Westlaw Journal EMPLOYMENT

Transcription

Westlaw Journal
EMPLOYMENT
Litigation News and Analysis • Legislation • Regulation • Expert Commentary
WHAT’S INSIDE
WAGE AND HOUR
6 Gym says it paid instructor
well over minimum wage
Oram v. SoulCycle LLC
(S.D.N.Y.)
7 Appeals court indicates
workers not entitled
to class arbitration
VOLUME 28, ISSUE 3 / SEPTEMBER 11, 2013
WAGE AND HOUR
Judge rejects copycat wage suit against supermarket chain
A California federal judge has denied plaintiffs’ request for discovery and dismissed a
proposed class action alleging wage-law violations against WinCo Foods, noting that
he dismissed a nearly identical suit in 2011 against the supermarket chain filed by the
same attorneys.
CONTINUED ON PAGE 19
Richards v. Ernst & Young
(9th Cir.)
BACKGROUND CHECKS
8 EEOC expert’s report
full of ‘analytical fallacies,’
judge says
EEOC v. Freeman (D. Md.)
CLASS-ACTION WAIVERS
9 Arbitration cost doesn’t
invalidate waiver in FLSA suit,
2nd Circuit says
Raniere v. Citigroup (2d Cir.)
BENEFITS
10 Labor Department begins to
implement Supreme Court’s
DOMA ruling
EMPLOYMENT WEBSITE
11 Career website says court
must toss users’ suit
Ward v. TheLadders.com
(S.D.N.Y.)
REUTERS/Mike Blake
In 2009 assistant store managers at a grocery store alleged the company violated California’s wage laws by failing to pay for overtime, rest and meal
breaks, or provide proper wage statements.
LABOR LAWS
12 7-Eleven evades labor laws,
lawsuit says
Atalla v. 7-Eleven Inc. (D.N.J.)
WORKERS’ COMPENSATION
13 Workers’ compensation
governs painter’s tort claims
against employer
Devero v. N. Am. Bus Indus.
(Ala. Civ. App.)
COMMENTARY
Silence is golden: How Oxford Health affects
class arbitration
Stuart Boyarsky of Kasowitz, Benson, Torres & Friedman reviews the U.S. Supreme
Court’s recent decision in Oxford Health Plans v. Sutter and considers its impact on
the availability of class arbitration under agreements that do not explicitly prohibit
class-wide dispute resolution.
SEE PAGE 3
41391558
Westlaw Journal Employment
Published since May 1986
TABLE OF CONTENTS
Wage and Hour: Williams v. WinCo Foods
Judge rejects copycat wage suit against supermarket chain (N.D. Cal.)...........................................................1
Publisher: Mary Ellen Fox
Executive Editor: Donna M. Higgins
Managing Editor Tricia Gorman
Tricia.Gorman@thomsonreuters.com
Managing Desk Editor: Robert W. McSherry
Commentary: By Stuart Boyarsky, Esq., Kasowitz, Benson, Torres & Friedman Esq.
Silence is golden: How Oxford Health affects class arbitration......................................................................... 3
Wage and Hour: Oram v. SoulCycle LLC
Gym says it paid instructor well over minimum wage (S.D.N.Y.).......................................................................6
Senior Desk Editor: Jennifer McCreary
Desk Editor: Sydney Pendleton
Wage and Hour: Richards v. Ernst & Young
Appeals court indicates workers not entitled to class arbitration (9th Cir.)..................................................... 7
Westlaw Journal Employment
(ISSN 2155-594X) is published biweekly by
Thomson Reuters.
Background Checks: EEOC v. Freeman
EEOC expert’s report full of ‘analytical fallacies,’ judge says (D. Md.)..............................................................8
Thomson Reuters
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Customer service: 800-328-4880
Class-Action Waivers: Raniere v. Citigroup
Arbitration cost doesn’t invalidate waiver in FLSA suit, 2nd Circuit says (2d Cir.)...........................................9
For more information, or to subscribe,
please call 800-328-9352 or visit
west.thomson.com.
Labor Laws: Atalla v. 7-Eleven Inc.
7-Eleven evades labor laws, lawsuit says (D.N.J.).............................................................................................12
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or personal use, or the internal or personal
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Drive, Danvers, MA 01923; 978-750-8400;
www.copyright.com.
Benefits (DOMA)
Labor Department begins to implement Supreme Court’s DOMA ruling..................................................... 10
Employment Website: Ward v. TheLadders.com
Career website says court must toss users’ suit (S.D.N.Y.).................................................................................11
Workers’ Compensation: Devero v. N. Am. Bus Indus.
Workers’ compensation governs painter’s tort claims against employer (Ala. Civ. App.)..............................13
Recently Filed Complaints from Westlaw Court Wire..................................................................................14
Labor and Public Employment News.............................................................................................................16
News in Brief......................................................................................................................................................18
Case and Document Index...............................................................................................................................20
How to Find Documents on Westlaw
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2 | WESTLAW JOURNAL
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EMPLOYMENT
© 2013 Thomson Reuters
COMMENTARY
Silence is golden: How Oxford Health affects class arbitration
By Stuart Boyarsky, Esq.
Kasowitz, Benson, Torres & Friedman
Arbitration typically is pursued because
parties believe that they can obtain a quicker
and less expensive resolution than through
litigation in the courts.1 Class actions enable
claimants, who may not have the means to
bring individual actions, to aggregate their
claims, thereby making an action feasible.2 It
is no surprise then that plaintiffs have sought
to use class arbitration, which is intended
to encompass the benefits of both class
actions and arbitration, as a form of dispute
resolution.
However, the circuit courts of appeals are
split on whether class arbitration is available
at all when the arbitration agreement is
silent on the matter. Nonetheless, when
the U.S. Supreme Court was recently given
the opportunity to address this circuit split
in Oxford Health Plans v. Sutter,3 the court
declined to do so. In fact, the court’s recent
decision in Oxford Health appears to have
merely reaffirmed the role of the arbitrator
as a nearly unchallengeable decision maker,
while leaving the issue of the availability of
class arbitration for another day.
EARLY APPROVAL OF CLASS
ARBITRATION IN BAZZLE
Prior to the Supreme Court’s ruling in Green Tree
Financial Corp. v. Bazzle,4 the majority of circuit
courts had held that whether class arbitration
is available when the agreement is silent on the
matter was for the courts, and not an arbitrator,
to decide.5 This appeared to change with the
Supreme Court’s ruling in Bazzle, in which a
plurality of the court held that “whether the
contracts forbid class arbitration” was an issue
for the arbitrator to decide.6
The plaintiffs in Bazzle brought a putative
class action in South Carolina state trial
court alleging violations of consumer loan
agreements.7 The defendants moved to
The Oxford Health decision appears to have
merely reaffirmed the role of the arbitrator as a
nearly unchallengeable decision maker.
compel arbitration, which the court granted
while also granting the plaintiffs’ motion
for class certification.8
The arbitrator
subsequently ruled in favor of the class,
and the trial court confirmed the award.9
The defendants appealed to the South
Carolina Supreme Court, arguing that
class-based arbitration was not provided
for in the agreements and was therefore
impermissible.10
The state high court
disagreed, holding that since the agreements
were silent with respect to class arbitration,
they did not prohibit it.11
Bazzle was viewed by the legal community
as establishing a presumption that a broad
arbitration clause would permit class
arbitration absent a specific prohibition.16 In
fact, in response to this ruling, the American
Arbitration Association adopted rules
establishing requirements for maintaining
class arbitration,17 while corporations began
inserting language into their arbitration
agreements prohibiting the use of class
procedures altogether.18
The U.S. Supreme Court granted certiorari
to consider whether the South Carolina
Supreme Court’s holding was consistent
with the Federal Arbitration Act, 9 U.S.C.
§ 1.12 In vacating the state court’s decision,
the Supreme Court explained that the
parties’ agreements stated that it was the
arbitrator who was to decide “all disputes,
The Supreme Court appeared to reverse
direction in its 2010 decision in Stolt-Nielsen
S.A. v. AnimalFeeds International Corp.19 That
case involved a putative class arbitration
brought by a customer pursuant to a broad
arbitration clause in a standard shipping
contract after Stolt-Nielsen, a shipping
company, had been investigated by the U.S.
Department of Justice on charges of illegal
price-fixing.20
Stuart Boyarsky, an attorney in the New York office of Kasowitz,
Benson, Torres & Friedman, is a member of the arbitration committee
of the New York City Bar Association and the Young Arbitrators Forum
of the International Chamber of Commerce. The views expressed
herein are solely those of the author.
claims, or controversies arising from or
relating to this contract.”13 Thus, it is the
role of the arbitrator, and not the courts, to
decide whether the agreement should be
interpreted as permitting class arbitration.14
The Supreme Court therefore remanded the
case to the arbitrator to decide the issue.15
THE COURT BACKTRACKS
During the arbitration, the parties stipulated
that the arbitration clause was “silent”
on the question of class arbitration.21 The
arbitrator certified the class, on the ground
that the arbitration clause allowed for class
arbitration.22 That ruling was appealed to
federal district court, which vacated the
class certification, holding that the arbitrator
had acted in manifest disregard of the
law.23 The 2nd U.S. Circuit Court of Appeals
reversed, reinstating the class arbitration,
and the Supreme Court granted certiorari
SEPTEMBER 11, 2013
n
VOLUME 28
n
ISSUE 3 | 3
on the question of “whether imposing class
arbitration on parties whose arbitration
clauses are ‘silent’ on that issue is consistent
with the Federal Arbitration Act.”24
The high court noted that under Section
10(a)(4) of the FAA, an arbitration decision
may be vacated in cases in which “‘the
arbitrator exceeded his powers,’ for the task
of an arbitrator is to interpret and enforce a
contract, not to make public policy.”25 The
court held that the silence of the arbitration
agreement before it on the issue of class
arbitration did “not simply mean that the
clause made no express reference to class
arbitration,” but that there had been “no
agreement … reached” on that issue at all.26
In finding that the arbitrator had exceeded
its authority, the court reasoned that because
arbitration is inherently consensual, “a party
may not be compelled under the FAA to
submit to class arbitration unless there is
a contractual basis for concluding that the
party agreed to do so.”27
However, the Stolt-Nielsen ruling may
not have had the chilling effect on class
arbitration that many expected.
As the 2nd Circuit soon explained in Jock v.
Sterling Jewelers, the parties in Stolt-Nielsen
had agreed not only that the contract was
silent as to class arbitration, but also that
they “had not reached any agreement on
the issue of class arbitration” at all — neither
explicitly nor implicitly.28
This was not the case in Sterling Jewelers, in
which the plaintiffs argued that, although
the arbitration agreement was silent to the
arbitration, there was an implied agreement
to allow class arbitration.29
After the
arbitrator granted class certification, holding
that the arbitration agreement “cannot be
construed to prohibit class arbitration,” the
district court, citing Stolt-Nielsen, vacated
on the ground that the plaintiffs’ concession
that the agreement lacked explicit class
authorization was in fact a concession that
the agreement lacked implicit authorization
as well.30
A divided 2nd Circuit reversed, holding that
“[t]he plaintiffs’ concession that there was no
explicit agreement to permit class arbitration
… is not the same thing as stipulating that
the parties had reached no agreement on
the issue,”31 and that inasmuch as “the
record demonstrates unequivocally that the
arbitrator operated within the bounds of her
authority in reaching her decision,” it was not
4 | WESTLAW JOURNAL
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EMPLOYMENT
in manifest disregard of the laws and should
be upheld.32
brought in a court,” it must be permitted in
arbitration.41
In Reed v. Florida Metropolitan University, the
5th Circuit disagreed.33 The arbitrator in Reed
found that the parties had implicitly agreed
to class arbitration, since the arbitration
agreement stated that “any dispute” would
be arbitrated and that “any remedy” available
at law would be available in the arbitration.34
While the arbitration proceeded, the
Supreme Court issued its ruling in StoltNielsen that “a party may not be compelled
under the FAA to submit to class arbitration
unless there is a contractual basis for
concluding that the party agreed to do so,”42
and Oxford asked the arbitrator to reconsider
In Oxford Health, the Supreme Court refrained from
addressing the core question: whether the
arbitrator’s interpretation of the parties’ agreement
to permit class arbitration was correct.
However, on appeal, the 5th Circuit found
that the “any dispute” clause reflected only
an agreement to arbitrate and was “not
a valid contractual basis upon which to
conclude that the parties agreed to submit to
class arbitration.”35 Similarly, as to the “any
remedy” clause, the court found that “while
a class action may lead to certain types of
remedies or relief, a class action is not itself
a remedy.”36
Thus, the 5th Circuit held, “the arbitrator
lacked a contractual basis upon which to
conclude that the parties agreed to authorize
class arbitration. At most, the agreement
in this case could support a finding that the
parties did not preclude class arbitration, but
under Stolt-Nielsen this is not enough.”37
Faced with this split among circuits, the
Supreme Court recently had the opportunity
to clarify its holding in Stolt-Nielsen and settle
whether an agreement permitting the use of
class arbitration must be explicit.
OXFORD HEALTH
Oxford Health Plans. v. Sutter involved
a putative class action in state court by
physicians who alleged that Oxford had
failed to make “full and prompt” payment
in violation of their agreements and state
laws.38 Oxford moved to compel arbitration
pursuant to a clause in the agreements, and
the state court granted the motion.39
The arbitrator allowed the arbitration to
proceed on a class basis, on the ground
that the agreement permitted in arbitration
everything that it prohibited from being
brought in court.40 In the arbitrator’s view,
since class action “is plainly one of the
possible forms of civil action that could be
his class arbitration decision.43 The arbitrator
issued a new opinion holding that StoltNielsen had no effect since, unlike in StoltNielsen, the parties before him disputed the
meaning of their contract and in his view the
agreement authorized class arbitration.44 On
appeal, the district court declined to vacate
the arbitrator’s decision, and the 3rd Circuit
affirmed.45
The Supreme Court granted certiorari to
address the split among the 2nd, 3rd and
5th circuits on whether an arbitrator who has
allowed class arbitration in circumstances in
which the agreement is silent on the matter
”exceeded [his] powers” under Section 10(a)(4)
of the FAA.46 In unanimously affirming the
3rd Circuit, the high court ruled that under
Section 10(a)(4), the “sole question” for a
reviewing court “is not whether the arbitrator
construed the parties’ contract correctly,
but whether he construed it at all.”47 As a
result, the Supreme Court refrained from
addressing the core question: whether the
arbitrator’s interpretation of the parties’
agreement to permit class arbitration was
correct. As Justice Elena Kagan explained,
“[t]he arbitrator’s construction holds,
however good, bad, or ugly … Oxford chose
arbitration, and it must now live with that
choice.”48
IMPLICATIONS OF OXFORD HEALTH
On its face, Oxford Health appears to be a
victory for proponents of class arbitration.
However, on a practical level, since the
drafting of the Oxford contract in 1998, many
arbitration agreements have been adjusted
to explicitly exclude class arbitration; this
practice recently was approved by the
Supreme Court in American Express Co. v.
Italian Colors Restaurant.49
This should come as no surprise given that
businesses had been using mandatory
arbitration provisions specifically in order to
prevent class actions.50
Moreover, the issue of whether a class
action is permissible in arbitration at all
still remains. The Supreme Court in StoltNielsen had stated that in class arbitration
“[t]he arbitrator’s award no longer purports
to bind just the parties to a single arbitration
agreement, but adjudicates the rights of
absent parties as well.”51 But if arbitration
is consensual, how can a party ever have a
class of absent class members?52 Perhaps
recognizing this issue, the Court in Oxford
noted, “We would face a different issue if
Oxford had argued … that the availability
of class arbitration is a so-called ‘question
of arbitrability’” such as whether a valid
arbitration agreement exists or whether a
binding arbitration clause applies to a certain
type of controversy.53
Following Oxford Health,
the issue of whether a
class action is permissible
in arbitration at all
still remains.
These types of questions, the high court
explained, are for a court, and not an
arbitrator, to decide.54
However, since
Oxford had agreed that the arbitrator should
determine whether its contract authorized
class procedures, the court was denied the
opportunity to address this issue.55
Therefore the legacy of Oxford Health will
probably not be a liberal interpretation
of arbitration agreements that are silent
as to class arbitration, but instead will be
continued litigation on whether the use of
class action in arbitration is permitted at all.
WJ
NOTES
See, e.g., Nolde Bros. v. Bakery Workers, 430
U.S. 243, 254 (1977) (stating that arbitration
is “a prompt and inexpensive resolution of …
disputes”).
1
See, e.g., Amchem Prods. v. Windsor, 521 U.S.
591, 617 (1997) (“class action[s] … overcome the
problem that small recoveries do not provide
incentive for any individual to bring a solo action
… by aggregating the relatively paltry potential
recoveries into something worth [an attorney’s]
labor” (quoting Mace v. Van Ru Credit Corp., 109
F.3d 338, 344 (7th Cir. 1997)) (internal quotation
marks omitted)).
Id. at 1766.
26
2
Oxford Health Plans v. Sutter, No. 12-135, 133
S. Ct. 2064 (June 10, 2013).
3
539 U.S. 444 (2003).
4
William H. Baker, Class Action Arbitration,
10 Cardozo J. Conflict Resol. 335, 346-47 n.55
(2009).
5
539 U.S. at 452-53. Although there were
four separate opinions in Bazzle, there was no
majority opinion.
6
Id. at 447-49.
7
Id. at 1775 (emphasis in original).
27
646 F.3d 113, 120 (2d Cir. 2011), cert. denied,
132 S. Ct. 1742 (2012) (quoting Stolt-Nielsen, 130
S. Ct. at 1768).
28
Id. at 116-17.
29
Id. at 117-18.
30
Id. at 123.
31
Id. at 124-25.
32
681 F.3d 630, 645-46 (5th Cir. 2012).
33
Id. at 641-42.
34
Id. at 642-43.
35
36
Id. at 644.
37
Id. at 1-2.
38
Id. at 2.
Id. at 449.
39
Id.
40
8
9
Id.
Id.
Id. at 449-50.
41
Id. at 450.
42
10
11
Id.
12
Id. at 3 (quoting Stolt-Nielsen, 559 U.S. at
684) (emphasis in original). Id.
43
13
Id. at 451-52.
Id.
44
14
Id. at 454.
Id. at 3-4.
45
15
D. Matthew Allen & Rebecca N. Shwayri,
The Supreme Court’s Class Action Arbitration “Do
Over” in Stolt-Nielsen, Bloomberg L. Rep. – Class
Actions, Vol. 3, No. 7 (2010).
Id. at 4.
46
16
Id.
17
Myriam Gilles, Opting Out of Liability: The
Forthcoming Near-Total Demise of the Modern
Class Action, 104 Mich. L. Rev. 373, 410 (2005).
18
130 S. Ct. 1758 (2010).
19
Id. at 9.
47
Id. at 8.
48
Slip Op. No. 12-133 (U.S. June 20, 2013)
(holding that an arbitration clause that prohibits
class actions is enforceable).
49
Edward Wood Dunham, The Arbitration
Clause as Class Action Shield, 16 Franchise L J. 141,
141 (1997).
50
Stolt-Nielsen, 130 S. Ct. at 1775.
Id. at 1764-65.
51
Id. at 1766.
52
20
21
Id.
22
Id.
23
Id. at 1764, 1766-67.
24
Id. at 1767-68 (quoting 9 U.S.C. § 10(a)(4)). The other grounds for vacating an award under
Section 10(a) are “corruption, fraud, or undue
25
means in procurement of the award, evident
partiality or corruption in the arbitrators, [and]
specified misconduct on the arbitrators’ part.” See Wall Street Assocs. v. Becker Paribas Inc.,
27 F.3d 845, 848 (2d Cir. 1994).
See 21 Williston on Contracts § (4th ed.)
(arbitration award “is not conclusive as to parties
who did not join in the submission in the first
instance, or ratify the award after its issuance”).
Id. at *9-10, n.2.
53
Id.
54
Id.
55
SEPTEMBER 11, 2013
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WAGE AND HOUR
Gym says it paid instructor well over minimum wage
SoulCycle, owner of spinning gyms in New York and California, says a New York federal court should dismiss a former
instructor’s wage-and-hour class action because the plaintiff’s own evidence shows he was paid more than the state
minimum wage.
Oram v. SoulCycle LLC et al., No. 13-cv-2976,
memorandum in support of motion to
dismiss filed (S.D.N.Y. July 31, 2013).
In addition to seeking dismissal of the
plaintiff’s New York state law claims, the
company also asks the court to sever its
California-based subsidiaries and the suit’s
California state law claims from the action.
Nick Oram, who was a spin instructor for
Soul Cycle from 2009 until April this year,
sued the company May 2 in the U.S. District
Court for the Southern District of New York,
alleging multiple violations of New York and
California wage-and-hour laws.
The suit alleges the fitness company routinely
and unlawfully understates employee work
hours, fails to compensate employees fully
for work and refuses to reimburse workers for
mandatory job-related expenses.
SoulCycle’s wage statements only include
each spin teacher’s actual class time but
fail to account for the significant number of
hours spent each week performing other
tasks such as attending mandated training
sessions and meetings and preparing for
classes, the suit says.
Oram seeks damages on behalf of two
statewide classes of instructors: those who
have worked for SoulCycle in New York since
2007 and those who have worked for the
company in California since 2009.
In a memorandum in support of its motion
to dismiss and sever some of the suit’s
claims, the company says Oram makes only
“conclusory allegations,” without supporting
evidence that he was not paid a minimum
wage.
According to the memo, New York law does
not require an employer to pay on an hourly
basis, only that total wages, when broken
down by the number of hours worked, equals
at least the minimum wage of $7.25 per hour.
Oram failed to provide specific information
about what hours and weeks he allegedly
was not paid minimum wage, the company
says. Further, the wage figures presented
in his complaint show he was paid between
$43 and $60 per hour, “significantly above
any of the applicable minimum-wage rates,”
according to the memo.
Additionally, the company says, Oram was
paid for other work-related tasks under
his contract. The contract states that
“compensation was ‘for all services rendered
by employee in connection with employee’s
employment.’”
Oram also failed to support his allegation
that he was not reimbursed for business
expenses, according to SoulCycle’s memo.
The law requires such reimbursement only
if not doing so would reduce an employee’s
pay below minimum wage, and evidence
shows Oram made significantly more than
the minimum, the company says.
Finally, the company argues, the claims made
under California law should be removed from
the suit in the interest of “judicial economy”
and to avoid jury confusion.
A New York judge should not preside over
California law claims, and witnesses and
documentation related to those claims are in
California, SoulCycle says.
According to the company, there is also
no “overarching legal claims” — such as a
claim under federal law — that covers both
statewide classes.
“Plaintiff’s own proposal of two separate and
distinct classes, with separate and distinct
legal claims … highlights the severability of
the claims in question,” the memo says. WJ
Attorneys:
Plaintiff: Douglas H. Wigdor and David E.
Gottlieb, Thompson Wigdor LLP, New York
Defendant: William J. Anthony and Joanna S.
Smith, Jackson Lewis LLP, New York
REUTERS/Shannon Stapleton
A fitness instructor leads a SoulCycle class at its Union Square location in New York. A former spin instructor for SoulCycle in New York
and California says the fitness company routinely and unlawfully understates employee work hours and fails to compensate employees
fully for work.
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EMPLOYMENT
Related Court Document:
Defendants’ memorandum: 2013 WL 4013721
See Document Section B (P. 24) for the
memorandum.
WAGE AND HOUR
The NLRB countered that Italian Colors, like
earlier high court cases, was not an employment
case and that federal labor laws necessitate a
different outcome in labor matters.
Appeals court indicates workers
not entitled to class arbitration
“Like all other Supreme Court decisions
addressing the contours of the [Federal
Arbitration Act], American Express does not
address that core NLRA right,” NLRB attorney
Linda Dreeben wrote in a letter to the 5th Circuit.
(Reuters) – Arbitration agreements can bar workers from taking collective action, the 9th U.S. Circuit Court of Appeals has indicated, rejecting the position
taken by a former Ernst & Young employee in a wage-and-hour dispute.
The 2nd U.S. Circuit Court of Appeals
disagrees. In two employment cases earlier
this month, it cited Italian Colors when
enforcing arbitration agreements containing
class-action waivers.
Richards v. Ernst & Young, No. 11-17530,
2013 WL 4437601 (9th Cir. Aug. 21, 2013).
The court on Aug. 21 reversed a district
court ruling that the professional services
firm had waived its right to arbitration by
failing to assert it as a defense during prior
proceedings.
The three-judge panel unanimously found
that former employee Michelle Richards
could not rely on the National Labor
Relations Board’s 2012 decision in the case
D.R. Horton, 357 NLRB No. 184 (Jan. 3, 2012),
to argue that the arbitration agreement she
signed was unenforceable.
In earlier proceedings, Richards had not cited
the D.R. Horton ruling or argued that the
National Labor Relations Act precluded such
a contract, the panel said.
The 9th Circuit panel quoted the Supreme
Court opinion in Italian Colors in deciding
that Ernst & Young’s arbitration agreement
should be enforced.
REUTERS/Lucas Jackson
The 9th Circuit reversed a district court ruling that Ernst & Young
had waived its right to arbitration by failing to assert it as a
defense during prior proceedings. The firm’s headquarters in
New York are shown here.
The decision is the latest blow to attempts made
by the NLRB, workers and their attorneys
to differentiate arbitration agreements signed by
workers from those agreed to in other contexts.
“We also note that the only court of appeals,
and the overwhelming majority of the district
courts, to have considered the issue have
determined they should not defer to the
NLRB’s decision in D.R. Horton because it
conflicts with explicit pronouncements of the
Supreme Court,” the panel wrote.
Court of Appeals became the first federal
appeals court to reject the board’s rationale
in its January opinion in Owen v. Bristol Care
Inc., 702 F.3d 1050 (8th Cir. Jan. 27, 2013).
The 9th Circuit opinion is the latest blow to
attempts made by the NLRB, workers and
their attorneys to differentiate arbitration
agreements signed by workers from those
agreed to in other contexts.
The 9th Circuit panel is “essentially following
Owen and a couple of district courts that
got the analysis wrong,” Max Folkenflik, the
attorney for Richards, said in an interview.
The NLRB’s decision in the D.R. Horton case
was widely viewed as the agency’s response to
a string of U.S. Supreme Court cases blessing
standard contracts containing arbitration
agreements with class-action waivers.
TO SEEK A REHEARING
Folkenflik said he planned to seek a rehearing
before the panel or the full circuit.
The board said labor cases were different
because workers cannot be forced to waive
the right they have to take collective action
under the National Labor Relations Act, 29
U.S.C. § 151.
Also cropping up in employment cases
before federal appeals courts is the Supreme
Court’s June decision in American Express
v. Italian Colors Restaurant, 133 S. Ct. 2304
(2013), which enforced an arbitration
agreement with a class action waiver signed
by merchants, even though they said it would
be too cost-prohibitive to bring individual
claims.
Homebuilder D.R. Horton has challenged
the NLRB’s decision in the 5th U.S. Circuit
Court of Appeals, which has yet to issue a
ruling. In the interim, the 8th U.S. Circuit
D.R. Horton’s lawyers said in a June 24
letter to the 5th Circuit that Italian Colors
“emphatically rejects” the NLRB’s arguments
and “effectively disposes” of the case.
It said the high court made clear that courts
must enforce arbitration agreements in
claims that allege a violation of a federal
statute — unless the Federal Arbitration Act’s
mandate has been overridden by a contrary
congressional command.
Folkenflik said courts had misinterpreted the
idea of congressional command.
“The legislative history of the Federal
Arbitration Act makes absolutely clear
that Congress did not intend to cover any
employment agreements,” Folkenflik said.
Ernst & Young counsel declined to comment
on the case. WJ
(Reporting by Amanda Becker)
Attorneys:
Plaintiff-appellee: Max Folkenflik, Folkenflik &
McGerity, New York; H. Tim Hoffman and Ross L.
Libenson, Hoffman Libenson Saunders & Barba,
Oakland, Calif.; Arthur William Lazear and
Morgan Mack, Lazear Mack, Oakland
Defendant-appellant: Rex Heinke, Gregory
William Knopp and Katharine Jane Galston, Akin Gump Strauss Hauer & Feld, Los Angeles
Opinion: 2013 WL 4437601
SEPTEMBER 11, 2013
n
VOLUME 28
n
ISSUE 3 | 7
BACKGROUND CHECKS
EEOC expert’s report full of
‘analytical fallacies,’ judge says
An expert report that the Equal Employment Opportunity Commission used to support allegations that a company’s
use of background checks discriminates against black job applicants contains a “plethora of errors” and is unreliable,
a Maryland federal judge has ruled.
Equal Employment Opportunity Commission v. Freeman, No. 09-cv2573, 2013 WL 4464553 (D. Md., Greenbelt Div. Aug. 9, 2013).
U.S. District Judge Roger Titus of the District of Maryland dismissed
the EEOC’s suit, calling the expert report an “egregious example
of scientific dishonesty” because it included a small, handpicked
sampling of job applicants, which skewed the statistics.
A case alleging a company’s use of background and credit checks is
discriminatory must provide specific details on what information was
used and how it was used against a particular group, according to the
judge’s opinion.
Simply using criminal or credit information during the hiring process
does not violate Title VII of the Civil Rights Act of 1964, 42 U.S.C.
§ 2000e, the judge said, adding that what matters is how specific
information is used.
“Careful and appropriate use of criminal history information is an
important — and in many cases essential — part of the employment
process,” Judge Titus said.
The judge called the EEOC’s expert report an
“egregious example of scientific dishonesty.”
The EEOC sued Freeman, a company that organizes conventions,
trade shows and exhibits across the country, following an investigation
into its hiring practices and use of criminal and credit history checks.
The agency investigated after a female employee complained she
was not hired following a credit check. According to the opinion, the
EEOC’s investigation concluded that Freeman’s checks discriminated
against black applicants.
The checks have a disparate impact on blacks because blacks have a
higher rate of conviction than whites, the EEOC said.
According to the opinion, Freeman began using checks in the hiring
process in 2001. The kind of check conducted depended on the type
of job: The company ran criminal background checks on all applicants
but ran credit checks only on those whose jobs dealt with money.
Freeman ran the checks after a job was offered and accepted but
before an individual started working. The period examined in the
checks also was limited, the opinion said.
According to the opinion, the EEOC did not challenge the company’s
procedures but alleged the checks in general were discriminatory. In
support of its allegations, the agency submitted a report by industrial
8 | WESTLAW JOURNAL
n
EMPLOYMENT
psychology expert Kevin R. Murphy, purportedly to show that blacks
failed the background and credit checks at a higher rate than white
applicants.
Judge Titus granted Freeman’s motion to exclude the testimony as
unreliable, finding the expert report was flawed and insufficient.
The biggest problem with the report is that Murphy did not base it on a
random sampling of data, Judge Titus said.
Freeman supplied information, including lists of applicants and
background-check data, on nearly 60,000 individuals, the opinion said,
but Murphy’s testing database included only 2,014 names, some of
which were duplicates.
In addition, the judge found, most of the information Murphy used came
from material the EEOC gathered during its original investigation.
Murphy “cherry-picked” only a few individuals’ information from the
material Freeman presented during discovery, the opinion said.
Murphy “deliberately ignored” information from the discovery materials
and filled his database with older information and, as a result, the
report does not correspond to the relevant period that is the focus of
the EEOC’s suit, the opinion said.
“Murphy’s database is so full of material flaws … its contents must
necessarily be disregarded,” Judge Titus said.
He also granted Freeman’s motion for summary judgment, finding that
the EEOC failed to identify a specific practice that caused a disparate
impact on black applicants.
Providing evidence of the general results of Freeman’s hiring practices
is not enough, the opinion said, because the company follows a multistep process and considers multiple factors.
According to the judge, courts have regularly held that when a
company policy has many parts, a plaintiff must specify which part is
discriminatory.
“There are simply no facts here to support a theory of disparate impact
resulting from any identified, specific practice of the defendant,” Judge
Titus said. WJ
Attorneys:
Plaintiff: Debra Michele Lawrence, Ronald Lynn Phillips and Kate Northrup,
EEOC, Baltimore; Keyana Capri Laws, Melanie Marie Peterson and Philip
Matthew Kovnat, EEOC, Philadelphia
Defendant: W. Randolph Teslik, Donald R. Livingston and John T. Koerner,
Akin Gump Strauss Hauer & Feld, Washington
Opinion: 2013 WL 4464553
CLASS-ACTION WAIVERS
Arbitration cost doesn’t invalidate waiver
in FLSA suit, 2nd Circuit says
Citigroup can compel employees to arbitrate individual Fair Labor Standards
Act claims, the 2nd Circuit has ruled, citing a recent U.S. Supreme Court
decision that said a contract’s class-action waiver is not invalidated based
simply on the cost of individual arbitration.
Raniere et al. v. Citigroup Inc. et al., No.
11-5213-cv, 2013 WL 4046278 (2d Cir. Aug.
12, 2013).
The 2nd U.S. Circuit Court of Appeals
reversed a New York federal judge’s decision
to deny Citigroup’s motion to compel
arbitration based on the Supreme Court’s
decision in American Express Co. v. Italian
Colors Restaurant, 133 S. Ct. 2304 (2013), and
its own recent ruling in a similar wage suit.
In Italian Colors the high court ruled 5-3 that
federal arbitration law does not invalidate a
contract’s class-action waiver just because
an individual says the costs of arbitration
would prohibit vindication of his rights.
Here, Citigroup appealed a decision by the
U.S. District Court for the Southern District of
New York to deny the company’s motion to
force employees to resolve their claims under
the Fair Labor Standards Act, 29 U.S.C.
§ 201, and New York labor law, N.Y. Lab. Law
§ 190, through individual arbitration.
Tara Raniere and Nichol Bodden, who work
as home lending specialists for Citi, sued the
company in April 2011 alleging it failed to pay
them overtime even though they worked well
over 40 hours a week.
The plaintiffs sought damages in an FLSA
collective action and a class action under
state law for hundreds of loan consultants
who worked for the financial institution since
April 2008 without overtime compensation.
Citigroup filed a motion to compel individual
arbitration based on a provision in its
employment contract. U.S. District Judge
Robert W. Sweet found that the contract’s
class-action waiver was unenforceable and
denied the motion.
REUTERS/Mike Segar
Citigroup appealed a decision by the U.S. District Court for the Southern District of New York to deny the company’s motion to force
employees to resolve their claims under the Fair Labor Standards Act.
The waiver cannot be enforced under the
“effective vindication” doctrine, the judge said,
because the arbitration costs for individuals
would prevent them from vindicating their
rights.
Citigroup appealed.
not constitute the elimination of the right to
pursue that remedy.’”
In its ruling, the panel also cited its Aug.
9 decision in Sutherland v. Ernst & Young,
No. 12-304, 2013 WL 4033844 (2d Cir.
Aug. 9, 2013).
The 2nd Circuit had previously agreed
with Judge Sweet’s reading of the effective
vindication doctrine, finding in a 2009
decision in the Italian Colors litigation that
class waivers violate the Federal Arbitration
Act, 9 U.S.C. § 1, because of the cost of
individual arbitration.
In Sutherland, a wage suit similar to the one
against Citigroup, the appeals court applied
the Italian Colors decision when it ruled that
the language of the FLSA does not make
class waivers unenforceable.
However, the appellate panel said, the
Supreme Court’s recent Italian Colors
decision overturns that.
Attorneys:
Plaintiffs-appellees: Douglas H. Wigdor,
Thompson Wigdor LLP, New York
According to the appellate opinion, “the
Supreme Court specifically noted that
‘the fact that it is not worth the expense
involved in proving a statutory remedy does
“[T]he FLSA does not preclude the waiver of
collective action claims,” the panel said. WJ
Defendants-appellants: Sam S. Shaulson,
Morgan, Lewis & Bockius, New York
Opinion: 2013 WL 4046278
SEPTEMBER 11, 2013
n
VOLUME 28
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ISSUE 3 | 9
BENEFITS (DOMA)
Labor Department begins to implement
Supreme Court’s DOMA ruling
(Reuters) – Labor Secretary Tom Perez in an internal email sent to department employees Aug. 9 outlined how the agency has begun to respond to a
June U.S. Supreme Court decision that extended federal benefits to those in
same-sex marriages.
WESTLAW JOURNAL
CLASS ACTION
This reporter covers the
proliferation of the class
action lawsuit in numerous
topic areas at the federal,
state, and appeals court
levels. Topics covered
include consumer fraud,
securities fraud, products
liability, automotives,
asbestos, pharmaceuticals,
tobacco, toxic chemicals
and hazardous waste,
medical devices, aviation,
and employment claims.
Also covered is legislation,
such as the 2005 Class
Action Fairness Act and
California’s Proposition
64, and any new federal
and state legislative
developments and the
effects these have on class
action litigation.
Perez called the court’s rejection of the
Defense of Marriage Act in United States v.
Windsor, 133 S. Ct. 2675 (2013), a “historic
step toward equality for all American
families.” He then described how the
Department of Labor has begun working
with other agencies to “implement this ruling
as swiftly and smoothly as possible.”
The agency has already updated several
documents to remove references to DOMA
and reiterate that those in same-sex
marriages can now take spousal leave
under the Family and Medical Leave Act.
It is the first of “many steps” that will be
taken over the coming months, Perez said in
a copy of the email reviewed by Reuters.
The Family and Medical Leave Act,
29 U.S.C. § 2601, which became law in 1993,
allows covered workers to take up to 12 weeks
per year of unpaid leave to care for a new
child, tend to a sick family member or deal
with personal illness. Employers subject to
the act must provide uninterrupted health
insurance coverage during the workers’
absence and allow them to return to their
jobs.
Current guidance from the department’s
Wage and Hour Division that interprets
which private-sector employees are covered
by the Family and Medical Leave Act
defines a “spouse” as someone whose
legal marriage is recognized by the state in
which they live, the department confirmed.
Given that only 13 states and the District
of Columbia now recognize same-sex
marriages, there is uncertainty about
whether and how the law will apply to
married same-sex couples living in states
that do not recognize such unions.
“I would expect that you’ll see additional
guidance coming, some clarification on
exactly that subject,” said Jeffrey Tanenbaum,
the San Francisco-based partner who heads
Nixon & Peabody’s labor and employment
practice.
The agency has already
updated several documents
to remove references to
DOMA and reiterate that
those in same-sex marriages
can now take spousal
leave under the Family and
Medical Leave Act.
“It’s not uncommon in this day and age for
employees to work across state borders,” he
added.
Perez’s email also noted that the U.S. Office
of Personnel Management had recently
announced it will extend benefits to federal
employees in same-sex marriages and that
he “encouraged” department employees
to review that guidance and begin taking
advantage of the benefits now available to
them.
“By extending unemployment compensation,
health insurance and other important
benefits to federal employees and their
families, regardless of whether they are in
same-sex or opposite-sex marriages, the
Obama administration is making real the
promise of this important decision,” Perez
said in the email. WJ
(Reporting by Amanda Becker)
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about our print and online subscription packages,
or call 800.328.9352 to subscribe.
10 | WESTLAW JOURNAL
n
EMPLOYMENT
EMPLOYMENT WEBSITE
Career website says court must toss users’ suit
Subscription-based career website TheLadders.com says it never guaranteed
that all posted jobs were open positions or paid over $100,000 and, therefore,
a New York federal court must toss consumers’ putative class-action suit.
Therefore, the plaintiffs say, they received
nothing from TheLadders.com in exchange
for their premium membership fees.
Additionally, TheLadders.com scammed
consumers through its résumé critiquing
services, which cost $300 to $1,850, the
putative class members say.
Rather than provide substantive feedback,
the critiques were merely form responses
completed by amateurs with no professional
résumé writing experience, the suit says.
According to TheLadders’ dismissal motion,
the plaintiffs have now had three chances
to amend their suit against the company,
but they have still failed to point to any
contractual term that it breached.
Courtesy of theladders.com
The lawsuit alleges TheLadders.com scammed consumers when it falsely promised in taglines and advertisements that its website featured
hand-screened job opportunities that paid over $100,000. A screen shot the website is shown here.
Ward et al. v. TheLadders.com Inc., No. 1:13cv-01605, motion to dismiss filed (S.D.N.Y.,
Foley Square Aug. 5, 2013).
TheLadders.com’s terms of use explicitly
disclaimed any warranties about the quality
of its job listings and résumé critiquing
services, according to the motion the
company filed with the U.S. District Court for
the Southern District of New York.
When Barbara Ward and the other putative
class plaintiffs signed up for premium
memberships, they agreed to these terms,
which also stated that their only remedy
against the website would be to cancel their
subscriptions, the company argues.
Therefore, the federal court in Manhattan
must dismiss the consumers’ lawsuit for
breach of contract, bad faith, and violations
of New York, California and Washington
consumer protection laws.
According to the putative class members’
second amended complaint, TheLadders.
com scammed consumers when it falsely
promised in taglines and advertisements
that its website featured hand-screened job
opportunities that paid over $100,000.
Unlike its competitors such as Monster.com
and CareerBuilder.com, TheLadders.com
only provided access to these allegedly highend job postings to users who signed up for
premium memberships, which cost either
$30 per month or $180 annually, the suit
says.
When the plaintiffs applied for the positions
through TheLadders.com, however, they
discovered that the jobs did not offer salaries
over $100,000 or that the listings were
outdated, the complaint says.
Despite the website’s promises, the suit
maintains, “TheLadders had no process in
place to ensure that these posted positions
ever truly existed, remained open, or that
they met its minimum advertised annual
compensation criteria of only $100k+.”
Instead, they rely on TheLadders.com
advertising slogans to support their
allegations, the website says, noting “that
advertisements are not contractual terms.”
Further, the plaintiffs and others in the
putative class explicitly agreed to terms
that waived any promises about the quality,
availability or timeliness about the listings
found on its site, the company says.
The plaintiffs allege that they paid for
“worthless” services, but they continued
to “renew memberships for upwards of
seven years without ever canceling their
memberships, much less requesting refunds
to which they could have been entitled,” the
company argues.
Therefore, it asks the Manhattan federal
court to dismiss the consumers’ lawsuit. WJ
Attorneys:
Plaintiffs: Joseph I. Marchese, Scott A. Bursor,
Neal J. Deckant and Yitzchak Kopel, Bursor &
Fisher, New York
Defendant: Maura Barry Grinalds, Patrick G.
Rideout and Robert L. Dunn, Skadden, Arps,
Slate, Meagher & Flom, New York
Related Court Documents:
Second amended complaint: 2013 WL 3993005
Motion to dismiss: 2013 WL 4101978
SEPTEMBER 11, 2013
n
VOLUME 28
n
ISSUE 3 | 11
LABOR LAWS
7-Eleven evades labor laws, lawsuit says
Five 7-Eleven store operators allege in a New Jersey federal court complaint
that the convenience store chain misrepresents its relationship with employees
to avoid labor laws.
Atalla v. 7-Eleven Inc., No. 3:13-cv-4578,
complaint filed (D.N.J. July 30, 2013).
The lawsuit, filed in the U.S. District Court for
the District of New Jersey, says 7-Eleven also
manipulates and ignores terms of franchise
agreements and targets certain stores for
intimidation and bullying tactics.
“[The] franchise agreement mischaracterizes
the parties’ relationship as one of an
independent
contractor/franchisor
relationship,” the suit says, adding that the
operators’ real relationship is “one of de facto
employment.”
The lawsuit alleges breach of the implied
covenant of good faith and fair dealing under
the franchise agreement and violations of
the New Jersey’s Fair Labor Standards Act,
Franchise Practices Act and Law Against
Discrimination.
The employment relationship, the complaint
contends, is evidenced by 7-Eleven’s high
level of corporate control in such things as
processing payroll and other accounting
from the corporate office, regulating vendor
and product supply, requiring franchisees
wear 7-Eleven uniforms, and intense daily
oversight by franchise zone managers.
The Franchise Practices Act violations
alleged include steady increases in franchise
fees making it difficult to sell stores, routinely
ignoring the 60-day termination notice
and forcing operators to place extraneous
inventory orders (called “channel-stuffing”).
The complaint further claims 7-Eleven
targets stores operated by Asians, Middle
The plaintiffs say 7-Eleven intentionally misclassifies its store
operators as independent contractors to avoid laws requiring
minimum and overtime wages, medical insurance, and tax
withholding for Social Security.
New Jersey franchisee/operators Tamer G.
Atalla, Neil Naik, Hemang Patel, Jayesh
Patel and Kalpana B. Patel say they formed
an association with 150 other franchisees
to stop 7-Eleven’s “deceptive and ill-willed
practices.”
Easterners and first-generation Americans,
perceived by the company as being
ignorant of U.S. laws, with unannounced
store visits, fake investigations, untrue
allegations of labor violations and derogatory remarks about their nationalities. The
suit says 7-Eleven uses these intimidating
and bullying tactics to interrupt day-to-day
operations and cause the store operators to
“live and work in fear.”
The plaintiffs say 7-Eleven intentionally
misclassifies its store operators as
independent contractors but treats them as
employees. According to the suit, 7-Eleven
store operators in New Jersey perform the
same functions and duties as operators of
other convenience store chains in the state,
who are properly classified as employees.
The suit seeks a court order declaring the
plaintiffs and all franchisees similarly situated
as de facto employees, an order preventing
7-Eleven from terminating franchise
agreements or removing equipment without
proper and legal notice, and awards of
compensatory and consequential damages,
as well as attorney fees and costs. WJ
As an undisclosed employer, 7-Eleven is able
to increase corporate profits and avoid labor
laws requiring minimum and overtime wages,
medical insurance, and tax withholding for
Social Security, the suit says.
Complaint: 2013 WL 4014118
n
EMPLOYMENT
REUTERS/Stringer
A recent lawsuit accuses 7-Eleven of manipulating and ignoring
terms of franchise agreements and targeting certain stores for
intimidation and bullying tactics.
WORKERS’ COMPENSATION
Workers’ compensation governs painter’s
tort claims against employer
A former bus painter who says he suffered lung damage and other injuries
from on-the-job exposure to toxic chemicals cannot pursue intentional-tort
claims against his employer outside the workers’ compensation regime,
an Alabama appellate court has decided.
Devero v. North American Bus Industries,
No. 2120133, 2013 WL 4034502 (Ala. Civ.
App. Aug. 9, 2013).
A unanimous five-judge panel of the Civil
Court of Appeals held Aug. 9 that the state
Worker’s Compensation Act, Ala. Code
§ 25-5-1, is the exclusive remedy available
to Anthony Devero, who accused North
American Bus Industries of “egregious
conduct and disregard for the safety and lives
of employees.”
The Calhoun Circuit Court, where Devero
filed his suit in 2005, correctly entered
summary judgment for NABI, the panel said,
finding that the plaintiff failed as a matter of
law to show that the exposure had caused his
injuries.
Devero initially filed suit with seven
colleagues as co-plaintiffs. But after the trial
The plaintiff said his exposure to various toxic chemicals, solvents and spray-paint particles at work as a bus painter caused him to
develop pneumoconiosis, also called “black lung” disease.
claims against NABI since they fall outside
the scope of the workers’ compensation law.
An employee injured on the job cannot get around the Worker’s
Compensation Act by pleading that an employer willfully
intended to injure him, the appellate court said.
The Alabama Court of Civil Appeals rejected
both arguments.
court ordered the plaintiffs to file separate
suits, calling their first complaint a “hodgepodge of allegations” designed to circumvent
the reach of the Worker’s Compensation Act,
Devero filed an amended complaint under
the workers’ comp law.
NABI moved for summary judgment, saying
no reasonable juror could infer from Devero’s
evidence — which included medical records,
deposition testimony and a short-term
disability application — that he suffered from
an employment-related disease.
In the amended complaint, he said his
exposure to various toxic chemicals, solvents
and spray-paint particles at work caused
him to develop pneumoconiosis, also called
“black lung” disease, which can develop from
the inhalation of certain dusts.
The trial court granted the motion in May
2012 without issuing any factual findings or
legal conclusions, according the appellate
opinion.
According to Devero’s suit, a co-worker
at NABI accidentally spilled a hazardous
substance called “Oxy 10” on his head and
legs, causing him to be hospitalized. Devero
now has a shortened life expectancy, he said.
On appeal, Devero argued that trial judge
improperly made credibility calls without
hearing the testimony of additional witnesses
he offered, denying him his day in court.
Devero also said the court should have
allowed him to proceed with intentional-tort
Although the panel disagreed with NABI’s
assertion that Devero had raised his
intentional-tort claims for the first time
on appeal, it found that the exclusivity
provisions of the Worker’s Compensation Act
nevertheless barred those claims.
An employee injured on the job cannot get
around the law by pleading that an employer
willfully intended to injure him, the appellate
court said. WJ
Attorneys:
Appellant: Beverly O. Barber, Pell City, Ala.
Appellee: Linda W. Pope, Wainwright Pope &
McMeekin, Birmingham, Ala.
Opinion: 2013 WL 4034502
NABI’s brief: 2013 WL 1717521
Devero’s brief: 2013 WL 1401527
See Document Section C (P. 35) for the opinion.
SEPTEMBER 11, 2013
n
VOLUME 28
n
ISSUE 3 | 13
RECENTLY FILED COMPLAINTS FROM WESTLAW COURT WIRE*
Case Name
Court
Mansfield v.
Cal. Super. Ct.
Southwest Airlines (San Diego)
2013 WL 4714168
Docket #
37-2013-
00064667-
CU-OE-CTL
Taylor v. City
of Burgin E.D. Ky.
2013 WL 4603907
5:13-cv-282
Martino v.
Community
Television of D. Colo.
Colorado 2013 WL 4496928
1:13-cv2267
Watkins v. I.G. Inc. Minn. Dist. Ct. 2013 WL 4479651
(Hennepin)
Ibrahem v.
American
Minn. Dist. Ct. Dental Partners
(Hennepin)
of Minnesota 2013 WL 4479646
Morris v. Precise
Cal. Super. Ct. Enterprises LLC (Los Angeles)
2013 WL 4434299
De Leon v. Pfizer Inc.
D.P.R.
2013 WL 4434312
27-cv-1315361
27-cv-1315280
BC518971
3:13-cv1632
Filing
Date
Allegations
8/28/13
Class action. Southwest Airlines failed to
provide suitable itemized wage statements
to employees and to timely pay all their
wages upon termination, in violation of the
California Labor Code.
8/29/13
The mayor and council members of the city
of Burgin, Ky., sexually harassed employee
Compensatory and punitive
by making sexual comments and unwanted
damages, interest, fees and
touching of the plaintiff’s body, resulting
costs
in severe mental and emotional distress,
humiliation and damages to the plaintiff.
8/22/13
Community Television of Colorado
terminated plaintiff’s employment solely
because of his insolvency and bankruptcy
filing.
Actual, compensatory and
punitive damages
8/22/13
Class action. I.G. Inc. violated the
Minnesota Fair Labor Standards Act by
failing to pay employees, whose work
involves cleaning Target Field, from checkin time until their shift began and for meal
breaks that plaintiffs did not receive.
An amount to be
determined including
unpaid wages, costs and
fees
8/21/13
Defendant employee of American Dental
Partners of Minnesota falsely alleged and
communicated that plaintiff employee
administered a prescription-only drug
In excess of $50,000, plus
without approval. The company wrongfully
costs, fees and interest
terminated the plaintiff based on the
false allegation and discriminated against
plaintiff based on her national origin in
violation of Minnesota Human Rights Act.
8/20/13
Precise Enterprises failed to pay wages and
to provide itemized wage statements prior
to the plaintiff’s wrongful termination.
Punitive and exemplary
damages, declaratory and
injunctive relief, penalties,
interest, fees and costs
8/20/13
Class action. Pfizer failed to pay for
overtime compensation to production
employees working in the defendant’s
Puerto Rico Barceloneta facility, in violation
of the Fair Labor Standards Act.
Class certification;
statutory, compensatory
and liquidated damages;
penalties; interest; fees and
costs
Damages Sought
Statutory damages,
statutory penalties,
interest, fees and costs
*Westlaw Court Wire is a Thomson Reuters news service that provides notice of new complaints filed in state and federal courts nationwide,
sometimes within minutes of the filing.
n
EMPLOYMENT
RECENTLY FILED COMPLAINTS FROM WESTLAW COURT WIRE*
Salaam v. Universal
Music Group Inc.
2013 WL 4434209
Asbury v. County
of Los Angeles
2013 WL 4434204
Craig v. Chivas
USA Soccer LLC
2013 WL 4208350
Mena v. Northeast
Conference of the
7th Day Adventist
Community Affairs
2013 WL 4208388
Doran v. WalMart Stores Inc.
2013 WL 4208177
S.D.N.Y.
Cal. Super. Ct.
(Los Angeles)
Cal. Super. Ct.
(Los Angeles)
E.D.N.Y.
D. Or.
1:13-cv5822
BC518368
BC518300
1:13-cv4588
1:13-cv-1429
8/19/13
Class action. Universal Music Group’s Bad
Boy Entertainment violated the Fair Labor
Standards Act and New York labor law by
wrongfully classifying interns as exempt
from minimum wages.
Damages equal to the
amount of unpaid wages,
interest, attorney fees, costs
8/16/13
Los Angeles County and XPRT Staffing
failed to prevent supervisor from sexually
harassing plaintiff employee during her
pregnancy in exchange for some alleged
employment benefits, causing her to suffer
emotional distress.
General, compensatory, and
punitive damages; interest;
fees and costs
8/14/13
Chivas USA Soccer discriminated against
plaintiff employee based on race and
terminated plaintiff in retaliation for her
complaints regarding the defendant’s
abusive conduct.
Compensatory, special,
general and punitive
damages; declaratory and
injunctive relief; penalties;
interest; fees, and costs
8/14/13
Supervisor of Northeast Conference of
the 7th Day Adventist Community Affairs
discriminated against employee because
of her gender and in retaliation for her
complaint about coordinator’s sexual
harassment.
Punitive damages,
disbursements, interest, fees
and costs
8/15/13
Wal-Mart Stores terminated plaintiff’s
employment as pharmacist because of his
disability and impairment, in violation of the
Americans with Disabilities Act.
$50 million in punitive
damages, $615,000 in
damages, $500,000
in emotional distress
damages, costs
*Westlaw Court Wire is a Thomson Reuters news service that provides notice of new complaints filed in state and federal courts nationwide,
sometimes within minutes of the filing.
SEPTEMBER 11, 2013
n
VOLUME 28
n
ISSUE 3 | 15
LABOR AND PUBLIC EMPLOYMENT NEWS
ACCESS TO INSURANCE REPRESENTATIVES IS NOT
REQUIRED UNDER PERA
Ruling: A Pennsylvania Labor Relations Board hearing examiner
declined to find that a state employer unlawfully denied a union’s
request to permit a licensed AFLAC insurance representative to
enter state property to personally explain the benefits to individual
employees and witness their signing for those benefits.
What it means: A state employer has no duty to ensure the access of
AFLAC representatives because such access is not a protected activity
under the Public Employee Relations Act.
Pennsylvania State Corrections Officers Association v.
Commonwealth, 45 PPER 28 (Pa. Labor Relations Bd., Hearing
Exam’r Aug. 19, 2013).
COURT RULES SUPERVISOR’S COMPLAINTS ABOUT
MANAGEMENT ARE UNPROTECTED SPEECH
Ruling: A transit operations supervisor was not engaged in protected
speech when she made threatening statements to a bus operator
during a counseling session. The Ohio Court of Appeals affirmed a
trial court’s grant of summary judgment in favor of a regional transit
authority that terminated the supervisor for openly expressing her
disagreement with management’s decision to reinstate a bus operator
who repeatedly violated the employer’s prohibition against using a cell
phone while operating a bus.
What it means: When public employees make statements pursuant
to their official duties, they are not speaking as citizens for First
Amendment purposes. Therefore, their communications are not
insulated from employer discipline. The 6th U.S. Circuit Court of
Appeals, which covers Ohio, considers the impetus for the employee’s
speech, its setting, content and whether the speech is directed up the
chain of command. Here, the employee’s statements and concerns
regarding the employer’s cell phone policy stemmed from her
counseling session with the reinstated driver and were made pursuant
to her official duties.
Rodriguez v. Greater Dayton Regional Transit Authority et al.,
31 OPER 43 (Ohio Ct. App. Aug. 9, 2013).
APPELLATE COURT FINDS NO MITIGATING FACTORS
WARRANTING TOLLING OF LIMITATIONS PERIOD
Ruling: The Ohio Court of Appeals affirmed a trial court’s decision to
dismiss a terminated refuse collector’s petition for a writ of mandamus.
The former employee sought to compel the State Employment
Relations Board to vacate the dismissal of her claim of breach of the duty
of fair representation against her exclusive representative. However,
the appellate court affirmed the lower court’s determination that the
charge was untimely filed and that no mitigating circumstances were
present that warranted the equitable tolling of the limitations period.
What it means: Because the events giving rise to the unfair practice
charge occurred more than 90 days before the filing of the instant
charge, the appellate court concluded the trial court did not abuse
its discretion in dismissing the unfair-practice charge as untimely.
Moreover, where record evidence showed the former employee knew
or should have known of the alleged improper conduct or actual
damages suffered as a result thereof by the date of her termination,
the court reasoned that equitable tolling of the limitations period was
not warranted.
Davis v. State Employment Relations Board et al., 31 OPER 51 (Ohio
Ct. App. Aug. 15, 2013).
CAR DEALERSHIP LAWFULLY WITHDRAWS RECOGNITION
BASED ON AMBIGUOUS PETITION
Ruling: Notwithstanding any ambiguity in a petition titled “We wish to
longer have Union representation at Martin Dealership,” the National
Labor Relations Board Division of Advice concluded the circumstances
surrounding the petition established that the employees unanimously
rejected the employer’s best contract offer. Therefore, the employer
lawfully withdrew recognition based on that petition because objective
evidence clarified the employees’ actual sentiments, the Division of
Advice ruled.
What it means: Although the NLRB’s decision in Levitz Furniture
Company of the Pacific v. United Food & Commercial Workers Union et
al., 333 NLRB 717 (Mar. 29, 2001), places the burden on an employer
to demonstrate actual loss of majority support, the general counsel
has a longstanding policy of declining to issue a complaint when
there is sufficient objective evidence that the union has lost majority
support. Here, evidence that a handwritten “no” was added to the
typed statement at the top of the petition, after the employees signed
it, demonstrated an actual loss of majority status that was unrebutted
by the union.
Martin Dealerships, 41 NLRB AMR 11 (N.L.R.B. July 2, 2013).
UNION DIDN’T BAR MEMBERS FROM EXPRESSING VIEWS
Ruling: In a proposed decision, California’s Public Employment Relations
Board’s administrative law judge dismissed an unfair-practice charge.
The ALJ found that the individual charging party lacked standing to
raise a duty of fair representation claim as to the settlement of certain
grievances. The circumstances of the case did not indicate that the
union breached its duty of fair representation by failing to provide
notice and an opportunity to bargain with unit employees to express
their views regarding class size agreements, the ALJ determined.
What it means: The ALJ observed that, pursuant to the holding of Service
Employees International Union, Local 99 (Kimmett), 3 PERC 10134 (Cal.
Pub. Employment Relations Bd. 1979), the duty of fair representation
implies some consideration of the views of various groups of employees
and some access for communication of those views, but there is no
requirement for the establishment of formal procedures.
Lucas v. Rio Teachers Association, 38 PERC 22 (Cal. Pub.
Employment Relations Bd., A.L.J. July 11, 2013).
n
EMPLOYMENT
LABOR AND PUBLIC EMPLOYMENT NEWS
UNION PRESIDENT’S INADVERTENT VIOLATION OF
EMAIL PROCEDURES DOESN’T EQUAL UNFAIR PRACTICE
LRB, STATE PANEL REAFFIRMS STANDARD FOR
DEFERRING CERTAIN CLAIMS TO ARBITRATION
Ruling: The Florida Public Employees Relations Commission accepted
a hearing officer’s recommended dismissal of an unfair-labor-practice
charge. In the charge, the employer-school district alleged that the
union violated Fla. Stat. §§ 447.501(2)(a) and 447.501(2)(c) through
certain actions by the union president. The hearing officer found
no facts showing that the union president bypassed the employer’s
negotiator. The hearing officer determined that the union did not
repudiate contract provisions regarding communications through the
union president’s inadvertent violations of email protocols.
Ruling: The Illinois Labor Relations Board, State Panel upheld the
executive director’s decision regarding an unfair-practice charge. The
union asserted, in the charge, that the municipal employer violated
provisions of the Payday Loan Reform Act through certain adverse
employment actions pertaining to a clerical worker. The LRB upheld
the dismissal of a portion of the charge as unsupported by evidence of
anti-union animus. Upon rejecting the union’s challenge to a deferral
of its retaliation claim to arbitration, the LRB explained that it would
continue to contemplate deferral of retaliation charges when presented
in contexts similar to the Dubo standard. Dubo Mfg. Corp. and United
Steelworkers of America et al., 142 NLRB 431 (1963).
What it means: In considering the unfair-practice allegation regarding
the union’s alleged misuse of the employer’s email system, the
hearing officer considered the law regarding contract repudiation. The
hearing officer explained that repudiation arises from the law involving
unilateral change and implies that a party is actively asserting that it
not bound by a particular contract provision.
Orange County School District v. Orange County Classroom Teachers
Association, 40 FPER 81 (Fla. Pub. Employees Relations Comm’n
July 18, 2013).
What it means: The LRB reaffirmed the utilization of the standard
from Dubo for deferring retaliation claims to arbitration. Under that
standard, deferral is proper if the parties have already voluntarily
submitted their dispute to their agreed-upon grievance arbitration
procedure, that procedure culminates in final and binding arbitration,
and a reasonable chance exists that the arbitration process will resolve
the dispute.
Service Employees International Union, Local 73 and Village of Oak
Park, 30 PERI 51 (Ill. Labor Relations Bd., State Panel July 19, 2013).
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SEPTEMBER 11, 2013
n
VOLUME 28
n
ISSUE 3 | 17
NEWS IN BRIEF
OIL AND GAS COMPANIES SETTLE PREGNANCY
DISCRIMINATION SUIT
DENVER HOTEL, STAFFING AGENCY PAY $56,000 IN BACK
PAY, OVERTIME
Laredo, Texas-based Platinum P.T.S. Inc. and Texans Oil & Gas Services
have agreed to pay a former employee $100,000 to resolve a lawsuit
alleging Platinum fired her in 2011 following a recent pregnancy. The
Equal Employment Opportunity Commission filed the suit on behalf of
Vanessa Castaneda. The agency said Platinum violated Castaneda’s
civil rights, under the federal Pregnancy Discrimination Act, when it
fired her after she requested time off for a medical procedure after a
miscarriage. Castaneda sued Texans Oil & Gas, a company managed
by Platinum’s owner, in a companion suit. As part of a two-year consent
decree settling the suit, the companies have agreed to implement a
nondiscrimination policy and to not discriminate against employees
based on sex and pregnancy.
The Grand Hyatt Denver and Xclusive Staffing, which provides the hotel
temporary workers, have paid 52 employees a total of $55,700 after an
investigation by the U.S. Department of Labor found the companies
failed to pay workers minimum wage and overtime. According to an
Aug. 13 Labor Department statement, the companies violated the
Fair Labor Standards Act by not compensating employees for work
performed before and after a shift and during meal and rest breaks.
In addition to back pay, the companies paid more than $11,000 in civil
penalties. “The hotel and motel industry employs many low-wage
workers who … are vulnerable to disparate treatment. The [Labor
Department] is concerned about the severity of noncompliance in this
industry,” the statement said.
Equal Employment Opportunity Commission v. Platinum P.T.S. Inc.,
No. 12-139, consent decree entered (S.D. Tex. Aug. 8, 2013).
FAST-FOOD CHAIN PAYS WOMEN LESS THAN MEN,
EEOC SAYS
The Checkers fast-food restaurant chain routinely pays female workers
less than male counterparts and schedules the women for fewer hours,
the Equal Employment Opportunity Commission says in a Philadelphia
federal court suit. According to the complaint, Market Burgers, the
chain’s owner, pays female cashiers and shift managers up to $2.75
per hour less than their male counterparts are paid even though they
perform the same tasks. The company also suppresses women’s pay
by scheduling them for fewer hours than male employees receive, the
EEOC says. Although the women request full-time work, they are
scheduled for 20 to 25 hours a week, while the male employees are
scheduled for more than 30 hours, the suit says. The EEOC seeks lost
wages and compensatory and punitive damages on behalf of female
employees, in addition to injunctive relief to prevent the company from
discriminating against women in the future.
Equal Employment Opportunity Commission v. Market Burgers
LLC d/b/a Checkers, No. 13-4651, complaint filed (E.D. Pa. Aug. 12,
2013).
MICHIGAN CONTRACTOR TO PAY $107,000 IN BACK PAY
FOR FEDERAL ROADS PROJECT
A U.S. Department of Labor administrative law judge has ordered
William J. Lang Land Clearing Inc. to pay $107,000 in back pay to 23
employees who were misclassified into a lower-paid group of heavy
equipment operators and denied prevailing wages on a federally
funded project for the Michigan Department of Transportation. The
judge’s order came after a Detroit federal court and a federal appeals
court had found the heavy equipment company liable for the wages.
William J. Lang Land Clearing Inc. v. U.S. Dep’t of Labor, No. 07-2423,
285 Fed. Appx. 277 (6th Cir. 2008). According to an Aug. 13 Labor
Department statement, the company violated federal contractor laws
by failing to pay its equipment operators the prevailing wage rate and
correctly calculate overtime compensation.
CONTRACTOR ILLEGALLY FIRED AIR FORCE RESERVIST,
SUIT SAYS
Building contractor Regal Contractors LLC improperly fired a senior
airman in the Air Force Reserves from his job as a maintenance
technician last year after he returned from required training, a
Delaware federal court lawsuit says. Lon Fluman, who is represented
by the U.S. attorney in Wilmington, says he followed federal notification
requirements to inform Regal that he was leaving for the training, but
the company fired him anyway, in violation of the Uniformed Services
Employment and Reemployment Rights Act of 1994. USERRA
protects service members’ jobs when they miss time because of military
obligations. Fluman seeks unspecified lost wages and benefits, plus
damages.
Fluman v. Regal Contractors LLC et al., No. 13-cv-1415, complaint
filed (D. Del. Aug. 14, 2013).
n
EMPLOYMENT
NEWS IN BRIEF
POSTAL SERVICE TO IMPROVE SIGN LANGUAGE ACCESS
FOR DEAF EMPLOYEES
WISCONSIN PRISON GUARDS SEEK MILLIONS
IN BACK PAY
A District of Columbia federal judge has approved a plan by the U.S.
Postal Service to expand access to sign language communications
for deaf and hearing-impaired employees as part of a settlement of a
decade-long class action aimed at improving safety communications.
According to the judge’s opinion, more than 6,000 USPS employees
with hearing problems sued the government over concerns they were
not properly informed of safety issues related to the anthrax mail
scare in the wake of the 9/11 terrorist attacks. Under the settlement,
the USPS will reform procedures nationwide and use technology
so deaf and hearing-impaired employees have access to workplace
communications. The class members will share $3 million in
compensatory damages.
A Wisconsin Department of Corrections policy that limits an officer’s
compensation to only time spent at an assigned post violates state
wage laws, a proposed state court class action on behalf of more than
3,000 current and former correctional officers says. The suit, filed
in the Dane County Circuit Court, seeks millions of dollars in unpaid
wages and overtime pay. According to the suit, the 2012 policy, which
says officers are not paid until they are at their assigned posts and
ready to assume their duties, prevents compensation for work done
before a shift, such as checking out equipment. The suit alleges the
policy violates state law, which requires payment for time worked,
including overtime.
Hubbard et al. v. Donahoe, No. 03-1062, 2013 WL 3943495 (D.D.C.
July 31, 2013).
Opinion: 2013 WL 3943495
Copycat wage suit
CONTINUED FROM PAGE 1
Williams et al. v. WinCo Foods et al., No.
13-146, 2013 WL 4067594 (N.D. Cal. Aug.
1, 2013).
U.S. District Judge Charles R. Breyer of the
Northern District of California ruled that
the allegations made and the requested
discovery already were presented to the court
in the previous suit.
The ruling is unusual because “there are
very few cases in which a court denies class
certification prior to any discovery,” WinCo
attorney Brandon R. McKelvey of Seyfarth
Shaw said in a statement.
In 2009 assistant store managers at WinCo
alleged the company violated California’s
wage laws by failing to pay for overtime, rest
and meal breaks, or provide proper wage
statements.
The plaintiffs sought damages on behalf of
a class of day- and night-shift managers at
WinCo stores in California. The company
operates 87 grocery stores in seven western
states and has more than 14,000 employees.
In August 2011 Judge Breyer denied class
certification, finding that individual questions
predominated over class-wide issues
Bitter et al. v. Wall et al., No. 13-cv-2529, complaint filed (Wis. Cir.
Ct., Dane County Aug. 6, 2013).
because the evidence required examination
of individual members’ job duties. Gales v.
WinCo Foods, No. 09-5813, 2011 WL 3794887
(N.D. Cal. Aug. 26, 2011).
In the current suit, newly named plaintiffs
represented by the same plaintiff attorneys
sought unspecified damages on behalf of
a smaller proposed class of only night-shift
assistant managers.
Judge Breyer further ruled that removing
the day-shift personnel and combining
two night shift subclasses from Gales did
not distinguish the suit from the previous
litigation.
He concluded his ruling by addressing
the possibility that plaintiffs could continue
to try to sue WinCo by varying the proposed
class.
“The plaintiffs have not addressed the
reasoning underlying this court’s previous denial
of class certification,” the judge said.
However, according to Judge Breyer, “the
plaintiffs have not addressed the reasoning
underlying this court’s previous denial of
class certification.”
He denied the plaintiffs’ request to conduct
discovery before a decision on class
certification.
The discovery, including
interviews with class members and a listing
of assistant manager tasks, was done
previously for Gales, he said.
“Given that the class allegations in Gales
were not substantiated and plaintiffs have
not changed the allegations from the Gales
litigation, there is no reason to permit
duplicative discovery,” the judge said.
While the court cannot prevent future suits
by WinCo assistant managers, the judge
said, “what happened in this case aptly
illustrates why future copycat suits would be
ill-advised.” WJ
Attorneys:
Plaintiffs: Robin G. Workman, Qualls & Workman,
San Francisco
Defendants: Brandon R. McKelvey, Seyfarth
Shaw, Sacramento, Calif.
Williams order: 2013 WL 4067594
Gales opinion: 2011 WL 3794887
See Document Section A (P. 21) for the Williams
order.
SEPTEMBER 11, 2013
n
VOLUME 28
n
ISSUE 3 | 19
CASE AND DOCUMENT INDEX
Atalla v. 7-Eleven Inc., No. 3:13-cv-4578, complaint filed (D.N.J. July 30, 2013)................................................................................................................ 12
Bitter et al. v. Wall et al., No. 13-cv-2529, complaint filed (Wis. Cir. Ct., Dane County Aug. 6, 2013)............................................................................... 19
Davis v. State Employment Relations Board et al., 31 OPER 51 (Ohio Ct. App. Aug. 15, 2013).......................................................................................... 16
Devero v. North American Bus Industries, No. 2120133, 2013 WL 4034502 (Ala. Civ. App. Aug. 9, 2013).......................................................................13
Document Section C......................................................................................................................................................................................................35
Equal Employment Opportunity Commission v. Freeman, No. 09-cv-2573, 2013 WL 4464553 (D. Md., Greenbelt Div.
Aug. 9, 2013)..........................................................................................................................................................................................................................8
Equal Employment Opportunity Commission v. Market Burgers LLC d/b/a Checkers, No. 13-4651, complaint filed
(E.D. Pa. Aug. 12, 2013)........................................................................................................................................................................................................ 18
Equal Employment Opportunity Commission v. Platinum P.T. S. Inc., No. 12-139, consent decree entered (S.D. Tex. Aug. 8, 2013)................................ 18
Fluman v. Regal Contractors LLC et al., No. 13-cv-1415, complaint filed (D. Del. Aug. 14, 2013)....................................................................................... 18
Hubbard et al. v. Donahoe, No. 03-1062, 2013 WL 3943495 (D.D.C. July 31, 2013)......................................................................................................... 19
Lucas v. Rio Teachers Association, 38 PERC 22 (Cal. Pub. Employment Relations Bd., A.L.J. July 11, 2013)................................................................... 16
Martin Dealerships, 41 NLRB AMR 11 (N.L.R.B. July 2, 2013)............................................................................................................................................. 16
Oram v. SoulCycle LLC et al., No. 13-cv-2976, memorandum in support of motion to dismiss filed (S.D.N.Y. July 31, 2013)..............................................6
Document Section B......................................................................................................................................................................................................24
Orange County School District v. Orange County Classroom Teachers Association, 40 FPER 81 (Fla. Pub. Employees
Relations Comm’n July 18, 2013)..........................................................................................................................................................................................17
Pennsylvania State Corrections Officers Association v. Commonwealth, 45 PPER 28 (Pa. Labor Relations Bd.,
Hearing Exam’r Aug. 19, 2013)............................................................................................................................................................................................ 16
Raniere et al. v. Citigroup Inc. et al., No. 11-5213-cv, 2013 WL 4046278 (2d Cir. Aug. 12, 2013).........................................................................................9
Richards v. Ernst & Young, No. 11-17530, 2013 WL 4437601 (9th Cir. Aug. 21, 2013).......................................................................................................... 7
Rodriguez v. Greater Dayton Regional Transit Authority et al., 31 OPER 43 (Ohio Ct. App. Aug. 9, 2013)........................................................................ 16
Service Employees International Union, Local 73 and Village of Oak Park, 30 PERI 51 (Ill. Labor Relations Bd., State Panel
July 19, 2013)..........................................................................................................................................................................................................................17
Ward et al. v. TheLadders.com Inc., No. 1:13-cv-01605, motion to dismiss filed (S.D.N.Y., Foley Square Aug. 5, 2013).................................................... 11
Williams et al. v. WinCo Foods et al., No. 13-146, 2013 WL 4067594 (N.D. Cal. Aug. 1, 2013).............................................................................................1
Document Section A..................................................................................................................................................................................................... 21
n
EMPLOYMENT

Westlaw Journal EMPLOYMENT

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