May 24, 2007
Posted by Cal Labor Law in Wage & Hour Issues
The California Division of Labor Standards Enforcement ("DLSE") is the regulatory agency that enforces California's wage and hour laws.The DLSE's enforcement positions are available online in its "Division of Labor Standards Enforcement Polices and Interpretations Manual."(click here to view the DLSE Manual). Because these interpretations affect its own enforcement actions and also single plaintiff and class action wage and hour lawsuits, the DLSE Manual should be required reading for all human resource executives and California labor attorneys (even if you don't agree with it).
On May 2, the DLSE made some very important changes to the Manual to reflect its view of Murphy v. Kenneth Cole Productions, Inc. The two most important changes are: (1) Meal period and rest period pay, split-shift pay, and reporting time pay are wages like overtime and therefore may support claims for statutory attorneys' fees and interest.DLSE Manual § 188.8.131.52; and (2) California Labor Code section 203 waiting time penalties of up to 30 days of wages may be imposed on employers for failing to provide owed meal or rest period pay, split-shift pay and reporting time pay at termination of employment.DLSE Manual § 184.108.40.206.The DLSE is continuing its position that employers must pay one hour's wage for any meal period violations in a single day and an additional one hour's wage for any rest period violations in a single day.DLSE Manual §§ 45.2.8; 45.3.7.This issue (whether a missed meal period and missed rest period in the same day requires one or two hours of pay) has yet to be interpreted by the courts.
While we are on the topic of DLSE Manual revisions, we should note a couple other relatively recent revisions that have not received a lot of press.First, in November 2005, the DLSE revised its position on vacation accrual caps.The DLSE's position once was that all employers had to give employees nine months after the end of the year to use vacation (without supporting legal authority).This effectively created an accrual cap for vacation equal to 175% of each employee's annual vacation.Former DLSE Manual § 220.127.116.11 (Revised Nov. 22, 2005)While this requirement has been withdrawn, the DLSE has, unfortunately, not yet provided guidance regarding what cap it views as acceptable.
In December 2006, the DLSE revised section 54.8.1 regarding the professional exemption.The DLSE, without supporting legal authority, formerly had made the "learned" professional exemption only applicable to those individuals who had a degree above a BA or BS.With that requirement deleted, this exemption may now be available to a number of engineers, chemists, biologists, researchers, medical professionals, and other employees who otherwise were previously nonexempt in California. The DLSE also expanded its "artistic" professional exemption to include artistic endeavors using "evolving media such as music synthesizers and computer graphic and art design programs.DLSE Manual § 54.10.1.
Although the DLSE's interpretation of Murphy adds more disappointment for employers, the DLSE appears to be taking a more reasoned approach to some of its other, more vexing, interpretations.Hopefully, that is a trend that will continue.
May 17, 2007
Posted by Cal Labor Law in CDF News & Events
Corporate counsels are often tasked with the awesome responsibility of picking outside counsel to defend the corporation in a matter that may ultimately have to be decided by a jury. Often this selection has to do with prior relationships, reputation of the firm, history of pre-trial procedural success and the like. More particularly in the employment litigation context, the expectation of a lawyer's ability to dispose of a matter through summary judgment is a big consideration. Consequently, corporate counsels tend to view litigation as a series of procedural steps leading to summary judgment: response to the complaint; discovery; attempt at mediation; summary judgment. However, the prospect of heading to court should the case or some of it survive summary judgment should lead to a highly different set of criteria about who should try that matter. In the same vein corporate counsel may have the tendency to view a trial pretty much the way they view the procedural steps leading to it: a process including jury selection, opening statement, examination of witnesses, closing argument, deliberations and verdict (hopefully a good one).
To maximize the probability of a successful outcome, I propose that you accept the radical idea that litigators and trial lawyers are not the same being. Therefore, to select a trial lawyer to defend your corporation before a jury may require some understanding and appreciation of how the two are different.
Trial lawyers are personalities. They take up space physically and emotionally (even trial lawyers small in stature). Trial lawyers love to tell stories gathered from complex facts and offer analogies to make points to a jury. Trial lawyers think big. For example, In a wrongful termination lawsuit against a small to medium size company, a case is not just about this plaintiff and this defendant and fine points tossed back and forth about implied contracts but calls into question the entrepreneurial spirit of this country and how extortionist lawsuits threaten everything this country encourages about risk taking, individualism and economic prosperity. No lawyer will win a case on personality alone, but judicial history is replete with examples of where it was a factor among others that saved the day.
Trial lawyers talk in themes. A theme is a short summation of a case that characterizes what the case is all about and thereafter becomes the filter for the evidence to be presented. Sometimes this is referred to as the "theory of the case." The case's theme should be one or two sentences stated in plain and simple English. For example, in a discrimination case, "Mr. Smith hired the plaintiff, Ms. Jones, eighteen months ago so how can she now say he terminated her because of her gender?" A theme should make sense to you, a jury, a judge, a newspaper reporter and your neighbor. It is the punch line that gets the jury interested and open to hear the evidence in support of it after the opening statement.
Trial lawyers use focus groups. Because trial lawyers talk in themes they are also obsessed with making sure that theme resonates with the community in which the case is being tried. The best way to do that is through a focus group. Note that a focus group is not a mock trial. The difference is significant. A mock trial involves a mini presentation of the case (including a stand - in arguing the plaintiff's side) from beginning to end and can take a number of days to complete. A focus group, on the other hand can be done in a day where "both" sides present what they believe is the hot issue or hot document or key witness examination (usually video of a key deposition) and then get feed back from the mock jury. Both provide reliable information but the mock trial is significantly more expensive than the focus group presentation. Additionally, there are ways a good trial lawyer can cut the costs even further by modifying the set up and presentation of the focus group. The point is that it is standard practice to use some form of focus group presentation before the actual trial and many consider not doing so akin to walking into court guessing about everything.
A jury trial is unlike any other legal proceeding your company will face. While even a seasoned trial lawyer cannot guarantee a result in a jury trial, an inexperienced litigator in front of a jury is almost always certain disaster. A runaway verdict may be overturned on appeal or reduced by the trial judge or court of appeals but the publicity of an adverse outcome may cause insurmountable media damage and may have wasted enormous human and financial capital within the organization. It is, therefore, important to think like a trial lawyer when selecting counsel to stand up and represent your organization at trial.
April 19, 2007
Posted by Cal Labor Law in Wage & Hour Issues
Earlier this week, the California Supreme Court issued its long awaited ruling in Murphy v. Kenneth Cole, deciding that fines arising from meal and rest break violations in California constitute "wages," for which there is a three-year statute of limitations, rather than a "penalty," which would have carried only a one-year statute of limitations. (For your convenience, a link to the decision appears below.) Not only does this obviously triple the time period for the recovery of such wages, it also triggers potential liability for "waiting time" penalties for employees who have terminated during the prior three years, additional related penalties, and attorneys' fees. To make matters worse, such claims typically include an allegation of unfair competition (B&P Code Section 17200), which carries a four year statute of limitations.
The California Supreme Court's decision even further underscores the importance of ensuring that employers'meal and rest break policies are compliant with California law, as well as the importance of ensuring those policies are being followed by all employees. In addition, employers may want to consider paying out the extra hour of pay to employees when it is clear that they were denied a meal break or denied the opportunity to take a rest break. Unfortunately, we expect this ruling will result in a significant increase in class action filings.
If you have any questions about how this ruling affects you, please do not hesitate to call or write any of the attorneys that you work with at CDF LLP.
Link to decision: http://www.courtinfo.ca.gov/opinions/documents/S140308.PDF
March 29, 2007
Posted by Cal Labor Law in Wage & Hour Issues
The recent increase in the California minimum wage to $7.50 per hour currently, and another raise to $8.00 per hour on January 1, 2008, raised the minimum salary requirements for California's exempt executive, administrative and professional employees who must meet minimum salary requirements (in addition to a duties test) that are tied to the state minimum wage. These exempt employees must earn a monthly salary equivalent to no less than two times the state minimum wage for full-time employment. On January 1, 2007, the minimum salary requirement to qualify as an exempt employee increased to $31,200 per year. On January 1, 2008, the amount these exempt employees must earn will increase to $2,773.33 per month, or $33,280 per year.
Employers also need to be aware of the increased base salary for the inside sales exemption provided for in Wage Orders 4 and 7. If an inside sales employee earns more than one-and-one-half times the minimum wage and more than one-half of the employee's wages are commissions, then the employee may qualify as exempt. With the increase in minimum wage, a commissioned sales person must earn $23,400 per year or $11.25 per hour as of January 1, 2007. Starting on January 1, 2008, exempt commissioned sales person must earn $24,960 per year or $12.00 per hour.
March 27, 2007
Posted by Cal Labor Law in Discrimination, Harassment & Retaliation
Jones v. The Lodge at Torrey Pines Partnership, 147 Cal. App. 4th 475 (2007)
The totality of circumstances must be considered in determining whether an adverse action has been taken against a plaintiff in retaliation and discrimination cases.
Plaintiff employee sued under the California Fair Employment and Housing Act ("FEHA"), for sexual orientation discrimination by defendant employer and retaliation by the employer and defendant supervisor. Following a jury verdict for plaintiff, the trial court granted defendants' motions for judgment notwithstanding the verdict ("JNOV") and a new trial. Using the standards laid out in MacRae v. Department of Corrections & Rehabilitation, 142 Cal App. 4th 377 (2006), the trial court found that there was insufficient evidence of an adverse employment action for purposes of establishing sexual orientation discrimination or retaliation, because none of the alleged retaliatory acts had a tangible detrimental effect on plaintiff's employment.
The California Court of Appeal reversed both trial court rulings and reinstated judgment in favor of plaintiff. The appellate court found that the trial court had used an overly restrictive definition of adverse employment action, because it considered only actions that had a substantial and detrimental affect on plaintiff's employment, including plaintiff's poor performance review and several written criticisms of plaintiff's employment. Under a totality of circumstances approach, there was sufficient evidence of an adverse employment action. The evidence favorable to the jury's finding of an adverse employment action, which was not considered by the trial court, included evidence that after plaintiff asked the supervisor to refrain from making derogatory remarks about women and homosexuals, the employee received warning notices based on false charges and was excluded from meetings, and the supervisor continued to use offensive language despite being asked to stop. Finally, the Court of Appeal affirmed that under FEHA, an individual supervisor can be held personally liable for retaliation.
March 7, 2007
Posted by Cal Labor Law in Employee Hiring, Discipline & Termination
How many of us have had employees that could have been described as "having an attitude problem?" How many of us work with people with an attitude problem? Heck, how many of us have an attitude? However, to coach someone on her attitude is usually ineffective and increases the level of confrontation, hostility, and defensiveness.
Is attitude coachable? No, however the behaviors that lead to the perception of an attitude problem are coachable.
Too many times on performance reviews or evaluations, I've seen the phrases:
- "has an attitude problem"
- "not a team player"
- "just not a fit for this environment"
- "doesn't possess the right personality for this position"
If you perceive some to have an "attitude" as it where, ask yourself, "What is he doing to come across that way?" In other words, "What are the behaviors?" Perhaps he's interrupting people...; or rolling his eyes...; or using negative language such as "no" and "never" when you ask for his opinion...; or perhaps he just doesn't execute tasks that are a part of his job description. These are coachable items. These are behaviors.
One of the techniques you can use to think through someone's "attitude" or "not a team player" feedback, is to ask yourself, "What did I observe." In other words, it has to be something an employee did or did not do. These answers will fall into one of four categories:
- Look: How did he look? (e.g., rolling his eyes)
- Sound: How did he sound? (e.g., he interrupted people)
- Say: What did he say? (e.g., using "no" and "never" when requests are made)
- Did: What did he do? (e.g., not performing the duties outlined in the job description)
Joe founded The Executive Advisory, a communications consulting firm, and currently serves as Managing Director.
March 6, 2007
Posted by Cal Labor Law in Court Decisions
The Second District of the California Court of Appeal recently handed a significant defeat to a California union by barring it from acting as class representative in a lawsuit seeking to enforce employee claims under the Labor Code.
In Amalgamated Transit Union, Local 1756 v. Superior Court, the Union had persuaded a number of its members to execute agreements that assigned their claims for alleged meal and rest break penalties to the union. These agreements also purported to transfer the employee's right to act as a class representative to the Union. Relying on these assignment agreements, the Union then filed a class action lawsuit, seeking over $10 million in alleged meal and rest break penalties from the employer on behalf of an entire class of workers.
The Court first noted that employees may lawfully assign their individual claims for damages to others. Such damages claims are a form of transferable property just like any debt. Thus, the Union did have standing to sue to collect any unpaid wages or penalties owed to the individuals who had expressly assigned their claims to the Union.
The Court held, however, that the Union did not have standing to act as a class representative. In reaching this conclusion, the Court held that standing to act as a legal representative for others -- whether in a class action or an uncertified "private attorney general" action -- is not a form of transferable property right. As the Court explained, "because the purported assignor (the employee) although authorized by [the law] to bring an action behalf of others, has no ownership interest in the causes of action owned by others, the employee necessarily has no right to transfer those causes of action to a third party." Thus, the right to act as a class representative could not be transferred to the Union.
If the Court had not ruled as it did, employees would have been permitted to sell their status as potential class representatives to the highest bidder. Indeed, the buyers of these rights could presumably have re-sold them like some form of tradable commodity, thereby spawning a whole new source of class action plaintiffs. The Amalgamated Transit ruling is no doubt especially disappointing to unions who have recently been looking for ways to exploit their access to their members in order to gain a share of the lucrative California wage and hour class action market.
February 22, 2007
Posted by Cal Labor Law in New Laws & Legislation
Ensuring health and safety in the workplace is California's Occupational Safety and Health Administration's primary goal (Cal-OSHA). In order to achieve this goal, Cal-OSHA has certain powers including the ability to conduct random inspections, issue citations, and assess penalties against an employer it finds has jeopardized the health and safety of the workplace. To avoid any citations or penalties, California employers must comply with all safety regulations, including the following key safety requirements:
1.Maintain a written Injury and Illness Prevention Program ("IIPP") and make sure the IIPP is distributed to all employees or displayed in a location for employees to easily view/access. If there are hazardous chemicals in the workplace, then the IIPP must contain a written hazard communication program as well, unless the employer already has a separate written hazard communication program.
The IIPP cannot be general. Rather, it must address the specific safety issues in the particular workplace, and contain a discussion regarding at least the following elements: responsibility, compliance, communication, hazard assessment, accident/exposure investigation, hazard correction, training and instruction, and recordkeeping. A common safety hazard for all restaurants that should be addressed in an IIPP is the threat of violence, such as a robbery, and an emergency action plan in case of an emergency. For more information regarding how to develop an IIPP, including a written hazard communication program, refer to Cal-OSHA's publications that are located at http://www.dir.ca.gov/dosh/PubOrder.asp.
2.Inspect the workplace and identify all potential hazards employees may face while on the job. Use color codes, posters, labels, or other signs to warn employees of any potential hazards. Make sure to notify and train all employees regarding these potential hazards and document such training.
3.Establish or update standard safety operating procedures in the workplace so that employees can follow those procedures to maintain health and safety. Make sure employees are following these operating procedures, including always using the appropriate tools and properly operating equipment.
4.Immediately remove or correct any hazardous condition in the workplace that may result in a serious injury to an employee. Cal-OSHA assesses penalties against an employer based, in part, upon the severity of the safety violation, such as an employer's failure to abate a known hazardous condition.
5.Immediately notify (within 8 hours) the nearest Cal-OSHA office of any serious injury or fatality that occurs on the job. A serious injury is considered an injury that requires the employee to be hospitalized for more than 24 hours other than for medical observation, or an injury in which part of the body is lost or permanently disfigured. To find the nearest Cal-OSHA office, refer to Cal-OSHA's website at http://www.dir.ca.gov/dosh/DistrictOffices.htm.
6.If you have 11 or more employees at anytime during the calendar year, maintain accurate records of any work-related injuries or illness, including Cal-OSHA Form 300, Log of Work-Related Injuries and Illnesses, and Form 300A, a Summary of the Work-Related Injuries and Illnesses for the year. Employers must post the Summary for employees to review. Employees can also request to view the Log of Work-Related Injuries and Illnesses.
The above safety requirements only address a portion of the regulations employers are required to follow in order to maintain a safe and healthful workplace. If you have any questions or concerns about any health or safety issue in the workplace, Cal-OSHA provides employers with free consultation services and will even assist the employer in identifying hazards in the workplace. For more information regarding such assistance, you can access Cal-OSHA's website at http://www.dir.ca.gov/dosh/consultation.html.
February 21, 2007
Posted by Cal Labor Law in CDF News & Events
Nancy Berner will appear on the PBS radio program "Your Legal Rights" from 7:30 to 8:30 p.m., February 21, to discuss the implications of San Francisco's Paid Sick Leave Law on employers throughout the state. The show is broadcast live in the Bay Area at 91.7 FM, KALW, and online at www.kalw.org. It is rebroadcast at other times on other California stations, so check local listings. We will be receiving a copy of the program, and will update the blog with a link to the show when it becomes available.
February 16, 2007
Posted by Cal Labor Law in CDF News & Events
On March 27, 2007, join experienced California-based employment law specialists from Carothers DiSante & Freudenberger LLP for a complimentary seminar addressing the most pressing issues facing Texas-based companies with California employees.
The event will take place at The Westin Galleria in Dallas, Texas.
Registration is from 2:45 p.m. to 3:00 p.m.
The program will run from 3:00 p.m. to 5:45 p.m.
After the program please join the presenters for a selection of fine California wines and hor d'ouerves.
Topics of discussion will include:
- California Wage/Hour Class Action Litigation Update
- California Jury Trial Practice
- Top 5 Pitfalls Made by California Employers
- Managing Leaves of Absence
- Key California Employment Law Developments for 2007 - What You Need to Know and How It Will Affect You
Click here for more information and how to register.