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As one California court recently pointed out in Kelly v. Stamps.com Inc. (2005), downsizing alone is not necessarily a sufficient explanation, under the Fair Employment and Housing Act, for the consequent dismissal of a worker. An employer’s freedom to reduce its workforce and to eliminate positions in the process, does not mean that it may use the occasion to conveniently get rid of protected workers.

Invocation of a right to downsize does not resolve whether the employer had a discriminatory motive for cutting back its work force, or engaged in intentional discrimination when deciding which individual workers to retain and release. At least two facts were considered by court as casting serious doubt of discriminatory motive on the employer’s decision to terminated a pregnant employee, when the employer tried to argue that the reason for that termination was a reduction in force in the Stamps.com case: (1) the employee’s track of excellent performance; (2) hiring a new employee, who was not pregnant, instead of the terminated pregnant woman.

If you have been, or are about to, be laid off due to the alleged downsizing of your employer, but you suspect that the true reason for your termination might be discriminatory and has little to do with the downsizing itself, contact Arkady Itkin – San Francisco employment lawyer to discuss your situation at work.

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I get calls from many workers in the San Francisco Bay Area who turn toCalifornia Department of Fair Employment and Housing for help, filing a complaint against their employer with one or both of those agencies for harassment, discrimination and/or wrongful termination. There is a tendency among workers to expect that these agencies will actually aggressively defend employees’ rights pursue resolution of their discrimination and harassment claims, when in fact this hardly ever happens.

While the objective of establishing those agencies was to prevent unlawful discrimination, In the vast majority of cases, EEOC and DFEH are of little use in representing employees in their discrimination, harassment and/or wrongful termination claims. These agencies commonly send a notice to the aggrieved employee that they were not able to determine whether discrimination or any other wrongful conduct took place due to “insufficient evidence.” Unless the employer admits fault, these agencies will not issue any clear findings. Having said that, there is still value in having those agencies involved and having them contact your employer, which will likely “motivate” the employer to take some action to remedy the situation. This is especially useful if you continue being employed by the same employer.

However, if you have been unlawfully terminated, waiting for EEOC of DFEH to take action is a waste of time as those agencies have no power to either reinstate you or force your former employer to pay damages for unlawful conduct. You are much better off requesting an immediate right to sue letter (which can be obtain online at the DFEH site after filling out a simple questionnaire) and filing a civil complaint against the employer and/or individual harasser.

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Once your local Employment Development Department (EDD) denies your unemployment benefits, you have an opportunity to appeal that decision in front of the Administrative Judge of the Board of Appeal. At that hearing, you will have the opportunity to explain to the judge why you should be entitled to unemployment benefits, and the employer will try to convince the Board while the decision of EDD should be upheld.

In many ways, that hearing reminds the bench trial, as the parties have the opportunity to make opening statements, present relevant evidence (documents) , as well as direct and cross examine their own as well the opposing witnesses.

An employee may be represented by an attorney, and such representation is highly recommended for three main reasons: (1) an experienced employment attorney will make more compelling arguments based on the law and the past case law, analogizing the employee’s situation to other claims where the benefits were granted; (2) examining witnesses and eliciting from them the necessary information can often be tricky and requires experience that few, if any, non-attorneys have; and (3) at the end, most judges will take the lawyer’s words much more seriously than the arguments of any other person.

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Under California Business and Professions Code section 16600, any agreement entered into with the purpose of limiting trade or business of any kind is to that extent void and unenforceable. California courts have consistently declared this provision an expression of public policy to ensure that citizens shall retain the right to purpose any lawful employment and enterprise of their choice. The interest of employees in their own mobility and economic prosperity are deemed paramount to the competitive business interests of employers as our society is built on and strongly encourages competition in trade and business.

This means that despite having agreed not to compete, a former employee has the right to enter into competition with his former employer, even for the business of those who had formerly been customers of the former employer. It makes no difference that the covenant not to compete is reasonably limited in time and geographic scope.

In one case, an employment agreement provided in part: “Employee will not render services, directly or indirectly, for a period of one year after separation of employment with Employer to any person or entity in connection with any “competing product.” This agreement was held to violate Bus. & Prof. C. section 16600 and was therefore found void and unenforceable.

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The California Fair Employment and Housing Act (FEHA) protects individuals who are at least age 40 from discrimination based on age in hiring, firing, compensation, and the terms, conditions, and privileges of employment. Because the legislature has included age among the specific categories protected by FEHA, employers are prohibited from discriminating against employees on the basis of age in the terms of employment as well as in the hiring or firing of employees.

FEHA also prohibits mandatory retirement for employees who are capable of performing their jobs adequately, with a few limited exceptions:

* Tenured faculty members at institutions of higher education, if the institution permits reemploying such individual on year-to-year basis.

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An employer may not deduct from employee’s wages moneys lost due to ordinary losses, such as cash shortages, breakage or loss of equipment, etc.) in the absence of showing of dishonesty, willful acts or gross negligence. As the court noted, the law prevents the employer from using wages to shirt business losses to employees, or to make employees insurers of such losses. (Prachasaisoradej v. Ralphs Grocery Co., Inc.)

An employer who resorts to “self-help” in deducting wages of his employees for ordinary losses does so at his own risk. If the employee is found not to have engaged in a dishonest, willful or grossly negligent act, the employee will be entitled to recover the amount of wages withheld, plus any waiting time penalties due.

The above rule applies seems to apply to non-exempt employees only. There is no prohibition on deductions from the earnings of exempt (management level) employees, many of whom work on incentive plans entitling them to a share of profits. Their incentive plan computation of profits properly includes a full range of revenue and expense items, including cash and inventory shortages.

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The executive exemption that relieves employers from the obligation to pay overtime compensation applies to any employee:

* Whose duties and responsibilities involve the management of the enterprise in which he is employed or of a customarily recognized department of subdivision of that enterprise;

* Who customarily and regularly directs the work of two or more other employees in that enterprise;

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Many employees give in the temptation of accepting a lump sum severance upon termination, even when the lawfulness of that termination is questionable. If you find yourself with an offer of severance, I highly recommend that you take your time to consider the severance offer before you accept it.

One of the common reasons that an employer may offer severance to the employee who is about to be terminated is because the circumstances of the termination are questionable and might give rise to legal action by employee. An employer usually requires an employee to sign General Release of All Claims in exchange for severance compensation. By signing that release, the terminated employee waives any and all rights to pursue legal action against the employer. Often, by accepting the severance package, the employee, gives up on his ability to pursue legal claims that might be ground for a much greater compensation / damages. But even if the employer conduct is not tainted with unlawful practice and termination, your severance offer might be highly negotiable.

Regardless of of the terms or your employment and severance payment, you have the right to consult an attorney when executing the severance agreement (most severance agreements remind the employee that he has the right to be represented by an attorney in accepting the severance contract).

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It is not unlikely for employees to have their words and/or conduct to be misinterpreted by their co-workers and have their colleague accuse them of sexual harassment without sufficient reason. An employer has a duty to investigation all sexual harassment allegations. Failure to do so may subject the employer to liability for both sexual harassment and failure to prevent sexual harassment. However, employee accused of harassing often feel helpless and without remedy to prove their innocence.

An employee who is falsely accused of sexual harassment is not without remedy however. That employee is also entitled to a prompt, thorough investigation of the facts and evidence of any alleged harassment. If the employer fails to conduct thorough investigation and instead summarily terminates a worker, he / she may have a defamation claim against the employer. Generally, false complaints of harassment and discrimination are conditionally privileged and do not constitute defamation, unless those accusation are made with malice. To show malice on the part of the accuser, the accused may be able to show whether the accuser had a history personal issues/hostility toward the accused, a pattern of unfounded complaints against co-workers, or any other ulterior, personal motive against the accused. If malice is shown, the liability for defamation of character may be attached to both the employer and employee personally.

If you believe that you have been a victim of defamation at workplace, contact Arkady Itkin – San Francisco employment lawyer to discuss your claims.

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San Francisco, CA 94111
Phone: (415) 295-4730
Fax: (415) 508-3474
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Sacramento, CA 95814

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