Welcome back new and returning readers of Labor of Law, our weekly look at news and trends affecting the L&E community. On the clock this week: Littler and Missouri quarrel • 5th Circuit looks anew at age bias case • Jones Day defends pay model | Who got the Work, notable moves and 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!

Missouri Rebuffs Littler's Claims About Financial Incentives

The state of Missouri is pushing back on Littler Mendelson's claims that the law firm is owed at least $1.5 million in financial incentives for opening a back-office operations center in Kansas City, my colleague David Thomas reports at The American Lawyer.

Littler and the state are at odds over how many jobs the firm was obligated to create in order to receive a total of $14 million in financial incentives from the Missouri Works Program. The San Francisco-founded firm has already received some of the $14 million but claims the state is withholding a portion of the incentives.

A state official said Littler was obligated to create 476 jobs through the August 2015 opening of its global services center.

Maggie Kost, the director of strategy and performance for Missouri's Department of Economic Development, said their incentive programs are structured "to ensure that companies keep their commitments or they can't receive benefits. Because of these protections, the state isn't out a dime for the jobs that weren't created by the company."

But Littler has maintained that it was only obligated to create 275 jobs. The other 201 jobs the state is referencing were part of an agreement that was never signed, Littler alleged in a Dec. 31 lawsuit filed in Cole County, Missouri. In the lawsuit, Littler is seeking a court order that allows it to receive all of the $14 million in incentives for creating at least 275 jobs.

5th Circuit Will Rehear Arbitration Dispute

The U.S. Court of Appeals for the Fifth Circuit said it will rehear a federal age discrimination case against OneMain Financial Group LLC after ruling that a former employee should have a fresh chance to argue against mandatory arbitration.

The panel—Judges E. Grady Jolly, Gregg Costa and James Ho (above)—on Jan. 24 withdrew its original ruling and stated: "The clerk is directed to expedite this case and set it for oral argument on the next available calendar." The case will be reassigned to a new panel.

The panel had ruled in favor of the former employee, Cathy Bowles, in June. Bowles, represented by Kenneth Rector of Bailess & Rector, had objected to a trial judge's ruling compelling the arbitration of her age discrimination claim.

Rector argued there was never a meeting of the minds and that the formation of the agreement was procedurally unconscionable. The appeals court, in a ruling that Jolly wrote for the panel, agreed. The panel ordered a Mississippi trial judge to decide the merits of Bowles's procedural unconscionability objection. "We have nothing to say about the merits of that question," Jolly wrote in June's ruling.

OneMain Financial's lawyers at Ogletree, Deakins, Nash, Smoak & Stewart quickly cried foul. Kim Hodges, lead counsel to OneMain and the Ogletree office managing shareholder in Memphis and Jackson, Mississippi, urged the appeals court to reconsider its decision. Hodges argued "procedural unconscionability is a defense to the 'validity' and 'enforceability' of a contract, not a challenge to the contract's existence."

Rector had told the court it got the decision right the first time and there was no need to reconsider. "Bowles contends that a contract was never formed because the dealings of the parties related thereto was attended by significant unconscionability," Rector told the panel. "As a result, this court correctly determined that the question of whether or not a contract was created between these parties is a question for the courts and not the arbitrator."

Hodges of Ogletree told the court Wednesday that OneMain would anticipate filing new briefing by Feb. 21. "It would also greatly assist the parties if the court were to inform the parties whether there is any particular issue upon which it would like supplemental briefing, as the basis for the reassignment to the new panel is not entirely clear to the parties," Hodges wrote.

Who Got the Work

>> Lawyers from Cozen O'Connor, including Anneliese Wermuth, vice-chair of the firm's national labor and employment team, advocated for Facebook Inc. in an overtime wages dispute in the U.S. Court of Appeals for the Seventh Circuit. The court ordered an Illinois trial judge to take a fresh look at the issuance of collective action notices going to any current or former worker who'd signed a mandatory arbitration agreement. Teresa Becvar of Stephen Zouras LLP argued for plaintiff Susie Bigger. Read Facebook's brief here, and Bigger's brief here.

>> Littler Mendelson shareholder Richard Harris represents Philadelphia plaintiffs firm Silvers, Langsam & Weitzman, which is seeking summary judgment in a paralegal's harassment suit. The firm contends "discrete incidents of merely crude comments" in her complaint do not constitute pervasive conduct, my colleague Lizzy McLellan reports. The complaint was filed last year U.S. District Court for the Eastern District of Pennsylvania. Marisa Hermanovich of Costello & Mains represents the plaintiff.

>> The U.S. Court of Appeals for the First Circuit has upheld summary judgment in favor of the administrator of the U.S. General Services Administration in a sex and age discrimination suit. Ana Muñoz of Zalkind Duncan & Bernstein advocated for the former employee, a contract specialist at the GSA. Erin Brizius, an assistant U.S. attorney, was counsel to the GSA.

Around the Water Cooler

Courts and cases

Jones Day Says Black Box Pay Model Keeps 'Anger,' 'Ego' at Bay. Jones Day is again defending its long-running practice of keeping all compensation decisions confidential, doubling down on its pursuit of sanctions against the Sanford Heisler Sharp attorneys who are litigating a $200 million gender discrimination lawsuit against the firm. In a new filing Jan. 24 in Washington, D.C., federal court, the firm asserted that the plaintiffs had ample opportunities to identify facts that disprove their "inferences" that it systematically underpays women. [Law.com]

Justices Eye Another ERISA Case, Signal Interest in Penn Dispute. "Penn's petition asks the justices to correct errors in how the U.S. Court of Appeals for the Third Circuit handles allegations of fiduciary breach under the Employee Retirement Income Security Act. The Third Circuit's decision greenlighting the Penn workers' ERISA claims departs from settled law governing how courts evaluate complaints and "sows enormous confusion" for retirement plan fiduciaries, Penn said." [Bloomberg Law]

Chipotle Cited With 13,253 Child Labor Law Violations in Massachusetts. "Chipotle agreed to pay a $1.3 million fine for more than 13,000 child labor violations at several of its Massachusetts locations." The company said in a statement that it is "committed to ensuring that our restaurants are in full compliance with all laws and regulations." [CNN] NYT has more here. Read the settlement agreement here.

Technology

A Warehouse Robot Learns to Sort Out the Tricky Stuff. "While it may not seem like much, this component-sorting robot is a major advance in artificial intelligence and the ability of machines to perform human labor. As millions of products move through warehouses run by Amazon, Walmart and other retailers, low-wage workers must comb through bin after bin of random stuff—from clothes and shows to electronic equipment—so that each item can be packaged and sent on its way. Machines had not really been up to that task, until now." [NYT]

To Fight New Employment Law, Uber Pits California Drivers Against Each Other. "Uber's decision to allow drivers to set their own rates in three California markets is triggering fears of a race to the bottom in pricing. The test, taking place in Sacramento, Santa Barbara and Palm Springs, is one of Uber's responses to AB5, the new California law requiring companies to make workers employees or establish clearly that they are independent contractors. That requires, among other qualifications, demonstrating the workers are free from the company's control." [The Washington Post]

How AB5 Has Instilled Fear and Confusion in California's Arts Community. "AB5, the state's new gig economy law, is intended to protect workers. But small theater, opera and dance companies worry it could ruin them." [Los Angeles Times]

California's AB5 and Gig Work: What Now? "In addition to increased labor costs, employers are now faced with compliance risks, as many race to implement processes and procedures that they had previously never gave a moment of thought to." [Benefits Pro]

Federal agencies

Victoria Lipnic Won't Seek Third Term On EEOC. "Without Ms. Lipnic, the only other EEOC Commissioners would be Chair Janet Dhillon (R), a Trump appointee, and Charlotte Burrows (D), an Obama appointee. Two Commissioner slots are currently vacant, and there will be three vacancies when Ms. Lipnic leaves." [Constangy, Brooks, Smith & Prophete]

McDonald's Says Ethics Claims in NLRB Case Don't Warrant Fresh Look at Settlement. "McDonald's lawyers at Jones Day in a brief filed on Wednesday asked the board to reject Fight for $15's motion for reconsideration of a December decision that approved the company's settlement of the case. The office of NLRB General Counsel Peter Robb made similar arguments in a separate brief." [Reuters]

NLRB Rules Against Hearst in Union Case. "A Hearst union would be a big win for the Writers Guild of America East, with some 550 people spanning 24 brands, making it what's believed to be the biggest union in digital media." [Business Insider]

Workplace policies

Amazon Employees Launch Mass Defiance of Company Communications Policy in Support of Colleagues. "More than 350 Amazon employees violated the e-commerce giant's communications policy Sunday, in an unprecedented public display of support for colleagues who were warned they could be fired for speaking out to criticize the company's climate practices." [The Washington Post]

Notable Moves & Announcements

>> Ogletree, Deakins, Nash, Smoak & Stewart said John Gerak, former managing shareholder of the firm's Cleveland office, has been elected as managing director. Gerak, who succeeds Chuck Baldwin, will serve with Joseph Beachboard as co-managing director. Baldwin served as managing director of Ogletree from 2016 to 2020.

>> Littler Mendelson has hired Jacqueline Mrachek as a shareholder in the Minneapolis office. Mrachek formerly co-led the employment litigation practice at Faegre Baker Daniels. Littler's office managing shareholder in Minneapolis, Susan Fitzke, said: "We're excited to have an attorney of Jacqueline's caliber join the firm and further bolster the depth of our Minneapolis office." Littler also has added Dane Steffenson as special counsel in the firm's Atlanta office. Steffenson, a longtime former trial attorney at the U.S. Labor Department, will focus on ERISA, wage-and-hour and OSHA litigation.

>> Fisher Phillips said it's brought on Michael Miller as senior counsel and Timothy Tack as partner in the firm's Tampa office. Both attorneys work in the professional employer organization industry in Florida and across the country. Miller and Tack joined from Miller Tack & Madson.

>> Clark Hill has bolstered its budding immigration practice by combining with a Los Angeles boutique, the Law Offices of Carl Shusterman, and adding the firm's five lawyers. Shusterman joined the Detroit-based firm as senior counsel this week, along with senior attorneys Angeline Chen and Cheryl Gertler, and associates Jennifer Cohn Rozdzielski and Lorraine Tong. Michael Nowlan, a co-leader of Clark Hill's immigration law practice, stated: "It's a great combination for us. The team has great experience in employment-based cases, in family-based cases and in removal-based cases."

>> Baker McKenzie has added employee benefits and compensation partner Thomas Asmar in Silicon Valley. Asmar joins from Skadden, Arps, Slate, Meagher & Flom. In a statement, George Avraam, chairman of Baker McKenzie's North America employment and compensation practice, said: "As our clients undertake significant cross-border transactions, they look to us for guidance on the complex employment, compensation, and benefits issues that often arise in these deals. Tom's deep experience in this area will be extremely valuable to our team as we continue to enhance and expand our M&A services."

>> Dechert said Howard Klein has joined the firm's employee benefits and executive compensation group as a partner in New York. Klein arrives from Freshfields Bruckhaus Deringer US.

>> Nancy Platt has been appointed associate general counsel of the NLRB division of legal counsel. Platt, the agency said, will have "oversight responsibility for the NLRB's Contempt, Compliance, and Special Litigation Branch, Freedom of Information Act (FOIA) Branch, and E-Litigation Branch." Platt first joined the NLRB as a staff attorney in 1991 in the special litigation branch.