The firm is proud to announce that 5 attorneys from Joseph Greenwald & Laake have been named to the 2015 Maryland Super Lawyers list and 3 have been included in the list of Rising Stars.
Each year, Super Lawyers evaluates peer nominations and third-party research in their selection process. Only 5 percent of total lawyers in the state are selected for inclusion in Super Lawyers. These outstanding lawyers have achieved a high degree of peer recognition and professional success.
Of the firm’s five Super Lawyers, Timothy Maloney made the Top 100 Super Lawyers list by earning high points in the Maryland nomination, research and blue ribbon review process.
The Rising Stars selection process is similar to Super Lawyers, except candidates must be 40 years old or younger or in practice for 10 years or less. No more than 2.5 percent of Maryland lawyers make the Rising Stars list.
Congratulations to JGL’s 2015 Maryland Super Lawyers:
1. Timothy Maloney
2. Andrew Greenwald
3. David Bulitt
4. Jeff Greenblatt
5. Walter Laake, Jr.
2015 Rising Stars:
1. Veronica Nannis
2. Reza Golesorkhi
3. Matt Bryant
Jay Holland recently authored this article in Thomson Reuters’ Westlaw Journal, Volume 29, Issue 10, December 9, 2014.
The U.S. Supreme Court will be considering the case of Perez v. Mortgage Bankers Association, Nos. 13-1041 and 13-1052, cert. granted (U.S. June 16, 2014), this term.
The case will ultimately decide whether mortgage loan officers should be considered exempt from overtime and minimum-wage requirements of the Fair Labor Standards Act, 29 U.S.C. § 201, as claimed by the Mortgage Bankers Association, or whether they should not be exempt as asserted by the Department of Labor.
The path to answering that question in this case is not just about statutory interpretation of the FLSA, but about whether the DOL was required to abide by the strict dictates of the Administrative Procedure Act when the department’s Wage and Hour Division revisited its “administrative interpretation” of the FLSA from 2006, when it previously concluded that loan officers were exempt, and reissued a new administrative interpretation in 2010 finding that loan officers were not exempt.
The answer to this seemingly mundane administrative-law question could reverberate throughout the mortgage banking industry. Will the court rule that the DOL had to strictly follow the APA, 5 U.S.C. § 551, and relieve the industry of costly overtime and minimum wage requirements or will the loan officers receive the same wage protections as other sales employees?
The impact of this case is not just limited to this rule or just for this industry — which is precisely why the court is interested in this case. Indeed, the government’s view is that imposing a notice-and-comment period on every agency interpretation of regulations will create an extraordinary burden on the operation of government and the administrative process government-wide.
So, if the court decides in favor of the Mortgage Bankers Association, will the administration and interpretation of agency rules grind to a screeching crawl in a bureaucratic bottleneck?
In this case, the MBA sued the labor secretary for violating the APA’s noticeand-comment rulemaking procedure regarding the DOL’s own interpretive rule that mortgage loan officers were not exempt from federal overtime laws. Specifically, the MBA challenged the DOL’s procedure in establishing the rule, since the DOL had initially issued a 2006 opinion letter in which it concluded that mortgage loan officers were exempt from federal overtime laws, only to reverse that decision through a 2010 administrator’s interpretation.
The U.S. District Court for the District of Columbia held that the DOL did not violate the APA, because the MBA failed to demonstrate that the notice-and-comment requirement had been triggered by its “substantial and justified reliance” on the new regulation. The District of Columbia U.S. Circuit Court of Appeals reversed the decision, concluding that “substantial and justified reliance” was not a separate component of the analysis and, therefore, the DOL had violated the APA.
The DOL did not follow the APA’s notice-and comment dictates in the 2006 opinion or in the 2010 opinion.
In 2006, the DOL issued an opinion letter in response to the MBA’s inquiry regarding whether or not its members were required to pay mortgage loan officers overtime under the FLSA. The MBA wanted to know whether the employees who “spent less than 50 percent of their working time on ‘customer-specific persuasive sales activity’” were exempt under the FLSA.
In the opinion letter, the DOL, relying on its 2004 regulations and without notice and comment, said that the exemption applied to the loan officers. At the time, the DOL concluded that the officers had primary duties “other than sales.”
Four years later, the Wage and Hour Division reversed its 2006 interpretation — again without notice and comment, and concluded that loan officers were not exempt. In 2010 the Wage and Hour Division issued an administrator interpretation that addressed whether the loan officers’ responsibilities constituted “office or non-manual work directly related to the management or general business operations of their employer or their employer’s customers.”
The administrator interpretation concluded that the FLSA exemption did not apply because the loan officers’ duties were to “sell[] loans directly to individual customers, one loan at a time.”
The legal issue thus became whether the DOL should have undergone a notice-and comment procedure when it changed its interpretation that loan officers no longer qualified for the exemption. Two District of Columbia Circuit cases have served as the guideposts for when notice and comment is required:
The tandem of Paralyzed Veterans of America v. DC Arena LP, 117 F.3d 579 (DC Cir. 1997) and Alaska Professional Hunters Ass’n v. Federal Aviation Administration, 177 F.3d 1030 (DC Cir. 1999), announced an ostensibly straightforward rule: “When an agency has given its regulation a definitive interpretation, and later significantly revises that interpretation, the agency has in effect amended its rule, something it may not accomplish [under the APA] without notice and comment.” Alaska Hunters, 177 F.3d at 1034.
The District Court ruled in favor of the DOL on summary judgment, concluding that the MBA’s reliance on the 2006 opinion letter was not “substantial and justifiable reliance on a well-established agency interpretation.”
The court added in this “third element” of “substantial and justifiable reliance” to the notice-and-comment test, explaining that in MetWest Inc. v. Secretary of Labor, 560 F.3d 506, 511 (DC Cir. 2009), the District of Columbia Circuit had previously “stressed that a core tenant [sic] of the Alaska Professional Hunters decision was ‘substantial and justifiable reliance on a well-established agency interpretation.’” Mortgage Bankers Ass’n v. Solis, 864 F. Supp. 2d 193, 208 (D.DC June 6, 2012).
On appeal, the District of Columbia Circuit explained that “[t]he only question properly before this three-judge panel is a narrow one: what is the role of reliance in this [Paralyzed Veterans–Alaska Hunters] analysis?” Mortgage Bankers Ass’n v. Harris, 720 F.3d 966, 967 (DC Cir. 2013) (emphasis added).
The appeals court reversed the District Court, explaining that the lower court’s added element of “substantial and justifiable reliance” was merely part of the first prong of the notice-and-comment test (i.e., that the agency had made a definitive interpretation of the rule at issue).
Given that the DOL had conceded at oral argument that the MBA had satisfied the first two elements under District of Columbia Circuit notice-and-comment precedent, the appeals court reversed the District Court’s decision and ordered that the 2010 administrator interpretation be vacated. As a result, the loan officers were considered to be exempt, at least until the DOL complied with the notice-and-comment requirements of the APA.
If this decision were to apply across the board to all agencies, it could surely cause substantial delay and obstruct the implementation of policy. So, what does the government argue to the court to rid itself of these potential odious consequences?
The government proffers that Paralyzed Veterans and Alaska Hunters manufactured a judge-made procedural requirement that is contrary to the text of the APA. The APA “expressly exempts interpretive rules from the act’s notice-and-comment-rulemaking requirement.” See Federal Petitioner’s Brief at 11, Perez v. Mortgage Bankers Ass’n, Nos. 13-1041 and 13-1052 (U.S. Aug. 20, 2014), 2014 WL 4101228. Section 4 of the APA, 5 U.S.C. § 553(b)(A), exempts “interpretive rules” from those requirements.
From the viewpoint of certain textualists on the court, this angle could certainly have appeal. However, the view of certain justices who may be inclined to discredit “lawmaking by bureaucrats” might overcome those textual tendencies and result in a favorable outcome for the MBA.
The MBA, in contrast, argues that the Paralyzed Veterans–Alaska Hunters dichotomy “promotes good government” and that notice-and-comment rulemaking “not only protect[s] the legitimate reliance interests of those regulated by administrative agencies, but also [] vindicate[es] the interest of every citizen in promotion of accountable, transparent government.” See Respondent’s Brief at 28, Perez v. Mortgage Bankers Ass’n, Nos. 13-1041 and 13-1052 (U.S. Oct. 9, 2014), 2014 WL 5202051 .
Further, the MBA raises the concern that if the court were to chip away at the Paralyzed Veterans doctrine, would-be participants in the rulemaking process will have their voices silenced, “with no corresponding gain in government transparency or accountability.” Id. at 33.
Moreover, the MBA argues that it could potentially promote bad behavior by agencies. For example, an agency could deliberately make a vague rule, only to then “interpret” that rule without any contribution from potential participants in the rulemaking process. Finally, the MBA argues that the preservation of notice-and comment rulemaking in this context respects the separation of powers in that agencies already have the power to fill in the gaps of ambiguous statutes and Congress has already granted agencies limited jurisdiction to adjudicate certain claims.
In its reply brief, the government took issue with the MBA’s policy justifications for discarding the Paralyzed Veterans rule, contending that although “greater public involvement” would obviously be a positive component of the rulemaking process, such procedures in “all rulemaking contexts come at a significant cost to agency time and resources and the prompt correction of erroneous interpretations.” See Federal Petitioner’s Reply Brief at 23.
The government made clear, however, that it did not advocate for a widespread limitation on notice-and-comment rulemaking, but rather only for greater agency discretion “to decide on a case-by-case basis in which particular contexts they should dispense with or utilize public procedures.” Id. at 24. Supreme Court precedent on the issue is sparse. The DOL relied partly on the Supreme Court’s decision in Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994), which noted that an interpretation of a regulation may be altered sans the type of notice-and-comment rulemaking used in amending a regulation.
The DOL argued that if the MBA prevails, such a decision would be contrary to Thomas Jefferson University and irreconcilable with Paralyzed Veterans because both the initial 2006 interpretation and the subsequent 2010 opinion were not amendments to the regulation, but rather “interpretations.”
The MBA claimed that Thomas Jefferson University was inapplicable because the conclusion proffered by the DOL was dicta. Nevertheless, in Thomas Jefferson University, the Supreme Court found that where an agency interpretation is neither plainly erroneous nor inconsistent with the regulation, as opposed to a subsequent interpretation, such a construction is valid.
The MBA pointed to another Supreme Court case, Christensen v. Harris County, 529 U.S. 576, 588 (2000), arguing that only “[where] the language of the regulation is ambiguous” is notice-and-comment rulemaking not required for an agency interpretation in an opinion letter.
The MBA further contended that the DOL’s language in the 2006 interpretation was unambiguous, warranting the notice-and comment procedures. The DOL distinguished Christensen, noting that the 2006 opinion was not a regulation, but rather “an agency interpretation of a regulation.” See Federal Petitioner’s Reply Brief at 20.
The Supreme Court has yet to address whether, under Christensen, a subsequent opinion contrary to an unambiguous prior interpretation of a regulation requires procedures for notice-and-comment rulemaking.
Because this specific APA issue is one of first impression, the Supreme Court’s decision in Perez may ultimately turn on whether the opinion of the District of Columbia Circuit is at odds with Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519 (1978).
In Vermont Yankee, the Supreme Court explained that the APA’s notice-and comment requirements “established the maximum procedural requirements which Congress was willing to have the courts impose upon agencies in conducting rulemaking procedures.” Id. at 524.
The Supreme Court further stated that“[a]gencies are free to grant additional procedural rights in the exercise of their discretion, but reviewing courts are generally not free to impose [additional procedural requirements] if the agencies have not chosen to grant them.” Id. (emphasis added). The Supreme Court saw the benefit of permitting administrative agencies flexibility in responding to interested parties.
The MBA claims that the Paralyzed Veterans doctrine is not “imposing new procedural requirements not found in the APA,” but rather “correctly ensures that agencies comply with the APA, thereby keeping faith with Vermont Yankee.” See Respondent’s Brief at 23.
The MBA argues that Paralyzed Veterans is consistent with Vermont Yankee, because it applies only in a narrow set of circumstances. The DOL, however, contends that such extensions of the APA are contrary to the Vermont Yankee finding that a reviewing court may not make such policy-based judgments (i.e., that courts cannot force agencies into procedures outside of the APA’s “maximum [] requirements”). Vermont Yankee, 435 U.S. at 524.
If the latter view prevails, then the government may succeed in its challenge.
Studentswho find it impossible to take tests because of news reports about injustices in our legal system should not become constitutional lawyers. Better yet, they should find another career altogether.
I am a civil rights lawyer. For 15 years, I have represented those whose rights have been trampled by the same systems at work in Ferguson, New York, and all over the country. Civil rights lawyers must work one-on-one with families whose lives have already been torn to shreds by machinery that will just as greedily do the same to the lawyer and anyone else who stands up against it.
If you are rendered so helpless by media reports of injustice from afar that you cannot even take a make-believe school test, you are not prepared to handle the real pain experienced by victims in the up-close-and-personal way that is necessary to bring them – and our country- peace.
The tests you are shirking are a sad fantasy approximation of what lawyers do – with no one’s life hanging in the balance, and without any real repercussions for the quantum of justice in the world.
When you stand up in the courtroom with a man’s life and fortune in your hands, and the only remaining hope for any justice is you, there is no reprieve. We play for keeps. You must be prepared to fight and win against inestimable odds in a system rigged against you for clients you’ve come to know and love.
If news reports about people you’ve never met suffering pain you haven’t helped carry them through leave you unable to act, then you are not fit to practice law.
On the other hand, if you read about Ferguson and New York and the long line of similar cases going back many years all over the country, and a fire was lit in you – if you want to take your exams as quickly as possible and be the first to be sworn into the bar so that you can start actually doing something about it, then get to work – your country needs you.
The views expressed herein are the personal views of the author and do not necessarily represent the views of Joseph, Greenwald, & Laake P.A.
Timothy F. Maloney was recently listed in Washingtonian magazine in “The Top Personal Injury Verdicts & Settlements in Washington in 2014.” In the case Colleen Bowen et al. v. Washington Suburban Sanitary Commission et al., Mr. Maloney recovered $3.3 million for the plaintiffs who sued their former employer for age discrimination after their positions in the IT department were terminated.
The rest of the JGL team involved in the case included Hina Hussain, who tried the case with Mr. Maloney, Veronica Nannis, who litigated the case for 7 years before trial, and litigation paralegals, Jamerra Cherry and Jessica Richardson, who provided daily trial support.
Further details of the case were reported on the JGL site following the verdict and can be found here.
In Maryland, the Court has the authority to appoint what is called a Best Interest Attorney. What is that, you ask? Well, it is the term used in our courts to categorize any of the various lawyers for children; this is also the modern multi-purpose term used for a Guardian Ad Litem, Nagle v. Hooks Attorney, and regular old attorney.
There are three different types of Best Interest Attorneys in Maryland: (1) the attorney who determines whether it is appropriate to waive any therapist-patient privilege your child may have with his or her treating therapist/psychologist/social-worker. This type of Best Interest Attorney may sometimes also be referred to as a Nagle v. Hooks attorney (this harkens back to the seminal case in Maryland where the Court stated there must be an attorney to determine whether such privilege could be waived- i.e. parents could not waive their child’s privilege when there was litigation between the parents); (2) an attorney who advocates for what he or she feels is in the child’s best interests (previously denoted by the term GAL or Guardian Ad Litem); and (3) an attorney who represents the child to advocate for what the child wants. While (2) and (3) may not appear to be easily distinguishable, think of this in parental terms – what your child wants is not always what is best.
Maryland has codified the factors for the Court to consider when determining if a Best Interest Attorney (in whatever iteration) is appropriate. When a parent (or both) requests the of a Best Interest Attorney, the Court will conduct an analysis looking at Md. Rule 9-205.1, including an examination of what information may be important in the contested custody case.
Maryland Rule 9-205.1 (b) states, “In determining whether to appoint child’s counsel, the court should consider the nature of the potential evidence to be presented, other available methods of obtaining information, including social service investigations and evaluations by mental health professionals, and available resources for payment. Appointment of a Best Interest Attorney may be most appropriate in cases involving the following factors, allegations, or concerns:
request of one or both parties;
high level of conflict;
inappropriate adult influence or manipulation;
past or current child abuse or neglect;
past or current mental health problems of the child or party;
special physical, education, or mental health needs of the child that require investigation or advocacy;
actual or threatened family violence;
alcohol or other substance abuse;
consideration of terminating or suspending parenting time or awarding custody or visitation to a non-parent;
relocation that substantially reduces the child’s time with a parent, sibling, or both;
any other factor that the court considers “relevant.”
[Emphasis added]
The Court will also consider the 10 enumerated factors and the catchall “any other factor that the court considers relevant” in weighing whether a Best Interest Attorney is appropriate. No one factor is dispositive. These same considerations are important for you to consider in gauging whether you want a Best Interest Attorney appointed for your child (or children).
Unlike your attorney, the Best Interest Attorney’s job may not be as simple as advocating for what the child (the client) wants. For example, the Court may need to hear from the children’s therapist if their input is important in determining who should make decisions for the children and what time-sharing arrangement is appropriate. The Court will examine whether there is any other way of getting the therapist’s opinion in front of the court (i.e. has a custody evaluation been ordered). If not, the Court may appoint a Best Interest Attorney to determine whether the child’s privilege with their therapist should be waived and whether the therapist should be called to testify.
If the children are more mature and have stated a preference for the Best Interest Attorney may advocate for their client’s position.
Knowing the different types of Best Interest Attorneys is simply the first step. After that, you must determine whether a Best Interest Attorney is appropriate in your case for your child or children. You should discuss your concerns with your family law attorney early on in your case and they will help direct you to whether you should seek the assistance of a Best Interest Attorney.
Understanding the new “ban the box” laws in Montgomery County and Prince George’s County
Most people would assume that the question, “do you have a criminal record?,” would come up early in a job application process. And if the answer is, “yes,” it would likely be a very short process. But within the last month, Montgomery County and Prince George’s County have enacted laws restricting employers’ use of criminal histories in hiring.[1] This post explores these new labor laws and how they will impact employers and employees in these counties.
What is a “ban the box” law?
Ban the box” is the phrase that has been given to the legislative effort to restrict the use of criminal background checks in the hiring process. “Ban the box” is a reference to the fact that most job applications ask whether the applicant has ever been charged or convicted of a crime, requiring the applicant check a box for “yes” or “no.” The purpose of “ban the box” laws is to expand employment opportunities for those with criminal histories by restricting the use of criminal background checks for employment opportunities.
What are the requirements of the new county laws?
Under current state and federal law, there is no express restriction on private employers’ use of criminal background checks in the hiring process. Both the Montgomery and Prince George’s County “ban the box” laws place new restrictions on employers with respect to the use of criminal histories in three phases of the hiring process: (1) the application, (2) the first interview, and (3) rescission of an offer.
(1) Job Application
Under both the Montgomery and Prince George’s County laws, an employer may not require an applicant to disclose on a job application “the existence or details” of the applicant’s “arrest record or conviction record.” This is the so-called “ban the box” part of the law. It is very broad and essentially prohibits any questions about applicants’ criminal history on job applications.[2]
(2) First Interview
Under both the Montgomery and Prince George’s County laws, employers are prohibited from inquiring into a job applicant’s criminal history until after a first interview.[3] Specifically, an employer may not do any of the following before the conclusion of a first interview:
Require the applicant to disclose his or her arrest or conviction record, or whether the applicant “otherwise has ever been accused of a crime,”
Conduct a criminal background check; or
Inquire with anyone as to whether the applicant has ever been arrested, convicted of a crime, or even accused of a crime.[4]
Only after the conclusion of a first interview may an employer—for the first time in the process—conduct a criminal background check of any kind.
(3) Rescission of Offer
Under both the Montgomery and Prince George’s County laws, if an employer makes an offer of employment, and intends to rescind the offer based on the results of a criminal background check, the employer must (1) inform the applicant in writing (including an explanation of the basis for the intention to rescind the offer);(2) give the applicant a copy of any criminal history report the employer has obtained; and (3) allow the applicant 7 days to dispute any inaccuracies in the report. If, after this 7-day waiting period, the employer decides to rescind the offer, it must inform the applicant in writing.
There are some slight variations between the Montgomery and Prince George’s County laws as to these provisions. Whereas the Prince George’s County law applies if an employer intends to rescind “an offer,” the Montgomery County law applies if an employer intends to rescind “a conditional offer.”[5] In addition, the Prince George’s County law requires that if an employer makes an employment decision based on an applicant’s criminal history, the employer must “conduct an individualized assessment,” considering only criminal offenses that relate to the duties of the job and several other factors. There is no such requirement in the Montgomery County law.[6]
Which employers and jobs are covered?
The Montgomery County law generally applies to all employers in Montgomery County with at least 15 fulltime employees in the County. The Prince George’s County law generally applies to all employers in Prince George’s County with at least 25 fulltime employees in the County.
Both laws contain major exceptions:
Caregivers to minors and vulnerable adults. Both the Montgomery and Prince George’s County laws exclude “an employer that provides programs, services, or direct care to minors or vulnerable adults.”
Public safety agencies. In Montgomery County, the law does not apply to the Police Department, Fire and Rescue Service, or Department of Corrections and Rehabilitation. In Prince George’s County, the law does not apply to County public safety agencies.
Positions that involve a security clearance. The Montgomery County law does not apply to hiring for any position that requires a federal government security clearance. The Prince George’s County law does not apply to positions in which criminal background checks are required or authorized by federal, state, or county law.
Certain Prince George’s County government positions. Both laws apply to hiring for county government positions (with the exception of public safety agencies). However, the Prince George’s County law allows the County to, at its discretion, exclude positions that “have access to confidential or proprietary business or personal information, money or items of value, or involve emergency management.”
Which job applicants are covered?
There is an important difference between the Montgomery and Prince George’s County laws regarding which “applicants” they apply to. The Prince George’s County law applies only to “applicants for employment.” However, the Montgomery County law applies not only to new job applicants, but also to current employees who apply for a promotion. In Montgomery County, all of the law’s restrictions apply equally to new applicants and current employees applying for a promotion.
When do the new county laws take effect?
Montgomery County’s “ban the box” law takes effect January 1, 2015.
Prince George’s County’s “ban the box” law takes effect January 20, 2015.
How will the new laws affect employers and employees?
Employers in Montgomery and Prince George’s County should be familiar with the requirements of the new employment laws and adjust their hiring and promotion policies accordingly. Employees should be aware of their rights under the new laws and how to enforce them.
It is also important to note that the Montgomery and Prince George’s County “ban the box” laws are part of a trend. In 2013, the Maryland General Assembly enacted a “ban the box” law that restricts the use of criminal background checks in hiring for most Maryland state jobs (it does not apply to private employers). In April 2014, Baltimore City enacted a “ban the box” law, which is more restrictive than the Montgomery and Prince George’s County laws. In September 2014, the District of Columbia enacted a similarly-restrictive “ban the box” law. And on the federal level, the EEOC has issued guidance that strongly discourages the use of criminal background checks early in the hiring process. The Montgomery and Prince George’s County laws continue this trend of legislation restricting the use of criminal histories in hiring. Employers and employees in all jurisdictions should be aware of this trend and stay up-to-date on this evolving area of the law.
Any employer, employee, or job applicant with questions about the applicability and requirements of these laws should consult with an attorney.
[1]The Montgomery County Council enacted Bill 36-14 on October 28, 2014. The County Executive signed it into law on November 10, 2014. The Prince George’s County Council enacted CB-78-2014 on November 19, 2014. The County Executive signed it into law on December 4, 2014.
[2] “Arrest record” is defined in the same in both county laws: “information indicating that a person has been apprehended, detained, taken into custody, held for investigation, or otherwise restrained by a law enforcement agency or military authority due to an accusation or suspicion that the person committed a crime.” “Conviction record” is also defined identically in both laws: “information regarding a sentence arising from a verdict or plea of guilty or nolo contendre, including a sentence of incarceration, a fine, a suspended sentence, and a sentence of probation.” These definitions appear to leave little room for employers to inquire about arrest or criminal records on a job application.
[3] In the Montgomery County law, the term “interview” includes not only in-person interviews, but also “telephone or internet communication” “to discuss: (1) the employment being sought; or (2) the applicant’s qualifications.” (It does not include communications “made for the purpose of scheduling a discussion.”) “Interview” is not defined in the Prince George’s County law.
[4] Both County laws have identical language as to these provisions.
[5] “Conditional offer” in this context means an offer that is expressly conditioned on a criminal background check or any other “contingency expressly communicated to the applicant at the time of the offer.”
[6]The Montgomery County bill had an identical provision, but it was removed by amendment before the bill was passed.
Law360, New York — In a tight job market, many students turn to unpaid internships to get their feet in the business door and gain real-world job experience for light resumes. At first blush, it seems like a fine concept: the student gains much-needed resume filler and makes networking connections while the employer enjoys free labor. In a weak economy with lean company budgets and fierce job competition, this is a win-win situation, right?
Not so, according to some federal courts and the U.S. Department of Labor.
Simply put, employees cannot contract away minimum wage laws. Scores of interns are now suing — and winning — back pay for unpaid internships. Rocking some big name employers, many of these lawsuits also reach back six years. The basics of the DOL six-part intern test can be found here. This article expands on that, outlines the arguments on both sides in some recent cases and provides a checklist of considerations for employers who have or are thinking of starting internship programs.
Recent Cases Result in Million-Dollar Settlements or Immediate Appeals
Mushrooming in 2013, groups of former unpaid interns banded together in record numbers to sue former employers for failing to pay minimum wages during their unpaid internships. Among the headline grabbers have been lawsuits against such giants as Conde Nast Publications, Atlantic Recording Corp., Fox Searchlight Pictures Inc., NBC Universal Media Inc., Viacom Inc., Sony Corp.,Donna Karan and Charlie Rose.
The latest big company to settle a lawsuit over unpaid internships is NBC, which, according to a court filing on Oct. 22, settled a purported class action brought by unpaid interns who worked for SaturdayNight Live.[1] If the settlement gets approved, NBC will pay $6.4 million to more than 8,000 interns reaching back to 2007. (Deadline.com obtained a copy of the SNL settlement memorandum and posted it publicly here.) It is estimated the proposed settlement would pay $500 per intern, though payments to the named plaintiffs will range from $2,000 to $10,000 each.
How can an intern who reaped the benefit of working for an iconic TV show like SNL sue for back pay for an internship he or she agreed would be unpaid? It all has to do with the Fair Labor Standards Act and state equivalents, which require employers to pay minimum wages to those whom they “employ,” regardless of any agreement to the contrary. These laws were enacted to protect unwitting employees from being taken advantage of on the often-unequal playing field of employer-employee relationships.
For decades, these workers were not classified by employers as “employees,” but instead as nonemployee “unpaid interns” given their student or in-training status. But, groups of these interns are now crying foul and courts are disagreeing with the long-held employer classification. This has resulted in some very public million-dollar settlements paid out by big employers such as NBC.
The FLSA defines the term “employ” very broadly as “to suffer or permit to work.”[2] More often, courts are ruling against employers in cases like that against Fox Searchlight. Unlike NBC and most others, Fox is one of the few employers that is litigating the issue instead of settling. There, the unpaid and underpaid interns from mega movies “Black Swan” and “500 Days of Summer” sued for back pay.[3]
The interns based their case on the FLSA’s expansive definition of “employ”[4] and highlighted the measure of control exerted by Fox Searchlight. They also claimed that they did not fit the narrow exception for “trainees” carved out by the U.S. Supreme Court in Walling v. Portland Terminal Co., 330 U.S. 148 (1947). Walling forged a narrow path of exception for true trainees. This exception is limited to cases in which the employer offers “the same kind of instruction” offered by a vocational school, the employer receives no “immediate advantage” from the work performed by the trainees, the trainees work “solely for [their own] personal purpose or pleasure” and their “work serves only [their] own interest.”[5]
The plaintiffs also cited public policy concerns, including that an intern should not be able to simply waive the FLSA. “If an exception to the Act were carved out for employees willing to testify that they performed work ‘voluntarily,’ employers might be able to use superior bargaining power to coerce employees to make such assertions, or to waive their protections under the Act.”[6]
Trying to refocus the court, Fox Searchlight argued that it was removed from the intern process and did not “employ” them. Instead, Fox Searchlight contracted with other entities to produce the movies and it was those producers that hired the interns — before Fox Searchlight was even involved — and did not have signed agreements with the named plaintiffs. Fox Searchlight touted the Supreme Court’s instruction that for purposes of the FLSA, a determination that an employee-employer relationship exists must be grounded in “economic reality.”[7] Searchlight argued that the “economic reality” of its situation was that it was merely a “business partner” with the producer and a “cofinancier,” but not a joint employer. The court rejected these arguments.
On June 11, 2013, Judge William Pauley of the U.S. District Court for the Southern District of New York sided with the interns. He granted partial summary judgment for the plaintiffs and also granted class certification.[8] Judge Pauley focused on control. “When it comes to ‘employer’ status under the FLSA, control is key.”[9] While the defendant employers argued that Fox Searchlight had the right to fire employees “only if certain conditions were met,” the court noted that it retained the right to require its production partner to fire any worker at Fox Searchlight’s “sole reasonable discretion.” Moreover, the court noted that “[c]ontrol may be restricted, or exercised only occasionally, without removing the employment relationship from the protections of the FLSA, since such limitations on control do not diminish the significance of its existence.”[10]
This ruling is now on appeal awaiting oral argument and then a decision from the Second Circuit in what is sure to be a much-discussed opinion. Noting the importance, amici curiae have poured in supporting both sides, including the U.S. Chamber of Commerce, National Employment Lawyers Association and Secretary of Labor.
Another unpaid intern case, siding this time with the employer, is also on appeal in the Second Circuit. In Xuedan Wang v. Hearst Corp., 293 F.R.D. 489, 494 (S.D.N.Y. 2013), the district court denied the plaintiffs’ motion for summary judgment and class certification. In a brief opinion, it noted that the employer had shown “some educational training, some benefit to individual interns, some supervision, and some impediment to Hearst’s regular operations,”[11] such that material facts were in dispute. Like the court in Searchlight, the Xuedan court also granted an immediate appeal. Interested parties will keep their eyes on the Second Circuit for these opinions.
A Roadmap for Prudent Employment Lawyers and In-House Counsel
What advice should be given to the concerned employer? Aside from researching your client’s state-specific employment laws, employment lawyers must start with the DOL website and its fact sheets. The DOL fact sheet on unpaid internships lays out a six-part test[12] for determining whether an internship meets the exclusion for minimum wage payment. This document is a must-have starting point for any discussion with your client about internships.
The crux of the DOL test, some of it taken from Walling, is that an internship must truly be for training and educational purposes. At its core, if an internship is for the benefit of the intern — and the employer derives no immediate benefit from it — the internship probably qualifies for the exclusion.
Prudent in-house counsel and employment attorneys will not only brush up on the DOL six-part test, but will also carefully review the recent opinions in Fox Searchlight and other cases.[13] A review of the Searchlight opinion coupled with Walling reveals a basic checklist of areas that should be covered with any client reviewing or considering an internship program. This includes consideration of whether:
the employer has hiring and firing power;
the employer can supervise or control work schedules or conditions;
the employer determines the rate and method of payment;
the employer retains employment records;
an employment agreement exists;
the job offers the same kind of instruction as that offered by a public or private vocational school;
the employer receives any “immediate advantage” from the work performed; and
the trainee or intern works solely for his or her own personal purpose and the work serves his or her own interest.
Of note, some states have more stringent laws than the FLSA and some state laws also have different applicable statutes of limitation. The reason almost all of the recent unpaid intern class actions have come out of New York is because that state allows these cases to reach back six years, while the FLSA statute of limitations is only three years.
Employers should beware of all of these issues relating to unpaid internships. Intent does not matter. Even those with the best at heart can run afoul of the wage and payment laws. The most important takeaways from these cases for employers are that: (1) wage laws are not terms that can be contracted away; and (2) the use of another company or buffer will not necessarily shield an employer from the long reach of the FLSA.
A proactive discussion of these factors and the surrounding issues with your clients might just head off a costly multimillion dollar, multiyear class action.
Veronica Nannis is a principal in Joseph Greenwald & Laake’s Greenbelt, Maryland, office.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Monet Eliastam, Alexander Vainer, and Rheanna Behuniak, et al. v. NBC Universal Media LLC, Case 1:13-Cv-04634, in the U.S. District Court for the Southern District of New York.
[2] 29 U.S.C. § 203(g).
[3] Eric Glatt, Alexander Footman, Eden Antalik, and Kanene Gratts, et al. v. Fox Searchlight Pictures Inc., et al., Case 1:11-Cv-06784-WHP-AJP, in the U.S. District Court for the Southern District of New York.
[4] The interns argued that in the FLSA, Congress adopted, “‘the broadest definition [of ‘employ’] that has ever been included in any one act.’” Zheng v. Liberty Apparel Co., 355 F.3d 61, 69 (2003) (quoting U.S. v. Rosenwasser, 323 U.S. 360, 363 n.3 (1945)).
[5] 330 U.S. at 152-53.
[6] Citing Tony & Susan Alamo Found. v. Sec’y of Labor, 471 U.S. 299, 302 (1985).
[7] Citing Goldberg v. Whitaker House Coop. Inc. 366 U.S. 28, 33 (1961).
[8] Judge Pauley’s Memorandum and Order is publicly available athttp://www2.bloomberglaw.com/public/desktop/document/Glatt_et_al_v_Fox_Searchlight_Pictures_Inc_Docket_No_111cv06784_S
[9] Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 525 (S.D.N.Y. 2013) on reconsideration in part, No. 11 CIV. 6784 WHP (S.D.N.Y. Aug. 26, 2013) and motion to certify appeal granted, No. 11 CIV. 6784 WHP (S.D.N.Y. Sept. 17, 2013).
[10] Glatt v. Fox Searchlight Pictures Inc., 293 F.R.D. 516, 527 (S.D.N.Y. 2013).
[11] Xuedan Wang v. Hearst Corp., 293 F.R.D. 489, 494 (S.D.N.Y. 2013) (emphasis in original).
[12] The DOL test includes the following factors:
1. the internship, even though it includes actual operation of the facilities of the employer, is similar to training which would be given in an educational environment;
2. the internship experience is for the benefit of the intern;
3. the intern does not displace regular employees, but works under close supervision of existing staff;
4. the employer that provides the training derives no immediate advantage from the activities of the intern; and on occasion its operations may actually be impeded;
5. the intern is not necessarily entitled to a job at the conclusion of the internship; and
6. the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.
[13] See also numerous recent (though unreported) related opinions, including: Fraticelli v. MSG Holdings LP, No. 13 CIV. 6518 JMF (S.D.N.Y. May 7, 2014) (denying plaintiffs/unpaid interns’ motion for conditional certification); O’Jeda v. Viacom Inc., No. 13 CIV. 5658 JMF (S.D.N.Y. Apr. 4, 2014) (granting plaintiffs/unpaid interns’ motion for conditional certification); Wolfe v. AGV Sports Grp. Inc., No. CIV. CCB-14-1601 (D. Md. Nov. 3, 2014) (denying employer’s motion to dismiss a putative class action brought by unpaid interns).
In a recent article for The Daily Record, family lawyer, Jeffrey Greenblatt discusses the role of prenuptial agreements for same-sex couples. With the ongoing upheaval in laws governing same-sex relationships, it’s crucial for people to understand the implications of family law prior to committing to a same-sex marriage. Greenblatt explains, “For example, differences in and definitions for eligibility for employment benefits, child custody, and grounds for divorce are just a few areas of the law that same-sex couples will need to consider when entering marriages.”
Greenblatt raises important issues for same-sex couples to consider before marriage, including employment benefits, child custody and grounds for divorce. Despite a rapidly changing landscape for same-sex couples, it’s still possible to draft a prenuptial agreement that will be enforceable in the future should it come into play.
For more information on same-sex prenuptial agreements or other family law matters, contact Jeffrey Greenblatt at jgreenblatt@jgllaw.com.
The Holidays can be a stressful time for intact families; adding separation and/or divorce into the mix can feel like you’re jumping out of the frying pan and into the fire. Your children may be especially sensitive during this time, especially if the separation is recent or this is their first Holiday without the other parent. Managing both their and your expectations can help reduce the negative effects of divorce on children, avoid crushed feelings and dampened holidays. Below are several tips for making the Holidays a success when coping with divorce or separation:
1. Know Your Holiday Schedule: If you have an existing custody order, refer to it early and often. You should be familiar with which parent has each Holiday, the days/times of the Holiday, who is responsible for transportation, and when the regular access schedule resumes. You do not want to find yourself planning an out-of-town Thanksgiving trip only to discover the day before that it is actually the other parent’s Holiday.
If there is not an existing custody order, try to reach out to the other parent (through counsel, if appropriate) and get an agreement in place. Make sure that it is in writing! Try to create a Holiday schedule early in the separation process so that you are not forced to make last minute decisions or plans.
If working out a schedule is impossible, you can seek relief from the Court and request that the Court set a Holiday schedule on an emergency basis. It’s important to remember, however, that you may not like what the Court decides if the Court even entertains such a request as an emergency.
2. Plan Ahead: If possible, plan your Holiday travel and activities ahead of time and keep the other parent in the loop. If you and the other parent are splitting a Holiday, e.g. you have Christmas Eve through 9:00 a.m. on Christmas morning and the other parent has Christmas morning through New Year’s Day, make sure that your plans do not interfere with the other parent’s time.
It’s also important to keep your kids in the loop. For example, if the children are transitioning to the other parent’s home at noon on Christmas Day, let them know. Kids need to feel that they have some control over the process too. Also, they will want to pack their favorite toys, clothes, and activities to bring with them. Both you and they will be happier (and avoid emotional meltdowns) if you are not scrambling at the last minute to get the backpack ready to go to Mom’s or Dad’s.
3. Keep Transitions as Smooth as Possible: This is part and parcel of keeping the other parent in the loop. If you are traveling from Philadelphia back to the DC area on Sunday, will you be able to transition the children at the same time and place or will you need the other parent to meet you half-way or at another location?
It may be tempting, but do not use the transitions as a chance to engage in an argument with the other parent. If this is impossible, ask a third party to be there with you (someone who won’t add heat to the flame!). Remember, this is about your kids and not about your ex.
4. Don’t “Out-Do”: Do not try to “out-do” the other parent and buy the children expensive gifts or trips. The children will see through it and you will just create bad feelings between you and the other parent.
If you feel like the other parent is trying to “one-up” you, don’t let it get to you and remember: the kids are just happy to be with you, especially right now when they want parent/family time.
5. No Bad-Mouthing!: Seriously, just don’t. Nothing good will come of commenting to the children about the quality of the other parent’s presents, whether they were late picking the children up, or anything else. Your kids will hear what you’re saying and it will either cause animosity between the kids and the other parent or the kids and you. In addition, if the other parent gets wind of it, they may use your behavior against you in a custody proceeding. Save the griping for when you are alone with your friends.
7. Remember The Holidays Are Really About Family: The time that you spend with your children and other family members is the most important. Don’t let your separation or divorce impinge on an otherwise happy and joyful time.
On BluPrint’s Radio – Business Talk Show, Jay Holland addressed key changes in the Family Medical Leave Act (FMLA). The Blog Talk Radio show focuses on new developments to the FMLA and how proposed regulatory changes related to same-sex marriage will impact employees and employers.
As principal at Joseph Greenwald & Laake, Holland is an esteemed Labor & Employment litigator known for taking on difficult cases and achieving exceptional results. He often speaks on employment law and frequently provides insight to the media.
Attendees will learn more about the latest regulatory changes impacting Maryland businesses and preview the potential issues up for debate in the 2015 General Assembly session.
Holland’s session, Regulating Employer Hiring Decisions will focus on the trends attacking employers hiring policies. In a concurrent session, Emerging Legal Landscape of Discrimination, Markovitz will explore the new Maryland law prohibiting gender identity discrimination and steps to comply with the law.
The conference will take place at the Westin Annapolis Hotel, starting at 8:30 a.m. and wrapping up at 4:30 p.m. For the full agenda, visit the Maryland Chamber of Commerce site here. Registration fees are $125 for members and $200 for nonmembers. Attendees can register online or by contacting Kristen Solis at (410) 269-0642 or ksolis@mdchamber.org.
Have you received a subpoena from an administrative agency that is seeking documents or an interview with you? What next?
A subpoena is simply an order from a court or government agency. This post deals with subpoenas issued by government or administrative agencies. Most licensed professionals (think doctors, psychologists, dentists, and social workers) are regulated by agencies with subpoena powers. Typically, a subpoena seeks to compel a person’s attendance at a hearing or produce documents that a government agency is seeking as part of an investigation. A subpoena may seek privileged information or testimony potentially implicating the Fifth Amendment right against self incrimination.
If you receive a subpoena from a government agency, do not ignore it. There is a misperception that licensed professionals can ignore the administrative subpoena if it seeks privileged or confidential documents. This is not correct.
Maryland law is clear: If you are served with an administrative subpoena, you must respond by producing the requested information or challenge the subpoena in court by filing a timely motion to quash or request a protective order.
There is great risk if you fail to respond or challenge the subpoena in court. Individuals who refuse to respond risk being professionally disciplined with obstructing or failing to cooperate with an investigation, which can have serious consequences for a professional’s license. For example, in Md. State Bd. of Physicians v. Eist, 417 Md. 545 (2011), the Board of Physicians issued a subpoena to a psychiatrist for privileged records related to his treatment of a patient. Even though the patient refused to consent to the disclosure of the privileged records, the Board charged and ultimately found that the psychiatrist failed “to cooperate with a lawful investigation conducted by the Board.” Id. at 552. Most regulated professions have similar requirements.
The psychiatrist eventually turned the records over and the Board dismissed the underlying complaint, but pursued the disciplinary charge related to obstructing the Board’s investigation. In determining that the Board of Physicians correctly found that the psychiatrist failed to cooperate with an investigation, the Court of Appeals explained that “when the Board is investigating a complaint against a health care provider and subpoenas certain medical records in his or her possession, the health care provider is required to provide the medical records to the Board regardless of the patient’s authorization.” Id. at 564. The Court of Appeals’ decision illustrates the broad authority licensing agencies possess. See Dr. K. v. State Bd. of Physician Quality Assurance, 98 Md. App. 103, 120 (1993) (“To give a patient, in effect, a veto over the Board’s power to regulate licensed physicians would be to eviscerate the Board’s ability to protect the larger public interest.”).
If you receive an administrative subpoena, it is imperative to comply with the subpoena or challenge the subpoena in court. Do not ignore it.
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