Friday, April 26, 2013

The EEOC Hates These Apples!

There is a great scene in a very old movie, The Jerk, where a crazed killer is shooting at Steve Martin's character.  Steve is working at a gas station, standing next to some oil cans.  The shots miss Steve and hit the oil cans.  When advised of the shooter, Steve yells out, "He hates these cans."  He runs to another location for safety but the shots keep coming.  He then realizes he is near more cans.  It's a funny scene.  If you want a few yucks, click here and watch it.  Sorry, there are a few vulgarities, but rather mild by today's standards. 

I'm thinking the EEOC hates apples.  It filed two lawsuits against Evans Fruit in the Yakima, Washington area.  In the first lawsuit, the EEOC claimed that 14 female workers were subjected to a sexually hostile work environment.  The jury rejected the claim and found in favor of Evans Fruit. 

The second case alleged that Evans Fruit retaliated against employees for participating in its discrimination investigation.  That's what the EEOC does you know.  It asks other employees if they are aware of any unlawful practices.  I really hate that.  I think that this practice actually encourages people to exaggerate or even fabricate stories.  Of course, the EEOC then tries to use the evidence to expand its investigations and lawsuits.  These types of investigations and meetings create litigation and contention where it did not exist and need not exist. 

The EEOC held a meeting for workers at the local library.  Evans Fruit sent two employees to see what the EEOC was doing.  The employees sat and listened.  They did not participate.  They did not yell.  They did not threaten.  They merely observed the actions of a taxpayer funded entity as it held a meeting at a taxpayer funded, and public, library. 

Turns out the EEOC did not like people listening.  So it filed a complaint against Evans Fruit alleging retaliation.  This case didn't go far.  The court dismissed the action, concluding that without evidence of threats, there is nothing to connect any actions by Evans Fruit with the library meeting. 

I hope the EEOC focuses its efforts on apples.  I'm afraid, however, that the EEOC doesn't like oranges, peaches or other fruit and vegetables grown in California either.  Or perhaps it is more accurate to say they don't like those "unsophisticated" farmers and other agricultural employers. 

And just for a few more yucks, I will send a Jamba Juice card to the first person who emails me the full name of Steve Martin's character in The Jerk.  The Orange Dream Machine will take your mind off apples and the EEOC. 

Monday, April 22, 2013

FEHA Disability Regulations -- Invitation to Our Legal Beagle Bagel Breakfast Training Course

The DFEH disability regulations were modified effective December 30, 2012.  These are the first changes since 1996.  Disability complaints now comprise 57 percent of the complaints filed with the Department of Fair Employment and Housing. 

Our office will hold a training course on the regulations April 30th.  If you are interested in attending, just click here

(FYI, we hold training courses for employers every month.  We refer to them as Legal Beagle Bagel Breakfasts.  Yes, we do serve bagels.) 

Friday, April 19, 2013

The Impact of the Private Attorneys General Act on Employment Claims

In 2004 California enacted the Private Attorneys General Act (PAGA).  (Cal. Labor Code sections 2698 - 2699.5.)  The law allows persons to sue on behalf of the Labor and Workforce Development Agency (Agency) for violations of the Labor Code.  The person suing is entitled to seek the penalties the Agency could seek if it had filed the action.  If the person prevails (s)he keeps 25 percent of the penalties while the Agency takes 75 percent.  Attorneys' fees are also available under PAGA. 

There was a rash of lawsuits when the law was first enacted.  Employers found it was less expensive to settle these lawsuits as opposed to fighting them, even if the merits of the lawsuits were questionable.  The lawsuits were so prevalent that PAGA was amended to require a potential plaintiff to notify his/her employer of the alleged wrongful act or behavior.  If the employer "cured" within a month, then the plaintiff is unable to move forward with a lawsuit. 

PAGA appears to be in fashion again.  Over the past few years courts have made class action wage and hour cases more difficult for plaintiffs to win.  (Frankly, that's a good thing.  It seems those cases are designed more for the pocketbook of the lawyer than for the recovery of the wronged employee.)  With the difficulty presented in class action lawsuits, plaintiffs' lawyers have returned to PAGA. 

Take, for example, the employee who has not been properly paid his/her overtime compensation.  The employee can sue on his/her own and on behalf of other aggrieved employees.  In addition to the unpaid wages, the employee can seek penalties under PAGA.  The default penalties under PAGA are $100 for the first offense, $200 for subsequent offenses.  In this case, penalties rack up with each pay period.  Multiply the number of aggrieved employees by the number of payroll periods (26 pay periods in my example) and you can arrive at a very healthy penalty.  If you had 25 aggrieved employees the penalty would be ($100 x 25 employees) + ($200 x 25 pay periods x 25 employees) = $127,500.  Ouch. 

Employers should audit and monitor pay practices.  They should determine whether employees who are exempt are performing exempt-level work.  These preventative practices take effort, time and some money.  However, it can save an employer hundreds of thousands of dollars in damages, penalties and attorneys' fees in the event of an employee's successful lawsuit.  I tell clients, "You can pay me now or pay me later and it is always more later."  That really is true.  Spend a few dollars on compliance to avoid big bucks on litigation.  Of course, if you don't, I'm still ok with that.  You will pay me more to defend your case. 

Wednesday, April 17, 2013

Occupational Assumption of the Risk

Can an employee assume the risks associated with the job and thus lose the ability to sue a third-party for an injury?  That's what a California Court of Appeal concluded in Gregory v. Cott.  And now the California Supreme Court has decided to review the decision. 

Ms. Gregory worked as a caregiver for a home care agency.  Mr. Cott contracted with the agency to provide a caregiver for his wife who suffered from Alzheimer's.  Mr. Cott told the agency that his wife would bite, kick, hit and scratch. 

Ms. Cott tried to grab a knife from Ms. Gregory as she was washing it.  Ms. Cott cut Ms. Gregory who suffered serious injury.  Ms. Gregory sued the Cotts for the injuries inflicted upon her.

Assumption of the risk is a concept in recreational cases.  The question is whether the person engaging in a recreation, such as skiing, assumes the risks associated with skiing, such as injuries when falling.  The assumption of the risk doctrine has been applied some work settings.  The "fireman's rule" was adopted that prevents a firefighter from suing the public when injured in the line of duty. 

The occupational assumption of the risk doctrine was applied to a worker who cared for an Alzheimer's patient confined to a facility in Herle v. Estate of Marshall (1996) 45 Cal.App.4th 1761.  In Gregory v. Cott, the court concluded that the same occupational assumption of the risk doctrine should apply regardless of the patients' location.  Sounds logical.  Why should a defendant be subject to liability for hiring someone to prevent the very harm that occurred. 

Now the Supreme Court is in the fray.  This will be a critical issue for the home care industry.  It is a vital issue for those who invite caregivers into their homes and who could lose their assets or estates in defending these types of lawsuits. 

Friday, April 12, 2013

When is an Intern Really an Intern?

The weather is warming up.  Spring break has concluded.  Students are getting closer to summer break and looking for jobs and even internships.  Students prefer jobs to internships because they can earn some money.  But they will take the experience.  Employers like the term internship because they think that compliance with wage laws is not necessary.  Is it true? 

Under wage law, any person who is "suffered or permitted" to work is employed and must be paid.  Under California law, if a worker is subject to the control of the principal, the worker is employed and entitled to wage protections. 

So then when is an intern an intern as opposed to an employee who is entitled to minimum wage, overtime and the many other benefits provided by law? 

The Department of Labor identifies six critical factors.  Read about them here.  In essence, it is a service to the intern and provides no benefit to the business. 

The California Division of Labor Standards Enforcement has taken the position that the internship must be a part of a course provided by an accredited institution.  Read about it here

Bottom line -- Most of you don't engage interns.  You hire employees.  Call them what you want but realize they are employees.  They are entitled to minimum wage, overtime, meal periods, rest periods and all of those other crazy California benefits.  They might even be entitled to participate in your health care or retirement plans. 

It's also much easier to pay $8 per hour than to pay legal fees in the event of a claim. 

Monday, April 8, 2013

Do You Pay a Piece Rate or for Flagged Hours? Employer Beware!

On April 2, 2013 the California Court of Appeal published its decision in Gonzalez v. Downtown LA Motors, LP, 2013WL 1316514.  The decision will have a wide-reaching and substantial financial effect on automobile repair facilities that pay employees on a flagged hour basis.  This decision will have an equal impact on any employer who pays its employees on a piece-rate basis.  We are apprising you of the court’s decision so that you can take steps to modify pay practices, if necessary.  We encourage you to seek legal advice as you make the change. 

Downtown LA Motors paid its employees like many in the automobile repair business, on a piece-rate system, using the flagged hour basis.  Technicians were paid a flat rate for each flagged hour (s)he accrued.  Technicians accrued flagged hours only when working on a repair. 

Downtown LA Motors also kept track of the time a technician spent in the workplace, whether or not working on a repair.  At the end of a pay period, the company calculated how much a technician would earn if paid an amount equal to total hours on the clock multiplied by the minimum wage.  If the technician’s compensation fell below this minimum wage floor, the company supplemented the pay to meet minimum wage. 

Technicians filed a class-action lawsuit contending that the company failed to pay technicians a minimum wage during the time they were waiting for customers or performing non-repair work.  They claimed that the company should have paid the flagged hour rate for time spent performing repairs, and then paid additional compensation at minimum wage for all other non-repair hours.  Those employees who no longer worked for the company also sought waiting period penalties under Labor Code section 203. 

The outcome of the case hinged on the meaning of section 4(B) of the wage order.  This provision reads:  Every employer shall pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise. 

The Division of Labor Standards Enforcement (DLSE) contends that per this provision, the obligation imposed an employer “to pay minimum wages attaches to each and every separate hour.”  (Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314; DLSE Op. Ltr. 2002.01.29.)  In contrast, the federal government interprets the obligation to pay minimum wage to extend to the total number of hours worked, and not to each hour separately. 

To illustrate its point, the court provided an example.  If a technician works four flagged hours at $20 per hour and then leaves, (s)e earned $80 during the 4-hour period.  However, if a second technician works four flagged hours at $20 per hour but is required to remain in the workplace and perform non-repair work or wait until his/her 8-hour shift ends, (s)he earns the effective rate of $10 per hour

Under the Gonzalez case, the second technician is entitled to four hours at minimum wage in addition to the $80.  If his/her employment terminated before you paid the additional $8 per hour for non-repair work, you would be required to pay a penalty for late payment of wages. 

If your business pays employees a piece rate but not an additional wage for other work, you should seek legal counsel to determine how to correct the company’s pay practices.  This pay practice could result in substantial liability to the company. 


Friday, April 5, 2013

Cheer Up! It Could Be Worse -- You Could Be Working For Me

It's Friday.  So here is something on the lighter side of things. 

Forbes is reporting that an associate attorney is the most unhappy job in America.  That's probably why Travis and Amanda look so glum most of the time.  So the next time you see them, pat them on the back and let them know, "This too shall pass." 

What are the other unhappiest jobs in America?  Customer service representative, clerk, registered nurse and teacher.  Doesn't that make you feel good?  The very people whose job it is to interact with you are the unhappiest.  Perhaps that's it.  The problem isn't the job, it's you.  They have to deal with the public.  So why then are associate attorneys so unhappy.  Their primary responsibility is not to deal with the public.  ... Oh yeah, it just hit me.  They have to take orders from my partners. 

On a more serious note, it is important to recognize that an unhappy worker is more likely to sue the company.  Consider, for example, the lawsuit between Alexandra Marchuk and her former law firm, Faruqi & Faruqi.  Marchuk claimed that a partner at the firm, Juan Monteverde, sexually harassed her.  The allegations are serious.  I won't reprint them here.  If interested, you can read it for yourself on the Internet.  The law firm took the unusual step of filing a counterclaim against Marchuk.  It claims that Marchuk has defamed the firm, misappropriated confidential information, and is engaging in malicious prosecution.  The firm claims she was infatuated with Monteverde.  The firm wants $15 million in damages. 

We will see what happens with Marchuk, Monteverde and the law firm.  It would be very unusual for me to recommend any employer filing a counterclaim against an employee who claimed sexual harassment.  It exposes the business to yet another claim -- retaliation.  And the fact that the law firm has attacked with venom may convince a jury that punitive damages are warranted against the law firm. 

Obviously, Marchuk was an unhappy associate.  And I doubt there are many happy employees, associates or partners at Faruqi & Faruqi. 

FYI, my partners (at least most of them) are pretty good people to work for!

Thursday, April 4, 2013

$4.5 Million For Bad Timing

Last week a San Diego jury awarded an employee-plaintiff $4.5 million.  (Steffens v. Regus Group PLC. ). During an evaluation, Denise Steffens complained that she could not give her staff breaks because the company did not provide adequate coverage.   After Steffens left the room a senior manager instructed a supervisor to get rid of her.

Surprisingly, the company took the case to trial.  It relied on the theory that a jury should reject Steffens' claim if it concluded that the company had a basis for firing Steffens irrespective of her complaint.  By the way, the company's reason for termination was that Steffens did not have a positive attitude.  (Perhaps that was due to the inadequate staffing?).

This case illustrates what I believe is one of the primary reasons employers get sued -- timing.  When adverse action comes soon after an incident such as a a complaint, pregnancy, injury or leave of absence, an employer is buying a lawsuit.  A jury is not likely to believe an employer when it says the employee was no good but waits until after an incident to fire her.  The only logical explanation, concludes many juries, is that the employer wanted to get rid of the employee because of the incident.    

So how long must an employer wait to fire an employee after an incident?  That is a good question.  But if an employer is smart, it won't be forced to answer that question.  A smart employer will fire the problem employer before an incident occurs.  Problem employees never get better. If you have a problem employee, let him/her go today.  Don't wait until tomorrow.

Wednesday, April 3, 2013

Kaweah Delta Hospital, English-Only Rules and Third Parties

I was amused to read the story in the Visalia Times-Delta last week on the policy at Kaweah Delta Hospital District to encourage employees to speak English during meal or rest periods as well as during work.  Interestingly, the District is not compelling employees to speak English, just encouraging English speaking.  The rationale for this practice is to promote positive employee relations.  Actually, it seems smart to me.  Every time I have been asked to opine on English-only rules (as they are called) it has been for this reason.  Others feel -- some rightly so and some out of more fear than reason -- that when others are speaking in a foreign language around them, it is so they cannot understand.  It's really no different than whispering so that another person can't hear what you are saying about him/her.   

The newspaper interviews "experts" to opine on whether the District's policy is legally sound.  A couple of HR professionals suggest that the District is close to or has crossed the line of discrimination.  An an official for the Equal Employment Opportunity Commission (EEOC) also suggests that the policy is unlawful. 

From my perspective, the hospital's rule does not violate the law.  In fact, I'm not even sure the law, as articulated in an EEOC regulation, is really "the law".  By the way, the law is found in 29 C.F.R. Section 1606.7.  But when has that stopped an an all-knowing, wiser governmental agency?  (Note the sarcasm.) 

First, the hospital did not impose an English-only rule.  What it said, as I read it, is this:  Be considerate of others.  If you are speaking a foreign language around them they might think you are gossiping or criticizing them.  But I suspect that if employees could not speak English without difficulty, no one would fault them for speaking their native tongue. 

Second, the English-only regulation has been criticized by the courts.  The rule attempts to impose a burden on employers to justify their policy without an employee bearing the burden of proving discrimination.  Moreover, courts have indicated that imposing even an English-only rule is justifiable to reduce tension within an office, to improve interpersonal relationships and to prevent those who can't speak the foreign language from being alienated. 

What do I learn from all of this?  (1) Newspapers try to stir up controversy to create a story; (2) even so-called experts don't necessarily apply the law correctly; (3) government agencies will say what will justify their existence; and (4) get good legal counsel to help when implementing workplace changes.  From my understanding of the hospital's policy, it's valid.  Looks like the hospital did its homework.