Earlier this year, the U.S. Supreme Court invalidated the arbitration agreements that an interstate trucking company had with its independent contractor drivers. That case arose in the context of a class action wage and hour lawsuit brought by a group of independent contractor interstate truck drivers alleging that they were not properly paid.  The company attempted the force the claim into arbitration based on the arbitration agreements it had with its contractors.  The Court held that the Federal Arbitration Act’s (FAA) provision excluding “contracts of employment with seaman, railroad employees or any other class of workers engaged in foreign or interstate commerce” precluded enforcement of the arbitration agreement thereby subjecting the carrier to the wage and hour collective action in court.

The New Prime decision is a good reminder for transportation companies utilizing arbitration agreements that their arbitration programs should consider whether to implement and apply state law rather than the FAA so as to avoid a similar result as in New Prime or to have state law act as a substitute in the event the FAA is inapplicable.

A copy of New Prime v. Oliveira is available here.

With the passage of the 2018 Farm Bill, Congress legalized much, but not all, hemp products containing less than .3 percent THC concentration.  Cannabidiol, or CBD oil, is a hemp product that is touted as having many positive medical and health benefits.  CBD oil may or may not contain THC.  The media reports surrounding the legalization in the Farm Bill and intense marketing efforts of CBD oil distributors has caused some Texas employees to believe that CBD oil and other hemp products are now legal in Texas.  That belief may cause employees to suffer adverse employment consequences and even potential criminal prosecution.

Continue Reading Texas Employees Beware: CBD Oil Remains Illegal in Texas

In Wittmer v. Phillips 66 Company, the Fifth Court of Appeals affirmed a trial court’s summary judgment in favor of Phillips 66 on a claim of employment discrimination based on transgender status.  While affirming the judgment for the employer, the Court wrote to reject the district court’s summary conclusion that Title VII prohibited employment discrimination on the basis of transgender status.  In affirming the trial court’s judgment, the appeals court expressly rejected the district court’s summary holding that Title VII prohibits employment discrimination based on transgender status because the court did not address binding Fifth Circuit precedent holding that Title VII does not prohibit sexual orientation discrimination nor distinguish the Wittmer case from that precedent.  Wittmer leaves open the possibility that a federal court in the Fifth Circuit might properly hold that Title VII prohibits transgender employment discrimination so long as the court distinguishes the binding precedent in this Circuit holding that Title VII does not prohibit sexual orientation discrimination (i.e., that Title VII prohibits transgender discrimination but not sexual orientation).

A copy of the opinion can be accessed here.

In a 9-2 vote, the San Antonio City Council voted to require private employers doing business in San Antonio to provide one hour of paid sick leave to employees for every 30 hours worked. The ordinance allows employees to accrue between 48 and 64 hours of paid sick leave to be used if the employee or the employee’s family member is sick or injured; is a victim of stalking, domestic abuse or sexual assault; or otherwise require medical, mental or preventive care.

San Antonio’s ordinance is scheduled to take effect on August 1, 2019 but employers with five or fewer employees will have until 2021 to comply.

A copy of the ordinance can be found here.

Earlier this year, the City of Austin passed the first local ordinance requiring employers in Austin to provide paid sick leave to its employees.  The law was scheduled to take effect on October 1, 2018.  Late last week, the Austin Court of Appeals issued a temporary stay of the ordinance while the Texas Association of Business’ interlocutory appeal of the trial court’s denial of an application for temporary injunction is heard.  This will likely stay enforcement of the ordinance for several months and could extend past the October 1, 2018 effective date.

Meanwhile, San Antonio recently passed a similar sick pay ordinance.   The Texas Legislature is likely to consider bills prohibiting local municipalities from passing such ordinances when it convenes in Summer 2019.

The Court’s order can be downloaded here.

I’m traveling for work this week but today’s Supreme Court opinion is one I have been waiting for all term. In Epic Systems v. Lewis, the Court held that arbitration agreements between employees and employers that require mandatory arbitration of disputes can also require that all disputes be arbitrated individually and not as a class or collection action.  The impact of this case is significant in managing potential claims arising under the Fair Labor Standards Act and Fair Credit Reporting Act.  More on this case later.

You can read the full opinion here.

One of the biggest criticisms I have of the FLSA is that it provides no safe harbor or protection for an employer, who having realized it made a wage and hour mistake, to voluntarily self-report and correct its mistake. Instead, it can encourage employers who learn of a potential FLSA violation that has not otherwise been discovered to continue its current practice hoping that the violation will not be discovered.  This week the U.S. Department of Labor announced its Payroll Audit Independent Determination (PAID) program that takes a step in providing employers with an incentive to voluntarily identify and self-correct wage and hour violations.  The stated purpose of the program is to

Continue Reading Department of Labor Rolls Out Pilot Program for Employers to Correct Inadvertent Wage and Hour Violations

In Texas, absent a valid noncompete, an at-will employee is generally free to compete with the former employer so long as the employee does not take or use the company’s confidential information or trade secrets. Notwithstanding this general rule, employees also have common law fiduciary duties that limit what activities they can engage in prior to resigning employment.  The level of fiduciary duty owed to the company will depend on the duties and responsibilities of the employee and the position within the company.  Employees may generally make preparations to compete while still employed by a company but cannot actively compete while still employed.  What constitutes preparing to compete versus actively competing can often be a blurry line.  A recent case from the El Paso Court of Appeals helps to bring the line into focus.

Continue Reading El Paso Court of Appeals Clarifies Fiduciary Duty At-Will Employees Owe to Employers

This month the City of Austin passed the State’s first municipal paid sick leave ordinance requiring private employers to provide earned sick time to employees. Beginning on October 1, 2018 (and October 1, 2020 for employers with five or fewer employees), employers with employees working in the City of Austin must provide employees with earned sick time.

Continue Reading Austin Passes Law Requiring Private Employers to Provide Paid Sick Leave

The U.S. Department of Labor recently abandoned its six-factor internship test in favor of the seven-factor primary beneficiary test utilized by most Courts. The primary benefit test adopts a temporal limitation for the internship that was not in the old six-factor test and incorporates two elements linking eligibility to the intern’s education programs and academic commitments.  For employers already using internship programs, they should review their policies, agreements and forms to incorporate the new test elements.  Employers considering whether to implement an internship program should tailor the program to insure the individuals can properly be classified as interns rather than employees using the current factors that the DOL described as follows:

  1. The extent to which the intern and the employer clearly understand that there is no expectation of compensation. A promise of compensation, express or implied, suggests that the intern is an employee—and vice versa.
  2. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
  3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
  4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
  5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
  6. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
  7. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.

The analysis remains a fact specific inquiry and is intended to be a flexible test.  You can review the DOL’s Fact Sheet on internship programs here.