United States: US Employment Litigation Round-Up - December 2013

Keywords: NLRB, Facebook Posts, Wage And Hour Class Action, Immigrant Workers

A Review of Key Cases and New Laws Affecting Employers

NLRB Approves Employer's Firing of Two Employees Over Negative Facebook Posts

Decision: In Richmond District Neighborhood Center, an NLRB judge ruled that a community center ("Center")'s discharge of two youth programming employees over a profane Facebook conversation about working conditions did not violate the National Labor Relations Act ("NLRA"). The employees engaged in the Facebook exchange in August 2012, shortly after the Center offered to rehire them for the upcoming school year. In the exchange, the employees claimed that they would take students on "[f]ield trips all the time to wherever the **** we want" and that the program could just "figure out the money." The judge found the posts were a continuation of protected complaints about working conditions made in a May 2012 staff meeting. A supervisor at the Center, who was Facebook friends with one of the employees, alerted the Center to the August posts. The Center then rescinded its re-hire offers to the two employees. Finding that the Center did not run afoul of the NLRA, the judge held that, the employees' activity was concerted, but it was not "protected" under the NLRA because the Center had a legitimate concern that the Facebook comments could "jeopardize the program's funding and the safety of the youth it serves." This took the Facebook comments outside the protection of the NLRA and justified the Center's decision to terminate.

Impact: This case demonstrates that not all Facebook complaints about working conditions are protected activity. In the era before Facebook, the NLRB had recognized that some employee concerted activity could be "so egregious as to take it outside the protection of the Act, or ...to render the employee unfit for further service." The Richmond case is the first to show how employees may exceed the protection of the Act on Facebook. While the NLRB will no doubt interpret this standard narrowly, employers should consider raising the defense when the employee's online conduct poses a legitimate, significant threat to their business. It is important to remember, however, that the employer might have faced other challenges if it surreptitiously accessed the Facebook accounts or demanded that the employees provide access to their accounts. An increasing number of states have enacted legislation prohibiting such demands, and plaintiffs are using other statutes, such as the Stored Communications Act, to challenge employers' attempts to access private electronic communications of their employees.

A California Court of Appeal Trend: Another Reversal of a Trial Court's Denial of Certification in a Wage and Hour Class Action

Decision: In Martinez et al. v. Joe's Crab Shack, plaintiff filed a complaint seeking to represent a group of salaried managerial employees whom he alleged were entitled to overtime. The trial court had denied plaintiff's motion for class certification on the ground that the court would have been required to make individual determinations concerning whether each manager spent more than 50 percent of his or her time performing nonexempt tasks. The Court of Appeal disagreed, however, ruling that "class-wide relief remains the preferred method of resolving wage and hour claims, even those in which the facts appear to present difficult issues of proof." The appellate court relied primarily on Sav-on Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319 (2004) in admonishing the trial court to focus its analysis "on the policies and practices of the employer and the effect those policies and practices have on the putative class," rather than rely on the individual issues presented by different managers.

Impact: This case is one of several recent California Court of Appeal decisions to reverse a trial court's denial of class certification and direct the trial court not to deny class certification based on varying individual class member experiences. Rather, the appropriate focus for the certification decision should be on the existence of a policy. This case also serves as a valuable reminder to employers to review their policies to ensure that they are compliant, whether with respect to exempt/nonexempt classifications, meal periods, rest periods or the like.

Second Circuit to Decide Whether Interns Should Be Classified As Employees

Decision: In late November, the Second Circuit granted interlocutory review of two conflicting decisions issued by trial courts in the Southern District of New York. In Fox Searchlight Pictures, former interns alleged that they should have been paid as "employees" during the hours they worked on the set of the film "Black Swan." U.S. District Judge William Pauley agreed that the interns were employees and that Fox Searchlight would be liable for violating minimum wage and overtime laws. The court also granted the interns' motion for class certification. In an earlier decision in Wang et. al. v. Hearst Corp., Judge Harold Baer denied the interns' motion seeking a summary adjudication that they were in fact employees and also denied the interns' motion for class certification.

Impact: These cases are just two in a recent wave of wage and hour cases brought by interns. The Second Circuit's impending ruling should provide employers with further clarity concerning the law surrounding internship programs. In the meantime, companies with such programs should confirm that they have properly classified their interns in compliance with the Fair Labor Standards Act and applicable state laws. The Department of Labor recommends that courts weigh multiple factors to determine whether an individual is properly classified as an unpaid intern, including:

  • whether the internship is similar to training which would be given in an educational environment;
  • whether the internship experience is for the benefit of the intern;
  • whether the intern displaces employees;
  • whether the employer that provides the training derives any immediate advantage from the activities of the intern;
  • whether the intern is entitled to a job at the conclusion of the internship; and
  • whether the employer and the intern understand that the intern is not entitled to wages for the time spent in the internship.

California Signs New Legislation That Further Protects Immigrant Workers

New Law: California recently enacted a series of bills that will provide additional protections to undocumented immigrants working in California (SB 666 and AB 263). The bills prohibit employers from reporting or threatening to report a current, former or prospective employee's immigration status because the employee exercised a right under the California Labor Code, Civil Code or Government Code, including complaining about unpaid wages. A violation can lead to various penalties, including suspension of a company's business license. In addition, employers are prohibited from taking adverse action against employees who make updates to their personal information that are unrelated to skills, qualifications or knowledge. This seemingly innocuous provision may prevent termination for initially providing false work authorization documents and subsequently updating the information.

Impact: California has the largest undocumented immigrant population in the country, most studies estimating that undocumented workers comprise nearly 10 percent of California's workforce. Any employer with a California workforce should train and educate supervisors concerning these new laws to ensure compliance and to avoid potential penalties. In addition, the stated purpose of these laws was to protect the undocumented workforce from wage theft and unsafe work conditions because they are the most frequent victims of these employment violations. Thus, these laws are intended to encourage individuals to raise wage and safety issues, including filing claims against employers, without the fear of retaliation. As a result, these new laws may serve to encourage wage and hour and other employment-related litigation.

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Originally published December 2013

© Copyright 2013. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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