Archive for October, 2012

IRS Gives Storm-Affected Businesses Until Nov. 7 to Make Required Filings

Businesses in areas affected by Hurricane Sandy can have until Nov. 7 to file returns and accompanying payments normally due on Oct. 31, the IRS announced today.

In its announcement, IRS said that the relief applies to taxpayers and tax preparers in an area affected by Hurricane Sandy or otherwise impacted by the storm that hit the Mid-Atlantic and Northeastern United States this week.

This relief primarily applies to businesses whose payroll and excise tax returns and payments are normally due today, IRS said. No action is required by the taxpayer; this relief is automatic. Regular federal tax deposits are due according to current rules. However, the IRS notes that if taxpayers or tax practitioners receive a penalty notice for this period, they can contact the IRS at the number on the notice to request penalty abatement due to reasonable cause on account of the storm.

IRS expects to grant additional filing and payment relief as qualifying disaster declarations are issued by the Federal Emergency Management Agency (FEMA). Details will be posted on the Tax Relief in Disaster Situations page on

DOL Files Subpoena Enforcement Action Against Forever 21

The U.S. Deparment of Labor announced last week that it has gone to court to enforce a subpoena seeking employment records from clothier Forever 21. DOL said it is investigating whether the Los Angeles-based retailer’s vendors and subcontractors are violating the Fair Labor Standards Act’s minimum wage, overtime, and recordkeeping requirements.

Fighting a subpoena is an uphill battle, as the law gives enforcement agencies like DOL broad authority to require production of relevant evidence in an investigation.

According to a story in the Los Angeles Times, Forever 21  offered to meet with the agency and “promptly responded” to the subpoena with information that resolved the investigation.

Since the store is a big target in the DOL’s investigation of the West Coast garment industry, fighing this subpoena is a risky step that could be costly for the comnpany in legal fees and possibly alienating its customer base.

We’ll see just how far the company wants to take this contest.


No Overtime Pay for Mortgage Bankers, 6th Circuit Rules

Employees seeking overtime pay under the Fair Labor Standards Act continue to run up against the various exemptions to the law. One of these exemptions is for employees who make not less than $455 a week, who primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers, and who exercise discretion and independent judgment on significant matters.

Applying this exemption, the 4th U.S. Circuit Court of Appeals on Oct. 25 ruled that mortgage bankers working for Quicken Loans were not entitled to overtime pay.

To satisfy the management-related prong, the employee’s “primary duty” must involve “work directly related to the management or general business operations” of the company or its customers.  According to the U.S. Department of Labor:

“Employees in the financial services industry generally meet the duties requirements for the administrative exemption if their duties include work such as collecting and analyzing information regarding the customer’s income, assets, investments or debts; determining which financial products best meet the customer’s needs and financial circumstances; advising the customer regarding the advantages and disadvantages of different financial products; and marketing, servicing, or promoting the employer’s financial products. However, an employee whose primary duty is selling financial products does not qualify for the administrative exemption.”

The evidence supported the jury’s finding that the first sentence of this statement more aptly described the mortgage bankers’ “primary duty” than the second, the appeals court said.

As to the discretion-and-independent-judgment prong,  Quicken had to show that the mortgage bankers’ “primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.”

The appeals court summarized thusly: “The jury concluded—after listening to forty witnesses and five weeks of testimony—that the mortgage bankers’ interactions with customers fit this description. That is a reasonable finding of fact, leaving us no basis for disturbing it.”

Read the entire opinion here.

EEOC Recovers $95K For Arab Employee Taunted, Fired After 9/11

Justice can take a while, and for an employee of Egypitian origin who was discriminated against and harassed after the 9/11 attacks, thinks were set right when the Equal Employment Opportunity Commission announced a settlement of a national origin claim against his former employer, Sierra Pacific Industries.

The EEOC annnounced on Tuesday that it has secured $95,000 for Ahmed Eishenawy, who complained that after 9/11 his co-workers at the company’s Red Bluff, Calif. plant called him “Osama,” “f—ing Arabian,” and “camel jockey.”

Elshenawy complained and was thereafter subjected to complaints by co-workers. Further, the EEOC said, the company retaliated against Eshanaway by subjecting him to harsher discipline, ultimately terminating him in 2004.

Besides the monetary settlement, the two-year  consent decree provides that Sierra Pacific Industries will conduct yearly training of employees, report the details of any future complaints of national origin discrimination or retaliation, revise its anti-discrimination policies and post information regarding the decree for current employees.

Sierra Pacific Industries owns and harvests forests in California and Washington.

4th Cir.: No Overtime Pay Required for Executive Assistant

An executive’s assistant was exempt from overtime pay under the Fair Labor Standards Act and Maryland wage and hour law because her job required significant exercise of discretion and independent judgment, the U.S. Court of Appeals for the Fourth Circuit ruled recently.

The assistant reported to the CEO of Federal Realty Investment Trust  (FRIT), in Maryland, holding the job from the fall of 2003 through the spring of 2010. She maintained that she spent more than 50 percent of her time doing such tasks as coordinating the CEO’s travel arrangements, monitoring his e-mail and calls while he was away from the office, and helping him in his work with several professional organizations.

The assistant asserted that (1) she routinely worked more than 40 hours a week at FRIT, (2) she spent 70 to 80 percent of her time performing personal work for the CEO and his family, and (3) she should be classified as nonexempt and paid overtime

Section (7)(a)(1) of the FLSA requires that employers pay their employees time and a half for work over forty hours a week.  However, the FLSA provides an exemption from this overtime requirement for persons “employed in a bona fide executive, administrative, or professional capacity.”

The appeals court said that the assistance didn’t meet the exemption test since her “primary duty” included the exercise of discretion and independent judgment with respect to matters of significance. That, rather than the percentage of her time spent on various tasks, meant she was clearly exempt from overtime pay.

The case is Altemus v. FRIT,  No. 11-2213 (2012).

The decision was unpublished, meaning you’re not supposed to cite it as precedent. But it’s still a window into the court’s thinking, and could influence another decision down the line.

PetSmart Not Liable in Same-Sex Harassment Case, Court Holds

If you want an example of the right way to handle a sexual harassment complaint, then take a look at this week’s decision by a federal district court in Kentucky exonerating PetSmart.

The court held that the pet food and supplies chain responded appropriately to a complaint by a dog trainer that a male co-worker had harassed him.  Granting summary judgment to the company, the court said it took reasonable steps to prevent harassment and promptly investigated the alleged victim’s complaint.

The judge found that the company had in place a strict anti-harassment policy that provided employees with “multiple, alternative avenues” to complain about purported harassment, including an anonymous toll-free hotline.

When the alleged victim finally used the hotline to report the purported offensive conduct, company officials conducted an immediate investigation and fired the alleged harasser three weeks later, the court said.

These actions were enough to negate liability under Title VII of the 1964 Civil Rights Act in this case of alleged co-worker harassment, the court concluded. And they would have negated liability even if the harasser was the alleged victim’s supervisor, the court said.

The case is Harris v. PetSmart Inc., E.D. Ky., No. 11-00094, 10/23/12.

Report: Congress, Other Legislative Branches Named in 196 Complaints in 2011

It turns out that congressmen and senators and other legislative branch offices are no strangers to complaints of employment discrimination.

The legislative branch, including members of Congress, was named in 196 complaints filed in fiscal year 2011, compared to 168 in fiscal year 2010, according to a report issued this week by the Office of Accountability, which enforces discrimination laws against these offices.

More than half (101) complaints alleged discrimination or harassment based on race or color, the report said. “Sex/gender/pregnancy,” which does not include sexual orientation, was the next highest category, followed by disability.

The U.S. Capitol Police faced 63 complaints, the most of any entity.

Under the Congressional Accountability Act, employment discrimination laws apply not only to Houes and Senate members, but also the Congressional Budget Office, the Government Accountability Office, and the Library of Congress.

Here’s a copy of the report, which also details safety and health accessability in these legislative branch agencies.


Baltimore County Pension Plan “Inherently Discriminatory,” Court Finds

Baltimore County, Maryland’s pension plan, which requires older employees to contribute more in order to receive the same benefit as younger employees, is inherently discriminatory, the federal district court in Maryland found yesterday.

Handing the Equal Employment Opportunity Commission a victory, the court found that there was no financial justification for requiring the older employees to contribute more, and that the county had been given ample opporunity to conduct full discovery, including deposing Buck Consultants, the actuarial firm responsible for the pension plan.

The case now proceeds to a determination of what damages the older employees are owed.

The ruling continues a string of recent victories for the EEOC against public employee retirement systems. This trend comes as something of a surprise since the U.S. Supreme Court’s 2008 ruling in Kentucky Retirement System v. EEOC. In that case, the high court ruled that Kentucky’s plan, which based an employee’s pension on his last years of service, without imputing any additional years for the time he was on disability, did not violate the ADEA.

But since that ruling, the EEOC has settled pension rights case against Minnesota public agencies and an Arizona school district.

Read the EEOC’s announcement in the Baltimore County case.

U.S. Attorney Prods Retired NYC Employees to Join USERRA Rights Action

Apparently the miscalculation of pension benefits for retired New York City employees who joined the military after the 9/11 attacks was more widespread than originally thought.

A lawsuit alleging retired New York City police officers were denied pension benefits when they went into active military service after the Sept. 11, 2011, terrorist attacks is being expanded to include all retired NYC employees who fit that description.

In a press release issued today, the U.S. Attorney for the Southern District of New York, Preet Bharara encouraged retireed employees to come forward if they believe they are not getting the pension benefits they are entitled to under the Uniformed Services Employment and Reemployment Rights Act (USERRA).

That law requires that employees who go on military leave suffer no adverse effects on their pay, position, or benefits–just as though they had stayed on the job and not gone off to war.

“We are now encouraging any covered City employee who thinks his or her benefits were unlawfully calculated to come forward by contacting our Office so we can assess whether the unlawful practices identified with respect to the NYPD extend to other City agencies as well. Each and every City employee who was called to active military service is entitled to have his or her pension calculated consistent with USERRA,” Bharara said.

The announcement said that the U.S. Attorney’s Office has received dozens of inquiries from veterans who worked for other city agencies, prompting the expansion of the investigation.

The Justice Department filed this suit in August on behalf of current and retired NYPD officers who have performed active military service since Sept. 11, or who will do so in the future. According to the complaint, the City unlawfully calculates the pensionable earnings of NYPD officers called to active military duty by relying exclusively on their base pay rate, instead of including the overtime or night shift differential compensation they would have earned had they not been on active military duty, as required by USERRA. As a result, service members are being deprived of pension benefits they would have been reasonably likely to receive, but for their military service.

For more information on the suit, see my previous post.

DOL Settles Discrimination Complaints Against Two Federal Contractors

Two recent reminders from the U.S. Department of Labor that if you do business with the federal government, it will hold your feet to the fire if there is evidence you’ve not given minorities and women fair opportunity at being hired.

The department’s Office of Federal Contract Compliance Programs announced that Meyer Tool Inc. Meyer Tool Inc. has agreed to settle allegations of hiring discrimination on the basis of race involving 60 African-American applicants who were rejected for entry-level machinist positions at the company’s manufacturing plant in Cincinnati. Under the terms of the agreement, Meyer Tool will pay $325,000 to the 60 applicants and extend job offers to at least 11 members of the original class as positions become available.

In the second settlement, Minnesota-based Lund Boat Co. and its parent company Brunswick Corp. settles allegations that the companies systematically discriminated against women who applied for entry-level positions at Lund’s boat manufacturing plant in New York Mills, Minn.  Under the terms of a consent judgment approved by the department’s Office of Administrative Law Judges, Brunswick and Lund have agreed to pay $295,000 in back wages and interest to 185 female job applicants who were rejected for employment. The companies will also extend job offers to at least 27 women in the original class as general laborer positions open.

These particular settlements fall under Executive Order 11246, which forbids discrimination against minorities and women. But the OFCCP also enforces Section 503 of the Rehabilitation Act of 1973, which requires affirmative action for persons with disabilities, and the Vietnam Era Veterans Readjustment Assistance Act, which prohibits discrimination because a person is a veteran.

You can read more at the OFCCP’s web site