Employment Class Action Blog

Employment Class Action Blog

Information and Commentary on Class Action Cases Affecting Employers

The Board vs. the Courts: Will 2016 mark the final showdown for class action waivers in arbitration agreements?

Posted in Arbitration, National Labor Relations Act, NLRB

Labor_Relations_iStock_000023309632SmallArbitration agreements are practical tools that help employers protect confidential information and avoid the costs associated with traditional litigation. They can also be an extremely effective mechanism for employers to reduce exposure to risky employment litigation and potentially abusive collective action claims under the Fair Labor Standards Act (“FLSA”). We’ve written extensively on the courts’ treatment of such agreements on several occasions.

Nevertheless, since its 2012 decision in D.R. Horton, Inc., 357 NLRB 184, the National Labor Relations Board (“NLRB”) has consistently maintained that the National Labor Relations Act (“NLRA”) prohibits arbitration agreements that require employees to waive the right to pursue labor-related class and collective actions – despite provisions allowing workers to opt out of, or into, the waivers. Continue Reading

The Next Chapter – Uber Responds to District Court Order With a New Arbitration Agreement

Posted in Class Certification, Independent Contractors, PAGA

Row_of_carsNot only did Uber respond to the district court’s December 9, 2015, ruling (discussed in our December 11 blog) with an immediate notice of appeal, but on December 11 it rolled out a new arbitration agreement for its drivers. This maneuver has garnered considerable media attention and prompted the plaintiffs to file an emergency motion to enjoin Uber’s communications with class members on the same day.  Continue Reading

District Judge Rules Uber’s Arbitration Agreements Unenforceable on Public Policy Grounds

Posted in Class Certification, Independent Contractors, PAGA

cars traffic iStock_000003131055_LargeOn September 2, we addressed the much-publicized O’Connor v. Uber Technologies, Inc. case (No. 13-cv-03826-EMC) pending before the U.S. District Court for the Northern District of California. In O’Connor, a group of 160,000 current and former drivers contend that they were Uber’s employees rather than independent contractors and hence entitled to protections provided by the California Labor Code. Specifically, the Plaintiffs raised claims for expense reimbursement and converted tips under the California Labor Code.

Now the court has issued a 32-page Order granting in part and denying in part the Plaintiff employees’ Supplemental Motion for Class Certification. One problematic component of the Order is Judge Edward Chen’s determination that Uber’s arbitration agreements with Private Attorneys General Act (PAGA) waivers are unenforceable as a matter of public policy. The Order illustrates some of the pitfalls surrounding the creation of enforceable arbitration agreements with representative action waivers in California. The evolving law regarding PAGA claims, their waiver, and related judicial procedures only increases the difficulty of decision making. Continue Reading

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

glasses iStock_000048458646_Large

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