Wage Law

Justice Alito's Final Words as a Circuit Judge

Though he was not championed as a pro-worker choice for the most recent vacancy on the U.S. Supreme Court, workers and their advocates can take some hope from the fact that Justice Alito's final decision as a Circuit Court Justice came in a reversal of a summary judgment for an employer in a retaliation and sex discrimination case. (Jensen v. Potter Case No. 04-0478, 3rd Cir. 1/31/06). The decision brought the 3rd Circuit into the majority view regarding liability for retaliatory harassment based on the actions of a coworkers. Justice Alito's last words before joining the SCOTUS:

As an abstract matter, retaliation against a person based on the person's complaint about sexual harassment is not necessarily discrimination based on the person's sex. If the individuals carrying out the harassment would have carried out a similar campaign regardless of the sex of the person making the complaint, the harassment, while actionable as illegal retaliation, would not also be actionable as discrimination based on sex.

In reality, however, when a woman who complains about sexual harassment is thereafter subjected to harassment based on that complaint, a claim that the harassment constituted sex discrimination (because a man who made such a complaint would not have been subjected to similar harassment) will almost always present a question that must be presented to the trier of fact.

In such a situation, the evidence will almost always be sufficient to give rise to a reasonable inference that the harassment would not have occurred if the person making the complaint were a man. The difficult task of determining whether to draw such an inference in a particular case is best left to trial.

We remain hopeful, particularly for that part of our practice which does not pertain to the wage and hour law, and we are especially hopeful that this holding bodes well for the employees in a pending Title VII case (White v. Burlington Northern & Santa Fe Railway Co. (6th Cir. 2004) 364 F.3d 789, that the SCOTUS agreed to review last year. The issue in White is the degree of injury an employer's conduct must inflict to constitute an "adverse employment action" in a retaliation case.

UBS Paying $89 Million to Settle Overtime Class-Action Suits

The $37 million Merrill Lynch settlement was just the tip of the iceberg. Earlier this month, financial services firm UBS AG agreed to pay up to $89 million to settle overtime wage disputes in a class-action lawsuit. The plaintiffs were employees, mostly financial advisors, who were improperly classified as exempt, made to work exhorbitant hours, and paid no overtime compensation. We are told that parties in several similar lawsuits are very close to announcing similar settlements.

Latest Meal and Rest Period Developments

Now that review has been granted in Murphy v. Kenneth Cole Productions, the two leading cases concerning meal and rest period pay are the National Steel and Shipbuilding Co. (it's a wage) and Mills (it's a penalty) cases. Our spies at Jackson Lewis, LLP tipped us off to a pending petition for depublication filed in National Steel and Shipbuilding Co. We would be surprised if a depublication order is granted, since we fully expect the employer to file a petition for review, and a grant-and-hold grant of review is what we anticipate in that case.

There is no petition yet pending in the Mills case.

Miles Locker DLSE Departure Is Final

We have learned that Miles Locker, former Chief Counsel of the Division of Labor Standards Enforcement (DLSE), who has been on paid leave since mid-2005, has been fired. At a Skelly hearing last Friday, before the chair of OSHAB, Candace Traeger, his prior discipline was upheld in a one-sentence decision. We have not heard any response from Locker or his attorney, Steven Zieff of Rudy, Exelrod & Zieff, but do not be surprised if a lawsuit is filed presently.

Locker was suspended after his attendance at a brown bag luncheon on lunch break rights on July 20, 2005, at a time when the current administration was trying to silence any pro-employee voices at the Department of Industrial Relations. There are ten charges on which the discipline was based, most of which relate to various aspects of the meal/rest break controversies of the past couple of years, including the Kenneth Cole case, the governor's "emergency" regulations, the Abeyance Policy and the Rupp Memo in the "underground regulations" controversy, Westside Concrete and finally, speaking in his personal capacity at the seminar. A number of worker advocates, including several we know, are mentioned in the Notice of Adverse Action as attorneys Locker allegedly "assisted" in litigation against the DLSE, DIR and/or LWDA or to whom Mr. Locker allegedly expressed views contrary to those of agency officials appointed by the new governor.

Boiled down to the purest truth of this action, the Schwarzenegger Administration is punishing Locker for having the audacity (or, as they would call it, the "disloyalty") to continue to try to enforce minimum labor standards for the protection of California workers over the objections of well-funded and generous interest groups such as the California Restaurant Association and the Chamber of Commerce. After sixteen years of of dedicated service as a senior DLSE attorney and countless contributions to California wage and hour law, protecting California workers from employers who refuse to obey the rules, Locker is out.

With Locker gone, Robert Jones is the current Chief Counsel. He also serves as acting Labor Commissioner. A current full organizational chart of the California Labor and Workforce Development Agency, of which the DLSE is a part, can be viewed here.

Review Granted in Murphy v. Kenneth Cole Productions

The California Supreme Court wasted little time granting review of the controversial opinion in Murphy v. Kenneth Cole Productions, Inc. calling meal and rest period pay a penalty rather than a wage. The court's ruling was as follows:

Request for judicial notice granted. Petition for Review GRANTED. The parties are directed to brief and argue the following issues:

(1) Is a claim under Labor Code section 226.7 for the required payment of "one additional hour of pay at the employee's regular rate of compensation" for each day that an employer fails to provide mandatory meal or rest periods to an employee governed by the three-year statute of limitations for a claim for compensation (Code Civ. Proc., § 338) or the one-year statute of limitations for a claim for payment of a penalty (Code Civ. Proc., § 340)? [and]

(2) When an employee obtains an award on such a wage claim in an administrative proceeding and the employee seeks de novo review in superior court, can the employee pursue additional wage claims not presented in the administrative proceeding?

Votes: George, C.J., Kennard, Baxter, Werdegar, Chin, Moreno, and Corrigan, JJ

There is a very strong chance that the other recently published opinions in Mills and National Steel and Shipbuilding Company will be given a "grant and hold" review status if petitions for review are timely filed. To date, no petition has yet been filed in either case.

In other news, among the many cases for which review and granted or denied today was the opinion in Claudio v. UC Regents, in which the UC Board of Regents' petition for review was denied. Also denied was the petition for review filed by Harpreet S. Brar, the Orange County attorney recently jailed for filing frivolous lawsuits.

Nabors Industries Hit With $26.5 Million Arbitration Award in Break and Travel Pay Class Action

In 2003, a group of field workers for an oil well maintenance company filed a class action against their employer, Pool Well Services, Inc. (Cortez v. Pool Well Services, Inc., Ventura County Superior Court Case No.CIV 222363) alleging claims for travel pay and meal period violations. The trial court certified a class of 2,649 current and former workers, and then sent the case to binding arbitration on a classwide basis. In late 2005, the parties arbitrated the case before retired Justice Richard Neal.

On February 6, 2006, Justice Neal awarded the workers $26.5 million. The employees will receive between $5,000 to $50,000 each. Because the ruling came after a binding arbitration, the award cannot be appealed.

The class members were represented by the law firm of McTague & Palay. The defendants Pool Well Services, Inc. and its successor entity, Nabors Well Services, Inc. were represented by the law firms of Fisher & Phillips and Littler Mendelson. The decision to take this case to decision may turn out to be disastrous for the decision-makers at Nabors. The firm had previously lost several California Labor Board cases involving the same issues, making an adverse award quite foreseeable. Worse, the most recent SEC quartlerly and annual filings do not list the case as a pending material litigation matter.  The stock has fallen from 81 to 68 since the announcement of the award. Perhaps the next class action will be a shareholder case.

But What If The Boss Fires Me When I Ask For Overtime

From an email we received recently:

Q: I know my employer is required to pay overtime when we work over eight hours per day, but they don't, and I am afraid I will lose my job if I speak out. Can they fire me for complaining about the overtime pay?

A: No. Demanding wages and reporting violations of wage and hour laws is protected conduct, favored by a fundamental public policy of the State of California. Retaliation or termination of an employee for demanding full payment of wages is a violation of public policy and supports a cause of action for wrongful termination. Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal. App. 4th 1137, 1150; Phillips v. Gemini Moving Specialists (1998) 63 Cal. App. 4th 563.

We had a case a few years ago that would not have been worth taking but for the fact that the employee was fired for demanding about $1,500 in overtime pay. The case settled for many times what the employer owed in back pay.

Watching The Supreme Court

If you don't have the right cable listings, or you don't have TiVo, or you missed our post on Monday, and you still want to see the televised California Supreme Court arguments previously broadcast, you can view them here, in their full three hours, online. This is the February 14, 2005 broadcast. We really enjoyed the outstanding performance by Mr. Winikow in the Friends case.

Petition For Rehearing Denied in Gentry

On January 19, 2006, the Second District Court of Appeal held in Gentry v. Superior Court (Circuit City) that a pre-dispute arbitration agreement with a waiver of class action rights is not unconscionable when an employee has a meaningful (30 day) opportunity to opt out of the agreement. On February 9, 2006, the employee's petition for rehearing was denied. We anticipate that an appeal to the California Supreme Court will follow shortly.

Harpreet Brar Goes To Jail

Brea attorney Harpreet Brar went behind bars last week after Orange County Superior Court judge Peter J. Polos (the judge who oversees the Anaheim Angels case) called him an extortionist and found him to be in contempt of court for violating a November 2004 injunction against filing misjoindered cases in which multiple defendants were sued in one action involving unrelated allegations. Brar was ordered into custody immediately to serve 15 days in jail. He was also fined $3,000.

Brar's scheme involved large scale targeting of small business owners with dubious lawsuits alleging minor violations of consumer protection laws. Rather than seeking to right any wrongs, Brar would demand small settlements, often in the range of $1,000, hoping to profit from the fact that few businesses can hire a lawyer for less than $1,000.

Polos declared that Brar was "basically an extortionist" whose actions were as outrageous as those of the Trevor Law Group. Arguably, Brar is worse, because the Trevor Law Group stopped when the courts ordered them to stop. Not Brar. Despite the injunction, Brar filed many more lawsuits against liquor and convenience stores (for failing to disclose fifty-cent debit-card fees) including one in Pomona (which we blogged about a while back, drawing a comment from Mr. Brar himself), one in Norwalk and one in Orange County. Each case named several dozen unrelated defendants. The plaintiff was Brar's wife.

Brar argued, under that Code of Civil Procedure § 1209(c), he was entitled to a three-day stay of enforcement for any contempt finding punishable with jail time. Judge Polos noted that the code only applied to attorneys representing clients. Since Brar was the defendant, he ruled, section 1209(c) did not apply to Brar.

We were impressed, though not in a good way, that Brar knew about Code of Civil Procedure § 1209(c). Show me ten lawyers who know the law of attorney contempt procedure, and we'll show you ten lawyers whom we would rather not see practicing law.