Posted in FLSA, Wage and Hour
With the Epic Systems case broadly supporting employers’ rights to use arbitration agreements with class waivers, what is now emerging is the result of the necessary trade-off. Employers can, in the wake of Epic Systems, use arbitration agreements to compel the arbitration of putative class claims on an individual basis. But the quid pro quo is that they must then deal with the case in arbitration. A recent case suggests the perils of arbitration once the dispute is sent there.
Posted in Class Action Litigation, Epic Systems
No shocking outcome here. In Gaffers v. Kelly Services, Inc., Case No. 16-2210 (6th Cir. Aug. 15, 2016), the Sixth Circuit held that the Supreme Court’s decision in Epic Systems v. Lewis, 138 S. Ct. 1632 (2018) [which we blogged here] applies to claims under the Fair Labor Standards Act (FLSA). Gaffers itself was a garden-variety FLSA collective action in which a call center worker argued that he was not properly paid for the time it took him to log on and off the network each day. He sought to bring a collective action under the FLSA on behalf of himself and thousands of other call center workers, and 1,600 of those workers opted into the litigation. While the named plaintiff had not signed an arbitration agreement, about half the opt-in class members did. Those agreements provided that wage and hour claims must be arbitrated on an individual basis.
Posted in State Labor Laws
For a company that does 100 percent of its business in California and employs workers who perform 100 percent of their work in California, it would not be surprising for the workers’ employment to be governed by California’s labor laws. But what if the employer operates in multiple states and the employees work in multiple states, with only a small fraction of their work performed in California – do California’s labor laws apply then? That is the question the California Supreme Court recently agreed to answer.
The California Supreme Court was presented with this question in three cases involving airlines – Oman v. Delta Air Lines (Case No. S248726), Ward v. United Airlines (Case No. S248702) and Vidrio v. United Airlines (Case No. S248702). Oman and Vidrio involve flight attendants, while Ward involves pilots. In Oman, a sampling of data revealed the four plaintiffs spent at most 14 percent of their time working in California. The class member flight attendants in Vidrio spent an average of 17 percent of their time at work in airspace above California, while the class member pilots in Ward spent an average of 12 percent of their work time in airspace above California. Additionally, the class members in Vidrio and Ward are California residents who pay California’s state income tax on their income. Of the four plaintiffs in Oman, two resided in California and were based at California airports, a third was based at a California airport but was not a California resident, and a fourth was neither based at a California airport nor a California resident.
Posted in ERISA
But decision leaves open many questions . . .
With the Supreme Court’s Epic Systems decision laying to rest many of the primary arguments used to avoid arbitration, case law continues to develop regarding how arbitration may apply for claims under the Employee Retirement Income Security Act of 1974 (ERISA). [We blogged the Epic Systems decision here.] It isn’t all that surprising that the Ninth Circuit would hold that certain types of ERISA claims might not be arbitrable, but its July 24, 2018, decision in Munro v. University of Southern California, Case No. 17-55550, may represent something more than that court’s traditional hostility toward arbitration provisions.
Posted in Wage and Hour
We’ve all been there: You pull up to a parking spot, hop out to check whether the meter requires payment on Sunday and then grumble as you fish around in the coin tray. With any luck, you find a quarter or two. More often than not, however, you’re stuck with nickels and the nigh-useless penny. (Of course, the ensuing profanity of finding only 23 cents in your car will soon be a lost art, as most new parking meters accept credit cards or mobile payments.)
Many of us fill that coin tray with the loose change resulting from a purchase at Starbucks, and now a recent California Supreme Court ruling has ensured that California-based employees receive a little more of that earned loose change going forward. In Troester v. Starbucks Corp., 2018 WL 3582702 (Cal. Sup. Ct. July 26, 2018), plaintiff Douglas Troester was a shift supervisor at Starbucks. He filed the initial action in August 2012 on behalf of himself and others in a putative class of all nonmanagerial California employees who performed store closing tasks from mid-2009 through October 2010. Specifically, Troester claimed that on every closing shift, Starbucks’ computer software required him to clock out before initiating the software’s “close store procedure” on a separate computer terminal in the back office. After he completed that task, he activated the alarm, exited the store, locked the front door and walked his co-workers to their cars, in compliance with Starbucks’ policy. All of this, he alleged, happened off the clock.
Posted in Meal and Rest Periods, Wage and Hour
It turns out the lunch really is free.
With low-hanging fruit like claimed misclassification of low-level supervisors already plucked, plaintiffs increasingly turn to more novel claims. In many instances, these involve more technical violations of state and federal law, but some really call into question whether the suit is for the benefit of the employees or the attorneys.
Case in point. In Rodriguez v. Taco Bell Corp., Case No. 16-15465 (9th Cir. July 18, 2018), the employer provided 30-minute unpaid meal periods to employees in compliance with California law (and consistent with federal law as well). It also offered its employees discounted meals, as long as they consumed those meals on the premises. This requirement existed to ensure that the meals were actually eaten by the employees themselves and not purchased for friends or family.
Posted in Class Action Litigation
My father grew up in Nazi-occupied Europe during World War II and would tell the story of how an official would come to his family’s home to modify their radio so they could not receive BBC broadcasts. Shortly after the official left, the family would open the radio box and fix the clumsy modifications that had been made so they could continue to receive outside news from a source not controlled by a fascist government.
In like fashion, during the Cold War, America broadcast its own messages behind the Iron Curtain through Voice of America. In response, some then-Communist countries tried to counter these broadcasts with jamming technologies. I hadn’t heard much about Voice of America since the fall of the Soviet Union, but it still exists as an independent federal agency. It has roughly a thousand employees and currently broadcasts the news in scores of languages around the world, drawing criticism from countries such as Russia and North Korea.
Posted in Wage and Hour
It’s fairly uncommon to see discovery issues make their way to courts of appeal, particularly in class action or wage and hour cases. Last week, however, the Eighth Circuit issued a decision regarding the scope of discovery in a wage and hour action that may be useful in both kinds of cases in the future.
The decision in Acosta v. La Piedad Corporation, Case No. 17-1845 (8th Cir. July 3, 2018), concerned a wage and hour investigation by the United States Department of Labor (DOL) of a chain of Mexican restaurants. The DOL subpoenaed information regarding related entities also affiliated with the company’s owners, in an obvious attempt to broaden the scope of its inquiries and to tie in additional related locations. The requests included basic information about the company’s owners that was not at issue. More importantly, they sought “all documents showing the names and addresses of all other businesses that are partially and/or fully owned by any of the owners … and the percentage of ownership.” The employer refused to produce anything on that subject, prompting the DOL to petition the district court for the enforcement of the subpoena, a petition that was granted.
Posted in FLSA
An improper class still isn’t a class even if you settle
Here’s something you don’t see every day. A district court has rejected the settlement of a proposed class and collective action – not due to the usual reasons such as excessive attorney fees or other terms, but because the plaintiffs have not shown that there is any class in the first place.
Fraticelli v. MSG Holdings, L.P., Case No. 13 Civ. 6518 (S.D.N.Y. July 2, 2018), involved claims by unpaid interns working at Madison Square Garden since 2007. They contended that they were actually employees and should have received the minimum wage and overtime for the time that they worked. They filed their claims in 2013, when many such suits were being filed, but the district court denied conditional certification in 2014. We blogged about that initial decision here. The court’s decision was rooted in common sense – the test under the FLSA involves multiple factors, and the specific work and circumstances for each intern were likely to differ. The court concluded that conditional certification was pointless because even under the relaxed standard for conditional certification, there was no basis to conclude that there was any viable class. The parties then reached a settlement of the matter on a classwide basis.
Posted in FLSA
Fast food enterprises are frequent targets for claimed wage and hour violations. Because in many instances the places where the plaintiff worked is actually a franchise, the scope of a claim or proposed class may be limited to a few locations, rather than the entire chain. It is therefore not uncommon to see efforts made to hold the large brand-name franchisor liable for what might happen in an individual franchisee’s store. In 2016, the Subway chain addressed that issue by adopting the novel approach of providing training to its thousands of franchisees, to help them comply with the FLSA. We blogged about that program here.
Like Subway, the competing Jimmy John’s sandwich chain has grown explosively through franchising. It has over 2,500 stores, over 95 percent of which are franchises. There are at least 700 franchisees, ranging in size from a single store to one owning over 50. Its marketing to potential franchises touts the earning potential of owning a store, but also emphasizes the need for hard work, long hours and adherence to brand standards.
