February 25, 2021

Covid-19 Pandemic Violations Posted a Significant Challenge for California Employers in 2020

February 25, 2021/ Blog Author

Many agree that the pandemic and related issues were the most significant challenge California employers faced in 2020. As we approach the end of the first quarter of 2021, Covid-19 related litigation continues to evolve along with California workplace standards. While hundreds of Covid-19 related employment complaints were filed in 2020, only a small percentage were collective actions or class actions, but this could change in 2021.

Covid-19 Pandemic Could Cause Increase in Wage and Hour Collective Actions in 2021:

Many expect a significant increase in the number of wage and hour collective and class actions in 2021 as the nation adjusts to the pandemic's fallout and the lingering effects on the public and the economy. One of the main factors for the change is the drastic increase in telecommuting during 2020. By the end of 2020, there were twice as many employees telecommuting as employees working on site. While restrictions may lessen, this scenario is not expected to revert to "normal," at least not immediately. An increase in telecommuting workers naturally leads to an increase in "off-the-clock" claims by nonexempt employees and class action wage and hour lawsuits claiming unpaid business expenses due to home office costs.

At-Risk Areas for California Employers:

Many California employers are at risk of employment law violations due to timekeeping practices and policies that are not appropriate for a virtual workplace. Many California employers who abruptly transferred in-office employees to telecommuting status during the pandemic never addressed issues of non-compliance related to employee hour tracking, rules and policies regarding off-the-clock work, and compliant practices for business expense reimbursement. Without adjusting these practices and policies, California employers will have difficulty not violating employment law.

California Employers at Risk for Wage and Hour Class Actions:

In addition to concerns regarding updated policies and procedures to address a telecommuting workforce, specific industries and types of employers find themselves more at risk for wage and hour class actions filed by on-site employees. Many on-site, essential workers subject to waiting in line for new, mandatory temperature scans may have legitimate overtime or off-the-clock claims. On-site, exempt management employees are stepping in to perform an unusual amount of nonexempt work to decrease payroll costs and cover for employees out due to sickness, etc., due to the pandemic. Many may claim the situation makes them nonexempt employees.

2021 will see the number of other pandemic-related class action lawsuits increase, as well: discrimination cases connected to which employees are selected to return after extended furloughs, claims in connection with employers requiring COVID-19 vaccinations, etc.

If you have questions about California labor law violations or how employment law protects you against labor law violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

February 23, 2021

Jimmy John's Agrees to Pay $1.8M to Resolve Overtime Pay Dispute

February 23, 2021/ Blog Author

In recent news, Jimmy John’s agreed to pay $1.8 million to settle wage and hour claims. Employees brought form wage and hour claims against Jimmy Johns under the Fair Labor Standards Act.

Details About the Case: Jimmy John’s Overtime Litig., N.D. Ill., 2/15/21

Case Numbers: 14-CV-5509, 15-CV-1681 & 15-CV-6010

Court: Northern District of Illinois Eastern Division

The Plaintiffs in the Wage and Hour Claims Case:

Sixty-six assistant managers from various Jimmy John’s corporate-owned locations that opted into the FLSA collective will receive a settlement check from a $272,500 fund. Additionally, more than 500 Jimmy John’s managers at different independent Jimmy John’s franchisees will receive gift cards totaling $300. The Jimmy John’s gift cards are transferable and can be resold for cash. Two plaintiffs initially filed the suit in July 2014, alleging assistant store managers were misclassified, leaving them exempt from overtime pay. In 2015, the lawsuit became a collective action after numerous other suits were filed. Plaintiffs involved in the case were employed at various Jimmy Johns franchises nationwide, and all allege they were cheated out of overtime pay due to misclassification.

Seeking a Settlement to Resolve Misclassification, Wage and Hour, and Overtime Pay Claims:

The plaintiffs’ counsel submitted a motion o Feb. 15th to Judge Charles P. Kocoras of the U.S. District Court for the Northern District of Illinois seeking $1.1 million in attorneys’ fees, $250,000 in litigation costs, and $2,500 service award for each named plaintiff in the case. The settlement proposal was intended to resolve three consolidated collective actions alleging FLSA violations stemming from the alleged misclassification.

February 15, 2021

According to the California Supreme Court, Dynamex Applies Retroactively

February 15, 2021/ Blog Author

When the Ninth Circuit asked the question, “Does your independent contractor ABC test in Dynamex Operations West, Inc. v. Superior Court (Dynamex) apply retroactively?” in Vazquez v. Jan-Pro Franchising International (Vazquez), the California Supreme Court’s answer was “Yes.”

The Court’s Conclusions in the 2018 Dynamex Case:

In 2018, in relation to the Dynamex case, the Court concluded that under California wage orders, workers are presumed to be employees entitled to the protections afforded by wage orders, and that an employer can avoid this presumption for independent contractors if they are able to establish certain standards.

Standards Required to Classify a Worker as an Independent Contractor:

In order to avoid the presumption of employee status and wage order protections, employers must establish that the worker is an independent contractor if:

The worker is free from the employer’s control and direction when it comes to completing their work (both under the employment contract and in fact),
the worker performs a job that is outside the employer/company usual course of business, and
the worker is usually engaged in a trade that is independently established and the same type of work they perform for the employer.

The “ABC Test” detailed above was codified into California state law by Assembly Bill 5, known as AB 5.

Before the ABC Test California Employers Used the Borello Test:

Prior to Dynamex and the ABC Test, California courts and employers used a different, multifactor test referred to as the Borello Test (S.G. Borello & Sons, Inc. v. Department of Industrial Relations). The Borello test focused on how much control an employer had over a worker based on multiple factors. The more control the test indicated an employer held over a worker, the less likely the worker would be classified as an independent contractor.

The ABC Test is More Stringent than the Previously Used Borello Test:

The ABC Test provides a stricter set of standards allowing a California worker to be appropriately classified as an independent contractor. Since the standards set by the new test are more strict, many California employers argue they shouldn’t be held to the newer standard in misclassification lawsuits predating the Dynamex opinion that set the standard. However, the California Supreme Court disagreed with the Vazquez case. The court concluded that there was no reason to depart from the generally accepted rule that judicial decisions are considered retroactive.

If you need to discuss misclassification or if you need to file a California 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.

February 11, 2021

Will the CRST Trainee Wage Lawsuit Be Resolved with $12.5M Settlement?

February 11, 2021/ Blog Author

The five-year old wage lawsuit against CRST may soon be resolved. A proposed $12.5 settlement could resolve the trainee wage claims. However, a former CRST driver involved in a separate lawsuit wants the federal court to oppose the settlement.

All the Details on the Case: Montoya v. CRST Expedited, Inc.

Case Number: 16-10095-PBS

Court: District Court District of Massachusetts

Date Filed: January 2016

The Plaintiff in the Case: Juan Carlos Montoya

Defendant: CRST Expedited, Inc.

Allegations Made by the Plaintiff:

The Plaintiff, Juan Carlos Montoya, filed the lawsuit in January 2016, alleging that CRST Expedited, Inc. and CRST International, Inc. underpaid their long-haul truck drivers, misled long-haul trucker drivers about the costs of driver training, and assessed excessive fees to recoup costs in violation of FLSA (Fair Labor Standards Act), and state law. The Plaintiff also sought class certification for a collective action.

Alleged Unpaid Training Leads to Wage and Hour Lawsuit:

According to court documents, drivers in the CRST training program were not compensated for hours worked while training. The court documents described the training program as being conducted in four phases: Driver training school (minimum of one week), Orientation (3.5 days), Training with assigned “lead” driver (28 days), and continuation training (6 months or more).

Preliminary Settlement Agreement: Montoya v. CRST Expedited, Inc.

Juan Carlos Montoya reached a preliminary settlement agreement on December 15, 2020. If granted approval, the preliminary settlement agreement would be on behalf of a class of thousands of other former CRST driver trainees. The preliminary settlement agreement with the mega carrier totals $12.5 million, and the case is being heard by Massachusetts federal court.

Wage and Hour & Off the Clock Work Claims:

The Plaintiff’s complaint claims that trainees were not paid for mandatory training in Phases 1 or 2, but rather trainees in the program accumulate “debt” owed to the company to reimburse the company for training costs like advances for tuition, lodging, drug tests, etc. According to the complaint, trainees in the last two phases of CRST’s long-haul driver training program are paid a rate per mile for any on-duty drive time, but they are not paid for any time spent loading or unloading, or any time the truck is not in transit. When considering the off the clock work, payment during the last two phases of training, is less than minimum wage.

Former California CRST Driver Opposes Settlement:

Only one day after the preliminary settlement agreement was filed, a former CRST driver involved in a California lawsuit filed an objection to the settlement (Markson v. CRST). Plaintiffs in the separate lawsuit oppose the preliminary settlement arguing that the agreement is too broad because the settlement agreement terms require plaintiffs in the Montoya case not bring any further action against CRST. This claim could disqualify class members in the Marson case with overlapping claims.

If you need help with employment law violations in the workplace, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP today. 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.

February 09, 2021

Did California Farm Retaliate Against Cannabis Workers that Voiced Virus Concerns?

February 09, 2021/ Blog Author

Three sisters (Rachel, Alejandra, and Andrea Montelongo) allege that Valley Harvest LLC and Nug Farms, fired them because they raised concerns about working conditions at the cannabis farm.

All the Details on the Case: Montelongo et al. v. Valley Harvest LLC et al.

Case Number: 5:21-cv-00235

Court: U.S. District Court for the Northern District of California

Date Filed: Jan. 11, 2021

The Plaintiffs in the Case: Rachel Montelongo, Alejandra Montelongo, and Andrea Montelongo

Defendant: Valley Harvest LLC

The Plaintiffs in the Case: The Three Montelongo Sisters

The Plaintiffs in the case, the Montelongo sisters, are former marijuana farm workers who allege their former employer fired them for voicing complaints about working conditions during the coronavirus pandemic.

Background of the Case: Montelongo et al. v. Valley Harvest LLC et al

The sisters claim they voiced their concerns to a company executive during their short time on working on the farm. According to court documents, Rachel Montelongo needed to leave work one day citing mental health reasons, and her two sisters accompanied her. One day later, the three women were fired. Based on the sisters’ claims that the complaints they made to the Nug Farms executive concerned violations of health and safety laws, minimum wage laws, family rights protections, and disability accommodations, responding by firing the workers who complained violates employment law.

The Montelongo Sisters Work History at Nug Farms:

Valley Harvest LLC, farm labor contractor, hired the Montelongo sisters, and they started work at Nug Farms in June 2020. During their time employed on the cannabis farm, the sisters raised concerns to a company executive about the lack of compensation for time spent waiting in line for mandatory temperature checks before shifts started, and a lack of social distancing in the workplace. According to the complaint, dozens of people were required to work in cramped conditions at Nug Farms. The plaintiffs also allege that they were not provided with appropriate personal protective equipment when instructed to directly handle bleach on the job. According to the complaint, later that month Rachel Montelongo left work to obtain treatment for her postpartum depression. Her sisters left work with her. The next day, human resources called to advise one of the sisters that all three of the Montelongo sisters were fired. The company claimed that Andrea and Rachel were fired for working too slowly and tardiness. The company claimed Alejandra was fired for overwatering certain plants.

Additional Claims Made by the Plaintiffs in Montelongo et al. v. Valley Harvest LLC et al.

In the lawsuit, the Plaintiffs also brought employment discrimination claims under the Americans with Disabilities Act, multiple retaliation claims, as well as Califonia labor law violations. The Plaintiffs seek damages to compensate lost wages (both back pay and front pay), and additional lost benefits.

If you have questions regarding employment law and how it protects California employees from workplace retaliation, 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.

February 05, 2021

Alleged Discrimination and Retaliation at Pinterest Lead to Fiduciary Breach Lawsuit

February 05, 2021/ Blog Author

After agreeing to a settlement in a recent discrimination and retaliation lawsuit, Pinterest is facing more legal trouble. Another lawsuit is making its way through the courts claiming breach of fiduciary duty, waste of corporate assets, abuse of control, and violation of 14(a) of the Exchange Act. According to the complaint, the allegations in the lawsuit arise from an alleged systemic culture, policy, and practice of illegal discrimination on the basis of race and sex.

All the Details on the Case: Employees’ Retirement System of Rhode Island v. Silbermann, Sharp, Jordan, Levine, Rajaram, Reynolds, Wilson, Kilgore, Morgenfeld, and Pinterest, Inc. (Nominal Defendant)

Case Number: 3:20-cv-08438

Filed: Nov. 30, 2020

Court: Northern District of California San Francisco Division

The Plaintiffs in the Case: The Employees’ Retirement System of Rhode Island, derivatively on behalf of Pinterest, Inc.

Defendant: Benjamin Silbermann, Evan Sharp, Jeffrey Jordan, Jeremy Levine, Gokul Rajaram, Fredric Reynolds, Michelle Wilson, Leslie Kilgore, and Todd Morgenfeld, Defendants, and Pinterest, Inc., Nominal Defendant.

Pinterest’s Alleged Discrimination and Retaliation in the Workplace:

The shareholder derivative lawsuit was filed in November 2020 in the Northern District of California against Pinterest, Inc. The social media platform is a visual discovery search engine used to collect ideas that went public in April 2019. The cited complaint alleges that the platform executives breached their fiduciary duties to the company by ignoring a systemic (and long-standing) culture of retaliation and discrimination. Allegedly, the company provided unequal salaries to females and racial minorities, and also failed to provide equal promotional opportunities for women based on experience and skill.

Complaint Alleges Four Causes of Action Against Defendants:

Breach of Fiduciary Duty
Waste of Corporate Assets
Abuse of Control
Violations of Section 14(a) of the Exchange Act and Rule 14A-9

Plaintiffs claim that Pinterest’s top executives boardmembers engaged in, facilitated or knowingly ignored discrimination and retaliation against Pinterest employees who spoke up or attempted to challenge the White, male leadership clique.

Revised Version of the Complaint Filed December 31, 2020:

After the district judge assigned ordered the parties involved to revise the “copious redactions” in the original complaint, a revised version was filed on December 31, 2020. In the revised complaint, certain allegations are now public including the claim that the Pinterest Compensation Committee was aware of the inconsistent pay practices in place at Pinterest, but did not take action to oversee any discriminatory pay complaints.

If you have questions about California labor law violations or how employment law protects you against labor law violations, 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.

February 03, 2021

California Supreme Court Rules Independent Worker Test Ruling Retroactive

February 03, 2021/ Blog Author

On January 14, 2021, the California Supreme Court ruled the ABC test retroactive. The test is used to determine worker classification (independent contractor or employee) under the AB 5 law. The ABC test was originally clarified in the 2018 Dynamex ruling.

Clarification of the ABC Test in the 2018 Dynamex Ruling:

In 2018, the ABC test (under AB 5) was clarified. To be classified as an independent contractor, workers must fulfill three standards:

free from the hiring entity’s control and direction of their work performance
complete work that is not typical in the business
have an independently established job done under the work done for the business

Workers who do not meet all three of the above standards (A, B, and C) should be classified as employees, making them eligible for benefits and certain protections under employment law not available to independent contractors.

The ABC Test Received a Blow from Proposition 22:

In 2020, the ABC test came under fire. First, AB 5 was weakened when many businesses covered under the law qualified as “exempt.” The second blow came in November 2020 when California voters passed Proposition 22 leaving all rideshare companies exempt from AB 5. Since the proposition passed (in a landslide), many groups have actively been attempting to overturn the proposition in court.

The Controversy Over the ABC Test Continued in the California Supreme Court:

Despite worker classification being an undeniably major issue, the controversy over the ABC test continued on to the California Supreme Court. Jan-Pro Franchising International workers brought their case to the California Supreme Court, where the court found in the workers’ favor despite the weakening of AB 5 following the passage of Proposition 22. Workers can continue filing suit against companies in violation of the ABC Test retroactively through 2018. Companies remain liable for any AB 5 violations from 2018 through the present. Chief Justice Tani Cantil-Sakauye argued that there was no compelling justification to deny workers the benefit set forth by the Dynamex case.