Characterizing its own precedent as “inconsistent” and “confusing,” the Third Circuit Court of Appeals, in a published opinion earlier this month, undertook to “clarify” the “correct standard” for establishing a hostile work environment claim under federal anti-discrimination law (in particular, Title VII). Castleberry v. STI Group, No. 16-3131. To state such a claim, plaintiffs must show that the harassment they experienced was either “severe” or “pervasive”—they need not plead or prove that it is both. Following Castleberry, employers in the Third Circuit may face greater challenges in defeating hostile work environment claims on summary judgment.
Employers in the gaming and hospitality arena are eagerly awaiting the results of the upcoming changes to the legal landscape that are expected to emerge from a business-oriented administration. These employers have long tried to reduce the costs and length of litigation, particularly in the context of wage and hour claims, by requiring employees to arbitrate work-related disputes on a bilateral, rather than collective or class-wide, basis.
The Trump administration has already begun to change course regarding the legality of class action waivers, which is affecting employers in dozens of cases. In a rather expected move, the Department of Justice now says it no longer believes that class action waivers in arbitration agreements infringe upon workers’ Section 7 rights under the National Labor Relations Act (NLRA). On June 16, the Department of Justice filed an amicus brief with the Supreme Court in NLRB v. Murphy Oil USA, Inc., which oral arguments on this issue are scheduled for October. The DOJ’s brief argues that, “Nothing in the NLRA’s legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue here…And while the National Labor Relations Board’s (“NLRB” or “Board”) reading of ambiguous NLRA language is entitled to judicial deference, the Board’s analysis of the interplay between the NLRA and the FAA is not.” The DOJ acknowledges that it previously filed a petition for a writ of certiorari on behalf of the NLRB, but that after the change in administration, it reconsidered the issue and has reached the opposite conclusion.
The saga started in January 2012 with the controversial ruling in D.R. Horton, Inc., in which the Board ruled that agreements between an employer and its individual employees interfere with the employees’ right to engage in concerted activities if the agreements require arbitration of work-related disputes on a bilateral rather than collective or class wide basis. This issue has created a split among the circuit courts. On review, the Fifth Circuit rejected the Board’s D.R. Horton analysis and held that enforcement of the challenged arbitration agreement would not deny a party any statutory right because the use of class action procedures is not a substantive right under the NLRA. The Seventh and Ninth Circuits have disagreed. In Epic Systems Corporations v. Jacob Lewis, the Seventh Circuit affirmed a district court’s ruling that an arbitration agreement requiring employees to waive the right to participate in a class proceeding was invalid and unenforceable under the NLRA. In a similar case, the Ninth Circuit reversed a district court’s order granting an employer’s motion to compel bilateral arbitration. The Ninth Circuit held that the NLRA gives employees a “right to pursue work-related legal claims together” and that the employer had violated that right by requiring employees to resolve their legal claims in separate arbitration proceedings. Most recently, the NLRB’s General Counsel reaffirmed the Board’s prior decision in D.R. Horton, Inc., notwithstanding the Fifth Circuit’s ruling rejecting that decision, by issuing a complaint against Murphy Oil USA, Inc. for requiring its employees to waive their rights to commence or participate in a class action.
In October, the Supreme Court will address this split among the circuits and hear Murphy Oil, Epic Systems, and the Ninth Circuit case. Notably, on June 16, the NLRB announced that the Acting Solicitor General of the United States has authorized the NLRB to represent itself at the hearing. The General Counsel’s office, headed up by Richard F. Griffin, Jr. until his term ends in November, will represent the Board. It is unclear whether the DOJ will face off with the General Counsel, given its new take on this issue.
It is currently unclear how the U.S. Supreme Court will decide this issue in October, or what effect the Department of Justice’s new position will have on its ultimate ruling. Either way, it is likely that employers will soon have new guidance on whether class waivers in arbitration agreements infringe upon workers’ Section 7 rights. Shortly after the hearing, President Trump is expected to nominate a new General Counsel whose views will certainly align with the business-friendly Trump administration. While we wait for the Supreme Court’s ruling and at least until Griffin’s term ends, employers should continue to consult counsel when considering including class waivers in their arbitration agreements.
On Monday, June 26, 2017, the U.S. Supreme Court agreed to review whether the Dodd-Frank Act (DFA) prohibits retaliation against internal whistleblowers or only covers individuals who report to the U.S. Securities and Exchange Commission (the SEC).
This question has divided practitioners and lower courts alike since Dodd-Frank’s passage in 2010. As reported in our previous Alert on March 29, 2017, the Ninth Circuit Court of Appeals widened the circuit split on this question in Somers v. Digital Realty Trust Inc., 850 F.3d. 1045 (9th Cir., March 8, 2017), when it affirmed the district court’s denial of the defendant’s motion to dismiss a DFA whistleblower claim, where the whistleblower had only reported internally.
In Somers, plaintiff alleged that he was terminated based on “vague, trivial and false allegations of misconduct” after he complained to senior management that a senior vice president had allegedly eliminated some internal corporate controls in violation of SOX. The district court denied Digital Realty’s motion to dismiss the DFA claim, but certified the issue for interlocutory appeal. In a divided 2-1 decision, the Ninth Circuit panel followed a previous Second Circuit decision and concluded that the DFA’s reference to certain provisions of the Sarbanes Oxley Act (SOX) “necessarily bars retaliation against an employee of a public company who reports violations to the boss, i.e., one who ‘provide[s] information’ regarding a securities law violation to a ‘person with supervisory authority of the employee.’” Somers, 850 F.3d. at 1049.
Greenberg Traurig’s Peter Zinober, Laura Foote Reiff, Charles S. Birenbaum, James N. Boudreau, David Long-Daniels, Jonathan L. Sulds, Terence P. McCourt, Todd D. Wozniak, and Kate Kalmykov were recently recognized by Human Resource Executive, in a report researched by the Lawdragon organization for their work in employment and traditional labor law.
In 2014, Peter W. Zinober was named to the “Hall of Fame,” the publication’s most coveted honor. For the seventh consecutive year, the “Nation’s 20 Most Powerful Employment Attorneys – Immigration” list includes Laura Foote Reiff. Since 2013, the “Nation’s 100 Most Powerful Employment Attorneys” list includes Charles S. Birenbaum and James N. Boudreau, and, this year, David Long-Daniels and Jonathan L. Sulds were also included. Terence P. McCourt was recognized among the “Nation’s 20 Most Powerful Employment Attorneys – Labor” for the second consecutive year. Todd D. Wozniak appears again on the publication’s list of the “Nation’s 40 Most Powerful Employment Attorneys – Up-and-Comers” and Kate Kalmykov makes her first appearance.
To read the full press release, click here.
Four attorneys from global law firm Greenberg Traurig, LLP have been recognized in Who’s Who Legal: Labour, Employment & Benefits Guide 2017. Featured in the guide are:
Labor & Employment
- Peter W. Zinober, who specializes in the defense of employment discrimination cases in state and federal court, both jury and non-jury, as well as wage and hour, disability discrimination, Sarbanes-Oxley, Dodd-Frank, and other whistleblower defense, age, and all other types of employment litigation. Zinober is a shareholder in the firm’s Tampa and Orlando offices.
- Robert M. Goldich, who has more than 35 years of experience as a labor and employment lawyer and litigator representing employers in all aspects of labor and employee relations, including general employment counseling, employment contract negotiation, collective bargaining negotiations, labor arbitration, and the representation of employers in administrative and courtroom litigation. Goldich is a shareholder in the firm’s Philadelphia and Phoenix offices.
- Jordan W. Cowman, who handles diverse employment matters, including employment discrimination and wrongful termination cases, wage and hour compliance, labor arbitration cases, non-competition cases, and internal corporate investigations. Cowman is a shareholder in the firm’s Dallas and Houston offices.
A Sixth Circuit opinion filed this week reaffirms what experienced Fair Labor Standards Act (FLSA) attorneys have known for some time: when it comes to employer arbitration programs, they are not always the panacea that employers (and their lawyers) believe them to be. In Taylor v. Pilot Corp. et al., Case No. 16-5326, a plaintiff-employee filed a FLSA collective action against her employer. As is typical, she promptly asked the court to authorize the sending of notice of the lawsuit to other “similarly situated” employees, asking if they wanted to participate, or “opt in,” to the lawsuit. The defendant employer opposed, arguing in part that numerous putative collective action members were party to arbitration agreements that prevented them from participating in class, collective, or group actions. The district court nevertheless authorized sending the notice – including to those employees who had agreed to arbitrate any disputes they had with the defendant on an individual basis. The Sixth Circuit declined to disturb the district court’s decision to send notice to employees with individual arbitration agreements, holding that it lacked jurisdiction to do so because conditional certification decisions under the FLSA, unlike class certification decisions under Rule 23, are not subject to interlocutory appeal. The net effect is a ruling that arguably shifts the court’s role, tacitly authorizing broad notice programs in FLSA collective actions to include employees who admittedly may not be able to participate in the litigation due to an agreement to arbitrate.
On July 1, 2017, Arizona’s new sick leave law goes into effect and employers with even one employee in Arizona may need assistance to navigate the new laws and to review and revise policies, practices, and recordkeeping to comply. As a mere start, there are seven key aspects of this new law that Arizona employers should know:
1. How much earned paid sick leave must be provided by an employer?
For employers with 15 or more employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but employees are not entitled to accrue or use more than 40 hours of earned paid sick time per year, unless the employer selects a higher limit.
For employers with fewer than 15 employees: Employees must accrue a minimum of one hour of earned paid sick time for every 30 hours worked, but they are not entitled to accrue or use more than 24 hours of earned paid sick time per year, unless the employer sets a higher limit.
On June 7, 2017, the United States Department of Labor (DOL) reversed its previous guidance issued during the administration of President Barack Obama that broadened the circumstances in which employers could be held liable for misclassification of employees as independent contractors, and as a joint employer with a separate business. New Secretary of Labor Alex Acosta announced that the DOL was withdrawing two letters: (1) a 2015 letter that encouraged scrutiny of employer-independent contractor relationship pursuant to the “economic realities test;” and (2) a separate 2016 letter that interpreted joint employment under the Fair Labor Standards Act (FLSA) with a separate entity as occurring, so long as both employers exercised “indirect” control over the worker. Although the letters were never legally binding, they served as a blueprint for how the DOL enforced federal laws and represented persuasive authority to courts.
The Defend Trade Secrets Act (DTSA) celebrates its one-year anniversary on May 11, 2017. The DTSA is the most significant expansion of intellectual property law since the Lanham Act was passed in the 1940s. Approximately 70 cases were filed in California federal courts asserting DTSA claims in the past year; but, after one year of litigation, it is still too early to tell how much impact the DTSA has made on trade secret law in California. Nevertheless, even a one year anniversary is worth marking.
The Differences Between the California Uniform Trade Secret Act and the DTSA
The DTSA automatically bestows federal jurisdiction on trade secret claims, allowing DTSA claims to be brought exclusively in federal court. Although trade secret theft has been a federal crime since 1996, prior to the passage of the DTSA, civil claims for trade secret misappropriation were typically governed by state law. The California Uniform Trade Secret Law (CUTSA) cannot be brought in federal court, absent a showing of diversity or concurrent jurisdiction under another claim arising from the same transaction or occurrence as the CUTSA claim. CUTSA also broadly preempts common law claims based on the same nucleus of facts as the trade secrets claim, however the claim is characterized, such as breach of fiduciary duty, breach of loyalty, conversion, fraud, interference with contract, or unfair competition. In contrast, the DTSA does not preempt any provisions of law, including state trade secret laws, such that a plaintiff filing suit in California can bring both a DTSA and CUTSA claim in federal court. The plaintiff must weigh, in bringing both, whether it wants to allege a CUTSA violation and thereby bar the assertion of related state law tort and restitution claims. Notably, a DTSA claim cannot be brought in state court. Finally, because there are many parallels between the CUTSA and DTSA, federal courts can be expected to consider CUTSA precedent and, longer-term, California courts will likewise consider DTSA decisions.
On May 4, 2017, New York City amended its Human Rights Law (NYCHRL) to join the growing number of municipalities that prohibit employers from inquiring about applicants’ wage history. Ostensibly designed to “help break the cycle of gender pay inequity[,]” this new restriction may open employers to yet another theory the plaintiffs’ bar can seek to exploit.
Beginning Oct. 31, 2017, it will be “an unlawful discriminatory practice” under the NYCHRL for an employer (i) to inquire about the salary history of an applicant, or (ii) to rely on the salary history of an applicant in determining compensation during the hiring process. The term “inquire” is broadly defined, and includes not only asking an applicant what he or she has been paid by prior or current employers, but also searching public records to obtain that information. The law does not prohibit (i) inquiries into objective productivity metrics “such as revenue, sales, or other production reports,” (ii) discussing with an applicant “their expectations with respect to salary, benefits and other compensation,” or (iii) verifying and considering an applicant’s salary history where he or she “voluntarily and without prompting discloses” it.