FLSA Case Law Update Joanna Carey Cleveland, Vice President for Legal Affairs and Deputy General Counsel TJ Eaves, Higher Education Law Fellow UNC General Administration October 26, 2015

Overview Providing some wage-hour context through recent judicial interpretations of the FLSA Reviewing legal developments and notable themes Identifying some lessons learned Talking together through any questions or issues

Reminder of “big picture” context and framework One (or more) of your employees thinks you have violated the FLSA in one or more ways: – You are not paying minimum wage for hours work; – You have misclassified his/her position as exempt rather than non- exempt (meaning no payment for lots of overtime over the past 2-3 years); and/or – Lots of other people could be affected, too. How can it be addressed? – Internal complaint/grievance; – Complaint to the DOL; AND/OR – Lawsuit in federal court. Unlike the civil rights laws, there is NO requirement that the employee address the concern administratively first before filing a lawsuit.

Theme 1: P ublish and promote your work expectations The Supreme Court has clarified that the appropriate test to use in determining whether time is compensable is not whether an employer required the action in question, but whether the action was integral and indispensable to a principal activity the employee is employed to perform. – Integrity Staffing Solutions, Inc. v. Busk, 135 S.Ct. 513 (2014) On the other hand: – Remote access work is not compensable when it is incidental to the work performed. – De minimus activities also are not compensable, but this is not a quick and easy standard for employers.

Theme 2: A lways answer complaints (especially federal ones) There have been a number of cases in the 4 th Circuit over the past two years where an employee prevailed on his/her FLSA claim and received back wages, liquidated damages, attorneys’ fees, and costs simply because the employer failed to file a response to the complaint within the required time frame. – Dutan v. Sheet Metal Remodeling, LLC, 48 F. Supp. 3d 860 (E.D. Va. 2014): $24, awarded. – Garcia v. Mount of Lebanon Rest., 2015 WL (E.D. Va. Aug. 13, 2015): $56, awarded. – Portillo v. King of Pita Bakery, Inc., 2013 WL (E.D. Va. July 9, 2013): $34, awarded.

Theme 3: I nvestigate resolution (early) Remember that employees can be awarded attorneys’ fees under the FLSA. See 29 U.S.C. 216(b). More specifically, if a plaintiff succeeds on “any significant issue” in litigation then he/she is entitled to attorneys’ fees (even if resolved through a settlement). Attorneys’ fees and costs can be shockingly high (especially if more than one plaintiff involved). – Gregory v. Belfor USA Group, 2014 WL (E.D. Va. Feb. 4, 2014): $115,000 in attorneys’ fees and $12, in court costs awarded. – Driscoll v. George Washington Univ., 55 F. Supp. 3d 106 (D.D.C. 2014): $387, in attorneys’ fees and $13, in court costs awarded.

Theme 4: D o your due diligence in finalizing resolutions FLSA settlement agreements generally have to be approved by a court to be effective. See 29 U.S.C. 216(c) and Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982). – This requirement reflects the purpose of the FLSA to protect mistreated employees who may be unequal footing in terms of negotiations and bargaining power. Beam v. Dillon’s Bus Serv., 2015 WL (D. Md. 2015) Rivera v. Dixson, 2015 WL (D. Md. 2015) Entering into a settlement agreement for an internal complaint that releases all claims for an amount less than the full amount due may or may not resolve the matter. – Settlements must be in resolution of a bona fide dispute and where there is no dispute about what is owed, settlements are not enforceable. See Picerni v. Bilingual Seit & Preschool Inc., 2013 WL (E.D.N.Y. Feb. 22, 2013).

Lessons Consider whether to have policies that more explicitly describe the expectations for employees working at home or working outside regular work hours – what is allowed, what is prohibited? – Enforcement? Train employees and supervisors on work expectations. Partner early with your legal counsel and internal auditor if you become aware of a wage-hour complaint (either informal or formal) – and be mindful that individual complaints may foreshadow “class” complaints. Don’t bet on a private or informal settlement necessarily being the end of the dispute.

More Lessons: And, if you follow these tips… – P ublish and promote your work expectations; – A lways answer complaints; – I nvestigate resolution (early); – D o your due diligence in finalizing a resolution; …it may pay off in the end!

Questions/Discussion

FLSA Case Law Update Joanna Carey Cleveland, Vice President for Legal Affairs and Deputy General Counsel TJ Eaves, Higher Education Law Fellow UNC General Administration October 26, 2015