Wage Law

We know from your emails that some of you check this blog more than once a day. If you are one of those, you've undoubtedly noticed some strange things afoot at the California Wage Law blog lately. Here's what happened.

A few weeks ago, Typepad introduced a new post editor. As a post author, I hate, hate, hate it. It makes formatting easier and it allows more flexibility regarding use of links, embedded photos and a host of other features, but it slows the process way down, causing the sort of "lag" that gamers experience when they overload their antiquated sysems with the latest MMORGs. Not all Typepad blogs have it. Apparently, ours was one which was randomly assigned the new post editor. We were made involuntary beta testers.

Along with the release of the new post editor, Typepad brought out a bug regarding the posting status of particularly posts. It has long been the case that, when we write a new post, we don't have to publish it immediately. We can publish it immediately, or we can save it for later, either as a "draft", which is not supposed to be published, or as a post to be published at a particular date and time, which we often do. For example, I often come across wage & hour related information which isn't any more or less relevant if weeks pass before I publish it. I'll save those so that the blog can continue to provide content even if Mark and I are in trial, or I'm out having (another) surgery, and Mark is slammed trying to do the work of two lawyers.

This month, Typepad has been very unreliable regarding drafts and future posts. Several times, when we wanted to delay a post for a few days, we would change the posting status to some date way in the future, i.e., July 25, so we could edit the post or decide a week later whether or not to use it. Typepad suddenly began to disregard these changes, and published everything on the date we originally told it to publish, so you might have looked at the blog and seen a post dated a month in the future, and then watched it disappear a few hours later.

Last week, every single post that was published was a post that was supposed to be published this week, while I am supposed to be out recovering from surgery. The more timely content sits in "draft" stage, and we'll sort that out as we have time this week. The post you are reading right now was originally a post about the DOL's wage recoveries. We edited the post a bit, and to our dismay, both versions were published, even though we changed the original post to unpublished status. Typepad tells me that "Our engineers are aware of this issue, and a fix is being released within the week. Once this fix goes live, you should no longer experience this issue."

I hope they are right, because if it doesn't get fixed, I'm going to have to move the blog to another host service. --Mike

There are no new DLSE opinion letters thus far in 2008. In 2007, only two opinion letters were issued:

• 2007.10.29 Exemption: Administrative (IT)
• 2007.08.29 Mandated Security Officer Training Time: Compensability

You can follow along and get an update at any time at the DLSE's website: http://www.dir.ca.gov/dlse/OpinionLetters-byDate.htm

The Wage and Hour Division (WHD) administers and enforces some of our nation’s most comprehensive labor laws. Through enforcement and other administrative actions, WHD recovers back wages on behalf of employees. WHD makes every effort to locate and notify all employees due back wages. If WHD is unsuccessful in locating an employee, the back wages are held for three years before being sent to the U.S. Treasury.

If you are an employee, and you think that the Department of Labor, Wage & Hour Division might have sued one of your former employers and recovered money for you and a plantload of your co-workers, you can find out for sure at the department's website:

https://www.dol-esa.gov/emploc/

We didn't check for ourselves, since we know that Walsh & Walsh, P.C.'s employees don't have any claims.

According to at least one reported case, statistical data set forth on the United States Department of Labor Web site (we'll post the link if we can find it) indicates that the wage and hour division of the labor department collected $212,537,544 in back wages for 342,358 employees for fiscal year 2003, for an average award of $620.80 per employee.

This year, we've seen some interesting law and motion disputes over amending pleadings to include PAGA claims, and the timing that affects those pleadings and amendments. Once you give your PAGA notice to the Labor & Workforce Development Agency, Labor Code § 2699.3(a)(2)(A) gives the agency 33 days to decide whether to investigate. If they timely inform an employee that they are going to investigate, they have 120 days to do so. Labor Code § 2699.3(a)(2)(B). If they do nothing by the expiration of 158 days from your letter, you can amend your complaint. Labor Code § 2699.3(a)(2)(B). The amendment is as a matter of right if within 60 days of the date you obtained the right to proceed. Labor Code § 2699.3(a)(2)(C) ["Notwithstanding any other provision of law, a plaintiff may as a matter of right amend an existing complaint to add a cause of action arising under this part at any time within 60 days of the time periods specified in this part." (emphasis added)].

When an employee sues for overtime wages, but cannot accurately provide an accounting of all hours worked, because neither the employee nor the the employer kept a record of the employee's time, who bears the burden of proving exactly how many hours were worked? The answer is that the employee bears only the burden of proving that some unpaid compensable time was worked, and then providing some estimate of how many hours. Then the burden shifts to the employer to establish a more certain number.

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Labor Code § 1174 requires every employer to maintain "payroll records showing the hours worked daily by and the wages paid to employees." Similarly, Section 7 of each Industrial Welfare Commission (IWC)wage order requires employers to keep accurate information, including time records showing when the employee begins and ends each work period, meal periods, split shift intervals, and total hours worked. "It is the employer’s responsibility to keep accurate records of the time that employees work. If the employer fails to maintain accurate time records, the employee’s credible testimony or other credible evidence concerning his hours worked is sufficient to prove a wage claim. The burden of proof is then on the employer to show that the hours claimed by the employer were not worked." DLSE Enforcement Policies and Interpretative Manual, § 29.1.1. Failure to do so can have quite significant evidentiary consequences for the delinquent employer.

"Where the employer has failed to keep records required by statute, the consequences for such failure should fall on the employer, not the employee. In such a situation, imprecise evidence by the employee can provide a sufficient basis for damages." Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 Cal.App.3d 16. See also Anderson v. Mt. Clemens Pottery Co. (1945) 328 U.S. 680, 688 ("Due regard must be given to the fact that it is the employer who has the duty to keep proper records of ...hours.... If the employer fails to produce such evidence, the court may then award damages to the employee, even though the result be only approximate.")

If a trial court concludes that an employee's offer of proof of the number of overtime hours would cause the court to guess at the amount of damages, and therefore the employee cannot meet his burden at trial, is an error of law. "Once an employee shows that he performed work for which he was not paid, the fact of damage is certain; the only uncertainty is the amount of damage. In such a case, it would be a perversion of justice to deny all relief to the injured person, thereby relieving the wrongdoer from making any restitution for his wrongful act." Hernandez v. Mendoza (1988) 199 Cal.App.3d 721.

The lesson to be learned: keep records of the hours worked by all employees, even the ones you think are exempt.

We've been told that there are several Superior Court judges, particularly in the Bay Area, who believe that a so-called "claims made" class action settlement should never be approved in a wage & hour case. If there was a Bible for such believers to follow, one of the Gospels would be the original opinion written by U.S. District Court Judge William Alsup in Kakani v. Oracle Corp. (N.D. Cal 2007) 2007 U.S. Dist. LEXIS 47515; 12 Wage & Hour Cas. 2d (BNA) 1308; 154 Lab.L.Rep. (CCH) 35,310.

Judge Alsop initially rejected a class action settlement in that case, a nationwide class involving "about ten job classifications (although the complaint remained unchanged and narrower)". Only after dramatic changes to the structure of the agreement did the parties obtain court approval for their deal. Why did he deny preliminary approval at first? Let him count the ways:

“Under the settlement, all wage-and-hour rights (not just overtime) of putative class members would be completely extinguished and replaced by an exclusive claims procedure. By expressly obligating itself only on a "claims-made" approach, Oracle would pay only those who submit claims up to a total of nine million dollars less all fees and expenses. Counsel wants $2.25 million in attorney's fees and $75,000 in expenses. In addition to their own shares of the settlement, $45,000 total would be paid to the three named plaintiffs as "incentive payments." Costs of administration would also be deducted. Because it will be a "claims-made" settlement, there will be no residue. All unclaimed amounts will revert to Oracle. Counsel now desire preliminary approval under Rule 23(e) and recommend notice be sent by mail to last known addresses of 1500 or so workers granting them a brief period for filing claims -- after which all of their claims and rights would be forever barred, even as to those who never receive actual notice or submit a claim.”

The release also forfeited "any and all claims that were asserted or could have been asserted" (language we've seen many a defendant try to negotiate) in the action. Judge Alsop explained that he was “at a loss to understand how counsel can portray the release as benignly as they have.” Instead, Judge Alsop used words like "draconian" and "unfair to class members" and rejected the agreement, but not before first pointing out that, in his opinion, all of the flaws in the deal should have been caught by the class counsel before they ever entered his courtroom.

“Virtually none of the foregoing problems were raised by counsel, illustrating the sad fact that once a collusive settlement is reached, counsel have no incentive to critique their joint proposal. The district judge must dig through the file on his or her own. No doubt, this Court has missed some further issues not having an advocate to call out the weak spots. … Preliminary approval is DENIED.”

In Kakani v. Oracle Corp. (N.D. Cal. 2007) 2007 U.S. Dist. LEXIS 58740, 154 Lab.Cas. (CCH) P35,323, the settlement was preliminarily approved.

For all of the above-stated reasons, plaintiffs' and defendant's motion for preliminary approval of the proposed settlement agreement is GRANTED, subject to the following conditions. First, the notice to class members must include a statement that named plaintiffs will be eligible to receive payments of up to 25% of the $ 15,000 paid to the California Labor Workforce Development Agency under the California Private Attorneys General Act and that these amounts will be over and above what the absent class members will receive. Second, after the deadlines to submit claims and opt-out notices have passed, class counsel and the claims administrator are ordered to submit a list of all class members by name, divided into categories of those who opted in, those who opted out, and those whose notices were returned undeliverable. At this time, the Court reserves the issue of final approval of the settlement agreement. In no way should the notice suggest that the Court has given approval to the settlement; instead the notice should state that the Court invites class members to comment on the adequacy of the settlement and it should state that the settlement represents about 15% of the maximum that might be recovered if the case went to trial. Counsel must submit a copy of the notice including the above-mentioned amendments no later than AUGUST 13, 2007.

The court later characterized the process like this:

There was no meeting of the minds as to the scope of the release -- defendants contended that it would bar all future state-law claims throughout America, while plaintiffs contended that it would only bar California and FLSA claims. The settlement also was on a "claims-made" basis. Oracle would make available a pool of nine million dollars from which all claims would be paid. Any residue would revert to Oracle. Regardless of the claims paid, however, plaintiffs' counsel would have received $ 2.25 million in fees (25% of the total amount theoretically "available"). Notice to class members would have been inadequate under the first settlement, and the period given to putative class members to learn about the case and to opt out or file claims was far too short. The settlement allowed only 35 days from the date of mailing of notice to file objections and opt-out notices, and 45 days to submit claims. The proposed notice was nearly incomprehensible, with its tangle of subclasses, inattention to the serious jurisdictional issues in the state-law claims, and general legalese rhetoric. Even class members who received no notice at all or received late notices because of delivery problems would lose everything and recover nothing. Under the original agreement, California claimants would have received at least twice as much as non-California claimants. No cogent reason was given to justify the disparity in treatment between Californian claimants and Non-Californian claimants. In addition, class members would forfeit about 87.7% of their maximum claims, settling for nine million dollars, while the maximum recovery was about $ 52.7 million. In short, the proposal was collusive. Oracle would have wiped out its national wage-and-hour liabilities off its books, counsel would have received a bonanza, and a vast number of absent class members would have received little or nothing in exchange for forfeiture of their actions. The proposal was rejected at the threshold by an order dated June 19. An amended settlement agreement was submitted on June 29, and a further hearing was held on July 5. Some of the Court's concerns had been addressed, but others remained. The parties agreed to submit a further amended settlement agreement, which was received on July 16. An order dated August 2 found that the parties had remedied many of the problems outlined above and had reached a settlement that was sufficiently fair and reasonable to warrant preliminary approval. Preliminary approval of the three subclasses was granted.

At the time of the final hearing, the $2.25 million in requested attorney's fees were reduced significantly. Kakani v. Oracle Corp. (N.D. Cal. 2007) 2007 U.S. Dist. LEXIS 95496:

In this action alleging violations of California labor laws and the federal Fair Labor Standards Act, plaintiffs move for approval of award of attorney's fees and costs as set forth in the second amended settlement agreement. The excessive amount of attorney's fees requested, however, cannot be justified. Accordingly, the motion for attorney's fees and costs is approved in the lower amount of $ 664,000 for fees and $ 75,000 for costs.

Any time you are negotiating the fine points of a class action settlement agreement, and you are certain that the defendant is overreaching, be sure to open up a copy of the opinions in Kakani v. Oracle Corp. before you agree to terms that seem too sweet for the defense. There's a good chance your judge is going to do the same thing when considering approval of the settlement and the fees.

Congress is still considering legislation that would ban the use of pre-dispute arbitration agreements involving consumers or employees. The Senate Bill, S.1782, has seen no action since December 2007. The bill summary is as follows:

Arbitration Fairness Act of 2007 - Declares that no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of: (1) an employment, consumer, or franchise dispute, or (2) a dispute arising under any statute intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power.

Declares, further, that the validity or enforceability of an agreement to arbitrate shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement.

Exempts arbitration provisions in collective bargaining agreements from this Act.

Its companion bill, H.R. 3010, was last seen in subcommittee in October.

Not surprisingly, NELA favors the bills. The president would probably issue a veto if they passed.

Retired Alameda County Superior Court Judge Ronald Sabraw says that motions for class certification are becoming so complex that preparing for one has become almost like preparing for trial both in terms of discovery and presentation of evidence.

"The days of having a 30-minute class certification hearing are long gone."

It depends upon the case, of course. We had one last year that was slightly under 30 minutes. We had another that fit well within Judge Sabraw's description.

Where an employer offers employees premium pay for work on holidays, the employees are not entitled to additional premium pay for those hours if the hours also put the employee into statutory overtime. Advanced-Tech Security Services, Inc. v. Superior Court (2008) __ Cal.App.4th __. In other words, if your boss pays you time-and-a-half for working on Memorial Day, any overtime hours you work that day give you the same time-and-a-half rate that you would have had if you were not working overtime, and they count as "overtime hours" when calculating your right to weekly overtime pay. If you make $10 an hour on normal days, and $15 an hour on holidays, your regular rate of pay for calculating overtime on holidays does not become $15 an hours, entitling you to $22.50 per hour or $30 per hour (double time) if those hours exceed the limits for daily or weekly overtime for that week.

In this case, Advanced-Tech had filed a motion for summary adjudication on the overtime claims on the ground that the plaintiff could not prove that she was not paid one-and-a-half times her regular rate of pay for the days she worked in excess of 8 hours per day and/or in excess of 40 hours in one week. The moving papers argued that she was paid time-and-a-half for her holiday work, and the holiday/premium pay was properly credited against overtime pay to the extent she worked in excess of a 40-hour workweek.

The opposition argued that she was entitled to premium pay for holidays, and if she worked in excess of 40 hours in the same week, she was also entitled to additional overtime payments because the pay provision for holidays set forth in her employee’s handbook was part of her regular rate of pay, citing Santa Monica Police Officers Assn. v. Board of Administration (1977) 69 Cal.App.3d 96, 100, footnote 3.

Advanced-Tech argued in the reply that in the applicable weeks, she worked 60 hours; she was paid at her regular rate for 40 hours; she received 12 hours of holiday pay; and she received 8 hours of overtime pay. Therefore, she was paid properly under section 510, with the premium holiday pay credited against overtime.

The trial court denied Advanced-Tech’s motion for summary adjudication and Advanced-Tech filed a petition for writ of mandate. The Court of Appeal issued a writ directing the trial court to grant the motion.

Labor Code section 510, subdivision (a) mandates that an employer pay an employee time and one-half for (1) more than 8 hours of work in one workday, and (2) more than 40 hours of work in any workweek. In this case, the employer agreed to pay the employee a premium rate of one and one-half times her regular rate of pay for work on designated holidays. The issue presented here is whether the employee is entitled to time and one-half of the premium holiday pay as overtime if the employee works more than 8 hours in a day or 40 hours in a week. We hold that the plain language of section 510 does not require an employer to compensate an employee at a rate higher than one and one-half times the regular rate of pay under the circumstances presented here. The employer is entitled to credit the time and one-half premium pay on holidays against otherwise earned overtime. Accordingly, we issue a writ of mandate and direct respondent court to vacate its order denying the employer’s motion for summary adjudication as to real party in interest’s first cause of action for failure to pay overtime compensation and enter a new and different order granting the summary adjudication motion.

Advanced-Tech contends it complied with section 510, subdivision (a), by paying Ms. Roman at a rate of one and one-half times her regular pay for all hours in excess of 8 hours per workday and 40 hours per workweek. In addition to the language of section 510, Advanced-Tech relies on related federal law—the Fair Labor Standards Act (the FLSA)—which excludes several types of remuneration from the regular rate of pay including “extra compensation . . . for work . . . on Saturdays, Sundays, holidays, or regular days of rest.” (29 U.S.C. § 207(e) (1-8), emphasis added.) We hold that Advanced-Tech’s interpretation of the pertinent law is correct and it was entitled to summary adjudication of the first cause of action.

You can download the full text of the opinion at the court's website in pdf or word format.

We keep seeing defense motions to strike waiting time penalties from pleadings involving meal period violations. We keep seeing them denied. So far, there is little express authority confirming that the holding in Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094 makes such penalty wages available to a meal period pay claimant.

The DLSE's position is as follows:

The Murphy decision, by implication, allows employees who are owed LC 226.7 pay at time of termination, to recover waiting time penalties pursuant to LC 203 if all final wages are not paid in accordance with LC 201/202. The Court also determined that reporting time pay and split shift premiums are wages, therefore, they would also be subject to LC 203 penalties (and interest).

In each case, the plaintiffs cite Murphy, while the defendants boldly assert and attempt to plausibly maintain that meal period wages are different from ordinary wages, marking a distinction relevant to the right to recover waiting time penalties.

Few new wage and hour theories are truly novel, but one California legislator has come up with one. The California Citizens Compensation Commission is scheduled tomorrow to consider a proposal to cut elected officials' salaries by 10 percent to help deal with a $15.2 billion state budget deficit. Part of the proposal calls for cutting the salaries of only the assembly members and half of the state senators. Forty state senators might not see any decrease. A spokesman for Senator Darrell Steinberg (D-Sacramento) says that any proposal to cut some legislators' salaries but not others "would seem to violate an equal-pay-for-equal-work standard and would be seen as inherently unfair." Current salaries for elected officials in California start at $116,208 and peak at $212,179, which is the amount Arnold Schwarzenegger would be making if he accepted the governor's salary.

Americans generally disapprove of binding arbitration provisions in consumer contracts as an alternative to civil legal proceedings involving a judge or jury, according to a recent national poll by survey firm Peter D. Hart Research Associates Inc. According to the polling, when consumers learn that the company picks the arbitrator, and they give up their right to take the case to court and binding arbitration applies even if they are seriously injured, 81 percent disapprove.

The poll also shows broad support for Congressional legislation called the “Arbitration Fairness Act” that seeks to protect Americans from abusive arbitration agreements.  The legislation would ensure that the decision to arbitrate be made voluntarily and after a dispute has arisen.  In addition, the legislation enjoys very strong support across party lines with no statistically significant differences between Democrats (+38) and Republicans (+37). For more information on the poll results, contact Amaya Smith at [email protected] or 202-965-3500 x740.

The U.S. Department of Labor issued an opinion letter earlier this year, rejecting the concept of paying pro-rated salaries for part-time employees performing exempt work. The employer had asked whether it could pro-rate the minimum allowable salary of an exempt employee, paying just $15,000 per year, to reflect a 20 hour per week part-time status. The DOL said it could not. The minimum salary for a properly classified exempt employees is $23,660 annually, which works out to $455 per week, under federal law (California's minimum salaries are higher). Even a part-time "exempt" employee must be paid this amount. The employer's only alternatives are to pay the full $23,660 to the part-time employee, or to pay the employee on an hourly basis, with overtime as applicable.

Last month, Tyson Foods, Inc. filed a reply brief in Tyson Foods, Inc. v. de Ascencio. seeking a determination of “whether the time spent donning light protective gear constitutes ‘work’ under the Fair Labor Standards Act if the activities do not require a significant level of exertion.” It makes for some interesting reading, but we can't help but wonder what sort of mischief could result from a "significant exertion test" to determine whether 'work' is compensable.

The Third Circuit's original opinion can be found at this Villanova law school link.

[Hat tip: SCOTUSblog, which has links to the reply brief, cert. petition and respondent's brief.]

A developing defense trend in class action litigation involves defense firms and, at their urging, courts looking more closely for pre-existing relationships between class action plaintiffs and their lawyers, including searches for plaintiffs who have been "improperly" solicited. Defendants tend to believe that it is difficult to find a "clean class representative", especially after class action guru-turned-felon William Lerach commented earlier this year that illegal kickbacks were widespread among all class action lawyers.

Last year, in Bodner v. Oreck Direct, LLC (N.D. Cal. 2007) 2007 U.S. Dist. LEXIS 30408, 2007 WL 1223777 (Case No. 3:06-cv-04756-MHP) Judge Marilyn Hall Patel denied a motion to certify a class of more than 75,000 buyers of air purifiers from Oreck Direct because the plaintiff knew little about the case and had simply answered an ad in the San Francisco Bay Guardian looking for plaintiffs.

"The conduct in this action does not look good, does not sound good, and does not smell good. In fact, it reeks ... In light of plaintiff's undeniable and overwhelming ignorance regarding the nature of this action, the facts alleged, and the theories of relief against defendant, the court cannot conclude that he has met the threshold typicality or adequacy requirements. ... It is clear from the record that plaintiff's counsel, and not plaintiff, is the driving force behind this action."

The record reflects that the plaintiff filed a motion for reconsideration, but nothing on PACER suggests whether the court has ruled on that motion. Curiously, the Bodner opinion relied upon a 1996 New York case that is in conflict with California law. Meachum v. Outdoor World Corp. (1996) 654 N.Y.S.2d 240, 369 (“Solicitation of clients for the commencement or continuation of a class action is improper, sufficient to warrant denial of class action certification.”); cf La Sala v. American Sav. & Loan Assn (1971) 5 Cal.3d 864 (plaintiff who is no longer a member of the class generally must be granted leave to amend the definition of the class and/or to substitute a new class representative to preserve the claims of putative class members.) Bodner is not citeable in federal court, and in state court, it's effect is devastated by a citation to La Sala.

But in most wage and hour class actions, this whole problem is non-existent. Some consumer class actions begin with advertisements, and some securities class actions apparently begin with offers of kickbacks by crooked lawyers, but most wage and hour class actions start the same way: by recently terminated employees calling attorneys to find out if they have a good wrongful termination case. Sooner or later, the conversations turn to wage and hour violations, and frequently, those discussions uncover one or more widespread violations. (see, e.g., Storm's California Employment Law: "in any intake situation involving an employee, the attorneys quickly turn to wage and hour topics, no matter what the conversation starts with.").

Those conversations, of course, are privileged. We recently had a defendant attempt to find out how our client had learned of the wage and hour violations and how he came to become a class representative. After establishing that, of the client's own volition, he had contacted our firm to ascertain his rights concerning his employment relationship, the scope of non-privileged inquiry ground to a halt. The ambush doesn't work so well in wage and hour cases that begin with client-driven inquiries, rather than lawyer-driven case development.

Back in April, we mentioned two arbitration cases awaiting review by the U.S. Supreme Court. We were unaware, at the time, that one of the two cases had already been rejected. In IBEW, Local Union No. 21 v. Illinois Bell (7th Cir. 2007) 491 F.3d 685, the petititioners sought to reverse an opinion upholding an order to compel arbitration of a dispute over new employee performance evaluation guidelines. On March 17, 2008, the writ of certiorari was denied in Illinois Bell Tel. Co. v. IBEW, Local 21 (U.S. 2008) 128 S.Ct. 1696, 170 L.Ed. 2d 353, 2008 U.S. LEXIS 2405, 76 U.S.L.W. 3497, 183 L.R.R.M. (BNA) 2992.

On May 27, the Supreme Court also denied certiorari in T-Mobile USA, Inc. v. Laster (9th Cir. 2007) 252 Fed.Appx. 777 (2007 U.S. App. LEXIS 25265, 2007 WL 3194117), (S.Ct. No. 07-976, 2008 U.S. LEXIS 4492, 76 U.S.L.W. 3628) an unpublished Ninth Circuit decision. The question presented was:

Whether, under the Federal Arbitration Act, a federal court may refuse to enforce the terms of an agreement to arbitrate based upon a state-law policy that individual arbitration is unconscionable in cases involving small claims by a consumer.

The court had previously denied a similar petition for writ of certiorari taken from the California Supreme Court's decision in Circuit City Stores, Inc. v. Gentry (2007) 42 Cal.4th 443, decided by the California Supreme Court.

The Second District Court of Appeal has issued an order modifying its opinion and denying rehearing in Antelope Valley Press v. Poizner (2008) __ Cal.App.4th __.

The opinion in this case that was certified for publication and filed on April 30, 2008 is modified in the following manner:

On page 15 of the opinion, add the following paragraph to footnote 12 as a second paragraph in that footnote:

We reject AVP’s contention that the court’s analysis in JKH Enterprises is flawed.  AVP asserts that JKH Enterprises did not “consider fully” the decision in Interstate Brands v. Unemployment Ins. Appeals Bd., supra, 26 Cal.3d 770, 773, 775, where the Supreme Court had affirmed the trial court’s determination that certain of the employees of Interstate Brands were not entitled to unemployment insurance benefits, and held that it was proper for the trial court to apply the independent judgment test in reviewing the evidence produced at an administrative hearing because the case affected a fundamental vested right of the employer.  We note that the Supreme Court denied review in JKH Enterprises.  We also note that the Interstate Brands court did not address the question whether the subject workers were employees or independent contractors.  Their employee status was admitted by Interstate Brands.  However, Borello did address that issue, and there the Supreme Court simply stated that “[t]he determination of employee or independent-contractor status is one of fact if dependent upon the resolution of disputed evidence or inferences, and the [administrative agency’s] decision [on that status issue] must be upheld if substantially supported.”  (Borello, supra, 48 Cal.3d at p. 349, italics added.)  The Borello court did not state whether the question of worker status involves or affects a fundamental vested right.  As noted in footnote 13, post, the evidence in this case is disputed.  Therefore, in deciding this appeal in favor of upholding the Commissioner’s decision that the carriers are employees and not independent contractors for purposes of workers’ compensation insurance, we did so by addressing the question whether that decision is substantially supported by the evidence in the administrative record.

The appellant’s petition for rehearing is denied.

There is no change in the judgment.

We discussed the original opinion last month.

A collective bargaining unit's attorneys can represent employees (who are not members of the unit) in a wage and hour class action even if the unit is subsidizing the litigation costs, as long as the attorneys' representation complies with Rule 3-310's disclosure and consent requirements. Sharp v. Next Entertainment, Inc. (2008) __ Cal.App.4th __.

The Writers Guild of America (the Guild) had reason to believe that reality television production companies and television networks violated wage and labor laws.  The Guild held meetings during which employees of reality television discussed the purported violations.  Some who participated in the meetings, along with other reality television employees, agreed to be the named plaintiffs in two wage and labor law class action lawsuits against the production companies and the networks (collectively defendants).  Thereafter, the trial court denied defendants’ motion to disqualify plaintiffs’ counsel, but did disqualify some plaintiffs from acting as representatives of the putative classes. 

On appeal from the trial court’s order denying the disqualification order, defendants rely on California Rules of Professional Conduct of the State Bar, rule 3-310 (Rule 3-310) to contend that the trial court erred in failing to disqualify counsel for plaintiffs.  This contention is based upon the facts that the firm who represented the Guild was also counsel for plaintiffs, the Guild paid for plaintiffs’ attorney fees and costs, and the litigation was conceived by the Guild as part of its organizing campaign, a campaign which many plaintiffs supported.  Defendants use many of the same facts to further contend that the trial court erred in failing to disqualify all plaintiffs from their roles as representatives of the uncertified classes.

In the published portion of this opinion (pts. I., II., III.A. & IV.), we hold that the trial court did not err in failing to disqualify class counsel and the trial court did not err in refusing to disqualify all plaintiffs from acting as the named representatives of the putative classes.

In their cross-appeal, plaintiffs appeal from the trial court’s orders directing their counsel to ask them certain questions relating to their association with the Guild.  In the unpublished portion of this opinion (pt. III.B.), we hold that the trial court’s orders were vague.

Thus, we affirm in part and reverse in part.

We don't get many published opinions concerning disqualification of class counsel, so Sharp v. Next Entertainment, Inc. is interesting reading even if you don't have a union issue in your case. You can download the full text from the court's website here in pdf or word format.

 

Prior to 1999, California employees had no right to use employer-provided paid sick leave to care for a sick family member, sometimes referred to as “kin care” leave, without the employer’s agreement. In 1999, the Legislature adopted Labor Code § 233, which, as amended, states in relevant part:

(a) Any employer who provides sick leave for employees shall permit an employee to use in any calendar year the employee's accrued and available sick leave entitlement, in an amount not less than the sick leave that would be accrued during six months at the employee's then current rate of entitlement, to attend to an illness of a child, parent, spouse, or domestic partner of the employee. All conditions and restrictions placed by the employer upon the use by an employee of sick leave also shall apply to the use by an employee of sick leave to attend to an illness of his or her child, parent, spouse, or domestic partner....
...
(b)(4) "Sick leave" means accrued increments of compensated leave provided by an employer to an employee as a benefit of the employment for use by the employee during an absence from the employment for any of the following reasons: (A) The employee is physically or mentally unable to perform his or her duties due to illness, injury, or a medical condition of the employee. (B) The absence is for the purpose of obtaining professional diagnosis or treatment for a medical condition of the employee. (C) The absence is for other medical reasons of the employee, such as pregnancy or obtaining a physical examination.

In McCarther v. Pacific Telesis Group (2008) __ Cal.4th __, the question was whether section 233's requirement that employers allow their employees to use "sick leave" to attend to an illness of a child, parent, spouse, or domestic partner, applies not only to traditional sick leave policies, but also to a "sickness absence" policy under which employees earn the use of five-day increments of compensated leave in the event of illness or injury, subject to the employer's attendance management policy. The Court of Appeal found the statute applicable, regardless of the name or description of the policy.

Plaintiffs’ appeal presents a pure question of law. Labor Code section 233 requires employers to allow their employees to use “sick leave,” as defined in section 233, to attend to an illness of a child, parent, spouse, or domestic partner, so-called “kin care” leave. Plaintiffs argue that section 233 applies to the “sickness absence” policy to which they are subject as employees of their respective defendant companies. Defendants argue that section 233 applies to “traditional accrual-based sick leave policies” only, and not to the “sickness absence” policy. We conclude that section 233 applies to the policy, and reverse the trial court’s judgment.

...the requirements of section 233 extend to the “sickness absence” policy because, pursuant to the policy, defendants provide “accrued increments of compensated leave . . . to an employee as a benefit of the employment for use by the employee during an absence from the employment” due to illness or injury. (§ 233, subd. (b)(4).) We base our conclusion on the plain and commonsense meaning of the statute’s text. The trial court erred in granting defendants’ motion for summary judgment and denying plaintiffs’ motion for summary adjudication.

You can download the full text of McCarther here in pdf or word format.

As an added bonus, the opinion contains this enjoyable footnote concerning the definition of the word "accrue":

The extensive debate calls to mind a passage in Lewis Carroll’s Through the Looking Glass, in which Humpty Dumpty explains his use of a word to Alice. “When I make a word do a lot of work like that, said Humpty Dumpty, I always pay it extra.” (Carroll, Tenniel and Gardner, The Annotated Alice (2000), p. 213.)

We're not sure when or where, but someday, we are going to figure out a way to cite to that footnote.

Santa Clara Superior Court Judge Jack Komar has certified a class of approximately 300 technical writers currently or formerly employed by Sun Microsystems, but has ordered the class counsel to find a second class representative. The class action seeks to recover overtime and meal period pay for a group of employees classified by Sun Microsystems as exempt under Labor Code § 515.5 and its computer professional's exemption.