On June 8, 2017, plaintiffs Mayra Casas and Julio Fernandez (“Plaintiffs”) filed an unopposed motion seeking approval of a $12 million settlement reached against defendant Victoria’s Secret Stores, LLC (“Victoria’s Secret”) in a closely watched case challenging the legality of Victoria’s Secret’s “call-in” scheduling practices. The case, Casas v. Victoria’s Secret Stores, LLC, was pending before the Ninth Circuit Court of Appeals at the time the parties’ settled the case, and was one of many currently pending class action lawsuits challenging similar practices by retailers. As a result of the parties’ settlement, the ultimate question in Casas remains unanswered: Are employees who are required to call their employer to determine if they are required to show up for call-in shifts entitled to reporting time pay?
On June 7, 2017, U.S. Secretary of Labor Alexander Acosta announced that the U.S. Department of Labor (DOL) is withdrawing two major pieces of informal guidance issued during the Obama administration, pertaining to joint employment and independent contractors under the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 et seq.
The two Administrator Interpretations Letters were issued by the former head of the DOL’s Wage and Hour Division, David Weil. The first guidance letter, Administrator’s Interpretation No. 2015-1, took an aggressive position regarding misclassification of employees as independent contractors. It stressed that the “economic realities” of worker-employer relationships were paramount—i.e., whether, as a matter of economic reality, a worker was dependent on the putative employer—and suggested that most workers should be classified as employees. Although it relied on case law, the Administrator Letter provided additional refinements and, significantly, de-emphasized consideration of “control”—a major element under most common law tests.
Two weeks ago, just in time for the holidays, the California Supreme Court issued its (published) decision in Augustus v. ABM Security Services, Inc. (opinion available here). In Augustus, the Court held that California law does not permit employers to require employees to take on-duty or on-call rest breaks.
The Augustus decision will have significant impact for thousands of California employers who have employed on-duty or on-call rest breaks as part of their business operations, especially in the healthcare, security, hospitality, and retail sectors.
Last week, California Governor Jerry Brown signed into law Senate Bill 1241 (“SB 1241”). The new law (available here), which takes effect on January 1, 2017, adds section 925 to the California Labor Code (“Section 925”). In general, Section 925 will prohibit employers from requiring California-based employees to enter into agreements requiring them to: (1) adjudicate claims arising in California in a non-California forum; or (2) litigate their claims under the law of another jurisdiction, unless the employee was represented by counsel. Section 925 represents a considerable limit on parties’ rights to contract and may be the end of forum-selection and choice of law provisions, currently common in employment agreements.
For years, employers based outside of California have incorporated forum-selection and/or choice-of-law provisions in agreements with their California employees. Some employers used these provisions to create company-wide uniformity among their workforce. Others used forum-selection and choice-of-law provisions to avoid some of California’s more rigid rules about restrictive covenants. Whatever the motivation, forum-selection and choice-of-law provisions have become commonplace in employment and arbitration agreements.
On September 14, 2016, Representative Eleanor Holmes Norton (D – D.C. At Large) introduced the Pay Equity for All Act of 2016 (the “PEAA”) in the U.S. House of Representatives. In relevant part, the PEAA would amend the Fair Labor Standards Act of 1938 (“FLSA”), 29 U.S.C. §§ 201 et seq., to prohibit employers from asking prospective employees about their previous wages or salary histories, including benefits or other compensation. In addition to prohibiting these pre-hire inquiries, the PEAA prohibits employers from seeking out the information on their own. The PEAA prohibits employers from retaliating against any employee or applicant because the employee opposed any practice unlawful under the law or for testifying or participating in any investigation or proceeding relating to any act or practice made unlawful by the PEAA. Any “person” who violates the PEAA is subject to a civil penalty of $5,000 for the first “offense,” which increases by $1,000 for each subsequent offense, up to $10,000. In addition, any person violating the PEAA is liable to each employee or prospective employee who is subject to a violation for special damages not to exceed $10,000 plus attorneys’ fees, as well as potential injunctive relief.
In her introductory remarks, Representative Norton explained that the purpose of the PEAA was to “help eliminate the gender and racial pay gap” and to “ensure that applicants’ salaries are based on their skills and merit, not on a potentially problematic salary history.” The bill initially was co-sponsored by Representatives Rosa DeLauro (D – CT), Jerrold Nadler (D – NY), and Jackie Speier (D – CA); subsequent co-sponsors include Representatives Gwen Moore (D – WI), John Conyers, Jr. (D – MI), Barbara Lee (D – CA), and Frederica S. Wilson (D – FL). The PEAA was immediately referred to the House Committee on Education and the Workforce.