Recent Appellate Court Decision Provides Guidance For Investigating Intermittent FMLA Abuse

Contributed by Steven Jados, December 8, 2016

Intermittent FMLA leave can be a source of frustration for employers even when it is used appropriately because it complicates staffing and planning and interrupts business operations. But when an employee’s use of intermittent leave seems just too convenient (e.g., when it is regularly used on Fridays and Mondays to make long weekends), employers naturally grow suspicious.

The recent Sharif v. United Airlines, Inc., decision from the U.S. Court of Appeals for the Fourth Circuit confirms that if an employer is able to prove intermittent FMLA abuse by conducting a prompt and thorough internal investigation, and perhaps some luck, it is justified in taking action against an FMLA abuser.

Sharif arranged his schedule so that he was required to work only one shift – March 30 — during a three-week period. Having arranged that schedule, Sharif took a vacation to South Africa.  At approximately 1 a.m. on March 30th, Sharif left a voicemail saying he needed to take intermittent FMLA leave for his shift that day.

out of office at the beachSharif’s use of intermittent FMLA leave in the midst of a lengthy vacation struck United as unusual as did the fact that Sharif’s wife (also a United employee) was taking similarly-scheduled time-off. Furthermore, Sharif had taken FMLA under similarly suspicious circumstances in 2013. United investigated Sharif’s whereabouts and learned, among other things, there were no flights from South Africa at that time would have allowed him to return to the U.S. in time for his shift. When United questioned Sharif, his story shifted multiple times suggesting he was being dishonest. Ultimately, United concluded Sharif never intended to work his March 30th shift and terminated him.

Sharif sued alleging he was terminated in retaliation for taking FMLA leave. United responded that Sharif’s use of FMLA leave on March 30th was fraudulent. United prevailed in the district court without a trial, and the appellate court upheld the judgment because United made “a reasonably informed and considered decision” before terminating Sharif.

United’s investigation uncovered facts—and an equivocating employee—that made the case for termination a much easier decision than most employers typically face. Nevertheless, employers can still learn lessons from the thoroughness of United’s investigation. When faced with suspected FMLA abuse, employers should conduct as much of the investigation as possible before interviewing the employee. When it is time to interview the employee, employers must carefully document the answers the employee provides. If the employee is a habitual FMLA abuser, careful documentation of prior explanations for FMLA use may, over time, reveal inconsistencies and untruths that are helpful in the future.

The bottom line is that FMLA abuse is usually difficult to establish. Employers should consult with experienced labor and employment counsel before, during, and after any investigation of suspected abuse to ensure that whatever decision is made is supported by strong evidence that can withstand court scrutiny.


Contributed by Noah A. Frank

As we previously reported, on 11/22/2016, Judge Amos Mazzant (E.D. Texas) granted a preliminary injunction that halted the 12/1/2016 implementation of the DOL’s Final Overtime Rule, which would have more-than-doubled the minimum salary level for executive/administrative/professional exempt employees.Wage-Hour2

On 12/1/2016, the U.S. DOL filed a notice of appeal to the Fifth Circuit Court of Appeals, indicating that it strongly believes that the DOL followed all required administrative processes, and there is no reason to delay implementation of the Final Rule.

This fight is not over. Employers that have not yet undertaken serious analysis of the duties of claimed exempt positions should do so promptly and determine the strategies they will implement should the injunction be vacated. Stay tuned for further news and analysis of this hotly evolving issue.


Contributed by Jonathon Hoag, November 30, 2016

63527433 - december 1. calendar on white background. 3d illustration.OSHA previously delayed enforcement of its controversial post-accident drug testing and safety incentive rules until December 1, 2016. OSHA agreed to the delay at the request of a federal Judge who was considering a lawsuit requesting injunctive relief to prevent the new rules from going into effect. This week, the Judge issued a decision denying the request for injunctive relief. In light of the decision, OSHA announced it intends to begin enforcement of the new rules on December 1, 2016.

As a reminder, this injunction was filed because during the rulemaking process, OSHA indicated that blanket post-accident drug testing programs or safety incentive programs that discourage reporting of injuries may constitute a violation and subject employers to penalties. Industry groups filed suit asserting that OSHA overstepped its authority and did not follow correct rulemaking procedures. The industry groups sought a nation-wide injunction, which would have relieved all employers from the new rules.

Importantly, in the ruling denying the request for an injunction, the Judge determined that post-accident drug testing and safety incentive programs are not prevented under OSHA’s new rules; OSHA is merely placing limitations on practices that might discourage the reporting of accidents. Employers should ensure that policies and practices concerning drug testing and safety incentives have been reviewed and updated in light of OSHA’s new rules.

Business Realities Under the Halted DOL Final Overtime Rule

Contributed by Carlos Arévalo and Noah A. Frank, November 28, 2016

As we previously reported, last week on 11/22/2016, US District Judge Amos Mazzant blocked the 12/1/2016 implementation of the DOL Final Overtime Rule when he issued a preliminary injunction in favor of the plaintiffs (21 States and over 50 business organizations) in litigation pending in the Eastern District of Texas.


The Final Rule, announced on 5/23/2016, would increase the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually) (see our prior article for more information).  Notably, there was no change to the Duties Test to determine whether a white collar executive/administrative/professional position actually qualified for the exemption. For months, employers across the country worked toward ensuring compliance with the Final Rule by analyzing job duties, raising salaries, converting exempt employees to non-exempt, reducing benefits, or least preferably, preparing to let employees go.


Judge Mazzant ruled that the DOL exceeded “its delegated authority and ignore[d] Congress’ intent by raising the minimum salary level such that it supplants the duties test.”  In further support of his decision, he also noted that the Supreme Court routinely strikes down “agency interpretations that clearly exceed a permissible interpretation based on the plain language of the statute, particularly if they have a great economic or political significance.”

While the preliminary injunction puts the Final Rule on hold, the case moves forward until the court determines whether the DOL had authority to make the Final Rule and whether it is valid.  In the meantime, the DOL could issue an amended rule. Alternatively, Congress may choose to act on House Bill 5813 or Senate Bill 3464, which would phase in salary increases starting at $692 per week ($35,984 annually) and reach the DOL’s salary levels in 2019 or 2020 respectively. Then, there is also the possibility that the next president will take action upon taking office.


Of course, a number of employers have already implemented, or notified employees of, changes as a result of the Final Rule. To the extent that such changes (or announcements) included raising salaries, employers must weigh the adverse impact on employee morale of a salary reduction versus financial burdens of staying the course. Consider strategies when hiring new employees, but do so with caution to avoid drawing equal pay or other discrimination charges. For changes not yet implemented or announced, it would be appropriate to hold off until the issue is resolved.

Because the Duties Test remains unchanged, employers that have not yet analyzed their workforce to ensure current compliance must take a critical look at their operations – just because employees are currently paid $455/week or more does not mean they are properly exempt.

Experienced employment counsel can assist with auditing current compliance, and assisting with strategies for implementing changes. In any event, stay tuned as we anticipate that overtime reform is likely to occur in light of this injunction and the 2016 election results, and wage and hour litigation is sure to follow.

URGENT ALERT: Court Enjoins DOL Overtime Rule!

Contributed by Noah A. Frank, November 23, 2016

On November 22, 2016, a Texas federal district court granted a nationwide preliminary injunction against the U.S. Department of Labor’s overtime rule. State of Nevada v. U.S. Dept. of Labor, No. 4:16-cv-00731-ALM (E.D. Tex. 11/22/2016).

This injunction halted the rule’s December 1, 2016 implementation that would have more-than-doubled the salary level to $913 per week for overtime-exempt executive, administrative, and professional white collar workers.

We will provide additional details on what this preliminary injunction means for employers after the Thanksgiving holiday.

As If You Didn’t Have Enough to Worry About: Antitrust Law and Personal Liability

Contributed by Beverly Alfon, November 22, 2016

The Department of Justice (DOJ) and Federal Trade Commission (FTC), the agencies that jointly enforce antitrust law, issued an “alert” last month: “Antitrust Guidance for Human Resources Professionals.” The guidance is aimed at HR professionals in order to put them on notice regarding employer hiring and compensation practices that may violate antitrust laws. There are two main points:

  1. “No-Poaching” agreements (agreements not to recruit certain employees) and wage-fixing agreements (agreements not to compete on terms of compensation) between employers are illegal. 

16306823 - 3d illustration of scales of justice and gavel on orange backgroundThese types of agreements are illegal per se even if they are not made formally in writing or through a third-party. This means that if the DOJ uncovers one of these agreements, it will be deemed a violation of antitrust law, regardless of whether it has an actual negative effect on competition.

The DOJ warns that in these cases, it may “…bring criminal, felony charges against the culpable participants in the agreement, including both individuals and companies.” Therefore, in addition to prosecuting the company, the DOJ may prosecute you individually for criminal felony for your participation in the agreement. Even if the agencies do not pursue criminal charges, they may nonetheless pursue civil liabilities. Also, any individuals injured by the agreement may also sue for treble damages (i.e., three times the actual damages) and attorneys’ fees.

These restrictions do not appear to extend to “no-hire” agreements that are related to legitimate business transactions (e.g., severance agreements, joint venture agreements, settlement agreements, etc.). However, the no-hire agreement should be part of broader, legitimate business endeavor so that it is clear that it is not aimed at suffocating competition.

  1. Avoid sharing sensitive information with competitors.

Sharing information with competitors regarding employee work terms and conditions may also violate antitrust laws. The guidance states that “[e]ven if an individual does not agree explicitly to fix compensation or other terms of employment, exchanging competitively sensitive information could serve as evidence of an implicit illegal agreement.” Further, “[e]ven if participants in an agreement are parties to a proposed merger or acquisition, or are otherwise involved in a joint venture or other collaborative activity, there is antitrust risk if they share information about terms and conditions of employment.”

Does this restriction extend to benchmarking and compensation surveys? The guidance indicates that soliciting or responding to HR association salary/wage surveys may be unlawful. It cautions those who belong to HR organizations to avoid “discussing specific compensation policies or particular compensation levels” with members who work for competitor companies. DOJ/FTC guidance regarding how to share such information without running afoul of antitrust laws can be found hereSee, Statement 6. Not all exchanges of information are unlawful. It may be permissible if (1) a neutral third party manages the exchange; (2) the exchange involves relatively old information; (3) the information is aggregated to protect the identity of the underlying sources; and (4) enough sources are aggregated to prevent competitors from linking particular data to an individual source.

Bottom line:  While the FTC and DOJ enforcement focus may shift in 2017, there is no guarantee – and antitrust law is nothing new. The DOJ also expects that the guidance will lead to stronger cooperation with state antitrust enforcers. HR and corporate decision-makers need to be on the same page. Be aware of the “red flags” identified by the DOJ and consider training for all who are involved in hiring and compensation practices, including those in the C-suite.

USCIS Has Released the New Form I-9

Contributed by Sara Zorich, November 17, 2016

employerOn November 14, 2016, the U.S. Citizenship and Immigration Services (USCIS) released the new version of the Form I-9. The Form I-9 is the form employers are required to complete for each newly hired employee in the United States to verify the employee’s identity and eligibility to work in the United States.

Employers may continue using the Form I-9 dated 03/08/2013 N only through January 21, 2017. NO LATER THAN January 22, 2017, employers MUST use the revised form (dated 11/14/2016 N) for all new hires and any employee that requires reverification of employment eligibility.

The new Form I-9 contains some revisions that should be noted:

  1. The instructions are now a separate document containing 15 pages (including more in depth instructions for employees/employers and a list of proper abbreviations for Section 2 documents);
  2. A field in Section 1 has been changed from “other names used” to “other last names (if any);”
  3. Section 1 was changed for some foreign nationals to enter EITHER the Alien Registration Number/Form I-94 Number OR Foreign passport number/Country of Issuance (not both);
  4. New Section 1 requirement for employees – employees MUST indicate whether or not they used a preparer/translator in a new field;
  5. There is now the ability for multiple translators/preparers if such were used;
  6. The instructions indicate there should be NO blank fields in Section 1; thus, if an employee does not complete a field in Section 1 because they are not required to or it is not applicable to them they MUST put N/A in the field;
  7. New Section 2 requirement for employers – employers must complete a new Citizenship/Immigration Status field at the top of Section 2 where the employer needs to input the number corresponding to the employee’s citizenship/immigration status from Section 1 (i.e. #1 = citizenship);
  8. The new instructions relating to Section 2 indicate that when a document presented by an employee does not contain a document number and/or expiration date, the employer MUST put N/A in the applicable field;
  9. The new form is a “smart form” with enhanced dropdown features to assist in completion.  However note, the new form is NOT an electronic form in compliance with Form I-9 electronic regulations.  Thus, anyone completing any part of the new smart form using adobe acrobat will still need to print the form, have the employee/employer provide a handwritten signature and maintain a copy of the original Form I-9. Remember, employees must complete Section 1 and employers complete Section 2. Thus, employers may NOT pre-populate any portion of Section 1.

The revised Form is available here.

Employers should review their current Form I-9 policies and practices to ensure they have proper Form I-9 compliance procedures in place. Furthermore, employers should plan on how and when they will implement the new Form I-9 prior to the January 22nd deadline.