Whistle-Blower Points the Fraud Finger at Banc of California

Banc of California, Inc. is under investigation by U.S. regulators. The investigation follows a situation in which a short seller linked the institution to an imprisoned con man, alleged inflated profits and a top executive who allegedly supported his stripper habit with company funds. Allegations were detailed in a whistle-blower lawsuit filed by Heather Endresen, a former managing director for the Small Business Administration’s Loan Program.

According to the lawsuit, a decision was made at management level that reversed accrued employee bonuses, which caused Banc of California Inc. to carry over revenues generated in 2016 improperly in order to create a “false” representation of profits for the year. After complaining about the shifting of the pool of bonuses, as well as the inappropriate behavior of the then-CFO, Francisco Turner, Endresen claims she was wrongfully terminated.

According to the complaint filed by Endresen, Turner used company money to pay for strippers as well as engaging in sexual conduct with employees at the office, using drugs at work and putting pressure on lower level employees to join him in his behavior.

Turner declined to comment on the allegations other than to say that there are no claims against him personally and he disputes the allegations made about him. He stated that he would be vindicated through the legal process.

Endresen claims that when she reported the problems, she was told by Banc of California’s legal counsel that the company did not have a policy in place that prohibited employees from engaging in either behavior (engaging in sexual activities in the workplace or using company money to pay for strip clubs). Turner resigned from his position as Banc of California CFO in June in order to pursue other interests. According to the official statement on the matter, Turner’s decision to leave did not relate to any issues regarding the company’s financial reporting, system integrity, etc.

The company insists that the action has no merit and that they will be defending against the claims.

If you have questions regarding wrongful termination or you have been wrongfully terminated from your employment, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

Excessive Investment Fees Result in Agreed Upon $14M Settlement from Fujitsu

In order to end a proposed class action close to $150 million, Fujitsu agreed to pay a $14 million settlement. The proposed class action alleged that the company paid more in investment fees for retirement funds than necessary affecting close to 23,000 current and former employees.

Workers hope the judge approves the deal that would be worth about $600 for each class member. They argue that it is a favorable comparison to other settlements in ERISA (Employee Retirement Income Security Act) suits regarding excessive fees. The settlement amount proposed is about 1% of the plan’s total value according to the class.

The workers’ unopposed motion for preliminary settlement approval urged the judge to approve the settlement stating that the amount was impressive in aggregate, when considered on a per-capita basis, and when viewed as a percentage of the plan’s assets. It compares favorably to other recent 401(k) settlements by all measures.

Workers originally sued Fujitsu in June 2016 alleging that the company mismanaged the employee retirement plan. Claims insisted that Fujitsu bought more expensive classes of funds than was necessary, deprived workers of returns, failed to monitor record keeping/administrative fees paid, and kept investments in plan offerings that were far too expensive.

Fujitsu first attempted to argue for dismissal claiming that the workers’ claims were based on “hindsight” and that the fees were appropriate and in line with those approved by the court in other suits. Their motion to dismiss was denied in April, but the judge did “leave open the possibility” that the arguments could win at summary judgment or trial. He also noted that some of the workers’ claims could be time-barred.

In September, the parties involved agreed on a draft deal after mediation efforts to reach a resolution. The draft deal was recently finalized and the workers now seek approval.

Approval of the settlement would mean that participants in the class (employees participating in the Fujitsu 401(k) plan between June 2010 and September 2017 would receive payment. The class includes 22,705 members. Close to a quarter of the settlement amount will likely go towards attorney fees and costs.

If you have questions about ERISA or your rights in regard to your employer provided 401(k) accounts, please get in touch with an experienced California employment law attorney at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

California Toyota Dealership Accused of Wrongful Termination

Josh Beaulieu, a former technician/mechanic for a Sacramento, California Toyota dealership is suing for alleged defamation, workplace retaliation, wrongful termination and hostile work environment. 

Beaulieu filed the complaint in Kern County on November 2, 2017 in U.S. District Court for the Eastern District of California. The suit was filed against Madland Toyota-Lift Inc. and Mary Madland. Beaulieu alleges malicious treatment amidst other allegations. 

According to the lawsuit, Beaulieu started work for Madland Toyota-Lift in August 2016. He states that on May 23, 2017, he suffered damages as a direct result of his wrongful termination. Damages Beaulieu cites in the complaint include: lost income, loss of employee benefits, emotional distress related to the job loss and mental anguish due to the wrongful termination. 

Beaulieu’s lawsuit states that he was falsely accused of carrying a gun on the job at Madland Toyota-Life in Sacramento, California. He also states that he had previously been subjected to a number of hostile situations by a number of Hispanic employees at the dealership. Beaulieu, plaintiff, alleges that the dealership forced him to retain legal representation when they terminated him in bad faith without any reasonable grounds for the adverse action as well as failing to take appropriate action to protect Beaulieu from oppressive and malicious treatment on the job at the dealership. The plaintiff seeks a trial by jury, damages (both economic and punitive), injunctive relief, attorney’s fees and costs, and any additional relief the court deems fair. 

If you have questions regarding how to respond to a hostile work environment or what constitutes wrongful termination, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik. 

Wrongful Termination Suit Aimed at NBCUniversal Amidst Sexual Harassment Allegations

Gina De Marco, a former Los Angeles employee for NBCUniversal, claims she experienced a hostile work environment including sexual harassment from a direct supervisor. She further alleges that the media conglomerate failed to fully investigate the alleged sexual harassment and that it constituted a hostile work environment. 

In an attempt to resolve the situation, De Marco filed a wrongful termination lawsuit. The lawsuit alleges that NBCUniversal failed to respond appropriately to her complaints of inappropriate, gender-based, sexual comments that she faced on a regular basis at work. She also alleges that she was forced to endure retaliation after reporting the harassment. 

De Marco filed the lawsuit in California state court in September and NBCUniversal Media is fighting the suit. Last month the case was removed to federal court. As is stated in the suit, De Marco worked for NBCUniversal as a senior digital fulfillment specialist between 2016 and August 2017. Due to “work restrictions” she worked from home. De Marco alleges that her direct supervisor, John Vitulli, began harassing her and creating a hostile work environment beginning in November 2016. Amongst other alleged inappropriate behavior, De Marco claims that Vitulli referred to his genitalia as a “lightsaber” and told De Marco about his own and other male employees’ “masturbation practices.” 

Two other instances noted in the lawsuit of inappropriate behavior on the part of Vitulli included his response to De Marco’s question about an upcoming LBGTQ event with, “I don’t take part in those gay things” and responding to De Marco advising him that another female employee was out of the office due to a domestic abuse related hospital stay with, “She should have learned to keep her mouth shut…she should have limped into the office.” 

After reporting the issues to NBCUniversal’s human resources department, De Marco alleges that no adequate investigation occurred. She was also not assigned a new supervisor. Later in the suit, De Marco states that she experienced mental and/or physical disabilities in June 2017 due to the continued harassment and workplace retaliation that limited both her personal and professional life. De Marco was eventually put on sick leave until she was let go. De Marco claims she was wrongfully terminated due to her complaints about Vitulli, her complaints about he post-complaint harassment/retaliation and her disabilities/need for accommodations and leave. 

NBCUniversal claims the termination of De Marco stemmed from the move of her position from an at-home position to an in-office position, but De Marco claims she was not provided with an opportunity to accept an in-office position if one was available. In court the media giant shows the action as frivolous and are demanding their attorneys’ fees paid. 

If you have concerns regarding wrongful termination or if you have experienced workplace retaliation, please touch base with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

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.

1st Ever Sexual Orientation Discrimination Lawsuit Filed by EEOC

Scott Medical Health Center was recently ordered to pay $55,000 by a federal judge in the first sexual orientation discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission. The judge’s three-page order found Scott Medical Health Center, the Scott Township-based pain management and weight loss services provider, responsible for “creating, facilitating, or tolerating” sexual harassment – which can refer to any harassment related to sexual orientation or sex or gender stereotypes/gender role stereotypes. 

Also ordered by the judge, the health center will provide the commission a written report including any and all complaints and/or allegations (both formal and informal) regardless of whether they are reported verbally or in writing related to sexual harassment/sex harassment made by any employee for the upcoming five years. 

EEOC attorneys released a statement hailing the ruling as historic. They set it apart as a precedent that sexual orientation is a protected status in any workplace. The EEOC also stated that protections for lesbian, gay, bisexual, and transgender individuals have been “stepped up” under sex discrimination provisions. They’re making it a priority at the national level. 

Sexual orientation is not actually protected under Title VII of the Civil Rights Act of 1964 governing workplace discrimination, but the EEOC interprets sex discrimination as including harassment of both gay and transgender workers. The EEOC sees this case as one of many that point towards the persistent and commonplace problem of anti-LGBT bias in the workplace throughout America. 

This lawsuit based on anti-LGBT bias, was filed in March 2016. The lawsuit describes a situation in which Dale Baxley, a telemarketer for Scott Medical Health Center, was taunted by a manager for being gay. This harassment occurred in Summer 2013. Robert McClendon, the manager accused of harassing Baxley for being gay was already under investigation at the time of the filing. Several female employees made claims against the same manager. According to the EEOC complaint, Baxley quit in August 2013 after complaining to the company president and seeing nothing change. 

In response to the claims, the health center’s lawyer stated that the Defendant was “blindsided” by the allegations, that they were unaware of Baxley’s sexual orientation, and that the commission had no authority to file the claim. 

Earlier this month, the federal district judge, Cathy Bissoon, ordered Scott Medical Health Center to pay damages in the amount of $50,000, which is the maximum penalty for this type of violation against an employer the size of the health center. In addition, the court ordered the company to pay Baxley $5,500 in back wages. 

For more information about sexual orientation lawsuits or to discuss what constitutes a hostile work environment, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Avis: FCRA Background Check Suit Ends in $2.7Million Deal

Avis, popular car rental company, recently agreed to pay out $2.7 million to resolve a FCRA background check lawsuit. According to the suit, Avis improperly acquired and used background checks in order to reject job applications. 

Angela Fuller, plaintiff, originally sought to certify a settlement class of approximately 45,000 people. Fuller now urges the court to grant final approval to the settlement deal, as she believes it is fair to all class members. Separately, Fuller’s lawyers sought $891,000 to cover fees and expenses (1/3 of the total $2.7 million proposed settlement). The final approval hearing will take place on November 28, 2017. 

Fuller originally sued Avis in June 2015. She claimed the company denied her a rental sales position in 2013 because they ran a background check that violated FCRA requirements. Fuller claims that Avis did not appropriately disclose in a form designated for that purpose alone that they might run a background check and access Fuller’s consumer report. Fuller also claims that the company did not provide her with a pre-adverse action notice alongside a copy of the report used to make the decision and a written description of her FCRA rights before they rejected her job application on the basis of her background check. 

The report used during Fuller’s job application process at Avis showed that she had received a $40 ticket for drinking a malt beverage as a vehicle passenger in 1985 in the state of North Carolina. In the complaint filed by Fuller, she states the reported information was incorrect as the ticket was only an infraction, not a conviction. According to FCRA, only convictions can be reported more than seven years after the incident. 

The proposed settlement was initially submitted for approval in March. It was granted preliminary approval at the end of July. According to the terms of the settlement, class members will receive cash payments or other compensation depending on which “group” they are in. The agreement will also offer relief to individuals whose claims against Avis rental company lay outside the FCRA’s two-year statute of limitations. 

A substantial portion of the funds would be paid to anyone who was the subject of a consumer report pulled by Avis to be used during the job application process or for other employment reasons between June 9th, 2013 and April 28, 2016 through a form similar to the one used by Fuller. This group is referred to as the “2-Year Inadequate Disclosure Group.” Members in this group number over 21,000 and would each receive a $45 payment for a total of $968,000. 

The second group will receive the largest individual payments. This group of 590 people was subject to a background report pulled by Avis to whom Sterling was advised to provide a pre-adverse action notice on the part of Avis between June 9, 2013 and April 28, 2016. Each will receive $45 for being a part of the first group as well as an additional $650. 

Other members of the class number about 25,000 people that were all the subject of a consumer report pulled by Avis between June 9, 2010 and June 8, 2013. 601 in this group were also supposed to receive a pre-adverse action notice from Sterling on Avis’ behalf during the same time frame. These claims are similar to Fuller’s but are outside the FCRA’s statute of limitations. All members with claims falling outside the statute of limitations will receive a $20 voucher to apply toward a weekday car rental at Avis. 

Fuller requested an additional $15,000 award for her services as the class representative.

If you have questions about background checks during the employment process or the statute of limitations for claims, please get in touch with one of the experienced California employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.