Articles Posted in Labor & Employment Law

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Proposition 206, “The Fair Wages and Healthy Families Act,” which increased the minimum wage and established earn paid sick leave, does not violate the Arizona Constitution’s Revenue Source Rule, Separate Amendment Rule, or Single Subject Rule. Proposition 206 was approved by the Arizona electorate in the November 2016 election. The Proposition increases Arizona’s minimum wage incrementally over a three-year period and then requires annual increases. It also requires employers to provide mandatory sick leave of one hour for every thirty hours worked. Petitioners filed suit seeking a declaration that Proposition 206 is unconstitutional and also sought to preliminarily enjoin implementation and enforcement of the Proposition. The superior court denied a preliminary injunction. Petitioner subsequently sought special action relief with the Supreme Court. The Supreme Court denied relief, holding that Proposition 206 does not violate the identified provisions in the Arizona Constitution. View "Arizona Chamber of Commerce v. Honorable Daniel J. Kiley" on Justia Law

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In this employment dispute, Employee filed an action in superior court alleging an unjust enrichment claim against Employee. Employee moved to compel arbitration under the parties’ employment contract’s arbitration provision and brought a claim for severance pay. The superior court granted the motion. Employer asserted various counterclaims. The arbitrator ruled in favor of Employer, finding that Employer properly rescinded the contract based on Employee’s underlying misrepresentations and omissions. The final arbitration award fully settled all claims and counterclaims submitted. The superior court confirmed the award but also granted Employer leave to amend its complaint to reassert its counterclaims. The superior court granted Employer’s motion to amend its complaint. The Supreme Court reversed, holding that Employer, having not specifically challenged the contract’s arbitration provision, may not amend its complaint and litigate its various claims against Employee in this action. View "Hamblen v. Honorable Ralph Hatch" on Justia Law

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The Arizona State Retirement System (ASRS) operates a defined-benefit plan for state employees and participating political subdivisions. The City of Chandler operated a deferred-compensation plan in which it contributed money for its employees and permitted employees to defer additional amounts, which were held in trust until distributed to employees, generally at age seventy and one-half. Mary Wade and Marla Paddock, City employees, filed a complaint against ASRS and others on behalf of themselves, arguing that City-contributed payments into the deferred-compensation-plan trust constituted “compensation” for the purpose of calculating ASRS contributions and benefits. The trial court entered summary judgment in favor of the City. The court of appeals reversed, concluding that the term “salary” included the City’s regular contributions to the deferred-compensation-plan. The Supreme Court largely affirmed, holding that the City’s contractually required contributions into the deferred-compensation-plan trust for the benefit of its employees formed part of their salary and was “compensation” under Ariz. Rev. Stat. 38-711(7). View "Wade v. Arizona State Retirement System" on Justia Law

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In 2011, the Arizona Legislature enacted Senate Bill 1609, which changed the Elected Officials’ Retirement Plan by changing the formula for calculating future benefit increases for retired Plan members and increased the amount that employed Plan members must contribute toward their pensions. Employed members of the Plan challenged the Bill, arguing that the unilateral changes to the benefit increases formula and to the amount they were required to contribute toward their pensions violated the Pension Clause and that the legislature could not unilaterally change the terms of their pensions to their detriment. The trial court agreed and invalidated the provisions at issue. The Supreme Court (1) affirmed the grant of summary judgment to the employed Plan members, holding that the Bill’s change to the benefit increases formula and the contribution rate violates the Pension Clause and the Court’s holding in Yeazell v. Copins; and (2) contrary to the trial court’s ruling, the employed members are entitled to attorneys’ fees and prejudgment interest, and the judgment must run against the State as well as the Plan. View "Honorable Philip Hall v. Elected Officials’ Retirement Plan" on Justia Law

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Charles Stenz suffered a workplace injury. His employer’s insurance carrier, Pinnacle Risk Management, accepted Stenz’s claim and paid the benefits. Stenz subsequently died, and his widow, Elizabeth Stenz, filed a claim for death benefits. An administrative law judge (ALJ) upheld the denial. The court of appeals set aside the award. The ALJ eventually awarded death benefits and, almost four years after Elizabeth filed her claim, entered a final order affirming the award. Pinnacle paid the benefits dating back to Stenz’s death but did not pay interest on the unpaid benefits. The ALJ concluded that no interest was owed on the death benefit before the award became final. The court of appeals set this ruling aside, concluding that the claim was liquidated as of the date Pinnacle received notice of it. The Supreme Court vacated the opinion of the court of appeals and set aside the ALJ’s award, holding that a claim for death benefits filed pursuant to Ariz. Rev. Stat. 23-1046 is a liquidated claim, and interest is owed on the claim from the date on which the carrier receives notice that a survivor has filed a claim with the Industrial Commission. View "Stenz v. Indus. Comm’n of Ariz." on Justia Law

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Linda Bell was injured at her job and underwent surgery for her injury seventeen months later. Bell requested temporary partial disability (TPD) compensation to reimburse her for the sick leave and vacation time she had used following her injury and before her surgery. The Industrial Commission of Arizona (ICA) denied the request on the ground that Bell did not had not taken time off work during the time period for which benefits were requested and that she did not miss any period of time over one week. The court of appeals affirmed on the ground that Bell failed to prove she had satisfied the waiting period created by Ariz. Rev. Stat. 23-1062(B). The Supreme Court vacated the court of appeals’ opinion and set aside the ICA award, holding (1) the waiting period for compensation set forth in section 23-1062(B) applies to claims for all types of disability including both TPD benefits and temporary total disability (TTD) benefits; and (2) section 23-1062(B) does not require proof of an initial period of TTD but does require proof of seven consecutive calendar days of some type of work-related disability before an injured employee becomes entitled to compensation for any type of disability. View "Bell v. Indus. Comm’n of Ariz." on Justia Law

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In 1985, the Arizona Legislature established the Elected Officials’ Retirement Plan (“Plan”), which provides pension benefits for elected officials, including judges. Ariz. Rev. Stat. 38-818 establishes a formula for calculating pension benefit increased for retired members of the Plan. In 2011, the Legislature enacted S.B. 1609, which modified the formula set forth in section 38-818. Two retired judges, on behalf of themselves and as representatives of a class of retired Plan members and beneficiaries, sued the Plan and its board members, alleging that S.B. 1609 violated Ariz. Const. art. 29, 1(C). The trial court ruled in favor of Plaintiffs, concluding that S.B. 1609 violated Article 29, 1(C)’s prohibition against the diminishment or impairment of public retirement system benefits. The Supreme Court affirmed, holding that because the statute diminished and impaired the Plan’s retired members’ benefits, it violated the Pension Clause of Article 29, 1(C). View "Fields v. Elected Officials’ Ret. Plan" on Justia Law

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Dudley Pounders, a New Mexico resident, was exposed to asbestos while working at a New Mexico power plant (Plant) more than thirty years ago. Dudley later moved to Arizona and, in 2008, was diagnosed with mesothelioma, a cancer associated with asbestos exposure. Dudley and his wife, Vicki, filed suit in Arizona against Defendants, including the successor-in-interest to the architect and design manager for three units at the Plant and the designer and manufacturer of industrial boilers used at the Plant. After Dudley died later that year, Vicki amended the complaint to assert claims for wrongful death. The trial court applied New Mexico substantive law to Vicki's claims, including New Mexico's statute of repose, which the court found applied to Vicki's wrongful death claim and barred the action. The court of appeals affirmed. The Supreme Court affirmed, holding that New Mexico substantive law applied to Vicki's wrongful death claim. View "Pounders v. Ensearch E&C, Inc." on Justia Law

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In this case, the Supreme Court addressed whether an employer can be held vicariously liable for an after-work accident caused by an employee who was on an extended away-from-home assignment. The accident occurred when the employee was driving back to his hotel after dinner. The trial court granted summary judgment in favor of the employer. The court of appeals affirmed, holding that an employee on out-of-town travel status is not acting within the course and scope of his employment while traveling to or from a restaurant for a regular meal. The Supreme Court affirmed, holding that because the employee was not subject to his employer's control, he was not acting within the scope of his employment at the time of the accident, and therefore, the employer was not liable for the employee's actions. View "Engler v. Gulf Interstate Eng'g, Inc." on Justia Law