In an Epic Decision for Employers, the Supreme Court Holds that Class Action Waivers in Employment Arbitration Agreements are Enforceable

Home / EmploymentThe Supreme Court of the United States recently ruled in favor of employers in upholding class action waivers contained in arbitration agreements. In Epic Systems v. Lewis, the Supreme Court held that employers can require employees to arbitrate disputes with the employer individually and waive their right to pursue or participate in class or collective actions against their employer. At issue in Epic Systems was whether the Federal Arbitration Act’s (“FAA”) mandate to enforce arbitration agreements according to their terms was displaced by Section 7 of the National Labor Relations Act (“NLRA”), which grants employees “the right … to engage in other concerted activities for … mutual aid or protection.” In other words, whether the NLRA’s protection of “other concerted activities” created a substantive right to pursue group legal action that invalidated the agreement. The FAA was originally enacted in 1925 with the general intent to “reverse the longstanding judicial hostility to arbitration agreements” and to place private arbitration agreements “upon the same footing as other contracts.” (Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, 24.) The FAA manifests “a liberal federal policy favoring arbitration agreements.” (Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24.) It further requires that “questions of arbitrability must be addressed with a…

NYC: Unplugged? A Proposed New York City Counsel Bill Could Have Drastic Effects On Electronic Communications Outside Work Hours

Home / EmploymentOn March 22, 2018, a groundbreaking bill was proposed in New York that prohibits employers from requiring employees to access work-related electronic communications outside of work hours. A similar law exists in France, but no other American city has enacted such a law. The bill would make it illegal for employers with more than ten (10) employees to require their employees to access work-related electronic communication outside of normal work hours. Such electronic communications would include emails, text messages, and instant messenger services. In addition, the bill would require employers to adopt written policies regarding the use of electronic devices for sending or receiving work-related communications. The policies would be required to include the usual work hours for each class of employee and the categories of paid time off to which they are entitled. Furthermore, the bill would require employers provide employees with a notice of their “right to disconnect” from work-related electronic communications outside work hours. Certain employees would be exempt including those whose employment requires them to be on call 24 hours a day when working, those in work study programs, those compensated through scholarships. Independent contractors would also be exempted from these protections. Government and municipal employees are not included in the protections under the bill. To ensure compliance with…

A Whistle Upon Deaf Ears: Changes to Dodd-Frank Whistleblower Protections

Home / EmploymentA Whistle Upon Deaf Ears: Changes to Dodd-Frank Whistleblower Protections On Wednesday, February 21st, the U.S. Supreme Court unanimously ruled that individuals who report allegations of corporate wrongdoing must do so to the Securities and Exchange Commission, not just to their own companies, in order to qualify for protections offered under the Dodd-Frank Act. The case in question, Digital Realty Trust v. Somers, involved Paul Somers, a former employee of Digital Realty Trust, a San Francisco-based real estate investment company. Somers detected foul-play in the company and reported mismanagement of funds and contracts to senior management. He was subsequently fired in 2014. Somers proceeded to sue, claiming that his termination was retaliation that violated the Dodd-Frank Act. Unfortunately for Somers, and other would-be whistleblowers, the Supreme Court disagreed. This decision is contrary to how the Dodd-Frank Act has been interpreted by many lower courts since its introduction in 2010. The Dodd-Frank Whistleblower Program includes payable awards to those who report information that leads to a successful action, as well as safeguards against employer retaliation. Whereas past interpretations offered these protections for those who reported issues internally, the Supreme Court decision suggests that the Act’s plain language limits its protections to specific instances where the individual has reported the violations in question directly to…

Cash or Course Credit? Department of Labor Updates Guidelines for Unpaid Internships

Home / EmploymentCash or Course Credit? Department of Labor Updates Guidelines for Unpaid Internships The designation between “employee” and “intern” can be a tricky one for employers. Depending on which you’re hiring, you may need to dole out wages and overtime pay. But new changes rolled out by the Department of Labor (DOL) this January could help clarify the dividing line and give employers more flexibility in crafting new positions. Since 2010, the DOL has touted a six-factor test to determine if workers could be considered employees under the Fair Labor Standards Act (FLSA). However, this month the DOL updated their policies to reflect a more commonly accepted methodology: a “primary beneficiary” test, which, as one might guess, focuses on whether the intern or the employer is the “primary beneficiary” of that relationship. The former six-factor test was a strict one which required that all factors be met for a position to qualify as an internship; if not, these interns would be considered employees, and therefore entitled to minimum wage and overtime pay. This was widely considered to be a hard standard to meet, and it became a problem for many employers as a result. Several courts adopted the primary beneficiary test as an alternative method, with the Second Circuit leading the way in Glatt…

NLRB Reverses Course on Browning-Ferris Standard for Defining “Joint Employers”

Home / EmploymentLast Thursday, the NLRB overruled the Obama-era NLRB’s decision in Browning-Ferris Industries, a 2015 ruling that loosened the standard for determining how much control over employees is required before a business entity can be held liable for infractions of federal labor law as a joint employer. Prior to Browning-Ferris, for two or more entities to constitute joint employers of a workforce, they had to share the ability to control only the essential terms and conditions of employment like hiring, firing, and directing employees. Further, this control must have been direct and immediate, and must have actually been exercised before an entity would be found a joint employer. Browning-Ferris changed that to a standard where “two or more entities are joint employers of a single work force if they are both employers within the meaning of the common law, and if they share or codetermine those matters governing the essential terms and conditions of employment.” How much of a departure this was from the previous standard only became clear as Browning-Ferris was applied and interpreted in successive Board decisions. Under these decisions, the Browning-Ferris standard would consider as a joint employer any entity with even indirect or unexercised-but-reserved authority to control or affect “essential terms and conditions of employment” reaching beyond the basics of…

Google Defeats Equal Pay Act Class Action – For Now

Home / EmploymentLast week, in Ellis v. Google, Inc. a California judge dismissed a class action lawsuit against Google brought on behalf of its female employees, alleging that Google violated the California Equal Pay Act (Labor Code §§ 1197.5, 1194.5) by systematically paying them lower wages than those paid to male employees performing “substantially similar work under similar working conditions.” The complaint also alleged that Google discriminates against its female employees by paying women less than men with similar skills, experience, and duties, by assigning and keeping women in “job ladders and levels with lower compensation ceilings and advancement opportunities,” and promoting women at a slower rate than it does men. While claims of gender bias in tech are not new, this is the first such case brought against Google. The lawsuit was dismissed on the grounds that the allegations of the complaint were not specific enough to justify a class-action. In other words, by purporting to bring the action on behalf of “all women employed by Google in California” the complaint was simply too broad. Class actions require that the individual named plaintiffs bring claims that are representative of the group as a whole. The defendant’s liability must be able to be determined by issues common to all class members. Here, because plaintiffs defined…

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Is Your Office Holiday Party On The Chopping Block?

Home / EmploymentMajor news outlets like Time Magazine and the Chicago Tribune have recently reported that one of the fall outs of the recent sexual harassment scandals is that many companies have decided to forego their annual holiday parties.  At the very least, some companies are cutting out the free flow of alcohol at their annual festivities since alcohol is thought to be a risk factor for inappropriate behavior. Before you cancel your group’s restaurant reservation or caterer and officially kill the holiday spirit for your employees, consider the employer’s legal obligations for employee misconduct at office functions and some suggestions for how to ensure your employees can safely and appropriately celebrate the holidays with their colleagues. California’s Fair Employment and Housing Act imposes two standards of liability for sexual harassment, depending on whether the alleged harasser is a co-worker or a supervisor.  An employer is liable for harassment by a non-supervisory employee if the employer knew or should have known of the harassing conduct and failed to take immediate and appropriate corrective action.  (California Government Code section 12940, subdivision (j)(1).)  If a supervisor engages in sexual harassment, however, an employer is strictly liable for his or her conduct, which means liability does not rest on whether the employer was negligent. The employer can only…

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A Fresh Cut on Commission-Based Pay in Cosmetology

Home / EmploymentA recent change to the California Labor Code modifies the definition of commission pay for employees that are licensed pursuant to the Barbering and Cosmetology Act. Senate Bill 490, introduced in February 2017, adds section 204.11 to the California Labor Code, authorizing beauty salon employees to be paid commission if certain requirements are met. The requirements kick in when the employee, who must be licensed pursuant to the Barbering and Cosmetology Act is being paid for providing services where such license is required. These cosmetologists can agree to be compensated by percentage or flat rate sum commission in addition to a base hourly rate if the following requirements are met: The employee’s base hourly rate is at least two times the state minimum wage rate in addition to commissions paid; and The employee’s wages are paid at least twice during each calendar month on a day designated in advance by the employer as the regular pay day. With this new compensation option, employers will pay the break times based upon two times the minimum wage amount, which will lessen the administrative burden when compared to piece rate compensation. For example, under the new law, a salon employer could enter into a pay agreement such as the following: Salon owner Sweeney Todd agrees to…

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The EEOC’s Performance Report is a Cautionary Tale for Employers

Home / EmploymentThe Equal Employment Opportunity Commission (EEOC) just released its performance report for the 2017 fiscal year. The big take away is that while the EEOC has whittled down its inventory of unresolved charges to the lowest level in 10 years, there were still over 84,000 new charges filed from nearly 700,000 calls and complaints. Additionally, with a lower inventory of unresolved charges, it appears the EEOC has been able to invest more resources in turning charges into lawsuits. The EEOC filed 184 lawsuits, more than double the number of suits filed in the previous fiscal year. All told the EEOC recovered nearly half a billion dollars from workplace discrimination claims. As the saying goes an ounce of prevention is worth a pound of cure, so feel free to contact our friendly employment law attorneys for best practices on how to protect your business.

From Breast Milk to Salary History: San Francisco Reminds Us that Employment Law in California Varies County to County

Home / EmploymentSan Francisco is known for mission burritos, the golden gate bridge, and some of the most progressive employment laws in the nation. That last point was proven twice over in recent months as Mayor Ed Lee signed two ordinances. The first sets forth requirements for employer-provided lactation locations at the work site. The second goes above and beyond the California Equal Pay Act in prohibiting employers from asking about and using employees’ salary history. Lactation in the Workplace Ordinance Employers in the City and County of San Francisco already had an obligation under California law to ensure that every employee seeking to pump breast milk at the workplace has a reasonable time and place to pump. Effective January 1, 2018, San Francisco will take that requirement a step further and will require employers to ensure the pumping location is: (1) safe, clean, and free of toxic or hazardous materials, (2) has a surface for placing a breast pump and personal items onto, (3) has seating, and (4) access to electricity. Further, employees must have access to a refrigerator and sink in “close proximity to the employee’s work area.” The ordinance does have an express exemption when the employer shows that the requirements would “impose an undue hardship by causing the employer significant expense…