Counting Down the Top 5 Employment Class Action Developments of 2018
On the last day of the year, we take a look back at some highlights and our most-read employment class action articles of 2018.
#5-Department of Labor Nullifies “80/20” Tip Credit Rule
In November, the Wage and Hour Division of the Department of Labor (DOL) rescinded Obama-era enforcement guidance that had made the tip credit unavailable to tipped employees who spend more than 20% of their time performing allegedly non-tip generating duties. The so-called 80/20 Rule had spawned a number of lawsuits, many of them collective actions, claiming that servers spent too much time performing allegedly non-tipped work. Reissuing an opinion letter first promulgated at the end of the George W. Bush administration in 2009, the DOL clarifies that it “do[es] not intend to place a limitation on the amount of duties related to a tip-producing occupation that may be performed, so long as they are performed contemporaneously with direct customer-service duties and all other requirements of the Act are met.”
#4-Ninth Circuit Permits Use of “Inadmissible” Expert Testimony for Certification Purposes
The U.S. Court of Appeals for the Ninth Circuit denied a request to review en banc a panel ruling that authorizes trial courts to consider evidence that would be inadmissible at trial when deciding whether a class may be certified. Sali v. Corona Regional Medical Ctr., No. 15-56460 (9th Cir. Nov. 1, 2018). The decision was filed over a sharply critical dissenting opinion authored by Judge Carlos Bea. Bea, who was joined by four of his colleagues, wrote that the majority’s decision “involves a question of exceptional importance and is plainly wrong.”
#3- Sexual Harassment Class Investigations on the Rise with EEOC
Since Fall of 2017, stories of sexual harassment have dominated the headlines. In what USA Today dubbed the “Weinstein Effect,” workplaces of all types and sizes have been seeing employees step forward to take part in the #MeToo movement by shining light on abuses of power by companies’ leadership. The increased focus on sexual harassment has created a surge in discrimination lawsuits and government investigations, with almost no industry being immune.
#2- Class Action Stacking Is Not Permitted, U.S. Supreme Court Rules
Once class action certification has been denied, a putative class member may not start a new class action beyond the applicable statute of limitations, the U.S. Supreme Court has ruled, 9-0, in an opinion by Justice Ruth Bader Ginsburg. China Agritech, Inc. v. Resh, No. 17-432 (June 11, 2018). Justice Sonia Sotomayor filed an opinion concurring in the judgment.
#1- Supreme Court: Class Action Waivers in Employment Arbitration Agreements Do Not Violate Federal Labor Law
Class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA), the U.S. Supreme Court held in a much-anticipated decision in three critical cases. Epic Systems Corp. v. Lewis, No. 16-285; Ernst & Young LLP et al. v. Morris et al., No. 16-300; National Labor Relations Board v. Murphy Oil USA, Inc., et al., No. 16-307 (May 21, 2018).
The Supreme Court’s decision resolves the circuit split on whether class or collective action waivers contained in employment arbitration agreements violate the National Labor Relations Act (NLRA). In a 5-4 decision authored by Justice Neil Gorsuch, the Court held that the FAA states that arbitration agreements providing for individualized proceedings are enforceable and neither the FAA nor the NLRA require otherwise. Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas, and Samuel Alito joined in that decision.