On Friday, June 16, 2017, the United States Department of Justice (DOJ) filed an amicus brief reflecting a change of heart when it comes to the enforceability of class waivers in arbitration agreements. In an unprecedented move, President Trump’s acting solicitor general, Jeffrey B. Wall, said his office had “reconsidered the issue and has reached the opposite conclusion” as the Obama administration in a set of consolidated cases currently before the U.S. Supreme Court, NLRB v. Murphy Oil USA Inc. (Docket Nos. 16-285, 16-300, and 16-307).
On April 21, 2017, the Second Circuit Court of Appeals upheld a National Labor Relations Board (NLRB or Board) ruling that an employer violated the National Labor Relations Act (NLRA or Act) when it discharged a catering employee for posting a vulgar comment on social media directed at his supervisor. In NLRB v. Pier Sixty, LLC (2d Cir. 2017), the court determined that the employee’s post, under the particular circumstances of the case, was not so “opprobrious” as to lose protection under the NLRA. READ MORE
Companies operating in the “on-demand” or “gig economy” have enjoyed tremendous success in recent years, as emerging technologies and shifts in consumer tastes have buoyed their growth. These companies span a cross-section of industries (transportation, food delivery, lodging) but have one thing in common: each aims to deliver traditional services more efficiently by connecting consumers directly with service providers.
But as we all know by now, success often begets legal challenges. Take Uber, for example. The company has faced a thicket of litigation in recent years, most notably related to the question of whether its drivers are employees or independent contractors.
Like many companies in today’s economy, Uber has implemented an arbitration policy as a way to efficiently resolve disputes. Below we recap some of the developments in this area and preview some legal issues that companies will want to monitor in the months ahead. READ MORE
In August of 2016, we reported that the Ninth Circuit created a deeper circuit-split on whether class action waivers in arbitration agreements violate the National Labor Relations Act (“NLRA”) with its decision in Morris v. Ernst & Young LLP.
As expected, the Supreme Court granted review today of three of the conflicting Court of Appeals decisions. It granted review of the Fifth Circuit’s decision in Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015). The Fifth Circuit rejected the National Labor Relations Board’s (“NLRB”) position that class action waivers unlawfully interfere with employees’ NLRA rights to engage in concerted activity, agreeing with the Second and Eighth Circuits. The Ninth and Seventh Circuits, on the other hand, adopted the NLRB’s position that class action waivers violate the NLRA.
The Supreme Court also granted review in Morris v. Ernst & Young, 834 F.3d 975 (9th Cir. 2016) and Epic Systems Corp. v. Lewis, 823 F.3d 1147 (7th Cir. 2016). The Seventh Circuit held that an arbitration agreement precluding collective arbitration or collective action violates section 7 of the NLRA and is unenforceable under the FAA. The Ninth Circuit agreed and concluded that compulsory class action waivers violate sections 7 and 8 of the NLRA by limiting workers’ rights to act collectively, noting in footnote 4 that agreements containing an “opt-out” clause for pursuing class claims do not violate the NLRA.
All three cases have been consolidated and will be argued together.
After the Obama administration’s employee friendly policies, employers will have a wish list of changes they believe a Trump administration would favor. Here are ten items that should be at the top and why employers want to see action. READ MORE
Can employers still require employees to sign arbitration agreements with class action waivers as a condition of employment? Last week, the Ninth Circuit became the second appellate court to adopt the National Labor Relations Board’s (“NLRB”) position that class action waivers violate the National Labor Relations Act (“NLRA”) in Morris v. Ernst & Young LLP.
On May 26, the U.S. Court of Appeals for the Seventh Circuit held that a wage-and-hour class arbitration clause violated the National Labor Relations Act (NLRA), setting up a circuit split with the Fifth Circuit, and opening the door for the U.S. Supreme Court to weigh in on arbitration clauses in employment agreements containing class action waivers.
Solicitor of Labor Patricia Smith likes to quip that the Department is “working overtime on overtime.” DOL took a break from the much-anticipated overtime regulations and issued new guidance yesterday on the question of who qualifies as a “joint employer” under the Fair Labor Standards Act (FLSA) and the Migrant and Seasonal Agricultural Worker Protection Act (MSPA). The guidance (Administrator’s Interpretation (AI) No. 2016-1) issued by Wage and Hour Division (WHD) Administrator Dr. David Weil, sets forth a broad (and sometimes ambiguous) reading of statutory provisions, regulations, and case law to address joint employment issues under the two statutes. The guidance was not unexpected as some advocates have been asking for the DOL’s position on joint employment since the NLRB’s expansion of joint employment in Browning-Ferris, 362 NLRB No. 186 (Aug. 27, 2015). Notably, the level of coordination between DOL and the NLRB on joint employment issues has been the subject of Congressional oversight and the oversight committee now claims that DOL provided suspect responses to members of Congress regarding interactions between the agencies on the issue.
In its June 26 split decision in American Baptist Homes of the West d/b/a Piedmont Gardens and Service Employees International Union, United Healthcare Workers- West, 362 N.L.R.B. No. 139 (Case No. 32-CA-063475) (“Piedmont Gardens”), the National Labor Relations Board (“NLRB” or “Board”) adopted a new standard for union access to employers’ witness statements in discipline cases. In so doing, the NLRB overruled the 37-year-old standard articulated in Anheuser- Busch, 237 NLRB 982 (1978), that provided a blanket exemption for the disclosure of witness statements. Instead of a blanket rule, the majority followed the Supreme Court’s 1979 decision in Detroit Edison v. NLRB, 440 U.S. 301 (1979), which requires a case-by-case balancing of the union’s need for the witness statements against the employer’s “legitimate and substantial confidentiality interests.”
The National Labor Relations Board’s (“NLRB”) General Counsel’s Office has again signaled its commitment to expanding the scope of the current test for joint employment. In a move that could have implications for a broad array of franchise relationships, on December 19, 2014, the General Counsel of the NLRB announced that it has issued complaints against both McDonald’s franchisees and McDonald’s USA, the franchisor, as a joint employer. The decision to name McDonald’s as a respondent is consistent with the General Counsel’s recent advocacy that the current joint employment standard is too narrow.