Supremes Uphold Class Action Waivers

On May 21, 2018, the Supreme Court issued its long-awaited decision in Epic Systems v. Lewis, ___U.S.___(May 21, 2018). The issue in the case was simple. The Plaintiff signed an arbitration agreement which stated that he waived the right to bring a class action case. He sought to bring a class and collective action under the FLSA for unpaid overtime. In a 5-4 decision, the Court upheld the validity of class action waivers.

Plaintiff's major claim was the the class action waiver interfered with his right to engage in concerted activity under the NLRA. The Supremes rejected that argument and stated:
A close look at the employees’ best evidence of a potential conflict turns out to reveal no conflict at all. The employees direct our attention to the term “other concerted activities for the purpose of . . . other mutual aid orprotection.” This catchall term, they say, can be read toinclude class and collective legal actions. But the term appears at the end of a detailed list of activities speaking of “self-organization,” “form[ing], join[ing], or assist[ing] labor organizations,” and “bargain[ing] collectively.” 29
U. S. C. §157. And where, as here, a more general term follows more specific terms in a list, the general term is usually understood to “‘embrace only objects similar in nature to those objects enumerated by the preceding specific words.’” Circuit City Stores, Inc. v. Adams, 532 U. S. 105, 115 (2001) (discussing ejusdem generis canon); National Assn. of Mfrs. v. Department of Defense, 583 U. S. ___, ___ (2018) (slip op., at 10). All of which suggests that the term “other concerted activities” should, like the terms that precede it, serve to protect things employees “just do” for themselves in the course of exercising their right to free association in the workplace, rather than “the highlyregulated, courtroom-bound ‘activities’ of class and jointlitigation.” Alternative Entertainment, 858 F. 3d, at 414– 415 (Sutton, J., concurring in part and dissenting in part)(emphasis deleted). None of the preceding and more specific terms speaks to the procedures judges or arbitratorsmust apply in disputes that leave the workplace and enter the courtroom or arbitral forum, and there is no textually sound reason to suppose the final catchall term shouldbear such a radically different object than all its predecessors.

Query, whether this language will limit the protections non-union employees, have under the NLRA to engage in concerted activity for mutual aid and protection.

Supremes Refuse To Interpret FLSA Exemptions In A Narrow Fashion

On April 3, 2018, the US Supreme Court decided Encino Motorcars v. Navarro  and decided 5-4, that FLSA exempts a service adviser at a car dealership from its overtime protections under the exemption for “any salesman . . . primarily engaged in . . . servicing automobiles.” 29 U.S.C. § 213(b)(10)(A).

But, the Court, in dicta went way beyond deciding this case and stated that the FLSA exemptions should not be narrowly construed. As the Court explained:

Because the FLSA gives no “textual indication” that its exemptions should be construed narrowly, “there is no reason to give [them] anything other than a fair (rather than a ‘narrow’) interpretation.” Scalia, Reading Law, at 363. The narrow construction principle relies on the flawed premise that the FLSA “‘pursues’” its remedial purpose “‘at all costs.’” American Express Co. v. Italian Colors Restaurant, 570 U. S. 228, 234 (2013) (quoting Rodriguez v. United States, 480 U. S. 522, 525-526 (1987) (per curiam)); see also Henson v. Santander Consumer USA Inc., 582 U. S. ___, ___ (2017) (slip op., at 9) (“[I]t is quite mistaken to assume . . . that whatever might appear to further the statute’s primary objective must be the law” (internal quotation marks and alterations omitted)). But the FLSA has over two dozen exemptions in § 213(b) alone, including the one at issue here. Those exemptions are as much a part of the FLSA’s purpose as the overtime-pay requirement. See id., at ___ (slip op., at 9) (“Legislation is, after all, the art of compromise, the limitations expressed in statutory terms often the price of passage”). We thus have no license to give the exemption anything but a fair reading.

This dicta would appear to apply to all of the FLSA exemptions and has the potential to result in a finding that many more employees, such as professionals, administrators, and executives, are exempt, and therefore, not entitled to over-time. 

Query whether courts will follow Justice Thomas' reasoning when deciding over-time cases under state law (as opposed to federal law).

Mitchell Rubinstein

7th Circuit Holds That Cosmetology Students Are Not Employees Under The FLSA

The Seventh Circuit Court recently held that cosmetology students are not employees. In Hollins v. Regency Corp., ___ F.3d ___, No. 15-3607, 2017 WL 3474266 (7th Cir. Aug. 14, 2017), Chief Judge Diane Wood wrote the opinion of a unanimous panel of the Seventh Circuit affirming the grant of summary judgment against former cosmetology students who alleged they were employees of their cosmetology schools when they 1) were practicing skills on paying members of the public and 2) were performing “menial tasks,” such as sanitation, greeting guests and selling products. The Court applied the economic realities test. The lower court ruled against the students.

Overtime Must Be Paid For Work Beyond 40 Hours Per Week

Edelmann v. Keuka College, ____F. Supp. ____(W.D.N.Y. April 10, 2017)(registration required), is a typical FLSA case. The plaintiff, a senior technical support technician claims that was entitled to overtime even though he was paid on the basis of a salary because he was not an exempt worker under the FLSA.

The court refused to dismiss the case and rejected the employer's claim that the plaintiff did not allege a violation of the FLSA, reasoning:

Here, Plaintiff alleges that he typically worked 50 hours per week as a salaried employee. ECF No. 1 at ¶31. Plaintiff alleges that, though he had a fixed schedule, he often performed work outside of his predetermined hours. Id. at ¶¶22-27. Specifically, Plaintiff alleges that he was expected to be "on call" from 7 p.m. to 10 p.m. for weeks at a time, id. ¶22, and that he frequently received calls after 10 p.m. Id. at ¶3. Additionally, Plaintiff alleges that he worked college events — like commencements, open houses, and orientations — outside of his normal working hours. Id. at ¶25. Further, Plaintiff alleges that he was required to work Defendant's yearly board meeting, which required him to be available to provide technical support at all times, including overnight. Id. at ¶26.
Those allegations give rise to a plausible inference that Plaintiff worked more than 40 hours in any given workweek. Like the plaintiffs in Nakahata, Plaintiff has not attached time values to each of the instances of extracurricular work that he alleges. See Nakahata, 723 F.3d at 200-201; ECF No. 1 at ¶¶22-27. But unlike the plaintiffs in Nakahata, who might not have had a standard 40-hour schedule in any given week, Plaintiff was a salaried employee who worked fulltime. Compare Nakahata, 723 F.3d at 199 (noting that the plaintiffs alleged "Plaintiffs and Class members regularly worked hours both under and in excess of forty per week") with ECF No. 1 at ¶30 ("Throughout his tenure with [Defendant], [Plaintiff] worked significantly more than 40 hours each and every week."). Plaintiff's allegations are more plausible than the allegations at issue in Lundy for the same reason. Any work performed in addition to his standard, fulltime schedule necessarily adds up to an amount great than 40 hours. Because Plaintiff has alleged that, in addition to his fulltime schedule, he frequently worked evenings and weekends, his allegations give rise to a plausible inference that he worked more than 40 hours per week. See ECF No. 1 at ¶¶22-27.