Labor & Employment

NLRB’s General Counsel’s Office Releases Seven New Advice Memos

By Jonathan Turner

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On July 13, 2018, the National Labor Relations Board (NLRB) released seven new memos from its Division of Advice, which is part of the NLRB’s Office of the General Counsel.  The memos resulted from requests for guidance by various NLRB Regional Directors on cases their offices were handling.  The General Counsel’s office can release advice memos to the general public at its discretion after a case has been closed.  The earliest of the seven memos was issued in 2014 and the latest is dated June 14, 2018.  (more…)

Employers Cannot Rely on the De Minimis Doctrine to Avoid Paying Small Amounts of Regularly Occurring Off-the-Clock Work

By Emma Luevano

The de minimis doctrine, which states that the law does not concern itself with “trifles,” has been applied by federal courts to excuse the payment of wages for small amounts of otherwise compensable time upon a showing that the bits of time are administratively difficult to record.  On Thursday, July 26, 2018, the California Supreme Court ruled that this doctrine does not apply when the otherwise compensable time occurs regularly.  According to the Supreme Court, the advent of modern technology in recording time makes reliance on the de minimis rule nearly unnecessary.  The Supreme Court, however, left for another day whether the de minimis doctrine can excuse an employer from paying for compensable time which does not occur regularly.

In Troester v. Starbucks Corp., a Starbucks employee claimed that, after clocking out, he was required to perform tasks such as transmitting sales data, setting alarms, and sometimes bringing in patio furniture or walking coworkers to their cars, which took an additional 4 to 10 minutes of time per day.  A federal judge dismissed the case, finding that it would be impractical to require Starbucks to record the brief amounts of time employees spent doing work tasks before leaving their stores.  The plaintiff appealed, and the Ninth Circuit Court of Appeals asked the California Supreme Court to decide whether the de minimis rule applies to claims for unpaid wages brought under California Labor Code Sections 510 (providing for overtime pay), 1194 (setting forth a private right of action for minimum wage and overtime violations), and 1197 (providing for minimum wage).  In Thursday’s ruling, the Supreme Court addressed the question in two parts.  (more…)

NLRB General Counsel Issues Pro-Employer Guidance Regarding Workplace Rules

By Erica Parks

On June 6, the National Labor Relations Board’s (NLRB) Office of the General Counsel issued Memorandum 18-04, titled “Guidance on Handbook Rules Post-Boeing.”  In it, the NLRB’s General Counsel (GC), provided guidance to the NLRB’s regional offices regarding how to analyze the legality of common employer policies in light of the NLRB’s decision in The Boeing Company, 365 NLRB No. 154 (December 14, 2017).  The Boeing decision and the GC’s memo represent a pro-employer shift away from the NLRB’s decidedly more pro-employee positions during the Obama administration.


California Court of Appeal Provides New Guidance on Meaning of “To Employ” Workers

By Samantha Becker

Recently, in Curry v. Equilon Enterprises LLC, the California Court of Appeal ruled that a wage and hour class action against Shell Oil could not proceed because the service station manager bringing the suit was not a Shell employee.  Rather, the manager was employed by ARS, the company that contracted with Shell to operate the station.

Similar to a franchisor-franchisee relationship, ARS had a contract with Shell to operate multiple gas stations.  The plaintiff managed two locations.  She was hired by ARS, trained by ARS employees, reported to ARS employees, and supervised ARS employees.  ARS paid plaintiff and made all disciplinary and promotional decisions regarding her employment.  Plaintiff brought a class-action suit against ARS and Shell, claiming she and other managers were misclassified as exempt employees, denied overtime pay and denied meal and rest breaks. The plaintiff also claimed that ARS and Shell were joint employers. (more…)

California Courts of Appeal Pave the Way for More PAGA Claims

By Brett Thomas

The California Court of Appeal recently issued two employee-friendly rulings regarding the California Private Attorneys General Act (PAGA), which further expand PAGA’s reach.  PAGA is part of the California Labor Code and authorizes individuals to bring representative actions against employers to recover civil penalties for violations of the California Labor Code.

In the first, Huff v. Securitas Security Services USA, Inc., a California Court of Appeal addressed the issue of whether a plaintiff who brings a PAGA representative action may seek penalties not only for the Labor Code violation that affected him or her, but also for different Labor Code violations that affected other employees.  The Court held that PAGA allows a plaintiff to pursue penalties for all the Labor Code violations committed by that employer that affected any employee, provided that the plaintiff must have been affected by at least one Labor Code violation.  In other words, a plaintiff who brings a representative action under PAGA may seek penalties for violations that he or she did not even suffer.  (more…)

U.S. Supreme Court Rules That Class Action Waivers in Employment Arbitration Agreements Are Enforceable

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By Stephen Rossi

Last week, in an important win for employers, the U.S. Supreme Court resolved a circuit-split on whether class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA), holding that they are.

The Court decided three cases, Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc., and answered the question of whether class or collective action waivers contained in employment arbitration agreements violate the National Labor Relations Act (NLRA).  In 2012, the National Labor Relations Board (NLRB) ruled that employers violate the NLRA when they require employees, as a condition of employment, to agree to arbitration provisions containing class or collective action waivers, or clauses stating that employees must arbitrate any employment-related claims on an individual basis only (rather than on behalf of a class of other employees).  The U.S. Courts of Appeals for the Second, Fifth, and Eighth Circuits did not follow the NLRB’s ruling. The U.S. Courts of Appeals for the Seventh and Ninth Circuits reached the opposite result.

In a 5-4 decision, the U.S. Supreme Court held that neither the FAA nor NLRA prohibit class and collective action waivers in employment arbitration agreements.  The Court’s majority opinion, written by Justice Neil Gorsuch, first ruled that the “savings clause” in the FAA, which allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract,” applies only to general contract defenses (such as fraud, duress, or unconscionability).  It does not apply to defenses that specifically target arbitration, “either by name or by more subtle methods.”  The Court next held that class and collective actions are not “concerted activities” protected by Section 7 of the NLRA and that, for a variety of reasons, the NLRA does not trump the FAA in this instance.  Finally, the Court ruled that the NLRB’s decision was not entitled to the usual deference given to an administrative agency’s statutory interpretation because the decision interpreted the NLRA in a way that limited the FAA, which is not “administered” by the NLRB.  Justice Ginsburg authored a dissent joined by three other Justices.

The decision is a victory for employers, particularly those who already have such arbitration agreements in place.  Employers who do not have class or collective action waivers in their arbitration agreements should strongly consider adding them after consulting with qualified counsel.

New York City & State Implement Stronger Protections Against Workplace Harassment

New York City Dawn

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By Greg Hessinger

As states begin to focus heightened attention on sexual harassment in the workplace in the wake of the #MeToo movement, New York State (“NY State”) and New York City (“NYC”) have implemented stronger protections for employees against workplace harassment. The new requirements, which have been passed into law in NY State and NYC, will impact employers’ training, policies & procedures, and employment agreements for New York employees.

New York State: (more…)

Courts Rule on Salary History Bans

By Erica Parks

Last week, the United States District Court for the Eastern District of Pennsylvania partially enjoined an ordinance adopted by the Philadelphia City Council which banned employers from making salary history inquiries.  The court held that the portion of the ordinance prohibiting employers from asking about an applicant’s previous salary violates the First Amendment.  It also held that the portion of the law barring employers from relying on past salary is allowed.

The Eastern District of Pennsylvania’s ruling came on the heels of a decision by an 11-judge en banc panel of the U.S. Court of Appeals for the Ninth Circuit in Rizo v. Yovino, in which the Court ruled unanimously that prior salary history cannot be used at all, even in combination with other factors, to justify paying women less than men under the federal Equal Pay Act (“EPA”). The EPA prohibits employers from paying male and female employees a different wage for substantially equal work unless the employer can demonstrate that any pay differential is based on a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or “any other factor other than sex.” 29 U.S.C. § 206(d)(1) (emphasis added). (more…)

California Supreme Court Adopts “ABC” Test As Standard To Determine Independent Contractor Status Under the Wage Orders

By Tony Amendola and Samantha Becker

In Dynamex Operations West, Inc. v. Superior Court, the California Supreme Court issued a unanimous decision adopting a new standard for determining whether a California worker is an employee or independent contractor under the wage orders adopted by California’s Industrial Welfare Commission. In adopting the new standard, the Court noted that, under the wage orders, “employ” has three alternative definitions: “(a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship.” Of these, the broadest definition is “to suffer or permit” to work. As the Court stated:

“We conclude that in determining whether, under the suffer or permit to work definition, a worker is properly considered the type of independent contractor to whom the wage order does not apply, it is appropriate to look to a standard, commonly referred to as the ‘ABC’ test, that is utilized in other jurisdictions in a variety of contexts to distinguish employees from independent contractors. Under this test, a worker is properly considered an independent contractor to whom a wage order does not apply only if the hiring entity establishes: (A) that the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact; (B) that the worker performs work that is outside the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.” (more…)

Free Speech Issues

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The following was written collectively by our Labor & Employment Department.

A. Anti-SLAPP (Strategic Litigation Against Public Policy)Law, Code of Civil Procedure § 425.16

1. Anti-SLAPP Statute Does Not Provide a Safe-Harbor Against Employee FEHA Lawsuits, Even if the Claims Arise Partially from Employer’s Protected Conduct

In Nam v. Regents of the University of California, 1 Cal.App.5th 1176, 1193 (2016), a resident in the anesthesiology department at UC Davis Medical Center brought a lawsuit claiming sexual harassment and retaliation against her employer. The resident accused her residency program director of sexual harassment, alleging that after she rebuffed his advances, he retaliated against her by, among other things, issuing an unwarranted disciplinary letter and placing her on investigatory leave. The resident further alleged that she was retaliated against because she complained about the clinical behavior of another doctor and serious patient care and safety issues. (more…)