The Supreme Court has further closed the window for employees to pursue class-wide claims against their employers in arbitration. In 2010 the Supreme Court ruled a court may not compel arbitration on a class-wide basis when the arbitration agreement is “silent” on the issue. Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010). Nine years later, presented with an arbitration agreement that, instead of silent, was “ambiguous” regarding the availability of class arbitration, the high court has again demonstrated its preference for individual arbitration. In Lamps Plus, Inc. v. Varela, Case No. 17-988 (slip opinion April 24, 2019), the Court held that ambiguity cannot provide the basis for finding consent to participate in class arbitration.
On April 1, 2019, the Department of Labor (“DOL”) published its third proposal in 30 days to revise regulations interpreting the Fair Labor Standards Act (“FLSA”). The April 1 proposed rule would revise and clarify the test for when multiple employers (known as “joint employment”) can be held responsible for wages under the FLSA. The notice and full text of the rule can be found here.
Under the Fair Labor Standards Act (FLSA), employers must generally pay non-exempt employees overtime at a rate of one and one half times the “regular rate” of pay when they work more than forty hours in a workweek. Overtime cannot be properly calculated unless the employer knows what to include in the regular rate. As benefits, bonuses, reimbursements and other elements of compensation have evolved, greater ambiguity has developed in determining what is included in and excluded from the regular rate. On March 29, 2019, the Department of Labor (“DOL”) published a proposal (found here) to clarify and update several regulations that interpret the regular rate of pay requirement.
On March 14, 2019, the U.S. Department of Labor/Wage and Hour Division continued its practice under the Trump Administration of issuing Opinion letters by releasing three new ones – its first Opinion letters of 2019. One of the newly-released Opinion letters relates to the Family and Medical Leave Act (“FMLA”), and two of them involve the Fair Labor Standards Act (“FLSA”).
On March 7, 2019, the Department of Labor (“DOL”) published a long-awaited proposal for revising the regulations relating to the white-collar exemptions from overtime and minimum wage under the Fair Labor Standards Act (“FLSA”). In the Notice of Proposed Rulemaking (“NPRM”), DOL has proposed increasing the threshold salary amount for certain white-collar exemptions from its current $455 per week (or $23,660 per year) to $679 per week, or ($35,308 per year). In 2015, DOL had proposed increasing this threshold to over $47,000 per year ($913 per week). As we reported here, that proposal was blocked by a federal court in Texas in late 2016.
On February 25, 2019, the United States Supreme Court vacated a decision previously decided by the full Ninth Circuit because it was filed after Judge Stephen Reinhardt, who authored the opinion, died. In the case, Rizo v. Yovino, the Ninth Circuit held that employers could not rely upon an employee’s prior salary as a “factor other than sex” in defending against a claim under the Equal Pay Act. We discussed the Ninth Circuit’s decision here. Notably, the Ninth Circuit was the only federal circuit court to decide that employers could never rely upon salary history as a factor other than sex. All eleven judges (including Judge Reinhart) in the Ninth Circuit had agreed that prior law should be overturned, and that the employer’s utilization of salary history alone to set salaries was impermissible.
In New Prime, Inc. v. Oliveira, the United States Supreme Court held that the Federal Arbitration Act (“FAA”) does not apply to contracts with independent contractors in the transportation industry. This decision is very important for transportation companies because, to the extent a contract with any transportation worker contains a mandatory arbitration provision, the arbitration provision is not covered by, and is no longer enforceable under, the FAA.
As of January 1, 2019, the minimum wage increased in over 20 states. Employers with workers in Arizona, Colorado, and Florida should note the following rates that are effective January 1:
Arizona – $11.00
Colorado – $11.10
Florida – $8.46
On November 6, 2018, Missouri voters overwhelmingly voted in favor of amending the Missouri Minimum Wage Law (“MMWL”) to increase the state-wide minimum wage. Therefore, effective January 1, 2019, the Missouri minimum wage rate will increase to $8.60 per hour and will keep increasing each successive year until 2023 when the increases will stop at the target minimum wage rate of $12.00 per hour. Employers must begin the process of budgeting for and implementing these changes ahead of the effective date of the first increase. Employers should also be aware of the non-wage-rate related changes that the law implements. However, the wage increases do not apply to “public employers.”
On November 6, 2018, Missouri’s voters approved a medical marijuana ballot initiative, Amendment 2, while rejecting two competing medical marijuana initiatives on the ballot. This constitutional amendment empowers doctors to authorize patients to buy medical marijuana for the treatment of a variety of conditions. It likewise provides that dispensaries may sell marijuana for medicinal purposes. Amendment 2 does not cover recreational use of marijuana, which is currently allowed in nine states. Missouri is the 31st state to legalize medical marijuana. While Amendment 2 authorizes use of marijuana for medicinal purposes, this is not a “free pass” for employees. Amendment 2 does not allow employees to use marijuana while working, on the employer’s premises, or to work while impaired by marijuana use that occurred prior to the employee’s work shift. With that said, the passage of Amendment 2 will likely create multiple issues of varying complexity for Missouri’s employers for years to come, including: