This is the fun thing about employment law.  Just when the courts resolve some arcane aspect of wage and house law that other lawyers think is unbelievably esoteric, a new one pops up:

WageLaw:

Wage and hour lawyers are talking about a law and motion ruling made last week by Orange County Superior Court Judge David Velasquez, holding that waiting time penalties under Labor Code § 203 were recoverable as restitution under Business & Professions Code § 17203. In Ybarra v. Aramark Corp., No. 30-2008-00180008-CU-OE-CXC, the court treated section 203’s “wages of the employee [that] shall continue as a penalty” as ordinary wages.

This, of course, will touch off a big hullaballoo.

This particular statute is even more ambiguous than the meal/rest breaks because it says, “the wages of the employee shall continue as a penalty.”  This could mean it’s both a vested wage and a penalty, the latter being unavailable under the UCL.  Of course, this is a smaller issue because it is automatically capped at 30 days, but still raises all of the other questions that the rest/break “premiums” did, and it continues a trend.  The latter fact may be the most alarming for the defense bar.

I admire this lawyer’s creativity, even if I think this ruling isn’t correct and will only add fuel to the blowback fires that are already burning.

The always excellent UCL Practitioner has the order, here.

WageLaw: Paperboys are employees.

It’s more than a trend at this point, it’s a new rule: that person you think is in an independent contractor, isn’t.  When you’re doing a business-to-business transaction, you know it.  You don’t think there’s a chance for you to pay overtime to the Verizon guy that comes and sets up your DSL, right?  And if you do, you don’t set him up with a computer, a copy of quickbooks, and a business name, do you? No.

California Labor & Employment Law Review has an excellent article on jerks in the workplace and its associated costs, and the potential laws that would be created to address it. I would be extremely surprised if any tooth-bearing version of the “Healthy Workplace” bill, which would untether harassment claims from protected statuses.

Under existing law, you can get workers’ comp is you suffer emotional distress, or pursue other remedies if it gets bad enough.  The counterargument of course, is if it’s really costing money, business will naturally eliminate it.  And the courts have said for a long time they aren’t HR deparments of appeal–that’s what they’d become if that law passed.

More against McDonnel Douglas/Burdine [Workplace Prof]

WageLaw: Bell v. Sup. Ct. depublished.

CalBizLit has a concise summary of the circumstances under which defendants may (theoretically) claim attorneys’ fees in FEHA cases.

There was more good stuff this week, but I’ve been busy.

The materials linked on this page are an interesting read.

The best thing about this initiative is that it focuses on employer compliance, which is simultaneously most effective for employers and least effective for attorney billings.  Littler correctly sees the potential for its own earnings, and the truth of compliance being the best approach, as a big part of the way forward.

Also interesting is Appendix D, which is part of a questionaire Littler uses when doing audits.  Over the years we all develop our line of questions, but having it carefully systematized like that helps a lot.

Since I’ve started looking at potential cases on the Plaintiffs side, I’ve noticed that I focus on a few things a little bit differently.  One of those agrees with this statement in Littler’s materials: namely, that in any intake situation involving an employee, the attorneys quickly turn to wage and hour topics, no matter what the conversation starts with.

Ignoring potential sweeping reforms for a minute, what is to be done?  As things stand right now (in California) arbitration is basically becoming less effective by the day, and does not prevent class actions.  No one seems to think that the DLSE is an option, and bills trying to make it so fail. This situation puts plaintiffs in court and making class action allegations based on the “micro-technical” violations.

Littler’s white paper gets the answer right as far as I’m concerned: “total compliance” on the inside.  It’s really the best option under every employer’s own power.

Are BlackBerry/PDA lawsuits on the horizon? [Workplace Prof Blog]
Computer says, “yes.”

WageLaw: Another U.S. District Court rejects DLSE’s affirmative duty requirement regarding rest and meal periods.
I’m not sure why the District Courts aren’t following Cicairos.  There needs to be some sort of compromise on this issue, ultimately.  Is there a way that we can make sure employers provide breaks required by law without micromanaging employees’ routines?

Grad student bargaining rights embedded into law? [Workplace Prof Blog]

h/t Workplace Prof blog

This case states what I and others have long believed: the McDonnell Douglas requirement of a prima facie case is really nothing more these days than an unnecessary distraction.  This case is therefore significant because not only does it state that conclusion so bluntly, but also because it was joined both by Chief Judge Ginsburg of the D.C. Circuit and by labor law judge extraordinaire, Harry Edwards.

We’ll see if this gains any steam.  California’s jury instructions and case law have already mostly relegated that framework to motion practice, but it’s still there.

There are also some interesting comments at the above link.

Colorado to do away with “at-will” employment?

Carleton DiSante & Freudenberger on SB 1539.

The Sacramento Bee has an article on AB 2716’s mandate of offering sick days.  The bill’s author claims that mandated sick days would save business money on turnover costs and protect employees.  CalChamber is against it, and they are batting almost 1.000 with the incumbent Governor.

The U.S. Department of Labor is joining the San Franscisco universal healthcare program fight.  On the side of the employers, according to the San Francisco Chronicle. What’s interesting is that the DoL lawyers are joining the argument that federal law preempts the police power claimed by the City & County of San Francisco.  The federalism revolution is truly dead.

This case essentially held that the frivolous claim by the employee subjected the employee to liability for the employer’s attorneys’ fees because he failed to enter evidence that he couldn’t pay.

Question:  is there anyone out there who has ever heard of a small employer making the same argument?  I’ve represented a number of smaller companies or sole proprietors who could make that argument.

Something tells me not to hold my breath for a reply.

This week, the Legislature moved on all but one of the bills we’re tracking.  SB 1192 appears dead.  SB 1539 and 1583 passed their senate committe votes.  AB 2134, 2279, 2716, and 2879 passed assembly committees.  For a list of what these relate to go here.

SB 1192 was intended to reverse Murphy. Didn’t seem likely in the first place.

P.S. Yay! My tag links have been fixed!

Reading Tea Leaves On San Francisco Preemption Decision at Workplace Prof Blog.  Apparently the same panel that stayed the District Court’s decision enjoining the city’s universal health care plan will be hearing the full matter.

Employer favorable “make available” case?  [h/t Robin Weideman]

LA Times: EDD overwhelmed by flood of applicants.

San Jose Mercury News: It’s not Medi-Cal for all, it’s CalPERS for all.

SF Chronicle on Lonicki.

The “Butt Painter” settles his lawsuit for $65,000.00.  In short, a teacher was discovered to be painting with his derriere, and was fired.  ACLU took that case saying it violated 1st Amendment.  People are asking why so much.  In California, I think he might have gotten more.

WageLaw on Isner v. Falkerberg/Gilliam & Assoc., Inc. No pay for on-site property managers.

I’m still working on the tag problem.  Still no idea.

From Workplace Prof Blog:

Remarkably, state appellate courts confirmed only 56.4% of employee wins in arbitration. But when the same courts ruled on employer victories, they confirmed 86.7% of awards. The difference in rates was statistically significant. Similarly, federal appeals courts upheld 85.7% of employer wins. Lower courts behaved like appellate courts. These state courts confirmed only 77.6% of employee wins, while federal district judges enforced 92.7% of these awards.

The author, Prof. Michael LeRoy of the University of Illinois, suggests these two items as a solution: “Judicial review of awards in all courts should be limited to the four explicit FAA standards” and “arbitration losers who incur liability should be required to post judgment bonds if they challenge an award.”

That sure goes against what I’ve perceived to be the CW (specifically, that employees are doing everything they can to get out of arbitration and into the courts, probably so they can get a jury).  Arguably, this article is addressing a problem that arises after that determination has been made.  But, if the courts deem the process or arbitration to be fair and equitable enough not to disturb its awards, except in extremely narrow cases, why would they feel compelled to boot borderline cases out of arbitration in the first place?

The recent line of cases, at least in California, suggests that appellate courts here have lost almost all faith in consumer and employment arbitrations and seem only to suffer them because of the federal enabling legislation.  The flip side of that is a willingness to engage in more searching judicial review of a process which they do not think is fair.

This also forces me to rethink, at least a little of my employer-side arbitroskepticism®.  So, if you can compel the arbitration, and if you prevail, you probably will get your win confirmed (which is something like avoiding an appeal).

I’m replacing high-bandwidth, low-usage podcasts with posts. Here’s the first one.

• Last week, we took a look at the Metters case: another arbitration agreement is thrown out by the courts.  A number of BigLaw summaries of this case advised clients to review their arbitration agreements and the procedures related to getting them agreed to.  I disagree.  Even before these recent cases, it was apparent that arbitration agreements were getting rocked by the courts.  What it’s time for is an in depth study of the actual cost savings, forum by forum, versus the risks and the opposing costs (including recurrent legal fees keeping the agreements and procedures up to date).  If someone would publish that, I wouldn’t be surprised to see that, as often as not, it’s of little or no benefit to the employer.

• The Legislature has introduced bills to overturn a couple of last session’s big cases.  AB 2279 would overturn Ragingwire (FEHA does not protect medical marijuana usage).  SB 1192 would reverse Murphy (missed meal and rest period payments are not penalties).  You all are aware of my mixed prognostication record, but I would predict SB 1992 dies in commitee and AB 2279 dies on the Governor’s desk.  I wouldn’t be surprised if the latter ended up as a ballot initiative.

You may have noticed that all of the tags and many of the links are not working right now.

You probably didn’t notice that I both upgraded the site to WordPress 2.5 and moved it to a dedicated server (which I had to configure myself).  Some combination of these two invisible changes are contributing, I’m sure, to the broken links.

I’m working on it, but I have no idea what the problem is at this time.

SB 674 (Dutton) - Incentives for employers who provide health care and other benefits.
SB 737 (Caleron) - Legislature’s intent to clarify meal and rest period law.
SB 940 (Yee) - Temporoary employees must be paid more frequently.
SB 953 (Wyland) - Ministerial changes to alternative workweeks.
SB 1192 (Margett) - Would reverse Murphy.  Wage premiums are penalties.
SB 1244 (Alquist) - No retaliation if a family member or co-worker files a wage claim.
SB 1283 (Harman) - Some leniency in final paychecks for outside accounting departments.
SB 1489 (Kuehl) - Ministerial changes to leave laws.
SB 1490 (Padilla) - Independent contractors may request a determination from the EDD regarding their status when hired.
SB 1539 (Calderon) - Interpretation of IWC orders re: meal periods mandatory after 5 hours.
SB 1583 (Corbett) - Advising someone to hire independent contractors makes you jointly liable for the remedies against the principal.

AB 1989 (Swanson) - Expands WARN act to include offshoring.
AB 2075 (Fuentes) - Off-the-clock hours would be equivalent to signing flase wage release.
AB 2134 (Swanson) - Would conform state and federal family leave.
AB 2279 (Leno) - Reverses Ragingwire: no discrimination based on medical marijuana usage.
AB 2421 (Huff) - Investigation and prosecution of complaints of employment of unauthorized workers.
AB 2530 (Duvall) - Would exclude certain transportation employees from meal period orders.
AB 2716 (Ma) - Paid sick leave for everyone.
AB 2719 (Jeffries) - Would exclude employees investigating workers compensation fraud from meal period orders.
AB 2874 (Lieber) - Removes penalty limits for violations of CRA2005.
AB 2879 (Leno) - Labor Commissioner audit triggers.
AB 2888 (La Malfa) - Sex offenders cannot work in certain fields with minors, fines related thereto.
AB 2918 (Lieber) - Would restrict usage of credit information as a condition of employment.

Good post on Costco v. Sup. Ct. by Carlton, DiSante & Freudenberger.

Supreme Court denies cert on Gentry. [UCL Practitioner]

Walsh & Walsh on Startucks’ Barista Tip-gate

I’m back, and I fully intend on returning to my regular posting schedule.  However, the podcast experiment proved to be a lot of effort for a very small group of users.  I will try to replace it with a similar digest–but in post form.

In Metters v. Ralphs Grocery Co (4th Dist. No. G038380) the Court of Appeal upheld the trial court’s finding that no valid arbitration agreement was entered into by an employee who was told he had to agree to an arbitration in order to get Ralphs to investigate.

Second District Case No. B198253

Gregory Chudacoff was an attorney who represented Maxsecurity, Inc.  When Mark Neville left his employment with Maxsecurity, Chudacoff wrote a letter to Maxsecurity’s customers accussing Neville of various torts and advised them not to do business with Neville unless they wanted to be involved with the litigation.

Maxsecurity sues Neville, Neville sues Chudacoff.  Chudacoff anti-SLAPPs Neville’s Complaint against him.

Will this become standard practice now?  Forget convenants not to compete! We can just send letters saying we’re going to sue.  The Court upheld this argument.  Here’s how it gets around the idea that this kind of tactic will be used to stifle competition:

Relying upon Herzog v. “A” Company, Inc. (1982) 138 Cal.App.3d 656 (Herzog), Neville asserts that the Letter could not have been sent in good faith because it was, in effect, an attempt to prevent Neville from competing with Maxsecurity in violation of Business and Professions Code section 16600 (section 16600).  Section 16600 declares void “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind . . . .”  The Letter did not constitute a covenant not to compete, nor did it accuse Neville of violating a covenant not to compete.  The Letter accused Neville of improperly soliciting Maxsecurity’s customers.  Section 16600 does not authorize employees to compete with former employers by stealing their confidential customer information.  (See Board of Trustees v. Roche Molecular Systems (N.D. Cal. 2007) 487 F.Supp.2d 1099, 1115 [section 16600 permits enforcement of agreement to the extent necessary to protect trade secrets and prevent unfair competition]; Thompson v. Impaxx, Inc. (2003) 113 Cal.App.4th 1425, 1429-1430; Robert L. Cloud & Associates, Inc. v. Mikesell (1999) 69 Cal.App.4th 1141, 1150 [“acts of solicitation of the former employer’s customers and the misuse of confidential information are acts of unfair competition that may be enjoined”].)  Neither section 16600 nor Herzog is relevant here.
We also reject Neville’s argument that the Letter is not protected because it was addressed to Maxsecurity’s customers, against whom Maxsecurity had no claim, rather than to Neville.  Although many anti-SLAPP cases involving prelitigation communications concern demand letters or other statements to adverse parties or potential adverse parties (e.g., Flatley, supra, 39 Cal.4th at pp. 307-309; Rohde, supra, 154 Cal.App.4th at pp. 36-37; Blanchard v. DIRECTV, Inc. (2004) 123 Cal.App.4th 903, 918-919), there is no such requirement in the text of section 425.16, subdivision (e)(2).  That provision has been held to protect statements to persons who are not parties or potential parties to litigation, provided such statements are made “in connection with” pending or anticipated litigation.

The problem with this analysis is that section 16660 is not normally construed that narrowly.  Courts have interpreted it as expressing a strong public policy.  While the court may have looked askance at the personal attack on the lawyer, and while we can’t argue that in the context of an anti-SLAPP motion, if something meets the CC section 47 tests, we think this decision, if it becomes good law, will effectively destroy section 16600, increase litigation, and hurt employee mobility.

Does Neville have a remedy against Maxsecurity itself in another context? That doesn’t seem to be addressed.   It seems plain to me that a lawyer, who is sworn to defend his client’s interests, not those of others, warning his client’s customers that they could become entwined in a lawsuit if they do business with Neville is highly suspect.

The question is, whether Neville really did misappropriate information from Maxsecurity.  If it turns out later that he did not, this decision will look poor.

I’d love to draw the conclusion that this is the Second District walking back the malign effects of the one cent recovery rule.  I’d love to draw the conclusion that evidence and word-of-mouth anecdotal evidence about the DLSE meant that civil courts were reconsidering just how much deference to give them, as others have done.Instead, I think this test fails the smell test, and the judges just didn’t like the chutzpah of such a disproportionate fee to recovery ratio.  There’s nothing to indicate that they understand just how commonplace this is, or the litigation it creates.So, in the meantime, I’ll take this as a possible sign of a change in law coming, but I wouldn’t count on it having meaningful effect now. 

4-3, goes parallel with Reno v. Baird.  I never really understood (a) what good making employees personally liable for harassment or retaliation would do, and (b) why retaliation should be treated any differently than harassment.  Non-employers simply aren’t in a duty-creating relationship vis-a-vis employment practices.  There are other tort frameworks out there, besides those in the Fair Employment and Housing Act, that can provide remedies to those ills.

I try not to opine that strongly.  At my new gig, I’ll be representing both sides.  Does that give me credibility from both sides, or from neither?  I suspect the latter. (=

Anyway, my view is that this is a stare decisis case based on Reno.

I will be joining Brenneman, Juarez & Adam LLP in Santa Maria, California on April 1, 2008.  I hope to do some work on this blog in the meantime.

This case decides whether an individual be held personally liable for retaliation under the FEHA.

This is a case every counsel for an employer should use as an example of why compliance is so important.  We can kvetch all we want about the laws, but kvetching doesn’t get financial results.

This case was over a ministerial error of $44.63.  The Defendant settled for $10,500.00 plus reasonable attorneys’ fees to be determined by the Court.

The trial court awarded no fees in response to the Plaintiff’s request for over $46k in fees.  The Court of Appeal reversed and only awarded $500.

While the courts weren’t having any of the exorbitant attorneys’ fee arguments, they still had to award something because that’s what the law requires.  But that’s not what strikes me here.

What strikes me is a $10,500+ (ultimately a nice round $11k) for a $44.63 screw up.  Not to mention all of the attorneys’ fees involved, including on the appeal.

The bottom line is: don’t underpay your employees.  Err on the side of overpayment.  If you don’t like it, write a letter to your state representatives (who really should do something about this.)

I know they settled here so it doesn’t matter–but does anyone think that if this case had ended up in a $10,500.00 judgment that there would be an Eighth Amendment challenge?

From the San Jose Mercury News:

Ma’s bill, AB 2716, would extend paid sick leave to any employee who works for seven or more days each year. Employees would “earn” sick time at the rate of one hour for every 30 hours worked. Sick time would carry over from year to year, but medium-to-large employers could limit annual paid sick days to nine days, small employers to five days.
Sick leave also could be used to care for a sick family member or to recover from domestic violence or sexual assault. Employers who flout the law could face fines of up to $250 per incident.

I hope the committee investigates whether this plan has worked in San Francisco.

Big changes will be coming to this site in the next several weeks.  I want to apologize for the light posting of late.  Much has been going on in my personal and professional life.  I will get a handle on this year’s legislation and gear up for the changes.

Stay tuned.