Fifth Circuit Finds That Airport Supervisor Is Not Exempt From Arbitration

Once again, a court has considered the criteria for the transportation worker exemption from the Federal Arbitration Act (FAA), 9 U.S.C. § 1. This time an account manager for ISS Facility Services Inc., Heidi Eastus, who oversaw ticketing and gate agents at George Bush Intercontinental Airport in Houston, Texas, maintained that she was exempt from the FAA as a transportation worker. Eastus was assigned to supervise ticketing and gate agents for Lufthansa German Airlines, which sometimes entailed handling passengers’ luggage herself. But the Fifth Circuit panel found the FAA exemption did not apply. See Eastus v. ISS Facility Services, Inc., Case No. 19-20258 (5th Cir. May 27, 2020).

Eastus filed employment discrimination and retaliation claims against ISS and two Lufthansa entities. The defendants moved to compel arbitration premised on the arbitration provision in Eastus’ ISS employment agreement. Eastus responded that arbitration could not be ordered because she was exempt from the FAA. The district court granted the motion to compel arbitration. We have repeatedly addressed the uncertainty surrounding the tests for application of the FAA exemption. See our April 29, 2019, Sept. 13, 2019 and April 3, 2020 blog posts. As reflected in the discussion below, application of the correct test may involve analysis of complex and differing legislation. The ongoing search for proper exemption criteria has caused consternation in gig economy companies and may only be intensified by claims arising from the COVID-19 pandemic in the transportation industry. Continue Reading

District Court Dismisses Majority of Claims in Women’s Soccer Equal Pay Dispute

The U.S. Women’s Soccer team has won four FIFA World Cup titles and four Olympic gold medals. The U.S. Men’s Soccer team has not, and did not even qualify for the most recent men’s World Cup. In the wake of the successes of the women’s team, particularly in comparison to the record of the men’s team, media attention was drawn to arguments that women players were paid less than male players. And yet, the United States District Court for the Central District of California has now dismissed the majority of their claims. What happened?

It turns out that the story wasn’t quite what was reported, and that the details of the various player arrangements were far more complicated than media sound bites would permit. These issues are present in many class cases involving alleged pay disparities, but were especially important in this instance. Continue Reading

The Third Circuit Demonstrates That Arbitration Rules Really Do Matter

Some may have wondered whether mentioning the rules of an administrative organization, such as the American Arbitration Association (AAA), in an arbitration agreement could have a legal impact.  It can. A number of decisions have considered how referencing specific arbitral rules can affect delegation of authority to an arbitrator or aggregate action issues. See our blog post of Jan. 15, 2019 for a listing of decisions addressing how incorporation of rules can provide evidence of delegation of authority to an arbitrator when deciding arbitrability or the ability to entertain aggregate claims.

In the Richardson v. Coverall North America, Inc., Nos. 18-3393 and 18-3399, opinion of April 28, 2020, the U.S. Court of Appeals for the Third Circuit issued an opinion that once more evaluated an arbitrator’s authority to decide his or her own jurisdiction.

Ericka Richardson and Luis Silva each purchased a franchise for a commercial cleaning business from Coverall North America, Inc. (CNA). Their franchise agreements included arbitration provisions and incorporated the AAA’s Commercial Arbitration Rules (AAA Rules). After disputes arose, Richardson and Silva filed a putative class action claiming they were actually employees of CNA not independent contractors. The district court found that it, rather than the arbitrator, should decide the issue of arbitrability, but the Third Circuit reversed, finding that both agreements delegated the authority to resolve the issues to an arbitrator. Continue Reading

Maryland District Court Grants Summary Judgment Against Collective Class in Claimed Misclassification Case

Misclassification cases are grist for the mill in wage and hour litigation. As we have pointed out previously, the typical pattern is for the plaintiff to assert claims for unpaid overtime on the grounds that the position involved allegedly did not entail exempt work, to obtain conditional certification under the lower “stage one” procedure and then settle. 

But it doesn’t always work out that way, as a recent case demonstrates.

In Blake v. Broadway Services, Inc., Civil Case No. SAG-18-0086 (D. Md. April 6, 2020), the plaintiffs worked as “majors” for a security company that used police-style titles for its staff. In that position, each was, at least on paper, the highest-ranking security officer at a particular job site, such as a shopping mall, hospital or college campus. They contended that they were entitled to overtime and brought a collective action under the Fair Labor Standards Act. Continue Reading

Maryland District Court Refuses Conditional Certification of Proposed Class of Grocery Store Managers

Grocery stores have taken on special prominence as being on the front lines of the current coronavirus pandemic. Just as that role was becoming apparent, the federal district court in Maryland issued a strong opinion not only denying conditional certification for a class of grocery store managers, but also dismissing many of their claims.

In Hunt v. Aldi, Inc., Case No. 8:18-cv-2485-PX (D. Md. Mar. 16, 2020), the plaintiffs were store managers working for the Aldi’s discount grocery store chain. They brought suit pursuant to the Fair Labor Standards Act alleging, predictably, that they were misclassified as exempt because they did not, they asserted, actually manage their stores. As is usually the case, they also sought conditional certification of a class of store managers nationwide. Continue Reading

Another Court Rules on When Ride-Sharing Drivers Are Exempt From Arbitration

In this time of concern regarding the COVID-19 pandemic, there are other challenges still confronting companies. One involves the standard for enforcing arbitration agreements involving transportation workers. Or, stated differently, when drivers may be exempt from the Federal Arbitration Act (FAA). We have previously covered the courts’ struggles to deal with the fallout from New Prime v. Oliveira, 139 S. Ct. 232 (Jan. 12, 2019), on the transportation industry and gig drivers. See our blog posts of Jan. 17, 2019, Mar. 12, 2019, Apr. 29, 2019 and Sept. 13, 2019.

Now, U.S. District Court Judge Indira Talwani has waded into the legal thicket to determine those workers who are covered by the FAA Section 1 exemption and if the arbitration agreement with class waivers could be enforced under the Massachusetts Uniform Arbitration Act. See Cunningham v. Lyft, Inc., Case No 1:19-cv-11974, Order of Mar. 27, 2020.

In Cunningham District Judge Talwani considered the application of the FAA’s Section 1 exemption in the context of a class action alleging misclassification as independent contractors, brought by ride sharing drivers who transport paying passengers rather than goods. After analyzing Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001), and Singh v. Uber Techs. Inc., 939 F. 3d 210 (3d Cir. 2019), (among others) the court concluded that there was “no basis in the statute or precedent” to restrict the Section 1 exclusion only to workers who transport goods rather than passengers. (Slip Op. at 12). Continue Reading

Dealing With COVID-19 In Your Workplace Without Inviting Future Class Actions

You don’t need us to tell you that it’s not an easy time to be an employer.  With ever growing concerns over employee safety, business operations, costs, and complying with new and rapidly evolving legislation as a result of COVID-19, getting your business through the next day can seem overwhelming enough.  However, it is important to remember that the current crisis will eventually pass.  And when it does, the last thing you’ll want to do is defend against a class or collective action lawsuit, particularly when it could have been easily avoid  To help make sure this doesn’t happen, we have identified below five important issues to consider as part of your COVID-19 response.  [*Note: For a comprehensive analysis of employment-related COVID-19 issues and how to navigate them, please check out our COVID-19 response site at https://www.bakerlaw.com/Coronavirus-COVID-19].

Make sure your telecommuting non-exempt employees are recording all their time, including boot-up/boot-down time

It goes without saying that if you are one of the many employers who have non-exempt employees working from home, they need to be paid for all their worktime done at home.  However, it is important to remember that compensable worktime includes things such as logging into and out of computer systems for the day – processes which can be unexpectantly delayed and complicated in a mass work from home situation.  Therefore, it is crucial that you reiterate in writing that all such time is compensable, and that your non-exempt employees have a way to record such boot-up and boot-down time.  One option is to allow telecommuting employees to record their time on paper or e-mail and make them responsible for submitting that time for payment.  You should also ask your employees if they are having any issues logging in/recording time as part of your regular check-in sessions. Continue Reading

California Supreme Court Creates More Problems for Employers Under PAGA

As we have noted throughout the years, interpreting the California Private Attorneys General Act (PAGA) can be a difficult task. See our blog articles of July 14, 2017, Aug. 4, 2017, Nov. 29, 2017 and Sept. 12, 2019. California adopted PAGA to support the state Labor and Workforce Development Agency’s enforcement burden by empowering workers to bring claims on the state’s behalf.

Now in a case of first impression the California Supreme Court has determined what “aggrieved” means under PAGA and the impact of an employee’s settlement of his individual claims. The court determined that “[s]ettlement of individual claims does not strip an aggrieved employee of standing, as the state’s authorized representative, to pursue PAGA remedies.”

The Underlying Facts

In Kim v. Reins International California, Inc., March 12, 2020, Case No. 5246911, Reins International California, Inc. (Reins) employed Justin Kim as a training manager in its California restaurants. When he was hired, Kim signed an individual arbitration agreement. After he brought a putative class action claiming misclassification against Reins, the company moved to dismiss the class claims and for individual arbitration while acknowledging that the PAGA claim could not be waived or arbitrated. See Iskanian v. CLS Transportation, Los Angeles, LLC (2014) 59 Cal. 4th 348, 382-384. Continue Reading

Illinois District Court Denies Certification of ADA Claims in Airplane Mechanic Case

It’s been awhile since we’ve addressed attempts at bringing class action disability claims (September 27, 2013 and March 6, 2014), but as we’ve noted in the past, they make poor candidates for class action treatment. Disability claims almost by definition involve more, and more highly individualized, inquiries and quickly run into trouble satisfying Rule 23’s requirements.

A case from the Northern District of Illinois well illustrates this point. In DeFreitas v. United Airlines, Case No. 19 C 3397 (N.D. Ill. Feb. 11, 2020), the plaintiff was an airline maintenance worker who claimed that he was suffering from a degenerative and painful cervical disc disease. He contended that he sought sedentary work as an accommodation, but despite multiple requests was never hired for any such positions within the airline. He ended up taking a position with a delivery service that better accommodated his condition. Continue Reading

California District Court Releases Opinion Invalidating AB 51

Two Centuries of Federal Precedent Given Effect

We’ve blogged several times the ongoing saga involving AB 51, California’s attempt to prevent the mandatory arbitration of employment claims largely by sanctioning employers who use such agreements. (Oct. 11, Dec. 30 and Jan. 16) Much of that saga currently focuses on the case of Chamber of Commerce of the United States of America v. Bacerra, No. 2:19-cv-02456 (E.D. Cal.), a case brought to challenge AB 51’s implementation. Most recently, we noted that the district court in that case, by minute order, had preliminarily enjoined AB 51’s enforcement. (Feb. 3) Several days later, on Feb. 6, the district court explained the reasons supporting that order in a 36-page opinion reiterating its decision to enjoin enforcement of the Act.

As most of us learned in high school, the Constitutional Convention was called in 1787 to address crippling issues caused by the weak central governing structure of the Articles of Confederation. Chief among the problems was that the 13 former colonies acted too much like 13 different countries over the intervening decade or so, making interstate commerce impracticable. After extensive debate, the framers of the Constitution concluded that a more centralized federal government was necessary, and that its laws would be binding on the states. To effect that principle, Article VI, Clause 2 of the Constitution (the “Supremacy Clause”) provides:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding. Continue Reading

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