California Employment Attorney Blog

In a recent sexual harassment verdict from Sonoma County, California, a jury awarded more than two million dollars to a former card dealer at The 101 Casino. The jury determined that the plaintiff's supervisor had sexually harassed her, and then retaliated against her when she reported the abuse. In making its award, which included $516,000 in past and future damages, as well as $1.5 million in punitive damages, the jury was persuaded by evidence of a pattern of sexual harassment at the casino.

The plaintiff chronicled several incidents of offensive behavior, including sexual double entendres and inappropriate gifts, which went unaddressed despite being reported to management. For example, the plaintiff's supervisor brought in a promotional pen for the erectile dysfunction drug Levitra, and showed female employees how the pen grew lengthwise. In a separate incident, the same supervisor gave the plaintiff a candle as a gift and told her to think of him while she took a candlelit bath. After the plaintiff complained about her supervisor's unwelcome advances to the casino's human resources staff, her supervisor began disciplining her for minor or fabricated problems, and ultimately fired her.

At trial, the plaintiff introduced the testimony of four female employees who said they too had been sexually harassed at the casino, including testimony from the casino's human resources manager. The jury's total award of nearly two million dollars constituted two-thirds of the casino's net worth.

Continue reading "Massive California Harassment Verdict Gives Employee Two-Thirds of Employer's Net Worth" »

In the latest tragic outburst of workplace violence, Omar Thornton, a driver for a Connecticut beer distributor, murdered eight of his co-workers and wounded two others before killing himself. Thornton brought two 9 mm handguns to work on the morning he was scheduled to attend a disciplinary hearing to review claims that he had stolen company beer. After being confronted with surveillance footage showing him stealing the beer, Thornton agreed to resign. Moments later, he retrieved the guns, murdered the two men who had attended his hearing, and went on a killing spree throughout the facility.

Although heartbreaking incidents like this are shocking, murder by disgruntled employees is the least common form of workplace homicide, claiming fewer than 100 victims a year. For every murder, however, there are countless incidents of less severe forms of violence that employers must attempt to prevent. Employers face potential liability for failing to terminate employees that show signs of potential violence. Employers of all sizes must maintain a safe work environment, and should implement a violence protection plan.

Continue reading "Workplace Violence Always a Cause for Employer Concern" »

Many businesses utilize independent contractors as part of their daily operations. Contractors are often favored by businesses over full time employees, because they allow for flexibility in retention and scheduling, are not entitled to government-mandated benefits such as workers' compensation, and are typically not offered costly benefits such as health insurance. A problem often arises, however, when the business seeks to take advantage of these positive aspects of the relationship, yet also wants to control how the contractor performs his duties.

Recently, the federal Ninth Circuit Court of Appeals addressed alleged misclassification of employees as independent contractors. In Narayan v. EGL Inc., No. 07-16487 (July 13, 2010), the plaintiffs were California-based drivers for a freight delivery service, Eagle Freight Systems, Inc. (EGL). They had signed an agreement that indicated they were independent contractors. The agreement designated Texas law as the law to be applied in any dispute over the agreement's terms. The drivers subsequently sued EGL, alleging that they were in fact employees, and sought damages under California law for overtime, expenses, and meal break compensation, among other things. Ruling that the matter was governed by Texas law, the district court granted EGL's motion for summary judgment. On appeal, the Ninth Circuit reversed.

The Ninth Circuit first determined that California law applied, because the dispute involved benefits provided under the California Labor Code, not the agreement. The Court then reviewed the relationship between the drivers and EGL. In California, a worker can establish a prima facie case of employment by demonstrating that the worker provided services for the employer. The burden then shifts to the employer to prove that the worker was in fact an independent contractor by overcoming the multi-factor test adopted by the California Supreme Court in S.G. Borello & Sons, Inc. v. Dept. of Industrial Relations (1989) 48 Cal.3d 341.

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"At will" employment benefits both an employer and an employee by allowing either party to terminate the relationship at any time. Although it is long established that "at will" employment covers termination, does it also envelope demotions, salary decreases and bonus determinations? In a recent decision, a California court ruled that at will employment applies to lesser forms of discipline and to unilateral changes in terms of employment.

In Singh v. Southland Stone, No. B208620 (July 1, 2010), the plaintiff was hired as a manager for internet sales at a rate of $10,000 per month. In order to take the job, he relocated with his family from India. The company informed him that he was hired as an at will employee with no contract rights to ongoing employment. After nine months, the defendant reduced Singh's salary from $10,000 to $5,000 because of its displeasure with Singh's performance. Eight months later, the plaintiff resigned and filed a lawsuit asserting, among other claims, that Southland Stone had breached its employment contract. The trial found in favor of the plaintiff but on appeal, the court reversed.

In its opinion, the Court held that the at will statute, California Labor Code § 2922, creates a presumption that employment is at will unless it can be overcome by an express or implied contract. Since the statute presumes that an employee may be discharged at will, it also extends to other forms of discipline and unilateral changes in the terms of employment.

Continue reading "Does "At Will" Status Cover Demotions, Salary Decreases and Bonus Determinations?" »

In the past month, the immigration debate has reached a fevered pitch, polarizing individuals into those who support measures such as Arizona's controversial immigration law and those who condemn it as illegal. The Arizona governor and members of its legislature have long stated that they had to act because the federal government has failed to pass a comprehensive immigration law and help Arizona close its porous border. While that issue garners attention, employers may be surprised to learn that the Obama administration has quietly begun implementing a new immigration strategy that targets employers who hire illegal immigrants.

Recently, Michel Malecot, a high-profile restaurant owner in San Diego, was indicted on 12 felony counts of knowingly hiring illegal immigrants when federal authorities raided his eatery and discovered a staff of illegal immigrant workers. If convicted, he could face a maximum of five years in prison, a fine of $250,000 per count, and the federal seizure of any property that was used in the perpetration of his alleged crimes.

Obama's strategy stands in contrast to that of the Bush administration, which conducted work-site raids that targeted employees rather than employers. Although thousands of illegal workers were prosecuted, few employers were held accountable for their hiring practices and new illegal immigrants replaced those who were deported.

Continue reading "Employers Face Stringent Penalties for Knowingly Hiring Illegal Immigrants" »

Many employees are asked to sign an arbitration agreement when they begin a new job. Often, they are so excited about their new position that they glance over the agreement without fully understanding how its provisions may affect their future rights if they are later terminated. In many cases, as an employee moves through her career with a particular employer, she has long forgotten the arbitration agreement until a dispute arises.

Arbitration agreements regularly contain provisions that deal with statutory rights. In contrast to the rights given to you by your contract of employment, statutory rights are conveyed to you by a legislative act. Many of these statutory rights, such as your right to recover overtime or receive minimum wage are unwaivable. Certain arbitration agreements mandate that the employee sign the agreement and contain time barring provisions dealing with unwaivable statutory rights, or the period of time in which an employee can bring a claim against her employer before she is forever prohibited from raising that claim. A tension arises when the employee tries to raise a claim that is unwaivable but is barred because she did not file a timely arbitration matter.

The California Supreme Court recently ruled on a suit involving mandatory employment arbitration agreements that contain these provisions.

In Pearson Dental Supplies, Inc. v. The Superior Court of Los Angeles County No. S167169, Supreme Court of California (April 26, 2010), the plaintiff, Luis Turcois, was employed by Pearson Dental Supplies as a janitor until his termination in 2006. During his employment, he signed a mandatory arbitration agreement that contained a provision dealing with unwaivable statutory rights. Based on this agreement, if Turcois failed to raise his employment claim within a year, he would be prohibited from raising it in any future legal forum.

Continue reading "California Supreme Court Addresses Mandatory Employment Arbitration Agreements" »

The U.S. Equal Employment Opportunity Commission ("EEOC") reports that since 2005, Pregnancy Discrimination Act ("PDA") claims have risen almost twenty four percent more than any other job-bias allegations. In the fiscal year 2005, the EEOC received 4,730 pregnancy discrimination claims. That number grew to 6,285 in fiscal year 2008. Claims decreased slightly in fiscal year 2009, to 6,196. The PDA was enacted in 1978 as an amendment to Title VII of the 1964 Civil Right Act, which bans job discrimination based on sex, race, color, religion and national origin. The act prohibits job discrimination,"because of or on the basis of pregnancy, childbirth, or related medical conditions."

Experts point to two key explanations for the disproportionate rise of pregnancy discrimination claims. Due to economic necessity, more pregnant women are in the workforce today than in 1978. Experts also cite the economic downturn -- discharged workers often bring discrimination claims as a last alternative.

The significant increase in claims makes it imperative that employers understand and comply with pregnancy laws. California's Fair Employment and Housing Act protects women from workplace discrimination based on sex, which includes discrimination based on pregnancy, childbirth, and medical conditions related to childbirth. In addition, California employers with five or more employees must provide up to four months of leave to employees disabled by pregnancy, childbirth, or related medical conditions. Furthermore, the California Family Rights Act provides eligible employees of employers with fifty or more employees up to twelve weeks of "baby bonding" leave. And, the federal Family Medical Leave Act provides additional pregnancy leave rights.

Continue reading "Pregnancy Discrimination Claims Exceed All Other Job-Bias Claims " »

The U.S. Department of Labor has launched a campaign, "We Can Help," to encourage workers in certain industries, including construction, janitorial work, hotel/motel services, food services, and home health care, to notify the agency of suspected wage and hour law violations. The agency is relying on tips from worker advocacy groups, and has hired more than 250 additional investigators, a 33% increase, in an effort to increase pressure on employers. The effort is spearheaded by the agency's Wage and Hour division. The agency is also rolling out a publicity campaign that includes a new web site, an (800) number, and bilingual public-service announcements in Spanish and English. The ads feature activists like Dolores Huerta, co-founder of the United Farm Workers of America, and actor Jimmy Smits. In addition, the agency and other groups, such as the AFL-CIO, will distribute posters, fact sheets, and booklets on how to report complaints.

California employers are already facing an overwhelming amount of class action wage hour lawsuits. A Los Angeles Superior Court Judge tasked with handling complex class actions recently estimated that of the 790 class action lawsuits filed in California in 2009, 2/3 to 3/4 involved wage and hour claims.

Continue reading "U.S. Department of Labor Increases Wage Hour Pressure on Employers " »

In the 1990s cult classic, "Falling Down," a hapless engineer played by Michael Douglas finally snaps after getting caught in evening gridlock. Although most of us don't react to traffic in the same manner as Douglas' character, our daily commutes are nonetheless often marred by frustration. But what if your employer were required to compensate you for your commute to work?

Employers in California may soon be facing this reality when employees drive company vehicles in certain situations.

In Rutti v. Lojack Corp., No. 07-56599, the Ninth Circuit Court of Appeals held that the plaintiff, a Lojack technician, could seek compensation for time spent commuting to worksites in Lojack's vehicles.

Under California law, an employee may be considered "working" when the employee is merely subject to an employer's control. An employer must pay at least minimum wage for all "hours worked." California Industrial Welfare Commission's Wage Order 4-2001, § 2(K)

Continue reading "Commuting Time of California Employees Held Compensable In Certain Circumstances" »

In a unanimous decision the California Appeals Court recently ruled that California's "kin care" statute does not apply to all compensated time off for illness, but is limited to accrued sick leave.

In McCarther v. Pacific Bell Telesis Group et al., 2010 DJDAR 2487, the plaintiffs alleged that the employer violated Labor Code § 233 by failing to provide paid sick leave to employees caring for sick relatives.

Labor Code § 233 requires employers that provide sick leave to permit their employees to use, in any calendar year, up to half their accrued annual sick leave to attend to the employee's ill child, parent, spouse, or domestic partner.

The Court of Appeals had to decide whether the legislature intended to broadly define "sick leave" to include all compensated time off for illness, or merely a narrower definition of only accrued sick leave.

Continue reading "California Appellate Court Holds Kin Care Law Applies Only to Accrual Policies" »

Following on the heels of the Mattel v. Bratz trial, in which Mattel successfully sued Bratz for copyright infringement regarding the highly successful Bratz line, comes Starwood v. Hilton. Starwood has filed suit against Hilton, alleging that two of Starwood's key executives misappropriated thousands of confidential, trade secret documents and brought them to their new employment with Hilton, allowing Hilton to steal Starwood's concept for a new luxury hotel chain.

The executives were president and vice-president of Starwood's luxury-brand group, and were key to the success of Starwood's W Hotel chain. Starwood alleges that after Hilton began recruiting the executives, they begin misappropriating over 100,000 documents containing confidential information relating to a new luxury hotel brand that Starwood was developing.

Continue reading "Hotel Titans Clash over Trade Secrets" »

A California Court of Appeal issued a decision an employment law decision on arbitration this week that is remarkable in the clarity of its logic. In Roman v. Superior Court, the appellate court considered whether an agreement to arbitrate employment-related claims was enforceable. The arbitration agreement contained a clause providing, "I agree, in the event that I am hired by the company, that all disputes and claims that might arise out of my employment with the company will be submitted to binding arbitration."

The employee tried to prevent her case (disability discrimination) from being submitted to arbitration. She claimed that the agreement was one-sided, requiring only the employee, not the company, to arbitrate claims. She also argued that because the agreement was a pre-printed, "take it or leave it" document, it was a contract of adhesion.

Continue reading "California Court Upholds Arbitration Agreement (Finally)" »

In Phillips v. TLC Plumbing, Inc., a California Court of Appeal addressed the issue of negligent hiring and retention, a common employment law stumbling block for companies. In the Phillips case, one of TLC's employees had been convicted for domestic violence and arson involving his former wife. TLC learned this about the employee when it hired him. The employee struck up a relationship with a customer while on a service call to her house. TLC terminated the employee a month later for misuse of a company vehicle, drug and alcohol use, and threatening a coworker. The terminated employee and the woman, however, became romantically involved and continued their relationship after the employee's termination. Approximately two years after his termination from TLC, the former employee shot and killed the woman. The woman's family then sued TLC for negligent hiring and retention.

TLC argued that it did not owe any duty of care to the plaintiff, because the murder had occurred two years after TLC terminated the employee. The California Appellate Court agreed, finding that "[B]ecause the employer-employee relationship ends on termination of an employee's employment, we conclude an employer does not owe a plaintiff a duty of care in a negligent hiring and retention action for an injury or harm inflicted by a former employee on the plaintiff even though that former employee, as in this case, initially met the plaintiff while employed by the employer."

The court also found it significant that the initial social relationship began outside of the employee's employment duties, and that the romantic relationship did not begin until after TLC terminated the employee. The court held that employers are not required to guarantee the safety of all customers or other persons that their employees come into contact with. And the employer cannot be liable unless it knows or should have known that the employee was unfit to perform his job duties.

Continue reading "California Employer Not Liable for Terminated Employee's Murder of Customer" »

The U.S. Supreme Court, in 14 Penn Plaza LLC et al. v. Pyett et al., a decision issued last week, held that a union and an employer can agree that employee discrimination claims will be submitted to arbitration only, and will not be filed in court. The Court overruled its 1974 decision that had long been relied upon by employment lawyers for the proposition that unions could not negotiate away an employee's right to sue in court for discrimination.

"As in any contractual negotiation, a union may agree to the inclusion of an arbitration provision in a collective-bargaining agreement in return for other concessions from the employer," the Court concluded. "Courts generally may not interfere in this bargained-for exchange."

The court's opinion involves federal anti-discrimination law, and thus is relevant to any California employer with a unionized workforce.

Continue reading "US Supreme Court Permits Unions to Agree to Arbitrate Discrimination Claims" »

A California agency erroneously paid out $1.3 million in unemployment benefits to workers that had been fired for misconduct - a stunning 25% of the unemployment benefits paid by the agency in the year. An outside auditor found that the agency repeatedly failed to provide adequate documentation regarding the terminated employees, and failed to respond within deadlines set by the California Employment Development Department (EDD). One worker that received benefits had been fired for refusing to cooperate with police after being involved in a drunk driving hit and run. Another had sold drugs and had been involved with a gang.

This example of phenomenal waste provides a useful lesson for California employers. A discharge for misconduct disqualifies an employee from receiving unemployment compensation benefits from the EDD. "Misconduct" is conduct that evinces willful or wanton disregard of an employer's interest and involves deliberate violations or disregard of reasonable rules of conduct set by the employer.

Continue reading "California Agency Pays Unemployment Benefits To Workers Terminated for Misconduct" »