Ever since the U.S. Supreme Court issued its decision in AT&T Mobility LLC v. Concepcion, California employers hoped this day would come. In a predictable result, the California Supreme Court today acknowledged that class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA). In so doing, the Court overruled its 2007 decision in Gentry v. Superior Court which effectively had barred class action waivers for wage and hour cases. But the Court’s 6-1 plurality decision also bolstered an alternate method for bringing Labor Code claims in court by declaring that actions brought under the Private Attorneys General Act (Labor Code § 2968 et seq.) are not waivable by private agreement and thus not subject to compelled arbitration. Read More
The U.S. Supreme Court granted cert on March 3, 2014 in Integrity Staffing Solutions, Inc. v. Jesse Busk to resolve a federal circuit split on whether time employees spend in security screenings is compensable under the FLSA. The issue is whether security screenings are quintessential “preliminary” or “postliminary” activities that are non-compensable under the FLSA (as held by the Second and Eleventh Circuits) or whether time spent in security screenings is potentially compensable because it is “integral and indispensable” to an employee’s principal job duties (as held by the Ninth Circuit). Read More
Christmas may have come a little early for plan administrators and companies looking for clarity in ERISA litigation. Last Monday, the U.S. Supreme Court ruled 9-0 in Heimeshoff v. Hartford Life & Accident Insurance Co. that contractual limitations provisions in ERISA plans are enforceable unless the time limitation is unreasonably short or is preempted by statute. Read More
Even in the summer months, the California legislature is busy changing the laws that affect the state’s employers. This summer, California’s governor signed into law two bills that should be of interest to all employers—one amending the definition of sexual harassment under the Fair Employment and Housing Act (“FEHA”) and the other amending a provision of the California Labor relating to the award of attorneys‘ fees and costs in actions for the non-payment of wages. Read More
In a boon to defendants seeking to remove cases to federal court under the Class Action Fairness Act (“CAFA”), the Ninth Circuit has overturned a rule requiring defendants to show to a “legal certainty” that the jurisdictional amount in controversy is satisfied when a complaint alleges a lesser amount of damages.
CAFA authorizes federal jurisdiction over civil class actions when the class has more than 100 members, there is minimal diversity, and the amount in controversy exceeds $5 million. The claims of individual class members are aggregated to determine whether the jurisdictional threshold is met. But until last week, Lowdermilk v. U.S. Bank Nat’l Ass’n, 479 F.3d 994 (9th Cir. 2007), required defendants to establish to a “legal certainty” that the amount in controversy exceeded $5 million in order to remove a case when a putative class action complaint alleged damages below that amount. This rule allowed plaintiffs to avoid federal jurisdiction by artful pleading. Read More
Most employers maintain a written timekeeping policy stating that non-exempt employees should accurately record their time worked. Yet many employers are still facing class action lawsuits alleging off-the-clock claims. Below we detail some key practices companies may consider to strengthen their timekeeping policies and defend against off-the-clock claims.
- Policy: Maintain a timekeeping policy that makes the company’s expectations crystal clear, including that the company (1) does not tolerate off-the-clock work; (2) requires employees to immediately report policy violations to HR; and (3) disciplines (including terminates) employees who work off-the-clock or allow others to do so.
- Training: Train non-exempt employees and their managers on the timekeeping policy and keep records of the training completion.
- Reminders: Issue regular reminders regarding the timekeeping policy and/or post a reminder in the break room that employees are not allowed to work off-the-clock and must report policy violations.
- Check-ins: Have managers, HR and/or auditors periodically check in with employees to confirm they are not working off-the-clock.
- Certification: Require employees to certify or acknowledge that their time records are accurate. If the time records are inaccurate, require employees to immediately notify their manager or HR.
- Take complaints seriously: Thoroughly investigate complaints, discipline/terminate policy violators and pay for reported off-the-clock work.
- Remote access: Don’t give non-exempt employees remote access to company systems or e-mail, or make it clear that they must record any such remote access time.
Last week in Green v. Bank of America Corp., No. 11.56365 (9th Cir. Feb. 13, 2012), the Ninth Circuit held that “suitable seats” lawsuits cannot be dismissed at the pleading stage based on an employee’s failure to allege that he or she requested suitable seating. The Ninth Circuit’s reversal raises significant questions regarding one of the more common employer defenses to the recent wave of “suitable seats” litigation based upon IWC Wage Order 7-2001.
Filed in April 2011, the plaintiffs in Green raised standard “suitable seats” allegations by claiming Bank of America failed to comply with the requirement of Section 14 of IWC Wage Order 7-2001 that employees be provided with “suitable seats when the nature of the work reasonably permits use of seats.” The district court granted Bank of America’s motion to dismiss, holding that the bank only needed to provide tellers access to seats if seats were requested. On appeal, the Ninth Circuit reversed, holding that the district court mistakenly assumed a requirement that employees allege that they requested seats where the text of the Wage Order does not expressly require such a request. The Court’s brief opinion also clarified that its reversal did not present an opinion on whether any seating provided to the employees was “suitable” or whether the nature of the work “reasonably permits use of seats” because these issues would be developed at the district court upon remand.
Though Green is confined to its context and should not be read to preclude employers from raising the defense of a failure to request suitable seating, it nonetheless raises the critical question of whether employers have an affirmative obligation to provide suitable seats in the absence of any employee requests. As more “suitable seats” lawsuits reach the summary judgment and trial stages, and as state appellate courts begin to take up the issue, employers should expect more clarity. In the meantime, employers should stay tuned for further updates regarding this rapidly changing area of employment law.
On October 10, 2012, a California Court of Appeal held that a wage and hour class action could not be certified where the common company-wide policy at issue did not answer the “central liability” question of the case.
The case, Morgan v. Wet Seal, Inc., was brought by former Wet Seal employees against the clothing store alleging that the company violated California law by requiring employees to 1) purchase Wet Seal clothing and merchandise as a condition of employment; and 2) travel between Wet Seal business locations without reimbursing them for mileage. The plaintiffs moved for class certification, pointing to written company policies as evidence of the common issues of fact and law that predominated over individual issues. Wet Seal opposed the plaintiff’s motion for class certification arguing, among other things, that their written policies actually undermined the plaintiff’s claims. The policies at issue specifically state that employees are not required to wear Wet Seal clothing and that employees may be eligible for reimbursement for mileage.
The Court of Appeal affirmed the trial court’s holding that the facially legal policies made it impossible to use a class-wide method of proving liability. For example, the Court explained that the plaintiffs’ dress code claims raised issues of 1) whether Wet Seal requires employees to wear the merchandise as a condition of employment; 2) whether the allegedly required attire constitutes a uniform; and 3) whether any given purchase by an employee constituted a “necessary expenditure.” Here, the Court found that the policy explicitly did not require wear and the policy’s description of the dress code as “consistent with the current fashion style that is reflected in the stores” was too broad and vague to constitute a “uniform” under the definition provided by the DLSE. Therefore, any question of liability would inevitably turn on what each Plaintiff was told, who told it to them, how they interpreted that information, whether the interpretation was reasonable and whether the employee then purchased merchandise pursuant to that conversation.
The Court of Appeal emphasized that the allegation of a companywide policy is not sufficient in and of itself to establish that common issues predominated because “there was no class wide method of proof for resolving this key liability question.” The anecdotal evidence provided in Plaintiffs’ declarations attempting to show a practice of requiring employees to purchase Wet Seal clothing as a uniform only reinforced the Court’s conclusion that liability would have to be decided on an individualized basis.
In its landmark Concepcion and Stolt-Nielsen decisions, the U.S. Supreme Court made clear that courts must enforce private agreements to arbitrate according to their terms, even if doing so results in the enforcement of a class action waiver provision or otherwise compels a plaintiff to arbitrate her claims on an individual basis. Perhaps the biggest issue facing California employers since Concepcion and Stolt-Nielsen has been whether Gentry v. Superior Court – in which the California Supreme Court articulated a four-factor test for invalidating class arbitration waivers – remains viable. Thus far, California and federal courts addressing Gentry in light of Concepcion have done so in one of two diametrically-opposed ways: by upholding Gentry’s rationale and applying it, or by declaring its end. Read More
It is no secret that the vast majority of wage-and-hour class actions are settled. What is less clear is the going settlement rate. Researchers from NERA, an economic consulting group, recently answered this question: approximately $1,100 per plaintiff per class year. Click here to view NERA’s full report. Read More