Welcome to Labor of Law. The gig economy got a gut check in court this week—we take a peek at the cases and issues in play in California and at the NLRB. Also: LGBT workplace considerations as courts embrace greater protections. And scroll down for who got the work in some big cases making headlines.

➤➤ I'm Erin Mulvaney in Washington, D.C., covering labor and employment from the Swamp to Silicon Valley. Follow this weekly newsletter for the latest analysis and happenings. If you have a story idea, feedback or just want to say hi, I'm at [email protected] and on Twitter @erinmulvaney. Thanks always for reading. Let's get started.

 

Gig Economy's Central Labor Question Debated

 

A central labor question at the heart of gig-economy litigation is how to define the workforce. Innovative companies say their independent contractors enjoy certain flexibilities without having to answer to a boss. Worker advocates argue these contractors are really employees, and that companies should treat them as such and provide benefits including health care and workers compensation.

The California Supreme Court ruling this week on worker classificationcaptured this tension—and the issue is unfolding in federal courts and at the NLRB. Looming at the agency: The federal labor board is considering a case—Velox Express Inc.—that asks whether intentional misclassification is, alone, a violation of labor law. That's how an administrative law judge concluded, and the decision rattled the business community.

The board got a flood of amicus briefs this week addressing the question. Here's a look at some of what the interested sides are telling the agency:

NLRB General Counsel Peter Robb's position on the issue does not support the ALJ's finding that misclassification is itself a labor violation. Still, the general counsel's office is arguing that medical supply delivery company Velox, in this case, should still be on the hook. Arthur Amchan, the administrative law judge in the case, said the issue was a “close call” and acknowledged “very often the line between 'employee' and 'independent contractor' is a fine one.”

The HR Policy Association said in an amicus brief: “The decision rendered by Judge Amchan could have a significant adverse impact on these relationships, resulting in considerable restructuring or termination of potentially thousands of independent contractor arrangements.”

The AFL-CIO's brief, written by Lynn Rhinehart, James Coppess and former NLRB member Craig Becker, argued the board should not make any grand announcements in the Velox case given “the concrete circumstances of this case are so unusual.”

Still, the union argued that the board should uphold the ALJ's ruling that Velox violated labor law in misclassifying its employees as independent contractors.

➤➤ How the NLRB resolves the case could have implications for the gig economy. And that gets us to California, where a highly anticipated ruling this week was accompanied with big pronouncements of doom for gig companies.

In Dynamex Operations West v. Superior Court, the state Supreme Court adopted a more rigid standard for determining when a worker should be considered a contractor. The new test, many observers predict, will make it more difficult for companies to call its workers independent contractors. I caught up with several employment attorneys after the ruling to find some takeaways for what's next. Long story short: more litigation is sure to follow.

Anthony Amendola, a partner at Mitchell Silberberg & Knupp in Los Angeles, says California employers must redouble efforts to properly classify workers and should assess the many significant risks associated with misclassification. In California, those penalties can be steep.

“The decision will pose significant challenges for gig economy businesses, which engage a significant number of workers as independent contractors,” Amendola says. “In particular, for many of these businesses, it will be difficult to meet the 'B' component of the ABC test, which requires the worker to perform work that is “outside the usual course of the hiring entity's business.”

Anne Barnett, a principal at Polsinelli in San Francisco and Los Angeles, says the boundaries of the California Supreme Court's “ABC” test are not clear. Companies with deeper pockets might test the waters.

“The reality is that the justices didn't use examples that are really modernized or relevant to the gig economy,” Barnett tells me. “Ultimately there will be an influx in litigation, particularly class actions. As a result, we'll have better boundaries of the test.”

LGBT Policy Considerations

Courts increasingly are adopting more expansive interpretations of Title VII of the Civil Rights Act to include protections for sexual orientation and gender identity. Several big federal appeals decisions in the last year highlight this trend—and we're waiting for one of these cases to reach the U.S. Supreme Court.

The Second Circuit's decision in March in Zarda v. Altitude Express said federal civil rights law prohibits discrimination on the basis of sexual orientation. And the Sixth Circuit's ruling in EEOC v R.G. & G.R. Harris Funeral Homes Inc. held that gender identity is protected. The Religious Freedom Restoration Act can't be applied to discriminate against transgender workers, the court said.

A team from Skadden, Arps, Slate, Meagher & Flom offers some guidance in a new client advisory: Although there is some divide over sexual orientation, gender identity protection under Title VII has been held up by at least five circuit courts. The Skadden lawyers say employers should allow transgender workers to wear clothing associated with his or her identity, allow them to use restrooms associated with their identity and use correct pronouns. In addition, such issues should be written into training programs.

“In light of the current uncertainty regarding the ultimate interpretation of Title VII as it applies to LGBT+ individuals, employers should regularly review their policies to ensure that adequate protections are provided to employees on the basis of their LGBT+ status. To the extent not already done, employers should consider including sexual orientation, gender identity and gender expression (among other protected categories) in nondiscrimination and non-harassment policies and also providing for specific reporting procedures and prohibitions against retaliation for reporting such complaints.”

➤➤ If you missed it, Alison Frankel at Reuters has a piece looking at how one federal judge in New York grappled with the use of pronouns in a transgender person's case.

 

 

Who Got the Work

 

➤➤ ”Mommy track is a dead end” at Morrison & Foerster, associates claim in a new lawsuit in San Francisco federal district court. Sanford Heisler Sharp is representing the female plaintiffs. Morrison & Foerster said in a statement that the firm “has a long and proven track record of supporting and advancing our associates as they return from maternity leave,” the firm said. “We vigorously dispute this claim and are confident that the firm will be vindicated.”

➤➤ Philadelphia can't ban employers from asking about prior salary history, a federal judge says, but companies can't use that information to base pay decisions. Miguel Estrada of Gibson Dunn & Crutcher represented the Chamber of Commerce for Greater Philadelphia as a plaintiff. Read the ruling here.

➤➤ The Washington-based civil rights firm Relman, Dane & Colfax and Laura Murphy, director of the ACLU's Washington Legislative Office, will lead a civil-rights internal audit at Facebook Inc., per Axios. Additionally, the company has brought on a team from Covington & Burling—including former Arizona Republican Sen. Jon Kyl—to form a conservative-bias advising group.

➤➤ A Pennsylvania federal judge has doubled overtime awarded in a oil and gas workers' FLSA case. The law firm Jackson Lewis represented defendant Oil States Energy Services LLC, and a team from Williams & Connolly represented the plaintiffs.

➤➤ Omeed Malik, the former Bank of America executive who was reportedly fired amid a sexual misconduct investigation, has brought a defamation claim against the bank, according to the WSJ. Malik is represented by John Singer of Singer Deutsch LLP.

Around the Water Cooler

• Employment lawyers await the Supreme Court's ruling on class action waivers. [The American Lawyer]

• Littler Mendelson makes the Netherlands its next European outpost. The firm arrived in the continent via a combination with Germany's Vangard in late 2015 and swiftly expanded into France, the U.K., Italy. [The American Lawyer]

• Meet #MeToo Lawyer Tina Tchen. Head of the Chicago office of BuckleySandler LLP, Tchen worked with the National Women's Law Center to create a legal defense fund—which has as many as 2,000 clients—to fight sexual harassment. [Bloomberg]

• In a Starbucks case, the California Supreme Court weighed off-the-clock time. My colleague Ross Todd in San Francisco covered justices in California's high court grappling with how the state's worker-friendly wage-and-hour laws apply to employees required to do brief off-the-clock tasks before or after their work shifts. [The Recorder]

• Perpetuating the pay gap. The Upshot looks at the use of prior salary history during the hiring process. “When employers don't rely on past pay as a proxy for how valuable someone is, they might consider a wider variety of candidates.”
[New York Times]

• What the Bill Cosby trial means for the #MeToo movement. The entertainer will likely try to overturn his conviction arguing he did not get a fair trial in the wake of the movement that sparked after his first trial ended in a hung jury. This could provide a test for #MeToo. [Hollywood Reporter]

• How Ogletree Deakins overcame legal AI burnout. The labor and employment shop has become the first law firm to publicly license document-drafting technology from LegalMation, which earlier this month signed up Walmart Inc. as its first legal department client. [The American Lawyer]

Thanks for reading. That's all for this week. Shoot me any tips, feedback or ideas to [email protected]