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Union Matters

Northern Illinois Labor Unions

Northern Illinois Labor Unions

By Richard H. Wessels of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Union Matters on Thursday, January 31, 2019.

In the course of our labor practice over the past 34 years, we have become intimately familiar with the various Northern Illinois labor unions. We have dealt with all of them. Naturally, most of these local unions are congregated in the metro Chicago area. The six country area is one of the few remaining areas in the U.S. where unions have significant strength. As we have chronicled in our reports to you over the years, union strength in the private sector is waning dramatically. However, Northern Illinois remains somewhat of an exception and, although membership numbers are declining, labor organizations still have power, at least by comparison to other areas of the country. There is particular truth to this in the construction industry. Below is a short commentary on the most important Northern Illinois labor unions.

AFSCME Council 31: Until recently, AFSCME had no place whatsoever in a listing of Illinois private sector labor unions. They were totally a public sector union. By far their biggest membership base consists of employees at the State of Illinois where they have about 35,000 members. This number will likely diminish greatly after the historic US Supreme Court Janus decision. In the last 10 years or so AFSCME has been branching off into the private sector where they are going after not for profits. These private sector targets have been in the social services and healthcare areas.

Bakery Workers Local 1: Nearly all of the various locals around Northern Illinois, because of declining membership, have merged into BCTGM Local 1. They primarily represent commercial bakeries. Bankruptcies and mergers of some of the big players in the baking industry have diminished Local 1’s membership base.

Bricklayers District Council 1: As with so many unions, most of the local unions around metro Chicago have merged into the District Council entity. Membership is exclusively in the construction industry.

Central States Joint Board: This is a miscellaneous union primarily focusing on small manufacturing companies. For decades they were a fixture at the corner of Erie St. and Damon on the northwest side of Chicago. They moved to Hillside in 2014. There are many small locals under their umbrella primarily under the name of Novelty and Production Workers Union.

Chicago Regional Council of Carpenters: Carpenters are strictly a construction industry union, although one local remains autonomous (Carpenters Local 1027). This local represents workers in plant type settings such truss manufacturers, millwork companies, and window and door manufacturers. The construction job site locals have almost completely merged into the Chicago Regional Council.

IAM: Declining membership for IAM has mirrored the decline of manufacturing. The key remaining entity in northern Illinois is IAM District 8 located in Burr Ridge.

IBEW: There are two large IBEW locals in metro Chicago – IBEW Local 134 and IBEW Local 701. As has been the case historically, the bulk of membership comes from construction and maintenance electricians. They also represent workers at area racetracks.

IBT: To a degree, the Teamsters have gone against the trend of merging into one large entity. There have been mergers, but most of the traditional locals remain autonomous. Historically, the Chicago locals have a highly focused membership base in specific types of businesses and the suburban locals are general jurisdiction locals. Most important locals are as follows:

  • Local 700 – public sector.
  • Local 705 – local trucking.
  • Local 710 – over the road trucking.
  • Local 727 – downtown Chicago parking garage employees. With some of the mergers, they have also acquired manufacturing contracts under their umbrella. They also represent Chicago area funeral homes.
  • Local 731 – construction industry and waste hauling.
  • Local 743 – primarily warehouse employees. But they have been making inroads recently in non-traditional union jobs such as office workers and healthcare workers.
  • Local 781 – for years this has been downtown Chicago’s miscellaneous local, with workers in a broad range of businesses. And primary focus is on warehouses and airlines. In line with employment shifts, Local 781 has moved to the suburbs and is now located in Elmhurst.
  • Local 786 – this local has declining membership but stays with their historic base of lumberyards and building material companies.

The collar counties have four active locals, all regarded as unions of general jurisdiction.

  • Local 179 – Joliet
  • Local 301 – Waukegan
  • Local 330 – Elgin
  • Local 673 – West Chicago

Iron Workers: There are any number of small Iron Workers locals scattered around the Chicago area and these are primarily in the construction industry with some manufacturing plants.

Laborers District Council: The Laborers District Council has followed the same pattern as the Carpenters. The small locals have been swallowed up and almost the entire union now in the Chicago area is controlled by the District Council of Chicago and Vicinity. They are primarily in the construction industry.

Mechanics Local 701: Local 701 is a part of IAM, but operates in an autonomous manner. They remain a large local and have a big base in metro Chicago automobile dealerships representing the automobile mechanics. They also have a substantial membership base in the heavy equipment industry with field mechanics.

Operating Engineers Local 150: This is a huge and financially powerful local. The membership base is primarily heavy equipment operators. They cover a large geographic base across northern Illinois, including parts of Iowa and Indiana. Local 399 is not a part of Local 150 and is much smaller and represents building engineers.

Painters District Council 30: The Painters are involved almost exclusively in the construction industry. The largest is Painters District Council 30, with authority over a number of locals including glaziers’ locals.

Plumbers and Pipefitters: Plumbers and pipefitters are primarily in the construction industry. Historically, these local have been confusing because some locals are limited strictly to pipefitters, others plumbers, and others combined locals. The largest is Local 597, located in downtown Chicago. Local 130, on Chicago’s west side, also has a substantial construction industry base.

Roofers Local 11: The Chicago area has only one local union for the roofers’ trade. This is Local 11 and they have a large jurisdictional area covering northern Illinois and southern Wisconsin.

SEIU Local 1: SEIU Local 1 is the largest SEIU local in Illinois. A big part of their growth was a takeover of SEIU Local 25, which was placed into trusteeship. Their membership base is primarily building janitors and maintenance employees. Almost all of their contracts are area-wide agreements such as the large BOMA agreement.

Sheet Metal Workers Local 73: The primary sheet metal workers local in Chicago is Local 73. Local 73 is located in Hillside and is the product of a number of mergers, including what is left of the Chicago area’s manufacturers of kitchen appliances and other industries where sheet metal is used. As with most unions, their membership base continues to shrink.

Sprinkler Fitters: Actually, the Sprinkler Fitters are part of the Plumbers and Pipefitters but operate autonomously. The one Chicago area local is Local 281. There is a national local in Maryland which is known as the Road Sprinkler Fitters. Many Chicago area unionized contractors have national contracts with the Road Sprinkler Fitters and that is Local 669.

UE: The UE is a storied old union. They are one of the CIO unions ousted in the communist purge of the late 1940s. The UE continues to have a distinct leftist philosophy and they represent a dwindling manufacturing base in Chicagoland.

UFCW: There are two principal UFCW locals in metro Chicago. Local 881 represents primarily grocery stores and they trace their history to the independent Jewel Food Stores union. The numbers 8-8-1 represent the official charter date. This was August 1981. Local 1546 has its historical roots in the meat packing industry and today retains those meat cutter contracts in the grocery industry along with non-retail meat packing, food manufacturing, and food processing. They have been moving into representation of nursing home employees.

This is merely a general commentary. We have a much more detailed and highly confidential book on Northern Illinois labor unions. We would be glad to email it to any of you who are interested. Contact me at riwessels@wesselssherman.com.

Related Posts: Merry Christmas, and Happy New Year Employers, Life Raft For Multiemployer Pension Plans, Operating Engineers Local 150 Remains One of Northern Illinois Most Active Unions, No Recording Rules-NLRB Protected?

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Categories
Other

Illinois Health Care Violence Prevention Act

Illinois Health Care Violence Prevention Act

By Walter J. Liszka of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Other on Thursday, January 24, 2019.

Illinois is joining a growing number of States (e.g. California; Connecticut; Minnesota; New Jersey, and New York) in enacting specific legislation designated to address workplace violence in the Healthcare Industry. Effective January 1, 2019, the Health Care Violence Prevention Act (210 ILCS 160/1, et seq.) has become effective in the State of Illinois and mandates that hospitals and other healthcare providers and “custodial agencies” comply with very specific requirements aimed at protecting their workers from violence.

Healthcare providers must post a notice stating that verbal aggression will not be tolerated and that physical assaults must be reported to law enforcement. Healthcare providers will be required to implement a Workplace Violence-Prevention Program in compliance with Occupational Safety and Health Administration guidelines for preventing workplace violence for healthcare and social services workers. The program must include the four (4) classifications of workplace violence as set forth in the Act:

Type 1 Violence – Workplace violence committed by a person who has no legitimate business at the worksite.

Type 2 Violence – Workplace violence directed at employees by customers, clients, patients, students, inmates, visitors, or other individuals accompanying a patient.

Type 3 Violence – Workplace violence against an employee by a present or former employee, supervisor, or manager.

Type 4 Violence – Workplace violence committed by someone who does not work at the facility, but is known to have a personal relationship with an employee.

The program must also have a worksite analysis on identification of potential hazards and safety and health training for personnel.

In addition to imposing duties to prevent workplace violence, the legislation also creates obligations in the event that violence occurs. When a patient or a patient’s visitor causes the violence, the healthcare provider is required to offer immediate post-accident services, which may include acute treatment and access to psychological evaluation to any healthcare worker directly involved. Management cannot discourage a healthcare worker from contacting law enforcement or filing a police report in response to any workplace violence.

There is an obligation on the part of the healthcare worker who is contacting law enforcement to notify management within three (3) calendar days of the filing of such a report. There is also a specific reference in the legislation to the Illinois Whistleblowers Act, which expands whistleblower protection to employees who take efforts to implement or enforce compliance with the Healthcare Violence Prevention Act in their workplace.

The Act also requires that “custodial agencies” (Illinois Department of Corrections; Illinois State Police; Sherriff’s Office; Correctional Institution, etc.) must abide by heightened and designated procedures that apply when taking a person into custody who is to receive medical treatment when that person taken into custody poses a significant risk to others. These requirements shall establish “a curriculum for custodial escort and custody of a high risk person” (210 ILCS § 160/335) that must include handcuffing and/or shackling a person and other custodial considerations.

Obviously, this new legislation will create a number of obligations going forward and will be subject to “Court Interpretations” as fact situations develop. Stay tuned because this legislations and its implications may be costly!

Questions? Contact Attorney Walter Liszka in our Chicago office at (312) 629-9300 or by email at waliszka@wesselssherman.com

Related Posts: New Illinois Laws in the New Year, Illinois Changing Employment Landscape, Get Ready! All Owners of Hotels and Casinos in Illinois Must Soon Protect their Employees from Sexual Assault and Harassment with Panic Button Safety Devices!, So You Have A Whistleblower

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EEOC

EEOC Lawsuits Demonstrate An Aggressive Position On Employer Obligations To Reasonably Accommodate

EEOC Lawsuits Demonstrate An Aggressive Position On Employer Obligations To Reasonably Accommodate

By James B. Sherman of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in EEOC on Thursday, January 10, 2019.

Employers have a legal obligation to accommodate work-related conflicts posed by an employee’s or applicant’s disability or religious beliefs. This seems simple enough – be “reasonable.” Yet as many business professionals and lawyers know all too well, there is a great deal of room for differences of opinion as to what constitutes a “reasonable accommodation.” Considerable effort (and litigation) has gone into defining what is required under the Americans with Disabilities Act, as well as Title VII of the Civil Rights Act (for religion). For its part the EEOC has routinely pushed the envelope; it expects employers to go to great lengths to satisfy their obligation to reasonably accommodate workers. Recent cases dealing with accommodations in the form of service dogs, sign-language interpreters, extended leaves of absence and adjusted work schedules, are just some of the positions taken by the EEOC in litigation (with varying degrees of success). Here are some examples:

  1. EEOC v. CRST Expedited: The EEOC filed suit against CRST Expedited on behalf of an applicant for an over-the-road truck driving position. After being admitted to a driver training program with CRST the applicant disclosed that he suffered from anxiety and post-traumatic stress disorder (PTSD). He requested that he be allowed to have a trained service dog accompany him in his truck cab as an accommodation of his condition. The request was denied pursuant to CRST’s “no pet” policy and the EEOC sued on behalf of the applicant. The case is pending in federal court in Cedar Rapids, IA; however, Judge C.J. Williams already has denied the defendant’s motion to dismiss the lawsuit.
  2. EEOC v. Wal-Mart Stores: The EEOC sued on behalf of two deaf Wal-Mart employees, alleging violations of the ADA for the retailer’s refusal to provide them with a sign language interpreter during staff meetings. The case was filed in federal court in Washington D.C. Although the Court initially determined the EEOC’s complaint lacked sufficient factual allegations to raise a plausible claim for relief, it did so “without prejudice” to allow the EEOC to re-plead its complaint.
  3. EEOC v. North Memorial Health Hospital: The EEOC filed a lawsuit in federal district court in Minneapolis, alleging that North Memorial Hospital unlawfully rescinded a job offer and refused to hire an applicant opposed to working on the Sabbath, for religious reasons. The applicant’s religion – Seventh Day Adventism – proscribes working from sundown on Fridays through sundown on Saturday. Both the trial court and, on appeal, the Eighth Circuit Court of Appeals ruled that North Memorial was within its right to rescind the job offer, relying on the fact that work schedules for the position in question were governed by a collective bargaining agreement.
  4. Severson v. Heartland Woodcraft, Inc.: Severson sued Heartland Woodcraft under the ADA for its denial of his request for an extended leave of absence (LOA) after Severson remained medically unable to return to work following 12 weeks of FMLA leave for an injury. Milwaukee federal court Judge Lynn Adelman dismissed the case, holding that a LOA under these circumstances was not a “reasonable accommodation.” Although it was not a party in the lawsuit, the EEOC intervened in support of Severson on his appeal to the Seventh Circuit Court of Appeals, in Chicago. The EEOC attempted to persuade the court that an extended LOA should have been granted as a reasonable accommodation to allow Severson an opportunity to recover from his injury and return to work at a later date.

Happily for employers, the appellate court rejected the EEOC’s argument. The court instead held that a reasonable accommodation is expressly limited to those measures that will enable a disabled individual to work, not those allowing such individuals to be absent from working. Employers still should not assume that granting a LOA can never under any circumstances constitute a reasonable accommodation.

Questions? Contact Attorney James Sherman in our Minnesota office at (952) 746-1700 or by email at jasherman@wesselssherman.com

Related Posts: He Who Hesitates May be Lost, EEOC Collection Of Employer Pay Data On Target For September, EEOC Charges At 12-Year Low, Outsourcing Administration of Employee Leaves of Absence to a Third-Party Vendor Did Not Insulate Dollar General Store from Responsibility to Rehire Returning Service Member under USERRA

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Categories
Discrimination

It Is Dangerous For An Employer To Just Assume That Pregnant Employees Cannot Get The Job Done!

It Is Dangerous For An Employer To Just Assume That Pregnant Employees Cannot Get The Job Done!

By Nancy E. Joerg of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Discrimination on Tuesday, January 8, 2019.

Employers put their companies and themselves at great legal risk (unnecessarily!) when they assume that their pregnant employees cannot do their job just because they are pregnant.

Of course, pregnancy can affect or limit an employee’s ability to do her job in certain ways, but employers should be very careful that they do not make the blanket assumption that the pregnant employee cannot do her job.

Some employees do not reveal at the time they are interviewed for a new job that they are pregnant. Surprising to some employers, these job applicants have no legal responsibility to reveal their pregnancies before being hired. They can legally withhold that personal information.

U.S. SUPREME COURT CASE: There is an often cited U.S. Supreme Court case from 1991 (United Automobile Workers v. Johnson Controls Inc.) that involved a workplace policy barring women of childbearing age from taking jobs within Johnson Controls that exposed them to lead (lead can harm fetuses). The U.S. Supreme Court ruled that this Johnson Controls policy was both illegal and paternalistic. No one really doubted that Johnson Controls was simply trying to protect the women employees and fetuses from possible harm. Not caring about the employer’s good and protective motive, the U.S. Supreme Court found that the attitude of preventing pregnant employees from doing certain jobs is illegal and discriminatory, if the only reason to limit the employee is due to her pregnancy.

COMPLICATIONS FROM PREGNANCY ARE POTENTIAL DISABILITIES: Pregnancy is not a disability under the Americans with Disabilities Act (ADA), but employers should certainly evaluate complications from pregnancy as potential disabilities under the ADA. Employers should therefore engage in the “interactive process” (required by the ADA when an employee has pregnancy-related disabilities).

Of course, the employer does not need to grant all requests from employees with pregnancy-related complications. The employer just needs to consider them. The employer should attempt to meet all requests for reasonable accommodations put forward by the pregnant employee where such requests do not result in an “undue hardship on the Company” as defined by the ADA.

INTERACTIVE PROCESS: If a pregnant employee has a medical restriction, for example, and cannot do certain aspects of her job, the employer has a legal obligation to engage in the “interactive process” to determine what can be done to allow the pregnant employee to still do her job within the limits of the medical restrictions as set forth by her doctor. Maybe the employer can transfer the pregnant employee to another position where she can safely perform her duties. Perhaps a lighter workload or different hours can be of assistance in these circumstances. The employer does not have to agree to these accommodation requests-just carefully consider them.

CAREFULLY EVALUATE IMPACT OF AN ACCOMMODATION: Under the ADA, there is no bright line between reasonable and unreasonable accommodations and between undue hardships and minimal hardships on the company. So employers have to carefully evaluate the impact of an accommodation request upon the company before the employer grants or denies the accommodation. Certain states have additional “pregnancy reasonable accommodation policies.”

MANY STATES HAVE PREGNANCY ACCOMMODATION LAWS: For example, Illinois requires employers to provide reasonable accommodations to employees (and job applicants) for any medical or common condition related to pregnancy or childbirth. The Illinois law makes it unlawful to fail to hire or otherwise retaliate against an employee or applicant for requesting such accommodations. If an Illinois employer demonstrates the accommodation would impose an undue hardship on the “ordinary operation of the business of the employer,” the employer need not provide the requested accommodation. “Undue hardship” is an action that is “prohibitively expensive or disruptive” under the Illinois law.

In view of the growing number of states with pregnancy accommodation laws, it is a wise idea for employers to have a pregnancy accommodation policy included in their employee handbook. Sometimes, the state in question actually requires that the pregnancy accommodation policy be included in the employee handbook. Additionally, employers should be sure to train their supervisors so they know how to handle requests for reasonable accommodation from pregnant employees.

Supervisors should be frequently and adequately trained not to assume that pregnant employees cannot do their jobs as they did when they weren’t pregnant. This is an area where supervisors must be very aware of the legal rights of the pregnant employee.

Questions?: For assistance with evaluating a pregnancy related workplace issue or drafting a pregnancy accommodation policy, please contact Attorney Nancy Joerg at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.

Related Posts: “OK, Boomer!”, Seventh Circuit Decision-Use Of The “N-Word”, He Who Hesitates May be Lost, What Happens if a Current or Former Employee Files a Charge of Discrimination with the Illinois Department of Human Rights (IDHR)?

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Discrimination Harassment Illinois Department of Employment Security (IDES)

Legislative Update: Key Changes to the Illinois Human Rights Act New Employee Rights and New Requirements for Employers

Legislative Update: Key Changes to the Illinois Human Rights Act New Employee Rights and New Requirements for Employers

By Anthony J. Caruso Jr. of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Illinois Department of Employment Security (IDES) on Friday, January 25, 2019.

On June 8, 2018 and August 24, 2018 respectively, Governor Bruce Rauner signed into law a number of amendments to the Illinois Human Rights Act which in the State of Illinois regulates discrimination claims due to a protected category, disability or sexual harassment claims.

New Employee Rights

  • The time to file a charge before the Illinois Human Rights Department (IDHR) increased from 180 days to 300 days.
  • Employees have the right to opt out of the investigation process at the Illinois Department of Human Rights (IDHR) and sue in state court. The request for opt-out must be made within 60 days from notice by the IDHR and the IDHR has 10 business days to issue the notice of the right to sue.

New Employer Requirements

Employers must post the Illinois Department of Human Rights Sexual Harassment and Discrimination in the Workplace poster. Click here to download a copy of the poster.

Employers must also include the content of this notice in their employee handbook policies on sexual harassment and discrimination. This means that company sexual harassment and discrimination policies in employee handbooks must be amended to include information about reporting discrimination to the IDHR in filing a charge as well as information about the Sexual Harassment and Discrimination Help line number of 877-236-7703. Finally, employee handbooks must include a statement that employees may request a reasonable accommodation due to disability or pregnancy.

Questions? Need help re-working your employee handbooks to follow these new requirements? Contact attorney Tony Caruso in our St. Charles office at (630) 377-1554 or by e-mail at ancaruso@wesselssherman.com

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Categories
Arbitration

A NEW YEAR’S RESOLUTION TO AVOID EXTREMELY EXPENSIVE WAGE CLAIMS

A NEW YEAR’S RESOLUTION TO AVOID EXTREMELY EXPENSIVE WAGE CLAIMS

By Jennifer Adams Murphy of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Arbitration on Monday, January 14, 2019.

Audit compensation classifications and policies

√ Implement arbitration agreements

The New Year is a time for fresh starts – diets, exercise programs and wonderful sounding self-improvement programs. This is great – but in your quest for improvement, don’t forget about your business! While resolutions to audit employee classifications and compensation policies and to adopt an arbitration policy may not carry the exciting vision of a new you, they may be the most significant (and long-lasting) of your resolutions this year.

To that end, you should consider:

A SELF-AUDIT OF EMPLOYEE CLASSIFICATION AND COMPENSATION PRACTICES.

Wage and hour claims under the Fair Labor Standards Act (“FLSA”) (and usually under state wage laws piggybacked onto FLSA claims) continue to rise and the claims, which are usually filed as collective or class actions, carry enormous liability exposure. These claims are generally extremely expensive to litigate and settle due to the fact that employees can seek damages for up to three years of unpaid wages or overtime for him/herself and for other similarly situated employees. In most cases, the amount owed will be doubled due to a “liquidated damages” provision of the FLSA. And, to make matters worse, you will likely have to pay not only your defense attorney but the plaintiffs’ class/collective action attorney under a fee-shifting provision of the FLSA.

Small mistakes in employee classification or compensation policies add up quickly when the claim involves many current and former employees and may quickly reach tens or hundreds of thousands of dollars if a collective or class action is certified and after liquidated (doubled) damages and the plaintiff’s attorney’s fees are taken into account.

To minimize these risks consider the following:

1.  Are you incorrectly classifying non-exempt (hourly) employees as exempt (paid salary without overtime)?

Remember: An employee is not exempt simply because you pay them by salary and the salary meets the minimum Department of Labor threshold; the employee must also meet the duties tests. The duties test requires analysis of the employee’s job and whether it fits within one of the overtime exemptions.

Example: Even if you have an employee who you pay a substantial salary, if the employee is primarily performing “blue-collar” work or is an administrator performing routine tasks with no supervisory authority, the employee is likely non-exempt despite the high salary. There are general and specific overtime exemptions under the FLSA. It is worth your time to evaluate each job. If in doubt, non-exempt is always the safest classification.

2.  Do you have an agreement with an employee that seems a “win-win” but violates compensation laws?

Remember: An employee cannot waive their rights to be lawfully compensated under the FLSA. The employee may agree to your arrangement today, but tomorrow could file a wage claim or you might find yourself under a DOL audit. Neither the DOL not the courts will care that the employee agreed or even requested the illegal pay arrangement.

Example: If you have a non-exempt employee who wants to work more hours but you can’t afford to pay overtime, don’t agree to pay the weekly hours over 40 under the table. This practice (very common in certain industries) is not only illegal but can result in an extension of the FLSA statute of limitations from 2 to 3 years.

3. Do you pay overtime wages to employees who work overtime without authorization?

Remember: If your non-exempt employee works overtime, you have to pay overtime compensation whether the work was authorized or not. If you have a problem with unauthorized overtime, you should discipline (or terminate if the problem continues) the offending employees but you still have to pay them overtime.

4. Do you require employees to keep accurate account of their time?

Remember: If you have employees who refuse to sign in or out, or sign in too early or sign out too late, you need to discipline (or terminate if the problem continues) the offending employees. It is your obligation as the employer to ensure that time is accurately tracked. If you fail to ensure accurate timekeeping, you may have a very expensive lawsuit to defend, even if the problem was created by employees failing to properly follow your timekeeping rules. Additionally, consider having employees sign off on their timesheets – on paper or electronically. You might consider added language above their signature affirming that the time records reflect all hours worked.

5. Do you allow employees to be interrupted with work tasks while on an unpaid break?

Remember: If your employees are sometimes interrupted to address work questions or tasks during an unpaid break, such as a meal break, if you do not pay for their time during the break, you may be susceptible to substantial liability. This may seem trivial but consider all of your past and current employees over the last 2 -3 years and all of their lunch breaks. Then, consider that if all of those hours should have been compensated, you would not only owe the employees for the unpaid break time but also overtime pay if the additional time puts the employees over 40 hours for the week — plus liquidated damages and attorney’s fees, of course.

6. Are you incorrectly classifying employees as independent contractors?

Remember: Even if your employee doesn’t want to be treated as an employee, if that is what the worker is, you can’t agree to pay them as an independent contractor. An agreement to call an apple an orange, even if in a signed document, will not make the apple an orange and will be no defense in a lawsuit.

Also, the costs of transitioning “independent contractors” to employees may not be as high as you think – careful review and modification of schedules and pay rates may result in minimal additional costs.

ADOPTION OF ARBITRATION AGREEMENT WITH A CLASS/COLLECTIVE ACTION WAIVER?

There is no way to completely avoid a wage claim. However, with a well-drafted arbitration agreement you can avoid having to litigate in court and, most importantly, can avoid a class or collective action. This validity of a class/collective action waiver in an arbitration agreement was solidified in May, 2018 in three consolidated cases. See Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). While the cost savings of arbitrating a single employee claim vs. court litigation are debatable, the benefits of a class/collective action bar are clear.

However, those of you in the transportation industry will not be able to enjoy the benefits of an arbitration clause as to your employees because employment contracts of workers in interstate commerce are expressly exempted from coverage under the Federal Arbitration Act. However, the United States Supreme Court is expected to issue a decision this year in New Prime Inc. v. Oliveira, U.S., No. 17-340, as to whether drivers that classified as independent contractors may be bound by an arbitration (and class/collective action waiver) agreement. Transportation employers should keep their eyes open for this decision.

In short, careful consideration of compensation policies and procedures may avoid costly litigation. But, to further buttress your business against wage and hour litigation, consideration should be given to the adoption of an arbitration agreement including a class/collective action waiver.

Questions? Need help reviewing employee classification or drafting an arbitration agreement? Contact Attorney Jennifer Adams Murphy in our St. Charles office at jemurphy@wesselssherman.com or (630) 377-1554

Related Posts: Illinois Workplace Transparency Act, Arbitration Agreements and Class Action Litigation, New Prime Loses In Its Attempt To Compel Arbitration In Interstate Trucking Case, Yes, Have Your Independent Contractors (Or Employees) Sign An Agreement To Arbitrate Disputes And Waive Their Rights To Class Action Suits!!

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Categories
Arbitration

Yes, Have Your Independent Contractors (Or Employees) Sign An Agreement To Arbitrate Disputes And Waive Their Rights To Class Action Suits!!

Yes, Have Your Independent Contractors (Or Employees) Sign An Agreement To Arbitrate Disputes And Waive Their Rights To Class Action Suits!!

By Nancy E. Joerg of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Arbitration on Tuesday, January 29, 2019.

Clients are increasingly aware of the growing number of class action lawsuits across the United States. What should the worried company owner do? The logical response is to have independent contractors (or employees) sign a contract under which they agree to mandatory arbitration of all disputes, claims or causes of action arising out of or related to the independent contractor (or employment) relationship with the Company.

CLASS ACTION WAIVER INCLUDED IN ARBITRATION AGREEMENT: When an independent contractor or employee signs a mandatory Arbitration Agreement which also contains a “class action waiver,” they also (by signing the Agreement) give up their constitutional right to have a trial by jury. They are giving up their right to go to court in order to settle disputes or to participate in a class action lawsuit.

CAN BE STAND-ALONE DOCUMENT OR INCLUDED IN THE INDEPENDENT CONTRACTOR/EMPLOYMENT AGREEMENT: Mandatory Arbitration Agreements with Class Action Waivers can be a separate stand- alone document in addition to independent contractor agreements/employment agreements. Or, these mandatory Arbitration Agreements with Class Action Waivers can be additional provisions in an independent contractor agreement or employment agreement.

There is a school of thought that it is better to have the mandatory Arbitration Agreement with Class Action Waiver be a stand-alone document separate and apart from the independent contractor agreement or the employment agreement (so that if the independent contractor agreement or employment agreement is found invalid for some reason, the mandatory Arbitration Agreement with Class Action Waiver might still be found to be legally enforceable).

SMART WAY FOR COMPANY TO ATTEMPT LEGAL PROTECTION IN VIEW OF CLASS ACTION LITIGATION: Certain mandatory Arbitration Agreements may eventually be found unenforceable in a court of law, but it is often a good idea to have independent contractors/employees sign such an Arbitration Agreement with Class Action Waiver with the “hope” that it will indeed be enforceable. Just like a non-compete agreement, such contracts are drafted with “fingers crossed” that they will be someday enforceable or at least serve as a strong deterrent.

Once a client decides that they do indeed want such an agreement, there are many decisions to be made as to the specifics of the provisions in the agreement. A mandatory Arbitration Agreement with Class Action Waiver is certainly a smart way for a company to attempt legal protection in the face of a growing ocean of litigation (with often the most painful and expensive part being class action litigation). Companies using independent contractors should seriously consider an immediate revision of their independent contractor agreements to incorporate Arbitration and Class Action Waiver provisions into the independent contractor agreement.

If any readers want to discuss any aspect of the increasing trend to have mandatory Arbitration Agreements with Class Action Waivers, please contact Attorney Nancy E. Joerg at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at najoerg@wesselssherman.com.

Related Posts: Illinois Workplace Transparency Act, Arbitration Agreements and Class Action Litigation, New Prime Loses In Its Attempt To Compel Arbitration In Interstate Trucking Case, A NEW YEAR’S RESOLUTION TO AVOID EXTREMELY EXPENSIVE WAGE CLAIMS

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Wage and Hour

A NEW YEAR’S RESOLUTION TO AVOID EXTREMELY EXPENSIVE WAGE CLAIMS

A NEW YEAR’S RESOLUTION TO AVOID EXTREMELY EXPENSIVE WAGE CLAIMS

By Jennifer Adams Murphy of Wessels Sherman Joerg Liszka Laverty Seneczko P.C. posted in Arbitration on Monday, January 14, 2019.

Audit compensation classifications and policies

√ Implement arbitration agreements

The New Year is a time for fresh starts – diets, exercise programs and wonderful sounding self-improvement programs. This is great – but in your quest for improvement, don’t forget about your business! While resolutions to audit employee classifications and compensation policies and to adopt an arbitration policy may not carry the exciting vision of a new you, they may be the most significant (and long-lasting) of your resolutions this year.

To that end, you should consider:

A SELF-AUDIT OF EMPLOYEE CLASSIFICATION AND COMPENSATION PRACTICES.

Wage and hour claims under the Fair Labor Standards Act (“FLSA”) (and usually under state wage laws piggybacked onto FLSA claims) continue to rise and the claims, which are usually filed as collective or class actions, carry enormous liability exposure. These claims are generally extremely expensive to litigate and settle due to the fact that employees can seek damages for up to three years of unpaid wages or overtime for him/herself and for other similarly situated employees. In most cases, the amount owed will be doubled due to a “liquidated damages” provision of the FLSA. And, to make matters worse, you will likely have to pay not only your defense attorney but the plaintiffs’ class/collective action attorney under a fee-shifting provision of the FLSA.

Small mistakes in employee classification or compensation policies add up quickly when the claim involves many current and former employees and may quickly reach tens or hundreds of thousands of dollars if a collective or class action is certified and after liquidated (doubled) damages and the plaintiff’s attorney’s fees are taken into account.

To minimize these risks consider the following:

1.  Are you incorrectly classifying non-exempt (hourly) employees as exempt (paid salary without overtime)?

Remember: An employee is not exempt simply because you pay them by salary and the salary meets the minimum Department of Labor threshold; the employee must also meet the duties tests. The duties test requires analysis of the employee’s job and whether it fits within one of the overtime exemptions.

Example: Even if you have an employee who you pay a substantial salary, if the employee is primarily performing “blue-collar” work or is an administrator performing routine tasks with no supervisory authority, the employee is likely non-exempt despite the high salary. There are general and specific overtime exemptions under the FLSA. It is worth your time to evaluate each job. If in doubt, non-exempt is always the safest classification.

2.  Do you have an agreement with an employee that seems a “win-win” but violates compensation laws?

Remember: An employee cannot waive their rights to be lawfully compensated under the FLSA. The employee may agree to your arrangement today, but tomorrow could file a wage claim or you might find yourself under a DOL audit. Neither the DOL not the courts will care that the employee agreed or even requested the illegal pay arrangement.

Example: If you have a non-exempt employee who wants to work more hours but you can’t afford to pay overtime, don’t agree to pay the weekly hours over 40 under the table. This practice (very common in certain industries) is not only illegal but can result in an extension of the FLSA statute of limitations from 2 to 3 years.

3. Do you pay overtime wages to employees who work overtime without authorization?

Remember: If your non-exempt employee works overtime, you have to pay overtime compensation whether the work was authorized or not. If you have a problem with unauthorized overtime, you should discipline (or terminate if the problem continues) the offending employees but you still have to pay them overtime.

4. Do you require employees to keep accurate account of their time?

Remember: If you have employees who refuse to sign in or out, or sign in too early or sign out too late, you need to discipline (or terminate if the problem continues) the offending employees. It is your obligation as the employer to ensure that time is accurately tracked. If you fail to ensure accurate timekeeping, you may have a very expensive lawsuit to defend, even if the problem was created by employees failing to properly follow your timekeeping rules. Additionally, consider having employees sign off on their timesheets – on paper or electronically. You might consider added language above their signature affirming that the time records reflect all hours worked.

5. Do you allow employees to be interrupted with work tasks while on an unpaid break?

Remember: If your employees are sometimes interrupted to address work questions or tasks during an unpaid break, such as a meal break, if you do not pay for their time during the break, you may be susceptible to substantial liability. This may seem trivial but consider all of your past and current employees over the last 2 -3 years and all of their lunch breaks. Then, consider that if all of those hours should have been compensated, you would not only owe the employees for the unpaid break time but also overtime pay if the additional time puts the employees over 40 hours for the week — plus liquidated damages and attorney’s fees, of course.

6. Are you incorrectly classifying employees as independent contractors?

Remember: Even if your employee doesn’t want to be treated as an employee, if that is what the worker is, you can’t agree to pay them as an independent contractor. An agreement to call an apple an orange, even if in a signed document, will not make the apple an orange and will be no defense in a lawsuit.

Also, the costs of transitioning “independent contractors” to employees may not be as high as you think – careful review and modification of schedules and pay rates may result in minimal additional costs.

ADOPTION OF ARBITRATION AGREEMENT WITH A CLASS/COLLECTIVE ACTION WAIVER?

There is no way to completely avoid a wage claim. However, with a well-drafted arbitration agreement you can avoid having to litigate in court and, most importantly, can avoid a class or collective action. This validity of a class/collective action waiver in an arbitration agreement was solidified in May, 2018 in three consolidated cases. See Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018). While the cost savings of arbitrating a single employee claim vs. court litigation are debatable, the benefits of a class/collective action bar are clear.

However, those of you in the transportation industry will not be able to enjoy the benefits of an arbitration clause as to your employees because employment contracts of workers in interstate commerce are expressly exempted from coverage under the Federal Arbitration Act. However, the United States Supreme Court is expected to issue a decision this year in New Prime Inc. v. Oliveira, U.S., No. 17-340, as to whether drivers that classified as independent contractors may be bound by an arbitration (and class/collective action waiver) agreement. Transportation employers should keep their eyes open for this decision.

In short, careful consideration of compensation policies and procedures may avoid costly litigation. But, to further buttress your business against wage and hour litigation, consideration should be given to the adoption of an arbitration agreement including a class/collective action waiver.

Questions? Need help reviewing employee classification or drafting an arbitration agreement? Contact Attorney Jennifer Adams Murphy in our St. Charles office at jemurphy@wesselssherman.com or (630) 377-1554

Related Posts: Illinois Workplace Transparency Act, Arbitration Agreements and Class Action Litigation, New Prime Loses In Its Attempt To Compel Arbitration In Interstate Trucking Case, Yes, Have Your Independent Contractors (Or Employees) Sign An Agreement To Arbitrate Disputes And Waive Their Rights To Class Action Suits!!

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