Ninth Circuit Allows FEHA National Origin Claim

Raytheon Company is a defense contractor. The federal government required Raytheon to require security clearances.

Raytheon hired Hossein Zeinali for an enginerring position requiring a Secret security classification. While he was waiting for the security clearance, Raytheon let him perform other duties not requiring the Secret authorization.  Ultimately, the Department of Defense denied the security clearance. So, Raytheon fired him.  Zeinali sued for national origin discrimination.

The Ninth Circuit first held that it had jurisdiction, rejecting Raytheon's contention that there was none because federal courts cannot second-guess denials of security clearances.  Although federal courts indeed cannot overturn determinations about security clearances, that is not what Zeinali was suing about. He did not contest that he was rejected. Rather, he argued that Raytheon's decision to fire him because he did not meet the job qualification - obtaining the clearance - was pretextual.

The court agreed with Zeinali. He produced evidence that although Raytheon consistently said he would have to have a security clearance to retain his job, and although Raytheon imposed this requirement on many employee positions, Raytheon did not always enforce the requirement:

In light of the fact that Raytheon retained multiple non-Iranian engineers after their security clearances were revoked, Zeinali has raised triable disputes regarding (1)whether security clearances were a bona fide requirement for Raytheon engineers, and (2) whether Raytheon’s central purported reason for terminating him (his lack of a security clearance) was pretextual. The Supreme Court’s McDonnell Douglas opinion contains a salient observation about pretext:

“Especially relevant to such a showing [of pretext] would be evidence that white employees involved in acts against [the employer] of comparable seriousness to the [plaintiff’s disruptive protesting activities] were nevertheless retained or rehired. [An employer] may justifiably refuse to rehire one who was engaged in unlawful, disruptive acts against it, but only if this criterion is applied alike to members of all races.” McDonnell Douglas, 411 U.S. at 804.

Analogously, in the present case, Raytheon would certainly be justified in firing employees who lack security clearances, “but only if this criterion is applied alike to members of all races.” Id.; see also Godwin v. Hunt Wesson, Inc., 150 F.3d 1217, 1220 (9th Cir. 1998) (holding that pretext is shown if other employees with similar qualifications are treated more favorably).

So, here's a message you may have heard from an employment lawyer.  Consistency. There, no charge.

The case is Zeinali v. Raytheon Company and the opinion is here.

U.S. Supreme Court on FLSA Retaliation

The U.S. Supreme Court held that the Fair Labor Standards Act's anti-retaliation provision covers oral and written complaints, whether internal or to the government.  So, here's some invaluable and insightful advice: don't retaliate against employees who complain about alleged wage and hour violations. Try not to decide whether to retaliate based on if a complaint is oral or written, mmmkay?

In a nutshell, Kasten claimed he complained to management and other employees about the location of the time clocks at the St. Gobain factory. Because of the time clock's placement, he did not get paid for "donning and doffing" time.  The company allegedly fired Kasten for not keeping his time card correct. Kasten claimed it was retaliation for his complaints. The district court dismissed the case because Kasten had not "filed" a written complaint with the government and, therefore, was not covered by the anti-retaliation provision in the FLSA.  The Supreme Court took time out of its busy day to resolve a dispute among the lower circuit courts over whether a written complaint was required.

The case is Kasten v. St. Gobain Performance Plastics, Inc., and the opinion is here.

Ninth Circuit Defines FMLA Interference Claim

Hello, it's been a while. I've missed you.  You never write. You never tweet. Alas. But I press on to write about the FMLA.

Diane Sanders worked for Newport, Oregon. She took an FMLA leave. Her doctor believed the air quality at work was poor and she suffered from certain chemical sensitivities. The Oregon OSHA and the city's own experts found the air to be within legal standards. After receiving an extended FMLA, her doctor released her to return to work provided the City stop using "low grade" paper, which the City apparently agreed to do.

The City refused to reinstate Sanders from her leave. The City took the position that it could not provide her with a safe workplace because it was not clear what caused her medical issues.

A jury found that the City acted lawfully. But the trial court found in Sanders' favor on a state law claim under Oregon's family leave law.  Oregon claims are tried to the court rather than a jury.

The Ninth Circuit explained there are two types of FMLA claims: discrimination/retaliation and interference.  Sanders pursued an interference claim at trial.  The court explained the applicable legal analysis:

The Sixth and Seventh Circuits have ably summarized the elements of an employee’s prima facie case where the employer fails to reinstate the employee:“the employee must establish that: (1) he was eligible for the FMLA’s protections, (2) his employer was covered by the FMLA, (3) he was entitled to leave under the FMLA, (4) he provided sufficient notice of his intent to take leave, and (5) his employer denied him FMLA benefits to which he was entitled.”  [citations] We agree with this approach. In interference claims, the employer’s intent is irrelevant to a determination of liability.. . .

The court then went on to hold that if the employee makes out a prima facie case, the employer bears the burden of establishing that the employee was not entitled to reinstatement. That is, the employer must prove that the employee was denied reinstatement for one of the reasons authorized by the FMLA, such as that the employee would not have remained employed if she had not taken leave.  Because the district court's jury instructions required the plaintiff to prove she was denied reinstatement "without reasonable cause," the court vacated the judgment in the City's favor.

The case is Sanders v. City of Newport and the opinion is here.

Ninth Circuit: Ban on Applicants Who Test Positive for Drugs Not ADA Violation

The Pacific Maritime Association has a "one-strike" rule. If you fail a drug or alcohol test during the applicant screening process, you are barred from consideration for employment. Forever.

Santiago Lopez applied for a longshoreman's job, but he tested positive for marijuana. He claims that when he applied, he was addicted. But once he become a recovering addict, he was entitled to reapply with the protections of the ADA.

The Ninth Circuit disagreed, upholding summary judgment. The court said that the one-strike rule applies to anyone who fails a drug/alcohol test, not just addicts or recovering addicts. The employer also had no knowledge that Lopez was a recovering addict, only that he previously had failed the test.

A dissenting judge in this 2-1 opinion would have given Lopez a chance to save his disparate impact claim. Lopez argued that a rule barring all persons from re-applying could have a "disparate impact" on recovering alcoholics/drug abusers. But Lopez did not support that argument with statistical proof and, therefore, the court did not allow the claim to proceed.

The case is Lopez v. Pacific Maritime Association and the opinion is here.

U.S. Supreme Court Grabs Cat's Paw

There goes Justice Scalia again, ruling for... employees!  Writing for a 6-2 majority, Justice Scalia says:

When the company official who makes the decision to take an adverse employment action is personally acting out of hostility to the employee’s membership in or obligation to a uniformed service, a motivating factor obviously exists. The problem we confront arises when that official has nodiscriminatory animus but is influenced by previous company action that is the product of a like animus in someone else.

Basically, two lower level supervisors were hostile towards Vincent Staub, an xray tech at a hospital. they were annoyed at his reserve duty, which caused absences that had to be covered.  As a reservist, Staub was entitled to job protection under USERRA.  USERRA protects against discrimination against members of the military, basically under the same standards as Title VII.  Thus, if anti-military bias is a "motivating factor" in a negative employment decision, the plaitniff can win.

Here, a non-biased manager fired Staub, but based on a report by the biased supervisors.  The hospital argued that discrimination was therefore not a motivating reason.   This presented a "cat's paw" theory, where the employer claims that the innocent supervisor's decision is independent from the biased supervisor's motivations.

The Supreme Court held:

that if a supervisor performs an act motivated by anti military animus that is intended by the supervisor to cause an adverse employment action,3 and if that act is a proximate cause of the ultimate employment action, then the employer is liable under USERRA

The court did say that the biased supervisor has to have some causation for the negative employment decision or the "motivating reason" standard fails.

Bonus: Those of us unfamiliar with Aesop now know the meaning of the "Cat's Paw" theory.

1The term “cat’s paw” derives from a fable conceived by Aesop, put into verse by La Fontaine in 1679, and injected into United States employment discrimination law by Posner in 1990. See Shager v. Upjohn Co., 913 F. 2d 398, 405 (CA7). In the fable, a monkey induces a cat by flattery to extract roasting chestnuts from the fire. After the cat has done so, burning its paws in the process, the monkey makes offwith the chestnuts and leaves the cat with nothing. A coda to the fable (relevant only marginally, if at all, to employment law) observes that the cat is similar to princes who, flattered by the king, perform serviceson the king’s behalf and receive no reward.

Although this is a USERRA case, given the similiarities with anti-discrimination laws, look for this theory to be applied in Title VII cases as well

The case is Staub v. Proctor Hosp. and the opinion is here.

Court of Appeal Limits' Employers' Discretion to Set the Workweek/Workday

The employees at Metson Marine, Inc. worked 14-day straight "hitches," during which they slept on their ships and had to remain within 30-45 minutes of the ship during downtime. These 14-day hitches started on Tuesdays. But the workweek was set as Monday at 12:01 a.m. through Sunday at 11:59 p.m.  As a result, Metson claimed that employees worked a six-day week, followed by a 7 day workweek, and then a two day workweek. 

The plaintiffs challenged the employer's designation of the workweek because it resulted in a less favorable calculation of overtime and of seventh day pay.  The employer relied on certain rulings by the Division of Labor Standards Enforcement, which basically say that the employer can designate any workweek or workday that it wants to, as long as it's consistent.

Surprise, Metson! The Court of Appeal, reversing summary judgment, held that the DLSE's interpretations are entitled to no respect. Rather, a workweek must coincide with the beginning of the work period actually worked:

Plaintiffs contend that premium pay must be calculated based on the "fixed and regular" schedule actually worked and that Metson should not be allowed to subvert the employee protections of section 510 by designating an artificial workweek that does not correspond with the period actually worked. Asserting that their workweek actually began and ended on Tuesday, plaintiffs argue that Metson was required to pay overtime wages for work performed on the seventh and 14th day of each hitch. We agree.

Relying on a federal district court opinion, the Court of Appeal held that the employer cannot set a workweek that differs from the workweek that employees actually work.

Much like the case before this court, the employer in In re Wal-Mart Stores, Inc. relied on the DLSE‟s interpretation of section 500 that " „[t]he beginning of an employee‟s workday need not coincide with the beginning of that employee‟s shift, and an employer may establish different workdays for different shifts.‟ " (In re Wal-Mart Stores, Inc., supra, 505 F.Supp.2d at p. 617.) The court rejected the DLSE interpretation, noting that "the California Supreme Court has held that interpretations contained in the DLSE Manual are non-binding and are entitled to no deference. (Tidewater Marine Western, Inc. v. Bradshaw, supra, 14 Cal.4th at p. 568.) Therefore, to the extent that the DLSE‟s opinion . . . is inconsistent with the Labor Code‟s goal of promoting employee protection, this opinion should be ignored." (In re Wal-Mart Stores, Inc., at p. 617.)

But it's unclear whether the Court of Appeal intends its holding to apply to worksites where employees work from week to week and have different work different days off every week. If an employer sets the workweek from 12:01 a.m Monday to 12:00 p.m. Sunday for all employees, what happens when some employees have Mondays off? What if employees sometimes have Mondays off, and sometimes Tuesdays? Does the employer have to set a different workweek for each employee each week? Also, what happens when employees report to work at different times? When does the workday start? What if the employee is late to work on the first day? Must the workday begin late just to ensure that the employee receives the maximum potential overtime pay? Hopefully, the court will re-consider the breadth of its holding in a petition for re-hearing, or maybe will be depublished..


The court also dealt with "on call" pay. The employees were on for 12 hours and off for 12 hours during the hitches. They rarely were called back to work for emergencies. However, they had to remain within 30-45 minutes of the ship, and could not drink. They also were required to sleep on the ship. On those facts, the court decided that the requirement of sleep on the shift turned all of the down time (less an 8-hour period for sleeping) into hours worked. The court excluded the 8 hours of sleep time on the basis of an agreement between the employer and employees. Unless your business requires employees to sleep on premises, this case probably won't result in a change in the law on this point. However, if you want to exclude sleep time from hours worked when employees are required to sleep on premises, have an agreement. 
 The case is Seymore v. Metson Marine, Inc. and the opinion is here.

California Supreme Court Holds No Arbitration in Lieu of Labor Commissioner Hearing

The California Supreme Court decided that an employer cannot require an employee to go to arbitration instead of a "Berman" hearing before the Labor Commissioner.  Rather, the employee must be permitted to go to the labor commissioner and then the arbitration agreement can be used for the "appeal" de novo.
This 4-3 decision involves lengthy discussions of preemption and unconscionability. 

The majority, led by retiring Justice Moreno, finds that the waiver of the labor commissioner hearing deprives the employee of so many benefits that the arbitration agreement violates public policy.  The U.S. Supreme Court may take a look at this one under the Federal Arbitration Act.  Until then, though, employees get to see the Labor Commissioner, even if they have arbitration agreements.

The case is Sonic-Calabasas A, Inc. v. Moreno and the opinion is here.

Court of Appeal: Meals and Breaks are Penalties for Attorneys Fees Law

Did you know the Labor Code permits employers to recover attorney's fees when the employer wins certain wage claims?  It's true.

Labor Code section 218.5 contains a reciprocal fee recovery provision in favor of the "prevailing party" in certain wage disputes. Section 218.5 states, in relevant part: "In any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions, the court shall award reasonable attorney‟s fees and costs to the prevailing party if any party to the action requests attorney‟s fees and costs upon the initiation of the action. . . . [¶] This section does not apply to any action for which attorney’s fees are recoverable under Section 1194."

 In light of the last sentence, claims involving "overtime" are not subject to this fee statute, but rather section 1194.  That is a "one way" fee provision that precludes employers from recovering fees even when they win claims for unpaid overtime.  Thus, the Court of Appeal decided that UPS could not recover attorney's fees when it won a lawsuit by a single plaintiff challenging his exemption.

But what if the complaint alleges unpaid overtime AND other wage claims.  The Court of Appeal decided that fees MAY be recovered by employers relating to the non-overtime-related claims.  But then things got weird.

In United Parcel Service Wage and Hour Cases, the court dealt with Thomas McGann's individual claim, which not only involved overtime, but also meals and breaks.  UPS sought its fees when it prevailed on the meal and break portion of the case. 

Section 218.5 applies only to "wage" claims.  Rather than award UPS the fees, the Court of Appeal held that meal and rest period penalties are penalties for purposes of the attorneys' fees statute permitting employers to recover attorney's fees for unsuccessful suits to recover wages.  But wait. I thought the California Supreme Court said that meal period penalties were wages for the purposes of the statute of limitations.  You're right.  The Supreme Court did so in the Murphy v. Kenneth Cole case, discussed here.

But the Court of Appeal decided that Murphy does not apply because it did not address attorney's fees, but rather which statute of limitations should apply.

UPS contends Murphy establishes that an action for recovery of the statutory remedies for missed meal and rest breaks is a claim for “nonpayment of wages” within the meaning of Labor Code section 218.5. UPS offers no analysis to support its contention that Murphy, which decided a statute of limitations question under the Code of Civil Procedure, should control or guide our analysis of the Labor Code attorney fees provisions. We are not persuaded that extending the holding in Murphy to the discreet fee issue presented here is appropriate or in keeping with our duty to construe statutes regulating the conditions of employment liberally, “with an eye to protecting employees.” (Murphy, supra, 40 Cal.4th at p. 1111; accord, Ramirez v. Yosemite Water Co. (1999) 20 Cal.4th 785, 794.)

Recognizing that the statutory remedy for denial of breaks -- payment of one additional hour of regular pay for each day a break is denied -- was susceptible to an interpretation as a wage and also as a penalty, the Supreme Court in Murphy found the remedy provided in Labor Code section 226.7 was primarily intended “to compensate employees for their injuries” occasioned by missed breaks and was, therefore, akin to a wage for purposes of assigning the appropriate statute of limitations. (Murphy, supra, 40 Cal.4th at p. 1111.) The court therefore gave employees the benefit of the three-year statute of limitations. However, nothing in the Murphy opinion suggests the court intended its decision to permit a prevailing employer-defendant in a section 226.7 action to recover attorney fees from the unsuccessful employee. To so find would undermine the Supreme Court‟s heavy reliance in its analysis on the principle that statutes governing working conditions must be liberally construed in favor of employees.

So, the court instead decided that section 218.5 permits employers to recover attorney's fees when wage claims are based on contractual wages, such as unpaid bonuses, rather than wages - such as meal period penalties- that are required by statute. I guess vacation pay disputes won't result in awards of attorneys' fees either now?
 
Sorry - but if Murphy held that meal periods are subject to the limitations period applicable to wages not penalties, then Murphy said that meal and break penalties are wages. Since 218.5 applies to "wages" and not just "contractual-based wages" the court giveth something to the statute, and taketh away from employers.
 
The case is United Parcel Services Wage and Hour Cases, and the opinion is here.

Court of Appeal: Union Representing County Employees Entitled to Contact Information of Non-Union Members

To facilitate union organizing and collective bargaining, the union representing LA county employees wanted the county to disclose the names and addresses of employees who opted not to be represented by the union. These employees paid an "agency" fee, lower than union dues, but were not full fledged members.

Reviewing the case, the court of appeal decided that the county must disclose the information, but first must give the employees the right to "opt out" of the disclosure, similar to the law that applies in class action discovery:

Pioneer Electronics because there is no underlying presumption these non-member County employees would want their personal information disclosed, as might be the case in class-action litigation in which the disclosure might lead to affirmative relief or the vindication of statutory rights. Rather, the opposite is true. As in Valley Bank, employees would assume the personal information they provided to their employer as a condition of employment would not be further disseminated. While there may be a parallel between union representation and class representation, we cannot assume these non-member County employees would perceive a benefit to having their personal information disclosed to the Union. These County employees, whether by inaction or action, are not Union members, and they have a right not to join the Union. The non-members‟ failure to voluntarily provide their personal information to the Union might indicate their desire not to join the Union, indifference, or simply a desire not to be bothered at home by unwanted mail and telephone calls.

we hold non-member County employees are entitled to notice and an opportunity to object to the disclosure of their personal information. The privacy concerns here are more significant than in

The court rejected the union's argument it was entitled to the information regardless of the employees' objection.

The case is County of LA v. LA County Employee Relations Commission and the opinion is here.

Court of Appeal: Reporting Time Pay and Discharge

The Court of Appeal addressed California's "reporting time" pay requirement in the context of discharge. 
First it explained "reporting time" pay in the Wage Orders.

Section 5(A) of Wage Order Number 5-2001 states: “Each workday an employee is required to report for work and does report, but is not put to work or is furnished less than half said employee‟s usual or scheduled day‟s work, the employee shall be paid for half the usual or scheduled day‟s work, but in no event for less than two (2) hours nor more than four (4) hours, at the employee‟s regular rate of pay, which shall not be less than the minimum wage.” (Cal. Code Regs., tit. 8, § 11050, subd. 5(A).)

The employee was called in for an unscheduled day to be fired. The company paid the employee 2 hours, but the employee wanted four hours' pay.  The Court of Appeal held that only two hours of reporting time pay was due.  In explaining why, the court will help employers in the case of meetings that are scheduled on employees' days off.

If an employee is required to work, reports to work, and is not put to work or does not work half of the employees‟ usual or scheduled day‟s work, the employee is paid a half-shift reporting wage not to exceed four hours. (Cal. Code Regs., tit. 8, § 11050, subd. 5(A).) If an employee is not scheduled to work or does not expect to work his usual shift, but must report to work for a meeting, the employee falls into the regulatory category of those employees called to work on their day off for a scheduled meeting. Price was entitled to the minimum payment, which is what he received.10

* * *

We do not agree with Price that he is entitled to receive more than the two-hour minimum; he did not report to work with the expectation that he would work a scheduled shift, but rather was scheduled to attend a meeting for an unspecified number of hours. Nor do we agree with Price that the term "usual" in the statute means the average of his previously scheduled days‟ worked during his employment at Starbucks. Rather, the term "usual" refers to the employee‟s expectation of the hours in the customary workday, just as, in the alternative, a scheduled work day formalizes the expectation of the hours worked. During his employment, Price's expectations of hours worked was solely based upon his scheduled hours. Price was not scheduled to work on November 16, and his expectation was he had been called to work for a meeting on his day off. He did not lose any pay because of a scheduling error. He was paid for reporting to the meeting consistent with the reporting time pay regulation.

This case also is very good because it, once again, says you have to have an actual injury to recover on a wage statement claim.  No injury, no money.  And a missing piece of information is not an injury.

The case is Price v. Starbucks Corp. and the opinion is here.

Court of Appeal: Up to 2 Meal / Rest Period Penalties Per Day

The Court of Appeal in UPS v. Superior Court decided that when an employee claims to have been denied both meal AND rest periods in a single day, s/he may recover two of the one-hour penalties made available under Labor Code Section 227.6.  So, one penalty is available for however many meal periods are denied in a day, and a separate penalty is available for however many rest periods are denied.
The case is UPS v. Superior Court and the opinion is here.

Court of Appeal Upholds the Denial of Meal Period Class Action

While the world waits for the California Supreme Court to issue the fabled Brinker decision on meal periods, the courts of appeal continue to find that employers need only make available meal periods, and not force them. 

The latest opinion involves a class action over meal and rest breaks and wage statements. The trial court found that the company took great measures to provide meal breaks and that, therefore, it would be impossible to have a class claim over denial of same. The court also held that wage statement claims require proof of actual injury, which is another subject that the California Supreme Court is considering.

I don't see anything new here for HR to be concerned with. There is a heady discussion of when courts can rely on precedent that is subsequently "de-published," but that's only good for procedure geeks like moi.

This opinion is in Tien v. Tenet Healthcare and it is available here.

Ninth Circuit: Pharmaceutical Sales Representatives are Exempt under FLSA

The plaintiffs in Christopher v. SmithKline Beecham Corp. were pharmaceutical sales representatives. They visit doctors on behalf of the company and attempt to persuade the doctors to prescribe their particular drugs to patients.  The company argued that these employees were exempt as "outside sales." The employees argued they were not sales persons, primarily because the patients themselves were the buyers, not the doctors.

The Ninth Circuit disagreed, holding that pharmaceutical sales reps obtain "sales" by convincing a doctor to agree to prescribe the product (a non-binding commitment).

The case is interesting for two reasons. First, the court explains what kinds of activities the outside sales exemption covers, and there is not much case law on this in the Ninth Circuit. In particular, there is a lengthy discussion about the difference between "selling" and "promoting."  The former is exempt and the latter is not. Second, the court refused to follow the US Department of Labor's current position on the exemption, which carried the day in another case in the Second Circuit.  In re Novartis Wage & Hour Litig., 611 F.3d 141 (2d Cir. 2010).

California law should follow the FLSA outside sales exemption. So this case may be helpful in California cases as well.  But, as the Novartis case shows, the US DOL and some courts do not agree that pharmaceutical salespersons are exempt, so keep that in mind.

The case is Christopher v. SmithKline Beecham and the opinion is here.

Medical Pot at Work - It's Back!

The California state senate apparently is taking up another attempt to stop "discrimination" against the stoned at work.  (Yes, there are some exceptions, e.g., they can't be too stoned - impaired - or work at a safety sensitive job). Just read the bill....The text of SB 129 is here.

Like the failed Prop 19, which the voters rejected last year, this bill is too vague and makes it harder for employers to fire people who come to work buzzed than it is to fire people who come to work drunk.  There, I said it.  Unlike Prop. 19, this bill allegedly applies only to "medical marijuana" users, not recreational users.

For the record, I have nothing against pot, medical marijuana, caring cannabis, or wacky weed.  I don't care if pot is legal or illegal.  But I care if people are stoned when making my dinner, caring for my relative in the hospital, fixing my car, or doing my books, etc. The new bill is too solicitous of pot smokers.  Sorry to harsh your mellow.


DGV

Follow us on Twitter.

And that's an order. Ok, not really.  Anyway, I'm not sure why an employment lawyer needs to be on Twitter.  I guess it's a way for me to "blog" in fewer than 200 characters, without the guilt. Or the grammar.  And then there's the really significant reason. It justifies an iPad 2.0 when it comes out. One cannot tweet effectively without a sleek, shiny Apple product.

Anyway, I'm going to try to tweet about employment law-related articles, announcements by other tweeting employment law-related government agencies, new cases, etc.  And of course I'll "retweet" everything by Justin Bieber, whoever he is.  Who says I'm old and out of touch?  Oh. Right. I do.

We'll still blog about more in-depth analyses of employment law cases, too.  So, please do not despair if you're not part of the twittering horde. 

But if you ARE in our super cool club of twittering employment law-lovers, please follow us on Twitter and do your bit to make us the 3,000,000th most popular member.  OK, it's a stretch goal.  You can sign up here: 

Greg

Court of Appeal: Sexual Harassment Claim Untimely

You have to file an administrative charge with the Department of Fair Employment and Housing within a year of the last act about which you claim is harassment, discrimination, or retaliation. So, when Irene Trovato testified at her deposition that the last time Michael Allyn harassed or retaliated against her was January 31, 2007, the charge she filed on May 8, 2008, was untimely.

In opposition to her employer's and Allyn's summary judgment motion, she submitted a declaration under penalty of perjury in which she said that the harassment continued until she left her employment in May 2007 (which would have rendered her charge timely fled). But, she contradicted her clear deposition testimony, which you cannot do.
Then, Trovato claimed the "continuing violation doctrine," which has gutted the statute of limitations in these types of cases, rendered her claim timely.  But the court of appeal said the doctrine did not apply:

 The case is Trovato v. Becton Coulter, Inc. and the opinion is here.

Trovato also argues that she still reported to Allyn after January 31, 2007, until she resigned in May 2007, and that this assignment alone—without any other evidence—was sufficient to constitute harassment or retaliation. There is no authority for this argument, and its acceptance would extend the statute of limitations indefinitely.

The conclusory statements in Trovato’s declaration are not sufficient to raise a triable issue of material fact on the statute of limitations issue, and she cannot defeat the grant of summary judgment by contradicting her sworn deposition testimony on material points in a later-filed declaration. (Shin v. Ahn (2007) 42 Cal.4th 482, 500, fn. 12; D’Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 22; Whitmire v. Ingersoll-Rand Co. (2010) 184 Cal.App.4th 1078, 1087.)

California Court Again Holds California Pro-Picketing Law is Unconstitutional

The Third District Court of Appeal previously held that California's statutes prohibiting courts from enjoining most union picketing are unconstitutional. See my earlier post here.  The California Supreme Court granted review in that case.

Now the Fifth District Court of Appeal has held the same thing, and involving the same employer, Ralphs Grocery, albeit at a different location.  Money quote:

Laws which prohibit speech based on its content — or, in this case, based on the failure of the speech to address a "labor dispute" — are presumptively invalid. (Simon & Shuster, Inc. v. Members of N.Y. State Crime Victims Bd. (1991) 502 U.S. 105, 116.) Such laws are permitted only if they serve a compelling state interest and are narrowly drawn to accomplish that interest. (Mosley, supra, 408 U.S. 92, 95.) The desire to provide the broadest forum for expression in labor disputes is not a compelling state interest. (Carey v. Brown, supra, 447 U.S. 455, 466.)
We conclude the state may not act to selectively create a free speech right applicable only to the few, while excluding all others, in the absence of a compelling state interest. As a result, we hold that the Moscone Act and Labor Code section 1138.1 contravene the free speech provisions of California Constitution article I, section 2, by discriminatorily conferring speech rights on some, but not all, Californians without a compelling state interest.

Read this one quickly because the Supremes likely will take it up along with the earlier Ralphs case.
The case is Ralphs Grocery Co. v. UFCW Union Local 8 and the opinion is here.

Ninth Circuit: WARN Act Opinion

The WARN Act requires companies to give at least 60 days' notice of shutdowns and mass layoffs that affect a certain number of people.  For example, to be covered, a "mass layoff" must involve an "employment loss" for a group comprised of at least 50 employees who constitute at least 1/3  of the workforce. 

The thing is, the law and regulations contain a number of exceptions and special definitions regarding who is an employee, who counts as a layoff, etc. There are so many moving definitions and exceptions, it is impossible (or maybe just dumb) to give WARN advice "off the cuff."

One of the key definitions is "employment loss" because that's how you tell how many employees are affected by a layoff or shutdown.  If < 50 employees have suffered an "employment loss" then federal WARN is not triggered.

So, in Collins v. Gee West, the employer was looking for a buyer and gave less than 60 days' notice of a shutdown.  Collins and other sued for the WARN damages due for failure to give 60 days' notice.
But the Company's notice was that the shutdown would occur on October 7. By that date, all the employees had quit for other employment.  The Company argued that these employees voluntarily departed before the October 7 shutdown date. Having voluntarily departed, they did not suffer an employment loss.

The district court bought that argument and granted the employer's motion for summary judgment. On appeal, not so much. The Ninth Circuit held that when folks leave employment after being told the business is going to shut down, that is not a "voluntary departure" exception to the "employment loss" definition. As the court pointed out, if that were the case, then the only way to tell whether a WARN notice was due would be after the fact.  So, the employer must reasonably calculate how many employees are anticipated to be affected by the employer's layoff or shutdown decision. The fact that an employee does not wait to the last day to leave does not eliminate the requirement of counting that employee as part of the layoff.

I figured there would be a discussion of the defenses to inadequate notice like the "faltering company" exception. Maybe next time.

The case is Collins v. Gee West and the opinion is here.


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Court of Appeal Upholds Wage Statement Penalties

So, several employees of Heritage Residential Care, Inc. "lacked social security numbers."  Naturally, the employer immediately fired them. 

No, silly, the employer re-classified them as independent contractors!   Because, after all, without social security numbers, the employer could not withhold taxes. And you have to withhold an employee's taxes.  But you don't have to withhold an independent contractors!  Brilliant! 

As you can imagine, since this has come to my attention over here, the employer's deft maneuver did not end well. Employees sued for penalties, among other things, because the employer did not provide adequate "wage statements" per Labor Code section 226. 

After losing before the Labor Commissioner, they sought review on whether the failure to issue compliant wage statements was "inadvertent."  If so, Section 226.3 permits the Labor Commissioner to take that into consideration in deciding whether to assess the penalties.

No sale. After a painstakingly thorough analysis of the meaning of "inadvertence," the court of appeal decided it simply means that it was unintentional.  Here, the employer intentionally chose to issue 1099 forms to these employees, because they lacked social security numbers. 

Therefore, employers who intentionally issue defective wage statements, or who skip issuing them on purpose, will not qualify for the statutory leniency built into Labor Code section 226.3. 

The case is Heritage Residential Care, Inc. v. DLSE and the opinion is here.

U.S. Supreme Court Recognizes Third-Party Retaliation Claims

Justice Scalia for a unanimous Supreme Court wrote that employees may claim retaliation when they are associated with someone ELSE who engaged in protected activity.  What?

Miriam Regalado was engaged to Eric Thompson. They both worked for North American Stainless.  So, Miriam filed a charge with the EEOC alleging sex discrimination. NAS fired Thompson three weeks later. 

Thompson then filed a retaliation charge. But Thompson did not actually engage in protected activity. Regalado was the one who filed with the EEOC. 

So, was it retaliation under Title VII to fire Thompson?  The Supreme Court said yes. Relying on the Court's expansive definition of retaliation set forth in Burlington N. & S. F. R. Co. v. White, 548 U. S. 53 (2006),the court said:

“the antiretaliation provision, unlike the substantive provision, is not limited to discriminatory actions that affect the terms and conditions of employment.” Id., at 64. Rather, Title VII’s antiretaliation provision prohibits any employer action that “well might havedissuaded a reasonable worker from making or supporting a charge of discrimination.” Id., at 68 (internal quotation marks omitted).

And of course, they found that firing a fiance "well might have dissuaded" the complainant from making or supporting a charge: NAS argued, where do you draw the line?  Trusted co-worker? Girlfriend? What third parties are close enough to the complainant.  The Court could not find any language in Title VII to support setting down a blanket rule.
 

We must also decline to identify a fixed class of relationships for which third-party reprisals are unlawful. We expect that firing a close family member will almost always meet the Burlington standard, and inflicting a milder reprisal on a mere acquaintance will almost never do so, but beyond that we are reluctant to generalize.

The court next decided that Thompson had standing to sue under Title VII because he was a "person aggrieved."  The Court knew it was opening a can of worms to let third parties sue. So, it limited Title VII standing to those covered by the "zone of interests" Title VII seeks to protect.  Thompson was an employee at the same company as his fiance, and, most importantly, according to the complaint, the company fired him for the purpose of hiring the fiance who filed the charge.
 
The case is Thompson v. North American Stainless Inc. and the opinion is here.
DGV

U.S. Supreme Court Upholds Background Check Questions

The U.S. Supreme Court ducked deciding whether the U.S. Constitution protects individuals' right to privacy in personal information.  Instead, they "assumed" that there was such a protection and then decided that NASA's background questions were constitutional no matter what.  This provoked a concurrence in the judgment only from Justice Scalia (and another, short one from Justice Thomas), as both of them wanted the court to decide the constitution contains no such right.

The employment law issue here is whether NASA's questions were appropriate issues to ask applicants and employees. Most federal government employees are subjected to a standard background check. But contract employees were only recently added, following the 9/11 attacks.  NASA employed a number of contract employees at its Jet Propulsion Lab, and had to implement the checks for current employees, some of whom were employed for many years.

The questions included standard background information, but then asked about drug use, sales, etc., and asked for explanations if the employee admitted to involvement with illegal drugs.  After the employee answered the questions, the agency sent out questionnaires to landlords and references on a standard form. That standard form contains a number of questions to which plaintiffs objected:

the form asks if the reference has "any reason to question" the employee’s "honesty or trustworthiness." Id., at 97. It also asks if the reference knows of any "adverse information" concerning the employ. If "yes" is checked for any of these categories, the form calls for an explanation in the space below. ... That space is also available for providing "additional information" ("derogatory" or "favorable") that may bear on "suitability for government employment or a security clearance." Ibid.

The Ninth Circuit held that the request for an explanation by the employee about drug treatment or counseling did not serve a legitimate interest sufficient to overcome the employee's privacy rights. The court of appeals also decided that the reference forms contained open ended questions that infringed on privacy rights without sufficient linkage to the job.

On review, the Supreme Court decided that these questions do not infringe upon privacy rights even if they were protected by the Constitution:

The questions challenged by respondents are part of a standard employment background check of thesort used by millions of private employers. See Brief for Consumer Data Indus. Assn. et al. as
*** [W]e conclude that the chal-lenged portions of both SF–85 and Form 42 consist of reasonable, employment-related inquiries that further the Government’s interests in managing its internal opera-tions. See Engquist, 553 U. S., at 598–599; Whalen, 429 U. S., at 597–598. As to SF–85, the only part of the formchallenged here is its request for information about “any treatment or counseling received” for illegal-drug use within the previous year. The “treatment or counseling”question, however, must be considered in context. It is a followup to SF–85’s inquiry into whether the employee has“used, possessed, supplied, or manufactured illegal drugs” during the past year. The Government has good reason toask employees about their recent illegal-drug use. Like any employer, the Government is entitled to have itsprojects staffed by reliable, law-abiding persons who will“‘efficiently and effectively’” discharge their duties. See Engquist, supra, at 598–599. Questions about illegal-drug use are a useful way of figuring out which persons havethese characteristics.Amici Curiae 2 (hereinafter CDIA Brief) ("[M]ore than 88% of U. S.companies . . . perform background checks on their employees"). The Government itself has been conducting employment investigations since the earliest days of the Republic.

The court's decision is important to private sector employers looking to justify personal questions and investigative consumer reports. The court recognized the legitimacy of these issues, including questions about drug use.  That should help private-sector and public employers with invasion of privacy claims related to drug testing and background investigations.

Of course the court did not deal with the issue of "adverse impact" discrimination claims here. But the defense to adverse impact is "job related and consistent with business necessity." Language in this opinion should help estasblish this defense.

The opinion is NASA v. Nelson and it is here.
 DGV

Ninth Circuit Pretty Much Kills Most Attorneys' Fees Awards to Employers

In a case where the court readily acknowledged that the plaintiff's claims were frivolous, the court invented a whole new standard for awarding attorney's fees.  The fees statute says the "prevailing party" is entitled to "reasonable attorney's fees."  Then the courts said that employers can recover fees only if the plaintiff's claims are frivolous. 

In this case, Harris v. Maricopa County Superior Court, the court of appeals decided if the plaintiff asserts multiple claims, the defendant can recover fees only on the amount of time spent exclusively on frivolous claims.  So, let's say  the defense counsel spends time that overlaps on frivolous and non-frivolous claims - the attorneys' fees cannot be recovered at all.

In essence, they might as well have said, "if there are multiple claims, unless they are all 100% frivolous, the defendant shouldn't even bother trying for attorney's fees."  Instead, the court hides its true intention by setting a new standard ensuring it's impossible to recover fees, without really saying so. Judge Stephen Reinhardt, who has never met a plaintiff he didn't like, laughed at employers like this:

Although the court may not have erred in determining that the claim was frivolous, it nonetheless erred in awarding substantial fees to defendants on this claim. Almost every time entry in defendants’ fee petition for work related to the hostile work environment claim was also listed as related to some or all of Harris’s nonfrivolous discrimination claims. As we have already explained, in a civil rights action with multiple claims, only some of which are groundless, a defendant is entitled only to those fees attributable exclusively to defending against plaintiff’s frivolous claims. If the work is performed in whole or in part in connection with defending against any of plaintiff’s claims for which fees may not be awarded, such work may not be included in calculating a fee award. Accordingly, the fees properly attributable to this claim, if any, would be quite minimal.

The court's rationale is that the law is "solicitous" of plaintiffs' complaints in civil rights cases.  The court more accurately is "solicitous" of bad faith lawsuits with no chance of succeeding.  It is not mutually exclusive to allow plaintiffs with bona fide claims to have a day in court, while still enforcing some minimal standards.  If a case is frivolous, that means it never should have been brought. It is only fair to defray some of the employers' costs in defending against a lawsuit that never should have been filed in the first place.

Oh, I'm not the only one who smacked his forehead after reading the opinion in this case. There was a dissent that pretty much calls bull on the majority.  Perhaps the full en banc court will take up this issue.

The opinion is Harris v. Maricopa County Superior Court and the opinion is here.

DGV

Court of Appeal: No Attorney-Client Privilege for Employee's Emails to Lawyer

Gina Holmes worked for Petrovich Development Co. LLC as assistant to the CEO, Paul Petrovich.  She was pregnant early in her employment and got into a discussion with her boss about the length of her leave and their respective feelings about her pregnancy. Although it appeared that they had cleared the air, Holmes simultaneously attempted to hire a lawyer, via email at work. Apparently, Holmes became upset that Petrovich forwarded her emails to others in the organization and quit, claiming constructive discharge, discrimination, harassment, etc.

The trial court summarily dismissed the harassment, discrimination and retaliation claims. The court of appeal affirmed - holding that the harassment evidence was limited to email correspondence that was neither severe nor pervasive.

The court of appeal also affirmed dismissal of the claim that Holmes was forced to resign. The court noted that when a plaintiff cannot establish a hostile work environment, a constructive discharge claim is a higher standard and must also fail.  Holmes' retaliation claim failed too, because of the lack of an adverse action.

That left claims for intentional infliction of emotional distress and invasion of privacy, which were tried to a jury. The jury found for the defendants. On appeal, Holmes claimed the trial court should not have allowed Petrovich to use the emails she sent to a lawyer seeking a referral, in which she explained her situation.  The trial court held that Holmes waived the privilege because she used company email, and there were clear policies explaining the company's right to monitor email.

The court of appeal agreed that Holmes waived the privilege Here is the money quote:

Although a communication between persons in an attorney-client relationship "does not lose its privileged character for the sole reason that it is communicated by electronic means or because persons involved in the delivery, facilitation, or storage of electronic communication may have access to the content of the communication" (§ 917, subd. (b)), this does not mean that an electronic communication is privileged (1) when the electronic means used belongs to the defendant; (2) the defendant has advised the plaintiff that communications using electronic means are not private, may be monitored, and may be used only for business purposes; and (3) the plaintiff is aware of and agrees to these conditions. A communication under these circumstances is not a “„confidential communication between client and lawyer‟” within the meaning of section 952 because it is not transmitted “by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation . . . .” (Ibid.)


When Holmes e-mailed her attorney, she did not use her home computer to which some unknown persons involved in the delivery, facilitation, or storage may have access. Had she done so, that would have been a privileged communication unless Holmes allowed others to have access to her e-mails and disclosed their content. Instead, she used defendants‟ computer, after being expressly advised this was a means that was not private and was accessible by Petrovich, the very person about whom Holmes contacted her lawyer and whom Holmes sued. This is akin to consulting her attorney in one of defendants‟ conference rooms, in a loud voice, with the door open, yet unreasonably expecting that the conversation overheard by Petrovich would be privileged.

Lawyers for employees obviously should take note and advise employees not to use monitored email systems. Employers should ensure their email policies are comprehensive and clear regarding employees' expectations of privacy.

The case is Holmes v. Petrovich Development Company LLC and the opinion is here.

NY Government: Going to California...

We sent out an email blast to our clients with known NY Operations, but I'm reposting it here in case I missed anyone... If you don't care about NY wage and hour law, stop reading.  And I mean it.


The NY Legislature took a big step towards full employment for wage and hour lawyers with the passage of the Wage Theft Protection Act. This new law, signed by outgoing NY Governor David Patterson on December 13, 2010, will become effective on April 12, 2011. Employers should start preparing now.

To summarize, this new law requires employers to provide additional information regarding wage payments, and imposes stiff penalties for employers who fail to comply with their wage payment obligations.

Highlights of the New Legislation

Ø Enhanced Notice Requirements: New York wage law already requires employers to give new employees written notice of their rate(s) of pay, overtime rate (if applicable) and regularly scheduled paydays. Employers must also state whether the employee is paid by the hour, shift, day, week, piece, commission, etc., and any intent to claim allowances (e.g., tip, meal or lodging allowances) as part of the minimum wage. Additionally, the notice must include the employer's name, any "doing business as" name, and the employer's physical address, mailing address (if different) and telephone number.

The Act requires employers to give employees notice not only at the time of hire, but also annually, on or before February 1 of each year. Notice must be given in both English and the employee's native language, and employees must acknowledge receipt in writing. Also, employers must provide at least seven calendar days' notice of any changes to the information required to be disclosed, unless the changes are reflected in new wage statements accompanying employees' pay.

Employers must maintain employee notice and acknowledgment records for a period of six years. If notice is not provided to employees within 10 days of initial employment, employers will be subject to penalties of $50 per employee, per week (up to $2,500), in addition to costs and reasonable attorney's fees. The Act permits the New York Labor Commissioner to bring an enforcement action and to seek additional penalties for noncompliance with this requirement.


Ø Employee Wage Statements: The Act requires employers to provide wage statements to their employees with each paycheck specifying the: (1) dates of the applicable pay period; (2) employee's name; (3) employer's name, address and telephone number; (4) rate and basis of pay; and (5) allowances, if any, claimed as part of the minimum wage. For non-exempt employees, the statement must also include the applicable regular and overtime pay rates, in addition to the number of regular and overtime hours worked during the pay period. Payroll records containing this information must be maintained for six years (up from three years). Violations can result in civil damages of $100 for each workweek that the violation occurred (not exceeding $2,500), in addition to costs and reasonable attorney's fees. Additional penalties may be sought and awarded in actions for noncompliance brought by the New York Labor Commissioner on an employee's behalf.

Ø Increased Civil/Criminal Penalties: The Act provides for increasingly strict penalties against employers who fail to pay their employees properly. First, the Act permits liquidated damages against an employer of up to 100% of the total amount of wages found to be due (up from 25% under existing law), unless an employer can prove it had a good faith basis for believing that it was in compliance with the law. Additionally, employers found liable who fail to pay the amount owed pursuant to a final judgment within 90 days will now be assessed an additional 15% in damages. The Act provides for the employee's recovery of prejudgment interest and reasonable attorney's fees in any civil action to recover unpaid wages.

The Act also imposes more stringent criminal penalties for failure to pay minimum wage or overtime wages due. It provides that an employer (including the officers or agents of any corporation, partnership or limited liability company)found not to have paid an employee's wages is guilty of a misdemeanor and will be fined between $500 and $20,000 or be imprisoned for less than one year for each offense. The Act treats each failure to pay employee wages within any workweek as a separately actionable offense. Repeat offenses may result in felony charges, more fines, and up to one year in jail. The Act threatens similar criminal penalties against employers who fail to maintain adequate employee wage records. Initial violations will be deemed misdemeanors, with fines between $500 and $5,000, or up to one year of imprisonment. For subsequent record violations, employers may face felony fines of between $5,000 and $20,000, imprisonment for a period of not more than a year and one day, or both.

Ø Posting Requirement: Employers found liable under the Act may be ordered by the Labor Commissioner to conspicuously post documentation explaining the violation(s) for up to one year.

Ø Whistleblower Protections: The Act also strengthens protections for whistleblowers in cases involving wage violations. Significantly, the Act protects employees from unlawful reprisal (including threats of retaliation) who raise a complaint based upon a "reasonable" and "good faith" belief that their employer has violated the law--even if no violation actually occurred. It also protects employees who assist in the investigation of another employee's complaint, or who have otherwise exercised rights protected by the Act. Upon a finding of retaliation, the Labor Commissioner may award compensatory and liquidated damages (not to exceed $10,000), enjoin acts of retaliation, and order injunctive relief, which may include employee reinstatement. Employees also may make claims of retaliation in court, with similar remedies awarded. Retaliation claims must be made within two years of the alleged retaliatory act, although the two-year statute of limitation is tolled by the filing of an administrative charge with the Labor Department.

To ensure compliance, and avoid the significant penalties for violations, employers with New York operations should carefully review the full text of the New York Wage Theft Prevention Act, which can be found here: http://open.nysenate.gov/legislation/bill/S8380 . Employers must also review and revise their pay practices by the Act's April 12, 2011, effective date.

Thanks to my pal and competitor Tony Rao for pointing this out and thanks to Alex Sperry of our Sacramento office for drafting the analysis.

DGV

NLRB Going Wild

The National Labor Relations Board is proposing a regulation that requires all employers under the NLRB's jurisdiction - both union and non-union- to post a notice explaining to employees their rights under the National Labor Relations Act.  That notice will include helpful information like how to file an unfair labor practice complaint, the right to collectively bargain and elect a union, etc. The entire contents of the notice is posted below.  The proposed regulations currently require qualifying employers to post the notice on paper with the other millions of government posters, and also send the notice out by email or put it on a company intranet. Multiple languages, etc. too.

The proposed regulations are here.  A "fact sheet" is here.  Read the whole proposed poster below. 

This NLRB is on a tear and it won't be long before private sector employers will have to wake up and smell the union. This time I may have to dust off my copy of The Developing Labor Law. My competitors may have to dust off their labor lawyers. OK, I kid! I had too many cookies.


DGV

“EMPLOYEE RIGHTS UNDER THE NATIONAL LABOR RELATIONS ACT

“The National Labor Relations Act (NLRA) guarantees the right of employees to organize and bargain collectively with their employers, and to engage in other protected concerted activity. Employees covered by the NLRA* are protected from certain types of employer and union misconduct. This Notice gives you general information about your rights, and about the obligations of employers and unions under the NLRA. Contact the National Labor Relations Board (NLRB), the Federal agency that investigates and resolves complaints under the NLRA, using the contact information supplied below, if you have any questions about specific rights that may apply in your particular workplace.

“Under the NLRA, you have the right to:

• Organize a union to negotiate with your employer concerning your wages, hours, and other terms and conditions of employment.
• Form, join or assist a union.
• Bargain collectively through representatives of employees’ own choosing for a contract with your employer setting your wages, benefits, hours, and other working conditions.
• Discuss your terms and conditions of employment or union organizing with your co-workers or a union.
• Take action with one or more co-workers to improve your working conditions by, among other means, raising work-related complaints directly with your employer or with a government agency, and seeking help from a union.
• Strike and picket, depending on the purpose or means of the strike or the picketing.
• Choose not to do any of these activities, including joining or remaining a member of a union.

“Under the NLRA, it is illegal for your employer to:

• Prohibit you from soliciting for a union during non-work time, such as before or after work or during break times; or from distributing union literature during non-work time, in non-work areas, such as parking lots or break rooms.
• Question you about your union support or activities in a manner that discourages you from engaging in that activity.
• Fire, demote, or transfer you, or reduce your hours or change your shift, or otherwise take adverse action against you, or threaten to take any of these actions, because you join or support a union, or because you
engage in concerted activity for mutual aid and protection, or because you choose not to engage in any such activity.
• Threaten to close your workplace if workers choose a union to represent them.
• Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support.
• Prohibit you from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances.
• Spy on or videotape peaceful union activities and gatherings or pretend to do so.

“Under the NLRA, it is illegal for a union or for the union that represents you in bargaining with your employer to:
• Threaten you that you will lose your job unless you support the union.
• Refuse to process a grievance because you have criticized union officials or because you are not a member of the union.
• Use or maintain discriminatory standards or procedures in making job referrals from a hiring hall.
• Cause or attempt to cause an employer to discriminate against you because of your union-related activity.
• Take other adverse action against you based on whether you have joined or support the union.

“If you and your co-workers select a union to act as your collective bargaining representative, your employer and the union are required to bargain in good faith in a genuine effort to reach a written, binding agreement setting your terms and conditions of employment. The union is required to fairly represent you in bargaining and enforcing the agreement.

“Illegal conduct will not be permitted. If you believe your rights or the rights of others have been violated, you should contact the NLRB promptly to protect your rights, generally within six months of the unlawful activity. You may inquire about possible violations without your employer or anyone else being informed of the inquiry. Charges may be filed by any person and need not be filed by the employee directly affected by the
violation. The NLRB may order an employer to rehire a worker fired in violation of the law and to pay lost wages and benefits, and may order an employer or union to cease violating the law. Employees should seek assistance from the nearest regional NLRB office, which can be found on the Agency’s website:

www.nlrb.gov.

You can also contact the NLRB by calling toll-free: 1-866-667-NLRB (6572) or (TTY) 1-866-315-NLRB (1-866-315-6572) for hearing impaired.
“*The National Labor Relations Act covers most private-sector employers. Excluded from coverage under the NLRA are public-sector employees, agricultural and domestic workers, independent contractors, workers employed by a parent or spouse, employees of air and rail carriers covered by the Railway Labor Act, and supervisors (although supervisors that have been discriminated against for refusing to violate the
NLRA may be covered).

“This is an official Government Notice and must not be defaced by anyone.”

Lactation Accommodation Information. .

The helpful folks at the U.S. Department of Labor wants you to know about the new federal requirement that employers grant time off for women to express breast milk.  The DOL's fact sheet is posted here.
You may recall this requirement was included in the "healthcare reform" law.  I have not yet seen any legislative effort to grant male workers equal rights in this area.  But hope springs eternal.
DGV

Top 100 Employment Law Blogs

Yeah, another day, another award.  We were included in the Delaware Employment Law Blog's top 100 employment law blogs. See the post here.   We're # 17, even. But it seems they grouped them by certain criteria, and then ordered them alphabetically. So, who knows whether they just like us or REALLY really like us.  Disirregardless, it's an honor to be read and recognized. So, thank you Delaware Employment Law Blog!

Besides tooting our horn, the purpose of this post is to give you access to at least 100 employment law blogs that post in different states, on a variety of topics. The folks at the DELB put a lot of time and effort into compiling this information, not to mention their substantive posting over there.  Take advantage of all their hard work.Knowledge is POWER people!  Whew. I just got all red and stuff.

DGV

Payroll Company Not an "Employer" for Wage Hour Purposes

If an employer "outsources" payroll services to another company, can that payroll service company be held liable for wage-hour violations as an "employer?"  No.

The California Supreme Court in Martinez v. Combs (discussed here) determined who is liable under California wage and hour law - i.e., who is an "employer."  The court of appeal in Futrell v. Payday California, Inc., applied Martinez's definition of "employer" in deciding that a payroll service provider was not an "employer."

Futrell provided private police / crowd control services for a Reactor, a production company that makes commercials. The production company "payrolled" its employees through Payday, a payroll service company.  Futrell brought a class action against Payday, alleging wage-hour violations. Payday prevailed on a motion for summary judgment because the trial court held Payday was just a vendor of Futrell's actual employer, the production company.

The court of appeal held that Martinez restricts who may be held liable for wage-hour violations. The court rejected Futrell's argument that Payday exercised control over his wages:

There is no evidence in the record showing Payday exercised any control over Futrell‟s hours or working conditions. Reactor hired Futrell, and arranged and supervised the location shoots. . . . This means the only possible linchpin for finding that Payday was Futrell‟s employer is whether Payday “exercised control over his wages.”


If Payday had merely collected tax information from workers, kept track of time cards, calculated pay and tax withholding, and submitted reports to Reactor detailing such information, leaving it for Reactor to issue paychecks to the workers on its productions, we would have an easy case; Reactor would be the only employer. In our view, the issue in this case then comes down to whether Payday exercised “control over workers‟ wages” by going beyond handling the ministerial tasks of calculating pay and tax withholding, and by also issuing paychecks, drawn on its own bank account. We think not.

. . .. . Writing on a clean slate, we conclude that “control over wages” means that a person or entity has the power or authority to negotiate and set an employee‟s rate of pay, and not that a person or entity is physically involved in the preparation of an employee‟s paycheck. This is the only definition that makes sense. The task of preparing payroll, whether done by an internal division or department of an employer, or by an outside vendor of an employer, does not make Payday an employer for purposes of liability for wages under the Labor Code wage statutes.

The court then reached a similar conclusion under the federal Fair Labor Standards Act:

Although the FLSA applies a slightly different test than California law, the predominant factor remains the control an alleged employer exercises over an employee. Incorporating the reasons explained above into the FLSA test, we find Payday was not Futrell‟s employer for purposes of the FLSA. The economic reality existing between Futrell and Payday is that the latter prepared paychecks for the former for the work he performed on behalf of his actual employer, Reactor.

This case will come as good news to PEOs and other HR outsourcing companies, who may have been sued as "joint employers" for wage and hour violations. The court here, though, held that nothing in the opinion affects the analysis of who is the "employer" under any other body of law except wage-hour.

The case is Futrell v. Payday California, Inc. and the opinion is here.

San Francisco Minimum Wage Going Up 1/1/2011

San Francisco has its own minimum wage law.   It is indexed to inflation. It did not rise in 2010. However, it's rising as of 1/1/2011.  The new rate will be $9.92 per hour.  There of course is a new poster!  Get information here. 

Court of Appeal: Employer's Lawsuit Against Terminated Employees Beats Anti-SLAPP Motion

Overhill Farms received notice from the IRS that hundreds of its employees' social security numbers were invalid. The company gave employees a chance to correct the problem. Those who did not were terminated. The law imposes fines and potential criminal liability on employers who permit employees to work with false social security numbers.

Led by an activist organization, some of the terminated employees began protesting at Overhill. The protestors accused Overhill of being racists and ageists, and all kinds of other -ists because of the termination decision based on the IRS's action.  The leaflets they handed out said, among other things:

“OVERHILL FARMS UNFAIR and RACIST EMPLOYER.”  The leaflets distributed at the protests contained the heading “OVERHILL FARMS UNFAIR AND RACIST.”  Overhill is “[a]n abusive and racist employer in the manner that it treats its workers,” which “discriminates against Latinos”; has “unfairly terminated 300 workers,” has “fired workers for expressing themselves freely according to the First Amendment of the U.S. Constitution,” has “exploited Latinos for 30, 20, 15 and 10 years and then threw them to the streets — many single female heads-of-household,” and has exploited part-time workers “visciously as if modern slavery were in place.” 

Well, Overhill fought back. It sued the protestors for a variety of torts, including defamation, interference with prospective economic advantage, and unfair business practices. But the protesters challenged the lawsuit as a "SLAPP" - a lawsuit in retaliation for their First Amendment activity - protesting.
Protesting of course is protected by the First Amendment. But the First Amendment does not protect against libel - provably false statements of fact. Certain types of false statements have to be made with malice to constitute defamation.

The court of appeal said that merely calling Overhill "racist" was not defamatory:

We agree that general statements charging a person with being racist, unfair, or unjust – without more – such as contained in the signs carried by protestors, constitute mere name calling and do not contain a provably false assertion of fact.  Similarly, references to general discriminatory treatment, such as that contained in the handbill and flyer here, without more, do not constitute provably false assertions of fact.  (See, e.g., Beverly Hills Foodland v. United Food & Commercial Workers Union, Local 655 (8th Cir. 1994) 39 F.3d 191, 196 [“‘[T]o use loose language or undefined slogans that are part of the conventional give and take in our economic political controversies — like ‘unfair’ and ‘fascist’ — is not to falsify facts.’  [Citations.]”].) 

But, the protestors went further:

The press release contains language which expressly accuses it of engaging in racist firings and declaims upon the disparate impact the firings have had on “immigrant women.”  Similarly, after discussing Overhill’s termination of one-fourth of Overhill’s work-force, the leaflets explicitly assert that  the discrepancy in social security numbers was merely a “pretext” to eliminate certain workers, and refers to Overhill’s conduct as “racist and discriminatory abuse against Latina women immigrants.”  Moreover, in almost every instance, defendants’ characterization of Overhill as “racist” is supported by a specific reference to its decision to terminate the employment of a large group of Latino immigrant workers.  The assertion of racism, when viewed in that specific factual context, is not merely a hyperbolic characterization of Overhill’s black corporate heart – it represents an accusation of concrete, wrongful conduct.

 The court therefore held that generally calling someone racist is hyperbole. But saying that an employer fired an employee due to unlawful discriminatory motive is a provable assertion of fact.  That conclusion could have ripple effects beyond protesting. For, if this opinion stands, when an employee alleges wrongful termination due to discrimination, retaliation, etc., an employer is within its right to sue for defamation if it can prove that the statement is false.

The decision was 2-1. The dissent said:

I part company with the majority opinion in two fundamental respects.  First, my colleagues in the majority have incorrectly made this court the first state or federal appellate court in America, ever, to hold that the epithet “racist” constitutes a provably false assertion of fact as the basis of a claim of defamation.  The majority attempts to argue that it is only so holding because the term “racist” was used in combination with other words.  But those other words are not actionable and the majority does not and cannot argue otherwise.  Whether the word “racist” is used as a noun or an adjective in combination with other words does not matter.

Second, in my view, the majority misapplies the United States Supreme Court opinions in Milkovich v. Lorain Journal Co., supra, 497 U.S. at page 19 and Linn v. United Plant Guard Workers (1966) 383 U.S. 53, 58.  Defendants’ communications in their dispute with their employer simply did not contain a provably false fact and the reasons for their allegations were disclosed.  (Franklin, supra, 116 Cal.App.4th at p. 387.)  The majority opinion’s parsing of the one word “discrepancies” in reaching its conclusion is not consistent with United States Supreme Court jurisprudence in defamation cases.  I agree the employees’ claims might not be persuasive, but that does not make them defamatory.

My thought is that the California or US Supreme Court will take up this case.  A lot of former employees accuse their employers of being "racist" or discriminatory in making employment decisions.  One can imagine the argument that this decision will interfere with the enforcement of the civil rights laws.  One can also argue that the term "racist" or "discriminatory" is a powerful weapon and should not be tossed around without a factual basis to back it up.  There's the rub. We'll see what happens next.

The opinion is Overhill Farms, Inc. v. Lopez and the opinion is here.

DGV

U.S. Supremes Grant Review of Walmart Class Action

So, I have posted on Dukes v. Walmart for a few years now... here and here.  This is the class action involving potentially 1.5 million current and former Walmart employees all over the country.
The U.S. Supreme Court decided to consider some issues that arise in federal class actions:

Whether claims for monetary relief can be certified under Federal Rule of Civil Procedure 23(b)(2)—which by its terms is limited to injunctive or corresponding declaratory relief—and, if so, under what circumstances.

and 

Whether the class certification ordered under Rule 23(b)(2) was consistent with Rule 23(a).

Here's a comprehensive post with cites to all kinds of relevant information from Ross Runkel's Employment Law blog. 

Federal Rule of Civil Procedure 23 governs class actions. So, that's what the court is referring to above. In essence the court is deciding whether and to what extent a court can order money to be paid if a class action is certified under Rule 23(b)(2), which is supposed to apply only to class actions seeking injunctions.

Yes, on the surface, the legal issues may read like real snoozers for HR and most employment lawyers. But the case is gold for civil procedure junkies.  And don't let all that civil procedure jargon fool you. The stakes  are incredibly high and the court has the opportunity to shape how federal class actions in discrimination cases may be asserted. The court's decision could well shape how multi-state employers implement policies to avoid class action treatment of seemingly unrelated decisions.... So, stay tuned!

DGV

IRS Standard Mileage for 2011

The IRS raised the standard mileage rate for automobile reimbursement to .... $0.51.  Don't trust me?  The link is here.

• 51 cents per mile for business miles driven
• 19 cents per mile driven for medical or moving purposes
• 14 cents per mile driven in service of charitable organization

DGV

California Supreme Court: Waiting Time Penalties are..Penalties!

I know, sounds obvious. But folks were claiming that waiting time penalties, like meal period penalties, are a form of wage.  They were making this argument to permit claims for waiting time penalties under California's unfair competition law, because that law has a four year statute of limitations.

No sale, said the California Supreme Court in Pineda v. Bank of America (opinion here). In that case, Pineda received his wages four days late. He brought a class action for waiting time penalties. on behalf of everyone who was paid late under Bank of America's final pay policies. 

Pineda argued that he should be able to sue for waiting time penalties under California's unfair competition law (Bus. Prof. Code section 17200).  The Supreme Court rejected that argument because waiting time penalties are not "restitution," the only time that money is recoverable under the UCL.  Plaintiffs wanted to use the UCL to benefit from that law's four-year statute of limitations.

But the Supreme Court giveth, and taketh away.  The other issue decided today is that the statute of limitations for waiting time penalties is not affected by whether the employer ultimately paid the wages, albeit late.

The lower courts dismissed the case because he did not file his case within a year of his termination. The lower courts applied case law like in McCoy v. Superior Court (2007) 157 Cal.App.4th 225, 229-230. There, the court of appeal held a one-year statute of limitations applies to waiting time penalty claims if the wages are paid as of the time of suit. 


The Supreme Court rejected McCoy and held that in all instances, the waiting time penalty statute, Labor Code Section 203, imposes the same statute of limitations. That section says that the statute of limitations for waiting time penalties is the same as the limitations period applied to the underlying wage claims.  The Supreme Court said that rule applies whether the wages are paid or not at the time of suit.

DGV

Arizona Medical Marijuana Law

So, there was a big debate over what would happen in the workplace if California's Prop. 19 were to pass. If you have a short memory, that was the initiative to basically legalize personal use of marijuana.  Well, that initiative failed to pass back on November 2.

In Arizona, on the other hand, the voters passed their own Prop. 203. Text is here.
Prop. 203 legalizes certain "medical marijuana," making AZ the 15th state to do so. But AZ's new law expressly protects medical marijuana users at the workplace:

6-2813. Discrimination prohibited

***. 

B. UNLESS A FAILURE TO DO SO WOULD CAUSE AN EMPLOYER TO LOSE A MONETARY OR LICENSING RELATED BENEFIT UNDER FEDERAL LAW OR REGULATIONS, AN EMPLOYER MAY NOT DISCRIMINATE AGAINST A PERSON IN HIRING, TERMINATION OR IMPOSING ANY TERM OR CONDITION OF EMPLOYMENT OR OTHERWISE PENALIZE A PERSON BASED UPON EITHER:

1. THE PERSON'S STATUS AS A CARDHOLDER.

2. A REGISTERED QUALIFYING PATIENT'S POSITIVE DRUG TEST FOR MARIJUANA COMPONENTS OR METABOLITES, UNLESS THE PATIENT USED, POSSESSED OR WAS IMPAIRED BY MARIJUANA ON THE PREMISES OF THE PLACE OF EMPLOYMENT OR DURING THE HOURS OF EMPLOYMENT.

36-2814. Acts not required; acts not prohibited 

A. NOTHING IN THIS CHAPTER REQUIRES:

* * *

3. AN EMPLOYER TO ALLOW THE INGESTION OF MARIJUANA IN ANY WORKPLACE OR ANY EMPLOYEE TO WORK WHILE UNDER THE INFLUENCE OF MARIJUANA, EXCEPT THAT A REGISTERED QUALIFYING PATIENT SHALL NOT BE CONSIDERED TO BE UNDER THE INFLUENCE OF MARIJUANA SOLELY BECAUSE OF THE PRESENCE OF METABOLITES OR COMPONENTS OF MARIJUANA THAT APPEAR IN INSUFFICIENT CONCENTRATION TO CAUSE IMPAIRMENT. 

B. NOTHING IN THIS CHAPTER PROHIBITS AN EMPLOYER FROM DISCIPLINING AN EMPLOYEE FOR INGESTING MARIJUANA IN THE WORKPLACE OR WORKING WHILE UNDER THE INFLUENCE OF MARIJUANA.

Rad, huh?  So, you can't smoke pot AT work. The employer doesn't have to give up federal dollars to permit users to have pot in their system. ...  But generally, (1) no taking action based on positive drug tests unless the level in the blood suggests impairment (2) employers don't have to let you work "impaired" (stoned) or under the influence (buzzed?).  


I guess we're going to find out what "impaired" and "under the influence" means through a series of regulations that are supposed to be issued within the next few months.  


Remember, this isn't a general legalization of marijuana. It will apply only to "qualified" patients who are certified as having the requisite medical conditions. 


Good luck Arizona employers!  

DGV

"Suitable Seating" Class Action Goes Forward

Retailers must provide "suitable seating" in accordance with the California Industrial Welfare Commission's Wage Order 7-2001, section 14. It says: "All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats."

Eugina Bright worked for 99 Cents Only Stores. She brought a class action alleging that, as a cashier, the company could reasonably have provided her with a seat suitable for cashiering. She sought penalties under PAGA (Private Attorneys General Act of 2004), claiming that the Wage Order violation supported PAGA penalties.

The trial court held that Ms. Bright was not "underpaid" and, therefore, could not collect penalties under Section 20 of the Wage Order. She also could not collect PAGA penalties, the trial court believed, because PAGA's extra "catchall" penalty does not apply when there is an applicable penalty in place. Sort of a "gotcha" ruling, which I admire.

But the court of appeal did not share my sense of irony, holding that PAGA penalties are available for wage order violations, even if Wage Order Section 20 penalties do not apply:

Section 2699, subdivision (f) makes its civil penalty applicable to violations of “all provisions of this code except those for which a civil penalty is specifically provided.” (§ 2699, subd. (f).) Section 1198, the code section Bright contends was violated, contains no civil penalty. (See § 1198.) Nowhere in the Labor Code is a civil penalty specifically provided for violations of the suitable seating requirement incorporated in section 1198. Thus, section 2699, subdivision (f), by its terms, allows for a civil penalty for violations of section 1198 based on failure to comply with the suitable seating requirement.

The case is Bright v. 99 c Only Stores, Inc. and the opinion is here.

DGV

Annual Legal Update - Web or Live

The end of the year is here. There are new laws, new regulations, and new court decisions to digest.  How will you keep up? How will you know what to do?  Please, somebody help you!  Aaargh.

Relax. Shaw Valenza is here to ease your worried mind, smooth your furrowed brow, apply myrrh to your foreheads. OK, I wouldn't know where to get any myrrh now that Prop. 19 did not pass.  Myrrh dealers... get the word out.

Anyway, wise men -- and women -- from all over are going to get even wiser when they attend our annual Employment Law Update!  Statutes, regulations, case law, and how to's. Best news yet, Jennifer Shaw herself is presenting.  And such a deal.

Here's a link for more information.  Click it.  Now.  Ok, now.
http://www.shawvalenza.com/training_sessions.php?id=81

DGV

Blog refresh - Blogroll dead

Just a quick note that I slightly upgraded the design of the blog. If you have feedback please let me know.

I just learned that my list of interesting blogs (blogroll) was destroyed, because the "blogroll" company that hosted it "ceased operations."  So, if you have suggestions for additions to my blogroll, please let me know. Also, if you used to be on my blogroll and would like to be added again, please send me a note.

DGV

Court of Appeal: No Attorney Present at Plaintiff's Mental Examination

The court of appeal's opinion in Toyota v. Superior Court should be interesting to employment lawyers and maybe to their clients involved in employment litigation.
Steven Braun was a plaintiff in a discrimination and harassment case against Toyota. He claimed significant emotional distress as a result of the conduct. Toyota arranged for a mental examination. Braun's attorney sought to impose certain conditions, including that it be taped, and that the attorney could accompany Braun to the exam and wait in an adjoining room. The doctor balked at this condition, as did Toyota. The Superior Court, however, allowed it. So, Toyota sought a "writ" - a mid-litigation appeal - overturning the Superior Court's decision.

The Court of Appeal granted the writ, which almost never happens in discovery disputes. The court said that although an attorney is not always prohibited from attending an examination, he or she must make some evidentiary showing of need. Toyota, on the other hand, showed (1) that the examination's scope was limited by court order (2) that the doctors believed the attorney's presence could influence the examination. The court also noted that medical professionals conducting such examinations are entitled to a presumption they will act properly.

The case is Toyota v. Superior Court and the opinion is here.