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As a result of a November 30, 2009 decision, the California Supreme Court (the Court) has now paved the way for employees to more easily establish harassment claims against individual supervisors.
As a result of a November 30, 2009 decision, the California Supreme Court (the Court) has now paved the way for employees to more easily establish harassment claims against individual supervisors.
Toward the end of her 25-year customer service career at McKesson Corporation, Roby began experiencing unanticipated, temporary “panic attacks” which caused her to be absent from work unexpectedly. Roby’s immediate supervisor, Karen Schoener, openly expressed her displeasure with Roby’s poor attendance record. Compounding this problem, Roby’s medication gave her unpleasant body odor and she also developed a nervous disorder causing her to dig her fingernails into her arms, producing unpleasant open sores. Schoener made disparaging remarks about Roby’s body odor in front of other workers and she also called Roby “disgusting” because of her open sores and excessive sweating. Schoener reprimanded Roby in front of her coworkers and spoke about her job in a demeaning manner. Schoener also openly ostracized Roby, ignored her at staff meetings, refused to give her holiday gifts or travel trinkets, and excluded Roby from office parties by ordering her to cover the office telephones. Roby complained to senior management about Schoener’s conduct but to no avail.
McKesson suspended Roby pending an investigation into her excessive absences and then terminated her shortly thereafter. After her termination she depleted her savings, lost her medical insurance, developed agoraphobia (anxiety in public places) and became suicidal.
Following a jury trial against defendants McKesson and supervisor Schoener for wrongful employment termination, discrimination, harassment and failure to accommodate, the trial court rendered judgment of approximately $3.5 million against McKesson and $500,000 against Schoener. In a separate verdict, the jury found punitive damages of $15 million against McKesson and $3,000 against Schoener.
Both defendants appealed. The appellate court held that Roby’s evidence was insufficient to support the harassment verdict, stating that a plaintiff may not use personnel management actions as evidence in support of a harassment claim. The appellate court thus threw out the harassment verdict as to Schoener and also reduced Roby’s award to $1.405 million plus $2 million in punitives.
The California Supreme Court disagreed, ruling that the appellate court erred when it divvied up Roby’s evidence between her harassment claim and her discrimination claim.
Under California law, discrimination focuses on explicit changes in the terms, conditions or privileges of employment, that is, changes involving some official action taken by the employer, such as hiring, firing, failing to promote, adverse job assignment, or change in pay or benefits.
Harassment, on the other hand, focuses on situations in which the workplace’s social environment becomes unacceptable because the harassment suffered on the job communicates an offensive message to the victim.
Even though discrimination and hostile work environment harassment are different legal constructs, evidence of discrimination is not necessarily different from evidence of harassment. The Court stated that the evidence brought forth to establish discrimination and harassment claims can overlap and thus “acts of discrimination can provide evidentiary support for a harassment claim by establishing discriminatory animus on the part of the manager responsible for the discrimination, thereby permitting the inference that rude comments or behavior by that same manager was similarly motivated by discriminatory animus.”
Because the appellate court had incorrectly separated out and disregarded the “business and management” evidence when determining whether Roby was unlawfully harassed, the Supreme Court reinstated the jury’s harassment verdict against McKesson and Schoener.
Thus, when evaluating whether a supervisor has engaged in unlawful harassment in the workplace, the trial court (and jury) need to consider all of the supervisor’s conduct, even conduct that would ordinarily be construed as “official” acts made on the company’s behalf under the supervisor’s managerial duties and functions. Managerial acts which previously could only support a discrimination claim may now be used to prove individual harassment liability against the acting supervisor. Therefore, plaintiffs may have an easier time defeating summary judgment and bringing their case to trial since they are now permitted to introduce a broader range of evidence in support of their harassment claim.
If you have any questions, please contact me or any of our other employment law attorneys. Best, Cindy Bamforth
Although well-established law in California holds that an employer may not retaliate against an employee who has a valid wage claim, a November 30, 2009 appellate court ruling also protects employees against retaliation formistakenlybelieving they have a valid wage claim.Barbosa v. IMPCO Technologies, Inc.(2009 Westlaw 4227462).
Although well-established law in California holds that an employer may not retaliate against an employee who has a valid wage claim, a November 30, 2009 appellate court ruling also protects employees against retaliation for mistakenly believing they have a valid wage claim. Barbosa v. IMPCO Technologies, Inc. (2009 Westlaw 4227462).
Former employee Manuel Barbosa sued employer IMPCO for wrongful employment termination after IMPCO fired him for allegedly falsifying his time card. According to his testimony at trial, Barbosa, an hourly team leader of eight other workers, became convinced after talking with two of his group’s workers that he and others were missing two hours of overtime. Barbosa approached the company’s payroll administrator and informed her that most of his group’s workers were not paid that overtime, possibly because the recently-installed time clock was malfunctioning (the previous time clock system was known to make timekeeping mistakes). After Barbosa’s supervisor said he trusted Barbosa and approved the overtime pay, the payroll administrator paid all eight employees in Barbosa’s group the additional two hours of overtime.
Upon further investigation into the accuracy of the new time clock, the payroll administrator and human resources manager reviewed security tapes against the time clock records which effectively determined Barbosa and the others could not have worked the claimed two hours of overtime. Additionally, one of the group workers informed the human resources manager that she should not be paid for extra overtime because she had not worked those hours.
Barbosa was then questioned before company management officials. When asked if he was sure he and his group worked overtime as he claimed, he said yes. After showing Barbosa the security gate report, he said he was confused and he offered to pay the extra overtime back to the company. However, the company refused his offer and terminated Barbosa for falsifying time card records. Barbosa testified the stated reason for termination was “cheating the company.”
After Barbosa finished putting on his evidence at trial, IMPCO successfully moved to dismiss his case. Barbosa appealed.
The appellate court reversed, ruling that (a) public policy protects Barbosa from being terminated if he made a good faith claim to overtime; and (b) Barbosa presented sufficient evidence at trial to support a jury finding that the overtime claim was indeed made in good faith.
The appellate court determined that when an employee exercises his or her legal right to overtime wages out of a reasonable good faith belief he or she is entitled to those wages, he is still protected from employer retaliation even if the employee later discovers he is wrong. Here, Barbosa gave evidence showing he had a reasonable good faith belief he was entitled to the two hours’ of overtime. The previous time clock system was known to be faulty, the new system had been installed less than a month prior to this incident, his co-workers convinced him the overtime was due and unpaid, and he in turn convinced his supervisor. Barbosa also testified he was confused.
IMPCO argued Barbosa was terminated for misrepresenting that he worked overtime and cheating his employer. The appellate court concluded IMPCO “misses the point” because if Barbosa proves to the jury he had a reasonable good faith belief in his right to overtime, then it’s impossible to also conclude he attempted to cheat IMPCO. Thus, the case should have been submitted to the jury for deliberation.
According to this holding, public policy requires that employees should be able to openly question their employer regarding pay-related matters without fear of retaliation, even if the employee’s pay concerns are ultimately incorrect.
If you have any questions, please contact me or any of our other employment law attorneys. Best, Cindy Bamforth, Esq.
The Equal Employment Opportunity Commission (EEOC) has revised its “Equal Employment Opportunity is the Law” poster to address two new federal employment discrimination laws:
The Equal Employment Opportunity Commission (EEOC) has revised its “Equal Employment Opportunity is the Law” poster to address two new federal employment discrimination laws:
Employers covered by federal Title VII and ADA anti-discrimination laws (typically 15 or more employees) will need to update their employee notice posters to reflect these new laws by November 21, 2009.
For private employers:
DISABILITY
Title I and Title V of the Americans with Disabilities Act of 1990, as amended, protect qualified individuals from discrimination on the basis of disability in hiring, promotion, discharge, pay, fringe benefits, job training, classification, referral, and other aspects of employment. Disability discrimination includes not making reasonable accommodation to the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, barring undue hardship.
GENETICS
Title II of the Genetic Information Nondiscrimination Act of 2008 protects applicants and employees from discrimination based on genetic information in hiring, promotion, discharge, pay, fringe benefits, job training, classification, referral, and other aspects of employment. GINA also restricts employers’ acquisition of genetic information and strictly limits disclosure of genetic information. Genetic information includes information about genetic tests of applicants, employees, or their family members; the manifestation of diseases or disorders in family members (family medical history); and requests for or receipt of genetic services by applicants, employees, or their family members.
The EEOC Poster Request Form is available on-line at EEOC, and provides several ways for employers to comply with the law:
Again, the new posting is mandatory effective November 21, 2009. In addition, employers can order the new 2010 California and federal labor law poster from the California Chamber of Commerce online. The EEOC is in the process of revising its EEOC regulations and accompanying interpretive guidance in order to implement the ADA Amendments Act of 2008 (ADAAA) and include the Genetic Information Nondiscrimination Act of 2008 (GINA) (http://archive.eeoc.gov/policy/regs/index.html).
If you have any questions on these or any other employment laws, please contact me or any of our other employment law attorneys. Best, Bob Edwards
A November, 2009 California Supreme Court ruling affirmed that an incentive stock option plan which had not fully vested upon plaintiff employee’s resignation did not constitute earned but unpaid wages and the employer could lawfully require the employee to forfeit the stock and the salary used to purchase the stock.Schachter v. Citigroup, Inc.(2009) 47 California Reports 4th610.
A November, 2009 California Supreme Court ruling affirmed that an incentive stock option plan which had not fully vested upon plaintiff employee’s resignation did not constitute earned but unpaid wages and the employer could lawfully require the employee to forfeit the stock and the salary used to purchase the stock. Schachter v. Citigroup, Inc. (2009) 47 California Reports 4th 610.
Plaintiff David Schachter worked as a stockbroker for Citigroup from April 28, 1992 to March 29, 1996. He voluntarily chose to participate in a company-offered incentive compensation plan which provided employees with shares of restricted stock options at a reduced price in lieu of a portion of that employee’s annual cash compensation. Per this compensation policy, employees could elect to receive anywhere from 5% up to 25% of their total compensation in the form of restricted stock.
Restricted stock could not be sold, transferred, pledged or assigned for a two-year period; however, participating employees had the right to vote and receive regular dividends on such shares during the restricted period.
If an employee remained with the company for the two years following the purchase of the restricted stock, the title to the shares vested fully without restriction. However, if an employee quit or was terminated for cause before the end of the two-year period, the employee was forced to forfeit his or her restricted stock as well as the percentage of annual income allocated for purchase of the restricted stock. If an employee was involuntarily terminated without cause, the employee forfeited his or her restricted stock, but received a cash payment equivalent to the portion of annual compensation which had been paid in the form of such forfeited restricted stock.
Schachter elected to receive 5% of his total compensation in restricted stock during 1995 and early 1996. He then resigned from Citigroup in March, 1996. Because his resignation occurred within the two-year vesting period, he forfeited all his shares of stock and did not receive a cash payment equal to the 5% compensation used to purchase those shares.
In May, 1998, Schachter filed a class action lawsuit against Citigroup alleging that the restricted stock purchase plan (the Plan) violated California Labor Code sections 201 and 202 which require the employer to promptly pay all earned wages upon termination or resignation. He also alleged the Plan’s forfeiture provision violated Labor Code section 221, which prohibits an employee from returning wages to an employer.
After eleven years of protracted litigation, the California Supreme Court (the Court) ruled that the Plan’s forfeiture provision did not violate California labor law.
First, the Court discussed the term “wages,” which it broadly construed to include not only monetary compensation but also other benefits to which an employee is entitled as part of his or her overall compensation. This can include accrued vacation pay which “vests” throughout a given year as well as bonuses and profit-sharing plans.
The Court then concluded the restricted stock constituted a “wage” under California law. However, when Schachter voluntarily signed the Plan election forms he understood that the restricted stock would not fully vest for two years. He chose not to remain with the company for the two year period and thus the Court ruled he did not earn and had no right to receive either the restricted stock or the compensation used to acquire it. According to the terms of the Plan, no earned, unpaid wages remain outstanding upon voluntary resignation. In other words, the only thing the company hadn’t paid to Schacter was something he never earned, i.e. fully vested company stock.
The Court quoted the colorful truism, “He who shakes the tree is the one to gather the fruit” and concluded Schachter was not entitled to “gather the fruit” since he failed to perform the condition necessary to do so – i.e. remain employed with the company for two years after the stock purchase.
Further recommendations: Companies that offer their employees incentives such as incentive stock options, commissions and bonuses should consult legal counsel to ensure these plans are properly structured and documented.
If you have any questions on these or any other employment laws, please contact me or any of our other employment law attorneys. Best, Cindy Bamforth
All U.S. employers must complete and retain a Form I-9 for each individual hired for employment in the U.S., including citizens and noncitizens. Revised August 7, 2009, the new Form I-9 includes an updated list of acceptable documents that employees must present upon hiring. The new form includes a note that all documents presented to establish identity and/or ability to work in the U.S. must not be expired. The new Form I-9 and new U.S. Citizenship and Immigration Services (USCIS) Handbook f
All U.S. employers must complete and retain a Form I-9 for each individual hired for employment in the U.S., including citizens and noncitizens. Revised August 7, 2009, the new Form I-9 includes an updated list of acceptable documents that employees must present upon hiring. The new form includes a note that all documents presented to establish identity and/or ability to work in the U.S. must not be expired. The new Form I-9 and new U.S. Citizenship and Immigration Services (USCIS) Handbook for Employers are available online at http://www.uscis.gov/i-9.
In addition, as of September 8, 2009, federal contractors and subcontractors must use the E-Verify system operated by the U.S. Department of Homeland Security in partnership with the Social Security Administration. The E-Verify system compares Form I-9 document information against federal government databases to verify employment eligibility. Other employers may also use this verification system.
For more on the E-Verify system please visit the USCIS website at http://www.uscis.gov/portal/site/uscis.
If you have any questions on these or any other employment laws, please contact me or any of our other employment law attorneys. Best wishes, Bob Edwards
During these challenging financial times some employers are finding they need to temporarily reduce costs, including employee payroll. Fortunately, theCalifornia Department of Labor Standards Enforcement (DLSE)has recently issued an opinion letter allowing employers to reduce exempt employee salaries in exchange for a shortened workweek. This new August 19, 2009 opinion letter flatly contradicts the DLSE’s prior opinion letter on the same subject.
During these challenging financial times some employers are finding they need to temporarily reduce costs, including employee payroll. Fortunately, the California Department of Labor Standards Enforcement (DLSE) has recently issued an opinion letter allowing employers to reduce exempt employee salaries in exchange for a shortened workweek. This new August 19, 2009 opinion letter flatly contradicts the DLSE’s prior opinion letter on the same subject.
The DLSE’s new opinion states that an employer seeking payroll savings may properly shorten the workweek from five days to four days and reduce exempt employee salaries by a proportionate 20%. The new DLSE letter specifically states an employer may do this without undermining the exempt status of affected employees under federal or California law. (In its prior opinion letter, the DLSE originally opined that it would not be acceptable to tie an exempt employee’s compensation to the amount of hours or days worked).
The new opinion letter cautions employers that this change in California employee pay is primarily allowed for interim reductions due to temporary economic necessity during which reduction in the work schedule is only a short-term stopgap measure. Furthermore, the affected employees must still earn a monthly salary equivalent to no less than twice state minimum wage for full-time employment. Lastly, the affected employees must continue to satisfy the duties test for the applicable exemption which pertains to their position.
If you have any questions, please contact me or any of our other employment law attorneys.
Oddly enough, an employee may walk off the job and then sue his/her employer for wrongful termination. Even though the employer did not technically fire the employee, the issue is whether employee rights permit that resignation to be treated under California law as a “constructive discharge.”
Oddly enough, an employee may walk off the job and then sue his/her employer for wrongful termination. Even though the employer did not technically fire the employee, the issue is whether employee rights permit that resignation to be treated under California law as a “constructive discharge.”
Per the key California Supreme Court case defining and analyzing constructive discharge, Turner v. Anheuser-Busch, an employee must prove, by the “more likely than not” (preponderance of the evidence) standard, that the employer either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee’s resignation that a reasonable person in employee’s position would be compelled to resign.
Employees are required to notify someone in a position of authority of their plight so that employers unaware of any wrongdoing may correct a potentially destructive situation that may be affecting workplace rights. Mere existence of illegal workplace conduct does not, without more, make employment conditions intolerable to a reasonable employee.
Also, the adverse working conditions must be unusually aggravated or amount to a continuous pattern before the situation will be deemed “intolerable,” such as a repeat pattern of discriminatory acts. Conditions, such as employment discrimination or workplace harassment must be sufficiently extraordinary and wrongful to overcome the normal motivation of a reasonable employee to remain gainfully employed.
An employee cannot simply “quit and sue” claiming his or her reasons to quit were automatically tantamount to being constructively discharged. The proper focus is on whether the employer coerced the employee’s resignation, not whether it was simply one out of a number of viable options for the employee.
June 15, 2009
Federal and state laws currently do not require California employers to provide employees with paid sick leave unless the employer is located in San Francisco County. However, as a practical matter, many employers grant sick leave, often in the form of an annual allotment of paid sick days. Where employers provide paid sick time, employers must permit an employee to use one-half of his or her annual sick leave allotment, once it has actually accrued, to care for a sick child, spouse, parent or
Federal and state laws currently do not require California employers to provide employees with paid sick leave unless the employer is located in San Francisco County. However, as a practical matter, many employers grant sick leave, often in the form of an annual allotment of paid sick days. Where employers provide paid sick time, employers must permit an employee to use one-half of his or her annual sick leave allotment, once it has actually accrued, to care for a sick child, spouse, parent or domestic partner (so-called “kin-care”). See Labor Code Section 233(a).
Once an exempt employee has exhausted his or her paid sick leave, the employer may begin to deduct from the exempt employee’s salary for absences due to sickness or disability in increments of full working days. See the California Division of Labor Standards Enforcement (DLSE), Enforcement Policies and Interpretations Manual, available online at http://www.dir.ca.gov/dlse/Manual-Instructions.htm.
Unlike vacation pay, sick pay is not a so-called “accruing benefit.” Unused sick pay is not carried over into the next calendar year. Employers should state in their sick leave policies that employees are not paid for any sick time unused at the end of a calendar year or in the event of termination for any reason.
Sick leave policies should also state the employer reserves the right to require the employee to demonstrate the medical necessity for sick leave by his or her doctor’s written confirmation. Employers may also require a doctor’s written confirmation that an employee is able to return to work (a) without posing a safety or health risk to that employee or other workers; and (b) with the ability to perform the essential functions of his or her job with or without reasonable accommodation.
On May 18, 2009, Rep. Rosa DeLauro of Connecticut introduced a bill called the Healthy Families Act (H.R.2460) in the U.S. House of Representatives. The Act would require employers with 15 or more employees to provide at least one hour of paid sick time for every 30 hours worked. This bill is in the first step in the legislative process and has been referred to committee. For more information on H.R.2460 please see http://www.opencongress.org/bill/111-h2460/show.
California law authorizes an alternative work week schedule (AWS) of workdays exceeding eight hours without overtime pay if certain criteria are met. Classically, an alternative work schedule will be four 10-hour days, with three days off. Health care offices are common candidates for an AWS. Such flexible alternative work schedules require full advance disclosure to affected employees and the affirmative vote of at least two-thirds of those employees in a secret ballot election before perfor
California law authorizes an alternative work week schedule (AWS) of workdays exceeding eight hours without overtime pay if certain criteria are met. Classically, an alternative work schedule will be four 10-hour days, with three days off. Health care offices are common candidates for an AWS. Such flexible alternative work schedules require full advance disclosure to affected employees and the affirmative vote of at least two-thirds of those employees in a secret ballot election before performance of the work.
Effective May 21, 2009, California Assembly Bill No. 5 amended this law (Labor Code section 511) to permit an employee to opt-out of an AWS passed by the majority of his/her co-workers. This allows such worker to retain a regular five 8-hour days per week schedule. The bill also authorizes employees, with the consent of their employer, to move on a weekly basis from one work schedule to another on the adopted menu of work schedule options.
In addition, the California Division of Labor Standards Enforcement (DLSE) issued a March 23, 2009 opinion letter (online at http://www.dir.ca.gov/dlse/opinions/2009-03-23.pdf ) stating that under some circumstances, an alternative workweek schedule may be in place for only part of the year, for example rotating between a schedule of four 9-hour days and one 4-hour day during the summer months and five 8-hour days during the rest of the year.
Employers must still follow the detailed provisions of the California Industrial Welfare Commission (IWC) Wage Orders (online at http://www.dir.ca.gov/iwc/wageorderindustries.htm) when implementing or revising alternative workweek schedules and should consult with legal counsel about this and applicable California overtime laws before doing so.
If you have any questions on these or any other employment laws, please contact me or any of our other employment law attorneys. Best wishes, Bob Edwards