Practice Areas

MASSIVE STUDY FINDS NO BENEFIT TO “AT WILL” EMPLOYMENT

California presumes that the employment relationship is “at will” which in effect means that unless you have a contract that states otherwise (e.g. belong to a union with a Collective Bargaining Agreement) your employment may be terminated for any lawful reason, or for no reason, by your employer.  See Cal. Labor Code section 2922.  The “at will” presumption is not accidental.  It reflects a deliberate and quite Victorian view of the world.  The theory goes that society a whole prospers when labor markets are flexible.  Therefore, employers must be free to shed workers in downturns and hire them in upturns.  The increasing gap between the very rich and everyone else seems to make this notion suspect.  At the very least, however, one would think that there must be dozens of academic studies that have empirically validated the premise that “at will” employment leads to greater job creation and a more efficient labor force.  Surprisingly, there are no academic studies of any kind that show “at will” employment leads to greater economic growth and/or efficiency than employment with job protection.

Many of the EU countries have employment policies in which an employee cannot be fired after a given period of employment without a showing of “good cause” in a full round of trial like hearings.  (In the U.S. the closest example may be unionized teachers or other Civil Service employees who enjoy much greater protections than the rest of us.)  Britain’s coalition Government recently sought to reduce the job protections that apply in that country.  Before acting, Parliament commissioned an exhaustive study, called the “Beechcroft Review” whose goal was to collect and collate academic studies from around the world.  The Report would show conclusively the effect that “at will” employment had on economic activity and job creation when compared to the more regulated economies of the Continent.

Everybody expected a definitive, massive report detailing the negative effects of job protections on market economies.  Instead, the report, weighing in at 15 pages, meekly concluded that there is no data available that shows any benefit at all to an “at will” employment policy.  The BBC put up a great pod on the issue at: http://www.bbc.co.uk/programmes/b01hxtmp.  The hosts interviewed leading academics from around the world for their view on the benefits of “at will” employment.  The conclusion?  There is likely no benefit at all given the corresponding cost of sudden and severe unemployment.  Simply put, there is no proven benefit to “at will” employment and every reason to believe that it does more harm than good to a society as a whole.

Do not be a misclassified independent contractor

Many employers seek to avoid liability for Payroll taxes, Social Security taxes, Medicare taxes, and the payment of health care benefits by classifying employees as “Independent Contractors” instead of employees. These workers receive 1099 forms instead of W-2’s and generally receive no benefits beyond their hourly rate.
This is bad for the Government and bad for you if you are misclassified as an independent contractor.

Under the tax code, your employer pays half of the social security tax that is due on your wages. As an independent you pay all of it. Although social security may not seem like a heavy tax burden, remember that it is not subject to reduction through credits or deductions; it is a flat tax and you pay 15% of your income (or the applicable rate) as an independent contractor. As an employee, you pay only 7.5%; the employer pays the other half. In addition, the usual benefits of health insurance, dental insurance, etc. that may be available to employees will not be available to you. Self employment has many rewards, but you pay a price to be your own boss. When you are not your own boss and you still pay the price as if you were then it is just unfair.

Starting January 2012, the Legislature enacted an extraordinarily tough new enforcement sanction against the misclassification of employees as independent contractors. Codified at Labor Code Section 226.8, this little known provision imposes a penalty of between $5,000 and $15,000 per violation (one pay period is one violation). If the court or jury determines that the violations are part of a pattern or practice then the penalty imposed is $10,000 to $20,000 for each violation. So, if ten waitresses, for example, are misclassified as contractors the penalty is $200,000 per pay period against the employer. This is effectively a death sentence for the business operation and so a group of misclassified workers have an extraordinary degree of leverage over their employer. The law looks to many factors in deciding whether a person is an employee or an independent contractor. The IRS has a set of criteria and California courts apply what is known as the common law test. In each case the dispositive factor is the degree of control exercised by the boss over the person performing his or her job. Typically, the factors relevant to control include the degree of management and supervision; mandatory schedules; dress codes; direction and choice over the task or work to be performed and how it is to be done. Other factors include the nature of the worker’s task and whether it is part of the general operations of the company. If for example, a law firm hires a paralegal, that is closely related to the practice of law. Someone who repairs the elevators, or patches the roof is in a different line of work entirely and is unlikely to be an employee. Also important is whether you bring your own equipment to work and whether you work at the site of the employer. How you are paid (1099 or W-2) is also a factor that courts weigh in analyzing a worker’s status.

The determination is fact intensive and turns on the specific merits of each case. If you believe that you may be misclassified it may be worth your while to examine the issue closely because the rewards may be substantial if you have been willfully misclassified.

Essential Termination Checklist

Ainley Law provides 5 things that you need to know before you go. Preparing oneself for the event of termination is important if you ever exercise legal recourse. California labor and employment law can be tricky to navigate. Solid preparation by prudent record keeping can be your key to success. The following are KEY PROVISIONS THAT EVERY EMPLOYEE SHOULD TAKE IF THEY BELIEVE THAT THEY MAY BE TERMINATED.

THE ESSENTIAL TERMINATION CHECKLIST

1. Obtain a copy of your personnel file and do so on a regular basis. Think of it as checking your credit: you don’t know who is putting what in that file until you actually
look. Once you leave, that file may be of critical importance to you. Many employees are “evaluated out” of the company and you need to be on top of the contents. This file is likely the first thing that a good Plaintiff’s employment attorney will ask for. Code of Civil Procedure section 1198.5 gives you the right to “inspect” the file at any time whether a lawsuit is pending or not.

2. If medical records are relevant in your matter you should obtain copies of your records from your doctor. Doctors hate to comply with these requests and will usually try and put you off with high prices and long wait times. Cite them to California Health and Safety Code section 123110. This statute requires a health care provider to copy your records for you. They may not charge more than $0.25 a page ($0.50 for x-rays). The records must be given to you within 15 days. If you just want to inspect the records then they must be made available within 5 days.

3. Send a “freeze” letter to your former employer. California law does not require that an employer maintain records (especially electronic records) for any length of time and the
civil discovery act allows the destruction of potential evidence. Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 CA4th at 1414, 1419. You must be particularly careful with electronic records which may simply vaporize.
Always send a “freeze” letter to your employer demanding the preservation of relevant evidence (e.g. sales records, customer lists etc,). This “freeze letter” prevents the destruction of documents, particularly electronic ones. Make dure that you specify that the demand extends to electronic documents in their “native format” with “metadata” intact. This prevents cutting and pasting of documents. If you send this letter, you are far more likely to have relevant documents survive to be used in your case.

4. Prepare a list of witnesses with phone numbers, addresses and emails before you go. This is invaluable to you and to your attorney who may need to corroborate your version of events.

5.Identify key documents; for example, documents in a wage and hour case that prove you have been working late and/or coming in early can be critical to the success of your case. If the company’s policy manual or employee handbook is on line consider preserving a copy to share with –and only with– your counsel.
You may possess key documents necessary for your case where you reasonably fear that they may be destroyed. However, you must share these only with your counsel. Fox Searchlight Pictures v. Paladino (2001) 89 Cal. App. 4th 284. Great care should be exercised in retaining information from an employer. Unless it is critical and likely to be destroyed the prudent course is to consult with your counsel first.

These guidelines should help you when the case iS at its most critical phase:

the beginning.

Joseph Ainley, employment attorney, on Defamation

The Law Offices of Joseph H. Ainley provide services to cover all of your employment-related legal needs. The bulk of our practice is devoted to litigation in cases, for example, where the employee has been wrongfully terminated, or an individual or a group of people have been denied overtime benefits. We also offer employment counsel. Frequently, employees face a situation at work which potentially has profound consequences for them, but they are unsure how best to act. In this context, one issue that is repeatedly of concern is where an employee is offered a severance package in exchange for a release of claims that they employee may have against his or her former employer. In this situation, legal counsel can be invaluable in maximizing the amount of any severance package.  Some of the specific areas in which we are pleased to offer services are the following:

Defamation

The Ainley Law Firm is particularly skilled in defamation, having litigated many cases in which employees have been defamed by management during their employment. An employee may be defamed in one of two ways: by a false statement in writing (libel), and by a false spoken statement (slander). In the employment context, the most common defamatory statement is one which is made in writing. As with other employment-related matters, libel in the employment context is complex and must be pursued carefully with a clear plan of attack. In essence, libel is any false statement in print which has a tendency to injure a person in their occupation or which falsely accuses them of dishonesty. It does not matter whether the statement is phrased as an opinion or as a statement of facts. (Defense lawyers always contend that a statement of opinion cannot be sued upon, only a statement of fact. At Ainley Law, we have succeeded in persuading the courts on every occasion in which the issue has arisen, that a statement of opinion is just as libelous as a statement of fact.) In a case called Jensen v. Hewlett-Packard (1993) 14 Cal. App. 4th 958, the court held that statements in an employeeís performance review could not be libelous because those statements were ìprivileged.î Accordingly, it is important that any claim for libel or slander arise from statements that are made outside the context of a performance review. Recent case law allows plaintiffs to pursue libel claims for false statements made in termination letters, emails, and other documents which are not part of a ìformalî performance review.

Defamation is a powerful weapon because, in most cases, damages are presumed to have been incurred by the plaintiff. That means that a jury is free to award whatever damages it deems appropriate. A defendant, faced with that possibility, has no reliable way to gauge its risk: it all depends upon the jury selected. For that reason, a well-articulated libel or slander claim can be an extremely valuable tool in leveraging the value of a case. However, expertise in the law of defamation in the employment context is hard to find. Even experienced employment attorneys are often unaware of the nuances of defamation. For example, one of the requirements to maintain a claim for defamation is that the statement be published; that is, that the statement be shown to somebody or read by somebody. If the statement is written and then given only to the employee, the defense usually argues that there has been no ìpublicationî for purposes of defamation. However, there is a legal theory called the ìdoctrine of self-publication,î which essentially means that where an employee is given reasons for termination which he or she is likely to have to repeat in a subsequent job interview, then the publication element has been met. At Ainley Law, we always review an employeeís file with great care and, wherever possible, assert claims for libel and slander.

Joseph H Ainley on Overtime Benefits

The Law Offices of Joseph H. Ainley provide services to cover all of your employment-related legal needs. The bulk of our practice is devoted to litigation in cases, for example, where the employee has been wrongfully terminated, or an individual or a group of people have been denied overtime benefits. We also offer employment counsel. Frequently, employees face a situation at work which potentially has profound consequences for them, but they are unsure how best to act. In this context, one issue that is repeatedly of concern is where an employee is offered a severance package in exchange for a release of claims that they employee may have against his or her former employer. In this situation, legal counsel can be invaluable in maximizing the amount of any severance package.  Some of the specific areas in which we are pleased to offer services are the following:

Overtime Benefits

The right to overtime is fundamental in California. Many people erroneously believe that only hourly employees are entitled to overtime. This is not true. The presumption for all employees, whether salaried or hourly employees, is that they are entitled to overtime. Labor Code ß 510 guarantees every employee the right to overtime for hours worked in excess of eight per day or forty per week unless the employee falls into a special exemption from application of that right.

For hourly employees, the right to overtime, in all but a few circumstances (notably, certain highly paid computer professionals), hourly workers are entitled to overtime at the rate of 1.5 times their hourly rate for each hour of overtime worked. With salaried employees, the right to overtime is presumed to exist unless the employee falls within a specific exception. The three primary exceptions are known as the ìmanagerial,î ìadministrative,î and ìprofessionalî exemptions. For each of these exceptions, the law imposes multi-step tests. ____________ employee is exempt from the overtime requirements or is entitled to overtime benefits. The law is construed strongly in favor of the employee. It is the employerís burden to prove that a salaried employee is not entitled to overtime because he or she is exempt as an executive, administrative or professional person.

It is beyond the scope of this brief outline to describe in detail the exemptions. As a general rule, however, the less authority, independence and education you have, the more likely it is that you do not fall within an overtime exemption. Unlike federal law, California imposes a strict quantitative standard for determining the right to overtime. If an employee spends more than 51% of his her time engaged in activities which do not meet the test of exemption, then he or she is entitled to overtime. In all cases, a job description is irrelevant to the determination of overtime. What you do, not what your employer says you will do, determines your right to overtime. Ainley Law has a great deal of experience in this field and has had the good fortune to represent clients on the cutting edge of overtime issues. Overtime is an increasingly important issue in todayís workplace as companies attempt to leverage greater profits from a smaller workforce. As you may have noticed, publicly traded companies are reporting record profits, while the unemployment rate has increased. Healthy companies are laying off employees, and across the board, companies are trying to extract more labor from fewer workers. Inevitably, this has resulted in a dramatic increase in overtime violations. Many people are afraid to step forward and raise the issue for fear of losing their job. Any communication with our law firm, however, is in strictest confidence, and we encourage you to come forward if you believe that you may be entitled to overtime benefits and are not receiving them.

Joseph H. Ainley on Employment Discrimination

The Law Offices of Joseph H. Ainley provide services to cover all of your employment-related legal needs. The bulk of our practice is devoted to litigation in cases, for example, where the employee has been wrongfully terminated, or an individual or a group of people have been denied overtime benefits. We also offer employment counsel. Frequently, employees face a situation at work which potentially has profound consequences for them, but they are unsure how best to act. In this context, one issue that is repeatedly of concern is where an employee is offered a severance package in exchange for a release of claims that they employee may have against his or her former employer. In this situation, legal counsel can be invaluable in maximizing the amount of any severance package. Some of the specific areas in which we are pleased to offer services are the following:

Employment Discrimination

Discrimination in California on grounds of age, sex, race, age, ethnicity, disability or sexual orientation is prohibited by Government Code ßß 12926 and 12940. Each discrimination claim is unique, and whether the claim is provable or not often turns upon specific facts. It is a rare employer who openly acknowledges some form of discrimination, and the evidence of discrimination is therefore evidence from which one must usually infer a discriminatory intent by the employer. For example, an employer rarely tells an employee that he or she is being let go because ìyou are too old.î Instead, the usual process of discrimination is that the employer ìevaluates outî the unwanted employee by generating bogus negative performance reviews.

This discrimination can be combated in several ways. One of the most common means of fighting discrimination is to use statistical evidence to show an imbalance in the employees who are either being let go or who have been hired into the company in the first place. For example, an employment work force which is only 5% female may be suspect if the available work force in the relevant job category is 50% female. Statements that are not directly related to the performance of an employee can be used the discriminatory mindset of the employer. If, for example, a manager makes a general comment about a specific ethnic group, that can be used to show a discriminatory mindset towards that particular group. In cases where there is an event such as illness, extended leave of absence, or pregnancy, the plaintiff can prove his or her case by showing a reasonably close proximity in time between an adverse employment action, such as termination, or a negative performance review and the development of the illness or notification of pregnancy, for example.

In the absence of direct evidence, discrimination claims are rarely easy to prove and require a good deal of skill and effort to overcome the employerís usual claim that it did not discriminate at all, rather, the adverse employment action was merely a neutral business decision. At Ainley Law, we have the resources, skill and experience to successfully prosecute your discrimination claim, be it on grounds of age, race, gender, or other protected group.

Joseph H. Ainley on Pregnancy Discrimination

The Law Offices of Joseph H. Ainley provide services to cover all of your employment-related legal needs.  The bulk of our practice is devoted to litigation in cases, for example, where the employee has been wrongfully terminated, or an individual or a group of people have been denied overtime benefits.  We also offer employment counsel.  Frequently, employees face a situation at work which potentially has profound consequences for them, but they are unsure how best to act.  In this context, one issue that is repeatedly of concern is where an employee is offered a severance package in exchange for a release of claims that they employee may have against his or her former employer.  In this situation, legal counsel can be invaluable in maximizing the amount of any severance package.  Some of the specific areas in which we are pleased to offer services are the following:

Pregnancy Discrimination

A particularly significant subset of discrimination is pregnancy discrimination. We have found that pregnancy discrimination is rampant in many different fields. Employers who pride themselves on egalitarian practices often fall short when it comes to this particular form of discrimination. A software company, for example, that has specific milestones to meet may unhesitatingly fire an employee who announces that she is pregnant and will be taking a temporary leave of absence as guaranteed by statute. All too often, milestones in development schedules take precedence over rights guaranteed by statute. In this particular instance, the event causing the discrimination is apparent: it is the pregnancy. It is therefore relatively easy to demonstrate when an attempt to ìevaluate outî a pregnant employee begins. Our experience with these cases allowed us to compile a database of cases involving pregnancy discrimination which is a very useful tool in litigating this particular type of a case.

Joseph H Ainley, employment attorney, on Retaliation

The Law Offices of Joseph H. Ainley provide services to cover all of your employment-related legal needs. The bulk of our practice is devoted to litigation in cases, for example, where the employee has been wrongfully terminated, or an individual or a group of people have been denied overtime benefits. We also offer employment counsel. Frequently, employees face a situation at work which potentially has profound consequences for them, but they are unsure how best to act. In this context, one issue that is repeatedly of concern is where an employee is offered a severance package in exchange for a release of claims that they employee may have against his or her former employer. In this situation, legal counsel can be invaluable in maximizing the amount of any severance package.  Some of the specific areas in which we are pleased to offer services are the following:

Retaliation

The law prohibits employers from retaliating against employees, by taking any adverse employment action against them, for a wide variety of activities. It is unlawful, for example, for an employer to retaliate against an employee who: (1) reports illegal activity to a government entity (Labor Code ß 1102.5); (2) files a workersí compensation claim or testifies on behalf of a person who files a workersí compensation claim (Labor Code ß 132a); (3) reports suspected illegal activity to their superior; (4) files a claim for discrimination or harassment, or who testifies or otherwise supports a claim of discrimination and/or harassment (Government Code ß 12940); (5) reports unsafe working conditions; (6) complains of or reports overtime or other wage and hour violations; (7) exercises any right permitted by statute; (8) retains legal counsel and/or files administrative complaints or lawsuits against his or her employer.

Broadly stated, an employee has the right to complain of illegal behavior by the employer or conduct by the employer which violates the public policy of California. The public policy of California is generally any policy which is articulated by statute or is otherwise ìclosely tetheredî to a statute or to an otherwise clearly articulated policy of the State of California. Again, identifying the policy at stake and putting together the facts of the case so that the action can be readily identified as retaliatory are tasks that require considerable skill and experience. At Ainley Law, we pride ourselves in having exactly such skill and experience.