Shulman Hodges & Bastian LLP
949-340-3400|949-427-1654

Irvine Business & Commercial Law Blog

Lawson v. ZB, N.A. - The Dispute Over Arbitrability of PAGA Claims Continues

In Lawson v. ZB, N.A., 18 Cal. App. 5th 705 (2017), Plaintiff asserted various wage and hour claims and a California Private Attorneys General Act ("PAGA") claim against Defendant employer seeking penalties and underpaid wages pursuant to Cal. Labor Code § 558. Defendant moved to compel arbitration of Plaintiff's individual claims and her Cal. Labor Code § 558 claim for underpaid wages pursuant to an arbitration agreement whereby Plaintiff waived her right to bring a class or representative action. The trial court granted Defendant's motion pursuant to Esparza v. KS Industries, L.P., 13 Cal. App. 5th 1228 (2017). Plaintiff filed a petition for writ of mandate challenging the trial court's order. 

9th Circuit Holds Minimum Wage Compliance May Be Based on Workweek as a Whole

In Douglas v. Xerox Bus. Servs., LLC, 2017 U.S. App. LEXIS 22967 (9th Cir. Nov. 15, 2017),the Ninth Circuit Court of Appeal considered whether compliance with the Fair Labor Standards Act's ("FLSA") minimum-wage provision should be determined based on the workweek as a whole or each individual hour within the workweek. Under the compensation plan at issue, employees were paid flat and variable rates for certain defined tasks, while other tasks had no specific designated rate. At the end of the workweek, the employer added the amounts earned for the defined tasks and divided the total by the number of hours worked that week. If the resulting hourly wage fell below minimum wage, the employer provided subsidy pay to ensure that, in the context of the workweek as a whole, the employee received the appropriate minimum wage. The employees argued that this payment plan did not comply with the FLSA because there were individual hours within the workweek for which they did not receive the minimum wage. The Court rejected this argument, finding that the relevant unit for determining compliance with the FLSA is the workweek as a whole and, therefore, the employer's practice was permissible.

Employer Alert: SB 396 Expands Harassment Training Requirements

The Fair Employment and Housing Act ("FEHA") currently requires that employers with 50 or more employees provide sexual harassment training to all supervisory employees. This training must first take place within six months of promotion/hire to the supervisory position and must thereafter occur at least once every two years. Effective January 1, 2018, FEHA requires that such training also include training on harassment based on gender identity, gender expression, and sexual orientation.

An Exception to the Exception - The Special Errand Rule

In Morales-Simental v. Genentech, Inc., 2017 Cal. App. LEXIS 915, Plaintiffs and appellants Morales-Simental, et al. appealed from a summary judgment granted in favor of defendant and respondent Genentech, Inc.  Plaintiffs alleged they suffered injuries and sustained damages as a result of the negligence of Vincent Inte Ong, an employee of Genentech Inc., during a vehicle collision.  The issue was whether or not Ong was acting within the scope of his employment at the time of the collision.  The court looked to the doctrine of respondeat superior. 

Ninth Circuit Upholds California Tax Appeals Process as Providing a Plain, Speedy, and Efficient Remedy

In Hyatt v. Yee, the plaintiff disputed the California Franchise Tax Board's ("FTB's") determination that he owed $7.4 million in unpaid taxes for the 1991 and 1992 tax years on the ground that he moved to Nevada in 1991. Under California law, a plaintiff contesting an assessment may not litigate in state court until exhausting administrative remedies set out in Cal. Rev. & Tax Code § 19381. Generally, a plaintiff must first pay the disputed tax before seeking a refund. Cal. Rev. & Tax Code § 19382. Under this "pay-then-protest" scheme, if the FTB does not mail a notice of action on the claim within six months, the plaintiff may sue in state court. Cal. Rev. & Tax Code § 19385. However, if a plaintiff is contesting an assessment solely based on residency, he may instead opt to "protest-then-pay" a tax by seeking reconsideration in front of the FTB, appealing to the State Board of Equalization ("SBE"), and then suing in state court. See Cal. Rev. & Tax Code §§ 19044 & 19381.

Employees May Recover Penalties for Inadvertent Wage Statement Errors Without Any Showing of "Injury"

California Labor Code § 226(a) requires employers to provide accurate, itemized wage statements that show, among other things, gross and net wages earned, total hours worked, all applicable hourly rates, total deductions, the dates of the pay period, and the employee's name and the last four digits of his Social Security number or an employee identification number. § 226(e) entitles an employee bringing suit in his or her individual capacity to recover penalties of up to $4,000, plus attorney's fees and costs if he or she establishes that an employer "knowingly and intentionally" failed to comply with § 226(a) and that he or she suffered "injury" as a result.

Valuation for Cramdown is "Replacement-Value" Not "Foreclosure-Value"

In Sunnyslope Housing Ltd. Partnership, the Ninth Circuit held that for chapter 11 cramdown purposes, the valuation of property need not account for the potential extinguishment of subordinated affordable housing covenants which, if extinguished through foreclosure, would significantly increase the value of the property. As such, the Ninth Circuit allowed the much lower valuation of the property which assumed the covenants were in place and allowed the debtor to value the senior lender's secured claim at a very low number. This allowed the debtor to value the lender's secured claim at a low amount and treat the rest of its claim as unsecured under Bankruptcy Code section 506(a). 

California Corporations - Virtual Shareholder Meetings

A "Virtual Shareholder Meeting" is one in which the shareholders not physically present in person or by proxy participate in a meeting through electronic transmission or electronic video screen. California permits all or partial Virtual Shareholder Meetings, subject to numerous limitations and requirements.

California Fair Pay Act Seeks to Expand and Strengthen California Equal Pay Act of 1949

The California Equal Pay Act of 1949 was enacted to eliminate gender discrimination in the workplace by providing "equal pay for equal work." As of January 1, 2016 the California Fair Play Act amended the EPA taking an even more aggressive approach. The amendment now provides for equal pay for "substantially similar work" regardless of work title or work location. Though "substantially similar work" was not defined in the Act, the California Department of Industrial Relations indicated on their website that it means "work that is similar in skill, effort, responsibility, and performed under the same working conditions."

Americans with Disabilities Act Compliance Update

Starting July 1, 2013 California Civil Code § 1938 requires commercial property owners to disclose in every lease whether or not the property has been inspected by a "Certified Access Specialist" ("CASp"). CASps are individuals certified by California as qualified and knowledgeable regarding construction related access to public accommodations.

Irvine
Shulman Hodges & Bastian LLP
• 100 Spectrum Center Drive, Suite 600 • Irvine, CA 92618
• Local: 949-340-3400 • Fax: 949-340-3000 • Map & Directions
or contact us at 949-427-1654

Riverside
Shulman Hodges & Bastian LLP
• 3550 Vine Street, Suite 210 • Riverside, CA 92507 
• Local: 951-275-9300 • Fax: 951-275-9303 • Map & Directions
or contact us at 949-427-1654

Map