Justia Labor & Employment Law Opinion Summaries

A restaurant and bar in Pennsylvania employed bartenders and servers who participated in a tip pool, which was allegedly distributed in part to a salaried manager, contrary to federal and state wage laws. An employee who worked there from September 2021 to December 2022 filed suit in the United States District Court for the Eastern District of Pennsylvania, alleging violations of the Fair Labor Standards Act (FLSA) and the Pennsylvania Minimum Wage Act (PMWA). The claims centered on the manager’s alleged receipt of tip-pool funds intended for bartenders. The plaintiff sought damages and styled the case as a hybrid action: an FLSA collective action under § 216(b) and a Rule 23(b)(3) class action for the state law claim.The parties stipulated to conditional certification of an FLSA collective, and notice was sent to potential members, ten of whom opted in. After discovery, the parties reached a settlement agreement, proposing a Rule 23(b)(3) class settlement that would release wage-and-hour claims, including unasserted FLSA claims, for all class members who did not opt out. The District Court held a hearing focused on whether class members who had not opted into the FLSA collective could be required to release FLSA claims through the class settlement. The District Court denied preliminary approval, reasoning that § 216(b) prohibited such releases, and denied reconsideration, certifying the legal question for interlocutory appeal.The United States Court of Appeals for the Third Circuit reviewed the certified question de novo. It held that § 216(b) of the FLSA establishes only the mechanism for litigating FLSA claims, not the conditions for waiving them, and does not prohibit the release of unasserted FLSA claims in a Rule 23(b)(3) opt-out class settlement. The Court vacated the District Court’s order and remanded for a full fairness inquiry under Rule 23. View "Lundeen v. 10 West Ferry Street Operations LLC" on Justia Law

Yellow Corporation, a major trucking company, ceased operations and filed for bankruptcy in 2023. As a result, it withdrew from several multiemployer pension plans, triggering withdrawal liability—an amount owed to the pension plans to cover unfunded vested benefits for employees. The pension plans, which had received substantial federal funds under the American Rescue Plan Act of 2021 (ARPA) to stabilize their finances, filed claims against Yellow’s bankruptcy estate for withdrawal liability. The dispute centered on how much of the ARPA funds should be counted as plan assets when calculating Yellow’s liability, as well as whether certain contractual terms could require Yellow to pay a higher withdrawal liability than statutory minimums.The United States Bankruptcy Court for the District of Delaware reviewed the claims. It upheld two regulations issued by the Pension Benefit Guaranty Corporation (PBGC): the Phase-In Regulation, which requires ARPA funds to be counted as plan assets gradually over time, and the No-Receivables Regulation, which bars plans from counting ARPA funds as assets before they are actually received. The Bankruptcy Court found these regulations to be valid exercises of PBGC’s authority and not arbitrary or capricious. It also ruled that two pension plans could enforce a contractual provision requiring Yellow to pay withdrawal liability at a higher, agreed-upon rate, rather than the rate based solely on its actual contributions.On direct appeal, the United States Court of Appeals for the Third Circuit affirmed the Bankruptcy Court’s order. The Third Circuit held that the PBGC’s regulations were valid under ARPA and ERISA, as Congress had expressly delegated authority to the PBGC to set reasonable conditions on the allocation of plan assets and withdrawal liability. The court also held that pension plans could enforce contractual terms requiring higher withdrawal liability, as the statutory scheme sets a floor, not a ceiling, for such liability. View "In re: Yellow Corporation" on Justia Law

Two employees of a debt-collection firm, one of whom was out sick with COVID-19, collaborated to resolve an urgent licensing issue for their employer. The employee at home, unable to access her work computer, asked her colleague to log in using her credentials and retrieve a spreadsheet containing passwords for various company systems. The colleague, with express permission, accessed the computer and emailed the spreadsheet to the employee’s personal and work email accounts. Both actions violated the employer’s internal computer-use policies. Separately, the employee at home had, over several years, moved accounts into her workgroup to receive performance bonuses, believing she was eligible for them. Both employees also alleged persistent sexual harassment at work, which led to internal complaints, one employee’s resignation, and the other’s termination.After these events, the employer, National Recovery Agency (NRA), sued both employees in the United States District Court for the Middle District of Pennsylvania, alleging violations of the Computer Fraud and Abuse Act (CFAA), federal and state trade secrets laws, civil conspiracy, breach of fiduciary duty, and fraud. The employees counterclaimed for sexual harassment and related employment claims. On cross-motions for summary judgment, the District Court entered judgment for the employees on all claims brought by NRA, finding no violations of the CFAA or trade secrets laws, and stayed the employees’ harassment claims pending appeal.The United States Court of Appeals for the Third Circuit reviewed the case. It affirmed the District Court’s judgment in full. The Third Circuit held, first, that the CFAA does not criminalize violations of workplace computer-use policies by employees with authorized access, absent evidence of hacking or code-based circumvention. Second, it held that passwords protecting proprietary business information do not, by themselves, constitute trade secrets under federal or Pennsylvania law. The court also affirmed the dismissal of the state-law tort claims. View "NRA Group LLC v. Durenleau" on Justia Law

Brian Trematore Plumbing & Heating, Inc. (Trematore) entered into a collective bargaining agreement (CBA) with Sheet Metal Workers Local Union 25 (Local 25) for a project at High-Tech High School in Secaucus, New Jersey. The CBA, initially formed under § 8(f) of the National Labor Relations Act (NLRA), was later converted to a § 9(a) agreement when Local 25 demonstrated majority status. The CBA included an evergreen clause, automatically renewing unless terminated with notice, and a non-repudiation clause. Trematore ceased employing Local 25 members in September 2018 and later subcontracted work to non-union workers, leading to grievances and an unfair labor practice charge by Local 25.The United States District Court for the District of New Jersey denied Trematore's motion for judgment and granted Local 25's cross-motion, holding that the CBA remained in effect due to the evergreen provision and non-repudiation clause. The court found that Trematore could not repudiate the CBA under the one-employee unit rule and that the grievance regarding subcontracting was arbitrable.The United States Court of Appeals for the Third Circuit affirmed the District Court's judgment. The appellate court held that Trematore was bound by the CBA through its evergreen provision and non-repudiation clause, making its attempted repudiation ineffective. The court also held that the grievance concerning subcontracting was arbitrable, as it fell within the scope of the arbitration clause in the CBA. The court concluded that the CBA remained in effect and that Trematore was not entitled to injunctive relief. View "Brian Trematore Plumbing & Heating Co. v. Sheet Metal Workers Local Union 25" on Justia Law

Sun Valley Orchards, a New Jersey farm, was accused by the U.S. Department of Labor (DOL) of breaching an employment agreement under the H-2A nonimmigrant visa program. The DOL alleged that Sun Valley failed to provide adequate housing, meal plans, transportation, and guaranteed work hours to its workers, as stipulated in the job order. The DOL imposed civil penalties and back wages totaling hundreds of thousands of dollars through administrative proceedings.The case was first reviewed by an Administrative Law Judge (ALJ), who affirmed most of the DOL's findings but slightly modified the penalties and back wages. Sun Valley then appealed to the Administrative Review Board, which upheld the ALJ's decision. Subsequently, Sun Valley challenged the DOL's decision in the United States District Court for the District of New Jersey, arguing that the administrative proceedings violated Article III of the Constitution, among other claims. The District Court dismissed Sun Valley's claims, holding that the DOL's actions fit within the public-rights doctrine and that the agency had statutory authority to impose penalties and back wages.The United States Court of Appeals for the Third Circuit reviewed the case and held that Sun Valley was entitled to have its case decided by an Article III court. The court found that the DOL's enforcement action resembled a common law breach of contract suit, which traditionally would be heard in a court of law. The court also determined that the case did not fit within the public rights exception to Article III adjudication, as the H-2A labor certification regulations primarily concern domestic employment law rather than immigration control. Consequently, the Third Circuit reversed the District Court's decision and remanded the case with instructions to enter judgment in favor of Sun Valley. View "Sun Valley Orchards LLC v. United States Department of Labor" on Justia Law

Miller Plastic Products Inc. fired Ronald Vincer in March 2020, during the early weeks of the COVID-19 pandemic. Vincer had expressed concerns about the company's pandemic protocols and its operating status, believing it was not an essential business. The National Labor Relations Board (NLRB) determined that Vincer’s termination violated Section 8(a)(1) of the National Labor Relations Act (NLRA) because it was motivated, at least in part, by his protected concerted activity.The Administrative Law Judge (ALJ) found that Vincer’s conduct was protected under the NLRA and that his termination was motivated by his protected activity. The ALJ also disallowed testimony regarding after-acquired evidence at the liability stage of the proceeding. Miller Plastic petitioned for review of the Board’s order, and the Board cross-applied for enforcement.The United States Court of Appeals for the Third Circuit reviewed the case. The court concluded that substantial evidence supported the Board’s determination that Vincer’s conduct was protected under the NLRA and was a motivating factor for his termination. The court also agreed with the ALJ’s decision to disallow testimony regarding after-acquired evidence at the liability stage, noting that such evidence is typically considered during compliance proceedings.However, the court found that the NLRB failed to adequately address certain evidence related to Miller Plastic’s affirmative defense that it would have fired Vincer even absent his protected conduct. The court remanded the case to the Board to address the significance of that evidence. The court denied Miller Plastic’s petition for review in part and granted the Board’s cross-application for enforcement in part, affirming the finding that Vincer was terminated because of his concerted activity. View "Miller Plastic Products Inc v. NLRB" on Justia Law

Alexander Smith, a Christian firefighter in Atlantic City, was prohibited from growing a beard due to the city's grooming policy, which he claimed violated his religious beliefs. Smith sued the city, alleging violations of the Free Exercise Clause, the Equal Protection Clause, and Title VII’s accommodation and anti-retaliation provisions. The District Court denied his motion for a preliminary injunction and later granted summary judgment for the city on all claims.The United States District Court for the District of New Jersey initially denied Smith's motion for a preliminary injunction, finding that his claims were unlikely to succeed on the merits. After discovery, the court granted summary judgment in favor of the city on all four claims, leading Smith to appeal the decision.The United States Court of Appeals for the Third Circuit reviewed the case. The court vacated the District Court’s judgment regarding Smith’s Title VII accommodation claim and his free exercise claim, finding that the city's grooming policy was not generally applicable and failed strict scrutiny. The court affirmed the District Court’s judgment on the equal protection claim and the Title VII retaliation claim, concluding that Smith did not establish a prima facie case of retaliation. Additionally, the court reversed the denial of Smith’s motion for a preliminary injunction, recognizing a likelihood of success on the merits and the irreparable harm caused by the loss of First Amendment freedoms. View "Smith v. City of Atlantic City" on Justia Law

A private fencing coach alleged that during a flight, a university’s assistant fencing coach sexually harassed and assaulted her. She reported the incident to the university’s head coach, who discouraged her from reporting it further and, along with the assistant coach, allegedly retaliated against her within the fencing community. The university later investigated and confirmed the harassment but found no policy violation. The coach sued the university, the two coaches, and the Title IX coordinator, claiming violations of Title IX and state-law torts.The United States District Court for the Middle District of North Carolina transferred the case to the Middle District of Pennsylvania due to improper venue and judicial efficiency. After the transfer, the plaintiff amended her complaint, and the defendants moved to dismiss. The transferee court dismissed the entire suit, holding that the plaintiff, as neither a student nor an employee, was outside the zone of interests protected by Title IX. It also dismissed the state-law tort claims as untimely or implausible.The United States Court of Appeals for the Third Circuit reviewed the case de novo. It held that the zone-of-interests test applies to Title IX claims and that the plaintiff’s claims related to her exclusion from university-hosted fencing events and retaliation manifesting on campus were within that zone. The court affirmed the dismissal of the state-law tort claims against the university and its employees, except for the claims against the assistant coach, which were not time-barred under North Carolina’s three-year statute of limitations. The case was vacated in part, affirmed in part, and remanded for further proceedings. View "Oldham v. Penn State University" on Justia Law

Plaintiffs Charles and Grant Adler, through their business entity CM Adler LLC, distributed tortillas and other food products of Defendant Gruma Corporation to grocery stores in central New Jersey under a "Store Door Distributor Agreement" (SDDA). When Defendant terminated the relationship, Plaintiffs filed a lawsuit alleging retaliatory termination due to their organizing efforts with other distributors. Plaintiffs claimed violations of state and federal labor laws, including failure to pay minimum wages and unlawful deductions, and argued that the SDDA was a franchise agreement subject to New Jersey's Franchise Practices Act, which forbids termination without cause.The United States District Court for the District of New Jersey dismissed the case, concluding that Texas law governed under the SDDA and the case should proceed to arbitration. The District Court did not address the applicability of the Federal Arbitration Act (FAA) or Plaintiffs' exemption argument under 9 U.S.C. § 1. It found the parties had contracted for Texas law, under which the arbitration agreement was enforceable, and rejected Plaintiffs' bid to apply New Jersey law instead. The District Court also decided that Charles and Grant Adler, who did not sign the contract, were estopped from challenging its arbitration provision because they acted as parties to the contract when they performed the LLC’s work.The United States Court of Appeals for the Third Circuit reviewed the case and concluded that the FAA does not apply to the SDDA because Plaintiffs are transportation workers engaged in interstate commerce. The Court of Appeals found that the District Court erred in its choice-of-law analysis by failing to consider the impact of New Jersey public policies on its arbitrability ruling. The Court of Appeals vacated the order compelling arbitration and remanded for the District Court to complete the choice-of-law analysis under the correct framework and to reevaluate whether the individual Plaintiffs, who did not sign the arbitration agreement, are bound by its terms. View "Adler v. Gruma Corporation" on Justia Law

Michele Cornelius sued CVS Pharmacy Inc., New Jersey CVS Pharmacy, L.L.C., and her former supervisor, Shardul Patel, alleging a hostile work environment. Cornelius claimed that Patel targeted her with negative treatment because she is a woman, including denying her promotions, overworking her, and undermining her relationships with employees. Despite her multiple complaints to CVS, no action was taken against Patel. Cornelius resigned in October 2021, but Patel did not respond, and she was subsequently fired on November 4, 2021.The United States District Court for the District of New Jersey granted CVS's motion to compel arbitration and dismissed Cornelius's complaint. The court concluded that Cornelius's claims were not protected from arbitration under the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (EFAA) because her hostile work environment claim did not constitute a "sexual harassment dispute." The court also found that Cornelius and CVS had entered into a valid arbitration agreement and that the agreement was not unconscionable.The United States Court of Appeals for the Third Circuit reviewed the case. The court agreed with the District Court that the EFAA did not cover Cornelius's claims but reached this conclusion on different grounds, determining that her dispute arose before the EFAA's effective date of March 3, 2022. However, the Third Circuit found that the District Court abused its discretion by not considering whether discovery was necessary before deciding that Cornelius and CVS had a valid agreement to arbitrate. Consequently, the Third Circuit affirmed in part, vacated the judgment, and remanded the case to the District Court for further proceedings, including consideration of whether discovery on the validity of the arbitration agreement was warranted. View "Cornelius v. CVS Pharmacy Inc" on Justia Law