Last month, a Massachusetts US District Court judge held that a former employee who quit was still eligible for $32,000 in sales commissions despite a commission plan that provided otherwise. (Israel v. Voya Institutional Plan Services, LLCI) Voya’s commission plan specifically stated that an employee who resigns is not eligible for further commission payments. The plan was clear and on point. How did the judge get to yes on the commission?
Voya’s plan could not override the Wage Act requirement that sales commissions be paid promptly once the amount is “definitely determined”–at that point the commission becomes “due and payable.” The judge distinguished a sales commission, as a share of sales revenue generated by an employee, from other types of variable compensation– like a bonus. Because the amount of commission was known and earned based on sales, it fell under the Wage Act’s strict payment requirements.
Massachusetts employers who provide commissions as part of their pay structure are advised to review their commission plans in light of this decision. As we all know, the MA Wage Act, with its costly provisions for damages and attorney’s fees, is not to be taken lightly.
In a new development, 21 states and many business groups are requesting that the Texas court enjoin implementation of the new DOL overtime exemption rules. As far as their chance of success, at least in the near term, it is not good.
Reports are that both cases have been assigned to Judge Amos Mazzant, who was nominated by President Barack Obama in 2014. It has been suggested that this assignment may not bode well for the plaintiffs. Theoretically, prospects may improve if the lower court decision is taken up on appeal to the Fifth Circuit.
The states are claiming that the DOL overstepped by raising the salary level for what should be exempt duties–regardless of salary. Moreover, the plaintiffs allege that the automatic indexing that raises the threshold salary over three years is an overreach of authority and should include provisions for economic conditions or the effect on resources.
Our view is that we all stay the course, and continue compliance efforts. With the compliance date of December 1 so close, it would be risky to leave the fate your workplace with the courts. In the meantime we will closely monitor this case and if the courts stop implementation, that will be a wonderful surprise.
This month, President Obama signed into law the most significant trade secret reform in nearly twenty years: the Defend Trade Secrets Act of 2016 (DTSA). The Act received enormous bipartisan support, illustrating how significant this issue is to business. How does the Act impact your workplace?
Historically, trade secret protection has been the exclusive domain of the states. In fact, the DTSA does not pre-empt state law but adds an additional level of federal protection for trade secret holders. Specifically, the Act allows a federal cause of action to obtain a civil seizure order and remedies for trade secret theft. If a showing of “extraordinary circumstances” is met, a federal court can issue an ex parte property seizure—a powerful tool to stop misappropriation. The Act specifies how a trade secret threshold is met, and refers to “reasonable measures” to keep the information secret. Moreover, the Act requires the information sought to be protected derives “independent economic value” for the owner(s). The federal remedies are welcome but the burden of establishing information as a trade secret is high.
The best way to protect business secrets to avoid a breach and to seek federal and state protection after a breach is:
- Identify and continually protect trade secrets;
- Establish steps to maintain secrecy;
- Develop a comprehensive Protection Plan;
- Periodically audit your security measures.
Most importantly, the DTSA requires that employers must now provide a notice of whistle blower immunity protection in any contract or agreement with an employee (or an independent contractor or consultant).
We can help. Our lawyers have vast experience assisting businesses with trade secret matters. Contact us at firstname.lastname@example.org or call 508.548.4888
At last, the final version of the Department of Labor’s (DOL) overtime rule has been issued. The final rule will:
-Raise the salary threshold for overtime eligibility for “white collar” workers from $455/week to $913 per week or $47,476 per year, effecting a projected 4.2 million workers.
-Automatically update the salary threshold every three years, based on wage growth over time.
-Amend the highly compensated employees subject to a minimal dutes test salary from $100,000 to $134,004 per year.
-Go into effect December 1, 2016.
We won’t quote Joe Biden here, but this is a big….deal. With six months to prepare, do not wait until the last minute. Be sure your employees are properly classified with an employment audit. Running afoul of the Fair Labor Standards Act (FLSA) is expensive with big penalties, plus the possibility of class action lawsuits.
In other less shattering but important news:
The EEOC just released their final rules regarding employer wellness plans. The ten second version: the EEOC’s final rules describe how Title I of the Americans with Disabilities Act (ADA) and Title II of the Genetic Information Nondiscrimination Act (GINA) apply to wellness programs offered by employers that request health information from employees and their spouses. The guidance applies to both employers and employees about how workplace wellness programs can comply with the ADA and GINA consistent with provisions governing wellness programs in the Health Insurance Portability and Accountability Act, as amended by the Affordable Care Act (Affordable Care Act).
Time to take a closer look at your Wellness Plan. No good deed goes unpunished.
We can help. 508-548-4888
-Attorney Timothy G. Kenneally
Retaliation protection in the workplace is defined by the “zone of interests” standard. If an employee falls within the interests sought to be protected under the law (Title VII) that employee is shielded against retaliatory adverse employment action.
A recent decision by the Massachusetts Commission Against Discrimination (the “Commission”) in Schillace v. Enos Home Energy Therapy illustrates how the zone works. Schillace charge Enos with terminating her employment because her fiancé, who had also worked for Enos, had previously charged the company with retaliation. The Commission concluded that the fiancé relationship was “a close personal association” for Schillace, and therefore she was protected against any adverse employment action motived by or related to her fiancé’s claim. The Commission concluded that Schillace was entitled to back pay and damages for emotional distress due to the wrongful termination of her employment. In other words, she was in the zone of protection.
How should employers properly define the zone and react to it? For starters, employers must acknowledge that the focus on a zone of interests, in practice, creates a unique type of protection for each employee. This personalized zone is defined by any and all of the employee’s known close personal associations with members of protected classes. Close personal associations have been defined to include blood relatives, relatives by marriage, adoptive relations, and of course, a fiancé. However, we hesitate to suggest that a Court or the Commission will not define the group more broadly to include other persons closely tied to the employee.
Before taking adverse employment action, employers must consider all of the employee’s known close personal associations. Do any of those persons fall within protected classes? Can the adverse action be viewed as retaliation related to a person associated with the employee? Only through a measured and careful analysis, can an employer minimize its risk of running afoul of the ZONE.
If you have any questions about the zone of interests, feel free to contact me at email@example.com.