Hunton Employment & Labor Perspectives

The California Supreme Court has adopted a new three-part test to determine whether a worker is an independent contractor or an employee under California’s wage orders, which regulate wages, hours, and working conditions.  The highly anticipated ruling could have wide ranging effects for businesses operating in California and beyond, as companies try to navigate the new gig economy.

On April 16, newly confirmed member John Ring was sworn in as the fifth member and Chairman of the National Labor Relations Board, establishing a Republican-controlled Board.   While all has been relatively quiet with regard to rulings from the Board,  we will likely see a rise in activity now that the NLRB (with a  newly-minted majority) is poised to roll back some of the Obama-era rulings.

On April 3, 2018, San Francisco amended its Fair Chance Ordinance, the city and county’s so-called “ban-the-box” legislation that limits how private employers can use an applicant’s criminal history in employment decisions.  The amendments, which take effect on October 1, 2018, expand the scope and penalties of the San Francisco ordinance and add to the growing framework of ban-the-box legislation across California.  The complete text of the amendment can be found here.

On February 5, 2018, the American Bar Association (ABA) adopted Resolution 302, which “urges all employers, and specifically all employers in the legal profession, to adopt and enforce policies and procedures that prohibit, prevent, and promptly redress harassment and retaliation based on sex, gender, gender identity, sexual orientation, and the intersectionality of sex with race and/or ethnicity.”

Resolution 302 was unanimously passed by voice vote of the ABA’s House of Delegates, the 601-member governing body of the country’s largest legal association, after further edits by employment lawyer Mark Schickman to strengthen its language.

In the #MeToo era, Resolution 302 is a reminder to all employers of harassment policy best practices, and should be of particular interest to employers in the legal industry.

On March 26, 2018, the Supreme Court heard oral argument in Resh v. China Agritech, Inc., a case that could have far-reaching implications in the class action context.  Resh addresses the interplay of successive class actions and the statute of limitations, specifically, whether a plaintiff can pursue a class action after the statute of limitations has run.  Although the issue arose in a securities case, the Court’s ruling will affect class actions and time bars in all areas, including employment.

A single paragraph in an otherwise routine opinion could have reverberations in FLSA exemption cases for years to come.

Earlier this week, in a 5-4 decision, the Supreme Court held in Encino Motorcars LLC v. Navarro et al. that auto service advisors are exempt under the FLSA’s overtime pay requirement.  While the case resolved a circuit split for a discrete exemption, the Court’s decision has broad implications for all employers.

Federal contractors have been closely following leadership changes at the Office of Federal Contract Compliance Programs (OFCCP).   Most notably, President Trump appointed Ondray T. Harris as OFCCP Director, and Craig Leen as Senior Advisor to the OFCCP.   Both men have backgrounds in management-side private law practice.  This has contractors hopeful they may bring fresh eyes and a more pragmatic approach to the OFCCP.

The National Labor Relations Board (the “NLRB”) and McDonald’s Corp. have reached a settlement agreement in the long-running employment retaliation case brought against McDonald’s that hinges on whether McDonald's Corp., as a franchisor, has enough control over its franchisees to be considered a "joint employer" of the franchisees’ employees.  The case stems from allegations that McDonald’s unlawfully retaliated against franchisee workers who joined the “Fight for $15” movement.  In bringing this case against McDonald’s, the NLRB has argued that even having only “indirect control” over a worker is enough for a franchisor like McDonald’s to be held liable for the employment practices of its franchisees.   The NLRB’s case against McDonald’s was bolstered by the Board’s 2015 Browning-Ferris decision, which departed from decades of legal precedent in holding that entities who merely possessed—as opposed to directly and immediately exercised—control over workers could be deemed joint employers for purposes of assessing liability under the National Labor Relations Act.

In June, new laws will go into effect that restrict employers’ ability to request and use criminal history information about applicants in three jurisdictions: Kansas City, Missouri; the State of Washington; and the city of Spokane, Washington.

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The practice of “tip-pooling,” which refers to the sharing of tips between “front-of-house” staff (servers, waiters, bartenders) and “back-of-house” staff (chefs and dishwashers), has been in the news recently as the Trump Department of Labor (“DOL”) seeks to roll back a 2011 Obama-era rule limiting the practice under the Fair Labor Standards Act (“FLSA”).