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
Whether a Human Resources Director will be deemed the “employer” and held individually liable for alleged violations under the Family Medical Leave Act (“FMLA”) should be left to the jury, according to the Second Circuit’s recent FMLA decision. In Graziadio v. Culinary Institute of America, et al., 15-888-cv (2d Cir. Mar. 17, 2016), the Second Circuit found that there could be a viable claim for individual liability under the FMLA and it also announced the standard for what could be considered unlawful “interference” with FMLA rights.
Earlier this month, the EEOC filed its first lawsuits against employers alleging sexual orientation discrimination under Title VII, arguing that Title VII’s protections extend to sexual orientation as a form of gender bias. In the lawsuit against Scott Medical Health Center filed in the U.S. District Court for the Western District of Pennsylvania, the EEOC alleges that a gay male employee was subjected to harassment, including anti-gay epithets, because of his sexual orientation. In the suit against Pallet Companies d/b/a/ IFCO Systems filed in the U.S. District Court for the District of Maryland, the EEOC alleges that a supervisor harassed a lesbian employee because of her sexual orientation, including making numerous comments about her sexual orientation and appearance. The EEOC alleges that the employers violated Title VII, which extends protection to workers who are discriminated against on the basis of their sexual orientation. In both cases, the EEOC takes the position that sexual orientation discrimination necessarily entails treating employees less favorably because of their sex, thus triggering Title VII’s protections.
In Cheeks v. Freeport Pancake House, Inc., the Second Circuit held that without the approval of a district court or the U.S. Department of Labor, parties cannot secure a stipulation of dismissal with prejudice of an FLSA claim under Federal Rule of Civil Procedure 41(a)(1)(A)(ii). In practice, this holding will prevent parties to an FLSA litigation – where there is a bona fide dispute as to liability – from reaching a privately negotiated settlement that includes a joint stipulation of dismissal of the case.
On August 4, 2015 the Securities and Exchange Commission issued interpretive guidance elaborating its view that the anti-retaliation provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act apply equally to tipsters who claim retaliation after reporting internally, as well as those who are retaliated against after reporting information to the SEC. The guidance reflects that there is a split among federal courts over whether Dodd-Frank’s whistleblower retaliation provisions apply to internal as well as external reporting, and recognizes that the only circuit court to decide the issue to date, the Fifth Circuit, has taken a contrary position to that of the Commission in Rule 21F, the regulation the SEC adopted to implement the whistleblower legislation, holding that internal reports are not protected by Dodd-Frank. Whether internal reports qualify for Dodd-Frank coverage has important implications because, among other things, Dodd Frank provides enhanced recoveries (including two times back pay) and longer time frames (six years) for bringing a retaliation claim than would be available under the anti-retaliation provisions in the Sarbanes-Oxley Act of 2002.
On July 31, the Solicitor General filed a petition for a writ of certiorari in United States v. Newman, 773 F.3d 438 (2d Cir. 2014), asking the United States Supreme Court to address the standard for insider trading in a tipper-tippee scenario. Specifically, the Solicitor General argues that the Second Circuit’s Newman decision is in conflict with the Supreme Court’s 1983 decision in Dirks v. SEC, 463 U.S. 646 (1983), and the Ninth Circuit’s recent decision in United States v. Salman, No. 14-10204 (9th Cir. July 6, 2015). Because the Supreme Court grants certiorari in nearly three out of four cases filed by the Solicitor General, the likelihood of a cert grant in Newman is particularly high.
The Second Circuit revived an FLSA collective action filed by Michael Lola, an attorney licensed to practice law in California, who for fifteen months performed document review services for Skadden Arps, Slate, Meagher & Flom LLP (“Skadden”) though a staffing agency while living and working in North Carolina. Lola alleged that these services did not constitute the “practice of law,” and that he was therefore eligible for overtime under the Fair Labor Standards Act. Rejecting Lola’s arguments, a Southern District of New York judge dismissed the complaint on a Rule 12(b)(6) motion on the grounds that Lola was exempt from overtime. However, the Second Circuit held that when accepting all of Lola’s allegations as true for purposes of a motion to dismiss, his work might not constitute the practice of law.
Last week, in Liu v. Siemens, AG, the Second Circuit held that the Dodd-Frank Act’s whistleblower retaliation provision (15 U.S.C. 78u-6(h)(1)) does not apply extraterritorially, in the first Second Circuit decision to address the international scope of Dodd-Frank’s whistleblower protections against retaliation. Liu, a citizen and resident of Taiwan, was a compliance officer for Siemens China Ltd., a wholly owned subsidiary of Siemens AG. Siemens AG is a German corporation with shares listed on the New York Stock Exchange. Liu claimed Siemens wrongfully terminated his employment in retaliation for reporting that Siemens China Ltd. employees were making improper payments to Chinese officials in North Korea and China in connection with the sale of medical equipment in those countries, in violation of the Foreign Corrupt Practices Act (“FCPA”).
Last week, the Second Circuit upheld a district court’s dismissal of a plaintiff’s Sarbanes-Oxley (“SOX”) whistleblower claim – but not before rejecting the “definitively and specifically” standard on which the district court’s decision relied. Nielsen v. AECOM Tech. Corp., No. 13-235-cv (2d Cir. Aug. 8, 2014).