Workforce Bulletin

By John F. Fullerton III

At the Firm’s 32^nd Annual Client Briefing held yesterday, I spoke on the financial services industry panel about the Dodd-Frank bounty program and the whistleblower anti-retaliation provisions of both the Dodd-Frank and Sarbanes-Oxley Acts.  Here are a few takeaways from that session:

• There have been at least three reported awards from the SEC to anonymous tipsters under the Dodd-Frank bounty program, the most recent of which, earlier this month, was an award of $14 million to a whistleblower whose information led to the recovery of “substantial ...

By Alaap Shah and Marshall Jackson

Data is going digital, devices are going mobile, and technology is revolutionizing how companies operate. It seems to be business as usual, as your hospitality company continues to collect, use and transmit large amounts of sensitive data to operate the business. You have even taken measures to help guard against the “typical” risks such as lost laptops, thumb drives and other electronic devices. However, unbeknownst to you, hackers sit in front of their computers looking for ways into your network so that they may surreptitiously peruse ...

By: Alaap Shah and Marshall Jackson

Data is going digital, devices are going mobile, and technology is revolutionizing how companies operate. It seems to be business as usual, as your hospitality company continues to collect, use and transmit large amounts of sensitive data to operate the business. You have even taken measures to help guard against the “typical” risks such as lost laptops, thumb drives and other electronic devices. However, unbeknownst to you, hackers sit in front of their computers looking for ways into your network so that they may surreptitiously peruse ...

By: Andrew J. Sommer

San Francisco has just become the first municipality in the country to pass a law providing working parents and caregivers the “right to request” flexible or predictable work schedules. The law, which will take effect on January 1, 2014, applies to employers with 20 or more employees within the City of San Francisco.  Known as the Family Friendly Workplace Ordinance, the new law allows San Francisco-based employees, after completing six months of employment, to request a flexible or predictable working arrangement so that they can assist with caregiving ...

By: Andrew J. Sommer

San Francisco has just become the first municipality in the country to pass a law providing working parents and caregivers the “right to request” flexible or predictable work schedules. The law, which will take effect on January 1, 2014, applies to employers with 20 or more employees within the City of San Francisco. Known as the Family Friendly Workplace Ordinance, the new law allows San Francisco-based employees, after completing six months of employment, to request a flexible or predictable working arrangement so that they can assist with caregiving ...

By: Andrew J. Sommer

San Francisco has just become the first municipality in the country to pass a law providing working parents and caregivers the “right to request” flexible or predictable work schedules. The law, which will take effect on January 1, 2014, applies to employers with 20 or more employees within the City of San Francisco. Known as the Family Friendly Workplace Ordinance, the new law allows San Francisco-based employees, after completing six months of employment, to request a flexible or predictable working arrangement so that they can assist with caregiving ...

By Eric J. Conn, Head of EBG's national OSHA Practice Group

We have written extensively about problems with OSHA's controversial Severe Violator Enforcement Program (SVEP) here on the OSHA Law Update blog.  If the leadership team in the national office of OSHA invited us to sit down with them to ask questions on behalf of Industry about some of these problems with the SVEP, here is what we would ask them:

1. As one would expect for a program designed for recidivists, the punitive elements of the SVEP are significant, including: (a) inflammatory public press releases branding the employer as a severe violator; (b) adding the employer’s name to a public log of Severe Violators; (c) mandatory follow-up inspections at the cited facilities; (d) conducting numerous inspections (up to ten) at sister facilities within the same corporate enterprise; and (e) demanding enhanced terms in settlements (such as corporate-wide abatement, requiring the employer to hire third party auditors to report findings to OSHA, etc.).  However, with the consequences of “qualifying” into SVEP being so, well, severe, how does OSHA justify the fact that the Agency qualifies employers into SVEP before final disposition of the underlying citations?  In other words, how is it lawful, Constitutional, or just plain fair that employers should face these harsh punishments before OSHA has proven that the employer violated the law at all, let alone in the egregious ways that qualify them for SVEP?  For more details about this concern, check out our article regarding the legal and constitutional implications of this premature qualification into SVEP.
2. For more than two years after OSHA launched the SVEP, the Directive for the Program did not include any explanation for how employers could get out once they officially qualified.  When OSHA’s leadership team was asked about this at conferences and meetings, they similarly could not or would not offer any guidance.  The SVEP was quite literally a roach motel; you could check in, but you could never leave.  After much clamoring from industry representatives, earlier this year, OSHA finally publicized a set of so-called SVEP exit criteria.  In short, SVEP employers may get out of the Program if they: (a) pay all the final civil penalties; (b) address all of the abatement required by the citations or settlement; (c) address any other terms of the settlement; (d) make it three full calendar years after final disposition of the citations without receiving any related Serious violations; and (e) even if all of the above is accomplished, the employer may be released from SVEP by the undefined discretion of the OSHA Regional Administrator in the employer’s area.  Check out our earlier post on the OSHA Law Update blog about the SVEP exit criteria.  As relieved as Industry was to see OSHA announce some exit criteria for getting out of SVEP, the specific exit criteria identified by OSHA raise many questions about fairness and reasonableness.  For example, the clock for the three-year “probation/exit period” does not start until “final disposition” of the underlying citations, as opposed to when OSHA qualifies employers into the Program (i.e., immediately upon issuance of the citations).  My questions for OSHA about the SVEP exit criteria would be, how does OSHA reconcile the timing for exit against the timing for qualification?  Why does the start of the exit clock wait for final disposition, but OSHA does not wait for final disposition to dump employers into the Program to begin with?  Also, what criteria or factors will the Regional Administrators consider when exercising their undefined discretion in deciding whether to let employers out of SVEP?
3. Also relevant to OSHA’s SVEP exit criteria, if an employer has a good faith disagreement with OSHA about the basis for the qualifying citation(s), and decides to contest the citations through the formal process provided by the OSH Act, that process can take several years.  Therefore, if the employer contests the citations, and that contest takes two years, and at the end of that two year contest process, the citation package is cut dramatically by an ALJ, but there still remains one SVEP-qualifying citation on the books, that employer’s exit/probation period will be at least 5 years instead of 3.  Hasn’t the employer been punished for exercising his right to contest citations?  Put another way, doesn’t three-years from final disposition exit criteria discourage employers from exercising their right to challenge OSHA’s citations?

By John F. Fullerton III

A New York federal district court has become the second court to hold that the Dodd-Frank anti-retaliation provision, 15 U.S.C. § 78u-6(h)(1)(a), which prohibits retaliation against a whistleblower who makes disclosures required or protected by the Sarbanes-Oxley Act, among other laws, does not apply extraterritorially.  In Meng-Lin Liu v. Siemens A.G. (pdf), a judge of the Southern District of New York, consistent with a decision earlier this year by a Texas district court, held that a Taiwanese compliance officer working for a Chinese subsidiary of a ...

Our colleagues Kara Maciel and Jordan Schwartz, both of Epstein Becker Green, recently cowrote an article for PLC titled "Tipped Employees Under the FLSA."

Following is an excerpt:

Wage and hour lawsuits certainly are not new phenomena, but in recent years, service industry employees have increasingly made claims regarding tips and service charges. In particular, employers in states such as Massachusetts, New York and California have seen a surge in class actions involving compulsory tip pools and distributions of service charges to employees. Commonly targeted employers ...

By:  Kara M. Maciel

The following is a selection from the Firm's October Take 5 Views You Can Use which discusses recent developments in wage hour law affecting the hospitality industry.

IRS Will Begin Taxing a Restaurant’s Automatic Gratuities as Service Charges

Many restaurants include automatic gratuities on the checks of guests with large parties to ensure that servers get fair tips. This method allows the restaurant to calculate an amount into the total bill, but it takes away a customer’s discretion in choosing whether and/or how much to tip the server. As a result of this ...