Here are some more interesting cases from over the summer involving the FLSA, mandatory arbitration clauses and age discrimination:
A divided Sixth Circuit Court of Appeals reversed the employer’s summary judgment, which found that the employee was paid on a salary basis when he received over $800/week whenever he performed any work, but also $100/hour for all other work performed that week. Pickens v. Hamilton-Ryker IT Solutions, LLC., 133 F.4th 575 (6th Cir. 2025). The Court found that paying an employee a weekly guarantee of over $800/week did not constitute a “salary” when he typically worked 52 hours/week, or earned $5200/week. “To be paid on a weekly basis, we conclude, an employee must be paid for a regular week’s worth of work. . . . . A weekly salary must compensate an employee “for the general value of services performed” over the week, as opposed to merely serving as a minor auxiliary to an employee’s substantial hourly or daily pay.” In addition, “[t]he employer must not only pay a guaranteed amount to each employee each week, but that amount also must be “roughly equivalent” to the employee’s usual earnings.” The Court recognized the regulatory exception for when an employer pays a salaried employee for “extra” work – i.e., hours beyond the normal workweek – but here the employee was being paid extra for hours worked in a regular work week.
The Sixth Circuit also affirmed the enforcement of an arbitration clause in a FLSA lawsuit challenging the classification of hairstylists as independent contractors. Gavin, et al. v. Lady Jane’s Haircuts for Men Holding Co., LLC, 135 F.4th 461 (6th Cir. 2025). The plaintiffs’ contracts contained an arbitration clause, which contained language that provided that the AAA’s Commercial Rules would govern. However, the fee shifting provisions of the AAA’s Commercial Rules would cost more than the individual plaintiffs’ annual salary, making that unconscionable and unenforceable. The district court used the contract’s severability clause to sever that “provision,” making the AAA Employment rules the default provision and, thus, enforceable. The Court agreed that the contract’s severability clause could be used to sever offending provisions to make the contract and arbitration clause enforceable. The Court found that the sections of the contract were distinguishable from “provisions” within each section and the district court was not required to sever the entire section (like the arbitration clause) merely because a single provision was unenforceable. Striking the reference to the Commercial Rules also did not require the trial court to rewrite the entire arbitration clause or agreement.
The Sixth Circuit also reversed the employer’s summary judgment on an age discrimination claim. Smith v. City of Union, Ohio, 144 F.4th 867 (6th Cir. 2025). The police officer was investigated and ultimately terminated for violating several policies over a two-day period and did not have a clean performance history, but a younger co-worker who violated several of the same policies at the same time was neither investigated nor disciplined. The officer was reinstated by an arbitration with only a suspension, but the employer delayed returning him to work for six weeks. In that period, they promoted the younger co-worker over him and gave all other officers a raise for which he would not be eligible based on his reinstatement date. The Court agreed that there was sufficient evidence of pretext for a jury to consider. The officer was the oldest and longest tenured officer. The arbitrator had found that he had not violated the pursuit policy and the incorrect decision infected the termination decision, and termination was too severe for the remaining minor policy violations when a more severe violation had been treated more leniently a few years earlier. The jury could also rely on the Chief’s comment that “younger officers” did not make the same kinds of mistakes. “[A] comment by an employer can constitute circumstantial evidence of ageist intent even if it isn’t clear enough to amount to direct evidence.” There was also sufficient evidence of retaliation when the employer delayed his reinstatement until after the promotion of and raises given to younger officers. The request for a fitness for duty exam and delayed reinstatement after he passed the exam could deter a reasonable officer from filing an EEOC Charge.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
