Legal Updates

Second Circuit Approves Offers of Judgment in FLSA Cases

On December 6, 2019, the Second Circuit Court of Appeals held that judicial approval is not required for offers of judgment to settle Fair Labor and Standards Act (“FLSA”) claims made pursuant to Federal Rule of Civil Procedure 68(a). This development may provide employers with a valuable strategic tool for use in FLSA cases, as least in the Second Circuit, allowing the parties to include terms in offers of judgment that the courts might disallow were court approval required.

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NLRB Reverses Purple Communications – Holds Employer May Restrict Employees’ Use of Email and Other Information Technology Systems

On December 17, 2019, the National Labor Relations Board (“Board”) ruled that an employer’s rule prohibiting use of its email system for nonbusiness purposes did not violate employees’ rights under the National Labor Relations Act. The 3-1 decision in Caesars Entertainment Corp d/b/a Rio All-Suites Hotel and Casino, NLRB Case No. 28-CA-060841, overturns the Board’s 2014 decision in Purple Communications, which held that work rules prohibiting employees from using employer-provided email systems for union activity were presumptively invalid.

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The Board Restores Balance in Collective Bargaining by Reinstating Employers’ Ability to Unilaterally Cease Dues Checkoff After Contract Expiration

Approximately four years ago, during the Obama Administration, the National Labor Relations Board upended decades of well-settled precedent by making it unlawful for employers to unilaterally cease dues checkoff after contract expiration.  This week, the Republican-majority Board in Valley Hospital Medical Center, Inc. reversed that unprincipled departure from established precedent and restored balance and stability in collective bargaining negotiations.

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New Fair Warning Act of 2019 would impact more small businesses

On November 20, 2019, Rep. Tim Ryan (D-OH) proposed legislation that would require more small businesses to give their employees an advance warning before closing their doors.

H.R. 5205, the Fair Warning Act of 2019, which is supported by Sen. Sherrod Brown (D-OH) and Sen. Chuck Schumer (D-NY), would amend a 1988 law called the WARN Act (Worker Adjustment and Retraining Notification Act).  The WARN Act currently requires employers to give 60 days advance notice to employees who may experience an employment loss due to a plant closing or mass layoff that effects 50 or more full–time employees at a single site of employment. An employer under the WARN Act must have at least 100 or more full-time employees. Read more…

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Take 5 Newsletter: Five Quick Tips on Wage and Hour Compliance

It seems as though there is a minefield that employers must navigate to ensure that they fulfill their wage and hour obligations to their employees. Employers must somehow comply with overlapping and seemingly contradictory federal, state, district, county, and local requirements. The wave of civil actions that are filed against employers alleging wage and hour violations is not slowing. And given the potential financial consequences for non-compliance, illustrated in part by a $102 million award for technical paystub violations, meeting these requirements must be a priority for all employers.

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New London Connecticut Superior Court Jury Awards $839,423 Verdict for Theft of U.S. Navy Underwater Drone Project Trade Secrets

A New London Connecticut Superior Court jury awarded an $839,423 verdict in November 2019, involving theft of trade secrets for a $70 million U.S. Navy underwater drone project. This case, LBI, Inc. v. Sparks, et al., KNL-cv12-6018984-S, is a classic example of the blatant theft of an employer’s confidential and proprietary information that is so easily traceable to electronic files – and the costly consequences for the defendant employer’s complicity in that trade secret misappropriation.

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Time Is Money: A Quick Wage-Hour Tip on … Inclement Weather

As winter once again approaches, employers, particularly those in cold-weather states, face the recurring specter of inclement weather affecting business operations and employee attendance.  While the weather may create stress and disruption for a business and its people, employers must not lose sight of the fact that the rules governing how you pay your employees continue to apply throughout any weather event.

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Department of Labor Issues Final Rule Updating Regulations Addressing When Pay and Benefits Factor into the FLSA Regular Rate

On December 16, 2019, the United States Department of Labor’s Wage and Hour Division (“WHD”) published in the Federal Register a Final Rule updating the Fair Labor Standards Act (“FLSA”) regulations that govern, among other things, whether certain types of pay and benefits constitute part of a non-exempt employee’s regular rate of pay for purposes of calculating overtime under federal law.  Under section 7(e) of the FLSA, an employee’s regular rate for any given workweek “shall be deemed to include all remuneration for employment paid to, or on behalf of the employee, but shall not be deemed to include” pay or benefits falling within eight enumerated exclusions.

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A Future Based on Creditworthiness——Review of China’s Corporate Social Credit System and Corporate Compliance

“China has newly introduced its corporate social credit system (the “CSCS”)”, “the CSCS is mainly targeting European and American companies in China” and “the 2020 deadline is near and there is not much time left for foreign companies in China”, since the second half of 2020, headquarters and local offices of multinational companies operating in China have received many alert emails so headlined. Some consulting agencies held several seminars on the CSCS topic, which were quite popular among the concerned companies despite the costly tickets. Setting aside the hyperboles in these agencies market campaigns, the authors believes the CSCS’ profound influence on companies business operation in China.

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Liability for non-compliance with the requirements on the localization of personal data of Russian nationals to become more stringent

On December 2, 2019, Federal Law No. 405-FZ1 entered into force. This act significantly increases administrative liability for violations of the requirements on the localization of databases containing personal data of Russian nationals. The localization requirement was first introduced into the Russian legislation in 2014 and imposed an obligation to locate servers with the personal data of Russian nationals only in the territory of the Russian Federation.
It should be noted that previously, the maximum fine for a violation of the localization requirements, that is, for a refusal to provide information on the implementation of the requirements of the law under Art. 19.7 of the Administrative Offenses Code, was RUB 5 thousand. Many major foreign companies were held liable for such violations under Art. 19.7 of the Administrative Offenses Code. Thus, in 2016, LinkedIn2 was blocked for such a violation, and in 2019, Facebook3 and Twitter4 were fined in the amount of RUB 3 thousand each.
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