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The top 7 recent employment law cases you should know

By David I. Brody

Jul. 31, 2020

When March began this year, nobody had any idea what was just around the corner – a global pandemic, a fiscal meltdown, unprecedented unemployment and a national reckoning with the terrible consequences of centuries of racial violence and inequity. Then we all witnessed a historic decision from the Supreme Court, affirming, at long last, that our family and friends in the LBGTQ community are protected from discrimination in employment under federal law. 

In this ever-changing landscape, it is increasingly important to keep up to speed on the latest employment legal cases and developments. Below is a brief summary of the seven most significant employment legal cases.

1. U.S. Supreme Court Issues Landmark Civil Rights Decision

Bostock v. Clayton County, 590 U.S. (2020)

The Supreme Court has issued a landmark decision in Bostock v. Clayton County , holding that Title VII prohibits discrimination against employees based upon sexual orientation and transgender status. 

In the 6-3 Opinion of the Court, written by Justice Gorsuch — who, along with Chief Justice Roberts, sided with the four “liberal” members of the Court — the majority held that a “straightforward” rule emerges from the ordinary meaning and application of Title VII’s prohibition against sex discrimination: 

“[F]or an employer to discriminate against employees for being homosexual or transgender, the employer must intentionally discriminate against individual men and women in part because of sex . That has always been prohibited by Title VII’s plain terms — and that should be the end of the analysis.’” 

Such discrimination has long been a violation of Massachusetts law, Chapter 151B, but with the Bostock decision, it is now clearly unlawful to discriminate in employment on the basis of sexual orientation or gender identity.

2. Unlawful Employment Practices During the COVID-19 Pandemic

During these uncertain times, employers and employees alike are struggling to understand their legal rights and obligations. To that end, there has been a great deal of COVID-specific guidance provided by state and federal agencies, including the U.S. Equal Employment Commission , Massachusetts Commission Against Discrimination , and Office of the Attorney General .

It is important to remember that neither a global pandemic nor an economic recession can be used as a shield by employers to carry out unlawful employment practices. 

Indeed, as the Massachusetts Supreme Judicial Court has noted, just because an employer may be required to “reduce its workforce does not mean that it is free to make its employment decisions on impermissible grounds: ‘even during a legitimate reorganization or workforce reduction, an employer may not dismiss employees for unlawful discriminatory reasons.’” See Sullivan v. Liberty Mut. Ins. Co. , 444 Mass. 34, 41–42 (2005).

If you think that you may have been illegally targeted, seek legal counsel as soon as possible and prior to waiving any legal rights.

Hlatky v. Steward Health Care System, Inc., 484 Mass. 566 (2020)

Following a jury trial, Dr. Hlatky, an experienced cancer researcher, was awarded $10 million in damages in a breach of contract action against her former employer, Steward Health. The $10 million damage award represented the cost of reestablishing her research laboratory, which she lost as a result of Defendant’s unlawful conduct. 

On appeal, the Massachusetts Supreme Judicial Court unanimously agreed the damages awarded were not too speculative, noting that the harm suffered by Dr. Hlatky, including the loss of her research laboratory, equipment, and cell samples, constituted her “life’s work.”

The Court was, however, divided regarding whether restrictions should be imposed on how Dr. Hlatky could use the $10 million award. In the six Justice decision, three Justices were concerned that, since the laboratory had not actually belonged to Dr. Hlatky, an unrestricted award might put Dr. Hlatky in a better position than she would have been had there been no breach, e.g., “[n]othing would prevent Hlatky from spending the $10 million on a house or a yacht rather than on the re-establishment of a cancer research laboratory.”

The other three Justice were not persuaded, “Whether she wishes to start again, whether she even could start again after so much time has passed and her faculty position has been lost, whether she wishes to use the money to fund different research or others; research in the same field, or whether she wants to hike the Appalachian trail — these matters simply are not our concern.”

These Justices pointed out that imposing restrictions on such a damage award would open a “Pandora’s box of unknown future harm to the predictability of contract law upon which contracting parties have relied for hundreds of years.”

As the Court was equally divided, the trial court’s award of monetary damages – without restrictions – was affirmed.

4. Non-Competition Agreements and the “Material Change” Doctrine

Now Bus. Intel., Inc. v. Donahue, C.A. No. 17-3732 (Middlesex Sup Ct. Apr. 1, 2020)

A non-competition agreement may become unenforceable if, after execution, the terms and conditions of employment are modified to the point where the parties have effectively abandoned the original employment agreement and entered into a new employment agreement. This is known as the “material change” doctrine which was delineated in F.A. Bartlett Tree Expert Co. v. Barrington, 353 Mass. 585 (1968). The application of the material change doctrine is a highly fact-specific inquiry and will focus on factors, such as promotions, changes in job duties and titles, changes in remuneration, changes to sales area, as well as the associated time periods for such changes.

In the recent case of Now Bus. Intel. Inc. V. Donahue , the Superior Court rejected an employee’s material change defense to the enforceability of his non-compete. In granting Summary Judgment in favor of the former employer, the Court ultimately held that the temporary and short-term changes to the employee’s job duties, without more, did not amount to a material change sufficient to render otherwise reasonable and valid post-employment restriction unenforceable.

5. Anti-SLAPP Motion Revived

Rosario v. Caring Bees Healthcare, Inc., C.A. No. 19-P-1223 (Mass. App. Ct. June 5, 2020)

Retaliatory lawsuits designed to silence one from speaking out are referred to as strategic lawsuits against public participation, or “SLAPP Suits,” and are expressly forbidden in Massachusetts. See the Anti-SLAPP Statute, M.G.L. c. 231, § 59H (the “Statute”). The Statute provides a quick mechanism to dispose of SLAPP suits, and it allows the victim of a SLAPP suit to recover attorney’s fees.

Here, Ms. Rosario had complained (to co-workers, her mother, the MCAD, and, finally, in court) of sexual harassment by her supervisor, Jean Paul Karangwa. In response, Mr. Karangwa counter-sued Ms. Rosario for defamation and intentional infliction of emotional distress. Relying on the Statute, Ms. Rosario moved to dismiss Mr. Karangwa’s counter-claims. The lower court denied her motion, indicating that there was a colorable basis to believe that Ms. Rosario’s statements were defamatory, i.e ., false and causing damage to Mr. Karangwa.

However, the Massachusetts Appeals Court reversed and remanded. The Court reiterated that the legal issue was not solely whether Mr. Karangwa’s claims were “colorable” but also, if so, whether or not they were retaliatory, i.e. , “primarily brought to chill [Ms. Rosario’s] legitimate petitioning activities.” 

In considering whether or not Mr. Karangwa’s counterclaims were retaliatory, the lower court should consider, among other things, (1) whether the claims are ‘typical’ SLAPP claims, e.g., claims that one would not likely bring on their own, (2) the temporal proximity of when the counter-claims were brought to when Ms. Rosario engaged in escalated protected activity, e.g., when Ms. Rosario filed her claims to court, and (3) the chilling impact on such activity by, for example, increasing the cost to Ms. Rosario of complaining about sexual harassment.

The case was remanded to the lower court for a sequential application of the correct anti-SLAPP standard.

6. Enforcement of Arbitration Agreements

Theodore v. Uber Technologies, Inc., C.A. No. 18-cv-12147 (D. Mass. Mar. 3, 2020)

Many executives (and employees generally) are subject to arbitration clauses of which they are unaware until a dispute arises. The enforceability of such clauses is often hotly disputed. This is particularly true in civil rights cases, pitting two established principles against each other ( i.e. , the preference for arbitration under federal law against a strong public policy against discrimination). Enforceability is often fact-specific, such as whether the agreement to arbitrate and the waiver of judicial remedy are sufficiently obvious and clear.

Although Theodore is not an employment case, its analysis may be useful, especially regarding on-line forms that invite a user to follow one or more links which can be easily bypassed. The US District Court’s analysis involved not only a review of the text itself but also a discussion of the font size, layout, and background color on the page. The Court went so far as to include screen-shots in the decision.

Ultimately, the Court refused to compel arbitration where Uber invited a customer to click to “CREATE ACCOUNT” without “reasonably communicating” the impact of doing so.

7. The Process – and Not Just the Final Decision – Matters

Comcast Corp. v. Nat’l Assoc. of African American-Owned Media, 140 S.Ct. 1009 (2020)

In Comcast , the Supreme Court of the United States unanimously held that the but-for causation standard applies to claims of racial discrimination raised under 42 U.S.C. § 1981, a statute which guarantees all persons the same right “to make and enforce contracts . . . as is enjoyed by white citizens.” However, the Court expressly declined to decide an issue raised by Comcast, i.e , whether § 1981(a) guarantees only the right to equivalent contractual outcomes, as Comcast argued, or if it also guarantees the right to an equivalent contracting process, as the law has been interpreted for years.

In her concurrence, Justice Ginsburg addressed Comcast’s argument directly:

“I write separately to resist Comcast’s attempt to cabin a ‘sweeping’ law designed to ‘break down all discrimination between black men and white men” … Under Comcast’s view, § 1981 countenances racial discrimination so long as it occurs in advance of the final contract-formation decision. Thus, a lender would not violate § 1981by requiring prospective borrowers to provide one reference letter if they are white and five if they black. Nor would an employer violate § 1981 by reimbursing expenses for white interviewees but requiring black applicants to pay their own way … That view cannot be squared with the statute. An equal ‘right … to make… contracts’ … is an empty promise without equal opportunities to present or receive offers and negotiate over terms … It is implausible that a law ‘intended to secure … practical freedom’ … would condone discriminatory barriers to contract formation.”

As Justice Ginsburg recognized, and recent events have made abundantly clear, we must remain vigilant to protect and expand, not erode, our civil rights laws.

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Labor & Employment Supreme Court Cases

Many of the labor and employment cases that have reached the Supreme Court involve claims of discrimination, harassment, or retaliation in the workplace. These may arise under Title VII of the Civil Rights Act of 1964, which prohibits adverse employment actions based on the race, color, religion, sex, or national origin of an employee. The Supreme Court also has reviewed cases under parallel anti-discrimination laws, such as the Americans With Disabilities Act and the Age Discrimination in Employment Act.

Meanwhile, the Employee Retirement Income Security Act of 1974 imposes rules for pension, health, and other benefit plans in the private sector. The Supreme Court has clarified ERISA terms and requirements, in addition to determining whether ERISA preempts various state laws. The ERISA preemption clause provides that the law supersedes any state laws to the extent that they relate to employee benefit plans. However, the ERISA savings clause allows states to regulate the business of insurance.

Other workplace issues addressed by the Supreme Court include employee privacy, wage and hour rules under the Fair Labor Standards Act, and the free speech rights of government employees. The Court also has discussed the use of arbitration to resolve labor and employment disputes.

Below is a selection of Supreme Court cases involving labor and employment, arranged from newest to oldest.

Author: Elena Kagan

Although an employee must show some harm from a forced job transfer to prevail in a Title VII claim, they do not need to show that the injury satisfies a significance test.

Author: Samuel A. Alito, Jr.

Title VII requires an employer that denies a religious accommodation to show that the burden of granting an accommodation would result in substantial increased costs in relation to the conduct of its particular business. The impact on coworkers is relevant only to the extent that it goes on to affect the conduct of the business.

The federal-sector provision of the ADEA demands that personnel actions be untainted by any consideration of age.

Author: Neil Gorsuch

An employer that fires an individual merely for being gay or transgender violates Title VII.

Author: Ruth Bader Ginsburg

Dodd-Frank's anti-retaliation provision does not extend to an individual who has not reported a violation of the securities laws to the SEC.

The state's extraction of agency fees from non-consenting public-sector employees violates the First Amendment.

Author: Stephen Breyer

When an employer demotes an employee out of a desire to prevent the employee from engaging in protected political activity, the employee is entitled to challenge that unlawful action under the First Amendment and Section 1983 even if the employer's actions are based on a factual mistake about the employee's behavior.

Author: Anthony Kennedy

ERISA preempts a state law that governs or interferes with the uniformity of plan administration.

Author: Antonin Scalia

To prevail in a disparate treatment claim, an applicant needs to show only that their need for an accommodation was a motivating factor in the employer's decision. They do not need to show that the employer had knowledge of their need.

Author: Sonia Sotomayor

A public employee's sworn testimony outside the scope of their ordinary job duties is entitled to First Amendment protection.

Author: Clarence Thomas

Time spent waiting to undergo and undergoing security screenings is not compensable under the FLSA.

Title VII retaliation claims must be proved according to traditional principles of but-for causation.

An employee is a supervisor for the purposes of vicarious liability under Title VII only if they are empowered by the employer to take tangible employment actions against the victim.

Author: John Roberts

The Establishment and Free Exercise Clauses bar lawsuits brought on behalf of ministers against their churches, claiming termination in violation of employment discrimination laws.

If a supervisor performs an act motivated by discriminatory animus that is intended by the supervisor to cause an adverse employment action, and if that act is a proximate cause of the ultimate employment action, the employer is liable.

In an employment discrimination class action, the conceptual gap between an individual's discrimination claim and the existence of a class of persons who have suffered the same injury must be bridged by significant proof that an employer operated under a general policy of discrimination. More generally, a class in a proposed class action has common questions of law or fact if their claims depend on a common contention of such a nature that it is capable of classwide resolution, which means that determination of its truth or falsity will resolve an issue that is central to the validity of each of the claims in one stroke.

A government employer's allegedly retaliatory actions against an employee do not give rise to liability under the Petition Clause of the First Amendment unless the employee's petition relates to a matter of public concern.

A government employer had a right to read text messages sent and received on a pager that the employer owned and issued to an employee.

Before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe that it will be subject to disparate impact liability if it fails to take the race-conscious, discriminatory action.

A plaintiff bringing an ADEA disparate treatment claim must prove that age was the but-for cause of the adverse employment action.

A provision in a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate ADEA claims is enforceable as a matter of federal law.

Author: David Souter

An employer defending a disparate impact claim under the ADEA bears both the burden of production and the burden of persuasion for the “reasonable factors other than age” (RFOA) affirmative defense.

The anti-retaliation provision of Title VII covers only those employer actions that would have been materially adverse to a reasonable employee or applicant. The plaintiff must show that the challenged action well might have dissuaded a reasonable worker from making or supporting a charge of discrimination.

When public employees make statements pursuant to their official duties, the Constitution does not insulate their communications from employer discipline.

Author: John Paul Stevens

When employees must don protective clothing on the employer's premises before they engage in the productive labor for which they are primarily hired, the time that employees spend walking between the changing area and the production area is compensable under the FLSA. However, the time that employees spend waiting to put on the protective gear is not compensable.

While the ADEA authorizes recovery in disparate impact cases, ADEA Section 4(f)(1) significantly narrows its coverage by permitting any otherwise prohibited action when the differentiation is based on reasonable factors other than age.

A plaintiff alleging sexual harassment can establish constructive discharge if they can show that the abusive working environment became so intolerable that their resignation qualified as a fitting response. An employer may assert the Faragher affirmative defense unless the plaintiff quit in reasonable response to an adverse action officially changing their employment status or situation.

ERISA prevents individuals from suing HMOs in state court for pure eligibility decisions. Also, if an individual at some point in time could have brought their claim under ERISA Section 502(a)(1)(B), and no other independent legal duty is implicated by a defendant's actions, the individual's cause of action is completely preempted.

The common-law element of control is the principal guidepost to be followed in deciding whether director-shareholder physicians in a medical clinic should be counted as employees for the purposes of the ADA. Factors to be considered in deciding whether a shareholder-director is an employee include whether the organization can hire or fire the individual or set rules for their work, whether the organization supervises their work, whether they report to someone higher in the organization, whether they can influence the organization, whether written agreements or contracts show that the parties intended the individual to be an employee, and whether the individual shares in the profits, losses, and liabilities of the organization.

Direct evidence of discrimination is not required for a plaintiff to obtain a mixed motive jury instruction under Title VII.

An agreement between an employer and an employee to arbitrate employment-related disputes does not bar the Equal Employment Opportunity Commission (EEOC) from pursuing victim-specific judicial relief, such as backpay, reinstatement, and damages, in an ADA enforcement action.

HMOs may be insurers and thus subject to state regulation of insurers. State laws directed toward the insurance industry are saved from preemption under ERISA's saving clause.

Author: Per Curiam

Judicial review of a labor arbitration decision pursuant to a collective bargaining agreement is very limited. Courts are not authorized to review an arbitrator's decision on the merits despite allegations that the decision rests on factual errors or misinterprets the parties' agreement. Even when the arbitrator's award may properly be vacated, the appropriate remedy is to remand the case for further arbitration proceedings.

A retaliation claim will not withstand a summary judgment motion when nobody could reasonably believe that the incident of which the plaintiff complained violated Title VII.

The exemption in Section 1 of the Federal Arbitration Act, which excludes contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce, is confined to transportation workers.

Author: Sandra Day O’Connor

A prima facie case of discrimination, combined with sufficient evidence for a reasonable jury to reject the employer's non-discriminatory explanation for its decision, may be adequate to sustain a finding of liability for intentional discrimination under the ADEA.

Mixed treatment and eligibility decisions by health maintenance organization (HMO) physicians are not fiduciary decisions under ERISA.

An employer's conduct does not need to be independently egregious to satisfy the requirements for a punitive damages award in a Title VII case. However, in the punitive damages context, an employer may not be vicariously liable for the discriminatory employment decisions of managerial agents when these decisions are contrary to the employer's good-faith efforts to comply with Title VII.

An employer is subject to vicarious liability to a victimized employee for an actionable hostile environment created by a supervisor with immediate or successively higher authority over the employee. When no tangible employment action is taken, the employer may raise an affirmative defense if they can show that they exercised reasonable care to prevent and correct promptly any sexually harassing behavior, and the plaintiff unreasonably failed to take advantage of any preventive or corrective opportunities provided by the employer or to avoid harm otherwise.

For a union to waive employees' rights to a federal judicial forum for statutory anti-discrimination claims, the agreement to arbitrate these claims must be clear and unmistakable.

Sex discrimination consisting of same-sex sexual harassment is actionable under Title VII.

Under Title VII, an employee who refuses the unwelcome and threatening sexual advances of a supervisor, yet suffers no adverse, tangible job consequences, may recover damages from the employer without showing that the employer was negligent or otherwise at fault for the supervisor's actions, but the employer may interpose an affirmative defense. (The defense consists of the elements in Faragher below.)

The power to amend or abolish an employee welfare benefit plan does not include the power to discriminate against the plan's participants and beneficiaries for the purpose of interfering with their attainment of rights under the plan.

The salary-basis test denies exempt status under the Fair Labor Standards Act when employees are covered by a policy that permits disciplinary or other deductions in pay as a practical matter. That standard is met if there is either an actual practice of making such deductions or an employment policy that creates a significant likelihood of such deductions.

The fact that one member of a protected class lost out to another member is irrelevant to an employment discrimination claim so long as they lost out because of their protected trait.

When employers or other plan sponsors adopt, modify, or terminate pension plans, they do not act as fiduciaries but are analogous to settlors of a trust.

A law operating as an indirect source of merely economic influence on administrative decisions should not suffice to trigger ERISA preemption.

An employee discharged in violation of the ADEA is not barred from all relief when, after their discharge, their employer discovers evidence of wrongdoing that, in any event, would have led to their termination on lawful and legitimate grounds had the employer known of it.

Title VII is violated when the workplace is permeated with discriminatory behavior that is sufficiently severe or pervasive to create a discriminatorily hostile or abusive working environment. This standard requires an objectively hostile or abusive environment, as well as the victim's subjective perception that the environment is abusive.

An employment decision based on years of service is not necessarily age-based, since this factor is analytically distinct from age.

The common-law test for determining who qualifies as an employee under ERISA considers the hiring party's right to control the manner and means by which the product is accomplished. Other factors to consider include the skill required, the source of the instrumentalities and tools, the location of the work, the duration of the relationship between the parties, the extent of the hired party's discretion over when and how long to work, and the method of payment, among others.

Author: Byron White

An ADEA claim can be subjected to compulsory arbitration.

ERISA's deemer clause demonstrates Congress' clear intent to exclude from the reach of the saving clause self-funded ERISA plans by relieving them from state laws purporting to regulate insurance. State laws directed toward such plans are preempted because they relate to an employee benefit plan but are not saved because they do not regulate insurance.

The proper comparison in a disparate impact employment discrimination case is generally between the racial composition of the at-issue jobs and the racial composition of the qualified population in the relevant labor market.

Author: William Brennan

In the specific context of sex stereotyping, an employer that acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.

For disclosure purposes, a “participant” in an ERISA plan means an employee in currently covered employment (or reasonably expected to be in currently covered employment), or a former employee who has a reasonable expectation of returning to covered employment or who has a colorable claim to vested benefits. To establish that they may become eligible for benefits, a claimant must have a colorable claim that they will prevail in a suit for benefits, or that eligibility requirements will be fulfilled in the future.

A policy of paying discharged employees for their unused vacation time does not constitute an employee welfare benefit plan within the meaning of ERISA, and a criminal action to enforce that policy is not foreclosed.

The National Labor Relations Act does not permit a union, over the objections of dues-paying non-member employees, to expend funds collected from them on activities unrelated to collective bargaining activities.

Disparate impact analysis in an employment discrimination claim may be applied to subjective employment criteria.

To be preempted by ERISA, a state statute must have some connection with or reference to a plan.

Both the inception and the scope of the intrusion must be reasonable when a public employer intrudes on the constitutionally protected privacy interests of government employees for non-investigatory, work-related purposes, as well as for investigations of work-related misconduct.

ERISA preempts state common law tort and contract actions asserting improper processing of a claim for benefits under an insured employee benefit plan.

Author: William Rehnquist

A claim of hostile environment sexual harassment is a form of sex discrimination that is actionable under Title VII.

Author: Harry Blackmun

A law relates to an employee benefit plan for ERISA purposes if it has a connection with or reference to such a plan.

When a public employee speaks as an employee on matters only of personal interest, a federal court is generally not the appropriate forum to review the wisdom of a personnel decision taken by a public agency allegedly in reaction to the employee's behavior.

A non-job-related test that has a disparate impact and is used to limit or classify employees is used to discriminate within the meaning of Title VII, even if it was not designed or intended to have this effect and even if an employer tries to compensate for its discriminatory effect.

Author: Lewis Powell

When a plaintiff in a Title VII case has proved a prima facie case of employment discrimination, the defendant bears only the burden of explaining clearly the non-discriminatory reasons for its actions. It is sufficient if the defendant's evidence raises a genuine issue of fact as to whether it discriminated against the plaintiff.

Author: Potter Stewart

A regulation could permit private employees of a private employer to avoid workplace conditions that they believe pose grave dangers to their own safety, when the employees have no power under the regulation to order their employer to correct the hazardous condition or to clear the dangerous workplace of others.

A public employee does not forfeit their First Amendment protection when they arrange to communicate privately with their employer, rather than expressing their views publicly.

Once a prima facie case has been established by statistical workforce disparities, the employer must have an opportunity to show that the claimed discriminatory pattern was a product of pre-Title VII hiring, rather than unlawful post-Title VII discrimination.

To establish a prima facie case of employment discrimination, a plaintiff need only show that facially neutral standards select applicants for hire in a significantly discriminatory pattern. If the employer proves that the challenged requirements are job-related, the plaintiff may show that other selection devices without a similar discriminatory effect would also serve the employer's legitimate interest in efficient and trustworthy workmanship.

In cases alleging a pattern or practice of employment discrimination, the government must show that discrimination was the standard operating procedure of the defendant. Statistics may be used in proving discrimination.

An employee's statutory right to trial de novo under Title VII is not foreclosed by prior submission of their claim to final arbitration under the non-discrimination clause of a collective bargaining agreement.

In a private, non-class action complaint under Title VII charging racial employment discrimination, the complainant has the burden of establishing a prima facie case, which they can satisfy by showing that they belong to a racial minority, they applied and were qualified for a job that the employer was trying to fill, they were rejected, and the employer continued to seek applicants with their qualifications.

Author: Warren Burger

An employment practice that operates to exclude members of a protected group is prohibited if it cannot be shown to be related to job performance, even if the employer lacked discriminatory intent.

Author: Thurgood Marshall

When a public employee's false statements concerned issues that were currently the subject of public attention and did not interfere with the performance of their duties or the general operation of their employer, they were entitled to the same protection as if the statements had been made by a member of the general public.

Author: Robert H. Jackson

The fact that an employer has individual contracts of employment with a majority of its employees does not preclude the employees from exercising their right under the National Labor Relations Act to choose a representative for collective bargaining, nor does it warrant refusal by the employer to bargain with this representative regarding terms covered by the individual contracts.

Rulings, interpretations, and opinions of agency administrators are not controlling on courts but provide a body of experience and informed judgment that courts can use for guidance. The weight of such a judgment depends on the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors that give it power to persuade, if lacking power to control. Also, no principle of law precludes a determination that waiting time is working time under the Fair Labor Standards Act.

Author: Charles Evans Hughes

In recognizing the right to strike, the National Labor Relations Act contemplates a lawful strike. When a strike, even if it arose from unfair labor practices, is initiated and conducted in lawlessness by the seizure and retention of the employer's property, and the strikers are discharged because of their lawlessness, they do not remain employees under the NLRA.

A restraint or regulation of the liberty to contract is due process if it is reasonable in relation to its subject and adopted for the protection of the community against evils menacing the health, safety, morals, and welfare of the people. Also, in dealing with the relation of employer and employed, the legislature has a wide field of discretion in order that there may be suitable protection of health and safety, and that peace and good order may be promoted through regulations designed to ensure wholesome conditions of work and freedom from oppression.

Author: George Sutherland

Legislation fixing hours or conditions of work may properly take into account the physical differences between men and women, but the doctrine that women of mature age require (or may be subjected to) restrictions on their liberty of contract that could not lawfully be imposed on men in similar circumstances must be rejected.

Author: John Marshall Harlan

It is not within the power of Congress to make it a criminal offense against the United States for a carrier engaged in interstate commerce to discharge an employee simply because of their membership in a labor organization. A provision to that effect is an invasion of personal liberty and the right of property and is unenforceable under the Due Process Clause.

Author: David Josiah Brewer

The regulation of the working hours of women falls within the police power of the state, and a statute directed exclusively to such regulation does not conflict with the Due Process or Equal Protection Clauses.

A U.S. court has no jurisdiction under the Thirteenth Amendment or other federal laws of a charge of conspiracy made and carried out in a state to prevent citizens of African descent, because of their race and color, from making or carrying out contracts and agreements to labor.

Author: Rufus Wheeler Peckham

The general right to make a contract in relation to one's business is part of the liberty protected by the Fourteenth Amendment, and this includes the right to purchase and sell labor, except as controlled by the state in the legitimate exercise of its police power.

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The best and worst employment cases of 2021

The cases that shaped the year in employment law (with a bit of color commentary).

Continuing what has become the new normal, the courts churned out an astonishing number of employment-law decisions during the past year – often multiple such decisions per day. This article attempts to “cherry-pick” and then briefly summarize not just the most significant employment cases but also those that are of the most utility to the plaintiff-employment practitioner.

Legislation

Although legislation falls outside the purview of this article, one piece of legislation in particular merits attention – the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021” (“EFASASHA”), long-championed by Senator Kirsten Gillibrand (D-NY). On February 7, 2022, the U.S. House of Representatives passed EFASASHA by a vote of 335 to 97 (only Republicans voted against the Act). On February 10, 2022, the Senate passed the Act by a voice vote. The Act has seismic consequences for employment law as it bars the enforcement of most pre-dispute forced arbitration provisions in cases alleging sexual assault or sexual harassment. Once President Joseph R. Biden Jr. signs the Act into law (as he has promised to do), it will apply to all pre-dispute arbitration clauses (including those in contracts executed before the law’s enactment).

The law will also invalidate pre-dispute agreements that waive an employee’s right to participate in a joint, class or collective action in court, arbitration or any other forum that relates to a sexual assault or sexual harassment dispute.

Moreover, if a dispute arises about whether a particular claim qualifies as a “sexual assault dispute” or “sexual harassment dispute,” then a court, not an arbitrator, is to answer that question, even if a contractual term exists to the contrary. Unfortunately, EFASASHA is quite narrow in scope as it does not: (1) prohibit forced arbitration provisions outright; instead, it provides what amounts to an “election of remedies,” through which alleged victims can either arbitrate their claims or instead proceed to court; nor (2) apply to forms of discrimination or harassment other than sexual assault and sexual harassment. Hopefully, Congress will eventually amend the Federal Arbitration Act to expressly provide that it does not cover employment or consumer disputes.

U.S. Supreme Court

Unlike in past years, the Supreme Court issued just two employment-related decisions along with another decision that indirectly impacts employment practitioners.

National Federation of Independent Business v. Department of Labor, Occupational Safety and Health Administration , 2022 WL 120952 (2022)

In perhaps the most consequential recent decisions affecting workers, the U.S. Supreme Court granted a stay of the Occupational Safety and Health Administration’s (“OSHA”) emergency temporary standard requiring all employers of 100 or more individuals to mandate either vaccination for COVID-19 or weekly testing and indoor masking for their employees. The federal agency estimated that over 6,000 lives would be saved within six months of implementing the rule, making the decision a life-and-death one for this nation’s workers.

In a decision penned by Justice Gorsuch (who refuses to wear a mask during oral argument forcing some of his colleagues to appear remotely), the Court concluded that OSHA’s mandate to protect workers from hazards on the job is limited to hazards that uniquely arise in the employment context. The Court indicated it was the proper role of Congress and the several states to implement such sweeping policies.

Just such a state-level mandate implemented by the California Occupational Safety and Health Standards Board was upheld in Western Growers Association v. Occupational Safety and Health Standards Board , 2021 WL 6426429 (2021) against attack by the Business Roundtable.

In a related decision, Biden v. Missouri , 2022 WL 120950 (2022), the Supreme Court found that the Secretary of Health and Human Services is empowered to condition the receipt of Medicare and Medicaid funds on requiring health care employers to implement a vaccine mandate for health care staff, finding that the safety of patients in this medical context was sufficient to justify mandatory vaccination regimes.

Van Buren v. United States , 141 S.Ct. 1648 (2021)

Employers and their counsel routinely seek leverage against employees by arguing that they have engaged in criminal activity (a violation of the Computer Fraud and Abuse Act) if they have improper motives in obtaining information from their employers’ computer systems even if that information is otherwise available to them. In Van Buren , the Supreme Court held that the Computer Fraud and Abuse Act covers only those who obtain information from particular areas in the computer – such as files, folders, or databases – to which their computer access does not extend.

Ninth Circuit

The Ninth Circuit decided seven employment cases of note; four involved gender discrimination/harassment, two concerned arbitration, and the last addressed wage and hour issues.

Maner v. Dignity Health , 9 F.4th 1114 (9th Cir. 2021)

In Maner , the Ninth Circuit held that an employer does not violate Title VII’s prohibition on sex discrimination by favoring a supervisor’s sexual or romantic partner over another employee. Applying the test outlined in Bostock v. Clayton County ,__ U.S__, 140 S. Ct. 1731 (2020) – that is, whether the employer intentionally relies in part on an individual employee’s sex when taking an adverse employment action – the Ninth Circuit held that a plaintiff cannot assert a Title VII claim based on sexual favoritism. But favoritism based upon coerced sexual conduct may still constitute quid pro quo harassment.

Fried v. Wynn Las Vegas , 18 F.4th 643 (9th Cir. 2021)

Fried deals with the circumstance where an employer will be held liable for a hostile work environment created by the conduct of third parties. Fried, a manicurist at a hotel nail salon, complained that he was sexually propositioned by a customer. His manager told him to continue to perform services for the customer and thereby exposed him to further sexual harassment. According to the appellate court, this response by the employer “discounted and effectively condoned the customer’s sexual harassment and … went a step further by conveying that Fried was expected to tolerate the customer’s harassment as part of his job.” Thus, summary judgment was inappropriate based on this incident alone.

The court also opined on several gendered comments that were made during Fried’s employment, including that he was in a “female job environment” and that he should consider wearing a wig to get more clients, concluding such comments, on their own, did not constitute severe or pervasive harassment.

Freyd v. Univ. of Oregon , 990 F.3d 1211 (9th Cir. 2021)

In a case against a university employer alleging unequal pay based on sex under federal law, the Ninth Circuit reversed summary judgment. The plaintiff pointed to an average difference of $15,000 in annual salary between male and female professors, largely attributable to the employer’s practice of awarding “retention bonuses” to professors who entertained interest from other universities and received offers to move to those schools.

The employer argued that the practice was a business necessity, required for its ability to retain top talent, but the plaintiff argued that the practice disproportionately affected female professors who are less likely to uproot their families and move to other cities. Because the university had not addressed the plaintiff’s contention that awarding an increase to all professors in a department when any one was awarded a retention bonus would serve the same business purpose, the trial court’s award of summary judgment had been premature.

Meland v. Weber , 2 F.4th 838 (9th Cir. 2021)

In 2018, the California legislature passed, and Governor Jerry Brown signed into law, Senate Bill 826 (“SB 826”) which required all corporations headquartered in California to have a minimum number of women on their boards of directors based on board size. The law further provided that corporations that do not comply with SB 826 may be subject to monetary penalties. In this action, a shareholder of a California company who was responsible for voting for board members brought a section 1983 action alleging that the law required him to discriminate on the basis of sex in violation of the Fourteenth Amendment. The district court dismissed his claim for lack of standing, but the Ninth Circuit reversed, finding that being subjected to a law that “require[s] or encourage[s]” shareholders to vote in a discriminatory manner is an individualized harm sufficient to ground Article III standing. Having survived this preliminary challenge, the substantive decision regarding whether this corporate affirmative action scheme runs afoul of the Constitution remains to be decided in the district court.

Chamber of Commerce of United States v. Bonta , 13 F.4th 766 (9th Cir. 2021)

Over the past few decades, the practice of employers mandating arbitration of employment disputes has proliferated, aided by a slew of decisions by the U.S. Supreme Court under the Federal Arbitration Act (“FAA”) approving of the practice. Following the failure of several legislative attempts by the state of California to empower its workers against this system of mandatory arbitration, the Ninth Circuit upheld its latest effort, California Labor Code section 432.6, against an attack by employers.

The statute makes it an unlawful employment practice to condition employment or the receipt of employment benefits upon an employee’s agreement to enter into an agreement to arbitrate employment disputes. By focusing on conduct that takes place before the formation of an agreement to arbitrate, the statute successfully skirted the ambit of the FAA. In affirming the law, the Ninth Circuit created a split with the First and Fourth Circuit, which may tempt Supreme Court intervention. Until that time, employees in California can still refuse to enter into arbitration agreements without risking their jobs.

Ahlstrom v. DHI Mortgage Company, Ltd., L.P. , 21 F.4th 631 (9th Cir. 2021)

In this decision, the Ninth Circuit held that, notwithstanding the existence of an arbitration agreement’s delegation clause that provided for issues of contract formation to be decided by the arbitrator, challenges to the very existence of the arbitration agreement must be decided by a court.

American Society of Journalists and Authors, Inc. v. Bonta, 15 F.4th 954 (9th Cir. 2021)

To address the misclassification of employees as independent contractors, California passed Assembly Bill 5, and later AB 2257, which codified a more expansive test for determining a worker’s status, albeit with certain occupational exemptions. Because freelance writers, photographers, and others received a narrower exemption than was offered to certain other professionals, the American Society of Journalists and Authors, Inc., and the National Press Photographers Association (collectively, ASJA) sued, alleging violations of the First Amendment and Equal Protection Clause.

The Ninth Circuit affirmed the dismissal of the lawsuit, finding that Labor Code section 2778 does not implicate either the First Amendment or the Equal Protection Clause, because it does not facially limit what someone can or cannot communicate and does “not restrict when, where, or how someone could speak,” but instead is aimed at regulating the employment relationship.

California Supreme Court

The California Supreme Court issued two pro-employee decisions. The first, a blockbuster, substantially lowered the burden for plaintiff employees on summary judgment and at trial in Labor Code section 1102.5 cases. The second concerned attorneys’ fees on appeal and the statute of limitations in FEHA claims that are based on failure-to-promote allegations.

Lawson v. PPG Architectural Finishes, Inc. , 2022 WL 244731 (2022)

In this case the California Supreme Court addressed the proper standard for the evaluation of whistleblower-retaliation actions under Labor Code section 1102.5, finding that employees need not satisfy the McDonnell Douglas burden-shifting test to make out a case of unlawful retaliation. Instead, the Court held that Labor Code section 1102.6 lays out the proper burden-shifting analysis, as follows: “First, it must be ‘demonstrated by a preponderance of the evidence’ that the employee’s protected whistleblowing was a ‘contributing factor’ to an adverse employment action… Then, once the employee has made that necessary threshold showing, the employer bears ‘the burden of proof to demonstrate by clear and convincing evidence that the alleged adverse employment action would have occurred ‘for legitimate, independent reasons’ even if the employee had not engaged in protected whistleblowing activities.”

Pollock v. Tri-Modal Distrib. Servs., Inc. , 11 Cal.5th 918 (2021)

In this case, the Court found that an asymmetric standard regarding attorneys’ fees applies on the appeal of an FEHA claim, i.e., unlike prevailing FEHA plaintiffs, who automatically recover fees, an employer can only recover fees following success on appeal if it can show that the employee’s appeal was frivolous or groundless.

This case also clarified that in a failure-to-promote case, the statute of limitations begins to run when the plaintiff has actual or constructive knowledge of the failure to promote. Where the employer proffered the date on which it promoted another employee over the plaintiff as the date of the alleged failure to promote, but there was evidence casting doubt on whether the plaintiff was informed that she had not received the promotion until much later, the case was remanded for reconsideration of whether the claim was time-barred.

California Courts of Appeal

The California Courts of Appeal issued a blizzard of employment decisions.

De Leon v. Pinnacle Property Management Services, LLC , 72 Cal.App.5th 476 (2021)

Although this case involves an arbitration agreement entered into before the effective date of Labor Code section 432.6 (January 1, 2020), the court nevertheless found the agreement was procedurally unconscionable because it was made a condition of employment. The court also found that provisions reducing the statute of limitations to one year for employment claims and limiting discovery to only 20 interrogatories rendered the agreement substantively unconscionable, noting the informational imbalance between employers and plaintiffs in employment cases. Given the adhesive nature of the contract and its severe limitations on discovery, the court refused to sever the offending provisions, instead finding its “multiple defects indicate a systematic effort to impose arbitration on an employee not simply as an alternative to litigation, but as an inferior forum that works to the employer’s advantage.”

Bannister v. Marinidence Opco, LLC , 64 Cal.App.5th 541 (2021)

In another case focusing on arbitration contract formation, Bannister should serve as a warning to employers not to cut corners in employee onboarding and for the plaintiffs’ bar to heavily scrutinize the circumstances under which plaintiffs electronically sign arbitration agreements. Where the plaintiff presented evidence that an arbitration agreement was signed on her behalf by the employer in a group onboarding process, the trial court found, and the appellate court upheld, that the employer had failed to authenticate the signature and could not compel the plaintiff to arbitration.

Had the plaintiff been assigned a unique, private username and password such that she was the only person who could have signed the agreement, the court indicated the signature would have survived scrutiny. The enforceability of electronically signed arbitration agreements is clearly a fact-intensive question; courts are willing to invalidate such “agreements” where the signature proffered by an employer cannot be linked to the voluntary act of the plaintiff.

Jolie v. Superior Court of Los Angeles County , 66 Cal.App.5th 1025 (2021)

One of the central criticisms leveled at the system of private arbitration is its bias towards “repeat players,” the defense firms and corporate clients who pay for the process. In this family law case involving A-list celebrities, the court clarified the ethical rules for all neutrals to disclose the identities of their “repeat players.” When Angelina Jolie discovered that the temporary judge that she and Brad Pitt paid to adjudicate their divorce proceedings had handled several other matters involving Mr. Pitt’s counsel which had not been disclosed, she sought to have the judge disqualified. The court agreed with Ms. Jolie, finding that the judge’s failure to disclose business he received from Mr. Pitt’s counsel created an appearance of impropriety and violated the California Rules of Civil Procedure and California Code of Judicial Ethics.

Patterson v. Superior Court , 70 Cal.App.5th 473 (2021)

The California Fair Employment and Housing Act (“FEHA”) sets up an “asymmetric standard” for the award of attorney’s fees whereby prevailing plaintiffs can recover their fees, but prevailing defendants can only recover upon a further showing that the plaintiff’s claims were frivolous or groundless when brought. In this FEHA case, an employer attempted to enforce a contractual fee-shifting provision in an arbitration agreement that would have allowed it to recover fees for successfully compelling the plaintiff to arbitration. The court found that such a provision could be enforced, but only upon the same asymmetric basis contemplated in FEHA, i.e., only upon a showing that the plaintiff’s opposition to arbitration was frivolous or groundless.

Guzman v. NBA Automotive, Inc. , 68 Cal.App.5th 1109 (2021)

In a decision which refused to elevate form over substance, the Court of Appeal held that a plaintiff adequately exhausted administrative remedies even though she failed to state her former employer’s correct legal name in her administrative complaint. The plaintiff wrote “Hooman Enterprises, Inc. dba Hooman Chevrolet of Culver City” in her complaint to DFEH, although the employer’s actual name was “NBA Automotive, Inc. dba Hooman Chevrolet of Culver City.” Rather than allow employers to use the web of legal entities and confusing official titles to evade responsibility, the court held that: “[t]o allow NBA Automotive to escape liability for discriminatory conduct merely because Guzman identified her employer administratively with a name that was nearly the same as, but not quite identical to, her employer’s actual fictitious business name would be contrary to the purposes of FEHA.”

Smith v. BP Lubricants USA Inc. , 64 Cal.App.5th 138 (2021)

This case clarified the limits of third-party liability for aiding and abetting violations of FEHA. Robert Smith, a Black man, alleged he was subjected to racial harassment and discrimination by his employer, Jiffy Lube. During his employment with Jiffy Lube, third-party vendor BP Lubricants USA, Inc. (“BP Lubricants”) and its employee, Gus Pumarol, gave a presentation at Mr. Smith’s worksite, during which Mr. Pumarol made several inappropriate racial remarks including referring to Mr. Smith as “Barry White” and “Banana Hands.” Based upon this incident, Mr. Smith named BP Lubricants and Mr. Pumarol as defendants to his FEHA claim on an aiding and abetting theory. The appellate court affirmed the trial court’s order sustaining BP Lubricants’ and Mr. Pumarol’s demurrer, finding that they could not have aided and abetted Jiffy Lube in its harassment of Mr. Smith, as they had no knowledge of the harassment and did not provide “substantial assistance or encouragement” to Jiffy Lube to violate FEHA. Nevertheless, BP Lubricants and Pumarol were potentially liable for intentional infliction of emotional distress and violation of the Unruh Act’s prohibition on racial discrimination in public accommodations for their conduct.

Jorgensen v. Loyola Marymount University , 68 Cal.App.5th 882 (2021)

In this case, the appellate court reversed a trial court’s grant of summary judgment in favor of the university employer on a plaintiff’s age-discrimination claim where the trial court had excluded a declaration showing that a university official had rejected a different job candidate, stating they wanted “someone younger.” The employer argued the witness declaration containing this quote was hearsay, irrelevant, conjecture and speculation. The court found the statement fell under the hearsay exception for states of mind and could not be conjectural or speculative, given that it was a word-for-word quote of the university official’s statement. The court also found that the statement was relevant under the “stray remarks doctrine” as articulated in Reid v. Google, Inc. , 50 Cal.4th 512 (2010) which found that an “age-based remark not made directly in the context of an employment decision or uttered by a non-decisionmaker may be relevant, circumstantial evidence of discrimination.” Here, where there was evidence that the university official who had made the “someone younger” comment had influence over the decisionmaker who denied the older plaintiff a promotion, summary judgment was inappropriate.

Zamora v. Security Indus. Specialists, Inc. , 71 Cal.App.5th 1 (2021)

In this case, a security guard injured his knee on the job. Shortly after his doctor released him back to work, he was laid off as part of a reduction in force, along with three other employees whose performance was similarly ranked. The employer found replacement positions for two of the other employees, but not plaintiff Mr. Zamora. The trial court found that the close temporal relationship between the termination and Mr. Zamora’s disability leave, along with the evidence that non-disabled coworkers were reassigned rather than terminated, was insufficient to survive summary judgment on his disability-related claims.

The appellate court reversed, holding that a reasonable jury could find this evidence sufficient to conclude that the employer discriminated against Mr. Zamora, particularly where the employer had not provided a non-discriminatory explanation for its failure to reassign Mr. Zamora as it did for others lacking disabilities.

Amaro v. Anaheim Arena Management, LLC , 69 Cal.App.5th 521 (2021)

In this wage-and-hour action, the court bemoaned the paucity of guidance on the approval of class-action settlements under state law and provided some further guidance beyond the basic formulation of “fair, adequate and reasonable.” The court found that releases in class actions under state labor law can include all claims reasonably arising from the same operative facts alleged in the complaint. The court further promoted settlement of these claims by permitting plaintiffs to release PAGA claims beyond the one-year limitations period of their own claims and to settle FLSA claims without complying with the FLSA’s opt-in requirements. Lastly, the court provided helpful guidance to those defending a settlement against allegations of a “reverse auction.” Where class counsel engaged in a lengthy, arms-length negotiation process and sought a fee in line with counsel’s lodestar, and where the objector had not provided any evidence of collusion beyond unsupported contentions that the settlement amount was inadequate, the appellate court affirmed the trial court’s approval of the settlement against “reverse auction” allegations.

Medina v. Equilon Enterprises, LLC , 68 Cal.App.5th 868 (2021)

In this case dealing with the standard for joint-employer liability, the court held that an entity can be a joint employer without exercising direct control over the employee, refusing to apply the Dynamex ABC test in the joint-employer context. Instead, it applied the more plaintiff- friendly “suffer or permit” standard. This standard was developed in the context of the enforcement of laws against child labor, to make clear that employers had obligations towards every person who, as a matter of fact, was working at their worksites, whether or not such persons had been formally hired.

In this case, the plaintiff was working at a Shell gas station that was operated by another company who directly hired and managed the plaintiff. Despite the use of this intermediary company, Shell owned the gas station and had near-complete control over its “finances, day-to-day operations, facilities and labor practices.” Further, Shell employees made statements to the plaintiff that they could have him fired and that they had caused employees to be fired by operator companies in the past. On these facts, Shell clearly “suffered or permitted” the plaintiff to work at its worksite and could face joint employer liability for labor violations against him.

Briley v. City of West Covina , 66 Cal.App.5th 119 (2021)

In this whistleblower-retaliation case, the appellate court reduced the jury’s award of $3.5 million in emotional-distress damages to $1.1 million, finding the jury’s award had been excessive where the plaintiff testified to only garden-variety emotional distress that any plaintiff would experience upon being wrongfully terminated. Although the plaintiff described sleep issues, financial distress and feeling “devastated,” and his demeanor was credible and affecting to the jury, this could not overcome the fact that his symptoms of distress were not objectively severe and had lessened over time.

Morales v. Factor Surfaces LLC , 70 Cal.App.5th 367 (2021)

This case describes the correct method for calculating the regular rate of pay for commissioned workers. Usually, courts should calculate this rate by dividing the worker’s total commissions in a given week by the number of hours worked, including overtime hours. Here, the employer failed to keep records of the amount of pay in each paycheck attributable to commissions, nor did it provide the court with any suggested method of accurately assessing the amount of the commission payments. As any prejudice caused by the employer’s failure to keep accurate records should redound to the employer, the trial court’s calculation of the employee’s pay based on the number of non-overtime hours worked was a reasonable estimate that could be used as the employee’s regular rate of pay.

Donohue v. AMN Servs., LLC , 11 Cal.5th 58 (2021)

In this case alleging meal-break violations, the California Supreme Court held that the employer practice of “rounding” time punches for meal breaks is not permitted under California Labor Code and Wage Orders. While the Court recognized that time rounding was, in general, permitted under federal law and prior California decisions, it decided not to follow that authority with respect to meal periods. Instead, citing the “health and safety concerns” that underlie meal period requirements, the Court distinguished “the meal period context from the wage calculation context, in which the practice of rounding time punches was developed” and noted that “even relatively minor infringements on meal periods can cause substantial burdens to the employee.” The Court went on to endorse a concurrence by Justice Werdegar in Brinker Restaurant Corp. v. Superior Court , 53 Cal.4th 1004 (2012), oft-cited by plaintiffs’ lawyers, in which she suggested that if an employer’s records did not reflect a compliant meal period, it would raise a rebuttable presumption that none was provided. However, the Court did provide helpful clarification about how employers could overcome such a presumption: “by presenting evidence that employees were compensated for noncompliant meals or that they had in fact been provided compliant meal periods during which they chose to work.”

Santos v. El Guapos Tacos, LLC , 2021 WL 5626375 (Cal.App. 6 Dist., 2021)

In this wage-and-hour case, the Court of Appeal reversed a trial court’s dismissal with prejudice of the plaintiff’s representative cause of action under PAGA for failure to satisfy the notice requirements under the Act. Relying on Khan v. Dunn- Edwards Corp. , 19 Cal.App.5th 804 (2018) and Brown v. Ralphs Grocery Co. , 28 Cal.App.5th 824 (2018), the employer argued that the plaintiff’s PAGA notice was defective because she did not reference either a “group of others” or “other aggrieved employees.”

The trial court accepted this argument and dismissed the PAGA claims. The Court of Appeal disagreed and reversed: “We do not see how a general reference to ‘a group of others’ or to ‘other aggrieved employees’ is necessary to inform the LWDA or the employer of the representative nature of a PAGA claim. While we appreciate that uniquely individual claims would not satisfy the statute, a prefiling notice is not necessarily deficient merely because a plaintiff fails to state that she is bringing her PAGA claim on behalf of herself and others. PAGA claims function as a substitute for an action brought by the government itself. Thus, PAGA claims, by their very nature, are only brought on a representative basis.”

Martinez v. Rite Aid Corp. , 63 Cal.App.5th 958 (2021)

In this case the Court of Appeal agreed with Rite Aid that the $140,840 the plaintiff earned from post-Rite Aid employment needed to be deducted from his economic-damages award in a wrongful-termination action. In so holding, court disagreed with the decisions in Villacorta v. Cemex Cement, Inc. , 221 Cal.App.4th 1425 (2013) and Rabago-Alvarez v. Dart Industries, Inc. , 55 Cal.App.3d 91 (1976), which cogently held that wages actually earned from an inferior job may not be used to mitigate damages, arguing that if they were so used, it would result in senselessly penalizing an employee who, either because of an honest desire to work or a lack of financial resources, is willing to take whatever employment he can find.

Andrew H. Friedman

Andrew H. Friedman is a partner with Helmer Friedman LLP in Beverly Hills. He received his B.A. from Vanderbilt University and his J.D. from Cornell Law School, where he was an Editor of the Cornell Law Review. Mr. Friedman clerked for the Honorable Judge John T. Nixon (U.S. District Court for the Middle District of Tennessee). Mr. Friedman represents individuals and groups of individuals in employment law and consumer rights cases. Mr. Friedman is the author of Litigating Employment Discrimination Cases (James Publishing 2005-2019). Mr. Friedman served as Counsel of Record in 0 (Case No. 10-56068) where he successfully convinced the U.S. Supreme Court to grant the petition for certiorari that he filed on behalf of his clients. In January 2017, the Supreme Court, in a unanimous decision authored by Justice Sotomayor, reversed the Ninth Circuit and ruled in favor of Mr. Friedman’s clients.

Taylor Markey

Taylor Markey is a Senior Trial Attorney at the United States Equal Employment Opportunity Commission (EEOC), Los Angeles District Office. The views expressed in this article are solely attributable to Ms. Markey in her personal, non-official capacity and do not necessarily represent the views of her employer. Ms. Markey received her B.A. from the University of Southern California and her J.D. from the UCLA School of Law.

Subject Matter Index

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• Business Insights

The 10 most important employment law cases of 2021

We take a look that at the 10 most important employment cases of 2021 which HR professionals and business owners need to be aware of.

1. Employment status - purpose of legislation takes centre stage

In Aslam v Uber  the Supreme Court decided that Uber drivers were workers (and entitled minimum pay rates and statutory holiday)   because they were in a position of subordination and dependence to the company. 

It rejected the complicated contractual documentation Uber had put in place to make it appear as though the drivers were self-employed and said that tribunals must examine the actual relationship between the parties rather than the way that relationship is presented in the contract/s. Tribunals must start by looking at the wording of the law, consider what harm it was introduced to prevent and then apply that knowledge to the facts of the case.  

Why this matters

This decision isn't limited to the gig economy. If you engage 'independent contractors' who are, in reality, workers or employees you won't be able to hide behind cleverly worded contracts to avoid a tribunal making an adverse decision against you. The tribunal will examine the nature of your relationship with the worker and will ignore anything in the agreed contractual terms that is inconsistent with those findings.  

2. National minimum wage - payment for sleep in shifts

In Mencap v Tomlinson-Blake and Shannon v Rampersad (t/a Clifton House Residential Home)   the Supreme Court had to decide whether workers who provided sleep-in cover should be paid at the appropriate NMW rate for every hour of their sleep-in shift - even if they didn't perform any work.

It decided that workers who have to sleep at or near their place of work in order to respond to emergencies etc aren't entitled to be paid NMW rates when they are asleep. But, they must receive NMW when they are awake for the purposes of working, such as responding to an emergency call. 

Although this decision mainly impacts the care sector, it could also apply to night watchmen and emergency call handlers.

If you engage someone whose job it is to sleep and you provide facilities to enable them to do this, you only have to pay them the relevant NMW rates if they have to perform work during their shifts, but not if they can't sleep for other reasons (such as noise etc). You can agree a different rate of pay with them for any time when they aren't working.   

3. Collective bargaining - when can employers make direct offers to staff?

In Kostal v Dunkley and others the Supreme Court had to decide when an employer, operating within the context of a unionised workforce, can lawfully approach its staff direct to try and reach agreement where negotiations with the union have failed.

It held that employers can only lawfully approach staff direct to try and impose new terms and conditions, once they have followed and exhausted the agreed collective bargaining agreement. 

This decision doesn't mean that unions can veto any changes to terms and conditions of employment they don't support. You can approach staff who are union members to try and agree terms provided you've followed all of the steps set out in the collective agreement. But you must have reached this point and be able to show that you genuinely believed that the collective process had come to an end. You can't short-cut the process even if it's obvious that the union will not support the changes you want to make. 

Even if it doesn't look as though you are going to reach agreement with the union and are close to exhausting the process, we recommend that you take legal advice before you decide to approach union members direct. The financial consequences of getting this wrong are, potentially, very large. Awards are fixed and tribunals can't reduce them like they can in other claims. 

4. Flexible working policies: indirect discrimination and the childcare disparity

In Dobson v North Cumbria Integrated Care NHS Foundation Trust , the EAT made it clear that tribunals must accept, as fact, that women still bear the primary burden of childcare responsibilities and this makes it difficult for them to work certain hours.  

It now easier for women to establish group disadvantage for the purposes of an indirect sex discrimination claim. For example, women are more likely to find it difficult to work certain hours (e.g. nights) or changeable hours (where the changes are dictated by the employer) than men because of childcare responsibilities. 

This decision means that women will not have to provide their own supporting evidence when pursuing claims of indirect sex discrimination in circumstances where factors relating to childcare put them at a disadvantage.

But that doesn't mean that a tribunal will find that a particular policy does, in fact, discriminate against women. For example, if a requirement to work flexibly requires working any period of eight hours within a fixed window, or involves some other arrangement that might not necessarily be more difficult for those with childcare responsibilities, then it would be open to a tribunal to conclude that group disadvantage is not made out.

5. Equality: gender critical beliefs

The EAT in   Forstater v CGD Europe and others held that a belief that biological sex is real, important, immutable and can't be conflated with gender identity* is a philosophical belief protected under the Equality Act. 

*Gender identity is a person’s innate sense of their own gender, whether male, female or something else  which may or may not correspond to the sex assigned at birth.

Why it matters

This decision has to be seen in the context of the highly charged (and in some cases toxic) debate around 'trans rights'. The law now protects both those people who believe in gender identity and those who hold gender critical beliefs. But that doesn't mean that either group are free to act on their beliefs in the context of work and, for example, to harass or bully those who hold different views. So, people who hold gender-critical beliefs can't ‘misgender’ trans people with impunity. Nor should those who believe in gender identity accuse colleagues of being 'transphobic' simply on the basis that they take a different viewpoint. 

This can be a very difficult path to navigate, particularly if you have groups of people in your organisation with polarised views. You should not impose blanket restrictions preventing staff from expressing their views but you can (and probably should) remind them that you expect all staff to treat each other with courtesy and respect. And it's also helpful to remind them about what could happen if they step over the line. 

6. Menopause: are menopausal symptoms a disability in law? 

In order to bring a disability discrimination claim, an employee has to show that they have a mental or physical condition, which has a substantial and long-term effect on their ability to carry out normal 'day to day' activities. Day to day tasks are not limited to workplace tasks and can include an inability to sleep or concentrate. Substantial is something that is more than trivial and, long term means that it has, or is likely to, affect an individual for over 12 months. 

In Rooney v Leicester City Council the EAT held that an employment tribunal erred in law in holding that a woman who had severe peri-menopausal symptoms was not a disabled person. She suffered from insomnia (causing fatigue & tiredness), light headedness, confusion, stress, depression, anxiety, palpitations, memory loss, migraines & hot flushes - symptoms had a negative impact on her life. 

Women make up 47% of the workforce and outnumber men in many areas of the labour market. The majority of women affected by menopause (those aged 50 to 64) are the fastest growing economically active group in the UK. Around 70% of working women in the UK (that’s almost 4.5 million) are in this age bracket. And that number is set to increase. More women than ever before will therefore transition to the menopause while working and employers that fail to support them through this process will lose their skills and expertise.

Although the numbers are still low, there has been a steady increase in the numbers of women who are bringing employment tribunal claims against their employers alleging that they have been mistreated at work because of their menopausal symptoms.

It's also possible that menopause will be add to the list of protected characteristics in the Equality Act which will be a game changer. The Women and Equalities Committee have looked into how menopausal women are treated at work and what steps need to be taken to protect them and we are expecting their report to be published in the spring.    

7. Discrimination: reasonable steps defence available to employers

An employer can avoid liability for harassment/discrimination carried out by its own employees if it can show it took all reasonable steps to prevent it from taking place.  

In Alley UK Ltd v Gehlan , the EAT made it clear that employers will only be able rely on the statutory defence if they've provided substantial training on discrimination issues on a regular basis. They may also have to repeat training if it becomes apparent that prior training was ineffective or has been forgotten (perhaps because there's been an increase in the number of complaints or managers have witnessed unacceptable behaviour) . 

You'll only be able to avoid liability if you are able to identify what steps you actually took to prevent discrimination in your workplace, establish that these were 'reasonable' and demonstrate that that there weren't any other reasonable steps you could have taken to prevent it.  

It's not enough to have a policy on diversity and equality. Your staff must understand why you have a policy, who it protects, what staff can and can't do, how to complain if they are being harassed or bullied by other members of staff and how you will deal any complaints. You should also include mechanisms to test that delegates have properly understood what they have learned.

Even if the training you delivered met these objectives, it can become stale over time and you should provide regular refreshers.

8. Indirect discrimination: can employees bring associative discrimination claims?

An employee can bring a direct discrimination or harassment claim if they have been discriminated against because they associate, or are connected, with someone who has a protective characteristic. They don't need to have the protective characteristic themselves. 

A few years ago, the ECJ expanded the concept of associative discrimination to allow employees who are disadvantaged by a workplace provision, criteria or practice to bring indirect discrimination claims even if they didn't have the protected characteristic which caused the disadvantage - provided they were also impacted by it. But, that concept had not been tested in the UK and the Equality Act has not been amended to include associative discrimination in these types of claims. 

In Follows v Nationwide Building Society , an employment tribunal upheld a claim of indirect associative discrimination on the grounds of disability. The claimant, Mrs Follows wasn't disabled but she cared for her mother who was. After a restructure, she wasn't able to comply with a new requirement to work in the office on a full-time basis in order to effectively supervise junior staff. 

The tribunal accepted Mrs Follows argument that carers are less likely to be able to be office-based than non-carers. This put her at a substantial disadvantage because of her association with her mother's disability and Nationwide had not been able to objectively justified its treatment of her.

Employment tribunals do not create precedents that are binding on other tribunals and courts. However, this case suggests that tribunals may be willing to make similar findings - particularly where carer's of disabled people are disproportionally impacted by workplace policies which require them to work full-time and/or in an office. 

It therefore makes sense (from a legal and practical perspective) to help staff manage work around their other commitments by offering flexible or agile working (where appropriate) and exploring other options to help them remain in work. 

9. Redundancy: do you have to give employees the chance to appeal as part of a fair procedure?

Employers making staff redundant have a duty to act reasonably. The ACAS Code of Conduct on Disciplinary and Grievance Procedures requires employers to take certain steps before dismissing an employee - including giving them the right to appeal against their dismissal but this doesn't apply to redundancy dismissals.

In Gwynedd Council v Barratt and Hughes the Court of Appeal had to determine if two employees who were made redundant were unfairly dismissed because their employer did not allow them to appeal against their dismissal. On the facts, it held that their dismissals were unfair because the employer had circumvented the established way of dealing with redundancies (consultation, pooling, selection criteria and looking for suitable alternative employment) by putting staff on notice that their jobs were at risk and requiring them to apply for vacancies. 

This decision doesn't mean that you must always allow employees to appeal against their redundancy as a final stage in the process. If you have properly consulted about the redundancies (both collectively and individually) your staff will have already had the opportunity to challenge their selection and ask to be considered for alternative roles. And, in those circumstances, you may decide not to offer an appeal to avoid going over the same ground. 

But, offering an employee the right to appeal against a redundancy dismissal will strengthen your case that a dismissal for redundancy was fair. And, it's also been held that where the employer does provide an appeal, the usual rule applies that a fair appeal can, if necessary, cure an unfair initial decision. That's why many employers err on the side of caution and offer appeals even where they have properly consulted individuals and given them the opportunity to challenge their selection at an earlier stage in the process.

10. COVID-19: can employees refuse to return to work if they believe that their workplace puts them in serious and imminent danger?

Last year we started to see a steady flow of COVID-19 related claims. These included a number where employees argued that they could not return to work because their workplaces posed a danger to them and/or to vulnerable people they came into contact with. 

Under sections 44 and 100 of the Employment Rights Act 1996, employees are protected from being subjected to a detriment (such as being suspended or having their pay deducted) or being dismissed for exercising their right to leave their workplace. To be protected, the employee must have a 'reasonable belief' that their workplace poses a serious and imminent threat to them, or to others - including members of the public and their own families. 

This is a 'day one' right and employees don't need two years' service to bring an unfair dismissal claim.

The cases suggest that tribunals are taking a fairly robust attitude towards health and safety issues in the context of coronavirus.

In Rodgers v Leeds Laser Cutting Limited , the tribunal held that Mr Rodgers didn't have a reasonable belief that his workplace put him (and his vulnerable children) in serious and imminent danger. He was able to socially distance himself from his colleagues and he'd driven a friend to hospital which punctured a hole in his claim that he hadn't left the house in several weeks because he was worried about catching the virus. 

Similarly, the claimant in   Accattatis v Fortuna Group (London) Limited failed to persuade a tribunal that his concerns about the safety of his workplace rendered his dismissal automatically unfair. The tribunal accepted that there were circumstances of danger which the employee reasonably believed to be serious and imminent. But, the employee not been willing to explore how he could safely continue to work and instead had become fixated on being furloughed (which wasn't appropriate as he was a key worker) or working from home (which wasn't feasible).  

However the tribunal in Gibson v Lothian Leisure accepted that an employee concerns about the safety of his workplace rendered his subsequent dismissal automatically unfair. The employee's father was clinically extremely vulnerable and he refused to return to work during the first lockdown because his employer hadn't taken any steps to make the confined space he worked in with others COVID-secure. The employee had a reasonable belief that his workplace posed a serious and imminent risk to him and to his father.

In Preen v Coolink v Mullins , the tribunal held that the employee didn't reasonably believe that either he or others were in serious and imminent circumstances of danger of contracting COVID-19 at work. But he did go on to win his claim for automatic unfair dismissal because he had raised concerns about continuing to work during the first lockdown which he reasonably believed were harmful or potentially harmful to health and safety. This is an easier hurdle to clear but is only available to employees if their employer doesn't any have any health and safety representatives in post (or a union who performs that function).  

These cases were all brought in 2020 in the early stages of the pandemic. We know much more about the virus than we did in 2020 and have a successful vaccination programme which appears to provide high levels of protection against people becoming seriously ill if they contract COVID-19. Therefore it may be much more difficult for employees to argue that their reasons for wanting to remain at home, or in lower risk jobs is a reasonable response based on the actual danger they face - particularly if they have chosen not to be vaccinated. 

That said, the infection rates are still averaging around 100,000 a day and hospital admissions are at record levels. People who are vulnerable, or who live with people who are, may still try and argue that they are protected from being dismissed because their workplace poses a serious and imminent danger to their health. The strength of those arguments is likely to depend on the nature of their workplace. 

Want to know more?

To help business owners and HR professionals to get up to speed as quickly as possible with changes to employment law  we are hosting a series of free webinars in January and February on various dates. 

Please use these links to sign up:

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Who will be cheering and who will be jeering in this new decade may depend on the outcome of several key cases, pending regulations, and potential state and local law reforms. Below, we provide you with a brief overview of some key issues that may dominate the legal landscape in 2020 and beyond.

Notable Cases With Potentially Far-Reaching Impact

Us supreme court decisions regarding lgbt rights.

This is undoubtedly the most hotly-anticipated court outcome of the coming year because of its significant impact on the civil rights of more than 8 million LGBT individuals in this country. On October 8, 2019, the United States Supreme Court heard oral argument in three cases involving employees who allege they were terminated from their employment because of their LGBT statuses in violation of Title VII of the Civil Rights Act of 1964 (“Title VII”); specifically, the statute’s prohibition on discrimination “because of sex.” Two of the three cases –  Altitude Express v. Zarda  (2d Circuit) and  Bostock v. Clayton County, Georgia  (11th Circuit) – involve employees alleging their respective employers discriminatorily ended their employment because they were gay. In the third case,  R.G. & G.R. Harris Funeral Homes v. EEOC  (6th Circuit), the federal government argued that the employer terminated an employee based on transgender status in violation of Title VII.

Aside from these three cases before the nation’s highest court, the protection of LGBT rights has garnered widespread attention in the private and public sector alike. Examples include  The Business Statement for Transgender Equality , a letter penned by some of the nations’ largest employers that censures any reduction in LGBT rights, and the  Equality Act , a bill passed in the U.S. House of Representatives that seeks to modify civil rights statutes to expressly protect LGBT individuals in the same manner as race, sex, national origin, and religion. Since its passage in the House, the  Equality Act  has sat at the Senate without much activity, however, the pressure to address the bill may build as the clock ticks on the Supreme Court’s forthcoming decision, due from the Court before the close of the 2019-2020 session on June 30, 2020.

US Women’s National Soccer Team Eyes New Goal Of Equal Pay

In March 2018, members of the United States Soccer Women’s National Team (“WNT”) sued the United States Soccer Federation, Inc. (“USSF”) in the Central District of California seeking injunctive relief, back pay, and punitive damages under the federal Equal Pay Act – an amendment to the Fair Labor Standards Act that requires equal pay for men and women for equal work – and Title VII. The lawsuit, a class and collective action, was filed by female WNT players including Alex Morgan, Megan Rapinoe, Carli Lloyd, and Julie Ertz, who have become household names due to their overwhelming success in the international soccer world. Four World Cup championship titles, four Olympic gold medals, and the Number 1 world ranking in 10 of the last 11 years, among other factors, lead the WNT to argue that they unfairly receive lower pay and inferior playing, training, travel, and other conditions of employment when compared to those benefits provided to their Male National Team (“MNT”) colleagues, who have not enjoyed similar playing successes as the women.

This case is unique, not only because of its high-profile parties, but also because Defendant USSF does not appear to deny paying less to WNT players than MNT players, and instead asserts that “market realities” dictate their lower pay. The WNT is fighting this assertion with data they argue indicates the WNT not only is more successful on the field, but generates significantly more revenue for USSF than the MNT. Many compare this case to Billie Jean King’s efforts in the 1970s to equalize pay for women in professional tennis, and see it as another opportunity to increase awareness of unequal pay for women in sports and other industries. The case is currently set for trial in May 2020, just three months before the summer Olympics, where the WNT is expected, once again, to be a strong contender for the gold medal.

Online Ad Practices Alleged to Profile Younger Applicants

The Communications Workers of America (“CWA”) filed  Communications Workers of America v. T-Mobile US, et al.  in May 2018, as a proposed class action lawsuit alleging that many major employers including Amazon, T-Mobile, and others yet to be named have used a paid advertisement posting platform on Facebook to post job opportunities and exclude older workers from applying. The suit alleges that Facebook’s platform allows posters to identify parameters for their employment ads to reach only targeted audiences, and thereby exclude potential audiences in a certain age brackets. CWA asserts in its lawsuit that this practice by employers violates the Age Discrimination in Employment Act, which prohibits discrimination on the basis of an employee’s or prospective employee’s age. The case is still in its early stages and has largely focused on whether CWA is a proper plaintiff in the lawsuit, but it is expected to gain attention as the case progresses. Similar lawsuits have been filed in other jurisdictions, and to add fuel to the fire, the Equal Employment Opportunity Commission (“EEOC”) issued a decision in September 2019 that the agency found “reasonable cause” to determine that seven employers, including Capital One and Edward Jones, had discriminated against females and older workers by posting job listings on Facebook using audience parameters including age and gender. In response, Facebook has reportedly modified its advertisement posting platform so that it prevents self-identified employers from posting job ads using age or gender-based audience-selection criteria. Skeptics may argue this is not enough because employers who do not self-identify their ad as a job posting may circumvent the restrictions and continue to exclude ad viewers based on legally-protected characteristics. Stay tuned as this topic develops both in and outside of court.

Facebook Challenges Notice of Collective Action to Employees Who Waived Class Claims

Facebook is also taking a front seat in further defining the contours of the impact of  Epic Systems v. Lewis  (which we blogged about  here ), the United States Supreme Court decision that authorized the use of mandatory arbitration agreements as a condition of employment.

In  Bigger v. Facebook , the United States District Court for the Northern District of Illinois certified a collective action under the Fair Labor Standards Act that includes allegations that Facebook failed to properly pay overtime to certain groups of employees. As part of the Court’s order certifying the collective action, the District Court Judge authorized plaintiffs’ counsel to send an approved notice of collective action to all potential class plaintiffs, including those who signed arbitration agreements that waived their right to bring or participate in class or collective litigation.

Facebook has appealed this decision, arguing that the class waivers render these employees ineligible to participate in the District Court collective action litigation, therefore the notices about the class proceeding should not be sent to them. Facebook asserts that the Court’s order improperly treats the arbitration agreements as presumptively invalid and will result in an unnecessary expansion of the litigation and “amplify settlement pressure.” Although the case is still in its earliest stages, the United States Court of Appeals for the Seventh Circuit agreed to hear Facebook’s interlocutory appeal (an appeal that occurs before and often results in a temporary stay on the completion of the trial court litigation).

Notably, on February 19, 2019, while the  Bigger  Court was considering plaintiffs’ class certification but before it issued its order allowing the notices to be sent to employees who signed class waivers, the United States Court of Appeals for the Fifth Circuit considered the same issue and ruled, contrary to the Illinois District Court, that plaintiffs should not be authorized to provide notice to putative class members who are not able to participate in the class proceedings because they have signed arbitration agreements containing class waivers. A different outcome in the Seventh Circuit would create a split and possibly tee up the issue for further consideration by the Supreme Court.

Federal Agency Regulations To Address Joint Employer Classification

As we reported to you  previously , three major federal agencies that enforce employment laws – the National Labor Relations Board (“NLRB”), Department of Labor (“DOL”), and the EEOC – all promised to revise their standards for determining when multiple, otherwise unrelated entities can be considered “joint employers” of an employee or group of employees. On January 12, 2020, the DOL issued its final rule regarding joint employment and the Fair Labor Standards Act, which is expected to take effect in mid-March 2020 and finalizes the proposed rule unveiled last year. The DOL’s rule replaces a much laxer test that said employers jointly employ workers whose work for one “is not completely disassociated” from their work for the other. Under the newly announced rule, the DOL will apply a four-factor balancing test to determine whether two or more affiliated businesses jointly employ workers in situations where workers perform tasks for one employer that simultaneously benefit another business or individual. These factors include (1) whether a business can hire or fire employees, (2) whether it controls their schedules or conditions of employment to a substantial degree, (3) whether it determines workers’ pay rates and the methods by which they are paid, and (4) whether a business maintains workers’ employment records.

The NLRB and EEOC’s joint employment guidance is also expected this year. The NLRB has issued proposed rules, on which it has accepted public comment, and final rules are believed to be imminent. The EEOC indicated it planned to issue a notice of proposed rulemaking at the end of 2019, but the end of the year came and went without this notice. Employers are hopeful that the agencies will issue consistent rules and provide useful and practical guidance for employers as they consider the pros and cons of entering into various contracting and leasing relationships.

State and Local Law Developments

California, as you know, is often a leader in employee rights’ reform, and last year was no exception. Enacted last year, California Assembly Bill 5 (“AB5”) became effective January 1, 2020 (except for a limited exception for truckers) and codifies the California Supreme Court’s decision in  Dynamex Operations West, Inc. v. Superior Court , which we posted about  here . AB5 adopts the “ABC test” utilized in  Dynamex  to determine whether a worker is an employee or independent contractor. The test is considered restrictive and would result in more workers being classified as employees. Other states, including New York, New Jersey, and Illinois, have also begun working on similar independent contractor standards modeled after AB5, and are expected to submit those for passage into law perhaps this year. For a more in-depth review of AB5 and its history, read our post  here .

Another development arising from the Golden State, arbitration law reform Assembly Bill 51 enacted in response to the  Epic Systems  decision (discussed further above), seeks to criminalize arbitration agreements required as a condition of employment, even when employees are allowed to opt out. The law has been challenged on constitutional grounds and was stayed by the United States District Court for the Eastern District of California, pending further hearings on the matter. Other states may consider similar laws and use the pending litigation as a lesson learned in drafting their own versions of the law so as to avoid the potential legal pitfalls of the pioneer laws in this area.

Finally, state law overtime requirements that exceed the federal law standards, paid and legally-protected family and sick leave, and predictable work scheduling are all areas in which there is a growing trend for states and local governments to enact worker-protective laws. Expect additional legislation on both a state and local level in these areas as well.

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Most Significant Cases In Employment Law - 2022

• February 21, 2023
• Daria (Dasha) Peregoudova, Ljubica Durlovska, and Zachary Sippel

This article explores the most significant employment law cases in 2022, and their related implications.

BAD FAITH DAMAGES

Awards of bad faith damages (as a subset of the broader category of “moral” damages) in wrongful termination litigation in Ontario have been rare. Such awards only arise in exceptional cases where the conduct of the employer is particularly egregious and the employee can show they have suffered mental distress as a result of such conduct. However, there has recently been an uptick in the awards of such damages, as illustrated by two cases of note in 2022.

Pohl v Hudson’s Bay Company , 2022 ONSC 5230

Mr. Pohl, a 50-year-old sales manager with 28 years of tenure at Hudson’s Bay was offered a demotion to a “sales associate lead” with less hours, no guarantee of hours, less pay and a contract that would allow the company to terminate his employment by providing him with only minimum statutory entitlements, all on the condition that he “voluntarily resign” from his managerial position. Mr. Pohl refused the offer and was subsequently walked off the premises. He successfully sued Hudson’s Bay for wrongful dismissal, and was awarded $45,000 in moral damages and $10,000 in punitive damages.

The Court’s reasoning for awarding moral damages included:

• The employer’s highly insensitive decision to walk Mr. Pohl out the door on termination and needlessly embarrass him;
• The “misleading” way in which the employer attempted to lock Mr. Pohl into a new, less beneficial, contract;
• Failure to pay Mr. Pohl’s outstanding wages in a lump sum post termination, despite repeated demands that they do so; and
• Failure to issue a timely and correct Record of Employment, thereby increasing Mr. Pohl’s “sense of exploitation, humiliation, and depression”.

The Court found that the employer’s conduct was effectively an attempt to take advantage of a loyal, long-term employee during a vulnerable moment, which was a breach of the employer’s duty of good faith and fair dealing which warranted an award of moral damages.

Rutledge v Markhaven Inc., 2022 ONSC 3183

Ms. Rutledge, a 43-year-old Executive Director at a long term health facility with 21 years of service, was awarded wrongful dismissal damages of 22 months’ pay in lieu of reasonable notice, as well as $50,000 for bad faith and moral damages resulting from the egregious manner in which Markhaven conducted an investigation into an alleged workplace relationship between Ms. Rutledge and another employee, and litigation conduct of Markhaven’s defence counsel.

Specifically, in awarding bad faith and moral damages, the Court found that:

• Ms. Rutledge was informed that the investigation would be conducted by an independent third party, but it was actually conducted by a business associated with Markhaven’s defence counsel;
• The investigation was undertaken surreptitiously before Ms. Rutledge was informed that the investigation would be taking place, and the investigator secured information from her without her prior knowledge;
• Part of the interviews connected with the investigation took place at a local Tim Hortons where some of the 150 employees of Markhaven frequented, thereby failing to conduct the investigation in a confidential manner; and
• During ensuing litigation, Ms. Rutledge walked into an examination for discovery where she was confronted with photographs of her home, and comments by Markhaven’s lawyer regarding a pending motion for “security for costs”, which was never brought.

NOTICE PERIODS

The calculation of common law reasonable notice of termination is often referred to as an “art form” and not a “science”. This is particularly true when there are a myriad of factors that must be taken into consideration in making a determination as to the appropriate period of reasonable notice, and weight being given disproportionately to certain factors in accordance with the circumstances in each case, as illustrated in the following cases.

Chin v Beauty Express Canada Inc. , 2022 ONSC 6178

Ms. Chin worked at a beauty counter at The Bay for 14 years while it was owned by Premier Salons Ltd. (“Premier”). Premier went bankrupt and Beauty Express Canada Inc. (“Beauty Express”) took over operations. Ms. Chin continued working for Beauty Express under the same management and at the same location for another six years until her eventual termination at the end of 2019, at the age of 69.

Ms. Chin had signed an employment agreement while with Beauty Express, but the agreement was found to be invalid for want of consideration. As such, Ms. Chin was entitled to common law reasonable notice of termination.

It was agreed by all parties that the bankruptcy constituted a constructive dismissal and that Ms. Chin was technically only employed by Beauty Express for six years. Nonetheless, Ms. Chin was awarded 10 months of pay in lieu of notice on the basis that while the experience with the prior employer was important because it allowed her to bring it to Beauty Express, it was not experience which required extensive and specific training. In other words, if Ms. Chin had brought technical skills and experience into the subsequent role beyond what she was able to demonstrate at trial, she would have been awarded a greater reasonable notice period which would have taken into account her entire 14 years of service. 

Currie v. Nylene Canada Inc. , 2022 ONCA 209

Ms. Currie was terminated from Nylene after 40 years of service, and at 58 years old, and subsequently sued for wrongful dismissal. The Court of Appeal upheld an earlier decision which awarded an unusually high reasonable notice period of 26 months (whereas 24 months tends to be the commonly accepted ceiling on such awards). The Court noted the following factors as significant to its decision:

• Ms. Currie’s advanced age;
• Ms. Currie worked at Nylene for almost her entire working career, starting from high school;
• Ms. Currie started at Nylene at age 18 as a “twisting operator”, and ultimately rose to become the “Chief Operator”;
• Ms. Currie had a very specialized skill set in the manufacturing environment, making it very difficult for her to find alternative suitable employment with skills which were not easily transferrable; and
• Ms. Currie had very limited computer skills which she tried to upgrade in an effort to mitigate her damages, but the trial judge was not convinced that she would succeed.

Ultimately, Ms. Currie’s termination of employment from Nylene was regarded as the equivalent of “a forced retirement”, thereby warranting a higher-than-normal award of reasonable notice with which the Court of Appeal agreed.

UNENFORCEABLE TERMINATION PROVISIONS

By now, the general principles in Waksdale v. Seagon North America Inc. , 2020 ONCA 391 are well known. Specifically, if any portion of a termination provision in an employment contract denies (or is ambiguous regarding) the employee benefits that they would be entitled to under the Ontario Employment Standards Act, 2000 (the “ESA”), then the entire termination provision is rendered void and the employee’s rights on termination default to those afforded by the common law.

In 2022, two cases expanded the Waksdale principles to non-termination provisions which also had the potential effect of unlawfully contracting out of the ESA, rendering the termination portions of the contract invalid.

In the Rahman decision below, the Waksdale principles were also tested against the argument that when employees are sophisticated, or receive legal advice prior to signing an employment agreement, then termination provisions that may technically contract out of the ESA should not be struck down, given the employee’s knowledge and understanding of the provisions.

Gracias v. Dr. David Walt Dentistry , 2022 ONSC 2967

For six months, Ms. Gracias worked as a dental hygienist for Dr. Walt under a written employment agreement. Upon termination, Dr. Walt provided Ms. Gracias with one week of pay in lieu of notice pursuant to the ESA. Ms. Gracias sued Dr. Walt for wrongful termination, seeking seven months’ pay in lieu of notice. Dr. Walt disagreed based on Ms. Gracias’ short tenure and the fact that she received approximately $16,000 worth of Canada Emergency Response Benefit (“CERB”) funding following her termination. Dr. Walt also argued that Ms. Gracias falsified mitigation documentation during litigation.

The Court held that Ms. Gracias’ employment agreement contained provisions which, when read in context and together with the termination provisions, contravened or attempted to contract out of the ESA. The specific sections which were at issue were the “conflict of interest” and “confidential information” clauses, both of which contained language effectively stating that any breach of those provisions would result in termination “with cause” and no corresponding payments. In his decision, Justice Perell found that these provisions were not compliant with the ESA as they attempted to deny the employee her ESA entitlements for reasons that may not, at law, amount to “wilful misconduct”, which is the higher standard required to be met under the ESA to justify termination without any amounts owing.  

Ms. Gracias was ultimately awarded three months of reasonable notice, without deduction for CERB. Even though Dr. Walt led considerable evidence that Ms. Gracias falsified mitigation documentation, these claims of fraud were found not to have been substantiated.

Henderson v. Slavkin et al. , 2022 ONSC 2964

Ms. Henderson worked as a dental receptionist for Drs. Slavkin and Kellner for 20 years pursuant to a written employment agreement. Her employment was terminated in March 2020. Following termination, Ms. Henderson did not start looking for other employment for 12 months, finally securing alternate employment approximately 18 months after her termination. Ms. Henderson received considerable CERB benefits following termination.

Ms. Henderson’s contract of employment included a “termination without cause” section, as well as “conflict of interest” and “confidential information” clauses, both of which stated that a breach of said clauses would result in Ms. Henderson’s termination for just cause. Justice Brown found that while the termination without cause section was valid, the “conflict of interest” and “confidential information” clauses were so “broad, unspecific and ambiguous” that Ms. Henderson would not be able to conclude that the conduct prohibited by the clauses indeed rose to the standard of “wilful misconduct” or “wilful neglect of duty” as required under the ESA. Therefore, the termination provision too became invalid, and Ms. Henderson was entitled to common law reasonable notice stemming from her termination.

Justice Brown awarded Ms. Henderson 15 months’ pay in lieu of reasonable notice, with three months deducted for Ms. Henderson’s failure to seek re-employment for 12 months after termination. Following the decision in Gracias , Justice Brown refused to deduct CERB payments from Ms. Henderson’s damages.

Rahman v. Cannon Design Architecture Inc ., 2022 ONCA 451

Ms. Rahman was employed as a senior architect at Cannon for over four years. When terminated without cause, she was provided with four weeks of base salary. Ms. Rahman sued Cannon for wrongful dismissal on the basis that the termination provisions in her contact of employment were contrary to the ESA.

In a rare “win” for employers, the motion judge found that the termination provisions in Ms. Rahman’s contract were valid and enforceable because she was a sophisticated employee who had had access to independent legal advice at the time of signing the contract. Furthermore, the motion judge took into consideration the parties’ subjective intentions to be bound by the ESA, despite the plain wording of the provisions being contrary to the ESA.

Disagreeing with the motion judge, the Court of Appeal overturned the decision, finding that, “By allowing subjective considerations to distort and override the wording of those provisions, the motion judge committed an extricable error of law…”. As such, Ms. Rahman’s agreement was held to be unenforceable, and the matter was remitted back to the Superior Court for quantification of Ms. Rahman’s damages.  

INFECTIOUS DISEASE EMERGENCY LEAVE

During the COVID-19 pandemic, temporary measures were introduced by O. Reg. 228/20: Infectious Disease Emergency Leave (“IDEL”) under the ESA which stated that a non-unionized employee whose employer has temporarily reduced or eliminated their hours of work for reasons related to COVID-19, were deemed to be on a job-protected infectious emergency leave and not laid off or “constructively dismissed” under the ESA.

Several subsequent cases wrestled with whether the IDEL regulation precluded an employee who was temporarily laid off in the absence of a contractual term allowing such lay off to allege constructive dismissal under the common law.

In 2021, several cases, such as Coutinho v. Ocular Health Centre Ltd. , 2021 ONSC 3076 , held that an employer could not take advantage of the IDEL provisions to temporarily lay off an employee if the employee has not agreed to a contractual term permitting the layoff, as the ESA and its regulations could not override the common law principle of constructive dismissal. However, in Taylor v. Hanley Hospitality Inc. , 2021 ONSC 3135 , Justice Ferguson refused to follow Coutinho , finding the COVID-19 circumstances unusual enough to permit the IDEL regulation in precluding a common law claim of constructive dismissal.

Ms. Taylor appealed, and, being the last outstanding decision on point, the employment bar waited with bated breath for the outcome. Ultimately, the Court of Appeal ( 2022 ONCA 376 ) held that Justice Ferguson had made an error of law. However, the error was not the finding itself, but Her Honour’s treatment of the decision which had been made under rule 21.01(1)(a) for a determination of a question of law. Consequently, the Court dismissed the motion and remitted the action for determination before another judge of the Superior Court.

As the IDEL provisions in questions ceased to be in effect in mid-2022, and given the remaining case law was aligned in its treatment of IDEL and its relationship to common law constructive dismissal, it is unlikely that the Taylor decision will be re-decided. This is also true given that during the pandemic, most employees were better off accepting available government support and waiting for their job to become available rather than alleging constructive dismissal, quitting, and searching for work in an extremely challenging market. As such, despite the importance of the legal issue raised in the decisions, the quantum of such decisions was far less than initially expected. 

BANKRUPTCY AND NOTICE PERIODS

Under the ESA, employees are usually owed outstanding compensation and termination pay (as well as possible severance pay) in the event of termination by their employer. However, when an employer is in financial distress and is seeking protection under either the Bankruptcy Act or the Companies’ Creditors Arrangement Act (“CCAA”), the employee becomes an unsecured creditor, making it difficult to obtain their full ESA entitlements. Further, companies on the verge of bankruptcy are often purchased at a discount, and the control of the company is transitioned to a new owner along with the company’s assets, including its employees. This bankruptcy-related change of control often triggers considerations into whether the employee’s prior service flows through to the new owner. The case below from the Ontario Court of Appeal provides some clarity on how the Court will consider an employee’s length of service and their termination entitlements in the event a company undergoes bankruptcy under the CCAA.

Antchipalovskaia v. Guestlogix Inc. , 2022 ONCA 454

Ms. Antchipalovskaia commenced her employment with Guestlogix in 2011 under the terms of a written employment agreement. In 2016, Guestlogix sought and obtained protection under the Companies’ Creditors Arrangement Act . Guestlogix was subsequently purchased by a third party, and, as a result, Ms. Antchipalovskaia was terminated and immediately rehired under the same conditions of employment. Ms. Antchipalovskaia submitted a “Proof of Claim” to the Superior Court in order to receive her termination and severance pay from the proceeds of the sale as an unsecured creditor, and was successful, receiving roughly 72% of her total claim amount. She continued to work for Guestlogix until she was terminated without cause in 2019. Ms. Antchipalovskaia sued Guestlogix for wrongful dismissal and sought damages for reasonable notice at common law based on her entire service with Guestlogix from 2011 to 2019.

Ms. Antchipalovskaia brought a motion for summary judgement, and the motion judge agreed that her full service with Guestlogix ought to be considered continuous despite the sale. Accordingly, she was awarded 12 months’ pay in lieu of notice, less the amounts paid in 2016.

Guestlogix appealed the decision of the motion judge. The Court of Appeal clearly distinguished between the ESA and common law approaches to continuous service following the sale of business. The Court held that at common law, following the sale of a business, a contract for personal service cannot be assigned to a new employer without the consent of the parties. As such, employees under the common law are deemed to have been constructively dismissed as soon as the business is sold, thus creating a break in the employee’s service with the employer.

However, the Court determined that while service may not be seen as continuous under the common law, years of service with the same employer could still be a relevant Bardal factor in determining common law reasonable notice for the employee since the employer benefited from the service of an employee who could perform their job at a high level for a number of years. Ultimately, based on the employee’s years of service, age and position, the Court found a seven month notice period to be appropriate.

CANADA LABOUR CODE AND UNJUST DISMISSAL DAMAGES

For a federally regulated employee to be terminated with just cause under the Canada Labour Code , the employer must demonstrate a good faith attempt to progressively discipline the employee, similar to the level of protection typically bargained for by unionized employees. Where an arbitrator finds the employee to have been unjustly dismissed, they may consider whether reinstatement of an employee is an appropriate option, scrutinizing whether the employee has learned from their mistakes and will be able to return to the workplace successfully. Where reinstatement is not appropriate, entitlement to compensation is the only remaining remedy. In the case below, the Federal Court of Appeal weighed in on the proper approach to calculating an employee’s entitlements to compensation where reinstatement is not deemed appropriate.

Hussey v. Bell Mobility Inc., 2022 FCA 95

Ms. Hussey was terminated from her employment and subsequently made an unjust dismissal complaint against her former employer under the Canada Labour Code . The matter was heard before an arbitrator, who agreed that Ms. Hussey had been unjustly dismissed, but refused to reinstate her as he did not believe that she was remorseful or would change the behaviour that led to her dismissal if reinstated. Instead, the arbitrator awarded eight months’ pay in lieu of reinstatement based on calculations derived from the principles of common law reasonable notice, with an additional amount in recognition of Ms. Hussey’s loss of just cause protection under the Canada Labour Code .

Ms. Hussey sought judicial review of the decision, alleging a breach of procedural fairness and arguing that the compensation decision was incorrect in its importing the principle of common law reasonable notice. She argued that instead, the “fixed term” approach should have been adopted, which considers expected earnings until the employee’s retirement and then discounts the amount based on contingencies. The application for judicial review was denied, and Ms. Hussey appealed to the Federal Court of Appeal.

On appeal, the Court agreed with the findings of the arbitrator that utilizing common law reasonable notice as a foundation for calculating pay in lieu of reinstatement was a reasonable approach, and that there has been no consensus among arbitrators or adjudicators to the contrary or to deem the “fixed term” approach as the standard. As a result, the Court upheld the award of eight months’ notice.  The Court also disagreed that Ms. Hussey had been denied procedural fairness.

JUST CAUSE TERMINATIONS

The concept of “just cause” in employment agreements has faced significant scrutiny following the Waksdale decision, cited above. The Ontario Court of Appeal has recently weighed in on the different thresholds for just cause terminations under the ESA and the common law, and how they relate to an employee’s entitlements upon termination for such reasons. Of note is also a recent arbitration decision relating to just cause termination in the face of a breach of COVID-19 policies.

Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 310

Mr. Render was terminated for cause after he slapped the buttocks of a female co-worker in front of a number of colleagues and later made jokes about the situation. Mr. Render sued for wrongful dismissal, but was unsuccessful at trial where it was found that he was not truly apologetic for his actions, nor appreciated the seriousness of his misconduct. Further, the trial judge held that while ThyssenKrupp had a workplace culture that seemingly condoned horseplay and inappropriate comments, Mr. Render’s misconduct was of such an egregious nature that termination for cause was justified.

Mr. Render appealed the trial judge’s decision, arguing that the workplace culture of ThyssenKrupp should have been considered a mitigating factor that reduced the penalty for his misconduct to something less than termination. The Court of Appeal dismissed Mr. Render’s argument that an inappropriate workplace culture was a justifiable mitigating circumstance, and took a hard stance against condoning such toxic “locker-room” type workplace cultures.

However, the Court did agree that Mr. Render’s actions were not pre-meditated, but rather in the heat of the moment, and therefore held that Mr. Render’s conduct did not rise to the ESA standard of “wilful misconduct.” As such, the Court held that Mr. Render was entitled to receive his statutory termination entitlements. In contrast, the Court confirmed that Mr. Render’s conduct did meet the threshold for just cause under the common law, and denied his entitlements to common law reasonable notice accordingly.

RESTRICTIVE COVENANTS

Given the recent amendments to the ESA regarding the prohibition of non-competition clauses under the Working for Workers Act, 2021 (subject to only a few concrete exceptions), employers and employees alike have been curious to see how this development will be interpreted and applied by the courts. The cases below address some of the common questions raised by the passing of the legislation, including as to whether the amendment has retroactive applicability.

M & P Drug Mart Inc. v. Norton, 2022 ONCA 398

Mr. Norton commenced his employment as a pharmacist with M & P Drug Mart Inc. (M&P) in 2014 under the terms of a written employment agreement that was negotiated with the assistance of independent legal counsel. The employment agreement contained a non-competition clause which precluded Mr. Norton from being “engaged in, concerned with, or interested in, directly or indirectly” any business that was the same as M&P within a fifteen (15) kilometer radius for one year following the termination of his employment.

In 2020, Mr. Norton resigned from M&P and immediately began working as a pharmacist for a pharmacy located only three kilometers from M&P. M&P brought an application attempting to enforce the non-competition clause in Mr. Norton’s employment agreement, but the application judge found the clause to be overbroad and ambiguous, which rendered it unenforceable under the applicable common law principles regarding enforceability of non-competition clauses.  

M&P appealed the decision, arguing that the language of the non-compete was clear, and that Mr. Norton had the benefit of legal counsel when he signed his employment agreement and should therefore be bound by its terms. The Court of Appeal agreed with the application judge that the non-competition clause was ambiguous, as it did not expressly prohibit Mr. Norton from working as a pharmacist in another pharmacy.

Importantly, the Court of Appeal also clarified that the recent amendments to the enforceability of non-competition clauses through the Working for Workers Act, 2021 were not applicable as the employment agreement in question was entered into before the enactment of the legislation.

Parekh et al v. Schecter et al , 2022 ONSC 302

The plaintiffs entered into an agreement for the purchase of a dental practice. The purchase agreement included an express condition that one of the existing dental associates, Dr. Schecter, would sign a non-competition and non-solicitation agreement. The non-compete prohibited Dr. Schecter from practicing dentistry within five kilometers of the plaintiffs’ dental practice for two years after he left or was terminated from the practice. Shortly after the purchase of the dental practice was finalized, Dr. Schecter resigned and began practicing dentistry at another dental office within five kilometers from the plaintiffs’ practice.

The plaintiffs attempted to enforce the terms of the non-compete through an interlocutory injunction. Dr. Schecter argued that he was not bound by the terms of the non-compete given the amendments made under the Working for Workers Act, 2021 . The Superior Court agreed with the plaintiffs, and held that it was the intention of parliament for the amendments to the enforceability of non-competition clauses to apply to all agreements entered into after October 25, 2021. According to the Court, the amendment has no retroactive power to affect agreements that were entered into before the implementation date. Applying the three-prong test for injunctions, the Court held that Dr. Schecter was bound by the non-competition clause, and therefore prohibited from practicing dentistry within a five kilometer radius of the plaintiffs’ practice until October 27, 2023.

REASONABLE EXPECTATION OF PRIVACY

In recent years, Ontario courts have recognized new torts of “intrusion upon seclusion” and “public disclosure of private facts”. While these developments signalled a move towards a greater preservation of privacy rights in Ontario, it was yet to be seen how these rights may apply to employees in the workplace. In the case below, the Court of Appeal has provided a helpful analysis of an employee’s reasonable expectations of privacy in the public sector. It is yet to be seen whether the principles of this case will have an impact on private sector employers, but, given the recent trends in privacy law in favour of protecting employee privacy rights, they are likely to be persuasive.  

Elementary Teachers Federation of Ontario v. York Region District School Board, 2022 ONCA 476

Two elementary school teachers were concerned that another teacher was receiving preferential treatment from their principal, and contacted their union for support. The union suggested that the teachers keep a log of each instance of preferential treatment they witnessed in the event of a future grievance. The teachers created and shared a log between one another, and stored it on their personal Google Drive accounts. The log was then accessed throughout the day on their school board (“Board”) provided laptops. The principal of the school learned of the existence of the log, and sought to find it. When one of the teachers was away from her laptop, the principal accessed the computer and discovered the log. He proceeded to take pictures of every entry, and shared it with the Board. The contents of the log were then used to discipline both participating teachers, which resulted in reprimands on file for three years that the teachers had failed to conduct themselves in accordance with the Ontario College of Teachers’ Standards of Practice. The teachers grieved the discipline, and alleged a breach of their privacy rights.

The Arbitrator and the Divisional Court both decided that the Board’s right to manage the workplace outweighed the teachers' individual privacy rights, and upheld the discipline.

The Court of Appeal confirmed that the Canadian Charter of Rights and Freedoms (the “ Charter ”) applied to public institutions such as school boards, and therefore was tasked with deciding whether the Board’s actions amounted to an unreasonable search and seizure in breach of section 8 of the Charter .

The Court began by determining whether and to what degree the teachers may have had a reasonable expectation of privacy in the workplace. It is important to note that from the outset of the Court’s analysis, it held that the fact the teachers were using a Board-issued laptop did not impact the Court’s decision on whether there was an expectation of privacy. Instead, the Court focused on the “totality of the circumstances” which included considering the personal nature of the material seized, the teachers’ personal interest in keeping the information private, whether the teachers had a subjective expectation of privacy, and whether it was objectively reasonable to expect that the log would be kept private.

The Court ultimately held that the teachers had a sincerely held belief that the information stored in the log was deserving of protection, and took steps they deemed appropriate to protect the information such as storing information on a “cloud” which is password protected. The Court also recognized that the teachers were directed to collect the information at the direction of their union representative, and that the use of the information by the Principal clearly lead to their discipline. The appeal was therefore allowed, the order of the Arbitrator was quashed, and the Divisional Court’s decision overturned. Given the timing of the appeal, the reprimands had already been removed from the teachers’ files, but, the outcome confirming a breach of section 8 of the Charter was highly significant. 

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Employment Law in Context (4th edn)  

Employment Law in Context combines extracts from leading cases, articles, and books with commentary to provide a full critical understanding of employment law. As well as providing a grounding in individual labour law, this title offers detailed analysis of the social, economic, political, and historical context in which employment law operates, drawing attention to key and current areas of debate. An innovative running case study contextualizes employment law and demonstrates its practical applications by following the life-cycle of a company from incorporation, through expansion, to liquidation. Reflection points and further reading suggestions are included. The volume is divided into eight main Parts. The first Part provides an introduction to employment law. The next Part looks at the constitution of employment and personal work contracts. This is followed by Part III, which examines the content of the personal employment contract and the obligations imposed by the common law on employers and employees. The fourth Part is about statutory employment rights. The fifth Part covers equality law. Part VI looks at the common law and statutory regulation of dismissals. The Part that follows considers business reorganizations, consultation, and insolvency. Finally, Part VIII describes collective labour law.

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• Dedication  
• ■ Preface to Fourth Edition  
• ■ Guide to the Online Resources  
• ■ Table of cases  
• ■ Table of Primary Legislation  
• ■ Table of Secondary Legislation and Codes  
• ■ Table of European Legislation  
• ■ Table of International Legislation  
• ■ Acknowledgements  
• 1. Introduction to Employment Law  
• 2. Sources and Institutions of Employment Law  
• 3. The Employment Relationship and the Contract of Employment  
• 4. Alternative Personal Work Contracts and Relations  
• 5. The Nature and Content of the Personal Employment Contract  
• 6. The Implied Terms of the Personal Employment Contract  
• 7. The Variation and Suspension of the Personal Employment Contract  
• 8. Pay and Working Time  
• 9. Work–Life Balance  
• 10. Introduction to Employment Equality Law  
• 11. The Protected Characteristics  
• 12. Disability Discrimination  
• 13. Part-Time and Fixed-Term Work  
• 14. Equal Pay Law  
• 15. Wrongful Dismissal  
• 16. Introduction to Unfair Dismissal and Substantive Fairness  
• 17. Procedural Fairness and Remedies  
• 18. Redundancy  
• 19. Transfers of Undertakings  
• 20. Collective Redundancies  
• Online Resources Chapter A: Information, Consultation, Participation, and Insolvency  
• Online Resources Chapter B: Introduction to Trade Unions, Status, Listing, and Independence, and Members’ Rights and Protection  
• Online Resources Chapter C: Recognition of Trade Unions, Collective Bargaining, and Industrial Democracy  
• Online Resources Chapter D: Industrial Action and Statutory Immunities  
• ■ Glossary  

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Key Unfair Dismissal Cases in Employment Law

Unfair dismissal has been one of the most common claims to be brought to employment tribunals, with a 23% rise in the number of unfair dismissal claims receiving rewards from 2018 to 2019. 

Relevant provisions can be found in the Employment Rights Act 1996, in which s98(2) lists the reasons an employee can be dismissed. S98(4) then clarifies that fairness of a dismissal depends on how reasonably the employer acted in dismissing an employee. 

How we view employment rights today has drastically changed with the evolution of the gig economy and a growing emphasis on the issue of discrimination.  Nonetheless, the protection of employees from mistreatment remains paramount. Thanks to the decision in Polkey v A E Dayton Services Ltd [1988], employers must continue to ensure their procedure for dismissing employees is fair.

In this blog, we take a look at some key cases in recent years that add to existing law.

Unfair Dismissal Case 1: Is Being Dismissed for not Disclosing Your Personal Relationships Unfair?

In Reilly v Sandwell Metropolitan Borough Council [2016], the Supreme Court was faced with the issue of whether the headteacher of a primary school could be fired for not disclosing her close yet platonic relationship with a convicted sex offender. 

The Supreme Court dismissed Mrs Reilly’s appeal that her summary dismissal was unfair. The appellant had a duty to inform the school’s governing body of her relationship with a convicted sex offender. 

This came down to the fact that the sex offender was a potential risk to school children, given the unlimited access to pupils’ personal information that a headteacher can offer. One of the claimant’s fundamental duties was to assist the governors in safeguarding pupils; she had failed to do so by not disclosing details of her relationship. 

On that note, both Lady Hale and Lord Wilson emphasised that the Burchell rules from British Home Stores v Burchell for investigating misconduct are only relevant to proving the employer has a reason to dismiss. The rules set out in Burchell are ‘not well fitted’ to assessing fairness of a dismissal under the second part of the test, where the focus is on the reasonableness of the employer’s actions. 

The findings of this case strongly emphasise that an employee’s actions or choices, even outside of work, can be considered misconduct or even gross misconduct. 

Unfair Dismissal Case 2: Does the ACAS Code of Discipline and Grievance Apply to SOSR D ismissals? 

The ACAS Code of Practice on Disciplinary and Grievance Procedure applies to dismissals based on the employee’s misconduct or poor performance. However, whether it applies to dismissals for ‘some other substantial reason,’ has never been expressly stated. 

Admittedly, the case of Phoenix House Ltd v Stockman & Anormay simply adds to the confusion. Before diving into the facts of the case, it is worth mentioning that the purpose of the ACAS code is to provide guidance for employers on what a fair disciplinary or grievance procedure should look like. 

The basic facts of the case are as follows: 

• The Phoenix House case concerns an employee (the claimant) who was dismissed for an irretrievable breakdown in the working relationship with the employer.
• The claimant made a grievance about the restructuring and re-engagement process in her department. She also made a grievance regarding mistreatment at work.
• This was all in the midst of disciplinary proceedings regarding the claimant “barging” into the finance director’s meeting and failing to leave when asked to. 
• The employer made the decision to dismiss the claimant due to the damage done to the working relationship.  
• The claimant argued that her dismissal was unfair, and the employment tribunal had agreed. One of the reasons behind the tribunal’s finding was that the disciplinary procedure was not fair and did not comply with the ACAS code. 

The employer’s appeal against the decision was dismissed by the Employment Appeal Tribunal However, the Employment Appeal Tribunal found this application of the ACAS Code problematic because it could also give rise to an uplift in the claimant’s compensation by 25% for the employer’s non-compliance with the Code. It was noted that to allow for an uplift in compensation would be to add a punitive element to a compensatory award, at the employer’s disadvantage. 

On the other hand, Judge Mitting emphasised that some elements of the ACAS Code will apply to SOSR dismissals. Out of ‘common-sense fairness,’ employees facing dismissal based on a breakdown in working relationships, should have a chance to prove they can continue to work harmoniously. This element did apply to the claimant’s position, who was absent for health reasons following her disciplinary meeting and was therefore not given a chance to prove working relationships were not irretrievably damaged. 

To sum up, only elements of the ACAS Code are applied where appropriate. An increase in compensation may be difficult to apply to SOSR dismissals, as the ACAS Code was not drafted with the intent to punish employers financially, but only to protect employees. 

Unfair Dismissal Case 3: A Discriminatory Dismissal? 

Discrimination of any form in the workplace is a cause for concern, but how can discrimination in dismissal or disciplinary procedures be combatted?

In the case of Mr R Hastings v Kings College Hospital NHS Foundation Trust, the employment tribunal awarded an IT manager £1m following an unfair and discriminatory dismissal by King’s College Hospital NHS Foundation Trust. Mr Hastings was dismissed for gross misconduct after an altercation with a third-party van driver in the car park. The claimant was of African Caribbean descent and had an exemplar employment record.  Acts of self-defence by the claimant were deemed to be acts of aggression. Several red flags in the case show racial bias in the investigation and disciplinary procedure: 

• Investigations into the altercation were heavily based on CCTV footage at the expense of other evidence that would have supported the claimant’s point of view. 
• Disciplinary proceedings for gross misconduct and investigation of the facts were more like interrogations. To make matters worse, the questions used deliberately presented the claimant as an aggressor.
• When Mr Hastings made a grievance concerning racial discrimination, no further investigation was made into the grievance and it was swiftly dismissed. 

Overall, this case clarifies that even if an employer has a disciplinary/ investigation procedure in place, the way in which it is used must be neutral for a dismissal to be fair. Employers have the added responsibility to ensure that all evidence is reviewed in the process, as opposed to the cherry-picking of criminalising evidence as we see in this case. 

All in all, these cases give a glimpse into the development of unfair dismissal law and its application to the unequal bargaining power of the employer-employee relationship. When studying any area of employment law, keeping up with recent changes in legislation or new cases makes all the difference in our understanding of how the law protects employees. 

Words: Natasha Dayananda

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Employment Law – Case Studies

In her more than twenty years of employment law practice and management defense,  Penny Lechtenberg  has seen and experienced a lot.  The scope of human behavior revealed in the workplace never ceases to amaze and requires careful, strategic and timely management from the perspective of the human resources professional.

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The receipt of a Charge of Discrimination filed with the EEOC or other administrative agency can be a daunting experience.  Immediate and definitive actions are necessary.  We have more than 20 years of experience in aggressively defending employers against all types of discrimination charges filed by employees and third parties based on race, disability, gender, national origin, harassment, retaliation and other allegations.

OSHA Investigations:

Internal compliance audits and counseling:.

It’s good to get ahead of the game whenever possible, and internal audits on a variety of issues can be an excellent tool to assess potential exposure and improve internal procedures.  We offer compliance audits in numerous areas, including but not limited to I-9 employment verification files, wage and hour record keeping, job description reviews, employment application forms, employee handbooks, employment contract drafting and review, FLSA wage and hour exemption determinations, and FMLA and ADA interplay as they apply to particular workers.  With our assistance, employers have found and corrected weak areas, saved money and increased workplace compliance, safety, morale and organization in advance of any government inquiries.  Our development of effective protocols for dealing with government inquiries and other workplace events is another key approach to minimizing an employer’s risks, creating positive results and increasing order in the workplace.

ICE Raids and HSI Investigations:

Immigration Customs and Enforcement (ICE) has the ability to investigate and conduct raids at employer sites; some industries find themselves targeted more often than others.  Notable industries include meat packing and food preparation, temporary staffing and manufacturing.  When ICE or Homeland Security Investigations (HSI) contacts your company for an inspection or raid, you want experienced counsel to guide you through the process.  Deadlines are extremely tight; and consequences for missing them are costly.  We have assisted numerous clients through the administrative process of responding to audits and their aftermath, including communications with government officials in all matters, prosecuting cases through the federal administrative process and resolving Notices of Intent to Fine (NIFs).

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Supreme Court Seems to Side With Starbucks’ Challenge to Labor Ruling

The case seeks to limit the National Labor Relations Board’s ability to obtain court intervention in labor cases.

By J. Edward Moreno

The Supreme Court justices on Tuesday appeared willing to side with Starbucks in the company’s challenge to a federal judge’s order to reinstate workers who were attempting to unionize a store in Memphis.

Starbucks has asked the court to make it harder for the National Labor Relations Board to obtain intervention by judges in cases where a company is accused of violating labor law. The case stems from the February 2022 firing of seven workers who let local journalists into a closed store to conduct interviews about their unionization efforts.

If Starbucks prevails, it would be more difficult for workers to be reinstated if they’re fired during a labor dispute. The case is being heard a day before Starbucks is set to return to the bargaining table with the union that represents about 10,000 of its workers after a contentious, monthslong impasse.

A majority of the justices seemed sympathetic to Starbucks’ argument for a more rigorous test for allowing the labor board to reinstate workers. Through their questioning, the justices appeared to see the looser standard that the N.L.R.B. was given in this case as an outlier.

Starbucks, which has faced hundreds of accusations of labor law violations across the country, argued that there is a patchwork of standards under which the N.L.R.B. can seek a court injunction. The appellate court in this case, the U.S. Court of Appeals for the Sixth Circuit, applies a lower standard, and Starbucks argued on Tuesday for a stricter, uniform standard nationwide.

The standard used by the Sixth Circuit considers two factors. Other circuits use a four-factor test, which requires that the N.L.R.B. prove the possibility of irreparable harm if the injunction to reinstate workers isn’t granted, among other things.

Justice Neil Gorsuch pointed out that other federal agencies must abide by the four-part test to obtain an injunction. “So why is this particular statutory regime different than so many others?” he asked.

Austin Raynor, a Justice Department lawyer arguing for the labor board, said that the board had asked for injunctions sparingly and only in particularly egregious cases. The N.L.R.B. has requested injunctions about 15 times in the past year, out of hundreds of complaints it filed.

Justice Ketanji Brown Jackson pointed to that when questioning Starbucks’ lawyer, appearing to ask why the court needed to intervene. “This is not sounding like a huge problem,” she said.

Matthew Bodie, a professor at the University of Minnesota Law School, said that he expected a mild “housekeeping” opinion focused on bringing clarity and uniformity across circuits rather than a ruling on the labor board’s authority.

He said that injunctions were an important tool for the labor board. Without the ability to reinstate workers while proceedings play out, he said, employers could intimidate workers and chip away at union-supporting ranks.

“It dampens the whole process, and it’s more likely to result in a union loss,” said Mr. Bodie, a former N.L.R.B. attorney.

Starbucks said the workers were fired because admitting the journalists into the store violated several company policies. Starbucks Workers United, the union representing the company’s workers, filed an unfair labor practice charge over the firings, arguing that the company selectively enforced the rules against organized workers. The labor board issued a complaint against Starbucks two months later.

A federal judge granted the labor board’s request to reinstate the workers while proceedings over the firings played out, which could take years. An appellate judge upheld the reinstatements last year, and the company requested the Supreme Court review. The high court agreed to hear the case in January.

Lisa Blatt, a partner at the law firm Williams & Connolly, is representing Starbucks and is a veteran of the Supreme Court bar. In the past two years, she won rulings in favor of Google — a closely watched case seeking to make tech companies liable for content posted by its users — and for Jack Daniel’s in an intellectual property case against the seller of a dog toy.

Elizabeth B. Prelogar, the U.S. solicitor general, is representing the labor board. Mr. Raynor, the assistant solicitor general, argued the case on Tuesday.

Starbucks workers began organizing in 2021 with three Buffalo-area stores. Now, the union represents about 10,000 workers across more than 400 corporate-owned stores.

Several companies led by SpaceX have challenged the constitutionality of the N.L.R.B. Starbucks has sought to distance itself from that litigation.

J. Edward Moreno is a business reporter at The Times. More about J. Edward Moreno

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EMPLOYMENT LAW CASE STUDIES

The Employment Law team at IBB has a wealth of experience in working with individuals to achieve the best solutions to a wide range of employment issues. Below are just a few examples of the recent work we have done:

Our client was employed as a solicitor in a regional firm of solicitors.  He was accused of misconduct.  We successfully argued that the allegation had no merit.  We then negotiated a favourable severance for our client.

Our client was employed as a recruitment manager for a global firm of solicitors.  She returned from maternity leave and was informed her role was redundant.  We represented our client in the employment tribunal.  Our client won her claims for pregnancy and maternity discrimination and unfair dismissal.  We then negotiated a favourable out of court settlement for our client.  Her case was widely reported in the media.

Our client was employed as a paralegal for a global beverage company.  She was informed that her role was redundant and was offered a settlement agreement.  We argued that the company had failed to follow a proper process.  We negotiated a more favourable settlement for our client.

Our client was the CEO of a charity.  He was dismissed due to matters unrelated to his work.  We represented our client in the employment tribunal.  Our client won his claim for unfair dismissal and was awarded compensation by the tribunal.

Our client was the MD and shareholder of an IT company.  He was dismissed for gross misconduct.   We represented our client in the employment tribunal.  Our client won his claim for unfair dismissal.  We then negotiated a favourable out of court settlement for our client, which was more than he would have been awarded by a tribunal at a remedy hearing.

Our client was employed as an executive in a global bank.  He was informed that his role was redundant.  Our client believed that the real reason for his selection was due to his sexual orientation.  We presented an employment tribunal claim for sexual orientation discrimination.  We then negotiated a favourable severance for our client.

Our client was employed as a teacher for college.  He was bullied due to his disability and resigned.  We represented our client in the employment tribunal.  Our client won his claim for unfair dismissal and was awarded compensation by the tribunal.

Our client was employed as senior nurse in an NHS Trust.  Our client was accused of bullying.  She raised a grievance against the accusers for race discrimination.  She was victimised for doing this.  Our client had less than 2 years’ service to bring a claim for constructive unfair dismissal.  We negotiated a favourable severance for our client.

Our client was employed as senior manager in a local authority.  Our client was bullied by colleagues and believed that this was because of his race.  We presented an employment tribunal claim for race discrimination.  We then negotiated a favourable out of court settlement for our client.

Our client was employed as an HR manager for a pharmaceutical company.  She was informed her role was redundant.  Our client believed that the real reason for her selection was due to her age.  We then negotiated a favourable severance for our client.

We were contacted by an employee representative and negotiate a template settlement agreement with the company on more favourable terms.  We then acted for all employees, which the company likes, as they like to deal with one firm of solicitors rather than various firms.

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If you would like to discuss your employment situation whether that be reviewing your employment contract or dealing with a dispute then call us today in confidence on  03456 381381 , or email your details to  [email protected] .

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Case Study Resources

Case Study Affiliates at Harvard:

Harvard Business Publishing for Educators

Harvard Business Publishing has information on curriculums, online simulations, and online courses, as well as teaching and learning resources related to case studies in different business disciplines. 

Harvard Education Press Case Studies

Harvard Education Press provides access to cases in higher education and K-12 education. Topics include administration and finance, curriculum development, external relations and public affairs, faculty, human resources, leadership, marketing, planning, student affairs, data use, and community organizing. 

Harvard Kennedy School Case Program

Harvard Kennedy School of Government Case Program offers cases on a variety of topics related to government, as well as research and resources on teaching with cases. Multimedia cases are also available. 

Harvard Law School Case Studies Program

The Case Studies at Harvard Law School offers access for students, educators, for-profit and non-profit to legal cases. The website also features a blog, as well as teaching and learning resources for educators using cases. 

Harvard Medical School "Culturally Competent Care" Case Studies

Harvard Medical School Culturally Competent Care Case Studies provides access to cases that relate to culturally competent care, “…the knowledge, skills and attitudes required to provide quality clinical care to patients from different cultural, ethnic and racial backgrounds. It involves tailoring delivery to meet patients' social, cultural and linguistic needs in an effort to improve outcomes and eliminate disparities in healthcare.”

The Pluralism Project Case Study Initiative

The Pluralism Project Case Study Initiative seeks to understand how the case method can be useful in creatively addressing theological and religious studies issues through teaching and learning. The texts relate to issues in civil society, public life, and religious communities. 

Teaching Negotiation Resource Center

The Teaching Negotiation Resource Center offers a range of materials, including role-play simulations, videos, books, periodicals, and case studies. Most of the materials in the Teaching Negotiation Resource Center are designed for educational purposes, whether in college classroom settings or in corporate training settings, by mediators and facilitators introducing their clients to a process or issue, or by individuals looking to enhance their skills and knowledge independently. 

Law Teaching and Learning:

Todd D. Rakoff and Martha Minow,  A Case for Another Case Method

Best Practices for Legal Education

This blog is a space for people interested in legal education to share opinions, ideas, and concerns. It documents innovations in the legal education reform movement and fosters dialogue in the legal education community. 

Institute for Law Teaching and Learning (see Online Resources )

The Institute serves as a space for ideas regarding legal education. This site contains, resources on curriculum design, teaching and learning, conferences, and recent publications. 

Teaching and Learning Law Resources for Legal Education (Barbara Glesner Fines, UMKC School of Law)

This page holds links to resources for student learning assessment in law schools, group and team-based learning, teaching law, learning law, and articles on legal education. 

Links and Resources (Legal Education, ADR, and Practical Problem Solving [LEAPS] Project)

The Legal Education, ADR and Practical Problem Solving (LEAPS) links and resources page holds resources for different topics in legal education. 

LegalED Problems and Exercises

Interactive exercises and ideas for professors to use in their classrooms. 

The Environmental Law Teacher's Clearinghouse

Case studies and simulations on environmental law. 

Online Education Resources (Renaissance Report, A Journal of Legal Education in Transition)

An analysis of legal education.

Transforming Legal Education (Paul Maharg)

Paul Maharg’s book, Transforming Legal Education , offers critiques and changes to the way law is studied. 

Tips on Case Teaching:

The ABCs of Case Teaching (Institute for the Study of Diplomacy, Georgetown University)

A thorough publication on case studies, the ABCs of Case Teaching answers the question of why professors should use case studies, and offers strategies of engagement, of preparing to teach cases, debriefing, and more. It also provides a sample course packet and additional resources. 

Teaching with Case Studies (Stanford University, 1994)

This article provides information on writing, teaching, and discussing case studies in a legal education setting. 

The Case Method and the Interactive Classroom (John Foran, NEA Higher Education Journal)

Using Investigative Cases

Information on how to use investigative cases in teaching, the benefits of students learning investigative case methods, assessment resources, and examples. 

HBS:  Case Teaching and Learnin g Resources

HBS:  Case Writing Resources

HBS:  Participant-Centered Learning and the Case Method (multimedia resource)

HBS:  The Teaching Post educator forum (dedicated to Case Method Teaching in Action)

HBS:  List of external teaching and learning centers, case resources, etc.

HKS:  Learning by the Case Method (setting student expectations)

Free cases and course materials:

The Case Centre

The Case Centre, a joint initiative in higher education to share case materials among business teachers, hosts free cases on a wide range of topics: entrepreneurship; arts management and music business; responsible management, including social responsibility, anti-corruption, and sustainability; global health delivery; “climate saver” best practices and commercial distribution to low-income regions; political economics; international business; e-commerce; marketing; operations information and technology; other business disciplines; and topical issues.

Educating Tomorrow’s Lawyers

"These resources include course portfolios, articles, tools, reports, and activities from law schools, educators, and members of the legal profession. They have been compiled to facilitate collaboration and innovations in law school."