Author: Gibbons P.C.

Eleventh Circuit Becomes Latest Court of Appeals to Enforce Agreement to Arbitrate FLSA Collective Action

On March 21, 2014, the United States Court of Appeals for the Eleventh Circuit joined a growing number of federal Courts of Appeals to reject arguments that class waivers contained in arbitration agreements should not be enforced in the employment context. In Walthour v. Chipio Windshield Repair LLC, the Eleventh Circuit (which covers Georgia, Florida, and Alabama) upheld a broad arbitration provision which required employees to bring all employment claims in their “individual capacity and not as a plaintiff of class member in a purported class or representative proceeding ….”

Divisibility Under CERCLA

Although not expressly required under the statute, applied joint and several liability has usually been applied by courts when the government pursues cleanup against polluters under CERCLA. A party seeking to avoid joint and several liability has the burden of proving not only that divisibility of harm is possible amongst potentially responsible parties, but that a reasonable basis for such divisibility exists. Case law from federal district courts, circuit courts, and the U.S. Supreme Court makes it clear that satisfying this burden requires a very case-specific and fact intensive inquiry. Early planning and a focused strategy for how to frame the facts and theory of the case can make the difference in determining whether divisibility is both possible and reasonable.

Supreme Court Holds that Severance Payments to Employees Terminated Involuntarily are Taxable Wage for FICA Purposes

On March 25, 2014, the Supreme Court of the United States unanimously ruled that severance payments ─ that are not linked to the receipt of state unemployment benefits ─ are taxable wages subject to the Federal Insurance Contributions Act (“FICA”). United States v. Quality Stores, Inc., 572 U.S. ___ (2014). Specifically, the Supreme Court ruled that the severance payments made to employees who were terminated involuntarily fit within the broad definition of “wages” under both FICA § 3121(a) and Internal Revenue Code § 3401(a).

Propping Open Cracks in Secret Depths of Fracking Chemicals: How the Wyoming Supreme Court Is Demanding More of Companies Seeking Trade Secret Protection

In Powder River Basin Resource Council v. Wyoming Oil and Gas Conservation Commission, 2014 WY 37 (2014), the Wyoming Supreme Court recently held that state district courts receiving appeals of denied record requests must independently determine whether the information must be disclosed or not, rather than merely reviewing the determination of the Commission as an administrative decision. Further, when determining whether the disclosed chemicals qualify as trade secrets protected under the Wyoming Public Records Act (WPRA), Wyo. Stat. Ann. § 16-4-203, the Wyoming high court held that district courts must apply the more narrow definition of what constitutes a trade secret under the Freedom of Information Act (FOIA) as developed through federal case law when determining if the chemical formulations used in fracking qualify as trade secrets protected under the Wyoming Public Records Act (WPRA), Wyo. Stat. Ann. § 16-4-203.

NJ Supreme Court to Address “Watchdog” Exception to CEPA

The New Jersey Supreme Court recently decided to review a recent decision by the Appellate Division which threatens to expand the protections of the Conscientious Employee Protection Act (“CEPA”) to those employees whose job duties and responsibilities expressly require them to report to their employer potential or actual violations of law or public policy. The issue to be decided by the Supreme Court in Lippman v. Ethicon will be whether employees who are responsible for monitoring and reporting on employer compliance with relevant laws and regulations — so-called “watchdog” employees — seek whistleblower protection under CEPA, and, if so, under what circumstances?

NJ Supreme Court Grants Leave to Appeal to Employee After NJ Appellate Division Permits Indictment Arising From Her Theft of Employer Documents to Prove LAD and CEPA Claims

The New Jersey Supreme Court recently granted defendant Ivonne Saavedra’s leave to appeal the Appellate Division’s decision in State v. Saavedra, the subject of a previous post, affirming the trial court’s denial of her motion to dismiss an indictment charging her with official misconduct for stealing confidential documents from her employer to support her claims under New Jersey’s Conscientious Employee Protection Act (“CEPA”) and the Law Against Discrimination (“LAD”). The majority in the Appellate Division was not persuaded by Saavedra’s argument that her actions were protected under Quinlan v. Curtiss-Wright Corp., also the subject of a previous post, where the Supreme Court held that an employee who was allegedly terminated for using stolen documents in litigation against her employer could assert a claim of retaliation. A dissenting opinion in the Appellate Division in Saavedra, authored by Judge Simonelli, concluded that the indictment should be dismissed with prejudice. For Judge Simonelli, it was fundamentally unfair to criminally prosecute an employee for taking employer documents while engaged in protected activity pursuant to CEPA or the LAD because the law does not give fair warning that the conduct is illegal. Though Saavedra concerns a public employee/employer, it has important implications for private employers as well. The Gibbons Employment & Labor Law Department will continue to monitor developments in the case...

New Authority for Class Action Defendants Allowing Merits-First Bifurcated Discovery

The cost and burden of class action discovery often puts undue pressure on defendants to settle cases that have little or no merit. To relieve this pressure, courts sometimes permit bifurcated discovery, with the parties first addressing class certification issues and later, if warranted, merits issues. Recently, in Physicians Healthsource, Inc. v. Janssen Pharms., Inc., the District of New Jersey ordered bifurcated discovery but reversed the normal mechanics, limiting the first phase to merits issues before permitting any class discovery. The result is the same, though: potentially enormous time- and cost-savings. This strategy may be worth considering in cases where there are potentially dispositive merits issues.

Forgive Me Not: Privacy Advocates Challenge Facebook’s WhatsApp Deal

In their latest effort to curb potential consumer privacy abuses, the Electronic Privacy Information Center and the Center for Digital Democracy are challenging the potential misuse of data about WhatsApp users’ data as a result of WhatsApp’s acquisition by Facebook for $16 billion. WhatsApp is a popular App that allows users to send messages without the regular cost associated with SMS text messaging. According to the complaint, the company “processes over 10 billion messages per day from approximately 450 million users.”

A Quest to Slay the Trolls: Legislative Attempts to Send a Cease and Desist Message to Patent Trolls

Concerns about shake-down patent assertion have prompted response at federal and state levels, from all branches of government. Proposed legislative solutions have included bills that would penalize bad faith claims, impose fines on patent assertion entities (“PAEs”) that send letters with vague allegations of infringement, or make the awarding of attorney’s fees standard in PAE patent litigations. While no legislative proposal answers all the unique challenges patent trolls represent, these lawmaking efforts have highlighted the issue and are prompting other stakeholders to meaningfully assess the holes in the current patent system.

Remedial Investigation Extension Application Deadline Further Extended to March 21, 2014 by NJDEP

The New Jersey Department of Environmental Protection (“NJDEP”) has announced that it will continue to accept applications for the two year extension from the May 7, 2014, deadline to complete remedial investigations until March 21, 2014, due to the high number of weather-related statewide closings. Originally, applications had to be filed with NJDEP by March 7, 2014.