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If your company uses a class action waiver in your employment agreements and you are located in Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, the Northern Mariana Islands, Oregon, or Washington, you are out of luck.  Thanks to a recent decision from the Ninth Circuit Court of Appeals (which has jurisdiction over the aforementioned areas), that waiver is no longer enforceable.

Recently, the Court ruled in Morris v. Ernst & Young, LLP, No. 13-16599, 2016 WL 4433080 (9th Cir. Aug. 22, 2016), that an employment agreement that requires employees to pursue legal claims against their employer in “separate proceedings” and in arbitration violates federal law.  In that case, two employees sued Ernst & Young alleging they were misclassified as exempt employees under the Fair Labor Standards Act and were owed overtime pay.  The trial court compelled individual arbitration, pursuant to the “separate proceedings” in arbitration demanded by the employment agreement the two employees signed upon hire.  The Ninth Circuit reversed.

Employees are guaranteed the right to “engage in . . . concerted activities for the purpose of . . . mutual aid or protection” by the National Labor Relations Act.  The Court held that protection for “concerted activities” means that employers cannot require employees to waive their right to pursue legal claims as a class action.
Continue Reading Class Action Waivers in Employment Agreements Are No Longer Enforceable in the Ninth Circuit

Seattle restaurants and retail employers may soon face significant restrictions on employee scheduling.  The Seattle City Council is currently considering a proposed ordinance with the potential to impact hundreds of employers across the City.  Following are the basics of the proposed legislation.

What employers would be covered by the proposed ordinance?

  • Retail employers and large limited or quick food service employers with 500 or more employees worldwide; and
  • Full-service restaurants with 500 or more employees and 40 or more locations worldwide.

What employees would be covered by the proposed ordinance?

  • Hourly, non-exempt employees who work at least 50% of the time within the City of Seattle.

Continue Reading City of Seattle Proposes New Ordinance Regulating Employee Scheduling

On May 2, 2016, The U.S. Supreme Court declined to hear the legal challenge to the Seattle Minimum Wage Ordinance’s impact on Seattle franchisees (IFA v. Seattle–denial of cert).  We have blogged about Seattle’s Minimum Wage Ordinance (“Ordinance”) before. The Ordinance requires large businesses, defined as those with more than 500 employees, to…

Here’s a couple updates related to the Seattle Minimum Wage Ordinace.  Alas for Seattle employers, this is no April Fools joke.

Seattle’s $15 Minimum Wage Ordinance Becomes Law

As we’ve blogged about before, Seattle’s Minimum Wage Ordinance becomes law on April 1, 2015, raising the minimum hourly wage for Seattle’s lowest paid workers. On…

5352901The City of Seattle’s Minimum Wage Ordinance is set to take effect April 1, 2015.  When it does, Seattle will have the highest minimum wage in the nation, outpacing larger metropolises like San Francisco and New York City. Initially, Seattle workers will see a large increase above the State of Washington’s current $9.47 an hour minimum wage, up to either $10 or $11 an hour, depending on the size of the employer. Thereafter, the Seattle minimum wage will rise under a phased-in approach so that employee wages increase incrementally over the next three to seven years until the $15 per hour minimum is met by all employers. Once the $15 minimum is attained, wages will adjust with inflation. Below is a brief guide to the legislation and how it affects Seattle-area employers.

Draft Regulations Just Issued

On February 19, 2015, Seattle released long-awaited draft regulations interpreting the Ordinance, which will be discussed further below. Seattle is taking comments on the draft regulations through Friday, March 6, 2015. The text of the Ordinance and the draft regulations, the phased-in minimum wage schedules, and other information about the Ordinance can be found here: http://www.seattle.gov/civilrights/labor-standards/minimum-wage.Continue Reading Uncharted Territory: Seattle’s $15 Minimum Wage Ordinance

In a 5-4 decision, the Washington Supreme Court has ruled in an employer’s favor and clarified what are, and are not, statutory “wages” and unlawful wage “rebates” under Washington State’s Wage Rebate Act (“WRA”), RCW 49.52 et seq.  The case is LaCoursiere v. CamWest Development, No. 88298-3 (Wash. Oct. 23, 2014) (slip op.).  Camwest Development (“CamWest”) was represented by Stoel Rives attorneys Jim Shore and Karin Jones.

CamWest, a real estate development company, created an optional bonus program via individual written contracts with its participating managers. The bonus program was intended to provide the potential for larger manager bonuses in profitable years, but it also carried a downside risk of smaller, or no, bonuses in leaner years.  Participating managers’ contracts made expressly clear that the decision whether or not to award an annual bonus, and the amount of any bonus, was in CamWest’s discretion.  Managers did not have to participate in this higher reward/higher risk bonus program and could instead choose to receive a safer, set bonus.  Managers who chose to participate in the optional bonus program were required by its terms to contribute a percentage of each annual bonus into a capital account in a separately formed managers LLC.  The LLC would in turn loan money to CamWest to be invested in real estate projects that CamWest would develop.  The hope and intention at the time was that this arrangement would yield higher profit and bonuses for participating managers. Manager contributions to the LLC vested at 20% per year.Continue Reading Washington Supreme Court Finds Employer’s Discretionary Bonus Not Unlawful “Rebate” Under Wage Rebate Act (“WRA”)

This month the Washington State Court of Appeals, Division III issued a ruling in Becker v. Community Health Systems, Inc. that expands protections in a wrongful termination action based on violation of a public policy.

In Becker, the Plaintiff, a former chief financial officer for Community Health Systems, Inc. (“CHS”), alleged that while CHS initially represented that it would have a $4 million operating loss, Becker calculated a projected $12 million operating loss in 2012. When CHS requested Becker revise his projection prior to submitting it to the U.S. Securities and Exchange Commission (“SEC”), Becker refused. CHS placed Becker on a performance improvement plan and conditioned his continued employment on revising the loss projection. Becker documented his concern with the CHS calculation and advised the company that unless it remedied its misconduct he would be forced to resign. CHS accepted Becker’s notice as a resignation. 

Becker sued in superior court for wrongful discharge in violation of public policy (he also filed a whistleblower retaliation complaint with the U.S. Occupational Safety and Health Administration).  After the trial court denied CHS’s motion to dismiss for failure to state a claim under CR 12(b)(6), CHS sought discretionary review with the Court of Appeals.Continue Reading Washington Court of Appeals Expands “Jeopardy” Element of Claim for Wrongful Discharge in Violation of Public Policy

The Washington courts are strict in their interpretation of the classification of individuals as employees versus independent contractors, resulting in many an employer discovering that an “independent contractor” is instead an employee. But the Washington Court of Appeals’ recent ruling in Currier v. Northland Services, Inc., confirms that even those individuals who qualify as bona fide independent contractors will be deemed subject to the full protections of the Washington Law Against Discrimination (“WLAD”), including protection from retaliation. 

In Currier, the plaintiff, who worked as an independent contractor truck driver for NSI, overheard another independent contractor make a racist “joke” to a Latino driver. Currier reported the incident to NSI’s quality assurance manager, who informed the dispatchers of Currier’s complaint. Two days later, the dispatchers terminated Currier’s contract, citing “customer service issues” and informing Currier that they had spoken with the other truck drivers and “they had decided that the joke was funny.”Continue Reading Washington Court of Appeals Holds Independent Contractors Are Protected from Retaliation by the Washington Law Against Discrimination

Employers in Washington should take note of last week’s decision from the Washington State Supreme Court holding that state law allows a claim for failure to reasonably accommodate an employee’s religious practices. That result is hardly surprising, but how the Court reached that result, and its other conclusions along the way, will complicate how businesses in Washington operate. While the obligation to accommodate employees’ bona fide religious practice has existed under federal law since at least the early 1970s, smaller employers not subject to Title VII must now comply — and all employers are now subject to suit for such claims in Washington state courts.Continue Reading Washington State Supreme Court’s Decision on Religious Accommodation: What It Means for Employers