New Jersey Appellate Panels Disagree on Enforceability of Arbitration Agreements Concerning Transportation Workers

New Jersey Appellate Panels Disagree on Enforceability of Arbitration Agreements Concerning Transportation Workers

On June 4 and June 5, 2019, separate panels of the Appellate Division of the New Jersey Superior Court issued diametrically opposed decisions calling into question the enforceability of arbitration agreements involving employees and independent contractors who provide transportation services. In Colon v. Strategic Delivery Solutions, LLC and Arafa v. Health Express Corporation, two Appellate Division panels considered the same legal question: are arbitration agreements enforceable under New Jersey law where one of the signatories is exempt from arbitration under the Federal Arbitration Act (FAA)? Despite the uniformity of the issue considered, the respective holdings stand in stark contrast to one another, creating confusion as to how to interpret arbitration agreements moving forward. Colon and Arafa involved strikingly similar facts. Both the Colon and Arafa plaintiffs contracted with the respective corporate defendants to provide transportation and delivery services on their behalf with regard to pharmaceutical products. Both defendants classified the plaintiffs as independent contractors; and both plaintiffs executed arbitration agreements governing the terms and conditions under which they were to provide transportation services. Most significantly, in both cases the arbitration agreements at issue explicitly stated that they were to be governed pursuant to the FAA (The Arafa agreement stated that...

United States DOL Proposed Update to FLSA Overtime Rules

United States DOL Proposed Update to FLSA Overtime Rules

On March 7, 2019, The United States Department of Labor (DOL), announced a proposal to update the overtime rules under the Fair Labor Standards Act (FLSA). Under the FLSA, employers are required to pay employees at least the minimum wage for all hours worked, and overtime pay (at 1 ½ times an employee’s regular rate) for all hours worked in excess of 40 in a workweek. To be exempt from these requirements, an employee must be paid on a salary basis, at or above a set minimum weekly salary level, and meet certain specific requirements concerning their job duties. In March 2014, President Obama directed the DOL to update and modernize regulations under the FLSA governing overtime exemptions for “white collar” employees (i.e., executive, administrative and professional employees). After receiving more than 270,000 comments, in May 2016, the DOL issued a final rule, substantially increasing the minimum salary levels for the overtime-exempt classifications, from $455 per week ($23,660 per year) to $913 per week ($47,476 per year), and incorporating mechanisms to adjust the salary level in the future (“2016 Rule”). Under the 2016 Rule, the salary level needed to satisfy the highly compensated employee (HCE) exemption (which includes a less...

Recent NLRB Decision Helps Employees, Hurts Unions

Recent NLRB Decision Helps Employees, Hurts Unions

On March 1, 2019, the National Labor Relations Board (NLRB) issued a decision in United Nurses and Allied Professionals (Kent Hosp.), 367 NLRB No. 94 (2019) addressing the rights of individuals in collective-bargaining units who are subject to union-security requirements and elect not to be union members. The Board held that unions cannot charge these individuals for lobbying activities because such activities are not needed for unions to perform their statutory representational duties (i.e., collective-bargaining, contract administration, and grievance adjustment). Additionally, the NLRB held that unions must provide these individuals with independent verification that the financial information it shares with them about union expenditures to justify their non-member charges has been properly audited. The decision came on the heels of a memorandum issued by the Board’s General Counsel, which addressed unions’ duties to notify employees in collective-bargaining units of their right to be non-members, pay reduced charges, and revoke dues authorization checkoffs on their specific anniversary and/or contract expiration dates. The union in Kent Hosp. represented a group of registered nurses. Some of those nurses resigned their union membership and objected to the union charging them for lobbying activities. Such individuals are sometimes referred to as Beck objectors in light...