Claim Adjusters May Not Be in Good Hands with Allstate

Los Angeles, CA In a case that’s been characterized as wage theft by the plaintiff’s legal team, a California labor lawsuit has been granted favor by the United States Court of Appeals for the Ninth Circuit after the latter determined a class-action lawsuit against Allstate Insurance Company (Allstate) can move forward. The insurance juggernaut had attempted to quash the suit.

Under California and labor law, non-exempt employees are to be paid overtime for any work performed above 40 hours per week or beyond 5 days per week, as well as extra pay for missed meal breaks and rest periods as mandated by the California labor code, if an employee is required to work through a rest period or meal break.

However, according to the California labor lawsuit, policy and protocol observed by Allstate effectively discourages managers from paying overtime, allegedly due to incentives afforded Allstate managers to stay within mandated budgets. Such incentives, according to the lawsuit, included paid bonuses to managers who kept within budgetary parameters.

Plaintiffs claimed that such incentives for managers to stay on budget - not to mention the pursuit of a good performance review that might hinge on a manager’s capacity to stay within budgetary guidelines - dissuaded managers from recording overtime hours.

“The complaint alleges that Allstate’s managers are required to stay within an annual budget that includes overtime compensation, and that the performance evaluations and bonuses paid to managers are dependent on how closely they conform to the budget,” said attorney Alexander R. Wheeler, of the R. Rex Parris Law Firm, which represents the plaintiffs. “This would mean that a manager would have a disincentive to approve and report overtime, the class claims.”

That’s a violation of California labor employment law.

Plaintiffs allege that managers would witness workers performing tasks off the clock and outside of their normal work hours, but make no inquiry as to whether or not overtime was to be requested. The California labor lawsuit also suggests that repeated requests for overtime were seen as a performance issue, rather than incidents that suggested claims adjusters were given too much work to complete within the allotted hours.

Rather than suggest a requisition for overtime, an employee might be counseled as to alternative work methods through better training and increased efficiency in order to avoid overtime hours. However, given the incentives allegedly afforded by the defendant to stay within budget suggests Allstate managers did not have the best interests of their underlings at heart, but rather their own and those of the defendant.

“The potential recovery in this case is expected to be in the hundreds of millions for wage theft by Allstate,” said R. Rex Parris, founding partner of the R. Rex Parris Law Firm. “Casualty adjuster Jack Jimenez brought the suit in 2010 on behalf of any claims adjuster working for the insurer in the state of California since Sept. 29, 2006.”

California state labor laws are clear with regard to the requirement to pay overtime for non-exempt workers. While an employer always has the right to offer training in order to improve efficiency in an effort to avoid overtime, an employer does not have the right to deny an employee overtime pay for extra hours worked, when the overtime was unavoidable.

The case is Jack Jimenez v. Allstate Insurance Company - Case No. 2:10-cv- 10-8486-JAK-FFM, in the United States Court of Appeals for the Ninth Circuit.

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

Personal Attendants Subject to Overtime Pay Violations

Anaheim, CA Maybe it is because they often work alone, in isolation from others in their industry. Maybe it is because they are generally not unionized and sometimes in the country illegally. There are many reasons why people who work as personal attendants might be subject to unpaid overtime, but as of the passing of a new California law, personal attendants must now receive overtime pay.

Not all personal attendants are aware yet of this change in law, and some may still be paid a flat per-day rate, rather than an hourly rate. If so, their employer is violating California labor law, which requires personal attendants be paid hourly. California’s Domestic Worker Bill of Rights (California AB 241) mandates that personal attendants must be paid at least $9 per hour for the first 9 hours of work, and time-and-a-half (equaling a minimum of $13.50) for anything above 9 hours in a day.

Many personal attendants are paid on a flat 24-hour rate of around $100 a day. Some are paid as low as $80 and some make $120. But based on 24 hours of work, that equals only $3.33 an hour up to $5.00 an hour, not even close to the regular minimum wage. In fact, based on the Domestic Worker Bill of Rights, the minimum a personal attendant working 24 hours should be paid is $283.50 a day.

Personal attendants also rarely get paid sick days or paid vacation days and have few protections when it comes to job security or severance.

Unfortunately, personal attendants are often isolated from their colleagues and have no idea what their rights are. If they are in the country illegally, they may be afraid of fighting for their rights. But if they are employed as a personal attendant, they must receive a minimum wage and an overtime wage based on the number of hours they work.

The Domestic Worker Bill of Rights came into effect in January 2014 and will expire on January 1, 2017, unless another statute is enacted. As of January 1, 2015, however, federal laws will protect home care workers by requiring that they receive the federal minimum wage of $7.25 an hour and overtime pay when they work more than 40 hours in a week.

Failure of employers to follow California’s Domestic Worker Bill of Rights can result in a lawsuit being filed.

Former Executive Chef Files Class-Action California Labor Lawsuit

Ventura, CA Given the rigors and requirements of food preparation for a facility as large as a nursing home, it is little wonder that an executive chef puts in long hours to ensure prepared food is safe and palates are satisfied. And yet one California labor lawsuit claims that an executive chef working in the Golden State was improperly misclassified as management and was therefore denied overtime pay, an affront to California labor law.

The lawsuit names Harvest Management Sun LLC (Harvest), an entity that operates a chain of assisted-living and independent-living facilities across the country under the Holiday Retirement banner. The class action was filed by a California man on behalf of any and all employees of Harvest who may have been denied overtime under California and labor law, as well as similar statutes observed by other states and, federally, the Fair Labor Standards Act.

The plaintiff - who was not named in the report - worked as an executive chef at one of Holiday’s independent-living homes in Pinole. The complaint alleges that the position of executive chef was classified as a management position by the defendant, but that the plaintiff had very few managerial responsibilities. The plaintiff alleges that he typically worked more than 50 hours in any given week, but was not paid overtime in accordance with good practice under California and employment law.

The lawsuit, which also affects the company’s Simi Hills facility in the Simi Valley and The Bonaventure located in Ventura, seeks damages for affronts to California labor employment law going back four years in the state; together with similar affronts to federal law under the Fair Labor Standards Act going back two to three years.

The plaintiffs are seeking unspecified damages, back pay for uncompensated overtime hours, as well as attorney’s fees and costs.

Many a California labor lawsuit has taken an employer to task for misclassifying an employee as exempt from claiming overtime due to having management responsibilities, while having few if any real management duties to perform. While some employers appear to misclassify in error, there are many others who undertake the misclassification in an attempt to save money by not paying an employee overtime for work performed beyond the standard 40-hour workweek or eight-hour day, as mandated under California labor law. Managers, who are correctly classified as exempt, are normally paid a higher salary that takes into account the expectation for working longer hours.

The class-action California labor lawsuit was filed earlier this month in US District Court for the Northern District of California.

Builder of New NASA Spacecraft Hit with California Labor Lawsuit

Los Angeles, CA It was just about a month ago that Americans were abuzz over the announcement that crystallizes the next phase of the National Aeronautics and Space Administration’s (NASA) foray into space and, specifically, shuttling astronauts and other support staff to and from the International Space Station. Now, one of two companies chosen by NASA to build transport craft has been hit with a California labor lawsuit.

In fact, according to the Los Angeles Times (8/12/14), there are two lawsuits against Space Exploration Technologies Corp., popularly known as SpaceX. The crux of the matter involves alleged affronts to the California labor code as it relates to missed meal breaks and rest periods, and unpaid wages.

The first California labor lawsuit, filed by two former employees, allege that SpaceX improperly laid off hundreds of employees in late July of this year without benefit of fair notice or compensation.

Then, two days later in Los Angeles County Superior Court, a former tool maker with the upstart manufacturer filed a lawsuit claiming that SpaceX violated various tenets under California labor employment law.

Among them: imposing schedules and workloads that ate into designated meal breaks and rest periods as required under California and labor law; rounding time sheets to the nearest 15-minute increment, potentially cheating an employee out of cumulative wages and potential overtime pay; and that employees were not reimbursed for tools purchased on their own, in order to accomplish tasks required by the company, when SpaceX allegedly failed to provide the necessary tools to complete the work.

Plaintiff Joseph A. Smith asserts issues as defined in the lawsuit date back to August 2010. The California labor lawsuit seeks various damages and penalties, including back pay with interest, and also seeks class-action status on behalf of other hourly employees who may have found themselves in a similar situation.

SpaceX is one of two companies that competed for the hotly contested contracts issued by NASA for the successor to the now-retired Shuttle. The space agency is currently relying on Russian Soyuz craft to carry supplies and relief astronauts to and from the space station. The other successful bidder is Boeing Corp. NASA is hoping to have spacecraft in production and flying by 2017.

This, in spite of a legal challenge to the contract issuance by one of the failed bidders. Florida Today (10/10/14) reports that Sierra Nevada Corp. launched its formal protest 10 days after the NASA press conference to announce the successful bidders, noting that its bid and proposal to build the Dream Chaser mini-shuttle was nearly $1 billion less than the contract submitted by Boeing. Sierra Nevada Corp. has filed a formal protest with the US Government Accountability Office and expects a ruling on or before January 5 of next year.

NASA, after briefly halting work on the projects, quickly resumed the existing contracts as submitted and is continuing work in order to meet a tight timetable in 2017, less than three years away.

It is unclear what role the two recent legal challenges to SpaceX under California and labor law will have on the defendant, NASA or the program going forward. The case is Joseph A. Smith v. Space Exploration Technologies Corp, case number BC554258, in the Superior Court of the State of California, County of Los Angeles.

California Passes New Labor Law

Sacramento, CA With Governor Jerry Brown signing a new California labor law, the state has now addressed issues about California labor issues in the temp industry. Although temps were already covered by some California labor codes, it was not always clear whether the temp agencies or the companies hiring the agencies were responsible for California labor violations.

As of September 28, Assembly Bill 1897 makes client employers responsible when subcontracted agencies violate California labor laws by underpaying their workers, according to The Huffington Post (9/29/14). In other words, if a large company uses a temp agency for staff and the temp agency underpays the workers, the company that hired the temp agency can also be held responsible, and may face fines.

Although temp jobs are often thought of in terms of office personnel, frequently temp workers are used to staff warehouses and food processing plants. These employees may be subject to labor violations including not receiving proper meal and rest breaks, not being paid minimum wage and not being paid overtime. They may also face harsh working conditions and safety hazards.

Large companies do so to keep their costs down because temporary workers tend to cost less than permanent employees. Assembly Bill 1897 does not shift full responsibility for labor violations to the hiring company but requires the hiring company to share liability with the contractor.

This means that the larger companies that staff using outsourcing cannot claim ignorance when their employees are paid less than the minimum wage. It also protects temp workers from filing suit against a temp agency that might, when faced with a suit, declare bankruptcy to avoid paying workers.

“This bill would require a client employer to share with a labor contractor all civil legal responsibility and civil liability for all workers supplied by that labor contractor for the payment of wages and the failure to obtain valid workers’ compensation coverage,” according to the Legislative Counsel's Digest.

The bill defines the client employer as “the business entity that obtains or is provided workers to perform labor within the usual course of business from a labor contractor, except as specified.”

Earlier in September, Governor Brown also signed into law a bill that requires California employers to provide three paid sick days a year, making California only the second state in the US to require sick leave for employees. According to The Sacramento Bee (8/30/14), the sick leave bill does not include in-home caregivers.

Domestic Bill of Rights Meant to Curb California Overtime Pay Abuse

San Francisco, CA It would be prudent to presume an increase and influx in overtime pay lawsuits given the passage of the so-called domestic workers’ bill of rights in California and three other states (federal changes in kind are expected in 2015). Not necessarily because of the law, but primarily due to the possibility and expectation that employers of domestic workers will either ignore the guidelines or simply remain unaware of them.

There’s good reason to think this way. According to Ai-jen Poo, the director of the National Domestic Workers Alliance, most of the labor laws that protect American workers date back to the 1930s. That’s a long time, said Poo, during a recent interview on National Public Radio (NPR, 9/17/14). Even so, said Poo,

Domestic workers have always been around. But their numbers are likely to increase as the baby boomers age and - more affluent than their parents - will choose to remain as long as possible in their homes, rather than give up their independence and move to a nursing home, senior’s residence or assisted care facility. Many of today’s seniors would rather have a domestic worker either visiting their home daily or actually living with them to provide service.

“One of the things that has really been striking to us is the aging of America with people living longer than ever because of advances in healthcare and technologies,” Poo told NPR. “And so the need for care supports and services for our growing aging population is exponentially increasing.”

Similarly, working professionals who can well-afford a live-in nanny or other individual to help with everything from cooking, cleaning, housework and home maintenance, view the domestic worker paradigm with a laissez-fare attitude that’s far removed from the normal employment environment governed by time clocks and employment records.

Little wonder there are so many complaints of in-home overtime violations - especially now that a popular method of compensating an in-home domestic worker, the day rate, has been rendered illegal by AB 241, legislation that came into effect in California at the beginning of the year, with similar bills adopted by three other states.

Domestic workers have been in a no-man’s land for some time

Until now, overtime pay laws did not apply to domestic workers. Now, they do. And yet, there is an expectation that domestic workers who provide services ranging from child care, to elder care, even custodial duties, will continue to be wronged even with the new legislation on the books - partly due to the environment. When a domestic worker performs duties in your home, many engagers don’t view the home as a traditional work environment and thus approach the employer-employee relationship much more casually.

These same engagers wouldn’t think twice about putting in for overtime at their own place of business - or negotiating time off in lieu of other compensation in kind - but expect a domestic worker to stay longer as needed, without any provision for overtime pay at the conclusion of an extended day or workweek.

Engagers of domestic workers also tend to forget that the domestic worker often has a family, with dependents, of his or her own. Tom Ammiano (D-San Francisco), who initially sponsored AB 241, said in a statement that “there’s no recourse if [a domestic worker is] being abused, there’s no place to go,” he said. “If you’re being asked to stay and cheat your own family out of your presence, you’re afraid of losing your job if you don’t.”

Fear of job loss no longer applies, as AB 241 protects that. Still, such treatment provides ample fodder for home care overtime lawsuits.

Domestic workers who have or are currently working within a non-conforming environment can take heart in the fact that AB 241 not only guarantees the rights of domestic workers when it comes to California overtime law and other statutes, but also the right and freedom for a worker who suspects abuse through lack of overtime pay, missed meal breaks or rest periods, to speak up and lodge a complaint without fear of job loss or reprisal.

There is now protection for the domestic worker who suspects that AB 241 is being circumvented by their employer. What’s more, attorneys are willing to take meritorious cases.

A 2012 study by the National Domestic Workers Alliance and Center for Urban Economic Development at the University of Illinois at Chicago found that 67 percent of live-in workers are paid below the minimum wage.

This is what AB 241, and similar statutes in three other states, is meant to curb. There are also federal improvements coming next year. Domestic workers, who suspect in-home care overtime violations and other abuses now curbed by the new law, are encouraged to speak up and seek justice.

California Labor Law: Popular “Day Rate” for Personal Attendants No Longer Legal

Woodland Hills, CA On January 1, 2014, the Domestic Workers Bill of Rights became law in California. The new law changes overtime pay regulations for domestic workers serving as personal attendants. Employers must now pay personal attendants overtime.

The problem is that many employers of personal attendants either are unaware of or refuse to accept this change in overtime laws.

According to Daniel Chaleff, a partner at the employment law firm of Rehwald Glasner & Chaleff, “The Domestic Workers Bill of Rights law requires that caregivers, housekeepers, maids and childcare providers, who work in private households as personal attendants, must be paid a minimum of $9 an hour for the first 9 hours of work, and time-and-a-half - $13.50 - for more than 9 hours worked in a day.

“In my experience, many caretakers of people with disabilities, the elderly, and the sick are being paid under a day rate, for example $80 to $120 per day,” Chaleff says. “Paying personal attendants a day rate is illegal under the new law, which requires employers to pay overtime to personal attendants who work more than nine hours a day.”

As Chaleff notes, at the current minimum wage, a personal attendant working 24 hours in a day must be paid $283.50 per day, well above the typical $80 to $120 day rate.

Domestic workers are employees performing work in someone’s home. They include live-ins and personal attendants. Domestic workers qualify as personal attendants, if they don’t spend more than 20 percent of the total hours worked in a week performing duties other than supervising, feeding and dressing the person cared for. Exceptions to the law may include certain relatives.

Prior to the enacting of the Domestic Workers Bill of Rights, employers were able to use the personal attendant exception to avoid paying their domestic workers overtime. The new law removes that exception and requires employers to pay their personal attendants overtime.

A personal attendant who is not paid for all hours worked, including overtime, can file a lawsuit against his or her employer to recover unpaid wages and overtime. The damages can include reasonable attorney’s fees, associated litigation costs, interest and penalties.

The new law contains a “sunset” provision, which means it is only in effect until January 1, 2017. After that point, the law will be repealed unless another statute is enacted. To determine whether another statute is enacted, the governor will convene a committee - including personal attendants and their employers - to report on the effects of the law.

California Labor Lawsuit Class Members Want Dispute Back in State Court

San Francisco, CA A California labor lawsuit brought against a subsidiary of the giant Starbucks coffee juggernaut and filed originally in state court actually belongs in state court, according to the plaintiffs. The class-action lawsuit against Bay Bread LLC and two other co-defendants involves allegations with regard to missed rest periods and overtime pay with a class of plaintiffs, the majority of whom live in California.

According to court documents, a La Boulange bakery factory and another facility lay at the center of a dispute that also involves temporary workers. According to attorneys representing the class, 99.7 percent of the potential class members live in the state, regardless of whether or not they are temporary or employees that have more permanency.

The lead plaintiffs in the dispute are Norma Serrano and Maria Grande (Serrano et al v. Bay Bread LLC et al, case number 3:14-cv-01087, in the US District Court for the Northern District of California). In their complaint the two California women claim that they worked at a Bay Bread factory in South San Francisco, as well as a bakery in Newark owned by co-defendant Fullbloom Baking. At both locations, according to the plaintiffs, they were denied complete and full wages and adequate rest periods according to California and labor law that would apply to the San Francisco location, at least.

Another co-defendant is Aerotek Inc., a temporary staffing agency. After the California labor employment lawsuit was filed in San Mateo County Superior Court in January, the defendants petitioned to have the lawsuit moved to federal court two months later. They argued that the dispute could exceed $7 million and involve nearly 1,200 class members. Co-defendant Aerotek, the temporary staffing agency, is based in Maryland.

That doesn’t hold water with the plaintiffs, who want the lawsuit moved back to state court.

At issue are the temporary workers who the defendants claim are transient by nature. However, with the vast majority of class members having addresses in California and Bay Bread also headquartered in the state, it would be reasonable to expect that the state of California has jurisdiction.

US District Court Judge Thelton Henderson, the presiding justice in the California and labor law dispute, appears to be aligning himself with the plaintiffs and has challenged the various co-defendants to provide further grounds to support leaving the case in federal court.

“Given that 99.7 percent of [the class members] live here, it’s reasonable to conclude that two-thirds are California citizens,” Judge Henderson is quoted as saying.

According to court documents Bay Bread does business as La Boulange. The latter is a chain of cafes purchased by Starbucks two years ago.

California Labor Law: Settlement with Cheerleaders Announced

Oakland, CA A settlement has been announced in a California labor lawsuit involving the Oakland Raiderettes. The lawsuit, which must still be approved by the courts, has reportedly been settled for around $1.25 million. This settlement is the second victory linked to the lawsuit. In July, the Raiders reportedly announced a change to compensation for their Raiderettes cheerleaders.