Yahoo Accused of WARN Act Violations

WARN Act, Layoff ViolationsThe WARN Act, Worker Adjustment and Retraining Notification, is a California and federal law requiring employers to give employees notice before layoffs and plant closings. WARN Act laws,  can carry harsh penalties for employers who violate them, which could be very bad news for Yahoo!, Inc.

Gregory Anderson, who previously worked as an editor at Yahoo’s headquarters in Sunnyvale, California, has filed a wrongful termination suit. Anderson alleges that Yahoo violated both the federal WARN Act and the California WARN Act by reducing its workforce by around 600 employees without declaring a reduction in force or providing the employees notice under the WARN Acts.

What are the Requirements of the WARN Act?

California’s WARN Act has a broader scope than the federal WARN Act. The federal law applies only to employers with 100 or more full-time employees, while California’s law applies to employers with 75 or more or part-time employees. In both cases, the employees must have been employed for at least six of the previous 12 months.

If an employer covered by California’s WARN Act lays off 50 or more employees during a 30-day period, the employer is required to give the affected employees notice 60 days before the layoffs take place. Federal law requires this only if the number of employees affected constitutes at least 33% of the full-time employees at a single place of employment. (However, if 500 or more employees are laid off, the federal law requires notice regardless of whether the employees meet the 33% requirement.) California’s law, unlike the federal law, applies also to employees who must be relocated.

Both laws hold employers liable for back pay and benefits for each day that they failed to provide an employee with proper notice. California’s law also allows for a civil penalty of $500 for each day.

Anderson’s WARN Act Lawsuit

Anderson alleges that Yahoo used a Quarterly Performance Review (QRP) Process to sidestep the requirements of the WARN Acts. According to his complaint, Yahoo manipulated the results of the employees’ reviews and used their low scores as a pretext for terminating them, rather than laying off the employees and providing them with proper notice. Anderson is seeking back pay and benefits for the 60 days that he was not given notice, and $500 for each of the 60 days. He is also seeking attorney’s fees and damages related to other causes of action.

Another allegation in Anderson’s complaint is that Yahoo discriminated against him on the basis of his gender. According to Anderson, the company has a pattern of promoting women while “terminating, demoting or laying off men because of their gender.” Anderson also alleges that he was fired in violation of public policy, because he was terminated after complaining to Yahoo management about the legality of the QPR system. [Read more…]

CA Appeals Court Arbitration Waiver Ruling

arbitration waiverMario Garrido signed and arbitration waiver when he was hired as a truck driver for American Air Liquide, Inc. in Santa Fe Springs, California. The arbitration waiver required him to resolve any disputes with his employer via arbitration and included a provision prohibiting class arbitration.

After Garrido lost his job, however, he filed a class action complaint against Air Liquide, alleging that he and his co-workers were subjected to a variety of unfair labor practices. Air Liquide responded by filing a motion to compel arbitration, but the trial court denied the motion, holding that Garrido had a right to file a class action claim. Air Liquide appealed.

On October 26, 2015, a California Court of Appeal upheld the decision, siding with Garrido. The ruling, Garrido v. Air Liquide Industrial U.S. LP, established several important precedents for cases involving arbitration waivers in the following areas:

To Whom Does the Federal Arbitration Act Apply?

The arbitration agreement that Garrido signed when he began working for Air Liquide stated that it was governed by the Federal Arbitration Act (FAA). Garrido argued that this provision was invalid because the FAA itself states that it does not apply to transportation workers. Air Liquide argued that Garrido should not be considered a transportation worker because Air Liquide is not in the transportation industry.

The Court of Appeal agreed with Garrido and held that as a truck driver, he was excluded from the FAA. The ruling states that a truck driver is a transportation worker, regardless of who owns the goods that the driver transports.

Can the CAA Apply Automatically?

The California Arbitration Act (CAA) was not mentioned in the arbitration waiver. Garrido argued that, in light of this, it could not apply to his case, but the court disagreed. The ruling holds that the CAA can be enforced even when it has not been explicitly mentioned in an arbitration agreement.

Garrido argued that because Air Liquide’s motion to compel arbitration dealt with the FAA, and not the CAA, Air Liquide lost its right to compel arbitration under state law. The court disagreed with this, as well, pointing out that Air Liquide had never argued that the CAA would not apply.

Can the State Refuse to Enforce a Class Arbitration Waiver in a Non-FAA Case?

Garrido argued that, even though the arbitration agreement contained a class waiver, his class action suit should nonetheless be allowed to proceed. While the California Supreme Court recently held the FAA prevents the state from striking down class waivers for public policy reasons, that decision did not address whether it would be appropriate in a CAA case.

The Court of Appeal used the four-factor test applied in Gentry v. Superior Court, which is based on:

  • The size of potential individual recovery,
  • The potential for retaliation against class members,
  • Whether absent members of the class may be unaware of their rights, and
  • Obstacles to the use of individual arbitration.

After applying the test, the Court of Appeal agreed with the trial court that a class proceeding would be more effective than individual arbitration. [Read more…]

Does Your Policy on Employee Meal Breaks Violate California Law?

California’s Labor Code lays out the requirements for when employees must receive meal breaks. Under Section 512(a), an employee with a work period of more than 10 hours per day must be allowed two meal periods that are at least 30 minutes long. If the employee has worked fewer than 12 hours, the second meal period may be waived by mutual consent of the employer and the employee.

That may sound fairly straightforward. However, Industrial Wage Commission (IWC) Order No. 5-2001 has a provision, Section 11(d),that states, “Notwithstanding any other provision of this order, employees in the health care industry who work shifts in excess of eight hours in a workday may voluntarily waive their right to one of their two meal periods.” (The order does not place any limitations on the length of the shift.) This has raised a question for employers in the health care industry – if an employee works for more than 12 hours, can the second meal break be waived?

Gerard v. Orange Coast Medical Center

A California Court of Appeal has weighed in with an answer. In Gerard v. Orange Coast Memorial Medical Center, the court ruled that a hospital violated the rights of its employees by directing them to work shifts in excess of 12 hours without two meal breaks. The court went on to declare that Section 11(d) of IWC order 5-2001 is partially invalid.

The ruling states: “We agree that the conflict between Section 11(d) and Section 512(a) creates an unauthorized additional exception to the general rule set out in Section 512(a), beyond the express exception for waivers on shifts of no more than 12 hours. ‘Under the maxim of statutory construction, expressio unius est exclusio alterius, if exemptions are specified in a statute, we may not imply additional exemptions unless there is a clear legislative intent to the contrary.’”

The court then points to the text of Section 516 of the Labor Code, which states that the IWC may adopt or amend working conditions with respect to meal periods, except as provided in Section 512. In light of this exception, the opinion states that the California legislature intended to prohibit the IWC from amending its wage orders in ways that would conflict with Section 512’s meal period requirements.

In partially invalidating Section 11(d), the court ruled that its decision would be applied retroactively. It held that the plaintiffs are entitled to seek premium damages for any failure by the hospital to provide mandatory second meals that took place within the previous three years. [Read more…]


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