PWSHRM-Legal Affairs Update!

Written By Kristina Keech Spitler, Esq.

Supreme Court Rules Employers Who Fail to Act on Mandatory Arbitration Agreement May Lose Their Ability to Compel Arbitration

A unanimous Supreme Court decided that an employee challenging an employment agreement requiring arbitration to resolve employment disputes did not need to show she had been prejudiced or harmed by her employer’s 8-month delay in attempting to compel arbitration. The case, Morgan v. Sundance, involves an hourly non-exempt employee at a Taco Bell franchise in Iowa who had signed an agreement requiring all employment disputes to be resolved using arbitration. The employee had filed a nationwide collective action suit claiming that the franchise had violated the Fair Labor Standards Act overtime pay requirements.

The franchise’s parent company had initially responded to the employee’s complaint as if there had been no arbitration agreement in place, filing a motion to dismiss that was eventually denied. Eight months after Morgan filed her complaint, Sundance moved to compel arbitration under the Federal Arbitration Act. The 8^th Circuit Court of Appeals initially held that Morgan needed to show she had been prejudiced or harmed by Sundance’s delay in order for the Company to have waived its right to compel arbitration. However, the Supreme Court rejected that holding. Justice Elena Kagan noted in her opinion that “The Federal Arbitration Act makes clear that courts are not to create arbitration-specific procedural rules…courts need not necessarily find that someone was prejudiced to find that a party waived its right to compel arbitration under the Federal Arbitration Act. The holding upheld the enforceability of arbitration agreements generally and remanded the case back to the 8^th Circuit Court of Appeals to determine whether or not “the employer knowingly relinquished its right to arbitrate by acting inconsistently with that right.” The Court indicated that the 8^th Circuit Court of Appeals could either resolve the question posed or decide that a different procedural framework is appropriate. “This holding is limited to stopping courts from making up a new procedural rule based solely on the Federal Arbitration Act’s ‘policy favoring arbitration.’”

Virginia Overtime Amendments Take Effect July 1, 2022

Effective July 1, 2022, the existing provisions of the Virginia Overtime Wage Act (VOWA) are repealed and replaced with a provision that any employer that violates the overtime pay requirements under the federal Fair Labor Standards Act (FLSA) is liable to its employees for remedies and other relief available under the FLSA. The amendment will also require derivative air carriers to pay their employees overtime at a rate of not less than one and one-half times the employee’s regular rate of pay for any hours worked in excess of 40 hours in any one workweek.

Virginia Requires Seizure First Aid Poster as of July 1, 2022

Effective July 1, 2022, employers of 25 or more employees in the Commonwealth must physically post information on seizure first aid in the workplace in a place visible to employees. The Department of Labor and Industry will disseminate the information electronically and by other yet-to-be-determined means. The information will be fully consistent with information and guidelines developed by the Epilepsy Foundation of America and any of its successor organizations.

The text of the bill is available at VA HB1178 | 2022 | Regular Session | LegiScan

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Kristina Keech Spitler is a shareholder at Vanderpool, Frostick & Nishanian, P.C. She is leading the firm’s Employment Law practice. If you have additional questions or concerns contact Kristina Keech Spitler at kspitler@vfnlaw.com.

This blog post is not intended to provide legal advice or substitute for the advice of legal counsel with respect to specific facts and situations. See disclaimer