News

Matt Sugarman client Mary Robinette Kowal received the 2019 Nebula Award for her novel The Calculating Stars. The novel is the second installment in the Hugo-award-winning author’s Lady Astronaut series, which re-envisions the history of the space race. The prestigious award is presented by the Science Fiction and Fantasy Writers of America. The first installment in the series the “The Lady Astronaut of Mars” won the 2014 Hugo Award for Best Novella.

Matt and the entire Weintraub firm extend their warm congratulations on this tremendous honor.

The Nebula Awards have been given each year since 1965 for the best novel, novella, novelette, and short story eligible for that year’s award. A full list of this year’s awards can be found in this article from The Verge.

Weintraub is pleased to welcome Jamie Lincenberg to our Entertainment group. Jamie’s practice focuses on entertainment and Digital Media transactions with a focus on development and production deals for scripted and unscripted television,  film, music, branding and endorsement deals, and representation of content creators.

Weintraub Tobin Shareholder Matt Sugarman congratulates his clients F.J. DeSanto, Damian Wassel, and Vault Comics on the SyFy series order for a live-action adaptation of Vagrant Queen.  DeSanto and Wassel will serve as Executive Producers on the 10-episode, one-hour science fiction adventure series, which will air in 2020.

For more details, read the full article in Deadline.

Join attorneys from Weintraub Tobin’s Workplace Investigations Unit (Lizbeth [“Beth”] West and Meagan Bainbridge) for a hands-on training where they will discuss the fundamentals of an effective workplace investigation. Examples of topics to be discussed include:

• The duty to investigate
• Selecting the right investigator
• The importance of clear investigative scope
• Conducting effective witness interviews
• Synthesizing facts and assessing credibility
• Recognizing and eliminating biases and moral judgments
• The components of a meaningful investigation report

Who should attend:

• In-house HR Professionals
• In-house EEO Officers
• Attorneys
• Licensed Private Investigators

Date & Time
Thursday, April 18, 2019

Seminar Program
8:30 a.m. – 9:00 a.m. – Registration & Breakfast
9:00 a.m. – 12:30 p.m. – Training

Location
Weintraub Tobin Office
400 Capitol Mall, 11th Floor | Sacramento, CA 95814

Cost
$250 per person (payment must be received by 4/15/19)

CLE
Approved for 3.5 hours MCLE. This program will be submitted to the HR Certification Institute for review.

Additional Questions
Ramona Carrillo | [email protected] or 916-558-6046

To Register
Please RSVP by Monday, April 15, 2019

Gig Economy Workers Gain Security, But at What Cost?
by Scott Rodd, Stateline

SACRAMENTO, Calif. — It started with installing some red and green LED lights. Then came the disco balls, neon eyeglasses and a gold Bluetooth karaoke microphone.

Daniel Flannery had transformed the car he drives for Uber and Lyft into a party on wheels.

“You put everything together, and it encourages people to loosen up,” he said. “Sometimes, I have people call me up and say, ‘We don’t want to go anywhere — we just want to drive around and sing.’”

Flannery, who drives to supplement his retirement income, said he loves the freedom that comes with it — setting his own schedule and adding his own flair to what he dubs his “Swag Rides.”

Much of that freedom comes from being classified as an independent contractor. But a 2018 California Supreme Court decision could change the nature of working in the gig economy while providing a model for other states.

The “Dynamex decision,” as it’s commonly called, established a new test for how businesses in California must classify workers. Depending on how the state legislature acts, employment experts say the decision likely will require a range of businesses — from ride-hailing companies to trucking firms to barber shops — to reclassify independent contractors as employees or to restructure their business models.

Critics argue the decision threatens to disrupt industries that have traditionally relied on independent contractors. Some contractors, like Flannery, say they are worried that being reclassified as an employee would limit the professional freedom they currently enjoy in their work schedule, habits and rates.

But labor advocates argue the decision can help ensure that the growing number of gig workers receive benefits, such as health insurance coverage, and workplace protections, such as a guaranteed minimum wage, overtime and workers’ compensation.

The California labor department estimates that the practice of wrongly classifying workers as contractors instead of employees costs the state about $7 billion a year in potential payroll tax revenues.

While some businesses have started reclassifying workers under the new court test, others are awaiting the outcome of an ongoing battle in the California legislature. Lawmakers might codify the test in state law, override the decision or create carveouts for specific industries.

“We want to clear up any confusion about the new test,” said Democratic Assemblywoman Lorena Gonzalez, who introduced a bill in December to preserve the court’s decision in the state labor code. “Instead of going piece by piece through the court system, we want to codify it in law.”

Employee vs. Independent Contractor

The new test established three criteria for employers to use to identify a worker as an independent contractor: The worker must be free from the employer’s “control and direction” in carrying out duties; must perform a job outside the employer’s usual line of work; and must regularly do the same type of work as will be done for the employer.

The court reached its decision in a lawsuit filed by drivers for Dynamex, a delivery and logistics company that ships goods to consumers. In 2004, the company reclassified its employees as independent contractors. Drivers now had to use their own vehicles and cover work-related expenses, such as liability insurance, fuel and vehicle repairs.

The drivers pushed back, taking legal action to preserve their status as employees. The court’s decision determined Dynamex’s drivers should be classified as employees. The decision set a precedent that would ostensibly apply to all employers in California.

The Dynamex test is modeled on nearly identical tests established in other states. Massachusetts changed its labor laws in 2004 to apply the same test criteria, which has sparked legal challenges by independent contractors aiming to be reclassified and by businesses that want to continue to classify workers as independent contractors.

In February 2018, for example, a Massachusetts appeals court ruled against GateHouse Media, finding the company must classify its newspaper delivery drivers as employees.

New Jersey’s labor laws apply the same test, but state elected officials disagree over its application and enforcement.

In 2013, then-Gov. Chris Christie vetoed a bill that would have automatically classified truck drivers as employees and imposed harsh penalties against trucking companies that misclassified drivers. The Republican argued it would make New Jersey “unfriendly to the trucking industry.”

The requirement that a worker perform a job outside the employer’s usual line of work is the most crucial part of the test, said Lukas Clary, a Sacramento-based labor and employment attorney at Weintraub Tobin Chediak Coleman Grodin Law Corp.

“Almost all pre-Dynamex independent contractors were hired to perform work that is within the scope of the company’s business,” Clary told Stateline.

Clary said some industries, such as the trucking industry, see the new test as an “existential” threat.

“This decision will potentially put me out of business — and thousands of people like me,” said John Pitta, the owner-operator of a trucking business in Salinas.

Pitta drives a dump truck, a niche that makes his services in demand. He contracts with larger trucking companies as an independent contractor. He said he fears the Dynamex decision will dissuade large trucking companies from hiring him because they won’t want to classify him as an employee.

In July, the Western States Trucking Association, which represents large trucking outfits and independent truckers in 11 states, filed suit against the state of California in federal court, claiming the Dynamex decision is pre-empted by the Federal Aviation Administration Authorization Act of 1994. That law prohibits states from enacting laws “related to a price, route, or service of any motor carrier.”

“Trucking companies … will either have to dramatically increase their prices to account for all of the additional costs associated with hiring employees, or they will have to dramatically reduce the quantity and quality of services they provide,” according to the association.

Clary said many California businesses have started to reclassify their workers as employees, while others are attempting to adjust their business model.

“Misclassification can be extremely costly,” Clary said. “If enough workers are misclassified, the claims can be brought as class or representative actions, and the damages could be multiplied across the workforce.”

Drivers and Barbers

About 1 in 10 Californians in the previous year had participated in the gig economy, such as driving for companies like Uber and Lyft, a 2018 survey found. Conducted by the Public Religion Research Institute, a nonpartisan polling group, the survey found that nearly half the Californians who participated in the gig economy were low-income.

The decision should extend employee benefits, such as guaranteed minimum wage, health care coverage and overtime pay, to gig economy workers, argues Shannon Liss-Riordan, a class action attorney and partner at Lichten & Liss-Riordan, P.C. in Boston.

Liss-Riordan said she has filed lawsuits on behalf of workers against all major gig economy employers, including Uber, Lyft, Postmates and DoorDash.

Liss-Riordan is currently representing a worker in a lawsuit against Grubhub in the U.S. Court of Appeals for the 9th Circuit in California. The case seeks a declaration from the court that the worker is an employee under the new Dynamex test.

But Loni Mahanta, vice president of public policy development at Lyft, said in a statement that the company’s drivers “are independent contractors who decide when, where and for how long they wish to drive,” and that “they tell us that this flexibility is incredibly important to them.”

Flannery, the Uber and Lyft driver, said the flexibility goes beyond the lights and karaoke microphone in his car — he also has a medical condition that can prevent him from working, so he said he needs to have control over his schedule.

Uber, DoorDash and Grubhub did not respond to requests for comment.

 

Weintraub is pleased to welcome Carlena Tapella to our Trusts and Estates Group, where her practice includes a wide spectrum of trust, estate, and conservatorship litigation and administration.

Weintraub client, local restaurant owner Jared Katzenbarger, was in the news this week after he filed suit against Dickey’s Barbecue Restaurants, Inc. The lawsuit is in response to Dickey’s demand that Mr. Katzenbarger enter into arbitration regarding Dickey’s franchise restaurants that Mr. Katzenbarger has since closed and replaced with original concept restaurants Jyro’s Twisted Gyros and Side Burn BBQ and Beer.

The Sacramento Bee article on the dispute reports that Mr. Katzenbarger is not the only Dickey’s franchisee that has had trouble with the nationwide chain.

Mr. Katzenbarger is represented by Lukas Clary.