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April 2018 Archives

DOL Issues First Opinion Letters in Nearly a Decade - FLSA2018-19

For the first time in nearly a decade, the Wage and Hour Division of the U.S. Department of Labor issued several Opinion Letters, including one addressing the compensability of fifteen minute rest breaks required every hour due to a non-exempt employee's serious health condition under the Family and Medical Leave Act ("FMLA").

Fraudulent Transfer Act is a Statute of Repose in California

In PGA West Residential Assoc., Inc. v. Hulven International, Inc., 14 Cal.App.5th 156 (2017), the California Court of Appeal reversed the Riverside County Superior Court and held that the California Uniform Fraudulent Transfer Act is a statute of repose (meaning that the time to file runs from the occurrence of some event other than the injury which gave rise to the claim). As such, if no action is brought within 7 years of the transfer, the transferee/transfer is entirely insulated. The Court held that to be true even in Hulven where the transfer at issue was the recording of a deed of trust in favor of the Debtor's corporation that had not been formed and did not exist at the time.

An Employee's Prior Salary Cannot Justify a Wage Differential Between Male and Female Employees

In Rizo v. Yovino, 2018 U.S. App. LEXIS 8882 (April 9, 2018), the en banc court held that "prior salary alone or in combination with other factors cannot justify a wage differential. To hold otherwise - to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum - would be contrary to the text and history of the Equal Pay Act and would vitiate the very purpose for which the Act stands."

Equitable Tolling in Bankruptcy for Debtor's Bad Behavior

The Ninth Circuit Court of Appeals in In re Charlene Milby, Nos. 16-60022 and 16-60023, reversed the bankruptcy court and affirmed the BAP's decision, but on other grounds, to hold that the two year statute of limitations for avoidance actions could be equitably tolled based on the debtor's bad behavior, even when the trustee learned of the avoidance action before the running of the two year statute of limitations. In Milby, the debtor fraudulently conveyed assets before her bankruptcy filing and did not disclose the transfers in her bankruptcy. Just a few days before the expiration of the SOL, some of the debtor's creditors learned of the transfers and advised the debtor's trustee. The trustee did not file an action to avoid the transfers but the creditors did so almost a year later, after the trustee agreed to the creditors being appointed to challenge the transfers.

Supreme Court Determines Scope of Section 546(e) Safe Harbor Provisions

On February 27, 2018, in an opinion by Justice Sotomayor, the Supreme Court of the United States unanimously decided Merit Management Group, LP v. FTI Consulting, Inc. No. 16-784, holding that the only relevant transfer for purposes of the 11 U.S.C. § 546(e) securities safe harbor provision is the transfer that the bankruptcy trustee seeks to avoid, and not the component parts of the transfer.

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