On January 15, 2019, the Supreme Court issued its decision in New Prime Inc. v. Oliveira, where it decided independent contractor truck drivers cannot be forced into arbitration. The Court’s decision is based on Federal Arbitration Act § 1, which excepts from coverage disputes involving “contracts of employment” with “workers engaged in foreign or interstate commerce.” Continue Reading
On January 1, 2019, California’s Senate Bill No. 1431 went into effect, making a slight, but potentially significant amendment to Civil Code Section 1542. The prior version of the statute read: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” SB 1431 amended Section 1542 to now read: “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” The amended version of the Code adds “releasing party” and “released party” alongside creditor and debtor, respectively, and also changes “must have materially affected” to “would have materially affected” the releasing party’s decision to settle. Continue Reading
On January 8, 2019, the United States Supreme Court issued a unanimous opinion in Henry Schein, Inc. v. Archer & White Sales, Inc. strengthening the enforceability of arbitration “delegation clauses.” These clauses have been previously upheld by the U.S. Supreme Court and allow parties to agree that an arbitrator, rather than a court, will decide the threshold issue of whether a dispute must be arbitrated, as well as the merits of the dispute. The Supreme Court in Henry Schein rejected a doctrine adopted by several federal Circuit Courts of Appeals and the California Court of Appeal, which permitted courts to decline to enforce delegation clauses if the underlying assertion of arbitrability was “wholly groundless.” Under Henry Schein, courts must refer questions of arbitrability to the arbitrator when the parties have agreed to a clear and unmistakable delegation, even if the court believes the claim of arbitrability is frivolous. Continue Reading
On December 10, 2018, a California Appellate Court published its decision in Donohue v. AMN Services, LLC, affirming class-wide summary judgment for the employer. The court’s decision in this wage and hour case presents some interesting take-aways for California employers in that it endorses the lawfulness of widespread timekeeping practices that class action attorneys often seek to challenge as unlawful. Continue Reading
After two years, California courts are finally putting California’s “A Fair Day’s Pay Act” (the “Act”) to the test. While intended to help employees collect judgments against employers that are judgment proof, the Act created potential personal liability for an employer’s owners, directors, officers, and managing agents. Indeed, the Act added Labor Code Section 558.1, which imposes personal liability for certain wage and hour violations. Specifically, Section 558.1 states that “[a]ny employer or person acting on behalf of an employer, who violates, or causes to be violated,” provisions regulating wages or hours, may be held personally liable “as the employer.” Section 558.1 expressly defines “employer or other person acting on behalf of an employer” to include a “natural person who is an owner, director, officer, or managing agent of the employer.” Accordingly, potentially any managing agent who “causes” a wage and hour Labor Code provision to be violated could be held personally liable. While the passing of Section 558.1 caused uproar over the imposition of personal liability for wage and hour violations, the California Court of Appeal recently clarified that even in the absence of this new section, the labor code imposes personal liability. Continue Reading
Directly in line with the U.S. Department of Labor’s Office of Federal Contract Compliance Program’s (OFCCP) new policy emphasis on agency transparency, accountability, efficiency and collaborative resolution, the OFCCP released three new helpful directives on November 30, 2018 concerning the agency’s investigative procedures and avenues for increased communication with federal contractors. The three directives, titled DIR 2019-01 (regarding “Compliance Review Procedures”), DIR 2019-02 (regarding “Early Resolution Procedures”), and DIR 2019-03 (regarding “Opinion Letters and Help Desk”) were issued to “provide guidance to OFCCP staff or federal contractors on enforcement and compliance policy [and] procedures.” While each directive serves its own unique regulatory function, together these directives represent OFCCP’s commitment to consistency in enforcement and cooperation with the federal contractor community. As a whole, they should be viewed as beneficial to contractors aiming to comply with the law, but minimize the “gotcha” approach recently favored by the agency. Continue Reading
Employers in New York City should begin to immediately take steps to ensure compliance with two new local laws that, beginning March 18, 2019, will impose stricter requirements on employers to accommodate nursing mothers. The new bills passed by the New York City Council became law on November 17, 2018, after Mayor Bill de Blasio failed to sign or veto the two pieces of legislation. While the new laws provide employers with a 120-day grace period, employers would be wise to utilize this short time period to understand the new requirements and undertake whatever efforts are necessary to be in compliance when the new requirements take effect this Spring. Continue Reading
On December 10, 2018, the California Supreme Court handed down its unanimous decision in Gerard, et al. v. Orange Coast Memorial Medical Center, affirming the Court of Appeal ruling that voluntary meal period waivers are permissible for healthcare employees who work long shifts, even if they work more than 12 hours. By allowing healthcare employees to waive one of their two meal periods, the Gerard decision preserves a choice for employees who work 12-hour shifts. They continue to have the flexibility to work shifts that span 12 ½ hours with one 30-minute meal period or shifts that span 13 hours and include two 30-minute meal periods.
Sheppard Mullin argued this case before the California Supreme Court and has represented Orange Coast Memorial Medical Center in the case since 2008.
Not only was this case hard fought throughout California courts for 10 years, but it also involved novel legislative action. Notably, it was the only wage-hour victory for an employer before the California Supreme Court in 2018. Continue Reading
On November 20, 2018, the Illinois Supreme Court heard oral arguments in Rosenbach v. Six Flags Entertainment Corp. and Great America LLC to decide whether a technical violation of Illinois’ Biometric Information Privacy Act (BIPA), 740 ILCS 14 et seq., without some additional injury, is enough to give an individual standing to sue under the Act.
As explained in further detail here, BIPA establishes certain notice-and-consent requirements that private entities must follow if they are going to collect, store, and use biometric identifiers and information, such as fingerprints. BIPA also creates a private right of action for individuals who are “aggrieved” by a violation of the act. In recent years, there has been a huge upswing in the number of cases filed under BIPA. The main issue these cases encounter early on is whether a company’s mere technical violation of the notice-and-consent requirements is enough to make a plaintiff “aggrieved,” and therefore have standing to sue, or if additional injury is required.
With the rise of the #MeToo movement, companies have been forced to re-examine how they litigate and settle allegations of sexual harassment in the workplace. Specifically, companies are facing increasing criticism if they compel claims of sexual harassment to private arbitration or force employees who allege sexual harassment to sign settlement agreements with confidentiality clauses, effectively shielding both the company and the alleged sexual harasser from public scrutiny. Continue Reading