Author Archives: Ann Huntrods

FLSA Rules For Exempt Employees During Snow Days

With winter weather arriving, many employers will soon face questions about whether certain employees are entitled to be paid when the office closes for the day or the employee can’t make it to work.

The answer is tricky when it comes to employees who are “exempt” from the normal minimum wage and overtime requirements of the Fair Labor Standards Act. “Exempt employees” are generally salaried employees who work in a bona fide executive, administrative, or professional capacity.

Salary Requirements

According to 29 C.F.R. § 541.602, whether the company can deduct money from an employee’s salary depends on whether the company is closed for the day, the employee decided he or she could not make it to work, and whether the employee misses a full day or something less than that.

The general rule is that employers can deduct from an exempt employee’s pay when the employee is absent from work for one or more full days for personal reasons other than sickness or accident. But if an employee is “ready, willing, and able to work,” the employer cannot make deductions when work is not available.

In the context of inclement weather, that means that if the office closes and the employee would have been “ready, willing, and able to work,” the business cannot deduct from the exempt employee’s salary. However, if the business is open but the employee cannot get there, the employer can deduct from the salary because the employee is missing work for a “personal reason” other than sickness or accident.

If, however, the employee misses less than a full day, the company cannot deduct from the employee’s salary.

PTO Requirements

Many employers wonder whether they can require an employee to use PTO or vacation time when the office has to close or the employee cannot make it to work.

The FLSA does not require employers to provide vacation time or PTO to employees. Notably, this means that there is no prohibition on an employer giving an employee vacation time and later requiring that such vacation time be taken on a specific day.  See DOL Opinion Letter (Oct. 24, 2005).

Therefore, as long as an employer does not reduce the employee’s guaranteed salary, the employer can reduce the accrued leave someone has acquired. This is true even if the employee will be left with a negative PTO/vacation time balance. This is also true even if the company makes the decision to close the office for the day, or the employee is absent from work for less than a full day.

Takeaway:  Employers need to make sure to follow the FLSA’s rules for paying exempt employees on snow days.  For more information about the FLSA’s requirements for weather-related closures, click here.

Are Confidentiality Provisions in Severance Agreements Enforceable?

Many employers use severance agreements containing confidentiality provisions, but worry about how enforceable such provisions are.  According to a recent case, they are very enforceable.

The case of Hallmark Cards, Inc. v. Murley, 703 F.3d 456 (8th Cir. 2013), will be very helpful to employers seeking to enforce such confidentiality provisions.  In Hallmark Cards, the employer sued its former vice president of marketing, who received a severance package of $735,000 after her position was eliminated due to a corporate restructuring.  The jury found that the former employee had breached the confidentiality provision of the severance agreement by disclosing Hallmark’s confidential information to her new employer, a competitor.  The jury awarded Hallmark Cards the full value of the severance package and the employee’s compensation paid by her new employer.  The former employee appealed.

On appeal, the former employee argued that she had complied with some provisions of the severance agreement and therefore she should not have to pay back the full severance amount.  The former employee also argued her former employer was not entitled to any of her compensation from her new employer.

Hallmark argued that it was entitled to the full amount of damages awarded because the only reason the new employer paid her compensation was because she provided the new employer with Hallmark’s confidential information.

The Eighth Circuit Court of Appeals upheld the jury’s award of a full refund to Hallmark of its $735,000 severance payment, but held Hallmark was not entitled to the award of the former employee’s compensation from her new employer.  The court rejected the former employee’s argument that Hallmark got some value for the severance agreement and thus was not entitled to get all of its severance payment back.  The Eighth Circuit reasoned that the confidentiality provision was the primary purpose of the agreement and that the language of the agreement clearly indicated that preserving confidentiality was a priority.

The Eighth Circuit held, however, that Hallmark was not entitled to be put in a better position than it would have been in if the former employee had not breached the severance agreement.  Accordingly, Hallmark was not entitled to the former employee’s compensation from her new employer.

Takeaway:  The Hallmark Cards case shows employers can enforce properly drafted confidentiality agreements in severance agreements.  To have the best chance for success, employers should have their attorneys draft or review the confidentiality provisions prior to giving the severance agreement to the employee, and then call their attorneys if they obtain evidence that a former employee has breached the confidentiality provision.

Briggs Employment Lawyers to Present at the 2013 Upper Midwest Employment Law Institute

The 2013 Upper Midwest Employment Law Institute is being held at the Saint Paul RiverCentre on May 20 & 21, 2013.  We are pleased to announce that three lawyers from our Employment, Benefits and Labor Section at Briggs and Morgan, P.A. will presenting this year as follows:

  • Steve Brunn – “What Do Employers Small and Large Need to Know About the Affordable Care Act?” on May 21 at 11:45.
  • Ann Huntrods – “Mentally Ill and Chemically Dependent Employees: Answers to Pressing Questions” on May 21 at 2:45.
  • Greg Stenmoe – “Employees With Personality Disorders: Management and Litigation Risks” on May 21 at 11:45.

A copy of the seminar brochure is available here.  Several of our other Employment, Benefits, and Labor lawyers will also be at the seminar.  We hope that you can attend and that we see you there.

Mental Disabilities – Managing Employee Conduct and Maintaining Workplace Safety

Recent studies have shown approximately 4.2 million to 13.4 million working employees have mental disabilities.  What is an employer to do when employees with mental disabilities exhibit disruptive conduct or threaten violence in the workplace if their conduct may be associated with their disabilities?

Employers must balance disabled employees’ legal protections with safety concerns.  These employees have legal protections and may be entitled to reasonable accommodations under the Americans with Disabilities Act (“ADA”) as well as the Minnesota Human Rights Act (“MHRA”).

On the other hand, the ADA permits employers to enforce standards of conduct and performance that are job-related and consistent with business necessity (e.g., disciplining an employee who makes threats of violence or steals company property).  Similarly, the ADA allows employers to enforce uniform disciplinary rules against employees provided that they are enforced in the same manner for non-disabled employees.  These guidelines apply even where the employee’s misconduct is caused by his or her disability.  See, e.g., Weesner v. U.S. Bancorp, 2011 WL 4471765 (D. Minn. 2011); Lenzen v. Workers Comp. Reinsurance Ass’n, 843 F. Supp. 2d 981 (D. Minn. 2011), aff’d, No. 12-1211 (8th Cir., Feb. 13, 2011).

The ADA also authorizes an employer to exclude an individual from a position if he or she poses a “direct threat,” which is defined as “a significant risk of substantial harm to the health or safety of the individual or others that cannot be eliminated or reduced by reasonable accommodation.”  42 U.S.C. § 12113(b); 29 C.F.R. § 1630.2(r).  The determination of whether an employee poses a direct threat must be made on a case-by-case basis and not based on generalization or stereotypes.  See Brunko v. Mercy Hosp., 260 F.3d 939 (8th Cir. 2011) (“The provision addressing perceived disabilities ‘is intended to combat the effects of “archaic attitudes,” erroneous perceptions, and myths that work to the disadvantage of persons with or regarded as having disabilities.’”).

Minnesota law also holds that employers have a defense to disability claims under the MHRA if an employee poses a serious threat to the health or safety of the disabled person or others.  Minn. Stat. §363A.25.

Takeaways:  Employers may require both disabled and non-disabled employees to comply with standards of conduct and performance that are job-related and consistent with business necessity.  Employers may also exclude individuals who pose a direct threat.  An employer must make an individualized assessment when determining if an employee poses a direct threat.  The employer should seek medical judgments and rely on the most current medical knowledge and factual evidence regarding the employee’s potential to be a direct threat.  Employers should also seek legal advice if they are unsure whether an employee poses a direct threat in the workplace.