California Raises Minimum Wage

On April 4, 2016, Governor Brown signed Senate Bill 3 (SB3).  SB3 will increase the minimum wage annually starting on January 1, 2017 until $15.00 per hour is reached on January 1, 2022 (for employers with 26 employees or more).

For employers with 26 employees or more, here is what the wage schedule looks like:

January 1, 2017 through December 31, 2017: $10.50 per hour; January 1, 2018 though December 31, 2018: $11.00 per hour; January 1, 2019 through December 31, 2019: $12.00 per hour; January 1, 2020 through December 31, 2020: $13.00 per hour; January 1, 2021 through December 31, 2021: $14.00 per hour; January 1, 2022: $15.00 per hour.

For employers with 25 employees or less, the wage schedule will lag behind by a year, so the $15.00 minimum wage will not be reached until January 1, 2023.

 

California Labor Code section 1102.5 Applies To Disclosures Unrelated To Employer's Own Business Activities

In California, employers are prohibited from retaliating against an employee for disclosing a violation of state or federal statute to a government or law enforcement agency. (Cal. Lab. Code section 1102.5.) Generally speaking, these "whistle-blower" claims are in the context of employees complaining about the alleged illegal conduct of his or her employer.

However, the California Court of Appeal recently held in Cardenas v. Fanaian (2015) 240 Cal.App.4th 1167 that Cal. Lab. Code section 1102.5 also protects employees who disclose a violation of law unrelated to the employer's own business activity.

The plaintiff in Cardenas was a dental hygienist who had lost her wedding anniversary ring at the office. For reasons not discussed in the opinion, Cardenas believed that the ring was stolen by a coworker and reported the alleged theft to the police. Shortly after, she was terminated by Dr. Fanaian because the resulting police investigations caused great tension and discomfort among the staff. Cardenas sued under California Labor Code section 1102.5 and wrongful termination in violation of public policy and won by jury trial. The employer appealed, and the Court of Appeal affirmed.

The Court of Appeal based its decision on the plain reading of the statute, where there was no mention that the protection provided by section 1102.5 extended only to reports of unlawfulness concerning an employer's business activities or practices. All Cardenas was required to show was that she reported a violation of law (even on a personal matter) and that she was terminated because of her complaint.

The opinion in Cardenas can be found here.

Prevailing Employers Sued Under FEHA Do Not Recover Costs of Suit As a Matter of Right

In part because eradicating discrimination and retaliation in the workplace is a compelling public policy, the California Fair Employment and Housing Act ("FEHA") motivates employees and their attorneys to pursue their claims under FEHA by awarding the prevailing party "reasonable attorney's fees and costs, including expert witness fees." Cal. Gov't Code section 12965(b). Although prevailing employees will usually recover these fees as a matter of right, prevailing employers must first demonstrate that the employee's case was frivolous, unreasonable, or groundless before being awarded attorney's fees.

In contrast, the prevailing party is generally entitled to the costs of suit. Cal. Code of Civ. Proc. section 1032(b). These costs typically include filing fees, jury fees, and costs of necessary depositions and transcripts, among other things. While attorney's fees are generally far more substantial, litigation costs are not insignificant and can run tens of thousands of dollars. Because costs were awarded as a matter of right, the specter of an award of costs to an employer can motivate an employee to prematurely settle his or her case.  

Recently, however, the California Supreme Court in Williams v. Chino Valley Independent Fire Dist. (2015) 61 Cal.4th 97 held that Cal. Gov't Code section 12965(b) (the fee shifting provision in FEHA) applies not only to fees but governs awards of costs as well. And further, the same standard with respect to attorney's fees applied: prevailing employers may only recover costs in cases when the employee brought or continued the case with no objective basis in believing the suit had merit. The Court noted that "even ordinary litigation costs can be substantial, and the possibility of their assessment could significantly chill the vindication of employees' civil rights."

So what does this mean for plaintiffs? Simply put, this ruling will make it more difficult for employers to use costs of suit as a bargaining chip in settlement. Also, by decreasing the risk that employees face by going to trial on their FEHA claims, hopefully more employees will seek to vindicate their rights.

If you have any questions or you believe that your rights have been violated under FEHA, please contact us today for a free consultation from our San Jose employment law firm.

4 Common Ways of Demonstrating Pretext

What is pretext and why is it important?

What is pretext? The Merriam-Webster Dictionary defines pretext as "a purpose or motive alleged or an appearance assumed in order to cloak the real intention or state of affairs." In the San Jose employment law context, pretext is essentially a false reason given for an adverse employment action that covers up the employers true motives. For example, an employer might tell you that you are being fired because of budget cuts, but in fact you are being fired because you recently asked for a disability accommodation. How do you, as the plaintiff, essentially prove your employer's discriminatory state of mind? 

Under the  framework articulated by the United States Supreme Court case McDonnell-Douglas Corp. v. Green, 411 U.S. 792 (1973), after the plaintiff establishes a prima facie case of discrimination, the burden then shifts to the defendant-employer to articulate a "legitimate, nondiscriminatory reason" for the adverse employment action. The plaintiff is then afforded the opportunity to show that the articulated reason was not the true reason for the adverse employment action, i.e. that the reason is pretextual. By doing so, the plaintiff may be able to show that the defendant-employer did in fact act with discriminatory motive.

As you might imagine, this type of evidence is critical to a successful lawsuit, as employers do not typically state their improper motivation(s) explicitly. Employers will almost always provide a nondiscriminatory reason for the adverse employment action, and thus the plaintiff must attempt to demonstrate that the reason given is unworthy of credence or that unlawful discrimination more likely motivated the employer.

While the ways to prove pretext are often intertwined and there is no single or best way to prove pretext, below are 4 common ways to do so.  

1. False Reason/Implausible Business Justification

Although employers are given wide berth to act irrationally, demonstrating that the "legitimate, nondiscriminatory reason" for the adverse employment action is false/implausible/incoherent may nonetheless allow the reasonable fact finder to infer that the employer did in fact discriminate. Dep't of Fair Employment & Housing v. Lucent Techs, Inc., 642 F.3d 728, 746 (9th Cir. 2011). In other words, if you can show that the reason the employer provides for your termination is false or implausible, the factfinder may be able to make the inference that you were discriminated against.  (After, of course, you've already established your prima facie case of discrimination.)  

As one can imagine, there are near countless ways to demonstrate pretext in this fashion.  Here are some examples to illustrate the point:

  • Max is denied a raise, purportedly because of budget constraints. In actuality there were no budgetary issues and other employees not in Max's protected class were given raises.
  • Jane was told she was being terminated because of "performance issues." However, all of Jane's past monthly performance reviews were stellar and there was no mention of any issues or areas of improvement in any of her reviews.
  • John was told he was being laid off because of over-staffing. But John and other coworkers in his department were working nearly 60 hours a week and the employer was in the process of hiring numerous new employees to help with the workload.

Essentially, if the employer's reason for the adverse employment action leaves you thinking, "That makes no sense and can't be true!" then it is likely evidence of pretext.

2. Shifting Reasons

Related to the above, if an employer shifts or changes its reasons for subjecting an employee to an adverse employment action over the course of litigation, there may be an inference of pretext. Shifting reasons, especially those that contradict and/or develop over the course of litigation to combat the plaintiff's theory of the case hurt the employer's credibility and lead to an inference of discrimination. For example, your termination letter might state that the reason for your termination is "excessive absences" (let's assume the absences were based on your disability) but during litigation the employer claims that you were actually fired for stealing. Fundamentally different justifications for an adverse employment action give rise to genuine issues of fact since they suggest the possibility that the proffered "legitimate nondiscriminatory reason" was not the true reason at all. Washington v. Garrett, 10 F.3d 1421, 1434 (9th Cir. 1993).

There are many different avenues to discover shifting reasons for an adverse employment action: in particular, your counsel should take special note of employer responses to California Employment Development Department and California Department of Fair Employment and Housing inquiries.  These should always be compared to the employer's written discovery responses and deposition testimony for any inconsistencies.  

3. Comparative Evidence

A plaintiff can also raise a triable issue of pretext through comparative evidence that similarly situated employees not in the plaintiff's protected class were treated more favorably. Earl v. Nielsen Media Research, Inc., 658 F.3d 1108, 1113 (9th Cir. 2011). This type of evidence (if you can get it) is strong as it comports with the general public understanding of what discrimination entails--being treated poorly compared to others because of race, sex, religion, age, and other protected classes. 

A classic example of comparative evidence would be a situation where the plaintiff had been terminated for a first-time policy violation that other employees (similarly situated & and not in the same protected class) routinely violate. This, of course, lends an inference that the policy violation wasn't actually the reason for termination. This type of evidence can be the difference maker in a lawsuit and your counsel should always make an attempt to obtain comparative evidence if possible.

4. Timing

Timing is another fairly commonsense way to prove retaliation claims: proximity in time between a protected activity and the adverse employment action can allow a factfinder to infer retaliation. Dawson v. Entek International, 630 F.3d 928 (9th Cir. 2011). The shorter the time frame, the stronger the evidence of pretext. In Dawson, for example, the Court ruled that the two day time frame between the plaintiff's protected complaint and his termination was sufficient to establish pretext and preclude summary judgment. It is important to note, however, that Courts have found pretext even when weeks had elapsed between the protected activity and the adverse employment action. 

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Successfully demonstrating pretext can be extremely complicated and fact intensive, but it is only part of the overall equation. In order to successfully navigate a lawsuit, you'll want an experienced and dedicated advocate by your side each step of the way. If you believe you have been a victim of discrimination or retaliation, please contact us today for a free consultation.

AB 987 Protects Employees From Retaliation For Requesting Reasonable Accommodations

It may come as a surprise, but until very recently requesting a reasonable accommodation for a disability or religious belief was not "protected activity" that would give rise to a retaliation claim under the California Fair Employment and Housing Act ("FEHA").  The California Second District Court of Appeal had ruled in Rope v. Auto-Chlor System of Washington, Inc., (2013) 220 Cal.App.4th 635 that requests for accommodation were not "protected activity" because such requests did not "oppose" an unlawful practice as defined in Cal. Gov. Code section 12940(h).  This decision conflicted with longstanding federal religious and disability discrimination laws that protect an employee's right to request an accommodation.

Fortunately for California employees, on July 16, 2015 Governor Brown signed AB 987, bringing the FEHA into conformity with well established federal law.  AB 987 amends Cal Gov. Code section 12940(l) & (m) and clarifies that employers may not retaliate or otherwise discriminate against employees who make reasonable accommodation requests for their disability or religion.

AB 987 can be found here.

 

Higgins-Williams v. Sutter Medical Foundation: Stress Caused By "Standard Oversight Of Job Performance" Is Not A Disability Under FEHA

In Higgins-Williams v. Sutter Medical Foundation (2015) 237 Cal.App.4th 78, Plaintiff Michaelin Higgins-WIlliams ("Plaintiff") was hired by Defendant Sutter Medical Foundation ("Defendant") as a clinical assistant.  In 2010 she reported to her physician that she was stressed because of interactions at work with human resources and her supervisor and was diagnosed with adjustment disorder with anxiety. 

She was granted a stress-related (disability) leave of absence under the FMLA and CFRA.  Her disabling condition was described as "stress[] when dealing with her Human Resources and her manager."  After Plaintiff exhausted her leave of absence under the FMLA and CFRA she returned to work and immediately received a negative performance evaluation from her supervisor.  The regional manager also began singling Plaintiff out for negative treatment: she was "curt and abrupt" with Plaintiff and gave her a disproportionate amount of work compared to other coworkers.  Later, Plaintiff's supervisor grabbed her arm and yelled at her, causing Plaintiff to suffer a panic attack and take another leave of absence.

Plaintiff thereafter requested, as a reasonable accommodation for her disability, a transfer to a different department so that she could work under a different supervisor and manager.  Plaintiff's physician repeatedly made clear to Defendant that Plaintiff would be able to function without limitation in a different department under a different manager.  Instead of providing Plaintiff with the transfer, Defendant opted to extend Plaintiff's leave of absence and eventually terminated her.

Plaintiff sued, alleging disability discrimination, among other things.  The trial court granted Defendant's motion for summary judgment on all claims, and the Court of Appeal affirmed, holding that Plaintiff did not suffer from a disability as defined by California Fair Employment and Housing Act: "[a]n employee's inability to work under a particular supervisor because of anxiety and stress related to the supervisor's standard oversight of the employee's job performance does not constitute a disability under FEHA."

It is important to note, however, that had the facts of this case been different and Plaintiff been subjected to behavior from her supervisor and manager beyond the "standard oversight" of her performance, she may have been entitled to her requested accommodation.  Therefore, if you are suffering from a stress related disability because of a supervisor, you should still contact an employment attorney to determine if you have a claim.

The opinion is available here.