Earlier this week, the California Supreme Court issued a long-awaited decision in Dynamex Operations W., Inc. v. Superior Court. The plaintiffs were truck drivers who delivered goods for Dynamex. (The last time I ordered something from Ikea, Dynamex delivery drivers delivered it.) Dynamex classified the drivers as independent contractors, essentially claiming that the drivers ran their own delivery businesses. The drivers contended that they were actually employees. Why does this matter? Only employees get the benefit of labor laws, like minimum wage protections and entitlement to meal and rest breaks.
California courts have long disagreed over the proper test to apply to figure out whether someone is an employee or independent contractor. We now have a fairly bright-line test, called the "ABC Test." Under this test, a worker is only an independent contractor if the hiring entity proves ALL of the following: (A) the worker is free from the direction and control of the entity that hired him or her; (B) the worker performs work that is outside the usual course of the hiring entity's business; and (C) the worker has an "independently established" business and is performing work for the hiring entity out of that business. If the worker can show that any one of these factors is not met -- for example, the hiring entity is a delivery company and she is working as a delivery driver -- the test fails and the worker should be classified as an employee.
Which workers will NOT qualify as independent contractors under this test? Examples may include copywriters hired by a public relations firm to write press releases; IT workers who exclusively provide IT support to customers of a single tech firm; or a worker who performs maintenance for a maintenance company. For now, the ABC test applies only to cases involving California's wage orders (think reporting time pay). But, it's not hard to imagine that courts will extend the ABC test to other areas, like discrimination law or personal injury.
Every case is different. If you believe you have been misclassified as an independent contractor, you may want to consult with an attorney.
TEUKOLSKY LAW CLIENT NAMED TIME MAGAZINE "PERSON OF THE YEAR" FOR SPEAKING OUT AGAINST SEXUAL HARASSMENT
TIME Magazine has announced its 2017 "Person of the Year," and it's not Donald Trump. TIME has chosen a group of "Silence Breakers" -- women who have spoken out against sexual harassment and sexual assault, often at great personal and professional risk to themselves. Among the group chosen for this honor is Sandra Pezqueda. Ms. Pezqueda was fired from her job at the Terranea Resort, a ritzy Southern California hotel, after she complained that she was sexually harassed by her supervisor. Teukolsky Law is honored to represent Ms. Pezqueda in her wrongful termination lawsuit against the Terranea Resort. Trial is set for June 2018. If you have been the victim of sexual harassment or sexual assault and would like to consult with an attorney, you can contact Teukolsky Law by calling (626) 522-8982 or emailing firstname.lastname@example.org.
The Los Angeles Times provided insightful coverage of a new wage-and-hour class action lawsuit filed on October 19, 2017 by Teukolsky Law, APC on behalf of hotel workers who work at the "ritzy" Terranea Resort in Rancho Palos Verdes. Here is an excerpt:
"The lawsuit delves into a question that has been argued as high as the U.S. Supreme Court: At what point should employees be considered on duty and therefore earning their hourly wages?
In 2014, the Supreme Court ruled unanimously that warehouse workers for online shopping giant Amazon were not obligated to be paid for the time they spent undergoing security screenings after each shift.
Teukolsky said the Amazon case focused on a federal law, the Fair Labor Standards Act, and the court ruled that the security screenings fell into an exemption in the act.
In contrast, Teukolsky said, her lawsuit is supported by a 2000 ruling by the California Supreme Court that agriculture workers who spent time commuting on employer buses to the fields must be compensated for that time. Based on that case, she said, her clients should be compensated for time spent traveling on company shuttles to the resort.
'There are many examples where California law is more protective of workers than federal law,' she said."
Teukolsky Law, APC filed a class action lawsuit today against the luxury Terranea Resort in Rancho Palos Verdes, alleging that the hotel has subjected its workers to numerous wage-and-hour violations, including failure to pay them for all hours worked, the denial of meal and rest breaks, and failure to reimburse them for work supplies. Surrounded by hotel workers, Lauren Teukolsky announced the lawsuit along with named plaintiff Galen Landsberg at a press conference outside the oceanfront resort this morning.
The lawsuit claims that the resort regularly prohibits workers from parking in its onsite lots to make room for guests and requires workers to instead take company shuttles from remote off-site parking lots, but does not pay them for the additional travel time. Due to the high cost of rent in Rancho Palos Verdes, most workers commute to the hotel from more affordable parts of the Southland. Workers say the Terranea’s required use of company shuttles can add an hour or more to their already grueling daily drives.
“Rancho Palos Verdes is not somewhere we workers can afford to live, so we drive long distances each day to get to work. I live in mid-City Los Angeles. It’s frustrating that, on top of the long commute, we have to come in early to take the company’s shuttles from the offsite lots and are not paid for this time,” said Galen Landsberg, a cook at the Terranea.
Freddy Lovato, another Terranea cook, said: “I know the law says that we are supposed to be able to take two ten-minute rest breaks when we work an eight-hour shift. But that is not the reality. The kitchen is incredibly busy and we are regularly not permitted to take breaks.”
The suit also alleges that the hotel fails to reimburse workers for such required tools as knives, sharpening stones, peelers, lemon juicers, kitchen scissors, spatulas, and graters at Terranea’s expensive restaurants. “Talk about nickel-and-diming,” said Ms. Teukolsky. “While guests pay upward of $30 or $40 for a single entrée, Terranea pockets the profits and requires their own employees to supply the tools that enable them to perform their jobs.”
The Terranea, a Lowe Enterprises property, has become iconic in the upper echelons of the Los Angeles hospitality industry. The expansive property is located up the Pacific Coast from the Trump National Golf Course. With its ocean-side views and A-list clientele, the 5-star resort projects an image of luxury and environmental stewardship.
The next U.S. Supreme Court term begins on Monday, October 2, 2017. According to the argument schedule, which was just released, three consolidated cases involving the validity of class actions waivers in employment arbitration agreements will be the first cases heard by the Court. The Court's anticipated decision in Lewis (7th Circuit), Morris (9th Circuit) and Murphy Oil (5th Circuit) will like be the most significant employment decision issued by the Supreme Court in the past decade. If the Court upholds the use of class action waivers, we will likely see the end of class action cases being brought by employees. Why? Employers will require employees to sign away their rights to sue in court as a condition of employment, which courts have repeatedly held is perfectly legal. Employers will instead require employees to bring their claims through the private arbitration system. And, employers will require that employees bring only individual claims against the employer, and not join with any of their co-workers.
When an employee comes into my office and says she has $5,000 in unpaid wages, it's just not economically feasible for me to take that case. I don't typically get paid by the hour - I only earn a percentage of what I recover for my clients. But, if an employee comes into my office and says she and 500 of her co-workers have $5,000 in unpaid wages, for a total of $2.5 million in unpaid wages, I could take on that case and still pay my rent. Long story short: if class actions go away, private employment lawyers like me will not be able to take on smaller individual wage claims, and the wage-and-hour laws for those workers will no longer be enforced.
The only ray of sunshine in California is that employees can still bring representative Private Attorney General Act (PAGA) claims in court, and cannot be required to bring them in arbitration. At least for now.
On July 13, 2017, the California Supreme Court issued a blockbuster decision in Williams v. Superior Court, holding that plaintiffs who bring representative wage-and-hour actions under California's Private Attorney General Act ("PAGA") have broad discovery rights and are entitled to obtain a the names and contact information of other "aggrieved employees" without making a heightened showing that the employer has violated the law. This is the most significant PAGA decision since the Supreme Court held in Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), that an employee’s right to bring a representative PAGA action may not be waived through a forced arbitration agreement.
While employers will undoubtedly bemoan the Williams decision, let's just remember that we are on the precipice of a Supreme Court decision in the 2017-2018 term that will likely eviscerate wage-and-hour class actions on a nationwide basis. If the Supreme Court rules as I suspect they will, PAGA will be the only remaining vehicle for employees to bring representative wage-and-hour actions. This shifting class action landscape was undoubtedly on the minds of the Cal Supremes when they issued the pro-employee Williams decision yesterday.
While employment class actions are likely on their way out the door, employees in California can still pursue representative claims on behalf of themselves and other affected employees under the Private Attorney General Act, aka "PAGA." Under PAGA, an "aggrieved employee" can seek penalties and unpaid wages against an employer for violations like the failure to pay overtime and minimum wage, and the failure to provide meal and rest breaks. In Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), the California Supreme Court held that an employee cannot be compelled to waive her right to bring a representative PAGA claim in a predispute arbitration agreement. In a trio of cases decided in the past year, the California Court of Appeals held that employers cannot use predispute arbitration agreements to compel a PAGA case to arbitration. See Betancourt v. Prudential Overall Supply, 9 Cal.App.5th 439 (2017); Hernandez v. Ross Stores, Inc., 7 Cal.App.5th 171 (2016); and Tanguilig v. Bloomingdale’s, Inc., 5 Cal.App.5th 665 (2016). This means that employees who have signed arbitration agreements can still bring their representative PAGA actions in court. In response to Iskanian and its progeny, the employer lobby, including the Chamber of Commerce, is hard at work trying to pass legislation to limit PAGA's reach. Their efforts so far have been largely unsuccessful, but who knows what next year's legislative session will bring.
On Thursday, July 13, 2017, I will be speaking at the California State Bar Labor & Employment Section's Advanced Wage and Hour Conference. I will be presenting the 2017 Annual Update, along with Jeffrey Ranen from Lewis Brisbois LLP. The past year has seen a lot of exciting developments -- some good, some bad and some downright ugly. One of the worst developments for employees is the appointment of Justice Gorsuch to the U.S. Supreme Court. Next term, the Supremes will decide whether class action waivers in arbitration agreements violate Section 7 of the National Labor Relations Act (NLRA), which guarantees employees the right to engage in "concerted activity" for their mutual aid and benefit. The Seventh and Ninth Circuits have held that Section 7 means that employees can join together to bring work-related claims against their employers, and that class action waivers in arbitration agreements are illegal because they violate the NLRA. The Fifth Circuit went the other way. With Justice Gorsuch on the bench, it seems likely that the Supremes will side with the Fifth Circuit and rule that class action waivers are perfectly fine, following in the footsteps of Concepcion and other cases in the consumer context that have blessed class action waivers. Fear not - the past year had some positive developments for employees, and I will post about those next time.
Last weekend, I spoke on a panel for the Coalition of Low-Wage and Immigrant Worker Advocates (CLIWA) about California's new joint employer laws. One of the most powerful is California Labor Code sec. 2810.3, which imposes strict liability on a "client employer" for wage violations when the client employer uses workers supplied by a "labor contractor" to perform labor within the client employer's "usual course of business." Examples are a supermarket that uses a staffing agency to supply janitors to clean its stores; a hotel resort that uses a staffing agency to supply security guards to patrol the resort; or a warehouse that uses a staffing agency to supply workers to load and unload goods.
According to the American Staffing Association, more than three million temporary and contract employees work for American's staffing companies during an average week, and the numbers are growing. While businesses tout the benefits of increased flexibility allowed by such arrangements, those benefits often come at the workers’ expense. As David Weil, former Administrator of the Department of Labor’s Wage and Hour Division, persuasively argued in his highly-recommended book, “The Fissured Workplace: Why Work Became So Bad for So Many and What Can Be Done to Improve It,” this business strategy has generated huge profits for large corporations (and value for their investors), but has resulted in declining wages, a lack of benefits, and dangerous working conditions.
In 2014, the California Legislature passed AB 1897, which added Labor Code sec. 2810.3 to make it easier for a temporary worker to collect unpaid wages from an employer whose name doesn't appear on the worker's paycheck. Under the law, a supermarket is automatically liable if the staffing agency shorts a janitor on wages. The supermarket is liable not only for paying the wages, but is also subject to hefty penalties that often accompany wage violations. The supermarket is liable regardless of whether it knew that the staffing agency was shorting its workers' pay. The law is meant to encourage employers to use reputable staffing agencies, and to take affirmative steps to ensure that the staffing agencies are properly compensating their employees.
Even though Labor Code sec. 2810.3 went into effect on January 1, 2015, there are very few cases that alleged 2810.3 wage claims. I located only a handful of trial court orders discussing 2810.3 claims, and there are no appellate decisions yet. In my informal survey of California plaintiff-side employment lawyers, only a handful had brought claims under 2810.3. It appears that the law is being under-enforced, whether because practitioners are unaware of its existence or because the low-wage workers who would most benefit from its enforcement are unable to locate attorneys willing to bring cases on their behalf. It is critical that attorneys understand the power of 2810.3 - there is no need to allege or prove joint employer status to collect wages from a "client employer." Liability is automatic, so long as the coverage requirements are met. What more could you want?
If you believe that your employer has failed to pay you all of the wages you are owed, you may benefit from consulting a qualified plaintiff-side employment attorney.
Yesterday I talked about employers who get into trouble for having a "one size fits all" Employee Handbook that doesn't take into account the peculiarities of California law. Here's a real-life example based on a recent case of mine. The employer is nationwide, headquartered in New York. My client worked for a retail outlet in Los Angeles. She got pregnant, and asked how much leave time she could take. The employer told her that she could take 12 weeks total under the Family Medical Leave Act (FMLA). The employer failed to tell her that she was entitled to take four months' leave under California's Pregnancy Discrimination Leave Laws (PDLL) for disabilities related to pregnancy or childbirth. The Employee Handbook said nothing about the PDLL either. My client was unable to find childcare her first weekend back at work, so the employer fired her for "job abandonment." It turns out that the employer fired her more than a week before her four months of leave would have expired under the PDLL. Also, the California regulations provide that if an employer fails to give notice of an employee's rights under the PDLL, the employer cannot take any adverse action against the employee. We were able to settle the case before any depositions were taken for a confidential amount.
If you believe that your employer has fired you for taking leave related to pregnancy or childbirth, give us a call today to discuss your options.
Lauren Teukolsky is the founder and owner of Teukolsky Law, A Professional Corporation.