Jury Awards $186 Million in California Labor Lawsuit

San Diego, CA A jury awarded the plaintiff in a California labor lawsuit alleging employment discrimination $186 million last month. Although the California labor law award seems like a lot, experts believe the award will be reduced. Meanwhile, a lawsuit filed by the Los Angeles City Attorney alleges companies involved on a construction project violated wage and overtime laws, including failure to pay the California prevailing wage.

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.

Sprint California Lawsuit Alleges Workers Not Paid Properly

San Francisco, CA A California labor lawsuit filed by workers against Sprint Nextel Corp alleges employees were not properly paid for all hours worked. Specifically, the lawsuit alleges employees were not paid for time spent on activities required before clocking in, such as starting computers, in violation of labor laws. The lawsuit also alleges violations of overtime pay laws.

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.

Supreme Court Hearing Unpaid Wages Lawsuit

Washington, DC The US Supreme Court has heard arguments in a lawsuit that could have implications for California labor lawsuits. At issue in the lawsuit is whether or not employers must pay employees for time spent going through security checks during and after work. Employees argue that not paying them for that time amounts to unpaid wages and violations of various labor codes. The Supreme Court’s ruling will have an effect on a California labor lawsuit underway against Apple.

The lawsuit before the Supreme Court was filed by workers at a Las Vegas Amazon warehouse. According to the New York Times (10/8/14), the workers allege they are required to spend up to 25 minutes after their shifts waiting to undergo security checks designed to prevent employee theft. In the original lawsuit, the plaintiffs alleged during the search that they were required to remove their wallets, keys and belts, and had to walk through metal detectors at the end of their shift. Additionally, they alleged they spent time during their unpaid breaks going through security clearances.

At least one lower court found that the security screenings were required for the job, making them “integral and indispensible” and therefore, payable time. That court, however, was partially reversing the district court’s dismissal of the lawsuit, after the district court found that time spent going through security was not compensable under the Fair Labor Standards Act.

Lawyers for the employers, a temporary staffing agency that supplied the employees to Amazon, argued before the Supreme Court that the security checks were not integral to the job and therefore should not be considered paid time. A spokesperson for Amazon said in a statement via email, "Data shows employees walk through post-shift security screening with little or no wait."

In 2013, the Court of Appeals allowed the lawsuit to continue, reversing the District Court’s dismissal regarding end-of-day security clearances, but upholding the dismissal of claims linked to the shorter lunches.

The Amazon lawsuit is Integrity Staffing Solutions v. Busk, No. 13-433. The employees filed the lawsuit seeking back pay, overtime pay and damages under the Fair Labor Standards Act.

Many employees are required to undergo some form of security check at their break time and at the end of their shift. Lawsuits have been filed against other companies also alleging employees should have been paid for the time spent waiting for the security checks. In California, a lawsuit was filed against Apple in 2013, alleging employees should be paid for time spent in security checks.

The Apple lawsuit is Amanda Frlekin et al v. Apple Inc, 3:13-cv-03451-EDL. The defendants in that case filed a motion to have the judges issue a summary judgment dismissing the lawsuit, but the judges denied the motion. The court did, however, stay the lawsuit until the Supreme Court’s ruling in Busk is issued but noted that discovery should continue because California labor laws may still allow some of the claims to survive the Supreme Court’s ruling, even if the Supreme Court finds against the employees in the Busk lawsuit.

(Edited to add a statement from Amazon.)


Photo credit: www.bizjournals.com

California Labor Lawsuit against Apple Certified Class Action

San Diego, CA A California labor lawsuit filed against Apple by former employees has been certified a class-action lawsuit. The lawsuit alleges Apple violated federal and California labor laws by denying timely payment of last paychecks and by not providing meal and rest breaks.

According to RE/CODE (7/22/14), the lawsuit was filed in 2011 by Brandon Felczer and other employees, who alleged Apple owed its retail and corporate employees back wages. As many as 20,000 workers could be included in the class.

In allowing the class-action certification, San Diego Superior Court Judge Ronald S. Prager broke the class into six subclasses: a meal break class for retail employees, a meal break class for corporate employees, a rest break class for retail employees, a rest break class for corporate employees, a waiting time penalty subclass and a wage statement subclass.

Brandon Felczer alleged in his lawsuit that he was forced to work five hours or more at a time without a meal break, a violation of California labor law. Furthermore, he alleges that when he quit his job he gave 72-hours notice but did not receive his final paycheck until two days later and did not receive sufficient waiting fees.

According to the judge’s ruling, Apple argued that plaintiffs were provided timely rest breaks. The judge, however, found that under Apple’s meal period policy, non-exempt non-manager employees were not told they were permitted to take their meal break within the first five hours of every shift. The policy reportedly stated that non-exempt employees who work more than five hours at any time during a work shift must take at least a 30-minute meal period, and that meal periods cannot be taken at the end of a shift to allow the employee to leave work early.

“Thus, as stated, it can be argued that Defendant’s meal break policy never authorized, permitted or made its non-exempt employees aware that they had the right to take a meal period within (italics in original) the first five hours prior to August 1, 2012,” the judge noted in his ruling.

The lawsuit 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.

In 2013, Apple employees in California filed a lawsuit against the company alleging they were wrongly denied overtime wages because they were not paid for time they spent off-the-clock waiting for security checks prior to leaving stores.

Class Action v. Barnes & Noble Has Roots in California Labor Lawsuit

New York, NY A class-action lawsuit now based in New York but having its roots in California as a California labor lawsuit will carry on after a New York judge refused to grant summary judgment for the defendants. Barnes & Noble, the bookseller, is accused of falsely classifying employees as exempt for the purposes of escaping the need to pay them overtime, or so it is alleged.

The lawsuit is being fought as a violation of the Fair Labor Standards Act (FLSA). According to court documents, prior to 2005, Barnes & Noble classified all its assistant store managers as FLSA exempt, which meant they did not qualify for overtime pay for hours worked over and above a standard workday or workweek. Most managers, who are paid a salary and perform managerial tasks, are properly exempt in this fashion. However, Barnes & Noble was hit with a lawsuit in California citing violations of California labor law when the assistant store managers cried foul.

The assistant store managers in the California case alleged they did indeed perform tasks that were non-managerial in nature. They also, even with the title of assistant manager, had no authority over other personnel.

That California labor lawsuit prompted Barnes & Noble to reclassify its assistant managers in California as nonexempt - meaning they could qualify for overtime pay. However, it’s been reported that Barnes & Noble did not make that same change elsewhere in the country until much later.

Eventually, Barnes & Noble reclassified all of its assistant mangers at locations in other states to nonexempt. That happened in 2010, and was the basis for Barnes & Noble to petition for summary judgment in the lawsuit that was originally brought in 2005 as an action citing California labor code. To wit, the alleged FLSA violations ended in June 2010, but the wider lawsuit was not filed until January 2013. The defendants cited the lawsuit as falling outside of the FLSA’s two-year statute of limitations, and thus was time-barred.

Not necessarily so, said US District Court Judge John Koeltl. That’s because the FLSA two-year limit extends to three years if there is proof, evidence or suspicion that the violation was willful. And given that Barnes & Noble had reclassified assistant managers in California as the result of California and labor law in the Golden State, but had not done so for a period of five years nationally, suggests that there “is at least some evidence that a jury could consider on the issue of willfulness,” the judge said.

The three named plaintiffs in the current lawsuit based out of New York (after having its roots in California labor employment law) are former assistant store managers for Barnes & Noble. The plaintiffs note that they did perform some activities that could be interpreted as the type of work typically performed by a manager. However, they also said the tasks they performed were more routine in nature - and that they also performed tasks performed by other nonexempt employees, such as working cash or handling product returns.

The case is Steven Trimer et al. v. Barnes & Noble Inc. et al., Case No. 1:13-cv-00579, in the US District Court for the Southern District of New York.

California Labor Attorney: Pregnancy Discrimination Not Rare

Hollywood, CA Even in an at-will employment state like California, where employment can be terminated for any reason - or no reason - firings for discriminatory reasons are illegal. Zack Broslavsky, attorney at Broslavsky & Weinman, LLP, currently represents a woman who alleges her termination violates pregnancy discrimination laws. The good news for California employees who are terminated for discriminatory reasons is that wrongful termination lawsuits can be filed to recover lost wages, future lost earnings and emotional distress.

According to Broslavsky, his client was an employee at a Walgreens in Hollywood when she became pregnant. The client worked at the Upmarket Café, performing customer service duties, making sandwiches and smoothies, and cleaning up.

“She was terminated for drinking a smoothie without paying. The manager called this employee - not my client - into the office of the Loss Prevention Officer and accused the employee of stealing cash and other items. The employee said that she had never stolen anything. They then told her they knew she once drank a smoothie and didn’t pay. She admitted she had once tasted a smoothie and poured it out but that was because the smoothie didn’t taste right. This employee was then told that if she wrote a statement admitting to drinking the smoothie they would help her keep her job. She agreed and as soon as she signed the statement, she was terminated on the spot.”

A few months after this incident, Broslavsky’s client became pregnant. Initially, Broslavsky says, she was afraid to tell her boss, concerned that the previous termination had been because of her coworker’s pregnancy. Eventually, however, she had to disclose her pregnancy. When she was around six months pregnant, she was allegedly taken into the Loss Prevention Officer’s office and accused of taking drugs.

“They wanted her to sign a statement that she took drugs but she refused, saying she did not use drugs and especially had not done so while she was pregnant,” Broslavsky says. “Even though she refused to sign the statement, she offered to take a drug test but they said no to the test. They continued to try to convince her to sign the statement and she continued to refuse, so they sent her home, suspended her and told her she’d be investigated.”

According to Broslavsky, a week after her suspension, his client phoned her employers and was told she was still under investigation. She then went back to the store and was allegedly told she was fired for creating a hostile work environment. She very quickly found a lawyer and filed a lawsuit alleging wrongful termination against her employers. Broslavsky says that the lawsuit is still in the early stages and he has witnesses who will testify his client was fired for being pregnant.

Unfortunately, Broslavsky also says pregnancy discrimination complaints are not rare. In fact, he’s working on other cases alleging pregnancy discrimination. One positive is that if there is some evidence someone was fired for pregnancy, the burden is on the employer to prove there was another reason for the firing.

It is important for employees to remember that just because they work in an at-will state, that does not mean their employer can fire them for discriminatory reasons. In such cases, lawsuits can be filed against employers alleging the termination violates employment laws.

Broslavsky’s client is seeking damages for lost income, wages and emotional distress. Given the circumstances of her case, she is not seeking reinstatement to her job.

California Labor Lawsuits and Settlements: From Apple to Janitorial

Sacramento, CA If this past week is anything to go by, June is shaping up to be a busy month for California labor law violations. A judge ruled that a class-action lawsuit filed by Apple employees regarding bag searches and “personal technology checks” can proceed, and two janitorial companies were fined for several wage violations, just to name a few.

The Apple lawsuit was filed last year. Apple requested the lawsuit be thrown out, but last week US District Judge William Alsup said a trial would be helpful to learn more about the nature of the employee searches, according to gigaom.com. The former Apple employees allege they waited for up to 30 minutes a day without pay to have managers search their bags for stolen merchandise - whenever they clocked out for lunch and at the end of their shift. Apple managers called the searches “Daily Downloads,” which also included “personal technology checks,” whereby managers compare employees’ Apple device serial numbers to a recorded list. Apple said the search is optional for its 26,000 retail staff, meaning they don’t need to bring a bag to work. Judge Alsup didn’t see it that way, pointing out that “Apple employees may need to bring a bag to work for reasons they cannot control, such as the need for medication, feminine hygiene products, or disability accommodations,” as detailed by gigaom.com.

Two janitorial companies, NLP Janitorial and Coast to Coast West, were slapped with more than $1.5 million in citations by the California Labor Commissioner for allegedly engaging in multiple wage violations, including failure to provide rest or meal breaks, or pay minimum wage or overtime wages, and misclassifying 52 workers as independent contractors. In a news release, Labor Commissioner Julie Su said, “There is a high cost to unfair competition, and these 52 workers bore the brunt of it when their earned wages were stolen from them. Honest janitorial employers struggling to compete against scofflaws also pay.” The two janitorial companies compete for cleaning services to hotels, resorts, theater chains and restaurants.

California labor law settlements

And plaintiffs who filed an overtime class-action lawsuit against Compass Health Inc., asked a California federal judge to grant final approval of a $1.1 million settlement. The proposal would require Compass to pay up to $700,500 to about 2,500 current and former hourly nonexempt employees who worked for the group in California from March 29, 2009 until January 6, 2014.

A $4.75 million California labor law settlement was reached by Universal Alloy Corp. (UAC), a large maker of alloys for the airline industry, based in Anaheim. Plaintiffs in the class-action lawsuit alleged that UAC violated the labor laws regarding overtime and minimum wage payments. The manufacturer was accused of paying factory employees only according to their scheduled shift hours, rather than hours actually worked. Further, the company failed to add bonuses to regular rates of pay, which resulted in overtime miscalculations. A total of 770 class members will share in the settlement.

To avoid stiff penalties, California employers have been advised by the Office of the Labor Commissioner and Labor Law attorneys to prepare for the minimum wage hike this July - it will increase one dollar to $9 per hour.

Pier 1 Imports Faces California Labor Lawsuit

San Jose, CA Pier 1 Imports faces a California labor lawsuit alleging pregnancy discrimination on the part of the retailer. The class-action discrimination lawsuit was reportedly filed after the plaintiff was forced into maternity leave before her due date. According to reports, pregnancy protections are offered under California labor law, but many states do not have the same protections for pregnant employees.

The lawsuit (case number 1-14-CV-263883) was filed by Kimberly Erin Caselman, who alleges she was denied reasonable accommodations for her pregnancy. Caselman further alleges she was placed on involuntary leave due to her pregnancy. According to the Legal Aid Society, Employment Law Center (4/16/14), Caselman informed her employer in November 2013 that her doctor required her to lift no more than 15 pounds during her pregnancy. She was also told she should not climb ladders during the pregnancy.

Pier 1 reportedly has a “light duty” policy during which women who have pregnancy-related conditions are put on light duty for up to eight weeks. When those eight weeks are up, they are then placed on unpaid pregnancy leave if continued accommodations are necessary.

Caselman was placed on eight-week light duty, which ended on January 16, 2014. She was then put on unpaid pregnancy leave, which is set to expire in May, before her July due date. In other words, according to the lawsuit, Caselman is expected back at work from her maternity leave before she has her baby.

According to Legal Aid Society, Caselman was able to fulfill her job requirements while on light duty, but because the eight weeks of light duty expired, was forced into unpaid maternity while still able to work. This, attorneys argue, is a violation of labor laws requiring employers to make reasonable accommodation for pregnant women.

Under California Law, pregnant employees cannot be forced into involuntary leave. Furthermore, employers must make reasonable accommodation for pregnant women. Not all states have these requirements, which is why a federal bill, the Pregnant Workers Fairness Act, to extend such protections across the US, is pending. The Pregnant Workers Fairness Act would address loopholes that have allowed employers to fire pregnant women, rather than make reasonable accommodations for them. Because of those loopholes, the courts have sided with employers.

For example, according to the National Women’s Law Center Fact Sheet on Pregnant Workers (online at nwlc.org), some courts have required women making a pregnancy discrimination claim to prove that a non-pregnant employee with nearly identical symptoms as her was treated better by the employer.

For now, however, pregnant employees in California are offered protections under the law and can file a lawsuit if employers fail to make reasonable accommodation for their pregnancy and/or force their pregnant employee into unpaid leave. Caselman’s lawsuit seeks to represent female employees who are or have been forced to take unpaid leave from their employment after eight weeks of light duty.

Former US Marine Wrongfully Terminated from California 7-Eleven Store

Sun Valley, CA It’s sad enough that a former US Marine works at a 7-Eleven convenience store because it’s the only place that offered graveyard shift - since returning from Afghanistan, Christopher hasn’t been able to sleep nights. But wrongful termination in this situation is an outrageous violation of the California labor law.

Christopher says his former employer had violated California labor codes on a number of issues, including California overtime.

“Even though I was only paid $8 an hour, I took the job because it was night shift,” says Christopher. “When I first started, the 7-Eleven franchise owner asked me to promote their grand opening: I have a lot of ex-Marine and LAPD buddies so I was able to bring in a lot of business. I photocopied flyers and passed them around in my spare time…”

Christopher wasn’t paid to promote the store and he never asked for overtime pay - he was already working 40 hours a week. Things began to go sideways when his employer had a problem with the method of payroll and decided to go the paperless route. Christopher had two choices: he could have direct deposit or have his paychecks added to a debit card. He chose the latter but more than a month went by without getting paid.

“I was sinking financially and my bills were overdue,” Christopher explains. “Although I get benefits from the VA, it isn’t enough to cover my expenses so I was getting concerned. I had to borrow $80 from my employer, until they got payroll sorted out. Meanwhile, they owed me almost 50 hours of overtime and this time I asked for it.”

But the owners flat-out refused to pay overtime. Christopher says that the owners watch their staff on surveillance videos after their shifts are over and critique you, so everyone’s overtime is also on video. Christopher is certain that he was fired because he stood up for his rights and questioned the overtime issue.

“The owner didn’t have my last check upon termination, which is another violation of the California labor code,” says Christopher. “When I asked her why I was fired, she said that I was still under the 90-day probationary period and she didn’t have to give me a reason. I bent over backwards for her, all for $8 per hour.

“Talk about a hypocrite! This woman told customers over and over that she treats everyone like a family member but we were all treated like lackeys. I am aware that in her country they have a caste society and I saw this played out. And they never paid employees while training, which meant they got hours and hours of free labor - trainees had to haul merchandise off the trucks and stock the shelves. It was also a toxic work environment: If something goes wrong they would reprimand you but I always thought that making mistakes is part of the learning process.”

Christopher called the 7-Eleven corporate franchise office but didn’t get anywhere. He told them that his employer had violated several California labor laws, including his wrongful termination, but he never got a return call. “A few weeks later I called again. The HR woman said that they called my employer and it was taken care of,” he says. “Negative.”

Interestingly, one reason Christopher worked overtime was because the store was selling expired food and he had to re-label the expiration dates!

“They have a lot of condiments for hot dogs etc. with expiration dates of two days,” Christopher explains. “When these dates had expired, we had to re-label them - adding four days. As well, the owner would take off the expiration dates of turkey and tuna sandwiches and give them to the homeless shelter. Rather than throw them out, she had a tax write-off. Same went for donuts and pastries.”

Makes you think twice about buying sandwiches at a 7-Eleven, but this isn’t necessarily common practice - the 7-Eleven stores are franchises. Christopher might want to phone the 7-Eleven corporate office: Besides violating labor laws, this store might get slapped with violations from the Health Department.

Best Buy Motion to Dismiss Denied in California Labor Lawsuit

Los Angeles, CA Best Buy, which finds itself the defendant in a California labor lawsuit, has had its motion to dismiss said lawsuit denied. The lawsuit, which alleges violations of federal and California labor law, claims plaintiffs were misclassified as exempt from overtime pay. The judge, in ruling on the California labor law motion to dismiss, found that it was inappropriate to dismiss the lawsuit at this time.

The lawsuit (case number SACV 12-1377 AG [ANx], in the U.S. District Court, Central District of California) alleged plaintiffs Kurt Swanson and Tawny Perez were assistant managers at Best Buy and were classified as exempt from overtime pay, according to court documents. The lawsuit alleges that although the plaintiffs were involved in managerial activities, they were also regularly involved in non-managerial activities including, “selling product, organizing shelves, and unloading inventory from trucks alongside other employees.”

Best Buy filed a motion to dismiss the lawsuit, arguing that the plaintiffs’ testimony established their exemption from overtime pay requirements. The judge rejected the motion to dismiss, however, noting that “a reasonable juror could find that both Swanson and Perez were not ‘primarily engaged’ in duties exempt from the overtime requirements.”

Under California law, a person is exempt from overtime pay if he or she meets administrative or executive requirements. Included in those are managing a “customarily recognized department or subdivision,” regularly directing the work of two or more other employees, having the authority to hire or fire employees, and primarily performing duties that meet the exemption test. Such exempt duties include training employees, directing employees, handling employee complaints and planning work.

According to Swanson’s testimony, he spent approximately 70 percent of his time in managerial duties, which would exempt him from overtime pay. But the judge found that there was some overlap between Swanson’s time working in exempt and non-exempt activities, such as when as a sales floor leader he would organize shelves or sell merchandise. The judge further noted that although Best Buy recognized the time Swanson spent selling merchandise as a non-exempt activity, it did not record his time in other non-exempt activities.

For employees to be exempt from overtime pay, they must meet the administrative or executive requirements. It is not enough that they be given a managerial job title or even that they spend some time involved in managerial activities. To be exempt, they must spend more than half their time involved in managerial or executive activities.