California Employment Attorney Blog

In another blow to California employers, a California appellate court recently broadened the liability risk employers face for class action lawsuits.

The California Industrial Welfare Commission's Wage Orders regulate standard working conditions such as overtime, breaks, and minimum wage. Employee lawsuits have historically focused on these run-of the-mill provisions. But, in a November 2010 ruling, the California Court of Appeal for the Second District dealt a body blow to employers by ruling that an obscure regulation, "suitable seating," constituted a valid claim under California law.

In Bright v. 99 Cents Only Stores, the plaintiff brought a class action suit on behalf of hundreds of current and former employees under the California Private Attorneys General Act of 2004 ("PAGA"). She alleged that the employer failed to provide cashiers with suitable seats, in violation of IWC Wage Order 7, § 14. After a Los Angeles Superior Court judge held that the plaintiff could not sue under PAGA for the seating violation, the plaintiff appealed. The Court of Appeal determined that suitable seating is a "standard condition of labor" under Wage Order 7, and that consequently, the employee could use PAGA to enforce compliance. Under PAGA, an employee can collect penalties on behalf of current and former employees.

Continue reading "California Employers Exposed to Liability for Obscure Work Regulation Lawsuits" »

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" »

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" »