Kullman Firm Newsletter

Supreme Court Hands Employers Big Win in Arbitration Class Action Waiver of Wage and Hour Claims

The Majority Opinion.

On May 21, 2018, the Supreme Court in a 5-4 decision authored by its newest member, Justice Neil Gorsuch, held that employers can compel employees to pursue wage and hour claims through individual arbitration agreements, thus preventing employees from filing wage and hour class action claims against employers.  Joining Justice Gorsuch were Chief Justice John Roberts and Justices Clarence Thomas, Anthony Kennedy and Samuel Alito.

The case, Epic Systems Corp. v. Lewis, a case originating from the Seventh Circuit, was issued in tandem with two other actions from the Ninth and Fifth Circuits respectively.  In Epic Systems Corp., a technical writer claimed he along with other technical writers were misclassified under the Fair Labor Standards Act (FLSA), thus making them ineligible for overtime.  In Ernst & Young LLP et al v. Morris, et al, the employer was also alleged to have misclassified employees under the FLSA, again resulting in the employees being denied overtime.  The final case, National Labor Relations Board v. Murphy Oil USA, Inc., et al, related to the NLRB’s decision that the employer engaged in an unfair labor practice under the National Labor Relations Act (NLRA) by refusing to permit four gas station employees alleging they were underpaid from pursuing their claims together.  The common thread in each case – the employees all signed arbitration agreements which prevented them from bringing such claims on a class basis.

The majority primarily relied on the failure of the NLRA to include language that overcame the 1925 Federal Arbitration Act, which requires “arbitration agreements like those before us must be enforced as written,” while the NLRA focuses on the rights of employees to organize and bargain collectively.  According to the majority opinion, the NLRA “may permit unions to bargain to prohibit arbitration. But it does not express approval or disapproval of arbitration. It does not mention class or collective action procedures. It does not even hint at a wish to displace the Arbitration Act.”

The Minority Opinion.

Writing for the dissenting minority was Justice Ginsberg, who authored and read a scathing opinion denouncing the majority’s opinion as “egregiously wrong.”  Ginsberg’s opinion, joined by Justices Breyer, Sotomayor and Kagan, stated the Epic Systems Corp. decision “holds enforceable these arm-twisted, take-it-or-leave-it contracts — including the provisions requiring employees to litigate wage and hours claims only one-by-one. Federal labor law does not countenance such isolation of employees.” Interestingly, much like the majority opinion, the minority relied heavily on the history of the NLRA and the ability of employees to work collectively to join unions and bargain collectively, yet the two sides reached opposite conclusions.

Missed the Deadline for Filing the 2017 EEO-1 Survey?  EEOC Has Extended Deadline.

You are in luck if you missed the March 31, 2018 deadline for filing a 2017 EEO-1 Survey.  Private employers with 100 or more employees and federal contractors with 50 or more employees and $50,000 in federal contracts are required to file this annual report.

The U.S. Equal Employment Opportunity Commission’s EEO-1 Joint Reporting Committee extended the filing deadline to Friday, June 1, 2018.  This is a vast change as in previous years, EEO-1 Reports were required to be filed by September 30 of the current year, i.e., originally the 2017 EEO-1 Reports had a filing deadline of September 30, 2017.

Over the last several years, the EEOC and OFCCP proposed requiring covered employers to not only provide information on job category, race, ethnicity and gender, but additionally pay information for such employee groups.  On August 29, 2017, however, the Office of Management and Budget stayed the requirement for including pay data and ultimately set a new deadline of March 31, 2018 for covered employers to file their 2017 EEO-1 Reports.  Ultimately the deadline was extended to Friday, June 1, 2018.  Due to these changes, the 2017 EEO-1 Report should include information collected from the fourth quarter of calendar year 2017.

May is Older Americans Month

Last December was the 50th Anniversary of the Age Discrimination in Employment Act.  In a May 2018 statement, EEOC Acting Chair Victoria A. Lipnic reminded the public that May is Older Americans Month and that claims under the Age Discrimination Act are still regularly filed and that the EEOC continues to fight age discrimination.  Indeed, just this month, the EEOC obtained a $2.85 million dollar settlement against a chain restaurant where workers over 40 were allegedly not allowed to work in the “front-of-the-house” where customers were present.  According to the Acting Chair’s statement, some applicants were told by ill-trained managers, “We are really looking for someone younger.”

This is a good reminder of the importance of training supervisors and managers that stray remarks may lead to great liability.

Moonlighting Ban May Be Unlawful under the NLRA

While it seems the NLRB under the Trump Administration has been a bit more lenient on employers, an NLRB Administrative Law Judge ruled this month that an employer’s ban on moonlighting without permission from a company executive was a violation of the NLRA.  Conceding some of the employer’s explanations for its moonlighting ban were legitimate – such as wanting employees not to work for the competition and to be well-rested while at work, the Administrative Law Judge found the employer’s legitimate reasons were outweighed by the possibility that such a such a ban could interfere with employees’ ability to organize a union or work for a unionized employer.

It will be interesting to see what happens with this decision once the matter reaches the actual Board.  Many employers maintain such policies, including bans on moonlighting while on a leave of absence.

The Department of Labor is Busy

The Department of Labor’s regulatory agenda currently features four large wage and hour projects and the release of new FMLA forms.

The DOL plans on releasing four new proposed rules in the coming year:

  • Tip Regulations Under the FLSA (anticipated August 2018)
  • Regular Rate under the FLSA (anticipated September 2018)
  • Expanding Apprenticeship and Employment Opportunities for 16 and 17-Year Olds under the FLSA (Anticipated October 2018)
  • Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees (January 2019)

Additionally the current DOL model forms for the Family and Medical Leave Act are set to expire at the end of this month.

Keep in mind that all of these dates are tentative, but we will keep you up to date on the progress.