Tip pools and tip sharing are significant topics for employees in both the food service and hospitality industry. The Second Circuit’s Court of Appeals will soon clarify the the prohibition against participation by an employer’s “agents” in tip pools and sharing arrangements.

The court’s certification order arose out of two class actions against Starbucks involving their “baristas.”  In Barenboim v. Starbucks Corp., employees objected to shift supervisors obtaining a portion of their tips because they assigned baristas to positions during their shifts, administered break periods, directed the flow of customers, and provided feedback on baristas’ performance. As such, they argued, the shift supervisors were “agents” of the Starbucks and ineligible to participate in tip pooling the applicable labor laws.

The second case, Winans v. Starbucks Corp., presented nearly the reverse issue: assistant store managers claimed that they are not agents of the employer and thus are entitled to participate in the stores’ tip pools.

The DIstrict Court certified the following questions to the New York Court of Appeals:

    1. “What factors determine whether an employee is an ‘agent’ of his employer for purposes of N.Y. Lab. Law § 196-d and, thus, ineligible to receive distributions from an employer-mandated tip pool?,” and
    2. “Does [the Labor Law] permit an employer to exclude an otherwise eligible tip-earning employee under § 196-d from receiving distributions from an employer-mandated tip pool?”

While this may be an issue pending before the Second Circuit, employees in Santa Barbara, San Luis Obispo and Ventura who have tip pooling questions are encouraged to contact Adams Law for answers.

Meal period general requirements: One 30-minute meal period for every five hours worked.

The California Labor Code and various Wage Orders prohibit an employer from employing a non-exempt employee for more than five hours without providing an unpaid meal period of at least 30 minutes. If the employee works more than 10 hours per day, he or she must be given a second 30-minute meal period.


Unpaid meal periods must meet certain requirements or else they are considered an on-duty meal period, which is counted as time worked and for which the employee must be paid. The Division of Labor Standards Enforcement (DLSE) defines an “on-duty meal period” as: a meal period during which the employee is not relieved of all duty, regardless of length.



In short, yes, but the waiver is required to contain certain elements and is sometimes invalid if you work more than 10 or 12 hours per day.

The employer and employee are permitted to waive the 30-minute meal period in two circumstances:

  1. When an employee’s work period for the day does not exceed six hours, the meal period may be waived by mutual consent of both the employer and employee. But neither the employee nor the employer can be forced to waive the meal period. For example, if the employee wants to waive the meal period but the employer does not, then the meal period cannot be waived.
  2. When an employee works more than 10 hours per day, the second meal period may be waived if: (a)the employee works no more than 12 hours that day; (b) the employee and employer agree to waive the second meal period; and (c) the first meal period has not been waived.

Department of Fair Employment and Housing: Reorganization and Revision (SB 1038)

SB 1038 reduces the cost to the State by reorganizing and reducing the size of the Department Fair Employment and Housing. Specifically, effective in January, the Fair Employment and Housing Commission is abolished and a Fair Employment and Housing Council within the Department of Fair Employment and Housing will be established. The Council will consist of seven members appointed by the Governor and will have the power to issue regulations. The DFEH will now be able to go directly to court and seek all remedies available there, but must first engage in mandatory dispute resolution, with the DFEH’s internal Dispute Resolution Division, free of change. The bill would also establish a Fair Employment and Housing Enforcement and Litigation Fund in the State Treasury for purposes of depositing attorney’s fees and costs awarded to the DFEH in certain civil actions, which will then be appropriated by the Legislature to offset the costs of the Department.

Religious Discrimination: Grooming and Dress Practices (AB 1964)

This bill includes a religious dress practice or religious grooming practice as a “belief” and “observance” covered by Fair Employment and Housing Act protections against religious discrimination. The bill broadly defines “religious dress practice” to include the wearing or carrying of religious clothing, head or face coverings, jewelry, artifacts, and any other item that is part of the observance by an individual of his or her religious creed, and “religious grooming practice” to include all forms of head, facial, and body hair that are part of the observance by an individual of his or her religious creed.

The bill specifies that an accommodation of an individual’s religious dress practice or religious grooming practice that would require that person to be segregated from the public or other employees is not a reasonable accommodation. Finally, the bill would provide that no accommodation is required if it would result in the violation of certain laws protecting civil rights.

In signing the bill, the Governor stated: “Sikh Americans are loyal citizens who have been targeted because of widespread ignorance of their religion and culture…The bills I sign today aim to ensure that Californians learn about our Sikh citizens as well as protect all of us from job discrimination based on religious observances.”

Employment of Infants: Entertainment Industry (AB 2396)

Existing law prohibits the employment on a motion picture set or location of an infant under the age of one month unless board-certified pediatric physician and surgeon certifies that the infant is at least 15 days old, was carried to full term, was of normal birth weight, is physically capable of handling the stress of filmmaking, and the infant’s lungs, eyes, heart, and immune system are sufficiently developed to withstand the potential risks. Violation of this provision is a misdemeanor punishable by a fine of $2,500 to $5,000, 60-day jail term, or both. The certification must be provided to the Labor Commissioner, who will consent to the minor’s employment through issuance of a permit. This bill would require the medical certification be provided before a temporary permit for the employment of the infant may be issued.

Amends Section 1308.10 of the Labor Code.

Multiple Employer Welfare Arrangements: Benefits. (SB 615 Calderon)

The federal Patient Protection and Affordable Care Act (PPACA), requires an “essential health benefits package” to be included in any small group or individual market policy issued by a health insurance carrier/issuer.

Existing state law places certain requirements on a self-funded or partially self-funded multiple employer welfare arrangement (MEWA), for the MEWA to provide benefits to any California residents with benefits. Existing law limits those MEWA’s to providing certain benefits, including medical, dental, and surgical.

This bill would, commencing January 1, 2014, prohibit a MEWA from offering, marketing, representing, or selling any product, contract, or discount arrangement as minimum essential coverage or as compliant with the essential health benefits requirement under the federal Patient Protection and Affordable Care Act, unless it meets the applicable requirements under that PPACA.

Written Commission Agreements for Employees in California (AB 1396)

[Already enacted]           An employer who enters into an employment contract with an employee involving commissions as a method of payment must put the employment contract in writing and set forth the method by which the commissions will be computed and paid. So, beginning next year, an employee commission agreements: (1) be in writing; (2) set forth the method by which the commissions are required to be computed and paid; and (3) contain a signed receipt for the contract from each employee.

Amends Section 2751 and repeals Section 2752 of the California Labor Code.


If you have any questions that arise about these new bills signed by Governor Brown in September 2012, or you feel your employment rights are being violated in any respect, give Adams Law a call at 805.845.9630.

A Los Angeles jury has returned a verdict of $3.5 million against drug store chain Rite Aid Corporation in a recent disability discrimination case.

According to the complaint filed, Martha Palma had worked for Rite Aid for years and had been a store manager at one of its stores in Los Angeles. She was fired months after being diagnosed with a “non-work related serious disability” in late 2010.

Ms. Palma filed claims for disability discrimination, retaliation for complaining of discrimination and harassment, and failure to engage in the interactive process, according to the statement. A jury in Los Angeles Superior Court found in her favor on each of these claims.

At trial, Ms. Palma testified that Rite Aid “treated her differently and terminated her because of the stigma related to employees with disabilities,” Shegerian said in a public statement. “She testified that despite being able to perform her job duties, the defendant never tried to discuss accommodations with her, instead manufacturing a false reason to terminate her[] and then fired her.”


Judicial interpretation of the enforceability of arbitration clauses in the context of class action claims for wage and hour violations, such as the failure to pay overtime, missed meal and rest breaks and misclassification as an independent contractor or exempt, continues to evolve.

In 2011, the U.S. Supreme Court issued its opinion in AT&T Mobility LLC v. Concepcion, which generally prohibits states from requiring additional due process before enforcing arbitration agreements. Since that opinion was issued, however, California lawyers and jurists have called into question the continuing validity of an earlier decision, Gentry v. Superior Court.

In Gentry, the California Supreme Court set forth a four part test to analyze whether class action arbitration waivers are enforceable. Some California courts continue to apply the four-part “Gentry test,” while others consider it inconsistent with the objective of enforcing arbitration agreements according to their terms, as set forth in Concepcion.

In its recent decision in Truly Nolen of America v. Superior Court, a California Court of Appeal initially calls into question the validity of Gentry, but ultimately holds that in the absence of an express or implied agreement among the parties regarding class arbitration, ordering the arbitration of statutory employment claims on a class wide basis was “questionable.”  The Truly Nolan plaintiffs were pest control technicians who claimed that they were misclassified as exempt from overtime pay.

On appeal, the court agreed that under Concepcion, class action waivers in employment arbitration agreements should be enforced, even if class arbitration would be “more efficient” than individual arbitration. The appellate court noted, however, that because Concepcion addressed class action waivers in the context of consumer claims, rather than statutory claims, Gentry remains good law.

As it stands, employees will likely have to satisfy the more rigorous four-part test to compel class action arbitration over their employers’ objections, and will have to set forth specific facts and not a generalized statement about the benefits of class wide arbitration. Notably, this new case may impact plaintiffs’ ability to rely on consideration of “public policy” when seeking to avoid individual arbitration of their wage and hour claims.

If you have questions regarding whether you are owed overtime pay, are properly classified as an independent contractor or properly exempt as an employee earning a “salary,” please give us a call. We’ll be glad to examine whether any of your employment rights are being violated.

Basic Leave Entitlement
FMLA requires covered employers to provide up to 12 weeks of unpaid, job-protected leave to eligible employees for the following reasons:
• For incapacity due to pregnancy, prenatal medical care or child birth;
• To care for the employee’s child after birth, or placement for adoption or foster care;
• To care for the employee’s spouse, son or daughter, or parent, who has a serious health condition; or
• For a serious health condition that makes the employee unable to perform the employee’s job.

Military Family Leave Entitlements
Eligible employees with a spouse, son, daughter, or parent on active duty or call to active duty status in the National Guard or Reserves in support of a contingency operation may use their 12-week leave entitlement to address certain qualifying exigencies. Qualifying exigencies may include attending certain military events, arranging for alternative childcare, addressing certain financial and legal arrangements, attending certain counseling sessions, and attending post-deployment reintegration briefings.

FMLA also includes a special leave entitlement that permits eligible employees to take up to 26 weeks of leave to care for a covered service member during a single 12-month period. A covered service member is a current member of the Armed Forces, including a member of the National Guard or Reserves, who has a serious injury or illness incurred in the line of duty on active duty that may render the service member medically unfit to perform his or her duties for which the service member is undergoing medical treatment, recuperation, or therapy; or is in outpatient status; or is on the temporary disability retired list.

Benefits and Protections
During FMLA leave, the employer must maintain the employee’s health coverage under any “group health plan” on the same terms as if the employee had continued to work. Upon return from FMLA leave, most employees must be restored to their original or equivalent positions with equivalent pay, benefits, and other employment terms.
Use of FMLA leave cannot result in the loss of any employment benefit that accrued prior to the start of an employee’s leave.

Eligibility Requirements
Employees are eligible if they have worked for a covered employer for at least one year, for 1,250 hours over the previous 12 months, and if at least 50 employees are employed by the employer within 75 miles.
Definition of Serious Health Condition

A serious health condition is an illness, injury, impairment, or physical or mental condition that involves either an overnight stay in a medical care facility, or continuing treatment by a health care provider for a condition that either prevents the employee from performing the functions of the employee’s job, or prevents the qualified family member from participating in school or other daily activities.

Subject to certain conditions, the continuing treatment requirement may be met by a period of incapacity of more than 3 consecutive calendar days combined with at least two visits to a health care provider or one visit and a regimen of continuing treatment, or incapacity due to pregnancy, or incapacity due to a chronic condition. Other conditions may meet the definition of continuing treatment.

Use of Leave
An employee does not need to use this leave entitlement in one block. Leave can be taken intermittently or on a reduced leave schedule when medically necessary. Employees must make reasonable efforts to schedule leave for planned medical treatment so as not to unduly disrupt the employer’s operations. Leave due to qualifying exigencies may also be taken on an intermittent basis.

Substitution of Paid Leave for Unpaid Leave
Employees may choose or employers may require use of accrued paid leave while taking FMLA leave. In order to use paid leave for FMLA leave, employees must comply with the employer’s normal paid leave policies.

Employee Responsibilities
Employees must provide 30 days advance notice of the need to take FMLA leave when the need is foreseeable. When 30 days notice is not possible, the employee must provide notice as soon as practicable and generally must comply with an employer’s normal call-in procedures.

Employees must provide sufficient information for the employer to determine if the leave may qualify for FMLA protection and the anticipated timing and duration of the leave. Sufficient information may include that the employee is unable to perform job functions, the family member is unable to perform daily activities, the need for hospitalization or continuing treatment by a health care provider, or circumstances supporting the need for military family leave. Employees also must inform the employer if the requested leave is for a reason for which FMLA leave was previously taken or certified. Employees also may be required to provide a certification and periodic recertification supporting the need for leave.

Employer Responsibilities
Covered employers must inform employees requesting leave whether they are eligible under FMLA. If they are, the notice must specify any additional information required as well as the employees’ rights and responsibilities. If they are not eligible, the employer must provide a reason for the ineligibility.
Covered employers must inform employees if leave will be designated as FMLA-protected and the amount of leave counted against the employee’s leave entitlement. If the employer determines that the leave is not FMLA-protected, the employer must notify the employee.

Unlawful Acts by Employers
FMLA makes it unlawful for any employer to:
• Interfere with, restrain, or deny the exercise of any right provided under FMLA;
• Discharge or discriminate against any person for opposing any practice made unlawful by FMLA or for involvement in any proceeding under or relating to FMLA.

An employee may file a complaint with the U.S. Department of Labor or may bring a private lawsuit against an employer.
FMLA does not affect any Federal or State law prohibiting discrimination, or supersede any State or local law or collective bargaining agreement which provides greater family or medical leave rights.

FMLA section 109 (29 U.S.C. § 2619) requires FMLA covered employers to post the text of this notice. Regulations 29 C.F.R. § 825.300(a) may require additional disclosures.

Taking leave or time off work to care for a sick or injured family member or to bond with a new baby is something we have probably faced ourselves or know someone who has. State and federal laws exist that protect employees from being fired for taking leave.  In the past, the leave was always unpaid. Choosing between earning a living and being there to care for an aging parent or child is not a choice anyone should have to make. Thankfully, you don’t have to choose.

The California Paid Family Leave Act was passed ten years ago. That law established the first ever paid family leave “insurance” program and ensures all California employees the ability to take up to 6 weeks off work to care for a seriously ill child, spouse, parent, or registered domestic partner, or to bond with a new child (birth, foster or adoptive) and to receive partial wage replacement during that time.

Unfortunately, not many California employees are aware of their right to take paid family leave, even though employers are obligated to provide employees with
information informing them of employment rights.

If you would like to learn more about paid family leave in California, you can get excellent answers to your questions by calling:

Equal Rights Advocates: (800) 839-4372; and

Legal Aid Society-Employment Law Center: (800) 880-8047.

The Employment Development Department (EDD) also has toll-free numbers that California employees can call  to learn more about their employment rights (and assistance is available  in a number of languages).  You can also visit http://www.paidfamilyleave.org

If your questions are complex or you would prefer to speak directly with an employee rights attorney in Santa Barbara or San Luis Obispo, you can reach us directly at  805.845.9630.

While no attorney or law firm can guarantee that your case will be successful or that these results will be seen in your case, results in three key lawsuits in California reveal that employee rights claims remain a viable means to address discrimination, harassment and retaliation at work:

  • Retailer Abercrombie & Fitch recently agreed to  resolve a class-action discrimination lawsuit for approximately $50 million.

  • A jury award of $820,700 for harassing blog posts written by managers was upheld by the California Court of Appeals.

  • Go Daddy was found liable for retaliation when it ignored an employee’s complaint of bias and later terminated him without conducting an investigation into his complaint. The Go Daddy jury awarded Plaintiff over $350,000 for damages related to retaliation, even though it did not find that any discrimination had occurred.

Court Decides Employers Must Relieve
Employees of All Duty During Meal Periods
But Need Not Ensure They Perform No Work

The California Supreme Court concluded today that an employer’s obligation is to relieve its employees of all duty during meal periods, leaving the employees thereafter at liberty to use the period for whatever purpose they desire, but that an employer need not ensure no work is done.

The court also concluded that a first meal break generally must fall no later than five hours into an employee’s shift, but an employer need not schedule meal breaks at five hour intervals throughout the shift.

These questions arose in a case filed nearly eight years ago – Brinker Restaurant Corporation v. Superior Court, S166350, one of a number of meal and rest break class actions pending in the state. After the Brinker trial court certified classes of employees alleging the Brinker Restaurant Corporation had failed to provide meal and rest periods in the number and at the times required by state law, the Court of Appeal reversed and ordered each subclass vacated. The California Supreme Court accepted review and agreed to resolve lingering uncertainty over the nature of rest and meal period obligations and the suitability of such claims for class treatment.

In a unanimous opinion authored by Associate Justice Kathryn M. Werdegar, the court explained that neither state statutes nor the orders of the Industrial Welfare Commission (IWC) compel an employer to ensure employees cease all work during meal periods. Instead, under state law an employer must provide its employees an uninterrupted 30-minute duty-free period during which the employee is at liberty to come and go as he or she pleases. Absent a statutorily permissible waiver, a meal break must be afforded after no more than five hours of work, and a second meal period provided after no more than 10 hours of work.

On the question of rest periods, the court explained that under the IWC’s orders, employees are entitled to 10 minutes of rest for shifts from three and one-half to six hours in length, and to another 10 minutes rest for shifts from six hours to 10 hours in length. Rest periods need not be timed to fall specifically before or after any meal period.

As to the suitability of rest and meal period claims for class treatment, the court reversed in part, remanded in part, and affirmed in part the Court of Appeal’s rejection of class treatment. With respect to rest period claims, the court concluded plaintiffs had identified a theory of recovery suitable for class treatment. With respect to meal period claims, the Supreme Court remanded to the trial court for reconsideration of class certification in light of its clarification of the substantive law governing meal period claims. Finally, with respect to a third subclass—for claims that Brinker required off-the-clock work—the court affirmed vacation of class certification.

The principal opinion by Justice Werdegar was signed by Chief Justice Tani G. Cantil-Sakauye and Associate Justices Joyce L. Kennard, Marvin R. Baxter, Ming W. Chin, Carol A. Corrigan, and Goodwin Liu.

Justice Werdegar also issued a separate concurring opinion, joined by Justice Liu, addressing meal period class certification issues confronting the trial court on remand. The concurring opinion discussed considerations relevant to the suitability of the plaintiffs’ meal period claims for certification.

The court’s opinion in Brinker Restaurant Corporation v. Superior Court, S166350, is available on the California Courts Website in two formats:
Word (http://www.courtinfo.ca.gov/opinions/documents/S166350.DOC); and
Acrobat (http://www.courtinfo.ca.gov/opinions/documents/S166350.PDF).

(From Reuters)
Part of a class-action lawsuit against Brinker International Inc can proceed, the California Supreme Court ruled on Thursday, in a closely watched case about employee meal and rest breaks at the company’s restaurants.

The California high court authorized a class of workers in the state to proceed with claims that they were denied proper rest breaks by Brinker. With respect to the meal break claims, the court ruled that employers only have to provide meal periods to workers, not make sure employees actually take them.

“An employer must relieve the employee of all duty for the designated period, but need not ensure that the employee does no work,” Associate Justice Kathryn Werdegar wrote for the unanimous court. Workers first sued Brinker, which owns Chili’s and Romano’s Macaroni Grills, in 2004 on behalf of a proposed class of around 60,000 non-unionized, hourly employees. They claimed that managers pressured them to skip their breaks by failing to adequately staff the restaurants or by threatening to cut or change their hours. Brinker’s attorneys argued that employees should have flexibility in choosing whether to take their scheduled breaks.

A California appeals court sided with Brinker in 2008, finding that the restaurant company only had to “make available” the meal and rest breaks, but not “ensure” they were taken. The state’s Supreme Court agreed that employers do not have to police meal breaks but do need to relieve workers of duties at those times.

The court also resolved uncertainty over whether employers need to enforce a “rolling five-hour” rule, which gives workers a right to an uninterrupted meal break after five consecutive hours of work. The first meal break must fall no later than five hours into an employee’s shift, but employers do not have to schedule additional meal breaks every five hours, the court ruled. The court also set out clear guidelines for the number and timing of rest breaks, upholding a lower court’s decision to authorize a class action on those claims.

Tracee Lorens, a lawyer for the plaintiffs, welcomed the opinion as a win for low-wage workers across the state.
“We never argued employers had to police breaks. We just argued that they had an affirmative obligation to relieve the employees of duty so that they could take their lunch break if they wanted to,” she said. She said the case would now go back to the trial court to determine whether the meal break claims can remain part of the class action. A spokeswoman for Brinker said the company was still reviewing the ruling and could not immediately comment.

California employers and labor lawyers have waited for three years for the high court to clarify ambiguities in the state’s wage laws, which require extra pay for meal and rest break violations. “We had an epidemic of meal and rest-break cases where virtually every employer in the state was being sued,” said Scott Witlin, a Los Angeles employment lawyer at Barnes & Thornburg who is not involved in the case. The lawsuits have continued to flow in, claiming millions in damages. Many have resulted seven-figure settlements due to uncertainty in the law, he said, adding that the ruling helps businesses by clarifying the law. Joseph Liburt, an employment lawyer at Orrick in Silicon Valley, said most businesses have been taking a conservative approach, paying the extra penalty whenever an employee’s timecard shows a potential meal break issue. Many employers have also tried to make sure workers actually take their breaks, he said. The case is Brinker Restaurant Corp v. Superior Court (Hohnbaum), California Supreme Court, No. S166350. —-End Report

If you have not been given the opportunity to take your legally required meal or rest breaks, give us a call today to discuss whether your legal rights have been violated.

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