Hunton Employment & Labor Perspectives

Earlier today, District Judge Kimberly J. Mueller of the United States District Court for the Eastern District of California, granted a temporary restraining order that temporarily prohibits the state of California from enforcing AB 51, a law that would prohibit companies in California from requiring arbitration agreements as a condition of employment.

You can read more about AB51 here and here.

Yesterday, the National Labor Relations Board published a final rule modifying its representation case procedures.

The final rule takes effect April 17, 2020, and scales back—but does not completely undo—the changes to election regulations instituted by the Obama-era’s Board that have caused employers heartburn since 2015. Those changes effectively sped up the election process and cut down on employers’ ability to litigate many important legal issues prior to voting, putting employers at a disadvantage.

A recent California appellate court decision has held that a banquet hall’s “mandatory service charge” could, under the right circumstances, be a “gratuity” that must be paid to employees under California Labor Code § 351. In O’Grady v. Merchant Exchange Productions, the defendant-employer added on a percentage service charge for all banquet contracts for food and beverages. Some, but not all, of the service charge was distributed to managers who did not serve food or beverages at the banquet. Plaintiff brought a putative class action alleging that the defendant’s practice of distributing the service charge proceeds to non-managerial banquet staff violated California Labor Code § 351, which states that gratuities are the sole property of the employees, and the employer (including managers) may not take any portion of the gratuity. The trial court held as a matter of law that a service charge cannot be a tip or gratuity under § 351 and dismissed the case.

On December 6, 2019, a coalition of both national and state business organizations and trade associations filed a Complaint in the U.S. District Court for the Eastern District of California.  The lawsuit seeks both a preliminary and permanent injunction against implementation and enforcement of the recently enacted California law that makes it unlawful for California employers to require employees to sign arbitration agreements, under certain circumstances.

The competing interests of the business community and tipped workers continue to inform public policy decisions about the minimum wage.  We have previously written about increases in the minimum wage on the state, county and municipal level.  Most recently, the cities of Chicago and Denver tackled this issue and joined the many jurisdictions across the country to approve increases to their minimum wage.

Dollar General and the Equal Employment Opportunity Commission (“EEOC”) recently settled a six-year-old Title VII lawsuit.  The EEOC brought its race discrimination claim on behalf of a Charging Party and a class of Black job applicants, alleging that Dollar General’s use of criminal justice history information in the hiring process had a disparate impact on Black applicants.

In an October Advice Memorandum, the Office of the General Counsel for the NLRB (General Counsel) concluded that a union’s continued actions of unlawful insistence are not a refusal to bargain if bargaining negotiations have ceased.

The National Labor Relations Board (the “Board”) under the current administration continues to issue employer friendly rulings in the context of evaluating whether employer work rules violate the National Labor Relations Act (the “Act”).   In LA Specialty Produce Company, 368 NLRB No. 93 (October 10, 2019) (“LA Produce”), the Board’s first ruling applying the standard in The Boeing Co., 365 NLRB No. 154 (2017) for determining the validity of rules, policies and handbook provisions under the Act, the Board’s three-member majority opined that the employer’s rules limiting workers’ comments to reporters and blocking them from sharing certain information about clients are legal despite a union’s claims that the rules encroach on workers’ rights under the Act. The decision offers the first glimpse at how the Board’s Republican leadership will balance workers’ rights and their employers’ interests. The Board’s approach in LA Produce is likely to please businesses and their advocates, as it gives greater weight to the business reality and the business justification for an employer’s work rules, policies, and handbook provisions.

In Amnesty International of the USA, Inc., 368 NLRB No. 112 (2019), a number of paid staff of the nonprofit advocacy group joined a petition circulated by Amnesty’s unpaid interns, seeking compensation of their volunteer work.  In response to the petition, the director of the organization made statements that she was “disappointed” that the signers of the petitioners had not availed themselves of the organization’s open door policy to discuss the matter with her and the executive team before signing the petition, and that she did not think the petition was “appropriate” as it was “litigious” and “adversarial.”