On May 22, 2014, a California District Court conditionally certified a nationwide collective action covering about 1,500 female employees of Daiichi Sankyo Inc. (“DSI”) who allege the drug company paid them less than their male peers, ruling that the plaintiffs had met the low evidentiary burden to move forward collectively.

In SARA WELLENS, et al., v. DAIICHI SANKYO, INC., 2014 U.S. Dist. LEXIS 70628, the United States District Court for the Northern District of California granted the workers’ motion for conditional certification of their Equal Pay Act (“EPA”) claims, rejecting Parsippany, New Jersey-based Daiichi’s argument that the plaintiffs hadn’t identified a common unlawful policy that unifies their “highly individualized” pay claims.

According to the Daiichi Court, at the conditional certification stage, the question is not whether plaintiffs have proven their case that there is a widespread and discriminatory pay differential between men and women, but whether there is a reasonable basis to conclude that there are “potentially” similarly-situated class members who would “benefit” from notice.

DSI argued that the employees within the proposed collective class cannot be similarly situated because the job duties for the various positions included in the class vary widely.  The court held that DSI misperceived the question relevant to this conditional certification stage: are plaintiffs similarly situated with respect to their EPA allegations? Here, the court decided, they are.

Simply, the Plaintiffs contended, as supported by their declarations, that they were subjected to a policy at DSI to pay women less in violation of the EPA. Thus, according to the court, they have made a preliminary showing that within their job titles, they are similarly situated. That DSI may pay different wages for different positions (within set ranges), that job duties vary between divisions and job titles, and that different positions are compensated differently based on location, are not factors that defeat conditional certification.  Instead, whether the “disparate factual and employment settings of the individual plaintiffs” means that this case cannot proceed collectively, or would need to be prosecuted with subclasses for each of the job titles or geographic locations, is a matter to be determined at the second stage of the certification process.

The take-away from this case is that defeating conditional certification at stage one, the “notice stage,” is very difficult in light of the “fairly lenient standard.”  Rather than attacking the merits of plaintiff’s allegations, employers who are preparing to oppose a motion for conditional certification of an FLSA collective action should focus on highlighting the lack of an illegal policy, plan, or decision and the lack of similarities between the plaintiffs but understand that it is an uphill battle in which employers infrequently prevail.

As the days grow warmer, California employers with outdoor places of employment should think about compliance with California’s Heat Illness Prevention Regulations (Cal. Code of Regs. tit. 8, § 3395). To comply with the regulations, California employers should take four essential steps:

  • Develop and implement written procedures for addressing heat illness prevention;
  • Train employees and supervisors;
  • Provide adequate water; and
  • Provide adequate shade.

For more information, please read the entire article HERE.

A trial court lacked authority to rule on the enforceability of an arbitration agreement when the parties had contracted to delegate questions about the agreement’s enforceability to the arbitrator, the California Court of Appeal has ruled, reversing the denial of arbitration in a wrongful discharge action. Tiri v. Lucky Chances, Inc., No. A136675 (Cal. Ct. App. May 15, 2014).

Although the agreement’s delegation provision was in an adhesive contract, drafted by the employer and presented to the employee on a take-it-or-leave-it basis, and despite the fact the employee stated she was worried she would lose her job if she refused to sign it, the Court found the agreement was enforceable because it was not overly harsh or one-sided, and therefore, not substantively unconscionable.

Click here to continue reading the entire legal update on the Jackson Lewis web site.

On May 15, 2014, the California Assembly passed a proposed amendment to California’s statute governing sexual harassment training.

Currently, the statute requires employers with 50 or more employees to ensure workplaces are free of sexual harassment by providing training to their supervisory employees at least once every two years.  Such training must include information regarding the federal and California provisions prohibiting sexual harassment, and demanding its prevention and correction, as well as the remedies available to victims of sexual harassment.  The statute also requires that training include practical examples to demonstrate how to identify, prevent, and correct sexual harassment, discrimination, and retaliation.

The proposed amendment would require an additional component of training regarding the prevention of “abusive conduct” in the workplace, as defined in the amendment.  According to the bill’s author, the amendment is aimed at the prevention of bullying in the workplace.

Having passed the vote in the California Assembly, the bill currently is before the California Senate.  Employers should stay tuned, though, as they may be required to modify their current state-mandated training in the relatively near future.

For up-to-date developments on this and other workplace law topics, subscribe to the firm’s legal alert and event list here or follow us on Twitter and LinkedIn.

 

clock-and-money-on-the-weighing-scale-1172392-mWorried about potential wage and hour issues at your company? Do you stay awake at night wondering whether you’ve properly classified your independent contractors or whether your non-exempt employees are using their smartphones from home? Have no fear, as you will come away from this presentation with a better understanding of how to navigate the gauntlet of wage and hour issues employers face daily when determining how and what to pay their employees.

 

Our speakers will address:

  • classification  and misclassification concerns;
  • employees using electronic devices for work away from work;
  • compensability of telecommuting and travel time; and
  • employees otherwise working off the clock.

We will explore these and other issues from the perspective of both management and your employees. We will also provide insight on the recent policies and positions taken by the principal governmental enforcement agency relating to wage and hour matters.

Speakers will include Jackson Lewis attorneys whose practices are focused heavily on both litigating these issues and providing employers day-to-day counseling on how to avoid costly lawsuits as well as investigations by the Department of Labor on these sensitive and high-profile wage and hour issues. Questions are welcome before, during and after the presentation.

Registration: 8:30  – 9:00 a.m.
Program: 9:00 – 10:30 a.m.

Tuesday, June 17
Walnut Creek Marriott
2355 North Main Street
Walnut Creek, CA 94596

Wednesday, June 18, 2014
Jackson Lewis P.C.
50 California Street, 9th Floor
San Francisco, CA 94111

Tuesday, June 24, 2014
Crowne Plaza – Palo Alto
4290 El Camino Real
Palo Alto, CA  94306

CLE and HRCI credits pending.

Fee: $40

Questions? Please contact Rachel De Dora at (415) 394-9400 or SFRSVP@jacksonlewis.com.

CLICK HERE TO REGISTER

On April 21, 2014, a California Appellate Court held that an arbitration agreement is unconscionable and an employer cannot compel arbitration when the employer failed to translate the entirety of an English-language employment agreement containing an arbitration agreement, confidentiality clause, and enforceability provision for its Spanish-speaking employees.

In Esteban H. Carmona et al. v. Lincoln Millennium Car Wash Inc. et al. (Case Number B248143, State of California, Second Appellate District, Division Eight), current and former employees Esteban H. Carmona, Marcial H. Carmona, Pedro Cruz, and Yoel Isail Matute Casco sued Lincoln Millennium Car Wash Inc. and Silver Wash Inc. on behalf of themselves and similarly situated employees for alleged wage-and-hour violations.  Their employers sought to compel arbitration.  The trial court ruled that the arbitration agreement at issue in the case was unconscionable and refused to enforce it, noting that the car wash companies translated only certain parts of the agreement into Spanish and failed to explain it thoroughly.

The employment agreement at issue contained an arbitration clause under the heading “Settlement by Arbitration.”  It also included a confidentiality clause and an enforceability clause.  The arbitration clause and the main confidentiality clause were translated into Spanish but the confidentiality subagreement and the enforceability clauses were not translated.

The court held that the confidentiality clause in the employment agreement was part of the arbitration clause because it required employees to discuss any disputes with management before divulging any information about the car wash companies to “any persons, firms, corporations, media agency, government entities or agencies, [or] other entities.”  Thus, before going to any attorneys or submitting anything to a trial court or dispute resolution entity such as the American Arbitration Association (AAA), the employees were required to talk to the car wash companies.  Additionally, the enforceability clause in the confidentiality subagreement pertained to certain disputes between employee and employer and arbitration rights and was therefore also held to be a part of the arbitration clause.  Despite the fact that the clauses were under separate headings in the employment agreement, they were all part of the same employment agreement and were to be read in conjunction to ascertain the entire “arbitration agreement.”

The Appellate Court affirmed, holding the enforceability clause of the agreement was one key component hidden from new employees.  “The car wash companies hid the enforceability clause and the entire confidentiality subagreement by failing to translate that portion of the agreement into Spanish. The car wash companies evidently knew the plaintiffs required Spanish translations because they provided some translation. The record does not reveal why the car wash companies did not translate the entirety of the employment agreement.”

This case is another example of the importance of fully evaluating the language of an arbitration agreement and understanding who makes up the employer’s workforce before implementing such an agreement.  Employers should be mindful that the enforceability of an arbitration agreement can hinge on whether or not employees understand what they are signing.  Employers are advised to provide translations of the entirety of their arbitration agreements, not just select provisions, to employees who cannot speak and/or read English.

To read our legal article on the topic, click here.

On January 31, 2014, a California Appellate Court reversed an employer’s summary judgment despite well documented evidence of the employee’s history of poor performance.  This decision—Cheal v. El Camino Hospital (No. HO36548)—addresses a pivotal question for employers: when can employers legitimately terminate a protected employee because of poor performance?

At the age of 61, Plaintiff Carol Cheal (“Plaintiff”) was terminated from her job as a Dietetic Technician Registered from Defendant El Camino Hospital (“Defendant”). In this position, Plaintiff was primarily responsible for preparing menus for hospital patients.  Between January and September 2008, Plaintiff’s supervisor provided her with multiple written warnings, including a final warning for her failure to adhere to hospital procedures that ensure correct foods reach the correct patients.  Ultimately, Defendant terminated Plaintiff on October 10, 2008 because it determined she was no longer competent to perform her duties.

Plaintiff later filed a lawsuit asserting, among other things, age discrimination.  Defendant’s Summary Judgment Motion was granted by the trial court because Plaintiff failed to show that she could perform her job in a satisfactory manner.  Subsequently, a California Appellate Court reversed Defendant’s Summary Judgment.  In doing so, the Court analyzed the following elusive question: what constitutes satisfactory employee performance?  While the Court stated that an employer is free to set standards and discipline an employee that might appear unreasonable to outside observers, the Court cautioned that an employer’s standards and discipline must be applied evenhandedly.  The Court reasoned that because Defendant’s policies actually allowed for mistakes, and because similarly situated employees also made mistakes without the consequence of termination, there was a triable issue as to whether Plaintiff performed her job in a satisfactory manner.  As such, Defendant could not defeat Plaintiff’s case on summary judgment.

For employers, the Cheal case presents two practical takeaways.  First, employers must enforce their policies evenly among all employees.  If one employee is treated more harshly than others, this unequal treatment may later be used as evidence of a discriminatory animus.  Second, employers should review their policies to make sure they clearly delineate what constitutes adequate job performance.  In Cheal, Defendant’s policy allowed its employee’s to make a certain number mistakes, which according to the Court, defeated Defendant’s argument that Plaintiff was unable to competently perform her job duties.

Ambiguity in settlement agreements can sabotage finality and certainty as a recent California decision shows. Where a settlement agreement is silent regarding litigation costs, an employee may obtain mandatory costs as the prevailing party under state law as the settlement proceeds constituted the required “net monetary recovery,” the California Court of Appeal has ruled. DeSaulles v. Community Hosp. of the Monterey Peninsula, No. H038184 (Cal. Ct. App. May 2, 2014).

To read the rest of the article, please click here.

Originally posted by SmartRecruiters Blog, the leading source for how to hire on the web. To view the original post, please click here.

So you’re a startup. You’ve decided to take your world-changing idea and move it out of your dorm room/garage/favorite-table-at-Starbucks and start a legitimate business. So what next?

If you plan on staying in business for the foreseeable future, you might want to make sure you’re compliant with employment laws since lawsuits can cost businesses hundreds of thousands of dollars. Indeed, the average cost for single-employee lawsuits – excluding any money paid for settlement – is around $100,000 and on the rise. The following list outlines 10 key areas in employment law that startups should be thinking about, but often are not.

Startup Employment Law

Photo Credit: Maygrove Campus News.

1. Federal, State, and Local Laws. You’ve heard of minimum wage, overtime, meal breaks, etc. And if you’re like most people these days, you turn to the internet, search “minimum wage”, and read the first thing you see. But there are federal, state, and local laws that usually cover the same topic differently. Although subtle, those differences could spell trouble if you’re not following all of them properly.

Take minimum wage for example. The federal minimum wage is $7.25 per hour. In California, it’s currently $8.00. Narrower still, in the City and County of San Francisco, it’s $10.74, and in San Jose, $10.15.

Bottom line? What you don’t know can hurt you. Federal law, which is most likely to pop up first on a simple Google search, may not tell the full story of what you’re legally required to do as an employer. Make sure to dig deeper into state and local laws. A good resource for federal law is the United States Department of Labor. California-based companies can look at State of California Department of Industrial Relations webpage.

2. Job Postings. Before you even meet a potential hire, your job posting may potentially subject you to a claim for discrimination or other violation of the law.

In the startup world, a common potential mistake is to request “US Citizens only” in job postings. Obtaining visas for employees can take time, money and resources – all of which you’re trying to conserve. The request is innocent enough, but employers cannot limit job applicants or hires to U.S. citizens, unless they are required to do so by federal, state, or local laws or federal contracts.

What you can and should ask is whether an applicant is currently authorized to work in the United States or will require sponsorship for employment. Under the anti-discrimination provision, nonimmigrant visa holders cannot claim a violation of the law for failure to hire based on their need for sponsorship.

3. On-Boarding Paperwork. So you’re ready to make your first new hire (or your second, or your tenth – congrats). You’ve verbally or electronically explained pay rate and start date to your new hire, but you’re still missing important documentation.

All employers in the United States are required to complete an “I-9.” Form I-9 is used for verifying the identity and employment authorization of individuals hired for employment in the United States.  Otherwise, you can be subject to significant fines and penalties. You can download Form I-9 here.

You should also issue a Form W-4, so that so that you can withhold the correct federal income tax from your employee’s pay. You can download Form W-4 here.

4. Culture vs. Compliance. Remember, you’re in business now, and you have to keep it professional. I know many of you want to keep your culture fun and relaxed, but without some formal policies and protections for your employees, you may inadvertently open your business up to some serious consequences such as claims for discrimination or unequal treatment.

Age discrimination is a prominent issue facing startups, and then trend to sue is only climbing. According to the EEOC, claims of this type have increased more than 31% between 1997 and 2013. Be careful to avoid using language and terms in job postings and during interviews that could be construed as a bias towards hiring younger employees, such as “we’re a young, energetic company.”

Sexual harassment is another pain point common in laid-back environments, and you should never assume your employees will know what behaviors constitute as sexual harassment. In 2013, the Equal Employment Opportunity Commission received 27,687 “sex-based” charges costing companies millions of dollars in settlements and legal fees. Federal and state laws say employers must do everything possible to prevent harassment and discrimination from occurring, even requiring you to distribute literature on the issue and/or hold management and employee trainings.

Prevent sexual harassment and discrimination in your startup by distributing company-wide handbooks and personnel guides that spell out your company’s policies. Have labor counsel review the materials before issuance to ensure that all necessary elements are included. Then set the tone in the office by practicing what you preach so others may follow your lead. Nobody wants you to stop having fun, but nobody wants to see you get sued either. I promise, there is a happy medium.

5. Employee Manuals. Employee manuals don’t have to be the super corporate antithesis of your startup. In fact, your employee handbook can be a reflection of the culture of your brand, written with your unique tone expressed throughout. What’s important is that it contains policies regarding leave laws, zero tolerance for harassment and discrimination, benefits, an “at-will” definition and acceptable workplace behavior at the minimum.

If you don’t provide these policies/notices to employees, you may be violating required federal, state or local notices. Without a handbook, an employee who later decides to sue may use your absence of policy as evidence that you weren’t following the law. Setting a good foundation for what you expect from your employees, and what your employees can expect from you, will help protect against future problems.

6. Classifying Employees. I often hear startup leaders say, “My employees are exempt. I pay them a salary.” Not so fast! Paying your employees a salary does not make them exempt from overtime or other requirements.

Whether an employee should be classified as exempt or nonexempt varies between state and federal law, and between roles and positions. For example, compare how California treats the issue of exempting employees in the computer software field versus how the federal Department of Labor analyzes the issue. As to how states have been expanding the computer professional exemption, check out these recent decisions in California and New York.

Misclassifying employees as exempt when they’re not can lead to disastrous results. The Wall Street Journal’s Law Blog reports that wage-and-hour lawsuits—including misclassification—increased by around 10 percent in 2013. And this is no joke. Your company could be exposed to potential class action lawsuits seeking to recover unpaid wages and overtime, penalties, and attorneys’ fees. Talk to your employment attorney to make sure your employees are properly classified.

7. Use of Independent Contractors. It may seem like a good idea to avoid the whole “exempt” issue, avoid paying overtime, and simplify your life.  You think you’ve found the loophole and have decided to hire “independent contractors.” But, like the exemption issue, calling a worker one thing, does not make them so. Even with a signed agreement in hand, it does not mean they’re not your employee.

The IRS uses a “20-factor test” to assess the degree of control the company exercises over work performed by an independent contractor. If the company exercises too much control, the worker is an employee. A similar test is used for status under workers’ compensation laws.

With the myriad of laws, it is possible for a worker to be classified as an independent contractor under one law, but an employee under another. This is all the more reason to make sure you are properly evaluating worker status. Read how California examines the issue here.

8. Hiring of Interns. This may crush your plans for compensating interns with just places to crash and endless pizza, but there is really no such thing as an “unpaid internship” anymore. Interns should have pay, training, and/or college credit.

Generally, you are expected to pay for all time an employee works. Under federal law, an exception to this rule may apply if the intern’s training meets certain criteria. State or local laws may impose even stricter or additional criteria on when an internships. So check with your employment attorney to see if your internships qualify, as lawsuits for “unpaid internships” are on the rise.

9. Paying Your Employees. Writing a check to your employees once a month or handing them cash will not be a sufficient system for paying your workers. State and federal laws require certain information to appear on pay records, and that you state how frequently and by what means you plan to pay. Failure to provide this required info can later form the basis for a class action lawsuit.

10. As You Grow, So Will Your Legal Obligations. As your startup grows, so will your obligations to your employees. Several federal and state laws that were once not applicable to you, may become mandatory. For example, employers with 50 or more employees must provide a certain amount of Family Leave and adhere to the laws in the Affordable Care Act. As you grow, stay connected with your employment law office to stay on track with the increased legal responsibilities.

If the above points have you thoroughly confused and a bit stressed, there’s no need to panic. While the myriad of employment laws can make the idea of launching your startup seem daunting, a skilled and educated employment lawyer can help you navigate these treacherous waters. And making sure you find the right labor and employment lawyer to assist you with your business is as critical as making sure you have the right patent or contract lawyer working for you. Doing so will save you time and money – and will help you lay important groundwork to continue growing, hiring and moving forward.

California Labor Code section 226 requires employers to provide accurate wage statements, and enumerates specific requirements for such wage statements.  The statute also provides for penalties should an employer violate section 226, and allows a prevailing employee to recover attorneys’ fees in connection with prosecuting claims for alleged wage statement violations.

On May 6, 2014, California’s Assembly on Judiciary heard arguments concerning Assembly Bill 2095, a proposed amendment to Labor Code section 226(h)’s attorneys’ fees provision, which would amend section 226(h) to provide a two-way fee shifting provision.  Under the proposed amendment, employers who successfully defend against a frivolous wage statement claim could recover their attorneys’ fees in doing so.  Supporters of AB 2095 contend the amendment is necessary to help deter bad faith claims for alleged technical violations of Labor Code section 226 that do not cause any injury to the employee.  The bill’s supporters cite, for example, to a 2010 case in which the alleged violation was the employer’s use of a truncated name on employees’ wage statements.  Although the claim was dismissed on summary judgment, supporters of AB 2095 were disturbed by the unnecessary attorneys’ fees and costs the employer incurred to defend against the claim, prompting the proposed amendment.  In contrast, opponents argue AB 2095 is unnecessary because the standard to show the requisite injury under Labor Code section 226 was heightened in 2012, and because a 2013 amendment to the Code of Civil Procedure already allows prevailing employers to recover attorneys’ fees in bad faith litigation.

Should AB 2095 pass, it would mark a small victory for California employers, as employees and their attorneys would have to carefully evaluate whether to bring a Labor Code section 226 wage statement claim for alleged “technical” violations that have not caused some notable injury.