On November 22, 2016, a federal court in the Eastern District of Texas issued a preliminary injunction blocking the Department of Labor from enforcing new regulations that would have drastically reduced the number of white collar employees who are exempt from overtime. The disputed regulations were set to take effect on December 1.
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Unpersuasive: Federal Judge Invalidates DOL’s New Persuader Rule
On November 16, 2016, a federal district judge in Texas barred the Department of Labor (“DOL”) from enforcing its new so-called “Persuader Rule.” The rule, which would have imposed broad disclosure requirements on employers responding to union-organizing campaigns, has been mired in controversy since it was proposed in 2011. In April 2016, Sheppard Mullin wrote about the changes the final rule would have made; in June, we covered a proposed carve-out for legacy agreements between employers and third-party advisors.
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DOL Makes Last-Minute Tweaks to New Overtime Exemption Rules
In March 2014, President Obama signed an executive order directing the Department of Labor to revise its aging rules governing overtime pay for white collar employees. The Department solicited comments from the public on an earlier draft in July 2015. Yesterday, the Department of Labor released the final version of the new rules. The new version includes a number of changes—some expected, but others less so.
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California Supreme Court: Arbitration Agreement Restating Existing Law Is Not Unconscionable
On March 28, 2016, the California Supreme Court handed down a long-awaited opinion in Baltazar v. Forever 21. Baltazar’s most important holding is that an arbitration agreement is not unconscionable merely because it restates existing law. This ruling resolves a disagreement between state appellate courts that probably should never have arisen in the first place.
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You May Want To Reconsider Your Position – EEOC Announces New Procedure to Handle Administrative Charges Against Employers
The Equal Employment Opportunity Commission (“EEOC”) recently announced new nationwide changes to the procedures relating to its investigation of administrative charges filed against employers. When an individual files a charge against an employer, the EEOC may ask the employer to submit a position statement responding to the allegations, typically within 30 days. Under the old system, the procedure for handling these position statements varied based on the local practices of each EEOC District Office. The new system establishes a uniform nationwide procedure for all requests for position statements made on or after January 1, 2016.
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Ninth Circuit Limits Tip Pooling to Customarily Tipped Employees
In a decision with important implications for employers throughout the service industry, the federal Ninth Circuit Court of Appeals ruled on February 23 that employers cannot implement policies requiring tipped employees to share their tips with untipped employees. The 2-1 decision in Oregon Restaurant & Lodging Assoc. v. Perez, — F.3d –, No. 13-25765 (9th Cir. Feb. 23, 2016) (“Oregon Restaurant”) upheld a regulation issued by the federal Department of Labor (“DOL”) in 2011 and reversed trial court decisions to the contrary from Oregon and Nevada.
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California Supreme Court Makes It Harder For Prevailing FEHA Defendants To Recover Their Costs
Under section 1032(b) of the California Code of Civil Procedure, “a prevailing party is entitled as a matter of right to recover costs in any action or proceeding” unless some statute expressly says otherwise. It has been California’s rule for over a decade that this provision allowed victorious defendants in cases under the Fair Employment and Housing Act (“FEHA”) to recover their costs of suit as a matter of right. However, on May 4, 2015, the California Supreme Court issued its decision in Williams v. Chino Valley Independent Fire District, holding that the default rule of section 1032(b) is preempted by Government Code section 12965(b), a subsection of the FEHA that places the decision to award costs within the discretion of the trial court.
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Uber, Lyft Decisions Highlight Difficulty of Classifying Workers in the Modern Economy
“The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing . . . 21st Century problem[s].” So concluded the court in Cotter v. Lyft, Inc., one of two opinions handed down by the U.S. District Court for the Northern District of California on March 11, 2015, that highlight a growing problem in employee misclassification law.
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