Justia Labor & Employment Law Opinion Summaries

A former high-level employee left her position at a company after receiving incentive equity agreements that included non-compete, non-solicitation, and confidentiality provisions. She subsequently joined a competitor. The company alleged that she breached those provisions by working for the competitor and that, in the short time since her move, at least five important clients had also moved to the competitor, an unusual loss rate for the business. The employee’s role at her former employer was not confined to a single region, and she was involved in high-level strategic decisions affecting company operations nationwide. The restrictive covenants at issue included an 18-month, nationwide non-compete and were supported by incentive units that would vest over time or upon sale of the company.After the company filed suit, the Court of Chancery of the State of Delaware denied a temporary restraining order but expedited proceedings. The defendants moved to dismiss. The company amended its complaint with more detailed allegations. The Court of Chancery granted the motion to dismiss, holding that the non-compete was unenforceable due to its breadth and the minimal value of the consideration provided, and that the allegations of breach of the non-solicitation and confidentiality provisions were conclusory. It also dismissed related tortious interference claims.On appeal, the Supreme Court of the State of Delaware reviewed the dismissal de novo. The Supreme Court held that the Court of Chancery improperly drew inferences against the employer at the pleading stage and failed to credit factual allegations supporting the claims. The Supreme Court found it was reasonably conceivable that the non-compete, non-solicitation, and confidentiality provisions could be enforceable, and that the complaint sufficiently alleged breaches. The Supreme Court reversed and remanded for further proceedings, limiting its holding to the adequacy of the pleadings and expressing no view on ultimate enforceability. View "Payscale Inc. v. Norman" on Justia Law

An individual brought suit against her employer, a Delaware corporation, alleging various claims of discrimination based on age and disability under state and federal law. The employment contract between the parties included an arbitration provision, specifying that all employment-related disputes were to be resolved through binding arbitration under the Federal Arbitration Act (FAA), in accordance with procedures outlined in the California Arbitration Act. The contract also incorporated JAMS rules, which assign the arbitrator authority to resolve issues regarding the validity and enforceability of the arbitration agreement itself.The United States District Court for the Southern District of California reviewed the employer’s motion to compel arbitration. The court recognized that the arbitration agreement, by incorporating the JAMS rules, delegated questions about the agreement's validity to an arbitrator. However, relying on California state court decisions, the district court determined that the presence of a severability clause—allowing a court or other competent body to sever invalid provisions—negated a “clear and unmistakable” delegation to the arbitrator. Consequently, the district court concluded it was responsible for determining validity and found the arbitration agreement unconscionable, denying the motion to compel arbitration.The United States Court of Appeals for the Ninth Circuit reviewed the district court’s judgment de novo. The appellate court held that the contract’s delegation clause, by clearly incorporating JAMS rules, unmistakably reserved the issue of the arbitration agreement’s validity for the arbitrator. The existence of a severability clause did not undermine this delegation. The Ninth Circuit reversed the district court’s denial of the motion to compel arbitration, vacated its unconscionability judgment, and remanded with instructions to compel arbitration and stay the case pending arbitration. View "SANDLER V. MODERNIZING MEDICINE, INC." on Justia Law

The plaintiffs in this case were former hourly employees of Amazon who worked in the company’s Illinois distribution warehouses. In March 2020, in response to the COVID-19 pandemic, Amazon required all hourly, nonexempt employees to undergo mandatory medical screenings before clocking in for their shifts. These screenings included temperature checks and health questions, and typically took 10 to 15 minutes, sometimes causing employees to clock in after their scheduled start time. Plaintiffs alleged that Amazon violated wage laws by not compensating employees for the time spent in these screenings, arguing the screenings were necessary to their work and primarily benefited Amazon by enabling continued operations during the pandemic.The plaintiffs initially filed a class-action complaint in the Circuit Court of Cook County, asserting claims under both the federal Fair Labor Standards Act (FLSA) and the Illinois Minimum Wage Law. Amazon removed the case to the United States District Court for the Northern District of Illinois, which dismissed the complaint. The district court held that the FLSA claims were barred by the Portal-to-Portal Act (PPA), which excludes certain preshift activities from compensable time, and summarily concluded the state law claims failed for the same reason. Plaintiffs appealed to the United States Court of Appeals for the Seventh Circuit, which certified to the Supreme Court of Illinois the question of whether Illinois’s Minimum Wage Law incorporates the PPA’s exclusion for preliminary and postliminary activities.The Supreme Court of Illinois held that section 4a of the Illinois Minimum Wage Law does not incorporate the PPA’s exclusion for preliminary and postliminary activities. The court reasoned that the plain language of the statute and relevant state regulations do not contain such an exclusion and that the Illinois Department of Labor explicitly defines compensable hours to include all time an employee is required to be on the premises. The court thus answered the certified question in the negative. View "Johnson v. Amazon.com Services, LLC" on Justia Law

A realty management company in New Jersey hired an individual to serve as superintendent for two buildings. When the employee applied for the position, he provided an invalid Social Security number. Initially paid in cash, his compensation arrangement changed to a rent-free apartment in exchange for his labor after the employer learned of the invalid Social Security number. The employee continued to perform superintendent duties for several years without receiving regular wages. The employer did not maintain records of the employee’s hours or wages. After being terminated, the employee filed a claim alleging violations of New Jersey’s wage and hour laws for unpaid wages and overtime.The Superior Court, Law Division, following a bench trial, dismissed the employee’s claims with prejudice, finding that he was not credible due to his use of an invalid Social Security number and had not provided specific evidence of hours worked. The Appellate Division affirmed, concluding that the employee, as an undocumented worker, could not have an employee-employer relationship under federal law and was thus barred from relief. The court also found the barter arrangement established a relationship outside the scope of wage and hour protections.The Supreme Court of New Jersey reversed, holding that neither the employee’s undocumented status nor the barter arrangement precluded his right to recover wages for work already performed. The Court ruled that federal immigration law does not conflict with or preempt state wage and hour laws in requiring payment for work actually performed. Employers have the statutory duty to keep records, and failure to do so results in a rebuttable presumption in favor of the employee’s claim. The Court also held that evidence of an invalid Social Security number should be carefully scrutinized for prejudice under evidence rules. The case was remanded to the trial court for a determination of damages. View "Lopez v. Marmic LLC" on Justia Law

Dr. Lana Foster, a lifelong resident of Echols County, Georgia, was among the first Black students and later one of the first Black educators in the county’s school district. Over the years, she experienced various forms of racial discrimination, including being reassigned to a less desirable teaching position and being stripped of leadership duties, which led her to sue the school district. That lawsuit was settled in 2011, with the district agreeing to reinstate her role and pay damages. However, Foster alleged continued racial hostility, culminating in her termination in 2018. Subsequent investigations found no probable cause for her firing based on the cited ethical violations. Foster then filed complaints with state and federal agencies, resulting in another settlement in 2020 that required the district to revise its hiring practices and take additional steps to remedy discrimination.Foster later discovered, through an open records request, that the school district had not complied with the settlement's terms. She filed suit in the United States District Court for the Middle District of Georgia against the district, the school board, and several school officials, alleging violations of her rights under federal and state law, including claims under 42 U.S.C. § 1981 and § 1983 for denial of her right to make and enforce contracts based on her race. The district court dismissed some claims but allowed others to proceed, including her § 1981 claim against the individual officials, and denied their motion to dismiss based on qualified immunity.The United States Court of Appeals for the Eleventh Circuit reviewed the denial of qualified immunity. It held that the law was clearly established that government officials may not interfere with contractual rights because of race. The court concluded that uncertainty about possible personal liability under § 1981 does not entitle officials to qualified immunity. The Eleventh Circuit affirmed the district court’s decision denying qualified immunity. View "Foster v. King" on Justia Law

Midwest Division-RMC, LLC operates a hospital in Kansas City, Missouri, and has had collective bargaining relationships with two unions: the Service Employees International Union HCII (SEIU) and the National Nurses Organizing Committee (NNOC). In June 2021, employees in the SEIU bargaining unit voted to decertify SEIU as their representative, but SEIU’s objections to the election were still pending before the National Labor Relations Board (NLRB). Midwest stopped recognizing SEIU and ceased processing grievances, taking actions that included halting dues deductions and denying SEIU access to the facility. Separately, after an unrelated grievance meeting in September 2021, NNOC’s labor representative was denied participation by Midwest.SEIU and NNOC filed unfair labor practice charges with the NLRB. An Administrative Law Judge found Midwest violated the National Labor Relations Act (NLRA) by withdrawing recognition from SEIU before the election was certified and by preventing the NNOC representative from attending the grievance meeting. The NLRB affirmed these findings and ordered Midwest to remedy both violations, but denied SEIU’s request for a notice reading remedy. Midwest sought review of these orders, the NLRB sought enforcement, and SEIU also petitioned for review regarding the remedy.The United States Court of Appeals for the Eighth Circuit reviewed the case. The court held that Midwest did not automatically violate the NLRA by withdrawing recognition from SEIU after the vote but before certification; instead, Midwest acted at its peril, and when the NLRB ultimately certified the decertification, Midwest’s actions did not violate the Act. The court reversed the NLRB’s order regarding SEIU and remanded with instructions to dismiss those claims. However, the court enforced the NLRB’s order regarding the NNOC grievance, finding that the collective bargaining agreement did not clearly limit the number of union representatives at the grievance meeting. View "Midwest Division-RMC, LLC v. NLRB" on Justia Law

Abdulkadir Abdisalam worked as a courier delivering medical supplies for a company that classified its couriers as independent contractors. To work for the company, Abdisalam was required to form his own corporation, Abdul Courier, LLC, which then entered into a contract with the company. This contract included an arbitration provision requiring disputes to be arbitrated. Abdisalam signed the contract as the owner of his corporation, not in his individual capacity. After several years of providing courier services, Abdisalam alleged that the company misclassified him and others as independent contractors and failed to pay them proper wages, in violation of Massachusetts law. He filed a lawsuit on behalf of himself and a proposed class of couriers seeking remedies under Massachusetts statutes.The company removed the case to the United States District Court for the District of Massachusetts and filed a motion to compel arbitration based on the arbitration provision in its contract with Abdul Courier, LLC. The district court denied the motion, finding that Abdisalam, having signed only as the owner of the LLC and not in his personal capacity, was not bound by the contract’s arbitration clause. The court also rejected the company’s arguments that Abdisalam should be compelled to arbitrate under theories of direct benefits estoppel, intertwined claims estoppel, or as a successor in interest.The United States Court of Appeals for the First Circuit affirmed the district court’s order. The First Circuit held that, under Massachusetts law, it was for the court—not an arbitrator—to decide whether Abdisalam was bound by the arbitration agreement. The court further held that Abdisalam, as a nonsignatory to the agreement in his personal capacity, was not bound by its arbitration provision, and none of the equitable estoppel or successor theories advanced by the defendant provided a basis to compel arbitration. View "Abdisalam v. Strategic Delivery Solutions, LLC" on Justia Law

The plaintiff, a senior engineer at a city water-treatment plant, applied for a superintendent position. Despite holding a Ph.D. in engineering and having extensive technical experience, he lacked significant leadership experience. The city’s hiring process initially required a bachelor’s degree in a relevant field, but the city selected a younger, white candidate without a degree who had substantial leadership experience. The plaintiff, a middle-aged man from China, filed a grievance, and the city’s civil-service commission determined that the city had violated its written hiring policies by certifying candidates without the required degree. In response, the city revised the job description, removing the degree requirement and allowing work experience to substitute for education, then repeated the hiring process, ultimately selecting the same candidate.The plaintiff pursued claims in the United States District Court for the Northern District of Oklahoma, alleging race and age discrimination under Title VII, the Age Discrimination in Employment Act, and the Oklahoma Anti-Discrimination Act, as well as retaliation. The district court granted summary judgment to the city on all remaining claims, finding that the plaintiff failed to create a genuine issue of material fact regarding pretext and did not establish a prima facie case of retaliation.The United States Court of Appeals for the Tenth Circuit affirmed the district court’s decision. The Tenth Circuit held that the plaintiff did not submit evidence from which a reasonable jury could find that the city’s stated preference for leadership experience was pretext for unlawful discrimination. The court found no sufficient evidence of procedural irregularities or subjectivity to support an inference of pretext, nor an overwhelming disparity in qualifications. The Tenth Circuit further held that the plaintiff failed to show pretext for retaliation, as the city’s explanation for changing the job requirements was not contradicted. The district court’s judgment was affirmed. View "Jiang v. City of Tulsa" on Justia Law

Retired employees of two companies, who participated in their employers’ defined benefit pension plans, brought class action lawsuits alleging violations of the Employee Retirement Income Security Act (ERISA). These plaintiffs, all married, claimed that their plans calculated joint and survivor annuity benefits using mortality tables based on outdated data from the 1960s and 1970s. Because life expectancies have increased since then, the plaintiffs asserted that using such outdated mortality assumptions improperly reduced their benefits, resulting in joint and survivor annuities that were not the actuarial equivalent of the single life annuities to which they would otherwise be entitled, as required by ERISA.Each group of plaintiffs filed suit in federal district court—one in the Eastern District of Michigan against the Kellogg plans and one in the Western District of Tennessee against the FedEx plan—asserting that the use of obsolete actuarial assumptions violated 29 U.S.C. § 1055(d) and constituted a breach of fiduciary duty under ERISA. The district courts in both cases dismissed the complaints for failure to state a claim, holding that ERISA does not require use of any particular mortality table or actuarial assumption in calculating benefits for married participants, and thus the allegations, even if true, did not establish a violation.The United States Court of Appeals for the Sixth Circuit reviewed the dismissals de novo. The court held that, under ERISA’s statutory requirement that joint and survivor annuities be “actuarially equivalent” to single life annuities, plans must use actuarial assumptions, including mortality data, that reasonably reflect the life expectancies of current participants. The court concluded that plaintiffs had plausibly alleged that the use of outdated mortality tables was unreasonable and could violate ERISA. Accordingly, the Sixth Circuit reversed the district courts’ judgments and remanded both cases for further proceedings. View "Reichert v. Kellogg Co." on Justia Law

The appellant worked for the appellee as an information technology employee in Boston for over twenty-five years. In August 2019, the company placed her on a three-month performance improvement plan (PIP), which she completed successfully. Approximately ten months after completing the PIP, she resigned from her position. She subsequently brought suit against her former employer, claiming, among other things, that she was subjected to unlawful age discrimination when she was placed on the PIP and then constructively discharged.The United States District Court for the District of Massachusetts granted summary judgment to the employer. The court found that no reasonable factfinder could conclude that the PIP constituted an adverse employment action or that the circumstances of her resignation amounted to a constructive discharge. In the district court’s view, the plaintiff’s successful completion of the PIP, the absence of demotion or pay reduction, and the lack of substantial changes in her responsibilities meant she did not suffer an adverse employment action. The court also concluded that the comments and actions by her supervisors did not create intolerable working conditions that would force a reasonable person to resign.On appeal, the United States Court of Appeals for the First Circuit first addressed the timeliness of the appeal. The court determined that the appellant’s pro se motion for extension of time to file a notice of appeal met the requirements to be treated as a timely notice of appeal, making the appeal timely. On the merits, the First Circuit affirmed the district court’s judgment. It held that, under the Supreme Court’s standard in Muldrow v. City of St. Louis, the PIP did not alter the terms or conditions of employment, and that the record did not support a finding of constructive discharge. The decision of the district court was affirmed. View "Walsh v. HNTB Corporation" on Justia Law