Original Mike’s Settles Wage and Hour Class Action with $974k Settlement

In recent news, Original Mike’s is set to settle a California wage and hour class action lawsuit with a $974k settlement.

The Case: Segui v. Original Mike’s Enterprises LLC, et al.

The Court: Orange County Superior Court

The Case No.: 30-2016-00893360-CU-BT-CXC

The Plaintiff: Segui v. Original Mike’s Enterprises LLC, et al.

According to the plaintiffs in the case, Original Mike’s business actions violated California labor laws. The state of California has some of the strictest protections for employees in the entire country, which can result in steep penalties for employers found in violation of labor law.

The Defendant: Segui v. Original Mike’s Enterprises LLC, et al.

The defendant in the case is Original Mike’s Enterprises LLC, et al. Original Mike’s is a restaurant with locations in various locations in California. According to the 2016 class-action lawsuit filed against Original Mike’s, the company violated California labor law by failing to pay their workers the overtime and regular wages they were due in accordance with state and federal labor laws. In addition to wage violations, the plaintiffs claim Original Mike’s failed to provide employees with mandated meal and rest periods, legal compensation for missed breaks, accurate itemized wage statements, and complete final payment upon termination for all hours worked.

More Details of the Case: Segui v. Original Mike’s Enterprises LLC, et al.

In response to the allegations, Original Mike’s agreed to pay more than $974,000 to resolve the claims that their policies and business practices violated California labor law and denied workers overtime pay and other standard benefits employers are required to provide their employees by law. The $974k settlement benefits California Original Mike’s employees who filled non-overtime-exempt positions at any point between December 26th, 2012, and December 16th, 2016.

If you have questions about California employment law or need to discuss how to file a California wage and hour lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, and Riverside.

Can a California Trial Court Stay a Later-Filed PAGA Action Due to Overlapping Claims?

Does a trial court have the discretion to apply the doctrine of exclusive concurrent jurisdiction to stay a later-filed PAGA action if it has claims that overlap with a PAGA action filed earlier?

The Case: Shaw v. Superior Court

The Court: Cal. App. 5th

The Case: 78 Cal. App. 5th 245 (2022)

The Plaintiff: Shaw v. Superior Court

The plaintiffs in the case conceded that their PAGA-only action arose from facts and theories that already existed in a second PAGA action filed earlier, and pending in Los Angelus County. The trial court granted a motion to stay the legal action until a decision could be made on a petition for judicial coordination with the Los Angeles PAGA lawsuit. When the petition for judicial coordination was denied, the trial court denied the plaintiff’s motion to lift the stay. The court felt it was warranted according to the doctrine of exclusive concurrent jurisdiction that states when 2 or more courts have subject matter jurisdiction, the first court that asserts jurisdiction usually retains it (to the exclusion of the other courts).

The Court’s Decision: Shaw v. Superior Court

When the California Court of Appeal denied the petition for judicial coordination holding that the doctrine of exclusive concurrent jurisdiction warranted a stay of the action, and the trial court did not err in applying the doctrine. The language and purpose of PAGE left the court disagreeing with the Plaintiffs’ arguments that PAGA repudiated the judge-made exclusive concurrent jurisdiction doctrine. In addition, the court rejected the argument regarding applying the exclusive concurrent jurisdiction doctrine to PAGA claims promoting reverse auctions. Instead, the court believes the doctrine stays following suits and prevents defendants from picking and choosing between plaintiffs. The court also pointed out that anytime there are multiple plaintiffs authorized to bring a PAGA claim, the possibility of a reverse auction exists, so the application of the exclusive concurrent jurisdiction doctrine would not increase the likelihood of a reverse auction.

The Conclusion: Shaw v. Superior Court

The court in the case concluded that the Plaintiffs argument that staying duplicative PAGA suits leads to frivolous filings was not convincing. The court found that the plaintiffs failed to show that the trial court acted outside their bounds of reason when determining that the countervailing policies raised by the plaintiffs did not outweigh the policies that support the application of the exclusive concurrent jurisdiction doctrine in the case.

If you have questions about California employment law or need to file a California class-action lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Will Sundance Face Morgain in Court Regarding Arbitration Agreement?

Does the FAA require a party resisting arbitration on the grounds of waiver to show they suffered prejudice from a failure to compel arbitration sooner?

The Case: Morgan v. Sundance Inc.

The Court: California Superior Court

The Case No.: 142 S.Ct. 1708

Plaintiff in the Case: Morgan v. Sundance Inc.

The plaintiff in the case, Plaintiff Robyn Morgan, worked at a Taco Bell franchise owned by Sundance Inc. Morgan signed an agreement stating any employment dispute would be argued direction with the defendant. However, Morgan later filed a nationwide collective action alleging that Sundance violated federal overtime pay laws.

Defendant in the Case: Morgan v. Sundance Inc.

The defendant in the case, Sundance, Inc., ran the Taco Bell franchise where Morgan worked. When Morgan filed suit, the defendant initially defended against the suit, filing a motion to dismiss, and cooperating with mediation. After eight months, Defendant moved to stay litigation and compel arbitration under the Federal Arbitration Act (FAA). Plaintiff argued that Defendant waived the right to arbitration by engaging in litigation. The court denied the defendant’s motion. However, the Court of Appeals for the Eighth Circuit reversed the finding because the plaintiff did not show prejudice, so the defendant did not waive its right to compel arbitration.

The Case: Morgan v. Sundance Inc.

To resolve a circuit split, the United States Supreme Court granted certiorari regarding whether federal courts may adopt an arbitration-specific waiver rule demanding a showing of prejudice (similar to the Eighth Circuit, and a number of other circuits). When considered by the United States Supreme Court, the case was vacated and remanded with the court noting that outside the arbitration context, federal courts assessing waivers generally do not consider prejudice. While the FAA’s policy favors arbitration, it does not go so far as to allow federal courts to create arbitration-specific variants of federal laws and procedural rules (like the procedural rules regarding the waiver). The court held that the federal policy being considered intends to treat arbitration contracts like all other contracts - not foster arbitration. The case was remanded to the California court so they could decide if the Defendant waived their right to seek arbitration.

If you have questions about how to file an overtime class action or PAGA lawsuit, please contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

Security Employees Allege Unpaid Meal & Rest Breaks

In recent news, unpaid meal- and rest-break premiums may serve as the basis for waiting-time penalties and inaccurate wage statement claims for a group of California security workers.

The Case: Naranjo v. Spectrum Security Services, Inc.

The Court: Court of Appeals of California, Second District, Division Four

The Case No.: S258966

The Plaintiff: Naranjo v. Spectrum Security Services, Inc.

The plaintiffs in the case allege that their employer violated labor law, specifically citing violations of California Labor Code § 226 which [sets] forth the requirement for employers to furnish accurate wage statements; and California Labor Code § 203 which [sets] forth the requirements for the timely distribution of all wages earned upon an employee’s departure from a job.

The Defendant: Naranjo v. Spectrum Security Services, Inc.

The Defendant in the case, Spectrum Security Services, Inc. provides security services (and related services) to clients on a contract basis, including a variety of federal departments and agencies.

The Case: Naranjo v. Spectrum Security Services, Inc.

The Second Appellate District Court of Appeal originally held that under Labor Code section 226.7, missed-break premium pay is not a “wage” for purposes of Labor Code sections 203 and 226. Finding that the failure to timely pay or report such payments can never support penalties under either section 203 or 226.However, in May 2022, the California Supreme Court reversed the Second Appellate District Court of Appeal’s finding, making clear that meal and rest period premiums are a type of “wage” and must therefore be accurately reflected on wage statements as well as being accurately paid out when the employee leaves the job (or is fired from the job). The California Supreme Court remanded Naranjo back to the Court of Appeal to determine if any missed-break “premium pay” supported any derivative Section 203 waiting time penalties or Section 226 wage statement penalties where the relevant conditions are met. In order to meet this standard for accurately reporting premium pay on all wage statements, both employers and employees will need to be diligent.

If you have questions about inaccurate overtime pay calculations, inaccurate wage statements, or other employment law violations, please contact Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Our experienced California employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

When Can the ABC Test be Applied?

In a recent California employment law case, the question is asked, “When can the ABC test be applied? Do workers need to establish they were hired before the ABC test applies?”

The Case: Mejia v. Roussos Constr., Inc.

The Court: Calif. App. 5th

The Case No.: C087709 Super. Ct. No. 34201600190824 COEDS

The Plaintiff: Mejia v. Roussos Constr., Inc.

The plaintiffs in the case, Mejia v. Roussos Constr., Inc., are unlicensed flooring installers. The plaintiffs worked for Roussos Construction installing floors. According to court documents, there were three people who worked “between” the plaintiffs and the company, Roussos. The plaintiffs refer to these three individuals as “supervisors.” Roussos referred to these three individuals as “subcontractors.”

The Defendant: Mejia v. Roussos Constr., Inc.

Roussos Construction is a general contractor. At trial, Roussos maintained that they use independent contractors (the three referred to by plaintiffs as supervisors and by the company as subcontractors) licensed to perform work outside of Roussos Construction’s contractor’s license, and that the subcontractors hired the plaintiffs, paid the plaintiffs, and are responsible for complying with applicable labor laws in regards to the plaintiffs.

The Case: Mejia v. Roussos Constr., Inc.

The parties involved in the case, Mejia v. Roussos Constr., Inc., disagreed about appropriate jury instruction with Roussos arguing that the ABC Test used to determine employee vs. independent contractor status can only be applied after it is established that the workers were hired by Roussos or by Roussos’ agent. The plaintiffs in the case argued that case law does not establish a “hiring test” alongside the ABC Test articulated in the Dynamex Ops. W. v. Superior Court, 4 Cal. 5th 903 (2018), the California Supreme Court opinion that led to the adoption of the ABC Test in California. In the end, the trial court agreed with the defendant, instructing the jury to make a predicate finding of whether or not Roussos Construction was the hiring entity. After receiving this instruction, the jury returned a verdict in favor of the defendant on all counts.

Do Workers Need to Establish They Were Hired Before the ABC Test Applies?

The Court of Appeals reversed the judgment on the wage and hour counts involving the ABC Test holding that there was no “threshold hiring entity test” created or intended by the Dynamex court. In conclusion, the Court of Appeals found that workers do not need to establish they were hired before the ABC Test can be applied.

If you have questions about California employment law or if you need to file a wage and hour lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys can assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

California Wage and Hour Lawsuit: CAFA Amount in Controversy Requirement

In recent news, Ninth Circuit reversed the district court’s decision that defendant, Roadrunner, failed to meet the burden to establish the required $5 million minimum for the CAFA amount in controversy requirement and remanded to district court for further proceedings.

The Case: Jauregui v. Roadrunner Transportation Services, Inc.

The Court: U.S. Court of Appeals for the Ninth Circuit

The Case No.: 22-55058

The Plaintiff: Jauregui v. Roadrunner Transportation Services, Inc.

The plaintiff in the case, Griselda Jauregui, filed a putative class action against Roadrunner Transportation Services on behalf of all Roadrunner and former California hourly workers. The plaintiff alleged violations of California labor law, primarily wage and hour violations.

The Defendant: Jauregui v. Roadrunner Transportation Services, Inc.

When the Defendant, Roadrunner, removed the case to federal court, invoking jurisdiction under CAFA, the plaintiff responded with a motion to remand for lack of jurisdiction. The district court found that Roadrunner failed to meet its burden to establish the requisite $5 million minimum for the amount in controversy, and remanded the matter to state court.

The Case Continues: Jauregui v. Roadrunner Transportation Services, Inc.

Roadrunner relied heavily on their senior payroll lead’s conclusion that company payroll data and the plaintiff’s allegations held the amount in controversy to be in excess of $14.7 million. Before granting the motion to remand, the district court independently evaluated Roadrunner’s calculations for each of the seven claims/alleged violations. The district court found that Roadrunner sufficiently demonstrated the claimed amount for 2 of the seven claims, but the district court disagreed with the defendant’s calculations for the other 5 claims, and assigned each of these 5 claims with a value of $0. The Ninth Circuit court reversed the district court’s decision to remand based on what they identified as two primary errors: putting a “thumb on the scale” against removal, and assigning a $0 value to claims because they disagreed with one or more assumptions involved in the defendant’s estimates. The Ninth Circuit also held that nothing in CAFA or case law compels this type of drastic response when a district court disagrees with a single assumption underlying a claim valuation. According to the panel, Roadrunner met the CAFA amount in controversy requirements. If the lowest hourly wage rate identified by the district court is used the minimum wage claim is reasonably valued at $4.5 million. The two other claims accepted by the district court were valued at $2.1 million. These two claims’ values combined is more than enough to establish jurisdiction under CAFA without even considering the valuation of the additional claims that the district court valued at $0. Based on this, the panel remanded the matter to district court for additional proceedings.

If you have questions about California employment law or if you need to discuss wage and hour violations, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.

California Resident Seeking to Challenge Non-Compete

Michael Jed Sewell, a California resident, responded to a breach of employment agreement claim with his own breach of contract, unjust enrichment, and California wage and hour claims.

The Case: LGCY Power, LLC v. Superior Court

The Court: Court of Appeal of the State of California, Fifth Appellate District

The Case No.: 20 ECG 01508

The Breach of Employment Agreement Claim:

A Utah limited liability company formed in Delaware and headquartered in Salt Lake City, Utah, LGCY, filed suit against Michael Jed Sewell, a California resident, and six other LGCY executives and managers after they left the company and started a competing company. Sewell was a former sales representative and eventually a sales manager for LGCY. In 2015, Sewell signed a “Solar Representative Agreement,” which included language about noncompetition, non solicitation and confidentiality as well as Utah choice of law and forum provisions. Four years later, in 2019, Sewell and several others at the company left to form a competing solar sales company. LGCY filed suit in Utah State Court against all seven former executives and managers citing breach of their employment agreements, breach of fiduciary duty, misappropriation of trade secrets, etc. Four of the defendants (not including Sewell) filed a joint cross-complaint against LGCY in the Utah court proceeding unsuccessfully seeking to dismiss LGCY’s action.

Filing a Cross-Complaint in California to Defend Against Claims:

Sewell did not join the cross complaint filed by four of his co-defendants in Utah court. Instead, Sewell filed a complaint in Fresno County Superior Court. Sewell’s complaint alleges almost identical claims as those filed by his co defendants in Utah.

Can Sewell File a Cross Complaint in California?

According to the Court of Appeal, California Labor Code Section 925 allows for an exception to California’s compulsory cross-complaint statute (Code Civ. Proc., Section 426.30) enabling an employee who comes within Section 925’s purview to file a California complaint based on allegations related to causes of action an employer filed against them in a pending action in a sister state. Additionally, the clause does not require California to extend credit or apply the sister state’s compulsory cross-complaint statute. LGCY petitioned for a writ of mandate, but their attempt to get Sewell’s California action dismissed was unsuccessful. The court found that the company did not demonstrate that the Fresno County Superior Court erred in overruling its demurrer.

The Findings of the Court:

The Court of Appeal denied LGCY’s writ petition based on Cal. Lab. Code Section 925 being an exception to Cal. Code Civ. Proc. Section 426.30(a), the compulsory cross-complaint rule that LGCY argued required Sewell to file cross claims in the Utah action. The court found that Sewell satisfied the requirement of Section 925 requesting the trial court void the contract under the statute (voiding the contract required a judicial determination). The court also noted that the changes in Sewell’s work responsibilities, title, and compensation since Section 925 went into effect sufficiently qualified the contract for the application of the statute. The California court also rejected LGCY’s claim that the full faith and credit clause of the U.S. Constitution required them to recognize Utah’s compulsory cross-complaint statute.

If you have questions about California employment law or need help filing 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 various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.