Justia Labor & Employment Law Opinion Summaries

Jason Schmit, a truck driver for Trimac Transportation, Inc., was diagnosed with Parkinson’s disease in 2018. Following his diagnosis, Trimac provided informal accommodations, allowing Schmit to perform tasks that avoided climbing, pulling hoses, or making certain connections, and adjusting his work schedule to end earlier in the day. In 2021, after a new terminal manager was hired, Schmit was asked to formalize his accommodation requests, which Trimac largely approved. However, Schmit encountered difficulties, including changes in internal shop procedures that affected his ability to perform required tasks, disputes about hauling heavy loads, and disciplinary actions for job violations. Schmit complained to Human Resources about alleged harassment and difficulties related to his disability, but Trimac concluded its policies were being properly enforced. In August 2021, following a dispute, Schmit left work and Trimac treated his departure as a resignation. Schmit later applied for and received Social Security disability benefits, representing that his condition made it impossible for him to work.The United States District Court for the District of South Dakota dismissed Schmit’s state law claims for failure to exhaust administrative remedies and granted summary judgment to Trimac on the remaining claims. The district court found genuine disputes existed regarding whether Schmit resigned or was fired and whether there was discriminatory intent, but determined that Schmit’s statements to the Social Security Administration prevented him from showing that he was a “qualified individual” under the ADA.The United States Court of Appeals for the Eighth Circuit affirmed the district court’s decision. The Eighth Circuit held that Schmit failed to adequately explain the contradiction between his representations to the Social Security Administration and his litigation position, barring his ADA claim. The court also concluded that Schmit failed to establish a hostile work environment, retaliation, or wrongful termination under South Dakota law. The judgment of the district court was affirmed. View "Schmit v. Trimac Transportation, Inc." on Justia Law

Raunona Mays, an African American woman employed as a Sergeant with the Arkansas Highway Police, applied for four promotions between 2022 and 2023 but was denied each time. She alleges that less qualified Caucasian males or individuals with less experience and education received the positions. After filing an internal grievance regarding one promotion and receiving no relief, Mays filed an Equal Employment Opportunity Commission (EEOC) complaint alleging race and sex discrimination, as well as retaliation. The EEOC dismissed her charge and issued a right-to-sue letter, after which Mays brought suit seeking damages, a promotion, and injunctive relief.The Pulaski County Circuit Court denied the Arkansas Highway Police’s motion to dismiss, which was based on sovereign immunity. The agency argued that it could not be sued under the United States Constitution and federal statutes, as well as the Arkansas Civil Rights Act, because it is protected by sovereign immunity. The circuit court rejected this argument, allowing all claims to proceed.The Supreme Court of Arkansas reviewed the appeal and held that Mays’s claims under 42 U.S.C. § 1983, 42 U.S.C. § 1981, and the Arkansas Civil Rights Act could not proceed against the state agency because the agency is not considered a “person” under these statutes and is protected by sovereign immunity. The court reversed and remanded those claims for dismissal. However, the court determined that claims under Title VII of the Civil Rights Act of 1964 are not barred by sovereign immunity when brought against a state agency, and that Mays had pleaded sufficient facts to state a Title VII claim. The decision of the Pulaski County Circuit Court was affirmed as to the Title VII claim but reversed and remanded for dismissal of the other claims. View "ARKANSAS HIGHWAY POLICE v. MAYS" on Justia Law

A construction company operating in Michigan employed operating engineers represented by a union. Since at least 1993, collective bargaining occurred through a multiemployer association. In early 2018, with the expiration of their collective bargaining agreement approaching, the union gave notice that it wished to withdraw from multiemployer bargaining in order to negotiate individual contracts with employers, including the company at issue. Tensions rose when the company unilaterally stopped making benefit contributions, gave wage increases, and later sought to recover those payments directly from employees, all without bargaining with the union. The employer also participated in a lockout after the union refused to bargain on a multiemployer basis. Subsequently, the union organized a strike, citing the employer’s alleged unfair labor practices.An administrative law judge for the National Labor Relations Board (NLRB) found that the union’s withdrawal from multiemployer bargaining was timely and lawful, and that the company committed several unfair labor practices, including the lockout and unilateral changes to wages and benefits. The judge concluded, however, that the strike was economic in nature rather than an unfair labor practice strike. On appeal, the NLRB affirmed most of the administrative law judge’s findings but reversed on the nature of the strike, determining it was motivated at least in part by the company’s unfair labor practices. The NLRB issued an order requiring the company to bargain in good faith and temporarily prohibiting decertification attempts.The United States Court of Appeals for the Sixth Circuit reviewed the case. It held that the union’s withdrawal from multiemployer bargaining was timely under Supreme Court and Board precedent, that the company committed unfair labor practices by insisting on multiemployer bargaining, making unilateral wage and benefit changes, and implementing a lockout, and that substantial evidence supported the Board’s conclusion that the 2019 strike was partly an unfair labor practice strike. The court denied the company’s petition for review and granted enforcement of the NLRB’s order. View "Rieth-Riley Constr. Co. v. National Labor Relations Board" on Justia Law

A man designated his sister as the beneficiary of his employer-issued life insurance policies, amounting to $150,000, with instructions that she distribute the proceeds to his three daughters. The man, suffering from declining health, relied on his sister to manage his finances, legal affairs, and healthcare decisions, creating a fiduciary relationship. After his death, the sister claimed the insurance proceeds for herself, contrary to the instructions. The daughters sought a constructive trust over the proceeds, claiming the sister was to hold the funds in trust for them, while the sister denied any fiduciary breach and asserted entitlement under the policy.The Allen Superior Court, after a bench trial, found no undue influence or fraud in the beneficiary designation but concluded that the sister breached her fiduciary duty by failing to distribute the proceeds as instructed. The court imposed a constructive trust in favor of the daughters, finding by clear and convincing evidence that the deceased intended for them to receive the insurance money. The sister appealed, arguing that the Employee Retirement Income Security Act of 1974 (ERISA) preempted such state-law remedies and that the evidence did not meet the required standard. The Indiana Court of Appeals twice reversed the trial court, holding that ERISA preempted the remedy, but the Indiana Supreme Court remanded for application of the correct standard of proof without reaching the preemption issue.The Indiana Supreme Court, upon further review, held that the sister waived her ERISA preemption argument by not raising it in the trial court. The court affirmed the trial court's imposition of a constructive trust, concluding that the findings of a fiduciary relationship and breach of duty were supported by clear and convincing evidence. Accordingly, the Indiana Supreme Court affirmed the trial court’s judgment in favor of the daughters. View "Geels v. Flottemesch" on Justia Law

A Tennessee-based commercial bakery, which provides a self-funded health benefits plan governed by ERISA for its employees, structured its prescription drug benefits through a pharmacy benefit manager (PBM) and created an in-house pharmacy offering lower copays to employees. Tennessee enacted laws targeting PBMs, requiring pharmacy network access for any willing provider and prohibiting cost-sharing incentives to steer participants to certain pharmacies, including those owned by the plan sponsor. The bakery and its PBM excluded a pharmacy from their network after an audit, and after the pharmacy filed administrative complaints under the new Tennessee law, the bakery sought declaratory and injunctive relief in federal court, claiming ERISA preempted these PBM-focused state laws.The United States District Court for the Eastern District of Tennessee found that the bakery, as plan fiduciary, had standing to bring a pre-enforcement challenge. The court concluded that the Tennessee PBM laws were preempted by ERISA because they required specific plan structures, governed central aspects of plan administration, and interfered with uniform national plan administration. The district court granted summary judgment in favor of the bakery, permanently enjoining the Tennessee Commissioner from enforcing the PBM laws against the bakery’s health plan or its PBM.On appeal, the United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court agreed with the district court’s analysis, holding that the challenged Tennessee PBM statutes have an impermissible connection with ERISA plans and are therefore preempted. The court found that the laws mandated network structure and cost-sharing provisions, interfering directly with ERISA plan administration. The Sixth Circuit also held that the ERISA saving clause did not preserve these laws from preemption due to the deemer clause’s application to self-funded plans. The judgment of the district court was affirmed. View "McKee Foods Corp. v. BFP Inc." on Justia Law

The case centers on Kenny Faulk, a Black man, who was conditionally offered a sales position by Dimerco Express USA, a transportation company. The offer was rescinded after the company’s president learned of Faulk’s race, despite Faulk successfully passing a background check that revealed only a prior misdemeanor conviction. Internal communications and testimony showed that Dimerco’s leadership, particularly its president, maintained a policy of hiring only white individuals for sales positions and had rejected non-white applicants for this reason. Faulk later learned that a white applicant with a more significant criminal history was hired for a similar position, and after discovering the discriminatory policy, he filed suit against Dimerco for racial discrimination under 42 U.S.C. § 1981.The United States District Court for the Northern District of Georgia presided over the trial. At trial, Dimerco sought to introduce evidence of Faulk’s unrelated 2019 arrest to undermine his emotional distress claim, but the district court ultimately excluded this evidence, finding it minimally relevant and highly prejudicial. The jury returned a verdict for Faulk, awarding him $90,000 in lost wages, $300,000 in emotional distress damages, and $3 million in punitive damages. Dimerco moved for a new trial, arguing that misconduct by Faulk’s counsel and evidentiary errors required one, or alternatively, for remittitur of the damages as excessive. The district court denied these motions.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s rulings. The court held that any misconduct by Faulk’s counsel was effectively cured by the district court’s instructions and did not deprive Dimerco of a fair trial. The evidentiary rulings were not erroneous or, if so, were harmless. The compensatory and punitive damages were supported by the evidence and not unconstitutionally excessive. The judgment in Faulk’s favor was affirmed in all respects. View "Faulk v. Dimerco Express USA Corp." on Justia Law

The plaintiff, who worked as a security supervisor for a company contracted to provide services at an industrial facility, was terminated from his position in June 2020. The employer cited alleged performance issues, including failures related to COVID-19 protocols and training, as the basis for the discharge. Shortly before his termination, the plaintiff had reported his direct supervisor for alleged favoritism toward female employees. The plaintiff argued that his termination was in retaliation for this report, rather than for the stated reasons.After the plaintiff’s termination, he filed suit under Title VII of the Civil Rights Act, claiming unlawful retaliation. The United States District Court for the Western District of Oklahoma granted summary judgment to the employer. It found that the plaintiff failed to provide sufficient evidence to show that the decisionmaker responsible for his termination knew about the protected activity, or that a supervisor with retaliatory animus influenced the decisionmaker (a “cat’s paw” theory). The district court concluded that, without such evidence, there was no causal link between the protected activity and the adverse employment action.On appeal, the United States Court of Appeals for the Tenth Circuit reviewed the grant of summary judgment de novo and affirmed the lower court’s decision. The Tenth Circuit held that, to establish a prima facie case of retaliation, the plaintiff must show that the decisionmaker had knowledge of the protected activity or that an individual with retaliatory intent influenced the decision. The court found that the plaintiff did not produce sufficient evidence to show either scenario. The court also clarified that evidence suggesting pretext for the employer’s reasons does not substitute for the required showing of knowledge or causation. Thus, summary judgment for the employer was affirmed. View "Dominguez v. Weiser Security Services" on Justia Law

A construction company and several employee plaintiffs were involved in a labor dispute with a group of union-affiliated fringe benefit funds and their trustees. The company had employed members of a local union and, under a collective bargaining agreement (CBA), was required to contribute to a set of employee benefit funds for each hour worked. When the CBA expired and was mutually terminated, the company and union failed to negotiate a new agreement. The company continued attempting to make contributions to the funds, but the funds’ trustees eventually refused to accept them unless the company provided written confirmation of its agreement to abide by the funds’ governing documents. The company declined, arguing that federal labor law required the funds to continue accepting contributions during negotiations. The funds then stopped accepting contributions, and the company placed the rejected payments into escrow.The company and employees filed suit in the United States District Court for the Eastern District of Michigan, asserting that the funds’ trustees had breached their fiduciary duties under the Employee Retirement Income Security Act (ERISA) by refusing the contributions, and seeking declaratory and injunctive relief. The district court dismissed the complaints, finding that the ERISA claims were preempted by the Garmon doctrine, which generally requires courts to defer to the National Labor Relations Board (NLRB) on matters arguably subject to sections 7 or 8 of the National Labor Relations Act (NLRA). The district court also denied motions for a preliminary injunction and for leave to amend the complaint.On appeal, the United States Court of Appeals for the Sixth Circuit affirmed the district court’s judgment. The Sixth Circuit held that the plaintiffs’ ERISA claims were preempted under the Garmon doctrine because they were inextricably linked to labor law questions subject to the NLRB’s primary jurisdiction. The court also found that the district court properly denied the requests for preliminary injunctive relief and for leave to amend the complaint, as any amendment would have been futile. View "Rieth-Riley Construction Co. v. Operating Engineers Local 324" on Justia Law

A former employee initiated a class action lawsuit against her prior employer, alleging violations of various California Labor Code provisions and other employment-related statutes. After the lawsuit was filed, the employer entered into individual settlement agreements with approximately 954 current and former employees, offering cash payments in exchange for waivers of wage and hour claims. The total settlement payments exceeded $875,000. The named plaintiff did not sign such an agreement, but many potential class members did.The Superior Court of San Bernardino County partially granted the plaintiff’s motion to invalidate these individual settlement agreements, finding them voidable due to allegations of fraud and duress. The trial court ordered that a curative notice be sent to all affected employees, informing them of their right to revoke the agreements and join the class action. The court, however, declined to require that the notice include language stating that those who revoked their settlements might be required to repay the settlement amounts if the employer prevailed. The court instead indicated that settlement payments could be offset against any recovery and that the issue of repayment could be addressed later.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the trial court’s order after the employer petitioned for writ relief. The appellate court held that, under California’s rescission statutes (Civil Code sections 1689, 1691, and 1693), putative class members who rescind their individual settlement agreements may be required to repay the consideration received if the employer prevails, but actual repayment can be delayed until judgment. The court instructed the trial court to revise the curative notice to inform employees that repayment may be required at the conclusion of litigation, and clarified that the trial court retains discretion at judgment to adjust the equities between the parties. The order of the trial court was vacated for reconsideration consistent with these principles. View "The Merchant of Tennis, Inc. v. Superior Ct." on Justia Law

A group of current and former shuttle truck drivers who work exclusively within Illinois, transporting auto parts and custom storage racks between storage lots and a Ford assembly plant in Chicago, alleged that their employers failed to pay them overtime wages as required by the Fair Labor Standards Act (FLSA), as well as relevant state and municipal wage laws. The essential facts, which were stipulated by the parties, establish that the auto parts are manufactured out of state, delivered by interstate carriers to storage lots near the assembly plant, and then moved by the plaintiffs from these lots to the plant as needed. After unloading, the drivers return the empty trailers to the storage lots, where interstate carriers retrieve them for return to the manufacturing sites.The United States District Court for the Northern District of Illinois, Eastern Division, granted summary judgment for the defendants. The district court determined that the plaintiffs’ work moving goods from the storage lots to the assembly plant was part of a continuous interstate journey, thereby qualifying for the Motor Carrier Act (MCA) exemption to the FLSA’s overtime requirement. This exemption applies when employees are subject to the Secretary of Transportation’s authority over qualifications and maximum hours.Reviewing the appeal, the United States Court of Appeals for the Seventh Circuit held that the transportation performed by the shuttle drivers was indeed a continuation of the interstate shipment, as the storage lots were not the final destination for the goods. Applying the legal standard articulated in Collins v. Heritage Wine Cellars, Ltd., the court found the relevant criteria for interstate commerce satisfied. The court rejected the plaintiffs’ argument that the storage lots and assembly plant should be considered a single destination. The Seventh Circuit affirmed the district court’s grant of summary judgment in favor of the defendants, holding that the MCA exemption applies and overtime pay was not required. View "Stingley v Laci Transport Inc." on Justia Law