New York Employment Lawyer Blog

Did you know that 84% of our countries wealth is controlled by the richest 20% of Americans? Some estimate that the concentration of wealth is even worse at the top levels with studies showing that the richest 1% own 50% of America's wealth. Economists say that the concentration of wealth has not reached this level until just before the great depression. It is said that a consumer driven economy like ours cannot function if most the wealth is hoarded by a small fraction of the population. For more information wealth concentration see Americans Vastly Underestimate Wealth Inequality, Support 'More Equal Distribution Of Wealth': Study and Wealth Disparities in U.S. Approaching 1920s Levels.

Our feeble employment laws share some of the blame for the concentration of wealth. For example, look at the anemic Fair Labor Standards Act which is supposed to require the payment of overtime and minimum wage to workers. A recent study of 4,387 low wage workers in New York, Los Angeles and Chicago found that 76 percent of them were not provided with overtime pay and 25 percent were not minimum wage. It is estimated that workers in these three cities lose $56.4 million in lost wages every week. See Working Without Laws. Guess who keeps that $56.4 million?

When it comes to paying our workers, the wealthy business owners are breaking the law and keeping money owed to workers. This contributes to the concentration of wealth. Companies know they can withhold overtime pay until they are sued. They also know that the odds of getting caught are slim and even if they are caught, they just have to pay the wages at that point and often only a fraction of what is due.

The Obama administration enhanced the federal Department of Labor's budget to step up the enforcement of wage theft laws. But Obama is spending more to invade Afghanistan or save some mega bank from its own stupidity. More is needed to turn the tide here at home and transfer wealth back to consumers so they spend money and invigorate the economy.

In my skeptical view, the small fraction of the population that controls the wealth is using that wealth to effectively control the political process to serve their narrow interests. A political solution is not likely. Maybe another great depression is needed to change the status quo because the hoarders of wealth will not let it go any other way.

Jezebel has a recent post entitled "If You're Fat-Phobic, You're Also an Ignorant Bigoted Idiot." Ask yourself, are you fatist? Do you form negative views of someone if they are overweight? People today openly make disparaging comments about overweight people just as they once openly humiliated African Americans.

The Jezebel post starts with the definition of bigot:

big•ot (noun): A person obstinately or intolerantly devoted to his or her own opinions and prejudices; especially : one who regards or treats the members of a group (as a racial or ethnic group) with hatred and intolerance

Admit it, many of us group all overweight people together and make unfounded assumptions about them. This is bigotry. We may assume they are fat because they are lazy and eat junk food. But, this is not accurate. Many people are overweight for other reasons. Jezebel points to Steven N. Blair who is one of the leading experts on the health benefits of exercise and who is an avid runner. But he is also a short fat guy. So there you go, you can't make assumptions about someone due to their weight. People are fat for different reasons including depression, medication, disease, eating disorders etc...

Statistics show that most people in America struggle with their weight. The National Health and Nutrition Examination Survey (NHANES) found that 32.7 percent of U.S. adults are overweight, 34.3 percent are obese and 5.9 percent are extremely obese. Since more a third of our population is obese, discrimination against the obese impacts millions of people.

Some states have employment discrimination laws that protect the obese and overweight. Years ago I handled a weight discrimination case that received world-wide attention. The case involved a woman who worked for a large milk company and the owner fired her for being too fat. The media went crazy over the case and articles appeared around the world and the case was featured on Court TV. In that case, we used a state law that prohibited disability discrimination and obesity was considered a disability under that state's law.

Discrimination against the obese is a serious problem but it is largely ignored. According to the Obesity Action Coalition, "obesity is highly stigmatized in our society. Overweight and obese individuals are vulnerable to negative bias, prejudice and discrimination in many different settings, including the workplace, educational institutions, health care facilities and even within interpersonal relationships."

Just as race discrimination was once socially acceptable in America, weight bias is now accepted. For more information of this subject see the Obesity Action Coalition site.

As you may know, New York and most other states do not prohibit non-compete agreements. In fact, NY courts will enforce these agreements. In California, non-compete agreements have been prohibited since 1850 and many believe that this policy has contributed to the growth of California's economy and especially so in the technology field.

Just this week the National Law Journal ran an article by Richard A. Booth that suggests that California's law against non-compete agreements may actually be good for business — especially the technology business. Mr. Booth argues that without non-compete agreements, companies are forced to retain quality employees with equity or other inducements. He also argues that with out the shackles of non-compete agreements, good employees are free to leave less productive companies at will. He suggests that this freedom of movement creates a more efficient marketplace and allows the best employees to be drawn to the best companies.

In New York, by contrast, good employees get trapped with bad companies by non-compete agreements and this hinders growth as human resources get stuck in poorly run companies. The net effect of non-compete agreements is that employees lose the ability to move and the economy is handicapped. Companies can tie up human resources with non-compete agreements. In my opinion, New York should change its ways and stop letting companies hamper the market place with non-compete agreements.

A few days ago, the Wall Street Journal ran an article entitled "Out of Work, Out of Options and Over the Hill." The piece focused on 55 year old Henry Dietz who has been out of work for 20 months and is now nearly broke. He has tapped out his retirement savings and will soon be unable to pay his mortgage or the college tuition for his kids. He may have to move back in with his mother. He has no job prospects.

Losing your job in New York in your 50s or 60s can be devastating today because new jobs are very hard to find for those in this age group. As the article explains, life as you know it can be over. A drastic change in life style can result. The lesson here is two fold. First and most importantly you should focus on saving money so that you can maintain your lifestyle even if you lose your job, but this may not be possible. Second, if you do lose your job in your 50's or 60's and suspect that age bias was a factor, then seriously consider taking action. Since financial devastation can result, it does not make sense to walk away anymore.

Age discrimination cases have the highest median recovery amount. According to a study by Jury Verdict Research, the median age discrimination verdict from 2003 to 2009 was $332,577. The study found that the probability range for these cases was $85,750 to $775,000. The actual range of recoveries was $25,000 to $53,885,000. As you can see, the verdicts can be substantial in these cases and the higher your salary the higher the award.

Since significant financial recoveries are possible in age discrimination cases, it can pay to challenge your termination if age discrimination was a factor.

A new study of employment law jury award trends concluded that New York disability and age discrimination verdicts had the highest median awards. The study shows that the median jury verdict for disability discrimination cases was $257,048 and the median verdict for age discrimination cases was $256,342. The study covered the period from 2003 to 2009. Race discrimination and sex discrimination verdicts were lower at $200,000.

These verdicts, however, change considerably based upon the court in which they are tried. Federal courts produce much lower verdicts. For example, the median jury verdict in state court for age discrimination is much higher at $332,577 but the median verdict in federal court for age discrimination cases is only $237,207. Likewise, the median state court verdict for disability discrimination cases is $280,356 while the median verdict in federal court is $240,000. Employment discrimination plaintiffs are better off in state court. Also, based on my experience, federal courts are also more likely to dismiss a case.

Both age discrimination and disability discrimination cases tend to fare well in court and especially in state court in New York. These cases often result in favorable verdicts because people can relate to them easily. Most people know that age discrimination happens and that older workers are often treated unfairly. Likewise, disability discrimination cases are also good because people generally do not want to see someone mistreated because they have an illness - the facts can be disturbing in these cases and can result in high verdicts. A disability discrimination case in Florida recently resulted in an $8 million verdict because the employer fired a woman while she was undergoing cancer treatment.

The report jury verdict trends for 2010 was prepared by Jury Verdict Research. I will post more information on these trends in the future.

The Wage & Hour Defense Blog recently published a good post that explained why two federal appellate courts reached different conclusions over the exempt status of pharmaceutical sales representatives. David W. Garland, the author of the post, honed in on the one key factor that seemed to make the difference. According to Mr. Garland, the outcome of these cases turns on the amount of discretion that the sales representatives enjoy. If sales representatives are tightly controlled and supervised by management, then they do not exercise sufficient discretion and do not fall within the administrative exemption and must be paid overtime. On the other hand, if the sales representatives are not closely supervised and run their own sales territory on their own, then they are operating independently and do fall within the administrative exemption and are not entitled to overtime pay.

The administrative exemption can be difficult to apply and that is why courts often come out with conflicting decisions. According to the Department of Labor, all of the following tests must be met in order for the administrative exemption to apply:

• The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week;
• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

This definition is vague and makes it difficult for companies to determine which employees are exempt from overtime pay. This is why pharma sales reps in New Jersey were determined to be exempt from overtime pay, while pharma sales reps across the river in New York are entitled to overtime pay.

New York employees can find themselves entangled in a web of non-compete agreements from current and former employers. A recent client found himself ensnared in such a web and we sorted out the non-compete mess for him. I write this post (with made up names and changed circumstances) so others can learn and avoid the trap.

Joe is a great salesman for Lively Medical Products. He has been selling their patented heart valves for 5 years and Lively loves him. But Godzilla Medical Device Company has a new heart product and they want to hire Joe as their salesman. Godzilla offers to double Joe's salary.

Joe signed a non-compete agreement when he first started with Lively and it prohibited from contacting any of his customers for two years after he left Lively. It also prohibited Joe from selling any products that were considered "competitive products."
Joe told Godzilla about the non-compete agreement that he had with Lively and Godzilla's legal team reviewed it for Joe. Godzilla's new heart product was different than the product Joe sold for Lively so Godzilla's lawyers told Joe that Lively's non-compete would not be a problem. Joe never had his own lawyer review the situation and instead he relied on Godzilla.

Joe resigned his position with Lively and signed an employment agreement with Godzilla. Godzilla's employment contract also contained a non-compete agreement and Joe agreed to the new terms with Godzilla.

As soon as Lively found out that Joe was selling heart products for Godzilla, it had its law firm send a letter to Joe that accused him of violating his non compete agreement. Joe showed the letter to Godzilla and they told Joe to ignore the letter which he did. Ten days later Joe was sued by Lively in federal court.

Joe showed the lawsuit to Godzilla and asked them to defend him. Godzilla, however, was not interested in dealing with a lawsuit and determined that it would be better off firing Joe and hiring another salesmen. Godzilla then advised Joe that his employment was terminated.

Joe then found himself without a job and bound by two different non-compete agreements, one with Godzilla and one with Lively. Joe approached the other medical device companies that sold the products he was familiar with and they all liked Joe, but determined his non-compete agreements prevented them from employing him.

Joe was without a job and was basically barred from his industry due to his two non-compete agreements. The other companies in his industry did not want to risk expensive litigation over his non-compete agreements.

Did Joe have any rights? Could he sue Godzilla for messing up his career? No, Joe had no rights and there was nothing he could do now. Joe was an employee at will and Godzilla was free to fire him.

But Joe could have prevented the problem if he had obtained an employment lawyer to help him negotiate a better employment agreement with Godzilla. Joe's employment agreement with Godzilla should have contained a clause in which Godzilla promised to defend him in any suits that concerned his non-compete agreement with Lively. Also, the Godzilla employment agreement should have contained a promise to pay his salary if he was barred from working during the non-compete period. This would have protected Joe. Also, if Godzilla refused to accept these terms, then Joe would have known who he was dealing with and he could have stayed with LIvely.