Good Morning, HR

In episode 167, Coffey talks with Leiza Dolghih about generational ethical differences and recent court actions affecting employers. They discuss Gen Z employees' attitudes towards company policies and rule-bending; EEOC lawsuits against companies for disability discrimination; and the Department of Labor's overtime salary basis test.

Leiza and Coffey will both be presenters at the HR Southwest Conference in October. You can register for that event at https://hrsouthwest.com.

Links to stuff they talked about are on our website at https://goodmorninghr.com/EP167 and include the following topics:

Generation Z employees are more willing to bend the rules to ‘get the job done,’ survey says

All Day Medical Care Clinic, LLC Agrees to Pay $75,000 to Resolve EEOC Disability Discrimination Suit

EEOC Sues PACE Southeast Michigan for Disability Discrimination

The EEOC Continues to Challenge Leave Policies as Discriminatory

5th Circuit signs off on DOL’s overtime salary basis test

Fifth Circuit Affirms DOL’s Right to Set Salary Minimum for White Collar Exemptions

Good Morning, HR is brought to you by Imperative—Bulletproof Background Checks. For more information about our commitment to quality and excellent customer service, visit us at https://imperativeinfo.com.

If you are an HRCI or SHRM-certified professional, this episode of Good Morning, HR has been pre-approved for half a recertification credit. To obtain the recertification information for this episode, visit https://goodmorninghr.com.

About our Guest:

Leiza Dolghih is the founder and managing partner of Dolghih Law Group. She is board certified in labor and employment law in Texas and represents both employers and employees. She has been selected to Best Lawyers under 40 by D Magazine four years in a row.

Leiza Dolghih can be reached at

https://www.dlg-legal.com/
https//www.northtexaslegalnews.com
https://www.linkedin.com/in/leiza-dolghih/
https://www.twitter.com/TexasNonCompete
https://www.facebook.com/DolghihLawGroup/
https://www.instagram.com/dolghihlawgroup/

About Mike Coffey:

Mike Coffey is an entrepreneur, licensed private investigator, business strategist, HR consultant, and registered yoga teacher.

In 1999, he founded Imperative, a background investigations and due diligence firm helping risk-averse clients make well-informed decisions about the people they involve in their business.

Imperative delivers in-depth employment background investigations, know-your-customer and anti-money laundering compliance, and due diligence investigations to more than 300 risk-averse corporate clients across the US, and, through its PFC Caregiver & Household Screening brand, many more private estates, family offices, and personal service agencies.

Imperative has been named the Texas Association of Business’ small business of the year and is accredited by the Professional Background Screening Association.

Mike shares his insight from 25 years of HR-entrepreneurship on the Good Morning, HR podcast, where each week he talks to business leaders about bringing people together to create value for customers, shareholders, and community.

Mike has been recognized as an Entrepreneur of Excellence by FW, Inc. and has twice been recognized as the North Texas HR Professional of the Year.

Mike is a member of the Fort Worth chapter of the Entrepreneurs’ Organization and is a volunteer leader with the SHRM Texas State Council and the Fort Worth Chamber of Commerce.

Mike is a certified Senior Professional in Human Resources (SPHR) through the HR Certification Institute and a SHRM Senior Certified Professional (SHRM-SCP). He is also a Yoga Alliance registered yoga teacher (RYT-200).

Mike and his very patient wife of 27 years are empty nesters in Fort Worth.

Learning Objectives: 

  1. Recognize the importance of clear policies and ethics guidelines, especially in light of generational differences in workplace attitudes.
  2. Understand the legal requirements for providing reasonable accommodations to employees with disabilities, particularly regarding leave policies and FMLA extensions.
  3. Prepare for changes in overtime regulations, including salary thresholds for exempt employees and the Department of Labor's authority to set these standards.

What is Good Morning, HR?

HR entrepreneur Mike Coffey, SPHR, SHRM-SCP engages business thought leaders about the strategic, psychological, legal, and practical implications of bringing people together to create value for shareholders, customers, and the community. As an HR consultant, mentor to first-stage businesses through EO’s Accelerator program, and owner of Imperative—Bulletproof Background Screening, Mike is passionate about helping other professionals improve how they recruit, select, and manage their people. Most thirty-minute episodes of Good Morning, HR will be eligible for half a recertification credit for both HRCI and SHRM-certified professionals. Mike is a member of Entrepreneurs Organization (EO) Fort Worth and active with the Texas Association of Business, the Fort Worth Chamber, and Texas SHRM.

Leiza Dolghih:

Look. If it's a if it's an accommodation that doesn't cost much, I don't see a reason not to do it. I mean, if the employee is asking for something that's gonna cost a lot of money or cause and do hardship in some other way, then you've gotta explore. You gotta do an interactive process with the employee. You gotta talk to them.

Leiza Dolghih:

You gotta brainstorm about what types of accommodations you can you can provide to them. But you can't just say, no. We're not doing it. I mean, you can, and then you're gonna end up like this company in the lawsuit. $1,000 later.

Leiza Dolghih:

Right.

Mike Coffey:

Good morning, HR. I'm Mike Coffey, president of Imperative. Bulletproof background checks with fast and friendly service. And this is the podcast where I talk to business leaders about bringing people together to create value for shareholders, customers, and the community. Please follow rate and review Good Morning HR wherever you get your podcast.

Mike Coffey:

You can also find us on Facebook, Instagram, YouTube, or at good morning hr.com. Well, it's the end of September. Hello, Q4. And returning guest, Lisa Dolgi, is joining me to discuss a few HR related news items from the past few weeks. Lisa is the founder and managing partner of the Dolgi Law Group.

Mike Coffey:

She is board certified in labor and employment law in Texas and represents both employers and employees. She has been selected to best lawyers under 40 by d magazine 4 years in a row. Liza last joined me in episode 50, that was a 117 episodes ago, to discuss of all things noncompetes. And, boy, what a year it's been for that topic. In fact, Liza will be presenting at the HR Southwest Conference in October about the current landscape of noncompete agreements.

Mike Coffey:

Welcome to Good Morning HR, Liza.

Leiza Dolghih:

Thank you, Mike. Thanks for having me.

Mike Coffey:

Thanks for coming back. And before I get started, I gotta say, your Facebook is a thirst trap for people who love to travel. I mean, I get grief about how much I travel. You know, you're gone all the time. I mean, you've been, what, Portugal, Moldova.

Mike Coffey:

You went to I know you were in Brussels. It's everywhere. And you went to Asia. Did you go to Asia this year?

Leiza Dolghih:

I did. Yes.

Mike Coffey:

Yeah. Yeah. It's fun. Okay. I I should have become an employment law attorney, clearly.

Mike Coffey:

But it's amazing. But and you've got you're a great photographer. It's a lot of fun. But then on top of that, you also give amazing book recommendations. Okay.

Mike Coffey:

So I am finishing Dark Wire right now. I've read several books you recommended. I'm finishing Dark Wire right now. It's a it's an amazing book. I highly recommend it.

Mike Coffey:

Dark Wire. It's about the FBI setting up a fake phone company, basically, to catch criminals. It breaks my civil libertarian soul. I think it's a horrible idea, but it's a really good read. So thank you for that.

Leiza Dolghih:

Oh, you're welcome.

Mike Coffey:

Yeah. So we've got some news articles here, we talked about. And the first one is the generation everybody likes to, kick in the crotch is generation z. And so there was a study out by a company called LRN. They're an ethics and compliance firm.

Mike Coffey:

They did a survey, and said that Gen z employees are almost twice as likely to bend the rules to get the job done as their other counterparts, especially the boomers. So that's kind of nuts. Right? They they're more likely to actually look at the ethics manual and procedures, but then they're more likely to break those to get the job done, which kind of surprises me about that generation because I thought they were the safety generation and that they were not gonna be they would they would follow the rules more. But it sounds like they're the exact opposite.

Mike Coffey:

We'll we'll get the job done, and they don't care about the formality. But that presents real issues, right, for for companies. If you've got ethics manuals and practices, you know, what what would you tell an employer to to face with that situation?

Leiza Dolghih:

I think it comes down to training, Mike, and I think that's where a lot of companies fail. So some companies don't have any policies in writing. That's always a problem. Right? Because even if you wanna reference something, you don't know what document to look at, where to find the rules.

Leiza Dolghih:

And then those companies that do have something in writing a lot of times, and I've been in that situation myself, you join a new company and you're handed, you know, a pack of documents and you just sign all of them, you know, and you don't really have time to read. And so if there's no follow-up training or explanation of what is it that you are signing, how it's applied within the company, I think, just reading it doesn't really convey the importance of the policies to to young people. And I actually you were surprised by the findings. I kind of wasn't.

Mike Coffey:

Well, you're much younger than me, so you're closer to that generation. So.

Leiza Dolghih:

Yeah. I think, actually, I wasn't surprised because I think a lot of Gen z's kind of, you know, were doing a lot of stuff online, and so you're missing that link of where you can tap somebody on the shoulder and say, hey. What does this mean? How important is this to the company? Can you explain it to me?

Leiza Dolghih:

Or just watching people apply those rules. Because if you're working from home or you're used to the environment where you don't really have anyone that you can just reach out to and ask a question. Asking a question on Teams is not the same. You may not wanna put that question in writing. You know?

Leiza Dolghih:

So that in person interaction, I think, has been a missing link. And so I'm not surprised that they read something and maybe think, well, that's not really that important, because they they don't have the benefit of training and being able to reach out to someone quickly and having that relationship of trust where they can ask a question about an ethics policy.

Mike Coffey:

So I think one of the big issues is that they're not getting the mentorship. They're working remote and or they're being called in to work in the office, but their bosses are working remote. You know, the more experienced people are working remote and not giving them that direct mentorship. My, oldest son's 25. He's an engineer.

Mike Coffey:

And he and a number of his peers who are, you know, post college, young professionals were actively looking for jobs where they would be in the office with the adults or with the the experienced, folks who can mentor them, and they they're seeing a need for that. So how I survived my twenties without being homeless is quite quite amazing because when I worked in corporate America, I was the, you know, the biggest mess, when I was young, and it was those interactions with more mature, experienced professionals who would kinda pull me aside and say, hey. Don't be a knucklehead. And that helped, right? And, you know, and so I can see where a group of young employees who aren't getting that kind of mentorship and those relationships and don't know that, hey, we really mean this when we we say, you know, you know, don't steal, you know, rubber bands from the office or whatever the compliance issue is.

Mike Coffey:

We really mean that. And I think that's, you know, I I think that's a problem. But I can see where it caused a lot of problems for an employer too, though.

Leiza Dolghih:

Right. Right. Well, it's it's we we really mean it and also kind of give them examples and explain it further than what it is on paper. You know, conflict of interest is one of the ethics policies that's commonly in employee handbooks, and as a 20 year old, you probably have no idea what that means.

Mike Coffey:

Oh, that's a good point. Yeah.

Leiza Dolghih:

Alright? So and it's it's and it's not even formal training. A lot of times, it's informal sort of training. Just being next to someone who is dealing with that issue, even if they're not saying, hey. Come learn from this.

Leiza Dolghih:

Just hearing somebody deal with it, knowing how they've dealt with a particular situation, that can be helpful. But if you're siloed remotely or you're used to not being able to reach out to someone, you're used to working and just asking questions online, I think that's a big barrier too among the Gen z population is that they don't have that ease that you and I have of picking up a phone or coming up to someone and saying, I have a question. Can you talk to me about it? They're more they rely more on written communication, which is not conducive to learning more about ethics problems, really.

Mike Coffey:

And another thing that report said 90% of senior leaders said that they believe that the code of conduct is actually followed. And then you get to middle managers, and only about 81% of those people believe the code of conduct is being followed. And then 69% of the frontline employees say that the the code of conduct is being followed. I don't care what any group says except those frontline employees because they're the the ones who are on the frontline. They're seeing what's really happening.

Mike Coffey:

And I think that's a problem for leaders because it just shows that disconnect between the c suite and the frontline.

Leiza Dolghih:

Oh, absolutely. I I saw those stats. I thought that was funny too. I agree with you. And, yeah, it can be a problem because you have somebody at the top of the company that thinks everyone is following the code of conduct.

Leiza Dolghih:

No one is really following it, or the majority of employees are not, and then you get somebody who is terminated for violating the code of conduct. Then they turn around, and they sue the company, and they say, wait a second. Why am I being singled out when no one else in the office is following code of conduct? You know? For example, if you have, a policy that you're not supposed to use curse words at work, but then everyone is using them, and the management doesn't know about it.

Leiza Dolghih:

And then somebody gets fired for using those words, and it turns out everyone else is doing it potential risk of a lawsuit where people are saying, why am I being singled out for violating the code when everyone else is?

Mike Coffey:

Well and if see if the average across this whole survey is 69% of frontline employees say that the code of conduct is followed. That means there's, you know, 31% who say it's not. That's the average. So that means there's companies out there that had you know, where the frontline employees, only 40 of them 40% of them believe it's being, you know, followed. And that's a culture issue.

Mike Coffey:

Right? Because they see they see people getting away with stuff. And there are a lot of cultures where we have rules, but if you're a superstar, you're the best salesperson, you're the highest producer, or you're that member of middle management who's the CEO's favorite, you can get away with murder. And so it just takes a few examples of that, of people seeing people getting rewarded for breaking the rules, for them to say, it doesn't really matter, and then you've got a real problem in your organization.

Leiza Dolghih:

A 100%. Yep. Absolutely. I see that'll come up a lot with nepotism. You know?

Leiza Dolghih:

So certain people are allowed to hire their relatives or promote their relatives or somebody they're dating and other people are not, and it just it fosters a really bad culture, a culture where people feel like they're not treated fairly. And when you're not treated fairly at work, that's what a lot of times leads employees to seek an an employment attorney saying, wait a second. This is unfair. I've gotta do something about it. I'm in America, and I'm looking you know, there's gotta be something that a lawyer can do.

Leiza Dolghih:

You don't wanna create even that thought pattern.

Mike Coffey:

Yeah. And but you can't it's it it does create a cognitive dissonance in the in the culture when you see people getting rewarded for not following the rules and then somebody else being held accountable for that. So but it's interesting. And and Gen z is probably you know, they're young. I was Gen x, and the fact that I'm not sitting on a couch smoking dope and eating pizza, proves that what people say about generations when they're in their twenties is not necessarily the the truth.

Mike Coffey:

I won't be doing that until at least 6:30 tonight. So but, you know, Gen z does have that tendency to have that idea that they're not really respectful of institutions like previous generations were. So I could see, you know, where some of that would play in as well. But they're also the the quickest to call b s when they see people who who say one thing and do another. And I think if they're seeing that in the culture, they're not going to follow the rules.

Mike Coffey:

And then in the WTF were you thinking news, a company called All Day Medical Care got, agreed to pay $75,000 to resolve a disability discrimination suit. And this is like this is a crazy case. This is do they not have any HR people in this company? Tell us what happened, but it's just nuts.

Leiza Dolghih:

Apparently not. Apparently, no one that even heard of such a thing as HR or employment laws. They hired someone, and the woman, after she got hired, asked them to

Mike Coffey:

install On day 1.

Leiza Dolghih:

On day 1. Right. Asked them to install a software program on her computer to help her because she had vision problems, and they fired her. And apparently told that they were firing her because she didn't disclose a disability when she interviewed with them, which is another level of violation that's just unfathomable, but it happened. That's the reason EEOC picked this case because they're trying to make an example.

Leiza Dolghih:

I mean, usually, you know, they get thousands and thousands of those claims of discrimination, and a lot of them are outrageous, and EEOC doesn't pick to prosecute them. And this one, they decided to actually go and file the lawsuit themselves because they wanted to make sure that there's an example for other companies of what not to do.

Mike Coffey:

Yeah. This is, ADA 101 stuff. It's just kind of it's it's wild. 1st day of employment. Oh, I need this this accommodation.

Mike Coffey:

And it's not even a big accommodation. It's awesome

Leiza Dolghih:

stuff there.

Mike Coffey:

And then you say that and then they fire her. So clearly this clinic had no HR. So what is the appropriate thing to do? First of all, should you ask applicants during the interview if they need an accommodation?

Leiza Dolghih:

Absolutely not. The only appropriate question, even if you see a visible visibility, let's say someone you're hiring them to carry and lift heavy things and you see they only have one arm, for example, obviously might be a challenge. The only thing that's appropriate to ask is, will you be able to perform the job duties that are described in the job description? And so that is the only thing you can ask. You cannot ask what accommodations you will need.

Leiza Dolghih:

It's a big no no.

Mike Coffey:

With or without accommodations. If you can you do it or can't you? Right? And so, and then day 1, the employee raises her hand and says, I've got vision problems, and I need the software installed. What's the correct response there?

Leiza Dolghih:

Well, look. If it's a if it's an accommodation that doesn't cost much, I don't see a reason not to do it. I mean, if the employee is asking for something that's gonna cost a lot of money or cause and do hardship in some other way, then you've gotta explore. You gotta do an interactive process with the employee. You gotta talk to them.

Leiza Dolghih:

You gotta brainstorm about what types of accommodations you can you can provide to them. But you can't just say, no. We're not doing it. I mean, you can, and then you're gonna end up like this company in the lawsuit. $15,000 later.

Mike Coffey:

Right. And they and I and I promise that $75,000, they spent that much on attorneys too getting to this point.

Leiza Dolghih:

Oh, yeah. Oh, yeah. Yeah. That doesn't include attorneys. And attorneys are not cheap.

Leiza Dolghih:

So you're I mean, if you want

Mike Coffey:

to be a robbery because who knows? You know, I don't know. They're you know, They may have had one of those Gen z lawyers. I don't know. But

Leiza Dolghih:

It was still not free. It's still not free. So it's, I mean, it's your choice.

Mike Coffey:

And but that interactive process I mean, it's possible that this clinic might have gone through the if they had gone through the interactive process, they may have found that for some reason, well, maybe it won't work with our software. Maybe there's something unique about the way, you know, And maybe there's not an accommodation we can make, although I can't imagine, you know, what that would be. You know? There's not a way. But if there was, then they would at least have had the protection of having gone through the process and being able to say that, you know, and documented that we really looked at the alternatives, these were what the costs were, didn't we just couldn't justify it.

Mike Coffey:

But they didn't even do that. So they've got no defense in this in this situation. Right?

Leiza Dolghih:

You're right. You're right. Yeah. I mean, just outright saying, no. We're not gonna accommodate you.

Leiza Dolghih:

Again, that boggles my mind.

Mike Coffey:

So Well, so they settled that.

Leiza Dolghih:

They did settle that. No. I think what what also another and it's not mentioned in this case, but I think what employers need to understand too is that an employee, when they ask for an accommodation or indicate that they have a disability that may require an accommodation, they don't have to use magic words. They don't have to say, I need accommodation or I have a disability. I mean, they just have to reveal information that, you know, that goes to training your supervisors to recognize that, hey, when an employee talks about something like this that, hey, I have a hard time, you know, accessing documents on my computer or reading them because I need larger font or I need, you know, a a bigger screen, that that is your request for accommodation.

Leiza Dolghih:

But they didn't even get to that point here. Right? Yeah. They just outright said, no. We're not gonna do this little thing for you, and so ended up paying a lot of money.

Mike Coffey:

Yeah. And it's it's it's it's just nuts. But if if all the employers were brilliant, they wouldn't need HR. And so maybe it's a good thing for our industry and for you and for me that that that exists. But in the the EEOC, it's it's a good month for them to go after health care organizations.

Mike Coffey:

There's an adult day care in Michigan, and they it's an adult day care, and they deal with seniors who have chronic health issues. And so they already understand that people have health issues. And, you know, you would think this is a compassionate organization that understands that and has some grace about it. But according to the the EAC's lawsuit, they had a strict policy apparently in writing their return to work policy on said immediately after FMLA's expired, if you don't return to work immediately, we're gonna consider that a voluntary resignation regardless of the issues beyond that. And so the EOC is suing them.

Mike Coffey:

So what's wrong with that policy?

Leiza Dolghih:

Well, a few things. First of all, I mean, it's not a voluntary resignation. Right? So you were you were you're basically terminating an employee so that they can't and and you're trying to make it so they can't apply for unemployment leave. So that's that that kinda sucks for employees.

Leiza Dolghih:

But, secondly, I mean, under the ADA, you can't do that kind of stuff. You cannot automatically just terminate the employee after their FMLA leave require expires. You have to consider whether you're gonna grant additional leave for an employee as an accommodation for their disability in appropriate circumstances, which in this case existed because an employee just needed a few a short extension of leave in order to get her special contact lenses. And so for them to say, no. We're not gonna give you that short leave, unpaid leave, for you to get this, you know, this thing that you need to accommodate your disability, that was EEOC clearly considered that to be a violation of the ADA.

Mike Coffey:

Yeah. Sorry. That's our policy. Doesn't prompt ADA. And so and I think that's where ADA and FMLA overlap.

Mike Coffey:

Sometimes it does confuse employers because, you know, we say we get 12 weeks of FMLA and that's what you get and whatever. But the ADA still exists, and so you've still got an accommodation to do there. And the EOC's claim is that those employees moved on and found other jobs, and the employer still didn't fill that job till later on, months later, fill these two roles for these 2 employees. So it was an easy accommodation to make because it wasn't critical that those jobs be filled right away. And so they were just I think they were just I'm trying to give them the benefit of the doubt and just say they're just sticking to their guns because they said this is what our policy is, and we wanna be fair to everybody and treat everybody the same.

Leiza Dolghih:

Right. But you cannot do that. So I think that's a very clear lesson that if FMLA leave expires for someone and they're asking for additional extension of unpaid leave, you've gotta at least consider it as an accommodation. You may decide, no. It's in due hardship.

Leiza Dolghih:

I really need to fill this position. I can't hold it open. But you gotta be able to be prepared to defend that. And so, because an employee is not gonna be happy about that. And, I mean, on the facts of this case, it was really, really just like the the first case that we talked about, it really didn't cost much for the company to do it.

Leiza Dolghih:

And that's probably another reason EEOC picked this case to prosecute, is because it's kind of on the scale of ADA violations. It's pretty blatant.

Mike Coffey:

Yeah. It's just obvious, and and they unless, you know it seems like the EEOC only takes 2 kinds of cases. Ones that would be serious policy changers if they could get a court decision in a certain way and it's driven by what the commission you know, their specific commissioners' ax to grind is or things that are easy layups. They don't take cases that, you know, generally that are just gonna be real challenges. It's they're they, you know, they want their stats like any any other, government employer, and they want the wins and check, check, check.

Mike Coffey:

And so if you get sued by the EOC and it's not a really novel concept, you've done something wrong. You've screwed up.

Leiza Dolghih:

I agree. But look. You've picked up on 2 cases that involve vision problems, and I'm actually seeing a trend outside of these two cases of as the workforce is aging, that's one of the issues. And as more and more people have to or feel like they have to keep working in their sixties seventies and sometime eighties, yes, there are employees out there that are willing and capable of working, and, you know, when they're 80 or 75. I think those issues are gonna become more and more prevalent.

Leiza Dolghih:

I'm already seeing an uptick in those type of situations, where it's either family leave or ADA accommodations related to medical issues, or age related medical issues. And I think if employers don't think about those things, they're gonna end up with they may end up with with challenging situations.

Mike Coffey:

And let's take a quick break. Good morning HR is brought to you by Imperative, bulletproof background checks with fast and friendly service. If you're an HRCI or SHRM certified professional, this episode of Good Morning HR has been preapproved for 1 half hour of recertification credit. To obtain the recertification information, visit good morning hr.com and click on research credits. Then select episode 167 and enter the keyword Dolgi.

Mike Coffey:

That's d o l g h I h. And if you're looking for even more recertification credit, check out the webinars page at imperativeinfo.com. And now back to my conversation with Lisa Dolghi. And there was more, you know, bad news for all employers, I guess. It was cold water, at least, on employers.

Mike Coffey:

The 5th Circuit and there's a lot of reporting about this that can conflate to 2 different cases, but the 5th Circuit signed off on the Department of Labor's ability to set FLSA exemptions based on salary. But it wasn't the the current and upcoming raises. It was the one from the Trump administration in 2019. Right?

Leiza Dolghih:

Yeah. But it's a clear cut decision. They said that the the Department of Labor which I was surprised with that opinion, right, in the wake of all the

Mike Coffey:

After Loper? Right. Yeah. Chevron, we've we threw Chevron out the window, we thought, But Yeah. The court said, at least at that lower threshold of, what was it, $35,500 Mhmm.

Mike Coffey:

There was probably a direct they agreed with DOL that there was a direct correlation between whether you are really an executive or professional versus you know, they didn't say that the upcoming one, is legitimate. They were only dealing with the 2019 increase.

Leiza Dolghih:

Which is an interesting question in and of itself because who's gonna at what point will that threshold be too high for the Department of Labor to decide? Right? So, yeah, it it's an interesting decision. We'll see what happens with that.

Mike Coffey:

Yeah. I mean, this this this company out it was a company out of Austin, RUM Enterprises. They had 13 Dairy Queens and a Wally's Burger Express, which I've never tried. But next time I'm in Boston, I'm gonna go find Wally's Burger Express. But that means they had managers, exempt managers, at these fast food places that were making less than $35,500, and they weren't getting paid over time.

Mike Coffey:

This kind of goes as much as I you know, there are things in FLSA that make me crazy, this kind of is an argument for some salary restriction. Right? You can call somebody an executive, you know, or professional, but they're making they're they're working in a Dairy Queen and making $35,000 a year. They probably ought to get overtime just from a public policy point of view.

Leiza Dolghih:

I mean, I agree with you. I agree with you on that. Yeah.

Mike Coffey:

Yeah. It's it's a hard one to understand. But

Leiza Dolghih:

Yeah. You have to have that. You have to I mean, I think you have to have that because otherwise, what? That would prevent someone from, on paper, saying that, yeah, you managed 2 employees, and here's your title, vice president of Wallace Berger. You know, regional vice president.

Leiza Dolghih:

Austin regional vice president Wallisberger, here's your $32,000 and no overtime. Yeah.

Mike Coffey:

Yeah. That yeah. It was a bit much. And and, you know, it's interesting that this is a com this is a for profit because most of of the conversations I've heard about companies that were really hurt or organizations that were really hurt by that that salary threshold increase were nonprofits, where they really did have mission driven people who wanted to serve the organization and execute the mission of the nonprofit. And they just know this comes with really low salary.

Mike Coffey:

That's who I was mostly hearing about on the $35,000 test, you know, not really for profit. I haven't even considered that a place like a Dairy Queen or even a retail store, something like that, would have would have that kind of issue.

Leiza Dolghih:

Yeah. That's interesting. I have not heard about nonprofits complaining about it. But if that is the case, I don't know what percentage of employers they comprise and Yeah.

Mike Coffey:

They're a small percentage.

Leiza Dolghih:

Right? So I guess you can't have a law that that affects everyone equally.

Mike Coffey:

And so and we're still waiting. There's on the the current increase that's supposed to come up, you know, there's already an increase earlier this year and it's another one's January, 1st. There's still a pending case on that that we're waiting to see. And maybe under under Loper Breit, maybe maybe a court will say but the what's interesting is this is 5th Circuit. If you can't get it through the 5th Circuit and you're pro employer, you probably don't have a very good argument.

Mike Coffey:

But maybe this next number of 55 or whatever that $1,000, whatever that number is, and the the next increase, maybe that'll be too much. Maybe the maybe the court will say at that much point, the DOL has overstepped its its bounds.

Leiza Dolghih:

You know, that's interesting because then who makes the decision about what's that threshold salary is? Is it the government agency? Because Chevron said that they, you know, don't get to legislate and even prejudiced well, not Chevron, but the most recent ruling from the Supreme Court is that they don't get to legislate. We have congress for that. But then if the courts decide that that's too high, then are the courts legislating.

Leiza Dolghih:

So it's, we're getting in constitutional issues, I think, here, but I'll be interested in seeing whether the current challenges to it are gonna be affected by the 5th Circuit opinion on this prior threshold. It seems to me like it would be an easy way to handle it is to say, we're just gonna follow the 5th Circuit and not look at the amount, but just the fact that the agency has the power to determine what that salary is. And so and and not have this analysis of whether it's too high or too low and leave it to the Department of Labor. I don't know.

Mike Coffey:

Yeah. It's it's gonna be an interesting year. And and who knows? The the Dairy Queen guys may they could still appeal beyond the 5th Circuit too. And and maybe they, you know, maybe they strike gold and and and get in front of the supremes on this and see what the what what the Supreme Court says.

Mike Coffey:

And it it's possible that this Supreme Court would agree that that now it's not it's not explicitly stated in the FLSA that salary is a is a consideration and then that and that the agency is using that as a proxy that's not valid. So we'll see. But in the meantime yeah.

Leiza Dolghih:

Giant bomb. It just exploded and leave the employers wondering, what are we supposed to do?

Mike Coffey:

But for now, employers should probably plan, if you've got someone who's gonna who needs to who's gonna be, nonexempt January 1st based on salary, plan on either giving them a raise or moving them to to hourly. And and that's the reality. Somebody's working 45, 50 hours a week. You can always just move them to hourly, adjust what their average overtime is to figure out what their hourly rate is and in family overtime, and they can still take the same amount of money home. I mean, it's, it's if you're being honest, that's what you you know, it's it's the same outcome and and then the employee but we some employees think it's really special to be exempt.

Mike Coffey:

You know, I'm on salary. That means means I'm special. No. That means that you get to work more for free than than regular employees. And so,

Leiza Dolghih:

I know. I you know, I think every lawyer at some point calculated the amount of hours they actually work, not bill, but work because you also work for you you put in work that you don't bill for, and then divide your salary, however big it is, by that number and realize that this does not look good.

Mike Coffey:

Yeah. I'm not doing as I'm not doing as well as I thought. But Yeah. But I do seem to remember that you did have a Facebook post of you working on a patio in some exotic location at a at a really nice looked like a really nice hotel or Airbnb. And so maybe I'll take the pay cut if I get to do that.

Leiza Dolghih:

That was one one one rare occasion. Most of the time, I'm right here in my office. I just don't post on on Facebook about it because you have the pay lower's office. Right?

Mike Coffey:

Only only only when I'm the plaintiff, never when I'm the defendant. So Yeah. Well, that's all the time we have. Thanks for joining me, Lisa.

Leiza Dolghih:

Yeah. Absolutely. Thanks for having me. It's always fun to be on your podcast and talk about all the fun employment developments, which there have been plenty this year.

Mike Coffey:

Yeah. It's a great time to be alive if you're an employment law attorney. So

Leiza Dolghih:

Alright.

Mike Coffey:

And I will see you at HR Southwest here in a few weeks, and you can hear Liza's presentation about non compete agreements at the HR Southwest Conference on October 13th through 16th, right here in beautiful Fort Worth, Texas. You can also watch how the sausage is made as I record 2 pod casts live from the conference. And then you can hear me and my friend and previous guest, Jim Zeta, discuss the legal issues surrounding, you guessed it, artificial intelligence during the legal exchange. You can review the entire HR Southwest 2024 agenda at hrsouthwest.com. And thank you for listening.

Mike Coffey:

You can comment on this episode or search our previous episodes at goodmorninghrdot com or on Facebook, Instagram, or YouTube. And don't forget to follow us wherever you get your podcast. Rob Upchurch is our technical producer, and you can reach him at robmakespods.com. And thank you to Imperative's marketing coordinator, Mary Anne Hernandez, who keeps the trains running on time. And I'm Mike Coffey.

Mike Coffey:

As always, don't hesitate to reach out if I can be of service to you personally or professionally. I'll see you next week, and until then, be well, do good, and keep your chin up.