In Bernard v. State Farm Mutual Automobile Insurance, plaintiff sued his employer for constructive discharge and "breach of covenant of good faith and fair dealing," claiming it misrepresented its sales program requirements. Plaintiff claimed the company had a termination for cause only policy. However, he had signed the following at will agreement: "You or State Farm have the right to terminate this Agreement by written notice delivered to the other or mailed to the other’s last known address." The termination provision also provided for termination upon specified notice. The court found that this provision negated any arguments that the company needed good cause for termination.

Plaintiff Varisco was certified by the California Division of the State Architect (“DSA”) as a Class-1 Inspector. On January 30, 2004, Gateway Science entered into a written agreement with Varisco which stated that Gateway Science would pay Varisco for providing DSA Inspection Services to the Los Angeles Unified School District. In November of 2004, Gateway Science sent Varisco a letter terminating the relationship because Varisco refused to sign a new contract with Gateway Science, and refused to provide Gateway Science with various documents that it requested. Varisco sued Gateway Science for damages under various theories, arguing that he had actually been an employee instead of an independent contractor.

 

Continue Reading “At Will” Clause in a Contract for Services Does Not Mean the Worker is an Employee: Varisco v. Gateway Science and Engineering, Inc.

Introduced in September by Barack Obama, SB 2044 places stricter requirements on who can be classified as an independent contractor rather than an employee. If independent contractors are moved into the category of employees, employers will be required to pay higher taxes on those individuals. Additionally, such legislation would increase potential liability concerns for employers. The legislation is still pending.

The California Supreme Court in Jones v. The Lodge at Torrey Pines Partnership ruled that individuals may not be held personally liable for retaliation claims under the FEHA.

If you read the FEHA, section 12940(h) makes it unlawful for any “employer, labor organization, employment agency, or person” to retaliate against an employee. Read literally, this would appear to impose individual liability on a “person” who retaliates. California intermediate appellate courts have wrestled with the issue for years. However, in a decision split 4 to 3 among the justices, the California Supreme Court has finally decided the matter.

As outlet manager, Jones was responsible for the restaurant, bar, catering and banquet events, and the beverage cart service to golfers on the golf course. In October 2000, The Lodge hired a new beverage director, Jean Weiss. That is when the alleged problems began. Weiss and the kitchen manager developed a habit of telling jokes and making sexual remarks about women and employees known as “cart girls.” They also made fun of Jones’ sexual orientation. Jones complained about this treatment. Jones alleged that Weiss became hostile and threatened to fire Jones if he reported the matter to human resources. Jones did complaint to the HR manager and Weiss subsequently retaliated by writing him up for a laundry list of performance problems. Finally, Jones filed a DFEH complaint, resigned, and sued for sexual orientation discrimination against his employer and for retaliation against his employer and his supervisor, Weiss, individually.
Continue Reading California Supreme Court: No Individual Liability for Retaliation under FEHA: Jones v. The Lodge at Torrey Pines Partnership

In Meacham v. Knolls Atomic Power Laboratory, an employer used a "matrix" method to carry out a reduction in force. The employer’s method ranked its employees based on objective factors (i.e. performance and years of service) and subjective factors (i.e. flexibility and criticality). The employer then conducted a disparate impact analysis for the lowest scoring employees for several protected categories. However, no analysis was done for the employees’ ages. 30 of the 31 workers laid off were over the age of 40.
28 of the laid off employees filed suit against the employer under the ADEA. The jury awarded the employees $6 million and the Second Circuit affirmed.
In an earlier case, Smith v. City of Jackson, the Supreme Court held that the ADEA permits "disparate impact" claims where an employment practice adversely harms older workers even without intent to do so. In Smith, the Court noted that the "reasonable factors other than age" provision in the ADEA was an important safeguard against employer liability, but it did not decide who had the burden of persuasion on that issue.
The Supreme Court agreed to decide one simple question in the Meacham case: does the employee or the employer have the burden of persuasion regarding the "reasonable factors other than age" issue? The Supreme Court held that the employee must establish the disparate impact, and the employer must prove that any disparate impact was based on reasonable factors other than age.