Labor & Employment N.Y. ("LENY")

Second Circuit Vacates Summary Judgment, Finding District Court Applied Wrong Standard In Evaluating Claims Under NYCHRL

Tue, 04 Jun 2013 08:15:19 -0500

The Second Circuit, in Mihalik v. Credit Agricole Cheauvreux North America, Inc., No. 11-3361-cv (2nd Cir. April 26, 2013), ruled that federal standards do not govern claims under the New York City Human Rights Law ("NYCHRL"). Instead, such claims require a separate and independent analysis. The court explained that that the 2005 amendment of the NYCHRL compels this result. Citing the First Department's decision in Williams v. New York City Housing Authority, 872 N.Y.S.2d 27 (1st Dep't 2009), the Second Circuit explained that under the NYCHRL the "severe and pervasive standard" is not the test of liability for gender discrimination, but is relevant only to the issue of damages. To prevail on liability, the plaintiff need only demonstrate by "a preponderance of the evidence that she has been treated less well than other employees because of her gender." The court cautioned, however, that the NYCHRL is not a "general civility code." Therefore, the plaintiff still must demonstrate "discriminatory motive," which requires a showing that she has been treated less well, at least in part, due to her gender. Addressing the standard for a retaliation claim under the NYCHRL, the Second Circuit instructed that the plaintiff must establish that she opposed her employer's act(s) of discrimination and the employer responded with conduct "reasonably likely to deter a person from engaging in such action." The court opined that in the context of this case, Mihalik did not need to demonstrate that she was discharged for opposing her supervisor's alleged offensive behavior because "a jury could reasonably find that publicly humiliating Mihalik in front of her male counterparts and otherwise shunning her was likely to deter a reasonable person from opposing his harassing behavior in the future." http://docs.justia.com/cases/federal/appellate-courts/ca2/11-3361/11-3361-2013-04-26.pdf

Fifth Circuit: Title VII Cost-Shifting Provision Inapplicable to Mixed-Motive Retaliation Claim

Wed, 22 May 2013 14:38:53 -0500

In Carter v. Luminant Power Services Co., No. 12-10642 (4/3/13), the Fifth Circuit, joined several other Circuits, in concluding that the cost-shifting provision of Title VII, 42 U.S.C. §2000e-5(g)(2)(B)(i), does not apply to mixed-motive retaliation claims. The court reasoned that the plain language of this section compels this finding. It explained that by its express terms the section applies only to violations under §2000e-2(m), which encompasses the anti-discrimination prohibitions of §2000e-2(a), but not the anti-retaliation proscription of §2000e-3(a).

D.C. Circuit Rules Single Use of "N-Word" by Management Official May Create Hostile Work Environment

Wed, 22 May 2013 13:52:08 -0500

The D.C. Circuit in Ayissi-Etoh v. Fannie Mae, No. 11-7127 (4/5/13), reversed the district court's grant of summary judgment for Fannie Mae. It found that plaintiff had established triable race discrimination and hostile work environment claims under the Civil Rights Act of 1866, 42 U.S.C. §1981. Fannie Mae hired plaintiff as a senior financial modeler and promoted him three months later to modeling team lead. Plaintiff's claim of racial discrimination arose from Fannie Mae's failure to grant him a pay increase in connection with his promotion. He alleged that when he questioned Fannie Mae's chief audit executive concerning this issue, she replied: "For a young black man smart like you, we are happy to have your expertise; I think I am already paying you a lot of money." Noting that the executive denied making this statement, the court instructed that such a credibility contest cannot be resolved at the summary judgment stage against the non-moving party. Instead, it concluded that the "young black man" comment constituted direct evidence of racial bias that entitled plaintiff to a trial on the issue. In reversing the grant of summary judgment on plaintiff's hostile work environment claim, the court cited both this comment and a subsequent incident in which a Fannie Mae vice president during a meeting on work assignments yelled at plaintiff, "Get out of my office n____." Addressing this latter event, the court suggested, "This single incident might well have been sufficient to establish a hostile work environment." It explained, "perhaps no single act can more quickly alter the conditions of employment" than "the use of an unambiguously racial epithet such as 'n_____' by a supervisor." http://www.cadc.uscourts.gov/internet/opinions.nsf/5A1A6E0FFB5A980D85257B44004DF52C/$file/11-7127-1429152.pdf

District Court Denies Motion To Dismiss Employer's Action To Enforce Restrictive Covenant

Mon, 20 May 2013 12:42:36 -0500

In Locke v. Tom James Co., 2013 WL 1340841 (S.D.N.Y. March 25, 2013), the Court declined to dismiss claims by an employer seeking to enforce a two-year, 50-mile restrictive covenant. Judge Daniels denied summary judgment to the former employee, who was seeking dismissal of claims that he had breached the restrictive covenant and misappropriated trade secrets. The former employee worked as a clothier and salesman for a high-end custom clothing company. The Court found that the customer list at issue was not publicly ascertainable, and noted that protecting customer relationships is especially important when employees work closely with customers over a long period of time, especially when the employee's services to the customers are significant. (Here, the former employee visited customers at their offices or homes.) The Court also concluded that a two-year duration and 50-mile radius were reasonable, and that the agreement was not obtained under duress. (Thanks to WRR Committee member Steven T. Sledzik of Jones Morrison, LLP for this contribution!)

Update on Genesis Healthcare Corp. v. Symczyk

Thu, 18 Apr 2013 08:14:05 -0500

This case is discussed more fully in my posting of Nov. 11, 2012. The Supreme Court handed down its decision on Apr. 16, 2013. The question presented, which the majority (Thomas, J., with Roberts, CJ, and Scalia, Kennedy and Alito, JJ) sidestepped, was whether a would be FLSA collective-action case becomes moot when the lone plaintiff receives an offer from defendants to satisfy all of the plaintiff's claims. The Court assumed, without deciding, that the plaintiff's individual claim was moot, even though the plaintiff had declined the Rule 68 offer of judgment and the district court had dismissed the case -- leaving her without any damages remedy. (It seems likely that the Second Circuit, like some other Courts of Appeal, would at least have entered a default judgment in her favor, thus granting her individual relief. See McCauley v. Trans Union, LLC, 402 F.2d 340 (2005).) Based on its assumption, the Court held that because plaintiff had no remaining personal stake in representing others in the action, the suit as a whole became moot. Along the way, it distinguished a number of cases that had declined to find mootness in a class action setting, deeming these precedents inaposite in the FLSA context. J. Kagan, joined by Ginsburg, Breyer and Sotomeyer, JJ, issued a scathing dissent. She accused the court of having rushed to decide the broader issue based on an invalid premise: that the individual case was moot. (Justice Thomas held that plaintiff had waived the argument on individual mootness by not raising it until her brief on the merits in the Court.) J. Kagan also noted: "No more in a collective action brought under the FLSA than in any other class action may a court, prior to certification, eliminate the entire suit by acceding to a defendant's proposal to make only the named plaintiff whole. That course would short-circuit a collective action before it could begin, and thereby frustrate Congress' decision to give FLSA plaintiffs 'the opportunity to proceed collectively.'" (citation omitted).

New York City Council Votes to Amend Human Rights Law to Include "Unemployment" as Protected Classification; Veto and Override Expected

Sat, 26 Jan 2013 14:53:01 -0500

On Wednesday, January 23, 2013, the New York City Council passed a bill amending the City's Human Rights Law to prohibit employment discrimination based upon an employee or applicant's "unemployment status." It defines "unemployment status" as "an individual's current or recent unemployment." Under the amendment, however, an employer is not precluded from considering unemployment status data that is substantially job related where it has a bona fide reason for doing so. Nor is an employer barred from inquiring as to prior terminations or demotions, including whether such action was taken for cause. The amendment also addresses the advertisement of job vacancies by proscribing the inclusion of any statement that being currently employed is a job requirement or that unemployed applicants will not be considered. It has been reported that Mayor Michael Bloomberg plans to veto the bill. In response, City Council Speaker Christine Quinn was quoted saying that should Bloomberg veto it, she is confident she has the votes to override him. http://legistar.council.nyc.gov/LegislationDetail.aspx?ID=1102958&GUID=9B3B9F98-4E30-475C-A813-F9E1C99F1D99&Options=ID%7cText%7c&Search=

Comments Made to Employee During Pregnancy Preclude Summary Judgment on Her Title VII Claim Challenging Subsequent Discharge

Thu, 24 Jan 2013 12:41:45 -0500

The United States District Court for the Northern District of Illinois, in Quinlan vs. Elysian Hotel Company, No. 1:11-CV-05956 (N.D. IL 1/4/13), ruled that plaintiff may proceed with her Title VII claim alleging her discharge shortly after she returned from maternity leave constituted sex discrimination. In denying the employer's motion for summary judgment, the court concluded that remarks purportedly made to Quinlan by three management officials who participated in the decision to discharge her raised a genuine issue that their decision was influenced by sex discrimination. The remarks at issue concerned the difficulty of balancing work and being a good mother. The court described Quinlan's claim as asserting "the employer discriminated based on a view that new mothers cannot (or are less able to) do the job." Acknowledging that certain of the cited comments were attenuated from the Quinlan's discharge having been made more than six months prior, the court found that the remarks attributed to Mary Beth Malone, one of Quinlan's supervisors and one of the three decision makers, standing alone constituted sufficient circumstantial evidence that discrimination may have influenced the decision to terminate Quinlan's employment. These included repeated inquiries as to how Quinlan was going to manage a baby and her workload, as well as recommending that Quinlan consider returning to her career "later in life" because of the difficulty of managing work and being a "good mom." The court refused to accept for summary judgment purposes, Elysian's contention that Malone's comments were not discriminatory, but represented "girl talk" conversations in which Quinlan and Malone chatted about life as friends. It explained, "at this stage, the Court must view the evidence in Quinlan's favor, and when the content of the remarks are combined with the settings in which they were made, and the repetitiveness with which they were made, and that it was allegedly Malone who repeatedly brought up the subject, the remarks are evidence of discrimination." http://il.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20130104_0000026.NIL.htm/qx

Hospital Employee Discharged for Refusing Flu Shot Due to Veganism May Proceed with Religious Discrimination Claim

Wed, 16 Jan 2013 16:14:40 -0500

Denying defendant's motion to dismiss, the United States District Court for the Southern District of Ohio in Chenzira vs. Cincinnati Children's Hospital Medical Center, 1: 11-CV-00917 (S.D. Ohio 12/27/12), found that plaintiff stated a plausible claim of religious discrimination under Title VII and the Ohio Civil Rights Act based upon her adherence to veganism. Chenzira alleged that the hospital violated her religious convictions by discharging her for refusing to receive the flu vaccine. She explained that receiving a flu shot would contravene her convictions as a vegan not to ingest any animal or animal by-products because the flu vaccine is grown in chicken eggs. The court rejected defendant's argument that veganism represents nothing more than a dietary preference or social philosophy, and, as such, does not qualify as a religion for purposes of the protections afforded by Title VII or the Ohio Civil Rights Act. Instead, referencing the standard to be applied in the context of a motion to dismiss, the court concluded that it was "plausible" that Chenzira could subscribe to veganism with a sincerity equating that of traditional religious views, thereby satisfying the EEOC's definition. 29 C.F.R. §1605.1. It noted that this conclusion was further supported by Chenzira's citation to supporting essays and Biblical excerpts. "Although the Code makes it clear that it is not necessary that a religious group espouse a belief before it can qualify as religious, 29 C.F.R. §1605.1, the fact here that Plaintiff is not alone in articulating her view lends credence to her position." The court also denied the hospital's motion to dismiss Chenzira's complaint as being untimely. Although Chenzira filed her formal charge with the EEOC beyond the 300-day limit, the court determined that the intake questionnaire that she completed at the EEOC prior to the expiration of that period was sufficiently detailed to satisfy the charge-filing requirement. http://www.theemployerhandbook.com/ChenziraCincinnati.pdf

Eighth Circuit Enforces Mandatory Arbitration Agreement Waiving FLSA Class Claims

Wed, 16 Jan 2013 09:09:13 -0500

The Eighth Circuit, in Owen vs. Bristol Care, Inc., No. 12-1719 (8th Cir. 1/7/13), held that the plaintiff must arbitrate her Fair Labor Standards Act ("FLSA") overtime claim even though the governing mandatory arbitration agreement ("MAA") contained a waiver of class claims barring her proposed collective action. Owen, a former administrator with Bristol Care, a nursing home operator, brought her FLSA action in federal district court on behalf of herself and other similarly situated current and former employees alleging that she and other administrators had been deliberately misclassified as "exempt" employees for purposes of FLSA and corresponding state laws. The district court denied Bristol Care's motion to compel arbitration in accordance with the MAA and the Federal Arbitration Act ("FAA"). The court reasoned that although the MAA encompassed Owen's claim, arbitration could not be ordered here because the inclusion of the class waiver in the MAA rendered it invalid. In so concluding, the court noted that the Supreme Court's decision in AT&T Mobility LLC vs. Concepcion, 563 U.S. __, 131 S.Ct. 1740 (2011), upholding a class waiver in a consumer arbitration agreement, was not controlling in the employment context. Citing Chen-Oster vs. Goldman Sachs & Co., 758 F.Supp. 2d 394 (S.D.N.Y. 2011) and D.R. Horton, Inc., 357 NLRB No. 184 (2012), it explained that class waivers are invalid in FLSA cases because the FLSA authorizes the bringing of a class action. In reversing the district court, the Eighth Circuit instructed that Section 2 of the FAA "requires courts to enforce arbitration agreements according to their terms," absent a "contrary congressional command" in another statute overriding the FAA's mandate. It noted that the burden to make this showing rests with the party challenging the arbitration agreement. Owen, the Eighth Circuit decided, failed to meet this burden. "Owen identifies nothing in either the text or legislative history of the FLSA that indicates a congressional intent to bar employees from agreeing to arbitrate FLSA claims individually, nor is there an 'inherent conflict' between the FLSA and the FAA. In short, the FLSA contains no 'contrary congressional command' as required to override the FAA." The Eighth Circuit also highlighted that its conclusion is consistent with the five other courts of appeals that have addressed the issue. See Vilches vs. The Travelers Companies, Inc., 413 F. App'x 487 (3rd Cir. 2011); Caley vs. Gulfstream Aerospace Corp., 428 F.3d 1359 (11th Cir. 2005); Carter vs. Countrywide Credit Industry, Inc., 362 F.3d 294 (5th Cir. 2004); Adkins vs. Labor Ready, Inc., 303 F.3d 496 (4th Cir. 2002); Horentstein vs. Mortgage Market, Inc., 9 F. App'x 618 (9th Cir. 2001). http://www.ca8.uscourts.gov/opndir/13/01/121719P.pdf

EEOC Announces $2 Million Settlement of ADA Class Action Against Dillard's Inc.

Thu, 10 Jan 2013 07:35:52 -0500

The EEOC has reported that Dillard's Inc., a national retail chain, agreed to pay $2 million and adopt company-wide policy changes to settle a class action disability discrimination lawsuit filed by the agency in 2008. The suit stemmed from Dillard's long-standing national policy of requiring employees to disclose personal and confidential medical information as a condition of being approved for sick leave. The settlement also disposes of claims that Dillard's violated the ADA by terminating a class of employees for exceeding their maximum sick leave. Under Dillard's policy, employees were required to disclose the specifics of their medical condition when requesting sick leave even though they had provided a doctor's statement confirming that their absence was due to medical reasons. The EEOC maintained that the policy violated the ADA's prohibition against inquiring as to an employee's disability except where job-related and necessary for the conduct of business. Commenting on the settlement, EEOC regional attorney Anna Park stated, "Policies and practices that permit medical inquiries without proof of a valid business necessity run afoul of the law, often having large-scale consequences. All employers should carefully examine their own policies and practices to ensure compliance with federal law." http://www.eeoc.gov/eeoc/newsroom/release/12-18-12.cfm

Second Circuit Reverses Summary Judgment Dismissing Claims of National Origin and Racial Harassment

Tue, 08 Jan 2013 13:23:47 -0500

Vacating the district court's grant of summary judgment to the defendants, the Second Circuit, in Rivera vs. Rochester Genesee Regional Transportation Authority, No. 11-762 (12/21/12), concluded that plaintiffs, Enio Rivera and Michael Talton, had presented sufficient evidence to establish a "genuine dispute of material fact" as to whether they had been harassed in violation of federal and state law due to national origin and race, respectively. Rivera and Talton alleged they had been subjected to offensive slurs, physical threats and bullying. In dismissing Rivera's claim, the district court concluded that the harassment he experienced stemmed from a personal conflict with a co-worker and not his national origin. Acknowledging that the personal conflict between Rivera and his alleged harasser made the case a "close call," the Second Circuit determined that the issue of whether Rivera had been subjected to unlawful harassment based upon his national origin should be left for the jury to decide. The court identified three reasons for arriving at this conclusion. First, Rivera provided direct, non-conclusory testimony that on numerous occasions the co-worker with whom he had the personal conflict and others uttered ethnic slurs concerning his national origin. Second, Rivera's testimony was corroborated by Talton and other non-party witnesses who provided evidence of ethnically and racially hostile comments made outside of Rivera's presence. Third, in addition to the ethnic slurs, Rivera detailed that he was subject to bullying and physical harassment by these same co-workers. The court explained that in view of the totality of the circumstances "a reasonable jury could conclude that the alleged incidents of harassment in the record, including the slurs, constituted more than 'mere offensive utterance[s].'" See Hayut vs. State University of New York, 352 F.3d 733, 745 (2nd Cir. 2003). Addressing Talton's claim, the court determined that the district court erred in concluding that the evidence reflected only isolated incidents of crude and offensive language taking place over a period of years. It highlighted that Talton provided a detailed and uncontradicted account that both his supervisor and co-workers had directed racial slurs at him with the co-workers combining their remarks with physical threats. Expounding, the court emphasized that "'[p]erhaps no single act can more quickly alter the conditions of employment and create an abusive working environment than the use of an unambiguously racial epithet . . . by a supervisor in the presence of his subordinates.' Richardson vs. New York State Department of Correctional Services, 180 F.3d 426, 439 (2nd Cir. 1999) (citation omitted). The use of racially offensive language is particularly likely to create a hostile work environment when, as here, it is presented in a 'physically threatening' manner." See Hayut, 352 F.3d at 745. The court also vacated the grant of summary judgment dismissing Talton's retaliation claim. The court ruled that Talton had presented sufficient evidence to raise a triable issue as to whether he had experienced material adverse actions in response to his complaints of racial harassment. This evidence included a statement by Talton's supervisor that he could get fired for filing the EEOC charge. In addition, the court stated that the supervisor's response of "suck it up and get over it" to Talton's harassment complaints could establish an adverse employment action inasmuch as it may constitute "unchecked retaliatory co-worker harassment, if sufficiently severe." Finally, the court cited the employer's "almost immediate response" to complaints lodged against Talton by co-workers. It explained that "a reasonable juror could infer that [the employer's] swift response to the complaints by Talton's co-workers were designed to, and did, send a message that Talton's employment . . . was in serious jeopardy as a result of the EEOC charges." The court, however, did find that the district court properly dismissed Rivera's retaliation claim. Rivera, the court noted, failed to present any evidence that he suffered any material adverse action related to his filing discrimination charges. It rejected his reliance upon disciplinary citations for insubordination, an unpleasant work assignment, one late overtime payment, and denial of a time off request. The court stated that there was no basis to conclude that the citations represented anything other than the employer's reasonable enforcement of its disciplinary policies. As such "[w]ithout more, no reasonable jury could conclude that these acts of discipline, either alone or in conjunction with the other acts of retaliation Rivera alleges, represented a departure from [the employer's normal disciplinary practices such that they might have 'dissuaded a reasonable worker from making or supporting a charge of discrimination.'" See Burlington Northern & Santa Fe Railway Company vs. White, 548 U.S. 53, 68 (2006). http://www.ca2.uscourts.gov/decisions/isysquery/a138bc06-8662-40a1-9d79-167c4ffd69a8/3/doc/11-762_opn.pdf#xml

ADA Claim Not Preempted by LMRA

Mon, 31 Dec 2012 14:36:55 -0500

Reversing a dismissal by the district court, the Sixth Circuit, in Watts vs. United Parcel Service, Inc., No. 11-3480 (12/12/12), ruled that plaintiff's ADA claim was not preempted by Section 301 of the Labor Management Relations Act ("LMRA"). Plaintiff, Teresa Watts, a driver for United Parcel Service, claimed that UPS had denied her light-duty work under its temporary alternative work program ("TAW program") because of her disability. The district court reasoned that Section 301 of the LMRA preempted Watts' ADA claim because it required interpretation of the collective bargaining agreement between UPS and the union representing Watts, as it was the source of the TAW program. It concluded further that the dismissal was dictated here because Watts had failed to commence her action within the six-month statute of limitations applicable to Section 301 actions. In reinstating Watts ADA claim, the Sixth Circuit explained that the district court erred in its application of the Section 301 preemption doctrine. It instructed that Section 301 preemption serves to ensure that federal labor law uniformly prevails over inconsistent interpretations of collective bargaining agreements by state courts. However, where, as here, the claim is filed in federal court and asserts a right under federal law, Section 301 preemption does not apply. The court, citing Atchison, Topeka & Santa Fe Railway Company vs. Buell, 480 U.S. 557, 565 (1987), noted: A claim under the ADA is a separate, statutorily created federal cause of action independent from a CBA-based contract claim under the LMRA. Watts may have had a claim under the CBA, which she could have sought to vindicate according to the provisions of the CBA or by bringing a §301 contract-based claim under the LMRA. That contract right does not negate her statutory right. ftp://www.ca6.uscourts.gov/opinions.htm/12a0405p-06.txt

EEOC Strategic Enforcement Plan -- Fiscal Years 2013 - 2016

Mon, 31 Dec 2012 13:45:22 -0500

On December 17, 2012, in a 3-1 vote, the Equal Employment Opportunity Commission approved a strategic enforcement plan (SEP) to establish national enforcement priorities. The SEP also specifies actions to better integrate the agency's enforcement responsibilities. The SEP, which is intended to focus and coordinate the EEOC's programs with the objective of reducing and deterring discriminatory practices in the workplace, lists the following six national priorities: 1. Eliminating barriers in recruitment and hiring; 2. Protecting immigrant, migrant, and other vulnerable workers; 3. Addressing emerging and developing employment discrimination issues; 4. Enforcing equal pay laws; 5. Preserving access to the legal system; and 6. Preventing harassment through systemic enforcement and targeted outreach. http://eeoc.gov/eeoc/newsroom/release/12-18-12a.cfm

Genesis Healthcare v. Symczyk

Mon, 12 Nov 2012 13:36:32 -0500

On December 3, 2012, the Supreme Court will hear argument in Genesis Healthcare Corp. v. Symczyk, 2012 WL 609478 (June 25, 2012) (granting cert.). The case involves an uneasy juxtaposition of constitutional law and the Federal Rules of Civil Procedure in a suit based on the FLSA. At first glance, it appears to raise merely an arcane jurisdictional issue under Article III. On closer examination, however, Genesis poses a serious challenge to the viability of group litigation to enforce rights to minimum wages and overtime pay. Laura Symczyk is a nurse. Alleging that her former employer, Genesis, automatically took a meal break deduction regardless whether she actually performed compensable work during this period, she sued for damages "on behalf of herself and others similarly situated." Genesis answered Symczyk's complaint and simultaneously served a Rule 68 offer of judgment for "$7,500 in alleged unpaid wages, plus attorneys' fees, costs and expenses as determined by the Court," in full satisfaction of her own claim. At this point, Symczyk had not had the opportunity to move for conditional certification of the collective action; nor had she had time to conduct discovery to obtain proof that others stood in her position. No additional workers had yet become parties. Symczyk failed to accept the offer, causing it to be "considered withdrawn" (FRCP 68(b)). Genesis then moved to dismiss the suit, on the basis that Symczyk no longer had a "personal stake" in the outcome, as she had been proffered full relief. The judge granted the defense motion. Ultimately, the Court of Appeals for the Third Circuit reversed and remanded. See 656 F.3d 189 (2011). Borrowing from Rule 23 jurisprudence, the appeals court held, and Respondent argues, that notwithstanding possible mootness of the named representative's claim, discovery, conditional certification, and notice should be allowed to proceed. Doctrinally, this approach rests on the fiction that the later motion to certify "relates back" to the complaint's filing, when Symczyk's claim was clearly live. Substantively, it embodies the position that permitting FLSA defendants to "pick off" would-be collective plaintiffs by offering to settle with them individually for their (generally) small damages would undermine both congressional intent to let workers band together to vindicate their rights and sound judicial administration. Respondent posits a "parade of horribles," were her victory to be rescinded. "[P]laintiffs will rush to provide (inevitably haphazard) notice to the other similarly situated employees they can identify"; defendants will hasten to make offers of judgment before any opt-ins rear their heads. Brief for Respondent, at 28-29. The threat of such strategic behavior, she concludes, will serve neither courts nor litigants. Interestingly, Petitioners' Brief relies mainly on technical arguments, seeking to distinguish class action decisions that have cut representative plaintiffs considerable slack in the mootness area. Perhaps Genesis is playing it safe, trying to sidestep the implications (or atmospherics) of what might seem to some "sharp practice" under Rule 68. Or it may simply be capitalizing on current Court interest in justiciability. The justices have granted cert in a Hague Convention case, raising a mootness issue frontally. Chafin v. Chafin, 2012 WL 1642602 (U.S. Aug. 13, 2012). The subject has also arisen in the pending Fisher v. University of Texas, 132 S. Ct. 1536 (2012) (granting cert), which deals with the issue of affirmative action, and was one of the grounds of the decision in last Term's Knox v. S.E.I.U., 132 S. Ct. 2277 (2012). By contrast, the US Chamber of Commerce amicus brief on behalf of Petitioners stresses the negative practical effects that it perceives would arise from affirmance. Noting the tremendous increase in FLSA complaints, the Chamber contends that employers "are often forced to settle unmeritorious collective actions rather than ... risk catastrophic judgments" (id. at 2), including mandatory counsel fees. The Chamber opines that where problems really exist, defendants will find it too expensive to "buy off" all of the injured workers who will press forward with similar claims. Genesis may be decided on relatively narrow grounds. It appears that the district court still must determine the amount of fees, giving Respondent some stake in the action. In addition, as the Solicitor General urges, the judge should at least have entered judgment in favor of Symczyk: dismissal, far from satisfying Respondent's claim, actually gave her nothing at all. In that event, employers will have been at least temporarily thwarted -- while workers will have dodged a bullet. -- Vivian Berger

New Categories of Permissible Wage Deductions Take Effect

Thu, 08 Nov 2012 10:56:18 -0500

Effective November 6, 2012, amendments to the New York Labor Law Section 193 ("Section 193") authorize a host of new permissible wage deductions from employee paychecks. Bill A10875-2011 passed the New York State Legislature on June 21, 2012, and was signed into law by Governor Cuomo on September 7, 2012. Governor Cuomo's "Statement in Support" of the bill noted that employers' inability to make deductions for valuable services provided to employees is "disadvantageous to both employers and employees." Since 1966, New York employers have been prohibited from making any deductions from employee paychecks, subject to a limited number of exceptions.

The recent amendments are a welcome change for New York employers, as state courts and the New York Department of Labor ("NYDOL") Opinion Letters have consistently taken a narrow approach to the deductions enumerated in Section 193. Prior to the new amendments, New York law permitted deductions under only two circumstances: (1) as otherwise authorized by law (e.g., tax withholdings or Medicare contributions); and (2) the narrow, statutorily enumerated deductions in Section 193 (e.g., charitable organizations, labor organization dues, insurance premiums, and retirement contributions).

The newly permissible deductions are numerous and include, but are not limited to, the following: parking passes or mass transit vouchers; gym membership dues; certain purchases made by the employee, such as cafeteria or vending machine purchases at the employer's place of business; tuition, room and board fees; and day care expenses.

Additionally, the new amendments allow employers to make deductions to recover an overpayment of wages that is due to mathematical or other clerical errors, and to recoup salary or wage advances. Wage deductions related to overpayments and repayments of wages must comply with additional regulations promulgated by the NYDOL (addressing, e.g., the timing, frequency, duration, method of recovery, heightened notice requirements, and implementation of an employee-dispute system).

New York employers should carefully review the new law as there are several notice requirements that must be fulfilled prior to making any deductions from employee wages. For example, employers must provide employees with written notice of the terms and conditions of the payments and benefits, and other relevant details pertaining to how deductions will be taken. Also, employees must provide their employer with a voluntary, written authorization, which may be freely revoked. These written authorizations must be kept on the employer's premises throughout the employment relationship, and for an additional six years following conclusion of the relationship. Employees can also authorize wage deductions through a collective bargaining agreement.

Notably, if no further legislative action is taken, these amendments to the law will expire on November 6, 2015. As additional requirements may be promulgated from time to time by the NYDOL, employers should continue to closely monitor the legislation's post-enactment activity.

This post was authored by Matt Lampe, Emilie Hendee, and Michele Bradley of Jones Day. The views and opinions expressed herein are those of the authors and do not necessarily reflect the views of Jones Day or the New York State Bar Association.