Court Awards Employer With Attorney Fees After They Won!

February 27, 2012

Over the years I have been asked numerous times why employers cannot get back their attorny fees when they win, especially when the claim was frivolous from the outset. Plaintiff attorneys normally work on a contingency fee arrangement therefore they have nothing to loose by filing a lawsuit. They take advantage of the fact that most employers feel it is “cheaper to settle.” That still may be true, depending on the circumstances and the amount in question, however, now there may be some light at the end of the tunnel.

In Kirby v. Immoos Fire, a California court held that attorneys’ fees were properly awarded to an employer who prevailed in a putative class action alleging missed rest breaks. The court relied on the bilateral fee-shifting provision of Labor Code section 218.5, which provides that the prevailing party in an action alleging violations of certain provisions of the Labor Code is entitled to recover its attorneys’ fees. Section 218.5’s fee-shifting provision excludes actions alleging claims for unpaid minimum wages or overtime wages covered by Labor Code section 1194 (which has a unilateral fee shifting provision allowing only a prevailing plaintiff to recover attorneys’ fees). In this case, the plaintiff alleged (among other things) a claim for unpaid overtime wages, as well as a claim for missed rest periods. The court held that the employer could not recover its fees incurred in defending the overtime claim, but could recover its fees incurred in defending the rest period claim.

This case presents a positive development for employers by providing precedent for an award of attorneys’ fees in actions alleging meal and rest period violations should the employer prevail. This does not mean that it may not be economically sound to try to resolve matters at the pre-litigation stage. Litigation is costly and is still a roll of the dice once the matter is presented to a jury. Hopefully the decision noted above will begin to give employers a more even playing field.

Expressing Breast Milk At Work-A State and Federal Law

February 20, 2012

Look, after thirty-two years of trying to keep employers out of hot water, I know some of you may find this topic “amusing” for lack of a better word. Stay away from jokes and any kind of innuendos. One of my clients, the CEO of the company, came upon his administrative assistant expressing her breast milk in the break room. In a moment of what I later deemed to be insanity, he looked at his employee and stated, “Oh, if I’d known you were going to be doing that, I would have brought cookies!” Do you think she sued?

Now, before you ask, yes, this really is a wage and hour law issue (and can be gender discrimination as well), as the new rules regarding nursing mothers included in the Patient Protection and Affordable Care Act of 2010 have been added as amendments to the Fair Labor Standards Act. So, what does this mean? The feds are also affording protections in this area.

Here’s what the law requires:

  • Employers with 50 or more employees must provide “a reasonable break time for an employee to express breast milk for nursing her child for 1 year after the child’s birth each time such employee has need to express the milk.”
  • The employer must provide “a place, other than a bathroom, that is shielded from view and free from intrusion of coworkers and the public, which may be used by an employee to express breast milk.”
  • Employers with fewer than 50 employees are subject to the same requirements unless complying with the law “would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer’s business.” 
  • Employees do not have to be paid if they take a break during work time under the law.

There are a few important things that employers should keep in mind with respect to this law:

  1. While the additional leave provided by the law can be unpaid, employees who use what would otherwise be a paid break in order to express milk must be compensated in the same manner as other employees for the break time. Additionally, for break time under the law to be unpaid, the employee must be “completely relieved of duty,” and should not perform any work.
  2. The law does not apply to employees who are exempt from Section 7 of the Fair Labor Standards Act, which is the section governing overtime. Accordingly, executive, administrative, and professional employees, as defined under the FLSA, are not entitled to breaks to express milk under federal law (but under state law they could be so grant the time to exempt employees as well).
  3. While there is an “undue hardship” exception for employers with fewer than 50 employees, there is no such exception for employers with 50 or more employees. In other words, larger employers are required to comply with the law even if doing so would be expensive or disruptive to their operations. 

In closing, please make sure you have a “Lactation Policy” in your handbooks the next time you update it.

A ST. Valentine’s Day Word of Caution!

February 13, 2012

 Tuesday, as Hallmark continues to remind us, is Valentine’s Day.    A day of love, a day of relationships, and a day of romantic thoughts.   Or, as I like to also say, another opportunity for sexual harassment allegations to raise its ugly head! Managers, be careful about your expressions of “love.” I’m not being insensitive but the times are changing! No candy hearts, boxes of chocolate, cute cards, or flowers unless it is for someone outside the work environment.

We have regularly discussed and posted about the impact of social media on office parties and events, generally focusing on those end-of-the-year holiday parties.    But this time of year similarly warrants some discussion, as Valentine’s Day is often fraught with textbook examples of sexual harassment and discrimination claims in the workplace.   Cases have been brought over the years to address claims when one employee has given another employee a “suggestive” gift or card, or even a nice looking bouquet of flowers, on Valentine’s Day.   Court dockets have also been filled with claims of unwelcomed harassment by an employee who was made to listen to another’s detailed depiction of an ideal Valentine’s Day night, or the extent to which one might have to remedy a bout of loneliness on the holiday.

We now know that social media has not simply added new potential causes of action to the lexicon, but has also served as a new forum for traditional claims to materialize.    In that vein, social media, and particularly employee blogs and social networking sites, may be rife with opportunities for one to engage in unwelcomed harassment of another employee, even unintentionally.    Picture, for example, the “shy” employee who may not be so quick to stand before another and engage in harassing behavior face-to-face, but might instead engage in inappropriate behavior from the comfort of his or her home keyboard.

This entry will hopefully not be taken as the musings of a Valentine’s Day scrooge, but instead as a prophylactic effort to remind employers about the dangers inherent with the increased use of social media on holidays such as these.    Employers always strive to toe the line between operating a formal, Orwellian-like workplace, and the desire to maintain good morale in an informal setting that allows for holiday parties and off-the-cuff banter. Still, the more you can maintain the proper balance, and remind those in your employ that the workplace must still remain a professional, lawful environment – even when it comes to communications outside the four walls of your office – the more likely it is that your company can avoid legal exposure.

US Department of Labor and IRS Join Forces

February 6, 2012

And you thought that governmental agencies didn’t share information? Think again.

The US Department of Labor (DOL) and the Internal Revenue Service (IRS) signed a Memorandum of Understanding that is intended to improve the agencies’ coordination of efforts to end business practices of misclassifying employees in order to avoid providing employment protections.

Under these memorandums of understanding, the U.S. DOL will now share information and coordinate law enforcement with the IRS and participating states providing an opportunity to “level the playing field for law-abiding employers” and ensuring “that employees receive the protections to which they are entitled under federal and state law.”

These memorandums of understanding arose as part of the DOL’s Misclassification Initiative to prevent, detect, and remedy employee misclassification and also provide an opportunity to “foster, promote and develop the welfare of the wage earners, job seekers and retirees; improve working conditions; advance opportunities for profitable employment; and guarantee work-related benefits and rights.”

Employers have appreciated the advantages of work arrangements with those considered to be independent contractors because these arrangements often allow for cost savings and flexibility.  The “advantages” can be significant, as employers do not pay unemployment insurance taxes, workers’ compensation premiums, or the employer’s portion of Social Security and Medicare taxes for independent contractors.  In addition, these workers generally are not eligible for other benefits such as insurance and retirement benefits and also are not protected by most employment laws and, therefore, typically give up overtime wages, pensions, and protections from unlawful discrimination.   

So, what do the Memorandums of Understanding and the Misclassification Initiative mean for employers? Employers who use independent contractors should be prepared to defend its classification of these workers as independent contractors. Employers may risk exposure to liability for failure to pay minimum wages and unpaid overtime, unpaid payroll and related taxes and withholdings, as well as liquidated damages, fines, penalties and any potential attorneys’ fees and costs. 

If you have any doubts contact us.