What’s a financial advisor to do? On March 15, 2018, the Fifth Circuit Court of Appeals in Chamber of Commerce of the U.S. v. U.S. Dep’t. of Labor, No. 17-10238, 2018 U.S. App. LEXIS 6472 (5th Cir. Mar. 15, 2018) vacated – thereby invalidating – a series of seven rules (which we collectively refer to in this post as the “fiduciary rule”) issued in April 2016 by the Department of Labor (DOL). The fiduciary rule vastly expanded the reach of the ERISA fiduciary standards that apply to individuals and entities providing investment advice. This post first explains the state of the law prior to the fiduciary rule; it then discusses the impact of the rule on the arguments that the Court grappled with; and it concludes by handicapping the options available to regulated financial advisors and institutions as they endeavor to respond.
Written by Brendan Lowd
Just before Thanksgiving, a Texas federal court judge issued an injunction blocking the closely-watched new federal overtime rule from taking effect as scheduled on December 1, 2016. As expected, the DOL is not going quietly into the night and the parties have engaged in a flurry of court filings as the fight, at least in part, concerning whether the new rule is lawful shifts to the United States Court of Appeals for the Fifth Circuit.
The Fifth Circuit recently held that a third party witness who was fired after providing information in response to her employer’s investigation of a coworker’s harassment allegations had to demonstrate she had a “reasonable belief” that the conduct she reported violated Title VII in order to prove her retaliation claim.
The Fifth Circuit recently sided with an employer in an off-the-clock overtime case where the employee failed to comply with her employer’s overtime approval and reporting policies. For employers, this decision highlights the importance of implementing overtime authorization and reporting policies to defeat these claims.
The battle between the NLRB and the Fifth Circuit rages on, as the Fifth Circuit again ruled that employers do not violate the National Labor Relations Act when they require employees to sign arbitration agreements containing class/collective action waivers.
While the Dodd-Frank Act provides various protections to whistleblowers, federal courts have inconsistently interpreted who precisely qualifies as a whistleblower. In a much-anticipated opinion, the Second Circuit Court of Appeals held, in Berman v. Neo@Ogilvy LLC, that whistleblowers who report wrongdoing internally – but not to the Securities and Exchange Commission – are protected from retaliation under the law.
A Federal Appeals Court recently confirmed that under certain circumstances, parties may privately settle and release claims under the Fair Labor Standards Act. A generic release contained in a settlement agreement won’t do it; instead, the parties must cite to a bona fide dispute regarding wages in the settlement agreement. But this decision extends only to the borders of the Fifth Circuit, which encompasses Texas, Louisiana and Mississippi. Most other circuit courts would not enforce such releases unless they were the product of an agreement supervised by a court or the Department of Labor.
Written by Brent Douglas
In its Murphy Oil decision, the National Labor Relations Board affirmed its 2012 holding in D. R. Horton, which found an employer violates the NLRA when it requires employees “as condition of their employment, to sign an agreement that precludes them from filing joint, class, or collective claims addressing their wages, hours, or other working conditions against the employer.” Employment attorneys were waiting to see how the NLRB would react to the Fifth Circuit Court of Appeals’ reversal of its 2012 D. R. Horton decision. Unpersuaded, the Board indicated it “independently reexamined” D. R. Horton and concluded: “Today we reaffirm that decision.”