First Facebook and Now Twitter … Social Media Legal Compliance Challenges Are No “LOL” Matter!
By Scott Callen
Employees continue to file suits challenging company social media handbook policies and companies who discipline employee use of online tools like LinkedIn and Facebook. The New York Times (http://www.nytimes.com/) recently reported, and various other media reports indicate, that absent a settlement, the National Labor Relations Board (NLRB) (http://www.nlrb.gov/) plans to commence a legal proceeding challenging a company’s social media policies and response (possible verbal reprimand) involving an employee’s Twitter post related to the company’s cooperation with union members.
The National Labor Relations Act (NLRA) is a federal labor law that prohibits companies from violating a worker’s federally protected right to engage in concerted, protected activity with co-workers to improve working conditions. The NLRB will commence legal proceedings claiming the company improperly restricted the employee’s right to use Twitter to discuss working conditions with co-workers and implemented an unlawful social media policy that chilled employees’ rights to discuss working conditions, which the NLRB will assert is a violation of Section 8(a)1 of the NLRA.
This case is not the first publicly reported social media legal challenge by the NLRB. In October 2010, the NLRB challenged a company over its social media policy after the company allegedly terminated an employee for criticizing her boss on Facebook. See Labor and Employment Law Weekly Update (Week of November 22, 2010) (http://tinyurl.com/635nhsw). The company denied the allegation by asserting the employee termination resulted from performance issues, and a settlement was reached requiring the company to revise its Internet use policy.
Based on this continuing wave of legal challenges against social media policies and employment practices, it is prudent for companies to review social media policies frequently to ensure legal compliance, monitor this evolving area of labor and employment law, and obtain guidance from the human resources and legal departments when disciplining employees for social media activity.
Labor Department Clarifies That Employees Own Their Tips
By Robert S. Bressler
In recently finalized amendments to employment regulation 29 CFR § 531.52 (published on April 5, 2011) issued under the Fair Labor Standards Act (FLSA) (the “Amended Rule”), the Labor Department further clarified its position with respect to tip credits under 29 CFR § 531 and employees’ ownership rights over their tips.
The FLSA requires employers to pay their employees a minimum wage (currently $7.25 an hour) but allows employers to claim a tip credit toward that minimum wage if several conditions are met. Employers may currently claim a maximum tip credit of $5.12 an hour ($7.25 minus the minimum required cash wage of $2.13 an hour). In order to claim a tip credit, an employer must notify its tipped employees of the tip credit provisions in the law and must permit its employees to keep all of their tips.
A 2010 federal case raised the issue of whether employees maintain ownership rights over all of their tips when the employer does not claim a tip credit. In Cumbie v. Woody Woo, Inc. (9th Cir. 2010), the employer restaurant paid its employees the full minimum wage and did not claim any tip credits. The employer then pooled all employees’ tips (including employees who did not usually receive tips) and paid portions of the tip pool out to all employees. Relying on the fact that the employer did not claim a tip credit, the court upheld the restaurant’s policy, holding that the employee did not own her tips.
The Amended Rule specifically reverses the Ninth Circuit’s decision in Cumbie. It makes clear that tipped employees own their tips and that the only permitted use of an employee’s tips by an employer under the FLSA is through a tip credit or tip pooling arrangement as expressly allowed under the FLSA. The Amended Rule now states that “[t]ips are the property of the employee whether or not the employer has taken a tip credit under section 3(m) of the FLSA. The employer is prohibited from using an employee’s tips, whether or not it has taken a tip credit, for any reason other than that which is statutorily permitted in section 3(m): As a credit against its minimum wage obligations to the employee, or in furtherance of a valid tip pool.”
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