Legal Updates

Obama, Tea Party, Health Care, Jobs: A Midterm Review of the Impact on Labor and Employment Law – January 26, 2011 in Washington, DC

Whistleblower considerations are likely to be especially prominent in the new year and as a new Congressional term begins, leading to the 2012 election campaign.

Please join me and other attorneys from my firm, EpsteinBeckerGreen, as we present a full-day program covering labor and employment law topics that have increasingly impacted employers over the past two years. In addition, we will offer an outlook of what we should expect in the coming two years. Our keynote speaker is Darrel Thompson, Senior Advisor to Senate Majority Harry Reid, who will offer comments concerning the agenda of the 112th Congress. We are particularly pleased that Norah O’Donnell, MSNBC Chief Washington Correspondent, is attending the event as our guest luncheon speaker.

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U.S. Department of Labor to Refer Employees to Plaintiffs’ Lawyers

by Michael Kun and Doug Weiner

It is no secret that employers have been beseiged by wage-hour litigation, including wage-hour class actions and collective actions. These lawsuits have hit the hospitality industry as hard as any other industry, perhaps harder.

It is also no secret that the persons who benefit most from these actions are often plaintiffs’ counsel, who frequently receive one-third or more of any recovery.

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U.S. Department of Labor to Refer Employees to Plaintiffs’ Lawyers

by Michael Kun and Doug Weiner

It is no secret that employers have been beseiged by wage-hour litigation, including wage-hour class actions and collective actions.  It is also no secret that the persons who benefit most from these actions are often plaintiffs’ counsel, who frequently receive one-third or more of any recovery.  Now, as a result of an unprecedented new program initiated by the the Department of Labor’s Wage and Hour Division (“WHD”), the WHD will be practically delivering potential plaintiffs to the doors of plaintiffs’ counsel — and the WHD has invited plaintiffs’ counsel to let it know if it wants a piece of the action. 

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Supreme Court May Weigh in on When Employers Can Take Advantage of the "Fluctuating Workweek" Method for Calculating Overtime

By Kara M. Maciel and Jordan Schwartz

As many employers are aware, the federal Fair Labor Standards Act (“FLSA”) mandates that employers pay non-exempt employees one and one-half times their regular rate of pay for all hours worked in excess of 40 in a workweek. However, as discussed by our colleague, Richard Tuschman, in his blog post “Reducing Your Company’s Exposure on FLSA Exemption Claims,” depending on the nature of an employee’s work schedule and salary arrangement, an employer can take advantage of the “fluctuating workweek” method. In so doing, an employer may compensate a non-exempt employee for overtime compensation at a rate of one-half his or her regular rate – as opposed to the usual rate of one-and-one half times the regular rate – because such hours have already been compensated at the straight time regular rate, under the salary arrangement.     

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Update: Former Paint Company Technical Director Sentenced To 15 Months In Federal Prison For Trade Secret Theft

Last September, we wrote about David Yen Lee, a former Technical Director for a painting and coating company who pled guilty to downloading trade secrets from a secure computer system and transferring them to external thumb drives with the intention of using the trade secrets for the benefit of another.

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Bay Area Restaurant Chain Owners Face Criminal Charges for Employing Illegal Aliens

By:  Robert S. Groban, Jr.

On December 6, 2010, the U.S. Attorney’s Office in San Francisco announced that the owners of the El Balazo restaurant chain in the Bay Area had been charged in a 20-count criminal Information with tax fraud and harboring illegal aliens.  These charges arise out of a raid made by federal agents in May 2008 that resulted in the arrest of 64 illegal aliens at several of these restaurants.  The Information charges the owners with conspiracy to commit tax evasion, tax evasion, harboring illegal aliens for financial gain, and submitting false Social Security numbers for undocumented workers at the restaurants.  The defendants were arraigned on December 6, 2010 and each remain free on $100,000 bond.

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Court Affirms Jury Finding That Specific Information About Insurance Policy Holders Was A Trade Secret

The Iowa Court of Appeals recently affirmed a jury’s conclusion that detailed information about insurance policy holders was a protected trade secret. Monona County Mutual Insurance Association v. The Hoffman Agency, Inc., Case No. 0-640/10-0136 (Iowa Ct. App. Nov. 24, 2010). The customer information at issue, which was kept in a vault to which access was very limited and which was not shared with the public, included customer names, the type of insurance coverage held by each customer, policy expiration dates and the premiums paid for such policies. This information is used by insurance agents to contact customers before their policies have expired “to see if the customer’s needs have changed and to ensure the customer’s continued business.” An expert witness testified that this information “went to the heart of a business” and that if a competitor received such information, “business would essentially be handed to the competitor on a plate.” Although the defendant claimed that this information “was readily available to it” and therefore not a trade secret, the Court rejected that argument, explaining that it was unclear how the defendant “would know who to contact and when, without the information contained on the list.”

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Does the FLSA Preempt State Wage and Hour Law Regarding Donning and Doffing?

By: Joseph D. Guarino and Jesse G. Pauker

The Supreme Court has once again been asked to address the question of whether time spent by employees donning and doffing has to be compensated. On October 29, 2010, the Court received a petition filed by Kraft Food Global, Inc., asking it to review the Seventh Circuit’s ruling in Spoerle v. Kraft Foods Global, Inc., that Section 203(o) of Fair Labor Standards Act (“FLSA”), allowing unions and employers to agree to forgo pay for donning and doffing, does not preempt state law. 

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Hospitality Immigration Alert

By:  Robert S. Groban, Jr.

Missouri Man Convicted in Scheme to Place Undocumented Workers in Hotels

On October 28, 2010, a Missouri man was convicted by the U.S. District Court in Missouri for his role in a racketeering scheme that involved placing undocumented workers at hotels in 14 states, including several hotels in the Kansas City, Missouri, area. United States v. Dougherty, No. 4:09-CR-00143 (W.D. Mo. Oct. 10, 2010). Beth Phillips, the U.S. Attorney for the Western District of Missouri, indicated that “Mr. Kristin Dougherty was found guilty of racketeering, participating in a Racketeering Influenced and Corrupt Organizations Act (‘RICO’) conspiracy and wire fraud.  He faces a possible sentence of up to 60 years in federal prison without parole, plus a fine up to $75,000.”

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2011 Home Health Prospective Payment System Final Rule: CMS Clarifies Change of Ownership Provisions and Implements New Legislative Requirements

On November 17, 2010, the Centers for Medicare and Medicaid Services (“CMS“) published the 2011 Home Health Prospective Payment System (“2011 HH PPS“) final rule.[1] A number of significant issues are addressed in this rule and are effective January 1, 2011. Specifically, the 2011 HH PPS final rule addresses: (1) the rules regarding a change in ownership within 36 months after the effective date of a home health agency’s (“HHA‘s”) initial enrollment or within 36 months following the HHA’s most recent change in majority ownership; (2) new legislative requirements regarding face-to-face encounters with providers related to home health and hospice care; (3) a 3.79 percent reduction to rates for calendar year (“CY“) 2011; and (4) the national standardized 60-day episode rates, the national per-visit rates, the non-routine medical supply (“NRS“) conversion factors, and the low utilization payment amount add-on payments. This Client Alert will provide an overview of these changes.

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