Plaintiff’s complaint alleged that the female supervisor touched her breasts (she was “subjected to homosexual advances”) on three occasions between mid-April and mid-September 2005 (the supervisor allegedly brushed up against her breasts, rubbed up against her breasts in a hallway, and walked up behind her while she was seated and felt her breasts).  Plaintiff alleged she was uncomfortable, she complained to her supervisor and to Human Resources (but no action was taken), and attempted to avoid going into the supervisor’s office but was required to do so when called.

The Court stated the district court’s analysis that “[e]ven drawing all inferences in [plaintiff’s] favor, the contact may have been purely accidental” was flawed.  Because the supervisor repeatedly went out of her way to make contact with plaintiff, always made contact with the same part of plaintiff’s body, never apologized, and ‘rubbed up against’ and ‘felt’ plaintiff’s breasts, the touchings could not be considered “accidental.”  The Court stated “… the interpretation of whether [the touchings] were accidental or not – and whether or not they were because of [plaintiff’s] sex – were issues of fact for the jury to decide, not issues for the court to resolve as a matter of law.”

Although plaintiff stated that she did not attribute any suggestive or sexual remarks to the supervisor, the Court stated “if the claim were that a supervisor – of either gender – stated to a female employee ‘I want to feel your breasts,’ … a jury could easily infer that that stated desire was because of the employee’s sex … A district court could not properly rule as a matter of law that that gender-specific harassment was not because of the employee’s sex.”

The bottom line as stated by the Court: “the repeated touching of intimate parts of an unconsenting employee’s body is by its nature severely intrusive and cannot properly be characterized as abuse that is minor.”

The case is Redd v. New York State Division of Parole and can be found here.

The simple rule is employers cannot control an employee’s time during a meal period: “The worker must be free to attend to any personal business he or she may choose during the unpaid meal period … Employers must afford employees uninterrupted half-hour periods in which they are relieved of any duty or employer control and are free to come and go as they please.”  If an employer fails to provide a meal period under this standard, the employee is owed a one-hour wage premium under Cal. Lab. Code §226.7.  However, if the employer provides a meal period and relinquishes control but the employee chooses to work, if the employer knows or reasonably should have known about the work, the employee must be paid straight time wages for the time worked but not the one-hour wage premium.

The Court also analyzed rest periods.  Employees are entitled to a paid 10 minute rest period for shifts between 3.5 and 6 hours, and to another paid 10 minute rest period for shifts between 6 and 10 hours.  Rest periods do not have to be provided before meal periods as the plaintiffs argued.

Finally, the Court discussed whether the underlying meal and rest period claims were suitable for class treatment.  The Court reversed in part, remanded in part, and affirmed in part the Court of Appeal’s rejection of class treatment – so there is more to come in the future.  Bottom line, the Court concluded that the plaintiffs had identified a suitable rest period theory for class recovery.  With respect to meal period class claims, the Court remanded in light of its ruling.  The Court affirmed the Court of Appeal’s decision to vacate class certification relating to off-the-clock work.

The decision is Brinker Restaurant Corp. v. Superior Court (Hohnbaum), S166350 and it can be found here.

On February 21, 2012, NJDLWD fixed the mistake and fully restored the “inside sales” exemption in New Jersey. Under the current New Jersey wage and hour regulations, an “administrative” employee is someone whose (1) primary duty is sales, (2) total compensation is made up of at least 50% commissions, and (3) total compensation is at least $400 a week.

New Jersey employers relying on the “inside sales” exemption should take a careful look at whether their commissioned sales employees fit into this exemption under both state and federal law.

According to New York’s Appellate Division, First Department, although New York’s Civil Practice Laws and Rules are silent on the subject: “you do, but you can try to shift the costs later.”

In U.S. Bank National Association v. GreenPoint Mortgage Funding Inc., see here, the Court held:

[Zubulake v. UBS Warburg LLC, 220 FRD 212] presents the most practical framework for allocating all costs in discovery, including document production and searching for, retrieving and producing ESI.  As noted, Zubulake requires, consistent with the Federal Rules of Civil Procedure, the producing party to bear the initial cost of searching for, retrieving and producing discovery, but permits the shifting of costs between the parties.

The factors courts consider when deciding to shift costs are as follows: (1) the extent to which the request is specifically tailored to discover relevant information; (2) the availability of such information from other sources; (3) the total cost of production, compared to the amount in controversy; (4) the total cost of production, compared to the resources available to each party; (5) the relative ability of each party to control costs and its incentive to do so; (6) the importance of the issues at stake in the litigation; and, (7) the relative benefits to the parties of obtaining the information.

So, when faced in the future with intrusive and massive electronic discovery requests, the first move should be to try to stipulate with the opposing party concerning sharing costs.  If that fails, attempt to strike the discovery requests as unduly burdensome.  If that fails, ask the court to shift the costs using the Zubulake factors.  If that fails, pay for the discovery and attempt to recover the costs if you prevail in the litigation.

Employers should still seek confidentiality in wage and hour
settlements – but they must also be prepared to address a Court’s hesitation to
grant such relief (especially in a jurisdiction like New Jersey that
follows a strong presumption in favor of public disclosure).
Employers should, for example, be prepared to articulate the legitimate private
or public interests that warrant filing an agreement under seal and how
those interests outweigh public disclosure; clearly defining how the employer
would be injured if the settlement agreement were not filed under seal; and that
less restrictive alternatives (if any) are not available. The
case is Brumley
v. Camin Cargo Control Inc., and can be found here.

Other 2012 new labor and employment laws and regulations to keep your eyes on that may affect your New York business are as follows:

-Under the Workplace Religious Freedom Act (WRFA) which amended the City’s Human Rights Law, it is harder for employers to meet the “undue hardship” defense with respect to reasonably accommodating the religious practices of an employee or applicant.  In short, the federal de minimis standard does not apply.  Rather, the WRFA defines “undue hardship” as “an accommodation requiring significant expense or difficulty (including a significant interference with the safe or efficient operation of the workplace or a violation of a bona fide seniority system).”  Various factors should be evaluated such as cost and the number of affected employees.  Generally, employers can establish undue hardship by showing that a requested accommodation will result in the inability of the employees to perform the essential functions of their jobs.

-The summary judgment standard for City Human Rights discrimination cases no longer requires a plaintiff to establish a prima facie case when a defendant presents evidence of a nondiscriminatory reason for its action.  The focus now is on whether plaintiff can prove the defendant’s reasons are pretext.  If the plaintiff responds with some evidence that at least one of the reasons proffered by defendant is false, misleading, or incomplete, “such evidence of pretext should in almost every case indicate to the court that a motion for summary judgment must be denied.”  Bennett v. Health Management Systems, Inc. 2011 WL 6347918 (N.Y.A.D. 1 Dept., Dec. 20, 2011).

-The “Employee Rights Under the National Labor Relations Act” Poster must be posted in nearly all union and non-union workplaces (with some exceptions) on or before April 30, 2012.  Frequently asked questions (such as the types of non-union employers with minimal interstate commerce that must comply) and the form notice can be found here.

-The U.S. Department of Labor Administrative Review Board voted that the whistleblower provision of Title VIII of Sarbanes-Oxley has no extraterritorial application.

-The Low Income Support Obligation and Performance Improvement Act requires employers to report whether health insurance benefits are available to employees’ dependents in their quarterly wage reports.

The case was initiated by Cheryl Perich, a teacher employed by a school run by a large Lutheran denomination in Michigan.  Perich taught mostly secular subjects but also completed the church’s requirements to become a “Minister of Religion, Commissioned,” including theological study, endorsement by her local district, and passage of an examination.   She also taught religion classes and led school-wide chapel services.  After Perich became ill with narcolepsy, the school contracted with a non-commissioned teacher to replace Perich.  Perich attempted to return to work, and threatened to file a lawsuit against the school when she was refused her former position.  Perich was later terminated and her title as minister was rescinded.  The EEOC filed suit against Hosanna-Tabor on her behalf, alleging that Perich had been fired in retaliation for threatening to file a disability discrimination lawsuit.

The question before the Court was whether the Establishment and Free Exercise Clauses of the First Amendment barred Perich’s suit.   Writing for the Court, Chief Justice Roberts concluded that the history of the Religious Clauses and the Court’s precedents regarding them barred the government from interfering with the decision of a religious group to fire one of its ministers.  The Court also agreed with every federal appellate court in the country that there was a “ministerial exception” to prevent the application of Title VII and other employment discrimination laws to claims concerning the employment relationship between a religious institution and its ministers.  In this case, the Court held, Perich’s formal title and the religious functions she performed for the church made her a minister covered by the ministerial exception.

The Court rejected the EEOC’s argument that religious organizations can defend against employment discrimination claims by invoking their First Amendment right to freedom of association.  As Chief Justice Roberts noted, “The Court cannot accept the remarkable view that the Religion Clauses have nothing to say about a religious organization’s freedom to select its own ministers.”  The Court found that the issue in this case, “government interference with an internal church decision that affects the faith and mission of the church itself,” warranted the application of the ministerial exception.  While finding that the ministerial exception is not limited to the head of a religious congregation, the Court declined to “adopt a rigid formula” for deciding when an employee qualifies as a minister.

In concurring opinions, Justices Thomas and Alito offered two different approaches to the question of which employees may qualify as ministers.  Justice Thomas stated that the First Amendment requires courts “to defer to a religious organization’s good-faith understanding of who qualifies as its minister” to apply the ministerial exception.  In contrast,  Justice Alito, joined by Justice Kagan, urged courts to “focus on the function performed by persons who work for religious bodies,” rather than relying solely on the use of the term “minister,” because different religions use the term “minister” in different ways (and some do not use the term at all).

Plaintiffs (either Home Lending Specialists or Loan Consultants) asserted they were misclassified as exempt from overtime under the FLSA.  During their employment, they signed arbitration agreements requiring they bring their claims on an individual basis (not as a “class, collective or representative action”).  The agreement stated: “Claims covered under this Policy must be brought on an individual basis. Neither Citi nor any employee may submit a class, collective, or representative action for resolution under this Policy. To the maximum extent permitted by law, and except where expressly prohibited by law, arbitration on an individual basis pursuant to this Policy is the exclusive remedy for any employment-related claims which might otherwise be brought on a class, collective or representative action basis. Accordingly, employees may not participate as a class or collective action representative or as a member of any class, collective, or representative action, and will not be entitled to any recovery from a class, collective, or representative action in any forum. Any disputes concerning the validity of this class, collective, and representative action waiver will be decided by a court of competent jurisdiction, not by the arbitrator.” 

Although the Court found the parties agreed to arbitrate (an acknowledgement – such as by following a link to download a handbook containing the arbitration policy – and continued employment were sufficient to find consent to arbitrate), the Court held that collective action waiver in any forum is unenforceable because it would prevent plaintiffs from vindicating their substantive FLSA rights.  

After a substantial analysis of prior arbitration decisions and FLSA history, the Court stated that the Supreme Court’s decision in AT&T Mobility LLC v. Conception (131 S.Ct. 1740) did not overrule the Second Circuit’s decisions in American Express Co. v. Italian Colors Rest. (class action waiver precluding enforcement of statutory rights unenforceable) and Ragone v. Atlantic Video (agreement shortening Title VII statute of limitations and adding fee-shifting unenforceable) because AT&T addressed only whether a state law rule holding class action waivers unconscionable was preempted by the FAA (American Express and Ragone addressed federal arbitral law).  In other words, arbitration of FLSA claims will only be compelled if the claim can be effectively vindicated through arbitration.

Although “the Second Circuit has not determined whether the collective action provisions of the FLSA are integral to its structure and function, and, as such, whether an agreement waiving that right can be enforced,” the Court held that a waiver of the right to proceed collectively under the FLSA in any forum is unenforceable as a matter of law.  The Court did not hold that individual FLSA claims are not arbitrable.  Nor did the Court hold that mandatory arbitration of FLSA collective actions is unenforceable (“[a]ccordingly, this case does not oppose the strong federal policy favoring arbitration with the rights granted in the FLSA, but instead only questions whether the right to proceed collectively may be waived”).  Now would be a good time to review your mandatory arbitration agreements. 

Finally, the Court stated that at step-one of the familiar two-step collective action certification process, plaintiffs cannot satisfy their modest factual showing through unsupported assertions or conclusory allegations.  However, the Court also rejected defendants’ call for a fact-intensive inquiry, and stated that Rule 23 cases (cited by defendants) involve “a different – and more stringent – analysis than that applicable here.”   There was no mention of Dukes v. Walmart. 

You can read the case here: Raniere

After being diagnosed with malignant lymphoma, the company complied with a doctor’s requirement that Timmel be excused from working in radiological areas. After being terminated for a work rule violation and reinstated following arbitration pursuant to a CBA, Timmel provided the company with another doctor’s note listing further work restrictions.  Finding there were no essential duties that Timmel could perform within his restrictions, he requested to be assigned to non-radiological duties.  No position existed which would accommodate Timmel’s restrictions so he was assigned to a janitorial position at a reduced wage.  After another unsuccessful arbitration, he resigned and sued for failure to provide a reasonable accommodation, disability discrimination and retaliation. 

With respect to his failure to accommodate claim, the court found that “the only way West Valley could have accommodated Plaintiff was to create a new position for him, composed of various duties, including respirator inspection, sorting tools, laundering non-radiological clothing, and limited data entry. This Court finds that no such position existed and West Valley was not required to create such a position to accommodate Plaintiff … An employer need not reassign an employee if no position is vacant. Nor is the employer obliged to create a new position to accommodate the employee.”

With respect to his discrimination and retaliation claims, the court found the Arbitrator’s previous termination and demotion decisions were entitled to deference (“the Second Circuit has determined that a plaintiff to survive a motion for summary judgment must present strong evidence that the decision was wrong as a matter of fact—e.g. new evidence not before the tribunal—or that the impartiality of the proceeding was somehow compromised”).  With respect to the first arbitration, the court stated: “the Arbitrator’s express finding that the cause of Timmel’s punishment was violation of the Stop Work policy substantially weakens Timmel’s assertion that West Valley was acting with a discriminatory intent.”  With respect to the second arbitration, the court stated a decision by an independent tribunal that is not itself subject to a claim of bias will attenuate a plaintiff’s proof of the requisite causal link between protected activity and termination.

The decision can be found here.