December 2011 Archives

December 26, 2011

Whistle-blowing Case filed by Two Terminated Employees in Kentucky

Two women formerly employed by the city of Corydon in Kentucky, Gloria Mills and Jenna Kavanaugh, have filed a whistleblower suit against the city and its mayor, Larry Thurby. The suit alleges that they were wrongfully terminated for questioning some discrepancies they found in the city's accounting. When they brought the matter to Mayor Thurby's attention, he allegedly told them to keep quiet about what they had found. Neither of the women felt comfortable with keeping the information to themselves, so they notified Kentucky State Police who investigated the matter. Both women were terminated in July, supposedly for claiming they worked more hours than they did.

A state auditor's report in February showed that $81,000 of city money was missing. The Corydon city sewer clerk was terminated and indicted in September for theft of over $10,000. She faces up to five to ten years in prison if convicted. It would appear that Ms. Mills' and Ms. Kavanaugh's feelings that something illegal was occurring were accurate.

The Kentucky Whistleblower Act is labeled as KRS 61.102 and states "No employer shall subject to reprisal, or directly or indirectly use, or threaten to use, any official authority or influence, in any manner whatsoever, which tends to discourage, restrain, depress, dissuade, deter, prevent, interfere with, coerce, or discriminate against any employee who in good faith reports, discloses, divulges, or otherwise brings to the attention of...any...appropriate body or authority, any facts or information relative to an actual or suspected violation of any law, statute, executive order, administrative regulation, mandate, rule, or ordinance of the United States, the Commonwealth of Kentucky, or any of its political subdivisions, or any facts or information relative to actual or suspected mismanagement, waste, fraud, abuse of authority, or a substantial and specific danger to public health or safety. No employer shall require any employee to give notice prior to making such a report, disclosure, or divulgence."

What this means is that an employee should be able to report to an appropriate party anything that seems illegal or dangerous at the place of employment without the threat of being fired or somehow retaliated against by the employer. The act goes on to say that it does not allow employees to leave their place of employment during work without following the proper protocol and that employers still have the right to request information regarding what the employees have reported. Employees that knowingly report false or confidential information can face disciplinary action from their employer.

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December 15, 2011

Kentucky Employees to Receive Overtime Pay Due from Sullivan University

In a dispute that dates back to 1994, Kentucky employees of the Sullivan University System have been asking for overtime wages they feel they were denied. The employees are current and past high school representatives and admissions officers that present information regarding the university system to high school students. The U.S. Department of Labor was first alerted to the issue in 1994, but there was no legal action taken at the time. The Labor Department began reviewing the case again in 2007 and a lawsuit was filed in 2010. Sullivan has agreed to settle with about 150 employees by paying them overtime owed from 2007 to the present.

The Fair Labor Standards Act, or FLSA, addresses minimum wage and overtime standards for most private and public workers in the United States. It is enforced by the U.S. Department of Labor. According to FLSA, employees that work over 40 hours during a workweek are entitled to one-and-a-half times their pay for every extra hour worked. Workweeks can start on any day of the week, but must consist of seven consecutive days. The hours of two or more workweeks cannot be averaged to avoid overtime pay even if the employee is paid on a bi-weekly basis. The Sullivan employees worked an average of 2.2 hours of overtime each week, so they should have received one-and-a-half times their pay for those extra hours.

Sullivan University Systems claimed the employees involved in the lawsuit were exempt, which means they were not covered by the overtime portion of FLSA. Most companies that make less than $500,000 per year are not required to pay overtime, but schools of all types, including "institutions of higher education" must pay overtime regardless of their annual income. Certain types of employees are exempt from receiving overtime according to FLSA, a complete copy of which can be found on the U.S. Department of Labor website. Examples include executives, outside salespeople, certain professionals, newspaper delivery people, babysitters, workers on small farms, and people employed at sea. An attorney for Sullivan said the employees were treated as professionals, and were paid well, but the school agreed to re-classify them as non-exempt as part of the settlement. They will now be required to clock in and out and their base pay will be reduced to compensate for the overtime they receive, making their earnings the same.

The employees involved in the suit also claimed that proper records of their hours were not kept. According to Kentucky wage and hour laws,

Every employer subject to the provisions of the Kentucky Minimum Wage Law shall make and preserve records containing the following information:
(a) Name, address, and Social Security Number of each employee;
(b) Hours worked each day and each week by each employee;
(c) Regular hourly rate of pay;
(d) Overtime hourly rate of pay for hours in excess of forty hours in a workweek;
(e) Additions to cash wages at cost, or deductions (meals, board, lodging, etc.) from stipulated wages in the amount deducted, or at cost of the item for which deductions are made;
(f) Total wages paid for each workweek and date of payment.
These records do not need to be kept in a specific format, but employers must retain them for at least one year. Requiring the employees to clock in and out will at least provide Sullivan an accurate record of the hours worked by each employee.

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December 8, 2011

How Passage of a "Right-to-Work" Bill Would Affect Indiana Employees

As the Indiana legislature enters its final session for 2011, Republicans vowed to make their "right-to-work" bill the main focus of the session. This topic is very controversial and caused Democrats to leave the state for five weeks earlier this year to avoid voting on the issue. Both parties have differing views on whether or not it would be beneficial to Indiana employees to have their state become the twenty-third "right-to-work" state.

"Right-to-work" laws are passed on a state-per-state basis and allow individuals to be employed by a company that has union workers without joining the union. Members can opt out of paying membership dues but still reap the benefits of being part of a union. This option was given to each state in the U.S. by a portion the Taft-Hartley Act that essentially gives the states the power to decide whether employers can require employees to financially support the union. Non "right-to-work" states, such as Kentucky and Indiana can have so-called "union shops," or companies that require their employees to be union members and pay dues. Recently hired employees that are not union members have a set period of time to become members; otherwise they may forfeit their employment.

Supporters of the legislation believe potential Indiana jobs are being lost because employers prefer basing their businesses in "right-to-work" states that give employees the choice of joining unions. Gov. Mitch Daniels stated "We miss about a third of the opportunities because businesses want a state where this protection is provided to workers. In this tough economy, the state needs every edge it can get." Some employees object to paying dues to a union that may support political agendas that conflict with their own personal political beliefs. Others may not wish to join a union for personal reasons. In non "right-to-work" states, potential employees are denied this choice if they consider jobs at companies that require union membership and union financial support.

Opponents of "right-to-work" laws often call them "right-to-work-for-less" laws because they feel a union is weakened when all employees are not required to participate or contribute. Employees that do not pay dues are still allowed to use union services, including legal representation, which many feel takes away money that should be used to represent dues-paying union members seeking higher wages and improved workplace safety.

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December 1, 2011

Proposed Changes to Age Discrimination Law Approved by EEOC

On November 16, 2011 the Equal Employment Opportunity Commission (EEOC) approved proposed changes to the 1967 Age Discrimination in Employment Act (ADEA), which protects employees over the age of 40. The proposed changes will now be sent to the Office of Management and Budget (OMB) at the White House. If the OMB approves the changes, they will be returned to the EEOC for final approval. The proposed changes are in response to recent Supreme Court cases regarding disparate impact claims and "reasonable factors other than age" (RFOA) defenses.

Disparate impact occurs when an employer's actions affect a protected class inadvertently. These claims frequently arise from staff-reduction cuts or the implementation of new compensation programs. While the discrimination is not intentional, a protected group is negatively affected by the decision. In response to disparate impact claims related to age, employers often use the "reasonable factors other than age" defense, stating the changes made were not based on age, but were made for other reasons. In this proposed amendment, the EEOC gives guidelines regarding whether or not a factor is reasonable and if the factor was based on something other than age.

To test reasonableness, the EEOC lists the following factors:

  • whether the employment practice and the manner of its implementation are common business practices;
  • the extent to which the factor is related to the employer's stated business goal;
  • the extent to which the employer took steps to define the factor accurately and to apply the factor fairly and accurately (e.g., training, guidance, instruction of managers);
  • the extent to which the employer took steps to assess the adverse impact of its employment practice on older workers;
  • the severity of the harm to individuals within the protected age group, in terms of both the degree of injury and the numbers of persons adversely affected, and the extent to which the employer took preventive or corrective steps to minimize the severity of the harm, in light of the burden of undertaking such steps; and
  • whether other options were available and the reasons the employer selected the option it did.

Whether or not a decision was based on something other than age can be checked by the following:

  • the extent to which the employer gave supervisors unchecked discretion to assess employees subjectively;
  • the extent to which supervisors were asked to evaluate employees based on factors known to be subject to age-based stereotypes; and
  • the extent to which supervisors were given guidance or training about how to apply the factors and avoid discrimination.

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