Law @ Work Employer Newsletter - The Savvy Employer’s Guide to Legal Developments & Quirks that Affect the Workplace

by Flaster Greenberg PC
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Welcome to the third edition of the Law @ Work Employer Newsletter. For those of you who read the Law @ Work blog, you know that the blog offers an in-depth analysis of important legal developments. This Newsletter fills in the blanks, focusing on the overlooked stories that are entertaining and good fodder for learning. Think of it as an ever-evolving employment manual for employers because it is always better to learn from someone else’s mistakes. 

The DOL Goes To Church

The U.S. Court of Appeals for the Sixth Circuit sided with a church operating the Lord’s Buffet and against the Department of Labor (“DOL”) in a case testing the reach of the Fair Labor Standards Act (“FLSA”). In Acosta v. Cathedral Buffet, Inc., the appellate court reversed a trial court ruling and held that volunteers who staffed a church-operated buffet are not employees and the Grace Cathedral Church did not run afoul of the FLSA by failing to pay the volunteers minimum wage.  The DOL claimed the church and its televangelist pastor illegally used unpaid labor by staffing its buffet with volunteers from the congregation.  In this case, the church operated the buffet restaurant for a religious purpose: to allow church members to proselytize to patrons.  Its operations relied heavily on church volunteers who worked alongside paid employees performing the same work. While the work performed was comparable to that of an employee, the Sixth Circuit held the DOL overstepped the bounds of the FLSA by applying it to the volunteer workforce.  In part, the Court’s decision relied on a determination that the volunteers had no expectation of payment and were not economically reliant on the work of the church. 

Savvy employer takeaway: Employers with charitable missions and those who support charities must be careful to delineate work from volunteer activities to avoid claims that the volunteers should have been paid for their activities. 

Not-So Silent Partner May Have Individual Liability Under the FLSA

In Malee v. Anthony & Frank Ditomaso, Inc., the Court served a surprise to a shareholder of a corporation that owned a restaurant, who sought to be dismissed from a FLSA case brought by employees of the restaurant.  The shareholder alleged he did not participate in the business on a day-to-day basis and, therefore, was not an “employer” within the meaning of the FLSA.  The Court refused to dismiss the claims, finding that the shareholder’s attendance at staff meetings, and advice on operating the business created a triable issue of fact as to whether the shareholder was, in fact, an employer within the meaning of the FLSA. 

Savvy employer takeaways: The FLSA and overlapping state wage and hour laws often impose individual liability on officers, owners, and others involved in decisions to deprive employees of wages owed.

Fast Food Chain Turns $626 Loss Into Nearly $8 Million

When Chipotle Mexican Grill Inc. fired store manager Jeanette Ortiz, accusing her of stealing $626 in cash from the safe, it could never have expected its minimal theft loss to balloon into a nearly $8 million jury verdict against it for wrongful termination of Ortiz. Even worse, an assessment of potential punitive damages against Chipotle in that case is still pending.  Nevertheless, according to an article in the Fresno Bee, jurors awarded Ortiz nearly $8 million after finding that Chipotle had wrongfully terminated her.  According to Ortiz, she was innocent of theft and was set up in retaliation for filing a claim for workers’ compensation benefits due to a work-related wrist injury.  The article reported Chipotle had video of the theft but refused to show it to Ortiz and eventually taped over the evidence.  Apparently, Chipotle failed to preserve text messages and other written notes about the firing as well. Although the article does not elaborate, it is quite likely the jury reached an adverse inference that the missing evidence would have been helpful to Ortiz in proving her case.

Savvy employer takeaways: While it is impossible to know for sure how much weight the missing evidence had on the jury’s decision, employers are wise to preserve all evidence relating to employee misconduct to avoid even an appearance of wrongdoing. As in politics, although the original offense is bad enough, the ensuing cover-up is always worse.

Employment Law Myth Busters – The “Unenforceable” Non-Compete

Non-compete and other restrictive covenants are commonly used by employers in many industries to protect their trade secrets and legitimate business interests.  While employees may be willing to sign them when they take a new position, they are often frustrated by them when it comes time to look for a new job. Some employees take to Google to see if their agreement is enforceable.  What they find on Google often provides them with false confidence that their non-compete or other restrictive covenant is unenforceable, but relying on Google research in the complicated, fact-sensitive legal morass of non-compete agreements is risky business.  True, a Google search can turn up numerous court opinions that express the view that non-competes are viewed unfavorably by courts as anti-competitive restraints on trade and, as such, are narrowly construed and enforced only to the extent that they protect a legitimate business interest of an employer.  However, those cases may or may not be useful in deciding whether your restrictive covenant is likely to be enforced. First, the law governing non-competition agreements varies from state to state. Thus, an opinion by a court in California applying California law (which bars enforcement of restrictive covenants except under specific, narrow circumstances), for example, is of little help in assessing whether a court in New Jersey or Pennsylvania, where non-competes are routinely enforced, is likely to enforce a restrictive covenant under that state’s laws. Making the analysis even more complicated, courts decide whether to enforce restrictive covenants based upon a thorough review of the specific language used in the agreement; even slight variations in the language of the agreement can lead to vastly different results. In addition, because they are viewed as anti-competitive, a court will generally enforce one only if it is well drafted so that its restrictions narrowly target the business interests at issue and nothing more.  The finer points of enforcing restrictive covenants, such as non-competes, are too detailed to address here, but employees with employment agreements that contain restrictive covenants and businesses that are hiring employees subject to them should not rely on Google to assess their enforceability or their liability for a breach.

Savvy employer takeaways: Employers should have an experienced employment lawyer evaluate the enforceability of their employees’ post-employment restrictions and the enforceability of post-employment restrictions by which prospective employees may be bound.  Employers should also require candidates to disclose whether they are subject to any restrictive covenants before offering them employment.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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JD Supra Privacy Policy

Updated: May 25, 2018:

JD Supra is a legal publishing service that connects experts and their content with broader audiences of professionals, journalists and associations.

This Privacy Policy describes how JD Supra, LLC ("JD Supra" or "we," "us," or "our") collects, uses and shares personal data collected from visitors to our website (located at www.jdsupra.com) (our "Website") who view only publicly-available content as well as subscribers to our services (such as our email digests or author tools)(our "Services"). By using our Website and registering for one of our Services, you are agreeing to the terms of this Privacy Policy.

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Collection of Information

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Your interactions with our Website and Services: As is true of most websites, we gather certain information automatically. This information includes IP addresses, browser type, Internet service provider (ISP), referring/exit pages, operating system, date/time stamp and clickstream data. We use this information to analyze trends, to administer the Website and our Services, to improve the content and performance of our Website and Services, and to track users' movements around the site. We may also link this automatically-collected data to personal information, for example, to inform authors about who has read their articles. Some of this data is collected through information sent by your web browser. We also use cookies and other tracking technologies to collect this information. To learn more about cookies and other tracking technologies that JD Supra may use on our Website and Services please see our "Cookies Guide" page.

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We use the information and data we collect principally in order to provide our Website and Services. More specifically, we may use your personal information to:

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How We Protect Your Information

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Our Website and Services may contain links to other websites. The operators of such other websites may collect information about you, including through cookies or other technologies. If you are using our Website or Services and click a link to another site, you will leave our Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We are not responsible for the data collection and use practices of such other sites. This Policy applies solely to the information collected in connection with your use of our Website and Services and does not apply to any practices conducted offline or in connection with any other websites.

Information for EU and Swiss Residents

JD Supra's principal place of business is in the United States. By subscribing to our website, you expressly consent to your information being processed in the United States.

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You can make a request to exercise any of these rights by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

You can also manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard.

We will make all practical efforts to respect your wishes. There may be times, however, where we are not able to fulfill your request, for example, if applicable law prohibits our compliance. Please note that JD Supra does not use "automatic decision making" or "profiling" as those terms are defined in the GDPR.

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  • Onward Transfer to Third Parties: As noted in the "How We Share Your Data" Section above, JD Supra may share your information with third parties. When JD Supra discloses your personal information to third parties, we have ensured that such third parties have either certified under the EU-U.S. or Swiss Privacy Shield Framework and will process all personal data received from EU member states/Switzerland in reliance on the applicable Privacy Shield Framework or that they have been subjected to strict contractual provisions in their contract with us to guarantee an adequate level of data protection for your data.

California Privacy Rights

Pursuant to Section 1798.83 of the California Civil Code, our customers who are California residents have the right to request certain information regarding our disclosure of personal information to third parties for their direct marketing purposes.

You can make a request for this information by emailing us at privacy@jdsupra.com or by writing to us at:

Privacy Officer
JD Supra, LLC
10 Liberty Ship Way, Suite 300
Sausalito, California 94965

Some browsers have incorporated a Do Not Track (DNT) feature. These features, when turned on, send a signal that you prefer that the website you are visiting not collect and use data regarding your online searching and browsing activities. As there is not yet a common understanding on how to interpret the DNT signal, we currently do not respond to DNT signals on our site.

Access/Correct/Update/Delete Personal Information

For non-EU/Swiss residents, if you would like to know what personal information we have about you, you can send an e-mail to privacy@jdsupra.com. We will be in contact with you (by mail or otherwise) to verify your identity and provide you the information you request. We will respond within 30 days to your request for access to your personal information. In some cases, we may not be able to remove your personal information, in which case we will let you know if we are unable to do so and why. If you would like to correct or update your personal information, you can manage your profile and subscriptions through our Privacy Center under the "My Account" dashboard. If you would like to delete your account or remove your information from our Website and Services, send an e-mail to privacy@jdsupra.com.

Changes in Our Privacy Policy

We reserve the right to change this Privacy Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our Privacy Policy will become effective upon posting of the revised policy on the Website. By continuing to use our Website and Services following such changes, you will be deemed to have agreed to such changes.

Contacting JD Supra

If you have any questions about this Privacy Policy, the practices of this site, your dealings with our Website or Services, or if you would like to change any of the information you have provided to us, please contact us at: privacy@jdsupra.com.

JD Supra Cookie Guide

As with many websites, JD Supra's website (located at www.jdsupra.com) (our "Website") and our services (such as our email article digests)(our "Services") use a standard technology called a "cookie" and other similar technologies (such as, pixels and web beacons), which are small data files that are transferred to your computer when you use our Website and Services. These technologies automatically identify your browser whenever you interact with our Website and Services.

How We Use Cookies and Other Tracking Technologies

We use cookies and other tracking technologies to:

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There are different types of cookies and other technologies used our Website, notably:

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JD Supra Cookies. We place our own cookies on your computer to track certain information about you while you are using our Website and Services. For example, we place a session cookie on your computer each time you visit our Website. We use these cookies to allow you to log-in to your subscriber account. In addition, through these cookies we are able to collect information about how you use the Website, including what browser you may be using, your IP address, and the URL address you came from upon visiting our Website and the URL you next visit (even if those URLs are not on our Website). We also utilize email web beacons to monitor whether our emails are being delivered and read. We also use these tools to help deliver reader analytics to our authors to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

Analytics/Performance Cookies. JD Supra also uses the following analytic tools to help us analyze the performance of our Website and Services as well as how visitors use our Website and Services:

  • HubSpot - For more information about HubSpot cookies, please visit legal.hubspot.com/privacy-policy.
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Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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