On October 3, 2018, the Labor Commissioner’s Office announced that it has cited Sanamluang Café in North Hollywood, Orchid Thai Cuisine in Arcadia, and Orchid Thai in Baldwin Park, a total of $1,065,646 for wage theft violations.

The Labor Commissioner’s Office launched an investigation into the restaurants after receiving complaints of underpayment from non-profit organizations representing the restaurant workers. Investigators found that the restaurants paid the workers a flat fee of $45-50 for 10-11.5 hour shifts with no meal and rest breaks. These average $5/hour payments were well below minimum wage. The owners also failed to pay overtime wages, split shift premiums, and meal and rest period premiums.

“These conditions – long hours with no breaks and subminimum wages – are classic examples of wage theft,” Labor Commissioner Julie A. Su said, “and employers who make their profit by breaking the law will be held accountable.”

The Commissioner’s Office cited Snamluang Thaifood, Inc. and its owners $708,457 for wage violations against nine workers, and $125,250 in civil penalties imposed because this company continued ignoring wage minimums even after meeting with the investigators.

Orchid Thai Cuisine in Arcadia and its owners were cited $307,133 for wages owed to 11 workers and $100,750 in civil penalties. Orchid Thai in Baldwin Park and those same owners must pay $50,056 to two workers and $35,800 in civil penalties.

Labor Code section 558.1 makes owners, directors, officers, and managing agents of California employers liable for violations of minimum wage and hours and days of work. Because the cited companies and their owners are all liable for all of the amounts cited, both their personal and company assets can be levied if they do not pay these citations. Those who own and run companies should make certain they are paying employees correctly to avoid such liability.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin
November 9, 2018

This past spring, the California Supreme Court inexplicably tossed out its decades-old “multi-factor” independent contractor test in favor of a far more stringent three-part “ABC” test. (Dynamex Operations West, Inc. v. Superior Court). See, Independent Contractor Status in California Now Falls Under Radically Different Rules (June, 2018).

Under the new test, a worker is automatically presumed to be an employee unless the hiring company can prove each part of the ABC test:

1. The worker is free from the hirer’s control and direction in connection with the performance of the work, both under the contract and in fact;
2. The worker performs work outside the usual course of the hiring entity’s business; and
3. The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.

In Garcia v. Border Transportation Group, a California appellate court recently confirmed the ABC test only applies to alleged California Wage Order violations (e.g., minimum wage and overtime issues) and that the traditional “multi-factor” test will continue to apply to all other order claims such as expense reimbursement, wrongful termination, and waiting time penalties.*

The California Chamber of Commerce (Chamber) has spearheaded the “I’m Independent Coalition” to urge state lawmakers to enact more reasonable legislation against the Dynamex ruling. The Chamber also commissioned Beacon Economics, LLC to report on Dynamex’s financial impact in California.

Until the legislature decides to act, businesses who regularly utilize independent contractors should, together with knowledgeable legal counsel, carefully evaluate those working relationships. For example, affirmative answers to any of the following questions might require reclassifying a worker as an employee:

Part A:

• Have the parties neglected to put their agreement in writing?
• Does the hiring company control or have the right to control the work its contractor performs?
• Does the contractor work out of the hiring company’s business premises?
• Does the hiring company require the contractor to follow the same company procedures and manuals as its employees?

Part B:

• Is the work performed by the contractor similar, identical or fundamental to the hiring entity’s core business?
• Does the contractor provide services in a role comparable to that of an employee?
• Is the contractor ordinarily viewed by others as working for the hiring company?
• Does the hiring company have employees who perform substantially similar work as its contractors?
• Does the company require its contractors to wear company uniforms or logos?

Part C:

• Does the contractor work exclusively for the hiring company?
• Has the contractor failed to create separate and distinct business cards or obtain a business telephone number, website address, and/or marketing and promotional materials?
• Has the contractor omitted to advertise its services to the general public?
• Is the contractor not currently established in an independent business?

*Note: The Garcia court also held that part C requires an existing, not potential, showing of independent business operation.

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth
November 9, 2018

The California Association of Work Experience Educators (CAWEE) is a state-wide professional association that since 1965 has been providing training and education on child labor laws and employment laws compliance, helping their members in turn to prepare their students for life within the workforce.

On October 4, 2018, our partner Cindy Bamforth participated in CAWEE’s fall conference in Burbank. Cindy presented vital information to educators and career specialists on job interview do’s-and-don’ts. She also covered legal perspectives on topics such as:

• Protected Classes
• Job Applications
• California Salary History
• California Criminal History

The lively, interactive presentation was well received by the educators, with many questions back to Cindy. She equipped the attendees with further knowledge of state and federal employment laws and how they apply to real-life work experience.

CAWEE officials remarked that Cindy’s presentation added a valuable input to the conference with her plain-language approach to a “scary” subject.

See also:

• Job Interview Errors to Avoid (April, 2018)
• California Ready to Enforce Greatly Expanded Workplace Laws (December, 2017)

November 1, 2018

Contending employers must walk an extra mile to accommodate emotionally troubled workers, the Equal Employment Opportunity Commission (EEOC) has announced settlement of its disability discrimination lawsuit against Triton Management Services, LLC (Triton). See also, San Diego Tribune, October 10, 2018.

In March 2016, while out-of-state, Triton’s attorney legislative affairs director, sent “incoherent” texts to Triton, announcing she was quitting and was bipolar. Soon after, intending to retract the resignation, the employee’s husband contacted the company claiming she was ill and hospitalized. Nevertheless, an ensuing company letter accepted her resignation. Triton then declined to reconsider despite a follow-up doctor’s note confirming the illness and requesting the company approve medical leave.

Contending the employer had failed to consider reasonable accommodation, the EEOC filed suit alleging violation of the Americans with Disabilities Act of 1990 (ADA). Triton has now settled, agreeing to pay $110,000 for emotional distress and to train its employees and revise its written policies to be ADA-compliant.

Anna Park, regional attorney for the Los Angeles EEOC District Office, commented that "It is important for employers not to let stereotyping dictate how they respond to individuals with physical or mental disabilities in the workplace." She commended “Triton for resolving this case."

The EEOC’s press release noted that ADA compliance is a priority issue in its current Strategic Enforcement Plan. This is another reminder that employers need to take seriously their employees’ claimed or observable physical and mental disabilities and to work to accommodate them if possible. It is easier and less costly to get it right than to have a government agency come in and force a company to do so.

See also:

• What’s That Again? (October, 2018)
• Don’t Flunk the Reasonable Accommodation Test (May, 2018)
• Employer Duties to Reasonably Accommodate Worker Disabilities (May, 2015)

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin
October 26, 2018

All Hallows’ Eve. That spooky time of year when witches, vampires and zombies roam the land. From management’s perspective, however, the scariest Halloween costumes are those which are too revealing or are otherwise offensive to others in the workplace. For example, earlier this year a lingerie website began selling a sexed-up “Brave Red Maiden” costume -- a much skimpier version of the clothing worn by oppressed female characters in “The Handmaid’s Tale.” (The website stopped selling it after receiving significant backlash online).

Yet, a little constructive fun does have its place. Properly managed, workplace holiday celebrations can build teamwork and morale. Best practices dictate that an employer should:

• Plan holidays celebrations in advance to minimize improper conduct.
• Distribute an email or a notice reminding that employees should dress and act professionally.
• Never require employees to dress up or participate in Halloween parties.
• Require appropriate dress at all times in the workplace, even during holidays, to ensure employees do not wear insulting or offensive costumes against other races, cultures, religions, etc.
• Expect managers and supervisors to set good examples in the workplace.
• Do not allow alcohol consumption at company celebrations in order to avoid liability for physical injuries incurred or sexual harassment committed by inebriated party-goers.
• Train managers how to properly enforce the company’s dress code policy without making an employee uncomfortable, such as when discussing whether a female employee’s low-cut top is too revealing.

Happy Halloween!

See also:

• Dress for Success (September, 2018)
• Holiday Season Office Party That’s Nice, Not Naughty (November, 2016)
• Office Holiday Survival Guide (November, 2010)

Cindy Bamforth
October 23, 2018

In response to the #MeToo and #WeSaidEnough movements and effective January 1, 2019, California Code of Civil Procedure (CCP) 1001 bans settlement agreements prohibiting public disclosure of “factual information” related to any civil lawsuit or agency complaint alleging sexual assault, sexual harassment, and workplace or housing-related harassment, discrimination or retaliation claims related to sex. Courts may not approve settlements that violate this prohibition.

New section 1001 also permits settlement agreements to shield, at the claimant’s request, his or her identity and “all facts that could lead to the discovery” of that identity, so long as a government agency or a public official is not a party to the agreement.

In apparent recognition of the chilling effect otherwise created, section 1001 specifically does not prohibit confidentiality of an amount paid in settlement.

California has also enacted CCP 1670.11, making void and unenforceable settlement provisions that prevent a party from testifying on alleged criminal conduct or sexual harassment when required or requested to attend by a “court order, subpoena, or written request from an administrative agency or the legislature.”

Thus, when settling litigation over any such claims, the parties must of course fashion their agreements for consistency with these new sections 1001 and 1670.11.

See also:

• Additional Protections from Serial Harassers (July, 2018).
• Speaking Out Against Sexual Harassment (December, 2017)
• The State of Workplace Harassment and Retaliation Claims (July, 2017)

Helena Kobrin
October 19, 2018

California employers must not discriminate against workers based on political activities, affiliations or speech. Particularly during an election season, employers should re-familiarize themselves with these laws:

• California Labor Code section 1101 bans employers from making, adopting or enforcing any rules or policies that: (i) forbid or prevent employees from engaging or participating in the political realm, including running for public office; or (ii) control or direct the political activities or affiliations of their employees.
• California Labor Code section 1102 prohibits employers from coercing, influencing or attempting to coerce or influence their employees into any particular course or line of political action or activity. For example, an employer may not threaten to fire a worker for announcing his or her support for a candidate running for public office.
• California’s Ralph Civil Rights Act prohibits acts or threats of violence because of an individual’s political affiliation.
• The federal National Labor Relations Act (NLRA) allows union and nonunion employees to discuss labor issues without repercussion, such as how to improve minimum wage thresholds, ensure a safer work environment, obtain more sick pay benefits and permits them to endorse political candidates who support favorable labor conditions.

Employers can and should carry clear policy that respects such employee political activity as long as it does not interfere with productive work activities. However, the policy should be careful to distinguish workplace conversations over wages, benefits or other employment as outside any such limitations.

Needless-to-say, management should also take close care in dealing with such situations, documenting thoroughly when and how employee political speech has or has not unreasonably interfered with company operations.

As long as employers abide by the above laws, they may communicate their own political beliefs to their workers. See, California Chamber of Commerce’s Political Communications to Employees for additional guidance on making such employer-originated communications.

For further assistance, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth
October 16, 2018

On September 28, 2018 the Equal Employment Opportunity Commission (EEOC) announced it has filed a law suit against Central California grocery store, PAQ, Inc. dba Rancho San Miguel Market for alleged violations of the federal Americans with Disabilities Act (ADA).

The agency contends that in 2016, a deli clerk requested six weeks of medical leave for corrective surgery and recovery, supported by a note from her doctor. Allegedly, PAQ, Inc. denied the clerk’s request and instead fired her. The EEOC is now suing PAQ, Inc. for back pay, compensatory and punitive damages, as well as an injunction prohibiting the company’s discriminatory practices.

Melissa Barrios, the EEOC San Francisco Office director noted, “The act of firing an employee who requests accommodation not only negatively affects that employee, but can create a chilling effect across the workforce. Other employees may not request an accommodation, as is their right by law, for fear of losing their jobs.”

Employers must engage in an interactive process in an attempt to reasonably accommodate a disabled worker’s ability to perform her job. However, EEOC Regional Attorney Anna Park stated, “We continue to see employers struggling with complying with the ADA and failing to engage in the interactive process as required under federal law.”

The EEOC is clearly going after employers who discriminate. See, e.g., What’s That Again? Hearing Disabled Applicants Deserve Equal Consideration (September, 2018). As PAQ, Inc. supposedly was, employers faced with accommodation requests are well advised to seek assistance from an employment attorney to conduct an appropriate interactive process, thus minimizing the prospect of government actions and lawsuits.

See also:

• Don’t Flunk the Reasonable Accommodation Test (May, 2018)
• Preventing Workplace Discrimination (August, 2017)
• Employers Duties to Reasonably Accommodate Worker Disabilities (May, 2015)
• Say “ADAAAAHHH” (May, 2011)

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin
October 12, 2018

Many California businesses install on-premises video surveillance equipment to improve operations through the security of premises. Electronic surveillance can deter, prevent or help resolve theft, physically threatening incidents or other dangerous conditions or situations.

Under California’s state constitution, all persons are entitled to a reasonable expectation of privacy from government as well as commercial intrusion. Thus, businesses may not use overly invasive electronic surveillance systems which unduly interfere with one’s privacy rights.

California law provides helpful guidance on how to balance these competing interests (right to privacy vs. right to monitor business activities):

• Record video only; never record any audio without consulting with experienced legal counsel. (See, Penal Code section 632).
• Ensure all cameras are clearly visible.
• Do not install video cameras in any location in which an employee has a reasonable expectation of privacy, such as a bathroom, changing room, or private office. (See, Labor Code section 435).
• Do not place video cameras in any areas where union meetings or activities may take place.
• Obtain employees’ advance written consent to be monitored.
• Inform employees that video feeds may be recorded both during and outside of business hours and that the company reserves the option of retaining or securely discarding/overwriting such recordings in its discretion.

Employers should publish and distribute written policies covering the above points.
See also:

• Private or Social? (September, 2018)
• If It Isn’t Written, Workplace Policy Is Anyone’s Guess (March, 2018)

Cindy Bamforth
October 10, 2018