No Arbitration for Masseuse 2016-01-06T14:20:39-07:00

Posted on January 6, 2016

The Tenth Circuit just ruled that an arbitration agreement between a massage student and her school was not enforceable, because it would not permit the effective vindication of the student’s statutory rights. Nesbitt v. FCNH, Inc., No. 14-1502 (10th Cir. Jan. 5, 2016). The dispute involved a massage student’s claim that, when she gave massages to members of the public as part of her training, she was acting like an employee and entitled to be paid. She brought a class action, asserting claims for unpaid wages under state law and the FLSA. The massage school moved to compel arbitration, based on a provision in her enrollment application.

The court refused to require arbitration. The provision did not adequately protect the student’s rights because, first, it required the student to pay half of the arbitrator’s fees (which would not be necessary if the case was decided in a court), and second, it was not clear that if the student prevailed, she would be entitled to an award of her attorney’s fees (which would be available under the FLSA in a court action). The massage school argued that these problems should not prevent enforcement because the provision had an opt-out clause, but the Court ruled that the opt out clause was only relevant to whether the parties had agreed to arbitrate. In addition, the court refused to remove the improper provisions and then enforce the agreement, because the provision had no clause by which the parties agreed the court could make those changes.

Acceptable terms for arbitration agreements continue to evolve in every jurisdiction across the country. What’s in your form?

Curing Cat’s-Paw 2015-09-28T11:08:34-06:00

Posted on September 28, 2015

By Bill Wright

In a Title VII retaliation claim, a plaintiff has to prove protected conduct was the “but-for” cause of the materially adverse action. Can a plaintiff prove “but-for” causation relying on the supposed retaliatory animus of someone other than the decision maker? Yes, but not if the decision-maker acts independently of the so-called “cat’s paw.”

In Thomas v. Berry Plastics Corp., No. 14-3200 (10th Cir. Sept. 25, 2015), plaintiff was subject to 13 disciplinary actions over 7 years and was on a last chance agreement. After the shift-lead blamed plaintiff for a quality control issue, the manager fired plaintiff. Plaintiff appealed internally, and two independent managers affirmed the discharge. In court, plaintiff tried to show that the shift-lead was biased because he had not included exculpatory information in his report. The court ruled the evidence failed to show bias, but also ruled that the employer’s internal review of the discharge decision was independent of the shift-lead’s information in that it provided the plaintiff an opportunity to tell his side of the story.

Just hearing the discharged employee out may be enough to show independence. Also, apparently, employers may cure any lack of independence with a review process that occurs after the decision. It is never too late to show independence.

Court-Authored Settlement Agreement Might Not Suffice 2013-01-09T22:13:36-07:00

Posted on January 9, 2013

By Sarah Peace

It is important to proceed cautiously and meticulously even with a court-approved settlement of an employee’s claims. In Walters v. Wal-Mart Stores, Inc., No. 11-5130 (10th Cir. Jan. 8, 2013), a plaintiff brought race, disability, gender, and age discrimination claims against his employer. They reached a settlement agreement in a conference with a magistrate judge. They signed a brief memorandum: X dollars for a full release. But when the defendant’s lawyers prepared a formal agreement, complete with bells and whistles, the plaintiff refused to sign. The district court enforced its memorandum and the plaintiff appealed.

The plaintiff argued, in part, that the court should not have enforced the memorandum because he was not given twenty-one days to consider its terms. The Tenth Circuit rejected this argument because the twenty-one day requirement, generally applicable to the waiver of age discrimination claims, does not apply to the settlement of a court case. However, the Tenth Circuit pointed out that the plaintiff’s waiver of his age claim may not have been “knowing and voluntary” as required by the Age Discrimination in Employment Act (“ADEA”) because he may have had insufficient time to consider the agreement and that the memorandum did not specifically mention the ADEA.

The pro se plaintiff in this case was out of luck because he failed to raise these arguments, but if you are ever in the employer’s position, you might not be so lucky. Be sure any release of age discrimination claims mentions the ADEA and is “knowing and voluntary.”

No OT Claim Where Employee Ignored the Time Keeping System 2012-11-30T20:11:16-07:00

Posted on November 30, 2012

By Ted Olsen

Employers learned the value of an up-to-date time keeping system in a recent 10^th Circuit decision. Brown v. ScriptPro, LLC, No. 11-3293 (10^th Cir. Nov. 27, 2012). In ScriptPro, a Customer Service Operations analyst, allegedly, got permission to work from home at night to store up hours for an upcoming leave. When company later discharged the employee, he filed suit under the Fair Labor Standards Act for overtime. The employer could not deny that the employee had worked overtime – the employee was working from home and no one observed whether he was working. But the employee’s OT claim failed anyway because ScriptPro had a computerized timekeeping system that was accessible to the employee even from home and the employee did not enter his hours worked. The employee also did not keep any other record to document the hours he worked. “Under these circumstances, where the employee fails to notify the employer through the established overtime record-keeping system, the failure to pay overtime is not a FLSA violation,” concluded the Court. Because the company had this up-to-date system, the Court was able to shift the record keeping burden from the employer to the employee, and, in this case, the employee completely failed to keep reliable records.

The balance of the case addressed Family and Medical Leave Act interference and retaliation claims. The employee was fired two days after he requested an FMLA leave, but the employer had overwhelming evidence that it would have discharged him in any case because of his performance and behavior — not completing projects on time, and loudly arguing with his fellow employees, supervisors, customers and his wife in the workplace.

Posted on January 6, 2016

Posted on September 28, 2015

Posted on January 9, 2013

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