Class and Collective Actions

As we previously discussed here, the United States Supreme Court’s May 2018 decision in Epic Systems v. Lewis was a clear win for employers that seek to avoid the expense and disruption of class litigation by resolving disputes individually through binding arbitration. As explained by the Supreme Court in AT&T Mobility LLC v. Concepcion, “[i]n bilateral arbitration, parties forego the procedural rigor and appellate review of the courts in order to realize the benefits of private dispute resolution: lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes.”

For employers looking to take advantage of the benefits of individual arbitration, there are several drafting nuances to consider before rolling out or updating existing arbitration agreements.

Continue Reading You Had Me At “Class Action Waiver”

In a welcome decision for franchisors, and first of its kind in the Second Circuit, the Southern District of New York ruled that Domino’s Pizza Franchising LLC, the franchisor (Domino’s), did not exert enough control over its franchisee to warrant joint employer status. This determination means Domino’s will not have to face claims brought under the Fair Labor Standards Act (FLSA) and the New York Labor Law (NYLL) by current and former employees of a Domino’s franchisee.

Click here to read more about the case, the decision and takeaways for employers.

Illinois employers will have a new headache this new year, because as of January 1, 2019, they must reimburse employees for all “necessary expenditures and losses” incurred within the scope of their employment. This August, the Illinois Wage Payment and Collection Act changed to specifically include an expense and loss reimbursement requirement.

Continue Reading New Expense Reimbursement Requirements For Illinois Employers

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.