California Labor Law News
Another Million-Dollar Bust Under California Labor Law
Beyond having a proactive labor commissioner dedicated to advocating on behalf of workers, in many instances a California labor lawsuit is the only recourse workers have to fight unfair treatment.
According to a release by US State News (12/17/12), FTR International Inc. was found to have failed to pay their workers the correct prevailing wages according to California and labor law guidelines. The Office of the California Labor Commissioner also accused the firm of failing to pay its employees daily overtime, and failure to pay premium rates for work performed during weekends, in addition to other violations.
FTR International, according to the statement, was hired by the Southern California Regional Rail Authority to undertake the Los Angeles Union Station 'Platform 7' project. The firm does business as a general contractor, and was ordered to pay $401,041 in back wages and $185,725 in fines with regard to its affront to California labor employment law.
A similar story unfolds with Wirtz Quality Installations Inc. (Wirtz), a stone and tile contractor that was cited by the Labor Commissioner for failure to pay proper wages to 55 workers toiling on behalf of the general contractor on a construction project for Palomar Pomerado Health Systems.
In the Wirtz case, the contractor was found to have charged workers a percentage of their wages in various fees for payments made into a fringe benefit plan for supplemental unemployment insurance. The charge translated into what was deemed a significant underpayment of prevailing wages according to legislative guidelines governing California prevailing wage. According to an investigation by the Division of Labor Standards Enforcement (DLSE), Wirtz was also found to have failed to pay their workers appropriate overtime wages.
The Labor Commissioner for the state of California, Julie A. Su, stated in a news release that wage theft in any form would not be tolerated under her watch.
"Construction workers work long hours and perform invaluable work building the infrastructure in our communities," Commissioner Su said in a statement. "My office is here to ensure that all public works contractors pay fringe benefit packages as required by law. Charging fees for these benefits is an unlawful end-run around prevailing wage laws."
Wirtz was ordered to pay $102,292.47 in back wages and $402,450 in fines to answer for violations against the California prevailing wage law.
As for FTR International, Su had this to say about the contractor's violation against California employee labor law: "The action against FTR should serve as a warning to other contractors who fail to abide by our laws," said Commissioner Su. "These enforcement actions are also a message to law-abiding contractors that we are here to help you by going after the scofflaws."
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Disney Worker Launches California Labor Lawsuit Alleging Religious Discrimination
The wearing of a hijab is an important aspect of the Muslim faith. Disney, which operates the iconic theme park in the state (as well as Disney World in Florida), is known for its attention to detail. That detail encompasses the dress and deportment of all its employees in an effort to complete the look and feel that becomes the Disney experience.
One can well imagine the conflict that could--and did--ensue for Boudlal.
According to the Huffington Post (8/13/12), Boudlal managed to land a part-time job two weeks after moving to California in 2008. While she did not wear her hijab, or headscarf initially, Boudlal realized while studying to become a US citizen that the US constitution provided freedoms for expressions of religious faith.
That freedom will now be entrenched in California labor code as of next month, but it was not in 2010 when??"having worked at the Storyteller hotel restaurant for over two years??"she finally approached her employers to seek their permission to wear her hijab in the workplace.
Following a two-month wait, Boudlal was finally given permission to wear a headscarf, but only one designed and approved by Disney. Eventually fitted with a scarf that encompassed the look and feel of Disneyland, Boudlal was not provided with a date as to when she could begin wearing the customized scarf. She was also told, according to the report, that she would not be allowed to wear her own hijab over the interim.
With the onset of Ramadan, and in the absence of further word from Disney, Boudlal went ahead and wore her hijab to her job. That's when the trouble started. At the time there was nothing in California labor law to protect her.
In her California labor lawsuit, Boudlal said that in August 2010, when she began wearing her hijab for work, she alleges to have been told by Disney to either remove the hijab, or work "backstage" where she would not be seen by patrons. On seven separate occasions Boudlal was allegedly sent home without pay for wearing her hijab to work.
Disney's eventual solution was to offer Boudlal a substitute headdress that Boudlal found unacceptable. In an interview with KTLA Los Angeles, Boudlal is reported to have said: "The hat makes a joke of me and my religion, and draws even more attention to me. It's unacceptable. They don't want me to look Muslim." Boudlal was soon suspended from her job at Disney.
Boudlal is reported to have filed a complaint with the US Equal Employment Opportunity Commission in 2010 and finally received a notice of her right to sue in August of this year. After getting the go-ahead from the feds, Boudlal filed her California labor lawsuit later that month.
The new California labor law allows more protections against such discrimination allegedly suffered by Boudlal. AB 1964 clarifies that religious dress and grooming practices are covered by existing and updated protections against religious discrimination.
According to the new California labor employment law that comes into effect next month, employers are required to reasonably accommodate employees observing the traditions of their respective religions, including dress.
That said, the new California employee labor law specifically notes that segregating an employee is not interpreted as a reasonable accommodation.
California Labor Law and Pregnancy Complications
“I’ve heard stories about companies firing their employees because they say women put their children first and think we can’t do business at the same time,” says Katherine, “but I never thought it would happen to me." Katherine was fired by her employer, Bank of America, when she came back to work from mat leave.
“I was a banking center manager and the bank first demoted me to a banker, which meant a drop in salary of about $7,000 per year,” explains Katherine. “They didn’t give me a reason; they just said I was needed more in this area.” But Katherine believes they had a reason.
“Everyone says women are treated equal to men but the reality is we are not,” says Katherine. “Once I had a manager tell me that women prefer to work part time instead of full time because we prefer to stay at home. Well I disagree. We already do it all??"have babies and work full-time. And we do it well.”
Katherine had worked at the bank five years before she was told that she had 30 days to find a job anywhere else in the bank or she would be let go. “They didn’t give me a reason for that either,” she adds. “I had a high risk pregnancy and was out for almost a year. As soon as I found out I was pregnant I couldn’t go back to work. Then I had my normal mat leave of three months.
"I talked to HR; they had nothing in their records to back up these actions, no write ups, no negative reports. They just said there was no reason that I should be suffering these consequences. When I was first demoted I didn’t do anything about it: I figured the bank must know what it was doing. The second time I figured they were violating the California labor code and discriminating against me, because I was coming back from mat leave. But I know that pregnancy discrimination is against the California labor code.
"I was able to collect unemployment but it is ending December 23rd. And I have two young kids looking forward to their Christmas presents."
Jessica, 19 years old, is three months pregnant. She has worked at Subway for 18 months and during that time, she trained to become a supervisor.
“Ever since I told my boss that I was pregnant, he has cut my hours to where I can't pay my bills,” says Jessica. “And he said, 'I don't want you to become supervisor until after you have your baby because I don't want your hormones getting in the way’. I couldn’t believe it. Even though I am 19, I am very responsible and I have all the skills of a supervisor.
"When I confronted my boss, he said, ‘Down the road (meaning after I have my baby), if we think you can handle it, we will reconsider.’ Right now they are trying to train the new hires to be supervisor. And for the past few weeks I have worked just one day per week, and not even 8 hours, just 4 hours. Before I told them I was pregnant, I was working 8 hour shifts, 4-5 days per week. I had morning sickness and I think that is one reason why they cut my hours. But I feel fine now and I was hoping they could work a bit with me. Instead they figured I couldn’t handle my job.
"I think they are smart enough to know they can’t fire me because that would be discrimination so they are trying to get me to quit. They know I have to pay rent and bills. I have been on their case asking for more hours but they keep saying that I have to prove myself.”
Jessica says she has lost the motivation to work at Subway, but she doesn’t want to give them the satisfaction of quitting. She has never had any negative write-ups so there is no reason to fire her, other than the fact that she is pregnant. Her employer knows that the California labor law protects pregnant women. And now businesses must be ready to meet the challenges of implementing this new breast-feeding discrimination law.
Although the California Labor Code already requires employers to provide accommodations for women who are breast-feeding, this new law goes a step further by providing additional recourse for women who have encountered breast-feeding discrimination. According to the Society for Human Resource Management, employers should first consider updating their employee handbooks or implementing a breast-feeding policy. Second, employers should take seriously any complaints from employees relating to breast-feeding and should treat these complaints with the same seriousness as they would a complaint based on race or age discrimination.
“Subway has never said anything about my pregnancy on paper??"I guess they know that pregnancy discrimination is illegal."
New California Labor Law Will Aid Breastfeeding Employees
For breastfeeding mothers as well as pediatric health advocates, AB 2386 is good news. But it also signals those in the legal community to be on the alert for potential plaintiffs when employers who prove unaware, or insensitive to the new law discriminate against their breastfeeding employees, in an affront to California labor code.
Breastfeeding continues to see a resurgence in tandem with the widely held belief that a mother's milk remains, ultimately, the best nourishment for an infant. The practice, however, requires letting go of the convenience that comes with formula and either finding a place to latch when duty calls, or a discrete location to express for a lactating mother when her infant is not with her.
Under California labor employment law, there are already provisions in place for breastfeeding mothers. Employers are required to accommodate their employees who are also nursing mothers, by providing them with a discreet location to express or breastfeed, together with the appropriate break time to accomplish the task.
Beyond California and labor law, the new federal health reforms also require employers to accommodate their nursing employees in kind.
What there hasn't been, say those in the legal community, is sufficient recourse for breastfeeding mothers who are discriminated against because of their decision to breastfeed. An example of this was a labor lawsuit filed in US Court for the Southern District of Texas. In Equal Employment Opportunity Commission v. Houston Funding II, the Court ruled that the plaintiff's loss of her job allegedly due to her breastfeeding or lactation was not sex discrimination.
The most recent change to California labor employment law, which takes effect in January, addresses that concern.
AB 2386 effectively amends the statutory definition of sex under the California Fair Employment and Housing Act in an effort to prevent discrimination against a breastfeeding mother in the workplace under California employee labor law. While employers are obligated to continue the practice of accommodating breastfeeding women as they have, the updated statute deepens the importance of employers not to be seen as discriminating against a breastfeeding employee in any way.
Under California state labor laws, as of January 1, 2013 nursing mothers have new protections. Any employer seen as discriminating against a breastfeeding employee may well be closer to a California labor lawsuit with AB 2386 in place.
ERISA Not Just About Protecting Investments
employee stock plans, the truth is that ERISA covers much more than retirement plans. Included in ERISA benefits are insurance provided through an employer, meaning that any claims about employer-provided insurance are covered by ERISA.
Covered by the Employee Retirement Income Security Act of 1974 (ERISA) are retirement, health, life insurance, and disability insurance plans. Covering only private employers, ERISA does not require employers to provide health insurance or other benefits plans; it simply sets out rules for when employers choose to offer such benefits. If employers choose not to offer benefits as covered by ERISA, they are not governed by ERISA rules. Furthermore, ERISA does not cover insurance policies that are purchased privately. It only covers those provided by an employer.
Under ERISA, those in charge of health plans and other benefits must provide information about the plan's funding and features, must abide by their fiduciary responsibilities and must provide an appeals process for people who have a grievance with their plans. Finally, ERISA gives participants the right to sue plan fiduciaries in cases where there is a breach of fiduciary duty.
Before a lawsuit can be filed, however, under ERISA the claimant must exhaust administrative remedies before filing a lawsuit. This means that if the insurance company has an internal appeals process, the claimant must file an appeal before filing a lawsuit, if the insurance policy in question is provided by the employer (private insurance, because it is not covered by ERISA, does not have such a requirement and a lawsuit can be filed once the first denial is received.)
Many insurance companies have rules for filing appeals, including a set time in which to file. Certain medical records and an appeal letter may also be required. If that appeal is then denied, a lawsuit can be filed to enforce the claimant's rights. A plan beneficiary or participant can file the lawsuit, depending on the circumstances, and the lawsuit is typically filed against the plan fiduciary or administrator.
It is important to note that under ERISA a claimant will not be awarded punitive damages; all that can be claimed are costs associated with the insurance policy.
California Sub-contractor to Pay Over $1 Million for California Labor Law Violations
According to a statement released by the California Department of Industrial Relations (DIR 11/6/12), Nicodemus Plumbing and Mechanical has been mandated to pay $858,840.20 in back wages to 44 employees who worked for Nicodemus on a public works project at Stockton's San Joaquin Community College. The California labor lawsuit, brought by the Office of the Labor Commissioner, accused Nicodemus of falsifying certified payroll records.
The California labor code investigation by the DIR's Division of Labor Standards Enforcement (DLSE), also known as the Labor Commissioner's office, revealed that Nicodemus shaved the number of actual hours worked by the 44 identified workers, and thus failed to pay proper wages under California prevailing wage law.
Taisei Construction Corporation served as the primary contractor for the facility. Taisei, in turn, hired Nicodemus to undertake the plumbing work. According to state labor laws, even though the misdeeds were carried out by Nicodemus, Taisei as the primary contractor can be held jointly responsible for the California employee labor law violations committed by Nicodemus. Taisei, in fact, was served with a penalty by the Labor Commissioner, although the amount was not identified.
"Prime contractors can be held jointly responsible when their subcontractors fail to follow California's labor law," said California Labor Commissioner Julie A. Su. "We will investigate all parties responsible for labor law violations to put the proper incentive on decision-makers in construction projects to deal only with honest, law-abiding contractors."
Su likens the actions of Nicodemus to wage theft, and vows vigilance is necessary in a soft economy when employers skirting around state labor laws make it harder for legitimate companies, with equally deserving employees, to compete for work.
"Wage theft will not be tolerated," said Commissioner Su. "Falsifying records to underreport the number of hours worked is stealing money from workers and my office will take swift and aggressive action to end this illegal and abusive practice."
DIR Director Christine Baker echoed some of those sentiments in her own comments. "It is imperative in these times that enforcement action is taken to fight against California's underground economy and provide a fair and level playing field for businesses who comply with our laws."
Nicodemus was also assessed a total of $230,050 in fines for violation to the California prevailing wage and other violations to the California labor code.
The investigation determined that Nicodemus also failed to pay overtime, in accordance with California labor law.
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Wage Theft not Tolerated, Says California Labor Commissioner
The Cypress-based Nicodemus Plumbing & Mechanical contractor was ordered to pay 44 employees $858,840.20 in wages and $230,050 in fines for California labor code violations, including overtime violations. California Labor Commissioner Julie Su issued the assessment in an attempt to collect monies from the contractor owed to the workers.
According to the California Department of Industrial Relations' (DIR) Division of Labor Standards Enforcement (DLSE), also known as the California Labor Commissioner's office, the plumbing contractor failed to pay overtime and intentionally falsified certified payroll records by shaving the number of hours actually worked by its workers. Evidence by the California state labor law agencies revealed that Nicodemus Plumbing falsified records to underreport the number of hours worked??"violations of the California prevailing wage law.
Commissioner Su said that wage theft will not be tolerated, and that the contractor basically stole money from workers by falsifying records.
The workers performed plumbing work for San Joaquin Delta Community College??"the college hired Taisei Construction Corporation as the general contractor who then contracted Nicodemus Plumbing. The construction company was also served with a civil wage and penalty assessment.
The California Professional Association of Specialty Contractors (CALPASC) applauded the enforcement agencies on their assessment of willfully non-compliant contractors (some contractors are unintentionally non-compliant). Bruce Wick, CALPASC Director of Risk Management, said that some awarding authorities and general contractors continue to seek the lowest bid, regardless of whether those bids are in compliance. And in this case, at the expense of 44 workers.
“By investigating the source of the problem and publicly identifying those involved, as the Labor Commissioner's office has done, legitimate contractors will have a better chance at competing within this challenging economy,” Wick said.
A spokesperson for the Plumbing-Heating-Cooling Contractors Association of California (PHCCA) issued a similar statement, praising the Labor Commissioner’s investigation and condemning the contractors. "Everyone loses when state contractor laws are ignored," said Tracy Threlfall, PHCCA Executive Vice President. “Legitimate contractors are driven out of business, employee and public safety go at risk, the quality of the product suffers and workers are short paid and may not be covered by workers' compensation insurance, while California loses millions in taxes. Shining a spotlight on the problem and the culprits may incentivize contractors to act within the law.”
According to The Sacramento Bee (11/6/12), the Commissioner said that "prime contractors can be held jointly responsible when their subcontractors fail to follow California's labor law.” Further, the California Labor Commissioner’s office stated that it will “investigate all parties responsible for labor law violations to put the proper incentive on decision-makers in construction projects to deal only with honest, law-abiding contractors."
The California Department of Industrial Relations' Division of Labor Standards Enforcement adjudicates wage claims, investigates discrimination and public works complaints and enforces state labor law.
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California Labor Lawsuits Allege Failure to Pay Minimum Wage, Discrimination
One California labor lawsuit was filed by the EEOC against a security services company, alleging discrimination after a woman was denied her job when she tried to return from maternity leave. The employee reportedly worked at the company for a year prior to her maternity leave but was told there was no job for her when she tried to return. The company allegedly told the employee they would contact her if a position opened up, but failed to do so even though the company hired men as security guards just after the employee attempted to return to her employment.
The lawsuit was filed in the US District Court for the Eastern District of California and alleges the security company violated Title VII of the 1964 Civil Rights Act.
Meanwhile, a farm contractor reportedly faces a million dollar California labor lawsuit alleging the contractor violated California labor law by failing to pay minimum wage and overtime to workers. According to California Labor Commissioner Julie A. Su, the defendant, Salvador Zavala Chavez dba Zavala Farms, did not pay minimum wage or overtime to approximately 150 employees over 10 locations from April 1, 2009 to April 1, 2012. Workers allegedly picked lettuce and worked in grape fields for 10-hour workdays without being properly paid for their time.
The lawsuit was filed after an investigation was conducted by the California Department of Industrial Relations' Division of Labor Standards Enforcement. The investigation reportedly found evidence that Zavala Farms acted willfully in violating the California labor law. The lawsuit seeks $1.26 million in unpaid wages, overtime and penalties.
And Hollywood interns have filed a lawsuit of their own against Fox Searchlight and other employers, alleging they should have been paid for their work for Hollywood studios. Although interns have long been accepted as standard practice in Hollywood, interns at for-profit employers should be paid for their work. The lawsuit seeks class action status on behalf of other interns who were not paid for their time working for Hollywood studios.
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$1.6 Million California Labor Lawsuit Launched Against Farm Labor Contractor
The suspected violations to California labor code allegedly committed by Zavala Farms include failure to provide wages approaching minimum wage levels and failure to pay overtime.
Zavala Farms is a farm labor contractor based on Greenfield. The California Department of Industrial Relations' (DIR) Division of Labor Standards Enforcement launched an investigation based on a complaint to the office of the Labor Commissioner.
The resulting investigation reportedly uncovered numerous violations to California and labor law spanning a period of three years from April 1, 2009 through April 1, 2012.
The allegations are that Zavala Farms failed to pay proper wages, or overtime when workers exceeded a standard 40-hour workweek or 8-hour day, in direct violation of California labor employment law.
State employment guidelines serve as a template of minimum standards for employers to maintain with their respective workforce. Of course, employers have the right to pay their workers at a higher rate than minimum wage??"a rate that would also serve to increase overtime premiums. Nonetheless, workers in California have a right to a basic basket of minimums pertaining to rates of pay, overtime and working conditions.
When such conditions are not met, the activity serves as a contravention to labor code. Employers can be fined, charged or sued. In this case, California State Labor Commissioner Julie A. Su chose to launch a California labor lawsuit against the alleged perpetrator.
"These workers picked lettuce and worked in grape fields over ten hours a day without receiving overtime pay," said Labor Commissioner Su. "This lawsuit is but one example of our commitment to conducting in-depth, meaningful inspections to get the wages earned into workers' pockets. When workers come forward, as these farm workers have done, to tell us about illegal working conditions, we will take action to protect them."
The lawsuit, noted Su, also serves to protect those employers who 'do it by the book,' only to be penalized by competitors who can undercut bids to get work, through shortchanging their workers to keep costs down. The practice only hurts law-abiding employers who respect and adhere to California prevailing wage law.
Christine Baker, Director of DIR, noted in the press release that the lawsuit "demonstrates the Labor Commissioner's commitment to ensuring that all workers in this state are protected by the wage floor. Whether it is in agriculture or any other industry where wage violations occur, we will enforce California employee labor law."
The California labor lawsuit seeks $1.6 million in unpaid wages overtime and penalties for the affected workers. The action was filed in Monterey County Superior Court.
LoJack Corp. Agrees to $8.1 Million Settlement in California Labor Law Class Actions
The actions, which have been contested since 2006, alleged LoJack violated labor laws in the state, as well as various tenets of California labor code pertaining to commute time, meal breaks and rest periods, according to the Boston Business Journal (10/18/12).
Law 360 noted that plaintiffs alleged they were required to repair company vehicles while they were on shift, incurring various costs in the process.
California labor employment law reflects strict guidelines governing how and when employees should be paid, and for what. While there are various exemptions for overtime and other issues relating to a particular job classification, there has nonetheless been various examples of discord pitting employee against employer over exemptions, expenses, meal breaks and rest periods which remain entrenched in California and labor law.
The proposed settlement??"which still requires court approval??"is valued at $8.1 million. President and CEO of LoJack Randy L. Oritz noted in a statement appearing in various publications that while LoJack held it had "substantial legal and factual defenses to the plaintiff's claims," in the end LoJack's leadership team and Board of Directors decided, ultimately, that entering into a settlement was in the best interests of the company.
"These legal claims were originally filed in 2006, and plaintiffs asserted claims reaching back to 2002," Ortiz said. "Since then the cases have involved a significant amount of time and expense on pleadings, motions, depositions, and discovery in various state and federal courts. The cases have also required us to look at employment practices of the distant past rather than focus entirely on our present and continuing commitment to the welfare of our employees, the success of our dealer partners and licensees and the strength of our brand."
LoJack is identified as a manufacturer of vehicle-tracking systems. The settlement, putting to bed the twin California labor lawsuits and assuming approval by a judge with the California Superior Court, is widely expected to take care of applicable legal fees incurred by the plaintiffs.
The settlement decision related to the California labor law case isn't expected until the New Year. According to the Boston Business Journal, LoJack expects to record a one-time charge of $6.9 million for their third quarter (Q3) that ended September 30th. Even though $8.1 million was the agreed amount, LoJack may get away with paying less depending upon the final number of class participants.
Had the defendant continued with the two California employee labor law class actions, LoJack estimates it could have cost the company upwards of $30 million. By settling, LoJack not only cuts its potential losses substantially, it also is not required to admit to having done anything wrong…
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