A recent California Court of Appeal upheld the trial court’s order granting defendant’s pre-certification motion for summary judgment against off-the-clock class claims made by the named plaintiff in a putative class action.  The case is named Jong v. Kaiser Foundation Health Plan, Inc., Case No. A138725, ___ Cal. App. 4th __,  (Cal. App. 1st Dist. 5/20/2014) (Jong).  Jong is welcome news for California employers.

In 2012, the named plaintiff brought a class action with two other former employees, claiming they regularly worked off-the-clock.  This is a fairly prevalent claim here in California.    The trial court granted summary judgment prior to class certification and dismissed the claims.  Plaintiff appealed.

The appellate court, as they should, placed great weight on the plaintiff’s own admissions during his deposition.  There, he admitted that (1) he was aware of the employer’s policy to pay for all hours worked; (2) he knew how to use the employer’s timekeeping system; (3) he was aware that the employer paid for all overtime hours recorded, even if not approved by supervisors; (4) he kept no record of the alleged off-the-clock hours worked; (5) he did not know whether any manager was aware of his alleged off-the-clock work; and (6) he never made a request to work or be paid for the alleged off-the-clock work.

Faced with these admissions, the Plaintiff went to the common argument that his employment position was such that he was pressured to stay within labor budget.  He said this caused the “unenviable dilemma” of choosing to “maintain his accountability and avoid the imposition of discipline” or report all his hours worked.  Despite his admissions, he said he chose the later.

The Jong court applied the off-the-clock standard set forth in Forrester v. Roth’s I.G.A. Foodliner, Inc., 646 F.2d 413 (9th Cir. 1981) (Forrester).  The Court specifically noted that the Forrester standard applied to state law claims.   White v. Starbucks Corp., 497 F. Supp. 2d 1080, 1083 (N.D.Cal. 2007) (White).  Forrester is “where an employer has no knowledge that an employee is engaging in overtime work and that employee fails to notify the employer or deliberately prevents the employer from acquiring knowledge of the overtime work, the employer’s failure to pay for the overtime hours is not a violation [of the FLSA].”  Forrester, 646 F.2d at 414.  Thus, “where the acts of an employee prevent an employer from acquiring knowledge, here of alleged uncompensated overtime hours, the employer cannot be said to have suffered or permitted the employee to work in violation of [the FLSA].”  Id. at 414-15.  Insert California Labor Code wherever you see “FLSA” and you can see the Court’s rationale.

The Court applied the above standard to the Plaintiff’s admissions and reasoned that the Plaintiff had no disputed facts that could demonstrate liability of the employer for the alleged off-the-clock work.  The Court rejected 18 of the plaintiff’s fellow employees, finding they were largely irrelevant because they did not show that the employer was on notice that he was performing off-the-clock work, contrary to the employer’s policy, practice and expectation.

This decision is extremely helpful in clarifying that, in order to obtain summary judgment against an off-the-clock claim, employers need not affirmatively prove that no off-the-clock work was performed.   Jong leads the way in showing that in order to be successful in defeating off-the-clock claims the employer should be able to show that it has a policy authorizing all hours worked to be reported, did not have a practice that was different from the stated policy, the employer paid for all hours recorded, and supervisors were not aware of off-the-clock work.  In those instances, Jong gives employers a strong framework for summary judgment motions being granted in their favor against off-the-clock claims.

The case is Jong v. Kaiser Foundation Health Plan, Inc., Case No. A138725, ___ Cal. App. 4th __,  (Cal. App. 1st Dist. 5/20/2014).  Read it here.  http://www.courts.ca.gov/opinions/documents/A138725.PDF.

In a recent 3-1 decision in Macy’s Inc., the NLRB used its controversial Specialty Healthcare decision in upholding as appropriate a micro bargaining unit of only 41 employees in the cosmetics and fragrances department of a Boston-area Macy’s store.  The Micro-Unit excludes all other sales employees at the store, despite there being almost 80 other salespersons employed there.  This case is the first NLRB matter that applied the Specialty Healthcare standard to a retail employer.   Applying the standards established in Specialty Healthcare, the NLRB found that the petitioned-for unit was appropriate because the 41 cosmetics and fragrances employees are a “readily identifiable group who share a community of interest.”  The NLRB further held that Macy’s had not met its burden of showing an “overwhelming” community of interest between those employees and the other sales employees in the store’s 10 other departments.

This is terrible news for all employers, especially those in the retail industry.  The Specialty Healthcare and Macy’s Inc. decisions help unions’ efforts to organize small groups of employees into “micro-units”, in order to gain a foothold within a targeting company.

Employers must therefore be mindful of this issue in preparing for and responding to union organizing campaigns, as unions are increasingly seeking to organize the smallest subset of employees which they believe they can secure a majority of supporters.

Read the decision here. http://mynlrb.nlrb.gov/link/document.aspx/09031d45817f7387.

Following the Yellow Brick Road of Employee Leave Rights and Accommodations.  SEAC invites you to spend the morning with attorneys and leave and accommodation experts Lizbeth (“Beth”) West and Charles (“Chuck”) Post from Weintraub Tobin as they discuss the ins and outs of this difficult area of employment law.

Date:         Wednesday, August 20, 2014

Time:         7:30 a.m. -12:30 p.m.

Location:       Sacramento State Alumni Center, 6000 J Street, Sacramento, CA

For information and details of this workshop, please click here.

A California businessman, Walter Liew, was recently sentenced to 15 years in federal prison after being found guilty by a jury on charges of trade secret theft, economic espionage, witness tampering and making false statements.  Mr. Liew, who had contracts with a Chinese company Pangang Group, was charged with stealing trade secrets from DuPont that included plans and information regarding a manufacturing plant.  The prosecutors allege that Mr. Liew helped the Pangang Group obtain these trade secrets to develop a manufacturing plant in China that would produce titanium dioxide, a white pigment.

Mr. Liew’s prosecution is another example of ongoing efforts by U.S. prosecutors to deter China from engaging in economic espionage and trade secret theft.  For more details about this case, please see http://www.bloomberg.com/news/2014-07-10/man-gets-15-years-prison-for-stealing-dupont-secrets.html.

On July 14, 2014 the EEOC issued its updated “Enforcement Guidance on Pregnancy Discrimination and Related Issues” (“Guidance”).  The stated purpose of the Guidance is to provide information regarding the Pregnancy Discrimination Act (“PDA”) and the Americans with Disabilities Act (“ADA”) as they apply to pregnant employees.  In addition to the new Guidance, the EEOC also issued a Q&A document and a Fact Sheet which both address the issues covered in the Guidance.

The Guidance summarizes the statutory protections for pregnant employees under the PDA and the ADA.   The Guidance includes specific discussions of:

  •  When employer actions may constitute unlawful discrimination on the basis of pregnancy, childbirth, or related medical conditions in violation of the PDA;
  •  The obligation of employers under the PDA to provide pregnant workers equal access to benefits of employment such as leave, light duty, and health benefits; and
  •  How Title I of the ADA (which went into effect over a decade after the PDA and was amended in 2008 to broaden the definition of disability) applies to individuals with pregnancy-related impairments.

The Guidance also discusses protections under various other laws like the FMLA, Executive Order 13152 which prohibits discrimination based on status as a parent, and certain state laws. It concludes with a section on best practices for employers.  Copies of the Guidance, the Q&A document, and the Fact Sheet can be obtained at:

http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm.

http://www.eeoc.gov/laws/guidance/pregnancy_qa.cfm.

http://www.eeoc.gov/eeoc/publications/pregnancy_factsheet.cfm.

 The Labor and Employment lawyers at Weintraub Tobin have years of experience in counseling employers in connection with workplace pregnancy-related issues.  Feel free to contact any of them at (916) 558-6000 or visit our website at www.weintraub.com.