The DOL Addresses ‘White Collar’ Slavery

*The Dept. of Labor issued the final rule on May 19, 2016. The DOL  more than doubled the salary threshold for eligibility for overtime for full-time salaried workers — lifting it from $23,660 to $47,476 per year. That means some 35 percent of full-time salaried workers, based on their pay, will now be eligible for overtime. PGB

The Fair Labor Standards Act, 29 CFR Part 541, makes it possible for employers to impose a kind of slavery on poorly-paid salaried employees who are exempt from the protections of the act because they are classified as “white collar” workers.

However, the U.S. Department of Labor this week released proposed amendments to the FLSA  “white collar” exemption provision that would, if adopted, eventually eliminate the exempt status of an estimated  21.4  million so-called “white collar” employees.

The FLSA exemption now applies to employees whose job duties primarily involve executive, administrative, or professional duties and who  earn a salary of at least $455 per week or $23,660 a year.  The DOL’s proposed regulations dramatically increase the minimum salary threshold for exempt status workers to $970 per week or $50,440 per year. This represents the 40th percentile of earnings for all full-time salaried workers throughout the United States.

Low-level white collar workers are ripe for exploitation, especially during difficult economic times when jobs are scarce.  During the Great Recession, many employers forced poorly-paid white collar workers to work endless or erratic unpaid overtime hours  to compensate for lay-offs or short staffing.  This caused predictable stress and burnout, with all of the attendant problems for individuals and families.  The “white collar” exemption is particularly brutal for single parents (mostly women) who must schedule and pay for child care.

The DOL has not updated the “white collar” salary level since 2004.  To prevent the proposed new salary level from becoming outdated, the DOL’s proposes  automatically updating the salary level each year to reflect the applicable 40th  percentile of earnings.  Continue reading “The DOL Addresses ‘White Collar’ Slavery”

Do ‘Nice Guys’ Finish Last?

Baseball player Leo Durocher famously said “nice guys finish last.”

Do they?

There is no conclusive answer to this question but Christine Porath, in a recent article for the New York Times, argues that politeness and regard for others in the workplace pays off.  She cited a study involving a biotechnology company that found workers who are seen as civil are twice as likely to be viewed as leaders.

Unfortunately, it’s not hard to find research that comes to the opposite conclusion. At least one study shows that agreeableness affects income – particularly for women. Nice gals and guys are thought to earn less than co-workers who are not nice.

I submit that Duroucher’s question misses the point.

A smart employer, mindful of the bottom line, would not knowingly  promote a worker who  is rude, engages in workplace bullying or fails to show respect for others.  

Employers increasingly recognize that incivility or bullying in the workplace is bad for business and the bottom line. An abusive workplace exposes a company to expensive and unnecessary turnover, low morale and productivity, higher medical costs and needless risk of litigation. Moreover, research shows that workplace bullies act for their own selfish reasons, in complete disregard for the success of the employer. The success of a  bully in a workplace is directly proportional to  the employer’s failure  to effectively manage the company’s most critical resource  – its workforce.

What is a Reasonable Management Action?

It can be a tough call in a workplace bullying case to ascertain whether an employer’s disciplinary action was reasonable or a pretext for bullying.

The United States is literally in the dark ages with respect to workplace bullying but not so Australia, which  a year ago authorized a national workplace relations tribunal to decide workplace bullying complaints pursuant to a  2009 law.

The mission of  Australia’s Fair Work Commission (FWC)  is: “Helping Australians create fair and productive workplaces.

The FWC recently ruled upon an employer’s objection that it lacked jurisdiction to hear a worker’s bullying complaint because the complaint was based on a reasonable management disciplinary action. The FWC disagreed, finding that the employer’s disciplinary action was not reasonable and the commission could hear the case.

The dispute arose when a Human Resources Officer of a radiology firm sent a letter  marked “Disciplinary Process” to a worker threatening possible dismissal for issues involving efficiency, following directions, attitude and rudeness.

The FWC found that  two elements are necessary to constitute a reasonable management action:

  1. There must be some line of “cause and effect between conduct, behavior or performance of an employee,” and
  2. The relevant management action must be a “reasonable and proportionate response to the attributes of the employee to which it is directed.”

The FWC said it would have been reasonable for the radiology firm to place the worker on a routine performance management plan. The company’s threat to terminate the worker was deemed excessive and unwarranted, especially because the worker had responded positively to the issues raised about his performance. One commissioner said differences of opinion regarding the appropriateness of a certain work practice “did not reasonably warrant ‘disciplinary action’ as opposed to discussion about appropriate procedures with the employees involved.”

The U.S. government has ignored the problem of workplace bullying  which is said to affect one in every three or four workers. Indeed, the vast majority of workers here can be fired for any reason, whether it is fair or not,  as long as it does not violate an actual law (i.e. race or sex discrimination laws).

Australia passed a Fair Work Act in 2009 that provides recourse for  all workers there when:

  •  another individual or group of individuals “repeatedly behaves unreasonably towards the worker”; and
  • “that behaviour creates a risk to health and safety.”

The law exempts reasonable management actions  that are carried out in a reasonable manner.

The above case is James Willis v Marie Gibson; Capital Radiology Pty Ltd T/A Capital Radiology; Peita Carroll [2015] FWC 1131.

New Technology; Same Exploitative Management

It is baffling that in an era that has seen such a revolution in new technology there is so little innovative thought about how to best manage a workforce.

One might have thought that Silicon Valley, the home of new technology, also would become a testing ground for innovation with respect to managing employees but that has not occurred.  In fact, Silicon Valley appears intent on exploiting young workers by essentially forcing them to spend 10 to 12 hours a day or more at the office, ignoring the cumulative mental and physical health damage of this kind of lifestyle.

Some employers offer free massages, yoga and gyms but that is not the same thing as offering a reasonable work schedule that permits a healthy work/life balance. Presumably, when these young people “grow up” and decide to have families they will be encouraged to move on. But even that is being delayed as some Silicon Valley employers offer female employees a free benefit to harvest and freeze their eggs to delay childbirth.

And, of course, Silicon Valley collectively could be called one of the most discriminatory employers in  America; its workforce consists disproportionately of young white men.

A former top executive with Shoppers Drug Mart and Loblaw of Canada, Andrew Faas,  65, has written a new book on workplace bullying called, The Bully’s Trap, in which he shares “lessons on leadership and workplace mental health.”   Whether or not the book has any merit, Faas is at least offering a manager’s perspective on the problem of workplace bullying and abuse.  There is no equivalent to Faas in the United States, where workplace bullying is largely tolerated despite overwhelming  research showing that workplace abuse costs employers and society billions in lost productivity, higher health care costs and needless  litigation.

.In a press release, Faas states that he “was accused of being a bully at times, and I learned the hard way the impact this had on colleagues … This year we have seen countless examples that workplace bullying is becoming an epidemic in major corporations if not addressed and dealt with.”

Faas, 65, also has donated $1 million to assist Canada’s leading hospital for mental health  the Centre for Addiction and Mental Health, to develop new educational programs to create psychologically healthier workplaces.  He said that proceeds from his book will go to his foundation for mental health initiatives.

Unfortunately,  Faas became involved in a controversy last year when a writing collaboration broke down with American author, Barbara Coloroso, author of the 2001 book, The Bully, the Bullied, and the Bystander. Both parties filed lawsuits. Coloroso accused Faas of committing “blatant acts of plagiarism and copyright infringement” from sources including Wikipedia.  I’ll be curious to see if my  book, Surviving Bullies, Queen Bees & Psychopaths in the Workplace, makes an appearance!

The 1877 Master and Servant Rule Lives!

If you wonder why American workers need protection from workplace bullying, consider last week’s decision by a federal appeals court in Chicago regarding a 51-year-old plant  manager who was fired by Sun Chemical Corp. in 2009.

George Widmar, 51, was a plant manager for 16 years who was fired in 2009 by Sun Chemical, denied severance pay and publicly accused of  having “screwed up” the plant. Sun Chemical argued that plant managers must accept responsibility over all aspects of a plant – even those outside the manager’s control.  The U.S. Court of Appeals for the 7th Circuit in Chicago agreed.

The appeals court did not discount the possibility that everything Widmar claimed had happened to him did in fact happen. Among other things, Widmar said he was blamed for problems stemming from a flawed chemical formula and Sun’s decision to use cheap, faulty materials.  The court ruled in the case of Widmar v. Sun Chemical Corp, No. 13-2313 (November 19, 2014), that none of this mattered.

The court said the law is not concerned about employers or managers who are “unpleasant,” “unfair” or “too hard” on employees. The law is not concerned if an employer/manager has a “nefarious motive,” doesn’t like, or is “wrong” about an employee’s performance. Furthermore, the law doesn’t care if the company creates conditions that make it impossible for a worker to succeed.

All the law cares about, said the appeals court, is whether an employee can prove illegal discrimination.

Paradoxically, of course, it is impossible to prove illegal discrimination if the law doesn’t care that the employer had nefarious motives, was wrong about the employee’s performance and created conditions that made it impossible for the manager to succeed. What’s left? Is it fair to expect an employer to tell an employee outright that it is intent upon violating federal discrimination laws?  Sometimes all a worker can do is point to harassment and unfair policies and expect the law to care.

Many industrialized countries do care when employers engage in unfair and destructive employment practices. They have adopted workplace bullying laws and policies to protect workers.  The European Union in 2000 adopted The Charter of The Fundamental Rights of the European Union, which declares that “every worker has the right to working conditions which respect his or her health, safety and dignity.” Overwhelming research shows that workplace bullying has serious short-term and long-term impact upon the health of targets.  The European Framework Agreement on Harassment and Violence at Work in 2007 states that employers have a duty to protect workers from harassment and violence in the workplace.

America’s employment law is based upon an obscure policy concocted in 1877 by an Albany attorney and treatise writer, Horace Gray Wood. He created the “Master and Servant” rule that  provides when a hiring is indefinite, the burden of proof is on the servant to prove that an indefinite employment term was for one year.  Courts expanded Wood’s theory, which was based upon a scant four court decisions,  into the “employment at will” rule which reigns today and permits an employer to fire an employee without reasonable cause (except when the cause violates the law).  So Widmar legally could be fired without reasonable cause and his mistreatment ignored because the court declared his evidence was insufficient to show illegal discrimination.

Widmar was a senior employee with sufficient resources to hire and attorney and file a lawsuit and an appeal. One can only wonder how Sun Chemical treats lesser employees who are denied access to America’s archaic courts because they can’t afford hefty attorney fees and court costs or navigate a system that is profoundly intolerant of  self-represented litigants.

Why are Americans satisfied with working conditions that other countries find barbaric? Never mind Widmar. Why do the poorest and least powerful workers continually elect politicians who either ignore them once they get into office or actively fight against their interests to advance the goals of multi-national corporations?  And yet, the Master Servant rule lives.

Law Doesn’t Protect Workers from ‘Unfair Employers’

As the holiday season approaches, the U.S.  Court of Appeals for the 7th Circuit in Chicago has released a decision that harkens back to the working conditions of Victorian England which inspired Charles Dickens.

George Widmar, 51, was a plant manager for 16 years who was fired in 2009 by Sun Chemical’s National Manufacturing Manager, Keith Roberts. Widmar was denied severance pay and publicly accused  by a Sun official of  having “screwed up” the plant.  Widmar claims he was blamed for failures that were not within his control. For example, he cited problems stemming from a flawed chemical formula and Sun’s decision to use cheap, faulty materials.  Sun Chemical argued that plant managers must accept responsibility over all aspects of a plant – even those outside the manager’s control.

Here are some of the highlights from the 7th Circuit’s decision in the case of Widmar v. Sun Chemical Corp, No. 13-2313 (November 19, 2014):

  •  “Title VII does not protect employees from poor managers or unpleasant and unfair employers.”
  • “I]t is not the court’s concern that an employer may be wrong about its employee’s performance, or be too hard on its employee.”
  • “An employer can micro-manage and require as much petty communication as it wishes.”
  • “An employer’s poor management decisions could, in fact, be a cover for discriminatory action, but poor decisions can just as easily be the result of deficient management and lackluster business acumen.”
  • “Even if Roberts blamed Widmar for problems that he knew were not Widmar’s fault, this makes Roberts a bad manager, not a perpetrator of illegal discrimination.”
  • “The problem for Widmar, however, is that even if … we were to attribute a nefarious motive to Roberts’ conduct in each incident, we have no way of knowing whether Roberts acted this way because of Widmar’s age. Each and every one of these issues could arise just as easily if Roberts simply did not like Widmar’s personality or his style or, for that matter, his cologne.”
  • “We cannot say whether it was a reasonable expectation for Sun Chemical to require Widmar to be responsible for particular functions and actions in the plant in this way. This court has repeatedly stated that it is not a super-personnel department that second-guesses employer policies that are facially legitimate.”
  • “The question is not whether Sun Chemical’s assessment of Widmar’s performance was correct, only that it was an honest belief and not a pretext for age discrimination.”
  • Widmar “was not placed on a performance improvement plan even though it was company policy to do so if the problems were remediable, but again he offers not one shred of evidence that younger similarly situated employees were given such an opportunity where he was not.”

Widmar had sued for age discrimination and defamation. His lawsuit was dismissed pursuant to Sun’s pre-trial motion for summary judgment long before it could ever reach a jury. And the 7th Circuit upheld the dismissal.

HR Doesn’t Work for Workplace Abuse Victims

This blog initially began with a rhetorical question – how do perpetrators of domestic violence act when they report for work?

I was reminded of this when I read about the travails of Canadian Broadcasting Corporation radio broadcaster, Jian Ghomeshi, 47, who was fired recently because he allegedly brutally assaulted three much younger women under the auspices of “rough sex.”

The Toronto Star also reported that a CBC staffer who worked on Ghomeshi’s show, Q,  complained to the CBC of verbal and sexual harassment by Ghomeshi. According to the Star:

“She never dated Ghomeshi. She alleges he approached her from behind and cupped her rear end in the Q studio, and that he quietly told her at a story meeting that he wanted to “hate f—” her.

The woman said she complained about Ghomeshi’s behaviour to her union representative, who took the complaint to a Q producer. As the woman recalls, the producer asked her “what she could do to make this a less toxic workplace” for herself. No further action was taken by the CBC, and the woman left the broadcaster shortly thereafter.”

What could the CBC have done to make the workplace less toxic? Really? And this is a unionized workplace?

Victims of workplace discrimination, harassment and abuse often find a deaf ear when they complain to the Human Resources Department. It’s obvious that HR exists at management’s pleasure, to protect management, and not to protect victims of workplace abuse. No matter how many anti-harassment policies are place, that is the bottom line.  Ghomeshi was a major talent at CBC and his subordinate wasn’t.

The question that began this blog is rhetorical because we all know that when abusers go to work they do not stop being abusers. Abuse is about exerting undue  power and control in relationships, whether it be with a partner or a co-worker or subordinate.  That’s why workers everywhere need laws to protect them from workplace abuse and they need courts that are willing to enforce those laws when employer’s won’t.  Maybe some day?

According to the Star, none of the four women the paper interviewed have ever filed a police complaint against Mr. Ghomeshi, and none of them agreed to go on the record. The women said they are afraid that if they come forward, they will be sued or become victims of vicious online attacks, the paper reported.

HP Can Keep Worthless Coupons?

Too often, in a consumer-based class action lawsuit, class members receive a worthless “coupon” to purchase the defendant’s products. And nothing changes.

This was the ignominious conclusion of an eight-year-old class action lawsuit against Hewlett Packard Company, which allegedly cheated consumers with respect to the sale of ink cartridges from 2001 to 2010.

However, an appellate panel from the U.S. District Court of Appeals for the Ninth Circuit on Wednesday rejected the settlement in In re: HP Inkjet Printer Litigation and sent it back to the lower court for reconsideration.

In the “global” settlement approved by a federal judge  in 2011 the class members received “e-coupons” worth $2.00 to $6.00 toward HP printers and printer supplies and so-called “injunctive relief” that essentially requires HP to provide accurate notice of its products to consumers in the future. The court also awarded attorneys’ fees of $1.5 million and costs of about $600,000.

Issue Attorney Fees

The issue on appeal was not the mild slap on the wrist suffered by HP for allegedly cheating consumers for almost a decade  but the attorney fees.

The three judge appeals panel, with one member dissenting, ruled that the Class Action Fairness Act prevents a district court from awarding attorneys’ fees to class counsel that are “attributable to” an award of coupons without first considering the redemption value of the coupons.

“Attorney’s fees are never ‘attributable to’ an attorney’s work on the action. They are ‘attributable to’ the relief obtained for the class,” ruled the panel.

The dissent argued the majority was misinterpreting the law by making a class action lawsuit the equivalent of a “contingency” case, where the attorneys get a percentage of the monetary judgment.

The Problem with “E-Coupons”

The  “e-coupons” were good only at, expired six months after issuance, were non-transferable and could not be used with other discounts or coupons.  The record included evidence that prices charged at  are higher than those charged by other retailers. For instance, the same HP “Combo Pack Ink Cartridge” sells for $42.99 on while selling for $36.99 on

Of potentially millions of class members, three filed formal objections to the settlement, 458 submitted informal comments, 810 opted out of the settlement, and 122,000 filed claims.

The attorneys  asserted they racked up $7.1 million in fees and costs, representing 17,000 work hours but they only asked the court for $2.9 million, recognizing the limited nature of the settlement.

The appeals court said it did not mean to rule out the use of  coupons in settlements. For example, the court said, coupons may be appropriate if the defendant is in financial distress or the customer has a history of repeat business with the defendant.

What the Case was About

The  tortured history of this case raises questions about whether consumer class action lawsuits as currently configured are an effective method for policing the consumer marketplace. International corporations like Hewlett Packard  have pockets that are the equivalent of an abyss to fight these lawsuits.

The allegations at the core of the case are serious and, if true, cost consumers millions  of dollars. The settlement includes plaintiffs from three separate lawsuits that were combined by the court:

  • The first  action was filed on June 16, 2005, and alleged that HP misled consumers into believing that replacement of an ink cartridge was necessary when the cartridge was not empty, and was capable of additional printing.
  •  The second action was filed on May 22, 2006, and alleged that HP failed to disclose that its color printers use color ink to print black and white text and images, a process known in the printing industry as “underprinting.”
  • The third action was filed on January 17, 2007, and alleged that HP concealed that certain of its ink cartridges contained an “expiration date,” after which time the cartridges would no longer work regardless of how much ink remained in the cartridge.

The lower court judge determined that the settlement provided class members “meaningful benefits on a much shorter time frame than otherwise possible.”

Corporate Profits and Disappearing Pensions

cracked eggThe New York Times reported this week that corporate profits are at their highest point in recent history, while the portion of that profit that goes to employees is near its lowest point.

 Meanwhile, a recent nationwide public opinion poll by the non-profit National Institute on Retirement Security (NIRS) has found that an overwhelming majority of Americans (85 percent) are concerned about their retirement prospects, with more than half (55 percent) saying they are very concerned.  Concern was higher for women than men (90 and 80 percent, respectively).

 According to the Bureau of Justice Statistics,  only 18 percent of private industry employees were covered by defined benefit plans (pensions)  in 2011; compared to 35 percent in the early 1990s.   Only ten percent of private industry establishments offered a defined benefit pension  plan to their employees in 2011.  More than 80 percent of  employees who are offered traditional pensions work for unions or the state or local government.

The NIRS study found that 82 percent  of Americans believe that workers with pensions are more likely to have a secure retirement than workers who depend upon 401(k) plans and the volatile stock market.

The NIRS study found overwhelming support (90 percent) across generational lines for a new type of pension plan that is available to all Americans, is portable from job to job, and provides a monthly check throughout retirement for those who contribute. 

Americans do not appear to be optimistic that policymakers will act in response to their retirement concern. The NIRS study found that 87 percent of Americans do not believe the country’s policymakers understand how hard it is to save for retirement. 

 Note:  The Center for Responsive Politics estimated the median net worth of a U.S. senator stood at an average of $2.63 million in 2010. The median estimated net worth of a GOP House member was $834,250 in 2010, compared to a median net worth of $635,500 among House Democrats.

The New York Times reported that corporate profits, as a percentage of national income, stood at 14.2 percent in the third quarter of 2012, the largest share at any time since 1950, while the portion of income that went to  employees was 61.7 percent, near its lowest point since 1966. 

Corporate earnings have risen at an annualized rate of 20.1 percent since the end of 2008, the Times reports,  while dispoable income inched ahead by 1.4 percent annually over the same period, adjusting for inflation. “There hasn’t been a period in the last 50 years where these trends have been so pronounced,” said Dean Maki, chief United States economist at Barclays.

When the Employer is the Bully

One of the most difficult workplace bullying scenarios occurs  when the employer is the bully.

There may be no one to complain to except the harasser.

This scenario occurred to three former employees of a Baltimore medical practice who were subjected to sexual harassment  by two of the company’s highest ranking officials.  They complained to the U.S. Equal Employment Opportunity Commission  (EEOC ), which announced Tuesday that a federal jury had awarded the women $350,000 in damages.

The EEOC filed the lawsuit on behalf of the women against Endoscopic Microsurgery, alleging that Associate’s Chief Executive Officer, Dr. Mark D. Noar, M.D., and  its Chief Financial Officer Martin Virga subjected the women to frequent unwanted sexual comments, physically touching and grabbing a female worker’s rear end, kissing and blowing on female employees’ necks and other sexually egregious comments and touching.

According to the EEOC, after Linda Luz, a receptionist, rejected their advances, the medical practice began retaliating against her by issuing unwarranted discipline, rescinding approved leave, and eventually firing her.

Administrator Jacqueline Huskins also experienced unwanted sexual advances from Noar and Virga, as did nurse Kimberly Hutchinson from Noar.

The Baltimore jury of nine returned a unanimous verdict for the plaintiffs and awarded each woman punitive damages of $110,000. The jury also held the claimants were entitled to compensatory damages in amounts ranging from $4,000 to $10,000.

Sexual harassment and retaliation for complaining about it violate Title VII of the Civil Rights Act of 1964.

It says something about this employer that it failed to negotiate a settlement in this case when it had the opportunity to do so. The EEOC filed suit after attempting unsuccessfully to reach a pre-litigation settlement through its conciliation process. Publicity from this fiasco is not likely to encourage new patients to flock to the clinic, nor is it likely to encourage confidence in these medical professionals from existing patients. Duh.

“This verdict is significant because it reminds high-level officials who function as the employer that their high level does not give them license to abuse women – they must treat employees as professionals,” said Debra Lawrence, regional attorney of the EEOC’s Philadelphia District Office.