Wage Law

The California Supreme Court will hear arguments Tuesday morning in the In re Tobacco II Cases, S147345 (George, C.J., not participating; Moore, J., assigned justice pro tempore) #06-120  In re Tobacco II Cases, S147345.  (D046435; 142 Cal.App.4th 891; Superior Court of San Diego County; JCCP 4042.) The statement of issues doesn't seem likely to reach any issues directly pertinent to wage and hour litigation, but many wage and hour lawyers handle other kinds of unfair competition cases, so like many of you, we are watching the progress of this case:

Petition for review after the Court of Appeal affirmed orders decertifying a class in a civil action.  This case includes the following issues:  (1) In order to bring a class action under Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.), as amended by Proposition 64 (Gen. Elec. (Nov. 2, 2004)), must every member of the proposed class have suffered “injury in fact,” or is it sufficient that the class representative comply with that requirement?  (2) In a class action based on a manufacturer’s alleged misrepresentation of a product, must every member of the class have actually relied on the manufacturer’s representations?

If any readers are attending and want to send us your notes from the argument, we would be happy to pass them along to the rest.

The FLSA has no meal period requirement, but 21 U.S. states or other jurisdictions have meal period requirements; seven of those (California, Colorado, Kentucky, Minnesota, Nevada, Oregon, and Washington) also have rest periods requirements. Meal periods for minor workers are mandated in 35 states or territories. For a comparison of all states' meal and rest period laws, check out this page at the DOL's website.

Last month, DLSE investigators issued another $800,000 in fines to businesses in the restaurant industry for various labor law violations. The 29 investigators conducted 245 inspections in 26 counties across the state on January 21-22. A total of 143 employers were cited. Most of the fines ($676,000  issued to 129 employers) were the result of a failure to carry workers’ compensation insurance. Other violations included failure to pay minimum wage or overtime, failure to provide itemized deductions to employees, and failure to abide by child labor laws for minors under the age of 18.

We wondered what happened in Banda v. Richard Bagdasarian, Inc. 2008 WL 888524, one of the penalty/wage cases that was a companion case to Murphy v Kenneth Cole Productions, Inc. (2007) 40 C4th 1094, and checked to see if it was still pending. It is not. In April 2008, in an unpublished opinion, the Fourth District, Division Two, ordered the Superior Court to approve a settlement agreement in the matter. In Banda, a class of farmworkers challenged the defendant’s failure to provide meal periods and rest breaks, and its practice of requiring them to taste unwashed and pesticide-laden grapes for sweetness. The claims were brought under the Unfair Competition Law. The first unpublished Fourth District opinion, 2006 WL 1554441, had been transferred by the Supreme Court back to the Fourth District on May 23, 2007, for reconsideration in light of Murphy.

The main provisions of the settlement agreement create a settlement fund to be distributed by a settlement administrator (1) to pay specified fees, costs, and expenses and (2) to make specified payments in compensation for omitted breaks ( Lab.Code, § 226.7) to plaintiffs and other persons employed by defendant during the 2001 and 2002 harvests who show their entitlement under the settlement agreement by timely submitting a settlement claim form. No provision is made for payment of wait time penalties. ( Lab.Code, § 203.) Claimants must execute a release of any and all claims “resulting from or occurring in connection with [the claimant's] employment by [defendant].” The settlement agreement includes a procedure to notify potentially eligible claimants.

...

Pursuant to the Supreme Court's transfer order, the opinion previously filed June 8, 2006, is vacated. Pursuant to the stipulation of the parties, the judgment is reversed. This reversal of the judgment does not indicate a ruling on the merits of the judgment, but serves only to vacate the judgment and restore jurisdiction to the trial court so that it may carry out the following directions implementing and enforcing the parties' settlement agreement.

The clerk of this court is directed to send, with the copy of this opinion sent to the superior court, a copy of the recitals re: stipulation to reverse, with the attached settlement agreement, filed in this court April 2, 2008. The trial court is directed: (1) to approve the settlement agreement, and to approve the form and content of the settlement notice and claim form attached to the settlement agreement; (2) to enter a judgment ordering the agreed permanent injunction, which shall terminate at the conclusion of the 2012 grape harvest, and ordering the parties to abide by the terms of the settlement agreement; and (3) to retain jurisdiction until the permanent injunction is terminated to take any actions necessary to implement and enforce the injunction, the judgment, and the settlement agreement.

The opinion did not mention the dollar amount of the settlement, but two news stories reported that the cash value of the settlement was $585,000.

Portfolio Media Inc.'s Law 360 Litigation Almanacs reports that U.S. District Court civil case filings increased 9% from 2007 to 2008, and class actions increased 8% (to 7,661). Employment cases were up just 6% from 2007. With the economy bringing layoffs and other terminations in large numbers, employment litigation will probably increase more in 2009 that other types of litigation.

More lawyers are joining twitter every day, and it's becoming a popular way to get your legal news quickly. We find ourselves posting short notes on twitter when we don't have time to put together a proper blog post immediately. If you aren't following your favorite legal bloggers on twitter, you're only get part of the information they are offering. You can follow us at http://twitter.com/wagelaw

The Supreme Court has extended its time to grant or deny a petition for review that was filed in January in Brewer v. Premier Golf Properties (2008) 168 Cal.App.4th 1243. We discussed the opinion in a post that can be found at this link. The case was notable both for declaring punitive damages unavailable in claims made for Labor Code wage-and-hour violations, and for upholding the trial court's award for meal period and rest period violations. The time for granting or denying review in the above-entitled matter is now extended to and including April 8, 2009, or the date upon which review is either granted or denied.

Employers frequently lose determinations of their staffs' independent contractor status. However, in Cristler v. Express Messenger Systems, Inc.  (2009) __ Cal.App.4th __, the employer prevailed at trial, and the Court of Appeal has affirmed the finding that California Overnight's package delivery drivers were bona fide independent contractors.

James W. Cristler, John Purves, James G. Harrod, Sydney Moroff and Mark Lambert, individually and as the representative of a class of similarly situated persons (collectively Cristler), sued a parcel delivery company, Express Messenger Systems, Inc., doing business as California Overnight (Express Messenger).  The lawsuit contained a number of causes of actions, all based on a core contention that Express Messenger improperly classified its employees as independent contractors.  The case was litigated before a jury and, with respect to certain claims, a trial court.  Express Messenger prevailed.

Cristler appeals, contending that the trial court erred in a number of respects.  Cristler argues that the trial court:  (i) abused its discretion by failing to amend the class definition in light of developments subsequent to class certification; (ii) erred in instructing the jury as to both the burden of proof and with respect to the pertinent classification factors that distinguish employees from independent contractors; (iii) applied incorrect legal standards in adjudicating Cristler's unfair and unlawful business practices causes of action; (iv) abused its discretion by allowing the introduction of irrelevant and "inflammatory" evidence as to the relative benefits of independent contractor status; and (v) erroneously permitted Express Messenger to recover costs for the production of exhibits that were not used at trial.  As discussed below, we conclude these contentions are without merit and affirm.

The complaint alleged causes of action for: (1) unfair and unlawful business practices in violation of Business and Professions Code section 17200; (2) failure to pay overtime compensation in violation of Labor Code sections 510, 515, and 1194; (3) failure to provide properly itemized wage statements in violation of section 226; (4) failure to fully compensate for business expenses in violation of section 2802; and (5) wrongful termination in violation of public policy. Each cause of action arose from the claim that the employer's classification of its delivery personnel as independent contractors was improper. The plaintiffs certified a class and tried the case to a jury and, on some equitable issues, the court. The result was a determination that the drivers were independent contractors.

On appeal, the plaintiffs cited various published opinions in which similar groups of workers were found to be employees, rather than independent contractors, essentially arguing that this dictated an identical result for the California Overnight drivers. The Court of Appeal disagreed.

The simple answer to these references is that these cases concerned different circumstances presented to a different finder of fact. Indeed, even if the facts of this case were identical to those in the cases Cristler cites (and they are not), we would not be authorized to overrule the determination of the jury to achieve conformity with other cases — particularly as Cristler does not even argue that the jury's verdict is unsupported by substantial evidence.

The opinion contains an interesting analysis of the jury instructions given on the core issue of independent contractor status. The trial court instructed the jury that "The issue for you to decide is whether or not the Plaintiffs are employees or independent contractors. "The Plaintiffs allege that they . . . were Defendant's employees. "The Defendant . . . claims that the Plaintiffs were independent contractors, and were not employees. "Plaintiffs have the obligation to prove that they were Defendant's employees. The Defendant has the obligation to prove that the Plaintiffs were independent contractors."

Plaintiff contended that these instructions were erroneous because they obscured the fact that California law required Express Messenger to bear the burden of establishing that persons in its service were independent contractors. (Labor Code § 3357: "Any person rendering service for another, other than as an independent contractor, or unless expressly excluded herein, is presumed to be an employee.") However, the Court of Appeal found no error, because the instructions included these:

• "Any person rendering service for another, other than as an independent contractor, is presumed to be an employee."
• "With respect to this challenge, the trial court instructed the jury as follows: "In determining whether the Plaintiffs and other class members ('drivers') were employees or independent contractors, you must consider a number of factors. You will need to weigh all of these factors based on the evidence that you have heard. 1. The most important factor to consider is the extent to which the Defendant has the right to control the details of the work performed. The following additional factors are to be considered: 2. The right to discharge at will without cause; 3. Whether the drivers are engaged in a distinct occupation or business; 4. The skill required in this occupation; 5. Whether the driver or California Overnight pays for vehicles, equipment, and business expenses; 6. The length of time for which the services are to be performed; 7. The method of payment to drivers, whether by the hour or by the job; 8. Whether or not the work done by drivers is part of the regular business of California Overnight; 9. Whether or not the parties believe they are creating an employer-employee relationship; 10. The driver's opportunity for entrepreneurial profit or loss depending upon his/her managerial skill; 11. The drivers' use of helpers/replacements; and 12. The degree of permanence of the working relationship.
• "These individual factors cannot be applied mechanically as separate tests; they are intertwined and their weight depends often upon particular combinations."

In totality, listing these factors appropriately allowed the jury to apply the factors as it saw fit, and the findings were supported by adequate evidence. You can download the full text of the Christler opinion here in Word or PDF.

If you don't have a lawyer, and you want to bring a wage claim against your employer, one of the first decisions you have to make is where to go to file your claim before the Labor Commissioner's office. This link will tell you where to go. Click on the letter of the city where you worked, then click on the name of the city, and it will direct you to the correct DLSE venue. Good luck.

Dukes v. Wal-Mart, Inc. (9th Cir. 2007) 509 F.3d 1168 (one of very few pending cases to have an extensive wikipedia page) is no longer good law; the 9th Circuit is reviewing it en banc. The order provides:

Upon the vote of a majority of nonrecused active judges, it is ordered that this case be reheard en banc pursuant to Circuit Rule 35-3. The three-judge panel opinion shall not be cited as precedent by or to any court of the Ninth Circuit. Judges McKeown, Rawlinson and Bybee did not participate in the deliberations or vote in this case.

If the prior order permitting the case to proceed as a class action is upheld, the number of plaintiffs could approach two million.

The Ninth Circuit's opinion in Sullivan v. Oracle Corp. (9th Cir. 2008) 547 F.3d 1177, 14 Wage & Hour Cas.2d (BNA) 321, has been withdrawn, and the Ninth Circuit has certified three questions to the California Supreme Court. Sullivan v. Oracle Corporation (9th Cir. 06-56649 2/17/09).

We certify the following questions to the California Supreme Court, corresponding to the three claims presented by the plaintiffs.

First, does the California Labor Code apply to overtime work performed in California for a California-based employer by out-of-state plaintiffs in the circumstances of this case, such that overtime pay is required for work in excess of eight hours per day or in excess of forty hours per week?

Second, does (California Business and Professions Code) § 17200 apply to the overtime work described in question one?

Third, does § 17200 apply to overtime work performed outside California for a California-based employer by out-of-state plaintiffs in the circumstances of this case if the employer failed to comply with the overtime provisions of the FLSA?

By separate order, we today withdraw our published panel opinion in this appeal, pending a decision by the California Supreme Court on the questions of California law that we now certify. If the California Supreme Court decides any or all of the certified questions, we will accept and rely on the Court’s decision of that question or those questions in any further proceedings in this court.

The order certifying these questions can be found at this link. The order withdrawing the prior published opinion can be found at this link. Our previous post about the original opinion can be found at this link.

An article published in the Winter 2009 edition of the Harvard Law & Policy Review concludes that employees in employment discrimination lawsuits tend to do much better in state court than federal court. In “Employment Discrimination Plaintiffs in Federal Court: From Bad to Worse?”, professors Kevin M. Clermont & Stewart J. Schwab report that plaintiffs in non-employment lawsuits win half of the time, but win just 15 percent of the time in employment discrimination cases in federal courts. On appeal, the circuit courts reverse 41% of the district courts' pro-employee decisions, and only reverse 8.7% of the district courts' pro-employer decisions. The article doesn't specifically address wage and hour case results. It does not the increase in wage cases, however, which contrast with a marked decline in the volume of other employment cases from 1999 to 2007.

Instead, there have been reports of a recent spike in employment class actions, as well as reports of increases in other kinds of employment litigation. E.g., Julie Kay, Employers Start to Push Waivers, Nat’l L.J., June 9, 2008, at 8 (“overtime lawsuits have become the most common form of employment lawsuit”); Sheri Qualters, Firms Beef Up Employment Practices, Nat’l L.J., Mar. 17, 2008, at 10 (“Employment cases are increasingly likely to be labor-intensive class actions, instead of individual employees bringing grievances to court . . . .”); Fourth Annual Workplace Class Action Litigation Report from Seyfarth Shaw Notes Significant Growth in High Stakes Litigation at State Court Levels: Volume of Wage and Hour Litigation Continues to Increase Exponentially; Employment Discrimination Class Actions Theories and Remedies Continue to Evolve and Expand; and the Size of ERISA Class Action Settlements Outpace all Other Types of Class Action Resolutions, http://www.seyfarth.com/dir_docs/news_item/2a69ffe5-df15-475f-a78a-da0661200731_documentupload. pdf (Jan. 14, 2008). Although class actions constitute only about a third of one percent of the number of cases in code #442, see Nielsen & Nelson, supra note 6, at 692, an increase in class actions could account for part of the drop in individual actions, unless the class actions mainly mobilized new sorts of plaintiffs. Additionally, the AO does not categorize wage-and-hour or equal-pay suits as discrimination suits under code #442, but rather under code #710.

Another interesting, if not light, read.

If you are curious about the wages earned by particular employees of the U.C. system, check out this link from the Orange County Register. Of the 250,000 people employed by the University of California system, 3,018 earned a gross pay of $200,000 or more. Most are doctors, chancellors and coaches. The database covers employees who grossed $25,000 or more. You can search by top earners, gross pay range, employee name or UC campus. The database covers 2007. Rick Neuheisel, for example, isn't in there. Jeff Tedford is, however. He's number one on the salary list.

One dirty trick we have been seeing more frequently is a bit of gamesmanship that permits a defendant to avoid the one deposition rule. In California, absent a court order providing otherwise (and upon a showing of good cause), a party is limited to taking only one single deposition of a party who is a natural person, i.e., a wage and hour plaintiff. Code of Civil Procedure § 2025.610(a); Fairmont Ins. Co. v. Superior Court (Stendell) (2000) 22 Cal.4th 245, 254.

"Once any party has taken the deposition of any natural person, including that of a party to the action, neither the party who gave, nor any other party who has been served with a deposition notice pursuant to Section 2025.240 may take a subsequent deposition of that deponent."

Certain firms will often try to circumvent the one-deposition rule by noticing the plaintiff's deposition for a single day, with the proviso that it shall "continue from day to day thereafter until completed." Then, at the end of that first day, or perhaps at the end of the second day, the attorney will declare that more time is needed, and the deposition will have to resume at some future mutually convenient date, usually one which cannot be determined at that moment, because the attorney doesn't have a calendar, or is about to begin a very important trial or other time-consuming project.

Sometimes, this is the result of an unexpectedly slow deposition. More often than not, however, what the attorney is trying to do is have the advantage of taking an early deposition, to cement and discover, for themselves and their witnesses, what plaintiff's testimony will be, but preserve the ability to take a later deposition after more information and evidence can be gathered. Be ready for this tactic. Before the deposition, inquire as to counsel's availability for the days following the deposition, and advise counsel, in writing, that the deposition will be day-to-day, as noticed, and you will not produce the witness for another day of deposition if those days are non-consecutive, so that Plaintiff's deposition can be concluded in one sitting. If that doesn't work, consider bringing an immediate motion for a protective order requiring counsel to begin Plaintiff's deposition only on a date on which it can be finished within X number of consecutive weekdays.

The Second District Court of Appeal has modified its opinion in Lu v. Hawaiian Gardens Casino (2009) __ Cal.App.4th __ (Labor Code § 351 and Labor Code § 450 do not provide for a private right of action, but may serve as predicate statutes for suits under the unfair competition law). The modification does affect the judgment. The modification is as follows:

The opinion filed by this court on January 22, 2009 is hereby modified as follows:

On page 2, line three of the second full paragraph starting with “to sue, that they”, insert the word “may” before the word “nonetheless”.

On page 6, delete heading 1 and insert, “1.  Lu does not have a private right to sue directly under Labor Code sections 351 and 450 but said statutes may serve as predicates to causes of action under the UCL for violation thereof.”

On page 11, line one of the second full paragraph starting with “Nevertheless,” insert the word “possible” before the words “cause of action”.

On page 11, lines seven and eight of the second full paragraph, delete the sentence starting with “The UCL is a proper avenue”, and insert, “It therefore follows that sections 351 and 450 can serve as predicates for a UCL claim by Lu.”

On page 11, at the end of the second full paragraph, insert “We express no opinion about whether Lu’s UCL claim can withstand demurrer.  We simply hold that these statutes can serve as predicates to a UCL cause of action.”

On page 24, delete the first full sentence and insert, “The trial court’s order granting summary adjudication with respect to the UCL cause of action premised on a violation of Labor Code section 351 is reversed with directions to deny summary adjudication of that cause of action.”

The modifications affect the judgment.

We discussed the original opinion in a recent post found at this link.

The U.S. President earns an annual salary of $400,000 (exempt from overtime) in addition to a generous expense account and, of course, use of a home with 132 rooms, 32 bathrooms, a theater, bowling alley, tennis court and other amenities, including a private jet and a vacation resort at Camp David. Adjusting for inflation, however, the president's salary is less than half of what it was in 1969.

The Supreme Court has denied a petition for review in Harper v. 24 Hour Fitness, Inc. (2008) 167 Cal.App.4th 966, wherein the Court of Appeal reversed a decertification order. The reversal was based upon a holding that the need to individually examine each class member's records to determine whether he or she qualifies for inclusion in the class does not establish a lack of ascertainability or manageability or establish that common questions of fact or law do not predominate.

We discussed Harper v. 24 Hour Fitness, Inc. at length in a post last December.

The Supreme Court has denied a depublication request in Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116 (trial courts must determine adequacy and fairness of a class action settlement agreement based upon admissible evidence presented to the court during the approval process). We discussed Kullar in a post last December.

As we wait for the California Supreme Court to decide Brinker Restaurant Corp. v. Superior Court (2008) 165 Cal.App.4th 25, we can assume with a high degree of certainty that any state court opinion dealing with provide/permit issues or meal/rest break certification orders will be reviewed as a companion case to Brinker. For the next few months, therefore, we will have only Cicairos v. Summit Logistics (2005) 133 Cal.App.4th 949 as controlling authority in Superior Court, but in U.S. District Court, judges are free to guess what they think the California Supreme Court would decide.** When interpreting state law, federal courts are bound by decisions of the state's highest court (In re Kirkland (9th Cir.1990) 915 F.2d 1236, 1238), but in the absence of such a decision, a federal court shall apply the rule that it believes the state supreme court would adopt if faced with the same issue. Arizona Electric Power Cooperative, Inc. v. Berkeley (9th Cir.1995) 59 F.3d 988, 991.

The "make available" and/or denied certification cases that reject or distinguish Cicairos include:

** Well, maybe not entirely free to guess. As a reader points out, a Ninth Circuit case from Oregon holds that a federal court is obligated to follow the decisions of the state's intermediate appeallate courts, unless there is convincing evidence that the state supreme court would decide differently. Ryman v. Sears-Roebuck & Co. (9th Cir. 2007) 505 F.3d 993, 995. 

‘[W]here there is no convincing evidence that the state supreme court would decide differently, a federal court is obligated to follow the decisions of the state's intermediate appellate courts.’ ” Vestar Dev. II, LLC v. Gen. Dynamics Corp., 249 F.3d 958, 960 (9th Cir.2001) (quoting Lewis v. Tel. Employees Credit Union, 87 F.3d 1537, 1545 (9th Cir.1996) (internal quotation marks omitted)). The district court did not cite any evidence that the Oregon Supreme Court would disaffirm Yeager. It merely disagreed with Yeager. FN1 Because there is no evidence that the Oregon Supreme Court would have decided the OFLA issue differently, the district court erred in not applying the Yeager rule.FN2

FN1. We note that the district court did cite opinions by other federal district judges expressing their disagreement with the Yeager rule. The opinions of other federal judges on a question of state law do not constitute “convincing evidence that the state supreme court would decide [an issue] differently,” Vestar, 249 F.3d at 960, nor do those opinions contain any relevant “convincing evidence.”

FN2. Although not dispositive, we note that the Oregon Supreme Court declined to grant review of Yeager. See Yeager v. Providence Health Sys. Or., 337 Or. 658, 103 P.3d 641 (2004) (table).

Given the decision of the Supreme Court not to review Cicairos v. Summit Logistics (2005) 133 Cal.App.4th 949 and Bufil v. Dollar Financial Group, Inc. (2008) 162 Cal.App.4th 1193, and their decision to grant review in Brinker Restaurant Corp. v. Superior Court (2008) 165 Cal.App.4th 25, and Brinkley v. Public Storage, Inc. (2008) 167 Cal.App.4th 1278, in a case where the employer cannot clearly distinguish Cicairos, the District Court should feel obligated to follow it.

We are hearing from various sources in print, online and radio, that a budget deal between the California legislature and the governor is close to final, and the early reports suggest that no changes or overtime laws or meal period and rest period regulations are included in the deal.

Two hundred years ago today was born one of the greatest Americans ever to live. Remarkably, that same day, Charles Darwin was born. How many days in history have spawned two people who so dramatically influenced the history of the world?

Don't forget, state courts are closed. If you are counting court days when calendaring due dates for pleadings and other papers, today does not count as a court day. Neither does next Monday.

As of January 2009, use of the CM/ECF system became mandatory for all attorneys filing in the 9th Circuit, unless they are granted an exemption from using the CM/ECF system. For more information, check out the 9th Circuit's ECF information page.

The United States Court of Appeals for the Ninth Circuit now offers several RSS feeds with headlines, descriptions and links back to its website for complete information. Opinions, Memoranda - Unpublished Dispositions, Cases of Interest and Announcements can now all be obtained through their RSS feeds.

Note, however, that if you are using Internet Explorer 6.0 or earlier, you will need to obtain an RSS Reader.

A California Labor Commissioner decision was upheld, and additional reparations awarded in a civil lawsuit totaling over $246,000 in a case appealing a DLSE award against Csardas, Inc. dba Csardas Restaurant and Bakery, in favor of four former restaurant workers. The workers were awarded $115,423.64 for unpaid minimum and overtime, meal and rest period violations under Labor Code 226.7, interest, and waiting time penalties under Labor Code 203. The restaurant appealed and proceeded to a trial de novo before a Los Angeles County Superior Court jury.

The jury awarded $87,373.01 in unpaid wages, leaving the judge to determine additional damages, interest and attorney fees. After the jury’s verdict, Judge Mary Thornton House awarded $27,827.16 in prejudgment interest, $50,278.68 in liquidated damages and post judgment interest and $80,986.00 in attorney’s fees and costs for a total award of $246,464.85. Csardas, Inc. and its CEO Julius Jancso were both found liable for all awards.

The University of Pittsburgh Law School is hosts a conference next Friday, February 20, 2009 entitled The Gender Wage Gap: Strategies for the Future. The conference agenda addresses the following:

Why do women still earn so much less than men?  Why is the gender wage gap significantly worse in Pittsburgh and Southwestern Pennsylvania?  What new legal and policy strategies might help to address these persistent inequalities?  Nationally recognized scholars in law, economics, and public policy will address these questions, with responses by state and local political and nonprofit leaders and by a panel of prominent women graduates of the University of Pittsburgh College of General Studies.

With the enactment of the Lilly Ledbetter Fair Pay Act of 2009, the topic is timely, so if you need to get back up to speed on equal pay issues, or you've just been looking for an excuse to take a tax-deductible trip to Pittsburgh in the middle of winter, check it out.

If you've ever wondered who answers to whom in the Department of Industrial Relations, here is a current organizational chart. A lot of people think that the Labor Commissioner answers directly to the Governor. In reality, there are three bureaucrats between the Labor Commissioner and the Governor.

Since the passage of AB 1688 in 2003, California has required registration for all carwash and polishing businesses (the Carwash Worker Law, Labor Code §§ 2050-2067). The law is intended to protect employees in the car washing and polishing industry from under-the-table cash payrolls, child labor violations and a lack of workers’ compensation insurance. There were 845 licensed carwashes as of November 2008. California Labor Commissioner Angela Bradstreet recently filed an action in San Diego County Superior Court to shut down a San Diego carwash for failing to register with the Labor Commissioner’s Office as required under California Labor Code § 2050. In February 2007 and March 2008, Choufa Holdings, Inc. dba Action Car Wash was found operating and employing workers without properly registering with the Labor Commissioner’s Office. Penalties were levied and a judgment, still unsatisfied, was entered.

A similar lawsuit was filed in March 2008 against Scrub Boys, a Sacramento carwash. As a result of that lawsuit, Scrub Boys registered and paid $10,000 in fines.

The DLSE has filed a lawsuit in San Diego County Superior Court seeking nearly $250,000 in unpaid wages on behalf of a group of workers for Einstein Industries Inc., a San Diego online health care and legal marketing company. The complaint alleges that from August through November 2007, Einstein Industries Inc. failed to meet their obligation to timely pay wages to their employees, instead paying employees anywhere from one day to several weeks late. The company allegedly resumed this unlawful practice resumed in July 2008 and has continued ever since.

Perhaps the firm can now become a client of one of its clients.

State investigators from the Economic and Employment Enforcement Coalition recently visited 21 garment industry businesses in Los Angeles County and cited 14 of them for various labor laws, including failure to maintain workers’ compensation insurance, failure to provide itemized deduction statements to employees, failure to pay the minimum wage and failure to pay overtime. The citations claimed more than $183,600 in penalties.

There will be a full day Wage & Hour Seminar presented by the U.S. Department of Labor in two weeks, sponsored by Workforce Development and Continuing Education The University of Akron. The good news: It's cheap - $35. The bad news: It's in Akron, Ohio. But surely some of you are looking for an excuse to take a tax-deductible trip to Ohio in February, right?

When: February 20, 2009, 8:30 a.m. to 3:30 p.m.
Where: Student Union, Room 312, University of Akron, Akron, OH 44325-4104.

To register, download this form and send it in.

For more information, check out: http://www.uakron.edu/ce/docs/SP09-DOLbrochureUAandJobCenter.pdf

Here is the text of the Lilly Ledbetter Fair Pay Act of 2009:

Here is the case that prompted Congress to enact the The Lilly Ledbetter Fair Pay Act of 2009: Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. 618.

During most of the time that petitioner Ledbetter was employed by respondent Goodyear, salaried employees at the plant where she worked were given or denied raises based on performance evaluations. Ledbetter submitted a questionnaire to the Equal EmploymentOpportunity Commission (EEOC) in March 1998 and a formal EEOC charge in July 1998. After her November 1998 retirement, she filed suit, asserting, among other things, a sex discrimination claim under Title VII of the Civil Rights Act of 1964. The District Court allowed her Title VII pay discrimination claim to proceed to trial. There, Ledbetter alleged that several supervisors had in the past given her poor evaluations because of her sex; that as a result, her pay had not increased as much as it would have if she had been evaluated fairly; that those past pay decisions affected the amount of her pay throughout her employment; and that by the end of her employment, she was earning significantly less than her male colleagues. Goodyear maintained that the evaluations had been nondiscriminatory, but the jury found for Ledbetter, awarding backpay and damages. On appeal, Goodyear contended that the pay discrimination claim was time barred with regard to all pay decisions made before September 26,1997—180 days before Ledbetter filed her EEOC questionnaire—and that no discriminatory act relating to her pay occurred after that date. The Eleventh Circuit reversed, holding that a Title VII pay discrimination claim cannot be based on allegedly discriminatory events that occurred before the last pay decision that affected the employee’s pay during the EEOC charging period, and concluding that there was insufficient evidence to prove that Goodyear had acted with discriminatory intent in making the only two pay decisions during that period, denials of raises in 1997 and 1998.

Held: Because the later effects of past discrimination do not restart the clock for filing an EEOC charge, Ledbetter’s claim is untimely.

(a) An individual wishing to bring a Title VII lawsuit must first file an EEOC charge within, as relevant here, 180 days “after the alleged unlawful employment practice occurred.” 42 U. S. C. §2000e–2(a)(1). In addressing the issue of an EEOC charge’s timeliness, this Court has stressed the need to identify with care the specific employmentpractice at issue. Ledbetter’s arguments—that the paychecks that she received during the charging period and the 1998 raise denial each violated Title VII and triggered a new EEOC charging period—fail because they would require the Court in effect to jettison the defining element of the disparate treatment claim on which her Title VII recovery was based, discriminatory intent. United Air Lines, Inc. v. Evans, 431 U. S. 553, Delaware State College v. Ricks, 449 U. S. 250, Lorance v. AT&T Technologies, Inc., 490 U. S. 900, and National Railroad Passenger Corporation v. Morgan, 536 U. S. 101, clearly instruct that the EEOC charging period is triggered when a discrete unlawful practice takes place. A new violation does not occur, and a new charging period does not commence, upon the occurrence of subsequent nondiscriminatory acts that entail adverse effects resulting from the past discrimination. But if an employer engages in a series of separately actionable intentionally discriminatory acts, then a fresh violation takes place when each act is committed. Ledbetter makes no claim that intentionally discriminatory conduct occurred during the charging period or that discriminatory decisions occurring before that period were not communicated to her. She argues simply that Goodyear’s nondiscriminatory conduct during the charging period gave present effect to discriminatory conduct outside of that period. But current effects alone cannot breathe life into prior, uncharged discrimination. Ledbetter should have filed an EEOC charge within 180 days after each allegedly discriminatory employment decision was made and communicated to her. Her attempt to shift forward the intent associated with prior discriminatory acts to the 1998 pay decision is unsound, for it would shift intent away from the act that consummated the discriminatory employment practice to a lateract not performed with bias or discriminatory motive, imposing liability in the absence of the requisite intent. Her argument would also distort Title VII’s “integrated, multistep enforcement procedure.” Occidental Life Ins. Co. of Cal. v. EEOC, 432 U. S. 355, 359. The short EEOC filing deadline reflects Congress’ strong preference for the prompt resolution of employment discrimination allegations through voluntary conciliation and cooperation. Id., at 367–368. Nothing in Title VII supports treating the intent element of Ledbetter’s disparate-treatment claim any differently from the employment practice element of the claim.

(b) Bazemore v. Friday, 478 U. S. 385 (per curiam), which concerned a disparate-treatment pay claim, is entirely consistent with Evans, Ricks, Lorance, and Morgan. Bazemore’s rule is that an employer violates Title VII and triggers a new EEOC charging period whenever the employer issues paychecks using a discriminatory pay structure. It is not, as Ledbetter contends, a “paycheck accrual rule” under which each paycheck, even if not accompanied by discriminatory intent, triggers a new EEOC charging period during which the complainant may properly challenge any prior discriminatory conduct that impacted that paycheck’s amount, no matter how long ago the discrimination occurred. Because Ledbetter has not adduced evidence that Goodyear initially adopted its performance-based pay system in order to discriminate based on sex or that it later applied this system to her within the charging period with discriminatory animus, Bazemore is of no help to her.

(c) Ledbetter’s “paycheck accrual rule” is also not supported by either analogies to the statutory regimes of the Equal Pay Act of 1963,the Fair Labor Standards Act of 1938, or the National Labor Rela-tions Act, or policy arguments for giving special treatment to payclaims.

421 F. 3d 1169, affirmed

The case is one of the few Supreme Court cases with an extensive wikipedia page. The full opinion is 47 pages long: http://www.supremecourtus.gov/opinions/06pdf/05-1074.pdf

We know of several judges who are encouraging parties to delay briefing schedules on class certifications pending the outcome of the Supreme Court's decision in Brinker v. Superior Court. The Court of Appeal has granted a request to stay the proceedings in Sepulveda v. Wal-Mart. Do any readers know of formal motions that have been brought in Superior Court to impose a stay pending the decision in Brinker v. Superior Court? If you do, leave a comment or send us an email.

In a recent 5th Circuit decision, the Court of Appeal reversed the dismissal of a labor law class action that was filed within the limitations period, as extended by a tolling period that continued throughout the entire proceedings, including appeal, of a prior, certified, class action. The opinion contains a good explanation of the development of the law regarding tolling while a class action in pending. In Taylor v. United Parcel Service, Inc. (9th Cir. 2008) __ F.3d __, 2008 WL 5401487, the plaintiff, a member of a certified labor law class that had been dismissed filed a new putative class action during the period in which the prior class action was on appeal. The District Court dismissed the new class action, holding that the claims were barred by various statutes of limitations.

Existing Supreme Court precedent holds that members of a certified class are to be treated essentially as named plaintiffs—and are bound by the resulting judgment—when they are adequately represented by the class representative and the other requirements of FRCP 23 are met. Matsushita Elec. Indus. Co. v. Epstein (1996) 516 U.S. 367, 395. The purpose of Rule 23 would be subverted by requiring a class member who learns of a pending suit involving a class of which he is a part to monitor that litigation to make certain that his interests are being protected. That responsibility does not end at the district court. "It is axiomatic that an appeal is a significant element in the judicial process.”

This rule does not apply equally to members of a putative class that has not been certified. See American Pipe & Construction Co. v. Utah (1974) 414 U.S. 538; Crown, Cork & Seal Co. v. Parker (1983) 462 U.S. 345. However, in Taylor, because the District Court certified the prior class action, the 5th Circuit held that American Pipe and Crown, Cork & Seal did not apply.

Because Taylor remained a member of a certified class while Morgan was on appeal, he was entitled to assume that the class representatives continued to represent him and protect his interests in appealing the order dismissing the class claims on the merits. This is consistent with the general rule that all members of a certified class enjoy the same rights as individually named plaintiffs in the suit. Thus, we conclude that Taylor’s claims were tolled until August 30, 2004, when the Eighth Circuit affirmed the district court’s order in Morgan. This action by the Court of Appeals was the final adverse determination of the claims of the certified class of which Taylor was a member.

As a result, the applicable statutes of limitation did not expire, the judgment of dismissal was reversed, and the case remanded to the District Court. You can download a copy of the Taylor decision in PDF at this link.

An interesting certification order was entered last year in a wage case entitled Otsuka v. Polo Ralph Lauren Corp. (N.D. Cal. 2008) 251 F.R.D. 439. For those of you who like to collect such orders, here is a link to the order by District Court Judge Susan Illston, who held that: (1) numerosity requirement was satisfied; (2) commonality requirement was satisfied with respect to main class; (3) commonality requirement was satisfied with respect to subclass that consisted of former sales associates who had been misclassified as exempt from premium overtime compensation; (4) commonality requirement was satisfied with respect to arrears subclass; (5) named plaintiffs who had been forced or coerced to skip rest breaks as part of culture established by employer that discouraged taking of rest breaks were typical of main class; (6) employer's payment of overtime to named plaintiffs did not prevent claims of those plaintiffs from being typical of absent class members; (7) disagreements that had arisen in past between class counsel and named plaintiff did not adversely affect adequacy of representation requirement; and (8) common questions predominated over individual questions.

Have any of you been curious about what happened on remand in On-Line Power, Inc. v. Mazur (2007) 149 Cal.App.4th 1079? That was a case in which an employee, as a cross-complainant, sued his former employer for unpaid wages. The action was settled pursuant to a statutory offer of compromise under Code of Civil Procedure § 998, and the employee moved for attorney fees. The Superior Court denied the motion for attorney fees, and the employee appealed.

Cross-complainant David Mazur appeals from an order denying his motion for attorney’s fees after settling his action for unpaid wages pursuant to a statutory offer of compromise. (Code Civ. Proc., § 998.) Because the trial court erred in ruling that the Labor Code provisions ensuring an employee’s right to payment of wages did not apply to salaried corporate executives, we reverse and remand for further proceedings.

So the employee is entitled to seek attorney fees after settling his action pursuant to statutory offer of compromise, and the Labor Code provisions ensuring an employee's right to payment of wages applied to employee, as a salaried corporate executive, not just to hourly workers. Great. But what happened on remand?

Nothing.

A month later, On-Line Power, Inc. filed for bankruptcy and nothing more happened in the case.

Case Number: BC294513
ONLINE POWER INC VS MILTON HANSON

Filing Date: 04/23/2003
Case Type: Other Employment Complaint (General Jurisdiction)
Status: Other Judgment 10/20/2005

Future Hearings
None

06/26/2007 Remittitur (REVERSED AND REMANDED REMITTITUR ISSUED ON 6-21-07 S/T D-30 6-29-07 )
Filed by Clerk

05/21/2007 Notice of Bankruptcy Stay
Filed by Atty for Defendant and Cross-Compl

It would have been interesting, perhaps.

If you read newspapers or online new media, listen to talk radio, or even just follow our twitter account, you already know that on Thursday, President Obama signed his first bill into law, The Lilly Ledbetter Fair Pay Act of 2009, legislation he said would “send a clear message that making our economy work means making sure it works for everybody.” We have a lot to say about the Act, more than we can find the time to do all at once, especially given some events that hit us this week. So this will be the first part in a daily series of posts about the Act and about equal pay claims. It is exciting, because for the first time since August 2007, women who have been discriminated against by being subjected to lower pay than their male counterparts will have redress. For the first time since August 2007, lawyers, such as ourselves, find themselves able to take on such claims.

President Obama welcomed Lilly Ledbetter to the White House for the signing, shown in this NY Times Photograph. Ms. Ledbetter, whose case was thrown out by the U.S. Supreme Court in 2007, is standing immediately behind the President's right shoulder.

Stephen Crowley/The New York Times

You can find the text of the Act (S. 181) at a link here; you can read President Obama's remarks here; you read the White House's blog entry on the Act; and you can even watch the press conference here on video.

We'll tell a little more about substance of the new law tomorrow.

Because the Railway Labor Act is subject to ordinary rather than complete pre-emption, a wage-and-hour claim brought by employees of Alaska Airlines under state law does not arise under federal law and is not removable. Moore-Thomas v. Alaska Airlines (9th Cir. 2009) __ F.3d __. 

In March 2006, several Alaska Airlines employees filed a class-action complaint in Oregon state court. They alleged that the airline willfully failed to pay them all wages due on termination of their employment, in violation of Oregon Revised Statutes § 652.140. The plaintiffs sought statutory penalties, costs and disbursements, pre- and post-judgment interest, and reasonable attorneys’ fees on behalf of a putative class.

Alaska removed the action to the District Court and brought a Rule 12(b)(1) motion to dismiss on the ground that the Railway Labor Act completely pre-empts the employees' state law claim, and that they had not complied with the RLA’s mandatory arbitration provisions. The district court ruled that the RLA completely pre-empted the claims because the claims required interpretation of the CBA. Accordingly, the District Court concluded that removal was proper and remand improper, and then granted Alaska’s motion to dismiss for lack of subject matter jurisdiction in light of the parties’ failure to arbitrate the claim pursuant to the RLA.

On appeal, the 9th Circuit held that, because the claims under state law were not pre-empted, the District Court erred in denying the plaintiffs' motion to remand and erred in granting the defendant's motion to dismiss. The judgment is reversed and remanded with instructions to vacate the judgment and remand the action to state court for lack of subject matter jurisdiction.

A public school district cannot deduct vacation leave and differential leave concurrently. California School Employees Association v. Colton Joint Unified School District (2009) __ Cal.App.4th __.  

A classified school employee is entitled to receive several kinds of compensation and leave when injured or ill: workers’ compensation benefits (Labor Code § 4653); 60 days of industrial and illness leave (Labor Code § 45192); sick leave (Labor Code § 45191); vacation leave (Labor Code § 45197); and a form of leave called “differential leave.” (Labor Code § 45196.) Under the so-called 100-day rule of section 45196, in addition to other forms of leave, an employee is entitled to receive differential leave at half pay for up to 100 days. The California School Employees Association (CSEA) and Haynes, petitioners and respondents on appeal (petitioners), contend that the Colton Joint Unified School District and the school board improperly deducted both vacation leave and differential leave under section 45196 concurrently. The Court of Appeal agreed, holding that the various periods of leave do not run concurrently.

You can download the full text of California School Employees Association v. Colton Joint Unified School District here in PDF or Word format.

Eleven states increased their minimum wage effective January 1, 2009:

Arizona – $7.25
Colorado – $7.28
Connecticut – $8.00
Florida – $7.21
Missouri – $7.05
Montana – $6.90
New Mexico – $7.50
Ohio – $7.30
Oregon – $8.40
Vermont – $8.06
Washington – $8.55