Featured on Employment Law This Week – “For Want of a Comma.” It seems that punctuation was a key factor in a recent class action suit from a group of dairy delivery drivers in Maine.

The U.S. Court of Appeals for the First Circuit ruled that an exemption in the states overtime law is ambiguous enough to support the drivers’ overtime claim. The drivers argued that the exemption applies only to workers who pack perishable food products for distribution—and not those who actually distribute the products. On appeal, the First Circuit agreed that a missing “Oxford” comma makes the drivers’ reading of the exemption a reasonable one.

Watch the segment below and see our recent post.

A Maine dairy company has received a potentially expensive grammar lesson from the U.S. Court of Appeals for the First Circuit, which held on March 13, 2017, that the company’s delivery drivers may be eligible for up to $10 million in overtime pay, because the lack of a comma in the statute regarding exemptions from the state’s wage and hour law rendered the scope of the exemption ambiguous.

Grammarians have long disputed whether writers should include a comma before the final item in a list—the so-called “serial” or “Oxford” comma.  Opponents of the serial comma consider it superfluous.  Supporters argue that the serial comma is necessary to eliminate potential ambiguity, as in the example, “I’d like to thank my parents, Ayn Rand and God.”  Are Ayn Rand and God the writer’s parents, or are they being thanked in addition to his or her parents?  Without the serial comma, it is impossible to know.

Similarly, this case, O’Connor v. Oakhurst Dairy, arose “[f]or want of a comma” in the Maine law exempting from overtime compensation employees involved in the “canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of” various perishable goods.  Without the controversial serial comma after “shipment,” the court found it unclear whether the exemption was meant to apply to one category of employees (i.e., those who pack goods, whether for shipment or for distribution) or two (i.e., those who pack goods for shipment, and those who distribute the goods).  Because the plaintiff drivers admittedly distributed goods, but claimed they did not pack goods or engage in any of the other activities specified in the exemption, their case could only proceed if the First Circuit reversed the district court’s ruling that the exemption encompassed both packers and distributors.

In an opinion that should appeal to grammar aficionados everywhere, the First Circuit extensively analyzed the language of the statute in light of “certain linguistic conventions,” or “canons,” including: (i) the rule against surplusage, which states that no word in a statute should be treated as unnecessary; (ii) the convention of using a conjunction before the last item on a list; (iii) the parallel usage convention, which requires words performing the same grammatical function to be presented in the same form; and (iv) the use of the serial comma itself, which the Maine Legislative Drafting Manual generally disfavors, except when its omission may cause the sort of ambiguity presented here.  After engaging in this analysis, and proving unable to determine the law’s clear meaning from the statutory text or its legislative history, the court reversed the district court and held it must “adopt the delivery drivers’ reading of the ambiguous phrase . . . , as that reading furthers the broad remedial purpose of the overtime law, which is to provide overtime pay protection to employees.”

While many commentators have viewed this opinion as an ode to, in the court’s words, “the clarifying virtues of serial commas,” ultimately that is a mere subset of the three broader lessons presented by this case, principles that should prove helpful to anyone who communicates via the written word—that is, all of us.

Lesson One — Say What You Mean

Given the context of this case, the first lesson presented by the court’s analysis was likely aimed primarily at the Maine Legislature, which drafted the ambiguous statute at issue. However, it is advice that all writers would be wise to follow—avoid ambiguity.  Whether drafting a statute, a brief, an employment policy, an email, or a Tweet, use language and punctuation (including the serial comma, where necessary) deliberately, to ensure that you actually write what you intend to say.  Review the grammar rules you may have ignored since middle school, and revise your writing as frequently as necessary, to guard against any accidental ambiguities like the one in the Maine wage and hour law.  Especially for attorneys, words are our primary weapons, and it is crucial that we wield them wisely.

Lesson Two — Remember Your Goal

The second piece of advice that arises from this case is somewhat related to the first—always keep the underlying purpose of a piece of writing in mind. Much as courts seek to effectuate the legislative intent of a statute, parties to a dispute should focus on what, specifically, they are trying to accomplish.  The delivery drivers in this case did not win because of a missing comma; they won because the extra compensation they sought was consistent with the broad remedial purpose of Maine’s wage and hour law.  As an advocate, you will be more likely to succeed if you can find a way to align the outcome you or your clients seek with the societal or legislative purpose the court is seeking to advance.

Lesson Three — Be Consistent (a.k.a., Don’t Be Your Own Worst Enemy)

The third lesson drawn from this case, despite being relegated to a seemingly insignificant footnote, may be the most important—make sure all of your messaging is consistent. In this case, the dairy company argued that the statutory exemption should be read as applying to both employees involved in “packing [goods] for shipment” and employees involved in “distribution” of the goods, because “shipment” and “distribution” are synonyms, and unless “packing for shipment” and “distribution” constituted two separate exempt activities, the statute would be redundant.  The court may have been more receptive to this argument, if it hadn’t noticed that the company’s “own internal organization chart seems to treat [shipment and distribution] as if they are separate activities,” significantly undercutting the company’s argument that the two terms were synonymous and redundant.  The company probably never considered the fact that its own organizational chart could be used against it, but any such inconsistency in a party’s messaging, even in a seemingly unrelated context like an org chart, may ultimately prove fatal to a contradictory legal claim the party seeks to assert sometime in the future.  Accordingly, especially for corporate entities, it is crucial to keep a single consistent and coherent viewpoint in mind when drafting any sort of company messaging, to prevent any inconsistencies from being used against the company at a later date.

Conclusion — It’s Not About the Comma

Contrary to the extensive media coverage of the “comma case,” this case offers a far broader lesson than “always use a serial comma.” Instead, the First Circuit’s opinion presents three fundamental principles that should apply in every context where the written word may prove determinative.  In essence, the opinion is a dissertation on the virtues of clarity in writing—a lesson that may cost Oakhurst Dairy up to $10 million, but which has been made available to the rest of us, free of charge.

Featured on Employment Law This Week – California health care workers can still waive some breaks.

In February 2015, a California appeals court invalidated an order from the Industrial Welfare Commission (IWC) that allowed health care workers to waive certain meal breaks. The court found the order, which allowed the workers to miss one of their two meal periods when working over eight hours, was in direct conflict with the California Labor Code. The state legislature then passed a new law giving the IWC authority to craft exceptions going forward for health care workers. This month, the appeals court concluded that its 2015 decision was based on a misreading of the statute and that even waivers occurring before the new law are valid.

Watch the segment below and see our recent post on this topic.

Kevin SullivanA little more than two years ago, we wrote about how a California Court of Appeal’s decision exposed health care employers to litigation if they relied upon IWC Wage Order 5 for meal period waivers. That decision was Gerard v. Orange Coast Memorial Medical Center (“Gerard I”), where the Court of Appeal concluded that IWC Wage Order 5 was partially invalid to the extent it authorized second meal period waivers on shifts over 12 hours. Much has happened since then.

After Gerard I was published, the Legislature moved quickly to enact SB 327, which amended Labor Code section 516 to state in pertinent part that “the health care employee meal period waiver provisions in Section 11(D) of [IWC] Wage Orders 4 and 5 were valid and enforceable on and after October 1, 2000, and continue to be valid and enforceable. This subdivision is declarative of, and clarifies, existing law.” In enacting SB 327, the Legislature specifically noted “the uncertainty caused by a recent appellate court decision” – Gerard I – and that “without immediate clarification, hospitals will alter scheduling practices.”

After SB 327 was enacted, the California Supreme Court directed the Court of Appeal to vacate its decision in Gerard I and to reconsider the case in light of SB 327. The Court of Appeal has now done so. On March 1, 2017, in an unpublished opinion, the Court of Appeal in Gerard II held that SB 327 is effective retroactively. As a result, the second meal period waivers that the plaintiffs had signed were valid and enforceable. Consequently, the Gerard II Court affirmed the trial court’s order granting summary judgment, denying class certification, and striking class allegations.

The Gerard II decision is a welcome development for California health care employers who have relied upon IWC Wage Order 5 for second meal period waivers, reinforcing the use of such waivers for employees who work more than 12 hours in a shift.

Kevin SullivanOn February 28, 2017, the California Court of Appeal issued its opinion in Vaquero v. Stoneledge Furniture, LLC. The opinion provides guidance to California employers who pay their hourly employees on a commission basis but do not pay separate compensation for time spent during rest periods.

In the case, the employer kept track of hours worked and paid hourly sales associates on a commission basis where, if an employee failed to earn a minimum amount in commissions – comprising of at least $12.01 per hour in commission pay in any pay period – then the employee was paid a “draw” against future advanced commissions. The commission agreement explained: “The amount of the draw will be deducted from future Advanced Commissions, but an employee will always receive at least $12.01 per hour for every hour worked.” In other words, for hourly sales associates whose commissions did not exceed the minimum rate in a given week, the employer clawed back (by deducting from future paychecks) wages advanced to compensate employees for hours worked, including rest periods. The commission agreement did not provide separate compensation for any non-selling time, such as time spent in meetings, on certain types of training, and during rest periods. Although employees clocked out for meal periods, they did not clock out for rest periods.

Two former employees brought suit, alleging, among other things, that the employer did not pay all wages earned during rest periods. The employer filed a motion for summary judgment, arguing that “the rest period claim failed as a matter of law because Stoneledge paid its sales associates a guaranteed minimum for all hours worked, including rest periods.” The trial court granted the employer’s motion, finding that, under the employer’s system, “there was no possibility that the employees’ rest period time would not be captured in the total amount paid each pay period.” The employees appealed.

The California Court of Appeal reversed the trial court’s decision, starting with the premise that the “plain language of Wage Order No. 7 requires employers to count ‘rest period time’ as ‘hours worked for which there shall be no deduction from wages.’” (Italics added by the Court.) The Vaquero Court relied on a 2013 decision in Bluford v. Safeway, Inc., where a sister court had held that this language in Wage Order 7 requires employers to “separately compensate[]” hourly employees for rest periods where the employer uses an “activity based compensation system” that does not directly compensate for rest periods.

Finding that “nothing about commission compensation plans justifies treating commissioned employees differently from other [hourly] employees,” the Vaquero Court agreed with the Bluford Court’s holding that “Wage Order No. 7 requires employers to separately compensate employees for rest periods if an employer’s compensation plan does not already include a minimum hourly wage for such time.” And because the Vaquero employer did not separately compensate its sales associates for rest periods, the Court of Appeal reversed summary judgment.

As had been the case for employers with piece-rate compensation plans, the Vaquero decision makes clear that commission-based compensation plans must separately account for – and pay for rest periods – to comply with California law.

Michael D. ThompsonThe Missouri Supreme Court has overturned a lower court’s ruling that St. Louis’ minimum wage ordinance is invalid, finding that the ordinance is not preempted by the state law.

St. Louis City’s Ordinance 70078 (“the Ordinance”) provides for a series of increases to the minimum wage for employees working within the boundaries of St. Louis. The plaintiffs argued that Ordinance 70078 was preempted by the state minimum wage law.  The plaintiffs contended that state law affirmatively authorized employers to pay as little as $7.65 per hour, the state minimum wage rate.

A trial court accepted the plaintiffs’ argument and, in October 2015, held that the Ordinance was invalid.

The Missouri Supreme Court reversed the trial court’s ruling and rejected the plaintiffs’ argument.  Because the state minimum wage law merely prohibits employers from paying employees a wage lower than the state minimum, local ordinances imposing higher minimum wages did not conflict with the state statute.

Furthermore, Missouri’s minimum wage law did not “occupy the field” of minimum wage laws. In fact, the Missouri Supreme Court noted that the state legislature had recognized and authorized local ordinances addressing minimum wages.

Notably, both the trial court and the Missouri Supreme Court rejected the plaintiffs’ argument based on Section 67.1571 of the Missouri Statutes, which prohibits “political subdivisions of this state from establishing or requiring a minimum wage that exceeds the state minimum wage.” The courts agreed that the Missouri Constitution prohibits bills containing more than one subject, and Section 67.1571 violated this requirement because its primary purpose was to establish community improvement districts.

Under the phase-in schedule in the Ordinance, the minimum wage in St. Louis was set to rise to $10.00 per hour on January 1, 2017 and $11.00 per hour on January 1, 2018, after which the minimum wage will be increased annually to reflect the rate of inflation.

St. Louis city officials issued a statement explaining that businesses will be provided “a reasonable grace period to adjust to the new minimum wage rate,” but will be subject to revocation of their business licenses if they do not comply with the Ordinance.

Featured on Employment Law This Week: The U.S. Supreme Court takes on class action waivers.

In 2012, the National Labor Relations Board (NLRB) ruled that class action waivers in arbitration agreements violate employees’ rights under the National Labor Relations Act (NLRA). The U.S. Court of Appeals for the Second, Fifth, and Eighth Circuits disagreed, finding that these waivers do not violate the NLRA and are enforceable under the Federal Arbitration Act. More recently, the Seventh and Ninth Circuits sided with the NLRB on the issue. The Supreme Court will consider three cases in order to resolve this split, but any resolution could depend on the timing of the hearing. If the case is heard this term, before President Trump’s nominee for the vacancy on the Supreme Court is confirmed, it could end in a 4-4 tie. That would leave the law as it stands, and the split would continue.

Watch the segment below and see our recent blog post by Michael Kun.

As we previously discussed here, acting on behalf of the Department of Labor (“DOL”), the U.S. Department of Justice (“DOJ”) urged
the Fifth Circuit Court of Appeals to expedite briefing on its interlocutory appeal of a Texas district court’s nationwide preliminary injunction barring implementation and enforcement of the new overtime rule that would double the minimum salary threshold for white-collar exemptions, among other things. The injunction was issued just days before the rule was to go into effect on December 1, 2016.

The DOJ obtained a fast-tracked briefing schedule from the Court of Appeals that would set up the appeal for oral argument and adjudication by January 31, 2017. Now, the DOJ has requested – and obtained – additional time to review and brief the issue that it had sought to fast-track.

Shortly after the inauguration of our new President, the new administration requested a 30-day extension for the DOJ to file its reply brief, to March 2, 2017. The reason for the request was “to allow incoming leadership personnel adequate time to consider the issues.” The Court granted the extension.

The additional time will allow the new administration to continue evaluating its options and the steps necessary to implement whatever route it elects. Among its options would be to abandon the appeal and to abandon efforts to implement and enforce the new rule. We will continue to monitor this important matter as it develops.

A New Year and a New Administration: Five Employment, Labor & Workforce Management Issues That Employers Should MonitorIn the new issue of Take 5, our colleagues examine five employment, labor, and workforce management issues that will continue to be reviewed and remain top of mind for employers under the Trump administration:

Read the full Take 5 online or download the PDF. Also, keep track of developments with Epstein Becker Green’s new microsite, The New Administration: Insights and Strategies.

Supreme Court Set To Resolve Class Action Waiver DisputeOn January 13, 2017, the United States Supreme Court granted certiorari to hear three cases involving the enforceability of arbitration agreements that contain class action waivers.

Whether such agreements are enforceable has been a hotly contested issue for several years now, particularly in cases involving wage-hour disputes.

The Fifth Circuit has held that such waivers can be enforceable (NLRB v. Murphy Oil, Inc.), joining the Second and Eighth Circuits in that conclusion. The Seventh (Epic Systems, Inc. v. Lewis) and Ninth Circuits (Ernst & Young LLP v. Morris) have held that they are not, determining that they violate employees’ rights to engage in collective activities under the National Labor Relations Act.

Barring the failure to confirm a new Supreme Court Justice to fill the vacant seat before the cases are argued — which could well result in a 4-4 tie — the Supreme Court’s decision to hear the Murphy Oil, Epic Systems and Ernst & Young cases would seem likely to resolve the current dispute between the Circuits regarding the enforceability of those waivers. And it would provide some much-needed guidance to employers across the country.

Whether a ninth Supreme Court Justice will be seated in time to hear the cases is questionable, though. It is possible that the case could be held over until the next term, when a full Court presumably will be seated. If that does not occur, and if a 4-4 tie resulted, the split among the Circuits would remain.

Of course, there are many cases across the country in which parties are currently debating whether class action waivers are enforceable. One would think that most, if not all, of those cases will now be stayed while the courts await the Supreme Court’s ruling.