Implementing an Employer-Sponsored Optional Volunteer Program?

By Jennifer McMenomy

Make Sure it Complies with the Fair Labor Standards Act

Many employers understand the value of giving back to their communities and realize the benefit of visibility within their communities.  Thus, an increasing number of employers are following the new trend of implementing optional community service programs within their companies. In an employer-sponsored volunteer program, the employer allows employees to volunteer for a certain number of working hours each year or each month while providing the workers with the compensation they would have received for being on the job.  In some instances, employees may volunteer during non-working hours and still receive some type of monetary award. These can include bonuses or non-monetary awards such as a party or other fun outing or activity. 

In an employer-sponsored volunteer program of this nature, the employer may either sponsor a volunteer outing or outings in which employees can participate.  Alternatively, businesses may allow employees to participate in a volunteer activity they have chosen for themselves. Such a program can have a significant benefits for both employees and employers, including improved morale at the work place, increased involvement and contributions in the community, and visibility within the community. However, it is wise to be cautious in the implementation of a volunteer program within any business or workplace. 

A March 14, 2019 Opinion issued by the Wage and Hour Division of the United States Department of Labor addresses such programs and how they have the potential to violate the Fair Labor Standards Act (FLSA). The Opinion provides that “Congress did not intend for the FLSA ‘to discourage or impede volunteer activities,’ but rather to ‘prevent manipulation or abuse of minimum wage or overtime requirements through coercion or undue pressure upon individuals to ‘volunteer’ their services.’” 

As such, under the law, an employer intending to implement a volunteer program is permitted to notify its employees of such volunteer opportunities and activities as well as ask for assistance from employees in participating in such volunteering tasks.  An employer is also permitted to implement an incentive-based program so long as an employee’s participation in such a program is not mandatory.  An employer-sponsored volunteer program cannot adversely affect working conditions or employment prospects for employees whether they do or do not choose to participate.  In other words, an employer cannot engage in direct or implied retaliatory actions against an employee who chooses not to participate.  Further, the employer cannot put undue pressure on the employees to participate in the program. 

Moreover, the Opinion stated that an employer cannot “control or direct” the volunteer work of its employees. Specifically, an employer is not permitted to allow or disallow certain types of volunteer work and/or direct the employee on how to accomplish such volunteer work.  If the employer does “direct or control” the way in which an employee completes a volunteering task and/or volunteering activity, that time will be considered hours worked under the FLSA.  In turn, those hours are subject to the regulation of overtime and other standards under the FLSA. The Opinion also stated that employers may use certain methods of tracking the volunteer hours of its employees so long as the tracking device does not control or instruct the employee in their volunteerism.

The Opinion also states that compensating employees when they participate in volunteer activities during normal working hours does not “jeopardize their status as volunteers when they participate in volunteer activities outside of normal work hours.”

An employer may use an employee’s time volunteering as a factor in calculating whether to provide that employee with a bonus, “without incurring an obligation to treat that time as hours worked so long as: (1) volunteering is optional; (2) not volunteering will have no adverse effect on the employee’s working conditions or employment prospects; and (3) the employee is not guaranteed a bonus for volunteering.”  In essence, a bonus cannot be guaranteed to an employee who volunteers and/or taken away from an employee who does not volunteer.

Therefore, if an employer chooses to engage its employees by implementing a volunteer program, the employer must ensure that it is complying with the FLSA.  In order to do so, employers must ensure the following items are adhered to 1) employee volunteering is completely optional; 2) there are no adverse impacts or effects on employees who choose not to volunteer; 3) if an employer chooses to provide bonuses to employee-volunteers, that the bonus is not guaranteed in exchange for the employee’s volunteer hours; and 4) the employer does not direct or control the employee volunteer activities. 

Employer-sponsored volunteer programs are valuable tools that provide many benefits for companies, employees and communities alike. If you, as an employer, are considering implementing such programming, it is important to confer with legal counsel regarding the specifics of such a program to ensure compliance with the FLSA.

See the article at: NNBV.

The Right of Employees to Bring Lawsuits for Unpaid Wages:

What Every Business Should Know.

By Emilee Sutton

On December 7, 2017, the Nevada Supreme Court issued a decision settling a previously unanswered question under Nevada law that directly impacts Nevada employers; namely, whether employees have a private right of action against their employers to recover unpaid wages under Chapter 608 of the Nevada Revised Statutes.  The Court answered that question in the affirmative and clarified years of conflicting caselaw and ambiguity.

            Chapter 608 of the Nevada Revised Statutes governs the payment and collection of wages, as well as other benefits of employment.  Specifically, NRS 608.016 governs the failure to pay overtime wages, NRS 608.018 governs the failure to timely pay all wages due and owing, and NRS 608.020 through 608.050 govern payment upon termination.  In addition, NRS 608.180 specifically grants the Labor Commissioner power to enforce the professions described in NRS 608.005 to 608.195.  However, the wage and hour statutes are silent as to whether an employee has a private right of action to enforce their terms.

            Under Nevada law, if a statute does not expressly mention whether an individual may privately enforce one of its terms, an individual may only pursue his or her claims if a private right of action is implied.  In the case of Baldonado v. Wynn Las Vegas, LLC, the Nevada Supreme Court examined whether NRS 608.160, which prohibits employers from taking employee tips, implies a private cause of action to enforce its terms.  The court concluded that, “in light of the statutory scheme requiring the Labor Commissioner to enforce the labor statutes and the availability of an adequate administrative remedy for those statutes’ violations, the Legislature did not intend to create a parallel private remedy for NRS 608.160.”  Thus, the court found “appellants…failed to overcome the presumption that no private cause of action was intended.”  However, in a footnote, the Baldonado court opined, “a private cause of action to recover unpaid wages is entirely consistent with the express authority under NRS 608.140 to bring private actions for wages unpaid and due.”

            In relevant part, NRS 608.140 provides that “[w]henever an…employee shall have cause to bring suit for wages earned and due according to the terms of his or her employment, and shall establish by decision of the court or verdict of the jury that the amount for which he or she has brought suit is justly due,” the court shall allow the plaintiff to recover reasonable attorneys’ fees incurred for bringing suit, along with the amount found due for wages and penalties.  In light of the Baldonado footnote, employees bringing suit for unpaid wage claims against employers in district court attempted to bootstrap a private right to enforce other provisions of Chapter 608.

            The Baldonado footnote spawned significant discussion by courts and resulted in conflicting decisions.  For example, the United States District Court for the District of Nevada found that “§608.140 does not imply a private right of action to enforce the labor statutes…Instead, §608.140 implies a private right of action to recover in contract only.” 

In a separate case, the court also found, “NRS 608.140 does not create a vehicle for privately enforcing the legal rights conferred by the other provisions of Chapter 608; it merely establishes a fee-shifting mechanism in an employee’s ‘suit for wages earned and due according to the terms of his or her employment.’” 

             Nearly ten years after Baldonado was decided, the Nevada Supreme Court finally put the issue to rest when John Neville, Jr. filed a petition for a writ of mandamus challenging the district court’s dismissal of his NRS Chapter 608 wage claims on the basis that no private right of action exists.  Mr. Neville was employed as a cashier at a Las Vegas convenience store owned by Terrible Herbst, Inc.  Terrible Herbst enforces a time-rounding policy whereby it rounds the time recorded and worked by all hourly employees to the nearest 15 minutes for the purposes of calculating wages.  As a result of the time-rounding policy, Mr. Neville alleged he did not receive wages for work actually performed. 

            On appeal, the Nevada Supreme Court discussed the Baldonado footnote and found that NRS 608.140 demonstrates the Legislature’s intent to create a private cause of action for unpaid wages. The Nevada Supreme Court stated, “[i]t would be absurd to think that the Legislature intended a private cause of action to obtain attorney fees for an unpaid wages suit but no private cause of action to bring the suit itself.” Because Neville’s Chapter 608 claims involved allegations that wages were unpaid and due, and he tied his Chapter 608 claims with NRS 608.140, the Nevada Supreme Court found Neville properly stated a private cause of action for unpaid wages. 

             In light of the Nevada Supreme Court’s decision in the Neville case, there will likely be increased numbers of employees bringing civil lawsuits – including class actions – in Nevada courts for unpaid wages and attorneys’ fees.  Because of the unknown outstanding financial obligation to employees and the significant costs of litigation, it is crucial that Nevada employers comply with Nevada’s wage and hour requirements.  Employers are advised to consult with qualified legal counsel to ensure the adoption of policies and practices that comply with NRS Chapter 608.

See the article at NNBV.

Mandatory Arbitration Clauses Within Contracts

What They Are and How They Are Enforced!

by Jennifer McMenomy

In general, when parties enter into a contract, they do not contemplate potential legal disputes arising in the future. However, it is important for parties to outline how they will handle a contractual dispute if one does occur. Including an arbitration clause in a contract will help to eliminate some of the litigation costs and uncertainties that may transpire if a dispute over a contract should develop.

A mandatory arbitration clause is a provision contained within a contract that states that all legal disputes between the parties to the contract will be settled through the process of arbitration. Arbitration clauses are very common and can be found in various types of business contracts including: purchases for goods or services, employment contracts, construction contracts, etc.
Many sophisticated parties and businesses include a mandatory arbitration clause in their contracts because it enables them to settle legal disputes regarding the contract quickly, quietly and without the expense of litigation.

Arbitration is the process of settling a legal dispute between two or more parties using an impartial third person. Therefore, if a dispute arises regarding a provision of the contract that cannot be resolved between the parties themselves, the parties will present their issues to an arbitrator, or neutral third party, instead of through traditional litigation proceedings.

There are many professional arbitrators and organizations that parties may choose from. Some of these specialize in the specific area of the law or business issue. The selection process may be (but is not necessarily) specifically included within the language of the arbitration clause. Generally, the arbitration clause will outline who pays for the arbitration, whether each pays half of the cost of the arbitrator and their own attorney’s fees or whether the non-prevailing party pays these expenses.

Generally, an arbitration clause will state where the arbitration will take place and what law will govern the dispute, should one arise. For instance, if a contract is entered into in Nevada, the arbitration clause will likely state that the contract dispute must be arbitrated in Nevada. It is very important to include within the mandatory arbitration clause, the state and/or location of where the arbitration must take place and the governing law within the arbitration clause to avoid confusion and conflict.

If there is not a specific provision within the contract regarding which law applies, then depending on the nature of the contract, the arbitration clause may be governed under federal or state law. The Federal Arbitration Act (FAA) governs agreements where the contract involves a transaction that crosses state lines, also known as “affecting interstate commerce.”
If the contract does not deal with interstate commerce, then state law will apply. There are several factors to take into consideration when determining exactly which state law applies; however, for the purposes of this article, it is assumed that Nevada law will apply to the arbitration clause.

If the arbitration provision in the contract is governed by Nevada law, there are some specific requirements that must be met before the provision is enforceable. Nevada Revised Statutes (NRS) Chapter 38 governs arbitration provisions within contracts. In Nevada, arbitration agreements between parties to a contract are favored as a matter of public policy because they allow for judicial economy and ease the burden of the courts.

While arbitration agreements are favored, Nevada law sets a higher standard of enforcement for arbitration clauses contained within contracts than most states and the FAA. NRS 597.995(1) requires “specific authorization” of the arbitration clause by each of the parties to the contract.

If “specific authorization” is not provided by the parties, it can render the arbitration clause void and unenforceable. If a mandatory arbitration clause is found to be unenforceable or void, a party can choose to litigate the dispute through the court system and is no longer bound by the contract to arbitrate its claims.

While the statute does not expressly state what “specific authorization” means, the Nevada Supreme Court has given some idea of what constitutes specific authorization under NRS 597.995(1). In Fat Hat, LLC v. DiTerlizzi (2016), the Court found that a signature of a party to the contract on the general signature line at the end of the contract did not meet the specific authorization requirement.

The Court found that, even though the arbitration agreement contained within the contract was right above the signature line, it did not constitute specific authorization. While this case is unpublished and therefore is not controlling in future cases, it may be persuasive as to how a court will view the statutory specific authorization requirement.

To ensure that Nevada’s specific authorization requirement is met, it is important that an agreement includes an additional signature or initial line directly below the arbitration clause to ensure that each party assents to the arbitration clause. By including an additional signature or initial line to the arbitration provision the “specific authorization” requirement will likely be met and ensure that the arbitration clause within the contract is enforceable.

  1. The take away…in order to ensure that an arbitration provision is enforceable, the contract must include the following:
  2. The arbitrator or group identified to arbitrate the dispute;
  3. Who will pay for the legal and arbitrator fees;
  4. The governing law that is to apply to the contractual dispute;
    A signature or initial line set apart from and directly below the arbitration provision to ensure that the “specific authorization requirement is met.”

It is recommended that you seek the assistance of knowledgeable legal counsel in developing and reviewing these clauses in order to protect the future of your business dealings should a conflict arise.

See the article at: Northern Nevada Business View.

Emilee N. Sutton Joins Allison MacKenzie law firm as Associate Attorney

Allison MacKenzie Law Firm is pleased to welcome their newest associate attorney, Emilee N. Sutton. Emilee joined the firm on August 27, 2018 and will focus her practice on Administrative Law, Business Law, Probate, and Litigation. She is a former law clerk for the Honorable Lynne K. Simons at the Second Judicial District Court in Reno, and extern to the Honorable Howard D. McKibben, U.S. District Court, District of Nevada.

A California native, Emilee double majored in political science and history at the University of California in San Diego. Upon graduation she obtained her law degree from the University of Texas School of Law in 2017. She was admitted to practice in Nevada and the U.S. District Court, District of Nevada in 2017.

“Allison MacKenzie Law Firm is highly regarded by legal professionals throughout Nevada. Their professionalism and commitment to the community is unsurpassed. I couldn’t be prouder of my new position with such a well-respected and community-minded law firm,” Emilee commented.

Emilee was exposed to legal proceedings as a young child and was intrigued by the processes and complexities of the law. Emilee’s mother was a court reporter in Southern California, and it was here that Emilee “grew up.” She spent many days after school and during summer vacations watching court proceedings, learning from judges, and helping her mother prepare and proofread transcripts. Emilee is enthusiastic to embark on her legal career counseling clients and finding them effective solutions.
Emilee resides in Reno with her fiancé, Mitchell, and future step-son, Austin. The family recently adopted a chocolate lab named Murphy and are very busy with puppy and little-person duties. A former surfer and baseball aficionado, Emilee is looking forward to experiencing Northern Nevada’s fantastic outdoor activities.

The talented legal team of Allison MacKenzie is pleased to welcome Emilee to the organization. The firm is confident she will provide exceptional and compassionate service to clients.

Understanding the Impact of “Rule of Law” on Nevada Businesses

Joel W. Locke Gets the Latest at the Nevada State Bar Annual Meeting

Joel W. Locke, attorney with Allison MacKenzie Law Firm in Carson City, Nevada

Carson City attorney, Joel W. Locke, a partner at Allison MacKenzie Law Firm pens short series on “The Rule of Law” to help educate Nevada businesses on its impact. Locke recently attended the State Bar of Nevada Annual Meeting in Chicago, IL. The three-day event was held at the Drake Hotel on July 12th thru 14th, 2018. The meeting’s theme was “The Rule of Law” and focused on the discussion of how the legal profession has helped shape the rule in our country’s history, and its role in the future.

The annual meeting provides attorneys with insight into recent developments in law and the legal profession as well as providing a unique opportunity for attorneys to interact with expert judicial figures. One of the goals of this year’s conference was to celebrate and educate the attendees on the role that lawyers have in supporting the “Rule of Law.”

Locke’s inaugural article, The Rule of Law – Part I, was released on July 23rd, 2018 and can be found at: AllisonMacKenzie.com. Part I explores the famed McDonald’s spilled coffee case and includes a video by guest speaker, Susan Saladoff. Additional articles will be released in the upcoming weeks.

“The State Bar of Nevada’s Annual Meeting is an excellent event where I am able to further my knowledge of pressing legal issues facing my clientele as well as enjoy informative lectures and engaging discussions with renowned, high-profile speakers from across the country. Additionally, it is a unique opportunity to network with preeminent attorneys and to meet many judges from across Nevada.” Joel W. Locke stated.

Joel W. Locke joined Allison MacKenzie in 2007. A native Nevadan, Locke graduated from the University of Nevada, Reno in 2000, and then obtained his law degree from Gonzaga University School of Law in 2006. Subsequently, he was admitted to practice law in the State of Nevada in 2006. Joel’s areas of legal practice include: Family Law, Probate Law, Guardianships, Healthcare Law and more.

The Rule of Law – Part I

Joel W. Locke, attorney with Allison MacKenzie Law Firm in Carson City, Nevada

The Rule of Law – 2018 Annual Meeting of the State Bar of Nevada

By Joel W. Locke

Each summer, the State Bar of Nevada holds an Annual Meeting of its membership, which is comprised of Nevada licensed attorneys and members of the judiciary. The meeting offers attendees a dynamic environment of continuing legal education and networking opportunities. This year’s meeting was held on July 12-14 in the beautiful and exciting city of Chicago, and the theme of the meeting was “The Rule of Law.” One of the goals of the conference was to celebrate and educate the attendees on the role that lawyers have in supporting the Rule of Law.

I was honored to introduce one of the speakers, Susan Saladoff. Ms. Saladoff is the director, writer, and producer of the HBO Documentary hit, “Hot Coffee! Is Justice Being Served?” which premiered at the 2011 Sundance Film Festival. Ms. Saladoff is a former trial lawyer, and during her presentation, she shared her journey of making the film, how it was received, and what has happened since the film was released. She also appeared on The Colbert Report to discuss the film, as can be seen here: CC.com

 

The documentary is the “true story” behind the famous McDonald’s spilled hot coffee case, the news of which swept the nation at the time. While many think they know the facts behind the case (which resulted in a jury award of almost $3 million), most probably do not realize that many American companies in various industries spent millions of dollars distorting the facts of the case in order to protect against large awards in the future and to limit an individual’s access to the courts.

Ms. Saladoff’s film tells the actual facts behind the case and follows four individuals whose lives were devastated by the results of the attacks on an individual’s access to the courts. Further, Ms. Saladoff’s film challenges the assumptions that many Americans hold about “jackpot justice.”

Ms. Saladoff’s presentation was impassioned, funny, and engaging. Amazingly, only 20% of the audience had seen her documentary, which is available online and on HBO. A screening of her film followed her lecture and was well-attended. I urge you to watch her film and contrast the news media’s coverage of the case with the truth. It is startling.

Ms. Saladoff is hard at work on her next big “yet to be revealed” project. With the passion and force she puts into her work, I am sure it will be a thought provoking and entertaining success.

Records Retention and the Future of Your Business

Understanding the Legality of Digital Data Storage in Nevada

Societal attitudes toward digital information have dramatically changed over the last decade, and continue to change. This change was succinctly demonstrated in an exchange I recently overheard:

Q: “Do you have a hard copy of that document?”
A: “Yeah, I have a PDF.”

How many emails are in your mailbox right now? Not just unread ones, all of them, including the ones in your Sent folder. Multiply that by the number of employees, and you can see that the volume of electronic records your business is accumulating quickly becomes staggering.

Word files, spreadsheets, emails, texts, and instant messages now dominate our work and our communications. Billions of electronic records can be inexpensively stored on a device that fits in your pocket. As the cost of data storage declines, the number of records that are being stored indefinitely continues to soar.

All of these electronic files or records are treated by the courts exactly the same as good old-fashioned paper documents. That means that if your business is sued, it must not only retain those electronic records, but it will very likely have to produce a great number of them to the opposing party. “Electronically stored information,” or ESI, includes all forms of electronic data that is relevant or potentially relevant to the lawsuit. This means word processing files, databases, emails, and even the text messages on your phone.

Does your business have the capability to reliably gather all of those records, review them, and produce them in a lawsuit? Litigation is already expensive, but the sheer volume of these documents has caused the cost of litigation to skyrocket because of the difficulty that is often involved in finding, reviewing and producing such a large number of records.

 

See the complete article at: Northern Nevada Business Weekly.

Kevin Benson is an associate with Allison MacKenzie Law firm with primary focus in the areas of civil litigation, appeals, administrative and regulatory matters, election law, and ballot measures. He is a native Nevadan and former Senior Deputy Attorney General for the state.

Interstate Regulations Can Hit Lax Taxi, Bus, even Uber drivers

By:  Justin Townsend

Justin is an associate with Allison MacKenzie Law Firm with primary practice in Business Law, Real Estate Law, Transportation Law, Commercial Transactions and Energy Law.

You can’t talk about the leading industries in Nevada without mentioning tourism and gaming. However, there are a number of ancillary industries in the state that offer critical support to Nevada’s thriving tourist trade. One such industry is transportation, much of which is generally regulated by the Nevada Transportation Authority, which was formed for the purpose of regulating and licensing motor carriers operating in the state. A motor carrier is any vehicle operating on the roads of Nevada for the purpose of transporting persons or property — anything from a taxi, to a limousine service, to tour bus operators, and even tow cars.

For obvious reasons, many key gaming and important tourist spots in Nevada are located near borders of other states — spots like Lake Tahoe and Reno on and near the Northern California border, Wendover on the Utah border, and Las Vegas near the borders of Utah, Arizona, and Southern California. Much of the Nevada transportation industry revolves around transporting tourists in and to these locations.

Commercial motor carriers who transport passengers in these border spots often have to deal with more than just NTA regulations. They may have to contend with neighboring state transportation agencies or even with federal agency regulations. Problems can and do arise for these carriers when they cross borders and inevitably have to navigate state and federal transportation agencies and potentially conflicting laws and regulations.

For instance, a limousine might be chartered to pick up a group of bachelor partygoers from Reno-Tahoe International Airport, take them to check in to their hotel in South Lake Tahoe, California, and then bring them to a casino just across the border in Stateline, Nevada.

The NTA employs several investigating officers with authority to detain commercial motor carriers on the road to ensure compliance with NTA regulations, which include requirements that such vehicles be marked with approved names and operating license numbers and that drivers carry NTA driving permits and medical cards. Like police officers, NTA investigators are authorized to issue citations to commercial drivers who fail to comply with applicable regulations.

In the previously mentioned South Lake Tahoe example, let’s say the limousine was based out of California and does not have authority to operate in Nevada. In such a case, an NTA investigator might notice that the vehicle does not contain the markings required by NTA regulations and might stop the driver after he has dropped the passengers at the casino in Stateline. A citation is issued for the lack of required markings and, perhaps, for the driver’s failure to carry an NTA driving permit.The owners of the California-based limousine would need to hire a Nevada attorney to represent them before the NTA and assist with getting the citations dismissed. Why? Because the limousine was operating in what is known as interstate commerce. However, the NTA is only authorized to regulate intrastate transportation — trips that occur entirely within the State of Nevada.

On the other hand, federal law provides that the federal government has jurisdiction over transportation of passengers between one state and another state or between two places in one state if such travel passes through another state at any point. Federal law trumps state law in such a case and the NTA citations must be dismissed.

Similar issues might arise in any number of different scenarios. Consider a tour bus operating between the Las Vegas strip and the Grand Canyon in Arizona or an Uber driver transporting a tourist from Wendover, Utah, to West Wendover. In all such cases, the lines often become blurred between Nevada and federal laws, which just might result in an NTA citation for one reason or another. When these or other transportation matters occur, transportation entities should consult with competent legal counsel that is experienced in transportation law to assist with the NTA and to obtain a just and fair result under whichever law applies. Understand your rights and responsibilities when it comes to federal and state transportation laws.

See the article at: Northern Nevada Business Weekly