Justia Labor & Employment Law Opinion Summaries

Several former executives and employees of a storage company were terminated or allegedly constructively terminated and subsequently brought claims against the company and its principals for wrongful termination, retaliation, harassment, and related causes of action. The company, in turn, sued two of the former executives, alleging breach of contract and misuse of confidential information, including forwarding company emails to personal accounts. The emails at issue contained communications from the company’s legal counsel and were allegedly attorney-client privileged. After their terminations, the former employees provided these emails to their attorney for use in their lawsuits against the company.The Superior Court of Orange County considered the company’s motions to disqualify the law firm representing the former employees, based on the firm’s possession and use of the disputed emails. The court found the emails were privileged and that the company held the privilege. However, it denied the motions, reasoning that the employees had been intended recipients of the emails, that privileged content would not be used to the company’s disadvantage, and that the emails were central to both parties’ claims.On appeal, the California Court of Appeal, Fourth Appellate District, Division Three, held that the trial court abused its discretion. The appellate court determined that the proper analytical framework for attorney disqualification, as set forth in State Comp. Ins. Fund v. WPS, Inc., should apply not only to inadvertently disclosed privileged material but also to situations where an attorney receives material that was impermissibly taken from the privilege holder without authorization. The appellate court found the trial court erred in its legal analysis, failed to properly apply the relevant standard regarding future prejudice, and made unsupported findings. The court reversed the trial court’s orders and remanded for reconsideration of the disqualification motions under the correct legal standards. View "Guardian Storage Centers v. Simpson" on Justia Law

A former employee brought a class action lawsuit against her former employer, alleging violations of California wage and hour laws and other employment-related statutes. After the complaint was filed, the employer entered into approximately 954 individual settlement agreements with other employees, providing cash payments in exchange for releases of claims. The plaintiff did not sign such an agreement but moved for class certification and later sought to invalidate the individual settlements on the grounds of fraud and coercion, arguing the employer misrepresented the litigation’s status and the scope of the settlements.The Superior Court of San Bernardino County partially granted the motion, ruling that the individual settlement agreements were voidable due to fraud or duress and ordered that a curative notice be sent to affected employees. The court’s notice advised that employees could rescind their agreements and join the class action, but did not require immediate repayment of settlement funds to the employer. The employer objected, arguing the notice should have informed employees that they might be required to return the settlement money if they rescinded and the employer ultimately prevailed in the litigation. The trial court declined to include this language, instead following certain federal cases that allowed offsetting the settlement amount against any recovery but did not require repayment before judgment.The California Court of Appeal, Fourth Appellate District, Division Two, reviewed the case on a writ. The court held that under California Civil Code sections 1689, 1691, and 1693, employees who rescind their settlement agreements may be required to repay the consideration they received, but repayment can be delayed until final judgment unless the employer shows substantial prejudice from delay. The court also found the trial court retains equitable authority to adjust repayment at judgment under section 1692. The appellate court directed the trial court to reconsider the curative notice in accordance with these principles. Each side was ordered to bear their own costs on appeal. View "The Merchant of Tennis, Inc. v. Superior Court" on Justia Law

Energy Harbor Nuclear Corporation operated a power plant in Pennsylvania, where its employees were represented by the International Brotherhood of Electrical Workers, Local 29. After a 2021 dispute over health care benefit contributions, an arbitrator found that Energy Harbor had underpaid and ordered it to make additional contributions for 2021. Later, the parties entered into a new collective-bargaining agreement (CBA) on October 1, 2021, which included a broad arbitration clause and a merger clause voiding prior agreements not incorporated into the new CBA. When the union later alleged that Energy Harbor similarly underpaid contributions for 2022, it filed a grievance, contending that Energy Harbor failed to adjust 2022 contributions as required by the prior arbitration award.The United States District Court for the Western District of Pennsylvania reviewed the matter after the union sought to compel arbitration. The District Court, adopting a magistrate judge’s recommendation, held that the broad arbitration clause in the new CBA covered the dispute regarding the 2022 contributions. The court reasoned that because the grievance referenced the contribution-increase provision of the CBA, the dispute was subject to arbitration, and found no evidence that the parties intended to exclude such claims from arbitration.On appeal, the United States Court of Appeals for the Third Circuit reversed. The Third Circuit held that, although the arbitration clause was broad, the union’s grievance regarding 2022 contributions did not arise under the new CBA but instead relied on the prior arbitration award, which was not incorporated into the new agreement. The court concluded that the dispute had “nothing to do with” the rights under the CBA because there was no evidence of a required increase in Energy Harbor’s health care plan costs from 2021 to 2022. The Third Circuit reversed and remanded with instructions to grant summary judgment for Energy Harbor. View "International Brotherhood of Electrical Workers Local Union 29 v. Energy Harbor Nuclear Corp" on Justia Law

On the evening of October 2, 2024, an employee was jogging in the parking lot of a Walmart distribution center when he was struck by a tractor-trailer driven by another Walmart employee who was performing his job duties. Both individuals were employed by Walmart at the time of the incident. The injured employee subsequently filed suit against Walmart and the co-employee, seeking damages under various tort theories, including negligence, wantonness, and co-employee liability.The case was first heard in the Pike Circuit Court. Walmart responded to the complaint by raising the defense that the employee’s claims were barred by the exclusive-remedy provisions of Alabama’s Workers’ Compensation Act, as the injured employee had already accepted workers’ compensation and medical benefits for the incident, while represented by counsel, and had not reserved any right to pursue other remedies. The trial court granted summary judgment in favor of Walmart and the co-employee, finding the acceptance of workers’ compensation benefits estopped the employee from pursuing additional remedies and that there was no evidence of willful conduct by the co-employee.On appeal, the Supreme Court of Alabama reviewed the trial court’s decision de novo. The Supreme Court affirmed the summary judgment, holding that the employee’s acceptance of workers’ compensation benefits constituted an election of remedies that precluded him from seeking damages through a civil tort action against Walmart. The Court also held that, under Alabama law, co-employees are immune from civil liability except in cases of willful conduct, and the plaintiff failed to present substantial evidence of willful conduct by the co-employee. Thus, the Supreme Court affirmed the trial court’s summary judgment in favor of both Walmart and the co-employee. View "Duke v. Walmart, Inc." on Justia Law

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