California Labor Law News
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“Off-the-Clock California Overtime Lawsuits on the Rise", says Employment Law Attorney
Employees are usually working “off-the-clock” when an employer forces or pressures workers to work outside of hours that are not clocked in. “Employers are facing pressures to keep the bottom line and expenses down,” says Yeremian. “An obvious solution is to not pay their employees California overtime and/or under-report hours they are working.”
Yeremian sees many off-the-clock claims from the construction industry, where workers don’t have traditional time clocks: either they self-report hours on written time sheets or their supervisors write up a 9 to 5 day. But in reality they could be starting work hours earlier, and leaving later.
“We also see this California overtime violation in the retail industry,” adds Yeremian. “Employees are clocking out and subject to security checks, so they are locked into the store, or wherever they happen to be working.”
One example of this California labor law violation and subsequent California overtime lawsuit involved Costco employees who were held hostage- they were locked in the store after clocking out while management performed closing duties. Because Costco violated the United States Fair Labor Standards Act, a federal judge in California ruled the the Costco employees’ overtime lawsuit could proceed as a state class action in California and a conditional collective action nationwide.
Yeremian says the rise in off-the-clock overtime claims is that the enforcement of labor laws has increased with the prevalence of class action lawsuits. “Workers are increasingly more aware of their rights and employers have been sued for one labor violation or another in the past, but employers still think they can get away with it,” he explains. “And there are simply forces of human nature: Managers have a lot of pressure by upper management and owners to keep costs--especially labor costs--down. That translates to under-reporting and off-the-clock work.
“These overtime violations are typically happening with hourly and minimum-wage workers who are less apt to know their rights and are taken unfair advantage of. And they are less apt to enforce their own rights, particularly in an economy that recently had a downturn. Employees are simply afraid to speak up for fear of losing the only job they have, and there aren’t too many job vacancies right now.”
Be Pro-Active with Off-the-Clock Overtime Claim
If you are thinking about filing an off-the-clock overtime claim, Yeremian advises the following:
1. Keep track of your hours. Write them down in a journal, a calendar, a diary, anything. You have the right to report this uncompensated time to your supervisor and the law protects you. You are protected even though you may be incorrect regarding how you are supposed to be paid. As long as you have a good faith belief that a violation occurred and are terminated, demoted or suspended for reporting such a violation you may have a claim for wrongful termination or retaliation against your employer.
2. Report off-the-clock hours to you supervisor, HR, company owner (if you work for a small company), the California labor board (free of charge), and a California employment attorney. The vast majority of wage and hour lawyers will provide a free consultation over the phone and if they agree to represent you in a case, they will do so on a contingency basis??"meaning you don’t have to pay out of your pocket.
3. Talk to your co-workers and see if they are having similar problems. When one worker is suffering from these types of wage violations, typically other workers are in the same boat.
If you bring a class action lawsuit to obtain proper compensation for these violations, you can obtain compensation on behalf of yourself and everyone else who has suffered the same violation. Furthermore, if you bring the class action, you may be awarded an additional sum from the court due to bringing the case forward.
If you have been terminated or demoted from work, you may have a claim of retaliation against the employer. Through that claim you may be able to recover damages, including lost wages, emotional distress and if severe enough, punitive damages.
At what Point would my Employer know that I have filed a claim against them?
Many workers are reluctant to bring a claim against their employer because it might lead to a hostile work environment. But employers will not know that a claim has been filed until they have actually been served with the complaint.
“For most California wage and hour violations, employees have three or four years within which they can bring a lawsuit,” says Yeremian. “But of course I encourage employees who believe they are suffering from these overtime violations to contact an attorney or the California Labor Board at their earliest opportunity because some types of remedies-- such as penalties--are only recoverable for violations that occurred within the last year.
In certain types of cases where the court finds that the employer has violated minimum wage laws by failing to compensate employees for all hours worked, the court may award double the unpaid wages to the employee.”
Yeremian and his law firm recently filed a case against a large retailer alleging that there is a systematic under-reporting of actual hours worked by employees who work in distribution centers. “A former employee??"she worked stacking boxes??"called us with her complaint,” he explains. “In her case, which includes her co-workers, they would clock out at the end of their shifts and would then be forced to wait at a security check line, sometimes up to 15 minutes in order to be inspected for theft. We are looking at hundreds of employees coming off the line at the end of a shift all at the same time and then waiting for the bag and coat security check.
These employees will likely have their day in court.”
David Yeremian is an experienced litigator and business counselor and co-founder of Orshansky & Yeremian LLP. He has worked on a wide variety of litigation matters including employment, real estate, securities, shareholder and partnership disputes, contract actions and business fraud.
Walmart Retaliation—California Labor Law Violation
October 4, 2012 was an historic day for Walmart. More than 70 Los Angeles Walmart workers from nine stores walked off the job, even though they are not unionized. It was the first strike by Walmart retail employees in the retailer’s 50-year history. More workers and supporters rallied with the protesters, carrying signs saying "On Strike for the Freedom to Speak Out" and "Walmart Strike Against Retaliation”. Workers claim Walmart has threatened, suspended and even terminated employees for speaking out about working conditions and low pay.
Walmart employees claim the company constantly violates the California labor employment law and federal employment laws. In recent weeks alone, Walmart has received more than 20 charges of unfair labor practices nationwide from the National Labor Relation Board.
Workers claim that they have either been fired or had their hours cut back after being involved with OUR Walmart, according to Dan Schlademan, director of Making Change at Walmart, the campaign behind OUR Walmart. (OUR Walmart is a labor group backed by the United Food and Commercial Workers that defends Walmart workers' rights.) Schlademan further said workers have been told not to talk to OUR Walmart organizers and that doing so could shut down stores, which would mean they would be out of work.
Walmart has had more than its share of employment issues recently. Just one month ago, Walmart “lumpers”-- warehouse workers who load trucks to deliver to Walmart--walked off the job protesting against working conditions. (Walmart responded by saying that service providers and subcontractors are expected to comply with the law??"warehouse workers are employed by subcontractors, and not hired directly by Walmart.)
Walmart continued to hit the news when it responded to a “series of unprecedented labor strikes”, according to the Huffington Post (10/13/12). The largest retailer in the world is viewing the protests as “serious attacks” and at the same time, urging its managers not to “discipline” employees who engage in walkouts, sit-ins or sick-outs. It would appear that the company has taken an “about face” regarding retaliation than it had in the past.
Black Friday (Nov 23) is the deadline given to Walmart by striking employees, who demand the company end its retaliatory practices against workers attempting to organize. Along with demanding that Walmart stop retaliating against workers who want to unionize, employees at 28 stores nationwide are also asking for better pay and benefits.
So far Walmart in the US is not unionized, although the majority of stores worldwide are, according to Bloomberg (Jun 2011).
California Realtor Settles Labor Lawsuit for $5 Million
The Labor Commissioner alleged that ZipRealty failed in its mandate to pay California real estate agents minimum wage and overtime, as dictated by California labor law at the time. The defendant maintained, according to the report, that real estate agents working as agents of ZipRealty were commissioned agents only, and thus were paid commissions on those transactions.
The California Labor Commissioner, however, held that ZipRealty sales agents were classed as outside workers at the time and thus, would qualify for minimum wage and overtime according to California labor employment law.
The plaintiffs in the lawsuit originally sought $17 million in damages and compensation. However, according to the Thomson report the Office of the Labor Commissioner and ZipRealty settled on $5 million in exchange from a release from the Labor Commissioner related to all claims, in addition to no admission of wrongdoing.
ZipRealty, according to a statement made by the firm's President and CEO, felt the lawsuit was without merit. "We are settling this matter because we believe it is in the best interest of our customers, agents, employees and investors to avoid the cost and risk associated with trial," said Lanny Baker, "and to instead devote our resources to strengthening the technology-enabled solutions we provide to consumers, agents and other leading brokerages."
There was no statement from the Office of the California Labor Commissioner, in the report denoting the alleged violation to California and labor law.
It was reported the $5 million, as agreed in the settlement between the two parties, would be held on account for distribution to those individuals who were employed by the firm during the time frame represented by the California labor lawsuit.
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California Employment Bill Designed to Protect Workers' Rights
According to American Banker (9/28/12), Tri Counties Bank will pay up to $2.5 million to settle allegations made in a class action lawsuit that the bank did not properly pay employees for overtime hours worked. Specifically, the plaintiffs allege assistant branch managers were misclassified as exempt from overtime pay, a violation of California labor law. The bank will pay between $2.1 million and $2.5 million, depending on how many class participants file claims.
Meanwhile, California Governor Jerry Brown signed into law a bill designed to protect people who work as temporary labor in warehouses and distribution centers. The bill requires the agencies that provide workers for the warehouses and distribution centers to provide documents proving they obey the laws and can pay their workers. The bill will take effect January 1, unless delayed by legal action.
The bill's supporters say it will help ensure temporary workers are paid for the hours they work and have safe working conditions.
In September 2012, warehouse workers who load trucks to deliver to Walmart walked off the job protesting what they called terrible working conditions. A letter reportedly sent to Walmart executives (found online at takeaction.walmartwatch.org) cites unsafe working conditions??"including broken equipment and inadequate access to clean drinking water??"low pay and common injuries. "Right now, the temperatures in Riverside and San Bernardino top 100 degrees daily and inside the metal containers the temperature can get up to 120 degrees," letter writers Limber Herrera and Marta Medina write. "There is little ventilation and the heat and pollutants we inhale can make us vomit and bleed from the nose. We face intense retaliation from management if we say anything about the conditions."
According to Huffington Post (9/14/12), Marta Medina, one of the letter writers, reportedly reached her limit when she was eight months pregnant and told to ship 2,000 boxes in one hour. Workers at the warehouses are not directly employed by Walmart, but are instead employed by subcontractors.
A spokesperson for Walmart said service providers and subcontractors are expected to comply with the law.
Misclassified Engineer and California Labor Law—Overtime Lawsuit?
Brian is a field service engineer. Although engineers in California’s software industry are amongst the most misclassified of professions, Brian’s job isn’t dissimilar. “Say a customer has a broken pharmaceutical instrument??"I go to their facility and repair it on site and that’s basically my job description,” he says. Brian doesn’t design or implement anything, nor does he supervise anyone.
“I thought exempt means that you have people you are responsible for, which I don’t,” Brian says. “I asked my supervisor for the exact definition of exempt. He just answered by saying that my job is exempt. Period. That isn’t much of an answer.”
Brian’s previous employer did pay him overtime. It was the same position, going to the same pharmaceutical companies with the same type of repairs. But he was paid hourly??"his present job is paid by salary.
“When I was hired by the company I work for now, I asked about overtime; from past experience I know that the job means long days,” says Brian. “They told me right away that I wouldn’t get any overtime, so I asked what happens if I work 12-hour days, which I did often in my last job. I was always paid two hours at time-and-a-half and after that double time. My employer said it would only happen once in a while. I started this job last October and since that time I have worked 12 hour days three times a week, every single week.
"I still want my employer to explain why I am considered exempt. What is most annoying is that I got the evil eye because I asked. When I told him that every other company like this one pays overtime, he told me to ask HR. I just gave up, afraid of being labeled a troublemaker.”
The last company Brian worked for was much larger than this one, and their policy was straightforward??"they adhered to the California labor code. If anyone worked past 12 hours, they were paid double time. The company he works for now is much smaller, but the California labor law still applies.
Although the company he works for now employs about 15 engineers, Brian says the others have different circumstances. “This company was originally Canadian and a California company purchased it,” he explains. “The other engineers are Canadians??"they definitely don’t want to rock the boat! Some are in-house engineers so I don’t know what their status is, but all the external engineers are like me, exempt.”
Brian’s next move mainly has to do with his year-end review. “I am waiting to see what my review looks like,” he says. “If I start slowing down to 8-hour days, my review will likely say I don’t get the job done. If it is at all negative I will be pissed because I know I am getting the job done. And if it is negative I will continue to push hard for overtime because I will likely get laid off anyway…
"However, on a positive note, I was told that California labor laws are some of the toughest for overtime. They favor the employee so I am hopeful that this company will comply with the labor law. I considered working for other companies in other states such as New York, but this California company came out ahead. I hope.
"Meanwhile, in these tough economic times, I will just shut my mouth. Even though I am happy to do all of the work, I just want to be compensated for it. I haven’t figured out how much I am actually owed but I believe this company owes me thousands of dollars in overtime pay.”
Brian has to weigh the odds and decide whether he wants to make a California overtime claim, at the risk of getting laid off. At the same time, Brian also knows that his employer runs the risk of paying double the amount of overtime compensation if retribution is involved. A California labor law attorney will be able to assist Brian in making a decision.
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In-N-Out Burger Class Action Alleges Racial Discrimination in California
According to the Contra Costa Times (9/7/12), plaintiffs Alonzo Brown and Carlos Dubose applied for jobs with the chain, at various locations and for various jobs. Even though the firm was actively advertising for applicants, the plaintiffs allege in their California labor lawsuit they were repeatedly turned away. Both men are over 40 years of age, and both are African-American.
Arnie Wensinger, vice president and general counsel for the company, said in a statement the allegations in the lawsuit have no basis in fact. "In-N-Out Burger does not discriminate on the basis of ethnicity, race or age in our hiring policies or practices," Wensinger said. "We hire from our local communities and our restaurants reflect the demographics of that community."
Wensinger referenced the allegations as baseless and irresponsible.
Plaintiff Brown, according to the California labor lawsuit, applied for a store associate job in Oakland. Brown alleges he was told the company was hiring, but was denied a job two months later.
Dubose, as part of his California and labor law complaint, noted he applied for two jobs on two separate occasions at two locations: a cleanup associate position at Fisherman's Wharf in San Francisco, and a month later for an advertised position in Oakland. According to the lawsuit, Dubose was denied both positions.
The California labor employment lawsuit alleges that Dubose was denied a job at the Oakland location in spite of the fact a manager at the restaurant told him at the time he applied the company planned to hire five individuals within two months.
The plaintiffs allege age and racial discrimination, noting they were both told the company was not hiring after all when the two were rejected for jobs, even though both men had been told at the point of application the company was, indeed hiring.
"These are not isolated examples of employment practices or individual decisions," the lawsuit states. "On the contrary, these incidents are representative of the Company's systematic discrimination against the Class and in favor of applicants who are under the age of forty and/or not African American."
California labor code has strict guidelines when it comes to areas such as California prevailing wage law, hours of work, meal and rest periods, and the correct computation of overtime. Discrimination against age, ethnicity and gender is also entrenched in California state labor laws.
The statement from In-N-Out Burger noted the company intends to "aggressively defend itself" against the allegations. It was noted in the statement that more than 23 percent of the workforce employed at the two identified locations, are African-American.
Nurse Says She Is Stuck between California Labor Law and Her Union
“Part of my contract with the Nurses Association is to pay me $75 per month for continuing a critical care certification,” Jeanine explains. She has been certified as a critical care nurse for 30 years and prior to becoming unionized, the hospital where she works paid this fee. Now, however, that $75 per month is part of her union contract, and therein lays the problem…
It recently came to Jeanine’s attention that she hadn’t been paid this extra $75 per month for at least the past 18 months, so she complained to her immediate supervisor. Keeping in mind this is not a violation on bonuses, but part of her union contract, Jeanine believed her employer was contractually obligated by law and not paying her would be a violation of the California employee labor law.
Jeanine isn’t alone with this issue - several other nurses haven’t been paid their $75 per month either. Her supervisor told the nurses to give him a copy of their certificates and he would submit them to HR, but Jeanine gave it to her supervisor’s secretary.
“HR said they never got the documentation,” says Jeanine. “Their interpretation of the contract was that they were morally obligated but not contractually obligated by law because our contract states that the certificate needs to be submitted to HR. However, they acknowledged that I had given it to my boss’s secretary. Of course nobody remembers.”
She brought up this issue with her union, to no avail. “The union met and decided they were not going to take this to arbitration. I don’t know why our union isn’t on our side. Furthermore, I asked to be a part of the arbitration selection process because the mediator - who works as the hospital administrator-- was obviously biased. He more or less blamed this issue on me and said that I should be looking at every paycheck.”
Like so many employees these days, Jeanine gets her pay stub electronically - she has to look online for details. And it gets automatically deposited. Sometimes her paycheck varies, depending upon nurses overtime, so it is easy to see how she could overlook a shortage of $75 per month for the past 18 months.
Because the Nurses Union wouldn’t help, Jeanine went to the California Labor Commissioner’s Office. She is familiar with the California labor employment law, having practiced law for six years (she became an attorney in 2001) before going back to nursing - her passion.
“I met with the hospital’s attorney and the labor relations representative - the Labor Commissioner set this up for me after I requested a hearing,” says Jeanine. “At the hearing they said that unfortunately, they would not take my case because it was a matter of interpreting a labor relations contract and that would make it a federal issue. So my only option would be to get an attorney and go to federal court. The amount of money in question is only $2,300 so that won’t happen.
"National Labor Relations is federal law and when that gets breached, you don’t have normal recourse within your state - it becomes a federal issue. You can’t even take it to small claims court so you are totally dependent on your union to represent you in these matters. And I don’t have an attorney that will take my case for a few thousand dollars, unless there are other nurses in my position that want to come forward.
"So I am stuck because my union won’t do anything for me and this has become a federal issue. ‘You are a victim of all the procedures,’ the Commissioner told me; she didn’t give me a lot of hope. The California Labor Commissioner isn’t hopeful that they can do anything if an issue is in any way federal.
"Bottom line, I think our union should be held accountable - they are obligated to represent their members. But the contract says they may consider arbitration - may’ is just another weasel word to get out of arbitrating on behalf of its members.
"The Labor Commissioner said I would be wise to change the contract but it is just another path of frustration for me. I like nursing and taking care of my patients so I don’t want to spend time and money fighting my union. Lesson to be learned: I think people should be very careful when they bring in a union and they should make sure that the union is representing them. We have a runaway union that has their own agenda.
"Now I think that I have a good faith case against my union, especially since I have been a critical care member for over 30 years. I thought about all the union dues I have paid all these years, but perhaps I just have to let this one go.
"And another lesson to be learned: read your contract in detail and check your pay stubs.”
Appeals Court Rules Insurance Adjusters Can Claim California Overtime
Courts--and the California labor law--have typically held that adjusters are professional employees and therefore exempt from overtime pay??"even if they worked 60 or 70 hours per week. But increasingly, claims personnel, including insurance adjusters, are saying that their duties are those of glorified administration clerks, mainly due to technology and micromanaging and that they are adjusters only in their title.
Insurers in the case, Frances Harris et al. v. Superior Court of Los Angeles and Liberty Mutual Insurance Co., argued that adjusters are exempt administrators because they do not produce the company's product. According to court documents, the product is the transference of risk, not claims adjusting, and therefore not entitled to overtime compensation.
The court, however, found that Liberty Mutual shows claims adjusting as "an important and essential part of transferring risk. If the employers never paid any claims, then they would not be transferring any risks." Further, the court found that the adjusters were misclassified and entitled to overtime pay because the are not primarily working in a management capacity. The court argued that, if adjusters are exempt, every office worker, including secretaries at a law firm, is exempt.
Just days later, a South Carolina judge granted a conditional class certification allowing property claims adjustors to sue Farmers Insurance Exchange for allegedly not paying overtime (MacGregor, et al. v. Farmers Insurance Exchange). In July 2001, a California jury awarded a class of Farmers Insurance Company adjusters $90 million in overtime pay, according to Claims Magazine (May 2011).
(In October 2006 a 9th Circuit ruling rejected a Farmer's Insurance Exchange Class Action, arguing that all Farmers' adjusters are exempt because they exercise discretion and make independent judgments.)
Misclassified Construction Employee owed California Overtime?
“I am classified as exempt but I can’t hire or fire anyone,” says Chester. “I am just on the jobsite to make sure the project goes along without a hitch--I have to be on site while they are working to make sure nobody gets hurt, and make sure proper procedures are carried out. How can I be considered exempt when I report to others on the jobsite and at the company’s office—I am definitely not the boss in any capacity.”
Chester says he was the construction superintendent and project manager at different jobs over a period of five years. Most projects were involved with public works and government contracts and they were time-sensitive. “If we had a job order contract with a government agency, work had to be done at night and weekends,” he says. “I still did my regular 40-hour week job so all nights and weekends worked should have been overtime.
"We worked on the Rose Bowl renovation in Phase 1, and had to finish the Gold Cup soccer match by a certain date, so we worked around the clock. Typically we worked 10 hours overtime per week and it was simply expected of me. For several months after the Rose Bowl I worked about 300 hours overtime so I finally brought up the overtime issue with my employer.
"Because I am on salary he said I couldn’t have any overtime compensation. I told my boss that wasn’t fair because contractors and sub-contractors got paid overtime at the Rose Bowl job but I worked for a general contractor. According to public works, our sub-contractors had to turn in a certified payroll every two weeks, showing how many hours the guys worked and that they were getting paid for hours worked. During the Rose Bowl reno, guys working for the sub-contractor got paid a lot of overtime, but everyone with the general contractor Angeles Contractors Inc., the company I worked for, didn’t get any overtime."
Instead of overtime, the general contractor placated Chester with comp time—more vacation time. But Chester figures a few weeks more of vacation time per year doesn’t amount to $40,000. Getting vacation time in lieu of overtime is also a California labor lawviolation.
Angeles Contractors laid off Chester last month. He thinks it is because he asked for overtime pay. Chester says that if he made an issue out of any labor laws violated by the company, his employer told him that he won’t get any job recommendations.
“When I was hired, my boss said I had to work overtime if the project needed it,” explains Chester, who was OK with that—for a while. “But these projects are increasingly more demanding with my time. I have some records of my overtime hours going back at least three years and that is how I came to this amount owed to me.”
Chester’s complaint is similar to that of a construction superintendent employed by F.H. Paschen--a general contractor and construction company with offices nationwide. He was misclassified as exempt from overtime and denied compensation for time worked over 40 hours per week. He sued on behalf of all construction superintendents employed by F.H. Paschen in California for a number of California labor code violations. The court certified the case for class treatment in February 2005 and a settlement of $1,080,000 was reached on behalf of 84 class members.
And in 2008, a group of construction workers filed a California overtime lawsuit alleging they were made to skip breaks, travel without compensation, and sign blank time sheets, as well as not getting paid for overtime work.
Increasingly, people working in the construction industry are realizing their rights to overtime and other California labor laws.
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California Labor Law Violations Found Via Impromptu Inspections
Labor Commissioner for the state of California, Julie A. Su, headed a joint enforcement action involving the California Division of Labor Standards Enforcement (DLSE) and the US Department of Labor (DOL) Wage and Hour Division. Targeted were a handful of manufacturing facilities in the garment industry of Los Angeles.
A release from the office of the Labor Commissioner released earlier this month (8/8/12) noted that the wave of unannounced inspections occurred 17 years to the day after garment workers were found toiling in deplorable conditions, behind barbed wire and under the supervision of armed guards at a sweat shop in El Monte. "Rooting out continued violations of basic wage protections for garment workers is a top priority for this administration," Su said in a statement concerning the California labor code violations. "The honest employers in the industry depend on this effective enforcement, and garment workers deserve nothing less."
Enforcement officials were organized into separate teams and co-ordinated to visit ten facilities at the same instant, without prior notification. A total of 199 workers were employed at the ten facilities on the day of the impromptu inspections. Investigators found various violations to California labor employment law??"among them, failure to carry workers' compensation for their employees, and failure to obtain a garment license, according to the release.
California and labor law have a symbiotic relationship under the watchful eye of the Office of the Labor Commissioner. In this case, a total of $217,844 in citations were issued.
Over and above that will be various amounts, yet to be determined, owed to workers for alleged or suspected violations to minimum wage and overtime provisions under California prevailing wage law.
The garment industry typically attracts low-wage workers. It is also common for the industry to exploit its workers in an affront to California employee labor law. The ten garment facilities were not identified specifically in the release.
Su indicated in this latest effort to enforce California state labor laws, 50 inspectors from the joint effort were divided into teams of ten, with five inspectors each co-ordinated to swoop in on the targeted facilities at the exact same time.
"My office is focused on ensuring that all wages are paid for all hours worked, especially for minimum wage workers," continued Labor Commissioner Su, in speaking to the violations to California employee labor law.
While some workers are too timid to launch a California labor lawsuit on their own, legal advocates will sometimes assist on their behalf. It is not known if any of the 199 workers employed at the ten facilities would be considering legal action beyond the efforts of the enforcement agencies involved.
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