June 15, 2006
Posted by Cal Labor Law in New Laws & Legislation
Green v. State
Whether California law requires an employee to prove he or she is qualified to perform the job in question as part of the employee's prima facie case.
Smith v. Superior Court of Los Angeles (L'Oreal USA, Inc)
Whether an employee who is hired for an agreed-upon period of time such as a one day project has been "discharged" within the meaning of Labor Code section 201 and is thus entitled to waiting time penalties.
Dore v. Arnold Worldwide, Inc.
Is extrinsic evidence as to the parties' interpretation of the contract admissible where an employment contract states "your employment with [the employer] is at will" and "this simply means that [the employer] has the right to terminate your employment at any time"? The 2nd District's found in favor of the plaintiff, finding it was reasonable for Plaintiff to assume that he could only be terminated for cause where the contractual language did not reference "cause" or contain an integration clause and he was placed on a 90-day probationary period, which he completed.
Under state and federal law, employers have an affirmative duty to provide "reasonable accommodation" for "disabled" workers. This obligation includes a requirement to engage in a good faith "interactive process," in which the parties discuss the employee's limitations and explore possible accommodations.
The recent California appellate decision of Gelfo v. Lockheed Martin Corp., addressed a common dilemma for employers -- what to do when an employee claims he is "100% healthy" but the written medical restrictions contained in his file tell a different story.
In Gelfo, the plaintiff had suffered a back injury and obtained workers compensation benefits based on medical reports stating that he was "permanently disabled" and restricted from "prolonged sitting or standing." Within a month of settling his workers compensation claim for a lump sum cash payment, however, the employee requested rehire on the ground that he was now totally recovered.
Lockheed-Martin denied Gelfo's request for re-hire because, relying on the medical reports contained in his file, it believed he was unable to do the job. Gelfo then sued Lockheed for discrimination under the FEHA.
The appellate court first decided that, since Gelfo had admitted he could work without any restrictions, he was not "actually disabled." But the Court went on to hold that any applicant who is denied a job based on medical restriction contained in his file is, by definition, "regarded as" disabled -- and this is also a protected class of employees under the FEHA. Thus, even though Gelfo was ultimately found to have had no medical impairment whatsoever, Lockheed was still legally required to engage in an "interactive process" and to give him a "reasonable accommodation," if necessary.
Unfortunately for employers, at that point the Appellate Court simply remanded the matter to the trial court without providing any concrete guidance about what an employer should do when an employee's subjective statements contradict his own medical restrictions. For example, the Court did not say whether Gelfo's alleged failure to provide an updated medical release to Lockheed would, if proven, be fatal to his case on remand. The Court was also silent about whether Gelfo should be barred from asserting facts in the lawsuit that were directly contrary to the facts he asserted in support of his workers' compensation claim.
Nevertheless, the Gelfo case illustrates that California employers would be wise to observe the following "do's and don'ts" whenever an employee's perceptions of his own abilities are at odds with his pre-existing medical restrictions.
*Do: Engage in an interactive discussion with the employee about his own perception of his capabilities and whether any reasonable accommodations would allow him to perform the essential job duties.
*Do: Request, in writing, an updated medical release reflecting the employee's current medical condition and restrictions.
*Do Not: Make a decision based on prior medical opinions without giving the employee a chance to explain his condition and obtain, if necessary, an updated medical opinion. As the Gelfo Court put it, "an employer cannot slavishly defer to a physician's opinion without first pausing to assess the objective reasonableness of the physician's conclusions."
*Do Not: Require the employee to certify, as a condition of reinstatement, that he can return to work without any physical restrictions whatsoever. As the Gelfo Court explained, "A policy requiring an employee be '100 percent healed' before returning to work is a per se violation [of the FEHA and ADA], because it permits an employer to avoid the required individualized assessment of the employee's ability."
June 2, 2006
Posted by Cal Labor Law in New Laws & Legislation
The immigration debate and our nation's struggle with our complex and difficult border enforcement and labor supply needs are gripping headlines with massive immigration reform bills in the House and the Senate, huge protest rallies by immigrant groups, and aggressive worksite raids by the Department of Homeland Security ("DHS"). Garnering much less attention, but maybe more far-reaching is the United States Supreme Court's forthcoming decision on whether to allow class action lawsuits under the RICO Act against businesses accused of hiring unauthorized immigrants. This article reviews the most important developments and recommends some cost-effective solutions.
HIGHLIGHTS OF THE IMPORTANT LEGAL AND LEGISLATIVE DEVELOPMENTS
1. The Senate Immigration Bill.
On Thursday, May 25, 2006, a tenuous bipartisan coalition in the United States Senate passed an immigration reform and security bill called CIRA, the Comprehensive Immigration Reform Act of 2006. The bill includes numerous border enforcement and immigrant legalization provisions, but most relevant to businesses are:
- stricter I-9 document-review requirements;
- required use of a tedious electronic system for verifying new hires' legal status;
- a chief executive officer certification requirement;
- and significant penalty increases.
a. Stricter document-review requirements.
Current law requires businesses to review eligibility documents to establish an individual's identity and eligibility to work in the United States and attest to the document review in the I-9 Form. The employer fulfills this legal duty so long as the documents reasonably appear to be genuine on their face. The Senate bill would require businesses to consider the "totality of the circumstances" in evaluating whether the documents examined are genuine and establish an individual's identity and eligibility for employment.
Current law, however, contains an antidiscrimination provision that prohibits employers from refusing to honor documents that on their face reasonably appear to be genuine. CIRA does not revise that provision, potentially creating a quandary for businesses: Do not engage in a full investigation and violate CIRA; investigate too thoroughly and possibly violate current antidiscrimination laws.
b. Electronic system for verifying new hires' legal status.
The proposed electronic system requires a business to submit an individual's name, birth date and social security number (or equivalent) to the DHS within 3 days of hire. The DHS is required to provide a "confirmation" or tentative "nonconfirmation" response within 3 days. The business must notify the individual if the DHS's response is a tentative nonconfirmation. The individual has 10 days to contest the tentative nonconfirmation. If the individual contests the nonconfirmation, the DHS has 10 days to issue a final confirmation or nonconfirmation notice.
If the DHS has systemic problems timely processing final notices, it automatically receives an extension of not less than 180 days. During that time period, a business cannot terminate an individual's employment for being tentatively nonconfirmed. The bill therefore could stick individuals into "nonconfirmation purgatory," creating an economic disincentive for a business to develop the employee and a disincentive for the employee to invest time and energy into the employer.
More disconcerting, the Senate bill provides a tentatively nonconfirmed employee an additional ground for suing his or her employer. Employees on tentative nonconfirmation status are protected from termination because of the nonconfirmation status, so terminating an individual because he or she is nonconfirmed will be considered unlawful discrimination. Additionally, businesses that do not invest the time or energy into nonconfirmed individuals may also be found to have engaged in unlawful discrimination.
c. Chief executive officer certification.
The Senate bill authorizes the DHS in certain circumstances to require a business to certify -- under penalty of perjury -- that it is either in compliance with the law's documentation and electronic-verification requirements or has implemented a compliance program. The business's chief executive officer or similar official must sign the certificate. Because the bill allows for criminal sanctions and imprisonment, the new law would expose a business's CEO, owner, or other executive to jail time. This exposure would exist even though that individual was not personally responsible for any CIRA violations.
d. Increases in the penalties.
The bill also significantly increases the civil penalties that businesses would face, including fines of $20,000 for hiring undocumented workers. Additionally, the bill increases fines up to $6,000 for a single recordkeeping or verification violation.
Businesses may think they can at least breathe a sigh of relief because the bill still has to go to the conference committee and be reconciled with the House of Representatives' immigration bill. We interviewed Congressman Dana Rohrabacher (R-CA), to gauge the political climate and the probability of CIRA, or something like it, becoming law. Congressman Rohrabacher said: "It will take a supreme effort by the conferees of the House of Representatives and the Senate to reach a compromise. The reason is that the two bills from them are not similar bills. They are opposed in purpose and dissimilar in structure."
In fact, the House bill, H.R. 4437, contains even more serious challenges to businesses. It contains no guest worker or legalization provisions, increases current fines to a maximum of $40,000, and requires verification of all employees, not just new hires. "Whatever bill comes out and is finally passed will have a major employer-sanction provision and an employer-verification system," Mr. Rohrabacher stated when asked to predict the type of provisions the final bill will contain. The good news for businesses is that Congress seems committed to provide employers with the tools to properly verify workers' status -- through a new electronic verification system with the DHS. Also, if employers followed the verification process, they would be immune from liability for terminating employees and from sanctions, even if the DHS verification ultimately was wrong.
2. Department of Homeland Security's Renewed Enforcement Policy.
On April 19, 2006, the DHS raided operations of IFCO Systems, a manufacturer of crates and pallets, in twenty-six states throughout the United States. U.S. Immigration and Customs Enforcement agents arrested thousands of undocumented employees, and arrested seven current and former executives on charges they conspired to transport, harbor, and encourage unauthorized workers to reside in the United States. Apparently, IFCO initially became the target of a government investigation because the Social Security Administration had written IFCO over 13 times regarding over a thousand employees who had faulty Social Security numbers. The day following the raids, DHS Secretary Michael Chernoff held a press conference to emphasize the DHS's renewed commitment to enforcing immigration laws and imposing criminal sanctions on individual managers.
3. United States Supreme Court Hears Oral Argument On Whether Businesses Can Be Subject To Class Action Lawsuits Under RICO.
Possibly a more important development is the United States Supreme Court's decision to hear Mohawk Industries, Inc. v. Williams. In Mohawk, current and former employees brought a class action against the company and its managers alleging that they employed unauthorized immigrants to drive down wage rates and workers' compensation premiums. The plaintiffs based their lawsuit on alleging that Mohawk and its recruiting agencies engaged in racketeering activity under the Racketeering Influenced and Corrupt Organizations Act ("RICO") through alleged violations of immigration laws. The Supreme Court heard oral argument on this case on April 26, 2006 and its decision is forthcoming. If the Supreme Court allows RICO claims based on alleged immigration violations, businesses could be exposed to multimillion dollar class action verdicts because of alleged immigration violations.
RECOMMENDATIONS FOR PROTECTING YOUR BUSINESS
With the consequences of noncompliance becoming more catastrophic, businesses must implement a compliance program. Under current law, such a program can be established with relatively simple steps:
1) Develop a compliance statement and policy that sets forth:
- the business's intent to hire only authorized workers;
- procedures for hiring only authorized workers;
- procedures for complying with recordkeeping requirements; and
- procedures for responding to Social Security Administration inquires or other immigration-related inquiries;
2) Train and periodically retrain managers and supervisors regarding their obligations to comply with immigration laws and how to properly review authorization documents and complete the I-9 Forms;
3) Periodically audit the managers' and supervisors' hiring practices and the business's recordkeeping practices;
4) Discipline managers and supervisors who fail to comply with the business's compliance program; and
5) Periodically revisit and update the program for continued compliance.
If CIRA becomes law, employers can easily revise this compliance program to include new procedures that will be required. These would likely include: determining when the totality of the circumstances compels a more thorough review of an individual's eligibility documents, and training managers and supervisors how to handle "nonconfirmed" employees.
Ultimately, the existence of a strong immigration compliance program will protect your business from the potential risk of RICO based class action lawsuits, help you avoid the attention of U.S. Immigration and Customs Enforcement agents, and protect your executives from criminal prosecution. Also, if CIRA becomes law, it would specifically reduce the penalties imposed for immigration violations if a strong compliance program exists. Now, more than ever, businesses should focus upon creating a robust and effective immigration-compliance program, and stay attentive to developments out of Washington, D.C.
The attorneys at Carothers DiSante & Freudenberger LLP will be monitoring this legislation closely.
May 30, 2006
Posted by Cal Labor Law in Wage & Hour Issues
Like all California employers, the hotel industry is required to pay employees in accordance with both federal law, in the form of the Fair Labor Standards Act ("FLSA"), and state law, namely the California Labor Code and wage orders promulgated by the California Department of Industrial Relations ("DIR"), and enforced by the Department of Labor and Standards Enforcement ("DLSE"). Employees are generally presumed to be hourly employees, and therefore entitled to overtime and meal and rest breaks, unless one of a few narrow exemptions applies. This article provides some insight into determining whether or not a resident manager in the hospitality industry is exempt from the protections of California's wage and hour laws, and provides guidance on application of the lodging credit.(Note that neither federal nor state law provides a statutory definition of "resident manager." However, both use and inquiry to the DLSE provide the informal, and common sense, definition that a resident manager is an employee provided with full-time lodging at the hotel or apartment dwelling where he or she works.)
California assumes that all employees are protected by the state's wage and hour obligations to, among other things, keep records, pay overtime and minimum wage, and provide required rest and meal breaks. However, there are exemptions from these protections for "white collar" employees, i.e., those who are executive, administrative or professional employees. The state provides an exemption test, under which an employee will only be considered exempt under the executive or administrative categories if he or she (1) spends more than 50% of the work day (2) on tasks that are intellectual, managerial or creative, (3) which require the exercise of discretion and independent judgment and (4) for which the monthly pay is at least twice the minimum wage for one month of full time work. At the current minimum wage rate of $6.75/hour, the monthly salary requirement is $2,340, or $28,080/year. (The professional exemption applies to specific jobs, such as doctors, engineers or lawyers.)
The first question to ask is whether or not your resident manager is an exempt employee. The law takes the view that, unless an employer can show to the contrary, all employees are subject to the wage and hour law protections. Calling an employee a manager and paying a sufficiently high salary are not sufficient to find that an employee is exempt. Rather, the employee must spend more than 50% of his or her work time engaged exclusively in exempt duties to qualify for the exemption. "Exclusively" means that if the employee is performing a non-exempt task and an exempt task concurrently, that time counts as non-exempt time. Careful analysis of the duties performed by that employee is critical. For example, if the manager is giving directions to the hotel on the telephone while providing managerial oversight to other employees, this will be considered time spent on non-exempt work.
If the manager satisfies the requirements to be treated as an exempt employee, the employer receives no particular credit or benefit for providing free or discounted accommodations to the employee. However, if the manager does not satisfy the requirements to be treated as an exempt employee, a portion of the value of the accommodations can be credited against the employer's minimum wage obligations.
Specifically, federal regulations provide that an employer may credit the cost of lodging toward the minimum wage requirement if the lodging is furnished for the benefit of the employee, is accepted voluntarily and without coercion by the employee, and is customarily furnished by other employers in the same industry. California provides additional guidance to hotel employers providing lodging to an employee. First, the lodging provided must be actually received, must be part of the employee's compensation, and the employee must enter into a voluntary written agreement to credit the lodging toward the minimum wage requirement. Second, the lodging must be available to the employee for full-time occupancy, and it must be adequate, decent and sanitary according to the usual and customary standards of the industry. A good rule of thumb would be to provide your resident employee with the same caliber of lodging provided to your guests (although you cannot require employees to share a bed). Finally, the following rates are then creditable toward the employer's minimum wage obligation.
The following list provides the rate credited toward minimum wage based on the type of lodging:
Room Occupied Alone: $31.75/week; Room Shared: $26.20/week; Apartment: 2/3 of the ordinary rental value, up to $381.20/month; Where a couple is employed by an employer: 2/3 of the ordinary rental value, up to $563.90/month.
Determination of whether an employee qualifies as exempt is both critical and complex. Liability for mistakenly classifying a non-exempt employee as exempt can be significant. Employers who wish to treat their resident managers as exempt should consider seeking advice from their employment counsel regarding application of these laws in the hospitality industry.
On April 20, 2006, DHS Secretary Michael Chertoff announced a nationwide enforcement program directed at enforcement of laws which prohibit employment of unauthorized foreign workers. This announcement comes against the backdrop of raids conducted on April 19, 2006, against IFCO Systems, Inc., a German-owned palleting firm, at locations in New York, Pennsylvania, North Carolina, Ohio, Texas, Indiana, Arizona, Virginia and Massachusetts. The raids were carried out pursuant to criminal enforcement measures accusing the company and its executives of criminal conspiracy with the objective of harboring and transporting undocumented workers. Government officials reported that the case against IFCO began when DHS learned of the company's failure to resolve ongoing notices from the Social Security Administration of large numbers of non-matching social security account numbers in their quarterly payroll tax reports. Many employers have received such reports in recent years. The new "get tough" policy comes in the midst of congressional debate over immigration reform and whether the U.S. should grant legal status to millions of undocumented foreign nationals currently living here.
1. Whether waiver of participation in a class action in a pre-employment arbitration agreement is enforceable in California. Gentry v. Superior Court (Circuit City Stores), previously published at 135 Cal.App.4th 944 (2006) (class action for overtime wages filed by retail store managers who claim they were misclassified under the managerial/executive exemption), rev. granted April 26, 2006; Jones v. Citigroup, Inc. previously published at 135 Cal.App.4th 1491 (2006) (class action brought by credit card holders alleging violation of unfair competition law), rev. granted April 26, 2006.
2. Whether (1) Proposition 64 that limits standing to bring an action under the Unfair Competition Law to "any person who has suffered injury in fact and has lost money or property as a result of such unfair competition" (Bus. & Prof. Code, § 17204, as amended) apply to actions pending when the provisions of the proposition became effective on November 3, 2004? and (2) If the standing limitations of Proposition 64 apply to actions under the Unfair Competition Law that were pending on November 3, 2004, may a plaintiff amend his or her complaint to substitute in or add a party that satisfies the standing requirements of Business and Professions Code section 17204, as amended, and does such an amended complaint relate back to the initial complaint for statute of limitations purposes? Young America Corp. v. Superior Court, 2006 WL 217967, rev. granted May 10, 2006, briefing deferred pending decision in Californians for Disability Rights v. Mervyn's, previously published 126 Cal.App.4th 386 (2005), rev. granted April 27, 2005, and Branick v. Downey Savings & Loan Assn., previously published at 126 Cal.App.4th 828 (2005), rev. granted April 27, 2005.
Topic: employee's personal use of company property.
An employer may be held liable for an employee's use of a company vehicle for personal use. The Court determined that the company's policy and protocol regarding use of company cars implied permission to the employee to use the company car for personal errands. For example, the employee handbook lacked specificity regarding "personal use" of company property. The company also lacked specific protocol when using company vehicles such as failure to have a verification system subsequent to use of company vehicles, such as review of gas, oil, or mileage usage, all of which were indicators that the company's business practice amounted to indifference as to how the vehicles were actually used. Employers should carefully review their employee handbooks to ensure that it expressly prohibits personal use of company property. Employers should also implement consistent protocols to document and monitor use of company property to avoid liability for employees' personal use of company property. Taylor v. Roseville Toyota, Inc., 42 Cal.Rptr.3d 68, 06 C.D.O.S. 3362 (April 4, 2006).
Topic: employment agreements with foreign choice of law and forum selection provisions.
The Court held that an employment agreement containing a New York choice of law provision and New York forum selection provision is enforceable as between a New York employer and California employee. The Court held that the public policy of California in enforcing its anti-discrimination statutes under FEHA and convenience of the party/witnesses in adjudicating the case in California do not invalidate the parties' enforceable agreement where the selected forum affords an adequate remedy to the employee. Out-of-state employers who employ individuals in California may use foreign choice-of-law and forum selection provisions in their employment contracts, so long as the forum selected offers the employee adequate remedies otherwise available to him or her under California law. Olinick v. BMG Entertainment, 42 Cal.Rptr.3d 268, 06 C.D.O.S. 3497 (April 27, 2006).
Topic: discovery of putative class members' names, addresses, and telephone numbers.
This case involves a putative class action lawsuit alleging wage and hour violations, including missed meal and rest breaks and unpaid overtime. The Court ruled that the discovery requested was relevant and did not violate the attorney-client privilege or attorney-work product doctrine. Nevertheless, the Court held that defendant employer's special interrogatories seeking the names, addresses and telephone numbers of all putative class members who contacted plaintiffs' counsel violated the putative class members' privacy rights. Most or all of the class members who contacted plaintiffs' counsel did so in response to a neutral letter sent to a sample of class members, administered by a neutral third party. The Court reasoned that the class members' right to privacy outweighed the employer's need to learn the identities of class members who contacted plaintiffs' counsel, because the employer already knew who the universe of class members were, and presumably knew how it compensated its own employees and administered its meal and rest break policies. The Court evidently found plaintiffs' counsel's declaration persuasive where he states that putative class members were reluctant to reveal their identities unless it remained confidential, and were fearful of retaliation by their employer. Defense counsel should therefore proceed with caution when seeking the identities of putative class members who contacted plaintiffs' counsel, unless there is a compelling reason seeking the disclosure that outweighs the class members' privacy interests. Tien v. Superior Court (Tenet Healthcare Corp.), 06 C.D.O.S. 4006 (May 15, 2006).
May 16, 2006
Posted by Cal Labor Law in New Laws & Legislation
A.On May 15, 2006, Governor Schwarzenegger signed SB 144 into law (revised food and safety code). SB 144 was sponsored by the California Restaurant Association and a broad coalition of interested parties that overhauled California's entire food and safety code in an effort to improve food safety for consumers and eliminate bureaucratic red tape for businesses. SB 144 will enact the updated California Retail Food Code (California Code) and repeal the existing California Uniform Retail Food Facilities Law (CURFFL). SB 144 consolidates food safety regulations and makes them more user friendly, provides better uniformity and consistency, updates and uses the best available science to ensure Californians are safe, and provides businesses with greater flexibility.
B.Currently pending: AB 2095 (sexual harassment prevention training for managers). This bill would limit the provisions regarding mandatory sexual harassment prevention training to employers having 50 or more employees in California and would limit the training requirement to supervisory employees within California. Please see our firm blog for more details about this pending bill.
C.Currently pending: AB 2186 (misclassification of employees as independent contractors). Existing law prescribes comprehensive requirements relating to minimum wages, overtime compensation, and standards for working conditions for the protection of employees applicable to an employment relationship. This bill would state the intent of the Legislature to prohibit deliberate misclassification of employees as independent contractors to avoid the application of such laws and to penalize intentional misclassification. Employers should assess whether they are controlling the manner and means of the work performed by their contractors' employees, a key factor in determining whether an employment relationship exists. Employers also should take a careful look at their contracts with independent contractors to ensure that (1) their contractors must comply with all laws, including wage-and-hour laws, and must insure that their subcontractors also comply with all applicable laws, and (2) they have strong indemnification language in the event they are sued for violations of the law by their contractors or subcontractors.
D.Currently pending: AB 2217 and SB 1254 (expansion of alternative workweek arrangements). Two bills have been introduced in the California legislature that would allow employees greater flexibility in scheduling their workweek. These bills would allow individual workers to request and their employers to mutually agree to a compressed workweek that comprises of four 10-hour days. Any work performed beyond the compressed work schedule would remain subject to current state overtime rules. Please see our firm blog for more details about this pending bill.
E.Currently pending: AB 2371 (employment arbitration agreements). Existing law provides that written agreements to submit controversies to arbitration are valid and enforceable. This bill would invalidate arbitration agreements between employers and employees that relate to employment practices covered by the Fair Employment and Housing Act (FEHA) that are required as a condition of hiring. It would further establish that on and after January 1, 2008, any waiver of rights or procedures under the FEHA must be knowing, voluntary, and not made as a condition of hiring. The bill also provides that an employer has the burden to prove that a waiver or arbitration agreement was knowing, voluntary, and not a condition of employment or continued employment. If passed, this bill would undermine an employer's ability to enter pre-dispute arbitration agreements with employees regarding any rights covered by FEHA.
F.Currently pending: SB 300 (family and medical leave). This bill would increase the circumstances under which an employee is entitled to protected leave pursuant to the Family Rights Act by (1) eliminating the age and dependency elements from the definition of "child," thereby permitting an employee to take protected leave to care for his or her independent adult child suffering from a serious health condition, and (2) permitting an employee to take leave to care for a seriously ill grandparent, sibling, or domestic partner, as defined.
G.Currently pending: SB 1414 (large employer healthcare mandate). Following the lead of Maryland, California State Senator Carole Migden, D-San Francisco, has introduced a bill that would require businesses with 10,000 or more employees to spend at least 8 percent of total wages on health benefits. It has been reported that this bill would affect approximately 69 employers in California, and is being drafted with Wal-Mart in mind. Maryland passed a similar law in January, and at least 30 other states are planning to introduce similar legislation. Senator Migden argues that many employers who do not provide health benefits to their employees are placing the burden on the government to fill this need. The Retail Industry Leaders Association has filed suit to challenge the Maryland law, arguing the law violates the commerce clause, the equal-protection clause of the U.S. Constitution, and the Employee Retirement Income Security Act (ERISA). As you may recall, in 2004 California voters narrowly rejected Proposition 72, which would have required employers with 20 or more employees to provide health benefits to employees or to pay a fee to the medical insurance board that would provide insurance to individuals. There is no doubt that employers in California will have to carefully watch this issue and communicate with their elected representatives the impact that such a requirement would have on their businesses. Although this bill is targeted at the large employers, passage of this type of legislation would pave the way for mandatory employee health benefits for all employers.
May 8, 2006
Posted by Cal Labor Law in New Laws & Legislation
Ash v. Tyson Foods, Inc., 126 S.Ct. 1195 (Feb. 21, 2006), holding that racial animus may be evidenced by the use of the term "boy" regardless of whether the speaker uses a racial modifier. Plaintiff, an African-American, was denied a promotion and sued for racial discrimination under Title VII. Plaintiff was awarded compensatory and punitive damages by a jury. However, upon defendant's Rule 50(b) motion, the trial court ordered a new trial. The Eleventh Circuit affirmed the granting of a new trial. On appeal to the U.S. Supreme Court, the Court indicated that the Eleventh Circuit's affirmation of a new trial may be correct, it erred in holding that the use of the word "boy" alone was not evidence of discrimination unless it was modified with a racial classification like "black" or "white." The Court stated that the word "boy" standing alone is not always benign. The Court advised that the speaker's meaning depends on various factors including context, inflection, tone, local custom and historical usage. The case was remanded for proceedings consistent with the Court's clarification.
Comer v. Micor, Inc., et al. 436 F.3d 1098 (9th Cir. Feb. 1, 2006), holding that a non-signatory to arbitration agreement entered into by an ERISA plan is not required to arbitrate his claims. Smith Barney and Micor trustees entered into an agreement to manage the company's investments. The agreement contained an arbitration clause providing that "all claims or controversies" between Smith Barney and the trustees "concerning or arising from" any trustees accounts managed by Smith Barney must be submitted to binding arbitration. Comer, a participant in the plan, sued Smith Barney for breach of fiduciary duties. The court held that because Comer had not signed the agreement nor had he "knowingly exploited" the agreement containing the arbitration clause he was not equitably estopped from avoiding the arbitration provision.
Gober v. Ralphs Grocery Co., 137 Cal.App.4th 204 (Mar. 1, 2006), holding that a ratio of 6 to 1 punitive to compensatory damages is constitutional maximum that can be awarded in sexual harassment case. Plaintiffs alleged sexual harassment by store manager with a long history of prior complaints from employees and customers about his behavior. Ralph's held liable for punitive damages based on advanced knowledge of supervisor's unfitness in conscious disregard of employees' right to be free from sexual harassment. In addition to varying amounts of compensatory damages, the jury awarded $5 million in punitive damages to each of the 6 plaintiffs (ranging from a ratio of 25-1 to 100-1). The Court of Appeal reduced the punitive damage award to a 6-1 ration for each Plaintiff as the constitutional maximum under the facts of this case. The court looked to (1) the degree of reprehensibility of the defendant's misconduct; (2) the disparity between the actual or potential harm to plaintiff and punitive damages award; and (3) the difference between the punitive damages awarded by the jury and the civil penalties authorized in comparable cases. Thus, the court looked at what Ralph's knew or should have known and what it did or failed to do with regard to the harasser's prior misconduct in order to determine maximum ratio of punitive damages as 6-1.
Harman v. City and County of San Francisco, 136 Cal.App.4th 1279 (Feb. 22, 2006), holding that Civ. Code §§ 51.7 and 52.1 are not part of the Unruh Civil Rights Act and may be asserted as a separate cause of action in the employment context. Plaintiff may bring claims under Civ. Code §§ 51.7 and 52.1 for threats and intimidation in the workplace. Plaintiff alleged he was subject to retaliation, violence, threats and intimidation in the workplace because of his race. In addition to claims for wrongful termination in violation of public policy and retaliation, he asserted claims for violation of Civil Code section 51.7 and 52.1. Defendant demurred on the grounds that those sections are part of the Unruh Act and that under Rojo v. Kliger, the Unruh Act does not apply to employment cases. The court held that §§ 51.7 and 52.1 are not part of the Unruh Act and that Rojo does not bar employment cases from being premised on these statutes.
Hulteen v. AT&T Corp, 441 F.3d 653 (9th Cir., Mar. 8, 2006), holding that the Pregnancy Discrimination Act (PDA) which amended Title VII effective in 1979 does not apply to female employees and retirees of telecommunications company who allege discrimination in reduction of their retirement benefits because they were granted less service credit for their pre-1979 leaves than employees on temporary disability leaves, since nothing in the text of the PDA indicates clear congressional intent that statute was intended to be applied retroactively.
May 5, 2006
Posted by Cal Labor Law in New Laws & Legislation
U.S. District Judge Consuelo Marshall ruled a Redondo Beach City ordinance that made it illegal for day laborers to solicit work on city streets violated the First Amendment right to free speech. Click here for an article relating to the ordinance and here for an article pertaining to the recent ruling. The judge also said that the ordinance was drafted so broadly that it could prevent children from setting up lemon aid stands on the street and possibly stop girl scouts from selling cookies.
The Redondo Beach ordinance was drafted using language in a similar ordinance adopted in Phoenix, Arizona. The Phoenix ordinance was upheld by the Ninth Circuit Court of Appeals in 1986. California is part of the Ninth Circuit, but Judge Marshall found that there were differences between the two laws. The Redondo Beach City Attorney said that the City is considering an appeal of the ruling.