California Corner: The Employee v. Contractor Saga Continues as Uber and Postmates Face First Defeat in Attempt to Enjoin AB5

Caroline Powell Donelan and Natalie Alameddine

The hopes of California gig economy companies to retain the flexibility to classify workers as independent contractors were dashed this week when a federal district court judge refused to enjoin Assembly Bill 5 (“AB5”), which codifies the “ABC” test for most independent contractor classifications.

Governor Gavin Newsom signed AB5 into law last fall, effecting a seismic change on California’s legal landscape. Effective January 1, 2020, the law makes it nearly impossible for companies to lawfully classify most workers as independent contractors (rather than employees). The bill expands on California Supreme Court’s three-prong “ABC” test from its 2018 Dynamex decision for determining how workers can be classified, which you can read about here. With certain limited statutory exceptions, AB5 provides that, to properly classify a worker as an independent contractor in California, an employer must demonstrate that the worker: (A) is free from the company’s control and direction; (B) performs work outside of the company’s usual course of business; and (C) is customarily engaged in independent work of the same nature as the work performed. There is no balancing, as all three factors must be met. Continue reading “California Corner: The Employee v. Contractor Saga Continues as Uber and Postmates Face First Defeat in Attempt to Enjoin AB5”

NEWS FLASH: The Ban Is Back! Philadelphia Employers Can’t Ask About Salary, Wage, and Benefits History

Thomas J. Szymanski

Effective immediately, Philadelphia employers are prohibited from asking job applicants about their salary, wage, and benefits history.

As a bit of background, in 2016, the Philadelphia City Council passed an ordinance banning salary, wage, and benefits history inquiries by employers (and also barring employers from setting a new hire’s initial pay based on their salary history), which was signed into law in January 2017. However, the ban on salary and wage history inquiries has been on ice since April 30, 2018, when it was enjoined by the United States District Court for the Eastern District of Pennsylvania. Today, the U.S. Court of Appeals for the Third Circuit dissolved the district court’s injunction; therefore, Philadelphia employers must immediately stop asking job applicants about their salary, wage, and benefits history. The Third Circuit also upheld the lawfulness of the ordinance’s bar on using salary history to set initial pay.

Please contact a member of Blank Rome’s Labor & Employment practice group if you have any questions about compliance with Philadelphia’s salary, wage, and benefits ban or any other employment issues.

As We Predicted, Challenges to NY Reproductive Health Decision-Making Law Have Begun

Stephen E. Tisman

In a December 17, 2019, Blank Rome Workplace post, we described the law enacted in New York expanding “protected status” to cover employee decision-making regarding reproductive rights matters. (See blankromeworkplace.com/2019/12/17/new-york-expands-discrimination-protection-to-reproductive-health-decision-making/). We concluded with the prediction that:

The law will undoubtedly be challenged by an employer claiming that providing such coverage violates the employer’s religious beliefs (think Masterpiece Cakeshop v. Colorado Civil Rights Commission). The ultimate fate of this statute will be resolved under federal First Amendment law.

That challenge has begun. On January 31, 2020, a lawsuit was filed in federal district court seeking a declaration that the statute is unconstitutional and void, and for an injunction to bar enforcing it against the plaintiffs. Christopher T. Slattery, et al. v. Andrew M. Cuomo, et al., U.S.D.C., N.D.N.Y., Case No. 5:00-at-99999.

Stay tuned for developments.

Breaking: California Grants Preliminarily Injunction of AB-51

Caroline Powell Donelan

UPDATE: Today, a federal court preliminarily enjoined the enforcement of AB-51 (California’s anti-arbitration law discussed here, here, and here) as it relates to arbitration agreements governed by the Federal Arbitration Association (“FAA”). We will get a detailed order from the court soon, but the minute order issued today is below. A great reminder to employers who wish to implement arbitration that the agreement should always expressly state it is governed by the FAA. Continue reading “Breaking: California Grants Preliminarily Injunction of AB-51”

No New York Employee Wage Liens—Yet!

Stephen E. Tisman

In July, we reported that the New York State Legislature had passed a bill that could substantially alter the legal landscape of wage disputes by allowing employees with wage claims to file liens against their employers’ assets in the amount of the claim. The lien could be filed without any court order or determination of probable liability. The bill further permitted attachments of the employer’s property and would have expanded the personal liability of the 10 largest shareholders of non-public companies by making them liable not only for wages, but also for interest, penalties, liquidated damages, attorneys’ fees, and costs.

On January 1, 2020, anxious employers got a reprieve—albeit a temporary one—when Governor Cuomo vetoed the legislation. Continue reading “No New York Employee Wage Liens—Yet!”

Salary History Ban Spreads—New Jersey and New York Jump on Board!

Alix L. Udelson

New Jersey and New York are the latest states to prohibit employers from asking job applicants about their pay history and considering pay information in making employment decisions.

New Jersey

In New Jersey, effective January 1, 2020, private employers cannot screen applicants based on their pay history. Employers also cannot require an applicant’s salary history satisfy a certain minimum or maximum criteria. Employers may not consider an applicant’s refusal to provide compensation information in making an employment decision.

There are several noteworthy exceptions and limitations to this law. Continue reading “Salary History Ban Spreads—New Jersey and New York Jump on Board!”

California’s New Anti-Arbitration Law Temporarily Enjoined by Federal Court

Caroline Powell Donelan

UPDATE: On December 29, 2019, the U.S. District Court for the Eastern District of California issued an order temporarily enjoining the enforcement of AB 51 (California’s anti-arbitration law discussed here and here) pending resolution of plaintiffs’ motion for a preliminary injunction, highlighting the “likelihood of irreparable injury” to California employers, and noting plaintiffs had “raised serious questions regarding whether the challenged statute is preempted by the Federal Arbitration Act as construed by the United States Supreme Court.”

The court will hear plaintiffs’ motion for a preliminary injunction on January 10, 2020.

Stay tuned.