North America

Combining State Court Rule 23 Class Action with Federal FLSA Collective Action

By Evan J. Spelfogel

For several years, employers’ counsel have moved to block the combining of state wage and overtime claims with federal Fair Labor Standards Act (“FLSA”) claims, arguing that Rule 23 opt-out class actions were inherently inconsistent with FLSA collective opt-in actions. For support, they cited to the decision of the Third Circuit in De Asencio vs. Tyson Foods, Inc., 342 F. 3d 301 (3rd Cir. 2003) reversing a district court’s exercise of supplemental jurisdiction because of the inordinate size of the state-law class, the different terms of proof required by the implied contract state-law claims, and the general federal interest in opt-in wage actions. Since De Asencio, numerous district courts in the Third Circuit have dismissed state law wage claims that paralleled FLSA claims because of the “inherent incompatability” between opt-in collective actions and opt-out class actions. 

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National Restaurant Chain Seeks Guidance from U.S. Supreme Court on Tip Credit

By:  Ana S. Salper

With the recent surge in class action wage and hour lawsuits, hospitality employers have developed a heightened sensitivity to tip pooling arrangements, distributions of service charges to employees, and application of the “tip credit.” A case before the U.S. Supreme Court this month, Applebee’s International Inc. v. Gerald A. Fast et al., is likely to add further fuel to the fiery “tip credit” world,  as the high court will have to decide whether tipped employees should be paid minimum wage for nontipped tasks employees perform.

Under the Fair Labor Standards Act (“FLSA”), tipped employees can be paid below minimum wage – as low as $2.13 per hour – so long as employees earn enough tips to reach the minimum wage (which is $7.25 under federal law, although state minimum wages may be higher).  In the case pending before the high court, Applebee’s is asking the Court to decide whether employers can use the tip credit to pay tipped employees — namely, waiters and bartenders — below minimum wage even if they spend more than 20 percent of their time performing nontipped tasks. Applebee’s is challenging a U.S. Department of Labor (“DOL”) rule that requires an employer to pay a tipped employee the regular minimum wage if they spend more than 20% of their work time in a given week performing non-tipped duties. 

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Jerold I. Schneider provides commentary on America Invents Act for Daily Business Review

Arnstein & Lehr Attorney Jerold I. Schneider

Jerold I. Schneider

West Palm Beach Partner Jerold I. Schneider wrote an article entitled “America invests, but who benefits from new patent law?” for the Intellectual Property Special Report appearing in the October 11 issue of the Daily Business Review.  In his article, Mr. Schneider outlines how the America Invents Act now allows profits to go to the first to file for a patent rather than the first to invent the idea.  Now, someone who files for a patent is protected from legal action from the person or company who had the idea first but filed second.  To read Mr. Schneider’s commentary, please click here. The Daily Business Review is the primary source of legal, real estate and financial information for South Florida lawyers and business professionals who engage in deal making, client development and business negotiations.

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Top Ten Questions Answered on Bahamas-Based Investment Funds

1. Do the laws of The Bahamas require investment funds to be regulated?

A fund which satisfies the definition of an investment fund under the Investment Funds Act, 2003 (the “IFA”) shall not carry on or attempt to carry on business unless it licensed or registered under the IFA. A regulated investment fund is therefore one which is licensed or registered under the IFA.

2. Who is responsible for the regulation and administration of the IFA and of investment funds?

The Securities Commission of The Bahamas (the “Commission”) is responsible for regulating investment funds and for maintaining a general review of the operations of investment funds and parties related to investment funds in The Bahamas.

For the full article, please click here.


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Healthcare Alert: Technical component grandfather provision

The grandfather provision for technical component of anatomic pathology services provided to Medicare inpatients and outpatients of “covered” hospitals is scheduled to sunset on December 31, 2011.  This grandfather provision permits an independent laboratory to bill the Medicare Part B carrier for technical component of anatomic pathology services provided to Medicare inpatients and outpatients of a hospital that outsourced its technical component of anatomic pathology services as of July 22, 1999 to an independent laboratory under an arrangement pursuant to which the independent laboratory billed the Medicare Part B carrier directly for such outsourced services.
Without Congressional intervention, this grandfather provision will end at the end of this year, and independent laboratories will no longer be able to bill their Medicare Part B carriers for the technical component of anatomic pathology services provided to the Medicare inpatients and outpatients of these covered hospitals.  Rather, the laboratories will be required to bill the hospitals.  The hospitals will not receive any additional payments for such services for Medicare inpatients, although the hospitals will be able to bill for the outpatient technical component services under the Medicare outpatient prospective payment system.
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California Court of Appeal May Get An Opportunity To Rule On Constitutionality Of PAGA

by Michael Kun

As we have mentioned previously on thisblog, the latest wave of wage-hour class actions to hit California employers is based on a claim that employees were not provided “suitable seating” under an obscure provision of California’s Wage Orders.  To avoid having these cases removed to federal court,and to avoid the burden of establishing the elements for class certification, many plaintiffs’ counsel have taken to filing these lawsuits not as class actions, but as representative actions under California’s Private Attorneys General Act (“PAGA”).

PAGA — sometimes referred to as the “Bounty Hunter Law” or the “Sue Your Boss Law” — allows a single employee to pursue claims on behalf of all “aggrieved employees,” with potential recovery of up to $100 per employee for the first violation and $200 per employee for each subsequent violation.  The potential recovery can be enormous, and a plaintiff need not certify a class.

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The Miami office of McDonald Hopkins law firm expands, adding intellectual property attorney Amy Spagnole

Miami, Florida, (October 20, 2011) – Amy B. Spagnole has joined McDonald Hopkins LLC as Of Counsel in the Intellectual Property Practice of the business advisory and advocacy law firm.  She is based in the firm’s Miami office, which opened in April 2011 and is the firm’s second office in Florida.  Spagnole has extensive experience in strategic portfolio development, protection and enforcement of trademarks, copyrights and domain names, merchandise licensing, and e-commerce transactions.

Representing clients across a broad range of industries, Spagnole develops cost-effective intellectual property registration and protection strategies designed to maximize the return on investment related to brand management. During her career, Spagnole has served as a partner in a prominent New England law firm and was the vice president and general counsel for a sports entertainment company. She has also served as an adjunct faculty member at Suffolk University Law School.

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NLRB Finds Facebook Posting Termination Lawful, but Unrelated Handbook Policies Overly Broad

by Anna A. Cohen

On September 28, 2011, a National Labor Relations Board (“NLRB”) administrative law judge (ALJ) found that Knauz BMW lawfully terminated the employment of Robert Becker, a salesperson, after he posted pictures and comments on his Facebook page about two different workplace incidents — an automobile accident and a dealership sales event.  The judge also found that several Employee Handbook policies, unrelated to social media postings, contained overly broad language.  Karl Knauz Motors, Inc. d/b/a Knauz BMW and Robert Becker, Case No. 13-CA-46452 (Sept. 28, 2011).

The first incident Becker posted on his Facebook page concerned an accident at a Land Rover dealership also owned by Knauz on an adjacent property.  Becker posted pictures of the accident, as well as comments such as “This is your car:  This is your car on drugs.”  The same day, Becker also posted pictures of a dealership sales event.  Becker and other salespersons disagreed with the General Sales Manager’s choice of food and beverages for the event, including hot dogs and chips.  Becker posted pictures of the other salespersons with the food and beverages, as well as several comments on his Facebook page, such as:

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For many years, the Federal Trade Commission (FTC) has required that sellers who solicit buyers to order merchandise through mail or telephone have a reasonable basis to expect that they can ship ordered merchandise within the time frame they advertise or, if they do not specify a time frame, within 30 days.

When a seller cannot ship within the promised time, the FTC’s Mail or Telephone Order Merchandise Rule (the Rule) also requires that the seller either obtain the buyer’s consent to the shipping delay or refund payment for the unshipped merchandise.

Click here to read the full alert >>

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IRS Announces Voluntary Classification Settlement Program

by Dean L. Silverberg, Jeffrey M. Landes, Susan Gross Sholinsky, and Jennifer A. Goldman

On September 21, 2011, the Internal Revenue Service (“IRS”) announced a new program that will give businesses the opportunity to resolve prior worker classification issues by voluntarily reclassifying their non-employee workers (such as consultants, freelancers, and independent contractors) as employees for federal employment tax purposes. Officially called the “Voluntary Classification Settlement Program” (“VCSP”), this program is part of a larger “Fresh Start” initiative at the IRS to aid taxpayers and businesses in addressing their federal tax liabilities.

Read the full advisory online

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