Class Action, Discrimination, WalMart

DOES AMERICA LOVE WALMART OR HATE IT?

Undoubtedly, some Americans love WalMart while others have a strong dislike for it.  Many shoppers love the low prices WalMart offers.  On the other hand, labor unions have attacked WalMart repeatedly for fighting efforts to unionize it.  In fact, many employees have sued WalMart because of claimed unfair treatment.  Some of those cases are described below.

Recently in the news, Saturday Night Live actor, Tracy Morgan, sued WalMart because one of its trucks had hit Morgan’s limousine.  The crash killed fellow comedian James McNair.  Morgan suffered serious bodily injury.  Apparently, the WalMart driver, Kevin Roper, had been driving for more than 24 hours consecutively.  Morgan claimed that driving for such a long period of time was negligent and that WalMart knew of that negligent behavior.

Although not an accident case, WalMart settled, in 2009, a case filed by potential driver applicants for $17.5 Million.  (Nelson v. WalMart.)  The applicants claimed that WalMart had denied them positions in the company because they were African-American.  They, and the other applicants, had been required to provide credit ratings.  Apparently, those ratings denied African-Americans positions as  drivers more routinely than non-African-Americans.

In California, twenty-thousand WalMart cashiers claimed that they should have been provided seats to sit on during their shifts.  WalMart appealed after a federal judge certified the case. The parties are now waiting for the Ninth Circuit to decide whether the law in California requires WalMart to provide those seats.  That pending case is: Brown v. Wal-Mart Stores, Inc.

Another California case, and probably the most significant case involving WalMart, is WalMart v. Dukes.  The Plaintiff, Dukes, was a female employee.  She said that WalMart had wrongfully denied her promotions because of her gender.  She alleged that WalMart had an institutional bias against women.  Statistically, WalMart’s labor force was made up of approximately 70% women, while only about 30% of its managers were women.  Regardless, the United States Supreme Court ruled that the case could not proceed as a class action on behalf of 1.5 million women.  According to the Supreme Court, WalMart store managers had much discretion in determining the amount of money each employee could earn and the criterion used to promote employees.  Because of that discretion, the managers had likely decided to promote or not to promote  women employees for many various reasons, depending on the circumstances.  Thus, no single reason for not promoting women could be consistently applied throughout all the WalMart stores, and, according to the Court, the case could not be certified as a class action because the reasons for not promoting women would vary too much.

Later, the potential California class members tried to certify a much small class that was only made up of female employees in California, rather than employees from across the country.  The federal judge denied certification again and cited the Supreme Court holding in Dukes to support his decision.  Essentially, the Court said that the class, even though smaller, still suffered from the same problem.  There was no common reason for denying women promotions amongst all the stores in California.  The Court denied certification even though it said that the employees “had amassed substantial evidence of discrimination against women that occurred at Wal-Mart stores”.  Regardless, that was not enough to allow Dukes to represent the entire class against WalMart.  Presumably, the female employees would need to file each of their cases separately.

 

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Discrimination, Harassment

UNBELIEVABLE SEXUAL HARASSMENT CASES

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Sexual harassment is a bad thing and certain types of work place situations are clearly intolerable.  On the other hand, the complaining employee can abuse the process.  Courts try to balance fairness to both the employer and employee.  The cases described below illustrate how the Courts try to balance the fairness.  Notice that in two of the three cases that the appellate court reversed the trial court’s dismissal, even though the unfairness of the situation appears to be obvious.

Sometimes the biggest battles fought in sexual harassment cases are over what evidence the court will allow to be admitted in the trial. In Pantoja v. Anton, the trial court did not allow me too evidence. (Pantoja v. Anton, (2011) 198 Cal.App.4th 87.)  Me too evidence is evidence of sexual harassment that happened to employees other than the one who filed the lawsuit.  Pantoja worked for Anton.  She said that he frequently called her a “bitch”, “stupid bitch” and “f****** bitch”.  He flew off the handle regularly and used those swear words.  Other female employees said they heard him use those words, saw him get mad regularly, and were called those things too.  Anton admitted that he got mad and swore, but he said that he got mad at both men and women, swore at both sexes, and cussed at the situation but not at people.  The trial court dismissed Pantoja’s case, but the appellate court reversed saying that the trial court should have allowed Pantoja to use the me too testimony of other female employees.

Harassing language, by itself, may not create a hostile work environment.  Sometimes, an unusual employment situation may allow harassing language in the work place, as happened on the set of the famous TV show “Friends”.  (Lyle v. Warner Bros. Television Productions, 38 Cal4th 264.)  Before Lyle took a job on the crew of “Friends”, she had been warned that the writers creatively used vulgar, sex based language to help them write scripts.  They openly discussed “blowjobs”, described the types of women they liked to have sex with, drew pictures of naked women, simulate masturbation, described how they would have sex with female caste members, etc.  However, neither the foul language nor unseemly acts were directed toward Lyle.  She did not complain about the language or behavior either.  The California Supreme Court said that Lyle had no claim for sexual harassment because she knew of the work atmosphere before starting the job, it was not directed at her, and the writers used the vulgar behavior creatively.

In contrast, similar acts and language in a different context certainly can be sexual harassment. Reeves was the only women employee who worked with 6 other male employees on the sales floor of the shipping company, C.H. Robinson Worldwide, Inc.  (Reeves v. C.H. Robinson Worldwide, Inc., (11th Cir. 2010) 594 F.3d 798.)  The sales men swore and talked vulgarly.  They constantly said things in front of Reeves like: bitch, f*** that bitch, cunt, f***, and whore.  They discussed the size of women’s breasts, masturbation, bestiality, etc.  They described other women as whores and bitches.  There was computer porn in the work place.  Reeves complained about hearing and seeing these things daily.  The trial court dismissed Reeves’ case because it was not directed at her, but the appellate court said that even though the language and acts were not directed at her, the harassment was so sever and pervasive that it altered the conditions of employment and created a hostile work environment.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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Uncategorized

2014: “The Year of the Minimum Wage!”

Best Employment Attorney Blog

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For the past several months, my blog, emails, Big Blend Magazine articles, radio interviews, Facebook posts, and other modes of communication I use to discuss legal issues have been filled with news about minimum wage.  Of all the hot Employment Law topics, I think minimum wage is the biggest topic now and will remain so throughout 2014.

The big news for Californians is that the state minimum wage will increase from $8 an hour to $9 an hour starting on July 1, 2014.  After that, it will increase another dollar to $10 per hour on January 1, 2016.

Most recently in the news, Los Angeles is poised to pass a minimum wage increase to $15.37 per hour for hotel workers who work in a business zone around the airport (LAX).  (http://www.huffingtonpost.com/2014/01/14/la-highest-minimum-wage-hotel_n_4590136.html)  In fact, the Los Angeles City Council wants to make that minimum wage the law for…

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Severance

Negotiating Severance at the End of Employment

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In today’s very mobile economy, most employees work for several employers during their careers.  As one job ends, often employers are open to paying a severance to the departing employee.  The primary reason an employer will offer severance is to thank the departing employee for his or her dedicated service to the business.  In some of those cases, the severance package will be offered at the beginning of employment.  Those types of severance packages may be individual agreements or part of a company written policy.  In other cases, the employer has neither a written nor an unwritten policy but is still willing to offer severance.

Another reason employers offer severance is to buy peace.  Every employer who gives severance will require the employee to sign a release.  In other words, in exchange for the severance money, the employee signs away his or her rights to sue for violations of the law.  Very often in a work place that has no severance policy, an employer will not offer severance.  In those situations, the employee will often need to aggressively demand it.

Our firm regularly negotiates severance packages.  Sometimes, we help employers put together a sensible package and an effective release.  Other times, we negotiate severance for the employee.  In the latter case, our goal is to increase the value of the severance as much as possible.

When negotiating severance for employees, we vary our approach depending on the situation.  In some cases, after discussing the situation with the employee, we take a very aggressive approach.  Some employers may not want to litigate with a good employee who has been recently laid off, and the employer may be willing to increase the value of a severance package to avoid litigation.

In other situations, we decide not to even let the employer know we are involved in a severance negotiation.  If the employee agrees with that approach, we simply advise the employee how to most effectively negotiate a severance package.

Often we take a middle approach.  We advise the employee on how to negotiate a severance, but, later, we enter the negotiations.  Usually the best time to do that is after the employer offers a written release.  Most releases have a paragraph advising the employee to seek legal counsel to review the agreement.  Often in that situation, we review the release and then craft a letter demanding changes to the release.  Many times, one of the changes is a request for more money.

In contrast to employee negotiation concerns, employers often have concerns that are not directly related to a given severance negotiation.  In those cases, we try to subtly steer the course of the severance discussions toward accommodating that concern.

Severance serves many purposes.  It is a way for employers to say thank you, and it can be a way for the employer to buy peace.  At the same time, it can validate an employee’s work and dedication, and it can help ease an employee’s transition from an old job to a new one.  There are many approaches to negotiating severance packages, and each side needs to consider the ramifications of misunderstanding the other sides attitude and posture and pick an approach that will yield the best result under the circumstances.

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Discrimination, Harassment

Discrimination in the Work Place

 

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Workplace discrimination is illegal under both federal and California law.  Congress passed Title VII in 1964.  About 30 years later, the California legislature passed the Fair Employment and Housing Act (FEHA).  It actually combined previous California anti-discrimination laws that predated Title VII.  They both make adverse employment actions (termination, demotion, failure to hire, etc.) illegal when an employer takes the adverse action because the employee is a member of a protected class.    In most cases Title VII and FEHA work together.  In fact, very often an employee can sue under either law.

For the majority of California employees, FEHA provides greater protection than Title VII.  For instance, Title VII only protects the following classes: race, color, national origin, religion, and sex.  In contrast, FEHA has a far greater list of protected classes: Age, Ancestry, Color, Religion, Denial of Family and Medical Care Leave, Disability, Marital Status, Medical Condition, Genetic Information, Military and Veteran Status, National Origin, Race, Sex, Gender, Gender Identity, and Gender Expression, Sexual Orientation.  To be fair, other federal laws protect some of the FEHA classes.  For instance, the ADA is the federal law that protects disabled persons.

Another advantage of FEHA is it does not restrict damages.  Under FEHA, compensatory and punitive damages are unlimited.  Depending on the size of the business, federal law limits them to amounts between $50,000 and $300,000.

FEHA also requires more employers to follow its requirements than does Title VII.  FEHA applies to employers who only have 5 employees.  Harassment laws apply to all employers, even if they only have one employee.  In contrast, Title VII only applies to employers who have 15 or more employees.

Courts decisions cause work place discrimination laws to constantly evolve.  For instance, a series of court cases over the past few decades have broadened and strengthened employer liability for third party discrimination.  Both federal and state laws clearly require employers to protect employees from supervisors and co-workers who discriminate.  On the other hand, over the years, case law has employers must protect its employees from discrimination at the hands of non-employees who interact with employees during the work day.  The cases say that because the employer controls the conditions of work, employers have a duty to protect employees from unwanted discrimination by non-employees.

In other instances, the law has become more restrictive.  For instance, in California the courts have made it harder for employees to sue when an employer may have had a mixed motive for firing an employee.  A mixed motive case is one where the employer has more than one potential reason for terminating, demoting, or taking other adverse action against an employee.  At least one of the reasons is based on discrimination, and at least one is a legitimate business reason for taking the action.  Typically, the employee claims that the employer discriminated against him or her under FEHA, and the employer claims that it had a legitimate, non-discriminatory reason for punishing the employee.  In the past, lawyers who represented employees said that an employee only needed to show that the discriminatory reason was a factor that could have motivated the action.  Now, the California Supreme Court has made clear that the discriminatory reason must be a “substantial” factor that caused the employer to act.  Further, even if the employee proves that discrimination was a substantial factor, the law allows the employer to present facts to show that it still terminated the employee for a non-discriminatory reason.  If an employer can convince a judge or a jury of that, then the employee will not be able to collect compensatory or punitive damages under FEHA.  Injunctive relief and attorneys’ fees are still available though.

Work place discrimination laws are very complicated to apply.  Employers should make sure they have expertise at their disposal to help analyze each situation as it arises.  Employees often need help analyzing the law to understand whether they have suffered discrimination or harassment as those terms are defined under the law.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/
http://twitter.com/#!/WardHeinrichs
www.facebook.com/BackstromandHeinrichs
http://www.linkedin.com/pub/ward-heinrichs/45/806/83b  

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Tips

Employer Required Tip Pools: Are they Legal? How are they taxed?

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Are tip pools legal when required by an employer?  The quick answer to that question is yes.  But under both California law and federal law, the pool must meet certain legal requirements.

As a general rule tips are optional, freely given payments for service above and beyond the cost of the products being sold.  The customer has the complete right to set the amount of the tip and may choose not to tip at all.  The employer should have no say in the amount of the gratuity.

California Labor Code §§350-56 lays the legal foundation for tip pool requirements in California.  The law forbids the employer from taking or sharing in tips (Labor Code §351), and employers must track all tips that they collect for employees (Labor Code §353).  Employer mandated tip pooling is legal, but the house cannot share in the pooling arrangement.  The tip pool must be fair and reasonable.  Only those who are in the chain of service can be in the pool.  For instance, an employer cannot require servers to include cooks and dishwashers in the pool.

Tips are taxable income.  When tips are shared, who must pay the tax?

Technically, all persons who receive tips or a share of the tips must report it as income.  However, a common practice is for the employer to allocate the entire tip to the server who waits on the table.  In that case, even when the server shares the tip, the server is the only person who pays tax on the entire tip.  The employers records do not show any other employees in the service chain as persons who receive tips, even though they actually do in tip pooling arrangements.  Presumably, those employees who share the server’s tip as part of the chain of service escape tax liability because the employer’s records do not show them collecting any tips.  In that case, the server unfairly pays tax on the portion of the tip that he or she did not actually take home.

 

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

 

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Employment Documents

EMPLOYMENT DOCUMENTS: What Employees Can Demand; What Employers Need to Keep

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Three code sections deal with general employment document retention.  They are: Labor Code §§ 226, 432, and 1198.5.  Code section 1198.5 was most recently amended and those amendments give employees more access to documents and require employers to retain more documents.

Labor Code § 432 requires an employer to give to an employee any document about obtaining or holding employment signed by the employee whenever an employee asks for a copy.  Most employers rather not worry about what documents concern “obtaining or holding employment”, and, consequently, they retain all signed documents.  Because the code section does not set a retention time limit, most employers retain those documents indefinitely and turn them over when an employee request all the documents he or she has signed.

Labor Code § 226 requires an employer to maintain wage statements for three years.  (Labor Code § 226(a).)  When an employee makes either a written or oral request to inspect and/or copy employment records, an employer must allow the employee to inspect and copy those records no later than 21 days after the request.  (Labor Code § 226(b and c).)  However, an employer has a duty to allow inspection and copying more quickly if that can be accomplished practically.  (Labor Code § 226(c).)  If the employer fails to respond in a timely manner, then it may be required to pay a $750 fine, costs, and attorneys’ fees.  (Labor Code § 226(f and g).)  If the employer provides copies, then it may charge the employee for the cost of copying the records.

Labor Code § 226(b) allows a current or former employee to “inspect or copy records pertaining to their employment”.  Apparently, under that subsection, an employee has the right to inspect and copy more records than just the wage statements described in Labor Code § 226(a).

Labor Code § 1198.5 requires an employer to keep personnel records for at least three years.  (Labor Code § 1198.5(c)(1).)  The employee must demand to inspect and/or copy in writing.  (Labor Code § 1198.5(b)(2)(A)(i and ii).)  The employee may also demand that the employer provide copies, but the employer can ask to be reimbursed for copying costs.  (Labor Code § 1198.5(b)(1).)  The employer must comply within 30 days.  (Labor Code § 1198.5(b)(1).)  An employer must comply with only one request per year from a former employee.  (Labor Code § 1198.5(d).)  An employer is not required to comply with more than 50 requests per month.  (Labor Code § 1198.5(p).)  Employers with union represented workers may be exempt.  (Labor Code § 1198.5(q).)  Personnel records are broadly defined as records “relating to the employee’s performance or to any grievance concerning the employee.”  (Labor Code § 1198.5(a).)  Certain records are specifically excluded.  (Labor Code § 1198.5(h).)  If the employer fails to respond in a timely manner, then it may be required to pay a $750 fine, costs, and attorneys’ fees.  (Labor Code § 1198.5(k and l).)

Under Labor Code § 1198.5, an employer has fairly broad discretion to determine what to keep in a personnel file.  However, Labor Code §226(b) appears to allow an employee to have access to any records “pertaining to” his or her employment.  Does 226 require an employer to maintain additional records beyond wage statements (Labor Code § 226(a)), signed documents ((Labor Code § 432), and personnel records (Labor Code § 1198.5(a))?  Arguably, it does.  On the other hand, an employer can argue that Labor Code § 226(b) only requires those records that it kept as part of its effort to reasonably comply with Labor Code §§ 226(a)), 432, and 1198.5.

Similarly, if an employee orally requests records under Labor Code § 226(b), will the employer be required to provide all retained documents within 21 days, even personnel documents governed by Labor Code § 1198.5?  Again, the answer is arguably yes.

S. Ward Heinrichs, Esq.
BACKSTROM & HEINRICHS
Attorneys at Law
A Professional Corporation
4565 Ruffner Street, Suite 207
San Diego, CA 92111
(858) 292-0792
(858) 408-7543 (fax)

http://bestemploymentattorneysandiego.com/

http://twitter.com/#!/WardHeinrichs

www.facebook.com/BackstromandHeinrichs

http://www.linkedin.com/pub/ward-heinrichs/45/806/83b

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