Zinsergram a/k/a Legal Update #1
By L. Michael Zinser, The Zinser Law Firm
O'Connor v. Uber Technologies
In a closely-watched case called O’Connor v. Uber Technologies, the United States Court of Appeals for the 9th Circuit decided on September 25, 2018 that an Arbitration Clause that waives class actions and reserves to the Arbitrator the determination of whether a dispute is properly arbitrable will defeat class action certification and require the granting of an order compelling arbitration. The court placed reliance on a U.S. Supreme Court Decision in a case called Epic Systems, which ruled that class action waivers contained in Arbitration Agreements did not violate the National Labor Relations Act and were therefore enforceable.
The Decision reversed the lower court decision which had certified a class of 160,000 drivers. Now, each Uber Driver who has a claim will have to present his/her claim individually in an arbitration case pursuant to the Arbitration Agreements.
Significance: Many California newspapers have entered individual Arbitration Agreements with newspaper distributors, which agreements contain class action waivers.
DOL Planning New Overtime Rule
The U.S. Department of Labor recently finished a series of listening sessions for interested parties at which it gathered opinions about a new overtime rule. It is expected to issue a Notice of Proposed Rule Making ( NPRM) in March 2019. The proposed rule will no doubt raise the salary threshold in order to be considered a salaried exempt executive, administrative or professional employee. That current threshold is $23,660 or $455 a week. That salary threshold has been in place since 2004.
You will remember that the Obama administration attempted to raise the salary threshold to $47,476 a year. That particular rule was struck down and enjoined nationwide by a federal judge in Texas.
Based upon comments by Secretary of Labor Acosta during his confirmation hearings, expect the Department of Labor to propose a new rule with a new salary threshold in the $32,000-$33,000 range. This threshold would be more like adjusting the current threshold for inflation since 2004. It would make far fewer new workers eligible for overtime than would have been the case under the rule proposed during the Obama administration. A salary threshold at this level is not as likely to generate huge opposition.
If the NPRM occurs in March of 2019, then there will be a comment period after that. Then the Department of Labor will take time to consider all of the comments. Prediction: Do not expect to see a new overtime rule in effect before 2020.
Independent Contractor Status
Former NLRB Counsel Richard Griffin (Obama appointee), in a strategy of legal adventurism, took the position that mis-classifying someone as an independent contractor was an independent, stand -alone violation of the National Labor Relations Act. A case brought by General Counsel Griffin pursuing his theory, Velox Express Inc., is currently pending before the NLRB. The NLRB, because of the importance of the issue, invited interested parties to file amicus briefs. Significantly, the President Trump’s newly appointed General Counsel, Peter Robb, parted company with former General Counsel Griffin. General Counsel Peter Robb argued that misclassifying an employee as an independent contractor, standing alone, does not violate the Act. Velox Express, Inc. is a case to watch. Its potential impact on newspaper distributors is huge.
Unions hate independent contractor status. The National Labor Relations Act was specifically amended by the 1947 Taft-Hartley Amendments to expressly exclude independent contractors. U.S. Supreme Court Decisions have made clear that the NLRB is to use the usual common law test to determine independent contractor status. No Court Decision has ever held it was an independent violation of the National Labor Relations Act if, after litigation, individuals were found to be employees instead of independent contractors. That issue has always been decided on a case-by-case basis. This writer predicts that the current NLRB will reject the assertion that classifying someone as an independent contractor is independently, stand-alone a violation of the National Labor Relations Act.
NLRB Quickie Election Rule Update
In December 2017, the NLRB invited comments regarding whether the Quickie Election Rule promulgated by the Obama Board, effective April 14, 2015, should be retained, modified or rescinded. The comment period was extended to April 2018. The Board has yet to release its Decision or findings.
It has been reported that the NLRB has placed this issue on its agenda as a “long-term” action item. In a recent speech to the ABA’s Labor and Employment Conference in San Francisco, NLRB Chairman, John Ring indicated that the NLRB will engage in rule making to change the Rule but will do so by issue by issue rather than taking on the entire Rule at once. Chairman Ring said the first of a series of proposed rules will be issued this winter.
In the last 12 months, many newspaper newsrooms have been unionized. A factor in union success has been the Quickie Election Rule which, on average, gives an employer only 23 days to react to the filing of an election petition. On average, an election is held within 23 days of the date of the filing of the petition. Prior to the Quickie Election Rule, employers had, on average, 42 days. As you can see, an employer’s chance to plan a counter strategy has been cut in half. Hopefully the new NLRB will change that.