Quote of the Week: Andrew Jackson

One man with courage makes a majority.

Andrew Jackson

Why post this here? As advocates for employees in wage and hour cases, we sometimes have the good fortune to represent people who want to help not only themselves, but also their co-workers. The decision to stand up for other people can be difficult to make. Our clients know that class actions can take years to prosecute and that they will have to provide information, documents, and a deposition, and be available at every step along the way. They also know that their current or former employer may be tempted to retaliate against them for standing up for themselves and their co-workers. The people who ultimately choose to be class representatives are those who trust the courage of their own convictions. One person with courage makes a majority.

More Good Stuff From the UCL Practitioner: Live Blog of Advanced Class Action Seminar

Last night, the UCL Practitioner did a live blog from a seminar on Advanced Class Action topics, with a focus on wage and hour. Speakers included Judges Robert Freedman and Steven Brick from Alameda County's complex department, Judge David Flinn from Contra Costa County's complex department, and research attorneys Philip Obbard and Walter Stemmler from Alameda County's complex department. Many thanks to the UCL Practitioner for making this info available for those of us who couldn't make it. (It sounded like a good seminar, but I wasn't going to travel from LA for it!)

Quote of the Week: The Seventh Amendment

In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise re-examined in any Court of the United States, than according to the rules of the common law.

Seventh Amendment to the Constitution of the United States of America.

Why post the Seventh Amendment? Too many companies and employers are forcing their customers to waive their right to jury trial by imposing mandatory arbitration schemes that work to protect the companies' and employers' short-term interests, but subvert the interests of justice. People far too often forget that the right to jury trial is not trivial. It is a fundamental, core principal of American democracy. If it was important enough for our country's founders to put in the Bill of Rights, it is important enough for us to fight to protect.

Ninth Circuit Decision on Individual Manager Liability Under FLSA

This case arises out of Nevada, but it has parallels in California law that make it worth reading. In Boucher v. Shaw (9th Cir. July 27, 2009), the Ninth Circuit looked at whether an employer's individual managers could be held liable for unpaid wages under Nevada law or the Fair Labor Standards Act (FLSA). The Ninth Circuit certified the first issue to the Nevada Supreme Court, which held that the managers could not be held liable under Nevada law. The Ninth Circuit held that the managers could be held liable under FLSA.

Plaintiffs sued three individuals: the employer's chairman and CEO; the CFO; and the person responsible for handling labor and employment matters. Between them, the CEO and CFO owned 100% of the employer. The plaintiffs alleged that each defendant had custody or control over the “plaintiffs, their employment, or their place of employment at the time that the wages were due.” The District Court granted the individuals' motions to dimiss, and the plaintiffs appealed.

The Ninth Circuit reversed and remanded. First, the Court noted that the FLSA defines “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee . . . .” 29 U.S.C. § 203(d). Citing cases going back to Rutherford Food Corp. v. McComb, 331 U.S. 722, 730 (1947), the Court then noted:

[T]he definition of “employer” under the FLSA is not limited by the common law concept of “employer,” but “ ‘is to be given an expansive interpretation in order to effectuate the FLSA’s broad remedial purposes.’ ” The determination of whether an employer-employee relationship exists does not depend on “isolated factors but rather upon the circumstances of the whole activity.”

***

Where an individual exercises “control over the nature and structure of the employment relationship,” or “economic control” over the relationship, that individual is an employer within the meaning of the Act, and is subject to liability.

With these principals in mind, and accepting the complaint's allegations as true, the Court held that the District Court erred in granting the motions to dismiss. The Court further held that the employer's bankruptcy filing had "no effect" on the claims against the individual managers under the FLSA, a point that the individuals tried to rely on. "[T]he managers are independently liable
under the FLSA, and the automatic stay has no effect on that liability."

Given Reynolds v. Bement and its progeny and the fact that we still don't have a ruling in Martinez v. Combs, employees left holding the bag when their employer goes out of business or files for bankruptcy should carefully consider whether the employers individual managers can be held liable under the FLSA.

Another Decision for Employees on Independent Contractor Status

Although not every case on independent contractor status has gone in favor of the employees, the list of such cases is long and growing. This testifies in part to the efforts of employers to avoid their obligations by calling their employees independent contractors. It also testifies to the broad efforts by employees and government agencies to fight this growing trend.

In Messenger Courier Assn. of the Americas v. Cal. Unemployment Ins. Appeals Bd. (July 15, 2009), the Fourth District Court of Appeal held that the Appeals Board got it right when it assessed unemployment insurance employer contributions and penalties against a courier service that designated its drivers as independent contractors, rather than employees. NCM Direct Delivery v. Employment Development Department, Precedent Tax Decision No. P-T-495 (2007). The Court held that the Board properly applied the mutli-factor test found in SG Borello and Sons and other cases to the unemployment insurance case at issue, rather than relying only on the common law right of control test.

Quote of the Week: MLK

All labor that uplifts humanity has dignity and importance and should be undertaken with painstaking excellence.

Dr. Martin Luther King, Jr.

Follow-Up on Hiestand v. City of Sacramento

Kim Kralowec obtained a copy of the complaint discussed in my post yesterday. She added an interesting discussion of standing, class certification, and recovery issues arising under 17200 and In re. Tobacco II. Kim's post is here.

"Tort Reform Leader Brings Class Action Over Towed Car"

Thank you to Kim Kralowec for posting this on her blog:

Today's Recorder has this article about a recently-filed UCL class action. I haven't seen a copy of the complaint yet. If anyone has it, please forward (uclpractitioner@gmail.com). Thanks!

So let me see if I've got this straight.

First, Mr. Hiestand apparently believes that it's OK for him to park in a red zone because he couldn't find anywhere else to park, and his kid's tummy was grumbling. I guess he thinks that the laws apply to other people, but not to him.

Second, while Mr. Hiestand apparently believes that non-profit organziations should not be able to use the UCL to prevent retailers from selling cigarettes to kids (Stop Youth Addiction v. Lucky Stores, Inc. (1998) 17 Cal.4th 553) or to prevent General Foods from marketing cereals to kids that are 38% to 50% sugar as being "healthful and nutritious" (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197), he believes that he should be able to use the UCL to sue the city, the police chief, police officers, and the towing company for towing his illegally-parked car. (FYI, non-profits can't file true public protection law suits any more because of Prop. 64, which Mr. Hiestand and his employer, CJAC, championed.)

Finally, Mr. Hiestand apparently believes that his pledge to donate any proceeds of his action to his employer absolves him of his obvious arrogance and hypocrisy.

This would be funny if it weren't so disgusting.

Quote of the Week: FDR

No business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By living wages I mean more than a bare subsistence level -- I mean the wages of decent living.

President Franklin Delano Roosevelt in 1933, urging the passage of federal minimum wage legislation.