LEGAL IMPLICATIONS FOR YOUR OFFICE HOLIDAY PARTY
Everyone loves an office holiday party. It also serves many legitimate business purposes -- to reward employees, to raise morale, and to simply commemorate the end of one year and ring in the next. However, for many employers, holiday parties are a source of considerable anxiety and potential liability as management worries about the mistletoe and mayhem so frequently associated with these types of events. To help you make your company’s 2008 office holiday party enjoyable and crisis-free, we offer the following party planning guidelines and suggestions:
1. Remember that office parties are always business events! Remind all attendees to conduct themselves professionally and to avoid inappropriate behavior at all times. Physical, verbal, and visual activity unacceptable in the workplace is also unsuitable at office parties. (For example, abstain from unnecessary and potentially awkward physical greetings and signs of affection; it is no more appropriate to hug or kiss a co-worker at an office party than at the office. Do not allow the seemingly more relaxed environment to open the door for potentially offensive conversation and language. Steer away from swearing, profanity, and stories or comments, intended to be humorous or otherwise, which relate to personal characteristics such as age, color, marital and military status, national origin and ancestry, medical conditions, race, sex, sexual orientation, and gender identity, or such sincerely held personal and controversial convictions as religion and politics. Also, avoid revealing, overly-tight, or provocative dress and attire which may be distasteful and insulting to other party attendees.)
2. To serve or not to serve – that is always the question. Employers should be aware of the potential liability that may develop if an intoxicated employee causes an injury after leaving an office-hosted or sponsored party. California courts have held employers liable for third-party personal injuries caused by employees who drive home from company holiday parties intoxicated. In the matter of Harris v. Trojan Fireworks Company, the Court held the employer liable for injuries caused by an intoxicated employee driving home from an office party. The Court held that, “although the accident occurred away from the employer’s premises and presumably after work, we believe that the operable factors giving rise to the subsequent accident at least make a prima facie showing that the accident occurred in the course of [the employee’s] employment. . . .” (120 Cal. App. 3d 157, at 164 (1981).) An employer choosing to serve alcoholic beverages at an office celebration should consider the following:
(a) Contemplate a no host bar. While this does not eliminate potential employer liability, it weakens the argument that the employer provided the alcohol.
(b) Prior to the event, re-distribute your workplace substance abuse policy; have employees read it, and acknowledge both receipt of the policy and an understanding of it. Make sure your employees know the policy includes the use of alcohol in any work-related event or situation and office social functions.
(c) Host the party at a commercial establishment whereby employees are not distributing the alcohol, and make certain the hired service has a valid liquor license. If a company does hold the event on work property, hire professional bartenders and require servers to check for proof of age of all employees and his or her guest(s). Of course, anybody under the age of 21 or unable to show proof of age should not be served alcohol.
(d) Alcohol should be attended at all times; party attendees should never be able to help themselves to drinks. Do not serve alcohol to any individual who is intoxicated or perceived to be intoxicated. A "last call" should be made at least one hour prior to the event closing time. Also, make non-alcoholic beverages available, including coffee.
(e) Coordinate and plan for alternative transportation. Anticipate the need for departure transportation for all party goers and make these arrangements in advance of the party. Encourage employees to have a designated driver or make use of the alternative transportation if they consume any alcohol.
3. Designate or hire a group of “party chaperones.” These individuals have the responsibility of monitoring for inappropriate behavior, illegal drug use, intoxication, and uninvited guests. Chaperones should report concerns to specified management for any necessary remedial action.
4. Avoid associating the party with any specific religion. Do not assume everyone celebrates the same holiday at the same time of year. Hosting a “holiday party” or “winterfest” encompasses those celebrating Christmas, Hanukkah, Kwanzaa, and other holidays. Refrain from using related decorations (i.e., Christmas Tree, Menorah, Mkeka, etc.), music, and greetings/verbiage (“Merry Christmas!). While this will certainly be noticed by employees and may arouse some discord with those who believe it is their right of religious freedom to exercise their independent customs, it should be easily explained and understood the employer’s attempt is to exclude no employee from the celebration and ensure equality in a diverse work environment.
5. If the party involves the exchange of gifts, ask employees to make suitable purchase choices. First, an employer should distribute its policy on gift-giving and confirm with employees that they will follow the policy. The larger and more structured the employer, the more likely a specific detailed written policy will be required. Request employees pay heed to budgets and refrain from purchasing and bringing gag items, overly personal items or other potentially offensive gifts.
6. Be extremely cautious of activities which may require or encourage physical contact. Avoid dancing and certain party games which provide the opportunity for touching or other potentially inappropriate behavior –which may lead to significant misunderstandings and potential employer liability.
7. Pay close attention to the invitation list. The enjoyment of a holiday party is not only influenced by the conduct of employees, but also by their guests. If you are aware an employee has invited a guest who prompts pre-party apprehension, have a direct discussion with the employee and attempt to prevent a potentially awkward onsite situation. If you see unsuitable behavior by a guest at the party, depending on the nature and degree of the conduct, you may need to ask the employee to intervene, or you may have to ask the guest to leave. Any guest arriving at the party without a known employee connection should not be allowed to enter. Remember, similar to the workplace, liability issues may arise from inappropriate or unsafe behavior by any third-party attending an office party.
With special care, planning, and the application of good judgment, holiday parties can still be fun. Most employers put significant effort into this gathering, genuinely intending to make it one of the most memorable events of the year. Have a good time and enjoy yourself and your co-workers. As is typical with much in life, the concept of moderation and use of common sense are keys to having a safe and liability-free holiday party.
Author Gary R. Basham, Esq., is a founding partner of the employment law firm Basham Parker LLP, where he exclusively practices employment law and related litigation. Mr. Basham has extensive experience with wrongful termination, discrimination, sexual harassment, and retaliation claims and litigation, and regularly defends employers against claims for breach of contract, unfair business practices, violation of wage and hour laws, as well as numerous other tort and statutory employment law causes of action. He frequently speaks and lectures at employment law seminars and provides workplace training and education to both management and employees. Mr. Basham may be reached at either his Sacramento or Walnut Creek, California, offices, by email to gary@bashamparker.com.
Tuesday, November 11, 2008
SOME COMMON SENSE RELIEF FROM DISABLED ACCESS LAWSUITS
On October 8, 2008 Governor Arnold Schwarzenegger signed a bill that increases public access for individuals with disabilities while reducing unwarranted litigation. SB 1608 is a bipartisan comprehensive reform measure, authored by Senators Ellen Corbett (D-San Leandro), Tom Harman (R-Huntington Beach) and Ron Calderon (D-Montebello), and Assembly Members Cameron Smyth (R-Santa Clarita) and Lois Wolk (D-Davis). The bill received unanimous support by both houses of the Legislature before being sent to the Governor.
SB 1608 is designed to address two important goals: (1) promoting and increasing compliance with state and federal civil rights laws providing for equal access for individuals with disabilities in public accommodations; and (2) reducing unwarranted, unnecessary litigation that does not advance the goals of disability access. SB 1608 arrives at a solution through a combination of the following key reform provisions: (1) Clarifications in the law to help reduce unwarranted damages and attorneys' fees; (2) A new disability commission which will be tasked with evaluating and providing recommendations on further disability issues having an impact on the disability community and business; (3) Improved continuing education in disability access laws for building inspectors and architects; (4) Incentivizing building owners to use state-certified access specialists to ensure compliance; and (5) A new court procedure to encourage early resolution of disability access lawsuits.
One of the important reforms in SB 1608 is a provision clarifying that plaintiffs may recover damages only for a violation they personally encountered or that deterred access on a particular occasion, rather than for alleged violations that may exist at a place of business but did not cause a denial of access. In addition, SB 1608 clarifies that a court can consider reasonable written settlement offers made and rejected in determining the amount of reasonable attorneys fees to be awarded at the end of a case, which is aimed at reducing unnecessary protraction of litigation by either party.
On October 8, 2008 Governor Arnold Schwarzenegger signed a bill that increases public access for individuals with disabilities while reducing unwarranted litigation. SB 1608 is a bipartisan comprehensive reform measure, authored by Senators Ellen Corbett (D-San Leandro), Tom Harman (R-Huntington Beach) and Ron Calderon (D-Montebello), and Assembly Members Cameron Smyth (R-Santa Clarita) and Lois Wolk (D-Davis). The bill received unanimous support by both houses of the Legislature before being sent to the Governor.
SB 1608 is designed to address two important goals: (1) promoting and increasing compliance with state and federal civil rights laws providing for equal access for individuals with disabilities in public accommodations; and (2) reducing unwarranted, unnecessary litigation that does not advance the goals of disability access. SB 1608 arrives at a solution through a combination of the following key reform provisions: (1) Clarifications in the law to help reduce unwarranted damages and attorneys' fees; (2) A new disability commission which will be tasked with evaluating and providing recommendations on further disability issues having an impact on the disability community and business; (3) Improved continuing education in disability access laws for building inspectors and architects; (4) Incentivizing building owners to use state-certified access specialists to ensure compliance; and (5) A new court procedure to encourage early resolution of disability access lawsuits.
One of the important reforms in SB 1608 is a provision clarifying that plaintiffs may recover damages only for a violation they personally encountered or that deterred access on a particular occasion, rather than for alleged violations that may exist at a place of business but did not cause a denial of access. In addition, SB 1608 clarifies that a court can consider reasonable written settlement offers made and rejected in determining the amount of reasonable attorneys fees to be awarded at the end of a case, which is aimed at reducing unnecessary protraction of litigation by either party.
PRESIDENT BUSH SIGNS LEGISLATIONAMENDING AND GREATLY EXPANDING THE ADA
On Thursday, September 25, 2008 President Bush signed legislation significantly amending the Americans with Disabilities Act. Some of the more significant changes:
Expanded Definition of Major Life ActivitiesA disability is defined as a physical or mental condition that substantially limits a "major life activity." The ADA currently does not include a definition of "major life activities." The EEOC regulations provide examples, such as: "caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working." President Bush's amendments now specifically incorporate these regulations into the ADA by the amendment. The amendment goes farther and also adds "major bodily functions" such as "functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions." This will most likely lead to a substantial expansion of workers considered disabled under federal law. Now, conditions such as high blood pressure, asthma, and other conditions may be considered disabilities under the ADA. Finally, the amendment also expands the definition of disability to include a condition that is in remission or that is episodic, if it would otherwise substantially limit a major life activity when active.
"Substantially Limits" Liberalized
A disability must "substantially limit" a major life activity. The Supreme Court and the EEOC has set a relatively high standard for"substantially limits." An individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people's daily lives. The new ADA amendment categorically rejects this standard.
"Regarded As" Restricted
The ADA protects workers who, while not actually disabled, are regarded as disabled by the employer. The amendment excludes from "regarded as" claims minor/transitory conditions lasting six months or less.
Disregard of Mitigating Measures
U.S. Supreme Court decisions have held that mitigating measures, such as prosthetic devices, should be taken into account when determining whether the workers are disabled. For example, Sutton v. United Airlines, Inc., 527 U.S. 471 (1999), involved myopic twin sisters who were rejected for employment by an airline because of their poor vision, although their vision was correctable with prescription lenses. The airline's policy required "uncorrected visual acuity" at a certain level, which the sisters did not have. The Supreme Court held that because the sisters' vision was correctable, they did not satisfy the ADA definition of "disability" and therefore could not make out a claim for discrimination.The ADA amendment rejects the Supreme Court's interpretation of the ADA. Now, a worker may qualify as disabled under the ADA regardless of whether corrective measures mitigate their condition. Mitigating measures that will not be considered under the new amendments to the ADA include items such as medication, hearing aids and cochlear implants, low-vision devices (which do not include ordinary eyeglasses or contact lenses), mobility devices, prosthetics including limbs and devices, or oxygen therapy equipment and supplies.
Conclusion
In California, a more liberal definition of disability is already in place. For example, the law in California, under the Fair Employment and Housing Act, already includes many of the provisions found in the ADA amendment.It will be some time before the effects of the ADA amendment can be gauged. The EEOC may issue new regulations or guides, which may help employers comply with the new standards. Ultimately, an increase in federal disability law litigation can probably be expected.
On Thursday, September 25, 2008 President Bush signed legislation significantly amending the Americans with Disabilities Act. Some of the more significant changes:
Expanded Definition of Major Life ActivitiesA disability is defined as a physical or mental condition that substantially limits a "major life activity." The ADA currently does not include a definition of "major life activities." The EEOC regulations provide examples, such as: "caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working." President Bush's amendments now specifically incorporate these regulations into the ADA by the amendment. The amendment goes farther and also adds "major bodily functions" such as "functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions." This will most likely lead to a substantial expansion of workers considered disabled under federal law. Now, conditions such as high blood pressure, asthma, and other conditions may be considered disabilities under the ADA. Finally, the amendment also expands the definition of disability to include a condition that is in remission or that is episodic, if it would otherwise substantially limit a major life activity when active.
"Substantially Limits" Liberalized
A disability must "substantially limit" a major life activity. The Supreme Court and the EEOC has set a relatively high standard for"substantially limits." An individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people's daily lives. The new ADA amendment categorically rejects this standard.
"Regarded As" Restricted
The ADA protects workers who, while not actually disabled, are regarded as disabled by the employer. The amendment excludes from "regarded as" claims minor/transitory conditions lasting six months or less.
Disregard of Mitigating Measures
U.S. Supreme Court decisions have held that mitigating measures, such as prosthetic devices, should be taken into account when determining whether the workers are disabled. For example, Sutton v. United Airlines, Inc., 527 U.S. 471 (1999), involved myopic twin sisters who were rejected for employment by an airline because of their poor vision, although their vision was correctable with prescription lenses. The airline's policy required "uncorrected visual acuity" at a certain level, which the sisters did not have. The Supreme Court held that because the sisters' vision was correctable, they did not satisfy the ADA definition of "disability" and therefore could not make out a claim for discrimination.The ADA amendment rejects the Supreme Court's interpretation of the ADA. Now, a worker may qualify as disabled under the ADA regardless of whether corrective measures mitigate their condition. Mitigating measures that will not be considered under the new amendments to the ADA include items such as medication, hearing aids and cochlear implants, low-vision devices (which do not include ordinary eyeglasses or contact lenses), mobility devices, prosthetics including limbs and devices, or oxygen therapy equipment and supplies.
Conclusion
In California, a more liberal definition of disability is already in place. For example, the law in California, under the Fair Employment and Housing Act, already includes many of the provisions found in the ADA amendment.It will be some time before the effects of the ADA amendment can be gauged. The EEOC may issue new regulations or guides, which may help employers comply with the new standards. Ultimately, an increase in federal disability law litigation can probably be expected.
CALIFORNIA BANS "TEXTING" BEHIND THE WHEEL
California has banned text messaging while driving, and employers need to respond promptly by updating policies.SB 28, signed by Governor Schwarzenegger on September 24, 2008, amends the California Vehicle Code to state: "A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication." The penalty for violating the law is $20 for the first violation and $50 for subsequent violations. No violation points will be given as a result of the offense.The new law closes a loophole left by Senate Bill 1613 (Summarized here). Effective July 1, 2008, that new law provides that it is illegal to drive a motor vehicle while using a wireless telephone, unless a hands-free device for the cell phone is used. But the law did not expressly ban texting. (Separate legislation has already banned drivers under age 18 from using cell phones or any texting device while driving.)
What about using your PDA's phone directory to dial out a call? That doesn't count as texting under the new law: "For purposes of this section, a person shall not be deemed to be writing, reading, or sending a text-based communication if the person reads, selects, or enters a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call."
In order to minimize liability issues arising from employees using cell phones, PDAs, or other electronic communication devices on the road while in the course and scope of employment or while taking work-related calls, employers should implement a policy that prohibits employees from using cell phone or PDAs while driving. At a minimum, employers should require all employees to refrain from texting and to use "hands free" devices while driving on company business or when making business calls on the road.
California has banned text messaging while driving, and employers need to respond promptly by updating policies.SB 28, signed by Governor Schwarzenegger on September 24, 2008, amends the California Vehicle Code to state: "A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication." The penalty for violating the law is $20 for the first violation and $50 for subsequent violations. No violation points will be given as a result of the offense.The new law closes a loophole left by Senate Bill 1613 (Summarized here). Effective July 1, 2008, that new law provides that it is illegal to drive a motor vehicle while using a wireless telephone, unless a hands-free device for the cell phone is used. But the law did not expressly ban texting. (Separate legislation has already banned drivers under age 18 from using cell phones or any texting device while driving.)
What about using your PDA's phone directory to dial out a call? That doesn't count as texting under the new law: "For purposes of this section, a person shall not be deemed to be writing, reading, or sending a text-based communication if the person reads, selects, or enters a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call."
In order to minimize liability issues arising from employees using cell phones, PDAs, or other electronic communication devices on the road while in the course and scope of employment or while taking work-related calls, employers should implement a policy that prohibits employees from using cell phone or PDAs while driving. At a minimum, employers should require all employees to refrain from texting and to use "hands free" devices while driving on company business or when making business calls on the road.
The New Kid on the Block! Getting to Know GINA
On May 21, 2008, President Bush signed the Genetic Information Non-discrimination Act (GINA) into law. However, GINA's employment-related discrimination provisions do not take effect until November 2009. GINA was enacted, in part, to protect individuals from discrimination in employment on the basis of their genetic information. The law's anti-discrimination provisions generally impact employers already covered by Title VII. GINA prohibits employer use of an employee's or applicant's genetic information as a basis fordiscrimination in the application process, or with regard to terms and conditions of employment. With a few enumerated exceptions, employers are also prohibited from requesting or acquiring an employee's genetic information or that of an employee's family member. Like the Americans with Disabilities Act (ADA), GINA contains a provision requiring that employers keep any genetic information maintained on employees in a separate, confidential medical file. Individuals making complaints pursuant to GINA will have to file a charge with the U.S. EqualEmployment Opportunity Commission (EEOC) as a prerequisite to file suit. Compensatory and punitive damages, as well as attorney's fees, may be available to a plaintiff prevailing on a genetic discrimination based claim.
Employers should be prepared to revise their policies and practices to ensure compliance with GINA.
On May 21, 2008, President Bush signed the Genetic Information Non-discrimination Act (GINA) into law. However, GINA's employment-related discrimination provisions do not take effect until November 2009. GINA was enacted, in part, to protect individuals from discrimination in employment on the basis of their genetic information. The law's anti-discrimination provisions generally impact employers already covered by Title VII. GINA prohibits employer use of an employee's or applicant's genetic information as a basis fordiscrimination in the application process, or with regard to terms and conditions of employment. With a few enumerated exceptions, employers are also prohibited from requesting or acquiring an employee's genetic information or that of an employee's family member. Like the Americans with Disabilities Act (ADA), GINA contains a provision requiring that employers keep any genetic information maintained on employees in a separate, confidential medical file. Individuals making complaints pursuant to GINA will have to file a charge with the U.S. EqualEmployment Opportunity Commission (EEOC) as a prerequisite to file suit. Compensatory and punitive damages, as well as attorney's fees, may be available to a plaintiff prevailing on a genetic discrimination based claim.
Employers should be prepared to revise their policies and practices to ensure compliance with GINA.
Is the Indigestion Caused By California's Meal and Rest Period Requirements Nearing an End?; California Court of Appeals Clarifies Meal and Rest Period Requirements
California employers have been under siege from plaintiffs claiming massive wage & hour violations. In a rare positive wage & hour decision for employers, a California Court of Appeal has clarified the meal and rest period requirements for California employees. In addition, the same Court significantly narrowed a plaintiff's ability to certify a putative class action based upon alleged meal and rest period violations.
In Brinker Restaurant Corporation et al. v. Superior Court (7/22/08), several waiters/waitresses brought a putative class action against Brinker for alleged meal and rest period violations, as well as for unpaid hours worked. The servers claimed Brinker failed to absolutely ensure employees received their meal and rest periods. The servers further claimed that Brinker's policy of requiring/permitting employees to take a meal period near the start of their shift, and then requiring the employee to continue working for five or more hours without an additional meal period violated the Labor Code. Finally, the employees claimed that they worked off-the-clock without compensation. Based upon the alleged "across the board" violations, the employees sought class certification of their claims. Brinker's position was that it provides employees with an opportunity to take an appropriate meal and rest period at some point during their shift.
The Court of Appeal rejected the employees' contentions and held that employers need only provide, not ensure, that meal and rest periods are taken. The court explained that the language in section 512 of the California Labor Code means that employers need only offer meal breaks and do not need to police their employees to ensure that meal breaks are actually taken. However, the court did provide examples of how an employer would be non-compliant, such as when an employer did not schedule meal periods, did not have a policy authorizing meal periods, or pressured employees to skip meals. The court noted that if an employer knew that employees were working while eating, and did not take steps to address the situation, the employer would be depriving employees of their breaks and therefore would have failed to "provide" meal periods. The court also expressly rejected the concept of a "rolling 5-hour meal period" advanced by the plaintiffs, holding that employers are not required to provide a meal period for every five consecutive hours worked. An employer need only provide a 30-minute break once at any time during a work period that does not exceed ten hours.In addition, while addressing the class certification issues, the Court of Appeal determined that "because the rest and meal breaks need only be 'made available' and not 'ensured,' individual issues predominate" over class claims as each putative class member's situation must be determined on a case-by-case basis. Thus, based upon the evidence presented to the trial court, the Court of Appeal determined that the employees' claims were not amenable to class treatment. The holding should, in effect, make it more difficult to certify class-wide claims for meal period, rest period, and overtime violations.
Going Forward
The Brinker decision is likely to be appealed, finally placing the issue before the California Supreme Court. Currently, the decision provides California employers with some flexibility in scheduling and permitting employees to take their meal and rest periods. In addition, where the court focused on the Company's policies regarding meal & rest periods, the decision highlights the importance of employers' policies and procedures regarding their wage and hour practices.
[UPDATE: THE CALIFORNIA SUPREME COURT HAS ACCEPTED REVIEW OF THIS DECISION. EMPLOYERS SHOULD SIT TIGHT UNTIL THE CALIFORNIA SUPREME COURT MAKES ITS RULING.]
California employers have been under siege from plaintiffs claiming massive wage & hour violations. In a rare positive wage & hour decision for employers, a California Court of Appeal has clarified the meal and rest period requirements for California employees. In addition, the same Court significantly narrowed a plaintiff's ability to certify a putative class action based upon alleged meal and rest period violations.
In Brinker Restaurant Corporation et al. v. Superior Court (7/22/08), several waiters/waitresses brought a putative class action against Brinker for alleged meal and rest period violations, as well as for unpaid hours worked. The servers claimed Brinker failed to absolutely ensure employees received their meal and rest periods. The servers further claimed that Brinker's policy of requiring/permitting employees to take a meal period near the start of their shift, and then requiring the employee to continue working for five or more hours without an additional meal period violated the Labor Code. Finally, the employees claimed that they worked off-the-clock without compensation. Based upon the alleged "across the board" violations, the employees sought class certification of their claims. Brinker's position was that it provides employees with an opportunity to take an appropriate meal and rest period at some point during their shift.
The Court of Appeal rejected the employees' contentions and held that employers need only provide, not ensure, that meal and rest periods are taken. The court explained that the language in section 512 of the California Labor Code means that employers need only offer meal breaks and do not need to police their employees to ensure that meal breaks are actually taken. However, the court did provide examples of how an employer would be non-compliant, such as when an employer did not schedule meal periods, did not have a policy authorizing meal periods, or pressured employees to skip meals. The court noted that if an employer knew that employees were working while eating, and did not take steps to address the situation, the employer would be depriving employees of their breaks and therefore would have failed to "provide" meal periods. The court also expressly rejected the concept of a "rolling 5-hour meal period" advanced by the plaintiffs, holding that employers are not required to provide a meal period for every five consecutive hours worked. An employer need only provide a 30-minute break once at any time during a work period that does not exceed ten hours.In addition, while addressing the class certification issues, the Court of Appeal determined that "because the rest and meal breaks need only be 'made available' and not 'ensured,' individual issues predominate" over class claims as each putative class member's situation must be determined on a case-by-case basis. Thus, based upon the evidence presented to the trial court, the Court of Appeal determined that the employees' claims were not amenable to class treatment. The holding should, in effect, make it more difficult to certify class-wide claims for meal period, rest period, and overtime violations.
Going Forward
The Brinker decision is likely to be appealed, finally placing the issue before the California Supreme Court. Currently, the decision provides California employers with some flexibility in scheduling and permitting employees to take their meal and rest periods. In addition, where the court focused on the Company's policies regarding meal & rest periods, the decision highlights the importance of employers' policies and procedures regarding their wage and hour practices.
[UPDATE: THE CALIFORNIA SUPREME COURT HAS ACCEPTED REVIEW OF THIS DECISION. EMPLOYERS SHOULD SIT TIGHT UNTIL THE CALIFORNIA SUPREME COURT MAKES ITS RULING.]
Friday, May 30, 2008
Simple Math: More Layoffs Equals More Lawsuits!
When the economy struggles many employers cut costs through layoffs, hiring freezes, and/or reduced recruiting efforts. While these are often business necessities, before taking such any course of action, employers should be aware of the recent rise in charge filings with the U.S. Equal Employment Opportunity Commission (EEOC).
According to recently released EEOC statistics for 2007, charges of employment bias rose nine percent, the biggest annual increase since the early 1990s and the highest volume of charges since 2002. While race continued to be the largest charge category (with 30,510 charges filed in 2007), retaliation charges became the second largest category with 26,663 charges, bypassing, for the first time ever, the 24,826 sex-based charges. the 2007 figures also included 19,103 age-based charges and 17,734 disability discrimination charges.
On the surface, an employer's decision to lay off employees in the midst of a recession has no correlation to claims of discrimination. However, the EEOC itself acknowledged changing economic conditions as one of several possible explanations for the recent rise in the filing of charges of discrimination. Thus, if reductions-in-force or other cost-saving efforts are not well thought out or mis-handled, an employer may see an increase in EEOC charges filed against it. Potential EEOC charges will undoubtedly increase legal fees and will have an impact of savings achieved from employers cost cutting efforts.
Start Up Employees Exempt?: Administrative Exemption Strengthened in California
In California, unless specifically exempted, an employee is presumed to be non-exempt and subject to the provisions of the applicable Wage Order. However, if properly subject to an exemption an employee will be exempt from entitlements under many sections of the Wage Order, including meal & rest periods, recordkeeping, and the minimum wage and overtime provisions.
A recent decision by the California Fourth District Court of Appeal held that an employee working in a fast-paced start-up business operating with a "flat organization"
could still qualify for the administrative exemption for salaried employees as long as all requirements for the exemption were satisfied. In the ruling, the appellate court adopted the common-sense analysis set forth by the federal regulations applicable to the "administrative exemption," which are expressly incorporated by the Industrial Welfare Commission Wage Orders. Combs v. Skyriver Communications.
An employee is properly employed in an administrative capacity under this exemption if the employee satisfies a five-prong test largely centered around whether the employee's duties and responsibilities involve the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer's customers.
To assist in the determination of this so called "duties test," the Wage Order provides that exempt work includes all work that is "directly and closely related to exempt work" and work which is properly viewed as "a means for carrying out exempt functions."
This shows that multi-tasking need not count against an employee's exempt status when the employee is also performing an exempt duty.
The Facts in the Combs Case: Skyriver was a high-speed, wireless, broadband internet service provider. The company was described as a "young start-up company." The employee, Mark Combs, worked as manager of capacity planning, and later as director of network operations. He was paid a salary ranging between $70,000 and $90,000. Combs later depicted his job as nothing but a glorified troubleshooter, complained that he had to carry a pager, that his meal breaks were interrupted, and that he could not take a rest break.
But if Combs were exempt, he would not have been entitled to meal and rest periods.
In his resume, prepared after he left Skyriver, he detailed that, as Skyriver's director of network operations, he was responsible for a broad array of important functions, including project management, budgeting, vendor management, purchasing, forecasting; management of employees, overseas deployment of wireless data network, the integration and standardization of three networks into the Skyriver architecture; and the overseeing of day-to-day network operations of the company.
At trial, Combs and his witnesses acknowledged his resumé was accurate. Among other things, Combs further testified on his own behalf that his "core" responsibility at Skyriver was "maintaining the well-being of the network," and that he spent 60 to 70 percent of his time working alongside other employees in carrying out that responsibility. Combs argued he was non-exempt employee because his work involved production as opposed to purely administrative duties. Combs submitted evidence that the company was a flat organization where "everybody worked with everybody."
The trial court granted Skyriver's motion for judgment, holding that Combs was performing duties that involved matters of substantial importance to running the business.
The mere fact that he worked alongside other employees did not change the fact that he was performing exempt duties. The court held that start-up companies by their nature had fewer employees requiring greater flexibility.
Combs appealed but the appellate court also held that "substantial evidence shows that Comb's exercise of discretion and independent judgment pertained to matters of significance." The court reasoned that Combs' own testimony and documentary exhibits, including emails, demonstrated that he was performing primarily exempt functions. In short, although Combs strained to "dumb down" his duties, the courts saw the job for what it really was: an exempt position.
Ultimately, this case is good news for employers involved in misclassification lawsuits.
However, below are a few tips to try and avoid ever being in the position of being sued over misclassification issues.
Employers must devise job descriptions to satisfy exemption requirements, and ensure that such jobs rationally fit the organizational structure to preserve exempt duties.
Employers should also conduct periodic internal audits of all salaried exempt positions, preferably with the advice of legal counsel, to make sure that the pertinent job descriptions and expectations within the organizational structure properly set out exempt duties. Finally, make sure by observation and that the actual duties performed by employees in exempt jobs are consistent with the reasonable expectations of their job descriptions.
When the economy struggles many employers cut costs through layoffs, hiring freezes, and/or reduced recruiting efforts. While these are often business necessities, before taking such any course of action, employers should be aware of the recent rise in charge filings with the U.S. Equal Employment Opportunity Commission (EEOC).
According to recently released EEOC statistics for 2007, charges of employment bias rose nine percent, the biggest annual increase since the early 1990s and the highest volume of charges since 2002. While race continued to be the largest charge category (with 30,510 charges filed in 2007), retaliation charges became the second largest category with 26,663 charges, bypassing, for the first time ever, the 24,826 sex-based charges. the 2007 figures also included 19,103 age-based charges and 17,734 disability discrimination charges.
On the surface, an employer's decision to lay off employees in the midst of a recession has no correlation to claims of discrimination. However, the EEOC itself acknowledged changing economic conditions as one of several possible explanations for the recent rise in the filing of charges of discrimination. Thus, if reductions-in-force or other cost-saving efforts are not well thought out or mis-handled, an employer may see an increase in EEOC charges filed against it. Potential EEOC charges will undoubtedly increase legal fees and will have an impact of savings achieved from employers cost cutting efforts.
Start Up Employees Exempt?: Administrative Exemption Strengthened in California
In California, unless specifically exempted, an employee is presumed to be non-exempt and subject to the provisions of the applicable Wage Order. However, if properly subject to an exemption an employee will be exempt from entitlements under many sections of the Wage Order, including meal & rest periods, recordkeeping, and the minimum wage and overtime provisions.
A recent decision by the California Fourth District Court of Appeal held that an employee working in a fast-paced start-up business operating with a "flat organization"
could still qualify for the administrative exemption for salaried employees as long as all requirements for the exemption were satisfied. In the ruling, the appellate court adopted the common-sense analysis set forth by the federal regulations applicable to the "administrative exemption," which are expressly incorporated by the Industrial Welfare Commission Wage Orders. Combs v. Skyriver Communications.
An employee is properly employed in an administrative capacity under this exemption if the employee satisfies a five-prong test largely centered around whether the employee's duties and responsibilities involve the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer's customers.
To assist in the determination of this so called "duties test," the Wage Order provides that exempt work includes all work that is "directly and closely related to exempt work" and work which is properly viewed as "a means for carrying out exempt functions."
This shows that multi-tasking need not count against an employee's exempt status when the employee is also performing an exempt duty.
The Facts in the Combs Case: Skyriver was a high-speed, wireless, broadband internet service provider. The company was described as a "young start-up company." The employee, Mark Combs, worked as manager of capacity planning, and later as director of network operations. He was paid a salary ranging between $70,000 and $90,000. Combs later depicted his job as nothing but a glorified troubleshooter, complained that he had to carry a pager, that his meal breaks were interrupted, and that he could not take a rest break.
But if Combs were exempt, he would not have been entitled to meal and rest periods.
In his resume, prepared after he left Skyriver, he detailed that, as Skyriver's director of network operations, he was responsible for a broad array of important functions, including project management, budgeting, vendor management, purchasing, forecasting; management of employees, overseas deployment of wireless data network, the integration and standardization of three networks into the Skyriver architecture; and the overseeing of day-to-day network operations of the company.
At trial, Combs and his witnesses acknowledged his resumé was accurate. Among other things, Combs further testified on his own behalf that his "core" responsibility at Skyriver was "maintaining the well-being of the network," and that he spent 60 to 70 percent of his time working alongside other employees in carrying out that responsibility. Combs argued he was non-exempt employee because his work involved production as opposed to purely administrative duties. Combs submitted evidence that the company was a flat organization where "everybody worked with everybody."
The trial court granted Skyriver's motion for judgment, holding that Combs was performing duties that involved matters of substantial importance to running the business.
The mere fact that he worked alongside other employees did not change the fact that he was performing exempt duties. The court held that start-up companies by their nature had fewer employees requiring greater flexibility.
Combs appealed but the appellate court also held that "substantial evidence shows that Comb's exercise of discretion and independent judgment pertained to matters of significance." The court reasoned that Combs' own testimony and documentary exhibits, including emails, demonstrated that he was performing primarily exempt functions. In short, although Combs strained to "dumb down" his duties, the courts saw the job for what it really was: an exempt position.
Ultimately, this case is good news for employers involved in misclassification lawsuits.
However, below are a few tips to try and avoid ever being in the position of being sued over misclassification issues.
Employers must devise job descriptions to satisfy exemption requirements, and ensure that such jobs rationally fit the organizational structure to preserve exempt duties.
Employers should also conduct periodic internal audits of all salaried exempt positions, preferably with the advice of legal counsel, to make sure that the pertinent job descriptions and expectations within the organizational structure properly set out exempt duties. Finally, make sure by observation and that the actual duties performed by employees in exempt jobs are consistent with the reasonable expectations of their job descriptions.
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