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Category Archives: Labor Law

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Roundup: Recent Business Developments

Posted in Health Care Lending, Labor Law, Product Liability, Summary of PorterWright blog posts

The first six weeks of 2014 have been abundant with news and cases that provide insight for financial institutions (and other businesses) that need to be aware of regulatory, legislative and judicial developments and how they affect the U.S. business environment.

Porter Wright attorneys have written several alerts and articles about recent cases and best practices; we offer a summary below.

A merger for better healthcare…no problem, right? Wrong, says the FTC

By now, you likely are accustomed to hearing about the federal government challenging the merger of two hospitals or health systems. More often than not these days, the federal government wins. That is true even in the face of claims by the parties the merger is necessary to reduce costs and/or improve the quality of health care provided — the very foundation for the Affordable Care Act.…


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‘Tis the Season For Holiday Workplace Issues

Posted in Labor Law

As much as everyone loves them, the holidays create increased risk of employer liability and can result in a long list of legal problems for an unprepared employer. Our colleagues over at Employer Law Report have provided their top five holiday headaches for employers and compiled their posts into an eBook with a bonus stocking stuffer FMLA-holiday Q&A.

Check out their post which covers:

  • Avoiding Holiday Party Liability When the Office Santa Tries to Teach His Employees a Few "Reindeer Games";
  • Being Inclusive Without Being A Grinch;
  • "Holiday Attire" Does Not Include "Beer Goggles";
  • Holiday Pay and How Not to Get Scrooged by The FLSA;
  • What if Santa Was the One Who Got Run Over By a Reindeer?; and
  • Three FMLA Stocking Stuffers: How to Avoid a Big Lump of Coal (bonus).

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Hot topics affecting your bank

Posted in Bank Regulation, Commercial Loans and Leases, Labor Law

From time to time we deviate from our normal prose on the banking and finance industry and give you, our reader, insight into other areas of the law that impact your business. A recent post regarding overhauling the Ohio employee-friendly employment discrimination law, Senate Bill 383, tops our list of quality reading material.

The post, ‘Senate Bill 383 is an Ohio employer’s wish list,’ from our Employer Law Report blog discusses significant amendments introduced to the Ohio Senate. In particular, Sara Hutchins Jodka goes into detail portions of the bill including defining employers to exclude managers and supervisors, limiting the statue of limitations to 365 days for discrimination and retaliation claims and put a statutory cap on noneconomic and punitive damages.…


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Ohio Supreme Court Rules On The Enforcement Of Non-Compete Agreements By The Surviving Company In A Merger

Posted in Labor Law

The Ohio Supreme Court ruled 4-3 on May 24, 2012, that following a merger the surviving company may not be able to enforce employees’ non-compete agreements where the agreements fail to contain an assignment clause and the time period of the employees’ non-competes began to run as of the date of the merger.

In Acordia of Ohio, L.L.C. v. Fishel et al., the Ohio Supreme Court ruled that a merger causes the original corporate party to non-compete agreements to cease to exist, while the surviving company takes ownership of the agreements. But where the non-compete agreement fails to contain an assignment clause, the surviving company may not enforce the non-compete agreement as if it “stepped into the shoes” of the company that had originally contracted with the employees. Although the employees’ non-compete agreements transferred automatically by operation of law to the surviving company, the Ohio Supreme Court held that the non-compete agreements at issue provided only that the employees would avoid competition following their termination from the specific company identified in the non-compete agreements. Because the non-compete agreements did not state they could be assigned or would carry over to a successor, the Ohio Supreme Court ruled that the named parties intended the agreements to operate only between themselves — the employees and the specific employer. According to the Acordia decision, the termination of the employees’ employment with the original company was triggered by the merger, which commenced the running of the non-compete periods. These periods expired on their


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NLRB Posting Rule Postponed Indefinitely

Posted in Labor Law

Bankers and other employers should note that the National Labor Relations Board (NLRB) has postponed indefinitely the effective date for its employee rights posting requirement. The posting rule, which was to have taken effect April 30, 2012, required all employers to post in the workplace a notice advising employees of their rights to engage in union organizing. The proposed posting rule has generated a great deal of controversy. 

Lawsuits challenging the rule filed by the United States Chamber of Commerce, the National Manufacturer’s Association, and other employer interest groups are pending in two federal courts.  Initial decisions in the lower courts were inconsistent.

In March the federal District Court for the District of Columbia upheld the NLRB’s right to impose the rule. Then, on April 13, a District Court in South Carolina ruled that the NLRB does not have the right to impose the posting requirement. The decision from the District Court for the District of Columbia has been appealed to the D.C. Circuit Court of Appeals and it is expected the NLRB will appeal the South Carolina District Court decision to the Fourth Circuit Court of Appeals. On April 16, the D.C. Circuit Court of Appeals issued an injunction barring the NLRB from enforcing its rule while the appeal in that Court is pending.

The NLRB has decided to delay enforcing its rule while the legal challenges are pending.

Employers have not seen the last of this issue, but it appears it will be at least a number of months before anything changes. The D.C. Court …


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Arguments Begin In Legal Challenges to NLRB Posting Rule

Posted in Labor Law

As we reported previously, the National Labor Relations Board ("NLRB") issued a rule in August requiring all employers to post workplace notices about employee rights to join a union. This effort by the NLRB to require posting about union organizing rights in all workplaces has caught the attention of the employer community more than any NLRB action in recent memory. The rule reaches into the workplace of all employers except for those few which are outside of the NLRB’s jurisdiction. [See our earlier post that outlines NLRB jurisdiction]. Briefly, if you are wondering if you are covered, you probably are covered. The original effective date for the rule was to have been November 14, 2011, but that effective date was delayed when lawsuits were filed in two federal district courts challenging the NLRB’s authority to issue such a rule. The new effective date is January 31, 2012 and the arguments in the lawsuits challenging the posting rule are beginning to take shape.…


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Building a Model for a Defensible Reduction-in-Force

Posted in Labor Law

The continuing struggle to improve the economy leaves many financial institutions of all sizes still looking for ways to improve  efficiency and profitability. Often the resulting business strategy includes cut backs in personnel.  But a reduction in the workforce that is not carefully planned and documented can result in costly and sometimes difficult to defend lawsuits and other legal challenges that can off-set the intended economic benefit. It is very common after a reduction-in-force for legal claims to be pursued by terminated employees, sometimes as multiple-plaintiff lawsuits. Possible claims include allegations that the reason for selection of a person to be terminated was illegal (i.e., age, race, sex, medical condition, use of FMLA, whistleblower, etc.). A successful defense requires showing not just that there were legitimate reasons to reduce the workforce but also the specific legitimate reason that the complaining employee was selected for termination. Not having a carefully planned and documented approach to the decision-making can result in time-consuming and expensive litigation. Also, a well-planned and documented approach to the reduction-in-force will promote reasoned, careful, and sound business decisions, which support the Company’s overall objective for reducing costs and improving efficiency.

 Here is a brief outline of steps that should be included in any plan for implementation of a reduction-in-force:…


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NLRB Issues Final Rule Requiring All Employers to Post Notice About Union Organizing Rights

Posted in Labor Law

On December 27, we wrote a blog post regarding the NLRB proposed rule-making to require all employers to post notices advising employees of their rights to engage in union organizing. After a period of public comment, during which about 7,000 responses were submitted to the NLRB, the NLRB has now issued its final rule requiring the posting.

Effective November 14, 2011, all private sector companies covered by the National Labor Relations Act are required to post in the workplace a specific notice advising employees of their rights under the National Labor Relations Act to engage in union organizing, to bargain through a union with their employers, and to refrain from those activities. The notice also gives examples of employer and union conduct which is considered illegal and tells employees of actions they can file with the NLRB to enforce their rights. Here is a link to the NLRB announcement, which includes a copy of the required posting (as an Appendix.)  The NLRB promises that by November 1st, the posting will be available for downloading from the NLRB web site and that hard copies will be available from NLRB Regional Offices. All employers will be required to post the notices in conspicuous areas of the workplace where other employment notices are posted. Also, employers that routinely post notices regarding personnel rules or policies on an Internet or intra-net site will be required to post the new NLRB notice on those sites. However, employers are not required to distribute the notice to …


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The U.S. Department of Labor Opines That Mortgage Loan Officers And Similar Employees Are Non-Exempt Under the Fair Labor Standards Act

Posted in Labor Law

Due to recent guidance from the U.S. Department of Labor, financial institutions should examine their classification of mortgage loan officers and similar employees. Last month, the DOL’s Wage and Hour Division released its first Administrator Interpretation (Interpretation No. 2010-1). In the Interpretation, the Division concluded that mortgage loan officers – and employees performing the typical duties of a mortgage loan officer – do not qualify as administrative employees exempt from the provisions of the Fair Labor Standards Act.

The Interpretation states that the typical job titles given to such employees include “mortgage loan representative,” “mortgage loan consultant,” and “mortgage loan originator.”  It also lists the job duties of such individuals as:  receiving internal leads, contacting potential customers, collecting required financial information from loan applicants, entering collected financial information into a computer program that identifies which loan products may be offered to customers, assessing the loan products identified, discussing with the customers the terms and conditions of particular loans, compiling customer documents for forwarding to an underwriter or loan processor, and/or finalizing loan documents for closings.

Administrative employees are exempt from the minimum wage and overtime requirements of the FLSA. In a 2006 opinion letter, the DOL had previously opined that mortgage loan officers were administrative employees, and therefore exempt under the FLSA. See FLSA2006-31. However, the agency specifically withdrew that opinion letter in its recent Interpretation, finding that such employees are “production, rather than administrative employees” because they have a primary duty of sales, rather than of …


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Ohio WARN Legislation Proposed

Posted in Labor Law

Ohio employers will want to pay close attention to H.B. 434, which was proposed by House Representative Kenny Yuko, D-Richmond Heights, last week. The Bill is similar in nature to the Worker Adjustment and Retraining Notification Act ( “WARN”), but goes further than the federal law in several respects. For example, the Bill would require an employer in Ohio laying off 25 or more employees in any 30-day period to give at least 90-days’ advance written notice of the layoff to affected employees, local workforce policy boards, and certain state departments and local elected officials. The notice period would be expanded to 120 days for employers planning to lay off 250 or more employees. Also, the penalties for violations include double back pay for all affected employees, as well as the full value of their employee benefits.

The Bill does contain exceptions similar to those found in WARN, including exceptions for temporary facilities, layoffs arising from “circumstances that were not reasonably foreseeable,” caused by “physical calamity, natural disaster, or act of war,” or where the employer can show that "notice would have blocked incoming capital which might have prevented the layoff.” 

H.B. 434 is still in the very early stages of the legislative process. However, because it would expand employer advance notice obligations in several respects beyond WARN’s requirements, it bears watching – and perhaps warrants a call to your State representative.  You can stay updated on H.B. 434 by subscribing to www.employerlawreport.com, a blog on employment related matters from Porter Wright Morris & Arthur.…


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