SCOTUS Approves Class Action Waivers in Employment Arbitration Agreements

By:  Kara Maciel and Dan Deacon

The U.S. Supreme Court ruled on Monday that class/collective action waiver clauses in employment agreements that compel employees to settle disputes individually with a third-party arbitrator are enforceable.  In a landmark 5-4 ruling, the Justices in the majority rejected the National Labor Relations Board’s position and held that a class/collective action waiver in an arbitration agreement – which effectively prohibit employees from joining together in a class or collective action lawsuit to settle disputes – do not violate the Federal Arbitration Act (“FAA”) or the National Labor Relations Act (“NLRA”).

Background

Arbitration agreements – requiring employees to submit claims to an arbitrator instead of filing in court – are relatively common in the workplace.  Many employers favor arbitration because it tends to lower the cost of litigation and streamlines a resolution.

The legal issue that percolated through the federal Courts of Appeals over the past several years was whether a class/collective action waiver in an arbitration agreement is enforceable.  An arbitration agreement that includes a class/collective action waiver benefits an employer because it prevents employees from banning together to file costly class or collective actions and it forces employees to utilize the arbitration process rather than filing a lawsuit.  Thus, the only form of redress for an employee is a single action that must be worked out before a neutral, third-party arbitrator.

Over the past five years, the Courts of Appeals issued conflicting opinions on whether class action waivers are enforceable.   Notably, between 2013 and 2014, employers were provided favorable opinions from the U.S. Courts of Appeals for the Fifth, Second, and Eleventh Circuit which concluded that the NLRA does not invalidate class action waivers in arbitration agreements.  In contrast, in 2016, the U.S. Courts of Appeals for the Ninth and Seventh Circuit adopted the NLRB’s position that class and collective action waivers violate Section 7 of the NLRA.

The Supreme Court’s Decision

The Supreme Court’s ruling brings finality to an issue that sparked years of debate and caused significant uncertainty for employers.  Oral arguments took place in October 2017 with the justices appearing split along ideological lines – except for Justices Clarence Thomas and Neil Gorsuch who did not speak at all during the session.  Interestingly, however, it was Justice Gorsuch who wrote the opinion – which was his first major opinion since joining the Court last spring.

As alluded to in our prior blog post, President Trump’s ability to fill Justice Scalia’s vacancy was ultimately a deciding factor in what appears to have been a partisan showdown.  Speaking for the conservative wing on the bench, Justice Gorsuch explained that the law is clear that Congress in enacting the FAA instructed federal courts to enforce arbitration as written, including those terms calling for individualized proceedings, and that the “decision does nothing to override” what Congress has done.  In a lengthy dissent, Justice Ginsburg criticized the majority for overturning 80 years of NLRB precedent.  Justice Ginsburg commented that the majority’s decision is “egregiously wrong” and expressed concerns that many employees with small claims, such as minimum wage and overtime violations, will be disinclined to pursue potential claims individually.

The expected fall-out and the future of this ruling now rests with Congress.  Congress certainly has the ability to revise the FAA and the NLRA through legislation.  Given the deep split amongst party lines, however, it is unlikely that Congress will act any time soon.

Take Aways for Employers 

In light of the Court’s decision, employers should immediately review their practices and policies governing employment agreements with arbitration clauses.  For those employers who do not require arbitration of disputes, now may be the time to reconsider whether to implement such an agreement with current employees.  For those employers who have arbitration agreements in place already, now is the time to ensure the agreement contains an enforceable class/collective action waiver, especially for wage and hour disputes.  Employers may want to evaluate whether to restrict class/collection actions for other types of disputes, such as discrimination or harassment cases.  Importantly, any arbitration agreement must be drafted with the company culture in mind.

In short, employers now have the ability to utilize a new forum to resolve legal disputes on an individual basis.  In some circumstances, especially for class/collection claims, an arbitration may be less expensive than lawsuits, take less time, and do not typically result in years of appeals.  Ultimately, the Supreme Court’s decision is welcome news for employers.  Employers can proactively mitigate litigation risk through carefully drafted employment agreements and more effectively manage legal disputes.

Conn Maciel Carey Welcomes Former CSB Attorney-Investigator to the Firm

beeta lashkariWashington, D.C.-based Labor & Employment and OSHA / Workplace Safety boutique law firm Conn Maciel Carey LLP is pleased to announce that Beeta B. Lashkari has joined the firm as an attorney in its Washington, D.C. office.

Ms. Lashkari, a former attorney-investigator at the U.S. Chemical Safety and Hazard Investigation Board (CSB), has extensive experience handling government investigations and is equipped to defend clients in an array of matters before federal, state, and local government agencies, including OSHA 11(c) and whistleblower retaliation claims and EEOC investigations and enforcement actions.

Ms. Lashkari will assist the Labor and Employment practice group in advising and representing clients in a wide-range of inspections, investigations, and enforcement actions, including those from the EEOC, the Department of Labor’s Wage and Hour Division, the U.S. Occupational Safety and Health Administration (OSHA), the U.S. Environmental Protection Agency, the CSB, and state and local employment agencies.  In addition to her work with the Labor and Employment practice group, Ms. Lashkari will assist the OSHA Workplace Safety practice group in advising and representing clients in a wide-range of inspections, investigations, and enforcement actions before federal OSHA and state OSH agencies.

“We are thrilled to have Beeta join our growing niche practice and look forward to utilizing her government investigation experience to the benefit our employer clients,” said Kara M. Maciel, Chair, Labor & Employment Practice Group.

 

Kara Maciel to Speak at HR in Hospitality Conference on Marijuana Laws

marijuana pictureOn March 6, 2018, Kara Maciel, Chair of Conn Maciel Carey’s Labor & Employment Practice Group will present at the HR in Hospitality Conference on the recent trend of medical and recreational marijuana laws.

As we have written about in the past, to date, 26 states and the District of Columbia have legalized medical marijuana, and eight states (plus D.C.) permit its recreational use.  As marijuana laws become more liberal and usage becomes more pervasive, employers must address the emergent issue of marijuana in the workplace and the legal implications of employee use. For example, must employers make accommodations for employees with valid marijuana prescriptions, allowing them to use the drug on the job?  At this session, Ms. Maciel will discuss solutions to these and other accommodation issues, with a look at recent court opinions.

The HR in Hospitality conference is a unique event where hundreds of human resources and labor relations professionals from hotels, resorts, restaurants, casinos, cruise lines come together to learn legal and practical guidance on issues specifically tailored to the hospitality industry!  To learn more about the conference and to register, click here.

 

 

Conn Maciel Carey Opens Chicago Office with Prominent OSHA and Labor Lawyers Aaron Gelb and Mark Trapp

Washington, D.C.-based OSHA and Labor & Employment law firm Conn Maciel Carey LLP is pleased to announce the launch of a Midwest Office in Chicago, IL and the addition of two prominent Chicago attorneys – Aaron R. Gelb and Mark M. Trapp.

“We are thrilled not only to expand the Firm’s national footprint to the Midwest, but especially to be doing so with such great lawyers as Aaron and Mark,” said Bryan Carey, the firm’s managing partner.  “This move will enable us to better serve our existing national platform of clients, and will strengthen the firm’s specialty focus on Labor & Employment and Workplace Safety Law.  We look forward to bringing Aaron and Mark on board, as they will add depth to all areas of the firm’s practice, including OSHA, litigation and labor counseling on behalf of our management clients.”

Mr. Gelb, former Labor & Employment Shareholder and head of the OSHA Practice at Vedder Price PC, in its Chicago office, represents employers in all aspects of the employer-employee relationship.  Aaron GelbAaron’s practice has a particular emphasis on advising and representing clients in relation to inspections, investigations, and enforcement actions involving federal OSHA and state OSH programs, and managing the full range of litigation against OSHA.

“Aaron and I share the same vision of how we want to practice law and do business, thus entrusting him with the keys to our new Chicago office, and combining our expertise, talent, and resources together made so much sense,” said Eric J. Conn, Chair of the firm’s national OSHA practice“We look forward to partnering with Aaron to build a solid brand for our Midwest practice among our client base and doing what we know best, providing top-notch service and excellent value to clients.”

Aaron also has extensive experience litigating equal employment opportunity matters in federal and state courts having tried a number of cases to verdict and defending employers before the EEOC as well as fair employment agencies across the country.  In the past 5 years alone, Aaron has successfully handled more than 250 discrimination charges.

Mr. Gelb said “I am incredibly excited to join what I believe to be the country’s leading OSHA practice as the experience and expertise of the Conn Maciel team will enable me to enhance the workplace safety legal support I currently provide to my clients in the Midwest and beyond.  I’ve known Eric for years and have great respect for what he and his colleagues have accomplished in the OSH field.  At the same time, Kara’s employment defense group fits perfectly with my practice as we share a common client-focused philosophy and deep experience in many of the same industries.  While leaving Vedder Price after nearly 20 years was not an easy decision, I simply could not pass up the opportunity to partner with two dynamic attorneys that so perfectly complement the dual aspects of my practice.”

Mr. Trapp joins the firm with seventeen years of experience, during which he has represented employers in all types of labor disputes, from union campaigns and collective bargaining to grievances and arbitrations. Mark M. Trapp (3)Mr. Trapp has defended employers before administrative agencies and in litigation brought under the ADA, ADEA, Title VII and other federal anti-discrimination laws.

Mr. Trapp said “I am thrilled to again have the opportunity to work with the top-notch legal professionals at Conn Maciel Carey.” According to Mr. Trapp, the expertise of a boutique firm focused on OSHA and other labor and employment matters “complements my experience handling labor and employment issues. I look forward to helping strengthen the team’s ability to provide exceptional knowledge and insights to labor and employment clients, and expanding the firm’s presence in the Midwest.”

Mr. Trapp is perhaps best known as a leading authority on multi-employer pension withdrawal liability.  His articles on withdrawal liability and other labor and employment issues have been published in respected legal publications.

“I have worked with Mark for over a decade at various law firms, so I am excited that he has joined our boutique practice that focuses on positive client solutions and effective client service.  His unique knowledge of traditional labor issues and multi-employer pension disputes is unparalleled and he has proven to be a creative and out-of-the-box adviser when counseling clients,” Kara M. Maciel, Chair of the Labor & Employment Practice reported.

In Flurry of Activity, National Labor Relations Board Restores Pre-Obama Precedent

By:  Mark M. Trapp

Capitol Building

One of the most visible manifestations of the maxim that elections have consequences is illustrated by the regular oscillations in labor policy at the National Labor Relations Board (“Board”) that follow elections in which an opposing party takes control of the White House. After securing the first Republican-majority Board in a decade at the end of September, the Trump administration last week saw that majority quickly act to restore several pre-Obama precedents, setting a much more employer-friendly tone at the NLRB.

In four different cases issued on December 14 and 15, a 3-2 Republican majority reversed decisions issued by the Obama-era Board, each of which upset long-established policies that had survived prior Republican and Democrat administrations. The flurry of activity came on the last two working days of NLRB Chairman Philip A. Miscimarra’s term (which expired on Saturday), for the moment leaving the Board with a 2-2 deadlock between Republican and Democrat appointees. President Trump’s next nominee will again establish a 3-2 Republican majority, so these cases are presumably a preview of things to come.

On Friday, in PCC Structurals, Inc., 365 NLRB No. 160 (December 15, 2017), the majority reinstated the traditional community of interest standard that had prevailed for many decades before the Obama-era Board changed it in 2011. The 2011 decision in Specialty Healthcare gave much more leeway to unions to select the appropriate bargaining unit when attempting to organize an employer’s employees, as the employer challenging that selection had to prove that the excluded workers shared an overwhelming community of interest with the unit selected by the union.

Overruling the Specialty Healthcare decision, the majority returned to the prior rule, under which an employer bore no such burden. Instead, the Board will determine in each case whether the employees in a petitioned-for group share a community of interest sufficiently distinct from the interests of employees excluded from the petitioned-for group to warrant a finding that the proposed group constitutes a separate appropriate unit. While employers will certainly welcome this decision, as it will likely curtail the proliferation of so-called “micro units,” the decision merely restores a standard that prevailed for most of the Board’s history.

The same is true of the other decision issued on Friday, Raytheon Network Centric Systems, 365 NLRB No. 161 (December 15, 2017). In that case, the Board majority restored 50-year old precedent upset just last year by a decision from the Obama-era Board. In Raytheon Network, consistent with other Board cases dating back to 1964, the majority held that unilateral actions of an employer do not constitute an unlawful change in terms and conditions of employment if they are similar in kind and degree with an established past practice consisting of comparable actions. Accordingly, an employer has no obligation to bargain over such changes before implementation, even if they involve some degree of employer discretion. This most often arises in employer-provided healthcare benefits, which change year over year.

These two decisions followed a pair of decisions on Thursday of last week. In the first, The Boeing Company, 365 NLRB No. 154 (December 14, 2017), the Republican majority overruled a standard placing limits on employer policies which could be “reasonably construed” to limit workers’ rights protected by the National Labor Relations Act. In its place, the Board set forth a new standard. Now, when evaluating a facially neutral policy, rule or handbook provision that, when reasonably interpreted, might potentially interfere with the exercise of employees’ NLRA rights, the Board will evaluate two things: first, the nature and extent of the potential impact on those rights, and second, the employer’s legitimate justifications for the rule. Balancing these two factors should impact many employer policies, particularly those involving confidentiality, social media and non-disparagement provisions.

The second decision issued Thursday may have received the most attention, as it overturned an Obama-Board decision significantly broadening the standard under which a company can be held responsible as a so-called “joint employer,” an issue that often arises with the use of staffing firms. In Hy-Brand Industrial Contractors, Ltd., 365 NLRB No. 156 (December 14, 2017), the majority overruled a 2015 Obama-era decision, and reinstated the prior standard in place over several decades. Under that restored standard, two or more entities will be deemed joint employers only upon proof that one entity has directly and immediately exercised control over the terms of employment of the other entity’s employees. The Board also clarified that proof of indirect control, contractually-reserved control that has never been exercised, or control that is limited and routine will not be sufficient to establish a joint-employer relationship.

The now overturned 2015 decision generated much controversy among employers, and prompted the Save Local Business Act, which passed the House in November. It is unclear whether this Act will make it through the Senate

Given that Chairman Miscimarra’s term has now ended, leaving the Board with a 2-2 deadlock, these four decisions may be the only fireworks from the Board for a little while. However, because President Trump will soon get another nominee of his choosing, and the recently-confirmed General Counsel for the Board has telegraphed his intention to overturn a wide range of Obama-era precedent, these decisions are likely a sign of further pro-employer decisions to come.

Conn Maciel Carey Welcomes Chicago Partner, Mark Trapp!

Mark M. Trapp (3)

Conn Maciel Carey LLP is pleased to announce that Mark M. Trapp, an attorney with extensive experience defending employers in a broad range of litigation before federal and state courts, the NLRB and other agencies, has joined the firm as a partner in its Labor & Employment Practice Group, in Chicago, Illinois.

 

Mr. Trapp joins the firm with seventeen years of experience, during which he has represented employers in all types of labor disputes, from union campaigns and collective bargaining to grievances and arbitrations. Mr. Trapp has defended employers before administrative agencies and in litigation brought under the ADA, ADEA, Title VII and other federal anti-discrimination laws. 

In addition, Mr. Trapp’s experience with multiemployer pension withdrawal liability has been recognized across the country and his articles on withdrawal liability and other labor and employment issues have been published in respected legal publications.

“I have worked with Mark for over a decade at various law firms, so I am excited that he has joined our boutique practice that focuses on positive client solutions and effective client service.  His unique knowledge of traditional labor issues and multi-employer pension disputes is unparalleled and he has proven to be a creative and out-of-the-box adviser when counseling clients,” Kara M. Maciel, Chair of the Labor & Employment Practice reported.  

Mr. Trapp said “I am thrilled to again have the opportunity to work with the top-notch legal professionals at Conn Maciel Carey.” According to Mr. Trapp, the expertise of a boutique firm focused on OSHA and other labor and employment matters “complements my experience handling labor and employment issues and provides a solid platform for my withdrawal liability practice. I look forward to helping strengthen the team’s ability to provide exceptional knowledge and insights to labor and employment clients, and expanding the firm’s presence in the Midwest.” 

Welcome to the firm, Mark!

 

 

 

 

 

 

 

#MeToo and Workplace Harassment: A Letter to my Daughter

Dearest Daughter,

In October 2017, more than four dozen women stood up against workplace harassment by a man of power in the entertainment industry.  Then, the #MeToo Movement was born where people of all races, ages, backgrounds, and geographic regions, working in different industries, stood up and voiced that they too have been sexually harassed and/or sexually assaulted.  Unfortunately, these are not the first national headlines related to workplace harassment in the past several months and major companies have found themselves on the front page for not taking stronger steps to prevent and address complaints of harassment.

That this behavior is still occurring in the workplace in 2017 and has not prior garnered a national outcry is astonishing.  Just last year, the EEOC received a record level of 91,503 charges of discrimination filed with the agency.  My hope for you – my three year old daughter – is that you never will be someone who needs to say #MeToo.  However, if you do, and it happens in the workplace, let me give you some advice: Continue reading