innovative wage and hour litigation strategy: the ellerth...
TRANSCRIPT
Presenting a live 90‐minute webinar with interactive Q&A
Innovative Wage and Hour Litigation Strategy: The Faragher‐Ellerth DefenseAsserting and Challenging the Avoidable Consequences Affirmative Defense in FLSA and State Collective and Class Actions
T d ’ f l f
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
THURSDAY, AUGUST 4, 2011
Today’s faculty features:
Lee Schreter, Shareholder, Littler Mendelson, Atlanta
Adam T. Klein, Partner, Outten & Golden, New York
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I ti W d H Innovative Wage and Hour Litigation Strategy:Litigation Strategy:The Faragher/Ellerth Defense
August 4, 2011
Adam Klein, Esq.PartnerOutten &Golden LLP
Lisa “Lee” Schreter EsqLisa Lee Schreter, Esq.ShareholderLittler Mendelson, P.C.
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Adam T. KleinAdam T. Klein
Partner Outten & Golden LLP Partner, Outten & Golden LLP. Chairs the Firm’s Class Action
P ti GPractice Group. Serves as lead or co-lead
plaintiffs’ counsel in wage and hour class and collective actions against numerous major actions against numerous major corporations.
A f t k A frequent speaker on employment law topics. 7
Lee SchreterLee Schreter
Shareholder, Littler Mendelson. Concentrates her practice
advising employers in complex class and collective actions i l i ti d th involving overtime and other wage-related claims.
R ti l d i l Routinely advises employers on legal compliance and litigation prevention measures litigation prevention measures relating to wage and hour. 8
Federal FLSA ComplaintsFederal FLSA Complaints
7 3107,000
8,000
7,310
5,000
6,000
2 751
3,6174,039 4,207
2 000
3,000
4,000
2,751
0
1,000
2,000
2003 2004 2005 2006 2007
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Doctrine of Avoidable Consequences
Th d t i b t f i d The doctrine bars a party from recovering damages where the injured party could have avoided harm through reasonable efforts.
Also referred to as the duty to mitigate. The doctrine is an ancient one that has been in
existence since Roman times.existence since Roman times. The doctrine has been routinely applied in contract
and tort cases U S S C t h l li d th d t i i U.S. Supreme Court has also applied the doctrine in
Title VII cases. See Ford Motor Co. v. EEOC, 458 U.S. 219 (1982); Faragher v. City of Boca Raton, 524 U.S. 775 (1998); Kolstad v American Dental Ass’n 527 U S 775 (1998); Kolstad v. American Dental Ass n., 527 U.S. 526 (1999). Now referred to as the Faragher Defense.
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Doctrine as Applied by Supreme CCourt
Although Title VII seeks to make employees Although Title VII seeks to make employees whole for unlawful discrimination, its “primary objective” is “not to provide redress but to avoid harm ”harm.”
Preferred means of achieving statutory goals is through cooperation and voluntary compliancethrough cooperation and voluntary compliance.
As envisioned by the Supreme Court, the defense encourages employers to adopt policies g p y p pand procedures to ensure compliance and provide employees with an avenue by which they can report improper conduct to their y p p pemployer.
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Doctrine as Applied to FLSA and S L W d H CState Law Wage and Hour Cases
Like Title VII primary objective of FLSA is to ensure Like Title VII, primary objective of FLSA is to ensure compliance and that employees are paid minimum wage and overtime.
The DOL has already endorsed the doctrine in the FLSA The DOL has already endorsed the doctrine in the FLSA context when it created a safe harbor for salary deductions in the 2004 white collar regulations.
In Preamble DOL stated: In Preamble, DOL stated:We believe it furthers the purposes of the FLSA to permit the
employer who has a clearly communicated policy prohibiting improper pay deductions and a mechanism for employee complaints p p p y p y p. . . This is generally consistent with trends in employment law. An employer, for example, that has promulgated a policy against sexual harassment and takes corrective action upon receipt of a complaint may avoid liability.
69 Fed. Reg. 22182 (April 23, 2004).12
Application to FLSA CasesApplication to FLSA Cases Limited in application to off the clock work cases Limited in application to off-the-clock work cases. While employer bears ultimate burden of proper timekeeping,
courts have increasingly recognized that an employee plays an important role in proper timekeeping.p p p p g
Number of courts have held that employees are not free to disregard timekeeping policies:
At the end of the day, an employee must show that the employer y p y p yknew or should have known that he was working overtime or, better yet, he should report the overtime hours himself. Either way, the employee bears some responsibility for the proper implementation of the FLSA’s overtime provisions. An employer cannot satisfy an obligation that it has no reason to think exists And an employee cannot undermine his no reason to think exists. And an employee cannot undermine his employer’s efforts to comply with the FLSA by consciously omitting overtime hours for which he knew he could be paid.
Wood v. Mid-America Management Corp.2006 WL 2188706 (6th Cir. 2006)
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Elements of the Faragher/Ellerth D fDefense
Adopt and publicize clear timekeeping policies and procedures Adopt and publicize clear timekeeping policies and procedures. Train managers and employees on key FLSA concepts,
timekeeping policies, and complaint mechanism. Require employees to review and if correct certify the accuracy Require employees to review, and, if correct, certify the accuracy
of time records. Implement a robust complaint mechanism specifically targeted to
wage and hour complaints. g p Audit time records to ensure employees and managers are
complying with policies and procedures. Discipline managers and employees for violation of timekeeping p g p y p g
policies and procedures. Reinforce timekeeping policies through periodic reminders.
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Element 1: Adopt and Publicize Clear Ti k i P li i d P dTimekeeping Policies and Procedures Timekeeping policies should appear in handbooks Timekeeping policies should appear in handbooks,
ethics policies, and collective bargaining agreements. Require signed receipt to demonstrate knowledge of
policies and procedures policies and procedures. Recommend policies should:
– Define working time with examples that target most common misconceptions.– Address meal periods, and instruct employees on what to do if a meal period is interrupted
or missed.– Prohibit off-the-clock work but advise that in the event work is performed, employees will
be paid.– Require immediate reporting of off-the-clock work within 72 hours of occurrence.Require immediate reporting of off the clock work within 72 hours of occurrence.– Provide a mechanism for employees to report off-the-clock work.– Require advance authorization for overtime except in the event of an emergency .– Advise employees that no one is authorized to require off-the-clock work.
Require employees to report violations of timekeeping policies within 72 hours of – Require employees to report violations of timekeeping policies within 72 hours of occurrence and require employees to pursue alternative complaint mechanism by calling 1-800 number if no response received from initial complaint within 5 business days.
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Element 2: TrainingElement 2: Training
Train both managers and employees regarding FLSA Train both managers and employees regarding FLSA and state law wage and hour requirements and Company timekeeping policies and procedures.
O li t i i id id l h i f d li On-line training provides ideal mechanism for delivery of training as it ensures uniformity and consistent documentation of training.
Training should involve interactive learning model with examples targeted toward common violations (i.e.,missed meal periods, improper supervisory instructions, and volunteers) and volunteers).
Require refresher training at periodic intervals. Require training for all new managers and employees. Require training for all new managers and employees.
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Element 3: Certification of Time R dRecords
Require non exempt employees to review time records Require non-exempt employees to review time records. Daily review is ideal but something less frequent can be
used provided employees have the opportunity to i t l d review actual records.
Provided records are correct, require employee certification as to accuracy.
If records are not correct, require employee to identify any inaccuracies to permit immediate correction.
Require employees to review accuracy of paycheck Require employees to review accuracy of paycheck and, if systems permit, certify secondary review. On-line tools make this level of review more available.
C tifi ti h ld ff th l k k d l Certification should cover off-the-clock work and meal periods.
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Element 4: Adopt a Robust C l i M h iComplaint Mechanism
Most employers already have some type of complaint mechanism in Most employers already have some type of complaint mechanism in place.
Existing complaint mechanisms often do not specifically reference wage and hour issues.
Revise existing complaint mechanism to ensure it specifically addresses wage and hour issues.
Publicize complaint mechanism in handbooks, open door policies, collective bargaining agreements, ethics handbooks, and other g g g , ,employee communication channels.
Train managers and payroll personnel to be alert to payroll concerns and treat any complaints with same level of attention as other employee relations complaints (i.e., sexual harassment). e a o s co p a s ( .e., se ua a ass e ).
Promptly investigate payroll concerns using same techniques and controls as other types of internal complaints.
If determined to be appropriate, take prompt and effective remedial steps steps.
Effective remediation may require payment of back wages.18
Element 5: Audit Time Records f C lifor Compliance
Adopt an audit protocol to ensure employees Adopt an audit protocol to ensure employees and managers are following policies and procedures.
Audit protocol should be designed to be discoverable in the event of future litigation as part of company's good faith defense part of company s good faith defense.
Promptly investigate and remediate any discovered violations.
Implement appropriate discipline for managers and employees in the event of violations.
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Element 6: Levy Commensurate Discipline for Policy Violations by p f y y
Employees and Managers In some reported cases employers have In some reported cases, employers have
been criticized for quickly disciplining employees for timekeeping violations but not d i f i l ti doing so for manager violations.
Manager misconduct is increasingly being characterized as wage theft characterized as wage theft.
Manager misconduct should be promptly addressed and, where confirmed, considered , ,serious violation of the company's most important policies.
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Element 7: Periodic R i dReminders
Timekeeping policies and procedures should Timekeeping policies and procedures should be reinforced through available communication means.
Annual letter to all employees. Newsletters. Postings. Refresher training.g
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