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Mary Ann Couch helps her clients avoid and solve problems in a variety of matters—from financial services and business litigation to employment disputes and ERISA litigation. Mary Ann is licensed in both Alabama and Florida, and has litigated cases in trial and appellate courts across the Southeast. She represents clients in a number of industries, including manufacturing, natural resources, health care, employee benefits, and financial services. View articles by Mary Ann

Can you prevent employees from pursuing class actions if you have the right employment agreement? Employment agreements routinely include arbitration clauses that require employees to waive their right to pursue work-related claims through collective or class actions. Instead, employees agree to resolve disputes through individual arbitration. But the validity of these arbitration clauses is unclear and is now before the United States Supreme Court. The Supreme Court heard oral argument earlier this week in National Labor Relations Board v. Murphy Oil, USA, Inc. and two other consolidated cases about whether such clauses violate the National Labor Relations Act (which governs employer-employee relations) or whether the Federal Arbitration Act (which governs arbitration agreements) trumps the NLRA.

The cases that the Supreme Court is reviewing come out of the Fifth, Seventh and Ninth Circuit Courts of Appeal. The Fifth Circuit held that an employer lawfully enforced an arbitration clause in its employment agreement and did not violate the NLRA. The Seventh and Ninth Circuits held the opposite—finding similar arbitration clauses unenforceable because the NLRA prohibits class waivers in employment agreements.

Employment contract arbitration clauses are currently enforceable in the Second, Fifth, and Eighth Circuits (shown in green below) and unenforceable in the Seventh and Ninth Circuits (shown in red below).

Murphy’s Law: Will the Supreme Court End Employment Contract Arbitration Clauses?

Why Murphy Oil Matters

The Supreme Court’s decision in Murphy Oil is worth watching. If the Supreme Court holds that these arbitration clauses do not violate the NLRA (or that the FAA overrides the NLRA), employees who have signed such clauses will be required to litigate employment-related disputes on an individual basis before an arbitrator. Conversely, if the Supreme Court finds that these clauses violate the NLRA, employees can pursue lawsuits on a collective or class basis, notwithstanding an employment agreement that purportedly waives such rights.

How Best to Structure Arbitration Clauses

Employers can likely avoid these issues entirely with careful drafting of their employment agreements. In particular, if an employment agreement gives an employee the opportunity to “opt out” of the agreement (thus making the agreement voluntary, not mandatory), an arbitration clause and class action waiver is likely enforceable. An opt-out clause should clearly inform the employee of their right to opt out of arbitration and also require the employee to affirmatively notify their employer of their desire to opt out. Ironically, allowing employees the option to resolve employment-related disputes in arbitration may help defend a later challenge to the enforceability of the arbitration agreement if the employee had the option to “opt out” but chose not to do so.

The End is Near! Election Day 2016 Employee Rights and Employer ResponsibilitiesThe 2016 election is just days away—do you know your obligations when it comes to employees who want time off to vote during the workday? In some states employers must provide employees voting leave, while in other states, like Florida, Mississippi, and North Carolina, there is no such law on the books. Voting leave laws vary by state, but many permit the employer to dictate the amount of time off, whether it’s paid or unpaid, and the time of day the employee can vote. Some states even impose criminal penalties for an employer’s failure to allow an employee time off to vote.

Here’s a quick comparison of a few states that require employers to provide voting leave:

  • Alabama – Ala. Code 17-1-5
    Alabama employers must give an employee time off to vote in municipal, county, state, or federal elections if the employee is qualified and registered to vote and gives reasonable advance notice to the employer. But you are not required to give more than 1 hour of time off and can specify the hours during which the employee can take time off to vote.

    Caveat: You don’t have to provide leave if the employee’s workday starts 2 hours after voting polls open or ends 1 hour before polls close.

  • Tennessee – Tenn. Code 2-1-106
    Tennessee employers must give an employee no more than 3 hours off to vote on the day of the election in the county where the employee is a resident. The employee is required to notify the employer no later than noon the day before the election if he or she needs voting leave. You can specify the hours during which the employee may take time off, but cannot reduce the employee’s pay for the absence.

    Caveat: You don’t have to provide leave if the employee’s workday starts 3 hours after voting polls open or ends 3 hours before polls close.

  • Texas – Tex. Election Code 276.004
    The Texas voting leave law is much more severe than Alabama or Tennessee, and makes it a Class C misdemeanor if an employer refuses to permit an employee to take time off to vote or threatens the employee with a penalty for voting.

    Caveat: You don’t have to provide leave if the voting polls are open for two consecutive hours outside the employee’s working hours (but make sure you are right about the time or risk a Class C misdemeanor).

Bottom line
Check the voting leave law in your state, and if one exists, be sure to give your employees the leave required. A summary of voting leave laws across the country is available here.

What the EEOC’s Revised Pay Rule Means for EmployersThe EEOC’s revised pay rule expands collection of pay and hours-worked data from employers filing EEO-1 reports. The proposed rule requires employers, including federal contractors, with 100 or more employees to report summary W-2 income by sex, race, ethnicity, and job group. The proposed rule is the EEOC’s most recent tool focusing on discriminatory pay practices.

Here’s what you need to know:

  1. Time for Compliance.

Once the new rule takes effect, you will have an additional 6 months to submit your company’s EEO-1 survey. The proposed rule moves the due date for the EEO-1 survey from September 30, 2017, to March 31, 2018. This time shift allows employers to use existing W-2 reports for pay data and gives employers an opportunity to closely review (and potentially correct) current pay data.

Use this extra time wisely. Analyze employee pay disparities, gaps, and differences, and determine whether you can explain any disparities by legitimate job-related factors. Conduct a system-wide audit of your company’s pay data and fix any potential issues before submission to the EEOC. You shouldn’t turn over data to the EEOC until you know what you’re dealing with (and the types of claims your company may ultimately face).

  1. Changes in the Workforce Snapshot.

The “workforce snapshot”the pay period during which employers count the total number of employees for that year’s EEO–1 reportwill be October 1 through December 31 of the reporting year (compared to the current rule using a July 1 through September 30 workforce snapshot). This means that employers will count employees (for purposes of the EEO-1 report) during a pay period between October 1 and December 31, and will report W-2 income and hours-worked data for those employees for the entire year ending December 31.

  1. Reports by Job Category.

The proposed rule requires pay data to be reported by job category. This is new and much more specific than the current rule. Because of this new requirement, employers must be diligent in keeping accurate pay data records by job category and classification, as well as making sure that the people in a job category are actually doing the work of that job category. If someone’s duties change, make sure to change their job title and put them in the proper category. Keep this in mind as you conduct an audit to assess potential pay discrepancies.

  1. Hours-Worked Data.

The proposed rule also adds a requirement to report hours worked by employees. For nonexempt employees, the EEOC adopts the definition of hours worked as set forth in the Fair Labor Standards Act: “(a) [a]ll time during which an employee is required to be on duty or on the employer’s premises or at a prescribed workplace and (b) all time during which an employee is suffered or permitted to work whether or not he is required to do so.” 29 C.F.R. 778.223. For exempt employees, however, employers can report either: (1) 40 hours per week for full-time workers, and 20 hours per week for part-time workers, multiplied by the number of weeks employed that year; or (2) actual hours-worked data that the employer already keeps.

The comment period on the new proposed rule closes August 15, 2016. Although it’s unlikely the final rule will change substantially from the present version, keep apprised of any changes that may affect the final rule. Once implemented, the EEOC will post notice of the rule’s approval on its website at www.eeoc.gov.