Archive for the 'Employment' Category

California Turns Down Bill That Would Make It Easier To Sue Employers

Thanks to Governor Jerry Brown’s veto of Assembly Bill 465 (A.B. 465), employers in California are permitted to place arbitration agreements in employment contracts without further restrictions. A.B. 465 provided that arbitration agreements, and other waivers of legal rights must be “knowing and voluntary and in writing, and expressly not made as a condition of employment.” The Bill would have also banned mandatory arbitration. Mandatory arbitration requires employees to go to arbitration in the event of an employment dispute instead of taking the matter to court. In short, California employers may continue to enforce arbitration agreements set forth in employment contracts.

What is Arbitration?

Arbitration is an alternative dispute resolution (ADR) method. ARD is a means of resolving conflicts outside of the court system. The two most common forms of ADR are arbitration and mediation.

  • Mediation: Mediation is a process where disputing parties reach a mutual agreement with the help of a third-party mediator. Parties in mediation usually retain significant control over the process. In mediation, the parties in dispute must reach their own agreement; the mediator cannot decide the outcome. The agreement reached by the parties is usually non-binding. Thus, parties may pursue litigation after the conclusion of mediation.
  • Arbitration: Arbitration is a process where a neutral arbitrator (usually a lawyer or a retired judge) make a decision following a hearing. Usually, the arbitrator’s decision is binding and enforceable, unless the parties agree that it is non-binding. Because the decision reached in arbitration is binding, the arbitrating parties cannot litigate the final decision in court, however, awards can be appealed on a very limited basis. If the appeal contesting an arbitration award is successful the arbitration award is voided and the dispute may be litigated in court.

Arbitration is usually initiated when a court orders the parties to arbitrate or there is an applicable arbitration clause related to the dispute. For example, employers may place arbitration clauses in an employment contract that sends employment disputes must be submitted to arbitration.

Arbitration v. Litigation?

Arbitration is frequently a preferred alternative to trial when resolving disputes. Primarily, parties prefer arbitration over litigation because arbitration is a faster process and frequently less expensive than resolving an issue in court. Arbitration is also not part of the public record, unlike court. Thus, if parties want to maintain a degree of confidentiality, arbitration is more ideal.  Arbitration

Since arbitration is usually a more cost effective and confidential method of handling disputes,  employers usually prefer arbitration. If California limits employers ability to arbitration employment law claims, employers could locate elsewhere, which could create a loss of jobs in the state.

Critics of arbitration and supporters of A.B. 465 have largely argued that allowing mandatory arbitration agreements in employment contracts are unfair to employees. A.B. 465, as discussed above, would have limited employers’ ability to place arbitration agreements in their employment contracts.  It appears coercive to mandate that employees with otherwise viable employment law claims must submit their cases to arbitration. Employment attorneys note that frequently employees with viable cases receive far less in arbitration awards than they would have received in a traditional jury trial. Thus, the veto would appear to be a loss for employees in California.

Despite the apparent disadvantage the veto might have for employees, existing law in California already protects employees from seemingly unfair arbitration agreements. Under standard contract law, if an arbitration agreement is unconscionable or overly favorable to the employer, the arbitration agreement will be invalid.  Moreover, California law also requires employers to pay for arbitration should a dispute arise. Thus, employees with disputes have a cost-effective method of resolving employment disputes.

What Does the Veto Mean for California Employers?

Governor Brown’s veto means that employers in California may continue to place mandatory arbitration agreements in employment contracts. Nevertheless, employers must still adhere to California laws regulating arbitration that are already in place.

National Cannabis Bar Association Supports a Growing Number of Marijuana Lawyers

Marijuana is now legal under state law in Colorado, Washington, Alaska, Washington D.C., and, most recently, Oregon. It is also legal for medical use in 23 other states. Businesses that enter the emerging marijuana market stand to make large profits if they produce a good product. The Huffington Post reported in January that estimates say the US market for legal cannabis grew from $1.5 billion in 2013 to $2.7 billion in 2014, a 75% increase. However, participants in this so-called “green rush” also face a confusing legal landscape that involves myriad potential difficulties.

Marijuana has created a rift in the legal field because it is still illegal under federal law. In certain states, it is difficult for marijuana businesses to receive comprehensive legal advice out of concern that lawyers will further illegal activities. The American Bar Association has expressed ambivalence about the legal profession’s involvement in cannabis as well. However, where marijuana law is practiced, lawyers are beginning to tackle complex legal issues.

What is the National Cannabis Bar Association?

In some cannabis-friendly states, the legal profession is embracing marijuana law. As attorneys begin to delve into this area of law, they need to be able to share ideas and to stay up to date with the latest legal advances. Enter the National Cannabis Bar Association, or NCBA, which was founded earlier this year. The simple goal of the NCBA is to “educate and connect with other cannabis industry lawyers for the purpose of providing excellent, ethical, and advanced legal assistance to this growing industry.”  Marijuana Store

The NCBA Board is comprised of a number of firm-based lawyers and solo practitioners who have already embarked on the complex endeavor of representing clients in the marijuana industry. The Executive Director, Shabnam Malek, is a partner in a boutique marijuana law firm, Brand & Branch LLP. She is a specialist in trademark law, a true area of concern for marijuana businesses now. According to her biography, she “also represents clients in disputes, develops worldwide expansion strategies, and negotiates and drafts agreements, including settlement agreements, co-existence agreements, trademark license agreements, and interstate license agreements.” Ms. Malek is the type of lawyer that the marijuana industry may need in 2015— someone with an understanding of several different areas of law, many related to the issues that all modern businesses face.

What are the Legal Needs of the Marijuana Industry?

Meeting a broad demand for a product requires marijuana businesses to seek the same kind of legal advice that any good business would need. In the current climate, the marijuana industry faces new concerns involving corporate, contract, and employment law. As lawyers like Shabnam Malek know, cannabis-related businesses also face intellectual property issues. For instance, a new cannabis cultivar may be patented if it meets certain criteria. And, with the market as lucrative as it is, holding on to a prize variety of marijuana could mean a big difference to a business.

The conflict with federal law also creates certain unique pitfalls in the industry. For example, marijuana businesses have difficulty moving funds through federally regulated banks. Under 2014 federal guidance, banks can now do some transactions with these businesses. However, the banks must still file special reports that show that each marijuana business is following certain procedures. In another example of federal difficulties, businesses may not be able to register certain federal trademarks, based on language in the law that forbids trademarking certain “immoral” or “scandalous” products. This does not mean that nothing is ever trademarked; but this area requires savvy legal advice.

State laws may also create specific obstacles for marijuana businesses. Legalization of marijuana does not always translate into a statewide acceptance of the drug. Local rules and ordinances may place many prohibitions on the distribution of marijuana and other aspects of business. Taxes are often a key rationale for legalization, and so marijuana businesses must comply with specialized state tax schemes designed for their industry. Finally, states that legalized marijuana are in a sense conducting an experiment: the rules are often still evolving and rapidly changing as policymakers grapple with how to implement new laws.

The NCBA will be a welcome voice in dealing with many of the ins and outs of legalized marijuana. The association can help to create best practices for lawyers and policymakers, meeting the goal of ethical and up-to-date understanding of the field. The NCBA will also help businesses conform to the law and ultimately realize the goal of a profitable and well-regulated marijuana industry.

Red Team vs. Blue Team: Minimum Wage

Today’s article is a special two for one: two of our writers debate the merits of raising the minimum wage. Who do you think makes the most convincing argument?

Should the Federal Minimum Wage Rise?

by Alexis Watts

Recently, presidential candidates have discussed raising the Federal Minimum Wage, which is currently set at $7.25 an hour. Bernie Sanders advocates a minimum wage of $15 an hour, which is more than double the figure. Hillary Clinton argues that wages should gradually be raised to $12 an hour. Conservative candidates do not generally favor such high wage hikes, and this may be an issue for debate in the 2016 election.

The US currently has one of the lowest minimum wages of any high-income country. It has had a higher minimum wage in the past. In 1968, the minimum wage was $1.60, the equivalent of $10.34 an hour in current dollars. The US has also had lower minimum wages; in 1938, for example, the minimum wage was 25 cents, the equivalent of only $3.98 today.

So, should the national minimum wage be raised?

What is the Federal Minimum Wage, and who benefits from it?

The Federal Minimum Wage was originally part of the Fair Labor Standards Act (FLSA), passed in 1937. This act also regulated how many hours employees could work without receiving overtime pay. The federal government is authorized to set a minimum wage and make hours regulations because the Constitution gives it broad power to regulate many aspects of commerce in the United States. FLSA benefits many low-wage workers who are paid by the hour. While some characterize these workers as teenagers with no real responsibilities, statistics show that 89% of those who would benefit from a national raise are workers over the age of 20.  Minimum Wage

There are some exceptions to FLSA. Employees who receive tips or work on commission (such as waiters) receive a lower base wage, but employers must make up the difference if their total pay falls below a certain hourly minimum. Domestic and agricultural workers do not benefit from these minimum wage protections. One notable criticism of FLSA is that it leaves out these important workers, who are often from minority groups.

What about State and Local Minimum Wages?

29 states have raised their minimum wage to above $7.25 an hour. Some cities have raised their wages even higher. Berkeley, CA is now contemplating a minimum of $19 an hour. Seattle has already raised its minimum wage to $15 an hour. These high local wages may reflect unique economic conditions. In both the Bay Area and Seattle, the price of rent has been driven higher by an influx of highly paid technology industry employees. However, these cities still need hourly workers like clerks an baristas; they are often the backbone of a rich local cultural scene.

The Minimum Wage Must Properly Reflect Current Economic Needs

In the United States, the minimum wage makes it difficult to afford shelter and other essentials. Purchasing power varies widely from place to place; a dollar buys more housing, food, and other essentials in many rural areas than it would in a major city. However, the National Low-Income Housing Coalition recently issued a study showing that these regional differences still do not allow any minimum wage workers much breathing room. Most financial planners suggest that no more than 30% of a worker’s income go to housing. However, there is no state in which average minimum-wage workers can secure housing using only that portion of their income. An average two-bedroom apartment for a small family would now require a full-time wage of $12.65 an hour in Arkansas and a whopping $28.04 in Washington, D.C. Many low-wage workers have little ability to save or to buy non-essential goods.

While some argue that the minimum wage causes inflation, the reality is that inflation also devalues the minimum wage. The minimum wage does not automatically increase as the price of basic food or housing rises, leaving many individuals who provide important services without the means to earn a living.

If the Minimum Wage is Raised Gradually, it Will Not Increase Unemployment

When the minimum wage is raised, it redistributes some of the country’s entire income from the top (where it is often saved or invested) to the bottom (where it is often spent). Households in the bottom 20% make their income mostly through wages and employment-based tax incentives, and they experience an increase in discretionary income when wages rise. The money these households spend flows into the economy and may allow employers to create new jobs, rather than decrease their staff.

A Department of Labor survey recently showed that 3 out of 5 small business owners support a gradual increase in the minimum wage. This type of an increase would make it possible for business to operate without laying off employees. Department of Labor data also shows that there is no negative effect on unemployment when the minimum wage is raised.

Experiments like the minimum wage hike in Seattle may help to clarify what happens to a local economy when much higher wages are introduced. If the wage increase creates jobs and helps to eliminate poverty, it may prove detractors wrong.


Arguments Against Raising the Federal Minimum Wage

by Sarah K. Lee

Is raising the federal minimum wage all it’s cracked up to be? Although recent presidential candidates have taken a stance for raising the minimum wage in support of more sustainable wages for low-income earners, there are a number of economists who widely disagree. Many economists claim that raising the minimum wage would in fact be detrimental to the economy and the low-income earners such advocates seek to protect. Economists predict raising the minimum wage would result in a steep decline in minimum wage jobs, higher consumer prices for goods, and less entry-level positions for less experienced workers—all of which would negatively impact low-income communities the most.

Increased Unemployment

A number of studies have shown raising the minimum wage results in a loss of jobs due to employers being unable to hire as many minimum wage employees as they would have been able to at lower wages. The Congressional Budget Office predicts a rise in minimum wage from $7.25 to $10.10 would result in a loss of 500,000 jobs across the nation. Supporting that prediction, a study showed the incremental minimum wage increases between 2006 and 2012 resulted in an overall decrease in the national employment-population ratio by 0.7 percent, equating to a loss of

conceptual sign with words minimum wage increase  ahead over blue sky

approximately 1.4 million jobs. Economists argue inflating the minimum wage would actually do more harm than help to low-income communities, those who are purportedly meant to benefit from such a raise.

Higher Consumer Prices

Economists argue hiking the minimum wage could drive businesses to charge more for goods in order to make up for the additional labor costs. This would be particularly detrimental in low-cost, low-wage states where such an increase in prices would affect poor consumers the most. Again, economists argue such an outcome would negatively impact the very target group a raise in the minimum wage seeks to help.

Fewer Positions for Entry-Level Workers

A higher minimum wage could also result in more experienced workers feeling less compelled to move on to higher level positions because the pay at a minimum wage job is adequate. Such a scenario would be bad for less experienced workers, shutting them out from potential entry-level positions. These less experienced workers are primarily made up of teenagers, immigrants, and low-income populations—many who lack the skills to obtain any other type of employment and rely on minimum wage positions to help escalate them to higher paying positions. Economists argue a higher minimum wage could throw off the balance of employment dynamics.

Alternative to Raising the Minimum Wage? Raising the Earned Income Tax Credit (EITC)

Many who oppose raising the minimum wage are not against it for malicious reasons, but rather believe low-income populations can be aided through alternative means without disrupting employment rates. One of the most popular proposals has been to raise the Federal Earned Income Tax Credit (EITC). The EITC is a refundable tax credit calculated based on a recipient’s income and number of children. By increasing the EITC, more money would be afforded to those who are not making enough on wages alone. Advocates of this proposal maintain this change would provide real assistance to those who truly need it, the low-income population, and would not adversely affect employment rates or consumer prices.

Expansion of Paternity Leave

In August of 2015, Netflix and Microsoft announced changes to their paternity leave policies. Netflix announced it will provide unlimited paternity and maternity leave to its employees. The unlimited paternity and maternity leave is for the first year of the child’s life. It applies to births and adoptions.

Microsoft will offer its employees 12 weeks paid paternity leave for mothers and fathers starting in November 2015. Birth mothers will receive an additional eight weeks of maternity leave for a total of 20 weeks.

Fathers Generally Use a Combination of Sick and Vacation Time to Spend with Newborn

Maternity leave, also called pregnancy leave, is typically applies to female employees. Maternity leave is limited time off from work to take care of a newborn child. Paternity leave is also limited time from work, but fathers receive the time to care for a newborn child. Both paternity and maternity leave can be paid or unpaid time off from work. Many fathers who aren’t offered paternity leave at work often use a combination of sick and vacation time to spend with their newborn.

No Federal Policies for Fathers wanting Paternity Leave

Federal law doesn’t require private sector employers to offer paternity or maternity leave. Many companies offer maternity leave, but not paternity leave. Fathers wanting to take time away from work to care for their biological or adopted newborns may have other options. For instance, the federal Family and Medical Leave Act, or FMLA, allows an employee to take 12 weeks of unpaid leave each year for reasons such as the birth of a child or care for a seriously ill family. A new father wanting to use FMLA can do so in a variety of ways:

  • Parental Leave: The leave can be taken during the first year of the child’s life.
  • Intermittent Parental Leave: It can be taken sporadically and with the permission of the employer for the first year of the child’s life. For example, a new father can work part-time for a specific period. This way a new dad can take some time off immediately and leave some or a bulk of it for late.

FMLA Eligible Depends on Number of Employees and Time Worked

FMLA applies to local, state, and federal governments and private employers with more than 50 employees. The employees must work within 75 miles of the company. An employee must work at least 12 months for the employer and work at least 1,200 hours during the prior year.

An employer can’t deny a new father paid leave unless he is in the 10 percent of highest paid wage earners at the company. Another exception occurs if both parents work for the same company. The company is allowed to combine the maternity and paternity leaves. Instead of having up to 24 weeks unpaid leave, the couple has 12 weeks unpaid leave.

State FMLA May Be an Option

For new fathers who aren’t eligible for federal FMLA, the state FMLA may be helpful in getting paternity leave. Only a number of states provide paid paternity leave to new fathers. For instance, new dads in California may receive up to six weeks of paid leave.

State FMLA often differ its federal counterpart. Connecticut FMLA law only requires an employee to work 1,000 hours over a 12-month period to be eligible for unpaid leave. It allows an employee to receive 16 weeks of unpaid leave per 24 months worked. Under Minnesota FMLA law, an employee may receive up to six week leave. It does allow employers and employees to negotiate longer periods on paternity leave.

An employee should check with human resources regarding parental leave. If the company doesn’t offer parental leave, check into both the state and federal FMLA to determine which applies.

Update on “Deflategate”

The New England Patriots played the Pittsburg Steelers for the NFL season opener. Tom Brady played. NFL Commissioner Roger Goodell wasn’t in attendance. Goodell watched the game at home. Were deflated footballs there? We can only wonder.

If you haven’t been keeping up with the latest reality-drama-soap opera scandal called “Deflategate,” here’s the run down. The New England Patriots were accused of letting the air out of footballs used during the game after the 2014 AFC Championship game. The deflated footballs went against league rules.

A league investigation discovered air was let out of the footballs by New England Patriot staff. There was also evidence that Quarterback Tom Brady was more than likely directly or indirectly involved in tampering with the footballs. He was allegedly uncooperative with investigators, to the point of getting rid of his cell phone. Patriots

Brady was suspended four games without pay for the 2015 season. The team was sanctioned. The National Football League Players Association, or NFLPA, appealed Brady’s suspension on May 14. The decision was upheld. The NFLPA filed an injunction to prevent the NFL from enforcing the suspension. The lawsuit was moved to the Southern District of New York.

Brady won. The NFL will appeal on September 3.

Many of Brady supporters claim this wasn’t a showdown between the NFL and Brady, but between Goodell and players. From Ray Rice to Adrian Peterson and Tom Brady, there’s contention over how much power the commissioner has.

The real question may not be whether Goodell has too much power. Instead, the focus should be if the last collective bargaining agreement between the NFL and players gave Goodell too much power.

Collective bargaining refers to negotiations between unions and employers to determine the conditions of employment. When unions and employers agree on terms, they enter into a collective bargaining agreement. The agreement binds the employer to obey certain conditions of employment for a specific timeframe.

Article 46

The commissioner’s current authority comes from Article 46 of the collective bargaining agreement. The Article specifies the commissioner can hand out any punishment which is detrimental to:

  • The integrity of the game
  • Public confidence in the game

It also gave the commissioner permission to hear player appeals on any punishment. In other words, there was a lot of harsh discussion among Brady supporters about Goodell not recusing himself from Brady’s appeal. He wasn’t acting badly or out to get Brady. Goodell was acting within the rights given to him in the collective bargaining agreement.

Abuse of Power or More Players Behaving Badly

Granted, the commissioner’s broad powers haven’t changed since Pet Rozelle held the job in 1969. What has changed since that time is the new personal conduct policy instituted in 2007. Although it seems like a large number, only one to two percent of the NFL players have been punished under this policy. Whether it’s Brady or Peterson, Goodel looks to be using his authority to level suspends and fines. Prior to 2011, many players deemed to be acting badly received fines.

What most may not understand is that Goodell doesn’t have unchecked power. The NFLPA has actually used the language in the collective bargaining agreement to win appeals just like in the Brady case. The last appeal a player won occurred when a former federal judge overruled the indefinite suspension levied on Rice for a domestic violence issue.

Back to Brady

Brady and the Patroits won their season opener for the 2015 season. Will Goodell and the NFL win their appeal? Maybe. Well, if the commissioner can prove Brady needed small balls to win games and coordinated an effort to deflate them. For now it looks like the most interesting game of the football season is happening off the field.