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Employers have long understood that what their employees do on company time is directly linked to the company’s own potential liabilities. When employees using mobile electronic devices cause harm, their carelessness isn’t only a problem for them—on company time, it can become a major problem for employers, as courts across the country have made clear in the past few years. Many employers are now reevaluating their cell phone usage policies for precisely this reason.

When a driver is using a cell phone at the time of an accident and the accident happens while the driver is on company business, the phone call is a business one, or the cell phone was provided by the company, companies have been sued along with the driver/employee, under a theory of “vicarious liability” or respondeat superior for the actions of its employee.  Under these doctrines, an employer may be responsible for the harm caused by its employee if that employee was acting within the course and scope of his or her employment at the time the accident occurred.…

Continue Reading In Order to Avoid Liability, Employers Need to Reevaluate Employee Cell Phone Usage Policies

On July 28, 2015, the United States Court of Appeals for the Seventh Circuit (“Seventh Circuit”) ruled that Title VII does not protect against sexual orientation discrimination.  See, Hively v. Ivy Tech Cmty. Coll., 2016 BL 244172, 7th Cir., No. 15-1720, 7/28/16.  The Seventh Circuit ruling is the first by a federal circuit to address the question since the EEOC held in an administrative ruling that bias based on sexual orientation is sex discrimination violating Title VII.

The Seventh Circuit did not discuss the merits of Ms. Hively’s case, who alleged Ivy Tech Community College did not promote her because she is a lesbian.  Instead, the Court discussed the “paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act.”  Judge Rovner wrote:

For although federal law now guarantees anyone the right to marry another person of the same gender, Title VII, to the extent it does not reach sexual orientation discrimination, also allows employers to fire that employee for doing so….Many citizens would be surprised to learn that under federal law any private employer can summon an employee into his office and state, “You are a hard‐working employee and have added much value to my company, but I am firing you because you are gay.” And the employee would have no recourse whatsoever—unless she happens to live in a state or locality with an anti‐discrimination statute that includes sexual orientation. . .…

Continue Reading What the Seventh Circuit’s Recent Title VII Ruling Means for Sexual Orientation Discrimination in the Workplace

As of January 1, 2016, Illinois’s Equal Pay Act (the “Act”) expanded to prohibit all employers, regardless of size, from paying unequal wages to men and women for doing the same or substantially similar work, except if the wage difference is based upon a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or factors other than gender.  The previous version of the Act only applied to employers with four or more employees.

The recent amendments to the Act also increase the civil penalties for violation of the law as follows:

  1. For employers with four or more employees:  For a first offense, a fine not to exceed $2,500; for a second offense, a fine not to exceed $3,000; and for a third or subsequent offense, a fine not to exceed $5,000; and
  2. For employers with fewer than four employees:  For a first offense, a fine not to exceed $500; for a second offense, a fine not to exceed $2,500; and for a third or subsequent offense, a fine not to exceed $5,000.

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Continue Reading What You Need to Know About Recent Amendments to Illinois’s Equal Pay Act

Currently, 23 states have enacted laws to legalize medical marijuana.  Medical marijuana laws are challenging for all employers, but particularly multistate employers, as employers must reconcile federal and varying state laws.

In November 2015, medical marijuana dispensaries in Illinois began treating patients under Illinois’ Compassionate Use of Medical Cannabis Pilot Program Act (“Compassionate Use Act”). …

A recent Seventh Circuit decision  may provide ammunition for employers defending FLSA claims brought by commission-based employees or employees who work irregular hours.

In Ramon Alvarado, et al. v. Corporate Cleaning Services, Inc., et al., No. 13-3818 (7th Cir. April 1, 2015),  the plaintiffs were 24 window washers employed currently or formerly by Corporate Cleaning Services (“CCS”), one of Chicago’s largest providers of window-washing services to high-rises. They filed a lawsuit against CCS for failure to pay overtime wages under the FLSA, alleging they worked in excess of 40 hours in individual work weeks for CCS but were not paid at a rate of one and a half times their regular hourly rate of pay for all the time they worked in excess of 40 hours per week.

There is a commission-related exception to the FLSA that requires satisfaction of three conditions: (i) the worker’s regular pay exceeds one and a half times the federal minimum wage; (ii) more than half of the worker’s compensation represents commissions on goods or services; and (iii) the worker must be employed by a retail or service establishment.  See 29 U.S.C. § 207(i).  CCS  conceded that it did not pay the window washers for work in excess of 40 hours a week; and the window washers conceded that their regular pay exceeds one and a half times the federal minimum wage (under the exception’s first required condition).

Examining the “commission” issue, Circuit Judge Richard Posner  reviewed certain facts, including CCS’s assignment of “points” to jobs based on complexity and the number of hours that the window washers took to complete the job, as well as how each worker usually received the same amount of points allocated to the job.  CCS then used the number of points assigned to the job to determine the amount it charged the customer and often made price adjustments for the costs of permits, equipment rentals, competition, or the desire to maintain good relations with customers.  Because the plaintiffs’ compensation was based on the points assigned to each job on which they worked, their compensation would vary from job to job.

Posner analyzed the differences between two compensation systems – commission based and piecework based compensation.   In a piece-rate system the worker is paid by the item produced by him; but in a commission system, a worker is paid by the sale.  Varying compensation does not invalidate the compensation system as a commission system.  See Yi v. Sterling Collision Centers, Inc., 480 F.3d 505, 509-10 (7th Cir. 2007).  Another important consideration is that commission-compensated work involves irregular hours of work.  See Id. at 510.  Furthermore, if sales are made at a uniform rate, so that the hours worked-to-pay ratio is constant, then an employee who is paid by the sale is not a commission worker.  Piece-rate workers are not within the FLSA commission exception because they keep producing even when no sale is imminent – the hours-to-output tend to be constant.

Here, however, the plaintiffs could only work when CCS was hired (or sold its services), and therefore, their employment was irregular because of the peculiar conditions of the window-washing business.  In addition, Posner listed other reasons why their work was irregular, such as: weather, unable to amass an inventory, delays due to other work being done on the buildings or failure to notify residents, slowdown in demand, and, oddly enough, peregrine falcon attacks.  Posner concluded that the plaintiffs’ compensation represented commission because they were paid only if there had been a sale of window washing services.
Continue Reading The Seventh Circuit Further Clarifies FLSA Overtime Exceptions…For Window Washers

Everybody knows that an activist National Labor Relations Board (NLRB) expects a lot of all employers nowadays, union and non-union. One of the areas under the greatest NLRB scrutiny are time-honored, well-worn policies that have existed in employee handbooks for years:  don’t disparage your employer; don’t say anything damaging about the company; don’t harm the business’s reputation or goodwill in the marketplace.

The reason for these kinds of policies is obvious and intuitive: if you work here, you owe your employer a common law duty of loyalty. And loyalty means, in part, not publicly slamming your employer.

Most everyone also knows that the NLRB has taken aim at these kinds of policies because they arguably discourage employees from exercising their rights under Section 7 of the National Labor Relations Act. Section 7, broadly speaking, protects employees’ rights to organize and to work for their “mutual aid and protection,” which necessarily means being able to talk about working conditions. The NLRB (and administrative law judges applying NLRB rules) has held over and over in the past several years that employment policies prohibiting employee speech that is “damaging” to or “disparaging” of a business are overbroad – sure, the policy would prohibit some things that are clearly unlawful, like true defamation, but it would also prohibit publicizing a legitimate beef. If you don’t like your pay and you want to post “my employer is cheap” on Facebook, that statement is probably damaging to a company’s reputation – but it’s also clearly protected speech under the NLRA.

The fact is, many employers still have these kinds of policies in place. So what happens if you’re one of those employers, you read this blog, and you remove the offending policy from your employee handbook before anybody complains or notices? It’s like a tort suit without damages – no harm, no foul, right?

Wrong, at least according to one NLRB administrative law judge in Chicago a couple of days ago. A private bus company, Latino Express, maintained an employee disciplinary policy from July 2012 through April 2014 that made certain offenses immediate cause for termination. On the “don’ts” list were “[a]ny action that jeopardizes company contracts or loss of revenues” and “[a]ny activity which causes harm to the operations or reputation of Latino Express Bus Company.” The company removed those rules from its handbook in April 2014 “once the rules were brought to [its] attention,” and it even posted the revised policy on employee bulletin boards.  A union representing workers at the company filed an unfair labor practice charge over the fact that the company had maintained allegedly unlawful policies (the ones that had already been rescinded), and the case went to an administrative trial.
Continue Reading No Such Thing as “No Harm, No Foul”?

From January 1 to February 27, 2015, 170 people from 17 states and the District of Columbia were reported to have measles.  On February 25, 2015, health official confirmed Illinois’ 15th measles case in Cook County.  Most of the nation’s 125 cases are part of a large,  ongoing multi-state outbreak linked to Disneyland in…

The Illinois Supreme Court recently clarified the element of causation in its ruling in Michael v. Precision Alliance Group, LLC, 21 N.E.3d 1183 (Ill. 2014). In Michael, employees who reported about certain practices of Precision’s that resulted in an investigation by the Department of Agriculture, and whose employment was subsequently terminated, brought a…