Author: lawofficesofmitchellschleyllc

QUINN EMANUEL MOVES TO SUMMARILY DISMISS TEMPORARY ATTORNEY’S OVERTIME CASE

In March 2014, William Henig filed a putative class and collective action against law firm, Quinn Emanuel Urquhard and Sullivan LLP, and Providus New York LLC, a staffing company.  Henig is an attorney who was hired by Defendants on a temporary basis to review documents in pending litigation for a six-week term. 

Henig claims that he sorted through hundreds of documents each day under very specific guidelines set forth by Defendants. In his Complaint, Henig alleged that he, and other similarly situated individuals, worked over 40 hours per week and were denied overtime pay in violation of the Fair Labor Standards Act and state wage and hour laws.

Last week, Emanuel filed a motion for summary judgment which could result in a dismissal of the case.  Emanuel maintains that temporary attorneys are exempt from overtime requirements under federal and state law under the exemption for professional employees. 

  A ruling in the favor of Henig would fuel the argument that duties of temporary attorneys are too menial to fall outside the coverage of overtime pay requirements and could also have an affect on other industries employing temporary workers.

This firm will continue to monitor the developments in this case.

THIRD CIRCUIT COURT OF APPEALS RENDERS DECISION IN FAMILY MEDICAL LEAVE ACT RETURN TO WORK CASE

The Third Circuit Court of Appeals recently reversed the trial court’s decision that granted summary judgment in favor of defendant in a retaliation and interference case under the Family Medical Leave Act.

In rendering its decision in Budhun v. Reading Hospital and Medical Center, the Third Circuit set the standard the employer is required to meet regarding an employee’s request to return to work after taking FMLA leave.  In this case, Vanessa Budhun was hired as a credentialing assistant by an affiliate of Reading Hospital and Medical Center.

Budhun estimated that approximately 60% of her time consisted of typing.  After she was hired, Budhun broke a bone in her right hand, which resulted in limited full use of her hands and fingers for typing.  She applied for FMLA leave, which included a note from her physician stating Budhun could return to work after a certain period of time, and she was ultimately approved for leave.  However, two days after Budhun’s FMLA leave expired, Reading replaced Budhun.

Budhun attempted to return to work, but, Reading informed her that she could not return because she could not perform her job at her pre-injury level.  Budhun sued Reading alleging interference and retaliation under the FMLA.  Reading argued that since Budhun could not perform an essential duty of her job, its decision was not violative of the FMLA.

The Third Circuit ultimately held that a jury could find that the physician’s note stating that she could return to work could trigger the hospital’s responsibility to reinstate her employment, and Reading interfered with Budhun’s right when it told her she could not return.

  Under the FMLA, it is the responsibility of the doctor, not the employer, to determine whether an employee can perform the essential functions of the job.  However, the hospital failed to provide Budhun with a list of essential job functions to submit to her physician to make such a determination.  The court also held that replacing Budhun constituted an adverse employment action, an element required to establish an FMLA violation, and emphasized that formal termination is not a necessary element in a retaliation action.

EEOC APPEALS DISMISSAL OF PREGNANCY BIAS CASE AGAINST BLOOMBERG TO SECOND CIRCUIT

The U.S. Equal Employment Opportunity Commission originally brought a class action suit on behalf of dozens of women against Bloomberg L.P., a company employing more than 15,000 people, alleging pregnancy discrimination.  The EEOC claimed that Bloomberg discriminated against women by demoting or reducing the pay of female employees after they announced their pregnancies and after they took maternity leave.

  This bias allegedly lead to demotions, exclusions from management meetings, reduced pay and responsibilities and stereotyping.  The New York court dismissed the class action suit, and the suit was converted into individual claims of discrimination, most of which were later dismissed.

Earlier this month, the EEOC appealed the court’s decision dismissing the remaining plaintiff’s claim for back pay.  In the notice of appeal filed in New York federal court, the EEOC stated that it was challenging all judgments dismissing its case against Bloomberg as well as various orders stemming from 2010.

This firm will continue to monitor the developments in this case.

NEW JERSEY GOVERNOR CHRIS CHRISTIE SIGNS OPPORTUNITY TO COMPETE ACT

As we previously reported, the New Jersey Assembly Labor Committee advanced the Opportunity to Compete Act last winter, which would limit the use of criminal background checks in the hiring process. 

On August 11, 2014, Governor Christie signed this bill into law.  The Opportunity to Compete Act will become effective on March 1, 2015 and will prohibit a covered employer from inquiring and using a job applicant’s criminal history during the hiring process.

 

The legislation makes clear, however, that an employer can make inquiries regarding a prospective employee’s criminal record after the initial employment process has ended (i.e., post-interview).

COMMERCE BANK FOUNDER DENIED $17 MILLION SEVERANCE PACKAGE

Earlier this month, the U.S. Court of Appeals for the Third Circuit affirmed the decision of the lower court and denied Vernon Hill II, the founder of Commerce Bank, a $17 million “golden parachute.”  Hill was terminated in 2007.

  He sought payment for severance, interest and stock options, as stated under his employment contract, however, the bank refused to honor the contract.  Hill sued the bank for breach of contract, and a jury returned a verdict in favor of the bank.

Hill appealed, arguing that the verdict should be reversed based on several evidentiary issues, but the Third Circuit found no abuse of discretion on those rulings and denied Hill’s motion for a new trial.  The court held that the bank was barred from paying because it was in a “troubled condition” that did not allow it to pay severance to executives.

U.S. SUPREME COURT TO HEAR ABERCROMBIE & FITCH RELIGIOUS DISCRIMINATION CASE

Abercrombie & Fitch’s “Look Policy,” which governs the appearance of its salespeople, has come under fire by employees who claim they were prohibited from wearing religious items while at work.  Earlier this month, the U.S. Supreme Court announced that it will hear an appeal filed by by the Equal Employment Opportunity Commission on behalf of a Muslim woman, Samantha Elauf, who was denied a job as a salesperson because her head scarf violated Abercrombie’s dress code.

A lower court previously ruled in Elauf’s favor, holding that Abercrombie was liable for religious discrimination; however, the Tenth Circuit U.S. Court of Appeals reversed the decision on grounds that Elauf was required to explicitly ask for religious accommodations, and she failed to do so. The Supreme Court is likely to hear the case in January, and a decision is expected in June.

This firm will continue to monitor the developments in this case.

SECOND CIRCUIT REVERSES SUMMARY JUDGMENT IN FAVOR OF TELEPHONE CLAIMS ADJUSTERS EMPLOYED BY GEICO

In 2009, Candace Harper brought a collective action on behalf of telephone claims adjusters for  unpaid overtime against Geico Insurance Company.  The 302 adjusters that opted into this action argued that Geico improperly classified them as exempt employees under the “administrative exemption” of the Fair Labor Standards Act. 

Last year, the district court granted Geico’s motion for summary judgment, agreeing with Geico’s argument that the employees were insurance claims adjusters and thus exempt under the FLSA, and dismissed the case. 

The employees appealed, and last week, the Second Circuit reversed the district court’s ruling.  The Second Circuit held that there was a legitimate conflict over the nature of the adjusters’ jobs under the administrative exemption, specifically, whether the employees “performed a sufficient number of the tasks…with sufficient discretion and independent judgment…” so as to satisfy the requirements of the exemption.

  As a result, the case is now being sent to trial.

TD BANK AGREES TO $9.9 MILLION OVERTIME SETTLEMENT IN ASSISTANT STORE MANAGERS CLASS ACTION LAWSUIT

Last month, TD Bank NA agreed to pay $9.9 million as a class action settlement over allegations that the bank failed to pay overtime wages to assistant store managers.  The lawsuit, filed in February 2013 by current and former TD Bank assistant store managers, alleged that they were improperly classified as exempt employees and denied overtime wages. 

Plaintiffs claimed that they performed various non-exempt work, such as bank teller duty, counting money in the bank’s vault and opening and closing branches.  Soon after the case was filed, Plaintiffs received class certification.   The settlement will provide relief to an estimated 2,600 eligible class members and covers employees who worked in New Jersey, New York and Pennsylvania.

While the job title of manager suggests that employees would not be entitled to overtime wages due to the executive exemption under federal and state laws, it is important to review the actual duties of such employees to determine whether they are properly classified as exempt.  TD Bank now joins Capital One as another bank to have paid a substantial class action settlement to assistant store managers.

THIRD CIRCUIT RULES AUTHORIZATION OF CLASS ARBITRATION SHOULD BE DECIDED BY COURTS

The Third Circuit ruled that courts, not arbitrators, should determine whether an arbitration agreement entered into by two parties allows for classwide arbitration.  The Third Circuit’s decision reversed the lower court’s ruling that the availability of class arbitration was a matter for the arbitrators to decide.

  In overturning the district court’s decision, the Third Circuit explained that “[b]ecause of the fundamental differences between classwide and individual arbitration, and the consequences of proceeding with one rather than the other…the availability of classwide arbitration is a ‘substantive question of arbitrability’ to be decided by a court[,]” unless the parties unmistakably provide otherwise.

This decision changes the field of class arbitration in the Third Circuit as now, the issue may be solely decided by the courts, except when the parties have clearly agreed that the issue is to be determined by the arbitrator.  The Third Circuit shares the same view as Sixth Circuit on this subject.

AMBIGUITY IN GOLDMAN SACHS’ BYLAWS CAUSES THIRD CIRCUIT TO VACATE RULING IN FAVOR OF EX-EMPLOYEE

Sergey Aleynikov, a former Vice President of Goldman Sachs, was convicted of trade secret theft in 2009 under federal law.  After serving one year in prison, his conviction was overturned.  Shortly thereafter, Aleynikov was again charged in New York State court under the same set of facts.  The state charges are still pending.  This case has generated legal costs in the amount of $2.5 million, and Aleynikov has sued Goldman for the payment of these legal bills on grounds that Goldman’s bylaws requires it to indemnify its officers for legal expenses.  The lower court held in favor of Aleynikov, and Goldman appealed to the Third Circuit.

Goldman argues that although Aleynikov was a vice president, he was not technically an officer necessitating the advancement of legal fees.  Goldman’s bylaws state that legal advancements will be paid to officers, but does not define the characteristics of that job title.  The Third Circuit’s analysis focused on whether Aleynikov was considered an “officer” as defined by the bylaws.  The Court ultimately held that that term “officer” was ambiguous and the case must go back to the lower court to determine the definition and rule whether Goldman should pay Aleynikov’s legal fees.

This decision serves as a reminder that ambiguous terms in bylaws can have a significant impact when a former employee seeks indemnification from the company after allegedly committing a wrongdoing.