As of today, the Governor has signed 8 significant employment-related bills into law, covering:

Minimum wage increase, from $8 to $10/hour, over two years

Change in definition of sexual harassment to provide broader protection for employees

Recovery of defense attorney’s fees in wage claims only if bad faith

Expansion of coverage of Paid Family Leave

Mandatory overtime for domestic workers who work over 9 hours/day or 45 hours/week

Criminal background checks for youth sports leaders

Employment contracts for minor actors

New penalties for violation of posting requirements for garment manufacturers

To view the signed bills, as well as the passed bills awaiting Governor Brown’s action, as well as failed bills, click here.  Governor Brown has until October 13 to act on bills awaiting signature. If you have questions on how these bills affect your rights, give us a call today.

California has fee-shifting provision in place for claimants seeking unpaid minimum wages and unpaid overtime pay, by which the prevailing employee is entitled to attorney’s fees. Many employer defendants have sought to scare away a former employee plaintiff by “reminding” them that if the employee loses, the employer will go after them for their fees and costs. Many employees have considered the risk and opted not to pursue legitimate claims based on that fear.

Good news….

Effective January 1, 2014, Labor Code § 218.5 will provide that a prevailing employer can recover its defense costs only if it proves to the court that the employee brought the action “in bad faith.” “In bad faith” is not defined in the statute, but it will probably require that the employer prove that the employee knowingly filed a false claim purely withy the intent to harm their former employer.
The history behind the change reveals California’s long-established “pro-employee” position. Governor Brown signed the legislation, SB 462, making this change on August 26, 2013. The bill’s author, Sen. Bill Monning, D-Carmel, stated that this amendment corrects “an historic injustice” and “brings California into conformity with the overwhelming majority of states in the country.
The amendment was prompted by a 2012 California Supreme Court ruling holding that a prevailing employer in a meal-rest penalties case could not recover attorneys’ fees because such penalties are not “wages” and the Labor Code statutes permit fee recovery only in actions involving wages. Kirby v. Immoos Fire Protection, 53 Cal. 4th 1244 (2012).

Although there was no applicable fee-shifting statute in Kirby, the case implied that if the claims had involved wages instead of penalties, an award of attorneys’ fees to the prevailing employer could have been appropriate. The reaction from SB 462′s sponsor — the California Employment Lawyers Association — was to try to protect plaintiff employees from that eventuality by requiring successful employers to prove bad faith. A true win for employee plaintiffs!

Wet Seal, a California based retailer, has settled a national class action suit that was filed in federal district court. The employment discrimination case was based on the company’s alleged Title VII of the Civil Rights Act of 1964 violation. The act prohibits employers from discriminating against employees based on sex, race, national origin, color or religion.

The settlement is reportedly for $7.5 million and Wet Seal promises to make changes that will reduce discrimination based on race. The suit was filed after an investigation by the Equal Employment Opportunity Commission that lasted nearly three years. The EEOC determined that the retailer was indeed guilty of denying certain employees promotions and equal pay based on race.

The court has indicated that it will decide in November whether to give the settlement final approval after a review of the process for claims. Before the ink is dry on this settlement, the EEOC has filed two additional complaints against two different companies alleging that they discriminated against applicants by using background checks to disqualify them. Some say that the case against Wet Seal and these two additional complaints illustrate the fact that African Americans in California and around the country continue to face prejudices when it comes to employment.

Many people would like to believe that the days of employment discrimination based on things such as race are far from over. Unfortunately, that isn’t always the case. There are still many people who are subjected to discrimination on a daily basis simply because of the color of their skin. Any employee that feels they have been discriminated against for any reason has the right to file a complaint. If the employer fails to satisfactorily handle that complaint, the employee may seek additional advice and assistance with reaching a satisfactory conclusion.

Source: ThinkProgress.org, “Wet Seal To Pay $7.5 Million Class Action Race Settlement,” Joseph Diebold, June 18, 2013

Jennifer Becerra, Montinique Dever, Andrea Bourke and Lauren Benge have filed a lawsuit on behalf of themselves and all other hourly, non-exempt current and former employees (“Class Members”), alleging that while working for the famed chef, he and his restaurant:

“(1) required Class Members to work through their meal and rest periods without paying compensation for missed meal and rest breaks; (2) failed to pay Class Members minimum wages for all hours worked; (3) failed to pay Class Members premium compensation for all overtime hours worked; (4) failed to pay Class Members all wages due at termination and/or resignation; (5) failed to maintain and provide Class Members with proper documentation concerning their hours worked and their compensation; (6) converted the property of the Class Members; and (7) committed unfair business practices in an effort to increase profits and to gain an unfair business advantages at the expense of the Class Members and the public.”

The Fat Cow is a Ramsay restaurant located in Los Angeles’ famous outdoor shopping center — The Grove, and is owned by defendants The Fat Cow LLC, FCLA LP and Gordon Ramsay Los Angeles.

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.

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.

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.

(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.

Congressional member, Senator Hagan,  recently introduced a bill that would greatly expand the exemption to the Fair Labor Standards Act for IT employees, eliminating
overtime benefits for many employees, including network, database and security specialists.

Currently, California law and the FLSA mandates that employees get time-and-a-half (1.5x) overtime pay for working more than 40 hours in a week or 8 hours in a workday, unless they qualify under one of the exemptions. Many exemptions exist and the current text related to IT workers exempts “any employee who is a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker,” whose primary duties fall under categories including “systems analysis techniques and procedures,” and “design, documentation, testing, creation, or modification of computer programs.”

But a bill sponsored by Sen. Kay Hagan (D-NC), titled the “Computer Professionals Update Act,” takes the exemption’s 131-word text and bumps it up to 205, adding job classes such as database and network specialists and security professionals.  The proposed language of the bill would exempt “any employee working in a computer or information technology occupation (including, but not limited to, work related to computers, information systems, components, networks, software, hardware, databases, security, internet, intranet, or websites) as an analyst, programmer, engineer, designer, developer, administrator, or other similarly skilled worker,” with primary duties including “the application of systems, network or database analysis techniques and procedures, including consulting with users, to determine or modify hardware, software, network, database, or system functional specifications.”

The bill would also label all employees listed in the exemption as part of the “bona fide executive, administrative, or professional” class exempt from overtime and minimum wage laws. However, the proposed modification keeps the exemption’s current text limiting affected employees to those who are on salary or make at least $27.63 an hour.

One IT administrator who blogged about the bill commented that “I think that I may have originally underestimated the importance of this bill to us SysAdmins in the United States…see, I was under the impression that we were almost all salaried and exempt—in other words, that overtime wasn’t an option anyway. I’ve been informed by a couple of friends of mine that this isn’t the case at all, and that there are a lot of hourly SysAdmins who get overtime.”

If you are an IT employee who is curious whether you are being paid correctly under California or Federal wage and hour laws, contact Adams Law today.

The Ninth Circuit’s recent decision in Campbell v. PricewaterhouseCoopers (PWC) is significant. In that case, a group of 2,000 unlicensed junior accountants, sued their employer under California law for alleged unpaid overtime wages.  During the litigation, Plaintiffs filed a motion for summary judgment, seeking to establish that as a matter of law, the junior accountants did not qualify for any overtime exemption.  In response, PWC argued that they did qualify, under the professional and/or administrative exemptions.  The district court disagreed, holding that unlicensed accountants are categorically ineligible for the professional exemption and that there was insufficient evidence to support a finding that they met the administrative exemption. At that point, the plaintiffs won the lawsuit on that issue.

Unfortunately, the Ninth Circuit disagreed.  With respect to the professional exemption, the court held that unlicensed accountants are not categorically ineligible for the exemption simply because of their unlicensed status.  The court held that unlicensed accountants may qualify as “learned professionals.”  The court did not go so far as to hold that the plaintiffs in this case actually qualified for the exemption as a matter of law, but rather held that some of the employees might qualify,  depending on their actual job duties, and as a result, the district court had erred in ruling that unlicensed, or junior, accountants could never qualify for the professional exemption in any circumstance.  According to the court, such a holding “ignore[s] the potential for substantial variance [in job duties] from one unlicensed accountant to another.”  The court emphasized that “[e]ach case will require a fact-specific inquiry into whether the unlicensed accountant meets the subsection’s various benchmarks–e.g., engaging in work that is  ‘predominantly intellectual and varied in character.”  The court held that the evidence before it revealed significant differences in skill level, responsibility and experience among the class member accountants.

With respect to the administrative exemption, the court similarly concluded that there were issues that required resolution by a trier of fact and that the issue could not be decided as a matter of law. Of significance was whether plaintiffs performed work under only general supervision and whether their work was of substantial importance to their employer’s clients.

Are you a junior accountant or in a similar position? If you are not currently earning overtime, an inquiry into your work environment, job duties and work history may reveal that you are exempt under the law and entitled to that premium  compensation. Give us a call to see how we may be of assistance. We are glad to help.

Do you employ junior accountants or similar paraprofessionals? While the Ninth Circuit’s decision is a favorable one for California employers, that Court made clear the need to individually examine whether a particular employee qualifies for exempt status based on a review of the employee’s actual job duties and how the employee spends his or her time to ensure your compliance with the law. Give Adams Law a call today and we would be glad to help analyze your employment practices.