Implications of the Recent Retail Wage Increases

Recently, Wal-Mart announced its decision to raise the base wage of its employees.
Wal-Mart plans to increase wages for close to 40 percent of its workforce. As of April, workers will earn at least nine dollars an hour, which is $1.75 more than the federal minimum wage. Workers’ wages will increase to $10 per hour by February 2016. According to a Washington Post article, Wal-Mart is the nation’s largest employer.

Several days later, another retail giant. TJX, mother company of TJ Maxx, Marshalls, and Home Goods announced it also was increasing retail workers’ base pay to nine dollars an hour. Forbes reports that this wage increase is in keeping with IKEA’s wage increase to more than $10 per hour in 2015 and also with Gap Inc. which also increased their workers’ base pay in 2014 and at the beginning of 2015.

We see a domino effect occurring in the retail industry that may carry over to other lines of work as well. What is obvious is that the retail business model is undergoing change. Part of the underlying reason may be that retail chain stores have to compete with online stores, such as Amazon.

Another factor may be that bad publicity. Despite advertising efforts to create good branding and trustworthy images, a negative public image can drive customers to leave retail stores and shop online instead. Consumers wonder why large conglomerates are not paying their workers well and do not want to support them. Also, as the economy improves and employment pools shrink, stores must raise wages to stay competitive with each other if they want to hire the better job candidates.

Stay on top of your business and consult with an employment lawyer who has extensive experience handling wages and hours disputes. Stephen Hans & Associates offers effective legal representation and has successfully defended employers for more than 20 years in employment litigation issues.

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Wal-Mart Hit by EEOC with Age and Disability Discrimination Suit

Sometimes hearing about a discrimination case is the best way for employers to understand potential liability.

People would expect a company the size of Wal-Mart to have anti-discrimination policies firmly in place, but even so, there are instances where managers fail to abide by the policies. The EEOC sued Wal-Mart on behalf of David Moorman based on age and disability discrimination. The lawsuit alleged that Moorman was subjected to frequent harassment by his direct supervisor who called him “old man” and “old food guy.” The store refused to make accommodations when Moorman was diagnosed with diabetes and upon his doctor’s advice requested reassignment to a store co-manager or assistant manager position. There was no discussion regarding his request, which was eventually rejected and he was terminated because of his age and disability.

Initially, Wal-Mart refused to settle during the EEOC’s pre-litigation conciliation process. However, when the EEOC then filed a lawsuit, negotiations ensued and Wal-Mart settled based on the following terms:
• Payment of $150,000 relief to Moorman
• Training for employees on the Age Discrimination in Employment Act (ADEA) and Americans with Disabilities Act (ADA)
• Training to include instruction on conduct that constitutes unlawful discrimination or harassment
• Training to include instruction on Wal-Mart’s procedures for handling reasonable ADA requests
• Compliance reports to the EEOC regarding the consent degree
• Notice posted to employees about the settlement

At the first sign of serious employment problems, it is wise to consult with an experienced employment litigation attorney. Stephen  D. Hans & Associates has represented small and mid-sized businesses for more than 20 years in issues involving employment disputes, including discrimination allegations.

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Religious Discrimination Case Goes before the Supreme Court

The nuances of religious discrimination and where responsibility falls now lies in the hands of the U.S. Supreme Court.

In the case EEOC v. Abercrombie & Fitch Stores, Inc., a Muslim woman named Samantha Elauf applied for a job at the retail store Abercrombie & Fitch. When applying for the position, she was wearing a black scarf over her head called a hijab, and consequently was not hired for the job. Her appearance did not fit the company’s dress code requirements. The EEOC sued based on religious discrimination.

Abercrombie & Fitch argued that Elauf made no statement that the head covering was part of her religious practice and for this reason the company was not liable for accommodating her religious beliefs. The EEOC argued that the company should have granted the applicant a religious exemption.

The focus of the issues being brought before the Supreme Court lies in whether the employer is liable when an applicant or employee does not inform the employer of the need for a religious exemption. Documents filed for her application did not state Elauf’s religion and the company instructs staff not to ask applicants about their religion. The black scarf violated the company’s dress code because workers were not allowed to wear hats at work and the color black did not receive a high rating when evaluating an applicant for “appearance and sense of style.” The company argues that the burden was on Elauf for not asking about the company’s dress codes or explaining her religious reason for wearing the head scarf.

The initial court ruling by a federal judge was in the EEOC’s favor and the subsequent US court of appeals ruled in Abercrombe & Fitch’s favor.

This is an important case for employers to follow so they become aware of the outcome and subsequently understand and incorporate the anti-discrimination guidelines decided by the U.S. Supreme Court into their company’s policies.

Stephen Hans & Associates represents companies involved in employment disputes and brings decades of experience to every case we handle.

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Do You Have to Pay On-Call Employees for Their Time On-Call?

When you hire certain employees for on-call services, questions often arise about wages and hours.

The Fair Labor Standards Act (FSLA) addresses the issue of on-call employees and when they get paid for their time along with when they do not.

Whether the employee has to stay on the work premises during the on-call work period influences whether the worker gets paid for the hours spent on call. The FLSA views the on-premises restriction as the determining factor that the worker must be paid. It does not matter whether the worker is reading a book, chatting on the phone or playing a video game. The factor of being required to stay on the premises takes priority.

Sometimes employees are on-call during their free time, but there are no restrictions that employees must abide by other than to be reachable by cell phone. The employees are fairly free to do what they want, whether it involves maintenance around the home, spending time with children or watching television. In this type of situation, the employer would not have to pay the employee for on-call hours. The exception would be when calls from the employer are so frequent that the employee really has no use of free time. Then, once again, you must pay the employee for the on-call hours.

Despite the standards set by the FLSA, various court cases have arisen that dispute on-call wages and hours. One noteworthy case was the Mendiola v. CPS Security Solutions, Inc.  heard by the Supreme Court in California that ordered California employers to pay for employees’ sleep time. Another case was Jones-Turner v. Yellow Enterprise Systems, LLC  where the district court ruled based on the FLSA and Kentucky law that employers did not have to pay ambulance workers for on-call meal times.

If you have questions about paying for time worked on-call, consult with one of our attorneys at Stephen Hans & Associates . Our firm has decades of experience assisting clients with litigation related to wages and hours laws.

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Are You an Independent or Joint Owner If You Own a Franchise Restaurant?

Author Stephen D. Hans

For more than thirty years, a line was drawn that differentiated a franchiser and franchisee. The relationship between the two served each other well. Entrepreneurs looking to start a business found security in the franchiser relationship. The franchiser protected the brand and the franchisee made daily business operations thrive.

A recent article in describes a National Labor Relations Board (NLRB) determination regarding McDonald’s and its franchisees. The NLRB’s determination goes against the decade long defining rule that distinguished franchisers from franchisees. Traditionally, franchisees were considered independent owners. For years the NLRB adhered to its standard, which stated:

“To establish joint employer status, there must be a showing that the employer meaningfully affects matters relating to the employment relationship such as hiring, firing, discipline, supervision and direction.”

In recent determinations the NLRB has found that the franchiser and franchisee are joint owners. Claims were brought against McDonald’s and the franchisees alleging on the part of both entities “discriminatory discipline, reductions in hours, discharges, and other coercive conduct directed at employees in response to union and protected concerted activities,”.

The result of this finding holds the franchiser responsible for the actions of the franchisee, which in the long term will probably make business less profitable for McDonald’s and therefore less attractive for franchisees. This major shift in NLRB policies favors unions in the ongoing conflicts between unions and independent business owners.

Another case, the International Brotherhood of Teamsters against Browning-Ferris Industries  also has been brought before the NLRB. In this issue, Browning-Ferris Industries urges that the NLRB uphold its standard of treating franchisees as independent owners. The outcome of this case will shed further light on the standard and the direction the NLRB is taking with its determinations.

Our attorneys at Stephen Hans & Associates have more than 20 years of experience representing small and mid-sized business in union-related issues.

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Are Your Dress Code and Grooming Policies Violating Discrimination Laws?

Companies have the right to expect employees to be neat in appearance and follow a company dress code. Some companies require short hair for men and no one gives it a second thought. Cut your hair or lose your job. In most cases, such policies do not violate discrimination laws.

However, a recent claim submitted to the Equal Employment Opportunity Commission (EEOC) against Mims Distributing Company challenged the company’s failure to hire a male Rastafarian who had not cut his hair since 2009. He belonged to a religious order that requires men to wear long hair. He applied for a delivery driver position in 2014 and was told to come back after he cut his hair. Even after explaining that his long hair was part of his religion, Mims said they could not hire him because he failed to comply with their company grooming policy.

Under Title VII of Civil Rights Act of 1964, employers must accommodate employees’ religious beliefs and the only allowable exception is if doing so creates undue hardship on the company. In this case, the EEOC failed to see that the company would suffer undue hardship and attempted to reach a pre-litigation settlement based on the claim.

A settlement was reached and the company agreed to pay $50,000 and agreed to a two-year consent decree to adopt a formal religious accommodation policy and an annual program on Title VII requirements and the prohibition of religious discrimination.

It is wise to consult with a lawyer about potential discrimination issues before they lead to claims or lawsuits. If you face discrimination issues as an employer, Stephen Hans & Associates  offers effective legal representation to help you resolve your issues. Our firm has successfully defended employers for more than 20 years.

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Ruby Tuesday Is Accused of Gender Discrimination Involving Men

It is common for the media to report on cases of gender discrimination where females did not receive equal pay or the same promotional opportunities as men. In contrast to the norm, the EEOC is now pursuing a class action lawsuit involving gender discrimination against male employees.

The restaurant chain Ruby Tuesday broadly promoted within a 10-state region to hire temporary employees for summer work at a Utah resort. Working in the resort town offered an opportunity for higher pay and also included company-provided housing for those hired. Andrew Herrera, a longtime employee working at Ruby Tuesday since 2005, applied for the job. He even had experience training new hires. However, he was rejected because of his gender. The hiring announcement stated that only females were under consideration for the summer job openings. The company justified its limited promotion for hiring to females because it was avoiding privacy issues by not housing both sexes together.

The Equal Employment Opportunity Commission (EEOC) alleged that the hiring promotion was in violation of the Civil Rights Act of 1964, which prohibits discrimination based on sex. It argued that Ruby Tuesday could have housed employees in separate units but instead implemented a solution that resulted in discrimination. Because the EEOC and Ruby Tuesday were unsuccessful in reaching a pre-litigation resolution, the EEOC is pursuing a lawsuit.

Ruby Tuesday is an international restaurant chain with more than 800 restaurants in the United States, 15 restaurants in other countries and an estimated total of 34,000 employees. Its reported annual gross revenue is $1,251 billion. It is highly unusual for a company of this size to have a lawsuit brought against it for alleged discrimination in hiring and employment practices.

Seasoned employment defense attorneys often work with companies to help them avoid discrimination issues. Our employment defense attorneys at Stephen Hans & Associates  have extensive experience representing employers in the restaurant and other industries.

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