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.
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? Continue Reading Who’s Invited to the Party?: The Status of Collective Action Opt-Ins
The California Supreme Court has adopted a new three-part test to determine whether a worker is an independent contractor or an employee under California’s wage orders, which regulate wages, hours, and working conditions. The highly anticipated ruling could have wide ranging effects for businesses operating in California and beyond, as companies try to navigate the new gig economy.
Recently the National Labor Relations Board invited interested parties and amici to submit briefs in Velox Express, Inc. (15-CA-184006) to address under what circumstances, if any, the Board should deem an employer’s misclassifying statutory employees as independent contractors constitutes a violation of Section 8(a)(1) of the National Labor Relations Act (“the Act”). Briefs from parties and interested amici must be submitted on or before April 16, 2018.
In a press release issued this morning, the Department of Labor has announced that it is withdrawing two administrative interpretations issued by the Department of Labor under the Obama administration in 2015 and 2016 relating to misclassification of independent contractors and joint employment. These two administrative interpretations sought to expand the definition of employee, thereby increasing the possibility of misclassification cases, and, as some argued, expanding the concept of joint employer under the Fair Labor Standards Act. While this is a welcomed announcement for employers, the Department emphasized in the release that the withdrawal “does not change the legal responsibilities of employers under the Fair Labor Standards Act.” This is the first effort by the Department of Labor under the Trump administration to dismantle some of the more controversial policies issued by the Department in the Obama-era. The decision to withdraw these administrative interpretations may also signal that the Department intends to return to the opinion letter writing process, making compliance much simpler for employers.
The issue of whether workers are properly classified as independent contractors rather than employees is a common dispute in the gig economy, particularly in newer, technology-based industries, such as ride-sharing.
That issue just became a much simpler one in Florida: On May 9, 2017, Florida’s governor signed into law a bill that, among other things, establishes that drivers for companies such as Lyft and Uber—called “transportation network companies” or “TNCs” under the law—are independent contractors, not employees, as long as the company satisfies four conditions:
Across the country, worker misclassification issues continue to be a significant risk for employers. One hot button issue is whether workers in newer, technology-based industries, such as ride-sharing, are properly classified as independent contractors rather than employees. Last week, an appellate court in Florida considered whether Uber drivers are properly classified as independent contractors or employees for purposes of benefits under Florida’s unemployment insurance statute.
On January 20, 2016, the administrator of the Department of Labor’s Wage and Hour Division (WHD), David Weil, issued an “Administrator’s Interpretation” (AI) regarding the agency’s interpretation of joint employment under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The new AI purports to clarify the WHD’s position that joint employment under these statutes “should be defined expansively.” When considered alongside the National Labor Relations Board’s (NLRB or the Board) controversial decision in Browning-Ferris Industries of California, Inc., 362 NLRB No. 186 (2015), in which the Board dramatically expanded the definition of “joint employer” under the National Labor Relations Act (NLRA), the AI may be another step in a coordinated federal agency push to expand joint-employer liability under a variety of labor and employment statutes.
On July 15, 2015, the Department of Labor (“DOL”) issued guidance which it claims is designed to reduce the misclassification of employees as independent contractors under the Fair Labor Standards Act (“FLSA”). This guidance boldly claims that “most workers are employees under the FLSA’s broad definitions.” Based on this guidance, the DOL will likely aggressively argue that workers are employees subject to the FLSA – not independent contractors.
A recent decision from the California Labor Commissioner’s Office found that a former Uber driver was an employee of the company, not an independent contractor as the firm has labeled its motorists. The implications for Uber, as well as other companies with similar business models, could be far-reaching.