California Supreme Court to Review Decision that Could Subject Employers to More Suits Under California’s “Sue Your Boss” Law

Most California employers are aware of California's Private Attorneys General Act ("PAGA") (also known as the "Sue Your Boss" or "Bounty Hunter" law), which allows plaintiffs to bring representative claims on behalf of themselves and other employees for alleged Labor Code violations. Successful plaintiffs can recover up to $100 per employee for an initial violation, and $200 per employee per pay period for subsequent violations. Recently, the California Supreme Court granted a petition for review in Arias v. Superior Court of San Joaquin County (Angelo Dairy), a case that has the potential to greatly increase the number of suits brought against employers under PAGA.

In Arias, plaintiff sued his former employer, alleging PAGA claims for various Labor Code violations, including claims for unpaid overtime and denial of meal periods and rest breaks. The appellate court determined, among other things, that a PAGA-plaintiff may bring an action on behalf of himself and other employees without satisfying the requirements for a class action, which is what the employer had argued should be required. This decision raises the possibility that PAGA may provide a new avenue for the kind of representative actions that Proposition 64 (requiring that actions brought under the state's Unfair Competition Law comport with class requirements) sought to curtail. Specifically, if plaintiffs do not have to face the many hurdles presented by the class certification process, it will be far easier for them to bring representative claims again their employers for alleged violations of the Labor Code.

The California Supreme Court's decision in this matter is one that may well determine whether California employers face a new wave of representative claims under PAGA. Please contact us directly to discuss any questions you have regarding the effect the grant of review may have on your workplace.

Mark S. Spring to Speak at Sacramento Area Human Resources Management Association Seminar Regarding Recent Developments in California Employment Law

On December 10, 2007, Mark S. Spring, the firm's managing partner, will conduct a seminar for the Sacramento Area Human Resource Association andreview material developments that occurred in the world of California employment law in 2007; Mr. Spring will also be providing general advice on policy changes that should be considered to help ensure compliance and minimize risk. Some of the topics that will be reviewed include exempt/non-exempt classification, mandatory arbitration agreements, regulations governing mandatory sexual harassment training requirements, and new guidelines affecting meal and rest break regulations. Click here to view the flyer and register to attend this important event.

Governor Schwarzenegger Vetoes Numerous Employment-Related Bills

Governor Schwarzenegger has vetoed a number of employment-related bills, many of which would have imposed additional financial burdens on California employers. Among the most significant are Assembly Bill 8 (which, among other things, would have requireaffected employers to either make certain minimum health care expenditures or contribute to a statewide pool for health care coverage benefits); Assembly Bill 504 (which would have forced employers convicted of fraud, misrepresentation or misconduct related to a lock-out to make restitution to affected employees for lost wages and benefits); and Senate Bill 622 (which would have penalized employers for the "willful misclassification" of independent contractors).

Please contact us directly to discuss any questions relating to the effect the Governor's actions may have on your workplace.

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New State Law Requires Employers to Grant Time Off to Soldiers’ Spouses

Recent legislation signed by Governor Schwarzenegger creates new rights for the spouses of deployed soldiers. Specifically, Assembly Bill 392 requires employers of 25 or more employees to grant up to 10 days of unpaid leave to qualified employees (meaning those who work an average of 20 or more hours per week for the employer and who are married to members of the U.S. armed forces deployed during a period of military conflict to an area designated as a combat theater or zone, or members of the National Guard or reserves deployed during a period of military conflict). Employees are eligible to take this time off only during "qualified leave periods," defined as periods during which the soldier-spouses are on leave from deployment. Employers may not retaliate againstemployees for requesting or taking the leave provided by this new statute, which goes into effect immediately.

Please contact us directly to discuss any questions relating to the effect this new law may have on your workplace.

FedEx Drivers are not Independent Contractors

For the purposes of reimbursement of work-related expenses, drivers working for FedEx were employees and not independent contractors, a California Court of Appeal recently affirmed.

FedEx hired the plaintiff class members as drivers.Upon being accepted for employment, the drivers executed agreements identifying each of them as an "independent contractor, and not as an employee ...; for any purpose."FedEx required the drivers to provide their own trucks meeting FedEx specifications, to mark the truck with the FedEx logo, to pay for all costs of operating and maintaining the truck, to wear a FedEx uniform, and to lease a scanner from FedEx.

The court disregarded FedEx'scontractual designation of the drivers as independent contractors, stating that the employer's label will be "ignored if their actual conduct establishes a different relationship."As has previously been the case, the court focused on the extent that the employer had the right to control the means by which the worker accomplished the work.In finding that the drivers were employees, as opposed to independent contractors, the court noted that FedEx exercised control "over every exquisite detail of the drivers' performance, including the color or their socks and the style of their hair."The court also found that the terminal managers were the drivers' immediate supervisors and were able to reconfigure drivers' routes without regard to any loss of income by the drivers.Finally, the court rejected FedEx's argument that an entrepreneurial opportunity existed for the drivers.

The court's ruling is yet another reminder of the difficulty businesses face in classifying workers as independent contractors and the consequences that can follow if the wrong classification is chosen. Please contact us directly to discuss any questions relating to the effect this ruling may have on your workplace.

Federal Judge Blocks “No Match” Rule

U.S. District Court Judge Charles M. Breyer granted a preliminary injunction against the so-called "no match" program that would require employers to verify Social Security numbers andterminate workers whose numbers did not match official records.In a ruling issued on October 10, 2007, Judge Breyer granted the preliminary injunction after extending a restraining order blocking the Department of Homeland Security from implementing the rule until the lawsuit brought in August by a coalition of immigration and labor groups (including the American Civil Liberties Union, the AFL-CIO, and the United States Chamber of Commerce) is heard at trial.

Please contact us directly to discuss any questions relating to the effect this ruling may have on your workplace.

Governor Considers Bill to Expand Employee Rights to Protected Leave Under CFRA

Governor Schwarzenegger is currently reviewing AB 537, a bill that would substantially expand the class of employees eligible to take leave under the California Family Rights Act ("CFRA").

CFRA requires employers with 50 or more employees to provide covered employees with up to 12 weeks of protected unpaid leave during any 12-month period 1) to bond with a child born to, adopted by, or placed for foster care with the employee, 2) to attend to the employee's own serious health condition, or 3) to care for the employee's parent, spouse or child who has a serious health condition. At the conclusion of such a leave of absence, CFRA requires that an employer provide the employee a guarantee of employment in the same or comparable position.

If enacted, AB 537 would expand CFRA in two significant ways. First, CFRA would no longer be limited to employees caring for children under the age of 18 or adult children who are dependents. Under the new law, caring for an adult child with a serious health condition would constitute a valid reason for requesting CFRA leave. Second, the list of family members on whose behalf an employee may use CFRA leave would also be expanded. Specifically, under the new legislation, employees would be entitled to also take leave to care for a grandparent, sibling, grandchild, parent-in-law or domestic partner with a serious health condition.

These amendments to CFRA have the potential to significantly increase costs for California employers by expanding the class of employees eligible to take protected leave. Governor Schwarzenegger has until October 14th to decide whether to sign AB 537; however, there are both strong supporters and opponents of the bill, so it is uncertain at this time whether the Governor will sign the legislation into law. In the interim, please contact us directly to discuss any specific concerns regarding the impact of AB 537 on your business.

Judge Further Delays Implementation of “No Match” Rule

United States District Court Judge Charles R. Breyer has extended a temporary restraining order that prevents the Department of Homeland Security from implementing a rule requiring employers to fire employees after they receive notices from the Social Security Administration ("SSA") of discrepancies between the employees' names and social security numbers (so-called "no match" letters). According to the rule, if an employer cannot resolve such a mismatch within 90 days, it is required to fire the employee or risk prosecution for employing illegal immigrants.

The rule -- originally scheduled to go into effect on September 14, 2007 -- was challenged by a coalition of immigration and labor groups (including the American Civil Liberties Union, the AFL-CIO and the United States Chamber of Commerce), which claimed that the SSA's records are filled with errors that could lead to numerous legal workers, including American citizens, being unfairly fired. The coalition initially obtained a temporary restraining order on August 31st; after concluding that there was no immediate harm to the government, but a "potentially enormous burden on the employer," Judge Breyer extended that restraining order for 10 additional days. A final ruling will be issued within 10 days to determine whether or not the previously enacted rules will be implemented.

Please contact us directly to discuss any questions relating to the effect this ruling may have on your workplace.

Robin E. Weideman to Speak at Seminar Regarding Meal and Rest Break Class Actions and the Steps a Company Can Take to Ensure it is Not the Next Defendant

On October 16, 2007, Robin E. Largent of the firm's Sacramento office will conduct a seminar for the Sacramento Area Human Resource Association, and will explain the latest meal and rest break class action trends, the implications of the recent meal and rest break decision by the California Supreme Courtin Murphy v. Kenneth Cole, and the July 2007 decision in White v. Starbucks, which has given employers a glimmer of hope in this difficult wage and hour area. In addition, Ms. Weideman will report on the California Labor Commissioner's recent public forums on meal and rest break problems facing California employers. Click here to view the flyer and register to attend this can't-miss event.

Recent Article Reminds Employers of Risks of Wage and Hour Litigation

MSNBC recently published an article that reports on theonslaught of wage and hour litigation being commenced against employers throughout the nation (click here to review the article). This article should serve as a reminder to all employers of the potential risks associated with a failure to comply with wage and hour laws (including, but not limited to, those pertaining to overtime and meal and rest periods), particularly if employees pursue their claims via class action litigation.

Please contact us directly to discuss any questions relating to wage and hour compliance in your workplace.

Cal Labor Law

Robin E. Largent is a Partner in CDF’s Sacramento office and may be reached at 916.361.0991 or BIO »


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