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Mary Siceloff, Author at Weintraub Tobin - Page 127 of 179

Welcome to the Weintraub Tobin Resources Page

Browse below for news, legal insights, information on presentations and events, and other resources from the Weintraub Tobin legal team.


New Class Certification Opinion: California Employers – Reimburse Your Employees for Cell Phone Expenses

On August 12, 2014, the California Court of Appeal issued a short, but interesting decision that may trigger a new wave of class action lawsuits against California employers. In Cochran v. Schwan’s Home Service, Inc. (opinion found here), the Court ruled that employers must reimburse employees for the reasonable cost of using their personal cell phones for business purposes, regardless of whether the employees have plans with unlimited or limited minutes. The Court found that the amount owed is a “reasonable percentage” of the employee’s cell phone bill, although though no guidance was provided as to how to determine what “reasonable percentage” means.

Background: The plaintiff in Cochran filed a putative class action on behalf of 1,500 customer service managers alleging a violation of Labor Code section 2802 because the managers had not been reimbursed expenses related to their personal cell phones. Under section 2802, employers must indemnify employees for all necessary expenditures incurred by employees in the performance of their duties. The trial court denied class certification based on a lack of commonality – each class member would have to be asked who paid the phone bill and whether he or she purchased a different plan because of their work cell phone usage, and, therefore, incurred an “extra expense” as a result of their job duties.

Court of Appeal’s Decision: The Court reversed the denial of class certification and disagreed with the assumptions made by the trial court; namely, that: (1) employees are not entitled to reimbursement if a third person pays the bill; (2) employees are not entitled to reimbursement if they did not purchase a different plan because of their need to use their personal phone for work purposes; and (3) liability for failure to reimburse cannot be determined without an inquiry into each employee’s cell phone plan. The Court held that Labor Code section 2802 always requires reimbursement for the reasonable expense of a personal cell phone for work purposes. As the basis for this decision, the Court noted that the purpose of section 2802 is “to prevent employers from passing their operating expenses on to their employees” and, if reimbursement was not always required, employers would receive a windfall. Further, the Court stated, “to show liability under section 2802, an employee need only show that he or she was required to use a personal cell phone to make work-related calls, and he or she was not reimbursed. Damages, of course, raise issues that are more complicated.”

The implications of the Court’s rationale may be far reaching. Not only does this decision make it easier for a class to be certified under section 2802 claims, but this same rationale could be applied beyond personal cell phones. For example, the same arguments could be applied to personal internet plans or other personal electronics if the employee is required to access the internet from home or use any other personal electronics for work purposes.

Employer Takeaway: Employers should evaluate their reimbursement policies to determine if they need to be updated. If reimbursement policies do not yet exist, implementing a policy should be considered. If reimbursement policies need to be modified, employers will have to consider whether they should be modified retroactively or only on a going-forward basis. Ultimately, if employees are required to use personal cell phones for work purposes, employers should consider providing their employees with a cell phone plan. As the Court did not provide any guidance as to what a “reasonable percentage” means, an employer can get into muddy waters trying to determine what portion of an employee’s cell plan to cover.

Beth West Presents a Half-Day Workshop – Navigate Employee Leave Laws

Sacramento Business Journal reports that, “Post and fellow shareholder Beth West will present a half-day workshop on the topic Wednesday. Sponsored by the Sacramento Employer Advisory Council in partnership with the state Employment Development Department, the event will be held from 7:30 a.m. to 12:30 p.m. at the Sacramento State Alumni Center located at 6000 J St. The event costs $90 for members and $125 for nonmembers.

The Intricacies of Wage and Hour Laws for Non-Exempt Employees

  • When: Sep 18, 2014

Download: Flyer. Intricacies of Wage and Hour Laws for Non-Exempt Employees.PDF

Summary of Program

Unfortunately, both single-plaintiff and class-action wage and hour lawsuits
continue to plague California employers. Often employers are sued because
of technical violations that occur simply because the employer is unaware of
its legal obligations. Come join the Labor and Employment Group at
Weintraub Tobin as they discuss the “Ins and Outs” of wage and hour
compliance for “non-exempt” employees – there’s more to it than merely
paying overtime and providing meal periods.

Program Highlights

  • “Actual hours worked” and problems with “off the clock” work.
    • 24/7 connectivity through computers and mobile devices may create compensation issues.
  • Is your overtime rate correct?
    • It depends on whether you’ve properly calculated the employee’s “regular rate.”
    • What is and is not included in the “regular rate?”
  • Are you “providing” a meal period to your employees?
    • If your answer is “No” because you have an “on duty” meal period agreement with your employees – Is it valid?
    • If your answer is “No” because the Brinker case says you don’t have to – You’ll be surprised to learn that this is not so.
  • “Flex-time,” “make-up time,” and “alternative work” schedules.
    • What’s legal and what’s not?
  • What are the courts saying – highlights of recent decisions regarding non-exempt wage and hour issues in California.

Seminar Program

Thursday, September 18, 2014

9:00 a.m. Registration and Breakfast
9:30 a.m. – 11:30 a.m. Seminar

Approved for 2 hours MCLE credit; HRCI
credits available upon request.
There is no charge for this seminar.

RSVP

Ramona Carrillo
400 Capitol Mall, 11th Fl.
Sacramento, CA 95814
916.558.6046
rcarrillo@weintraub.com

No Inducing Patent Infringement Unless There is Direct Infringement

In a June decision, the U.S. Supreme Court resolved a key issue in patent law: whether a party can be liable for patent infringement when there is no underlying act of direct infringement.  Specifically, the court addressed whether a party who instructs multiple parties to perform different steps of a method patent can be liable for inducing infringement.  The Court’s answer:  no. The case is Limelight Networks, Inc. v. Akamai Technologies, Inc. (U.S. Supreme Court June 2, 2014) 2014 U.S. LEXIS 3817.

Patent infringement is either direct or indirect.  Direct infringement exists when a defendant makes, uses, sells, offers to sell, or imports into the United States a patented product or performs all of the steps of a patented method.  Indirect infringement exists when the defendant does not itself commit direct infringement, but causes another party to do so.  There are two types of indirect infringement: inducing and contributory.  A defendant has induced infringement when it instructs or causes another party to infringe a patent.  For a method patent, a defendant induces infringement if it instructs another party to perform all of the steps of the method.  The party who performs all of the steps is liable as a direct infringer, while the inducer is liable as an indirect infringer.  Contributory infringement, which is not relevant here, exists when a defendant sells or offers to sell a component that can only be used in infringing a patented invention.

Up until 2012, the law as established by the Federal Circuit Court of Appeals’ decisions, was that there could be no liability for inducing infringement unless there was an underlying act of direct infringement committed by a single party.  This was referred to as “single-entity rule.”  In the last few years, however, both parties and the courts have struggled with the issue of “divided infringement.”  Divided infringement is a phrase used to describe the situation where multiple parties perform the steps of a method patent, and no single party actually performs or controls the performance of all of the steps.  In such a case, there is no act of direct infringement committed by any party.  In 2012, the Federal Circuit decided Akamai Technologies, Inc. v. Limelight Networks, Inc., 672 F.3d 1301 (Fed. Cir. 2012) and dramatically changed existing law.

In Akamai, the Federal Circuit overruled its prior case law and held that a defendant could be liable for inducing infringement even if multiple parties performed different steps of the method as long as each step was performed by someone.  The court said that there should be no difference between an inducer who instructs a single party to perform all of the steps of a claimed method, an inducer who instructs multiple parties to each perform different steps of the claimed method, and an inducer who performs some of the steps itself and instructs others to perform the remaining steps.  According to the Federal Circuit, all three types of inducers should be liable for inducing infringement if they satisfy the following test: (1) the defendant knew of the plaintiff’s patent; (2) the defendant induced the performance of the steps of the claimed method (by performing one or more steps itself and inducing others to perform the remaining steps or by inducing others to perform all of the steps); and (3) the steps of the claimed method were actually performed.

The Supreme Court could not have been more clear in its reversal of the Federal Circuit’s decision, stating:

“The Federal Circuit’s analysis fundamentally misunderstands what it means to infringe  a method patent……[W]here there has been no direct infringement, there can be no inducement of infringement…”

Limelight Networks, Inc. v. Akamai Technologies, Inc.,  2014 U.S. LEXIS 3817, *10.

The Court went on to say, at *10:

“The Federal Circuit’s contrary view would deprive §271(b) of ascertainable standards.  If a defendant can be held under §271(b) for inducing conduct that does not constitute infringement, then how can a court assess when a patent holder’s rights have been invaded?……The decision below would require the courts to develop two parallel bodies of infringement law: one for liability for direct infringement, and one for liability of inducement.”

The Court explained that Congress clearly knows how to establish liability for inducing infringement, as shown by the adoption of section 271(f)(1).  That section imposes liability for a defendant who supplies components from the U.S. that are assembled into an infringing product outside the U.S.

The Court analyzed all of Akamai’s arguments under one principle: “Limelight cannot be liable for inducing infringement that never came to pass.”  Id. at *14.  The Court doubted that Congress intended to allow liability for inducing infringement when there was no direct infringement.  The Court dismissed Akamai’s argument that under tort law, a defendant may be liable for an injury caused by a third party even if the third party is not liable.  The Court said that in this case, the problem was not that the third parties were not liable, but that no injury (patent infringement) had occurred.  Id.  at *14-*15.

Akaimi also argued that the Court’s rule would allow a party to escape liability by simply dividing the steps of a method patent among multiple parties whom it did not control.  The Court acknowledged this problem, but concluded that any other rule would “creat[e]…some free-floating concept of infringement both untethered to the statutory text and difficult for the lower courts to apply consistently.”  Id. at *18.

When is Enough Really Enough? The Importance of Experts in Music Copyright Infringement Actions

On June 17, 2014, a federal judge in Illinois granted summary judgment to Stefani Joanne Germanotta against plaintiff, Rebecca Francescatti, in a copyright infringement matter because he found that no reasonable trier of fact could find that Ms. Germanotta’s song, “Judas,” is substantially similar to Ms. Francescatti’s song, “Juda.”  You may wonder, why you should care about these two unknown figures in the music industry, but the truth is, Ms. Germanotta is far from unknown.  In fact, she has been a staple in the pop music industry since she burst onto the scene in 2008 with the release of her album, “The Fame,” which had such hits as “Just Dance” and “Poker Face.”  By now you may have guessed—Ms. Germanotta is none other than Lady Gaga.

In her complaint, Ms. Francescatti alleged that Lady Gaga’s song, “Judas,” from the album “Born This Way,” infringed Francescatti’s copyright in her song, “Juda.”  According to Ms. Francescatti, she worked with co-defendant sound engineer, Brian Joseph Gaynor, to write “Juda” in 1999.  Ms. Francescatti alleged that Mr. Gaynor later collaborated with Lady Gaga in 2010 to create “Judas.”  According to Ms. Francescatti, the two songs have remarkably similar melodies, structure, bass lines, and further similar features.  This allegation was unsupported by expert testimony.

The record established that DJ Paul Blair was introduced to Mr. Gaynor in 2010 for the purpose of creating original material for Gaga’s ”Born This Way”  album, but DJ Paul Blair “denies ever having heard or received a copy of the Francescatti song, and denies giving a copy of the song to Gaga.”  Ms. Francescatti contended that the similarity in the song names evidenced infringement, but Lady Gaga maintained that she chose the title “Judas” because she felt betrayed by an ex-boyfriend and “Judas is the biblical betrayer of all things.”  In spite of this explanation, Ms. Francescatti filed suit in 2011.

In Lady Gaga’s motion for summary judgment, she stated that she never met with Mr. Gaynor and that Ms. Francescatti failed to present evidence that Mr. Gaynor or DJ Paul Blair ever provided Lady Gaga with a copy of “Juda.”  Lady Gaga claimed that Mr. Gaynor and DJ Paul Blair had no part in composing “Judas,” and that she wrote the song with her normal producer, RedOne.  Ms. Francescatti countered that Mr. Gaynor and DJ. Paul Blair are both credited on “Born This Way,” thereby giving rise to an inference that they worked on “Judas.”

The court granted Lady Gaga’s motion for summary judgment, finding that Ms. Francescatti failed to demonstrate actual copying of the protectable elements of “Juda.”  The court held that although a reasonable juror could find that a nexus existed between the parties and that defendants had an opportunity to hear the Francescatti song, the works are not substantially similar.  According to the court, “music…is inherently subjective,” and consideration of expert testimony is warranted because “a court’s lay ear may not be able to adequately assess the similarities between musical works.”  The court further remarked that:

“the concerns raised with the ordinary observer standard as related to music copyright cases can be ameliorated with the use of expert testimony in this case.  Due to the difficulty we face in ascertaining the alleged similarities between the songs, expert testimony is warranted in order to determine whether objective copying has occurred under the first prong of the substantial similarity analysis.  Specifically, because of the different musical genres we are presented with and the fact that the Gaga Song is computer-generated, our lay ears cannot be relied upon to determine whether there has been copying.”

Interestingly, an email from Ms. Francescatti on the day her lawsuit was filed explicitly admits to her family that “the songs don’t sound the same.”

Applying Illinois precedent, the court found that “although…Francescatti has established copying under the extrinsic test, she has failed to meet the requirements of the intrinsic test.”  Specifically, “[N]o reasonable trier of fact could find under the ordinary observer standard that the allegedly infringing elements of Gaga’s song capture the total concept and feel of the Francescatti song.  Even if the songs did share a similar total concept and feel, however, such similarities would arise from unprotectable elements.”

At the end of the day, the granting of Gaga’s motion raises the question of just how much it takes to establish that an individual has infringed another’s musical copyright.  It seems there was sufficient evidence of a connection between the two such that Ms. Francescatti should have been able to defeat the motion for summary judgment.  It appears from the court’s emphasis on expert testimony regarding musical copyright matters that if Francescatti had produced an expert who could testify that the two songs were substantially similar, and that Ms. Francescatti’s song may have been copied, there would have been a triable question of material fact.  The lesson here is that experts are vital in music copyright cases.  Or maybe, the lesson is simply that it is just more difficult to prevail against a superstar when courts are aware that these individuals are often the victims of extortionate lawsuits.

Does an Employer Meet its Obligations Under the FMLA by Sending an FMLA Designation Notice to an Employee via First Class Mail? Not Always

In Lupyan v. Corinthian Colleges, Inc., a FMLA interference lawsuit, the Third Circuit Court of Appeals reversed a summary judgment in favor of the employer when the employee claimed she never received an FMLA designation letter that her employer claims it mailed to her. The Court essentially held that if an employer wishes to prevail on summary judgment, it will need to send the FMLA designation letter via a method that establishes receipt by the employee.

Lisa Lupyan was hired as an instructor at Corinthian Colleges Inc. (“CCI”) in 2004. In December 2007, Lupyan’s supervisor, James Thomas, noticed that she seemed depressed and suggested she take a personal leave of absence. On her Request for Leave Form, Lupyan specified that she was taking “personal leave” from December 4, 2007 through December 31, 2007. However, Thomas suggested that she apply for short-term disability coverage instead.  Accordingly, Lupyan scheduled an appointment with her doctor and received a DOL “Certification of Health Provider.” Based on the Certification, CCI’s human resources department determined that Lupyan was eligible for leave under the FMLA, rather than personal leave so on December 19th, CCI’s Supervisor of Administration, Hixson, met with Lupyan and instructed her to initial the box marked “Family Medical Leave” on her Request for Leave Form. Hixson also changed Lupyan’s projected date of return to April 1, 2008, based upon the Certification.

Later in the afternoon of December 19th, CCI allegedly mailed Lupyan a letter advising her that her leave was designated as FMLA leave and explaining her rights under the FMLA (the “Letter”). Lupyan denies ever having received the Letter, and denies having any knowledge that she was on FMLA leave until she attempted to return to work. When Lupyan did not return to work after the exhaustion of her FMLA leave, her employment was terminated.  CCI explained that due to low student enrollment and her failure to timely return from FMLA leave, there was no position available to her. Lupyan claims that the first time she had any knowledge that she was on FMLA leave was at the time of her termination.

Lupyan sued CCI alleging that it interfered with her rights under the FMLA by failing to give notice that her leave fell under that Act, and that she was fired in retaliation for taking FMLA leave. The District Court granted CCI’s initial motion for summary judgment as to both claims. Thereafter, the District Court sua sponte reversed its ruling on Lupyan’s FMLA interference claim. The court recognized that summary judgment was not appropriate because there was a factual dispute regarding whether CCI had informed Lupyan of her FMLA rights. CCI responded with an amended summary judgment motion which included affidavits from CCI employees who testified that the Letter was properly mailed to Lupyan. Based on the affidavits, the District Court relied on the evidentiary presumption that arises under the “mailbox rule” and found that Lupyan had received the Letter. The Court entered summary judgment in favor of CCI, and Lupyan appealed.

The Court of Appeal explained that the FMLA requires employers to provide employees with both general and individual notice about the FMLA. To meet the general notice requirements, an employer must post a notice of FMLA rights on its premises. (29 CFR § 2619(a)). Because employers have some discretion in the way FMLA policies are implemented, employers must also include information regarding the employer’s FMLA policies in a handbook or similar publication. (29 CFR § 825.300).  Lupyan claimed that CCI interfered with her FMLA rights by not informing her that her leave was under the FMLA. According to her, she therefore was unaware of the requirement that she had to return to work within twelve weeks or be subject to termination.*  Given Lupyan’s claim that she did not receive the Letter that CCI claims was properly mailed to her, the Court had to decide whether the District Court properly afforded CCI the benefit of the presumption of receipt of properly mailed letters that arises under the “mailbox rule.”

Under the “mailbox rule,” if a letter “properly directed is proved to have been either put into the post-office or delivered to the postman, it is presumed . . . that it reached its destination at the regular time, and was received by the person to whom it was addressed.”  However, the presumption is a rebuttable presumption that can be rebutted by opposing evidence that the letter was never received.  The Court explained that in the absence of actual proof of delivery, receipt can be proven circumstantially by introducing evidence of business practices or office customs pertaining to mail. This evidence may be in the form of a sworn statement.  In this case, CCI submitted the affidavits of its Mailroom Supervisor and its HR Coordinator, both of whom had personal knowledge of CCI’s customary mailing practices when the Letter was allegedly mailed to Lupyan.  Moreover, the HR Coordinator swore that she personally prepared the Letter and placed it in the outgoing mail bin.

However, CCI provided no corroborating evidence that Lupyan received the Letter. The Letter was not sent by registered or certified mail, nor did CCI request a return receipt or use any of the now common ways of assigning a tracking number to the Letter. Therefore, the Court held that there is no direct evidence of either receipt or non-receipt.  Consequently, for purposes of a summary judgment motion, Lupyan’s contention that she had no notice that her leave was subject to the limitations of the FMLA because she never received CCI’s Letter, sufficiently burst the mailbox rule’s presumption, and requires that a jury determine the credibility of her testimony, as well as that of CCI’s witnesses.

Takeaway for Employers:

Employers should send all FMLA notices to employees via a method that tracks delivery and receipt by the employee (e.g. Federal Express or other overnight mail, certified mail/return receipt requested, or hand-delivery with a signed acknowledgment of receipt).  Be careful of sending the notices via email as, similar to this case, the employee could claim that he/she did not receive the email and the burden is on the employer to prove the employee did in fact open and read his or her email.

*Caveat:  Employers should never automatically terminate employees who do not return from FMLA (or CFRA) leave at the expiration of the 12 week period.  Instead they should engage in the interactive process to determine if the employee is eligible for a reasonable accommodation (including possibly more leave) under the ADA and FEHA.

Radical NLRB Looking To Expand Liability To Franchisors

In an attempt to gain leverage in settlement negotiations, the NLRB Office of the General Counsel issued a directive that has rocked the franchise world. Days ago, the NLRB Office of the General Counsel determined that McDonald’s USA, LLC, the franchisor, could potentially be held liable for the employment actions of its franchisees under a “joint employer” theory. The General Counsel’s decision has authorized numerous unfair labor practice complaints based on alleged violations of the National Labor Relations Act (NLRA) to proceed against both the franchisor and franchisee entities. While this shift by the NLRB is in its early stages, it is startlingly significant and tees up years of legal battles over the issue.
This decision follows an earlier amicus brief filed approximately one month ago on behalf of the NLRB General Counsel in Browning-Ferris Industries of California, Inc. The amicus brief argued that the Board “should abandon its existing joint employer standard.” The existing standard only finds joint employer liability when an employer exercises direct or indirect control over significant terms and conditions of employment of another entity’s employees. The amicus brief advocated for a new, more liberal standard “that takes account of the totality of the circumstances, including how the putative joint employers structured their commercial dealings with each other.”
The NLRB’s proclamation sent shockwaves through the franchise world. If the NLRB General Counsel follows through on its threats and Court’s later ignore precedent and adopt this radical viewpoint, the essence of the franchise business model would be significantly affected. Typically, franchisors do not exert the level of control over the franchisees’ terms and conditions of employment to be deemed a joint employer. This has stuck the appropriate balance between franchisor and franchisee liability. Under the existing standard, those franchisors that do exhibit control open themselves up to being held joint employers. Those that don’t, don’t. The proposed “totality of the circumstances” standard blurs the line that franchisors rely on in setting up their business model and managing their liability.
The new standard becomes a catch-22 for franchisors. Franchisors would have to consider whether they need to exercise more control over the terms and conditions of the franchisees’ employees’ employment. Franchisors may then feel compelled to weigh in on wages, payroll organization, hiring decisions, terminations, and disciplinary issues typically solely left to franchisees. When they do so, they will fall into the NLRB’s General Counsel’s trap and perpetuate the argument that they are joint employers.
We will have to wait and see whether the NLRB begins actively pursuing “joint employer” cases against other Franchisors or parent companies that would otherwise not have been included in the earlier definition of “employer” under the NLRA. However, this change in course by the NLRB may also send a signal that other departments within the administration, i.e. the Department of Labor, Equal Employment Opportunity Commission.
The NLRB is still in its investigation phase with McDonald’s franchisees. McDonald’s has responded to the NRLB stating, “We believe there is no legal or factual basis for such a finding, and we will vigorously argue our case at the administrative trials and subsequent appeal processes which are likely to follow from the issuance of the complaints.” If the complaints are issued against McDonald’s as a franchisor, the next step will be for McDonald’s to address any complaints filed against it before an administrative law judge. Depending on the outcome, the issue could then go to the full Board or the Courts. Depending on what type of administration we get in the coming years or changes at the NLRB, we may see this issue flip flop between standards for a while. Certainly this issue is one that could eventually be decided by the U.S. Supreme Court. McDonald’s deserves our support during this fight. So super-size your order because this fight is going to cost a lot more than their dollar menu can support.

DOL Racing California to a Minimum Wage Ceiling: $10.10 Minimum Wage for Federal Contractors via Proposed Rule Implementing Exec. Order 13658

On June 12, 2014, U.S. Secretary of Labor Thomas E. Perez announced a proposed rule raising the minimum wage to $10.10 per hour starting on January 1, 2015, for workers on federal service and construction contracts. The proposed rule implements Executive Order 13658, “Establishing a Minimum Wage for Contractors,” which President Barack Obama signed on February 12.31

California Class Actions: Great Decision in “Off-The-Clock” Claim

By The Labor and Employment Group

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

The Dawn of the “Micro-Unit”: NLRB Upholds Petitioned-For “Micro-Unit” at Macy’s Store as Appropriate

By The Labor and Employment Group

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.