Happy New Year, and welcome to Labor of Law, our weekly snapshot of news and trends affecting the L&E community. On the clock this week: California's AB5 faces a 'kitchen sink' suit | Seyfarth's posted its latest EEOC litigation trend report | A judge has blocked California's new arbitration rule | Who Got the Work, and much more.

Tips and feedback are welcome. I'm Mike Scarcella in Washington. You can reach me at [email protected] and on Twitter @MikeScarcella. Thanks for reading!

 

Gibson Dunn Throws 'Kitchen Sink' at California's Landmark Labor Law

 

A team from Gibson, Dunn & Crutcher, including partner Theane Evangelis in Los Angeles, this week sued California on behalf of gig companies Uber and Postmates to block the state's landmark labor law that makes it harder for many companies to classify their workers as contractors and not employees.

"Plaintiffs bring this lawsuit to protect their constitutional rights and defend their fundamental liberty to pursue their chosen work as independent service providers and technology companies in the on-demand economy," the complaint alleged. "AB 5 is an irrational and unconstitutional statute designed to target and stifle workers and companies in the on-demand economy."

The suit alleged a host of constitutional violations—including equal protection and due process. Law professor Josh Blackman, writing at Reason, put it this way: "Attorneys from Gibson Dunn have thrown the entire economic liberty kitchen sink at the law." Over at the Fisher Phillips blog Gig Employer, partner Richard Meneghello noted the California law would take effect Jan. 1—but the new suit's demand for a preliminary injunction could pause enforcement.

The Gibson Dunn case is the biggest suit filed to date, but there are others—and with the law taking effect, many see the litigation threat as lingering for awhile.

"We don't see the legal headwind dissipating in the near term," Daniel Ives, an analyst at Wedbush Securities, wrote Monday in a client note, according to a Business Insider report. "However we do see added risk from aiming to take a greater share of the fare from drivers and expect that the more the companies push on this front, the more drivers will fight back and protest, increasing the likelihood of regulations."

Ives called the lawsuit "a microcosm of fighting possibly the largest risk in the ride-sharing industry and a situation we will be closely watching over the coming months as it plays out in the courts."

>> The Wall Street Journal reports here on the new complaint filed this week.

 

Highlights from Seyfarth's New EEOC Report

 

Seyfarth Shaw's out with a new report looking at EEOC litigation trends. "Fiscal Year 2019 again demonstrated that the EEOC is not isolated from the turmoil in Washington, nor the broader shifting political climate nationally," the report concluded. "Between a political stalemate surrounding the re-confirmation of a former commissioner, the government shutdown, and a general political swirl of issues, the EEOC ran on low fuel for roughly one-third of the fiscal year."

Several takeaways:

>> "Although the total number of filings is down across the board, when considered on a percentage basis, the distribution of cases filed by statute remained broadly consistent compared to FY 2018. Title VII cases once again made up the majority of cases filed, comprising 60% of all filings (as compared with 55% in FY 2018)."

>> "The most noticeable trend of FY 2019 is the marked decrease in coast-to-coast filings compared to past years. Leading the pack in new filings are the Charlotte and Philadelphia district offices, with 15 and 14 filings respectively. The Chicago district office is typically the most prolific filer, but dropped to the shared number three spot along with New York and Houston district offices at 12 filings each."

>> "In FY 2019, the EEOC initiated 8 subpoena enforcement actions. That number is considerably lower than the 18 and 17 enforcement actions that were filed in FY 2018 and FY 2017, respectively."

>> "For several years now, a trend has been developing towards ever-greater discretion regarding the scope and reach of its subpoena power being placed in the hands of the EEOC by the District Courts. If the law continues to develop in this way, it is likely that the EEOC will get more creative and assertive in terms of the types and amount of information it seeks, and the methods it uses to try to collect that information from employers."

 

Who Got the Work

 

>> O'Melveny & Myers partner Anton Metlitsky argued for American Airlines Inc. in a Third Circuit appeal over claims for overtime wages. The court reversed a trial judge who granted class certification. Lee Shalov of New York's McLaughlin & Stern argued for the appellees.

>> "A federal appeals court said public sector unions may invoke a good faith defense to avoid liability for collecting fees from nonmembers to pay for collective bargaining, when the fees had been collected before the U.S. Supreme Court outlawed the practice last year," Reuters reports. Jonathan Mitchell of Mitchell Law PLLC in Austin, Texas, argued for the employees. P. Casey Pitts of Altshuler Berzon LLP argued for the defendants. Read the Ninth Circuit's decision here.

>> Littler Mendelson's Ethan Balsam in Washington is counsel to the National Organization for Women in a labor and employment suit alleging race discrimination and hostile work environment, among other claims. San Francisco-based lawyer Angela Alioto represents the plaintiff. Read the complaint here.

 

Notable Moves & Announcements

 

>> Fisher Phillips said the firm has elected 17 new partners in cities including San Francisco, Philadelphia, Houston and Sacramento. "The 17 new partners span 16 offices across the country and nearly half of this year's class are women, making it one of the most gender diverse partnership classes in Fisher Phillips' history," the firm stated.

>> Jackson Lewis P.C. said Harold Jones has joined the firm as a principal in San Francisco. Harold, who has more than 15 years of management-side counseling and litigation experience, joins from Ogletree Deakins. Jackson Lewis' San Francisco office managing principal Lisa Barnett Sween said: "As our team in San Francisco continues to grow, we are looking for talented laterals who will help our clients successfully navigate difficult legal issues."

 

Around Water Cooler…

Courts and cases

A Small Chicago Law Firm Has Quietly Funded Nearly Two Dozen Anti-Union Lawsuits. "A lawyer who filed 21 class-action lawsuits against unions over the last two years has previously said that his lawsuits were not part of any concerted effort to target public-sector unions and that 'the idea to bring these lawsuits was entirely my own.' It turns out, however, that his lawsuits are backed by a small finance litigation firm in Chicago, according to a court filing that has not been previously reported. The firm, Juris Capital, is in the business of bankrolling litigation upfront, making bets that it will enjoy an ample cut of a plaintiff's proceeds." [The Intercept]

Should Amazon Pay Warehouse Workers While They Wait for Security Screenings? Pa. Supreme Court Will Decide. "Does Amazon have to pay its warehouse workers for the time they spend going though security checks after their shifts? It's a question that's been winding its way through courts across the country in a series of cases for nearly a decade—and the Pennsylvania Supreme Court recently agreed to weigh in." [The Philadelphia Inquirer] More here at The Legal Intelligencer.

Tesla Must Face Lawsuit Claiming Racism at California Factory. "A federal judge rejected Tesla Inc's effort to dismiss claims by two former workers that the California electric car factory where they worked was a hotbed of racial hostility, clearing the way for a possible trial." [Reuters]

Ex-Trump Staffer Suing Over Pregnancy Discrimination. "A spokeswoman and outreach staffer on Donald Trump's 2016 presidential bid, A.J. Delgado, is suing Trump and his campaign for pregnancy and sex discrimination. Delgado's suit, filed Monday in federal court in Manhattan, claims she was sidelined by campaign officials about six weeks after the 2016 election—shortly after she told senior officials that she was pregnant." [Politico] Read the complaint here.

Peter Strzok Accuses the Federal Government of Violating His Rights. "Peter Strzok, the former FBI agent who launched the bureau's Russia probe in 2016 and was fired two years later for sending text messages critical of Donald Trump, has alleged in a new court filing challenging his dismissal that the FBI and Justice Department violated his rights to free speech and privacy." [Politico]

Arbitration disputes

Judge Blocks California's Mandatory Employee Arbitration Ban. A federal judge has halted temporarily California's plans to outlaw mandatory employee arbitration agreements over "serious questions" on the merits of the law raised by business groups, my colleague Alaina Lancaster reports. A hearing is scheduled for Jan. 10. [Law.com] Read the order here.

Gibson Dunn, DoorDash's Ties to New Mass Arbitration Protocol Can Be Explored, Judge Says. A federal judge has ordered the International Institute for Conflict Prevention & Resolution, or CPR, to hand over documents involving input from Gibson, Dunn & Crutcher and DoorDash on a new process for handling mass arbitrations in employment cases. [Law.com]

Gender bias claims

Jones Day Was Top Target for Law Firm Gender Bias Litigation in 2019. The firm settled one lawsuit from a former partner but faced harsh new accusations from two sets of former associates. Morrison & Foerster, Winston & Strawn and Ogletree Deakins also continued to fight off claims over their own treatment of women. [The American Lawyer]

Ninth Circuit Rejects Class Certification of Gender Bias Claims Against Microsoft. A federal appeals court has upheld a ruling undercutting a prospective class action against Microsoft for allegedly underpaying and not promoting nearly 8,600 female employees, my colleague Nate Robson reports. [Law.com] Read the Ninth Circuit's order here.

Federal agencies

Civil Rights Lawyer Seen as Pick for EEOC's Open Democratic Seat. "Jocelyn Samuels, who runs a lesbian, gay, bisexual, and transgender rights think tank in California, is set to be nominated for one of two open seats on the commission, according to a staffer for Sen. Lamar Alexander (R-Tenn.) and other sources familiar with the situation." [Bloomberg Law]

Ruling Blows 'Gaping Hole' in FOIA Shields for Diversity Data. "Federal contractors may have lost certainty that the Labor Department can keep their workforce diversity reports out of the public domain by shutting down FOIA requests, after a federal judge ordered the agency to release that data from 10 companies." [Bloomberg Law]

More Workers Eligible for Overtime Pay in 2020. "More workers will qualify for overtime in the new year under the first federal overhaul of requirements in more than 15 years, an update businesses are taking in stride but that is leaving some workers frustrated they won't see bigger paychecks. An additional 1.3 million U.S. workers will be eligible for overtime pay, or one-and-a-half times their hourly rate when they log more than 40 hours in a week, starting Jan. 1, the Labor Department said." [WSJ]