Labor Dispute – McDonald’s Brand Scrutinized

labor disputeLabor dispute; joint employer or franchise? After years of complaints and protests against low wages and other labor issues, the National Labor Relations Board (NLRB) eventually issued grievances against McDonald’s in 2015. Wage and labor complaints from multiple franchises in California cities and others across the country were consolidated. Beneath all the labor issues lies the question, is McDonald’s USA a joint employer of franchise employees, and therefore responsible for the treatment of employees at individual franchises?

Labor Dispute Issue

The central problem in the lawsuit surrounds franchise operators’ response to employee demonstrations. McDonald’s workers claim they were fired after participating in protests organized by a labor advocacy group called Fight for $15. According to the group, workers across the country lost their jobs simply for participating in these protests.

The Lawsuit

So who is responsible for the actions of individual franchises? Does the mother corporation hold any liability when their franchises are found guilty of labor or safety violations? What implications would a decision one way or the other have on the way business is conducted across the nation?

McDonald’s argued that it simply rents out its brand to individual franchises, and every franchise is an independent business. Policies are particular to each business, and are out of the corporation’s hands.

Conversely, the NLRB hoped to expand the joint employer doctrine, extending liability to corporations to whom they franchise their brands.

Many observers felt that a ruling against McDonald’s—naming it as a joint owner–would increase franchisors’ vulnerability to legal action, toppling the franchise model altogether. Anxious to avoid having to agree that it is a joint employer, McDonald’s agreed to a settlement in which they admitted no wrongdoing, but resolved claims with an undisclosed payout to employees.

Fight for $15 was not quite as eager to settle the case, arguing that McDonald’s needed to publicly take responsibility for surveilling, harassing and firing employees who were simply standing up for themselves against paltry wages by engaging in legally protected activity.

So how did the judge respond to the proposed labor dispute settlement?

Not so Fast…

Administrative Law Judge Lauren Esposito found that unfair practices by the McDonald’s chain were not adequately addressed, and the proposal was summarily rejected.

McDonald’s USA responded with disappointment, noting that expensive, time-consuming labor dispute litigation would extend for months or years to come. The possibility of an appeal of the court’s decision is being evaluated.

Fight for $15 was delighted with the labor dispute ruling, hoping to hold McDonald’s feet to the fire and force the corporation to take responsibility for the wages and working conditions employees suffered.  Everything is on hold while both sides decide how to proceed. [Read more…]

California Fires: When Natural Disasters Impact Your Ability to Return to Work

california firesCalifornia fires have had a disastrous effect on natural structures and communities. In addition to the many homes that have been devastated, businesses have been destroyed as well, leaving many Californians without jobs. If you are one of the many residents of this state who have lost not only a home, but your livelihood, you may be wondering what the obligations of your employer are in terms of salary and leave during this fire disaster.

California Fires and Wage Laws

Under California law, when a natural disaster occurs, employers must pay reporting time pay as per the Wage Order. This means that as employees are scheduled to return to work and they show up ready to work, but are not able to be put to work, or are allowed less than half of their usual work hours, they must be paid half their usual wage. At a minimum, they must be paid for two hours of work at their normal rate of pay. So if, for example, an employee works one hour out of an eight-hour shift, payment for four hours is required. However, if the employee chooses to leave early, this requirement becomes null. If the employee leaves early due to illness, the company’s sick leave policy would then potentially come into play.

When employees are required to attend meetings on days in which they normally do not work, they may be entitled to anywhere from two to four hours of regular pay.

California Fires and Exceptions to Reporting Time Pay

There are certain circumstances under which employers are not expected to pay overtime pay:

  • When persons or property are threatened and authorities determine that work may not begin or continue;
  • When public utilities such as electricity, water, gas or sewer are inoperable;
  • When the problem that caused the work disruption is an Act of God, such as an earthquake.

When Employers do Not Pay Reporting Time Pay as Required

Employees are protected by California law and must be paid under the circumstances described. When employers fail to meet their obligations, individuals may file a wage claim with the Labor Commissioner’s Office, or they may sue their employer to recover lost reporting time pay owed to them.

California Fires – What if Employers Retaliate?

Federal law prohibits discrimination or retaliation against employees for attempting to collect owed monies. If an individual experiences these types of issues, or is fired altogether, it is yet another reason to file a lawsuit against the errant employer. [Read more…]

Workplace Drug Testing

drug testingDrug testing has become a routine part of the job in many industries these days. In the past 30 years, in fact, drug testing has risen by nearly 300%. But is such testing accurate? With over 22 million tests being administered in this country every year, even a 5% false positive rate could result in over one million people’s lives being impacted in a negative way. Furthermore, are workers’ rights to privacy in the workplace being protected? If you feel your rights have been violated due to drug testing, an employment attorney may be able to help.

Drug Testing And False Positives

Recent studies indicate that 5-10% of drug tests produce false-positive results. Poppy seeds—even just a teaspoon—can produce a positive test for opioids, even three days after consumption. Prescription antidepressants and cold medicines can indicate amphetamines or benzodiazepine, and HIV medications can indicate that marijuana is in the bloodstream. Even ibuprofen has been connected with positive results for marijuana.

Drug Testing is Intrusive

Testers worry about potential tampering with test samples. That sometimes leads them to observe the employee, or to remove the sample provider’s outer attire and collect the urine sample in a room in which the water has been turned off.  For many, this experience is degrading and invasive.

Once the sample hits the lab, testing may reveal much more than the presence of illegal substances. Some legal drugs may be in the sample, and human error may make the distinction between legal and illegal substances difficult. False positives are a real possibility. Additionally, pregnancy or the genetic predisposition to diseases may also be detected. Sound impossible?  Unfortunately, there are documented cases in which this has occurred.

Systematic Errors with Drug Testing

While no one would argue that a safe workplace is not in in the best interests of employers and employees alike, many employers simply do not have sound practices in place when it comes to drug testing.

  • Random Testing: If the selection process for employees chosen for testing is not truly random, it may be discriminatory. In California, random testing is only allowed under narrow circumstances.
  • Legal Compliance: The law allows for testing of employees under reasonable suspicion of drug use only if objective facts are in evidence. Barring a good reason, singling out someone for testing is not lawful. Employers need to be aware of specific laws carved out by various municipalities or by other authorities in particular industries.
  • Uneven Implementation: One study indicates that just over 20% of respondents conducted drug testing on workers after employment. If policies are not administered uniformly, employees may have reason to suspect discrimination.
  • Medical Marijuana: While marijuana has been approved for medicinal purposes in California, it is still considered a schedule one drug at the federal level. Employers may have a zero-tolerance policy for marijuana, even though it is legal in the state.

[Read more…]

Immigrant Workers: Protections Expanded in California

Immigrant WorkersImmigrant workers make up roughly one-third of California’s workforce, paying over $5 billion in state taxes each year. Even so, the political climate has undoubtedly been alarming of late, leaving many to feel vulnerable. Many people now worry about losing their homes, jobs, and families.  In these challenging times, understanding California labor law can bring a bit of comfort in the workplace. If you are an immigrant living and working in California, there are laws on the books to protect you. Let our experienced legal team fight on your behalf.

The Battle Against Immigrant Workers Wage Theft

In an effort to combat wage theft, Governor Brown signed SB 588 into law in 2015. Wage theft occurs when employers illegally withhold wages from an employee. It occurs in numerous ways:

  • Offering hourly rates below minimum wage;
  • Failing to pay overtime at the state and federal rates;
  • Compelling workers to put in time “off the clock.”

Research indicates that immigrant workers and low-wage earners tend to be disproportionately impacted by these actions because they are unaware of the laws or they fear losing their jobs if they complain.

SB 588 seeks to give workers greater protections and more leverage when they do file a claim.  Now, employers may face a levy on their business bank accounts or a lien on their property if they are found guilty of wage theft.

Offensive Language Eliminated

SB 432 took effect in January 2016, and it effectively removed the word “alien” from the California Labor Code. The elimination of the derogatory term was intended to recognize the value and contributions of immigrant communities in California.

Eliminating E-Verify Except for Federal Work

The Employment Acceleration Act of 2011 provides key protections to laborers.

California Section 2812 deals specifically with electronic employment verification, known as the e-verify system. It states that, except when required federally, employers may not require employees to use the e-verify system. The exceptions include:

  • When it is required in order to receive a government contract;
  • When required to apply for or maintain a business license:
  • When being penalized for violating other licensing laws.

Basically, this means that it is illegal for an employer to use the federal E-Verify system to check a worker’s authorization status except in the case of government work. This applies to both current and potential workers.

Professional Licensing Available to All Californians

SB 1159 allows all Californians the opportunity to become licensed in 40 different professions.  By allowing the use of either a social security number (SSN) or an Individual Taxpayer Identification Number (ITIN), the law essentially allows anyone in the state to obtain a license, irrespective of immigration status. [Read more…]

Gender Wage Gap – California Fair Pay Act

Gender Wage GapThe gender wage gap has been around for a long time, and came to the forefront with Hillary Clinton’s bid for the White House. Although Clinton lost the election, the issue she ran on is still alive and well. Are you a woman who suspects disparate wages due to gender discrimination?  You need an experienced legal team to help you recoup the wages you deserve.

Gender Wage Gap in California

An analysis of California wages demonstrates that women were earning about $8,000 less per annum than men in 2012. Women of color lagged even further behind. Latina women earned only 43 cents on the dollar, Black women earned 63 cents on the dollar, and Asian women earned 72 cents on the dollar in comparison to white men. The situation has improved with time, but women on average earn just 79 cents to every dollar a man earns in this country.

Why the Gender Wage Gap?

Research indicates that women traditionally gravitate toward lower paying jobs, such as nursing and teaching. Even in professions such as marketing and technology, women actually ask for roughly $14,000 less than their male counterparts for the same job. That makes it easy for employers to offer women about 3% less than men for the exact same position.

Discrimination may play a role in wage disparities. A Cornell study concluded that when women compete for men for the same job while holding equivalent credentials. Their study corroborates with census data indicating that across industries, job functions, and educational background. Women earn significantly less than men for the same work.

Closing the Gender Wage Gap in California

This fall, Governor Jerry Brown took a step to improve matters when he signed a tough new pay equity law that will come into effect in January 2017. Supplementing state and federal laws requiring equal pay for equal work, the new California Fair Pay Act prohibits bosses from paying employees less for “substantially similar work” when their titles or locations differ. It also bans retaliation against employees who discuss their disparate salaries.

Now, more than ever, rather than differentiating pay at will, employers must apply a reasonable standard based on seniority, merits, quantity or quality of production, education, or experience.  Furthermore, employers must keep accurate records of pay for three years.

Remedies for Discrimination and Retaliation

Under statute, employees may recover wages plus interest and attorney’s fees. If unfairly discharged as retaliation, an employee may pursue civil action and seek reinstatement, as well as pay for lost wages and benefits, plus interest. The employee must make such a claim within one year of the perceived actions. [Read more…]

Collecting Attorney Fees in EEOC Discrimination Case

EEOC Discrimination CaseNew Supreme Court ruling is a boon to employers hoping to collect attorney’s fees in an EEOC discrimination case. If your company is dealing with an EEOC complaint, you will most likely find the Supreme Court’s recent decision in CRST Van Expedited, Inc. v. Equal Employment Opportunity Commission to be welcome news. The case involved a ruling by the U.S. Court of Appeals for the Eighth Circuit, which held that a defendant in a Title VII case (such as an employer) is only entitled to payment for its attorney’s fees if it prevails in court after a “ruling on the merits.” The Supreme Court overturned this decision, and held that it is possible for a defendant to prevail and receive compensation for attorney’s fees, even without a ruling on the merits.

EEOC Discrimination Case Background

CRST’s EEOC discrimination case legal battle (which has lasted for over a decade) began when an employee named Monika Starke filed a complaint with the EEOC in 2005. She alleged that, over the course of her training as a truck driver, she was sexually harassed by two of her trainers. CRST denied the allegations. When the EEOC investigated, it discovered that four other employees had filed complaints. The EEOC ultimately found that there was reasonable cause to believe that an entire class of employees had been subjected to sexual harassment, and filed a lawsuit against CRST under Title VII on behalf of the aggrieved employees.

The EEOC eventually named more than 250 female employees of CRST as victims of sexual harassment. At trial, the District Court found that the EEOC had not satisfied its presuit requirements, and barred the EEOC from seeking relief for any of the employees. When CRST requested compensation for its EEOC discrimination case legal fees, the District Court approved the motion, and awarded CRST over $4 million in attorney’s fees.

An appeal, the Eighth Circuit found that CRST should not receive compensation for attorney’s fees. It reasoned that, due to precedent, only “prevailing” parties can receive compensation for attorney’s fees, and a party can only prevail if there has been a judicial determination of the plaintiff’s case on the merits. Because some of the complaints were thrown out due to the EEOC’s handling of the presuit requirements, the Court found that there had not been a ruling on the merits. According to the Court, there is a distinction between a ruling based on the elements of a claim (which would constitute a determination on the merits), and a ruling based on prerequisites to filing suit.

The Supreme Court disagreed, and held that there should be no requirement that a case be resolved “on the merits” in order for the defendant to be awarded attorney’s fees. According to the Court’s ruling, common sense dictates that a defendant has prevailed whenever a plaintiff’s claim has been rejected. The Court vacated the Eighth Circuit’s ruling, remanded the case for further proceedings, and urged the lower courts to expedite the resolution because the dispute has already taken so much time. [Read more…]

Employee or Independent Contractor – Lyft Driver Dispute

employee or independent contractorAm I an employee or independent contractor? Ridesharing company Lyft has reached a settlement agreement with California drivers who filed a lawsuit regarding their classification as independent contractors, rather than employees. The settlement requires Lyft to pay the drivers $12.25 million, but does not require the company to reclassify them as employees.

The case was filed in 2013 in the U.S. District Court for Northern California by a Lyft driver named Patrick Cotter, who claimed a variety of allegations related to wages and expenses. One of their complaints was that, because Lyft classifies its drivers as independent contractors, the drivers were required to pay for expenses such as gas and auto insurance. Cotter initially filed the lawsuit on behalf of himself and Lyft drivers nationwide, but amended the complaint to include only California drivers after the Court ruled that drivers outside of California did not have a cause of action.

The Settlement

After participating in mediation sessions, the parties agreed to a settlement. The settlement includes a $12.25 million payout which (if approved by the court) will be divided among the class of plaintiffs. The settlement also contains the following provisions:

  • Lyft will only “deactivate” drivers for specific reasons, rather than being able to deactivate them at will.
  • Before drivers are deactivated, Lyft will allow the drivers to address the concerns about their performance.
  • If a driver decides to go to arbitration to challenge his or her deactivation, or to address a compensation issue, Lyft will pay his or her arbitration expenses. (Lyft uses an arbitration clause in its contracts, but these clauses did not keep this case out of court.)
  • Lyft will create an option referred to in the settlement as “favorite driver,” which allows passengers to choose drivers who will receive unspecified benefits.
  • Lyft drivers will be given access to information about potential passengers via their smartphones, before deciding whether or not to accept the passengers’ ride requests.

The settlement does not, however, establish the drivers as employees. It contains language asserting that Lyft denies that any member of the settlement class is an employee, that Lyft denies any wrongdoing, and that Lyft denies that any of the plaintiffs’ claims are valid.

The settlement has no bearing on a similar lawsuit filed against Uber by its drivers, which is on course to head to federal court in June.

Employee or Independent Contractor – The Legal Landscape

Employment lawyers, business owners, and employees around the country were watching this lawsuit, hoping that a ruling might provide some guidance on how courts will handle similar cases. The issues brought up in this case regarding the line between employees and independent contractors are relevant not only to transportation companies, but to participants in the “on-demand” economy at large. [Read more…]

How Easily Can a Forum Selection Clause Be Overturned?

forum selection clauseRequesting that new employees sign an employment agreement with a forum selection clause (which determines which state will have jurisdiction over legal disputes) is a common practice for businesses that operate in multiple states. Even if these clauses are mandatory, however, they can still be overturned by the courts. The case of Verdugo v. Alliantgroup stands out as one of California’s most important wage and hour rulings of 2015, as it gave guidance on an important issue – which side has the burden of proof when the validity of a mandatory forum selection clause is questioned.

The Forum Selection Clause Case

When Rachel Verdugo was hired in 2007 to work in Irvine, California for a tax consulting services company named Alliantgroup, she signed an employment agreement with a choice-of-law clause. This clause stated that the employment agreement would be governed in all respects by the laws of Texas – which is where Alliantgroup is headquartered. The agreement also stated that subject matter jurisdiction and personal jurisdiction would be limited to Texas, and that Harris County, Texas, would be the only accepted venue for legal disputes.

Verdugo nonetheless filed a class action complaint in California against Alliantgroup in 2013. She alleged that she and similarly situated employees of Alliantgroup had been subjected to a variety of wage and hour violations, including failure to pay overtime wages and vacation pay, failure to provide required meal breaks, and unfair and unlawful business practices.

When Alliantgroup moved to dismiss the complaint based on the employment agreement’s forum selection clause, the trial court granted the motion. However, a California Court of Appeal reversed the decision, and held that the forum selection clause was unenforceable.

Where the Burden Lies

Verdugo argued that litigating the case in Texas would violate her rights as a California worker – rights that cannot be waived. The Court held that because the plaintiff was making this argument, the burden was therefore on the defendant to prove that her rights would not be diminished if the case was litigated in Texas. The Court went on to determine that Alliantgroup failed to meet this burden.

The ruling points out that six of Verdugo’s claims were based on her statutory rights under the California Labor Code. The Court held that because California’s legislature has stated that these statutory rights cannot be set aside, a requirement that Verdugo’s case be litigated according to Texas law would be amount to a waiver of her unwaiveable rights. The Court cited case law in determining that in these types of situations, the burden is placed on the defendant.

Having held that Alliantgroup had the burden to prove that Verdugo’s rights would not be diminished, the Court determined that Alliantgroup had not met that burden. Alliantgroup argued that it was probable that a Texas court would apply California law, but the Court held that this “speculation” was not enough to satisfy the burden of proof. [Read more…]

Wal-Mart Violating Minimum Wage Laws Per CA Court

violating minimum wage lawsHas Wal-Mart been violating minimum wage laws? Wal-Mart’s trucking system has gotten a great deal of attention recently, as a Wal-Mart driver has been charged with manslaughter for his role in the auto accident that left comedian Tracy Morgan severely injured. However, California employers would be well advised to take note of a different court case involving Wal-Mart and trucking – Ridgeway v. Wal-Mart Stores, Inc. – which has set some important precedents regarding minimum wage standards.

The case involves a group of Wal-Mart truck drivers who sued their employer, on the grounds that they were not paid minimum wage for all of the hours that they worked. They alleged that Wal-Mart should have paid them at least minimum wage for the time they spent on mandatory layovers, and on activities such as fueling, making inspections, and finishing their paperwork. Wal-Mart argued that the drivers were not entitled to minimum wage for time spent on layovers, and that the aforementioned activities were subsumed within other activities for which the drivers were paid at least minimum wage.

When the plaintiffs filed a motion for summary judgment on whether Wal-Mart’s payment policies were in compliance with California law, the U.S. District Court for the Northern District of California granted their motion. The Court’s order included the following findings:

  • The Court rejected Wal-Mart’s claim that activities like fueling, making inspections, and finishing paperwork could be subsumed into other activities. The order states that employers are not allowed to “build in” time spent on non-driving activities into a piece-rate compensation system, but instead must pay employees such as the plaintiffs at least minimum wage for all hours worked.
  • The Court held that Wal-Mart was required to pay the drivers the minimum wage for time spent on layovers. Wal-Mart, which paid the drivers $42 total for 10-hour layovers, argued that the drivers were not subject to their control during their layovers, but the Court rejected this argument. According to the order, the drivers were subject to their employer’s control during layovers because Wal-Mart prohibited the employees from spending the layovers at home, and set limitations on where the layovers could take place.
  • Wal-Mart pointed out that general transportation managers provided discretionary payments to drivers at times. The plaintiffs argued that while the payments may be relevant to the amount of damages, they were not relevant to the motion for summary judgment. The Court agreed with the plaintiffs and stated that the discretionary nature of the payments demonstrated that they were not indicative of Wal-Mart’s standard pay policy.

Could Your Business Be Violating Minimum Wage Laws?

If you run a business in Sonoma County, Mendocino County or Lake County California with a piece-rate compensation system, it may be time for you to take a close look at whether your policies comply with the law. If you work as a truck driver in California and you have not been paid minimum wage for all of your work hours, you may wish to look into whether you have a case against your employer. [Read more…]

New California Legislation Affects Employee Parental Activity Leave

parental leave activityNew California legislation affects employee parental activity leave. One of the many bills signed into law by Governor Jerry Brown on October 11, 2015 was Senate Bill 579. This bill amended Section 230.8 of the California Labor Code, which allows employees to take leave from work each year to participate in activities related to their children’s schooling or day care. The section, as revised, now applies to foster parents and stepparents, and it allows employees to take leave for a wider range of activities.

The Specifics of the Parental Activity Leave Bill

The basic provisions of Section 230.8 include:

  • Requiring California employers with 25 or more employees at a particular location to allow any employee who is a parent (or a guardian or grandparent with custody of a child) to take up to 40 hours of leave per year in order to participate in activities at their children’s schools and/or day care facilities.
  • An employee may not take off more than eight hours in a calendar month for these school or daycare activities, and the employee must provide his or her employer with reasonable notice.
  • An employee who decides to take leave for these activities must make use of any vacation time, compensatory time off, or personal leave to which he or she is entitled. In addition, if the employee is entitled to time off without pay, then he or she may make use of it for these activities.
  • The employee must provide the employer with written documentation from the school or daycare facility if the employer requests it.

SB 579 has amended the section in a number of ways relating to parental activity, including the following:

  • The term “parent” can now apply not only to a parent or a grandparent, but also to a stepparent, a foster parent, or someone who stands in loco parentis to a child. (“In loco parentis” refers to someone legally standing in the place of a parent.)
  • The term “licensed child daycare facility” has been replaced with the term “licensed child care provider.”
  • The time off may be used to find a school or child care facility, or to enroll or reenroll one’s child in a school or child care facility.
  • The time off may also be used to address an emergency related to a school or a child care provider. The statute explains that the term “emergency” refers to when the child of the employee is unable to remain at his or her school or child care facility. (The possible reasons for this include closure of the facility, behavioral problems, natural disasters, and a request from the school or child care provider that the child be removed.)

[Read more…]

Disclaimer

The information on this website should not be considered to be legal advice, nor construed to be the formation of any manner of attorney client relationship. Prior to taking any form of legal action, please consult with an attorney experienced in the appropriate area of law germane to your situation. Case results and testimonials presented on www.californialaborandemploymentlaw.net or any of its related websites are germane to the facts present for each individual case and is not a promise of similar outcomes for any other cases. This website is not intended to solicit clients for matters outside of the State of California.