March 2023 brought notable lawsuits that could impact employers in Pennsylvania, both in the areas of wage and hour laws and medical marijuana. Get the latest updates in below:
Class Action Lawsuit Filed Against Caesars for Policy Penalizing Early Clock-Outs in Pennsylvania
Casino operator Caesars Entertainment is facing a proposed class-action lawsuit filed in Pennsylvania federal court, which accuses the company of failing to pay workers at a Pennsylvania casino for all hours worked. The lawsuit alleges that the casino used a time clock that penalized its floor employees for clocking out after working for more than eight hours. Plaintiffs Christopher Cvijic and Spencer McLaughlin say that the policy is in violation of the federal Fair Labor Standards Act, the Pennsylvania Minimum Wage Act, and the Pennsylvania Wage Payment and Collection Law. The plaintiffs allege that the policy forced many employees to perform duties without compensation, discouraged them from earning overtime and violated minimum wage laws. The suit is being brought on behalf of employees who served as dual-rate supervisors, supervisors, and/or dual-rate assistant managers.
The case is Cvijic et al. v. Caesars Entertainment Inc., case number 5:23-cv-00816, in the U.S. District Court for the Eastern District of Pennsylvania.
3rd Circ. Holds that PTO Is Not “Pay” under the FLSA in First Impression Ruling
The Third Circuit has ruled that paid time off (PTO) is not considered an employee’s salary and therefore cannot be the basis for a Fair Labor Standards Act (FLSA) suit. In a precedential opinion, the court upheld the partial denial of class action claims against Bayada Home Health Care Inc. by a group of nurses who challenged the company’s use of a productivity point system that deducts PTO days to cover an employee’s point shortfall.
Upholding the district court’s decision, the Third Circuit panel stated that even if the nurses’ PTO allotment was reduced to zero, their salaries would remain unchanged. PTO is considered a fringe benefit, which has no effect on the employee’s salary or wages, and may be irregularly paid out, such as when an employee separates from a company. Therefore, the panel concluded that PTO is distinct from salary, and the term “salary” as used in the FLSA does not include fringe benefits like PTO.
The court also rejected the nurses’ argument that they were wage earners under the FLSA with respect to PTO being a wage. The key question when determining the legal classification of an employee for FLSA purposes is whether an employer made an actual deduction from an employee’s base pay.
This decision clarifies the legal definition of salary and emphasizes the importance of distinguishing between salary and fringe benefits such as PTO when it comes to FLSA claims. It also highlights the significance of accurately classifying employees for FLSA purposes to avoid potential legal disputes.
The case is Higgins v. Bayada Home Health Care Inc., case number 21-3286, in the U.S. U.S. Court of Appeals for the Third Circuit.
PA Medical Cannabis Patient Files Lawsuit Against Johnson Controls for Revoking Job Offer
A medical cannabis patient in Pennsylvania is suing Johnson Controls Inc., a building software and equipment company, for violating state law by rescinding his employment offer after he disclosed his medical cannabis use. Trey Cuthrell, the plaintiff, is a medical cannabis cardholder under Pennsylvania’s Medical Marijuana Act and uses cannabis as medication to help him sleep at night. Cuthrell informed the testing facility of his cardholder status and the test showed that he was taking medical cannabis to treat the symptoms of a disability.
The Medical Marijuana Act prohibits employers from refusing to hire or otherwise discriminating against an employee based on their status as a medical cannabis patient. Despite this, Johnson Controls revoked Cuthrell’s conditional offer of employment because of his medical cannabis use, causing him to lose earnings and benefits and suffer embarrassment, humiliation, and anxiety.
This case highlights the need for employers to understand the laws and regulations related to medical cannabis use and to ensure they are not discriminating against employees based on their medical condition. Medical cannabis is legal in many states, including Pennsylvania, and patients should not be penalized for using it as medication. Employers must make reasonable accommodations for medical cannabis patients, such as allowing them to use their medication outside of work hours, as long as it does not impair their ability to perform their job duties. It is important for both employers and employees to be aware of their rights and responsibilities when it comes to medical cannabis use in the workplace.
The case is Cuthrell v. Johnson Controls Inc., case number 1:23-cv-00465, in the U.S. District Court for the Middle District of Pennsylvania.
Jeff Burke is an attorney at MacElree Harvey, Ltd., working in the firm’s Employment and Litigation practice groups. Jeff counsels businesses and individuals on employment practices and policies, executive compensation, employee hiring and separation issues, non-competition and other restrictive covenants, wage and hour disputes, and other employment-related matters. Jeff represents businesses and individuals in employment litigation such as employment contract disputes, workforce classification audits, and discrimination claims based upon age, sex, race, religion, disability, sexual harassment, and hostile work environment. Jeff also practices in commercial litigation as well as counsels business on commercial contract matters.
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