Labor Classifications in the Sharing Economy Model of Uber and Lyft

by Jillian Levitt

It was a revolutionary concept: no need to hassle with hailing a cab or even carrying cash. Uber and Lyft offer easy smartphone apps that can schedule a pick up at your location and electronically charge your credit card to pay for the ride. Many people find the services faster and more efficient than taxis. The extraordinary success of this start-up technology is reflected in Uber’s $40 billion valuation.[1]

On its website, Uber states that its services “constitute a technology platform that enables users of Uber’s mobile applications… to arrange and schedule transportation… with third party transportation providers.” [2] This economic model of classifying its drivers as third party providers rather than as employees has raised concerns among labor advocates.[3] Since drivers who make the concept of the sharing economy a reality are considered independent contractors, they receive few of the traditional benefits of employees such as minimum wage guarantees, health insurance, worker’s compensation, unemployment insurance, and the right to join a labor organization.[4] In addition, as independent contractors, drivers must pay the full cost of Social Security and Medicare taxes without any employer contribution—a cost of 7.65% of their yearly compensation.[5]

A class action complaint by drivers alleging that Uber has “misclassified [them] as independent contractors” in violation of Massachusetts law was filed on June 26, 2014.[6] Moreover, the issue of Uber’s job classification was also raised in Boston Cab Dispatch, Inc. v. Uber Technologies, Inc.[7] In Boston Dispatch, plaintiff radio dispatchers alleged that Uber was engaging in unfair competition by “operating its service without incurring the expense of compliance with Massachusetts law and Boston ordinances.”[8] Uber claimed it could not be held liable because “it does not own any cars.”[9] However, the District Court of Massachusetts found sufficient evidence that Uber was “exercising control” over the vehicles-for-hire that compete with the plaintiffs.[10]

In California, drivers of Uber and Lyft have each commenced labor classification lawsuits in federal court, alleging they should be treated as employees rather than independent contractors. In Cotter v. Lyft, the plaintiff drivers alleged that California law requires Lyft to treat its drivers as “employees rather than independent contractors” and that Lyft is “depriving them of California’s minimum wage, along with other rights that California law confers upon employees.”[11] The court in Cotter granted Lyft’s motion to dismiss the class action claims outside the state of California with leave to amend to include only the California drivers.[12] Similarly, in O’Connor v. Uber Technologies, Inc., the court, reversing its own prior ruling, concluded that the California Labor Code does not apply to class members who worked outside of California.[13] Plaintiffs in O’Connor have moved for interlocutory review of the court’s ruling to include out-of-state drivers.[14] In addition, a motion for summary judgment by Uber to dismiss based on the level of control Uber exercised over its drivers’ work is currently pending as of January 27, 2015.[15] The district court judges in both Cotter and O’Connor have indicated they are likely to let the suits proceed.[16]

The economic model that attempts to cut labor costs by classifying workers as independent contractors, instead of employees, is not unique to Uber or Lyft. One federal study concluded that “employers illegally passed off 3.4 million regular workers as contractors, while the Labor Department estimate[d] that up to 30% of companies misclassified employees.”[17] Where the law is unclear, however, employers may have a “legitimate disagreement with the Labor Department or I.R.S.”[18] In one recent case, the Ninth Circuit Court of Appeals in California held that FedEx had misclassified its drivers as independent contractors.[19] The court stated “[t]he principle test of an employment relationship is whether the person to whom the service is rendered has the right to control the manner and means of accomplishing the result desired.”[20] In finding that the FedEx drivers were employees, the court examined several secondary factors: the right to terminate at will; whether the worker had a distinct occupation or business; whether the work is performed under the principle’s direction; the skill required by the worker; the provision of tools and equipment; the length of time for performance of the services and the ongoing nature of the relationship between the worker and the principle; the method of payment; whether the work performed is actually part of the principle’s business; and the parties’ beliefs as to the nature of their relationship.[21] Whether the economic model of Uber and Lyft that classifies its drivers as independent contractors can withstand this analysis remains to be seen.

[1] Mike Isaac, Facing Demand, Uber Expands Funding Round by $1 Billion, N.Y. Times (Feb. 18, 2015, 1:17 PM),

[2] Uber, (last visited Feb. 21, 2015).

[3] See Rebecca Smith, Will Uber and Lyft make your job obsolete?, CNN (Feb. 10, 2015, 7:47 AM),; see also Ellen Huet, How Uber’s Shady Firing Policy Could Backfire On The Company, Forbes Blog (Oct. 30, 2014, 10:00 AM),

[4] It has been observed that in the new “sharing economy” state and local regulators are struggling to determine how they fit into their “jurisdiction and regulatory corpus.” Larry Downs and John W. Mayo, The Evolution of Innovation and the Evolution of Regulation: Emerging Tensions and Emerging Opportunities in Communication, 23 CommLaw Conspectus 10, 24 (2014-15).

[5] See Department of the Treasury, IRS, Publication 15 Cat. No. 10000 W (Circular E), Employer’s Tax Guide (2015), available at

[6] Yucesoy v. Uber Technologies, Inc., No. 14-2056C, 2014 WL 2892107 (Mass. June 26, 2014) (alleging violation of Mass. Gen. L.C. 149 § 148B).

[7] Boston Cab Dispatch, Inc. v. Uber Technologies, Inc., No. 13-10769-NMG, 2014 WL 1338148 (D.C. Mass. Mar. 27, 2014).

[8] Id. at *6.

[9] Id.

[10] Id.

[11] Cotter v. Lyft, Inc., No. 13-cv-04065-VC, 2014 WL 3884416, at *1 (N.D. Cal. Aug. 7, 2014).

[12] Id. at *5.

[13] O’Connor v. Uber Tech., Inc., No. C-13-3826 EMC, 2014 WL 4382880, at *12-13 (N.D. Cal. Sept. 4, 2014).

[14] Plaintiff’s Notice of Motion and Motion to Certify Order for Interlocutory Review, O’Connor v. Uber Tech., Inc., No. CV 13-3826-EMC, 2014 WL 6471647 (N.D. Cal. Sept. 10, 2014).

[15] See O’Connor v. Uber Tech., Inc., No C-13-3826 EMC, 2015 WL 355496 (N.D. Cal. Jan. 27, 2015).

[16] Rachel Emma Silverman, Judges Skeptical of Uber- Lyft Claims in Labor Case, Wall St. J. (Feb. 2, 2015, 7:21 PM),

[17] Steven Greenhouse, U.S. Cracks Down on ‘Contractors’ as a Tax Dodge, N.Y. Times (Feb. 17, 2010), available at

[18] Id.

[19] Alexander v. FedEx Ground Package Sys. Inc., 765 F.3d 981 (9th Cir. 2014).

[20] Id. at 988 (quoting S.G. Borello & Sons, Inc. v. Dep’t of Indus. Relations, 769 P.2d 399, 404 (Cal. 1989)).

[21] Id. at 994-96.

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by Jacqueline Smith

Restaurant Opportunities Centers United (“ROC”) is changing the way we interact with the food industry, with the re-launch of the group’s smartphone app Diners Guide.[1] Originally created in 2012, Diners Guide provides restaurant-goers with access to information regarding a restaurant’s employees’ wages and benefits, and allows app users to enter data of restaurants that are not already rated in the system.[2] The app, referred to as the Yelp for labor rights, provides newfound transparency into restaurant employer-employee relationships.[3]

The app’s creator has been named one of the “six groups that are reinventing organized labor.”[4] ROC-NY was originally formed following the September 11, 2001 attacks, in an effort to support the displaced restaurant workers of the World Trade Center.[5] In 2008, ROC became a national movement with the goal of improving wages and working conditions for restaurant workers throughout the United States.[6] Restaurant workers are one of the most vulnerable groups in the workplace, with relatively little unionization, low wages, and high turnover.[7] Thus far, ROC has recouped more than $20 million in stolen tips and wages for restaurant workers, while also actively organizing the worker community to advocate for better workplace conditions and wages.[8] One of ROC’s original co-founders, Saru Jayaraman, likens the organization to a modernized labor union, and says the organization receives a portion of its funding from employers who wish to promote a “‘high road’ for the industry.”[9]

If the restaurant receives a good rating by the app, it is designated as a “High Road” restaurant.[10] The Diners Guide app bases its ratings off of several factors, including, whether the restaurant has paid sick days for its employees, the wages of tipped and non-tipped employees, and whether the restaurant frequently promotes employees internally.[11] For instance, a restaurant’s score increases if the servers are paid above the tipped minimum wage, which is currently set at $2.13 per hour for tipped employees. Under the Fair Labor Standards Act (“FLSA”) employers must pay a tipped employee the non-tipped minimum wage if the employee’s tips do not make up the difference between the tipped and non-tipped minimum wage; however, this is a rarely enforced provision, considering about 10% of tipped employees’ wages continually fall below the federal minimum wage.[12] By publicizing restaurant employees’ wages and workplace practices, ROC hopes to impassion patrons to pressure management to change policy and add bargaining power to the restaurant employees.[13]

According to Diners Guide, the fast food burger chains In-N-Out Burger and Shake Shack are two of the highest rated restaurants in the U.S., both with ratings of 75%. Some restaurant fast food chains already pay their workers more than the minimum wage requirement.[14] One Detroit burger chain, Moo Cluck Moo, pays workers $15 per hour, compared to the national average of $8 per $9 an hour for fast food workers.[15] The company’s founder attributes the restaurant’s high customer satisfaction and low employee turnover to the increased wages, and further adds that low turnover is better for the company financially because the employer does not waste time and money retraining new employees.[16]

The Diners Guide app exemplifies an interesting phenomenon and is a new useful tool to effect policy change. ROC’s strategy is ingenious, considering Generation Y is known for viewing “corporations as having lots of power but little heart” and the hipster era tends to “try to create change by using their dollars.”[17] In addition to going on strike, restaurant employees may now also pressure their employers by publicizing the employer’s practices on social media and influencing the consumer’s dollar.

[1] Poncie Rutsch, Like Yelp for Labor Rights: This App Rates How Restaurants Treat Workers, NPR (Feb. 12, 2015, 4:45 PM),

[2] Dan Schultz, Want to Find a Restaurant That Treats Workers Well? There’s An App for That, NPR (Dec. 10, 2012, 11:22 AM),

[3] Rutsch, supra note 1.

[4] Josh Israel, 6 Groups that are Reinventing Organized Labor, Think Progress (June 27, 2014, 9:51 AM),

[5] Id.

[6] Restaurant Opportunities Centers United, (last visited Feb. 17, 2015).

[7] Associated Press, For Tipped Workers, A Different Minimum Wage Battle, NPR (Jun. 29, 2014, 6:45 PM),

[8] Israel, supra note 4.

[9] Restaurant Opportunities Centers United, supra note 6.

[10] Diners Guide to Ethical Eating, Restaurant Opportunities Centers United, (last visited Feb. 19, 2015).

[11] ROC United, Get ROC United’s Diner Guide App!, YouTube (Feb. 3, 2015),

[12] 29 C.F.R. § 531.50 (2011); see National Economic Council et al., The Impact of Raising the Minimum Wage on Women and the Importance of Ensuring a Robust Tipped Minimum Wage, 6 (March 2014), available at

[13] See Diners Guide to Ethical Eating, supra note 10.

[14] Allison Aubrey, A Burger Joint Pays $15 An Hour. And, Yes, It’s Making Money, NPR (Dec. 4, 2014, 6:46 PM),

[15] Id.

[16] Id.

[17] Who is the Gen Y “Hipster”?, Millennial Marketing, (last visited Feb. 19, 2015).

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Publix: Where Shopping is a Pleasure . . . Because Working There is a Pain?

by Alexandra Sanchez

If you have never been to Publix, you are missing out on the eighth wonder of the world. If you have never eaten a Publix chicken tender sub, you simply have not lived. Besides the impeccable Publix deli, what is it that makes Publix such a wonderful place to shop? Unfortunately, it seems that the pleasure of shopping at Publix may be derived from its employees’ pain.

Recently, a former assistant department manager for Publix recently brought an action on behalf of current and former Publix associates against Publix.[1] Claimants allege that Publix violated the Fair Labor Standards Act (“FLSA”).[2] Plaintiffs are categorized as fluctuating workweek (“FWW”) associates.[3]

Publix used a FWW method to calculate overtime pay for the employees.[4] An FWW method is generally used by employers to divide a fixed weekly salary by the actual number of hours worked in the week.[5] This calculation determines the week’s base hourly rate.[6] Under a FWW method, overtime is paid by adding an additional halftime for each hour worked per week beyond forty hours.[7]

The plaintiff employees assert that Publix calculated their wages in violation of FLSA.[8] The employees claim that Publix failed to include quarterly and holiday bonuses, as well as other forms of compensation.[9] “The retail bonus and holiday bonus are non-discretionary bonuses as that term is defined under the FLSA, and must therefore be included in the calculation of the regular rate for the work weeks covered by the bonus,” the employees said in their second amended complaint.[10]

The workers also said the retailer’s fluctuating workweek plan did not comply with the FLSA because associates did not “receive a fixed weekly amount for all hours worked whether few or many in a work week, and instead received weekly pay in varying amounts due to the additional payment of additional compensation including but not limited to a retail bonus.”[11]

Publix denied all liability, “maintain[ing] that the associates weren’t entitled to additional overtime pay and that is overtime pay plan met the requirements of the FLSA’s fluctuating workweek calculation method.”[12] Publix reached a hefty settlement of $30 million.[13] The settlement included roughly $5,000 each for the 1,580 employees who joined the litigation.[14]

This is not the first time the world’s greatest supermarket has been subject to criticism for its labor and employment practices. Since 2009, Publix has refused to join the Fair Food Program.[15] The Fair Food Program asks companies to voluntarily agree to pay an extra penny per pound of tomatoes.[16] That extra money goes into a fund to make sure pickers get raises and safer workplace practices.[17] Publix refuses to contribute to the fund, saying “none of this is the chain’s concern . . . suppliers are free to charge [Publix] more for tomatoes, which Publix would gladly pay.”[18]

Next time your Publix chicken tender sub is being doused in buffalo sauce, think twice about whether that employee is being treated fairly.

[1] Ott v. Publix Super Mkt., Inc., 2012 U.S. Dist. LEXIS 103571 at *2 (M.D. Tenn. July 24, 2012).

[2] Id.

[3] Id.

[4] Lisa Nagele, Court Approves $30 Million Deal Settling Publix Managers’ FLSA Overtime Claims, Bloomberg (Feb. 6, 2014),

[5] See 29 C.F.R. § 788.114.

[6] Id.

[7] Id.

[8] Ott at *2.

[9] Id.

[10] See Nagele, supra note 4.

[11] Id.

[12] Id.

[13] Id.

[14] Id.

[15] Florida’s Hometown Grocer, CIW, (last visited Feb. 14, 2015).

[16] Scott Maxwell, Publix Remains a Holdout in Fair-Wage Farm Debate, Orlando Sentinel (Dec. 6, 2014, 2:39 PM),

[17] Id.

[18] Id.

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Sorry! Civil Rights Act Does Not Apply to Transgenders, and That’s Just an Employee Handbook, Not a Contract.

by Neli Kharbedia

Leyth Jamal, who used to work for Saks Fifth Avenue in Houston, TX, alleges that she was verbally abused, compelled to go to the men’s bathroom, told to look “more masculine at work,” and terminated in 2012 based on her being transgender.[1] In addition, she was continually called “he and him.”[2] According to the lawsuit, “she was told she should separate her home life from her work life.”[3] Based on documents from the court, she was fired ten days after she sought help from the Equal Employment Opportunity Commission (“EEOC”) on the grounds of being harassed.[4] Jamal asserts breach of Title VII and asks for damages from the company and to stop Saks from acting in a discriminatory way in the future.[5]

The company answered with a motion to dismiss the case.[6] According to its statement, the company claims that it did not treat the worker in a discriminatory way and that Jamal’s complaint is not based on the facts.[7] Moreover, the company stated that transgender workers are not covered by the Civil Rights Act.[8] In its motion, Saks stated “that Title VII is a ‘prohibition against discrimination based on an individual’s sex’ and ‘is not synonymous with a prohibition against discrimination based on an individual’s sexual identity disorder or discontent with the sex into which they were born.’”[9] In addition, Saks Senior Vice President Kathleen Ruiz stated that Saks has traditionally had “policies and practices that are fully supportive of the LGBT community and [their] LGBT associates.”[10] Based on the Human Rights Campaign, Saks claims its policy is nondiscriminatory covering gender identity, but the company’s brief asserts that “it is well-settled that policies” that are included in an employee handbook do not produce a contract.[11]

The 1964 Civil Rights Act bans employers in the United States from terminating workers on the grounds of their gender.[12] However, its application to employers discriminating against transgender workers is ambiguous.[13] There is not unambiguous federal law to prohibit employers from discriminating against transgender employees.[14] In addition, Texas is not like eighteen states that have laws that include sexual orientation and gender identity in their laws against discrimination.[15]

But, in 2012, the EEOC asserted that discrimination on the grounds of gender identity is a part of sex discrimination of Title VII.[16] According to the EEOC, discriminating against a person on the grounds that the individual is transgender is sex discrimination.[17] U. S. Attorney General Eric Holder stated that the Department of Justice agrees that Title VII of the Civil Rights covers transgender individuals.[18] Moreover, although no federal law exists that bans discriminating against transgender individuals, in later years, courts have agreed that it is not legal.[19] According to Shannon Minter, legal director for the National Center for Lesbian Rights, unlike cases from around ten years ago, “[e]arly cases from the ‘70s and ‘80s were negative.”[20]

“The fight for explicit protection in federal law very much continues and those efforts are not going to go away” according to Ian Thomson, legislative representative of the American Civil Liberties Union.[21] Some have compared this to Civil Rights Movement of the 1960s.[22] However, hopefully this will be an easily won battle.

[1] See Payton Guion, Leyth Jamal: Transgender Employee Says She Was Discriminated Against By Saks Fifth Avenue, The Independent (Jan. 14, 2015),

[2] Katy Steinmetz, Does Saks Have the Legal Right to Fire a Transgender Employee?, Time (Jan. 12, 2015),

[3] Guion, supra note 1.

[4] Id.

[5] See id.

[6] Steinmetz, supra note 2.

[7] Guion, supra note 1.

[8] Id.; See Steinmetz, supra note 2.

[9] Guion, supra note 1; See Steinmetz, supra note 2.

[10] Josh Eidelson, Saks Claims It Has the Right to Discriminate Against Transgender Employees, Bloomberg (Jan. 9, 2015),; See Steinmetz, supra note 2; Meredith Hoffman, Saks Is Fighting to discriminate Against a Transgender Ex-Employee, Vice News (Jan. 13, 2015),

[11] Eidelson supra note 10.

[12] Guion, supra note 1; 42 U.S.C.A. § 2000e-2(a)(1) (West 2014).

[13] Guion, supra note 1.

[14] Guion, supra note 1; See Steinmetz, supra note 2.

[15] Steinmetz, supra note 2; See Guion, supra note 1; Hoffman, supra note 10.

[16] Guion, supra note 1; Steinmetz, supra note 2; See EEOC, Sex-Based Discrimination, EEOC, (Feb. 14, 2015).

[17] EEOC, supra note 16.

[18] Guion, supra note 1; Steinmetz, supra note 2.

[19] See Steinmetz, supra note 2.

[20] See id.

[21] Guion, supra note 1.

[22] See Hoffman, supra note 10.

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California Attempts the First Pass in the Fight for Cheerleader Minimum Wage

by Thomas S. Wolinetz

Cheerleaders of the National Football League (“NFL”) are fighting to get themselves classified as employees, which in turn would require them to be paid at least minimum wage.[1] The federal minimum wage is currently $7.25 per hour.[2] However, an NFL cheerleader could make less than $3.00 per hour in some instances.[3] Fortunately, it looks like change may be coming to the NFL sideline. State Assemblywoman Lorena Gonzalez of California introduced Bill 202 (“AB202”) on January 29, 2015, which would “treat cheerleaders of professional sports teams as employees under California law.”[4] Prior to AB202, cheerleaders were considered seasonal workers, thus denied federal minimum wage.[5]

Recently the cheerleaders for the Oakland Raiders, also known as the Raiderettes, were awarded a $1.25 million settlement for back wages owed to them.[6] Under the terms of the Raiderettes’ previous contract, the Raiderettes were paid less than $5.00 an hour.[7] However, the Raiderettes will be paid $9.00 an hour under their new contract.[8] Currently, the Cincinnati Bengals, Tampa Bay Buccaneers, Buffalo Bills, and New York Jets are still dealing with related lawsuits.[9] The biggest issue that has been raised in these suits is whether the cheerleaders are employees or independent contractors.[10] The cheerleaders argued that by following the argument of the NFL teams; any worker other than a player could be regarded as, not an employee, thus, deprived of minimum wage.[11]

It is hard for NFL teams to argue that the cheerleaders do not deserve minimum wage, especially considering the fact that teams split six billion dollars in revenue last season.[12] According to Bloomberg Business Week, based on New York’s $8.00 per hour minimum wage, factoring in the twenty hours each Buffalo Bills cheerleader had to invest once they were selected as a cheerleader for the forty-two weeks of their cheerleading season (tryouts, practices, regular season, and playoff games), the Bills would have to invest $235,000 for the entire cheerleading squad.[13] Further, many believe cheerleaders are a fundamental part of the NFL’s game day experience. For this reason, it seems inconceivable that NFL teams would continue to pay cheerleaders next to nothing, especially since an average NFL ticket price is about $85.00.[14]

I love the NFL and believe that the cheerleaders are an integral part of the experience of watching a football game. However, I do not think that it is acceptable in any instance to pay an employee below minimum wage. That is why I believe AB202 is a great first step in the right direction. Understandably it is only California that will be affected by the passage of AB202. However, it may lead other states to follow suit. Misclassification of workers is a huge problem in the United States.[15] That is even more of a reason an organization as large and public as the NFL should not be contributing to the problem—especially since the NFL teams can clearly afford to pay the cheerleaders at least minimum wage. It is time for the NFL and the NFL teams to step up and follow the precedent that the Oakland Raiders set when they awarded their cheerleaders fair pay. However, if the NFL and the NFL teams are unwilling to take these steps to pay cheerleaders fair wages, then the states should follow California and pass bills similar to AB202. Hopefully, AB202 is the beginning of fair wages for all NFL cheerleaders.

[1] Ned Resnikoff, NFL cheerleaders join student-athletes in national labor fight, MSNBC (May 8, 2014, 05:36 PM),

[2] Alison Doyle, Minimum Wage Rates for 2015,, (last visited Feb. 06, 2015).

[3] Tierney Sneed, String of Cheerleader Lawsuits the Next Headache for the NFL, U.S. News (Apr. 25, 2014, 05:08 PM),

[4] Lorena Gonzalez proposes bill to provide professional sports cheerleaders with employee rights, LGBT Weekly (Jan. 29, 2015),

[5] Sneed, supra note 3.

[6] Howard Bloom, NFL cheerleaders bring in money, but barely paid any, Sporting News Media (Sept. 11, 2014, 09:09 PM),

[7] See id.

[8] See id.

[9] See id.

[10] Sneed, supra note 3.

[11] Lisa Fernandez, NFL: Immune to State Labor Law in Raiderette Suit, NBC (Aug. 18, 2014, 01:25 PM),

[12] Darren Rovell, NFL teams split $6B in revenue, (July 10, 2014, 08:45 PM),

[13] Ira Boudway, What are NFL Cheerleaders Worth? Inside Their Fight for Minimum Wage, Bloomberg (Sept. 10, 2014),

[14] Bloom, supra note 6.

[15] Bob Sanders, State’s crackdown on worker misclassification not all it’s cracked up to be, NHBR (May 29, 2014),

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Lame Duck Legislation for Home Health Care Workers: Simply an Aberration of Benefits

by Emmanuel Bello

The health care community has experienced a large increase in demand for health care services for the elderly. Studies show that by 2050, the elderly community will likely reach 88.5 million people.[1] This incredible increase is largely attributable to our aging baby boomers[2] who now require elder care and who likely will continue to need such services until they die.[3]

The cost of medical care in the United States has steadily increased,[4] causing many elder patients to dip into their personal funds to supplement the portion of expenses not covered by health insurance or Medicare. Medicare is a federal health insurance program set up to help subsidize the cost of hospital and medical care for qualified patients.[5] Even with this program, many of the elderly still find themselves seeking other ways to meet the cost of medical care.[6]

This has led to a significant increase in the number of seniors seeking home health care services. It costs considerably less to receive health care in one’s residence than to stay in the hospital.[7] The patient seeking home health care services may seek to do so through a Home Health Care agency or simply directly hire a Home Health Care Aide. The benefit of going through an agency is that the agency, through Department of Health (DOH) and Department of Labor (DOL) regulations, bears the burden of running a background check on the aide and making sure that the aide is properly certified to provide the needed medical services.[8] Unfortunately, this service comes at a cost which is often higher than the cost of a direct hire.[9]

Until the passing of the recent DOL legislation, whether the patient chose to use an agency or not, the aides were exempt from the Fair Labor Standards Act (FLSA), consequently, they were not entitled to minimum wage and overtime when they worked over forty hours in a week.[10] This was very helpful in keeping costs down, but the patients’ gain was the aides’ loss. Studies show that the majority of aides worked more than thirty-four hours a week,[11] usually spread out among multiple agencies. Since many home health care aides come from lower income households, they need to work these hours to provide for their family.[12]

Although the recent DOL legislation—deeming home health care aides who work for agencies employees for FLSA purposes—was set forth as a remedy for workers who have been marginalized for years, it was really a proposed solution for the increased demand for elder care. Lawmakers hope that by giving aides overtime pay, they will decrease the high turnover rate that plagues the home health care industry.[13] Unfortunately, because lawmakers were motivated by many factors, the least of which was to help improve the social and economic position of a group of workers that have been neglected for close to a century, they may have doomed the industry.

From the patients’ perspective, this may become a huge financial burden. Patients, who are already in need of financial assistance, are now required to pay aides overtime if they use an agency. In many cases, this will compel patients to hire aides directly with price being a major motivating factor. As a result, this will likely lead to lower quality of care and inadequate medical assistance for the patient.

From the aides’ perspective, lawmakers have entitled them to benefits they may never realize. We already know why the patient does not see this as a favorable change, but what about the agency? Agencies charge patients, on average, $15 to $20 an hour and pay workers $10 to $12 an hour.[14] If a patient uses Medicare to cover the cost, the cost is regulated by giving the agency a preset amount for each case. This money received represents the pool of money from which the aides are paid, and the agency will recover its costs while trying to make a profit, which is the goal of any business. However, the recent change requires agencies to pay overtime from that same pool of preset money.

What incentive does an agency have to give an aide more than forty hours of work per week when they are working with such a tight profit margin? I see none. Not only may the benefits provided in the new legislation not reach the aide, it is also unlikely to resolve the issue of high turnover. What is the solution? Increasing the Medicare budget may be the quickest solution and the most burdensome on the taxpayer. What is truly unsettling is that once again, lawmakers have failed to take an honest look at this industry and assess how the legislation affects the major players. This might end up being a lame duck piece of legislation that may never realize its purpose, because patients and agencies will continue to circumvent it.

[1] Senior Care Industry Analysis 2015- Costs and Trends, FranchiseHelp, (last visited Jan. 25, 2015).

[2] Nick Lieber, CareLinx’s New Model for Home Care, Bloomberg (Oct. 25, 2012),

[3] Michael Lawson, Home health-care workers still fighting for higher wages, better benefits, American University School of Communication (Dec. 26, 2012),

[4] Katherine B. Wilson, Health Care Costs 101- Slow Growth Persists, California HealthCare Foundation (July 2014),

[5] What is Medicare/Medicaid?, MNT, (last visited Jan. 25, 2014).

[6] Alan Farnham, Boom Predicted for At-Home Care Industry, ABCNews (Apr. 13, 2013),

[7] Cost Effectiveness of Home Care, American Association for Home Care, (last visited Feb. 5, 2015).

[8] Types of Home Care Agencies, CarePathways, (last visited Feb. 5, 2015).

[9] Lieber, supra note 2.

[10] Minimum wage, overtime protections extended to direct care workers by U.S. Labor Department, U.S. Department of Labor (Sept. 17, 2013),

[11] Home Care Aides At A Glance, Paraprofessional Health Care Institute (Feb. 2014),

[12] Galina Khatutsky, M.S. et al, Understanding Direct Care Workers: A Snapshot of Two of America’s Most Important Jobs – Certified Nurses Assistants and Home Health Aides, U.S. Department of Health and Human Services (Mar. 2011),

[13] Id.

[14] Lieber, supra note 2.

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The Thin Line Between a Joke and an Insult

by Andrey Vitko

Humor brings insight and tolerance. Irony brings a deeper and less friendly understanding”.[1]
—Agnes Repplier

People tolerate humor differently as the perception of humor is very individualized. Some people do not care about being an object of sarcasm while some people get easily offended. It is not rare that employees and employers make questionable, and even border-line jokes during their course of employment.[2] Yet, the joke has to be really mean to give grounds for legal action, as most of them do not rise to the level of a lawsuit. What kind of joke would probably give a solid basis for a lawsuit?

Apparently, a clearly offensive one does. In a recent case that was ruled on January 27, 2015, the United States Court of Appeals for the Fifth Circuit analyzed the appropriateness of somewhat questionable behavior.[3] On June 19, 2009, a regular safety meeting for the company’s chauffeurs was interrupted by the appearance of a woman wearing a black gorilla suit.[4] After her sudden appearance, the woman started to approach one of the plaintiffs, saying “James, are you ready for this? Here’s your Juneteenth. Oh, these nice big black hairy lips. Don’t you want some? Oh, that nice banana in your pants. You could have worked for La Bare’s. Oh, don’t you want to make me scream.”[5]

Furthermore, no performances of any kind were ever typical practice for the company’s safety meetings.[6] Explaining the performance, the company’s management stated that the gorilla performance was intended to raise morale and lighten the mood.[7] Even though the plaintiffs and other employees felt “extremely offended, embarrassed, and angered by the performance,” the CorpCar manager told the plaintiff to get over it.[8]

The joke continued for several days as the gorilla-dressed woman kept meeting the plaintiff, asking him to “scratch on my little hairy butt for me.”[9] Finally, the plaintiff finally resigned in October 2009, after the management allegedly retaliated against him by assigning him odd hours, with longer spans of times between runs.[10] After that, the plaintiff commenced this lawsuit, alleging, among other claims, hostile work environment.

Analyzing the hostile work environment claim, the court applied the standard to evaluate whether the behavior in this case was hostile. A hostile work environment is one that “is permeated with discriminatory intimidation, ridicule, and insult that is sufficiently severe or pervasive to alter the conditions of the victim’s employment and create an abusive working environment.”[11] Furthermore, the court noted that only “extreme” conduct will be found sufficiently severe or pervasive: “simple teasing, offhand comments, and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the terms and conditions of employment.” [12]

While the employer challenged the claim, emphasizing the lack of frequency as the indicents occurred over two days, the court rejected the defendant’s claim, noting that “it is well established that ‘[u]nder the totality of the circumstances test, a single incident of harassment, if sufficiently severe, could give rise to a viable Title VII claim.’”[13] Taking all the evidence into account, the appeals court found that the alleged conduct was sufficiently severe to constitute actionable discrimination, “despite its brief tenure.”[14] Evidence existed from which a jury could easily find that the employer was

pejoratively comparing its African-American employees to gorillas: African-Americans have historically been subjected to such comparisons; the woman in the gorilla suit repeatedly emphasized the ‘black’ aspects of her gorilla suit; management scheduled the performances on and around Juneteenth even though they were aware of its significance to African-Americans; and statements such as “Here’s your Juneteenth”

were made by managers and the woman in the gorilla suit.[15] After consideration of all of the factors, the court affirmed the denial of CorpCar’s motion for judgment as a matter of law and affirmed a new trial pertaining to the jury’s finding that the Plaintiffs were subjected to a hostile work environment.[16]

Overall, plaintiffs that are offended by workplace jokes are not exceptionally rare. The jokes at question are not only racial ones: courts also prohibit making fun of one’s sex, age, or pregnancy. As an example, using the word “prego” was considered to be inappropriate when referring to employees and the court ordered a trial.[17] On a different note, a prominently displayed workplace sign reading “sexual harassment will be graded on a 1 to 10 basis” proved that the company knew of its hostile workplace and failed to act after receiving complaints.[18] While it is undisputable that humor is good for all of us, some people clearly go over the border in their relations with employees. Rest assured, it is a good thing we have courts to sort out what is offensive and what is acceptable, after all.

[1] Agnes Repplier Quotes, BrainyQuote, (last visited Feb. 3, 2015).

[2] See James Fisher, Racial joke in an email is focus of lawsuit, DelawareOnline (Jan. 25, 2015),

[3] Henry v. CorpCar Servs. Houston, Ltd., No. 13-20744, 2015 WL 327650 (5th Cir. Jan. 27, 2015).

[4] Id. at *1.

[5] Id.

[6] Id at *2.

[7] Id.

[8] Id.

[9] Id.

[10] Id. at *3.

[11] Id. at *4.

[12] Id.

[13] Deborah Hammonds, Hiring performer in gorilla suit for safety meeting on Juneteenth created hostile environment, Wolters Kluwer (Jan. 30, 2015),

[14] Id.

[15] Id.

[16] Henry, 2015 WL 327650 at *9.

[17] It Was Just A Joke, Boardman & Clark LLP, (last visited Feb. 3, 2015).

[18] Id.

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Governor Cuomo’s Minimum Wage Proposal Keeps Many New Yorkers in Poverty

by Dana Dohn

On January 21, 2015, Governor Andrew Cuomo presented his “2015 Opportunity Agenda” during the New York State of the State Address.[1] Included in the sixty-six proposals that Governor Cuomo made during his address were plans to make major tax cuts and raise the minimum wage for both the state and New York City.[2] The current New York state minimum wage is set at $8.75 per hour and will rise to $9 per hour by the end of the year.[3] Governor Cuomo’s proposal, pending approval from the legislature, will raise the state minimum wage to $10.50 per hour and New York City’s minimum wage to $11.50 per hour by the end of 2016.[4]

This new state minimum would surpass Washington’s rate, giving New York the highest statewide minimum wage in the country.[5] During the State of the State Address, Governor Cuomo announced that this change is due to the inability of New Yorkers to support themselves on the current state minimum wage, stating, “[w]e believe if you work full-time you should be able to pay the rent and pay for food and not live in poverty. That’s the basic promise of employment, and we’re not there yet.”[6]

If approved, New York City’s separate minimum wage would be the first time in history that the city minimum differs from the rest of the state.[7] This proposal to set New York City’s minimum wage at a higher rate than the state minimum wage also sharply contrasts with Governor Cuomo’s opinions from just last year.[8] Until this past summer, Governor Cuomo was against the idea of allowing different municipalities throughout the state to have varying minimum wages, stating that it would create chaos and force New York cities to compete with one another.[9]

Although Governor Cuomo’s proposal appears to be a step in the right direction, some see the proposed minimum wage changes as insulting to New York City’s low-wage earners.[10] Bill Lipton, the state director of the Working Families Party that began to change Governor Cuomo’s outlook on varying minimum wages, was disappointed that the plan did not go as far as the $13.13 per hour minimum wage for New York City that was discussed in an earlier proposal that the Governor had supported.[11] This proposal reflects a failure on the Governor’s part to uphold a campaign promise that he made last May that would allow high cost areas, such as New York City, to establish minimum wages that are up to thirty percent higher than the state minimum.[12]

Despite the hike, the current proposal, if approved, would still leave New York City’s minimum wage far lower than the rates already approved in other large cities throughout the country, such as Washington, D.C., Chicago, San Francisco, and Seattle.[13] Unlike these other approved raises, Governor Cuomo’s proposal is not tied to a cost-of-living index, which he promised would occur during his race for reelection.[14] Without a cost-of-living index adjustment or the ability for other high-cost areas, such as Long Island, to adjust the minimum wage, low-wage earners will continually have to battle for small wage increases in order to survive.[15] Although this plan appears promising on its face, it is still greatly disadvantaging New York’s citizens on a national level. This disadvantage defeats the purpose of Governor Cuomo’s plan and will fail to allow full-time working New Yorkers to move up and live outside of poverty.

[1] 2015 Opportunity Agenda, N.Y. State (Jan. 21, 2015),

[2] See id.; Jessica Corso, Cuomo Unveils Vision for NY With Tax, Minimum Wage Plans, Law 360 (Jan. 21, 2015, 5:59 PM),

[3] See Claire Zillman, New York could soon have the highest minimum wage in the U.S., Fortune (Jan. 21, 2015, 4:43 PM),

[4] See id.

[5] See id.

[6] See id.

[7] See Kenneth Lovett, Erin Durkin, Ben Kochman & Stephen Rex Brown, Cuomo: Raise the minimum to $11.50 in New York City, $10.50 in rest of state, N.Y. Daily News (Jan. 18, 2015, 2:48 PM),

[8] See Sam Levine, Andrew Cuomo Will Propose Raising New York Minimum Wage, Huffington Post (Jan. 18, 2015, 4:22 PM),

[9] See id.

[10] See, e.g., id.; Juan Gonzalez, Gonzalez: Andrew Cuomo’s minimum wage hike is an insult to low-pay workers, N.Y. Daily News (Jan. 20, 2015, 10:39 PM),

[11] See Levine, supra note 8.

[12] See Gonzalez, supra note 10.

[13] See id.

[14] See id.

[15] See id.

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Laissez les Bons Temps Rouler…Hopefully

by Peter Link

It is that time of year again. No, spring it not around the corner, and soon the radios and televisions will die out of Super Bowl talk. This time of year is Carnival season. Flights and hotels have been booked, and one of the biggest parties of the year is soon to start. In 2011 an estimated 1.2 million peopled were in The Big Easy to get a taste of Mardi Gras.[1] Millions of dollars are made by the city of New Orleans and hotel room prices increase nearly 151%.[2] Economic booms aside, the most important thing that has made Mardi Gras what it is today is the tradition.

The name Mardi Gras has a literal meaning of “Fat Tuesday.”[3] The idea behind the event is for people to have one “last hurrah” before lent begins.[4] The event itself has various traditions, such as wearing masks, having king cake, and lighting flambeaux.[5] However, one of the most important traditions is the throwing of beads. The original colors of the beads were green for faith, gold for power, and purple for justice.[6] The idea was to throw the beads to someone who represented those colors best.[7] Today, the beads come in all shapes and colors.[8] However, Mardi Gras 2015 may be a little bit different. A current labor dispute on the west coast could potentially delay the shipment of thousands of beads to New Orleans.[9]

Much time is spent in preparing and designing Mardi Gras beads.[10] The problem this year is that they are apparently sitting in containers in west coast ports.[11] The current labor dispute on the west coast is between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA).[12] The dispute covers twenty-nine west coast ports, most notably: Long Beach, Oakland, Portland, Seattle, and Tacoma.[13] The two parties have a vibrant recent history of labor disputes. In 2002 the PMA had a ten-day lockout of ILWU workers, forcing President George W. Bush to invoke the Taft-Hartley Act.[14] The President’s actions put the ports back into operation until both sides came to a new agreement.[15] In 2008, negotiations between the two parties leaked past the contractual deadline.[16] While this time no lockout occurred, there were reported slowdowns in work until agreements were made.[17] These past acts give a decent forecast into what may be on the horizon.

The current six-year contract between the ILWU and the PMA is set to expire on June 30, 2015.[18] While strikes are barred in the current contract, the ILWU has taken the route of work slowdowns.[19] The effects have been felt all over the United States, both good and bad. Negative factors include shippers having to accelerate shipments and bring them to different ports in Canada and the United States east coast.[20] This results in holiday shipment delays,[21] like Mardi Gras beads sitting on the west coast as the big day slowly approaches.[22] On the plus side, east coast ports have seen more growth because of the labor dispute.[23] Either way, the ILWU has been able to flex its muscles and place pressure on the PMA. My only hope is that the strength of the ILWU’s muscle does not throw the beads out of the Mardi Gras tradition.

[EDITOR’S NOTE: This year, Mardi Gras will take place on Tuesday, February 17, 2015. If you choose to party, please do so responsibly!]

[1] Margaret Rhodes, Mardi Gras Mambo, Fast Company (Mar. 8, 2011, 5:00 AM),

[2] Id.

[3] Catholic Roots of Mardi Gras, American Catholic, (last visited Jan. 30, 2015).

[4] Id.

[5] Philip Ross, Mardi Gras History and Facts: The Real Meaning Behind These 5 ‘Fat Tuesday’ Traditions, International Business Times (Mar. 2, 2014, 7:26 AM),

[6] Id.

[7] Id.

[8] History of Mardi Gras Beads, Punchbowl, (last visited Jan. 31, 2015).

[9] Labor Dispute Halts Mardi Gras Bead Shipments, WWLTV (Jan. 23, 2015, 6:43 PM),

[10] Id.

[11] Id.

[12] US West Coast Labor Negotiations: Frequently Asked Questions, Journal of Commerce, (last visited Jan. 30, 2015).

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id.

[18] Id.

[19] Journal of Commerce, supra note 12.

[20] Id.

[21] Port Dispute Causes Holiday Shipment Delays, Elementum (Dec. 23, 2014, 1:00 PM),

[22] WWLTV, supra note 9.

[23] The Associated Press, Georgia Ports Seeing Growth From West Coast Labor Problems, Access North GA (Jan. 26, 2015, 11:24 AM),

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Employees Make Overtime; Executives Make Sandwiches

by Kyle Barton

Earlier this month, the restaurant chain Jimmy John’s was sued for misclassifying its assistant managers as “executives” under the Fair Labor Standards Act (FLSA), relieving itself of having to pay overtime to these employees.[1] The story of these assistant managers is nearly identical to those who sued Chipotle for the same reasons in 2013.[2] The defendant companies in these cases failed to pay overtime where it was deserved, in reliance on the exemption from paying overtime to certain classes of employees, including “bona fide executives.”[3] However, the FLSA’s definition of executives, as expected, involves job duties far more involved than regular blue collar workers. In order to elevate one’s status from a “blue collar worker” to an “executive,” an employee must have the primary duty of management,[4] which includes regularly directing the work of two or more other employees[5] and having the power to hire and fire other employees.[6] The regulation further specifies which employees are not exempt from overtime compensation. A worker whose primary duties are manual labor, involving repetitive tasks with one’s hands while using physical skill and energy, cannot be considered an executive under the Act, despite other factors present.[7] An employer cannot simply shift an employee’s classification by altering his job title to sound like an executive.[8]

The plaintiffs in these cases primarily spent their time in the same ways as typical employees: working the line, preparing food, providing customer service, and operating the cash register, which are duties not exempt under FLSA.[9] The assistant managers also claim that their duties never included hiring, firing, or disciplining employees, as would be routine for supervisors.[10] While it may seem clear that these plaintiffs could not possibly be qualified under the law as executives, the defendant corporations may be able to claim that these blue-collar duties were performed concurrently with supervisory duties. According to an example supplied by the Code of Federal Relations, an assistant manager can serve customers, cook food, and clean while simultaneously be supervising or directing employees.[11] This situation would render the manager exempt from overtime requirements.

The penalty for employers failing to properly classify their workers can be harsh. The FLSA allows victimized employees to sue for double the amount owed in unpaid wages,[12] plus the value of reasonable attorney fees.[13] Although the plaintiffs in the cases here are not seeking punitive damages, the employers could be subject to hefty civil penalties amounting to $11,000 for each employee whose job title was misclassified.[14] It is highly common in these employment suits for large numbers of plaintiffs to come together and file a class action suit. The amount of money at stake for the employer, therefore, can reach astronomical figures. It is becoming increasingly important for employers to closely evaluate the classification assigned to employees and, perhaps in some cases, to safely err on the side of the classification that grants the employee more rights and wages.

[1] Eric Snider, Suit Filed in Jacksonville Against Jimmy John’s, Alleging Unfair Labor Practices, Am. City Bus. Journals (Jan. 6, 2015, 3:04 PM),

[2] Fitapelli & Schaffer, LLP, About the Chipotle Lawsuit, Chipotle Class Action Lawsuit, (last visited Jan. 24, 2015).

[3] 29 U.S.C. § 213(a)(1) (2006).

[4] 29 C.F.R. § 541.100(a)(2) (2004).

[5] 29 C.F.R. § 541.100(a)(3) (2004).

[6] 29 C.F.R. § 541.100(a)(4) (2004).

[7] 29 C.F.R. § 541.3(a) (2004).

[8] 29 C.F.R. § 541.2 (2004).

[9] First Amended Class Action Complaint at 94-96, Scott v. Chipotle Mexican Grill, Inc., No. 1:12-cv-08333 (S.D.N.Y. filed Feb. 13, 2013).

[10] Id. at 97.

[11] 29 C.F.R. § 541.106(b) (2004).

[12] 29 U.S.C. § 216(b) (2012).

[13] Id.

[14] 29 U.S.C. § 216(e) (2012).

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