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California’s highest court recently pronounced a new worker classification standard in Dynamex v. Lee, a case involving wage and hour requirements under the California Labor Code. Compared with the old rule, the new standard is simpler, arguably more predictable—and will make it more difficult for businesses to classify workers as independent contractors. Dynamex will have immediate consequences for businesses operating in California. Indeed, within days of the ruling, workers sued two prominent “gig economy” companies alleging unlawful worker classifications.  For companies in every state, the decision is a reminder that the potential risks of worker misclassification could arise under myriad state and federal laws.

Continue Reading What Companies Should Know in the Wake of California’s New Worker Classification Ruling

The Advisory Council on Employee Welfare and Pension Benefit Plans (often called the “ERISA Advisory Council”) has released a report urging the Department of Labor (“DOL”) to streamline retirement plan disclosure requirements. The report reiterates concerns the Council expressed in 2005 and 2009, echoed by the U.S. Government and Accountability Office (the “GAO”) in 2013, that the number and complexity of mandatory disclosures confuses participants and burdens plan administrators. The Council’s latest report goes further than previous reports have done, outlining four recommendations for specific rule changes and proposing new model notices to simplify the current disclosure scheme.

Continue Reading ERISA Advisory Council Urges DOL to Streamline Retirement Plan Disclosures

A complaint filed this month against FedEx Corporation and its pension plan asks a court to apply the Supreme Court’s decision in Windsor v. United States retroactively.  The case is Schuett v. FedEx Corporation.  The plaintiff is the surviving same-sex spouse of a FedEx pension plan participant who died six days before the Court issued its opinion in Windsor.

Case background.  The participant and the plaintiff began living as a couple in 1983.  The participant worked as a FedEx delivery driver for 26 years while the plaintiff stayed home to care for the couple’s two children.  The participant was diagnosed with cancer and learned on June 3, 2013, that her condition was terminal.  Already registered as domestic partners in California, the couple held a bedside wedding ceremony June 19, 2013, and the participant died the following day.

Six days later, the Supreme Court held in Windsor that the U.S. Constitution requires federal law to recognize state-sanctioned same-sex marriages.  The Court overturned section 3 of the Defense of Marriage Act (“DOMA”), which defined marriage under federal law to exclude same-sex couples.  The same day, the Court decided Hollingsworth v. Perry, a procedural ruling that effectively reinstated same-sex marriage in California.  The plaintiff obtained a marriage certificate and a judicial order declaring the couple’s marriage legally valid as of June 19, 2013.
Continue Reading Lawsuit by Surviving Same-Sex Spouse Raises Windsor Retroactivity Question

In the wake of investment losses from the 2008 market downturn, many fiduciaries of employee benefit plans faced lawsuits brought by plan participants.  Most cases involved defined contribution plans, in which participants sought to recover investment losses that had directly reduced their individual benefits.  In contrast, fewer cases were brought against fiduciaries of defined benefit plans, largely because plan sponsors bear the investment risk in the defined benefit context–which means investment losses do not directly affect participants’ individual benefits.  Courts have generally held that participants lack standing to sue defined benefit plan fiduciaries for investment losses–until now.
Continue Reading District Court Opens Door to Suits by Defined Benefit Plan Participants

Employers occasionally find themselves in litigation with current or former employees.  Sometimes an employer-defendant will uncover communications between the plaintiff-employee and her personal attorney or spouse on an employer-owned email or computer system.

These communications might ordinarily be privileged, but inadvertent disclosure to a third party–in this case, the employer–could waive the privilege if the employee failed to take reasonable precautions to maintain confidentiality.  Many employers maintain policies informing employees that communications on work systems are not private and may be monitored.  Employers seeking to use otherwise-privileged communications in litigation have argued that any asserted employee privilege is misplaced or waived, because the employee had no reasonable expectation of privacy on company systems.

But courts have not always agreed.  The existence of a computer use policy only begins the analysis.  Employers might therefore seek a court’s permission before reviewing or using potentially-privileged communications.  The chances of a favorable ruling improve if some or all of the following occur:
Continue Reading How Email and Computer Use Policies Can Help (or Hurt) an Employer in Litigation