• Is Griping About Your Boss Protected Speech?

    The National Labor Relations Act of 1935 (NLRA) created the National Labor Relations Board (NLRB)  It gives employees the right to organize and bargain collectively with their employers.  This is called unionization.  It protects their activities, including speech, from any retaliation.  What first comes to mind are scenes from The Grapes of Wrath–huge corporations surrounded by picketers, signs, and angry mobs.

    Not so any more.  The NLRB has adopted a more aggressive enforcement policy with respect to small business, even non-profits.   In the modern age many forms of communication—tweets, emails, the spoken word, Facebook posts, websites—can be protectable speech even if the posts are injurious to the employers’ business.

    You Do Not Have To Be A Union Or Union Organizer To Be Protected. 

    Any employee who communicates with another employee for the purpose of forming a collective complaint to the employer is engaging in protected conduct.

    In a 2003 NLRB decision, the Board ruled that the employer violated the Act when it suspended an employee for (a) violating its rule prohibiting its employees from discussing salaries and wages with each other, (b) interrogating employees concerning their discussion of salaries and wages with each other, and (c) ultimately discharging the employee.

    The employee disclosed the salary of another employee without their permission arguably to fashion a protest against unfair wages.  The other employee’s right to privacy never entered into the analysis.  Incidentally, California Labor Code Section 232 prohibits any of the following: (a) Require, as a condition of employment, that an employee refrain from disclosing the amount of his or her wages, (b) Require an employee to sign a waiver or other document that purports to deny the employee the right to disclose the amount of his or her wages, (c) Discharge, formally discipline, or otherwise discriminate against an employee who discloses the amount of his or her wages.  The California code does not yet address the situation where an employee discloses the salary of another without their permission.  However, the Equal Pay Act that goes into effect on January 1, 2016, will include a provision stating that an employer shall not prohibit an employee from discussing the wages of others, inquiring about another employee’s wages, or aiding or encouraging any other employee to exercise his or her rights under this section. 

    In a 2014 case, the Board ruled that derogatory comments about the employer posted on the employee’s social media was protected speech under the Act.  Rumors, misrepresentations, gossip and the like are all protected unless the employer can demonstrate a real adverse impact, such as serious morale issues, on the ability of the employer to conduct business.

    As we move into the digital age the employment landscape becomes ever more complicated.  And there is no bright line on how to proceed.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
    Original article by Phillip J. Griego of the Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.

    Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Interesting Article Regarding New Regulations Regarding Homecare

    The New York Times ran an blog article regarding an interview with Select Home Care regarding ways some employers are considering to survive recently enacted and currently pending changes regarding in-home care.  The implementation of AB241 requiring overtime for caregivers in California and soon-to-be-imposed federal regulations requiring overtime for caregivers throughout the nation have employers scrambling to consider how they can keep in-home care affordable and profitable.

    The article suggests three alternatives employers are considering:

    1. Raise rates to cover the increased costs, which will mean fewer people will be able to afford in-home care.  Raising the costs will not increase the profit margins, but will result in fewer clients which means companies will have to do more with less.  Companies could hire more workers so the employees each work less hours, but that will reduce the employee’s income and require more managers to oversee the work.  This doesn’t result in more money for the workers, but could help keep the cost to the client down.
    2. Switch employees to independent contractors.  The article makes it seem like this is a viable option, but I have serious doubts this will be an effective solution.  Particularly in California where there are hefty fines for willfully misclassifying an employee as an independent contractor, and given the broad definition of “employer,” under AB241, I don’t recommend this course of action in most cases.
    3. Change the business model to a referral agency.  Referral agencies do not employ the workers, but can still help families locate and hire quality workers.  This could lower the costs for the families because they are not having to pay the profit margins for the caregivers, but it comes with its own sets of risks.  Most likely, the family will become the employer, which means the family needs to understand and comply with the myriad of laws impacting employers and employees.  This can be a daunting concern.

    The article quotes a few other industry professionals, and most seem to agree that the first option (raising prices to cover the costs) is the safest route.  I agree.  Hiring more caregivers, each working fewer hours, will help keep the costs down, but can impact the continuity of care.  This is particularly important for clients with Alzheimer’s or dementia.  Instead of having one worker working a 24-hour shift, you’ll end up with two to four workers working shorter shifts.  Financially this is the best option.  I don’t know if this will be the best option for providing quality care to the elderly and disabled.

    Governor Brown (CA-D) has taken the position that the best way to deal with the increasing costs is to limit the number of hours the employees work.  That is why his budget proposal does not allow caregivers under the state’s In-Home Support Services program to work more than 40 hours per week.  Of course, Governor Brown hasn’t indicated how the clients will care for themselves during the remaining 128 hours of the week.

    There is one last assumption in the article that bears addressing.  All of the sources seem to imply that they can deduct up to 8 hours of sleep time for 24-hour shifts.  Because the California Supreme Court granted review of Mendiola v. CPS Security Solutions, Inc. in the fall of 2013, we cannot guarantee that an employer can deduct for sleep time.  While the federal regulations allow employers to deduct for sleep time, the issue has not been decided in California.  Employers in California that deduct for sleep time may run the risk of having to go back several years to pay for the uncompensated hours of work.

    The New York Times blog promises to do a follow-up with Select Home Care to check on their progress.  If you, or someone you know, uses or provides in-home care, you should speak with a knowledgeable employment attorney to understand the rights and obligations imposed by the law.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Are Confidentiality Provisions in Settlement Agreements Enforceable?

    When settling an employment claim, many employers insist upon a confidentiality clause.  The clauses vary, but oftentimes provide for liquidated damages or the return of the settlement payment if the person discloses the existence or amount of the settlement agreement.  So how enforceable are those agreements?  According to a story by the Palm Beach Post, one Florida teen’s Facebook post cost the father his $80,000.00 settlement.

    According to the article, Patrick Snay settled his age discrimination case against his former employer, Gulliver Preparatory School in Miami.  The settlement agreement included a confidentiality clause.  Upon learning of the settlement, Mr. Snay’s daughter posted the following on her Facebook page: “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”  When the school learned about the post, they accused Mr. Snay of violating the confidentiality clause and refused to pay the settlement.

    Snay won an early victory to enforce the agreement, but the school appealed the decision and won.  Mr. Snay could appeal again, but there’s no guarantee he’ll get the money back.

    The moral of the story: If you sign an agreement promising not to disclose something, keep your mouth shut.  Perhaps even more importantly, know

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • FAQ’s Regarding California’s Caregiver Overtime Laws

    With the new overtime requirements under the newly enacted Domestic Workers Bill of Rights (AB241), I’ve received a lot of questions about how the law will impact caregivers and the families they serve.  Many employers and employees do not understand their rights and obligations.  Hopefully the following answers to some of the common questions I’ve been receiving will help clarify the law.

    Keep in mind, this is a newly enacted statute with some ambiguities.  Future cases or amendments could affect my interpretation of the statute.

    Q: My employer told me that they are reducing my pay rate so they can afford to pay overtime.  Can my employer do that?

    A: Usually, yes.  Most employees are employed “at-will.”  This means the employer or the employee can terminate the employment relationship at any time, with or without notice, and for any reason or no reason (except an illegal reason).  When an employer lowers an employee’s pay rate, the employer is effectively terminating the old employment relationship and offering new employment under the new lower rate of pay.   Your continued employment constitutes acceptance of the terms of the unilateral contract.  As long as the employer notifies the you of the new terms of employment (e.g., the new rate of pay), the employer can change the terms.  An employer may not retroactively alter the terms of the employment.

    Employers are supposed to provide employees a new Notice to Employee under Labor Code section 2810.5 whenever the employer changes the employee’s pay rate (or any other item included in the 2810.5 Notice to Employee).

    Q: Can an employer deduct the cost of room and board from an employee’s pay?

    A: Yes, if the employer provides meals and lodging to an employee, even if the meals and lodging are provided at the client’s site, an employer can deduct specific amounts for the meals and lodging as a credit against the employer’s minimum wage obligations.  The employer must have a written agreement, and can only deduct up to certain amounts specified in the wage order.  Generally speaking, the amounts an employer can deduct are fairly low, and are usually well below fair market value (For example, an employer can only deduct $2.90 for breakfast, $3.97 for lunch, $5.34 for dinner, and $37.63 per week for an unshared room), and the employee must actually receive the meals or lodging if the employer is going to use that as a credit against the employer’s minimum wage obligation.

    Q: Can I pay a caregiver a “daily” or “weekly” rate?

    A: You can, but you shouldn’t.  A daily or weekly rate is a salary.  The law says that a salary only compensates an employee for the “regular nonovertime hours” worked.   For a domestic work employee that qualifies as a personal attendant, this means the first 9 hours in a day or the first 45 hours in a week.  If you pay a worker a daily or weekly salary, you are not paying the employee for any overtime hours.  All caregivers should be paid by the hour and should be paid for all hours worked.

    Q: Can my employer deduct for sleep time?

    UPDATE:

    The California Supreme Court granted review of Mendiola v. CPS Security Solutions, Inc. in the fall of 2013.  Until the Supreme Court issues its decision, employers may not be able to rely on the sleep time rules stated below.  If you have questions about your work situation, contact an attorney familiar with California’s overtime requirements.

    A: Under Mendiola v. CPS Security Solutions, Inc, an employer can deduct for sleep time as long as:

    1. The employee regularly receives at least 5 hours of uninterrupted sleep;
    2. The employee is provided a comfortable place to sleep;
    3. The employer and employee agree (preferably in writing) that the sleep time is not compensable; and
    4. The employee works a 24-hour shift.

    If any of those factors are missing, the employer cannot deduct for sleep time.  Additionally, the employer can only deduct the actual number of rest time hours, up to a maximum of 8 hours per 24-hour shift.  So, if the employee only receives 6 hours of uninterrupted sleep, the employer can only deduct those 6 hours.  If the employee receives 10 hours of uninterrupted sleep, the employer can only deduct a maximum of 8 hours.

    As noted in the update above, Mendiola v. CPS Security Solutions, Inc. is currently under review and therefore an employer may not be able to avail itself of the sleep time rules.

    See my article for more detailed information.

    Q: If I work in San Jose, but the care agency that employs me is located outside of San Jose, am I still entitled to the San Jose minimum wage?

    A: Yes.  Certain cities, such as San Jose and San Francisco, have adopted their own minimum wage ordinances.  Any employees performing work within the geographical boundaries of the specified cities must receive the minimum wage set by the ordinances.  In San Jose, the minimum wage is $10.15 per hour.  In San Francisco, the minimum wage is $10.74 per hour.

    Q: My employer wants me to become an independent contractor.  Is that legal?

    A: Likely not.  There are a number of factors that determine whether a worker is an employee or an independent contractor, and the tests can differ from agency to agency.  Under the Domestic Workers Bill of Rights, an employer includes anyone that exercises control over the employee’s hours, wages or working conditions.  It is hard to imagine a scenario where the caregiver has 100% control over his or her hours, wages and working conditions.  If you are working one day as an employee, and the next day as an independent contractor without any other changes, chances are you are really an employee.

    Q: I run domestic worker placement agency.  Do I have to comply with the new overtime laws?

    A: Not if meet the definition of a domestic work employment agency under Civil Code section 1812.5095.  See my article to see if you meet all of the requirements.

    Q: Which hours are counted toward the weekly overtime?  I work 12 hours a day, 5 days a week.  By the 4th day I’ve worked 45 hours.  Does that mean that the 5th day is all overtime?

    A: The Domestic Workers Bill of Rights uses the same, or substantially similar, language as other overtime statutes in defining which hours require overtime payments.  Cases interpreting those statutes make it clear you only count the regular hours worked towards the weekly overtime.  In other words, you only count the first 9 hours worked toward the weekly 45 hour maximum.  You don’t count the daily overtime hours toward the weekly maximum because the employer already paid overtime for the hours in excess of 9 per day.

    The following examples may help.

    Correct!

    M T W T F Total
    Total 12 12 12 12 12 60
    Reg Hrs 9 9 9 9 9 45
    OT Hrs 3 3 3 3 3 15

    Wrong!

    M T W T F Total
    Total 12 12 12 12 12 60
    Reg Hrs 9 9 9 9 0 36
    OT Hrs 3 3 3 3 12 24

    Hopefully these answers help. Each situation is unique.  The questions and answers provided above are for general information purposes only. If you have questions or concerns about your particular situation, contact an employment attorney familiar with wage and hour issues in the elder care industry.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Do I Have to Pay Employees When They are Sleeping?

    UPDATE:

    The California Supreme Court granted review of Mendiola v. CPS Security Solutions, Inc. in the fall of 2013.  Until the Supreme Court issues its decision, employers may not be able to rely on the sleep time rules stated below.  If you have questions about your work situation, contact an attorney familiar with California’s overtime requirements.

    To some, this question may seem simple, but the answer may surprise you.  Generally speaking, an employer must compensate an employee for all “hours worked.”  In California, most wage orders define “hours worked” as, “the time during which an employee is subject to the control of an employer, and includes all the time that the employee is suffered or permitted to work, whether or not required to do so.”  This means that if I require my employee to be at the work site, the employee is under my control and therefore I am likely required to pay the employee.  Even if she is sleeping on the job.

    How does this general rule play out in jobs where an employee is required to be at the work site 24 hours a day?  There are a host of occupations that require a presence 24-hours a day, even if the employee is not actually performing work the whole time.  Caregivers (e.g., personal attendants), ambulance drivers, guards, and ship workers are just a few examples.  One option would be to split the 24-hour shift among several workers, and pay all workers for all hours they are required to remain on the premises.  At minimum wage ($8.00 per hour in California), this means an employer will have to pay at least $192.00 per day, and usually employ three different employees each day, just to meet the minimum wage requirements.

    Some employers choose to deduct 8 hours from the employee’s working hours as “sleep time” or as “on-call” time.  Federal regulations clearly allow an employer to deduct 8 hours from the employee’s hours worked in certain situations.  But California oftentimes does not follow the federal regulations.  A recent case, Mendiola v. CPS Security Solutions, Inc., may provide some guidance.

    CPS provides on-site security guards at construction sites.  The company provides a trailer with full amenities (e.g., bed, bathroom, kitchen, internet, tv, etc.) and the guard is required to live on the premises.  Monday through Friday, the guards are on active patrol 8 hours during the day (5:00 a.m. to 7:00 a.m. and 3:00 p.m. to 9:00 p.m.), and must remain on the premises at night.  On the weekends, the guards are on active patrol 16 hours during the day (5:00 a.m. to 9:00 p.m.), and must remain on the premises at night.  The guards can technically leave the premises at night, but they have to notify the employer ahead of time so the employer can schedule a relief guard, and the guard has to carry a pager and be able to report back to the site within 30 minutes.

    The employer and employees had written “On-Call Agreements,” specifying that the guards were free to engage in their own personal pursuits during the evening, so long as they remained on the premises.  If the guard responded to an incident during the night, the guard would be paid for the time spent responding to the incident. Otherwise, so long as the guard received at least 5 hours of uninterrupted “sleep time,” the guard would not be paid for the on-call period.  Mendiola sued CPS on behalf of himself and other similarly situated guards, alleging the guards should have been paid for all hours spent at the work site because they were subject to the employer’s control.

    Unsurprisingly given past court decisions, the court determined that the time spent on site was compensable “on-call” time.  The significant restrictions placed upon the employee combined with the fact that the employee’s presence on site was primarily for the benefit of the employer meant the employer was required to pay the employee for all hours spent at the site.

    The court went on to say that when the employees worked a 24-hour shift (e.g., weekend shift), the employer could deduct 8 hours for the time the employee spent sleeping.  This is surprising because, with the exception of wage order 5 (which has a different definition of “hours worked” for employees that are required to reside on the premises, and for certain other exceptions such as ambulance drivers and attendants), there is no applicable statutory or regulatory exception for sleep time.  After concluding that the federal regulations were not appropriate authority upon which to analyze the “on-call” time, the court concluded it could follow federal regulations with regard to “sleep time.”  The court relied Monzon v. Schaefer Ambulance Service, Inc. (1990) 224 Cal.App.3d 16 and Seymore v. Metson Marine, Inc. (2011) 194 Cal.App.4th 361.  Although those cases revolved around different wage orders, both cases concluded that an employer could deduct for sleep time when an employee worked a 24-hour shift, provided the employee actually received the sleep time and the employer and employee agreed that the employee would not be paid for the time spent sleeping.  The Mendiolacourt went even further and concluded that the “sleep time” rule is applicable to all wage orders that have similar definitions of “hours worked.”

    We agree with the courts in Seymore and Monzon that because the state and federal definitions of hours worked are comparable and have a similar purpose, federal regulations and authorities may properly be consulted to determine whether sleep time may be excluded from 24-hour shifts. Further, we find this determination to be applicable to all wage orders that include essentially the same definition of “hours worked” found in Wage Order No. 9, including Wage Order No. 4.

    The court’s decision indicates an employer does not have to pay employees when they are sleeping if:

    1. The employee is working a 24-hour shift,
    2. The employee receives at least 5 hours of uninterrupted sleep time,
    3. The employee is provided a comfortable place to sleep, and
    4. The employer and employee enter into an agreement covering the sleep time.

    Based on the court’s decision, I have a few recommendations.  Do not assume that just because an employee has nothing to do means you don’t have to pay the employee.  You must pay employees for all hours worked.  If you have an employee working a 24-hour shift, you may be able to deduct up to 8 hours for sleep time, but you must have an agreement in place before the employee performs the work.  The agreement should be in writing, and preferably reviewed by an attorney familiar with wage and hour laws.

    I highly recommend speaking with an attorney to see whether your payroll practices comply with the law.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Are You Ready for the San Jose Minimum Wage Ordinance?

    The San Jose Minimum Wage Ordinance goes into effect on March 11, 2013.  Passed by voters during the last election, the new ordinance requires employers doing business in San Jose to pay a minimum of $10.00 per hour for any employee that works at 2 hours per week in San Jose.

    At first glance it might seem that the law only applies to businesses physically located in San Jose, but that is not accurate.  The ordinance defines an employer as:

    any person, including corporate officers or executives, as defined by Section 19 of the California Labor Code, who directly or indirectly through any other person, including through the services of a temporary employment agency, staffing agency or similar entity, employes or exercises control over the wages, hours or working conditions of any Employee and who is either subject to the Business License Tax Chapter 4.76 of the Municipal Code or maintains a facility in the City.”

    The City’s perspective is that anyone carrying on or conducting business in San Jose is subject to the Business License Tax.  Even if your business is located outside of San Jose, if you provide goods or services in San Jose you are an “employer” under the SJMWO.

    Not all employees working in San Jose are covered by the SJMWO.  Employees who are not otherwise entitled to payment of minimum wage under California minimum wage laws (e.g., outside salespersons, certain family members of the employer, etc.) are not “employees” under the SJMWO.  Additionally, the employee must work in San Jose at least 2 hours per week.

    In addition to paying the increased minimum wage, employers subject to the SJMWO must post the SJMWO poster in a conspicuous place.  You can download copies of the SJMWO poster here.

    The City has developed a list of FAQ’s that they hope to post on their website soon.  Unfortunately, there were a few errors in the FAQ’s that require revision, so we don’t know when the FAQ’s will be posted.

    The City has, or soon will, set up an enforcement mechanism for complaints regarding violations.  One of the benefits of the enforcement/complaint process is the ability to resolve the matter through early mediation or conciliation.  One of the drawbacks is that complaints do not need to be filed with the City agency and nothing prohibits an employee from pursuing a claim with the City and in court.

    As with many wage and hour statutes and regulations, an employee suing an employer for a violation of the SJMWO is entitled to recover his/her attorneys’ fees, but a successful employer is not able to recoup its attorneys’ fees even if the employer proves there was no violation.  The City hopes that its administrative process will allow the parties to resolve cases early without extensive litigation, and that the attorneys’ fees therefore will not be a significant issue in resolving a case.  I’ll hold my opinion until I see the results.

    One of the concerns is that an employer who has a posting violation, for example, may be subject to a $50.00 per day per employee penalty (plus attorneys’ fees), if the employer fails to have the required posting in a conspicuous place.  The penalty begins from the date of the violation and continues until the violation ceases.  For example, if you have 5 employees that each travel to San Jose at least 2 hours per week, and you fail to have the correct poster, you could face over $90,000.00 in penalties.

    Employers are also required to maintain payroll records, and to allow the City access to such records, for 4 years.

    Of course employers may not discriminate in any manner or take adverse action against any person in retaliation for exercising any of the rights under the SJMWO.

    Failing to understand and comply with the SJMWO may have devastating effects on your business.  Every employer and every employee should become familiar with the SJMWO so they can understand their rights, remedies and responsibilities.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Brown Vetoes Domestic Workers Bill of Rights (AB 889)

    On September 30, 2012, Governor Brown vetoed the Domestic Workers Bill of Rights (AB 889).  The governor’s veto message indicates, among other things, the bill raised too many unanswered questions about what “economic and human impact on the disabled or elderly person and their family of requiring overtime, rest and meal periods for attendants who provide 24 hours care.”  Governor Brown apparently felt that we should answer some of those questions before mandating a change in the law.  He seemed particularly troubled by the fact that the bill required the Department of Industrial Relations to find answers to the question and come up with regulations at the same time.

    I think the veto was a good move for now.  Let’s gather the facts and consider the impact of a law before we change it.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • An Interesting Way to Resolve a Case: mediation/binding baseball arbitration

    I previously discussed some of my concerns regarding binding arbitration agreements.  Arbitration has its place, and it can be a very useful tool in resolving cases.  As much of my practice involves employment disputes, drafting an enforceable arbitration agreement can be difficult, and I believe arbitration oftentimes does not meet the objectives that it is intended to achieve (i.e., lower costs, quicker resolution, lower awards, etc.).  There are many variants to the typical arbitration or mediation options, and a recent case caught my eye because it presented one of the more unique variants.

    In Bowers v. Raymond J. Lucia Companies, Inc. (No. D059333), the parties were in the middle of binding arbitration, when they decided to dismiss the arbitration and the accompanying state court action, and participate in “mediation/binding baseball arbitration.”  According to the record, the plan was to:

    participate in a full day mediation. If, at the end of that mediation, the Parties have failed to reach an agreement, the Plaintiffs (Bowers, Seward, and LaBerge) shall provide to the mediator their last and final demand, which demand shall be some amount between $100,000 and $5,000,000, and the Defendants (Companies, Wealth Management, and Enterprises) shall provide to the mediator their last and final offer which offer shall be some amount between $100,000 and $5,000,000. The mediator shall then be empowered to set the amount of the judgment in favor of Plaintiffs against Raymond J. Lucia Companies, Inc. by choosing either Plaintiffs’ demand or Defendants’ offer, such binding mediator judgment to then be entered as a legally enforceable judgment

    At the end of the mediation, the mediator decided to award the plaintiffs the full $5,000,000.00.  That’s right, the “mediator” awarded the money.  This is unusual because typically mediators do not have the power or authority to “award” anything.  The mediator typically helps the parties reach a resolution, but if the parties are unable to reach an amicable (or unamicable?) resolution, the mediator’s job is done.  Because the parties in Bowers agreed the mediator could make a binding award if the mediation failed, the trial court and the appellate court upheld the award. Parties can agree to allow a third party to decide what the parties will pay, even if the evidence is not presented in a typical trial or arbitration setting.

    It’s easy to armchair quarterback this one and second-guess the thinking behind agreeing to such an unusual form of dispute resolution.  Going into the process the parties had to know that the plaintiff’s “last and final demand” was going to be $500,000.00, just like the defendant’s “last and final offer” was going to be $100,000.00.  The case does not provide a lot of facts regarding the underlying claims or liabilities (we only know that it was some kind of defamation claim), but I presume liability was not much of a question, and that the real issue was the amount of damages.  The big risk for each side is that, knowing the other side’s “last and final” number is likely going to be the highest or lowest allowed by the parties’ agreement, the resulting mediator’s “award” was essentially going to be an all or nothing deal.  I suppose there was the possibility that had the parties stuck with the original arbitration the arbitrators could have awarded significantly more than the $5,000,000.00 ceiling to which the parties agreed, but it seems like a pretty high risk given the fact that the mediator receives information differently than an arbitrator, a judge or a jury.

    I am a big proponent of mediation.  Given the costs and risks involved in litigation, mediation offers the parties the opportunity to have a say in the outcome of the resolution.  I’m not so sure I would be willing to hand that control over to the mediator.  The process of presenting my case in mediation differs significantly to how I present my case to the trier of fact.  I’m not sure how my presentation would have to change if I knew that at the end of the day the mediator was going to “decide” the case.

    If you want to read the case, you can find it here.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • Court Clarifies Commission Case

    By the end of this year all commission agreements in California must be in writing.  When drafting or reviewing your commission agreement it is a good idea to keep in mind several issues; one of which is whether the commissioned employee is exempt from California’s overtime laws.  A recent court decision (Muldrow v. Surrex Solutions) addresses the basic requirements of the inside salesperson exemption.

    Let me start off by reminding you that there are two different possible sales-related exemptions under California’s overtime laws: inside sales persons and outside salespersons.  Outside salespersons are exempt under most, if not all, wage orders.  Inside salespersons are only exempt if the employment is governed by Wage Order 4 (professional, technical, clerical mechanical and similar occupations) or Wage Order 7 (mercantile industry).  If some other wage order applies then the inside salesperson exemption is not available.  There are several different distinctions between the inside salesperson and the outside salesperson exemptions that I hope to address in a subsequent article.  For now, I want to focus on a couple of key points discussed in the Muldrow case.

    Surrex Solutions Corporation locates and provides qualified candidates for employment to other companies.  Sometimes the candidates are hired directly by the customer and other times Surrex “rents” the candidate to the customer for a specified billing rate.  Surrex employees review open positions, research and locate qualified candidates, negotiate terms of employment/hiring with candidates and customers, and obtain orders from customers for the candidates.  The Surrex employees are paid a percentage of any placement/hiring fees when the customer hires the candidate directly, and a percentage of the adjusted gross profit for candidates retained on a consultant basis.  Tyrone Muldrow, on behalf of himself and other similarly situated employees, filed a class action against Surrex claiming he was entitled to overtime.  The trial court and the appellate court rejected the claim and determined Muldrow was exempt from California’s overtime laws under the inside salesperson exemption.

    The court emphasized several earlier cases distilling the necessary criteria for the inside salesperson exemption:  “First, the employees must be involved principally in selling a product or service, not making the product or rendering the services.  Second, the amount of their compensation must be a percentage of the price of the product or service.” (quoting Ramirez v. Yosemite Water Co (1990) 20 Cal.4th785)

    In addressing the first issue (i.e, was the employee involved principally in selling a product or service), the court reduced Muldrow’s job to its essence: Surrex employees would offer a candidate’s services to a client in exchange for a payment of money from the client to Surrex.  Although there was some discussion regarding duties leading up to the consummation of the sale, all of those duties were part of the selling process and therefore the employees were “involved principally in selling a product or service.”

    As to the second issue, the employees conceded that they were paid a percentage of the price of the product for the direct hires, but claimed that since the amounts paid on the non-direct hire cases was not based on the gross price of the product or service, it was not a commission.  The court had no trouble rejecting this argument.  Nothing indicates the percentage must be based on the gross price versus an adjusted gross or net price.  The court similarly rejected the employees’ argument that the commission plan should be rejected because it was “too complex.”

    An interesting issue that was not addressed by the court (and possibly not raised by either side) was the fact that the commissions are calculated by taking the gross profit then deducting ordinary costs of doing business in order to calculate the commission.  There has been discussion for some time regarding the extent to which an employer can use the ordinary costs of doing business in the calculation of bonuses, commissions and profit-sharing agreements.  The California Supreme Court has flip-flopped on the issue at least once.  The latest rule is that, at least with respect to managerial profit sharing plans, an employer can calculate a profit sharing plan using profitability which necessarily includes the ordinary costs of doing business.  Under Muldrow, it would appear an employer can also calculate a commission based on the ordinary costs of doing business (e.g., overhead, employee costs, benefit costs, etc.)

    Commission plans can be simple or they can be complicated.  Even simple commission agreements need to carefully consider a number of factors.  Now that California law will require all commission agreements to be in writing and provided to the employee, it is extremely important for you to review and understand your commission arrangement.  If your plan is not in writing, now is the time to start working on it with a knowledgeable professional.  And don’t forget to consider any possible overtime ramifications!

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

  • For Whom No Bell Tolls

    OK, maybe this case is only interesting to those of us Wage and Hour nerds, but Harris v. Superior Court could be hailed as the final nail in the Bell case trilogy.  Although this post may include more information about how sausage is made than you ever wanted to know, the Court’s decision could curtail a fairly significant number of overtime lawsuits.

    The Bell cases are  three  decisions that the Supreme Court issued regarding whether claims adjusters working for Farmers Insurance Exchange were exempt from California’s overtime requirements.  The cases were important because the court used the production/administration dichotomy to find the adjusters did not meet the administrative exemption test.

    The production/administration dichotomy distinguishes between administrative employees primarily engaged in “administering the business affairs of the enterprise” and production employees primarily engaged in “producing the commodity or commodities, whether goods or services,” that were the focus of the enterprise.  Despite the fact that Bell specifically held that the production/administration dichotomy is not useful in every case, a lot of attorneys try to rely on the distinction as a simple way of determining whether an employee is exempt.

    In Harris, claims adjusters employed by Liberty Mutual Insurance Company and Golden Eagle Insurance Corporation filed a class action seeking unpaid overtime.  The employer alleged the employees were exempt under the administrative exemption, and the plaintiffs filed a motion for summary judgment seeking a determination that “as a matter of law,” the claims adjusters could not be exempt.  The appellate court used the production/administration dichotomy and held the employees could not be exempt from California’s overtime laws.  The California Supreme Court disagreed and put a huge damper on further attempts to use the production/administration dichotomy as the sole basis for defeating a claimed exemption.

    Harris pointed out that Bell was decided based on pre-2000 regulations which did not clearly define the administrative exemption.  In 2000, the IWC amended the wage orders providing more details as to what activities qualify as exempt duties and specifically incorporated specific federal regulations.  Bell did not have the advantage of those regulations and therefore relied on the production/administration dichotomy absence clear direction from the legislature or the IWC.  Now that we have specific regulatory guidance, the production/administration dichotomy is even less useful.

    Perhaps the biggest death toll for Bell is the Supreme Court’s focus on the fact that Bell is really only applicable to pre-2000 cases.  While there may be a few pre-2000 cases still winding their way through the court system, I suspect there aren’t many of them left.

    It is also important to note that the Supreme Court did not say the claims adjusters were or were not exempt from overtime.  The court merely pointed out that the appellate court used the wrong test in determining whether the employees are entitled to overtime.  Correctly classifying employees is not easy, and you should seek the assistance of competent professionals before making a costly mistake.

    The Law Office of Phillip J. Griego
    95 South Market Street, Suite 520
    San Jose, CA 95113
    Tel. 408-293-6341
     
    Original article by Robert E. Nuddleman, former associate of The Law Office of Phillip J. Griego.
     
    Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.
     
    Your use of this blog does not create an attorney-client relationship between you and the Law Office of Phillip J. Griego. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and the Law Office of Phillip J. Griego cannot guarantee the confidentiality of anything posted to this blog.Phillip J. Griego represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.