Dynamex and Its Effect on Worker Classification

The 2018 Dynamex Operations West v. Superior Court of Los Angeles County from the California Supreme Court upended decades of precedent by setting out a new, stringent, three-factor test to determine proper worker classification for purposes of California’s wage order rules. In 2019, the Ninth Circuit applied Dynamex retroactively. But then they reversed that ruling and returned the question to the California Supreme Court. Also in 2019, Assembly Bill No. an attempt to codify the Dynamex test, is before the California Senate. So where does that leave employers and employees in California? The information currently available on the issue conflicts – we’re still working towards a standard practical application of the Dynamex ruling.

First, it’s important for employers and California employees to remember that worker classification affects numerous areas: wage and hour, employee benefit plan participation under the Employee Retirement Income Security Act (ERISA), state and local laws not preempted by ERISA, and federal income and employment laws. Each area applies specific tests that determine a standard regarding whether or not any particular worker’s proper classification: employee or independent contractor. The recent developments apply specifically to wage and hour law.

California employers need to review how they classify workers for all purposes. They should also consider the fact that there are different tests that apply for classification in different areas of employment law and some are stricter than others. If a California worker is considered an employee for wage and hour purposes, they are entitled to all the protections California state law offers as well as the protections of the FLSA (including minimum wage and overtime).

As Dynamex continues to make waves across California, employers need to be taking a really good look at how they classify their workforce, each of their workers under the different tests, and pinpoint exactly how they can manage their workers to comply with both state and federal wage and hour law.

If you have a misclassification claim, please get in touch with Blumenthal Nordrehaug Bhowmik De Blouw LLP, our employment law attorneys. Our California employment law attorneys prepared to be your advocate, making sure you get ALL of the wages you are owed when your employer violates California labor law.

California, Employment Law, Cases featured in the news only

The well-known ride-share app/company, Lyft, is facing another class action lawsuit that claims the group intentionally misclassifies their drivers as independent contractors. The misclassification class action lawsuit was filed in the Northern District of California by Donald Brunner Jr., Lyft driver. Serving as a representative of Lyft drivers, the Burbank resident has been driving for the company full time since March 2016. According to claims made in the lawsuit, Brunner worked 42 to 70 hours per week since he started driving for Lyft and logged between 500 and 1,100 miles per week. He claims that he (and other Lyft drivers) were refused reimbursement of expenses, overtime pay, minimum wage, and other rights employees are provided by law.

It’s not the first time Lyft has faced a lawsuit. In fact, it’s not the first time Lyft has faced a lawsuit over a driver classification violation allegation. The company just settled a previous lawsuit over driver classification in June. The terms of the settlement were not made public. In 2017, Lyft settled another misclassification lawsuit for $27 million after close to four years of litigation. Since that settlement, the California Supreme Court issued the Dynamex decision that opened the door to more misclassification lawsuits aimed at the gig economy. Filed in the wake of the Dynamex decision, another lawsuit, Norton v. Lyft is still in litigation. Another, similarly structured ride-share app company, Uber, settled a case in early 2019 for $20 million. (This particular case was in litigation for six years). Uber arguments were supported in this case by the Ninth U.S. Circuit Court of Appeals ruling that arbitration clauses drivers agree to prior to working with Uber direct legal issues to an arbitration proceeding rather than court proceedings; effectively blocking class actions.

In Brunner’s case, the plaintiffs’ legal counsel argue that Lyft waived their arbitration rights when they did not pay required fees to the American Arbitration Association (AAA), which was allegedly part of the agreement as outlined in the terms of service. Since AAA requires fees in advance of any hearing, when Lyft refused to pay it basically blocked arbitration. In addition, the plaintiffs present fairly standard arguments for driver misclassification including that Lyft is entirely dependent on drivers to provide services, drivers do not have meaningful degrees of business autonomy, drivers do not set their own rates or build business relationships with customers for repeat services, the company controls the terms of employment and requires drivers to maintain certain standards (drivers cannot cancel rides without consequences from the company), and the 15-second acceptance rate for rides prevents drivers from being actively engaged in any other meaningful activity when not providing Lyft services.

If you have a misclassification claim, please get in touch with Blumenthal Nordrehaug Bhowmik De Blouw LLP, our employment law attorneys have the resources and experience companies fear in litigation. Our labor lawyers make sure that our clients get ALL of the wages they are owed when companies violate California labor laws.

Property Appraisers Group Denied Certification of Class in Misclassification Suit Against Major Insurers

California’s 2nd District Court of Appeal affirmed a trial court ruling denying certification of class for plaintiffs in a misclassification lawsuit against major insurers: Allstate, Farmers, North American Compass Insurance Service Group, CIS Group, Advanced Field Services, and Capital Personnel Services. The ruling was a significant win for insurers and service companies as the legal team was attempting to bind a group of 1,550 California property appraisers together to sue for alleged misclassification (McLeery et al. v. Allstate).

The representative plaintiffs in the suit alleged that the two insurance providers and the various service companies intentionally insulated themselves from labor laws by contracting services for property appraisal upon policy creation or renewal rather than hiring appraisers as employees. The time frame cited for the allegations is 2005-2008.

The litigation has been ongoing for years, and legal counsel for the defendants does not predict an end to the proceedings anytime soon. The plaintiffs in the case may appeal the California Supreme Court decision or continue forward with separate lawsuits naming the plaintiffs individually. 

A second lawsuit (Lunde v. Farmers Group) was filed by a different group of 106 appraisers in Los Angeles County Superior Court in 2014 and has been stayed pending the outcome in the McLeery case.

The most recent ruling marks the second tie the appellate court stepped in to answer a procedural question for the McLeery suit. Initially, the plaintiff’s plan to assess damages classwide through statistical analyses of results from an anonymous, double-blind survey sampling class members, but the 2nd Circuit reversed the decision and ordered the trial court to conduct the evaluations according to the proposed plan.

A survey expert, Krosnick, was hired by the plaintiffs to design a method of determining liability and damages. The study consisted of 45-minute interviews with proposed class members. The defendant’s experts questioned the scientific validity of the survey claiming that it invited “significant error” by asking participants to provide precise recall of events up to 10 years in the past. The court found that the survey results failed to specify why workers skipped meal or rest breaks (the nature of their work or their preference), whether inspections were performed by Allstate or Farmers, and failed to address work-practice variations amongst inspectors. The 2nd District upheld the trial court’s decision not to certify class due to the proposed anonymous survey. The courts agreed that the plaintiffs’ case relied on showing that insurance carriers and service companies conspired together to violate labor laws, but the survey failed to do so. The case seems to lack a fair, manageable method of establishing liability.

If you have questions about filing a class action lawsuit or if you have experienced labor law violations on the job, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Get in touch with the employment law office nearest you: San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange or Chicago.

Getaround Employs a New Tactic to Defeat Employee Lawsuits

Gig economy businesses continue to face lawsuits demanding answers regarding whether or not workers should be classified as employees or independent contractors. Many gig economy companies rely on contract work for their business model. These companies have seen the most significant increase in misclassification lawsuits. As the number of misclassification lawsuits increased, so did the number of tactics businesses used to manage the employee lawsuits. These tactics have included PR campaigns, lobbyists, presenting legal arguments that they are not employers – just software programs, and more. The recent lawsuit filed against Getaround Inc. has resulted in a new tactic.

Getaround Inc. assists people hoping to rent their personal vehicles out online. But at the moment they may be best known in certain circles for employing an uncommon legal tactic to a common issue in today’s world. In a preemptive strike against a class action lawsuit, Getaround mailed out dozens of checks to former workers with paperwork attached asking them to sign away their legal right to sue. The interesting part is that a provision included in the documents stated the deposit of the enclosed check counted as an agreement to waive the right to sue – even without signing the included contract. Almost everyone who received the paperwork deposited the check.

The tactic is not unheard of, but it seems to be particularly effective in the gig economy. This may be due, in part, to the fact that industry workers lack financial stability. Attorneys asked to respond to the topic have described it as “insidious” since most former workers can’t afford to seek legal counsel for advice on depositing the check or holding out for a larger payout from an eventual lawsuit. Low wage workers are particularly vulnerable to this type of legal maneuvering.

The legal strategy in Getaround’s case highlights how creative gig companies are willing to be to avoid scrutiny of their worker classification methods. Many gig companies of this nature are not profitable, and reclassifying workers and providing employment benefits would mean even less profitability for the company. Many gig companies throughout California are still in a flat spin following California Supreme Court’s sweeping ruling last year limiting the scope of work they can classify as “contract” labor.

Settling worker claims using the “Pick Up Stix” tactic (as it is often referred to) is unusual in the gig economy, but this may be largely due to the fact that most gig economy companies require workers to sign class-action waivers as part of their arbitration agreements.

Are you misclassified on the job? If you have questions about what it means to be classified as an independent contractor versus an employee, don’t hesitate to get in touch with an experienced employment law attorney at Blumenthal Nordrehaug Bhowmik De Blouw LLP. Our convenient locations in San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange, and Chicago make it easy for us to be your advocate and seek the justice and compensation you deserve.

Abrishamian Requests Class Certification in Employment Law Suit Against TotalMed

On June 28th, 2019, Natalie Abrishamian filed a first-amended class action complaint against TotalMed Staffing, Inc. alleging numerous California labor law violations. The lawsuit was filed in the Superior Court of Los Angeles. The allegations included in the complaint were: failure to pay for all hours worked, failure to pay minimum wage, failure to authorize or permit meal breaks, failure to furnish accurate wage statements, waiting time penalties, and unfair business practices.

Abrishamian, a nurse employed through TotalMed Staffing, a Wisconsin employment staffing agency authorized to do business in California, was assigned to work Kaiser Permanente Panorama City inside California as a non-exempt, hourly wage traveling nurse. The 13-week assignment began on November 5th, 2018, and ended on February 2nd, 2019. Abrishamian was assigned three 12-hour shifts each week. On approximately December 13th, 2018, the plaintiff's employment was terminated. The plaintiff was out of work two months before the agreed-upon end date of her employment.

Issues About the Case:

1.        Defendant Did Not Take "Per Diem" Payments into Account When Calculating Overtime Rates

2.        Defendant Did Not Provide Payment for Mandatory Training and Orientation Specific to the Job

3.        Defendant Did Not Provide or Authorize Employees to Take Mandatory Meal Breaks and Rest Breaks

4.        Defendant Did Not Provide Employees with Accurate Wage Statements as Required

5.        Defendant Engaged in Unfair Business Practices

The class action will apply to current and former employees of TotalMed Staffing, Inc. who were employed during the class time period (anywhere from 4 years before the original filing through the date of the hearing). Plaintiffs' legal counsel has filed a demand for jury trial. Abrishamian seeks class-action certification from the court on behalf of each of the following classes included in the complaint: Per Diem Class, Unpaid Time Class, Meal Break Class, and the Rest Break Class.

 If you have questions about California labor law violations or if you are not receiving overtime pay, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP. Call or come by one of the Blumenthal Nordrehaug Bhowmik De Blouw LLP locations nearest you: San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange or Chicago.

Is Starbucks Misgendering Trans Woman a Violation of Labor Law?

Starbucks recently claimed that misgendering or calling an employee by the wrong pronoun is not harassment, which is in direct contradiction to their employee guidelines. A former Starbucks employee, Maddie Wade, filed a complaint at the Fresno Superior Court in California suing the company for harassment and discrimination.

Wade, a former barista at a Starbucks in Fresno, alleges that when she began her transition, her manager at the time reduced her work hours and refused to call her by preferred pronouns. She also claims that her former Starbucks manager began posting transphobic material online through social media outlets. Wade claims that she was bullied and targeted by her manager at the Fresno Starbucks daily after she came out as transgender.

Allegedly, the mistreatment by her boss, Dustin Guthrie, escalated to unbearable levels and Wage had to transfer to a different Starbucks location. The harassment continued at the next Starbucks location. Wade claims her manager at the new site encouraged her to take the matter to the District Manager, and she did, but the situation was not resolved. After nine years of employment, Wade eventually left her position at Starbucks at the advice of her therapist due to the mental stress and “intolerable conditions” she was forced to endure.

Wade seeks general damages, special damages, punitive damages, and attorneys fees from her former employer. She states that the loss of health insurance prevented her from receiving the treatment and procedures she needs to complete her transition. Wade also claims that Starbuck’s value marketing group for its LGBTQ employees on the Facebook page, Starbucks Partners – Pride Alliance Network, refuses to allow her to post on its wall.

It is ironic that as we enter Pride Month, Starbucks seems to be making moves counter to its public record highlighting LGBTQ acceptance. The company is reasonably well known for its LGBTQ acceptance: scoring 100 out of 100 on Human Rights Campaign’s 2018 Corporate Equality Index, releasing annual LGBTQ-focused products, rolling out trans-inclusive health care included in their benefits package, etc. Attorneys representing the massive coffee provider are filing a motion for summary judgment and arguing that there is not enough evidence to show that Guthrie was calling Wade by incorrect pronouns on purpose. Without proof of intent, the Defendant contends that the behavior in itself cannot constitute discrimination under the California Fair Employment and Housing Act.

If you have questions about filing a discrimination lawsuit or if you experienced discrimination in the workplace, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Get in touch with employment law office nearest you: San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange or Chicago.

Mattel Faces Age Discrimination Lawsuit

A former Mattel employee sued Mattel for age discrimination. 71-year old Benny Binshtock filed the age discrimination lawsuit against Mattel in Los Angeles Superior Court listing several allegations: wrongful termination, age-based harassment, age-based discrimination, retaliation in the workplace, intentional infliction of emotional distress, defamation, fraud, and concealment. Binshtock claims he was falsely accused of unnecessarily calling women over to his workspace as a justification to fire him, but that the real reason was his age. The age discrimination lawsuit seeks unspecified damages.

Binshtock firmly believes that his age was a contributing factor in the decision of management to terminate his employment and that the company intentionally sought to bring younger employees into the plaintiff’s position in the workplace. Binshtock’s time with Mattel began with his hiring in 1968. He was initially hired as an apprentice model maker and later received a promotion to supervisor. According to the complaint, the plaintiff’s department full of model makers like himself had not seen new hires in a significant number of years. Binshtock’s lengthy term of employment lent his complaint authority when he noted that the people in his department ranged in age from 40 to 65 years and that Mattel had employed them for many years.

In March 2018, Mattel employees saw the beginning of a round of layoffs. Binshtock claimed it was evident that defendants had clear intentions to terminate older employees. Within a month of the initial layoffs, Binshtock was called in for a meeting with Human Resources. In this meeting, he was advised that they had received a complaint against him of sexual harassment in the workplace. The “complaint” indicated that Binshtock always called female co-workers over to this office for his amusement rather than for work-related necessities. The plaintiff claims the sexual harassment complaint was completely baseless – fabricated to defame him of the reputation he spent years building on the job at Mattel.

In the same meeting with Human Resources, the HR rep changed her accusation against Binshtock from sexual harassment to “making women uncomfortable.” The plaintiff was called into another meeting in May 2018, where HR told him that an investigation had been conducted into the matter and had resulted in the decision to terminate his employment. Within the month, Binshtock, 70 years old at the time, was fired.

If you have been fired and need to discuss filing a wrongful termination lawsuit, please don’t hesitate. Get in touch with an experienced employment law attorney at Blumenthal Nordrehaug Bhowmik De Blouw LLP. Our convenient locations in San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange, and Chicago make it easy for us to be your advocate and seek the justice and compensation you deserve.