On January 12, 2020, the Department of Labor announced a final rule to revise and update its regulations to assist in determining joint employer status under the Fair Labor Standards Act (FLSA). Notably, the final rule recognizes two potential scenarios where an employee may have one or more joint employers. READ MORE
Kayla Delgado Grundy
Employment litigator Kayla Delgado Grundy blends creativity and tenacity to fiercely protect her clients.
Companies are often unwittingly out of compliance, particularly those which operate in states such as California, which have rapidly evolving, employee-friendly regulations. To prevent individual discrimination or harassment allegations from spiraling into class actions, Kayla finds innovative solutions to quickly and quietly resolve such matters. She applies that same finesse when handling highly sensitive trade secret matters, which also require quick and decisive action to preserve her client’s reputation.
In addition to resolving problems before they escalate, Kayla also helps clients succeed in litigation when necessary. Undaunted by opposing counsel, government agencies or difficult fact patterns, she successfully defends clients from a variety of employment claims in state and federal court.
Prior to joining Orrick, Kayla participated in Berkeley Law’s Death Penalty Clinic, a clinic designed to enable law students to provide high-level, supervised representation to clients facing capital punishment. Through her work in the clinic, and through similar pro bono work in her legal practice, Kayla received hands on experience in appellate litigation and investigations.
Posts by: Kayla Delgado Grundy
Arbitration agreements are a powerful tool in resolving employment actions. As we noted last year, the U.S. Supreme Court ruled in a landmark case that employers can use class and collective action waivers in mandatory arbitration agreements. The U.S. Supreme Court’s 5-4 decision in Epic Systems Corp. v. Lewis, No. 160285 (U.S. May 21, 2018), was authored by Justice Gorsuch, and settled the longstanding dispute over whether arbitration agreements containing class waivers are enforceable under the Federal Arbitration Act (FAA) despite the provisions of Section 7 of the National Labor Relations Act (the Act).
On August 14, 2019, the National Labor Relations Board (NLRB) issued Cordúa Restaurants, Inc., 368 NLRB No. 43 (2019), in which the NLRB sided with employers on two key arbitration questions following the Epic decision. First, the NLRB found that an employer that is sued in a class or collective action can update its existing mandatory arbitration agreement to include a class or collective action waiver, barring workers from opting in to the pending litigation. What’s more, the NLRB found that employers can warn workers that failure to sign the updated arbitration agreement will result in termination.
Employers can update an existing mandatory arbitration agreement to include a class or collective action waiver, even after workers have opted in to the collective action:
The NLRB first addressed the issue of “whether the Act prohibits employers from promulgating [mandatory arbitration] agreements in response to employees opting in to a collective action.” In Cordúa Restaurants, Inc., Cordúa Restaurants had an existing mandatory arbitration agreement that required employees to waive their “right to file, participate or proceed in class or collective actions (including a Fair Labor Standards Act (‘FLSA’) collective action) in any civil court or arbitration proceeding,” but did not expressly prohibit opting in to collective actions. Seven employees filed a collective action in the United States District Court for the Southern District of Texas alleging violations of the FLSA and the Texas Minimum Wage Act. After thirteen employees opted in to the collective action, Cordúa Restaurants updated their existing mandatory arbitration agreement to expressly require employees to agree not to opt in to collective actions. Although the NLRB, for purposes of the decision, assumed that opting in to a collective action constitutes protected concerted activity under Section 7 of the Act, it still found that promulgating the updated mandatory arbitration agreement in response to the opt-ins did not violate the Act. The Board reasoned that Epic made clear that an agreement requiring that employment-related claims be resolved through individual arbitration, instead of class or collective action, does not restrict Section 7 rights in any way.
Employers can warn workers that failure to sign the updated arbitration agreement will result in termination:
The NLRB next tackled the issue of “whether the Act prohibits employers from threatening to discharge an employee who refuses to sign a mandatory arbitration agreement.” After updating the mandatory arbitration agreement to include the above provision against opting in to collective actions, Cordúa Restaurants needed to distribute and execute these updated agreements. During a pre-shift meeting, an assistant manager distributed the updated agreement to employees and explained that employees would be removed from the schedule if they declined to sign it. After a couple employees objected to signing the updated agreement, the assistant manager stated that he “wouldn’t bite the hand that feeds [him]” and that he would instead “go ahead and sign it.” The NLRB reasoned that because Epic permits employers to condition employment on employees entering into an arbitration agreement that contains a class or collective action waiver, the assistant manager did not unlawfully threaten the employees.
The majority opinion was authored by Chairman John F. Ring, Member Marvin E. Kaplan, and Member William J. Emanuel. Member Lauren McFerran authored a separate dissent, which disagreed with the majority on both issues and found that, “[t]he record here establishes that [Cordúa Restaurants] violated Section 8(a)(1) [of the Act] by imposing the revised arbitration agreement on employees, in response to their protected concerted activity and by threatening employees for protesting the revised agreement.” Member McFerran reasoned that although Epic blessed the use of mandatory arbitration agreements with class or collective action waivers, promulgating a lawful rule or policy in response to protected concerted activity is prohibited under Board law. Lastly, Member McFerran found that the employees exercised their Section 7 rights by protesting the updated agreement and the assistant manager unlawfully threatened them.
In its news release, the NLRB recognized that Cordúa Restaurants, Inc. is its first decision concerning the lawfulness of employer conduct surrounding mandatory arbitration agreements since Epic. It remains to be seen how state or district courts analyze a fact pattern such as this one, but this is a very encouraging development for employers if this is a sign of what’s to come from the NLRB. The decision strengthens employers’ power to effectuate mandatory arbitration agreements—now before and during pending litigation.
As you’ve likely been monitoring, last month the California legislature passed several bills to Governor Brown for signature relating to sexual harassment. The hashtag #TakeTheLead emerged as a symbol reflecting California’s potential to become the state at the forefront of passing additional legislation characterized as increasing protection for women – and workers generally – in the face of the #MeToo movement. Late Sunday night, in the last moments before Governor Brown’s September 30 deadline, he vetoed the most contentious bill – AB 3080 – and signed into law many of the other pending bills. READ MORE
With a new Republican majority in the NLRB, the rules may be changing (again) when it comes to company emails. The NLRB is in the process of re-analyzing when and how employers can restrict employees’ company email use without running afoul of NLRA Section 7, and may begin upholding employer policies with facially neutral restrictions on company email and computer usage again in the near future.
A bit of background: Section 7 of the NLRA protects an employee’s right to engage in “concerted activities,” which occurs “when two or more employees take action for their mutual aid or protection regarding terms and conditions of employment.” The NLRA’s protection of “concerted activities” is a broader concept than “union activities” and covers many different activities, including employee discussions about pay, work conditions, and safety concerns. The NLRB has construed the terms “concerted” and “protected” very broadly and vaguely, to include any activity aimed at affecting employee interests.
When we last checked in on AB 1209, the Gender Pay Gap Transparency Act, the proposed legislation was making its way through the California Senate. After making a few key amendments, the Senate passed the bill on September 7, 2017. The California Assembly approved the amendments on September 11, 2017, and now the fate of AB 1209 lies in the hands Governor Jerry Brown. READ MORE
Last week the Sixth Circuit upheld a grant of summary judgment in the employer’s favor on a former employee’s sex discrimination claim, finding plaintiff failed to meet her burden to establish a prima facie case of discrimination.
Dr. Jean Simpson was a professor at Vanderbilt University School of Medicine. While teaching at the University, Dr. Simpson started her own private consulting practice doing breast-pathology. Upon learning of Dr. Simpson’s consulting practice, the University instructed her the external employment violated the Conflict of Interest Policy, the Vanderbilt Medical Group (“VMG”) By-Laws and the VMG Participation Agreement and asked her to cease the consulting work. She refused. The University later terminated Dr. Simpson because of these violations. READ MORE
For anyone who missed it, on Monday, March 14th the “Opportunity to Work Ordinance” (the “Ordinance”) went into effect in San Jose. The Ordinance, which was approved by voters on November 8, 2016, requires employers to offer additional hours to existing part-time employees before hiring externally, either directly or through a temporary staffing agency. Employers must offer the additional hours to employees who have the skills and experience to perform the work. Whether or not an existing employee has the requisite skill and experience is a determination left to the employer – modified only by the requirement that the employer act in good faith and with reasonable judgment. Further, an employer need not offer an existing employee additional hours if doing so would require the employer to compensate the existing employee at time-and-a-half or any other premium rate under the law or a collective bargaining agreement. READ MORE