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US Employment Litigation Round-Up for November 2014

A Review of Key Cases and New Laws Affecting Employers
26 November 2014
Mayer Brown Newsletter

NLRB Confirms: Concerted Social Media Activity Can Be So Egregious It Loses Its NLRA Protections

Decision: The National Labor Relations Board (NLRB) recently upheld an administrative law judge’s ruling that a youth center permissibly fired two of its employees for an exchange they had on Facebook. According to the NLRB, the exchange “contain[ed] numerous statements advocating insubordination” such that the exchange, even though it was concerted activity, lost the protections of the National Labor Relations Act (NLRA). In Richmond District Neighborhood Center, two youth center employees engaged in a Facebook conversation in which they said they would refuse to obtain permission as required by the employer’s policies before organizing youth activities, disregard specific school district rules, undermine the center’s leadership, neglect their duties and jeopardize the future of the center. The NLRB determined that “the pervasive advocacy of insubordination in the Facebook posts, comprised of numerous detailed descriptions of specific insubordinate acts, constituted conduct objectively so egregious as to lose the Act’s protection” and rendered the two employees unfit for further service.

Impact: This is the first NLRB decision to analyze how concerted activity on social media can lose its protection under the NLRA because it is “objectively egregious.” Although the exception created by the NLRB in this case is relatively narrow—the NLRB found particular significance in the Facebook posts’ “numerous detailed descriptions of insubordinate acts”—employers should consider whether this defense applies when they are faced with a situation in which employees’ social media comments advocate violating the employers’ policies or neglecting their duties.

PAGA Waivers May Be Enforceable in Federal Court as Federal Judges Part Ways with California Supreme Court

Decision: A number of federal courts in California have recently rejected the California Supreme Court’s holding in Iskanian v. CLS Transportation Los Angeles LLC that employees cannot waive representative claims under the Private Attorneys General Act (PAGA) through arbitration agreements. PAGA permits employees, in lieu of government enforcement, to bring representative actions on behalf of other aggrieved employees to recover penalties for purported California Labor Code violations. The District Court for the Central District of California was the first to disagree, holding in Fardig v. Hobby Lobby Stores that “[e]ven in light of Iskanian, the court continues to hold that the rule making PAGA claim waivers enforceable is preempted by the FAA [Federal Arbitration Act]” and that federal courts are not bound by the California Supreme Court’s understanding of federal law. Last month, three more district courts followed suit, upholding the enforceability of agreements to individually arbitrate employment claims despite the inclusion of PAGA representative claims in the lawsuit. See Langston v. 20/20 Companies, Inc.; Chico v. Hilton Worldwide, Inc.; Ortiz v. Hobby Lobby Stores, Inc. In the Langston decision, for example, the court explained its rejection of Iskanian: “it is not an individual’s ability to waive the government’s right that drives the [Iskanian] court’s rule, but rather the court’s general disfavor for pre-existing agreements to arbitrate such claims individually,” which is inconsistent with the Supreme Court’s arbitration-friendly decision in AT&T Mobility LLC v. Concepcion.

Impact: These recent decisions by federal courts may bring about the removal of one of the last barriers to full enforcement of arbitration agreement with class action waivers. The growing split between California federal and state courts on whether employers can compel arbitration of lawsuits that include PAGA claims may prompt the United States Supreme Court to review the Iskanian decision, which is currently the subject of a petition for writ of certiorari.

EEOC Targets Wellness Programs

Development: The Equal Employment Opportunity Commission (EEOC) recently filed two lawsuits against employers alleging violations of the Americans with Disabilities Act (ADA) based on the employers’ wellness programs. In the first lawsuit, EEOC v. Flambeau Inc., the EEOC alleged that Flambeau Inc. canceled an employee’s health insurance and shifted all of the premium payments to him when he failed to take a voluntary health assessment and other testing offered through the company’s wellness plan. In the second lawsuit, EEOC v. Honeywell Int’l Inc., the EEOC sought a preliminary injunction that would have prohibited the employer from penalizing employees who refused to participate in biometric testing by taking away the employer’s contributions to the employees’ health savings account and imposing a surcharge on non-participating employees. The court denied the EEOC’s request for preliminary injunctive relief, but the agency continues to investigate the employees’ claims of discrimination based upon the penalties and surcharges.

Impact: The EEOC’s recent charges of ADA violations based upon wellness programs serve as an important reminder that employee participation in wellness programs has to be truly voluntary in order to comply with the ADA. Employers should consider implementing incentives for employee wellness program participation, rather than penalties for non-participation, in order to better position a wellness plan against attack from the EEOC. And while the EEOC’s current focus with respect to wellness programs appears to be the ADA, employers also should keep in mind that wellness programs that request the disclosure of employees’ family medical history may also run afoul of the Genetic Information Nondisclosure Act of 2008, which generally bars employers from requesting or requiring employees’ genetic information, including family medical history.

California Appeals Court Upholds Denial of Missed Meal Break Class and Clarifies Brinker

Decision: In In re: Walgreen Company Overtime Cases, a California appellate court refused to revive a putative class action that alleged that Walgreens had not given employees adequate meal breaks. The plaintiff had advanced the theory that, although Walgreens’ stated meal period policy was adequate, its actual practice departed from the stated policy in an illegal and classwide way. In upholding the district court’s decision denying class certification, the appellate court clarified that under the make available standard espoused by the California Supreme Court, “[i]f the employer provides a break opportunity to the worker, the employer incurs no liability if the employee then decides to skip or delay the break.” Indeed, “the fact of a missed break [in an employee’s time records] does not dictate the conclusion of a violation (and thus employer liability) . . . . [U]nder the make available standard you additionally must ask why the worker missed the break before you determine whether the employer is liable.” The court rejected the plaintiff’s argument that there is a rebuttable presumption in California that the employee was not provided a meal period merely because the employer’s records show no meal period for a given shift. Accordingly, the court rejected as “invalid” the opinion of the plaintiff’s expert statistician because his opinion was premised on a “legally unsound” assumption that there was a Labor Code violation every time a worker did not take a timely break. The court also found that emails in which Walgreens managers pressured employee to take meal periods bolstered Walgreens’ case that it made meal breaks available to employees.

Impact: The appellate court’s decision highlights the increasing difficulty employees face in certifying meal break classes in California. The court’s decision also reinforces the importance of having a legally compliant meal period policy and of documenting training and other efforts to remind managers of the obligations to make meal breaks available.


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