Jason E. Reisman
Just when you thought it was safe to go back in the water, the U.S. Department of Labor (“DOL”) reappears to address an issue that has most American employers on edge: How far will it expand the scope of who is eligible for overtime pay? After taking what seems like forever, the Trump DOL—despite the government shutdown—has apparently now completed its long-awaited revised new rule to reset the minimum salary threshold for employees subject to the Fair Labor Standards Act’s white collar exemptions.
We all remember the Obama DOL’s effort to expand overtime eligibility to four million currently-exempt employees by increasing the salary minimum by more than double, to $47,476 (which was blocked by a federal judge in Texas). The real question for now is, what has the Trump DOL decided is the “correct” new salary level? All signs point to a figure in the low to mid-$30,000s. We should find out very soon.
For now, sources are reporting that the finalized proposed new rule is about to be submitted (maybe today) to the White House’s Office of Information and Regulatory Affairs (“OIRA”) for review. This is the first step in the process before the proposed rule is released to the public for comment. Though the federal government is currently shut down, the White House is working. The last agenda issued by the DOL stated that this new rule would be released in March, so they seem to be on track for that.
So … stay tuned— “Same Bat time, same Bat channel!” More to come.
Andrew A. Napier
On December 6, the Philadelphia City Council passed two pieces of legislation that already are being touted as altering the landscape for workers in the city, especially those in the service industry.
“Fair Workweek” Bill
The “Fair Workweek” Bill, introduced by Councilwoman Helen Gym in June, applies to large chain businesses with more than 250 employees in the retail, food, or hospitality sectors, and at least 30 locations across the country or state (“Covered Employers”). If signed it would go into effect on January 1, 2020, and will require Covered Employers to give employees (including full-time, part-time, and seasonal and temporary workers) who work within the geographical boundaries of the City, 10 days’ advance notice of their work schedule. The amount of advance notice will increase to 14 days beginning January 1, 2021. An employee may decline, without penalty, any shift that occurs less than nine hours after the end of a shift, and if the employee agrees to work the shift, the employer must pay the employee an extra $40 per shift. Continue reading “Philadelphia City Council Passes “Fair Workweek” Bill and Votes to Increase Minimum Wage for City Workers and Contractors”
Thomas J. Szymanski
The Fair Credit Reporting Act (“FCRA”) provides federally-imposed limitations on all employers who seek information from a Consumer Reporting Agency about an applicant or employee for use in making an employment decision, such as a hiring or promotion. The FCRA contains specific notice, authorization, and reporting requirements related to obtaining a Consumer Report, including credit reports and criminal background checks, and potentially taking an adverse employment action based on that information.
Requirements before you request a Consumer Report: Continue reading “Requesting a Background Check to Make an Employment Decision? Read This First.”
Natalie Alameddine and Caroline Powell Donelan
Last week, in a significant blow to claims that gig economy workers are entitled to pursue disputes on a class or collective basis, and possibly whether those workers will be able to establish that they are employees and not independent contractors, a three-judge panel of the Ninth Circuit Court of Appeals unanimously decertified a class of 240,000 Uber drivers. The decision in O’Conner v. Uber is a victory for the ride-share company, which will now be able to defend claims that it misclassified employees as independent contractors on an individual basis—one arbitration at a time.
For the past five years, there has been an ongoing and contentious dispute over whether Uber drivers (and similarly, Lyft and other ride-share drivers) are independent contractors or employees. If the workers are deemed to be employees, Uber could face hundreds of millions of dollars in alleged California labor code violations and business expense claims. To combat the possibility of having to litigate this issue on a class-wide basis, Uber entered into arbitration agreements with each driver, requiring that any driver’s claims be arbitrated and that each case had to be arbitrated individually (rather than as a class action). Continue reading “Goodbye Uber Class Action, Hello Individual Arbitration”
Laura Reathaford, Caroline Powell Donelan, and Caitlin I. Sanders
On July 26, 2018, the California Supreme Court issued its long-awaited opinion in Troester v. Starbucks Corp., __ P.3d __ (2018). In the days that have followed, legal headlines have lamented the presumed “death” of the de minimis doctrine. But is Troester really that simple? And what does it mean for employer rounding policies?
The issue in Troester was whether the federal Fair Labor Standards Act’s (“FLSA”) de minimis doctrine applies to claims for unpaid wages under certain provisions of the California Labor Code. For the better half of the past century, the de minimis doctrine has been applied in the federal wage and hour context to excuse payment of wages under the FLSA for insubstantial or insignificant periods of time. Continue reading ““De Minimis” May Be Down, but It’s Not Out—And What Does It Mean for Employer Rounding Policies in California?”
Emery Gullickson Richards
The U.S. Supreme Court’s decision in Epic Systems Corp. v. Lewis has significant ramifications for the scope of class action waivers in employee arbitration agreements. In each of the three consolidated cases that the Court’s opinion addressed, the plaintiffs were pursuing class/collective actions with Fair Labor Standards Act (“FLSA”) claims for unpaid overtime. Plaintiff Sheila Hobson’s FLSA claim in the Murphy Oil case had been dismissed by the trial court as a result of the arbitration provision in the employment agreement she signed when she started work at a gas station in Alabama. By contrast, plaintiff Jacob Lewis, a technical communications employee, had overcome a motion to dismiss his FLSA overtime class action in the Epic Systems case by arguing that a class action waiver in an arbitration agreement that had been emailed to him by his employer was unenforceable. In the Ernst & Young case, plaintiff Stephen Morris sought unpaid overtime under the FLSA and the California Labor Code for working long hours during audit season. As a result of the Supreme Court’s ruling, after remand, all of these claims now appear destined for arbitration unless they are resolved. The Epic Systems decision represents a broader affirmation, however, that arbitration agreements are enforceable regardless of the nature of an employee’s claim, even if the claims are brought pursuant to employment statutes that explicitly provide for class or collective actions. Continue reading “The Epic Systems Decision: Where Do Employers Go from Here?”
Emery Gullickson Richards
The Supreme Court issued a landmark decision on May 21, 2018, which has widespread implications for all employers. In Epic Systems Corp. v. Lewis, a 5-4 opinion written by Justice Gorsuch, the Supreme Court held that arbitration agreements and class/collective action waivers are enforceable, putting to rest any argument that the National Labor Relations Act prevents or limits their enforceability. The decision provides employers further options for limiting litigation risk, particularly with respect to costly wage and hour collective actions. The decision also contains important implications for employers that maintain or are considering implementing arbitration agreements in the workplace, as there is no longer any identified legal impediment to the concept of an employer requiring its employees to waive the ability to bring a class or collective action under federal, state, and local employment laws. Continue reading “Epic Shift: Supreme Court Enforces Class Action Waivers in Arbitration Agreements”