Hunton Employment & Labor Perspectives

Claims under California’s Private Attorneys General Act (PAGA) are recently much in vogue.  With the proliferation of arbitration agreements and class action waivers, plaintiffs’ attorneys all over California been using PAGA claims – which cannot be waived in an arbitration agreement – as a preferred vehicle to pursue representative wage-and-hour lawsuits against employers.

While there are many unresolved issues relating to the litigation of PAGA lawsuits, California courts are making clear that a PAGA lawsuit will fail if the plaintiff does not send a compliant pre-filing notice to the Labor and Workforce Development Agency (LWDA) prior to the elapse of the statute’s 1-year limitations period.

In a statement issued last week, Massachusetts Governor Charlie Baker, along with state house and senate leadership, announced that lawmakers had agreed to implement a three-month delay to the Massachusetts Paid Family and Medical Leave (PFML) law, which Hunton Andrews Kurth, LLP previously reported about here. In the joint statement, the leaders explained:

To ensure that businesses have adequate time to implement the state’s Paid Family and Medical Leave program, the House, Senate, and Administration have agreed to adopt a three-month delay to the start of the required contributions to the program. We will also adopt technical changes to clarify program design. We look forward to the successful implementation of this program this fall.

The Board’s recent decision in Merck, Sharp, & Dohme Corp., 367 NLRB No. 122 (May 7, 2019)  highlights the differences that can arise as a result of the collective bargaining process in the terms and conditions of employment for employers with a divided workforce of non-union and union-represented employees.

In Merck, the Board majority reversed the Administrative Law Judge’s ruling that the employer had violated Section 8(a)(3) and (1) by offering a new, one-time paid holiday, “Appreciation Day” to all of its non-union employees to the exclusion of its union-represented employees.

Here are some factual background and key points of the NLRB’s decision in Merck:

We previously posted on the unfortunate ruling in March 2019, when a Federal Court reinstituted the “Component 2” wage reporting in the annual EEO-1 Report.  The highly controversial requirement – that employers annually report, to the government, W-2 earnings and hours worked for all employees – had been proposed in 2016, but stayed by the Office of Management and Budget (OMB) in 2017.

In a recent decision, the California Supreme Court refused to overturn an arbitrator’s award, despite finding the award was incorrect.  Specifically, the Court held that an arbitrator should have considered evidence of a rejected section 998 settlement offer and changed its cost award, even after issuing a final arbitration decision.  However, the Supreme Court determined a trial court does not have authority to correct this error. The ruling emphasized the broad scope of an arbitrator’s powers and narrow scope of judicial review when the parties choose arbitration.

Heimlich v. Shivji involved a dispute over legal fees between an inventor and his attorney.  The representation agreement contained an arbitration clause and during arbitration each party asserted claims for money owed.  

In Corona Regional Medical Center v. Sali, No. 18-1262 (May 3, 2019), the Supreme Court recently dismissed a petition for a writ of certiorari that would have resolved a circuit split as to whether expert testimony must be admissible to be considered at the class certification stage.  As a result, the Ninth Circuit remains one of only two circuits that have ruled workers are not required to submit admissible evidence to support a motion for class certification.  In contrast, the Second, Third, Fifth, and Seventh Circuits have all held that expert testimony must be admissible to be considered at the class certification stage.

In a unanimous 9-0 decision authored by Justice Ginsburg, the U.S. Supreme Court resolved a split amongst the circuit courts of whether filing a charge of discrimination pursuant to Title VII is a jurisdictional prerequisite or a claims-processing rule. Prior to the Supreme Court’s resolution of the issue, the First, Second, Third, Fifth, Sixth, Seventh, Tenth, and D.C. Circuit Courts all held that the administrative exhaustion requirements under Title VII are not jurisdictional, but rather an affirmative defense that can be waived by an employer if not timely raised. On the other side of the circuit split, the Forth, Ninth, and Eleventh Circuit Courts held that the administrative exhaustion requirement is jurisdictional, and that a federal district court has no authority to adjudicate Title VII claims if the plaintiff has not first filed a charge with the EEOC. In its decision, Fort Bend County v. Davis, all nine justices agreed that the charge filing requirement under Title VII is not jurisdictional, and therefore can be waived by a defendant if not timely raised.

Paid Family and Medical Leave, or PFML, is fast approaching and Massachusetts employers need to begin preparing for the upcoming July 1, 2019 effective date.

Not only do employers need to understand their obligations, but there are affirmative actions they must take now – which is well in advance of the January 1, 2021 commencement of the benefits taking effect.