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https://www.msn.com/en-us/news/crime/unanimous-supreme-court-gives-taco-bell-employee-a-victory-for-workers-in-wage-theft-and-overtime-dispute/ar-AAXCYva?li=BBnbfcL

 

Unanimous Supreme Court Gives Taco Bell Employee a Victory for Workers in Wage Theft and Overtime Dispute

 

 

NEW YORK, NEW YORK – JULY 21: A Taco Bell restaurant stands along a Queens street on July 21, 2021 in New York City.

The U.S. Supreme Court on Monday gave a former Taco Bell employee a small but significant victory in her battle to recoup wages that were allegedly stolen by a massive franchisee who owns over 150 locations of the popular, Mexican-themed fast food chain.

In the case stylized as Morgan v. Sundance, former hourly Taco Bell employee Robyn Morgan (and several hundred others) claimed that Sundance, Inc., the franchisee in question, forced workers to clock out before the end of their shifts while they still continued to work, that the company devised a policy where management would “shift” hours from one week to the next in order to ensure weekly recorded hours never exceeded 40 so that overtime was not paid, and that many employees were never paid for their shifted hours whatsoever.

Filed under the Fair Labor Standards Act, the 2018 class action lawsuit sought substantial damages for overtime and wage theft.

Wage theft committed by business owners is the leading form of theft in the United States–surpassing all other thefts, including robberies, burglaries, auto theft, and larcenies by at least a measure of 3-1, according to the FBI and the Economic Policy Institute.

For nearly eight months, the litigation process played out–finally fizzling out with an unsuccessful mediation effort. Then the company switched tactics and moved to compel forced arbitration–per the terms of contractual legalese signed by Taco Bell employees.

Morgan and the other Taco Bell employees opposed having a private third-party picked by Sundance decide their claims–for obvious reasons. According to the National Employment Law Project, forced arbitration allows employers to steal billions of dollars from law wage workers per year. The plaintiffs countered Sundance’s request by arguing the company had waived its right to arbitration by engaging in the legal proceedings and not asking for arbitration sooner.

A district court sided with the plaintiffs. On appeal, the U.S. Court of Appeals for the Eighth Circuit reversed, employing a legal analysis that said the plaintiffs had failed to show that Sundance had “prejudiced” their hourly employees by switching tactics.

The workers then filed a petition for writ of certiorari.

The dispute in legal briefs–and during oral argument–was voluminous and focused on the overarching question of whether or not Sundance had, in fact, waited too long to move for arbitration. Both sides’ efforts touched upon numerous legal issues including the intersection of federal and state law and various legal theories like forfeiture, estoppel, laches, and procedural minutiae. But Monday’s unanimous opinion expressly disavows most of those argued finer points of law.

The narrow ruling before the nation’s high court centers around whether or not the Federal Arbitration Act actually has any kind of requirement that a defendant’s waiver depends upon a showing of “prejudice” to the plaintiffs at all. Writing for the majority, Justice Elena Kagan found that there is no such requirement at all.

“Nine circuits, including the Eighth, have invoked ‘the strong federal policy favoring arbitration’ in support of an arbitration-specific waiver rule demanding a showing of prejudice,” the opinion notes–pointing out the competing understanding of the FAA in various courts of appeal. “Two circuits have rejected that rule. We do too.”

Kagan explains that for decades, nine circuits have decided to create “arbitration-specific variants of federal procedural rules” such as the waiver-prejudice issue before the nine justices.

“For that reason, the Eighth Circuit was wrong to condition a waiver of the right to arbitrate on a showing of prejudice,” she notes.

Kagan goes on to explain that waiver is a basic legal concept that operates the same in federal law–except for some time, except in some circuits, and except where arbitration is concerned:

Outside the arbitration context, a federal court assessing waiver does not generally ask about prejudice. Waiver, we have said, “is the intentional relinquishment or abandonment of a known right.” To decide whether a waiver has occurred, the court focuses on the actions of the person who held the right; the court seldom considers the effects of those actions on the opposing party. That analysis applies to the waiver of a contractual right, as of any other.

So, how did so many circuits get it wrong?

Blame the U.S. Court of Appeals for the Second Circuit.

In one 1968 case, the traditionally pro-business, Manhattan-based court wrote that their understanding of the federal arbitration laws means “there is an overriding federal policy favoring arbitration.”

“Over the years, both that rule and its reasoning spread,” Kagan explains. “Circuit after circuit (with just a couple of holdouts) justified adopting a prejudice requirement based on the ‘liberal national policy favoring arbitration.'”

But, as it turns out, they simply made that up.

“[T]he FAA’s “policy favoring arbitration” does not authorize federal courts to invent special, arbitration-preferring procedural rules,” the opinion continues–saying the FAA aims to make arbitration as enforceable as other contracts, but doesn’t carve out special status for them.

“Accordingly, a court must hold a party to its arbitration contract just as the court would to any other kind. But a court may not devise novel rules to favor arbitration over litigation,” Kagan continues. “If an ordinary procedural rule—whether of waiver or forfeiture or what-have-you—would counsel against enforcement of an arbitration contract, then so be it. The federal policy is about treating arbitration contracts like all others, not about fostering arbitration.”

Notably, the victory for Morgan, et, al. is somewhat limited–all the Supreme Court is saying is that the Eighth Circuit (and seven other circuits) have been using the wrong framework to dispense with such claims. On remand, the court has to approach the issue differently. But the focus must be on what the alleged wage-stealing company did, not what the plaintiff workers did.

“Our sole holding today is that [a court] may not make up a new procedural rule,” the opinion concludes.

In a statement to Law&Crime, Morgan’s attorney Karla McBride and public interest law firm Public Justice hailed their victory–a decidedly rare opinion in favor of workers from the Roberts Court:

We are pleased that the Supreme Court announced today in no uncertain terms that the Federal Arbitration Act does not support judge-made procedural rules favoring arbitration over litigation or favoring arbitration agreements over other types of contracts All Robyn Morgan wants in this case is to be paid fairly by her former employer and to have her legal arguments treated fairly by the courts, without a thumb on the scale because those arguments happen to involve arbitration. We are hopeful that today’s decision will bring Ms. Morgan a step closer to a fair result in her dispute with Sundance, and we’re also hopeful that it will send a message to all corporations who include arbitration provisions in their contracts with workers and consumers that those arbitration provisions will be treated just like any other term in their contract—no worse, but also no better.

[image via Photo by Spencer Platt/Getty Images]

The post Unanimous Supreme Court Gives Taco Bell Employee a Victory for Workers in Wage Theft and Overtime Dispute first appeared on Law & Crime.

imous SUnanimous Supreme Court Gives Taco Bell Employee a Victory for Workers in Wage Theft and Overtime Disputeupreme Court Gives Taco Bell Employee a Victory for Workers in Wage Theft and Overtime Dispute

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While I thought it was anti-business article, I found out that the business was the one that was doing the terrible things. I know this happens, but this company went too far. Either give them overtime or make sure that they get their hours on the next week. But doing neither will cost you--so I support these workers in this instance. If you do the job, get paid for it, don't clock out early--if they fire you for that, then you have even a better grievance against them. 

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5 hours ago, DannyZuco said:

While I thought it was anti-business article, I found out that the business was the one that was doing the terrible things. I know this happens, but this company went too far. Either give them overtime or make sure that they get their hours on the next week. But doing neither will cost you--so I support these workers in this instance. If you do the job, get paid for it, don't clock out early--if they fire you for that, then you have even a better grievance against them. 

Funny how this has no responses

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26 minutes ago, ctown81 said:

Funny how this has no responses

And what response would you expect?  This is so obviously wrong it doesn’t call for any response.  Even your response was about no responses, not about the decision.  C’mon ctown, you’re better than that.

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6 hours ago, DannyZuco said:

While I thought it was anti-business article, I found out that the business was the one that was doing the terrible things. I know this happens, but this company went too far. Either give them overtime or make sure that they get their hours on the next week. But doing neither will cost you--so I support these workers in this instance. If you do the job, get paid for it, don't clock out early--if they fire you for that, then you have even a better grievance against them. 

I would bet it happens in more restaurants than are published, but they never make it to court.  It's usually done by poor management that wants their bonus.  Some restaurants chains will pay a bonus even if the restaurant meets the goals that the franchise sets.  Usually the goals are 25% or lower for payroll and food costs for a total of 50% of controllable costs on a P&L.  I could list every detail on a restaurants P&L, because when I was a manager those had to be done at the end of every period.  

This actually happened at the restaurant that I worked for, and the entire management team was terminated.  Several employees complained to HR about their hours being cut.  We can print out our weekly timecard on Sunday at the end of the week, and many employees do that to keep from being shorted.  Why this case made it to the NY Supreme Court is beyond me.  Any judge should know and understand the Federal Laws when concerning overtime or any time that was shorted by an employer.  

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15 hours ago, Hagar said:

And what response would you expect?  This is so obviously wrong it doesn’t call for any response.  Even your response was about no responses, not about the decision.  C’mon ctown, you’re better than that.

 

Really? 

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1 hour ago, RETIREDFAN1 said:

 

Everyone seems to forget, those jobs have never been career positions.  They’ve historically been for teenagers who are getting their first step in the work force for spending money, not a job to raise a family on.  Of course this action that has gotten the company in trouble is wrong, but unionize?  C’mon man.

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1 hour ago, Hagar said:

Everyone seems to forget, those jobs have never been career positions.  They’ve historically been for teenagers who are getting their first step in the work force for spending money, not a job to raise a family on.  Of course this action that has gotten the company in trouble is wrong, but unionize?  C’mon man.

Too bad that corporate and investor greed exported millions of those "better jobs" that people used to move into after gaining experience in those entry level jobs. This is not the same America you and I grew up in.

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1 hour ago, EnjoyLife said:

Too bad that corporate and investor greed exported millions of those "better jobs" that people used to move into after gaining experience in those entry level jobs. This is not the same America you and I grew up in.

Here's the problem, though:

One can advance in the foodservice industry. I speak from experience. In many cases, if you can communicate well, are reliable, and are proficient and willing to learn, you can move up the ladder. I did it. I worked in foodservice for a total of about 4.5 years, and when I moved on to "white collar" work, I was an Assistant Manager at a fast food place. Granted, I didn't make much, but there's a guy who works at a foodservice place here where I live who told me he made around $80K a year as a manager. It is a lot of hours, though.

But I think HAGAR has a point as well.

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2 hours ago, RETIREDFAN1 said:

That's because you commies have screwed it up.........

It was not "us commies" that screwed it up...it was the uber capitalists. They are the ones that sold out this country to Red China to enrich themselves...along with our elected officials that are bought and paid for by the 1% and corporations.

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5 minutes ago, EnjoyLife said:

It was not "us commies" that screwed it up...it was the uber capitalists. They are the ones that sold out this country to Red China to enrich themselves...along with our elected officials that are bought and paid for by the 1% and corporations.

Those aren't capitalists......you should study more.....those are among the commies that screwed up the country........

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24 minutes ago, EnjoyLife said:

It was not "us commies" that screwed it up...it was the uber capitalists. They are the ones that sold out this country to Red China to enrich themselves...along with our elected officials that are bought and paid for by the 1% and corporations.

You know it's bad when the older folks are calling everyone commies. That is what they grew up with, and still think that Reagan was the greatest thing since sliced bread. :rofl:

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18 hours ago, DannyZuco said:

.........and still think that Reagan was the greatest thing since sliced bread. :rofl:

First vote I ever cast in  a prez election was for RR in 1984. When he left office I believed he had been a GREAT president...but with 35 years of hind sight I have come to realize that the Reagan presidency was one of the most destructive in US history.

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35 minutes ago, EnjoyLife said:

First vote I ever cast in  a prez election was for RR in 1984. When he left office I believed he had been a GREAT president...but with 35 years of hind sight I have come to realize that the Reagan presidency was one of the most destructive in US history.

Ronald Reagan was the 2nd best president of my lifetime, and the only one I have personally met ... Donald Trump tops my list of best presidents of my lifetime ....

Worst:

Plugs, Obama, Carter, Clinton .... in that order ....

 

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3 minutes ago, KirtFalcon said:

Ronald Reagan was the 2nd best president of my lifetime, and the only one I have personally met ... Donald Trump tops my list of best presidents of my lifetime ....

Worst:

Plugs, Obama, Carter, Clinton .... in that order ....

 

Then you are a young man, and you left off the 2 bushes. 

I'll Rank mine from first to worst. I rank them economically 1st, Country 2nd, Personality 3rd--those that put the most money in MY pockets while I was working . 

1. Bush 1

2. Clinton 

3. Reagan/Trump

5. Bush 2

6. Obama

7. Johnson

8. Kennedy--too young to work during his time

9. Carter

10. Biden 

 

 

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12 minutes ago, DannyZuco said:

Then you are a young man, and you left off the 2 bushes. 

I'll Rank mine from first to worst. I rank them economically 1st, Country 2nd, Personality 3rd--those that put the most money in MY pockets while I was working . 

1. Bush 1

2. Clinton 

3. Reagan/Trump

5. Bush 2

6. Obama

7. Johnson

8. Kennedy--too young to work during his time

9. Carter

10. Biden 

 

 

The Bush clan may as well have been dimnuts......im proud to say I never voted for either one of them.......

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7 minutes ago, RETIREDFAN1 said:

The Bush clan may as well have been dimnuts......im proud to say I never voted for either one of them.......

But during their years in office, I was financially sound and able to save money--not like the others. 

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2 hours ago, DannyZuco said:

Then you are a young man, and you left off the 2 bushes. 

I'll Rank mine from first to worst. I rank them economically 1st, Country 2nd, Personality 3rd--those that put the most money in MY pockets while I was working . 

1. Bush 1

2. Clinton 

3. Reagan/Trump

5. Bush 2

6. Obama

7. Johnson

8. Kennedy--too young to work during his time

9. Carter

10. Biden 

 

 

I'm 68, I left out the Bushs, Johnson, Eisenhower, Nixon,  Kennedy ... etc .... they were middle of the pack ...

I only listed the best and the worst ... all things considered ....

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