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Can You Require A Pregnant Employee To Stay Home?

April 23, 2015 By Israel Samuels LLP Leave a Comment

Have you ever felt great concern regarding a pregnant employee, very close to term, who insists that she can work all the up to childbirth? Might she harm herself, or the fetus? As an employer, you might consider whether you can require her to stay home until the child is born.

A recent press release by the EEOC announced suit against an employer who allegedly required a pregnant employee to take unpaid leave until she was cleared by a doctor indicating that she could work despite her pregnancy. The EEOC further alleges that the employee was fired in retaliation when she failed to provide a release, and disputed whether the requirement was legal. Thus, under federal anti-discrimination laws the EEOC concludes that an employer cannot make a pregnant employee stay home until she gives birth.

Still worried about a claim of fetal work-related injury if the pregnant employee should continue to work? The U.S. Supreme Court has suggested that compliance with the Pregnancy Discrimination Act shields employers from liability for fetal injury. The same Court also recognized a very narrow safety exception that permitted an employer to remove a pregnant employee from the workplace, but, it applies solely in instances where the pregnancy actually interferes with the pregnant worker’s ability to perform the job. If that situation arises, we suggest strongly consulting with your Labor Attorney before taking any action.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.

Putting A Hold On That Honey Bucket

April 20, 2015 By Israel Samuels LLP Leave a Comment

In a recent CAL-OSHA enforcement action a contractor was cited for not having portable toilets and washing facilities on a residential job site.

Although the fines were minimal, a total of $390, the potential implications for having to comply at every residential job site would have been quite costly and burdensome. The contractor’s crews were typically only on a project for about four hours and then only one time, and the contractor insisted it fell within the “mobile crew exception” to the requirement to provide portable toilets and washing facilities. The costs to the contractor, if it did not appeal, would have been quite expensive and burdensome. The only feasible way to comply would have been to purchase or rent portable units that could be towed from job to job. The contractor would have needed an additional vehicle and driver for each job site (many smaller contractors are still large enough to have small crews working simultaneously at two or more work sites), and that might have put the contractor out of business.

The contractor appealed and continued to maintain that the mobile crew exemption applied. He obviously paid a lot more than the $390 to challenge the citation. On the morning of trial, at the suggestion of the Administrative Law Judge, CAL-OSHA’s attorney agreed to a pre-hearing discussion, and agreed that the exception probably did apply and withdrew the citation.

One-Sided “Loser Pays” Provisions

April 16, 2015 By Israel Samuels LLP Leave a Comment

Before we get off this topic of who pays legal fees, there’s one other special provision that applies in California.

Have you ever had a contract form presented to you, which provides that if the party who drafted the contract sues you and prevails, you have to reimburse the party for legal fees and other costs, but makes no mention of your rights to be reimbursed if you prevail in the legal action?

Not to worry: California Civil Code §1717 says that even if a contract specifies that only Party A will be entitled to legal fee reimbursement if prevailing, Party B is automatically eligible for court-awarded reimbursement of legal fees and costs if Party B prevails. Most people will see that as fair and equitable.

If you are presented with such an adhesive and unfair contract, it should also cause you to take a moment to consider how you feel about dealing with a firm whose attorney has inserted a clause like this. What else has been inserted that is one-sided and unfair? How much extra effort will your attorney have to undertake to ferret out other such abusive contract terms, and seek their amendment or removal? Have your attorney review a proposed contract BEFORE you sign is always a prudent course of action.

You Won Your Lawsuit! Now, Can You Be Reimbursed for Your Legal Fees?

April 13, 2015 By Israel Samuels LLP Leave a Comment

It depends.

If you had a dispute with a British firm, and British law applied, then the “loser pays” rule would likely apply. This rule has its roots in the admirable objective of trying to avoid frivolous lawsuits or vexatious litigation, as well as encouraging settlement of lawsuits where one party is clearly “in the right” and is likely to prevail if the matter goes to trial.

But the “American Rule”, which applies in most states, allows the prevailing party, in most legal disputes that go all the way to trial, to be reimbursed for costs and attorney fees only if that is specified in a written contract, provided for as a matter of specific statute because a significant public benefit was vindicated, or for certain types of actions alleging fraud.

Awareness of the likely result if a dispute arises, with regard to this issue of legal-fees reimbursement, can also be an issue when your attorney is drafting a contract for you. Should every contract contain a “loser pays” legal fee clause? Some attorneys would say “always” or at least “almost always”. Others might argue, at least for particular types of contracts, that you’re better off without such a clause, because that will discourage lawsuits by either party unless they’re “strong.”

What it comes down to is this: the inclusion or exclusion of a “loser pays” provision in a contract into which you enter can be a strategic decision, often based on “legal factors” with which most laypersons will not be familiar. At the very least, you should discuss this subject with your attorney to better understand his personal preferences regarding various contractual provisions, because the ultimate decision resides with you as to whether particular provisions such as this should be included or excluded.

Offer to Compromise: Can It Be Used Against You?

April 6, 2015 By Israel Samuels LLP Leave a Comment

You’ve had an argument with a supplier, or customer, or someone with whom you’ve had a little “fender-bender.” There’s a major disagreement over how much is owed and if you are even responsible.

You believe that you didn’t really do anything wrong, and shouldn’t owe anything. But your lawyer warns you that legal fees to vindicate your position could easily cost you tens of thousands of dollars, which could exceed the total alleged damages, and there’s no way to get your attorney’s fees back.

So, you pick up your phone, call the other party, and without admitting any legal responsibility, offer to pay him $5,000 to “go away.” He says “put it in writing, I’ll think about it.”

So, you write a brief one-sentence email repeating your offer. After some back and forth, the other party refuses your offer, and files a lawsuit.

As the legal maneuvering gets under way, your adversary files a motion with the court, asking for judgment in his favor based on his contention that your written offer to settle, amounts to an admission that you are responsible. After all, why would you offer to settle if you really had no responsibility?

The answer: Your adversary is wrong. California Law (Evidence Code §1152) provides that an offer to compromise cannot be used against you, in an attempt to prove your responsibility.

But do remember that there are exceptions or differing interpretations for many laws. It is risky to try to handle it on your own, so this is another situation where involvement of your attorney at an early stage of attempting to resolve the dispute may be worth its weight in gold.

New Legal Name/Social Security Number Not Good Cause for Firing

March 30, 2015 By Israel Samuels LLP Leave a Comment

An employee presents your HR staff person with a changed name and a new social security number. You have strong suspicions that the information given you when the employee was hired was false, or that the employee did not previously have the legal right to work in this country, or perhaps even to be in the country.

DO NOT decide to terminate the employee to avoid any problems.

At least not without a careful further investigation. Employers should not automatically terminate employees who present new legal documents without first reviewing the matter with an attorney who will consider all the legal issues raised by new documents.

Last year, a new immigration-related retaliation law was passed in California to, among other things, protect an immigrant from being discriminated against, discharged or retaliated against for updating or attempting to update his or her personal information.

This year, legislation was passed and signed into law to clarify what is meant by “personal information”—specifically adding “name” and “Social Security number.” This amendment was added to Labor Code Section 1024.6 and went into effect January 1, 2015:

1024.6. An employer may not discharge an employee or in any manner discriminate, retaliate, or take any adverse action against an
employee because the employee updates or attempts to update his or her personal information based on a lawful change of name, Social Security number, or federal employment authorization document. An employer’s compliance with this section shall not serve as the basis for a claim of discrimination, including any disparate treatment claim.”

In the past employers could take the position that an employee who misrepresented key information at the time of hire could be automatically terminated. Now employers must exercise caution and seek legal counsel before termination of an employee who updates his or her personal information. Employees may make legal changes to their name or Social Security number and may not be terminated for doing so.

As for the Form I-9, if the employee presented original documents that established identity and work authorization at the time of hire and the employer certified that the documents appeared genuine and the employer had no knowledge that an employee was not authorized to work, there is no I-9 violation.

Going forward, if the employee provides new legal documents, the employer should re-verify employment of that employee based on the new documents. There are now penalties that permit an employee to recover damages and attorney fees. It is important for employers to be aware of this law and not terminate employees for this issue, unless they are completely sure they comply with applicable law when doing so.

Proprietorship, Partnership, Corporation, LLC: Which is Best for Your Business?

March 23, 2015 By Israel Samuels LLP Leave a Comment

If you are operating a business as a sole proprietorship, or as a partnership if there is more than one co-owner, you probably pay self-employment taxes (social security, etc.) on your entire share of the company’s profits. Corporations and Limited Liability Companies (LLC), on the other hand, are taxed differently.

A corporation pays its share of employment taxes and withholds certain required income and employment taxes from employees’ compensation. Corporations and their employees pay these taxes only on the reasonable salaries paid to employees, not on the total profits of the corporation.

Learn the differences between a Sub-S and a Sub-C corporation, and decide which is best for you.

If you have any doubts about whether you have adopted the best form for your business, or are starting a new business or subsidiary (or buying a business), have a planning meeting with your attorney and your accountant to evaluate what form of organization would be best for your enterprise.

Worker Commute Time Should Be Compensated If Duties Are Performed

March 16, 2015 By Israel Samuels LLP Leave a Comment

The general rule is that an employee’s commute to work, from home to the company door, is unpaid.

But what if an employee – say, a service technician – drives his/her own vehicle to the first worksite of the day, with tools, equipment and spare parts in the trunk?

The law is not so specific that it defines in great detail all situations which might arise. The obligation to compensate an employee depends upon whether the time spent meets the definition of “hours worked” found in the Industrial Welfare Commission Orders, Section 2, Definitions.

“Hours worked” means the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”

The Division of Labor Standards Enforcement (DLSE) gives guidance about travel time in its Opinion Letter 2003.04.22, stating in part: “Also, if the travel involved the employee being required to deliver any equipment, goods or materials for the employer, the travel, no matter how extended, would be compensable.”

On the basis of this definition, when an employer directs an employee to deliver tools and equipment, the employee is working and the hours are compensable.

On the other hand, if the employee is simply driving to the first place he/she is to report for work without any additional obligations imposed by the employer, that commute time is not compensable.

When an employee is performing a duty for the employer, the fact that it is the employee’s first commute of the day does not negate the obligation to pay for all hours worked. This means whether the employee is driving his/her own vehicle or a company vehicle, he/she is on the clock when commencing to drive to the work location.

Also, keep in mind that if the employee is driving his/her own vehicle, mileage reimbursement will be required.

Deciding what is and is not hours worked can be complicated. We recommend that you develop a policy about travel time payment and make sure your managers/supervisors are aware that asking an employee to deliver equipment
to a job site may create a time and mileage obligation for the company.

Workers’ Comp Rates: Big Increase Ahead (State Fund)

March 9, 2015 By Israel Samuels LLP Leave a Comment

Just after last month’s issue of Business Briefs was published, the State Compensation Insurance Fund announced that it would be boosting its workers’ comp rates effective April 1. The announcement advises that insured employers will be paying, based upon the overall average, about 9% more under the modifications. Some employers however will be hit harder than others as State Fund is boosting tier A and B by 5%, dropping the 6% group discounts and increasing territorial surcharges in southern California 6.5% for Los Angeles and 4.8 for the rest of the area.

That means that effectively, a tier A or B account which is currently in a group and located in Los Angeles could see an increase of 17.5% [6% for the group, 6.5% LA territory, and 5% for the tier]. Accounts in Los Angeles not in a group will see increases of 11.5%.

State Fund, California’s market of last resort, is also increasing its requirements for schedule credits and debits to $25,000 and increasing minimum premiums by 25%.

Reactions from the brokerage community have been very strong, objecting to the increasing burden and negative factors affecting workers’ comp brokers as well as their business clients.

How will it affect your business, if you are a State Fund client? Well, if you don’t have too many employees relative to your size (as measured by annual revenues), it may not be a major cost factor for you. But for most State Fund clients, it appears as though there may be a major increase soon.

Since the new rates will not go into effect for a few months, now is the time to call your insurance broker for expert guidance in determining the impact on your business, and whether there are any reasonable actions you might be able to take to minimize the cost increase impact on your bottom line.

Sexual Harassment: A Potential Hidden Exposure

March 5, 2015 By Israel Samuels LLP Leave a Comment

An interesting case was decided earlier this month when a California Appellate Court overturned a trial court and ruled that an employer cannot be liable for failing to take reasonable steps to prevent sexual harassment in the workplace if there was in fact no sexual harassment.

Let’s look at the applicable Law. Government Code §12940 says that it is an unlawful employment practice for an employer to fail to take “all reasonable steps” necessary to prevent discrimination and harassment from occurring.

The jury found the employer “not guilty” for sexual harassment, and that should have been the end of it.

But the employee’s attorneys had also included another accusation in its complaint, namely, that the employer had also failed to take reasonable steps to prevent the sexual harassment from happening. The jury agreed with that proposition.

Astounding, in our view. And the Appellate Court agreed, overturning this ruling. When failing to take preventative action is itself a legal violation, but what was to be prevented does not occur in any case, the employer cannot be held liable for “failing to take preventative action.”