How An Arbitration Agreement Put A Class Action Lawsuit on Hold—and May Effectively End It

By Kathleen Jennings (kjj@wimlaw.com)

No company wants to be the target of a class action lawsuit. They are expensive, time-consuming, and a public relations nightmare. This week, the 11th Circuit Court of Appeals put the brakes on a class action lawsuit filed against Waffle House by a rejected applicant on behalf of himself and a class of persons affected by background checks when it enforced an arbitration agreement signed by the lead plaintiff. What makes the facts interesting is that the lead plaintiff, William Jones, signed the Arbitration Agreement with Waffle House after he filed his class action lawsuit. (Jones v. Waffle House, Inc., No. 16-15574, 11th Cir., August 7, 2017).

In a nutshell, Jones applied for a job at a Florida Waffle House in Ormond Beach in December 2014 but was rejected by the store. In October 2015, Jones sued Waffle House and various data-reporting companies in federal district court, claiming that the defendants violated the Fair Credit Reporting Act by failing to give him a copy of the background checks that were run on him in connection with his job application and by failing to give him an opportunity to dispute those background checks. Jones also sought class relief, seeking to represent a class of United States residents who applied for employment or were employed with Waffle House in the preceding five years against whom Waffle House took adverse employment actions based on a background check.

While that lawsuit was pending, Jones continued to seek employment with Waffle House elsewhere. In February 2016, Jones applied for and gained employment at a Waffle House store in Kansas City, Missouri. In connection with his employment, Jones signed an arbitration agreement that covered “all claims and controversies [ ], past, present, or future, arising out of any aspect of or pertaining in any way to [his] employment.” The agreement also included a delegation provision requiring that “[t]he Arbitrator, and not any federal, state, or local court or agency, shall have authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement.”

Jones did not tell the lawyers representing him in the federal lawsuit that he had gained employment with another Waffle House or that he had signed an arbitration agreement. He also did not tell his new employer in Kansas City that he was actively suing Waffle House in Orlando. The situation finally caught up with Jones in March 2016, when Waffle House’s legal team figured out that Jones was working for a Waffle House and therefore had signed an arbitration agreement. At that point, Waffle House moved to compel arbitration pursuant to the agreement. The district court denied the motion and Waffle House timely appealed. The 11th Circuit reversed the district court and held that the motion to compel arbitration should have been granted:

The arbitration agreement contains a broad, valid, and enforceable delegation provision that expresses the parties’ clear and unmistakable intent to arbitrate gateway questions of arbitrability, including questions concerning the interpretation, applicability, enforceability, and formation of the agreement. In the face of the Federal Arbitration Act’s clear preference for and presumption in favor of arbitration, we are obliged to enforce the parties’ clear intent to arbitrate these issues. (Opinion, p. 3)

The enforcement of the arbitration agreement will stay Mr. Jones’ class action lawsuit while the arbitrator decides whether the claims encompassed in that lawsuit should be arbitrated. If the arbitrator concludes that the claims should be arbitrated, then that is where they will go, and Mr. Jones will have to relinquish his role as class representative—all because he took a job with the company he was suing.

The takeaway:

  • A good, enforceable arbitration agreement just might save a company from a world of class action litigation hurt.
  • Always check a plaintiff’s full employment history, up through the present. He or she may be right under your client’s nose.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in sexual harassment and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2017 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

What Impact Does the Opioid Crisis Have on Employment?

By Kathleen Jennings (kjj@wimlaw.com)

This week, Federal Reserve Chair Janet Yellen connected the ongoing opioid crisis in the United States to declining labor force participation, although she could not say whether the opioid crisis is a cause or an effect. “I do think it is related to declining labor force participation among prime-age workers,” Yellen said while answering questions during testimony before the Senate Banking Committee on July 13. “I don’t know if it’s causal or if it’s a symptom of long-running economic maladies that have affected these communities and particularly affected workers who have seen their job opportunities decline.”

Asked whether there is a clear connection between opioids and an opportunity to go to a job, get employed, and have purpose in life, Yellen said that “all of those things are bound up in this opioid crisis,” and are “interacting in ways that are really quite devastating for these individuals and their communities.”

Statistics show that labor force participation in the U.S. has decreased substantially since the start of the 21st century, and male involvement in the workforce has been decreasing since the 1950s. The real challenges for employers and the Fed are to determine why prime-age people, in particular, have fallen out of the workforce and then to identify ways that they can bring some of these people back into the labor market.

Yellen’s remarks echo the findings of a recent report from Wall Street bank Goldman Sachs, which also addressed the connection between the opioid crisis and labor participation. That report noted that “The opioid epidemic is intertwined with the story of declining prime-age participation, especially for men, and this reinforces our doubts about a rebound in the participation rate. ”

According to the United States Department of Health and Human Services, opioid abuse is a serious public health issue. Drug overdose deaths are the leading cause of injury death in the United States. The majority of drug overdose deaths (more than six out of ten) involve an opioid. Since 1999, the number of overdose deaths involving opioids (including prescription opioids and heroin) quadrupled. From 2000 to 2015 more than half a million people died from drug overdoses. 91 Americans die every day from an opioid overdose.

The opioid crisis also affects employers in significant ways. According to a survey released earlier this year by the National Safety Council, approximately 70 percent of employers say their organization has experienced negative impacts from prescription drug abuse among employees. Specifically:

  • 39 percent report absenteeism as the result of drug abuse
  • 29 percent have detected decreased or impaired job performance
  • 29 percent report employees who are dealing with a family member’s addiction problems
  • 22 percent report complaints to HR and lower employee morale as a result of drug abuse
  • Yet, only 19 percent of the HR personnel surveyed say they feel prepared to deal with the issue.

Bottom line: The opioid crisis is a serious issue that affects all employers and the overall U.S. economy. Wall Street has taken notice, but that doesn’t mean that there will be a resolution of this problem any time soon.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in sexual harassment and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2017 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

 

 

 

Paid Sick Leave and On Call Scheduling: Changes in Georgia Law Effective July 1

By Kathleen Jennings (kjj@wimlaw.com)

July 1 is traditionally the time for new laws to take effect in the state of Georgia. This year, there are two new laws that Georgia employers need to be aware of.

Paid Sick Leave. Effective July 1, 2017, Georgia employers that already provide paid sick leave to employees will be required to allow employees to use up to 5 days of that paid sick leave to care for immediate family members. The law defines “immediate family member” as “an employee’s child, spouse, grandchild, grandparent, or parent or any dependents as shown in the employee’s most recent tax return.” Note that the new law does not require employers to offer paid sick leave to employees; rather, it applies only if an employer elects to offer paid sick leave to employees. Note also that the law applies only to employers with more than 25 employees, and only to employees who work at least 30 hours a week. Thus, part-time employees who work less than 30 hours a week are not entitled to the protections of the new law.

Pro tip: Georgia is not the only state that has enacted a law dealing with paid leave for employees; we have seen other states (Arizona, New York) and municipalities (Chicago, Cook County Illinois, Minneapolis, St. Paul) enacting such laws. Employers should be alert for new developments in the areas where they have employees.

On call scheduling. This new Georgia law preempts local governments from adopting higher minimum wage requirements or requiring additional overtime pay above and beyond federal law requirements. The new law also provides that local governments may not require employers to provide employees “additional pay based on schedule changes.”

Many see this new law as an employer-friendly endorsement of “on call” scheduling, by which employees are notified shortly before scheduled work time whether they must report for work. This practice allows employers to match staffing to customer needs and promotes efficiency for employers. In contrast, some other jurisdictions, such as San Francisco and Seattle, require employers to compensate employees when their shifts are changed or cancelled without sufficient notice.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in sexual harassment and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2017 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

 

Calling ICE on an Undocumented Worker Who Has Filed an FLSA Claim May Be Unlawful Retaliation

 

By Kathleen Jennings (kjj@wimlaw.com)

An attorney in California learned that the tactic of calling ICE (Immigration and Customs Enforcement) on undocumented workers who have filed FLSA wage-hour claims against his clients (1) is unlawful retaliation under the FLSA and (2) that he can be sued for retaliation for making those calls, even though he is not the employer of those workers. That’s right—those workers can sue the attorney personally. If that doesn’t get the attention of attorneys practicing wage-hour law, I don’t know what will.

In Arias v. Raimondo (9th Cir., No. 15-16120, 6/22/17), the U.S. Court of Appeals for the Ninth Circuit held that the FLSA prohibits retaliation by “any person,” not just the employer. In this case, Jose Arias had proof that Anthony Raimondo, the attorney for Angelo Dairy, called Immigration and Customs Enforcement on at least five occasions when workers brought wage-and-hour claims against his clients. Arias also claimed that Raimondo used the tactic to force Arias into settling his wage-and-hour case against Angelo Dairy. So Arias sued Raimando for retaliation. Raimando claimed that he could not liable to Arias for retaliation because he was not his statutory employer, and the Ninth Circuit Court of Appeals disagreed. The “distinctive purpose” of the FLSA anti-retaliation provision is to allow workers to avail themselves of their rights, the court said. That purpose wouldn’t be served if it has to be the employer engaging in the retaliation, it said.

Advocates for workers see this as an added layer of protection from retaliation for undocumented who challenge employer wage-hour policies under the FLSA.

What does this decision mean for employers? Making threats of deportation to undocumented workers who have filed FLSA claims is not a lawful bargaining tactic when trying to resolve claims or lawsuits. Moreover, an employer cannot use others, such as its attorney, to do indirectly what it cannot do directly, at least in the states encompassed by the Ninth Circuit (California, Alaska, Arizona, Hawaii, Idaho, Montana, Nevada, Oregon, Washington).

Pro tip: Undocumented workers who work in the United States are entitled to protection under federal wage/hour and federal anti-discrimination laws, which means that their undocumented status is generally not a defense to liability under those statutes (although it may affect the measure of damages available).

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in sexual harassment and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2017 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

Happy 50th Birthday, ADEA!

By Kathleen Jennings (kjj@wimlaw.com)

This year, the Age Discrimination in Employment Act (ADEA) turns 50 years old. To mark this milestone, the EEOC held a public meeting on Tuesday entitled “The ADEA @ 50 – More Relevant Than Ever.” At the meeting, several experts addressed the issue of age discrimination in employment from different perspectives.

Laurie McCann, a senior attorney for AARP Foundation Litigation, cited hiring discrimination and mandatory retirement as persistent problems that older workers face across industries. She called on the EEOC to strengthen ADEA protections and enforcement. “The ADEA should not be treated as a second-class civil rights statute. On this 50th Anniversary of the ADEA, AARP urges the EEOC to take bolder action to ensure older workers are treated fairly at work…” McCann told the Commission.

Sara Czaja, director of the Center for Research and Education on Aging and Technology Enhancement (CREATE), explained that research refutes assumptions that older workers are less productive, technophobic or inflexible. Czaja discussed practical ways employers could do a better job of integrating older workers into the workforce by recognizing their value and by matching their skills and abilities with work environments. “Unfortunately, numerous negative stereotypes about older workers still exist that often prevent or have a negative impact on employment opportunities for older people. These stereotypes can also prevent organizations from realizing the wealth of positive assets, such as wisdom, experience, and reliability that older workers can bring to the table,” said Czaja.

Nearly two-thirds of workers age 55-64 report their age as a barrier to getting a job, as reported by a 2017 AARP survey. A comprehensive study in 2015 using resumes for workers at various ages found significant discrimination in hiring for female applicants and the oldest applicants, according to a co-author of the research, Patrick Button, Assistant Professor of Economics at Tulane University and a researcher with the National Bureau of Economic Research Disability Research Center (NBER).

Reality check: In 2000, 23 percent of the U.S. population was in the 45-84 age group. By 2010, this portion will rise to 37.2 percent, and by 2020 it will hit 39 percent, according to the U.S. Census Bureau. A survey from Pew Research found that 70 percent of today’s workers expect to work after retirement. In other words, the number of workers who are protected by the ADEA is increasing.

And don’t forget—it is not only workers who are getting older—jury pools are getting older also. Age discrimination trials present a special challenge because most everyone knows how it feels to get older, or has close relatives or friends who are older, which means jury members are more likely to be sympathetic to age discrimination plaintiffs.

The Takeaway: Employers can prevent age discrimination claims (or minimize liability when the inevitable hard-headed plaintiff pursues a meritless claim) in the same ways that it can prevent other discrimination claims:

  • Be consistent and as objective as possible in discipline and evaluating employee performance
  • Train supervisors and managers to avoid stereotyping employees on the basis of age (or any other protected characteristic)
  • Don’t ignore performance or discipline issues just because an employee has worked at the company “forever;” address them when they occur, just as the company should do with all employees.
  • Monitor interview questions to ensure that none of them are intended to screen out older workers (or other protected class workers).

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in sexual harassment and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2017 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

This is What Happens When You Can’t Keep Your Story Straight

By Kathleen Jennings (kjj@wimlaw.com)

I’ve said it before, and I will say it again: when an employer makes a decision to terminate an employee, the decisionmaker(s) had better be able to articulate all of the reasons for the termination decision from the date of that decision forward. When a decisionmaker articulates different or conflicting reasons for a termination decision, if that decision ends up in litigation, that inconsistency is going to result in a jury trial.

A recent example comes to us from Pennsylvania and involves Fedex. Last week, a federal court in Pennsylvania denied Fedex’s motion for summary judgment in an age discrimination case brought by a 45-year-old sales executive, Justine Larison, who was fired by FedEx and replaced with a 38-year-old. (Larison v. Fedex Corp. Servs., Inc., 2017 BL 196229, E.D. Pa., No. 16-5921, 6/9/17). The evidence showed that two younger sales executives—ages 34 and 31—did worse than Larison on the sales metric used to justify Larison’s discharge, but they weren’t terminated. Their common supervisor testified that she expected more of Larison because she’d been in the position eight years versus their two years and one year, respectively.

But then the 34-year-old supervisor also testified that the “entire sales team” was held to the same standard, regardless of experience. There’s the inconsistency. Because of this inconsistency, the district court decided that a jury should review whether Larison was held to a higher standard because of her age.

Note also that that the gap in age between Larison and her replacement was only 7 years. The Court found that the gap in age between a discharged worker and her replacement doesn’t need to be overly lengthy—even as short as 5 years– to support a claim under the Age Discrimination in Employment Act.

Pro tip: Be thorough in identifying the reasons for an employment decision before the decision is communicated to the employee. If there is any concern about whether the decision could result in litigation, have qualified counsel review the decision and the reasons for it. Document those reasons. Be consistent in communicating those reasons to the employee and afterwards.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in sexual harassment and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2017 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.

 

Paid Leave? Leave in Lieu of Overtime Pay? Changes May Be Coming.

 

By Kathleen Jennings (kjj@wimlaw.com)

Is a federal law requiring employee paid leave in the works? It appears that House Republicans are expected to introduce a bill shielding employers from state and local paid leave requirements if they offer workers a certain amount of paid time off for family and medical reasons. The amount of leave that a business would have to offer to be eligible for the safe harbor would vary based on number of employees. Business groups have been advocating for federal legislation addressing paid leave as an alternative to the various state and local leave laws that are being passed. Basically, for covered employers, the federal law would preempt state and local laws, giving those eligible employers and their HR personnel one federal law to comply with. Some states, including New York and Washington, are already working on passing their own paid leave laws. The Society for Human Resource Management is one of the organizations that has been lobbying in support of a federal law. It is too to tell whether this legislation, and if so, in what form. We will provide updates as necessary.

Another Republican Wage-Hour initiative is a bill that was introduced earlier this year by House Republicans to allow companies to offer employees compensatory time (time off) rather than time-and-a-half pay. The Working Families Flexibility Act of 2017, if passed, would allow nonexempt workers to earn compensatory time off at a rate of no less than 1.5 times every hour for which they would have otherwise earned overtime pay. The bill also would

  • cap the amount of comp time employees could accrue at 160 hours,
  • require employers to pay out annually any unused comp time,
  • give employers 30 days to pay out any unused comp time beyond 80 hours, and
  • require employers to pay out any unused comp time accrued upon termination for any reason.

The House Bill (H.R. 1180) passed on May 2 without any Democratic support. The bill is now in the Senate (S. 801), where it will need some Democratic support in order to pass. There is significant opposition to this bill, so it is by no means a done deal. We will also monitor this legislation and provide updates as necessary.

Kathleen Jennings, Principal is a principal in the Atlanta office of Wimberly, Lawson, Steckel, Schneider, & Stine, P.C. She defends employers in sexual harassment and other employment litigation and provides training and counseling to employers in employment matters. She can be contacted at kjj@wimlaw.com.

©2017 Wimberly Lawson

The materials available at this blog site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this Web site or any of the e-mail links contained within the site do not create an attorney-client relationship between Wimberly Lawson and the user or browser. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney.