California Model Alleges Agency Failed to Provide Payment In Accordance with Contract

After completing an assignment based on a contract with a California-based agency, a California model claimed that the company actually owed her significantly more due to “waiting time penalties.”

The Case: Brighton Collectibles, LLC v. Hockey

The Court: Super. Ct. No. 19CV06616, Santa Barbara County

The Case No.: 2d Civ. No. B307235

The Plaintiff: Brighton Collectibles, LLC v. Hockey

The plaintiff in the case is Natalie Hockey. Hockey was a model who directed her modeling agency to negotiate a contract on her behalf. The contract was with Defendant Brighton Collectibles, LLC, the defendant in the case. According to the contract, the agency agreed that Plaintiff would perform a one-day modeling shoot (a job estimated to last 10 hours) for Brighton Collectibles in exchange for $3,000, payable on receipt of the invoice. Hockey completed the 10 hour modeling job as described. After the job, Hockey sued the agency, alleging that the Defendant was her employer and violated Labor Code section 201 by not paying her the total amount due at the end of her modeling shoot day, and claiming that Brighton Collectibles actually owed her waiting time penalties totaling $90,000.

The Defendant: Brighton Collectibles, LLC v. Hockey

The defendant in the case, Brighton Collectibles, LLC, quickly cross-claimed for fraud. The cross-claim argued that the Plaintiff had represented that she would be paid $3,000 upon receipt of an invoice, and that the Defendant based their actions on that representation. The defendant further claimed that they were damaged by being subjected to the risk of liability to Hockey (amounting to the claimed $90,000). Hockey responded by filing an anti-SLAPP motion, seeking to strike Brighton Collectible’s cross-claim. The plaintiff’s motion was granted in trial court, but the defendant appealed.

The Case: Brighton Collectibles, LLC v. Hockey

The California Court of Appeal reversed the trial court's order granting the plaintiff’s anti-SLAPP motion attempting to strike Brighton's cross-claim for fraud. Even if the court assumed that Hockey met her burden of showing that the defendant’s cross-claim for fraud arose from protected conduct, the reversal was required based on the probability that the agency would prevail on its cross-claim. According to the evidence submitted, the court determined that the Defendant would likely be able to show that Hockey made a misrepresentation when she told the company to pay the agency for her modeling services upon receipt of an invoice, rather than immediately upon her “termination” as an employee at the end of the day (or the conclusion of the modeling shoot). Additionally, the court supposed it could be inferred that the plaintiff knew the misrepresentation was false based on her actions and intended for the agency to rely on her misrepresentation. The defendant did so - justifiably. And the plaintiff’s misrepresentation damaged the defendant by exposing the agency to $90,000 in waiting-time penalties (plus additional expenses due to attorney’s fees and costs associated with the case).

If you have questions about California labor law violations or contract negotiation, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Is Kellogg the First of Many to Exploit Supreme Court Arbitration Victory?

A group of former Kellogg employees are suing the cereal giant claiming that the company shouldn’t have sued them earlier in 2018. Kellogg sued the employees for suing the company. It’s a bit confusing.

Kellogg targeted the group of former employees for defying their arbitration agreements and in doing so, they announced a clear warning to all their employees: not to sue the company. The complicated case has hearings scheduled for February and will be watched by many as one of the first instances when U.S. employees with grievances seek justice after the recent U.S. Supreme Court precedent that is making waves.

Last year a Kellogg employee out of Nevada filed suit against the company in federal court. The suit was filed on behalf of co-workers who were not provided with federally mandated overtime pay. Kellogg denied the accusations and they were able to successfully petition the judge to move the case to arbitration by bringing up the arbitration agreement signed by the employee that required disputes to be handled in arbitration rather than court.

This type of arbitration agreement usually ends up limiting the rights of employees in comparison to the legal rights they would have in the court system. Arbitration also promotes quick and efficient dispute resolution and discourages litigious lawyers’ fighting for plaintiffs. Others claim that the arbitration process limits transparency and removes the right to sue as a class and takes leverage away from employees seeking resolution.

What arbitration means for employees and employees depends on who you ask, but no one can argue that arbitration agreements have become more and more common at U.S. companies in recent years. Thanks to a series of U.S. Supreme Court rulings that quashed attempts to curb them, companies are embracing them more and more actively.

This past May, in a 5-4 ruling, the high court’s Republican-appointed majority held that arbitration agreements that require workers to sign away rights to file a lawsuit as part of a class can be enforced for workplace disputes. Proponents of arbitration insist that this is extremely detrimental to the enforcement of both federal minimum wage and overtime laws. Months later, Kellogg began filing breach of contract claims against former employees that signed onto the overtime lawsuit alleging violations of continued employment agreements that included an agreement that delayed the firing of workers during corporate restructuring in exchange for arbitration of claims.

Kellogg filed suit alleging that the original plaintiff was in breach of contract because he filed an employment claim in court against the company. Kellogg seeks punitive damages and legal costs. Former employees were shocked by Kellogg’s response and their attorneys have sued the company in return alleging that Kellogg’s claims against their former workers are actually illegal because they constitute retaliation as described in the Fair Labor Standards Act.

If you are a victim of retaliation in the workplace or if you need help obtaining overtime pay from your employer, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Is Uber Refusing to Honor the Arbitration Clause in its Terms in Conditions?

More than 12,000 Uber drivers filed a California lawsuit claiming that Uber purposefully delayed arbitration requests. Uber drivers are considered contractors by the company. The drivers claiming that Uber is delaying arbitration requests are making an assortment of complaints, including: minimum wage violations, failure to pay overtime, etc. At the rate the complaints are being processed by the company, it would be a decade before all the complaints were heard.

Uber, like thousands of other companies, requires their drivers to sign an arbitration agreement that limits dispute resolution to company-direct handling instead of going through the court system. Uber’s 21-page terms and conditions does include an option to opt-out of the clause, but it has to be done within 30 days of signing the original agreement and it must be done in writing.

Drivers dealing with the potentially decades long delay are getting fed up with decreasing pay and their questionable status as independent contractors (instead of employees who enjoy more protections through employment law). 12,501 of Uber’s drivers have filed a California lawsuit including allegations that Uber ignored requests for arbitration. According to the suit, there have been 300 pages of partners requesting arbitration and only 47 have been appointed arbiters. Of those appointed arbiters, only six have seen the arbitration process move forward.

Legal counsel involved in the case suggest that this is a typical trend amongst corporations in this situation and has been for decades in the U.S. They insert this type of clause in a mandatory arbitration agreement specifically to block class action lawsuits. When asked about the case, Uber declines to comment. Originally, the case was brought as a class action lawsuit in multiple states addressing driver status as independent contractors vs. employees. Complaints (in numerous states) range from failure to pay overtime, to minimum wage violations, to failure to provide sick leave, etc., which would all be required if the drivers were classified as employees.

If you need to discuss how to qualify for a California class action lawsuit or if you need to file a lawsuit due to overtime violations or minimum wage violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Did You Sign an Arbitration Agreement?

Did you know that millions of US workers are currently “barred” from the court system? Did you know that you may be one of them and not even realize it? Approximately 60 million American workers have signed arbitration agreements or arbitration clauses and they may not have even realized they were doing so.

Close to 50% of all non-unionized workers employed at companies in the United States are subject to arbitration agreements (according to the Economic Policy Institute). This number has more than doubled since the early 2000s. Major employers across the nation have adopted them as standard, including: Uber, Google, McDonald’s, Starbucks, Walmart, Macy’s, and more.

The increase in the use of mandatory arbitration agreements is making it increasingly difficult/impossible for employees to seek justice when they are victims of wage theft, discrimination in the workplace, retaliation, harassment, overtime violations, etc. The recent Supreme Court ruling allowing employers to prohibit class-action claims from workers in arbitration only increased the incentive for companies to include arbitration clauses right in their employment contracts for new hires.

The practice was once limited to business to business contract disputes, but it is now extending to legal disputes with employees and consumers. This change occurred after a significant Supreme Court ruling in 2001 related to sexual harassment. In Circuit City Stores Inc. v. Adams, an associate working at a Circuit City store in California sued the company for sexual harassment. The associate’s name was Saint Clair Adams. He said he was harassed by his co-workers because he was gay. He, like all the other employees of Circuit City, had signed an arbitration agreement stating that all disputes with the company must be resolved through private arbitration. The company argued their case in federal court, insisting that Adams was required to move his claim to arbitration due to the agreement.

The judge on the case sided with the plaintiff, Adams, and cited the Federal Arbitration Act. The Federal Arbitration Act allows companies to resolve contract disputes through arbitration but includes a provision that excludes employment contracts. The judge’s ruling was later upheld by the Ninth Circuit Court of Appeals.

The argument didn’t die with the appellate court though. Circuit City took the case to the Supreme Court where the lower court’s ruling was overturned – extending the reach of arbitration clauses to nearly all employment contracts. The justices based their decision on a close reading of the employment exclusion in the Federal Arbitration Act, which reads, “but nothing herein contained shall apply to contracts of employment of seamen, railroad employees, or any other class of workers engaged in interstate or foreign commerce.” The justices interpreted this to mean that “transportation workers” were exempt from mandatory agreements; and that non-transportation workers would be required to take their claims to arbitration.

Another Supreme Court ruling in May 2018 made it even more difficult for workers to seek justice or force a company to change working conditions. The case was Epic Systems Corp. v. Lewis and the court decided that it is legal for employers in the United States to prohibit employees from joining together to file suit against the company claiming discrimination, wage theft, or other common workplace violations.

Do you have questions about how to deal with workplace violations when there is an arbitration agreement in place? Call one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Some Companies Are Responding to Worker Demands to Limit Arbitration

In response to the social and political climate, some companies are already starting to limit arbitration on their own. Mounting pressure from employees as well as the general public after the #MeToo movement had several Silicon Valley tech giants altering their policy and no longer requiring workers to take their sexual harassment cases to arbitration. The first to make the change were Uber and Microsoft. Google and Facebook announced plans to follow suit not long after.

While the change is heading in the right direction, some employees are still unhappy with the state of affairs. They say the exclusion for sexual harassment claims is nowhere near enough. For example, Google experience major backlash after a recent article in the New York Times offered details about how the tech giant paid out millions in exit packages for male executives who were accused of sexual harassment, while staying silent about the actual harassment.

Anger over this situation only added to the already mounting frustration at Google over ethical and transparency issues. The tension built up to a walkout on November 1st. Over 20,000 Google employees and contractors walked off the job in protest of Google’s method of dealing with sexual harassment claims. Employees demanded that Google executives end forced arbitration for discrimination claims (including sexual harassment, racial discrimination and gender discrimination), amid other demands. The company agreed to some of the employee’s demands a week later, but only agreed to drop mandatory arbitration for claims of sexual harassment and assault.

Organizers of the walkout were glad that Google responded with some positive change, but were disappointed that they ignored completely the opportunity to address widespread racial and gender discrimination claims.

If you need to discuss discrimination or sexual harassment in the workplace, and you aren’t sure where to start, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Application of California Law in Non-Compete Litigation?

In a recent East Coast/West Coast conflict, courts in Massachusetts consider the application of California Law in a non-compete litigation. Massachusetts courts are not the only courts to come up against this particular issue either. Other courts around the country have also been asked to study the application of California law in litigation based on non-competition agreements. Generally speaking, non-competition agreements are not enforceable in California. So, employees who have worked in another state or in situations where the agreement contains a forum selection clause outside of the state of California are rushing to file in California court or present other state courts with the argument that California state law should be applicable. Either action would offer them the hope of avoiding mobility restrictions.

The Business Litigation Session of the Suffolk Superior Court in Massachusetts recently found themselves asking the question, “Should California law regarding non-compete agreements be applied to cases and agreements outside of the state?”

The issue was considered in connection with the case FTI, LLC, et al. v. Duffy, et al. in which three of the plaintiffs’ former employees resigned. Shortly after resigning they filed suit in California seeking a ruling that the non-compete agreements were unenforceable. Five months later, the plaintiffs filed suit in Massachusetts alleging a breach of the non-compete agreements, as well as other violations (i.e. trade secret misappropriation, breach of fiduciary duty, unfair competition, etc.) The defendants moved to stay the case pending resolution of the California suit. One former employee also moved to dismiss the claims citing a lack of personal jurisdiction. 

The Massachusetts court did not stay the case. In situations when duplicative lawsuits are filed in multiple jurisdictions, the later-filed action is typically stayed, but courts have discretion and can give preference to the later-filed action when doing so best serves the interests involved in the case. In this case, the court held that the two seemingly duplicative lawsuits actually had minimal overlap. The California case sought to void the non-compete agreement. The Massachusetts case focused on other claims. Additionally, the agreement was governed by Maryland law and a court in California would have no greater expertise or ability to apply Maryland law than a Massachusetts court. The court held that Massachusetts had an equally strong interest in the case due to the fact that the plaintiffs alleged defendants committed a number of business torts during the time of employment cited by court documents.

The Massachusetts court also denied the employee’s argument that the case lacked personal jurisdiction. The court found that the employee had sufficient minimal contacts through his supervision of six employees in the state, regular travel to the state of Massachusetts in order to fulfill supervisory duties, and that he billed more than 130 hours to the company while working in Boston in the year 2014 alone. The court also found that since the employee filed a suit in California (revealing that he was willing to travel across the nation to litigate a case) he would not be unfairly burdened by the need to defend himself in a Massachusetts court simply because he resided in New York.

If you have questions about California state law and how it applies to your non-compete agreement, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

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

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.