Imagine applying for a mortgage or commercial loan on Amazon or shopping for a checking account via an App on your Iphone. As many in the financial services industry may already know, there are a new brand of startups known as “Fintech” companies who are rapidly becoming viable alternatives to traditional wealth management. “Fintech,” which is abbreviated from financial technology, are various startup companies who are utilizing technology to make traditional financial services more efficient – for example, mobile payments, money transfers, loans, fundraising and asset management. Fintech companies can provide users with a variety of financial services that were once exclusively within the purview of a traditional bank (from facilitating investments, financial planning to underwriting). Fintech startups are geared towards giving the consumer a more personalized and efficient product than currently exists. If the trends continue, Fintech companies will cause the technological areas of consumer banking to undergo significant changes.
Fintech companies are capitalizing on digital technology to transform the way consumers access financial services and information.
As many Lenders know, consumers are increasingly demanding customer centric solutions that give instantaneous, tailored responses based on that individual consumer’s needs. A Fintech company can use technology to create a personalized solution for the demanding consumer.
Fortunately for the industry, the emergence of Fintech companies may not be all bad. Lenders who play their cards right may even be able to use a Fintech startup to their advantage. Cooperation between a lender and one or more of these startups could lead to symbiotic relationships. For example, some Fintech companies eliminate the need for financial advisors by providing apps that enable users to keep track of their spending and stay on budget. A Lender with foresight could partner with a Fintech company and offer this service on its own banking platform.
There are three things to look forward to with regards to how Fintech companies will revolutionize the financial services industry:
Fintech companies will cut costs and improve the quality of certain financial services as they are unburdened by regulators (so far…).
Fintech companies will create new ways of assessing risk. By utilizing machine learning and logistics, Fintech startups will change the landscape of risk assessment.
Fintech companies will lead to a more diverse credit landscape. Most Fintech firms are internet based, meaning they are less geographically concentrated than traditional lenders.
Cooperation and partnership will be crucial to a lender/ Fintech relationship. Clearly, Fintech startups will benefit from the reputation, stability, experience and client base of a traditional lender. However, the lenders must be acutely aware of possible legal repercussions of a Fintech partnership. It will be incumbent upon lender to assess the legal risks and regulatory challenges of partnering with these startups.
If in the end a lender can successfully navigate the risks, the upside will likely be worth it. After all, if history has taught us anything, it is that technology should be embraced rather than repudiated.
© Copyright 2016 Murtha Cullina
In Monday’s Green v. Brennan ruling, the U.S. Supreme Court decided that the limitations period for constructive discharge runs from the date the employee gives notice of the intent to resign. The 7-1 outcome was not a surprise following the questioning by the justices during oral arguments. The justices held that the filing period begins when an employee resigns as a result of discriminatory behavior, not when an employer creates an environment so adversarial that an employee feels forced to resign, previously ruled in 2014 by the Tenth Circuit.
The case stems from an original complaint in 2008 by Green, a postmaster in Colorado. Green, who was passed over for a promotion, claimed someone less qualified received the position which caused him to file a discrimination complaint with the equal employment opportunity commission (EEOC).
The court was confronted with three alternative dates by which the limitations period that the EEOC must be contacted would begin to run:
The date Green signed a settlement agreement giving him the option to retire or take a position 300 miles away with a significant pay cut, Dec. 16, 2009, and also the date alleged to be the last act of discriminatory conduct compelling petitioner Green to resign
The date on which Green notified the respondent Postal Service of his intention to resign, Feb. 9, 2010, or,
The date Green’s resignation actually became effective, March 31, 2010.
The choice was determinative because the controlling statute of limitations required Green to contact an EEOC counselor within 45 days of the “matter alleged to be discriminatory,” a notably ambiguous requirement. Green contacted an EEOC counselor on March 22, 2010, 96 days after signing a settlement agreement and 41 days after submitting his notice of resignation. The circuits were split on whether the limitations period ran from the “last discriminatory act” or the date the employee resigns.
The rule represents both interpretive and practical considerations that should be viewed favorable to employers, including:
It places constructive discharge claims on equal footing with ordinary wrongful discharge claims that require both discrimination and notification of being fired
Nothing in the limitations regulation provided an “exception” to the ordinary rule
Practical consideration supported the rule applied because it made little sense to start the clock ticking before a plaintiff could actually file suit
Employers should welcome this outcome and breathe a sigh of relief because of the definitiveness and certainty it brings to both the accrual and repose of limitation periods applying to federal employment discrimination claims.
© 2016 BARNES & THORNBURG LLP
Proposed changes to National Credit Union Administration’s rule on federal credit union (FCU) ownership of real estate and to the Massachusetts credit union parity rules, promise to open new areas of credit union investment in real estate as an ancillary business line. Assuming both proposed rule changes take effect this summer, FCUs and MA state charters will have the ability to buy, develop, own and sell commercial real estate, provided that the FCU eventually (within six years of purchase or such longer period as NCUA may allow) occupies at least half of each property. The remaining space in each property may be leased by the FCU to unaffiliated tenants or to a developer entity, for re-leasing to third parties. In calculating how much of a property a specific CU occupies, space occupied by a CUSO that is controlled – through voting rights, without necessarily majority economic ownership – by the CU may be included.
Combined with last year’s NCUA action which eliminated the 5% cap on fixed asset ownership by non-RegFlex FCUs, NCUA is now about to allow FCUs to acquire commercial properties they can never fully utilize, by treating up to half the property for investment/rental purposes. This will allow FCUs to consider ownership of small strip malls and other income-producing properties which were previously off-limits, and could signal a shift away from leasing and toward ownership as FCUs site their branches and operations centers.
The financial benefit from this major regulatory change can be enhanced if FCUs are able to create CUSO-based joint ventures with private real estate capital sources to reduce the portion of the equity investment required from the credit union. Further regulatory guidance on this potential aspect of FCU real estate investment is needed, but insofar as all FCUs and many state CUs (soon to include Massachusetts, through the currently proposed amendments to its CU parity rules, to allow state chartered Massachusetts CUs to partner with non-credit union co-owners of CUSOs, just as FCUs have been able to do for more than a decade) can through CUSOs partner with non-credit union co-owners/capital sources, it is possible that through a CUSO credit unions may acquire commercial property partly for use and partly for investment/rental, and raise at least a portion of the acquisition’s equity capital from non-CU third party equity sources. Of particular interest is the ability of CU executives to share ownership of CU real estate as partners in a CU-led CUSO, an arrangement that would allow select individuals to co-invest privately in these new real estate ventures. Completing the financing picture could be a commercial first mortgage loan from the sponsor credit union to the CUSO, perhaps with customary limited guaranties from some of the non-CU co-investors in the CUSO.
While this action by NCUA is a welcome step toward more rational, flexible facility ownership and management practices for affected credit unions, and offers those institutions a new ancillary revenue source, NCUA is clear that its action does not allow real estate speculation or full-scale CRE investment by credit unions. All acquired properties must eventually, typically within six years, be at least 50% devoted to housing the CU-owner and/or any CUSO controlled by it.
Whatever deal structures ultimately emerge, NCUA is about to open the door to limited but meaningful credit union equity investment in the kind of commercial real estate deals that previously CUs could finance only on the debt side. And with Massachusetts about to allow state charters to partner with non-credit union co-investors through CUSOs, we can expect to see both federal and state charters here explore equity co-investment opportunities with more traditional real estate investors and developers, and possibly even individual CU executives, as CUs move into this newest investment arena.
LSSO’s annual RainDance Conference is the key resource of the organization. The two-day conference is filled with high-level interactive sessions, roundtables and lively discussions with industry thought leaders.
When: June 7 & 8, 2016
Where: The Mid-America Club, Chicago, IL
RainDance offers less of the theory and more of the practical, effective sales and service strategies for attendees to bring back to their firm and implement immediately. With an intimate setting, you can expect open and honest dialogue among the attendees about the challenges they face in meeting the demands of the increasingly competitive and evolving industry.
RainDance is for firm leaders who have significant responsibilities for client retention, client growth, new business development, client service, and process improvement strategies to shape the future of their firms. It is recognized and known for attracting the highest caliber of attendees who are often regarded as the thought leaders in their firms and those who help shape the industry.
The Legal Sales and Service Organization, Inc. was launched on August 8, 2003. At that time, law firms were beginning the evolution from marketing to incorporate business development and service initiatives.
Legal departments became ever more demanding of their firms and increased their use of process improvement tools, like Six Sigma and Lean, internally. However, law firms did not have the resources or tools in the areas of business development, service excellence and quality initiatives. LSSO was created to fill those needs.
Then and especially now, law firm leaders have ever-greater responsibilities for the future of their firms. The market is crowded and highly competitive. Clients are sophisticated buyers. As such, lawyers and law firms must employ effective sales and service strategies, whether they are responsible for bringing in new business or developing and retaining clients through service delivery.
Covered Entities need to continue to check their inboxes for emails from the HHS Office for Civil Rights (“OCR”) requesting verification of contact information in connection with Phase 2 of the HIPAA Audit Program. OCR previously indicated that Covered Entities would begin to receive verification emails in May. We understand that Covered Entities continue to receive emails requesting contact information verification this week.
Emails are sent from OSOCRAudit@hhs.gov and request a response from the entity verifying its information within five days. A sample copy of the email is available from OCR’s website. The receipt of an email requesting contact verification does not necessarily mean that an entity will ultimately be selected for an audit. Covered Entities can begin to prepare for the next step in the audit process by reviewing OCR’s audit pre-screening questionnaire.
For the time being, Business Associates are not being contacted. OCR will request a list of Business Associates from Covered Entities and plans to begin contacting Business Associates selected for audit this summer. Business Associates should use this extra time to ensure that they are ready for an audit should they be selected. OCR has provided a sample template for Covered Entities to use to list their Business Associates.
In order to assist covered entities and business associates with their HIPAA compliance efforts, we have repackaged the audit protocol into a more user-friendly format that can be downloaded here.
©1994-2016 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.
The National Labor Relations Board is set to decide if the same test used to determine whether teaching employees of a religious school are subject to the Board’s jurisdiction should be extended to non-teaching employees. Islamic Saudi Academy, Case 05-RC-080474 (May 12, 2016).
In Pacific Lutheran University, 361 NLRB No. 157 (2014), the Board adopted a two-part test for determining whether to exercise jurisdiction over teachers at such schools under the U.S. Supreme Court’s decision in NLRB v. Catholic Bishop, 440 U.S. 490 (1979). The Board held that a college or university claiming that it is exempt from NLRB jurisdiction must first demonstrate it holds itself out as providing a “religious educational environment”. If the school satisfies that requirement, it then must show that it holds out the faculty members who a union is seeking to represent “as performing a specific role in creating or maintaining the college or university’s religious educational environment, as demonstrated by its representations to current or potential students and faculty members, and the community at large.”
On whether a school satisfies the second part of the test, the Board will determine whether the school holds out its faculty members as performing any religious function in creating or maintaining a religious educational environment. The Board noted that evidence in support of this requirement might include showing “that faculty members are required to serve a religious function, such as integrating the institution’s religious teachings into coursework, serving as religious advisors to students, propagating religious tenets, or engaging in religious indoctrination or religious training.” For more on Pacific Lutheran University, see NLRB Announces New Standard for Exercising Jurisdiction Over Religiously Affiliated Colleges and Universities.
Islamic Saudi Academy is a non-profit private educational institution operating an elementary and secondary school at two locations in Fairfax County, Virginia. In May 2012, the Islamic Saudi Academy Employee Professional Association filed a petition to represent, among others, the Academy’s non-teachers, such as nurses, IT employees, librarians, finance clerks, and internal auditors. After several procedural twists and turns, as well as issuance by the Board of its decision in Pacific Lutheran University, the Board ordered the case be remanded to the Regional Director “for further appropriate action consistent with its decision in Pacific Lutheran University.”
The Regional Director decided that, assuming Pacific Lutheran University applies to non-teaching employees at primary and secondary schools, the Academy had not established that the non-teaching classifications were held out as performing a specific religious function and that the Board should assert jurisdiction over the non-teaching classifications. The Academy then requested review by the NLRB.
It is unclear how the second part of the test –holding employees out as performing a religious function — would be applied to non-teaching employees, since the school must show the non-teacher performs a religious function in creating or maintaining a religious educational environment. Certainly, with respect to many non-teachers, satisfying the burden of proof will be a tall order.
I’m not sure Julia Roberts’ use of that blonde wig and eighties cut-out dress when she leaned against Richard Gere’s car in Pretty Woman should be considered “fair use,” but perhaps a court might say otherwise. How does Julia’s transformation from wayward to womanly in that iconic 1990 film come into play in a fight between tech giants Google and Oracle over the use of copyrighted java? Because they both hinge on “transformative use.”
Google’s going to trial again? Say it isn’t so. I have to wonder how many lawyers Google, alone, employs. But, if you’re going to stand as one of the front-runners in today’s fast-paced, internet-driven services market, you have to be prepared for lawsuits. Google has been fending off some serious claims by Oracle in a copyright suit filed in San Francisco since 2010, but when the focus of the debate turned to expert witness testimony, we wanted to highlight the matter for discussion and debate. Oracle initially sued Google claiming improper use of copyrighted Java, particularly Google’s use of its application programming interfaces (“APIs”) on its Android platform, to allow developers who are familiar with Java to quickly convert their web apps to Android. Oracle is now reportedly seeking royalty damages in excess of $8 billion.
Initially Google argued, and the trial court agreed, that APIs were not subject to copyright. That ruling, however, was overturned by the Federal Circuit on appeal, which means Google’s remaining defense is whether its use of the APIs was “transformative,” which would make it acceptable under the Fair Use Doctrine. What standard of “transformative use” are the parties looking to? 2 Live Crew and their ripping parody of “Pretty Woman” in their 1989 album, “As Clean As They Wanna Be.” Please tell me you’re envisioning that iconic cover right now. Apparently the Supreme Court in a 1994 ruling, Campbell v. Acuff-Rose Music, Inc., found 2 Live Crew’s version of “Pretty Woman” so creative and original that it qualified as “fair use,” not copyright infringement. Oracle is arguing the opposite by claiming Google’s use of the Java APIs did nothing to transform the code. Google simply plugged it into to a larger body of work, but in no way altered it, which does not qualify, according to Oracle, as transformative.
Oracle has sought to exclude the testimony of Google’s computer science expert from opining that Google’s use of the Java code altered it sufficiently to qualify as a transformative use, claiming his opinion “flies in the face” of the Federal Circuit’s finding that Google was wrong in claiming its use was transformative simply because it incorporated other elements in the Android system. Google has fought back, stating the Federal Circuit never decided whether the work was transformative and specifically remanded the case so that issue could be decided by a jury. Are you finding both of those arguments a bit rambling and repetitive? Apparently so did the trial court judge when he lamented his role as the gatekeeper who has to “excise every detail of expert testimony on a granular level.” With reams of lawyers on either side fighting over every detail and every dollar, however, that is probably precisely what he will have to do.
If you feel it may be hard, not being a computer science guru, to make a determination as to whether Google’s use of the Java at issue was “transformative,” imagine how the jury is going to feel. In May, 2012, a jury found Google had infringed Oracle’s copyrights but they could not decide whether use of the code in question was “fair.” This will be the second trial and second jury that attempts to answer this question. It will require an expert with exceptional communication skills, who is as persuasive as Julia, to effectively break this Java jumble down and win over the potentially tech-savvy, but stubborn “Richards” in the jury box. That’s the expert we would find for them, anyway, if Google gave us a call.
© Copyright 2002-2016 IMS ExpertServices, All Rights Reserved.
Today, the U.S. Department of Labor (DOL) announced its final rule on the minimum salary that white-collar employees must be paid to qualify as exempt from the overtime requirements under the Fair Labor Standards Act (FLSA). The new rule raises the current salary level that such employees must receive in order to qualify as “exempt” from $23,660 annually, to $47,476 annually. The new rule takes effect December 1, 2016.
Under current DOL regulations, most white collar employees – executives (supervisors), administrative employees, and professionals – are exempt from the FLSA overtime rules and need not be paid overtime for hours worked over 40 in a workweek if they satisfy two conditions. First, they must perform “exempt” duties as defined by the DOL regulations. Second, they must be paid a guaranteed salary of at least $455 per week, or about $23,660 annually.
The new rule, first proposed in a slightly different form back in 2015, raises the salary level significantly to $913 per week, or about $47,476 annually. This new salary level is set at the 40th percentile of weekly earnings for full-time salaried workers in the lowest income Census region (currently the South). This number is less than the $970 per week, or about $50,440 annually, that the DOL had originally proposed. In addition, the DOL will now permit up to 10 percent of the salary level to come from non-discretionary bonuses and incentive payments (including commissions).
This new threshold of $913 per week/$47,476 annually will be tied to the 40th percentile for full-time salaried workers in the lowest income Census region going forward, and will be updated every three years. It is currently expected to rise to more than $51,000 annually when the first update takes effect on January 1, 2020.
In addition, under the new rule the salary level for employees who qualify for the “highly compensated employee” exemption will rise from $100,000 per year to $134,004 per year. This level is the annual equivalent of the 90th percentile of full-time salaried workers nationally.
One change contemplated by the DOL when the agency first proposed this new rule back in 2015 will not take effect: changes to the “duties” test. The DOL has announced that the final rule will leave the existing duties tests for the executive, administrative, and professional exemptions in place.
The DOL estimates that 4.2 million additional workers will become eligible for overtime as a result of this rule change, including approximately 101,000 workers in the State of Michigan. This is estimated to raise total wages for American workers by approximately $12 billion over the next 10 years.
Many employers will be impacted by this new rule, as many employers have at least one “exempt” employee who is paid less than $47,476 annually. Thus, employers should scrutinize their workforces carefully to determine if changes in exempt status are necessary. Options include:
increase the salary of an employee who meets the duties test to at least $47,476 annually to retain his or her exempt status;
convert the employee to non-exempt status and pay an overtime premium of one-and-one-half times the employee’s regular rate of pay for any overtime hours worked;
convert the employee to non-exempt status and reduce or eliminate overtime hours;
convert the employee to non-exempt status and reduce the amount of pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) and add pay to account for overtime for hours worked over 40 in the workweek, to hold total weekly pay constant; or
use some combination of these responses.
Given the significance of these changes, and the expected impact on the American workforce, employers are encouraged to consult with legal counsel to discuss their options and strategies for implementing changes, if necessary.
On May 16, 2016, the U.S. Supreme Court offered only limited guidance on the challenges to the religious “accommodation” procedure under the Affordable Care Act’s (ACA’s) contraceptive mandate. Numerous faith-based institutions had challenged the mandate and the procedural requirements for seeking an exemption on religious grounds as violations of the Religious Freedom Restoration Act (RFRA) and the First Amendment of the federal Constitution. In an unusual (but not unprecedented) move, the Court relied on confirmations from both sides that an alternative solution may resolve this dispute, and remanded the cases back to the Third, Fifth, Tenth, and D.C. Circuits to allow the parties to work it out. Zubik v. Burwell, 578 U.S. ___ (2016).
Religious Objection Form At Issue
Under the ACA, organizations providing health insurance to their employees must cover certain FDA-approved contraceptives as part of their health plans. Federal regulations, however, permit organizations to object to providing contraceptives on religious grounds. To avoid recourse for failing to provide mandated contraceptive coverage, such organizations must provide a form, either to their insurer or to the federal government, stating their religious objection.
Numerous faith-based nonprofit organizations, including the Little Sisters of the Poor Home For the Aged in Denver, argue that the ACA’s procedures require them to be complicit in providing services that violate their sincerely held religious beliefs. In various federal courts throughout the country, these religious institutions filed lawsuits challenging the legality of having to submit the religious objection form. After various appellate courts weighed in, the cases were consolidated for the Supreme Court to decide.
Court Sought Alternate Solutions
In late March, the Court asked both sides to come up with new proposals on how the female employees of these nonprofit organizations could receive cost-free contraceptive coverage without burdening the organizations’ religious freedoms. After reviewing the parties’ submissions, the Court concluded that both sides confirmed there was a feasible option to provide contraceptive coverage through the organizations’ insurance companies without any objection notice from the religious parties.
In its per curiam opinion, the Court vacated the judgments and remanded the cases back to the respective appellate courts to allow the parties “an opportunity to arrive at an approach going forward that accommodates petitioners’ religious exercise while at the same time ensuring that women covered by petitioners’ health plans receive full and equal health coverage, including contraceptive coverage.” The Court stated that the parties should be given “sufficient time to resolve any outstanding issues between them.”
The Court, including the concurrence by Justice Sotomayor joined by Justice Ginsburg, emphasized that it was not ruling on the merits of the case and that the lower courts should not read anything into the Court’s opinion as leaning one way or the other. As it relates to the nonprofits in this case, the Court stated that the government has notice that they object on religious grounds so no further notice is required going forward. It also emphasized that the government should not fine or penalize the nonprofits.
What It Means
The Supreme Court’s failure to decide the legal issues surrounding the ACA’s contraceptive mandate and the religious “accommodation” means that numerous federal appeals courts will individually address whether the parties can come up with a mutually satisfactory resolution of the cases. It is unclear whether any of the courts will have to decide the legal issues (again). In any event, the very real possibility is that one or more cases could end up before the Supreme Court in a later session.
Copyright Holland & Hart LLP 1995-2016.
Last month, the National Labor Relations Board (NLRB) yet again shed further light on its analysis – and increased scrutiny – of employers’ handbook policies. The NLRB’s decision in T-Mobile USA, Inc., 363 NLRB No. 171 (Apr. 29, 2016), serves as a follow-up to an earlier decision with respect to rules restricting employees’ use of recording devices. We talked about the T-Mobile decision in our post last week and thought we would continue the discussion by elaborating on another of the board’s decisions on recording rules.
In one of many recent decisions scrutinizing employer handbook policies, the board in Whole Foods evaluated an employer rule prohibiting the use of recording devices on company premises. Whole Foods, 363 NLRB No. 87 (Dec 24, 2015). The NLRB specifically explained that it was not holding that all rules regulating recordings are invalid. Rather, the board found “only that recording may, under certain circumstances, constitute protected concerted activity under Sec. 7 and that rules that would reasonably be read by employees to prohibit protected concerted recording violate the Act.” Id. at *3, n.9. The NLRB further explained that employers are not prohibited from maintaining rules restricting or prohibiting employee use of recording devices, but they must be narrowly drawn so that employees understand that Sec. 7 activity is not restricted. This was the board’s issue with respect to the Whole Foods policy, as it found the rules to be overly broad. The board relied on the fact that the rules applied regardless of the type of activity engaged in and that it covered all recordings.
The T-Mobile decision, which we wrote about last week, provides additional insight on how to interpret Whole Foods. In T-Mobile USA, Inc., 363 NLRB No. 171 (Apr. 29, 2016), the board found the following policy to be unlawful:
To prevent harassment, maintain individual privacy, encourage open communication, and protect confidential information, employees are prohibited from recording people or confidential information using cameras, camera phones/devices, or recording devices (audio or video) in the workplace. Apart from customer calls that are recorded for quality purposes, employees may not tape or otherwise make sound recordings of work-related or workplace discussions. Exceptions may be granted when participating in an authorized  activity or with permission from an employee’s Manager, HR Business Partner, or the Legal Department. If an exception is granted, employees may not take a picture, audiotape, or videotape others in the workplace without the prior notification of all participants.
Id. at *4. The administrative law judge found that T-Mobile had set forth valid, nondiscriminatory rationales for the rule, including maintaining a harassment-free work environment and protecting trade secrets, and that the rule was narrowly tailored to these interests. However, the NLRB reversed, noting that “[t]he rule does not differentiate between recordings that are protected by Section 7 and those that are not, and includes in its prohibition recordings made during nonwork time and in nonwork areas.” Id. at *5. Notably, though, the policy did state that the restriction is limited to recordings “in the workplace.”
With respect to the policy justifications alleged, the board conducted the following analysis:
Harassment: T-Mobile asserted that its recording prohibition was in place to prevent harassment and noted that, under federal and state laws, employers have an affirmative obligation to prevent harassing conduct. However, the NLRB found that the recording prohibition was not narrowly tailored to this interest. The board noted that it neither cited laws regarding workplace harassment nor specified that the restriction is limited to recordings that could constitute unlawful harassment.
Confidential information: T-Mobile asserted as an additional justification its interest in protected confidential information in the workplace. The NLRB noted that the employer’s other policies defined “confidential information” as inclusive of employee information such as employee contact information and wage and salary information. The board also cited Whole Foods and said that the employer’s interest in protecting confidential information was too insufficient to justify the broad prohibition on recording.
While Whole Foods indicated that such policies are not per se unlawful, the T-Mobile decision makes clear that simply inserting business justifications into the policy will not distinguish the lawful from the unlawful. The board seems to be closely scrutinizing the justifications and requiring detailed explanations thereof. The decisions in T-Mobile and Whole Foods indicate that the NLRB will also require that a rule carve out recordings that would be considered protected activity under the Act, and it appears – at least for now – that rules which fail to do so will be struck down. T-Mobile teaches us that, while recording rules are still lawful in some circumstances, the rules must be especially specific with regard to their application and justifications. Employers should continue to closely monitor NLRB decisions to stay up-to-date on all decisions analyzing employer handbook policies.
© 2016 BARNES & THORNBURG LLP
On April 28, 2016, the European Commission (EC) encouraged Portugal to become fully compliant with the Renewable Energy Directive (Directive) through the release of an April infringements fact sheet. The Directive has set the goal of 20 percent of the European Union’s (EU) 2020 energy consumption coming from renewable energy, with each Member State consuming at least ten percent renewable energy. Biofuels used in reaching this goal must meet a set of harmonized sustainability requirements, and must be treated equally by Member States regardless of the country of origin. Portugal has been sent a reasoned opinion urging it to stop favoring biofuels produced in Portugal over those produced in other countries, and to reduce sustainability requirements that are not warranted by the Directive. Portugal has two months to address these concerns, or else it could be sent to the Court of Justice of the EU.
Gibbs -v- Leeds United Football Club concerned the former Assistant Manager of the Club who took his £330,000 constructive dismissal claim to the High Court so as to sidestep the compensation ceiling in the Employment Tribunal.
Having fairly easily established the fundamental breach of contract necessary to win his claim against Leeds, Mr Gibbs then faced two more difficult questions about his compensation. First, how do you provide for mitigation where you know the dismissed employee is going to get a bonus from his new employer, and when, but don’t know how much it will be? Second, is it a failure to mitigate that the employee declines to accept an offer of improved employment terms from the old employer?
On the first point, the Judge reviewed the options of (i) estimating the bonus figure (but thereby certainly being wrong in one party’s favour of the other) or (ii) delaying the compensation award until the bonus amount were known, but thereby racking up interest charges for Leeds and denying Mr Gibbs receipt of his money. Note that part of the relevant bonus was due to be paid by Mr Gibbs’ new employer, Tottenham Hotspur FC, little more than four months after the High Court’s decision, at a time of low prevailing interest rates and when Mr Gibbs was safely in receipt of a salary from Spurs and so had no immediate need for the money. Nonetheless, this was still felt to be hardship enough all round to leave that option on the bench.
The Judge chose instead to order that:
the full amount of the £330,000 award should be paid to Mr Gibbs’ solicitors to be held in an interest-bearing account;
the parties should then agree how much of that could be released to Mr Gibbs (i.e. leaving at least enough in the account to cover any likely bonus award from Spurs); and
the rest would be offset against that bonus, with the bonus amount going back to Leeds and the balance to Mr Gibbs, plus interest in each case.
All very sensible and the fact that this was a High Court case in no way prevents a similar Order (or agreement between the parties) being made by the Employment Tribunal where there is a need to reflect an uncertain future receipt in the amount of a settlement or compensation award.
On the second point, was it a failure by Mr Gibbs to take reasonable steps to mitigate his losses when he rejected Leeds’ post-resignation offer to stay at Elland Road as Head Coach/Manager? The Judge gave this allegation a fairly short shrift – having found the Club guilty of a repudiatory breach of Mr Gibbs’ contract, it could not fix things so easily. Though the new role would have been more senior and presumably better paid, the damage caused to Mr Gibbs’ credibility among players and staff by the Club’s earlier treatment of him made it reasonable for him to refuse. He could have taken the chance that Leeds would change its behaviour towards him, but he was not obliged to do so. Bear in mind also the recent Employment Appeal Tribunal decision in Cooper Contracting -v- Lindsey which stressed just how high is the hurdle of showing a failure to mitigate, and also Buckland –v- Bournemouth University in 2010. There the Court of Appeal decided much against its own better judgment that once the employer was guilty of a repudiatory breach of contract, it could not “mend” that breach by profuse apologies and other appropriate steps afterwards, even if those measures would have undone all or most of the harm caused in the first place.
- See more at: http://www.natlawreview.com/article/no-going-back-rejection-promotion-offer-not-failure-to-mitigate#sthash.ueEsoJnq.dpuf