Law Offices of Stanley E. Niew, P.C.

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LABOR & CONSTRUCTION LAW UPDATES


These Newsletters are not intended as legal advice since each situation depends specifically on the facts presented.  Persons reading these Newsletters should seek competent legal advice with regard to the subjects contained herein before making any employment or other decisions.
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NOVEMBER 2018



Inside This Issue


1.    What Constitutes a Viable Hostile Work Environment Claim under Title VII


2.    Short Based Breaks Under Family Medical Leave Act (FMLA) May Not Be Compensable


3.    U.S. Department of Labor (DOL) Issues Guidance on Independent Contractors


4.    Municipal Government Cannot Infringe Upon The National Labor Relations Act (NLRA)


5.    Changes to the Illinois Installment Sales Contract Act



What Constitutes a Viable Hostile Work Environment Claim under Title VII


An employee brought a Title VII Civil Rights Act action in federal district court alleging that his employer created a hostile work environment and terminated the plaintiff on account of his race, gender and retaliation for protesting discrimination. 


The court found that the employer’s explanation of the termination was because of poor job performance in terms of dealing with dental patients, intimidating co-workers and being disrespectful towards his supervisor.  A satisfactory work performance did not save the day for the employee since the evaluations contained comments which noted similar job short comings. 


Plaintiff failed to establish the existence of similarly situated co-workers who were treated more fairly and no co-workers exhibited similar conduct. 


While the timeline was in close proximity to the registered discrimination complaints and  adverse acts, plaintiff failed to present any evidence that the employer’s explanation was pre-textual.  Lastly, plaintiff’s contention that his supervisor was short tempered, hostile, disrespectful and overly critical was not enough to establish a hostile work environment claim.



Short Based Breaks Under Family Medical Leave Act (FMLA) May Not Be Compensable


The U.S. Department of Labor (DOL) was asked in a letter,


“[w] hether a non-exempt employee’s 15-minute rest breaks, which are certified by a health care provider as required every hour due to the           employee’s serious health condition and are thus covered under the FMLA [Family and Medical Leave Act], are compensable or non-compensable time under the FLSA [Fair Labor Standards Act].”


The DOL said that short rest breaks up to 20 minutes mainly for the benefit of the employer must be paid.  But, short rest breaks primarily to benefit the employee are not compensable.  The FMLA specifically protects breaks required by a health provider to treat a serious health condition and differs significantly from ordinary rest breaks commonly provided to employees. This is because the FMLA protected breaks are given to accommodate the employee’s serious health condition and therefore non-compensable under the FMLA.


The text of the FMLA confirms that employees are not entitled to compensation for FMLA protected breaks since the FMLA expressly provides protected leave may be unpaid.  29 USC § 2612(c). 


The DOL warned that employees who take FMLA protected breaks must receive as many compensable rest breaks as their co-workers.  By way of example, if all employees take two 15-minute paid breaks during 8 hours, an employee needing 15 minute rest breaks every hour due to a serious health condition gets paid for two 15-minute breaks during the 8 hour shift.  Employers are not required to pay wages for the remaining six FMLA breaks.



U.S. Department of Labor (DOL) Issues Guidance on Independent Contractors


The DOL issued Field Assistance Bulletin (FAB)2018 2018-4 which serves to provide employers the factors the DOL now deems essential in determining employee status or independent contractor status. 


While the FAB features reviewing health care registries, the FAB does provide specific guidance on structuring relationships.  The DOL seems to have returned to the traditional multi-factor balancing test with a focus on control of the worker which benefits employers.


Whether an employment relationship exists under the Fair Labor Standards Act (FLSA) depends on the “economic reality” of the circumstances. No single fact about the relationship may conclusively determine whether an employment relationship exists. Courts have provided several relevant considerations, including whether the potential employer determines the rate and method of payment, whether the potential employer has the power to hire and fire the worker, and whether the potential employer controls the worker’s schedule or conditions of employment.


Caution:  The test in Illinois is different in that it is much easier to establish employee status as compared to federal law.



Municipal Government Cannot Infringe Upon The National Labor Relations Act (NLRA)


The Village of Lincolnshire adopted an ordinance which bands union security agreements within the Village by forbidding a requirement that workers join a union,  pay union dues or to make union payments to any third party.  In construction a union security agreement provides for mandatory union membership at the end of the 7th day of employment; in all other industries union membership is required at the end of the 30th day of employment.


A collection of the unions sued Lincolnshire alleging that the ordinance is preempted by the NLRA and that the ordinance violated the supremacy clause.  A district court in Chicago ruled that the ordinance was preempted by the NLRA and Lincolnshire appealed to the 7th Circuit Court of Appeals.


The Appellate panel indicated the prohibitions in the Ordinance would be preempted under the NLRA, but for Section 14(b) of the NLRA which allows states and territories “to band agreements requiring membership in a union as a condition of employment.”  The panel found that Section 14(b) does not permit local governments to band agency shop, hiring hall and dues check-off agreements.



Changes to the Illinois Installment Sales Contract Act


The Act defines an “installment sales contract” as: “any contract or agreement, including a contract for deed, bond for deed, or any other sale or legal device whereby a seller agrees to sell and the buyer agrees to buy a residential real estate, in which the consideration for the sale is payable in installments for a period of at least one year after the date of sale, and the seller continues to have an interest or security for the purchase price or otherwise in the property.”

“Date of Sale” is defined as “the date that both the seller and buyer have signed the written contract.” 

 A “Seller” is defined broadly as “an individual or legal entity that possesses a legal or beneficial interest in real estate and that enters into an installment sales contract more than 3 times during a 12-month period to sell residential real estate. Any individual or legal entity that has a legal or beneficial interest in real estate under the name of more than one legal entity shall be considered the same seller.”


The Act only applies where the seller will sell property under an installment contract 4 or more times within 12 months.  A seller cannot escape this Act by using a trust or different entity names.  Equally clear is the Act applies only to individuals or entities who sell residential real estate on installment sales as a business versus your average “Joe” trying to sell his own property.  The buyer must get a copy of the signed written contract; if not given, the buyer can rescind the contract.  Hence, documenting the delivery of the contract is vital.  The Act also provides for “cooling off period” since neither the buyer nor seller shall be bound for 3 business days after an unexecuted installment sales contract has been accepted by both parties in writing.  The cooling off period cannot be waived. 


The Act also requires:


  • The seller must record the entire contract or a memorandum.  The failure to do so gives the buyer the right to rescind or record. 


  • The seller must also provide an account statement every 12 month period free of charge. 


  • The contract cannot have a pre-payment penalty. 


  • The buyer cannot be required to repair any condition that existed prior to the date of the contract that is the seller’s responsibility. 


  • There is a 90-day cure period in the event of a default. 


The Act also sets out mandatory contract elements applicable to installment sales contracts which again cannot be waived.  The Act states that there are 28 clauses which are mandatory and must be “clearly and conspicuously” disclosed.  There is simply not enough space in this newsletter to list the 28 clauses. However, they can be found at 765 ILCS 67.  If you need a copy of the 28 clauses, email or call my office.



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