Hunton Employment & Labor Perspectives

California First Appellate District’s recent decision in Subcontracting Concepts, LLC v. DeMelo, A152205 (April 10, 2019) applies well-established unconscionability principles to an arbitration agreement signed by an employee of an independent contractor.

The employee, DeMelo, was hired directly by Express Messenger Systems, Inc. (d/b/a OnTrac), which contracted with Subcontracting Concepts, LLC (SC).  At the start of his eCamployment, DeMelo was required to sign SC’s “Owner/Operator Agreement,” a five-page, 27-paragraph agreement with an arbitration clause in paragraph 26.  Two and one-half years later, DeMelo filed a wage claim with the California Labor Commissioner. The two corporate entities and several individually-named supervisors petitioned to compel arbitration and stay the Labor Commissioner proceeding.  The San Francisco Superior Court denied the petition, finding the arbitration agreement to be unconscionable. The First Appellate District agreed, and certified this case for publication.

On April 10, 2019, the California Court of Appeals, Second District, in Diaz v. Sohnen Enterprises, 2019 S.O.S. 1722, ruled that an employee impliedly consents to an arbitration agreement by simply continuing to work, despite never signing the arbitration agreement and even outright rejecting it.

Prior to distributing arbitration agreements to its employees, Sohnen notified them that it was adopting a new dispute resolution policy requiring arbitration of all claims and specified that continued employment would constitute an implied consent of the agreement’s terms.  One of Sohnen’s employees, Erika Diaz, verbally rejected the arbitration agreement but nevertheless continued working at Sohnen.

New legislation requires that New York employers provide annual, interactive anti-harassment training.  What does this mean for your business?  Hint: that training video you’ve been showing to new employees for years is no longer sufficient.  Failing to provide the training could result in hefty penalties.    

 Partners J.R. England and Ryan Bates discuss “Things You Need to Know in 5 Minutes or Less” here.

On May 13, 2019, in Outokumpo Stainless USA, LLC v. N.L.R.B., No. 17-15498 (11th Cir.), the Court of Appeals for the Eleventh Circuit enforced an NLRB order finding that stainless steel producer Outokumpo’s posting of a side letter along with a NLRB settlement notice “constituted non-compliance with the terms of the Settlement Agreement” and that “default judgment was thus proper under the plain terms to which the Company had previously agreed.”

Originally published by Law360, Robert Quackenboss and Madalyn Doucet discuss the “faith at work” movement and what it means to employers.  

Originally published in The Business Journals, Jayde Brown and Alan Marcius discuss proactive ways for employers to investigate complaints in the #metoo era.  

Massachusetts’ highest court, The Supreme Judicial Court (“SJC”), recently issued its long awaited decision in Sullivan v. Sleepy’s LLC, SJC-12542, in which the SJC responded to certified questions of first impression from the United States District Court for the District of Massachusetts. The case is particularly important for businesses which pay employees through commissions or draws (i.e., advances on commissions), particularly in the retail context where the ruling departs considerably from federal law.

Originally published in The Business Journals, Jayde Brown and Alan Marcius discuss proactive steps small businesses can take to avoid common employment-related legal problems.  Read more here. 

To all employers in Washington DC who employ tipped workers, heed this warning: as of July 1, 2019, you must comply with new notice, reporting, and training requirements, as set forth in the Tipped Wage Workers Fairness Amendment Act of 2018 (the “Act”).  The Act, which became effective December 13, 2018, repealed a ballot initiative (Initiative No. 77) that would have changed how tipped workers in DC would have been paid to eventually match the standard minimum wage by 2026.  With the goal of protecting the rights of tipped workers, the Act sets forth the following requirements for all employers of tipped workers in the District:

On May 2, 2019, the Ninth Circuit ruled in Vazquez v. Jan-Pro Franchising International, holding that the new independent contractor test established by the California Supreme Court in its 2018 decision in Dynamex v. Superior Court applies retroactively to franchisors. As a result of this decision, employers and franchisors who have classified workers as independent contractors may see an increase in wage and hour class actions alleging that the workers are or have been misclassified. Additionally, the decision has serious implications for any California companies that operate under a franchise business model.