California Labor Law News
California Employee Discrimination Suit Nets $4.75 Million Award
Sacramento, CA: A California employee discrimination lawsuit has resulted in a multimillion-dollar award for the plaintiff, who alleged her job termination was the result of age and gender discrimination. The plaintiff, Barbara Anderton, filed the lawsuit against Bass Underwriters in 2013 and according to the Sacramento Bee (10/15/15), recently received a $4.75 million award.
In 2013, Anderton was 61 years old and reportedly one of the highest earners at Bass Underwriters, where she worked for almost 15 years. She alleged in her lawsuit that she was fired and replaced by a younger male employee. Bass responded to the allegations saying Anderton quit her job because of a family dispute - her brother is an executive vice president at Bass Underwriters.
But a jury agreed with Anderton, and found Bass Underwriters not only discriminated against Anderton, but also harassed her and retaliated against her because she is female and 61 years old. The jury then awarded her $2.75 million in punitive damages and $2 million in compensatory damages.
A study conducted by the National Bureau of Economic Research (and cited by BloombergBusiness [10/26/15]) suggests that age discrimination is still a widespread problem in the United States, especially for older women. The study involved three researchers sending fictional resumes for a variety of jobs, with the ages of the “workers” changed. Researchers found that the rate of callbacks was higher for younger job applicants than older ones, and the highest level of discrimination was reportedly seen in older women.
Age discrimination is illegal under state and federal laws. Employers are prohibited from making employment decisions on the basis of a person’s age or gender. But that doesn’t always stop employers from taking discriminatory actions. In such cases, employees can file an employment discrimination lawsuit against their employer.
According to court documents, that’s what Maria Sicola did when she filed a $40 million age and gender discrimination lawsuit. That lawsuit was filed in New York, but Sicola worked in the company’s California office and alleges she was fired one day before her 60th birthday and replaced with a younger male colleague. Sicola had reportedly worked for her employer for around 35 years.
Additionally, Sicola’s lawsuit alleges she was harassed by a male colleague but her employer failed to take action on her complaints, and was denied promotions and pay raises because she is a woman. In the lawsuit, Sicola alleges her employers repeatedly promoted less qualified male employees while not supporting Sicola.
Sicola’s lawsuit is Maria Sicola v. Cushman & Wakefield Inc., in the Supreme Court of the State of New York (no case number currently available).
Another Tale of Two California Harassment Lawsuits
San Francisco, CA: A California harassment lawsuit has been filed against a janitorial contractor based in Gilroy over allegations of sexual harassment against a female employee by a supervisor. The lawsuit contends that M.A Jones Inc., which also does business as Cleaning Services, did nothing about the harassment allegations, then fired the plaintiff when she reported the behavior. Meanwhile, a separate harassment lawsuit ended in July with a multimillion-dollar verdict in favor of the plaintiff.
The Contra Costa Times (9/30/15) reports the latest lawsuit involves plaintiff Virginia Medina, who worked for M.A. Jones Inc. Medina claims that a supervisor made sexually explicit comments to her, and at one point escorted her to an isolated area where the supervisor attempted to initiate sexual activity, or so it is alleged.
When Medina rebuffed the supervisor’s advances and reported the alleged activity to the defendant’s leadership team, the plaintiff alleges there was no response. She was fired from her position three months later, and alleges the termination was due to her rebuff of her supervisor’s advances and subsequent reporting of the alleged harassment.
The lawsuit has been filed by the US Equal Employment Opportunity Commission, alleging various violations to US federal laws which require that an employer “take effective and immediate action” in such situations, said William Tamayo, the agency’s San Francisco district director, in comments published in the Contra Costa Times. “[Our agency] cannot accomplish its mission of equal employment opportunity unless workers feel secure in their right to speak out against discrimination without the fear of retaliation.”
Medina is of Mexican descent. An attempt to reach a settlement was not successful. The lawsuit was brought to San Jose’s division of the US District Court for the Northern District of California.
Meanwhile, a California harassment and discrimination lawsuit that resulted in an $8.7 million jury award in favor of the plaintiff in July was in the news again earlier this month after defendant Rite Aid Corp. was ordered to pay $1 million in attorney’s fees. The case is Robert Leggins v. Rite Aid Corp., case number BC511139, in the Superior Court of the State of California, County of Los Angeles.
The original California harassment lawsuit was brought by plaintiff Robert Leggins, who worked as a store manager at Rite Aid. Following a robbery attempt during which Leggins was injured, the plaintiff alleges he was harassed and accused of shirking his responsibilities in light of an injury that required several surgical procedures to remedy. Even while recovering, it is alleged that supervisors required him to perform hard manual labor, and mocked him for his injury and his race. Leggins had worked at the Rite Aid since 1985 and was a long-standing employee.
In July a jury dismissed allegations of discrimination, but found for the plaintiff on allegations of harassment and undue punishment. Leggins was awarded $3.7 million for lost wages and other losses, together with $5 million in punitive damages in the California harassment lawsuit.
Undocumented Workers Integral to California Economy
Camarillo, CA: A decision in a wage and hour lawsuit in New York not only carries positive implications for any undocumented worker in the state of California who may feel wronged by an employer, it also lends itself to the depth and breadth of the undocumented workforce in the Golden state.
The New York lawsuit was David Rosas et al v. Alice’s Tea Cup, LLC, Case No. 1:14-cv-08788-JCF, filed July 6, 2015 in the US District Court for the Southern District of New York. The plaintiffs brought wage and hour claims against their employer, citing violations to the Fair Labor Standards Act (FLSA) and other labor laws recognized by the state of New York. The defendant came back with a request for the plaintiffs to verify their immigration status, which the plaintiffs fought on grounds that immigration status was irrelevant to the matters at hand.
The judge in the case agreed, noting in his decision that the risk of injury to the plaintiffs and the potential for intimidation outweighed the probative value of revealing immigration status for reasons of credibility. To wit, US Magistrate Judge James C. Francis IV in his decision noted that “federal courts have made clear that the protections of the FLSA are available to citizens and undocumented workers alike.”
Such a decision translates into a positive for both the undocumented worker in the state of California, and the state economy in general. That’s because undocumented workers - especially those who work in the agricultural community - make up a significant portion of the state economy.
The Ventura County Star (9/13/15) reports that agriculture is a $2 billion industry in Ventura County. To that end, the Central Coast Alliance United for a Sustainable Economy (CAUSE) reports that an estimated 15,000 undocumented immigrants work the fields in Ventura County alone. Using data from the Census Bureau and Public Policy Institute of California, CAUSE estimates there are more than 72,000 undocumented immigrants in the county, about 9 percent of the population.
That’s a significant number. “To put that into context, that’s more than the population of the city of Camarillo,” said Maricela Morales, executive director of CAUSE, in comments published in the Star. “What if we woke up and the entire population of Camarillo was gone? The impact on our county economically and the social fabric of our community...it would be devastating.”
The issue has relevance given the crosshairs of rhetoric undocumented workers appear to be caught within - especially in the context of the Republican nomination debates, and various positions taken by some of the candidates and one in particular who has pledged to deport all undocumented workers from whence they came. This, in spite of the fact that the FLSA and related agencies in the state of California specifically reference the undocumented worker and affords them protections by way of wage and hour laws that protect all workers in the state of California, even undocumented workers regardless of whether or not they are legally authorized to work in the United States.
The undocumented worker who may feel maligned in the state would no doubt be cheered by a recent settlement in a class-action lawsuit reached with the help of the United Farm Workers (UFW) union, which partnered with table grape workers at Sunview Vineyards. According to Kerry Kennedy, president of Robert F. Kennedy Human Rights who was writing in the Sacramento Bee (9/24/15), the settlement was worth $4.5 million.
Frank Barajas, a history professor at California State University Channel Islands, noted in the Star that “the majority of people working in our fields are undocumented,” he said, adding that mass deportations such as those recently debated amongst the Republican nominees would translate to “a complete collapse of our state economy.”
The takeaway for the undocumented worker: you have rights, both federally and in the state of California. And your presence is important to and adds value to the state economy. Any undocumented worker or group of workers who suspect violations of state wage and hour laws, or other statutes both state-centric and federal under the FLSA, would be encouraged to take advantage of rights and protections afforded you and fight for your due.
$4.9 Million Settlement Approved for California Prevailing Wage Compliance Lawsuit
To that end, a class-action lawsuit filed some time ago by six workers claiming they were not paid prevailing wages and were denied other benefits as required under the California Prevailing Wage Law, has ended with the approval of a multimillion-dollar settlement that will see roughly 533 class members receive about $5,000 each.
The lawsuit, filed in April of 2011, centered on the alleged non-compliance of defendant SimplexGrinnell LP, a division of Tyco International Ltd. Six laborers were hired to install fire alarms and other work for SimplexGrinnell under a public contract - which thus would trigger the need for compliance liability within California Prevailing Wage Law.
However, the plaintiffs claimed in their lawsuit they were not paid per diem wages, overtime or benefits as required under the Prevailing Wage law.
The defendant’s “acts and omissions in this regard are willful and not in good faith, and are without reasonable grounds for believing that the alleged acts and omissions are in compliance with the California Prevailing Wage Law,” the suit said.
The law requires employers with public contracts to pay workers the general prevailing wage rate for the work, as determined by the California Department of Industrial Relations. In addition to regular pay and overtime, the prevailing rate includes health benefits, pensions and vacation.
In early September, US District Judge Jon S. Tigar gave final approval to the settlement, worth $4.9 million. Satisfied that the settlement was “fair, reasonable and adequate,” Judge Tigar noted that the court recognized “the value to class members of defendant’s agreement to change its pay practices and pay prevailing wages for testing and inspection work, with payment retroactive to January 2015,” Judge Tigar wrote, noting no class member objected to the settlement. “This factor favors approval, which offers immediate and certain recovery to class members.”
It’s been reported the two sides in the California Prevailing Wage compliance lawsuit reached a tentative settlement last November. Judge Tigar gave his preliminary blessing in April of this year, before finally signing off on the agreement just last month.
The case is Bennett et al. v. SimplexGrinnell LP, Case No. 3:11-cv-01854, in the US District Court for the Northern District of California.
Uber Appeals Class-Action Ruling
The original lawsuit was filed by three drivers, who alleged that they should be considered employees because Uber controls many aspects of their job. Under labor guidelines, there are certain conditions that must be met for workers to be considered independent contractors. The plaintiffs allege Uber controls everything from what the drivers charge to the circumstances surrounding termination, making them employees. Uber has argued that its drivers prefer to be independent contractors because it allows them flexibility in setting their hours.
The distinction between independent contractor and employee is an important one for workers and employers. True independent contractors have more discretion in their work, but they also do not have job protections including wage and hour protections, overtime or benefits including health insurance. They are also not generally eligible for work expenses, such as the cost of fuel or car maintenance. This makes independent contractors less expensive for employers.
According to The Wall Street Journal (9/15/15), Uber has filed an appeal of Judge Chen’s ruling, arguing that the three drivers named in the lawsuit cannot represent the thousands of other drivers, given the differences in individual circumstances. A ruling on class-action status is not a comment on the merits of a lawsuit but a determination that plaintiffs all have similar questions of fact. The Los Angeles Times (9/2/15) notes Judge Chen found that the drivers have similar enough circumstances, including being held to the same Uber controls.
Uber is not the only company to face such a lawsuit. Lyft, another ride-sharing company, and some home-cleaning companies also face lawsuits alleging their workers are misclassified as independent contractors.
Meanwhile, even employees with protections are filing lawsuits alleging their employers do not follow California employment regulations. A class-action lawsuit has reportedly been filed against Vons in California, alleging employees were not properly paid for overtime, not always given minimum wage and were not given proper breaks. The lawsuit claims time cards were falsified to make it appear employees were given adequate meal and rest breaks. Furthermore, plaintiffs allege they worked up to 12 hours in a day without being paid overtime.
Parking Valets Allege Misclassification As Independent Contractors
Luxe Valet operates in similar fashion to Uber and Lyft. Consumers can contact Luxe parking valets through a mobile app for car parking services. According to the lawsuit, Luxe provides parking valets with specific instructions and directions with regard to interacting with customers and parking their vehicles, effectively controlling and directing the entire process. It’s this micro-managing of the process that has provided the fodder for plaintiffs to take exception to a classification as an independent contractor, when parking valets have so little influence in the process.
There are scripts to follow - or so it is alleged - suggesting what to communicate to customers. Directives are provided as to where and how to enter a parking lot and where to park the vehicles. Processes involved in securing customer’s keys and returning vehicles to the customer are also tightly controlled, or so it is alleged.
Given the foregoing, plaintiffs suggest there are no grounds to classify employees as independent contractors as there is no independence implied or provided. Thus, the correct classification should be employee under California and labor law, together with the benefits that an hourly employee would enjoy as an employee - namely overtime pay, meal breaks and rest periods as mandated under California labor employment law.
There are various instances when employees are exempt from overtime pay and other labor statutes guaranteed under the California labor code including management, for example. Jobs that fulfill a management or supervisory role are normally salaried jobs at a higher rate of compensation, and thus are exempt from overtime. Jobs in the IT industry that command a high-wage grid are also exempt - as are independent contractors, given their non-employee status and their provision of a service to the employer under contractual obligations but with a fair degree of independence and autonomy.
Plaintiffs in the foregoing California labor lawsuit allege there are no such provisions for independence and autonomy and thus, Luxe has erred in classifying parking valets as independent contractors.
The California labor code class action was brought by a former parking valet with Luxe. The lawsuit, Case No. CGC-15-545961, was filed in San Francisco Superior Court and is currently pending.
Former Coach Sues UCSB, Cites Unsafe Work Environment
According to court documents, plaintiff Cathy Neushul was head coach of the UCSB women’s water polo team - known as the Gauchos - for a two-year period spanning 2011 through 2013. The trouble for Neushul began when she noted a funding discrepancy between the women’s and men’s water polo teams at the same facility.
It was noted that a sum of money, identified as $40,000 was allocated in budgetary documents for the women’s team - funds that were going neither to Neushul or her assistant, but instead were going to an individual that was serving as director for both programs.
It is alleged the individual in question spent all of his time and focus with the men’s team, “exclusively [coaching] the men’s team, had very little involvement with the women’s team, never attended a single women’s practice, and was not a presence at their games,” or so the lawsuit claims.
According to the lawsuit, Neushul raised the funding discrepancy with both the Director of Athletics for UCSB as well as the Senior Women’s Administrator on several occasions.
Instead of the matter being resolved, Neushul alleges she was demoted to assistant coach and her salary was cut by $10,000. The school then, or so it is alleged, re-employed the savings combined with the elimination of a part-time assistant coach for the women’s water polo team - for a combined $15,000 - to continue funding an assistant coaching position on the men’s water polo team.
Neushul subsequently resigned from her position and from the university on November 19, 2013. In her California labor lawsuit, Neushul claimed the athletics department at UCSB was no longer “a safe environment,” or so it was alleged.
Neushul claims in her lawsuit that she has suffered humiliation as well as damage to her professional reputation as a coach, as well as loss of compensation and employment-related benefits through her demotion.
Neushul has brought claims for retaliation under Title IX and gender discrimination, as well as for violations of the California Labor Code. The case is Cathy Neushul v. The Regents of the University of California, Case No. 2:15-cv-06286, in the US District Court for the Central District of California.
California ERISA Lawsuit Results in Settlement Exceeding a Half-Million
The total combined award is $630,000. The US Department of Labor (DOL) brought the California ERISA lawsuit after the Feds were apprised of the situation by the trio of whistleblowers, who brought the lawsuit to the DOL and invited the agency to become involved.
According to court documents, whistleblower Cheryle Ann Robbins was employed as a director of the Cement Masons Southern California Trust Funds, working specifically in the audit and collections department. She noted what she viewed to be an irregularity when some employers were allowed to underpay the fund, a violation of ERISA rules. Robbins complained internally. For her trouble, Robbins and two of her associates were eventually terminated from their positions, or so it was alleged by the DOL.
Defendants in the lawsuit included the following individuals who served as trustees for the Cement Masons Southern California Trust Funds: David Allen, Scott Berg, Frank Crouch, Marcos Enriquez, Fitzgerald Jacobs, Bill Lee, Billy Lujan, Jesse Mendez, Larry Nodland, Enrico Prieto, Phil Salerno and Mac Tarrosa as well as Zenith American Solutions, the service provider involved with management of the trust funds. There were 12 trustees in all, with most contributing toward the $630,000 judgment.
Along with Cheryle Ann Robbins, who is to receive $400,000 as part of the settlement, two other individuals who served as whistleblowers and co-plaintiffs in the ERISA lawsuit will receive compensation according to an order signed by US District Judge John A. Kronstadt. Louise Bansmer is to receive $174,000 and Cory Rice will receive $56,000 in compensation.
“There are no good stories about retirement savings crimes, but this case was particularly galling because three people were all punished for doing the right thing,” Assistant Secretary of Labor for Employee Benefits Security Phyllis C. Borzi said in a statement. “Robbins, Rice and Bansmer suffered serious financial consequences because they stood up for what was right. This resolution ensures that they’ll finally get the compensation they deserve.”
The California ERISA lawsuit is Perez v. Brain et al., Case No. 2:14-cv-03911, in the US District Court for the Central District of California.
ULTA Stores Hit with Overtime Pay Class-Action Lawsuit in California
“Because Defendant allocates insufficient staff hours to each store, while simultaneously requiring [store managers] to perform the full gamut of customer service, sales, stocking, and cleaning tasks, Plaintiffs and Class Members are misclassified as exempt because they are forced to spend the majority of their working time performing the same non-managerial tasks being performed by non-exempt employees, such as Cashiers and Stock Associates,” the lawsuit claims.
“As a result, [store managers] work long hours, and often skip their meal and rest breaks, without receiving any overtime compensation or compensation for missed meal and rest breaks.”
Under California and labor law, hourly employees are entitled to overtime pay for any hours worked beyond eight hours in any given day or 40 hours in any given week. However, employees who have achieved a certain salary threshold, or those who are employed in jobs that are classed as management, are exempt from overtime. In other words, if their working day or working week from time to time exceeds the normal maximums, there is no requirement to pay overtime due to the management or supervisory role of the employee, or the salary level earned by that employee.
In many cases, however, employers attempt an end-run around California labor employment law by incorrectly classifying employees as managers or supervisors when, in fact, they primarily perform menial tasks more appropriate for an hourly employee.
The complaint notes that ULTA is a sizeable entity, with a total of 817 stores in 48 states, including 97 locations in the state of California. A Form 10-K filed with the US Securities and Exchange Commission (SEC) notes that ULTA is the largest beauty retailer in the Continental US as a vendor of cosmetics, haircare products, salon styling tools, skincare products, fragrance and nail care products. ULTA is described as also offering in-store salon services at the majority of its locations.
Three former California store managers are serving as the lead plaintiffs in the California labor employment law class action, which seeks to represent all current and former store managers who may have been employed by ULTA from September 9, 2011 through to the present day.
The case is Quinby et al. v. ULTA Salon, Cosmetics & Fragrance, Inc., Case No. 3:15-cv-04099, in the US District Court, Northern District of California.
California Looks to Abolish Forced Arbitration
Arbitration agreements - whether with employees or customers - force a claimant to go through an arbitration process to settle any complaints. In some cases, arbitration can be preferable to a lawsuit. Among the benefits of undergoing arbitration are that arbitration tends to be a quicker and less expensive process than a lawsuit.
Arbitration itself is not necessarily a bad thing, but if the worker signs an agreement to undergo an arbitration process designed and paid for by the employer, the employee has no recourse if the arbitrator - who might be paid for by the employer - finds in favor of the employer. Further, employees might be denied jobs if they refuse to agree to the arbitration.
In other words, some employers might force employees to take part in a complaints system that could be biased in favor of the employer.
Bill AB-465 was recently passed by the California Senate, in a bid to curb this sort of situation. Ultimately, Bill AB-465 - titled “Contracts against public policy” and drafted by Roger Hernandez - would make it illegal for employers to force employees to sign these arbitration agreements.
“This bill would prohibit any person from requiring another person, as a condition of employment, to agree to the waiver of any legal right, penalty, forum, or procedure for any employment law violations,” the preamble to the bill reads. “The bill would prohibit a person from threatening, retaliating against, or discriminating against another person based on a refusal to agree to such waiver, and would provide that any such waiver required from an employee or potential employee as a condition of employment or continued employment is unconscionable, against public policy, and unenforceable.”
Under the bill, any person who waived his or her rights would have to do so voluntarily. Further, the person or organization hoping to enforce such a waiver would have to prove that the waiver was given knowingly and voluntarily. Employees would be able to waive their rights as a condition of employment only if those employees had legal counsel to negotiate the terms of the arbitration agreement.
If AB-465 passes, it would affect agreements dated on or after January 1, 2016.
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