Supreme Court Holds Fourth Amendment to Obtain Search Warrant for Automobiles

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Justice Sotomayor, delivering the majority opinion in Collins v. Virginia, held that the automobile exemption does not permit warrantless searches of automobiles located in the home or curtilage. 2018 U.S. LEXIS 3210 (U.S. Supreme Court, May 29, 2018). In Collins, the police were investigating two highspeed traffic violations involving a stolen motorcycle.

Officer Rhodes, while investigating the matter, obtained photographs of Ryan Collins with a motorcycle fitting the description of the motorcycle involved in the traffic violations. Upon obtaining this information, Rhodes drove to Collins’ girlfriend’s home and observed what appeared to be a motorcycle underneath a tarp in the driveway. Rhodes, without a search warrant, walked on to the residential property, removed the tarp, and determined that the motorcycle was the one involved with the traffic incidents. Rhodes, after taking pictures of the motorcycle, returned to his car and waited for Collins to arrive. Collins was arrested and although he filed a pretrial motion to exclude evidence, Collins was convicted. The trial court, the Court of Appeals of Virginia, and Supreme Court of Virginia concluded that the evidence was admissible because Rhodes had probable cause and that this case would fall under the automobile exception to the Fourth Amendment.

In his appeal to the Supreme Court, Collins argued that the motorcycle was protected by the Fourth Amendment because, although not inside the home, the Fourth Amendment applies to “the area immediately surrounding and associated with the home” known as the “curtilage.” Secondly, Collins argued that even though Rhodes was searching a vehicle, the automobile exceptions does not grant unwarranted entry of the curtilage of one’s property.

The Court, in assessing Collins’ first argument determined that due to the location and design, his driveway was part of the curtilage. The driveway in this case was located alongside the house and was partially enclosed by brick walls on two sides and enclosed by the home on a third. Due to the driveways inherent attachment to the home the Court found that it was deserving of the same protection as a front porch, or side garden, and thus concluded that the driveway was part of the home’s curtilage.

The Court was faced with a much more difficult question when forced to assess the second issue in this matter, the automobile exception. The automobile exception to the Fourth Amendment states that police may search one’s automobile without a warrant if there is sufficient probable cause to do so. The reasoning behind this doctrine is that due to the inherent ability for an automobile to escape and drive off, the police are granted easier access in order to obtain necessary evidence. The Court rejected the argument that the automobile exceptions grants the police the ability to enter onto private property and conduct a warrantless search of the vehicle. The Court further declined to expand the scope of the automobile exception and based their decision on the foundation that, although they may have the right to search the vehicle without a warrant, they must also have the right to access the object itself. In this matter, Rhodes was without right to enter the private property, and thus his search of the motorcycle was unlawful. The Court held that the privacy of the home is paramount and to expand the scope of the automobile exception to allow for warrantless searches of a vehicle in the home or curtilage would violate the Fourth Amendment.

At the Law Offices of Sidkoff, Pincus & Green our experienced Pennsylvania and New Jersey attorneys handle many types of legal matters, including civil rights litigation. If you are interested in having a consultation with one of our Philadelphia business lawyers, please call us at 215-574-0600 or contact us online.

Third Circuit Upholds FLSA Standards 

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In a recent case before the Third Circuit, the Court upheld the willfulness standard necessary to extend the limitations period for FLSA claims while allowing a good faith standard for awarding liquidated damages. Souryavong v. Lackawanna Cty., 872 F.3d 122 (3d Cir. 2017). Plaintiffs filed suit against Defendant, Lackawanna County, for failing to pay overtime wages in violation of the FLSA. The employee Plaintiffs each worked two part time jobs for Defendant, who tracked the hours worked for each Plaintiffs’ jobs individually but neglected to aggregate the hours between the jobs resulting in a failure to pay overtime wages. Plaintiffs appealed from a lower court decision finding that Defendant did not willfully violate the FLSA but still awarded liquidated damages due to Defendant’s lack of good faith attempts of compliance to the FLSA.

The Court upheld the lower court’s decision that Defendant did not willfully violate the FLSA. Finding a willful violation is important for an FLSA claim because it extends the limitations period from two years to three years thereby enabling the plaintiff to recover an additional year of lost pay. To show willfulness, plaintiff cannot just show that defendant had a general awareness of the FLSA, but plaintiff must show actual awareness of the specific FLSA violation. Here, the Court upheld the lower court’s finding that Defendant did not meet the willfulness standard, and thus Plaintiffs were not eligible for an extension of the FLSA limitations period.

While the Court found that Defendant did not willfully violate the FLSA, they upheld that Defendant was liable for liquidated damages under a good faith standard. In the lower court, Plaintiffs argued that Defendant was liable for liquidated damages because they willfully violated the FLSA. To the contrary, Defendant argued that they were not liable for liquidated damages because they acted in good faith and the FLSA violations were unintentional. The lower court found that Plaintiffs were entitled to liquidated damages; however, their ruling was based on Defendant’s failure to prove good faith rather than Plaintiff’s willfulness argument. In this case, Plaintiffs argued that the lower court’s finding in favor of liquidated damages reaffirmed their assertion that Defendant was willful and thereby entitled them to the extended limitations period in addition to liquidated damages. However, the Third Circuit held that the lower court’s ruling had no bearing on the extension of the limitations period because it was based merely on Defendant’s lack of evidence of good faith attempts at FLSA compliance and not on their willfulness.

Overall, the Third Circuit reaffirmed the need to show willfulness to extend the limitations period for overtime violations claims under the FLSA. However, if an employer cannot provide sufficient evidence of good faith attempts at FLSA compliance, then employees are entitled to liquidated damages.

For more information, call our Philadelphia employment lawyers for Fair Labor Standards Act in Philadelphia and South Jersey at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

 

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US Supreme Court Enforces Individual Arbitration Agreements

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In May 2018, the Supreme Court in Epic System Corp. v. Lewis ruled in favor of employers in a matter involving the enforcement of individualized arbitration agreements. 2018 WL 2292444. In this case, the plaintiffs were all workers who had signed arbitration agreements which required them to pursue their grievances through individualized arbitration. Plaintiffs instead attempted to sue under two central claims. First, the plaintiffs insisted that the arbitration agreements should not be enforced because of  the “saving clause” of the Federal Arbitration Act (“FAA”) which allows courts to refuse to enforce arbitration agreements “upon such grounds as exist at law or in equity for the revocation of any contract” in combination with the National Labor Relations Act (“NLRA”) which governs workers’ rights to “bargain collectively . . . and to engage in other concerted activities for the purpose of collective bargaining.” Secondly, the plaintiffs argue that even if the “saving clause” of the FAA does not protect their claim, Congress intended for the NLRA and not the FAA to be the controlling regulation.

When faced with determining the merits of the plaintiffs’ first argument, the Court relied primarily on the text of the regulation to determine the meaning and implications of the “saving clause.” When analyzing the clause, the Court focused on the inclusion of the term “any contract.” Id. at 6. The Court believed that this language instructs the courts to treat all contracts, including arbitration agreements, equally. The reason the interpretation of an equal treatment requirement is significant is that under general contract law, the court may only choose to invalidate a contract under the general defenses of fraud, duress, or unconscionability. Id. at 6. The majority held that the illegality claim was not a claim of unconscionability, but instead narrowly interpreted the argument to be no more than stating a contract should not be enforced “because it requires bilateral arbitration.” Therefore, the majority denied plaintiffs’ first claim because they found that the defense was not founded in the traditional defense to contracts, and thus not covered under the “saving clause” of the FAA.

Similar to its denial of the first argument, the majority focused primarily on the text of the NLRA in determining Congress intention regarding NLRA. Plaintiffs’ argument rests on the language in §7 of the NLRA which guarantees workers the right “to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining.” Plaintiffs’ claim that the language of this act prevents the enforcement of agreements which inhibit the workers right to engage in class action suits. The Court in this matter did not find that the language provided in §7 provided a clear congressional command to displace the Arbitration Act. In making its decision the majority focused on the direct language of the act and refused to read into the meaning of “concerted action for the purpose of collective bargaining.” The Court held that not only did this language fail to amount to a clear congressional command to overrule the FAA, but it also failed to establish any relation to class action lawsuits. The Court found that since Congress is well aware of how to explicitly state that one act is overruling another and chose not to do so in the NLRA, Congress did not intend for this act to override the FAA. Since the language was placed along with actions involving the forming and joining of labor organizations and collective bargaining, it was intended to mean concerted action in furtherance of those actions, not workers’ involvement in class action suits.

For more information, call our business lawyers in Philadelphia at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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Third Circuit Ruling FLSA Overtime Wages

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On May 23, 2016 the Third Circuit Court of Appeals held that truck drivers who mainly drove intrastate, and only incidentally or occasionally drove interstate during their business, were entitled to the benefits of the Fair Labor Standards Act (FLSA) and Pennsylvania Minimum Wage Act (PMWA) regarding overtime pay rates. Mazzarella v. Fast Rig Support, LLC, 823 F.3d 786 (3d Cir. 2016). Drivers for a trucking company claimed that they often worked over forty hour weeks, and yet were only compensated for overtime when they worked over forty-five hour weeks. The trucking company attempted to argue that because it was a motor carrier, under the Department of Transportation’s jurisdiction, and its business transporting water to fracking sites involved transporting an item between “a State and a place in another State” it was consequently exempt from the FLSA through the Motor Carrier Act (MCA).

The Third Circuit however rejected the trucking company’s representation and classification of the nature of its business. The Court found that the operations of the drivers in their work was not part of a “continuous stream of interstate travel” that would fall under the MCA’s exemption to the FLSA. All evidence presented by the trucking companies demonstrated that their operations only occasionally and incidentally impacted interstate commerce. Their operations that only occasionally entailed driving to other states were not part of a “practical continuity of movement in interstate commerce”. The Court ruled that exemptions to FLSA should be narrowly construed against the employer to ensure employees are properly protected. The high burden of proving an exemption to the FLSA’s overtime requirements was not met by the mere statements and unspecific evidence put forward by the company to demonstrate the interstate nature of its employees’ operations. The truck drivers’ award of $31,000 was affirmed by the Court to compensate them for the overtime worked and guarantee their protection under the FLSA.

For more information, call our Philadelphia employment lawyers at Sidkoff, Pincus & Green at 215-574-0600 or submit an online inquiry.

Superior Court Upholds PA Overtime Rate Method  

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The Superior Court of Pennsylvania recently ruled in a case that dealt with the proper method of calculating overtime wages paid to non-exempt employees. In Chevalier v. General Nutrition Centers, Inc., 177 A.3d 280 (Pa. Sup. Ct. 2017) employees at GNC, a company selling health and nutrition related products, brought suit against the company alleging that the calculation of their overtime pay violated Pennsylvania Minimum Wage Act (PMWA).The PMWA requires “a payment of at least one and one-half of the employees’ regular rate” for each hour worked in excess of forty hours. Id. GNC’s method of calculating overtime pay is called the fluctuating workweek (“FWW”) method. Id. The FWW method takes the salaried employee’s weekly pay and divides it by the total number of hours worked (including overtime hours) which produces a certain dollar amount which is considered the “regular rate”. This regular rate is then halved (.5) and multiplied by the number of hours of overtime worked which produces the final overtime dollar amount. The employees’ method of calculation, also referred to as the forty-hour method, takes the forty-hour work and divides it by the hourly rate (yielding a higher “regular rate” than the FWW). The regular rate plus half of the regular rate (1.5) is then multiplied by the hours worked (which produces a substantially higher dollar amount than the FWW).

GNC argued that the United States Supreme Court held that the FWW method was lawful under the FLSA (“Fair Labor Standards Act”) and the PA General Assembly adopted the “regular rate” terminology in the PMWA’s overtime provision. In addition PA case law instructs that, unless a contrary intent appears, when a PA statute tracks the language of a federal statute, PA courts should consult federal authority for guidance in ascertaining the meaning of the term in question. Notably, nothing in the text of the PMWA suggest that the General Assembly intended to give a meaning to “regular rate” different from that establishes under the FLSA. GNC further argued that while the PMWA does authorize the PA Department of Labor and Industry to promulgate regulations defining “regular rate”, it hasn’t done so, which shows there was no intent to bar the FWW method.

The employees countered that the important difference between the PMWA and the FLSA is that the policy statements in the preamble to the PMWA demonstrate that it was intended to provide greater protection for employees in Pennsylvania. They also emphasized that although there may be no regulation that prohibits the FWW method, Pennsylvania has not promulgated regulation that authorizes the FWW. Id. Lastly, the employees argued that the FWW method runs directly counter to the purpose of the PMWA which is promoting employment by incentivizing employers to hire more workers as opposed to paying existing workers overtime.

The Court, in its analysis, quickly disposed of the issue pertaining to the “one and one half” premium on overtime hours. It concluded that the trial court correctly determined that the second part of GNC’s FWW method, paying an overtime premium of one-half the regular rate, violated the PMWA. The Court reasoned that had the Department wanted to authorize one-half time payment it surely knew how to do so. Rather, the Department adopted the “one and one-half times” language from the FLSA overtime provision. Clear rules of statutory construction demonstrate that the General Assembly intended the multiplier to be one and one half as opposed to one-half.

In addressing the proper calculation of “regular rate”, the Court concluded that absent legislative or regulatory action, GNC’s calculation of the “regular rate” did not violate the PMWA. The Court began by examining the history of the overtime provisions in both the FLSA and the PMWA. The Court said that by the time the PMWA was enacted, the FLSA was clearly understood to permit employers to calculate the “regular rate” of salaried employees by reference to the total hours worked. This idea was affirmed in a Supreme Court case and then codified in a series of federal regulations. The Court concluded further that the General Assembly was aware of the FLSA, knew how to deviate from the FLSA, but did not do so. Finally, the Court said that the Employees argument based on the PMWA’s general purpose is unavailing. Therefore, the Court upheld the GNC’s FWW method of calculating overtime hours but struck their half multiplier in a win-lose situation for both parties.

For more information, contact the Philadelphia overtime lawyers at Sidkoff, Pincus & Green at 215-574-0600 or contact us online.

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Supreme Court holds “Service Advisors” exempt under FLSA

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On April 2, 2018, the United States Supreme Court held that service advisors at car dealerships are exempt from the FLSA’s overtime-pay requirements under 29 U.S.C. 213(b)(10)(A). Encino Motorcars, LLC v. Navarro, 138 S.Ct. 1134 (2018). In Encino Motorcars, the Court considered the scope of the Fair Labor Standards Act (FLSA) which requires employers to pay overtime to covered employees who work more than 40 hours a week. The FLSA exempts from the overtime-pay requirements “any salesman, parts man, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership. Service advisors at car dealerships “meet customers; listen to their concerns about their cars; suggest repair and maintenance services; sell new accessories or replacement parts; record service orders; follow up with customers as the services are performed and explain the repair and maintenance work when customers return for their vehicles.”

The Court held that a service advisor is “obviously a salesman”, since the statute did not provide a definition for “salesman” the court construed the term based off its ordinary meaning. The ordinary meaning of “salesman” is someone who sells goods or services. The Court concluded that service advisors sell service to customers for their vehicles. In addition, they are primarily engaged in servicing automobiles because they are integral to the process of providing maintenance and repair even if they don’t physically repair the car. The Court rejected the distributive canon employed by the Ninth Circuit to match “salesman” with “selling” and “parts man and mechanic” with “servicing”. The Court then examining the Ninth Circuits reliance on legislative history which it found unpersuasive. Even for “those [Members of the Court] who consider legislative history, silence in legislative history . . . cannot defeat the better reading of the text and statutory context.”

The Court relied heavily on the text of 29 U.S.C. 213(b)(10)(A), concluding that service advisors are exempt from the overtime-pay requirement because they are “Salesman . . . primarily engaged in servicing vehicles. The case was reversed and remanded for further proceedings.

For more information or to discuss an issue regarding overtime, call Sidkoff, Pincus & Green at 215-574-0600 or contact us online. Our Philadelphia overtime lawyers represent clients in Pennsylvania and New Jersey.

PA Superior Court Strikes Down Non-Hire Clause

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In the recent case of Pittsburgh Logistics Systems, Inc. v. BeeMac Trucking, LLC, No. 134 WDA 2017 (Pa. Super. Ct. 2018), the Pennsylvania Superior Court voided a non-hire clause contracted between two companies. The non-hire clause stated that the contracting companies could not hire each other’s employees. The non-hire clause put the burden of employment on the employers as opposed to a traditional non-competition agreement, which is a contract between an employer and its employee.

In this case, Pittsburgh Logistics Systems contracted with BeeMac, a competitor, an agreement with the following language:

“CARRIER agrees that, during the term of this Contract and for a period of two years after the termination of this Contract, neither CARRIER nor any of its employees, agents, independent contractors or other persons performing services for or on behalf of CARRIER in connection with CARRIER’s obligations under this Contract will, directly or indirectly, hire, solicit for employment, induce or attempt to induce any employees of PLS or any of its Affiliates to leave their employment with PLS or Affiliate for any reason.”

The Court gave several reasons why the non-hire clause was unenforceable, including: (1) the companies’ employees are put under hiring restrictions they never agreed to, (2) the employees received no consideration for being part of such a non-hire clause, which is usually required by a non-compete, and (3) the scope of the non-hire clause was not reasonable and necessary to protect the legitimate business interests of the company.

For more information, call Sidkoff, Pincus & Green at 215-574-0600 or contact us online. Our Philadelphia employment lawyers represent clients in Pennsylvania and New Jersey.

PA Superior Court Requires High Burden of Proof When Challenging Nursing Home Arbitration Agreement Provisions

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A recent Pennsylvania Superior Court ruling found that nursing home patients who challenge the validity of arbitration agreements due to mental incapacity have a high burden to prove their case. In Cardinal v. Kindred Health Care, No. 1547 MDA 2014 (Pa Super. 2017), the plaintiff, Bret Cardinal (“Cardinal”) brought suit on behalf of the estate of the decedent Carmen Cardinal against the defendant, Kindred Nursing Centers (“Kindred”). The decedent was admitted as a patient to a Kindred facility on June 21, 2012.They then signed a contract the next day agreeing that any disputes related to their admission at the facility would be resolved through arbitration. The plaintiff brought suit alleging claims of negligence, custodial neglect and wrongful death of the decedent, and challenged the arbitration agreement due to the decedent’s lack of mental capacity to enter into the agreement at the time of signing it. The plaintiff alleged that on the day of the decedent’s admission to the Kindred facility, medical records indicate the decedent was lethargic and disoriented. Furthermore, the following day when the agreement was signed, records also show that the decedent had trouble signing the agreement. The plaintiff argued that the facts taken collectively make it clear the decedent was not of sound mental capacity to comprehend the agreement and thus wasn’t able to enter into the agreement knowingly and voluntarily.

The court disagreed; it ruled that Pennsylvania law requires the patient challenging the agreement to prove by “clear, precise and convincing” evidence the patient’s mental incapacity, and “mere weakness of intellect resulting from sickness is not legally sufficient grounds to set aside an executed contract if sufficient intelligence remains to comprehend the nature and character of the transaction.”

For more information, call our business lawyers in Philadelphia at 215-574-0600 or contact us online. The legal team at Sidkoff, Pincus & Green represents clients in Pennsylvania and New Jersey.

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Third Circuit Court Adopts “Honest Belief” Defense in FMLA Case

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When an employer reasonably believes an employee may be misusing FMLA leave, evidence of why the employer came to that “honest belief” can serve as a defense to a retaliation claim under the FMLA. See Capps v. Mondelez Global, LLC, 847 F.3d 144, 152 (C.A.3 (Pa.) 2017).

In the above-mentioned case, the employer fired an employee after it believed he intentionally misused intermittent FMLA leave.  After enduring bilateral hip replacement in 2003, the employee developed arthritis that would cause severe pain, sometimes lasting for days or weeks at a time. This condition required the employee to request intermittent FMLA leave to cover any time he could not work and continued to be recertified for leave every six months. In early February of 2013, on a day the employee requested off due to his condition, he was arrested for DUI. After spending the night in jail the employee also requested leave the next day. The employee never reported this arrest to the employer and subsequently began requesting leave multiple times after that for his condition. About a year later, when a HR manager became aware of the employee’s DUI conviction, the employer investigated and noticed on certain days of requested leave the employee had corresponding court dates.

The employee ultimately was terminated for misusing FMLA leave and violating a company policy on dishonest acts. On appeal, the employee argued the employer was mistaken in their belief to fire him and instead it retaliated against him for taking intermittent FMLA leave. The Third Circuit affirmed the lower court’s decision to grant summary judgment on behalf of the employer, finding the employer had an “honest belief’ of the employee’s misuse of intermittent FMLA leave.

For more information, call our employment lawyers in Philadelphia at 215-574-0600 or contact us online. The legal team at Sidkoff, Pincus & Green represents clients in Pennsylvania and New Jersey.

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Supreme Court to Rule on Legality of “Fair-Share Fees”

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On February 26th, the Supreme Court heard arguments in Janus v. American Federation of State, County, and Municipal Employees, Council 31, 851 F.3d 746 (7th Cir. 2017). Although the Court will not circulate a decision until summer of 2018, commentators are speculating that Janus will succeed in overturning the precedent set in Abood v. Detroit Board of Education, 431 U.S. 209 (1977).

In Abood, the Supreme Court allowed a public employer to require its non-union member employees to pay a fee because they benefitted from the unions collective bargaining agreement with the employer. The fees were not permitted to cover any political funding whatsoever, only the proportionate costs incurred during contracting.

In this case, Mark Janus, a public employee, is challenging an Illinois state law that requires non-union members to pay a “fair share” fee to the union that negotiated on the non-members’ behalf. The “fair share” fee was enacted to cover a proportionate share of the costs the union accrued in negotiating the contract. The fee combats against “free-riding”, whereby a non-union member enjoys the benefits of the contractual work performed by a union without having to pay a fee for those benefits. Janus contends that the fee violates his First Amendment rights because the fees are a form of compelled speech and association which should be reviewed under heightened scrutiny.

The Supreme Court’s ruling could prove costly for unions in America. Invalidating the “fair share” fee could drastically reduce union funding and membership.

For more information, call our Philadelphia business lawyers at Sidkoff, Pincus & Green at 215-574-0600 or submit an online inquiry.