Justia Labor & Employment Law Opinion Summaries

A former employee brought a single-count action under the Private Attorneys General Act of 2004 (PAGA) against his previous employer, alleging violations of various wage-and-hour provisions of the California Labor Code. The employee had previously signed an arbitration agreement that included waivers of class action, collective action, and representative PAGA claims, with a severability clause stating that any invalidation of the PAGA waiver would require such claims to be litigated in court, not arbitrated. The complaint sought civil penalties on behalf of the employee, other current and former employees, and the State of California, but did not separately seek penalties for violations suffered by the employee personally.The employer moved to compel arbitration, arguing that recent federal and state precedent required arbitration of the "individual component" of the PAGA claim, relying on Viking River Cruises, Inc. v. Moriana and subsequent California cases. The Superior Court of Alameda County denied the motion, reasoning that under California law there was no such thing as an "individual PAGA claim" and, therefore, the claim could not be compelled to arbitration.Reviewing the denial, the Court of Appeal of the State of California, First Appellate District, Division Four, considered the parties’ arguments regarding the interpretation of the arbitration agreement and relevant case law. The court held that, based on the language of the agreement and the intent of the parties at the time it was signed, there was no clear agreement to arbitrate individual PAGA claims if the PAGA waiver was invalidated. The court reasoned that, although recent decisions allow splitting PAGA actions into individual and non-individual claims, the agreement in this case did not provide for such arbitration. Accordingly, the court affirmed the order denying the motion to compel arbitration. View "LaCour v. Marshalls of California" on Justia Law

The plaintiff performed maintenance and handyman work for a property owned by a corporation, with the arrangement that he would receive free rent in exchange for keeping the water system operational and doing various tasks. He worked for the corporation between 2009 and 2016, receiving instructions and approvals from the company’s officer who managed the property. After the arrangement ended, it was undisputed that the plaintiff had not been paid wages apart from free rent. He filed a wage claim with the Division of Labor Standards Enforcement, seeking unpaid wages, liquidated damages, waiting time penalties, and other remedies.After a favorable administrative decision by the Labor Commissioner, finding the plaintiff to be an employee entitled to recover unpaid wages and imposing personal liability on the company officer, the defendants appealed to the Superior Court of Humboldt County. Following a bench trial, the court awarded the plaintiff some unpaid wages and penalties, but calculated the statute of limitations from a later date, declined to impose personal liability on the officer, denied liquidated damages and administrative penalties, and rejected claims under the Unfair Competition Law.The California Court of Appeal, First Appellate District, Division One, reviewing the case after remand from the California Supreme Court, held that the trial court erred in several respects. The appellate court found the statute of limitations should have been calculated from the date the initial wage claim form was filed, not a later complaint. It held that the officer could be held personally liable under Labor Code section 558.1, and that the trial court lacked discretion to deny individual liability when the statutory criteria were met. The court also concluded liquidated damages under section 1194.2 and administrative penalties under section 248.5 should have been awarded, and waiting time penalties should have incorporated the rental value provided as compensation. The judgment was reversed in these respects and remanded for recalculation, while affirmed in other areas. View "Iloff v. LaPaille" on Justia Law

Stericycle, Inc. reorganized its sales department in 2021, creating a new position called Key Account Director (KAD) in both its national and hospital divisions. Cheryl Lane and Adrienne Hause, both female employees, were promoted to the National KAD role. Prior to being promoted, Lane and Hause were National Account Managers with base salaries of $92,784 and $95,026. After expressing concerns about salary disparities between themselves and male Hospital KADs, they received raises increasing their salaries to $98,000. The male Hospital KADs, some promoted and some transferred, generally received higher salaries, with promoted males receiving immediate raises and transferred males retaining their previous, often higher, salaries.The United States District Court for the Northern District of Illinois, Eastern Division, granted summary judgment to Stericycle, finding that Lane and Hause had established a prima facie case under the Equal Pay Act but that Stericycle’s pay practices were justified by a sex-neutral factor: prior salary history. The court found Stericycle had satisfied its affirmative defense for all comparators, concluding that salary disparities were not based on sex. The court also granted summary judgment on the Title VII claim, holding that Lane and Hause had failed to show intentional discrimination.On appeal, the United States Court of Appeals for the Seventh Circuit found genuine disputes of material fact regarding whether Lane and Hause received raises at the time of promotion, as their male counterparts did. The court held that summary judgment was improper in relation to the two promoted male Hospital KADs, as Stericycle failed to prove its affirmative defense as a matter of law, and there was a material factual dispute as to pretext under Title VII. The Seventh Circuit reversed the district court’s judgment and remanded the case for further proceedings. View "Lane v Stericycle, Inc." on Justia Law

Plaintiff was employed by defendant and, as a condition of employment, electronically signed both an offer letter containing an arbitration provision and a separate nondisclosure agreement (NDIAA) on the same day. The offer letter required arbitration for most employment-related disputes, while the NDIAA included terms such as a waiver of bond for injunctive relief and a heightened burden of proof for public domain information. Plaintiff’s employment ended in March 2023, after which she sued defendant in Alameda County Superior Court for disability discrimination, retaliation, and related claims under California’s Fair Employment and Housing Act, as well as wrongful termination. None of her claims involved confidential information or sought injunctive relief.Defendant moved to compel arbitration, asserting the Federal Arbitration Act (FAA) governed and that plaintiff’s claims fell within the arbitration agreement’s scope. The trial court found the arbitration agreement and NDIAA should be read together under California Civil Code section 1642, determined that certain NDIAA provisions were unconscionable, and concluded that unconscionability permeated the arbitration agreement. The court declined to sever the NDIAA’s unconscionable provisions and denied the motion to compel arbitration.On appeal, the California Court of Appeal, First Appellate District, Division Five, disagreed with the trial court’s refusal to sever. The appellate court held that the FAA does not preempt section 1642, and even assuming the NDIAA’s challenged provisions were unconscionable and properly considered alongside the arbitration agreement, those provisions were collateral to the arbitration agreement’s central purpose and did not affect the claims at issue. Applying Ramirez v. Charter Communications, Inc., the appellate court determined that the unconscionable terms should have been severed and the arbitration agreement enforced. Consequently, the order denying arbitration was reversed. View "Wise v. Tesla Motors, Inc." on Justia Law

Karl Rabenhorst, a former Navy officer employed by FEMA, alleged that he was subjected to age and sex discrimination, a hostile work environment, and retaliation after being removed from a Puerto Rico disaster relief operation and later suspended without pay. The incidents leading to these adverse actions included reprimands for inappropriate interactions with state officials and insubordination, such as sending unauthorized emails and making disrespectful remarks. During the Puerto Rico deployment, Rabenhorst used derogatory language toward younger female coworkers, which prompted his removal from the operation.After his removal, Rabenhorst filed internal complaints, including a grievance with the DHS Office of Equal Rights, alleging discrimination and retaliation. FEMA investigated and ultimately denied his claims, issuing a final agency decision in 2021. Rabenhorst then brought suit in the United States District Court for the Northern District of Illinois, Eastern Division, asserting violations of Title VII and the Age Discrimination in Employment Act (ADEA).The United States District Court for the Northern District of Illinois granted summary judgment for the Secretary of Homeland Security, finding that Rabenhorst failed to establish a prima facie case of discrimination, as he did not meet his employer’s legitimate expectations and could not show that similarly situated employees outside his protected classes were treated more favorably. The court also concluded that Rabenhorst provided no evidence of an objectively hostile work environment or that any adverse conduct was based on his age or sex. Regarding retaliation, the court found no causal link between his protected activity and the suspension decision. The United States Court of Appeals for the Seventh Circuit reviewed the district court’s decision de novo and affirmed, holding that Rabenhorst did not provide sufficient evidence to support claims of discrimination, hostile work environment, or retaliation. View "Rabenhorst v. Noem" on Justia Law

Jennifer Gates, a former loan officer at VIP Mortgage, claimed that VIP violated the Fair Labor Standards Act (FLSA) and Arizona state law by failing to pay her required overtime wages. She alleged that she was made to work more than forty hours per week but was instructed to record only eight-hour days on her timesheet. After her resignation in September 2022, Gates initiated arbitration as required by her employment agreement. VIP responded with counterclaims for breach of fiduciary duty and breach of contract, but these were later settled, with both parties agreeing to bear their own attorneys’ fees and costs for the counterclaims.The arbitration took place under the Federal Arbitration Act, and the arbitrator ultimately issued an award in favor of Gates, granting her unpaid overtime, liquidated damages, and attorneys’ fees. Despite the prior stipulation regarding counterclaims, the arbitrator did not distinguish between time spent on Gates’s claims and VIP’s counterclaims when awarding attorneys’ fees. VIP petitioned the United States District Court for the District of Arizona to vacate the award, arguing that the arbitrator erred by awarding attorneys’ fees that included time spent on the counterclaims. The district court found the arbitrator’s decision to be detailed and reasoned, concluding that the arbitrator did not manifestly disregard the law or act irrationally.The United States Court of Appeals for the Ninth Circuit reviewed the case de novo and affirmed the district court’s rulings. The court held that federal courts may vacate arbitration awards based on a factual error only in rare cases where the error involves a “legally dispositive fact” that was obvious and intentionally ignored by the arbitrator. Here, although the factual error was legally dispositive, the arbitrator’s failure to recall the fee stipulation was not so obvious or intentional as to warrant vacatur. The arbitration award was confirmed. View "VIP MORTGAGE INCORPORATED V. GATES" on Justia Law

The plaintiff was employed as a conductor for a railway company and alleged that he was wrongfully terminated in retaliation for engaging in activity protected by the Federal Railroad Safety Act (FRSA). Specifically, he claimed that in January 2019 he refused to allow the train’s engineer to perform a task—lining a switch—due to safety concerns, opting instead to perform the procedure himself. The plaintiff asserted that this refusal was in defiance of a purported “standing order” directing engineers to line switches to expedite train movements. He argued that allowing engineers to leave the controls unattended while lining switches created a hazardous condition.Following his termination for a separate incident in February 2019, the plaintiff pursued complaints through several forums. First, he challenged his dismissal before a Public Law Board, which found that he had violated safety rules but ordered reinstatement without backpay due to disproportionate punishment. He also filed a complaint with OSHA, asserting retaliation for reporting safety concerns and insisting on safe practices. An administrative law judge (ALJ) subsequently dismissed this complaint, finding no credible evidence of a standing order, no proof that the plaintiff had refused to work as required by the statute, and no evidence of a hazardous safety condition at the relevant time.The plaintiff then brought suit in the United States District Court for the District of Kansas, which granted summary judgment to the railway company. On appeal, the United States Court of Appeals for the Tenth Circuit affirmed, but on different grounds. The Tenth Circuit held that the plaintiff failed to establish that he engaged in protected activity under 49 U.S.C. § 20109(b)(1)(B) because he did not refuse to work and was not confronting an imminent hazardous condition. Therefore, he could not make a prima facie case of retaliation under the FRSA. The court affirmed the district court’s judgment. View "Berberich v. Kansas City Southern Railway Company" on Justia Law

Two commercial truck drivers, residents of Connecticut, began working as delivery drivers for a baked goods company through a staffing agency, classified as W-2 employees. After several months, the company required them to create corporations and enter into “Distributor Agreements” in their capacities as presidents of those corporations to continue working. These agreements included mandatory arbitration clauses and disclaimed an employee-employer relationship. Despite the new contractual arrangement, the drivers’ daily responsibilities remained unchanged, consisting of picking up baked goods from the company’s warehouse and delivering them to retail outlets.Seeking relief under Connecticut wage and overtime laws, the drivers initiated a putative class action in Connecticut Superior Court. The baked goods company removed the case to the United States District Court for the District of Connecticut, invoking diversity jurisdiction. The company then moved to compel arbitration pursuant to the contractual arbitration clauses. The drivers opposed, arguing that the agreements were “contracts of employment” exempt from the Federal Arbitration Act (FAA) under § 1, that they were not bound in their individual capacities, and that the clauses were unenforceable. The District Court ruled in favor of the company, granting the motion to compel arbitration, and held that the agreements were not “contracts of employment” under § 1 of the FAA.On interlocutory appeal, the United States Court of Appeals for the Second Circuit reviewed the District Court’s order de novo. The Second Circuit held that the agreements, though signed by corporate entities created at the company’s request, were “contracts of employment” within the meaning of § 1 of the FAA, as they were contracts for the performance of work by workers. Consequently, the court vacated the District Court’s order compelling arbitration and remanded for further proceedings. View "Silva v. Schmidt Baking Distribution, LLC" on Justia Law

Elena Mukhina, a Russian national who practices Russian Folk Christianity and has limited English proficiency, worked at Walmart in the apparel department where she interacted with customers. During her employment, she reported experiencing daily mockery and rude behavior from both customers and coworkers due to her inability to speak English fluently. She requested a transfer to the night shift, which was granted several weeks later, and her working conditions improved, though some negative treatment persisted. Mukhina also requested time off for New Year’s Eve, which she described as an important holiday for Russians. Her supervisor denied the request based on a first-come, first-served policy. Mukhina took the day off anyway and received attendance points per Walmart policy. After filing an ethics complaint, she experienced mixed changes in coworker behavior and eventually quit; Walmart then formally terminated her employment.The United States District Court for the Southern District of Alabama reviewed Mukhina’s claims of hostile work environment based on national origin, religious discrimination for denial of holiday leave, and retaliatory discharge. The court granted summary judgment for Walmart, finding that Mukhina did not present sufficient evidence that the alleged harassment was based on her national origin, that any harassment was severe or pervasive, or that Walmart was liable for coworker or customer conduct. The court also held that she failed to exhaust her administrative remedies for religious discrimination and did not inform Walmart of the religious nature of her holiday request. On retaliation, the court found no causal connection between her complaints and any adverse employment action.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s grant of summary judgment. The Eleventh Circuit held that Mukhina failed to present substantial evidence of a hostile work environment or retaliation, and failed to exhaust administrative remedies for her religious discrimination claim. View "Mukhina v. Walmart, Inc." on Justia Law

A public hospital in New York contracted with a new parking management company to provide valet services, replacing a previous vendor whose employees were represented by a union and were covered by a collective bargaining agreement (CBA). After winning the contract, the new company considered retaining the existing unionized valet attendants but ultimately did not hire any of them, despite initially recruiting them. Instead, the company posted job listings for the same roles and hired other workers, leaving the former unionized employees without jobs. Evidence suggested that the new company’s refusal to hire was motivated by the employees’ union affiliation.After the union filed an unfair labor practice charge, the Regional Director of the National Labor Relations Board (NLRB) filed a petition with the United States District Court for the Eastern District of New York, seeking a temporary injunction under § 10(j) of the National Labor Relations Act. The requested injunction would have required the company to reinstate the discharged employees, recognize the union, and bargain in good faith. The district court denied the petition in a brief text order, finding no cognizable irreparable harm and noting the delay in seeking relief. Meanwhile, an Administrative Law Judge found that the company violated the Act by refusing to hire the unionized employees and failing to recognize and bargain with the union.The United States Court of Appeals for the Second Circuit reviewed the district court’s denial. The Second Circuit held that the district court’s order violated Rule 52(a)(2) by failing to provide adequate findings and conclusions. The Second Circuit further found that the Regional Director had met all four prongs required for a § 10(j) injunction: likelihood of success on the merits, irreparable harm, balance of equities, and public interest. The court reversed the district court’s order and remanded for entry of the requested injunction. View "Poor v. Parking Systems Plus, Inc." on Justia Law