Hunton Employment & Labor Perspectives

Yesterday, the California Supreme Court issued its highly-anticipated decision in ZB, N.A. v. Superior Court bringing some welcomed good news for California employers.   The case concerned an action brought under the Private Attorneys General Act, wherein the representative employee was seeking, among other things, lost wages under Labor Code Section 558.  The question presented was whether the employee’s claim for lost wages under Labor Code Section 558 could be broken off and sent to arbitration on an individual basis, while the remainder of the PAGA action for civil penalties proceeded in court.  As discussed in a previous post, California courts were split on this issue.

On September 3, 2019, in First Student, Inc. v. NLRB, __ F.3d __ (D.C. Cir. 2019), the court upheld the National Labor Relations Board’s application of the “perfectly clear” doctrine in First Student Inc. v. NLRB, 366 NLRB No. 13 (February 6, 2018).  The “perfectly clear” doctrine affects the right of a labor law successor, which acquires a unionized business, to set new terms and conditions of employment.  Thus, it can have an important impact on the economics of the commercial transaction.

A recent decision by the National Labor Relations Board is another in a string of decisions where the Trump-appointed Board has attempted to rebalance a property owner’s rights with the rights under Section 7 of the National Labor Relations Act of those individuals who work on the property. In Bexar County Performing Arts Center Foundation d/b/a Tobin Center for the Performing Arts, 368 NLRB No. 46 (2019), the Board overruled its previous precedent and held that a property owner may prohibit Section 7 activity by off-duty employees of a licensee or contractor performing work on the property owner’s premises.

The arbitrability of wage-and-hour actions brought under the California Private Attorneys General Act (PAGA) is an increasingly important issue due to the growth of PAGA-only actions in California.   In that regard, a split has emerged among courts regarding the arbitrability of PAGA claims for unpaid wages under Labor Code Section 558.

The Ninth Circuit Court of Appeals upheld a District Court’s ruling in favor of employer Medtronic, Inc. in a lawsuit alleging Medtronic unlawfully terminated employee Jose Valtierra’s employment because he was morbidly obese, in violation of the Americans with Disabilities Act (“ADA”).  In doing so, the Court declined to decide whether morbid obesity is a disability, leaving this issue unsettled in the Ninth Circuit.

Earlier this year, a federal court in Illinois decertified a small class of Physicians who alleged gender-based pay discrimination under the Equal Pay Act (“EPA”).  Sajida Ahad, MD v. Board of Trustees of Southern Illinois University, No. 15-cv-3308 (C.D. Ill. Mar. 29, 2019).  Although not a groundbreaking appellate court decision, the opinion does provide a roadmap for employers facing EPA collective actions, which may gain traction in the wake of increasing media attention on pay disparities.

In Cordúa Restaurants, Inc., 368 NLRB No. 43 (2019), the National Labor Relations Board (“Board”) issued its first major decision following the Supreme Court’s 2018 ruling in Epic Systems, addressing a number of issues of first impression and providing guidance on the permissible scope and implementation of class action waivers.  

 In Cordúa, a group of employees had filed a collective action under the FLSA.  In response, the employer promulgated and maintained a revised arbitration agreement, requiring employees to agree not to opt in to class or collective actions.  In distributing the revised agreement, the employer explained that employees would be removed from the work schedule if they declined to sign it.  In addition, another employee was discharged for filing a class action wage lawsuit against the employer and discussing wage issues with his fellow employees.

The EEOC recently published guidance under its FAQ page regarding the question of how to report nonbinary gender employees on the annual EEO-1 report.  The EEO-1 report is a yearly survey that employers must complete and submit to the agency which requires the employer to identify characteristics of its workforce such as race/ethnicity and sex.  This survey does not allow the employer or the affected employee to abstain from responding, which creates difficult decisions for the employer who must fill-in-the-blank when an employee declines to self-identify.

In a case of first impression, the Third Circuit rejected the view of the United States Department of Labor, ruling that incentive payments from third parties are not necessarily included in the calculation of an employee’s overtime rate.

In Secretary United States Department of Labor v. Bristol Excavating, Inc., No. 17-3663, 2019 WL 3926937 (3d Cir. Aug. 20, 2019) (“Bristol”), the Court of Appeals overturned a District Court’s order holding that all incentive payments made by third parties must be included in an employee’s overtime rate under the Federal Labor Standards Act (“FLSA”). The unanimous Third Circuit panel held that the understanding of the employer and employee determines whether third-party payments should be included in the overtime rate.

The National Labor Relations Board has issued the first part of its planned series of revisions to labor union election procedures.  The revisions arrive five years after the Obama-era Board’s controversial 2014 changes that created the so-called “ambush election” procedures.

On August 12, a three-member majority, over a one-member dissent, issued a 113-page proposed rule that would modify three of the Board’s election processes: (1) its handling of “blocking charges,” (2) the restriction on elections after an employer’s voluntary recognition of a union, and (3) the standard for contractually-negotiated recognition of a union in the construction industry.