Employment Law Observer

The United States Supreme Court's recent decision in Viking River Cruises v. Moriana, No. 20–1573 (June 15, 2022) benefits California employers as it will make it easier for them to enforce arbitration agreements related to claims under California's Private Attorneys General Act (PAGA) and limit class actions and quasi-class actions.

The U.S. Court of Appeals for the Eighth Circuit will soon be deciding a case that may have important implications on the viability of class actions for employment discrimination under the Americans with Disabilities Act (ADA). In Harris v. Union Pacific Railroad, the Eighth Circuit will look at whether a large class can be certified in ADA litigation notwithstanding certain individualized inquiries inherent to the ADA.

With the Illinois Supreme Court unanimously ruling that employees need not plead or prove a traditional injury or adverse harm in order to prosecute a claim under the Illinois Biometric Information Privacy Act (BIPA) (see, Rosenbach v. Six Flags Entertainment Corp., 2019 IL 123186 (Jan. 25, 2019)), the time is now for Illinois employers to review their workplace policies for biometric privacy issues.

The United States Supreme Court recently handed workers a rare victory in New Prime Inc. v. Oliveira. The Supreme Court ruled that transportation workers engaged in interstate commerce—including those labeled as independent contractors—are exempt from the Federal Arbitration Act (FAA) and thus cannot be compelled to undergo mandatory arbitration.  As a result of this decision, employers in the transportation industry will have to review their existing arbitration policies and assess whether or not they comply with applicable local, state, and federal laws.

The United States Supreme Court recently handed the defense bar a useful tool in stemming the tide of class action lawsuits. In the area of employment law, claims for violations of federal wage and hour laws, violations of state and local regulations governing employees, and systemic workplace discrimination are prone to class action claims.

In a 5-3 decision, the United States Supreme Court affirmed the Ninth Circuit’s decision in Campbell-Ewald Co. v. Gomez, holding that an unaccepted settlement offer or offer of judgment providing for an individual plaintiff complete relief does not moot a class action complaint, resolving a split among circuits. However, the Court limited its holding by declining to address “whether the result would be different if a defendant deposits the full amount of the plaintiff's individual claim in an account payable to the plaintiff, and the court then enters judgment for the plaintiff in that amount.” The Court’s dissenting opinions and concurring opinions suggest actual tender would moot the plaintiff’s claim.

In August 2014, the California State Court of Appeals (2nd Circuit, Division 2) decided in Cochran v. Schawan's Home Service that employers were responsible for reimbursing employees for the business use of personal cell phones. Most cell phone users have unlimited minute plans so the question before the court was whether reimbursement was warranted even if the employee did not incur an extra expense. The answer: reimbursement is always required. The California Supreme Court has denied a petition to review this case so this holding stands. Employers with employees in the state of California should be mindful of this decision and take steps to implement policies which comply with the law (e.g., provide company cell phones, provide for reimbursement of actual cell phone usage for business-related calls, or provide a flat amount of reimbursement per month per employee).

In Cochran v. Schwan’s Home Service, Inc., the California Court of Appeal for the Second Appellate District dealt with the question of whether employers are required to reimburse employees for work-related calls made on their personal cell phones.

In Hall v. Rite Aid Corp., the Fourth Appellate District reversed the trial court’s decertification of a putative class of cashiers who challenged their employer’s policy of requiring them to stand while checking out customers.

In Martinez v. Joe’s Crab Shack Holdings, the California Court of Appeal for the Second Appellate District reversed an order denying class certification to a group of managerial restaurant employees allegedly misclassified as exempt.

In Benton v. Telecom Network Specialists, Inc., the California Court of Appeal for the Second Appellate District affirmed that employee wage and hour and meal break cases may be suitable for class certification even where employees experience diverse damages.

In Abdullah v. U.S. Security Associates Inc., the Ninth Circuit held that the district court did not abuse its discretion by certifying a meal break subclass, defined as all past and present employees who (a) worked more than six hours, (b) were not provided a meal break, and (3) were not compensated for the meal break.

In Rodriguez v. AT&T Mobility Services LLC the Ninth Circuit cited recent United States Supreme Court precedent to make it more difficult for class action plaintiffs to pursue their claims in state court.

In this recent arbitration decision out of the Ninth Circuit, the employee brought an action against her employer, alleging violations of California’s overtime laws and sought to assert claims on behalf of a class. After several years of litigation, the employee moved to certify a class. The District Court granted the motion in part, narrowing the class which the employee represented. In the same order, the court denied the employer's motion to compel arbitration, which was after the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2011). The District Court found that the employer had waived its right to arbitration by litigating the action for years without raising the binding arbitration clause contained in the employee's employment agreement.

Production interns on the set of a blockbuster movie claimed that they should have been classified as employees, not unpaid interns, and filed suit against the production company. The interns did basic tasks such as answering phones, arranged travel, took lunch orders, and general office work. They claimed that the production company violated federal and New York state minimum wage laws by not paying them for their work. The interns ultimately moved for summary judgment on the issue of whether they were employees covered under the Fair Labor Standards Act and New York Labor Law, and also sought class certification. The company also filed a motion for summary judgment and opposed the request for class certification.

Non-exempt hourly auto workers filed a class action lawsuit alleging violations of various wage and hour laws, and sought penalties under California’s Private Attorneys General Act (PAGA). The employees had, however, executed the employer’s Employee Dispute Resolution Plan, which provides that all employment-related disputes must be submitted to mediation and arbitration. Employees waived any right they had to pursue, file, participate in, or be represented in disputes filed on a class basis or as a collective or representative action, and the agreement prohibited mediation or arbitration of disputes on a class basis or as a collective or representative action.

A stipulation by a class-action plaintiff that he and the class will seek damages that are less than the threshold for jurisdiction under the Class Action Fairness Act of 2005 (CAFA) does not defeat federal jurisdiction under the Act.

In Daily v. Sears, the Fourth Appellate District, Division One, affirmed the trial court’s granting of the defendant’s motion to preclude class certification.

The Seventh Circuit Court of Appeals recently issued an opinion upholding a district court’s de-certification of a collective and class action under the Fair Labor Standards Act and Illinois state wage laws. While the opinion did not deal with typical Rule 23 or Section 16 issues, such as commonality or a common employer policy, it is a positive case for employers trying to get out from under lengthy, expensive class litigation.

Avidor v. Sutter’s Place, Inc., decided January 23, 2013, California Court of Appeal, Sixth Appellate District, involved a class action brought on behalf of card dealers employed by Sutter’s Place, a casino.