Welcome back to Labor of Law, our weekly look at news and trends affecting the L&E community. On the clock this week: EEOC lines up against job-bias claim at SCOTUS; PwC loses rehearing petition in ERISA case; California judge won't enjoin AB5; Baker & Hostetler partner's up for a Texas court seat; and scroll down for Who Got the Work.

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!

 

 

EEOC Abandons Defending Job-Bias Ruling

The Equal Employment Opportunity Commission supported Kristen Biel's disability job bias claim in the lower courts as her religious school employer sought to bar it. But with a change in administrations, the agency's support has vanished in the U.S. Supreme Court.

U.S. Solicitor General Noel Francisco, in a friend-of-the-court brief, told the justices this week that the government agrees with St. James School's argument that the "ministerial exception" to federal workplace discrimination laws precludes Biel's lawsuit. The EEOC's general counsel, Sharon Gustafson, signed onto the brief.

In the 2012 case Hosanna-Tabor Evangelical Lutheran Church v. EEOC, the high court unanimously ruled for the first time that the First Amendment bars employment discrimination claims when the employer is a religious group and the employee is one of the group's ministers. The opinion, written by Chief Justice John Roberts Jr., used a multi-factor analysis to decide whether the exception applied.

Biel, whose teaching contract was not renewed shortly after she informed the school that she needed time off for breast cancer surgery and chemotherapy, died last summer. Her husband, representing her estate, is the respondent in the high court case St. James School v. Biel.

St. James School's appeal is one of two cases—the other is Our Lady of Guadalupe School v. Morrissey-Berru—that ask the justices to revisit how the ministerial exception should be applied. Agnes Morrissey-Berru claimed her teaching contract was not renewed because of her age. The U.S. Court of Appeals for the Ninth Circuit ruled in favor of both employees based on the totality of the circumstances surrounding their jobs.

In the high court, the schools contend that the ministerial exception applies when the employee carried out important religious functions, including leadership, worship, ritual and expression. Eric Rassbach of the Becket Fund for Religious Liberty is counsel to both schools. Jennifer Lipski of JML Law in Woodland Hills, California, represents Biel and Morrissey-Berru.

In the government's brief supporting both schools, Francisco said the ministerial exception applies to any employee "who preaches a church's beliefs, teaches its faith, or carries out its religious mission." In close cases, he contends, "facts that demonstrate a religious organization sincerely regards its employee as performing such important religious functions should be dispositive."

The two cases have been consolidated for oral arguments April 1. —Marcia Coyle

 

 

2nd Circuit Won't Redo 'Unprecedented' PwC ERISA Ruling

The U.S. Court of Appeals for the 2nd Circuit on Wednesday declined to revisit a decision in December in an ERISA matter involving former employees of PricewaterhouseCoopers LLP.

The plaintiffs, represented by Julia Penny Clark of Bredhoff & Kaiser, alleged the terms of PwC's retirement benefit accumulation plan for employees do not comply with ERISA's vesting and accrual requirements. The appeals panel concluded that ERISA permits a two-step remedy of reformation and enforcement.

PwC's lawyers at Gibson, Dunn & Crutcher—including Daniel Thomasch, Richard Mark and Amer Ahmed—called the 2nd Circuit's ruling "unprecedented."

The Gibson Dunn lawyers argued in their petition for rehearing: "The panel opinion is the first anywhere to hold that reformation of a benefit plan is 'categorically available' under ERISA § 502(a)(3) to a Rule 23(b)(2) class composed only of former plan participants, and based solely on a claim that the plan violated ERISA, without any showing of fraud or mutual mistake."

We'll watch out for any petition at the U.S. Supreme Court.

 

 

California Judge Spurns AB5 Injunction

Uber and Postmates failed to convince a federal judge to halt enforcement of a California employment law that they claim would upend their ride-hailing businesses. My colleague Amanda Bronstad has more here at Law.com.

At a hearing last week, Theane Evangelis, a partner at Gibson, Dunn & Crutcher's Los Angeles office, said California legislators targeted her clients and other ride-hailing firms when they passed Assembly Bill 5, which reclassified certain independent contractors as employees. Backed by the U.S. Chamber of Commerce and others, Evangelis, who also represents two drivers, sought a motion for preliminary injunction to halt the law, which became effective Jan. 1.

U.S. District Judge Dolly Gee of the Central District of California appeared unconvinced. "I can't second guess the legislature," the judge said at the hearing, in Los Angeles. She said that while Uber and Postmates had presented evidence of "irreparable harm," they failed to show a likelihood of success on the merits.

Gee (at left) on Monday denied the plaintiffs' request for an injunction. Read her full order here.

"Plaintiffs have not shown serious questions going to the merits—the critical factor in determining whether to issue a preliminary injunction—and, though Company Plaintiffs have shown some measure of likelihood of irreparable harm, the balance of equities and the public interest weigh in favor of permitting the State to enforce this legislation," Gee wrote.

Fisher Phillips' Richard Meneghello weighs in at the firm's Gig Employer Blog: "Gig economy companies across the state have no immediate avenues to escape the grasp of the ABC test, which became state law on January 1. If you were waiting to determine whether to make any adjustments to your business model in the hopes that the law wouldn't apply to your business, the time is now to give your attention to compliance solutions."

A team from Bryan Cave Leighton Paisner, representing independent contractors, filed an amicus brief backing the challengers. Lawyers Littler Mendelson filed an amicus brief for the U.S. Chamber and other business advocates supporting the challengers. We'll track developments in the case.

>> More reading here at The New York Times

 

 

Who Got the Work

>> Jackson Lewis P.C. is representing Cigna in a whistleblower case pending before a U.S. Labor Department administrative law judge. Laura Calhoun represents the plaintiff, a short term disability claim manager. "Complainant's pleading specifically states that he reasonably believed that the facts he reported and complained about constituted conduct that falls within the activity specified by the Act. Accordingly, his complaint does allege facts that encompass the essential elements of a claim upon which relief can be granted," Patrick Rosenow, the ALJ, said in a ruling late last year. Rosenow concluded the complainant "is entitled to adduce evidence that supports his allegation."

>> Robert King and Garrett Broshuis of Korein Tillery in St. Louis are representing minor league baseball players in a wage-and-hour petition against the Kansas City Royals Baseball Corp. at the US. Supreme Court. "Thousands of professional baseball players—minor leaguers—live below the poverty line. They perform work for no pay during training seasons. They do so because of respondents' admitted uniform wage policies that affect every play in minor league baseball," King, counsel of record, told the justices.

>> Lawyers from Thompson & Knight in Dallas and Hall & Evans in Denver are representing BNSF Railway Co. in a whistleblower case in Colorado federal district court. The U.S. Labor Department recently announced: "The U.S. District Court for the District of Colorado has ordered Burlington Northern Santa Fe Railway Company (BNSF) to pay $696,173 in lost back and future wages to a former employee who reported track defects, bringing the total paid to the whistleblower to more than $1.74 million." Nicholas Thompson of Moody Law Firm in Virginia represents the plaintiff.

>> An administrative law judge at the U.S. Labor Department recently issued a 22-page opinion dismissing Sarbanes-Oxley whistleblower claims against Medpace Holdings Inc. The company, represented by Jeffrey McSherry of Bricker & Eckler in Cincinnati alleged the employee was terminated for poor conduct and performance. Mark Byrne of Jacobs, Kleinman, Seibel and McNally in Cincinnati, who represented the complainant, said the company fired his client in retaliation for reporting deficiencies in internal controls to Medpace management.

 

 

Around the Water Cooler

Workplace policies

The D.C. Lawyer Using a D.C. Way to Make Hollywood More Inclusive. Is It Working? "The inclusion rider is a way to make change project by project, which is not as onerous as trying to change an entire industry's culture. It's also a tool that can be used by big-shot stars who have huge influence over the entire workplace aspect of a film. Kalpana Kotagal (above) tried to blend a wonky, D.C. approach with a very Hollywood one." [The Washington Post]

Young Workers Seek Mental Health Accommodations, Employers Try to Keep Up. "Managers and younger employees are struggling to adapt as a generation of people with higher rates of reported mental illness enter the workforce. Many of these new workers are coming to offices from colleges and high schools where they received accommodations, such as extra time to take tests or complete assignments—in some cases from elementary school onward. They are confronting a world of work that operates under different legal standards and less-flexible pressures and deadlines." [WSJ]

Wells Fargo Ends Forced Arbitration for Sexual Harassment Claims. "Wells Fargo & Co. said it will no longer require arbitration when an employee files a sexual harassment complaint. The change, which applies to future harassment claims, is being made following discussions with stakeholders including Clean Yield Asset Management, which submitted a shareholder proposal late last year that focused on the practice, Wells Fargo said in a statement Wednesday. Clean Yield, which focuses on investments that reflect clients' values, has since withdrawn the proposal." [Bloomberg]

Federal Employee Retirement Benefits Would Be Cut Under Trump's Budget. "President Trump has again proposed reducing the value of federal retirement benefits while requiring most federal employees to pay more toward those benefits. In some cases, the benefits would be reduced only for future retirees, but in other cases, those already retired would face a cut, as well. The proposals, outlined in Trump's budget released Monday, would require changes in law. They are likely to face opposition from Democrats in Congress and federal employee organizations that have thwarted them in prior years." [The Washington Post]

Even When Weed Is Legal, Employees Face Risks. "We've got this kind of crossover and interplay that employees and employers have to be mindful of, in terms of how the federal law and the state laws intersect," says Melissa Ferrara, a labor and employment associate at Reed Smith and a member of the law firm's cannabis team. [Fast Company]

Courts and cases

'Their Day in Arbitration': Judge Compels Mass Arbitration Against DoorDash. A federal judge compelled arbitration in cases brought by more than 5,000 individual couriers who allege third-party delivery company DoorDash misclassifies them as contractors. U.S. District Judge William Alsup of the Northern District of California issued an order Monday shortly after hearing arguments. Plaintiffs firm Keller Lenkner is representing the contractors. Lawyers from Gibson, Dunn & Crutcher represent the company. [The Recorder]

3rd Circuit Rules in Favor of Philadelphia's Ban on Asking Job Applicants Their Salary History. "In a decision that could have national implications for the wage-equity movement, a federal appeals court Thursday sided with the City of Philadelphia, saying it can ban employers from asking job applicants their salary history." [The Philadelphia Inquirer] Read the Third Circuit's decision here. Gibson, Dunn & Crutcher partner Miguel Estrada (at left) argued for the Greater Philadelphia Chamber of Commerce. The Legal Intelligencer has more here.

Court Orders Officially Ends Gender, Race Pay Data Reporting. "The Equal Employment Opportunity Commission's first-ever uniform collection of race and gender pay data from U.S. businesses has been closed by a federal judge in Washington." [Bloomberg Law]

Appeals Court Vacates $50K Arbitration Award Against Ex-Trump Campaign Staffer for Alleged NDA Violation. A New York state appeals court has vacated a nearly $50,000 award that an arbitrator handed to President Donald Trump's campaign over allegations that a former staffer violated a non-disparagement agreement after she sued the organization for alleged harassment. [Law.com]

 

 

Notable Moves and Happenings

>> King & Spalding said Jeanie Cogill has joined as a partner in the corporate, finance and investments practice group in its New York office. "Jeanie has a wealth of experience navigating the complexities of employee benefits and executive compensation plans," Todd Holleman, head of the practice group, said in a statement. Cogill joins from Morgan, Lewis & Bockius.

>> Drew Tipton (at left), a Houston litigator at Baker & Hostetler, appeared Wednesday for his U.S. Senate confirmation hearing. Tipton, head of the firm's labor and employment group in the Houston office, is up for a slot on the U.S. District Court for the Southern District of Texas. "To me, judicial modesty, which is what I think is the appropriate way, is to take the facts and law as they come, that lead logically to the conclusion, whether you like it or not from a personal perspective," Tipton said. Tipton reported earning $1.14 million in income at the firm in 2018, and $1.34 million in 2019, according to a financial disclosure he submitted as part of the confirmation process.

>> Carlton Fields said the firm has added immigration attorney Federico M. Maciá as a member on the labor and employment team in Miami.

>> Saul Ewing Arnstein & Lehr said it has brought on Dan Altchek as a partner in the labor and employment practice in the Baltimore and New York offices. Altchek was formerly a principal at Miles & Stockbridge in Baltimore and a senior counsel at Proskauer Rose from 2000 to 2015.

>> Jackson Lewis P.C. said Nigel Wilkinson has joined the firm's Washington office as a principal focusing on employment litigation and counseling. Wilkinson formerly was a partner at Manatt, Phelps & Phillips and at Squire Patton Boggs.