New Law to Affect 6.5 Million Californians
On August 29, 2014, California Governor Jerry Brown signed a bill mandating paid sick leave for nearly all employees in California. Lorena Gonzalez, a San Diego Assembly woman authored the bill that will require nearly all California employers to provide a minimum of three paid sick days to their workers, marking a landmark victory for workers’ rights. The bill is expected to affect approximately 40 percent of the state’s workforce, or more than 6.5 million California employees who have no paid sick days.
During a signing ceremony on September 10, 2014 in Los Angeles, Governor Brown remarked, “Whether you’re a diswasher in San Diego or a store clerk in Oakland, this bill frees you of having to choose between your family’s health and your job.”
Franchisor Not Liable for Sexual Harassment of Franchisee’s Employee under FEHA
In Patterson v. Domino’s Pizza, LLC., the California Supreme Court addressed the issue of whether a franchisor, such as Domino’s Pizza, LLC., can be held vicariously liable for claims of alleged sexual harassment by an employee of a franchisee, such as an individually owned Domino’s Pizza store. Under the California Fair Employment and Housing Act (FEHA), an “employer” is strictly liable for all acts of sexual harassment by a supervisor. The Court held, in a 4-3 decision, that Domino’s Pizza, LLC was not liable for the actions of a shift manager employed by one of its franchisees because Domino’s did not exercise the requisite level of control over the franchisee.
Patterson v. Domino’s Pizza, LLC, No. S204543, 2014 WL 4236175 (Cal. Aug. 28, 2014).
The plaintiff, Taylor Paterson, filed suit against Domino’s Pizza, LLC., the franchisee, and the
Professional Networking Site LinkedIn to Pay $6 Million for FLSA Violations
After being investigated by the US Labor Department for Fair Labor Standards Act (FLSA) violations, LinkedIn has been forced to pay out nearly $6 million in damages and unpaid overtime to 359 employees in California, Illinois, Nebraska and New York.
The investigation revealed violations of the overtime and record-keeping parts of the FLSA. Specifically, LinkedIn failed to properly pay and account for “off-the-clock” hours worked by non-exempt employees. These hours should have been recorded on the employee’s timesheets and paid either at the employee’s usual rate or at an overtime rate where such work caused the employee’s hours to exceed 40 in a workweek. Under California law, overtime is required where an employee works in excess of 8 hours in a workday or in excess of 40 hours in a workweek.
Appellate Court’s Opinion
On September 3, 2014 the U.S. Court of Appeals for the Ninth Circuit affirmed the district court’s grant of class certification (overtime class action) to Jack Jiminez and about 800 other Allstate employees in California who alleged that Allstate has a practice or unofficial policy of requiring its claim adjusters to work unpaid off-the-clock overtime in violation of California law.
The Appellate Court holds that the district court did not abuse its discretion in applying Fed. R. Civ. P.23 (a)(2)’s commonality requirement and that the class certification order did not violate Allstate’s due process rights. Specifically, the panel held that the class certification order preserved Allstate’s opportunity to raise any individualized defenses at the damages phase, and that the district court’s approval of statistical modeling did not violate Allstate’s due process rights.
California’s “Right-To-Control” Test Cited in Federal Ninth Circuit Court Of Appeals Ruling
FedEx Drivers Are “Employees”, Not “Independent Contractors”
Class actions were brought against FedEx in both California and Oregon by FedEx drivers contending they had been misclassified as independent contractors. The California plaintiff class alleged claims for employment expenses, unpaid wages, and benefits purportedly due them as employees based on their misclassification as independent contractors. The class action was originally filed in the California Superior Court in December 2005.
The plaintiffs in the California case represented a class comprising approximately 2,300 individuals who were full-time delivery drivers for FedEx in California between 2000 and 2007. Plaintiff class members worked for FedEx’s two operating divisions, FedEx Ground and FedEx Home Delivery. (Alexander, et al. v. FedEx Ground Package System, Inc.)
FedEx’s Operating Agreement (“OA”) governs its relationship with the drivers, and the company contends its drivers are independent contractors under California law.
Fair Credit Reporting Act and Employee Background Checks
Employer violations of the Fair Credit Reporting Act are on the rise, leading to an increase in class action lawsuits. The most common issue leading to class action lawsuits is the manner in which employers obtained and used consumer reports about job applicants, to include credit reports and criminal background checks.
The Fair Credit Reporting Act, or FCRA, requires employers to (1) disclose to applicants, in a document containing only the disclosure, that the employer may request a consumer report about the applicants and (2) obtain applicants’ authorization to request the consumer report. Both of these steps must be completed before a consumer report is obtained. Employers are permitted to combine the disclosure and the authorization into one form, but some employers include additional information in their disclosures and authorizations, such as explanations of at-will employment, explanations of privacy policies, and requests for additional information about an applicant that arguably is unrelated to the request for consumer reports. It is the inclusion of this additional information, and the omission of the term “consumer report” from those documents, that has resulted in recent class action lawsuits.
On July 21, 2014, President Obama approved and signed an Executive Order prohibiting federal contractors from discriminating on the basis of sexual orientation or gender identity — in other words, specifically protecting individuals from LGBT discrimination. “We’re on the right side of history,” Obama said at a press conference. “America’s federal contractors should not subsidize discrimination against the American people.”
Executive Orders – LGBT discrimination
Two executive orders already protected federal employees on the basis of sexual orientation. Executive Order 11246, Equal Employment Opportunity (1965), signed by President Lyndon B Johnson, barred discrimination by federal contractors on the grounds of race and sex. The second, Executive Order 11478, Equal Employment Opportunity in the Federal Government (1969), signed by Richard Nixon, barred discrimination by the government itself. The amendments put into action by President Obama bar discrimination against transgender federal employees, and add people who identify as LGBT to a list of those against whom federal contractors cannot discriminate. The Order went into effect immediately after signing.
Background on a case concerning employee reimbursement
Colin Cochran (plaintiff) filed a putative class action against Schwan’s Home Service, Inc. (Home Service) on behalf of customer service managers who were not reimbursed for expenses pertaining to the work-related use of their personal cell phones. He alleged causes of action for violation of section 2802; unfair business practices under Business and Professions Code section 17200 et seq.; declaratory relief; and statutory penalties under section 2699, the Private Attorneys-General Act of 2004. He moved to certify the class. Home Service filed an opposition as well as a motion to deny certification. On October 24, 2012, the trial court held a hearing.
The trial court denied class certification on the grounds that “many people now have unlimited data plans for which they do not actually incur an additional expense when they use their cell phone,” and therefore concluded that individual questions of liability would predominate, rendering class certification improper. The trial court stated: “[Cochran] has not demonstrated how the cell phone plans and method of payment exhibited by a portion of the class will accurately reflect the plans and method of payment for the entire class.
California Labor Code Section 2802
Pursuant to section 2802, subdivision (a), “[a]n employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer[.]” The purpose of this statute is “‘to prevent employers from passing their operating expenses on to their employees.’” (Gattuso v. Harte-Hanks Shoppers, Inc. (2007) 42 Cal.4th 554, 562 (Gattuso) [quoting legislative history from the 2000 amendment to the statute].) “In calculating the reimbursement amount due under section 2802, the employer may consider not only the actual expenses that the employee incurred, but also whether each of those expenses was ‘necessary,’ which in turn depends on the reasonableness of the employee’s choices. [Citation.]” (Gattuso, supra, 42 Cal.4th at p. 568.)