New York Employment Lawyer Blog

Two interns who worked on the set of "Black Swan" have filed a lawsuit in federal court alleging that Fox Searchlight Pictures ("Fox") violated the federal Fair Labor Standards Act and the New York Labor Laws. The lawsuit alleges that Fox, who produced Black Swan, made the interns do menial work without providing them with educational work experience. Fox classified the interns as exempt from pay and made them do menial work which otherwise should have been done by paid employees. Our firm has worked with many companies and employees to ensure that a proper classification of employee vs. intern under the NYS Department of Labor's guidelines was made. Whether you are an intern or a company we can help determine the correct worker classification.

Fox has over a 100 unpaid interns who play a very important role in its productions performing as assistants and bookkeepers as well as doing secretarial and janitorial work. By misclassifying the workers as interns rather than employees, Fox can get away with not paying them minimum wage, overtime pay as well as other legal protections given to employees.

The lawsuit is trying to obtain class action status for over a 100 unpaid interns that worked on different Fox productions. The lawsuit not only seeks back pay pursuant to state and federal laws but also an injunction to stop Fox from using interns illegally.

The U.S. Department of Labor ("DOL") has established guidelines in determining whether an internship must be paid minimum wage and overtime. In deciding whether an internship should be paid or not, the following six criteria found on the DOL"s Fact Sheet #71 should be applied:

1) The internship is similar to training which would be given in an educational environment even if it includes actual operation of the employer's facilities;

2) The internship experience is for the intern's benefit;

3) The intern does not displace regular employees, but works under the close supervision of existing staff;

4) The employer providing the training does not derive immediate advantage from the intern's activities; and on occasion its operations may actually be impeded;

5) The intern is not necessarily entitled to a job at the end of the internship; and

6) The employer and the intern understand the intern is not entitled to wages for tiem spent in the internship.

One of the interns, plaintiff Alex Footman, who worked as a production intern from October 2009 to February 2010, did no work related to production or film studies. He worked 5 days a week for at least 40 hours. His job was to make coffee for the production office, make sure the coffee pot was full, take lunch orders, take out the trash, and clean the office. Clearly, Footman, Wesleyan graduate who majored in film studies did not sign up to be a coffee intern.

The other intern, Eric Glatt, who has an M.B.A. was an accounting intern for "Black Swan" who took the internship because he wanted to go into the film industry. As an intern, he prepared documents for purchase orders and petty cash and created spreadsheets to track missing information.

Given the high rate of unemployment and the economic climate, unpaid internships have risen in the past few years. In his book, Intern Nation: How to Earn Nothing and Learn Little in the Brave New Economy, Ross Perlin estimates that about 500,000 unpaid interns provide $2 billion in free labor every year and that many work in violation of state and federal labor laws.

Many young graduates, who can't find a job, take internships just to get their foot in the door. Secretary of Labor Hilda Solis has stated that "good internships - paid or unpaid - are a valuable bridge between higher learning and the workplace. And enforcement is tough because no one has an incentive to report the problem." In this instance, Black Swan cost $13 million to produce and grossed over $300 million worldwide. Clearly, Fox made out by keeping it costs low. However, it is a grave injustice that not only did Fox use the interns for menial work without paying them but these interns wasted their time and did not benefit with training they thought they had signed up for.

If you are being misclassified as an intern, call our Wage and Hour Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you obtain your rightful wages and overtime pay.

Continue reading "Cautionary Tale for Employers: Unpaid Interns from the "Black Swan" File Lawsuit for Unpaid Wages Against Fox Searchlight Pictures" »

FAQ: My Employer's electronic payroll system was recently breached. The system had my social security number, bank account number used for direct deposit and my home address and number. Should I be concerned?

You and every person whose personal information was in your employer's system should be worried about identity theft. Identity theft is a growing crime which 9 million people fall victim to every year. The FBI also estimates that businesses lose over $65 million every year because of this crime.

Identity theft occurs when someone used your name and personal information, such as your address and social security number to open up accounts or credit cards. If you don't take quick action, an identity thief can charge thousands on credit cards opened under your name. Take the following steps to stop any further credit damage:

1) Your first step of action should be to place a fraud alert on your credit reports. This will stop the identity thief from opening up any more accounts under your name. An initial alert on your credit report allows you to order one free credit report from each of the 3 national consumer reporting companies. The initial fraud alert will stay on your credit report for 90 days. For example, if your wallet has been stolen, the 90 days will give you enough time to cancel your old credit cards and get a new driver's license. To place a fraud alert, contact one of the following companies which will then notify the other two companies to place a fraud alert on your credit report:

TransUnion
Fraud Victim Assistance Division
P.O. Box 6790, Fullerton, CA 92834-6790
1-800-680-7289

Equifax
P.O. Box 740241
Atlanta, GA 30374
1-888-766-0008

Experian
P.O. Box 9532
Allen, TX 75013
1-888-397-3742

2) For every account you have, call someone in the fraud department and close all accounts that have been tampered with or might have been fraudulently accessed. Make sure you follow up with a letter to the credit card company confirming that your account was closed due to identity theft.

3) File an Identity Theft Report with your local police department. This is a police report which contains more information than a typical police report. It contains enough information about the identity theft so that the credit reporting companies and businesses can verify that you were the victim. Bring all your evidence such as credit card statements or bills containing items that you did not purchase which shows that someone has been using your identity. Filing a report with the police department is very important because it will show your creditors that you are a victim of identity theft. Without the police report, a creditor might still require you to pay off the balance charged by the identity thief.

Once you have filed an Identity Theft Report, you should send a copy to the credit reporting companies and the credit card companies or businesses involved in the identity theft. By sending them the report, the credit reporting companies will permanently block fraudulent information from showing up on your credit report. The Report will also help you fight off creditors trying to collect debts that arose from the identity theft. The Report also allows you to extend the fraud alert on your credit report from 90 days to 7 years.

4) You should also file a complaint with the Federal Trade Commission (FTC) by writing to the following:

Identity Theft Clearinghouse
Federal Trade Commission
600 Pennsylvania Avenue NW
Washington, DC 20580, 1-877-438-4338

By reporting your complaint to the FTC, you will be helping law enforcement track down identity thieves and making sure they don't steal more identities.

Identity theft is a growing problem in this country. In this day and age, it is crucial to safeguard your personal information, especially your social security number. If you have been a victim of identity theft, call our Identity Theft Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you get your identity back.

Continue reading "Identity Theft at the Workplace" »

The U.S. Department of Labor ("DOL") signed a memorandum of understanding this week with the Internal Revenue Service ("IRS") in an effort to end misclassification of employees. Leaders from 7 states also signed memorandums of understanding with the DOL's Wage and Hour Division. The states who will be working with the DOL include Connecticut, Maryland, Massachusetts, Minnesota, Missouri, Utah and Washington. Four other states, including New York, Hawaii, Illinois and Montana are also expected to sign memorandums of understanding. Our firm has helped many companies evaluate and correctly classify their workers in accordance with state and federal guidelines to avoid fines, penalties and taxes.

The memorandums of understanding will allow the Labor Department to share information and coordinate law enforcement with the IRS and the 11 states to ensure that employers follow state and federal labor laws. By working together, the Labor Department will be able to target companies that misclassify employees as independent contractors in order to avoid paying minimum wage and overtime pay. Businesses also misclassify employees in order to avoid paying workers compensation, unemployment insurance and federal taxes.

With the DOL, the IRS and the states sharing information, the state and federal government will be able to inflict multiple fines and penalties on companies engaged in violating state and federal employment laws. Patricia Smith, an attorney at the DOL, stated that there's "more of an incentive to be in compliance because the cost of what we consider to be illegal activity has increased." For example, in the past, if a company was found guilty of not making unemployment insurance payments, it would incur a fine from just the state agency. Now, it would be hit with not just state fines, but also federal fines and penalties as well as any tax violations.

Aggressive enforcement and cracking down on labor law violations has been a major priority for Labor Secretary Hilda Solis since she took over the Labor Department in 2009. The DOL collected about $4 million in back wages in 2010 on behalf of about 6,500 misclassified employees. This amount was a 400 percent increase from the amount collected in 2008. Solis has also made it a point to go after the industries who are known for misclassification of employees, such as the restaurant, hotel, health care, and day care industries.

Misclassification of workers is a huge problem in many industries, which not only robs workers of their rightful wages but amounts to theft from the government and all taxpayers across the country. A 2009 report from the Government Accountability Office showed that misclassification of workers cost the government $2.72 billion in 2006. The report also found that about 30% of employers misclassify their employees as independent contractors to avoid paying overtime and minimum wage.

If your company employs independent contractors, make sure you are in compliance with state and federal labor and employment laws. The government's new initiative can have severe financial consequences if you are found to be in violation of any labor laws.
Call our Labor and Employment Attorneys at Villanueva & Sanchala at (800) 893-9645 to help you evaluate your company to ensure that your employees are classified correctly.

Continue reading "More Bad News For Companies Who Misclassify Workers: Federal (IRS) and State Governments Labor, Including New York, Share Information to Target Employee Misclassification Seeking Penalties" »

Tyson Fresh Meats ("Tyson"), a subsidiary of Tyson Meats, and a federal contractor entered into a settlement this week with the U.S. Labor Department for allegations that it engaged in sex discrimination. Pursuant to the consent decree, Tyson has agreed to pay $2.25 in back wages, interest and benefits to over 1,650 female job applicants who it denied employment to at four of its facilities. According to the U.S. Department of Labor's Office of Federal Contract Compliance Programs ("OFCCP"), this is one of its largest settlements in its history. Our firm has helped many companies place employment policies and procedures to help prevent discriminatory practices and thus avoid major lawsuits which could financially cripple your business.

During the Labor Department's compliance reviews with Tyson, the OFCCP found that Tyson had violated Executive Order 11246 which makes it illegal for federal contractors to discriminate based on sex. According to the settlement, Tyson will pay out the $2.25 million to the female job applicants it rejected. Tyson will also offer jobs to at least 220 of these women as positions open up at its facilities. Tyson has also agreed to extensive self monitoring and corrective measures to make sure that it does not engage in any illegal employment practices.

Tyson has stated that it had legitimate, non-discriminatory reasons for not hiring these women. Ken Kimbro, chief human resources officer for Tyson Meats, stated that "this was really about documentation, not discrimination" and that the "charges were strictly based on a statistical analysis of job applications at the plant, not on complaints by any applicants."

Labor Secretary Hilda Solis has stated that "companies that profit from federal contracts must not discriminate in employment decisions." Tyson received federal contracts totaling over $200 million in each of the past 3 years and was also given another $8 million contract for its beef and pork products at stores in Guam. Not just Executive Order 11246, but he OFCCP's legal authority under Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veteran's Readjustment Assistant Act of 1974 also provide that if you are a contractor or sub-contractor doing business with the government, you must not engage in employment discrimination based on sex, race, color, religion, national origin, disability or status as a protected veteran.

This historical settlement sends out a clear message to all companies that if you do business with the government, do no engage in any type of discriminatory practices and have documentation to back up your defense. Whether Tyson engaged in discriminatory practices or not, it learned the expensive way that it should have maintained documentation regarding its employment practices. When doing business with the government, make sure you maintain and retain proper documentation regarding all facets of employment from hiring to firing. If you are in business with the government, you can be audited any time.

Our attorneys at Villanueva & Sanchala have helped many companies who have contracts with the government put policies and procedures in place to ensure that they have proper documentation to support their employment decisions. If you have any government contracts, call our Employment Discrimination Attorneys at (800) 893-9645 to help make sure your company has policies and procedures to support its employment practices.

Continue reading "Tyson Settles Sex Discrimination Lawsuit with US Labor Department and Agrees to Stop Illegal Employment Practices" »

Purchasing a medical practice is probably one of the most important decisions that you will make in your life. The type of practice, location, and size are just a few factors that will influence the growth and success of your practice. Unlike many other professions, you can't just change jobs after purchasing a medical practice. The medical practice you purchase will establish roots for you in that location, in the community and the hospitals that you send your patients to. Our firm has helped many doctors evaluate their options to negotiate the best possible medical practice to benefit their life and career.

Before you purchase or even begin to negotiate purchasing a medical practice, consider the following factors in your decision making process:

1) Type of Purchase. The purchase of a medical practice could take the form of stock purchase or an asset purchase. In a stock purchase, the purchaser is acquiring assets such as equipment, fixtures, accounts receivables as well as liabilities. It is important to note that liabilities include all accounts payables and any malpractice suits that may be ongoing against the practice. In most cases, a stock purchase occurs when a current employee of the practice, usually on a partnership track, becomes a full or part owner of the practice. He or she then also becomes liable for the practice's liabilities. For example, if you purchase into a practice where one of the partners has a high number of malpractice actions named against him or her and the practice, you may also be sharing any liability not covered by insurance. Additionally, if that partner has a higher than normal rate of malpractice insurance because he or she has been sued more often, your income will be affected if medical malpractice insurance is a shared expense. In such a case, you may want to negotiate that each physician pay for his or her own medical malpractice insurance separately.

In an asset purchase, the buyer steps in and takes over the practice. The purchaser normally acquires the remaining inventory and office supplies. The purchaser does not take on the liabilities or the accounts receivables. You should make sure to get the seller's patient list with telephone numbers and addresses. Since you are paying for the entire practice, make sure the telephone number, fax, and e-mail address stay the same. You should also have access to the website if there is one.

2) Purchase Price. The purchase price is the most difficult factor to determine. You must negotiate this price. In order to determine the purchase price, take the value of the assets that you're acquiring such as furniture, computers, equipment, supplies and add it to the goodwill. Goodwill is a difficult number to measure as it is based on how well the practice is doing, its location, reputation, and how long it has been in business. Also obtain the financial statements from the past five years to see how the practice is doing and whether it is growing.

3) Non-Compete Agreement. A non-compete agreement is crucial to ensure that the seller does not take back the practice that he or she just sold you. A well drafted non-compete clause should ensure that the seller does not open up a practice across the street from you or anywhere in your targeted geographic location. This is extremely important because if the seller opens up a practice nearby, you will most likely lose your patients.

Purchasing a medical practice is an extremely complicated business decision that will affect you, your career, and your family. If you are considering purchasing a private practice, call our Physician Employment attorneys at Villanueva & Sanchala at (800) 893-9645 to help you evaluate, negotiate and guide you in your purchase.

Continue reading "Negotiating the Purchase of a Medical Practice: Top 3 Things You Need to Know " »

FAQ: I am a physician practicing in a cardiology group. The local hospital recently approached our group to discuss buying our practice. What factors should we consider before deciding if we should join the hospital?

Our office is seeing a rising trend in physician employment agreements with hospitals. Given the various economic and regulatory factors, more and more hospitals are buying out physician practices and employing the physicians. This trend is important to note because it is effecting physician compensation in all areas. In the past, it was a given that you would be compensated more if you joined a private practice specialty group than a hospital or a health system. However, hospitals are now matching or exceeding private practice compensation. Our laws firm has helped many doctors review and negotiate their employment contracts with hospitals as well as private practices. Our attorneys can help you obtain the best possible agreement to fit your career goals.

A few examples of this rising trend were evidenced in a survey conducted by the Medical Group Management Association (MGMA) last year which showed the following:

• multi specialty groups offered a starting median salary of $300,000 in allergy/immunology and hematology-oncology whereas hospitals were offering $330,000

• family practice physicians were compensated $150,000 in private practices whereas family practice physicians employed by hospitals were being paid $162,000.

• the median starting salary of orthopedic surgeons in a private practice was $325,000 while hospitals were starting them at $425,000.

In fact, according to a report released this year by the Center for Studying Health System's Change (HSC), physician employment in hospitals has grown since 2007. The number of hospital employed physicians has grown by 30% while private practice physicians has decreased by 20%. In 2009, 65% of established doctors and 49% of new physicians worked in hospital owned practices. A study conducted by HSC showed that more hospitals are looking at physician employment as an alignment strategy and as a way to increase their profits.

This trend of physicians joining hospital owned practices is occurring due to several reasons. Given the uncertainty with the implementation and timing of the Health Care Reform Act, reimbursements rates have dropped in many areas and nobody knows where they will end up in the future. Many practices are also incurring increased overhead costs which have also been eating away at physician income. Many physicians today also do not want to work long hours nor do they want the administrative hassle of managing a practice. In fact, many physicians completing their residencies and fellowships have huge loans to pay off and want a fixed, steady income. To this end, many hospitals are offering loan assistance to these physicians in mostly every specialty for signing on with them.

If you or your groups are considering employment at a hospital, make sure you ask for a hospital physician employment agreement. Do not hesitate to let the hospital know that you need time for your attorney to review the contract. The hospital might tell you that other physicians have received the same contract and signed it. Even then, it is imperative that you have your own attorney review it looking out for your best interests. Although hospitals may offer attractive compensation packages, you also need to evaluate your future compensation. Make sure you know how your future compensation as well as how bonuses will be determined.

Your hospital physician employment agreement will probably contain a restrictive covenant not to compete. If you have been living and practicing in the area for years, make sure your attorney strikes out this clause. In the event your employment with the hospital does not work out, you should leave open the possibility of re-opening your private practice.

With new economic and regulatory factors affecting physician employment, it is crucial that you have a hospital physician employment agreement and that you evaluate it with the future in mind. If you are considering joining a hospital or a private practice, call our Physician Employment attorneys at Villanueva & Sanchala at (800) 893-9645 to help you evaluate and negotiate the best possible employment agreement for your needs.

Disclaimer: 

Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.