CELA VOICE ← PROMOTING FAIRNESS AND EQUALITY IN THE WORKPLACE ← Page 12

New laws to advance workers’ rights in California: the 2013 legislative round up 2

Oct

24

2013

Now that the dust has settled after a flurry of action from the Governor’s office to meet this year’s bill signing deadline, it’s time to take stock of how workers fared during the 2013 legislative year. Although there were some challenges and setbacks, on balance, the California Employment Lawyers Association (CELA) and its many allies made some great progress in advancing the rights of California workers.

To start, the Governor signed several significant bills this year to help boost and protect the earnings of low-wage and immigrant workers. After years of stagnation and prior unsuccessful attempts, the state minimum wage will finally see an increase after the approval of AB 10 (Asm. Alejo). Even the Chamber of Commerce’s ignoble “job killer” list did not stop the Governor from signing AB 10 into law. The new law raises the $8 an hour minimum wage to $9 an hour, effective July 1, 2014, and from $9 an hour to $10 an hour, effective Jan. 1, 2016.

Domestic workers will also see a boost in wages after scoring a historic victory with AB 241 (Asm. Ammiano), known as the Domestic Workers Bill of Rights. After a disappointing veto last year on a similar bill, the Governor’s approval of AB 241 was a significant step forward for the Domestic Workers campaign, which has roots all across the nation. This law mandates overtime compensation for domestic workers in California who work over 9 hours in a day and over 45 hours in a week.

Bills to protect wages were also a highlight of this year’s legislative session. SB 496 (Sen. Monning), signed by the Governor this year, makes it easier for workers to pursue a claim for unpaid wages by eliminating the threat of potentially ruinous liability if they ultimately do not succeed on their claim.

Carwash workers cemented some much-needed protections by eliminating the sunset date on one of the most effective tools for combating wage theft in the car wash industry. AB 1387 (Asm. Hernandez) now permanently requires car washes to register and obtain a bond to fund an account for car wash workers who cannot collect their wages.

The Fair Paycheck Act, which would have helped all workers collect their unpaid wages, unfortunately suffered a defeat this year due to heavy lobbying by special interest groups in big business and banking. This bill would have authorized an employee to record and enforce a wage lien upon an employer’s property. Though unsuccessful, the Fair Paycheck campaign, led by a broad coalition of low wage worker advocates, will continue to rebuild as sights are set on another legislative attempt next year.

Two major victories scored this year were the signings of AB 263 (Asm. Hernandez) and SB 666 (Sen. Steinberg), a pair of bills aiming to protect and promote the rights of immigrant workers who suffer from pervasive abuse in the workplace. These bills help workers assert their rights by clarifying that retaliation protected under Labor Code 98.6 broadly includes any adverse actions (including threats of deportation). Additionally, these bills clarify that workers do not have to go through the cumbersome process of filing administrative complaints unless the Labor Code expressly requires it. Another immigrant workers’ rights bill signed this year, AB 524 (Asm. Mullin), makes it a crime for employers or their attorneys to use threats of deportation to exploit immigrant workers.

Whistleblowers also receive some added protection under SB 496 (Sen. Wright), which expands Labor Code 1102.5 to cover workers who are preemptively fired before they can report any wrongdoing and to cover a broader range of disclosures.

Proposals to strengthen the state’s family care laws met heavy opposition this year, with only one of three bills even making it to the Governor’s desk. SB 404 (Sen. Jackson) and SB 761 (Sen. DeSaulnier) – both labeled “job killers” by the Chamber of Commerce – stalled in committees. SB 404 would have prohibited discrimination against workers who care for their family members and SB 707 would have provided job protection for workers taking paid family leave. Unless they are lucky enough to work for an employer that is covered by the California Family Rights Act, workers who take paid family leave are still at risk of being fired for taking the leave.

SB 770 (Sen. Jackson) was the lone family care bill signed by the Governor into law. This bill expands the Paid Family Leave Program to provide wage replacement for workers taking care of seriously ill grandparents, grandchildren, siblings, and parents-in-law.

With the exception of one, the Governor signed several bills to help strengthen our workplace anti-discrimination and anti-harassment laws. The lone defeat was SB 655 (Sen. Wright), a bill backed by a broad coalition of civil rights organizations in response to a California Supreme Court decision that undercuts the remedies available to victims of discrimination under the Fair Employment and Housing Act (FEHA). SB 655 would have provided guidance in the enforcement of discrimination and retaliation claims under the FEHA and would have provided compensation for victims of discrimination and retaliation in certain kinds of cases.

The Governor did sign a couple of bills to expand workplace protections for veterans and those in the military, AB 556 (Asm. Salas), as well as for victims of domestic violence, SB 400 (Sen. Jackson). Significantly, SB 400 not only prohibits discrimination against victims of domestic violence, it also requires employers to provide victims with reasonable accommodations. The Governor also approved SB 292 (Sen. Corbett), which strengthens sexual harassment protections, particularly with same-sex harassment, by clarifying that harassing conduct need not be motivated by sexual desire.

Former offenders will also find some added protections and help securing employment with the approval of AB 218 (Asm. Dickinson). As part of the nation-wide “ban the box” campaign, this bill has gone through many iterations and defeats in the past. Years in the making, this new law prohibits state and local agencies from asking an applicant to disclose information regarding a criminal conviction until after the agency has first determined whether the applicant meets minimum qualifications for the position.

All of the bills signed this year will take effect January 1st of 2014. And as we look at what new changes lie ahead, it’s clear to see that together we achieved considerable success on behalf of workers and working families in California.

Are workplace flexibility laws the wave of the future? 2

Oct

21

2013

By Sharon Vinick

Flexibility in scheduling and other alternative work arrangements are crucial tools that enable working families to reconcile work and family responsibilities. Many industrialized countries, including the United Kingdom and Australia, have enacted laws that guarantee employees the right to ask for flexible work schedules, without fear of retaliation. These laws also require that employers seriously consider a request for flexible working arrangements, and provide a business justification for any request that is denied.

The Working Families Flexibility Act, first introduced in Congress by Representative Carolyn Maloney and the late Senator Edward Kennedy in 2007, would have guaranteed American workers the same ability to ask for work options without fear of retaliation. Although she keeps trying to pass the legislation into law, the Congresswoman’s vision has yet to take hold.

While Congress has yet to act, developments at the state and local level suggest that the tide may be turning in the direction of workplace flexibility.

In June, Vermont passed legislation that gives employees the right to request a “flexible work arrangement” for any reason and requires the employer to consider such a request at least twice each calendar year. The law, which will go into effect on January 1, 2014, defines a “flexible work arrangement” as “intermediate or long-term changes in the employee’s regular working arrangements, including changes in the number of days or hours worked, changes in the time the employee arrives at or departs from work, work from home, or job sharing.” Once an employee submits a request, the employer must discuss it in good faith and grant the request if it is not inconsistent with business operations.

This month, the San Francisco Board of Supervisors passed the “Family Friendly Workplace Ordinance,” which allows employees to submit a request for an alternative work schedule to better fit their care-giving needs. The ordinance, which is likely to be approved by the mayor, requires that employers meet with employees to discuss requests for flexible work arrangements, and to either grant the request or provide a bona fide business reason for rejecting a request.

While neither the Vermont law nor the San Francisco ordinance require businesses to grant an employee’s request for a flexible work arrangement, the mere fact that employers are required to consider the requests is a move in the right direction.

Congresswoman Maloney’s Working Families Flexibility Act – version 2013 – is again languishing in committee. But as worker flexibility laws continue to gain a foothold on American soil, enabling businesses and workers to experience the anticipated benefits in productivity and morale, there is renewed hope for its eventual success.

About Sharon Vinick

Sharon Vinick is the Managing Partner of Levy Vinick Burrell Hyam LLP, the largest women-owned law firm in the state that specializes in representing plaintiffs in employment cases. In more than two decades of representing employees, Sharon has enjoyed great success, securing numerous six and seven figure settlements and judgments for her clients. Sharon has been named by Northern California Super Lawyers for the past five years. Sharon is a graduate of Harvard Law School and UC Berkeley. In addition to being a talented attorney, Sharon is an darn good cook.

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New California law protects immigrant workers from threat of deportation for exercising employment rights 1

Oct

15

2013

By Michael Marsh

Did you know that, nearly one in ten workers in California is an undocumented immigrant? That a majority of undocumented immigrants work in hard-labor, low-wage occupations where health and safety laws are often ignored? That twenty nine percent of California workers killed in industrial accidents are immigrants?

These sobering facts are among those reported in a recent study by the National Employment Law Project, which also found that immigrant workers are often cheated out of their wages. Seventy six percent of those surveyed worked “off the clock” without pay, and eighty five percent did not receive overtime.

How can this be? Unscrupulous employers, who ignore workers’ undocumented status when hiring, use the threat of deportation to intimidate employees from exercising basic workplace rights. This cut-throat behavior not only hurts their employees, it also adversely affects the economic well-being of their law-abiding competitors and of the citizens and lawful permanent residents whose wages and working conditions spiral downward in response.

Late last week, Governor Brown signed into law a bill sponsored by Senator Darrell Steinberg. The new law makes it illegal for an employer to report or threaten to report the immigration or citizenship status of any worker or member of a worker’s family who complains about unsafe working conditions, refusal to pay earned wages, sexual harassment or other illegal employment practices. The law expansively defines “family member” to cover not only immediate family, but also grandparents, aunts, uncles, nieces, nephews and cousins, from such threats.

Penalties for violation are substantial, and may include fines of up to $10,000 per incident, as well as suspension or loss of one’s business license. Furthermore, attorneys who report the immigration status of parties, witnesses or family members of employees involved in an employment rights lawsuit, risk having their law licenses suspended or being disbarred.

With the signing of this law, Governor Brown has made it clear that knowingly hiring undocumented workers, benefiting from the fruit of their labors, and threatening them with deportation for asserting California employment rights will no longer be tolerated. It’s about time.

About Michael Marsh

Michael Marsh is Directing Attorney of the Salinas office of California Rural Legal Assistance, Inc. His practice focuses on working with farmworkers to improve the quality of their working lives.

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Shouldn’t the opportunity to work be more than a DREAM? 2

Oct

4

2013

By Sandra Muñoz

What type of job comes to mind when you think about undocumented workers? If you instantly think gardener, busboy, house cleaner, or maybe cook, then you are very 1999. There is a whole new generation of undocumented workers that are educated, young, technologically savvy and more American than apple pie. There are roughly 1.8 million DREAMers in the United States as the younger generation of undocumented Americans are called. DREAMers are generally those who:

are under the age of 31;
entered the United States before age 16;
have lived continuously in the country for at least five years;
have not been convicted of a felony or a significant misdemeanor or three misdemeanors;
are currently in school, graduated from high school, earned a GED, or served in the military.

The Los Angeles Times recently reported that more and more DREAMers are opting for self-employment as, for example, graphic designers in order to lawfully earn a living.

DREAMers are also earning college degrees in subject matters as diverse as sociology, biology, and the law.

And why wouldn’t they? For many DREAMers, the United States is the only country they know. They are fluent in English, assimilated to United States culture, and should be embraced as the new face of the American dream. And yet there is a significant portion of the population who reject them and refer to them pejoratively as anchor babies.

This short-sighted view does not make economic sense. Since 1982, when the United States Supreme Court held that undocumented immigrant children have a constitutional right to a free public K-12 education, our country has invested in their education. DREAMers who reside in California already pay in-state tuition fees and have access to private and public financial aid for state colleges and universities if they meet certain requirements.

Rather than reject and in some cases deport these DREAMers, shouldn’t we as a society embrace and applaud them? Here is a population of American-educated youth who are fully integrated into our society, who desire to work, earn an honest living, and advance the interests of our society. Why should their right to work be temporary or up for debate every few years in a volatile United States Congress? Granting DREAMers permanent residency and a quick path to citizenship is the right thing to do – not just for them, but for everyone.

About Sandra Muñoz

Sandra C. Muñoz is the owner of the Law Offices of Sandra C. Muñoz located in East Los Angeles. For over 15 years, Sandra has worked on countless cases involving employment discrimination, harassment, and retaliation. Sandra also has extensive experience in cases involving police abuse. She has also been featured in the Daily Journal, written for the California Business Law magazine, participated on various continuing education panels, and taught legal courses for Dowling College.

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100% healed policies = 100% discrimination 3

Oct

3

2013

By V. James DeSimone

For an employee who depends on her job, having to take a disability leave for medical treatment is a frightening prospect. Picture Cynthia, a 29 year old employee of a major restaurant chain, who suffers from severe and intermittent pain in her hips while walking as the result of a condition stemming from childbirth. Despite her pain, she performs her job as a server and event coordinator in an exemplary and enthusiastic manner.

After eight years on the job, however, the pain becomes so great that she schedules surgery on both hips. Unfortunately, she experiences complications, but Cynthia perseveres through subsequent surgeries and a painful rehabilitation, determined to get well enough to return to work and her normal life.

At each step of the way, she keeps her employer updated on her status, confident that she will be able to do her job with minimal restrictions. Finally, after an extended medical leave of absence from work, she is ready to go back to the job she loves and on which she depends.

But there is a stumbling block. She is ready to come back to work and suggests a less physically demanding retail position. However, the Human Resources Director informs her, “don’t come back until you are 100% better,” and Cynthia is never going to be “100% healed.” She will always have limitations that will require some accommodation from her employer in order to perform her job.

However, she is not deterred. In anticipation of returning to work, Cynthia schedules a meeting with her supervisors to discuss the modifications she will need, but they cancel it. Then, out of the blue, she receives a letter from the company terminating her employment. The reason: job abandonment — failure to return from leave.

Cynthia’s experience is not unique. Employee advocates report that termination after a disability leave or a request for accommodation are two of the most frequent reasons why an employee will contact a lawyer. According to the Equal Employment Opportunity Commission (“EEOC”), one of the “hottest areas of EEOC litigation right now involves the agency’s efforts to root out inflexible leave policies – particularly those that supposedly eliminate an employer’s legal obligation to explore and make reasonable accommodations for employees returning from medical leaves of absence.”

The California Commission on Health and Safety and Worker Compensation has published a “Helping Injured Employees Return to Work,” a handbook of practical guidance for businesses. It provides as examples of inappropriate policies:

Requiring that injured employees be released to full duty without restrictions or be healed 100 percent before returning.
Always terminating an employee if he or she is unable to return to full duty after a specific, fixed period.
Delaying discussion of job accommodations until the employee’s condition is permanent and stationary.

Almost all courts that have examined these so-called “100% healed” policies have concluded that they are an outright violation of the Americans with Disabilities Act. When an employee is out on disability leave, companies must communicate with the employee, preferably in person, in what is called the good faith interactive process. All attempts to reasonably accommodate the employee to allow him or her to perform the essential functions of the job should be made.

The rules for reasonable accommodations protect all of us. After all, we never know when one of us or a loved one may become sick or injured and require some form of leave or accommodation. It’s a shame that it sometimes takes a lawsuit to hold companies accountable when they break the rules. But what’s clear is this — when it comes to “100% healed” policies, employers should take heed that the justice system is going to hold them 100% liable.

About V. James DeSimone

Civil rights attorney V. James DeSimone, of V. James DeSimone Law of Marina del Rey, has dedicated his 36-year law career to providing vigorous and ethical representation to achieve justice for those whose civil and constitutional rights are violated. His team represents individuals and families in employment, police misconduct, school abuse, and personal injury cases. You can find out more about their work at www.vjamesdesimonelaw.com

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Finally, overtime coverage for all domestic workers in California!

Sep

30

2013

By Hina Shah

After nearly 75 years of exclusion from federal and state labor protections, domestic workers have finally scored two important victories in their fight for equal treatment. Late last week, Governor Brown signed AB 241, extending California overtime protections to domestic workers who spend a significant amount of time caring for children, elderly and people with disabilities. One week earlier the federal Department of Labor finalized new rules that significantly extend federal minimum wage and overtime protections to domestic workers who care for the elderly and people with disabilities. Together, these actions extend overtime coverage to all domestic workers in California.

These historic changes are a direct result of domestic workers organizing on the local, state, and national level. Over the past eight years, the California Domestic Workers Coalition has built a grassroots, worker-led, statewide movement in California that includes allies from labor, faith groups and employers. Similar efforts by domestic workers in New York and Hawaii have also resulted in legislative victories.

The struggle for equal treatment of domestic workers dates back to the beginning of the regulated workplace. Domestic workers organized a massive letter writing campaign in the 1920s and 1930s. Highlighting slave-like working conditions, they petitioned President Franklin and Mrs. Eleanor Roosevelt, as well as Secretary of Labor Frances Perkins, to cover them under the Fair Labor Standards Act, to no avail. Thirty-six years later, when Congress amended the FLSA to include most domestic workers in minimum wage protections and overtime pay, it exempted live-in domestic workers from overtime and excluded casual babysitters and companions for the elderly or people with disabilities entirely.

In California, a similar letter writing campaign was instituted to get the Wage Board to regulate employment in the home as early as the 1940s. However, when California finally adopted a Wage Order for Household Occupations in 1976, it exempted domestic workers (called “personal attendants”) who spent a significant amount of time caring for children, elderly and people with disabilities. Personal attendants finally gained minimum wage protection in 2001 and have only now gained the right to overtime.

These gains, while significant, are not secure. Because the federal regulations do not take effect until 2015, there is fear that they may be reversed with a change in administration. The California statute is set to expire in 2016, unless the legislature acts to extend it.

One reason for these time limitations is the fear that home care will become unaffordable for many modest to low-income recipients. Available evidence is to the contrary.

Currently, fifteen states provide minimum wage and overtime protection to home care workers and twenty-one states provide minimum wage. According to the Paraprofessional Healthcare Institute, institutionalization rates are not higher in states that provide home care workers with minimum wage and overtime. Furthermore, there is significant cost to high turnover rates (estimated at between 44 and 65%) that is a direct result of low wages and poor working conditions.

While neither AB 241 nor the federal rules are a panacea, domestic workers in California have much to celebrate this month. Today’s home-care industry is staffed by trained professionals. These workers are their families’ breadwinners. The removal of these historical exemptions at both the federal and state level is an important first step in valuing their labor as real work, and recognizing the dignity of those who care for our loved ones.

About Hina Shah

Hina B. Shah is an Associate Professor of Law and Co-Director at the Women’s Employment Rights Clinic (WERC) of Golden Gate University School of Law, addressing employment and labor issues faced by low wage and immigrant workers.

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

Sep

26

2013

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.

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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Is franchising the new frontier for wage theft? 1

Sep

23

2013

By Monique Olivier

The woman who empties your trash in your office, moving quietly around you at your desk as you finish that late night project – did you know there is a good chance she “owns” her own cleaning business?

At least that is what companies like Jani-King, Coverall and Jan-Pro would have you believe, and want the courts to believe as well. Their business model relies upon the fiction that these janitors — having paid thousands of dollars in cash up front to buy the right to clean — will reap the rewards of being entrepreneurs.

In fact, these janitors do not even control their own wallets, let alone their professional destinies. A key distinction between a “janitorial franchise” and, say, a McDonald’s or if for example one gets a service station for sale, is that the janitors have no right to control the stream of income they recognize. Franchisors like Jani-King hold all of the cleaning contracts and grant or refuse permission to franchisees to clean particular accounts. They also dictate the terms of the accounts – when a janitor will clean, what a janitor will clean and how much the janitor will be paid for each cleaning job.

Sound suspiciously like the janitors are employees? Several courts and experts think so, and cases decided in the realm of cleaning franchise litigation are being closely watched by business and workers alike.

A case against Jani-King currently pending in the federal Ninth Circuit Court of Appeals, Juarez v. Jani-King International, may provide guidance as to whether these so-called “franchisees” are, in fact, employees under California law. In Massachusetts, a federal district court already ruled in favor of similar workers, deciding that classifying them as independent contractors instead of employees was against the law. Another Massachusetts court, in a case filed against Coverall North America, not only concluded that its cleaning worker “franchisees” were employees under the Massachusetts Independent Contractor Law, but pointed out the similarity between its self-described “franchising business” and a Ponzi scheme.

Boston University’s David Weil agrees. According to his excellent research, janitorial franchisors’ profitability (which can be upwards of 40%) depends on a steady stream of fees from new “franchisees,” regardless of whether there is sufficient work to sustain the ones it already has.

Recently, the National Employment Law Project weighed in on other widely recognized abuses by so-called “franchise” cleaning companies in the commercial cleaning industry. In a friend-of-the-court brief filed in the Juarez case on behalf of a coalition of workers’ rights organizations, NELP reviews the janitorial industry’s abysmal scorecard on fair pay and working conditions, arguing that janitorial franchising schemes enable rampant non-compliance with basic labor standards.

Even the U.S. Department of Labor has gotten into the act. Its 2012 proposed budget targets misclassification of workers as an important enforcement priority, noting that the janitorial industry has a higher rate of violations than many other industries.

What it comes down to is this – sophisticated corporations, dissatisfied with earning money the old-fashioned way, are tricking unskilled low-wage workers into paying thousands of dollars for the privilege of cleaning America’s office buildings in the futile pursuit of a fake American Dream. The time is now for the courts and the government to rein in these abuses.

About Monique Olivier

Monique Olivier is a partner at Duckworth Peters Lebowitz Olivier LLP where she represents individuals and classes in employment, civil rights and consumer cases at the trial and appellate levels. She frequently speaks on and writes about class action and employment issues. She also makes a mean pulled pork.

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Getting a job should not require giving up an important constitutional right 1

Sep

20

2013

By Nicolas Orihuela

Imagine if a private individual, paid by the wealthier or well-connected party in a dispute, got to decide if the government had the right to curtail your free speech, or if an employer could terminate you because of your religious beliefs, or if the police had the right to abuse your fellow citizens, would you want this system of justice? Of course not — the deck would be stacked against you at the start.

That’s what happens to employees who are forced to sign an arbitration agreement, which is that buried clause in the employment contract that requires all employment disputes to be resolved through arbitration as opposed to the traditional civil justice system. In a recent study concerning employment arbitrations before the American Arbitration Association, one of the largest arbitration service providers in the country, the win rate of employees was a meager 21.4% (compared to a win rate of 36.4% in federal court and a win rate of 59% in California state court). That same study revealed that in arbitration employees tend to obtain smaller awards compared to employees who prevail in jury trials. Also, as the paying customer of these arbitrators, employers tend to improve their win rates in arbitration by using the same arbitration service provider multiple times (known as the “repeat player” effect). Under one analysis, the win rate among employees drops from 23.4% to 12.0% when there is a repeat employer-arbitrator pairing.

In today’s world where arbitration agreements are becoming ubiquitous, getting a job now often means signing away your Seventh Amendment right to a jury trial. The founders of our country, who knew this right was vitally important to a democratic republic, wrote it into the original Bill of Rights, along with the right to freedom of speech, the right to bear arms, and the right to an attorney in a criminal case. The Seventh Amendment was no accident. The right to have your peers sit in judgment of your civil case was considered indispensable to a functional democracy and a powerful check on the government and the well-connected.

In the courts, employees are not going down without a fight. Many battle their employers for the right to be heard in civil court. But victory is not assured.. The question of whether the courts will respect the Seventh Amendment or side with employers’ one-sided agreements is still undecided. The question may soon come to a head in the California Supreme Court.

Recently, the California Supreme Court granted review in two cases that exemplify what is wrong with arbitration agreements forced upon employees. In Leos v. Darden Restaurants, Inc., a female employee was subjected to workplace sex harassment. When she filed a complaint in civil court, the employer argued that an arbitration agreement forced upon her at the beginning of her employment required her to submit her claims to arbitration. As is typical of many, it favored the employer, who retained the right to amend or modify the agreement at any time, placed barriers on the employee’s ability to obtain information essential to reveal evidence of wrongdoing, and exempted arbitration claims that only the employer could pursue against the employee. While the Court of Appeal agreed that the arbitration agreement was unfairly forced upon the employee, it still concluded that the employer was entitled to enforce it. If this is not unfair, then what is?

Leos is to be decided together with Baltazar v. Foreover 21, Inc., a sexual and racial harassment case involving a similar forced arbitration agreement: The employee was told, “sign it, or no job.” As in Leos, the agreement covered only claims that an employee is likely to bring (e.g., discrimination claims, wage and hour claims, etc.).

Both Leos and Baltazar represent the typical scenario that employees face on the first day of a new job. These court of appeal rulings represent a troubling trend towards overlooking the real world disparities in power that produce unfair arbitration agreements. While both courts agreed that the agreements were unfairly forced upon the employee, they still held that they were enforceable contracts.

In both cases what is at stake is much larger than contract interpretation and defenses to contract formation. What is at stake is preserving employees’ Seventh Amendment right to a jury trial and preventing the unfair and biased process of forced arbitration.

It’s now up to the California Supreme Court finally to say what is obvious — forced arbitration agreements are an abuse of power that violate employees’ constitutional rights — and to act accordingly, by refusing to enforce them.

About Nicolas Orihuela

Nicolas Orihuela is a founding partner of the employment law firm of Hurwitz, Orihuela & Hayes, LLP and has been practicing since 2002. He represents employees in race discrimination, sex harassment, wrongful termination and disability discrimination related cases. He also handles wage and hour cases.

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Swipe paycard, have wages swiped

Sep

17

2013

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.

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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