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May 2016

On May 18, 2016, the U.S. Department of Labor published final regulations under the Fair Labor Standards Act (“FLSA”) that more than double the minimum salary level necessary to be exempt from the Act’s overtime rules.  While the changes affect all businesses subject to the FLSA, broadcasters in particular may feel the impact of the changes given the staffing models used by many TV and radio stations. The new requirements will go into effect on December 1, 2016, and broadcasters need to take steps to adapt to, and minimize the impact of, those changes prior to that deadline.

The Fair Labor Standards Act (“FLSA”) is the federal law governing wage and hour requirements for employees.  Pursuant to the FLSA, employers must pay employees a minimum wage and compensate them for overtime at 1.5 times their regular rate of pay for any time worked exceeding 40 hours in a workweek unless those employees are exempt from the requirement. On May 18, 2016, the Department of Labor issued a Final Rule that effectively doubled the minimum salary threshold for certain types of employees to be exempt from the FLSA’s overtime rules, and significantly raised the salary threshold for other types of employees. As a result, many currently exempt employees whose salaries are below the new thresholds will soon be eligible for overtime pay. The White House projects the change will impact over four million previously exempt American employees.

Although the FLSA applies to almost all employers, it contains exemptions for certain types of employees at small-market broadcast stations. The Final Rule does not affect these specific broadcast industry exemptions, but will affect many other currently exempt employees in the broadcast industry who, unless they receive salary raises, will soon become eligible for overtime pay.

This Advisory only addresses federal law. Some state laws impose stricter standards than federal law as to which employees are exempt from overtime pay. Employers must ensure that they also meet the requirements of any applicable state or local employment laws.

Overview

The FLSA requires employers to pay non-exempt employees an overtime rate of 1.5 times their regular rate for all hours worked over 40 hours per workweek. However, the FLSA exempts from its overtime rules certain classes of employees who are paid on a salary basis and meet specific “white collar” duties tests. The Department of Labor’s Final Rule increases the minimum salary necessary for these classes of employees to be deemed exempt from the FLSA’s overtime rules, but does not alter the duties tests for those exemptions.  (Continued…)

A PDF version of this entire article can be found at A Broadcaster’s Guide to the U.S. Department of Labor’s New Overtime Exemption Requirements.

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With the unprecedented popularity of social media, employees have increasingly used LinkedIn and other online forums to network for business and social purposes. When the line between personal and business use is blurred, litigation may ensue. A federal court recently ruled that an employer did not violate federal computer hacking laws by accessing and altering its recently departed CEO’s LinkedIn account, but that the former CEO could proceed to trial on her state law misappropriation claim. In addition, California, Illinois, and Massachusetts recently joined Maryland in enacting laws prohibiting the practice of requesting access to prospective employees’ password-protected social media accounts.

In Eagle v. Morgan, et al., Linda Eagle, former CEO of Edcomm, Inc. (“Edcomm”), filed a complaint in U.S. District Court in Pennsylvania alleging that Edcomm hijacked her LinkedIn social media account after she was terminated. While Eagle was CEO of Edcomm, she established a LinkedIn account that she used to promote Edcomm’s banking education services, to foster her reputation as a businesswoman, to reconnect with family, friends and colleagues, and to build social and professional relationships. Edcomm employees assisted Eagle in maintaining her LinkedIn account and had access to her password. Edcomm encouraged all employees to participate in LinkedIn and contended that when an employee left the company, Edcomm would effectively “own” the LinkedIn account and could “mine” the information and incoming traffic.

After Eagle was terminated, Edcomm, using Eagle’s LinkedIn password, accessed her account and changed the password so that Eagle could no longer access the account, and then changed the account profile to display Eagle’s successor’s name and photograph, although Eagle’s honors and awards, recommendations, and connections were not deleted. Eagle contended that Edcomm’s actions violated the federal Computer Fraud and Abuse Act (“CFAA”), Section 43(a) of the Lanham Act, and numerous state and common laws. In an October 4, 2012 ruling on the company’s summary judgment motion, U.S. District Judge Ronald L. Buckwalter dismissed Eagle’s CFAA and Lanham Act claims against Edcomm but held that Eagle had the right to a trial on whether Edcomm had violated state misappropriation law and other state laws.

The Eagle case is just one example of how the absence of a clear and carefully drafted social media policy can lead to protracted and expensive litigation. This area of law appears to be garnering increasing attention on the legislative front as well as the judicial front, as three more states recently enacted laws prohibiting employers from requiring, or in some cases even requesting, access to prospective employees’ social media accounts. The attached chart includes more detail about the California, Illinois, Massachusetts and Maryland laws and the provisions of similar legislation pending in the various states and in the U.S. Congress.

A common theme connects the Eagle case with the recent password access legislation: the importance of defining the lines of ownership and demarcating the boundary between the professional and the personal. If Edcomm, for example, had established a LinkedIn account for its CEO’s use and had asserted its property interest in the account at the outset of the employment relationship, Edcomm’s CEO would have had no reasonable expectation of ownership in it. Under that scenario, Edcomm likely would not be facing trial on a misappropriation claim. Similarly, the social media password legislation definitively declares that employers and prospective employers have no right to access the social media accounts that applicants and employees have established for their personal use.

In addition, as explained in our recent Client Alert on enforcement actions under the National Labor Relations Act in connection with employer discipline of employees for social media postings, employer responses to employee use of social media can also result in government agency action against employers. These developments all point to the same message: employers wishing to avoid legal risk should be proactive in implementing well-defined policies and procedures relating to the LinkedIn, Pinterest, Twitter, Facebook and other social networking and media accounts of prospective, current and former employees, including clearly identifying rights to those accounts when the employee leaves the company.

A PDF version of this article can be found here, which includes a chart summarizing State and Federal Social Media Bills.

To read prior Client Alerts related to this subject, click on the links below:

Client Alert, First NLRB Decisions on Social Media Give Employers Cause to Update Policies, Practices

Client Alert, Employ Me, Don’t Friend Me: Privacy in the Age of Facebook