New Jersey Senate Labor Committee Amends Bill Prohibiting Use of Nondisclosure Provisions in Employment and Settlement Agreements

New Jersey Senate Labor Committee Amends Bill Prohibiting Use of Nondisclosure Provisions in Employment and Settlement Agreements

In response to the recent spotlight on sexual abuse and harassment claims in the workplace and the #MeToo movement, the federal government and numerous states, including New Jersey, have focused attention on the use of nondisclosure provisions in settlement agreements involving claims of sexual harassment and assault. As we previously reported, the Tax Cuts and Job Bills Act was passed in December 2017 and includes a provision that bars any settlement or payment related to claims of sexual harassment or sexual abuse from being deducted as a business expense if the payments are subject to a nondisclosure agreement. While the federal tax bill aims to discourage the use of nondisclosure agreements, the proposed New Jersey legislation initially provided an outright ban on such agreements. At the time of its first introduction during the prior legislative session in December 2017, Senator Loretta Weinberg’s proposed bill prohibited New Jersey employers from including “a provision in any employment contract or agreement which has the purpose or effect of concealing the details relating to a claim of discrimination, retaliation, or harassment.” The bill is unique because it is not limited to sexual harassment or abuse claims, but rather would apply to any type of discrimination,...

Supreme Court Holds FLSA Overtime Exemptions Not to be Construed Narrowly

Supreme Court Holds FLSA Overtime Exemptions Not to be Construed Narrowly

On April 2, 2018, in Encino Motorcars, LLC, v. Navarro, the Supreme Court held that auto service advisors – those who “interact with customers and sell them services for their vehicles” – are exempt from the overtime pay requirements of the Fair Labor Standards Act (“the FLSA”). The Court’s decision will certainly affect auto service advisors, but its impact will not be limited to the auto dealership industry. The crux of the Court’s decision centered around Section 13(b)(10)(A) of the FLSA, which states that “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” is exempt from the FLSA overtime requirement. In a 5-4 decision, the majority found that a service advisor is “obviously a salesman” under the ordinary meaning of salesman, given that a salesman sells goods or services and service advisors “sell [customers] services for their vehicles.” The Court also found that service advisors are “primarily engaged in . . . servicing automobiles” due to their integral involvement in the servicing process. Thus, the Court held that sales advisors are exempt from the FLSA overtime pay requirement under Section 13(b)(10)(A). Significantly, in reaching its conclusion, the majority departed from the Supreme Court’s longstanding principle that FLSA...

DOL Adopts Primary Beneficiary Test to Determine Intern Status Under Wage Hour Law

DOL Adopts Primary Beneficiary Test to Determine Intern Status Under Wage Hour Law

On January 5, 2018, the Department of Labor (DOL) withdrew its six-factor test, established by a 2010 DOL guidance, used to determine whether interns and students are considered employees and, thus, covered by the Fair Labor Standard Act (FLSA), and, in its place, adopted a seven-factor test – listed in Fact Sheet 71 – applied by the Second Circuit in Glatt v. Fox Searchlight Pictures, Inc. The abandoned six-factor test, issued under the Obama Administration, required that all of the criteria be met in order to find that an intern is not an employee under the FLSA. In 2015, the Second Circuit disregarded the DOL test in the Glatt ruling. In deciding against the unpaid interns at Fox Searchlight, the Second Circuit held that the six-factor test was too rigid. Subsequently, the Second Circuit ruled that in determining whether interns are classified as employees under the FLSA, the “economic reality” between the intern and the employer should be evaluated to determine which party is the “primary beneficiary” of the relationship. The Second Circuit applied a non-exhaustive list of seven factors to use in the “primary beneficiary” test, but cautioned that “[a]pplying these considerations requires weighing and balancing all of the...

NLRB Gives Employers Several Reasons to Be Jolly This Holiday Season

NLRB Gives Employers Several Reasons to Be Jolly This Holiday Season

December 2017 has been one for the labor law community to remember. We have seen a wintry flurry of actions by the newly-constituted National Labor Relations Board (NLRB), which has begun a much anticipated releveling of the playing field between Big Labor and Corporate America in the aftermath of profound pro-union actions under the prior administration. On the heels of an instructive and potentially predictive memorandum issued by the Board’s new General Counsel, the NLRB raised questions about the 2014 “quickie” election rule and issued a number of decisions setting forth more neutral standards for analyzing significant legal issues under the National Labor Relations Act (NLRA), including: an administrative law judge’s ability to accept a charged party’s proposed settlement terms; when multiple employers should be deemed “joint employers” under the NLRA; an employer’s ability to take unilateral action consistent with its past practices; the legality of workplace rules that do not expressly prohibit concerted activities protected by the NLRA; and appropriate collective bargaining units. New NLRB General Counsel’s First Memorandum On December 1, 2017, the NLRB’s new General Counsel, Peter B. Robb, issued a memorandum leaving little doubt that he has a very different view of the NLRA than his predecessor on several key...

Third Circuit Affirms that Short Breaks, Treated as Flex Time, are Compensable

Third Circuit Affirms that Short Breaks, Treated as Flex Time, are Compensable

On October 13, 2017, the Third Circuit held in Secretary United States Department of Labor v. American Future Systems, Inc., that under the Fair Labor Standards Act (FLSA), an employer was required to compensate employees for all breaks of twenty minutes or less that the employer treated as flex time for the employees. Facts and Analysis Defendant American Future Systems, d/b/a Progressive Business Publications (“Progressive”) employed sales representatives to sell its business publications. The sales representatives were paid on an hourly basis, but only when logged onto their computers. In 2009, Progressive eliminated its policy that permitted employees to take two 15 minute paid breaks per day and replaced it with a “flexible time” policy. The flexible time policy allowed sales representatives to “log-off the computer system at any time of the day, for any reason, and for any length of time, at which point, if they so choose, they may leave the office.” Employees were required to log off their computers if they were “not on an active sales call, recording the results of a call, engaged in training or administrative activities, or engaged in other activities that Progressive considers to be work-related.” If sales representatives were logged out...