Source: https://shermanhoward.com/tag/ninth-circuit/
Timestamp: 2019-04-23 15:31:05+00:00

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Many employment-related statutes require employers to provide “clear and conspicuous” communications to employees. The Ninth Circuit’s decision last week in Gilbert v. Cal. Check Cashing Stores (“CCCS”), No. 17-16262, reminds us of the need to proofread employment documents to satisfy that requirement. As the Ninth Circuit was forced to explain again, to be “clear and conspicuous” a document must be “reasonably understandable” and “readily noticeable” by its intended audience – the employee. After reviewing the form used by CCCS to provide mandatory disclosures under the Fair Credit Reporting Act (“FCRA”), the Court found their form was not “reasonably understandable.” “[A] reasonable person would not understand” the incomplete, grammatically incorrect, run-on sentences found throughout that form. Also, the form “would confuse a reasonable reader” because it did not stay on subject. It combined federal and state disclosures in a manner that confused rather than clarified. While CCCS ultimately squeaked by on the “readily noticeable” front, with just a slap on the hand for having “inadvisably” printed their disclosure “in Arial Narrow, size 8 font,” they still violated the FCRA, as the form had to be both “clear” and “conspicuous.” One out of two just didn’t cut it.
Learn from their mistakes. Stick to the subject-matter. Title the document so the employee can “see what she [is] signing.” Use capitalization, bolding, and underlining to draw attention to any portion of a document that must be “clear and conspicuous;” and use clear, simple language that your reader will understand in complete, grammatically correct sentences. Most importantly, PROOF READ your documents BEFORE you start using them.
The Ninth Circuit Court of Appeals weighed in, today, on the propriety of class action arbitration waivers under the NLRA. The Court held that such waivers violate Sections 7 and 8 of the NLRA in the context of a pending FLSA lawsuit.
Ernst & Young requires new employees to sign an agreement that requires employees to pursue any claims against the employer through arbitration, and such arbitrations must be pursued on an individual basis. The effect of the agreement is to prevent employees from bringing class or collective actions against the employer in court or in arbitration. But, the employees involved in this case brought a FLSA collective action lawsuit anyway. The employer moved to dismiss the lawsuit arguing that all of the potential class members had to arbitrate their respective claims separately as individuals. The trial court agreed, dismissed the case, and ordered individual arbitrations.
The Ninth Circuit reversed, however, finding that the arbitration provision violates Section 7 of the NLRA, which grants employees a statutory right to engage in “concerted” activities. The Court poo-pooed the import and impact of the Federal Arbitration Act, the stated purpose of which is to promote and enforce arbitration agreements. This is no surprise, as the Ninth Circuit has quite notoriously fought arbitration at every avenue when it comes to employment litigation. The dissenting judge in this case quite rightly describes the Court’s decision as “breathtaking in its scope and in its error”. Given the profound split on this issue between federal appellate courts, the continued vitality of this decision rests with SCOTUS, yet another point of significant interest in this election cycle.
This morning the U.S. Supreme Court issued its latest decision (read, “non-decision”) in Encino Motorcars, LLC v. Navarro. The case involves a decades-old question of whether auto dealership “service advisors” are exempt under a specific FLSA overtime exemption covering any “salesman, partsman, or mechanic…engaged in selling or servicing automobiles, trucks, or farm implements” at a covered dealership. Over the span of several decades, the DOL had flip-flopped on this issue until 2011, when it issued a formal regulation concluding that service advisors do not qualify under the exemption. The Ninth Circuit Court of Appeals held that the DOL’s 2011 rule was entitled to substantial deference, and therefore sided with the DOL on the issue.
The Supreme Court rejected the Ninth Circuit’s analysis. The Court concluded that the DOL’s 2011 regulation was not entitled to any deference at all because the DOL failed to provide any meaningful explanation for its 2011 180-degree change in its interpretation of the exemption. Even so, the Supreme Court failed to address the issue that has been pending for decades—the application of the exemption to service advisors—choosing instead to send the case back to the Ninth Circuit to re-analyze the issue without deference to the DOL. This appears to be yet another example of the Supreme Court trying to cope, extremely inefficiently, with the death of Justice Scalia, and the seemingly inexorable split of opinions among the 8 justices on important issues. On the bright side, it is yet another recognition by the Court that the DOL’s actions are not sacrosanct, and the DOL must explain itself when it makes radical changes in its interpretation of the FLSA.
The Fair Labor Standards Act (“FLSA”) requires payment of a minimum hourly wage and overtime, unless an employee fits within one of many exemptions. In some parts of the United States, courts had ruled that automobile service advisors – the people at the dealership who you speak with about your car’s repair needs – were exempt. This conclusion was based on a reading of the statutory text in the FLSA, the accompanying regulations, and even Department of Labor opinion letters and its field handbook. This week, however, the Ninth Circuit, which has jurisdiction over California, Arizona, and other western states, looked at this issue for the first time and reached the opposite conclusion. Navarro v. Encino Motorcars LLC, No. 13-55323 (9th Cir. Mar. 24, 2015).
According to the Ninth Circuit, service advisors do not fit within the exemption. That court read the exemption narrowly, and limited it to automobile dealership employees who sell cars, work in parts, or work as mechanics – in effect, all the major positions other than service advisors. The Ninth Circuit reasoned that because the exemption analysis could go either way, it should respect the current judgment of the DOL, which now narrowly interprets this exemption.
The Supreme Court today shed further light on post-work, non-compensable time under the FLSA. Integrity Staffing Solutions, Inc. v. Busk, No. 13-433 (U.S. December 9, 2014). The plaintiff class were warehouse workers who retrieved and packaged goods to ship to Amazon customers. After each work shift, they were required to stand in line to be screened for possible theft. The plaintiffs claimed they spent 25 minutes a day waiting in the security screen line, and the employer did not compensate them for their waiting time. The trial court dismissed the case, finding that the time spent in a security check line was not integral and indispensable to the employees’ warehouse work. The Ninth Circuit Court of Appeals reversed that ruling, holding that because the employer required the employees to wait in line, and because the security screens solely benefitted the employer, the time was compensable.
The Supreme Court made short shrift of the Ninth Circuit’s analysis. The Supreme Court stated that the test for compensability is not simply a matter of whether the employer required the employee to engage in the post-work activity, or the Portal-to-Portal Act would be rendered completely meaningless. Instead, post-work activity is only compensable when the activity is principally the kind of work the employee was hired to perform and is integral and indispensable to that work. Here, the employees were not hired to go through security screenings and they could just as easily perform their actual job duties with or without security screenings, so the time was not compensable under the FLSA.
During a meeting about commissions and minimum wage and about his own and other sales peoples’ breaks, an employee lost his temper. In a raised voice he called his supervisors names, including “f***ing mother f***ing,” f***ing crook[s],” and an “a**hole,” among others. He also stood up, pushed his chair aside, and told his supervisors that if they fired him, they would regret it. As a result, the employee was discharged. He then filed an unfair labor practice charge with the N.L.R.B.
How, exactly, an employer is supposed to maintain a civil workplace remains to be seen.
In 2007, Maria Escriba requested and received two weeks of vacation from her employer to travel to Guatemala to care for her ailing father. When Escriba did not return to work at the end of her leave, the employer discharged her. Escriba sued, alleging that her employer unlawfully interfered with her right to take FMLA leave because her reason for taking a vacation – to care for her father – automatically entitled her to the FMLA’s protection. The employer argued that although Escriba provided an FMLA-qualifying reason for her vacation request, she specifically declined to have her vacation count as FMLA leave. Consequently, she could not assert a claim under the FMLA.
The Ninth Circuit Court of Appeals recently disagreed with Escriba. Escriba v. Foster Poultry Farms, Inc., No. 09-CV-01878 (9th Cir. Feb. 25, 2014). It held that Escriba could decline FMLA leave and rely only on her vacation leave when taking time off to care for her father, thus preserving all twelve weeks of her FMLA leave for future use.
Many employers require available paid leave to be used at the outset of any unpaid FMLA leave, with the paid leave running concurrently with the unpaid FMLA leave. For example, an employer might require an employee who takes twelve weeks of unpaid FMLA leave to use three weeks of available vacation leave at the outset the time off, resulting in three weeks of paid leave and nine weeks of unpaid leave. Does the Ninth Circuit’s decision mean that an employee can refuse to take paid leave and FMLA leave concurrently, even when an employer requires it? Probably not, but expect to see this argument crop up in future cases.
The Ninth Circuit just held that an employer is entitled to deduct from an employee’s final paycheck money an employee owes to the employer. Ward v. Costco Wholesale Corp. Costco issued Ms. Ward a company credit card, but required her to sign a contract allowing Costco to deduct any remaining credit card balance from her unused vacation and sick pay. When Ward was terminated, Costco deducted roughly $1,000 from her final paycheck, all charged against Ward’s unused vacation and sick pay. Ward still received minimum wage and overtime for her final 40 hours of work.
Ward brought an FLSA collective action on behalf of a class of Costco employees, and also asserted violations of California’s termination pay statute. The District Court dismissed the case, and the Ninth Circuit summarily affirmed the decision in a brief opinion. The Ninth Circuit held that nothing in the FLSA requires an employer to pay unused vacation and sick pay, so deductions from those amounts did not violate the FLSA. The Ninth Circuit also held that these deductions did not violate California’s termination pay statute because Ward contractually agreed to forfeit her unused vacation and sick pay with respect to any outstanding credit card balance.
The Ninth Circuit reached the correct conclusion here. The conclusion was, however, driven by the contract in the case.
By Lori Phillips Generally speaking, arbitration is a matter of contract, and arbitration agreements must be enforced according to their terms. The Ninth Circuit recently issued a caveat, however. In In re Wal-Mart Wage & Hour Employment Practices Litigation, No….
Generally speaking, arbitration is a matter of contract, and arbitration agreements must be enforced according to their terms. The Ninth Circuit recently issued a caveat, however. In In re Wal-Mart Wage & Hour Employment Practices Litigation, No. 11-17718 (9th Cir. Dec. 17, 2013), an issue of first impression, the Ninth Circuit held that a non-appealability clause in an arbitration agreement that eliminates all federal court review of arbitration awards, including review under § 10 of the Federal Arbitration Act, is not enforceable. Federal court review of arbitration awards is already limited to the grounds enumerated in the FAA and to very limited circumstances in which an arbitrator manifestly disregards the law. Allowing parties to contractually eliminate all judicial review of arbitration awards, the court stated, would disregard the text of the FAA and take away the assurance of a minimum level of due process for the parties. This case shows that, while courts do strongly favor enforcing arbitration agreements according to their terms, there are still limits on the terms to which parties can agree.

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