Employment Class Action Blog

Employment Class Action Blog

Information and Commentary on Class Action Cases Affecting Employers

Court Grants Summary Judgment for Employer in Apple Class Action Seeking Pay for Time Spent in Security Checks

Posted in FLSA

Laptop, mobile phone and digital tablet pc. 3d

Free Choice Tanks Plaintiffs’ Claims

Just last year, the Supreme Court held in Integrity Staffing Solutions, Inc. v. Busk, 135 S. Ct. 513 (2014) that employees working at an Amazon.com warehouse were not entitled to overtime pay for time they spent in exit security checks designed to ensure that they were not taking company product with them. The crux of the court’s decision was that the checks themselves involved no work and were not “integral and dispensable” parts of the employees’ workdays.

In 2013, or the year before Busk was handed down, three class actions were brought against Apple Inc. raising similar claims on behalf of Apple’s 52 California retail stores. Frlekin v. Apple Inc., Case No. C 13-03451 (N.D. Cal). They contended that Apple workers leaving the premises with a bag, purse, backpack, or briefcase or with technology such as an iPhone would need to undergo an exit search before leaving for the day. The plaintiffs sought unpaid overtime under the FLSA as well as under California law and the laws of a handful of other states.  Continue Reading

Justices Take On Another California Rule – When an Arbitration Agreement Is Too Flawed to Enforce

Posted in Arbitration, Independent Contractors

supreme court iStock_000005215190_LargeThe U.S. Supreme Court has agreed to review whether the Federal Arbitration Act (FAA) preempts a California state court rule on unconscionable provisions that is purportedly applied more stringently to arbitration agreements than to other contracts. Under the California rule, arbitration agreements with more than one unconscionable provision may not be enforced despite an express severability clause.

In MHN Government Services, Inc., et al. v. Zaborowski, et al., Case No. 14-1458 (cert. granted 10-1-15), the justices will consider the Ninth Circuit’s 2-1 opinion that denied arbitration of Fair Labor Standards Act (FLSA) and state court claims brought by consultants who offer short-term financial, child services, and victim-advocacy counseling at U.S. military installations. Continue Reading

PAGA In The News – Ninth Circuit Sides with California Supreme Court On Enforcement of PAGA Waivers and California Amends The Statute

Posted in PAGA

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The Ninth Circuit Decision

Delivering a perhaps unexpected blow to employers, the Ninth Circuit sided with the California Supreme Court earlier this week in upholding the state-court-fashioned Iskanian rule, which prevents employees from waiving representative Private Attorneys General Act (“PAGA”) claims in their employment agreement. Sakkab v. Luxottica Retail N. Am., Inc., 9th Cir., No. 13-55184, Sept. 28, (2015).

We have been following the growing divide between state and federal courts in California regarding the enforceability of representative PAGA waivers in blog articles over the last year. Continue Reading

Sixth Circuit Grants Summary Judgment as to Class, Based on FLSA Agriculture Exemption

Posted in FLSA

dirt iStock_000007700089_LargeIs the saying “fish or cut bait” dead?

If you are ever in need of sleep, pull out your copy of the U.S. Code and traipse through the exemptions contained in section 13 of the FLSA, 29 U.S.C. § 213. We’re all familiar with the so-called white-collar exemptions for administrative, executive, and professional employees, as well as outside salespeople. Other exemptions exist for railroads, airlines, and certain interstate motor carriers. Still more exist for radio announcers, certain employees in small towns and movie theaters, and in some cases employees in orphanages. While there is currently a flood of litigation regarding the most common exemptions, litigation involving the less well-known exemptions is relatively rare. Continue Reading

Eleventh Circuit Rejects DOL Test in Internship Collective Action

Posted in Collective Action

money2It is almost an axiom that the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq., passed in 1938, is out of date. Despite modest tweaks since the time it was enacted, a particularly dark time in the Great Depression, it is based on an economy that vanished decades ago. This reality pops up from time to time in case law in which courts express frustration or worse over the statute, its regulations, or its application to new or emerging industries, as recognized in a recent Eleventh Circuit decision involving interns.

Nearly 70 years ago in Walling v. Portland Terminal Co., 330 U.S. 148 (1947), the Supreme Court addressed the issue of interns, a term it never even used then. That case concerned a weeklong training program for would-be railway yard brakemen and whether the participants were FLSA “employees.” The Supreme Court in that case developed a test that focused on whether the individual trainee or the railroad was the “primary beneficiary” of his services during that time. The Supreme Court found that given the nature of the training program, the primary beneficiaries were the individuals, who picked up knowledge and training, and thus they were not “employees” under the FLSA.  Continue Reading

Following the Sixth Circuit’s Lead, Ohio Appellate Courts Find Whether an Agreement Allows Class Arbitration Is a “Gateway Issue”

Posted in Arbitration

Ohio Statehouse_453067907As we stated previously, the potential impact of whether entitlement to class arbitration is a “gateway issue” will likely diminish with each passing year. (See our March 12, 2015, blog article on the denial of certiorari in Opalinski v. Robert Half International, Inc.) This is because of the increasing number of class action waivers now being placed in arbitration agreements.

Nevertheless, since December 2014, two Ohio appellate courts have decided the issue, holding that when the contract is silent, it is a gateway issue to be decided by the judiciary. First, in Bachrach v. Cornwell Quality Tools Co., 9th Dist. No. 27113, 2014-Ohio-5778, the Ninth Appellate District considered who should decide whether a franchise agreement authorized class arbitration. The trial court had concluded as a matter of law that “an arbitration agreement that is silent as to class versus individual arbitration is a question for the arbitrator, not the court to decide.” Continue Reading

Northern District of California Certifies Part of a Class Against Uber

Posted in Class Certification, Independent Contractors

cars traffic iStock_000003131055_LargeMuch is being reported in the media about the decision of the United States District Court for the Northern District of California certifying a class of drivers for the Uber ride service who contended that they were employees, not independent contractors.  O’Connor v. Uber Technologies, Inc., Case No. C-13-3826 EMC (September 1, 2015). The case is significant for its display of the inherent litigation risk for any new business model and for its impact on one of the most prominent players in the shared economy, but it is otherwise likely too early to assess its impact at this stage.

The O’Connor case was brought under California law ostensibly on behalf of 160,000 California Uber drivers for the period August 16, 2009, to the present. The plaintiffs contended that they were misclassified as independent contractors and entitled to recover under the California Labor Code as a result. Among their claims was one that they should have been given “tips” allegedly received by the company through its fee structure with passengers. Continue Reading

New York District Court Denies Conditional Certification of Second FLSA Collective Action

Posted in Collective Action, Conditional Certification

flsaBecause of the low standard employed by many courts, decisions denying conditional certification in FLSA cases are generally in the minority, but some careful courts will continue to make such decisions. A recent case is notable not only for the fact that the court denied conditional certification, but also that it actually examined the events in a related case to support its decision.

In Augustyniak v. Lowe’s Home Center LLC, Case No. 14-CV-00488 (W.D.N.Y., Aug. 20, 2015), the plaintiffs sought to represent a class of human resource managers against the Lowe’s do-it-yourself chain nationwide. Two years previously, the same attorneys had brought a similar case, captioned Lytle v. Lowe’s Home Centers Inc., Case No. 8:12-cv-01848, involving a different time period for essentially the same class in a Florida district court. The district court in the Lytle case had conditionally certified the class and the matter ultimately settled, although not without controversy. The district court at least twice rejected the parties’ proposed settlement agreement due to issues over the formulas used to determine how much class members would receive.  Continue Reading

DOL Memo Provides Script for FLSA Collective Actions Alleging Independent Contractor Misclassification

Posted in FLSA, Independent Contractors

Target with three arrows isolatedThe all-time best The Far Side cartoon (based on an unscientific survey, sample size of me) is the one with two deer standing in the forest, one with a red circular target imprinted on its chest. The other deer says, “Bummer of a birthmark, Hal.”

Poor Hal. Blessed with the ability to walk upright, but cursed by that darned target.

In an Administrator’s Interpretation issued July 15, 2015, the Wage and Hour Division (WHD) of the Department of Labor placed a similar target on every company that uses independent contractors. If this describes your company, consider yourself to be Hal. You may be blessed with the ability to avoid paying withholding tax, providing workers’ compensation coverage, and offering employee benefits, but there’s also that darned target. Continue Reading

Washington Federal Court Decertifies Class of Insurance Agents Alleging Entitlement to Overtime

Posted in Class Action Fairness Act, Independent Contractors

workersChallenging the classification of workers as independent contractors continues to be a growing area of focus for plaintiffs’ attorneys. However, as a recent federal case from Washington demonstrates, the fact-intensive inquiry that is the hallmark of the independent contractor inquiry is not compatible with classwide resolution – particular post-Dukes.

In Rodney v. Bankers Life and Casualty Co., Case No. C14-766RSL (W.D. Wash. June 30, 2015), the plaintiffs were insurance agents who worked for and were classified by Bankers Life as independent contractors. The plaintiffs alleged that they were actually common law employees and, thus, entitled to overtime under Washington’s Minimum Wage Act. The case was originally brought in Washington state court and certified as a class before Bankers successfully removed the case to federal court under the Class Action Fairness Act. Bankers then moved to decertify the class. Continue Reading