Increasing the Threshold and Amending “Exempt Duty” Definitions

Possible changes brought about by the Obama administration have been heavily discussed recently. Experts are expecting a significant number of American workers to be eligible for overtime pay if the proposed changes are to take effect. Changes under discussion are: raising the threshold and amending how exempt duties are defined.

The Economic Policy Institute estimates that increasing the threshold to $42,000 would make 3.5 million more workers eligible for overtime pay and that increasing the threshold to $52,000 would mean 6.1 million workers would qualify for overtime pay. Advocates for a threshold increase like EPI and the National Employment Law Project, would very much like to see the threshold raised to a minimum of $51,168 (which would be $984/week). Doing so would provide overtime eligibility to 47% of workers. Compare that to 12% eligibility according to current employment law and 65% eligibility in 1975.

Advocates would also like to see the Department of Labor include more specifics regarding what makes a position exempt from overtime. As it stands, employment law defines eligibility for classification as an exempt administrative employee as having a primary duty requiring that the worker “exercise discretion and independent judgment with respect to matters of significance.” Advocates for employment law change suggest that this is completely meaningless since any job requires SOME independent judgment. Suggested changes include specifying that more than half of a worker’s time needs to be spent performing “exempt duties” to prevent employers from offering “hollow” promotions with managerial titles, little to no pay increases, and even less managerial power.

Employers are concerned because with more generous overtime pay protections, their payroll costs will increase. The end result from the company’s perspective would be paying time and a half (overtime pay) to more eligible workers or they could potentially decide that it’s more cost effective to hire additional workers to cover the additional work hours needed while preventing current employees from getting overtime hours. Representatives of the U.S. Chamber of Commerce argue against advocate suggestions stating that one income threshold for the entire country is too broad and won’t work. They suggest applying geographically specific thresholds instead.

With big changes to the income threshold as is being contemplated, employers would be required to reclassify millions of salaried workers to hourly. That could result in employees losing benefits. Morale could suffer in the workplace as well. For instance, salaried workers have more leeway regarding their hours. Previously exempt, salaried employees who are changed to hourly as a result of the proposed employment law changes may see their pay docked for midday appointments, or could be required to use a vacation day to cover the absences that used to be a slight adjustment to their schedule of salaried work. Such changes could also negatively affect workers who are accustomed to benefit from merit-based bonuses, salary level vacation day packages, etc.

For more information on what the proposed changes might look like in your workplace, check back soon for up to date employment law news updates at Blumenthal, Nordrehaug & Bhowmik. 

Misclassification of Insurance Claims Adjusters in California Results in Class Action Lawsuit Settlement

The misclassification of insurance claims adjusters led to a California class action lawsuit. The seven plaintiffs in the case prevailed after a long, embittered legal battle. The plaintiffs were former claims adjusters for Liberty Mutual Insurance Company who filed for the recovery of unpaid overtime as well as related penalties.

The description of the legal battle that ensued as “long” and “embittered” is unarguable. The litigation took thirteen years. Litigation was intense and many say, exhaustive, but a settlement was finally secured for the plaintiffs - Liberty Mutual agreed to a settlement amount of $65 million to compensate more than 1,600 claims adjusters (current and former) for unpaid overtime compensation. 

Timeline of Events: California Claims Adjusters Class Action Lawsuit

May 2004: Trial Court granted plaintiffs’ motion for class certification. Representation was appointed for the class.

Early 2005: Discovery completed and plaintiffs move for summary adjudication on defendants’ affirmative defense that plaintiffs and class members were exempt from overtime pay under California labor law. Defendants counter with a motion to decertify the class and two motions for summary judgment.

October 18, 2006: Trial court issued a decision granting in part the defendants’ motion to decertify and denying the plaintiffs’ motion for summary adjudication regarding the liability issue.

August 16, 2007: Court of Appeal issued its first decision that granted plaintiffs’ motion for summary adjudication and denying defendants’ motion to decertify class.

December 29, 2011: California Supreme Court granted defendants’ petition for review and found that the Court of Appeal applied the wrong legal standard and remanded the case to the Court of Appeal for additional proceedings.

July 23, 2012: After the case returned to the Court of Appeal where they again ruled in the plaintiffs’ favor. They found that defendants were liable for unpaid overtime and that the trial court erred in decertifying the class. Defendants sought review by the California Supreme Court, but they declined to hear the defendants’ petition. This left the plaintiffs’ victory intact.

September 2012: The case returned to trial court where the defendants’ counsel argued that the Court of Appeal’s decision was not binding on the trial court.

June 2013: Prior to resolution, parties agreed to resolve all claims in exchange for $65 million settlement from Liberty Mutual.

June 2014: Court granted final approval of the settlement with no objections from class members.

This outcome combined with the size of the recovery is especially notable in light of the fact that over the past 10 years, almost every other court hearing similar cases involving misclassification of insurance claims adjusters found in favor of the defendants.

For more information on California employment law or California class action lawsuits, contact Blumenthal, Nordrehaug & Bhowmik. 

Wrongful Termination Settlement: Ravens pay Ray Rice $1.588 Million

While the details of the January 2015 settlement reached between the Ravens and their former star running back, Ray Rice, were undisclosed, sources indicate that the sides ended up settling for $1.588 million. The star running back was suing for back pay from his $3.529 million base salary for the 2014 season. The football player received a total of $26.588 million on the contract that was signed into being in July of 2012. (This included his $15 million bonus for signing).

Ray Rice’s $35 million contract was abruptly cancelled in September 2014 after graphic video coverage of a domestic violence incident surfaced online. Rice filed a grievance in October 2014.

After reaching a settlement with Rice, the Ravens released a statement regarding the situation indicating that the resolution was intended to put an end to the grievance with the former star running back and that they wanted to put it all behind them and move forward. They also made sure to “wish Janay and Ray Rice the best.”

Rice was a three-time Pro Bowl selection. Since the incident, Rice has been reinstated from his indefinite league suspension (that began in November of 2014). He hasn’t worked out for or even visited an NFL team since the problems began, but he hopes for a second chance at the game and works out regularly on his own in preparation for that opportunity.

For more information about southern California employment laws and how to fight wrongful termination, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.

Wrongful Termination: Former Torrington Teacher Continues Fighting Termination

Giulio Romano, a former Torrington High School teacher of Latin and Italian, sued the Torrington School District for wrongful termination in 2013. The case has come to a halt, but may not be over as Romano vows to keep fighting the “wrongful termination.”

Romano is an Italian native, but was living in Houston, Texas prior to accepting the position offered by the Torrington Board of Education. When he accepted the position, he moved across the country. He began teaching at the beginning of the 2012-13 school year and was fired in February 2013 after only 6 months on the job. Documentation of the case indicates that the school district fired Romano because he used inappropriate language during the course of his teaching and offended several students. 20 of the 60 students signed up for his class dropped the course. When Torrington High School Principal, Joanne Creedon, requested a letter explaining his conduct, Romano failed to comply. The school district also indicated in case documentation that the plaintiff failed to obtain his Connecticut State Teacher Certification.

Romano claims that the school should have expected delays in obtaining his teacher certification as he was educated outside of the country. He also claims that the school district broke an implied contract when he was terminated from the teaching position because they had agreed to assist him in obtaining the necessary certification.

After the case was dismissed in Litchfield Superior Court, Romano filed an appeal. On March 5^th, 2015, the court upheld the dismissal. After the 2^nd decision for dismissal, Romano still intends to pursue the suit against the Torrington School District, vowing that the case will be heard in a court of law. He insists that the case was dismissed due to a technicality regarding the proper informing of necessary parties of the intention to file a lawsuit. When Romano originally filed suit, he notified the Torrington Superintendant, Cheryl Kloczko, but he did not notify the city clerk (which is required if the party being sued includes a board).

In an attempt to remedy the situation, Romano is considering re-filing the lawsuit and notifying the necessary parties as required.

For additional information on wrongful termination or to determine if employment law applies to your recent termination, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.

Wrongful Termination Lawsuit Settled with $4 Million Settlement from the Catholic Church

A former high school football coach, Christopher Cerbone, filed a wrongful termination lawsuit against the Catholic Church in Sacramento in response to his termination after reporting that some of the older players were sexually harassing some of the younger members on the team. The church agreed to pay $4 million to settle the suit. This settlement is in addition to the $900,000 a jury already ordered the church to pay the coach. The sexual harassment the coach reported was a form of “hazing.” 

The church offered the $4 million settlement while the Sacramento County supreme court’s jury was deliberating whether to award punitive damages in response to the suit. The jury later advised reporters that they were considering awarding a lower amount closer to $1 to $2 million.

The hazing incident that led Cerbone to report the sexual harassment occurred at a Catholic high school in Vallejo in December of 2012.

Southern California employment law is designed to protect California workers who are doing their jobs. If you feel unsafe in the workplace or you feel that someone you work with is in an unsafe environment or situation, contact us for information on how to make it right. Many workplaces have policies regarding discrimination that go ignored until workers seek outside legal counsel. If you are a victim of harassment or if you have been victimized by a wrongful termination, you have the right to speak up for yourself. Doing so, with legal counsel on your side will mean getting results. If you have questions regarding sexual harassment or what constitutes wrongful termination, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik. 

Disability Discrimination Lawsuit Filed by School Teacher Diagnosed with Breast Cancer

In Swanson v. Morongo Unified School Dist., 2014 WL 7399317 (Cal. Ct. App. 2014), Lauralyn Swanson, schoolteacher for the Yucca Valley Elementary School, sued for discrimination based on medical condition. Swanson claims that after she was diagnosed with breast cancer and had a mastectomy the district’s board of education voted against renewing Swanson’s teaching contract. She alleged a denial of reasonable accommodation and a refusal to engage in the interactive process.

While the trial court initially granted the Morongo Unified School District’s motion for summary judgment, the decision was reversed by the Court of Appeal, holding that there were triable issues of fact regarding claims made by Swanson in the suit. Specific triable issues of fact included evidence that after Swanson provided the school district with information regarding her condition and took a medical leave in order to receive proper medical treatment, the district put in place a course of conduct that was specifically designed to set Swanson up to fail with difficult assignments and a lack of appropriate resources. When she failed to successfully fulfill the impossible requirements, the district later used Swanson’s performance as an excuse for their decision not to renew her teaching contract. 

The Court also decided that the school district failed to meet its burden to negate an essential element of Swanson’s failure to accommodate claim. They didn’t present appropriate evidence exhibiting that a second grade position was not available or proof that it was not a reasonable accommodation/that the alternate positions offered to Swanson were reasonable allowing her to perform the necessary job functions to succeed. It was also held that the district failed to provide any proof that they engaged in appropriate dialogue with Swanson as required by the Fair Employment and Housing Act.

If you would like to discuss workplace discrimination based on medical condition, please get in touch immediately. Blumenthal, Nordrehaug & Bhowmik are the southern California employment law experts and can help you reach a resolution. 

Record Number of OSHA Whistleblower Investigations

OSHA has officially reached a milestone in federal whistleblower cases: they have investigated over 3,000 cases in a fiscal year. It’s the first time they have handled this many cases in one fiscal year. According to OSHA, they took on 3% more cases in 2014 (fiscal year) than they did in 2013 (fiscal year). The actual number of whistleblower complaints wasn’t disclosed by OSHA, but a study conducted by Bloomberg BNA in 2014 indicated that only 41% of the complaints made passed the initial screening process and resulted in further investigation (from cases filed 2011-2013).

The meaning behind the increase in cases investigated isn’t clear, but some point to the increased amount of media attention that is being given to substantial settlements and awards being offered to plaintiffs in whistleblower cases. The new high in case filings aside, OSHA’s Whistleblower Protection Advisory Committee’s chairperson, E. Spieler, indicated that there had been predictions that the caseload would increase at OSHA due to the introduction of online filing for whistleblower complaints that occurred in 2013. In combination with the release of the online filing capability, findings in late 2013 by the U.S. Supreme Court on whistleblower provisions (Sarbanes-Oxley Act (SOX)) hold that statutory protection extends to a public company’s private contractors/sub-contractors.

The bulk of the cases were related to safety:

• 1,729 filed under the anti-retaliation clause, Section 11(c)
• 463 filed under the STAA
• 351 filed under the Federal Railroad Safety Act

The growth of cases could spring from a 2014 memorandum of understanding between FMSCA and OSHA. The memorandum put OSHA in charge of handling cases involving commercial vehicle drivers making allegations of discrimination based on the reporting of safety issues.

For more information on safety regulations and standards in California workplaces, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.