Professional Service News
California Labor Law Allows Citizens to Sue for Violations
The Private Attorney General Act (PAGA) was created because the California Labor and Workforce Development Agency did not have the resources to investigate all labor code complaints. As a result, PAGA was developed to give private citizens the right to sue for such violations of the code and recover civil penalties on behalf of the state. If the plaintiff is successful in his lawsuit, he and any injured employees are given 25 percent of the penalties along with any money owed by their employer and attorneys’ fees, while the California Labor and Workforce Development Agency keeps 75 percent of the fines.
There are rules for a person to file a lawsuit under PAGA. First, a complaint must be filed with the Labor and Workforce Development Agency. If the agency declines to investigate the complaint, or if it fails to respond to the employee within 33 days, a PAGA lawsuit can be filed, provided it falls within the statute of limitations of one year.
If an employee were to sue for unpaid wages, for example, he could file a suit under the Private Attorney General Act. If he won, he and fellow employees would recover his unpaid wages, which he would keep, plus he and any other harmed employees would receive 25 percent of any civil penalties awarded by the court.
Currently, lawsuits against a variety of plaintiffs filed under PAGA are working their way through the courts. One such lawsuit was filed against Orkin, alleging employees were not properly paid for meal breaks or overtime. According to Courthouse News Service (8/13/13), Orkin argued that the lawsuit should be moved to federal court, but the 9th Circuit found that because the lawsuit was filed under PAGA, which is unique to California, the lawsuit belonged in state court.
The Urbino lawsuit is Urbino v. Orkin Servs. Of California, Inc., No. 11-56944.
California Labor Law Spells Pregnancy Termination a Wrongful Termination
When she was five months pregnant, Rovanda’s doctor ordered an ultrasound and found out she had dilated: she required stitches in her cervix to hold the baby and carry it to term. It was imperative that she have this surgical procedure and four or five days off work. But even before this, HR tried to let her go.
“When I first told my supervisor that I was pregnant, the lady at HR told me that she was going to have to lay me off,” says Rovanda, who knew she wasn’t allowed to do that; she knows that is discrimination and a violation of California labor law. And HR must have known it too. Incredibly, Rovanda says she is not the only one. “Anybody who works here and gets pregnant is laid off but in reality they are getting terminated,” she says.
“When I was able to go back to work, the lady at HR said, ‘Don’t work tomorrow, we will call you back.’ No call back. I phoned a few days later and they told me to apply for unemployment, they had already sent my last check electronically. A guy came to my house who said he was just taking my place until I returned to work. He took the company vehicle and petty cash, about a week after I had the surgery.
“I was ‘laid off’ last October 2012. HR said I could only return to work part-time after the baby was born but I never came back to work. I was a hard worker with only one write-up and right after that got a promotion, so the only reason I can think of for terminating me was because my position meant I had to be on call for emergencies first and second shifts - when you clean in the evening. They figured I couldn’t do it with a baby.
“I kept in touch with them while I was pregnant and I planned to go back to work six weeks after my daughter was born. I had family and a babysitter all set up to look after her.
“The GM said they weren’t going to hire me back at all because my job was made redundant but they had a position advertised in the local newspaper for a supervisor - my job. I never pushed the issue until I saw that ad.
“When I told my manager that I was going to call a labor lawyer to determine whether this is right or wrong, he just said, ‘Do what you’ve got to do.’ I know they are in the wrong; I put my trust in them, I thought they would secure my job.”
Rovanda is a single mom - her daughter is now six months old. She is still collecting unemployment insurance and looking for work, but her unemployment runs out this October, which is cause for concern. She has also filed a wrongful termination claim, alleging discrimination.
California Labor Lawsuits Expose Seedier Side of Hollywood
One lawsuit was filed against CBS Studios and one of its employees - a set designer - alleging the set designer offered a woman a job for $10,000 a month if she would have sex with him and give him her pay from her first month of work. After the woman agreed, and carried out her part of the agreement, she alleges he harassed her. According to Courthouse News Service (7/2/13), the victim alleged she was threatened with termination unless she agreed to be the man's girlfriend and she was sent inappropriate text messages.
The lawsuit alleges the man’s bosses knew about the behavior but did nothing to stop it. When the victim continued to refuse the man’s advances, he reportedly threatened to blackball her and defamed her. The lawsuit seeks damages for sexual harassment and retaliation.
Meanwhile, two interns who filed a lawsuit against Fox Entertainment Group were given a summary judgment victory. The Hollywood Reporter (6/11/13) writes that a judge found that Fox Searchlight was the interns’ employer, against Fox’s argument that a production company - and not Fox - was in fact responsible for the employees. The judge found that the two interns were employees and not interns.
The judge also certified a class action to examine internships at Fox. Fox has said it intends to appeal the ruling, but more lawsuits are being brought forward against the company, alleging unpaid interns should be paid for the work they are doing, and failure to pay is a violation of California labor law and the Fair Labor Standards Act.
The findings from this lawsuit could set a precedent for other unpaid internship claims in Hollywood.
Nurses Allege Violations of California Labor Laws
According to ABS-CBN News (5/17/13), nurses at Bellflower Medical Center in California allege they have had their pay days moved around and have been given paychecks that bounced when they cashed them. One employee says that since January 11, multiple checks have bounced, sometimes repeatedly, leaving employees without pay owed them for hours worked.
The same medical center was reportedly involved in a settlement with the federal government, after it was accused of fraudulently charging Medicare for fake procedures. Meanwhile, the California Department of Labor Relations fined the medical center $7 million for paying employees late and bouncing checks.
According to a news release from the California Department of Labor Relations (online at dir.ca.gov; 3/14/13), Pacific Health Corporation was cited $524,300 for late payments to employees and for bouncing checks. The company, which owns four medical centers in California, including Bellflower, was also cited more than $6.5 million for not providing complete and accurate itemized wage statements to employees.
“Employers have an obligation to pay workers the wages they’ve earned,” said California Department of Industrial Relations Director Christine Baker. “Forcing employees to wait for payment, or depriving them of promised benefits, are illegal acts and cause unacceptable hardship.”
The news release notes that Bellflower Medical Center was told that it would face further civil penalties if it continued to violate labor laws. In February 2013, the department received reports of delayed wages and insufficient funds for checks. On investigation, the department allegedly also found employee benefits were deducted from paychecks but not paid, resulting in coverage being canceled.
As a result, the department fined Bellflower $7 million.
Dental Assistant Denied Breaks Led to Downward Spiral - Now Filing California Labor Lawsuit
Gina says that the day after Coast Dental bought out Small Care the registered dental assistants were trained on their new computer system. The following day, all six of the non-registered dental assistants (who helped Gina and her colleagues) were fired. “Three of us were left holding the bag because the workload didn’t change.”
One way to compensate for less staff was deny those workers “dangling the workload” their mandatory 10-minute breaks - one in the morning and one in the afternoon. “Nobody was happy with this situation, even the dentists were devastated,” says Gina. “We were all complaining and we were all working overtime because we were constantly slammed.
“It gets worse. There are ten operatory rooms. It’s a big clinic, so a cleaning service came in at night, along with the break room and the waiting room, but that was prior to the changeover. This new company delivered us cleaning equipment! We worked our buts off all day and then had to clean the entire clinic. We had to mop floors and do all the sterilization. We never signed up for this work but our office manager told us that if we wanted to work there we had no choice.
“At the point we didn’t want to work overtime (which we got paid for) but we had to look after our patients. They forced this whole production issue on us; it was all about making more money. They didn’t want us to work overtime but we had no choice. We constantly complained about not getting breaks. ‘Well take a break,’ they said. How could we take a break when no one could relieve us? We couldn’t leave the dentist and his patient.”
The dental assistants weren’t able to add their breaks to their time sheets as overtime because they clocked in and clocked out at lunchtime, and then clocked back in and out at the end of the day. “Sometimes we couldn’t even get to the bathroom because we were so slammed, but if we ran into the break room and grabbed something to drink, we would get into trouble,” Gina adds. “If you calculate all the days we worked without breaks, it’s a lot of money. Over a year, we probably took 5 percent of our breaks. We were all in the same boat, with the exception of the dentists.
“We complained to the dentists but they didn’t have any control over the corporation. In fact the dentists made it worse - they were running around like chickens with their heads cut off. They had to meet a certain quota and after that they could make more money so that wanted to book in additional crown preps (more money) and emergencies.
“It became very stressful and I was getting depressed. I am a single parent with two teenagers. I explained my work situation and family problems to my doctor. I saw him originally for my yearly physical (I’m almost 50) and I was prescribed Wellbutrin, an anti-depressant. At first I didn’t like the meds and stopped, but my doctor advised me to stay on them a bit longer. The stress at work got worse so I started self-medicating - I had a few drinks after work. Then I went back on Wellbutrin.
“My boss, the office manager, thought I was on drugs, but I just drink wine. Wellbutrin makes you act a bit weird. I knew I wasn’t being myself: I thought everyone was looking at me and sometimes I forgot things but I was always a hard worker and had lots of compliments. They made me take a drug test. I figured I couldn’t stay on Wellbutrin so I stopped taking it the next day. But I started drinking wine again as soon as I got off work. Anyway, I missed a day of work.
“The stress continued. I drank a bit too much one night and next morning I was still a bit drunk at work so they made me leave. I apologized profusely. To make a long story short, I went on a downward spiral and I ended up getting a DUI a few months later. I was incarcerated for 14 days for being drunk and disorderly in public and they fired me.
“But they said I quit because I didn’t show up for work. I have been denied unemployment and food stamps and cannot get any financial aid. I asked my boss for my job back but no dice so I’m looking for work but there aren’t many jobs out there right now. I am happy that I don’t have to go back there, but financially I am screwed. I had to borrow $1,000 from my dad and I’m surviving off my credit cards. My kids are OK - they get child support from their dad.
“There were a lot of stressful situations that led to this point but I have only myself to blame. I want to get reimbursed for my breaks and I want to get unemployment insurance. I put in an appeal about 10 days ago with unemployment but haven’t got a date yet for the judge to hear my case. Meanwhile, I filed a complaint with an employment attorney.
“We all knew it was against the law to deny our breaks but everyone was afraid to complain; we all talked about turning them in. I wish I had reported them to the California labor board before I got fired. And I wonder if any of this would have happened if I was able to take my breaks and not get so stressed out.”
Car Wash Employers Got to Come Clean
The criminal complaint, which was filed January 23, 2013, has charged the owner, general manager and two supervisors with conspiracy to cheat employees out of their wages. The California Department of Industrial Relations’ Division of Labor Standards Enforcement discovered a litany of methods the car wash used over the past four years to cheat workers out of their wages. The Santa Monica Patch said the complaint accuses the four defendants of violating California labor laws by not giving workers rest and meal breaks, and “coercing employees into signing declarations which falsely stated that they had received paid breaks,” according to city prosecutors. It also accuses the defendants of falsifying and altering employees’ time cards to make it appear as though they worked fewer hours than they actually did.
The Santa Monica City Attorney’s Office has charged them with grand theft of money and labor by false pretenses; conspiracy; failure to pay minimum wage; failure to give meal breaks and rest breaks; and taking back wages which had been paid.
How did they think they could get away with cheating their employees? How could they not know that two other Santa Monica car washes had previously been accused of violating California’s labor laws? Santa Monica Car Wash and Detailing last May was slapped with a civil complaint filed by the Mexican American Legal Defense and Educational Fund on behalf of carwasheros. And the state Attorney General announced earlier this year settlement of a lawsuit it had filed against eight other California car washes - including Bonus Car Wash in Santa Monica - over similar California labor law violations.
In March 2012, the California Labor Commissioner filed two lawsuits against three car washes for unpaid wages, penalties and damages, totaling more than $2 million. Rosencrans King Car Wash was accused of not paying its workers for all the hours they worked, and the lawsuit seeks almost $1.7 million in minimum wage, overtime, penalties and attorney fees. Vermont Auto Spa also violated similar California state labor laws.
And back in October 2010, a former Los Angeles carwashero filed a lawsuit against Handy J Carwash, charging that his ex-employers forced him for years to show up for work early in the morning but he wasn’t allowed to clock in until hours later. In June 2011, Tomas Rodriguez, 41, of Hidalgo, Mexico, was awarded $80,000: Los Angeles County Superior Court Judge Mark Mooney ruled that the three car wash owners and one manager were liable for $50,000 in back wages for failing to provide proper employment records, and an additional $30,000 in damages.
“Wage theft hurts workers, honest employers, and the honest tax payer,” Department of Industrial Relations Director Christine Baker said in a press release. “California’s Division of Labor Standards Enforcement plays a critical role in enforcing labor laws and preventing wage theft. Employers who deny the workers their pay will be held accountable.”
According to the Santa Monica Mirror ( Jan 23, 2013), the specific acts alleged against the owners and managers of Wilshire West Car Wash as part of the conspiracy include:
1. Altering employee time records - and creating false time records - to make it appear that workers had worked less hours than they actually had;
2. Creating false time records to give the appearance that employees took meal breaks when in fact the employees were still on duty at the time;
3. Coercing employees into signing declarations which falsely stated that they had received paid breaks;
4. Forcing employees to pay a regular fee for cable television even though they were not allowed to watch television on the job;
5. Forcing employees to pay a regular fee for towel laundering;
6. Threatening, harassing and punishing employees who questioned the defendants’ unlawful behavior;
7. Failing to give employees a paid rest period for every four hours worked, as required by law;
8. Failing to give employees a meal break for shifts of at least five hours, as required by law.
The criminal charges, all of which are misdemeanors, include:
- grand theft of money and labor by false pretenses;
- conspiracy;
- failure to pay minimum wage;
- failure to give meal breaks;
- failure to give paid breaks; and
- taking back wages that have already been paid.
The defendants will be arraigned in the Los Angeles County Superior Court, Airport courthouse, on February 26, 2013. Each of the 11 charged offenses is a misdemeanor that carries a maximum penalty of one year in county jail, and maximum fines of between $1,000 and $10,000 per offense.
New California Labor Law and a Justin Bieber Lawsuit
As for Bieber’s bodyguard, we’ll get back to that. It does prove, however, that even famous celebrities are often themselves, employers and thus are required to subscribe to the same rules and regulations as everyone else.
One update to the California labor code that came into effect the first of the month has to do with social media, and the rights employees have in that regard. An employer does not have the right to ask for user names or passwords to social media accounts or other similar accounts from either employees or job applicants, with an eye to perusing the bowels of a Facebook or twitter account--or even email--for the purposes of obtaining background information on the employee, or prospective employee.
While California and labor law provides for exceptions to that rule in the event a formal investigation into employee conduct is ever needed, user names and passwords are otherwise off limits. Any employer who requires them or even uses them to dig into an employee’s life without just cause could be faced with a California labor lawsuit.
Other updates to California labor employment law, as outlined in The San Diego Union-Tribune (1/10/13) include updated rights for ex-employees to access their personal work records--a right that has always been available to current employees. 2013 also marked the beginning of updated amendments to contracts for commissioned employees.
California state labor laws require employers to post these laws in the workplace so that employees will have access to current regulations.
As for Justin Bieber, he’s been having some trouble of late. The horrific story about the photographer who was recently run down and killed trying to snap photos of the young pop sensation notwithstanding, Bieber has been having some issues with a bodyguard, according to The Business Insider (1/11/13).
The report notes that Moshe Benabou, who was employed by Justin Bieber as a personal bodyguard starting in March 2011 before he was fired after seven months on the job, filed a California labor lawsuit against the singer, alleging the Canadian teen heartthrob was aggressive towards Benabou and punched him in the chest repeatedly while backstage during a concert in October of last year. The Business Insider cited The Hollywood Reporter as a source.
The plaintiff claims in his action that he worked between 14 and 18 hours per day, 7 days per week but was not paid overtime in accordance with California prevailing wage law. The Business Insider cited TMZ as suggesting sources from the Bieber camp had reported to TMZ that Benabou was, in the defendant’s view, disgruntled over being fired. It was suggested in the report that Benabou had uttered a number of untruths to Bieber.
The California employee labor lawsuit was filed January 10 in Superior Court of the State of California, for the County of Los Angeles, and cited nonpayment of California overtime, and assault and battery on the part of Justin Bieber. Those allegations are yet to be proven in a court of law. The case is Moshe Benabou v. Justin Bieber & BT Touring LLC of Delaware, # BC498862.
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.
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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.
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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