By Christophe R. Difo and Martha J. Zackin
Does a “make whole” offer of judgment to the lead plaintiff in a wage and hour collective action put an end to the case? According to the US Supreme Court, the answer is “yes”- at least on the specific facts of the case before it.
On April 10th, the Department of Labor released its fiscal year 2014 budget request. As reported in a press release describing the budget request, the DOL has asked for $12.1 billion in discretionary funding to support “President Obama's plan to strengthen the economy and grow the middle class through continued investments in training and resources for job seekers.” The request seeks significant resources devoted to putting veterans to work, and to creating employment opportunities for the long-term unemployed and low-income adults and youths.
A significant recent Seventh Circuit decision, written by noted Judge Richard Posner, affirmed decertification of an FLSA collective action, essentially on the ground that the collective action could not satisfy the predominance standard under Fed. R. Civ. P. 23(b)(3). You read that correctly. In Espenscheid v. DirectSAT USA LLC, No. 12-1943 (7th Cir. Feb. 4, 2013), Judge Posner opines that the only material distinction between FLSA collective actions and Rule 23 class actions is that the former requires opt-in participation by class members, whereas the latter provides for automatic class member participation, subject to the right to opt out of classes seeking money damages. In all other respects that collective actions and class actions serve the same purposes – efficient resolution of disputes of the claims of similarly-situated plaintiffs. Therefore, Judge Posner reasons, there is no reason why the standard for certification of FLSA collective actions seeking money damages should differ from the standard for certification of a class to seek money damages under Rule 23(b)(3). Judge Posner finds that common issues of fact and law do not predominate for the Espenscheid class because entitlement to overtime compensation or failure to be paid minimum wage could not be established through proof common to the class as a whole. Accordingly, Judge Posner rules that the district court appropriately decertified the collective action to pursue FLSA claims.
With Hurricane Sandy now one week behind us (and winter storm season staring us in the face), we thought now is a good time for a refresher on the impact of a natural disaster or other emergency on federal and state wage and hour laws. In short, the wage and hour laws provide no exceptions for wintry weather or even unprecedented natural disasters or Frankenstorms such as Sandy. So while employers are focusing on making repairs to their infrastructure and getting back to business, they should also focus on their wage and hour obligations under the Fair Labor Standards Act and state law. So, let’s get to the specifics:
My colleague, David Barmak, has published an alert describing the Supreme Court decision in Christopher v SmithKline Beecham Corp., handed down on Monday, June 19. Click here to read David's analysis of this major win for pharmaceutical companies,
The Supreme Court has refused to consider the issue of whether the Fair Labor Standards Act’s anti-retaliation provision applies to prospective employees. Its refusal leaves intact a Fourth Circuit Court of Appeals decision extending the FLSA anti-retaliation provision to current and former employees only and barring such claims by prospective employees. You can read our previous entry on the Fourth Circuit’s decision here. We will provide further updates as other courts weigh in on this issue over time.
Unpaid interns: They are as ubiquitous as taxis in New York and suntans in Los Angeles, especially in the entertainment, media, and fashion industries. Indeed, for many college students and graduates, unpaid internships represent a door to possible future employment in these competitive industries. For more, click here for an article written by my colleagues Jessica W. Catlow, Richard H. Block, and H. Andrew Matksin.
Employers should take notice of a recent case out of the Southern District of New York, Raniere v. Citigroup, Inc., 11 Civ. 2448, 2011 WL 5881926 (S.D.N.Y. Nov. 22, 2011) (Sweet, J.), in which the court concluded that a Fair Labor Standards Act collective action waiver included in an arbitration agreement is unenforceable as a matter of law. (As discussed in a previous blog entry, collective actions are distinct from the more-commonly discussed class actions.)
The United States Supreme Court will determine whether pharmaceutical sales representatives qualify as exempt under the Fair Labor Standards Act’s outside salesperson exemption. In doing so, the Supreme Court will resolve a split between the Second and Ninth Circuit Courts of Appeals (and numerous other district courts over this issue). More specifically, as we wrote about here, last year the Second Circuit found that the FLSA does not exempt pharmaceutical sales representatives from its overtime obligations; recently, the Ninth Circuit reached the opposite conclusion.
The Supreme Court’s decision will be important in two respects. First, it would affect the 60,000-90,000 sales representatives believed to be employed industry-wide. Second, and perhaps more importantly to employers generally, the Court will also rule on the level of deference a court must provide to a Department of Labor interpretation of its own FLSA regulation.
On November 6, 2011 at 2:00 a.m. daylight savings time will end and most clocks across the country should be set back an hour from 2:00 a.m. to 1:00 a.m. Non-exempt employees working a shift during that time must be provided with an additional hour of pay. For example, if an employee’s shift runs from 10:00 p.m. to 6:00 a.m., the employee will receive nine hours of pay instead of eight hours of pay because he or she will have worked the 1:00 a.m. hour twice. In calculating any overtime due, employers must count this additional hour in determining whether the employee crossed the 40-hour threshold and must also include the additional hour of pay in calculating the employee’s overtime rate.
According to the Wall Street Journal, RIM employees left “no stone unturned” in an effort to resolve the recent, well-publicized blackberry outages. Once the outages were finally resolved, should non-exempt employees be paid overtime for the time they spent at home catching up on the emails accumulated on their Blackberrys? For the answer to this and other thorny questions, click here.
An earthquake and a hurricane in one week in New York and elsewhere!? With the former, you may have had to evacuate your employees from the building; with the latter, it is becoming increasingly likely that your east coast employees may not even make into the building. Understandably, employers often become frustrated when Mother Nature disrupts their businesses, especially because of adverse weather conditions. In New York, most often, it’s due to a blizzard. But next week, for the first time since 1985, it may be because of a hurricane.
The Fourth Circuit Court of Appeals recently dismissed a Fair Labor Standards Act retaliation claim where the plaintiff alleged that the defendant refused to hire her because she had sued her previous employer for wage and hour violations. In Dellinger v. SAIC, the Fourth Circuit reasoned that because the Fair Labor Standards Act (FLSA) only permits “employees” to sue their “employers” for retaliation, an employer cannot retaliate against someone they never actually hired as an employee. The result would likely have been different had the case been brought under Title VII rather than under the FLSA- unlike the FLSA, Title VII specifically prohibits discrimination and retaliation against applicants for employment.
