Supreme Court Provides Additional Guidance on FCRA Standing

On June 25, 2021, the Supreme Court of the United States issued a ruling that provides additional guidance related to the Fair Credit Reporting Act (FCRA), a federal law that regulates the collection of consumers’ credit information and access to their credit reports. In the employment context, the FCRA most frequently applies to background checks, including class actions alleging the most common background check claim—unlawful disclosure and authorization screens/forms (usually because of too much or too little information)—resulting in an informational injury.

California Supreme Court’s Decision on Premium Payments for Meal, Rest, and Recovery Break Violations

On July 15, 2021, the California Supreme Court issued a decision that will increase dramatically California employers’ potential liability for missed meal, rest, and recovery breaks. In Ferra v. Loews Hollywood Hotel, LLC, the court unanimously held that employers must pay premium payments to employees for missed meal, rest, and recovery breaks at the employee’s “regular rate of pay” instead of their base hourly rate, as many employers were doing.

California Court Affirms PAGA Claims Based on Cal/OSHA Violations: Are Further PAGA-Cal/OSHA Actions to Come?

In Sargent v. Board of Trustees of the California State University, the California Court of Appeal highlighted an important distinction between Private Attorneys General Act (PAGA) claims asserted against a public entity employer based on statutes that themselves provide for civil penalties and PAGA claims that are based on PAGA’s default civil penalties provisions under California Labor Code § 2699(f).

New York City Says Goodbye to At-Will Employment for the Fast Food Industry

On January 5, 2021, New York City Mayor Bill de Blasio signed legislation that effectively ends at-will employment for fast food employees in New York City. The new law takes effect on July 4, 2021, and would make New York City the nation’s first jurisdiction to create job protections for a particular industry. However, at least some portions of the new law may be ripe to challenge on federal preemption and other grounds.

California Court of Appeal Analyzes ‘Salary’ Test Under Administrative Exemption

Under California law, an employee is exempt from California’s overtime requirements and other wage and hour laws if the person is employed in an administrative capacity. To meet this exemption, California’s wage orders and the California Labor Code provide that an employee must perform certain job duties and be paid a monthly salary equivalent to at least twice the state minimum wage for full-time employment. Neither the Labor Code nor the wage orders define what constitutes a “salary” or what it means for an employee to be paid on a salary basis for the purposes of the exemption. A recent California Court of Appeal decision, however, sheds some light on the issue.

First Circuit Holds FAA Does Not Drive Independent Contractors’ Class Action Wage Claims Case

Recently, and for the first time in more than 20 years, the United States Court of Appeals for the First Circuit ruled on the transportation worker exemption contained in Section 1 of the Federal Arbitration Act (FAA). In Waithaka v. Amazon.com, Inc., 966 F.3d 10 (1st Cir. 2020), the court of appeals upheld a district court’s decision not to compel Amazon “AmFlex” delivery drivers (who are independent contractors) to arbitrate their wage claims. The decision is significant for companies that require their delivery drivers to sign arbitration agreements.

Ninth Circuit Gives California Employers a Break in Defending Rest Period Claims

In Davidson v. O’Reilly Auto Enterprises, LLC, No. 18-56188 (August 3, 2020), the Ninth Circuit Court of Appeals addressed whether a district court abused its discretion in denying class certification for an employee’s claim for improper rest breaks under California law where the employer allegedly had a facially defective written rest break policy.

Wisconsin Becomes a Hotbed for ERISA Class Action Claims

In recent months, Wisconsin federal courts have witnessed a dramatic increase in class litigation raising breach of fiduciary duty claims under the Employee Retirement Income Security Act of 1974 (ERISA). These claims target sponsoring employers and individuals who oversee plan investments and plan fees for employer-sponsored 401(k) plans.

Ninth Circuit Issues a Positive Decision for Employers in the World of Background Checks

In recent years, California employers have faced an increasing number of class action lawsuits related to background check practices commonly used in the hiring process. These lawsuits arise from the Fair Credit Reporting Act (FCRA), a federal law that regulates the collection, dissemination, and use of consumer information.

How the CARES Act Will Help Universities Combat the New Rise of COVID-19 Class Actions

Universities continue to see a rise of COVID-19-related class action lawsuits alleging that campus closures deny students the full benefits of an on-campus college experience. This new wave of class action lawsuits generally seek full refunds for tuition, room and boarding costs, and other matriculation fees based on a breach of contract theory and claims of unjust enrichment. Many colleges and universities have already taken proactive measures that will help defend against these lawsuits. Some institutions implemented policies to refund student monies or apply room and boarding fees for the impacted term of enrollment toward future enrollment periods. For universities that have not taken these measures, the Coronavirus Aid, Relief, and Economic Security (CARES) Act may provide a potential, unintended defense to a class action.

California Supreme Court to Review Meal and Rest Period Premium Calculation Case

The Supreme Court of California recently agreed to review the California Court of Appeal’s decision in Ferra v. Loews Hollywood Hotel, LLC, 40 Cal. App. 5th 1239 (2019), as limited to the following question: Did the Legislature intend the term “regular rate of compensation” in Labor Code section 226.7, which requires employers to pay a wage premium if they fail to provide a legally compliant meal period or rest break, to have the same meaning and require the same calculations as the term “regular rate of pay” under Labor Code section 510(a), which requires employers to pay a wage premium for each overtime hour?

Party of One: Collective Action Against Outback Steakhouse Denied due to Lack of Personal Jurisdiction

The U.S. District Court for the District of Massachusetts denied conditional class action certification in a case involving a front of house (FOH) manager suing Outback Steakhouse for unpaid overtime under the Fair Labor Standards Act (FLSA). The court applied the Supreme Court of the United States’ reasoning in its 2017 decision in Bristol-Myers Squibb v. Superior Court of California, which involved a class action in California state court by a purported class of more than 600 plaintiffs, most of whom were not California residents.

Washington Supreme Court Approves Trucking Industry Piece-Rate Compensation Practices

Last year, the Washington Supreme Court considered the following certified question: “Does the Washington Minimum Wage Act require non-agricultural employers to pay their piece-rate employees per hour for time spent performing activities outside of piece-rate work?” On September 5, 2019, the court answered with a resounding no.

Fifth Circuit Rules that Courts, Not Arbitrators, Decide “Gateway Issue” of Class Arbitrability

In 20/20 Communications, Inc. v. Crawford, the U.S. Court of Appeals for the Fifth Circuit recently ruled that the question of whether a dispute can be arbitrated on a class-wide basis is a threshold issue that is presumptively for a court, not an arbitrator, to decide. This is the latest in a series of decisions by the Supreme Court of the United States and courts of appeals in favor of arbitration agreements that waive class procedures.

The Supreme Court Rules on Class Action Removal Limits for Third-Party Counterclaim Defendants

In Home Depot U. S. A., Inc. v. Jackson, No. 17-1471 (May 28, 2019), the Supreme Court of the United States addressed whether third-party counterclaim defendants in class actions have authority under the general removal provision 28 U.S.C. Section 1441(a) or the removal provision in the Class Action Fairness Act of 2005 (CAFA), 28 U.S.C. Section 1453(b), to remove their underlying cases to federal courts.

Key Takeaways From an ERISA Fiduciary Breach Ruling on Behavioral Standards of Care After a 10-Day Trial

Behavioral health claims administrators and plan sponsors alike may be looking more closely at their care guidelines—and how they are applied—after a federal court ruled in a California class action that a claims administrator had breached its fiduciary duty under the Employee Retirement Income Security Act of 1974 (ERISA) by applying standards of care that were more restrictive than generally accepted standards and by improperly prioritizing cost savings.

Seventh Circuit Joins Sister Circuits in Holding That Courts, not Arbitrators, Should Decide the Availability of Class Arbitration

In a matter of first impression before the Seventh Circuit Court of Appeals involving an issue left open by the Supreme Court of the United States, a Seventh Circuit panel issued an opinion on a key threshold question of class arbitrability. The question was who decides—a court or an arbitrator—whether arbitration can proceed on a class or collective basis.