On June 20, 2022, Puerto Rico’s governor signed into law Act No. 41-2022 (“the Act”). The Act rolls back certain changes brought about by the Labor Transformation and Flexibility Act (“LTFA”). The LTFA was enacted in 2017 in an effort to reenergize the island’s economy following its effective bankruptcy.
On May 23, 2022, the California Supreme Court ruled in Naranjo v. Spectrum Security Services, Inc. that unpaid meal and rest period premiums can form the basis of claims for wage statement violations under California Labor Code section 226 and waiting time penalties under California Labor Code section 203. This is yet another significant decision by the Supreme Court impacting California employers in California particularly since the Court overruled the Court of Appeal, which had held that meal and rest period premiums are not “wages” and therefore cannot lead to wage statement or waiting time penalties.
California law generally requires that employers provide non-exempt employees a reasonable opportunity to take an unpaid, off-duty and uninterrupted meal period of at least 30 minutes before the end of their fifth hour of work, and a second meal period before the end of their tenth hour of work. Employers also generally must provide 10-minute uninterrupted, paid rest periods to non-exempt employees for every four hours worked (or major fraction thereof). If an employer does not provide a compliant meal or rest period, the employee in question is entitled to payment of one hour of wages at the employee’s regular rate of pay. That extra hour of pay is often referred to as a meal or rest period “premium.”
On April 4, 2022, the Massachusetts Supreme Judicial Court held, in Reuter v. City of Methuen, that employers are strictly liable for treble wages as liquidated damages if they fail to make timely payments upon an employee’s termination of employment in compliance with the Massachusetts Wage Act. With its holding, the Court rejected a longstanding trial court precedent that employers who failed to make timely wage payments were liable only for treble interest.
The Massachusetts Wage Act
Section 148 of the Massachusetts Wage Act requires employers to pay unpaid wages to any employee discharged from employment “in full on the day of [the employee’s] discharge.” Mass. Gen. L. C. 149 § 148. As an enforcement mechanism, the Act provides a private right of action for employees and mandates that employees who prevail on § 148 claims “shall be awarded treble damages, as liquidated damages, for any lost wages and other benefits and shall be awarded the costs of litigation and reasonable attorneys’ fees.” The Act specifically defines “wages” to include, among other things, “any holiday or vacation payments due an employee under an oral or written agreement.”
On March 31, 2022, the U.S. Supreme Court decided Badgerow v. Walters, No. 20-1143, reversing the Fifth Circuit, and holding that federal courts may only look to the application to confirm or vacate an arbitral decision in assessing jurisdiction.
Denise Badgerow initiated an arbitration action against Greg Walters, Thomas Meyer, and Ray Trosclair (collectively, Walters) alleging unlawful termination under federal and state law. The arbitrators sided with the employer and dismissed Badgerow’s claims. Badgerow then sued Walters to vacate the arbitral decision in state court. Walters removed the lawsuit to federal court and applied to confirm the arbitral award. The district court determined that it had jurisdiction over the pending applications using a look-through approach that considered the substance of the parties’ underlying substantive dispute, which raised federal-law claims. The United States Court of Appeals for the Fifth Circuit affirmed.
Companies with Illinois employees have been bombarded with class action lawsuits under the Illinois Biometric Information Privacy Act (BIPA) over the last several years. These lawsuits generally allege that employers have not complied with BIPA’s notice and consent requirements before collecting or disclosing employees’ biometrics. One of the defenses has been that such claims are preempted under the Illinois Workers’ Compensation Act (IWCA) as workplace injuries, and thus cannot be brought in court. However, on February 3, 2022, in a long-awaited decision, the Illinois Supreme Court held in McDonald v. Symphony Bronzeville Park, LLC, 2022 IL 126511, that preemption does not apply to BIPA claims raised by employees for damages, thereby allowing such claims to proceed in court.
As the COVID-19 pandemic spread throughout the country, many employers responded to this unprecedented and uncertain situation by furloughing and laying off some or all of their workforce. These actions already have spurred labor and employment lawsuits. And more are likely on the horizon, including as employees start returning to work.