Labor of Law: 'Roller Coaster Two Weeks' for Gig Companies | That's Chairwoman Dhillon Now | H-1B Litigation | Deloitte Expands US Legal Ambitions
Here's a snapshot of some of the early commentary about state and federal gig-economy regulatory rulings. Plus, the EEOC formally has a new leader, and we've got a roundup of some of the big new cases, including: T. Rowe Price's H-1B suit. Thanks for reading!
May 16, 2019 at 12:00 PM
10 minute read
Happy Thursday everyone, and welcome to Labor of Law. Lawyers for gig companies are grappling with a stream of regulatory developments. Plus: Deloitte's expanded its U.S. legal ambitions in an alliance with Epstein Becker. Janet Dhillon's issued her first public statement as EEOC chairwoman. And T. Rowe Price is suing over an H-1B denial. Scroll down for Who Got the Work, and more. I'm Mike Scarcella in Washington and you can reach me at [email protected] and on Twitter @MikeScarcella. Thanks for reading!
'Roller Coaster Two Weeks for Gig Companies'
Those are the words of Fisher & Phillips partner Richard Meneghello, describinga series of recent actions from federal and state agencies affecting gig-economy companies. Lawyers in this space welcomed a U.S. Labor Department opinion letterthat said one unidentified company's workers can be considered contractors and not employees. Meneghello said gig companies then grimaced when a federal appeals court said California's new worker classification standard can be applied retroactively. (The state's new test makes it harder for companies to classify their workers as contractors.)
And now we learned this week the National Labor Relations Board has issued its own high-value memo, which concluded: Uber drivers are contractors. “The board's recent decision in SuperShuttle squarely supports the conclusion that the extent of company control—by minimally impacting economic and entrepreneurial opportunity—weighs in favor of independent-contractor status,” according to the new memo. Read the advice memo here, and The New York Times has more here.
The advice memo was written by Jayme Sophir, who was appointed to associate general counsel in the Division of Advice in 2017. Sophir joined the division in 1988 as a staff attorney. Before joining the labor board, she was in private practice at Crowell & Moring for several years.
Some of the early commentary:
>> “The advice memo means it is much less likely that a traditional gig economy company, structured in a typical fashion when it comes to workforce operations, will face a valid unionization effort or could be found liable for an unfair labor practice charge,” Meneghello (at left) said. And a downside (or bright side for workers): “While this advice memo might help when it comes to unionization efforts (and perhaps some unfair labor practice charges), it changes nothing when it comes to wage and hour liability under misclassification challenges.”
>> “The advice memo concludes that Uber drivers are independent contractors, not employees, because they can decide where and when to driver for Uber—without acknowledging the ways Uber influences these choices, such as through surge pricing (setting higher prices—and higher driver pay—for certain times and places),” Laura Padin, senior staff attorney at the National Employment Law Project, said in a statement.
>> Trey Kovacs, a policy analyst at the Competitive Enterprise Institute, writes: “Applying the common-law test and identifying entrepreneurial opportunity as the overriding principle is the proper lens through which to evaluate the status of a worker. Under this test, if the employer takes a hands-off approach that allows individuals to create their own schedules, choose work location, and choose which jobs they want to work, there is genuine entrepreneurial activity taking place.”
>> Sejal Singh writes at the blog On Labor: “The NLRB's decision governs whether drivers are employees under federal labor law (which concerns the right to organize a union), but not under employment law (such as FLSA and other minimum wage laws). This decision thus does not change the status of tens of thousands claims that Uber drivers have brought alleging that they were misclassified under employment law—but last month, the Department of Labor issued an opinion letter saying that it believes gig workers in the 'sharing economy' to be independent contractors under federal employment law, too.”
Dhillon Takes Oath as New EEOC Chairwoman
Former Burlington Stores general counsel Janet Dhillon (above) is now formally chair of the EEOC. She was sworn in Wednesday.
Here's the first press statement from Dhillon:
“In the more than 50 years since the EEOC was founded, the country has made great strides toward achieving the goal of equal opportunity in the workplace. Yet, unfortunately, the goal of a nondiscriminatory workplace has not been fully achieved. Notwithstanding the tremendous efforts of many, including those here at the EEOC, there continues to be unlawful discrimination in the workplace. This discrimination is illegal, economically counterproductive, and corrosive to the very fabric of our society.”
Dhillon comes to the EEOC with a long background in private law and at in-house legal posts. She practiced at Skadden, Arps, Slate, Meagher & Flom for 13 years before later serving as general counsel and chief compliance officer at US Airways Group Inc. and general counsel to JC Penney Company Inc. Dhillon reported earning more than $1.5 million in salary from New Jersey-based Burlington Stores. As EEOC chair, she'd be expected to make about $172,100. (Read her financial disclosure here.)
Dhillon's arrival—joining Victoria Lipnic and Charlotte Burrows—returns a quorum to the commission, the first time since January. Lipnic had been serving as the acting chair.
“The EEOC's enforcement efforts have remained robust under the current administration, and the agency has continued to post significant results. Employers certainly should not expect the EEOC's overall direction and enforcement efforts to shift dramatically with Dhillon as chair, but, as noted above, we may see some changes in the agency's approach to both policy and litigation enforcement under her leadership,” a team from Seyfarth Shaw—Christopher DeGroff, Michael Jacobsenand Gerald Maatman Jr.—said in a recent advisory.
>> Meanwhile, there's no action yet in EEOC's appeal of the reinstatement of the Obama-era pay-data collection rule. The EEOC told a D.C. federal trial judge this week that the agency is taking steps to determine whether it is “on track” to complete the data collection by Sept. 30.
Who Got the Work
>> Lawyers from Morgan, Lewis & Bockius—including partner Eleanor Pelta and Daniel Schaeffer—filed suit Wednesday in Washington on behalf of T. Rowe Price Associates Inc. against U.S. immigration officials. The complaint challenges the denial of a petition seeking approval of H-1B classification for a would-be employee in the role of senior systems security analyst. Pelta is co-leader of the firm's global immigration practice.
>> A Manhattan federal judge has kept alive workplace surveillance claims that an asset management firm unlawfully accessed a senior director's computer and two hard drives. The judge, John Keenan of U.S. District Court for the Southern District of New York, said the suit from Paul Iacovacci, an ex-managing director at Brevet Capital Management LLC, can proceed parallel to a state action alleging unlawful termination. Keenan did not rule on the merits of Iacovacci's federal claims under the Computer Fraud and Abuse Act. Krieger Kim & Lewin represents Iacovacci. Biedermann Hoenig Semprevivo represents Brevet. My colleague Tom McParland has more here on the ruling.
>> “Western Digital Corp. is accused in a new class lawsuit of systemic bias against women in its workforce,” Bloomberg law reports. The complaint was filed May 14 in the Central District of California by Sanford Heisler Sharp and Medina Orthwein LLP. Attorneys from O'Melveny & Myers represent Western Digital.
>> The firm Arnall Golden Gregory is representing a former SEC employee in a suit, filed Wednesday in U.S. District Court for the District of Columbia, that alleges wrongful termination and discrimination. The plaintiff, an accountant, was an employee at the agency from 1990 to 2018.
>> “A former Spectrum sales executive in San Antonio says in a federal lawsuit that she was fired in retaliation for reporting alleged securities fraud to her bosses,” according to the San Antonio Express-News. The former employee, Hether McCullar, is represented by Lawrence Morales II. Read the complaint here. Paulo McKeeby, a Morgan, Lewis & Bockius partner in Dallas, is on the team defending the company. A spokesperson for Spectrum said the company does not comment on pending litigation.
>> Lawyers from Holland & Knight, including employment partner Sara Begley in Philadelphia, are defending the law firm Gibbons in a gender discrimination suit lodged by a onetime associate. The former associate, Jennifer Seme, represented by Kate Oeltjen of Console Mattiacci Law, sued Gibbons in February. Lawyers for Gibbons have filed papers asking the U.S. District Court for the Eastern District of Pennsylvania to compel arbitration.
Around the Water Cooler
>> Deloitte Expands US Legal Ambitions With Epstein Becker Alliance. “Employment law and workplace services are next on the agenda for Deloitte, as the Big Four firm strategizes over how to deliver legal services in the United States to its global clients. Nearly a year after announcing a first-of-its-kind alliance with U.S. immigration firm Berry Appleman & Leiden, it's taking a similar approach to employment issues through a new alliance with Epstein Becker Green.” [Law.com]
>> Top Aide to Labor Secretary to Depart After Clash With White House. “Nick Geale (at left), the top aide to Labor Secretary Alexander Acosta, is leaving the Trump administration after a clash with White House officials who regarded him as personally difficult and an impediment to President Trump's deregulatory agenda, according to sources with direct knowledge.” [Axios] More here from Bloomberg Law: “Geale is leaving the department at the end of the month, an agency official confirmed. The announcement comes after a White House Office of Management and Budget investigation into complaints that Geale cultivated a threatening, hostile work environment and misled White House staff about progress on DOL policies, the sources said.”
>> Walmart Faces New Round of Gender Discrimination Suits Based on 2001 Dukes Complaint. “In the footsteps of Dukes several hundred women across a dozen states or more are filing individual discrimination suits against Walmart, according to Christine Webber, a civil rights lawyer and partner with Cohen Milstein Sellers & Toll in Washington, D.C.,” my colleague Sue Reisinger reports. [Corporate Counsel]
>> Lawyers Are Uniquely Challenging Audience for Anti-Bias Training. “In response to the #MeToo movement, a surge in discrimination lawsuits against Big Law, and pressure from clients to improve diversity, firms are increasingly seeking out unconscious bias training for their lawyers and staff. But some experts say lawyers require a slightly different training approach.” [Bloomberg Law]
>> George Washington University Loses Bid to Toss Pay Bias Case. “Sex discrimination claims against George Washington University for alleged preferential treatment given to a male athletics department employee will proceed, a federal court in Washington ruled. The Equal Employment Opportunity Commission stated plausible claims that the university violated the Equal Pay Act and violated the civil rights of staffer Sara Williams by denying her advancement on the basis of her sex, the U.S. District Court for the District of Columbia said May 8.” [Bloomberg Law]
Notable Moves and Announcements
>> Baker & Hostetler, which continues to grow its West Coast presence, has picked up Michael Chamberlin from Winston & Strawn's Los Angeles office, where he served as the co-chair of the office's labor and employment practice, my colleague Xiumei Dong reports.
>> Littler Mendelson has added Mark Romeo as a shareholder in the firm's Irvine, California, office. Romeo was previously a partner at Crowell & Moring.
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Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
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