Wage Law

The Ninth Circuit has reinstated an arbitration decision that had been vacated by the U.S. District Court. In SW Reg. Council of Carpenters v. Drywall Dynamics, Inc. (9th Cir. 14-55250 5/19/16), the arbitrator ruled that an employer was bound by a memorandum of understanding extending the term of a labor agreement. The district court vacated the arbitration award on the grounds that the arbitrator’s interpretation of the parties’ agreement was not plausible and was contrary to public policy. The Ninth Circuit held that the district court’s decision exceeded its narrow authority to determine whether the arbitrator’s award was based on the parties’ contract and whether it violated an explicit, well-defined, and dominant public policy. You can read the entire opinion at this link. [PDF]

Truck driver Oscar Bell and others filed a class action complaint against H.F. Cox, Inc. alleging wage and hour violations.  The trial court summarily adjudicated three counts in favor of Cox, a jury found in favor of Cox on another count and the trial court found that plaintiffs were exempt from federal overtime compensation requirements. The court awarded Cox attorneys fees on certain claims. Plaintiffs appealed.

In Bell v. H.F. Cox, Inc. (2012) 209 Cal.App.4th 62. The Court of Appeal held that (1) summary adjudication was proper as to the count for failure to pay promised vacation benefits to current employees but improper as to the count for failure to pay vacation benefits due upon termination of employment; (2) the denial of plaintiffs’ motion to exclude witnesses from testifying at trial was proper; (3) the finding that plaintiffs were exempt from federal overtime compensation requirements pursuant to the motor carrier exemption was proper; (4) plaintiffs have shown no instructional error; and (5) the attorney fee award to Cox as the prevailing party was improper and must be reversed.

The most interesting part of the holding is that employers may now safely promulgate policies that give current employees vacation pay at a specified rate that is different that their normal rate of pay. Left open to interpretation is whether a non-union worker's unused vacation pay upon termination can be paid at the lower, specified vacation rate rather than the employee's ordinary rate of pay, given Labor Code § 227.3:

"Unless otherwise provided by a collective-bargainingagreement, whenever a contract of employment or employer policyprovides for paid vacations, and an employee is terminated withouthaving taken off his vested vacation time, all vested vacation shallbe paid to him as wages at his final rate in accordance with suchcontract of employment or employer policy respecting eligibility ortime served..."

A petition for rehearing was denied. No petitition for review was filed and the remittitur has been issued.

A prior appeal involving the same parties was published and then depublished in 2008. Our post on that action can be found here.

The full opinion can be found here in PDF or Word format.

Last week, the SCOTUS held that unions representing public employees can collect litigation costs as part of a compulsory fee authorized under state law, even if the litigation does not directly involve the collective bargaining unit. Locke v. Karass (2009) __ U.S. __. The vote was 9-0 with Justice Breyer writing the majority opinion and Justice Alito adding a concurring opinon in which Roberts and Scalia joined. The question presented was:

In Ellis v. Railway Clerks, this Court unanimously “determined that the [Railway Labor Act], as informed by the First Amendment, prohibits the use of dissenters’ [union] fees for extraunit litigation.” Lehnert v. Ferris Faculty Ass’n, 500 U.S. 507, 528 (1991) (opinion of Blackmun, J., citing Ellis, 466 U.S. 435, 453 (1984)). In Lehnert, a four-member plurality therefore held “that the Amendment proscribes such assessments in the public sector.” Id. Moreover, Justice Scalia’s separate opinion, concurring in part in the judgment announced by Justice Blackmun, reasoned that “there is good reason to treat [Ellis and the Court’s other statutory cases] as merely reflecting the constitutional rule.” Id. at 555. May a State, nonetheless, consistent with the First and Fourteenth Amendments, condition continued public employment on the payment of agency fees for purposes of financing a monopoly bargaining agent’s affiliates’ litigation outside of a nonunion employee’s bargaining unit?

The answer was yes, albeit a narrowly tailored yes.

the First Amendment permits a local union to charge nonmembers for national litigation expenses as long as (1) the subject matter of the (extra-local) litigation is of a kind that would be chargeable if the litigation were local, e.g., litigation appropriately related to collective bargaining rather than political activities, and (2) the charge is reciprocal in nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national’s resources used for costs of similar litigation on behalf of the contributing local if and when it takes place.

...

Applying Lehnert’s standard to the national litigation expenses at issue demonstrates that they are both appropriately related to collective bargaining activities and reciprocal, and are therefore chargeable. First, the record establishes that the kind of national litigation activity for which the local charges nonmembers concerns only those aspects of collective bargaining, contract administration, or othermatters that the courts have held chargeable. No one here denies that under Lehnert this kind of activity bears an appropriate relation to collective bargaining. See, e.g., 500 U. S., at 519. Second, although the location of the litigation activity is at the national (or extra unit) level, such activity is chargeable as long as the charges are for services that may ultimately inure to local members’ benefit by virtue of their membership in the national union. Ibid. Respondent local says that the payment of its affiliation fee gives locals in general access to the national’s financial resources—compiled via contributions from various locals—which would not otherwise be available to the local when needed to effectively negotiate, administer, or enforce the local’s collective bargaining agreements. Because no one claims that the national would treat respondent local any differently from other locals in this regard, the existence of reciprocity is not in dispute. Pp. 11–13. 498 F. 3d 49, affirmed.

You can download the Locke v. Karass opinion in PDF directly from the SCOTUS website at this link. The opinion will not affect workers in right-to-work states, as those workers are generally not subject to mandatory union dues or agency fees.

With the election of Barack Obama as the 44th President of the United States and with the Democrats gaining seats in the House and Senate, some changes in employment law, including wage and hour law, could be coming in the next four years. Some changes that are reasonably foreseeable:

• Minimum Wage. Though the federal minimum has been increased in recent years, and moves to $7.25 per hour in 2009, greater increases in the federal minimum wage could follow.
• Sick Leave. The Obama administration is expected to push for new legislation requiring employers to provide at least seven days of annual paid sick leave to employees.
• Family and Medical Leave. The Obama administration is expected to expand the FMLA to cover more workers, including those employed by smaller firms (20-25 employees), and to cover a broader range of causes for leave.
• Equal Pay. Though Senate Republicans filibustered the Lilly Ledbetter Fair Pay Act of 2007, intended to overturn the Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. ___, 127 S.Ct. 2162, 167 L.Ed.2d 982, decision, the Democrats will take up the cause again in 2009. The 5-4 opinion severely curtailed an employee's right to recover Title VII wage claims for violations of the Equal Pay Act. The losing plaintiff, Lilly Ledbetter, spoke at the Democratic National Convention.
• NLRB/NLRA: Union membership is below ten percent. That could change with the passage of the Employee Free Choice Act, the RESPECT Act, and the Public Safety Employer-Employee Cooperation Act. President Obama's appointees to the National Labor Relations Board are likely to be much more protective of unions and employees than the appointees of President Bush, who tended to favor management and employers.
• Executive compensation. Expect more executive compensation limitations, particularly in any future bailout legislation, including clawback provisions and bans prohibiting golden parachutes. Current restrictions are vague, prospective and limited in scope. Stronger regulations with more detailed limitations and a broader scope affecting existing contracts could pass.
• Arbitration. Expect to see a new effort to pass the Arbitration Fairness Act, an amendment to the Federal Arbitration Act in 1925, which would provide new procedures and limitations on pre-dispute mandatory arbitration clauses in consumer and employment contracts.
• ERISA. A key goal of the Obama administration will be the passage of a universal health care plan with guaranteed eligibility, comprehensive benefits, and affordable premiums and co-pays.
• Supreme Court appointments. Barack Obama mentioned Ruth Bader Ginsburg and Stephen Breyer as examples of the kind of justice he would look for to fill vacancies in the SCOTUS. In the next four year, John Paul Stevens, 88, and Ginsburg, 75, are thought to be likely to retire. David Souter, 69, has expressed some interest in leaving Washington and returning to his home state of New Hampshire. Justices Anthony Kennedy and Antonin Scalia are 72 years old.

If you see anything else on the horizon, leave a comment.

Approximately 2,300 maids, bell hops, cooks and dishwashers at three Disneyland hotels have been working without a union contract since February, and the members of Unite Here Local 681 have taken to staging protests outside Disneyland in an effort to draw attention to their cause. According to the union president, Ada Briceno, the Disneyland hotel workers are not receiving health care benefits comparable to other hotel workers in the area, and their wages are $2 to $3 an hour less. At the prostests yesterday, several protesters dressed in costume as Tinkerbell, Aladdin, Mickey Mouse and others were arrested, making for some interesting photos in local newspapers.