Today’s News & Commentary — August 12, 2016
Judge Rakoff denied Uber CEO Travis Kalanick’s motion to compel arbitration in a proposed class action antitrust action last week. Uber rider Spencer Meyer is suing CEO Kalanick, who is also a registered Uber driver, on allegations of horizontal and vertical price-fixing. As part of registering to become an Uber rider, Meyer had to sign an arbitration clause with the company. Uber did not move for arbitration in the early stages of litigation, expecting to quickly get rid of Meyer’s suit. Interestingly, Judge Rakoff denied the motion to compel arbitration on the merits. He held that Uber cannot enforce the arbitration clause because there was insufficient notice of its existence provided to customers like Meyer. Uber and Kalanick are appealing the judge’s arbitration denial to the Second Circuit.
Duke, Johns Hopkins, the University of Pennsylvania, and Vanderbilt have joined M.I.T., N.Y.U., and Yale in facing suits from their employees claiming that the universities’ retirement plans charged excessive fees. All of the complaints seek class-action status for the plaintiffs. Attorney Jerome Schlichter is representing the plaintiffs in all the suits. The theory of the plaintiffs, shared by all the complaints, is that the universities excessively charged the employees by using more than one provider to operate their retirement plans when they could have used their greater bargaining power to negotiate lower fees if they had used just one provider. The suits could involve multi-million dollar damages.
A West Virginia state judge has issued a preliminary injunction against the state’s recently passed right-to-work law. The AFL-CIO, along with ten other unions, are seeking the injunction against the law, which took effect for new contracts on July 1. The unions are challenging the law on the grounds that the law is an illegal taking of union property and resources, given that the right-to-work legislation allows employees in union shops to opt out of paying dues while maintaining union benefits and representation. Heather Whitney analyzed this contention, raised in Chief Judge Wood’s Sweeney v. Pence dissent, in a previous post.
OSHA fines for violations of safety regulations increased on August 1, 2016. These are the first increases since 1990. The new maximum penalties for various offenses have increased by 78%; further, the penalties will be annually adjusted in response to inflation. OSHA was previously exempted from laws that required federal agencies to adjust their fines according to inflation.