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Carolyn Rashby provides business-focused advice and counsel to companies navigating the constantly evolving and overlapping maze of federal, state, and local employment requirements. She conducts workplace investigations and cultural assessments, leads audits regarding employee classification, wage and hour, and I-9 compliance, advises on employment issues arising in corporate transactions, and provides strategic counsel to clients on a wide range of workplace matters, including harassment and #MeToo issues, wage and hour, worker classification, employee accommodations, termination decisions, employment agreements, trade secrets, restrictive covenants, employee handbooks, and personnel policies. Her approach is preventive, while recognizing the need to set clients up for the best possible defense should disputes arise.

A New York federal district court judge has struck down significant portions of the U.S. Department of Labor’s (“DOL”) joint employer rule, which went into effect earlier this year.  As a result of this ruling, certain companies may be more likely to be deemed joint employers and exposed to liability for wage and hour violations under the Fair Labor Standards Act (“FLSA”).

As we described here, in March 2020, a final rule issued by DOL went into effect implementing a four-factor test for determining whether more than one entity may be considered an individual’s employer under the FLSA.  The new test shifted the existing rule’s focus on the “economic realities” of the alleged employer/employee relationship to a narrower inquiry regarding whether the alleged employer actually exercised control over the alleged employment relationship.

The District Court for the Southern District of New York has now held that DOL’s final joint employer rule violated the Administrative Procedures Act for two reasons.  First, the court found that the rule contradicted the text of the FLSA because it ignored relevant concepts defined in the statute, such as the definitions of “employ” and “employee,” and that DOL had erroneously applied different standards for “primary” and “joint” employment when no such distinction exists in the FLSA itself.  Second, the court found that DOL’s reasoning for the rule change was arbitrary, capricious, and not supported by adequate evidence.


Continue Reading Federal District Court Strikes Down DOL Joint Employer Rule

In an important civil rights development, the U.S. Supreme Court today issued a 6-3 opinion in Bostock v. Clayton County, Georgia, holding that gay and transgender employees are protected under the prohibition against workplace sex discrimination in Title VII of the Civil Rights Act of 1964 (“Title VII”).  Justice Gorsuch delivered the majority opinion, joined by Justices Roberts, Ginsberg, Breyer, Sotomayor, and Kagan.  Dissenting opinions were filed by Justices Alito (joined by Thomas) and Kavanaugh.

Continue Reading U.S. Supreme Court Holds Title VII Prohibits Discrimination Based on Sexual Orientation and Gender Identity

As the COVID-19 public health crisis continues, businesses are dealing with unprecedented disruptions to operations and workforce stability. Most employers undoubtedly want to assist their employees during this uncertain time, but they are struggling to balance the cost of maintaining their workforce with shrinking profits. The frequent result of such a balancing act is a mass layoff. While such a reduction in workforce may be inevitable, below are options that employers can consider to try to avoid that outcome. For all of these alternatives, employers should be careful to apply any changes consistently across the workforce to avoid claims of inequity or discrimination.

Continue Reading Ten Ways to Avoid Layoffs During the COVID-19 Pandemic

In a positive development for businesses, the National Labor Relations Board (NLRB) has published a final rule setting a new, stricter standard for determining joint employer status under the National Labor Relations Act (NLRA). The new rule, which takes effect on April 27, 2020, comes on the heels of a recent rule published by the Department of Labor narrowing the scope of joint employment under the Fair Labor Standards Act.

The new NLRB rule specifies that a business will be deemed a joint employer of another entity’s employees only if the business has “substantial direct and immediate control” over one or more essential terms of employment. Essential terms of employment are wages, benefits, hours of work, hiring, discharge, discipline, supervision, and direction.


Continue Reading NLRB Issues Final “Joint-Employer” Rule

The U.S. Department of Labor (“DOL”) has published a final rule, which takes effect on March 16, 2020, outlining the new four-factor approach DOL will use to determine whether, under the Fair Labor Standards Act (“FLSA”), a business is a “joint employer” of another company’s employees and thus jointly and severally liable for wage and hour obligations.  The new rule comes as good news for employers because it establishes a concrete and narrow standard for determining joint employer status and is expected to provide clearer guidance to federal courts making joint employer determinations.

The final rule represents the first time in 60 years that DOL has issued a joint employer rule, although over the decades it has issued guidance both expanding and contracting the scope of the definition and potential liability.  Furthermore, the rule is consistent with a series of actions that DOL, under the Trump administration, has taken to rescind the previously broader definition of “joint employer” under the Obama administration (including its June 7, 2017 withdrawal of employee-friendly Administrator’s Interpretation guidance documents from 2015 and 2016).


Continue Reading DOL Issues Final “Joint Employer” Rule

Recently enacted California Assembly Bill 5 (“AB-5”) is a game changer for businesses that use independent contractors in California — and a warning shot for employers nationwide.  Subject to exemptions for certain occupations and professions, AB-5 imposes a strict “ABC” test that appears to put a thumb on the scale of classifying workers as employees rather than independent contractors.

The ABC test was adopted last year by the California Supreme Court in its Dynamex decision to determine classification of workers for purposes of the state’s Industrial Welfare Commission Wage Orders.  For 20 years before Dynamex, worker classification was governed by the more relaxed “Borello” multi-factor test, which focuses on the hirer’s right to control an individual’s work and other secondary factors.  AB-5 now makes the ABC test the default standard for determining worker classification — not just under the Wage Orders, but also for all California Labor Code, unemployment insurance, and workers’ compensation claims.

As a result of the passage of AB-5, companies that hire consultants or contractors based in California should take a hard look at those relationships and determine whether they need to reclassify any such individuals as employees.  For other companies, this legislation should be monitored as the potential tip of an iceberg of a trend in many states, and potentially nationwide, toward imposing additional hurdles in classifying workers as independent contractors.


Continue Reading Hiring Employees vs. Independent Contractors: Navigating Classification Issues in a Drastically Altered California Legislative Landscape

The U.S. Department of Labor (DOL) has announced a final rule that will increase access to overtime pay under the Fair Labor Standards Act (FLSA) for approximately 1.3 million workers.  The final rule, which comes six months after DOL published a proposed rule in March, is the latest development in a years-long process by DOL, spanning the Obama Administration and the Trump Administration, to modify FLSA overtime regulations.  The new rule takes effect on January 1, 2020, giving employers just a narrow window to assess the rule’s impact on their operations.  The final rule is available here.  DOL has also published a fact sheet that provides an overview of the final rule, available here.

Continue Reading DOL Publishes Final Rule Expanding Overtime Protections

Bolstering the state’s reputation for progressive employment legislation, California has become the first state to ban discrimination based on natural hair and protective hairstyles.  On July 3, 2019, California Governor Gavin Newsom signed into law SB 188, which amends the California Fair Employment and Housing Act (FEHA), specifying that “hair discrimination targeting hairstyles associated

On April 29, 2019, the U.S. Department of Labor’s (DOL) Wage and Hour Division issued an opinion letter finding that “virtual marketplace company” workers (of an unnamed business) were independent contractors rather than employees.  While not binding, the opinion signals that DOL is taking a less aggressive approach than in recent years to the hot-button issue of worker classification in the online “gig economy.”  Companies with similar business models that link workers with consumers through technology platforms or “virtual marketplaces” — such as for transportation, delivery, moving, cleaning and household services — may be able to rely on the new opinion to establish a good-faith defense under the Fair Labor Standards Act (FLSA) of their classification of workers as independent contractors.

Continue Reading DOL Labels Gig Economy Company’s Workers as Independent Contractors