The Connecticut Supreme Court, in Commission on Human Rights and Opportunities v. Echo Hose Ambulance et al., ruled that unpaid volunteers are not “employees” for the purposes of the Connecticut Fair Employment Practices Act, which contains Connecticut’s workplace anti-discrimination laws.

Specifically, the Connecticut Supreme Court decided that a volunteer must satisfy the ‘‘remuneration test’’ used to resolve similar federal causes of action, as opposed to Connecticut’s common-law ‘‘right to control’’ test. The remuneration test is comprised of a two-step inquiry. As a threshold matter, the volunteer first demonstrate remuneration. Remuneration may consist of either direct compensation, such as a salary or wages, or indirect benefits that are not merely incidental to the activity performed. The second step involves analyzing the putative employment relationship under the common-law agency test.

Upholding the Appellate Court’s ruling, the Connecticut Supreme Court held that the Plaintiff was not an “employee” under the Connecticut Fair Employment Practices Act, because she failed to meet the remuneration prong of the remuneration test.

In Lewis v. Epic Systems Corporation, No. 15-2997 (May 26, 2016), the Court of Appeals for the Seventh Circuit ruled that an employer-imposed agreement that required that employees bring any wage-and-hour claims against the employer only through individual arbitration, and prohibited collective arbitration or collective action in any other forum, violated the National Labor Relations Act (NLRA), and was unenforceable under the Federal Arbitration Act (FAA).

An employee sued Epic Systems in federal court, contending that it had violated the Fair Labor Standards Act (FLSA) and state law by misclassifying him and fellow employees, and thereby unlawfully deprived them of overtime pay. Epic Systems moved to dismiss the claim and compel individual arbitration pursuant to the agreement. The Plaintiff responded that the arbitration clause violated the NLRA because it interfered with employees’ right to engage in concerted activities for mutual aid and protection and was therefore unenforceable. The district court agreed and denied Epic Systems’ motion.

The Seventh Circuit Court of Appeals upheld the district court’s determination, stating that the agreement ran straight “into the teeth” of  the employees’ Section 7 right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, and that contracts that stipulate away employees’ Section 7 rights or otherwise require actions unlawful under the NLRA are unenforceable. 

In May, the United States Department of Labor  issued its final rule updating the regulations governing the exemption of employees from the minimum wage and overtime pay protections of the Fair Labor Standards Act. Significant components of the final rule are as follows:

1. Sets the standard salary level at $913 per week or $47,476 annually for a full-year worker;

2. Sets the total annual compensation requirement for highly compensated employees subject to the duties test to $134,004.

3. Allows employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level, so long as they are provided on a quarterly or more frequent basis; and

4. Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption.

Notably, the final rule makes no changes to the duties test. Employers have until December 1, 2016 to comply with the new rule.

In March, the Second Circuit issued a significant decision in ruling that a human resources director can be held personally liable under the FMLA.

 In Graziadio v. Culinary Institute of America, the Plaintiff sued her former employer, alleging that she was terminated in violation of the FMLA and the ADA after taking leave to care for her son’s medical issues. Specifically, the Plaintiff requested and was granted FMLA leave to care for her son’s diabetes. On the date of her return to work, her other son broke his leg. As a result, the Plaintiff requested additional leave, including intermittent leave. The Culinary Institute of America (“CIA”) countered that, despite several requests, the Plaintiff failed to provide medical information certifying the need for intermittent leave. When the Plaintiff asked for what specific information was needed, CIA’s Director of Human Resources allegedly refused to provide details and informed the employee that it was her responsibility to provide complete medical information without any guidance from CIA. Eventually, the Plaintiff was terminated for job abandonment.

 The Plaintiff filed suit, claiming retaliation and interference in violation of the FMLA, and discrimination on the basis of her association with her son in violation of the ADA. In addition to naming the CIA as a defendant, she also personally named its Director of Human Resources.

 The District Court granted summary judgment in favor of CIA and the Human Resources Director, which included a finding that the Human Resources Director was not an “employer” under the FMLA. The Second Circuit reversed, finding that the Human Resources Director could be considered an “employer,” and remanded the case for a jury trial.

 In support of its finding, the Second Circuit relied on the “economic realities” test utilized in Fair Labor Standards Act cases. Pursuant to this test, a manager may be considered an employer if they have the power to control the employee. In making this determination, courts consider the totality of the circumstances based on a set of nonexclusive and overlapping factors including whether the employer: (1) has the power to hire and fire the employees; (2) supervises and controls employee work schedules or conditions of employment; (3) determines the rate and method of payment, and (4) maintains employment records.

 Under this test, the Circuit Court found that there was adequate evidence to indicate that the Human Resources Director sufficiently controlled the Plaintiff’s employment to be subject to liability under the FMLA.

 The application of the “economic realities” test in the FMLA context is groundbreaking, and means an increased risk of individual liability for human resource professionals, managers, and supervisory personnel.