Articles Posted in Collective Action

Lev Craig

Last week, on September 13, 2017, the U.S. District Court for the Eastern District of Pennsylvania denied Uber’s motion for partial summary judgment in Razak v. Uber Technologies, Inc. This decision allows a putative class of Philadelphia-based Uber drivers to move forward with claims against Uber for failing to compensate them for “on-call” time they spent logged into the Uber app, but not driving customers.

The Fair Labor Standards Act (FLSA) requires employers to compensate employees for all hours worked, including on-call time: hours worked where “the employee is required to remain on the employer’s premises, or […] although not required to remain on the employer’s premises, finds his time on call away from the employer’s premises is so restricted that it interferes with personal pursuits.” The recent rise of gig economy work— individual projects and tasks picked up at a worker’s discretion, often using apps like Uber and TaskRabbit—has presented a challenge to the existing model of on-call time, as courts are asked to consider what constitutes compensable on-call time for workers who may never report to a central place of employment or who are, at least to some degree, able to work whenever they choose.

Lev Craig

On August 3, 2017, the U.S. Circuit Court of Appeals for the Seventh Circuit ruled against the plaintiffs in Allen v. City of Chicago, a Fair Labor Standards Act (FLSA) collective action brought by Chicago area police officers. The court found that the officers were not entitled to overtime pay for off-duty work they had performed on their mobile devices because the city had not known that plaintiffs were not being compensated for their work and because plaintiffs had not been prevented from requesting overtime pay.

The FLSA requires employers to compensate employees for all hours worked, and to compensate most employees at the overtime premium rate for all hours worked in excess of 40 in a work week. This requirement is strict: So long as an employer is aware that an employee has performed work, the employer must fully compensate the employee for all hours worked, “even if [the employer] did not ask for the work, even if they did not want the work done, and even if they had a rule against doing the work.” If an employer does not want employees to work overtime hours, it is the employer’s obligation to “exercise its control and see that the work is not performed,” not the employee’s obligation to avoid working overtime hours. However, the FLSA’s mandate does not go so far as to cover work that the employer “did not know about, and had no reason to know about”; employees also have a duty to accurately report their time to their employer, and employees who fail to do so or who actively prevent their employer from learning of their hours worked are not covered by this protection.

Lev Craig

Last week, on June 26, 2017, the U.S. Supreme Court denied plaintiff Richard Villarreal’s petition for a writ of certiorari, declining to review the U.S. Circuit Court of Appeals for the Eleventh Circuit’s decision in Villarreal v. R.J. Reynolds Tobacco Co., a case arising under the Age Discrimination in Employment Act of 1967 (ADEA). In Villarreal, the court was asked to consider whether the ADEA permits job applicants who have been disadvantaged in the hiring process because of their age to bring disparate impact claims. The Eleventh Circuit ruled against Villarreal, holding that the ADEA only creates a disparate impact cause of action for existing employees, not job applicants. The Supreme Court’s refusal to grant certiorari means that the Eleventh Circuit’s decision will stand and, for now, the issue will remain open to interpretation by lower courts and the other Circuits.

In 2007, Richard Villarreal applied for a position as a territory manager at R.J. Reynolds, a large tobacco manufacturer and distributor. R.J. Reynolds rejected Villarreal, who was 49 years old at the time, based on a set of standardized internal guidelines. These guidelines stated that the ideal candidate for the territory manager position would be “2–3 years out of college” and instructed reviewers to “stay away from” applicants whose résumés stated that they had been “in sales for 8–10 years.”

Lev Craig

On April 12, 2017, the Second Circuit affirmed the district court’s decision in Saleem v. Corporate Transportation Group, Ltd., finding that a group of black-car drivers had been properly classified as independent contractors under the Fair Labor Standards Act (FLSA) and New York Labor Law (NYLL). The court held that the drivers’ significant degree of independence prevented them from establishing that they were employees within the meaning of the FLSA or NYLL.

Under New York law, black cars are defined as a “type of for‐hire vehicle (along with livery vehicles and limousines) that provide ground transportation by prearrangement with customers.” The Saleem plaintiffs are a group of black-car drivers serving clients throughout the tri-state area; the defendants were operators and administrators of a black-car dispatch, which sells black-car franchises to individual drivers and refers the dispatcher’s clients to the driver. Each driver signed an agreement with a franchisor, stating that the driver was not an “employee or agent” but instead a “subscriber to [the franchisor’s] services offered,” that the driver would “at all times be free from [the franchisor’s] control or direction,” and that the franchisor would not “control, supervise or direct” the driver’s work. The agreements did not prohibit drivers from transporting customers for other companies, including competitors, but did require that drivers comply with policies set out by each franchisor, such as rules concerning dress code and vehicle cleanliness.

By Owen Laird, Esq.

A recent decision by the Ninth Circuit Court of Appeals has cast into doubt the validity of a range of lawsuits against Uber by its drivers.  The decision held that the mandatory arbitration provision in Uber’s contracts with its drivers is enforceable; as a result, Uber drivers may be foreclosed from bringing vast majority of their claims against Uber in court.

The ongoing legal saga between Uber and their drivers is one of the most significant labor disputes in the United States today.  Uber – the multi-billion-dollar taxi app – and its Silicon Valley startup brethren seek profitability by transforming the way people interact, work, and live their lives.  In Uber’s case, a central aspect of that transformation is redesigning the traditional employee/employer relationship: Uber classifies its drivers as independent contractors, not employees.  This decision benefits Uber and disadvantages its drivers because independent contractors do not receive the same basic legal privileges ­– such as anti-discrimination protections, minimum wage, and overtime – that employees do.

Yarelyn Mena and Edgar M. Rivera, Esq.

Several state investigations have found that the retail practice of “on-call scheduling” – where workers must call their employers to check if they are needed for scheduled shifts and are not paid if their shifts are cancelled – is so prevalent that several state attorney generals are demanding that major retailers respond to questions regarding their scheduling practices and answer requests for documentation.

On April 12, 2016, the attorney general of eight states and Washington D.C. sent letters to fifteen retailers, including Aeropostale, Payless and Coach, asking whether they use on-call scheduling and, if so, how they implement it. The retailers must provide answers by April 25, 2016. The officials are concerned about workers’ well-being because on-call scheduling leads to erratic schedules, making it difficult to plan child care, work a second job, or take classes.  Essentially, workers must make themselves available but are not guaranteed work while employers receive the benefits of always having workers available if the store becomes busy without having to pay workers.  On-call scheduling can also lead to unexpectedly low pay because employers often send employees home on slow days without proper compensation.  Additionally, low income workers often do not have the financial flexibility to allow for this type of uncertainty in their pay. In sum, on-call scheduling lets employers quickly staff their stores on busy days, and send employees home early on slow days, thus, saving money on payroll at the expense of their employee convenience.

Yarelyn Mena and Edgar M. Rivera, Esq.

In a 2014 case, Martin v. The United States, the United States Court of Federal Claims held that an employer’s late payment of wages violates the Fair Labor Standards Act (“FLSA”) and may trigger liquidated ”double payment” damages. The case arose out of the 2013 government shutdown (October 1, 2013 to October 16, 2013) which resulted in the untimely payment of wages to government workers.

Towards the end of 2013, Congress failed to issue funds for government workers, forcing the federal government into a partial shutdown. The shutdown took place in the first two weeks of October 2013, in the middle of a pay period, which resulted in plaintiffs unpaid government employees being paid only for work from September 22 to September 30, and not the first five days in October. Two weeks after their scheduled payday the plaintiffs received pay for those five days. They argued that the federal government’s failure to pay them for hours worked resulted in (i) underpayment that constituted a minimum wage violation, (ii) failure to pay non-exempt employees for overtime hours worked, and (iii) failure to pay even exempt employees for overtime hours worked.

Lucie Riviere and Owen H. Laird, Esq.

On February 16, 2016, U.S. District Judge William T. Lawrence of the Southern District of Indiana held that the Fair Labor Standards Act (“FLSA”), the federal labor law that prohibits employers from paying their employees less than minimum wage, did not cover college athletes.

In Berger v. National Collegiate Athletic Association, the three plaintiffs, members of the University of Pennsylvania (“Penn”) women’s track and field team, alleged that they were entitled to be paid at least the minimum wage for the work they performed as student athletes (e.g. practicing, playing in games, appearing at events, etc.). They argued that, by virtue of being on the team, they were Penn’s employees for purposes of the FLSA because they performed work for their universities for no academic credit, like students participants in work-study program. The plaintiffs sought an order from the Court allowing a collective action with a class of “[a]ll current and former National Collegiate Athletic Association (“NCAA”) Division I student athletes on NCAA women’s and men’s sports rosters for the [Defendant schools] . . . from academic year 2012-13 to the present” against Penn as well as the NCAA and the 123 NCAA Division I Member Schools.

Lucie Riviere

On July 8, 2015, in a post titled “Second Circuit Articulates New Test to Determine Whether Employers Need to Pay Their Interns,” The Harman Firm, LLP reported on the Second Circuit’s July 2, 2015 decision in Glatt v. Fox Searchlight Pictures, Inc., which established a new test to determine whether employers must pay their interns. On January 25, 2016, the Second Circuit amended that decision upon Plaintiffs’ petition for rehearing en banc. This new decision includes few but significant changes.

From September 2009 to August 2010, Plaintiffs Eric Glatt, Alexander Footman, and Eden Antalik worked for Defendants Fox Searchlight and Fox Entertainment Group, Inc. as unpaid interns. They bring claims against Defendants for failing to comply with the Fair Labor Standards Act and New York Labor Law by refusing to pay them the minimum wage and overtime pay. On February 15, 2013, Plaintiffs moved for summary judgment and class certification, among other things. On June 11, 2013, the district court rejected the “primary beneficiary” test, which focuses on what the intern receives in exchange for his work as compared with the benefit received by the employer, and instead followed the Department of Labor’s approach to determine whether unpaid interns in the for-profit private sector need to be compensated, granting Plaintiffs’ motion in part. Defendants appealed on the basis that the district court should have applied the “primary beneficiary” test. The Second Circuit agreed and vacated the district court’s decision, holding that the analysis of whether an intern is an employee and, therefore, covered by the FSLA, turns on “whether the intern or the employer is the primary beneficiary of the relationship.” To aid the analysis, the Second Circuit provided a list of “non-exhaustive factors.”

Jennifer Melendez

On November 15, 2015, the National Union of Healthcare Workers (NUHW) and the health insurance company Kaiser Permanete (Kaiser) arrived at a tentative agreement ending a 5 year dispute regarding employee compensation and patient treatment.

In November of 2011, NUHW’S health care clinicians made a complaint on behalf of their patients, which prompted a 15-month investigation by the state. The investigation resulted in the California Department of Managed Health Care (DMHC) finding that Kaiser’s patients endured illegally long waiting periods for their treatments and were refused access to care, in violation of California’s Mental Health Parity Act and that Kaiser clinicians were instructed to falsify appointment times to hide those long waits. The DMHC fined Kaiser $4 million for these infractions. The DMHC states: