Justia Labor & Employment Law Opinion Summaries

In this case, several former employees of a seafood company participated in an employee stock ownership plan (ESOP) that was funded by a $92 million loan used to purchase all outstanding company stock from four directors and officers. The plaintiffs alleged that these directors and officers manipulated sales projections and inventory figures to inflate the stock’s valuation, causing the ESOP to overpay by tens of millions of dollars. They further claimed that the plan’s trustee failed to conduct proper due diligence before agreeing to the purchase price. The plaintiffs sought restoration of plan losses, disgorgement of profits, and other equitable relief under ERISA, asserting breaches of fiduciary duty.The plaintiffs filed suit in the United States District Court for the Northern District of Georgia without first exhausting the plan’s internal administrative remedies, despite acknowledging that the plan provided such procedures. They argued that exhaustion was not required for their claims and, alternatively, that they were excused from exhausting due to futility and inadequacy of the remedy. The defendants moved to dismiss on exhaustion grounds. The district court granted the motions, finding that Eleventh Circuit precedent required exhaustion for ERISA claims, and rejected the plaintiffs’ arguments for excusal. The court also denied the plaintiffs’ request for a stay to allow exhaustion, but did not specify whether the dismissal was with or without prejudice.On appeal, the United States Court of Appeals for the Eleventh Circuit affirmed the district court’s dismissal. The appellate court held that ERISA plaintiffs must exhaust available administrative remedies before seeking judicial review, including for breach of fiduciary duty claims, and that no valid excuse relieved the plaintiffs of this obligation. The court also remanded the case for the district court to clarify whether the dismissal was with or without prejudice. View "Bolton v. Inland Fresh Seafood Corporation of America, Inc." on Justia Law

A correctional officer employed by the Texas Department of Criminal Justice (TDCJ) for 18 years suffered from diabetes, hypertension, and chronic back pain. She took intermittent leave under TDCJ’s leave-without-pay (LWOP) policy, which allowed up to 180 days of leave in a rolling 12-month period. After returning from leave in 2017, she was reassigned to a less desirable shift without explanation, leading her to file internal grievances and an equal employment opportunity (EEO) complaint. Although her grievance was sustained and she was returned to her preferred shift, subsequent confusion over her LWOP balance resulted in her termination in 2018. She later reapplied for her job but was not rehired, despite recommendations in her favor and a shortage of correctional officers.The United States District Court for the Eastern District of Texas heard her claims under the Americans with Disabilities Act (ADA) and Section 504 of the Rehabilitation Act. After a jury trial, she prevailed on all counts, receiving $1.8 million in damages, which the district court reduced to $1 million after excluding emotional distress damages per Supreme Court precedent. The court denied the defendants’ motions for judgment as a matter of law and for a new trial, entering final judgment for the plaintiff and awarding attorney’s fees and costs.On appeal, the United States Court of Appeals for the Fifth Circuit held that monetary relief against the executive director under the ADA was barred by sovereign immunity and reversed that portion of the judgment. The court affirmed the jury’s findings on discrimination and retaliation under the Rehabilitation Act against TDCJ, but found the $1 million damages award included amounts that should have been considered front pay, not back pay, and remanded for recalculation. The court also vacated the attorney’s fee award against the executive director and remanded for reconsideration of fees against TDCJ. The judgment was affirmed in part, reversed in part, vacated, and remanded. View "Harmon v. Collier" on Justia Law

SuperValu, Inc. participated in a multiemployer pension plan, contributing on behalf of its employees for over a decade. In September 2018, SuperValu sold several stores to Schnuck’s Markets, Inc., with five of those stores employing workers covered by the pension plan. This sale qualified for a statutory “safe harbor,” meaning SuperValu did not incur withdrawal liability for the sold stores, as Schnuck’s agreed to continue contributions. Later, SuperValu closed its remaining stores and fully withdrew from the plan, triggering withdrawal liability. The pension fund calculated SuperValu’s total liability and the annual installment payments required, using statutory formulas. In calculating the payment schedule, the fund deducted the sold stores’ contribution base units for only the most recent five years, not the entire ten-year lookback period, which resulted in higher annual payments for SuperValu.SuperValu challenged the fund’s calculation, arguing that the contribution base units for the sold stores should have been excluded for all ten years, not just five. The dispute was submitted to arbitration under federal law, where the arbitrator ruled in favor of the fund. SuperValu then sought review in the United States District Court for the Northern District of Illinois, Eastern Division. The district court granted summary judgment to the fund, holding that the relevant statutory text did not require the deduction of the sold stores’ units for the entire ten-year period, and that SuperValu’s arguments based on legislative history and statutory purpose could not override the plain language.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s decision de novo. The Seventh Circuit held that the statute governing the payment schedule for withdrawal liability does not require a pension fund to deduct contribution base units for stores sold under the safe harbor provision for the entire ten-year lookback period. The court affirmed the district court’s judgment. View "SuperValu, Inc. v. UFCW Unions and Employers Midwest Pension Fund" on Justia Law

Several pilots were terminated by United Airlines after the company implemented a COVID-19 vaccine mandate. These pilots, represented by their union, the Air Line Pilots Association (ALPA), believed that the union did not do enough to oppose United’s vaccination policies. The pilots had previously filed grievances challenging the mandate, arguing that United’s actions violated the status quo required under the Railway Labor Act because the collective bargaining agreement had expired. ALPA did not support these grievances or file its own, but did file a separate grievance arguing that termination for being unvaccinated was not justified. The pilots’ termination grievances remain pending at their request.After their terminations, the pilots sued ALPA in the United States District Court for the Northern District of Illinois, Eastern Division, alleging that the union breached its duty of fair representation by failing to adequately oppose United’s vaccine mandate. ALPA moved to dismiss the complaint, arguing that the claim was unripe and failed to state a claim. The district court denied the motion to dismiss for lack of ripeness but granted the motion to dismiss for failure to state a claim. The court also denied the pilots’ request to file an amended complaint, finding that amendment would be futile.On appeal, the United States Court of Appeals for the Seventh Circuit reviewed the district court’s decisions de novo. The Seventh Circuit held that the case was ripe because the pilots’ alleged harm—termination—had already occurred. However, the court affirmed the dismissal, holding that the pilots failed to plausibly allege that ALPA’s actions were arbitrary, discriminatory, or in bad faith, as required to state a claim for breach of the duty of fair representation. The court also affirmed the denial of leave to amend, finding that the proposed amended complaint would not cure the deficiencies. The judgment of the district court was affirmed. View "Wickstrom v Air Line Pilots Association, International" on Justia Law

An Arab American faculty member began working at a university as an adjunct instructor and later held a term faculty position. In April 2017, he and another faculty member were informed that their contracts would not be renewed due to budget constraints. Around the same time, the university received a letter from an attorney alleging that the faculty member had engaged in repeated acts of sexual misconduct with a student. The university’s Title IX coordinator initiated an investigation, during which the faculty member admitted to a sexual relationship with the student but claimed it was consensual and began after she was no longer his student. The student did not participate in the investigation, and the coordinator found insufficient evidence of misconduct. The department chair and the faculty member discussed his possible reappointment as an adjunct, but after the student filed a lawsuit alleging sexual harassment and other misconduct, the university decided not to hire him as an adjunct, citing low course enrollment, his compensation request, and the lawsuit. A second investigation was launched, and this time the coordinator found, by a preponderance of the evidence, that the faculty member had sexually harassed the student. The university then deemed him ineligible for future employment.The faculty member sued the university and two former employees in the United States District Court for the Northern District of Illinois, alleging racial discrimination under 42 U.S.C. § 1981, among other claims. The district court dismissed his other claims and granted summary judgment to the university on the § 1981 claim, finding that the university had provided legitimate, nondiscriminatory reasons for its actions and that the faculty member had not shown these reasons were pretext for racial discrimination.The United States Court of Appeals for the Seventh Circuit reviewed the case de novo and affirmed the district court’s judgment. The Seventh Circuit held that the faculty member failed to present evidence that the university’s stated reasons for its employment decisions were pretext for racial discrimination. View "Saud v DePaul University" on Justia Law

Wayne Gandy, a professional football player, spent 15 years in the NFL, beginning with the Los Angeles Rams in 1994, then the St. Louis Rams, followed by the Pittsburgh Steelers, New Orleans Saints, and finally the Atlanta Falcons until his retirement in 2009. Gandy signed his initial contract in California with the LA Rams, which also covered his time with the STL Rams. Throughout his career, he played a limited number of games and practiced occasionally in California, but the majority of his employment and games were outside the state.After retiring, Gandy filed a workers’ compensation claim in California in 2015, alleging cumulative injuries from his NFL career. The claim named several teams as employers. The Workers’ Compensation Judge (WCJ) found that the Falcons provided workers’ compensation coverage under Georgia law, which also covered Gandy’s work in California, and determined both Gandy and the Falcons were exempt from California workers’ compensation law under Labor Code section 3600.5. The WCJ did not address the liability of other teams. Gandy petitioned for reconsideration, and the Workers’ Compensation Appeals Board (WCAB) rescinded the WCJ’s decision, asserting jurisdiction over Gandy’s claim based on his initial California contract and disregarding the choice of law and forum selection clauses.The California Court of Appeal, Fourth Appellate District, Division Three, reviewed the case. The court held that the Falcons are exempt from liability under California workers’ compensation law pursuant to Labor Code sections 3600.5(c) and (d), as Gandy did not meet the statutory requirements for coverage: he worked only one season for a California-based team and spent less than 20 percent of his career in California. The WCAB’s decision was annulled, and the matter was remanded for further proceedings consistent with this opinion. View "Atlanta Falcons v. Workers' Compensation Appeals Bd." on Justia Law

Plaintiff was employed by a staffing company and assigned to work at a warehousing and logistics firm, performing duties as a materials handler and forklift operator. He filed a class action and a separate representative action alleging various wage and hour violations, including claims for unpaid minimum wages, waiting time penalties, and civil penalties under the Private Attorneys General Act (PAGA). The two cases were consolidated. The plaintiff and his direct employer had entered into an arbitration agreement, which referenced the American Arbitration Association (AAA) rules but did not explicitly state that the arbitrator would decide issues of arbitrability.The defendants moved in the Superior Court of Los Angeles County to compel arbitration of the plaintiff’s individual claims, dismiss class allegations, and stay judicial proceedings. They argued that the arbitration agreement was governed by the Federal Arbitration Act (FAA) and that the AAA rules incorporated into the agreement delegated arbitrability issues to the arbitrator. The plaintiff opposed, asserting exemption from the FAA as a transportation worker and arguing that certain claims, including those under PAGA and for unpaid wages, were not arbitrable under California law. The trial court found the FAA did not apply, applied California law, and held that the agreement did not clearly and unmistakably delegate arbitrability to the arbitrator. The court compelled arbitration of some claims but allowed others, including minimum wage and PAGA claims, to proceed in court.On appeal, the California Court of Appeal, Second Appellate District, Division Eight, affirmed the trial court’s order. The court held that, in the context of a mandatory employment arbitration agreement, mere incorporation of AAA rules without explicit language in the agreement is not clear and unmistakable evidence of intent to delegate arbitrability to the arbitrator. The court also held that claims for waiting time penalties based on minimum wage violations and all PAGA claims were not arbitrable under California law when the FAA does not apply. View "Villalobos v. Maersk, Inc." on Justia Law

A group of more than 80 former at-will employees of a nonprofit healthcare system in Washington were terminated after refusing to comply with a COVID-19 vaccination mandate issued by their employer, which was in response to an August 2021 proclamation by the state’s governor requiring healthcare workers to be vaccinated. The employees alleged that, at the time, only an “investigational” vaccine authorized for emergency use was available, and they claimed their rights were violated when they were penalized for refusing it. They also argued they were not adequately informed of their right to refuse the vaccine.The United States District Court for the Western District of Washington first dismissed all claims against the governor, then dismissed the federal claims against the healthcare system, and denied the employees’ motions for leave to amend and reconsideration. The district court also declined to exercise supplemental jurisdiction over the remaining state-law claims against the healthcare system.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s dismissal. The Ninth Circuit held that none of the employees’ statutory or non-constitutional claims, which were based on various federal statutes, regulations, agreements, and international treaties, alleged specific and definite rights enforceable under 42 U.S.C. § 1983. The court also found that the employees’ constitutional claims failed: the Fourteenth Amendment substantive due process claim was foreclosed by Jacobson v. Massachusetts and Health Freedom Defense Fund, Inc. v. Carvalho; the procedural due process claim failed because at-will employment is not a constitutionally protected property interest; and the equal protection claim failed because the mandate survived rational-basis review. The court further held that amendment of the federal claims would be futile and upheld the district court’s dismissal of the state law claims against the governor and its decision to decline supplemental jurisdiction over the state law claims against the healthcare system. View "Curtis v. Inslee" on Justia Law

The plaintiff, an hourly licensed attorney document reviewer, worked for a legal document review company with offices in Minnesota. In 2019, the company changed its overtime policy, eliminating premium overtime pay and stating that employees would be paid only their base rate for all hours worked. In 2020, the plaintiff filed a lawsuit on behalf of himself and similarly situated employees, alleging that the company failed to pay required overtime wages, in violation of the Minnesota Payment of Wages Act (MPWA), the Minnesota Fair Labor Standards Act (MFLSA), and the Minnesota Wage Theft Act (MWTA). The company subsequently paid the plaintiff and other affected employees all claimed overtime wages and liquidated damages, but the parties disagreed about the availability of statutory penalties.The United States District Court for the District of Minnesota granted summary judgment to the employer on all claims. The court did not address whether the employer had violated the statutes, as the parties had stipulated that the only remaining dispute concerned penalties. The plaintiff appealed, arguing that he was entitled to statutory penalties and injunctive relief.The United States Court of Appeals for the Eighth Circuit affirmed in part and vacated in part. The court held that only the Commissioner of Labor and Industry, not individual employees, may seek average daily wage penalties under the MPWA. Regarding the MFLSA claim, the court found that, because the plaintiff had received all owed wages and liquidated damages, and because penalties are payable to the Commissioner, there was a question of mootness and standing. The court vacated the summary judgment on the MFLSA claim and remanded for the district court to determine its jurisdiction. The court affirmed the dismissal of the MWTA claim and the denial of injunctive relief, finding no statutory basis for penalties and that the request for injunctive relief was not properly before the court. View "Cohen v. Consilio, LLC" on Justia Law

Three former employees of a large convenience store chain alleged that they were denied the opportunity to apply for a promotion to West Coast regional director because of their age. All three had strong performance records and had expressed interest in advancement. When the position became available in early 2020, the company did not announce the vacancy or solicit applications, as it had done in the past. Instead, it selected a younger candidate, who had previously served as a regional director in another area, without giving the plaintiffs a chance to apply. At the time, the plaintiffs were in their mid-50s, while the selected candidate was 45.After the plaintiffs filed suit in California state court, the case was removed to the United States District Court for the Central District of California. The district court granted summary judgment for the employer, holding that the plaintiffs failed to establish a prima facie case of age discrimination because they had not applied for the position. The court also found that, even if a prima facie case existed, the employer had provided a legitimate, nondiscriminatory reason for its decision, and the plaintiffs had not shown that this reason was pretextual.The United States Court of Appeals for the Ninth Circuit reviewed the case and reversed the district court’s decision. The Ninth Circuit held that, when an employer does not announce a vacancy or solicit applications, plaintiffs are not required to show that they applied for the position to establish a prima facie case of age discrimination. The court also clarified that, although a ten-year age difference is the usual threshold for a “substantial” age gap, plaintiffs can overcome a smaller gap by providing evidence that age was a significant factor in the employer’s decision. The court found that the plaintiffs had presented sufficient evidence to create a triable issue of pretext and remanded the case for further proceedings. View "CALDRONE V. CIRCLE K STORES INC." on Justia Law