Bryan Schwartz Law submitted the following amicus letter to the California Supreme Court, on behalf of the California Employment Lawyers Association, asking the Court to grant review in a case of statewide significance to service employees, called Chau v. Starbucks. The case involves whether employers can steal tips, left by customers in tip boxes or tip cups at the register, to allocate a portion of them toward subsidizing otherwise subpar wages of supervisors. Before the Chau decision by the Court of Appeal, it was clear, from the California Labor Code and Courts of Appeal interpreting it, that employers could not pool tips between the employer's agents (aka supervisors) and non-agents (aka, in this case, baristas).
In case you're wondering, "How much do those little tips in the tip box/cup mean, anyhow?" --After a full trial on the merits, the lower court in Chau awarded the Starbucks baristas $86 million in restitution, plus interest and attorneys' fees. Hopefully, the Supreme Court will fix the injustice created by the Chau Court of Appeal and reinstate the employees' restitution.
--
The Honorable Ronald M. George, Chief Justice
and Associate Justices
California Supreme Court
350 McAllister Street
San Francisco, CA 94102
Re: Amicus Curiae Letter (Rule 8.500(g)); Supreme Court Case No. S174601
Chau, et al. v. Starbucks Corporation (June 2, 2009) 174 Cal.App.4th 688, 94
Cal.Rptr.3d 593, Fourth Appellate District, Division One, Case No. D053491,
Reversing San Diego Sup. Ct. Case No. GIC836925
Dear Chief Justice and Associate Justices:
This is a letter under Rule 8.500(g) in support of the petition for review by the Plaintiffs in Supreme Court Case No. S174601, Chau, et al. v. Starbucks Corporation (July 2, 2009) 174 Cal.App.4th 688, 94 Cal.Rptr.3d 593, Fourth Appellate District, Division One, Case No. D053491 (hereafter, Chau). This letter, on behalf of the California Employment Lawyers Association (CELA), supports the Plaintiffs’ request for review, to have this Court clearly hold that employers cannot require non-supervisory employees to share tips with supervisory employees who are agents of the employer. The Court of Appeal’s decision in Chau contradicts California Labor Code §§350(a) and (d) and §351, and also contradicts the Court of Appeal decisions in Jameson v. Five Feet Restaurant (2003) 107 Cal.App.4th 138, 131 Cal.Rptr.2d 771, and Leighton v. Old Heidelberg, Ltd. (1990) 219 Cal.App.3d 1062, 268 Cal.Rptr. 647, which construe Labor Code §351 to establish a bright-line rule prohibiting tip-pooling with an employer’s agents. Thus, Chau throws into confusion a previously-settled rule regarding the allowable reaches of a tip pool, potentially affecting the income of millions of California service industry workers.
This Court has never directly addressed the proper scope of tip pooling, even though it has discussed Cal. Lab. Code §351 (see Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 166 Cal.Rptr. 331, and Henning v. Industrial Welfare Com. (1988) 46 Cal.3d 1262, 252 Cal.Rptr. 278), in the context of applying tip credits against the minimum wage. Currently, the Court has before it two cases regarding whether §351 permits a private right of action.[1] Supreme Court review in the instant case would complement the latter.
California Courts of Appeal have long followed Leighton, 219 Cal.App.3d 1062 (decided closely on the heels of Henning), which ruled that employer-mandated tip pooling between servers and bussers at a restaurant is permitted under §351. Under §351, however, tip income left by patrons in a tip container for all servers may not be used by an employer to subsidize the wages of its agents, whether those agents also provide customer service or not. See generally Etheridge v. Reins Intern. California, Inc. (2009) 172 Cal.App.4th 908, 91 Cal.Rptr.3d 816.
I. Interest of Amicus
CELA is a statewide non-profit organization dedicated to protecting workers’ rights. CELA’s member attorneys represent employees in all types of employment cases in state and federal courts and before administrative agencies, including employment discrimination, wrongful discharge, wage and hour, and unemployment insurance matters. In each of these substantive areas of law, CELA’s members and their clients challenge employers who fail to adhere to California and federal employment laws. CELA frequently appears as amicus curiae in matters before this Court, including, e.g., recent appearances in Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 56 Cal.Rptr.3d 880, Gentry v. Superior Court (2007) 42 Cal.4th 443, 64 Cal.Rptr.3d 773, and Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 81 Cal.Rptr.3d 282.
CELA’s members have an abiding interest in the scope of permissible tip pools, directly at issue in this case. In particular, CELA seeks to ensure that the concept of tip pooling is not abused so as to undermine non-agents’ gratuities, guaranteed to be separate from agents’ compensation by Labor Code §§351 and 350(d), and that the State’s wage and hour laws are “liberally construed with an eye to promoting [worker] protection,” as this Court required in Henning, 42 Cal.3rd at 1269 (citing Industrial Welfare Com’n, 27 Cal.3d at 700-703). CELA maintains that this Court should not permit an interpretation, like that applied in Chau, which results or could result in tips which should be received by millions of California non-supervisory workers being misappropriated to defray employers’ payroll costs with respect to their agents.
II. Review is Warranted
A. The Court Should Resolve Chau’s Split With Jameson, Which Held that Employers May Not Pool Tips Between Agents and Non-Agents.
In Jameson, 107 Cal.App.4th 138 at 141, the Court of Appeal concluded that a tip pool benefitting "floor managers" was illegal because floor managers had sufficient supervisory duties to be considered the employer's agents rather than employees. See also Etheridge, 172 Cal.App.4th at 921 n.17 (citing Jameson). Here as in Jameson, substantial evidence supports the trial court’s conclusion after a full trial on the merits that Starbucks’ shift supervisors are “agents,” with whom, according to statute, non-agents like Plaintiffs may not be forced to share tips. See Petition for Review at pp. 16-18.
Supreme Court review is appropriate because the Court of Appeal’s application of the law permits what Jameson expressly forbids – tip pooling with supervisory employees who happen also to perform customer service functions. Jameson, 107 Cal.App.4th at 144-145.[2] In Chau, the Court of Appeal repeatedly emphasizes that the shift supervisors, whom the trial court found to be agents – a conclusion which the Court of Appeal did not dispute[3] –should be able to take a portion of the tips from Starbucks’ tip boxes because of the supervisors’ customer service responsibilities.[4]
The Chau court’s attempt to avoid an overt split with Jameson by inventing a new term for Starbucks’ practice – “tip apportionment,” as opposed to “tip pooling” – is at best flimsy, at worst disingenuous. The crux of the Court of Appeal’s distinction is that at Starbucks, the tips are left in a box at the register, rather than on a table or with a server. Chau, 174 Cal.App.4th at 700 (“[T]he legal principles prohibiting an employer from requiring an employee to share his or her personal tip with the employer's agent (‘mandatory tip pooling’) do not logically apply to an employer policy requiring equitable apportionment of the proceeds in a collective tip box (‘tip apportionment’).”). In Jameson, where the employer was taking a portion of the tips left on the table and giving it to its agents, it was apportioning tips in a prohibited manner (one might call it, “tip apportionment”). The essence of Jameson is precisely the opposite of what Chau holds – that an agent, though he or she may do some customer service duties, cannot share in the tips to be distributed to non-agents. Any factual distinction between the cases is immaterial, since in both cases the employer decided who may share customers’ tips and in neither case was the customers’ tipping intent manifest.
The real reason the Court of Appeal splits with Jameson may have more to do with the magnitude of Starbucks’ violation and the considerable restitutionary verdict after trial. Chau, 174 Cal.App.4th at 701, 706 (emphasizing Jameson’s $1,075 verdict and Chau’s $86 million result). But California law should not require restitution in small, individual cases of tip theft, but not when statewide, multi-million dollar violations are established. On the contrary, California’s interest in worker protection (see, e.g., Henning, 42 Cal.3rd at 1269) should be, if anything, more heightened in a case, like Chau, with a statewide impact, involving over 120,000 employees.
The Supreme Court should grant review to resolve Chau’s apparent split with Jameson, and should conclude that Jameson was right that, under Labor Code §351, employers may not pool or “apportion” pooled tips between non-agents and agents.
B. The Supreme Court Should Reject the Court of Appeal’s Presumption of Customers’ Intent in Chau.
Repeatedly, the Court of Appeal emphasizes its presumption that Starbucks's customers intended that their tips be shared among baristas and shift supervisors.[5] However, the Court of Appeal in Leighton, 219 Cal.App.3d 1062, 1069, long ago, properly rejected attempts by courts to presume the intentions of tipping customers where, as here, their intention was not explicit, i.e., where a customer left a tip on a table or in a cup or box. As the Leighton court explained, “[M]uch is made of for whom the gratuity is left, the intention of the patron in leaving it, and the lack of evidence offered by [the employer] in this connection. We dare say that the average diner has little or no idea and does not really care who benefits from the gratuity he leaves, as long as the employer does not pocket it, because he rewards for good service no matter which one of the employees directly servicing the table renders it.” (emph. added) Id. The Leighton court continued to describe the “near impossibility of being able to determine the intent of departed diners in leaving a tip.” Id. Under Leighton, the only bright-line rule as regards tip pooling (or tip apportionment) is that agents of the employer must be excluded.
Until Chau, the Leighton decision’s discussion of the perils of attempting to infer customer intent where tips are left collectively has been followed by every California Court of Appeal to rule in a tip pooling case. See, e.g., Etheridge, 172 Cal.App.4th at 921-922; Budrow v. Dave & Buster's of California, Inc. (2009) 171 Cal.App.4th 875, 880 n.4, 90 Cal.Rptr.3d 239. See also Jameson, 107 Cal.App.4th at 144-145 (same holding). See also depublished cases currently being reviewed by this Court on other grounds, Grodensky, 91 Cal.Rptr.3d at 755, 767-769; Lu, 88 Cal.Rptr.3d at 358.[6] This Court should restore the status quo ante by granting review and overturning Chau, which improperly relied on the appellate court’s interpretations of what it believed Starbucks’s customers’ intention must have been in leaving tips in a box at the register. Chau, 174 Cal.App.4th at 704 (“It is undisputed (and certainly the only reasonable conclusion) that by placing a tip in a collective tip box, the customer understands that this gratuity will be shared by all the service employees-baristas and shift supervisors.”). There was no substantial evidence in the record establishing whether Starbucks’ customers had the intention to tip agents of the employer. See Chau, 174 Cal.App.4th at 706 (citing plaintiffs’ petition for rehearing, stating, “They assert that customer intent was not an issue at trial, and note that neither party presented any testimony from a customer as to the customer's subjective intent in placing a tip in a collective tip box or how the customer intended to allocate a tip for more than one employee.”). As discussed above, even if customers did have an intention to tip agents, applying Labor Code §351 and 350(d), and affirming Jameson, Leighton, and the decisions following them, the Supreme Court should establish unequivocally that the employer was not permitted to pool or apportion or share tips between agents and non-agents.
C. Public Policy Dictates that Employers Should Not Be Permitted to Allocate Pooled Tips Between Agents and Non-Agents.
By blurring the bright-line rule that employers cannot pool, apportion, or share tips between agents and non-agents, and by rejecting the general prescription against inferring customers’ intentions regarding tips, the Court of Appeal in Chau has effectively rendered Labor Code §§350(d) and 351 meaningless and weakened the well-established precedents of Jameson and Leighton. Applying Chau, an employer can now easily force tip sharing between agents and non-agents with impunity, simply by ensuring that tips are placed in a box or cup and “apportioning” them to supplement service-providing supervisors’ wages. As this Court has repeatedly emphasized, California’s employees are entitled to greater protection than this.
The Court of Appeal did not dispute that substantial evidence supported the trial court’s findings that shift supervisors are agents, and plaintiffs’ Petition for Review cites a host of activities performed by supervisors which give them control or direction or supervision over the non-agent baristas, such as opening and closing stores, monitoring time cards, controlling cash, etc. Petition for Review at p. 17 n. 10. It does not require a leap of imagination to realize that shift supervisors can use this control, direction, and supervisory authority to skew the proportion of the tips that they receive, by, among other things, ensuring that they receive more work hours that count toward their allocation of the tips. The Labor Code expressly seeks to avoid this conflict by precluding tip sharing among the employer’s agents and non-agents, and Chau should not be permitted to undermine this clear rule.
In Henning and Industrial Welfare Commission, this Court explained that tips should not be used by employers to avoid paying market wages to non-tipped employees. See also Etheridge, 172 Cal.App.4th 908, discussing Henning and Industrial Welfare Commission (“Even though an employer can no longer use tip sharing to subsidize minimum wages of non-tipped employees, it is possible that an employer could use tip sharing to subsidize market wages of non-tipped employees, resulting in the same evil. Thus, when considering tip pooling, it is important to make certain that the employer is not using the tip pool as a de facto tip credit against market wages.”). Plaintiffs’ and CELA’s interest, and that supported by California’s public policy, is not to reduce the actual wages of shift supervisors – far from it – but rather, to make sure that Starbucks, and not its front-line baristas, bears the burden of paying shift supervisors the competitive wages they deserve.
III. Conclusion
For the foregoing reasons, CELA requests that this Court grant the Plaintiffs’ petition for review.
Thank you for your consideration.
CALIFORNIA EMPLOYMENT LAWYERS’ ASSOCIATION
BRYAN SCHWARTZ LAW
___________________________
Bryan J. Schwartz
180 Grand Avenue, Suite 1550
Oakland, CA 94612
Tel. 510-444-9300
Fax 510-444-9301
Email: Bryan@BryanSchwartzLaw.com
Website: http://www.bryanschwartzlaw.com/
[1] S172237 (Grodensky v. Artichoke Joe's Casino (2009) 91 Cal.Rptr.3d 732, 755, 767-769); S171442 (Lu v. Hawaiian Gardens Casino, Inc. (2009) 88 Cal.Rptr.3d 345, 358).
[2] The Jameson Court of Appeal explained: “Five Feet [the employer] argues that although the floor managers are involved in hiring, discharging, and supervising employees, they also serve patrons and thereby earn a share of the tips. Five Feet contends, therefore, the floor managers do not fall within the definition of agent in section 350. But the definition of agent under section 350 does not include a requirement that an agent's duties exclusively consist of hiring, discharging, or supervising employees. Section 350 does not even require that an agent spend the majority of his or her time performing such functions. Therefore, it is irrelevant that the floor managers at Five Feet perform other duties in addition to the functions described in section 350, subdivision (d)…. Under section 351, tip pooling is only permitted among employees who are neither employers nor agents under section 350.” Id.
[3] The Court of Appeal expressly did not decide this issue, ruling instead as a matter of law that supervisors can share in tips left collectively for customer service employees.
[4] See, e.g., Chau, 174 Cal.App.4th at 703 (“Starbucks's policy ensures that if a customer places money in a collective tip box with the intention that it be shared among baristas and shift supervisors, each employee will retain his or her fair share of the tip proceeds.”), 705 (“the vast majority of the time shift supervisors and baristas perform the same jobs….”).
[5] See, e.g., Chau, 174 Cal.App.4th at 703 (“In this way, Starbucks effectuates the customer's intent and does not permit the misappropriation of gratuities intended for a certain employee or employees.”), 704 (“[B]y placing a tip in a collective tip box, the customer understands that this gratuity will be shared by all the service employees—baristas and shift supervisors.”), 706 (“the testimony by baristas and shift supervisors was undisputed that customers leave tips in the collective tip boxes for the service team, which includes both shift supervisors and baristas”).
[6] CELA’s position is that several of these cases go too far in ignoring customers’ intent, even where it is manifest, e.g., where tips are given directly to casino dealers but taken by the employer to share with other non-agents. However, Chau’s position – inferring customers’ intent to share tips with the employer’s agents – is simply unprecedented.
Friday, August 14, 2009
Friday, July 10, 2009
9th Circuit Court of Appeals Gets it Wrong: Wage-Hour Class Actions Endangered Species in Federal Court
This week, the Ninth Circuit Court of Appeals, one of the highest courts in the nation and generally considered one of the fairer United States Circuit Courts for employees, issued two momentous decisions which will drastically curtail employees' ability to certify wage/hour class actions in Federal court. These decisions were wrongly decided by three Ninth Circuit judges, but I hope the plaintiffs will seek en banc review from the entire Circuit. Otherwise, I fear, these precedents will become routine fodder for defendants opposing and courts denying class certification.
In Mevorah v. Wells Fargo Home Mortgage, No. 08-15355 (9th Circuit July 7, 2009), and Vinole v. Countrywide Home Loans, No. 08-55223 (9th Circuit July 7, 2009), the defendants had uniformly classified all of their loan officers as exempt from being paid overtime, saying they were all outside salespeople. Plaintiffs argued that, in fact, these loan officers were inside salespeople, who spent the majority of their time working from their desks at home or at defendants' facilities. The truth is, in today's workplace, there are few, true "outside salespeople," like the door-to-door vacuum or encyclopedia salesperson of old, whose office was his or her car and who worked wherever and whenever he or she pleased. Certainly, these mortgage loan officers were not of that ilk - the vast majority of their sales are typically completed on the phone and on the computer. The Northern District of California (Judge Patel) rightly concluded that it was "manifestly disingenuous for a company to treat a class of employees as a homogenous group for the purposes of internal policies and compensation, and then assert that the same group is too diverse for class treatment in overtime litigation." The Southern District of California (Judge Sabraw) concluded, on the contrary, that “no common scheme or policy that would diminish the need for individual inquiry.”
The corporations were able to scare the Circuit into siding with the Southern District decision, with the prospect of "several hundred mini-trials" for class members to determine whether each was properly classified as exempt from overtime. Defendants' reasoning was that individual issues would predominate, and hence, class certification was inappropriate, because the fact-finder would have to consider each class member separately to determine how many hours he/she spent at a desk and how many hours he/she spent doing outside sales. In the interest of justice and of vindicating the remedial purpose of the wage laws, the Circuit Court should have followed the model of the California Supreme Court on the same question.
In Ramirez v. Yosemite Water Co., Inc., 20 Cal. 4th 785, 802 (1999), California's Supreme Court noted the importance of considering "first and foremost, how the employee actually spends his or her time" in determining whether an employee is an outside salesperson. Though employers seized upon this language to say that no class could be certified because of the need for hundreds of mini-trials, i.e, that common issues would not predominate and that class certification was not the superior method for handling such wage claims, the California Supreme Court followed up Ramirez with Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319, 335-336 (2004). There, California's Supreme Court explained, "Defendant mistakenly suggests that our decision in Ramirez, supra, 20 Cal.4th 785…, bars class certification in this matter…. Ramirez is no authority for constraining trial courts' ‘great discretion in granting or denying certification.’” Id. The Sav-On court observed that defendants wanted courts to extend Ramirez to shield employers from an action challenging a type of illegality that Ramirez was actually designed to prevent. Sav-On, 34 Cal.4th at 337. Unfortunately, the Ninth Circuit has now accepted the employers' invitation.
The Sav-On decision explained that “the need for individualized proof of damages is not per se an obstacle to class treatment,” and held that, “neither variation in the mix of actual work activities undertaken during the class period by individual [putative class members], nor differences in the total unpaid overtime compensation owed each class member, bars class certification as a matter of law.” Id. at 334-335. The Supreme Court explained, “Contrary to defendant's implication, our observation in Ramirez that whether the employee is an outside salesperson depends ‘first and foremost, [on] how the employee actually spends his or her time’ (Ramirez, supra, at p. 802…) did not create or imply a requirement that courts assess an employer's affirmative exemption defense against every class member's claim before certifying an overtime class action.” Sav-On, 34 Cal.4th at 337.
The Ninth Circuit should have decided - and should still decide, after a re-hearing en banc - that issues regarding defendants' policies and practices and operational standardization are likely to predominate in a class proceeding over any individualized calculations of actual overtime hours that might ultimately prove necessary. Id. at 331.
The Sav-On court ultimately upheld the trial court, which held, like in the Mevorah v. Wells Fargo case, that certification was warranted because “defendant classified its [putative class members] ‘exempt without any exception, and rel[ied] exclusively on these titles alone in redefining who is exempt and who is not exempt. The predominance of the defendant's class-wide exemption is evidenced by the fact that there is no compliance program that's ever existed, and no single class member has ever received overtime compensation. The class-wide policy does not vary from store to store, or employee to employee.’” Sav-On, 34 Cal.4th at 332.
As in Sav-On, the Ninth Circuit should also have considered that decisions whether certain tasks performed universally by class members - and whether those are really outside sales activities, or whether, in the Sav-On context, the tasks are managerial or non-managerial for the purpose of applying the executive exemption - lend themselves to class treatment. Id. at 330-331. In the loan officer context, if promotional activities at trade shows, at realtor open houses, and networking at organizational meetings are determined to be outside sales activities, rather than activities generally directed toward marketing the company, then this would impact all class members' classification. As in Sav-On, regardless of who is correct, the issues which must be determined for liability (irrespective of individual differences in damages) “comprise a reasonably definite and finite list.” Id. at pp. 330-331.
In Sav-On, 34 Cal.4th at 331, 337 – as in Ramirez, 20 Cal.4th at 802 – at issue was, in part, the employer’s communicated expectations of their employees as a whole. Plaintiffs in outside sales exemption cases should be able to argue – applicable to the entire class – that, because defendants have communicated to the employees no finite expectations regarding outside sales activities, and the actual requirements of the job can and are generally accomplished from behind a desk in a company facility or the employees' homes, their classification as exempt outside salespeople is improper as a matter of law.
The Ninth Circuit's decisions of July 7, 2009 are disturbing, too, because they are dismissive of the ability to use pattern and practice evidence, statistical evidence, sampling evidence, expert testimony, and other indicators of a defendant's centralized practices, which Sav-On and many federal courts have embraced. Without allowing plaintiff classes to rely upon such evidence to prove class liability, the net result will be a massive windfall for employers cheating their employees of wages. Only those few who personally step forward to seek relief of even small wage claims, and risk retaliation and blackballing in the industry, and who have the wherewithal to endure lengthy litigation, will find any relief under federal and state wage laws.
On the contrary - as the California Supreme Court has recognized, and as the entire Ninth Circuit should recognize, the wage protections are intended to be broadly enforced, which can only be accomplished by class litigation.
In Mevorah v. Wells Fargo Home Mortgage, No. 08-15355 (9th Circuit July 7, 2009), and Vinole v. Countrywide Home Loans, No. 08-55223 (9th Circuit July 7, 2009), the defendants had uniformly classified all of their loan officers as exempt from being paid overtime, saying they were all outside salespeople. Plaintiffs argued that, in fact, these loan officers were inside salespeople, who spent the majority of their time working from their desks at home or at defendants' facilities. The truth is, in today's workplace, there are few, true "outside salespeople," like the door-to-door vacuum or encyclopedia salesperson of old, whose office was his or her car and who worked wherever and whenever he or she pleased. Certainly, these mortgage loan officers were not of that ilk - the vast majority of their sales are typically completed on the phone and on the computer. The Northern District of California (Judge Patel) rightly concluded that it was "manifestly disingenuous for a company to treat a class of employees as a homogenous group for the purposes of internal policies and compensation, and then assert that the same group is too diverse for class treatment in overtime litigation." The Southern District of California (Judge Sabraw) concluded, on the contrary, that “no common scheme or policy that would diminish the need for individual inquiry.”
The corporations were able to scare the Circuit into siding with the Southern District decision, with the prospect of "several hundred mini-trials" for class members to determine whether each was properly classified as exempt from overtime. Defendants' reasoning was that individual issues would predominate, and hence, class certification was inappropriate, because the fact-finder would have to consider each class member separately to determine how many hours he/she spent at a desk and how many hours he/she spent doing outside sales. In the interest of justice and of vindicating the remedial purpose of the wage laws, the Circuit Court should have followed the model of the California Supreme Court on the same question.
In Ramirez v. Yosemite Water Co., Inc., 20 Cal. 4th 785, 802 (1999), California's Supreme Court noted the importance of considering "first and foremost, how the employee actually spends his or her time" in determining whether an employee is an outside salesperson. Though employers seized upon this language to say that no class could be certified because of the need for hundreds of mini-trials, i.e, that common issues would not predominate and that class certification was not the superior method for handling such wage claims, the California Supreme Court followed up Ramirez with Sav-On Drug Stores, Inc. v. Superior Court, 34 Cal.4th 319, 335-336 (2004). There, California's Supreme Court explained, "Defendant mistakenly suggests that our decision in Ramirez, supra, 20 Cal.4th 785…, bars class certification in this matter…. Ramirez is no authority for constraining trial courts' ‘great discretion in granting or denying certification.’” Id. The Sav-On court observed that defendants wanted courts to extend Ramirez to shield employers from an action challenging a type of illegality that Ramirez was actually designed to prevent. Sav-On, 34 Cal.4th at 337. Unfortunately, the Ninth Circuit has now accepted the employers' invitation.
The Sav-On decision explained that “the need for individualized proof of damages is not per se an obstacle to class treatment,” and held that, “neither variation in the mix of actual work activities undertaken during the class period by individual [putative class members], nor differences in the total unpaid overtime compensation owed each class member, bars class certification as a matter of law.” Id. at 334-335. The Supreme Court explained, “Contrary to defendant's implication, our observation in Ramirez that whether the employee is an outside salesperson depends ‘first and foremost, [on] how the employee actually spends his or her time’ (Ramirez, supra, at p. 802…) did not create or imply a requirement that courts assess an employer's affirmative exemption defense against every class member's claim before certifying an overtime class action.” Sav-On, 34 Cal.4th at 337.
The Ninth Circuit should have decided - and should still decide, after a re-hearing en banc - that issues regarding defendants' policies and practices and operational standardization are likely to predominate in a class proceeding over any individualized calculations of actual overtime hours that might ultimately prove necessary. Id. at 331.
The Sav-On court ultimately upheld the trial court, which held, like in the Mevorah v. Wells Fargo case, that certification was warranted because “defendant classified its [putative class members] ‘exempt without any exception, and rel[ied] exclusively on these titles alone in redefining who is exempt and who is not exempt. The predominance of the defendant's class-wide exemption is evidenced by the fact that there is no compliance program that's ever existed, and no single class member has ever received overtime compensation. The class-wide policy does not vary from store to store, or employee to employee.’” Sav-On, 34 Cal.4th at 332.
As in Sav-On, the Ninth Circuit should also have considered that decisions whether certain tasks performed universally by class members - and whether those are really outside sales activities, or whether, in the Sav-On context, the tasks are managerial or non-managerial for the purpose of applying the executive exemption - lend themselves to class treatment. Id. at 330-331. In the loan officer context, if promotional activities at trade shows, at realtor open houses, and networking at organizational meetings are determined to be outside sales activities, rather than activities generally directed toward marketing the company, then this would impact all class members' classification. As in Sav-On, regardless of who is correct, the issues which must be determined for liability (irrespective of individual differences in damages) “comprise a reasonably definite and finite list.” Id. at pp. 330-331.
In Sav-On, 34 Cal.4th at 331, 337 – as in Ramirez, 20 Cal.4th at 802 – at issue was, in part, the employer’s communicated expectations of their employees as a whole. Plaintiffs in outside sales exemption cases should be able to argue – applicable to the entire class – that, because defendants have communicated to the employees no finite expectations regarding outside sales activities, and the actual requirements of the job can and are generally accomplished from behind a desk in a company facility or the employees' homes, their classification as exempt outside salespeople is improper as a matter of law.
The Ninth Circuit's decisions of July 7, 2009 are disturbing, too, because they are dismissive of the ability to use pattern and practice evidence, statistical evidence, sampling evidence, expert testimony, and other indicators of a defendant's centralized practices, which Sav-On and many federal courts have embraced. Without allowing plaintiff classes to rely upon such evidence to prove class liability, the net result will be a massive windfall for employers cheating their employees of wages. Only those few who personally step forward to seek relief of even small wage claims, and risk retaliation and blackballing in the industry, and who have the wherewithal to endure lengthy litigation, will find any relief under federal and state wage laws.
On the contrary - as the California Supreme Court has recognized, and as the entire Ninth Circuit should recognize, the wage protections are intended to be broadly enforced, which can only be accomplished by class litigation.
Monday, June 1, 2009
Civil Rights for Mentally Ill Inmates
Bryan Schwartz wrote the following op-ed piece for the San Francisco Chronicle which appeared in today's newspaper:
How we killed Berkeley's 'Naked Guy'
San Francisco Chronicle
Monday, June 1, 2009
Bryan Schwartz
In her May 24 column, Chronicle columnist Debra J. Saunders called the million-dollar settlement following the death of the "Naked Guy" a "jackpot for mom." Esther Krenn's son, Andrew Martinez, a.k.a. Berkeley's Naked Guy, took his own life in Santa Clara County jail after suffering for years with mental illness. Krenn had settled with the county after filing a wrongful-death suit.
Saunders does not know Krenn, but I do. Krenn, like any loving mother, would trade any amount of money to have her son back.
The primary offense is not Saunders' mean-spirited column: It is the dehumanization of a mother's son. This is what happens when we lock up our mentally ill citizens and throw away the key. In a larger sense, we killed Martinez because we let him, like so many others with mental illness, drift so far from our consciousness.
I knew Martinez for 10 years before he was the Naked Guy - when he was just a top student, football and wrestling star, and a self-assured presence who defied stereotypes. For those of us who were his friends, we knew that the Naked Guy rebellion should have been but the first act of a lifetime of changing the world. We all lost the day that Martinez died.
No one is to blame for mental illness, but we should all think about how we can do a better job helping people with such challenges. How could someone of such indomitable spirit been driven so low that he would take his own life?
It is because Martinez's excruciating insanity was criminalized. He was subjected to solitary confinement instead of being given appropriate care. He should have been in a hospital, not in a jail.
Saunders' column implies that Martinez fought needed treatment - but this mischaracterizes the record. Martinez did not refuse treatment in the days before his suicide. Even if he had, he should not have been able to: He was a known suicide risk under the county's care and authority, and thus legally not in a position to refuse medication.
Martinez's mother tried to get the county to pay attention to her son's deteriorating condition - to no avail. Although Martinez repeatedly expressed suicidal thoughts and once attempted suicide, the county assured Krenn that her son was doing well. Martinez would improve in the hospital but then be returned to jail, where the staff was untrained to deal with his illness. He would again lose competency to stand trial for criminal charges that never should have been brought because it was known he was mentally ill when he assaulted a staff member at a halfway house where he lived.
The state must repair the broken procedures regarding those incompetent to stand trial. By confining Martinez without proper treatment while he was trying to kill himself, the county sealed his fate.
The county will not admit its failings, but it has paid $1 million and agreed to revise its system. As an attorney, I know that a government defendant in civil litigation does not pay $1 million to an individual plaintiff as a "nuisance value" settlement, i.e, to avoid further litigation. The settlement is an acknowledgement of neglect, and of Martinez's wasted potential. Governments, like corporations, sometimes need litigation that impacts the bottom line to jar them from their complacency.
Among other changes to avoid other mothers' sons dying in vain, the notice provision portion of the settlement - ensuring that next of kin be alerted if an inmate attempts suicide - should be a part of California's penal code, not just Santa Clara County's new standards.
The state should also seek to redirect some budgeted prison funding to community-based, alternative placements for mentally ill/incompetent inmates to receive treatment.
Let us hope it does not take another tragedy, and another big settlement, to wake up this bureaucracy.
Bryan Schwartz, a childhood friend of Andrew Martinez, is an Oakland-based civil rights attorney.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/01/EDP717SP0M.DTL
This article appeared on page A - 13 of the San Francisco Chronicle
How we killed Berkeley's 'Naked Guy'
San Francisco Chronicle
Monday, June 1, 2009
Bryan Schwartz
In her May 24 column, Chronicle columnist Debra J. Saunders called the million-dollar settlement following the death of the "Naked Guy" a "jackpot for mom." Esther Krenn's son, Andrew Martinez, a.k.a. Berkeley's Naked Guy, took his own life in Santa Clara County jail after suffering for years with mental illness. Krenn had settled with the county after filing a wrongful-death suit.
Saunders does not know Krenn, but I do. Krenn, like any loving mother, would trade any amount of money to have her son back.
The primary offense is not Saunders' mean-spirited column: It is the dehumanization of a mother's son. This is what happens when we lock up our mentally ill citizens and throw away the key. In a larger sense, we killed Martinez because we let him, like so many others with mental illness, drift so far from our consciousness.
I knew Martinez for 10 years before he was the Naked Guy - when he was just a top student, football and wrestling star, and a self-assured presence who defied stereotypes. For those of us who were his friends, we knew that the Naked Guy rebellion should have been but the first act of a lifetime of changing the world. We all lost the day that Martinez died.
No one is to blame for mental illness, but we should all think about how we can do a better job helping people with such challenges. How could someone of such indomitable spirit been driven so low that he would take his own life?
It is because Martinez's excruciating insanity was criminalized. He was subjected to solitary confinement instead of being given appropriate care. He should have been in a hospital, not in a jail.
Saunders' column implies that Martinez fought needed treatment - but this mischaracterizes the record. Martinez did not refuse treatment in the days before his suicide. Even if he had, he should not have been able to: He was a known suicide risk under the county's care and authority, and thus legally not in a position to refuse medication.
Martinez's mother tried to get the county to pay attention to her son's deteriorating condition - to no avail. Although Martinez repeatedly expressed suicidal thoughts and once attempted suicide, the county assured Krenn that her son was doing well. Martinez would improve in the hospital but then be returned to jail, where the staff was untrained to deal with his illness. He would again lose competency to stand trial for criminal charges that never should have been brought because it was known he was mentally ill when he assaulted a staff member at a halfway house where he lived.
The state must repair the broken procedures regarding those incompetent to stand trial. By confining Martinez without proper treatment while he was trying to kill himself, the county sealed his fate.
The county will not admit its failings, but it has paid $1 million and agreed to revise its system. As an attorney, I know that a government defendant in civil litigation does not pay $1 million to an individual plaintiff as a "nuisance value" settlement, i.e, to avoid further litigation. The settlement is an acknowledgement of neglect, and of Martinez's wasted potential. Governments, like corporations, sometimes need litigation that impacts the bottom line to jar them from their complacency.
Among other changes to avoid other mothers' sons dying in vain, the notice provision portion of the settlement - ensuring that next of kin be alerted if an inmate attempts suicide - should be a part of California's penal code, not just Santa Clara County's new standards.
The state should also seek to redirect some budgeted prison funding to community-based, alternative placements for mentally ill/incompetent inmates to receive treatment.
Let us hope it does not take another tragedy, and another big settlement, to wake up this bureaucracy.
Bryan Schwartz, a childhood friend of Andrew Martinez, is an Oakland-based civil rights attorney.
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/01/EDP717SP0M.DTL
This article appeared on page A - 13 of the San Francisco Chronicle
Thursday, May 21, 2009
The First Amendment Protects Public Employees’ Right to Run for Office – Or At Least, It Should!
Public employees’ constitutional rights are important. Recent figures suggest that sixteen million Americans — more than 10 percent of the nation’s workforce — are employed by a state or local government, with another two million, approximately, employed by the federal government. With the economic downturn, even more workers are moving from the private sector to typically more secure public sector jobs. See, e.g., “Despite Downturn, Federal Workforce Grows; Stimulus Plan Expected to Increase the Ranks at State, Local Levels,” MSNBC News Report, January 31, 2009 (http://www.msnbc.msn.com/id/28952802/). Simply put, public employees are a major and growing part of our workforce. However, public employees’ rights are now vulnerable, after the recent decision in Greenwell v. Parsley, 541 F.3d 401 (6th Cir. 2008).
In Greenwell, a deputy sheriff was fired because he ran for sheriff against the incumbent. The Sixth Circuit in Kentucky held that such a firing does not implicate the First Amendment, relying on an earlier precedent from that court which said that “[t]he First Amendment does not require that an official in [an employer's] situation nourish a viper in the nest.” Id. at 404 (citing Carver v. Dennis, 104 F.3d 847, 850-53 (6th Cir. 1997)). [1] Other circuits disagree, and rightly conclude that a public employee’s candidacy for office should be protected to at least the same degree as a public employee’s political speech. See, e.g., James v. Texas Collin County, 535 F.3d 365 (5th Cir. 2008); Finkelstein v. Bergna, 924 F.2d 1449 (9th Cir. 1991); Flinn v. Gordon, 775 F.2d 1551 (11th Cir. 1985); Washington v. Finlay, 664 F.2d 913 (4th Cir. 1981); Newcomb v. Brennan, 558 F.2d 825 (7th Cir. 1977); and Magill v. Lynch, 560 F.2d 22 (1st Cir. 1977).
The Greenwell plaintiff recently petitioned for the Supreme Court to overturn the 6th Circuit, in light of the 6th Circuit’s clear split with other Circuits on this issue. See Petition for Certiorari, 77 USLW 3619 (Apr 27, 2009) (No. 08-1328). The Supreme Court should grant review (certiorari) because “citizens are not deprived of fundamental rights by virtue of working for the government.” Connick v. Myers, 461 U.S. 138, 147 (1983). Running for office is a fundamental right.
The Supreme Court’s seminal decision in Pickering v. Bd. of Educ., 391 U.S. 563, 573, 88 S.Ct. 1731 (1968), set forth a balancing test for public employees’ First Amendment rights in the workplace. More recently, in 2006, the Supreme Court acknowledged, in Garcetti v. Ceballos, 547 U.S. 410, 126 S.Ct. 1951 (2006), “Many citizens do much of their talking inside their respective workplaces, and it would not serve the goal of treating public employees ‘like any member of the general public,’ [citing Pickering], to hold that all speech within the office is automatically exposed to restriction.” Garcetti, 126 S.Ct. at 1959. Greenwell seemingly eliminates the Pickering balance, reiterated recently in Garcetti.
There are four issues that warrant Supreme Court review of the Greenwell decision’s divergent holding: 1) whether a public employee may be prevented from speaking on a matter of public concern without balancing the interests of the employee, as a citizen, in commenting upon matters of public concern; 2) whether a public employee who communicates an intent to run for office has engaged in protected First Amendment speech; 3) whether a public employee can be fired based on the employee’s political affiliation even when that affiliation is irrelevant to the performance of the employee’s job; and 4) the depth of public employees’ First Amendment protections generally.
1. Public employees’ interests – as citizens - must be given weight.
Greenwell’s reactionary result – that the employer’s interest is all-encompassing and that the employees’ rights need not enter into the balance at all – erodes Pickering and its progeny to the point of meaninglessness. Certainly, the Supreme Court will undoubtedly find, an employee whose hostility to his employer (a public officeholder) reaches the level of insubordination, can be properly removed. See, e.g., Curran v. Cousins, 509 F.3d 36, 49 (1st Cir. 2007) (citing Stanley v. City of Dalton, Ga., 219 F.3d 1280, 1290 (11th Cir.2000)) (speech done in a vulgar, insulting, and defiant manner is entitled to less weight in the Pickering balance). But there still must be some balancing in this analysis.
2. The Court should not construe narrowly what kinds of public employees’ communications engender constitutional protection.
Contrary to Greenwell’s result, “speech on public issues occupies the ‘highest rung of the hierarchy of First Amendment values,’ and is entitled to special protection.” Connick, 461 U.S. at 145. After Greenwell and the 2006 Garcetti decision, a public employee cannot expect protection if he/she responsibly disagrees with the employer regarding a matter of public concern within the scope of his/her duties, nor if he/she tries to shift policy by dislodging the public officeholder. Essentially, this would leave a public employee devoid of the protection envisioned by Connick – unable to change a bad regime and stuck in it, without recourse, unless he/she is willing to sacrifice secure employment and the ability to provide for his/her family.
3. The right to run for office is encompassed in the right to political association.
The Supreme Court has previously held that “[t]he First Amendment protects political association as well as political expression,” and that “[t]he right to associate with the political party of one’s choice is an integral part of this basic constitutional freedom” of association. Elrod v. Burns, 427 U.S. 347, 357 (1976) (plurality opinion) (quoting Buckley v. Valeo, 424 U.S. 1, 15 (1976) (per curiam). Those who devote their life to public service should not be deprived, contrary to Connick, the basic rights provided other citizens.
4. The Supreme Court should reaffirm the breadth of public employees’ constitutional protections.
Greenwell is particularly important because, despite the favorable language in Garcetti about treating public employees like members of the general public with respect to First Amendment expression, that 2006 Supreme Court decision may have raised doubts about the depth of public employees’ constitutional rights. In Garcetti, the Supreme Court held that “when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline.” Garcetti, 126 S.Ct. at 1960. Public employees need the Court, in reviewing Greenwell, to reestablish the strong First Amendment protections they still have on the job. See, e.g., Givhan v. Western Line Consol. School Dist., 439 U.S. 410, 414, 99 S.Ct. 693, 58 L.Ed.2d 619 (1979).
If you are a public employee whose constitutional rights have been compromised, contact Bryan Schwartz Law, www.BryanSchwartzLaw.com.
[1] The concurrence in Greenwell by Circuit Judge Boyce Martin invites Supreme Court review of both Greenwell and Carver. Judge Boyce’s strong language in his concurrence is compelling (rivaling Carver’s viper imagery): he described Carver, upon which Greenwell relied, as “a stray cat that hangs around the door and infests the house with fleas,” stating that Carver “continues to plague this Court's jurisprudence. As such, we are bound by its conclusion.” Greenwell, 541 F.3d at 405-406.
In Greenwell, a deputy sheriff was fired because he ran for sheriff against the incumbent. The Sixth Circuit in Kentucky held that such a firing does not implicate the First Amendment, relying on an earlier precedent from that court which said that “[t]he First Amendment does not require that an official in [an employer's] situation nourish a viper in the nest.” Id. at 404 (citing Carver v. Dennis, 104 F.3d 847, 850-53 (6th Cir. 1997)). [1] Other circuits disagree, and rightly conclude that a public employee’s candidacy for office should be protected to at least the same degree as a public employee’s political speech. See, e.g., James v. Texas Collin County, 535 F.3d 365 (5th Cir. 2008); Finkelstein v. Bergna, 924 F.2d 1449 (9th Cir. 1991); Flinn v. Gordon, 775 F.2d 1551 (11th Cir. 1985); Washington v. Finlay, 664 F.2d 913 (4th Cir. 1981); Newcomb v. Brennan, 558 F.2d 825 (7th Cir. 1977); and Magill v. Lynch, 560 F.2d 22 (1st Cir. 1977).
The Greenwell plaintiff recently petitioned for the Supreme Court to overturn the 6th Circuit, in light of the 6th Circuit’s clear split with other Circuits on this issue. See Petition for Certiorari, 77 USLW 3619 (Apr 27, 2009) (No. 08-1328). The Supreme Court should grant review (certiorari) because “citizens are not deprived of fundamental rights by virtue of working for the government.” Connick v. Myers, 461 U.S. 138, 147 (1983). Running for office is a fundamental right.
The Supreme Court’s seminal decision in Pickering v. Bd. of Educ., 391 U.S. 563, 573, 88 S.Ct. 1731 (1968), set forth a balancing test for public employees’ First Amendment rights in the workplace. More recently, in 2006, the Supreme Court acknowledged, in Garcetti v. Ceballos, 547 U.S. 410, 126 S.Ct. 1951 (2006), “Many citizens do much of their talking inside their respective workplaces, and it would not serve the goal of treating public employees ‘like any member of the general public,’ [citing Pickering], to hold that all speech within the office is automatically exposed to restriction.” Garcetti, 126 S.Ct. at 1959. Greenwell seemingly eliminates the Pickering balance, reiterated recently in Garcetti.
There are four issues that warrant Supreme Court review of the Greenwell decision’s divergent holding: 1) whether a public employee may be prevented from speaking on a matter of public concern without balancing the interests of the employee, as a citizen, in commenting upon matters of public concern; 2) whether a public employee who communicates an intent to run for office has engaged in protected First Amendment speech; 3) whether a public employee can be fired based on the employee’s political affiliation even when that affiliation is irrelevant to the performance of the employee’s job; and 4) the depth of public employees’ First Amendment protections generally.
1. Public employees’ interests – as citizens - must be given weight.
Greenwell’s reactionary result – that the employer’s interest is all-encompassing and that the employees’ rights need not enter into the balance at all – erodes Pickering and its progeny to the point of meaninglessness. Certainly, the Supreme Court will undoubtedly find, an employee whose hostility to his employer (a public officeholder) reaches the level of insubordination, can be properly removed. See, e.g., Curran v. Cousins, 509 F.3d 36, 49 (1st Cir. 2007) (citing Stanley v. City of Dalton, Ga., 219 F.3d 1280, 1290 (11th Cir.2000)) (speech done in a vulgar, insulting, and defiant manner is entitled to less weight in the Pickering balance). But there still must be some balancing in this analysis.
2. The Court should not construe narrowly what kinds of public employees’ communications engender constitutional protection.
Contrary to Greenwell’s result, “speech on public issues occupies the ‘highest rung of the hierarchy of First Amendment values,’ and is entitled to special protection.” Connick, 461 U.S. at 145. After Greenwell and the 2006 Garcetti decision, a public employee cannot expect protection if he/she responsibly disagrees with the employer regarding a matter of public concern within the scope of his/her duties, nor if he/she tries to shift policy by dislodging the public officeholder. Essentially, this would leave a public employee devoid of the protection envisioned by Connick – unable to change a bad regime and stuck in it, without recourse, unless he/she is willing to sacrifice secure employment and the ability to provide for his/her family.
3. The right to run for office is encompassed in the right to political association.
The Supreme Court has previously held that “[t]he First Amendment protects political association as well as political expression,” and that “[t]he right to associate with the political party of one’s choice is an integral part of this basic constitutional freedom” of association. Elrod v. Burns, 427 U.S. 347, 357 (1976) (plurality opinion) (quoting Buckley v. Valeo, 424 U.S. 1, 15 (1976) (per curiam). Those who devote their life to public service should not be deprived, contrary to Connick, the basic rights provided other citizens.
4. The Supreme Court should reaffirm the breadth of public employees’ constitutional protections.
Greenwell is particularly important because, despite the favorable language in Garcetti about treating public employees like members of the general public with respect to First Amendment expression, that 2006 Supreme Court decision may have raised doubts about the depth of public employees’ constitutional rights. In Garcetti, the Supreme Court held that “when public employees make statements pursuant to their official duties, the employees are not speaking as citizens for First Amendment purposes, and the Constitution does not insulate their communications from employer discipline.” Garcetti, 126 S.Ct. at 1960. Public employees need the Court, in reviewing Greenwell, to reestablish the strong First Amendment protections they still have on the job. See, e.g., Givhan v. Western Line Consol. School Dist., 439 U.S. 410, 414, 99 S.Ct. 693, 58 L.Ed.2d 619 (1979).
If you are a public employee whose constitutional rights have been compromised, contact Bryan Schwartz Law, www.BryanSchwartzLaw.com.
[1] The concurrence in Greenwell by Circuit Judge Boyce Martin invites Supreme Court review of both Greenwell and Carver. Judge Boyce’s strong language in his concurrence is compelling (rivaling Carver’s viper imagery): he described Carver, upon which Greenwell relied, as “a stray cat that hangs around the door and infests the house with fleas,” stating that Carver “continues to plague this Court's jurisprudence. As such, we are bound by its conclusion.” Greenwell, 541 F.3d at 405-406.
Wednesday, April 29, 2009
Who Is Getting Your Tip Money? It Is Time to Put Limits on Tip-Pooling.
Please see the attached letter, which I drafted to send today to the California Supreme Court on behalf of the California Employment Lawyers' Association.
Via First-Class Mail
April 29, 2009
The Honorable Ronald M. George, Chief Justice
and Associate Justices
California Supreme Court
350 McAllister Street
San Francisco, CA 94102
Re: Amicus Curiae Letter (Rule 8.500(g))
Lu v. Hawaiian Gardens Casino, Inc. (2009) 170 Cal.App.4th 466, 88 Cal.Rptr.3d 345
California Court of Appeal, Second District, Division 3, No. B194209, Petition No. 171442
Dear Chief Justice and Associate Justices:
This is a letter under Rule 8.500(g) of the 2009 California Rules of Court in support of the petition for review by the Plaintiff/Appellant in Lu v. Hawaiian Gardens Casino, Inc. (2009) 170 Cal.App.4th 466, 88 Cal.Rptr.3d 345, California Court of Appeal, Second District, Division 3, No. B194209 (hereafter, Lu). This letter, on behalf of the California Employment Lawyers Association (CELA), seeks to have this Court define the scope of permissible tip pooling. The Court of Appeal’s decision in Lu is just one of several recent decisions by Courts of Appeal attempting to define the parameters of permissible tip pooling without Supreme Court guidance.[1] Though this Court has discussed Cal. Lab. Code §351, the basis for the instant dispute (see Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 166 Cal.Rptr. 331, and Henning v. Industrial Welfare Com. (1988) 46 Cal.3d 1262, 252 Cal.Rptr. 278), this Court has never weighed in on the extent to which employers may appropriate money given by customers to service employees as gratuities and distribute it to other non-supervisory employees.
California Courts of Appeal have long followed Leighton v. Old Heidelberg, Ltd. (1990) 219 Cal.App.3d 1062, 268 Cal.Rptr. 647 (decided closely on the heels of Henning), which ruled that enforced tip pooling between servers and bussers at a restaurant is permissible under §351. Leighton emphasized that the regulation states that a gratuity is “hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.” (Ital. added to emphasize the plural.) However, recent decisions have begun to extend the tip pooling concept beyond merely multiple service employees assisting a single customer at a restaurant table. Lu stretches the tip pool to sharing tips between a casino dealer (who directly received the tip from the customer for his/her service) and chip runners, hostesses, poker tournament and poker rotation coordinators, customer services representatives or “floormen,” and concierges. Lu, 170 Cal.App.4th at 471. CELA believes that the better-reasoned view is that tip pooling can only be proper, under the plain language of §351, between non-supervisory employees[2] for whom the gratuities in question were “paid, given, or left for.” Under §351, tip income must not be used by an employer to subsidize the wages of other non-supervisory employees who were not responsible for the service which caused the customer to provide a gratuity.[3]
I. Interest of Amicus
The undersigned writes on behalf of CELA, a “person” within the meaning of Rule 8.500(g), seeking to support the petition for review. CELA is a statewide non-profit organization dedicated to protecting workers’ rights. CELA’s member attorneys represent employees in all types of employment cases in state and federal courts and before administrative agencies, including employment discrimination, wrongful discharge, wage and hour, and unemployment insurance matters. In each of these substantive areas of law, CELA’s members and their clients challenge employers who fail to adhere to California and federal employment laws. CELA frequently appears as amicus curiae in matters before this Court, including, e.g., recent appearances in Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 56 Cal.Rptr.3d 880, Gentry v. Superior Court (2007) 42 Cal.4th 443, 64 Cal.Rptr.3d 773, and Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 81 Cal.Rptr.3d 282.
CELA’s members have an abiding interest in the scope of permissible tip pools, directly at issue in this case. In particular, CELA seeks to ensure that the concept of tip pooling is not abused so as to undermine employees’ property interest in their gratuities, guaranteed by Labor Code §351, and that the State’s wage and hour laws are “liberally construed with an eye to promoting [worker] protection,” as this Court required in Henning, 42 Cal.3rd at 1269 (citing Industrial Welfare Com’n, 27 Cal.3d at 700-703). CELA hopes that this Court will not permit an interpretation, like that applied in Lu, which results or could result in tips given directly to millions of California non-supervisory workers being misappropriated to defray employers’ labor costs with respect to other workers.
II. Review is Warranted
In Henning, 46 Cal.3d at 1279-1281, and Industrial Welfare Com’n, 27 Cal.3d at 729-731, the Court applied §351 to eliminate the practice of tip crediting, which had been used to pay service employees receiving gratuities less than the minimum wage, or a lower minimum wage than non-tipped employees. Part of the rationale for these decisions eliminating tip crediting and the two-tiered minimum wage was that “a lower minimum (which in itself is to provide an adequate) wage is only possible because tips are used to subsidize it” (see Henning, 46 Cal.3d at 1278, citing Industrial Welfare Com’n) – and employers should not be able to use tips (the property of the employees who received them) to subsidize otherwise inadequate wages. This Court discussed the legislative history behind §351, noting that the section, in its current form, was designed to prevent employers from “obtain[ing] the benefit (as, in effect, the payment of wages) of tips and other gratuities received by their employees,” and “from taking any tip given by a patron to his employee.” Henning, 46 Cal.3d at 1279.
The Leighton court discussed some practical difficulties behind this public policy, and held, pragmatically, that tip pooling cannot be prohibited in all circumstances, such as where servers and bussers are together working at a restaurant table. The Court of Appeal explained, in language cited by the Lu court and others:
"We dare say that the average diner has little or no idea and does not really care who benefits from the gratuity he leaves, as long as the employer does not pocket it, because he rewards for good service no matter which one of the employees directly servicing the table renders it. This, and the near impossibility of being able to determine the intent of departed diners in leaving a tip, in our view, account for the Legislature's use of the term 'employees' in declaring that 'every such gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.' (Lab.Code, § 351, italics added.) It is clear that the Legislature intended by this section to cover just such a situation." Leighton, 219 Cal.App.3d at 1069.
However, the Lu court disingenuously extends this language to the present situation. CELA hopes this Court will recognize the difference between leaving a gratuity in a tip cup at a coffee shop counter or on a table at a restaurant, where it may be pooled between all the non-supervisory employees providing the service the customers received, and a tip given directly to (for example) a casino dealer working at a table alone, apparently to recognize him/her. In the latter situation, there is no need to divine the customer’s intentions – he/she is tipping the dealer. There is no reason to believe that the customer intended also to recognize chip runners, or hostesses (who are separately tipped), etc. This is not a scenario in which rejection of tip pooling would create counter-productive incentives for employees and workplace strife, as in Leighton, 219 Cal.App.3d at 1070. There, the rejection of tip pooling between servers and bussers might lead to tips being commandeered by the first person to grab them off the table, and infighting as a result. Id. Here, the dealer need not fight for the tips he/she is given or swipe them before other employees notice – the tips are given to or left for him/her directly, and no one else.
The casino simply wants to subsidize the wages of its chip runners and others who do not receive tips by giving them part of the tips earned by dealers. According to Henning, this is against the legislative intent of §351, because it is taking money out of the dealers’ hands and using it to keep down the employers’ labor costs. While CELA would certainly condone an effort to ensure greater pay for chip runners and other non-tipped employees, and they will need to receive greater wages to attract their labor, if they are not receiving portions of dealers’ gratuities, their pay should not come out of the pockets of the tipped employees – but from the casinos.
The plain language of the statute is that the gratuities become the property of the non-supervisory employees for whom they are left. “Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.” Cal. Lab. Code §351. Courts do not need to get into case-by-case findings regarding customers’ intent, which, as Leighton explained, can be vague. But it is safe to hold that, where tips are left in a tip cup or at a restaurant table, they are the property of all non-supervisors involved in providing the customer with good service – whereas, when tips are handed to a casino dealer or left at a casino table where a dealer is still sitting and where he/she is the only person working, the tips are the sole property of that dealer.
III. Conclusion
For the foregoing reasons, CELA hopes this Court will not permit courts to follow Lu, allowing the spreading to non-tipped employees of gratuities earned by and owned by particular employees, designed only to avoid payment of competitive wages in the labor market. Please grant the petition for review.
Thank you for your consideration.
CALIFORNIA EMPLOYMENT LAWYERS’ ASSOCIATION
BRYAN SCHWARTZ LAW
/s/Bryan J. Schwartz
___________________________
Bryan J. Schwartz, SBN 209903
180 Grand Avenue, Suite 1550
Oakland, CA 94612
Tel. 510-444-9300
Fax 510-444-9301
Email: Bryan@BryanSchwartzLaw.com
Website: http://www.bryanschwartzlaw.com/
[1] See also, e.g., Budrow v. Dave & Buster’s of California, Inc. (2009) 171 Cal.App.4th 875, 90 Cal.Rptr.3d 239; Etheridge v. Reins International California, Inc. (2009) 172 Cal.App.4th 908, 91 Cal.Rptr.3d 816.
[2] All courts agree that supervisory employees must be strictly excluded from tip pools, and CELA does not challenge the portion of Lu addressing this issue. See Cal.Lab. 350(a) and (d); Lu, 170 Cal.App.4th at 485-486 (citing Jameson v. Five Feet Restaurant (2003) 107 Cal.App.4th 138, 141-143, 131 Cal.Rptr.2d 771).
[3] See Etheridge, 172 Cal.App.4th 908, discussing Henning and Industrial Welfare Commission (“Even though an employer can no longer use tip sharing to subsidize minimum wages of non-tipped employees, it is possible that an employer could use tip sharing to subsidize market wages of non-tipped employees, resulting in the same evil. Thus, when considering tip pooling, it is important to make certain that the employer is not using the tip pool as a de facto tip credit against market wages.”) (emph. in original). See generally id., 172 Cal.App.4th 908 (Klein, P.J., concurring and dissenting) (“The majority opinion here eviscerates section 351 's guarantee that a gratuity belongs to the employee or employees for whom it was left. The majority opinion authorizes the employer to confiscate a portion of the gratuities left for servers and to redistribute those monies to other employees, so as to subsidize the wages of non-tipped employees, in accordance with the employer's self-interest and priorities. For these reasons, the propriety and parameters of employer-mandated tip pooling warrant the prompt attention of the California Supreme Court or the Legislature.”) (emph. in original).
Via First-Class Mail
April 29, 2009
The Honorable Ronald M. George, Chief Justice
and Associate Justices
California Supreme Court
350 McAllister Street
San Francisco, CA 94102
Re: Amicus Curiae Letter (Rule 8.500(g))
Lu v. Hawaiian Gardens Casino, Inc. (2009) 170 Cal.App.4th 466, 88 Cal.Rptr.3d 345
California Court of Appeal, Second District, Division 3, No. B194209, Petition No. 171442
Dear Chief Justice and Associate Justices:
This is a letter under Rule 8.500(g) of the 2009 California Rules of Court in support of the petition for review by the Plaintiff/Appellant in Lu v. Hawaiian Gardens Casino, Inc. (2009) 170 Cal.App.4th 466, 88 Cal.Rptr.3d 345, California Court of Appeal, Second District, Division 3, No. B194209 (hereafter, Lu). This letter, on behalf of the California Employment Lawyers Association (CELA), seeks to have this Court define the scope of permissible tip pooling. The Court of Appeal’s decision in Lu is just one of several recent decisions by Courts of Appeal attempting to define the parameters of permissible tip pooling without Supreme Court guidance.[1] Though this Court has discussed Cal. Lab. Code §351, the basis for the instant dispute (see Industrial Welfare Com. v. Superior Court (1980) 27 Cal.3d 690, 166 Cal.Rptr. 331, and Henning v. Industrial Welfare Com. (1988) 46 Cal.3d 1262, 252 Cal.Rptr. 278), this Court has never weighed in on the extent to which employers may appropriate money given by customers to service employees as gratuities and distribute it to other non-supervisory employees.
California Courts of Appeal have long followed Leighton v. Old Heidelberg, Ltd. (1990) 219 Cal.App.3d 1062, 268 Cal.Rptr. 647 (decided closely on the heels of Henning), which ruled that enforced tip pooling between servers and bussers at a restaurant is permissible under §351. Leighton emphasized that the regulation states that a gratuity is “hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.” (Ital. added to emphasize the plural.) However, recent decisions have begun to extend the tip pooling concept beyond merely multiple service employees assisting a single customer at a restaurant table. Lu stretches the tip pool to sharing tips between a casino dealer (who directly received the tip from the customer for his/her service) and chip runners, hostesses, poker tournament and poker rotation coordinators, customer services representatives or “floormen,” and concierges. Lu, 170 Cal.App.4th at 471. CELA believes that the better-reasoned view is that tip pooling can only be proper, under the plain language of §351, between non-supervisory employees[2] for whom the gratuities in question were “paid, given, or left for.” Under §351, tip income must not be used by an employer to subsidize the wages of other non-supervisory employees who were not responsible for the service which caused the customer to provide a gratuity.[3]
I. Interest of Amicus
The undersigned writes on behalf of CELA, a “person” within the meaning of Rule 8.500(g), seeking to support the petition for review. CELA is a statewide non-profit organization dedicated to protecting workers’ rights. CELA’s member attorneys represent employees in all types of employment cases in state and federal courts and before administrative agencies, including employment discrimination, wrongful discharge, wage and hour, and unemployment insurance matters. In each of these substantive areas of law, CELA’s members and their clients challenge employers who fail to adhere to California and federal employment laws. CELA frequently appears as amicus curiae in matters before this Court, including, e.g., recent appearances in Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 56 Cal.Rptr.3d 880, Gentry v. Superior Court (2007) 42 Cal.4th 443, 64 Cal.Rptr.3d 773, and Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 81 Cal.Rptr.3d 282.
CELA’s members have an abiding interest in the scope of permissible tip pools, directly at issue in this case. In particular, CELA seeks to ensure that the concept of tip pooling is not abused so as to undermine employees’ property interest in their gratuities, guaranteed by Labor Code §351, and that the State’s wage and hour laws are “liberally construed with an eye to promoting [worker] protection,” as this Court required in Henning, 42 Cal.3rd at 1269 (citing Industrial Welfare Com’n, 27 Cal.3d at 700-703). CELA hopes that this Court will not permit an interpretation, like that applied in Lu, which results or could result in tips given directly to millions of California non-supervisory workers being misappropriated to defray employers’ labor costs with respect to other workers.
II. Review is Warranted
In Henning, 46 Cal.3d at 1279-1281, and Industrial Welfare Com’n, 27 Cal.3d at 729-731, the Court applied §351 to eliminate the practice of tip crediting, which had been used to pay service employees receiving gratuities less than the minimum wage, or a lower minimum wage than non-tipped employees. Part of the rationale for these decisions eliminating tip crediting and the two-tiered minimum wage was that “a lower minimum (which in itself is to provide an adequate) wage is only possible because tips are used to subsidize it” (see Henning, 46 Cal.3d at 1278, citing Industrial Welfare Com’n) – and employers should not be able to use tips (the property of the employees who received them) to subsidize otherwise inadequate wages. This Court discussed the legislative history behind §351, noting that the section, in its current form, was designed to prevent employers from “obtain[ing] the benefit (as, in effect, the payment of wages) of tips and other gratuities received by their employees,” and “from taking any tip given by a patron to his employee.” Henning, 46 Cal.3d at 1279.
The Leighton court discussed some practical difficulties behind this public policy, and held, pragmatically, that tip pooling cannot be prohibited in all circumstances, such as where servers and bussers are together working at a restaurant table. The Court of Appeal explained, in language cited by the Lu court and others:
"We dare say that the average diner has little or no idea and does not really care who benefits from the gratuity he leaves, as long as the employer does not pocket it, because he rewards for good service no matter which one of the employees directly servicing the table renders it. This, and the near impossibility of being able to determine the intent of departed diners in leaving a tip, in our view, account for the Legislature's use of the term 'employees' in declaring that 'every such gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.' (Lab.Code, § 351, italics added.) It is clear that the Legislature intended by this section to cover just such a situation." Leighton, 219 Cal.App.3d at 1069.
However, the Lu court disingenuously extends this language to the present situation. CELA hopes this Court will recognize the difference between leaving a gratuity in a tip cup at a coffee shop counter or on a table at a restaurant, where it may be pooled between all the non-supervisory employees providing the service the customers received, and a tip given directly to (for example) a casino dealer working at a table alone, apparently to recognize him/her. In the latter situation, there is no need to divine the customer’s intentions – he/she is tipping the dealer. There is no reason to believe that the customer intended also to recognize chip runners, or hostesses (who are separately tipped), etc. This is not a scenario in which rejection of tip pooling would create counter-productive incentives for employees and workplace strife, as in Leighton, 219 Cal.App.3d at 1070. There, the rejection of tip pooling between servers and bussers might lead to tips being commandeered by the first person to grab them off the table, and infighting as a result. Id. Here, the dealer need not fight for the tips he/she is given or swipe them before other employees notice – the tips are given to or left for him/her directly, and no one else.
The casino simply wants to subsidize the wages of its chip runners and others who do not receive tips by giving them part of the tips earned by dealers. According to Henning, this is against the legislative intent of §351, because it is taking money out of the dealers’ hands and using it to keep down the employers’ labor costs. While CELA would certainly condone an effort to ensure greater pay for chip runners and other non-tipped employees, and they will need to receive greater wages to attract their labor, if they are not receiving portions of dealers’ gratuities, their pay should not come out of the pockets of the tipped employees – but from the casinos.
The plain language of the statute is that the gratuities become the property of the non-supervisory employees for whom they are left. “Every gratuity is hereby declared to be the sole property of the employee or employees to whom it was paid, given, or left for.” Cal. Lab. Code §351. Courts do not need to get into case-by-case findings regarding customers’ intent, which, as Leighton explained, can be vague. But it is safe to hold that, where tips are left in a tip cup or at a restaurant table, they are the property of all non-supervisors involved in providing the customer with good service – whereas, when tips are handed to a casino dealer or left at a casino table where a dealer is still sitting and where he/she is the only person working, the tips are the sole property of that dealer.
III. Conclusion
For the foregoing reasons, CELA hopes this Court will not permit courts to follow Lu, allowing the spreading to non-tipped employees of gratuities earned by and owned by particular employees, designed only to avoid payment of competitive wages in the labor market. Please grant the petition for review.
Thank you for your consideration.
CALIFORNIA EMPLOYMENT LAWYERS’ ASSOCIATION
BRYAN SCHWARTZ LAW
/s/Bryan J. Schwartz
___________________________
Bryan J. Schwartz, SBN 209903
180 Grand Avenue, Suite 1550
Oakland, CA 94612
Tel. 510-444-9300
Fax 510-444-9301
Email: Bryan@BryanSchwartzLaw.com
Website: http://www.bryanschwartzlaw.com/
[1] See also, e.g., Budrow v. Dave & Buster’s of California, Inc. (2009) 171 Cal.App.4th 875, 90 Cal.Rptr.3d 239; Etheridge v. Reins International California, Inc. (2009) 172 Cal.App.4th 908, 91 Cal.Rptr.3d 816.
[2] All courts agree that supervisory employees must be strictly excluded from tip pools, and CELA does not challenge the portion of Lu addressing this issue. See Cal.Lab. 350(a) and (d); Lu, 170 Cal.App.4th at 485-486 (citing Jameson v. Five Feet Restaurant (2003) 107 Cal.App.4th 138, 141-143, 131 Cal.Rptr.2d 771).
[3] See Etheridge, 172 Cal.App.4th 908, discussing Henning and Industrial Welfare Commission (“Even though an employer can no longer use tip sharing to subsidize minimum wages of non-tipped employees, it is possible that an employer could use tip sharing to subsidize market wages of non-tipped employees, resulting in the same evil. Thus, when considering tip pooling, it is important to make certain that the employer is not using the tip pool as a de facto tip credit against market wages.”) (emph. in original). See generally id., 172 Cal.App.4th 908 (Klein, P.J., concurring and dissenting) (“The majority opinion here eviscerates section 351 's guarantee that a gratuity belongs to the employee or employees for whom it was left. The majority opinion authorizes the employer to confiscate a portion of the gratuities left for servers and to redistribute those monies to other employees, so as to subsidize the wages of non-tipped employees, in accordance with the employer's self-interest and priorities. For these reasons, the propriety and parameters of employer-mandated tip pooling warrant the prompt attention of the California Supreme Court or the Legislature.”) (emph. in original).
Wednesday, April 22, 2009
Using Company Email to Communicate with Your Employment Lawyer
The sanctity of the attorney-client relationship is a fundamental pillar of our legal system, recognized throughout the public and private sector. “[T]he attorney-client privilege is the oldest privilege recognized for confidential communications at common law and is intended ‘to encourage full and frank communications between attorneys and their clients and thereby promote broader public interests in the observance of law and the administration of justice.’” Grimes v. Dept. of Navy, 99 M.S.P.R. 7, 11 (2005) (quoting Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981)). “The attorney-client privilege protects confidential disclosures made by a client to an attorney in order to obtain legal advice,...as well as an attorney's advice in response to such disclosures.” United States v. Chen, 99 F.3d 1495, 1501 (9th Cir. 1996) (quotation omitted), cert. denied, 520 U.S. 1167, 117 S.Ct. 1429, 137 L.Ed.2d 538 (1997). The attorney-client privilege falls into the class of absolute privileges. Swidler & Berlin v. United States, 524 U.S. 399, 409, 118 S.Ct. 2081, 141 L.Ed.2d 379 (1998). If you are engaged in an attorney-client relationship with counsel at the time of particular communications, then an absolute privilege should apply to those communications.
However, what if you learn that your employer, either intentionally or inadvertently, has come into possession of attorney-client emails sent through a work email account? First, if you learn that attorney-client communications or attorney work product documents are in the employer’s possession, you should immediately seek return of such communications. You should advise the employer that you consider the documents to be attorney-client privileged communications (and possibly attorney work product privileged as well). You should be clear that it is not your intention to waive any attorney-client, work product, or other privileges that apply to these documents.
You can also remind your employer that, under Fed.R.Civ.P. 26(b)(5)(B), after being notified of an inadvertent disclosure of privileged information, “a party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the court under seal for a determination of the claim.” “Once a party claims the attorney-client privilege, the communication sought to be suppressed is presumed confidential.” La Jolla Cove Motel and Hotel Apartments, Inc., v. Superior Court, 121 Cal.App.4th 773, 791 (2004) (citing Cal.Evid.Code, § 917).
Generally, you can put your employer on notice that the ethical canons of the legal profession preclude the employer from searching intentionally to discover privileged information in an employee’s email account, knowing that such information is subject to an asserted or very likely attorney-client or work-product privilege. Such would include all communications between an employee and his/her employment lawyer. The American Bar Association’s Standing Committee on Ethics and Professional Responsibility, “Formal Opinion 92-368: Inadvertent Disclosure of Confidential Materials (1992),” makes clear that counsel should not seek to review information it has reason to believe was inadvertently disclosed.
If the employer is trying to hold against you something you discussed with your employment attorney on a company email system, you should also remind the employer that privileged communications do not lose their privileged character because they are communicated electronically. See California's Evidence Code § 917(b). See also, e.g., 18 U.S.C. § 2517(4) (wiretap law recognizing that electronic communications may have privileged character); Kintera, Inc. v. Convio, Inc., 219 F.R.D. 503, 514 (S.D. Cal. 2003) (applying attorney-client privilege to email communications). However, attorney-client privilege can be waived, and if the privilege is waived, then those communications may be fair game for employers to use.
The “sacred” attorney-client privilege can be waived “implicitly” only under rare, defined circumstances (see Bittaker v. Woodford, 331 F.3d 715, 718-721 (9th Cir. 2003)), such as (for example) in a legal malpractice action, where the attorney-client communications are directly placed at issue in the litigation. On the other hand, an “express waiver occurs when a party discloses privileged information to a third party who is not bound by the privilege, or otherwise shows disregard for the privilege by making the information public.” Id. at 719. By communicating to the employer seeking return of disclosed information immediately after learning of its disclosure, you convey a strong desire to maintain the privilege. On the other hand, if you forward your attorney’s email to someone else not involved in the attorney-client relationship, you have likely implicitly waived the privilege as to that particular communication.
It is the present policy of Bryan Schwartz Law (www.BryanSchwartzLaw.com) to communicate as little as possible, or not at all, with clients on their work email, because, at the very least, it creates a headache in subsequent litigation when an employer inadvertently discovers attorney-client communications and tries to use them in the case. However, I believe strongly that privileges between employees and their attorneys – not to mention, prisoners emailing their attorneys, and other attorney-client email relationships – would be of little value if, by disclaimer, “Big Brother” could simply deem all communications via particular media as non-confidential, such that privilege would be waived inherently and broadly. Many employees in the workforce do not have private email apart from their work email accounts, and thus would not be able to email their attorneys at all. Perhaps all work email (not only that of the employer against whom a party is litigating) – by virtue of the fact that a non-attorney administrator can access it – would be unprivileged, including all emails sent by attorneys to clients from the attorneys’ own law firms’ email accounts. By this rule, all of the emails between the employer and the employer’s own attorneys regarding your case would also be unprivileged, because privilege was waived when they utilized the company’s email system. Perhaps all email sent via Gmail, Yahoo, Comcast, SBC, and Hotmail would also be unprivileged, since there are no doubt skilled individuals who can access our emails sent via these services as well.[1]
In sum, while the danger of inadvertent disclosure during discovery makes attorney-client communications by work email not a “best practice,” it does not mean that all attorneys and all clients who communicate via a work email have waived their sacred rights. In practice, many or most employers tolerate usage of work email for some personal uses. If the employer demonstrated a widespread enforcement of a “no personal use” policy, such that you and individuals known to you were being routinely counseled and disciplined for using their email to send greetings to spouses or friends, or, if the employer’s email system generally prevented outside emails all together, then perhaps you would be on clear notice that your emails were being monitored and would have a reasonable belief they were non-confidential. However, just because we are aware in the abstract that someone (like a forensic software examiner or technology specialist) could figure out how to probe our email accounts, is not the same as knowing that each of our emails is being actively monitored. By way of contrast, when one calls a credit card company, the phone system indicates on every call that you are “being monitored and recorded for quality and training purposes” – which might defeat an expectation of privacy/confidentiality. See also Cal. Evid. Code. §917(b). In many cases, there is no indication that employees know that each of their emails are being individually monitored. An employee of an employer with hundreds or thousands of employees worldwide need not assume that every communication he/she has with anyone about anything is being read by individuals who are not the intended recipients of the communication.[2]
Even if you could ever have reasonably expected the employer to learn that you did exchange some emails with your attorney while at work (i.e., the identities of your addressees), you would have no reason to believe that the employer at the direction of legal counsel would overtly violate legal ethical obligations by seeking to review the substance of communications known to be between a client and his/her counsel.
Your communications with counsel via work email arguably maintain their privileged character, and should not be employed by the employer against you.
[1] It is no doubt possible for technologically-gifted individuals to listen to attorney-client communications via telephone, too, and yet courts have found that individuals have a reasonable expectation of privacy in their phone conversations. Quon v. Arch Wireless Operating Co., Inc., 529 F.3d 892, 904 (9th Cir. 2008) (citing Katz v. United States, 389 U.S. 347, 353, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967) (“One who occupies [a phone booth], shuts the door behind him, and pays the toll that permits him to place a call is surely entitled to assume that the words he utters into the mouthpiece will not be broadcast to the world. To read the Constitution more narrowly is to ignore the vital role that the public telephone has come to play in private communication.”). Before Katz, courts had found that communications by United States mail could also be entitled to confidentiality/an expectation of privacy. Quon, 529 F.3d at 905 (citing United States v. Jacobsen, 466 U.S. 109, 114, 104 S.Ct. 1652, 80 L.Ed.2d 85 (1984)). Email (and text message) plays a role today like the phone booth and the U.S. mail have played in the past, and the content of messages transmitted via these media can have a reasonable expectation of privacy and confidentiality. Quon, 529 F.3d at 905-906 (citing United States v. Forrester, 512 F.3d 500, 510 (9th Cir. 2008)).
[2] Without having statistical or expert data on point, my experience suggests that virtually every client, co-worker, and friend whose work email permits sending to and receiving from outside parties does have personal communications from time to time on this email system, which he or she does not expect to be read by non-addressees at the employer.
DISCLAIMER: Nothing in this posting is intended in any way to form an attorney-client relationship or any other contract. It is designed solely to provide general information about one area of the practice at Bryan Schwartz Law. Be mindful of any deadlines you have approaching that relate to your legal situation, and make sure that you meet them. Bryan Schwartz Law does not assume any responsibility for advice given regarding any aspect of your case until you have a signed legal services agreement engaging the firm’s representation.
Tuesday, March 31, 2009
Just Because It's a Layoff, Doesn't Mean You're Out of Options
In this down economy, many employers are undergoing layoffs of workers. Certainly, it can be harder to prove that your termination was discriminatory or retaliatory when many others are suffering the same fate as you are. But ask yourself this: was the layoff legitimately based upon financial reasons, and if so, why were you chosen?
As the California Supreme Court has explained, “Invocation of a right to downsize does not resolve whether the employer had a discriminatory motive for cutting back its work force, or engaged in intentional discrimination when deciding which individual workers to retain and release.” Guz v. Bechtel National, Inc., 24 Cal.4th 317, 358, 100 Cal.Rptr.2d 352 (2000). See also, e.g., Miller v. Fairchild Industries, Inc., 885 F.2d 498, 506 (9th Cir. 1989) (jury could find retaliation in layoff which employer claimed was based on decline in workload, where employee provided contrary testimony and where other employees were not similarly laid off); Cones v. Shalala, 199 F.3d 512, 519-520 (D.C.Cir. 2000) (holding that a jury could have concluded that the agency's explanation for not promoting the African-American plaintiff, downsizing, was inconsistent with its decision to promote three white co-workers, and hence a pretext for discrimination); Cichewicz v. UNOVA Indus. Automotive Systems, Inc., 92 Fed.Appx. 215, at **5 (6th Cir. 2004) (downsizing explanation insufficient to warrant summary judgment where there was evidence of pretext). If you were chosen for layoff over someone not of your protected classification who was less qualified, then you may still have a viable claim regarding your termination.
In a case in which I argued this last month against a summary judgment and summary adjudication motion, the employer - a relatively small company - laid off five workers, including my client, who was 50 at the time. My client was the only worker of his classification laid off, and a number were retained - including some who were similar in age to my client, and some who were ten or more years younger. I was able to distinguish my client from several workers of similar ages because they worked in different regions (geographically) than he did. Yet, the company was at first unable to present a legitimate, non-discriminatory reason for retaining the younger workers instead of my client. When the company did present reasons other than age, they were only vague and non-specific ones (e.g., management felt that my client would be "less missed"), which (to the extent they meant anything at all) my client could readily refute.
Moreover, there were numerous instances in which a key decision-maker in the layoff had told my client that he felt the company needed to "get younger," and that older workers cost the company more in benefits and wages, among other statements. This evidence suggests that the company's weak reasons stated for choosing my client for layoff were just a pretext (or phony reason to cover up) for age discrimination. “With direct evidence of pretext, a triable issue as to the actual motivation of the employer is created even if the evidence is not substantial. The plaintiff is required to produce very little direct evidence of the employer's discriminatory intent to move past summary judgment.” Morgan v. Regents of University of Cal. (2000) 88 Cal.App.4th 52, 68, 105 Cal.Rptr.2d 652 (citing Chuang v. University of California Davis, Bd. of Trustees (9th Cir. 2000) 225 F.3d 1115, 1127.
Based on the evidence I presented, Bryan Schwartz Law (http://www.bryanschwartzlaw.com/) and my co-counsel learned that the Court intends to deny the company's effort to defeat the age discrimination claim arising from the layoff, allowing my client to proceed to trial to overturn his termination.
If you are notified of a layoff, think twice before assuming that you are out of options.
DISCLAIMER: Nothing in this posting is intended in any way to form an attorney-client relationship or any other contract. It is designed solely to provide general information about one area of the practice at Bryan Schwartz Law. Be mindful of any deadlines you have approaching that relate to your legal situation, and make sure that you meet them. Bryan Schwartz Law does not assume any responsibility for advice given regarding any aspect of your case until you have a signed legal services agreement engaging the firm’s representation.
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