In a welcome departure from its recent practice, the U.S. Department of Labor’s Wage and Hour Division (WHD) recently issued its first new opinion letters in almost ten years. In addition to issuing three new opinion letters earlier this month, on January 5, 2018, WHD reissued seventeen opinion letters previously withdrawn under the Obama administration.

The resurrection of this practice offers employers a useful tool to ensure compliance with federal employment laws. Prior to the Obama administration, the WHD had a longstanding practice of issuing opinion letters in response to inquiries from employers concerning the application of the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA) and other laws enforced by the WHD. These letters have traditionally provided guidance to both employers and employees concerning compliance with the laws and regulations under WHD’s purview. Significantly, for employers, good faith reliance upon WHD’s opinion letters can provide a defense to potential claims of a violation of the FLSA or other laws under the WHD’s jurisdiction.
Continue Reading Department of Labor Offers Employers Clarity By Resuming Its Practice of Issuing Opinion Letters

Last week, the ridesharing giant, Uber, secured a resounding legal win when a federal judge dismissed a putative class action lawsuit alleging the company violated the Fair Labor Standards Act by failing to pay drivers overtime. The ruling is enormously important, not simply for Uber, but for the growing rideshare technology industry as a whole.

Less than a decade ago, outside of calling a cab company and hoping for the best, the notion of reliably getting from ‘here to there’ via a few button presses on a cell phone was unthinkable. Things have changed. Uber—the now-ubiquitous application that allows patrons to hail various styles of ride—has wholly disrupted the transportation service industry. According to the latest estimates, over 160 thousand Uber drivers dot the roads. Those drivers provide approximately 40 million rides each month, and the company’s 2017 valuation reached $69 billion. The term “Uber” has become a verb (e.g., “I’ll Uber there”) analogous to “just Google it” or “xerox the document.”

Continue Reading Uber Drivers’ Class Action Lawsuit Hits Permanent Red Light

Following a growing nationwide trend, the Chicago City Council is considering new legislation that would require employers to pay employees for any scheduling changes made with less than two weeks’ notice.  If passed, the Chicago Fair Workweek Ordinance will go into effect on July 1, 2018, and the city will join the likes of San Francisco, Emeryville, Seattle, and New York, as well as the state of Oregon, which have passed similar laws targeted at giving employees more predictable work schedules.
Continue Reading Chicago Considering Predictive Scheduling: What Employers Need to Know

Beginning January 1, 2018, the new California minimum wage rate for employers with 26 or more employees will be $11.00 per hour and the new California minimum wage rate for employers with 25 or fewer employees will be $10.50 per hour.

As we previously reported, effective January 1, 2017, the California state minimum wage began increasing yearly through January 1, 2022 for employers employing 26 or more employees. Effective January 1, 2018, the California state minimum wage will begin increasing yearly through January 1, 2023 for employers employing 25 or fewer employees.
Continue Reading New Year, New Minimum Wage Rates in California

Last month, the Sixth Circuit revived a lawsuit brought under the Fair Labor Standards Act (“FLSA”) alleging that a retailer’s commission policy was unlawful in Stein v. hhgregg, Inc., 2017 U.S. App. LEXIS 19908 (6th Cir. Ohio Oct. 12, 2017). The decision provides support for the legality of taking a draw on an employee’s future commissions, and highlights the problem with having a policy that requires repayment of draws upon termination.
Continue Reading Sixth Circuit Provides Clarification On Legality Of Draw-On-Commission Policy

Over the past few years, one of the biggest trends in employment law has been the proliferation of local ordinances imposing workplace standards beyond those mandated by state and federal laws. While many state governments have moved to preempt such regulations, California’s legislature has openly encouraged them, particularly in the wage and hour context. Unsurprisingly, California cities have passed a flurry of new workplace ordinances in recent years. Three new developments are worth noting for employers with employees working or living in the San Francisco Bay Area.
Continue Reading Bay Area Local Law Update: Emeryville’s “Fair Workweek Ordinance”; San Francisco Bans Salary History Inquiries; And Additional Accommodations For Lactating Employees

The Court’s opinion in Scott v. Chipotle Mexican Grill demonstrates how employers can successfully combat class action claims that employees were misclassified as exempt. The successful defense of the class certification motion relied chiefly on deposition and declaration testimony to highlight inconsistencies, variations, and individualized inquiries that prevented resolution of the claims at issue on a class-wide basis.
Continue Reading Sheppard Mullin Secures Major Victory for Chipotle in Nationwide Misclassification Action By Demonstrating Variations Among Proposed Class Members

The ability of hospitals to use meal period waivers was called into question by a 2015 Court of Appeal decision in Gerard v. Orange Coast Memorial Medical Center (Gerard I), which held that the provision in Wage Order 5 allowing waivers even when employees work over 12 hours was invalid.  Following two more years of litigation, we can now inform you that the three-member panel that reached the 2015 decision in Gerard I, reversed itself on March 1, 2017 in Gerard II.  In its new opinion, the Court of Appeal adopted Sheppard Mullin’s argument and confirmed that the special meal period rules for health care employees in Wage Order 5 are, in fact, valid.
Continue Reading California Court of Appeal Affirms Validity of Hospital Meal Period Waivers

On January 13, 2017, the United States Supreme Court consolidated and granted review of the three following cases involving the legality of arbitration agreements which contain class action waivers:  National Labor Relations Board v. Murphy Oil USA, Inc., from the 5th Circuit, Epic Systems Corp. v. Lewis, from the 7th Circuit, and Ernst & Young LLP v. Morris, from the 9th Circuit.

The NLRB, most notably with its 2012 decision in D.R. Horton, has routinely held that arbitration agreements containing class action waivers violate employees’ rights under the National Labor Relations Act (“NLRA”).  The courts, however, have taken a variety of stances on the issue, and these three cases present the Supreme Court with an opportunity to resolve an issue that has divided the Circuits.


Continue Reading U.S. Supreme Court to Decide Class Action Waiver Divide

On December 22, 2016, the California Supreme Court issued a critical decision in Augustus v. ABM Security Services, Inc., 2016 D.J. 12608 (2016), relating to California’s rest period obligations.  The California Supreme Court declared that state law prohibits on-duty and on-call rest periods.  It stated that employers must (1) relieve their employees of all duties during rest periods and (2) relinquish any control over how employees spend their break time.  However, the decision did not end there.  The California Supreme Court examined a number of related considerations, including the practical limitations created by a ten-minute rest period, policies that place restrictions on employees during rest periods, the circumstances under which premium payments may be due for missed rest periods, and the possibility of rescheduling or restarting rest periods when they cannot be provided or are interrupted.
Continue Reading Supreme Court Holds That Rest Periods Must Be Free From Duties And Employer Control