Minor League Strikes Out on Wage Claims: Judge Decertifies Collective and Class Actions

Former minor league players who filed a lawsuit claiming Major League Baseball engaged in minimum wage and overtime violations under the Fair Labor Standards Act may feel as if they struck out at the end of a very big game as a federal Magistrate judge in San Francisco sided with the MLB recently when players attempted to have their lawsuits certified as a collective action and class action, respectively.

Previously the judge conditionally certified the proposed collection action under the FLSA (as of October 2015). Yet in the latest ruling, the judge granted the MLB’s motion to decertify. The judge also denied the players (Plaintiffs) request to certify their state law wage and hour claims as a class action. Most see the decertification and denial as a major win for the MLB.

What Are Collective Actions and Class Actions? They both involve groups of plaintiffs joining together in a lawsuit, but they aren’t exactly the same. The most important difference between the two is that plaintiffs who want to be involved in a collective action may simply opt in to the group. Comparatively, those who would not like to be included in a class action must “opt out” or find themselves bound by the resulting judgment on the case.

Plaintiffs in this case allege that the MLB and its clubs were in violation of the FLSA and other, similar, state wage and hour laws. They claim they were paid a total of $3,000-$7,000 over the course of a season lasting five months even though they were working anywhere from 50-70 hours each week throughout the season. The former players also claim that they were paid less than minimum wage, they were denied overtime pay, and they were required to “train” during the off season without compensation.

The July 21, 2016 Order from the Magistrate Judge denied the plaintiffs’ motion that state wage and hour claims be certified as a class action. He stated that the plaintiffs’ failed to meet specified legal requirements. He stated that there would be no simple method of identifying who would be a member of the class in various states. He stated that the plaintiffs failed to demonstrate that the “typicality” requirement was met as the court was unable to determine if representatives for different states presented claims collectively that were typical of the class as a whole. He also stated that the common questions raised by law were not predominant in the face of individual concerns. Conclusively, even though the Judge found the “numerosity” requirement to be met, and the “commonality” requirement to be met, and that the class representatives could protect the interests of the class, he refused to certify.

If you have questions or concerns regarding class certification or if you need to discuss your eligibility to act as representative in a proposed class action, please get in touch with an experienced employment law attorney at Blumenthal, Nordrehaug & Bhowmik.

Hyperloop One Files $250 Million Countersuit Against Co-Founder BamBrogan

Claiming that BamBrogan’s wrongful termination lawsuit and the allegations made within it were a malicious attempt to ruin the company’s reputation, Hyperloop One filed a $250 million countersuit in the Superior Court of California, Los Angeles County. The company claims that former CTO Brogan BamBrogan was part of a group of four company employees that engaged in both improper conduct and abusive behavior. Hyperloop One is a transportation startup involved in developing a high-speed shuttle. The countersuit states that BamBrogan and the three additional employees (referred to in their countersuit as “the Gang of Four”) actually manufactured conflict and incited rebellion in the workplace in an attempt to seize control of Hyperloop One.

The countersuit includes accusations that the “four” engaged in increasingly disruptive behavior ending with them literally staging a coup in May 2016. They asked certain employees to sign a threatening letter that demanded the company’s board members release their shares and significantly alter the company’s equity structure. The also allege the BamBrogan planned to start a competing company, Hyperloop Two, and that he actively discouraged current and prospective investors of Hyperloop One hoping that they would instead choose to invest in his new company. The countersuit alleges that when BamBrogan’s plan failed, he and the others filed the lawsuit as a media ploy full of lies intended to smear Hyperloop One.

The countersuit specifically states that BamBrogan left the company abruptly a week prior to the filing and sued his former colleagues for wrongful termination as well as claims of failure toward fiduciary duty. BamBrogan’s restraining order against Afshin Pishevar, former head of legal counsel and brother of co-founder Shervin Pishevar, was based on allegations that he placed a hangman’s noose on BamBrogan’s chair as a threat of violence. A Los Angeles judge dismissed it last week. Hyperloop One claims that the photo of the noose on BamBrogan’s chair was a sham, calling it the “stuff of tabloids.”

BamBrogan’s claims that Shervin indulged in a pay-to-play arrangement, paying a public relations vendor from Pramana a salary well above average ($400,000) while they were “dating” were labeled a “salacious personal attack” in the countersuit. Hyperloop One claims none of it is true.

Legal counsel for the plaintiff, BamBrogan, responded to the countersuit by stating that they were basing their counter on pure fiction and that the truth would be shown through evidence.

If you have questions about an instance of wrongful termination or concerns regarding legal grounds for suing, please contact one of the experienced employment law attorneys at Blumenthal, Nordrehaug & Bhowmik. 

Hyperloop Technologies Accused of Wrongful Termination by Co-Founder

The co-founder of Hyperloop Technologies recently slapped the company with a wrongful termination lawsuit alleging that he was not only wrongfully terminated, but that his character was defamed by the company. CTO Brogan BanBrogan, as well as other former employees, sued Hyperloop Technologies alleging that they were forced out because they spoke to investors in the company about cultural issues within the “futuristic firm.” Additionally, they allege that they were forced to enter into contracts that weren’t in the company’s best interests by venture capitalists, Shervin Pishevar and Joe Lonsdale.

The suit was filed in the Superior Court of California and included scathing details of Pishevar’s activities while BamBrogan was involved in the company. The documents even include a photo of Pishevar. The description of the photo provided by the plaintiffs indicate that Pishevar was approaching the plaintiff’s desk with a “noose coiled in his hand.” They allege the message was clear and that this moment was followed by another incident later in the same day when the company offered their final letter in response to the plaintiffs’ letter (a group of eleven Hyperloop One employees).

The company stated that they would make no “core” changes and that “three heads would roll.” This referred to three of the plaintiffs: Pendergast and Mulholland, who were fired, and BamBrogan who they planned to demote and force to take a leave of absence (they advised he would not be terminated as long as he promised to behave). If the group of eleven employees accepted the proposal, the company promised not to “pursue them to the ends of the earth.” Plaintiffs allege the company’s official response to their letter even threatened economic and legal warfare by “millionaires with extensive networks.”

BamBrogan states that his involvement in the company began with Hyperloop Technologies took on Tesla CEO Elon Musk’s challenge to put together a super-fast transportation system. BamBrogan states that Pishevar felt it was a business opportunity and hired BamBrogam (previously employed by Musk’s SpaceX) to lead the company. He was offered 6% of the company’s shares. Pishevar retained 90% of the shares.

BamBrogan states that the relationship was difficult from the start, but culminated in improper business deals and the noose episode mentioned above. A meeting following the company’s official response occurred, but when it didn’t go well, BamBrogan and others were either fired or simply left the company on their own. BamBrogan sought a restraining order against Pishevar in response to the situation. Hyperloop Technologies indicated that they saw the suit as unfortunate and delusional – a cliché response to what they referred to as a failed coup.

If you have been wrongfully terminated from your job, please get in touch with an experienced southern California employment law attorney as soon as possible so we can help you. The lawyers at Blumenthal, Nordrehaug & Bhowmik are available to talk to you today. 

Two Austin Drivers Accuse Uber of Wrongful Termination

In May, Uber Technologies, Inc and Lyft, Inc. abruptly removed their services from Austin, Texas. As a result, thousands of drivers in the area lost their jobs. Two of those former drivers, Todd Johnston from Uber and David Thornton from Lyft, filed two proposed California class action lawsuits. In response to new regulations that were implemented, the two companies moved out of Austin, Texas.

The plaintiffs’ attorney indicated that the success of the suits depend upon the same common issue that Uber and Lyft have been battling in various forums: the question of whether drivers are misclassified as independent contractors. The two previous drivers cited the Worker Adjustment and Retraining Notification Act (WARN) as a basis for their lawsuits. According to the statute, employers who have 100 or more employees working 20 or more hours a week (on average) must provide 60 days notice before a mass layoff or plant closure resulting in a mass layoff. The goal of this particular legislation was to provide workers with the opportunity to find alternative employment, find and arrange for any necessary or advantageous retraining, make accommodations for loss of pay, etc.

The plaintiffs claim that Uber and Lyft’s departure from Austin, Texas resulted in 10,000 drivers contracted to operate in the city being “laid off.” According to the wording in the above cited statute, this type of action (resulting in the “laying off” of more than 500 workers) calls for an appropriate notification. Legal experts viewing the case indicate that the plaintiffs face an uphill battle as for the statute to apply to the situation, laid off workers must have been “employees.” Uber and Lyft classify their drivers as independent contractors – a classification that comes with significantly different rights and benefits in comparison to workers classified as employees.

In April an unrelated lawsuit reached a settlement with terms dictating that drivers are to be considered independent contractors – not employees. Having noted that, we have yet to see a definitive court ruling on this particular issue. So while it will be an uphill battle for these plaintiffs to establish themselves as “employees” of Uber and Lyft in the eyes of the court, the possibility is there.

If you have questions regarding what constitutes a misclassification, please get in touch with one of the experienced employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Pasadena Trader Joes’ Settling Wrongful Termination Suit

A former employee of a Pasadena Trader Joe’s filed a wrongful termination suit alleging he was fired for complaining about an instance of sexual harassment. The incident occurred during a holiday gift exchange. The former employee, Paul D. Roberts, complained after receiving a gift resembling a male sex organ at the 2014 Christmas party at one of the Trader Joe’s grocery stores located in Pasadena, California where he worked at the time.

Trader Joe’s recently settled the suit with court papers in Los Angeles Superior Court indicating that the case was resolved without divulging specific terms of the settlement. Robert originally sought unspecified compensatory and punitive damages. His suit alleged wrongful termination, sexual harassment, failure to prevent sexual harassment in the workplace, negligence and workplace retaliation.

Trader Joe’s denies any wrongdoing on the part of the company in connection with the settlement and states that Roberts was treated “lawfully” during his employment at the Pasadena location – at all times.

Court documents indicate that Roberts was originally hired on as a crew member at Trader Joe’s in Pasadena on Lake Avenue in February of 2007. The cited Christmas party gift exchange occurred in December of 2014. Employee attendance was “expected” bordering on “implicitly required” according to the lawsuit Roberts filed. The day of the party, Roberts was not scheduled to work at the store, but he felt his attendance was necessary in order to maintain a positive relationship with his supervisors and co-workers.

Upon Roberts’ arrival at the party, he noted that his co-workers seemed excited to see him arrive and anxious to see him open his gift. The gift was handed to him by a co-worker, Armina Asefvasziri, according to court documents for the case. Roberts opened the wrapped package and was immediately “shocked, embarrassed and humiliated” as he discovered that the gift was a small penis with testicles that would “grow” when submerged in water. He was distraught by what he saw as an obnoxious and offensive item, especially as he received it in front of his supervisor and the co-worker who gave it to him was female. He stated that he left the party and later filed an internal complaint. He told supervisors at Trader Joe’s that if he had provided a similar gift to a female co-worker, he would have been reprimanded or even fired. He stated in court documents that he only received nonchalant responses – his supervisors did not take him seriously. In January 2015, a human resources representative for Trader Joe’s advised Roberts that the incident/complaint was being investigated, but according to statements made in the lawsuit, Roberts was fired two days later.

If you need additional information about wrongful termination or help determining whether or not you have legal grounds for suing your employer for wrongful termination, please get in touch with one of the experienced employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.

Toyota’s Mandatory Arbitration Policy Barring Workers Pursuit of Litigation

D.C. Circuit sided with the National Labor Review Board (NLRB) in the fight over a Toyota dealership’s mandatory arbitration policy. The court found that the provision to bar workers from pursuing class litigation is illegal. The Law Office of Blumenthal, Nordrehaug & Bhowmik originally filed the NLRB unfair labor practice charge on behalf of Richard Vogel.

Legal scholars from various academic organizations, including University of Illinois, the University of California, Los Angeles and the University of Texas presented arguments that Price-Simms, Inc.’s use of a class action waiver in their employment agreement should be barred. Arguments were based on National Labor Relations Act of 1935, and the Norris-LaGuardia Act of 1932. Price-Simms, Inc. is the company that sells and services vehicles under the name Toyota Sunnyvale located out of Sunnyvale, California.

The university professors pointed out that Norris-LaGuardia prohibits the enforcement of an agreement that blocks employees from joining together in an attempt to protect their own rights in the workplace. According to this argument, the class action waiver provision that the Toyota dealership had in place in their mandatory employment agreement is therefore precluded.

The events that led to the Norris-LaGuardia enactment clearly shows that Congress intended to bar enforcement of agreements preventing employees to join unions and other agreements that require employees to settle grievances on an individual basis.  Therefore, Norris-LaGuardia bars the enforcement of the employee agreement so long as it includes wording preventing employees from joining together or acting in concert to enforce rights in the workplace.

Richard Vogel, the Price-Simms employee who filed the original complaint to the NRLB, argued that employees have a “substantive right” according to NLRA to join a union, file lawsuits individually or jointly, and in general, take action to ensure they are provided with basic workplace rights. Prior to the enactment of the NLRA, Norris-LaGuardia barred enforcement of agreements that forced employees to forgo their right to act collectively. Vogel argued alongside the scholars, presenting arguments supporting the NLRB’s decision that the class action waiver included in the Price-Simms arbitration agreement should be recognized as unlawful.

The employment agreement under discussion has been in place since at least April 2014. By making the employment agreement mandatory, the company removed the right for their employees to pursue any collective or class actions. The issue stems from the complaint made by Vogel to the NLRB after he was made to arbitrate a proposed class action over wage-and-hour violations in California state court. The Price-Simms’ arbitration agreement was found in violation of the NLRA in late 2015 and the company was ordered to revise their related policies. The Toyota dealership filed an appeal a month after the original findings claiming that the order incorrect under the law and unsupported by the record. The NLRB filed a cross appeal. The two appeals were consolidated in January 2016 (Price-Simms Inc. v. NLRB, no. 15-1457, U.S. Court of Appeals for the District of Columbia Circuit.

If you have questions regarding the legality of mandatory employment agreements, or if you feel that there is an issue of workers’ rights to address in your workplace, please get in touch with an experienced southern California employment law attorney at Blumenthal, Nordrehaug & Bhowmik. 

San Francisco: Home to the New $13 Per Hour Minimum Wage

San Francisco’s new minimum wage law will go into effect on July 1, 2016 at $13 per hour. This hike represents a “doubling” of the current minimum wage in the area. The change will also mean that the new maximum income to qualify as legally exempt in San Fransisco will be $54,000. The minimum wage increase is part of Proposition J, which passed in 2014 with over 76% of the vote.

Note to Employers: All California employers will be required to post the new minimum wage requirement notices citing the new $13 per hour as of July 1, 2016.

Mayor Ed Lee led the charge on Proposition J, referring to the ballot as a compromise between both labor interests and business interests. (The labor coalition originally supported efforts to enact a more expedited increase in the minimum wage in the area). Proposition J designates the following incremental increases to minimum wage:

·       $12.25 per hour by May 1st, 2015

·       $13 per hour by July 1, 2016

·       $14 per hour by July 2017

·       $15 per hour by July 2018

The end goal of $15 per hour would provide minimum wage employees with a base salary of $31,000 annually for full time work in San Francisco. Previous to this legislation, the highest minimum wage rate in California was $10.74 per hour.

The July 1, 2016 increase is just one part of the decision to increase the minimum wage to $15 per hour by 2020. The bill increasing the minimum wage designates gradual increases over time with increases after 2020 to be tied to inflation. San Francisco is joined by several other cities in the plan to gradually increase the minimum wage to $15 per hour. Other cities using similar plans include Seattle and D.C. Recent legislation is also addressing the minimum wage for restaurant workers. For instance, the tipped minimum wage in D.C. is currently $2.77, but will be gradually increased to $5 by 2020.

If you have questions regarding the minimum wage requirements, or other employment matters, please contact one of the experienced employment law attorneys at Blumenthal, Nordrehaug & Bhowmik.