Wage Law

My political post of the month: Props 45 and 46 are laws written to protect you and I - the consumer, the common person.. They are opposed by large profitable corporate interests. They are deceiving you into thinking these laws are about something that they are not and if you only watch the TV ads, you're going to vote against these propositions even if you are actually in favor of their goals.

This article explains it brilliantly.

Following a January DC Circuit opinion that found the Obama's administration's recess appointments to the NLRB unconstitutional, GOP legislators have put forth a bill that proposes to prohibit the NLRB and the Consumer Financial Protection Bureau from enforcing or implementing decisions and regulations without a confirmed board or director.

According to this Reuters story, the bill, sponsored by senators Mike Johanns, Lamar Alexander and John Cornyn, "has little chance of becoming law", but "adds to pressure on the Obama administration to reach a compromise to keep both agencies operating and determine whether it will appeal the ruling."

"Any decisions or regulations made by the people who have no right to be there are invalid," Johanns, of Nebraska, said in a statement.

Among the decisions called into question is D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 6, 2012), in which the NLRB held that mandatory arbitration agreements requiring all employment disputes to be resolved through individual arbitrations violate Section 8(a)(1) of the National Labor Relations Act because they impair employees' ability to engage in concerted action for mutual aid or protection. Several district court rulings, including some in California, have rejected the NLRB decision in D.R. Horton as inconsistent with the Supreme Court ruling in AT&T Mobility v. Concepcion (2011) 563 U.S. ___, 131 S. Ct. 1740, which held that the FAA required enforcement of an arbitration agreement that included a class action waiver.

Assembly Bill 325 passed the assembly on Thursday by a 48-26 vote. No Republicans voted in favor of the bill.

Among the ideas in Jerry Brown's new budget proposal: eliminating the Fair Employment and Housing Commission. This idea would not eliminate the Department of Fair Employment and Housing.

• Eliminate the Fair Employment and Housing Commission—The Administration will consult with stakeholders and evaluate options to phase out the stand~alone commission that handles appeals of employment and housing discrimination cases by January 1, 2012. Adjudication of employment and housing discrimination cases will be appealed to the Director of the Department of Fair Employment and Housing effectively eliminating the stand-alone Commission and consolidating workload. This results in a decrease of $428,000 all funds ($344,000 General Fund) and 1.4 personnel years in 2011-12.

Arnold Schwarzenegger proposed the same thing in 2007.

There were a lot of wage and hour bills that ended with a veto from the desk of Arnold Schwarzenegger in the last few years. Already, dozens of those vetoed bills are being whisked through the Legislature in the expectation that Jerry Brown will sign them.

http://www.latimes.com/news/local/la-me-legislature-20110405,0,6782377.story

California Governor Arnold Schwarzenegger has vetoed AB 2773, which would have provided for prevailing plaintiffs to recover attorney's fees and costs even if they recovered less than the jurisdiction limit of the court in which their case was filed.

Existing law provides that a prevailing party is entitled as a matter of right to recover costs in any action or proceeding, and specifies those items allowable as costs. It also provides that costs, or any portion of claimed costs, shall be as determined by the court, in its discretion, in a case other than a limited civil case, if the prevailing party recovers a judgment that could have been rendered in a limited civil case. In other words, if the award does not exceed $25,000. AB 2773 would exempt this limitation for plaintiffs prevailing in actions brought under a specified provision of the Fair Employment and Housing Act alleging an unlawful practice.

The Governor's veto message reads:

To the Members of the California State Assembly:

I am returning Assembly Bill 2773 without my signature.

This measure would require an award of attorney’s fees in all fair employment and housing cases even when nominal damages are awarded and even if the case was improperly filed in a court of unlimited jurisdiction. While there may be instances when an award of attorneys fees may be proper, this measure removes all discretion from a judge and encourages frivolous lawsuits.

For this reason, I am unable to sign this bill..

These vetoes offer some insight as to why employment attorneys are not embracing Meg Whitman's candidacy.

California Governor Arnold Schwarzenegger has vetoed AB 2770, which would have created a pilot program to investigate employment and payment practices within the swimming pool and spa construction industry and develop and implement a set of criteria that, if met by an employer, would trigger a recommendation for an audit or investigation by the appropriate state tax authorities.

AB 2770 would, until January 1, 2017, establish a pilot program to investigate employment and payment practices within the swimming pool and spa construction industry. The bill would require the Employment Development Department, in consultation with the Franchise Tax Board, the Department of Justice, the Department of Insurance, the Labor and Workforce Development Agency, and industry representatives, to develop and implement a set of criteria that, if met by an employer, would trigger a recommendation for an audit or investigation by appropriate state tax authorities to determine if the employer is in violation of statutes relating to employee wages, hours, and working conditions. After July 1, 2011, it would require the Employment Development Department to take specified actions with respect to an employer when application of the set of criteria indicates that a violation of the statutes described above may have occurred. This bill also would state findings and declarations relating to the underground economy and the swimming pool and spa construction industry.

From our own experience, we can state with a high degree of confidence that contractors in the pool and spa industry are among the dirtiest of all businesses in the state. So dirty, in fact, that the legislature imposes stricter requirements upon them for their consumer contracts than any other class of contractor must meet, and the CSLB requires them to post larger license bonds that other classes of contractors. Nonetheless, the Governor didn't like the bill.

The Governor's veto message reads:

To the Members of the California State Assembly:

I am returning Assembly Bill 2770 without my signature.

This bill would 1) create a pilot program to investigate employment and payment practices within the swimming pool and spa construction industry; and, 2) require the Employment Development Department, in consultation with the Franchise Tax Board, the Department of Justice, the Department of Insurance, the Labor and Workforce Development Agency, and industry representatives, to develop and implement a set of criteria that, if met by an employer, would trigger a recommendation for an audit or investigation by the appropriate state tax authorities.

My Administration has been committed to vigorously enforcing the laws of this state and maximizing resources to combat the underground economy. As shown in creation of the Economic and Employment Enforcement Coalition, I support implementing targeted systems of coordination. However, as I have repeatedly indicated, legislating that coordination and the adoption of protocols or standards for that is unnecessary. If existing laws impeded this coordination, it would be appropriate to alter those. However, simply statutorily instructing the respective enforcement agencies to in essence work together does not assist them in a substantive and practical way. Moreover, I also note that this bill fails to prescribe what it is intended to achieve. Rather than creating a trigger for a tax audit when labor laws are found to have been violated as the bill intends, this bill instructs tax authorities to recommend and conduct audits or investigations to determine specifically whether labor laws, rather than tax laws, have been violated. Having tax authorities audit and investigate for potential labor law violations is inconsistent with their expertise, and instead is a function of the Division of Labor Standards Enforcement.

For these reasons, I am returning this bill without my signature.

This was one of the longest veto messages of the session.

California Governor Arnold Schwarzenegger has vetoed SB 903. Existing law provides that an action by the Division of Labor Standards Enforcement for collection of a statutory penalty or fee must be commenced within one year after the penalty or fee becomes final. SB 903 would have extended the period within which the division may commence a collection action, as defined, from one year to 3 years.

The Governor's veto message reads:

To the Members of the California State Senate:

I am returning Senate Bill 903 without my signature. This bill would extend the period of time within which the Division of Labor Standards Enforcement (DLSE) may commence a collection action for recovery of civil penalties from one year to three years from the date the penalty or fee became final.

While I appreciate the author’s attempts to ensure that DLSE is afforded enough time to initiate legal proceedings to collect penalties, there has been no clear demonstration that existing law presents any significant difficulty for the division.

Since an extension of the statute of limitations is unnecessary, I am returning this bill without my signature.

The bill would not have affected limitations periods for private actions to collect penalties.

California Governor Arnold Schwarzenegger has vetoed SB 1370, which was enacted in response to a 1999 federal court ruling (Lett v. Paymentech, Inc. (ND Cal 1999) 81 F.Supp.2d 992) that invalidated Labor Code § 2751. Section 2751 required employers with no permanent and fixed place of business in California, who entered into a contract of employment involving commissions as a method of payment for services rendered within California, to put the contract in writing and to set forth the method by which the commissions are required to be computed and paid. An out-of-state employer who did not comply with those requirements was liable to the employee in a civil action for triple damages. Employers with a permanent presence in California had no similar requirement.

To resolve the constitutionality problems as decided in Lett v. Paymentech, Inc., SB 1370 would have applied this requirement to all employers entering into a contract of employment involving commissions as a method of payment with an employee for labor performed in California, whether or not they maintained a place of business within the state.

The Governor's veto message reads:

To the Members of the California State Senate:

I am returning Senate Bill 1370 without my signature.

This bill would require that beginning in 2012, all employment contracts for services
rendered within California in which the method of payment involves commissions, be in
writing, and set forth the method by which the commissions shall be computed and paid.

This bill addresses a federal district court decision which held Labor Code section 2751
to be unconstitutional. However, there is no indication that there is a widespread problem
of wage disputes resulting from the lack of written commission-based employment
contracts in California. Therefore, the manner in which this bill remedies the existing
law’s constitutional infirmity creates potentially unnecessary new burdens on all
businesses employing persons in California. If it becomes apparent that there is an actual
problem arising from a lack of written commissioned-based contracts in California, then
it would be appropriate to revisit this issue. At this time, however, there is no clear need
for this bill.

For this reason, I am returning this bill without my signature.

We've had quite a few cases involving disputes over how commissions should be calculated. We expect that will continue.

Governor Arnold Schwarzenegger has appointed of Angela Bradstreet to a judgeship in the San Francisco County Superior Court. Bradstreet has served as state labor commissioner since 2007. She fills the vacancy created by the retirement of Judge David Ballati. Bradstreet is a Democrat. Source.

California Governor Arnold Schwarzenegger has vetoed AB 1881, which would have provided for double liquidated damages in civil actions on minimum wage violations

Under existing law, in a court action to recover wages unpaid in violation of the minimum wage, the court may award liquidated damages to an employee equal to the amount of wages unlawfully unpaid, plus interest. Essentially, the employer is liable merely for the wages it should have paid in the first place. AB 1881 would have increased the amount of liquidated damages that may be awarded to an employee to twice the amount of the wages unlawfully unpaid, plus interest.

The Governor's veto message reads:

To the Members of the California State Assembly:

I am returning Assembly Bill 1881 without my signature.

This bill would increase liquidated damages in civil actions for minimum wage violations to twice the wages unlawfully unpaid and interest thereon.

Existing law allows for liquidated damages equal to wages owed, in addition to interest, other penalties, and attorneys’ fees. There is no information to show that the existing enforcement and protections of California’s minimum wage laws are insufficient.

Consequently, I am returning this bill without my signature.

Mark Schacht, deputy director of the California Rural Legal Assistance Foundation, put it this way: "This Republican governor, like all recent Republican governors, has been content to leave state labor agencies underfunded and to aggressively restrict expansion of private remedies for enforcement." The vetoes essentially defend "the worst actors in the underground economy, and the governor and his allies at the Chamber of Commerce know it."

This veto is one of the last in a six year battle between Schwarzenegger and the legislature over minimum wage issues. The November election should have a significant effect upon the future of California's wage and hour laws. If we had to guess, we'd guess that Meg Whitman would have given this a veto, too, but that Jerry Brown would have signed it.

It apparently hasn't been filed yet, but the former housekeeper of Republican gubernatorial nominee Meg Whitman plans to file a civil action for unpaid wages and mileage reimbursement against Whitman. The housekeeper, Nicandra "Nicky" Diaz Santillan, has come forward and admitted that she is an illegal immigrant who deceived Whitman and the agency that placed her by using a fake social security card and a driver's license to prove her immigration status. Whitman fired her last year. Santillan says it was because Whitman planned to run for governor and didn't want the attention that comes from employing an illegal alien. Whitman says it's because Santillan came to her and asked for help obtaining legal status, at which point Whitman realized that she could no longer employ Santillan.

Santillan is represented by Gloria Allred, who issued a press release earlier this week that described Whitman's employment practices as "don't ask, don't tell" and said that "Don't ask don't tell may have become OMG, she will tell if I continue to employ her." That seems a bit counterintuitive to us. Ordinarily, we've found that employers are more like to worry about what people will tell if you fire them, not what they'll tell if you let them keep a job, especially when you are paying $23 an hour for a housekeeper.

Allred said Whitman caused the worker to "feel exploited, disrespected, humiliated, and emotionally and financially abused." As a result, she'll be suing for back wages for off-the-clock work, and unpaid mileage incurred while running errands. It wouldn't surprise us to learn that a wealthy executive had a personal assistant working off the clock and running errands without getting mileage, but that part of the case isn't getting much attention. All anyone cares about is that this woman wasn't in the U.S. legally. The hot topic is not whether Whitman cheated her employee out of wages or expense reimbursements. It's whether Whitman should have known Santillan was illegal after receiving a letter from the  U.S. Social Security Administration office, which advised Whitman that Santillan’s name did not match her Social Security number. Allred has already shared a blowup of the letter with the media. There are two versions of how the housekeeper got the letter. One version is that she pulled it from the trash and saved it for seven years. The other version is that Whitman's husband asked her to look into the problem. Curiously, the source for both versions is the housekeeper.

Perhaps it's because we don't love media attention as much as we love getting money for our exploited clients, but we can't help but think that this media circus benefits the lawyers and the Brown campaign more than it benefits the plaintiff. This is probably a case that could have been settled for a pretty big chunk of change, quietly and quickly, without exposing the plaintiff as a person who broke the law by falsifying documents and who is eligible for deportation. When we represented undocumented workers in wage claims, we make it a point to keep their immigration status as unknown as possible.

President Obama on Tuesday nominated federal appellate Judge Sonia Sotomayor, 54, to the U.S. Supreme Court. She would be the first Hispanic U.S. Supreme Court justice. Sotomayor was appointed to the bench George Bush, and nominated to the Circuit Court of Appeals by Bill Clinton. Some business interests are cheering the nomination. However, she is endorsed by quite a few labor organizations, including the AFL-CIO, the Coalition of Labor Union Women and NELA, which said this about her in its May 27, 2009 press release:

As a District and Circuit Judge, Judge Sotomayor has enforced the rights of all individuals to be free from discrimination in the workplace, to be paid wages that they have earned, to receive benefits to which they are entitled, and to be free from retaliation for standing up for their rights. Her record in employment cases is an example of the impartiality and open mind that she will bring to the Supreme Court.

Her most famous case is probably a 1995 District Court decision in which Sotomayor issued an injunction, favoring Major League Baseball players over owners, that led to the end of the 1994-95 MLB strike that had caused the cancellation of the 1994 World Series. Silverman v. Major League Baseball Player Relations Committee (S.D.N.Y. 1995) 880 F.Supp. 246. At the moment, the case that seems to be gathering the most attention is an unpublished 2008 per curiam opinion in Ricci v. DeStefano(SCOTUS Case Nos. 07-1428 & 08-328), in which she joined the majority in supporting the city of New Haven, Connecticut's decision to leave firefighter positions unfilled after testing that would have resulted in 17 white candidates and 1 Hispanic candidate being hired, to the exclusion of several black applicants. The U.S. Supreme Court granted certiorari and heard arguments in the case last month. She also ruled against the plaintiffs in Clarett v. National Football League(2nd Cir. 2004) 369 F.3d 124, the case that left Ohio State tailback Maurice Clarett and USC wide receiver Mike Williams ineligible to join the NFL after their sophomore seasons. Some other notable decisions:

• Singh v. City of New York (2nd Cir. 2001) 524 F.3d 361, upholding the denial of commuting time claims in an FLSA case;
• In re Visa Check (2nd Cir. 2001) 280 F.3d 124, upholding class certification in a consumer case against VISA and Mastercard;
• Raniola v. Bratton (2nd Cir. 2001) 243 F.3d 610, reversing the dismissal of a female police officer’s complaint for discrimination, retaliation, and hostile work environment;
• Moore v. Consolidated Edison Co. (2nd Cir. 2001) 409 F.3d 506, upholding the denial of injunctive relief for an employee claiming wrongful termination;
• Washington v. County of Rockland (2nd Cir. 2001) 373 F.3d 310, upholding summary judgment in a race discrimination case;
• Williams v. R.H. Donnelley Corp. (2nd Cir. 2004) 368 F.3d 123, upholding summary judgment in an employment discrimination case;
• Parker v. Columbia Pictures Industries (2nd Cir. 2000) 204 F.3d 326, reversing an employer's summary judgment in an ADA case;
• Cruz v. Coach Stores (2nd Cir. 2000) 202 F.3d 560, reversing summary judgment for an employer on a harassment claim, but affirming it on discrimination and retaliation claims;
• White v. White Rose Food (2nd Cir. 2001) 237 F.3d 174, reversing a bench decision in favor of the employee in a § 301 case;
• Leventhal v. Knapek (2nd Cir. 2001) 266 F.3d 64, upholding summary judgment against an employee in a privacy case;
• Higgins v. Metro-North R.R. Co. (2nd Cir. 2003) 318 F.3d 422, concurring to uphold summary judgment for an employer in a FELA case;
• Norville v. Staten Island University Hospital (2nd Cir. 1999) 196 F.3d 89, affirming summary judgment for an employer on race and age discrimination claims, and reversing a jury verdict in favor of employer on an ADA claim.

For more information, check out this Jottings by an Employer's Lawyer blog post by Michael Fox, who has assembled a more inclusive list, including dissents and some of her District Court rulings from her six years on the bench in the Southern District of New York. The only one dealing with wage and hour issues was Realite v. Ark Restaurants (S.D. N.Y. 1998) 7 F.Supp.2d 303, 4 WH Cases 2d 1207 in which she granted conditional class certification and the sending of a class notice in an FLSA collective action.

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.

President Obama has designated Wilma Liebman as the next Chairperson of the National Labor Relations Board. First appointed by Bill Clinton, Liebman has served as a member of the NLRB since November 1997. After her first five-year term expired, she was reappointed by President Bush and confirmed by the Senate to a second and third term. Ms. Liebman is the former Deputy Director of the Federal Mediation and Conciliation Service. To view a sampling of testimony she has given concerning recent NLRB decisions, check out this link.You can read an article she wrote in March 2008 at this link.

By a vote of 61-36, the Senate has passed the Lilly Ledbetter Fair Pay Act (S. 181). As explained in a press release from the bill’s lead sponsor, Senator Barbara Mikulski (D-MD), the bill will “remedy the 2007 Ledbetter v. Goodyear Tire & Rubber Co. decision in which a divided Supreme Court held that workers must sue for pay discrimination within 180 days after the original pay-setting decision, no matter how long the unfair pay continues.” It amended Title VII of the Civil Rights Act of 1964 so that the statute of limitations runs from the date of the actual payment of a discriminatory wage, not just from the time of hiring. Thus, employees can seek a remedy based on each discriminating paycheck, not just during the first 180 days of pay discrimination.

All 36 nays were cast by Republicans. Five Republicans voted for the bill. The bill does not have to be returned to the House because the Senate approved the bill in the same form passed by the House. Here is the text of the bill:

Democratic Policy Committee Bill Summary

Republican Policy Committee Bill Summary

We expect President Obama to sign the bill promptly.

Speaking of better labor laws, here are the recent vote tallies for H.R. 11 (Ledbetter) and H.R. 12 (Paycheck Fairness). The votes were largely along party lines. To successfully filibuster these bills in the Senate, the GOP will actually need a higher percentage of votes in the Senate than it got in the House.

Arnold Schwarzenegger has vetoed the Democrats state budget for 2009. Although Schwarzenegger had insisted upon a "stimulus package" that would include a revision to state labor laws, including elimination of the 8-hour workday and loosening of the state's meal and rest period claims, the governor's press release made little mention of labor laws or wage and hour issues, except as they pertained to cutting hours of state workers to decrease government spending.

If you are the type who likes to sign electronic petitions, here's a link to one in support of the bill to change the Equal Pay Act in response to the Supreme Court holding in Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. 618, 127 S.Ct. 2162, 167 L.Ed.2d 982. The bill was defeated in the previous session by a Republican filibuster.

Employee overtime and breaks has somehow become a hot topic in the fight to balance California's budget. We aren't quite sure how cutting employee wages and breaks will put the state back in the black again, and we still haven't seen the specifics of how the Republicans want to gut the 8-hour workday and the right to take meal and rest periods, but Assembly minority leader Mike Villines has provided his list of wants to the Sacramento Bee. Reportedly, these points, along with some relaxation of certain other business regulations, easing of environmental restrictions, and tax credits, form the basis of the GOP's demand for compromise in exchange for their support of higher taxes to solve the current budget crisis in California:

• Employee Schedule Flexibility
• Expanding Health Care Options for Employees (Health savings accounts)
• Reducing Unwarranted Litigation
• Overtime for high way earners
• Meal and Rest clarification
• Eliminate "needs test" to allow more apprenticeships

We have a pretty good idea what he means by "flexibility" and by "clarification." What counts as "unwarranted litigation" is still a bit of a mystery. However, to state the obvious: our personal view is that if this is the price for high taxes, we'd rather just suffer along and keep the existing, lower taxes.

As the legislature mulls over proposals to weaken the meal and rest period statutes and regulations, here's a link to the report of the Public Forums on Meal and Rest Breaks by State Labor Commissioner Angela Bradstreet, as well as a link to the Summary of Comments and a link to the transcripts.

The California legislature has convened a special session to consider some of the proposals governor Arnold Schwarzenegger made in November. A copy of the governor's proclamation regarding the special session can be seen at this link.

Among the proposals on the table:

Broaden Overtime Exemptions:

Exempt employees in executive, sales, administrative, and professional jobs who earn more than $100,000 annually from overtime pay.

Eliminate Eight Hour Work Days:

Allow employees to work flexible hours in excess of 8 per day, i.e., 10/40 work weeks without overtime.

Weaken Meal And Rest Period Laws:

Relax existing law regarding meal and rest periods to provide employers and employees with a clear understanding of meal breaks and offering flexibility to both businesses and workers.

We haven't been able to find yet exactly what meal and rest period proposals are on the table, but we have a list of meal and rest period bills that were vetoed or stalled in 2008:

AB 124 - Price - Meal and rest periods (Vetoed)

This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to pool lifeguards and stage assistants who employed in the public sector. The bill specified that pool lifeguards and stage assistants employed by a city, county, or special district, shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the public sector employer failed to provide a meal or rest period, the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation.  In addition, the bill specified that should these requirements be in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control.

AB 628 – Price - Meal and rest periods: pool lifeguards (Vetoed)

This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to pool lifeguards who are employed in the public sector. The bill specified that pool lifeguards employed by a city, county, or special district shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the employer failed to provide a meal or rest period, the employer would have to pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest period was not provided.  In addition, the bill specified that if these requirements were in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control. This bill was very similar to AB 124 (Price) from the previous year which addressed meal and rest period requirements for both pool lifeguards and stage assistants, however, this bill targets only pool lifeguards.

AB 1666 – Price - Meal and rest periods: stage assistants (Vetoed)

This bill would have extended protections afforded to employees covered by an order of the Industrial Welfare Commission to stage assistants who are employed in the public sector. The bill specified that stage assistants employed by a city, county, or special district shall not be required to work during any meal and rest period required for non-exempt employees under existing law.   The bill specified that if the employer failed to provide a meal or rest period, the employer would have to pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal or rest period was not provided.  In addition, the bill specified that if these requirements were in conflict with the provisions of a memorandum of understanding (MOU) reached between an employer and a recognized employee organization, the provisions of the MOU shall control. This bill was very similar to AB 124 (Price) from the previous year which addressed meal and rest period requirements for both pool lifeguards and stage assistants; however, this bill targets only stage assistants.

SB 342 – Torlakson - Employment: rest and meal periods. (Without further action)

This bill would have declared the intent of the legislature to clarify the law regarding on-duty meal periods for employees who work in the armored car industry. 

SB 1192 – Margett - Employment: meal and rest periods. (Without further action)

This bill would have allowed employees to take their first meal period before the conclusion of the 6th hour of work, decreased the statute of limitations on penalties for failing to provide a meal period, and defined the employer’s responsibility to provide a meal period as making a meal period available without interference.

SB 1539 – Calderon - Meal periods. (Without further action)
            
This bill would have required an employer to provide meal periods to employees covered by Industrial Welfare Commission Wage Orders before the conclusion of the sixth hour of work; defined an employer responsibility to provide a meal period as giving the employee an opportunity to take a meal period; would have exempted all employees covered by collective bargaining agreements from meal period requirements if the collective bargaining agreement covers meal periods, and would have codified and expanded on-duty meal period requirements.

AB 1034 – Keene - Employment: meal periods. (Without further action)

This was originally introduced as a bill related to water; later it was re-referred to this committee ( L. & I.R.) pursuant to Senate Rule 29.10.  Bill was held in committee pursuant to Senate Rule 29.10. This bill would have stipulated that meal periods must begin no later than the conclusion of an employee’s 6th hour of work, exempted employees covered by a collective bargaining agreement that dealt with meal periods, codified on-duty meal period regulations, and permitted the Department of Industrial Relations (DIR) to adopt regulations specifying the circumstances preventing employees from being relieved of all duty during a meal period.

The sessions, so far, have been unproductive.

We won't believe it until we see it, but this rumor keeps popping up:

Speculation is swirling that Schwarzenegger will be offered the role of energy czar in the incoming Obama administration. There has been Beltway chatter about the prospect ever since he was named as a contender for the job by the authoritative politico.com website.

If he did accept the post before the end of his two remaining years as governor, Democrat John Garamendi would be elevated from Lieutenant Governor to Governor. We don't believe it, but it wouldn't upset us in the least.

In a press conference today, Governor Schwarzenegger called for a temporary 1½ cent statewide sales tax increase, along with new taxes on liquor and oil as part of a plan to increase revenues $4.4 billion to make up part of an $11 billion budget deficit. At the same time, Schwarzenegger proposed $4.5 billion in spending cuts.

To save money on wages to state workers, the governor proposes to require them to take a one-day unpaid furlough each month. Columbus Day and Lincoln's Birthday would no longer be paid state holidays, and premium pay for working a holiday would be dropped. State agencies would be given the option of establishing 10-hour, four-day work weeks, and employees would no longer be allowed to count leave time as hours worked while computing overtime pay.

Oddly enough, part of this plan requires "[k]eeping high paying jobs in California by providing overtime exemptions and allowing more flexible work schedules to increase productivity; and " [c]larifying meal and rest periods to save businesses hundreds of millions of dollars in litigation costs and create less confusion from meal break violations which will mean fewer terminations."

The governor proposes to:

Provide Overtime Exemptions: Exempt employees in executive, sales, administrative, and professional jobs who earn more than $100,000 annually from overtime pay.
· Keep high-paying jobs from leaving the state. (For every 10,000 jobs paying more than $100,000 placed out of state, California’s economy misses out on $1 billion in employee spending.)
· Save approximately $90 million per year in employee classification costs.

Allow More Flexible Work Schedules: Allow employees to work more flexible hours upon request, such as 10 hour work days for a 40 hour work without being paid overtime.
· Reduce absenteeism and boost productivity, which save employers real dollars.
· Raise employee retention rates, which will reduce claims on the Unemployment Insurance trust fund.

Clarify Meal And Rest Period Laws: Clarify existing law regarding meal and rest periods to provide employers and employees with a clear understanding of meal breaks and offering flexibility to both businesses and workers.
· Will save businesses hundreds of millions of dollars in litigation costs.
· Less confusion means fewer terminations over meal break violations and a more welcoming work environment.

Full details of the governor's plan have not been released.

With the election of Barack Obama as the 44th President of the United States and with the Democrats gaining seats in the House and Senate, some changes in employment law, including wage and hour law, could be coming in the next four years. Some changes that are reasonably foreseeable:

• Minimum Wage. Though the federal minimum has been increased in recent years, and moves to $7.25 per hour in 2009, greater increases in the federal minimum wage could follow.
• Sick Leave. The Obama administration is expected to push for new legislation requiring employers to provide at least seven days of annual paid sick leave to employees.
• Family and Medical Leave. The Obama administration is expected to expand the FMLA to cover more workers, including those employed by smaller firms (20-25 employees), and to cover a broader range of causes for leave.
• Equal Pay. Though Senate Republicans filibustered the Lilly Ledbetter Fair Pay Act of 2007, intended to overturn the Ledbetter v. Goodyear Tire & Rubber Co. (2007) 550 U.S. ___, 127 S.Ct. 2162, 167 L.Ed.2d 982, decision, the Democrats will take up the cause again in 2009. The 5-4 opinion severely curtailed an employee's right to recover Title VII wage claims for violations of the Equal Pay Act. The losing plaintiff, Lilly Ledbetter, spoke at the Democratic National Convention.
• NLRB/NLRA: Union membership is below ten percent. That could change with the passage of the Employee Free Choice Act, the RESPECT Act, and the Public Safety Employer-Employee Cooperation Act. President Obama's appointees to the National Labor Relations Board are likely to be much more protective of unions and employees than the appointees of President Bush, who tended to favor management and employers.
• Executive compensation. Expect more executive compensation limitations, particularly in any future bailout legislation, including clawback provisions and bans prohibiting golden parachutes. Current restrictions are vague, prospective and limited in scope. Stronger regulations with more detailed limitations and a broader scope affecting existing contracts could pass.
• Arbitration. Expect to see a new effort to pass the Arbitration Fairness Act, an amendment to the Federal Arbitration Act in 1925, which would provide new procedures and limitations on pre-dispute mandatory arbitration clauses in consumer and employment contracts.
• ERISA. A key goal of the Obama administration will be the passage of a universal health care plan with guaranteed eligibility, comprehensive benefits, and affordable premiums and co-pays.
• Supreme Court appointments. Barack Obama mentioned Ruth Bader Ginsburg and Stephen Breyer as examples of the kind of justice he would look for to fill vacancies in the SCOTUS. In the next four year, John Paul Stevens, 88, and Ginsburg, 75, are thought to be likely to retire. David Souter, 69, has expressed some interest in leaving Washington and returning to his home state of New Hampshire. Justices Anthony Kennedy and Antonin Scalia are 72 years old.

If you see anything else on the horizon, leave a comment.

Purportedly to avoid a full-blown fiscal crisis in California, Governor Arnold Schwarzenegger has signed an executive order that cuts the wages of 200,000 state workers to $6.55 per hour. The order will remain effective until the state passes a new budget. California State Controller Controller John Chiang has declared that he will not implement Schwarzenegger's order, and several employee unions have threatened to file suit to invalidate the order. California's current minimum wage is $8.00 per hour. Under the order, state employees will be paid the lower federal minimum wage under the FLSA. The order also eliminates 2,2000 part-time and temporary state jobs.

Emergency workers and certain other employees are exempt. Workers will receive back pay once the state legislature passes a budget. In other words, the state won't actually save money, it is simply borrowing at the expense of the working class and using them as pawns to motivate the legislature to resolve its differences. The full text of the governer's order is as follows:

EXECUTIVE ORDER S-09-08

WHEREAS the constitutional deadline for enacting a state budget for Fiscal Year 2008-09 has passed without the enactment of a budget; and

WHEREAS in the absence of a budget, State government is constitutionally prohibited from making payments that are not compelled by either the State Constitution or federal law; and

WHEREAS until there is a state budget, the State has no authority to pay the following payments:  (1) Vendors and Contractors for goods and services chargeable to Fiscal Year 2008-09; (2) Payroll for legislative staff, appointees, and exempt employees; (3) Payroll for other state employees beyond that required by federal labor law; (4) Highway User Taxes that are apportioned to the state, cities and counties for highway and road improvement projects; (5) Cal Grants to students in higher education; (6) Transfers to the Trial Courts; (7) Transfers to University of California, California State University, and Community Colleges; (8) Transportation Revolving Fund disbursements; (9) Non-revenue limit school payments; and (10) Payments for non-federally mandated social services programs such as Community Care Licensing, Adult Protective Services, State Only Foster Care; State Only Adoptions Assistance, and Cash Assistance Program for Immigrants; and (11) tax relief payments to low income seniors and disabled persons; and

WHEREAS on May 1, 2003, the California Supreme Court, in White v. Davis, issued a decision that, in conjunction with other pre-existing court orders, clarified that during a period that there is no state budget in place, federal labor laws require the State to pay its nonexempt FLSA employees either federal minimum wage or, for those employees that work overtime, their full salaries plus overtime; and

WHEREAS it is not known when a budget will be adopted for Fiscal Year 2008-09; and

WHEREAS as a result of the late budget, there is a real and substantial risk that the State will have insufficient cash to pay for state expenditures; and

WHEREAS since June 2008, the unprecedented number and size of fires in California has created states of emergency that have required additional and substantial expenditures of cash to ensure that there are sufficient resources to effectively fight these fires and save lives and homes; and

WHEREAS it is critical that the State be able to meet any unforeseen emergency such as fire, flood or public health emergency and to continue to make timely payments on constitutionally and federally-mandated obligations and existing obligations to pay holders of state bonds; and

WHEREAS due to the impending cash crisis and budget delay, the State may be forced to consider a Revenue Anticipation Warrant (RAW) at an exorbitant cost to the State, including hundreds of millions of dollars in credit enhancements, in order to make sure there is sufficient cash to pay for state expenditures; and

WHEREAS after the late adoption of a budget, there will be additional cash demands because all of the deferred payments that were not permitted to be made during the budget impasse will become due and payable; and

WHEREAS the late budget has resulted in loss of savings to the State in the amount of $164 million for July, and failure to enact a budget in August will result in additional loss of savings in the amount of $323 million; and

WHEREAS as a result of the late budget, additional mitigation measures must be implemented to offset the loss of savings and to ensure that there is sufficient cash to make the State’s payments; and

WHEREAS the State employs nearly 22,000 retired annuitants, permanent intermittent employees, and seasonal employees and the State hires new employees at the rate of approximately 1,700 per month; and

WHEREAS except for services and functions of state government deemed critical by this Order, additional mitigation measures need to be taken to immediately reduce expenditures and preserve cash, including the following: (1) halting all hiring, transfers and promotions of employees, and contracting for individuals to perform services; (2) prohibition of overtime; (3) termination of the services of retired annuitants, permanent intermittent employees, seasonal employees, temporary help workers and, student assistants; and (4) suspension of personal services contracts.

NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, in accordance with the authority vested in me by the Constitution and the statutes of the State of California, do hereby issue the following orders to become effective immediately:

IT IS ORDERED that the services and functions of state government directly related to the preservation and protection of human life and safety, including but not limited to emergency and disaster response activities and the provision of 24-hour medical care, shall be deemed critical and exempt from this Order.

IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order, all State agencies and departments under my direct executive authority take immediate action effective July 31, 2008 to cease and desist hiring of employees (except in instances in which there is a bona fide offer and acceptance prior to the effective date of this Order), transferring employees between State agencies and departments, promoting employees, and contracting for individuals to perform services.

IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order and emergent situations to preserve and protect human life and safety, all State agencies and departments under my direct executive authority take immediate action to cease and desist authorization of all overtime for employees effective July 31, 2008.

IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order, all State agencies and departments under my direct executive authority take immediate action to terminate the services of the following five categories of employees and individuals effective July 31, 2008:  (1) Retired Annuitants; (2) Permanent Intermittent Employees; (3) Seasonal Employees; (4) Temporary Help Workers; and (5) Student Assistants.

IT IS FURTHER ORDERED that except for services and functions of state government deemed critical and exempt by this Order and except for services provided pursuant to multi-year contracts for Information Technology systems and services, all State agencies and departments under my direct executive authority take immediate action to suspend all personal services contracts effective July 31, 2008.

IT IS FURTHER ORDERED that all Agency Secretaries and Department Directors shall take immediate action to implement this Order, and any other action that will reduce state expenditures.

IT IS FURTHER ORDERED that the Director of the Department of Finance shall establish an exemption process that Agency Secretaries shall utilize to determine if an exemption is justified based on critical services and functions, which may include either cost-reducing or revenue-producing services and functions that will help ensure that there is sufficient cash for the State to make its payments.

IT IS FURTHER ORDERED that Agency Secretaries and Cabinet-level Directors shall report their exemptions to the Cabinet Secretary and the Director of the Department of Finance within 24 hours of approving an exemption.

IT IS FURTHER ORDERED that the Director of the Department of Finance and Director of the Department of Personnel Administration shall work with the State Controller to develop and implement the necessary mechanisms, including but not limited to pay letters and computer programs, to comply with the California Supreme Court’s White v. Davis opinion to pay federal minimum wage to those nonexempt FLSA employees who did not work any overtime.

IT IS FURTHER ORDERED that the necessary mechanisms to ensure compliance with the White v. Davis opinion must be in place to be effective for the August 2008 payroll.

IT IS HEREBY REQUESTED that during this budget impasse, the State Treasurer shall take all actions necessary to maintain the State’s ability to pay its bond obligations, including payment of principal and interest with funds in the State Treasury, and shall take all actions that are necessary to protect the State’s funds and investments.

IT IS FURTHER REQUESTED that other entities of State government not under my direct executive authority, including the California Public Utilities Commission, the University of California, the California State University, California Community Colleges, constitutional officers, the legislative branch (including the Legislative Counsel Bureau), and judicial branch, assist in the implementation of this Order and implement similar mitigation measures that will help to preserve the State’s cash supply during this budget impasse.

IT IS FURTHER ORDERED that this Order shall remain in effect until such time as both a Fiscal Year 2008-09 Budget is adopted and the Director of the Department of Finance confirms an adequate cash balance exists to meet the State’s fiscal obligations.

I FURTHER DIRECT that as soon as hereafter possible, this Order be filed in the Office of the Secretary of State and that widespread publicity and notice be given to this Order.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 31st day of July 2008.

ARNOLD SCHWARZENEGGER - Governor of California

DLSE quickly updated (pdf, doc) its Enforcement Policies and Interpretations Manual to reflect the decision in Brinker Restaurant Corp. v. Superior Court of San Diego County (Hohnbaum) (2008) ___ Cal.App.4th ___. The decision was just three days when the revisions went into effective. Opinion Letter 1999.02.16 has been withdrawn.

The DLSE is now taking comments. If you believe that a section of the Enforcement Policies and Interpretations Manual or an opinion letter needs to be reviewed to determine if it should go through the regulatory process pursuant to the Administrative Procedures Act, you can submit comments to [email protected]. Any inquiries should mention a specific manual section or opinion letter number and explain specific concerns. The Division of Labor Standards Enforcement - Comments mailbox account has been established solely to take comments on the enforcement manual and opinion letters. All comments will be read and considered, but no responses to questions or specific advice will be provided.

According to a news report in the Sacramento Bee, California Governor Arnold Schwarzenegger threatened to sign an executive order today cutting the wages of more than 200,000 state employees to the federal minimum wage of $6.55. The order would provide that the balance of their wages would be paid once the state budget, due July 1, 2008, is passed.

The announcement caused quite a stir. Petitions were circulated, protests were planned and state Controller John Chiang announced that he would ignore the governor's order. "He will pay state workers the salaries that they have earned, and that's full salary," said Deputy Controller Hallye Jordan.

In addition to cutting salaries, including union and other contractually specified salaries, the order would require state agencies to stop authorizing overtime for most employees, impose a hard hiring freeze except for state jobs directly related to the preservation and protection of human life and safety, and suspend work for all retired annuitants, permanent intermittent employees, seasonal employees, temporary help workers, student assistants and some contractors.

As his deadline approached, the governor postponed the issuance of the order until at least Thursday.

Predictably, the governor was pleased with the Brinker decision. He was so pleased that he issued a press release. It's very unusual for the governor to issue a press release discussing an opinion of the Court of Appeal, but then again, protecting employers from wage and hour cases is one of the governor's highest priorities. Of more interest to us is how the governor issuing such a press release further demonstrates the merit of a petition for review under CCRC Rule 8.500(b)(1):

(b)   Grounds for review The Supreme Court may order review of a Court of Appeal decision:

(1)   When necessary to secure uniformity of decision or to settle an important question of law;

Here's what the governor had to say:

Following the Fourth District Court of Appeal's decision in Brinker Restaurant Corporation v. Superior Court of San Diego, Governor Arnold Schwarzenegger issued the following statement:

"We are pleased that the California Court of Appeal issued today a decision squarely addressing many of the central issues in dispute concerning meal and rest periods. The confusing and conflicting interpretations of the meal and rest period requirements have harmed both employees and employers. Today's decision promotes the public interest by providing employers, employees, the courts and the labor commissioner the clarity and precedent needed to apply meal and rest period requirements consistently."

In today's decision, the court held that employers must make meal periods available to employees and cannot impede, discourage or dissuade employees from taking meal periods. However, once made available, the employer is not obligated to police the employee's use of that time by ensuring that the employee takes the meal period.

http://gov.ca.gov/press-release/10273/

Don't expect a worker-friendly environment at the California Labor Commissioner's office during the Arnold Schwarzenegger years. Shortly after the California Senate rejected his appointment as LWDA Deputy Secretary, Governor Schwarzenegger appointed him to a comparable position as deputy secretary general counsel for the LWDA. The position pays the same, and is nearly as influential, but does not require Senate confirmtion.

This is being received as good news by employers, but it is also good news, in a roundabout way, for all attorneys with a wage and hour practice. The Labor Commissioner's office will continue to be a place where employees cannot expect effective resolution of their wage and hour claims, leaving them with no good alternative to taking their claims to court.

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.

Robert Jones will not be confirmed as the Deputy Secretary for Policy and Enforcement in the Labor and Workforce Development Agency. Senate President pro Tem Don Perata announced yesterday that he will not bring the appointment back to the Rules Committee, having held two lengthy hearings on Jones' confirmation and having found Jones unsuitable. Here is the full text of Senator Perata's statement as stated in a press release issued Wednesday:

I do not intend to bring the appointment of Robert Jones back to the Rules Committee. He is the Deputy Secretary for Policy and Enforcement in the Labor and Workforce Development Agency.  We had two weeks of hearings on his appointment which resulted in dramatically different versions of events that occurred when he was Chief Counsel for the Division of Labor Standards and Enforcement in 2005-2006.

His job, among other things, is to advise the secretary of the agency on enforcement policy issues.  Yet, after only two months on the job, the ACLU had to remind him, in an exchange of letters, that a memorandum he authored and sent to the attorneys he oversees constituted "an overbroad prior restraint on speech". 

The Senate Rules Committee, with its appointing authority, does not hear many labor appointments because the Governor doesn't care enough about working people to the fill the jobs in the labor agency.

And on the rare occasion when the Governor does appoint someone to a position with broad oversight over labor policy, he chose someone who solves problems with a 2x4 rather than knowledge of the civil service system and the law.

Mr. Jones is either insensitive or unaware of the chilling effect he has on attorneys who are charged with enforcing the statutes and regulations protecting California's workforce. He sets the tone when it comes to protecting the rights of California's workers and the testimony before the Senate Rules committee shows that Mr. Jones is tone deaf. 

When Mr. Jones was asked during his confirmation hearing to reflect upon and reconsider the policy he had concocted and enforced – which was viewed by the ACLU as an infringement on the First Amendment rights of those he oversaw - Mr. Jones said he would do it all over again, given the opportunity.

I, for one, do not want to give him that opportunity.  His apparent disregard for the rights of the individuals he oversees and his philosophy of management by intimidation leave me no option but oppose his appointment.
 
Record of Gubernatorial Appointments to Key Positions Labor and Workforce Development Agency
Director of Department of Industrial Relations was vacant for three and a half years until John Duncan was appointed in August 2007. 

The labor commissioner job was vacant for 18 months until Angela Bradstreet was appointed in June 2007.  It was also vacant for the first year this Governor held office. 

The chief of the Occupational Safety and Health Division job was vacant for the entire time this Governor has been in office (since November 2003), nearly four years, until Len Welsh was appointed last October. 

Andrea Hoch left the job of director of the division of workers compensation in October 2005. This job was vacant for two years until Carrie Nevans was appointed in October 2007. 

There are five deputy directors for the Employment Development Department but only one is currently serving. 

The position of workers compensation court administrator was vacant for 18 months until it was filled in June 2005. 

According to a new study published by a professor at the University of Illinois Law Center, and discussed in the National Law Journal today, courts are more commonly vacating or partially vacating arbitration awards for employees, and rarely disturbing awards that favor employers.

"When courts vacate many awards that rule for employees, the individual must either return to a lengthy and costly 'do over' arbitration -- or worse, be stuck with a useless award, and no other recourse ... [Court review is becoming] "an insurance program that protects employers from costly awards."

Arbitration reform could be a significant issue in 2009 if the Democrats win the White House in November.

This is double-hearsay, but attorney H. Scott Leviant, who authors the legal blog The Complex Litigator, published a Forum piece in last week's Daily Journal, entitled "Cutting Class". We can't link to the article for non-subscribers, but there's a nice summary of the article over at the UCL Practitioner. The article explains why A.B. 1905, which would have allowed defendants to immediately appeal orders granting class certification, appropriately died in committee last month.

Public entities are permitted to enter into contingency-fee agreements with outside counsel. County of Santa Clara v. Superior Court (Atlantic Richfield Co.) (2008) __ Cal.App.4th __. A Santa Clara County Superior Court judge had previously ruled that such arrangements were "antithetical to the standard of neutrality that an attorney representing the government must meet when prosecuting a public nuisance abatement action." The decision was based upon a 1985 case, Clancy v. Superior Court (1985) 39 Cal.3d 740, in which the California Supreme Court called the contingent fee agreement between a city government and a private attorney in a lawsuit against an adult bookstore “inappropriate under the circumstances.”

Federal government agencies will continue to avoid such arrangements, under an executive order signed by President Bush barring the federal government from entering contingent-fee arrangements to compensate lawyers or witnesses. If you are interested in this kind of work, you can download the opinion here in pdf or word format.

Here in California, we don't have a Labor Commissioner known for protecting the rights of employees against business interests, but at least our Labor Commissioner isn't seen as a drunk who gets detained by the police and hauled away to a detox center ("an alternative to the county jail intended to give a person a chance to keep his or her record clean") after trying to steal a guitar.

Oklahoma's is, allegedly.

Senator Feinstein on the wonderful world of arbitration:

I value arbitration as an alternative to litigation. Earlier this year, I supported an arbitration bill, the "Fair Contracts for Growers Act," when it was considered by the Senate Judiciary Committee. That bill does not mandate arbitration, but allows it to be used to resolve livestock or poultry contract disputes only if both parties consent in writing after the dispute arises.

As we mentioned this morning, Governor Schwarzenegger vetoed just about everything the Chamber of Commerce didn't like. The Chamber didn't hate all of the wage & hour measures passed this year, however. Schwarzenegger signed two wage & hour measures, both of which benefit employers:

Senate Bill 812 (Correa): Pharmacist alternative workweeks.

Existing law generally requires premium overtime rates of pay for work in excess of 8 hours in a day and work in excess of 40 hours in a workweek with specified exceptions, including where the employer and employees have agreed to an alternative workweek pursuant to specified procedures. The Industrial Welfare Commission, pursuant to constitutionally authorized delegated powers from the Legislature, has established regulations, denominated wage orders, governing wages, hours, and working conditions in various industries. Pharmacists, depending on the nature of their work, may be regulated by Wage Order 7, relating to the mercantile industry, or Wage Order 4, relating to professional, technical, clerical, mechanical, and similar occupations, including employees in the health care industry. Although both wage orders permit the adoption of alternative workweek schedules by agreement for those employees performing work in those industries, Wage Order 7 requires that any such agreement provide not less than 2 consecutive days off within a workweek, whereas, Wage Order 4 has no such restriction.

This bill would provide that pharmacists engaged in the practice of pharmacy who are employed in the mercantile industry, pursuant to Wage Order 7, shall be permitted to adopt alternative workweek schedules allowed by Wage Order 4, including alternative workweeks that can be adopted by employees working in the health care industry.

Senate Bill 929 (Codgill): Computer programmer exemptions / Prevailing wage determinations.

Existing law provides that 8 hours of labor constitutes a day's work. Under existing law, any work in excess of 8 hours in one workday and any work in excess of 40 hours in any one workweek and the first 8 hours worked on the 7th day of work in any one workweek is required to be compensated at the rate of no less than 11/2 times the regular rate of pay for an employee. Existing law exempts a professional employee in the computer software field from this overtime compensation requirement if the employee is primarily engaged in work that is intellectual or creative, the employee's hourly rate of pay is not less than $41, and the employee meets other requirements. This bill would decrease the hourly rate of pay requirement for this exemption to not less than $36. Existing law generally requires contractors and subcontractors performing work on public works, as defined, costing over $1,000 to pay to their workers the general prevailing rate of per diem wages, including these wage rates for holiday and overtime work, in the locality in which the public work is performed. Existing law provides that per diem wages includes both hourly wage rates and employer payments for employee benefits, as specified. Existing law requires the Director of Industrial Relations to determine per diem wages by referencing collective bargaining agreements, wage rates for federal public works, and, in certain instances, data from the labor organizations and employers associations, as specified. If the director determines that the general prevailing rate of per diem wages is the rate established by a collective bargaining agreement, and that collective bargaining agreement contains definite and predetermined changes during its term that will affect the rate adopted by the director, existing law requires the director to incorporate those changes into his or her prevailing wage determination.

This bill would authorize contractors and subcontractors, whenever the director's prevailing wage determination contains a predetermined change but does not specify how the change will be allocated between hourly wages and employer payments for benefits, to allocate payments equal to that change to either hourly wages or benefits for a specified time period, as provided. This bill would also provide that, if the allocation of a predetermined change is subsequently altered by the parties pursuant to the collective bargaining agreement that was the basis of the prevailing wage determination, a contractor or subcontractor may allocate payments of not less than the amount of the definite and predetermined change in accordance with either the originally published allocation or the allocation as altered in the collective bargaining agreement.

That's your California wage and hour law legislative year-end in review.

Jon-Erik Storm asks, Why Does Everyone Diss the DLSE?

I was preparing to explore the theorizing that I and other bloggers did in the wake of Genrty that it would have implications for employment contracts in general, when I came across this footnote in the recent Murphy v. Check ‘N Go case. “Plaintiff requests judicial notice of information on the process for bringing claims before the Labor Commissioner, which is offered to show that this process ‘does not provide the same protections for the employee and is not an adequate substitute for a court proceeding. . . .’” (Slip. Op. at 9-10 n.1)
...

There are so many reasons: they are slow; they do not apply uniform standards; they are not taken seriously by defendants; they change policies depending upon the whim of the governor; they often don't follow the law; they lack the resources to effectively resolve large volumes of cases; they pass regulations without following appropriate protocols; they file amicus briefs against you even if they represented you when you won at trial.

Plus, they have the day off today, and we don't.

An article published in the Daily Journal this week reports that the ballot initiative sought by the Civil Justice Association of California (CJAC) to limit class-action lawsuits (the "California Class Action Lawsuit Fairness Act") has been withdrawn from the June 2008 ballot. John Sullivan, CJAC president, said that it did not appear that June was a good time to advance such a ballot measure, because of other measures on that ballot which are predicted to cause a high turnout from Democratic voters. The other potential ballot measures include one to change the state's electoral vote to proportional, rather than winner take all; a defense-of-marriage initiative; and a prisoner-rights statute.

The CJAC initiative was similar to failed Assembly Bill 1505, sponsored by Assemblywoman Nicole Parra. Fundraising efforts for the CJAC initiative were said to be doing poorly, but that claim was neither admitted nor denied by Sullivan. Sullivan also suggested that the measure might still be pursued in the November 2008 election.

Notwithstanding the withdrawal of the California Class Action Lawsuit Fairness Act measure, consumer and labor groups are proceeding with their four counter-initiatives, including one to toughen civil and criminal penalties against corporate executives who fail to report corporate wrongdoing; one to provide compensation for victims of corporate fraud and make certain executives liable for making victims whole; one to force publicly traded corporations to disclose executive compensation; and one to standardize by statute the procedures for filing and maintaining class-action lawsuits.

To counter a ballot initiative proposed by the CJAC, calling itself the "California Class Action Lawsuit Fairness Act", that would gut class action litigation in California, the Consumer Attorneys of California (CAOC) filed initiatives this month that would bring reform to corporate America by making large corporations and their CEOs accountable for their wrongdoing. A broad coalition is forming against the corporate class action killing initiative, including:

AARP Foundation Litigation, ACLU of Northern California, ACLU of San Diego and Imperial Counties, American Association for Justice, Asian Law Caucus, Asian Pacific American Legal Center, California Alliance for Retired Americans, California Employment Lawyers Association, California Foundation for Independent Living Centers, California Labor Federation, California Reinvestment Coalition, California Teamsters, Public Affairs Council, California Women's Law Center, Center for Justice and Democracy, Coalition of Disability Access Professionals, Consumer Action, Consumer Federation of California, Consumers for Auto Reliability and Safety, Designing Accessible Communities, Disability Rights Advocates, Disability Rights Education and Defense Fund, Equal Rights Advocates, Foundation for Taxpayer and Consumer Rights, Gray Panthers, Law Foundation of Silicon Valley, Lawyers' Committee for Civil Rights of the San Francisco Bay Area Legal Aid Society, Employment Law Center, Legal Services for Prisoners with Children Mexican, American Legal Defense and Educational Fund, National Center for Youth Law, National Consumer Law Center, National Immigration Law Center, National Senior Citizens Law Center, Privacy Rights Clearinghouse, Protection & Advocacy, Inc., Public Advocates, Public Counsel, Public Interest Law Project, Speak Out California, Strengthening Our Lives (LA County Federation), Teamsters Union Local No. 70 Utility, Consumers' Action Network, Western Center on Law & Poverty, Women's Employment Rights Clinic, and the Youth Law Center.

The CAOC has identified significant class actions against each one of the CJAC board members and are expanding their efforts to educate the public about each company's wrongdoing. For further information including press releases about CAOC's initiatives or CJAC's initiative and text of the measures, check out http://www.caoc.com/ClassActionInitiative.

CJAC and the Chamber of Commerce have turned Nicole Parra's unsuccessful class action bill (AB 1505) into a ballot initiative and have filed papers to get it on the June 2008 ballot. The changes included in this initiative would make it virtually impossible to get class actions certified in California. Here's a link to CAOC's website regarding the proposed initiative.

From the American Enterprise Institute for Public Policy Research:

If America is a “lawsuit hell,” then contingent-fee lawyers are often considered its devils. Contingent fees have been called unwarranted and the lawyers who accept them have been denounced as unethical and uncivilized. Furthermore, in the midst of increased filings and escalating awards, it is difficult not to notice that some plaintiffs’ lawyers have become very rich. As a result, tort reformers have called for limits on contingent fees and many states have obliged. But limits have been enacted without any evidence that contingent fees were either responsible for the liability crisis or that limiting them would produce benefits.

This study, one of the first empirical examinations of contingent-fee limits, finds that contingent fees benefit plaintiffs and do not cause higher awards. Furthermore, contingent-fee limits are unlikely to reduce lawyers’ income very much, since they will simply switch to hourly fees. Since hourly fee lawyers are willing to take more cases to court than contingent-fee lawyers, contingent-fee limits can increase the number of low-value “junk suits.”

Tort reform is an important goal, but limiting the contractual rights of plaintiffs and their lawyers is an unattractive and likely ineffective method of achieving that goal.

The study, entitled Two Cheers for Contingent Fees, can be downloaded at http://www.aei.org/docLib/20050817_book827text.pdf.

This is way off topic, so we'll throw it in for an out-of-the-ordinary weekend post.

Suppose an old man is trying to up to or walk down from a dais to the floor in an area of some facility like, say, the Yale Club. Suppose further that there is an arguably inadequate handrail, or even no handrail, and he stumbles and falls, injuring himself. What should he do? Let it go? Sue for negligence, seeking medical expenses only? Sue for medical expenses, income and reasonable compensation for pain and suffering? Or does he make a federal case out of it, literally, and seek not just medical expenses and general damages, but a million dollars in damages, plus a heaping dollop of punitive damages on top of it, plus attorney's fees and interest, even though state law doesn't permit fees and interest (and of course, a jury trial is a must). Which path is best? Which, if any, should the system permit? For two interesting and divergent viewpoints on this hypothetical, check with two prominent American judges: Robert Bork in 2002, and Robert Bork in 2007.

In 2002, in the Harvard Journal of Law & Public Policy, Judge Bork decried the harm that frivolous claims and excessive punitive damage awards brought to our justice system.

State tort law today is different in kind from the state tort law known to the generation of the Framers. The present tort system poses dangers to interstate commerce not unlike those faced under the Articles of Confederation. Even if Congress would not, in 1789, have had the power to displace state tort law, the nature of the problem has changed so dramatically as to bring the problem within the scope of the power granted to Congress. Accordingly, proposals, such as placing limits or caps on punitive damages, or eliminating joint or strict liability, which may once have been clearly understood as beyond Congress's power, may now be constitutionally appropriate.

In 2007, Judge Bork takes a slightly different approach, perhaps because he now is the plaintiff in our hypothetical. You can read the complaint, filed on his behalf by the law firm of Gibson, Dunn & Crutcher, LLP (which almost certainly would rather be defending this lawsuit, but for the prominence of the plaintiff), at this Wall Street Journal link. Bork now believes that the lack a handrail suitable for someone of his age and frailty is evidence of gross negligence, justifying a seven figure verdict that includes punitive damages to punish, deter and make an example of the Yale Club.

We aren't passing judgment on his claims. They may very well have merit (well, except for the fees and interest, which NY PI attorneys tell us he can't get). But we are struck by the irony. It reinforces our belief that most tort reformers are just lucky folks who have never needed the legal system to save them from injustice. Their secret message? "Do as I say, not as I will do when I need to."

Meanwhile, over at Overlawyered, Ted Frank has this to say:

I sympathize with Judge Bork's serious injuries, but it's beyond me what his lawyers are thinking in asking for punitive damages. And if any danger is open and obvious such that there is an assumption of the risk, surely the absence of stairs to reach a lectern on a dais is—especially if the dais is of the "unreasonable" height that the complaint alleges it to be.

Robert Bork is to tort reform what Ted Haggard is to family values. In a 1995 opinion piece in the Washington Times, Bork criticized the expensive, capricious and unpredictable justice system:

"Today's merchant enters the marketplace with trepidation -- anticipating from the civil justice system the treatment that his ancestors experienced with the Barbary pirates."

But now, he's one of the pirates. All he needed was a hand up to the ship. And at the time of the accident, all he needed was a hand up. According to the New York Times, he went on to deliver the speech after he had fallen. The subject is a popular one around the blogosphere.

• Bork: Tort Reform for Thee But Not for Me (Booman Tribune)
• Leading Conservative Activist Seeks Punitive Damages (American Constitution Society)
• The Urgent Need for Tort Reform (Grasping Reality With Both Hands)
• Lawsuit of the Day: Robert Bork Hearts Plaintiffs? (Above The Law)
• The Fall of Bork (Reason Magazine - Brian Doherty)
• Is Bork's Trip and Fall a Misstep? (New York Times Opinionater - Tobin Harshaw)
• Legal Funnies (Alas, A Blog)
• Advocate for tort reform sues for over $1M (Bring it on!)
• When Tort Reformers Slip And Fall (Mother Jones)

[We'd give credit to other bloggers for finding the quotes, but frankly, we saw so many of them writing about this subject that we can no longer recall where we saw any of it first.]

According to a press release from the law offices of Carroll, Burdick & McDonough, governor Schwarzenegger has appointed Angela Bradstreet, the managing partner of the that firm, as California's next Labor Commissioner. Her firm does a considerable about of union-side labor work, but she has primarily represented management. She frequently defended wage and hour claims for employers. Bradstreet is a former president of the Bar Association of San Francisco and a Democrat who worked on Senator Dianne Feinstein's campaign as co-chair, but also endorsed Schwarzenegger and publicly criticized Democratic gubernatorial candidate Phil Angelides. The appointment requires approval from the state senate.

The case of Corrales v. Dell, Labor Commissioner, will be argued in the Third District Court of Appeal on this morning at 9:30 a.m. The case involves a challenge by the California Labor Federation to DLSE precedent decisions and the DLSE policy of holding ODAs in abeyance and issuing one-year awards for rest and meal period claims. We are curious to find out how Murphy has affected the issues in that case.

Of interest to labor lawyers focusing in organization issues, the “Employee Free Choice Act (EFCA), which has strong bipartisan backing in Congress, would make it easier for workers to form a union. Under the current law, “even when a majority of workers ask for union representation, their employers can force them to undergo an election process” administered by the Bush administration’s “anti-worker” National Labor Relations Board. However, deep-pocketed corporate lobbying groups have joined together to defeat” the EFCA. Speaking before a business lobby group this week, Vice President Cheney announced that Bush will veto the EFCA legislation. Click the link on the hat tip at the bottom of this page to view the video.

The current union organization system is tilted against America’s workers. Each year, over 20,000 U.S. workers are illegally fired, demoted, laid off, suspended without pay, or denied work by their employers as a result of union activity. Under the Bush administration, American workers have seen union levels — and their wages — steadily drop:

– In Oct. 2006, Bush’s National Labor Relations Board (NLRB) — “easily the most anti-worker labor board in history” — issued a decision that will deny the right to organize to as many as 8 million workers in 200 occupations.

– In 2000, 13.5 percent of all wage and salary workers were unionized. In 2006, just 12 percent of workers were in unions.

– The portion of private sector workers covered by union protections has fallen steadily from 23.2 percent in 1979 to 8.5 percent in 2005.

– In 2004, 92 percent of employers forced workers to attend “mandatory captive audience meetings” where workers often had to “listen to hours of anti-union presentations by corporate representatives.”

– “The median hourly wage for American workers has declined 2 percent since 2003″ — after factoring in inflation — even though average worker productivity “has risen steadily over the same period.”

Unions ensure a better standard of living for working Americans. Workers represented by unions earn 28 percent more than nonunion workers and are 62 percent more likely to have medical insurance through their jobs. Contact your lawmakers and tell them to support the Employee Free Choice Act.

[hat tip: thinkprogress.org]

According to an Associated Press report we saw in the Washington Post today, among the first goals Nancy Pelosi will pursue as Speaker of the House is a raise in the minimum wage under the FLSA, from $5.15 to $7.25, "maybe in one step." We don't want to give away any trade secrets, but there are some cases that currently are not worth pursuing under the FLSA that would, at a $7.25 an hour minimum wage, finally make economic sense to pursue.

Governor Schwarzenegger traveled to a working-class neighborhood near USC on Tuesday to sign AB 1835, the bill to raise California's minimum wage to $8 an hour over the next two years. The governor called the California economy is "a raging, roaring success" and said he was signing the bill to give all Californians a chance "to share in this prosperity." The new law will result in a pay increase for 1.4 million Californians who earn the minimum wage.