In a 6-3 opinion in Dobbs v. Jackson Women’s Health Org., the Supreme Court overturned Roe v. Wade. The implications for employers, even private employers, will likely be widespread but are as-yet unclear.
A 6-3 majority of the Supreme Court held in Kennedy v. Bremerton School Dist. that a public school coach’s midfield post-game prayer, with students, is protected by the First Amendment.
Respect for religious expressions is indispensable to life in a free and diverse Republic—whether those expressions take place in a sanctuary or on a field, and whether they manifest through the spoken word or a bowed head. Here, a government entity sought to punish an individual for engaging in a brief, quiet, personal religious observance doubly protected by the Free Exercise and Free Speech Clauses of the First Amendment. And the only meaningful justification the government offered for its reprisal rested on a mistaken view that it had a duty to ferret out and suppress religious observances even as it allows comparable secular speech.
The dissent noted that the prayer was anything but post-game, as it occurred during the entire overall game-night event, which the coach began with a locker-room prayer, and while student-athletes weren’t ordered to participate they were, the evidence established, effectively coerced, allowing the coach to evangelize his public school government employee job. Indeed, the dissent pointed out, evidence showed that others viewed the coach’s behavior as a sign that the public school itself was endorsing his prayers, itself a violation of the First Amendment’s church-state separations.
Readers are reminded that the First Amendment does not apply as against private employers.
Generally, the purchase of a business can be done in two ways: (1) a so-called “equity deal” where the stock in a corporation (or other ownership interest if the business is not a corporation) is acquired or (2) an “asset deal” in which only the assets of a business are acquired. In an equity deal, the business itself never changes, just its owners, so the business remains liable usually for whatever its liabilities were prior to the transaction; in other words, the acquisition doesn’t affect the business, or its liabilities, just its ownership. Partially for that reason, asset deals are often pursued instead. In an asset deal, the goal is to acquire only the assets of the business, so the buyer can start its own new business fresh. Recognizing that might not be fair to creditors (including victims of wrongdoing by the business) if for example the “new” business is anything but fresh and is instead a simple continuation of the old business even in name, the courts have long imposed a test for successor liability.
In a recent decision titled EEOC v. Roark-Whitten Hopitality 2, LP, the Tenth Circuit summarized that test, as follows:
The longstanding common law rule outside of the Title VII context has been that “where one corporation sells or otherwise transfers all of its assets to another corporation, the latter is not liable for the debts and liabilities of the transferor.” W. Tex. Ref. & Dev. Co. v. Comm’r of Internal Revenue, 68 F.2d 77, 81 (10th Cir. 1933) (citing federal and state cases). There are “four well recognized exceptions” to this general common law rule. Id. Those include: “(1) [w]here the purchaser expressly or impliedly agrees to assume such debts; (2) where the transaction amounts to a consolidation or merger of the corporations; (3) where the purchasing corporation is merely a continuation of the selling corporations; and (4) where the transaction is entered into fraudulently in order to escape liability for such debts.”
When considering whether to impose successor liability, the Tenth Circuit has adopted nine factors, none of which alone should generally be controlling but all of which should be weighed in context of a particular case’s circumstances:
1) whether the successor company had notice of the charge,
2) the ability of the predecessor to provide relief,
3) whether there has been a substantial continuity of business operations,
4) whether the new employer uses the same plant,
5) whether he uses the same or substantially the same work force,
6) whether he uses the same or substantially the same supervisory personnel,
7) whether the same jobs exist under substantially the same working conditions,
8) whether he uses the same machinery, equipment and methods of production and
9) whether he produces the same product.
As one sees, the first factor is whether the successor had “notice.” The Tenth Circuit has cautioned this factor is not controlling, alone, either way, and, further, that in deciding whether “notice” existed, courts should not limit the evidence to cases of actual notice.
In Roark-Whitten, according to the Court’s decision, the sales agreement at-issue contained “a due diligence provision that afforded SGI thirty days in which to investigate, in pertinent part, the liabilities of the business.” The plaintiff claimed that, if the purchaser had properly exercised due diligence, it would have learned of the employment law liability exposures at-issue.
Despite a strong dissent to the contrary, a 2-judge majority in this panel decision ruled that the plaintiff had adequately pled sufficient facts against at least one of the purchasers at-issue. The case contained allegations of especially unusual and vivid employment law violations, as well as relatively unusual allegations of fact regarding the diligence process itself, and a rather unique and complicated set of facts involving the transactions that were at-issue. Given the dissent, it is arguable that this 2-judge panel holding is likely to be viewed as limited to the constellation of alleged facts at-issue, especially since the case was decided on a motion to dismiss, meaning the issue was only whether the claims were sufficiently pled to start the lawsuit. In other words, the Tenth Circuit did not hold that as an evidentiary matter, issues of fact were raised, must less did its ruling suggest liability might exist.
In 2020 Colorado voter passed Proposition 118, which calls for the creation of a state agency that will (not unlike current workers compensation and unemployment agencies) provide paid family leave commencing January 1, 2023. In Chronos Builders, Inc. v. CDLE, a unanimous Colorado Supreme Court upheld Proposition 118, holding that the premium the new agency will charge to fund such benefits is not a tax in violation “of section (8)(a) of the Taxpayer’s Bill of Rights (‘TABOR’), which provides, as relevant here, that ‘[a]ny income tax law change . . . shall also require all taxable net income to be taxed at one rate, . . . with no added tax or surcharge.’ Colo. Const. art. X, § 20(8)(a).”
We conclude that the premium collected by the Division does not implicate section (8)(a) because the relevant provision of that section concerns changes to “income tax law.” The Act, a family and medical leave law, is not an income tax law or a change to such a law. Moreover, the premium collected pursuant to the Act is a fee used to fund specific services, rather than a tax or comparable surcharge collected to defray general government expenses. We therefore hold that the Act does not violate section (8)(a).
Since at least 2019, it has been clear under Supreme Court precedent that mandatory pre-dispute arbitration agreements entered into with employees are binding and enforceable, even if it means the employee cannot bring a class- or collective-action as part of her claims. California attempted to work around that caselaw with an innovative state law (“PAGA” ) unlike any other in any state, which purported to say the state itself had the right to bring class- and collective-actions and that an individual can bring the state’s claim as, what PAGA calls, a Private Attorney General. PAGA then added that individuals could not waive that right (in for example an arbitration agreement). In Viking River Cruises, Inc. v. Moriana, the Supreme Court ruled that, no, such an individual, if she has signed an arbitration agreement, even a mandatory pre-dispute arbitration agreement, must submit her own claims to arbitration and, once she has done so, has no mechanism under PAGA for attempting to bring a class-collective action in court.
In so ruling, the Supreme Court held that federal law preempts Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014).
The Supreme Court’s opinion’s wording has led at least some commentators to speculate that the California legislature may attempt to re-draft PAGA in response to the Supreme Court’s Viking River Cruises decision.
A new Colorado unemployment law has added a disclosure obligation for companies, to be codified at CRS 8-74-101(4). This information must be provided to employees at the time of separation, in writing, and may be provided electronically or by hard copy.
The information must include:
(a) the employer’s name and address;
(b) the employee’s name and address;
(c) the employee’s identification number or the last four numbers of the employee’s social security number;
(d) the employee’s start date, date of last day worked, year-to-date earnings, and wages for the last week the employee worked; and
(e) the reason the employee separated from the employer
This appears to be in addition to the information that the CDLE already requires in its unemployment regulations as rule 7.3.2.2:
7.3.2.2 Notice Provided to Employee Upon Separation. The employer must also provide such notice to every worker upon separation from employment. This notice must include:
.1 A statement that unemployment insurance benefits are available to unemployed workers who meet the eligibility requirements of Colorado law;
.2 Contact information to file a claim;
.3 Information the worker will need to file a claim;
.4 Contact information to inquire about the status of their claim after it is filed
The interplay between federal and state wage-hour laws versus the Federal Arbitration Act is a bit tricky. To be sure there are complicated nuances and conflicting state and local laws, but to simplify: Federal and state wage-hour laws permit employees generally to pursue a class-collective action in court; however, if they have entered in an arbitration agreement — even a mandatory pre-dispute arbitration agreement — the Federal Arbitration Act requires them to pursue their wage-hour claim instead only in arbitration, where they may pursue only their own individual claims (not a class-collective action). In turn, the FAA contains its own carveout for employees who are “engaged in foreign or interstate commerce.” If employees fall into that carveout, they drop back to the general rule and need not arbitrate wage claims and may instead pursue a class-collective action in court.
In this case, the Supreme Court had to decide where baggage handlers fall in that statutory scheme. The Circuit Courts were split. In a unanimous decision, Southwest Airlines Co. v. Saxon, the Supreme Court cautioned that some employees, like perhaps janitorial staff, may not fall into the interstate commerce exception, but baggage handlers do. Therefore, the plaintiff baggage handler was not required by the FAA to submit her wage-hour claims to individual arbitration; rather, she is, the Supreme Court held, entitled to pursue them in court and, there, may attempt to assert a class-collective action.
The CDLE has published INFO 16, which explains an employer’s right (and obligation) to deduct and take certain credits. Included in INFO 16, the CDLE explains Colorado’s new law governing an employer’s ability — by way of a new very specific timeline — to deduct “to recover the amount of money or the value of property that an employee failed to properly pay or return to the employer when their job ends.”
