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Washington makes it easier for employees to sue their employers for toxic exposure

27 Jun 2025

ABSTRACT: The Washington Supreme Court has made it easier for employees to sue their employers for exposure causing latent diseases like asbestosis, notwithstanding that employers are generally immune from tort suits by their employees under Washington’s Industrial Insurance Act.

On May 29, 2025, the Washington Supreme Court in Cockrum v. C.H. Murphy/Clark-Ullman Inc. made it easier for employees to sue their employers under an exception to the Washington Industrial Insurance Act (IIA), which generally holds an employer immune from personal injury lawsuits by its employees as part of the state workers’ comp. insurance framework. Overruling prior precedent, the Washington Supreme Court recently held that in “latent disease” cases like asbestos exposure causing illness many years later, employees can recover in a personal injury lawsuit if they show that their employer had actual knowledge that they were exposed at work to a toxin or substance “virtually certain” to cause a disease.

Under the IIA, employers are immune from injury suits by their employees. Employer negligence is not enough to sue, because the enactment of workers’ compensation more than a century ago rested on an agreement that in exchange for certainty of compensation for injured workers (and employers paying into the industrial insurance fund) employers would not be sued for accidents on the job. There is a narrow exception, however, where an injury resulted from the employer’s “deliberate intention to produce such an injury.” To show deliberate intention, a long line of Washington cases held that employees must make a two prong showing: 1) that the employer had actual knowledge that an injury was certain to occur; and 2) willfully disregarded that knowledge.

This led to relatively harsh results in cases alleging that an employee contracted a “latent disease” because he or she was exposed to toxic material like asbestos by the employer, and later developed a disease like mesothelioma. For asbestos (and any carcinogen) it is impossible to ever know with absolute certainty that any individual person exposed to a carcinogen will develop cancer. Thus, in 2014, the Washington Supreme Court in Walston v. Boeing Co. held that Boeing, the employer, was entitled to summary judgment because the plaintiff employee could not demonstrate that Boeing had actual knowledge he was certain to develop mesothelioma.

In Cockrum, the Court granted review of a case that turned on virtually identical facts to Walston, in which the plaintiff was repeatedly exposed to asbestos without protective equipment, and the evidence showed that the employer was aware asbestos could cause a “latent disease” like cancer many years after exposure. Rather than distinguishing the facts in Walston, the Supreme Court took the somewhat rare step of overturning its prior precedent and creating a new test specific to such “latent disease” cases, holding that virtual certainty, rather than absolute certainty, is enough to show deliberate intent. Thus, when an employee alleges that toxic exposure caused a latent disease (including but not limited to cancer), the employee must show that the employer had actual knowledge that an injury was virtually certain to occur, and willfully disregarded that knowledge.

The Court also provided future guidance for courts and litigants by describing four non-exclusive factors that can show “virtual certainty.” These are 1) the employer’s knowledge of ongoing, repeated development of symptoms of latent diseases over time, 2) the employer’s knowledge that other employees similar to the plaintiff developed symptoms, 3) whether those symptoms developed prior to the plaintiff employee being exposed to the toxin, and 4) “whether the exposure arises from a common major cause within the employer’s control.” Stated simply, the first factor asks whether the employer generally knows a substance causes a disease, while the second and third factors ask whether the employer knew that some of its other employees have gotten disease symptoms before the plaintiff got exposed to the toxin. The fourth factor is about whether the exposure was something the employer could control.

The Court justified its decision in Cockrum to overturn prior precedent by looking to the IIA itself. The IIA expressly includes disease in the range of injuries for which an employee may be compensated. Moreover, the word “certainty” does not appear in the text of the IIA statute enacted by Washington’s legislature, but rather in judicial decisions intended to give substance to the legislature’s “deliberate intention” to cause injury exception. In latent disease cases, however, the “certainty” requirement effectively made it impossible for any plaintiff to bring a lawsuit, which is contrary to the legislature’s intent to allow plaintiffs to recover when their employer injures them through causing them to develop a disease. Since the Walston decision was contrary to legislative intent, the Court reasoned it should be overturned.

In dissent, Justice Madsen (joined by Justice Johnson) argued that the “certainty” rule had been in place for more than a hundred years since early decisions interpreting the IIA. In that entire time, the legislature had not seen fit to carve out a special, more lenient rule for latent diseases as opposed to other kinds of injuries. By altering longstanding precedent, Justice Madsen said that the majority was making policy decisions best left to the legislature.

Ultimately, this decision will require lower courts to grapple with what “virtual certainty” means in latent disease cases. While the Court was careful to note that a plaintiff would still have to show that the employer willfully disregarded a known risk, employers are likely to face more lawsuits by plaintiffs alleging latent diseases caused by toxic exposure. Lower courts will have to police the boundaries of this new standard, and may consider other factors besides the four “virtual certainty” factors above.

Missouri lawmakers overturn Proposition A's paid sick leave and partially overturn its minimum wage increases.

03 Jun 2025

ABSTRACT: On May 14, 2025, the Missouri Senate overturned the minimum wage increases and paid sick leave passed by Missouri voters last November included in Proposition A, by applying the seldom used Previous Question rule. The repeal of those provisions is expected to go into effect on August 28, 2025.

On May 14, 2025, the Missouri Senate forced a vote on HB 567, to remove the paid sick time provisions and partially remove the wage increase provisions of Proposition A that were passed by Missouri voters in last November’s election.

We previously wrote about Proposition A following its passage in the November 2024 election. Since then, with the support of several pro-business groups, Missouri lawmakers introduced House Bill No. 567 in January, 2025. HB 567, sponsored by Rep. Sherri Gallick (R-Belton), including a full repeal of the paid sick leave provisions provided by Proposition A, was passed by the Missouri House and cleared review of the Senate Committee on Fiscal Oversight on April 7, 2025.

The Missouri Senate invoked a procedural motion known as the “Previous Question” rule or “PQ” to end debate on HB 567 and another bill, HJR 73, at the end of the legislative session. PQ is sparingly used in the Missouri Senate, and cuts off debate to force a vote on the matter under consideration. PQ had not been used in the Missouri Senate during its regular session since 2017 prior to being invoked twice on May 14^th to pass the two bills.

The guaranteed sick leave provisions provided by Proposition A would impact roughly 1 in 3 Missouri workers. Following its passage on May 14, HB 567 now goes to Governor Kehoe who is expected to sign the bill which will then go into effect on August 28, 2025.

Once enacted, HB 567 repeals the mandatory increase (or decrease) of Missouri’s minimum wage based on the Consumer Price Index, which was set to begin in 2027. It will also repeal the paid sick leave requirements we previously wrote about provided by Proposition A. Missouri’s minimum wage, however, is still set to increase to $15 an hour on January 1, 2026. The paid sick leave provisions provided by Proposition A that went into effect on May 1, 2025, will remain in effect until August 28, 2025. Until then, employers remain subject to the law’s provisions, including accrual, use, notice and recordkeeping requirements.

8th Circuit Changes Course in Standing for States to Sue EEOC over Pregnant Workers Fairness Act

14 Apr 2025

ABSTRACT: The 8th Circuit Court of Appeals reversed the district court’s dismissal of several states’ claims against the EEOC challenging enforcement of part of the Pregnant Workers’ Fairness Act that they allege mandates them to make “reasonable accommodations” for state employees who are seeking an abortion procedure.

The 8th Circuit reversed the district court’s dismissal of a case brought by several states (including Missouri) seeking a permanent injunction against enforcement of part of the Pregnant Workers’ Fairness Act (“Act”) because they allege the rule is unconstitutional. Specifically, the states are challenging a rule that requires employers to make reasonable accommodations to a qualified employee’s known limitations related to, affected by, or arising out of pregnancy or childbirth, or a related medical condition. The regulations promulgated by the EEOC implementing the Act include a list of example conditions that are or may be considered “related medical conditions”, which included “termination of pregnancy, including via miscarriage, stillbirth, or abortion.”

The states bringing this lawsuit argue this rule requires them as employers to make reasonable accommodations for employees of the state who seek abortions under any circumstances. The states alleged the rule 1) is arbitrary and capricious, 2) exceeds the EEOC’s authority established under the Act, 3) violates the First Amendment and the principles of federalism under the Constitution, and 4) the EEOC’s “for-cause removal structure is unconstitutional under Article II of the Constitution.” The district court dismissed the case due to a lack of standing because the states failed to establish an injury in fact that is imminent. Therefore, the state’s motion for a preliminary injunction was also dismissed as moot and because they failed to establish irreparable harm.

The 8th Circuit reversed the district court’s decision and found that as employers who are governed by the EEOC regulations, the states have standing to sue the EEOC. The Court additionally found that the state’s alleged injury (that the Act requires them as employers to provide accommodations they would not otherwise provide and that they allegedly are being barred from engaging in “pro-life” messaging) was caused by the agency action, and that a judicial decision setting aside the action would provide a remedy. The EEOC maintained its position that the rule does not cause an injury under an employee requests an accommodation related to an abortion and does not require immediate action by the states. The Court rejected this argument because “[a]n employer cannot meet its obligations under the Rule without taking steps to ensure that its employees know their rights and obligations under the Rule.”

The Court also rejected the EEOC’s argument that any injury alleged is too speculative under the rule in School of the Ozarks, Inc. v. Biden, 41 F.4^th 992 (8th Cir. 2022). The Court distinguished School of the Ozarks because the plaintiff in that case challenged an internal memorandum from a federal agency and not a rule that regulated the entity challenging it. In this case, the Court stated the rule causes injury to the states because it mandates them to “act contrary to their established policies.” The Court remanded the case for further proceedings and did not review the merits of the claim.

Truck Driver Misclassification Claim Can Move Forward as Collective Action Under FLSA

31 Mar 2025

ABSTRACT: An individual plaintiff truck driver, alleging he and others were misclassified as independent contractors, can bring a collective action on behalf of other drivers under the Fair Labor Standards Act after affidavits satisfied a ‘minimal showing’ of other similarly situated employees.

The United States District Court for the Northern District of Illinois, Eastern Division, recently held that a single truck driver may bring a collective action under the Fair Labor Standards Act (FLSA) after submitting affidavits from three other drivers with the same company alleging they were subjected to common policies and practices.

In Shumate v. Forsage, Inc., a plaintiff truck driver alleged that he and other drivers of Forsage, Inc. were employees of Forsage and that, due to various deductions in pay and long hours, were effectively paid less than minimum wage. Forsage took the position that the drivers were properly classified as independent contractors and Forsage was thus not responsible for ensuring the drivers’ effective wages.

Shumate sought conditional certification under the FLSA, which allows a single employee to bring a collective action on behalf of himself and “other employees similarly situated” if an employer fails to pay the minimum wage to its employees.

While the Seventh Circuit Court of Appeals has not endorsed a specific test to determine authorization of conditional certification of employees, they have acknowledged a two-step test often used by the lower courts within the Circuit.

1) The first step requires the lead plaintiff to make a ‘minimal showing’ that other employees were similarly situated to them, generally requiring affidavits, declarations, deposition testimony, or other documentation which show that the plaintiff and other potential plaintiffs were victims of a policy or plan that violated the law.

Three other Forsage drivers provided affidavits stating they were subjected to common policies, such as deductions in pay, work requirements, and conditions largely echoing those allegations made by Shumate. Upon these affidavits, the District Court granted Shumate’s conditional certification and ordered Forsage to produce a list with contact information for all its drivers over the previous three years so Shumate and the attesting drivers may reach out to them and provide notice of the collective action.

2) The second step of the test takes place after formal discovery and completion of the plaintiff opt-in process (different from the Rule 23 class action process which requires plaintiffs to opt-out of the litigation). After discovery and the opt-in process, the court then engages in a more stringent inquiry to determine whether the plaintiffs are actually similarly situated.

During this step, the Court will undertake comparison of the drivers’ allegations and testimony to determine their veracity and whether such drivers were subjected to the same treatment or policies which violated the FLSA. The District Court will endeavor to compare and contrast the situation of each individual potential plaintiff who opted in to the litigation brought by Shumate in order to determine whether they were each, individually and collectively, victims of the policies and practices of Forsage as alleged by Shumate.

Practical Considerations

Whether workers are employees or independent contractors can be a thorny question, made even more so because regulators’ view of the applicable legal standards tend to shift dramatically when the presidency shifts from Democrat to Republican, or vice versa. The District Court in Shumate has not yet reached that juncture, and this decision largely approaches the issue of conditional class certification under the Fair Labor Standards Act from the evidentiary requirements of plaintiffs. It serves to highlight the relative ease of which employees (or any collection of laborers and contractors) may band together under the FLSA. An argument on the merits of the wage/hour practices of the employer comes after a plethora of formal discovery for any potential plaintiffs. As this decision shows, a collective action under the FLSA, if certified, would require employers to turn over lists of worker contact information and expand greatly expand the litigation. This can expose employers to significant costs and potential damages, all spurred on by the actions of a lone individual.

Applying McDonnell Douglas, Missouri Court of Appeals Upholds Summary Judgment Denying MHRA Claims of Discrimination and Retaliation.

28 Mar 2025

ABSTRACT: The Missouri Court of Appeals upheld the granting of summary judgment in favor of an employer, finding the employee’s claims of discrimination, hostile work environment, and retaliation, lacked sufficient evidence to survive the McDonnell Douglas burden-shifting analysis.

In March, 2025, the Court of Appeals for the Western District of Missouri upheld the decision of a Jackson County, Missouri Circuit Court, granting summary judgment to the Missouri Highways and Transportation Commission finding it did not discriminate and retaliate against Plaintiff Perry Allen.

Allen was terminated from his position with MoDOT for sending inappropriate texts on his work-issued phone. After filing a charge of discrimination with the Missouri Commission on Human Rights alleging discrimination based on race, sex, age, retaliation, and hostile work environment, Allen filed suit in the Circuit Court of Jackson County against the Missouri Highways and Transportation Commission, which superintends MoDOT. The trial court granted summary judgment in the Commission’s favor, and Allen appealed.

The Court of Appeals applied the familiar burden-shifting analysis of McDonnell Douglas Corp. v. Green, 411 U.S. 792 (1973). Under this framework, the plaintiff must first establish a prima facie case of discrimination. The burden then shifts to the employer to provide a legitimate, nondiscriminatory reason for the adverse action, and if the employer can do so, the burden then shifts back to the employee to produce evidence supporting an inference that the employer’s rationale was mere pretext for the discrimination.

Background:

Allen began working for the Missouri Department of Transportation in 1991. On March 15, 2015, as part of an investigation into another employee’s alleged misconduct, the Director of MoDOT’s audits and investigations division, identified as M.V., interviewed Allen. Allen alleged that M.V. created a hostile work environment for Allen, although Allen did not recall M.V. saying anything derogatory about Allen’s sex, race, or age.

Allen further alleged that he and D.H., the human resources manager for the Kansas City district at the time, had three or four negative interactions over the nine years the two worked together. Specifically, in March 2020, Allen and D.H. met in D.H.’s office to discuss an employee matter where D.H. “shouted over” Allen during a phone conversation, then later told Allen that he had embarrassed her in front of central office human resources staff. According to Allen, D.H. was extremely irate, agitated, yelled at Allen, paced back-and-fourth, slapped the back of Allen’s chair and told Allen that he “wouldn’t be questioning any of this if [D.H.] wasn’t black or female.”

In September 2021, Allen emailed C.R., the district engineer for MoDOT’s Kansas City district, describing the March 2020 incident with D.H. Allen alleged the 2020 incident made him feel “beat down” and that he stopped bringing ideas or challenging D.H. because he feared D.H.’s reaction.

In October 2021, C.R. made the decision to terminate Allen after M.V. informed him that audits and investigations had discovered that Allen had sent inappropriate text messages on his work-issued cellphone. C.R., as the district engineer, was the only individual with authority to terminate employees in MoDOT’s Kansas City district. In an affidavit, C.R. stated that he did not consult with M.V. regarding the decision to terminate Allen, and D.H. was not involved in the decision. Allen did not allege that C.R. discriminated or retaliated against him in C.R.’s personal capacity.

The Missouri Highway and Transportation Commission filed a motion for summary judgment with the trial court, arguing that Allen failed to make a prime facie case for discrimination because Allen admitted that C.R., the sole decision maker for the termination decision, did not act discriminately or retaliatory in making that decision. Allen responded claiming that the Commission as an entity had discriminated against him regardless of who signed the termination letter. Allen also claimed that C.R. had consulted with D.H. and M.V., who both acted with a discriminatory or retaliatory motive, and that his termination was sufficient to establish a hostile work environment.

The trial court granted summary judgment finding Allen had failed to meet his burden to show a genuine issue to the material facts that would support his claims under the Missouri Human Rights Act. Allen appealed.

The McDonnell Douglas Burden-Shifting Framework:

Under the Missouri Human Rights Act, RSMo. Section 213.101(3), "If an employer ina case brought under this chapter files a motion pursuant to [R]ule 74.04 of the Missouri rules of civil procedure, the court shall consider the burden-shifting analysis of McDonnell Douglas Corp. v. Green …” Under McDonnell Douglas, the plaintiff must first establish a prima facie case of discrimination. However, if the employer offers a “legitimate, nondiscriminatory reason” for the adverse action, the burden then shifts back to the employee to produce evidence supporting an inference that the employer’s rationale was mere pretext for the discrimination.

Allen claimed the trial court erred in granting summary judgment because C.R. was potentially not the sole decision maker. Allen cited a MoDOT personnel policy requiring that supervisors “consult with the local human resources office for a consistency review/recommendation prior to administering any discipline greater than a verbal warning.” The Court of Appeals, reviewing the summary judgment record de novo, found that this was insufficient to overcome C.R.’s affidavit statement that he had made the decision to terminate Allen after M.V. provided him with information, and did not consult with M.V. or D.H. in making that decision.

The Court of Appeals reasoned that Allen had failed to establish sufficient evidence of a hostile environment based on the summary judgment record because the alleged discriminatory incidents were mere isolated incidents, and a reasonable person could not conclude that his workplace was “permeated with discriminatory intimidation, ridicule, and insult.”

Takeaway:

In order to succeed on a claim under the Missouri Human Rights Act, an employee must demonstrate a causal link between the alleged discrimination and the tangible employment action. Alleging a final termination decision maker and others consulted, without more, is insufficient. And when an employer provides evidence of a legitimate, non-discriminatory reason for termination, it is then incumbent upon the plaintiff to provide evidence that the proffered explanation was pretextual. Further, isolated incidents of alleged discrimination occurring years apart, may be insufficient to establish the existence of a hostile work environment.

The McDonnell Douglas burden-shifting frame work, which has been part of federal law for five decades, has been established law in Missouri for MHRA cases since 2017. The Allen case demonstrates that as in federal practice, this provides employers with the mechanism for seeking summary judgment, when they can provide evidence of a legitimate, non-discriminatory basis for an adverse employment action.

Missouri Court of Appeals Upholds Jury Verdict Against Hotel Corporation for Sexual Assault of a Guest by Security Guard

24 Mar 2025

ABSTRACT: The Missouri Court of Appeals recently upheld a significant compensatory and punitive damages award in a negligent hiring and supervision case stemming from a 2016 sexual assault by a hotel security guard.

This Missouri Court of Appeals for the Eastern District upheld a multi-million dollar verdict for the plaintiff Shannon Dugan against the Hyatt Corporation. The Court of Appeals rejected the hotel chain’s arguments on appeal and upheld the jury’s verdict of $28 million in compensatory damages and $179 million in punitive damages. The case arose out of a 2016 sexual assault by a hotel security guard (referred to as “D.W.”) and included claims of negligent hiring, negligent supervision of D.W., and negligent hiring and training of the respondent’s other staff.

The appellant argued that the trial court erred 1) in admitting evidence of D.W.’s prior arrest and investigations for sex crimes that they argue is hearsay and irrelevant, 2) because the verdict director regarding appellant’s negligent supervision of D.W. did not require the ultimate facts to find the appellant liable, specifically that the D.W. was acting outside of the scope of his employment and the appellant had to ability and should have foreseen the need to supervise him, 3) because the verdict director regarding the appellant’s negligent supervision of employees besides D.W. was defective for the same reasons, and 4) in denying appellant’s motions for a directed verdict and for Judgment Notwithstanding the Verdict (JNOV) on punitive damages due to insufficient evidence to support the submission of punitive damages to the jury.

Admission of Evidence of Security Guard’s Previous Arrests and Investigations

When the appellant hired D.W. as a security guard, their background check did not show his previous arrests and investigations for sexual harassment, abuse, and assault. This is because the appellant’s background check’s scope was limited to “convictions” and not his full criminal history. D.W. admitted in his deposition that he was arrested and investigated for sexual assault and sexual misconduct, but denied doing any of the things he was arrested and investigated for. Plaintiff’s liability expert, a criminologist, testified that based on D.W’s previous criminal history, the sexual assault of respondent was foreseeable. The appellant’s human resources manager and security director were both called as adverse witnesses and admitted key facts regarding the appellant’s policies that were violated. The security director even admitted the assault occurred “due to the many breaches of Hyatt’s policies.” The appellant was granted a continuing objection to the admission of D.W.’s criminal history and investigations during trial, on the basis the evidence was “improper”.

The appellant argued that the trial court erred by admitting D.W.’s criminal history and that the evidence was irrelevant and hearsay. The Court of Appeals rejected this argument for two reasons. First, the only objection made at trial was that this evidence was “improper. The hearsay and relevancy objections were not properly preserved for appeal because objections must be made with “sufficient specificity.” Second, in Missouri negligent hiring cases, dangerous proclivities are shown through prior misconduct. This made D.W.’s criminal background relevant. The testimony of the appellant’s representatives also showed that their policy requiring background checks to check for any criminal history, and not just convictions, made this evidence logically and legally relevant. Additionally, the previous investigations and arrest came in through D.W’s own deposition testimony, which made the facts not hearsay.

Verdict Directors on Negligent Supervision

The appellant’s second and third points on appeal were that the jury was erroneously instructed regarding negligent supervision of D.W. and employees other than D.W. The appellant argues the jury should have been instructed to determine 1) whether D.W. and the other security guards were acting outside the scope of their employment, and 2) whether the appellant knew or should have known of the “necessity and opportunity” to control D.W. acting outside the scope of his employment.

The Court rejected these arguments, agreeing with the trial court that the record established that the appellant owed a duty to the respondent to supervise D.W., even though he acted outside the scope of his employment as a matter of law. The appellant also admitted the facts underlying this conclusion several times. This conclusion and these admissions satisfied the duty element set forth in the Restatement (Second) of Torts Section 317, as adopted in Missouri for negligent supervision claims. The Court further held that the verdict directors sufficiently set forth the remaining elements of a negligent supervision claim: breach, causation, and damages.

Submission of Punitive Damages

The Court held that the respondent satisfied her “clear and convincing evidence” burden to establish punitive damages in a negligence action because the appellant’s representatives admitted several times that the assault occurred due to hotel policy violations. The Court noted that these policy violations regarding cooperating with law enforcement for crimes that occur on hotel property continued after the assault. The Court held that appellant’s pre- and post-assault conduct showed a “complete indifference or conscious disregard for” respondent’s safety and interests and punitive damages were properly submitted.

Employers Subject to More Lenient Standard for FLSA Exemptions from Minimum Wage and Overtime Pay Provisions

28 Feb 2025

ABSTRACT: U.S. Supreme Court unanimously holds the preponderance of the evidence standard applies when an employer seeks to show that an employee is exempt from the minimum-wage and overtime-pay provisions of the FLSA.

The Fair Labor Standard Act guarantees a federal minimum wage for covered workers and requires overtime pay for those working in excess of forty hours a week. However, not all employees are covered by the FLSA, as Congress provided exemptions for many different types of employees, from baseball players to computer programmers to firefighters and so on. In E.M.D. Sales, Inc., et al. v. Carrera et al., the U.S. Supreme Court unanimously reversed a 4th Circuit decision requiring an employer to prove its case by “clear and convincing” evidence, and found that the preponderance of the evidence standard applies when an employer seeks to show that an employee is exempt from the minimum-wage and overtime-pay provisions of the FLSA.

Several E.M.D. sales representatives sued the company in the U.S. District Court of the District of Maryland alleging that E.M.D. violated the FLSA when it failed to pay them overtime wages. E.M.D. agreed these employees worked more than forty hours per week without receiving overtime pay but instead, E.M.D. argued that the employees were categorized as ‘exempt’ because they fell within the FLSA’s outside-salesman exemption.

The District Court found that E.M.D. failed to prove “by clear and convincing evidence” that the employees qualified as outside salesmen. On appeal, E.M.D. argued the District Court should have applied the less stringent preponderance of the evidence standard. The U.S. Court of Appeals for the Fourth Circuit disagreed and affirmed the District Court judgment, making it the only Circuit holding that the clear and convincing standard applies to the applicability of the FLSA exemptions.

There are three main circumstances when a court must deviate from the preponderance standard in civil litigation: (1) when a statute establishes a heightened standard; (2) when the Constitution requires a heightened standard; and (3) rare situations involving coercive Government action. The Supreme Court concluded that the FLSA does not specify a standard of proof for employee exemptions, no constitutional rights were implicated, and this did not involve unusual coercive action against an individual. The Court noted, “[s]tatutory silence is generally inconsistent with the view that Congress intended to require a special, heightened standard of proof.”

The Court compared FLSA actions to Title VII cases where the Court has consistently held that a preponderance standard applies, stating “[i]f clear and convincing evidence is not required in Title VII cases, it is hard to see why it would be required in Fair Labor Standards Act cases.”

Further, the Supreme Court was unpersuaded by the employees’ “policy-laden arguments,” explaining that even “important public interests remain subject to the preponderance standard." The Court was quick to avoid choosing a side on a policy debate but rather apply the longstanding default rule for the standard of proof, allowing both parties in a civil case to “share the risk of error in roughly equal fashion.”

This holding provides clear guidance, which puts to rest the misapplication by some courts of the more onerous “clear and convincing evidence” standard for FLSA exemption.

Requirements of the New Illinois Pay Transparency Amendment

05 Feb 2025

ABSTRACT: As of January 1, 2025, Illinois employers must provide pay scale and benefit information for positions in job postings. Employers should also notify current employees of these opportunities for promotion.

In 2023, Illinois passed a pay transparency amendment to the Equal Pay Act which went into effect on January 1, 2025. To comply with this amendment, Illinois employers with 15 or more employees must provide information on compensation and benefits in certain job postings. Any job posting for a specific position that will be either completed in Illinois or report to a supervisor, work site, or management in Illinois must comply with the pay transparency requirements.

The amendment does not demand that Illinois employers publish job postings, but applies if employers choose to do so. General advertisements such as “help wanted” signs are not included. However, Illinois job postings for specific positions or job titles should identify pay scale and benefits in their description. Employers may provide a hyperlink to a separate webpage with the pay scale and benefit information instead, as long as the compensation information is specific to the position.

Additionally, employers must publish any externally advertised job postings to current employees, with the same compensation and benefits information. If a job posting is only published internally within a company, the posting still must provide information on compensation and benefits.

Employers can hire applicants without the use of specific job postings. However, if an applicant asks for pay scale and benefits for the position, the employer must provide that information before an offer is made.

The new pay transparency amendment expands the record keeping requirements of the Illinois Equal Pay Act. In addition to preserving records of employees’ jobs and wages, employers must keep records of their job postings for each position in Illinois for five years.

Employers who violate the pay transparency requirements may be ordered to pay penalties. Any person aggrieved by a pay transparency violation can file a complaint within one year, or the Department of Labor may initiate its own investigation. If the Department of Labor determines that a violation occurred, it has the discretion to fine the employer up to $10,000 depending on past offenses, the gravity of the violation, and size of the employer’s business.

In summary, Illinois employers should ensure that any job applicant who sees a specific job posting should be able to identify the pay scale and benefits for that position without having to ask or apply first.

NLRB Returns to Gissel Standard to Evaluate Employer Statements on How Unionization May Impact Employer-Employee Relationships

13 Jan 2025

ABSTRACT: The NLRB’s recent decision in Siren Retail Corp. d/b/a Starbucks overturned previous categorical protections for employer statements on the effects of unionization on employer-employee relations, and now requires these statements to be based in “objective fact.”

In Siren Retail Corp. d/b/a Starbucks, the NLRB ruled that is abandoning the Tri-Cast standard that had been in place for the past 40 years, and returning to the earlier Gissel Packing standard for determining if an employer’s statements in a mandatory meeting to discuss unionization violated Section 8(a)(1) of the NLRA.

NLRB Chairman Lauren McFerran stated she believes Board’s return to the Gissel standard will bring “greater consistency” to the way the Board evaluates employer statements about unionization and the potential effects.

Underlying Facts

The statements at issue in this case were made by management during a meeting that was called after the charging party (Workers United) petitioned for a representation election. In reference to the potential unionization, a manager for the employer stated “If you want to maintain a direct relationship with leadership, you’ll check off ‘no.’” The statements found to be in violation threatened that employees would lose already-existing benefits of employment, nonunionized locations would receive benefits over unionized locations, and that collective bargaining would not resolve employer’s inability to tip out employees from credit card payments.

Tri-Cast v. Gissel Standards

The existing standard was created in the NLRB’s decision in the Tri-Cast case in 1985, which the ALJ applied here. The Tri-Cast standard specifies that employer comments on the impact of unionization on employer/employee communication and relationships are “categorically lawful” and do not violate the NLRA. The ALJ determined and the Board affirmed that the manager’s statement regarding “maintaining a direct relationship with leadership” did not violate Section 8(a)(1) under the Tri-Cast standard that deems these statements “categorically lawful.”

While affirming the ALJ’s decision, the Board ruled that Tri-Cast will no longer apply going forward. NLRB General Counsel argued that statements threatening the loss of an existing employee benefit if employees elect to unionize should be considered unlawful, and the Board’s main criticism of the Tri-Cast categorical protection was that it is so broad that “almost any statement involving employees’ ability to pursue grievances individually is permissible”, thus discouraging employees from exercising their Section 7 rights.

The Board stated that they will use the Gissel standard from now on, which requires that employer statements about consequences of unionization be “carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control”; and that they not threaten employees’ existing rights and benefits. If an employer makes such statement implying adverse consequences as a result of unionization that are not “grounded in objective fact”, then it is considered unlawfully coercive and a threat of retaliation against employees.

Key Takeaways

Any Employer currently involved in a union organizational campaign must be aware of these significant new restrictions on permissible statements. The law has changed dramatically.

However, this and other recent Board rulings with a pro-employee emphasis may turn out to be relatively short-lived. On December 11, 2024, the U.S. Senate voted 49-50 against extending the term of incumbent NLRB Chair Lauren McFerran, which means that sometime in the first half of 2025, there will almost certainly be a Republican majority on the Board. (A vote in McFerran’s favor would have ensured a Democratic Board majority into mid-2026.) President Trump will also put in place a new NLRB General Counsel, and we anticipate that the new Republican Board and General Counsel will seek to quickly reverse various Biden-era NLRB rulings, including this one. Other likely targets include Atlanta Opera, where the Board narrowed employer rights to treat workers as independent contractors; Stericycle, which changed the standard for review of employer rules and policies; and Cemex, which broadened the circumstances in which an employer could be order to recognize a union without an election.

We will keep our readers informed of further developments, as the new Administration and soon-to-be reconstituted Board take hold.

Tenth Circuit Becomes Third Federal Circuit to Expand Transportation Workers' Exemption from Arbitration.

23 Dec 2024

ABSTRACT: On November 12, 2024, the Tenth Circuit ruled that a delivery company making solely intrastate deliveries was nevertheless immune from arbitration because it made the “last leg” delivery of goods ultimately transported through interstate commerce. The decision marks the third federal circuit to rule in favor of transportation workers, expanding the “transportation worker exemption” contained in the Federal Arbitration Act.

Factual Background

This blog post serves as an update to our previous blog post regarding the Supreme Court’s clarification of §1 of the Federal Arbitration Act. Flower Foods, Inc. is at the center of another federal arbitration decision. These cases involve Flower Foods’s distribution agreements with local delivery companies. In this iteration, driver Angelo Brock entered such a distribution agreement and obtained the exclusive rights to deliver certain baked goods from a warehouse in Colorado to local Colorado retail stores.

The distribution agreement contained an arbitration agreement, and Flower Foods sought to enforce the arbitration agreement after a putative class action was filed against Flower Foods alleging wage and hour violations. The Colorado district court denied Flower Foods’s motion and the Tenth Circuit affirmed, holding that Brock was a transportation worker engaged in interstate commerce and was thus immune from arbitration.

Tenth Circuit’s Decision

As explained in our prior blog post, the Supreme Court left open the question as to whether local delivery drivers who enter these distribution agreements with Flower Foods are “transportation workers” who are “engaged in interstate commerce”. The primary issue on appeal for the Tenth Circuit in Brock was whether this local distributor engaged in interstate commerce.

As the distributor, Brock picked up certain baked goods from a warehouse in Colorado, and delivered the goods to retails stores in Colorado. No part of Brock’s business operation took place outside Colorado. However, the Tenth Circuit explained that the proper test to determine whether a worker is exempt from arbitration is whether that worker “plays a direct and necessary role in the free flow of goods across borders”. Because Flower Foods imported the goods to Colorado across state lines, then Brock made the final delivery, within Colorado borders, the Court said that the proper question to answer in this case was whether workers making solely intrastate deliveries are “directly involved in transporting goods across state or international borders”.

The Tenth Circuit reasoned that because Brock was in the business of making the “last leg” of a delivery of goods ultimately transported across state lines, Brock was engaged in interstate commerce. Courts in the First Circuit and Ninth Circuit have come to similar conclusions ruling that some Amazon delivery drivers are “engaged in interstate commerce” and thus immune from arbitration when making solely intrastate deliveries because the delivery drivers made the “last mile” delivery of a good that was ultimately transported across state lines to its final destination. See Waithaka v. Amazon.com, Inc., 966 F.3d 10, 26 (1st Cir. 2020) (held that last-mile delivery drivers from Amazon engaged in interstate commerce, despite transporting good “entirely within a single state”); Rittman v. Amazon.com, Inc., 971 F.3d 904, 919 (9th Cir. 2020) (held that Amazon’s last-mile delivery providers engaged in interstate commerce when transporting packages in the final intrastate leg of the interstate journey).

Future Transportation Worker Arbitration Litigation

The Tenth Circuit's decision in Brock marks the third federal circuit to rule in favor of transportation workers on the “last leg” or “last mile” delivery issue, allowing them to avoid arbitration. After Brock, we expect transportation workers to continue to seek expansion of the FAA’s § 1 transportation workers’ exemption.