Following Years of Complaints, Uber Proposes a New Minimum Wage for Drivers with a Catch

A California bill that could be a massive financial blow to Uber and Lyft’s profits is getting closer and closer to becoming a law. In response, the ride-hailing companies are increasing their lobbying efforts in an attempt to block it or destroy it once and for all. Uber emailed drivers and riders this month laying out their own proposals to offer their drivers benefits and protections as requested, but is there a catch?

In the email, Uber stated that they were advocating for a new policy to strengthen protections for rideshare drivers by creating a minimum hourly rate (approx.. $21 per hour while on a trip), including the costs of drivers’ average expenses, offering their drivers access to paid time off, sick leave and compensation if they are injured on the job. They also stated the new policy change suggestions would empower their drivers to have a collective voice and make decisions about their work.

The email is on par with prior comments the company made since the bill was drafted earlier this year, but it added a new specific minimum wage mention. According to information in a 2018 study from Schaller Consulting, rideshare drivers for Uber and Lyft spend 63% of their miles driven (on average) with passengers in the car. This number only applies specifically to when a driver has a passenger in the car or is in route to pick a passenger up (63% of the time). And this isn’t the only part of Uber’s proposal that activists in support of drivers’ rights find misleading. The real take home pay being offered is significantly lower than the apparent $21/hour.

The bill in question, Assembly Bill 5, was passed by the legislative body in May 2019. It depends on the Senate’s appropriates committee to bring it before a full vote of the second chamber. The bill would institute a test to determine worker status as employee or independent contractor. The test contains three parts: determining if a worker is free from the company’s control or direction while they perform job duties, determining if the worker is performing work that falls outside of the hiring group’s typical business, and determining if the worker has their own independent business outside the job for which the entity hired them.

The passage of the bill could be disastrous for the huge gig companies offering ride-hailing services.

If you have questions about your employment rights as a driver in California or if you need to find out how to file a wage and hour lawsuit, please get in touch with one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik and DeBlouw LLP today.

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.

$90M Spent by Popular Ride Share and Food Delivery App Companies to Avoid Better Pay for Drivers

Uber, Lyft, and Doordash…all familiar names to most Americans. The three have not only become household names because of the services their companies provide, but because they seem to be constantly in the news facing lawsuits from their drivers. Most recently, Uber, Lyft and Doordash are actively fighting against legal actions seeking better pay for their drivers. In fact, they will spend an estimated $90 million just to avoid paying their drivers higher wages.

The three companies, along with other gig companies, have spent months attempting to talk the California legislature out of passing a bill that would effectively strengthen the employment protections of their “drivers.” The bill is now on the verge of final passage with a solid endorsement from the governor. And the chance to talk the legislature over their way of thinking seems to have come and gone. In response, the three powerful gig companies have contributed $30 million each to support a ballot initiative protecting them from the requirement to classify their drivers as employees.

This makes the campaign one of the most expensive in the history of California, right behind the $105 million campaign by dialysis companies last year to beat Proposition 8 because it would have placed limits on how much they charge for their services. In comparison, supporters of the measure were only able to gather $20 million.

The action taken by Uber, Lyft and Doordash creates a virtual $90 million war chest and is another example of how the “big money” is usually not aligned with the interests of the ordinary citizen. This type of big spending is usually a bargain for the donors involved. They stand to gain a lot more from defeating this type of ballot measure that goes against their interests (or supporting the passage of a bill that enriches them) than they are required to spend to make a difference. The $30 million contributions per gig company seems far less substantial when compared to the annual revenues of the companies actively supporting the campaign.

Uber collected $15.7 billion in revenue in the second quarter (that ended June 30th).

Lyft collected $867.3 million in revenue in the second quarter (that ended June 30th).

Both the companies are losing significant revenue (Uber lost $5.2 billion and Lyft loses $644 million in the most recent quarter), but their losses would have been much more significant if they were required to cover the cost of their drivers’ fuel, vehicle maintenance, maintain workers compensation coverage, pay taxes, etc. These are type of expenses that would require reimbursement if the classification of their drivers were to leave them eligible for employment protections under FLSA.

If you have questions about unpaid overtime or if you need to find out how to file a California overtime lawsuit, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik and DeBlouw LLP today.

National Implications of Unpaid Home Care Overtime Lawsuit?

A Los Angeles County unpaid home care overtime lawsuit could have national implications. The Ninth Circuit Court recently ruled that home care providers paid through the state or county can file suit for unpaid overtime citing the Fair Labor Standards Act (FLSA). Prior to this case, workers paid by the state or county to provide home care were exempt from overtime laws at both the state and federal level.

The introduction of a new Department of Labor (DOL) regulation changed the scenario in 2015, but the change didn’t occur without some kickback. The new regulation was set to go into effect on the first day of 2015, but a federal court in Washington, D.C. blocked it. This ruling was overturned later that same year. In response to the legal action, the DOL decided the new regulation would not be enforced until Nov. 12, 2015 (even though it was initially set to go into effect on January 1, 2015).

In California, compliance with the new regulation was pushed until February of 2016. This prompted an LA County home care worker (In-Home Supportive Services (HSS) program employee) to file a lawsuit to recover 13 months of unpaid overtime (overtime that would be due in accordance with the original “effective” date of the new regulation, Jan. 1, 2015). LA County moved to dismiss arguing that the county was simply acting as part of the larger state and under the 11th amendment, had immunity in this situation.

District court ruled in favor of LA County and stated that home care workers could not recover wages from prior to Nov. 12, 2015, the date “enforcement” started. Both parties filed an appeal, escalating the case to the Ninth Circuit Court.

The Ninth Circuit Court judge maintained that the county had 11th amendment immunity and also that home care service providers could file suit to recover unpaid overtime wages earned as of the original Jan. 1, 2015 effective date of the new DOL regulation. The ruling could mean a significant financial blow for LA County since the county currently employs an estimated 170,000 home care workers in the IHSS program. Additionally, the implications could easily reach outside of this particular case in this specific county. The ruling could open the door to further collective actions filed by home care workers employed through various government programs with more collective actions likely to pop up in different counties.

William A. Dombi, President of the National Association for Home Care & Hospice (NAHC) disagrees. He went on record stating that holding county-level government employers liable for overtime wages during a time period when federal court specifically vacated the requirement is unfair. He also noted that any impact would be limited by the two-year limit on filing FLSA actions.

If you have questions about overtime violations or if you need to discuss your rights as an employee under the Fair Labor Standards Act, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik and DeBlouw LLP today.

The Hooters Sexual Harassment Lawsuit Settlement

In recent news, two male employees at a Hooters restaurant claim they were sexually harassed by a male boss while on the job and then retaliated against when they complained about their boss’s alleged misconduct. Both filed sexual harassment lawsuits against the Hooters restaurant chain. The first plaintiff, Paul “PJ” Cagnina, obtained an undisclosed settlement in May 2017. The second plaintiff, Scott Peterson, appeared to come to a settlement regarding the case in July 2019. 

On July 16th, Hooters attorneys filed paperwork with the Los Angeles Superior Court stating that the part of the case filed by Scott Peterson was resolved. No terms of any settlement were divulged.

The original suit was filed in March of 2016 seeking unspecified damages and a court order requiring Hooters to stop allowing sexual harassment and retaliation on the job. In court papers, the company stated that they have a strict policy the forbids any form of sexual harassment, discrimination or retaliation and the attorneys for the defendant argued the plaintiffs did not suffer any damages.  

Peterson, one of the plaintiffs in the case, claimed his boss touched him inappropriately, talked about him in a sexually demeaning way while they were in meetings with Hooters general managers, and sent photos to the plaintiff of a female co-worker claiming to have slept with her.

Cagnina, the other plaintiff in the case, claimed that his boss threw him down on the ground in the parking lot after a bikini contest at the Hooters in Costa Mesa and engaged in a simulated act of sex with the plaintiff in front of other people still on site. Cagnina also claimed that his supervisor repeatedly tried to get him to go skinny dipping with women who worked at the restaurant who were Cagnina’s subordinates on the job. Cagnina claims that when he was being honored as a new general manager, the boss publicly referred to unflattering and sexually demeaning nicknames like PGay and “cagina.”

Both plaintiffs claimed they experienced retaliation in the workplace after they complained about the boss’ alleged behavior with Peterson claiming he was ultimately fired as a result of complaining about the misconduct.

If you need to file a discrimination lawsuit or if you have been wrongfully terminated, the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Get in touch today so we can help you protect your rights.

Recent News Labels Litigation Trend “Shakedown” Lawsuits

In response to a recent uptick in the number of lawsuits – particularly employment law claims against restaurants, the restaurant industry is scrambling to come up with standard advice for owners and managers in the industry. In response to what they are labeling "shakedown" lawsuits, restaurant owners and managers are encouraged to employ precautions and counter strategies to mitigate and avoid lawsuits. Corporations and business owners desperately want to avoid the costs of paying out thousands or even millions in settlements due to class action employment lawsuits.

Common Alleged Violations Cited in Class Action Employment Suits Against Restaurants:

Discrimination Lawsuits: While many businesses have inclusive company policies, diversity standards, clear, supportive LGBTQ policies, etc. this does not guarantee that managers and supervisors will behave in accordance with stated company policy. Many companies with positive, inclusive, and diverse standards supported by written and enforced company policy still face harsh allegations due to other employees, supervisors and managers who are acting against company policy as a representative of the company.

Fair Credit Reporting Act Lawsuits: Employers are required to offer job applicants and employees with notice when information is collected through third party credit reporting agencies including credit reports, background checks, prior history info and ownership asset reports. As the general public becomes more aware of their rights to know prior to having their data accessed, the number of lawsuits citing fair credit reporting violations increases.

Fair Labor Standards Act Lawsuits: Fair Labor Standards Act (FLSA) lawsuits focus on wage and hour violations with the most common being overtime violations and minimum wage violations. One of the main issues that crop up when employees claim FLSA violations is misclassification. Employers seeking to save money and maximize their workforce sometimes willfully deny their workers benefits and pay they have a legal right to by misclassifying them as exempt or as independent contractors.

If you have been misclassified on the job, please get in touch with Blumenthal Nordrehaug Bhowmik De Blouw LLP. Our employment law attorneys have the resources and experience companies fear in litigation.

Jones Day Gender Discrimination Case Only Gets Bigger

Recent news in the Jones Day gender discrimination indicates the case will only get bigger as a former New York associate came forward. The lawsuit filed by former Jones Day associates has now spread to New York. The original suit was filed by two plaintiffs and four anonymous Jane Doe plaintiffs. The plaintiffs alleged that Jones Day supported a “fraternity culture” and that their “black box” compensation system resulted in women receiving significantly lower pay than male counterparts. Jessica Jardine Wilkes previously spent time working at the Jones Day Menlo Park, California office and joined the suit a few weeks ago. More recently, Katrina Henderson joined the suit.

Henderson is the latest former Jones Day associate to come forward and the first to come forward after working for a Jones Day office in New York. She spent over two years working for Jones Day before leaving for a job in-house. She appears to have been employed by the firm’s New York office from October 2013 through July 2016. At that point, she joined Pixar Animation Studios starting August 2016. She recently moved from Pixar to Amazon Studios in Santa Monica, California.

The parties continue to argue over whether or not the Jane Doe plaintiffs should be allowed to retain their anonymity. The firm insists the plaintiffs should reveal their names, but the plaintiffs assert they should maintain anonymity for the duration of the litigation. One plaintiff compared her situation to that of a whistleblower.

If you have are experiencing gender discrimination on the job or if you need to file California gender discrimination lawsuit, please get in touch with the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP so we can help. With numerous locations, including our San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange, and Chicago employment law offices, we have the resources, the knowledge, and the experience to successfully advocate for workers and protect you from labor law violations.