As if proliferating collective actions, class actions and Department of Labor investigations and enforcement actions for wage-hour and Family and Medical Leave Act violations weren’t enough, American businesses may now face even more legal challenges from employees. The 400,000-member American Bar Association has agreed to partner with the U.S. Department of Labor to establish an attorney-referral service to facilitate workers’ complaints under the Fair Labor Standards Act and FMLA.
Vice President Joe Biden, Attorney General Eric Holder, and Secretary of Labor Hilda Solis were among the dignitaries at the White House ceremony on November 19 announcing the new alliance. They were joined by ABA President-elect Wm. T. (Bill) Robinson III and current ABA President Stephen Zack, who said, “A significant number of Americans lack meaningful access to our justice system. Even for moderate-income working people, this barrier to access is primarily financial in nature. Too many simply cannot afford the cost of counsel to help them resolve their legal problems.” According to the partners, the new arrangement will give more employees access to the justice system.
And what of employers – the prospective defendants in all this? The prospect of more claims and lawsuits means an even greater emphasis must be placed on self-analysis and corrective action. Employers must audit their wage and hour practices, looking at such issues as purported independent contractor status, the proper classification of employees (exempt or non-exempt), overtime calculations, breaks, payroll procedures, donning and doffing, and recordkeeping, among others. In the FMLA context, proper notifications to employees, determinations of eligibility for and duration of leaves, handling of intermittent leave issues, coordination of worker’s compensation leave, leave relating to military service, and refining policies and procedures to address abuse of leave, are among the concerns to be considered. State law issues also must be considered, even if technically ancillary to the federal-ABA initiative. (A number of states are cracking down on supposed misclassification of employees; several boast their own leave statutes.)
Once a self-analysis is completed, management must decide what deficiencies, if any, are present. It must then undertake steps to bring the business into compliance with these laws and related DOL regulations. Correction is essential, but may give rise to new difficulties as employees gain increased awareness of their rights. Expect questions. Be prepared with answers. Where significant numbers are involved, budgeting may have to be adjusted to reflect additional, unanticipated wage costs. Staffing may have to be modified. These dislocations, in turn, may prompt employers to look at ways in which cost savings may be effected, such as by outsourcing, subcontracting, or introducing labor-saving equipment. There could be a downside for employees from a surfeit of wage-hour and FMLA lawsuits.
The ABA leadership may have been motivated by the most exalted of reasons. But we wonder if it consulted its member-corporate counsel, and their clients who face legal attacks all too often, before signing on as the employers’ adversary at the government’s behest.