Wage and Hour

BREAKING DEVELOPMENT: Supreme Court to Rule on Enforceability of Class Action Waivers in Arbitration Agreements

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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.

 

More Questions for Employers As DOL Appeals Preliminary Injunction of Overtime Rules

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On December 1, 2016, the date that the Department of Labor regulations were set to become effective, the government filed a notice of appeal [link to http://dciconsult.com/wp-content/uploads/2016/12/DOL-appeal.pdf] of the November 22, 2016 the United States District Court for the Eastern District of Texas’s Order granting a nationwide preliminary injunction “from implementing and enforcing” the DOL’s new overtime regulations. Those regulations would have raised the minimum salary level for exempt employees from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). The Court’s ruling was based, in part, on its holding that the DOL exceeded its delegated authority by changing the salary basis test at a level that was contrary to Congress’ intent that executive, administrative and professional employees be exempted from coverage of the FLSA. A full copy of the injunction order can be found here. In the wake of the Court’s ruling and now uncertain future regarding the DOL’s new overtime rules, we thought it would be helpful to provide some interim guidance on frequently asked questions we have received since the Court’s ruling.  READ MORE →

Court of Appeal Gives California Employers a Break – but Not a Full Vacation – from PTO Reporting Requirements

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Your employees may spend their time daydreaming about how to spend the vacation hours they accumulate each pay period – and in California, they are entitled to be paid out upon termination for any accrued, unused vacation time or paid time off.  But that doesn’t mean they are entitled to see a breakdown of the monetary value of accrued vacation or paid time off (PTO) on each wage statement, according to a recent ruling from a California state appellate court.  That said, employers still have an obligation to list an employee’s accrued sick leave on pay stubs consistent with California’s sick leave law. READ MORE →

Post-Tyson Foods: No, The Sky Is Not Falling

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This past March, we blogged about the U.S. Supreme Court’s decision in Bouaphakeo v. Tyson Foods, Inc., 136 S. Ct. 1036 (2016), a case in which the plaintiffs alleged that Tyson Foods improperly denied compensation for time spent putting on and taking off required protective gear at a pork processing facility.  At trial, the plaintiffs presented experts who, based on sample data, determined the average number of minutes employees likely spent donning and doffing and the aggregate damages that would be owed to the class as a result.

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Pay Raises Across the Nation? Not So Fast Say Several States and Business Groups: 21 States and 55 Business Groups Challenge New Federal Overtime Rule

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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.

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Final Fair Pay Rules Are Here: Contractors Face Complex Requirements and Challenges with New Reporting Obligations

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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.

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Life in the Fast Lane: New OSHA Pilot Program Offers Expedited Review of Whistleblower Complaints

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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.

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Digging Into the New Overtime Regulations

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In 2015, the Department of Labor (“DOL”) proposed substantial changes to the minimum salary level requirements, sought input on whether bonuses and incentives should be included in meeting the salary level test and considered changing the duties test to establish overtime eligibility. Taken together, these proposed changes would have had a drastic effect on the obligation of employers to pay overtime. On May 18, 2016, DOL issued its Final Rules and employers have until December 1, 2016 to comply. Overall, the changes strike a middle ground as DOL declined to adopt the more restrictive California 50% duties test. However, doubling the salary level threshold and other changes present significant economic and compliance challenges for employers. Below is a summary of key takeaways and steps employers should consider to address these changes and ensure compliance.

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We Get Out Our Crystal Balls on the Imminent DOL Overtime Rules

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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.

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Pork Processing Plant Employees Can Keep the Bacon: Supreme Court Affirms Jury Award and Permits Proof of Wage and Hour Class Claims By Representative Evidence

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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.

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