San Francisco Employment Law Firm Blog

December 10, 2017

Wrongful Termination To Avoid Paying Bonuses or Commissions Due

Many employers, especially in the tech / start-up world often fire an employee right before his bonus or commissions in order to avoid paying that bonus. Of course this is more likely to happen if the bonus due is significant. If there is sufficient evidence that avoiding to pay bonus was the reason or one of the reasons for termination, this can support a claim for wrongful termination in violation of public policy. This type of claim is particularly strong if (1) the employee to be terminated was a high performer (2) he was terminated for a petty reason and/or (3) the company didn’t follow its normal disciplinary, investigation and termination procedures that are in place; and (4) the termination took place right before the bonus would have been due or paid.

Many employers do not realize that bonuses earned (as opposed to discretionary bonuses) are to be treated as wages as per California Labor Code Section 200. Neisendorf v. Levi Strauss 13 & Co. (2006) 143 Cal.App.4th 509. It is also established that an employer cannot terminate an employee and refuse to pay that employee the bonus he or she earned simply because the involuntarily terminated employee was not employed on the date bonuses were paid. McCollum v. Xcare.net, Inc.,212 F.Supp.2d 1142 (N.D. Cal 2002) (employee was terminated two weeks before she would have been entitled to $75,000 in commissions); Ellis v. McKinnon Broadcasting Co. (1993) 18 Cal.App.4th 1796.

Many comp plans provide employers with discretionary power to forfeit a bonus otherwise due. California law is clear, however, that “where a contract confers one party with discretionary power affecting the rights of the other, a duty is imposed to exercise that discretion in good faith and in accordance with fair dealing.” Locke v. Warner Brothers, Inc., 57 Cal.App.4th 354 (1997). Therefore, if one party exercises its discretionary authority in bad faith for the purpose of frustrating the other party’s legitimate expectations, it has breached the implied covenant. Commercial Union Assurance Cos. v. Safeway Stores, Inc., 26 Cal.3d 912 (1980). In other words, an employer must have a good reason for bonuses forfeiture, if so allowed by the comp plan, and it can’t just be any reason.

December 1, 2017

Legal Protections for Workers with Cancer Under ADA Disability Laws

by Arkady Itkin

The ADA and FEHA (Fair Employment and Housing Act) prohibit discrimination on the basis of an employee’s disability in all phases of employment process – from application, medical exams, hiring decisions, promotions, and of course terminations. Under ADA, disability is defined as a physical or mental impairment that substantially limits a major life activity. These activities include caring for oneself, walking, talking, breathing or working.

An employee may also qualify for disability protection under ADA if he is “regarded as” having an impairment. This protection is especially important for employees who have history of cancer but do not currently have an impairment that substantially limits a major life activity. Employers often incorrectly assume that an employee is unable to continue performing his job after being diagnosed with cancer even if that employee doesn’t (yet) have any limitations at that time. “Regarded as” element of the ADA can be used to provide protections to employees with cancer who do not have a current disability within ADA definition, but still face discrimination based on their diagnosis.

In addition, the ADA Amendments Act (ADAAA) expanded the list of major life activities to include sleeping, concentrating, thinking, communicating, and the operation of major bodily functions. Employees who undergo cancer treatment often have issues with these activities. For instance, typical side effect of chemotherapy are inability to concentrate and memory issues. If these symptoms substantially limit an employee’s ability to think or concentrate, then the employee may have a disability under ADA.

November 17, 2017

Waiting Periods Before Vacation Begins Accruing Are Legal

by Arkady Itkin

An interesting case on the vacation policy issue has been ruled earlier this year by the court of appeal. Employees brought a class action suit against their employer claiming that the vacation policy that required them to work for at least one year before their right to vacation vested was illegal. The appellate court affirmed the dismissal of this case holding that the employer’s policy was not illegal, because it specifically provided that vacation pay was not earned during the first year of employment. The employees in this case claimed that the employer intentionally withheld their vested vacation pay.

The appellate court rejected Plaintiff’s argument finding that it was neither illegal not inconsistent with the existing law to impose a waiting period before entitlement to vacation pay vests. Minnick v Automotive Creations, Inc. 13 Cal.App.5th 2000 (2017). The court further emphasized that imposing a waiting time period before allowing vacation to accrue is not the same as taking away vacation which has already been earned / vested (the latter would indeed be illegal). The Minnick case also makes it clear that the language of the vacation policy is critical, and it must clearly state that vacation is not accrued until a certain period passes in order to be legal.

October 18, 2017

Kaiser Settles Class Action for Unpaid Wages With Call Center Nurses

by Arkady Itkin

California nurses will get roughly $6 million from health care giant Kaiser Permanente for time spent doing unpaid work.The payout settles a class action filed last year on behalf of 1,397 advice nurses who take calls from patients at three of the Permanente Medical Group’s call centers in Sacramento, Vallejo and San Jose. Debra Brown, Sandra Morton and Barbara Labuszewski sued in September 2016, claiming Kaiser didn’t pay them for time they spent logging in and out of call center computers before and after their shifts. Kaiser doesn’t consider call center nurses clocked in until after the log-in process is complete. Although this might sound like a minor issue, under the law these couples of minutes are compensable. A few minutes a day turn into 30 minutes a week and 26 hours a year that person is being not paid for per year. Each nurse will receive anywhere from $3,000 to $9,500 as part of the settlement. U.S. District Judge Vincent Chhabria also awarded the class’ attorneys fees in the amount of $1.8 million.

This case reminds me of a class action that ATT and other similar providers were for not paying their telephone customers service reps for the few minutes they show up early to start their computers.

October 7, 2017

At-Will Employment And Misclassifying Employees As Contractors

by Arkady Itkin

Misclassifying an employee as an independent contractor is an easier mistake to make than many employers believe. The recent case Linton v DeSoto Cab Company, Inc., illustrates this very well. In that case, the first appellate district found that the plaintiff cab-driver was an employee despite having lots of control over how he performed his work, and despite signing the agreement expressing stating that there was no employment relationship of any kind between DeSoto and their drivers. There are a few key, critical, and often overlooked points in the court’s analysis in that case:

First, the court noted that strong evidence of employment relationship exist, when the company reserves the right to discharge at will, without cause. This means that if an “independent contractor” agreement contains language that states in so many words that the so-called contractor can be terminated at any time, for any reason or no reason, a strong presumption of employment will arise. Thus, employers who want to avoid this misclassification issue are advised to make sure that their independent contractor agreements do not contain this at-will language. Of course, not having that language has its downsides and every business should consider the unique and specific circumstances of their workforce needs before deciding whether to include the at-will language or not.

Secondly, the court noted that “liability to discharge for disobedience or misconduct is a strong evidence of control.” This means that if there is a policy that states that a “contractor” can be terminated for not following management’s directives or for some type of violation, this also creates a strong presumption of employment relationship between the parties. This presumption is especially strong if a “contractor” has no opportunity to dispute allegations against him before being terminated.

August 24, 2017

EEOC Files Disability Discrimination Lawsuit Against UPS Freight

by Arkady Itkin

On August 8, 2017, EEOC announced filing a lawsuit against UPS Freight, alleging violations of the Americans with Disabilities Act (ADA). “Employers must treat employees with disabilities the same as those without disabilities when issuing workplace benefits,” said EEOC St. Louis District director James R. Neely Jr. According to EEOC, Thomas Diebold began working at UPS Freight in 2006. Diebold suffered a minor stroke in 2013 and disclosed it to the employers during an annual driver physical examination. He was unable to renew his Department of Transportation (DOT) medical examiner’s certificate until December 2014. During the intervening period, Diebold allegedly was discriminated against.

The company, according to EEOC, had a policy of paying drivers who are reassigned to non-driving work due to a disability 10 percent less than drivers who are reassigned for non-medical reasons. Apparently, this was allowed under the union bargaining agreement. However, EEOC argues that this is not a valid justification for this pay difference. “Employers cannot seek refuge from the reach of the ADA by relying on a union agreement when the agreement itself requires discrimination based on disability,” said Andrea G. Baran, the EEOC’s regional attorney in St. Louis.

The agency seeks monetary compensation for Diebold, as well as injunctive relief requiring the company to change its policies and make sure that it does not treat its employees differently in terms of compensation because of their disabilities. This is a good example of how various policies and agreements cannot supersede the law.

August 6, 2017

Law Regarding A Day’s Rest After Working Six Consecutive Days Is Clarified

by Arkady Itkin

The following are the key points of California law regarding entitlement to a day’s rest after working more than six consecutive days that both employees and employers should know:

California Labor Code sections 551 and 552 generally guarantee workers a day of rest after six days of work.
A day of rest is guaranteed for each workweek. An employer is not prohibited from employing workers for more than six consecutive days that stretch across more than one workweek.

July 25, 2017

The Importance Of Witness Statements In Winning An Employment Case

by Arkady Itkin

The importance of witnesses and witness statements in an employment or a wrongful termination case cannot be overstated. Even one witness can make a difference between having a no case and having a case, and between having a weaker case and having a very strong case. This is especially true in harassment case, which often come down to he-said-she-said situation, i.e. where the victim of harassment makes certain allegations against his or her manager, while the alleged harasser denies all or most of the allegations. Although the words of a victim count for something, this puts the judge / potential jury in a predicament: who should they believe?

However, if there was even witness who is willing to come out and testify or sign a one page document stating what he saw, this will likely make a critical difference in your ability to prove your case. This is as important at trial as it is during any type of settlement discussions. Here are a few common examples where a witness can turn a potentially weak case into a strong case:

(a) Harassment case – an employee claims that her manager was grabbing her by her buttocks and was refer to her on multiple occasions as “cute enough to eat.” That manager denies ever doing or saying the above. However, one witness – co-worker is willing to testify or sign a declaration that she saw that manager grab the complainant by her rear on at least two occasions.

June 24, 2017

Broad California Anti-Retaliation Laws Allow A Claim Against “Any Person”

by Arkady Itkin

Unlike many other claims that can only be brought against employers or individual employees, California anti-retaliation laws extend much further. In many cases, a retaliation case can be made in many cases against “any person”. This certainly applies to FLSA (Federal Labor Standards Act) and many California Labor Code provisions.

In a recently decided case by a 9th Circuit – Arias v Raimondo – the court illustrated that point very well. In that case, a plaintiff, who did not have a lawful authorization to work in the US, brought various wage claims against his employer under FLSA. The employer’s attorney retaliated against the claimant by reporting him to the immigration authorities and by planning for the US Immigration authorities to take him into custody at his deposition. The 9th Circuit ruled that Plaintiff could proceed with his retaliation claim against both – the employer and the attorney.

Further, the court noted that the FLSA anti-retaliation provision specifically states that liability can be imposed on … “any person”, or “employer” which is defined as anyone acting directly or indirectly in the interest of that employer as relates to the employee making a claim. Surely, under this definition an employer-defendant’s attorney retaliating against a Plaintiff falls square within the definition of both “any person” and “employer” as noted above.

June 4, 2017

How To Present Your Wrongful Termination Case To A Lawyer

by Arkady Itkin

Here are my top three tips on presenting your potential employment case or wrongful termination case to a lawyer:

I. Be able to explain the basics of your case in just a few sentences to capture a lawyers attention right away. For instance the following would be an excellent way to initially describe your case: “I have been employed with company x for 10 years and received mostly good reviews. 3 weeks after returning from medical leave or after filing a workers comp claim, I was terminated for not being a “team players” or based on false accusations.” There is no reason with telling the lawyer that your case is very complicated, because lawyers believe that “complicated” case all too often means no case.

When describing the employer’s actions against you, be specific and do not use generic adjectives. For instance, “verbal assault” or “harassment” doesn’t really tell your lawyer about what happened. But, “I am going to kill you” or “he grabbed me by my breast” gives that specific information that would be really useful to your lawyer.