Third Time’s The Charm for Trump Travel Ban

On December 4 the U.S. Supreme Court cleared the way for the third version of President Trump’s travel ban to take effect, staying injunctions handed down by two U.S. District Courts in October. The Administration’s latest travel ban indefinitely suspends travel to the U.S. by nationals of Somalia, Syria, Libya, Iran, Yemen, North Korea, and Chad and certain officials of the Venezuelan government. Justices Ginsberg and Sotomayor dissented from the Court’s decision.

In two separate orders, the Court stayed injunctions granted by the Courts in Hawaii and Maryland. On October 17 the Maryland District Court issued a nationwide injunction blocking implementation of the ban, finding a likelihood of success on claims that the ban exceeds the President’s authority under the Immigration and Nationality Act (INA) and violates the Establishment Clause. The injunction protected only individuals with a bona fide relationship with a person or entity physically located in the U.S., such as immediate family members, and did not block the restrictions on U.S. entry by North Koreans and Venezuelans.

Three days later, the District Court in Hawaii issued a nationwide temporary restraining order finding a likelihood that the Plaintiffs would prevail on their claims under the INA. While the Court completely enjoined implementation of the ban with respect to persons traveling from the six Muslim majority countries, in November the Ninth Circuit pared the TRO back to protect only those with a bona fide relationship with a person or entity in the U.S. This includes “close familial relationships” which, according to the Ninth Circuit, include grandparents, grandchildren, brothers-in-law, sisters-in-law, aunts, uncles, nieces, nephews, and cousins.

In the latest development, the Trump administration argued to the Supreme Court that the third version of the ban is the result of an extensive review process designed to ensure that foreign national travelers do not pose a risk to national security. The Administration contends that anything but a complete stay of the lower court orders would undermine national security since “most immigrant-visa holders have a bona fide relationship with a person or entity in the United States.”

The Supreme Court apparently agreed, reconsidered its analysis of the prior version of the travel ban, and allowed the ban to take full effect while its legality is reviewed by the lower courts. Oral arguments are scheduled before the 9th Circuit Court of Appeals on December 6. The Maryland case will be argued before the 4th Circuit on December 8. At this time, there is no appeal pending before the Supreme Court relating to any version of the travel ban, but eventual Supreme Court review of travel ban 3.0 is likely.

If you would like to discuss the implications of the travel ban and the various court decisions affecting the ban for your employees, your hiring plans, and your business, please contact Patrick W. McGovern, Esq., Partner in the Firm’s Immigration Law Practice at 973-535-7129 or at pmcgovern@nullnullgenovaburns.com.

Fourth and Ninth Circuits Sink Trump Travel Ban as Prelude to High Court Review

In the most recent judicial setbacks to President Trump’s Executive Order earlier this year suspending the U.S. entry of aliens from six Muslim-majority countries (Iran, Libya, Somalia, Sudan, Syria, and Yemen), reducing the number of refugees allowed entry in 2017 to 50,000, indefinitely and then temporarily barring the admission of Syrian refugees, and suspending the Refugee Admissions Program for 120 days, on May 25 the Fourth Circuit en banc enjoined nationally enforcement of the Executive Order. Although the Justice Department argued that the Order’s primary purpose is advancing national security, the court, with three of the 14 judges dissenting, remained unconvinced that the travel ban had “more to do with national security than it does with effectuating the President’s promised Muslim ban.” The Fourth Circuit found that the Order “speaks with vague words of national security, but in context drips with religious intolerance, animus, and discrimination.” The opinion referenced statements that President Trump made in 2016 while on the campaign trail, which the court found supported its finding that the Executive Order was religiously motivated and violated the Constitution’s Establishment Clause. However, the court vacated the lower court’s injunction to the extent it enjoined the President. International Refugee Assistance Project v. Trump.

On June 12 the Ninth Circuit in a per curiam decision by a three-judge panel, also upheld a lower court’s nationwide injunction against enforcement of the travel ban, but on the separate grounds that the Executive Order violated U.S. immigration law. The court stated that the revised travel ban “exceeded the scope of authority delegated to [the President] by Congress.” The panel held that by broadly prohibiting entry by all persons from the listed countries, the Executive Order is too broad and ignores important factors, such as the alien’s working arrangements, family matters and access to U.S. medical care. The Ninth Circuit did not address Establishment Clause issues, as the Fourth Circuit did. Instead, its major concern was that “the order does not provide a rationale explaining why permitting entry of nationals from the six designated countries under current protocols would be detrimental to the interests of the United States.” However, the court vacated the injunction against the President and against the Government’s conducting internal reviews of security risks posed by nationals of the listed countries and the refugee program. Hawaii v. Trump.

The Supreme Court must now decide whether to hear the Administration’s appeal from the Courts of Appeals decisions this term. Most recently, in view of the current non-enforcement of the travel ban, on June 14 the President revised the 90-day ban on travelers and the 120-day ban on refugees to ensure they do not expire in the interim and will take effect 72 hours if and after the Administration prevails in having the injunctions lifted.

If you would like to discuss the implications of the Executive Order and these court decisions for your employees, your hiring plans, and your business, please contact Patrick W. McGovern, Esq., Partner in the Firm’s Immigration Law Practice at 973-535-7129 or at pmcgovern@nulllgenovaburns.com.

9th Circuit Refuses to Stay Nationwide Injunction Against Enforcement of Trump Immigration Order While Government Appeals

On February 9, 2017, the Court of Appeals for the Ninth Circuit affirmed the U.S. District Court’s Temporary Restraining Order prohibiting nationwide enforcement of key portions of the immigration Executive Order issued on January 27. A unanimous three-judge panel, consisting of two Democratic appointees and one Republican appointee, in a per curiam opinion, ruled that “the Government has not shown a likelihood of success on the merits of its appeal, nor has it shown that failure to enter a stay would cause irreparable injury, and we therefore deny its emergency motion for a stay.” As a result, the TRO stands and aliens from the seven listed countries (Iraq, Iran, Syria, Somalia, Sudan, Libya and Yemen), including those with immigrant and non-immigrant visas, may continue normal processes for entry into the U.S. and refugees from the seven countries, including Syria, may resume their proceedings to relocate to the U.S. State of Washington v. Trump, (February 9, 2017).

Washington State and Minnesota argued that the Executive Order violated the Establishment and Equal Protection Clauses because it disfavored Muslims and that the TRO merely returned the nation temporarily to the status quo in effect for many years. The Government submitted no evidence to rebut the States’ arguments. The Government, the judges observed, was hard pressed to point to a single recent example of an entrant from one of the seven listed countries who was arrested for terrorist activities. Regarding the argument that the Executive Order violates the Establishment Clause, the court withheld judgment for the time being, pending a decision on the merits, explaining, “The States’ claims raise serious allegations and present significant constitutional questions.”

The Ninth Circuit decision to maintain the nationwide TRO of the Trump immigration Order is immediately appealable to the Supreme Court. The President’s immediate tweet — “See You In Court, The Security Of Our Nation Is At Stake!” – anticipates that the Supreme Court will ultimately review the constitutionality of the Executive Order.

If you have any questions or would like to discuss how the Executive Order affects your employees and your business, please contact  Patrick W. McGovern, Esq., Partner in the Firm’s Immigration Law Practice at 973-535-7129 or at pmcgovern@nullgenovaburns.com.

Third Circuit Deals Blow to Jersey City Ordinance Requiring PLAs on Privately Funded Projects in Exchange for Tax Abatements

Jersey City’s Municipal Code offers real estate developers generous tax exemptions that are designed to spur the City’s economic growth, but the tax incentives have strings attached. Specifically, to receive a tax exemption, even on a privately funded project, the developer must agree to use the City-approved project labor agreement (“PLA”), which is a pre-hire agreement that favors unionized contractors and subcontractors. On September 12, 2016, the Third Circuit Court of Appeals reinstated claims against Jersey City that its tax exemption ordinance mandating PLAs is preempted by the National Labor Relations Act and the Employee Retirement Income Security Act, and violates the dormant Commerce Clause of the U.S. Constitution. Now the case returns to the District Court for a determination whether Jersey City’s PLA requirement is unlawful. The Court was careful to explain that its ruling has nothing to do with public construction projects, and is limited to the City’s attempted regulation of privately funded projects. Associated Builders and Contractors v. City of Jersey City, No. 15-3166 (3rd Cir. Sept. 12, 2016).

By imposing the PLA requirement on privately funded projects that sought tax abatements, the Third Circuit found that Jersey City “require[d] that an employer negotiate with a labor union and that all employees be represented by that labor union as part of the negotiations— even if the developers, contractors, and subcontractors do not ordinarily employ unionized labor and the employees are not union members.” In addition, the City’s standard PLA requires that employers and unions agree not to strike or lock-out during construction, and agree to sponsor or participate in apprenticeship programs.

The Court of Appeals found that the three laws allegedly violated by Jersey City’s ordinance — the NLRA, ERISA and the Commerce Clause — “share the same threshold requirement before their constraints are triggered: that the allegedly unlawful act by the state or local government be regulatory in nature,” as opposed to action by a market participant. The Court determined that Jersey City is not a market participant because the City “is not selling or providing any goods or services with respect to Tax Abated Projects, nor acting as an investor, owner, or financier with respect to those projects.” Invoking Supreme Court precedent, the Court rejected the City’s claim that offering tax abatements gives the City a proprietary interest in the project. The Court found that the City acted instead as a market regulator and since the ordinance strips employers and employees of the economic weapons of strikes and lockouts, and relates to employee benefit plans, the City’s ordinance may indeed be preempted by the NLRA and by ERISA. Finally, by enacting “regulatory measures designed to benefit in-state economic interests by burdening out of state competitors,” the ordinance arguably violates the dormant Commerce Clause.

Absent a request for rehearing or a petition for rehearing en banc, this case will return to the District Court for a determination whether the PLA requirements in the City’s tax exemption ordinance are enforceable. The larger questions are whether PLAs now in place on privately funded projects in Jersey City will remain in effect and, if not, whether this affects developers’ tax exemptions. Also an open question is whether the Third Circuit’s decision affects similar tax exemption ordinances in other municipalities that impose PLA requirements. Questions relating to this important decision and the path forward for developers in Jersey City and elsewhere in the state may be directed to any partner in our firm’s Labor Law Practice Group – James McGovern III, Patrick McGovern, Douglas Solomon, and John Vreeland.

Supreme Court Punts on Whether Service Advisors Are Exempt from FLSA Overtime Premium Pay

The United States Supreme Court recently issued its long awaited decision in Encino Motorcars, LLC v. Navarro. At issue in the case was whether “service advisors” employed by car dealerships are exempt from the Fair Labor Standards Act’s overtime premium pay requirement, as well as the validity of a related 2011 United States Department of Labor regulation. Unfortunately, the Court did not decide whether service advisors are exempt. Instead, the Court remanded the case to the Ninth Circuit Court of Appeals with the instruction that the Ninth Circuit decide the issue “without placing controlling weight” on the DOL’s 2011 regulation.

The issues in Encino Motorcars were rooted in a provision of the FLSA that expressly provides that “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” is exempt from the FLSA’s overtime premium pay requirement. The FLSA is silent as to whether service advisors qualify for this exemption. In 1970, the DOL issued an interpretive regulation in which it concluded that service advisors do not fall within the exemption. Several courts rejected the DOL’s interpretation, and in a 1978 Opinion Letter the DOL changed course and took the position that service advisors are exempt. The DOL maintained this position until 2011, when it issued a regulation that, without explanation, excluded service advisors from the exemption.

The Supreme Court’s opinion in Encino Motorcars arose from a Ninth Circuit decision in which the Ninth Circuit relied on the DOL’s 2011 regulation to hold that a group of service advisors were eligible for overtime premium pay. The service advisors at issue would meet with a customer, evaluate the customer’s car, suggest repairs and dealership service plans, and then send the car to a mechanic who repaired and/or serviced the car. In remanding the case, the Supreme Court found that the DOL failed to follow basic procedural requirements of administrative rulemaking, which require administrative agencies to explain their rules. The Supreme Court found this especially important here, where the DOL issued a rule contrary to its prior position. The Supreme Court was critical of the DOL for its failure to explain adequately its rationale for changing its position, and its failure to consider the public’s reliance on the DOL’s longstanding policy. Car dealerships will have to wait for the Ninth Circuit’s subsequent decision, and possibly another Supreme Court decision, before the issue of whether service advisors are exempt from the FLSA’s overtime premium pay requirement is resolved.

For more information regarding the potential impact of the Supreme Court’s decision, or regarding any other wage and hour issues, please contact John R. Vreeland, Esq. Director of the Firm’s Wage & Hour Compliance Practice Group, at 973-535-7118 or jvreeland@nullgenovaburns.com, or Joseph V. Manney, Esq. at 973-646-3297 or jmanney@nullgenovaburns.com.

Supreme Court Holds that Early Offer of Judgment Moots Nascent FLSA Collective Action

On April 16, 2013 the U.S. Supreme Court reversed the Third Circuit’s decision in Genesis HealthCare Corp. v. Symczyk and held that a Fair Labor Standards Act (“FLSA”) collective action became moot once the employer’s made a Rule 68 offer of judgment that fully satisfied the damages claims of the employee who brought the suit.

In Genesis, the employee filed an action in U.S. District Court in Philadelphia for unpaid wages under the FLSA. In her complaint, the employee claimed to represent similarly situated individuals but no one else had joined the lawsuit when the employer made a Rule 68 offer of judgment to the employee. The offer of judgment was for $7500 plus counsel fees and costs as determined by the Court. The employee did not respond to the offer of judgment and on the employer’s motion, the District Court dismissed the entire suit. The District Court found that the employee’s claim was moot since it was satisfied by the employer’s offer and, since no other parties had joined the action at that time, the complaint was dismissed.

On appeal the Third Circuit agreed that the offer of judgment was effective to have the individual employee’s claim dismissed, regardless of whether the offer was accepted, but not the collective action claims. The Third Circuit reasoned that the employer’s attempt to “pick off” the plaintiff before the collective action could be conditionally certified “frustrated” the purpose of the FLSA collective action process and remanded the case to the District Court for possible conditional certification of the collective action.

The U.S. Supreme Court reversed the Third Circuit but avoided resolving the circuit split regarding whether a Rule 68 offer of judgment can moot a plaintiff’s claim. The Court ruled narrowly that both the District Court and the Third Circuit were in agreement that the employee’s claim was moot after she received the employer’s Rule 68 offer. Then disagreeing with the Third Circuit, the Supreme Court held that, in the absence of any other claimant’s opting in, the collective action claims became moot once the employee’s individual claim became moot, because Ms. Symczyk lacked any personal interest in representing others in the action. The Court further emphasized the distinction between a class action brought under Rule 23 of the Federal Rules of Civil Procedure and an FLSA collective action. Specifically, the Court stated that conditional certification under the FLSA is not tantamount to a Rule 23 class certification because “[t]he sole consequence of conditional certification is the sending of court-approved written notice to employees . . . who in turn become parties to a collective action only by filing written consent with the court.”

In light of the Supreme Court’s decision, an employer that is named in a putative collective action in federal district court now has another option for resolving the claims early, by making a Rule 68 offer of judgment to the named plaintiff early on, before other employees and former employees opt in.

For more information about FLSA collective actions, including defending these suits, please contact Patrick W. McGovern, Esq., pmcgovern@nullgenovaburns.com, or Rebecca Fink, Esq., rfink@nullgenovaburns.com, in the Firm’s Labor Practice Group.