Recent News Labels Litigation Trend “Shakedown” Lawsuits

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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.

Dynamex and Its Effect on Worker Classification

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The 2018 Dynamex Operations West v. Superior Court of Los Angeles County from the California Supreme Court upended decades of precedent by setting out a new, stringent, three-factor test to determine proper worker classification for purposes of California’s wage order rules. In 2019, the Ninth Circuit applied Dynamex retroactively. But then they reversed that ruling and returned the question to the California Supreme Court. Also in 2019, Assembly Bill No. an attempt to codify the Dynamex test, is before the California Senate. So where does that leave employers and employees in California? The information currently available on the issue conflicts – we’re still working towards a standard practical application of the Dynamex ruling.

First, it’s important for employers and California employees to remember that worker classification affects numerous areas: wage and hour, employee benefit plan participation under the Employee Retirement Income Security Act (ERISA), state and local laws not preempted by ERISA, and federal income and employment laws. Each area applies specific tests that determine a standard regarding whether or not any particular worker’s proper classification: employee or independent contractor. The recent developments apply specifically to wage and hour law.

California employers need to review how they classify workers for all purposes. They should also consider the fact that there are different tests that apply for classification in different areas of employment law and some are stricter than others. If a California worker is considered an employee for wage and hour purposes, they are entitled to all the protections California state law offers as well as the protections of the FLSA (including minimum wage and overtime).

As Dynamex continues to make waves across California, employers need to be taking a really good look at how they classify their workforce, each of their workers under the different tests, and pinpoint exactly how they can manage their workers to comply with both state and federal wage and hour law.

If you have a misclassification claim, please get in touch with Blumenthal Nordrehaug Bhowmik De Blouw LLP, our employment law attorneys. Our California employment law attorneys prepared to be your advocate, making sure you get ALL of the wages you are owed when your employer violates California labor law.

California, Employment Law, Cases featured in the news only

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The well-known ride-share app/company, Lyft, is facing another class action lawsuit that claims the group intentionally misclassifies their drivers as independent contractors. The misclassification class action lawsuit was filed in the Northern District of California by Donald Brunner Jr., Lyft driver. Serving as a representative of Lyft drivers, the Burbank resident has been driving for the company full time since March 2016. According to claims made in the lawsuit, Brunner worked 42 to 70 hours per week since he started driving for Lyft and logged between 500 and 1,100 miles per week. He claims that he (and other Lyft drivers) were refused reimbursement of expenses, overtime pay, minimum wage, and other rights employees are provided by law.

It’s not the first time Lyft has faced a lawsuit. In fact, it’s not the first time Lyft has faced a lawsuit over a driver classification violation allegation. The company just settled a previous lawsuit over driver classification in June. The terms of the settlement were not made public. In 2017, Lyft settled another misclassification lawsuit for $27 million after close to four years of litigation. Since that settlement, the California Supreme Court issued the Dynamex decision that opened the door to more misclassification lawsuits aimed at the gig economy. Filed in the wake of the Dynamex decision, another lawsuit, Norton v. Lyft is still in litigation. Another, similarly structured ride-share app company, Uber, settled a case in early 2019 for $20 million. (This particular case was in litigation for six years). Uber arguments were supported in this case by the Ninth U.S. Circuit Court of Appeals ruling that arbitration clauses drivers agree to prior to working with Uber direct legal issues to an arbitration proceeding rather than court proceedings; effectively blocking class actions.

In Brunner’s case, the plaintiffs’ legal counsel argue that Lyft waived their arbitration rights when they did not pay required fees to the American Arbitration Association (AAA), which was allegedly part of the agreement as outlined in the terms of service. Since AAA requires fees in advance of any hearing, when Lyft refused to pay it basically blocked arbitration. In addition, the plaintiffs present fairly standard arguments for driver misclassification including that Lyft is entirely dependent on drivers to provide services, drivers do not have meaningful degrees of business autonomy, drivers do not set their own rates or build business relationships with customers for repeat services, the company controls the terms of employment and requires drivers to maintain certain standards (drivers cannot cancel rides without consequences from the company), and the 15-second acceptance rate for rides prevents drivers from being actively engaged in any other meaningful activity when not providing Lyft services.

If you have a misclassification claim, please get in touch with Blumenthal Nordrehaug Bhowmik De Blouw LLP, our employment law attorneys have the resources and experience companies fear in litigation. Our labor lawyers make sure that our clients get ALL of the wages they are owed when companies violate California labor laws.

Jones Day Gender Discrimination Case Only Gets Bigger

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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.

Will California Be the First State to Offer Black People Protection from Natural Hair Discrimination in the Workplace?

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Many black Angelenos see Mahogany Hair Revolution, the natural hair salon run by Kari Williams in Beverly Hills, as a refuge. It is a particular refuge for black Angelenos who are pressured to change their hairstyle to keep a job or advance in the workplace. Williams has had customers come in to request she cut their locs (short for dreadlocks) because their boss or supervisor told them the hairstyle was unacceptable. Other customers can't remember what their natural hair looks like because they haven't worn it in so long. Williams supports the proposed state legislation that could make California the first state to offer legal protection to black employees experiencing natural hair discrimination in the workplace.

The proposed legislation, referred to as the CROWN Act, passed the state Senate in April and was recently approved by the state Assembly. The legislation would outlaw policies that punish black employees or students for their hairstyles. Supporters say the bill would create a respectful and open workplace for natural hair (the bill's acronym, CROWN). The CROWN Act would extend the anti-discrimination protections included in the Fair Employment and Housing Act and the California Education Code to add hair texture and hairstyles. It would also amend California government and education codes to protect from discrimination based on traits that are historically associated with a race (like hair texture or hairstyle). The Act would effectively make targeting a hairstyle that is associated with a particular race would be legally defined as racial discrimination.

If the Governor signs the bill, it will provide legal protection for people in the workplace and K-12 schools by prohibiting enforcement of grooming policies that have a disproportionate effect on people of color. The change would affect policies that ban certain hairstyles like Afros, braids, twists, cornrows, dreadlocks, etc. Black employees have filed numerous lawsuits nationwide claiming to have lost their jobs or faced discrimination in the workplace due to their hairstyle.

Lawmakers in New York and New Jersey proposed legislation modeled after the CROWN Act in June.

If you are experiencing workplace discrimination or if you need to discuss how to file a California discrimination lawsuit, get in touch with the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw L.L.P. With conveniently located employment law offices in San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange, and Chicago; we are here when you need help.

California Private Colleges and Universities May Be Forced to Move to a Time-Card System for Adjuncts

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Unless a legislative fix is successful, California's private colleges and universities may be forced to move to a time-card system for adjuncts. California legislation regarding the exempt status of adjunct workers has the backing of both the Association of Independent California Colleges and Universities and the Service Employees International Union – making this a rare instance in which colleges/universities and their adjuncts are in complete agreement. If the litigation is successful, it will prevent numerous private colleges and universities from requiring adjuncts to complete time cards as a means of avoiding labor law violations on overtime. California's public institutions are not affected as they are generally unionized.

Numerous colleges and universities facing faculty overtime violation lawsuits in recent years have reached settlement agreements with the plaintiffs. For example, Stanford University provided a $900,000 settlement in 2018 due to a class-action lawsuit on behalf of continuing studies program instructors. After attorney's fees, each adjunct involved was entitled to a partially taxable award of $1,417. Kaplan University also settled a similar suit. Other colleges and universities facing similar legal actions settled privately.

The implementation of a time-card system or other documentation of adjunct working hours was private colleges and universities' response to the new trend in employment law actions. Faculty groups insist that time cards are not a functional solution. Not to mention that requiring the completion of labor-style time cards of adjuncts could be viewed as insulting and wrong. Many adjuncts find the idea both inconvenient and humiliating.

The proposed litigation, AB-1466, would clarify when an adjunct at an independent institution would qualify as exempt under wage and hour law. The bill would specifically classify employees working in education as exempt if they offer credit-bearing instruction at independent colleges or universities, meet the existing legal test determining whether or not their work involves advanced knowledge, and they receive salary compensation (equivalent to no less than two times the state minimum wage at full-time employment or no less than two times the state minimum wage times the hours of service). The bill would also provide additional clarification (and a more generous definition) of hours of service.

If you need to discuss overtime pay violations, please call one of Blumenthal Nordrehaug Bhowmik De Blouw LLP's various locations: San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange or Chicago. We are ready to be your advocate as you seek resolution for labor law violations in the workplace.

Property Appraisers Group Denied Certification of Class in Misclassification Suit Against Major Insurers

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California’s 2nd District Court of Appeal affirmed a trial court ruling denying certification of class for plaintiffs in a misclassification lawsuit against major insurers: Allstate, Farmers, North American Compass Insurance Service Group, CIS Group, Advanced Field Services, and Capital Personnel Services. The ruling was a significant win for insurers and service companies as the legal team was attempting to bind a group of 1,550 California property appraisers together to sue for alleged misclassification (McLeery et al. v. Allstate).

The representative plaintiffs in the suit alleged that the two insurance providers and the various service companies intentionally insulated themselves from labor laws by contracting services for property appraisal upon policy creation or renewal rather than hiring appraisers as employees. The time frame cited for the allegations is 2005-2008.

The litigation has been ongoing for years, and legal counsel for the defendants does not predict an end to the proceedings anytime soon. The plaintiffs in the case may appeal the California Supreme Court decision or continue forward with separate lawsuits naming the plaintiffs individually. 

A second lawsuit (Lunde v. Farmers Group) was filed by a different group of 106 appraisers in Los Angeles County Superior Court in 2014 and has been stayed pending the outcome in the McLeery case.

The most recent ruling marks the second tie the appellate court stepped in to answer a procedural question for the McLeery suit. Initially, the plaintiff’s plan to assess damages classwide through statistical analyses of results from an anonymous, double-blind survey sampling class members, but the 2nd Circuit reversed the decision and ordered the trial court to conduct the evaluations according to the proposed plan.

A survey expert, Krosnick, was hired by the plaintiffs to design a method of determining liability and damages. The study consisted of 45-minute interviews with proposed class members. The defendant’s experts questioned the scientific validity of the survey claiming that it invited “significant error” by asking participants to provide precise recall of events up to 10 years in the past. The court found that the survey results failed to specify why workers skipped meal or rest breaks (the nature of their work or their preference), whether inspections were performed by Allstate or Farmers, and failed to address work-practice variations amongst inspectors. The 2nd District upheld the trial court’s decision not to certify class due to the proposed anonymous survey. The courts agreed that the plaintiffs’ case relied on showing that insurance carriers and service companies conspired together to violate labor laws, but the survey failed to do so. The case seems to lack a fair, manageable method of establishing liability.

If you have questions about filing a class action lawsuit or if you have experienced labor law violations on the job, the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP can help. Get in touch with the employment law office nearest you: San Diego, San Francisco, Sacramento, Santa Clara, Los Angeles, Riverside, Orange or Chicago.