Years-Long Fight Between Billionaire Siebel and Former Salesman Receives Jury Verdict

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Tech billionaire Thomas Siebel’s legal battle with a former Massachusetts salesman nears an end with jury’s verdict after four years of litigation. The highly contentious and long legal battle resulted in a jury that found Siebel did not owe Gregg Carman, former salesman, additional pay.

The San Jose jury delivered their verdict against former salesman for C3 loT, Gregg Carman. Carman filed suit claiming that he was shortchanged on commissions. The company was able to convince a majority of the jury that Carman did not have a reasonable expectation of receiving additional commissions totaling several hundred thousand dollars. The claim was defeated under “quantum meruit,” a legal theory presented by Siebel’s legal counsel.

Counterclaims the company made against Carman alleging that he misrepresented the nature of deals with a couple utility companies he closed while on the job and actually owed Siebel’s company around $120,000 were also unanimously rejected by the jury. While the jury did agree that Carman was fired either for complaining about his pay or so the company could avoid paying him additional commissions, they did not agree that he had been wrongfully terminated according to California labor law.

Many companies would have quickly settled this type of claim outside of court or in mediation, but Siebel fought the case vigorously after refusing to pay the compromise amount of $360,000 suggested by Carman. In fact, Siebel has a record of aggressively litigating in his defense. His legal representation stated that it was about the principle for Siebel. He does not settle illegitimate claims for compensation.

Under fiscal year 2014, Carman stood to be provided over $1 million in commissions according to the company’s policy. The deals with the two utility companies were actually closed in FY 2015. Carman was not informed of change to the commission policy for FY 2015 until after the deals closed. The policy change left him with approximately ¼ of what he would have received if the deals closed during the previous fiscal year.

The Defendant convinced the jury that this type of policy change (even their retroactive nature) is standard practice in the industry and that Carman, as an experienced salesman in the industry, should have been understood the situation. Wrongful termination damages are trebled under California law so C3 faced a potential $8 million in damages and attorney fees at trial. The plaintiff and his legal representation did not deny the possibility of an appeal.

If you are struggling to get your employer to fulfill agreed upon payment arrangements or if you have been wrongfully terminated, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Alleged Gender Bias Amid Jones Day Fraternity Culture Leads to Lawsuit

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A former partner at Jones Day sued the firm recently alleging that they treat women as “second class citizens” and indulge in a fraternity culture with rampant gender bias. The gender bias lawsuit was filed in California court and outlines a workplace culture where men are given preferential treatment. The plaintiff further claims that she was fired for speaking out about the situation.

Wendy Moore, attorney and former partner at Jones Day firm, alleged that the firm promotes a “boy’s club” or what she frequently referred to as a fraternity culture. In said fraternity culture, the plaintiff claims that male partners hold the majority of management and other leaderships positions at the firm. She also claimed that male partners (and therefore the majority of the managers and others in leadership positions) provided more support and mentoring for other men at the firm. Women were not offered the same opportunities.

Allegedly, the firm discouraged attorneys from discussing pay rates. The plaintiff also claims that the firm relied on a subjective performance evaluation system the she claims favored male attorneys at the firm. The firm’s pay practices allegedly allowed Jones Day firm to pay females less than their male counterparts.

Moore, plaintiff in the case, claims that speaking about the boys’ club culture and the gender pay inequality led to workplace retaliation. She also claims that her discrimination complaints were not addressed. She claims that the firm eventually terminated her stating they had “cause,” despite the fact that Moore had a stellar client service record as well as recognition from outside sources for her high quality of work.

Moore started working at the firm in early 2013 as a partner – it was a lateral hire. She worked as an equity and executive compensation attorney out of the Jones Day Palo Alto, California office. In 2015, she was promoted to hiring partner for the Silicon Valley and San Francisco offices. She received high praise for recruiting one of the “best classes Jones Day (NorCal) ever had,” according to Moore’s complaint. She claims that despite being a partner at Jones Day, she was regularly paid less than male attorneys at the firm. In fact, according to the complaint, Moore was at one point paid less a male sixth-year associate even though she was a sixth-year partner at the time.

If you have questions regarding a gender bias workplace or if you are experiencing retaliation in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Unequal Pay Suit Against Uber To Be Settled at $10M

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Uber Technologies Inc. agreed to pay a $10 million settlement this month in order to settle an unequal pay suit calling gender and race discrepancies into question. They also agreed to make some changes to their business practices used for evaluating their workers. Together the two stipulations form the basis for their settlement agreement ending a proposed California class action.

The proposed California class action was filed by female software engineers and engineers of color who allege that Uber did not pay them equally. If the settlement is approved, it would offer $23,800 to each of 420 engineers (approximately) included in the class. All were allegedly affected negatively by the company’s discriminatory pay practices (i.e. performance evaluation system used by Uber supervisors to rank workers). In addition, the company would need to work with a third-party company to create a new system to be used at Uber for promotion evaluation, general employee evaluations, and as a means of determining worker compensation.

Claims included in this particular case date back to summer of 2013. Uber claims they have made a lot of changes since some of the older claims have been filed. In fact, they stated that in the past year they have already developed a new salary and equity structure based on the market and overhauled their employee performance review process. They also stated that they published their very first Diversity & Inclusion report along with delivering various diversity training in leadership conferences to thousands of their employees throughout the world.

The complaint was filed by Ingrid Avendaño, Roxana del Toro Lopez and Ana Medina in California superior court in October 2017. The complaint claimed (on behalf of themselves and other aggrieved employees suffering from Uber’s unfair business practices) that the company violated the California Equal Pay Act and Private Attorneys General Act. The system the plaintiffs claim was in place at the company systematically undervalued female employees and employees of color in comparison to the male, white, or Asian American peers in similar positions. The plaintiffs claim that female employees and employees of color at Uber received lower rankings on average despite equal or even better performance than their co-workers.

The case was removed to federal court on the same day that the proposed settlement was filed, and del Toro Lopez filed an amended complaint. These changes established a class for California workers as well as another class for workers across the country – alleging various violations of both state and federal laws. The complaint filed noted the Uber workplace culture as problematic and related to the pay issue.

Uber is not required to accept any blame or admit any wrong in the situation according to the terms of the proposed settlement. It does require a new evaluation system as well as a system to monitor base salaries, bonuses and promotions internally in order to identify any potential negative effects on female workers and/or women of color.

If you are experiencing pay discrepancies in the workplace or if you would like more information on filing a proposed class action, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Drivers’ Employment Status Leaves Uber Being Sued…Again!

Uber is being sued again. The question of the Uber drivers’ employment status has opened the class action floodgates. Within two weeks of the settlement of $100 million for class action lawsuits in California and Massachusetts that sought driver reclassification from independent contractors to employees, Uber is fielding two new cases against their company.

Following the California and Massachusetts case resolution, similar nationwide class-action lawsuits have been filed on behalf of Uber drivers in both Florida and Illinois courts. The drivers (plaintiffs) allege that Uber, a San Francisco company, is in violation of the Fair Labor Standard Act. The new suits seek unpaid overtime wages and work-related expenses on behalf of drivers.

The class action suit that was filed in Illinois takes the familiar allegations to a new level by attempting to recover tips that drivers earned which they allege the company stole from them or caused them to lose through Uber policies and communications.

Legal representation for the Illinois class action lawsuit indicated that the settlement with California and Massachusetts drivers was an obvious attempt by Uber to band aid the situation when it called for much more drastic methods. Many drivers who work using the Uber service do so as a means of supporting themselves and their families. They need the protection of wage and hour laws and overtime pay requirements, just as much as the rest of the workers in the nation.

Uber responded to the new legal activity with a statement indicating that 90% of their drivers work with Uber because they enjoy being their own boss and that the reclassification of drivers from independent contractors as employees would take that away from them. They would no longer have the flexibility that the status of independent contractor affords. Uber “employees” would have designated shifts, a fixed hourly wage that would limit their earnings, and prohibitions would keep them from driving for additional ride-sharing apps.

If you have questions about the misclassification of workers or if you are an independent contractor and have questions about misclassification of employees, please get in touch with the southern California employment law attorneys at Blumenthal, Nordrehaug and Bhowmik.

Farmers Insurance Co. Sued by Female Attorneys for Pay Discrimination

Female attorneys employed by Farmers Insurance Co. filed suit alleging that the company paid them less than the male attorneys employed by the company. The pay discrimination class action group reached a $4.1 million deal with the insurance company in California federal court. The settlement amount is to be split amongst 300 women who either are or were employed by Farmers as attorneys working as claims litigators throughout the past 4-5 years. The agreement requires that Farmers Insurance Co. hire an outside human resources professional to consult on an independent basis.

Also as a part of the resolution of the case, Farmers agrees to a three-year injunction that sets down a new set of rules for treating female employees. In addition to hiring the independent human resources consultant, Farmers will be required to abide by the rules set down in the injunction. The rules include a requirement to allow attorney employees to openly discuss their pay rates with one another, the conducting of a statistical analysis of pay rates each year, strive to promote more female lawyers in the company, move more women employees into higher pay grades, etc.

The lead plaintiff, Lynne Coates, alleged that a male colleague handling a similar workload and job duties was paid from $150,000-200,000. In comparison Coates’ salary was capped at $100,000. When Coates lodged a complaint, she was “demoted” from her position in the company as an attorney and asked to handle other, lesser duties.

The suit was filed in April of 2015. It involved both federal and California state equal-pay laws. It was also among the first of this type of suit to test California’s new Fair Pay Act (effective 2016). The settlement discussed and agreed on between the parties is still waiting for approval from the U.S. District Judge Lucy Koh of the Northern District of California with a June 23rd hearing already scheduled.

If you have questions regarding pay discrimination or California’s state equal-pay laws, please get in touch with the experienced southern California employment law attorneys at Blumenthal, Nordrehaug and Bhowmik.

Sharing of Tips Between Workers: Appeals Court Upholds Limit

On Tuesday, a federal appeals court (9th Circuit Court of Appeals) ruled that businesses could not enforce a policy of tip sharing amongst workers even if their tipped employees are paid minimum wage. The ruling upheld a 2011 U.S. Labor Department rule in a 2-1 decision. In upholding the rule, the 9th Circuit noted that it was “reasonable” and appropriately consistent with the Congress’s goal to make sure that tips stay with employees who received them for their service.

 

Definitions to Know: What is “Tip Sharing Among Workers?”

 

When employers, supervisors or businesses collect tips that are left by customers for their waiters, casino dealers or other service employees that are then “shared” with backend support staff (i.e. dishwashers, bussers, hosts, etc.)

 

The 9th Circuit overturned district courts in both Nevada and Oregon. The ruling largely applies in those states where employers are required to provide workers with minimum wage in addition to any tips received: California, Washington, Oregon, Nevada, Montana, Minnesota, and Alaska. Previously, the labor department banned employers from using the distribution of “shared tips” to employees who do not normally receive tips (i.e. backend workers).

 

The basis for this legislation is that the tip received never belongs to the employer and therefore the employer does not have the authority or right to take it and redistribute it – it is not the employer’s money. Those in support of the rule prohibiting tip sharing urge employers to turn to higher pay for backend employees instead of using “tips” from other staff to subsidize a low pay rate.

 

While, the discussion of tip sharing is far from over, those in support of the 2011 U.S. Labor Department rule preventing enforced policies of tip sharing amongst workers, see this ruling as a move in a positive direction. Others question the effect that this movement will have on the pay of backend workers who depended upon the additional cash to supplement their income.

 

If you have questions regarding the legality of company policies such as tip sharing amongst workers, get in touch with the experienced southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

The National Labor Relations Act of 1935 vs. Your Boss’s Request to Never Disclose Your Salary

It goes without saying that your boss doesn’t want you to talk about your pay with your co-workers. Why does it go without saying? Because…they’ve probably said it. The majority of American workers from fast food workers to administrative assistants to dental hygienists have been advised by their superiors/employers not to discuss their pay with their co-workers. It’s so commonplace that when employers make the request most workers don’t bat an eyelash or question the validity of their employer’s right to make such a demand.

If you consider this request in terms of employment law, any time an employer requests or demands that you keep your pay rate or salary a secret from your co-workers they are breaking the law. 

According to the National Labor Relations Act of 1935 (NLRA), all workers are provided the right to exhibit “concerted activity for mutual aid or protection” as well as to “organize to negotiate with [employers regarding their] wages, hours, and other terms and conditions of employment.” In six states, the law goes further and actually states that workers retain the right to discuss their payment rate.

Employers insisting that you not discuss your pay rate with co-workers are in violation of the law, regardless of whether the request/demand/threat was made verbally or in writing and regardless of what the consequences are of ignoring the often unspoken rule. Sometimes it results in firing, but sometimes consequences are more subtle, i.e. a cold shoulder from supervisors/management.

Gag rules are currently thriving in the American workplace. According to a recent study by the Women’s Policy Research, approximately 50% of the American workforce (across all industries) is not to discuss their pay with their co-workers (either explicitly prohibited or strongly discouraged). The percentage is higher in the private sector (closer to 61%). Gag rules violate fundamental labor rights and create workplace environments that support discriminatory pay structures. Reforms are necessary.

President Obama did recently sign two executive actions that address transparency and accountability in the workplace. These will assist those who work for federally contracted employers, but others are currently on their own. Another bill, the Paycheck Fairness Act, would address the situation for the rest of America’s workers, but it has not yet been passed.

If you have questions regarding the gag rule and wrongful termination, please contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.