$3.65 Million Settlement Goes to Dancers for California Labor Lawsuit

A $3.65 million settlement was approved by the District Court for the Central District of California, effectively ending the California labor lawsuit alleging that The Spearmint Rhino nightclub chain made a practice of misclassifying dancers as independent contractors. The practice of misclassifying workers as independent contractors violates FLSA (the Fair Labor Standards Act) and California Labor Law.

The Spearmint Rhino Misclassification Lawsuit Receiving Extra Attention:

The dancers at Spearmint Rhino nightclub offered nude, semi-nude, or bikini entertainment to the club’s patrons at various locations since October 30, 2017. In the end, they will net approximately $2.6 million. The misclassification lawsuit filed by Spearmint Rhino’s dancers is just one in a long series of suits and related legal actions that are inspiring a noticeable reaction. The attention this case received is party due to the novelty of a sex industry labor lawsuit, but also due to the currently charged political debate about AB 5, California’s new gig worker law based off of the Dynamex decision.

Dancers Actually Pay their Employer to Work for Tips:

Did you know that in many cases, dancers in the sex industry end up paying their employers so they can work for tips? It’s true. The economics of exotic dancing are unlike anything you’ve seen in other industries. Dancers are required to pay an assortment of “fees” such as house fees or dance floor fees before performing at an establishment.

In some cases, the dancers must sign an agreement requiring them to pay a lease fee for the “business space” they will be using. Additionally, many employers in this industry charge exotic dancers a higher stage fee if they are not fully nude by the end of their performance. Exotic dancers do not receive wages; they work for tips. Dancers share their tips with the bartenders, DJs, and dressing room helpers (often referred to as House Moms). If it’s a slow night, an exotic dancer may go home with very little to show for a full shift.

Legal Actions Targeting the Exploitative Sex Industry:

Ortega v. The Spearmint Rhino is just one in a series of similar lawsuits. The change that would come with AB 5 would not be limited to exotic dancers or the sex industry. The legislation was originally drafted to address misclassification issues in the gig economy. AB 5 applies to any California worker who finds themselves pushed or forced into independent contractor status without fully understanding the consequences of the classification.

Opponents of AB 5 Refuse to Comply or Seek Exemption

The purpose of AB 5 is to address misclassification in the workplace. Misclassification is a significant issue because employees have essential wage and hour protections in place that do not apply to independent contractors. In some cases, it can be difficult to distinguish between an employee and an independent contractor. Following Dynamex, the legislature introduced AB 5 to address this problem using a simple test to determine which workers are employees (and entitled the protections of employment law), and which workers are independent contractors.

Many employers actively fought against AB 5 before it was enacted. Some were exempted using modifications to the law. Other California employers (like Uber and Lyft) announced that they would not comply with the terms of AB 5. In the face of such powerful opposition, some wonder what would happen to workers like the Spearmint Rhino dancers if AB 5 is repealed or left without the power of effective enforcement through additional amendments or judicial limitations?

The Fate of California Misclassification Suits: With or Without AB 5

The Ortega suit against Rhino Spearmint night club was filed in before AB 5 was enacted – in February 2017. It was filed before the Dynamex decision that led to the legislative change. While the case did not receive an actual judicial decision, the defendant found the arguments presented strong enough to warrant making a settlement to resolve the matter out of court. This conclusion would be likely with or without AB 5 in place. While it is likely that misclassification lawsuits would be more difficult for California workers to win without AB 5, it is not their only hope.

If you need to discuss misclassification or how to file a misclassification lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Did Apple Violate the Law by Not Paying Employees During Mandatory Searches?

In July 2015, the employees suing Apple for not paying hourly wages for the time spent waiting in lines for mandatory, daily security checks got their case certified as a Class Action. And now the California Supreme Court ruled against Apple.

Are Mandatory Searches a California Labor Law Violation?

On February 13, 2020, the California Supreme Court found Apple Inc. in violation of California labor law due to their failure to pay employees for time spent waiting for mandatory bag and iPhone searches after work shifts. The decision is the latest progression in the battle over off-the-clock work payment. This case represents the California Supreme Court’s third wage and hour decision in two years that interprets the state’s employee-protective wage requirements. At the trial level, Apple came out on top with the U.S. District Court for the Northern District of California finding that Cupertino, California Apple employees chose to bring their bags and purses to work and therefore choosing to be subjected to mandatory searches. But on appeal, the U.S. Court of Appeals for the Ninth Circuit turned the question over to the state court for interpretation of California labor law.

Determining Who Holds the Power During the Mandatory Search:

Since compensation depends on whether or not the employee is under the control of the employer, it is crucial to determine if Apple workers are under Apple’s control while they wait in line for mandatory searches, while they are undergoing the mandatory searches, and when they are exiting the mandatory searches. The mandatory searches occur when Apple employees finish their shifts and wish to leave the premises for the day. The exit search is a burden to Apple employees because it prevents them from leaving with their personal belongings until they have completed the thorough (and mandatory) exit search. The mandatory search process can take anywhere from five to twenty minutes. Employees are required to make specific movements and actions during the mandatory search.

Apple Claims Mandatory Searches Benefit Employees:

Apple claims the bag-search policy is justified as providing a benefit to Apple employees. Still, the court finds this far-fetched under the circumstances of the case and in consideration of regular, 21st-century living. The case will return to the Ninth Circuit, the same court that already held that Nike and Converse must face workers’ claims that they should receive payment for time spent in post-shift bag searches.

If you need to discuss employment law violations or if you need to file an off-the-clock work lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Former Principal Claims for Catholic School Files Wrongful Termination Suit

A former principal at a Catholic elementary school in La Mirada, 38-year old Bobbie Castillo, claims she was wrongfully terminated. According to the suit, when she told her supervisor that she was pregnant (in 2014) and would be going on maternity leave, the Rev. Joseph Visperas responded, “You’re coming back in two weeks, right?”

Reverend Joseph Visperas is pastor of St. Paul of the Cross Catholic Church. Castillo described his voice as serious when he made the above remark about being back in two weeks from maternity leave.

The pregnant Catholic school principal eventually responded by filing a wrongful termination lawsuit.

Plagiarized Material or Too Much Maternity Time?

Castillo filed suit in October 2015 in Los Angeles Superior Court, listing the Archdiocese of Los Angeles as Defendant. A jury will hear the case. The Archdiocese of Los Angeles claims Castillo lost her job after she allegedly plagiarized material included as part of the school’s accreditation renewal requirements. Castillo maintains she was terminated from St. Paul in March of that same year because of her pregnancy and because she exposed misconduct perpetrated by others there at the school.

History of Castillo’s Wrongful Termination Case:

Castillo started working at the school as a seventh-grade teacher in 2007. She was promoted to principal by Visperas four years later. Before her two-month maternity leave (Oct. 2014-Jan. 2015), while she was principal, she took a similar amount of maternity leave time in 2009 while she was a seventh-grade teacher. Castillo testified that she worried about the odd remark Visperas made about her maternity leave because it was made in March, which is the month that principals are usually offered contract proposals for the upcoming school year. According to Castillo, she never received a contract until she returned from maternity leave the next February. Castillo also claimed that not long after his first odd remark about her maternity leave, Visperas advised her he was going to have members of the staff rate her. The combined factors left her worried about her job status.

Was She Fired Because She Was Pregnant?

Castillo claims she was wrongfully terminated because she got pregnant and because she reported misconduct other at the school engaged in, including charging some of the student’s parents for unworked bingo game hours. According to Castillo, the replacement the school found for her was no longer of child-bearing age. Castillo also claims that when the book was turned in (including the section she allegedly “plagiarized”), she was in labor, and there was no evidence that she drafted the portion indicated.

If you need to discuss employment law violations or if you need to file a pregnancy discrimination lawsuit or wrongful termination lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

As Lawsuit Plays Out, Uber and Postmates Dealt a Blow

Uber and Postmates were dealt a blow in the ongoing legal battle when a California federal judge denied their request for a temporary stop to AB 5. The two big companies were hoping to receive a reprieve from California’s new gig worker law.

The companies requested a temporary stop to AB 5, while a lawsuit they filed against California state worked its way through the legal system. The federal judge denied their request, leaving both gig companies obligated to comply with the law, which could mean reclassifying drivers as employees. US District Judge Dolly M. Gee noted that the court does not necessarily doubt the sincerity of the individual views presented, but that second-guessing a law designed to improve working conditions for nonexempt low-income workers is not warranted.

What is AB 5, and What Does it Mean for California Workers?

AB 5 is all about worker classification with a focus on gig economy workers. Gig economy companies are full of independent contractors. Gig economies profoundly affected by the legislation include Uber, Lyft, Postmates, DoorDash, etc. While some prize being classified as independent contractors because it offers more flexibility, it often means that drivers and other workers are shouldering many of the costs of their employment for their employers.

For example, Uber drivers pay for:

• Their vehicle

• Their phone

• Their gas

• Their vehicle maintenance

Additionally, Uber drivers do not receive access to essential benefits, minimum-wage guarantees, overtime pay for hours worked above 8 in one day, or 40 in one week or health insurance.

AB 5’s Three-Part Test to Determine Reclassification:

Under the new legislation, AB 5, which went into effect on January 1, 2020, California employers using independent contractors must undergo a three-part test to determine if they will be required to reclassify their workers. Companies that don’t pass the test must reclassify their workers as employees instead of independent contractors. Many California employers fear the new legislation will significantly harm their businesses as the management of large workforces is expensive. For example, an analysis by Barclays in June 2019 concluded that Uber’s reclassification of drivers from independent contractors to employees would cost the company about $500 million annually. A similar move would cost competitor rideshare company, Lyft, an approximate $290 million annually.

California Businesses Respond to AB 5 Legislation:

In response to the legislation, a growing group of companies and individuals are suing the state to make sure all workers receive equal protection under the law and can choose how they want to work. The response was filed by Uber, Postmates, and two gig workers, Lydia Olson and Miguel Perez. The lawsuit was filed against the state at the end of 2019 in an attempt to have AB 5 declared invalid. The lawsuit filed in response to California’s new gig economy legislation alleges that AB 5 is unconstitutional. It also asserts that the new law unfairly targets gig economy workers and companies. The group requested a preliminary injunction against AB 5 to stop it from being applied to them until their case makes its way through the court. Judge Gee denied the injunction.

Other Responses to AB 5 Across California:

Similar lawsuits have been filed against the state by other groups including truck drivers, journalists, etc. Those actively seeking to prevent AB 5 from sticking around insist that the legislation would harm the industries in which they would apply and the workers in those industries. Uber and Postmates are weighing their options and considering an appeal to Gee’s decision. Postmates sees it as a procedural decision on the preliminary injunction only and not an indication of the court’s potential decision once the full case is presented.

If you have questions about how California’s AB 5 legislation will affect your workplace or if you need to file a California employment law complaint, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Siemens Mobility Sued Over Alleged Missed Breaks and Wage Issues

Siemens Mobility is currently facing a potential class-action lawsuit after one of their material handlers, Dewitt Nunery, sued to allege wage issues, skipped lunch and rest periods, and inaccurate wage statements.

Plaintiff Claims He Was Required to Work Through Breaks:

The plaintiff in the case is a Siemens Mobility warehouse worker and material handler with an hourly pay rate of $16.37. Nunery claims Siemens required him to work through breaks at the Sacramento County train factory. Nunery claims that in addition to not getting a chance to take his breaks, he was not offered accurate overtime payment for missed break time.

Skipping “Paid” Breaks Should Add Time to the End of the Shift

Since rest breaks are "paid time," skipping rest breaks during a work shift should add that time to the end of the shift, but Nunery claims it wasn't. Still working at the train factory, Nunery alleges the company pressured him to work over seven days consecutively without overtime pay. Siemens train factory has been growing significantly throughout the last several years, with numerous large orders coming in from throughout the United States and Canada. The factory fulfills orders for trains, train sets, and light rail vehicles.

Seeking Legal Help to Resolve an Employment Law Violation:

Originally, Acara Solutions Inc., a staffing agency based out of New York, placed Nunery at the Siemens train factory. Later he worked for Siemens directly. Nunery claims he experienced the same payment issues and employment law violations under both Acara Solutions Inc. and Siemens. Nunery seeks penalties under the Private Attorneys General Act and seeks class-action for others in similar situations at the company. Nunery's attorney filed a notice of violations of the California Labor Code in October. In December, they filed a civil suit in Sacramento County Superior Court. Effective February 10, 2020, the case was moved from Sacramento County court to the U.S. District Court for the Eastern District of California.

The Suit Alleges Numerous Employment Law Violations:

Nunery's suit alleges meal break violations, rest break violations, minimum wage violations, and overtime pay violations. Nunery also claims that the company failed to provide accurate and itemized wage statements and failed to provide Nunery with a day off for seven consecutive days on the job.

The Siemens factory, located just south of Sacramento, is the third largest manufacturer in the region employing 1,500 workers.

If you need to talk to someone about violations in the workplace or if you need to file an overtime pay lawsuit, get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Supreme Court of California Agrees to Review Appellate Decision on Meal and Rest Period Case

The Supreme Court of California will review the California Court of Appeal's decision in the meal and rest period premium calculation case, Ferra v. Loews Hollywood Hotel, LLC. The Supreme Court will consider the term "regular rate of compensation" in Labor Code section 226.7.

In Labor Code 226.7, the term "regular rate of compensation" is used when requiring employers to provide employees with payment when required meal periods and rest breaks are not provided. The Supreme Court of California will consider the question of whether or not the "regular rate of compensation" in Labor Code 226.7 should be interpreted the same and require the same calculations as the phrase "regular rate of pay" in Labor Code Section 510(a), which references overtime calculation requirements.

What is California Labor Code 226.7?

In California Labor Code Section 226.7 employers that fail to comply with employment law by providing employees with required meal, and rest periods are required to pay the employee an additional hour of payment. According to the section referenced, the payment must be "at the employee's regular rate of compensation for each workday" that the employer does not provide a meal or rest or recovery period.

What is California Labor Code 510?

In California, Labor Code Section 510, employers are required to pay employees overtime at either one and one-half or twice the employee's "regular rate of pay" if the employee works more than full-time hours (as determined by law).

Defining Section 510's "Regular Rate of Pay:"

Previously, Section 510's "regular rate of pay" was clarified by the Supreme Court of California, determining that calculations should include additional compensation outside of the employee's straight hourly rate. Additional compensation could consist of anything from commissions to split-shift differentials to nondiscretionary bonuses, etc. There is no similar California case law that provides clarification for calculating Section 226.7's "regular rate of compensation." The question forms the basis of deliberations for the court considering Ferra.

The plaintiff in the case is an hourly employee of Loews Hollywood Hotel, LLC, that brought a putative class action against the hotel giant, alleging that the company inaccurately calculated meal and rest period premiums in violation of Labor Code Section 226.7. The plaintiff argued that Loews should have calculated the regular rate of compensation for payment due to missed meal and rest periods in the same manner used to calculate the regular rate of pay used to determine payment for overtime hours. The Court of Appeal came back with an employer-friendly ruling, disagreeing with the argument presented by the plaintiff in the case.

The plaintiff appealed to the Supreme Court of California, asking that Labor Code Section 226.7's terminology receive clarification.

If you have questions about California labor law violations or how California responds to employment law violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

$175k Settlement in Carmel Restaurant Sexual Harassment Suit

To resolve a federal sexual harassment lawsuit filed on behalf of both male and female workers at California’s Carmel restaurants, owner/operator JCFB, Inc. agreed to pay a settlement of $175,000. The settlement agreement and amount was announced January 9, 2020. 

Sexual Harassment Suit Alleges Multiple Incidents:

According to the harassment lawsuit, one the the male line cooks working at Porta Bella Restaurant was repeatedly “grabbed” inappropriately; with his “private parts” being grabbed on numerous occasions by the kitchen’s manager, the chef and the cook. When the line cook reported the inappropriate behavior to the owners of the restaurant, they dismissed it as “only play.” After the dismissed report of the inappropriate behavior, the line cook claims that the chef became irate and confronted him, yelling and hitting him and finally forcing him to quit his job at the restaurant. The lawsuit alleges that the restaurant did not adequately investigate the incident or appropriately discipline the harassers.

Multiple Employees Came Forward with Harassment Allegations:

A female dishwasher working at Mediterranean Restaurant claims she endured sexual comments daily and regular unwanted and inappropriate physical touching by the same kitchen manager that harassed and retaliated against the Porta Bella Restaurant’s line cook. She informed her manager at Mediterranean Restaurant, and while it was a different manager than the one who handled the line cook’s complaint at the Porta Bella, the response was similar. The sexual comments and inappropriate behavior continued unchecked.

Workplace Harassment Violates Employment Law:

Both situations noted above are alleged violations of Title VII of the Civil Rights Act of 1964 prohibiting sexual harassment in the workplace. The harassment lawsuit was filed in U.S. District Court for the Northern California District. Before filing the lawsuit the parties involved did attempt to reach a pre-litigation settlement through a voluntary conciliation process.

Defendant Settles the Harassment Lawsuit for $175K:

The $175,000 settlement is part of a three-year consent decree ordering JCFB to pay the two former workers and provide anti-harassment training to their employees working at either Carmel Restaurant location. The JCFB is also required to work with an external consultant to monitor any future hostile workplace complaints. Doing so will hopefully assist the company as they implement effective HR practices to ensure proper training and appropriate investigating will occur as well as necessary disciplinary measures for those in violation of higher workplace standards. The changes will be made in hopes that incidents of harassment will be curbed at restaurant locations.

It doesn’t matter if the harassment is verbal or physical or if the victim is male or female, employers have to take incidents of workplace harassment very seriously and dedicate themselves to ensuring their service industry workers are protected from hostile work environments. 

If you are experiencing discrimination in the workplace or if you need to file a discrimination lawsuit, we can help. Get in contact with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in any one of various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.