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Employment Matters Blog

U.S. Department of Labor Re-Proposes Rules Governing the Definition of “Fiduciary”—Part 3: The Impact on Large Retirement Plans

Posted in DOL, Employee Benefits, IRS

In Part 1 of this series, we reported on recently proposed regulations issued by the U.S. Department of Labor amending the definition of the term “fiduciary” under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code (the “Code”). Part 2 of the series covered a key feature of the Department’s proposed regulatory scheme—the “Best Interest Contract” Exemption—that allows advisers to small retirement plans and IRA investors to receive commission-based compensation without triggering a fiduciary breach or incurring excise tax exposure under rules governing prohibited transactions. This post focuses on the proposal’s impact on large plans, i.e., plans with more than 100 participants or more than $100 million in assets.

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Duty to Monitor Investments Extends Statute of Limitations for Fiduciary Breach Claim Says Supreme Court

Posted in Employee Benefits, Supreme Court

The Supreme Court has decided an important statute of limitations issue in an ongoing fiduciary breach case, Tibble v. Edison InternationalTibble has attracted attention up to this point for its substantive claim: that plan fiduciaries breached their duty of prudence when they failed to use the plan’s status as an institutional investor to gain an edge on fund fees.  Instead of offering lower-cost institutional-class mutual funds, which were available to the plan because of its pooled investment resources, the plan fiduciaries in Tibble offered 401(k) plan participants the option of investing only in retail-class funds, with higher fees and expenses that were passed on to participants.

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Lowering the Bar: Fourth Circuit Rules Single Incident Sufficient to Trigger Title VII Hostile Work Environment Claim

Posted in discrimination, employer liability, harassment, Supreme Court, Title VII

Out with the old and in with the new.  In a decision issued last week, the 4th Circuit Court of Appeals held that a single incident of harassment was sufficient to move a harassment claim forward.  This decision is certainly a win for employee-plaintiffs, and marks a stark departure from the state of the law in the Fourth Circuit for the past decade.

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Surprise! You Get to Arbitrate! Massachusetts Courts Continue to Permit Third Parties to Enforce Arbitration Agreements

Posted in Arbitration, Massachusetts, Massachusetts Supreme Judicial Court, Non-compete

Written by Jane Haviland with Bret Cohen

Two Massachusetts decisions—including one from the state’s highest court—applied the same standard regarding enforcement of an agreement to arbitrate.  In each case, plaintiffs signed arbitration agreements with another party.  Others that were not a party to and did not therefore sign those agreements sought the protections of the arbitration provision, and the courts required the plaintiffs in both instances to arbitrate their claims even against the non-signatory defendants.  We briefly discuss these cases and the takeaways below.

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Employer’s Use of DNA Test to Catch Employee Engaging in Inappropriate Workplace Behavior Violates Federal Law, Says U.S. District Judge

Posted in discrimination, EEOC, Employee Privacy, investigations, Privacy

If someone continually, yet anonymously, defecated on the floor of your workplace, you’d probably want to use any and all legal means at your disposal to identify and discipline the perpetrator.  Your methods might include surveillance or perhaps some form of forensic or other testing to link the offensive conduct to a specific individual.  You would probably not be overly concerned that your efforts to rid the workplace of this malefactor might give rise to a discrimination claim, but is that really a safe assumption?

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NLRB Holds Firm on its View that Class/Collective Action Waivers in Arbitration Agreements Violate the NLRA

Posted in Arbitration, class action, Collective Action, NLRB, Supreme Court, Traditional Labor

Despite overwhelming judicial disapproval, the NLRB simply will not relent in its view that mandatory arbitration agreements containing class/collective action waivers violate the National Labor Relations Act.

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Quick Update on the Obama Administration’s Efforts to Update the FLSA White Collar Exemptions

Posted in DOL, FLSA, minimum wage and overtime, Wage and Hour

As has been widely reported, President Obama has ordered the US Department of Labor to updated existing federal regulations on overtime in order to account for the changing nature of the workplace and to allow both workers and businesses to better understand and apply the exemptions..  Reports have centered on the expectation that the updated regulations will, in part, increase the salary basis requirement, which will in effect allow millions of workers to qualify for time and half pay for the first time.  Today, only 12% of salaried workers fall below the current threshold whereas it was as high as 65% back in 1975.

The administration had signaled that the proposed regulations would be ready in February.  That obviously hasn’t happened.  And just to give you a quick update, we have now learned that the administration has first submitted its proposed regulations to the Office of Management and Budget for review.  That Office typically has 90 days in which to review a proposed regulation, and it is also permitted one 30-day extension.  So it could be some time before the administration releases the proposed regulations to the public.  But they are coming and we will certainly let you know when they do.

Mach Mining, LLC v. EEOC: Supreme Court Holds EEOC Conciliation Efforts Are Subject to Limited Judicial Review

Posted in discrimination, EEOC, Supreme Court, Title VII

In a unanimous decision, the Supreme Court said that conciliation efforts by the Equal Employment Opportunity Commission are subject to limited judicial review.  Justice Kagan authored the decision in Mach Mining, LLC v. EEOC, which resolved a circuit spilt over: (1) whether judicial review of EEOC conciliation efforts was permitted and (2) if so, the scope of this judicial review.  This post will briefly summarize the background of the case, examine the Court’s analysis and conclusions, and then offer some employer takeaways.

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