Defining the Employment Status of a College Football Player

In recent news, the question was asked, “Is a college football player an employee of the NCAA?” The 9th U.S. Circuit Court of Appeals recent affirmed dismissal of a college football player’s lawsuit for failure to state a legal claim clearly indicates they feel the answer is no. The ruling means that the National Collegiate Athletic Association (NCAA) and the Pac-12 Conference are not legally required to pay a college football player minimum wage and overtime in accordance with federal or California wage laws.

The NCAA, a not-for-profit educational organization, and the Pac-12 Conference were listed as defendants in a proposed class action lawsuit filed by a college football player. The plaintiff claimed they acted as joint employers because they prescribed terms and conditions under which student athletes perform. The appeals court ruled that the football players were not employees under the FLSA due to economic realities in the relationship between the entities listed as defendants and the players. The found that the defendants in the case were regulatory bodies rather than employees and in so doing, upheld a district court’s ruling on the case.

The appeals court stated that the district court was accurate in their dismissal of the college football player’s California overtime claims based on the state’s decision to exclude student athletes from receiving workers compensation benefits combined with the state appellate court’s interpretations of the related legislation.

When considering the district court’s dismissal of the football player’s suit, the 9th Circuit used the “economic realities” test under FLSA. The test considers certain variables:

The plaintiff’s expectation of compensation

The alleged employer’s power to hire and/or fire

Any evidence that action was taken to evade the law

The court found that limitations on scholarships did not establish an expectation of compensation, the players were not able to show that either regulatory entity held the power to fire or hire a player, and that the NCAA rules did not show a clear intent to evade wage and hour law. They also found that the revenue generated by the relationship between the NCAA and their student athletes did not create an employment relationship.

If you have questions about the Fair Labor Standards Act, unpaid overtime or wage and hour law, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik and DeBlouw LLP today.

Spectraforce Technologies, Inc. Faces California Overtime Lawsuit

Spectraforce Technologies, Inc. is facing a class action lawsuit alleging that the company failed to provide required meal and rest periods, as well as overtime wages to employees. The class action overtime lawsuit is pending in the Santa Clara County Superior Court (Case No. 19CV346604).  

Employees Claim that Spectraforce Technologies, Inc. Violated Labor Law by:

•    Failing to Accurately Calculate and Pay California Non-Exempt Employees for Overtime

•    Continuing to Inaccurately Calculate and Pay Overtime Wages

•    Failing to Accurately Calculate Wages for Overtime Hours Worked

•    Failing to Provide Plaintiff and Other Class Members with Required Rest Periods

•    Failing to Provide Employees with Off-Duty Meal Breaks when Completing Shifts of over 5 hours

Non-Exempt Employee: An employee who is entitled to overtime pay according to the Fair Labor Standards Act (FLSA). Employers are required to pay time and a half the employee’s regular rate of pay when they complete more than 40 hours of work in any given week.

Overtime Rate of Pay: According to California State Law, employers are required to provide employees with overtime compensation at one-and-one-half times their regular rate of pay.

Overtime Pay Calculations: To accurately calculate overtime pay, employers must start by determining the employee’s regular rate of pay. The regular rate of pay should include the hourly rate plus any value associated with nondiscretionary bonuses, shift differentials, and other specific forms of compensation.

Meal Break Law Requirements: If a California employee works more than 5 hours in a day, they are entitled to a meal break of at least 30 minutes. The meal break must begin before the end of the fifth hour of the shift. Employees can agree with their employer to waive the meal break is they do not work more than 6 hours in a workday.

If you need additional information about the class action lawsuit against Spectraforce Technologies, Inc. or if you need answers to questions about wage and hour law or receiving just overtime compensation, please get in touch with the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP today.

Stanford Students File First Class Action Suit in Largest College Admissions Scam

The University of Southern California, Yale and the University of California Los Angeles (and other institutions) are facing class action lawsuits filed by two Stanford University students alleging that the schools engaged in massive admissions cheating by allowing wealthy parents to pay bribes in order to gain a spot for their children at some of California’s top schools.

The federal complaint was filed by Erica Olsen, from Henderson, Nevada, and Kalea Woods, from San Diego, California. The two students claim that they were denied a fair opportunity to be admitted to their top college choices and that their Stanford degrees were devalued due to criminal racketeering charges that were leveled by federal prosecutors.

Olsen claims that she applied with standardized test scores she described as “stellar” as well as athletic talent, but her application was denied by Yale. Olsen claims that if she had been aware that Yale’s admissions system was corrupted by fraudulent practices, she would not have wasted the approximate $85 on the application fee. Since she did pay the required application fee, she feels it is her right to complain that she did not receive a fair admissions consideration process; which is what she paid for.

Woods stated in the complaint that she was both exceptional student and a talented athlete, but that she was unaware that the University of Southern California admissions process was unfair and rigged; allowing parents to buy their kids’ way into the university with bribery and dishonesty.

Woods also claims that her Stanford degree is worth less than it should have been as prospective employers now question whether or not she was admitted to the university on her own merit or if she simply had rich parents who purchased her admission.

It is questionable whether or not the students will be able to successfully demonstrate that their Stanford degrees have been devalued due to the recent scandal. Experts suspect it may be less difficult to argue alleged fraud as a result of the lost application fee money, but there is still the question of whether or not people would have applied anyway. If anything, the lawsuit’s discovery process will most likely make it clear that the universities were aware of fraudulent activity in their admissions processes and this information would be beneficial.

Defendants named in the suit include UCLA, USC, the University of San Diego, Stanford, University of Texas at Austin, Wake Forest University, Georgetown, and Yale. The class action seeks certification to include any person who applied to these schools between 2012 and 2018. The class action seeks a return of admission and application fees and unspecified damages to punish defendants and prevent similar conduct in future. The scandal that created the stir involved proctors changing test results, fabricating credentials, and in some cases even doctoring images in order to make non-athletic students appear athletic.

If you have questions about how to file a class action law suit or if you need to discuss how to seek certification, please get in touch with one of the experienced class action and employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

$24M Settlement to End JPMorgan Discrimination Suit

In recent news, JPMorgan Chase and Co. agreed to a settlement to end the discrimination lawsuit from black advisers. Members of the class action lawsuit who alleged discrimination, six current and former employees of the New York-based bank, will receive $19.5 million. The members claimed that because they were black they were sent to less lucrative JPMorgan branches, denied professional opportunities, kept out of a program reserved for richer clientele, and paid less than their white colleagues.

In court documents, the plaintiffs claimed that the racial disparities are a result of the company’s systemic, intentional race discrimination as well as from Chase policies and practices that, due to their disparate impact on African-Americans, are unlawful.

Plaintiffs in the case are: Jerome Senegal (from Texas), Erika Williams (from Illinois), Brent Griffin (from Wisconsin), Irvin Nash (from New York), Amanda Jason (from Kentucky), and Kellie Farrish (from California). As part of the settlement agreement, JPMorgan also agreed to put $4.5 million in a fund set aside to back recruitment, bias training, a full review of branch assignments in light of the case findings, and a coaching program reserved for JPMorgan’s black advisers.

JPMorgan has been hit with alleged discrimination before. Last year the bank was accused of willfully violating the U.S. Fair Housing Act and the Equal Credit Opportunity Act from 2006-2009 as well as a reckless disregard for the rights of a minimum of 53,000 minority borrowers. Other banks have been scrutinized for similar practices.

Last year, a black employee filed a complaint alleging that Goldman Sachs removed her from profitable accounts and overlooked her for promotions. Earlier this year Wells Fargo faced claims of cultivating gender-bias within the organization’s wealth-management operations.

If you need to discuss discrimination in the workplace or if you have other questions about labor law violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Class Action Lawsuit Over Lowe’s Weak Fund for 401(k)

Employees of Lowe’s hardware store who participate in the 401(k) plan claim that the company chose a weak fund that lost plan members money. Benjamin Ritz, plaintiff, alleges that he had all his retirement funds invested with Lowe’s. He further claims that he was financially injured due to Lowe’s choice to move over $1 billion from eight other investment funds into one other fund: Hewitt Growth Fund. Lowe’s made this move on the advice of Aon Hewitt Investment Consulting Fund. Ritz also claims that if Lowe’s had not moved the funds, plan participants would have made $100 million more.

Ritz further claims that this situation represents a violation of the Employee Retirement Income Security Act (ERISA). Ritz seeks damages for himself and other plan participants who were similarly affected by Lowe’s funds transfer. Ritz would like to force the companies to pay for the participants’ losses, force Hewitt to disgorge profits related to the transfer of funds and stop Lowe’s from further investments in the Hewitt Growth Fund in the future.

According the ERISA class action lawsuit, Lowe’s moved the plan funds on the advice of Aon Hewitt Investment Consulting, the owner of the Hewitt Growth Fund. Plaintiffs claim that this behavior was self-serving. They were encouraging the transfer to support the fund, which was exhibiting poor performance. The plaintiff claims that Hewitt put its own interests ahead of the interests of plan participants, which is in violation of ERISA. The plaintiff also alleges that Lowe’s should have been more vigilant – considering quality and reliability of the information received from the advisor, particularly considering Hewitt’s conflict of interest.

The company’s plan reportedly has approximately $5.2 billion in assets, 250,000 participants and has been taking investment advice on their 401(k) plans since 2009.

If you have questions about mismanagement of your plan’s funds or if you suspect your employer of ERISA violations, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Victims of Thomas Fire in California File Class Action Lawsuit Against California Utility

Nine plaintiffs allege that Southern California Edison, a Southern California utility company, sparked the biggest wildfire the state has seen in modern history. The joint suit cited negligence in regard to the fire ignited on the evening of December 6th, 2017.

The plaintiffs claim that if the utility company had behaved in a responsible manner, the Thomas Fire could possibly have been prevented. According to the lawsuit, negligence was apparent when the company performed construction near a facility without necessary safety precautions and in an unsafe manner that resulted in nearby vegetation catching fire. It was also noted that the company failed to maintain its facilities (both overhead electric and communications) in a safe manner and that Southern California Edison did not remove trees and/or vegetation that was encroaching on space surrounding utility poles.

The lawsuit also lists two other Defendants: Ventura City and the Casitas Municipal Water District citing their failure to have functioning generators available when they were needed that would have been able to help with water pressure during the fire.

The Thomas Fire left destruction in its wake. 242,000 acres were burned through. More than 1,000 structures of various sizes and purposes were destroyed or left with extensive fire damage. And thousands and firefighters and countless resources were required to extinguish the flames. The Thomas wildfire left more than 100,000 Californians displaced – their homes either destroyed or unlivable.

One major problem during the fight to extinguish the fire was a lack of water pressure being supplied to fire hydrants located in hillside neighborhoods and canyons of Ventura. Plaintiffs find it shocking that the City of Ventura failed to have a working backup generator on hand when it was desperately needed.

The utility company declined to comment on the pending lawsuit as the Cal Fire investigation is currently in progress. Ventura City’s Water General Manager expressed his sympathy for those who lost their homes and/or were displaced by the Thomas Fire and added that the city doesn’t comment on pending litigation, but that they did commend both the firefighters and Ventura Water crews for their response during the emergency.

The Municipal Water District also declined to comment citing the pending nature of the litigation. The lawsuit seeks unspecified monetary damages.

If you have questions regarding corporate liability, or filing a class action lawsuit in California, please contact one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Young California Startup Logging its 3rd Class Action Lawsuit

A San Francisco, California startup in its early years is logging its third lawsuit. The shopping service, particularly popular with busy, urban professionals, has been repeatedly vilified by some of its own service workers. The company is planning to finalize a $4.6 million settlement in January 2018 to resolve the issues. The California class action overtime lawsuit was filed by employees and independent contractors of Maplebear Inc. (dba Instacart). 

The proposed settlement will resolve issues for which plaintiffs seek resolution including angst over numerous allegations. 

Allegations Made by Plaintiffs Against Maplebear, Inc. (dba Instacart):

• Service Fee Assumed by Consumers to be a Built-In Tip for Drivers
• Workers Collecting Earnings Translating to as Low as $1 Per Hour

Many users of the Instacart service assumed the service fee automatically added to their orders was a built-in tip for drivers, but it wasn’t. Some Instacart workers collected earnings that, after all was said and done, translated to a measly $1/hour. An amount that falls far short of legal minimum wage requirements per laws recognized by the State of California, as well as potential violations of federal overtime laws. 

Instacart was started by Apoorva Mehta, a Canadian and alma mater of the University of Waterloo who spent years working for tech companies such as Blackberry, Qualcomm and Amazon.com before deciding to move on and try his luck at start ups. Instacart was his 21st startup idea. It was aimed at busy, tech-savvy professionals that would benefit from an on-demand grocery shopping platform. The idea quickly gained traction. Orders were placed through the app in a similar fashion to order a car on Uber or Lyft. Instacart had both employees and independent contractors working as “shoppers” who filled orders and delivered them to customers. 

In 2015, Instacart was hit by a class action lawsuit due to misclassification of workers. Eventually, Instacart converted its workforce making most of their shoppers part-time employees with a small number qualifying for benefits. As of today, the startup has 300 full-time employees and tens of thousands of part-time shoppers. 

The company was hit by another class action in 2016, Husting et al. v. Maplebear, Inc. d/b/a Instacart. 

In February of 2017, the company faced another class action lawsuit due to alleged wage and hour violations. 

If you have questions about how to file a class action lawsuit or if you aren’t sure if you qualify for class certification, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.