Denial of Conditional Certification Highlights Importance of Handbook Policies

A recent decision from the Eastern District of Wisconsin serves as a strong reminder that well-crafted handbook policies can sometimes save the day for employers in proposed Fair Labor Standards Act collective actions. Amandah v. Alro Steel Corp., No. 19-CV-1607-JPS (E.D. Wis. Aug. 21, 2020).

The plaintiff in Amandah brought a proposed collective action against his employer, claiming that the company unlawfully failed to compensate employees for all hours worked. Specifically, the plaintiff claimed that the employer maintained a policy encouraging employees to arrive 15 minutes early for work, but rounded the employees’ punch-in times to the scheduled start of the shift. The plaintiff’s proposed collective action encompassed hourly employees working at 73 warehouses spread across 12 states. Continue Reading

Sixth Circuit Sets Out Guidelines for Lodestar Fee Awards in Class Actions

Attorney fee awards are a major driver of class action litigation – both in the employment and other contexts. How they are awarded, and what is “reasonable” has been an ongoing source of contention in many cases. A recent opinion from the Sixth Circuit provides some guidance and also places limits on methodology used by some courts to support generous, even lavish, fee awards.

The decision in Linneman v. Vita-Mix Corp., Case Nos. 19-3993/4249 (6th Cir., Aug. 12, 2020), related to the settlement of a class action involving the high-end Vita-Mix blenders used commercially and by consumers. The plaintiffs, who owned the mixers, claimed that a seal used in the blenders was defective and would wear away with use. The parties settled the case under a two-part structure: Consumers could get either a $70 gift card or a replacement assembly with a revised seal; commercial users would get only the assembly. As the parties were unable to agree to a fee amount, the settlement provided that class counsel would receive a fee to be determined by the district court. As explained below, after two years of litigation, and using a lodestar calculation, the district court awarded $3.9 million in fees ($2.2 million plus a 75% premium), and the defendant appealed. Continue Reading

Something Is Rotten in the State of California? Ride Share Misclassification Ruling Is Merely Act I

“To be or not to be” are the opening words of a soliloquy by Prince Hamlet. With that, I have exhausted what I remember about Shakespearean plays without consulting Wikipedia. Having consulted Wikipedia, I can confirm that this soliloquy occurs in Hamlet, Act III, Scene 1.

A lot happens in Act III and beyond, and if you stopped reading Hamlet after Act I, you’d miss most of the action, including assorted plotting, scheming and mayhem. Continue Reading

Who Is ‘Engaged in Commerce’ Under FAA Section 1? Not Food Delivery Drivers

Certain Grubhub Inc. delivery drivers brought two putative collective and class actions asserting that they were misclassified as independent contractors, resulting in both federal and state wage and hour violations. The drivers – who worked in Chicago, Portland and New York – had signed Delivery Service Provider Agreements that required arbitration but claimed their agreements were exempt from the Federal Arbitration Act (FAA) because they were “workers engaged in foreign or interstate commerce.” The district courts disagreed and compelled arbitration under the FAA.

The Analysis

Now, in a sometimes-colorful August 4th decision, the Seventh Circuit has affirmed both judgments.  Wallace v. Grubhub Holdings, Inc., Nos. 19-1564 and 19-2156 (7th Cir. Aug. 4, 2020).  Judge Amy Coney Barrett, who authored the decision, began her interpretation with the text of § 1 of the FAA which declares:  “nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  9 U.S.C. § 1.  Most relevant to the decision was the residual category “any other class of workers engaged in foreign or interstate commerce” and its “membership”.  Perhaps the most meaningful portion of the decision was that the “operative unit” was a “class of workers” not simply individual workers who claim to have worked in commerce.  So, a worker “whose occupation is not defined by . . . engagement in interstate commerce does not qualify for the exemption . . . .”  And, merely because a worker “occasionally” performs that class of work, is not enough.  Hill v. Rent-A-Center, 398 F. 3d 1286, 1289-90 (11th Cir. 2005). Continue Reading

Arbitrator’s Joke Not Sufficient to Vacate Award in Putative Antitrust Class Action

A poor joke and unsubstantiated hero worship were insufficient to overturn an arbitrator’s award in favor of Travis Kalanick and Uber Technologies Inc., according to U.S. District Judge Jed S. Rakoff. In an Aug. 3 memorandum and order, Rakoff denied the plaintiff’s motion to vacate an arbitration award in the defendants’ favor arising from a putative class action alleging that Uber’s surge pricing model was illegal price-fixing. Meyer v. Kalanick, Case No. 1:15-cv-09796 (S.D. N.Y. Aug. 3, 2020).

The Arbitration Runup

In December 2015, Spencer Meyer filed a putative class action against Uber co-founder Travis Kalanick, claiming that Uber’s pricing model was horizontal price-fixing violative of antitrust law. Once Uber was joined as a necessary party, Kalanick and Uber moved to compel arbitration. Continue Reading

D.C. District Court Refuses to Issue Preliminary Injunction Against Alleged Retaliation in Sex Discrimination Class Action

In the 1991 movie “Silence of the Lambs” and the book on which it was based, FBI trainee Clarice Starling is tasked with working with the now-infamous Hannibal Lector to find a serial killer. That movie won a Best Actress Oscar for Jodie Foster as well as Oscars for Anthony Hopkins and the movie’s scriptwriters and director.

But not every trainee paints the same exciting picture of life as a female FBI agent in training. In Bird v. Barr, Case No. 1:2019cv01581 (D.D.C., July 23, 2020), a group of women FBI trainees claimed that they and others were victims of sex discrimination in the FBI’s basic training program for new agents and intelligence analysts. After the action was filed, one plaintiff and one potential witness in Phoenix alleged that a supervisor had retaliated against them by, among other things, threatening termination, requiring additional documentation for a Family and Medical Leave Act leave, not giving them meaningful assignments or refusing requests to work alternative work schedules. The plaintiffs filed a motion for an order preliminarily enjoining the FBI “from engaging in any retaliation against any plaintiff or witness in this action.” Continue Reading

New Jersey Supreme Court Requires Delivery Drivers to Arbitrate Regardless of FAA Transportation Workers Exemption

As we noted in our June 10, 2019 blog post, many have questioned whether state arbitration laws could be applied when some transportation workers are held to be exempt from the Federal Arbitration Act (FAA) based on Section 1 of that act. This quandary was fueled by New Prime, Inc. v. Oliveira, 139 S. Ct. 532 (2019), and lower court opinions trying to harmonize Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 113, 119 (2001), with the diverse group of workers involved in and around the movement of goods and passengers. See our April 29, 2019; April 3, 2020; and June 1, 2020 blogs detailing the potential tests to determine who might qualify as a transportation worker in interstate commerce. In other words, must they cross state lines, be directly involved in the process, carry goods rather than passengers or be in the actual stream of interstate rather than local commerce? Continue Reading

Ninth Circuit Finds No Right of Contribution or Indemnity Under the FLSA

Joint or single employer liability has gotten a lot of attention in recent years, where a company is held responsible for the employment obligations of a sufficiently interrelated contractor or corporate entity. Our sister blog, the Employment Law Spotlight, has reviewed many of these issues in detail. See, e.g., our January 13, 2020 blog.

But what happens after an entity is found liable for the wage and hour violations of a different employer? Does it have an implied right of contribution or indemnity?

That was the question posed in Scalia v. Employer Solutions Staffing Group, LLC, Case No. 18-16493 (9th Cir. Mar. 2, 2020). As with some other significant cases, we had thought this was an interesting opinion, but with the pandemic hopefully easing we are just now getting to it. Continue Reading

Sixth Circuit Addresses RICO and FLSA Claims

Successful FLSA plaintiffs will likely receive not only the claimed unpaid overtime or minimum wage, but also liquidated (double) damages and payment of their attorney fees. But what if they want . . . more? Will a RICO claim get them additional funds?

That was the question the Sixth Circuit has answered in a pair of cases arising out of a small local pizza chain in western Michigan. In Torres v. Vitale, Case No. 19-1515 (6th Cir. March 31, 2020), and in Collier v. Logiudice, Case No. 19-1829 (6th Cir. June 26, 2020), the plaintiffs worked at one or more of the five “Vitale’s” family-owned pizza restaurants near Grand Rapids. According to the complaints, the company operated essentially two payroll systems. Hours up to 40 per week were recorded and paid through the regular payroll. Hours over 40 were recorded separately by hand and then paid out in cash at regular (not overtime) rates and (apparently) without any tax withholding. Continue Reading

Illinois District Court Decertifies FLSA Collective With 1,600 Opt-Ins

Just before the pandemic triggered closings across the country, we identified an Illinois case as a good candidate for discussion. As the pandemic has eased, we’re taking the time now to address issues relating to the decision as to whether an off-the-clock case that has been conditionally certified should be permitted to remain as a collective action.

In Meadows v. NCR Corporation, Case No. 16 CV 6221 (N.D. Ill. March 4, 2020), the plaintiffs were hourly employees whose duties related to the servicing of ATMs and registers at customer sites. They brought a collective action claiming entitlement to additional overtime, alleging a nationwide policy requiring that they and those like them were forced to work off-the-clock, focusing in particular on travel to customer locations. Continue Reading

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