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"Changing Currents in Employment Law" is the DC Bar's annual three-hour event featuring legal updates and practice tips from the area's top employment attorneys — all for CLE credit. TELG's Scott Oswald serves as faculty director and will moderate the event. Here he previews the Wage & Hour panel with panelist and defense-side lawyer Paul DeCamp of Epstein Becker & Green.
This interview by TELG managing principal R. Scott Oswald was published by The Employment Law Group, P.C. on August 3, 2018.
Changing Currents 2018: Wage & Hour Panel Preview
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(Transcribed and edited lightly by The Employment Law Group)
R. Scott Oswald: We are here in Paul DeCamp’s office and we are talking to Paul about his panel at “Changing Currents in Employment Law,” which is on October 30th of this year, 2018.
Paul, you’re doing a program on hot topics in Fair Labor Standards Act litigation and things to look for. Give us a sense, for folks that are watching right now, of what they can expect if they come to Changing Currents.
Paul DeCamp: Well there’s really been a lot going on in the last year. We’ve had a number of Supreme Court decisions that significantly affect the practice. One is Encino Motorcars v. Navarro, dealing with the standard for looking at exempt v. non-exempt classification. We’ve had Epic Systems v. Lewis, dealing with enforcement of arbitration agreements with class waivers — that affects a lot of the litigation that we see.
We’ve also seen the Department of Labor trying to update its regulations concerning the executive, administrative, and professional exemptions. That’s been a saga that’s been ongoing for the past several years: There’s litigation going on right now, as well as active rule-making, and so employers need to get ready for that.
We’ve seen the Department of Labor resuming issuing opinion letters, which it had suspended for a number of years. It has now gotten back into issuing opinion letters, so that is an area of guidance that employers are going to see.
And we’ve also seen recently an amendment to the FLSA regarding the tip credit provisions, relating to tip-pooling among other things. So it’s important for employers in those industries, like restaurants and hotels, to really have a good handle on what is — and is not — allowed under federal law.
Oswald: With so many Supreme Court decisions coming down in the area of the Fair Labor Standards Act, my guess is your clients are on the phone with you all the time, saying, “Hey, you know, how does this affect me?”
What are some of the issues that are coming up for them? What’s the advice that you’re giving right now to your clients?
DeCamp: One of the hot topics right now is arbitration agreements and class waivers.
A lot of employers right now — a lot of clients — are trying to figure out, “Should we have class waivers or not?” That gets wrapped up in a number of issues: Some legal, and some more employee-relations, related to #MeToo and some other types of allegations. We’ve had some clients that want to have arbitration for some types of claims, but not for others.
And so employers are trying to think about what is most consistent with how they want to treat their workers.
We’ve also seen a lot of questions regarding the contingent workforce and the gig economy, and whether people really should be classified as employees, or contractors, or potentially something else.
And there’s the ongoing saga of exempt/non-exempt. I think every employer has that issue to some extent.
Oswald: So let’s take class-action waivers. What’s the kind of advice you’re giving to clients who are coming to you and saying, “Hey, you know, in light of the Supreme Court’s decisions, should we be putting class action waivers in our arbitration agreements?”
DeCamp: We are suggesting that it’s something that employers ought to take a close look at.
For employers that are doing business in California, there are separate issues under California law about the enforceability of the waivers for certain claims under state law. But generally speaking we’re advising clients that at least the risk of potentially violating the National Labor Relations Act has been dealt with now by the Supreme Court — so one big concern that employers had, one reason not to have waivers, has been removed.
There are still other issues that clients need to work out, including the downside of having the waivers — meaning you might find yourself with a lot of individual arbitrations — but it’s a decision that we think clients ought to be making now, informed by the recent changes in the case law.
Oswald: So can you have class-action … well, let’s just take waivers in general. Can you have waivers for some kinds of claim, but not for others? Where’s the line?
DeCamp: Probably yes. I mean, the courts have been enforcing arbitration agreements that the parties agreed to. As long as an agreement doesn’t seem to be procedurally or substantively unconscionable, courts are enforcing them.
Employers [will] want to make sure that they can articulate a good reason for why they’re drawing the lines they’re drawing, and agreements should not be one-sided. We’re encouraging employers, for example, to make sure that if they’re requiring employees to arbitrate, the employers are also agreeing to arbitrate claims — so that it’s bilateral.
But if the agreements overall are fair, it’s looking increasingly like the courts are going to enforce them.
Oswald: Got it.
Let’s talk about the gig economy, because that really is a hot topic right now. What kind of issues are coming up there — and what kind of advice are you giving to clients that are, you know, right in the thick of it?
DeCamp: The gig economy is one of the most challenging areas of the law, because we’re seeing new business models cropping up.
Some folks say, “Well, there’s nothing new about that — some of those models have been around in various iterations for decades.” But we’re seeing new industries involving a lot of I.T. components, a lot of just-in-time matching of services, in a variety of industries.
[These] companies are popping up with a contractor model and then reaching a certain level of business — a volume of revenue where they start to draw attention and maybe want to go public, or maybe want to get into more of a growth mode. And they’re finding they have to address this issue head-on in a way that they did not when they were smaller.
So we’re having a lot of interesting, challenging conversations with businesses in that space about what the future looks like for them.
Oswald: So what does the future hold? Give us a little sense of, you know, if we sat down a year from now, what are the issues we’d be talking about in, let’s say, summer of 2019?
DeCamp: I think in summer of 2019 we’ll be much closer to having a sense of what the Department of Labor is doing with the overtime regulation. We will probably have a proposed rule at that point, so there’ll be a lot of discussion about what companies are going to do to adapt to what we presume will be an increase in the salary requirement for those exemptions.
And I think we’ll also be talking about the gig economy: That’s not going to go away. I think those issues are only going to become more intense because we’re seeing a divergence of the FLSA — which is a very old and venerable statute, been around 80 years this year, designed with factories and farms in mind — being superimposed on industries that are very I.T.-based.
We’re seeing competition now from robots and artificial intelligence, and a lot of price pressure on labor at the lower end of the wage scale. It’s not clear how all of those concerns are going to coalesce going forward. I think ultimately we’re going to see a lot of pressure for some legislative change at the state and federal level.
These are challenges that I think both sides of the aisle recognize are real. They disagree as to the solutions for them, but I think something’s going to have to give because right now there’s a lot of pressure on jobs at the lower end of the pay scale — [not just] in terms of pay, [but] even on the existence of those jobs.
Oswald: I’d like to talk a little bit about you personally. When you’re not lawyering, advising your clients, and you’re not parenting — you’ve got three kids — where are you spending your time?
DeCamp: Trying to catch up on sleep! And music, and exercise. Those are my main activities.
Oswald: Paul, thank you so much. It was great to spend some time with you today.