Welcome back for this month’s edition of the Bubbler!  There’s plenty to talk about, so let’s jump right in.

The California Supreme Court issued an important decision this week addressing the test for whether a worker is an independent contractor or an employee.  The U.S. Supreme Court declined to review a Seventh Circuit decision upholding an employer’s rule that a months-long leave of absence was not a reasonable accommodation. The Ninth Circuit held that employers are prohibited from using an employee’s past salary as a legitimate “factor other than sex” for purposes of defeating a Fair Pay Act claim, emphasizing that allowing the inclusion of prior salaries would only perpetuate gender pay disparity. The Fifth Circuit downsized ERISA fiduciary standards in a ruling that invalidated a set of seven expansive fiduciary rules. The Northern District of Illinois issued an unusual ruling, holding that two plaintiffs’ claims were subject to an enforceable arbitration agreement, yet refused to compel arbitration. The DOJ challenged a set of competitors’ no-poaching agreements as per se violations of the Sherman Act, which regulates concerted anti-competitive action. Finally, in the wake of the #MeToo movement, New York (state and city) have passed new laws concerning workplace sexual harassment.

As always, stay tuned for more employment matters updates!

Last week, the U.S. Supreme Court declined to review a decision by the Seventh Circuit Court of Appeals holding that a multi-month leave of absence is beyond the scope of a reasonable accommodation under the Americans with Disabilities Act (ADA). The plaintiff in Severson v. Heartland Woodcraft, Inc. had asked the Supreme Court to decide whether there is a per se rule that a finite leave of absence of more than one month cannot be a reasonable accommodation under the ADA.  Without the Supreme Court stepping in to resolve the split among the federal circuit courts, employers are left without clear guidance as to how to navigate the interplay between the ADA and extended leaves of absence.

Continue Reading Employers Left in the Dark After U.S. Supreme Court Declines to Issue Ruling on Long Term Leave as a Reasonable Accommodation Under the ADA

On January 25, the Seventh Circuit Court of Appeals issued it much-anticipated decision in EEOC v. Flambeau, Inc. This case involved the regulation of employer-sponsored wellness plans and programs. Since 2006, the rules surrounding wellness programs had been modestly well settled—for tax and benefits purposes. But little was known about the impact of the Americans with Disabilities Act (ADA). At issue in Flambeau is which of two ADA provisions—the voluntary employee health program exception or the safe harbor for “bona fide benefit plans”—also apply to wellness plans. The lower court, the U.S. District Court for the Western District of Wisconsin, ruled against the EEOC, applying the more flexible bona fide benefit plan exception. The EEOC appealed.

The Seventh Circuit’s decision on appeal is a model of judicial restraint. (This is the doctrine that holds that cases ought to be decided on the narrowest grounds possible.) Flambeau “won” on appeal only in the narrow sense that it avoided liability. The Court did not reach the statutory or regulatory issues before it. Rather, it disposed of the case on procedural grounds.

Continue Reading EEOC v. Flambeau, Judicial Restraint, and the (Uncertain) Future of Employer-Sponsored Wellness Programs

With the 9th Circuit’s late summer anti-class action waiver decision, the circuit split widened over the issue of whether employers can require employees, through an arbitration agreement, to waive their rights to bring class or collective actions against their employer.  This issue will almost certainly reach the Supreme Court given the deepening divide and the Court’s previous apparent interest in addressing issues surrounding class action waivers and arbitration agreements.

Continue Reading Where Are We With the Enforceability of Class Action Waivers in Arbitration Agreements?

The Seventh Circuit recently became the first federal appellate court to say that employers can’t prevent class/collective actions through waivers in mandatory arbitration agreements, holding that such waivers interfere with employees’ rights to engage in concerted activity in violation of the National Labor Relations Act.  The court’s holding in Lewis v. Epic Systems Corp., No. 15-2997 (7th Cir. May 26, 2016), creates a circuit split on this issue and calls into question the effectiveness of such waivers for employers with employees working in states covered by the Seventh Circuit (Wisconsin, Illinois and Indiana).

Continue Reading Score One for the NLRB: Seventh Circuit Becomes First Federal Appeals Court to Hold that Class/Collective Action Waivers in Arbitration Agreements Violate the NLRA

The benefits world was set abuzz late last year with Equal Employment Opportunity Commission v. Flambeau, Inc., in which the Federal District Court for the Western District of Wisconsin upheld the validity of Wisconsin-based plastics manufacturer Flambeau, Inc.’s wellness program in the face of a challenge by the Equal Employment Opportunity Commission (EEOC). We provided the details of the case in an earlier post. The EEOC has since appealed the lower court’s decision to the Seventh Circuit. An earlier appellate case, Seff v. Broward County, 691 F.3d 1221 (11th Cir. 2012) reached a conclusion similar to Flambeau.

If the Seventh Circuit affirms the Flambeau decision on appeal, then the Americans with Disabilities Act, as amended by the ADA Amendments Act of 2008 (ADA) will have virtually no impact on wellness programs tied to employer-sponsored group plans in six states: Alabama, Florida, Georgia, Illinois, Indiana and Wisconsin—i.e., the states comprising the Seventh and Eleventh federal appellate circuits. An appeal to the Supreme Court would almost certainly follow, though it’s not clear whether the Court would accept the case in the absence of a split in the Circuits. But if the Seventh Circuit sides with the EEOC, then a confrontation before the Supreme Court is almost assured.

This post explains what is at stake in the EEOC’s appeal of the Flambeau decision and offers some predictions about the likely outcome.

Continue Reading EEOC v. Flambeau, Voluntary Plans, the Insurance Safe Harbor, and the Future of Wellness Programs

A Seventh Circuit panel recently overruled its own precedent to hold that a defendant’s offer of full compensation in an offer of judgment under Federal Rule of Civil Procedure 68 does not moot the litigation.  While the decision benefits individuals pursuing wage and hour collective and class actions, its import may be short-lived as the Supreme Court is set to take up this issue in its next term and could reach the opposite conclusion.

Continue Reading 7th Circuit Latest Court to Weigh in on Rule 68 Offers of Judgment; Holds That They Don’t Moot a Case; But With Supreme Court Decision Looming Next Term, Precedent May Prove Short-Lived