Dynamex and Its Effect on Worker Classification

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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.

Settlement Reached with Former Port Hueneme Employee Who Filed Harassment Claim

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A former Port Hueneme employee claims she experienced harassment and discrimination in the workplace. Carmen Nichols, a former employee of Port Hueneme, filed a claim alleging both.

In response, Port Hueneme is to pay Carmen Nichols $550,000. While according to the terms of the settlement, Port Hueneme officially admits no wrongdoing, the settlement counts as a win. Nichols resigned from her position in August 2017 after being employed for 22 years. One month after she left, she filed a claim alleging misconduct by Hensley as well as other employees who allowed the Hensley’s harassment and discrimination of Nichols to continue.

In the complaint, Nichols alleged that City Council member Jim Hensley harassed and discriminated against her on numerous occasions beginning around January 2015 and continuing until she was finally forced to quit her job in August 2017. Harassment and discrimination aimed at Nichols were based on gender and race and was, in the words of Nichols, “continuous.” While opposing party claims Nichol has zero evidence of her claims, Nichols listed several instances of harassment and discrimination in her complaint.

Nichols claims that Hensley regularly referenced her looks, insinuated she wasn’t doing her job, opposed a pay raise for her when she was named for a promotion (even when she earned less than men in the same position), referenced her ethnicity (referring to her as a “Latina”), and openly expressed his dislike for Hispanics.

In a separate case citing Port Hueneme as Defendant filed by City Council member Jim Hensley, a judge found the federal lawsuit seeking monetary damages for lost wages and benefits related to his removal from some committees as well as emotional distress without merit. U.S. District Court Judge André Birotte Jr. granted the request for summary judgment. By granting the summary judgment, the judge essentially rules that Hensley’s claims were not strong enough to hold up in court and allow the case to move forward. Judge Birotte reviewed the Plaintiff’s pleadings as well as records of City Council meetings pertaining to the situation and determined there were no “genuine issues of material fact.” Hensley and his counsel feel the judge’s conclusion was inaccurate and plan to appeal.

If you have experienced harassment or discrimination in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Olive Grove Charter School Facing Wrongful Termination Lawsuit

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A former Olive Grove Charter School employee, Dawn Wilson, filed a wrongful termination lawsuit alleging the school’s leader was misappropriating public funds, engaging in a romantic relationship with a contractor at the school, improperly hiring one of her daughters and fraudulently adjusting the grades of another daughter. The lawsuit was filed in Santa Barbara County Superior Court.

Dawn Wilson was allegedly hired in 2016 as a part time human resources/administrative assistant. She was later promoted on two different occasions and appointed as board treasurer. Just a year ago, Wilson was promoted again to work as controller and chief operating officer with earnings set at around $103,000 until she was terminated from her position on July 31, 2018. Wilson’s termination allegedly came after she raised a number of concerns.

As an alternative public school, Olive Grove Charter School offers homeschooling or a hybrid home/classroom schooling program for both elementary and high school age students. The school has a number of locations: Santa Barbara, Buellton, Lompoc, Orcutt/Santa Maria, San Luis Obispo and New Cuyama. The lawsuit alleges California labor code violations, wrongful termination an intentional infliction of emotional distress.

According to Wilson, she complained about the school’s unethical and unlawful behavior to the Olive Grove board of directors. She made allegations of conflicts of interest, misuse of public funds and falsifying grades for students. She alleged that Mudge had an affair with the senior vice president of Charter School Management Corporation, Nick Driver, who also happens to hold the largest contract with the charter school. Wilson pointed out that Mudge failed to disclose her relationship with Mr. Driver to the board which is a violation of the OGCS Conflict of Interest Code (pursuant to California Government Code section 87300). As such, Wilson believed that Mudge’s behavior qualified as unlawful activity.

In addition, Wilson brought to the board’s attention that Mudge hired her daughter, Anna Mudge, to teach, but that the open position was not properly advertised and Mudge’s daughter, Anna, did not have the appropriate credentials to fill the position. California Commission on Teacher Credentialing records indicate that Anna Mudge received an emergency substitute teaching credential in November of 2017 and a single subject teaching credential valid until Jan. 1, 2020. A certificate of clearance will expire Oct. 1, 2022. According to the lawsuit, Anna Mudge was hired as a teacher’s assistant for $48,000 per year which equates to an hourly rate of nearly $38 per hour. This is significantly higher than the hourly rate paid to other teacher’s assistants at the school who received $15 per hour.

Wilson also cited violations of California Penal Code section 424 claiming that her daughter’s inflated salary was a misuse of public funds. In fact, according to the lawsuit, the plaintiff complained about Mudge’s misuse of public funds in this way to Mr. Anaya, school board president, on a number of occasions. The plaintiff also complained about spending to Mudge, questioning the purchase of a $10,000 salt water fish tank for a marine biology class the school did not yet offer, a five-star hotel stay in New Orleans during a conference when closer hotels were available at more reasonable rates, and other questionable expenditures. The expenses Wilson questioned were incurred prior to the board authorization. In April 2018, Wilson complained to the president of the board again that the executive director at the school spent close to $44,000 on computers without first obtaining approval from the board even though the budget set for the purchase was $10,000. Wilson also complained that Mudge misused public funds by booking a hotel room in Santa Barbara, which is against policy due to its proximity to the district office and claimed that she did so in order to engage in a romantic rendezvous with Mr. Driver.

In July, the school board president requested Wilson investigate an “unlawful grade change” that was reported by what he referred to as a “disgruntled employee” who claimed that Mudge unilaterally changed the senior year grades of her daughter, Juliette Mudge. Her poor grades were changed to A’s and B’s, a mathematical impossibility considering the previous state of her academic standing. The situation made it clear that the master teacher did not make the grade change. In investigating the issue, Wilson contacted the school registrar to obtain information. Ten days later, Mudge placed Wilson on administrative leave and terminated her employment at the school. Mudge cited violations of school policy and unsatisfactory job performance as the reasons for termination.

The wrongful termination lawsuit seeks lost earnings, compensatory, general and special damages, punitive damages and costs associated with the legal action. According to court records, this is not the first lawsuit to be filed against the school by a former employee. In fact, former employees filed suit against the school in both 2016 and 2017, but both cases were settled before trial commenced.

If you need help filing a wrongful termination lawsuit or if you need to discuss what constitutes a wrongful termination according to the law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Former Personal Chef to Receive Settlement from Sean “Diddy” Combs in Harassment and Wrongful Termination Case

Sean “Diddy” Combs’ former personal chef filed a sexual harassment claim against him in 2017. She also claimed that the music superstar didn’t pay her overtime for working hours in excess of what is legally recognized as full time.

Rueda, Combs’ former personal chef, was employed in April 2015 and worked for the music mogul through May 2016. During her time employed by Combs, Rueda claims she would regularly work from 9am to 1:30am and that she would also frequently accompany him on the road for weeks at a time without receiving anything in addition to her regular $91,000 annual salary. Rueda claims that when she took the position as personal chef, she advised Combs that she couldn’t travel due to the fact that she had small children who needed her to be nearby. 

Rueda claims that Combs was frequently hostile to her – creating an uncomfortable work environment. She described one instance in which he yelled at her for showing up to work late and disturbing him and Gina Huynh, a woman he was romantically linked to. She claims he swore at her and demanded, “Can’t you see I have company?” Rueda then claims she was instructed to bring them breakfast in his private quarters. She did so and when she arrived, she saw them having sex. She made additional claims that Combs’ manager made sexual comments to her.

It was reported that when Los Angeles Superior Court Judge Elizabeth Allen first considered Rueda’s case, she didn’t accept it because of a work contract Rueda signed stating that all employment disputes be handled by arbitration. Rueda’s lawyers argued that the contract was both misleading and heavily favored Combs in the verbiage.

Despite Judge Allen’s initial reaction to the case, Rueda’s lawyers revealed the case was settled on February 19th. They did not provide details. When news of the suit surfaced in 2017, a Combs representative described Rueda as a disgruntled employee, but claimed she was fired for just cause. The reason she was terminated was never released. Rueda also sued Combs for wrongful termination.

If you have been wrongfully terminated from your job or if you are experiencing a hostile work environment, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Wrongful Termination and Age Discrimination Suit: Branch vs. Kaiser

March 30, 2015 - Belinda Branch worked as a medical assistant for Kaiser until her termination after 34 years on the job. In a complaint filed in Los Angeles Superior Court, Ms. Branch claims that she was fired in retaliation for reporting HIPAA violations on the job. Kaiser claims the woman is not trustworthy.

Ms. Branch started work at Kaiser’s Parkview Building in 1978. In regular performance reviews over the course of her 34 years on the job with Kaiser, she was given “exemplary” status. In 2014, after reporting another Kaiser employee for HIPAA violations, Branch became the focus of an investigation.

According to allegations made by Branch, the medical information that was unlawfully released contained private and sensitive medical data (some of which came from the patient’s “General Surgery File.”) Branch claims she was called in to three separate meetings. At the first two, she was confronted by what she described as hostile “compliance” officers intent on an interrogation. In the third meeting in June of 2014, Branch was terminated. She claims she was given an ultimatum: either resign and be allowed unemployment benefits or be fired without access to unemployment benefits.

Branch also claims that the HR department advised her that she should write her resignation letter immediately. She was required to use the exact wording they provided her with or she would be fired on the spot with no chance to access unemployment. Branch claims that she did as requested, but only under what she described as “coercion and manipulation.”

To date, no known action has been taken against the employees who Branch reported as violating HIPAA by sharing patient information without consent. Branch noted in her complaint that all three of the employees involved in the act are younger and that they were treated more favorably.

Branch claims she was fired in retaliation for her whistle-blowing as well as age discrimination.

Branch sued for age discrimination and wrongful termination and intentional infliction of emotional distress. She is seeking general and special damages for loss of earnings (past and future), loss of benefits, damage to professional reputation, failure to advance, and loss of privileges on the job.

If you have questions regarding what constitutes wrongful termination or age discrimination according to California state labor law and federal employment law, contact the experts at Blumenthal, Nordrehaug & Bhowmik.

Low-Wage Workers Going Unprotected by Current Minimum Wage Laws

Many low-wage workers hope President Obama’s push to increase the federal minimum wage will offer results. The hope it to increase it to $10.10 per hour (in addition to the recent state-level increases) which would be welcome and exciting news for many in low paying positions. It’s a glimmer of hope that they may not have to struggle so hard to get by on such a small paycheck.

Due to a strange compilation of rules and exemptions on both a federal and state level, there are a number of different “classes” of workers are not protected by minimum wage law. In some cases, workers aren’t just not paid minimum wage, but they are paid well below minimum wage. The complexity of the rules is increased by the fact that state and federal rules and regulations are not always in line with each other. Some of the classes of workers who are often paid below (or well below) minimum wage on the job include:

  • Disabled Workers: federal law allows employers to apply for a special certificate allowing them to decide how much the work of any disabled (physical or mental) worker is worth. The law allowing this was put in place in 1938 and has seen very little change since its inception.
  • Workers at Very Small Businesses: If company gross sales are under $500,000 and no work is done across state lines, federal minimum wage regulations do not apply.
  • Teenage Trainees: There are multiple situations in which federal law allows for exemptions in minimum wage requirements in relation to employment of teenagers/students.
  • Tipped Workers (as mentioned above): According to federal law, minimum wage for tipped workers is $2.13 as long as “tips” bring the overall pay for the worker up to the $7.25 minimum, but this is obviously difficult to regulate and enforce.

These examples make it clear there’s a problem and this is only a small representation of the full list of classes that often include workers “exempt” from federal minimum wage laws. On top of that, there’s the additional confusion of laws and regulations that are in place at state and local levels.

If you have questions regarding minimum wage and hour laws and how they apply to your workplace, your industry and your job duties, please contact the Southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik. 

California Labor Law: Governor Brown’s New Law

Governor Jerry Brown recently signed Assembly Bill 1897, creating new Labor Code section 2810.3. The new labor code section created by the Assembly Bill applies to almost all companies with 25+ employees that obtain or receive workers to complete work through the “usual course of business” from other businesses that provide workers (otherwise known as labor contractors). The new law makes such companies liable for three things:

  • Payment to contractor’s employees
  • Any contractor’s failure to secure appropriate workers’ compensation coverage as required
  • Compliant actions regarding occupational health and safety requirements (OSHA) in place

Companies will now have a new statutory liability. The legal contraction of labor services in regards to the new Labor Code section isn’t related to the required finding of joint/co-employment or any type of control over working conditions, the method of payment, scheduling of work hours, or the overall work site environment. Under the new law, each company is liable even if they can exhibit proof that they were not aware of violations that existed or occurred.

The new labor code law applies to workers who are completing their job in the normal course of business on site. California employees who are exempt from overtime (i.e. executive, administrative and professional employees) are excluded from the new law’s reach. There are also a few exemptions from the definition of a “client employer” who is covered under the new law: companies with fewer than 25 workers, companies who use 5 or less labor contract workers at any given time, state organizations, homeowners and home-based businesses who receive labor contract services in their homes, and companies providing transportation services. Additional limited exemptions in relation to non-profit, community organizations, unions, apprenticeship programs, motor club services, cable operators, telephone corporations, etc.

The new law will be effective as of January 1, 2015. For additional information regarding exceptions and exclusions of the new labor law, contact your southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.