The Federal Arbitration Act (FAA) only partially preempts California’s bar on mandatory arbitration agreements in employment, the U.S. Court of Appeals for the Ninth Circuit has held, vacating the preliminary injunction that had been in place since early-2020 and enjoining enforcement of the law with respect to arbitration agreements governed by the FAA. Chamber of Commerce of the U.S., et al. v. Bonta, et al., No. 20-15291 (9th Cir. Sept. 15, 2021).

Click here to read the full article on Jackson Lewis’ website.

 

In the U.S. Congress’ latest proposal to strike against arbitration, Judiciary Committee Chairman Jerrold Nadler and Labor Committee Chairman Robert C. “Bobby” Scott introduced the Restoring Justice for Workers Act.  The proposed legislation seeks to put an end to pre-dispute arbitration clauses in the employment context.  Significantly, a similar bill was introduced in October 2018 but did not receive a U.S. Senate vote and died in session.  The 2021 version of the bill will likely suffer a similar fate.  Although frequently under attack, pre-dispute arbitration agreements remain an important and effective tool for employment dispute resolution.

Latest Attempt at Federal Legislation

The stated purpose of the Restoring Justice for Workers Act is to:

  • Prohibit pre-dispute arbitration agreements that require arbitration of work disputes;
  • Prohibit retaliation against workers for refusing to arbitrate work disputes;
  • Provide protections to ensure that post-dispute arbitration agreements are voluntary and with informed consent of workers; and
  • Amend the National Labor Relations Act to prohibit agreements and practices that interfere with the employee’s right to engage in concerted activity regarding work disputes.

The Restoring Justice for Workers Act would also do away with class and collective action waivers, and effectively would reverse the United States Supreme Court’s 5-4 decision in Epic Systems v. Lewis, 538 U.S. ___ (2018), in which the Court affirmed that employers may require workers to sign arbitration clauses containing class and collective action waivers.

Arguing in support of the bill, Rep. Nader reasoned that “…[f]or far too long, corporations have used mandatory arbitration clauses – which are often buried in the fine print of employment contracts – to tie the hands of American workers and strip them of their right to take employers to court when their rights are violated.”  Rep. Scott added that “[w]orkers should not be coerced into signing away their rights as a condition of their employment…[e]mployers are increasingly using mandatory arbitration agreements to deny employees a fair venue to seek recourse…”  Supporters of the bill opine that employees have a fundamental right to have their day in court.

The Restoring Justice for Workers Act is only the latest effort to do away with arbitration agreements and is likely to encounter stiff resistance.  Indeed, in February of this year, U.S. Representative Hank Johnson re-introduced the Forced Arbitration Injustice Repeal (FAIR) Act, which passed the U.S. House of Representatives in 2019 (and which we reported on at the time), but it was not taken up by the U.S. Senate.  The FAIR Act would have eliminated the use of pre-dispute arbitration agreements that are often used to resolve antitrust, employment, civil rights, and consumer disputes in an effective, efficient, and private manner.

Opponents of the Restoring Justice for Workers Act argue that passage of the bill will lead to an increase in costly and time-consuming class and representative action litigation.  This, in turn, will place a further strain on our already overburdened court system.  They further posit that the parties best served by the proposed legislation are the attorneys filing the class action lawsuits, who stand to rake in potentially sizable class action attorneys’ fees.

Although these bills are far from becoming law, employers should pay close attention to these and any future efforts to disturb the efficacy of arbitration agreements, which have been protected by the Federal Arbitration Act (FAA) since 1925.

Recent State Laws

Although the Restoring Justice for Workers Act faces an uphill climb, several states also have passed their own laws purporting to restrict the use of arbitration agreements.  We have recently reported on some of these laws, including in California, New Jersey, New York, Illinois, Maryland, Washington, and Kentucky.  Many of these laws are currently being challenged in court on FAA preemption grounds.  Several courts already have issued such decisions.

Additionally, employers in states like California should be mindful of critical state laws such as the State’s Private Attorney’s General Act (PAGA), as they provide alternative mechanisms for employees to circumvent arbitration agreements and file suit.  For more on PAGA and arbitration agreements, see our discussion of PAGA and FAA preemption here.

Arbitration Agreements Remain an Important and Effective Option

Despite these attempts to limit the efficacy of arbitration agreements, employers should not be deterred, as customized, well-drafted dispute resolution agreements still well-serve employers and employees alike in providing alternative dispute mechanism.

Jackson Lewis attorneys are available to answer any questions you may have regarding arbitration agreements, employment-related litigation, or any other employment law issues.

A Pennsylvania court recently addressed whether a deponent could be compelled to remove a face mask during his deposition after the deponent refused, citing health concerns.  After rescheduling the deposition once, plaintiff’s counsel asked the Court to order the deponent to testify maskless given that he would be doing so alone in a room with an unmanned camera taping him.

Judge Charles H. Bradford in the Court of Common Pleas of Lebanon County, Pennsylvania compelled the deponent to remove his mask, finding the refusal unreasonable given the minimal risks of COVID-19.  The case is Espinosa v. Luthercare, et al., Case No. 2019-02130 (Pennsylvania Court of Common Pleas, Lebanon County, July 28, 2021).

Emphasizing that finders of fact must be able to assess the credibility of testifying witnesses, Judge Bradford noted that one of the key tools to doing so is the ability to evaluate the facial expressions of witnesses.  Judge Bradford held “sometimes, facial expressions that accompany verbal testimony are of critical importance in assessing whether somebody is unsure, or perhaps even lying.”  On balance, affording finders of fact the ability to view testifying witnesses’ facial expressions outweighs concerns of COVID-19 exposure, especially when other preventative measures are taken.

In light of the ongoing pandemic, courts continue to take protective measures within reason, striking a balance between safety and traditional practices.  And while courts permit parties to think creatively to develop balanced solutions, wearing a mask while testifying alone in a room at a video-deposition serves no reasonable medical purpose and will not suffice.

If you have any questions regarding mask requirements in the workplace or during civil litigation, or any other questions regarding employment law or lawsuits, please reach out to the attorneys at Jackson Lewis P.C.

The Pennsylvania Superior Court has found, as a matter of first impression, that medical marijuana users may maintain a private action under the Pennsylvania Medical Marijuana Act (MMA), including a wrongful discharge action.  See Scranton Quincy Clinic Company, LLC, et al. v. Pamela Palmiter, Case No. 498 MDA 2020 (Pa. Super. Ct. Aug. 5, 2021).  As we previously discussed in our summary of the trial court’s decision, the MMA expressly prohibits employers from discharging, or otherwise discriminating or retaliating against an employee solely on the basis  of the employee’s status as an individual who is certified to use medical marijuana. However, it does not create an express private right of action.

The Court determined that the General Assembly “proclaimed a public policy” prohibiting employers from discriminating against medical marijuana users.

Click here to read the full article in Jackson Lewis P.C.’s Drug and Alcohol Testing Law Advisor blog.

 

 On July 27, 2021, Pittsburgh Mayor Bill Peduto signed Section 626B of the City of Pittsburgh Code—also known as the Temporary COVID-19 Paid Sick Leave Ordinance.  Under the Ordinance, employers with over 50 employees must provide up to 80 hours of emergency paid sick leave for full-time employees, and a prorated amount of leave for part-time employees, to use for COVID-19 related reasons.  While these measures are intended to help keep the workforce and workplace safe and healthy, confusion over employers’ responsibility remains and may be fueling COVID-19-related disability, leave and accommodation litigation.

While the first iteration of the Temporary COVID-19 Paid Sick Leave Ordinance, Section 626A, was in effect from December 8, 2020 to June 17, 2021, Section 626B is nearly identical and now in effect until at least July 27, 2022.  Minor differences in the new iteration of the Ordinance include allowing leave for employees or family members of employees to obtain a vaccine or booster vaccine dose and expanding the definition of COVID-19 to include any variant forms of the virus.  The new iteration of the Ordinance maintains the spirit of the original—urging that paid sick leave be granted where appropriate for COVID-19 related reasons as employers and employees continue to navigate the current public health crisis.

Employers should be mindful of the lack of clarity on whether leave provided by the Ordinance offsets time an employee has already used throughout the year for COVID-19 related reasons or if the leave provided by the Ordinance is in addition to it.  No guidance has been issued by the Mayor’s Office to clarify, but Employers should err on the side of caution in reviewing and granting leave under the Ordinance until further guidance is provided.

Due to breakthrough COVID-19 cases in fully vaccinated individuals, emerging variants of the virus causing repeat infections, and increasing number of employees returning to in-person workspaces, we anticipate the recent uptick in litigation filed across the country related to denial of COVID-19 leave and accommodations will continue.  According to, Jackson Lewis’ COVID-19 Employment LitWatch, from April 1, 2021, to August 3, 2021, nearly 48% of all COVID-19-employment-related lawsuits filed nationwide (402 of 842 lawsuits) should be categorized as “Disability, Leave & Accommodation,” which is a 10% increase from March 12, 2020, to March 31, 2021 (747 of 1962 lawsuits, or approximately 38%).  In Pennsylvania, however, approximately 79% of all COVID-19-employment-related lawsuits (27 of 34 lawsuits) should be categorized as “Disability, Leave & Accommodation,” compared to 52% (35 of 67 lawsuits) from March 12, 2020, to March 31, 2021.

Jackson Lewis attorneys will continue to monitor and report any further developments.  If you need guidance navigating the Temporary COVID-19 Paid Sick Leave Ordinance, or any other employment law issue, contact a Jackson Lewis attorney.  Our team stands ready to help.

The Iowa Supreme Court has ruled that Iowa state law preempts the City of Waterloo’s restriction on employers’ use of applicants’ criminal record history when making hiring decisions.  Other aspects of the ordinance, however, remain legal and enforceable.  The case is Iowa Ass’n of Bus. & Indus. v. City of Waterloo, Case No. 20-0575, 961 N.W.2d 465 (Iowa 2021).

In 2019, the City of Waterloo, Iowa passed Ordinance 5522, a “ban the box” law that prescribes when an employer may legally inquire into an applicant’s criminal record history during the hiring process, and restricts an employer’s use of an applicant’s criminal record history in hiring decisions.  The Iowa Association of Business and Industry (ABI) challenged Ordinance 5522 in court, seeking injunctive and declaratory relief on the grounds that the ordinance violates state law, namely Iowa Code section 364.3(12)(a).   Section 364.3(12)(a) prohibits cities from adopting ordinances that provide for terms or conditions of employment that exceed or conflict with federal or state law.

The trial court upheld the legality of Ordinance 5522 and ABI appealed.

On appeal, the Iowa Supreme Court focused on Iowa Code section 364.3(12)(a) and whether Ordinance 5522’s restrictions: (1) exceed or conflict with federal or state law; and (2) amount to terms and conditions of employment.  The Court first determined that the ordinance’s restrictions exceed the requirements of both Title VII of the Civil Rights Act of 1964 and the Iowa Civil Rights Act.  In reaching this decision, the Court considered the U.S. Equal Employment Opportunity Commission’s guidance that an employer could be liable under Title VII if its use of a criminal background check had a “disparate impact” on job applicants of a particular race and if the background check was not “job related and consistent with business necessity.”

Having satisfied the first prong of the analysis, the Court next concluded that Ordinance 5522’s restrictions on an employer’s use of an applicant’s criminal history in making employment decisions amounts to a term and condition of employment, and therefore satisfies the second prong.  However, the Court only extended its ruling to the employer’s “use” of the criminal history, not the employer’s “inquiry.”  The Court then severed the ordinance’s preempted “use” restriction and upheld the legality of the ordinance’s remaining limitation on “inquiries.”

This case offers three important takeaways for employers.  First, Iowa courts will sever all or parts of county or municipal statutes deemed to exceed or conflict with federal or state law. Second, businesses operating in Waterloo should be aware of Ordinance 5522, and its scope in light of the Iowa Supreme Court ruling. Third, periodically check the laws for the city/county in which your business is based.  Do not assume that only state and federal law apply.

If you have any questions regarding Iowa Ass’n of Bus. & Indus. v. City of Waterloo, “ban the box” laws and regulations, or any other employment law issues, do not hesitate to contact the attorneys at Jackson Lewis P.C.

In what is known as a “snap” removal, a non-resident defendant may be able to remove a state court case to federal court based on diversity jurisdiction, despite resident defendant(s) being named in the suit. To effect a snap removal, the non-resident defendant must file removal papers before the plaintiff can effect service on any resident or forum defendants. Although this procedure is not available to defendants in every state, a recent Fifth Circuit opinion makes clear that snap removals are fair game in Louisiana, Texas, and Mississippi. See Texas Brine Co. v. American Arbitration Ass’n, 955 F.3d 482 (5th Cir. 2020).

Federal courts exercise diversity jurisdiction over civil claims that “exceed[] the sum or value of $75,000” that are “between citizens of different states.” 28 U.S.C. § 1332(a)(1). Diversity jurisdiction provides a means by which a non-resident and/or out-of-state defendant may avoid litigating in state court. Generally, a defendant may remove a case filed in state court to federal court under 28 U.S.C. § 1441(b)(1) within 30 days after being served with initial pleadings. According to 28 U.S.C. § 1441(b), “a civil action otherwise removable solely on the basis of [diversity] jurisdiction… may not be removed if any of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” Therefore, because the statute specifically prohibits the action being removed if a served defendant is a citizen of the state in which an action is brought, courts have held that removal is proper if it occurs prior to service on a resident defendant, and the value of the claim exceeds $75,000.

In a recent appellate court decision, the Fifth Circuit issued an opinion agreeing with the Second, Third, and Sixth Circuits approving snap removal.  In Texas Brine Co. v. American Arbitration Ass’n, 955 F.3d 482 (5th Cir. 2020), a Louisiana plaintiff filed suit against two Louisiana defendants and a New York defendant in Louisiana state court. The New York defendant filed a snap removal from state court to fed­eral court prior to service on the Louisiana defendants. The Fifth Circuit held that the existence of a resident defendant did not present a procedural barrier to removal because the only “properly joined and served” defendant at the time of removal was the New York defendant.

District courts in the Fourth, Seventh, Eighth, Ninth, and Eleventh Circuits remain divided on the issue of snap removal. However, for non-resident defendants sued in state courts in the Second, Third, Fifth, and Sixth Circuits, racing to the federal courthouse to remove an action before plaintiff can serve resident defendants is worth the effort of the hustle.

Jackson Lewis attorneys are available to answer any questions you may have regarding snap removals, employment-related litigation, or any other employment law issues.

 When does the statute of limitations period begin to run on a harassment claim?  The California Supreme Court has ruled in Pollock v. Tri-Modal Distribution Services, Inc. that the time to file a cause of action for failure to promote brought under the harassment provision of the Fair Employment and Housing Act (“FEHA”) starts to run when the employee knows or reasonably should know of the employer’s allegedly unlawful refusal to promote the employee.

Click here to read the full article on Jackson Lewis’ California Workplace Law Blog.

After nearly a decade of litigation, in Godrey v. State of Iowa et al, Case No. 19-1954 (June 30, 2021), the Iowa Supreme Court reversed a jury verdict granting $1.5 million in damages and $3.1 million in attorneys’ fees to the former Iowa Workers’ Compensation Commissioner, based on his allegation that the Governor of the State of Iowa reduced his salary because of his sexual orientation and in retaliation for prior complaints. The Iowa Supreme Court found insufficient evidence that the Governor knew that the plaintiff was gay when he reduced the plaintiff’s salary, which in part caused the plaintiff to resign his position.

The Court relied on its long-standing precedent that “to prove discrimination was because of an employee’s membership in a protected class, the plaintiff must prove the decision-maker knew of the employee’s membership in that protected class.” The Court found the fact that the plaintiff was openly gay, that several of the Governor’s top advisers knew the plaintiff was gay, and the Governor’s public opposition to gay marriage were together insufficient to establish that the Governor knew of the plaintiff’s sexual orientation. The Court indicated the fact that others in the workplace know of an employee’s non-patent protected class status is alone insufficient to make the inference that a decision maker was also aware. The Court also held that the plaintiff’s personal belief that the Governor knew his sexual orientation was insufficient when the plaintiff cited no factual basis for that belief.

The Court found that the State of Iowa and the Governor were entitled to a directed verdict and judgment notwithstanding the verdict (JNOV) on the plaintiff’s claims of sexual orientation discrimination and retaliation, reversed the judgment against the defendants and remanded the case for dismissal of the plaintiff’s claims.

This case is a good reminder for employers defending claims of discrimination based on an employee’s membership in a protected class that is not patent or recordable. Even if others in the workplace knew of an employee’s protected class status, this is alone insufficient to establish discrimination. The plaintiff must establish the decision maker was aware of their protected class status in order to establish discrimination.

  The U.S. Supreme Court has found that Philadelphia’s ordinance requiring a private foster care agency to certify same-sex couples as foster parents burdened the agency’s religious exercise in violation of the Free Exercise Clause of the First Amendment. Fulton et al. v. City of Philadelphia, Pennsylvania et al., No. 19-123 (June 17, 2021).

Justice John Roberts, writing for the Court, found that Philadelphia unconstitutionally burdened the religious exercise of Catholic Social Services (CSS) — a private foster care agency in Philadelphia — by “forcing it to either curtail its mission or to certify same-sex couples as foster parents in violation of its religious beliefs.”

The Court’s decision primarily focused on whether Philadelphia’s Fair Practices Ordinance was both neutral and generally applicable and, therefore, constitutional, even if it incidentally burdened religion. For employers, however, the Court’s decision that CSS’s actions were not subject to the public accommodation provisions of Philadelphia’s Fair Practices Ordinance presents significant implications in cases alleging discrimination in places of public accommodation. The scope of this decision is limited in its application to the private sector.

Click here to read the full article on the Jackson Lewis website.