Archives for June 2020

What Are the Limitations To At-Will Employment in California?

You’ve probably heard of at-will employment before. Maybe you saw it as a clause in your employment agreement, or maybe it came up at a time when you were fired or laid off by an employer. In a nutshell, it’s the concept that your employer (or you) can terminate your employment at any time and for any reason or no reason at all.

At-will employment is widely acknowledged and used throughout the United States – so widely, in fact, that only Montana doesn’t recognize it. The basic reason for its existence is to keep employees and employers free from an undesired obligation to work for or employ another party.

Although the presumption in California is that all employment is at-will, there are exceptions.

At-will employment in California is limited by the following:

  • Federal and state employment laws
  • Implied contracts
  • Covenants of good faith and fair dealing

If an ostensibly at-will termination is made for any reason that runs counter to these factors, employees may be able to recover compensation by filing a wrongful termination lawsuit. Let’s take a look at how each of these affects at-will employment.

Federal & State Employment Laws

Even if employment is at-will, an employer’s motivation to terminate cannot be based on an illegal factor. In other words, an employer cannot fire an employee for an illegal reason and attempt to claim that at-will employment protects the decision.

“Any reason” does not protect illegal reasons.

Californians enjoy many protections at work that safeguard protected classes (age, sex, race, religion, skin color, gender identity, and others) from discrimination and retaliation when they report unlawful behavior. An employer would therefore be incorrect in assuming they are protected by at-will employment for firing someone who requested a reasonable accommodation for their disability or for firing a female employee after she reported sexual harassment.

Implied Contracts

Employees may be protected against at-will employment if an implied contract is created between an employee and employer that leads the employee to believe termination at-will would not occur. The implied contract can be written or oral and there is no requirement for a written overarching employment contract to exist for an implied contract to also exist.

If an employee is led to believe through company manuals or conversations with managers that he or she would not be terminated without prior notice, a certain number of warnings, or any other circumstances, an implied contract may be in effect and can be enforced.

Covenant of Good Faith & Fair Dealing

California is among the few states that recognize another important limitation to at-will employment: the covenant of good faith and fair dealing. While not explicitly an employment protection, this legal mechanism permits grounds for plaintiffs to sue when decisions by the other party in a legally binding contract are made in bad faith, arbitrarily, or maliciously.

Like an implied contract, this isn’t exactly easy to prove in a lawsuit because there aren’t any clear statutes to back up a claim. That said, employees who were arbitrarily let go or fired by an employer who explicitly sought to cause them financial harm can argue there was a breach of the covenant of good faith and fair dealing.

Were You Fired At-Will?

Employers who fire or lay off their employees are quick to reference at-will employment clauses in their contracts. Regardless of at-will employment, “any reason or no reason at all” is not the case when an employee is being fired for an illegal reason or in violation of an implied contract or the covenant of good faith and fair dealing.

If you believe you were wrongfully terminated and want to seek legal action against your employer, reach out to the employment law attorneys at Haeggquist & Eck, LLP for help. We offer free consultations to all prospective clients so we can help you assess the validity of your claim and options for taking legal action.

Contact us online or by calling (619) 342-8000 to schedule your free consultation today.

What Are California’s Overtime Laws?

Overtime pay has been enshrined in federal law for the better part of a century, thanks to the Fair Labor Standards Act of 1938 (FLSA). Among a multitude of landmark protections for workers that were established at that time (and in the following decades), the FLSA provides employees who work more than 40 hours per week with pay at a rate of one-and-a-half times their normal rate for each additional hour worked.

As a federal statute, the FLSA provisions regarding overtime apply to all 50 states, which must adhere to it as a bare minimum. California goes beyond what federal law requires in some areas of overtime compensation, so please keep in mind that the protections we’ll describe below apply to California and may only apply to California. If you are concerned about learning overtime compensation laws for another state, check with its statutes.

More than Eight Hours in a Single Day; More than 40 in a Single Workweek; More Than Six Days in a Single Workweek

In California, non-exempt employees earn overtime compensation when they work more than eight hours in a single workday, or more than 40 in a single workweek, or more than six days in a single workweek. This provision is important because it’s a point where California law diverts from the minimum amount of federal protection under the FLSA, where only hours worked beyond 40 in a single workweek are eligible for overtime.

This disincentivizes employers from scheduling back-to-back shifts with only a short break between them or other potentially unintended consequences that may go against workers’ interests. California doesn’t outlaw this kind of “creative” scheduling, but instead ensures overtime compensation for employees who may be subjected to odd schedules throughout the workweek.

Time-And-A-Half Compensation & Double Time

The federal and state standard for overtime compensation is time-and-a-half, which means an employee will be paid at time and a half for each hour of qualified overtime work. A full hour does not need to be worked, but rather any number of minutes worked in excess of eight in a day or 40 in a workweek will be compensated at the same rate even if they don’t add up to a full hour.

Double time is a rate twice that of an employee’s normal pay rate. This rate is triggered when an employee works more than 12 hours in a single workday or more than eight hours on the seventh consecutive day of work.

Special Holiday Pay Is Not Required in California

It’s a common misconception that overtime or double-time rates are mandated by California law when an employee works on a holiday. This is not the case, and what may contribute to the misconception are the many employers who adopt policies to provide additional compensation on certain holidays. The likely reason for this is to encourage workers to come in for their shifts so that the business can operate on a day when it may receive an increase in sales.

In short, holiday pay is a perk some employers provide but it is not required by law.

Are You Being Fairly Compensated?

If your pay stubs aren’t reflecting accurate compensation for the hours you worked, or accurately account for the hours you worked, reach out to the employment law attorneys at Haeggquisr & Eck, LLP for assistance.

We can help you review your pay stubs, employer’s compensation policies, and applicable state and federal laws to help you make sure your paycheck is accurate. If you are being shortchanged for the work you’re doing, we can help you recover what your employer owes you by taking legal action.

For more information about how we can assist you, reach out to Haeggquist & Eck, LLP online or by calling (619) 342-8000.

Why Does It Matter If I Am a Misclassified Worker?

Employers have an implicit incentive to cut costs everywhere they see them. This widens profit margins for themselves and their investors and contributes to the overall viability of the business. In and of itself, this isn’t a bad thing because a viable business is one that can continue to employ its workers. Where it can become problematic, however, is when the cost-cutting endeavors directly and illegally impacts employees.

There are many ways an employer can violate wage laws, but employee misclassification has the potential to go unchecked the longest. This is because employee misclassification involves labeling a worker in a manner such that the employer’s obligations to pay overtime or certain taxes are limited.

Typically, workers will be misclassified as “exempt” or as “independent contractors.” Let’s take a look at each and how you may be able to identify if you’ve been misclassified.

Exempt vs. Non-Exempt Employees

When we’re talking about employment law, “exempt” almost always refers to an employee’s eligibility to earn overtime pay. The Fair Labor Standards Act makes this distinction and provides that overtime pay is calculated at a rate of one-and-a-half times the employee’s regular rate. In California, overtime pay is earned for each hour greater than 40 in a week or eight in a day.

There are nuances to overtime compensation laws in California that we’ll explore in another post, but for now that’s the basics of how overtime pay works. Clearly, employers have a financial incentive to label certain workers as “exempt” from overtime compensation when they should really be classified as non-exempt. Misclassification leaves the door open to demand more hours and more work from an employee without consequence because exempt workers aren’t entitled to overtime.

Here is how California law defines a non-exempt worker:

  • They DO NOT earn a monthly salary of at least no less than twice the state’s minimum wage for full-time employment
  • They DO NOT exercise discretion and independent judgement with regard to evaluating possible courses of action and deciding to take an action after consideration.
  • Less than 50 percent of their time is spent performing non-exempt duties, such as manual labor.
  • They ARE NOT an executive, administrator, salesperson, computer professional, artist, or another professional with specific skills and education.

Your job title is irrelevant if the reality of your job doesn’t match up to these standards. It’s not uncommon for employers to inflate their employees’ titles to make them sound as if they’re performing exempt functions when these employees should really be classified as non-exempt workers.

Independent Contractor Misclassification

Unlike exempt misclassification, inappropriately classifying workers as independent contractors not only helps the employer avoid paying overtime and payroll taxes, but also makes it harder – or even impossible – for the worker to bring wrongful termination, discrimination, sexual harassment, and other types of employment-based lawsuits.

An independent contractor is a perfectly legitimate classification. People who are independent contractors are often contracted by an employer to do a special job or perform work for a limited period of time, like an accountant.

That said, not everyone who is labeled as an independent contractor may actually be legally considered as such. California recently provided a so-called “ABC Test” to help people determine if they should truly be classified as independent contractions.

According to the ABC Test, an independent contractor is someone who:

  1. Is free from control and direction of the company in performing work, both practically and in the contractual agreement between the parties;
  2. Performs work that it outside the usual course of the company’s business; and
  3. Is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the company.

If your relationship to an employer DOES NOT align with the above criteria, you may actually be misclassified and should be a full-fledged employee. Chances may also be likely that you should be a non-exempt employee and entitled to earn overtime pay.

Do You Need To Hold an Employer Accountable?

If you believe you are a misclassified employee and have been improperly denied overtime pay, certain benefits, or have otherwise had your employment rights violated, reach out to Haeggquist & Eck, LLP for help.

Contact us online or by calling (619) 342-8000 for a free consultation!

Can My Employer Require Me To Take an Antibody Test?

The short answer is: No. Businesses can’t require their employees to take COVID antibody tests. The U.S. Equal Employment Opportunity Commission (“EEOC”) issued new guidance on June 17, 2020 that although employers can require employees to take a COVID-19 test, they cannot require employees to take a test for COVID-19 antibodies.

The EEOC pointed to recent guidance from the Centers for Disease Control & Prevention (“CDC”) that says that antibody tests shouldn’t be used to determine if someone is immune to the virus or as a basis for decisions about allowing workers back to work.

“An antibody test constitutes a medical examination under the ADA,” the EEOC said. In light of the CDC’s guidelines that that antibody tests shouldn’t be used to make decisions about people returning to work, the EEOC found that an antibody test does not meet the ADA’s standard for medical examinations for current employees. Thus, the EEOC concluded that “requiring antibody testing before allowing employees to re-enter the workplace is not allowed under the ADA.”

The EEOC stated that it would continue to closely monitor the CDC’s recommendations, and it could update its guidance in response to changes in the CDC’s recommendations.

Call (619) 342-8000 or contact Haeggquist & Eck, LLP online to learn more about how we can help you.

SCOTUS Rules To Protect Gay & Transgender Employees from Discrimination

This week, the U.S. Supreme Court finally ruled that Title VII of the Civil Rights Act protects gay and transgender employees. In other words, a U.S. employer may not discriminate or retaliate against its employee because the employee identifies as LGBTQ. The majority opinion, surprisingly penned by the conservative Justice Gorsuch, cited the plain text of Title VII, which bars discrimination based on sex. Judge Gorsuch recognized that “sex” does not only apply to the traditional gender binary, but also extends to sexual preference and identity. Five other justices, including Justice Roberts (another conservative), joined the opinion, with Justices Alito, Kavanaugh, and Thomas dissenting.

While this type of discrimination against gay and transgender employees has long been prohibited under California law, many other states were mum on whether employers were permitted to discriminate against employees on the basis of identifying as LGBTQ. One such state was Michigan, where in 2013, Aimee Stephens was fired from her job at a funeral home after she informed her employer that she would undergo a gender reassignment surgery. Aimee, and two other plaintiffs, brought this lawsuit to vindicate their rights under Title VII, a Federal Statute. Unfortunately, Aimee died just a month before this historic decision. While Aimee isn’t reading the opinion with us this week, her courage and tenacity will protect millions of LGBTQ employees who fear coming out at work.

Although this ruling focused on protecting gay and transgender employees from being fired on the basis of their sexual orientation or gender discrimination, it’s likely that the decision sets a precedent to provide other protections for members of the LGBTQ community at work nationwide. Indeed, this decision is a giant leap towards equality for workers.

A link to the full opinion can be found here.

To schedule your free initial consultation, contact us online or call (619) 342-8000 today!

I Have Business Interruption Insurance. Can I Recoup My Businesses’ Financial Losses as a Result of COVID-19?

Everyone who has ever opened up their own business knows that you can’t run a business without taking risks. To eliminate or mitigate this risk, however, business owners purchase insurance. One type of insurance a business may, and should, purchase is “Business Interruption Insurance” – which replaces lost income and extra expenses when business operations are involuntarily suspended, interrupted, curtailed, or when access to the premises is prohibited because of direct physical loss or damage to the property, or by a civil authority order that restricts or prohibits access to the property. This coverage is standard in most all-risk commercial property insurance policies.

Haeggquist & Eck, LLP is representing businesses who have purchased business interruption insurance as part of their commercial property and have had their claim for losses denied. ABC News recently spoke to our firm and our client about these claims. You can view the news clip and article here.

When the coronavirus pandemic hit, business owners who have been paying premiums for this coverage let out a big sigh of relief, reasonably believing their business losses would be covered. The insurance companies, however, have categorically denied their claims, typically with no good faith investigation into their claims. As such, businesses are now filing suit, asking courts to require insurance companies to abide by the language of the policies and provide coverage to their policyholders.

As months pass without any financial help from insurance companies, businesses struggle to stay afloat. Marc Bennett of Pappy’s Barber Shop here in San Diego has had to dip into his savings account to keep his business alive. Although Marc’s business is slowly getting back on track, he knows he is in for a tough battle, as evidenced by many of his fellow barbers permanently closing their doors.


Hundreds of business interruption cases have already been filed in the United States and abroad. Because of the common issues of fact and law in these claims, and substantially similar policy language, many of these cases have been brought as class actions.

Additionally, bipartisan groups in Washington D.C. and several states have introduced legislation requiring insurance companies to provide coverage for losses related to COVID-19 for policyholders who purchased business interruption coverage.

Businesses are taking action to get the coverage they paid for. In New York, Times Square went completely dark on May 26th to draw attention to the plight of businesses across the country who are being denied this important coverage – coverage for which they have paid premiums for years.


If you have a commercial property insurance policy, you may have business interruption insurance. You may have a claim for coverage even if you have a “virus exclusion” in your policy, or your insurer cites other reasons for denying coverage.


Let us help you receive the coverage you paid for. If you would like to receive a free, no-obligation evaluation of your rights to seek insurance coverage for your business’ losses, please contact Haeggquist & Eck, LLP at (619) 342-8000, or contact us online.

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