Thursday, September 12, 2019

Third Circuit on the Federal Arbitration Act and Uber drivers

Do you love the arcane scope language of the Federal Arbitration Act (FAA)? Do you also love the convoluted mess of employee-independent contractor classification analysis? Who doesn't!? The Third Circuit just issued a precedential opinion in Singh v. Uber Technologies, Inc.

The plaintiff brought this putative class action on behalf of himself and other similarly situated Uber drivers in New Jersey. He claimed that Uber misclassified them as independent contractors, and that Uber owes them money for overtime and business expenses that they would be entitled to if they had been properly classified as employees. Classification of Uber drivers (and "gig" workers generally) is a hot topic these days.

But wait . . . before we get to that hot topic . . . the plaintiff driver had an arbitration agreement. So, Uber moved to compel arbitration. But double wait . . . the FAA excludes transportation workers that are engaged in interstate commerce. So, can Uber compel arbitration or not?

Standard of Review
Not official use. 

The first interesting issue in this case is the standard of review on a motion to compel arbitration. The Supreme Court recently held in New Prime Inc. v. Oliveira that the Court decides whether the FAA exemption applies (also relevant to this case, SCOTUS held that the exemption applies to both employees and independent contractors). But what standard of review applies? The Court has some options, including the motion to dismiss
standard (a low bar) and the summary judgment standard (a relatively high bar). Orrr, how about a hybrid?
[T]he motion to dismiss standard applies if the complaint and incorporated documents provide a sufficient factual basis for deciding the issue. But where those documents do not, or the plaintiff responds to the motion with additional facts that place the issue in dispute, the parties should be entitled to discovery on the question of arbitrability before a court entertains further briefing with an application of the summary judgment standard to follow.
(internal citations and quotations omitted).

Does the FAA exemption apply to Uber drivers? 

Here, the Third Circuit identified two issues regarding the coverage of the FAA:
(1) if § 1 [the exemption] only applies to transportation workers who transport goods, or also those who transport passengers, and  
(2) whether Singh belongs to a class of workers that are engaged in interstate commerce.
Cutting to the chase - the Third Circuit held that the FAA exemption applies to transportation workers regardless of whether they are transporting goods or people. Therefore, it would apply to Uber drivers "engaged in interstate commerce."

The Court's analysis stops there. The Court remanded the case back to the district court to allow the parties to engage in discovery to explore the issue of whether the driver was engaged in interstate commerce. 

Thursday, September 5, 2019

Third Circuit re-affirms that comparator evidence is not necessary to establish a prima facie case of discrimination

Last week, the Third Circuit issued a nonprecedential opinion in Feng v. Univ. of Delaware. The Court reversed a trial court's decision to grant summary judgment on Feng's Title VI national origin discrimination claim. Feng alleged that he was doing well at school, until the University forced him to enroll in a heavier courseload to maintain his immigration status.

The trial court granted summary judgment because Feng failed to proffer any similarly situated comparators to support his discrimination claim. Such evidence is not necessarily required though - plaintiffs may also establish a prima facie case of disparate treatment discrimination by otherwise showing an inference of discrimination, or providing direct evidence of discrimination.
Not official use.
“Although comparative evidence is often highly probative of discrimination, it is not an essential element of a plaintiff’s case.” Anderson v. Wachovia Mortg. Corp., 621 F.3d 261, 268–69 (3d Cir. 2010) (citing Pivirotto v. Innovative Sys., Inc., 191 F.3d 344, 353 (3d Cir. 1999)).
The Court noted a factual issue regarding the source of the requirement that Feng take a heavier courseload. It was not clear whether federal law actually required it, or rather left the definition of the required "full course of study" to the discretion of the university. "Rather than attempting to disentangle the facts," the Third Circuit remanded to the district court.

Monday, August 26, 2019

Employee's criminal background check claims survive motion to dismiss

Welp, it's not exactly the hottest topic around right now. Pretty dry, to be honest. But, employers must be careful when making decisions based on an applicant's criminal history. In Hunt v. UPMC (M.D. Pa.), the plaintiff alleged that UPMC failed to adhere to some of the technicalities of the  Pennsylvania Criminal History Record Information Act (CHRIA) and the Fair Credit Reporting Act (FCRA).

MD PA in Harrisburg
The employee had to re-apply for her job after UPMC acquired her employer. She disclosed that she had been charged with two misdemeanors. She claims the charges, however, were initially felonies and later downgraded by the DA to misdemeanors.

UPMC obtained her criminal history using ePatch, "a third-party website that provides criminal history information in Pennsylvania." Guess what? The charges still showed up as felonies. So, UPMC rescinded the offer of employment. UPMC claims they rescinded the employment offer because she lied about her charges (falsely claiming they were misdemeanors instead of felonies).

The employee filed a bevy of claims - for blogging purposes, I'm just going to focus on the CHRIA and FCRA claims. CHRIA allows employers to consider convictions (not arrests), and only to the extent they relate to the applicant's suitability for the position. Here, the employee claims that UPMC relied on her charges which have yet to be adjudicated - a violation of the CHRIA.

She also claims that UPMC got her records without providing the FCRA-required notices. Employers must provide notice to the employee that they are getting a "consumer report" from a "consumer reporting agency." And, they must also provide notice if their decision not to hire is based on such a report. It may not be obvious that the "credit" reporting act defines a "consumer report" to include criminal background checks - but it does. The Court also concluded that ePatch was a consumer reporting agency because it regularly gathers criminal history information for "fees, dues, or on a cooperative non-profit basis."

Ultimately, the Court allowed the employee's claims to go forward. This was just a motion to dismiss, meaning the Court assumes that the plaintiff's allegations are true. It sounds like there are plenty of factual disputes that have yet to be resolved. Nevertheless, a good reminder to watch the technicalities when making hiring decisions based on criminal records.

Friday, August 23, 2019

Quoted on former employer job references and defamation

Much like Trace McSorely on his glorious touchdown last night . . .
. . . sometimes, you gotta call your own number. Straight from the department of shameless self-promotion, check out this article in Business Insurance magazine, In the balance: Safety of minors vs. safety from lawsuits. The article addresses some of the issues employers face when a prospective employer seeks a job reference regarding a past or current employee.

Thursday, August 22, 2019

Third Circuit on third-party bonuses and the "regular rate" under the FLSA

The Fair Labor Standards Act (FLSA) requires employers to pay nonexempt employees 1.5 times their "regular rate" of pay for overtime (hours over 40 worked in a work week). Sometimes, that's an easy calculation. If the employee makes $10/hr then (s)he gets $15/hr for overtime. The "regular rate," however, includes "all remuneration for employment paid to, or on behalf of, the employee" (with some exemptions).

In Sec. U.S. DOL v. Bristol Excavating, Inc., the Third Circuit issued a precedential opinion analyzing when bonuses from a third party count toward the "regular rate" for calculating overtime. Basically, Bristol contracted with a company called Talisman to provide services at drilling sites. Talisman paid Bristol employees who worked at the Talisman drilling sites bonuses for safety, efficiency, and completion of work. Because nothing is ever easy, the holding was:
Not official use.
[I]ncentive bonuses provided by third parties may or may not be remuneration for employment, depending on the understanding of the employer and employee.
Classic "it depends" response. So, what does it depend on?

The Court tells us that "a third-party payment qualifies as remuneration for employment only when the employer and employee have effectively agreed it will." This agreement may be an express contract, but it may also be an implicit agreement. The Court pointed to some signs of such an agreement:

  • The course of dealing - the employee "regularly and actually received" the bonus;
  • The employer "regularly and predictably relies on a bonus to induce certain behavior;"
  • Direct involvement of the employer in initiating the bonus or setting its terms;
  • Unannounced or discretionary third party bonuses generally do not count.
The employer simply allowing its employees to participate in a third party bonus program does not establish an implicit agreement. 

The Court summarized its holding as:
To sum up, in order for a course of dealing to result in an implied agreement to treat third-party incentive bonuses as remuneration for employment, a fact finder should consider whether the specific requirements for receiving the payment are known by the employees in advance of their performing the relevant work; whether the payment itself is for a reasonably specific amount; and whether the employer’s facilitation of the payment is significantly more than serving as a pass through vehicle. If the answer to all of those questions is yes, there should then be a holistic assessment of the level of the employer’s involvement in the third-party bonus program, to determine if it can fairly be said that the employer and employees have adopted the third-party incentive bonuses as part of their employment agreement. There may be other relevant considerations that arise from case to case, but an employer’s role in initiating, designing, and managing the incentive bonus program will likely be of high importance.

Thursday, August 15, 2019

DOL: FMLA covers parent meeting to discuss child's IEP

Not official use.
Quick post today. In a new opinion letter, the U.S. Department of Labor Wage and Hour Division addressed a parents need "to attend a Committee on Special Education (CSE) meeting to discuss the Individualized Education Program (IEP) of the employee’s" child.

The "need to attend CSE/IEP meetings addressing the educational and special medical needs of your children—who have serious health conditions as certified by a health care provider—is a qualifying reason for taking intermittent FMLA leave."

The end. Told you it was quick.