Sweat, blood, tears and stock options: the labor laws that protect all of us, even startup entrepreneurs

Sweat, blood, tears and stock options: the labor laws that protect all of us, even startup entrepreneurs

By Daniel Velton

If you live in Silicon Valley, it’s hard to miss news about deals like the recent $19 billion acquisition of WhatsApp, a young instant messaging company with a mere 55 employees. Or the $1 billion purchase of Instagram, a photo-sharing startup employing only about a dozen folks. Or the blockbuster deal for Waze, a small smartphone navigation company.

The lore of startup culture is by now well known. These often casual workplaces boast features like ping pong tables, 3D printer vending machines, skeeball, rock climbing walls, motorcycles, video games, draught beer taps, yoga mats and arcades. (Now television viewers can tune in to the startup world through a new HBO series.)

As hard as startuppers play, they work even harder. In their blur of 60-80 hour workweeks and caffeinated coding, dreams of being part of The Next Big Deal feed their dedication. They give up a lot of themselves and their personal lives in exchange for the elusive prospect of an early retirement. Many, though, often lose sight of the fact that there’s at least one thing they don’t give up — their rights.

California’s labor laws protect all of us, whether we work in shorts and flip-flops (or bunny slippers) in a fast and loose startup culture, or in slacks and dress shirts in a more traditional corporate environment.   More than one startup has learned this lesson the hard way.  The free-wheeling culture at Square Inc. has been cited by some as leading to a sexual harassment claim against the company’s chief operating officer.  Then there were claims of intimidation, violence and gunplay at the heart of a retaliation lawsuit against Color Labs’ co-founder.  And then there is the seminal Silicon Valley age discrimination case – Reid v. Google, Inc. – involving a 52-year-old manager allegedly referred to by managers as a “fuddy-duddy” with ideas “too old to matter.”   Eventually, his termination lawsuit went all the way to the California Supreme Court, which ruled that comments like those could establish age discrimination.   Finally, though well past its start-up phase, even tech giant Oracle Corporation was recently hit with a claim for retaliation by a sales manager who objected to what he says was national origin discrimination against Indian employees.

Silicon Valley interests may have successfully pushed through an 11th hour budget trailer in 2008 to end overtime pay for many computer professionals, but even in the wild world of startups, there are still laws protecting workers.  The bottom line is that laws that prohibit discrimination, retaliation and harassment, statutes that require employers to accommodate disabled employees, rules that mandate overtime pay for most hourly workers — these and many other protections cover all of us, regardless of where we work.

Startup employees may sell their souls, but they should be mindful that their legal rights don’t go away as part of the bargain.

 

Daniel Velton

About Daniel Velton

Daniel Velton began his career with the largest labor and employment law firm in the world. Using that experience, he brings valuable knowledge and perspective to his current practice, in which he exclusively represents employees in individual and class action discrimination, wrongful termination, harassment, wage and hour, and other employment cases.

It’s none of their business, or is it? 3

It's none of their business, or is it?

By Daniel Velton

About 100 years ago, Ford Motor Company had a “sociological department” of investigators who monitored Ford workers’ off-duty conduct to ensure those employees didn’t drink too much, kept their homes clean and “properly” spent their leisure time.

About two weeks ago, an employer in San Francisco announced a new policy prohibiting the use of all tobacco products on its property by employees, even while on break and even while in their personal cars. With the new rule comes the introduction of a team of “tobacco-free ambassadors” to advise workers of the prohibition. It’s not the first employer to implement a tobacco-free policy, and probably not the last.

The new policy, like the old one at the turn of the last century, is apt to reignite a debate over workers’ right to privacy and the freedom to do what they want in their free time. Unquestionably, the goal of tobacco free-policies in the workplace is noble. Thousands die of smoking-related illnesses every year, cigarette butts litter smoking areas, and most find that smoke just plain smells bad. Even more important, the workplace at issue here is effectively a hospital environment with numerous medical patients. In announcing its new policy, the hospital itself acknowledges that nicotine forms an addiction as bitterly painful as any to break. (To its substantial credit, UCSF will provide free nicotine replacement gum to help with cravings).

Employer regulation of off-duty conduct has led to numerous laws across the country. In California, for example, Labor Code section 98.6 prohibits terminating or in any way discriminating against an employee because he or she engaged in “lawful conduct occurring during nonworking hours away from the employer’s premises.” Whether smoking in one’s car during a lunch break qualifies as protected off-duty conduct remains to be seen. Either way, those taking part in the inevitable debate over this issue should be mindful of the important interests on both sides. Successfully striking a balance between employee freedoms and patient/coworker rights to a smoke-free environment is going to be as difficult as going cold turkey ever was.

Daniel Velton

About Daniel Velton

Daniel Velton began his career with the largest labor and employment law firm in the world. Using that experience, he brings valuable knowledge and perspective to his current practice, in which he exclusively represents employees in individual and class action discrimination, wrongful termination, harassment, wage and hour, and other employment cases.

Swipe paycard, have wages swiped

Swipe paycard, have wages swiped

By Daniel Velton

When you make minimum wage at $8 an hour, you expect it to actually be $8 an hour. Not $7, not $7.25, not $7.99.

Reinforcing that obvious principle, federal consumer protection regulators last week issued a bulletin warning employers that they cannot force workers to accept wages on pay cards, many of which later lead to surprise fees for withdrawing the money those workers have already earned.

Across the country almost 4 million households have someone who receives their wages on a payroll card, according to a recent survey by the Federal Deposit Insurance Corporation. The cards, often issued to workers without a bank account, have led to numerous complaints about undisclosed fees those employees encounter when trying to access the funds.

In June, a Pennsylvania woman filed a class action lawsuit against the McDonald’s franchise where she worked based on alleged minimum wage violations caused by a pay card system that charged her and other workers to withdraw their earnings. In her case, the pay cards allegedly charged between $1.50 and $5 for each withdrawal.

Why all the noise over a few bucks here or pennies there? First, minimum wage workers rely on every last cent of their income to make ends meet, and paying fees on a regular basis to receive that income adds up. Second, the payroll industry is a $25-45 billion sector. Processing pay stubs and physical checks for companies with thousands of employees costs a lot of money. In other words, cutting out those processes (for example, by implementing mandatory pay card systems) results in tremendous cost savings and a net benefit on the corporate bottom line. Banks, who charge the withdrawal fees on pay cards, win big too. There is only one loser in this picture.

Nevertheless, pay cards can be put to good use. In principle, they provide easy access to wages for workers without bank accounts, preventing them, among other things, from having to make regular trips to a check cashing business that charges transaction fees.

California lawmakers have tried to regulate the use of pay cards. A couple years ago, Senate Bill 931 passed in spite of fierce opposition from business and banking interests. The Governor, however, did not sign the bill, stating that it would impose numerous and costly new requirements on pay card providers. At the same time, he recognized that “reasonable protections are needed for those who use pay cards” and vowed to work with legislators on a regulatory solution.

With the growing use of pay cards across the country, lawmakers who revisit this important issue should keep in mind that people already work hard for their wages. They shouldn’t have to pay for them too.

Daniel Velton

About Daniel Velton

Daniel Velton began his career with the largest labor and employment law firm in the world. Using that experience, he brings valuable knowledge and perspective to his current practice, in which he exclusively represents employees in individual and class action discrimination, wrongful termination, harassment, wage and hour, and other employment cases.

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