On July 15, 2015, the U.S. Department of Labor (“DOL”) issued an Administrator’s Interpretation that purports to clarify on one of the most challenging legal questions facing employers today: are certain workers employees or independent contractors? Notably absent from the guidance, however, is any specific reference to workers who provide services through “on-demand” companies like Uber, Lyft, and Airbnb who use technology to deliver traditional services more efficiently by connecting consumers directly with service providers. This is surprising since it seems that the DOL’s renewed focus on misclassification has stemmed in large part from the slew of pending on-demand worker lawsuits in which the classification tests have proven very difficult to apply.
Jessica R. Perry
Jessica R. Perry, an employment partner and Deputy Leader of the firm's Litigation Business Unit, represents clients in their most significant class, collective, representative and multi-plaintiff actions under state and federal laws. She focuses her practice on wage-and-hour and discrimination, harassment and retaliation claims for industry leaders within the technology, retail and financial services sectors.
Jessica’s discrimination, harassment and retaliation practice focuses largely on representing employers facing claims of discrimination and harassment on the basis of gender, race, disability and age, and other protected categories. Most recently, Jessica obtained a complete defense verdict in Pao v. Kleiner Perkins, the high-stakes gender discrimination and retaliation case that garnered intense national media scrutiny. Following six weeks of trial and three days of deliberations, a state court jury in San Francisco rejected all of plaintiff’s claims that she was passed over for promotion because of her gender and complaints about discrimination.
Jessica also leads a number of significant wage-and-hour class action matters, focusing on overtime, minimum wage, vacation and personal days, meal and rest break penalties, reporting time wages, expense reimbursements, waiting-time penalties, Private Attorney General Act penalties and work uniform violations. In addition, she also has experience advising companies in the emerging sharing and gig economy on strategic business decisions including the classification of those providing services.
Jessica has also successfully represented clients involved in investigations and audits by the Department of Labor and the California Division of Labor Standards Enforcement, and assists in the development of compensation policies and measures designed to reduce potential exposure.
Discrimination, harassment and retaliation claims
- AMD (Advanced Micro Devices). Won a complete defense verdict at trial in Maghribi v. AMD, a high-profile case alleging that AMD’s president and chairman engaged in discrimination on the basis of race and religion in the wake of the September 11th attacks. Maghribi, the former president of AMD’s flash division alleged that after AMD discovered he was Muslim and of Lebanese descent, it discriminated against him and wrongfully forced him to resign. The jury rejected all of the claims and found in favor of AMD in 84 minutes.
- Microsoft. Obtained summary judgment on claims of gender discrimination and harassment, disability discrimination and harassment, and retaliation brought by a senior female sales manager. Plaintiff argued that Microsoft’s internal investigation finding her harassment complaint meritorious was sufficient to overcome summary judgment, but the district court disagreed and adopted Microsoft’s position in full.
- Apple. Obtained summary judgment and sanctions under Federal Rule of Civil Procedure 11 on discrimination, harassment, Equal Pay Act and other tort claims.
- Chico’s. Defeated class certification in wage-and-hour class action alleging off-the-clock and meal break violations.
- Morgan Stanley. Won motion to dismiss unlawful deductions claims in multidistrict litigation in New Jersey, substantially limiting the exposure in the case and addressing issues of long-standing concern to the financial services industry; obtained summary judgment and defeated class certification in wage-and-hour class action alleging compelled patronage in violation of California law and various Labor Code claims; won motion to dismiss in wage-and-hour class action alleging compelled patronage in violation of California law; defeated class certification in wage-and-hour class action challenging the exempt status of financial advisors, business expenses reimbursement practices, and sign on payment practices and certain non-solicit provisions.
- Roche Laboratories. Obtained summary judgment and defeated class certification in a wage-and-hour class action challenging the exempt status of pharmaceutical representatives.
- Apple. Defeated class certification in a wage-and-hour class action alleging off-the-clock work by customer support agents; defeated class certification and won motion to deny certification in a wage-and-hour class action alleging rest break violations in retail stores.
- Electronic Arts. Defended California class actions and Florida collective action challenging the exempt status of computer graphic artists and engineers.
- Gap. Defeated class certification in a wage-and-hour class action alleging compelled patronage and wage deductions under New York law.
- Old Navy. Defeated class certification in a wage-and-hour class action challenging the exempt status of managers.
- Banana Republic. Defeated class certification in a wage-and-hour class action challenging the exempt status of managers.
- Pottery Barn Kids. Defeated class certification in a wage-and-hour class action challenging the exempt status of managers, meal and rest break violations, and waiting time penalties.
- Gymboree. Defeated collective certification in FLSA case in Florida challenging the exempt status of managers; obtained summary judgment on the exempt status of a retail manager.
Transgender issues have been grabbing headlines in recent months—perhaps most notably with Bruce Jenner’s televised announcement about his gender transition. Beyond the bright lights of pop culture, a wave of litigation and legislation is causing employers to pay closer attention to transgender discrimination and related issues. As we noted in August of last year, there is an increasing trend toward protecting gender identity and transgender status. This post provides an update and a high-level overview of the landscape in this emerging area and offers some tips for employers to minimize risk.
In a long awaited 9-0 decision, the U.S. Supreme Court held that employers are not required to compensate employees for time spent waiting for and undergoing security screenings (aka bag checks) under the Fair Labor Standards Act. It concluded that security screenings were noncompensable postliminary activities because they were not the “principal activities” the employees were employed to perform, nor were they “integral and indispensable” to those activities. The case is Integrity Staffing Solutions, Inc. v. Busk, 574 U.S. ____ (2014) and a copy of the opinion can be found here.
“Sometimes surrender is the best option.” That is how Judge Raymond J. Dearie of the Eastern District of New York begins his opinion in Anjum v. J.C. Penney Co., Inc., before denying J.C. Penney’s motion to dismiss a putative Fair Labor Standards Act (FLSA) collective action based on the company’s offer to pay the claims of four named plaintiffs with offers of judgment under Federal Rule of Civil Procedure 68—a strategy often referred to as “picking off.” Even though the court rejected J.C. Penney’s picking off attempt in this case, the judge’s opinion in Anjum recognizes the validity of this tactic and provides some practical lessons for defense counsel looking to successfully pick off an FLSA collective in the Second Circuit.
Following up on our recent post regarding pregnancy discrimination developments, the Equal Employment Opportunity Commission issued the Enforcement Guidance: Pregnancy Discrimination and Related Issues on July 14, 2014. This is the first comprehensive update of the EEOC’s guidance on discrimination against pregnant workers in thirty years, since its 1983 Compliance Manual chapter. One major development in the new Enforcement Guidance is that pregnancy discrimination claims are not limited to the current pregnancy under the PDA – they can be based on “past pregnancy, childbirth, or related medical conditions.” Thus, the EEOC will more likely find a causal connection between a past pregnancy and the challenged employment action if there is close timing between the two, however a longer time gap between the pregnancy and the challenged action will not foreclose a finding of pregnancy discrimination.
On April 15, 2014, a California appeals court ruled that after an employee returns to work from leave under the Family and Medical Leave Act (FMLA), an employer can require a medical reevaluation related to the health condition for which the employee was granted FMLA leave, so long as it is job related and consistent with business necessity. Read More
Late last month, in the Southern District of Florida, adult entertainers at several Rick’s Cabaret locations filed a lawsuit alleging that they were improperly categorized (and thus improperly compensated) as independent contractors rather than employees. See Espinoza, et al. v. Rick’s Cabaret Int’l, Inc., Case No. 1:13-cv-24565-UU. In light of recent decisions, Rick’s—like other employers classifying workers as independent contractors—should proceed with caution.
The past several months have seen a spate of rulings adverse to employers in the adult entertainment context. Early last year, a Southern District of New York judge approved an $8 million settlement for a class of dancers at another adult establishment who alleged that they were misclassified as independent contractors. See In re: Penthouse Executive Club Compensation Litigation, Case No. 1:10-cv-01145. In September 2013, in a different S.D.N.Y. case, the court in Hart, et al. v. Rick’s Cabaret Int’l, Inc. found that dancers at the New York club location were employees, not independent contractors, for purposes of the Fair Labor Standards Act (“FLSA”) and the New York Labor Law. And just last week a Northern District of Georgia judge who previously certified a class of adult entertainers who alleged they were wrongly classified as independent contractors granted the entertainers’ summary judgment motion with respect to their status as employees under the FLSA. See Stevenson, et al. v. The Great American Dream, Inc., No. 1:12-CV-3359-TWT.
In finding no independent contractor relationship in Hart, the court cited the existence of club guidelines that governed dancers’ dress/appearance (e.g., body glitter forbidden, 4-inch stiletto heels required), behavior in the club (e.g., gum chewing or using a cell phone on the dance floor prohibited), when dancers could be scheduled to work, various fees dancers were required to pay, and manner of performance (e.g., prohibition on more than one knee touching the ground when performing on stage). Of virtually no significance was the fact that there were signed agreements between dancers and Rick’s Cabaret expressing that the employment relationship was that of an independent contractor.
Irrespective of industry, companies that utilize independent contractors are well advised to periodically reexamine the economic realities of those relationships.
The United States Supreme Court is now in session and three cases stand out on the docket that private employers will want to follow. While not the blockbusters heard during the Court’s last session, these cases will address important issues ranging from the proper interpretation of Sarbanes-Oxley Act’s whistleblower provision to the breadth of the President’s recess-appointment power to what constitutes “changing clothes” under the FLSA. Read More
Resolving a split among the circuits, the U.S. Supreme Court held that a “supervisor” for Title VII harassment liability is limited to those who have the power to take a tangible employment action against the alleged victim (e.g., hire, fire, demote, promote, transfer, or discipline). Merely overseeing and directing the alleged victim’s daily work is insufficient to meet this heightened standard. Read More