Bay Area Employment Lawyer Blog

First Amendment Free Speech Rights Are Not Trivial

Published on: December 2, 2014 | Siegel LeWitter Malkani

Plaintiff Thomas claimed that her employer retaliated against her because she exercised her free speech rights and spoke out on matters of public concern. Thomas v. County of Riverside, 763 F.3d 1167 (2014).

The lower court dismissed her case, characterizing her claims as “petty workplace gripes”. Ms. Thomas claimed that her employer retaliated against her by removing her from an unpaid position, removing her from a teaching assignment, and denying her a previously granted vacation.

Discussing the importance of First Amendment rights, including the fact that these rights might be chilled by the types of retaliatory actions the County of Riverside took against Ms. Thomas, the Ninth Circuit reversed the dismissal of the case, emphasizing the importance of free speech for public employees.

California Supreme Court Lets Franchisor off the Hook for Sexual Harassment, but Victims of Sexual Harassment Should Always Look at Franchisor’s Role

Published on: November 20, 2014 | Siegel LeWitter Malkani

Franchise relationships are growing and need to be regulated. It is important to make both the franchisor and the franchisee responsible for the companies they create and/or run and/or set up. According to California Law, a franchisee is granted the right to engage in a business under a plan or system set up by the franchisor (think McDonald’s where 80% of its restaurants are operated under franchise agreements, with 20% operated as a chain).

The California Supreme Court put its thumbs on the wrong side of the scale of justice by letting Domino’s Pizza off the hook for sexual harassment because it was a franchisor. Patterson v. Domino’s Pizza, 60 Cal.4th 474 (2014). Nonetheless, it is important that any victim of sexual harassment or wrongful conduct look carefully at the franchise contract and the conduct of the franchisor and franchisee before determining whether or not to sue a franchisor.

The California Supreme Court found that, on the facts of this case, Domino’s didn’t have control or the right to control hiring/firing/discipline/employment policies and practices, and thus wasn’t responsible for the sexual harassment of Ms. Patterson. The Court declared that since Domino’s doesn’t have the right to control, or actual control, over these things, an employee can only sue the franchisee for sexual harassment. In reality, the Court decided it just didn’t want to make the franchisor responsible – regardless of the facts or the law.

FedEx Drivers are Employees not Independent Contractors: If it Looks Like an Employee, Wears the Uniform of an Employee and Drives the Standard Truck of an Employee, It is An Employee, Even if Fed Ex calls its Drivers “Independent Contractors”

Published on: September 19, 2014 | Siegel LeWitter Malkani

Can one even imagine that FedEx would so boldly claim that its drivers are independent contractors rather than employees because it lacks sufficient control over the drivers’ work? Really? Walk the streets anywhere and you’ll see the ubiquitous FedEx driver, in the exact same trucks, wearing identical uniforms and delivering packages in the exact same manner.

It is hard to even dream that FedEx would claim these folks aren’t entitled to the protections of employment status. But they did. In order to save a buck, FedEx came up with an elaborate justification to claim their employees aren’t employees.

FedEx claimed and claims that because they make these drivers buy their own trucks and scanners, pay for their own uniforms, and work whatever hours are necessary to get FedEx’s work done, the drivers aren’t employees. They claim that because they require their drivers to sign contracts saying they are independent contractors, that they are independent contractors. They claim just because they say FedEx can’t control the “manner or means” of getting the job done, regardless of what they do, that these drivers are independent contractors.

California Supreme Court Upholds Protections for Undocumented Workers

Published on: August 6, 2014 | Siegel LeWitter Malkani

In a partial victory for California workers, the State’s highest court ruled, in Salas v. Sierra Chemical Co. 59 Cal.4th 407 (2014) that employers cannot get away with violating California employment laws just because they find evidence, after being sued, that their mistreated employees did not have proper authorization to work in the United States.

Mr. Salas had worked for Sierra Chemical Company in California for a number of years when he injured his back on the job. The company had regular seasonal layoffs during the winter months and typically hired back its workers when business picked up in warmer months. However, after Mr. Salas injured his back on the job and filed a worker’s compensation claim, Sierra refused to hire him back until he could prove that he no longer needed an accommodation for his back injury. Mr. Salas filed a lawsuit against Sierra for unlawful employment discrimination and retaliation under the California Fair Employment and Housing Act, claiming that Sierra refused to accommodate his physical disability and refused to rehire him in retaliation for having filed a worker’s compensation claim.

Almost two years after refusing to rehire Mr. Salas, and just before the case was set to go to trial, Sierra found evidence that Mr. Salas had used someone else’s social security number when he applied for the job many years ago. The company argued that this information provided a complete justification for throwing his lawsuit out of court. Fortunately, the California Supreme Court disagreed, ruling that an employer cannot completely escape from liability just because it later finds evidence, after a lawsuit is filed, that the employee it discriminated against was undocumented. The Court explained that employers would otherwise have a powerful incentive to hire undocumented workers, or “look the other way” when hiring employees they suspect to be undocumented, because they would be able to violate any number of California’s employment laws (including minimum wage laws, child labor laws, and anti-discrimination laws) and get away with it if any of their undocumented employees ever sued to enforce the law.

A “Split Decision”: California Supreme Court Addresses Arbitration Agreements and Gives Some Good News (But Mostly Bad News) to Employees

Published on: July 15, 2014 | Siegel LeWitter Malkani

In the Iskanian v.CLS Transportation Los Angeles, LLC decision, the California Supreme Court addressed the enforceability of employer-employee arbitration agreements in various circumstances. Iskanian v.CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014). The case delivered some good news – but mostly bad news – for employees and attorneys who represent employees.

First, as to the bad news: Boxed in by the United States Supreme Court’s decisions on the enforceability of arbitration agreements, including in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740 (2001), the California Supreme Court upheld the validity of class action waivers in employment arbitration agreements. The California Supreme Court overruled its previous decision in Gentry v. The Superior Court of Los Angeles, 42 Cal.4th 443 (2007) as preempted by the Federal Arbitration Act (“FAA”).

The California Supreme Court also addressed the recently developed and powerful argument that class action arbitration waivers are invalid under the National Labor Relations Act (“NLRA”), which provides workers with a right to collective organize and advocate for their rights as a group. That argument gained traction with the National Labor Relations Board (“NLRB”) in its recent decision in D.R. Horton. Inc., 357 NLRB No. 184 (2012), but unfortunately the California Supreme Court sided with the Fifth Circuit’s contrary opinion in D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013). The California Supreme Court held that the NLRA was no obstacle to the applicability of the FAA to support the enforcement of class action waivers in arbitration agreements.

Supreme Court Bears Good News for Whistleblowers

Published on: July 7, 2014 | Siegel LeWitter Malkani

In Thursday’s unanimous Lane v. Franks decision, the Supreme Court decided that public employees are protected from retaliation when they testify in court about misconduct they observe on the job. Lane v. Franks, 134 S.Ct. 2369 (2014).

Edward Lane was a director of a program for underprivileged youth operated by Central Alabama Community College (CACC). As the director, he conducted an audit of the program’s expenses and found that an Alabama State Representative, Susan Schmitz, was on the payroll even though she was not doing any work for the program! Mr. Lane terminated Ms. Schmitz’s employment and soon thereafter, Ms. Schmitz was indicted on mail fraud and theft charges. Mr. Lane testified against Ms. Schmitz about why he fired Ms. Schmitz and Ms. Schmitz was ultimately convicted.

After he testified, Mr. Lane, along with 28 other employees were terminated. But a few days later, CACC’s president Steve Franks hired back everyone other than Mr. Lane and one other employee. Mr. Lane filed a lawsuit claiming that Mr. Franks had violated his First Amendment rights by firing him in retaliation for testifying against Ms. Schmitz.

State Public Policy Claim Against Airline Preempted Because the Federal Aviation Act Occupies the Field of Aviation Safety

Published on: June 27, 2014 | Siegel LeWitter Malkani

As Mr. Ventress learned the hard way – after three trips to the Ninth Circuit – it is tough to sue an airline for safety violations and/or termination for reporting safety violations.

Mr. Ventress claimed he was retaliated against as a flight engineer because he reported safety concerns. The case took three trips to the Ninth Circuit. In the first appeal, Ventress v. Japan Airlines (Ventress I) , 486 F. 3d 1111 (2007), the Ninth Circuit held that the Friendship Commerce and Navigation Treaty did not bar or preempt Mr. Ventress’ claims. In the second trip to the Ninth Circuit, it held that the Airline Deregulation Act did not bar or preempt Mr. Ventress’ claims. Ventress v. Japan Airlines (Ventress II), 603 F.3d. 676 (2010).

However, Mr. Ventress wasn’t so lucky on his third journey to the Ninth Circuit, which held that Mr. Ventress’ public policy/safety claims were barred by the Federal Aviation Act (FAA). The Court held that the claims would require the jury to decide safety questions that are governed by the FAA which occupies the field of aviation safety. Ventress v. Japan Airlines (Ventress III) 747 F.3d 716 (2014).

Same-Sex Harassment and Retaliation Case Reinstated by Court of Appeals

Published on: June 23, 2014 | Siegel LeWitter Malkani

In good news for victims of sex harassment and retaliation, and especially for same-sex victims, Lewis v. City of Benicia, 224 Cal.App.4th 1519 (2014) reinstated many of the claims against the City of Benicia and one of its supervisors.

First, the California Court of Appeals made clear that the trial court overstepped its bounds when it dismissed a sexual harassment claim. Following the U.S. Supreme Court opinion in Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998), the court held that same-sex harassment which included sexual comments intended to humiliate the plaintiff due to his gender identity constituted sexual harassment. It reversed the lower court’s ruling that the harassing conduct was not sufficiently “severe or pervasive” to constitute sexual harassment. It found that several months of a course of conduct of gifts and lunch purchases, sexual jokes, and pornographic computer images, was sufficient to bring a claim for sexual harassment.

On the other hand, the Court of Appeals dismissed a sexual harassment claim against another supervisor whose only conduct was showing computer pornography to a group of employees once or twice, and making an occasional joke.

U.S. Supreme Court Rules That Severance Payments are Taxable Wages

Published on: June 13, 2014 | Siegel LeWitter Malkani

On March 25, 2014, the U.S. Supreme Court held that severance payments provided to a terminated employee are taxable. U.S. v. Quality Stores, Inc. 134 S.Ct. 1395 (2014). This case involved severance payments to employees laid off before and during bankruptcy proceedings. The size of the payments were determined by job security and length of employment. Given this case, most “severance payments” will be construed as taxable wages, wherein an employer should issue a W-2 and withhold taxes.

However, there certainly may be situations in which payments received from an employer at or around termination – at least some of the payment – may not be taxable wages. For example, if an employee is provided payment in lieu of a pending or possible discrimination claim, this payment certainly might contemplate payments for some combination of lost wages, emotional distress and/or attorney’s fees. What the payment is actually intended to cover may vary in each situation. Thus, it is important to look at the underlying nature of the payment in order to determine whether a payment is taxable wages. And, as a precaution, it is important to clarify what the payment is for – preferably in a writing between the parties.

Alas, it is also important to note that even if a payment is not “taxable wages”, there will most likely be taxes that are still due! For example, most emotional distress awards/settlements are taxable, just not taxable as wages. It is best to check with an employment lawyer and/or an accountant about this.

Invasion of Privacy Claim Established Where Supervisor Blatantly Shares Medical Condition With Co-Workers

Published on: January 21, 2014 | Siegel LeWitter Malkani

There is an employee-with-a-disability’s worst nightmare. You suffer from a disability. You try your best to go to work each day despite your disability (which here is a mental disability). Because of the stigma associated with the disability, you keep your medical condition to yourself. When you must miss work due to your disability, you faithfully let your employer know. Because you want your employer to understand that there really is a good reason for your absence, you let your employer know the nature of your disability and that it caused you to miss work. Then, your employer stands up on a chair and screams to the world, including all your co-workers, “Ignat was bipolar!” Ignat v. Yum! Brands, Inc., 214 Cal.App.4th 808 (2013).

As a result of Ignat’s supervisor’s loose lips, Ms. Ignat’s co-workers shun her and ask whether she is going to “go postal”. Ms. Ignat sues for invasion of privacy. The employer defends based on a bunch of technicalities. First, it defended the case based on the fact that she filed her legal papers too late. The trial court bought this, but the Court of Appeals reversed. Then it defended claiming you can only state a claim for invasion of privacy if the invasion is done in writing, rather than orally. The lower Court bought this argument, and dismissed Ms. Ignat’s claim. Luckily for her, the Court of Appeals agrees that an invasion of privacy doesn’t require a written agreement, calling such a requirement “outmoded”.

I wish Ms. Ignat good luck back in the trial court. Yum! Brands (which, by the way, owns the likes of Kentucky Fried Chicken and Taco Bell) should apologize to Ms. Ignat rather than fighting her claim on technical grounds.