Hunton Employment & Labor Perspectives

In 2017, the U.S. Supreme Court issued its ruling in  Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County (“BMS”), holding the Fourteenth Amendment prevents a state court from adjudicating non-resident plaintiffs’ state-law claims. Since then, various federal courts have considered whether that ruling extends to prevent a federal court from adjudicating claims brought under the federal Fair Labor Standards Act (“FLSA”) by individuals who live and work outside the court’s jurisdiction—and courts have come to vastly different conclusions.

“Ban-the-Box” legislation has seen steady growth throughout the country for more than two decades.  Currently, there is no federal legislation on the topic for private employers but a good number of states have limited their ability to inquire about or make decisions based on a prospective employee’s criminal background history.

Last year, the EEOC revealed its Strategic Enforcement Plan (“SEP”) for Fiscal Years 2024-2028.  In the SEP, the EEOC stated that a subject matter priority was “the continued underrepresentation of women and workers of color in certain industries and sectors.”  One such industry focus is on workers in STEM (Science, Technology, Engineering, Mathematics) fields. 

On August 23, 2024, the U.S. Court of Appeals for the Fifth Circuit struck down the Department of Labor’s (“DOL”) tip credit rule, known as the “80-20-30” rule, which limits the ability of employers to satisfy a portion of tipped employees’ wages with earned tips.

The EEOC is asking the Ninth Circuit to clarify the U.S. Supreme Court’s new standard for determining the type of harm that constitutes an adverse job action in discrimination cases and to apply that standard or remand the case at issue so the lower court can apply the new standard.

In an unusual ruling, Pennsylvania federal judge Michael M. Baylson (i) invoked a court’s inherent powers to manage its docket in dismissing with prejudice a long-running collective action lawsuit against Uber Technologies, Inc. (“Uber”) but also (ii) awarded—after a second hung jury—victory to Uber on the merits by granting its Rule 50(b) motion for judgement as a matter of law.

Most companies know the Fair Labor Standards Act (“FLSA”) requires employers to pay employees a minimum hourly wage plus overtime, unless an exemption applies. What may be surprising, however, is how broadly the FLSA and courts applying it define who is an “employer.”

California law requires employers to provide employees written wage statements listing gross and net wages earned, hourly pay rates, hours worked, and other employment-related information. (Lab. Code, § 226.) If a claimant demonstrates that an employer has failed to comply with this requirement, the claimant is entitled to an injunction compelling compliance and an award of costs and reasonable attorney’s fees. (Id., subd. (h).)

In a welcome win for defendants litigating claims under the Illinois Biometric Information Privacy Act (“BIPA”), earlier this month a Northern District of Illinois magistrate judge denied a plaintiff’s motion to compel communications between defendant Union Pacific Railroad Company (“Union Pacific”) and the vendors that provided it with fingerprint-activated security gates.  Fleury v. Union Pac. R.R. Co., No. 20 C 390, 2024 WL 1620613, at *4-6 (N.D. Ill. Apr. 15, 2024).  In so doing, the court implicitly affirmed that, in a BIPA lawsuit, the common interest doctrine presumptively protects the communications between biometric technology vendors and their customers, regardless of which entities are named as defendants.  This ruling is a powerful tool in the BIPA landscape for employers (who are typically the customers in this scenario) and other defendants alike because it supports the ability of BIPA defendants to coordinate their defense strategy with entities who share their legal interest.  The opinion is also a good reminder, however, that vendors and their customers should use best practices early on in a BIPA litigation to maximize the scope of the common interest doctrine.

On March 12, 2024, the United States Court of Appeals for the Sixth Circuit reversed two separate district court decisions addressing how pizza delivery drivers should be reimbursed for their vehicle-related expenses under the Fair Labor Standards Act (FLSA).

The underlying cases involved minimum wage claims under the FLSA.  In both cases, the drivers alleged that their employers had not sufficiently reimbursed them for the expenses they incurred while using their personal vehicles to make deliveries, resulting in the employees earning less than the minimum wage.  One employer ...

The legal path between employee arbitration agreements under the Federal Arbitration Act (“FAA”) and representative claims under the California Private Attorney General Act (“PAGA”) has been anything but smooth. A new (albeit unpublished and uncitable) case, Piran v. Yamaha Motor Corp., et al., No. G062198, 2024 WL 484845 (Cal. Ct. App. Feb. 8, 2024)(unpub.) (“Yamaha”), helps to illustrate the challenges and unanswered questions lingering in the wake of this rapidly-developing area of law.

When there is a willful violation to the Fair Credit Reporting Act (”FCRA”) consumers can recover either actual damages sustained by the consumer or statutory damages of no less than $100 and not more than $1000. (Punitive damages and attorney fees also are available).  There has been a trend in the district courts examining whether plaintiffs must prove that they suffered actual damage in order to recover statutory damages. Since 2007 several Circuits have reviewed this argument and each has explained that the provision for statutory damages does not require a showing of “actual damages.” The Eleventh Circuit is the most recent to weigh in on this question in Santos v. Healthcare Revenue Recovery Grp., and agrees with its sister Circuits.

Tyson Foods, Inc. (“Tyson”) is no stranger to religious accommodation lawsuits over the impact of its COVID-19 vaccine mandate given its continued efforts to operate through the height of the pandemic in 2021—but the battle just heated up with a proposed class action complaint filed in the Eastern District of Arkansas.

On August 29, 2023, the California Court of Appeal issued a new opinion that, once again, changes how parties litigate and settle claims brought under California’s Private Attorneys’ General Act (“PAGA”).  See Robert Lacour v. Marshalls of California, LLC, et al., 94 Cal.App.5th 1172, 313 Cal.Rptr.3d 77.

Recently, in Restaurant Law Center, et al. v. U.S. Dep’t of Labor, the U.S. District Court for the Western District of Texas affirmed the validity of a new Department of Labor (DOL) rule, known as the “80-20-30” or “dual jobs” rule, which limits the ability of employers to satisfy a portion of tipped employees’ wages with earned tips.

In Harris et. al. v. Medical Transportation Management, Inc. et. al., the D.C. Circuit Court of Appeals held that a putative class cannot be certified as an “issue” class under Rule 23(c)(4) without also satisfying the requirements in Rule 23(a) and (b).  This ruling is important because it prohibits putative classes from using the “issue” class mechanism of Rule 23(c)(4) to skirt the important procedural requirements in Rule 23(a) and (b) that are meant to protect both the litigants and absent parties.  The court also encouraged the use of the partial summary judgment mechanism, rather than Rule 23(c)(4), to resolve discrete legal issues common to many class members. 

On May 19, 2023, the United States Court of Appeals for the Sixth Circuit became the second circuit court to reject a familiar two-step certification procedure for collective actions under the Fair Labor Standards Act (FLSA).  In Clark v. A&L Home Care and Training Center, LLC, the court held that FLSA plaintiffs who seek to represent other employees in a collective action must demonstrate a “strong likelihood” that other employees they seek to represent are “similarly situated” to the lead plaintiffs.  

Last week, the Ninth Circuit issued a decision holding that California employers can require employees to enter into mandatory arbitration agreements as a condition of their employment.  In the decision, Chamber of Commerce v. Bonta, No. 20-15291 (9th Cir., Feb. 15 2023), a three-judge panel reversed the Ninth Circuit’s own prior decision and found that Assembly Bill 51 (AB 51), which sought to impose criminal and civil penalties on employers who require employees to enter into such agreements, is preempted by federal law.

In January 2021, the Ninth Circuit upheld a 2018 ruling by the Federal Motor Carrier Safety Administration (“FMCSA”), which found that federal law preempts California state meal and rest break laws as applied to drivers of property-carrying commercial motor vehicles.  A few months later, the United States Supreme Court denied a petition challenging the Ninth Circuit’s decision.  We previously wrote about the Ninth Circuit’s ruling, and the Supreme Court’s denial, in a post that you can read here.

In a recent ruling, the U.S. District Court for the Northern District of Illinois determined that a bartender’s evidence – affidavits from herself and her supervisor – were insufficient to obtain conditional certification on her Fair Labor Standards Act (“FLSA”) claim. Plaintiff Alexa Roberts brought suit against One Off Hospitality Group and several of its restaurants and management personnel (“Defendants”) alleging that she was deprived of wages and overtime compensation in violation of the FLSA, the Illinois Minimum Wage Law (“IMWL”), and the Illinois Wage Payment and Collection Act (“IWPCA”). Plaintiff alleged that she was required to clock in and out at the times of her scheduled shift even if she worked in excess of those times so that Defendants would not have to pay overtime. She further alleged that Defendants were aware that other employees were also working off the clock.

Court watchers following the ripple effects of groundbreaking wage and hour opinion Swales v. KLLM Transport Services, LLC, 985 F.3d 430 (5th Cir. 2021) (“Swales”) may have gained their first insight into the Supreme Court’s thought process following Chief Justice John Robert’s refusal to pause a conditional collective action certification in Maximus Inc. v. Thomas, et al., No. 22A164, currently pending in the Eastern District of Virginia and following this decision and a failed appeal from the Fourth Circuit.

The Department of Justice (DOJ) announced earlier this month that it will begin the rulemaking process related to “Nondiscrimination on the Basis of Disability:  Accessibility of Web Information and Services of State and Local Governments.” 

Just days ago, the highest court in Massachusetts—the Supreme Judicial Court (“SJC”)— decided whether former food delivery drivers for GrubHub could escape their arbitration agreements and bring a wage and hour class action lawsuit in court. In excellent news for employers operating in the intrastate delivery sector, the SJC held that they could not. Archer v. GrubHub, Inc., SJC-13228. 2022 WL 2964639 (July 27, 2022) (“GrubHub II”).

As we previously reported, the U.S. Supreme Court was poised to resolve a circuit court split in Robyn Morgan v. Sundance, Inc. (No. 21-328), regarding whether a party must prove that it was prejudiced when arguing that the other party waived its right to arbitration by failing to compel arbitration at the outset of litigation. 

On June 15, 2022, the U.S. Supreme Court issued its decision on Viking River Cruises, Inc. v. Moriana (Case No. 20-1573) reversing the California Court of Appeal’s decision to affirm the denial of Viking’s motion to compel arbitration Moriana’s “individual” PAGA claim and to dismiss her other PAGA claims.

Of the many class action-related decisions from the last year, two courts issued holdings that are particularly relevant to defending against class action lawsuits (particularly in the context of the Fair Credit Reporting Act (FCRA)).

On October 4, 2021, the United States Supreme Court denied certiorari on a petition challenging the Ninth Circuit’s ruling that California’s strict meal and rest period rules do not apply to commercial truck drivers engaged in interstate commerce.  The Court’s denial of the petition leaves in place a decision that came as a welcome sigh of relief for employers in the trucking industry.

The Worker Adjustment and Retraining Notification (“WARN”) Act requires employers to give employees at least 60 days’ notice when a “mass layoff” is about to occur at a “single site of employment,” which is typically a single location or a group of contiguous work locations.  Courts are beginning to confront the question of what constitutes a “single site of employment” under the WARN Act for employees working remotely, and how remote work policies impact class certification considerations.  Given the prevalence of remote work during the pandemic and the likely continuation of such work arrangements, these decisions are of particular importance to employers considering mass layoffs or facing class actions based on the application of remote work policies or practices.

In a bipartisan vote, Congress passed a new law poised to end employers’ ability to require employees to arbitrate claims for sexual harassment or sexual assault through a pre-dispute arbitration agreement.  This new law is the latest in an ongoing series of state and federal laws inspired by the #MeToo movement, and the most significant federal legislation involving the issue of arbitration in recent years.

On December 13, 2021, the Massachusetts Supreme Judicial Court (“SJC”) issued its long-awaited decision determining that the Massachusetts Independent Contractor Statute, G.L. c. 149, § 148B (“Independent Contractor Statute”), which establishes the three-pronged “ABC” test used to classify workers as independent contractors or employees – and provides for a rebuttable presumption that workers are employees unless the purported employer proves otherwise – is not the applicable standard to determine whether an entity is a joint employer.

On November 15, 2021, the U.S. Supreme Court agreed to hear Robyn Morgan v. Sundance, Inc. (No. 21-326), a lawsuit from a fast-food worker who asserts that her employer waived its right to compel arbitration by engaging in litigation conduct inconsistent with its purported contractual right to arbitration.  By granting review, the Court is poised to resolve a circuit split as to whether a party must prove prejudice when arguing that the other party waived its right to arbitration by acting in a manner inconsistent with the arbitration agreement.

A California appellate court recently upended a representative PAGA and class action settlement because the named plaintiff did not exhaust administrative remedies under PAGA because he failed to identify each separate theory of liability.

On September 8, 2021, the House Education and Labor Committee issued proposed legislation in connection with the House’s new spending bill. Among other pro-union proposals issued in connection with the Protecting the Right to Organize (PRO) Act, the proposed legislation seeks to amend the National Labor Relations Act (NLRA) by banning class and collective action waivers.

The proposed legislation says that no employer shall “enter into or attempt to enforce” any express or implied agreement not to “pursue, bring, join, litigate, or support any joint, class, or collective claim” arising from the employment relationship.   This is unwelcome news to employers who rely on class and collective action waivers in their arbitration agreements.

On August 17, 2021, the Sixth Circuit Court of Appeals became the first federal appellate court to hold that where nonresident plaintiffs opt into a putative collective action under the FLSA, a court may not exercise specific personal jurisdiction over claims unrelated to the defendant’s conduct in the forum state.  Canaday v. The Anthem Companies, Inc. (Case No. 20-5947) (6th Cir).  The next day, the Eighth Circuit reached the same conclusion in a separate case.  Vallone v. CJS Solutions Group, LLC, d/b/a HCI Group (Case No. 20-2874) (8th Cir).

We previously blogged about how ...

On August 10, 2021, the Third Circuit in Travers v. Federal Express Corporation revived a class action lawsuit under the Uniformed Services Employment and Reemployment Act of 1994 (“USERRA”), holding that employers must provide servicemembers with pay during military leave when employers pay employees on “comparable types of leave.”

Use of employee biometric data – including fingerprints, eye scans, voiceprints, and facial scans – continues to be a popular, yet legally risky, proposition for employers. Several states and municipalities have laws that specifically govern the use of biometric data, the highest profile of which is the Illinois Biometric Information Privacy Act (BIPA).

Since the Supreme Court’s 2018 Epic Systems ruling, employers increasingly rely on arbitration agreements for more efficient resolution of both single plaintiff and class action claims.  Prolonged judicial review of arbitration awards, however, can dilute that efficiency.  As a result, some employers include waivers of judicial review, in whole or in part, in their arbitration agreements.

But are such waivers permissible?  In a recent decision, the Fourth Circuit said “yes” as it relates to appellate review.

On April 7, 2021, a split panel of the U.S. Court of Appeals for the Eleventh Circuit (the “11th Circuit”) issued its highly-anticipated decision in Gil v. Winn-Dixie Stores, reversing a 2017 judgment against Winn-Dixie that found that the grocery chain’s website violated Title III of the Americans with Disabilities Act (“ADA”).  The 11th Circuit reversed and remanded the case for further proceedings, in part, based on its finding that websites are not a “public accommodation” under the ADA.

Uber Technologies, Inc. has been sued in a class action lawsuit alleging the company’s use of criminal background checks discriminates against Black and Latinx drivers. The complaint, filed in the U.S. District Court for the Southern District of New York on April 8, challenges Uber’s “unlawful use of criminal history to discriminate against its drivers in New York City as well as its brazen noncompliance with human rights and fair credit laws.”

Named plaintiff Job Golightly, a Black resident of Bronx County, New York, drove for Uber from 2014 through August 2020. Golightly claims that his criminal history consists of a single 2013 misdemeanor speeding violation from Virginia. According to the lawsuit, until 2017 Uber had relied solely on background checks conducted by the New York City Taxi and Limousine Commission (TLC). Plaintiffs allege that in mid-2017, in response to negative news coverage on assaults committed by drivers, Uber began using the credit reporting agency Checkr to conduct additional background checks on current and prospective drivers. As a result, in August 2020 Uber allegedly conducted a background check on Golightly that revealed his 2013 speeding violation. One day later, Golightly claims that Uber deactivated him from its platform, preventing him from driving for the company.

The Seventh Circuit Court of Appeals recently decertified a class of female correctional facility employees who alleged gender discrimination based, in part, on a theory of “ambient” harassment.  The opinion underscores how the individualized nature of harassment claims can act as a barrier to class certification.

Nature of Claims

Female employees of the Cook County Jail Complex sued their employer for gender discrimination based on the County’s alleged failure to prevent and remedy male prison inmates’ sexual harassment of the plaintiffs.  Plaintiffs claimed that Cook County permitted this harassment to go unchecked and failed to maintain effective procedures to prevent and remedy the harassment.

While COVID-19 may have hit the business community like a hurricane, whether the pandemic, in fact, qualifies for a natural disaster exception under the federal law requiring businesses to warn employees of impending layoffs, remains an open question.

This February, a federal judge paved the way for the Eleventh Circuit to weigh in on whether a class action can proceed against an employer who was forced to lay off employees due to COVID-19.  That case, Benson v. Enter. Leasing Co. of Orlando, LLC, is one of the first to look at the application of pandemic-related layoffs to the Worker Adjustment Retraining Notification Act of 1988, 29 U.S.C. § 2100 et seq. (“WARN Act”). Underscoring the case’s importance to the business community, the U.S. Chamber of Commerce has just filed an amicus or “friend of the court” brief asking the Eleventh Circuit to take up the case and provide “much-needed guidance” to other courts across the country.

Last month, the Seventh Circuit Court of Appeals rejected a proposed class of thirty-seven employees for failure to satisfy Federal Rule of Civil Procedure 23’s numerosity requirement.

“Much ink has been spilled” over the requirements of Rule 23, the Seventh Circuit noted.  But only a small share of those cases concern the numerosity requirement.  Most opinions deal with commonality or typicality.  Recognizing this paucity, the court took occasion to outline the parameters of the numerosity factor. The resulting opinion is a useful guide to parties engaged in smaller class actions or class actions where the commonality or typicality requirements may only apply to a smaller group of workers.

An Alabama federal judge granted AutoZone's request to dismiss nearly 500 current and former store managers from a nationwide collective action that the national auto-parts chain had misclassified them as exempt under the Fair Labor Standards Act (“FLSA”) and denied them overtime, holding those plaintiffs had missed the three-year statute of limitations and that plaintiffs had failed to establish equitable tolling should apply to save their claims.

For decades, most federal courts have held the view that private settlements of Fair Labor Standards Act (FLSA) claims are unenforceable unless they are approved by the Department of Labor or a court.  However, as we have reported in prior posts, some federal courts have recently begun to challenge this long-held view and have taken a more flexible approach that treats FLSA settlements no differently than settlements or releases involving other employment law claims.  In the recent decision of Stuntz v. Lion Elastomers, L.L.C., the Fifth Circuit Court of Appeals continued that trend and held that a union’s private settlement of FLSA claims on behalf of bargaining unit employees precludes individual bargaining unit employees from later bringing their own FLSA claims.

The Ninth Circuit Court of Appeals has joined several sister circuits in holding that courts should consider the amount of “possible” and not “probable” punitive damages in determining the $5 million amount-in-controversy for federal jurisdiction in class action cases.

The case of Greene v. Harley-Davidson, Inc. presented a technical, but unresolved issue for the court – determining the proper burden when the defendant removes a case from state court based on Class Action Fairness Act (“CAFA”) jurisdiction and relies on punitive damages to establish the $5 million CAFA amount-in-controversy requirement.

The Ninth Circuit Court of Appeals recently clarified that a named plaintiff gives up his or her right to represent a class if, in an individual settlement, he or she does not carve out from the settlement a concrete financial interest in the putative class action.  In so holding, the court explained that it was not enough for a plaintiff to generically carve out “class claims,” without identifying a more specific financial stake that would remain in the outcome of the class claims.

An employer’s obligations under the Fair Credit Reporting Act (“FCRA”) are triggered when it obtains a “consumer report” from a “consumer reporting agency” for use in making an employment decision. A federal court in the Middle District of Florida is set to rule on a summary judgment motion clarifying whether a business that transmits public records unaltered to a prospective employer is a “consumer reporting agency”.

A hotly contested ruling in a Fair Credit Reporting Act (“FCRA”) class action case will soon be appealed to the Supreme Court of the United States.  The Ninth Circuit in Ramirez v. TransUnion LLC, Case No. 17-17244, recently granted the parties’ Joint Motion to Stay the Mandate, seeking to stay the Ninth Circuit’s mandate pending TransUnion’s filing of a petition for writ of certiorari in the Supreme Court.  The Motion to Stay comes soon after the court denied TransUnion’s Petition for Rehearing or Rehearing En Banc regarding the Ninth Circuit’s decision in Ramirez v. TransUnion LLC, 951 F.3d 1008 (9th Cir. 2020).

A recent Fifth Circuit opinion held that a company’s arbitration agreement did not prevent employees from pursuing their claims as a collective arbitration, rather than individual claims.  As class claims related to COVID-19 begin to surge, the opinion provides occasion for companies to review their arbitration agreements to ensure that the companies’ aims are clearly drafted.

 COVID-19

The harm COVID-19 has wrecked on workplaces is no secret.  As employees and employers grapple with remote work, pay reductions, and record unemployment, it is reasonable to expect a surge of employment litigation in the months ahead.

For the first time in the Ninth Circuit, the Court of Appeals addressed the issue of whether every class member in a class action lawsuit needs “standing” to recover damages at the final judgment stage, and found in the affirmative.  In Ramirez v. TransUnion LLC, No. 17-17244, 2020 WL 946973 (9th Cir. Feb. 27, 2020), a class of 8,185 consumers brought a class action against the credit reporting agency TransUnion LLC (“TransUnion”) pursuant to the Fair Credit Reporting Act (“FCRA”), alleging that TransUnion, knowing that its practice was unlawful, incorrectly placed terrorist alerts on the front page of consumers’ credit reports and later sent the consumers misleading and incomplete disclosures about the alerts and how to remove them.

On Thursday, the California Supreme Court ruled that employees must be paid for time spent undergoing security checks before leaving work.

Last month, a court in the N.D. of California denied class certification to a group of Chipotle workers who alleged that the burrito chain maintained unlawful English-only workplaces in the state of California.  Guzman v. Chipotle Mexican Grill, Inc., Case No. 17-cv-02606 (N.D. Cal. Jan. 15, 2020).  The opinion is a textbook example of how a lack of uniform written policies can, in some instances, benefit employers defending pattern and practice lawsuits.  Separately, the case also provides occasion to review the EEOC’s stance on English-Only policies.

The Department of Labor issued two opinion letters on Tuesday in response to specific inquiries that may nonetheless provide some clarity for employers in general.

The first letter was in response to an inquiry from an employer that offers its employees a non-discretionary lump sum bonus of $3,000 (in addition to their regular hourly rate) for completing a 10-week training program.  During the training program, the employees may work more than 40 hours in a given week and the employer requested an opinion from the DOL on the proper method for calculating overtime pay.  In response, the DOL stated that the $3,000 bonus must be included in the regular rate of pay (for purposes of calculating overtime) “as it is an inducement for employees to complete the ten-week training period.”  The DOL then explained that the bonus should be divided into ten $300 increments to be added to the employees’ pay for each week of the training program for purpose of making the overtime calculation.

Could the onslaught of anticipated accessibility litigation surrounding Braille Gift Cards in 2020 be limited by a strict construction of the ADA Title III standing requirement? Maybe so.

The cottage industry of accessibility litigation in New York was recently dealt a blow when the Eastern District of New York dismissed a serial plaintiff’s class action accessibility complaint by strictly construing the standing requirement and finding that the court lacked subject matter jurisdiction.

A recent California appellate court decision has held that a banquet hall’s “mandatory service charge” could, under the right circumstances, be a “gratuity” that must be paid to employees under California Labor Code § 351. In O’Grady v. Merchant Exchange Productions, the defendant-employer added on a percentage service charge for all banquet contracts for food and beverages. Some, but not all, of the service charge was distributed to managers who did not serve food or beverages at the banquet. Plaintiff brought a putative class action alleging that the defendant’s practice of distributing the service charge proceeds to non-managerial banquet staff violated California Labor Code § 351, which states that gratuities are the sole property of the employees, and the employer (including managers) may not take any portion of the gratuity. The trial court held as a matter of law that a service charge cannot be a tip or gratuity under § 351 and dismissed the case.

Dollar General and the Equal Employment Opportunity Commission (“EEOC”) recently settled a six-year-old Title VII lawsuit.  The EEOC brought its race discrimination claim on behalf of a Charging Party and a class of Black job applicants, alleging that Dollar General’s use of criminal justice history information in the hiring process had a disparate impact on Black applicants.

The body of law surrounding class action employment arbitrations received another jolt Monday when the Second Circuit revived an arbitration action with a potential class of roughly 70,000 employees.

In Jock v. Sterling Jewelers, the Second Circuit overturned the district court and upheld an arbitrator’s decision to bind absent class members to the arbitration provisions of the company’s agreement.  The case represents another significant development in the realm of class arbitrations and class waivers, which have been the subject of significant recent litigation.

As we have previously reported here and here, courts and the National Labor Relations Board (“NLRB”) have released a number of recent decisions favoring the enforceability of arbitration agreements in the employment context.

It is now settled law that class-action waivers in arbitration agreements do not violate the National Labor Relations Act (“the Act”) or infringe on employees’ Section 7 rights under the Act.  In a recent decision, the NLRB extended this holding to allow employers to implement arbitration programs—including those with class-action waivers—in direct response to litigation by its employees.

As discussed on the Hunton Retail Law Resource blog on November 5, 2019, for the past few years, retailers have been confronted with a tidal wave of litigation alleging that their websites are inaccessible in violation of the Americans with Disabilities Act (ADA).  Indeed, in 2018 alone, one analysis determined that there were at least 2,258 web accessibility cases filed in federal court, a 177 percent increase from the previous year.

Read More

Last week, a federal judge in the Eastern District of Michigan granted Domino’s Pizza, Inc.’s motion to dismiss, holding that workers operating under the Domino’s brand must arbitrate their claims that the pizza chain made its franchises promise not to hire each other's employees, then misled the public to believe no such agreement existed.

Earlier this year, we wrote about a proposed bill in California, AB 51, which would prevent employers from requiring their employees to bring all employment-related claims, including discrimination, harassment, retaliation, and wage and hour claims, in arbitration instead of state or federal court.  Earlier this month, Governor Newsom signed AB 51 into law.

The U.S. Supreme Court declined to hear a case on October 7 that likely would have clarified the scope of Title III of the Americans with Disabilities Act (the “ADA”) related to the operation of virtual platforms like websites and applications by private businesses.

Does an individual who receives a single text message, in violation of the Telephone Consumer Protection Act of 1991 (“TCPA”), have standing to sue in federal court?  The answer, for now, depends on where the lawsuit is filed.

The arbitrability of wage-and-hour actions brought under the California Private Attorneys General Act (PAGA) is an increasingly important issue due to the growth of PAGA-only actions in California.   In that regard, a split has emerged among courts regarding the arbitrability of PAGA claims for unpaid wages under Labor Code Section 558.

Earlier this year, a federal court in Illinois decertified a small class of Physicians who alleged gender-based pay discrimination under the Equal Pay Act (“EPA”).  Sajida Ahad, MD v. Board of Trustees of Southern Illinois University, No. 15-cv-3308 (C.D. Ill. Mar. 29, 2019).  Although not a groundbreaking appellate court decision, the opinion does provide a roadmap for employers facing EPA collective actions, which may gain traction in the wake of increasing media attention on pay disparities.

In a case of first impression, the Third Circuit rejected the view of the United States Department of Labor, ruling that incentive payments from third parties are not necessarily included in the calculation of an employee’s overtime rate.

In Secretary United States Department of Labor v. Bristol Excavating, Inc., No. 17-3663, 2019 WL 3926937 (3d Cir. Aug. 20, 2019) (“Bristol”), the Court of Appeals overturned a District Court’s order holding that all incentive payments made by third parties must be included in an employee’s overtime rate under the Federal Labor Standards Act (“FLSA”). The unanimous Third Circuit panel held that the understanding of the employer and employee determines whether third-party payments should be included in the overtime rate.

The United States District Court for the Western District of New York recently granted an early dismissal of a class action lawsuit prior to class certification.  Mandala v. NTT Data, Inc., 18-CV-6591 CJS, 2019 WL 3237361, at *1 (W.D.N.Y. July 18, 2019). The plaintiffs in Mandala were two African-American men who applied for and were offered jobs with the defendant employer.  After the employer conducted a criminal background check on the plaintiffs and found they each had a felony criminal conviction, the employer withdrew their job offers.  The plaintiffs filed a class action lawsuit against the employer alleging claims for disparate impact race discrimination under Title VII, and violations of New York state laws prohibiting criminal history discrimination and regulating the background check process.

The Fifth Circuit recently joined a majority of its sister circuits in holding that the question of whether arbitration agreements authorize class arbitration should be decided by courts.

In 20/20 Communications v. Lennox Crawford, the Fifth Circuit held that the availability of class-wide arbitration in a Fair Labor Standards Act case is a “gateway issue” of arbitrability.  The court reasoned that the fundamental differences between individual and class-wide arbitration required judicial determination as to which approach was available, absent “clear and unmistakable” language in the agreement delegating the decision to the arbitrator.

In a unanimous decision in Rodriguez v. Nike Retail Srvs., the Ninth Circuit overturned a California district court’s ruling in a wage and hour class action under the California Labor Code that granted Nike’s motion for summary judgement after applying the federal de minimis doctrine.

The Federal Trade Commission (“FTC”) recently rescinded several Model Forms and Disclosures related to the Fair Credit Reporting Act (“FCRA”), determining they are no longer necessary.  As we wrote about last Fall, [“Fall” hyperlink to CEJ and RTQ HELP blog article dated September 21, 2018] this change is the result of the Consumer Financial Protection Bureau (“CFPB”) issuing its own model forms and disclosures.  The FTC forms that have been rescinded and the corresponding CFPB forms that now apply are as follows:

In Corona Regional Medical Center v. Sali, No. 18-1262 (May 3, 2019), the Supreme Court recently dismissed a petition for a writ of certiorari that would have resolved a circuit split as to whether expert testimony must be admissible to be considered at the class certification stage.  As a result, the Ninth Circuit remains one of only two circuits that have ruled workers are not required to submit admissible evidence to support a motion for class certification.  In contrast, the Second, Third, Fifth, and Seventh Circuits have all held that expert testimony must be admissible to be considered at the class certification stage.

Massachusetts’ highest court, The Supreme Judicial Court (“SJC”), recently issued its long awaited decision in Sullivan v. Sleepy’s LLC, SJC-12542, in which the SJC responded to certified questions of first impression from the United States District Court for the District of Massachusetts. The case is particularly important for businesses which pay employees through commissions or draws (i.e., advances on commissions), particularly in the retail context where the ruling departs considerably from federal law.

In  a 5-4 decision, the U.S. Supreme Court slammed the door shut on class arbitration unless specifically authorized by the parties.  The decision, Lamps Plus, Inc. v. Varela, reaffirmed the Court’s prior precedent that arbitration is a matter of consent, and that “[s]ilence is not enough” to infer consent to class arbitration. 

Earlier this month, the Massachusetts Supreme Judicial Court (“SJC”) settled a long-standing debate amongst opposing parties in wage-hour class actions regarding the standard for class certification. The SJC’s decision in Gammella v. P.F. Chang’s China Bistro, Inc., No. SJC-12604, 2019 WL 1575527, definitively establishes that Rule 23 of the Massachusetts Rules of Civil Procedure – viewed as a stricter standard for certification and the same civil standard applicable to most other Massachusetts state court class actions – is the applicable standard for determining class certification in wage and hour cases.   The SJC also weighed in on satisfaction of the “numerosity” requirement for certification under Rule 23 and held that a rejected offer of judgment to a named plaintiff that covers all potential damages does not cut off that plaintiff’s claims.

Background

Federal Rule of Civil Procedure 23(f) governs petitions for interlocutory appeals of orders that grant or deny class certification and requires that a petition for permission to appeal must be filed “within 14 days after the order is entered.” It makes no mention of motions for reconsideration.

What must a private business do to ensure that its website complies with Title III of the Americans with Disabilities Act (“ADA”), which requires that places of public accommodation provide “full and equal enjoyment” to individuals with disabilities?  As discussed in a previous post, the ADA was enacted before widespread use of the Internet and does not directly address whether websites are places of public accommodation, or what a business must do so that its website complies with the ADA.  The U.S. Department of Justice (“DOJ”) has publicly stated that websites must be accessible to individuals with disabilities, but has yet to articulate specific technical requirements for websites.

Recently-introduced federal legislation could have a significant impact on equal pay class actions. On January 30, 2019, Democratic legislators reintroduced the Paycheck Fairness Act (H.R.7), which provides for various changes to the Equal Pay Act of 1963 (“EPA”).  Earlier versions of this bill, which was originally introduced in 1997, have all died in Congress. However, on February 26, 2019, the House Committee on Education and Labor voted in favor of H.R.7, which means the legislation will now be presented to the full House for a vote.

Some key features of the newly-proposed legislation include:

We recently highlighted DOL opinion letter 2018-27, which rescinded the 80/20 rule and was a welcome change for employers in the restaurant industry.  However, less than two months after the DOL’s policy change, the U.S. District Court for the Western District of Missouri rejected the DOL’s new guidance, claiming it is “unpersuasive and unworthy” of deference.

As a refresher, the 80/20 rule requires businesses to pay tipped workers at least minimum wage (with no tip credit) for non-tip generating tasks when these tasks take up more than 20% of the tipped workers’ time.

Two years after jointly issuing its 2016 Antitrust Guidance for Human Resource Professionals with the FTC, the DOJ is now taking active steps to clarify its stance on no-poaching agreements.  On January 25, 2019, the DOJ filed a Notice of Intent to File a Statement of Interest in three different class action lawsuits brought by employees of fast-food franchises against their employers alleging that no-poaching agreements in franchise agreements violate antitrust law.

If your background check forms include too much information about rights under state law, or even grammatical errors, you might be in trouble according to the Ninth Circuit.  In Gilberg v. California Check Cashing Stores, the appeals court recently ruled against an employer for using background check disclosure forms that violate both the federal Fair Credit Reporting Act (FCRA), and California’s Investigative Consumer Reporting Agencies Act (ICRAA).

The California Second Appellate District has held that retail employees who were required to “call in” two hours before their scheduled shift to find out if they actually needed to report to work were entitled to reporting time pay. The Court held that California retail employees do not need to physically appear at the workplace in order to “report for work,” and be entitled to reporting time pay, under the Industrial Welfare Commission (“IWC”) Wage Order 7.  Given the robust dissent and sweeping change this decision could bring about, this is a case to watch as it may find its way to the California Supreme Court.

As detailed in our previous article on this issue, in Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco Cty., 137 S. Ct. 1773 (June 17, 2017), the U.S. Supreme Court established limitations on personal jurisdiction over non-resident defendants in “mass actions,” effectively supporting the view that plaintiffs cannot simply “forum shop” in large class and collective actions and instead must sue where the corporate defendant has significant contacts for purposes of general jurisdiction or limit the class definition to residents of the state where the lawsuit is filed.  Notably, the Supreme Court’s decision was limited to personal jurisdiction issues in state courts, which has led to a split on the question of whether, and to what extent, the Supreme Court’s analysis applies to class and collective actions pending in federal court.

In a rare win for plaintiffs seeking to avoid arbitration, the U.S. Supreme Court rejected a trucking company’s attempt to compel arbitration in a driver’s proposed minimum wage class action.  The Court held that the Federal Arbitration Act’s exemption for interstate transportation workers applies not only to employees, but also to those classified as independent contractors.

The Supreme Court once again has shown its strong preference for enforcing the terms of arbitration agreements as written by the parties.  In Henry Schein Inc. v. Archer & White Sales Inc., Justice Kavanaugh’s first written opinion, the Court held that when an arbitration agreement delegates the threshold question of arbitrability to an arbitrator, the arbitrator, not a court, should decide the question, even if it is clear to a court that the dispute is not covered by the arbitration agreement.  This unanimous opinion adds to a growing body of recent Supreme Court case law making clear that the terms of arbitration agreements, like any other contract, should be enforced as written and without policy considerations or exceptions.  

Before the lame duck period of the 115^th Congress, Rep. Jerrold Nadler (D-NY) and a group of 58 Democrat co-sponsors, introduced the Restoring Justice for Workers Act (H.R. 7109), which would prohibit  employers from requiring employees to sign mandatory arbitration agreements.

Employers failing to strictly comply with FCRA requirements in conducting background checks continue to face expensive consequences.  On November 16, 2018, the United States District Court for the Southern District of California approved a $1.2 million settlement of a class action lawsuit alleging violations of the FCRA filed against the popular pet supplies chain Petco.

The Department of Labor (“DOL”) recently published an Opinion Letter (FLSA-2018-27) reissuing its January 16, 2009 guidance (Opinion Letter FLSA-2009-23) and reversing its Obama-era position on the 20% tip credit rule.  This opinion letter marks another major shift in DOL’s policy and presents a welcome change for employers in the restaurant industry.

The U.S. District Court for the Northern District of California is a popular venue for class action lawsuits.  As of November 1, 2018, it is also the first to require parties settling such lawsuits to make broad public disclosures regarding the settlements.

The combination of a quirky procedural posture and broad language used by the Supreme Court in 1941 have left Home Depot trapped in a North Carolina state court defending against a class action, despite the removal provisions of the Class Action Fairness Act.  On September 27, 2018, the Supreme Court granted certiorari to decide whether CAFA authorizes removal of class action counterclaims when its requirements are otherwise met.

As we previously reported, the United States Supreme Court held this past Term in Epic Systems Corp. v. Lewis that class action waivers in arbitration agreements do not violate the National Labor Relations Act.  In the wake of Epic Systems, courts have found that class action waivers are likewise permissible under the FLSA.  These cases make clear that class action waivers are here to stay.

As we wrote about last month, on May 21, 2018, the Supreme Court rendered its decision in Epic Systems Corp. v. Lewis, 138 S. Ct. 1632 (2018), rejecting perhaps the largest remaining obstacles to the enforcement of class action waivers in arbitration agreements in the employment context.  The Court concluded that the class action waivers did not violate the National Labor Relations Act (“NLRA”).  Although the Court’s opinion also seemed dispositive of whether such agreements could be avoided under the Fair Labor Standards Act (“FLSA”), at least one claimant tried to continue to litigate the issue, which was disposed of last week in Gaffers v. Kelly Servs., Inc., No. 16-2210 (6th Cir. 2018).  And now the Sixth Circuit has addressed whether Epic Systems would apply to arbitration agreements with putative independent contractors who contended that they should have been treated as employees.

On May 21, 2018, the United States Supreme Court issued its decision in Epic Systems Corp. v. Lewis, holding that the National Labor Relations Act (“NLRA”) does not prohibit the use of arbitration agreements with class/collective action waivers covered by the Federal Arbitration Act (“FAA”).   The Sixth Circuit has now concluded in Gaffers v. Kelly Services, Inc.  that the Fair Labor Standards Act (“FLSA”), like the NLRA, does not bar the use of arbitration agreements with class/collective action waivers.

The National Labor Relations Board (“Board”) has taken the first step to potentially reshape labor law since the May 21, 2018 Epic Systems case, in which the Supreme Court held that class waivers in arbitration agreements do not violate the National Labor Relations Act (“Act”).

On August 15, 2018, the Board vacated its decision and order in Cordúa Restaurants, Inc., 366 NLRB No. 72 (April 26, 2018), where a three-member panel of the Board held that an employee engaged in concerted, protected activity by filing a class action wage lawsuit against his employer.

The Board’s recent vacating of this order is noteworthy for two reasons.

After the Eleventh Circuit’s holding in Asalde v. First Class Parking Systems LLC 894 F.3d 1248 (11th Cir. 2018), more small employers may be subject to the requirements of the FLSA.  By expanding the “handling clause,” the case chips away at the degree of interstate commerce necessary for the FLSA to apply.

The California Supreme Court has ruled that California employers cannot rely on the federal de minimis doctrine to avoid claims for unpaid wages on small amounts of time.   Under the de minimis doctrine, employers may be excused from paying workers for small amounts of otherwise compensable time if the work is irregular and administratively difficult to record.  Federal Courts have frequently found that daily periods of approximately 10 minutes are de minimis even though otherwise compensable.

In Troester v. Starbucks Corporation, the California Supreme Court held that California wage and hour laws have not adopted the FLSA’s de minimis doctrine.  As a result, Starbucks was not permitted to avoid paying an employee who regularly spent several minutes per shift working off-the-clock.  The Supreme Court acknowledged, however, that there may be circumstances involving “employee activities that are so irregular or brief in duration that it would not be reasonable to require employers to compensate employees for the time spent on them.”

The Supreme Court recently approved substantial changes to the Federal Rules of Civil Procedure, including amendments to Rule 23, which covers federal class actions.  The amendments to Rule 23 seek to modernize and standardize the notice, settlement, objection, and appeal procedures.  If Congress approves the amendments, they will become effective December 1, 2018.     

Criminal Background Inquiries in the Hiring Process:  Class Action Litigation and “Ban the Box” Trends in 2018

Wednesday, August 8, 2018 1:00 p.m. – 2:00 p.m. ET

Speakers

Robert T. Quackenboss Partner, Hunton Andrews Kurth LLP Washington, DC

Susan Joo Associate, Hunton Andrews Kurth LLP San Francisco, CA

The Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d)(2), confers federal subject matter removal jurisdiction over purported class actions filed in state court when, among other things, there is an amount-in-controversry (“AIC”) exceeding $5,000,000.  Deciding whether a class action can be properly removed under CAFA typically turns on whether this high jurisdictional threshold can be met.

Andrea Mickles filed a complaint against her employer Country Club Inc., alleging it had violated the Fair Labor Standards Act (FLSA) by improperly classifying her and other employees as independent contractors and failing to pay them minimum wage and overtime.  She filed her case as a collective action, and others opted into the case before any ruling on conditional certification.  Those opt-ins eventually provided the Eleventh Circuit with an opportunity to address an issue of first impression in any Circuit: What is the status of individuals who opt into a case that is never conditionally certified?

In China Agritech, Inc. v. Resh, the U.S. Supreme Court held that putative class members cannot rely on equitable tolling to file new class actions under Rule 23 of the Federal Rules of Civil Procedure.

Resh was the third shareholder class action suit filed against China Agritech, Inc. under the Securities Exchange Act of 1934. The plaintiffs in the two previous suits settled their claims after the court denied their motions for class certification.