Litigation Lens: The Intersection of Disability Accommodation and Wage and Hour Compliance

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Michael Nail: Ogletree podcast listeners, Michael Nail here with you again. I’m a litigator in Ogletree’s Greenville, South Carolina office, and I’m coming at you with the fourth episode of Litigation Lens, where our Ogletree attorneys will bring the law to life with recent noteworthy employment law cases, coupled with practical takeaways. During this series, as you’ll know, you’ll hear about real cases with real outcomes analyzed by Ogletree lawyers in numerous practice areas. And today you have the privilege of listening to the fourth episode, which is focused on a recent case in the United States District Court for the Southern District of New York, and involves disability related issues and wage and hour issues analyzed under New York state law. And with me today, again, I have Sarah Zucco from our New York City office.
How are you doing today, Sarah?

Sarah Zucco: I’m good. How are you?

Michael Nail: Awesome. Well, good to have you back. And we’re going to focus on the ADA issues again under New York state law disability related issues, but today we’re also going to add in some wage and hour issues as well for the listener. So, there’s a lot going on in this case. And as I typically do, I’m going to start by giving you some basic facts about the case and then turn it over to Sarah to discuss some takeaways as it relates specifically to the wage and hour issues. So again, there’s a lot going on here. There’s even some bankruptcy issues, some change in corporate ownership, but we’ve really tried to narrow down the facts today to the key facts that the court focused on.

The plaintiff here brought claims against his former employer, and I’m going to refer to that employer as ABC Carpet. Plaintiff worked at ABC Carpet and its predecessor for over 30 years. The company believed that plaintiff was employed as a supervisor of rugs for the predecessor company, and in his role, supervised approximately 15 to 20 full-time employees, which included scheduling their shifts, training new employees, making hiring and firing recommendations, and even disciplining employees when appropriate.

Plaintiff, on the other hand, believes he was never employed as a supervisor and testified that his primary job duties consisted of manual labor. Specifically, he testified he was a rug flipper where he turned rugs for customers in the store to view and to potentially purchase. He said that he did that same work alongside the same employees that the company claimed he supervised. He also alleged that he worked between 47 to 57 hours per week, but the company did not pay him overtime. He also alleges that ABC Carpet paid him on a biweekly basis, thus violating Newark law requirements that he be paid weekly as a manual worker. The company, of course, denied these allegations.

Now, as it relates to the new company, the new company hired him to work as a supervisor of rugs in the shipping and logistics area. And similar to his role with the predecessor company, the new company alleges that he was an exempt supervisor, whereas Plaintiff alleges he was not. The company also claims that Plaintiff never worked more than 40 hours per week, and ultimately that Plaintiff stopped reporting to work. Specifically, the company received multiple letters from Plaintiff’s healthcare provider, which were somewhat conflicting and convoluted.

Then the company claims that it received a call from Plaintiff who informed the company that he could not return to work under any circumstances, that he was unfit to return to work, and that there was nothing the company could do for him. The company also claims that plaintiff admitted there was no accommodation the company could have provided him that would have enabled him to perform the essential functions of his job. But on the other hand, Plaintiff claims that he’s the one who received a call from a company representative who told him to stop sending medical letters and that he was no longer employed. But importantly, in his deposition, after the case was filed, he testified that there was nothing that could be done to help him perform his job.

Now, ultimately, the company eliminated his position due to a decline in rug sales. And following his termination, the plaintiff did not seek any employment because, again, he admitted he’s unable to perform any work. So, he filed a claim and asserted violations of the FLSA, New York labor law, and New York state human rights law for disability discrimination, age discrimination, and wage and hour violations. And the company filed a motion for summary judgment asking the court to dismiss all of his claims, and that’s what we’re here to talk about today.

I’m going to start with the discrimination claim based on a failure to accommodate, and then I’m going to turn it over to Sarah to talk about what the court decided as it relates to the wage and hour issues. As it relates to the discrimination claim based on failure to accommodate, the plaintiff argued that ABC, the company, did not even engage in the interactive process and rather terminated him in hopes of avoiding their obligation under the law. Now, again, this case was analyzed under New York State law, and the New York State disability discrimination law is analyzed very similarly to the ADA claims. In order to establish a prima facie case of disability discrimination, a plaintiff must show, among other elements, that he could perform the essential functions of the job with an accommodation and that the employer refused to provide such an accommodation despite being on notice. And as part of that analysis, both parties must engage in the interactive process to determine whether and how an employer can reasonably accommodate the employee.

Here, however, the court did not determine whether or not ABC sufficiently engaged in the interactive process because it found there was no genuine dispute of material fact that ABC could not have provided any accommodation for the plaintiff to perform the essential functions of his job. Now, specifically, the court latched onto the plaintiff’s deposition testimony that I mentioned earlier, where he testified that his physical condition prevented him from doing his job, that there was nothing that could be done to help him perform his job, and that he couldn’t even perform his job duties that day. Plus, he acknowledged in his deposition as well that he hasn’t sought subsequent employment since his termination because he’s unable to perform any work. So, in light of that, the court granted the company’s summary judgment on the discrimination claim based on failure to accommodate without even looking into or determining whether the company engaged in the interactive process.

Now, the plaintiff also filed discrimination claims based on age and disability based on the termination. And among other things there, the court also held that the plaintiff was not even qualified for the position because he admitted that he couldn’t work. So it all came down to what he testified to in his deposition and all of those claims that I just mentioned, because he testified that he wasn’t able to work, the court granted summary judgment on behalf of the company and dismissed all of those claims.

Now, Sarah, why don’t you tell us what the court decided as it relates to the wage and hour issues under New York State law?

Sarah Zucco: Sure. With respect to the overtime claim, as Michael said, the company argues that Plaintiff was an exempt employee under the Fair Labor Standard Act, the FLSA, and therefore, he was not entitled to overtime pay. Additionally, the company argues that he never worked more than 40 hours a week. Therefore, no overtime pay would be owed regardless of whether he’s exempt or not exempt under the FLSA.

Under the FLSA and the New York labor law, which is New York’s wage and hour statute that follows the FLSA with respect to overtime claims, employers are required to pay overtime at a rate of at least one and one half times the employee’s regular rate for hours the employee works in excess of 40 hours per week. However, the FLSA and New York labor law provide exemptions that include certain employees from being owed overtime pay if they work more than 40 hours per week. Specifically, these are employees who are considered employed in a bonafide executive, administrative, professional, computer, and even outside sales capacity, and then meet the corresponding duties and salary tests that are for each of these positions. If you meet that, then you don’t have to be paid overtime if you work more than 40 hours per week under both federal and state law.

Although the company claims that the plaintiff here was exempt from overtime, the court didn’t even analyze or address this issue because the court acknowledged that Plaintiff’s position as supervisor of rugs, he never worked more than 40 hours per week. Again, they focused on his deposition testimony where he admitted that he consistently worked from 10:00 AM to 6:00 PM with a meal break, five days a week, and didn’t work, at any point, over 40 hours per week. So they said that no matter what, he wouldn’t be entitled to overtime pay because he never worked more than 40 hours a week and then didn’t get into whether he’s exempt under the FLSA or the New York labor law.

So, similar to the disability discrimination claims, the court really focused on Plaintiff’s testimony in determining that there was no genuine issue of material fact.

Michael Nail: Well, let me stop you right there before…I know you were going to speak about this potentially in our takeaways portion at the end, but if the court did have to look into whether he was exempt, based on these facts, how do you think they would’ve analyzed that and potentially ruled?

Sarah Zucco: Here, the company was claiming that Plaintiff was exempt under the bonafide executive exemption, which involves the duties test for this, in addition to the salary component, involves supervisory responsibilities. So, if the court found that the company’s position on what plaintiff was doing as supervisor of rugs is true, such as that he supervised 15 to 20 employees, he would schedule their shifts, he would train new employees, he would be involved in making recommendations on hiring and firing and discipline, then I think the court would find that he was exempt and not entitled to overtime. But if the court found that Plaintiff’s version of his job responsibilities and duties were true and were supported by the record, then I think it would go the other way since Plaintiff alleges that he was a rug flipper and not a supervisor and that he didn’t supervise these 15 to 20 employees. Rather, he was just working alongside of them, and that if there was any issue with discipline or they had an issue with pay or any complaint, these employees would go to the vice president of operations, not plaintiff. And he said he spent most of his time stocking rugs or flipping them over for customers.

So, it’s really going to…I think the court would have to…if both were supported by facts on the record, then I think there would be a genuine issue of material fact, and the court might have not been able to rule on this at the summary judgment phase.

Michael Nail: Absolutely. Okay. That makes sense to me. So again, a lot of it’s going to come down to the facts and the testimony and the record. I agree with you. If there was some conflicting facts there, then the court would probably say, “Look, there’s enough genuine dispute to allow this to advance,” but again, they didn’t even have to get to that issue, did they?

Sarah Zucco: Yeah. But yeah, it’s going to go down to what plaintiff was actually doing in that role, whether he was an exempt under the executive exemption.

Michael Nail: Okay. Awesome. And what else did the court decide as it relates to the wage issues? I think there was a notice aspect potentially and whether he should have been paid on a weekly basis.

Sarah Zucco: Yeah. Plaintiff also alleges a few state law claims that are specific to New York with respect to notice and wage statements. So under the New York labor law, employers are required to provide, with each payment of wages, a wage statement that contains certain required information such as the dates that are covered by this statement, the deductions that were made, the employee’s pay rate, their overtime rate, the number of hours that are worked at the regular rate, as well as the number of hours worked at the overtime rate, if that’s applicable, among other requirements in this wage statement.

The court found that Plaintiff did not provide anything to dispute this. In fact, the employer provided the pay statements that they provided with each paycheck. So the court ruled that there’s no genuine issue of material fact and ruled in favor of the company on the wage statement claims.

Similarly, New York has a wage notice requirement that at the time of hire, you’re to be provided with a notice that provides your pay rate, your overtime rate, if that’s applicable, as well as when you’d be paid on what’s the payday, as well as information on the employer. Again, the court found that Plaintiff did not provide any evidence disputing this and ruled in the company’s favor on summary judgment.

Then there was one last state claim. The court analyzed Plaintiff’s pay frequency claim. Specifically, Plaintiff alleges that the company failed to pay him every week since he was a manual worker. He claims that he was a manual worker. Under New York labor law, manual workers are to be paid weekly and they can’t be paid bimonthly, which is what Plaintiff was paid here by the company. The court determined that whether plaintiff was paid timely would depend on whether he was a manual worker. And then the court went into an analysis of that.

The New York labor law defines an employee as a manual worker if they spend 25% of their working time performing physical labors. The court then determined that this was a genuine issue of material fact and denied summary judgment because, once again, Plaintiff is alleging that he would flip rugs and stock rugs throughout the day, which the court said, “If this is true, that would be physical labor under the statute and he would be a manual worker entitled to pay every week.” Whereas the company’s saying, “No, that’s not true. He was a supervisor. He wasn’t performing in physical labor, at least not 25% of the time.” And the court said, “We can’t determine this at this stage. We’re going to deny summary judgment.”

Michael Nail: Okay. Well, the takeaway from me related to my issues that I discussed on the disability side would simply be to remind listeners that the ADA issues, I know we weren’t dealing with the ADA specifically, but even on a state law level, is very fact-specific. As you can see from this case, the court latched onto the deposition testimony. There was a lot of different facts related to what was contained in these medical letters, whether there was an interactive process, who was calling who, but ultimately, the court latched onto that testimony where the employee admitted that he couldn’t work. I know this is the third episode now that we’ve discussed ADA issues, but every single episode has been a different nuance under disability-related laws.

Again, it’s very fact intensive. There’s no one-size-fits-all approach when it comes to these ADA issues or disability-related issues on a state law level. So, I think that’s really important to keep in mind, to analyze all of these issues on a case-by-case basis and to ensure that you’re compliant with any federal, state, and even local laws in that respect.

But what about from the wage and hour side, Sarah, just wrapping things up as far as takeaways? What are some things that you can convey to the listeners in that regard?

Sarah Zucco: One thing that this case shows is a reminder of the importance of keeping payroll and time records because here, the company was able to submit it, and Plaintiff was not able to dispute that he didn’t receive wage statements or wage notices because they existed. So, it’s just a reminder of making sure that you keep those documents, as well as each state has specific notice requirements, as well as pay frequency requirements. So, you should check in your jurisdiction and be familiar with respect to what notices you have to provide, when do you have to provide pay. Here, New York has a specific statute that requires manual workers be paid weekly and they can’t be paid biweekly. So, you should check your jurisdiction to see if they have something similar.

Then one other one is that the court didn’t really get into whether the plaintiff here was exempt or non-exempt. One thing that employers should keep in mind is that if the court were to get into that, they would look at the actual job duties being performed, and that would’ve been the key analysis that would’ve been performed.

Michael Nail: Awesome. Well, thank you so much, Sarah, for joining me again. And to the listener, Sarah and I will continue to look for cases that we think would be interesting for you and have practical takeaways, but we look forward to hearing from you on the next episode.
Thanks again, Sarah.

Sarah Zucco: Thanks, Michael.

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