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California Maternity/Paternity Leave Laws

By Backstrom & Heinrichs posted in Leave of Absence on Monday, May 14, 2012

Posted on May 14, 2012 by Alison Dearden

Planning a Leave of Absence when Expecting a Child

FMLA: Family Medical Leave Act: 29 USC §2601 et seq.

The FMLA provides job security to an employee who is absent from work because of the employee's own serious health conditions or to care for family members with serious health conditions, as well as for the birth of a child and to care for a newborn child, newly adopted child or newly placed foster child. Private employers are covered by the FMLA if they have 50 or more employees. Employees are eligible if they have been employed for at least 12 months and have worked at least 1250 hours during the past 12 months. If eligible, employees are entitled to 12 workweeks of leave in a 12-month period. Under the FMLA, pregnancy qualifies as a "serious health condition." Employers may require medical certification of the existence of a serious health condition" if that is the reason the employee is taking FMLA leave. Under the FMLA, an employee must take the leave all at one time unless the employer agrees to something else. FMLA leave is unpaid, however an employee may elect or an employer may require an employee to use her accrued, paid vacation, accrued, paid sick leave, or paid time off. At the conclusion of an FMLA leave, the employee must be reinstated to the same or equivalent job. Upon reinstatement, the employee must receive the same or equivalent benefits as before the leave.

CFRA: California Family Rights Act: Gov. Code §12900 et seq.

Also provides for 12 workweeks of leave in a 12-month period for the birth of an employee's child or for the adoption of a child or placement of a foster child, or for the employee's own serious health condition. Private employers are covered by the CFRA if they have 50 or more employees. An employee is eligible if she has been employed for at least 12 months and has worked at least 1250 hours during the past 12 months. Under the CFRA, pregnancy does not qualify as a "serious health condition". This is because California offers a separate pregnancy leave law, the PDLL. Under the CFRA, an employer may ask for medical certification, but may not inquire into the underlying diagnosis. An employee may take CFRA leave in increments and does not have to take her CRFA leave all at once. CFRA leave is also unpaid, however an employer may require an employee to use her accrued, paid vacation, accrued, paid sick leave, or paid time off. At the end of CFRA leave, the employee must be reinstated.

PDLL: California Pregnancy Disability Leave Law: Gov. Code §12945(a)

Covered employers must provide up to four months of leave per pregnancy. Employees are covered if the employer has five or more employees regardless of how long the employee has been employed. An employee may take PDLL leave for pregnancy, childbirth and pregnancy disabilities. PDLL can cover prenatal visits, reduced work-schedule and postpartum depression.  A PDLL leave does not run concurrently with CFRA leave. Thus, following a PDLL leave, an employee will still have the right to take a CFRA leave of up to 12 weeks. PDLL leave is unpaid unless disability benefits are available. An employer may require that an employee taking PDLL leave use any accrued, paid sick leave, but an employer may not require an employee to use her accrued paid vacation or personal time off. After PDLL leave, the employee must be reinstated to the same job.

PFLA: California Paid Family Leave Act: Unemp. Ins. Code §§2601, 3300-3306

California law provides for payments from the State Disability Fund for wage loss of employees to take time off to care for a seriously ill child or to bond with a new child. All employees, including new or probationary employees, in California who pay into State Disability Insurance qualify for benefits under the PFLA. The PFLA applies regardless of whether the employee qualifies for FMLA or CFRA leave, however, if the employee is entitled to FLMA or CFRA leave she must take PFLA leave concurrently with the FMLA or CFRA leave. An employee who is eligible for both PFLA and FMLA/CFRA leave cannot choose to take the two types of leave at different times. These employees can receive up to six weeks of PFLA benefits during their job-protected FMLA/CFRA leaves. Under the PFLA, most employees receive 55% of weekly wages with a maximum cap. No more than six weeks of PFLA leave may be paid within a 12-month period.

Tags: CFRA, FEHA, PDLL, PFLA, maternity leave, paid time off, paternity leave, pregnancy leave, reinstatement

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Wage and Hour Claims - Statute of Limitations

By Backstrom & Heinrichs posted in Labor Code on Wednesday, May 2, 2012

Posted on May 2, 2012 by Alison Dearden

Civil actions for unpaid wages are subject to the three-year statute of limitations for actions "upon a liability created by statute, other than a penalty or forfeiture." (CCP §338(a).) Unless the statute itself proscribes a different statute of limitations, civil actions to recover penalties for Labor Code violations are subject to the one-year statute of limitations governing actions "for a penalty or forfeiture." (CCP §340(a).) Seems like a bright-line rule? Not quite.

For example, an employer who fails to provide rest periods or meal periods must pay the employee one additional hour of pay at the employee's regular rate of pay for each day that a rest period or a meal period was not provided. (Lab. Code §226.7(b).) Is this a penalty against the employer or a wage to compensate the employee? According to the California Court of Appeals, the additional hour of pay is a premium wage and NOT a penalty. (Murphy v. Kenneth Code Productions, Inc. (2007) 40 Cal. 4th 1094, 1114.) Thus, civil actions to recover premium pay owed for meal and/or rest period violations are subject to the three-year statute of limitations under Civil Code §338(a).

Likewise, civil actions for unpaid regular wages, unpaid overtime wages and unpaid minimum wage are all claims for unpaid wages and subject to the CCP §338(a) three-year statute of limitations. But, in fact, violations of any of the Labor Code provisions may also be actionable as an "unlawful business practice" under the Unfair Competition Law. (Bus. & Prof. Code §17200, et seq.) Claims under §17200 are subject to a four-year statute of limitations. Therefore, the §17200 four-year statute of limitations applies even where the action is based on violation of a statute with a shorter limitations period. (Cortez v. Purolator Air Filtration Products, Co., (2000) 23 Cal. 4th 163, 178-179.) This means that actions for meal and/or rest period violations, unpaid wages, unpaid overtime and unpaid minimum wage are all subject to a four-year statute of limitations so long as plaintiff pleads §17200.

Actions for failure to pay wages when due under Labor Code §204 are subject to Labor Code §210 which provides that "every person who fails to pay the wages of each employee as provided in Section 204. . . . shall be subject to a civil penalty." (Cal. Labor Code §210.) Because §210 is explicitly an award of a penalty, the applicable statute of limitations is the one year limit set forth in CCP §340(a). (See Singer v. Becton, Dickson & Co., Med-Safe Sys., (2008) U.S. Dist. Lexis 56326.)

Actions for penalties under Labor Code §226(a) for wage statement violations is subject to a one-year statute of limitations. However, claims for actual damages under §226(a), authorized by §226(e), or claims for injunctive relief, authorized by §226(g), are subject to the CCP §338(a) three-year statute of limitations because they constitute "liability created by statute, other than a penalty or forfeiture." (Singer v. Becton, supra, (2008) U.S. Dist. Lexis 56326.)

Waiting time penalties under Labor Code §203, however, are subject to the three-year statute of limitations because the statute itself provides that an employee may sue for these penalties at any time before the expiration of the statute of limitations on an action for the wages from which the penalties arise. (§203(b).) The three-year statute of limitation applies because the penalties are directly related to late payment of final wages. Moreover, the three-year statute applies to all actions for §203 penalties regardless of whether the employee seeks both unpaid wages and penalties or penalties alone. (Pineda v. Bank of America, N.A., (2010) 50 Cal. 4th 1389, 1392.) Nevertheless, §203 penalties are NOT recoverable as restitution under California's unfair competition laws, Bus. & Prof. Code, §17200, et seq, because employees have no ownership interest in the funds. (Id.) Thus, claims for §203 penalties cannot be recast as an unlawful business practice claim under §17200 and are, therefore, not subject to §17200's four-year statute of limitations.

The trickiest are claims for liquidated damages under Labor Code §1194.2. The California Court of Appeals has held that §1194.2 claims for liquidated damages in the amount equal to unpaid minimum wages owed (Labor Code §1194.2) are considered claims to recover a penalty and, thus, may be subject to the one-year statute of limitations. (See Martinez v. Combs, (2010) 49 Cal. 4th 35, 48.) However, since the penalty is equal to "the wages unlawfully unpaid and interest thereon", and the "wages unlawfully unpaid" are subject to a four-year statute of limitations under CCP §338(a) and Bus. & Prof. Code §17200, it should be argued that the penalty, even if subject to a one-year statute of limitations, is still equal to all wages withheld during the four-year statutory period plus interest.

Tags: 1194.2, 203, 204, 226, Labor code, liquidated damages, meal periods, minimum wage, overtime, penalties, rest periods, statute of limitations, wages

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Brinker - Was It Worth The Wait For Employers?

By Backstrom & Heinrichs posted in Class Action on Tuesday, April 24, 2012

by:
Crowell Moring LLP - Washington Office

April 18, 2012

Previously published on April 17, 2012

The California Supreme Court's ruling last week in Brinker Restaurant Corp. et al. v. Superior Court provides some welcome news to California employers who had been waiting for clarification about their obligations pertaining to meal and rest breaks. Yet the decision confirms that meal and rest break class actions remain a challenge for even the most sophisticated employers.

Principal Rulings

The big news in Brinker is that while employers must ensure that non-exempt employees in California are offered an opportunity to take meal breaks, they are "not obligated to police meal breaks and ensure no work thereafter is performed." The proper interpretation of the term "provide" in the Labor Code had long divided the lower courts, leading to widespread class action litigation and - because of the consequences of uncertainty - large settlements. Brinker ends this debate.

The other big news of Brinker concerns the Court's clarifications of certain rules regarding the number and timing of meal and rest breaks. This part of the decision should prompt employers to review and update relevant policies.

Brinker's Guidance Regarding the Number and Timing of Meal and Rest Breaks

The Brinker Court clarified the standing wage order regarding the number - and timing - of required breaks. In so doing, the Court dismissed interpretations of law that had been advocated by plaintiffs' lawyers in class action litigation. The Court explained that meal breaks and rest breaks can and should be treated as separate obligations, and that current law does not mandate the order in which meal and rest breaks are to be taken. The employer is responsible, however, to ensure that the right number of breaks are provided, and at the right time intervals.

Meal Breaks: The Court held that employers meet their meal break obligations by providing one such break any time before the end of an employee's fifth hour of work and one more such break before the end of the employee's tenth hour of work. Meal breaks can be taken early in a shift - even before any rest break. Rejecting the plaintiff's "rolling five" argument, the Court wrote, "we cannot agree that the current [wage order] limits to five hours the amount of work after a meal." Thus, as an illustration, an employee who takes a meal break in the first two hours of an eight-hour shift need not be provided a second meal break before the end of the shift simply because he has worked another five hours prior to the end of the shift.

Rest Breaks: Employers must permit a ten-minute rest break for every four hours of work or "major fraction thereof" (which the Court defined as two hours) for employees working more than a total of 3.5 hours in a shift. The rest breaks should be scheduled around the middle of each work period, but employers "may deviate from that preferred course where practical considerations render it infeasible." However, the extent of employers' flexibility in this regard remains undefined and may be further tested in litigation.

Updating Employer Policies

The Court's decision that employers are not required to actually ensure that employees take a meal break will liberate California employers from the obligation of supervising their employees' meal breaks to ensure that no work is performed during the break. But, notwithstanding suggestions made in some early reactions to the decision, Brinker does not give California employers a free pass on this issue. While the Court was explicit in rejecting the contention that proof of knowledge by an employer that employees are working through meal periods should subject an employer to liability, its opinion is equally clear that employers must apply their meal break policies in good faith, and must not coerce - or incentivize - employees to work through meal breaks. Sophisticated employers may decide to resist the urge to relax their policies on this issue.

In any case, the Court's ruling should prompt employers to review and update their policies to ensure they reflect the proper meal and rest break standards. Compliance measures should also include providing appropriate training and reminders to managers as to the importance of adhering to these standards, and instructing employees about easy mechanisms for reporting any denial of a meal or rest break in violation of applicable policies.

Brinker does not disturb several long-standing aspects of California meal/rest break law. For example, it remains undisputed that employees are entitled to an hour of premium pay if the employer requires them to forego a meal or rest break. Employer policies aimed at ensuring compliance with such requirements - such as the automated payment of premium pay when time records indicate that an employee has not recorded a required meal break - should be maintained. Where possible, employees should be required to affirm that they received all required breaks and that any missed break was a voluntary choice. Moreover, on-going challenges by employees who perform work away from the workplace (for example, those expected to complete administrative tasks at home before or after work) could present new challenges to the calculation of the number of required rest breaks. This is because the applicable wage orders tie the number of rest breaks to the "total hours worked." Likewise, whether a rest break is even required is based on the "total daily work time." In short, vigilance and attention to both policy design and enforcement remain the order of the day.

The Litigation Angle - Class Actions Survive

The Brinker Court reached three distinct rulings regarding three different subclasses at issue in the litigation. First, the Court held that the plaintiff's proposed class claim for off the clock work, which was closely tied to the meal break claim, could not be certified. The Court focused on the lack of a common policy regarding off the clock work and found that the only existing policy in this area was the employer's explicit ban on off the clock work. The Court also reaffirmed that plaintiffs in off the clock cases must prove that the employer knew or should have known of the alleged unpaid work. Thus, in the absence of an illegal policy, the off the clock claims devolved into highly individualized claims of wage and hour violations - not the stuff of class actions. On this point, Brinker is in harmony with the February 6, 2012 decision of the California Court of Appeals (First Appellate District) in Duran v. U.S. Bank NA. While two decisions normally are not enough to constitute a trend, the Court's reasoning on this point provides employers with strong arguments to fight class action certification of such claims.

Second, with respect to the propriety of the employer's meal break policy itself, the Court remanded the case for an examination of the class certification issues under the proper standard for "providing" a meal break. Justice Werdegar, who authored the Court's opinion, wrote a separate concurring opinion emphasizing that the Court had not accepted the employer's argument that missed meal break class claims could never be certified: "In returning the case for reconsideration, the opinion of the court does not endorse Brinker's argument, accepted by the Court of Appeal, that the question why a meal period was missed renders meal period claims categorically uncertifiable." (emphasis in original). This part of the case is sure to provide comfort to the plaintiffs' bar regarding the prospects for future class actions.

Third, the Court concluded that class certification was appropriate with regard to the plaintiff's claim that the employer's rest break policies did not meet the requirements set forth by law. The Court focused on the uniformity of the Brinker rest break policy, finding that it was violative of the rest break rules earlier articulated and, therefore, "by its nature a common question eminently suited for class treatment." This holding underscores the viability of class action litigation that challenges an employer's written policies.

These holdings confirm that Brinker does not sound the death knell for meal and rest break litigation. Rather, it emphasizes the need for employers to adopt policies that are clear in setting forth the minimum requirements of the Labor Code and applicable wage orders. Development of such policies, in turn, should refute the contention that the employer maintains a common policy in violation of the wage and hour laws, thus making it more difficult for plaintiffs to be successful in arguing for class certification of meal and rest break claims.

Tags: class actions, meal breaks, off the clock, rest breaks

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Unemployment Benefits -- Workers Forced to Care for a Sick Child

By Backstrom & Heinrichs posted in Unemployment on Monday, April 23, 2012

Added April 23, 2012 by Alison Dearden

When an employee can no longer work because she is forced to care for a critically ill child, the parent may have "good cause", within the meaning of California's Unemployment Insurance Code §1256, to quit and retain her eligibility for unemployment benefits. Courts recognize the need for workers to balance work with parental duties and corroborate legislative intentions to reconcile the obligations of workers under the Unemployment Insurance Code with the duties of parenthood. (Sanchez v. UIAB, (1977) 20 Cal. 3d 55, 69-70.)

However, the employee should exhaust all other alternatives before quitting and be prepared to show that she had no other options. Moreover, the employee may be disqualified from receiving benefits until she can show that she is able and available to work within the meaning of §1253(c).

Section 1253(c) requires that a claimant is able to work and available for work. Courts interpret this to mean (1) that a claimant be willing to accept suitable work which she has no good cause for refusing; and (2) that the claimant thereby make himself available to a substantial field of employment. (Sanchez v. CUIAB, 1977 20 Cal. 3d 55, 67.)

The California Unemployment Insurance Appeals Board has held that a parent has "good cause" to refuse an offer of re-employment when the proposed schedule interfere with the claimant's desire to be at home caring for a sick child. (PB 304.) Moreover, the California Supreme Court held that a claimant who is a parent of a minor has "good cause" for refusing employment which conflicts with parental activities reasonably necessary for the care of minor children if there exists no reasonable alternative means of discharging those responsibilities." (Sanchez, 20 Cal. 3d at 70.) However, even if a claimant has good cause to refuse employment, the claimant must show she is still available to a "substantial field of employment" within the meaning of §1253(c).

In Sanchez, an unemployed waitress stated an inability to work on weekends because she had no one to care for her four-year-old son. She was offered employment that required her to work during the weekend. She refused and was denied unemployment benefits. The California Supreme Court held that she was available to work within the meaning of §1253(c) and she had good cause for refusing an offer of employment that required her to work on the weekend when she had no child care.

The Court stated, "The responsibilities our laws place on parents, and the importance to their children and society that those duties be discharged, mandate that the "good cause" concept not be defined so narrowly as to compel unemployed parents who remain available to a significant labor market to fulfill their parental responsibilities only upon pain of losing their unemployment benefits." (Sanches, 20 Cal. 3d at 70.)

Tags: 1253, EDD, available to work, unemployment, unemployment insurance code

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Trial De Novo Appeals From Labor Commissioner Wage Hearings

By Backstrom & Heinrichs posted in wage on Wednesday, April 18, 2012

Currently, our firm represents an employee in a trial de novo appeal of a Labor Commissioner wage hearing which had been held under the rules of Labor Code §98.[1] At that hearing, the hearing officer had awarded our client a sizable amount of unpaid wages. The employer decided to appeal the award. It properly sent notice as provided under Labor Code §98.2.

Labor Code §98.2 provides that ". . . the parties may seek review by filing an appeal to the superior court, where the appeal shall be heard de novo."[2] The term de novo is a Latin phrase that means "over again" or "anew". The Courts perceive it to mean that the record, findings, and award of the Labor Commissioner are void and the superior court hears the case as if for the first time:

The statutory trial de novo (see § 98.2) "is neither a conventional appeal nor review of the Labor Commissioner's decision, but is rather a de novo trial of the wage dispute" (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1116), and the court " 'hears the matter, not as an appellate court, [49 Cal.4th 66] but as a court of original jurisdiction, with full power to hear and determine it as if it had never been before the labor commissioner' " (id., at pp. 1116-1117, quoting Collier & Wallis, Ltd. v. Astor (1937) 9 Cal.2d 202, 205, italics added.[3]

Although denoted an "appeal," unlike a conventional appeal in a civil action, hearing under the Labor Code is de novo. (Lab. Code, § 98.2, subd. [23 Cal.4th 948] (a).) " 'A hearing de novo [under Labor Code section 98.2] literally means a new hearing,' that is, a new trial." (Pressler v. Donald L. Bren Co., supra, 32 Cal.3d at p. 835.) The decision of the commissioner is "entitled to no weight whatsoever, and the proceedings are truly 'a trial anew in the fullest sense.' " (Sales Dimensions v. Superior Court (1979) 90 Cal.App.3d 757, 763 [153 Cal.Rptr. 690].) The decision of the trial court, after de novo hearing, is subject to a conventional appeal to an appropriate appellate court. (1 Wilcox, Cal. Employment Law, supra, § 5.18[2] [a], p. 5-46.) Review is of the facts presented to the trial court, which may include entirely new evidence. (See Nordquist v. McGraw-Hill Broadcasting Co. (1995) 32 Cal.App.4th 555, 561 [38 Cal.Rptr.2d 221]; 1 Wilcox, Cal. Employment Law, supra, § 5.18[3], p. 5-49.)[4]

Another reason the Labor Commissioner's record cannot be used at a trial de novo is that the Labor Commissioner allows almost all hearsay into evidence. In contrast, California superior courts do not, unless the evidence falls within a statutory exception.

In addition, pre-trial dispositive motions should generally not be allowed in de novo appeals from a Labor Commissioner wage hearing. The legislature provided the Labor Commissioner hearing process to help employees quickly recover wages they are owed. The de novo appeals process was also devised with quick resolution and recovery in mind. Motions, discovery, and pre-trial hearings delay the process and make it much more expensive. The best process is to have the superior court hear the trial de novo soon after the request for appeal is filed. That would best support the legislature's intent to have wage issues resolved quickly.

Despite the above issues, the employer's attorneys convinced the superior court judge to put on its calendar a Motion for Summary Judgment. Their goal was to convince the Court to dismiss the Labor Commissioner's wage award without a new trial. They had convinced the judge to do that at an Ex Parte hearing before our client had contacted us.

After being retained and getting the full record of the Labor Commissioner's wage hearing from the employer, we decided that our best course of action, at that point, was to oppose the employer's Motion for Summary Judgment. Once we were served with the employer's motion, we were able to clearly see that the employer completely relied on the record of the Labor Commissioner's hearing. Accordingly, our primary opposition was that the Supreme Court requires superior courts to hold a new trial when adjudicating a de novo appeal from a Labor Commissioner's hearing under Labor Code §98. We will soon learn if our trial court agrees with our analysis.

[1] All references to the Labor Code are to the California Labor Code.

[2] Labor Code §98.2(a).

[3] Martinez v. Combs, (2010) 49 Cal.4th 35, 65-66.

[4] Post v. Palo/Haklar & Associates (2000) 23 Cal.4th 942 , 947-48.

Tags: labor commissioner, trial de novo, wage and hour, wages

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EEOC Guide for Employing Veterans

By Backstrom & Heinrichs posted in Veterans on Friday, March 16, 2012

Posted on March 16, 2012 by Alison Dearden

     Recently the EEOC issued a guide for employers regarding employing veterans and disabled veterans--"Veterans and The Americans With Disabilities Act (ADA):  A Guide for Employers".

     The guide identifies the federal laws that provide protections for veterans and veterans with disabilities including Title I of the Americans with Disabilities Act (ADA), the Veterans Preferance Act (VPA), the Vietnam Era Veteran's Readjustment Assistance Act (VEVRAA), and the Uniformed Services Employment and Reembployment Rights Act (USERRA).

     Title I of the ADA prohibits private and state and local government employers with 15 or more employees from discriminating against individuals on the basis of disability.  For example, it is illegal for an employer to refuse to hire a veteran because he has PTSD, because he was previously diagnosed with PTSD, or because the employer assumes he has PTSD. The ADA also prohibits disability-based harass­ment and retaliation.

     Under the Veterans' Preference Act, veterans with and without disabilities are entitled to preference over others in hiring from competitive lists of eligibles and may be considered for special noncompetitive appointments for which they are eligible.

     Under the Vietnam Era Veteran's Readjustment Assistance Act (VEVRAA), certain businesses with federal contracts or subcontracts are required to take affirmative action to employ and advance qualified disabled veterans. VEVRAA also requires these businesses to list their employment openings with appropriate employment service delivery systems, and to give covered veterans priority in referral to such openings.

     The USERRA prohibits employers from discriminating against employees or applicants for employment on the basis of their military status or military obligations. It also protects the reemployment rights of individuals who leave their civilian jobs (whether voluntarily or involuntarily) to serve in the uniformed services, including the U.S. Reserve forces and National Guards.

     The guide also describes how the ADA applies to recruiting, hiring, and accommodating veterans with disabilities, and provides information on laws and regulations that employers may find helpful if they want to make recruiting and hiring veterans with disabilities a priority.

Tags: National Guard, PTSD, U.S. Reserve, accomodations, disability, discrimination, preference, veterans

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THE NATIONAL LABOR RELATIONS BOARD STRIKES A CLASS ACTION WAIVER

By Backstrom & Heinrichs posted in Class Action Waiver on Thursday, March 15, 2012

The National Labor Relations Board (NLRB) ruled that class action waivers violate the rights of employees to engage in "concerted activities" to protect work place rights. (D.R. Horton, Inc. and Michael Cuda, NLRB No. 12-CA-25764, 2012.) According to the NLRB, such activities include the right to pursue collective or class actions. At first glance, the ruling in Horton appears to conflict with the United States Supreme Court's decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), which held that class action waivers under the Federal Arbitration Act (FAA) were enforceable in consumer contracts. However, the NLRB ruling was decided in a different context and under the National Labor Relations Act (NLRA). Thus, it does not directly conflict with the ruling in Concepcion.

The plaintiff, Michael Cuda, sued D.R. Horton for misclassifying him as an exempt employee. As a result, he claimed various wage violations.

Before Mr. Cuda filed suit, he had signed a Mutual Arbitration Agreement that required its employees to waive class or collective actions. When he filed a collective claim, the administrative law judge dismissed the case, citing the waiver. Based on his underlying claim that the waiver in the Mutual Arbitration Agreement violated the NLRA, he appealed the case to the NLRB.

The NLRB ruled that collective and class action claims could not be waived because the NLRA gives qualifying employees the right to bring them. It further said that the FAA allows parties to waive collective and class actions only when the parties do not give up important and relevant rights under the federal statute which the plaintiff is trying to enforce. In the Horton case, those rights flowed from the NLRA. Apparently, the problem with the waiver in the Mutual Arbitration Agreement was that it did not allow the plaintiff to exercise its right, under the NLRA, to file a collective or class action in any possible forum.

Further, the NLRB said that Concepcion only addressed an employee's right to bring a class action in arbitration and did not necessarily prohibit a party from filing a class action in court. In Horton, the waiver prevented a claimant from bringing a collective or class action in any forum, not just in an arbitration.  Accordingly, because the NLRA provided the right to file collective and class actions, the arbitration agreement could deny the right to file a collective action in an arbitration setting but not in a civil suit too.

Once again, the Supreme Court will probably need to decide whether the holding in Horton conflicts with its holding in Concepcion or whether Horton prohibits collective and class action waivers when a plaintiff brings claims under the NLRA.

Tags: Arbitration, Class Action Waivers, Class Actions, Collective Actions, Federal Arbitration Act, National Labor Relations Act, Wages

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No Individual Liability for FEHA Discrimination Claims

By Backstrom & Heinrichs posted in Discrimination on Thursday, March 15, 2012

Posted on March 15, 2012 by Alison Dearden

Courts have held that FEHA's person-as-agent language does not mean individual persons, as well as the employer itself, can be liable for discrimination.  Rather courts have held that the person-as-agent language of Government Code section 12926, subdivision (d) was '"meant to ensure that employers will be held liable if their supervisory employees take actions later found discriminatory, and that employers cannot avoid liability by arguing that a supervisor failed to follow instructions or deviated from the employer's policy.'" (Jones v. Lodge at Torrey Pines Partnership (2008) 42 Cal.4th 1158, 1163 [Jones], quoting Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 66 [Janken].) 

Accordingly, individual supervisory employees cannot be held personally liable for decisions that are discriminatory because making personnel decisions is an inherent and unavoidable part of the supervisory function.  (Jones, 42 Cal.4th at 1165.)  "'Without making personnel decisions, a supervisory employee simply cannot perform his or her job duties.'"  (Id., quoting Reno v. Baird (1998) 18 Cal.4th. 640, 645-646, quoting Janken, 46 Cal.App.4th at 63-64.)

The following are all reasons that courts refuse to impose individual liability for discrimination claims:

·         Discrimination claims arise out of the performance of necessary personnel management duties and making personnel decisions is an inherent and unavoidable part of the supervisory function.  (Jones 42 Cal.4th at 1165.)

·         "Imposing liability on individual supervisory employees would do little to enhance the ability of victims of discrimination to recover monetary damages, while it can reasonably be expected to severely impair the exercise of supervisory judgment."  (Jones 42 Cal.4th at 1165, quoting Janken.)

·         If every personnel manager risked losing his or her home, retirement savings, hope of children's college, education, etc., whenever he or she made a personnel management decision, management of industrial enterprises and other economic organizations would be seriously affected.  (Jones 42 Cal.4th at 1166.)

·         "'Imposing personal liability against individual supervisory employees adds little to an alleged victim's legitimate prospects for monetary recovery.  The plaintiff-employee's primary target remains the employer.  Adding individual supervisors personally as defendants adds mostly an in terrorem quality to the litigation, threatening individual supervisory employees with the spectre of financial ruin for themselves and their families and correspondingly enhancing a plaintiff's possibility of extracting a settlement on a basis other than on the merits.'"  (Jones 42 Cal.4th at 1166, quoting Reno 18 Cal.4th at 651-653, quoting Janken 46 Cal.App.4th at 72-75.)

·         Supervisors should not be subjected to the ever-present threat of a lawsuit each time they make a personnel decision.  (Jones 42 Cal.4th at 1167.)

 

Tags: FEHA, Janken, Jones, discrimination, employer liability, individual liability

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Can Employees Waive the Right to Bring an FLSA Collective Action?

By Backstrom & Heinrichs posted in Class Action Waiver on Wednesday, March 7, 2012

Citigroup recently argued, in a brief filed before the Second Circuit, that an employee can waive his or her right to bring a collective action, on behalf of a group of employees, under the Federal Fair Labor Standards Act (FLSA).  In its view, class action waivers are always enforceable when they are part of an arbitration agreement.

In Raniere et al. v. Citigroup Inc. et al, the trial court had ruled that Citigroup's class action waiver in an arbitration agreement under the Federal Arbitration Act (FAA) could not waive that employee's right to file a collective action under the FLSA.  The second circuit will seek to determine whether the recent ruling in AT&T Mobility LLC v. Concepcion, which held that class action waivers under the FAA were enforceable in consumer contracts, requires it to overrule the trial court and find that the right to file FLSA collective actions may also be waived.

Raniere claims that he was misclassified as an exempt employee.  As a result, he was not paid for any of the overtime hours he worked.  He claims that he and others like him who were misclassified are entitled to bring one action against Citigroup to compel it to pay all wages each similarly misclassified employee would have been paid if they had been properly classified.

The support for his position lies in the Congressional intent under the FLSA to protect the rights of American workers to collect wages they are legally owed.  Further, the FLSA provides for a specific collective action procedure which allows a group of employees to make similar claims against an employer who they believe owes them wages.

Of course, Citigroup believes that AT&T Mobility LLC requires the Second Circuit to find that a properly executed arbitration agreement under the FAA containing a class action and collective action waiver is enforceable.  Ultimately, the Supreme Court of the United States will probably need to determine whether one federal statute, the FAA, can trump the rights given under another federal statute, the FLSA.

Tags: Arbitration Agreements, Class Action Waiver, Class Actions, Collective Actions, Misclassification, Wages, Waiver

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Age Discrimination in California

By Backstrom & Heinrichs posted in Discrimination on Wednesday, February 22, 2012

Added February 22, 2012, by Alison Dearden

AGE DISCRIMINATION AND FEHA

The California Fair Employment and Housing Act (FEHA), codified as Government Code sections 12900-12996, is California's statute prohibiting age discrimination in employment.  FEHA applies to employers who employs 5 or more employees.  Unlike federal law, the FEHA protects older workers as a group and not just as individuals.

The FEHA prohibits age discrimination at all stages of employment including hiring, compensation, promotion and termination.  The FEHA also prohibits retaliation against employees for opposing age discrimination practices or for filing a complaint, testifying or assisting in FEHA proceedings.  It is also illegal, under the FEHA, for an employer to fail to take all reasonable steps necessary to prevent discrimination from occurring, and this "failure to prevent" is separately actionable under the FEHA.

An employer can be held liable for age discrimination if the employee can show that an intentional adverse action was taken against him/her because of his/her age.  Employees who believe they have been unlawfully discriminated against have one year to file a complaint with the California Department of Fair Employment and Housing (DFEH).  The DFEH is the administrative agency responsible for investigating and prosecuting violations of the FEHA.  The DFEH has the power to investigate the alleged discrimination.  However, if the employee does not want the DFEH to investigate, he/she may request an immediate right-to-sue letter when the complaint is filed.  Once the employee has received the right-to-sue letter he/she has one year to commence civil action.

Damages available to an employee for age discrimination in violation of the FEHA include economic damages (including back pay, front pay, and medical expenses), attorney fees, and expert witness fees.  Unlike federal law, under the FEHA, an employee can also recover punitive damages and general damages for pain and suffering and/or emotional distress.

Tags: DFEH, FEHA, age discrimination, damages, employment law

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