"Wrongful Termination Claims May Lead to Viable Wage and Hour Claims," Says California Labor Law Attorney

Oakland, CA "People most often call us when they have been terminated from their jobs," says employment lawyer Leonard Emma with The Law Office of Randall Crane. "While they may want to sue their employer for wrongful termination, they may not have a viable legal claim. So, in addition to addressing termination, we also evaluate cases for other potential California labor law violations."

If you have been terminated from your job or if your relationship with your employer is rocky, you may feel wronged and consult with an attorney. Emma actively litigates such cases but also investigates other issues such as wage and hour violations and independent contractor misclassification.

"It is important to consult with an attorney because the law isn't always black and white, and for every rule, there is an exception, says Emma. "Terminations are emotional and almost always seem unfair. However, we can often achieve better results for our clients by also asserting wage and hour violations along with wrongful termination claims."

Many people aren't aware of the kinds of claims they may have and there are a lot of "labor law myths." For example, you may be under the impression that your employer cannot terminate you without cause or without a written explanation. This is not true. In California and most other states, workers do not have a right to continued employment. Employees may be terminated at any time and for any reason or no reason??"so long as the reason is not an illegal one (e.g., based on race, gender, religion, etc.).

"When someone calls in with a potential wrongful termination claim, we investigate the termination and also look into other issues, such as independent contractor misclassification," says Emma. "On the surface, the worker may not appear to be an employee??"she receives an IRS Form 1099, she has entered into an 'independent contractor agreement,' and she pays for her own business expenses. However, she may not fully appreciate the implications of the employer 'classifying' her as an independent contractor instead of an employee." If she is misclassified, she may be owed a lot of money for wage and hour violations such as unpaid overtime, missed meal and rest breaks, and reimbursement of business expenses.

"In California and many other states, it is presumed that workers are employees and not independent contractors," says Emma. "The burden is on the employer to demonstrate that the worker is properly classified as an independent contractor." Ultimately, independent contractor misclassification comes down to one thing??"the degree to which the employer "controls" the employee. The greater the control, the more likely the worker is an employee. "Once a worker demonstrates that she has been improperly classified as an independent contractor, a whole host of labor laws and employee protections are implicated," says Emma.

Perhaps you were hired (and fired) as an independent contractor and haven't been paid overtime. If your employer maintained tight control over you, an experienced employment attorney might determine that you are not really independent. Perhaps you have been missing breaks or working through lunch…

Some employers classify a significant portion of their workforce as independent contractors to reduce overhead and provide greater flexibility. "When independent contractors work alongside employees and do the same work that employee workers do, that raises a red flag," says Emma. "There are many other factors to consider, such as whether the employer provides training and whether the position is temporary or ongoing." It is therefore wise to consult with a lawyer if you think you may be misclassified.

Independent contractor misclassification persists in all industries and courts have found the following workers to be employees: taxi cab drivers, truck drivers, agriculture workers, exotic dancers, cable installers and service industry workers, among many other types of workers. Ultimately, the determination is individualized and rests on the facts of the case.

"Workers who come into our office are frequently unsatisfied with their wages," adds Emma. "In many cases, they have a document stating they are an independent contractor." By classifying its workers as an independent contractor, the employer avoids minimum wage and overtime requirements, the meal and rest break requirements, prompt payment of wages, and various penalties for violating these laws. "One of the chief complaints from individuals classified as independent contractors is that they are not paid promptly for work performed."

How can independent contractors determine whether they have enough damages to justify going forward with a lawsuit? Do they need to find co-workers with similar issues to form a class action? (Incidentally, Emma says the independent contractor misclassification is the type of case that could make a class action.)

"Don't worry about evaluating your damages or trying to assemble a group of co-workers or witnesses," Emma explains. "The first step is to meet with an experienced employment attorney to discuss your individual situation." In some cases, individual damages are not that great; in other cases they can be substantial. "Your lawyer will help you value your case and determine if it should be filed as a class action." Most lawyers provide a free initial consultation.


Leonard Emma is an employment attorney with The Law Office of Randall Crane in Oakland, California. .

Was Worker's Death Due to Ignorance of California Labor Laws?

San Francisco, CA The very premise of California labor law dictates a number of assumptions: that workers will be paid fairly, that they will be properly trained, and that they ultimately have a safe environment in which to work. The latter tenet appears to have been lacking in 2008 when a young mother met a horrible death at a California printing plant.

Margarita Mojica was 26 at the time of her death two years ago when she became entrapped in a box creasing and cutting machine. She was 17 weeks pregnant at the time with her second child.

California labor code, as with many federal statutes, dictates not only the requirement that an employer provide a safe work environment, but also that a worker has a right to protest if he or she feels at any time in danger while on the job.

It is not clear if the victim was even aware of the potential for disaster while simply doing her job.

According to the October 19th issue of the San Francisco Chronicle, the Oakland wife and mother of a young daughter was preparing a box creasing and cutting machine to start a job at the facility to replace a cutting die. According to prosecutors she was leaning into the machine when it suddenly activated and closed like a giant clamshell around her.

It is alleged that the owners of Digital Pre-Press International (DPI) of San Francisco were employing a previously owned cutting and creasing machine originally purchased in 2003. It has been reported that workers at some juncture asked to have a safety bar removed from the machine to allow for the handling of thicker cardboard. Investigators say the safety bar was not reinstalled.

While it is unclear if the accident would have been prevented had the safety bar been in place, there are a number of allegations that suggest workers at the facility were not properly schooled in safety protocols according to the tenets of California and labor law.

Regulators cited DPI on two previous occasions, in 1998 and again in 2001, for failing to maintain a worker safety program. The owner of DPI, Sanjay Sakhuja, is reported to have communicated to regulators that he had a training program in place by 2002; and an insurance inspection in 2007 found no problems with the machines at the facility.

However, following the tragic death of Mojica, state regulators under California labor employment law issued no fewer than 14 citations against DPI for not training workers properly. While the plant was reported to have a written safety program, workers told regulators they were never instructed on machine safety.

Sakhuja, along with pressroom manager Alick Yeung, have each been charged with manslaughter and willful violation of California state labor laws. A wrongful death civil suit has since been settled, according to The Chronicle. The value of the settlement was reported to be $6 million.

California Labor Law Requires That Employees Are Reimbursed for Mileage and More

San Dimas, CA: "Events at work escalated yesterday when my boss refused to reimburse me for mileage and other expenses," says Jannise, a commissioned sales rep with Specialty Apparel at Unifirst Corporation." If this isn't a California labor law case, I don't know what is."

Jannise says that refusing to pay her expenses is just one tactic her employers are using so that she will eventually quit and they won't have to pay unemployment benefits. She has also been dealing with harassment, including being accused of lying and cheating??"another violation of the California labor code??"for well over a year. "I can sell ice cubes to Eskimos but there isn't enough money to keep me here," she says.

A hostile work environment has taken its toll on her. "I meet their demands and gather documentation to prove I am not lying, but I still have to get my work done," says Jannise, who is on the verge of crying. "Now I work 60??"70 hours a week, including all the time it takes to defend myself. I can hardly think straight; I'm sick to my stomach and can't even eat or sleep properly.

"My bosses have been misappropriating my commissions by listing them under general sales and other names," adds Jannise. "Accounts that I brought in weren't even listed in my name. I eventually got that issue cleared up, but later found out that I am not alone and sales reps in the Northern California offices are getting ripped off. Not only are we not getting our credits due, it looks like we aren't doing anything, which has created an atmosphere of harassment and retaliation. I know that my bosses are trying to prove that I am lying on my reports, which I am not.

"I am paid a base salary and commission. This past year, after they got their hands out of my pockets, I went to 93 percent quota while the other reps in my office are about 10??"20 percent (110 percent gets you the President's Club). I brought the company new business from San Jose to San Diego. I am good but it doesn't matter??"I have a target on my back.

"I have worked here for three-and-a-half years and never has my expense report been sent back or denied, and my mileage was always covered. I turned in my mileage expense report and a dinner expense in September and they denied it: I drove to Palm Springs for new business but they said they didn't want business there (which was an about-face) and then they put me under investigation. They said I was lying.

"I believe they are using these tactics so I will eventually quit, because they have no grounds to fire me. Even though California is an "at will employment" state, I could apply for unemployment if they fired me but they don't want to pay for that."

Jannise is correct??"according to the California Labor Code §2802, California employers are required to reimburse their employees for expenses, including mileage expenses, incurred in the course of employment. This requirement also applies to commissioned sales reps. Commonly reimbursed business-related expenses incurred by sales persons include:

- training and seminar costs
- mileage
- cell phone expenses
- telephone charges
- postage and other office supply expenses
- advertising costs
- subscriptions
- business lunches
- costs associated with transaction errors; and
- costs to settle disputes with customers

If an employer fails to reimburse the employee, the employer may be held responsible for the employee's out-of-pocket costs plus interest from the date the employee incurred the expense as well as the employee's legal fees and costs to collect the un-reimbursed expenses. As for as the other allegations, Jannise may not have to deal with a hostile work environment for much longer??"she is currently looking for another job, and an attorney.

California Labor Law: Misclassified Independent Contractors

San Francisco, CA Employers should think twice before misclassifying employees as independent contractors to avoid paying employee benefits, overtime, meal compensation and business-related expenses under California labor law. On July 13, 2010, the 9th US Circuit Court of Appeals held that employers cannot use choice-of-law contracts to avoid California labor regulations.

By classifying their employees as independent contractors, employers can also avoid payments such as payroll taxes, workers' compensation insurance, unemployment insurance, disability insurance, social security and even minimum wage. And many employers get away with misclassifying employees because there is no specific definition of the term "independent contractor."

According to the California's Department of Industrial Relations (DLSE), "One must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor. In handling a matter where employment status is an issue, that is, employee or independent contractor, DLSE starts with the presumption that the worker is an employee."

That is exactly what happened this week when the court held that, although workplace contracts may be subject to out-of-state law, actual workplace terms and conditions affecting workers in California are governed by California statutes.

The decision stemmed from three California truck workers who said they were improperly classified as independent contractors and denied employee benefits, including overtime, business-related expenses and meal compensation. Eagle Freight Systems (EGL) required the workers to sign contracts acknowledging their status as independent contractors subject to the labor laws of Texas. California's multi-faceted test of employment, however, showed an employment relationship between the drivers and EGL. As well, the Internal Revenue Service (EGL's request) and the Employment Development Department of California (plaintiff Mohit Narayan's request) determined that Narayan was an employee for federal tax purposes.

EGL might have considered a similar case in 2008, where FedEx settled a California labor lawsuit and agreed to pay $26.8M in a worker classification dispute. The case originated in 1999 when employees of RPS (later to become FedEx Ground) claimed lost overtime and expense reimbursements because of their classification as independent contractors. Critics said the settlement showed that the drivers proved their case in California.

Two years earlier a small courier business, JKH Enterprises, had reclassified its drivers as independent contractors, which resulted in a penalty assessment of $1,000 per worker. According to the DLSE, "JKH unsuccessfully challenged the hearing officer's decision …and the decision is now final and authority for future enforcement actions by the Labor Commissioner and private parties.

"All employers are urged to be aware of this important decision and the myriad consequences of misclassification of employees including:

• Stop orders and penalty assessments pursuant to Labor Code section 3710.1;
• Liability for overtime premium, meal period pay, and other remedies available to employees under the Labor Code and Orders of the Industrial Welfare Commission;
• Exposure for tort liability for injuries suffered by employees when workers compensation insurance is not secured (LC section 3706);
• Exposure for unfair business practices (B&P section 17200);
• Tax liability and penalties;
• Criminal liability (LC section 3700.5)

"All California businesses that have, or are considering, utilizing independent contractors to regularly perform work that is integral to the business of the company, should both seek qualified legal advice and carefully review the JKH decision."

Did EGL take into consideration the FedEx and JKH settlements?

California Labor Law, Discrimination and Permatemps

San Diego, CA In 2006 Sagun was hired as a chemist by a large corporation and was told that after 6 months, his temporary position would change to full-time. But more than two years later, Sagun was still a 'permatemp', whose rights are murky when it comes to the California labor law. But Sagun also believes he was racially discriminated against, and the California state labor law is clearly opposed to any form of discrimination.

"For the first 6 months I was temporarily employed, I didn't get any benefits at all, just a salary for the days worked," says Sagun. " After 6 months I asked my supervisor about my employment status??"I was worried about future work??"and she told me that I would get paid as a temp until I was hired full-time, which would happen within a year.

Instead, I didn't get any full-time job offers from that company but after the year I was offered a job in another department, same company. My supervisors and the head of the department asked me not to transfer because they said they needed me and I was going to get full time status immediately. It was also discussed with the director of HR. I did not accept the offer to transfer because I was asked to stay in my old position. But they didn't hire me full time??"and I don't think they had any intention of doing so.

I worked as a permatemp for two years and two months, without any benefits. I didn't have health insurance; I never received vacation pay and I never received sick pay or 401K. As well, someone else in the company was in the same situation??"he was from China??"but he eventually got full time after working there for about two years.

The promise they made to hire me full-time was a verbal offer; they said if I agreed, they would write up a contract. My complaint is that I was kept as a temp employee for two years and during this time they hired about 6 other scientists, all Americans. I believe I was discriminated against because of my race??"I am East Indian. I became a US citizen in December 2006 but it didn't seem to make any difference. I was fired July 17th, 2008 without any reason. They just said my temporary employment had ended.

I have two complaints: the permatemp problem and the discrimination issue. I filed a complaint with the California Labor Board but they asked me to contact the Fair Employment and Housing department because the labor board doesn't handle racial discrimination cases. Instead I contacted a lawyer and I am in the process of gathering all my documents including my initial offer from the company, my performance reviews and my stock options--which they offered in March, 2008. I signed the stock option papers but I don't understand how I can get stock options when I was a temp.

My lawyer is currently reviewing everything and will get back to me. I am hopeful that if I qualify for a lawsuit, I can get compensated for all the benefits I was denied for more than two years."

Permatemp lawsuits
Sagun and countless other people like him are often hired by companies as "permatemps" to avoid paying them health benefits. But is Sagun's employer breaking the law by keeping him as a temp for more than two years?

If the employer is looking to class people as "temporary," in order to avoid paying benefits or compensation, yet otherwise treats the employees as full time employees, they may be in violation of the California labor law.

Sagun's issue reflects the most abusive permatemp employment situation-- when a worker classified as temporary works alongside regular employees doing similar work for a long period, usually without comparable benefits. By claiming the employee as temporary, the employer avoids paying for benefits and possibly pays a lower hourly wage. The employer can also benefit because it has no direct responsibility to the employee. Permatemp employees such as Sagun can be fired or laid off at any time, as they have no career service protection or seniority. Add to that the possibility of racial discrimination…

Clearly, Sagun was exploited by being denied the wages, benefits, and employment rights enjoyed by other employees. He likely has a case against his employer: class action lawsuits have been decided against similar companies that generally involve violation of ordinances or rules limiting the length of service of such workers. Two California labor law cases address the issues of public employees who were improperly considered "temporary" when they were actually employed as regular, permanent employees. The class action lawsuits involve the Los Angeles County Fire Department and the employment practices of the Metropolitan Water District.

And in October 2004 an opinion from the US Department of Labor said "many temps can be counted as part of the employer's workforce in deciding if the Family Medical Leave Act (FMLA) applies to that employer." The opinion says "routine temps," who have a "continuing relationship" to the employer should be counted in determining whether the employer has the minimum 50 employees necessary to qualify for the FMLA: Sagun clearly qualifies.