Employment Law This Week®: Arbitration Agreement Enforcement, Maryland’s #MeToo Legislation, California’s National Origin Regulations [VIDEO]
Episode 119: Week of June 4, 2018
This week’s stories include ...
1. SCOTUS Approves Class Action Waivers
Our top story: The Supreme Court of the United States (SCOTUS) okays class action waivers in employment contracts. SCOTUS held that requiring employees to waive their right to participate in class actions does not violate the National Labor Relations Act (NLRA). SCOTUS ruled that the Federal Arbitration Act is controlling, not the NLRA. For that reason, courts are required to enforce arbitration agreements, including the specific terms—such as class action waivers—contained in them. We spoke to Epstein Becker Green’s Steve Swirsky about the ruling:
“This decision means clarity for employers who've been facing the uncertainty of whether arbitration agreements and class claim waivers would be enforceable. It means that employers who have operations across the country can have a uniform set of documents and policies in place. Until now, the Seventh Circuit and the Ninth Circuit had both agreed with the NLRB and had found that these agreements were unlawful, that they interfere with employees’ section 7 rights. That question has been resolved. It means simplicity, and, again, it means clarity.”
That clarity could lead many employers to require arbitration agreements that include class action waivers because, as Paul DeCamp of Epstein Becker Green explains, collective actions can be costly for any employer, particularly when it comes to wage and hour issues:
“We see wage and hour class and collective actions filed on virtually a daily basis against any type of employer that exists, very small to very large. And these cases can come about through any number of issues, including employee classification as employees versus independent contractors, exempt versus non-exempt, what counts as hours worked. Any kind of calculation of pay can give rise to a class or collective action. There are enormous operational costs and financial costs to companies over and above anything that they actually pay out in the litigation.”
2. Maryland Enacts #MeToo Legislation
Maryland says, “MeToo.” This month, Maryland passed the Disclosing Sexual Harassment in the Workplace Act of 2018, which goes into effect on October 1. The law would require employers with 50 or more employees to provide the Maryland Commission on Civil Rights with information on settlements of sexual harassment claims, beginning in 2020. The law also prohibits employers from mandating the arbitration of sexual harassment or retaliation claims. While Maryland and several other states have enacted laws that prohibit mandatory arbitration of harassment claims, these laws will face an uphill preemption battle under the Federal Arbitration Act and SCOTUS’s Epic decision, as we reported in our first story. Stay tuned.
3. California Strengthens National Origin Discrimination Protections
California expands Fair Employment and Housing Act (FEHA) protections against national origin discrimination. The state’s Office of Administrative Law has approved new amendments to the FEHA that expand the definition of “national origin” to include a person whose spouse is in a national origin group, a person’s name that is associated with a national origin group, and more. The regulations also expand discriminatory behavior to include language restriction policies and, in some cases, discrimination based on an employee’s accent.
4. Tip of the Week
This week, Andrea Carrijo, Senior Human Resources Leader for Bally, discusses some steps that human resources can take to ensure that restructuring leads to positive organizational change:
“First, the stakeholders need to get together and decide on the plan, the budget, and what you can or cannot do during that process. Have the leaders on the floor, face to face, because people feel more secure when they see their leaders talking about the restructure that is happening and, [if] they see the leader feeling secure, they will feel secure themselves. And the third thing, in terms of communication, is to celebrate. Even if it's a very small part of the process, I would say that we should have pizza and soda and get together and say, ‘Listen, we finished this part. Let's celebrate. We still have three, 10 more steps to go, but let's celebrate so we make the whole process more positive.’”