SOCIAL NETWORKING: CAUSE FOR FIRING OR AN UNFAIR LABOR PRACTICE?
Recently, the National Labor Relations Board issued a complaint in a case involving an employee who was making “disparaging” or “discriminatory” comments about the company, the employee’s superiors, or co-workers. It is the first case in which the NLRB has addressed this issue.
The company, American Medical Response, had a electronic communication/social media policy that barred employees from depicting the company “in any way” on Facebook or other social media sites. The employee had been disciplined and subsequently made disparaging comments about her supervisor on Facebook. For example, she said “love how the company allows a 17 to become a supervisor” (17 is the company’s internal reference number for a psychiatric patient).
The acting General Counsel for the Board said that whether it takes place on Facebook or at the water cooler, employees have the right to talk jointly about working conditions and, in this case, about their supervisor. Whether the employee’s comments are “protected concerted activity” under the National Labor Relations Act may depend upon whether or not the employee was conversing with other American Medical Response employees on Facebook or whether she was merely sounding off to a broader audience.
We will follow this case closely (a hearing is set for January 25, 2011) and let you know how it turns out. In the meantime, however, employers should be cautious and consider reviewing their electronic communication/social networking policies to determine whether the policy potentially infringes upon employees’ rights to discuss wages, working conditions, and organizing for collective bargaining.
STATES - INCLUDING PENNSYLVANIA - INACT NEW LAWS TO PUNISH INTENTIONAL MISCLASSIFICATION OF WORKERS
Many states - including Pennsylvania - have begun enacting laws to specifically punish employers who intentionally misclassify employees as independent contractors. Pennsylvania’s law, like other states,’ focuses on the construction industry because the practice has been prevalent for years. The new statutes include criminal punishment of a third degree felony and fines ($1,000 for first violation up to $2,500 for each additional violation).
In addition to giving contractors who engage in such practices an unfair advantage when bidding work (because of the lower employment costs), intentional misclassification of employees allows employers to avoid paying workers’ compensation premiums, payroll and unemployment compensation taxes.
Opponents of the legislation argue that all of the practices outlined in the statute are already illegal and could be punished by simply enforcing those laws. These opponents also argue that the statute will just create another hurdle for small business owners to succeed - - even those who are trying to comply with state laws and regulations.
An example of the test for independent contractors is set forth in New York’s recently enacted Construction Industry Fair Play Act. “Any person who performs work for a contractor shall be classified as an employee unless the person: (1) is a separate business entity (as defined below), or (2) meets the following criteria:
A person (including a sole proprietorship, partnership, corporation or other entity) will be considered a separate business entity if all of the following criteria are met:
Employers are advised to err on the side of caution if they are trying to determine whether a person providing services is an employee or an independent contractor. Employers with questions should consider doing a self-audit with the assistance of counsel or a consultant.
BEFORE YOU DEDUCT FROM AN EMPLOYEE’S PAYCHECK, YOU MUST ENSURE THAT YOUR DEDUCTION WILL COMPLY WITH THE WAGE PAYMENT LAW
Recently, the New York Department of Labor (“NY DOL”) issued an opinion letter concerning whether an employer was permitted to deduct sums from an employee’s future wages to reimburse the employer for a significant overpayment in wages to that employee where the employee agreed to such a deduction. Focusing on the uneven bargaining power between an employee and an employer, the NY DOL held that such deductions were not permitted despite the employee’s consent. Therefore, the employer’s only recourse to recover the overpayment was to institute an action against the employee.
While the NY Labor Law is not identical to the Pennsylvania Wage Payment and Collection Law (“WPCL”), the case is a reminder that before any deductions are made from an employee’s paycheck, the employer must consult the WPCL itself and, in certain instances seek permission from the Pennsylvania Department of Labor and Industry (“PA DOL”).
The WPCL limits the deductions an employer may make from an employee’s wages to specifically enumerated deductions, many of which require the prior written authorization from the employee. Only the following deductions for the convenience of the employee may be made under the WPCL:
In addition to these deductions, the WPCL does allow for “such other deductions” but only when the employer has obtained the employee’s written consent, as well as an opinion from the PA DOL that the deduction is “proper and in conformity with the intent and purpose” of the WPCL.
The PA DOL, as a general rule, is very reluctant, to allow an employer to make a deduction that has not been specifically permitted by the statute. Among other things, an employer’s ability to do this is significantly limited by the fact that no deduction may be made that is not for the “convenience of the employee.” Again, it is anything but certain as to what type of deduction the PA DOL would consider to be for the convenience of the employee and not the employer. Also, a “blanket” authorization at the time of hire to cover future deductions is not sufficient. Finally, it is important to note that, under no circumstances would any deduction - even those specifically listed in the statute - be permissible if, when making it, the employee’s pay would fall below the current minimum wage of $7.25/hour.
In sum, the Pennsylvania legislature specifically enumerated the instances when it is permissible for an employer to deduct amounts from an employee’s future earnings. If an employer has any doubt as to whether or not a deduction falls within those instances, the employer is encouraged to contact the PA DOL for guidance. When an employer wishes to deduct amounts for some other reason, the employer is in fact required by the regulations to contact the PA DOL for approval. To do otherwise would be to expose the employer to a potential claim under the WPCL.
THIRD CIRCUIT HOLDS FAIR PAY ACT OF 2009 NOT APPLICABLE TO DISCRIMINATORY FAILURE TO PROMOTE CLAIMS
On January 29, 2009, President Obama signed into law the Lilly Ledbetter Fair Pay Act (“FPA”). The purpose of the FPA was to reverse the effects of the Supreme Court’s decision in the Ledbetter v. Goodyear Tire case, which limited the time period covered by a wage discrimination claim. The FPA mandates that every paycheck an employee receives following an allegedly discriminatory wage decision restarts the clock for that employee filing a timely charge of discrimination. Thus, under the FPA, as long as an employee files a charge of discrimination within 300 days (or 180 days if applicable) of receiving a paycheck which they claim reflects wage discrimination, the employer can also be liable for damages prior to the 300 day period.
In October of 2010, the Third Circuit, in the case Noel v. The Boeing Company, was asked to interpret the appropriate scope of the FPA and specifically, whether it should be applied to failure to promote claims. The plaintiff in Noel was a black Haitian national who had been employed with Boeing since 1990 in Ridley Park, Pennsylvania as a sheet metal assembler. Under the collective bargaining agreement which governed Noel’s employment, employees could be assigned work at more lucrative offsite locations on the basis of skill and ability, as well as seniority. In November 2002, Noel was assigned to an offsite location which resulted in his promotion to a labor grade 8, an increased per diem and salary increase. Several months later, Noel learned of the promotion of two white employees from labor grade 8 to labor grade 11 who were assigned to the same offsite location. Although Noel complained that those promotions were discriminatory to a union representative and a Boeing labor relations representative in September of 2003, he did not file a formal complaint alleging Title VII violations with the EEOC until on March 25, 2005.
Based on the fact that Noel failed to file a charge of discrimination within 300 days of the promotions at issue, Boeing claimed Noel’s failure to promote claim was untimely. In response, Noel argued that the FPA was applicable to his claims, and that each paycheck he received after Boeing failed to promote him started the clock for filing his claims anew. In a well-reasoned opinion, the Noel court rejected this argument and held that a failure to promote claim was not the sort of discrimination-in-compensation which the FPA was intended to address. Referring to “a plain and natural reading” of the FPA, the Noel court explained the purpose of the FPA was to remedy wage discrimination cases wherein similarly situated employees are being paid disparately, and if there was an intention to extend the FPA to other discrete employment actions, the statute “would have done so explicitly.” Finally, the Noel court cited Justice Ginsburg’s dissent in Ledbetter, stating, “A worker knows immediately if she is denied a promotion….When an employer makes a decision of such open and definitive character, an employee can immediately seek out an explanation and evaluate it for pretext. Compensation disparities, in contrast, are often hidden from sight.”
For employers, the Noel decision provides necessary guidance on the intended scope of the FPA and is protection against untimely claims from employees alleging discriminatory failure to promote.