Pre-Hearing preparation - Arbitration Boot Camp

Here’s another video in the Arbitration Boot Camp series:  https://www.youtube.com/playlist… 

Tips on preparing for your arbitration hearing, including

• aligning facts with rules

• focusing on strengths and weaknesses.

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Drinking at an office party + Car wreck. Employer liable?

An employee says she was pressured by her supervisor to go to an after-work event – so she could move up in the organization. She says the supervisor encouraged her co-workers to drink.

She got drunk, and then drove the wrong way on the interstate, got in a wreck, and was injured.

Of course, she sued the employer and the supervisor.

The defense was based on an Oregon "social host statute" which immunizes social hosts from lawsuits based on serving alcohol to someone who then goes out and gets injured.

The Oregon Supreme Court says the employee can still sue the employer and the supervisor for negligence for their acts OTHER THAN serving alcohol. Schutz v. La Costita III (Oregon 03/14/2019) [PDF].

She might not win, but the employer has no statutory immunity.

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No "ministerial exception" for teachers

Religious schools tried, and failed, to classify their teachers as "ministers." So the schools have to comply with normal labor and employment laws.

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Selecting Your Arbitrator - Arbitration Boot Camp

You have an arbitration coming up, and it's time to select an arbitrator. Perhaps you got a list of potential arbitrators from AAA or FMCS.

Who are these people? What are they like? Which one(s) will be best for your case?

This 3 ½ minute video will give you some ideas.

Good hunting!

For more in the "Arbitration Boot Camp" series, go to www.RossRunkel.com/abc. They’re also on my YouTube channel.

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The Death of Chevron deference

Update May 5, 2023: The US Supreme Court granted certiorari to decide whether to overrule Chevron. Here comes the end of Chevron deference

Here’s a wonkish comment about a US Supreme Court decision that heralds the death of Chevron deference.

 BNSF Railway v. Loos (US Supreme Ct 03/04/2019) [PDF] was a boring case about payroll taxes in the railway industry.

 The 7-Justice opinion for the Court was important for what it did not say.

 The case involved interpretation of a tax statute. And the IRS had issued a regulation interpreting that statute. You would think the Court would have dealt with what's called Chevron deference – named after Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). When an administrative agency interprets an ambiguous statute, Chevron says that courts should defer to that interpretation.

 But the Court Did. Not. Even. Mention. Chevron.

 So the death of Chevron deference was announced on March 4, 2019.

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Railway employee's recovery of working time lost due to an on-the-job injury is taxable "compensation" (7-2)

The US Supreme Court has brought us a decision that we may actually remember for about five minutes. It's that exciting.

The Court holds that a railroad's payment to an employee for working time lost due to an on-the-job injury is taxable "compensation" under the Railroad Retirement Tax Act (RRTA). BNSF Railway v. Loos (US Supreme Ct 03/04/2019) [PDF].

Loos sued BNSF Railway under the Federal Employers' Liability Act (FELA) for injuries he received while working at BNSF's railyard. A jury awarded him $126,212.78, ascribing $30,000 of that amount to wages lost during the time Loos was unable to work. BNSF asserted that the lost wages constituted "compensation" taxable under the RRTA and asked to withhold $3,765 of the $30,000 to cover Loos's share of the RRTA taxes. The District Court and the Eighth Circuit rejected the requested offset, holding that an award of damages compensating an injured railroad worker for lost wages is not taxable under the RRTA. The Supreme Court reversed, 7-2.

The Court noted that the statutory foundation of the railroad retirement system mirrors that of the Social Security system. Thus, the term "compensation" in the RRTA was given the same meaning as the term "wages" in the Federal Insurance Contributions Act (FICA) and the Social Security Act (SSA). Therefore, as is true for backpay, FELA damages for lost wages are "compensation" taxable under the RRTA.

DISSENTING, Justice Gorsuch (joined by Justice Thomas) said,

"When an employee suffers a physical injury due to his employer’s negligence and has to sue in court to recover damages, it seems more natural to me to describe the final judgment as compensation for his injury than for services (never) rendered."

After all, the RRTA taxes an employee’s "compensation," which it defines as "money remuneration . . . for services rendered as an employee to one or more employers." 26 U. S. C. §3231(e)(1).

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Important lesson from my first arbitration case.

Here’s an important lesson from my first arbitration case. It’s a lesson I can use in all areas of my life. (From the Arbitration Boot Camp series: https://www.youtube.com/playlist… ) 

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NLRB Sets Standards Affecting Beck Objectors

NLRB Sets Standards Affecting Beck Objectors
Union Lobbying Expenses Are Not Chargeable

No surprises here:

Nonmember objectors cannot be compelled to pay for union lobbying expenses, the National Labor Relations Board ruled today. The Board majority held that lobbying activity, although sometimes relating to terms of employment or incidentally affecting collective bargaining, is not part of the union’s representational function, and therefore lobbying expenses are not chargeable to Beck objectors. The ruling relies on relevant judicial precedent holding that a union violates its duty of fair representation if it charges agency fees that include expenses other than those necessary to perform its statutory representative functions.

The Board majority also held that it is not enough for a union to provide objecting nonmembers with assurances that its compilation of chargeable and nonchargeable expenses has been appropriately audited. Citing the “basic considerations of fairness” standard adopted by the Supreme Court, the Board held that a union must provide independent verification that the audit had been performed. Failure to do so violates the union’s duty of fair representation.

The case, United Nurses & Allied Professionals (Kent Hospital) [PDF], is the Board’s long-awaited decision affecting certain rights of nonmember objectors under the Supreme Court’s decision in Communications Workers of America v. Beck, 487 U.S. 735 (1988). In that decision, the Supreme Court held that private-sector nonmember employees subject to union security who object to the expenditure of their agency fees for activities other than collective bargaining, contract administration, or grievance adjustment can only be compelled to pay that portion of the agency fee necessary to the union’s performance of “the duties of an exclusive representative of employees in dealing with the employer on labor-management issues.”

Chairman John F. Ring was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Member Lauren McFerran dissented.

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Three racial slurs over a period of six months can be "severe" or "pervasive"

Fred Gates alleges that his direct supervisor —

• addressed him with the N-word twice

• once threatened to write up his "black ass."

Gates sued claiming a racially hostile work environment in violation of Title VII. The trial court granted summary judgment for the employer. The 7th Circuit reversed. Gates v. Bd of Educ of Chicago (7th Cir 02/20/2019) [PDF].

The 7th Circuit scolded the trial court for requiring a "hellish" workplace before one can establish a hostile work environment.

The court also emphasized that when analyzing whether workplace conduct is sufficiently severe or pervasive, one must distinguish whether a co-worker as opposed to a supervisor uttered the racially offensive language. The court said,

"We have repeatedly treated a supervisor's use of racially toxic language in the workplace as much more serious than a co-worker's." "This is particularly true when supervisors address these derogatory and humiliating remarks directly to the employees in question."

The court also said that three racial slurs in a sixth-month period of a four-year employment was not too infrequent to be pervasive.

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Fired because of a rumor that she slept with the boss

Interesting case: Parker v. Reema Consulting Svc (4th Cir 02/08/2019) [PDF].

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Cosmetology student was not an employee when working at the school's training salon

Patrick Velarde sued The Salon Professional Academy of Buffalo and its owners (Academy) for wages he claimed were owed under the Fair Labor Standards Act (FLSA) and New York Labor Law §§ 190, 650 et seq. for work he performed during his cosmetology vocational training at the Academy. The district court held Velarde was not an employee of the Academy and granted it judgment on the pleadings. The 2nd Circuit affirmed. Velarde v. GW GJ Inc (2nd Cir 02/05/2019) [PDF].

Velarde enrolled with the Academy, a for-profit cosmetology training school, for a 1,000 hour course of study designed to satisfy the coursework requirement for state licensure. Part of his coursework included working under supervision in the Academy salon. The Academy charged customers reduced rates for services performed by students. Velarde and the other students were not paid for their work but received modest tips from customers. After graduation, Velarde became a licensed cosmetologist and sued the Academy for unpaid minimum wage and overtime on the theory he was an employee when he worked at the Academy salon.

In affirming the dismissal of Velarde's lawsuit, the 2nd Circuit held the "primary beneficiary test" announced in Glatt v. Fox Searchlight Pictures, Inc. (2015) for determining when interns are employees in the commercial setting applied to determine whether a trainee in the for-profit vocational training context is an employee. The court concluded the applicable Glatt factors demonstrated Velarde was the primary beneficiary of the relationship given that the 1,000 hours of instruction from the Academy satisfied the coursework requirement for state licensure. The court concluded the fact the Academy charged customers for student work was immaterial because it was entitled to generate a profit on its operations.

This decision is in accord with decisions of the 6th, 7th, and 10th Circuits addressing the same issue.

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Another attack on public sector unions

There's a petition for certiorari pending at the US Supreme Court asking the Court to take up the issue of "Whether it violates the First Amendment to appoint a labor union to represent and speak for public-sector employees who have declined to join the union." Uradnik v. Inter Faculty Organization [Briefs]

Kathleen Uradnik sought a preliminary injunction challenging the constitutionality of an exclusive collective bargaining representative in the public sector, asserting that “the University and State of Minnesota [should] not appoint the Union to speak for her and not force her into an expressive association with it.”

The trial court denied the preliminary injunction, and the 8th Circuit affirmed in December 2018, having decided that Uradnik "cannot show a likelihood of success on the merits of her compelled speech argument."

The Supreme Court may or may not want to hear this case, so we'll just hide and watch.

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NLRB overrules 2014 case on how to decide who is an independent contractor

SuperShuttle DFW, Inc. (NLRB 01/25/2019) [PDF]

Part of a series - Employment Law Case of the Week - by Ross Runkel.

The NLRB announced on January 25 a return to its long-standing independent-contractor standard, reaffirming the Board’s adherence to the traditional common-law test. In doing so, the Board clarified the role entrepreneurial opportunity plays in its determination of independent-contractor status, as the D.C. Circuit has recognized.

The case, SuperShuttle DFW, Inc. (NLRB 01/25/2019) [PDF], involved shuttle-van-driver franchisees of SuperShuttle at Dallas-Fort Worth Airport. Applying its clarified standard, the Board concluded that the franchisees are not statutory employees under the National Labor Relations Act but rather independent contractors excluded from the Act’s coverage.

The Board found that the franchisees’ leasing or ownership of their work vans, their method of compensation, and their nearly unfettered control over their daily work schedules and working conditions provided the franchisees with significant entrepreneurial opportunity for economic gain. These factors, along with the absence of supervision and the parties’ understanding that the franchisees are independent contractors, resulted in the Board’s finding that the franchisees are not employees under the Act. The decision affirms the Acting Regional Director’s finding that the franchisees are independent contractors.

This decision overrules FedEx Home Delivery, a 2014 NLRB decision that modified the applicable test for determining independent-contractor status by severely limiting the significance of a worker’s entrepreneurial opportunity for economic gain.

Chairman John F. Ring was joined by Members Marvin E. Kaplan and William J. Emanuel in the majority opinion. Member Lauren McFerran dissented.

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Backpack wars

Image from Jon’s awesome blog

Cleveland employment lawyer Jon Hyman tells a bizarre story of his attempt to get to a mediation being held at the Ohio Civil Rights Commission. He had his laptop and all his papers in a backpack, and backpacks were not allowed into the Commission's building.

No metal detectors or pat-downs or other security – just a rule against backpacks.

Solution? Put the backpack into a shopping bag and carry it in that way?

Dumb? Sure. But it all made sense to the "security" folks.

For the whole story, including a mediator's contribution: What's is the dumbest workplace policy you've ever encountered?

Is Uber next? US Supreme Court case could be a game changer.

Is Uber next? US Supreme Court case could be a game changer.

Part of a series - Employment Law Case of the Week - by Ross Runkel.

New Prime v. Oliveira (US Supreme Ct 01/15/2019) [PDF] held that an interstate truck driver does not have to arbitrate his wage and hour claim – even though he signed an arbitration agreement.

This could have a big effect on lawsuits between Uber and their drivers. It probably turns on whether the drivers are IN interstate commerce.

Some pundits were surprised that the Court would issue a "pro-worker," "anti-arbitration" decision, failing to understand that the Justices all do their best to be faithful to the words Congress puts into its statutes.

Dominic Oliveira is an interstate truck driver whose contract with New Prime designates him as an independent contractor. The contract contains a mandatory arbitration provision and contains a "delegation clause," giving the arbitrator authority to decide threshold questions of arbitrability. Oliveira filed a class action claiming that New Prime failed to pay statutory minimum wage. The trial court denied New Prime's motion to compel arbitration; the 1st Circuit affirmed. The US Supreme Court affirmed unanimously. New Prime v. Oliveira (US Supreme Ct 01/15/2019) http://case.lawmemo.com/us/Oliveira.pdf

The Federal Arbitration Act (FAA) directs courts to compel arbitration, but §1 says that "nothing" in the Act "shall apply" to "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce."

The Supreme Court held that the trial court – not the arbitrator – must first decide whether FAA §1 excludes Oliveira. This is because the contract's delegation clause (which is merely a specialized type of arbitration agreement) can be enforced only if the FAA applies in the first place.

The Supreme Court also held that FAA §1 excludes Oliveira. The FAA's term "contract of employment" refers to any agreement to perform work. At the time of the FAA's adoption in 1925, the phrase "contract of employment" was not a term of art, and dictionaries tended to treat "employment" more or less as a synonym for "work." Contemporaneous legal authorities provide no evidence that a "contract of employment" necessarily signaled a formal employer-employee relationship.