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Supreme Court Upholds Class Action Waivers

On May 21, the United States Supreme Court held that mandatory arbitration agreements containing class action waivers are to be enforced as written.  In Epic Systems Corp. v. Lewis, a trio of consolidated appeals, the Court rejected arguments by employees that section 7 of the National Labor Relations Act (“NLRA”) – which permits employees to engage in “concerted activity” for the purposes of “collective bargaining or other mutual aid or protection” – grants employees a statutory right to assert legal claims (such as claims under federal and state wage and hour laws) on a class or collective basis.

This decision is significant for employers nationwide. Since 2012, the National Labor Relations Board (“NLRB”) has asserted that such waivers violate the NLRA, forcing employers to choose whether to (a) risk violation of the NLRA, (b) implement an opt-out procedure that some courts had concluded might comply with the NLRA, or (c) abandon their class-action waivers and face the threat of class and collective wage and hour suits.

In response to the NLRB’s position, some courts (including the Ninth Circuit Court of Appeals) had refused to enforce mandatory arbitration agreements with class action waivers on the grounds that they were unlawful under the NLRA and, therefore, fell within the savings clause under the Federal Arbitration Act (“FAA”).  That clause permits courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract.”  In reversing the Ninth Circuit and rejecting the NLRB’s

Eckstrom Presents Webinar on Getting Hourly Workers onto Workplace by Facebook

Bringing thousands of frontline, hourly employees onto a Workplace by Facebook network creates a range of questions and challenges for large organizations. How does a company prevent potential wage and hour violations, govern for the use of personal devices at work, and communicate the difference between “required” and “optional” use of the platform?

Irvine Partner Allison Eckstrom will join collaboration expert Carrie Basham Young, CEO of Talk Social to Me, on June 6 to share practical solutions for the most common barriers that prevent hourly workers from participating on Workplace. Click here to register or here to learn more.

Ideal attendees for this webinar include CHROs, CLOs, CCOs, in-house counsel and other decision-makers involved in providing technology, education and programs to hourly employees. Attendees will come away with a stronger understanding of how to be “Better, Together,” without breaking the law.

At Bryan Cave Leighton Paisner, Eckstrom represents clients in complex wage and hour litigation involving claims for employee misclassification, rounding violations, regular rate of pay issues, meal/rest period compliance, expense reimbursement, off-the-clock issues, as well as derivative claims under California’s Unfair Competition Law and Private Attorneys General Act.

Supreme Court Rejects “Narrow” Reading of Overtime Exemption and Concludes that Auto Dealership Service Advisors are Exempt From Overtime

On its second trip to the U.S. Supreme Court, a six-year-long dispute between five auto dealership employees and their employer came to an end when the Supreme Court found that the employees were properly classified as exempt employees under the Fair Labor Standards Act (“FLSA”).  In the case, plaintiffs Hector Navarro and four other employees worked as service advisors—employees who meet and greet customers bringing their cars to dealerships for service or maintenance and suggest and sell such services to customers.

The service advisors in this case filed suit in 2012, claiming back pay under the FLSA for hours worked in excess of 40 in a week on the basis that they were misclassified as exempt.  Specifically, the employees argued that they neither sold nor repaired vehicles and, therefore, were improperly denied overtime in violation of the FLSA.  The employees also alleged violation of California state wage and hour laws.   However, in 2013, the district court agreed with the dealership’s argument that an exemption applied, dismissing the FLSA claims and declining to exercise jurisdiction over the California state law claims.

The Ninth Circuit reversed the District Court relying on regulations issued by the Department of Labor (“DOL”) in 2011.  In 2016, the Supreme Court reversed the Ninth Circuit because it had deferred to the DOL’s rule that service advisors were not overtime exempt, which the Court concluded was procedurally defective.  On remand, in 2017, the Ninth Circuit again found in favor of the service advisors.

On April 2, 2018, the

Employers Can Maintain a Drug Free Workplace in California Despite State Legalization of Recreational Marijuana

California’s passage of the “Control, Regulate, and Tax Adult Use of Marijuana Act,” commonly referred to as Proposition 64, legalized the sale, possession, and use of recreational marijuana under limited circumstances. Marijuana still remains an illegal Schedule I substance under the federal Controlled Substances Act and therefore still subject to prosecution under federal law. Many employers wonder what effect, if any, Proposition 64 has on their ability to maintain a drug free workplace.

Bryan Cave attorneys just released a client alert on this topic. Click here to read the Alert in full.

Bryan Cave LLP has a team of knowledgeable lawyers and other professionals prepared to help employers comply with California law. If you or your organization would like more information on Proposition 64, or any other employment issue, please contact an attorney in the Labor and Employment practice group.

2018 Exemption Limits for the Computer Professional and Physician Exemptions

December 1, 2017

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Effective January 1, 2018, California’s Department of Industrial Relations will begin imposing new rates for the computer software employee exemption and the licensed physician and surgeon exemption to reflect a 2.9% increase in the California Consumer Price Index (CCPI) for Urban Wage Earners and Clerical Workers.

To be exempt from overtime requirements, a computer software employee’s rates have increased as follows:

  • Minimum hourly rate:  From $42.35 to $43.58
  • Minimum monthly salary:  From $7,352.62 to $7,565.85
  • Minimum annual salary:  From $88,231.36 to $90,790.07

The minimum hourly pay for licensed physician and surgeon exemption has increased from $77.15 to $79.39.

Relatedly, the professional, executive and administrative exemptions will also be subject to change after the minimum wage increase takes effect on January 1, 2018.  To qualify as exempt under these classifications, employees must be paid at least two times the state minimum wage in addition to meeting the other exemption criteria.

Bryan Cave LLP has a team of knowledgeable lawyers and other professionals prepared to help employers assess their minimum wage and employee classification obligations. If you or your organization would like more information on California’s minimum wage requirements or any other employment issue, please contact an attorney in the Labor and Employment practice group.

The California Supreme Court Provides Guidance on Day of Rest Requirements

June 14, 2017

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The California Supreme Court clarified employer obligations under the state’s day of rest statutes, Cal. Labor Code §§ 550-558.1, which entitle employees to one day’s rest in seven.  In Mendoza v. Nordstrom, Inc., 2 Cal. 5th 1074 (2017), a case that was (mostly) good news for employers, the Court unanimously upheld interpretations of the requirement that largely preserved scheduling flexibility for employers and employees alike.

Three questions were certified to the Court for consideration:

  • Is the day of rest required by sections 551 and 552 calculated by the workweek, or does it apply on a rolling basis to any seven-consecutive-day period?
  • The day of rest requirement is calculated by workweek.  After finding the plain language of sections 551 and 552 “manifestly ambiguous” and the legislative history irrelevant to the dispute, the Court held that the regulatory and statutory schemes of the day of rest laws required the day of rest requirement to apply during each workweek.  The Court looked to past iterations of Wage Orders related to day of rest requirements and to section 510 of the Labor Code, which governs overtime, in deciding that sections 551 and 552 require a day of rest per workweek, and not on a rolling basis.

    Importantly, the Court noted that the current wage order governing day of rest requirements only guarantees one day of rest per every seven days on average.  In other words, “rest days need not fall on every seventh day and can be spaced out differently in a calendar

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