New Obstacles for California Employers after “Black Swan” Internship Case

July 20, 2015 - California internships in the past have been viewed as a trade-off between well know, desirable employers and young students interested in the industry. The employers get workers and the interested students get experience in their chosen field. Many college students and recent graduates vie for a limited number of highly coveted internship positions in Hollywood and Silicon Valley. Companies offer unpaid positions (internships) and students and new grads vie for the chance to start building a relevant network. The simultaneously beneficial nature of the internship means there has been a limited amount of litigation related to the arrangements. But as of 2013, there’s a ruling that is affecting the symbiotic relationship between employers and interns.

In 2013, a federal District Court in New York found that interns of the movie Black Swan were entitled to pursue a class action. The class action seeks millions of dollars for unpaid wages, overtime, etc. Studios and tech business employers are taking note.

With Glatt v. Fox Searchlight Pictures, Inc., the U.S. Court of Appeals for the Second Circuit attempted to answer the basic question, what is an intern? There are interns across the county, but there is a surprisingly limited amount of actual law related to this particular workplace relationship. The Second Circuit’s decision actually turned on a case from almost 70 years ago regarding railroad apprentices. California employers are discovering that the direction this particular discussion is taking holds both good news and bad news for the future of their workplaces.

The Good News: According to the Second Circuit’s decision, wage-hour cases in relation to interns are rarely subject to resolution in a class action or collection action due to the highly individualized nature of the setup.

The Bad News: Fox, the studio that produced the movie, convinced the court to impose a test to determine who the primary beneficiary of the intern/employer relationship is. This test was to be used to determine whether the worker was an intern or an employee. The court put together 7 non-exhaustive questions for a trial court to consider when attempting determining if a worker is an intern or an employee.

1. Is there a clear understanding that there is no expectation of compensation for work performed?
2. Does the internship offer any hands on training or clinical experience as would be provided by a school?
3. Is the internship a part of the coursework of the “intern”/will they receive academic credit?
4. Does the internship coincide with the academic calendar?
5. Is the internship limited to the time period during which the setup would provide beneficial learning opportunities?
6. Does the intern’s work compliment or replace the work of paid employees?
7. Is there a clear understanding that the intern is not entitled to a paid job once the internship is completed?

The primary beneficiary test is bad news for employers who offer internships with limited educational benefits for interns or for those whose interns are performing work that would be completed by employees in their absence. The opinion of the court indicated that the more menial the work assigned to an intern, the less likely that they would legally be considered an intern. Employers, particularly those in tech and entertainment industries, are finding that they need to rework their model in order to suit this new finding. It’s the first significant appellate opinion on this issue, but it will not be the last. There are other intern related cases on appeal and awaiting decision by other courts throughout the nation. In California, the opinion will probably have a fairly lasting impact. California employers are already hustling to bring their internship programs up to snuff. Interns considered employees might very well begin seeking to recover unpaid wages, overtime, etc. in accordance with the penalties of violating the California Labor Code.

If you are unsure what constitutes a valid internship or if you need additional information regarding being misclassified as an intern instead of an employee, contact the southern California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Employers Reclassifying Workers to Save Money

July 16, 2015 -Courts and regulatory agencies are increasing the scrutiny coming at employers regarding the relationship with their workers: businesses and independent contractors, contractors and subcontractors, employers and employees. In response, many employers are utilizing different tactics to classify their workers; reclassifying workers to save money by taking them off formal payroll and lowering costs. 

For years, employers have shifted work off their actual employees and on to independent contractors. This relabeling of the workforce with slight alterations to their work conditions left many in court or owing settlements. As this misclassification of employees as independent contractors is receiving such intense focus across industries, many businesses are now turning to other types of employment relationships:

Setting up Workers as Franchisees

Setting up Workers as Owners of LLCs

Both of these methods help to shield the business from tax and labor statutes that are attached to the formal payroll for actual employees of the company.

These new tactics have state and federal agencies aggressively putting a stop to the setup: passing local legislation to address the issue, filing briefs in worker’s lawsuits, and closely keeping an eye on the increasing popularity of what regulatory agencies see as an equally questionable alternative to the independent contractor employment model that has experience such a crackdown.

As employers are finding it more difficult to save costs by avoiding an official payroll, workers are finding that they are required to assume more risk. They suddenly need to shoulder more of the burden for health care premiums, retirement income and even job security. This shift in responsibility from the employer to the worker seems to be spurring the major influx of misclassification suits and allegations.

Employers are seeking more creative ways to misclassify workers. If you feel that you are misclassified or you need to discuss the issue of misclassification with a southern California employment law expert, contact an employment law attorney at Blumenthal, Nordrehaug & Bhowmik.

$8.7 Million Settlement Paid to 19,000 Temps for Pay Stub Claims Against Manpower, Inc.

July 15, 2015 -Pay stub claims filed by over 19,000 temp workers against Manpower, Inc., an operator of a temporary-employment agency, resulted in a settlement of $8.7 million. A California federal judge approved the settlement amount on June 20, 2015. The workers who filed suit against the temp agency claim that Manpower, Inc. did not provide them with accurate wage statements as required by law. 

U.S. District Judge Jon S. Tigar granted final approval of the settlement as well as partially granting the motion plaintiffs’ made regarding their attorneys’ fees, costs, etc. The agreed upon settlement amount falls between 30 and 35% of the recovery that the counsel of the proposed class estimated as a likely result of the case.

What is a Pay Stub Claim?

California labor law lays out requirements for California employers. They are required to provide certain information on each employee’s paystub. The failure to provide the required information can result in a paystub claim or paystub violation lawsuit. These can result in fees or penalties charged to the employer. In the case of Manpower, Inc. the consequence was quite substantial.

For Instance: Information that Must be Included on an Itemized Statement

1. Name of the employee
2. ID Number (i.e. last four of social security number)
3. Gross wages
4. Hours worked
5. If employee is paid on piece rate basis – number of units and piece rate
6. Deductions
7. Net wages
8. Pay period by date
9. Name and address of employer
10. Hourly rates and hours worked at each specified rate 

If you need to talk to a southern California employment law attorney regarding potential pay stub violations, contact Blumenthal, Nordrehaug & Bhowmik.

California Court of Appeals Decision Reviewed by California Supreme Court: Meal Breaks for Hospital Employees on Long Shifts

July 14, 2015 - The California Supreme Court will review the decision made by California Court of Appeals regarding Gerard v. Orange Coast Memorial. The case is regarding providing meal breaks for hospital employees scheduled for long shifts. The meal-break suit outlines the dispute over whether or not an Industrial Welfare Commission order that allows health care workers to waive meal periods provided during long shifts actually conflicts with state law.

The ruling of the California Court of Appeals invalidated the portion of California’s Industrial Welfare Commission or IWC Wage Order No. 5. This particular portion allows non-exempt health care employees to waive their second meal break in shifts that are over 12 hours. It was seen as a landmark decision for both health care workers and their employers. Health care employers have relied on the Wage Order provision as do many other California employers. 

The Gerard case plaintiffs sued under the California Private Attorney General Act on their own behalf and on behalf of other employees in similar situations. They allege that (notwithstanding the Wage Order) Orange Coast Memorial was violating California State Labor Code. Employees at Orange Coast Memorial consistently work 12-hour shifts. Occasionally employees at the medical center work shifts longer than 12 hours. Any hospital employee that worked shifts over 10 hours was able to sign a written waiver of one of their two provided meal periods during long shifts; even if the “long” shift was 12+ hours.

The Court of Appeal addressed the seeming contradiction between IWC Wage Order No. 5 and the California State Labor Code Section 512 regarding meal periods and long shifts. The Court of Appeal ruling is troubling in its reversal of the rule health care facilities/employers rely on regarding non-exempt workers. The state’s high court will take up the case.

If you need additional information on California State Labor Law, IWC Wage Order No. 5 or meal breaks required by law in the workplace, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik. 

Cooper Wrongful Termination Lawsuit: Set for September Trial

June 29, 2015 - Former Lafayette Parish School Superintendent Pat Cooper is scheduled to go to trial the week of September 21^st. Cooper was fired from his job by the Lafayette Parish School Board in November. About two weeks after the board made the decision to fire him, Cooper filed a wrongful termination lawsuit.

In his lawsuit, Pat Cooper claims wrongful termination on the basis that he was fired without cause. He claims he was ousted from his position for political reasons as well as plan old vindictiveness. The board already spent over $120,000 in legal fees prior to firing Cooper in November.  

Wrongful Termination has become a very widely used term. Generally speaking, it can mean many things, but legally speaking, it refers to a very specific situation in which very specific consequences may follow for employers involved. Many individuals are terminated from work positions. A lot of these workers who have lost their jobs may feel that their job loss was “wrongful.” But the legal definition of wrongful termination is more limited that the general meaning the combined words may indicate upon first hearing the phrase. Legally speaking, wrongful termination refers to circumstances in which an employee is fired from their position for an illegal reason. This could include being fired for discriminatory reasons (race, religion, age, gender, etc.), being fired in violation of employment contracts in place, workplace retaliation, etc.

If you need additional information regarding what constitutes wrongful termination so you can determine if you were wrongfully terminated from your job, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.

Guide Dog Discrimination Lawsuit Against Uber Moves Forward

June 22, 2015 - There has been a recent wave of complaints aimed at the popular driving service, Uber (and similar services). In response, there could be a new ruling that raises the bar for accountability amongst such driving services. In fact, the ruling could raise the bar for all tech companies; not just those related to ride-hailing services.

A federal judge in San Francisco allowed the National Federation of the Blind of California (NFB) to file suit claiming that Uber actively discriminates against visually impaired guide-dog users. Allegations indicate that Uber drivers have refused to provide rides for passengers who have service animals in use, which is in violation of ADA laws. The suit claims that drivers have also denied transport to blind individuals without service dogs. In addition, other instances are cited in which the blind individual and their service dog were allowed to utilize the ride service, but the service animals were allegedly mistreated during the drive time. The original civil complaint cites over 30 instances of discriminatory action towards blind people and/or their service animals.

One instance of harassment involved the Uber driver forcing the guide dog of a blind woman named Leena Dawes into the trunk of the sedan before transporting Ms. Dawes. When she realized where the Uber driver had placed her dog, she asked repeatedly if they could pull over so she could retrieve her dog from the trunk, but the Uber driver denied her requests. This is just one of the many instances noted in the suit.

Uber requested the case against them be dismissed on the basis that due to contracts in place, users are required to take complaints/disputes to arbitration and argue as individuals not in the form of a class action lawsuit. They also argued that due to their unique service, they can’t be classified as “public accommodation” and therefore shouldn’t be held liable for ADA requirements.

This reasoning was tossed out by a federal judge who stated that the NDF could more forward with the suit on behalf of those members who have not yet signed the mentioned Uber contracts. This refers to class action lawsuit members who have not necessarily used the Uber service yet.

Other related legal news includes:

• Uber came under fire last March when their app was rendered useless to blind users after a software bug. They failed to fix it for a number of months.
• An ongoing suit in Texas argues the question of whether or not Uber offers sufficient access for users in wheelchairs.
• Lyft was sued as well, but settled out of court.
• Leap, the San Francisco private bus start up with a $6 fare, found themselves the focus of a suit due to the fact that they don’t provide wheelchair access.

Services such as Lyft, Uber and Leap are important as they make integration more convenient and accessible (through low pricing) for vision-impaired individuals. Most new smartphones’ built-in screen reading functionality makes the app based ride services an excellent option that allows for greater independence when traveling.

Many are hoping that the San Francisco ruling will set a precedent that will leave new, app-based services such as Lyft and Uber, etc. accountable to the same civil rights laws as other businesses and ride services.

For additional news and information on discrimination lawsuits or class action suits, contact the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.

Alleged Discrimination: Female Farmers Attorney Employee Sues

June 18, 2015 - A class action lawsuit was filed by Lynn Coates against Farmers Insurance on behalf of female attorney employees containing allegations that the insurance conglomerate has policies and procedures in place that are discriminatory against women in the workplace.

Accusations made in the class action lawsuit indicate that the Los Angeles, California based insurance company was illegally paying their female attorneys significantly lower wages than their male attorneys that were performing the same work duties.

The suit claims that Farmers fails to compensate female attorneys on staff in equal measure when compared to their male counterparts performing equivalent work and that they actually systematically offer female attorneys less pay than the men. The men are also disproportionately offered higher profile work assignments, more opportunities for promotions and pay increases as well as workplace recognition for accomplishments on the job. In short, the suit claims that Farmers advances their mail attorneys’ careers much faster than that of their female attorneys. The suit even goes so far as to claim that rather than being treated equally, the female attorneys are treated more like support staff for the male attorneys.

• Coates was paid less than male attorneys who had decades less experience on the job.
• While Coates was working for Farmers, younger, male attorneys received the best cases.
• Procedures and practices discriminating against women have been in place at Farmers since the 1970s.

A previous lawsuit was filed in the 1970s by the Secretary of Labor against Farmers claiming unequal pay, Marshall v. Farmers Ins. Co., Civil Action No. 75-63-C2. In this suit, Farmers’ salary policy was found to be discriminatory. Specifically, it was found to exclude women in the workplace from appropriate promotion, etc.

Coates, the original plaintiff in the current suit against Farmers, is a resident of California. She worked in the Farmers’ San Jose branch legal office in the 1990s and again in 2010. Coates received positive reviews regarding her work and periodic raises, but even so, male attorneys on the job with decades less experience were making significantly more for comparable work. One male attorney on staff with similar experience and equivalent workload was making up to 50% more than Coates.

As soon as Coates became aware of the pay discrepancy, she attempted to discuss it with a supervisor. As a result, she was demoted from her position as an attorney to that of a paralegal. Coates states that the demotion was in retaliation for complaining about the unfair pay policies.

If you feel that there are discriminatory policies or unfair practices in place at your workplace, please get in touch with the southern California employment law experts at Blumenthal, Nordrehaug & Bhowmik.