You are the Human Resources Manager for Fresh Foods Today, a privately owned company based in Houston, Texas that employs more than 200 people. The company operates in a five state area, as well as Mexico, and is expanding rapidly. While it is privately held at this point, the company goal is to become publically traded within five years. You report directly to the President and are a member of the executive team. Other members of that team include the VP of Finance, VP of Administration, VP of IT and VP of Marketing and Innovation.
Here is a brief outline of the company business model and activities:
- The purpose of the company is to provide retail access to fresh fruits, vegetables, and proteins (principally meats and dairy products) in areas that are often referred to as “food deserts.”
- The company operates 35 walk-in stores where customers can buy raw foods as well as meals prepared for consumption on site. The stores are split pretty evenly between company-owned, and franchises held by 9 franchisees. Company and franchise stores are indistinguishable in terms of products, design, and marketing representations. The only noticeable difference to the customer is that in Mexico, all business is conducted in Spanish, including all packaging and labeling of products, as well as advertising.
- The stores operate from 6am to 11pm seven days a week, 365 days a year. The delivery service is available from 8am until 8pm on all days the stores are open.
- Because many of the potential customers in the area do not have access to transportation, each store provides a delivery service. Orders for both raw and prepared foods may be placed by phone or online. As part of its marketing, the company guarantees free delivery within 30 minutes of placement of order, or the order is free. Sales dependent on the delivery service generally account for as much as 60% of a store’s gross revenue. All sales for delivery require advance payment by credit, debit, and/or food benefits cards (such as SNAP in Texas, or food stamps). There is no discernible pattern to the frequency or timing of most delivery orders.
- Each store has a general manager overseeing all operations of the store. This general manager is classified as exempt under federal wage and hour regulations and is making, on average, $76,000 per year.
- Each store has one or more assistant managers. These assistant managers are classified under applicable current wage and hour regulations as exempt and are making, on average, $32,000 per year. Their general work responsibilities and “on duty” times are established by the general manager. Assistant managers’ duties include:
- Overseeing the hourly workers such as clerks, stockers, cooks – those typically classified as non-exempt – including hiring (subject to the approval of the general manager), setting work schedules, task assignments, monitoring job performance.
- Working with vendors to ensure that products meeting Fresh Foods Today’s standards are available and shelves stocked.
- Performing whatever tasks are necessary at whatever time as requested by the general manager to keep the store operating consistent with company standards.
- Performing duties such as driving, cooking, stocking, etc. when employees don’t show up or “extra hands” are needed.
- Each store has multiple hourly workers (as described above) who are generally scheduled for no more than 32 hours per week. Uniforms are provided and maintained for these workers by the company, and workers change to company uniforms on arrival at their stores prior to clocking in for their work period. Workers must clock out before they change at the end of their work periods. Workers are frequently expected to work beyond their normal shifts, and often work 40 or more hours in a week.
- None of the employee categories are unionized.
- Many of the stores experience two “rush periods” during the day – one from about 11am to 1pm and a second from 6pm to 8pm. Some store workers are regularly scheduled to work from 10 am to 1pm and then to return to the store to work from 5:30pm to 8:30pm.
- The stores use a special team of drivers to manage deliveries very similar to the Uber business model. These drivers are classified as independent contractors. They are provided with uniforms and magnetic signs to place on their cars when making deliveries. They provide their own vehicles and insurance. They are subject to background checks as part of the approval process to be a delivery driver. The stores provide drivers a monthly schedule of dates and time-frames in which they expect the drivers to be available to make deliveries. If a driver fails to accept deliveries three times within the schedule then the driver is dropped from the approved list for three months. Drivers are paid a fixed amount for each delivery based on distance from the store, and must report all tips to the store. Tips are divided each month evenly among all drivers.
The President has heard via various news media that the U.S. government is proposing significant changes in the wage and hour regulations as well as in the regulations related to qualifying as independent contractors. He doesn’t remember the agencies involved, only that the proposed changes are potentially significant, and possibly disruptive, to companies like Fresh Foods Today. He is very concerned and wants to make sure that his Executive Team is well informed. Additionally, he is concerned that all the discussions in the news media may be having a negative impact on employee morale. He has asked you to do the following:
- Prepare a memo for the Executive Team that
- Provides an overview of the proposed changes in the regulations, including the political context surrounding the proposed changes
- Identifies policies and practices within the company that could be affected by the proposed changes
- Makes proposals for adjustments and modifications within the company related to compliance with the new regulations when adopted, including
- recommending those areas where legal counsel should be consulted, the specific questions that should be asked of counsel and why, and
- identifying benefits or drawbacks to the company as a result of these proposed regulation changes.
This memo must not exceed five pages single spaced plus an executive summary that is not more than one page.
- Prepare a PowerPoint presentation that you will use in meetings with the employees communicating to them the proposed changes and how the company will be moving forward if the changes are adopted. You will not actually give this presentation at this time but submit it to the executive team with your memo described in No. 1 above to give them a sense of how the company needs to relate to employees. This presentation should be maximum of five slides. You are to put in the Notes section of PP the bullet points of information that you would say related to each slide.
Book: Employment and Labor Law 8th edition by Patrick Chion and James Castagnera
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