West Philadelphia, born and raised; I’ve always had dreams of making it in L.A. Years of hard work and look what I’ve done—made it to the land of sand and sun.
During my time at West Chester University of Pennsylvania, I spent most of my days buried under books in the library. In between study sessions, I could be found playing for the University’s men’s ice hockey and lacrosse teams. Later, while attending Pepperdine University School of Law, I served as Editor-In-Chief of the Journal of Business, Entrepreneurship, and the Law. I also competed in the American Bar Association’s National First Amendment Media Law Moot Court Competition, where I won the competition, was awarded Best Brief, and earned the distinction of Best Oral Advocate.
As a young attorney, I bring a unique perspective to the table: I understand what it means to be an employer and an employee. My first job was at a Dairy Queen in Pottstown, Pennsylvania, I spent nearly a decade working in the retail industry, and I successfully launched a Los Angeles-based athletic apparel line. My retail and hospitality experience, coupled with my experience as a business owner allows me to recognize the hurdles Stokes Wagner’s clients face in the hospitality industry. In short, I am no stranger to the intricacies of employment relationships, and I appreciate that preventative measures help our clients move forward seamlessly and successfully.
When I’m not at the office, you can find me playing ice hockey and lacrosse with my brothers, snowboarding, riding my motorcycle, or slowly building my vintage record collection.
California Supreme Court Adopts "ABC Test"—Sets Stricter Standards for Classifying Independent Contractors
May 4, 2018 • Ikedi O. Onyemaobim
Category: Legal Updates
Determining whether a worker is properly classified as an employee or independent contractor can be difficult. California recently made this determination less challenging by providing a more rigid test.
On Monday, April 30, 2018, the California Supreme Court handed down a groundbreaking decision in Dynamex Operations West, Inc. v. Superior Court, further clarifying the standard for determining when workers should be classified as independent contractors or employees.
The Dynamex Case
Charles Lee and Pedro Chevez were hired by Dynamex as delivery drivers to transport letters, parcels and packages. In 2004, after having classified its drivers as employees in previous years, Dynamex re-classified all of its drivers as independent contractors. The following year, several Dynamex drivers—including Charles Lee and Pedro Chevez—sued the company, claiming it misclassified them as independent contractors, in violation of California law. Specifically, they alleged that because the tasks they performed as independent contractors were the same as the tasks they had performed when they were classified as employees, the drivers had been improperly classified.
After nearly two decades of litigation and several appeals to the California Court of Appeal, the Dynamex case—and the issue of how to classify workers—came before the California Supreme Court. Ultimately, the Court found that the “ABC” test is most appropriate test for determining whether a worker is an independent contractor or an employee.
The “ABC” Test
Under the newly-adopted ABC test, a worker is presumed to be an employee under the California Wage Orders unless the hiring entity satisfies its burden by proving a worker is, in fact, an independent contractor. A hiring entity may satisfy its burden by proving each of the following three factors:
(A) that the worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact; and
(B) that the worker performs work that is outside the usual course of the hiring entity’s business; and
(C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.
What does this mean for employers? The Dynamex decision not only broadens the definition of “employee” under the California Wage Orders, it provides a framework for compliance with the ABC test. Additionally, it places an affirmative burden on employers to defend their classification of workers as independent contractors. While the newly adopted “ABC” test further restricts employers’ proper classification of independent contractors, it should provide greater certainty in determining whether workers are properly classified.
Misclassification of can result in considerable liability exposure in the context of wage and hour compliance. As a result, California employers should confer with legal counsel to thoroughly re-evaluate worker classifications under the “ABC” test to ensure full compliance with California law.
For a PDF version of this article, click here to download.
April 30, 2018 • Ikedi O. Onyemaobim
Category: Legal Updates
In November 2017, the Ninth Circuit (covering California, Washington, Oregon, Nevada, Hawaii, Alaska, Idaho, Arizona, Montana) decided that the Fair Labor Standard Act’s (“FLSA”) hourly minimum wage requirement applies to weekly per-hour averages rather than actual per-hour pay. This means that the appropriate way to determine minimum wage compliance under the FLSA during any workweek is by calculating the pay earned during the entire workweek, rather than the pay earned in each individual hour of the workweek.
In Douglas, et al. v. Xerox Business Services, LLC, plaintiffs were customer service representatives whose primary duties were to answer incoming calls, attend meetings, attend trainings, and monitor emails. Each plaintiff earned a different rate of pay depending on the task performed and the time spent on each task. The Xerox pay system averages pay for all hours worked in a week and increases it to minimum wage in any weeks where the average variable compensation fails to meet this level. Under this practice, no employee’s average weekly pay ever fell below the minimum wage.
The plaintiffs sued, arguing that they were entitled to back pay for every hour worked at a rate lower than the minimum wage. Specifically, the plaintiffs argued that the FLSA did not allow averaging over a longer period of time, but rather measures compliance on an hourly basis.
Ultimately, the Ninth Circuit rejected plaintiffs’ claims and concluded that Xerox had not violated the FLSA. The court accepted Xerox’s position that compliance with the FLSA’s minimum wage provisions is determined on a weekly rather than an hourly basis.
What Does This Mean For You? As a result of the Ninth Circuit’s holding, the hourly minimum wage requirement now applies to weekly per-hour averages rather than actual per-hour pay. And, although the FLSA may be read to require either hourly or weekly compensation, the Ninth Circuit highlighted the fact that the Department of Labor has interpreted and enforced the minimum wage provisions of FLSA on a workweek basis since 1938. In short, this decision avoids a split among the circuits and further reinforces the ability of employers to assure compliance with minimum wage requirements by averaging total pay divided by the number of hours worked in a given workweek.
For more legal news, check out our quarterly newsletter for April 2018!
New Primary Beneficiary Test and U.S. Department of Labor’s Revised Guidance Provides Employers with More Flexibility for Internship Programs
January 17, 2018 • Ikedi O. Onyemaobim
Category: Legal Updates
Prior to 2018, the United States Department of Labor (“DOL”) had applied a rigid six-part test to determine whether interns must be treated as employees or unpaid interns. However, on January 5, 2018, the DOL announced that, in an effort to eliminate confusion and align itself with recent case law, it would adopt the “Primary Beneficiary” test to determine whether interns are employees under the Fair Labor Standards Act (“FLSA”).
Primary Beneficiary Test
Under the Primary Beneficiary Test, courts evaluate whether the intern or the employer is the primary beneficiary of the work relationship. In doing so, the new test focuses on what interns receive in exchange for work performed, is less restrictive on the court’s ability to examine the economic reality of the intern’s relationship with the employer, and emphasizes the fact that, unlike the employer-employee relationship, interns enter the intern-employer relationship with the expectation of receiving educational benefits.
Evaluation of Unpaid Internship Programs
Unlike the DOL’s 2010 test, the seven factors of the Primary Beneficiary Test are not exhaustive and no one factor is dispositive. In evaluating internship programs under the new test, courts consider the extent to which:
The intern and the employer understand that the intern is not entitled to compensation;
The internship provides training that would be given in an educational environment;
The duration of the internship program is limited to the period when the internship educates the intern;
The internship corresponds with the academic calendar;
The intern’s completion of the internship program entitles the intern to academic credit;
The intern’s work complements the work of paid employees while providing significant educational benefits; and
Both parties understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship program.
Each factor of the Primary Beneficiary Test is used to determine which party is the primary beneficiary of the intern-employer relationship. If the employer is the primary beneficiary, an employment relationship is established and the intern must be paid wages. But, if the intern is found to be the primary beneficiary, an unpaid arrangement will likely be acceptable.
What Does This Mean for Employers?
With the DOL’s recent decision to adopt the Primary Beneficiary Test comes a fresh opportunity for employers to reevaluate their unpaid internship programs, policies and recruiting materials. However, employers should be aware that the DOL’s guidance only applies to federal law, which means state and local governments may impose more stringent requirements. Also, employers should be conscious of the fact that the new test and the DOL’s guidance are limited to private sector for-profit employers—meaning all pre-January 5, 2018 laws specific to unpaid internships in the religious, charitable and government sectors remain unchanged. Lastly, despite the increased flexibility offered to private sector employers by the Primary Beneficiary Test, unpaid interns still cannot be used to displace the work of paid employees and an employer’s legal obligation to pay wages for services performed cannot be circumvented merely by labeling the work relationship an internship.
For a PDF version of this article, click here.
Security Shortcomings Exposed By Las Vegas Massacre Prompt Sweeping Security Overhaul Discussions Among Hotels In The United States
October 5, 2017 • Diana Dowell, Ikedi O. Onyemaobim
On Sunday, October 1, 2017, a gunman shot into a crowd of 22,000 people from his 32nd-story room in the Mandalay Bay Resort and Casino. After 11 minutes, 59 people were killed and more than 500 were injured. Whether hotels can or will respond to this tragedy with security measures capable of preventing future mass shootings remains to be seen. In the wake of this tragedy, however, hotel security practices undoubtedly will come under severe scrutiny. As many of our hospitality clients have contacted us over the past three days to discuss their security obligations, we thought this short article might prove helpful by identifying certain legal principles applicable to hotel security and by outlining several security measures hotels will likely evaluate and implement in the near future.
An Innkeeper’s Liability for Guest Safety
Innkeepers are obligated to exercise “reasonable care” for the safety of their guests. This duty of reasonable care requires vigilance in the protection of guests from foreseeable risks — a duty that requires not only warning guests, but also adequately policing the hotel premises. More specifically, innkeepers and hoteliers are liable for injuries to guests caused by the accidental, negligent, or intentional harmful acts of other guests, patrons, or strangers, if, by the exercise of reasonable diligence, the innkeeper could have discovered that such acts were being done or were about to be done and could have protected against harm either by controlling the conduct or giving an adequate warning to allow guests to avoid harm. That being said, innkeepers are not required to anticipate and guard against the unusual, unlikely or abnormal, or against something that reasonable care, skill, or foresight could not have discovered or prevented.
In the context of a guest suffering a violent assault by another guest, a hotel may be held responsible if the hotel knew or should have known that the offending guest may become violent and it could have evicted that attacking guest. Guests of an inn, hotel, restaurant, or similar establishment are entitled to rely on that establishment operator to exercise reasonable care for their safety. In addition, the operator may provide its own security employees or use the services of a private security vendor. Further, innkeepers owe a duty to protect strangers from the acts of guests while at the establishment. Nevertheless, innkeepers are liable to such strangers for the act of a guest only when the hotel knew or, by the exercise of ordinary care, could have known the guest was likely to commit some act resulting in injury to the stranger.
Whether a hotel is liable to its guests or strangers for a violent act by one of its guests primarily hinges upon the foreseeability of the act. Unfortunately for Mandalay Bay, hindsight is 20/20 and many questions will be asked about whether it should have noticed a guest making multiple trips to equip his 32nd floor room with an arsenal of guns and ammunition.
Possible Next Steps in Hotel Security
It is no easy feat to balance the safety of guests with their desire for privacy. Also, the many intrusions and encumbrances of thorough security measures may at times seem antithetical to notions of luxury and hospitality. Most hotels have safety, security, and emergency response procedures in place that are reviewed frequently, tested, rehearsed and updated accordingly. Still, hotel security and guest safety measures remain imperfect. In fact, advances in hotel security have largely developed in response to breaches in security, changes in technology and other unfortunate acts. Admittedly, security in the hospitality industry is more reactive than proactive. However, given the devastation caused during the Las Vegas massacre, hotels must become vigilant in pursuing preventative measures.
While many hotels already use closed-circuit surveillance systems, one such preventative measure may include installing state-of-the-art window locks and sensors to alert security personnel and law enforcement when a hotel window has been opened or broken. Additionally, many hotels may need to revisit their firearm policies to decide whether they will prohibit firearms on premises, or place restrictions on firearm possession, such as allowing guests to bring permitted, unloaded firearms for storage purposes only, and requiring that firearms remain locked in a firearms safe or container.
With regard to the implementation of security checkpoints, some hotels may consider installing entryway deterrents, such as dog sniffs, metal detectors, X-ray machines and the like. However, despite having proven to be an effective method of deterring individuals from checking in at airlines with firearms, establishing a visible security presence at hotel entryways collides with the immense premium hotel guests place on their privacy. And, while replacing seemingly loose hotel security protocols with more robust security measures that target guest luggage may be an obvious solution for some, the fact remains that such deterrents often make guests feel less safe — a concern that many in the hospitality sector can ill-afford to ignore.
In short, any overhaul in hotel security practices would likely have to be at an industry level. Absent an industry-wide change in security practices, it is unlikely that hotels will undertake the expense of implementing state-of-the-art security measures. This is especially true if hotels fear a potential loss of business to competitors with less intrusive security measures. What is likely, however, is that the impact of the Las Vegas massacre will force those in the hospitality industry to take a closer look at their security measures and adapt accordingly.
What does this mean for you? Before October 1, 2017, it may not have been reasonably foreseeable that a guest was going to check in to a hotel, arm himself, and use his room as a turret. Now, it very well may be. As a result, we suggest your hotel add this scenario to its list of considerations as it refines or develops a security program. At bare minimum, your hotel should ask itself (1) what measures are in place to prevent this type of tragedy; (2) if it occurred, what guidance is in place to ensure an appropriate and immediate response; and, (3) on a more mundane level, does the hotel’s insurance policy provide or exclude coverage for such events?
Hotel security will never be perfect, but hotels have a longstanding legal duty to protect their guests and other visitors. Let’s all take a moment and reflect upon what else we may be able to do to ensure that safety remains a cornerstone of hospitality.
By Diana L. Dowell and Ikedi O. Onyemaobim
September 12, 2017 • Ikedi O. Onyemaobim
Category: Legal Updates
On September 6, 2017, in Marsh v. J. Alexander’s, LLC, the Ninth Circuit refused deference to the United States Department of Labor’s (the “DOL”) 80/20 Rule, which interprets the “tip credit” under the Fair Labor Standards Act (“FLSA”). The Ninth Circuit held that the 80/20 Rule is inconsistent with the FLSA because the Rule improperly focuses on an employee’s individual duties, rather than an employee’s distinctive dual positions.
The FLSA requires all employers to pay their employees an hourly minimum wage of $7.25. However, the FLSA also provides a special provision for “tipped employees,” who are engaged in an occupation in which they customarily receive more than $30 in tips each month. Under this provision, an employer may claim a “Tip Credit” against the minimum wage for tipped employees. In effect, the Tip Credit, which is commonly applied by employers in the food and hospitality industries, employers may pay their tipped employees $2.13 hourly. With respect to employees who work for the same employer in “dual jobs” (where one position is tipped, and the other is not), an employer is prohibited from applying the Tip Credit for any hours the employee works in a non-tipped position. However, an employer may still apply a tip credit when an employee performs duties related to the tipped position. In an effort to conceptualize the application of the Tip Credit to dual jobs, the DOL outlined the 80/20 Rule, which requires that an employee be paid the full minimum wage for all work “related” to tipped work if such work exceeds 20 percent of the employee’s weekly hours.
In Marsh, the Ninth Circuit evaluated the application of the 80/20 Rule in nine consolidated cases brought by servers and bartenders. The named plaintiff explained that he was a tipped employee, but he alleged that he spent more than 20 percent of his work week performing the responsibilities of a non-tipped position (brewing coffee, cleaning soft drink dispensers, stocking ice, etc.). Accordingly, the Plaintiff argued that his employer violated the 80/20 Rule because he applied a credit for all the hours the Plaintiff worked, even when performing related side duties that did not earn tips.
The Ninth Circuit refused to apply the 80/20 Rule, explaining that the Rule improperly created a new regulation that interfered with a proper analysis of dual jobs. The Court explained that under the 80/20 Rule, an employer is required to track every moment of an employee’s duties to determine when a tip credit properly applies. This strays from the original dual job analysis, which only looks to circumstances where an employee holds two distinct positions, rather than reviewing the employee’s individual duties.
What does this mean for you? The Ninth Circuit created a circuit split with respect to the application of the 80/20 Rule. For employers within the Ninth Circuit (Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington), the Court has held that the tip credit properly applies to employees with dual jobs, without necessarily outlining the employee’s individual duties. As such, employers in these states are not required to track the duties an employee performs to analyze under the 80/20 Rule.
For more legal updates, check out our update for September 2017!
September 1, 2017 • Ikedi O. Onyemaobim
Category: Legal Updates
On July 17, 2017, the United States Citizenship and Immigration Services (“USCIS”) released a revised Form I-9.
While the revised form does not change storage and retention rules, it does include subtle changes to the form’s instructions. For instance, the instructions to Section 1 have been revised to remove “the end of” from the phrase “the first day of employment.” Also, the form introduces a new name for the Department of Justice’s Office of Special Counsel for Immigration-Related Unfair Employment Practices: The Immigrant and Employee Rights Section.
The most notable change to the Form I-9 relates to USCIS’s List of Acceptable Documents, which has been revised to reflect the most current version of the certification of report of birth issued by the U.S. State Department. Specifically, the new Form I-9 compiles all birth certificates issued by the State Department (Form FS-545, Form DS-1350 and Form FS-240) into selection C#2 in List C. The revised form also renumbers all List C documents, except the Social Security card.
The USCIS has also added the Consular Report of Birth Abroad (Form FS-240) to List C, which is issued to employees born overseas to parents who are American citizens. Employers completing the Form I-9 online will now be able to select Form FS-240 from the List C Section 2 and Section 3 drop-down menus. Also, employers using E-Verify will be able to access Form FS-240 when creating cases for employees who present this form to verify employment eligibility.
What does this mean for you? Effective September 18, 2017, all employers must begin using the new Form I-9. For now, employers will be able to use the revised version or continue using Form I-9 with a revision date of 11/14/16 until September 17, 2017. Failure to comply by the September 18, 2017 deadline may result in fines.
For more legal updates, check out our update for September 2017!