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Day of Rest: CA Supreme Court Clarifies the Requirements

Whether you are an employee or an employer, knowing exactly how wage-an-hour law works is crucial. No employee wants to be underpaid and no employer wants to be staring down the barrel of a lawsuit. However, no matter how well acquainted you are with the requirements of employment law there will always be edge cases and ambiguities-that’s why there are lawyers.

One of the most egregious of these ambiguities in California employment law has been the state’s “day of rest” provisions. Causing employers and employees alike to tear their hair out over whether they’re paying or being paid properly, the law has been in place for years without a final ruling on how it works.

In California, and in many other states, there are several situations which require an employer to pay overtime to their employee. Barring specific exceptions, such as an employment agreement specifically allowing an alternate schedule such as four days of ten hours each, these situations are include days where an employee works over eight hours in a single day or over 40 hours in a single work week. However, the “day of rest” provisions include a third situation where overtime must be paid. Whenever an employer “causes “an employee to “work more than six days in seven.”

Day of RestWhile there has been sort of an unspoken agreement as to what this exactly means among the courts, the phrasing of the law has left many interpretations up in the air and no court had ever sat down and explicitly said what the law meant.  This left employers and employees alike in a state of legal limbo. Does the law prevent an employer from making somebody work any seven days in a row or only in each workweek? When exactly has an employer “caused” an employee to work seven days in a row? Are there any exceptions to the “day of rest” rules?

After the 9th Circuit Court of Appeals punted to the California Supreme Court on all these ambiguities, the highest court in California has come to the rescue of confused employers and employees. In a recent ruling they have answered all these questions and put to rest one of the longest running mysteries in California employment law.

So How Do “Day of Rest” Rules Work?

First, the Court addressed the most pressing question-when has an employer violated day of rest provisions in the first place? In other areas of California employment law, it is common to calculate overtime as part of a single workweek. A workweek can start on any day, but once it’s defined it will always be the seven day period starting with that day. Most businesses use Monday to Sunday for their workweek. The California Supreme Court followed this trend in deciding what exactly counted as working more than six days in seven. They ruled that the purpose of the law was to guarantee a day of rest in any given workweek as opposed to any given string of seven days. This means that an employer can have an employee work more than seven days in a row. In fact, with a day off at the very beginning and the very end an employer could have an employee work as many as twelve days in a row across two workweeks. With a standard workweek this would involve having the first Monday off, working until the Saturday after next, then having that final Sunday off.

The Court also ruled on what it means for an employer to “cause” an employee to work more than six days in a workweek. Interpreted literally, “cause” could mean literally any situation where an employee works seven days in a workweek-regardless of a waiver on the employees part. Once again, the Supreme Court officially ruled that this is not the case. While “an employer causes its employee to go without a day of rest when it induces the employee to forgo rest to which he or she is entitled. An employer is not…forbidden from permitting or allowing an employee, fully apprised of the entitlement to rest, independently to choose not to take a day of rest.” To cut out the legalese, this means that if an employee wants to work seven days in a workweek despite being told they don’t have to the employer has not violated “day of rest” rules.

Finally, the Supreme Court ruled that there is an exception to the “day of rest” rules where an employee never works more than six hours in a day during a workweek. If an employee works more than six hours in any given day during a week then “day of rest” rules apply to that employee for that workweek and they need to be offered at least one day off.

What Does This Ruling Mean For Employers and Employees?

For California employers, this ruling is huge for two reasons. First, by removing the ambiguity in “day of rest” laws the Court has allowed these employers to operate without fear of surprise lawsuits. Second, the exact rulings will give employers plenty to celebrate. By and large, the Court’s rulings on the matter have offered employers the largest possible latitude in handling “day of rest” rules without removing the requirement altogether. The ruling allows the day of rest to be provided whenever is convenient within a workweek, allows employees to forgo a day of rest, and even provides outright exemptions for some part-time (and full-time) employees.

But California employees have something to celebrate as well. While the “day of rest” rights have been given more liberal interpretation, they are still well-defined rights which every employee can enjoy. The ruling of the court corresponds closely with how most courts have interpreted the rights up until now. Instead of losing rights, employees have a better idea of what exactly their rights are. This means an employee, and a lawyer advising that employee, can be more sure that they have a strong claim before bringing what might be an expensive legal action.

Now that these rights are more clearly defined, it’s never been more important to thoroughly understand them. Whether you’re an employee or an employer, how to handle day of rest has been demystified and that’s something to smile about.

The Wage Gap: Women Face Lower Wages than Men Based on Salary History

Aileen Rizo was excited to start her new job as a math consultant for Fresno County schools. After working as a schoolteacher in Arizona for 13 years, she began her new job in 2009 with a $62,733 salary. The salary was based on an automatic system where the County added 5% to the applicant’s previous pay rate.

Three years later, Ms. Rizo discovered during lunch hour conversations that a recent hire in her position was earning $79,000 a year. After asking around, she learned that all her male co-workers in her position were also making more than she was. Ms. Rizo filed suit.

The County argued that the Equal Pay Act creates exemptions based on factors other than sex, including seniority, merit, and quality or quantity of work. Salary history could be another factor added to the list. Ms. Rizo won in the trial court, but the three judge appeals panel on the Ninth Circuit agreed with the County and overturned the lower court’s ruling. Rizo’s attorney is considering an appeal to the Supreme Court.

working womenSalary History Could Make Sexism in Pay Rates Worse

The Ninth Circuit panel’s ruling has been widely criticized as perpetrating institutional sexism.  If women are paid 80 cents for every dollar a man earns, then salary history would only continue that trend. In fact, no matter how qualified the woman, she would never catch up with her male counterpart if the system automatically gave them each 5% per year. In fact, the pay rate difference would actually increase which will create a permanent wage gap.

Below is a chart showing this exact issue (all numbers rounded up). If a man earns $79,000 a year and a woman holding the same position earns $62,733 a year and they both received a 5% increase per year, than the difference between their pay rates would slowly climb up over the years:

Women Annual Income Women Hourly Rate Men Annual Income Men Hourly Rate Difference Between Hourly Rates
$62733

 

$33 $79000 $41 $8/hour
$65870

 

$34 $82950 $43 $9/hour
$69164 $36 $87098 $45 $9/hour
$72622

 

$38 $91453 $48 $10/hour
$76253 $40 $96026 $50 $10/hour

 

However, the County’s argument is a fair one. The County did not enact the discrimination, even if the previous salary history was based on sexism. However, there would be no way for the County to know whether a woman earns less than her male co-workers because of her sex or because she’s not a good worker. Ms. Rizo would be well-served if she compared her salary to her female co-workers as well as her male co-workers.

If every woman holding the same position made less than men working the same position, than there would likely be systemic discrimination, even if the County itself did not enact the discrimination. On the other hand, if Rizo’s income is lower than other women as well as other men, than the issue probably lies with Rizo’s performance or career path rather than her sex.

Removing Human Discretion Does Not Make a System More Fair

The biggest issue with this debate is whether systemic sexism is holding half the population back or whether the system truly promotes individual merit. Regardless of which side of the debate you find yourself in though, there is one point that should be obvious. The County argued that since they give everyone they hire a 5% increase regardless of where they came from, then the system cannot be discriminatory. Everyone is given the same 5% raise and there is no human being who could unfairly discriminate based on inappropriate factors.

This assumption, that automation is fairness, needs to die. Simply giving out a 5% increase does nothing to combat inappropriate discrimination because the discrimination is built into the system itself. If a woman always earns less than men, then giving both sexes the same increase does nothing to resolve the issue. Likewise, even if you believe that increases are appropriate, then such increases would also hold back men who deserve the increase, regardless of the sex of their competition.

In short, automation of a system hurts everyone. One can see the same effect in mandatory minimum sentences in criminal law. By taking away human discretion, the system arbitrarily perpetuates increased sentences rather than treating people more fairly. Americans want to increase fairness and so they remove human input. But if some people’s discretion can be biased against a certain class of persons, discretion can also remove it.

Starbucks is Found Liable for Yet Another Hot Coffee Case

A Jacksonville, FL jury has ordered Starbucks to pay $100,000 to Joanne Mogavero after Mogavero was burned by their coffee. In 2014, Mogavero purchased a 20 ounce Venti cup of coffee through the local Starbucks drive-through. After the cashier handed Mogavero the cup to her, the lid popped off as Mogavero was about to pass the cup to her son. The coffee spilled out and Mogavero was covered in 190 degree coffee. Mogavero visited a plastic surgeon to treat the first and second degree burns to her stomach, thighs, and groin, but the surgeon told her she would have to live with the scars.

After Mogavero filed suit, Starbucks attempted to have the case dismissed by arguing that since Mogavero had already accepted the cup from the cashier and was holding the cup when it spilled, that Starbucks could not liable for the accident. The judge allowed the case to proceed to trial. At trial, a Starbucks representative testified that the company received about 80 complaints a month about pop-off lids.

The jury found Starbucks to be 80% liable for the accident and the remaining 20% to be attributable to Mogavero herself.  The jury awarded $85,000 for the

Starbucks

physical impairment and pain and suffering as well as $15,000 for the plaintiff’s medical bills. Starbucks has denied any wrongdoing and has announced it is planning an appeal.The Evolution of Hot Coffee Cases

The Evolution of Hot Coffee Cases

Arguably the most famous personal injury suit is the 1992McDonalds “hot coffee” case.  In that case, an 80 year old woman received third degree burns after the coffee spilled on her.  Her attorneys were successful in arguing that coffee served at 180-190 degrees was unreasonably dangerous.

Over the decades, other hot coffee spill cases have been brought against large corporations such as McDonalds, In-N-Out, and Starbucks. The latest Starbucks case differs slightly from the original McDonalds case. Although the temperature of the coffee in both cases are the same, 190 degrees, Mogavero’s attorneys chose a different route.

Instead of focusing on the temperature of the coffee, the plaintiff’s attorneys here focused on the pop-off lids that caused the spill. Attorneys and judges prefer to focus on precedent, or prior cases, to argue a successful case. However, this successful departure from the norm will benefit consumers in the long run, as plaintiff lawyers now have more than one tool to strike coffee companies with. Conversely, defendants will have to prepare for this new line of assault.

Corporations Should Stop Using the “Control” Argument

On the defense side though, the arguments are parallel. In 1992 and 2017, the focus for the defense is that the customer had control and the corporation no longer did. Since the customer was holding the coffee cup, it was the customer’s fault and therefore McDonalds/Starbucks cannot be liable.

In both cases though, this argument is severally flawed.  First, most states have adopted comparative negligence, which means that juries can assign liability based on percentage.  Attacking the other side is not a good strategy if, at the end of the day, the company is still stuck with 80% of the bill. It’s less than 100%, but still a substantial amount to pay up.

The second flaw with this approach is that it doesn’t really stop the plaintiff from building up a potential case.  In a negligence suit, the customer must show that 1. the company had a duty to be careful, 2. that the company failed in that duty, 3. that failure caused the customer harm, and 4. the harm resulted in injury to the customer. Arguing that the customer had control and therefore the company is not responsible for its product afterwards would invalidate every defective product case. If a microwave burst into flames on its own accord shortly after a customer purchased it, the company selling the microwave would be potentially liable, regardless of whether the appliance burned in the parking lot or at home.

Both McDonalds and Starbucks relied on a “control” argument to dig themselves out of hot coffee cases. If consumers are adapting and winning, companies should avoid using losing arguments.

College Athletes: Students or Employees?

To describe college athletics as a big business would be an understatement. Each game a college team participates in during March Madness earns the conference the school is out of nearly $2M. Just this year NCAA basketball tournament play alone earned Gonzaga around $8.5M. As of last year, 24 universities were raking in over $100M off college athletics yearly–UCLA just missed the cut with about $97M on the year while Texas A&M made nearly $200M.

With so much money being made off the performances of student athletes, the fact that those athletes are paid nothing and outright forbidden from receiving any money for their performances has long been a hot topic in the courts. Many athletes and legal commentators have described the situation as unfairly designed to allow schools to derive every avenue of profit from a student athlete–merchandising sales, advertising, etc. However, the courts have historically come down against student athletes being compensated in any way.

Just a few weeks ago, a California District Court continued this trend by ruling that a college football player is not an employee of the school he plays for.  In the suit, the player–formerly out of USC–was seeking pay and overtime for the many hours he was required to play and practice. Let’s take a look at his case, the result, and the history of similar cases over the past several years.

College AthletesLamar Dawson’s Lawsuit

Lamar Dawson had played football for the University of Southern California for the entire time he attended the university. This often required him to frequently practice, workout, and play over 40 hours in a week. If he were an employee, spending this sort of time would equate to being paid overtime for his efforts. However, as an amateur athlete he was provided essentially nothing at all. In his lawsuit, he pointed to all this time he spent, and the control USC had over his life and what he could do while remaining a student athlete, and argued that he should be treated as an employee of the school.

Mr. Dawson was suing under the Fair Labor Standards Act (FLSA), a law providing federal guidelines for both minimum wage and overtime pay for employees. However, under the FLSA only employees can recover for a claim of unpaid wages or overtime. Thus, whether Mr. Dawson was an employee or not was the central question of the case. The FLSA describes somebody as an employee where an employer “suffers or permits them to work.”  This is a broad definition, if somebody shows up and starts working and the employer learns about that fact and lets them continue the guy who showed up is probably an employee.

The Ninth Circuit, where this case took place, normally uses a multifactor test to decide whether a given person is an employee. They look at whether the potential employer 1) had the power to hire and fire employees; 2) controlled schedule and conditions of employment; 3) determined the rate of payment; and 4) maintained employment records. They look at this, and other surrounding circumstances, to decide whether somebody was an employee. If this were the test used, Mr. Dawson would have had an interesting case. His school certainly controlled whether or not he could continue as a student athlete and they also restricted his diet, schedule, and many more aspects of his life. However, the court chose to use another test in making their determination–a “true nature of the relationship test.”

This is not unheard of or out of the blue, many courts have rejected the multifactor test where it does not properly map to the situation at hand. The court felt that was the case here. They instead relied heavily on the Seventh Circuit Berger decision from last year–pitting the NCAA and Penn State against a former football player–where the court determined that the athlete was not an employee due to the “long tradition of amateurism in college sports” and the voluntary nature of participating in college athletics. They basically decided that because the athletes go in, of their own volition, expecting not to be paid they can’t be athletes. Using this justification, both courts decided that student athletics is not “work” under the FLSA and the athletes are not employees.

Shifting Landscape on Pay for Play Student Athletes

Despite how his case went, it’s not so surprising that Mr. Dawson chose now to bring his case. It has long been the case that the NCAA rules prohibit college athletes from making money off their play. Whether that is actual pay from a university or the student profiting off their popularity through marketing their name, image, or likeness. However, as student athletics becomes more and more of an earner for universities there has been an accompanying outcry to allow the athletes to have at least a small piece of that pie.

As schools take more and more control over the lives of their athletes and demand more and more of their time–often well over 40 hours a week. A backlash in the courts was inevitable. In 2014, the National Labor Relations Board (NLRB) ruled that due to the immense control Northwestern University was exerting over its athletes–athletes had to ask permission regarding living arrangements, social media posts, food they ate, outside employment, when and where they could drive off-campus, and more–the students in the case were employees. The ruling was short lived, on appeal the NLRB overruled themselves, saying that such a determination “would not promote stability in labor relations.”  However, the appeal still left the door open by saying that subsequent changes in how student athletes are treated could still make an athlete an employee.

Just last year, another case claiming that universities profit off student athletes’ names and likenesses without paying those students led to a decision that the NCAA’s rules disallowing compensation violate anti-trust laws. However, the decision was once again mostly torpedoed on appeal with a court saying that allowing student athletes to profit off their play would remove the distinction between amateur and pro sports. While the appeals court still agreed that selling the names and likenesses of students for TV broadcasts and video games violated the law, they stopped short of allowing actual compensation to student athletes. They instead increased the amount of compensation allowed to include “the full cost of attendance.”  This basically means both tuition and living expenses.

These rulings, while ultimately made much less impactful after appeal, have served to undercut the NCAA’s long-held assertion that the very fact that college athletics is amateur in nature by itself rules out the need for compensation and the potential for these athletes to be treated as employees. This has led to more and more legal challenges, such as Mr. Dawson’s, to how the NCAA handles its student athletes. However, despite these cases indicating a change in the legal landscape, those seeking to change how student athletics is handled face quite an uphill climb.

The Department of Labor operations handbook outright excludes student athletes from the definition of an employee under the FLSA. In California, student athletes have been statutorily barred from receiving workers’ compensation  as non-employees in response to a court case which  ruled otherwise. Student athletes have also been ruled to be excluded from treatment as employees in a number of other contexts–tort law, under the Fair Employment and Housing Act, and more.

While the door has been opened to these types of lawsuits by the changing landscape of collegiate athletics as a big business, there is still a lot of ground to cover before Mr. Dawson will be likely to succeed. His case will certainly be appealed, and that is an appeal to watch, but the state of the law has not shifted so much that his chances are particularly strong.

“Charging Bull” vs. “Fearless Girl”: Could the Battle Move to Court?

The “Fearless Girl” is a statue of a little girl standing, as the name would suggest, fearlessly before the iconic “Charging Bull” of Wall Street. Just recently installed, it sends a powerful message about the power of women in leadership.  However, the sculptor of “Charging Bull” is not so happy about it.

The sculptor of the bull, Arturo Di Modica, is furious over the addition of the statue.  He says that it totally alters the message of his original statue.  While Mr. Modica says he supports gender equality and what the “Fearless Girl” stands for.  He says he always considered the bull-made and put on Wall Street in the 80’s after the stock market crashes-to represent peace.  Mr. Modica believes that the endless faceoff between the bull and the girl ruins the message-turning the bull into a threat against the “Fearless Girl.”  He’s considered turning the bull to face away from the “Fearless Girl” but has not yet done so, implying that he either would sooner have the “Fearless Girl” moved or his agreement with the city does not allow him to move the bull.

While there’s no lawsuit right now, Mr. Modica’s attorneys have been clear that if they can’t reach an agreement with the city they will be happy to sue.  So what exactly would such a lawsuit allege?  Mr. Modica’s attorneys have already been arguing that his intellectual property rights will allow him to see the “Fearless Girl” moved.  However, the case also raises an interesting issue of how moral rights are handled here as opposed to abroad.

charging bullFearless Girl a Derivative Work?

Mr. Modica has copyright and trademark protection on the “Charging Bull”-protecting his rights in his work.  What’s more, his attorneys have already said how they might assert those rights-they’ve called the “Fearless Girl” derivative.  In the art world, this may simply be a mortal insult.  However, in intellectual property law it is a precursor to a copyright infringement claim.  When you possess the copyright in a work, that copyright provides you a bundle of rights which-once registered-you can assert against an infringer in a lawsuit.  One of these rights is the exclusive right to make derivative works.

A derivative work is a work based upon your original work.  That includes adaptations, transformations, modifications and other changes so long as those changes large portions of the original copyrighted work.  In this case, that would mean that “Fearless Girl” incorporates large parts of “Charging Bull.”

In a way, that’s true.  Is the “Fearless Girl” fearless is she isn’t staring down Mr. Modica’s bull?  It could easily be said that the “Fearless Girl” incorporates the entirety of Mr. Modica’s sculpture into itself as part of its standoff.  If the was the end of the discussion, Mr. Modica would be in luck-among the remedies to copyright infringement is the ability to impound and/or destroy any infringing works.  However, there is a big asterisk on the claims of Mr. Modica’s attorneys-the defense of fair use.

Fair use provides a defense to certain limited, transformative uses of a copyrighted work. The defense is extremely fact specific, so much so as to make it nearly impossible to declare something fair use without knowing the exact circumstances of the particular use.  In making the determination, courts balance four quite complicated factors: (1) the purpose and character of the use (was it commercial, educational, transformative?); (2) the nature of the work (eg. fictional v. non-fictional); (3) how much of the work was used and how important was the part used; and (4) how the use effects the market for the copyrighted work.

Here, “Fearless Girl” almost certainly substantially changes the meaning of the work-after all that’s what Mr. Modica is so upset about.  It also creates new understanding of the work by casting what is often considered a symbol of capitalism in a more gendered light.  On the other hand, it doesn’t really parody “Charging Bull,” although it could potentially be argued that it criticizes the bull as an aggressor in the standoff between the two works.

Ultimately, while the arguments do seem to weigh in favor of “Fearless Girl” when it comes to fair use, you can never really be certain.  Fair use often comes down to which judge and jury looks at the facts and there’s definitely an argument here for both sides-perhaps part of why Mr. Modica is preferring negotiation to litigation at this point.

However, if fair use puts an infringement lawsuit out of reach for Mr. Modica, he’ll have to turn to a particularly rarely used area of U.S. intellectual property law-the moral rights of artists.

Moral Rights of an Artist in the U.S.

Turning to moral rights is something that Mr. Modica hasn’t discussed as of yet-probably because the U.S. just barely does them.  While they are a big deal abroad and especially in Europe, the U.S. has barely any moral rights in a work of art at all-instead focusing on economic rights.  In fact, we do so little that some have questioned whether what we have lives up to what we agree to in our international intellectual property treaties such as the Berne Agreement.  What we do have, and what Mr. Modica would turn to is the Visual Artists Rights Act (VARA).

VARA applies only to a very narrow subset of works including paintings, drawings, prints, sculptures and still photographs made for exhibition only where only one copy or a run of no more than 200 copies were made.  California and New York expand these limitations slightly in state law versions of VARA. Either way, under VARA or its New York equivalent, the law would include the one of a kind sculpture “Charging Bull” and give Mr. Modica rights, separate from his copyright, which will last until his copyright expires 70 years after his death (if the bull had been made after 1990 the rights would expire upon Mr. Modica’s death).

These protections allow him to, under VARA, (1) claim authorship, (2) prevent use of his name on something he didn’t make, (3) disclaim ownership of a work that his be changed, mutilated, or modified in a way that would damage his honor or reputation, or (4) prevent distortion, mutilation, or modification to the bull that would prejudice his honor or reputation.  Under New York’s law, he can also prevent public display of the bull if it is altered, defaced, mutilated, or modified in a way that might damage his reputation.  When a work is well known enough, like “Charging Bull” is, its author can also prohibit intentional or grossly negligent destruction of their work.

VARA allows an artist to, along with money damages, seek an injunction or impoundment to prevent the violation of their rights. But, Congress placed a number of exceptions on VARA rights, among these is the fact that VARA rights are still limited by a successful fair use defense.  What’s more, while VARA protects against destruction or alteration, it does not protect the ability of an author to continue creating.  In other words, New York is under no obligation to let Mr. Modica move or alter his statue.

Is Mr. Modica Out of Luck?

It does seem that, unless he can overcome a fair use defense, Mr. Modica is a bit up a creek.  However, although unlikey, there may be further rights Mr. Modica possesses through any contract agreement he made with the city when the bull was commissioned.  Contracts can waive moral rights or expand an artist’s rights-although the rights can’t be given to somebody else.  Generally, any waiver must be signed by the author and in writing to be valid.  Thus, these waivers are common terms in contracts to purchase art.  It seems more likely that any contract left Mr. Modica with less rather than more rights.

We’ll have to see how this develops.  However, at least for the meantime, it seems that the “Fearless Girl” is unlikely to be going anywhere.