Source: https://flsaovertimelaw.com/tag/ninth-circuit/
Timestamp: 2019-04-21 00:36:06+00:00

Document:
As with many concepts in the law, many practitioners know something to be true, but they are not exactly sure why or what the authority for the position is. Such seems to be true with regard to the notion that an employer’s failure to tender an employee’s paycheck on the regular payday, constitutes a minimum wage violation. For anyone who is ever faced with this issue, a recent decision from the Ninth Circuit provides clear authority for this position. After a jury verdict in the plaintiff’s favor, all parties appealed various parts of the final judgment. As discussed here, the plaintiff appealed the District Court’s Order granting the defendants summary judgment on her late last paycheck (minimum wage) claim. The Ninth Circuit reversed the decision and held that the defendants failure to tender the plaintiff’s final paycheck on the normal payday was a minimum wage violation under the FLSA.
Although there is no provision in the FLSA that explicitly requires an employer to pay its employees in a timely fashion, this Circuit has read one into the Act. Biggs v. Wilson, 1 F.3d 1537, 1541 (9th Cir.1993). In Biggs, we held that payment must be made on payday, and that a late payment immediately becomes a violation equivalent to non-payment. Id. at 1540. “After [payday], the minimum wage is ‘unpaid.’ ” Id. at 1544. The district court misread Biggs. For purposes of the FLSA, there is no distinction between late payment violations and minimum wage violations: late payment is a minimum wage violation. See id. Accordingly, we reverse the district court’s entry of summary judgment for Defendants on Plaintiffs’ federal minimum wage claim.
Click Rother v. Lupenko to read the entire Memorandum Opinion.
Brown v. Citicorp Credit Services, Inc.
This case was before the court on the defendant’s motion to compel arbitration and dismiss the plaintiffs operative (second amended) complaint. Of significance, joining several recent courts, the court considered the effect of the NLRA’s Section 7, as it relates to a purported waiver of employees’ rights to proceed under the FLSA’s collective action mechanism. Reasoning that a waiver of the right to proceed as a collective action basis, “bars [plaintiff] from asserting a substantive right that is critical to national labor policy,” the court held that same was unenforceable.
Several Circuits have cited the dicta in Gilmer to uphold waivers of the FLSA’s collective action rights—these Circuits hold that the waiver affects only the employee’s procedural right to bring a collective action, not his substantive right to seek recovery under the FLSA for himself, and thus the waiver is valid. Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1378 (11th Cir.2005); Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 298 (5th Cir.2004); Adkins v. Labor Ready, Inc., 303 F.3d 496, 503 (4th Cir.2002). The Ninth Circuit has reached the same result but in an unpublished decision that cannot be cited for any purpose.
These cases did not address, however, the issue of whether a waiver of FLSA collective action rights violates the National Labor Relations Act (NLRA). Section 7 of the NLRA vests in employees the right “to engage in … concerted activities for the purpose of … mutual aid or protection.” 29 U.S.C. § 157. The right to engage in concerted action for “mutual aid or protection” includes employees’ efforts to “improve terms and conditions of employment or otherwise improve their lot as employees through channels outside the immediate employee-employer relationship.” Eastex, Inc. v. NLRB, 437 U.S. 556, 565–566, 98 S.Ct. 2505, 57 L.Ed.2d 428 (1978). Those “channels’ include lawsuits. See Brady v. National Football League, 644 F.3d 661, 673 (8th Cir.2011) (holding that “a lawsuit filed in good faith by a group of employees to achieve more favorable terms or conditions of employment is ‘concerted activity’ under 29 U.S.C. § 157“).
The National Labor Relations Board has recently held that an employee’s lawsuit seeking a collective action under the FLSA is “concerted action” protected by Section 7 of the NLRA. In re D.R. Horton, Inc., 2012 WL 36274 (N.L.R.B. Jan.3, 2012). Although some Section 7 rights can be waived by a union acting on behalf of employees, see Metro. Edison Co. v. NLRB, 460 U.S. 693, 707–08, 103 S.Ct. 1467, 75 L.Ed.2d 387 (1983), it is unlawful for the employer to condition employment on the waiver of employees’ Section 7 rights. Retlaw Broadcasting Co. v. NLRB, 53 F.3d 1002 (9th Cir.1995). That is precisely what Brown alleges happened here.
Under Chevron USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), the Court must defer to the Board’s interpretation of the NLRA if its interpretation is rational and consistent with the Act. Local Joint Executive Bd. of Las Vegas v. NLRB, 657 F.3d 865, 870 (9th Cir.2011). The Board’s interpretation in Horton of Section 7 of the NLRA is rational and consistent with the Act: A collective action seeking recovery of wages for off-the-clock work falls easily within the language of Section 7 protecting “concerted action” brought for the “mutual aid and protection” of the employees.
Thus, Citicorp’s arbitration agreement waives Brown’s Section 7 rights to bring an FLSA collective action. As discussed, an arbitration agreement may, by the terms of the FAA, be declared unenforceable “upon such grounds as exist at law or in equity for the revocation of any contract.” See 9 U.S.C. § 2. Do legal grounds exist to revoke an agreement to waive Section 7 rights?
Section 7 rights are protected “not for their own sake but as an instrument of the national labor policy.” Emporium Capwell Co. v. W. Addition Cmty. Org., 420 U.S. 50, 62, 95 S.Ct. 977, 43 L.Ed.2d 12 (1975). Thus, Citicorp’s arbitration agreement does more than merely waive Brown’s right to a procedural remedy; it bars her from asserting a substantive right that is critical to national labor policy. A contract that violates public policy must not be enforced. See United Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 42, 108 S.Ct. 364, 98 L.Ed.2d 286 (1987) (citing the “general doctrine, rooted in the common law, that a court may refuse to enforce contracts that violate law or public policy”). Moreover, it is unlawful for the employer to condition employment on the waiver of employees’ Section 7 rights. Retlaw Broadcasting Co. v. NLRB, 53 F.3d 1002 (9th Cir.1995).
For these reasons, the Court finds that under the FAA, there are legal grounds to revoke the arbitration agreement’s waiver of Brown’s right to bring a collective action under the FLSA and a class action under the IWCA. Accordingly, the Court will deny Citicorp’s motion to compel arbitration and to dismiss Brown’s claims.
Given the lack of clarity on this issue (see, e.g., here), and the fact that courts continue to come down on opposite sides of it, this issue is likely to end up at the Supreme Court at some point in the relatively near future. However, this case was certainly a win for employees in the ongoing battle. Stay tuned for further developments.
Click Brown v. Citicorp Credit Services, Inc. to read the entire Memorandum Decision and Order.
This case was before the Ninth Circuit of the Secretary of Labor’s appeal of an order granting the defendant summary judgment. The court below had held that plaintiffs- social workers employed by the State of Washington- were exempt as so-called “learned professionals,” because a prerequisite for their position was a 4 year degree academic degree. The Ninth Circuit reversed, holding that the court below misconstrued the 4 year degree (B.A.) requirement as having met the prong of the exemption pertaining to “advanced knowledge customarily acquired by a prolonged course of specialized intellectual instruction.” Specifically, the Ninth Circuit held that the plaintiffs were not “learned professionals,” because “the social worker positions at issue… require[d] only a degree in one of several diverse academic disciplines or sufficient coursework in any of those disciplines.” Thus, because the position did not require a degree in a specific discipline the Ninth Circuit held the position did not plainly and unmistakably come within the exemption.
“Whether a position requires a degree in a specialized area, see Reich, 993 F.2d at 739, or merely a specific course of study, see Rutlin, 220 F.3d at 737, a “prolonged course of specialized intellectual instruction” must be sufficiently specialized and relate directly to the position. An educational requirement that may be satisfied by degrees in fields as diverse as anthropology, education, criminal justice, and gerontology does not call for a “course of specialized intellectual instruction.” Moreover, in this case the net is cast even wider by the acceptance of applicants with other degrees as long as they have sufficient coursework in any of these fields.
“The district court also gave weight to the six-week formal training program required for accepted applicants. However, such a program was determined to be insufficient in Vela, where the court concluded that 880 hours of specialized training in didactic courses, clinical experience, and field internship did not satisfy the education prong of the “learned professional” exemption. 276 F.3d at 659. If six weeks of additional training, only four weeks of which is in the classroom, were sufficient to qualify as a specialized course of intellectual instruction, nearly every position with a formal training program would qualify.
This decision gives an important roadmap to employees, employers and courts alike in determining the applicability of the learned professional exemption.
Click Solis v. Washington to read the entire opinion. Click Secretary of Labor Brief, to read the SOL’s successful Brief in support of her appeal.
Pitts v. Terrible Herbst, Inc.
This case was before the Ninth Circuit on any issue that has become more and more prevalent in recent years, with the increased wage and hour putative class and collective action filings. Specifically, the issue before the Ninth Circuit was “whether a rejected offer of judgment (OJ) for the full amount of a putative class representative’s claim moots a class action complaint where the offer precedes the filing of a motion for class certification.” The Ninth Circuit held that it does not and a defendant may not “pick off” a class by making such an offer to the named-plaintiff alone.
The procedural history in the case is worth discussing, because there were other issues, not discussed in detail, also addressed in the opinion. The trial court had not set a bright-line deadline for filing a motion for class certification simultaneously. And, because the defendant failed to provide plaintiff with the records pertaining to the putative class members during the initial discovery period, plaintiff filed a motion to compel and sought to extend the discovery deadline as well. The court ultimately granted both motions. However, while it held that the OJ did not moot the claim, it nonetheless dismissed the case, because the plaintiff had failed to move for class certification as of the initial discovery deadline. This appeal ensued.
After reviewing surveying applicable case law from around the country, the court held that the district court below properly concluded that a defendant may not “pick off” a putative class action, by tendering payment to the named-plaintiff alone.
Click Pitts v. Terrible Herbst, Inc. to read the entire decision.
Probert v. Family Centered Services of Alaska, Inc.
This case was before the Ninth Circuit on the defendant’s appeal of an order granting plaintiffs- house parents at their various group homes of emotionally disturbed children- summary judgment, holding that each of defendant’s homes were subject to FLSA coverage as an “institution primarily engaged in the care of the sick, the aged, mentally ill or defective who reside on the premises of such institution.” 29 U.S.C. § 203(r)(2)(A). The Ninth Circuit reversed, holding that defendant’s homes were not primarily engaged in such care, although it was undisputed that they provided housing for same. In so doing, the Ninth Circuit ignored long-held jurisprudence requiring that courts liberally construe the FLSA’s coverage to serve the statute’s remedial goals.
“Plaintiffs Loretta and Robert Probert and Plaintiffs–Intervenors Debra and Eric Cloninger, Donna and John Grimes, Gene and Sandra Grissom, and Kenneth and Leona McDaniels are married couples who worked as “house parents” in FCSA’s Homes. Each Home housed up to five children. All the children were “severely emotionally disturbed” as defined by the Alaska law that qualifies the Homes for Medicaid funding, 7 Alaska Admin. Code § 43.471, and each of the children had at least one diagnosed mental disorder under Axis–I of the current Diagnostic and Statistical Manual of Mental Disorders. The children attended local public schools and participated in other activities away from the Homes. The children participated in group therapy conducted by clinicians in the Homes, but received most of their medical and psychological treatment outside the Homes. Plaintiffs were not licensed medical or social service professionals.
“Plaintiffs argue that each of the FCSA Homes in which they worked is covered by the statute as “an institution primarily engaged in the care of … the mentally ill … who reside on the premises of such institution.” The FLSA is a remedial statute that is “to be liberally construed to apply to the furthest reaches consistent with Congressional direction.” Dent v. Cox Communications Las Vegas, Inc., 502 F.3d 1141, 1146 (9th Cir.2007) (internal quotation marks omitted); see also 29 C.F.R. § 779.101 (“An employer who claims an exemption under the Act has the burden of showing that it applies.”). Nonetheless, we conclude that the language of the statute does not cover the FCSA Homes, for two primary reasons.
The first reason is that the Homes were not “primarily engaged” in providing “care,” as that term is used in the statute. The statute refers to “care” in relation to groups with special needs, namely “the sick, the aged, the mentally ill or defective.” 29 U.S .C. § 203(r)(2)(A). As such, we understand “care” in this context to include something more like treatment. What the Homes primarily provided, as their name suggests, was a home or a residence. As noted above, the children attended school, engaged in activities, and received most of their medical and psychological treatment from medical and mental health professionals outside the Homes. Obviously, for children a home should be more than simply a place to live, and the children presumably benefitted from Plaintiffs’ “care” as house parents. But Plaintiffs were not medical or social service professionals and were not primarily focused on providing the type of “care” that those professionals provide.
The language of the statute clearly suggests a covered institution must provide more than the general care of a residence. In addition to requiring that the institution’s patrons “reside on the premises of [the] institution,” the institution must provide “care” of the type that is provided to “the sick, the aged, the mentally ill or defective.” If residing on the premises were enough by itself to define the given premises as covered by the statute, then the requirement that the institution be “primarily engaged” in the “care” of the individuals residing there would be superfluous. We are to avoid interpreting a statute in that manner. See TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (“It is a cardinal principle of statutory construction that a statute ought, upon the whole, to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant.” (internal quotation marks omitted)).
An establishment, organization, or association, instituted for the promotion of some object, esp. one of public or general utility, religious, charitable, educational, etc., e.g. a church, school, college, hospital, asylum, reformatory, mission, or the like; as a literary and philosophical institution, a deaf and dumb institution, the Royal National Life-boat Institution, the Royal Masonic Benevolent Institution …, the Railway Benevolent Institution, etc. 5 Oxford English Dictionary 354 (1933, reprinted 1961). The FCSA Homes do not fit well within that definition.
“Plaintiffs argue that we should interpret § 203(r)(2)(A) to include FCSA’s Homes because guidance from the Department of Labor indicates that a reference to “nursing homes” in that provision should be interpreted broadly. See Dep’t of Labor, Wage and Hour Division, Field Operations Handbook (FOH), ch. 12, § 12g02 (“[Institutions primarily engaged in the care of the aged] are not limited to nursing homes, … but include those institutions generally known as nursing homes, rest homes, convalescent homes, homes for the elderly and infirm, and the like.”). Plaintiffs argue that by the same reasoning, “institution primarily engaged in the care of the … mentally ill” should be interpreted broadly to include FCSA’s Homes. We disagree.
Combined with its recent decision in Christopher v. SmithKline Beecham Corp., this decision is particularly disturbing. It appears the Ninth Circuit is quickly moving away from long held tenets of FLSA jurisprudence, the twin constructs that FLSA coverage is to be liberally construed, while exemptions/exceptions to coverage are to be narrowly construed against employers. In any case, it clear that here, that the Ninth Circuit construed FLSA coverage as narrowly as possible in holding that defendant was not a covered enterprise.
Click Probert v. Family Centered Services of Alaska, Inc. to read the entire Opinion.

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