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As we enter the holiday season, we would like to begin by expressing our sincere gratitude to our clients, current and former, who have allowed us to serve the community since 1993.  We are fortunate to be able to provide high-quality legal representation to such wonderful individuals.  Turning to this blog post, in light of the holidays, this edition will explore the Age Discrimination in Employment Act (“ADEA”) with a holiday twist.

The ADEA was passed by Congress and signed into law by President Lyndon B. Johnson in 1967.  The ADEA prohibits discrimination against people who are 40 or older.¹  The ADEA applies to employers with 20 or more employees.²  As the EEOC has noted, the ADEA “prohibits discrimination in any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, benefits, and any other term or condition of employment.”³  The ADEA also prohibits harassing an employee because of his or her age.⁴  In 2022, the EEOC received 11,500 Charges of Discrimination alleging age discrimination.⁵  The law also protects employees from retaliation for raising complaints of age discrimination.⁶  Age is also a protected category under the Florida Civil Rights Act (“FCRA”), which applies to employers with 15 or more employees.⁷  Courts analyze claims for age discrimination under the FCRA using the same framework as the ADEA.⁸

As a hypothetical, imagine that Yohan (who is 33) and Daniele (who is 63) work for Santa’s Workshop, conveniently located in Christmas, Florida.  Yohan is Daniele’s manager in the facility, which manufactures toys that are distributed all around the world.  Daniele has been with the company for over twenty years, and Yohan was appointed her manager two months ago after the unexpected retirement of her former manager, Buddy.  Under Buddy, Daniele consistently earned high praise and had excellent performance scores.  After a few weeks of taking over the department, Yohan begins criticizing Daniele’s performance, while continually praising her younger colleagues.  Yohan also tells Daniele that she is “slowing down in her old age” and repeatedly asks her when she is going to retire.  Daniele has clear grounds to raise a complaint to Nick, the owner of the workshop, for age discrimination and harassment.  If Nick ignores Daniele’s complaint, or retaliates against her for raising the complaint, he is at risk of Daniele having a cause of action against Santa’s Workshop under the ADEA and the FCRA.

As the example above shows, employers must take complaints of age discrimination seriously, or they risk being placed on the “Naughty list.”  If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

[1] For context, the life expectancy in 1967 was 67 for men and 74.3 for females. Social Security Administration, Period Life Expectancies—Calendar Years 1940-2001, available at https://www.ssa.gov/OACT/TR/TR02/lr5A3-h.html (last visited Nov. 17, 2023).  We often hear surprised comments about 40 being the threshold, but it has not been raised since the Act’s passage.

[2] U.S. Equal Employment Opportunity Commission, Age Discrimination, available at https://www.eeoc.gov/age-discrimination (last visited Nov. 17, 2023).

[3] Id.

[4] Id.

[5] U.S. Equal Employment Opportunity Commission, Age Discrimination in Employment Act (Charges filed with EEOC) (includes concurrent charges with Title VII, ADA, EPA, and GINA) FY 1997 – FY 2022, available at https://www.eeoc.gov/data/age-discrimination-employment-act-charges-filed-eeoc-includes-concurrent-charges-title-vii-ada (last visited Nov. 17, 2023).

[6] See U.S. Dep’t of Labor, What do I need to know about . . . Age Discrimination, available at https://www.dol.gov/agencies/oasam/centers-offices/civil-rights-center/internal/policies/age-discrimination (last visited Nov. 17, 2023).

[7] §§ 760.02, 760.10, Fla. Stat. (2023).

[8] Mazzeo v. Color Resolutions Int’l, LLC, 746 F.3d 1264, 1266 (11th Cir. 2014).

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In 2021, the Florida Supreme Court amended Rule 1.510, Florida Rules of Civil Procedure, which governs summary judgment. In short, summary judgment is a procedural tool that permits courts to allow only cases with genuine issues of material facts to proceed to trial.² In Whitlow v. Tallahassee Memorial Healthcare, Inc., the First District Court of Appeal (“DCA”) addressed the revision to rule 1.510 and its impact on cases in Florida.³ Understanding this change is critical for practitioners and those looking to proceed through Florida’s state court system.

For purposes of this blog, the facts of Whitlow will only be briefly summarized, as it involved a slip-and-fall injury at Tallahassee Memorial Hospital.⁴ Ms. Whitlow alleged that she slipped on water left by employees pushing a stretcher out of an elevator immediately before she entered.⁵ The DCA noted that pursuant to statute, Ms. Whitlow had to prove that the hospital “had ‘knowledge of the dangerous condition and should have taken action to remedy it.’”⁶ The DCA agreed with the lower court that Ms. Whitlow “failed to present substantive evidence from which a jury reasonably could infer that the [hospital] employees knew of the dripping water . . . or that the employees could have done anything to correct the unsafe condition in the short time” between when the employees got off the elevator with the stretcher and she got on.⁷ The court thus affirmed the lower court’s granting of summary judgment in favor of the hospital, meaning that Ms. Whitlow did not “come forward with evidence that could lead a rational jury to find in her favor.”⁸ 

For purposes of this blog, the key aspects of the Whitlow opinion are the DCA’s discussion of the history of summary judgment and the relatively new standard being used by Florida’s state courts. The DCA begins its analysis with an excellent historical overview of the right to trial by jury and its importance under federal and Florida law, with roots dating back to ancient English common law.⁹ As the DCA notes in Whitlow, the right to trial by jury is a matter of substance, not procedure, leaving “open the possibility that the legislative or judicial power could develop mechanisms of procedural expediency to weed out cases that lacked a genuine dispute over facts requiring court resolution.”¹⁰ Judges are free to determine if the evidence presented is sufficient to warrant a trial by jury, “provided the judge limit[s] the assessment to the quantum of evidence and not the weight of it.”¹¹ One such method judges use to make such a determination is the directed verdict, which permits judges “to take the case from the jury without running afoul of the constitutional right, provided he concluded ‘as a matter of law that no recovery can be lawfully had upon any view taken of facts that the evidence tends to establish.’”¹² The directed verdict is sought during the course of the trial.¹³

Summary judgment is another tool judges can use in determining if a case should proceed to a jury, although that determination occurs before the trial begins.¹⁴ The United States Supreme Court adopted a summary judgment rule applicable to all civil cases; similarly, the Florida Supreme Court also adopted such a rule.¹⁵ The Florida Supreme Court has urged lower courts to exercise caution in utilizing the summary judgment power.¹⁶ The new Rule 1.510 adopted by the Florida Supreme Court mirrors the summary judgment standard set forth in Rule 56 of the Federal Rules of Civil Procedure.¹⁷ According to the DCA, this change “represents a return to the procedural expediencies that the supreme court had approved over a century earlier as complementing, rather than conflicting with, the right to a trial by jury.”¹⁸ The Florida Supreme Court “essentially requires that the directed verdict standard—which it has approved for application mid-trials since the nineteenth century—now to be applied pre-trial as well.”¹⁹ As the DCA notes, “The function of the trial court at the summary judgment stage is not ‘to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.’”²⁰ The non-moving (i.e., the party who did not file the summary judgment motion) party has the burden “to come forward with evidence showing a ‘dispute about a material fact [that] is “genuine,”’ or, in other words, demonstrate that ‘the evidence is such that a reasonable jury could return a verdict for the’ party opposing the motion.”²¹ If the non-moving party fails to meet that burden, the trial court “may grant summary judgment against the party without running afoul of the constitution’s jury-trial guarantee.”²²

Turning to the case at issue, the DCA held that the trial court correctly determined that “Whitlow failed to come forward with evidence that demonstrated one or more genuine disputes of material fact that required resolution by a jury.”²³ In making its determination, the DCA reviewed the trial court’s decision de novo (Latin for “anew”), meaning the court does not owe the trial court’s decision deference.²⁴

The revised Rule 1.510 will have far-reaching consequences for litigants in Florida. It is critical that practitioners and clients understand this change and consider its application in determining whether to proceed to filing a claim in state court.

If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

1 Credit to Coach Lee Corso for popularizing the catchphrase.

2 See Whitlow v. Tallahassee Mem’l Healthcare, Inc., No. 1D21-3413 (Fla. 1st DCA Aug. 16, 2023), available at https://1dca.flcourts.gov/content/download/875603/opinion/Opinion2021-3413.pdf (last visited Oct. 2, 2023).

3 See id.

4 Id., at *1.

5 Id.

6 Id., at *1-2 (citing section 768.0755(1), Florida Statutes.

7 Id., at *2.

8 Id. 2

9 Id., at *2. The right to a trial by jury in civil matters is enshrined in the United States and the Florida Constitutions. U.S. Const. amen. VII; Art. I, § 22, Fla. Const. Furthermore, the denial of the right to trial by a jury was one of the grievances raised by the colonists against the Crown in the Declaration of Independence. Whitlow, at *2-3.

10 Id., at *4.

11 Id.

12 Id., at *5 (citation omitted).

13 Id., at *9.

14 Id., at *6.

15 Id., at *7.

16 Id., at *8.

17 Id.

18 Id., at *8-9.

19 Id., at *9.

20 Id. (citation omitted).

21 Id., at *9-10 (citation omitted).

22 Id., at *10.

23 Id., at *10, 15.

24 See id., at *10.

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Recently, the Sixth Circuit Court of Appeals (which has jurisdiction over the district courts in Kentucky, Tennessee, Michigan, and Ohio) addressed the following question: “whether Congress’s delegation to [OSHA] to set workplace-safety standards is constitutional.”¹ The court noted that since the passage of the Occupational Safety and Health Act (“OSH” or “the Act”) in 1970, challenges to the law’s constitutionality have been repeatedly rejected.² Plaintiff Allstates Refractory Contractors (“Allstates”), a general contractor that falls under the oversight of OSHA, argued that OSHA’s authority to set “‘reasonably necessary or appropriate’” work-place standards was unconstitutional.³ The district court rejected Allstates’ argument, and the Sixth Circuit, in a 2-1 opinion, agreed.⁴ This blog post will discuss the Sixth Circuit’s reasoning and explore the nondelegation doctrine of constitutional law.

At the district court and on appeal, Allstates argued that “because the only textual constraint on setting workplace-safety standards is that they be ‘reasonably necessary or appropriate’ . . . OSHA does not have the constitutional authority to set those standards” and that employers therefore did not have to comply with them.⁵ The district court (and the Sixth Circuit) concluded that the “‘reasonably necessary or appropriate’” standard satisfied the nondelegation doctrine because it provides an “‘intelligible principle,’” and the United States Supreme Court has upheld similar delegations on numerous occasions.⁶ As the Sixth Circuit explained, the nondelegation doctrine is “‘rooted in the principle of separation of powers that underlies our tripartite system of governance,’ the maintenance of which ‘manadate[s] that Congress generally cannot delegate its legislate power to another Branch.’”⁷ To determine if Congress has properly “obtained the assistance” from the other Branches for non-legislative duties, courts have established the “‘intelligible principle’” test.⁸ As the Supreme Court has stated, “‘If Congress shall lay down by legislative act an intelligible principle to which the person or body authorized to [act] is directed to conform, such legislative action is not a forbidden delegation of legislative power.’”⁹ This test “balances Congress’s need for flexibility with the Constitution’s prohibition on legislative delegation,” recognizing the complexities of a modern society.¹⁰ The “intelligible principle” test “is satisfied and the statute is constitutional ‘if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority.’”¹¹ This test requires an interpretation of the statute at issue, including its purpose, the instruction provided, and whether an agency’s discretion is sufficiently guided by the legislation.¹²

As the Sixth Circuit noted, the “Supreme Court, in examining nondelegation challenges, has almost uniformly upheld ‘delegations under standards phrased in sweeping terms.’”¹³ The Sixth Circuit provides an indepth discussion of the nondelegation doctrine and the “intelligible principle” test, noting that only on two occasions (both in 1935) has the Supreme Court found a violation of the nondelegation doctrine.¹⁴ The court explored the history of the Act and noted that the Act delineates the general policy behind it (to ensure safe working conditions), authorizes the Secretary of Labor to set standards, and sets forth the boundaries of the Secretary’s authority.¹⁵ The court observed that the Supreme Court has also construed 3 the “‘reasonably necessary or appropriate’” language of the Act and provided guidance. ¹⁶

Taking the statutory context and case law into consideration, the Sixth Circuit held that “the OSH Act’s ‘reasonably necessary or appropriate’ standard passes the ‘intelligible principle’ test and is therefore constitutional.”¹⁷ The court emphasized that the Act contains several purposes, significantly limits OSHA’s discretion, and requires the agency to act in response to safety issues.¹⁸ The court held that “a condition is ‘reasonably necessary or appropriate’ in the context of the OSH Act if it is something that OSHA can do to ameliorate or mitigate, but not necessarily eliminate, an unsafe condition.”¹⁹ The court rejected Allstates’ reliance on the two 1935 cases where the Supreme Court found violations of the nondelegation doctrine.²⁰ The Sixth Circuit concluded by reiterating that “the standard prescribed by the OSH Act” is “a constitutional delegation of authority” and affirmed the decision of the district court.²¹

For a real-world example, imagine that Kody owns a warehouse. If Kody fails to abide by the pertinent OSHA regulations and employee Janelle suffers a workplace injury, it is unlikely that Kody will be able to avoid paying a fine by arguing that OSHA did not have the authority to impose such a fine.

If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

¹ Allstates Refractory Contractors, LLC v. Su, et al., No. 23-3772 (6th Cir. Aug. 23, 2023), at *2, available at https://www.opn.ca6.uscourts.gov/opinions.pdf/23a0194p-06.pdf (last visited Sept. 15, 2023).

² Id.

³ Id.

⁴ The Sixth Circuit noted that Allstates was fined $10,000 by OSHA in 2019 for a catwalk injury. Id., at *3.

⁵ Id.

⁶ Id. 2

⁷ Id., at *4 (quoting Mistretta v. U.S., 488 U.S. 361, 371-72 (1989)).

⁸ Id.

⁹ Id. (quoting J.W. Hampton, Jr., & Co. v. U.S., 276 U.S. 394, 409 (1928)).

¹⁰ Id.

¹¹ Id. (quoting Mistretta, 488 U.S. at 372-73 (other citation omitted)).

¹² Id., at *5.

¹³ Id. (quoting Loving v. U.S., 517 U.S. 748, 771 (1996)).

¹⁴ Id., at *6. In those cases, the statutes at issue did not provide limitations on the president’s authority or provide any guidance. Id.

¹⁵ Id., at *7-8.

¹⁶ Id., at *8.

¹⁷ Id., at *9.

¹⁸ Id.

¹⁹ Id., at *10.

²⁰ Id., at12-14.

²¹ Id., at *15.

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In June 1938, President Franklin D. Roosevelt signed the Fair Labor Standards Act (“FLSA” or “Act”) (Pub. L. 75-718, ch. 676, 52 Stat. 1060) into law (taking effect in October 1938) while the country was in the throes of the Great Depression.  President Roosevelt stated regarding the Act, “I do think that next to the Social Security Act it is the most important Act that has been passed in the last two to three years.”²  The FLSA “establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.”³  This blog post will provide a brief overview of the FLSA and discuss how it may protect Your rights in the workplace.

It is not an exaggeration to state that the FLSA “changed the entire employment culture of the United States and easily rivals Social Security in its importance.”⁴  The FLSA was the culmination of a decades-long fight to protect workers, both children and adults.⁵  During his reelection campaign in 1936, President Roosevelt asserted, “Something has to be done about the elimination of child labor and long hours and starvation wages[.]”⁶  The FLSA took more than a year to make it to President Roosevelt’s desk, and it was a contentious fight.⁷  Secretary of Labor Frances Perkins, who spent much of her working life advocating for pro-labor causes, was instrumental in crafting the FLSA.⁸   The FLSA has been amended several times since its passage in 1938.⁹

Under the FLSA, children are limited in the jobs they can perform and the hours they can work.¹⁰  The FLSA also sets a minimum wage for covered workers and employers.  Currently, the federal minimum wage stands at $7.25 (the minimum wage in Florida is $11.00, which will increase to $12.00 on September 30, 2023).¹¹  Another important component of the FLSA’s protections is overtime pay.  As noted by the Department of Labor, the entity tasked with enforcement of the FLSA, “Unless exempt, employees covered by the Act must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.”¹²

Today, the Department of Labor estimates that “[m]ore than 143 million American workers are protected (or ‘covered’) by the FLSA[.]”¹³  As President Roosevelt and Secretary Perkins envisioned, the FLSA continues to play a pivotal role in providing important protections to American workers.  The Department of Labor has provided the following guidance regarding ways employees can be covered by the law:

Enterprise Coverage.

Employees who work for certain businesses or organizations (or “enterprises”) are covered by the FLSA. These enterprises, which must have at least two employees, are:

those that have an annual dollar volume of sales or business done of at least $500,000.

hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies.

Individual Coverage.

Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between States (“interstate commerce”). The FLSA covers individual workers who are “engaged in commerce or in the production of goods for commerce.”

Examples of employees who are involved in interstate commerce include those who: produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, regularly make telephone calls to persons located in other States, handle records of interstate transactions, travel to other States on their jobs, and do janitorial work in buildings where goods are produced for shipment outside the State.

Also, domestic service workers (such as housekeepers, full-time babysitters, and cooks) are normally covered by the law.¹⁴

Navigating the intricacies of the FLSA requires experienced counsel, and we are well-versed in the law.  If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

[1] Samuel, Howard D., “Troubled Passage: the labor movement and the Fair Labor Standards Act,” Monthly Labor Review (December 2000), available at https://www.bls.gov/opub/mlr/2000/12/art3full.pdf (last visited Aug. 31, 2023).

[2] Wages and the Fair Labor Standards Act, U.S. Dep’t of Labor, Wage & Hour Div., https://www.dol.gov/agencies/whd/flsa (last visited Aug. 31, 2023).

[3] Cole, supra note 1.

[4] See id.

[5] Id.

[6] Grossman, supra note 1.

[7] Id.

[8] See History, U.S. Dep’t of Labor, Wage & Hour Div., https://www.dol.gov/agencies/whd/about/history (last visited Aug. 31, 2023).

[9] Basic Information, U.S. Dep’t of Labor, Wage & Hour Div., available at https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/whd_fs.pdf (last visited Aug. 31, 2023).  States, including Florida, also have limitations on employing minors.

[10] Minimum Wage, U.S. Dep’t of Labor, Wage & Hour Div., https://www.dol.gov/agencies/whd/minimum-wage (last visited Aug. 31, 2023); https://www.dol.gov/agencies/whd/minimum-wage/state#fl (setting forth the minimum wage in Florida) (last visited Aug. 31, 2023).

[11] Overtime Pay, U.S. Dep’t of Labor, Wage & Hour Div., https://www.dol.gov/agencies/whd/overtime (last visited Aug. 31, 2023).

[12] Fact Sheet #14: Coverage Under the Fair Labor Standards Act (FLSA), U.S. Dep’t of Labor, Wage & Hour Div., available at https://www.dol.gov/agencies/whd/fact-sheets/14-flsa-coverage (last visited Aug. 31, 2023).

[13] Id.

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On June 29, 2023, the United States Supreme Court issued its opinion in Groff v. DeJoy, No. 22-174 (2023).¹ In a unanimous opinion authored by Justice Alito, the Court provided guidance regarding the phrase “undue hardship” under Title VII. This blog post will breakdown the opinion in Groff and discuss its implications moving forward.

In Groff, the plaintiff, Gerald Groff, “is an Evangelical Christian who believes for religious reasons that Sunday should be devoted to worship and rest[.]”² Groff was employed by the United States Postal Service (“USPS”) as a Rural Carrier Associate, which required him to assist regular carriers with mail delivery.³ Within a few years of Groff joining USPS, the agency began delivering mail on Sundays through an agreement with Amazon.⁴ Ultimately, USPS informed Groff that he would have to work on Sundays.⁵ Groff sought and received a transfer to a different rural USPS station that at the time did not make Sunday deliveries.⁶ In March 2017, however, Sunday deliveries began at that station as well.⁷ Deliveries that would have been made by Groff had he worked on Sundays were performed by others, including the local postmaster, who typically did not deliver mail.⁸ Throughout 2017 and 2018, Groff continued to receive “‘progressive discipline’” for failing to work Sundays, and other employees complained about the consequences of Groff not working Sundays, including at least one employee filing a grievance related to the matter.⁹ He resigned in January 2019; he asserted that his termination was imminent.¹⁰ 

Groff filed suit under Title VII of the Civil Rights Act of 1964, as amended (“Title VII”), asserting that USPS could have accommodated his request not to work Sundays “‘without undue hardship on the conduct of [USPS’s] business.’”¹¹ The District Court (i.e., the trial court) granted summary judgment (effectively ending the case) in favor of USPS, and the appellate court (here, the Third Circuit) affirmed.¹² The Third Circuit held that under controlling case law, “‘requiring an employer “to bear more than a de minimis cost” to provide a religious accommodation is an undue hardship.’”¹³ The Third Circuit, and other courts, reached this conclusion based on a single line in the Supreme Court’s opinion in Trans World Airlines, Inc. v. Hardison, 432 U.S. 63, 84 (1977).¹⁴ The Third Circuit held that “[e]xempting Groff from Sunday work . . . had ‘imposed on his coworkers, disrupted the workplace and workflow, and diminished employee morale.’”¹⁵

The Supreme Court took the opportunity to clarify Hardison and held that “showing ‘more than a de minimis cost,’ as that phrase is used in common parlance, does not suffice to establish ‘undue hardship’ under Title VII.”¹⁶ The Court emphasized that Hardison “cannot be reduced to that one phrase.”¹⁷ The Court explained that “[w]e therefore, like the parties, understand Hardison to mean that ‘undue hardship’ is shown when a burden is substantial in the overall context of an employer’s business.”¹⁸ The Court went on to state that “[w]e think it enough to say that an employer must show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business.”¹⁹ The Court stressed that “courts must apply the test in a manner that takes into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, ‘size and operating cost of [an] employer.’”²⁰ Turning to Groff’s claim, the Court left it to the lower courts to apply the clarified test and remanded the matter to the Third Circuit for further proceedings.²¹

The Supreme Court’s decision in Groff provides helpful guidance in claims involving “undue hardship” under Title VII. By way of example, if employee Gary requests that he be excused from working evening shifts at a warehouse because his religion prohibits working between sundown and sunup, the owner of the company, Glenn, would have to determine if he can accommodate the request without a substantial burden to his business. It may be that, given the nature of the business, Glenn would not be able to accommodate such a request. This is an issue that will undoubtedly be litigated moving forward, but Groff does provide much-needed guidance after over four decades of courts relying upon a single sentence in Hardison regarding the “undue hardship” standard.

If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

1 The opinion can be found on the Supreme Court’s website at https://www.supremecourt.gov/opinions/22pdf/22-174k536.pdf (last visited July 20, 2023).
2 Groff, at *1.
3 Id., at *2.
4 Id.
5 Id.
6 Id.
7 Id.
8 Id., at *2-3.
9 Id., at *3.
10 Id.
11 Id.
12 Id.
13 Id.
14 Id. The line was: “‘To require TWA to bear more than a de minimis cost in order to give Hardison Saturdays off is an undue hardship.’” Id., at * 11 (quoting Hardison, 432 U.S. at 84).
15 Id., at *3-4.
16 Id., at *15.
17 Id.
18 Id., at *15-16.
19 Id., at *18.
20 Id.
21 Id., at 21.

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As we have previously discussed, the False Claims Act (“FCA”) provides a mechanism for private parties to bring lawsuits in the name of the United States against those who allegedly defrauded the government. Recently, the United States Supreme Court provided further guidance related to the scienter (Latin for “knowingly”) element of the FCA. Justice Clarence Thomas authored the opinion on behalf of a unanimous court in United States ex rel. Schutte, et al. v. Supervalu Inc. ¹ The Court provided an overview of the FCA and imparted valuable guidance for litigants involved in these important cases. This blog post will discuss the opinion and its impact moving forward.

In Schutte, the Court addressed two cases against pharmacies Supervalu and Safeway. The Petitioners (the Relators below) alleged that the pharmacies (Respondents) “overcharged Medicare and Medicaid programs for years when seeking reimbursement for prescription drugs that the programs covered.”² The Court provided a thorough overview of the requirements for reimbursement for Medicare and Medicaid; in short, both entities require pharmacies to seek reimbursement for the “usual and customary” price for the relevant drug.³ The Relators alleged that the pharmacies reported higher prices to Medicare and Medicaid than the ones they “usually and customarily” charged to other customers.⁴ Supervalu and Safeway adopted price-match programs that lasted until 2016 and 2015, respectively.⁵ Supervalu would match the lower price of a competitor and apply that price to future refills.⁶ Safeway had a membership program that allowed customers to obtain low-cost prescriptions for generic drugs.⁷ The Relators argued that these discounted prices were the pharmacies’ “usual and customary” prices given the popularity of the programs.⁸ One example the Court provided was that “Safeway charged just $10 for 94% of its cash sales for a 90-day supply of a cholesterol drug between 2008 and 2012. Yet Safeway apparently reported prices as high as $108 as ‘usual and customary’ during that time.”⁹ The Relators presented evidence that both pharmacies were informed that the lower prices were the “usual and customary price,” that the companies believed that the lower prices were the “usual and customary price,” and that both entities tried to hide the discounted prices from Medicare and Medicaid.¹⁰ The Relators provided evidence to support this theory, including notices from a pharmacy benefit manager about the “usual and customary price” being the discounted price; comments made by executives related to the programs; and documents directed to Safeway employees instructing them not to put the price match guarantee in writing.¹¹

As Justice Thomas succinctly stated, “[T]wo essential elements of an FCA violation are (1) the falsity of the claim and (2) the defendant’s knowledge of the claim’s falsity.”¹² The District Court granted summary judgment in favor of the pharmacies (ending the case at that level), holding that they did not act “knowingly,” and the Seventh Circuit (the court of appeals) affirmed.¹³ The Court noted that it was not reviewing the meaning of “usual and customary” or to settle factual matters.¹⁴ Instead, the Court answered the question, “If respondents’ claims were false and they actually thought that their claims were false—because they believed that their reported prices were not actually their ‘usual and customary’ prices—then would they have ‘knowingly’ submitted a false claim within the FCA’s meaning?”¹⁵

In answering that question, Justice Thomas noted that “[w]hat matters for an FCA case is whether the defendant knew the claim was false. Thus, if respondents correctly interpreted the relevant phrase and believed their claims were false, then they could have known their claims were false.”¹⁶ Under the FCA, “either actual knowledge, deliberate ignorance, or recklessness will suffice” to “knowingly” present a fraudulent claim.¹⁷ Justice Thomas emphasized that although the phrase “usual and customary” is not the model of clarity, the ambiguity “does not preclude respondents from having learned their correct meaning—or, at least, becoming aware of a substantial likelihood of the terms’ correct meaning.”¹⁸ The Court summarized its holding by stating, “For scienter, it is enough if respondents believed that their claims were not accurate.”¹⁹ The Court vacated the judgments below and remanded the cases to the Seventh Circuit.²⁰

To illustrate the holding of this opinion, it is helpful to consider a hypothetical. Teresa and Danielle own several pharmacies that receive funds from both Medicare and Medicaid. Teresa and Danielle decide that they are going to charge customers who pay cash $10 for a 30-day supply of common heart medication. The program became so popular that 99% of the customers for that medication pay cash, while the other 1% of the customers are on Medicare. Teresa and Danielle report to Medicare that the usual and customary price they charge for the medication is $200. Dolores, who acts as CFO of the company, warned Teresa and Danielle that this conduct is likely illegal. Likewise, they received a warning from a benefit manager regarding the illegality of the practice. Employee Melissa, who is upset about this practice (and indeed has complained about it and suffered a demotion), decides to seek counsel. Ultimately, Melissa’s counsel determines there are grounds to pursue an FCA action. Under Schutte, the scienter requirement would likely be met (given these facts), although the other elements of the cause of action would also have to be proven for the claim to succeed.

If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

1 The slip opinion can be found at https://www.supremecourt.gov/opinions/22pdf/21-1326_6jfl.pdf (last visited June 5, 2023).

2 Id., at *2.

3 Id., at *3.

4 Id., at *4

5 Id.

6 Id.

7 Id.

8 Id., at *5.

9 Id.

10 Id.

11 Id., at *5-6.

12 Id., at *6.

13 Id.

14 Id., at *8.

15 Id., at *7.

16 Id., at *2.

17 Id., at *9.

18 Id., at *12.

19 Id., at *16.

20 Id., at *17.

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On March 24, 2023, Governor Ron DeSantis signed into law a far-reaching tort reform bill. ¹ According to Governor DeSantis, “Florida has been considered a judicial hellhole for far too long[,] and we are desperately in need of legal reform that brings us more in line with the rest of the country[.]”² It is a sweeping revision in the realm of tort law and will undoubtedly change how tort cases are handled in the state. Indeed, thousands of lawsuits were filed across Florida in the days prior to Governor DeSantis signing the bill into law.³ The legislation applies to cases filed after the date of signing.⁴ This blog post will highlight one aspect of the new law—the statute of limitations (that is, the time you have to file a lawsuit) in general negligence claims. The new legislation reduces the statute of limitations in negligence claims from four years to two.⁵

In the employment law realm, we sometimes pursue negligence claims, including negligent hiring and negligent retention. As a federal court has noted, “The elements to state a claim for negligent retention are the same as negligent hiring/selection. That is, a plaintiff must allege that ‘(1) the agent/employee/contractor was incompetent or unfit to perform the work; (2) the employer knew or reasonably should have known of the particular incompetence or unfitness; and (3) the incompetence or unfitness was a proximate cause of the plaintiff’s injury.’”⁶ As can be expected, negligent hiring occurs prior to employment, and negligent retention occurs during employment. By way of example for negligent retention, if Company A had a previous complaint that employee Rachel was responsible for physically attacking employee Anna at work, but Company maintained Rachel’s employment, Company may be held liable for negligent retention if employee Rachel subsequently attacks employee Shana. Under the new law, Shana would have two years from the date of the incident to file a complaint in the proper court for negligent retention against Company (she may have other claims as well, including a battery claim against Rachel). It is vital for individuals to understand the reduced statute of limitations and file a complaint within the appropriate timeframe.

If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

1 Press Release, Office of the Governor of Florida, Governor Ron DeSantis Signs Comprehensive Legal Reforms Into Law (Mar. 24, 2023), available at https://www.flgov.com/2023/03/24/governor-ron-desantis-signs-comprehensive-legal-reforms-into-law/ (last visited Apr. 25, 2023).

2 Id.

3 John Kennedy, Fear of new limits prompts flood of lawsuits before DeSantis signed restrictions into law, TALLAHASSEE DEMOCRAT, Mar. 25, 2023, available at https://www.tallahassee.com/story/news/politics/2023/03/24/thousands-lawsuits-filed-florida-before-limits-kick-in-desantis/70045705007/ (last visited Apr. 25, 2023).

4 Id.

5 Press Release, supra note 1.

6 Martinez v. Celebrity Cruises, No. 20-23585, 2021 U.S. Dist. Lexis 4852, at *20-21 (S.D. Fla. Jan. 8, 2021).

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On February 9, 2023, the DOL, Wage and Hour Division (“WHD”), issued Field Assistance Bulletin (“FAB”) No. 2023-1, providing guidance to agency field staff related to telework under the FLSA and the FMLA.1 This FAB demonstrates how the Agency applies laws and regulations to remote-work scenarios. Understanding this guidance is vital for employers and employees alike.

The FAB begins by discussing the regulations related to compensating non-exempt employees under the FLSA for all hours worked, “including work performed in their home or otherwise away from the employer’s premises or job site.” The DOL has emphasized that, generally, an employee’s workday is composed of “the period between the time when the employees commences their first ‘principal activity’ and the time on that day at which they cease such principal activity or activities.” Thus, an employee’s workday may extend beyond a scheduled shift. Pursuant to the FLSA, short breaks of twenty (20) minutes or less (for example, coffee breaks and restroom breaks) are generally considered as hours worked for which compensation is due (known as compensable time). Longer breaks where employees are completely relieved of duty and where the employee can use the time “effectively” for their own purposes (for example, meal breaks) are not compensable hours. The FAB stresses that “[t]he principles apply regardless of whether the work is performed at the employers’ worksite, at the employee’s home, or at some other location away from the employer’s worksite.” If the employee knows or should know that work is being performed by the employee, the time must be counted as hours worked. For example, if Debbie takes a meal break from 12:30 to 1:00 p.m., but she is interrupted by multiple work phone calls that each last several minutes, that meal break would be compensable. It is thus critical for employers to implement accurate time-keeping procedures, both for employees in the office and for those working remotely.

The FAB also discusses break time for pumping breast milk for teleworkers. Specifically, the FAB notes that “[t]he FLSA also requires that employers provide covered employees ‘reasonable break time for an employee to express breast milk for such employee’s nursing child for 1 year after the child’s birth each time such employee has need to express the milk’ and provide ‘a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.’” Employers are not required to compensate nursing employees for breaks taken for the purpose of expressing milk, unless employers provide compensated breaks and the employee uses that break to express milk. Importantly, as the FAB notes, “If a remote employee chooses to attend a video meeting or conference call – even if off camera – generally the employee in that case is not relieved from duty and, therefore, must be paid for that time.”

Finally, the FAB discusses the FMLA and its application to remote employees. Specifically, Employees who telework are eligible for FMLA in the same way as employees who report to the worksite for their jobs. “Employees are eligible for FMLA leave when they have worked for the employer for at least 12 months; have at least 1,250 hours of service for the employer during the 12-month period immediately preceding the leave; and work at a location where the employer has at least 50 employees within 75 miles.” The FAB further instructs, “The determination of whether an employee has been employed for at least 12 months and has at least the required hours of service is made as of the date FMLA leave is to start; the determination of whether at least 50 employees are employed at the employee’s worksite, or within 75 miles, is made when the employee gives notice of the need for leave.” Once again, it is critical that employers maintain an accurate time-keeping system for purposes of hours worked. For teleworkers, the worksite for FMLA purposes “is the office to which they report or from which their assignments are made.” A personal residence is not considered a worksite. Regarding an employer’s number of employees, “[t]he count of employees within 75 miles of a worksite includes all employees whose worksite is within that area, including employees who telework and report to or receive assignments from that worksite.” For example, if Debbie works remotely from Morocco for a company based in Orlando that has 300 employees within 75 miles of the headquarters, her worksite would be considered Orlando, and she would be entitled to leave under the FMLA if she met the other eligibility requirements.

Understanding the rights of teleworkers is important for both employers and employees. The FAB provides guidance related to the pertinent laws and regulations, but if you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

1 JESSICA LOOMAN, U.S. DEP’T OF LABOR, FIELD ASSISTANCE BULLETIN NO. 2023-1, TELEWORK UNDER THE FAIR LABOR STANDARDS ACT AND FAMILY AND MEDICAL LEAVE ACT (Feb. 9, 2023), available at https://www.dol.gov/sites/dolgov/files/WHD/fab/2023-1.pdf (last visited Mar. 21, 2023). All quotations herein are from the FAB unless otherwise noted.

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On January 5, 2023, the Federal Trade Commission (“FTC”) announced that it proposed a new rule pursuant to Section 5 of the Federal Trade Commission Act that would ban employers from imposing noncompete agreements on employees.¹ The FTC estimated that “the new proposed rule could increase wages by nearly $300 billion per year and expand career opportunities for about 30 million Americans.”² According to FTC Chair Lina M. Khan, “Noncompetes block workers from freely switching jobs, depriving them of higher wages and better working conditions, and depriving businesses of a talent pool that they need to build and expand. By ending this practice, the FTC’s proposed rule would promote greater dynamism, innovation, and healthy competition.”³ 

The proposed rule would supersede all contrary state laws.⁴ The rule would prohibit employers from entering into or attempting to enter into a noncompete agreement with a worker, maintaining a noncompete with a worker, or, in certain circumstances, representing to a worker that he or she is subject to a noncompete agreement.⁵ The proposed rule would apply to independent contractors and anyone who works for an employer, whether paid or not.⁶ It would further require employers to rescind existing noncompete agreements and would mandate that employers inform workers that the agreements have been rescinded.⁷ The proposed rule includes an exception for an individual “who is selling a business entity or otherwise disposing of all of the person’s ownership interest in the business entity, or by a person who is selling all or substantially all of a business  entity’s operating assets” if the individual “is a substantial owner of, or substantial member or substantial partner in, the business entity at the time the person enters into the non-compete clause.” ⁸

The FTC is seeking public comment on the proposed rule, and the comment period is open until March 20, 2023. Following that period, the FTC will conduct a further analysis of the proposed rule and may make revisions. The FTC may issue a new proposed rule, terminate the rulemaking authority on the issue, or move to adopt a final rule. Congress has an opportunity to review all final rules and may also hold hearings regarding the proposed rule or take other legislative action, and litigation is likely if a final rule is adopted. It is important to note that this is early in the process and that it is unclear what form, if any, the final rule will take and if a final rule would survive congressional action or litigation. 

We will continue to monitor this important story and provide updates as they become available. If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us. 

 1 Press Release, Fed. Trade Comm’n, FTC Proposes Rule to Ban Noncompete Clause, Which Hurt Workers and Harm Competition (Jan. 5, 2023), available at https://www.ftc.gov/news-events/news/press-releases/2023/01/ftc-proposes-rule-ban-noncompete-clauses-which-hurt-workers-harm-competition (last visited Feb. 13, 2023). 

2 Id. 

3 Id. 

4 Non-Compete Clause Rulemaking, § 910.4, Proposed Rule, Fed. Trade Comm’n, available at https://www.ftc.gov/legal-library/browse/federal-register-notices/non-compete-clause-rulemaking (last visited Feb. 15, 2023). 

5 Id. at § 910.2(a). 

6 Id. at § 910.1(f). 

7 Id. at § 910.2(b).  

8 Id. at § 910.3.  

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On December 7, 2022, President Biden signed into law the Speak Out Act (“the Act”). The Act provides, “With respect to a sexual assault dispute or sexual harassment dispute, no nondisclosure clause or nondisparagement clause agreed to before the dispute arises shall be judicially enforceable in instances in which conduct is alleged to have violated Federal, Tribal, or State law.” 42 U.S.C. § 19403(a) (emphasis added). This means that parties are limited in being able to agree to not discuss a matter involving sexual assault or sexual harassment before the “dispute arises.” This phrase is not defined in the statute, but Congress made it clear that “[i]n order to combat sexual harassment and assault, it is essential that victims and survivors have the freedom to report and publicly disclose their abuse.” 42 U.S.C. § 19401. According to Congress, “[p]rohibiting nondisclosure and nondisparagement clauses will empower survivors to come forward, hold perpetrators accountable for abuse, improve transparency around illegal conduct, enable the pursuit of justice, and make workplaces safer and more productive for everyone.” Id. The Act follows the enactment earlier in 2022 of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (as covered in our April 2022 blog). These acts are part of a larger movement across the country to limit the use of non-disparagement and non-disclosure provisions in agreements stemming from cases involving sexual harassment and sexual assault.

In response to the Act and the Ending Forced Arbitration Act, employers should review employment agreements, confidentiality agreements, employee handbooks, and arbitration agreements to ensure compliance. Furthermore, employers should review separation agreements and settlements to confirm they comply with this (and similar) legislation. Given the lack of a definition for when a “dispute arises,” one unintended consequence of the Act may be that employers will ask plaintiff’s counsel to file suit (with as few facts alleged as possible) before resolving a matter so enforceable confidentiality and non-disparagement provisions can be included in the settlement agreement. Furthermore, employers may include severability clauses (meaning that provisions can be removed if deemed unenforceable but keep the remainder of the agreement enforceable) in an attempt to make it seem that otherwise unenforceable non-disclosure and non-disparagement clauses are enforceable. It will be interesting to see how this legislation impacts sexual assault and sexual harassment matters going forward.

We will continue to monitor the situation and provide updates as they become available. If you have any questions or concerns regarding this topic, or any topic related to labor and employment law, please contact us.

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