Public accountability exception to the FLSA for “ghost employment”

Public accountability exception to the FLSA for “ghost employment”

Demos v City of Indianapolis, CA7, 302 F3d 698.

Alan L. Demos, an administrative employee, and Ronald Graham, a city executive, sued the City of Indianapolis claiming they were denied overtime pay and vacation time credits to which they alleged they were entitled under the Fair Labor Standards Act, 29 USC 201-219.

Demos and Graham contended that because the City's policy required that their pay be docked if they failed to work an eight-hour day, they were not salaried employees within the meaning of the Act. The district court rejected their argument, and the Circuit Court, Seventh Circuit, affirmed the lower court's ruling.

The reason given by the Circuit Court for holding that both Demos and Graham were not entitled to overtime compensation under the FLSA: they were excluded from the Act's coverage under to the Department of Labor's public accountability exception to its no docking of pay rule.

Persons who are employed "in a bona fide executive, administrative, or professional capacity" are exempt from the Act's overtime provisions. However, Department of Labor rules provided that if an employee's salary is docked for partial day absences, it is presumed that the employee is not paid on a salary basis and thus covered by FLSA.

Because some public jurisdictions are required by law to make payroll deductions in the event the individual is absent from work without charge to leave credits, the Department of Labor developed a regulation -- referred to as the public-accountability rule -- allowing government employers to dock an executive, administrative or professional employees salary if the docking is pursuant to a "system of public accountability." The regulations provides that:

An employee of a public agency . . . shall not be disqualified from exemption . . . on the basis that such employee is paid according to a pay system established by statute, ordinance, or regulation, or by a policy or practice established pursuant to principles of public accountability, under which the employee accrues personal leave and sick leave and which requires the public agency employee's pay to be reduced or such employee to be placed on leave without pay for absences for personal reasons or because of illness for not less than one workday when accrued leave is not used by an employee because accrued leave has been exhausted; or the employee chooses to use leave without pay.

Here the City cited Indiana's "Ghost Employment Statute,"* contending that the statute makes it publicly accountable for preventing non-working employees who do not request, or who are denied, leave time from receiving compensation.

In addition, the City argued that its Code of Ethics prevents it from paying employees for not working during a regularly scheduled workday, which, said the court, "is evidence of its public accountability."

* Indiana Code 35-44-2-4 provides that "a person employed by a governmental entity who, knowing that he has not been assigned any duties to perform for the entity, accepts property from the entity commits ghost employment, a Class D felony."

Sexual harassment and discrimination

Sexual harassment and discrimination

Robertson v Nassau County, NYS Supreme Court, Justice Lally [Not selected for publication in the Official Reports]

An individual alleges that he or she was the victim of unlawful discrimination at work. The Robertson decision sets out the basic requirements that the employee must satisfy in order to successfully sue an employer for alleged sex discrimination or harassment.

Citing the Court of Appeals' ruling in Totem Taxi v State Human Rights Appeal Board, 65 NY2d 300, Justice Lally said that although Section 296 of the Executive Law provides that it is an unlawful discriminatory practice for an employer, because of the sex of any individual, to discriminate against such individual in compensation or in terms, conditions or privileges of employment, the "employer cannot be held liable for an employee's discriminatory acts unless the employer becomes a party to it by encouraging, condoning, or approving it".

Robertson, a Nassau County Civilian Communications Operator was relived of her radio dispatch duties. She then complained that such action constituted discrimination against her solely because of her gender and that she has been forced to work in a hostile work environment where she has suffered sexual harassment.

As examples of employer discrimination and harassment because of her gender, Robertson alleged that she had been:

1. Falsely accused of incompetence;

2. Improperly charged with lacking required certifications;

3. Given assignments in contravention of her seniority;

4. Denied training and overtime opportunities;

5. Verbally abused by her superior, Sergeant O'Shea;

6. Subjected to surveillance during her breaks;

7. Had her work station relocated against her wishes; and

8. Had not been allowed to have coffee at her workstation.

Nassau asked the court to dismiss Robertson's complaint, contending that there was no evidence any of the events described by Robertson "had anything to do with [her] gender" nor was there any evidence indicating any hostile work environment or sexual harassment.

Justice Lally pointed out that in order to establish a claim of gender-based discrimination, Robertson had to show that she was discriminated against with regard to compensation, terms, conditions or privileges of employment based upon her gender under circumstances that give rise to an inference of unlawful discrimination. Here, however, the court said that "[t]here is no evidence to support [Robertson's] complaint that she was mistreated on account of her gender."

Further, Justice Lally commented that even assuming that Robertson's allegations were sufficient to establish a prima facie case of gender bias, Nassau County had set out a valid reason for relieving Robertson of her radio dispatch duties.

According to the ruling, the County's action was justified because Robertson had withheld important information from supervisors "by both personally judging its importance and because she viewed some of her supervisors as inexperienced and not worthy of being kept informed."

Further, said the court, although Robertson complained that she was discriminated against because of her gender "in that she was monitored, watched, followed and yelled at" by Sergeant O'Shea, she failed to show that his conduct towards her was related to her gender.

Justice Lilly noted that "Sergeant O'Shea monitored all operators' calls and that, as a supervisor, it was his responsibility to do so." As to Robertson's complaint that she was prevented from having food and/or drink at her workstation, the Court said that this reflected Police Department policy rather than a limitation uniquely applied to her. Commenting on Robertson's sexually hostile work environment claim, the court said that to survive summary judgment, Robertson had to show that:

1. She is a member of a protected class;

2. The conduct or words upon which her claim of sexual harassment is predicated were unwelcome;

3. The conduct or words were promoted simply because of her gender;

4. The conduct or words created a hostile work environment which affected term, condition or privilege of her employment; and

5. Nassau County is vicariously liable for such conduct because it condoned such conduct by its supervisory employees.

Again, said the court, Robertson failed to meet this burden, concluding that "[t]here is no evidence at all that the alleged mistreatment [of Robertson] by Sergeant O'Shea, even if characterized as hostile, was prompted by [Robertson's] sex and therefore, the conduct cannot be characterized as discriminatory under the law."

Lawyers and blogging

Lawyers and blogging

Source: Washington Post

Attorneys and law firms that maintain blogs might find the article by Catherine Ho published in The Washington Post on October 9, 2011, of interest. Ms.Ho's lead sentence: “Virginia lawyers who blog about their cases, beware: the state bar may come after you for inappropriate advertising.”.

The item is posted on the Internet at:

http://www.washingtonpost.com/business/capitalbusiness/virginia-state-bars-crackdown-on-lawyers-blog-raises-questions/2011/10/03/gIQAYsufYL_story.html

Why the Law Is So Perverse by Professor Leo Katz -- a NYPPL book review

Why the Law Is So Perverse by Professor Leo Katz -- a NYPPL book review

Published by the Chicago University Press - http://press.uchicago.edu/ucp/books/book/chicago/W/bo11518130.html

From time to time a ruling is handed down by a judicial or a quasi-judicial panel that may be characterized as a decision in search of an opinion because of the diverse views expressed by the judges explaining their rationale for their conclusions. Indeed, it may be necessary to create a Venn diagram -- a schematic diagram used in logic theory to depict collections of sets and represent their relationships -- to understand what some might term the paradoxes in the decision.

In his most recent book, Why the Law Is So Perverse, Professor Leo Katz, Frank Carano Professor of Law at the University of Pennsylvania Law School, considers a variety of interesting approaches to determining “the law of the case” or perhaps more accurately, what are the elements in play that result in “the law of the case.”

The titles of a number of the book's chapters such as “Why Does the Law Spurn Win-Win Transactions?” and "Things We Can’t Consent To, Though No One Knows Why", illustrate the types of conundrums or paradoxes in the law that Professor Katz addresses. Other chapters discuss such issues as “Why Is the Law So Full of Loopholes?” and “Why Is the Law So Either/Or?”

Using examples involving a variety of areas of the law including criminal law, election law and property law, leavened by ethical and societal considerations, Professor Katz sets out intriguing examples of “what is” and suggests alternative views as to “what could be” or, possibly, “what should be.”

The first line in Professor Katz’s introduction to this work sets the tone when he states that There are ideas that are preposterous on their face, and yet one is hard pressed to say why. This book is about such ideas.

The following excerpt provides a taste of what the reader will encounter in exploring this volume:

The criminal code contains a long list of specific offenses (murder, theft, rape, etc.) as well as a separate list of defenses (self-defense, insanity, etc.). This kind of division into offenses and defenses is characteristic of most areas of law. Usually the prosecutor, or the plaintiff, has the burden of proving that the defendant is guilty of the offense, and it then falls to the defendant to show that he was acting in self-defense or out of insanity or whatever. Now, one might wonder why things are set up that way. One might for instance define murder not as it currently is, as an intentional killing, but as an intentional killing other than in self-defense or while insane. One might then require the prosecution to make the case not merely that the defendant killed intentionally but that he was not acting in self-defense and that he was sane.

Professor Katz explains: This, then, is the groove into which I will be stepping, the perspective from which I will be proceeding—legal doctrines thought of as instances of multicriterial decision making.

This concise work is thought provoking and provides the reader with insights that both the law professional and the interested layperson will find illuminating and, perhaps, trigger considering approaches to the legal issue at hand that an advocate could use in analyzing and then arguing, or defending, his or her position or rebutting his or her opponent's arguments.

In essence, Professor Katz challenges the reader to think about what is often accepted as “black letter law” and ask him or herself to identify the true issues and the ethical considerations involved and consider the existence of an alternative theory that demands evaluation. In other words, Professor Katz invites his readers to think outside the box.

Why the Law Is So Perverse, 250 pages, may be ordered from the University of Chicago Press, http://press.uchicago.edu/ucp/books/book/chicago/W/bo11518130.html and is available as a hard cover book or as an e-book.

Reviewed by Harvey Randall
Editor and General Counsel, NYPPL

Termination of an individual serving a disciplinary probationary period controlled by the terms of the stipulation providing for the disciplinary probation

Termination of an individual serving a disciplinary probationary period controlled by the terms of the stipulation providing for the disciplinary probation

Matter of Unified Court Sys. of the State of N.Y. v New York State Ct. Clerks Assoc., 2006 NY Slip Op 30641(U), [Not selected for publication in the Official Reports]

The issue before Judge Lippmann: may a union bring a contract grievance over the alleged breach of a stipulation setting a disciplinary action entered into by the parties after negotiations based on the union's collective bargaining agreement as distinguished from an alleged breach of the collective bargaining agreement itself is to be made by this court or by the arbitrator.

The stipulation provided for a disciplinary probation and thus the employee could be terminated without a hearing or any of the other procedural safeguards afforded by Article 24 of his collective bargaining agreement if he breached any of the limitations set out in the stipulation.

When the employee was summarily terminated without notice without specifying which of the several limitations he had breached, the union filed a contract grievance contending that the summary termination without notice "plainly breached both the spirit and the express terms of the stipulation,” claiming that the employee “had not violated the terms of the stipulation. The grievance was denied and the union demanded arbitration.

The Unified Court System filed an Article 75 petition seeking to stay arbitration, arguing that “under applicable law and court rules it had every right to fire [the employee], a probationary employee, as it did, and that the underlying grievance was not a contract dispute but rather a disciplinary matter affecting only one union member, whose only proper avenue of redress was to bring an Article 78 proceeding.”

Judge Lippmann said that it was well established that generally, "[absent a statute or rule to the contrary, a probationary employee may be discharged without a hearing and without a statement of reasons," provided there was no showing that the termination was for a constitutionally impermissible purpose, in bad faith, or in violation of law. [see Reynolds v. Crossou, 183 AD2d 48.]

However, said the court, although the dubbed a probationary employee, here the individual is not a probationer in this class nor subject to those legal tenets. Rather his status as a probationary employee stems solely from the stipulation, rather than from the normal course of the hiring process, thereby limiting the Court System's right to terminate him.

After exploring the several arguments made by the parties, Judge Lippmann denied the Unified Court System’s application for a stay of arbitration and granted the union’s cross-motion seeking arbitration as provided for in the collective bargaining agreement.

Significantly, UCS did not identify the reason or reasons leading to summarily terminate the individual. Judge Lippmann said that to the extent that the employee “could have brought an Article 78 proceeding challenging the factual determination “ underlying his termination, such an action was “an impossibility since … at no time was [the individual] formally notified of the reason for his termination.

The seminal case addressing disciplinary probation issue presented to Judge Lippmann is Taylor v Cass, 122 A.D.2d 885, 505 NYS2d 929. Taylor, a Suffolk County employee, won reinstatement with full retroactive salary and contract benefits after the court found that he was improperly dismissed while serving a disciplinary probation.

The terms of his probation provided that Taylor could be terminated without any hearing if, in the opinion of his superior, his job performance was “adversely affected” by his “intoxication on the job” during the next six months.

Taylor, however, was subsequently summarily terminated without a hearing for “failing to give a fair day’s work” and “sleeping during scheduled working hours.”

The Appellate Division said the dismissal was improper because Taylor was not terminated for the sole reason specified in the earlier settlement: -- intoxication on the job.