Articles Posted in Uncategorized

In addition to unemployment benefits compensation for those workers who are not disabled, the unemployment insurance code of California provides for disability compensation under Unempl. Ins. Code sections 2601 and 3272. Unemployment compensation disability benefits are paid from the disability fund. A worker is deemed disabled on any day in which, because of physical or mental condition, he was unable to perform his regular or customary work. Disability may include illness, injury, pregnancy, childbirth, infection with a communicable disease, acute alocoholism, or acute drug-induced illness.

The requirements for eligibility for disability benefits generally include (Unempl. Ins. Code sec. 2627):

(a) Making a claim;

In a unanimous opinion filed on October 27, 2008, the California Supreme Court held that when an employee voluntarily pursues an internal administrative remedy prior to filing a Fair Employment and Housing (FEHA) complaint, the statute of limitations (of one year) on the FEHA complaint is subject to equitable tolling.

This decision is important to those employees who are concerned about missing the one-year deadline on filing a Discrimination Charge with DFEH (Department of Fair Employment and Housing) and wonder if they should pursue internal administrative remedies first, provided optionally by their employer, skip the internal remedies altogether, or pursue both – the internal administrative action and DFEH procedures.

The recent Supreme Court holding establishes that an employee no longer need to worry about missing the DFEH deadline while pursuing an internal remedy. This decision makes a lot of sense as it reiterates the Court’s continuing efforts to encourage employees/potential litigants to seek and find out-of-court remedies to their grievances before filing a court action.

Partnership is an association of two or more people to engage in business for the purpose of proportionately sharing the profits and losses of that business (as well as assets and liabilities). This means that partners decide on how they will share the profits and losses in % terms. A partnership can be formed in writing or orally, as what makes an association a partnership is not the paperwork, but the actions of the members of a business association. In other words, if people act like “partners,” then they will be recognized and treated as partners under California partnership law.

Despite that, like in any business deal, written partnership agreements are highly recommended to memorialize the essential terms and conditions of the business relationship and to avoid misunderstandings between the partners.

Like any other relationship, such as friendship, marital ties, etc… a business partnership necessarily involves and thus depends on the character and the emotions of its members. Thus, it is absolutely crucial that if you decide to enter into a business partnership with another person/s, you should actually like each other, respect each other, and at least somewhat feel comfortable around each other, as you will be spending a lot of time together.

The main distinction between an employee or at-will employee and an independent contractor is that the independent contractor is responsible to the principal solely for the result of the work that is the subject of the contract between the parties. Independent contractor is responsible to principal only for result and not manner or means by which it is accomplished. Generally, whether a worker is an employee or independent contractor is a question of fact that depends on the trier of fact’s evaluation of several factors, most notably whether the employer has the right to control not only the result but also the means by which the work is accomplished. Ali v. L.A. Focus Publication 112 Cal.App.4th 1477 (2003).

Labor Code section 2750.5 sets forth a number of factors that may prove that such an individual is working as an independent contractor, Among these factors are: (1) the individual worker has the right to control and discretion as to the manner of performance of the service contract in that the result of the work and not the means by which it is accomplished is the primary factor bargained for; (2) the workers is customarily engaged in an independently established business; (3) the worker’s independent contractor’s status is bona fide and not a subterfuge to avoid employee status; and (4) if the worker was performing work for which a contractor’s license is required, he or she should have held such a license.

No matter what the status of the worker is, employers often wish to include “at will” language in service contracts. However, such language should be removed from a contract with an independent contractor, as language describing a relationship as “at-will” generally goes to show that an employment relationship was created because an employer can end a working relationship at any time and for any or no reason.

A new municipal law has been enacted by San Francisco in 2007, under which all employers must provide paid sick leave to each employee (including temporary and part-time employees) who performs work in San Francisco.

This “San Francisco Paid Sick Leave” began to accrue on February 5, 2007 for employees working for an employer on or before that date. For employees hired by an employer after February 5, 2007, paid sick leave begins to accrue 90 calendar days after the commencement of employment.

Under this law, for every 30 hours worked, an employee shall accrue one hour of paid sick leave. Employees of employers for which fewer than 10 persons (including full-time, part-time, and temporary employees) work for compensation during a given week may not have more than 40 hours of accrued paid sick leave saved at any time. Employees of other employers may not have more than 72 hours of accrued paid sick leave saved at any time. An employee’s accrued paid sick leave carries over from year to year. Employees are entitled to paid sick leave for their own medical care and also to aid or care for a family member or designated person.

If you are an employer who has employees working at the cash register or in any other position where they exchange merchandise or services for money, due to a common human error, these employees will make mistakes and will end up with cash shortages once in a while by not balancing the cash register properly or other mistakes.

An employer should be careful to not pass these losses to the employee and not make the employee pay for those shortage or deduct the amounts missing from the employee’s pay. Under California law, absent a showing of intentional dishonesty or gross negligence, an employer may not deduct for ordinary losses caused by an employee, such as cash shortages, breakage or loss of equipment, etc. Kerr’s Catering Service v. Department of Industrial Relations (1962) 57 C2d 319, 329-30. The rationale behind this rule is in that losses due to an employee’s simple negligence are inevitable in almost any business operation and must be borne as expenses of managing that business. The employer is in a better position to absorb those costs than the employee by having the opportunity to pass the costs to the consumer or otherwise.

California Family Rights Act (CFRA), an equivalent of the federal FMLA legislation, allows qualifying employees to take up to 12 weeks of time off work when suffering from serious medical condition. Generally, and employer does not have to trust the employee’s word that he or she is or has been ill and thus unable to come to work, and the employer has the right to insist on having a medical certification to that effect.

However, some employer require the employer or the medical provider to disclose details of the medical condition of the employee who is seeking to take leave of absence under CFRA. In most cases, it is unlawful for an employer to require disclosure of such information, and disciplining or terminating employee for failure to disclose such information is no defense to CFRA discrimination, retaliation and wrongful termination claims.

The California Supreme Court has recently clarified the obligation and limitation on medical certifications that employers are entitled to obtain under CFRA in Lonicki v. Sutter Health Cent. 43 Cal.4th 201 (2008). The court looked closely at the language of the applicable legislation – specifically, California Government Code 12945(k)(1) and noted that by stating that an employee’s certification “shall be sufficient” if (a) it contains the commencement date of the employee’s health condition began, (b) the “probable duration of the condition,” and (c) a statement that the condition renders the employee unable to do the job, subdivision (k)(1) of section 12945 limits the type of information that an employer can require an employee to provide in a certification. For example, an employer may not require an employee seeking medical leave to provide detailed intimate and private information about a serious psychiatric condition that has made the employee unable to do the work, nor may the employer deny the employee’s request for medical leave for failing to provide such information. This law also limits an employer’s right, in litigation arising out of an employee’s medical leave request, to claim that the employer acted reasonably because the information provided by the employee was inadequate.

Many employers include a “standard” arbitration provision in their employment contracts or employee handbooks, which provides that any and all disputes arising out of the employer-employee relationship must be referred to mandatory arbitration instead of being litigated in jury trial. Generally, a mandatory arbitration provision is in the employer’s interest. Please read about some of the reasons why employers may prefer arbitration of employment disputes over jury trial.

California law, like federal law, favors enforcement of of valid arbitration agreements. Broughton v. Cigna Healthplans (1999). However, a court may strike down an employer-employee arbitration agreement and find it to be invalid and unenforceable, referring the wrongful termination, discrimination, retaliation, or other employment related dispute for jury trial. One of the most common reasons that courts find certain arbitration agreements to be unenforceable is because these agreements are unconscionable.

The California Supreme Court has a very informative and detailed discussion regarding the enforceability of arbitration agreements in Armendariz v. Foundation Health Psychcare Services, Inc. 24 Cal.4th 83 (2000). In that case, the Court reiterated the holding in Gilmer v. Interstate/Johnson Lane Corp. (1991) 500 U.S. 20, noting that an arbitration agreement is lawful if is (1) provides for a neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court; and (5) does not require employees to pay either unreasonable costs or any arbitrator’s fees or expenses as a condition of access to the arbitration forum.

One of the most important provisions under the Bankruptcy Code that affects employment discrimination, retaliation and wrongful termination claims asserted against the employer that files bankruptcy is the “automatic stay” under the Bankruptcy Code section 362. Immediately upon filing by the employer of a bankruptcy petition, the automatic stay takes effect and prevents the plaintiff employee / former employee from proceeding with his employment claim against the debtor. Any action taken by such an employee after filing of the bankruptcy petition contrary to the automatic stay will be void even if the employee is not aware of the employer’s bankruptcy filing. With certain exceptions, the automatic stay applies to all creditors, including plaintiff-employees with discrimination, harassment, and other claims.

If the employer files bankruptcy before the employee files the employment lawsuit, and the statute of limitations on the employment discrimination claim otherwise expires while the automatic stay is in effect, the employee will have until 30 days after the automatic stay is terminated to file the employment discrimination lawsuit, assuming that the claim is not discharged, otherwise extinguished, or resolved in the bankruptcy.

This 30-day period my be extended if the employee was not notified and didn’t have a reason to know that the stay was terminated.

An employer who loses or is about to lose an employment or wrongful termination case will usually argue at trial/arbitration/mediation that the plaintiff employee failed to mitigate his damages. In other words, the employer will try to convince the decision makes that the plaintiff who has been unemployed or underemployed since being terminated, could have and should have found a job long time ago and could have minimized his losses by actually working during the time that he or she was unemployed.

It is therefore very important to know that in employment and wrongful termination cases in California, the burden is on the employer to show that comparable or substantially similar employment was available to the plaintiff employee who was unlawfully terminated and was unemployed for a period of time while his wrongful termination lawsuit was pending. Substantially equivalent employment affords virtually identical promotional opportunities, compensation, job responsibilities, working conditions and status as the position from which plaintiff has been terminated. Sellers v. Delgado College (1990)

This means that the unemployed or underemployment claimant need not go into another line of work, accept a demotion, or take a demeaning position. Ford Motor Co. v. EEOC (1982). Plaintiff may also properly refuse employment that is inconveniently located or unreasonably distant. Cunningham v. Retail Clerks Union (1983) Although, geographical considerations may be less of a factor for executives and professionals whose employer routinely relocate their top employees. In such cases, a wrongfully terminated employee’s failure to accept a job offer solely because it requires moving to a different location may be held to be a failure to mitigate damages. Hopkins v. Price Waterhouse (1990).