NEW OVERTIME PAY LAW AND GOVERNMENT “MORALITY”

http://www.newsadvance.com/work_it_lynchburg/news/lynchburg-area-businesses-prepare-for-new-overtime-rules/article_778ce4df-45ae-57f1-a67c-6f18e55303dd.html

 

Lynchburg-area businesses prepare for new overtime rules

Posted: Monday, August 15, 2016 2:00 am

Starting Dec. 1, some employees might become newly eligible for overtime pay.

The current rules require overtime pay for employees who make less than $23,660 ($455 per week) per year. For those in that income bracket who work full time, they earn time-and-a-half for all the work they do once they work more than 40 hours. The new regulation more than doubles the benchmark for mandated overtime to $47,476 ($913 per week).

Under the Fair Labor Standards Act, employees are exempt from overtime if they are both a salaried employee and work in an executive, administrative, professional, IT or in an outside sales capacity. By raising the salary requirement for overtime, the regulation is expected to affect more than 4 million workers in the first year of implementation, according to the US Department of Labor.

Department of Labor statistics show 2.3 million ­— more than half — of the employees gaining overtime privileges are women, a group who traditionally earn lower wages than their male counterparts.

Roanoke Labor and unemployment lawyer Paul Klockenbrink said the regulation will affect certain sectors more heavily than others, with mid- and lower-level management employees taking the brunt of the changes.

“Certain industries will be hit harder than others, mostly colleges, retail and nonprofits,” Klockenbrink said. “They’re obviously going to have to start getting their management educated on the rule and start tracking hours.”

Abe Loper, owner of The White Hart Cafe in downtown Lynchburg, has three salaried managers that will be affected by the new rule. In order to comply with the new federal rules, he is choosing to move his employees to hourly pay.

“Unfortunately, this means that these staff members will earn less money during our slower weeks than they would have during the same week had they remained salaried workers,” he said. “The end result is that they will probably not have to work as many hours as they used to, but they will also very likely not make as much money as they used to.”

Companies will have several options in order to comply. They can raise their employees’ salaries above the threshold, keep their hours below 40 or track their hours and pay them the extra salary. According to Klockenbrink, companies will need to be diligent about making sure employees are aware of the changes and push for increased productivity.

“They’re going to need to revise their policies that make it clear if an employee is working beyond 40 that they are reporting those hours, because you’ve got to pay them no matter what,” he said. “With these people that are now non-exempt, you’re going to have to hold their feet to the fire and make sure they are efficient with their time.”

The new regulations set the salary threshold equal to the 40th percentile of weekly earnings for full-time salaried workers in the Southeast. This region has the lowest wage increases in the country, according to the Department of Labor. The use of this region as the benchmark is troubling to the U.S. Chamber of Commerce.

“The Southeast includes the lowest wage increase; however, it includes [Washington] D.C. and Maryland, which is like a different state, and it has some of the highest wages in the country,” Clark Thomasan, U.S. Chamber of Commerce manager of congressional and public affairs for the Southeast region, said at a recent breakfast event held by the Lynchburg Regional Business Alliance to inform employers of the new rules.

“Including those increases the entire wage level quite a bit.”

On the other hand, Economic Policy Institute Vice President Ross Eisenbrey believes the rule will boost the economy and help workers.

“Businesses have gotten used to the idea that they can work people 50 to 60 hours a week without paying them,” Eisenbrey said. “You can see how a business would make money doing that, but it’s just wrong. I think it’s immoral to work people that hard without compensating them for it.”

Built into the new rule is an automatic evaluation of the salary threshold every three years. For local Society for Human Resource Management President Connue Burnette, this is an area of concern.

“Who knows what it is going to look like every three years? Where is the cap going to be? Where is it going to stop?” she asked. “This creates a lot of uncertainty for companies.”

According to Thomasan, the US Chamber of Commerce agreed it was time to raise the salary threshold, but the chosen number is much too high and will cause employers to have to make tough decisions.

“From a business perspective, the burden is very high,” she said. “Businesses are set to face 3 billion dollars in compliance costs and over 2 and half million hours of paperwork. Employers are going to have tough choices on behalf of their employees and many cases the workers will suffer the most from this change.”

THE JUSTICE MYTH

N.Y. / REGION

Jury Trials Vanish, and Justice Is Served Behind Closed Doors
By BENJAMIN WEISER
AUG. 7, 2016

The federal courthouse in Lower Manhattan, part of the Southern District of New York, where the vanishing of criminal jury trials has never seemed so pronounced.

The criminal trial ended more than two and a half years ago, but Judge Jesse M. Furman can still vividly recall the case. It stands out, not because of the defendant or the subject matter, but because of its rarity: In his four-plus years on the bench in Federal District Court in Manhattan, it was his only criminal jury trial.

He is far from alone.

Judge J. Paul Oetken, in half a decade on that bench, has had four criminal trials, including one that was repeated after a jury deadlocked. For Judge Lewis A. Kaplan, who has handled some of the nation’s most important terrorism cases, it has been 18 months since his last criminal jury trial.

“It’s a loss,” Judge Kaplan said, “because when one thinks of the American system of justice, one thinks of justice being administered by juries of our peers. And to the extent that there’s a decline in criminal jury trials, that is happening less frequently.”

The national decline in trials, both criminal and civil, has been noted in law journal articles, bar association studies and judicial opinions. But recently, in the two federal courthouses in Manhattan and a third in White Plains (known collectively as the Southern District of New York), the vanishing of criminal jury trials has never seemed so pronounced.

The Southern District held only 50 criminal jury trials last year, the lowest since 2004, according to data provided by the court. The pace remains slow this year.

In 2005, records show, there were more than double the number of trials: 106. And decades ago, legal experts said, the numbers were much higher.

“It’s hugely disappointing,” said Judge Jed S. Rakoff, a 20-year veteran of the Manhattan federal bench. “A trial is the one place where the system really gets tested. Everything else is done behind closed doors.”

Legal experts attribute the decline primarily to the advent of the congressional sentencing guidelines and the increased use of mandatory minimum sentences, which transferred power to prosecutors, and discouraged defendants from going to trial, where, if convicted, they might face harsher sentences.

Julia Gatto speaking outside court in Manhattan in 2013. She said a client, Oumar Issa, who was arrested on terrorism charges in 2009, accepted a deal to plead guilty. “It was the only thing he could do,” she said. Credit Brendan Mcdermid/Reuters
“This is what jury trials were supposed to be a check against — the potential abuse of the use of prosecutorial power,” said Frederick P. Hafetz, a defense lawyer and a former chief of the criminal division of the United States attorney’s office in Manhattan, who is researching the issue of declining trials.

Julia L. Gatto, a federal public defender, recalled the case of Oumar Issa, a Malian arrested in Africa in a 2009 sting operation on charges of narco-terrorism conspiracy, which carried a mandatory minimum 20-year sentence, and conspiring to support a terrorist organization, which had no minimum.

Although Ms. Gatto and her client believed that elements of the case were weak and that there were strongly mitigating circumstances, Mr. Issa concluded that the risk of going to trial was too high. He pleaded guilty in 2012 to material support, with prosecutors dropping the other charge. He received 57 months in prison. “It was the only thing he could do,” Ms. Gatto said. “His hands were tied.”

In 1997, according to federal courts data nationwide, 3,200 of 63,000 federal defendants were convicted in jury trials; in 2015, there were only 1,650 jury convictions, out of 81,000 defendants.

Former Judge John Gleeson, who in March stepped down from the federal bench in Brooklyn to enter private practice, noted in a 2013 court opinion that 81 percent of federal convictions in 1980 were the product of guilty pleas; in one recent year, the figure was 97 percent.

Judge Gleeson wrote that because most pleas are negotiated before a prosecutor prepares a case for trial, the “thin presentation” of evidence needed for indictment “is hardly ever subjected to closer scrutiny by prosecutors, defense counsel, judges or juries.”

“The entire system loses an edge,” he added, “and I have no doubt that the quality of justice in our courthouses has suffered as a result.”

While the decline in jury trials in federal court has been felt by judges, lawyers and defendants, it has also disrupted the rhythm of the courthouse ecosystem and those who depend on it.

Former Judge John Gleeson, who recently left the federal bench in Brooklyn, cited in a 2013 opinion the sharp increase in the percentage of federal convictions that stemmed from guilty pleas. Credit Todd Heisler/The New York Times
Young lawyers typically become clerks for Southern District judges to gain valuable trial experience; now, some clerks depart without having worked a single trial.

Even the court’s stenographers, whose incomes depend partially on the number of transcript pages they produce, feel the impact.

“It’s been awful,” said Rebecca Forman, who said she transcribed her last criminal jury trial in November 2015. “I didn’t send my kids to camp this summer. I didn’t have the money.”

New York State Court data also shows a striking decline in felony jury trials. In 1984, there were over 4,000 jury verdicts; in 2015, there were fewer than half of that.

Preet Bharara, the United States attorney in Manhattan, speaking to a lawyers group in 2012, cited another effect of the decline: fewer Americans serving on juries. “When trials vanish, citizenship also suffers,” Mr. Bharara said, according to his prepared remarks.

Beyond the statistics, though, the decline in trials in the Southern District has become a frequent topic of discussion, even among judges themselves.

“We’d love to have more trials; most of us enjoy trials,” said Judge Alvin K. Hellerstein, who joined the bench in 1998.

In April, when Judge Shira A. Scheindlin resigned from the bench after more than two decades, she said the decrease in trials was one consideration for her departure. “Trials are way, way down,” she said. “The building’s quite dead.”

Faisal Shazad, who planted a bomb in Times Square, depicted in a courtroom sketch in 2010. He is among recent defendants in the Southern District who have pleaded guilty instead of going to trial. Credit Elizabeth Williams/Associated Press
Judge P. Kevin Castel, who helped to organize the court’s 225th anniversary celebration in 2014, recalled taking a friend, Mary Noe, a legal studies professor at St. John’s University, to see an exhibit of courtroom illustrations documenting Southern District trial scenes of past decades. But as they reached the end, Professor Noe observed that the sketches of more recent defendants, like Bernard L. Madoff and the would-be Times Square bomber Faisal Shahzad showed them pleading guilty.

“I was like, what happened to the trials?” she recalled.

Judge Analisa Torres said she had felt the difference ever since joining the federal bench in 2013. Judge Torres, a former state court judge who handled about two dozen criminal trials a year in Manhattan and the Bronx, said she has since had just a few such trials. “It’s day and night,” she said.

On the state bench, she said, she spent her entire day in the courtroom but for the lunch hour. “Now, I am in chambers all day long.”

The hallowed jury trial is a right enshrined in the Constitution and immortalized in American culture. But these days, said Daniel C. Richman, a professor at Columbia Law School, “‘12 Angry Men’ is more a cultural concept than a regular happening.”

To be sure, federal judges are not exactly sitting on their hands. They maintain dockets filled with civil and criminal cases that wend their way through the process — even if most are resolved without a trial.

As for Judge Furman, he is still waiting for his second criminal jury trial since becoming a judge in 2012. He almost had one earlier this year, but a scheduling conflict with a civil trial meant he had to pass it to another judge.

Another criminal trial loomed this summer. Then it, too, disappeared from the calendar, as the defendant pleaded guilty.

It meant he would have more time to get other work done in chambers, Judge Furman recalled, and there was plenty of that to do.

“But there’s a tinge,” he added wistfully, “of what might have been, that we thought we had one, but it got away.”

A version of this article appears in print on August 8, 2016, on page A1 of the New York edition with the headline: Jury Trials Vanish, and Justice Is Served Behind Closed Doors. Order Reprints| Today’s Paper|Subscribe

REST IN PEACE, MICHAEL EDWARD FLYNN

http://www.godanriver.com/obituaries/flynn-michael-edward/article_867666ac-f79a-5b52-81b6-ce4133b3512c.html

Flynn, Michael Edward

Updated Jul 13, 2016

Michael Edward Flynn received a re-assignment to one “Pearly Gates” on Tuesday, July 5, 2016; this included an excellent benefits package and the opportunity to see some people he hadn’t seen in a while. He now has the leisure to play with all of his dogs and the chance to finally have a decent glass of brandy.Michael repeatedly insisted to everyone he met that he was the most “normal” person they would ever meet – this was definitely not true. While he might have been a normal child in June of 1947, that was about the end of it. At some point he realized he was too smart for his own good, and was admitted to the University of Virginia. While it is entirely possible he learned course content, this was never mentioned in lieu of speaking about fraternity houses shooting flaming arrows at each other’s roofs and how he had to “walk 15 miles uphill in winter” to get to class.He enlisted into the Army at the height of the Vietnam War, which in his words, “sucked muy much.”Despite his terrible eyesight, he was only one target away from qualifying as a sharpshooter. He insisted the missed target didn’t count, as it had holes the size of a potato and was the easiest to hit. The drill sergeant did not share this opinion, and Michael was made to do 50 pushups. This would become a frequent occurrence in his time in the service.Following his service, he went back to school for an MBA in Finance; he would then spend the next 25 years working with banks and Wall Street Firms, such as “Goldman Sucks”. His affectionate names for the “Yankee heathens” only grew more colorful as he moved further into his career, much like his personality. Following the completion of a billion dollar mortgage back security trade, and attaining the title of Senior Vice President, he decided to leave banking and pursue something infinitely more challenging: being a stay-at-home dad. Most of his day-to-day instruction involved advice about the current state of the financial markets and really bad puns (his favorite).Following his development into a grumpy old Irishman, he provided many useful pieces of advice such as: “you can pick your friends, and you can pick your nose – but you can’t pick your friend’s nose”. Michael would also frequently croon “Good Morning Starshine” up the stairs to his sleeping children at 7 a.m. He loved chocolate pudding with Cool Whip, steak with B‚arnaise sauce, and taking long, meandering naps. Occasionally, he would also enjoy take-out from the local greasy spoon and regret it hours later.Michael is survived by his extremely patient, and long-suffering wife, Sylvia, who would often hear him cackling in the next room over and could only assume the worse. He is also survived by his hard-headed yet soft-hearted children, John and Elizabeth, and an adorably cantankerous German Shepherd puppy named Ivy (named after Ivy Road at UVA, of course). He was preceded in re-assignment by his father, Edward Flynn, and his father-in-law, Colonel Victor White, both of whom are likely inviting him to get wasted at the Pearly Gates bar.Michael was always told he was an “out of the box thinker,” to which he would reply that he “didn’t know there was a box”. After fulfilling his wishes of a traditional, private burial, his family can only assume he is laughing mightily at this irony up in heaven.In lieu of flowers, please consider making a donation to Sheltering Arms Physical Rehabilitation Center (Atlee Road in Hanover) or your local ASPCA in Michael’s name. If these options are not available, you may also make disparaging comments about the current state of the financial markets or political platforms in solidarity with his most recent grumblings.Townes Funeral Home is serving the Flynn family. Online condolences may be made at http://www.townesfuneralhome.com

MORE ARBITRATION BS / MIDLAND FUNDING STRIKES AGAIN

http://www.nytimes.com/2015/12/23/business/dealbook/sued-over-old-debt-and-blocked-from-suing-back.html?emc=edit_th_20151223&nl=todaysheadlines&nlid=49237430&_r=0

Sued Over Old Debt, and
Blocked From Suing Back

By JESSICA SILVER-GREENBERG and MICHAEL CORKERY
DEC. 22, 2015

Clifford Cain Jr., a retired electrician in Baltimore, was used to living on a tight budget, carefully apportioning his Social Security and pension benefits to cover his rent and medication for multiple sclerosis.

So Mr. Cain was puzzled when he suddenly could not make ends meet. Months later, he discovered why: A debt collector had garnished his bank account after suing him for about $4,500 the company said he owed on an old debt.

Mr. Cain said he never knew the lawsuit had been brought against him until the money was gone. Neither did other Baltimore residents who were among the hundreds of people sued by the collector, Midland Funding, a unit of the Encore Capital Group, in Maryland State Court. Some of them said they did not even owe any money, or their debt had long expired and was not legally collectible, according to a review of court records.

In any case, the Encore subsidiary was not licensed to collect debt in Maryland.

Yet when Mr. Cain brought a class action in 2013 against Midland Funding, the company successfully fought to have the lawsuit dismissed.

If the plaintiffs wanted to try to recover their money, they would have to do so in private arbitration. And because class actions are banned in arbitration, Mr. Cain and the others would have to fight the unit of Encore — one of the largest debt buyers in the country with vast legal resources — one by one.

“I can’t for the life of me understand how this is allowed to happen,” said Mr. Cain, who could not afford to pursue his case alone in arbitration.

In short, Encore and rival debt buyers are using the courts to sue consumers and collect debt, then preventing those same consumers from using the courts to challenge the companies’ tactics. Consumer lawyers said this strategy was the legal equivalent of debt collectors having their cake and eating it, too.

The use of arbitration by the companies is the latest frontier in a legal strategy orchestrated by corporations in recent years. By inserting arbitration clauses into the fine print of consumer contracts, they have found a way to block access to the courts and ban class-action lawsuits, the only realistic way to bring a case against a deep-pocketed corporation.

Their strategy traces to a pair of Supreme Court decisions in 2011 and 2013 that enshrined the use of class-action bans in arbitration clauses.

The result, The New York Times found in an investigation last month, is that banks, car dealers, online retailers, cellphone service providers and scores of other companies have insulated themselves from challenges to illegal or deceptive business practices. Once a class action was dismantled, court and arbitration records showed, few if any of the individual plaintiffs pursued arbitration.

Removing the Ability to Sue
A New York Times study of the increasing use of arbitration clauses in contracts, which has effectively forced millions of people to sign away their right to go to court.

In the last few years, debt collectors have pushed the parameters of that legal strategy into audacious new territory. Perhaps more than any other industry, debt collectors use the courts while invoking arbitration to deny court access to others. The companies file lawsuits seeking to force borrowers to pay debts. Because borrowers seldom show up to challenge the lawsuits, the collectors win almost every case, transforming debts that banks had given up on into big profits.

Other industries have tested the boundaries of arbitration in different ways. Auto dealers, for example, successfully lobbied Congress in 2000 to make sure that they could go to court when they had a dispute with their manufacturers. Today, though, dealers regularly require their customers to go to arbitration, while they can still sue manufacturers in court.

In the case of debt collectors, the arbitration clauses that companies are invoking are often in contracts that borrowers presumably agreed to with their original lenders — not with the debt collector. Additionally, debt collectors often cannot produce a copy of the agreement in court, according to records and interviews.

Consumer advocates argue it is not fair for debt collectors to enforce an arbitration agreement a consumer signed with a different company. Debt collectors counter that they are buying loan contracts, and the terms come with them.

Because the tactic is still in its early stages, there is no data tracking the cases. But The Times, examining thousands of state and federal court records, and interviewing hundreds of lawyers, plaintiffs, industry consultants and judges, found that debt collection companies have already used the strategy to great success.

Continue reading the main story
BEWARE THE FINE PRINT
Examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court.

PART 1
Arbitration Everywhere, Stacking the Deck of JusticeOCT. 31, 2015

PART 2
In Arbitration, a ‘Privatization of the Justice System’NOV. 1, 2015

PART 3
In Religious Arbitration, Scripture Is the Rule of LawNOV. 2, 2015
Efforts to Rein In Arbitration Come Under Well-Financed AttackNOV. 15, 2015
Bipartisan Bill Would Protect Service Members’ Right to Avoid ArbitrationNOV. 20, 2015
In the cases that The Times examined, judges routinely sided with debt collectors on forcing the disputes into arbitration.

In Mr. Cain’s case, Midland Funding, the unit of Encore Capital, persevered despite originally lacking a copy of a Citibank arbitration agreement they said he signed in 2003. Instead, the debt collector presented as evidence a Citibank contract that one of Encore’s lawyers signed when he opened an account.

In Mississippi, Midland Funding won a court judgment to compel Wanda Thompson to pay more than $4,700 on a debt that was too old to be collected under state law, court records show.

When Ms. Thompson filed a class-action suit on behalf of other state residents, Encore invoked an arbitration clause to have the lawsuit dismissed. Ms. Thompson’s lawyers argued that the company had clearly chosen court over arbitration when it sued her to collect the debt. By going to court, the lawyers said, Encore waived its right to compel arbitration.

Unpersuaded, the judge ruled that Encore’s lawsuit to collect the debt was separate from Ms. Thompson’s case accusing the company of violating the law.

“It’s beyond hypocritical that the companies can use arbitration to avoid being held accountable in court, all the while using the courts to collect from consumers,” said Peter A. Holland, a lawyer who ran the Consumer Protection Clinic at the University of Maryland’s law school.

In a statement, Greg Call, Encore’s general counsel, said the company “has a longstanding commitment to operating ethically and treating consumers with respect.” Responding to the specific cases, he said the judges “carefully reviewed the parties’ evidence regarding whether the creditor and consumer had agreed to arbitrate and whether arbitration was the appropriate forum to resolve a dispute, and followed federal law and Supreme Court direction when ordering the matter to arbitration.”

In the consumer credit ecosystem, debt collectors are at the bottom rung. They buy huge bundles of delinquent debt from banks for pennies on the dollar.

Anne-Marie Hislop

So much for the rights of the individual. Those most likely to have debts, especially those with small debts ($4500 is a lot of money to…

“Sued Over Old Debt, and Blocked From Suing Back”-

The Federal Trade Commission, which examined 5,000 portfolios of debt purchased by the nation’s largest debt buyers, found that only 12 percent included documentation.

The debt collectors do not just use the courts to collect on the money, they flood them. In 2014, the industry filed roughly 20,000 lawsuits in Maryland and more than 67,000 in New York, according to court records.

Philip S. Straniere, a civil court judge in Staten Island, called some of the cases that crossed his desk “garbage.” Some debt collectors, Judge Straniere said, have sought to recoup payments from the wrong person.

Little of that matters, because many defendants do not show up to defend themselves. Some never read nondescript legal notices informing them of the lawsuits. Others who do are too intimidated or ill-equipped to go to court.

Once it begins, the litigation machine is virtually impossible to stop. When defendants are absent, judges have little choice but to find in favor of the debt collectors, according to interviews. Industry consultants estimated that collectors win 95 percent of the lawsuits.

Their practices have attracted state and federal scrutiny. In September, the Consumer Financial Protection Bureau fined Encore and a second debt collector, the PRA Group, for trying “to collect on debts they should have known were inaccurate.”

Mr. Call, Encore’s general counsel, said that litigation was “always a last resort” and was used only to collect on less than 5 percent of the debts the company owned. He added that, like the C.F.P.B., Encore wanted “to ensure that consumers are treated fairly.” A spokeswoman for the PRA Group declined to comment.

But even when borrowers bring class-action lawsuits over practices that regulators have determined to be illegal, the cases are being thrown out because of arbitration clauses, court records show. In Maryland, Midland Funding reached a $1.2 million settlement with the state’s financial regulator, which found that the company had “engaged in unlicensed collection,” the very issue that Mr. Cain could not bring to court. In Kansas, borrowers did not fare any better when they sued Midland Funding, accusing the company of not being properly licensed. Mr. Call said Midland was “appropriately licensed.” A judge granted the company’s motion to compel arbitration.

Once their class actions were dismissed, few plaintiffs pursued arbitration, data analyzed by The Times shows. Encore and its subsidiaries faced 38 arbitration cases from 2010 to 2015 and the PRA Group faced 15, the data shows.

Fred W. Schwinn, a consumer lawyer in San Jose, Calif., thought he had a winner when he brought a class action on behalf of a woman who said she had been improperly sued to collect an old credit card debt. Predictably, Mr. Schwinn said, the debt collector, a unit of SquareTwo Financial, asked the judge to order the case into arbitration.

But Mr. Schwinn discovered an agreement that the SquareTwo unit had entered with the credit card company from which it bought his client’s debt. The agreement stated that the debt collector “shall not use arbitration for collection of debt.”

A judge in the case still ruled in the debt collector’s favor, saying the agreement did not prevent the SquareTwo unit from using arbitration clauses when facing lawsuits from consumers, as opposed to when it was trying to collect those consumers’ debts.

Such decisions are leading lawyers to believe they may have found, in the words of one law firm, the “silver bullet” for killing off legal challenges. In an industry podcast, two lawyers discussed the benefits of using arbitration to quash consumers’ lawsuits. The tactic, they said, is emerging at an opportune time, given that debt collectors are being sued for violating federal law.

The beauty of the clauses, the lawyers said, is that often the lawsuit “simply goes away.”

A version of this article appears in print on December 23, 2015, on page A1 of the New York edition with the headline: Creditors Sue, Then Block Use of Courts to Fight Back. Order Reprints| Today’s Paper|Subscribe