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.
After the Eleventh Circuit’s holding in Asalde v. First Class Parking Systems LLC 894 F.3d 1248 (11th Cir. 2018), more small employers may be subject to the requirements of the FLSA. By expanding the “handling clause,” the case chips away at the degree of interstate commerce necessary for the FLSA to apply.
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
On March 26, 2018, the Supreme Court heard oral argument in Resh v. China Agritech, Inc., a case that could have far-reaching implications in the class action context. Resh addresses the interplay of successive class actions and the statute of limitations, specifically, whether a plaintiff can pursue a class action after the statute of limitations has run. Although the issue arose in a securities case, the Court’s ruling will affect class actions and time bars in all areas, including employment.
When a party receives an adverse order on a motion for class certification, whether the court of appeals grants permission to appeal under Rule 23(f) can be a crucial turning point in the case. If the appellate court will not hear this interlocutory appeal, the only way to obtain review of that decision is to take the case through trial, to a final judgment. But, due to the high stakes and large costs involved, few class actions are tried and cases often settle after the class certification order is issued by the trial court.
On January 31, 2017, President Trump nominated Neil Gorsuch to fill the nearly year-long vacancy on the Supreme Court left by Justice Scalia. Judge Gorsuch, currently on the Tenth Circuit Court of Appeal, is likely a welcome choice for employers. His employment decisions generally—though not always—have favorable outcomes for employers. However, he does not appear to be a trailblazer on employment issues, but rather applies established precedent that generally favors employers. His employment decisions do not tend to draw dissent, bolstering the view that his opinions are not significant departures from Tenth Circuit and Supreme Court precedent. (Of course, not all agree. Senator Elizabeth Warren describes him as having “twisted himself into a pretzel to make sure the rules favor giant companies over workers and individual Americans. He has sided with employers who deny wages, improperly fire workers, or retaliate against whistleblowers for misconduct. He has ruled against workers in all manner of discrimination cases.”)
On October 5, 2016, the Eleventh Circuit, sitting en banc, held that an unsuccessful job applicant “cannot sue an employer for disparate impact [under § 4(a)(2) of the ADEA] because [an] applicant has no ‘status as an employee.’” Villarreal v. R.J. Reynolds Tobacco Co., — F.3d —, No. 15-10602, 2016 WL 5800001, at *1 (11th Cir. Oct. 5, 2016).
Originally published by Construction Business Owner
By now, the employer community is well aware of the wide-ranging implications of Browning-Ferris Industries of California, Inc., 362 N.L.R.B. No. 186 (2015) (Browning-Ferris)—a decision that upended decades of National Labor Relations Board (NLRB) precedent and dramatically expanded the definition of “joint employer” under the National Labor Relations Act (NLRA). On August 16, 2016, in Retro Environmental, Inc./Green JobWorks, LLC , 364 N.L.R.B. No. 70, 2016 WL 4376615 (August 16, 2016) ( Retro), the NLRB applied the full weight of Browning-Ferris and concluded that Retro Environmental and Green JobWorks are “joint employers” under the NLRA. The NLRB also made it more difficult for employers to prove that they have ceased their joint-employer relationship. Retro is the latest in a line of NLRB decisions, issued since Browning-Ferris, which emphasize the need for employers to scrutinize their third-party business relationships for joint-employer risk.
In a decision that could trigger similar action in multiple states, the Fifth Circuit recently decided that an employee could bring a wrongful-termination claim in Mississippi after being terminated for having a gun in his truck, which was parked on company property. Following the Mississippi Supreme Court’s decision on referral, the Fifth Circuit held that a Mississippi statute—which prohibits employers from establishing, maintaining, or enforcing policies that prohibit an employees from storing a firearm in a vehicle on company property and from taking action against an employee who violates that policy—creates an exception to the state’s employment-at-will doctrine.
In Bodine v. Cook’s Pest Control Inc., No. 15-13233, 2016 WL 4056031 (11th Cir. July 29, 2016), the Eleventh Circuit held that a forced-arbitration agreement in an employment contract is enforceable, despite the fact that certain provisions of the arbitration agreement violated the Uniform Services Employment and Reemployment Rights Act (“USERRA”).
Rodney Bodine, a member of the U.S. Army Reserve, was part of the sales force at Cook’s Pest Control, Inc. (“Cook’s”) in Alabama. His employment contract with Cook’s contained an arbitration clause, which included provisions that 1) permitted the arbitrator to re-apportion costs and attorneys’ fees, and 2) set the statute of limitations for filing a claim under the agreement at six months. After being terminated, Mr. Bodine brought suit against Cook’s under the USERRA, 38 U.S.C. § 4301, and state law, alleging, inter alia, discrimination based on military service.
USERRA provides statutory protection to members of the military against discrimination by employers because of their military service. 38 U.S.C. § 4301(a)(3). It also contains a non-waiver provision, which provides that the chapter “supersedes any” contractual agreements that “reduces, limits, or eliminates in any manner any right of benefit provided by t[he] chapter.” § 4302(b). USERRA also states that there is no statute of limitations for bringing a claim under the Act, § 4327(b), and that no court costs or fees may be charged to a USERRA plaintiff, § 4323(h)(1). Mr. Bodine alleged that, because the statute of limitations and fee provision of the arbitration agreement conflicted with USERRA, the entire arbitration provision was void under USERRA’s non-waiver provision.
Cook’s moved to compel arbitration. Although it conceded that the two provisions Mr. Bodine complained about did indeed violated USERRA, Cook’s argued that the court could use the employment contract’s severability clause to excise the two invalid provisions while retaining and enforcing the remainder of the arbitration agreement, pursuant to the Federal Arbitration Act’s (“FAA”) “liberal policy favoring arbitration agreements.” The district court agreed and, under Alabama’s severability law, it struck the statute of limitations and fee provisions from the arbitration agreement. The court dismissed the suit without prejudice and ordered Mr. Bodine to submit his claims to arbitration.
Over a dissent by Judge Martin, a panel of the Eleventh Circuit affirmed the district court’s order and concluded that “USERRA’s non-waiver provision should not be read to automatically invalidate an entire agreement with USERRA-offending terms. Instead, the plain language of [USERRA] contemplates modification of an agreement by replacing USERRA-offending terms with those set forth by USERRA.” (Emphasis added.) The Court held that the “USERRA’s non-waiver provision does not conflict with the FAA: both statutes provide a mechanism for striking from an arbitration agreement a term in conflict with USERRA.”
Despite the Court’s holding, employers are wise to consider USERRA’s provisions when drafting employment contracts and arbitration agreements. In addition to the statute of limitations and fee provisions at issue in Bodine, USERRA contains provisions pertaining to jurisdiction, § 4323(b), and venue, § 4323(c). The Act also requires employers to “provide to persons entitled to rights and benefits under this chapter a notice of the rights, benefits, and obligations of such persons and such employers under this chapter.” § 4334(a).