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Articles Posted in Employment Law

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This article is the second part of the discussion of employer’s defense against overtime wage claims based on the commission sales overtime wage exemption, set forth in 18 U.S.C. § 207(i). exemption that allows certain businesses to not pay the employees paid mostly with commissions an overtime premium.  Peter Mavrick is a Fort Lauderdale employment lawyer who defends Florida businesses and their owners against lawsuits seeking overtime and other wages.

As discussed in further detail herein, many federal courts have rejected United States Department of Labor regulations interpreting this exemption.  The regulations often do not make sense either because they are contradictory or are outdated in light of the modern economy.  Many of the regulations were issued before globalization and the transition of the American economy from a manufacturing to a service economy.

Consequently, federal courts have recognized that Department of Labor regulations applying the commission-sales exemption are arbitrary and not deserving deference.  Some of the regulations are either contradictory or make no sense.  For example, one regulation (29 C.F.R. § 779.319) states that a refrigerator repair shop has a retail concept even if orders are taken over the telephone and work is done in the home, but another regulation (21 C.F.R. 779.317) somehow states that air conditioning contractors do not have a retail concept. These two businesses perform the exact same job, on essentially the same equipment, for the exact same customers and are distinguishable only by the scale and degree of cooling that are provided by the machines being repaired.  There is no apparent reason for distinguishing these two businesses.  Successful defense of a business when the regulations lack apparent rational basis can lead federal courts to rule in favor of the business despite clear violation of the Department of Labor’s regulation.

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This article is part one of a two-part series on the commission-based employee overtime wage exemption under the Fair Labor Standards Act (FLSA).  The FLSA, at 18 U.S.C. § 207, generally requires employees to be paid one and a half times their normally hourly rate when working more than forty hours in a week.  However, this federal statute contains some nuances and exceptions that allow employers to avoid the requirement to pay overtime premium compensation.  One of these exceptions is for commission-based employees who work for “retail or service establishments.”  Peter Mavrick is a Fort Lauderdale employment attorney who defends Florida businesses and their owners against claims for overtime wages.

The FLSA (at 18 U.S.C. § 207(i)) explains the commission-based employee exemption:

No employer shall be deemed to have violated [overtime law] by employing any employee of a retail or service establishment for a workweek in excess of the applicable workweek specified therein, if (1) the regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate applicable to him under [federal minimum wage law], and (2) more than half his compensation for a representative period (not less than one month) represents commissions on goods or services. In determining the proportion of compensation representing commissions, all earnings resulting from the application of a bona fide commission rate shall be deemed commissions on goods or services without regard to whether the computed commissions exceed the draw or guarantee.

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Florida employers seeking an injunction to stop their former employees from engaging in competition in violation of a non-compete agreement must demonstrate specific criteria to a court or tribunal.  Under Section 542.335, Florida Statutes, an employer must plead and prove several facts to be entitled to a temporary injunction against a former employee breaching a non-compete agreement.  One critical requirement is the employer must show that an injunction is necessary because money damages will not adequately compensate the employer for the damages suffered. Once the employer has made this requisite showing, an employee must overcome the presumption of irreparable harm. Peter Mavrick is a Miami non-compete attorney and business litigation attorney who has substantial experience with non-compete litigation, including injunction proceedings.

An example of this occurred in the recent case of Picture It Sold Photography, LLC v. Bunkelman, 45 Fla. L. Weekly D74 (Fla. 4th DCA Jan. 8, 2020).  In Picture It, the former employee contended that an injunction not to compete was unnecessary because the alleged harm had already occurred.  Some customers who were solicited by the former employee testified that if the former employee was enjoined from competition, they still would not have continued to be customers of the former employer. The trial court found that the former employer was not entitled to an injunction because its damages were calculable, and thus, it had an adequate remedy at law. The former employer appealed.

Picture It held that evidence showing that some customers would not continue to use the employer’s services does not overcome the presumption of irreparable harm once a breach of the non-compete agreement has been proven. The appellate court also found that “[t]he continued breach of a non-compete agreement threatens a former employer’s ‘goodwill and relationships with its customers, and nothing short of an injunction would prevent this loss.’” TransUnion Risk & Alt. Data Sols., Inc. v. Reilly, 181 So. 3d 548, (Fla. 4th DCA 2015). Picture It also found that the employee’s continued competition was sufficient to show that there was no adequate remedy at law.  “Absent an injunction, there is nothing to stop Contractor from soliciting Employer’s current and prospective customers and further competing with Employer in the market.”

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Employers may invoke the legal doctrine of judicial estoppel to prevent employees from suing their employers when those employees fail to disclose that claim in bankruptcy. In the recent case of Smith v. Haynes & Haynes P.C., 940 F.3d 635 (11th Cir. 2019), the United States Court of Appeals for the Eleventh Circuit, which governs Florida federal courts, clarified the test for application of the doctrine of judicial estoppel.  Peter Mavrick is a Fort Lauderdale employment attorney who defends businesses against claims of discrimination and lawsuits seeking wages.

Judicial estoppel is an equitable doctrine that precludes a party from “asserting a claim in a legal proceeding that is inconsistent with a claim taken by that party in a previous proceeding.” Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir.2002). The purpose of judicial estoppel is “to protect the integrity of the judicial process by prohibiting parties from changing positions according to the exigencies of the moment.” New Hampshire v. Maine, 532 U.S. 742 (2001).

This doctrine has been upheld in the context of statements made to the bankruptcy court. A debtor seeking shelter under the bankruptcy laws must disclose all assets, or potential assets, to the bankruptcy court. 11 U.S.C. §§ 521(1), and 541(a)(7). A pending lawsuit seeking monetary compensation qualifies as an asset. Parker v. Wendy’s Intern., Inc., 365 F.3d 1268 (11th Cir. 2004). The debtor must swear to, “any pending civil claims, and identifying any lawsuits he has filed against others.” Slater v. United States Steel Corp., 871 F.3d 1174 (11th Cir. 2017).

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Florida law prohibits retaliation against an employee seeking worker compensation benefits.  A recent Florida appellate decision allowed a worker compensation retaliation claim even though the employee never actually filed a worker compensation claim before termination of his employment.  Peter Mavrick is a Fort Lauderdale employment attorney who defends businesses and business owners against claims of employment discrimination and retaliation and demands for wages.

Florida Statutes Section 440.205 states in pertinent part that: “[n]o employer shall discharge, threaten to discharge, intimidate, or coerce any employee by reason of such employee’s valid claim for compensation or attempt to claim compensation under the Workers’ Compensation Law.”  The Florida Supreme Court’s precedent in Koren v. Sch. Bd. of Miami-Dade County, 97 So. 3d 215 (Fla. 2012), explained that to establish a claim for worker compensation retaliation an employee must prove the following elements:

1) the [employee] was engaged in protected activity;

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An employee bringing a hostile work environment claim must show that the complained of conduct is sufficiently severe to claim unlawful discrimination under Title VII of the Civil Rights Act and the Florida Civil Rights Act.  Generally, courts consider factors that include whether the incidents are frequent, severe, physically threatening or humiliating, and interfere with work.  Peter Mavrick is a Fort Lauderdale employment attorney who has extensive experience with defending businesses and business owners against claims of sexual harassment.

It is unlawful under Title VII of the Civil Rights Act of 1964 and the Florida Civil Rights Act of 1992 for covered employers (i.e., employers who have at least 15 employees) to discriminate in the workplace on the basis of sex, race, color, national origin, and religion.  The United States Supreme Court’s precedent in Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57 (1986), first recognized that hostile work environment claims qualify as discrimination under Title VII in the seminal case.  The Supreme Court explained that, “[f]or sexual harassment to be actionable, it must be sufficiently severe or pervasive ‘to alter the conditions of [the victim’s] employment and create an abusive working environment.’”  Jurisprudence has since clarified what sorts of conduct is considered to be severe enough to qualify as a hostile work environment.  While Title VII does not contain any requirement that discrimination be sufficiently severe to be actionable, the courts have interpreted this as an implicit requirement.  The Supreme Court explained in the case of Faragher v. City of Boca Raton, 524 U.S. 775 (1998), that “simple teasing, offhand comments, and isolated incidents” do not qualify as a hostile work environment actionable under Title VII.

The United States Eleventh Circuit Court of Appeals, which is the federal appellate court governing federal cases arising in the State of Florida, discussed the degree of harassment which is necessary to sustain a claim of a hostile work environment its recent decision in Ortiz v. Sch. Bd. of Broward County, Florida, 780 Fed. Appx. 780 (11th Cir. 2019).  The employee in Ortiz claimed that his supervisor harassed him concerning his race and national origin. The employee’s supervisor purportedly used racial slurs such as “spic” and “wetback” and openly made disparaging remarks concerning the work ethic of Puerto Ricans and racial minorities.  The trial court entered summary judgment against the employee, finding that the supervisor’s comments about the employee’s ethnicity or national origin “were not frequent, sever, or threatening and did not affect [employee’s] job performance.”   The employee appealed.

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To qualify as sexual harassment under Florida and Federal antidiscrimination laws, sexual conduct between employees must be so severe and pervasive that it alters the “terms and conditions” of employment.  While it may be prudent for an employer to discourage sexual relationships between supervisors and employees, the mere fact that an employee has been the subject of sexual conduct involving her supervisor does not necessarily mean that the employer will be found to have violated Title VII of the Civil Rights Act of 1964 (“Title VII”) or the Florida Civil Rights Act of 1992 (“FCRA”).  Peter Mavrick is Fort Lauderdale employment lawyer who has extensive experience in defending businesses and business owners accused of a sexual harassment.

The law barring sexual harassment in the workplace was derived from cases interpreting Title VII, which prohibits discrimination on the basis of sex.  In Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57 (1986), the United States Supreme Court decided that “unwelcome sexual advances that create an offensive or hostile working environment violate Title VII.”

“In order to prevail on a claim of sexual harassment when no adverse ‘tangible employment action’ is taken, a plaintiff must present sufficient evidence to show that the harassment she suffered, objectively and subjectively, was severe or pervasive.”  Frederick v. Sprint/United Management Co., 246 F. 3d 1305 (11th Cir. 2001).  In Frederick, the plaintiff failed to present sufficient evidence to establish any causal link between the adverse “tangible employment action”, i.e., that she was denied a promotion, and the alleged harassment.

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Certain types of employee complaints to an employer qualify as “protected activity.”  An employer that responds to a protected complaint by terminating, demoting, or otherwise taking an adverse employment action against the employee risks being sued for retaliation under Title VII of the Civil Rights Act of 1964 or the Florida Civil Rights Act of 1992.  For a complaint to qualify as protected activity, the employee must have a good faith and objectively reasonable belief that the complained of conduct was in fact unlawful discrimination.  Peter Mavrick is Fort Lauderdale employment lawyer who has extensive experience in defending businesses and business owners against claims of discrimination.

To establish a prima facie case of retaliation under Title VII of the Civil Rights Act of 1964, an allegedly aggrieved employee must demonstrate: (1) that he or she engaged in statutorily protected activity; (2) that he or she suffered adverse employment action; and (3) that the adverse employment action was causally related to the protected activity. Coutu v. Martin County Bd. of County Comm’rs, 47 F.3d 1068 (11th Cir.1995)

The conduct complained of need not actually constitute unlawful discrimination to qualify as “protected activity.”  An employee’s erroneous complaint concerning lawful conduct can still constitute protected activity when that employee has “a good faith, reasonable belief that the employer was engaged in unlawful employment practices.” Little v. United Technologies, Carrier Transicold Division, 103 F.3d 956 (11th Cir.1997).  However, it is insufficient for a plaintiff “to allege his belief in this regard was honest and bona fide; the allegations and record must also indicate that the belief, though perhaps mistaken, was objectively reasonable.” Id. The reasonableness of a plaintiff’s belief that his or her employer “engaged in an unlawful employment practice must be measured against existing substantive law.” Howard v. Walgreen Co., 605 F.3d 1239 (11th Cir.2010).

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While courts may allow employees to bring claims of “reverse discrimination” concerning sex, race, or religion, an employee may not bring a claim of “reverse” age discrimination under current interpretations of the Federal Age Discrimination in Employment Act (“ADEA”) or the Florida Civil Rights Act (“FCRA”).  The different way that age is treated when contrasted against other protected classes is not directly found in the ADEA or the FCRA, but rather in the cases interpreting these anti-discrimination statutes.  Peter Mavrick is Fort Lauderdale employment lawyer who has extensive experience in defending businesses and business owners against claims of discrimination.

The term “reverse discrimination” refers to a circumstance where a member of a class of persons who have historically not been discriminated against claims to have suffered discrimination because of his or her membership in that class.  Examples of reverse discrimination would include a Caucasian person claiming racial discrimination, a Christian claiming religious discrimination, or a man claiming sex discrimination.  Generally, Federal and Florida courts allow claims of reverse discrimination in most contexts. See, for example, McDonald v. Santa Fe Trail Transp. Co., 427 U.S. 273 (1976) (“Title VII of the Civil Rights Act of 1964 prohibits the discharge of “any individual” because of “such individual’s race,” 42 U.S.C. s 2000e-2(a)(1) (statutory terms are not limited to discrimination against members of any particular race); Wilson v. Bailey, 934 F.2d 301 (11th Cir. 1991) (circumstance where white male police officers sued claiming that department diversity policies illegally discriminated against them).  This symmetry is not so for claims of age discrimination.  The relatively young may not lawfully claim that an employer has discriminated against them in favor of the relatively old under current interpretations of the ADEA or FCRA.

By statutory wording, both the ADEA and FCRA appear to limit discrimination on the basis of age, regardless of whether the claimant is relatively old or relatively young.  The ADEA states that:

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Contracts that restrict or prohibit competition during or after the term of employment are enforceable, “so long as such contracts are reasonable in time, area, and line of business…” Florida Statute § 542.335. A non-compete provision that prohibits a doctor from seeing any patients from medical practice that formerly employed him/her, is not overbroad, provided that the geographic area of the limitation is reasonable. Peter Mavrick is a Miami non-compete lawyer and employment litigation lawyer who has significant experience in non-compete litigation, including injunction proceedings.

In Supinski v. Omni Healthcare, P.A., 853 So. 2d 526 (Fla. 5th DCA 2003) Dr. Edward Supinski (“Dr. Supinski”) was recruited by Omni Healthcare, P.A. (“Omni”) for the company’s medical practice in Brevard County, Florida. Dr. Supinski was relocated from Ohio to Florida for the position with Omni.  Omni was a physician owned multi-specialty practice operating in central and southern Brevard County, and the Melbourne area. Omni and Dr. Supinski negotiated an employment agreement (“contract”) with a two-year duration, which automatically renewed unless terminated by either party 180 days before the termination date. The contract contained a non-compete provision that barred Dr. Supinski from competing with Omni within a ten-mile radius of Omni’s offices in Brevard County, for two years after termination of his employment. The contract also contained a non-solicitation provision that barred Dr. Supinski from soliciting Omni’s patients and employees.

Omni assisted Dr. Supinski in becoming credentialed by various managed care organizations, helped him gain staff privileges at hospitals, hired his staff, advertised his practice, and aided him in establishing a patient base. About one month before the end of the initial two-year term of the contract, Dr. Supinski sent Omni a letter stating that he would not renew his employment agreement.  Immediately after the termination of his employment with Omni, Dr. Supinski opened his new practice four miles from the Omni office where he previously worked. Omni filed a lawsuit against Dr. Supinski for breach of contract, failure to provide the minimum notice of non-renewal, and violation of the non-compete provision. Omni sought an injunction against Dr. Supinski, pursuant to Florida Statute § 542.335.

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