$3.65 Million Settlement Goes to Dancers for California Labor Lawsuit

A $3.65 million settlement was approved by the District Court for the Central District of California, effectively ending the California labor lawsuit alleging that The Spearmint Rhino nightclub chain made a practice of misclassifying dancers as independent contractors. The practice of misclassifying workers as independent contractors violates FLSA (the Fair Labor Standards Act) and California Labor Law.

The Spearmint Rhino Misclassification Lawsuit Receiving Extra Attention:

The dancers at Spearmint Rhino nightclub offered nude, semi-nude, or bikini entertainment to the club’s patrons at various locations since October 30, 2017. In the end, they will net approximately $2.6 million. The misclassification lawsuit filed by Spearmint Rhino’s dancers is just one in a long series of suits and related legal actions that are inspiring a noticeable reaction. The attention this case received is party due to the novelty of a sex industry labor lawsuit, but also due to the currently charged political debate about AB 5, California’s new gig worker law based off of the Dynamex decision.

Dancers Actually Pay their Employer to Work for Tips:

Did you know that in many cases, dancers in the sex industry end up paying their employers so they can work for tips? It’s true. The economics of exotic dancing are unlike anything you’ve seen in other industries. Dancers are required to pay an assortment of “fees” such as house fees or dance floor fees before performing at an establishment.

In some cases, the dancers must sign an agreement requiring them to pay a lease fee for the “business space” they will be using. Additionally, many employers in this industry charge exotic dancers a higher stage fee if they are not fully nude by the end of their performance. Exotic dancers do not receive wages; they work for tips. Dancers share their tips with the bartenders, DJs, and dressing room helpers (often referred to as House Moms). If it’s a slow night, an exotic dancer may go home with very little to show for a full shift.

Legal Actions Targeting the Exploitative Sex Industry:

Ortega v. The Spearmint Rhino is just one in a series of similar lawsuits. The change that would come with AB 5 would not be limited to exotic dancers or the sex industry. The legislation was originally drafted to address misclassification issues in the gig economy. AB 5 applies to any California worker who finds themselves pushed or forced into independent contractor status without fully understanding the consequences of the classification.

Opponents of AB 5 Refuse to Comply or Seek Exemption

The purpose of AB 5 is to address misclassification in the workplace. Misclassification is a significant issue because employees have essential wage and hour protections in place that do not apply to independent contractors. In some cases, it can be difficult to distinguish between an employee and an independent contractor. Following Dynamex, the legislature introduced AB 5 to address this problem using a simple test to determine which workers are employees (and entitled the protections of employment law), and which workers are independent contractors.

Many employers actively fought against AB 5 before it was enacted. Some were exempted using modifications to the law. Other California employers (like Uber and Lyft) announced that they would not comply with the terms of AB 5. In the face of such powerful opposition, some wonder what would happen to workers like the Spearmint Rhino dancers if AB 5 is repealed or left without the power of effective enforcement through additional amendments or judicial limitations?

The Fate of California Misclassification Suits: With or Without AB 5

The Ortega suit against Rhino Spearmint night club was filed in before AB 5 was enacted – in February 2017. It was filed before the Dynamex decision that led to the legislative change. While the case did not receive an actual judicial decision, the defendant found the arguments presented strong enough to warrant making a settlement to resolve the matter out of court. This conclusion would be likely with or without AB 5 in place. While it is likely that misclassification lawsuits would be more difficult for California workers to win without AB 5, it is not their only hope.

If you need to discuss misclassification or how to file a misclassification lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Did Apple Violate the Law by Not Paying Employees During Mandatory Searches?

In July 2015, the employees suing Apple for not paying hourly wages for the time spent waiting in lines for mandatory, daily security checks got their case certified as a Class Action. And now the California Supreme Court ruled against Apple.

Are Mandatory Searches a California Labor Law Violation?

On February 13, 2020, the California Supreme Court found Apple Inc. in violation of California labor law due to their failure to pay employees for time spent waiting for mandatory bag and iPhone searches after work shifts. The decision is the latest progression in the battle over off-the-clock work payment. This case represents the California Supreme Court’s third wage and hour decision in two years that interprets the state’s employee-protective wage requirements. At the trial level, Apple came out on top with the U.S. District Court for the Northern District of California finding that Cupertino, California Apple employees chose to bring their bags and purses to work and therefore choosing to be subjected to mandatory searches. But on appeal, the U.S. Court of Appeals for the Ninth Circuit turned the question over to the state court for interpretation of California labor law.

Determining Who Holds the Power During the Mandatory Search:

Since compensation depends on whether or not the employee is under the control of the employer, it is crucial to determine if Apple workers are under Apple’s control while they wait in line for mandatory searches, while they are undergoing the mandatory searches, and when they are exiting the mandatory searches. The mandatory searches occur when Apple employees finish their shifts and wish to leave the premises for the day. The exit search is a burden to Apple employees because it prevents them from leaving with their personal belongings until they have completed the thorough (and mandatory) exit search. The mandatory search process can take anywhere from five to twenty minutes. Employees are required to make specific movements and actions during the mandatory search.

Apple Claims Mandatory Searches Benefit Employees:

Apple claims the bag-search policy is justified as providing a benefit to Apple employees. Still, the court finds this far-fetched under the circumstances of the case and in consideration of regular, 21st-century living. The case will return to the Ninth Circuit, the same court that already held that Nike and Converse must face workers’ claims that they should receive payment for time spent in post-shift bag searches.

If you need to discuss employment law violations or if you need to file an off-the-clock work lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Bay Area Solar Panel Company Forced to Pay Settlement for Racial Discrimination Lawsuit

Fidelity Home Energy Inc. and successor NorCal Home Systems Inc. out of Concord were forced to pay a settlement for allegedly denying service to any that management deemed likely to be Indian or Middle Eastern based on their names. The Bay Area solar panel installation company will settle the racial discrimination lawsuit with a $350,000 settlement paid to a former employee. The terms of the settlement also require the company to hire a consultant to assist them in changing company policies and practices in violation of the law.

NorCal Home Systems' $350,000 settlement is paid to Ayesha Faiz. Faiz, who is of Afghan origin, learned within a week of starting her job as a telemarketing supervisor at the company that potential customers that sounded Middle Eastern or Indian were regularly rejected for home energy system sales appointments.

Lawsuit Alleged Racial Discrimination was Standard Practice:

According to court documents, Faiz watched as supervisors purposefully tagged customer records in the company's internal databases and placed them on a "do not call" list. Faiz claims the company forced her to reject the potential customers multiple times per week. Additionally, her supervisor's forced her to instruct her subordinates to practice the same discriminatory behavior towards the potential customers who had Middle Eastern-sounding or Indian-sounding names.

At one point during her employment, Faiz saw a note stuck on a worker's computer that stated clearly, "NO INDIANS." Some employees at the solar panel installation company wrote notes on the digital customer files within the database for anyone they thought were probably Middle Eastern or Indian. Comments on the customer files ranged from "Indian Name!" to "We Won't Run This." The company denies the allegations Faiz made in the lawsuit. They insist that they did nothing wrong and that they are moving forward with their business practices as is.

Identifying Discriminatory Practices in the Workplace:

Yet Faiz was forced to discriminate against potential customers of her own national origin. It was so distressing for her that after a few weeks, she quit the job that required active discrimination daily. She could not handle working for a company that refused service to a particular ethnicity and went out of their way to single them out and separate them from the list of possible customers. The EEOC determined this constituted a hostile work environment in violation of the Civil Rights Act prohibiting discrimination by employers based on national origin.

The settlement, a three-year consent decree, requires Fidelity and NorCal to provide money to Faiz for damages and hire an EEO consultant to assist in revising NorCal's policies and practices. NorCal is also required to update their databases and remove any notes or information used to "screen" potential customers by ethnicity or national origin.

If you need to file a racial discrimination lawsuit or if you need to discuss other employment law violations, don't hesitate to get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Former Principal Claims for Catholic School Files Wrongful Termination Suit

A former principal at a Catholic elementary school in La Mirada, 38-year old Bobbie Castillo, claims she was wrongfully terminated. According to the suit, when she told her supervisor that she was pregnant (in 2014) and would be going on maternity leave, the Rev. Joseph Visperas responded, “You’re coming back in two weeks, right?”

Reverend Joseph Visperas is pastor of St. Paul of the Cross Catholic Church. Castillo described his voice as serious when he made the above remark about being back in two weeks from maternity leave.

The pregnant Catholic school principal eventually responded by filing a wrongful termination lawsuit.

Plagiarized Material or Too Much Maternity Time?

Castillo filed suit in October 2015 in Los Angeles Superior Court, listing the Archdiocese of Los Angeles as Defendant. A jury will hear the case. The Archdiocese of Los Angeles claims Castillo lost her job after she allegedly plagiarized material included as part of the school’s accreditation renewal requirements. Castillo maintains she was terminated from St. Paul in March of that same year because of her pregnancy and because she exposed misconduct perpetrated by others there at the school.

History of Castillo’s Wrongful Termination Case:

Castillo started working at the school as a seventh-grade teacher in 2007. She was promoted to principal by Visperas four years later. Before her two-month maternity leave (Oct. 2014-Jan. 2015), while she was principal, she took a similar amount of maternity leave time in 2009 while she was a seventh-grade teacher. Castillo testified that she worried about the odd remark Visperas made about her maternity leave because it was made in March, which is the month that principals are usually offered contract proposals for the upcoming school year. According to Castillo, she never received a contract until she returned from maternity leave the next February. Castillo also claimed that not long after his first odd remark about her maternity leave, Visperas advised her he was going to have members of the staff rate her. The combined factors left her worried about her job status.

Was She Fired Because She Was Pregnant?

Castillo claims she was wrongfully terminated because she got pregnant and because she reported misconduct other at the school engaged in, including charging some of the student’s parents for unworked bingo game hours. According to Castillo, the replacement the school found for her was no longer of child-bearing age. Castillo also claims that when the book was turned in (including the section she allegedly “plagiarized”), she was in labor, and there was no evidence that she drafted the portion indicated.

If you need to discuss employment law violations or if you need to file a pregnancy discrimination lawsuit or wrongful termination lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

As Lawsuit Plays Out, Uber and Postmates Dealt a Blow

Uber and Postmates were dealt a blow in the ongoing legal battle when a California federal judge denied their request for a temporary stop to AB 5. The two big companies were hoping to receive a reprieve from California’s new gig worker law.

The companies requested a temporary stop to AB 5, while a lawsuit they filed against California state worked its way through the legal system. The federal judge denied their request, leaving both gig companies obligated to comply with the law, which could mean reclassifying drivers as employees. US District Judge Dolly M. Gee noted that the court does not necessarily doubt the sincerity of the individual views presented, but that second-guessing a law designed to improve working conditions for nonexempt low-income workers is not warranted.

What is AB 5, and What Does it Mean for California Workers?

AB 5 is all about worker classification with a focus on gig economy workers. Gig economy companies are full of independent contractors. Gig economies profoundly affected by the legislation include Uber, Lyft, Postmates, DoorDash, etc. While some prize being classified as independent contractors because it offers more flexibility, it often means that drivers and other workers are shouldering many of the costs of their employment for their employers.

For example, Uber drivers pay for:

• Their vehicle

• Their phone

• Their gas

• Their vehicle maintenance

Additionally, Uber drivers do not receive access to essential benefits, minimum-wage guarantees, overtime pay for hours worked above 8 in one day, or 40 in one week or health insurance.

AB 5’s Three-Part Test to Determine Reclassification:

Under the new legislation, AB 5, which went into effect on January 1, 2020, California employers using independent contractors must undergo a three-part test to determine if they will be required to reclassify their workers. Companies that don’t pass the test must reclassify their workers as employees instead of independent contractors. Many California employers fear the new legislation will significantly harm their businesses as the management of large workforces is expensive. For example, an analysis by Barclays in June 2019 concluded that Uber’s reclassification of drivers from independent contractors to employees would cost the company about $500 million annually. A similar move would cost competitor rideshare company, Lyft, an approximate $290 million annually.

California Businesses Respond to AB 5 Legislation:

In response to the legislation, a growing group of companies and individuals are suing the state to make sure all workers receive equal protection under the law and can choose how they want to work. The response was filed by Uber, Postmates, and two gig workers, Lydia Olson and Miguel Perez. The lawsuit was filed against the state at the end of 2019 in an attempt to have AB 5 declared invalid. The lawsuit filed in response to California’s new gig economy legislation alleges that AB 5 is unconstitutional. It also asserts that the new law unfairly targets gig economy workers and companies. The group requested a preliminary injunction against AB 5 to stop it from being applied to them until their case makes its way through the court. Judge Gee denied the injunction.

Other Responses to AB 5 Across California:

Similar lawsuits have been filed against the state by other groups including truck drivers, journalists, etc. Those actively seeking to prevent AB 5 from sticking around insist that the legislation would harm the industries in which they would apply and the workers in those industries. Uber and Postmates are weighing their options and considering an appeal to Gee’s decision. Postmates sees it as a procedural decision on the preliminary injunction only and not an indication of the court’s potential decision once the full case is presented.

If you have questions about how California’s AB 5 legislation will affect your workplace or if you need to file a California employment law complaint, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Siemens Mobility Sued Over Alleged Missed Breaks and Wage Issues

Siemens Mobility is currently facing a potential class-action lawsuit after one of their material handlers, Dewitt Nunery, sued to allege wage issues, skipped lunch and rest periods, and inaccurate wage statements.

Plaintiff Claims He Was Required to Work Through Breaks:

The plaintiff in the case is a Siemens Mobility warehouse worker and material handler with an hourly pay rate of $16.37. Nunery claims Siemens required him to work through breaks at the Sacramento County train factory. Nunery claims that in addition to not getting a chance to take his breaks, he was not offered accurate overtime payment for missed break time.

Skipping “Paid” Breaks Should Add Time to the End of the Shift

Since rest breaks are "paid time," skipping rest breaks during a work shift should add that time to the end of the shift, but Nunery claims it wasn't. Still working at the train factory, Nunery alleges the company pressured him to work over seven days consecutively without overtime pay. Siemens train factory has been growing significantly throughout the last several years, with numerous large orders coming in from throughout the United States and Canada. The factory fulfills orders for trains, train sets, and light rail vehicles.

Seeking Legal Help to Resolve an Employment Law Violation:

Originally, Acara Solutions Inc., a staffing agency based out of New York, placed Nunery at the Siemens train factory. Later he worked for Siemens directly. Nunery claims he experienced the same payment issues and employment law violations under both Acara Solutions Inc. and Siemens. Nunery seeks penalties under the Private Attorneys General Act and seeks class-action for others in similar situations at the company. Nunery's attorney filed a notice of violations of the California Labor Code in October. In December, they filed a civil suit in Sacramento County Superior Court. Effective February 10, 2020, the case was moved from Sacramento County court to the U.S. District Court for the Eastern District of California.

The Suit Alleges Numerous Employment Law Violations:

Nunery's suit alleges meal break violations, rest break violations, minimum wage violations, and overtime pay violations. Nunery also claims that the company failed to provide accurate and itemized wage statements and failed to provide Nunery with a day off for seven consecutive days on the job.

The Siemens factory, located just south of Sacramento, is the third largest manufacturer in the region employing 1,500 workers.

If you need to talk to someone about violations in the workplace or if you need to file an overtime pay lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Class Action Lawsuit Against Penske Truck Leasing Co. Alleges Overtime Violations

In a class-action lawsuit, allegations claim Penske Truck Leasing Co. violated numerous California Labor Code provisions, including failing to provide employees with minimum wage, violating overtime pay requirements, and failing to provide employees with required rest periods. The class action complaint was filed by the employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP. The class-action lawsuit (Case No. 20STCV04055) is pending in the Los Angeles Superior Court.

The class-action lawsuit alleges that Penske:

• Failed to provide accurate and itemized wage statements

• Failed to accurately record and offer legally required meal and rest periods

• Failed to provide employees with legally required overtime wages

• Failed to pay minimum wage

• Failed to reimburse employees for required expenses

• Failed to pay wage in a timely manner

The allegations in the class action complaint against trucking magnate, Penske, violate Labor Code.

What is an Accurate Wage Statement?

The wage statement or pay stub serves as a document employees receive each pay period to provide details about how their paycheck was calculated. In the state of California, there are specific laws that govern the info that employees receive along with payment for hours worked. In general, employees have the right to receive an accurate record of how many hours they worked, how much they are paid per hour, the total wages they are paid, and any deductions made from their gross wages. By requiring employers to issue accurate wage statements, the law allows employees to keep a statement providing them with a record after cashing paychecks.

The complaint included additional allegations in violation of the California Unfair Competition Law, engaging in unfair competition when engaging in a company-wide policy that failed to accurately record and calculate missed meal breaks and rest periods. The plaintiff also claims that the company intentionally disregarded their obligation to comply with employment law requirements by failing to provide workers with all required payment for work performed.

If you need to talk to someone about overtime law or if you need to file an overtime lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.