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Minneapolis Office of Wessels Sherman is Piling Up Victories for Our Clients in 2016

Minneapolis Office of Wessels Sherman is Piling Up Victories for Our Clients in 2016

By James B. Sherman of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Other on Friday, September 30, 2016.

Believe it or not, we here at Wessels Sherman are reluctant to toot our own horn the way others in our profession are known to do. However, a recent spate of victories by our Minneapolis office on behalf of some very happy clients – in arbitration, in court, and before federal and state agencies in Minnesota and Wisconsin – seems like a good excuse to brag a bit. Besides, it is impossible to keep the many kudos I’ve been getting lately from so many clients from going to my head just a little, such that I feel compelled to share with our readers a few of the recent wins our Minneapolis office has achieved with our clients.

· Prevailed in arbitration regarding a grievance over prescription drug coverage under union contract language negotiated in the wake of the Affordable Care Act (Obama Care).

· Secured the Equal Employment Opportunity Commission’s (EEOC) dismissal of race/national origin discrimination claims.

· Obtained dismissal of two separate Minnesota Department of Human Rights (MDHR) age discrimination claims against the same employer, and when one of the cases was appealed it was affirmed by the Commissioner.

· Had previous Wisconsin Equal Rights Division (ERD) and LIRC decisions dismissing age discrimination claims, affirmed on appeal for judicial review before the La Crosse County Circuit Court.

· Won dismissal of disability discrimination claims by the EEOC, following a lengthy investigation.

Note that I say above that these wins were achieved “with,” and not “for” our clients. I say this very consciously because prevailing in court, in arbitration, or before federal and state administrative agencies such as the EEOC, MDHR, or ERD takes a team effort where we as lawyers spearhead the defense and legal strategies, but always with solid facts and evidence provided by our clients. It is truly an honor to work with great clients to prove that they’ve done nothing wrong and to win; it is why we love doing what we do!

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Wage and Hour

DOL Remains in the Spotlight, Settling Wage and Hour Claims Brought by Its Own Employees and Fighting Opposition to its Controversial New Overtime Rule

DOL Remains in the Spotlight, Settling Wage and Hour Claims Brought by Its Own Employees and Fighting Opposition to its Controversial New Overtime Rule

By James B. Sherman of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Wage and Hour on Friday, September 30, 2016.

September 2016

The Department of Labor recently paid $7 million to settle claims that it failed to pay DOL employees overtime for time they were “suffered or permitted to work,” dating back to 2006. The DOL is the government agency that enforces the FLSA’s requirements that employers pay minimum wage and overtime based on “hours worked.” Many private employers have been the target of stepped up efforts by the DOL in the form of audits and lawsuits in recent years. If misery loves company, however, the DOL has been accused of doing exactly the same thing that it regularly accuses employers of doing. The size of the settlement is no different than what many employers in the private sector have had to pay (and more) to resolve these sorts of claims, which typically are brought as class actions.

The settlement comes shortly before the DOL’s new rule on minimum salaries for white collar overtime exemptions is scheduled to take effect, on December 1, 2016. There was a considerable uptick in wage/hour lawsuits the last time the overtime rules were changed, and many are anticipating a similar surge in the wake of this new rule. Employees who are reclassified as non-exempt under this rule may be used to responding to emails or performing other work outside of regular hours and, as the DOL found out, allowing employees to work off the clock can be a costly mistake.

Speaking of the new DOL Overtime Regulations, they are being challenged in court as well as in the U.S. Congress. Twenty-one states have joined together as plaintiffs in a federal lawsuit in an attempt to block the rule. Interestingly, the lawsuit was brought in the U.S. District Court in Texas, “Sherman Division.” In addition to this lawsuit, the U.S. House of Representatives just passed legislation to postpone the effective date of the rule by 6 months. However, President Obama has promised to veto the bill which does not likely have enough support to override his veto. We will be paying close attention to these developments; however, employers are well advised to continue to plan on implementing any changes necessitated by the new rule, unless and until it is blocked in court or by the legislature.

Related Posts: Get Ready! Some Chicago Employers Must Soon Predict Work Schedules Under City of Chicago Ordinance!, Chicago Fair Workweek Ordinance, Summer Interns Still an Option?, DOL Rolls Out Proposed Overtime Revisions

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Non-Compete

Provisions of Non-Compete Law Apply to No-Solicitation of Employees Restraints

Provisions of Non-Compete Law Apply to No-Solicitation of Employees Restraints

By Alan E. Seneczko of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Non-Compete on Tuesday, September 27, 2016.

It is common, if not standard, for most non-compete agreements to contain a clause that prohibits the covered employee from soliciting current employees to terminate their employment in order to accept employment with a competitor. In essence, it prohibits the departing employee from raiding his/her former employer’s valued employees. Until recently, the courts have never determined whether such constraints are subject to the requirements of Wis. Stat. § 103.465, which governs the enforceability of non-compete agreements. It now has, and they are.

In The Manitowoc Company v. John Lanning, 2015AP1530, decided on August 17, 2016, the Wisconsin Court of Appeals found that a non-solicitation of employees (NSE) clause is a restrictive covenant subject to and enforceable under Section 103.465. The disputed clause, contained in a confidentiality agreement signed by an executive, prohibited him from soliciting, inducing or encouraging any employees to terminate their employment with the company or to accept employment with a competitor, supplier or customer. Manitowoc claimed that after leaving the company to work for a direct competitor, the executive worked with his new employer to woo several key Manitowoc employees to leave their employment and come work for it. Manitowoc contended that the NSE was not subject to the requirements of Section 103.465, but if it was, it was reasonable and enforceable. The court disagreed.

Section 103.465 provides that non-compete agreements are lawful and enforceable “only if the restrictions imposed are reasonably necessary for the protection of the employer.” Otherwise, they constitute an illegal restraint of trade. In order to be enforceable, the restrictive covenant must be necessary for the protection of the employer; provide reasonable time and territorial limits; not be harsh or oppressive to the employee; and, not be contrary to public policy.

The court found that the NSE was a restraint of trade subject to Section 103.465 because it limited competition in the market for employees, which included recruiting employees from competitors. It then found that the prohibition violated Section 103.465 because it was overbroad, and therefore unenforceable. The NSE restricted the solicitation of “any employee,” which encompassed both high-level executives and entry level laborers, in any department throughout the company. It also covered a wide swath of potential employers – “competitors, customers, and suppliers,” many with no competitive connection to the company – such as Starbucks, which was a customer. Given the sweeping scope of the restriction, the company could not prove why it was necessary to restrict the solicitation of employees from working for businesses that did not compete, or in positions that posed no competitive risk.

Drafting an enforceable non-compete agreement is a very tricky business, and the Manitowoc Company decision is just another example why. Non-compete agreements and their various components (confidentiality, competitive employment, no-solicitation) must be narrowly drafted to protect a legitimate business interest. If you have any questions about the court’s decision or a non-compete agreement, contact WS Attorney Alan E. Seneczko at (262) 560-9696, or alseneczko@wesselssherman.com.

Related Posts: Seneczko Wins Default as Discovery Sanction in Duty of Loyalty Claim, Illinois Workplace Transparency Act, Illinois Employers Should Not Go Overboard With Non-Compete Agreements!, Twelve Commonly Asked Questions About Non-Compete Agreements In Illinois

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Independent Contractor

More Aggressive Action By USDOL Against Classifying Workers As Independent Contractors

More Aggressive Action By USDOL Against Classifying Workers As Independent Contractors

By Nancy E. Joerg of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Independent Contractor on Friday, September 23, 2016.

NEW U.S. DOL WEBPAGE ABOUT MISCLASSIFICATION MYTHS: Government agencies such as the U.S. Department of Labor (“U.S. DOL”) continue to try to reign in companies that use independent contractors (and make it more high-risk for these companies to do so). In this spirit, the U.S. DOL recently established a controversial new page on its website called “Myths about Misclassification.”

The obvious purpose of the U.S. DOL’s webpage about Misclassification Myths is to educate (and scare!) already nervous companies into hurriedly reclassifying their workers as employees rather than as independent contractors. A few examples of the myths listed are as follows:

  • I received a 1099 tax form from my employer, and this makes me an independent contractor.
  • I am an independent contractor because I signed an independent contractor agreement.
  • I telework or work off-site, so I am an independent contractor.

If readers want to see the U.S. DOL’s full listing of myths and the U.S. DOL’s comments on the myths, the website address is:

https://www.dol.gov/whd/workers/Misclassification/myths.htm

TWO MORE STATE UNEMPLOYMENT INSURANCE AGENCIES JOIN FORCES WITH U.S. DOL: Other recent action by the U.S. DOL is the signing of a Memorandum of Understanding between the U.S. DOL and two more state unemployment insurance agencies (Pennsylvania and North Carolina) bringing the total now to 33 states who have joined forces with the U.S. DOL to share information and assist in enforcement efforts to identify and reduce independent contractor misclassification.

David Weil, the Wage and Hour Administrator for the U.S. DOL justified these aggressive actions by the U.S. DOL by saying his goal is “more workers receiving a fair day’s pay for a fair day’s work.”

Any companies using independent contractors (or anticipating the use of independent contractors) should contact Attorney Nancy Joerg to consult, to find strategies and practical solutions to reducing the company’s risk in using independent contractors, and to evaluate or create independent contractor agreements. Nancy Joerg can be reached at Wessels Sherman’s St. Charles, Illinois office: (630) 377-1554 or email her at najoerg@wesselssherman.com.

Related Posts: Yes, You Can Win Before an IDES Hearing Officer on the Issue of Independent Contractor Status!!, IRS Form SS-8 Continues To Upset And Confuse Employers Across The U.S.!, Psychological Counselors In Pennsylvania Found To Be Independent Contractors, Yes, There are Certain Categories of Workers Who Are Independent Contractors By Law Under the Illinois Unemployment Insurance Act

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Illinois Department of Employment Security (IDES)

Illinois Supreme Court Finds that IDES was Mistaken in Denying Unemployment Benefits

Illinois Supreme Court Finds that IDES was Mistaken in Denying Unemployment Benefits

By Nancy E. Joerg of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Illinois Department of Employment Security (IDES) on Thursday, September 8, 2016.

In this case, American Airlines looks like a harsh and unreasonable employer. The Claimant was an American Airlines employee who was fired by American Airlines for merely helping a passenger obtain a seating upgrade and also giving the passenger some champagne for the flight.

REASON AMERICAN AIRLINES WAS UPSET: American Airlines decided that the Claimant violated company rules and was guilty of “thet or pilferage of company property” by upgrading the passenger and requesting champagne for the passenger without proper authorization. The employee’s actions allegedly cost the airline $7,100.

IDES HEARING DECISION: The Illinois Department of Employment Security (IDES) agreed (surprisingly!) with American Airlines and found that this employee was guilty of misconduct (and therefore ineligible for unemployment insurance benefits) for violating reasonable and known company rules.

RULING OF THE COOK COUNTY JUDGE: The Claimant appealed the IDES decision to Cook County Circuit Court. The Circuit Court Judge found that the IDES had been wrong in denying unemployment benefits and ruled that the Claimant “could not have known that her requests for special treatment for a passenger were forbidden.”

RULING OF THE APPELLATE COURT: The IDES then appealed the Circuit Court decision to the Illinois First District Appellate Court. The Appellate Court reversed the lower court’s decision, and agreed with the IDES and American Airlines that the Claimant’s conduct was misconduct under the Illinois Unemployment Insurance Act.

REASONING OF THE ILLINOIS SUPREME COURT: The Claimant then appealed to the Illinois Supreme Court.

The Illinois Supreme Court was unanimous in supporting the legal position of the Claimant. The Illinois Supreme Court reasoned that American Airlines couldn’t fire a worker and seek to deny the worker’s unemployment insurance benefits unless the worker had broken specific and clearly written rules defining specific instances of employee misconduct.

The Illinois Supreme Court found that the Claimant did nothing illegal or obviously wrong because American Airlines did not have clear, written policies governing how to give passengers upgrades.

The justices ruled that “In the absence of a company rule prohibiting her conduct, the Claimant could not reasonably have predicted that she would be fired as a result.”

Therefore, American Airlines ultimately lost its legal battle in trying to prove that the Claimant was fired for misconduct as defined by the Illinois Unemployment Insurance Act.

PRACTICE TIP: When an employer fires an employee and hopes to win in a misconduct battle before the IDES, the employer has a far greater chance of winning if the employer has a clear and detailed written rule or policy providing guidance to the employee about what is acceptable conduct in the workplace. When a Claimant deliberately and willfully violates a reasonable and known policy, the employer’s chances of winning go up dramatically.

For assistance with protesting claims for unemployment insurance, contact Attorney Nancy E. Joerg who can be reached at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com. It is always good to confer with an attorney before a termination so that we can increase the employer’s chances of winning before the IDES.

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Arbitration

Class Action Waiver Clauses in Arbitration Agreements Face Further Scrutiny

Class Action Waiver Clauses in Arbitration Agreements Face Further Scrutiny

By James B. Sherman of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Arbitration on Friday, September 30, 2016.

Arbitration agreements are a common tool many employers use as an alternative to going to court to resolve disputes with their employees. Arbitration has the potential to be a faster, cheaper, and more private way to resolve disputes, with more finality. One of the biggest advantages many employers see in arbitration is the ability to resolve disputes individually rather than as part of a class action. However, the NLRB has determined that, in its opinion, these waivers violate employees’ right under federal labor law to engage in “concerted activities” for their “mutual aid or protection.” This has caused uncertainty as to the legality of such class action waivers in arbitration agreements in the employment arena.

The NLRB first took issue with arbitration clauses that state that any claims against the employer must be brought through individual arbitration, rather than group arbitration or class action lawsuits in court, in its 2012 D.R. Horton decision. Until this year, courts generally disagreed with the NLRB’s interpretation on this issue. However, that did not stop the NLRB from continuing to invalidate these class action waivers in arbitration agreements. Then this year, the Seventh Circuit Court of Appeals, which covers Illinois, Wisconsin, etc., agreed with the NLRB, created a split among the federal courts of appeals. Now, a second court of appeals has agreed with the Seventh Circuit, with the others to have decided the issue disagreeing (including the Eighth Circuit, which covers Minnesota, Iowa, etc.). With this sort of split among the courts of appeals, employers and the NLRB alike have petitioned the Supreme Court to resolve the issue once and for all.

Tags: Arbitration, NLRB, National Labor Relations Board

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Americans with Disabilities Act (ADA)

EEOC Sues Employer, Providing Reminder that Employers May Need to Provide Accommodations for Pregnant Employees

EEOC Sues Employer, Providing Reminder that Employers May Need to Provide Accommodations for Pregnant Employees

By James B. Sherman of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Americans with Disabilities Act (ADA) on Friday, September 30, 2016.

September 2016

Although pregnancy itself is not a disability under the Americans with Disabilities Act, pregnancy-related conditions that substantially limit an employee’s major life activities, even temporarily, may entitle the employee to accommodations for her condition. If a pregnant employee states that she cannot work, or cannot perform certain job functions, employers should engage in an interactive process with the employee to determine whether her condition can be reasonably accommodated within her current position, and if not, whether there are other vacant positions for which she is qualified, with or without reasonable accommodations. It is this last step that is the subject of a recent lawsuit brought by the EEOC. According to the EEOC’s Complaint, A bank manager was unable to work for the majority of her pregnancy, due to a medical condition. After allowing the employee several months of leave, her employer informed her that if she was not released to return to work, she would be replaced, but she was free to apply to other open positions. To assist her, she was given access to third-party redeployment services. However, despite applying for multiple open positions for which she met the minimum qualifications, both before and after she was eventually terminated, she was not placed into any of these positions. The EEOC claimed that this amounted to illegal discrimination on the basis of her pregnancy, and the failure to accommodate the same.

Further, under state laws (such as Minnesota’s Women’s Economic Security Act), employees may be entitled to certain accommodations even without showing any limitations.  

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Other

Job Opening – Associate Attorney – Minneapolis Office

Job Opening – Associate Attorney – Minneapolis Office

By James B. Sherman of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Other on Friday, September 9, 2016.

Regional Management-side Labor and Employment Law Firm seeks an Associate Attorney with a minimum of 2 years of increasingly responsible experience, for its Minneapolis office. Candidates should have excellent interpersonal, research and writing skills, a strong academic background and ability to work as part of a team. Experience in labor law and/or complex employment litigation a plus. Send resumes to jekier@wesselssherman.com.

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Union Matters

End of Summer Labor Law Checklist

End of Summer Labor Law Checklist

By Richard H. Wessels of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Union Matters on Wednesday, September 7, 2016.

1. Defunct Labor Contract? Construction industry employers are particularly vulnerable to this issue. It may not be defunct! A typical fact pattern is that years ago the contractor signed an assent agreement which typically has language binding them to successor agreements. Later, the company assumed that the contract was stale because they had employed no one in this trade for some time. But, still later big problems appeared when the union resurrected the contract and made various claims of violations. Contact us to get contracts like this properly cancelled.

2. Union Pension Fund Liability If you are contributing to a union pension fund, find out if that fund carries with it unfunded liability (often known as MPPAA liability) and how much it is. There is much more to this than just making the contractual pension fund contributions. Wessels Sherman can guide you through the simple process.

3. NLRB and Employee Handbooks The NLRB has been aggressively attacking innocent appearing handbook provisions and finding that these policies are unfair labor practices as potential interference with protected concerted activity. This is very tricky stuffy, and we can quickly do an analysis to clean up your handbook.

4. Wessels Sherman Telephone Consultation Program Our $75 monthly unlimited phone consultation program is the best HR tool out there. If you are an employer, you should be a part of it. Contact us to sign up.

Questions? Contact Attorney Richard Wessels at our St. Charles office at (630) 377-1554 or by email at riwessels@wesselssherman.com

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