Justia Labor & Employment Law Opinion Summaries

A group of former employees at a luxury hotel in Lenox, Massachusetts brought a series of lawsuits against the hotel and its operators, alleging violations of the Fair Labor Standards Act (FLSA) and Massachusetts wage laws. The claims primarily involved misclassification as overtime-exempt, failure to pay minimum wage, mismanagement of tip pools, and other wage-related violations. One plaintiff, after successfully certifying a class of similarly situated employees, joined with others to negotiate a global settlement with the hotel’s owners.Prior to this appeal, the United States District Court for the District of Massachusetts, acting through a magistrate judge, oversaw the coordinated settlement negotiations for four related cases—three individual actions and one class action. After the parties agreed to a global settlement via email, defense counsel confirmed the deal and the court was notified. The individual cases were subsequently dismissed with prejudice. When obstacles arose regarding finalization, including Wheatleigh’s concerns over attorney fees and purported conflicts of interest for class counsel, plaintiffs moved to enforce the settlement. The district court granted the motion, enforced the settlement, and later granted preliminary and then final approval of the class-action settlement, including approval of attorney fees, expenses, and a service award.The United States Court of Appeals for the First Circuit reviewed Wheatleigh’s appeal, which challenged the district court’s rulings on standing, enforcement and approval of the settlement, class certification, and attorney fees. The First Circuit held that the district court did not err in finding Article III standing for the named plaintiff, enforcing the global settlement, approving the class-action settlement despite alleged conflicts of counsel, maintaining class certification, and awarding attorney fees. The First Circuit affirmed the judgment of the district court. View "Mongue v. The Wheatleigh Corporation" on Justia Law

A public employee working for the Pennsylvania Department of Human Services alleged that the union representing her bargaining unit failed to fairly represent her during a workplace grievance process. After being temporarily reassigned during a purported investigation, she lost opportunities for overtime work. She requested the union file a grievance, but claimed the union delayed providing information and failed to adequately pursue her complaint. When she followed up, union officials allegedly made derogatory remarks about her non-membership status and admitted to providing minimal representation. By the time she received notice of the grievance resolution, the period to appeal had expired, and she was dissatisfied with the outcome, believing she was denied proper relief under the collective bargaining agreement.The employee filed suit in the Cambria County Court of Common Pleas against the union, seeking compensatory and punitive damages for breach of the duty of fair representation, but did not request an order for arbitration or join her employer as a party. The trial court granted the union’s preliminary objections and dismissed the complaint with prejudice, finding the claim for damages legally insufficient. On appeal, the Commonwealth Court reversed and remanded, holding it was not free from doubt that the employee could seek damages against the union for such a breach.The Supreme Court of Pennsylvania reviewed the case and held that, under the Public Employe Relations Act (PERA), when a public employee’s claim against a union arises from the union’s handling of a grievance, the employee’s remedy is limited to a court order compelling the union and the employer to arbitrate the grievance nunc pro tunc. Damages against the union are not available in this context, and the public employer is an indispensable party to such proceedings. The Supreme Court reversed the Commonwealth Court’s decision. View "Gustafson v. American Fed. of State" on Justia Law

A cloud-based real estate services company faced persistent and grave allegations that two top agents, along with several others, drugged and sexually assaulted company agents at events. Reports began surfacing in 2020, including a viral social media post and a memo sent to company executives detailing numerous incidents. Despite these warnings, the board initially terminated one perpetrator but continued paying him, and allowed others implicated to continue working. A whistleblower director raised these issues repeatedly at board meetings and with outside counsel, but the board’s responses were limited to internal investigations led by insiders and did not result in meaningful change. The company only took further action after survivors filed federal anti-trafficking lawsuits in 2023 and the story became public.Prior to the current litigation, federal courts sustained anti-trafficking claims against the company and its leadership, finding sufficient allegations that the leadership benefited from retaining perpetrators due to the company’s revenue-sharing structure. The defendants in this derivative action are not accused of direct misconduct, but of harming the company by allowing and covering up systemic sexual abuse. The plaintiff, a shareholder, alleges the board and certain officers actively covered up abuse and breached their fiduciary duties, and that some board members failed their oversight obligations in the face of numerous red flags.The Delaware Court of Chancery reviewed the defendants’ motions to dismiss. It held that workplace sexual misconduct can constitute a corporate trauma supporting a breach of fiduciary duty claim under Delaware law. The court denied dismissal as to claims against the officer alleged to have benefited from covering up abuse, and against the directors for failing to respond in good faith to clear red flags. However, it granted dismissal of a novel claim seeking to extend oversight duties to a control group of shareholders, declining to make new law in that area. View "Los Angeles City Employees' Retirement System v. Sanford" on Justia Law

The plaintiff, a former employee of California State University, Chico, filed suit against her prior employer and other parties alleging employment discrimination, whistleblower retaliation, and wrongful termination. She initiated the lawsuit on April 19, 2019. Under Code of Civil Procedure section 583.310, as extended by Judicial Council emergency rule 10 due to the COVID-19 pandemic, she was required to bring her case to trial by October 19, 2024. However, at a case management conference in March 2024, the trial court scheduled the trial for February 3, 2025, a date beyond the statutory deadline.After the trial date was set, the defendants moved to dismiss the case for failure to bring it to trial within the statutory period. They argued that no exception to the deadline applied, specifically contesting the existence of any oral agreement to extend the deadline. The plaintiff opposed dismissal, asserting that both parties had verbally agreed in open court to the February 2025 trial date, and that this agreement was recorded in the minute order. However, the minute order only documented the setting of the trial and related conferences, and contained no indication of any oral stipulation or agreement. The Superior Court of Butte County found that the plaintiff had not demonstrated a valid oral agreement to extend the deadline under section 583.330, subdivision (b), and granted the motion to dismiss with prejudice.On appeal, the California Court of Appeal, Third Appellate District, reviewed the trial court’s decision under the abuse of discretion standard, and interpreted the statute de novo. The appellate court held that an oral agreement to extend the statutory trial deadline under section 583.330, subdivision (b), must be reflected in the court’s minutes or a transcript. Because the record did not include any such evidence, the exception did not apply. The court affirmed the judgment of dismissal and awarded costs to the defendants. View "Randolph v. Trustees of the Cal. State University" on Justia Law

Several individuals who were employed by the City and County of San Francisco and were at least 40 years old when hired brought a class action lawsuit alleging that the City’s method for calculating disability retirement benefits under its retirement system discriminated against employees based on age. The system employs two formulas; Formula 1 is used if it yields a benefit exceeding a percentage threshold, while Formula 2 is used if the threshold is not met. Plaintiffs argued that Formula 2, which imputes years of service until age 60, resulted in lower benefits for those who entered the retirement system at age 40 or older, in violation of the California Fair Employment and Housing Act (FEHA).After initial proceedings in the San Francisco City and County Superior Court—including a demurrer sustained on statute of limitations grounds and subsequent reversal by the Court of Appeal—the plaintiffs filed an amended complaint asserting FEHA claims for disparate treatment and disparate impact, as well as claims for declaratory relief, breach of contract, and equal protection violations. The trial court certified a class and denied summary judgment due to triable issues of fact. A bench trial followed, where both parties presented expert testimony on whether Formula 2 disparately impacted older employees.The Court of Appeal of the State of California, First Appellate District, Division Four, reviewed the trial court’s findings. It affirmed the judgment, holding that plaintiffs failed to prove intentional age discrimination or disparate impact under FEHA. The court found that Formula 2 was motivated by pension status and credited years of service, not by age, and that plaintiffs’ evidence was insufficient as it was based on hypothetical calculations rather than actual data. The trial court’s denial of plaintiffs’ request to amend their complaint after trial was also upheld, as any alleged error was not reversible on the record. The judgment in favor of the City was affirmed. View "Carroll v. City and County of San Francisco" on Justia Law

Jessica Garcia and other former employees brought a class action against The Merchant of Tennis, Inc., alleging failure to pay wages and other employment violations under California and federal law. In response, Merchant entered into approximately 954 individual settlement agreements (ISAs) with current and former employees, providing cash payments in exchange for waivers of their claims. Garcia, who had not signed an ISA, sought class certification and also moved to invalidate the ISAs, arguing that Merchant had obtained them through fraud and coercion, such as misrepresenting the scope of litigation and the claims being released.The Superior Court of San Bernardino County partially granted Garcia’s motion, finding the ISAs voidable at the election of each settling putative class member. The court ordered that curative notices be sent to those who had signed ISAs, allowing them to revoke their agreements and join the class action. However, the parties could not agree on the notice’s language, specifically whether it should inform class members that they might be required to repay the settlement amount if Merchant prevailed in the action. The trial court ruled that the notice did not need to include such repayment language, reasoning that federal cases suggested repayment was not required before joining the suit and that repayment could be treated as an offset to any judgment.The Court of Appeal of the State of California, Fourth Appellate District, Division Two reviewed the trial court’s order. It held that under California Civil Code sections 1689, 1691, and 1693, class members who rescind their ISAs may be required to repay Merchant the consideration received if Merchant prevails, but such repayment can be delayed until the conclusion of litigation. The trial court retains discretion to adjust equities between the parties at judgment. The writ of mandate was granted, directing the trial court to reconsider the curative notice in accordance with these principles. View "The Merchant of Tennis v. Superior Ct." on Justia Law

The plaintiff, a long-term employee at a private aviation services provider, was diagnosed with breast cancer during the COVID-19 pandemic. Initially, she was permitted to work entirely from home as business slowed, with her in-person duties reassigned to another employee. As business returned to normal, management repeatedly asked her to resume a hybrid work schedule to address essential accounting functions that required physical presence. Although she verbally agreed to return on a part-time basis, she failed to attend in person as promised, communicated sporadically about her schedule, and ultimately missed multiple days of work without proper notice. After this pattern continued for several months, she was discharged for job abandonment.The United States District Court for the Western District of North Carolina granted summary judgment for the employer. The court found that the plaintiff failed to establish a prima facie case of discrimination, retaliation, or failure to accommodate under the Americans with Disabilities Act (ADA). The court determined that, even if such a case were made, the employer had provided legitimate business reasons for its decisions and had made substantial efforts to accommodate the plaintiff’s medical condition.On appeal, the United States Court of Appeals for the Fourth Circuit reviewed the decision de novo. The appellate court held that the plaintiff did not qualify as a “qualified individual” under the ADA because she could not perform the essential functions of her position, even with reasonable accommodation. The court emphasized that the employer’s repeated attempts to accommodate her were sufficient, and her failure to cooperate or consistently communicate precluded liability. The court also rejected her retaliation claim, finding no causal connection between her protected activity and her termination. The judgment of the district court was affirmed. View "Haggins v. Wilson Air Center, LLC" on Justia Law

The plaintiff was employed by the defendant as a collector and customer service representative in California, and upon being hired, electronically signed an arbitration agreement. The agreement broadly required arbitration for disputes relating to employment or termination, and covered claims based on federal, state, or local laws, including the California Labor Code. It also expressly prohibited class or collective adjudication and stated that it “shall be governed by the Federal Arbitration Act and, to the extent permitted by such Act, the laws of the State of California.” In 2023, the plaintiff sued the defendant, asserting both individual and class claims for alleged violations of labor and business statutes.After the complaint was filed in the Superior Court of Los Angeles County, the defendant moved to compel arbitration of the plaintiff’s individual claims and to dismiss the class claims. The defendant submitted evidence that it is a Delaware corporation, previously had offices in Washington, and sourced materials from outside California. The plaintiff opposed, arguing that the Federal Arbitration Act (FAA) did not apply because her employment was exclusively within California and no evidence showed the agreement involved interstate commerce. The trial court found the arbitration agreement valid, held that the FAA applied based on the agreement’s express terms and supporting evidence, and dismissed the class claims per the agreement’s prohibition.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, considered whether the trial court correctly found the FAA governed the arbitration agreement. The appellate court held that the FAA applies because the parties expressly agreed in the contract to be governed by the Act, regardless of whether the underlying transaction actually involved interstate commerce. The court affirmed the order compelling arbitration of the plaintiff’s individual claims and dismissing the class claims. The defendant was awarded costs on appeal. View "Tuufuli v. West Coast Dental Admin. Services" on Justia Law

Osvaldo Figueroa worked as a night-shift turkey loader for a poultry company. His main duties included catching and loading turkeys onto trucks, and sometimes fueling, sanitizing, and washing the trucks before the loading process. Employees recorded their work hours using a punch clock, and paystubs included entries for overtime hours, load trips (base pay per trip), and attendance hours. Figueroa alleged that he and other turkey loaders were not paid promised hourly wages and overtime, claiming violations of both the North Carolina Wage and Hour Act (NCWHA) and the Fair Labor Standards Act (FLSA).The United States District Court for the Eastern District of North Carolina first dismissed Figueroa’s amended complaint, concluding that he was paid under a piece-rate system rather than an hourly wage system, and that he failed to sufficiently allege entitlement to unpaid overtime or hourly wages. The district court also found that he received adequate notice of his compensation structure under the NCWHA. After Figueroa amended his complaint again, the district court dismissed his NCWHA claims but allowed the FLSA claim to proceed to discovery. On summary judgment, the district court found that Figueroa was a piece-rate employee, that overtime was properly calculated according to FLSA regulations, and that Butterball kept accurate records. The court rejected Figueroa’s assertions of improper hour-shifting and unpaid pre-shift work due to lack of supporting evidence for his own situation.On appeal, the United States Court of Appeals for the Fourth Circuit affirmed the district court’s rulings. The appellate court held that Figueroa was properly classified as a piece-rate employee, not an hourly worker, and that Butterball correctly calculated and paid overtime according to FLSA provisions. The court also found that Figueroa did not establish a viable claim under the NCWHA, as any error in dismissal was harmless in light of the record, and that Butterball provided sufficient notice of pay terms. The district court’s orders were affirmed. View "Osvaldo Figueroa v. Butterball, LLC" on Justia Law

CenturyTel of Montana, Inc., a telecommunications provider and subsidiary of Lumen Technologies, maintained a longstanding collective bargaining agreement with the International Brotherhood of Electrical Workers, Local Union 768, covering technicians in northwest Montana. In 2021, concerns arose among various union locals that Lumen was deploying non-union National Technicians to perform work within the jurisdiction of union-represented employees. In response, Local 768 requested detailed information from CenturyTel about the presence and activities of these technicians, aiming to monitor possible violations of the bargaining agreement. After repeated requests and partial responses from the company, the union filed an unfair labor practice charge, alleging CenturyTel’s failure to furnish information necessary for the union to carry out its representational duties.The National Labor Relations Board’s administrative law judge held an evidentiary hearing, at which testimony established that non-union technicians had worked within the union’s jurisdiction and that the union’s information request was relevant to potential grievances. The ALJ credited the union’s account of communications and found that the requested information was “plainly aimed at ascertaining” possible contract violations. The ALJ rejected the employer’s arguments that the union had failed to show an objective basis for its request and that all relevant information had already been provided. As a result, the ALJ concluded that CenturyTel had violated Sections 8(a)(5) and (1) of the National Labor Relations Act and ordered the company to provide the requested information and post a notice of the violation.The United States Court of Appeals for the District of Columbia Circuit reviewed the case and upheld the Board’s order. The court held that substantial evidence supported the Board’s finding that the union had a reasonable belief, supported by objective evidence, that the information was relevant to its duties. The court denied CenturyTel’s petition for review and granted the Board’s cross-application for enforcement. View "CenturyTel of Montana, Inc. v. NLRB" on Justia Law