California Labor Law News
California Assembly Bill Protecting Temporary Workers Takes Effect
In September 2014, California Governor Jerry Brown signed Assembly Bill 1897 into law. That bill became effective as of January 1, 2015. The bill is designed to address significant issues in warehousing and other industries that typically outsource their employment to temp agencies and staffing firms. Outsourcing their employment can save companies money on wages - because such arrangements usually result in lower-paying jobs - and the companies can also claim they are not responsible for low pay given to employees.
Employees who are hired by the temp agencies and outsourced then find themselves in a difficult position. Claims for failure to pay minimum wage filed against the staffing agencies often result in a battle between the company that hired the agency and the agency itself. The agency can argue that the larger company had firm control over the wages it offered, while the larger company argues it had no knowledge of the staffing firm’s labor code violations, including low pay. In the meantime, the employee is left without proper pay and terrible working conditions.
“This bill would require a client employer to share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage,” AB 1897 states. Prior to the bill, it was only illegal for a person or company to enter into a contract with a temp agency or staffing firm if the company or person knew that the contract would not provide sufficient funds to ensure employees were properly paid.
What this means for employees is that if they are hired by a staffing agency or temp firm and contracted to another company, and if they are not paid at least the legally mandated minimum wage, they may be able to file a lawsuit not only against the staffing agency that hired them but also against the company they were contracted to. It also means the state can go after larger companies when the staffing agencies they contract employment to violate the law.
Silicon Valley Close to Settlement
Google, Apple, Intel and Adobe have now offered $415 million to settle accusations that they had conspired against their own employees, according to the New York Times (Jan. 14, 2015). This settlement proposal has increased from an earlier offer of $324.5 million, an amount that U.S. District Judge Lucy Koh rejected last August, when she agreed with plaintiff and former Adobe engineer Michael Devine. He protested the amount, arguing that it wasn’t enough money given the wealth of the companies and the scale of their collusion - their “non-poach” agreements. Devine, who is one of five named plaintiffs in the class-action lawsuit, did the math and figured that affected workers would end up with only a few thousand dollars each.
This new settlement amount is still pocket money to the silicon giants, but Devine said it is “at least in the right ballpark.” Pundits say it would be in their better interests to settle rather than go to trial. The latter might tarnish their reputations as forward-thinking and worker-friendly and caring empires.
Of course there is a chance that plaintiffs might lose if it goes to trial. And it’s a big gamble for their lawyers whose share in the settlement could be as much as 25 percent. If they lose at trial, attorneys’ years of hard work goes down the drain. On the other hand, a jury could award the plaintiffs a few billion dollars. Earlier, lawyers estimated that damages were $3 billion, an amount that would be tripled after a guilty verdict, reported Reuters. The case is slated for a trial this spring in San Jose.
This complaint goes back to 2005, when Apple co-founder Steve Jobs asked Google CEO Eric Schmidt to stop poaching Apple workers. In the lawsuit, plaintiffs used the deceased Jobs’ e-mail to Schmidt as evidence that they agreed not to steal each other’s employees by offering them lower wages to discourage them, according to USA Today. And Intel even had a written document regarding a non-poach agreement with Pixar, where Intel’s policy was to not hire any Pixar employee without the Pixar CEO’s approval.
In 2011, after a Justice Department investigation, antitrust complaints were lodged against Google, Apple, Intel, Intuit, Adobe, Pixar and Lucasfilm. All companies paid a combined settlement of $20 million, but one Inuit employee told USA Today that he only received $1,000 - not enough to pay for a vacation in the Caribbean that he had been hoping for. Perhaps this settlement will allow workers to have their days in the sun.
California Overtime Law Class Action Seeks $5 Million
The online enterprise was founded in Seattle almost nine years ago, and since that time has grown its revenue base to $291.9 million over the past four quarters, according to reports. Plans were announced late last year to expand its Seattle headquarters by 113,000 square feet through the addition of five extra floors, in order to meet the demands of what Zillow characterizes as “record growth.”
And yet, some employees allege they are being shortchanged…
Zillow opened an advertising sales office in Irvine two years ago. The office is staffed by sales agents who pitch Zillow “Premier Agent” adverts to real estate agents across the US. The work environment has been described as high-energy and high-pressure - likened to a “boiler room” - with long hours and a workplace atmosphere that is somewhat of a departure from a more traditional workplace environment.
It’s an environment that suits some employees, but not all. Plaintiff Ian Freeman thinks it’s an affront to overtime pay laws in the state.
According to the Orange County Register (11/21/14), Freeman alleges that Zillow systematically pressured hourly employees to commence work early, work late and also toil through their lunch breaks without any additional compensation, or so it is alleged. Former employees of Zillow interviewed by the Orange County Register noted the high-pressure environment, escalating monthly sales quotas and a daily blitz where employees, according to the ex-staffers, were required to stand for hours at a time dialing potential clients without breaks.
“It’s all about squeezing revenue out of the sales force,” said Isaac Cobian, 25, of Costa Mesa, who resigned from Zillow in August after eight months working as an “inside sales consultant.”
It is employees like Cobian that Freeman is thinking about with his overtime pay lawsuit, and why he wants to see it go forward as a class action. The Orange County plaintiff, who worked in Zillow’s Irvine office for two years until this past September, alleges in his California overtime law claim that Zillow used an automated timekeeping system that recorded an employee workday as extending from 8 am to 4 pm, regardless of the actual hours worked.
“Through various memos, meetings and methods of intimidation, Zillow demanded from plaintiffs and class members to begin work prior to the automatically recorded 8 am start time and continue working well beyond the previously recorded 4 pm punch-out time,” the lawsuit said.
The overtime pay putative class action seeks $5 million in damages. The case is Ian Freeman v. Zillow, Inc. et al, Case No. 8:14-cv-01843, filed November 20, 2014 in US District Court for the Central District of California. The lawsuit alleges violations against the Fair Labor Standards Act (FLSA) and California overtime law.
$1.6 Million California Labor Law Settlement Involving Sears Approved
The plaintiffs claimed that the giant retailer failed to pay minimum wage and overtime to Sears employees whose jobs entailed traveling to client homes and undertaking appliance repair, an affront to the California labor code, or so it was alleged. The amended settlement, approved by US District Judge Cormac J. Carney, is worth $1.6 million.
Lead plaintiff Nikola Lovig filed the lawsuit in April 2011. An employee of Sears for a period of one year prior to filing his California labor lawsuit, Lovig was amongst Sears technicians who traveled to, from and between the homes of customers to undertake repairs to various Sears appliances and products. The employees would use company vans that were tricked out with the various parts and tools required to affect the repairs, as needed.
In his California and labor law action, filed at US District Court for the Central District of California, Lovig accused Sears of failing to pay minimum wage and overtime, withholding payment for paid vacation days after employees quit, and failing to provide adequate meal and rest breaks in violation of the California Labor Code and California Business & Professions Code. Lovig also held Sears’ feet to the fire for its alleged failure to reimburse employees for expenses. He also accused Sears of issuing incomplete wage statements.
Judge Carney initially rejected the settlement, indicating that in his view the release terms were overly broad. However, less than a month after rejecting the initial settlement, Carney granted preliminary approval to an amended settlement, noting that in his view the settlement was fair.
“Having reviewed the negotiation process and substantive terms of the settlement agreement, the court finds no obvious deficiencies or grounds to doubt its fairness,” the order noted. Judge Carney found that the previous settlement agreement had issues pertaining to the release of claims beyond the scope of the allegations of the operative, fourth amended complaint to include claims from other iterations of the original complaint.
The amended terms of the settlement are said to have satisfied the judge’s concerns.
According to the terms of the settlement, mobile services technicians working for Sears from April 8, 2007 forward are to receive about $1.1 million based upon a typical class member’s weeks of employment within the aforementioned window. Lead plaintiff Lovig may receive as much as $10,000 as an incentive award in the California labor employment law settlement.
The California labor lawsuit is Lovig v. Sears Roebuck & Co., Case No. 5:11-cv-00756, in the US District Court for the Central District of California.
California Labor Lawsuit Filed by Workers at Port of Los Angeles
Los Angeles Files California Overtime Lawsuit
According to the city attorney’s news release, Mackone Development Inc. - the primary contractor - and subcontractors Pak’s Cabinet, Lectrfy, Southern California Steel, KCC General Construction, King Wire Partitions, Inc., Nader Construction and their operators are all named as defendants in the lawsuit. Feuer alleges the defendants not only stole more than $250,000 in wages from employees, but also harassed and intimidated employees to cover up the illegal activities.
In 2009, Mackone Development received the $9.5 million contract to build the South Los Angeles Animal Care Center facility. Construction took place from 2010-2013 and employee wages were governed by prevailing wage laws. Among the alleged violations included in the lawsuit were Pak’s Cabinet paying employees as little as $8 an hour when prevailing wage rules required payment of $49 per hour; KCC General Construction paying some employees as little as $5 an hour when prevailing wage law required $45 per hour; Lectrfy, Inc., not paying prevailing wage or most overtime and paying employees for fewer hours than they worked; and Mackone Development not paying prevailing wages for all hours worked.
“The Defendants named in this complaint are, individually and collectively, liable for stealing wages from the workers they employed and promised to pay for their work on this City project, and for covering up of this theft,” the complaint states. “The impact on the workers was significant; not only were they and their families severely damaged financially, but many were subject to overt harassment and intimidation as part of the Defendants’ efforts to conceal their illegal schemes.”
The lawsuit seeks restitution to all employees and civil penalties of up to $2,500 per violation.
A spokesperson for Mackone said the city attorney’s allegations are false and irresponsible and argued that the city agreed in writing that Mackone was not responsible for the other companies’ failure to pay prevailing wages, according to the Los Angeles Times (11/13/14).
When Feuer announced the charges against the companies, he also announced a wage theft hotline to encourage employees to report incidents of wage theft.
Jury Awards $186 Million in California Labor Lawsuit
The $186 million award was given by a jury to a former female employee of AutoZone. The employee alleged she was discriminated against because of her gender, demoted after her employers discovered she was pregnant, and later fired. According to The Wall Street Journal (11/19/14), Rosario Juarez was awarded more than $800,000 in compensatory damages, and $185 million for punitive damages.
AutoZone said it would fight the award. Juarez alleged she was demoted in 2006 and filed a lawsuit for sexual discrimination. She was later fired in 2008. AutoZone argued Juarez was fired after $400 in cash went missing from a register. A jury disagreed with AutoZone and found the firing an act of retaliation for Juarez’s complaints about sexual discrimination.
Meanwhile, Los Angeles City Attorney Mike Feuer announced a lawsuit against Makone Development and five subcontractors, alleging violations of wage and overtime laws including prevailing wage rules. According to a press release from the city attorney, the violations were related to construction of the South Los Angeles Animal Care Center facility. Among the allegations are that one subcontractor, Pak’s Cabinet, was required to pay a prevailing wage rate of $49 per hour, but paid workers as low as $8 an hour. The lawsuit also alleges that KCC General Construction was required to pay the prevailing wage of $45 an hour but paid some employees a lump some that equaled $5 an hour.
“The impact on workers was significant; not only were they and their families severely damaged financially, but many were subject to overt harassment and intimidation as part of the Defendants’ efforts to conceal their illegal schemes,” the lawsuit states.
The city attorney alleges that hundreds of thousands of dollars in proper wages and overtime was not paid to employees. The lawsuit seeks restitution to the employees and civil penalties of up to $2,500 per violation.
The AutoZone lawsuit is Juarez v. AutoZone Stores, Inc., case number 08 CV 0417, in the U.S. District Court for the Southern District of California.
Temp Worker Takes on Former Employer in Proposed Class Action
Allegations of inaccurate wage statements made by plaintiff Tamara L. Bengel could affect upwards of 1,000 potential class members, according to her California labor code action filed earlier this month in California Superior Court.
The defendant, Career Strategies Temporary Inc. (CST), is based in Burbank but maintains satellite offices in seven states, including California. CST provides direct-hire and temporary staffing services to businesses and corporations.
Bengel alleges in her California labor lawsuit that she was paid weekly by CST for work she was assigned as a temporary worker. The issue she has with her wage statements is that her weekly pay stubs did not specify inclusive pay period dates, in violation of the California labor code.
The lack of inclusive pay period dates makes it impossible for employees going forward to accurately track pay stubs against calendar dates when work was performed.
Bengel, it has been reported, has taken two pathways to justice with her allegations. The first is a reporting of her allegations to the California Labor and Workforce Development Agency, which Bengel is described as undertaking about six weeks before filing her California and labor law action.
The plaintiff also seeks to represent at least 1,000 other workers employed by CST in the state of California from a period beginning November 1, 2013 to the present day. She seeks civil penalties under the Private Attorneys General Act (PAGA) of California. Bengel’s suit seeks statutory penalties and attorneys’ fees and costs. If an employer knowingly and intentionally fails to accurately itemize a wage statement, an employee can recover the greater of actual damages or statutory fines of $50 for the first violation and $100 for each subsequent violation up to $4,000, according to the suit.
“Plaintiff and each class member suffered and suffer injuries as a result of the missing pay period because a reasonable person could not promptly and easily determine the pay period from the wage statement alone without reference to other documents or information,” the complaint says.
In her California labor employment law proposed class action, Bengel also suggests that her complaint could be amended to include other defendants, provided there is sufficient cause to believe that other parties may have been participating with CST in violating California labor law.
The case is Bengel v. Career Strategies Temporary Inc., case number BC565227, in the Superior Court of the State of California, County of Los Angeles.
Bad Apple in California Labor Pool
The California labor lawsuit was originally filed back in 2011 by several former employees at the Cupertino Apple store, who alleged that Apple did not provide “timely” rest brakes, meal breaks and final paychecks. It was certified as a class action in July, and at the end of November, Apple’s appeal to dismiss the suit was dismissed.
“The petition for writ of mandate, informal response, and reply have been read and considered by Justices Nares, McDonald, and O’Rourke. The petition is denied,” stated a filing from the Superior Court of Appeal in San Diego, according to PCMag (Dec. 5).
This isn’t the first time Apple has been accused of violating the California labor code. Last year a wage and hour class-action suit claimed that Apple store staff are not paid for the time they spend undergoing bag searches, as required by the company’s policy. The plaintiffs claimed they had to wait in lines every day, sometimes up to 30 minutes, so that store managers could check their bags to ensure they weren’t stealing.
And back in 2009, former Genius Bar employee Steve Camuti filed a California labor lawsuit claiming that Apple failed to provide employees with breaks. The Camuti lawsuit was not certified as a class action. According to San Diego attorney Tyler Belong, that could have been due to its timing. Belong told PCMag that a California Superior Court ruling in a landmark case involving restaurant workers and rest breaks, made after the Camuti suit, “opened the door” for class actions like this latest class. The Camuti lawsuit alleged that California overtime was due to employees from 2004 onwards. It claimed that Apple “has enjoyed an advantage over its competition and imposes a resultant disadvantage on its ‘Genius’ employees by failing to authorize, permit, and provide statutorily mandated rest breaks as required by law.”
An ex parte hearing was slated for December 9, and a civil hearing set for April 2015, according to appleinsider. Plaintiffs’ attorneys are seeking damages and restitution of all monies due to plaintiffs from unlawful business practices as pursuant to 10 California Labor Code sections. The case is Felczer et al vs Apple Inc., case number 37-2011-00102593-CU-OE-CTL, in the Superior Court of California, County of San Diego.
Sprint California Lawsuit Alleges Workers Not Paid Properly
According to court documents filed in the lawsuit - Guilbaud et al v. Sprint Nextel Corp, case number CV 13 4357 - the lawsuit was filed in September 2013 by hourly employees at Sprint retail stores, selling Sprint’s products and services.
“Defendants have deprived Plaintiffs and the other Sprint Employees of wages by not paying the Sprint employees for all hours worked and not paying them premium wages for overtime hours worked,” court documents state. The plaintiffs allege that the work they do prior to clocking in means they regularly work more than 40 hours in a week or eight hours in a day but are not paid overtime for that additional time.
Furthermore, the lawsuit alleges, “Sprint intentionally and willfully failed to pay the minimum statutory overtime wages owed to Plaintiff and the other class members due to a miscalculation of the ‘regular rate.’” Plaintiffs also claim that they were not provided with an itemized statement of their wages.
One of the highly contested areas of labor law is that of activities that are not paid by an employer but considered necessary to performing a job. In some industries, this includes the putting on and taking off of uniforms or protective gear. In other industries - such as theme parks - this involves workers walking to and from their vehicles in full uniform and answering all questions from park guests, even though this occurs either before the employee has clocked in or after he or she has clocked out from the shift.
In still other industries, such as call centers, employees might be required to log on to or off of complicated databases and computer or phone systems at the start or end of their shift, sometimes without being paid for the time spent in those activities. Meanwhile, retail and other employees allege that they should be paid for time spent waiting after a shift for security checks, designed to prevent employee theft.
The time spent in such activities can add up for workers. Even 10 minutes before or after a shift can add up over the course of a year and can, if that work is done above an eight-hour day or 40-hour week, mean missed overtime.
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