California Labor Law News
Yahoo Faces California Discrimination Lawsuit
San Jose, CA: Yahoo faces a California discrimination lawsuit filed by a man who alleges his firing violates California employment laws. The lawsuit, which was filed February 1, 2016, alleges the plaintiff was fired because he is male. It also alleges violations of the WARN Act and seeks various damages and back pay.
According to court documents, Gregory Anderson became a Yahoo employee working as the Managing Editor, Autos, in November 2010, which included accepting an Offer Letter and signing an Employee Confidentiality and Assignment of Inventions Agreement. On June 11, 2012, Anderson was promoted to Editorial Director of Yahoo’s Autos, Homes, Shopping, Small Business, and Travel sections. He was also offered a retention package reserved for people considered “key employees,” which Anderson took as a sign he would not be terminated without cause.
In May 2014, Anderson was chosen to attend a journalism fellowship at the University of Michigan as a representative of Yahoo. The leave for the fellowship required signatures of Anderson’s bosses, who signed off on the leave and gave Anderson consent to attend the fellowship if Anderson agreed in writing to continue his employment with Yahoo at the end of his fellowship.
Then, on November 10, 2014, while Anderson was still on leave for the fellowship, he was fired from his position. The lawsuit alleges Anderson was told by his boss that his firing was the result of data from Yahoo’s Quarterly Performance Review (QPR) procedure, which reportedly put him in the lowest five percent of Yahoo employees. At the same time Anderson was terminated, around 600 other employees were also fired based on their numbers from the QPR procedure.
“[Anderson] requested documentation of these numbers and copies of his peer reviews to rule out some mistake, but was denied any information concerning the metrics upon which his termination was supposedly based,” the lawsuit alleges.
The QPR, according to the lawsuit, involves managers rating their employees on a scale of 0.0 to 5.0. But as a second step, higher-level management was able to modify employee scores, even though they may not have had contact with the employees whose scores they were reviewing and without being required to report why they were making changes.
The lawsuit alleges that “The employees were never told their actual numeric ranking or how it had been determined, but were only informed of their Bucket ranking or that they were being terminated because of that ranking. The QPR Process therefore permitted and encouraged discrimination based on gender and any other personal bias held by management."
Additionally, Anderson alleges Yahoo’s policy was that employees who were on approved leave were not subject to the QPR process while on their leave.
Based on comments made by higher-ups at Yahoo, Anderson argues his termination was the result of intentional discrimination.
Yahoo issued a statement to Business Insider (2/1/16) about the lawsuit noting that its review process was developed “to allow employees at all levels of the company to receive meaningful, regular, and actionable feedback from others.”
The lawsuit is Anderson v. Yahoo! Inc., case number 5:16-cv-00527, in US District Court, Northern District of California San Jose Division.
Los Angeles to Pay Almost $4 Million to Settle Harassment and Discrimination Lawsuit
Los Angeles, CA: Los Angeles has agreed to pay almost $4 million to a city parks worker who filed a lawsuit against the city alleging he suffered harassment and retaliation for years at the hands of one of his supervisors. After years in court, the Los Angeles City Council reportedly agreed to the payment after the court issued a ruling in favor of the city worker.
James Duffy worked as a gardener for the City of Los Angeles from 1991 to 2010, according to court documents. From 2001 to 2006, Duffy was allegedly the victim of discrimination and harassment from his supervisor, Abel Perez. The harassment reportedly included being called derogatory names, being given poor treatment and being written up without cause.
“During his tenure as plaintiff Duffy’s foreman, defendant Perez consistently gave plaintiff bad assignments and bad parks to work in and would not assign anyone to help him, while Hispanic gardeners usually got two assistants,” the lawsuit alleged. “Perez promoted Hispanic employees but refused to promote plaintiff. He stole tools from plaintiff’s truck and threatened to write plaintiff up when the tools were discovered in Perez’s truck.”
Making the situation worse, in 2004, Duffy suffered a serious brain injury while at work. That brain injury caused Duffy to speak more slowly and have difficulty thinking. He also developed a tendency to repeat himself. Perez reportedly mistreated Duffy, hiding his tools so he could not carry out his job duties. Perez was transferred after an investigation into his behavior but still allegedly harassed and discriminated against Duffy because he was indirectly still Duffy’s supervisor.
“From mid-2008 until Duffy’s retirement, Perez allegedly drove by Duffy’s assigned parks several times a week during which he honked his horn at Duffy and called him derogatory names,” judges wrote in their decision. “Duffy reported that, on two occasions, Perez threatened him with physical harm. Perez repeatedly made references to Duffy’s race and disability during the incidents, and threatened to kill him if he reported Perez to his superiors and made him lose his job.”
Despite Duffy reporting the harassment to supervisors, no further action was taken. Perez has maintained he did not harass or discriminate against Duffy, but other workers on the job backed up Duffy’s claims that Perez said he was biased against white employees.
Duffy was awarded $3,255,000 at trial, but the city appealed, arguing that Duffy had waived his right to sue when he opted for early retirement. The appeals court agreed with the trial court and included appeal costs in its award.
The lawsuit is James Duffy v. City of Los Angeles, case number B252465, in the Court of Appeal for the State of California.
Undocumented Workers Entitled to Job Protections
Sacramento, CA: While immigration is at the forefront of discussions during the presidential campaign, the plight of undocumented workers and their legal struggles are also an important talking point. And although states may attempt to skirt federal laws - and employers may attempt to ignore federal laws entirely - undocumented workers in California and other states are entitled to some protections, to ensure unethical employers do not take advantage of them.
In 2014, the California Supreme Court ruled in favor of Vicente Salas, who filed a lawsuit against his employer, alleging he was fired in retaliation for filing a workers’ compensation claim and did not have his disability accommodated after he was injured on the job. The Los Angeles Times (6/26/14) reports Salas was working for Sierra Chemical Co., and injured his back while working.
Salas, who was an undocumented worker, got his job by using someone else’s Social Security number. Initially, his lawsuit was dismissed but the state high court found that Salas could sue for back pay until the time his employer became aware he was working illegally.
Federal immigration law makes it illegal for an undocumented worker to use false documents to get a job, but does not prevent employers from paying employees for work done while the employer does not know about the worker’s immigration status, the court found.
According to the court, California state law protects all workers, and they are entitled to protections, regardless of their immigration status. Unfortunately, many undocumented workers are not aware of this protection, and become victim to unethical employers who use the situation to underpay and mistreat employees.
A 2014 report from the Pew Research Center (11/18/14) found that California is home to the most undocumented immigrants, with nearly 2.5 million living in that state. That means that undocumented immigrants make up just over six percent of California’s population. The same study suggests that almost one-tenth of California workers are undocumented.
Across the United States, there are around 11.2 million undocumented immigrants. A 2009 study called “Broken Laws, Unprotected Workers” (found online at nelp.org) found rampant violations of federal wage and hour laws - including minimum wage, overtime and rest break violations - among workers in low-wage industries.
Undocumented workers are entitled to wage and other employment protections. If their rights are violated, they may be eligible to file a lawsuit against their employer.
TrueCar Truly Believes It Is Compliant with California Law
Santa Monica, CA: In an ongoing California compliance battle between the California New Car Dealers Association (CNCDA) and TrueCar Inc. (TrueCar), the former continues to chase the latter in the courts over what the CNCDA feels is unlawful pricing, together with false and misleading advertising on the part of TrueCar, or so it is alleged.
TrueCar is an entity that was founded in 2005, and reportedly has grown to be a popular resource for car buyers in the Golden State. According to the Sacramento Bee (1/7/16), TrueCar forges relationships with car dealers across the country, and employs those relationships to provide accurate and detailed pricing information on the cost of vehicles through its digital platform. TrueCar claims to have the capacity to link buyers to economically favorable offers from its affiliated dealers, and thus avoid on-site haggling that is normally the bastion of the automotive sales industry.
However, the CNCDA has cried foul, alleging that TrueCar is not complying with California law that serves to regulate the automotive sales industry. For one, the CNCDA accuses TrueCar of false and misleading advertising by way of assertions that TrueCar advertises a claim of “no surprise or hidden fees” on its website, when in reality - or so it is alleged - TrueCar receives a fee from each sale moved through its digital platform.
“TrueCar actually matches a buyer and a seller and gets paid for doing so. This is brokering, and TrueCar isn’t licensed as such,” insisted Brian Maas, CNCDA president, in comments published in the Sacramento Bee. The California compliance lawsuit asserts that TrueCar is not in compliance with California law and seeks a remedy to bring TrueCar into compliance.
TrueCar, for its part, asserts that it is already in compliance, and suggests that a lawsuit having twice been amended by the plaintiff is a sign that the CNCDA non-compliance lawsuit is full of holes.
The CNCDA, based in Sacramento, represents over a thousand franchised new car and truck dealers in the state of California and bills itself as the largest association of its kind in the United States. It brought a California non-compliance lawsuit against TrueCar in May of last year.
According to the Sacramento Bee, the plaintiff made its first of two amendments to its lawsuit in the summer following TrueCar’s attempts to have the lawsuit dismissed in August. Johnny Stephenson, identified as the Chief Risk Officer for TrueCar, suggested in an e-mailed statement to the Sacramento Bee that his company moved to have the newly amended complaint dismissed outright, based on various “defects” TrueCar noted in the complaint.
According to published reports, the Los Angeles Superior Court in Santa Monica did actually dismiss the CNCDA complaint in December of last year, but left the barn door open sufficiently to allow the plaintiff to further amend its complaint and refile again.
The CNCDA did just that and resubmitted its complaint last month. The plaintiff contends that TrueCar is, effectively, acting as a broker in matching buyers with vehicles - and in the state of California, entities undertaking brokerage of any kind must be licensed to do so.
According to the Los Angeles Times (5/20/15), TrueCar charges its affiliated dealers a fee for each sale - about $299 for a new car and $399 for a used car. In some states, including California, TrueCar charges a monthly subscription fee that roughly translates to those rates. It is that subscription fee that generated the California lawsuit. Since California state law dictates that consumers must be provided with a disclosure that outlines whether they or a dealer are paying a fee to a broker, the CNCDA sees that subscription fee as the impetus for a non-compliance lawsuit.
TrueCar, based in Santa Monica, insists it remains compliant with the letter of the law. To that end, the CNCDA is not seeking monetary damages in its California compliance lawsuit, but rather seeks compliance on the part of TrueCar according to California law, should it wish to continue its current business model.
Cigna Settles ERISA Lawsuit
Los Angeles, CA: Cigna has agreed to settle an ERISA lawsuit alleging patient harassment. The ERISA lawsuit was filed against Cigna by Nutrishare Inc, an intravenous nutrition provider. In the lawsuit, Nutrishare alleged Cigna harassed patients who attempted to use out-of-network benefits and denied coverage that should have been allowed.
According to court documents, Nutrishare alleges that Cigna advertised health insurance policies as giving patients the choice to obtain health care from any health care provider, even if that health care provider is considered “out of network,” although plans that allow for out-of-network health care cost more than those that have restrictive health care provider options. Nutrishare offers long-term, in-home intravenous nutrition services allowing patients to obtain nutrition they need to survive serious illness and infection, but is considered by Cigna to be an out-of-network provider.
Nutrishare claims Cigna retaliates against patients who attempt to use their out-of-network benefits by “making threatening telephone calls to those patients, by directing the patients’ physicians to encourage the patients to switch from out-of-network providers to inferior, in-network providers, and by underpaying and/or failing to pay the patients’ out-of-network providers.” Furthermore, Cigna is accused of denying payment or underpaying for services provided using false pretenses, forcing patients to incur financial liability.
In the lawsuit, Nutrishare gives the example of one patient who was diagnosed with idiopathic gastroparesis, which causes partial paralysis of the stomach. The patient requires daily TPN (total parenteral nutrition) for more than 10 hours a day to ensure she receives enough nutrients and calories to survive. The patient (whose name is not given in court documents) was allegedly directed by Cigna to use an in-network provider for her TPN services, but suffered from central line infections, and was given incorrect or incomplete orders of TPN products and supplies. On the advice of her physician, the patient switched to Nutrishare and has since not suffered any complications. According to the lawsuit, Cigna responded by phoning both the patient and the patient’s physician, making the patient feel threatened.
Additionally, Cigna is accused of not properly paying for services that should be covered for patients who pay extra to use out-of-network services.
“The goal of Cigna’s harassment and failures to pay are clear: Cigna wants to save money by coercing its patients into using only in-network providers, despite the fact that these members pay for PPO plans that permit full access to out-of-network providers and that these patients do not want to switch to a different, inferior provider of TPN services,” the lawsuit alleges. “One of Cigna’s tactics for achieving this goal is to make providing services to Cigna members so unattractive to Nutrishare - because those services will not be paid for - that Nutrishare will have no choice but to turn away Cigna patients in the future.”
Cigna has reportedly agreed to settle the lawsuit, which alleged the company violated the Employee Income Retirement Security Act by intimidating policyholders into using in-network health care providers.
The lawsuit is Nutrishare, Inc., et al v. Connecticut General Life Insurance Company, et al, Case number 2:15-cv-00351.
California Wrongful Dismissal Lawsuit in “Stark” Contrast
Los Angeles, CA: A California wrongful dismissal lawsuit alleging wrongful termination by a former executive with the Tri-City Medical Center is intertwined amidst a host of allegations involving violations to Stark Law. The latter, which is defined as a limitation on certain physician referrals, has cost the Tri-City Medical Center in excess of $3 million to resolve violations.
The US Department of Justice (DOJ) had been investigating various alleged violations involving agreements for physician compensation and other arrangements viewed as excessive, unbalanced and “appeared not to be commercially reasonable, or for fair market value,” according to a DOJ statement. In announcing the resolution agreement with the DOJ, Tri-City Medical Center noted the management team that was in place when the aforementioned arrangements were procured and put together is no longer at the helm.
One member of that executive team, former chief compliance officer Steven D. Stein, is continuing with a California wrongful dismissal lawsuit that began as a complaint filed in 2012 with the US Equal Employment Opportunity Commission. The original complaint asserted numerous allegations, including “retaliation for asserting, or refusing to condone or not report, continuing violations of the Stark Law.”
It appears that Stein may have blown the whistle on the violations to Stark Law, which were numerous at the time - over and above some 92 arrangements with other physicians that failed to qualify for exceptions from Stark Law. Written agreements were found to have expired, were lacking signatures or were missing altogether.
That complaint escalated into a California wrongful termination lawsuit against Tri-City Medical Center, a 400-bed hospital located near San Diego. The lawsuit makes no reference to Stark Law or whistleblowing relative to the issue.
In a statement issued when the settlement with the DOJ was announced, Tri-City said that “The hospital executives that oversaw the contracting are no longer affiliated with Tri-City Medical Center,” the statement said.
“It is unfortunate to have inherited this longstanding legal issue, but we are pleased to have brought it to a successful conclusion,” the statement added.
Amongst the former Tri-City executives to have had the alleged Stark Law violations occur on their watch was former CEO Larry Anderson. He is no longer with the hospital.
There was no reference to any other California wrongful dismissal lawsuit other than that of Stein. The total value of the settlement agreement between Tri-City and the DOJ was reported as $3.3 million.
The California wrongful dismissal lawsuit is Stein v. Tri-City Healthcare District et al, No. 3:2012cv02524 in US District Court, Southern District of California.
California Minimum Wage Increases
San Diego, CA: As of January 1, 2016, the California minimum wage has increased to $10.00 per hour. That means all eligible employees must be paid at least $10.00 per hour for regular hours. Employees who are not properly paid the minimum wage may be eligible to file a wage and hour lawsuit against their employer.
According to the Department of Industrial Relations, the January 1 increase is the second in 18 months. On July 1, 2014, California’s minimum wage was increased from $8.00 per hour to $9.00 per hour. The second stage of the increase was the January 1, 2016 raise to $10.00 per hour. The pay increase took effect as of the first day of January, meaning all employees who earn the state minimum wage should see the change in their pay beginning January 1.
“Almost all employees in California must be paid the minimum wage as required by state law,” the department notes in its news release. Independent contractors and other workers may be exempt from minimum wage pay, but most workers are eligible for it. Employers must also post information about wages, hours and working conditions at an employee-accessible area. As a result of the minimum wage increase, eligible employees will also see an increase in the minimum overtime pay required.
Some cities in California have higher minimum wages than state law. According to KTLA (12/28/15), San Francisco, Oakland and Emeryville have minimum wages of more than $12. Los Angeles reportedly may raise minimum wages in the city to $15 per hour by 2020.
Cheerleaders in California might notice the biggest jump in pay. As of January 1, all California sports teams are required to pay their cheerleaders at least minimum wage. Although that will only affect a small number of games this season, it will affect all games for California teams going forward.
Cheerleaders are frequently treated as independent contractors instead of as employees, despite their supervisors having a great deal of control over their appearance and their cheerleading schedule. The new law (AB 202) requires that cheerleaders in California be treated as employees, meaning they are also eligible for paid sick leave and meal breaks.
In recent years, lawsuits have been filed by cheerleaders in various sports leagues alleging their pay often amounts to well below minimum wage when expenses, fees and penalties are factored in. Some of those lawsuits have been settled for millions of dollars, while others are still pending.
New California FMLA Laws Take Effect
Sacramento, CA: Parents in California now have more flexibility when it comes to their families, thanks to a new California family leave bill. The bill, which took effect as of January 1, increases protections for parents who have to take time off to care for children or enroll children in school.
Senate Bill 579 was signed into law by Governor Jerry Brown in October 2015, and affects employers with 25 or more employees at the same location. Parents can take up to 40 hours per year for the care of a sick child or to tend to a child out of school because of an emergency or other unscheduled school closure. The bill also extends the protection to stepparents, foster parents, grandparents and other guardians.
Under the law, non-exempt employers must provide up to 40 hours per year so parents can deal with school or childcare-related situations. Activities included in the protections are enrolling or reenrolling a child in a school or with a licensed childcare provider; participating in school activities; or dealing with a childcare provider emergency or school emergency.
Under the law, for example, a parent could take a leave day if his or her child’s school was unexpectedly closed.
Furthermore, parents and guardians can use a paid sick day to care for a sick child. So, a parent who has accrued sick leave can now use that sick leave either for his or her illness or to care for a sick family member. This would include treatment of an existing health condition or absence resulting from domestic violence.
Employers are prohibited from discriminating against or terminating employees who take protected leaves. Employees whose rights to family leave or sick leave are violated may be eligible to file a lawsuit against their employer.
In addition to changes to family leave, California also has a new minimum wage law. As of January 1, 2016, California’s minimum wage is set at $10.00 per hour, up from $9.00 per hour. The change also means that employees who make minimum wage will see a bump in their overtime pay.
And there have also been changes to the Fair Pay Act, which expand equal pay to jobs that are “substantially similar,” rather than jobs that are identical, and to jobs for the same employer or company even if those jobs are at different locations. Previously the law only applied to jobs at the same location. The changes also make it illegal for employers to prevent employees from talking about their pay.
Is California’s Heat Illness Prevention Act Actually Working?
Sacramento, CA: There appears to be a disconnect between what the California Division of Occupational Safety and Health (Cal/OSHA) views as heat-related deaths amongst agricultural workers in the state and deaths that have nonetheless resulted following long hours toiling in the hot sun.
This, following an investigation by The Desert Sun (12/2/15), a newspaper serving Palm Springs. According to the story, reporters were able to access documents through a request under the Public Records Act. Documentation suggested that Cal/OSHA had identified 13 deaths from heat-related causes in the 10 years since the enactment of the state’s Heat Illness Prevention Act (The Act) of 2005.
However, that number does not jive with data associated with a recently settled lawsuit brought by the United Farm Workers (UFW). That data put the number of deaths due to heat-related stresses at more than double those identified by Cal/OSHA. What’s more, the data covered by the UFW covered just a six-year period, from 2005 through 2011, v. the 10-year window identified by Cal/OSHA.
The Desert Sun suggests that part of the disconnect may be due to criteria that Cal/OSHA uses to classify a death as heat related. Of specific cases scrutinized by The Desert Sun reporting team, witnesses described circumstances that had all the markings of heat exhaustion. However, doctors and coroners, whose mandate it is to rule on a cause, could not determine if heat actually caused the death or was a contributing factor.
A death deemed to have been caused by heat exhaustion must be identified plainly with heat as the absolute cause, rather than an underlying contributor - at least in the eyes of Cal/OSHA, according to the report.
Regardless of the interpretation, The Desert Sun opines that the decade-old Heat Illness Prevention Act appears to have not been working, with rates of heat illness remaining effectively unchanged. In that time, heat-related illnesses (and deaths either caused or exacerbated by heat stress) have continued.
Last May (2015) the state strengthened The Act by mandating employers to monitor their outdoor workers for the first two weeks of employment in an area of high heat. Cool drinking water is to be readily available, and suitable shade for rest breaks and meal periods must be provided when temperatures hit 80 degrees.
Once temperatures reach 95 degrees, employers are mandated to provide workers with a 10-minute break with suitable shade once every two hours, as a minimum.
The Desert Sun reported that Assemblyman Eduardo Garcia (D-Coachella) has vowed to investigate in realistic terms how the industry is monitored, and how Cal/OSHA specifically classifies heat-related illness and deaths.
In the meantime, any employer who fails to undertake provisions of The Act - including those provisions updated in May - leave themselves open to litigation should an illness or death occur.
On an unrelated note, Cal/OSHA has proposed a standard for workplace violence prevention. The standard would require health care employers to implement a written workplace violence prevention plan, together with procedures to communicate workplace violence matters to employees.
Provided the standard is adopted, any implemented plan would bar employers from retaliating against employees who seek help from emergency services or law enforcement if a violent incident occurs. This would have ramifications in a hospital or eldercare facility.
Judge in Uber Case Rules on Arbitration Agreements
San Francisco, CA: Plaintiffs in the Uber misclassification lawsuit have been handed another victory in their litigation against the ridesharing company. The judge in the lawsuit has ruled against Uber’s arbitration agreement, setting the stage for thousands more plaintiffs to join the lawsuit.
US District Judge Edward Chen ruled Uber’s arbitration agreement was not enforceable, meaning drivers who signed it are eligible to join a class-action lawsuit against the ridesharing company after all. In September, Judge Chen granted plaintiffs class-action status, although at the time the class did not include drivers who signed Uber’s arbitration agreement.
In December, however, Judge Chen ruled on the arbitration agreements, finding them unenforceable as a matter of public policy. Judge Chen found that the 2014 and 2015 arbitration agreements “contain a non-severable PAGA [Private Attorney General Act] waiver, rendering the entire arbitration agreement also unenforceable.” As a result, UberBlack, UberX and UberSUV drivers will now be eligible to join the lawsuit if they signed up under their individual name, even if they did not opt out of the arbitration agreement.
In addition to ruling on the arbitration agreements, Judge Chen also ruled class members could pursue claims linked to work expenses, including vehicle and phone expenses.
Uber has appealed the decision.
The lawsuit was initially filed by Uber drivers who claimed they were misclassified as independent contractors even though Uber reportedly treated them like employees. Because they were classified as independent contractors, they were not eligible for certain protections, including overtime, sick days and health insurance.
Some employers require workers to sign arbitration agreements, which essentially waive an employee’s right to file a lawsuit to settle disputes such as wrongful termination and wage complaints. Instead, employees are forced to go through an arbitration process to resolve any claims. Arbitration cases have different rules about sharing information between claimants and defendants than court processes and usually do not allow for appeals.
Up to 160,000 drivers could now be included in the class against Uber, although some drivers are still excluded. The ruling also shows that not all arbitration agreements are enforceable and the courts may still be required to make judgments on the legitimacy of individual agreements.
The lawsuit is O’Connor et al. v. Uber Technologies Inc. et al., case number 3:13-cv-03826, US District Court for the Northern District of California.
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