Class and Collective Actions

With the modern workforce comes modern employment problems. Businesses and workers alike have embraced the “gig economy,” but employment laws were not designed for workforces dominated by independent contractors and freelancers. This disconnect leaves gig economy businesses open to significant liability where such workers should have been classified as employees under the law.

Continue Reading New York Delivers Good News For Independent Contractors, But Risks Remain

Last month the California Supreme Court ruled in favor of a class of 1,400 student bus drivers who sued their employer for failing to comply with state background check laws. The Court’s decision is notable because it is part of a broader trend of states and cities making it more difficult for employers to use background checks. Under Connor v. First Student, Inc., employers in California must comply with overlapping statutes regulating investigative consumer reporting agencies.

Continue Reading California Supreme Court Pro-Employee Ruling Affirms Employer Duty To Comply With Overlapping Background Check Laws

Last week, in Troester v. Starbucks Corporation (Case No. S234969), the California Supreme Court weighed in for the first time on the viability of a de minimis defense to California wage and hour claims.

Many commentators have since rushed to declare that “de minimis” is dead. Not so.

Continue Reading California Supreme Court Leaves Open The Possibility Of A De Minimis Defense For Wage And Hour Claims – But Not Under The Facts Of This Case

On June 14, franchisors received good news when the US District Court in the Eastern District of Illinois ruled that Jimmy John’s Franchise, LLC is not a joint employer of its franchisees’ employees.

In 2014, former employees of various Jimmy John’s franchisees brought a collective action against their former franchisee employers and against Jimmy John’s Franchise, LLC. The former employees alleged they were misclassified as exempt under the FLSA and consequently denied overtime pay. They also claimed that Jimmy John’s, as an alleged joint employer, was jointly liable for their damages.

On summary judgment, the Court applied a modified version of the Seventh Circuit’s Moldenhauer test to determine joint employment. It stated that all of the factors reviewed boiled down to one essential question: whether
Jimmy John’s exercised control and authority over franchise employees in a manner that caused the FLSA violation (at least in part). And, the Court determined that the evidence demonstrated that the franchise owners determine how to classify and compensate franchise employees — not Jimmy John’s. As such, Jimmy John’s did not exercise control over the alleged FLSA violation and was not a joint employer.

Click here to read more on the decision and its impact on franchisors.

In our latest episode, listen to partners Arthur Rooney and Mike Brewer discuss the recent decision from the US Supreme Court regarding class action waivers in arbitration agreements.

Download this episode (and more) on  iTunes | Android | Stitcher | TuneInGoogle Play.

But Are They Right for Your Workforce?

The US Supreme Court issued a highly anticipated decision on May 21, 2018 in Epic Systems Corp. v. Lewis, holding that class action waivers in arbitration agreements are fully enforceable, notwithstanding the right to engage in concerted activity under the National Labor Relations Act.

Although employers now have a tool to effectively eliminate most employment class actions through the use of arbitration agreements, several other important nuances remain to be considered before rolling out an arbitration program.

Click here to learn more about the decision and what it means for your business.

Welcome news for employers: companies can require their workers go through arbitration to pursue any legal claims against their employers, rather than go to court or join together in class lawsuits or grievances, the US Supreme Court held today in a 5-4 vote.

Writing for the majority in three consolidated cases (Epic Systems Corp. v. Lewis, NLRB v.  Murphy Oil  USA, Inc., and Ernst & Young LLP v. Morris), Justice Neil Gorsuch said the Federal Arbitration Act sets a strong policy favoring the enforcement of arbitration agreements, and employees of the three companies failed to show they had any right to disregard the arbitration agreements they signed.

The policy may be debatable but the law is clear: Congress has instructed that arbitration agreements like those before us must be enforced as written. While Congress is of course always free to amend this judgment, we see nothing suggesting it did so in the NLRA — much less that it manifested a clear intention to displace the Arbitration Act. Because we can easily read Congress’s statutes to work in harmony, that is where our duty lies.

The ruling means that companies can enforce their class action waiver agreements and their employees will have to pursue their claims in individual arbitration proceedings. Please stay tuned for more to come from us on the actions employers should take now in response to this important decision.

On April 30, the California Supreme Court issued an opinion radically changing the legal landscape for any company engaging independent contractors in California. Dynamex Operations West Inc. v. The Superior Court of Los Angeles County changes the legal test for determining whether workers should be classified as employees or as independent contractors under California’s wage orders. The Court scrapped the multifactor, flexible test (known as “Borello”) that has been used in California for decades. It adopted the “ABC” test, a standard that has its roots in determination of unemployment tax status in other states and presumes workers are employees instead of independent contractors.

This extraordinary decision will have far-reaching consequences for California companies reliant on independent contractors and likely spur a landslide of litigation for years to come. As such, we are recommending that companies engaging independent contractors in California, in any industry, work with counsel to revisit classification decisions and undertake a cost/benefit analysis of reclassifying workers in the near term.

For more, please read our alert HERE.

The California Supreme Court’s decision in Brinker v. Superior Court unleashed a flood of single-plaintiff and class-action lawsuits involving alleged violations of California’s meal and rest period laws. Under California law, employees are entitled to take at least one 30-minute uninterrupted, off-duty meal break no later than the end of their 5th hour of work. If employees work over 10 hours, they must be provided a second 30-minute meal period. Similarly, employees must also receive 10-minute rest periods for each 4 hour-period worked or major fraction thereof.

Continue Reading Take A Break To Remember Your Meal And Rest Period Obligations Under California Law

We are pleased to report that a California federal judge put to rest claims by a proposed class of Kiewit Infrastructure West Co. workers that they weren’t given adequate meal breaks and rest periods, saying the company was exempted from liability by a valid collective bargaining agreement.

In reconsidering a portion of his November ruling that granted the construction and engineering services provider partial summary judgment over various wage and hour claims brought by lead plaintiff Peter Zayerz under the California Labor Code, Judge Gutierrez acknowledged he had mistakenly failed to consider in his earlier decision whether the company was exempt from liability for the meal and rest period claims by a collective bargaining agreement that was in place between 2012 and 2015, the time period in which Zayerz’s claims arose.

“The court concedes that it failed to consider a material issue of law in its prior order, namely that the governing CBA exempts defendant from liability under the labor code for the meal and rest period claims,” Judge Gutierrez said.

With that, Judge Gutierrez awarded Kiewit summary judgment on all remaining claims and closed the case. Kiewit is represented by our own Arthur J. Rooney, Todd K. Boyer, Benjamin R. Buchwalter, Alexis Hawley and Melissa Logan.

The case is Peter Zayerz v. Kiewit Infrastructure West Co. et al., case number 2:16-cv-06405, in the U.S. District Court for the Central District of California.

Find the write-up in Law360 HERE.