California has broken with federal precedent once again in favor of its state employees, rejecting application of the Fair Labor Standard Act’s de minimis rule in a lawsuit seeking recovery of unpaid wages under California state law. Under the de minimis doctrine, employers are excused, in some circumstances, from paying employees under the federal Fair Labor Standards Act (FLSA) for small amounts of otherwise compensable time worked when that time is administratively difficult to track. The California Supreme Court held last week in Troester v. Starbucks Corporation, that the de minimis doctrine does not apply to claims for unpaid wages under California state law where an employer requires its employees to work small amounts of time off the clock on a regular basis or as a regular feature of the job. Continue Reading California Supreme Court Rejects FLSA’s De Minimis Doctrine
It was a good start to the week for employers. That is because on Monday the U.S. Supreme Court issued its long-awaited decision in Lewis v. Epic Systems, and two other related cases, and held that class action waivers in employment agreements with arbitration clauses must be enforced as written. In reaching this conclusion the Court flatly rejected the National Labor Relations Board’s position that class action waivers are invalid because they violate an employee’s right to engage in protected concerted activity under Section 7 of the National Labor Relations Act (NLRA).
After six years of uncertainty, those employers with appropriate class action waivers in their employment agreements can breathe a collective sigh of relief. For all other employers, it may be time to reconsider whether an employment agreement that includes a class action waiver can reduce your liability exposure. Continue Reading Supreme Court OKs Class Action Waivers in Employment Arbitration Agreements
Technological advances are leading many businesses to collect and store the biometric data of their employees, contractors, and customers for purposes of identification and authentication. Biometric data has many uses, such as giving people access to their accounts and sensitive financial information, providing employees, contractors, and customers physical access to workplaces and businesses, and giving employees the ability to clock in and out of work without using keyfobs or ID cards. Continue Reading Illinois Businesses Beware: Class Action Suits on the Rise for Alleged Violations of the Illinois Biometric Information Privacy Act
Another federal court of appeals has weighed in on the question of whether requiring employees to waive the right to bring a class action against their employer in arbitration or court as a condition of employment violates employees’ rights under Section 7 of the National Labor Relations Act (NLRA). Continue Reading Is the Tide Turning Against Class Action Waivers in Arbitration Agreements?
In a decision that creates a split with the 5th Circuit Court of Appeals, the 7th Circuit on May 26, 2016 adopted the National Labor Relations Board’s D.R. Horton rationale and held that a condition of employment requiring employees to waive the right to bring class or collective actions either in arbitration or in judicial forums runs afoul of Section 7 of the National Labor Relations Act, and is unenforceable as illegal. Lewis v. Epic Systems Corporation, No.15-2997 (7th Cir. 2016). Continue Reading 7th Circuit Holds Mandatory Waiver of Class Claims Unlawful; Creates Circuit Court Split
Another round in the seemingly never-ending arbitration bout has been decided, and this one appears to go in favor of companies seeking to stave off class arbitration. Recently, the Fourth Circuit joined the Third and Sixth Circuits by holding that courts, not arbitrators, decide the issue of whether an arbitration agreement permits class arbitration, unless the parties “clearly and unmistakably” agreed otherwise. Dell Webb Communities, Inc., v. Carlson, No. 15-1385, ___ F.3d ___, 2016 WL 1178829 (4th Cir. Mar. 28, 2016). Although the Supreme Court has not yet decided this issue, the decisions in Dell Webb and the other federal appellate cases will assist companies seeking individual arbitration by providing for meaningful judicial review of this important question. Continue Reading And The Fight Goes On: Another Circuit Rules Classwide Arbitration a Question for Courts, Not Arbitrators
The U.S. Supreme Court has upheld the use of statistical sampling evidence to establish liability and damages in a “donning and doffing” overtime class action under the Fair Labor Standards Act (FLSA) and state wage law. Tyson Foods, Inc. v. Bouaphakeo, No. 14-1146, 2016 WL 1092414 (U.S. Mar. 22, 2016).
Business groups had urged the Court to prohibit the use of statistical or “representative” evidence in class actions, arguing that a “trial by formula” ignores differences among individual class members and violates a defendant’s due process right to litigate defenses to individual claims. Continue Reading Supreme Court OKs Use of Statistical Sampling in Class Action
There’s no dissent here. Justice Scalia’s unexpected passing presents a potential blow to employers in two ways. First, the Supreme Court lost one of its most staunchly conservative justices, who often sided with management in key employment-related decisions. Second, his death has left the Supreme Court without a clear majority and no easy mechanism to reverse appellate court decisions favoring employees. With the 2016 elections nearly eight months away, and the likelihood of a replacement shrinking with each news cycle, 4-4 decisions are probably the new norm until a replacement is confirmed after the election. Continue Reading It’s Unanimous: Employers Face an Uncertain Future After Justice Scalia’s Death
Part 2 of a 3-Part Series
When considering the potential bill of sale on arbitration, employers that once considered arbitration may sing a different tune. In Part 1 of our 3-part series on mandatory arbitration, we pointed out that, contrary to legal lore, arbitration often proves just as inefficient as litigation against a principle-driven plaintiff in court without the promised cost and time savings. In addition, the defense bar did not anticipate the cost of defending a class action waiver (seen as a key benefit to mandatory arbitration) before the NLRB. Continue Reading More Money, More Problems: Class Action Waivers in Mandatory Arbitration Hit Roadblocks from the NLRB
In a significant reversal of prior precedent, the California Supreme Court ruled on June 23, 2014, in Iskanian v. CLS Transportation Los Angeles, LLC, No. S204032, that employment arbitration agreements with mandatory class action waivers are generally enforceable in light of the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). Prior to the Iskanian decision, class waivers in employment arbitration agreements were regularly invalidated under prior California Supreme Court precedent as set forth in Gentry v. Superior Court, 42 Cal. 4th 443 (2007). (In Gentry, the court held that class waivers in employment arbitration agreements may be unenforceable where a trial court concluded that class arbitration would be a more effective means of vindicating the employees’ rights than individual litigation and arbitration.) In last week’s Iskanian decision, the court concluded that, in light of Concepcion, its ruling in Gentry was abrogated by the Federal Arbitration Act (“FAA”), and accordingly, class waivers in employment arbitration agreements are generally enforceable. Continue Reading Class Action Waivers in Employment Arbitration Agreements Are Enforceable, Except for PAGA Claims