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Archive for May, 2014

What’s Driving FLSA Lawsuits?

Posted on: May 30th, 2014

By: Jonathan Kandel  

It is no secret that the number of FLSA lawsuits has increased exponentially over the past few years.  As previously posted, one of the main factors is plaintiff’s attorneys aggressively seeking clients to file FLSA lawsuits. You might be asking why have plaintiff’s attorneys become so interested in FLSA lawsuits recently.  Like many legal questions, the answer may be found in a case.

A federal judge in Atlanta recently awarded two plaintiff’s attorneys fees in a FLSA case where the jury awarded the plaintiff $6,000 for unpaid overtime.  This part is not remarkable since the FLSA allows a prevailing plaintiff to recover reasonable attorney’s fees in addition to any owed back pay or overtime.  What is remarkable is that the attorney’s fees exceeded the unpaid overtime by almost 3,000 percent!  While the jury awarded the plaintiff $6,000 for unpaid overtime, her attorneys then received $173,000 for their fees and expenses.

The case is a good reminder of what’s at stake in most FLSA cases.  In most instances, the amount of unpaid overtime, if any, is not significant.  Instead, the real risk lies with the fees for the plaintiff’s attorney.

Consumers Could Soon Add Binding Arbitration to Their Grocery Lists

Posted on: May 30th, 2014

By: Mike Wolak

Consumers could soon be learning more than just the number of calories in their favorite foods when looking at packaging labels.  They may also see that their purchase of the food product subjects them to binding arbitration for any claims, including a class action waiver.  General Mills – maker of popular cereals such as Cheerios and Wheaties – recently backed off of its controversial decision to add a binding arbitration clause and class action waiver to the terms of its website.  With food companies facing consumer class actions alleging false and misleading food labels (e.g., claims of “organic” or “all natural”), General Mills added a pop-up banner announcement to its website that purported to bind consumers to arbitration simply by using its website to – among other things – view product offerings, download coupons, join its Facebook page, or enter a sweepstakes.  While consumers could choose to opt-out if they notified General Mills in writing, the new terms sparked consumer and media outrage.  General Mills defended its new policy but chose to remove the new terms to keep its customers happy.

Binding arbitration clauses are an important and effective tool for businesses to avoid the high costs and risks of protracted litigation and consumer class actions.  The U.S. Supreme Court’s 2011 ruling in AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011) (striking down California’s judicial rule invalidating class action waivers) generated a host of decisions enforcing binding arbitration provisions that also prohibited consumers from bringing class action lawsuits.  These cases, however, generally involved an arbitration clause in a contract signed by the consumer.  While General Mills removed its new terms before they were subjected to any judicial scrutiny, we will likely see other food companies implement similar arbitration terms to their websites and/or food labels.  This will certainly raise the interesting question of whether consumers “consented” to the arbitration clause simply by purchasing a food product off the shelf or surfing a food company’s website to download coupons.

As food companies continue to seek to bind consumers to binding arbitration, we will likely see these attempts tested in the courts.  Stay tuned.

Tolan v. Cotton: Protecting the Summary Judgment Standard or Improper Interference in “Factbound” Qualified Immunity Cases?

Posted on: May 19th, 2014

By: Peter Munk

On May 5, 2014, the Supreme Court issued a per curium opinion in Tolan v. Cotton in which it vacated the Fifth Circuit’s grant of summary judgment to a police officer on the basis of qualified immunity.  Tolan  is noteworthy for two reasons.  First, it marks the first time in 10 years that the Court has ruled against a police officer in a qualified immunity case.  Second, the Court’s decision to vacate and remand was based on the lower courts’ “clear misapprehension of summary judgment standards.”  In other words, the Court scrutinized the factual record and determined that the lower courts had failed to construe facts in the light most favorable to the non-moving party.  Justice Samuel Alito (joined by Justice Antonin Scalia) concurred in the judgment, but noted that error correction of this nature by the Court would “very substantially alter the Court’s practice.”

Tolan suggests that the Court is willing to peer behind the factual curtain of tough qualified immunity cases.  The Court’s ruling may cause lower courts to think twice before granting summary judgment in difficult qualified immunity cases, knowing that their factual findings will be closely scrutinized on appeal.

Just What the Doctor Ordered for the Ongoing Medical Liability Crisis

Posted on: May 16th, 2014

By:  Taryn Kadar

The medical liability crisis has continued to have a significant effect on the medical system. The American College of Physicians (“ACP”) newly released policy paper, “Medical Liability Reform –  Innovative Solutions for a New Health Care System” helps outline the ever-changing medical landscape and the scope of potential medical liability reform.

The paper offers a number of recommendations to reform the current state of medical liability as the existing health care system allows for too many preventable injuries and for the constant fear of liability to undermine the patient-physician relationship. The ACP identified the following nine recommendations as a solution to the broken medical liability system in the United States:

  • Continued focus on patient safety and prevention of medical errors;
  • Passage of a comprehensive tort reform package, including caps on non-economic damages;
  • Minimum standards and qualification for expert witnesses;
  • Oversight of medical liability insurers;
  • Testing, and if warranted, expansion of communication and disclosure programs;
  • Pilot-testing a variety of alternative dispute resolution models;
  • Developing effective safe harbor protections that improve quality of care, increase efficiency, and reduce costs;
  • Expanded testing of health courts and administrative compensation systems;
  • Research into the effect of team-based care on medical liability, as well as testing of enterprise liability and other products that protect and encourage team-based care.

The ultimate, ideal solution is one that includes a multifaceted approach, allowing for innovation, pilot-testing, and further research. Although medical liability reform currently has little chance of passing at a federal level, states have taken action to approve laws that focus on some of the proposed solutions above. It is imperative that all stakeholders work together to fix the nation’s medical liability system for the sake of patients and providers alike.

Separating the Good from the Bad in Separation Agreements

Posted on: May 16th, 2014

By: Jennifer Miller 

In its 2013-2016 Strategic Enforcement Plan, the Equal Employment Opportunity Commission (“EEOC”) listed “preserving access to the legal system” as one of its priorities.   Drugstore chain CVS is currently feeling the effect of this priority.  On February 7, the EEOC sued CVS claiming that CVS’s separation agreements, which had been signed by hundreds of former CVS employees, violated Title VII of the Civil Rights Act of 1964.

Most employers are familiar with Title VII’s prohibition against discrimination, harassment, and retaliation.  What employers may not know, however, is that Section 707 of Title VII prohibits employers from engaging in “a pattern or practice of resistance to the full enjoyment of any rights secured” by Title VII, which, includes the right to file charges of discrimination with the EEOC.   The EEOC claims that, since at least August 2011, CVS has violated this section of Title VII by “conditioning the receipt of severance benefits on FLSA exempt non-store employees’ agreement to Separation Agreements that deters the filing of charges and interferes with employees’ ability to communication voluntarily” with the EEOC.   More specifically, the EEOC appears to object to numerous provisions in CVS’s five-page single spaced separation agreements, including provisions by which employees agree to release “any claim of unlawful discrimination of any kind” and “not to initiate or file, or cause to be initiated or file, any action, lawsuit, complaint or proceeding.”

As this suit was only recently filed, much is still to be learned about the interplay between Section 707 of Title VII and separation agreements, but, in the meantime, employers should make sure that their separation agreements are carefully drafted so they cannot be seen as prohibiting former employees from filling charges or communicating with the EEOC.

If you have any questions about how to create or revise a separation agreement, please contact any of the attorneys in our Labor and Employment practice group.