Wake up and Smell the Coffee: California Supreme Court Limits Use of the De Minimus Doctrine as a Defense to Claims for Small Amounts of Unpaid Wages

Except in limited circumstances, Employers in California can no longer avoid liability for unpaid wages even if the unpaid amounts are de minimus, or “trivially small.” Despite never being officially enacted into law, many California employers have relied on the federal Fair Labor Standards Act (“FLSA”) de minimus doctrine in defending claims brought by employees claiming to have worked off-the-clock. The de minimus doctrine is an application of the maxim de minimus non curate lex, meaning “the law does not concern itself with trifles.” The de minimis doctrine holds that “alleged working time need not be paid if it is trivially small: ‘[A] few seconds or minutes of work beyond the scheduled working hours… may be disregarded.’” In the context of off-the-clock claims, employers have used it to defend compensating employees for work performed off the clock in such small amounts that it would be administratively difficult to record. Most commonly, this applied to work time of fewer than 10 minutes. Read More ›

Clarity on Legality of Work Rules Under NLRA has Arrived!

Last month, in an effort to clarify what types of employee handbook rules are lawful under the National Labor Relations Act (“NLRA”), the General Counsel of the National Labor Relations Board (“NLRB”) issued new Guidance on the topic. Determining which rules are permissible and which may violate the NLRA has troubled both union and non-union employers in recent years due to the Obama-era NLRB’s tendency to find that standard handbook rules (e.g. those on basic civility, insubordination, confidentiality, etc.) violate employees’ rights to engage in “concerted activity” for “mutual aid and protection” under Section 7 of the NLRA. Read More ›

Supreme Court Strikes “Knock-Down Blow” to Public Sector Unions

For about six years the writing was on the wall; the U.S. Supreme Court was anxiously awaiting the opportunity to reconsider its now 41-year old ruling allowing public sector unions to require non-union members to pay them “agency” or “fair-share” fees. Today, the Supreme Court has spoken: agency fee arrangements are allowed no more. Read More ›

5th Circuit Reminds Employers to Follow Requirements of Arbitration Agreement

On the heels of the U.S. Supreme Court’s decision in Epic Systems Corp. v. Lewis, holding that waivers of class/collective actions included within an agreement between employers and employees to arbitrate any and all disputes was valid and enforceable (see previous Epic Systems blog post), the US Court of Appeals for the Fifth Circuit reminded employers this week of the importance of adhering to the requirements of the arbitration agreements that they seek to enforce, holding that the employer’s failure to sign the agreement prevented its enforcement. Read More ›

Supreme Court Approves Waiver of Class/Collective Actions In Arbitration Agreements. What Does it Mean for Employers?

On May 21, the U.S. Supreme Court issued its long-awaited decision in Epic Systems Corp. v. Lewis, resolving an issue on which several Courts of Appeals and various federal agencies and administrations had disagreed. At issue in Epic Systems (and two companion cases presenting the same issue: Ernst & Young LLP. v. Morris and National Labor Relations Board v. Murphy Oil USA, Inc.) was whether a provision in an employer’s mandatory arbitration agreement with employees that waived individuals’ rights to participate in class and/or collective actions against the employer was valid. Finding that federal law supported the right to participate in individualized proceedings, and that there was no conflict with federal law protecting employees’ rights to engage in “concerted activities,” the Supreme Court held in a 5-4 decision that waivers of class/collective actions included within an agreement between employers and employees to arbitrate any and all disputes was valid and enforceable, precluding the efforts of employees to avoid arbitration in order to pursue collective actions against their employers under the Fair Labor Standards Act (“FLSA”). Read More ›

Easy as ABC: California High Court Mandates New Test for Independent Contractors–Most Workers Should Now be Classified as Employees

On April 30, 2018, the California Supreme Court reversed a long standing precedent that provided employers with some flexibility in classifying employees as independent contractors versus employees. In Dynamex Operations West, Inc. v. The Superior Court of Los Angeles County, the court dealt with the standard under California law in determining whether workers should be classified as employees or independent contractors for purposes of California wage orders, which impose obligations relating to the minimum wages, maximum hours, and basic working conditions (such as required meal and rest breaks). Dynamex offers “on-demand” pickup and delivery services to the public and large business customers. The underlying lawsuit in Dynamex involved two individual delivery drivers, suing on  behalf of a class of allegedly similarly situated drivers. The workers filed a complaint against Dynamex, a nationwide package and document delivery company, alleging that Dynamex had misclassified its delivery drivers as independent contractors rather than employees. Read More ›

Higher Learning: Employees of Educational Institutions Likely Protected From Sexual Orientation Discrimination under Title IX

Title IX of the Education Amendments of 1972 is a federal civil rights law that prohibits discrimination on the basis of sex in any educational program or activity that receives federal funding. Many K-12 educational institutions and nearly all colleges and universities are subject to Title IX’s sex discrimination protections. Title IX and Title VII of the Civil Rights Act of 1964 both protect employees against sex discrimination in the workplace, yet neither law expressly prohibits discrimination on the basis of an employee’s sexual orientation. Since case law interpreting Title VII generally influences how courts assess Title IX claims, it is important for educational institutions to closely monitor important developments in Title VII rulings pertaining to sexual orientation discrimination. Read More ›

Face/Off: The Illinois Biometric Information Privacy Act Spawns a Wave of Class Action Lawsuits

After almost 10 years since its enactment, the Illinois Biometric Information Privacy Act (“BIPA”) has spawned a new wave of litigation against employers centered on biometric timekeeping technology. BIPA was enacted to regulate the collection, use, storage, retention and destruction of biometric information, such as fingerprints and hand or face scans, among other things. Although the law’s primary focus was to protect consumer biometric information, the vast majority of recent class action lawsuits have been filed against employers that use biometric timeclocks, e.g., fingerprint and handprint machines, to track employee hours.

Although other states have enacted biometric privacy statutes, BIPA is the only biometric privacy law in the nation which allows for a private right of action and recovery of liquidated damages to any “person aggrieved.” Under the statute, a plaintiff may recover liquidated damages of up to $5,000 for each BIPA violation. Since at least 2015, more than 100 class action lawsuits have targeted employers primarily in Illinois state and federal courts. Read More ›

The Supreme Court Gives Employers the Green Light, Will No Longer Narrowly Construe FLSA Exemptions

On April 2, 2018, the United States Supreme Court in Encino Motor Cars, LLC v. Navarro, Justice Thomas writing for the majority, held that car dealership “service advisors” are “salesm[e]n… primarily engaged in… servicing automobiles” and therefore are exempt from the FLSA’s overtime requirements under 29 U.S.C. § 213(b)(10)(A). Significantly, in addition to issuing a ruling that is favorable to auto dealerships, the Court also provided useful language to all employers based on its view of how FLSA overtime exemptions should be construed. Read More ›

Silence Just Became More Expensive: Trump Tax Reform Requires Employers to Choose Between Tax Deduction and Confidentiality of #MeToo Settlements

Much of the media’s coverage of the recent tax reform has focused on the benefits to corporate America. However, one provision of the Tax Cuts and Jobs Act of 2017 that has received little coverage is perceived to address concerns raised in the #MeToo movement regarding confidential settlements of sexual harassment claims. Specifically, the Act added a new section to the Internal Revenue Code, which prohibits deductions for amounts paid to settle sexual harassment and sexual abuse claims when the settlement is subject to a nondisclosure agreement. In effect, the Act requires an employer to choose between a tax deduction and confidentiality of the settlement. Given that confidentiality is often a critical component of a typical employment settlement agreement, particularly for claims that may involve salacious allegations, employers now face a more difficult calculus. At a minimum, employers should anticipate that sexual harassment claims will be more costly to settle if the agreement includes a non-disclosure provision. Read More ›