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Wednesday, August 27, 2014

Missouri Supreme Court: At-Will Employment Not Sufficient Consideration for Arbitration Agreement

The Supreme Court of Missouri’s primary holding in a 4-3 decision last week in Baker v. Bristol Care, Inc., is that continuing at-will employment does not constitute consideration to make an arbitration agreement enforceable.  This holding may negatively impact some Missouri employers’ ability to enforce current arbitration agreements with their employees.

In that case, Bristol Care, Inc. (“Bristol”) and Baker entered into an agreement to arbitrate employment disputes, which was executed contemporaneously with Baker’s promotion.  The agreement also included certain new terms of employment, including stricter limits on Bristol’s ability to terminate Baker and the offer of severance pay under certain conditions.  However, the Court held that the indefinite duration of Baker’s employment coupled with the company’s right to terminate her without cause compelled the conclusion that her employment remained at will, and therefore, that there was no consideration for the arbitration agreement.

The Court also held that provisions giving Bristol a unilateral right to modify, amend or revoke the arbitration provision made the mutual promises to arbitrate illusory.  These mutual promises were therefore also not sufficient consideration to support the agreement, although the Court suggested that such a provision that applied only prospectively may be acceptable.  The dissent, by contrast, reasoned that the contract, including the arbitration agreement, was supported by consideration because the contract was mutually enforceable, and would have upheld the arbitration agreement on that basis.

Baker follows the trend of recent Missouri appellate cases, which have held that continued at-will employment is not sufficient consideration to support arbitration agreements.  It also delineates certain provisions that may render a mutual agreement to arbitrate employment disputes unenforceable.  The Court’s decision does not currently mean that all agreements to arbitrate employment disputes are unenforceable.  Rather, employers who desire to bind their employees to arbitration of employment disputes must carefully review their arbitration agreements to ensure that they are supported by consideration and otherwise comply with Missouri law.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such. Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and D. Leo Human.


Wednesday, August 27, 2014

Joint Employer Status with Temporary Employment Agency Under Missouri’s Minimum Wage Law

In Tolentino v. Starwood Hotels & Resorts Worldwide, Inc., the Supreme Court of Missouri held that an employer that contracts to receive employees from a temporary employment agency (“temporary agency”) may be held liable as a joint employer with that temporary agency for the temporary agency’s violation of Missouri’s Minimum Wage law,  § 290.500 et. seq. R.S.Mo. (“MMWL”).

Starwood occasionally obtained housekeepers from Grant Labor Services (“GLS”), paying for their services on a per-room rate basis.  For one pay period, covering 122 rooms cleaned by Tolentino, after deductions by GLS, Tolentino’s take home pay was $0.  Tolentino sued Starwood and GLS for failure to pay minimum wage in violation of the MMWL.  The trial court granted Starwood’s motion for summary judgment on the grounds that Starwood adequately compensated Tolentino and could not be held liable for GLS’ unforeseeable, illegal wage deductions.

The Supreme Court reversed the trial court and remanded the case to determine whether Starwood and GLS were joint employers under the MMWL.  It held that factors to consider for that inquiry are Starwood’s power to hire and fire, right of supervision, control over rate and method of pay and maintenance of records.  More importantly, the Court held that if Starwood was a joint employer, then it could be held liable for GLS’ failure to pay the minimum wage, which resulted from an illegal deduction, because Starwood had an independent duty to pay the minimum wage.

The lesson of this case is that employers using temporary staffing agencies likely should determine whether they are joint employers with the temporary agency, and if so (or regardless to be conservative) verify that the temporary workers are paid in compliance with the MMWL.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact one of our labor and employment lawyers if you have any questions.

This update was prepared by Charles S. Elbert and D. Leo Human.


Thursday, April 10, 2014

Requiring Employees to be “Positive and Professional” May Be Unlawful

On April 1, 2014, a panel of the National Labor Relations Board (“NLRB”) held that an employer’s policy that, among other things, required employees to “represent [the employer] in the community in a positive and professional manner in every opportunity” is unlawful.  Hills and Dales General Hospital, 360 NLRB No. 70.  The NLRB reasoned that employees could reasonably construe this policy language to prohibit so-called Section 7 activity, which includes the right to act with other employees for mutual benefit and protection.  The NLRB said that policy language, particularly coupled with other unlawful policy language prohibiting “negative comments” and “negativity,” would discourage employees from publicly protesting employer conduct or making any public statements that are not perceived as positive toward the employer.

On April 2, 2014, the same NLRB panel held that employee handbook rules that prohibit “discourteous or inappropriate attitude to passengers, other employees or members of the public” among other things, was unlawful.  First Transit, Inc., 360 NLRB No. 72.  Again, the NLRB panel ruled that the language was so overbroad and ambiguous that it would encompass disagreements among employees relating to their Section 7 rights.

While the principles followed by the NRLB in these decisions are not new, their application to words and phrases commonly used in employee handbooks and policies is significant.  Further, while these cases may be limited to their particular facts, we nevertheless suggest that employers carefully review their employee handbooks policies to determine whether they contain similarly allegedly overbroad, ambiguous and possibly unlawful language.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact us if you have any questions.

This update was prepared by Charles S. Elbert.


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Wednesday, March 12, 2014

Genetic Information Nondiscrimination Act (“GINA”) Case Settles for Over $100,000

In what it hails as the “first systemic case” under GINA, which was enacted in 2008, the Equal Employment Opportunity Commission announced that it settled a case against a nursing and rehabilitation center that allegedly illegally asked applicants for family medical history as part of a post-offer pre-employment medical examination.  See EEOC v. Founders Pavilion, Inc., No. 13-cv-6250 (W.D. N.Y.), settlement approved 1/9/14.  The settlement resulted in payment of $110,400 for a fund to distribute to 138 claimants.

The EEOC’s position is that employers are prohibited by GINA from requesting family medical history. 

While this is a settlement, not a court decision, and therefore has no precedential effect, we believe that it is significant.  Employers probably should eliminate from post-offer pre-employment medical examinations any questions about family medical history. 

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact us if you have any questions.

This update was prepared by Charles S. Elbert.


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Wednesday, February 12, 2014

EEOC Statistics Fiscal Year 2013

The EEOC recently issued its Fiscal Year 2013 statistics, which show that it received 93,727 charges of discrimination, which is a decrease from prior years, but still is one of the five highest years in terms of number of charges filed.  Once again, retaliation accounted for the most charges, followed by race, sex and disability discrimination charges.  Discharge, not surprisingly, is the most frequently alleged adverse action, followed by general terms and conditions of employment and harassment.  The EEOC claims that it collected a record $372,000,000 in monetary relief through its administrative enforcement procedures, including mediation and conciliation.  It also claims to have obtained $39,000,000 through its litigation program.  These statistics again illustrate the importance of continuing to diligently and carefully evaluate employment decisions to attempt to avoid retaliation and discrimination charges.

The EEOC also adopted and implemented its Strategic Enforcement Plan (“Plan”) to identify six priorities, which include eliminating barriers in recruitment and hiring, protecting immigrant, migrant and other vulnerable workers, addressing emerging and developing issues, enforcing equal pay laws and preventing harassment.

As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation and should not be relied on as such.  Please contact us if you have any questions.

This update was prepared by Charles S. Elbert.


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