MONDAY MORNING MINUTE: April 29, 2019

Monday Morning Minute

In This Issue

Class Action Arbitration Requires Affirmative Consent

Job Applicants and Reasonable Accommodations

It's Final! Due Date On EEO-1 Pay Data....

Can Third Party Employer Vendors be Held Negligent?

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April 29, 2019

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SCOTUS: CLASS ACTION ARBITRATION REQUIRES AFFIRMATIVE CONSENT (NOT SILENCE OR AMBIGUITY)

This past week the Supreme Court issued its decision in Lamps Plus, Inc. v. Varela (April 24, 2019), concluding that an agreement to require class arbitration of disputes requires the consent of the parties, and that consent cannot be found through an agreement's silence on the issue, or ambiguous language in the agreement.

In Lamps Plus, the employer was hacked and the information of 1300 of its employees was compromised. Varela, an employee of Lamps Plus, brought a class action lawsuit on behalf of himself and other employees. Lamps Plus moved to compel individual arbitration under Varela's employment agreement on an individual, one-on-one basis only. This District court compelled arbitration, but also allowed it to proceed on a class arbitration basis. In an unpublished opinion, the Ninth Circuit Court of Appeals affirmed.

SCOTUS, in a 5-4 decision delivered by Chief Justice Roberts, reiterated that arbitration is a matter of consent, and that ambiguous language cannot provide the basis for concluding that the parties agreed to submit to class arbitration. The Court further stated that consent cannot be inferred in the absence of an 'affirmative contractual basis for concluding that the party agreed to do so." Like silence, ambiguity is not sufficient to find consent. The Court revesed the judgment of the Ninth Circuit and remanded the case to it for further proceedings.

From an employer perspective, this case, like Epic Systems and Murphy Oil, is another feather in the cap to protect employers from class arbitration demands, and for funneling employment claims into "one-on-one" arbitration based upon carefully drafted arbitration agreement. Given the prevalence of plaintiff class and collective action filings in wage and hour, and other employment law areas, it behooves a prudent employer to consider a well thought out arbitration agreement for its organization. Call Spognardi Baiocchi if you would like to discuss your situation.

EMPLOYERS: DO NOT FORGET REASONABLE ACCOMMODATIONS UNDER ADAAA APPLIES TO JOB APPLICANTS

Party City Corporation, a Rockaway, N.J.-based national discount and costume retailer, will pay $155,000 and provide other nationwide and regional relief to settle a discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC).

The EEOC's lawsuit charged that Party City violated federal law by failing to hire a qualified employee with a disability at its Nashua, N.H., location after it became aware that she required a job coach as a reasonable accommodation for her disability.

the applicant, who was on the autism spectrum and suffered from severe anxiety, had been receiving services from Easter Seals of New Hampshire to build up her self-confidence. One of these Easter Seals employees went with her in October 2017 to apply for a sales associate job with Party City. The applicant received a job interview, but when the hiring manager discovered that the woman accompanying her was a job coach, the hiring manager's attitude changed dramatically. The hiring manager told the job coach that Party City had hired people with disabilities with job coaches in the past and that it had not gone well. The hiring manager went on to make disparaging comments and cut the interview short.

In addition to the monetary relief, the three-year consent decree settling the suit enjoins Party City from discriminating against qualified applicants with job coaches in the future. The decree also requires Party City to revise and improve its reasonable accommodation policy; train human resource employees on the new policy and distribute it to all employees; report to the EEOC on all denials of employment to applicants with job coaches; and provide a notice regarding the decree to employees within the New England region, where the store at issue is located.

The take away for Employers is to remember that ADAAA covers job applicants. Another take away is to remember that a reasonable accommodation may take many different forms, other than unpaid time off, equipment modification, reduced hours or preferred shifts. In this case, it was a job coach to assist during the interview process.

IT'S FINAL! EEO-1 PAY DATA DUE SEPTEMBER 30
Spognardi and Baiocchi has been diligent about following and reporting on the EEO-1 pay data saga. Since the release of last week's Monday Morning Minute, a new development has transpired. On Thursday, April 25th, US District Judge Tanya Chutkan issued a ruling from the bench ordering employers to submit the pay data component of the EEO-1 form ("Component 2") by September 30, 2019.

CAN THIRD PARTY [EMPLOYER] VENDORS BE HELD NEGLIGENT FOR ITS OWN ACTS INVOLVING THOSE EMPLOYEES?

The South Carolina Supreme Court thinks so. At least when it comes to drug testing. The question certified before it was the following:

Under South Carolina law, does a drug testing laboratory that has a contract with an employer to conduct and evaluate drug tests owe a duty of care to the employees who are subject to the testing so as to give rise to a cause of action for negligence for failure to properly and accurately perform the test and report the results?

The key inquiry is what duty, if any, is owed by the tort-feasor, in this case the lab to the third party (employee). It is essential to liability for negligence that the parties have some relationship recognized by law to support the duty owed by the tort-feasor. 57 Am. Jur. 2d Negligence § 36. The South Carolina Supreme Court found such duty existed:

1. Because of the contractual relationship between the lab and Employer as law has held that a duty may be derived from a tort-feasor's contractual relationship with another;

2. Because there is a sufficient relationship between a drug testing lab and an employee to support the recognition of a duty; and

3. Because of public policy concerns. Public policy favors the recognition of a duty of care in such context. There is a significant public interest in ensuring accurate drug tests because countless employees are required to undergo drug testing as a condition of their employment. Drug testing laboratories have the greatest amount of control over the accuracy of the testing process.

While courts in some jurisdictions have declined to recognize such duty, some courts of last resort have held that such duty exists, including New York, Pennsylvania and Wyoming.

For a full reading of the decision, please click HERE. As always, please reach out to the Spognardi Baiocchi attorney of your choice to discuss this or any other concern.

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With over 50 combined years of experience among its 2 founding partners in these areas, we can assist businesses in developing custom solutions to today's tough issues. And as litigators, who combined have over thousands of trials "under their belts" before state and federal courts as well as administrative agencies (such as the NLRB) you will find no better advocate and partner.

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