Worker misclassification has been a hot topic in Oregon for years. In 2006, the legislature changed the statutory definition of independent contractor to clarify the criteria that must be met to qualify in Oregon. Athough the current law imposes a pretty tough standard, the Teamsters Union is pushing HB 2890, dubbed the "Worker Misclassfication Act," that would impose even stricter standards on worker classification. The proposed law would require all workers who perform services for remuneration for an employer to be classified as employees unless BOLI determines that the worker meets the criteria for independent contractor status (i.e., the worker has an independently established business, is free from the employer's direction and control, and performs services outside the usual course of business of the employer). The law would criminalize any misclassification of workers, intentional or not, and allow BOLI to impose civil penalties and debar violators from public contracting. In addition, the law would afford workers a private right of action against the employer for misclassification.
Read more about misclassification of workers and the current Oregon law here.
To see a summary of other employment-related bills introduced so far this year, go here.
The Washington Bar Association's Indian Law Section will host the 21st Annual Indian Law Section CLE on May 8, 2009 at 1111 Third Avenue, 30th Floor Conference Center, Seattle, Washington. Topics include: An update on recent cases, Indian tribal trust funds management, Indian civil rights and tribal sovereignty (featuring Rob Roy Smith of Ater Wynne), an examination of Federal recognition cases, a discussion of the Indian Country under the Obama administration, juvenile justice in Indian country, tax planning for tribal construction, and the ethics of litigation in tribal court. Approved for 6.0 CLE Credits for Washington Attorneys: 5.25 General Credits and .75 Ethics Credit. Please go to the website below for more information or to register: https://www.wsbacle.org/seminar_files/09844SEA.pdf.
The Ninth Circuit today concluded that the Fair Labor Standards Act (FLSA) applies to an Indian-owned smoke shop on trust land on the Puyallup Reservation, and that the Secretary of Labor has authority to enter the business to audit its records as the Secretary can do with any private business. The case is Solis v. Matheson.
This is the first Ninth Circuit decision to find that the FLSA applies to an Indian business located on Indian trust land. The court rejected the argument that the operation of the smoke shop was an intramural self-government issue. In part, this finding was based on the fact that the Puyallup Tribe did not "act[ ] on its right of self governance in the field of wage and hour laws and specifically with respect to overtime," suggesting that if the Tribe did have its own version of the FLSA, that law might have operated to preempt the application of the federal statute. The court relied on the fact that the smoke shop was a "purely commercial enterprise engaged in interstate commerce selling out-of-state goods to non-Indians and employing non-Indians." The fact that the smoke shop is owned by individual Indians and not the Tribe seemed to play a minor role in the court's analysis.
This opinion serves as a reminder that many federal employment laws of "general applicability" govern the operation of tribes and Indian businesses, and that the FLSA mandates, among other things, payment of proper overtime wages to employees. The case also highlights that Indian and tribal businesses must retain a distinctly tribal government character if they are to avoid unwarranted federal and/or state regulation.
The Los Angeles Times yesterday published this article about the influence of conservative judges on the Ninth Circuit Court of Appeals, including what observers say is strategic use of dissents from denial of en banc rehearing. The article notes that a bill pending in Congress could add six more judges to the court, bringing the number of active judges to 35.
In February, I wrote about employers' new obligations under the Stimulus Bill's COBRA Subsidy. Since then, the Department of Labor has published a variety of additonal information for employers on their responsibilities, including several model notices to qualified beneficiaries. In addition, the IRS recently issued guidance in a question and answer format that address a number of issues that have arisen regarding the law's requirements. For example, the guidance provides detailed information on the meaning of "involuntary termination" under the new provisions. The IRS provides additional information here. For those employers offering Oregon state continuation coverage, information is available here on attempts to pass related legislation in Oregon.
Last week in Chalk v. T-Mobile USA, the Ninth Circuit Court of Appeals applied Oregon law to invalidate a contractual class action waiver. The court held that, where individual damages from breach of a consumer contract are likely to be small, a waiver of the right to pursue a class action is substantively unconscionable and therefore unenforceable.
This case was filed in the federal district court in Oregon in 2006 by a plaintiff who bought a wireless internet plan and card from T-Mobile. The service agreement provided for arbitration under the American Arbitration Association’s Wireless Industry Arbitration Rules. The arbitration clause barred class-wide proceedings. When the plaintiff could not get the wireless internet card to fit in her laptop, she commenced a putative class action against T-Mobile, alleging a violation of Oregon’s Unlawful Trade Practices Act (UTPA). T-Mobile moved to compel arbitration pursuant to the service agreement.
In opposing the motion, the plaintiff argued that the bar on class-wide proceedings rendered the arbitration agreement unconscionable and therefore unenforceable. The district court rejected this argument and upheld the waiver. The plaintiff also argued that the costs of arbitration would be prohibitively expensive and preclude her from vindicating her statutory rights. The Court rejected this argument because the plaintiff did not present any evidence to support her cost estimates.
The district court did find merit in the plaintiff's argument that the arbitration agreement was unconscionable because it would prevent the arbitrator from awarding her attorney fees pursuant to the UTPA. Instead of invalidating the arbitration agreement, however, the Court severed those provisions that would prevent the arbitrator from awarding attorney fees to the plaintiff.
On appeal, the Ninth Circuit relied on Vasquez-Lopez v. Beneficial Oregon, Inc., an Oregon Court of Appeals case decided after the district court issued its ruling. Applying Vasquez-Lopez, the court held the class action waiver was substantively unconscionable and unenforceable under Oregon law due to its one-sided nature. Class action waivers unfairly prevent individuals from vindicating their rights when the cost of pursuing each claim individually outweighs the potential relief, according to the court. The court was careful to note that it did not hold that all class action waivers are necessarily unconscioniable. Finally, because the arbitration agreement prohibited severance of the waiver, the court ruled the agreement as a whole unenforceable.
See our January 2007 coverage of the Vasquez-Lopez case here.