Professional Liability Matters

Would you pay attention if we told you that Stefani Germanotta allegedly failed to pay her assistant over $375,000 in overtime pay? What if we told you Stefani Germanotta usually goes by “Lada Gaga”? Reportedly, the uber-famous singer reached a settlement in the 2011 FLSA lawsuit filed by her former personal assistant. The lawsuit serves as a reminder to employers of all sizes that unless their employees meet the requirements of the administrative exemption test, they must be paid overtime under the Fair Labor Standards Act.

While most countries allow employers to dismiss employees only for cause, employment relationships are presumed to be “at-will” in all U.S. states except Montana. As a result, most employers are well aware that employment relationships in the States may be terminated at any time, for any legal reason. But, the at-will presumption is a default rule that can me modified by contract whereby the employee may hold a reasonable expectation of continued employment. The modification of employment terms by way of contract was recently put to the test in New York. Victory for the employer.

Football season kicks off Thursday, September 5. As a result, millions of otherwise well-respected and seemingly professional Americans turn their attention to a grown-up version of make believe; a/k/a fantasy sports. Over 25 million Americans now belong to at least one fantasy football league and fantasy sports represent a multibillion dollar industry. Surveys suggest that many of those fantasy football participants access their league at the workplace, on equipment provided by employers. Most employers are cognizant of the importance of maintaining up-to-date computer use policies, social media protocols and other important workplace regulations, yet they inexplicably miss regulating participation in fantasy sports.

The workplace is often incredibly uncomfortable following an employee’s claim of work-related discrimination. The employer must balance its goal of productivity and profit while maintaining employee morale and equality on the job. At times, an employer facing a charge of discrimination may feel hamstrung by the looming charge and may permit employee conduct that was otherwise sanctionable out of fear of what may be perceived as retaliation against the employee for filing a charge. But, as the recent decision out of the Seventh Circuit proves, a charge of discrimination does not provide the employee with free rein to violate work-place protocol.

Don’t say we didn’t warn you. Last month we discussed the first suit filed by unpaid interns against their “employers” under the Fair Labor Standards Act. Channeling our inner Miss Cleo, we suggested at the time that the decision in Glatt v. Fox Searchlight Pictures, Inc., would have far-ranging implications on the EPL community. Sure enough, the floodgates have opened for unpaid interns seeking repayment under the FLSA.

Often, it’s not the crime but the cover-up that will do you in. In some ways, that sentiment is applicable to retaliation claims for alleged discrimination in the workplace. Or at least it was, until the Supreme Court’s recent decision in University of Texas Southwestern Medical Center v. Nassar. Previously, an employer facing a discrimination suit was susceptible to a retaliation theory despite establishing legitimate reasons for the alleged discriminatory conduct (usually terminating or demoting the employee). Specifically, so long as the plaintiff could show that the desire to retaliate for the employee’s pursuit of a charge of discrimination was at least a “motivating factor” behind any adverse employment action, the employer could be held liable. Thus, the potential existed for an entirely well-intentioned employer to be held liable under this standard. Nassar addressed this potential and changed the rules.

With summer break in effect, many students are utilizing the time off from school to participate in internships. Internships provide students with an opportunity to gain work experience in a particular field and, arguably, make them more marketable upon graduation. However, these intangible benefits may not excuse an employer from failing to pay interns under state and federal labor laws.

On Thursday, June 13, 2013, a proposed class action was filed on behalf of all former and current employees of Chef Gordon Ramsey’s Los Angeles restaurant “The Fat Cow.” The class action is led by a former server, barista, and two hostesses who are taking their beef to California state court against the celebrity chef’s restaurant. The class action alleges that the restaurant’s management took tips from former employees, and violated a series of other wage-and-hour labor codes. The Fat Cow opened its doors on October 1st, 2012, and is already catching steam over improper managerial practices.