Welcome Back, Arbitration?

I think the rumors of the demise of employment arbitration might have been exaggerated. I for one am guilty of presuming arbitration was dead. And who can blame me, what with the California courts and the 9th Circuit?

Well, today, the U.S. Supreme Court breathed new life into employment arbitration. The Court held that the Federal Arbitration Act preempts California case law prohibiting arbitration agreements that exclude class actions.

So, if arbitration agreements can require only individual arbitration, that means that employers may avoid those expensive California wage and hour class actions by properly implementing arbitration agreements.

The interesting question that the Supreme Court did not decide today is what about California case law imposing lots of other conditions and burdens on employment arbitration. The "Armendariz" line of cases impose special burdens on arbitration that do not apply equally to other kinds of contracts. If you read Concepcion a certain way, Armendariz will not be around long. For example consider this statement in the opinion:


Parties could agree to arbitrate pursuant to the Federal Rules of Civil Procedure, or pursuant to a discovery process rivaling that in litigation. Arbitration is a matter of contract, and the FAA requires courts to honor parties’ expectations. Rent-A-Center, West, 561 U. S., at ___ (slip op., at 3). But what the parties in the aforementioned examples would have agreed to is not arbitration as envisioned by the FAA, lacks its benefits, and therefore may not be required by state law.

Of course, I've been wrong before. Like when I thought arbitration was dead.

The case is AT&T Mobility LLC v. Concepcion and the opinion is here.

Court of Appeal Clarifies "Alter Ego" Liability for Employment Claims

Cooper was the sole shareholder and day to day operator of Auburn Honda, a corporation. A group of former employees sued Auburn Honda and Cooper for age discrimination and other things.  Cooper moved for summary judgment on the ground he could not be held liable, since only the employer is liable for employment discrimination. The plaintiffs argued Cooper indeed was the employer as an "alter ego" of the corporation.

The court did not permit the plaintiffs to claim Cooper was the alter ego of Auburn in opposition to the motion for summary judgment. So, small business owners, here is the discussion of application of the alter ego doctrine to a shareholder:

To succeed on their alter ego claim, plaintiffs must be able to show: (1) such a unity of interest and ownership between the corporation and its equitable owner that no separation actually exists, and (2) an inequitable result if the acts in question are treated as those of the corporation alone. (Sonora Diamond, supra, 83 Cal.App.4th at p. 538.)


Several factors are to be considered in applying the doctrine, among them are: “„[c]ommingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses; . . . the treatment by an individual of the assets of the corporation as his own; . . . the failure to obtain authority to issue stock or to subscribe to or issue the same; . . . the holding out by an individual that he is personally liable for the debts of the corporation; . . . the failure to maintain minutes or adequate corporate records . . .; sole ownership of all of the stock in a corporation by one individual or the members of a family; . . . the failure to adequately capitalize a corporation; the total absence of corporate assets, and undercapitalization; . . . the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual or another corporation; . . . the concealment and misrepresentation of the identity of the responsible ownership, management and financial interest, or concealment of personal business activities; . . . the disregard of legal formalities and the failure to maintain arm's length relationships among related entities; . . . the use of the corporate entity to procure labor, services or merchandise for another person or entity; . . . the diversion of assets from a corporation by or to a stockholder or other person or entity, to the detriment of creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another; . . . the contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of a corporation as a subterfuge of illegal transactions; . . . and the formation and use of a corporation to transfer to it the existing liability of another person or entity.‟ . . . [¶] This long list of factors is not exhaustive. The enumerated factors may be considered „[a]mong‟ others „under the particular circumstances of each case.‟" (Morrison Knudsen Corp. v. Hancock, Rothert & Bunshoft, LLP (1999) 69 Cal.App.4th 223, 249-250, quoting Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 838-840.)

So, the court held that Cooper did not qualify as an alter ego under this list of factors because the Plaintiffs did not bring forth sufficient evidence.

The case is Leek v. Cooper and the opinion is here.

Court of Appeal Reconsiders, but then Re-Affirms Case re Work Week

We previously wrote about Seymore v. Metson Marine here.  Then we wrote an article covering it and other new wage-hour cases here.  This was the case in which the court held that the employer could not set a workweek to start on a day when the employees did not begin the week.

I am not so presumptuous to think the employer's lawyers or the court read my article, but maybe the they heard the other HOWLS from the employment bar about how bad a case this was.  So, the employer filed a petition for re-hearing, and the Court actually granted re-hearing and issued a new opinion.

The employer's lawyers submitted copious new case law, regulations, and new facts to support its argument that the employer can set the workweek for Monday when the employees start their 14-day hitches on Tuesday.  (That was the issue the Court of Appeal addressed in the initial opinion).

The Court on re-hearing remarked how much new information the employer's lawyers provided in support.  I think the Court was a bit miffed that the initial briefing was not as thorough as it might have been. Nevertheless, the Court affirmed its decision to reverse summary judgment. This time, however, the Court allowed more flexibility for employers to start the work-week on a different day than the employees' actual work begins, as long as there is a sufficient business reason for doing so (other than avoiding payment of overtime). The court hinted that Metson set up its work week for the purpose of avoiding certain wage-hour obligations.

So, the new opinion in Seymore v. Metson Marine is here.  It is now going to be up to the Supreme Court to de-publish or review this case.  On the bright side, the current version of the opinion is less dangerous for employers than the original one was.

DGV

Court of Appeal Says No Acommodation for Violent Threats

Disagreeing with the Ninth Circuit's ridiculous  insaneoutlier opinion  in Gambini v. Total Renal Care (in which the court of appeals said that a bi-polar employee who threw papers at her boss was immune from discharge), the Court of Appeal held that the Orange County Superior Court lawfully fired an employee who made violent threats against co-workers.  The Court of Appeal decided that a "bi-polar" employee does not have the right to threaten co-workers, even if that conduct is caused by the disability. Chalk one up for reasonable.
Oh the court also held that checkig the box for "denial of family care leave" on an administrative charge is NOT sufficient to exhaust administrative remedies on disability discrimination.
I've written about Gambini here. And here.
This decision is Wills v. Superior Court and the opinion is here.

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.)