The United States Supreme Court recently decided two cases addressing class-action proceedings. These cases show that “Things Are Changing” and employers will no longer have “Nothing But Heartache.” Both decisions are employer-friendly, in that these opinions effectively limit participation in class-action lawsuits.
In Epic Systems Corp. v. Lewis, the Supreme Court upheld the enforceability of class-action waivers in employee arbitration agreements. Arbitration is an alternative means of resolving a dispute without proceeding to a court trial. A class-action waiver in the employment context is a contract provision in an arbitration agreement that prevents employees from resolving employment disputes in a group. The Court found that employers can put these waivers in their arbitration agreements, and the waivers do not invalidate the agreements. Opponents to these waivers are now screaming, “Stop, In the Name of Love.”
Now, some “Reflections.” In light of this decision, employers should keep two things in mind.
The Epic Systems decision does not represent a blanket endorsement of arbitration agreements; rather, this decision requires courts not to overturn arbitration agreements solely because they contain class-action waivers. This case does not prevent courts from refusing to enforce arbitration agreements for other reasons.
Epic Systems does not mean all employers should declare, “I’ll Try Something New,” and adopt arbitration agreements. Employers considering using arbitration agreements should evaluate whether arbitrating their disputes is the right choice. Employers should keep in mind that by agreeing to arbitration, they are generally giving up their right to appeal an adverse decision.
In the second case, China Agritech v. Resh et al., which was not an arbitration case, the Court held that employees/former employees who were not certified as members of a class-action lawsuit before the legal deadline to join the lawsuit could not file a new class-action suit after the passage of the statute of limitations on the initial class action. Thus, some employees/former employees who do not timely protect their rights will no longer be able to belt, “You Keep Me Hangin’ On.”
“No Matter What Sign You Are,” as an employer these decisions are “Automatically Sunshine” and maybe even a bit of “Buttered Popcorn.”
Summer associate Kelley Thompson assisted in preparing this blog post.
It is only October and across the state, in department stores not named Nordstrom, holiday decorations are appearing. It may seem that, like these stores, reporting to you that on January 1, 2018, Florida’s minimum wage will increase, may be premature. But, like the holidays, the new minimum wage will be here before you know it. If you are not prepared, then you may be updating your payroll on New Year’s Eve.
Great, now I have Harry Connick Jr’s melancholy version of the 1947 classic by Frank Loesser stuck in my head (and it’s only October):
Maybe it’s much too early in the game
Ooh, but I thought I’d ask you just the same
What are you doing New Year’s
New Year’s Eve?
On January 1, 2018, Florida’s minimum wage will increase from $8.10 to $8.25 an hour. Employers should be prepared to make adjustments to their minimum wage earners. Failing to pay non-exempt employees Florida’s statutory minimum wage can result in claims against employers pursuant to Section 24, Article X of the State Constitution and Section 448.110, Florida Statutes. The maximum tip credit ($3.02) that can be taken by Florida employers with tipped employees will remain the same, but the direct wage paid to tipped employees will increase from $5.08 to $5.23 an hour.
In addition to raising the minimum wage, Florida employers are required to post a minimum wage notice in a conspicuous and accessible location. Before the beginning of 2018 you will be able to download the 2018 Florida Minimum Wage Notice from the Florida Department of Economic Opportunity’s website. This notice requirement is in addition to the requirement that employers post regarding the federal minimum wage (which has not been increased). There will also be commercially available Florida-specific “all-in-one posters” that satisfy both the federal and state notice requirements. The 2018 “all-in-one” posters should also be available in the near future.
As Florida prepares for a potential direct hit by Hurricane Irma, employers have many concerns. At some point, when decisions have been made about if a business will stay open and if goods or people need to be moved out of harm’s way, the following question will most likely be asked: “Should I pay exempt employees who miss work due to bad weather conditions?”
When it comes to deductions from exempt employees’ salaries it is easy to get into trouble. The general rule is that an exempt employee is entitled to receive his or her entire salary for any workweek he or she performed work. This means, if the worksite closes for a partial week due to bad weather conditions (such as a hurricane), and the exempt employee has worked during that workweek, the employee is entitled to his or her full salary. However, if the employer has a leave benefit, such as PTO, and the employee has leave remaining, the employer can require the employee to use paid time off for this time away from work. If the employee does not have any remaining leave benefit, he or she must be paid.
If the work site remains open during inclement weather and an employee is absent (even if due to transportation issues), the employee can be required to use paid time off. If the employee does not have any paid time off remaining, the employer may deduct a full-day’s absence from the employee’s salary. For a more detailed explanation see this opinion letter from the U.S. Department of Labor.
As for non-exempt employees, the FLSA only requires that employees be paid for the hours they actually work. However, those non-exempt employees on fixed salaries for fluctuating workweeks, must be paid their full weekly salary in any week for which work was performed.
Doling out a refreshing victory, the U.S. Court of Appeals for the Eighth Circuit sided with Jimmy John’s in a protected, concerted activity case brought under the National Labor Relations Act (“NLRA”). On July 3, the full en banc court reversed an earlier decision of a three-member panel of the court that had affirmed a National Labor Relations Board (“NLRB”) ruling for the employees. Unless appealed to the Supreme Court, this decision brings to an end a torturous legal saga lasting over six years.
This case was set in motion in October 2010 when an Industrial Workers of the World (IWW)-affiliated union lost a union election to represent Jimmy John’s employees at ten franchised stores in the Minneapolis-St. Paul area, owned and operated by MikLin Enterprises. After the unsuccessful election, several union supporters continued to pressure the franchisee’s management to adopt workplace policy changes, including the adoption of paid sick leave. The disgruntled sandwich-makers claimed that current attendance policies forced them to work while sick.
The dispute escalated when six of these employees placed posters in and around the restaurants, calling attention to their claims. The posters featured two identical side-by-side pictures of a Jimmy John’s sandwich. One was labeled as being made by a “sick” employee and the other by a “healthy” employee. The caption below the picture read “Can’t tell the difference?” and was accompanied by a message criticizing the employer’s attendance policies. The employer terminated the six employees responsible for these posters.
The employees challenged their terminations claiming that the employer’s actions were in retaliation for concerted protected activity under the NLRA. Both the NLRB and the three-member panel of the Eighth Circuit agreed. However, the full panel of the Eighth Circuit ruled that the terminations were lawful. Specifically, it found that the claims about food safety were false and misleading and therefore, sufficiently “disloyal” to place the actions of the six employees outside of the protections of the NLRA.
The decision is heartening for employers, as many recent NLRB decisions have been overly protective of worker actions that were calculated to harm a company’s reputation.