On Tuesday, September 20, 2016, twenty-one states filed a complaint in federal court in Texas challenging the new overtime rule finalized by the Department of Labor (“DOL”) in May of this year. The States seek to prevent implementation of the new rule, which is scheduled to become effective on December 1, 2016. That same day, fifty-five business groups, including several chambers of commerce, filed a similar lawsuit in Texas federal court to block the rule.
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.
The federal government released the final regulations implementing the Fair Pay and Safe Workplaces Executive Order (“EO” hereafter) this week. The regulatory package contains two parts: amendments to the Federal Acquisition Regulations and guidance from the Department of Labor for implementing the regulations. The regulatory package is a central part of the Administration’s aggressive regulatory agenda we have previously discussed and reflects continuing burdens on federal contractors.
OSHA’s San Francisco region, which includes California, Nevada, and Arizona, launched a new pilot program on August 1, 2016 that would allow complainants, under certain circumstances, to ask OSHA to cease its investigation and issue findings for an ALJ to consider. The program is an effort to process cases more quickly in the region. To qualify for expedited treatment, the investigator must first interview the complainant, allow the respondent the opportunity to submit its position statement and meet with OSHA and present statements from witnesses if so desired, and allow the complainant an opportunity to respond to the respondent’s submission.
Today, mobile technology allows many exempt employees to work remotely and perform work outside traditional working hours. Some commentators assert that the smartphone has stretched the traditional 9-to-5 workday into a 24/7 on-call period, where employees are expected to respond to work-related communications long after they leave the office and late into the night. The expectation that employees will be available to respond on evenings and weekends, however, has sparked pushback, causing some employees to call for more work-life separation and the ability to “unplug.” In France, this push to unplug recently resulted in a new law that gives employees a “right to disconnect.” Under that law, many French employers soon will be required to implement rules governing work-life balance and reasonable use of digital tools.
Paid sick leave is on the rise, as we reported here, here, here, and here. As we approach the one-year compliance anniversary for state-mandated paid sick leave, employers now face additional compliance wrinkles in the Los Angeles and San Diego markets. Earlier this month, both Los Angeles and San Diego passed paid sick leave and minimum wage ordinances that take effect (and require compliance) as soon July 2016.
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.
The prognostication efforts are going into high gear as employers seek to forecast and prepare where the Department of Labor may land on its final overtime rules. As with all rules in the post-comment phase, government officials have not given any indication on when the final rules will be published (and become effective) or what they will contain. Our insight is the final rule will be published ahead of schedule before the July regulatory agenda date, perhaps as soon as later this month. The Congressional Review Act deadlines (described here) strongly indicate that the DOL will seek to avoid the prospect of any effective congressional action on the final rules. As to the final rule’s content, we believe that the Office of Management and Budget and DOL are taking into account the political winds and other considerations before making a final decision. Once published, however, the DOL can set the effective dates as early as 60 days which would give employers a very difficult compliance burden.
While the Supreme Court in Tyson Foods, Inc. v. Bouaphakeo dashed employers’ hopes that the Court would broadly preclude statistical evidence and severely limit wage and hour class actions in a fashion similar to its restriction of discrimination class actions in Wal-mart v. Dukes, the Court was also clear that this type of evidence will not be appropriate or probative in all wage and hour claims. In ruling for the class action claimants, the Court affirmed a $2.9 million jury award for overtime claims related to donning and doffing at an Iowa pork processing plant. In so ruling, the Supreme Court refused to adopt the position advanced by Tyson Foods and several of its amici that class actions cannot be resolved by reliance upon representative evidence or statistical samples. It also refused to embrace Tyson Food’s reading of Wal-mart v. Dukes as standing for the proposition that representative sample is an impermissible means of establishing class-wide liability. But the Court also made clear whether statistical evidence could be used for liability depends on the claims asserted and the particular evidence. While the decision is not unsurprising after oral arguments, it seems likely that employers will see an uptick in plaintiffs aggressively relying on “representative” statistical evidence in wage and hour collective and class cases. There are, however, several “lessons learned” based upon the majority’s decision.
The U.S. Department of Labor (DOL) sent its much anticipated final overtime regulations to the Office of Management and Budget (OMB) for review on March 14, 2016. Technically, this move came slightly ahead of schedule. OMB now has 90 days to review, which would put its “due date” in mid-June – ahead of the July regulatory agenda publication date we previously reported. However, as these overtime regulations are a top-line priority subject to intense political scrutiny, there is reason to believe OMB may not complete its review within the 90-day window.