Wage and Hour Defense Blog

On June 1, 2021 the Southern District of Florida granted the motion by Uber Technologies, Inc. (“Uber”) to compel arbitration, finding that the company’s drivers did not engage in sufficient interstate commerce to meet the interstate commerce exclusion in the Federal Arbitration Act (FAA).

Plaintiffs Kathleen Short and Harold White brought a class action against Uber alleging that the company’s policy of classifying its drivers as independent contractors violates the Fair Labor Standards Act and the Florida Minimum Wage Act because the company failed to pay drivers the minimum wage. Uber sought to enforce its arbitration agreement which unambiguously required plaintiffs to pursue any potential claims in an individual arbitration.

Since the Supreme Court issued its seminal 2018 decision in Epic Systems Corp. v. Lewis, acknowledging that the Federal Arbitration Act (“FAA”) permits the use of arbitration agreements with class action waivers, many employers have implemented arbitration programs for their employees. Those arbitration programs have been aimed, in no small part, at avoiding the class and collective actions that have overwhelmed employers, particularly in California.

In response, California passed AB 51, which prohibits imposing “as a condition of employment, continued employment, or the receipt of any employment-related benefit” the requirement that an individual “waive any right, forum or procedure” available under the California Fair Employment and Housing Act (“FEHA”) and Labor Code.

It is no secret that the Private Attorneys General Act (“PAGA”) has been a cash cow for plaintiffs’ counsel in California.

PAGA allows a single employee (and their counsel) to file suit on behalf of other employees for alleged Labor Code violations, without having to go through the class action mechanism.  In other words, a PAGA plaintiff can file suit seeking penalties for hundreds or thousands of employees, yet never need to show that there are common issues susceptible to common proof – or even that their own claims are typical of those of other employees.

As a result, there has been little to prevent plaintiffs and their counsel from filing massive PAGA actions on behalf of all of an employer’s employees, even without having any basis to believe that many those employees suffered any violation at all.

On September 1, 2021, Massachusetts Attorney General Maura Healey approved two versions of a ballot initiative (version 1, version 2) concerning the relationship between app-based drivers (such as those who transport passengers or deliver food) and the companies with which they contract. If passed, the ballot initiative will enact the Relationship Between Network Companies and App-Based Drivers Act (the “Act”) and classify such drivers as independent contractors, not employees. It will also require ride-sharing and food-delivery companies to provide them with certain benefits.

Many New York families employ domestic workers –individuals who care for a child, serve as a companion for a sick, convalescing or elderly person, or provide housekeeping or any other domestic service. They may be unaware of federal and New York requirements that guarantee those domestic workers minimum wage for all hours worked, paid meal breaks, and overtime compensation.

In addition, New York imposes specific requirements on employers regarding initial pay notices, pay frequency, and pay statements that also apply to persons who employ domestic workers.

To avoid inadvertent wage and hour violations, it is important that persons who employ domestic workers in New York understand the relevant laws regarding domestic workers and approach what many understandably consider a personal relationship as a formal, business one for wage and hour purposes.