News Archives - Page 13 of 15 - Mansour Gavin LPA

A Federal District Court Judge in Texas issued a nationwide injunction blocking the roll out of the new overtime rule that was to become effective next week on December 1, 2016. This injunction effectively puts the implementation of the new salary test for overtime on hold unless the Federal Court of Appeals overturns the injunction.

Background

Many of you remember that President Barack Obama directed the Department of Labor to modernize long existing overtime rules that applied to employees that were exempt under overtime law because they were classified as executive, administrative or professional employees (with some other special exemptions). In response, the Department of Labor issued a new rule which raised the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $921 per week ($47,892 annually) with an automatic adjustment that would go into effect in 2020. The rule had the effect of immediately moving many employees that would otherwise have met one of the exempt classifications into a non-exempt status because of the salary test and would have required the payment of overtime for any hours worked over 40 in a work week for employees not meeting the new salary level regardless of classification. The rule was set to become effective December 1, 2016.

The Plano Texas Chamber of Commerce and several other business organizations filed suit against the Department of Labor. This suit was joined with another lawsuit filed by over 20 states challenging the authority of the Department of Labor to issue the new rule.

Court’s Decision

The U.S. District Court Judge, Judge Amos L. Mazzant, concluded that the Department of Labor overstepped its authority by issuing a de facto salary level test and an automatic inflation rider, which effectively supplanted the duties test established by Congress; specifically, Congress did not intend to categorically exclude an employee with executive, administrative or professional duties from the exemption. Further the Court specifically enjoined the final rule on a nationwide basis, thus effectively blocking implementation of the rule even in states that were not part of the lawsuit. (See decision)

What does this mean?

The proposed increase of the salary threshold was certainly unpopular with a number of businesses, nonprofit organizations, business groups and other political groups. With the new administration taking over in January, it’s unclear whether President-Elect Trump’s Administration will choose to support the Department of Labor’s position if the Department of Labor chooses to appeal the injunctive order. Even if the order is appealed, it’s unclear how quickly a Federal Court of Appeals will hear the case. Traditionally, appeals take months, if not longer, to work their way through the appeal process.

Ironically, many businesses took steps to plan for the implementation of the new overtime rule by raising salaries of those that would otherwise be classified as exempt. More importantly, however, come December 1, 2016, the old rules will remain in effect and employees who are otherwise classified as exempt and paid on a salary basis will not be entitled to overtime if their salary exceeds $23,660 annually.

Stay tuned, we don’t think this is over yet…

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

Legal Disclaimer

The information contained on this web site and any linked resource is intended to provide general information and does not constitute legal advice. The content is not guaranteed to be correct, complete, or up-to-date. This web site is not intended to create an attorney-client relationship between you and Mansour Gavin LPA or any of its associates, and you should not act or rely on any information in this web site without seeking the advice of an attorney.

Mansour Gavin LPA celebrated National Ugly Christmas Sweater Day on Friday, December 16th with what else – an ugly Christmas sweater contest, of course! From glitter to lights to sequins, our finest holiday apparel was on display. While all participants looked fantastic, we crowned our billing department supervisor, Ann Frederick, as the winner. A second place tie was awarded to paralegal Michele Kerling and billing department clerk Bojana Bebic. Thanks to everyone who joined in on the fun, and we hope your holidays are just as festive as our sweaters!

Ohio has joined 15 other states that permit the creation of family trust companies with its recent enactment of the Ohio Family Trust Company Act (“OFTCA”). Ohio Family Trust Companies (“OFTCs”) are highly effective tools for families of significant wealth to preserve their assets from federal income, gift, estate and generation-skipping tax consequences. OFCTs allow for family involvement in decision-making and control over the investment assets. They also serve as a vehicle for younger generations to become educated about the family’s assets and trained in governance issues.

Prior to the OFTCA, families interested in setting up a family trust company had to look outside the state of Ohio. Now that the OFTCA is in effect, a win-win situation exists for Ohio families and the state of Ohio. The OFTCA secured a home-court advantage for families by eliminating travel and set up costs families once had to incur from operating out-of-state family trust companies. Since there is no requirement to live in the state where the family trust company is established, Ohio has an opportunity to attract families from other states to bring their business and investments into Ohio.

Generally, there are two varieties of OFTCs; licensed and unlicensed. A licensed OFTC permits services to a broad range of clients but must abide by capital, insurance, pledge and nexus requirements. An unlicensed OFTC limits services to only family members but offers notable advantages, such as not being subject to banking regulations and no requirement to register with the SEC as a Registered Investment Advisor. The only obligation an unlicensed OFTC has is the annual submission of an affidavit to the Department of Financial Institutions confirming compliance with statutory limitations.

Families with significant wealth and succession concerns should carefully consider the advantages of OFCTs under the new law. This looks to be a game changer!

If you have any questions about the new OFTC legislation, please contact Mansour Gavin’s Estate Planning Group.

LEGAL DISCLAIMER

The United States Department of Labor has issued new versions of its Fair Labor Standards Act (Federal Minimum Wage) and Employee Polygraph Protection Act posters. As of August 1, 2016, covered employers must display the revised versions of the posters. The new posters may be downloaded from the links below. The Department of Labor expects to make print copies available for order soon.

For the Fair Labor Standards Act (Federal Minimum Wage) downloadable poster click here. For the Employee Polygraph Protection Act downloadable poster click here.

For more information regarding these postings or other employment posting requirements, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

Most employers probably wouldn’t consider themselves to be “lucky” enough to be cited by OSHA in early 2016, but if they were, it was a lot less expensive than it will be later this summer. Effective August 1, 2016, the Federal Civil Penalties Inflation Adjustment Act of 2015 requires federal agencies, including OSHA, to make a one-time adjustment of civil penalties to equalize with inflation – the first such adjustment since 1990. Much like the DOL will do with overtime salary thresholds under the FLSA, the Act also requires the impacted agencies to annually increase penalties for inflation.

The penalties have increased as follows:

Serious, Other-than-Serious, and Failure to Post Violations
Current Maximum Penalty: $7,000 /violation
New Maximum Penalty: $12,471/violation

Failure to Abate
Current Maximum Penalty: $7,000/day beyond the abatement date
New Maximum Penalty: $12,471/day beyond the abatement date

Willful or Repeated Violations
Current Maximum Penalty: $70,000/violation
New Maximum Penalty: $124,709/violation

States that operate their own occupational safety and health programs are required to adopt maximum penalties that are at least as effective as the federal penalties.

For more information, please visit OSHA’s website or contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

By: Jeffrey M. Embleton

On June 27, 2016, U.S. District Judge Sam R. Cummings issued a nationwide injunction blocking enforcement of the Union Persuader Rule which was to take effect on July 1, 2016. This Rule would have required employers and management law firms and consultants to publically report payments for certain advice and consultation that was protected from disclosure for over a half century under the Advice Exemption. Many business and legal organizations, including the American Bar Association, vigorously objected to this new rule because they claimed it would create ethical and confidentiality issues for lawyers and companies required to disclose lawyers’ advice. In fact, several law firms have announced they would no longer provide union avoidance training or advice based on the new disclosure rules. This recent decision marks the second ruling in less than a week by two separate federal district courts. Last week, the U.S. District Court in Minnesota refused to enjoin enforcement of the new rule although the court did find that the plaintiffs (an association of various law firms) were likely to succeed, “in their claim that portions of the new rule conflict with the (Labor-Management Reporting and Disclosure Act of 1959 (LMRDA)).”

The district court in Texas went considerably further, however, when it issued a nationwide injunction blocking enforcement of the new rule.

What the Court said…

In its 90-page opinion, the court spent the first 30 pages detailing the evidence that was presented, including eight witnesses presented on behalf of the consortium of business groups and a number of exhibits. Interestingly, the Department of Labor chose not to call any witnesses or introduce any evidence. The witnesses included practicing lawyers, a former Board Member from the National Labor Relations Board, the former President of the American Bar Association and other specialists. The court specifically referenced the American Bar Association’s lengthy opposition to the proposed Persuader Rule and pointed to the ABA’s discussion on the conundrum that lawyers would be faced with in deciding whether to disclose the “advice” given to its employer/clients or choose not to give any advice at all. The court also noted that the estimates of the cost of compliance in the first year alone ranged from $7.5 billion to $10.6 billion with annualized costs thereafter of $4.3 billion to $6.5 billion, far in excess of the $826,000 calculated by the Department of Labor. Finally, it concluded that the new Persuader Rule failed on several legal grounds because, the Court found, it is likely that:

-DOL lacked statutory authority to promulgate and enforce the new Advice Exemption Interpretation of the Persuader Rule;

-The new rule is arbitrary, capricious and an abuse of discretion;

-The new rule violates free speech and association rights protected by the First Amendment of the United States Constitution;

-The new rule is unconstitutionally vague in violation of the Due Process Clause of the Fifth Amendment of the U.S. Constitution;

-The new rule violates the Regulatory Flexibility Act; and

-The plaintiff associations have shown the substantial threat of irreparable harm.

The court thus concluded that a nationwide injunction requiring enforcement of the new rule was appropriate and that such preliminary injunction would stay in place until further order of the court or final resolution of the merits of the case.

What Does This Mean for Employers and Law Firms?

Many law firms and employers were faced with a decision as to whether to enter into new engagement letters before July 1^st covering activities that were to be regulated under the new Persuader Rule or, as some law firms decided, to simply get out of the business of providing advice and strategy on union avoidance. Fortunately, the district court’s order removes that immediate deadline although it is expected that this case will be appealed to the Federal Court of Appeals. Thus, it is likely we have not heard the last of this particular case or the challenge over the validity of the new Persuader Rule. Additionally, there is one more case pending in the U.S. District Court in Arkansas and we are awaiting a ruling from the court which may come very soon.

Employers and practitioners are encouraged to keep a close eye on the court challenges. It may be prudent to move forward and enter into engagement letters specific to union avoidance training and advice out of an abundance of caution although it is unlikely that the DOL will seek to enforce the rule in light of the district court’s ruling in Texas until legal challenges are complete. We will continue to keep our readers advised as further developments occur.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER

All of us at Mansour Gavin LPA watched the NBA playoffs hoping that maybe, just maybe, this was Cleveland’s year. We hosted Cavaliers dress down days to benefit charities, employed various good luck charms like lucky suits to ensure a win, and had plenty of water cooler discussions about the previous night’s games. And when the 2016 NBA Champion Cleveland Cavaliers hosted their victory parade and rally last Wednesday, June 22nd, we had an amazing bird’s eye view of the festivities from our office. The pictures above were taken at 8:30 a.m., 11:00 a.m., and when LeBron (finally) came through around 2:30 p.m. Bonus points if you can find him in the crowd!

The female attorneys of Mansour Gavin LPA hosted their second annual Women’s Night Out on Tuesday, June 21st, at Merwin’s Wharf in the Flats. Attendees enjoyed drinks and hors d’oeuvres from the Cleveland Metroparks restaurant, and listened to Saana Julien, CEO, Public Square Programming and Operations, speak about her experiences getting Public Square ready for its grand opening and plans for the future of the location. Many thanks to those who joined us, and we hope to see you back next year!

Mansour Gavin LPA President Tony Coyne, a member of the firm’s Real Estate and Land Use practice group, was recently named an Alumni of the Year by Cleveland-Marshall College of Law’s Alumni Association. Coyne, along with co-honoree, Tucker Ellis Partner Carter Strang, were recognized at the annual CMLAA Luncheon. Tony’s involvement with the City of Cleveland and Planning Commission, as well as all of his work as chairman of the Group Plan Commission, which spearheaded the redevelopment of Public Square, were highlighted as examples of his community involvement. Congrats, Tony, on a well-deserved award!

On June 2, 2016, the Equal Employment Opportunity Commission issued a Final Rule increasing the penalty to employers for violations of the notice-posting requirements of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of 1990, and the Genetic Information Non-Discrimination Act from $210 per violation to $525. The last increase was in 2014, from $110 to $210. Employers can expect annual increases hereafter. Per the Final Rule, periodic inflation adjustments are required by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which requires each federal agency to issue regulations not later than July 1, 2016, and not later than January 15 of every year thereafter, adjusting for inflation the maximum civil penalty that may be imposed pursuant to each of the agency’s statutes, in order to maintain the remedial impact of civil monetary penalties and promote compliance with the law.

For more information on this and other matters, please contact Mansour Gavin’s Labor and Employment Practice Group.

LEGAL DISCLAIMER