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K-Pop, Crocs, and Not So “Golden” Lawsuits
Something doesn’t have to be real to have a real impact. I’m speaking, of course, about the phenomenon that is KPop Demon Hunters. Yes, the animated movie. Yes, the K-pop band that doesn’t actually exist. And yes, I know you’re wondering where we’re going with this.
For those of you without young children living under a rock, KPop Demon Hunters just became the most-viewed movie on Netflix, as well as the first soundtrack to ever generate four simultaneous top 10 hits on Billboard’s Hot 100 list . . . by bands that are imaginary.
There’s an important HR and employment law lesson to be learned from KPop Demon Hunters: don’t dismiss or overlook things you think are imaginary. In today’s edition, we’re going to talk about bogus diagnoses and questionable taste in footwear. So sit back, enjoy, and let us show you how it’s done, done, done (ugh – it’s so damn catchy …)
Holes in the Shoes . . . and Paychecks
Crocs: the shoe that divides households, ruins first dates, but dammit if they don’t deliver on cushioning and jibbitz customization. Equally appealing to those leaving for sleepaway camp and entering a midlife crisis, the polarizing shoe company was recently accused of a different kind of misstep – violating the Fair Labor Standards Act (FLSA).
Most of you (hopefully) know that nonexempt employees must be paid overtime – at least 1.5 times their regular rate of pay. A mistake we frequently see is employers assuming “regular rate of pay” just means “hourly rate”. Not quite.
Take our hypothetical factory worker: hard hat, reflective vest, and the ugliest, comfiest pair of Crocs you’ve ever seen. Suppose this employee earns $25 an hour, plus $100 per shift for hitting non-discretionary performance goals, and another $100 in shift differential pay. To calculate the regular rate of pay, you don’t just use $25 and then multiply by 1.5 to get the overtime rate. You total all compensation, then divide by the total hours worked in the workweek. So if this stylish (?) Crocs-clad employee worked 50 hours and earned an extra $500 in non-discretionary and shift differential comp, the regular rate is not $25; it’s actually $35.00 ([50 × $25] + $500 = $1,750 ÷ 50 hours = $35). That means the overtime rate is $52.50 (and not $37.50).
The lawsuit against Crocs alleges the company skipped this step – ignoring non-discretionary pay in the regular rate calculation – and now faces a collective action seeking unpaid overtime, liquidated damages, and attorneys’ fees (oh my!).
The takeaway? We all make questionable life choices: some people buy Crocs, and some employers ignore following the FLSA. Only one of those choices leads to a lawsuit. If you have nonexempt employees earning nondiscretionary compensation, don’t pretend it’s imaginary just because it isn’t part of the hourly wage.
Just a Wee Bit Outdated
Stop us if you’ve heard this one:
An employee requests an accommodation due to a medical condition – let’s call it, Lyme-induced immune dysregulation. In support of the accommodation request, they submit medical documentation that is nearly 10 years old, and provides no additional information or explanation regarding the condition. The employer requests current medical documentation, as well as permission to speak directly with the employee’s treating physicians to better understand the employee’s condition and accommodation request. The employee refuses to provide additional documentation, and rejected any authorization for the employer to speak with her doctors. No accommodation was granted, and because the employee was unable to work without the requested accommodation, she was fired and filed a lawsuit against the employer.
That is exactly what happened in Tarquinio v. Johns Hopkins University Applied Physics Lab, a recent decision from the U.S. Court of Appeals for the Fourth Circuit. The court sided with the employer – and for good reason.
Rather than respond with, “why so irritable, Tarquinio? Maybe try Crocs?” (please don’t respond to accommodation requests this way), the employer methodically went through the interactive process in response to the request. And they did this despite what sounded like an imaginary condition, contained in a nearly decade-old doctor’s note, provided by an employee who clearly was not participating in good faith.
The Fourth Circuit’s message was clear: the ADA requires employers to engage in the interactive process, but that obligation only goes as far as the employee’s cooperation. If the employee stonewalls, the duty to accommodate may never even arise. In this case, Johns Hopkins started the process, asked for reasonable verification, and hit a wall. At that point, the court said, the employer was done.
The lesson for employers? Just like Crocs can’t make you stylish, a dubious diagnosis doesn’t necessarily make you disabled under the ADA. But even if you think the request is b.s. and something like Lyme-induced immune dysregulation is made up, you should still go through the motions and treat that questionable claim like it’s real. Because if you don’t ask the right questions and give the employee a chance to play ball, that probably-fake illness can land you in very-real court.
Hope everyone’s holiday weekend is golden (good luck getting those songs out of your head!) As always, if you’ve got questions, you know we’ve got answers.
~ The W + K Team
ABOUT WEINSTEIN + KLEIN P.C.
Founded in 2019, Weinstein + Klein is a modern boutique law firm that serves as outside general counsel to businesses across industries. Weinstein + Klein provides strategic, day-to-day legal support with a focus on labor and employment law, corporate and transactional matters, and business litigation. Weinstein + Klein works closely with business owners, executives, and entrepreneurs to proactively manage risk, navigate complex employment issues, and handle key transactions – from formation to funding to exit.