On October 17, 2013, the California Supreme Court revisited the enforceability of arbitration agreements in California. The Court released its decision Sonic-Calabasas Inc. v. Moreno (Sonic II). In that 5 – 2 ruling, the California Supreme Court reversed its prior decision to strike down an arbitration agreement on the ground of FAA preemption, but remanded the case for analysis of the enforceability of the arbitration agreement under an unconscionability analysis. Read More
Sara E. Dionne
Sara Dionne, a senior associate in Orrick's Sacramento office, is a member of the employment law and litigation group. Her practice focuses on employment litigation and counseling. Ms. Dionne has experience with a variety of matters, including litigating wage-and-hour class actions, counseling and conducting audits concerning wage-and-hour issues and working on trade secret, employee leave, wrongful termination, harassment and discrimination matters. She has presented on a number of employment law topics, such as employee leave, wage-and-hour law and arbitration.
After suffering defeat in the United States Supreme Court, Plaintiffs in Dukes et al. v. Wal-Mart Stores, Inc. returned to court in California in an attempt to certify a newly defined and smaller class of 150,000 current and former female employees. On August 2, 2013, Judge Charles R. Breyer of the United States District Court for the Northern District of California denied Plaintiffs’ Motion for Class Certification, which leaves each member of the proposed class to pursue her claims individually against Wal-Mart. Dukes v. Wal-Mart Stores, Inc., No. 3:10-CV-03005-CRB, Slip Op. at 2 (N.D. Cal. Aug. 2, 2013). 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.
The U.S. Supreme Court’s decision in Standard Fire Insurance Co. v. Knowles confirms that a plaintiff cannot avoid federal jurisdiction under the Class Action Fairness Act (“CAFA”) by stipulating that the class will seek less than CAFA’s $5 million amount in controversy threshold. Read More
Reversing a denial of a motion to compel arbitration in Parisi et al. v. Goldman, Sachs & Co. et al., the Second Circuit held that a plaintiff does not have a substantive right to bring a pattern and practice claim under Title VII. The plaintiff at issue in Parisi alleged gender discrimination under Title VII, seeking to bring her claims on behalf of herself and a putative class of female Goldman Sachs employees. During her employment, the plaintiff signed a broad arbitration agreement, which covered her discrimination claims and did not contain a provision providing for class-wide arbitration. Read More
A recent opinion by the Seventh Circuit holds that the standard for certifying a collective action under the FLSA is the same as the standard applied to a class action under Rule 23. In Espenscheid v. DirectSat USA, LLC, No. 12-1943 (7th Cir. Feb. 4, 2013), the court considered decertification by a Western District of Wisconsin District Court of more than 2,000 satellite technicians in an action alleging technicians did not receive overtime and were not compensated for certain hours. In analyzing the standard to apply in evaluating the decertification decision, the court contrasted the opt-in procedure of FLSA collective actions with the opt-out procedure of Rule 23 actions, as well as noted that the FLSA lacks “the kind of detailed procedural provisions found in Rule 23” that set forth the standard for certification. Read More
Many employers systematically round employee time punches to the nearest tenth of an hour. For example, if an employee clocks in at 9:58 a.m., the time is rounded up to 10:00 a.m.; and likewise if she clocks in at 10:02 a.m., her time is rounded down to 10:00 a.m. Under federal law, rounding policies are lawful if they are neutrally applied and do not systematically under compensate employees. While this standard was approved by the California Division of Labor Standards and Enforcement, until recently, no California court or statute specifically addressed the issue.
However, on October 29, 2012, the California Court of Appeal for the Fourth Appellate District in See’s Candy Shops, Inc. v. Superior Court confirmed that the neutral rounding standard adopted by federal law and the Department of Labor Standards and Enforcement is appropriate under California law. Thus, under See’s Candy, California employers may maintain lawful rounding policies if the rounding does not consistently result in a failure to pay employees for time worked. An example of a potentially unlawful rounding policy is one in which the employer always rounds time down.
Also of note, in approving the federal rounding standard, the See’s Candy opinion rejected the plaintiff’s reliance on California Labor Code section 204. Specifically, the court emphasized that Section 204 is solely a timing requirement as to when wages must be paid, and does not create any substantive right to wages.
You can read the decision here.
The United States Supreme Court recently granted certiorari to review whether class action plaintiffs can avoid federal court jurisdiction under the Class Action Fairness Act (“CAFA”) by stipulating that their damages do not exceed the federal jurisdictional prerequisite. This issue is particularly significant to employers because they frequently rely on the CAFA to remove cases to federal court when hit with wage-and-hour and other employment class action lawsuits. The CAFA generally permits class action defendants to remove cases with minimal diversity to federal court where the amount in controversy exceeds $5 million. Read More
In its first ruling on an employer’s social media policy, the National Labor Relations Board found that Costco Wholesale Corporation’s social media policy in its employee handbook violated the National Labor Relations Act. Among the policy provisions reviewed, the Board analyzed Costco’s policy prohibiting employees from posting electronically statements that damage the company or any person’s reputation.
In its September 7, 2012 opinion, the Board stated that the “appropriate inquiry” is whether the policy would “reasonably tend to chill employees in their exercise of their Section 7 rights[,]” which provides employees with the right to engage in concerted activity. While the Board acknowledged that Costco’s policy did not explicitly reference Section 7 activity, the Board did find that the policy’s broad prohibition on statements “clearly encompasses concerted communications protesting [Costco’s] treatment of its employees.” The Board specifically noted that there was nothing in Costco’s policy that even suggested the exclusion of protected communications. Accordingly, the Board concluded that Costco’s policy had a reasonable tendency to inhibit employees’ protected activity and thus violated the National Labor Relations Act.
The U.S. Supreme Court granted cert on June 25, 2012 in Genesis Healthcare Corp. v. Symczyk to resolve a federal circuit split on whether an FLSA collective action is mooted when the lone plaintiff receives from defendants an offer of judgment under Federal Rule of Civil Procedure 68 that satisfies the plaintiff’s claims. Under Rule 68, a defendant may offer judgment against it on specified terms. If the offer is accepted, judgment is entered on the terms offered. If the offer is not accepted, plaintiff is liable for post-offer costs if the plaintiff fails to ultimately obtain a judgment more favorable than the offer. Read More