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Sunday, February 12, 2017

FLSA law suits - settlements that get approved



We recently handled an FLSA (Fair Labor Standards Act) lawsuit in the Eastern District of Virginia (VA Federal Court). After a bit of back and forth, we agreed on a settlement. I wanted to post a couple of pointers on how to handle FLSA settlement actions, as they are not the same as traditional civil action settlements. Because the requirements of the FLSA are statutory (defined at 29 USC 201 through 219), in order to settle a suit already filed with the Court, a judge must approve the settlement and ensure it satisfies the statutory requirements in order to constitute an effective "end" to the lawsuit. If the settlement agreement does not comport with the code, it will be denied.

Requirements of a Court Approved Settlement Agreement


Note: the rules governing FLSA settlements are strictly enforced by the Court. If you do it incorrectly, you run the risk of (a) having the settlement denied by the judge, and/or (b) the settlement will not preclude a subsequent lawsuit on exactly the same grounds. It can and does happen. And a prior settlement, not approved by the Court, will not stop a subsequent lawsuit on the exact same issue. There are some limited exceptions, but they are not strong, and not followed by most circuits.

Non-Court Approved Settlements


A settlement that is not submitted for approval by a Court is called a "private settlement" and is given no effect when there is a "bona fide dispute" regarding hours and wages most circuits. The Circuit Court in Florida stated it succinctly:
"[A]n employer undertakes the private resolution of an FLSA dispute at his peril. If the employer pays the employee in full, including all wages owed and liquidated damages, the employee retains no uncompensated FLSA claim and the peril dissipates. However, if the employer extracts a compromise, the release of an FLSA claim approved by neither the Department of Labor nor the district court remains unenforceable." Dees v. Hydradry, Inc., 706 F. Supp. 2d 1277, 1237-38 (M.D. Fla. 2010).

See also, Lynn's Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982) which held the 29 USC 216 controls settlements on this type of case, and allows only Court approved or Department of Labor approved cases. Note that there was an opposite holding in the 5th circuit under Martin v. Spring Break ’83 Productions, L.L.C., 688 F.3d 247 (5th Cir. 2012). According to the Fifth Circuit, private settlements are enforceable if they provide all benefits that the employee would be entitled to under FLSA litigation because there is “little danger of employees being disadvantaged by unequal bargaining power.”

Three parts of a Court Approved Settlement Agreement


  1. You need the actual settlement agreement. The controlling case for FLSA settlement agreements, and what must be in them, can be found at Dorian Cheeks v. Freeport Pancake House, Inc., 796 F.3d 199 (2d Cir. 2015). This case makes clear that the only thing that may be settled in the agreement are the specific allegations of hours and work time during the period of the complaint. A settlement agreement MAY NOT settle all potential past and future claims, as that would put the settlement agreement in direct conflict with federal law on the matter of wages and hours. The term of art is "narrowly tailored" to address the specific period addressed in the complaint. As a matter of law, the look back period is limited to 2 years from the date of the filing of an FLSA lawsuit. You can wave the three year "intentional act" look back by agreement of the parties (however, the two year is always permitted, and therefore cannot be waived).

    A settlement agreement must demonstrate that the parties have reviewed all wage and hour claims during the given time frame, and that the employer has provided all time records so that the employee can confirm the time and hours worked. Absent an agreement that full disclosure has been made (or that the parties agree that it has been made), the Court cannot determine if (a) there is a bone fide dispute as to hours, (b) if the resolution is fair and fully resolves the conflict. See, Dorian Cheeks above. To demonstrate this, you must always include the punch records or time records with any proposed settlement, and both sides must sign-off indicating that they have received and reviewed the records.

    To ensure that the settlement is fair, when the employees are not represented by counsel, a cooling period must be provided. A copy of the settlement, along with time records, and any other documents, must be provided, and a minimum of 72 hours given for the employees to review the agreement, or withdraw their consent, if already signed.

    Note, that the parties can agree to alter the punch records to comport to what was "actually" worked, allowing both sides to negotiate and settle on a reasonable amount. The requirement is only that all time records during the period were considered, and that the parties each reviewed and agree to the record as amended. Any changes should be initialed by each side, indicating agreement specifically to a change in hours on a given day. Precision is critical so that the Court can determine the degree of understanding and consent to the settlement by each party.

    Remember, also, that in FLSA litigation, the employee will receive 2x the amount of the missing pay, as a statutory payment -- so if the employee should have been paid 100 hours of OT, but instead was paid 100 hours of straight time, they would be due 100 x (2 x base pay). The two times multiplies is statutory and cannot be waived in a settlement agreement. If you wish to control the amount paid, both parties must agree to a change in the hours, not the pay rate. Never change the pay rate.
  2. You must include a joint motion to dismiss the action with prejudice. The wording of this motion (and memorandum, if you don't combine the motion with a memorandum) follows a present format. See the attached document. Change as needed to fit your circumstances. NOTE! It is critical that you include that if payment of attorney fees is part of the settlement, the attorney fees were reasonably earned. Included a list of attorney hours unless it is $5000 or below (in which case, the Court generally will accept representation of counsel). Additionally, be sure to include that any additional attorney fees, over the amount paid in settlement (if any), are the responsibility of the party that incurred them. This should be part of the settlement, and expressly spelled out in the motion as well as the final order (see below).
  3. Finally, you include a proposed order that contains the specific wording needed to dismiss the suit an give effect to the settlement. See attached. Note, you include that attorney fees not paid in the settlement are expressly the responsibility of the respective party.


Do you have a question about employment litigation? Call us! We can help -- both in the defense of your business, or in the defense of your rights as an employee. We know the law, and we understand how to get things done! 1-800-579-9864 or admin@hanoverlawpc.com.



Hanover Law, PC
Offices in Fairfax, VA and Washington, DC
www.hanoverlawpc.com
2751 Prosperity Ave, Ste 150
Fairfax, VA 22031
Sean R. Hanover, Esq.
Stephen Salwierak, Esq.
Charlet Herr, Practice Manager
1-800-579-9864
admin@hanoverlawpc.com

Thursday, January 26, 2017

Asking for forgiveness from the IRS -- Form 843



With tax season rolling around, we've received numerous questions regarding how to avoid paying penalties. Usually, we ask that clients come to us before the IRS wants to nail them, however, when you've made a boo-boo, or there is a mistake that needs correcting (or you just got caught cheating), sometimes the right answer can be found in form 843 -- Abatement of fees/costs/penalties. That's a fancy terms for waiving or lowering bad-boy penalties charged by the IRS.

Two criteria really make form 843 work well. First, if you filed to extend your tax paying deadline, and you let the IRS know there was an issue before you were late, you can almost always successfully ask for abatement (i.e. drop them penalties, b**ches...) Secondly, if the fault was not your own. For example, if you jointly filed, but your spouse didn't provide you with a W2, or an employer reported different numbers. Those would reasons. Additionally, we occasionally run into issue regarding pre-tax HSA spending (that's medical payments from your health savings account). If you don't file the correct forms, all the pre-paid tax credits are charged back to you, and any deductions from the account are not tax deductible. Oops! Correct the forms, and file and 843 to waive the penalty (if needed).

Be aware that in both instance above, timely filing of your taxes is critical. Although the IRS requires you to submit your estimated tax payment with the request for an extension, even if you do not, you have a good argument that you let them know what was going on. Communication is key. Finally, talk to a tax lawyer about form 843. No matter how good TurboTax or H&R Block is with tax processing, only a lawyer can give you legal advice about how to get out of an, "oops, I screwed up!" situation.

Finally, you MUST file a Form 864 if you intend to challenge your right to a refund or abatement in Court. Tax Court will NOT consider an abatement request that was not raised at an administrative hearing, or with an appeals officer. Giamelli v. Commissioner, 129 T.C. 107, 115 (2007). See also, Day v. Commissioner, T.C. Memo. 2014-215 (holding that an interest abatement claim was not properly raised in a CDP hearing where the taxpayer failed to follow advice to file Form 843 and provide other information in the CDP hearing). T.C. is an abbreviation for "tax court."

Do you have a tax question? We do taxes for business and individuals. We can help you find legal tax shelters, defend against audits, and even file 843's on your behalf! Never speak to the IRS without representation, and never respond to a proposed tax "correction" letter without consulting us first. Very important!. You may reach us at 1-800-579-9864 or Admin@HanoverLawPC.com.

Hanover Law, PC
Offices in Fairfax, VA and Washington, DC
www.hanoverlawpc.com
2751 Prosperity Ave, Ste 150
Fairfax, VA 22031
Sean R. Hanover, Esq.
Stephen Salwierak, Esq.
Charlet Herr, Practice Manager
1-800-579-9864
admin@hanoverlawpc.com

Saturday, January 14, 2017

Cats Paw theory of EEO liability (employment discrimination)



I am in the middle of a case with the Department of Defense (DoD), and it's a rather interesting fact pattern that I thought I would share. In this instance, my client is alleging that a team lead, not his supervisor, was the individual who was discriminating against him. The Government has responded that my client's team lead was not a management official, and could not have caused a discriminatory environment (racial and national origin) because he was not in a position to oversee or make employment determinations regarding my client. Who's right?

To understand the issue, it is important to understand whether management listened to the team lead when it made decisions regarding my client. IF management based its decisions on the team lead's comments, independent of any research on their part, my client has a case. But, I get ahead of myself. All EEO cases start with a basic analysis of whether some action was taken against the client which violates equal employment laws. In this case, because it is federal, the law in question is 42 USC §2000e. Specific sections include:
Retaliation: 42 U.S.C. §2000e-3(a)
because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this subchapter.

Prohibition against government discrimination: 42 U.S.C. §2000e-16(a)
All personnel actions affecting employees or applicants for employment...shall be made free from any discrimination based on race, color, religion, sex, or national origin.


Once an analysis is done to determine if your client suffered some kind of adverse action based on one of the aforementioned classifications (note, there are others including failure to provide a reasonable accommodation, violation of the ADEA, etc. -- this is just a sample related to racial and national origin discrimination. Read the regs!), you need to determine who did the discriminatory actions. If management took adverse action, then you need to show it was based on an illegal premise. This "prima facia" showing (i.e. your client is protected, and some negative action was taken against them) is the initial launching point for discrimination lawsuits, and is explained in McDonald Douglas v. Green.

But what happens if your employer comes back and states that the decision maker never violated any rules or regulations, and the discriminatory conduct was done by an associate of your client? Is the employer still responsible? They are if the conduct was the basis for the employment action taken by the employer. By way of example: Suppose your client's supervisor sends your black client and a white co-worker on an assignment. While on the assignment, the co-worker tells your client that blacks can't do this job well, and usually the customers don't like blacks. Later, when your client and the co-worker return, the co-worker tells your client's supervisor that your client did a terrible job and was a bad fit for this type of work. The supervisor then fires your client.

In this example, the supervisor did not say or do anything discriminatory, and the firing itself was compliant with at-will employment standards. Yet, if you can show that the supervisor relied on the discriminatory animus of the co-worker, the co-worker's discrimination will be imputed to the supervisor. Bingo -- you have a case.

Staub v. Proctor Hosp., 562 US 411 (2011) is the seminal case in this area. In this case, the authority that fired Staub was an HR Manager who relied on the reports from a supervisor working with Staub. The Court held that: "If a supervisor performs an act motivated by unmilitary animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, then the employer is liable." Id at 422.

Several federal courts of appeals have applied Staub to Title VII claims rather than requiring the plaintiff to show that the ultimate decision maker possessed discriminatory intent. See, Bryant v. District of Columbia, 102 A.3d 264,268 Footnote 3 (D.C. 2014).

The breadth of individuals who could influence decision making managers was expanded to include non-supervisors as well. Most recently, “[t]he Cat's Paw refers to the situation in which a biased employee, who lacks decision-making authority but has discriminatory animus, convinces a formal decision-maker to take an adverse action against a third-party for a seemingly non-discriminatory reason.” Everhart v. Bd. of Educ., 2016 U.S. Dist. LEXIS 168790, Footnote 5 (D. Md. Dec. 2, 2016)

However, there must be some evidence of reliance on the subordinate’s statements or action by the decision maker. Showing this is sufficient to raise the specter of Cat’s Paw. Lobato v. New Mexico Environment Dept., 733 F.3d 1283 (10th Cir. 2013). "An employer is not liable under a subordinate bias theory if the employer did not rely on any facts from the biased subordinate in ultimately deciding to take an adverse employment action – even if the biased subordinate first alerted the employer to the plaintiff’s misconduct." Id. at 1295

Proving a Cat's Paw theory is an excellent way to prevent a summary judgment and ensure you will get before the judge or jury. Never let the government or a private employer argue that you don't have a right to bring forth a claim because, "the manager didn't do it." Even more so in sexual harassment cases. Watch for this, and slam them with a Cat's Paw argument.

Do you have a question about employment law -- either as the wronged employee or the abused employer? We can help! 1-800-579-9864 or admin@hanoverlawpc.com.

Hanover Law, PC
Offices in Fairfax, VA and Washington, DC
www.hanoverlawpc.com
2751 Prosperity Ave, Ste 150
Fairfax, VA 22031
Sean R. Hanover, Esq.
Stephen Salwierak, Esq.
Charlet Herr, Practice Manager
1-800-579-9864
admin@hanoverlawpc.com

When is a signature on a contract non-binding?

It is not often we get to deal with antiquity in law -- so this was a great question recently posted on a legal bulletin board.

I signed up for a loyalty program. I then switched to another product not in the program. The loyalty company sent a letter and bill for 30,000 to "complete my commitment with them" Under the line I signed it say "this is a non-binding signature". Do I have to pay them?


This is an interesting case. Without reading the contract, it is hard to say what the terms and conditions of the loyalty program are (were?). You need to call us to discuss the contract -- and then I can provide a legal answer as to the level of liability/exposure you face. That aside, the case is interesting for its historical context. You wrote "non-binding signature" (or was that pre-printed?). In days of yore, a seal indicated that the signature had been verified. This was especially important in the age of wax stamps and individuals who could not read or write. A "sealed" document had its statute of limitations increased from the typical three years to five or even twenty years, and prevented the "sealed" signature from being contested as false or forged. In Virginia, the code for this is 8.01-246, and a "seal" is not required, and the period to bring an action in a contract case is consistent whether there is a seal or not.

In modern contract law, wording such as "non-binding" (or "(seal)") really only opens you up for protracted litigation. Under commercial contract regulations, any intent to enter into a contract can be used to indicate acceptance of terms and conditions in return for some kind of benefit. Signatures may not be required, if consent can be presumed from your acceptance of some benefit (for example, placing an order on the phone, and receiving the goods would obligate you to pay for the items ordered, even if you didn't sign anything). Conversely, indicating you refused to be bound by terms would arguably act as a rejection to the terms of the agreement. So, it's murky.

Do you have a question about contract law? Call us! We handle trials and contract negotiations in DC, VA, and MD.
Hanover Law, PC
Offices in Fairfax, VA and Washington, DC
www.hanoverlawpc.com
2751 Prosperity Ave, Ste 150
Fairfax, VA 22031
Sean R. Hanover, Esq.
Stephen Salwierak, Esq.
Charlet Herr, Practice Manager
1-800-579-9864
admin@hanoverlawpc.com

Matter of Avetisyan and Immigration Court Case Control

A seasoned immigration attorney, Ms. Alison Yew, started a discussion regarding tactics in immigration court. I responded to her question, and thought the answer could be useful to other practitioners and individuals working on immigration cases.

Matter of Avetisyan is a case relating to the judge's discretion to admin close a matter over DHS's objections. The case states that "neither an Immigration Judge nor the Board may abdicate the responsibility to exercise independent judgment and discretion in a case by permitting a party’s opposition to act as an absolute bar to administrative closure of that case when circumstances otherwise warrant such action."

I've requested DHS's stipulation to _TERMINATE_ (as opposed to admin closure) on the grounds the respondent (my client) has basis to adjust status (married to US citizen, whose I-130 petition has been approved, and client entered the US on a visa which he has now overstayed). In my motion to terminate I want to use the Matter of Avetisyan, but this is an admin close case. Has any one successfully argued that Avetisyan applies to termination?

Great question, and sure, we've used this before. That case actually stands for the fact that an IJ can't relinquish his/her duty to decide a motion (or case!) to the DHS attorney. Although this was couched in the argument of admin closure, it is not strictly tied to that. The judge must weigh the merits his/herself. As such, it applies to any application or motion where you would like the judge to rule on an action over the objection of DHS. The exception, of course, is when a statute or CFR requires DHS concurrence in order to move forward.

"In deciding individual cases, an Immigration Judge must exercise his or her independent judgment and discretion and may take any action consistent with the Act and regulations that is appropriate and necessary for the disposition of such cases. 8 C.F.R. §1003.10(b)." - Matter of Avetisyan

If you have a question regarding immigration court, or tactics for handling (or closing!) your case, give us a ring! We'd be glad to help.

Hanover Law, PC
Offices in Fairfax, VA and Washington, DC
www.hanoverlawpc.com
2751 Prosperity Ave, Ste 150
Fairfax, VA 22031
Sean R. Hanover, Esq.
Stephen Salwierak, Esq.
1-800-579-9864
admin@hanoverlawpc.com

Wednesday, January 4, 2017

How to file a 212H waiver in immigration court

Alright, this is a short and dirty posting today. I was doing research online, and noticed that there is a dearth of "how to" guides on 212(h) waivers. The 212(h) waiver is valid for LPR's who originally adjusted their status while in the US. Although 212(h) was designed for first time applicants, it is most often used (in the immigration court context) by LPR's who are returning from overseas, are stopped at the border by CBP (Custom and Border Protection).

Section 212(h) of the Immigration and Nationality Act provides that the Attorney General may, in his/her discretion, waive the application of subparagraph 212(a)(2)(A)(I) (crimes involving moral turpitude), 212(a)(2)(B) (multiple criminal convictions), 212(a)(2)(D) (prostitution and commercial vice), 212(a)(2)(E) (certain aliens who have asserted immunity from prosecution), and 212(a)(2)(A)(i)(II) (an offense of simple possession of 30 grams or less of marijuana). See, EOIR Judge's Benchbook regarding 212(h) relief. Additionally, In Matter of J-H-J-, 26 I.&N. Dec. 563 (BIA 2015), the waiver was extended to individuals who are convicted of aggravated felonies.

There are two types of 212(h) defenses:

1. If your client has been in the US for 15 years or more, BEFORE the filing of the 212(h). Note, this is NOT before the commission of the crime (or conviction thereof), rather before the 212(h) is filed.

2. If your client has NOT been in the US for 15 years, then he/she can file for a 212(h) on a showing of extreme hardship to a US Citizen of LPR family member. This is the same standard as the I-601.

To request type (2) relief above in immigration court, the attorney must file an I-601 with USCIS including paying the appropriate filing fees. Proof of payment of the fees, along with proof of mailing, is sufficient to initiate a 212(h) defense in the Court. You need to submit the filed I-601 and proof of payment (copy of the check and proof of mailing is usually sufficient), to request this relief.

No filing with USCIS is required when requesting 212(h) relief of type (1) above, as no hardship must be shown. This is merely an alternative to LPR cancellation.

Given that the LPR is likely detained (arriving aliens cannot get bond), make sure you have a 212(h)/601 application ready at the first hearing. This will allow you to request the earliest possible trial (merit's hearing) date.



Hanover Law, PC
Offices in Fairfax, VA and Washington, DC
www.hanoverlawpc.com
2751 Prosperity Ave, Ste 150
Fairfax, VA 22031
Sean R. Hanover, Esq.
Stephen Salwierak, Esq.
1-800-579-9864
admin@hanoverlawpc.com

Wednesday, December 21, 2016

How to resolve an outstanding arrest warrant

Today's post is rather short. A question that we often run into in criminal law deals with warrants. This recent question on a law bulletin board we participate on is typical:
I have a parole violation warrant an would like to know how I should turn myself in. How do I do this?

Great question! There are generally three methods for resolving an outstanding warrant.
  • (1) you are picked up by the police
  • (2) you turn yourself in to the local police stations
  • (3) you hire an attorney to make a motion on the docket of the local court, and ask that the arrest warrant be withdrawn (recalled, vacated, or dismissed) and a return date be given.


As you might imagine, option 1 is not desirable, as that almost always results in jail. In DC, I would always get an attorney to file on the docket (option 3). You don't want to sit in jail awaiting a hearing date on your parole violation. This is especially true if you believe they may revoke parole. In that case, you'll sit in jail until the actual parole violation hearing, likely you will not get another bond pending the trial on your parole violation (although, you can).

The term "return date" is legal jargon. It means a new date when you appear in Court for the judge to rule on the arrest warrant, and then to set the appropriate term of your continuing parole and/or violation hearing. Be cautious of the Bail Reform Act that can cause serious problems if you violate a return to court order. If you think that may have happened, you need to contact counsel immediately, as such a violation could result in up to 5 years in jail.

If you need help with getting your parole violation and arrest warrant resolved, give us a call! 703-402-2723.



Hanover Law, PC
Offices in Fairfax, VA and Washington, DC
www.hanoverlawpc.com
2751 Prosperity Ave, Ste 150
Fairfax, VA 22031
Sean R. Hanover, Esq.
Stephen Salwierak, Esq.
1-800-579-9864
admin@hanoverlawpc.com