Yesterday, the federal Department of Labor released a number of administrative letter opinions from last month, one of which concerned a training program for long-time retail store managers who wished to be promoted to regional store managers. (FLSA 2008-19). Both the store managers and the regional managers constituted exempt managerial positions. The question posed was whether the store managers lost their exemption during the training period because the store managers would perform little or no exempt work during about half of the seven week training period (while they shadowed the regional managers).
According to the inquiry, “[d]uring the training period, each of the store managers accompanies an area sales manager on visits to area stores, reviews store paperwork, addresses issues with the managers of the stores visited, investigates inventory shortages and violations of company policy, and attends sales meetings. At the beginning of the training period, the trainee simply “shadows” the area sales manager, but as the training progresses, the area sales manager delegates more and more duties to the trainee. By the end of the training period, it is the area sales manager who “shadows” the trainee.” During the training period, “trainees analyze sales figures, product returns, and inventory data to determine store performance; review data with the store manager and suggest improvements; review the hours worked by employees; approve payroll; determine whether the store manager allocates labor hours effectively and, if not, suggest improvements; audit lottery ticket sales; and work with the store manager to control losses.” Thus, for the first few weeks, the trainee performs little or no exempt work. After the training period ends (or if the trainee fails to complete the program), the trainee returns to a store manager position until a potential regional manager position opens and the manager successfully applies for it.
The employer was concerned about the trainee’s exempt status because “29 C.F.R. § 541.705 states, “exemptions do not apply to employees training for employment in an executive . . . capacity who are not actually performing the duties of an executive . . . employee.” In addition, “exemptions normally apply on a workweek by workweek basis.” However, there is also a federal district court case in which the plaintiff was found to be exempt during a period of training that was between two periods in which he qualified as an exempt systems engineer. Booth v. EDS Corp., 799 F. Supp. 1086, 1093 (D. Kan. 1992). (“[The plaintiff] has pointed to no evidence in the record that indicates that he or EDS considered phase two of the [training] program to be a separate employment position.”).
According to the Acting Wage and Hour Administrator, “[t]he fact that, during at least some of the weeks of training, the store managers do not perform significant amounts of exempt work, in and of itself, does not cause the store managers to lose their exempt status because the primary duty test for executives need not be met each and every workweek in all cases. In its 2004 revisions to 29 C.F.R. Part 541, the Department included this discussion in the preamble to the final regulations:
“As stated in the 1949 Weiss Report at 61, the search for an employee’s primary duty is a search for the ‘character of the employee’s job as a whole.’ Thus, both the current and final regulations ‘call for a holistic approach to determining an employee’s primary duty,’ not ‘day-by-day scrutiny of the tasks of managerial or administrative employees.’ Counts v. South Carolina Electric & Gas Co., 317 F.3d 453, 456 (4th Cir. 2003) (“Nothing in the FLSA compels any particular time frame for determining an employee’s primary duty”). To clarify this ‘holistic approach,’ the Department has reinserted in subsection (a) the language from current 541.304 that the determination of an employee’s primary duty must be based on all the facts in a particular case ‘with the major emphasis on the character of the employee’s job as a whole.’ 69 Fed. Reg. 22,122, 22,186 (Apr. 23, 2004) (emphasis in original).”
In this situation, the DOL found that “there is no reason to believe that the seven-week training program itself is an employment position in the company. Nor is it reasonable to conclude that the store managers’ primary duty changes during the seven weeks of training. These employees, who we are to assume have been employed as bona fide exempt store managers for years, remain exempt during the seven weeks of management training because their primary duty continues to be that of an exempt store manager. The training provided is of limited duration and does not consist of the performance of work that would otherwise be performed by nonexempt workers. The managers return to their normal exempt store manager duties following the training. Under these circumstances, where the trainees are employed in exempt positions and are temporarily reassigned to training for a different exempt position, it is our opinion that the exemption is not lost during the training period.”
Insomniacs can read the full letter opinion letter at http://www.dol.gov/esa/whd/opinion/FLSA/2008/2008_12_19_19_FLSA.htm.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
Friday, January 9, 2009
Monday, January 5, 2009
Delaware County Court of Appeals Reverses Employer’s Summary Judgment on Age Discrimination Claim of Fired Salesman With History of Declining Sales.
Last month, a divided Delaware County Court of Appeals reversed summary judgment on an age discrimination claim which had been entered in favor of an employer and against a salesman who had been terminated for poor performance. Peters v. Rock-Tenn Co., 2008-Ohio-6444. According to the court, the plaintiff alleged that he had been set up to fail by his employer when it doubled his sales quota and required him to sell new products. The employer showed that his sales had declined in each of the prior four years. Problematic for the employer, however, was evidence that the sales goal of the plaintiff’s significantly younger replacement was no greater than the plaintiff’s actual sales.
According to the court’s opinion, the plaintiff alleged that he had been terminated from his sales job in January 2007 after 25 years of employment based on his age. In particular, he alleged “that he had been assigned additional duties without adequate support and training, as a pretext for terminating his employment.” In the year before his termination, his new supervisor both doubled his sales goals and required him to begin selling new products in territories already covered by existing sales agents. However, the sales goal of his significantly younger replacement was less than the plaintiff’s goal; the replacement was apparently only required to match what the plaintiff had sold in his last year of employment.
The employer contended that the plaintiff had been discharged for unsatisfactory performance. According to the employer, the plaintiff’s sales had actually decreased in each of the prior four years and he had only successfully solicited one new client in the last three year (which brought in less than $1,000 in sales commission). His supervisor testified that he was among the poorest performing salespeople. In essence, he was “coasting” on his existing client base and was no longer effective at generating new sales – or even maintaining his existing sales level.
However, the plaintiff produced evidence that he had received a large bonus for 2006, and that he had been commended by his supervisor for receiving a perfect satisfaction score from his largest customer. He also argued that by doubling his sales quota and assigning him new products to sell, the employer was setting him up to fail and shared the blame for his declining sales performance. Surprisingly, the court of appeals found this argument to be sufficient to create a material issue of disputed fact which could only be resolved by a jury trial and not by a judge on summary judgment.
The court indicated that it was rejecting supposed evidence of discriminatory intent -- based on a comment by a non-decisionmaker (a plant general manager) that he and the plaintiff were the “old” company – because it was isolated and ambiguous.
In his dissent, one judge noted that the plaintiff had admitted that the employer wanted all of its salespeople to meet his new goal and “the median age of the company’s salesmen was 55; all were over the age of forty, and half were older than” the plaintiff. Moreover, merely because the plaintiff was good at certain aspects of his job should not have obviated the employer’s concern with his inability to generate new sales in the last three years. Nonetheless, the case was remanded to a jury trial.
Insomniacs can read the court’s decision in full at http://www.sconet.state.oh.us/rod/docs/pdf/5/2008/2008-ohio-6444.pdf.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
According to the court’s opinion, the plaintiff alleged that he had been terminated from his sales job in January 2007 after 25 years of employment based on his age. In particular, he alleged “that he had been assigned additional duties without adequate support and training, as a pretext for terminating his employment.” In the year before his termination, his new supervisor both doubled his sales goals and required him to begin selling new products in territories already covered by existing sales agents. However, the sales goal of his significantly younger replacement was less than the plaintiff’s goal; the replacement was apparently only required to match what the plaintiff had sold in his last year of employment.
The employer contended that the plaintiff had been discharged for unsatisfactory performance. According to the employer, the plaintiff’s sales had actually decreased in each of the prior four years and he had only successfully solicited one new client in the last three year (which brought in less than $1,000 in sales commission). His supervisor testified that he was among the poorest performing salespeople. In essence, he was “coasting” on his existing client base and was no longer effective at generating new sales – or even maintaining his existing sales level.
However, the plaintiff produced evidence that he had received a large bonus for 2006, and that he had been commended by his supervisor for receiving a perfect satisfaction score from his largest customer. He also argued that by doubling his sales quota and assigning him new products to sell, the employer was setting him up to fail and shared the blame for his declining sales performance. Surprisingly, the court of appeals found this argument to be sufficient to create a material issue of disputed fact which could only be resolved by a jury trial and not by a judge on summary judgment.
The court indicated that it was rejecting supposed evidence of discriminatory intent -- based on a comment by a non-decisionmaker (a plant general manager) that he and the plaintiff were the “old” company – because it was isolated and ambiguous.
In his dissent, one judge noted that the plaintiff had admitted that the employer wanted all of its salespeople to meet his new goal and “the median age of the company’s salesmen was 55; all were over the age of forty, and half were older than” the plaintiff. Moreover, merely because the plaintiff was good at certain aspects of his job should not have obviated the employer’s concern with his inability to generate new sales in the last three years. Nonetheless, the case was remanded to a jury trial.
Insomniacs can read the court’s decision in full at http://www.sconet.state.oh.us/rod/docs/pdf/5/2008/2008-ohio-6444.pdf.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
Friday, January 2, 2009
Ohio Appeals Court Denies Unemployment Compensation To Supervisor Who Was Fired for Challenging His Managers About His Subordinates.
Last month, the Summit County Court of Appeals affirmed the denial of unemployment compensation to a manager who had been fired for insubordination in challenging his managers on behalf of his employees and for violating company policies and procedures. Curtis v. InfoCision Mgt Corp., 2008-Ohio-6434. Moreover, the employee had been ordered by the Unemployment Compensation Board of Review to repay $7,000 in unemployment compensation he had received before the employer’s appeal had been upheld.
As reported by the court, the fired manager had been taken through progressive discipline and was involved in three incidents of insubordination and/or policy violations before being fired. The first incident – on May 27, 2005 – took place after the supervisor’s manager questioned him about several of his employees leaving early for, and others returning late from, lunch. The supervisor “yelled across the room to [his manager] asking him what he was going to do about the employees returning late. In response to this, [the manager] asked [the supervisor] to step outside of the room and into the hallway where their conversation would not be overheard by other employees. [The supervisor] refused multiple requests to leave the room and speak with [the manager and] was issued a written warning for insubordination a few days later.
Later in October 2005, the supervisor sent an inappropriate email to another manager accusing him of lying and being unprofessional in the actions he took involving the termination of one of the supervisor’s most productive subordinates by a customer. The manager indicated that he only agreed to speak with the customer liason about the problem, but the supervisor insisted that he had promised to do more on behalf of the subordinate: "Let's be perfectly honest with each other. You DID indeed say last week that you were going to speak to [them] BOTH. I understand that we will just go on from here and [the employee] will be OK with that. But please do not lie straight to my face and tell me that you never said that you were going to talk to [them]. That is not professional or acceptable to me personally and/or morally."
Just a few days later, the supervisor then violated company policy by permitting his employees to call customers off a suspended call list because they otherwise had nothing to do. The supervisor was aware that the customer had suspended the particular program and had not yet been given a direction that the suspension had been lifted. He was then fired a few days later. The Court agreed with the UCBR that the supervisor had been fired with just cause and was not, therefore, eligible for unemployment compensation.
Insomniacs can read the decision in full at http://www.sconet.state.oh.us/rod/docs/pdf/9/2008/2008-ohio-6434.pdf.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
As reported by the court, the fired manager had been taken through progressive discipline and was involved in three incidents of insubordination and/or policy violations before being fired. The first incident – on May 27, 2005 – took place after the supervisor’s manager questioned him about several of his employees leaving early for, and others returning late from, lunch. The supervisor “yelled across the room to [his manager] asking him what he was going to do about the employees returning late. In response to this, [the manager] asked [the supervisor] to step outside of the room and into the hallway where their conversation would not be overheard by other employees. [The supervisor] refused multiple requests to leave the room and speak with [the manager and] was issued a written warning for insubordination a few days later.
Later in October 2005, the supervisor sent an inappropriate email to another manager accusing him of lying and being unprofessional in the actions he took involving the termination of one of the supervisor’s most productive subordinates by a customer. The manager indicated that he only agreed to speak with the customer liason about the problem, but the supervisor insisted that he had promised to do more on behalf of the subordinate: "Let's be perfectly honest with each other. You DID indeed say last week that you were going to speak to [them] BOTH. I understand that we will just go on from here and [the employee] will be OK with that. But please do not lie straight to my face and tell me that you never said that you were going to talk to [them]. That is not professional or acceptable to me personally and/or morally."
Just a few days later, the supervisor then violated company policy by permitting his employees to call customers off a suspended call list because they otherwise had nothing to do. The supervisor was aware that the customer had suspended the particular program and had not yet been given a direction that the suspension had been lifted. He was then fired a few days later. The Court agreed with the UCBR that the supervisor had been fired with just cause and was not, therefore, eligible for unemployment compensation.
Insomniacs can read the decision in full at http://www.sconet.state.oh.us/rod/docs/pdf/9/2008/2008-ohio-6434.pdf.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
Monday, December 29, 2008
Ohio Court Dismisses Physical Therapist's Public Policy and Whistleblower Claims Against Non-Profit Employer For Not Alleging Criminal Misconduct.
Late last month, the Montgomery County Court of Appeals affirmed the summary judgment entered for a non-profit employer of a physical therapist who had claimed that she had been wrongfully discharge in violation of public policy and Ohio’s Whistleblower statute. Duvall v. United Rehabilitation Servs. of Greater Dayton, 2008-Ohio-6231. The court held that the public policy claim failed because the Ohio statute which prohibited professional associations from interfering with the professional judgment of a physical therapist did not apply to non-profit employers. In addition, the court held that the whistleblower statute only applied to allegations of criminal conduct, which the plaintiff had not raised before being terminated.
According to the court’s opinion, the plaintiff provided hydrotherapy to patients in a heated swimming pool. Before being terminated, she had complained to her employer about the temperature of and amount of chlorine in the pool. She also complained “about the fact that URS required her to obtain a supervisor’s approval in order to suspend or discontinue hydrotherapy regimen for patients.” She ultimately was fired for placing “a patient with cerebral palsy in a supine position in the pool despite her knowledge that the patient was afraid of being placed in such a position” in violation of a “policy which prohibited staff from using “idiosyncratic aversives that are frightening to the consumer.’”
In her claim, the plaintiff alleged that the employer violated Ohio Revised Code § 1785.03, which provides in pertinent part that “[n]o professional association formed for the purpose of providing a combination of the professional services *** of *** physical therapists authorized under sections 4755.40 to 4755.56 of the Revised Code ***shall control the professional clinical judgment exercised within accepted and prevailing standards of practice of a licensed *** physical therapist *** rendering care, treatment, or professional advice to an individual patient.” As mentioned, the court rejected this claim because the non-profit employer was not subject to R.C. 1785.02 and no similar statute applied to non-profit organizations. Further, the court likewise rejected the plaintiff’s claim that the employer’s attempt to supervise her violated Ohio Administrative Code. §4755-27-02, which precluded licensed physical therapists from delegating their professional duties and responsibilities. Rather, the court noted that there is no statutory or administrative prohibition on all supervision of physical therapists.
Finally, the court followed prior interpretations of Ohio Revised Code § 4113.52, which prohibits an employer from taking disciplinary or retaliatory action against an employee for reporting criminal violations of certain laws. Because none of the complaints made by the plaintiff about the pool’s temperature or chlorine level involved criminal actions, none of those complaints were protected by the whistleblower statute.
Insomniacs may read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/2/2008/2008-ohio-6231.pdf.
According to the court’s opinion, the plaintiff provided hydrotherapy to patients in a heated swimming pool. Before being terminated, she had complained to her employer about the temperature of and amount of chlorine in the pool. She also complained “about the fact that URS required her to obtain a supervisor’s approval in order to suspend or discontinue hydrotherapy regimen for patients.” She ultimately was fired for placing “a patient with cerebral palsy in a supine position in the pool despite her knowledge that the patient was afraid of being placed in such a position” in violation of a “policy which prohibited staff from using “idiosyncratic aversives that are frightening to the consumer.’”
In her claim, the plaintiff alleged that the employer violated Ohio Revised Code § 1785.03, which provides in pertinent part that “[n]o professional association formed for the purpose of providing a combination of the professional services *** of *** physical therapists authorized under sections 4755.40 to 4755.56 of the Revised Code ***shall control the professional clinical judgment exercised within accepted and prevailing standards of practice of a licensed *** physical therapist *** rendering care, treatment, or professional advice to an individual patient.” As mentioned, the court rejected this claim because the non-profit employer was not subject to R.C. 1785.02 and no similar statute applied to non-profit organizations. Further, the court likewise rejected the plaintiff’s claim that the employer’s attempt to supervise her violated Ohio Administrative Code. §4755-27-02, which precluded licensed physical therapists from delegating their professional duties and responsibilities. Rather, the court noted that there is no statutory or administrative prohibition on all supervision of physical therapists.
Finally, the court followed prior interpretations of Ohio Revised Code § 4113.52, which prohibits an employer from taking disciplinary or retaliatory action against an employee for reporting criminal violations of certain laws. Because none of the complaints made by the plaintiff about the pool’s temperature or chlorine level involved criminal actions, none of those complaints were protected by the whistleblower statute.
Insomniacs may read the full decision at http://www.sconet.state.oh.us/rod/docs/pdf/2/2008/2008-ohio-6231.pdf.
Tuesday, December 16, 2008
Columbus City Council Expands Classes From Discrimination to Include Gender Identity or Expression, Age, Disability, and Military and Familial Status
Last night, the Columbus City Council – with very little advance public notice – expanded the protection of the City laws against discrimination in employment, housing and public accommodations to include gender identity or expression (i.e., transgendered individuals), age (i.e., over the age of 40), disability (same definition as state and federal law), military status (i.e., activity military duty), sex (male and female, including pregnancy discrimination) and familial status (i.e., having children under the age of 18 or being about to have a child). The new ordinance will become effective immediately upon being signed by Mayor Coleman. Among other things, violations of the Ordinance constitute a first-degree misdemeanor. Before voting, the City Council agenda indicated only that the Council would vote on amending “various sections of Chapter 2331 of the Columbus City Codes, 1959 in order to include additional protected classes of individuals from discriminatory practices that are not currently covered.”
The Council also voted to clarify the meaning of sex discrimination to include “male or female The terms ‘because of sex’ and ‘on the basis of sex’ include pregnancy, any illness arising out of and occurring during the course of a pregnancy, childbirth, or related medical conditions.” Gender identity or expression is defined to include “having or being perceived as having gender-related identity, appearance, expression, or behavior, whether or not that identity, appearance, expression, or behavior is different from that traditionally associated with the person's actual or perceived sex.”
The City Ordinance covers employers with 4 or more employees and already prohibited discrimination on the basis of race, sexual orientation, color, religion, national origin, and ancestry. The Ordinance, which covers some characteristics not protected under either state or federal law, applies only within the City limits, although it has been cited as grounds for public policy claims.
I can email a copy of the Ordinance upon request.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
The Council also voted to clarify the meaning of sex discrimination to include “male or female The terms ‘because of sex’ and ‘on the basis of sex’ include pregnancy, any illness arising out of and occurring during the course of a pregnancy, childbirth, or related medical conditions.” Gender identity or expression is defined to include “having or being perceived as having gender-related identity, appearance, expression, or behavior, whether or not that identity, appearance, expression, or behavior is different from that traditionally associated with the person's actual or perceived sex.”
The City Ordinance covers employers with 4 or more employees and already prohibited discrimination on the basis of race, sexual orientation, color, religion, national origin, and ancestry. The Ordinance, which covers some characteristics not protected under either state or federal law, applies only within the City limits, although it has been cited as grounds for public policy claims.
I can email a copy of the Ordinance upon request.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
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