Tag Archive for 'Employment'

California Supreme Court: Managers Do Not Need to Ensure That Employees Take Breaks

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California has a long history of liberal and progressive politics, particularly when it comes to protecting the rights of employees. And while the state legislature has passed a wide range of laws meant to protect employees, the California Supreme Court has also played a significant role in the development of many employee-friendly policies that California employees often take for granted.

So, a recent ruling from the state’s high court comes as something of a surprise, whether you agree with the ruling or not. The Court held that California employment law does not require employers to make sure that employees actually take the breaks to which they are legally entitled.

It’s important to note that the right of all employees in California to take at least a 30-minute meal break during a standard shift, and their right to two 10-minute breaks for every four hours worked, has not been affected. If an employer were to try and stop an employee from taking their legally-mandated breaks, there would be trouble.

What the state Supreme Court did here was resolve a question that, until now, created some uncertainty for employers. The law was not clear on whether or not employers had to actually order their employees to take the breaks to which they are entitled.

In its ruling, the court essentially says that, while employers are required to offer a minimum amount of break time to their employees, the law cannot dictate what the employees actually do with that time, and if they choose to spend it working, that is their right.

I’m of two minds about this decision. On one hand, I think it leaves the door wide open for abuse, especially of employees who don’t know much about their rights under California employment law. An employer could simply “forget” to inform his or her employees that they’re entitled to breaks, and if they eventually get sued for failing to offer their employees break time, they could simply claim that the employees chose to work through their breaks. And in many cases, it would be difficult to prove otherwise.

Groups that advocate for strong protections for workers are understandably concerned that this ruling could turn into an easily-exploitable loophole in California’s worker protection laws, which are otherwise some of the strongest in the country.

On the other hand, I recognize that it would be impractical for the law to micromanage the behavior of employees on their breaks, and while the law should protect employees, ensuring that they are paid at least a minimum wage, that they have a reasonably safe work environment, and that they have breaks to ensure that they don’t become overly fatigued on the job. All of these protections tend to be good for both employees and employers in the long run. The benefits for the employees are obvious. But for the employers, having healthy employees who aren’t fatigued because they’ve been working non-stop for 10 hours can actually save them money, mostly by reducing the rate at which accidents occur, thereby reducing workers’ compensation expenses.

However, the law cannot accomplish these goals by micromanaging every little detail of how employers implement them. Doing so would be expensive, impractical, and would probably bury employers and employees in unnecessary bureaucracy.

So, how do I feel about the California Supreme Court’s ruling in this case? Honestly, I doubt it will change much for the vast majority of employees. The fact is, the majority of employers in California make a good-faith effort to comply with federal and state employment law, and probably took steps to ensure that their workers took the breaks to which they are legally-entitled.

And it’s important to note that if this ruling has a significant negative impact, with abuses taking place at a much higher rate than expected, the state legislature can always update the law to overrule the Supreme Court on this issue.

After all, in this case, the court was simply interpreting the law passed by the state legislature. If this ruling has unintended effects, or the legislature believes that the court made the wrong decision, they can simply change the law to make it clear that employers are, in fact, required to ensure that their employees actually take their breaks.

However, I doubt that this will prove necessary.

As I said, I think that most employers will not change their practices in response to this ruling.

As long as employers are clear that this ruling does absolutely nothing to compromise the rights of their employees to take breaks, and are certain to inform their employees that they have a right to take breaks, and do not try to stop them from doing so, things should be fine.

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Why The Walmart Sex Discrimination Class Action Lawsuit Is Already Dead

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Is it just me or do you guys out there also cringe at the idea of class action lawsuits?  For some reason, since I was a kid I always thought of them as frivolous suits lacking any credibility.  I think it’s because for me, they play into the whole greedy lawyer stereotype since it always seemed like the huge award judgments always ended up going mostly to the attorneys.  That and what kind of lawyer would ever be altruistic enough to want to sue on behalf of anyone out of the goodness of their hearts simply because they want to correct a wrong?

Well, apparently that’s what the lawyers in the Walmart sex discrimination class action lawsuit are trying to get the US Supreme Court to believe.  Or rather more specifically, they’re just trying to get their foot in the door first.

In case, dear reader, you happen to be like most people and are bored out of your mind by news stories revolving entirely around legal intricacies, let me give you the short version of this Walmart debacle.

Essentially, the big box retailer has been accused by its female employees of discrimination against its women workers.  Among the allegations are that Walmart pays its female employees less compare to males in the same position, denies promotions to qualified female employees, and a host of other gender-based discriminatory employment practices.  Though these same accusations can arguably be applied to all American businesses in general, what sets the Walmart case apart is that the plaintiffs allege the company actively employed these discriminatory practices as part of its regular corporate policies.  That and the number of plaintiffs in this class action suit clocks in at over 1.5 million female employees.

Still not impressed?  What if I told you that if this case is allowed to go forward it would be the biggest class action lawsuit ever and could potentially change how class action lawsuits are litigated?  Still not enough, huh?  How about if I told you it could also mean it would make it a lot easier for you to line your pockets with some green?

Oh, now you’re all interested.  Hmph… Well maybe I suddenly don’t feel like telling you more about this stuff.  Wait, wait, don’t go.  I’m just joking.  Please stay and placate my need for attention…

Anyway, personal abandonment issues aside, if the US Supreme Court certifies the Walmart plaintiffs as a class and allows the lawsuit to go forward, it would be the largest class action lawsuit ever litigated.  The reason this can mean big bucks for everyone else is because it would set a precedent that would make pursuing class action lawsuits much easier. This means that if more lawyers can bring these types of suits for indiscriminately large classes of plaintiff’s, there’s a higher chance that a lot more people can be included in these types of suits and recover some money.

However, the problem is that the Walmart class action lawsuit has no way in hell of going forward.

Why?  It’s not just because the class action is too big.  After all, Federal Rules of Civil Procedure 23, which governs class actions in federal courts, is designed to allow a lot of people to sue as a group regardless of their size.

The issue is getting certified as a class, which is the problem that the Supreme Court is now reviewing for the Walmart case.

Unlike normal lawsuits where one or multiple individuals hire an attorney to sue on their behalf, in class actions a lawyer brings a lawsuit on behalf of a group of people without being hired.  In order to do this however, the plaintiffs must be certified as a class, or in other words, the court must determine that these plaintiffs are all sufficiently similar to each other and suffer similar harm arising from the same defendant.  The legal term for this is that the plaintiffs must be “similarly situated.”

Now, on the surface the plaintiffs in the Walmart case appear to meet this similarly situated requirement since they are all women and claim to have suffered gender discrimination.  However, the way the class action certification process operates is a bit more involved than this because it is designed to narrow down a class using a number of factors.  Without getting too bogged down in each one, the process essentially would split the plaintiffs into smaller groups since not all the female employees are of the same age or employment level.  Thus this seemingly simple class certification process becomes all the more complicated and as it stands cannot go forward.

And though this may sound like a bad thing since it could potentially deprive you of money, it actually isn’t because this precedent would make class action lawsuits way too easy to start and in turn, bog down our justice system in needless litigation.  And we can all agree unnecessary litigation is the bane of our country’s existence, right?

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Yes, You Can Be Fired for Wearing The Wrong Tie

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I’m not much of a sports fan. At best, I could be called a fair weather San Francisco Giants fan (2010 was a good year for my kind). So my puzzlement at the conduct of both parties in this employment dispute is hopefully understandable. I don’t live in the world of sports fans, and I have no idea what motivates some of their conduct.

In a suburb of Chicago, a car salesman was fired for wearing a Green Bay Packers tie on the day the Chicago Bears suffered a bitter defeat at the NFC Championship game, at the hands of the Green Bay Packers, their hated rivals. A sad day for Da Bears, indeed.

Anyway, the car salesman showed up to work wearing a Packers tie. The owner of the dealership, a Bears fan, who had done some promotional work with the Bears before, demanded that the employee remove the tie. The employee said that his grandmother, a lifelong Green Bay fan, had recently passed away, and he was wearing the tie as a showing of respect to her, and refused to remove his tie. He was subsequently fired.

There is some speculation that the employee might take legal action. However, the publicity he’s received has apparently already led to a few job offers from rival car dealerships, so he probably won’t have a lot to gain from a lawsuit. But if he decided to sue for wrongful termination, could he win?

Almost certainly not.

Almost everywhere in the United States, the default employment arrangement is known as “at-will employment.” This means that an employee can be fired for any reason or no reason at all. On the flipside, it also means that the employee can quit with equal impunity. But you’ve probably read about plenty of lawsuits in recent years for “wrongful termination.” If an employer can legally fire a worker for any (or no) reason, how can a legal concept called “wrongful termination” even exist?

As with almost any law, there are exceptions to the “at-will employment” rule. First of all, it’s simply the default rule. If both parties are willing, an employer and employee can enter a contract stating that the employee will be retained for a specific amount of time, and that the employee can only be fired when there is a good reason to do so (and acceptable reasons will usually be listed in the contract).

But the news coverage of this story makes no mention of a special contract between the employer and employee, which might modify the standard at-will arrangement. So, how is there even speculation that the termination was wrongful?

In addition to the right to modify the standard at-will arrangement through contract, the law has imposed exceptions that operate with or without a contract. When there is a lawsuit for wrongful termination, it’s these laws that are often brought up. Under federal law, it’s illegal for employers (public and private) to discriminate on the basis of race, color, national origin, religion, sex, disability, and age. And the federal government takes enforcement of these hard-won civil rights laws very seriously.

Furthermore, some states believe that these federal laws don’t go far enough, and have passed their own anti-discrimination laws. For example, Illinois has made it illegal to discriminate in employment on the basis of sexual orientation, which is still not prohibited under federal law, despite repeated efforts to pass such a law.

Nonetheless, as far as I know, no state has any law that prohibits employment discrimination on the basis of one’s clothing or favorite NFL team. While you or I might argue that this firing was unfair, an overreaction, and a silly decision, the fact remains that it was the employer’s decision to make.

And while I believe that anti-discrimination laws have done a great deal to promote racial and gender equality in the United States, infringement on the hiring decisions of a small number of private employers (after all, the majority of employers, if they’re economically rational, will hire the most qualified applicant for a given job, regardless of race, gender, or any other irrelevant factors) is merely a small and necessary sacrifice.

However, we have laws to establish a bare minimum standard of conduct in a society, and that’s how it remains. I’ve blogged before about our unfortunate tendency to over-legislate in the face of every new problem. The fact is, in a free society, people will be allowed to do some stupid and (arguably) immoral things. That includes, in my view, firing an employee because you don’t like the same football team.

Also, while it seems silly to me, I would not be surprised if wearing a Packers tie might turn off a lot of potential customers in the Chicago area, not to mention the fact that the car dealership was involved in some promotional deals with the Bears. Therefore, wearing that tie could have a direct, negative impact on the business.

While prohibiting discrimination based on immutable characteristics such as race and sex are fine, the government should not interfere with the right of business to make hiring and firing decisions based on the personal choices of employees, even if that choice is not directly related to job performance. This is because, from an economic standpoint, the system of at-will employment, with a basic safety net to ensure that discrimination based on immutable characteristics doesn’t occur, seems to be a pretty good system. Secure in the knowledge that firing an employee who doesn’t work out will be a relatively easy process, employers might be more inclined to take a chance on a new hire.

In countries that don’t have at-will employment, where it is much more difficult to fire employees, unemployment tends to be significantly higher, especially among young, inexperienced workers.

We seem to have struck a decent balance between the two systems, even if it means you might have to think twice about voicing your support for a particular football team while at work.

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States are Finally Getting the Right Idea by Limiting Credit Checks on Job Applicants

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Job applicants bristle at the request for a credit check. There’s always the fear that if you have poor credit, you will be denied the job. Even if you do have good credit, a potential employer looking through your financial history feels like an annoying invasion of some privacy right you’re sure you’re guaranteed somewhere.

Up until recently, employment credit checks were allowed by most states. However, within the last three years, four states have passed laws limiting credit checks on job applicants, and at least 20 other states have bills pending to do the same. There have also been talks in Congress of implementing a federal law to limit employment credit checks.

So what’s the reason for this growing tend? I believe it’s actually been a long time coming, and the recent recession has been the tip of the iceberg pushing it over the edge. Below is my take on some of the major arguments for limiting employment credit checks:

Argument One: “First and foremost, credit checks don’t really reveal an applicant’s ability to do the job well, or reveal an applicant’s likelihood of committing fraud on the company.”

Companies cite impressive figures showing how employee fraud, theft, and lying are real concerns. But this doesn’t make up for the fact that there haven’t been any studies confirming the correlation between poor credit and job performance/company security. In fact, there have been lots of studies confirming just the opposite. If companies are concerned about weeding out these types of applicants, then I agree with many that looking at the criminal record would be a better way to gauge employee behavior.

Furthermore, credit reports are just an amalgamation of numbers, and they don’t give any of the back-story behind the data. What I mean is that often times, applicants will have a very good explanation for their poor credit, yet none of this would be reflected in the credit report. For example, poor credit may not always be due to irresponsible or ignorant behavior. Instead, people may have poor credit due to unfortunate events beyond their control, such as medical debt or a divorce. Yet employers would know none of this if they simply thumbed through the report.

Argument Two: “The recession and economy demands it.”

As I mentioned earlier, I believe the recession was the impetus for many states limiting credit checks. The reasons for this are probably multifold, but they all start out with the idea that now more than ever, many people have poor credit.

This results in credit checks being less helpful than before, as they don’t do as much to differentiate who the “bad guys” versus “good guys” are. Second of all, it’s kind of a Catch-22: if credit checks stop people from getting jobs, then unemployment will cause these people to further worsen their credit. There’s no way to break the cycle, and with the economy going the way it is, we can’t really afford to have so many people veering down this path.

Argument Three: “Laws limiting credit checks are not all-encompassing.”

Granted, this is not really an argument for limiting credit checks, but I thought it was worthwhile to point out how these state laws are actually being executed. These laws show that just because you limit employment credit checks, it doesn’t mean that you have to get rid of them altogether.

Most states limiting employment credit checks have carved out exceptions for job positions that are finance-oriented or demand a greater amount of security. For example, Oregon exempts many banks and credit unions from the limit on credit checks. Illinois, another state limiting employment credit checks, exempts debt collectors, insurance agents, and several government agencies. Thus, the laws are pretty reasonable, and recognize cases where employment credit checks really are necessary.

In conclusion, I understand that for many employers, credit checks are just one piece of the puzzle, and they don’t use it as the definitive factor in evaluating job applicants. (In fact, if they did, it would be illegal, unless the credit check revealed attributes that were critical to the job function). I guess employers are just saying, in a roundabout way, that they don’t have enough information about job applicants, so issuing credit checks helps. But if this is the case, then I think the negative aspects of using credit checks on job applicants outweigh the benefits. As I said earlier, I think that in most cases, credit checks reveal very little useful information about a potential employee.

Employment credit checks have always been one of the more controversial issues in employment background checks, which is already a controversial issue in itself. What is interesting is to see what will happen once the recession is over (which it will end, at some point). Will this trend to limit employment checks keep growing, and will the laws already in place stay once the recession is over?

Perhaps if we lived in a world where almost everyone had perfect credit, and it was only the exceptional person who truly had bad credit, then employment credit checks might actually reveal something useful and make more sense. But as much as I would like to see that day come, I’m pretty sure it won’t be happening anytime soon.

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Is The Minimum Wage Unconstitutional?

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No, and no.Minimum Wage

But, a few candidates (also reported here) for the United States Senate have gone on the record as being of the opinion that it is, despite unambiguous holdings by the U.S. Supreme Court that both state and federal minimum wage laws are perfectly constitutional. The case upholding the federal minimum wage was unanimous, and over the past 70 years or so, under Courts of widely varying political and judicial philosophies, there has been no serious move to overturn either of those cases. Virtually every Supreme Court justice, regardless of their liberal or conservative leanings, views those cases as well-settled law. Even in today’s court, an argument that the minimum wage is unconstitutional is unlikely to fall on sympathetic ears.

I should note that there is some disagreement among economists as to whether or not the minimum wage is good policy, and whether it makes economic sense, but I won’t be discussing that issue here, mainly because I’m not an economist, and this is not an economics blog.

So, what are the possible arguments that the minimum wage is unconstitutional? Well, it boils down to the nature of the federal government, and its constitutional power, compared to the constitutional power of state governments. Basically, the constitution sets up a federal government of enumerated powers. This means that it expressly grants certain powers to the federal government, and denies it the rest. So, in theory, if the federal government does something which it isn’t specifically authorized to do, that’s unconstitutional. Under the 10th Amendment, all other powers not granted to the federal government are granted to the states, unless it specifically prohibits the states from doing something.

So, this means that the federal government can only do that which is expressly permitted. And state governments can do anything which is not expressly forbidden.

Now, if you look through the constitution, you won’t see anything that authorizes the federal government to impose a minimum wage on private employers. So, that’s the end of the debate, right? Not even close. In fact, the federal government does a ton of stuff that isn’t specifically authorized under the constitution. So, what’s the deal?

Many, if not most, of the constitution’s grants of power to the federal government are extremely vague and broad. For example, one of the things Congress is allowed to do is regulated interstate commerce. Unfortunately, the Founding Fathers didn’t see fit to tell us what that means, nor did they think to place a copy of This is What We Meant: A Guide to Constitutional Interpretation from the Authors in the Library of Congress. That would have been nice of them, but alas, it was not to be.

What they did leave us, however, is a Supreme Court whose job it is (among a few other things) to be the final arbiter of what interpretation of the Constitution is the correct one. Since the Great Depression, the Supreme Court has gradually expanded the scope of power granted to the federal government under the Commerce Clause. At this point, it grants the power to regulate virtually any economic activity that might affect something in another state. In this interconnected day and age, that includes basically everything.

With that in mind, there can really be no doubt that establishing a minimum wage is well within the federal government’s power. Some constitutional scholars believe (and their argument is certainly not frivolous) that the Supreme Court has expanded the federal government’s regulatory power far beyond anything that the Founders intended. This may or may not be true, but the fact remains that

I don’t doubt that these Senate candidates are perfectly aware of this fact, and were likely playing to their “Tea Party” base.

But for any employers who want to test the law, they should know that the federal minimum wage is $7.25 per hour (your state may have a higher minimum wage, which you are also bound by), and that LegalMatch case data from the past several months shows that alleged wage and hour violations by employers are still very common. And while these cases might not net plaintiffs a lot of money, typically little more than back wages and possibly attorney’s fees, wage and hour violations are comparatively easier to prove than many of the other common employment causes of action, such as discrimination and harassment.

So, if you’re an employer, and don’t think you should have to pay your employees the minimum wage, you’re certainly entitled to your opinion. And it’s your right to vote for candidates who promise to eliminate or reduce the minimum wage, if you want. But if you decide to make a stand against the minimum wage laws that you view as unjust, prepare to face the likely consequences: a trip to court, a court order requiring you to pay your employees any back pay that they’re owed, their attorney’s fees, and possibly punitive damages.

In the long run, it will probably prove much easier and cheaper to simply pay your employees at least the minimum wage.

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