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Archives for June 2020

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

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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 for a free confidential case evaluation with no obligation.

What Are California’s Overtime Laws?

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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.

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?

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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 evaluation!

SCOTUS Rules To Protect Gay & Transgender Employees from Discrimination

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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!

Can I Be Fired For Joining the Black Lives Matter Protests?

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Assuming you did it on your own time, the answer is no. Employees cannot be fired because they joined the Black Lives Matter protests, or for any other political activity in which they participate.

At the Federal level, and in many states, political affiliation is not one of the traditional “protected classes” of anti-discrimination law. California, however, is among a minority of states that protect political affiliation and activity from workplace discrimination. Although California’s Fair Employment and Housing Act does not prevent employment discrimination on the basis of political affiliation, under California Labor Code §§1101 and 1102, employers may not interfere with or control employees’ political activity.

California’s law protecting political activity dates back to the New Deal era and the organized labor movement, which was growing in political power at that time. But the law is not limited to protecting labor activism and organization. The California Supreme Court has interpreted the law expansively in the intervening years. Under the law, banding together with others in support of a cause can be protected “political activity”; as could expressing support for political reform by a symbolic gesture, such as wearing a pin or an armband, or displaying an appropriate banner.

Based on this interpretation of the law, an employee would be protected from retaliation for marching in a Black Lives Matter protest on his or her own time. The employer could not discriminate against the employee for tweeting about the movement; or for discussing the movement with coworkers during an employee’s rest break. If the employer’s dress code allows t-shirts, the employer could not discriminate against an employee who wore a Black Lives Matter t-shirt to work, and the same goes for pins, posters, or other emblems of the movement. An employee probably cannot walk off the job in order to protest, but if the political activity is otherwise lawful and doesn’t interfere with the employee’s work, it should be protected.

Moreover, because the United States and California Constitutions both protect the right of the people to peaceably assemble and petition for a redress of grievances, terminating an employee for participating in a Black Lives Matter march might also violate the common law prohibition on terminating employees in violation of public policy. If your employer retaliates against you after finding out you joined in the Black Lives Matter protests, contact an employment attorney to protect your rights.

Of course, other, more conventional political activity is protected as well, and actions short of outright termination might also violate the law. For example, an employer could not prevent an employee from wearing a “Feel the Bern” t-shirt, assuming a t-shirt is otherwise allowed by the employer’s dress code. A manager cannot ridicule an employee for being among the tens of thousands of Americans who cast protest ballots for Mickey Mouse or Santa Claus. Without question, an employer cannot fire or threaten to fire an employee because that employee supports a particular cause or candidate. Similarly, an employer cannot refuse to hire a person based on that person’s political beliefs or affiliations.

In an extreme case, where political affiliation discrimination turns violent, California’s hate crime law, known as the Ralph Act, may offer employees even further protection. In California, verbal or written threats of violence, physical assault, graffiti, vandalism, and property damage can be considered hate crimes if motivated by, among other reasons, a person’s political affiliation. If

workplace discrimination on the basis of political affiliation turns violent, or potentially violent, an employer could be liable for failing to act on reports of workplace conduct that would violate the hate crime law.

If you think your employer’s actions may violate California laws protecting political affiliation, you should contact an experienced employment attorney who can assess your situation and advise you on how you might protect your right to political affiliation.

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

Whistleblowers May Sue Their Employer Under False Claim Statutes When the Employer Commits Government Fraud

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Government contracting is a huge business that spans numerous industries and trades. Contracts between private contractors and State and Federal government agencies account for hundreds of billions of dollars in government spending. Many reports have noted that oversight by government auditors can be lax at times. (See, e.g., Nick Cahil, Audit Finds California Agencies Didn’t Follow Bid Rules, Courthouse News Service, (June 20, 2017).) Government agencies simply do not have the resources to supervise the performance of every contract, and this lack of oversight opens the door to waste, mismanagement, and outright fraud. (See Patrick McGreevy, Caltrans investigations find waste and wrongdoing in state transportation programs, Los Angeles Times, (Dec. 6, 2019).)

Unfortunately, the temptation to treat government contracts as a source of free money proves too much for some contractors. In an effort to curtail fraudulent government contracting, State and Federal governments have placed the power to root out and prosecute fraud in the hands of the people most likely to discover that fraud: employees working on the front lines. State and Federal False Claims Acts create a mechanism called a “qui tam lawsuit,” by which employees of government contractors can blow the whistle on their employers’ frauds by filing a civil lawsuit on behalf of the government.

What Counts as a False Claim?

In some sectors, such as defense, the government cares so deeply about proper contract management that whistleblower laws can apply in cases of “gross mismanagement” or “gross waste” of a government contract. For a normal qui tam case, however, the contractor must usually know it is somehow defrauding the government.

The classic example of a false claim is billing the government for services not actually performed or goods not actually delivered. For example, if a company has a contract to excavate an embankment on government property, and the company falsely bills the government for ten laborers, when in reality the job only required five laborers. Or perhaps a company has a contract to sell medical supplies to a Medicare provider, and it ultimately charges the government for double the supplies that it actually delivers. Either of these situations would be a “false claim.”

More likely the contractor’s fraud will be more sophisticated. A company might take advantage of complicated billing and accounting cycles to falsify records to the government in a way that benefits the contractor. A company might also structure transactions in a way that falsely amplifies overhead costs in order to justify a higher bill that appears normal on its face. Right from the beginning, a company might falsely certify to the government that its costs will be $X, when in fact the company knows the costs will be much higher than $X, in order to win a bid on a contract.

These cases can be very tenuous because government contractors should be held to the highest degree of transparency, considering they are ultimately paid with money that comes from taxpayers. Even something as seemingly minor as an undisclosed conflict of interest during the bidding process can create a false claim. These contracts need to be squeaky clean, and, as they say, if there is a question, there is no question. Anyone who thinks there might be a false claim situation should ask one question: does something about this situation not quite add up? If the answer is “yes,” the situation may warrant investigation.

What About Fraud by the Employees of Government Contractors?

In some cases, employees may submit false claims through their employers. The employer may be totally unaware the government is being defrauded by a “bad apple” within the organization, but that can still count as a false claim for which the employer may be liable to the government. For example, if an office manager for a healthcare provider has found a way to embezzle from his employer by creating fake invoices, the employer may still be held accountable if the embezzled money is ultimately paid out under a government contract for Medicare or Medicaid services.

What Counts as the “Government”?

False claims can be those submitted to any part of a State or Federal government. Usually, a contract will be negotiated with a government agency, or a subdivision of that agency. The scope of the “government” for qui tam purposes is, therefore, fairly broad. In California, for example, the arms of the government that can receive false claims include cities, counties, and the University of California system.

Who Can Be a Whistleblower?

Anyone privy to a fraud could be a potential whistleblower, but the most common qui tam plaintiffs are employees of the contractor where the false claim originated. Employees are right there in the thick of things every day, so they see what’s going on. More importantly, many frauds can be complicated, and employees often have enough expertise in their industry to spot when something isn’t right.

What’s In It For the Whistleblower?

Although many whistleblowers are motivated first and foremost from the desire to thwart corruption, the fear of retaliation, and the inconvenience of being involved in a large lawsuit, gives otherwise motivated whistleblowers a strong incentive to stay silent. In order to balance that incentive, State and Federal laws permit successful whistleblowers to share in any recovery, which can be substantial.

What Happens if the Employer Finds Out About the Whistleblower?

Many employees justifiably fear retaliation by their employers if they reveal fraudulent conduct. Fortunately, qui tam laws also include strong whistleblower protections. If an employer decides to double down on its unlawful conduct by retaliating against the employee who blew the whistle, the employee can recover money damages independent of any recovery in the underlying qui tam case.

What Should I Do if I Think My Employer Defrauded the Government or Otherwise Submitted a False Claim?

Qui tam laws are extremely complex. If you think your employer has committed fraud or falsity in connection with a government contract, you should contact an experienced attorney for a free case evaluation.

FMLA Protects Employees Who Take Their Loved Ones on End-Of-Life Trips

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The federal Family and Medical Leave Act (FMLA) traditionally gives covered employees the right to take up to 12 weeks of unpaid leave to care for a family member such as a spouse, child, or parent, if the family member has a serious health condition. 29 U.S.C. § 2612(a)(1)(C). What qualifies as “caring for” a family member is not always clear, however. As we reported in 2014, in a win for employees, the Seventh Circuit Court of Appeals in Ballard v. Chicago Park Dist., 741 F.3d 838, 843 (7th Cir. 2014), ruled that taking a terminally ill loved one on an end-of-life trip qualifies as “caring for” a family member, and accordingly, is protected leave under the FMLA.

Beverly Ballard was fired from her job with the Chicago Park District after she took her terminally ill mother on an end-of-life trip to Las Vegas. Ballard v. Chicago Park Dist., 900 F. Supp. 2d 804 (N.D. Ill. 2012). It was undisputed that Ballard cared for her mother at their home in Chicago. Ballard was her mother’s primary caregiver, and was responsible for feeding and bathing her mother, as well as administering her medication.

In the district court proceedings, Defendant Chicago Park District argued that the FMLA did not protect Ballard’s trip to Las Vegas because the trip was not related to an ongoing course of medical treatment. The district court disagreed, denying defendant’s motion for summary judgment, and finding that “[s]o long as the employee provides ‘care’ to the family member, where the care takes place has no bearing on whether the employee receives FMLA protections.”

The Seventh Circuit affirmed the district court’s decision. The Seventh Circuit noted that on its face, the FMLA provision at issue refers to “care” of a family member, and not “treatment.” Furthermore, the Seventh Circuit held that the FMLA does not restrict care of a family member to care given at home. The Court found that Ballard continued to provide her mother with her basic medical, hygienic, and nutritional needs while visiting Las Vegas, and noted that due to an emergency at the hotel,

Ballard was required to find her mother another source of insulin and pain medication. Accordingly, the FMLA protected Ballard’s trip to Las Vegas.

Ballard remains one of the most useful decisions to support the proposition that “care” leave pursuant to the FMLA is not limited to care provided while seeking medical treatment so long as the employee is providing some form of active physical care (i.e. medical, hygienic, nutritional) related to a family member’s serious health condition. It also remains strong authority for the proposition that such care, to qualify under the FMLA, need not be geographically limited to one’s home or doctor’s office. In other words, taking FMLA leave to “care” for a loved one does not mean you both go into lockdown in your home, and only see the light of day when you need to go to the doctor’s office.

A recent decision (from a district court within the Fourth Circuit) again highlights the fact that the FMLA has no geographic limits. In Meyer v. Town of Wake Forest, Case No. 5:16-CV-348-FL, 2018 U.S. Dist. LEXIS 167130 (E.D.N.C. Sept. 28, 2018), the plaintiff had FMLA leave approved both to care for his spouse’s serious health condition, and also to care for their newborn baby. During his FMLA leave, among other things, Plaintiff took his wife and child on trips to the beach and the state fair. The employer argued FMLA leave does not cover these trips, i.e. that there is a geographical limitation to FMLA protected activities. Id. at *20. The Court also noted the absence of any geographical limitation in the text of the FMLA on activities when caring for a spouse with a serious health condition. The Meyer court, however, declined to resolve the issue formally, noting that Plaintiff had also been approved to care for his newborn (who was also on the trips), and that such leave is clearly not geographically restricted.

Even after Ballard and Meyer, however, employees should still give careful thought before attempting to combine FMLA leave to care for a relative with travel. For example, in a recent case in the Northern District of California, an employee was not even able to take FMLA for the time in which the employee traveled from work to the location of the ill relative. The rationale for the court’s decision was that, during the drive, the employee was not “caring” for the relative. See Aguirre v. California,

Case No. 16-cv-05564-HSG, 2019 U.S. Dist. LEXIS 129752, at *10-*11 (N.D. Cal. Aug. 2, 2019).

So, hearkening back to Ballard, employees should be aware that if you take your ill relative to Las Vegas, you may still face a challenge by your employer if you are found spending large portions of the day alone on the casino floor, or driving solo up and down the Strip.

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

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