Employment Law

By Robert Rosenthal, Esq. and Jay Young, Esq.

Employers, do your zero drug tolerance policies allow you to discipline an employee for using marijuana if the employee is legally using medical marijuana in Nevada?  The answer may surprise you.

A recent federal court held that just because marijuana is illegal under federal law does not bar a discrimination claim by an employee based on conduct protected by state medical marijuana laws.  In other words, discipline your employees with caution.

Nevada’s law goes even farther.  Here, even though an employer does not have to permit an employee to use marijuana in the workplace, it is required to accommodate an employee’s need for medical (not recreational) marijuana.

NRS 453A.800  Costs associated with medical use of marijuana not required to be paid or reimbursed; medical use of marijuana not required to be allowed in workplace; medical needs of employee who engages in medical use of marijuana to be accommodated by employer, other than law enforcement agency, in certain circumstances.  The provisions of this chapter do not:

  1. Require an insurer, organization for managed care or any person or entity who provides coverage for a medical or health care service to pay for or reimburse a person for costs associated with the medical use of marijuana.
  2. Require any employer to allow the medical use of marijuana in the workplace.
  3. Except as otherwise provided in subsection 4, require an employer to modify the job or working conditions of a person who engages in the medical use of marijuana that are based upon the reasonable business purposes of the employer but the employer must attempt to make reasonable accommodations for the medical needs of an employee who engages in the medical use of marijuana if the employee holds a valid registry identification card, provided that such reasonable accommodation would not:

(a) Pose a threat of harm or danger to persons or property or impose an undue hardship on the employer; or

(b)  Prohibit the employee from fulfilling any and all of his or her job responsibilities.

The statute has quite a few inherent problems, including:

  1. It does not define “employee.” Therefore, employers cannot be sure whether it applies to only current employees or whether it also applies to applicants;
  2. Second, there is no enforcement mechanism for the statute, leaving an employer unable to predict liability and an employee without a way to challenge an employer’s failure to meet the statute’s requirements;
  3. In requiring an employer to accommodate the need for medical marijuana, the statute ventured well beyond any mandate imposed by Article 4, Section 38 of the Nevada Constitution; and
  4. The statute provides two different accommodation standards by first stating that an employer does not need to modify those “job or working conditions” that are “based upon the reasonable business purposes  of the employer,” and then stating that an accommodation is not reasonable if it would prohibit an employee from fulfilling any and all job responsibilities.

To our knowledge, this statute has not been tested by the courts.  That leaves this area a minefield for the unwary.  If you have an employee who is eligible for medical marijuana, contact an employment attorney to discuss your options before disciplining for marijuana use.

How Does a Party Prosecute an Action for Misappropriation of Trade Secrets?

NRS 600A.030(2) defines “misappropriation” as:

(a) Acquisition of the trade secret of another by a person by improper means;

(b) Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or

(c) Disclosure or use of a trade secret of another without express or implied consent by a person who:

(1)  Used improper means to acquire knowledge of the trade secret;

(2)  At the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was:

(I) Derived from or through a person who had used improper means to acquire it;

(II)  Acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or

(III)  Derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or

(3)  Before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

NRS 600A.040 provides injunctive relief for the actual or threatened misappropriation of trade secrets, stating;

  1. Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction must be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time to eliminate commercial or other advantage that otherwise would be derived from the misappropriation.

* * *

  1. In appropriate circumstances, the court may order affirmative acts to protect a trade secret. As used in this subsection, “affirmative acts” includes, without limitation, issuing an injunction or order requiring that a trade secret which has been misappropriated and posted, displayed or otherwise disseminated on the Internet be removed from the Internet immediately.

In Frantz, the Nevada Supreme Court found misappropriation of trade secrets based on the fact that: (l) lists containing information were missing after the former employee left the job; (2) the former employee contacted the plaintiff’s customers to offer “more competitive pricing;” and (3) the former employee’s phone records and other evidence indicated calls to plaintiff’s customers.  As a result, the former employee was liable for misappropriation of trade secrets.   The Court further found that the competitor had misappropriated trade secrets when the competitor hired the former employee, announced that competitor intended to compete against plaintiff by taking all of plaintiff’s customers, and the competitor hired employees from other competitive companies and asked them to use their knowledge about their former employers’ pricing structure and customer base.  Id.

To prove misappropriation under NUTSA, a plaintiff must plead and prove: (1) the existence of a valuable trade secret as defined by the statute; (2) misappropriation through use, disclosure, or nondisclosure of use of the trade secret; and (3) the misappropriation was wrongful because it was made in breach of an express or implied contract or by a party with a duty not to disclose.  Frantz, 116 Nev. at 466, 999 P.2d at 358.  The Court has wide discretion in calculating damages, subject only to a review for abuse of discretion.  Id. (citing Diamond Enters., Inc. v. Lau, 113 Nev. 1376, 1379, 951 P.2d 73, 74 (1997) (citations omitted)).

N.R.S. CHAPTER 33 – INJUNCTIONS

GENERAL PROVISIONS

NRS 33.010             Cases in which injunction may be granted.

NRS 33.015             Injunction to restrain unlawful act against witness or victim of crime.

NRS CHAPTER 32 – RECEIVERS

NRS 32.010             Cases in which receiver may be appointed.

NRS 32.015             Additional cases in which receiver may be appointed.

NRS 32.020             Reversion and disposition of unclaimed dividends in receivership.

Nevada Jury Instructions

NEV. J.I. 1.0               DUTY OF JUDGE AND JURY
NEV. J.I. 1.01             USE OF INSTRUCTIONS
NEV. J.I. 1.02            MASCULINE FORM OF PRONOUN INCLUDES FEMININE OR CORPORATION
NEV. J.I.1.03             WHAT IS AND WHAT IS NOT EVIDENCE  (more…)

In WPH Architecture, Inc. v. Vegas VP, __ P.3d __, 131 Adv. Op. 88 (Nev. Nov. 5, 2015), the Nevada Supreme Court held that Rule 68 Offers of Judgment, together with statutes allowing offers of judgment in Nevada “are substantive laws that apply to the arbitration proceedings in the current case.”  In this case, the contract between the litigants required arbitration of any disputes pursuant to the American Arbitration Association’s Construction Arbitration Rules, and applying Nevada substantive law.  Prior to arbitration, the claimant made a statutory and Rule 68 offer of judgment.  The respondent rejected the offer of judgment, then lost at arbitration.

(more…)

Nevada Revised Statutes, NRS 38.209  “Arbitrator” defined.  “Arbitrator” means an individual appointed to render an award, alone or with others, in a controversy that is subject to an agreement to arbitrate.

(Added to NRS by 2001, 1274)

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EMPLOYMENT DISCRIMINATION AND WRONGFUL TERMINATION

In Nevada, the elements for a claim of retaliatory discharge (sometimes called employment discrimination, wrongful discharge, or tortious discharge) are:

  1. Employee engaged in protected activity while employed (such as filing a discrimination charge or opposing unlawful employer practices);
  2. Employee suffered an adverse employment action by the employer;
  3. The protected activity was a motivating factor in the adverse employment action;
  4. Causation and damages; and
  5. Punitive damages.

Burlington N. v. White, 126 S. Ct. 2405 (2006); Steiner v. Showboat Operating Co., 25 F.3d 1459, 1464 (9th Cir. 1994); Allum v. Valley Bank of Nevada, 114 Nev. 1313, 970 P.2d 1062, 1066 (1998); D’Angelo v. Gardner, 107 Nev.704, 819 P.2d 206, 212 (1991); Hansen v. Harrah’s, 100 Nev. 60, 675 P.2d 394 (1984); 42 U.S.C. § 2000e-3(a).

 

See elements for other claims at the Nevada Law Library

Jay Young, Nevada Business Attorney and Arbitrator

Jay Young is a Las Vegas, Nevada Arbitrator, Mediator, and Supreme Court Settlement Judge

For downloadable pdf of this article, click here.

Many of the complaints that I hear from litigators about arbitration could be resolved if the arbitration clause which forced the parties into litigation were written better.  Arbitrations are, of course, a creature of contract.[1]  Therefore, the parties’ arbitration agreement[2] is often the beginning and end of the arbitrator’s authority.[3]  The arbitrator is bound to give effect to the contractual rights and expectations of the parties “in accordance with the terms of the agreement.”[4]  In fact, although the Federal Arbitration Act presumes that arbitration awards will be confirmed except upon a few narrow circumstances,[5] the arbitrator who acts beyond the scope of the authority found in the parties’ arbitration clause risks having the award vacated.[6]  So, if you want the arbitrator to behave differently, write a better arbitration agreement.  (more…)

In Nevada, the elements for a claim of bad faith discharge, tortious discharge, or wrongful discharge, are:

  1.  Enforceable contract of employment (even for an indefinite period of future employment);
  2. Special relationship between the tortfeasor and the tort victim (i.e., a relationship of trust and special reliance);
  3. Employer acts in bad faith; conduct must go well beyond the bounds of ordinary liability for breach of contract;
  4. Causation and damages; and
  5. Punitive damages.

Martin v. Sears, Roebuck and Co., 111 Nev. 923, 899 P.2d 551 (1995); Shoen v. Amerco, Inc., 111 Nev. 735, 896 P.2d 469 (1995); D’Angelo v. Gardner, 107 Nev. 704, 819 P.2d 206 (1991); Kmart v. Ponsock, 103 Nev. 39, 732 P.2d 1364 (1987).

 

See elements for other claims at the Nevada Law Library

The following are actual client reviews found on Avvo, Google, Yelp, and Facebook for Jay Young


New Business Setup 5.0 stars

Posted by Kristina

Jay Young is an outstanding attorney. He is very informative and takes time out to teach his clients. I recently changed the legal structure of my business. Jay took the time to assess my business and gave me his recommendation. I was very pleased with his team. I definitely recommend using an attorney for any business set up. Jay is prompt, kind, and such a pleasure to work with.

(more…)

In Nevada, the elements for a claim of negligent hiring, retention, and supervision are:

  1. Employer had a duty to protect plaintiff from harm resulting from its employment of the tortfeasor;
  2. Employer breached that duty by hiring, retaining, failing to train, supervise, or discipline the tortfeasor;
  3. Proximate cause; and
  4. Causation and damages.

Nurse v. U.S., 226 F.3d 99 (9th Cir. 2000); Blanck v. Hager, 360 F. Supp. 2d 137, 157 (2005); Goodrich and Pennington Mortgage Fund, Inc. v. RJ Woolard, Inc., 120 Nev. 777 (2004);  Rockwell v. Sun Harbor Budget Suites, 112 Nev. 1217, 1226-27, 925 P.2d 175, 1181 (1996); Harrigan v. City of Reno, 86 Nev. 678, 475 P.2d 94 (Nev. 1970); Amen v. Mercede Cty. Title Co., 58 Cal. 2d 528 (1962); Rianda v. Sand Benito Title Guar. Co., 35 Cal. 2d 170 (1950).

 

See elements for other claims at the Nevada Law Library

It is an unlawful employment practice for an employer to discriminate against any person with respect to the person’s compensation, terms, conditions or privileges of employment because of race, color, religion, sec, sexual orientation, gender identity or expression, age (40 and older), disability or national origin.

Dennis v. Nevada, 282 F. Supp. 2d 1177, at 1181 (D. Nev. 2003); Switzer v. Rivera, 174 F. Supp. 2d 1097 (D. Nev. 2001); Wolber v. Service Corp. Int’l, 612 F. Supp. 235 (D. Nev. 1985).

Under federal law, companies with 15 or more employees are covered by Title VII of the Civil Rights Act of 1964, the primary law prohibiting employment discrimination, the Americans with Disabilities Act, which prohibits discrimination on the basis of disability, and the Genetic Information Nondiscrimination Act, which prohibits discrimination based on genetic information. Companies with 20 or more employees are subject to the Age Discrimination in Employment Act (ADEA), the federal law that prohibits discrimination against employees 40 years or older. Companies with four or more employees must comply with the employment discrimination provisions of the Immigration Reform and Control Act, which prohibits discrimination on the basis of citizenship status. And all companies of any size must pay men and women equally for doing equal work, by virtue of the Equal Pay Act.  In Nevada, companies with 15 or more employees are subject to the state’s antidiscrimination law.

 

See elements for other claims at the Nevada Law Library

Are They Employees or Independent Contractors?

Are They Employees or Independent Contractors?

With challenges to the economy, companies are looking for every way possible to save money. A potential risk for employers is to mischaracterize an employee as an independent contractor, which may save payroll taxes in the short term but may lead to penalties on such taxes as well as other inadvertent violations of worker’s compensation laws, FMLA, etc, which each hold separate penalties for violation.

There are also state law implications, which vary by state so you may want to consult an attorney in your particular state as to that state’s definitions. Focusing purely on federal issues, the IRS previously had a 20-part test to evaluate whether a worker is an employee or independent contractor.

However, the new and improved IRS test focuses on three areas: (1) behavioral control, (2) financial control, and (3) the type of relationship.

1.  Behavior control addresses the amount of instruction given to a worker, such as work hours, specific job duties, and training.

2.  Financial control addresses the extent to which a worker can realize a profit or loss or seek reimbursement of business expenses.

3.  The third type of control is the type of relationship. Factors include the presence or absence of a written agreement and the permanency of the relationship.

Call today to speak with someone in our employment law department representing businesses and business owners and can answer specific questions in more detail concerning your business. They can also document employment agreements or properly document independent contractor agreements should the workers qualify as independent contractors.

 

How healthy is your business? Are you SURE? Take a free Legal Checkup today at www.alegalcheckup.com

 

In Nevada, the elements for a claim of constructive discharge (also known sometimes as tortious discharge) are:

  1. The employee’s resignation was induced by actions and working conditions by the employer which are so intolerable as to amount to firing despite a lack of termination. The actions of the employer violate public policy;
  2. Objectively difficult or unpleasant working conditions to the extent that a reasonable employee would feel compelled to resign;
  3. The employer had actual or constructive knowledge of the intolerable actions and their impact on the employee;
  4. The situation could have been remedied; and
  5. Causation and damages.

Dillard Dept. Stores, Inc. v. Beckwith, 115 Nev. 372, 376, 989 P.2d 882 (1999); Martin v. Sears Roebuck & Co., 111 Nev. 923, 899 P.2d 551 (1995).

 

See elements for other claims at the Nevada Law Library

11071126154_db6bcd405a_b

In Nevada, the elements for a claim trademark infringement are:

  1. Plaintiff has a valid, protectable symbol or name described as:______ (the “Mark”);
  2. Plaintiff owns the Mark as a trademark;
  3. Defendant used the Mark in commerce in connection with the sale or advertising of goods or services without the consent of the plaintiff in a manner that is likely to cause confusion among ordinary consumers as to the source, sponsorship, affiliation, or approval of the goods; and
  4. Causation and damages.

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business_finance_money_usd

By: Michael R. Lied, guest blogger

Employers everywhere are seeking ways to understand the U.S. Department of Labor’s proposed changes to overtime regulations under the Fair Labor Standards Act (FLSA) announced this week. The revisions could impact millions of workers and businesses large and small when the final ruling possibly becomes effective next year. This article attempts to address how the proposed changes would impact businesses.

While the statute, regulations, and court interpretations of the Fair Labor Standards Act (“FLSA”) are complex, there are some basic principles.  Generally, employees must be paid at least the applicable minimum wage for all hours worked; in some states, the minimum wage is currently greater than the federal minimum wage.  There are a number of exemptions in the Fair Labor Standards Act, including for certain types of businesses, and certain employees.

The so called “white collar” exemptions are applicable to individuals who have primary duties which qualify them as an executive, administrative, professional, or certain computer professionals.  In addition, in order to be exempt from the FLSA’s overtime requirements, the employee must be paid on a salary basis of at least $455.00 per week.

The Department of Labor proposes to amend the regulations dealing with white collar exemptions to require that an employee be compensated on a salary basis at not less than $920.00 per week in order to maintain the exemption.  Additionally, the proposed regulations would provide for annual updated salary rates to be published in the Federal Register.

The regulations currently contain a separate exemption for highly compensated employees who customarily and regularly perform one or more of the duties of an executive, administrative or professional employee.  The proposed regulations would increase the required total annual compensation of such a highly compensated employee to $122,148.00, again to be adjusted annually.

While many people anticipated the Department of Labor would also amend the regulations to address the duties which must be performed by employees who fall under the white collar exemptions, that is not a part of the proposed regulation.

However, the Notice of Proposed Rulemaking requests comments on the current duties test and inclusion of non-discretionary bonuses for purposes of the salary basis test.  Thus, changes in these areas may be proposed latter. The proposed regulation will be subject to a period of public comment, and it is expected that any final rule may not be issued until some time in 2016.

Basic Rules

If in any workweek a nonexempt employee is covered by the FLSA, the employer must total all the hours worked by the employee in that workweek (even though two or more unrelated job assignments may have been performed), and pay overtime compensation for each hour worked in excess of the maximum hours applicable under section 7(a) of the Act—40 hours in a work week.

Workweek

The FLSA takes a single workweek as its standard and does not permit averaging of hours over 2 or more weeks. Thus, if an employee works 30 hours one week and 50 hours the next, he must receive overtime compensation for the overtime hours worked beyond the applicable maximum in the second week, even though the average number of hours worked in the 2 weeks is 40. This is true regardless of whether the employee works on a standard or swing-shift schedule and regardless of whether he is paid on a daily, weekly, biweekly, monthly or other basis. The rule is also applicable to pieceworkers and employees paid on a commission basis. It is therefore necessary to determine the hours worked and the compensation earned by pieceworkers and commission employees on a weekly basis.

An employee’s workweek is a fixed and regularly recurring period of 168 hours—seven consecutive 24-hour periods. It need not coincide with the calendar week but may begin on any day and at any hour of the day. For purposes of computing pay due under the FLSA, a single workweek may be established for a plant or other establishment as a whole or different workweeks may be established for different employees or groups of employees. Once the beginning time of an employee’s workweek is established, it remains fixed regardless of the schedule of hours worked by him. The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of the FLSA.

Time to Pay Overtime

There is no requirement in the FLSA that overtime compensation be paid weekly. The general rule is that overtime compensation earned in a particular workweek must be paid on the regular pay day for the period in which such workweek ends. When the correct amount of overtime compensation cannot be determined until some time after the regular pay period, however, the requirements of the FLSA will be satisfied if the employer pays the excess overtime compensation as soon after the regular pay period as is practicable. Payment may not be delayed for a period longer than is reasonably necessary for the employer to compute and arrange for payment of the amount due and in no event may payment be delayed beyond the next payday after such computation can be made.

Regular Rate

The “regular rate” under the FLSA is a rate per hour. The FLSA does not require employers to compensate employees on an hourly rate basis; their earnings may be determined on a piece-rate, salary, commission, or other basis, but in such case the overtime compensation due must be computed on the basis of the hourly rate completed.  Therefore, it is necessary to compute the regular hourly rate of such employees during each workweek, with certain statutory exceptions. The regular hourly rate of pay of an employee is determined by dividing his total remuneration for employment (except exclusions discussed below) in any workweek by the total number of hours actually worked by him in that workweek.

(a)        Earnings at hourly rate exclusively.

If the employee is employed solely on the basis of a single hourly rate, the hourly rate is the “regular rate.” For overtime hours of work the employee must be paid, in addition to the straight time hourly earnings, a sum determined by multiplying one-half the hourly rate by the number of hours worked in excess of 40 in the week. Thus a $12 hourly rate will bring, for an employee who works 46 hours, a total weekly wage of $588 (46 hours at $12 plus 6 at $6). In other words, the employee is entitled to be paid an amount equal to $ 12 an hour for 40 hours and $18 an hour for the 6 hours of overtime, or a total of $588.

(b)        Hourly rate and bonus.

If the employee receives, in addition to the earnings computed at the $12 hourly rate, a production bonus of $46 for the week, the regular hourly rate of pay is $13 an hour (46 hours at $12 yields $552; the addition of the $46 bonus makes a total of $598; this total divided by 46 hours yields a regular rate of $13). The employee is then entitled to be paid a total wage of $637 for 46 hours (46 hours at $13 plus 6 hours at $6.50, or 40 hours at $13 plus 6 hours at $19.50).

(c)        Weekly salary.

If the employee is employed solely on a weekly salary basis, the regular hourly rate of pay, on which time and a half must be paid, is computed by dividing the salary by the number of hours which the salary is intended to compensate. If an employee is hired at a salary of $350 and if it is understood that this salary is compensation for a regular workweek of 35 hours, the employee’s regular rate of pay is $350 divided by 35 hours, or $10 an hour, and when the employee works overtime the employee is entitled to receive $ 10 for each of the first 40 hours and $15 (one and one-half times $10) for each hour thereafter. If an employee is hired at a salary of $375 for a 40-hour week the regular rate is $9.38 an hour.

(d)       Salary for periods other than workweek.

Where the salary covers a period longer than a workweek, such as a month, it must be reduced to its workweek equivalent. A monthly salary is subject to translation to its equivalent weekly wage by multiplying by 12 (the number of months) and dividing by 52 (the number of weeks). A semimonthly salary is translated into its equivalent weekly wage by multiplying by 24 and dividing by 52. Once the weekly wage is arrived at, the regular hourly rate of pay will be calculated as indicated above. The regular rate of an employee who is paid a regular monthly salary of $1,560, or a regular semimonthly salary of $780 for 40 hours a week, is thus found to be $9 per hour. The parties may provide that the regular rates shall be determined by dividing the monthly salary by the number of working days in the month and then by the number of hours of the normal or regular workday. Of course, the resultant rate in such a case must not be less than the statutory minimum wage.

(e)        Fluctuating workweek.

An employee employed on a salary basis may have hours of work which fluctuate from week to week and the salary may be paid him pursuant to an understanding with his employer that he will receive such fixed amount as straight time pay for whatever hours he is called upon to work in a workweek, whether few or many. Where there is a clear mutual understanding of the parties that the fixed salary is compensation (apart from overtime premiums) for the hours worked each workweek, whatever their number, rather than for working 40 hours or some other fixed weekly work period, such a salary arrangement is permitted by the FLSA if the amount of the salary is sufficient to provide compensation to the employee at a rate not less than the applicable minimum wage rate for every hour worked in those workweeks in which the number of hours he works is greatest, and if he receives extra compensation, in addition to such salary, for all overtime hours worked at a rate not less than one-half his regular rate of pay. Since the salary in such a situation is intended to compensate the employee at straight time rates for whatever hours are worked in the workweek, the regular rate of the employee will vary from week to week and is determined by dividing the number of hours worked in the workweek into the amount of the salary to obtain the applicable hourly rate for the week. Payment for overtime hours at one-half such rate in addition to the salary satisfies the overtime pay requirement because such hours have already been compensated at the straight time regular rate, under the salary arrangement.

Example: Assume an employee whose hours of work do not customarily follow a regular schedule but vary from week to week, whose total weekly hours of work never exceed 50 hours in a workweek, and whose salary of $600 a week is paid with the understanding that it constitutes the employee’s compensation, except for overtime premiums, for whatever hours are worked in the workweek. If during the course of 4 weeks this employee works 40, 37.5, 50, and 48 hours, the regular hourly rate of pay in each of these weeks is $15.00, $16.00, $12.00, and $12.50, respectively. Since the employee has already received straight-time compensation on a salary basis for all hours worked, only additional half-time pay is due. For the first week the employee is entitled to be paid $600; for the second week $600.00; for the third week $660 ($600 plus 10 hours at $6,00 or 40 hours at $12.00 plus 10 hours at $18.00); for the fourth week $650 ($600 plus 8 hours at $6.25, or 40 hours at $12.50 plus 8 hours at $18.75).

The “fluctuating workweek” method of overtime payment may not be used unless the salary is sufficiently large to assure that no workweek will be worked in which the employee’s average hourly earnings from the salary fall below the minimum hourly wage rate applicable under the Act, and unless the employee clearly understands that the salary covers whatever hours the job may demand in a particular workweek and the employer pays the salary even though the workweek is one in which a full schedule of hours is not worked.

Typically, such salaries are paid to employees who do not customarily work a regular schedule of hours and are in amounts agreed on by the parties as adequate straight- time compensation for long workweeks as well as short ones, under the circumstances of the employment as a whole. Where all the legal prerequisites for use of the “fluctuating workweek” method of overtime payment are present, the FLSA, does not prohibit paying more. On the other hand, where all the facts indicate that an employee is being paid for his overtime hours at a rate no greater than that which he receives for non-overtime hours, the fluctuating workweek overtime formula cannot be used.

Exclusions From Regular Rate.

The “regular rate” includes all remuneration for employment paid to, or on behalf of, the employee, but does not include:

  • Sums paid as gifts; payments in the nature of gifts made at Christmas time or on other special occasions, as a reward for service, the amounts of which are not measured by or dependent on hours worked, production, or efficiency.
  • Payments made for occasional periods when no work is performed due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause; reasonable payments for traveling expense, or other expenses, incurred by an employee in the furtherance of his employer’s interests and properly reimbursable by the employer; and other similar payments to an employee which are not made as compensation for his hours of employment.
  • Sums paid in recognition of services performed during a given period if either, (1) both the fact that payment is to be made and the amount of the payment are determined at the sole discretion of the employer at or near the end of the period and not pursuant to any prior contract, agreement, or promise causing the employee to expect such payments regularly; or (2) the payments are made pursuant to a bona fide profit-sharing plan or trust or bona fide thrift or savings plan.

Bonuses.

Bonuses which do not qualify for exclusion from the regular rate as one of these types must be totaled in with other earnings to determine the regular rate on which overtime pay must be based.  Bonus payments are payments made in addition to the regular earnings of an employee.

(a)  General rules.

Where a bonus payment is considered a part of the regular rate at which an employee is employed, it must be included in computing his regular hourly rate of pay and overtime compensation.  No difficulty arises in computing overtime compensation if the bonus covers only one weekly pay period.  The amount of the bonus is merely added to the other earnings of the employee and the total divided by total hours worked.  Under many bonus plans, however, calculations of the bonus may necessarily be deferred over a period of time longer than a workweek.  In such a case the employer may disregard the bonus in computing the regular hourly rate until such time as the amount of the bonus can be ascertained.  Until that is done the employer may pay compensation for overtime at one and one-half times the hourly rate paid by the employer, exclusive of the bonus.  When the amount of the bonus can be ascertained, it must be apportioned back over the workweeks of the period during which it may be said to have been earned.  The employee must then receive an additional amount of compensation for each workweek that he worked overtime during the period equal to one-half of the hourly rate of pay allocable to the bonus for that week multiplied by the number of statutory overtime hours worked during the week.

(b)  Allocation of bonus where bonus earnings cannot be identified with particular workweeks.

If it is impossible to allocate the bonus among the workweeks of the period in proportion to the amount of the bonus actually earned each week, some other reasonable equitable method of allocations must be adopted.  For example, it may be reasonable and equitable to assume that the employee earned an equal amount of bonus each week of the period to which the bonus relates, and if the facts support this assumption additional compensation for each overtime week of the period may be computed and paid in an amount equal to one-half of the average hourly increase in pay resulting from bonus allocated to the week, multiplied by the number of statutory overtime hours worked in that week.  Or, if there are facts which make it inappropriate to assume equal bonus earnings for each workweek, it may be reasonable and equitable to assume that the employee earned an equal amount of bonus each hour of the pay period and the resultant hourly increase may be determined by dividing the total bonus by the number of hours worked by the employee during the period for which it is paid.  The additional compensation due for the overtime workweeks in the period may then be computed by multiplying the total number of statutory overtime hours worked in each such workweek during the period by one-half this hourly increase.

(c)  Discretionary character of excluded bonus.

In order for a bonus to qualify for exclusion as a discretionary bonus, the employer must retain discretion both as to the fact of payment and as to the amount until a time quite close to the end of the period for which the bonus is paid.  The sum, if any, to be paid as a bonus is determined by the employer without prior promise or agreement.  The employee has no contract right, express or implied, to any amount.  If the employer promises in advance to pay a bonus, he has abandoned his discretion with regard to it.  Thus, if an employer announces to his employees in January that he intends to pay them a bonus in June, he has thereby abandoned his discretion regarding the fact of payment by promising a bonus to his employees.  Such a bonus would not be excluded from the regular rate.  Similarly, an employer who promises to sales employees that they will receive a monthly bonus computed on the basis of allocating 1 cent for each item sold whenever, is his discretion, the financial condition of the firm warrants such payments, has abandoned discretion with regard to the amount of the bonus though not with regard to the fact of payment.  Such a bonus would not be excluded from the regular rate.  On the other hand, if a bonus such as the one just described were paid without prior contract, promise or announcement and the decision as to the fact and amount of payment lay in the employer’s sole discretion, the bonus would be properly excluded from the regular rate.

(d)  Promised bonuses not excluded.

The bonus, to be excluded, must not be paid “pursuant to any prior contract, agreement, or promise.”  For example, any bonus which is promised to employees upon hiring or which is the result of collective bargaining would not be excluded from the regular rate under the FLSA.  Bonuses which are announced to employees to induce them to work more steadily or more rapidly or more efficiently or to remain with the firm are regarded as part of the regular rate of pay.  Attendance bonuses, individual or group production bonuses, bonuses for quality and accuracy of work, bonuses contingent upon the employee’s continuing in employment until the time the payment is to be made and the like are in this category.  They must be included in the regular rate of pay.

If you have any questions about these proposed changes, you may contact Mr. Leid at

http://www.howardandhoward.com

MLied@HowardandHoward.com

One Technology Plaza, Suite 600
211 Fulton Street
Peoria, IL 61602-1350
Office: (309) 999-6311
Cell: (309) 696-0604
Fax: (309) 672-1568

In Nevada, the elements for a claim of aiding and abetting another’s breach of a fiduciary duty are:

  1. A fiduciary relationship exists;
  2. The fiduciary breached the fiduciary relationship;
  3. The third party knowingly participated in the breach; and
  4. Causation and damages.

In re: Amerco Derivative Litigation, 252 P.3d 681 (Nev. 2011); J.P. Morgan Chase Bank, N.A. v. KB Home, 632 F. Supp. 2d 1013 (D. Nev. 2009); Klein v. Freedom Strategic Partners, LLC, 595 F. Supp. 2d 1152 (D. Nev. 2009).

 

See elements for other claims at the Nevada Law Library

In Nevada, the elements for a claim of breach of fiduciary duty are:

  1. A fiduciary relationship exists between two persons such that one of them is under a duty to act for or give advice for the benefit of another upon matters within the scope of that relationship;
  2. Failure of the party owing the duty to use due care or diligence, act with utmost faith, exercise ordinary skill, or act with reasonable intelligence;
  3. Plaintiff suffered losses or injuries resulting from defendants’ breach of duty; and
  4. Causation and damages.

NRS 78.138-39; Klein v. Freedom Strategic Partners, LLC, 595 F. Supp. 2d 1152, 1162 (D. Nev. 2009)  Stalk v. Mushkin, 125 Nev. 21, 199 P.3d 838 (Nev. 2009); Shoen v. SAC Holding Corp., 122 Nev. 621, 137 P.3d 1171 (Nev. 2006); Foley v. Morse & Mowbray, 109 Nev. 16 (1993); Hoopes v. Hammargren, 725 P. 2d 238 (Nev. 1986); Linland v. United Business Inv., Inc., 693 P.2d 20 (Ore. 1984); 18 Am.Jur 2d Corporations 1695, 1710, 1712-13; Restatement (Second) of Torts  § 874 Cmt. a (1979).

 

See elements for other claims at the Nevada Law Library

In Nevada, the elements for a tort claim of breach of the covenant of good faith and fair dealing are:

  1. Existence of a valid contract;
  2. Every contract in Nevada contains an implied covenant to act in good faith in performance and enforcement of the contract;
  3. Justifiable expectation by the plaintiff to receive certain benefits consistent with the spirit of the agreement;
  4. Defendant performed in a manner that was in violation of or unfaithful to the spirit of the contract (the terms of the contract are complied with in a literal sense, but the spirit of the contract is breached);
  5. The existence of a special relationship of trust between the plaintiff and defendant;
  6. Unfaithful actions by the defendant were deliberate;
  7. Causation and damages; and
  8. Punitive Damages.

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In Nevada, the elements for a contract claim of breach of the covenant of good faith and fair dealing are:

  1. Existence of a valid contract;
  2. Every contract in Nevada contains an implied covenant to act in good faith in performance and enforcement of the contract;
  3. Justifiable expectation by the plaintiff to receive certain benefits consistent with the spirit of the agreement;
  4. Defendant performed in a manner that was in violation of or unfaithful to the spirit of the contract (the terms of the contract are complied with in a literal sense, but the spirit of the contract is breached);
  5. Unfaithful actions by the defendant were deliberate; and
  6. Causation and damages.

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The Buy-Sell Agreement is Arguably The Most Important and Most Overlooked Business Agreement

The Buy-Sell Agreement is Arguably The Most Important and Most Overlooked Business Agreement

Buy-sell agreements can alleviate disputes that can arise between or among owners and can provide for payments to buy out an owner’s interest in the business at an owner’s death or disability without disrupting the ongoing business.   It can avoid family fights, fights between surviving owners and the deceased owner’s spouse, while maintaining the integrity of the company’s goodwill and liquidity. They are an essential part of proper corporate governance for any closely held business. If an owner is unable to continue in the business, the agreement triggers the sale of that owner’s portion of the company at a price designated in the agreement. (more…)

In Nevada, the elements for a claim of breach of the duty of loyalty are:

  1. Defendant is a fiduciary to Plaintiff company;
  2. Defendant owed plaintiff the duty of loyalty, requiring defendant to maintain, in good faith, the corporation’s and its shareholders’ best interests over anyone else’s interests;
  3. Defendant breached the duty of loyalty; and
  4. Causation and damages.

Shoen v. SAC Holding Corp., 122 Nev. 621, 632 (Nev. 2006); White Cap Indus., Inc. v. Ruppert, 119 Nev. 126, 67 P.3d 318 (2003); Rhine v. Miller, 94 Nev. 647, 649, 583 P.2d 458 (1978).

 

See elements for other claims at the Nevada Law Library

Generally, a Covenant Not to Compete is “[a]n agreement, generally part of a contract of employment or a contract to sell a business, in which the covenantor agrees for a specific period of time and within a particular area to refrain from competition with the covenantee.”  Black’s Law Dictionary 364 (6th ed. 1990).   The Covenant Not to Compete is known by multiple other names: the “restrictive covenant,” “non-competition agreement,” or as an “agreement not to compete” (hereinafter the “Covenant”).  Griffin Toronjo Pivateau, Putting the Blue Pencil Down: An Argument for Specificity in Noncompete Agreements, 86 Neb. L. Rev. 672, 675 (2008). (more…)

Does Your Business Comply With Nevada’s Workplace Safety Program Laws?

Does Your Business Comply With Nevada’s Workplace Safety Program Laws?

Does your company have a Written Safety Program?

Did you know that a Written Safety Program is required by law?  Every employer in Nevada which has 11 or more employees or which manufactures explosives is required to have a written Safety Program.

Your Written Safety Program (“WSP”) must include:

  • A training program for employees, targeting areas of specific concern or where there have been recurring injuries;
  • If you have more than 25 employees, or manufacture explosives, you must have a safety committee which includes an employee representative.  Your employee representative on the safety committee must be paid “as if that employee were engaged in the employee’s usual work activities” for time spent on the committee;
  • The WSP manual and training must be available in a language and format that is understandable to each of your employees;
  • A statement explaining that the managers, supervisors, and employees are responsible for carrying out the program;
  • An explanation of the methods used to identify, analyze, and control new and existing hazardous conditions; and
  • A method for ensuring that employees comply with the safety rules and work practices.

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In Nevada, the elements for a claim of intentional interference with contractual relations are:

  1. A valid and existing contract between plaintiff and a third party;
  2. Defendant had knowledge of the valid contract or had reason to know of its existence;
  3. Defendant committed intentional acts intended or designed to disrupt the contractual relationship or to cause the contracting party to breach the contract;
  4. Actual disruption of the contract (the contracting party breached the contract);
  5. The breach was caused by the wrongful and unjustified conduct;
  6. Causation and damage.

Klein v. Freedom Strategic Partners, LLC, 595 F. Supp. 2d 1152 (D. Nev. 2009); Blanck v. Hager, 360 F. Supp.2d 1137 (D. Nev. 2005); Nat. Right to Life P.A. Com. v. Friends of Bryan, 741 F.Supp. 807, 813 (D. Nev. 1990); J.J. Industries, LLC v. B. Bennett, 19 Nev. 269, 71 P.3d 1264, 1268 (2003); Wichinsky v. Mosa, 109 Nev. 84, 88, 847 P.2d 727 (1993); Sutherland v. Gross, 105 Nev. 192, 772 P.2d 1287, 1288 (Nev. 1989); M & R Inv. Co. v. Goldsberry, 707 P.2d 1143 (Nev. 1985).  The court must ask whether the defendant pursued an improper objective of harming the plaintiff or used wrongful means that in fact caused an injury to the contractual relationship.  Nat’l Right to Life P.A. Com. v. Friends of Bryan, 741 F.2d 807 (D. Nev. 1998).

 

See elements for other claims at the Nevada Law Library

What Should You do if You Have Been Sued?

What Should You do if You Have Been Sued?

“NOTICE!” YOU HAVE BEEN SUED.”

These are words none of us ever wants to see.  However, lawsuits are almost an inevitable cost of conducting business in today’s environment.  A recent statistic suggests that over 120,000 Nevada businesses were sued last year alone in Nevada Courts.  An old, but unfortunately true adage to keep in mind: “there are only two types of businesses … those that have been sued already and those that will be sued.”  While I am not sure the future is quite that bleak, all professionals should know what their options and responsibilities are once they have been served with a copy of a complaint.  More importantly, you should know what you can do to help avoid suits. (more…)

In Nevada, the appointment of a receiver over a business may be appropriate if:

  1. The appointment of a receiver is governed by statute and is appropriate only under circumstances described in statute.  State ex rel. Nenzel v. Second Jud. Dist. Ct., 49 Nev. 145, 155, 241 P. 317 (1925); Shelton v. Second Jud. Dist. Ct., 49 Nev. 487, 494, 185 P.2d 320 (1947);
  2. Any stockholder may apply if the corporation is insolvent. NRS 78.347;
  3. Any holder of 1/10 of a corporation’s issued and outstanding stock may apply for the appointment of a receiver when a corporation has been mismanaged. NRS 78.650.  A showing of any one of the ten circumstances enumerated in the statue will authorize the appointment of a receiver upon application by a ten-percent shareholder. Transcontinental Oil Co. of Nev. v. Free, 80 Nev. 207, 210-11, 391 P.2d 317, 319 (1964);
  4. A holder of 1/10 of issued stock may apply for appointment of a receiver of a solvent corporation where the business is being conducted at a great loss, the operation is prejudicial to creditors or stockholders such that the business cannot be conducted with safety to the public. NRS 78.630;
  5. The Court must consider the entire circumstances of the case when considering the appointment of a receiver. Bowler v. Leonard, 70 Nev. 370, 383 (1954);
  6. A Receiver may be appointed when a corporate is in imminent danger of insolvency. NRS 32.010;
  7. A Receiver is a neutral party appointed by the court to preserve, protect, and administer the business’ assets for benefit the business. In all cases, directors or trustees who have been guilty of no negligence nor active breach of duty must be preferred over all others in making the appointment of a receiver. NRS 78.650.  Peri-Gil Corp. v. Sutton, 84 Nev. 406, 411 422 P.2d 35, 38 (1968).  Such directors have a right to be heard as to their qualifications. Shelton v. Second Jud. Dist. Ct., 64 Nev. 487, 492-93, 185 P.2d 320, 323 (1947); and
  8. Appointment of a receiver is appropriate when the business’ property at issue is at risk of waste, loss of income, or is insufficient to secure a debt. NRS 32.010; NRS 107.100;

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Certain employers cannot lay off employees without giving advance notice or paying them for a period of time.

In 1989, the government enacted WARN – the Worker Adjustment and Retraining Notification Act.  WARN protects workers by requiring employers to provide sixty days advance notice of certain mass layoffs. In general, employers are subject to WARN if they have a 100 or more employees, not counting employees who have worked less than six months in the last twelve months, and not counting employees who work an average of less than twenty hours a week.

An employer subject to WARN must give sixty days’ advance notice if an employee site will be shut down and the shutdown will result in employment loss for fifty or more employees during any thirty-day period.  This is commonly known as a “plant closing”, although it does not merely apply to manufacturing sites.

Alternatively, an employer subject to WARN must give notice if there is to be a “mass layoff” which will result in an employment loss at the employment site during any thirty-day period for 500 or more employees or a lay off 50 to 499 employees if the number to be laid off makes up at least 33% of the employer’s active workforce.

In either case, employees who have worked less than six months in the last twelve months or employees who work less than twenty hours a week do not count in determining whether an employer is subject to WARN.

WARN also applies in the case of a sale of a business.  However, there is an additional twist.  Not only is the seller responsible for providing notice of the “plant closing” or “mass layoff”, but if the buyer of the business would anticipate a “plant closing” or “mass layoff”, such buyer must also give the sixty-day notice.  As an alternative to giving sixty days notice, if a company is subject to WARN, the employer can pay the laid-off employees for those sixty days.

 

By Guest Blogger Mary Drury, Esq.

 

 

With the economic downturn, clients are increasingly asking specific questions about the rights and remedies of creditors.

As a caveat, this article is not intended to include everything that one might need to know about collecting against judgments.  These remedies can be affected by many other laws not discussed here, including but not limited to claims by creditors of preferential or fraudulent transfer, or bankruptcy.  The intent of this article is to explain some basic information about types of creditors and types of remedies available to judgment creditors. (more…)