BSCR Firm News/Blogs Feedhttps://www.bscr-law.com/?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10en-us21 May 2019 00:00:00 -0800firmwisehttps://blogs.law.harvard.edu/tech/rssSCOTUS Strikes Another Blow to Class-Action Claims, Favoring Individual Arbitrationhttps://www.bscr-law.com/?t=40&an=91106&format=xml&p=5258&stylesheet=blog13 May 2019Employment & Labor Law Blog<p>A divided United States Supreme Court recently handed down the latest in a series of wins for employers, manufacturers, retailers, and other businesses looking to use arbitration as a means to mitigate the risks of possible class-action litigation. This time, in <a href="https://www.supremecourt.gov/opinions/18pdf/17-988_n6io.pdf"><i>Lamps Plus, Inc. v. Varela</i></a>, the Supreme Court overturned the Ninth Circuit Court of Appeals, finding that an employer could not be compelled to arbitrate similar claims by its employees on a class-wide basis, even though its employment agreement was ambiguous as to whether the arbitration of similar claims be conducted on a class-wide basis, instead of individually.&nbsp;</p> <p><b>I.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><b>A clear, albeit controversial, trend in favor of individual arbitration</b></p> <p>Arbitration agreements, which are strongly favored under the Federal Arbitration Act (&ldquo;FAA&rdquo;), can be a powerful tool for potential class-action defendants, both to mitigate the risks of potential exposure and to make those risks more predictable.&nbsp;But a contract is only useful to the extent it can be enforced.&nbsp;Fortunately for potential defendants, there has been a string of Supreme Court decisions in recent years empowering businesses to use arbitration clauses to narrowly define the procedures by which class-wide claims can be asserted.&nbsp;</p> <p>These decisions have been controversial, and most have been decided along roughly the same ideological divide.&nbsp;But there has been a clear trend in favor of the enforceability of arbitration agreements that limit or exclude class-wide arbitration actions.</p> <p>For example, <a href="https://www.supremecourt.gov/opinions/09pdf/08-1198.pdf"><i>Stolt-Nielsen S.A. v. AnimalFeeds International Corp.</i></a> was a 2010 case in which the Supreme Court concluded that silence was no substitute for the requisite &ldquo;affirmative consent&rdquo; to class arbitration, meaning that class-wide arbitration cannot be compelled based on an agreement that is simply silent as to the availability of class-wide remedies.&nbsp;&nbsp;&nbsp;</p> <p>The following year, in <a href="https://www.supremecourt.gov/opinions/10pdf/09-893.pdf"><i>AT&amp;T Mobility LLC v. Concepcion</i></a>, the Supreme Court found that the FAA preempted a California statute providing that any class-action waiver in a consumer contract was unconscionable and, therefore, unenforceable.&nbsp;This 5-4 decision held the state statute was inconsistent with the FAA&rsquo;s &ldquo;overarching purpose&rdquo; of ensuring &ldquo;the enforcement of arbitration agreements according to their terms, so as to facilitate informal, streamlined proceedings.&rdquo;</p> <p>Then in the 2013 case of <a href="https://www.supremecourt.gov/opinions/12pdf/12-133_19m1.pdf"><i>American Express Co. v. Italian Colors Restaurant</i></a>, SCOTUS rebuffed another attempt to invalidate contracts that affirmatively waived the right to class arbitration.&nbsp;There, the Second Circuit had found a class-action waiver in American Express&rsquo;s merchant agreement to be unenforceable, on the grounds that individually arbitrating each claim would be prohibitively expensive, since the costs of the arbitration would almost always exceed the potential recovery on any one claim.&nbsp;On appeal, a divided Supreme Court found that this sort of practical analysis was beyond the courts&rsquo; authority and ran counter to the principle, embodied in the FAA and recent case law, that parties should be free to agree to arbitrate, or not, as they see fit.</p> <p>And just last year, in <a href="https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf"><i>Epic Systems Corp. v. Lewis</i></a>, the high court&mdash;once again split 5-4 along ideological lines&mdash;found that the National Labor Relations Board had overstepped its authority by finding that the National Labor Relations Act&rsquo;s protection of employee &ldquo;concerted activities&rdquo; taken for their &ldquo;mutual aid or protection&rdquo; gave employees the right to pursue class claims and displaced the FAA in interpreting arbitration agreements between employers and employees.&nbsp;Recognizing that whether to arbitrate on an individual or class-wide basis is one of the &ldquo;fundamental attributes&rdquo; of an arbitration agreement&rsquo;s character, the majority held that class-action waivers are just as enforceable in employment agreements as in any other arbitration agreement.</p> <p><b>II.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </b><b>The recent <i>Lamps Plus</i> decision</b></p> <p>This brings us to the recent <i>Lamps Plus</i> case, decided on April 24, 2019.&nbsp;It arose from a corporate data breach in which a hacker gained access to the personal financial and tax information of 1,300 company employees.&nbsp;Many of these employees had been required by the employer to sign contracts at the start of their employment, each of which included a clause requiring disputes regarding their employment to be submitted to binding arbitration.&nbsp;The arbitration language, however, was ambiguous as to whether similar claims would be arbitrated in separate proceedings or together, on a class-wide basis.</p> <p>Frank Varela was one of the employees whose personal information had been compromised in the data breach, and he filed a civil lawsuit in the Central District of California seeking to assert claims under state and federal law, both individually and as a representative of a putative class of similarly situated employees.&nbsp;The employer moved to dismiss the civil case and to compel arbitration, specifically requesting that arbitration be on an individual rather than class-wide basis.</p> <p>The trial court granted the employer&rsquo;s motion to dismiss, but its order specified that arbitration would proceed on a class-wide basis.&nbsp;The employer appealed to the Ninth Circuit, which affirmed the trial court&rsquo;s ruling, reasoning that ambiguities in the employment agreement&mdash;which was mandatory for the employees and was drafted exclusively by the employer&mdash;should be construed against the employer and in favor of the employees&rsquo; right to assert claims as a class.</p> <p>The Supreme Court granted certiorari and struck down the lower courts&rsquo; rulings.&nbsp;Chief Justice Roberts authored the majority opinion and was joined by the court&rsquo;s four other conservative-leaning justices (Thomas, Alito, Gorsuch, and Kavanaugh).&nbsp;The remaining four justices each filed dissenting opinions.</p> <p>The court accepted the Ninth Circuit&rsquo;s conclusion that the arbitration clause was ambiguous as to whether arbitration would be conducted individually or on a class-wide basis.&nbsp;Even though the agreement never specifically mentioned class-wide proceedings, some of its language&mdash;for example, its statement that arbitration would be &ldquo;in lieu of any and all lawsuits or other civil legal proceedings&rdquo;&mdash;was &ldquo;capacious enough to include class arbitrations&rdquo; as a potential remedy.&nbsp;</p> <p>But that ambiguity was not enough to force class-wide arbitration.&nbsp;Irrespective of state-law principles that ambiguous contractual language should be construed against its drafter, arbitration remains &ldquo;a matter of consent, not coercion,&rdquo; according to the majority, so there must be an &ldquo;affirmative contractual basis for concluding that the parties agreed to class arbitration.&rdquo;&nbsp;Relying heavily on the <i>Stolt-Nielsen</i> opinion discussed above, the majority ruled that without a clear expression of the parties&rsquo; intent to arbitrate on a class-wide basis, courts cannot force them to do so.&nbsp;An ambiguous contract is, by its very nature, not a clear expression of intent.&nbsp;Therefore, each employee&rsquo;s claim was subject to individual arbitration, rather than a single class-action.</p> <p>In a scathing dissent, Justice Ginsberg lamented what she sees as the Court&rsquo;s consistent use of the FAA &ldquo;to deny employees and consumers effective relief against powerful economic entities.&rdquo;&nbsp;She found it ironic for the majority to invoke &ldquo;the first principle&rdquo; that &ldquo;arbitration is strictly a matter of consent,&rdquo; when employment agreements like the one at issue here are often presented on a take-it-or-leave it basis, and she decried the &ldquo;Hobson&rsquo;s choice employees face: accept arbitration on their employer&rsquo;s terms or give up their jobs.&rdquo;&nbsp;</p> <p>Justice Sotomayor authored a dissent of her own, in which she took issue with the majority&rsquo;s characterization of class arbitration as fundamentally different from individual arbitration, characterizing it as &ldquo;simply a procedural device,&rdquo; which &ldquo;an employee who signs an arbitration agreement should not be expected to realize that she is giving up.&rdquo;</p> <p>Justice Kagan&rsquo;s dissent focused on the authorship of the employment agreement, arguing that it should be construed against its drafter&mdash;the employer&mdash;under general principles of contract law adopted in every state, which are not abrogated by the FAA.</p> <p>Justice Breyer also authored a dissent, focused largely on the threshold question of whether the order compelling arbitration a &ldquo;final&rdquo; order was vesting the appellate courts with jurisdiction even to hear the appeal.</p> <p>This case fits the mold of recent Supreme Court cases addressing class arbitration, which have consistently affirmed the validity of arbitration agreements and pushed back on efforts to limit their applicability or enforceability.&nbsp;Although the dissenting opinions evidence just how controversial the use of arbitration clauses remains, the majority opinion further entrenches arbitration agreements as a bulwark against class-action liability.&nbsp;Given the current makeup of the Supreme Court, the trend is unlikely to be reversed any time soon.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Missouri Supreme Court: There Must be Sufficient Evidence at Trial to Support Each Alternative of a "Disjunctive" Jury Instructionhttps://www.bscr-law.com/?t=40&an=89069&format=xml&p=5258&stylesheet=blog07 Mar 2019Employment & Labor Law Blog<p>The Missouri Supreme Court's recent holding in<i> Kader v. Bd. of Regents</i> underscores the importance of ensuring that each alternative of a disjunctive verdict directing instruction is supported by sufficient evidence at trial. Because the Court found there was not substantial evidence to support each alternative of the circuit court's disjunctive instructions, the instructions were erroneous and prejudicial. As a result, it reversed the $2.5 million verdict in favor of plaintiff Kader, a former Harris-Stowe State University (&quot;HSSU&quot;) professor, who filed claims of national origin discrimination and retaliation against HSSU under the Missouri Human Rights Act.</p> <p>Kader, an Egyptian national, came to the United States in 1999 to pursue her graduate education.&nbsp;After working on the faculty at HSSU while completing her doctorate, she was promoted to assistant professor upon completion of her studies when she received her degree.&nbsp; In a performance review several years later, Kader believed she received lower ratings because of her race, religion and national origin and filed a discrimination complaint with HSSU. &nbsp;</p> <p>Plaintiff worked at HSSU under a J-1 visa, which is a non-immigrant visa for individuals approved to participate in work and study based exchange visitor programs. &nbsp; A J-1 visa requires an employer sponsor and the facility where she attended graduate school originally sponsored her visa from 2007 until 2010.&nbsp; HSSU supplied information needed to maintain her visa while she was on the HSSU faculty and indicated it would assist her with obtaining a new visa when her J-1 expired.&nbsp; Typically, exchange visitors on J-1 visas return to their home countries for at least two years when their visas expire and then apply for a new visa if they decide to return.&nbsp; Kader did not want to return to Egypt so she filed for a waiver of the two year waiting period to obtain an H1-B visa and continue teaching at HSSU.&nbsp;</p> <p>While waiting to learn if she received a waiver of the two year waiting period, she applied for an O-1 extraordinary person visa as an alternate means to obtain work authorization.&nbsp; She requested HSSU provide documentation to supplement her O-1 application, which HSSU supplied.&nbsp; When Kader had not heard about whether her visa was granted, she contacted the United States Citizenship and Immigration Services and learned it had requested additional information from HSSU, but had not received a response.&nbsp; Two days before her J-1 visa expired, plaintiff contacted HSSU about her O-1 application and the request for additional information.&nbsp; HSSU denied receiving the request.&nbsp; The O-1 application was then denied and HSSU did not appeal the denial.&nbsp;</p> <p>Kader then did not receive the waiver she sought in conjunction with her H1-B visa request before her J-1 visa expired.&nbsp; Because she no longer had J-1 status, she was required to leave the U.S. within 30 days unless she obtained another visa.&nbsp;HSSU notified her that her contract for the next academic school year would not be renewed because she lacked a valid visa.</p> <p>Kader filed suit against HSSU, alleging race and national origin discrimination and retaliation under the MHRA.&nbsp;The jury returned a verdict in plaintiff's favor on retaliation and national origin discrimination for $750,000 in actual damages and $1.75 million in punitive damages. HSSU appealed, asserting that two disjunctive jury instructions were erroneous and prejudicial.&nbsp; Specifically, HSSU argued that the instructions permitted the jury to find HSSU liable for conduct that is not actionable under the MHRA.</p> <p>During trial, the court instructed the jury to rule in plaintiff's favor on her national origin discrimination claim if: (1) the jury found HSSU failed to do one or more of five listed acts, including HSSU did not appeal the denial of the O-1 visa petition; (2) plaintiff's national origin or discrimination complaints were a contributing factor to HSSU's failure to do any of those acts; and (3) such failure damaged plaintiff.</p> <p>Similarly, the other disjunctive jury instruction at issue on the retaliation claim also instructed the jury that it must return a verdict for plaintiff if (1) plaintiff made complaints of discrimination; (2) HSSU failed to do any one of five acts, one of which was not appealing the denial of the O-1 visa petition; (3) plaintiff's complaints of discrimination were a contributing factor in defendant's failure to do one of the five acts; and (4) defendant's actions directly cause or contributed to plaintiff's damages.&nbsp;</p> <p>The Missouri Supreme Court emphasized that for disjunctive verdict directing instructions to be appropriate, each alternative must be supported by substantial evidence.&nbsp; Such an instruction is prejudicial when substantial evidence does not support each disjunctive alternative because there is no way to determine which theory the jury chose.&nbsp; Therefore, there must have been substantial evidence at trial that HSSU's failure to appeal the denial of plaintiff's O-1 visa application constituted an unlawful employment practice under the MHRA.&nbsp; Because there was no evidence, the circuit court erred by including a disjunctive instruction that HSSU's failure to seek an appeal of the O-1 visa application in its disjunctive jury instructions.</p> <p>The outcome in this case serves as an important reminder to defendants that if the plaintiff has failed to introduce sufficient evidence at trial of some element of claimed unlawful conduct, any disjunctive jury instruction proffered by the plaintiff that includes the unsupported claim should be challenged.&nbsp;</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Missouri Supreme Court Compels Arbitration, Finding Adequate Consideration for Arbitration Agreement with At-Will Employeehttps://www.bscr-law.com/?t=40&an=88949&format=xml&p=5258&stylesheet=blog04 Mar 2019Employment & Labor Law Blog<p>In <i>Soars v. Easter Seals Midwest</i>, 563 S.W.3d 111 (Mo. banc 2018), the Missouri Supreme Court ordered that at-will employee&rsquo;s case be arbitrated and denied the employee&rsquo;s challenge to the validity of the arbitration agreement as a whole.</p> <p>As a condition of employment with Easter Seals Midwest (ESM), a charitable organization, each new, at-will employee is required to sign an arbitration agreement.&nbsp;The arbitration agreement provides that, as consideration for employment, the employee will submit all disputes and claims arising out of the employment to binding arbitration.&nbsp;In turn, ESM also agrees to submit all disputes and claims arising out of the employment to binding arbitration.&nbsp;The ESM arbitration agreement also included a delegation clause providing that the arbitrator and not any court had the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of the arbitration agreement.&nbsp;</p> <p>Plaintiff Lewis Soars signed the arbitration agreement as a condition of his at-will employment with ESM, and three months later.&nbsp;ESM terminated his employment after he refused to participate in an internal investigation involving accusations against him of abuse or neglect of ESM&rsquo;s clients.&nbsp;In response, he filed suit against ESM in circuit court for wrongful discharge and race discrimination.&nbsp;ESM filed a motion to compel arbitration.&nbsp;Plaintiff argued the arbitration agreement and delegation clause lacked consideration and mutuality and were unconscionable.&nbsp;The circuit court denied ESM&rsquo;s Motion to Compel Arbitration, and the Court of Appeals affirmed.</p> <p>The Supreme Court, however, reversed.&nbsp;It held that arbitration must be compelled if the parties signed an arbitration agreement that contains a valid delegation clause mandating that the arbitrator has &ldquo;exclusive authority to decide threshold issues of interpretation, applicability, enforceability, or formation.&rdquo;&nbsp;Whether or not the arbitration agreement as a whole is valid is for the arbitrator to determine so long as the delegation provision, standing alone, is valid.&nbsp;In this case, the Court found that in the delegation provision both parties mutually agreed to arbitrate all threshold questions of arbitrability.&nbsp;&ldquo;Because neither ESM nor Soars retains any unilateral right to amend the delegation clause nor avoid its obligations, the delegation clause is bilateral in nature and consideration is present.&rdquo;&nbsp;&nbsp;</p> <p>Significantly, and surprisingly, this is the Missouri Supreme Court&rsquo;s first opinion holding that referral to an arbitrator should occur, notwithstanding a party&rsquo;s challenge to the validity of the arbitration agreement as a whole.&nbsp;While the United States Supreme Court has made this same ruling numerous times over many decades, this was the Missouri Supreme Court&rsquo;s first occasion to consider the issue.</p> <p>Notably, the Court found that an initial offer of at-will employment was sufficient consideration for the contractual promise to arbitrate claims.&nbsp;This was a major point of disagreement for the dissenting justice, who would have concluded that the arbitration agreement was unenforceable because at-will employment, which by its very nature is no employment contract at all, can provide no legal consideration for the arbitration agreement.&nbsp;According to the dissent, because a fundamental component of the at-will employment relationship is the ability for either party to terminate the relationship at any time, there was no valid contract to support the arbitration agreement or the delegation provision.&nbsp;</p> <p>Going forward, the majority&rsquo;s decision should provide comfort to employers that, under Missouri law, their arbitration agreements with at-will new-hires are enforceable and may include provisions placing all claims and controversies into the hands, in the first instance, of the arbitrator, including all objections to the existence, interpretation, application, and enforceability of the arbitration agreement itself.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Courts favor the Federal Arbitration Act, but some workers are exempt.https://www.bscr-law.com/?t=40&an=87344&format=xml&p=5258&stylesheet=blog18 Jan 2019Employment & Labor Law Blog<p>In New Prime, Inc. v. Oliveira, petitioner New Prime Inc. was an interstate trucking company, and respondent Dominic Oliveira was one of its drivers. Oliveira worked under an operating agreement that called him an independent contractor and contained a mandatory arbitration provision. When Oliveira filed a class action alleging that New Prime denied its drivers lawful wages, New Prime asked the court to invoke its statutory authority under the Federal Arbitration Act to compel arbitration.</p> <p>Oliveira countered that the court lacked authority, because &sect;1 of the Act excepts from arbitration disputes involving &ldquo;contracts of employment&rdquo; of certain transportation workers. New Prime insisted that any question regarding &sect;1&rsquo;s applicability belonged to the arbitrator alone to resolve, or, assuming the court could address the question, that &ldquo;contracts of employment&rdquo; referred only to contracts that establish an employer-employee relationship and not to contracts with independent contractors. The District Court and First Circuit agreed with Oliveira, and the Supreme Court <a href="http:// https://www.supremecourt.gov/opinions/18pdf/17-340_o7kq.pdf">affirmed</a>, holding that a court should determine whether a &sect;1 exclusion applies before ordering arbitration.</p> <p>A court&rsquo;s authority to compel arbitration under the Act does not extend to all private contracts, no matter how clearly the contract expresses a preference for arbitration. In relevant part, &sect;1 states that &ldquo;nothing&rdquo; in the Act &ldquo;shall apply&rdquo; to &ldquo;contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.&rdquo;</p> <p>For a court to invoke its statutory authority under the Act to stay litigation and force arbitration, it must first know if the parties&rsquo; agreement is excluded from the Act&rsquo;s coverage by the terms of &sect;1. This sequencing is significant, because it means the court and not the arbitrator decides this issue, unlike other issues, which may be delegable to the arbitrator.</p> <p>The issue for the Supreme Court thus became whether the Act&rsquo;s term &ldquo;contract of employment&rdquo; referred to any agreement to perform work or applied strictly to contracts of employment. The Court held that Oliveira&rsquo;s agreement with New Prime falls within &sect;1&rsquo;s exception.</p> <p>The unanimous opinion relied on the Act&rsquo;s original meaning for its decision.&nbsp; Citing dictionaries, statutes, and rulings from the era, Justice Gorsuch concluded that &ldquo;contract of employment&rdquo; was understood to encompass &ldquo;work agreements involving independent contractors.&rdquo;&nbsp;At the time of the Act&rsquo;s adoption in 1925, the phrase &ldquo;contract of employment&rdquo; was not a term of art, and dictionaries tended to treat &ldquo;employment&rdquo; more or less as a synonym for &ldquo;work.&rdquo; Contemporaneous legal authorities provide no evidence that a &ldquo;contract of employment&rdquo; necessarily signaled a formal employer-employee relationship. Evidence that Congress used the term &ldquo;contracts of employment&rdquo; broadly can be found in its choice of the neighboring term &ldquo;workers,&rdquo; a term that easily embraces independent contractors.</p> <p>New Prime also made a policy argument that the Court should order arbitration to further Congress&rsquo; effort to counteract judicial hostility to arbitration and establish a favorable federal policy toward arbitration agreements. Justice Gorsuch stated that courts, however, are not free to pave over bumpy statutory texts in the name of more expeditiously advancing a policy goal. Rather, the Court should respect &ldquo;the limits up to which Congress was prepared&rdquo; to go when adopting the Arbitration Act.</p> <p>Finally, the Court declined to address New Prime&rsquo;s suggestion that it order arbitration anyway under its inherent authority to stay litigation in favor of an alternative dispute resolution mechanism of the parties&rsquo; choosing.</p> <p>Justice Ginsburg, in a concurring opinion, explicitly agreed with the Court&rsquo;s unanimous opinion that words should be interpreted as taking their ordinary meaning at the time Congress enacted the statute.&nbsp; However, she also reasoned that Congress may design legislation to govern changing times and circumstances, perhaps foreshadowing future disputes between judicial philosophies.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Eighth Circuit Refuses to Punish Employer for History of Granting Special Treatment to Disabled Employee with Poor Attendance Recordhttps://www.bscr-law.com/?t=40&an=86930&format=xml&p=5258&stylesheet=blog08 Jan 2019Employment & Labor Law Blog<p>While the Americans with Disabilities Act requires employers to make reasonable accommodations for the mental and physical limitations of otherwise qualified employees with a disability, it does not require employers to set aside their established attendance policy to accommodate disabled employees who simply cannot reliably and regularly make it to work. The recent Eighth Circuit case of <i>Lipp v. Cargill Meat Solutions Corporation</i> demonstrates this principle.</p> <p>Sheena Lipp worked for 19 years at a Cargill meat processing facility in Ottumwa, Iowa, until she was terminated for absenteeism in November 2014.&nbsp;For most of her employment, she suffered from an incurable lung disease known as eosinophilic granuloma.&nbsp;For the final two years of her employment, this condition limited her ability to work in several ways.&nbsp;She required lifting assistance, limited working hours, and a clean working environment.&nbsp;But most notably also suffered from &ldquo;flare-ups&rdquo; that would require her to take off work for a few days at a time, two to four times a year.&nbsp;</p> <p>Cargill accommodated all of Ms. Lipp&rsquo;s needs, despite its written attendance policy allowing only six &ldquo;unplanned&rdquo; absences (i.e. sick days, personal business, etc.), if reported via an automated call-in system.&nbsp;After those six unplanned absences, a progressive disciplinary system existed, which culminated with termination after the ninth unplanned absence.&nbsp;In the case of medical absences, Cargill&rsquo;s policy was that employees &ldquo;may be required&rdquo; to provide a doctor&rsquo;s note or other verification upon their return to work.</p> <p>Ms. Lipp&rsquo;s ability to satisfy the attendance requirements of her job was further compromised in early 2014, when she was forced to take a nine-month leave of absence (originally planned to be only a few weeks) to care for her ailing mother.&nbsp;The first twelve weeks of leave were protected under the Family and Medical Leave Act.&nbsp;Beyond that, Cargill voluntarily accommodated Ms. Lipp&rsquo;s request for additional leave, during which time she called the automated phone system daily to report her absences.</p> <p>When she returned to work in October 2014, Ms. Lipp was presented with a series of written disciplinary notifications, indicating that she had accumulated 194 unplanned absences and was being placed on a &ldquo;Last Chance&rdquo; attendance policy.&nbsp;&ldquo;Employee needs to understand,&rdquo; the notices stated, &ldquo;that any call-ins, lates, or leave early without authorization will violate this last chance agreement and will terminate her employment.&rdquo;&nbsp;Ms. Lipp refused to sign any of the notifications but was allowed to return to work anyway.</p> <p>Two weeks later, Ms. Lipp called the automated phone system and reported that she would be absent for &ldquo;vacation.&rdquo;&nbsp;Her testimony was that she must have mistakenly keyed the wrong entry on the phone system, because her absence was actually due to a &ldquo;flare-up&rdquo; of her lung condition.&nbsp;When she returned to work, she was terminated, despite explaining that her absence was for medical reasons, not vacation.&nbsp;Although she eventually provided medical documentation of her flare up, she did not do so until about three months after her termination.</p> <p>She filed suit for disability discrimination under the ADA, but the Northern District of Iowa granted summary judgment in Cargill&rsquo;s favor.&nbsp;Although the parties agreed that Ms. Lipp qualified as a disabled employee under the ADA, only &ldquo;qualified individuals&rdquo; can assert a claim for disability discrimination.&nbsp;A &ldquo;qualified individual&rdquo; is one &ldquo;who, with or without reasonable accommodation, can perform the essential functions&rdquo; of his or her job.&nbsp;42 U.S.C. &sect; 12111(8).&nbsp;An employer&rsquo;s written policies&mdash;including attendance policies&mdash;are relevant guidance as to what constitutes an essential function of employment.&nbsp;Cargill insisted Ms. Lipp not a &ldquo;qualified individual&rdquo; under the Act, because she could not &ldquo;regularly and reliable attend work, an essential function of her employment.&rdquo;&nbsp;On appeal, the Eighth Circuit agreed.</p> <p>The appellate court relied on a long line of ADA cases holding that &ldquo;regular and reliable attendance is a necessary element of most jobs,&rdquo; and that &ldquo;the ADA does not require employers to provide an unlimited absentee policy.&rdquo;&nbsp;Ms. Lipp argued that her 195 unplanned absences in 2014 were not excessive, since they were authorized by the employer.&nbsp;The court was unconvinced, noting that &ldquo;persistent absences from work can be excessive, even when the absences are with the employer&rsquo;s permission.&rdquo;&nbsp;</p> <p>Ms. Lipp also argued that Cargill was required to grant her additional time off for &ldquo;flare-ups&rdquo; after her return from the extended leave of absence, as a reasonable accommodation under the ADA&mdash;pointing out that Cargill had always been willing to do so in the past.&nbsp;The court rejected this argument, holding that even though medical leave of absence &ldquo;might, <b><i>in some circumstances</i></b>, be a reasonable accommodation,&rdquo; an accommodation is not reasonable if it requires the employer to set aside the essential functions of the job, including regular and reliable attendance (emphasis supplied by the court).</p> <p>As for the past pattern of granting Ms. Lipp leave for &ldquo;flare-ups,&rdquo; the Court was unwilling to punish Cargill for its history of accommodating Ms. Lipp&rsquo;s condition: &ldquo;If an employer bends over backwards to accommodate a disabled worker, it must not be punished for its generosity by being deemed to have conceded the reasonableness of so far-reaching an accommodation.&rdquo;&nbsp;&ldquo;To hold otherwise,&rdquo; the opinion concluded, &ldquo;would punish Cargill for giving Lipp another chance instead of terminating her employment&rdquo; earlier.</p> <p>This case offers lessons for employers facing requests for disability accommodations or potential ADA claims.&nbsp;First, there is a limit to what is a <b><i>reasonable</i></b> accommodation for absenteeism.&nbsp;There is no bright-line rule for how much leeway a disabled worker must be given, but if an employee&rsquo;s disability keeps her away from work so often that she cannot meet the basic requirements of her employment, she is not legally &ldquo;qualified&rdquo; for the job under the ADA.&nbsp;Second, employers should not live in fear that they will be punished for good behavior.&nbsp;As this case demonstrates, past acquiescence to a disabled employee&rsquo;s request for special treatment should not be used to set some new standard for what accommodations are &ldquo;reasonable&rdquo; under the ADA.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=1010th Circuit Declares Adverse Employment Action Required For Failure To Accommodate Claimshttps://www.bscr-law.com/?t=40&an=86073&format=xml&p=5258&stylesheet=blog11 Dec 2018Employment & Labor Law Blog<p>The Tenth Circuit was tasked with evaluating whether or not an adverse employment action is an essential element of a failure to accommodate action under the American Disabilities Act (ADA). In a divided opinion, the court said Yes.&nbsp;</p> <p>In <i>Exby-Stolley v. Board of County Commissioners, </i>plaintiff worked as a county health inspector and her job required her to inspect restaurants, bars, other places that handle food, interview employees and observe safety practices.&nbsp;While on the job, plaintiff broke her arm and required two surgeries.&nbsp;Because of her injury, plaintiff had to use makeshift devices to assist her and she could not complete the number of inspections required for her position.</p> <p>The court noted there were two very different versions of the efforts to accommodate plaintiff.&nbsp;Plaintiff alleged that she suggested various accommodations that were rejected by her supervisors.&nbsp;This resulted in her supervisor telling her to resign.&nbsp;The County alleged that plaintiff requested that a new position be created for her piecing together various tasks from her job and other positions.&nbsp;The County considered it unfair to take tasks from fellow employees to create a new job for plaintiff.&nbsp;Plaintiff resigned when she was told the County would not provide job she requested. &nbsp;</p> <p>Plaintiff filed suit alleging that the County violated the ADA by failing to reasonably accommodate her disability.&nbsp;The Court of Appeals recited the familiar proposition that &ldquo;failure to accommodate&rdquo; claims are actionable under the ADA, but then turned to the question of whether proof of an adverse employment action is an essential element of such claims; and whether the plaintiff in this case had in fact suffered an adverse employment action.&nbsp;The court explained at length that although the language &ldquo;adverse employment action&rdquo; does not appear in the ADA, it is well established in judicial opinions.&nbsp;Furthermore, the court will not consider a mere inconvenience to accommodating an individual, there must be a material alteration in a term, condition or privilege of employment.</p> <p>The Court rejected the dissenting judge&rsquo;s view that an &ldquo;adverse employment action&rdquo; was not essential, as having relied on dicta &ldquo;of the weakest sort&rdquo;, which it viewed as contrary to the weight of authority on this subject.&nbsp;The majority further concluded that the record showed Plaintiff had permission to continue to perform her job with some minor inconveniences or alterations in how she performed the work, but that she declined to do so, and insisted on more substantial accommodations. The Court thus held that the &ldquo;inconveniences and minor alterations&rdquo; of job responsibilities required of the plaintiff did not rise to the level of an adverse employment action &nbsp;</p> <p>This <a href="https://www.ca10.uscourts.gov/opinions/16/16-1412.pdf">ruling</a> from the Tenth Circuit ups the ante for plaintiffs asserting a failure to accommodate claim.&nbsp;There must be a material and significant impact on the employee.&nbsp;Inconveniences and minor alterations of job responsibilities will not suffice.&nbsp;</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10At-Will Employee Properly Paid Commission as Monthly Drawhttps://www.bscr-law.com/?t=40&an=86089&format=xml&p=5258&stylesheet=blog29 Nov 2018Employment & Labor Law Blog<p>Recently, the Southern District Court of Appeals <a href="https://www.courts.mo.gov/file/SD/Opinion_SD35159.pdf ">affirmed</a> the trial court&rsquo;s determination in a bench tried case on an employee&rsquo;s claim for what he described as unpaid commissions. In affirming the trial court&rsquo;s Judgment, the court of appeals made clear that Missouri law allows an employer to unilaterally modify the terms of an at-will employee&rsquo;s compensation.&nbsp;However, the facts of this case show that the employer did not fail to pay earned commissions, but rather, due to the specific compensation arrangement, plaintiff had drawn against any commissions he had earned.&nbsp;</p> <p>Plaintiff began working for Dennis Oil in January 2010, on a trial basis and had specific terms of compensation which involved 8% commission on profit from new sales plus a $550 per week salary.&nbsp;He also was to be paid 5% commission on profit from existing sales, and provided a company truck and phone.&nbsp;Employee did not dispute the amount or calculation of his compensation during the trial period.&nbsp;</p> <p>Effective June 1, 2010, and after the trial had expired, the employer unilaterally changed the terms such that the employee received a guaranteed draw of $2,333.33 per month, which was to be drawn against the employee&rsquo;s commissions to be earned.&nbsp;The employee also was to receive commissions of 5% on profits earned by employer on existing customer accounts, as well as commissions of 8% on profits earned by employer on newly-acquired customer accounts.&nbsp;During the bench trial, the employer&rsquo;s manager explained this to be &ldquo;draw against commissions&rdquo;, which meant that if the employee earned commissions that exceeded the guaranteed draw amount of $2,333.33 per month, then he would be paid the excess.&nbsp;However, if the employee did not clear that guaranteed amount, only that amount would be paid.&nbsp;The employer made no attempt to recoup payments to the employee for months where his commissions fell short of the guaranteed draw amount.</p> <p>It is well settled that where sales have been fully consummated, commissions are considered due and owing, even if the employee is terminated before the scheduled payout date.&nbsp;Earned commissions, like salary or hourly pay, are &ldquo;wages&rdquo; that must be paid, even if the employee is an employee-at-will. &nbsp;Here, however, the Southern District Court of Appeals had to enlighten plaintiff that his simply was not a case in which his employer had failed to pay commissions he had earned.&nbsp;</p> <p>This case demonstrates the potential confusion which can arise if counsel retained does not have the experience needed in the area of employment law.&nbsp;At Baker Sterchi we pride ourselves in providing clients with experience in all the areas of law in which we practice.&nbsp;Employment, labor, and wage-hour law are certainly no exceptions.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Adding to a Circuit Split, the Tenth Circuit Rules that Arbitrators May Determine Whether Classwide Arbitration is Allowedhttps://www.bscr-law.com/?t=40&an=80185&format=xml&p=5258&stylesheet=blog13 Sep 2018Employment & Labor Law Blog<p>In August 2018, the Tenth Circuit Court of Appeals <a href="https://www.ca10.uscourts.gov/opinions/17/17-1013.pdf ">decided </a><i>Dish Network L.L.C. v. Ray</i>, an important ruling in the field of arbitration clauses and their effect on potential class action litigation. The Tenth Circuit specifically addressed the question of who should determine whether an arbitration clause allows classwide arbitration: a court or an arbitrator?</p> <p>While the contract at issue and its accompanying arbitration clause did not expressly grant the right or ability to apply arbitration on a classwide basis, the Court concluded that the arbitrator appropriately interpreted the broad language of the contract as authorizing classwide arbitration.&nbsp;The Tenth Circuit cited the contract&rsquo;s adoption of American Arbitration Association rules, granting arbitrators the power to determine their own jurisdiction and scope of authority.&nbsp;The Court reasoned that this explicit adoption of the AAA rules was clear and unmistakable evidence that the parties intended to empower an arbitrator to determine whether classwide arbitration of a dispute is permitted.</p> <p>Through the <i>Ray</i> decision, the Tenth Circuit cast its vote in a growing circuit split.&nbsp;Now, the Tenth, Second, and Eleventh Circuits have ruled that an arbitrator may determine whether or not an arbitration clause permits classwide litigation.&nbsp;The Third, Fourth, Sixth, and Eighth Circuits have reached opposite conclusions.&nbsp;The Circuits that reject an arbitrator&rsquo;s authority to determine whether classwide arbitration is allowed have held that adoption of AAA rules within the underlying contract is not sufficiently clear or unmistakable so as to bind the parties to class arbitration.&nbsp;The developing circuit split has turned largely upon the tension between explicit contract language, and the intent that can be implied from the adoption of AAA rules and the explicit content of those rules.</p> <p>As a growing number of circuits reach opposite conclusions on the availability of classwide arbitration through the adoption of AAA rules, it is imperative that parties entering arbitration agreements be aware of whether or not the circuit governing the agreement has ruled on the issue.&nbsp;Parties should also consider spelling out their intent that classwide arbitration either is or is not permitted under the contract, thus removing any uncertainty.&nbsp;Clear and unequivocal language remains the best medicine to prevent against the unintended consequences of seemingly innocuous provisions within an arbitration agreement or clause.&nbsp;While this circuit split continues to grow, it seems only a matter of time before the Supreme Court of the United States fully considers and resolves this growing issue.&nbsp;</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10Missouri Voters Overwhelmingly Reject "Right-to-Work" Lawhttps://www.bscr-law.com/?t=40&an=79540&format=xml&p=5258&stylesheet=blog08 Aug 2018Employment & Labor Law Blog<p>While we regularly report to our readers on significant case law developments in the labor and employment field, the most dramatic developments in Missouri, over the past year, have played out in the legislative arena.</p> <p>Last year, with a Republican governor and Republican-majority legislature, two major pieces of labor and employment law legislation were passed. One enacted major changes in the Missouri Human Rights Act, revising its terms to <b>largely</b> parallel those of their equivalent federal anti-discrimination statutes.&nbsp;(Over the years, Missouri courts had held that the MHRA had considerably broader reach than federal statutes like Title VII, the ADEA, and the ADA.)&nbsp;The other was the enactment of a right-to-work law that was signed by former Governor Greitens, which would have made Missouri the 28th right-to-work state.&nbsp;The latter result was short-lived, as union supporters gathered enough signatures to keep it from going into effect pending the results of a statewide referendum.</p> <p>The rejection of so-called &ldquo;Proposition A&rdquo; became a major national priority for organized labor, which contributed substantial funds to the cause. &nbsp;And Missouri voters, by a 2-to-1 margin, have effectively blocked the right-to-work law.&nbsp;</p> <p class="MsoNormal">In a right-to-work state (like Kansas), employees in unionized workplaces are permitted to opt out of both union membership and the payment of union fees of any kind.&nbsp;In states without right-to-work laws, employees at unionized workplaces don&rsquo;t have to be dues-paying union members, but are required to pay &ldquo;agency fees.&rdquo; to cover the union&rsquo;s cost of negotiating employment contracts that affect all bargaining unit workers.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10U.S. Supreme Court, in a 5-4 Ruling, Upholds Employers' Use of Class Action Waivers in Employment Agreementshttps://www.bscr-law.com/?t=40&an=76529&format=xml&p=5258&stylesheet=blog21 May 2018Employment & Labor Law Blog<p>In a closely watched and long-awaited ruling, the U.S. Supreme Court on May 21st held that it is lawful for an employer, in an agreement with an employee, to provide that all disputes be resolved through one-on-one arbitration between the company and the employee. Accordingly, an employee may waive his right to bring his claims in a class action or collective action.</p> <p>The decision, in a case titled <i><a href="https://www.supremecourt.gov/opinions/17pdf/16-285_q8l1.pdf">Epic Systems Corp. v. Lewis</a></i>, resolved a split in authority between Circuit Courts of Appeal, and actually resolved three recent separate appellate court cases with very similar facts.&nbsp;(The other two cases involved employers Ernst &amp; Young, and Murphy Oil USA.)&nbsp;In each instance, the employee had entered into an employment agreement with his employer, which referred disputes to arbitration, and which contained a class action waiver clause.&nbsp;In the <i>Murphy Oil </i>case, the Court of Appeals had upheld the arbitration/class waiver clause.&nbsp;In <i>Epic Systems </i>and <i>Ernst &amp; Young </i>cases, the Courts of Appeal had denied enforcement of those clauses.</p> <p>At issue was the friction between, on one hand, a consistent line of recent Supreme Court cases upholding arbitration clauses with class waivers, under the Federal Arbitration Act (e.g. <i>Concepcion, Italian Colors, Kindred Nursing</i>); and a doctrine first espoused by the National Labor Relations Board in 2012, in the <i>D.R. Horton </i>case, holding that an agreement purporting to waive class action rights was unenforceable, because it encumbered the fundamental right under Section 7 of the National Labor Relations Act for employees to engage in concerted activity for their mutual aid or protection.</p> <p>The majority opinion, written by Justice Gorsuch, rejected the employees&rsquo; argument about Section 7 rights, holding that the NLRA &ldquo;does not express approval or disapproval of arbitration. It does not mention class or collective action procedures. It does not even hint at a wish to displace the Arbitration Act&mdash;let alone accomplish that much clearly and manifestly, as our precedents demand.&rdquo;&nbsp;The opinion further observed that unlike the NLRA, various other federal statutes contain very specific language about the manner in which disputes should be resolved, and &ldquo;when Congress wants to mandate particular dispute resolution procedures it knows exactly how to do so.&rdquo;</p> <p>This is a very important ruling for employers.&nbsp;An employer considering whether to resolve disputes with its employees through arbitration might take be tempted to take a narrow view in weighing whether arbitration is worth the bother, compared to having disputes resolved in court.&nbsp;The arguments against arbitration go roughly as follows: &nbsp;It is no longer cheaper than court.&nbsp;Discovery is allowed in arbitration.&nbsp;Cases take a long time to resolve.&nbsp;Arbitration fees can be substantial.&nbsp;And arbitrators are more likely to &ldquo;split the baby&rdquo;, and issue a compromise ruling in a case, even where the employer&rsquo;s position is meritorious.</p> <p>But this type of analysis overlooks an important additional factor.&nbsp;For it is now established law that an employment agreement containing an arbitration clause can preclude a wage-hour claim or discrimination claim from being brought in court as a collective action or class action.&nbsp;Employers who have been &ldquo;on the fence&rdquo; about whether to utilize arbitration agreements with class waiver clauses, because of the legal uncertainty about their enforceability, now have their answer.&nbsp;And if avoidance of class actions is a high priority for the company, now would be a good time to take action.</p>https://www.bscr-law.com?t=39&anc=368&format=xml&directive=0&stylesheet=rss&records=10