Category: News

Jennifer Myers Chalal has been named as one of the Pennsylvania & Delaware Super Lawyers Top 50 Women of 2020. Ms. Chalal is an attorney in Spector Gadon Rosen Vinci’s Employment Law Group. She concentrates her practice in the area of employment law handling all types of employment law matters including discrimination claims under Title VII, the ADA, the ADEA, the PHRA, and the NJ Law Against Discrimination, retaliation claims, wrongful discharge claims, wage and hour claims, FMLA claims, ERISA claims, breach of contract claims, non-compete claims, and claims involving workplace torts. She also handles ADA accessibility suits and denials of public accommodations for businesses especially in the hospitality industry.  She provides advice to businesses regarding employment matters, conducts workplace investigations for businesses presented with complaints of sexual harassment or other forms of discrimination, prepares employment handbooks, and provides workplace seminars regarding discrimination laws. Her litigation practice extends throughout Pennsylvania and New Jersey in both Federal and State Court.

Ms. Chalal received a J.D. with honors from Temple University School of Law. She is a Phi Beta Kappa graduate from Hofstra University where she received a B.A. degree (magna cum laude) with High Honors in Speech Communication. Following graduation from Temple University School of Law, she served as a Judicial Law Clerk for the Honorable Sandra Mazer Moss of the Court of Common Pleas of Philadelphia County. Ms. Chalal is a member of the Philadelphia Bar Association, Philadelphia Trial Lawyers Association, Pennsylvania Trial Lawyers Association and the Temple American Inn of Courts. She also was an Executive Committee Member of the Young Lawyers Division of the Philadelphia Bar Association.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com.

Spector Gadon Rosen Vinci LLP has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters.  The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

The firm represents businesses, corporate boards, and highly placed individuals.  Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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A small business with under fifty (50) employees may be entitled to an exemption from the requirement under the Family First Coronavirus Response Act (“FFCRA”) that employees with under five hundred (500) employees provide (1) Extended Family Leave to eligible employees or (2) Emergency Paid Sick Leave when the leave is requested by an employee to care for a child due to school or child care closures or childcare unavailability as a result COVID related reasons. There can be NO exemption from providing Emergency Paid Sick Leave if the leave is requested for any of the other 5 delineated reasons that qualify an employee to take paid sick leave under the FFCRA. In other words, the exemption can only be taken with regard to providing: (1) Extended Family Leave due to school or child care closures or childcare unavailability as a result of COVID related reasons or (2) Emergency Paid Sick Leave as result of need to care for child due to school or child care closures or childcare unavailability as a result COVID related reasons.

To qualify for the exemption, an officer of the business must make a determination on a case by case basis to see if there are grounds for the exemption and then document the reason for the exemption if it denies the request on that basis. The Small Business Exemption is not a blanket exemption and each request should be separately evaluated.  An employer is not required to send a letter to the DOL requesting an exemption.

In assessing whether an exemption applies to a particular situation, an authorized officer of the business would need to determine that providing the requested leave to the requesting employee would jeopardize the viability of the business based on one (or more) of the following three reasons:

  1. Providing the requested leave would result in the expenses and financial obligations of the business exceeding available business revenues and cause the small business to cease operating a minimal capacity (i.e.: business can’t afford to pay for the covered leave);

 

  1. The absence of the employee requesting the leave would entail a substantial risk to the financial health or operational capabilities of the small business because of the employee’s specialized knowledge of the business, skills or responsibilities  (i.e.: the employee requesting leave is one of the only that performs a specialized job function); and/or

 

  1. There are not sufficient workers who are able, willing and qualified and who will be available at the time and place needed, to perform the labor or services provided by the employee requesting the paid leave and these services or labor are needed for the small business to operate at minimal capacity (i.e.: the employer will not be able to operate if the employee is on leave)

 

The reason for claiming the exemption and not granting the leave should be set forth in writing by an authorized officer of the employer and maintained in the employee’s file for four (4) years.  Likewise, if leave is granted, there should be documentation of the reason for the leave and maintained for (4) years.

If you have any questions regarding the foregoing, please contact Jennifer Chalal at jchalal@sgrvlaw.com.

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To most businesses that engage in the negotiation and performance of contracts, life should be simple.  When parties engage in preliminary negotiations, they are not bound by formal obligations until a final agreement is signed, but after a final contract is signed, all parties are bound by the agreements’ terms going forward.

But life is not always so cut-and-dried.  Often, after negotiations break down, one party will claim enforceable obligations arose from negotiations; just as often, after a contract is signed, one party will attempt to “get out from under” contractual provisions, or change the obligations in the contract to those more favorable.

For example, because generally all that is required for contract formation is a “meeting of the minds,” negotiating parties sometimes argue that enforceable obligations arose from mere negotiations, because they agreed on relevant provisions despite the lack of a signed contract.  Other times, a negotiating party will allege that because it relied upon, and took action based upon, representations or a course of performance, an enforceable “quasi-contractual” obligation arose despite the lack of a formal contract.  Further, even if negotiations have concluded, one party may still allege that the other has a “good faith” duty to continue negotiations to consummate an agreement.

After a contract is executed, parties sometimes assert contractual provisions were changed or modified to their benefit.  For example, one party may contend that the failure of the other to enforce certain provisions gives rise to a waiver, preventing later enforcement of those provisions.  Likewise, one can assert that a course of performance is conclusive evidence of the understanding of the parties, even if the signed agreement contains contrary language. In addition, under a theory of fraud in the inducement or justifiable reliance, a party may argue that pre-contractual representations and promises are enforceable, even though they were not contained in the final agreement.

So can a business take steps to prevent it from being bound to pre-contractual discussions, and ensure that the obligations in an agreement will not be subject to change after it is signed?  The answer is that a business should always take care to define and limit the scope of pre-contractual negotiations, and have specific provisions in business agreements precluding post-contractual attempts to deviate from contractual terms.

As to pre-contractual negotiations, Pennsylvania courts enforce pre-contractual provisions that no contract will exist unless there is an offer and acceptance in a specific “mode and manner,” and that no contract can arise until one or both parties have made a “further manifestation of assent.”  Practically speaking, this permits parties to execute a term sheet or pre-contractual description of deal points, while preventing the formation of a valid and enforceable agreement until some specified future event (such as the execution by a specific person of a definitive written agreement) occurs. For example, in  GMH Associates, Inc. v. Prudential Realty Group, 752 A.2d 889, 901 (Pa.Super. 2000), the court found that no enforceable obligation, including a duty to negotiate in good faith, could arise where a term sheet between negotiating parties contained the following provisions:

NOTWITHSTANDING THAT EITHER OR BOTH PARTIES MAY EXPEND SUBSTANTIAL EFFORTS AND SUMS IN ANTICIPATION OF ENTERING A CONTRACT, THE PARTIES ACKNOWLEDGE THAT IN NO EVENT WILL THIS LETTER BE CONSTRUED AS AN ENFORCEABLE CONTRACT …  AND EACH PARTY ACCEPTS THE RISK THAT NO SUCH CONTRACT WILL BE EXECUTED.

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Any Contract which may be negotiated shall not be binding … until it has been approved by the senior corporate officers and the Law Department of Seller … Such approvals are conditions precedent to the Seller’s obligation to perform … and may be withheld for any reason or for no reason.

To provide even greater protection, other “belt and suspenders” disclaimers can be used, such as a provision that no duty or obligation to negotiate in good faith or to continue negotiations can arise, and “no reliance” and “no course of dealing” provisions, which are discussed below.

Once a written agreement is signed, Pennsylvania courts enforce various contractual provisions precluding the parties from contending after a contract is signed that it is not enforceable as written.  For example, Pennsylvania courts generally enforce “anti-waiver” provisions to prevent the parties from later asserting that contractual provisions have been waived.  Generally, an “anti-waiver” provision will state:

Failure of [the parties] to demand strict compliance with any of the terms, covenants or conditions of this Agreement shall not be deemed a waiver … nor shall any waiver or relinquishment by the [parties] of any right or power hereunder at any one time or more times be deemed a waiver or relinquishment of such right or power at any other time.

Similarly, to preclude a later argument that the parties agreed to an “oral modification” of a contract, Pennsylvania courts generally enforce “no oral modification” provisions, which state generally “this Agreement may only be amended by written agreement signed by both parties hereto or by their duly authorized representative,” or “no agent, representative, employee or officer of [the company] has or had authority to make or has made any statement, agreement or representation, either oral or written, modifying adding or changing the terms and conditions herein set forth.”   To protect against an argument that the parties’ course of performance created a change to a contract, the following provision can be utilized:  “No present or past dealings or custom between the parties shall be permitted to contradict or modify the terms hereof.”

To protect against an argument that pre-contractual representations not included in the final contract induced one party to sign the agreement, Pennsylvania courts generally enforce “integration” clauses, such as “this agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous drafts, agreements, arrangements and understandings between them, whether written or oral, relating to this subject matter.”  Under most circumstances, such clauses will prevent parties from claiming fraudulent inducement to contract based on statements not included in a signed agreement.  Additionally, Pennsylvania courts will generally enforce “no reliance” provisions to preclude fraud and quasi-contract claims arising from the negotiations and performance of a contract.  This is a sample “no-reliance clause:

[Company A] acknowledges and agrees that [Company B] has not made any representations or warranties to [Company A] except as expressly set forth in the [Written Agreement] and, in making its decision to enter into the [contract], [Company A] is not relying on any representation, warranty, covenant or promise of [Company B] other than as set forth in the [Written Agreement].  Neither party shall rely upon or be bound by any statements (written or oral) different from those in this [Written Agreement] that may appear subsequently in communications between the parties.

Use of these provisions during business negotiations and performance of business agreements can ensure certainty as to contractual obligations, and prevent unexpected contractual liability.

Andrew J. DeFalco is a trial and appellate lawyer and a Member of Spector Gadon Rosen Vinci, P.C.  He represents and advises companies and individuals in complex business disputes.  His e-mail is adefalco@lawsgr.com, and you can connect with and follow him on LinkedIn at www.linkedin.com/in/andrew-defalco-6b63275/.

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As businesses begin to reopen, business owners face numerous challenges regarding the safety of their employees and their customers and clients. There are several steps that can minimize these risks and help protect the business from claims made by employees or customers.

Health Screening for Employees

            It is permissible, and advisable, to do a certain amount of screening of employees returning to the workplace. Employers may take employee temperatures and may ask questions regarding whether or not they have been exposed to COVID-19, are suffering from any symptoms associated with COVID-19, or have recently traveled outside the area to a COVID-19 “hotspot.” Employers should refrain from asking about any other medical condition unless the employee indicates that they have a medical condition that makes them more at-risk for contracting COVID-19.

Safety Protocols

            All employers should put into place safety protocols that help to promote social distancing and enhanced sanitation. These protocols can include staggering work schedules, separating work stations either by distance or by providing physical barriers, limiting gatherings and meetings, limiting outside visitors to the workplace, requiring that face masks be worn in common areas, and providing enhanced cleaning and hand sanitizing products. Employee contacts should also be tracked in case an employee is exposed to or is diagnosed with COVID-19.

Employees Hesitant to Return to Work

            Employees recalled to work may express an unwillingness to return to the workplace. If an employee has a health condition that makes them particularly susceptible to contracting COVID-19 you may be required to extend a “reasonable accommodation,” which could include permission to work from home or an unpaid leave. A request of this type should be handled like any other request for a reasonable accommodation and a medical certification from the employee’s doctor may be required.
         If an employee is simply afraid to come back to work or does not want to come back because they are being paid more in unemployment compensation than they would earn working, an employer may insist that the employee return to work and, if the employee does not, treat the separation as a voluntary resignation. Any refusal to return to work, particularly if it is because the employee does not want to return because they are making more in unemployment compensation, should be reported to the Unemployment Compensation Bureau.

Customer/Client Waivers

            Employers who serve the general public may want to consider having customers or clients sign a liability waiver. In any event, customers/clients should be asked the same health screening questions posed to employees and should be required to wear face masks.
            If you have any questions or need assistance drafting return-to-work policies or waivers, please contact Nancy Abrams at 215 241-8894 or nabrams@sgrvlaw.com.
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The U.S. District Court for the Eastern District of Pennsylvania has granted summary judgment on all claims brought by a male Deputy Commissioner of the Philadelphia Department of Prisons against the City of Philadelphia – which was represented by Spector Gadon Rosen Vinci P.C. – exonerating the Mayor from claims that his administration made appointments on the basis of race and gender.

Employment Law Group Chair Alan B. Epstein and Employment Law Group Member Jennifer Myers Chalal represented the City since the inception of the claim in 2017.  The order was issued by Hon. Jan E. DuBois on May 14.

Plaintiff Robert Tomaszewski’s claim was based upon his non-selection as Commissioner by Mayor James Kenney in 2016 on the alleged basis of his race and gender and retaliation after he filed with the EEOC and a lawsuit in 2017.

Epstein and Chalal achieved a satisfactory result in a lawsuit that involved depositions of Mayor Kenney (via written interrogatories), the Managing Director, the current head of the Department of Prisons , and several highly placed individuals in the Kenney administration.

Spector Gadon Rosen Vinci LLP has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters.  The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

The firm represents businesses, corporate boards, and highly placed individuals.  Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. Member Leslie Beth Baskin, Chair of the firm’s Bankruptcy and Creditors Rights Group, has been named Co-Chair of the Greater Philadelphia Chapter of the International Women’s Insolvency and Restructuring Confederation (IWIRC). Baskin is also one of the founding members of the Greater Philadelphia Chapter.

The IWIRC is a non-profit organization dedicated to elevating the professional status of women in the fields of insolvency and restructuring since its incorporation in 1994. IWIRC boasts a membership of over 1,500 women in various fields of insolvency and restructuring practice. The organization provides a professional community that practitioners from various backgrounds can join to enhance their personal and professional development.

With more than 35 years of experience, Baskin represents creditors and debtors in non-bankruptcy work-outs and in commercial bankruptcy proceedings including Chapter 11 reorganizations. She has handled a wide array of commercial, transactional and bankruptcy-related matters including several high-profile cases in the region.  She has also represented high-profile real estate enterprises in Chapter 11 reorganizations, and has been involved in many aspects of healthcare reorganizations, in and out of bankruptcy proceedings. She also has served as Chapter 11 Trustee in a high profile case involving fraud and universal violations

Baskin currently serves on the Executive Committee and Board of Directors of the Consumer Bankruptcy Assistance Project (CBAP) and was its Chair for two years. She received CBAP’s Award for Outstanding Volunteer in 2005.  Founded in 1992, CBAP assists low-income qualified individuals and families in the Delaware Valley with their Chapter 7 bankruptcies.

Baskin is a past Chair of the Eastern District of Pennsylvania Bankruptcy Conference (EDPABC), a nonprofit organization that promotes the education and interests of lawyers, other professionals and paraprofessionals who work in bankruptcy and creditors’ rights law in the Eastern District of Pennsylvania.

Baskin has been elected by her peers as a Pennsylvania Super Lawyer for numerous years.

Baskin received the prestigious David T. Sykes Award from the Eastern District of Pennsylvania Bankruptcy Conference and the Consumer Bankruptcy Assistance Project in 2019.

Spector Gadon Rosen Vinci LLP has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters.  The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

The firm represents businesses, corporate boards, and highly placed individuals.  Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Ten attorneys from Spector Gadon Rosen Vinci P.C. have been selected to the prestigious 2020 Pennsylvania Super Lawyers list. No more than five percent of the lawyers in Pennsylvania are selected by Super Lawyers.

The recipients are Chairman Paul R. Rosen; Shareholder and Director George M. Vinci Jr.; Managing Member Daniel J. Dugan; Employment Law Group Chair Alan B. Epstein; Estates & Trusts Group Chair Alan J. Mittleman; Bankruptcy and Creditors Rights Group Chair Leslie Beth Baskin; Corporate Law Group Member Stanley P. Jaskiewicz; Employment Law Group Member Jennifer Meyers Chalal; Commercial Litigation, Health Care Law & Litigation and Insurance Coverage & Casualty Litigation Group Member Matthew R. Shindell; and Senior Litigation Counsel Bruce Bellingham.

Super Lawyers, part of Thomson Reuters, is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high degree of peer recognition and professional achievement. The annual selections are made using a patented multiphase process that includes a statewide survey of lawyers, an independent research evaluation of candidates and peer reviews by practice area. The result is a credible, comprehensive and diverse listing of exceptional attorneys.

The Super Lawyers lists are published nationwide in Super Lawyers Magazines and in leading city and regional magazines and newspapers across the country. Super Lawyers Magazines also feature editorial profiles of attorneys who embody excellence in their practice of law. For more information about Super Lawyers, go to SuperLawyers.com.

Spector Gadon Rosen Vinci LLP has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters.  The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

The firm represents businesses, corporate boards, and highly placed individuals.  Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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Spector Gadon Rosen Vinci P.C. Chairman Paul R. Rosen has been selected as a 2020 Lifetime Achievement Award winner by The Legal Intelligencer, the oldest law journal in the United States, as part of its annual Professional Excellence Awards. The Intelligencer’s panel selected Rosen as part of a group of only 10 winners across the Pennsylvania legal community in the category of Lifetime Achievement.

The Lifetime Achievement Award recognizes attorneys from all corners of the legal profession and the state, including jurists and office holders, who have left an imprint on the legal history of the state during their career.

The event celebrates achievement and excellence by honoring those lawyers who have left an indelible mark on the legal community in Pennsylvania and beyond through their unwavering dedication to the profession.

Rosen attracted national attention for his successful representation of Larry King, Bruce Marks in the Marks v. Stinson voting fraud case, and the Commissioners of Lower Merion Township in the Barnes Foundation v. Township of Lower Merion, a civil rights action.  He has recently been the subject of national attention for his representation of Alycia Lane in her invasion of privacy litigation against CBS and claims of criminal unauthorized access to her private computer system involving CBS Co-Anchor, Lawrence Mendte. Rosen has consistently been selected by Philadelphia Magazine as being one of the best in commercial litigation.  He was also named by the American Trial Lawyers Association as one of the top 100 trial lawyers for the state of Pennsylvania, and by Law Dragon as one of the 500 leading plaintiffs’ lawyers in America.

Mr. Rosen has been named to the Super Lawyers® list each year since 2004. He was selected as a 2019 “Influencer of Law” by The Philadelphia Inquirer, an honor recognizing an elite number of trailblazing attorneys on how they have shaped, changed and transformed the legal industry, as well as their professional accomplishments and community involvement.

Rosen and other Professional Excellence Award winners will be recognized in special editorial sections of The Legal Intelligencer and at an awards dinner set for September 9 at the Crystal Tea Room in Philadelphia.

Spector Gadon Rosen Vinci LLP has represented clients nationally and internationally for 45 years and provides counsel and expertise across the entire spectrum of legal practice, from complex litigation to sophisticated transactional and corporate matters.  The firm has offices in Philadelphia, New Jersey, Florida, New York and Atlanta.

The firm represents businesses, corporate boards, and highly placed individuals.  Its clients are engaged in a variety of industries including finance and banking, manufacturing, hospitality, gaming and entertainment, real estate and commercial development, insurance and venture capital, energy, financial services, health care, security and telecommunications.

The firm’s practice areas include high stakes litigation, business disputes, commercial litigation, professional liability, products liability, securities, trust and estates, fiduciary litigation, bankruptcy and creditors rights, civil RICO, trade secrets, trademark and restrictive covenants, intellectual property, antitrust, white-collar criminal defense, banking and financial services, corporate formation and governance, cyber risk and security, employment, entertainment and amusements, environment and energy, wealth management, healthcare, hospitality, insurance coverage and insured casualty litigation, mergers, acquisitions and divestitures, real estate, sports and tax law.

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In the past week, the U.S. Department of Labor (DOL) has issued new final rules that provide greater flexibility to retail industry employers that want to claim an overtime exemption for employees who receive at least half of their compensation through commissions, and that permit employer’s to use a “fluctuating work week” method of payment even if it pays employees periodic bonuses or similar payments, including commissions, premium pay or hazard pay, in addition to a set weekly salary.

Rule Regarding “Retail Concept”

Provisions in the Fair Labor Standards Act (FLSA) allow employers in retail and service industries to treat employees paid primarily on a commission basis as exempt from overtime. In 1961, the DOL introduced as an interpretive rule, a lengthy but non-exhaustive list of 89 types of establishments that it viewed as lacking a “retail concept” that, therefore, could not claim the exemption for commissioned employees. In the same interpretive rule, it also included a separate non-exhaustive list of 77 types of establishments that “may be recognized as retail.” In 1970, the DOL added another 45 establishments that it viewed as lacking a “retail concept.” The list of establishments that lack a “retail concept” included businesses in various industries such as dry cleaners, tax preparers, laundries, roofing companies, travel agencies, blue printing and photostating establishments, stamp and coupon redemption stores, and telegraph companies. The “may be” retail list included establishment in industries such as coal yards, fur repair and storage shops, household refrigerator service and repair shops, masseur establishments, piano tuning establishments, reducing establishments, scalp-treatment establishments, and taxidermists.

On May 19, 2020, the DOL withdrew both lists. Going forward, the DOL will apply the same analysis to all establishments to determine whether they have a retail concept and qualify as retail or service establishments (if they sell goods or services to the general public and if they serve the everyday needs of the community in which they are located), permitting establishments in industries that had been on the non-retail list to assert that they do, in fact, have a retail concept and, if they meet the existing definition of retail and other criteria, to qualify for the exemption. The added flexibility will permit industries that had been on the “no retail concept” list to consider whether a commission-based pay arrangement is appropriate for its employees. The DOL believes that a more flexible, fact-based analysis is better suited to account for newly developed industries as well as developments in industries over time regarding whether companies are retail or not.

Fluctuating Workweek

On May 20, 2020, the DOL announced a final rule that will give employers greater flexibility to use the fluctuating workweek method of calculating overtime pay for salaried, nonexempt workers whose hours vary from week to week. The fluctuating workweek method is an alternative to the Fair Labor Standards Act’s regular method of calculating overtime pay, under which employees are paid an hourly wage and receive 1.5 times their regular rate of pay for overtime hours. To use the fluctuating workweek method, employees’ hours actually have to change week to week, and employees must receive a fixed salary even when they work less than their regularly scheduled hours. Additionally, there must be a clear understanding between the business and employees about how workers are paid. With this method, an employee who is entitled to overtime pay receives a fixed weekly salary, which is divided by the number of hours the employee actually worked in the week to determine the week’s base hourly rate. The employee will then receive an additional 0.5 times their base rate for each hour worked beyond 40 in the workweek.

Prior to the new rule, employers generally could not use the fluctuating workweek method to calculate overtime pay for employees who receive pay such as bonuses and other incentive-based pay in addition to the guaranteed salary. Under the amended Rule, employers can pay bonuses, premium payments or other additional pay, such as commissions and hazard pay, to employees without jeopardizing their ability to use the fluctuating workweek method of compensation. Employers must keep in mind, however, that any compensation that is paid in addition to the fixed salary under the fluctuating workweek method will still have to be included in the regular rate of pay for overtime calculations.

It is also important to check state law before utilizing a fluctuating workweek method. Some states, such as Alaska, California, New Mexico and Pennsylvania, do not allow employers to use the fluctuating workweek method at all, and other states have not addressed its use.

If you have any questions, please contact Nancy Abrams at nabrams@sgrvlaw.com or (215) 241-8894.

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