The past several weeks have seen significant rulings related to policies promulgated by the US Department of Labor and the National Labor Relations Board (“NLRB”). Each has been very active in issuing new regulations and initiating enforcement actions against employers on behalf of employees.
During the first term of President Obama’s administration, the Department of Labor issued new regulations related to the Fair Labor Standards Act (“FLSA”). The FLSA sets forth guidelines for overtime pay, minimum wage, youth employment and record keeping responsibilities for each. Previous administrations interpreted FLSA’s exemption for automobile and vessel salespeople to encompass service advisors; meaning businesses were not obligated to pay minimum wage to these employees. In 2011 the Department of Labor revised the regulations related to the salesperson exemption so that service advisors were no longer considered exempt from the minimum wage requirements of FLSA. Recently the Department of Labor lost two challenges to its determination regarding service advisors in state and federal court. Until the Department of Labor, Congress or the Supreme Court acts to clarify how the FLSA pertains to service advisors, you can expect similar challenges throughout the United States.
The NLRB, an agency created during President Roosevelt’s “New Deal,” has greatly expanded the scope of its area of enforcement to specifically target employee terminations based on violations of their employers’ written social media policies. It is worth noting that the NLRA does not speak to policies regarding social media use by employees. Nevertheless, the NLRB has used the NLRA as a tool to strike down policies that it finds disagreeable to the statute’s overall purpose. In several cases, the NLRB invalidated employers’ social media policies that they believed infringed upon the rights of employees to discuss wages and working conditions with co-workers as codified under the National Labor Relations Act (“NLRA”). In particular, the NLRB recently held that an employer wrongfully terminated employees for harassing a fellow employee over poor job performance because, in effect, the dismissed employees were using social media websites to discuss wages and working conditions with the employee who claimed harassment. The employer relied upon anti-harassment language contained in its social media policy to terminate the employees because the alleged harassment occurred on Facebook’s website. It seems that certain kinds of communication may trump anti-harassment policies in place at your dealership when the communication may fall under those protected by the NLRA.
Each of the decisions shows the willingness of these federal entities to aggressively enforce what they believe falls within the scope of their power. Until Congress, the Department of Labor, or the Supreme Court moves to clarify whether service advisors are exempt from minimum wage requirements under FLSA, you should expect to see confusion in the labor market and more legal challenges. This confusion will likely plague the states’ administrative entities responsible for wage and labor issues since many of them adopt the Department of Labor’s regulations in whole. In terms of the recent action by the NLRA, you should review your social media policy to see if it is written too broadly so as to infringe upon the workers’ rights protected by the NLRA. If they are, you should consider revising them. Both of the instances described above demonstrate how important it is for you to keep abreast of current and proposed regulations and changes in the law and adapt your business’s processes accordingly.