Thursday, June 9, 2011

Martinez v. Combs and the Expanded Definition of “Employer”

The California Supreme Court has recently expanded the definition of “employer” and what it means to “employ” for the purposes of Labor Code wage and hour violations. In the case of Martinez v. Combs, plaintiffs were seasonal agricultural workers who were seeking to recover unpaid minimum wages. They were employed by Munoz & Sons (“Munoz”) which operated large strawberry farms along the California Central Coast. Munoz had distribution agreements with two produce merchants, Apio, Inc. (“Apio”) and Combs Distribution Co. (“Combs”).When poor market conditions caused a severe drop in strawberry prices, Munoz was unable to pay plaintiffs, which led to litigation. Initially a defendant in the suit, Munoz declared bankruptcy. The case, thereafter, focused on whether, Apio and Combs can be held liable as employers under the Labor Code.

As part of regular business operations, Apio and Combs routinely sent representatives out into the fields to ensure that the workers were picking and packing the strawberries properly, inspect the quality, speak with the foremen, etc. They, however, did not have any supervisory authority, nor did they have any hiring or termination powers. Despite this very limited level of interaction, plaintiffs argued that Apio and Combs should be liable for unpaid minimum wages as employers.

To decide the issue of what it means to be an “employer” and to “employ”, the Court first went through a painstakingly detailed discussion of the history of the Industrial Welfare Commission (“IWC”) and its Wage Orders. Established in the early 20th century, IWC sought to curtail the exploitation of children and women in the workplace. As such, it was authorized by the legislature to define the terms as necessary in order to achieve its goals. IWC used a very broad definition in order to prevent those utilizing child and/or woman labor from avoiding liability by not being “employers” in the technical sense.

The IWC’s definition and one adopted by the Court in this case is: To “employ” means to (a) to exercise control over the wages, hours or working conditions, or (b) to suffer or permit to work, or (c) to engage, thereby creating a common law employment relationship. The “to suffer or permit to work” language in the definition is very broad and can create liability even where a typical employer/employee relationship is not present. According to the Court, the historical meaning of the phrase is just as applicable today: “A proprietor who knows that persons are working in his or her business without having been formally hired, or while being paid less than the minimum wage, clearly suffers or permits that work by failing to prevent it, while having the power to do so.”

In this case, however, the Court found that Apio and Combs were not liable as employers as they did not suffer or permit plaintiffs to work. The representatives that they sent out into the fields were not viewed as supervisors and they did not exercise any control over plaintiffs. They were there simply to make sure that the product they were paying for was satisfactory. The Court found that Apio, Combs and Munoz had a typical “chain of distribution” relationship and imposing employer liability on Apio and Combs would potentially expose others along the chain (i.e. supermarkets, other buyers of produce) to liability. In other words, merely doing business with a company which violates the Labor Code is not enough for employer liability even under the broadest of definitions.

While Apio and Combs avoided liability in this case, the Court’s adoption of IWC’s broad definition of what it means to “employ” means that companies utilizing the services of independent contractors, temporary staffing agencies, etc. should take extra precautions if they wish to avoid lawsuits for Labor Code violations. For instance, if a company contracts with a temporary staffing agency to provide workers and the agency fails to pay the workers minimum wage, the company may be liable under this broad definition. Thus, contracts should be drafted with clear and unambiguous language as to which party has the ability to control, hire, pay, terminate, etc. Even then, turning a blind eye toward obvious Labor Code violations during business operations may very well prove a costly mistake.

Written by: Vadim Yeremenko

Thursday, October 7, 2010

How Hostile Does It Have to Be?

Racist comments or ethnic slurs at work can amount to a “hostile work environment” depending on the number of incidents and the working relationship between the speaker and receiver of the discriminatory comments.

In a 2003 California case, Dee v. Vintage Petroleum, Glenda Dee brought an employment discrimination action against her employer under FEHA, the Fair Employment Housing Act. She claimed that her supervisor, Paul Strickland, asked her to lie about company business and secretly take documents from another supervisor’s desk. Additionally, she claimed he insulted her, used profanity, and made a negative comment about her race, saying, “it’s your Filipino understanding versus mine” when she told him it made her uncomfortable that he asked her to lie to other supervisors. (Dee v. Vintage Petroleum, Inc. (2003) 106 Cal.App.4th 30). Because of Strickland’s actions and comments, Dee left work. She said that the hostile work environment created a disability for her under FEHA (post traumatic stress disorder), and that she would return to work if Vintage Petroleum promised to limit her contact with Strickland. They denied her this request and fired her instead. The Court stated that based on these facts, Dee could take this case to trial and let a jury decide whether the situation amounted to a “hostile work environment,” thereby reversing a lower court’s ruling of summary judgment for the defendant, Vintage Petroleum. As for her claim under FEHA, however, the Court decided that she did not have a valid disability claim.

Although “there is neither a threshold or a ‘magic number’ of harassing incidents that gives rise to liability nor a number of incidents below which a P fails as a matter of law to state a claim,” courts often find that a single offensive act is not enough to create a hostile work environment. (Rodgers v. Western-Southern Life Ins. Co. (7th Cir. 1993) 12 F.3d 688, 674). Some jurisdictions will consider a single racial slur to create a hostile work environment, however, so long as it was by a supervisor. In 1998, the New Jersey Supreme Court opined that where a supervisor makes a single racial slur, that exacerbates the severity of the remark. (Taylor v. Metzger (1998) A.2d 685, 694). In this case, the fact that Dee was harassed by her supervisor was a vital factor in the Court’s decision. Supervisors have an ability to intimidate and control employees in a way that equal-level coworkers do not. Strickland not only degraded and insulted Dee on several occasions, he also said he would “drag her down” if she told on him, making his power over her very apparent. Strickland’s racial slur followed Dee’s complaint that he told her to lie. A reasonable inference is that Strickland wished to intimidate her so that she would not complain to higher management about his conduct.

Monday, June 9, 2008

Harassing Behavior

The following is a list of some sexual harassing behaviors defined by California statutory law:

1. Sexual favors -- unwanted sexual advances or propositions
2. Verbal conduct -- epithets, slurs or derogatory comments, including comments about a person's body, appearance, or sexual activity
3. Physical conduct -- assault, impeding or blocking movement, or any physical interference with normal work or movement
4. Visual harassment -- leering looks, offensive gestures, or derogatory posters, cartoons, or drawings

*Also includes harassment based on gender, pregnancy, childbirth, or related medical conditions

Thursday, April 10, 2008

Indirect Sexual Harassment

An employee may have a claim for sexual harassment even when sexually harassing conduct permeates the work environment of the employee, even if such conduct is not directed at the employee if: (1) it occurs in the employee's presence; or, (2) is directed at the employee but does not occur in his/her presence. (See e.g., Beyda v. City of Los Angeles (1998) 65 Cal.App.4th 511, 518; Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 611; Kortan v. State of California (Central Dist. Cal 1998) 5 F.Supp.2d 843, 850.)

Thursday, March 6, 2008

Some Recent Changes in Misc California Law.

1. Employers with 25 of more employees must give "qualified employees" as many as 10days off (unpaid) when their spouse is on leave from military deployment. Effective October 9, 2007.

2. The California minimum wage increased from $7.50 to $8. Effective January 1, 2008.

3. California drivers cannot use cell phones while driving a motor vehicle unless the driver is using a hands-free device. Effective July 1, 2008.

Sunday, September 30, 2007

Severe and Pervasive Harassment

What constitutes severe or pervasive harassment that alters working conditions and creates an abusive workplace environment? In California a victim of such harassment must satisfy both an objective and a subjective standard. (See, e.g. Harris v. Forklift Sys. (1993) 510 US 17, 126; Beyda v. City of Los Angeles (1998) 65 Cal.App.4th 511, 518; Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 609.)

Objective Standard: Under the objective standard, the victim must prove that a reasonable person in the victim's position would have considered the conduct severe or pervasive. For example, if the victim of the harassment is a woman, a reasonable woman standard is used, whereas, if the victim is a man, a reasonable man standard is employed. Race, sexual orientation, age, and physical and/or mental disability of the victim may also be considered. (See, e.g., Kelly-Zurian v. Wohl Shoe Co. (1994) 22 Cal.App.4th 397.)

Subjective Standard: For the subjective standard, the victim must show that he/she actually felt that the harassment was sufficiently severe or pervasive as to interfere with the work environment.

Totality of the Circumstances: The totality of the circumstances must be considered by the finder of fact (i.e., usually the jury) in determining whether the conduct was severe and pervasive enough to constitute hostile environment harassment. (See, Miller v Department of Corrections (2005) 36 Cal.4th 446, 462; Accardi v Superior Court (1993) 17 Cal.App.4th 341.) Among other things, these considerations may include: (1) frequency of the conduct; (2) severity of the conduct; (3) whether the conduct was physically threatening or humiliating or was merely an offensive utterance; and, (4) whether the conduct unreasonably interfered with the victim's work performance, although the victim is not required to prove that he/she could not perform their job. (Herberg v California Institute of the Arts (2002) 101 Cal.App.4th 142; Etter v Veriflo Corp. (1998) 67 Cal.App.4th 457, 466; Beyda v City of Los Angeles (1998) 65 Cal.App.4th 511, 517.)

Friday, August 3, 2007

Free PDF Converter

In the last blog posting discussing preservation of evidence we discovered File123.com. Another useful use for file123.com which is also a good way to protect documents, contract/agreement versions, and so forth is the free PDF conversion feature. Simply upload a file into File123 such as a contract, a spreadsheet, or a presentation. Once it's uploaded click on the file link and it will open in a PDF viewer within File123. From the viewer click on the save disk icon on the upper left of the viewer and your file can be saved as a PDF.