Around Maryland’s Wage Payment Law?

An earlier generation of Baltimore lawyers used to say that the outcome of a case should not depend on which side of Calvert Street it was filed. This made sense when the federal court was on the east side of Calvert and the state court on the west. The statement was a colloquial expression of the Erie doctrine, which requires federal courts to apply state law when federal jurisdiction depends on diversity of the parties’ citizenship.

The Erie doctrine requires federal judges to figure out how state judges would rule in certain matters. You might imagine a federal judge strolling across Calvert Street to ask for some advice. But that’s not how state and federal judges speak to one another (and not just because the federal court long ago moved to a dismal building on Lombard Street).

Instead, federal judges read the published judicial decisions from the state whose law applies. Under Erie, federal judges are required to follow the holding of decisions from the state’s highest court. They are not required to follow “dicta” – statements in a judicial opinion that are not necessary to the outcome. In many cases, the state’s highest court has not ruled on the particular legal question at issue. In that event, the federal court must predict how the state court would rule based on other sources of state law. One of those sources is “considered dicta” (or well-reasoned dicta) from the decisions of the state’s highest court. Read More ›

This Year’s Scariest Posts on Executive Disputes

In honor of Halloween, we are looking over our shoulder at some of the most frightening news that we have brought to you this year on Suits by Suits:

  • Earlier this week, we told you the tale of a CEO who was hauled into court thousands of miles away and slapped with an employee’s wage bill.  That’s the kind of stuff executive nightmares are made of.
  • Bonfires are part of what makes Halloween special.  Unless they involve torching a laptop, destroying evidence, and getting hit with an adverse inference for spoliation at trial, which is what happened to one unhappy executive.
  • The SEC announced its presence as a boogeyman for employers who punish whistleblowers, filing its first Dodd-Frank anti-retaliation action against one company and ordering a $30 million bounty for another employee.
  •  Terror babies are scary, as anyone who’s seen Rosemary, Chucky, and Damien on screen knows.  Now, we have more terror babies to add to the mix, thanks to the bizarre saga of Rep. Louis Gohmert and fired Texas art director Christian Cutler.
  • Ever been lost in a hall of mirrors?  Just think how confused this executive was, after her employer told her that she wasn’t releasing her claims for a shareholder payment and then defeated those same claims based on … her release.
  • And perhaps the scariest story of all: the company that lost a non-compete dispute and then had to pay $200,000 of its opponent’s legal fees.  That’s like finding a razor blade in your Mounds bar.

Employee Wins Cross-Country Wage War Against CEO

The Supreme Court of Washington’s recent decision in Failla v. FixtureOne Corporation is noteworthy on two levels.

First, it involved the surprising claim by a salesperson, Kristine Failla, that the CEO of her employer (FixtureOne) was personally liable for failing to pay her sales commissions.  Typically, if an employee had a claim for unpaid commissions, you’d expect the employee to assert that claim against her company, not the chief.  But under the wage laws of the state of Washington, an employee has a cause of action against “[a]ny employer or officer, vice principal or agent of any employer ... who ... [w]ilfully and with intent to deprive the employee of any part of his or her wages, [pays] any employee a lower wage than the wage such employer is obligated to pay such employee by any statute, ordinance, or contract.”  Read More ›

Is It a Defense to the Buffalo Jills’ Minimum Wage Claim That They "Agreed" to Be Independent Contractors?

Cheerleading SilhouetteOn Friday, we described a lawsuit brought recently by five Buffalo Jills cheerleaders claiming that they should have been paid the minimum wage for all of the hours that they worked for the squad but were not. We said that a key issue in the case is whether the Jills are employees or independent contractors for purposes of New York wage and hour law because employers are required by the law to pay employees – but not independent contractors – the minimum wage. The lawsuit raises another question: is it a valid defense to the Jills’ claims that the defendants required them to sign contracts expressly agreeing that they are "independent contractors"? Here is one of those rare legal issues with a simple answer, at least under the federal wage and hour law called the Fair Labor Standards Act: No. As recently as last year, the U.S. Supreme Court said of the Fair Labor Standards Act: "The FLSA establishes federal minimum-wage, maximum-hour, and overtime guarantees that cannot be modified by contract."

So companies should beware that having people who work for them agree in writing that they are independent contractors does not inoculate the companies from wage and hour claims. And people who work for companies should know that just because they signed something saying that they are independent contractors does not necessarily mean that they are for purposes of the wage and hour laws.  They may in fact be entitled under the law to be paid the minimum wage and overtime.

Buffalo Jills Boo Bosses but Lawsuit Raises Question: Are NFL Cheerleaders "Employees" Protected by Minimum Wage Laws?

CheerleaderIn a lawsuit filed on Tuesday, five Buffalo Jills cheerleaders claim that the Buffalo Bills NFL franchise and two companies that manage the squad are violating New York wage and hour laws. The Jills allege that they are "employees" for purposes of New York law and therefore must be paid the minimum wage - $8 per hour in New York – for their work as Jills. We have explored wage and hour laws – the federal Fair Labor Standards Act and similar state laws – here at Suits by Suits before but not the employee versus independent contractor distinction that is the key to many wage and hour cases and on which the Jills’ case could turn. Read More ›

How You Came To Have Today Off

If you've ever wondered how Labor Day came to be -- how it got its name, why Americans celebrate it (and what exactly we are supposed to celebrate, between the car sales, barbecues and end-of-summer beach getaways), we've got the answers for you right here, in a look at Labor Day we posted last summer.  Enjoy it -- and then go enjoy the day!  Our regular posts about disputes between executives and employers will resume once we get past this beach traffic

Cratchit v. Scrooge - Holiday Adventures in Employment Law

Cratchit v. ScroogeBob Cratchit’s boss, Ebenezer Scrooge, is an “odious, stingy, hard, unfeeling man.”  Or, at least that’s what Mrs. Cratchit says of him after feeding her family of eight, including her crippled son, Tiny Tim, a too-small pudding for dessert on Christmas.  Readers of Dickens’ A Christmas Carol could easily reach the same conclusion.   Bob, a clerk in Scrooge’s business (which some suggest is what we would call a stock brokerage today), is paid a mere 15 shillings weekly to work six days a week in an office that Scrooge refuses to adequately heat.  That seems bad.  But, today, in say, New London, somewhere in the U.S.A., would it be illegal?  For these final days of the holiday season, we explore possible causes of action in Cratchit v. Scrooge.  (We are not the only lawyers with these types of holiday musings.) Read More ›

Exactly How Many Holidays Do We Have, Anyway?

So it’s Christmas time.  And Hanukkah and Kwanzaa time.  And it all follows Thanksgiving and then is promptly succeeded by New Year’s Eve and the Feast of the Epiphany. 

Yikes.  That’s a lot of holidays.  For employers and company managers, this means a lot of decisions about what days the business should be closed – and regardless of those decisions, it means lost productivity.  It’s hard to estimate how much productivity is lost due to the November and December holidays, but if the Super Bowl is any guide – and $820 million in productivity is lost during Super Bowl week – then it could be in the billions of dollars.  As one famous old curmudgeon noted, the whole thing is a poor excuse for picking a business owner’s pocket every December

My colleague Andrew Torrez wrote recently about the history of the Christmas holiday.  But looking at this more generally: how did we wind up with the number of holidays that we have now?  Did we always have this many?  Read More ›

First Circuit to Starbucks: No Means No, Tips are for Baristas Only

In an opinion that we have been awaiting, late last week, the U.S. Court of Appeals for the First Circuit affirmed the Massachusetts federal court’s ruling that Starbucks violated the Massachusetts Tip Act by requiring baristas to share with shift supervisors tips left by customers.  The First Circuit agreed with the lower court that Starbucks shift supervisors have some managerial responsibilities and therefore cannot share in the tips.  The Tip Act prohibits employers from requiring “wait staff employees” – who are defined in the Act as having “no managerial responsibility” and whom the parties agreed include Starbucks baristas – from sharing tips with anyone who is not a wait staff employee.   Starbucks argued that its shift supervisors have no managerial responsibility because, just like baristas, they spend the vast majority of their time serving customers.  The First Circuit wasn’t buying it, noting that the Act has a bright-line test for defining wait staff employees, that the “no”  in “no managerial responsibility” means “no,” and that shift supervisors do not pass the test because they are, for example, “charged with opening and closing the store, handling and accounting for cash, and ensuring that baristas take their scheduled breaks.”  The court also said that Starbucks’ internal documents explaining that shift supervisors “‘directly manage’ three to six other employees while on shift” were “potent evidence” against Starbucks.  The First Circuit also left intact the lower court’s certification of a class of Massachusetts baristas and its award of damages to them of over $14 million – which includes $7.5 million in tips that Starbucks allocated to shift supervisors.  We are still on the lookout for how the New York Court of Appeals will rule in a similar case challenging Starbucks’ tip pooling practices under New York Law.  

Starbucks Serves Its Employees Customer Service Duties with Shots of Supervisory Responsibility - How Many Extra Shots Mean No Tips?

Coffee Beans Starbucks connoisseurs appreciate the difference between a Venti Half-Caf Americano and a Single Grande White Chocolate Mocha.  But, when they drop change in the tip box before walking away with their morning caffeine fix, do they appreciate the differences between a barista and a shift supervisor?  How about between a shift supervisor and an assistant store manager (“ASM”)?  How about between an ASM and a store manager?  Starbucks customers may not know these differences, but they are the key to resolving questions that the U.S. Court of Appeals for the Second Circuit has just certified to the highest New York state court in two cases brought against Starbucks. One of the cases was brought by baristas; the other by ASMs. Read More ›