Developments in California Law Presented by Michael W. Kelly, Esq. 10/18/2012 37 Offices in 18 Countries
Supreme Court Employers Must Provide Meal and Rest Breaks We waited years and finally got a decision Now I m going to make you wait a little longer as Angela will discuss the case and its aftermath in greater detail in a special session devoted just to Brinker 2
Unpaid Wages Recoverable Under Private Attorney General Act (PAGA) Thurman v. Bayshore Transit Management, Inc. (Cal. App. Ct.) Court for the first time says PAGA applies to Sec. 558 unpaid wages Section 558 of Cal. Labor Code provides for civil penalty as well as recovery for unpaid wages Because PAGA does not require plaintiff to certify a class, expect to see more PAGA claims for unpaid wages 3
Supreme Court Opens Door to Expanding Administrative Exception Harris v. Superior Court (Liberty Mutual Ins. Co.) Distinguished case from earlier ruling in Bell. Bell held employees exempt only if they set company policy. Administrative employees who carried out policies were not exempt. Harris limited Bell to the facts in that case. Inquiry must be broader court provided examples of exempt employee who only carried out company operations. 4
No Overtime Wages Due to Pharmaceutical Sales Reps (PSRs) Christopher v. Smithkline Beecham Corp (U.S. Supreme Ct.) Under the Fair Labor Standards Act, outside sales representatives are exempt from minimum wage and overtime requirements. PSR s did not sell prescription drugs, merely tried to convince doctors to prescribe their drugs. Usually worked 40 hours a week visiting doctors, and another 10-20 attending events and performing other work. They did not receive overtime payment 5
PSR s Exempt employees under Fair Labor Standards Act (FLSA) Supreme Court not persuaded by Labor Department narrowing definition of outside sales rep for case would impose unpaid overtime wages on PSRs, who for years were treated as exempt by employees and Labor Department alike Court finds capacity of a salesmen lends itself to a broad definition of the terms. Work of PSRs, much like salesman, does not lend itself to 40 hour week 6
When in California Sullivan v. Oracle Corp. (9th Cir.) California Labor Code applies to Out-of State workers performing services in California for a California-based employer 7
Franchisor and Employee not in Employment Relationship Kimberly Aleksick v. 7-Eleven, Inc. (Cal. App. Ct.) Employee suing because decimalization cost her repeating numbers. Claims under Labor Code require employment relationship Employee cannot sue 7-Elevenunder Labor Code, because employment relationship was with the franchisee, not 7-Eleven Did not matter that Aleksick was suing because of a wage system 7-Eleven forced on its franchisees 8
Attorneys Fees Unavailable in Meal and Rest Break Claim Kirby v. Immoos Fire Protection, Inc. (Appeal Court) Section 1194 of Labor Code (providing for attorneys fees) only applies to overtime and unpaid wages, not meal or rest break claim Because providing one hour of pay is just the penalty for failure to provide meal and rest breaks, court finds it is not nonpayment of wages under 218.5 of Labor Code. Attorneys fees not available to either side 9
Record-Setting Award of $168 Million in Harassment, Retaliation Suit Employee cardiac surgeon s assistant -- filed 18 harassment complaints, and was fired after final complaint Jury finds she was subjected to a hostile work environment, retaliation, intentional interference, and meal period violations Alleges she was slapped on backside, grabbed, propositioned, etc. in front of supervisor who she says laughed Verdict includes $125 million in punitive damages 10
Age Discrimination Suits Court Compare to Employees Over 40 Earl v. Nielsen Media Research, Inc. (9 th Cir.) 59-year old 12-year veteran employee dismissed after repeated mistakes Court finds Earl can compare her treatment to employee significantly younger then her (42 years old), even if comparison employee is over 40. 11
$2 Million Verdict Reversed Joaquin v. City of Los Angeles, (Cal. App. Ct.) Cop fired in retaliation for false sexual complaint Superior Court ordered his reinstatement Appellate Court reversed, affirming employers can discipline and fire for making false charges 12
Accommodations for Unqualified Employees? Johnson v. Board of Trustees of Boundary County School Dist. (9 th Cir.) Johnson fired because depression prevented her from maintaining her credentials. Ninth Circuit finds she had enough time to get them, not a qualified employee under ADA 13
Partner Protected by Fair Employment and Housing Act (FEHA) Fitzimons v. California Emergency Physicians Medical Group (Cal. App. Ct.) Wrong to read person entirely out of statute, even though no personal liability Partners may be protected from retaliation when reporting harassment, discrimination, etc., of employees, but they are not protected from discrimination 14
How Many Accommodations? Regional sales manager diagnosed with cancer twice given time off for surgeries but no response to request that his travel obligations be eased during treatment Fired during recession due to lack of travel and contact with customers despite fact his region led all others in sales growth FEHC found employer failed to engage in interactive process and had given other employees with cancer six month leaves not offered to manager FEHC awarded $846,300 including $50,000 for pain and suffering 15
Attendance is Mandatory Samper v. Providence St. Vincent Med. Ctr. (9 th Cir.) Neo-natal intensive care unit nurse requested extra absences to accommodate her disability Provides no request for set number of days ADA Requires: Ø (1) Employee is disabled within the meaning of the ADA; Ø (2) Employee is a qualified individual able to perform the essential functions of the job with or without reasonable accommodation; and Ø (3) Employee suffered an adverse employment action because of her disability. 16
NICU Nurse No reasonable accommodation Nurses express concern the job requires consistent attendance Court finds the only accommodation that would satisfy nurse is open-ended absence policy; hospital not required to provide Employee essentially asking to be exempted from the qualification element under ADA not allowed 17
Random Sampling Dooms Class Action Duran v. U.S. Bank Nat l Ass n (Cal. App. Ct.) Misclassification suit Trial judge suggests random sampling in Class Action, draws 20 names from hat to represent 260 class members 4 selections opt out, judge will not allow defendant to introduce evidence about unselected class members 18
More Random Sampling Court find defendant s Due Process Rights Violated Ø Barring evidence that would have demonstrated certain class members properly classified Ø No trial by formula Court also disproves of random sampling Ø No evidence to show 20 plaintiffs constituted random sample of 260 Ø All randomness lost when 4 representatives dropped from suit Ø Without statistical reassurances, trial court plan fatally flawed 19
California Law May Govern, Even Over Choice of Law Provision Ruiz v. Affinity Logistics (9 th Cir.) California law may govern if other state s law would be contrary to important policy of California, or if California has a greater interest in the dispute Because GA law assumes independent contractor, and CA law assumes employment relationship, California law applies Only connection to Georgia was state of incorporation 20
Violating Employer s Computer Authorization Policy Not a Federal Crime United States v. Nosal (9 th Cir.) Conviction of former employee who stole computer data from company under Computer Fraud Abuse Act overturned Court recognizes broad implications if conviction upheld federal crime for exceeding authorization on computer Computer policies still encouraged, but no crime 21
NLRB Posters on Hold For Now NLRB issued requirement that post notices describing their employees rights under the National Labor Relations Act South Carolina court declared NLRB does not have the power to do so NLRB puts requirement on hold until further notice 22
California s New Legislation SB 459: Willful Misclassification of Employees as Independent Contractors Common Issue High enforcement priority Stay tuned for in depth discussion with Dan Pasternack this afternoon 23
More California Laws Employee Use of Social Media (AB 1844) Ø Prohibits requiring employees and applicants to supply usernames and passwords or accessing in presence of management Ø Permits requesting access as part of investigation into misconduct if the request is reasonable Ø Does not apply to employer-issued electronic devices Religious Dress and Grooming (AB 1964) Ø Religious dress and grooming standards subject to FEHA protection Ø Segregating away from public generally not reasonable accomodation 24
Still One More Law Written Commission Agreements (AB 1396) Ø Commissions must be in written contract Ø Remains valid even after expiration until replaced 25
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