ChatGPT writes a rap

My prompt to ChatGPT: "Write a rap about arbitrator Ross Runkel." Below is the response. Remember, AI intelligence is artificial.

Listen up y'all, I'm about to tell a tale
'Bout an arbitrator who never fails
Ross Runkel's his name, he's a legal whiz
With his keen mind, he settles disputes with ease

Arbitrator Ross Runkel, he's the man
When it comes to resolving disputes, he's got a plan
He's fair and impartial, he's the real deal
If you're in a legal bind, Ross Runkel's who you need to feel

He's got the law down pat, he knows it inside out
With his vast knowledge, there's no need to doubt
He's got a sharp eye for detail, and a way with words
In the courtroom, he's the king of the nerds

He's got a reputation that's second to none
With his sharp mind, he gets the job done
From labor disputes to employment law
He's the arbitrator who knows it all

So if you're ever in need of an arbitrator's hand
Look no further than Ross Runkel, he's your man
With his expertise and legal know-how
He'll settle your dispute, and do it right now

Arbitrator Ross Runkel, he's the one to call
He's got the skills and expertise, to settle it all
So if you want justice, and you want it fast
Give Ross Runkel a call, and he'll make it last

Almost illegible arbitration agreement

Many California car dealers are using an arbitration agreement that uses type that makes it almost impossible to read. Outrageous! Yet OK says the California Court of Appeal in a 2-1 decision.

In a familiar sequence, an employee signed an arbitration agreement and later sued the employer, the employer moved to send the case to arbitration, and the employee claimed the agreement was unconscionable.

In California (as in most states) in order for an agreement to be found unconscionable there must be both procedural unconscionability (that is, the way the agreement was formed) and substantive unconscionability (that is, the actual terms contained in the agreement). One or the other alone is not enough.

In Fuentes v. Empire Nissan (Cal Ct App 04/21/2023) [PDF] the California Court of Appeal held (2-1) that the agreement was procedurally unconscionable but not substantively unconscionable. So the agreement is enforcable.

The DISSENT argued that the agreement was substantively unconscionable simply because it was so incredibly difficult to read. Here's how the dissent put it: "The print is so fine it is unreadable without magnification. See if you can read it without giving up."

The dissent's basic reasoning is that because of the difficulty in reading the agreement, the employer knows what it contains but the employee does not.

Grossman update on employment discrimination

Free and valuable: The inimitable Paul Grossman has just put out a 99-page supplement to Lindemann, Grossman & Weirich, Employment Discrimination Law (6th ed. 2020).

To get on the mailing list, email to Cathy Smith-Joo, cathysmithjoo@paulhastings.com

With a few exceptions, this update begins with cases decided after January 1, 2018. It focuses almost exclusively on Court of Appeals and Supreme Court decisions.

Biometric Information Privacy Act claims are preempted

William Walton filed a class-action complaint against his former employer alleging that the collection, use, storage, and disclosure of Walton’s and similarly situated employees’ biometric data violated the Illinois Biometric Information Privacy Act. The Illinois Supreme Court held that his claim is preempted by Section 301 of the Labor Management Relations Act. Walton v. Roosevelt University (Illinois 03/23/2023) [PDF].

Basic reasoning: Walton belonged to a union that had a collective bargaining agreement with the employer. The CBA had a "broad" management rights clause, so his claim involved interpreting the CBA. Thus, his claim has to be decided by an arbitrator, who will interpret the CBA. Of course, by now, it's probably too late to file a grievance under the CBA.

This case will mean that, in Illinois, almost any unionized employee will need to proceed under the CBA grievance procedure rather than bringing a lawsuit.

What I find interesting is that the management rights clause is pretty standard stuff:

“Subject to the provisions of this Agreement, the Employer shall have the exclusive right to direct the employees covered by this Agreement. Among the exclusive rights of management, but not intended as a wholly inclusive list of them are: the right to plan, direct, and control all operations performed in the building, to direct the working force, to transfer, hire, demote, promote, discipline, suspend or discharge, for proper cause, to subcontract work and to relieve employees from duty because of lack of work or for any other legitimate reason. The Union further understands and agrees that the Employer provides an important service to its tenants of a personalized nature to fulfill their security needs, as those needs are perceived by the Employer and the tenants. Accordingly, this Agreement shall be implemented and interpreted by the parties so as to give consideration to the needs and preferences of the tenants.”

Also interesting is that the court at one point said there is an arguable claim for preemption: "[W]e defer to the uniform federal case law on this matter and find that when an employer invokes a broad management rights clause from a CBA in response to a Privacy Act claim brought by bargaining unit employees, there is an arguable claim for preemption. Accordingly, because we do not believe the federal decisions were wrongly decided, and here the CBA contained a broad management rights clause, we find Walton’s Privacy Act claims are preempted by the LMRA."

Pending Supreme Court case on arbitration

[Watch the video]

After Coinbase was sued (in two cases), they moved to compel arbitration and to stay the court proceedings. The trial courts denied the motions to compel arbitration – one on the ground of unconscionability, the other on the ground that the arbitration agreement did not apply to the issue at hand.

The trial courts also denied the motions for a stay. Coinbase filed interlocutory appeals at the 9th Circuit, but the trial courts allowed the court litigation to proceed. The 9th Circuit refused to grant a stay.

Now the cases are consolidated in the US Supreme Court – Coinbase v. Bielski [Briefs], and oral arguments are scheduled for March 21.

NOTE: This is not an employment law case, yet it will be important for employment lawyers.

Federal Arbitration Act Section 16 provides for an interlocutory appeal from the denial of a motion to compel arbitration, but it says nothing about a stay. FAA Section 3 requires a stay when a court does compel arbitration.

So which will it be? Automatic stay? Or within the trial court's discretion?

FLSA collective action chaos

Welcome to FLSA forum shopping. The US Supreme Court has ducked a chance to clarify whether a federal court – in an FLSA collective action – has jurisdiction over claims arising in another state. Circuit courts are split. About 50 district courts are split about 50-50.

After Christa Fischer filed an FLSA collective action against Fed Ex in federal district court in Pennsylvania, other employees from other states opted in. However, the 3rd Circuit held that the district court had no jurisdiction over the claims arising outside of Pennsylvania. Fischer v. Federal Express, 42 F.4th 366 (3rd Cir 2022).

Fischer petitioned the Supreme Court for certiorari, pointing out that Circuit courts were split 3-1 and district courts split 26-24. But the Court denied certiorari on March 6, 2023.

We can now expect plaintiffs to shop around for the most favorable circuit, which, for now, is the 1st Circuit.

SCOTUS: Highly paid executive – paid on a daily basis – entitled to FLSA overtime

The US Supreme Court has ruled that a highly paid executive (over $200,000/year) gets overtime under the FLSA. Under the regulations, an employee falls within the “bona fide executive” exemption only if (among other things) he is paid on a “salary basis.”

The question raised was whether a high-earning employee is compensated on a “salary basis” when his paycheck is based solely on a daily rate—so that he receives a certain amount if he works one day in a week, twice as much for two days, three times as much for three, and so on. The Court held that such an employee is not paid on a "salary basis," and thus is entitled to overtime pay. Helix Energy v. Hewitt (02/22/2023) (6-2 on the merits, with one Justice saying the Court should not have decided the case at all) [PDF].

Michael Hewitt worked for Helix on an offshore oil rig, typically working 84 hours a week while on the vessel. Helix paid Hewitt on a daily-rate basis, with no overtime compensation. The daily rate ranged, over the course of his employment, from $963 to $1,341 per day. His paycheck, issued every two weeks, amounted to his daily rate times the number of days he had worked in the pay period. So if Hewitt had worked only one day, his paycheck would total (at the range’s low end) $963; but if he had worked all 14 days, his paycheck would come to $13,482.

The Court said: "Helix did not pay Hewitt on a salary basis as defined in §602(a). That section applies solely to employees paid by the week (or longer); it is not met when an employer pays an employee by the day, as Helix paid Hewitt. Daily-rate workers, of whatever income level, are paid on a salary basis only through the test set out in §604(b) (which, again, Helix’s payment scheme did not satisfy)."

FAA preempts California's AB 51

Click image for video

9th Circuit: The Federal Arbitration Act preempts California’s Assembly Bill 51, so employers are free to require employees and applicants to agree to arbitrate employment law disputes. 2:15 minute video – also on YouTube: https://youtu.be/4LkzTXD4rOk

Overrule TWA v. Hardison?

On April 18 the US Supreme Court will hear oral arguments in Groff v. DeJoy [Briefs] – which asks the Court to overrule the key holding in Trans World Airlines, Inc. v. Hardison, 432 U.S. 63 (1977).

Title VII generally prohibits an employer from discriminating against an individual “because of such individual’s * * * religion.” The statute defines “religion” to include “all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate to an employee’s or prospective employee’s religious observance or practice without undue hardship on the conduct of the employer’s business.”

In the Hardison case, the Supreme Court stated that an employer suffers an “undue hardship” in accommodating an employee’s religious exercise whenever doing so would require the employer “to bear more than a de minimis cost.”

The Hardison case was wrong, and should be overruled.

The "no more than a de minimis cost" rule was pulled out of thin air, and has no connection at all to Title VII's text.

The current Court has shown an eagerness to ensure that religious interests are treated no less favorably than secular interests.

I say Hardison R.I.P.

Webinar replay

Free replay of the webinar - 4 Pending Supreme Court employment law cases:  https://www.dropbox.com/s/1wcr7hdhnqt91xu/video1129740458.mp4

4 Pending Supreme Court employment law cases

Register now for my webinar on 4 Pending Supreme Court employment law cases.
Advance registration is required at this link:
https://us02web.zoom.us/webinar/register/WN_iKQo2dPBSU-0VCPvUT0MzQ

When: Tuesday, January 17 at 10:00 AM Pacific Time
This webinar will be about 45 minutes long.

Cases to be covered:

Glacier Northwest v. Teamsters: NLRA preemption of alleged tortious destruction of employer's property.

Fischer v. FedEx: FLSA collective actions and federal court jurisdiction.

Helix Energy v. Hewitt: FLSA overtime for highly paid supervisor.

Ohio Adj Gen v. FLRA: FLRA authority to regulate state militia labor practices.

A $15 fee helps cover my costs. Thank you.

After registering, you will receive a confirmation email containing information about joining the webinar.

Thank you!!

Ross Runkel
Arbitrator & Mediator
(503) 551-1360
www.RossRunkel.com

Specialty Healthcare returns: “Overwhelming community of interest” once again

The NLRB has returned to its prior “overwhelming community of interest” test, as set forth in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB 934 (2011), overruling PCC Structurals, 365 NLRB No. 160 (2017), and The Boeing Co., 368 NLRB No. 67 (2019). American Steel Construction, Inc., 372 NLRB No. 23 (12/14/2022) [PDF].

Where a party argues that a proposed bargaining unit must be expanded to include additional employees, the Board will place the burden on that party to show that the excluded employees share an “overwhelming community of interest” to mandate their inclusion in the bargaining unit.

The Board's majority opinion says this policy "better reflects traditional Board precedent, better achieves consistency with Supreme Court precedent, and better promotes the policies of the Act."

Two dissenting Members say "our colleagues advance no valid justification for taking this step."

NLRB expands make-whole remedies

In a major policy shift, the NLRB will now ensure that workers who are victims of labor law violations are compensated for all “direct or foreseeable pecuniary harm” suffered as a result of those unfair labor practices. Thryv, Inc., 372 NLRB No. 22 (12/13/2022) [PDF].

The standard make-whole remedy for labor law violations will now include the loss of earnings and benefits, out-of-pocket medical expenses, credit card debt, or other costs that are a direct or foreseeable result of the unfair labor practices.

The General Counsel will be required to present evidence in the compliance proceeding proving the amount of the financial harm, that it was direct or foreseeable, and that it was due to the unfair labor practice. The respondent employer or union would then have the opportunity to rebut that evidence.

This change will apply in every case in which the Board’s standard remedy would include make-whole relief for employees. The Board will apply this remedy retroactively to all cases currently pending.

Minimum wage for non-convicted incarcerated individuals?

The 9th Circuit has certified the following question to the California Supreme Court:

Do non-convicted incarcerated individuals performing services in county jails for a for-profit company to supply meals within the county jails and related custody facilities have a claim for minimum wages and overtime under Section 1194 of the California Labor Code in the absence of any local ordinance prescribing or prohibiting the payment of wages for these individuals?

Ruelas v. County of Alameda (9th Cir 11/01/2022) [PDF].

Plaintiffs are or were pretrial detainees, detainees facing deportation, or federal detainees confined in Alameda County’s Santa Rita Jail. Plaintiffs are or were performing industrial food preparation services and cleaning for defendant Aramark Correctional Services, LLC (“Aramark”), pursuant to a contract between Aramark and Alameda County. Aramark is a private, for-profit company. This contract was enabled by California Proposition 139, which legalized public-private partnerships of this kind.

Plaintiffs allege that Aramark employs detainees in the Santa Rita Jail without compensating them. Alameda County has not enacted a local ordinance providing for compensation to county detainees for services performed.

Arbitration: Manifest disregard of the law

Will a court vacate an arbitration award because it is in manifest disregard of the law? Some courts will, but not in Oregon.

After terminating him, Patrick Johnson's former employer sought a preliminary injunction enjoining him from competing with the employer, soliciting its customers, or disclosing confidential information.

However, the matter went to arbitration. The arbitration panel found that the employer failed to prove Johnson breached the employment agreement, and that the employer willfully withheld wages and made wrongful deductions from Johnson's final paycheck.

The employer sought to vacate the arbitration award, arguing that the panel exceeded its authority in that the award was in manifest disregard for the law. The trial court refused to vacate the award, and the Oregon Court of Appeals affirmed. Floor Solutions v. Johnson (Oregon Ct App 10/19/2022) [PDF].

The court rejected the employer's argument that a manifest disregard of the law standard is incorporated into ORS 36.705(1)(d).

The court said, "because the Oregon legislature adopted the [Revised Uniform Arbitration Act (RUAA)] and did not codify the manifest disregard standard as a basis to vacate an arbitration award, we conclude that the legislature's intent was consistent with the RUAA drafters' intent."

Therefore, ORS 36.705(1)(d) does not incorporate a “manifest disregard of the law” standard as a basis to find that an arbitrator or arbitration panel exceeded its authority.