Justia Labor & Employment Law Opinion Summaries

Gary Waetzig, a former employee of Halliburton Energy Services, Inc., filed a federal age-discrimination lawsuit against the company. He later submitted his claims for arbitration and voluntarily dismissed his federal lawsuit without prejudice under Federal Rule of Civil Procedure 41(a). After losing in arbitration, Waetzig sought to reopen his dismissed lawsuit and vacate the arbitration award, citing Federal Rule of Civil Procedure 60(b) as the basis for reopening the case.The U.S. District Court for the District of Colorado reopened the case, ruling that a voluntary dismissal without prejudice counts as a "final proceeding" under Rule 60(b) and that Waetzig made a mistake by dismissing his case rather than seeking a stay. The District Court also granted Waetzig's motion to vacate the arbitration award. Halliburton appealed, and the Tenth Circuit reversed the District Court's decision, holding that a voluntary dismissal without prejudice does not count as a "final judgment, order, or proceeding" under Rule 60(b).The Supreme Court of the United States reviewed the case and held that a case voluntarily dismissed without prejudice under Rule 41(a) counts as a "final proceeding" under Rule 60(b). The Court reasoned that a voluntary dismissal is "final" because it terminates the case and aligns with the definitions and historical context of the term "final." The Court also concluded that a voluntary dismissal qualifies as a "proceeding" under Rule 60(b), encompassing all steps in an action's progression. The judgment of the Tenth Circuit was reversed, and the case was remanded for further proceedings consistent with the Supreme Court's opinion. View "Waetzig v. Halliburton Energy Services, Inc." on Justia Law

EMD Sales, Inc. distributes food products in the Washington, D.C. area and employs sales representatives who manage inventory and take orders at grocery stores. Several sales representatives sued EMD, alleging that the company violated the Fair Labor Standards Act (FLSA) by failing to pay them overtime. EMD argued that the sales representatives were outside salesmen and therefore exempt from the FLSA’s overtime-pay requirement.The U.S. District Court for the District of Maryland held a bench trial and found EMD liable for overtime pay because EMD did not prove by clear and convincing evidence that its sales representatives were outside salesmen. The court ordered EMD to pay overtime wages and liquidated damages. EMD appealed, arguing that the District Court should have used the preponderance-of-the-evidence standard instead of the clear-and-convincing-evidence standard. The U.S. Court of Appeals for the Fourth Circuit affirmed the District Court’s judgment, adhering to Circuit precedent that required employers to prove FLSA exemptions by clear and convincing evidence.The Supreme Court of the United States reviewed the case and held that the preponderance-of-the-evidence standard applies when an employer seeks to demonstrate that an employee is exempt from the minimum-wage and overtime-pay provisions of the FLSA. The Court reasoned that the FLSA does not specify a standard of proof for exemptions, and in the absence of such specification, the default preponderance standard should apply. The Court reversed the Fourth Circuit’s judgment and remanded the case for further proceedings consistent with this opinion. View "E.M.D. Sales, Inc. v. Carrera" on Justia Law

Ochoa worked in a physically demanding job for McLane, which requires new employees in such positions and those returning from medical leave to take a physical evaluation. When Ochoa returned from three months of maternity leave, she failed the evaluation three times and was fired. She filed a sex discrimination charge under Title VII of the Civil Rights Act. The Equal Employment Opportunity (EEOC) began an investigation, but McLane declined its request for names, Social Security numbers, addresses, and telephone numbers of employees asked to take the evaluation. After the EEOC expanded the investigation’s scope, it issued subpoenas under 42 U.S.C. 2000e–9, requesting information relating to its new investigation. The district judge declined to enforce the subpoenas. The Ninth Circuit reversed, holding that the lower court erred in finding the information irrelevant. The Supreme Court vacated. A district court’s decision whether to enforce or quash an EEOC subpoena should be reviewed for abuse of discretion, not de novo. The Court noted “the longstanding practice of the courts of appeals," to review a district court’s decision to enforce or quash an administrative subpoena for abuse of discretion. In most cases, the enforcement decision will turn either on whether the evidence sought is relevant to the specific charge or whether the subpoena is unduly burdensome under the circumstances. Both tasks are well suited to a district judge’s expertise. Deferential review “streamline[s] the litigation process by freeing appellate courts from the duty of reweighing evidence and reconsidering facts already weighed and considered by the district court,” something particularly important in a proceeding designed only to facilitate the EEOC’s investigation. Not every decision touching on the Fourth Amendment is subject to searching review. View "McLane Co. v. Equal Employment Opportunity Commission" on Justia Law

Jevic filed for Chapter 11 bankruptcy after its purchase in a leveraged buyout. Former Jevic drivers were awarded a judgment for violations of state and federal Worker Adjustment and Retraining Notification (WARN) Acts, part of which was a priority wage claim under 11 U.S.C. 507(a)(4), entitling them to payment ahead of general unsecured claims. In another suit, a court-authorized committee representing unsecured creditors sued Sun Capital and CIT for fraudulent conveyance in the buyout; the parties negotiated a structured dismissal of Jevic’s bankruptcy, under which the drivers would receive nothing on their WARN claims, but lower-priority general unsecured creditors would be paid. The Bankruptcy Court reasoned that the proposed payouts would occur under a structured dismissal rather than an approved plan, so failure to follow ordinary priority rules did not bar approval. The district court and Third Circuit affirmed. The Supreme Court reversed. The drivers have standing, having “suffered an injury in fact,” or “likely to be redressed by a favorable judicial decision.” A settlement that respects ordinary priorities remains a reasonable possibility and the fraudulent-conveyance claim could have litigation value. Bankruptcy courts may not approve structured dismissals that provide for distributions that do not follow ordinary priority rules without the consent of affected creditors. Section 349(b), which permits a bankruptcy judge, “for cause, [to] orde[r] otherwise,” gives courts flexibility to protect reliance interests, not to make general end-of-case distributions that would be impermissible in a Chapter 11 plan or Chapter 7 liquidation. Here, the priority-violating distribution is attached to a final disposition and does not preserve the debtor as a going concern, nor make the disfavored creditors better off, promote the possibility of a confirmable plan, help to restore the status quo ante, or protect reliance interests. There is no “rare case” exception, permitting courts to disregard priority in structured dismissals for “sufficient reasons.” View "Czyzewski v. Jevic Holding Corp. " on Justia Law

The Fair Labor Standards Act (FLSA) requires employers to pay overtime compensation to covered employees who work more than 40 hours in a week; a 1966 exemption covers “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership, 29 U.S.C. 213(b)(10)(A). In 1970, the Department of Labor defined “salesman” to mean “an employee who is employed for the purpose of and is primarily engaged in making sales or obtaining orders or contracts for sale of the vehicles . . . which the establishment is primarily engaged in selling.” The regulation excluded service advisors, who sell repair and maintenance services but not vehicles, from the exemption. Several courts rejected that exclusion. In 1978, the Department changed its position, stating that service advisors could be exempt. In 1987, the Department confirmed its new interpretation, amending its Field Operations Handbook. In 2011, the Department issued a final rule that followed the original 1970 regulation and interpreted the statutory term “salesman” to mean only an employee who sells vehicles. The Ninth Circuit reversed dismissal of a suit by service advisors, alleging violation of the FLSA by failing to pay overtime compensation. The Supreme Court vacated. Section 213(b)(10)(A) must be construed without placing controlling weight on the 2011 regulation. Chevron deference is not warranted where the regulation is “procedurally defective.” An agency must give adequate reasons for its decisions. An “[u]nexplained inconsistency” in agency policy is “a reason for holding an interpretation to be an arbitrary and capricious change from agency practice,” not entitled to deference. The 2011 regulation was issued without the reasoned explanation that was required in light of the Department’s change in position and the significant reliance interests. View "Encino Motorcars, LLC v. Navarro" on Justia Law

Green complained to his employer, the U.S. Postal Service, that he was denied a promotion because he was black. His supervisors then accused him of the crime of intentionally delaying the mail. In a 2009 agreement, USPS agreed not to pursue criminal charges. Green agreed either to retire or to accept another position in a remote location. Green chose to retire. In 2010, 41 days after resigning and 96 days after signing the agreement, Green reported an unlawful constructive discharge to the EEOC under Title VII of the Civil Rights Act., 42 U.S.C. 2000e Green eventually filed suit, which was dismissed as untimely because he had not contacted EEOC within 45 days of the “matter alleged to be discriminatory.” The Tenth Circuit affirmed. The Supreme Court vacated. Because part of the “matter alleged to be discriminatory” in a constructive-discharge claim is an employee’s resignation, the 45-day limitations period begins running after an employee resigns. Resignation is part of the “complete and present cause of action” in a constructive-discharge claim, which requires: discriminatory conduct such that a reasonable employee would have felt compelled to resign and actual resignation. Nothing in Title VII or the regulation suggests an exception to the rule. Starting the clock before a plaintiff can file suit would not further the limitations period’s goals and would negate Title VII’s remedial structure. View "Green v. Brennan" on Justia Law

CRST trucking company requires its drivers to graduate from its training program before becoming certified drivers. In 2005, new driver Starke filed an EEOC charge, alleging that she was sexually harassed by male trainers during her training (42 U.S.C. 2000e–5(b)).The Commission ultimately informed CRST that it had found reasonable cause to believe that CRST subjected Starke and “a class of employees and prospective employees to sexual harassment.” In 2007, having determined that conciliation had failed, the Commission filed suit. During discovery, the Commission identified over 250 allegedly aggrieved women. The district court dismissed, held that CRST was a prevailing party, and awarded the company over $4 million in fees. The Eighth Circuit reversed the dismissal of two claims and vacated the award. On remand, the Commission settled Starke’s claim and withdrew the other. The district court again awarded more than $4 million, finding that CRST had prevailed on more than 150 claims because of the Commission’s failure to satisfy pre-suit requirements. The Eighth Circuit reversed, stating that dismissal was not a ruling on the merits. A unanimous Supreme Court vacated. A favorable ruling on the merits is not a necessary predicate to find that a defendant is a prevailing party. A plaintiff seeks a material alteration in the legal relationship between the parties; a defendant seeks to prevent that alteration, and that objective is fulfilled whenever the plaintiff ’s challenge is rebuffed, irrespective of the precise reason for the decision. Title VII’s fee-shifting statute allows prevailing defendants to recover whenever the plaintiff ’s “claim was frivolous, unreasonable, or groundless.” Congress must have intended that a defendant could recover fees expended in such litigation when the case is resolved in the defendant’s favor, whether on the merits or not. View "CRST Van Expedited, Inc. v. Equal Employment Opportunity Comm'n" on Justia Law

The Paterson, New Jersey, chief of police and Officer Heffernan’s supervisor were appointed by Paterson’s incumbent mayor, who was running for re-election against Heffernan's friend, Spagnola. Heffernan was not involved in Spagnola’s campaign. As a favor to his bed-ridden mother, Heffernan delivered her Spagnola campaign yard sign. Other officers reported seeing Heffernan at a Spagnola distribution point while holding that sign. The next day, Heffernan’s supervisors demoted him from detective to patrol officer as punishment for “overt involvement” in Spagnola’s campaign. Heffernan filed suit under 42 U.S.C. 1983. Affirming the district court, the Third Circuit concluded that Heffernan’s claim was actionable under Section 1983 only if his employer’s action was prompted by Heffernan’s actual, rather than his perceived, exercise of free-speech rights. The Supreme Court reversed. When an employer demotes an employee out of a desire to prevent the employee from engaging in protected political activity, the employee is entitled to challenge that unlawful action under the First Amendment and Section 1983 even if the employer’s actions are based on a factual mistake. An employer’s motive, and the facts as the employer reasonably understood them, matter in determining violation of the First Amendment. The harm— discouraging employees from engaging in protected speech or association—is the same, regardless of factual mistake. The lower courts should decide whether the employer may have acted under a neutral policy prohibiting police officers from overt involvement in any political campaign and whether such a policy would comply with constitutional standards. View "Heffernan v. City of Paterson" on Justia Law

Tyson employees working in the kill, cut, and retrim departments of an Iowa pork processing plant are required them to wear protective gear. The exact composition of the gear depends on the tasks a worker performs on a given day. Tyson compensated some, but not all, employees for donning and doffing, and did not record the time each employee spent on those activities. Employees sued under the Fair Labor Standards Act (FLSA) and an Iowa wage law. They sought certification of their state claims as a class action under FRCP 23 and of their FLSA claims as a “collective action,” 29 U.S.C. 216. The court concluded that common questions, such as whether donning and doffing were compensable, were susceptible to classwide resolution even if not all of the workers wore the same gear. To show that they each worked more than 40 hours a week, inclusive of time spent donning and doffing, the employees primarily relied on a study performed by an industrial relations expert, Dr. Mericle. He conducted videotaped observations analyzing how long various donning and doffing activities took, averaged the time, and produced an estimate of 18 minutes a day for the cut and retrim departments and 21.25 minutes for the kill department. These estimates were added to the timesheets of each employee. The jury awarded about $2.9 million. The Eighth Circuit and Supreme Court affirmed. The most significant question common to the class is whether donning and doffing is compensable under FLSA. Because a representative sample may be the only feasible way to establish liability, it cannot be deemed improper merely because the claim was brought on behalf of a class. Each class member could have relied on the Mericle sample to establish liability had each brought an individual action. View "Tyson Foods, Inc. v. Bouaphakeo" on Justia Law

Illinois’ Home Services Rehabilitation Program allows Medi­caid recipients who would normally need institutional care to hire a personal assistant (PA) to provide homecare. Under state law, homecare customers control hiring, firing, training, supervising, and disciplining of Pas and define the PA’s duties in a “Service Plan.” Other than compensating PAs, the state’s role is minimal. Its employer status was created by executive order, solely to permit PAs to join a labor union and engage in collective bargaining under the Illinois Public Labor Relations Act (PLRA). SEIU–HII was designated the exclusive union representative and entered into collective-bargaining agreements with the state that contained an agency-fee provision, which requires all bargaining unit members who do not wish to join the union to pay the cost of certain activities, including those tied to collective-bargaining. PAs brought a class action, claiming that the PLRA violated the First Amendment by authorizing the agency-fee provision. The district court dismissed. The Seventh Circuit affirmed, holding that the PAs were state employees. The Supreme Court reversed in part. Preventing nonmembers from free-riding on union efforts is generally insufficient to overcome First Amendment objections. Noting its “questionable foundations” and that Illinois PAs are quite different from full-fledged public employees, the Court refused to extend the 1977 holding, Abood v. Detroit Bd. of Ed., which was based on the assumption that the union possessed the full scope of powers and duties available under labor law. The PA union has few powers and duties. PAs are almost entirely answerable to customers, not to the state. They do not have most of the rights and benefits of state employees, and are not indemnified by the state for claims arising from actions taken in the course of employment. The scope of collective bargaining on their behalf is very limited. PAs receive the same rate of pay and the union has no authority with respect to grievances against a customer. Because Abood does not control, generally applicable First Amendment standards apply and the agency-fee provision must serve a “compelling state interes[t] ... that cannot be achieved through means significantly less restrictive of associational freedoms.” None of the cited interests in “labor peace” or effective advocacy are sufficient. View "Harris v. Quinn" on Justia Law