LABOR AND EMPLOYMENT ALERT    June 2010

Case Law Update: United States Supreme Court Ruling on Arbitrator Authority

The United States Supreme Court issued an opinion in Rent-A-Center, West, Inc. v. Jackson, Case No. 09-497 (2010), on June 21, 2010, pertaining to an arbitrator’s authority to rule on the enforceability of an agreement.  Specifically, the Court addressed the question of “whether, under the Federal Arbitration Act (FAA or Act), 9 U. S. C. §§1–16, a district court may decide a claim that an arbitration agreement is unconscionable, where the agreement explicitly assigns that decision to the arbitrator.”  In Rent-A-Center, Defendant filed a motion to dismiss or stay the proceedings and to compel arbitration based on an arbitration agreement executed by the Parties.  In response, Plaintiff argued that the agreement was unenforceable and unconscionable under Nevada law.  The Court ultimately ruled in favor of the Defendant, holding that under the FAA, the district court is responsible for handling challenges to the enforceability of a precise agreement to arbitrate whereas the arbitrator should consider the enforceability of the agreement as a whole.

The full text of the opinion is available by accessing the following link:
http://www.supremecourt.gov/opinions/09pdf/09-497.pdf

Case Law Update: United States Supreme Court Ruling on Employee Text Messages

On June 17, 2010, the United States Supreme Court addressed the issue of whether the City of Ontario violated an employee’s Fourth Amendment rights when it obtained and reviewed transcripts from a city-issued pager. City of Ontario v. Quon, Case No. 08-1332 (2010).  In City of Ontario, the City Police Chief reviewed the City’s text message limit to determine whether police officers were paying fees for work-related messages or whether the overages were for personal messages.  After reviewing the transcripts, the City learned that many messages were sexual in nature and unrelated to work.  Thereafter, Plaintiff and others sued the City. 

Although the Court did not specifically rule on the issue of Plaintiff’s expectation of privacy, it did hold that the City’s search of the pager was reasonable and, therefore, did not violate Plaintiff’s Fourth Amendment rights.  Specifically, the Court explained, “the search was motivated by a legitimate work-related purpose, and because it was not excessive in scope, the search was reasonable under the approach of the O’Connorplurality [O’Connor v. Ortega, 480 U. S. 709, 711 (1987)]. For these same reasons—that the employer had a legitimate reason for the search, and that the search was not excessively intrusive in light of that justification—the Court also concludes that the search would be ‘regarded as reasonable and normal in the private-employer context’ and would satisfy the approach of Justice Scalia’s concurrence. Id.,at 732.”

The full text of the opinion is available by accessing the following link:
http://www.supremecourt.gov/opinions/09pdf/08-1332.pdf

Case Law Update:  Eleventh Circuit Denies Attorney’s Fees Request in FLSA Case Due to Plaintiff’s Counsel’s Failure to Give Defendants’ Counsel Advance Notice of Lawsuit

On April 14, 2010, the U.S. Court of Appeals for the Eleventh Circuit issued an opinion denying a rehearing en banc regarding Plaintiff’s counsel’s request for attorney’s fees.  Sahyers v. Prugh, Holliday & Karatinos, P.L., Case No. 08-10848 (11th Cir. 2010).  In Sahyers, the Defendants were a law firm and lawyers sued individually by Plaintiff – a former paralegal.  Plaintiff was represented by an attorney.  Before filing suit, Plaintiff’s counsel chose not to contact Defendants to advise them of Plaintiff’s intent to file a lawsuit seeking overtime under the Fair Labor Standards Act (“FLSA”).  After accepting an offer of judgment, Plaintiff moved for attorney’s fees and costs.  Plaintiff’s motion was denied by the Middle District of Florida and affirmed by the Eleventh Circuit.  The reason for the denial was that Plaintiff’s counsel did not attempt to resolve the case informally before filing suit against a fellow attorney.  

In the opinion denying the rehearing en banc, the dissent argued that denying a prevailing plaintiff’s request for attorney’s fees “as an informal sanction of [Plaintiff’s] lawyer for suing fellow lawyers without first attempting to resolve the dispute through informal means” disregards the mandatory language in the FLSA that reasonable attorney’s fees are to be paid to a prevailing plaintiff by the defendant.

The full text of the opinion is available by accessing the following link: http://www.ca11.uscourts.gov/opinions/ops/200810848RhrngOrd.pdf

Federal Trade Commission Postpones Enforcement of Identity Theft Red Flags Rule

On May 28, 2010, the Federal Trade Commission (“FTC”) issued a news release “further delaying enforcement of the ‘Red Flags’ Rule through December 31, 2010, while Congress considers legislation that would affect the scope of entities covered by the Rule.”  The Red Flags Rule requires creditors and financial institutions with covered accounts to create and utilize written identity theft programs.  The purpose of the program is to recognize certain indicators of identity theft (i.e. red flags) and to have appropriate response procedures to address the red flags.

The full news release is available by accessing the following link:
http://www.ftc.gov/opa/2010/05/redflags.shtm

The FTC’s website pertaining to the Red Flags Rule is available by accessing the following link:http://www.ftc.gov/redflagsrule

Federal Contractors and Subcontractors Must Notify Employees of their Rights under the National Labor Relations Act Beginning June 21, 2010

Pursuant to Executive Order 13496, beginning as of June 21, 2010, all federal contractors and subcontractors must provide their employees with notice of their rights under the NLRA.  A copy of the notice and other information related to Executive Order 13496 is available at the following link:  http://www.dol.gov/olms/regs/compliance/EO13496.htm

Legislation Update: Democracy is Strengthened by Casting Light on Spending in Elections Act (DISCLOSE Act) (H.R. 5175, S. 3295)

The United States House of Representatives passed the DISCLOSE Act on June 24, 2010.  The DISCLOSE Act requires, among other things, that special interest groups and other advocacy groups disclose certain information pertaining to donors’ expenditures.  Officials from these groups must also physically appear in sponsored ads.  The CRS Summary of the bill also includes the following important requirements (quoted):

• Amends the Federal Election Campaign Act of 1971 (FECA) to prohibit: (1) independent expenditures and payments for electioneering communications by government contractors if the value of the contract is at least $7 million; and (2) recipients of assistance under the Troubled Asset Relief Program (TARP) of the Emergency Economic Stabilization Act of 2008 (EESA) from making any contribution to any political party, committee, or candidate for public office, or to any person for any political purpose or use, or from making any independent expenditure or disbursing any funds for an electioneering communication.
• Applies the ban on contributions and expenditures by foreign nationals to foreign-controlled domestic corporations.
• Requires the highest ranking official of a corporation, before making any contribution, donation, expenditure, independent expenditure, or disbursement for an electioneering communication in connection with a federal election, to file a certification with the Federal Election Commission (FEC), if this has not been done already, that the corporation is not prohibited from carrying out such activity.
• Requires any person making independent expenditures exceeding $10,000 to: (1) file a report electronically within 24 hours; and (2) file a new report electronically each time the person makes or contracts to make independent expenditures in an aggregate amount equal to or greater than $10,000 (or $1,000, if less than 20 days before an election) with respect to the same election.
• Requires corporations, labor organizations, tax-exempt charitable organizations, and political organizations other than political committees (covered organizations) to include specified additional information in reports on independent expenditures of at least $10,000, including certain actual or deemed transfers of money to other persons, but excluding amounts paid from separate segregated funds as well as amounts designated for specified campaign-related activities. Requires certain additional information in electioneering communication reports.
• Prescribes additional information to be included in certain radio or television electioneering communications by persons (including significant funders of campaign-related communications of a covered organization) other than a candidate, a candidate's authorized committee, or a political committee of a political party.

Source:
http://politics.usnews.com/news/articles/2010/06/25/house-passes-campaign-finance-disclose-act.html

Information related to the DISCLOSE Act is also available by searching for bill number “H.R. 5175” at the following link: http://thomas.loc.gov/

Firm News

Robert J. Sniffen and Michael P. Spellman were each selected by Super Lawyers Magazine as top attorneys in Labor and Employment Law.  The list is based upon peer rankings and is comprised of the top 5% of the lawyers in Florida.  Additionally, Mr. Sniffen was ranked as one of the top 100 lawyers in the State of Florida in all practice areas. 

Robert J. Sniffen and Michael P. Spellman were each named to Florida Trend Magazine’s “Legal Elite” in Labor and Employment Law.  The “Legal Elite” is comprised of the top 2% of Florida lawyers practicing in various areas.

Terry J. Harmon has been selected for inclusion on Super Lawyers’ Florida Rising Stars list for 2010. No more than 2.5% of the lawyers in the State of Florida are named to this list of outstanding young attorneys.  Mr. Harmon was also selected in 2009.

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