Tuesday, October 18, 2011

How Often Can An Employer Harass Before It Becomes Unlawful?

An interesting question isn't it?  One court recently said that three times was not too much harassment in a 4-year period.  Brennan v. Townsend & O'Leary Enterprises, Inc.,

Harassment is not unlawful unless it is based on a protected class, is unwelcome and is either pervasive or severe.  Pervasive means "a concerted pattern of harassment of a repeated, routine, or a generalized nature."  The three incidents involved the boss requiring a woman to were a veil with a plastic penis attached received at a bachelorette party, the boss dressed as Santa asking woman to sit on his lap at a Christmas party and asking personal questions, and the boss wearing a Santa hat at another Christmas party with the word "bitch" written on it.  (I bet those parties were interesting!) 

The court said that Ms. Brennan was out of luck.  It was not sufficiently pervasive.  The Christmas party incidents did not even occur at the workplace.  Nor was there anything "severe" coupled with the acts. 

It is interesting to read the case.  Ms. Brennan was close to Mr. O'Leary, the boss.  She considered him a friend with whom she did share some personal information. 

But when a job is lost or other issues arise, it is not uncommon for an employee to identify past acts as unwelcome and hostile.  This is why it is so important for business owners and managers to keep a professional relationship with staff.  Just like we hear on all the cop shows, "Whatever you say or do will be used against you in a court of law." 

But then, if you are feeling lucky ... you may have three free shots.  And if you take the chance I am here ready to defend you ... and take your money in doing so.  (So don't take the chance.)   

Did You Ever Want To Sue Your Employee Or Ex-Employee?

That is exactly what Nicholas Labs did.  It sued its former employee, Christopher Chen, for competing with the company when he was in the company's employ.  The company concluded that Mr. Chen diverted business opportunities away from Nicholas Labs to his own business. 

As any good employee would, he cross-complained against Nicholas Labs, contending that under Labor Code section 2802 he was entitled to indemnity for defending himself against the lawsuit.  In other words, he wanted Nicholas Labs to pay the legal fees and other expenses he incurred defending himself against the claims by Nicholas Labs. 

Eventually, Nicholas Labs dismissed its complaint against Mr. Chen.  The court does not explain why; however, I suspect the company realized that either its claim was poor or that it wouldn't get any money out of him anyway.  Nevertheless, Mr. Chen's cross-complaint for indemnity went forward. 

Section 2802 of the Labor Code requires an employer to indemnify its employee for "all necessary expenditures or losses incurred by the employee in the direct consequence of the discharge of his or her duties."  The court concluded that the term "indemnify" refers to situations where a third-party sues the employee, and not to situations where the employer sues the employee. 

In the end, good news for employers.  Employees cannot ask you to pay for the legal fees they incur defending lawsuits prosecuted by the employer.  But employers should still exercise caution.  Economically, lawsuits against employees rarely payoff for the employer.  Employees are generally without funds to recover.  Filing a lawsuit can be an expensive, and unsatisfactory, exercise for the company. 

Monday, October 17, 2011

Oral Arguments Scheduled in Brinker

The Supreme Court has announced that on November 8, 2011, three years after taking the case, oral arguments will be held.  What the court does in this case will have substantial impact. 

The parties to the case can't even come to terms on the nature of the issues to be addressed by the court.  Of course, we are all very interested to learn whether an employer must ensure that an employee take his/her meal period or whether an employer complies with the law simply by making the meal period available to the employee. 

However, there is another, very compelling question the court will address.  The court has asked the parties to address whether courts can accept survey and statistical evidence as a method for proving meal period, rest period or "off-the-clock" claims on a classwide basis.  This issue can have a substantial impact on all employers. 

The plaintiffs argue that survey and statistical evidence can and should be used even if the court adopts the "make available" standard for the taking of meal and rest periods.  Plaintiffs say that Brinker's uniform policy and centralized timekeeping system, combined with "representative" testimony of 26 employees is a sufficient basis for prosecuting a class action lawsuit with 59,000 employees. 

Of course, the defendant claims that it does not have a uniform policy of preventing employees from taking meal periods.  Moreover, the decision as to the use of a rest period depended on each particular employee and particular manager.  Thus, the case focuses on the particular facts and circumstances of each employee. 

I suspect that the court will adopt some class action standards that will govern other employment cases, regardless of the outcome of the first issue -- whether the employer must ensure compliance with meal and rest periods or simply make them available. 

I also suspect that if the ruling is not somehow favorable to employees that our Democrat-controlled Legislature will send a bill to our Democrat Governor to make sure that an employer compel the use of rest and meal periods.  And that would be an unwise move on the part of our government. 

Employment laws in California are too complicated.  There are too many rules and too many technicalities.  It is too easy for a good employer (which I believe most are) to unwittingly violate wage laws.  And they often do it in an effort to benefit an employee. 

For example, consider the employee who prefers to leave work early as opposed to take a lunch.  I have had clients permit their workers this favor.  Unfortunately, when an employee loses a job he/she often looks for revenge or some way to get back at the employer.  I have seen many cases where an employee filed a complaint because the employer did not technically comply with the meal mandate.  That resulted in payment of the 1-hour premium pay as well as the 30-day waiting period penalty. 

It's time for government in California to wake up.  There are sufficient laws to protect employees.  Make it easier for employers and employees to structure their workdays, enjoy life, and avoid lawsuits. 

Tuesday, October 11, 2011

Changes to Credit Checks in California

Over the past few years there has been substantial debate about the use of credit reports for employment purposes.  Many foes of the practice have contended that with the bad economy, skyrocketing medical bills and other economic woes, many people have bad credit yet can be good employees.  They argue that disqualifying applicants with bad credit will keep many people unemployed. 

Over the weekend Governor Brown signed Assembly Bill 22 which impacts an employer’s right to conduct credit report checks.  AB 22 limits the positions for which a consumer credit report can be performed and requires additional notices before and after a check is conducted. The law becomes effective January 1, 2012. 

Sierra HR Partners has updated its forms to reflect the new law and will provide them to clients for use in 2012.

What has changed?
·        A consumer credit report may be conducted for persons applying for the following positions only:
·         A managerial position;
·         A position in the state Department of Justice, a sworn peace officer or other law enforcement position;
·         A position for which the law requires that a consumer credit report to be obtained;
·         A position that involves regular access to the bank or credit card account information, social security number, and date of birth for any person (except for routine credit card solicitations or applications);
·         A position that requires the person to be named signatory on company bank or credit card accounts;
·         A position that authorizes the person to transfer money on behalf of the employer;
·         A position for which the person is authorized to enter into financial contracts on behalf of the employer;
·         A position that involves access to confidential, proprietary or trade secret information; and
·         A position that involves regular access to cash totaling $10,000 or more during a workday.
·         Before conducting a consumer credit check, the employer must provide written notice to the applicant indentifing the specific basis for conducting the check (Pre-report notice).  The notice must include a box that the applicant can mark on the order to obtain a copy of the report. 

·         If employment is denied based partially or completely on the consumer credit report, the employer must so advise the applicant and provide the name and address of the reporting agency (Post-decision notice). 

Note:  A consumer credit report is defined as any written, oral, or other communication of any information by a consumer credit reporting agency bearing on a consumer's credit worthiness, credit standing, or credit capacity. These reports do not include verifying income or employment, and credit related information, such as credit history, credit score or credit record. 

What should I do now?
If you use Sierra HR Partners for your background checks, you are in a good position.  Sierra HR Partners will provide you with the necessary pre-report notice for the credit checks conducted in 2012.  You will need to send out your own post-decision notices to applicants if information in the consumer credit report affected your decision.  The notice can be simple.  Include in your letter to the applicant, "The company has made its decision, based in whole or in part, on the consumer credit report conducted.  Sierra HR Partners, Inc. provided the consumer credit report for the company." 

I advise all employers to conduct background checks for its applicants.  A background check is a valuable source of information in the hiring process.  Sierra HR Partners offers comprehensive background investigation services at competitive rates.  Please feel free to contact them at 559-431-8090.