An unconscionable arbitration agreement

Sometimes a court will refuse to enforce an arbitration agreement because it's unconscionable.

Here we have a plaintiff who sued with a wage claim. He'd signed an arbitration agreement. The boss wanted the court to order arbitration, but the court said the arbitration agreement was unconscionable. Subcontracting Concepts v. De Melo (California Ct App 04/10/2019) [PDF]

Procedurally unconscionable — which has to do with how the contract was formed in the first place — because it was non-negotiable, the guy spoke hardly any English, it was given to him on a take-it-or-leave-it basis, and it said that the AAA rules applied but didn't say which rules, and he didn't get a copy.

Also substantively unconscionable — which has to do with exactly what's in that contract — because it provided for three arbitrators (which is going to be very expensive), and he's not allowed to recover punitive damages, or equitable relief, or attorney fees, or costs — even if he wins.

So — unconscionable. And the court refused to just carve out the bad stuff and save the rest. They threw the whole arbitration agreement out. So this man gets to stay in court.

Overreaching has consequences.

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Is obesity a disability? - Employment Law Case of the Week

Is obesity a disability? The New Jersey Appellate Division says (because a New Jersey statute says): only if it is caused by bodily injury, birth defect or illness. Dickson v. Community Bus Lines (New Jersey Ct App 04/04/2019) [PDF]. This is the Employment Law Case of the Week - Part of a series.

We have a bus driver who has been driving for 10 years, weighs between 500 and 600 pounds, and is obviously obese.

He failed his periodic medical exam which he needs for his commercial driver's license, and the doctor says he needs more tests.

He sued under the New Jersey Law Against Discrimination claiming that he was perceived as having a disability (obesity) and that there was a hostile work environment because of that.

The problem was that the New Jersey statute says that a disability has to be “caused by bodily injury, birth defect or illness.” Just being obese is not enough.

You may have a different outcome in other jurisdictions, but in New Jersey it's not enough just to be obese.

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Fired for using medical marijuana - Employment Law Case of the Week

Employment Law Case of the Week: Wild v. Carriage Funeral Holdings (New Jersey Ct App 03/27/2019) [PDF].

An employee claims he was fired for off-duty marijuana use.

The employee uses medical marijuana as permitted by the New Jersey Compassionate Use Medical Marijuana Act.

He sued under the state law against employment discrimination saying he has a disability — cancer. He's legally treating his cancer with marijuana and he says he can't be fired for that.

Now the employer finds one sentence, which says “Nothing in this act shall be construed to require an employer to accommodate the medical use of marijuana in any workplace.”

So the employer is saying we can fire him for using medical marijuana according to that sentence.

But the New Jersey Court says that The Compassionate Use Act — which is where that sentence is — does not require accommodation, but the law against discrimination is a separate statute and that statute might require accommodation of his disabilities.

The employer might still be required under the law against discrimination to accommodate his medical marijuana use.

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Cross-Examination : Arbitration Boot Camp

There are two reasons to do cross examination.

• One I call constructive.

• The other I call destructive.

Constructive cross-examination — sometimes called hitchhiking — is where you're basically going to use the other side's witness as if they were your witness. That witness has things you need to know (or the arbitrator needs to know) and you simply ask a series of questions to get that information from the witness.

The other one is called destructive cross-examination — it's sometimes called impeachment — where you're trying to discredit the witness. Maybe you can show that witness is a liar. That's difficult and infrequent. But you can show sometimes the witness has a poor memory by asking a series of questions and see if they remember, or you can show bias by showing they’re related to somebody or they socialize with somebody. You don't come right out and say “Oh, well, you must be biased.” No, you just let the arbitrator form the arbitrator's own conclusions on that.

If you're going to use constructive cross-examination, you're probably not going to want to then turn around and try to impeach that witness because you want the arbitrator to believe the constructive part of that testimony that you've got.

Let me give you six ideas.

Number one: Don't repeat the unfavorable information that the witness has already given. You’re just repeating stuff that you don't want to hear and you don't want the arbitrator to hear again.

Number two: Use short questions and use plain words. Don't go into great big long complicated stuff.

Number three: I want you to use leading questions. People say don't use leading questions. But this is cross-examination, and you you can — and Irving Younger the great expert says you must — always use leading questions that would elicit either a yes or no answer.

Q: ”You came to work at eight o'clock that morning?”
A: ”Yes.”
Q: ”The supervisor was already at her desk?”
A: ”Yes.”
And so on. Very simple questions.

Number four: You should usually know what the answer is going to be before you ask the question. Otherwise, you might get surprised — unfavorably.

Number five: I want you to listen to the answer. I see it happen all the time where an advocate has a series of questions they want to ask and they go bulling through that series of questions, but they miss one of the answers that would have led them down a different rabbit hole that could have been quite favorable.

Number six: Do not quarrel with a witness. Do not argue with the witness. It only makes you look bad. And it usually doesn't help your case at all. Save your argument for when the case is over and you get to make an argument to the arbitrator.

So, before the hearing starts, when you're thinking about your cross-examination, know why it is you're going to cross-examine — constructive / destructive — and then prepare a list of questions that will lead you down the proper path to the answers that you want to hear or that you want the arbitrator to hear.

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Proving discrimination: Compared to whom?

When comparing one employee to another, how similar do they have to be?

Employment Law Case of the Week.

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Opening Statement - Arbitration Boot Camp

Tips on making an opening statement at your arbitration hearing, including

• starting with a BANG

• getting in the arbitrator's head

• telling your story.

All part of the "Arbitration Boot Camp" series www.RossRunkel.com/ABC

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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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