USDOL/OALJ Reporter: ARB Decision Caselist - August 2016

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ALJ’S DISCRETION ON WHETHER WITNESS WOULD BE COMPELLED TO TESTIFY WHEN HER EXPECTED TESTIMONY WAS ALREADY DOCUMENTED BY ADMISSIBLE EVIDENCE AND RESPONDENT DID NOT CONTEST THE RELEVANT CONTENTION

In Dick v. Tango Transport , ARB No. 14-054, ALJ No. 2013-STA-60 (ARB Aug. 30, 2016), the Complainant contended that the ALJ erred in failing to require the appearance of the Respondent’s former service manager at the formal hearing. The Complainant indicated in the prehearing exchange and the prehearing conference that he expected to elicit testimony from this witness that she had interrupted his required break time more than once to request him to perform company related business.  The Respondent countered that the witness’ testimony was unnecessary because the Respondent did not contest that she made the calls and that the Complainant complained about the calls and that this was demonstrated by documentary evidence.  The ALJ found that the witness’ testimony was not necessary since the allegations against her were set forth in Qualcomm messages and written complaints to the company.  The ARB agreed with the ALJ’s reasoning given the Complainant’s repeated designation of the scope of the witness’ testimony.  The ARB was not persuaded by the Complainant’s argument that the ALJ took advantage of his lack of legal training by expecting him to predict every question.  The ARB pointed out that the Complainant had not shown how the lack of the witness’ testimony affected the ALJ’s decision.  The ARB also noted that the record showed that the ALJ had accommodated the Complainant’s pro se status and accorded him just and evenhanded treatment.

PROTECTED ACTIVITY; COMPLAINT ABOUT INTERRUPTION OF REQUIRED REST BREAKS BY RESPONDENT IS PROTECTED SINCE IT IS “RELATED” TO A COMMERICAL MOTOR VEHICLE SAFETY REGULATION; ALJ’S FINDING THAT INTERRUPTIONS WERE NOT BASED ON A REASONABLE BELIEF OF A VIOLATION BECAUSE THEY WERE DE MINIMIS FOUND BY THE ARB NOT TO BE SUPPORTED BY STATUTE OR PRECEDENT

In Dick v. Tango Transport , ARB No. 14-054, ALJ No. 2013-STA-60 (ARB Aug. 30, 2016), the Complainant repeatedly complained to the Respondent that his prescribed rest had been broken by contact from the Respondent that violated DOT regulations. The ALJ found that this was not protected activity because they did not involve a concern about a specific safety regulation, and because the Complainant did not have a reasonable belief that his employer was violating a motor vehicle safety regulation when making “de minimis” interruptions during his rest period.  The ARB found that the ALJ’s analysis was incorrect.  The ARB stated:

    [A] complainant need not prove an actual violation of a vehicle safety regulation to qualify for protection under Section 31105(a)(1)(A), nor does the statute require that protected activity involve a “specific” safety regulation.   The statute requires only that an employee’s complaint be “ related to a violation of a commercial motor vehicle safety regulation, standard, or order.”   The use of this broad “related to” language signals that the scope of protected activity should be liberally construed.   Indeed, STAA has long afforded protection to complaints “related to safety violations” even if the complaint is ultimately determined to be without merit.   We find no statutory or precedential support for the ALJ’s exclusion of “de minimis” complaints from coverage under the statute. Thus, we vacate the ALJ’s finding that Dick’s complaints about break interruptions do not amount to protected activity and remand for the ALJ to reconsider whether Dick’s belief of a safety violation was objectively and subjectively reasonable.

USDOL/OALJ Reporter at 9 (emphasis as in original) (footnotes omitted).

PROTECTED ACTIVITY; SAFETY COMPLAINTS DO NOT LOSE STATUS AS PROTECTED ACTIVITY ON THE GROUND THAT THE RESPONDENT AGREED WITH THE COMPLAINTS AND CORRECTED THE PROBLEM

In Dick v. Tango Transport , ARB No. 14-054, ALJ No. 2013-STA-60 (ARB Aug. 30, 2016), the Complainant filed a variety of complaints about inoperative equipment, mechanical problems and other concerns with assigned trucks. The ALJ found that these were not protected activity under the STAA because the Complainant did not present any evidence that the concerns were not addressed.  The ARB rejected this reasoning.  The ARB wrote:

[P]rotected disclosures do not lose their protected status because the employer resolves the concern; the fact that “management agrees with an employee’s assessment and communication of a safety concern does not alter the status of the communication as protected activity under the Act, but rather is evidence that the employee’s disclosure was objectively reasonable.” An employer cannot “cure” protected activity or erase that it occurred by admitting to wrongdoing, by apologizing, or by agreeing with the employee about a safety concern.   Dick’s complaints about the trucks can be protected activity even if they were resolved.

USDOL/OALJ Reporter at 10 (footnotes omitted).

ADVERSE EMPLOYMENT ACTION; DESIGNATION OF “OTHER” AS REASON FOR DEPARTURE ON DAC REPORT FOUND NOT TO BE BLACKLISTING

In Dick v. Tango Transport , ARB No. 14-054, ALJ No. 2013-STA-60 (ARB Aug. 30, 2016), the ALJ rejected the Complainant’s contention that the Respondent blacklisted him by indicating “other” as the reason for his initial discharge on his Drive-a-Check (“DAC”) Report.   The ALJ credited testimony that the designation “other” was not damaging information in the context in which it appeared.  The ARB affirmed, stating that “[b]lacklisting occurs when an individual or a group of individuals acting in concert disseminates damaging information that ‘would or could prevent’ a person from finding employment.”

ADVERSE EMPLOYMENT ACTION; CONSTRUCTIVE DISCHARGE NORMALLY BASED ON INTOLERABLE CONDITIONS, BUT MAY ALSO BE ESTABLISHED BY REASONABLE EMPLOYEE’S BELIEF THAT HE OR SHE IS ABOUT TO BE FIRED

In Dick v. Tango Transport , ARB No. 14-054, ALJ No. 2013-STA-60 (ARB Aug. 30, 2016), the ALJ rejected the Complainant’s constructive discharge contention finding that that the Complainant had been treated no less favorably than other employees and had not established that his working conditions were so difficult or unpleasant that a reasonable person would feel compelled to resign. The ARB vacated this finding and remanded for reconsideration because the ALJ had not considered the alternative means of showing constructive discharge of a reasonable employee’s belief that he or she is about to be fired.  The ARB stated:

   The legal standard ordinarily used to determine what constitutes a constructive discharge is whether the employer has created “working conditions so intolerable that a reasonable person in the employee’s position would feel forced to resign.”   Constructive discharge is a question of fact, and the standard is objective:  the question is whether a “reasonable person” would find the conditions intolerable, and the subjective beliefs of the employee (and employer) are irrelevant.   However, as the Board held in Dietz [ v. Cypress Semiconductor Corp. , ARB No. 15-017, ALJ No. 2014-SOX-002 (ARB Mar. 30, 2016)], “that is not the only method of demonstrating constructive discharge.  When an employer acts in a manner so as to have communicated to a reasonable employee that [he] will be terminated, and the . . . employee resigns, the employer’s conduct may amount to constructive discharge.”   Under this standard, an employee who can show that the “handwriting is on the wall” and the “axe is about to fall” can make out a constructive-discharge claim.

   The record contains evidence that following Dick’s reinstatement, he was repeatedly threatened with imminent termination for refusing to accept certain dispatches.   Respondent’s witness, Baxter, testified that, when Dick again refused a load on April 14, 2013, Tango planned to fire Dick, but he quit before Tango was able to fire him.   As the ALJ did not consider this evidence suggesting that Dick reasonably believed that he would be terminated, we vacate the finding that Dick did not establish that he was constructively discharged in April 2013 and remand for reconsideration consistent with Dietz . 

USDOL/OALJ Reporter at 12 (footnotes omitted).

CONTRIBUTING FACTOR CAUSATION ELEMENT; COMPLAINANT NEED NOT PROVE RETALIATORY MOTIVE; FACT THAT RESPONDENT DID NOT REHIRE DUE TO PERCEPTION THAT COMPLAINANT WAS NOT A “HAPPY” EMPLOYEE IS NOT A CONSIDERATION UNDER THE CONTRIBUTING FACTOR ANALYSIS AND IN THIS CASE WAS ONLY A MANIFESTATION OF THE PROTECTED ACTIVITY

In Dick v. Tango Transport , ARB No. 14-054, ALJ No. 2013-STA-60 (ARB Aug. 30, 2016), the ARB found that although the ALJ articulated the correct standard under the STAA for proving causation (i.e., that a complainant must prove by a preponderance of the evidence that his or her protected activity was a contributing factor in the unfavorable personnel action), the ALJ appeared to apply the standard that preceded the 2007 amendments to STAA because he took into consideration the legitimacy of the decision to terminate the Complainant’s employment.  The ARB wrote:

[A]s the ARB has explained in prior cases, the legitimacy of a Respondent’s reasons for adverse actions does not preclude a complainant from demonstrating contributory causation because under the “contributing factor” burden of proof standard a complainant is not required to prove that the protected activity was the only or the most significant reason for any adverse action taken against him—the complainant need only establish that the protected activity affected in any way the adverse action at issue.

USDOL/OALJ Reporter at 14, citing Rudolph v. Amtrak , ARB No. 11-037, ALJ No. 2009-FRS-15,slip op. at 16 (ARB Mar. 29, 2013).   See also Beatty v. Inman Trucking Mgmt. , ARB No. 13-039, ALJ Nos. 2008-STA-20, -21, slip op. at 8 (ARB May 13, 2014) (explaining 2007 STAA amendment on contributing factor standard).

The ALJ also found that although there was temporal proximity between the Respondent’s refusal to rehire the Complainant and protected activity, it did not support a finding of causation because the Respondent’s decision was legitimately based on the perception that the Complainant was not a “happy” employee. The ARB reversed this finding both because it misapplied the pre-2007 analytical framework, and because it was not supported by substantial evidence.  The ARB found that the Complainant’s “unhappiness” (and the Respondent’s reciprocal feelings) were a manifestation, at least in part, of the Complainant’s protected complaints.

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AFFIRMATIVE DEFENSE; RESPONDENT ESTABLISHED BY CLEAR AND CONVINCING EVIDENCE THAT COMPLAINANT WAS FIRED BECAUSE HE WAS ESSENTIALLY A “NON-FUNCTIONING EMPLOYEE”

In Vinnett v. Mitsubishi Power Systems , ARB No. 15-009, ALJ No. 2006-ERA-29 (Aug. 30, 2016), the Complainant asserted on appeal that the ALJ erred in finding that the Complainant’s protected activity was limited only to certain categories of activity. The ARB did not reach this question, but rather summarily affirmed as supported by substantial evidence the ALJ’s determination that the Respondent established by clear and convincing evidence that it would have terminated the Complainant’s employment absent his protected activity.  The ARB stated that the ALJ found that the evidence “’establishes that the Complainant was essentially a non-functioning employee’ even after having been counseled and warned to improve his performance, and that following [a] counseling and warning, ‘Complainant demonstrated that he could not complete assignments in a timely manner, could not multi-task, and could not support the team effort required of this position.’” USDOL/OALJ Reporter at 3, quoting from ALJ’s D&O.

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CIVIL MONEY PENALTY FOR FAIR LABOR STANDARDS ACT VIOLATION; USE OF FIELD OPERATIONS HANDBOOK GRID; FACT THAT RESPONDENT CLOSED ITS BUSINESS DID NOT SUPPORT WAGE AND HOUR DIVISION’S CONCLUSION THAT RESPONDENT HAD THEREBY COMMITTED TO FUTURE COMPLIANCE, ESPECIALLY WHERE THE WHD HAD REFERRED THE CASE TO THE SOLICITOR’S OFFICE TO OBTAIN AN INJUNCTION

In Administrator, Wage and Hour Div., USDOL v. Best Miracle Corp. , ARB No. 14-097, ALJ No. 2008-FLS-14 (ARB Aug. 8, 2016), the Wage and Hour Division (WHD) used the Field Operations Handbook grid for determination of a civil money penalty for Fair Labor Standards Act (FLSA) overtime violations, and used $550 from Column II of the grid as the base level penalty on the theory that the Respondent closure of its business was a form of committing to comply with the FLSA.  While the matter was pending before OALJ, a district court found in collateral proceedings that the Respondent had “brazenly” disregarded FLSA’s overtime requirements. The ALJ rejected the WHD’s interpretation of the grid and used a base penalty from Column III of the grid of $1,100 per violation.  The ARB stated:  “We agree with the ALJ that the Administrator erroneously interpreted the closing of Best Miracle as demonstrating a commitment to comply with the FLSA in the future.  The record evidence supports the ALJ’s finding that closing the business was not a voluntary act warranting limiting the civil monetary penalty.  As the ALJ noted, when the explanations for Column II and Column III of the Field Handbook are read together, the Column II penalty (applicable to employers who agree to future compliance) should only apply where an employer voluntarily agrees to comply with the FLSA in the future and not to situations where the employer is forced to comply by a court injunction or consent decree.”  USDOL/OALJ Reporter at 8.  The ARB noted that when the WHD assessed the CMP, “it was already in the process of taking actions to assure compliance that suggest a concern on the Division’s part that Respondents would continue to violate the FLSA.  The Wage and Hour Division had referred the case against Respondents to the Solicitor’s office for litigation with the intent of seeking an injunction.” Id . at 9.

CIVIL MONEY PENALTY FOR FAIR LABOR STANDARDS ACT OVERTIME VIOLATIONS; ALJ’S AUTHORITY TO INCREASE PENALTY; STATUTORY LIMIT ON PENALTY PER VIOLATION

In Administrator, Wage and Hour Div., USDOL v. Best Miracle Corp. , ARB No. 14-097, ALJ No. 2008-FLS-14 (ARB Aug. 8, 2016), the Wage and Hour Division (WHD) issued a notice of determination that the Respondent had violated the overtime provisions of the Fair Labor Standard Act (FLSA) in regard to 42 employees, and assessed back wages and a civil money penalty (CMP).  The Respondent requested a hearing before a DOL ALJ on the CMP.   While the case was pending before the ALJ, the WHD filed a petition in U.S. District Court seeking to enjoin the Respondent from withholding unpaid back wages.  The District Court found that the Respondent had “brazenly” disregarded FLSA’s overtime requirements and determined that the Respondent owed back wages to 47 employees.  The court enjoined the Respondent from withholding the unpaid back wages and committing future FLSA violations.  Later, the District Court found the Respondent in contempt and ordered the sale of rental property to pay the back wages with post-judgment interest.

The ALJ had stayed the hearing during the federal court proceedings. After the Ninth Circuit affirmed the District Court’s decision, the ALJ lifted the stay.  The WHD Administrator filed a motion for summary decision. The ALJ granted the Administrator’s motion in part, finding that several of the District Court’s findings were precluded from re-litigation.  The ALJ denied the WHD Administrator’s motion for summary decision in part because the motion did not show that the CMP was appropriate.  A hearing was conducted on the sole issue of the amount of the penalty.  Following the hearing, the ALJ doubled the base penalty because the Respondent failed to show a commitment to future compliance.  The ALJ took into consideration the District Court’s contempt order.  The ALJ recalculated the CMP using the grid from the WHD Field Operations Handbook, and came up with $1,168.75 per violation.  The ALJ also used the District Court’s finding of 47 employees rather than the WHD’s 42 employees.

On appeal, the ARB held that the ALJ had the authority to increase the CMP beyond the WHD’s initial assessment, affirmed the ALJ’s finding that the District Court’s contempt order supported a higher CMP, and the ALJ’s recalculation of the CMP using the higher base penalty. The ARB, however, reduced the CMP assessed by the ALJ because the FLSA caps CMPs at $1,100 per violation. See 29 U.S.C.A. 216(e)(2).  The ARB also limited the CMPs to the 42 employees from the WHD’s original assessment.  One member of the ARB dissented in part on the ground that the Respondent should not benefit from the WHD’s having missed five employees. 

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UNDERPAYMENT OF REQUIRED WAGE; CREDIT FOR PAY PERIODS IN WHICH EMPLOYEE WAS PAID MORE THAN REQUIRED WAGE

In Administrator, Wage and Hour Div. v. Efficiency3 Corp. , ARB No. 15-005, ALJ No. 2014-LCA-7 (ARB Aug. 4, 2016), the Respondent failed to pay an H-1B nonimmigrant employee the required wage for several months. In determining the underpayment, the ARB credited the Respondent for several pay periods in which it paid the employee more than the required wage. 

UNDERPAYMENT OF REQUIRED WAGE; EMPLOYEE UNAVAILABILITY EXCEPTION; EMPLOYEE INSUBORDINATION; EMPLOYEE WHO COMES TO WORK EVERY DAY BUT FAILS TO DO HIS ASSIGNED JOB TASKS IS NOT TYPE OF EMPLOYEE UNAVAILABILITY THAT MEETS THE EXCEPTION

UNDERPAYMENT OF REQUIRED WAGE; LACK OF WORK DUE TO LOSS OF CONTRACT IS QUINTESSENTIAL EXAMPLE OF A FAILURE TO PAY THE REQUIRED WAGE DUE TO CONDITIONS RELATED TO EMPLOYMENT

In Administrator, Wage and Hour Div. v. Efficiency3 Corp. , ARB No. 15-005, ALJ No. 2014-LCA-7 (ARB Aug. 4, 2016), the Respondent failed to pay an H-1B nonimmigrant employee (“Mr. Liu”) the required wage for several months. On appeal, the Respondent argued that the “employee unavailability” exception to the  benching provisions applied because the employee was allegedly not “ready and willing” to work because he would not perform certain tasks, such as, train his replacement or provide passwords and “documentation” to the Respondent.  The Respondent was essentially arguing that the employee was a recalcitrant—perhaps even insubordinate—employee, and it should therefore be permitted to dock his pay.  The ARB did not accept this argument, holding that “[e]mployee insubordination does not exempt an employer from its required wage obligation.”  USDOL/OALJ Reporter at 9 (footnote omitted).  The ARB wrote:

   Efficiency3 provides no legal basis for its view that discrete acts of insubordination or workplace conflicts satisfy the “employee unavailability” exception. For one, “ready and willing” is not the legal standard, at least not in the way in which Efficiency3 seems to view it. The ALJ took the phrase “ready and willing” from the testimony of the Wage and Hour Division investigator during the hearing, and in its brief, Efficiency3 picks up on this language.  It is true that an H-1B nonimmigrant being “ready and willing” to work might be relevant to the “employee unavailability” exception. For example, it may be that if an H-1B nonimmigrant is “ready and willing” to work, that would suffice to show that the employee is not, as the regulation articulates it, away from his duties “at his[] voluntary request.”  But just because an H-1B nonimmigrant is not “ready and willing” to do each and every task assigned by his supervisor, that does not mean that the “employee unavailability” exception is satisfied. It doesn’t necessarily mean, for example, that the employee is in a “period of nonproductive status due to conditions unrelated to employment . . . .” In fact, it is not even clear that a failure of an employee to perform specific tasks renders him in a “nonproductive status” at all. Thus, while Mr. Liu’s alleged insubordination might have demonstrated that Mr. Liu was not “ready and willing” to work in some abstract sense of those words—or, at least, it may be relevant to whether he was “ready and willing” to do all the tasks Efficiency3 required of him—it simply does not speak to the relevant question, whether Mr. Liu was in a “nonproductive” status, and if so, whether that was because of “conditions unrelated to employment which [took him] away from his[] duties at his[] voluntary request and convenience . . . or render[ed] [him] unable to work . . . .”

   More importantly, the evidence is clear—indeed, Efficiency3’s President Mr. Zaloom testified to this effect—that the reason for any time period during which Mr. Liu was in fact not working full-time had nothing to do with whether Mr. Liu was “ready and willing” to work: it was that Efficiency3 lost a major government contract. That is the quintessential example of a failure to pay the required wage due to conditions related to employment. If, as Efficiency3 alleges, Mr. Liu failed to perform his job responsibilities, that does not constitute being taken “away from [the employee’s] duties at his/her voluntary request and convenience” or being “render[ed] unable to work,” within the meaning of the “employee unavailability” exception. The examples given in the regulation—“touring the U.S.,” “caring for ill relative,” “maternity leave” and “automobile accident which temporarily incapacitates the nonimmigrant”—make clear that the employee has to be away from work altogether. Here, the evidence is undisputed that Mr. Liu came to work every workday during this period and was in the office for at least eight hours per day.

   The “employee unavailability” exception thus simply does not apply when the employee comes to work every day but fails to do his assigned job tasks. Efficiency3 was Mr. Liu’s employer, and Mr. Zaloom was the President of Efficiency3 and Mr. Liu’s supervisor. It was Mr. Zaloom’s responsibility, as Mr. Liu’s boss, to make sure he performed his job tasks. If Mr. Liu refused to do his job properly, there may well be things Efficiency3, as the employer, could have done—for example, fire him. What Efficiency3 could not do is pay Mr. Liu less than the required wage: doing so violates the H-1B visa provisions of the Immigration and Nationality Act and the Labor Department regulations implementing that Act.

Id . at 9-11 (footnotes omitted).

UNDERPAYMENT OF REQUIRED WAGE; BONA FIDE TERMINATION EXCEPTION TO BENCHING PROVISION NOT ESTABLISHED BY FOREIGN WORKER’S ALLEGED “SELF TERMINATION”

In Administrator, Wage and Hour Div. v. Efficiency3 Corp. , ARB No. 15-005, ALJ No. 2014-LCA-7 (ARB Aug. 4, 2016), the Respondent failed to pay an H-1B nonimmigrant employee (“Mr. Liu”) the required wage for several months. On appeal, the Respondent argued that the “bona fide termination” exception to the  benching provision applied because Mr. Liu allegedly “self-terminated” when he was not “ready and willing” to work because he would not perform certain tasks, such as, train his replacement or provide passwords and “documentation” to the Respondent.  The ARB stated that “[t]he problem with this argument is that any alleged failure on Mr. Liu’s part to perform his job tasks simply does not constitute a ‘bona fide termination’ within the meaning of the regulations. Mr. Liu was on Efficiency3’s payroll. Even if he was not doing his job in the way his employer demanded, that does not mean he resigned or was terminated. Even if Efficiency3 found Mr. Liu’s job performance substandard, the onus would then have been on Efficiency3 to sanction him in some legal way, including perhaps by firing him. It had no authority to pay him less than the legally mandated required wage.”  USDOL/OALJ Reporter at 12 (footnote omitted).

UNDERPAYMENT OF REQUIRED WAGE; ALLEGATION THAT H-1B EMPLOYEE BREACHED PROPRIETARY INFORMATION CONTRACT MIGHT SUPPORT A CIVIL ACTION FOR BREACH OF CONTRACT BUT IS NOT A DEFENSE TO UNDERPAYMENT UNDER THE LCA

In Administrator, Wage and Hour Div. v. Efficiency3 Corp. , ARB No. 15-005, ALJ No. 2014-LCA-7 (ARB Aug. 4, 2016), the Respondent failed to pay an H-1B nonimmigrant employee the required wage for several months. On appeal, one of the Respondent’s arguments was that the employee allegedly breached a “Proprietary Information, Inventions and Non-Solicitation Agreement,” when he failed to turn over passwords or documentation belonging to the Respondent.  The ARB stated that if the Respondent believed that the employee breached the contract, it could have brought a civil action against him for breach of contract, but that any alleged breach of contract is irrelevant to the DOL proceeding for underpayment under the LCA.

ALLEGED DEFICIENCIES IN WAGE AND HOUR INVESTIGATION IRRELEVANT WHERE RECORD SHOWED THAT RESPONDENT UNDERPAID REQUIRED WAGES UNDER THE LCA

In Administrator, Wage and Hour Div. v. Efficiency3 Corp. , ARB No. 15-005, ALJ No. 2014-LCA-7 (ARB Aug. 4, 2016), the Respondent argued that the Wage and Hour Division investigator made “serious errors” by failing to investigate the Respondent’s claim that the H-1B nonimmigrant employee and his wife (also an H-1B employee of the Respondent) had defrauded the company in regard to the manner of payment of required wages. The ARB found this argument was unavailing because it was the employer’s obligation to comply with the law’s required wage and payroll obligations.

Similarly, the Respondent argued that the investigator was biased and prejudged the facts. The Respondent claimed to have filed a complaint against the investigator with the Department of Labor Office of the Inspector General.  The ARB found that whatever the investigator may have done, it did not change the fact that the Respondent violated the H-1B required wage obligation.

ALLEGED SCHEME BY H-1B EMPLOYEES, WHO WERE ENGAGED TO BE MARRIED, TO DEFRAUD EMPLOYER BY ARRANGING WAGE CUT TO BE DISTRIBUED SO AS TO KEEP ONE OF THE EMPLOYEE’S WAGE AT LCA REQUIRED WAGE DID NOT EXCUSE RESPONDENT’S FAILURE TO PAY REQUIRED WAGE TO OTHER EMPLOYEE

In Administrator, Wage and Hour Div. v. Efficiency3 Corp. , ARB No. 15-005, ALJ No. 2014-LCA-7 (ARB Aug. 4, 2016), the Respondent failed to pay an H-1B nonimmigrant employee (“Mr. Liu”) the required wage for several months. On appeal, it argued that it was the victim of a conspiracy to defraud the company.  The ARB described the alleged fraud, which is too complex to fully describe in a casenote.  In brief, the Respondent lost an important contract which required all employees to take a pay cut.  Mr. Liu and his fiancée (who was also an H-1B employee of the Respondent) agreed to the pay cut but made it clear that they would only work five hours a day.  The Respondent agreed to this with the understanding that the two employees would be engaged in a job search.  Then, somehow it was arranged so that the fiancée would continue to get the salary had always been getting, while Mr. Liu’s salary would be lower, so that the fiancée’s H-1B status would not be jeopardized.  The ARB found that this arrangement strongly suggested that the Respondent well knew that it was not allowed to reduce H-1B salaries without running afoul of the law.  In fact, it proved that the Respondent violated the law.  The ARB stated that any money the Respondent “gave to Ms . Liu, whatever the reason cannot count as wages paid to Mr . Liu for purposes of satisfying Efficiency3’s legal obligation to pay Mr. Liu the required wage.”  USDOL/OALJ Reporter at 14-15 (emphasis in original).

UNDERPAYMENT OF REQUIRED WAGE; “CHANGING ECONOMIC CONDITIONS” EXCEPTION FOUND IN WAGE AND HOUR DIVISION FIELD OPERATIONS HANDBOOK; ARB DECLINES TO REVIEW WHERE HANDBOOK WAS NOT AVAILABLE TO THE PUBLIC AND WAS NOT PLACED INTO THE RECORD OF THE CASE

In Administrator, Wage and Hour Div. v. Efficiency3 Corp. , ARB No. 15-005, ALJ No. 2014-LCA-7 (ARB Aug. 4, 2016), the Respondent argued that its failure to pay the required wage to an H-1B employee after the loss of an important contract was eligible for an exception stated in a provision in a Wage and Hour Division Field Operations Handbook, which stated that employer may reduce H-1B nonimmigrants’ wages because of “changing economic conditions.” The Wage and Hour Division responded that the exception applies only where an employer had a “wage system” encompassing other employees with similar experience and qualifications performing the same type of work as the H-1B worker, and where the wage system was recorded in public access file.  There was some dispute about whether the Respondent had such a wage system.  The ARB declined to make any determination about this provision of the Handbook because it apparently was not available to the public and was not placed in the record of the case.  The ARB noted that without access to the Handbook, the ARB could not possibly interpret it, or even determine whether it was legally binding.

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