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
Spring training is just around the corner and major leaguers have already reported to their first workout. Meanwhile, an interesting development–three former minor leaguers have filed a lawsuit against Major League Baseball, Bud Selig, and three MLB teams, claiming that the MLB has failed to pay overtime and minimum wages in violation of the FLSA and various state labor laws. According to the plaintiffs, the MLB “has a long, infamous history of labor exploitation dating to its inception” by hoarding players, depressing salaries, and preventing unionization of the minor leagues. See Complaint, Senne v. MLB, No. 3:14-cv-00608-JCS (N.D. Cal. Feb. 7, 2014), ECF No. 1. The case is presently before Magistrate Judge Joseph C. Spero. Read More
Updating a case we discussed last month, in Sandifer v. United States Steel Corp., No. 12-417 (January 27, 2014), the United States Supreme Court last week clarified the scope of Section 203(o) of the FLSA concerning which donning and doffing activities employers and employees can bargain to exclude from compensable time in collective bargaining agreements. In the process, the high Court also unanimously agreed upon which activities constitute “changing clothes” in regards to Section 203(o). 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.
Back on October 8, 2013, we highlighted three cases currently pending on the United States Supreme Court docket that employers will definitely want to follow. The cases address issues ranging from the proper interpretation of Sarbanes Oxley’s whistleblower provision to the breadth of Presidential NLRB appointment power, to what constitutes “changing clothes” under the FLSA. Although decisions have not yet come down, important developments have taken place in all three cases. Read More
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
For the better part of the last decade, the Second Circuit routinely and consistently struck down class action waivers in arbitration provisions. As recently as March 2011, the Second Circuit appeared to have brought down the hammer even further, by stating in In Re: American Express Merchants’ Litigation (“AmEx”) that a mandatory arbitration provision—even one that includes an express “class action waiver”—is unenforceable to the extent it “effectively precludes any action seeking to vindicate [plaintiff’s] statutory rights.” Read More
On July 17, 2013, the California Supreme Court denied review of the Second Appellate District’s decision in Gonzalez v. Downtown LA Motors, 2013 Cal. App. LEXIS 257 (Cal. App. 2d Dist. Mar. 6, 2013), which addressed minimum-wage requirements for piece-rate workers. The Court of Appeal held that the employer had to pay a separate hourly rate of at least minimum wage during work time when piece-rate employees are engaged in compensable activity that does not directly produce piece-rates. Read More
Last week, in Irizarry v. Catsimatidis, Docket No. 11-4035-cv (July 9, 2013), the Second Circuit held that Gristedes Foods CEO—and current NYC mayoral candidate—John Catsimatidis faces personal liability for settlement payments of FLSA claims against his company. The Court determined that Catsimatidis’ active participation in the operation of the company qualified him as an “employer” under the FLSA and could therefore lead to personal liability. Read More
Under the Affordable Care Act, employers subject to the Fair Labor Standards Act must provide a “Notice of Coverage Options” to each employee. The purpose of this Notice is to inform employees that they may obtain health insurance through their states’ Health Insurance Marketplace. For current employees, the Notice must be distributed before October 1, 2013. For new employees, the Notice must be given within 14 days after work begins. Read More