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Attorney’s Letter Did Not Comply With PAGA Notice Requirements

The Ninth Circuit Court of Appeals recently held, in Alcantar v. Hobart Service, that an attorney’s letter did not comply with PAGA notice requirements, and therefore dismissed plaintiff’s PAGA claims.  According to the court, “the letter in which plaintiff disclosed his allegations against the employer did not contain sufficient facts to comply with the statute’s notice requirements.”

PAGA allows an employee to bring an action against an employer to recover civil penalties for violations of the California Labor Code. Cal. Lab. Code § 2699(a). This powerful statute allows plaintiffs to bring claims on behalf of other aggrieved employees, without requiring the employee to follow typical class action protocols.

PAGA Requires Written Notice of Facts and Theories

Shortly after PAGA was passed, the legislature amended the statute to cure perceived abuses of the Act. Before filing a lawsuit, the employee must give “written notice by certified mail to the Labor and Workforce Development Agency and the employer of the specific provisions of [the California Labor Code] alleged to have been violated, including the facts and theories to support the alleged violation.” Cal. Lab. Code § 2699.3(a)(1). This provides the LWDA and the employer an opportunity to review the allegations and determine whether a violation has occurred and to assess the seriousness of the allegations.

Attorney’s Letter Did Not Comply With PAGA Notice Requirements

After Alcantar filed suit seeking compensation for his commute time and for missed meal and rest breaks, the employer argued that the attorney’s letter did not comply with PAGA notice requirements. The court agreed.

Alcantar’s letter contained a series of legal conclusions, but no facts or theories:

Our offices have been retained by Joseluis Alcantara [sic] (Plaintiff). Plaintiff is a former employee of ITW Food Equipment Group, LLC aka Hobart Service (Defendant). Plaintiff contends that Defendant (1) failed to pay wages for all time worked; (2) failed to pay overtime wages for overtime worked; (3) failed to include the extra compensation required by California Labor Code section 1194 in the regular rate of pay when computing overtime compensation, thereby failing to pay Plaintiff and those who earned additional compensation for all overtime wages due; (4) failed to provide accurate wage statements to employees as required by California Labor Code section 226; (5) failed to provide reimbursement for work related expenses as required by Labor Code § 2802; and, (6) failed to provide off-duty meal periods and to pay compensation for work without off-duty meal periods to its California employees in violation of California Labor Code sections 226.7 and 512, and applicable Industrial Welfare Commission orders. Said conduct, in addition to the forgoing, violated each Labor Code section as set forth in California Labor Code section 2699.5.

The court held “[t]he only facts or theories that could be read into this letter are those implied by the claimed violations of specific sections of the California Labor Code…” and determined “[t]his is insufficient.”

Plaintiff’s letter—a string of legal conclusions with no factual allegations or theories of liability to support them—is insufficient to allow the Labor and Workforce Development Agency to intelligently assess the seriousness of the alleged violations. Neither does it provide sufficient information to permit the employer to determine what policies or practices are being complained of so as to know whether to fold or fight.

The court specifically referenced an unpublished opinion, Archila v. KFC U.S. Properties, Inc., 420 F. App’x 667, 669 (9th Cir. 2011), in which the court affirmed a district court’s dismissal of a PAGA claim, observing that “none of the materials Archila submitted to KFC or the LWDA contain ‘facts and theories’ to support his allegations” and the demand letter “merely lists several California Labor Code provisions Archila alleges KFC violated and requests that KFC conduct an investigation.”

Because Archila was unpublished, it carried little if any weight, and employers could not cite to Archila.  Alcantar may have revived Achila.

Employees must provide sufficient facts and theories in their PAGA notices to allow the employer and the LWDA to assess the seriousness of the alleged violations and provide sufficient information to permit the employer to determine what policies or practices are being complained of. Employers should carefully review any PAGA notice to ensure it states the facts and theories upon which the claims are based. If the PAGA notice does not contain sufficient facts to comply with the PAGA notice requirements, the employer may be able to dismiss the PAGA claim.  Alcantar is not entirely binding, however, since it is a Ninth Circuit decision interpreting California law.  We’ll have to wait and see if any California courts follow Alcantar’s reasoning.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Employer Responsible for Attorneys’ Fees After Labor Commissioner Appeal

A California appellate court held an employer responsible for attorneys’ fees after Labor Commissioner appeal.

In Royal Pacific Funding Corporation v. Arneson, the employer appealed a $29,500.00 Labor Commissioner award.  After the employee retained an attorney for the appeal who notified the employer of the employee’s intent to add additional claims to the appeal, the employer dismissed the appeal.

The employee’s attorney filed a motion for attorneys’ fees, which the employer opposed.  The trial court denied all attorneys’ fees “on the theory that there must be a court award under Labor Code section 98.2 before a party can collect its fees.”  The appellate court reversed the decision and ordered the trial court to determine the employee’s reasonable attorneys’ fees.

Attorneys’ Fees After Labor Commissioner Appeal

Attorneys’ fees on appeal from a Labor Commissioner Order, Decision or Award are governed by Labor Code section 98.2, which provides:

If the party seeking review by filing an appeal to the municipal or superior court is unsuccessful in the appeal, the court shall determine the costs and reasonable attorney’s fees incurred by the other parties to the appeal, and assess that amount as a cost upon the party filing the appeal.

In 2003, the legislature amended Labor Code section 98.2 to include the statement, ” An employee is successful if the court awards an amount greater than zero.”

Royal Pacific Funding argued that under Arias v. Kardoulias (2012) 207 Cal.App.4th 1429, the employee cannot recover attorneys’ fees because the court never determined the case on the merits, and therefore the employee was not “successful” on the appeal.  In Arias, the court denied an employer’s attorneys fees when the employer got an appeal dismissed on procedural grounds, because such a procedural dismissal could not be equated with a superior court determination of the merits. According to the appellate court, interpreting 98.2 to require a decision on the merits “turns the basic purpose of the 2003 amendment on its head.”

Employees and employers must think carefully before appealing a California Labor Commissioner decision.  Employees may be allowed to add additional claims on appeal, and the non-successful appellant may be obligated to pay the other side’s attorneys’ fees.  Before you appeal you Labor Commissioner case, contact an experienced attorney familiar with wage and hour claims.

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

New Paid Sick Leave Law Causes Anxiety for Employers

California workers are often faced with a difficult decision: I don’t feel well and I don’t want to go to work where I will get other people sick, but I can’t afford to miss any work. In order to remedy this malady, the California legislature passed AB 1522 creating the Healthy Workplaces, Healthy Families Act of 2014, which requires all employers to provide at least 24 hours of annual paid sick leave to all employees. Unfortunately, the new law was poorly drafted, causing confusion. The Labor Commissioner set up a FAQ page that helped a little, but still didn’t answer important questions.

Just about every employer client I have called me in the weeks leading up July 1st with questions about what they needed to do to comply with the law, and the answers were not always simple. Then, 13 days after employers were required to begin providing paid sick leave, governor Brown signed AB 304 modifying the statute. Although I suspect the purpose of the amendment was to clarify the law, California’s Healthy Workplaces, Healthy Families Act of 2014 leaves the most ardent HR professionals lightheaded.

HEADACHES

For employers that did not previously offer any type of paid time off, the new law seems fairly simple: Employers must provide at least 24 hours of paid sick leave every year. Simple, right? But what about employees working in San Francisco, Oakland, Emeryville, San Diego or any other city that has passed its own local ordinances requiring a hiring amount of paid sick leave?

If a company has employees working in different cities, even if the employees perform as little as two hours per week in one of the cities that has passed its own paid sick leave ordinance, the employer has to either adopt the highest city requirement and apply that across the board, or have different policies for different employees depending on how much time they spend in each different city. Now an employer has different accrual rates and leave caps for different employees. No chance an employer will make a mistake, right?

HOURLY EMPLOYEES

At what rate must employer’s pay out the paid sick leave? For hourly employees, you would assume the hourly rate is the employee’s regular rate of pay. In fact, the original statute defined “Paid sick days” as “time that is compensated at the same wage as the employee normally earns during regular work hours.” Section 246(k) also says, “[t]he rate of pay shall be the employee’s hourly wage.” Simple, right? It was until the legislature amended subsection k.

Now, the employer has three different methods to choose from:

(k) For the purposes of this section, an employer shall calculate paid sick leave using any of the following calculations:
(1) Paid sick time for nonexempt employees shall be calculated in the same manner as the regular rate of pay for the workweek in which the employee uses paid sick time, whether or not the employee actually works overtime in that workweek.
(2) Paid sick time for nonexempt employees shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.
(3) Paid sick time for exempt employees shall be calculated in the same manner as the employer calculates wages for other forms of paid leave time.

You’ll notice that there are two different calculations an employer can choose from for nonexempt employees:

  1. the employee’s regular rate of pay; OR
  2. divide the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the previous 90 days.

What does that second option mean? It’s a bit confusing, so let’s use an example. Alice’s regular rate of pay is $12.00 per hour, and she typically works 50 hours per week—40 regular hours and 50 overtime hours. Her regular weekly paycheck is $660.00 [($12 x 40) + ($18 x 10) = $660].

Under the amended statute, the employer is only supposed to include “full pay periods of the prior 90 days of employment.” Let’s assume Alice is paid every week. That would mean that, at most, there are 12 full pay periods in the 90 days prior to the intended sick leave. So, Alice earned $7,920 in those 12 full pay periods ($660 x 12 = $7,920).

The statute then directs us to divide the employee’s total wages “not including overtime premium pay” by the total hours worked. Alice worked 600 hours in the 12 pay periods (50 per week x 12 weeks = 600). When you divide her total wages not including overtime ($5,760) by her total hours worked (600) her paid sick leave rate would be $9.60—$2.40 less than her regular hourly rate. So, if an employee regularly works overtime, the employer can actually pay less than the employee’s regular hourly rate if the employer chooses to use the (k)(2) method of calculating the paid sick leave rate of pay. Maybe the lower rate under (k)(2) rewards employers that are willing to “do the math,” but I don’t see many employers using this alternative calculation.

I’d give an example of what happens when you pay different rates for shift differentials, but it looks like my calculator has a headache.

COMMISSIONS, SALARIES AND PIECE RATES

But what about employees paid commissions, salaries or on a piece rate basis? Well, for salaried employees, the regular rate of pay is presumably the weekly salary divided by 40, as dictated by Labor Code section 515(d)(2). Employees receiving commissions or paid on a piece rate basis are more complicated. Get out your calculators.

There are typically two types of commissioned employees: inside sales and outside sales. While outside salespeople are exempt from overtime laws, inside sales people are only exempt if they are covered by either wage order 4 or wage order 7, more than 50% of their wages are paid in the form of commissions, AND the employee earns at least 1.5 times the current minimum wage. Although the Paid Sick Leave law has rules for employees exempt from overtime under the administrative, professional and executive exemption, it does not have rules for other exempt employees (some inside sales, outside sales, sheepherders, irrigators, etc.).

The Labor Commissioner says “If an employee is paid commission or piece rate, then divide total compensation for previous 90 calendar days by number of hours worked and pay this rate.” But, do you use the compensation earned or the compensation paid? Commissions are oftentimes earned before they are paid. Hopefully the employer’s commission agreements clearly identify when the commission is earned versus when it is paid, but neither the Labor Commissioner nor the statute answer this question.

For piece rate employees it is a little bit easier, divide the total amount earned in the previous 90 days by the total hours worked. If the employer is reporting the pieces and hours worked on the pay stubs as required by Labor Code section 226, then this shouldn’t be a problem. On the bright side, employers that were not previously tracking hours worked for their piece rate workers have a good excuse to change their policies so they can properly track paid sick leave.

WHAT IS A YEAR?

There are still other decisions that have to be made. What constitutes a year? The law became effective January 1st, but employers were not required to provide the paid sick leave until July 1st. Should the employer use a calendar year? A year based on the employee’s start date? A year beginning when the paid sick leave requirement became effective? Choosing the right “year” alters how the employer tracks accrued paid sick leave.

CAN I USE MY EXISTING PTO POLICY?

Will your existing PTO policy satisfy the requirements? In most cases, no, because most employees typically do not begin accruing paid sick leave on their first day of employment. Although employers can prohibit an employee from using the paid sick leave during the first 90 days of employment, the employee begins accruing the paid sick leave from day 1. Keep in mind, if an employer modifies its PTO policy to allow the employee to begin accruing PTO from day 1, and that employee stops working in the first 90 days, the employer has to pay out the unused PTO. If the employer decides to keep Paid Sick Leave separate from other paid leave, the employer would not have to pay out the Paid Sick Leave upon termination.

In order for a PTO policy to satisfy the Paid Sick Leave requirements, the PTO has to have the same 30:1 accrual rate required by the Health Workplaces, Healthy Families Act. Although an employer can cap the Paid Sick Leave at 48 hours, the 30:1 accrual rate would actually give the employee about 66 hours of Paid Sick Leave in a year (assuming the employee works 40 hours a day, 50 weeks per year). If you have a PTO policy that allows an employee to accrue 48 hours of PTO per year, the accrual rate is actually lower than the 30:1 Paid Sick Leave requirements.

The July 13th amendment provided a small safe harbor. If an employer had a pre-existing PTO policy that allowed the employee to accrue at least 8 hours of PTO within the first 3 months of employment and at least 24 hours of PTO within the first 9 months of employment, the employer can use the existing PTO policy to satisfy the Paid Sick Leave requirements. However, if the employer ever alters the accrual method used in that policy, then the employer has to default to the 30:1 accrual rate. This applies even if the employer provides a more generous PTO accrual rate than it previously provided.

Rob’s prediction? Litigation.

Although I don’t know that the value of a paid sick leave violation claim would justify a single-plaintiff lawsuit, you can bet there are class action attorneys waiting file suit when an employer makes a mistake. Keep in mind that the Health Workplaces, Healthy Families Act of 2014 is part of the Labor Code. That means an employee can sue under the Labor Code Private Attorney General Act (PAGA) and bypass the class action requirements. Even though the individual employee’s recovery may be minimal, even small errors can create significant liability given that the penalties will accrue every pay period for all employees.

BROAD RETALIATION PROVISION

I also predict we will see litigation regarding employers who ask employees for proof that the leave was for a qualifying reason. The Act has a very broad anti-retaliation provision:
An employer shall not deny an employee the right to use accrued sick days, discharge, threaten to discharge, demote, suspend, or in any manner discriminate against an employee for using accrued sick days, attempting to exercise the right to use accrued sick days, filing a complaint with the department or alleging a violation of this article, cooperating in an investigation or prosecution of an alleged violation of this article, or opposing any policy or practice or act that is prohibited by this article

There is a rebuttable presumption of retaliation for a variety of actions, including “if an employer denies an employee the right to use accrued sick days, discharges, threatens to discharge, demotes, suspends, or in any manner discriminates against an employee within 30 days of … (c) [o]pposition by the employee to a policy, practice, or act that is prohibited by this article.”

The Labor Commissioner has told employers that it is illegal to “deny sick leave due to a failure to provide details” regarding the need for the paid sick leave. The Act is silent as to whether an employer can require an employee to provide a doctor’s note for the absence, but the Labor Commissioner seems to be taking the position that if an employer asks an employee for the details of the leave (e.g., “Why do you need to take paid sick leave?”), and the employee refuses to provide the details, the employer must still pay the employee to take the time off work.

To be safe, employers should only ask for doctors’ notes once an employee has used the full 24 hours of paid sick leave.

Employment attorneys helping companies comply with the law have been inundated with phone calls and emails from clients that want to comply with the law. California’s new paid sick leave requirements confuse even the most seasoned HR professionals. I am glad the legislature took a stance on this important issue. Sick workers should not be forced to choose between paying rent or showing up to work where they can get other people sick. The idea behind the statute is good and honorable. Unfortunately, as is often the case, the legislature’s method is blemished.

Having thought this all through, I’m starting to feel a bit queasy myself. I think I need to take a sick day.

 

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The Nuddleman Law Firm, P.C. represents employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Workplace Investigations: When, Who, and How

Workplace investigations occur for several reasons. Some workplace investigations result from an employee complaint of discrimination, harassment claims, or wrongful termination. Others are mandated by regulatory procedures. Others, still, are instituted to improve workplace performance.

Regardless of the purpose of the investigation, how the investigation proceeds and what it entails shapes an employer’s response and can help reduce exposure to legal claims.

While the exact procedures differ based on the company, employees, the alleged conduct involved, and the investigator, there are certain overriding principles common in most investigations. If the investigation is faulty, any response to the complaint may suffer the same defects.

WHEN TO CONDUCT AN INVESTIGATION?

Investigations should occur promptly, to ensure the employer adequately responds to a complaint and to provide the best opportunity to obtain relevant information and preserve potential evidence. Employers must take all complaints seriously, and evaluate the appropriate scope of the investigation so it can take prompt action.  At a minimum, the investigator should interview the complainant, the accused, and all witnesses

In some instances, an employer is obligated to conduct an investigation even in the absence of an employee complaint. For example, if the employer “knows or should have known” of conduct that requires investigation, the employer can be held liable for failing to conduct an investigation.

When contemplating an investigation, the employer must also consider whether to take some form of interim relief pending the results of the investigation. This could include separating the complainant and the alleged perpetrator, suspending the alleged perpetrator, temporarily modifying reporting structures or other appropriate action.  The purpose of interim relief is to ensure no further misconduct occurs before the company has an opportunity to investigate and resolve the situation.

WHO SHOULD CONDUCT THE INVESTIGATION

Several years ago, the California legislature passed a law restricting who could conduct a workplace investigation.  The purpose was to ensure the investigators were properly trained in how to conduct an effective investigation, and to protect employees lodging complaints in the workplace.  If the investigation is conducted by a person who is not employed by the company, the investigator must be a private investigator or a licensed attorney.  Internal investigations (i.e., conducted by an employee of the organization) do have to be conducted by private investigators or attorneys, but the person conducting the investigation should have the necessary skills and objectivity necessary to conduct an effective investigation.

When choosing who will conduct the investigation, start with someone who is objective, skilled, experienced, and with sufficient authority to be credible. Line managers are usually not sufficiently skilled to conduct a thorough investigation.  Additionally, if ultimate decision maker is influenced by others who had retaliatory motives, the investigation is not “independent”.  Many human resources personnel are qualified to conduct an investigation, but a human resources title does not guarantee the person has the training, skill and expertise necessary to do the job right.

A common question is whether an attorney should conduct the investigation.  Sometimes it is a good idea. Other times it is not. Attorneys are often trained in interviewing witnesses and testing credibility.  An attorney with litigation experience will have a better idea of the types of evidence that might be examined if a matter went to trial.  However, have the company’s corporate attorney conduct an investigation can also create a conflict of interests. The investigator will oftentimes be a witness if a matter proceeds to litigation, this could result in an unintentional waiver of the attorney-client privilege. As general rule, including lawyers in an internal investigation does not automatically insulate an investigation from disclosure.

HOW TO CONDUCT AN EFFECTIVE INVESTIGATION

Confidentiality and discretion are cornerstones of an effective investigation. Confidentiality is essential to protect the investigation and to help the participants feel comfortable disclosing information. Investigation records should be kept separate from other corporate or personnel records.

Investigation should be limited to a “need to know” basis. Only individuals who need to be involved in the investigation or in deciding the outcome should be kept apprised of the investigation’s progress.

Investigators cannot promise absolute confidentiality when interviewing witnesses or the complaining employee.  A thorough investigation will necessarily require revealing certain information.  Promising complete confidentiality can hurt the investigator’s ability to conduct an effective investigation.  Instead, the investigator should tell the complainant, the alleged perpetrator and any witnesses that the investigator will keep the information confidential to the extent possible, but will have to disclose certain information in order to conduct a thorough investigation.

If possible, the investigator should avoid using names of the accused and the complainant. Open-ended questions such as, “Have you seen anyone at work touch other employees in a way that made the employee feel uncomfortable?” is a good way to start.  As the interview proceeds, the investigator may get more specific.

Investigators must assume that everything that is said or written in an investigation will be discoverable.  Maintaining accurate notes is essential.

Investigators must also be aware that certain laws protect employees from over-intrusive investigations. The Employee Polygraph Protection Act – The Federal Employee Polygraph Protection Act (“EPPA”), 29 U.S.C.A. 2001 et seq., The Omnibus Crime Control and Safe Streets Act of 1968, 18 U.S.C. §§ 2510-2520 and the Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., are just a few examples.

Investigators must also be cognizant of different tort claims that can arise from an improper investigation.  Claims such as defamation, false imprisonment, invasion of privacy or even intentional infliction of emotional distress must be considered.

FIVE PHASES OF AN EFFECTIVE INVESTIGATION

Investigations typically have 5 phases:

  1. The intake
  2. Creating the investigation pan
  3. Interviews and document review
  4. Evaluating the information
  5. Closing the loop

The intake is usually beginning of any investigation.  It’s where the investigator learns about the complaint or other impetus for the investigation, who the primary participants in the investigation may be, and the scope of the investigation.  It is the foundation of the investigation, and the building blocks for the following stages.

The investigator should then create an investigation plan detailing the likely witnesses to be interviewed and documents to be reviewed. The investigator may have suggestions for interim remedies necessary to preserve the investigation’s integrity or for employee protection.  The investigator must consider who to interview first, where the interviews will take place, and the possible scope of documents to be reviewed.

After an investigation plan is drafted, the investigator will begin interviewing witnesses and reviewing documents. There is no magic formula as to whom should be investigated first and in what order, but most investigators start with the person making the complaint.  The investigator may receive information that reveals other potential witnesses.  Depending on the circumstances, the investigator may want to speak with independent witnesses before interviewing the alleged perpetrator.  In some instances, such as when documents or video evidence reveals the exact nature of the alleged misconduct, additional interviews may be limited. In other circumstances, the number of witnesses may be very high.

After the investigator interviews the witnesses and reviews the relevant documents, the investigator has to evaluate the information.  Investigators should evaluate the credibility of each witness, which may include underlying motivations.  Depending on the scope of the investigation, the investigator may be called asked to render an opinion regarding the conclusions to be drawn from the information obtained. In other circumstances, the investigator presents only the facts and the employer reaches its own conclusions.

Closing the loop is usually the final step an effective investigation.  This is where the investigator, or the employer, reveals the results of the investigation and takes appropriate remedial steps.  The complainant is not necessarily entitled to a full report of each piece of information obtained, but someone should reach out to the complainant and the alleged perpetrator to discuss the end results of the investigation.  This provides finality to investigation process, and enables the parties to determine how to proceed.

Each investigation is unique.  Although there are general underlying principles that apply in most investigations, sometimes an investigation must deviate from the norm.  What is required in any particular instance will be determined by the specific facts and circumstances leading to the investigation.

 

Original article by Robert E. Nuddleman of Nuddleman Law Firm, P.C.

Feel free to suggest topics for the blog. We are happy to consider topics pertaining to general points of Labor and Employment Law, but we cannot answer questions about specific situations or provide legal advice. If you desire legal advice, you should contact an attorney.

Your use of this blog does not create an attorney-client relationship between you and Nuddleman Law Firm, P.C. The use of the Internet or this blog for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be posted in this blog and Nuddleman Law Firm, P.C. cannot guarantee the confidentiality of anything posted to this blog.

The attorneys of Nuddleman Law Firm, P.C. represent employees and businesses throughout Silicon Valley and the greater San Francisco Bay Area including Pleasanton, Oakland, San Ramon, Hayward, Palo Alto, Menlo Park, Mountain View, Los Altos, San Jose, the South Bay Area, Campbell, Los Gatos, Cupertino, Morgan Hill, Gilroy, Sunnyvale, Santa Cruz, Saratoga, and Alameda, San Mateo, Santa Clara, San Benito, Mendocino, and Calaveras counties.

Hiring the Right Attorney

FAQ’s on Hiring the Right Lawyer

When you are considering taking legal action, it’s important to hire the right attorney for you.  It is important to have an attorney you trust, and one that can provide you the services you need.  The following are some answers to common questions my clients have when hiring a lawyer.

How do I find an attorney?

Searching online for an attorney is one method of finding the right attorney, but choosing an attorney solely on the basis of an advertisement is not always the best idea. Talk to friends, family members, colleagues and your network contacts. They oftentimes have positive or negative experience with specific attorneys that can help refine your search or point you in the right direction. Check online reviews (such as avvo.com), but be aware that one person’s experience does not guarantee a similar experience.

What things should I be looking for when I hire an attorney?

Consider your needs. You likely want an attorney with experience area of law in your case.  While you may be able to save some money by hiring a less experienced attorney, it may cost you in the end because the less experienced attorney may take more time to do the work, or may make potentially costly mistakes.

Also consider what you are trying to accomplish.  Do you just want advice, or are you already involved in a lawsuit?  Do you want your attorney to be aggressive, or use other tools to resolve your matter? Do you need someone to take the case on a contingency basis or can you afford to pay legal fees? Being clear about what you want will help you find the right lawyer for you.

How many attorneys should I talk to before I make a decision?

That’s going to depend on what you are looking for, and how quickly it takes for you to find the right attorney for you.  You may have a good feeling about the first attorney you meet, or you may need to continue searching for an attorney that fits the qualifications you are looking for.  If you meet with an attorney, even if it’s not one you are going to hire, ask for referrals to other attorneys.  A responsible lawyer will want you to find the right attorney, even if that’s not the attorney you are currently talking to.

Will I have to give my name and the name of the other side? 

Yes.  Attorneys represent a number of clients, and are required to maintain a list of everyone they have represented so they can make sure there is no conflict of interest.  It’s better to find out if there is a conflict of interest early, and the only way to do that is to provide the attorney with the names of any interested parties.

Can I just prepare a written summary and email that to a bunch of attorneys to see who is interested in my case?

I recommend against it.  Although it may be quicker to send out a mass email to several attorneys at once, you don’t know whether the attorney you are sending your summary to will have a conflict.  What would happen if you send the email to an attorney that represents the other side?

While drafting up a summary of what happened and gathering the relevant documents is a good thing to do, I would not send that to a prospective attorney unless the attorney has asked for it.  If a firm’s website gives you the ability to send the attorney an email, keep the description short.  Rather than describing your case in detail, let the attorney know you’d like to talk with someone about a wrongful termination, or your unpaid wages, or whatever short description fits your situation.  A reputable firm will usually try to respond within one business day.

Why do some attorneys charge for the initial consultation and others don’t?

Attorneys have a variety of ways of handling initial consultations.  Some, like our firm, use the initial consultation to understand your case, analyze your legal and practical issues, and advise you regarding the various options available to you.  We focus on educating our clients so they can make informed decisions about how to proceed. To do it right, this takes time.  An attorney’s skill is reviewing your matter and analyzing your situation based on the law, and creating a solution to your problems.  Much like a doctor will charge you to examine the mole on the back of your neck to determine how to treat it, an attorney may want to charge you for providing the tools of his/her trade.

Is there anything I should do to prepare for the initial consultation?

Prepare a list of questions and, if practical, a short summary of the information you want the attorney to consider.  Even before you contact the attorney, make a list of questions you want answered. That way the attorney can be sure to answer any questions you might have.

It is also important to be extremely candid with the attorney.  Every case has good facts and bad facts.  Some clients don’t want to tell the attorney all the facts, because they are concerned the attorney will be less interested in the case. If you only tell the attorney the good facts, then the attorney cannot do his/her job.  Imagine asking a doctor to give you advice about your child’s cold, but deciding not to tell the doctor that the child has been vomiting and has a fever of 103. Like your doctor, an attorney can better assist you if you tell the attorney everything.

Remember, everything you tell the attorney is confidential.

How does the attorney get paid?

That depends on your agreement with the attorney.  Attorneys will typically work on an hourly basis, a contingency basis or a flat fee basis.  There are other fee alternatives, but those are the most common.  It’s a good idea to ask the attorney up front about the fees.  Even if an attorney charges for the initial consultation, he/she may be willing to represent you on a contingency or other fee basis.

Once you’ve agreed on a fee structure, get it in writing.  Most attorneys have standard fee agreements they use, although the fee agreements will differ from firm to firm.  Read the entire fee agreement, and ask questions about anything you don’t understand.  It’s the attorney’s job to help you understand your legal questions.  Starting the relationship with questions about how the attorney will be compensated could lead to problems down the road.

Private Attorney General Act

Labor Code Private Attorney General Act – L.C. §2698, et seq.

The Labor Code Private Attorney General Act (“PAGA”) enables aggrieved employees to recover civil penalties for violations of the Labor Code on behalf of himself and other aggrieved employees.  If the Labor Code allegedly violated does not set forth a specific civil penalty, the employee can recover a default penalty of up to $100.00 for each aggrieved employee per pay period.

Because a PAGA plaintiff is entitled to prosecute an action on behalf of himself/herself as well as any other aggrieved employee, and because the default penalties can be assessed “per employee” and “per pay period,” PAGA penalties in a modest case can easily exceed $250,000.00. Courts have discretion to lower the penalties if, based on the facts and circumstances of the particular case, to do otherwise would result in an award that is unjust, arbitrary and oppressive, or confiscatory. Although 75% of any PAGA penalties recovered must be paid to the Labor Workforce Development Agency, an employee prosecuting a PAGA claim is entitled to recover his/her attorneys’ fees and costs.  Employers are never able to recover their attorneys’ fees defending a PAGA claim even if successful.

Before filing a PAGA lawsuit, the aggrieved employee must provide written notice by certified mail to the Labor Workforce Development Agency and the employer “of the specific provisions of the code alleged to have been violated, including the facts and theories to support the alleged violation.”  Failure to adequately describe the facts and theories can result in dismissal of the claims.  If the LWDA does not investigate the employee’s claim, the employee can file suit on the alleged violations.  In some situations, an employer may be able to “cure” the alleged violations and avoid penalties.

Recent court decisions make it difficult for an employer to force PAGA plaintiffs into arbitration or other forms of alternative dispute resolution.

Robert Nuddleman has represented aggrieved employees pursuing PAGA claims.  He has also successfully defended employers against lawsuits seeking PAGA penalties.  When the Labor Code Private Attorney General Act was first established, and when it was amended shortly thereafter, Robert Nuddleman was invited by the Labor and Employment Law Section of the State Bar of California to educate other employment attorneys regarding PAGA and its impact on employee-employer litigation.  Robert Nuddleman frequently trains other attorneys regarding pursuing and defending PAGA claims.

If your company has been accused of violating the Labor Code, or if you believe you may have a PAGA claim, contact the Nuddleman Law Firm to learn how to protect your interests.

New Laws Require Overtime for Caregivers, Personal Attendants and Companions

California and federal law requires overtime for caregivers, personal attendants and companions.  Different laws could apply depending on whether the employee is hired by a third-party employer or directly by the home owner.  Robert Nuddleman helps families, care agencies and caregivers understand their respective rights and obligations.

California’s Overtime Requirements for Caregivers

Prior to 2014, persons hired to work in the home to dress, feed and/or supervise a person who cannot care for themselves as a result of age and disability were not entitled to overtime pay.  The Domestic Workers Bill of Rights, which became effective January 1, 2014, eliminated the “personal attendant” exemption from Wage Order 15, which applies to workers employed by the household owner.

Although some employees whose wages are paid by state or county programs (i.e., In-Home Supportive Services, Lanterman Developmental Disabilities Services Act, California Early Intervention Services Act, etc.) are still exempt from California’s overtime laws, most other personal attendants working in the home are entitled to overtime compensation at one and one-half times the employees’ regular rate of pay for all hours worked in excess of 9 hours per day or 45 hours per week.  The overtime obligation applies regardless of whether the worker is employed by the family or a third-party employment agency.  The only exception is if the wages are paid through one of the listed state or county programs or if the person providing the services is the “parent, grandparent, spouse, sibling, child, or legally adopted child of the domestic work employer.”

Federal Overtime Requirements for Companions

Since its inception, the FLSA exempted certain domestic workers (i.e., persons employed about the home).  In 1974, Congress amended the FLSA to include some, but not all, domestic workers.  Companions, sometimes referred to as “elder sitters,” or “personal attendants”, were not covered by the FLSA.  Effective January 1, 2015, new Department of Labor regulations modified the definition of companion and when those workers must be paid overtime.

The revised regulations eliminate the companion exemption for any worker employed by a third-party employer.  This means that if a family uses a third-party agency to provide companion care for a family member, the companion must be paid one and one-half times the employee’s regular rate of pay for any hours worked in excess of 40 hours per week.   Workers employed directly by the family are still exempt from the FLSA’s overtime requirements.

The regulations also narrow the type of work that constitutes “companion” services.  Under the new regulations, the term “companionship services” means “the provision of fellowship and protection for an elderly person or person with an illness, injury, or disability who requires assistance in caring for himself or herself.” Companionship services also includes the provision of “care” if the care is provided “attendant to and in conjunction with the provision of fellowship and protection and if it does not exceed 20 percent of the total hours worked per person and per workweek.”

The FLSA provides the minimum protection, and employers are still required to comply with state laws that either mirror the FLSA or provide greater protections for workers.  The revised FLSA regulations are somewhat historic in that it is one of the only occasions where federal law provides greater protection for the workers than California law.  Because employers are required to comply with state and federal law, many families must now pay overtime when the employee works more than 9 hours in a day (state) or more than 40 hours in a week (federal).

Shortly before the federal regulations were to go into effect, a D.C. circuit court judge declared the regulations void. On August 21, 2015, an appellate court overturned the decision, declaring the regulations valid. The Ninth Circuit and the U.S. Supreme Court have not yet ruled on the issue, therefore it is unclear whether California workers are entitled to the protections provided by the new federal regulations.

The recent changes in California and federal law require many employers and employees employed about the home to renegotiate the terms of employment.  Knowing the lawful ways to employ household workers and understanding employee rights to overtime will enable both parties to negotiate fair and reasonable terms of employment.

Whether the employee is hired directly by the family, through a care agency or a referral agency, and where the services are performed alter the rights and responsibilities of the employee and the employer.  Robert Nuddleman has been representing and advising employers and employees regarding wage and hour obligations for over two decades.  He frequently presents seminars and training regarding domestic worker rights and obligations. If you have questions about your rights or responsibilities, contact Robert Nuddleman.

What is Alternative Dispute Resolution?

What is Alternative Dispute Resolution?

California and federal courts typically require all litigants to conduct some type of Alternative Dispute Resolution (ADR). ADR is a process in which a neutral person helps people who cannot agree, so that they can resolve their case.  ADR is designed to take place as early as possible in the life of a case, to provide an opportunity to settle all or part of the case and keep litigation expense to a minimum.  Parties in a civil case can use a mediator, neutral evaluator, arbitrator, or settlement conference neutral for assistance in resolving a case. In some programs, ADR providers determine their own fee for their services.

Types of Civil ADR available:

Mediation:

Mediation is an informal, confidential, flexible and non-binding process in which the mediator helps the parties to understand the interests of everyone involved, and their practical and legal choices. The mediator helps the parties to:

• Communicate better,

• Explore legal and practical settlement options, and

• Reach an acceptable solution of the problem.

The mediator does not decide the solution to the dispute; the parties do. The mediator does not have the power to force either party to accept any particular result, and does not render a decision regarding who will or who will not prevail in the case.  Rather, the mediator helps the parties facilitate a resolution of the case.

Mediators are allowed to charge for their time. The cost of mediation can vary depending on the mediator and the parties usually split the mediator’s fee. Some mediators charge an hourly rate, and others charge a daily rate.  Some programs offer free mediations in particular situations.

Neutral evaluation

Neutral evaluation, sometimes called “early neutral evaluation” or “ENE”, is an informal process in which the evaluator, an experienced neutral lawyer:

• Hears a compact presentation of the case from both sides,

• Gives a non-binding assessment of the strengths and weaknesses on each side, and

• Predicts the likely outcome.

The evaluator can help parties to identify issues, prepare stipulations, and draft discovery plans. The parties may use the evaluation to discuss settlement. Evaluators are allowed to charge for their time.

Like mediation, the evaluator does not have the authority to decide who wins or loses the case.  The evaluator discusses the strengths and weaknesses of the parties’ case and can offer his/her opinion as to the likelihood of prevailing.  Oftentimes, ENE will lead to settlement discussions after the parties receive feedback regarding the merits and weaknesses of their claims and defenses.

The court oftentimes provides free ENE services, but the parties can also hire a private evaluator.

Private Arbitration

Arbitration is less formal than a trial. The arbitrator:

• Hears the evidence and arguments of the parties, and then

• Makes a written decision.

The parties can agree to binding or non-binding arbitration:

• In binding arbitration the arbitrator’s decision is final and completely resolves the case, without the opportunity for appeal.

• In non-binding arbitration, the arbitrator’s decision could resolve the case, without the opportunity of appeal, unless a party timely rejects the arbitrator’s decision within 30 days and requests a trial.

Many private arbitrations are BINDING; if there is an arbitration clause in a contract, that clause may state whether or not arbitration will be binding.

Some agreements require arbitration before or in lieu of filing a lawsuit.

Civil Judge ADR

The Civil Judges ADR program allows parties to have a mediation or settlement conference with an experienced judge of the Superior Court.

Judicially supervised mediation is an informal, confidential, flexible and non-binding process in which the judge helps the parties to understand the interests of everyone involved, and their practical and legal choices, and to hopefully resolve their disputes.

A settlement conference is an informal process in which the judge:

• Meets with the parties or their attorneys,

• Hears the facts of the dispute,

• Helps identify issues to be resolved, and

• Normally suggests a resolution that the parties may accept or use as a basis for further negotiations.

Judicial Arbitration

Judicial Arbitration is like a trial, but it is less formal and there is no jury. Each side presents its case to an arbitrator. The arbitrator is either a lawyer or a retired judge, and does not take sides or give advice.

Judicial arbitration is usually free for the parties. (If your arbitration takes more than 5 hours, the arbitrator may charge you a fee, but most arbitrations take 3 hours or less.) The parties can agree to binding or non-binding arbitration:

• In binding arbitration the arbitrator’s decision is final and completely resolves the case, without the opportunity for appeal.

• In non-binding arbitration, the arbitrator’s decision could resolve the case, without the opportunity of appeal, unless a party timely rejects the arbitrator’s decision within 30 days and requests a trial.

If the parties cannot agree on a particular form of ADR, the court’s default ADR process is non-binding judicial arbitration. If the parties use non-binding judicial arbitration, then oftentimes the losing party will simply reject the arbitrator’s decision. Although this can effect the recovery of costs should the matter proceed to litigation, it does not necessarily facilitate a resolution of the claims.

Civil Early Settlement Conference

A settlement conference is an information process in which the neutral (a judge or an experienced attorney):

• Meets with the parties or their attorneys,

• Hears the facts of the dispute,

• Helps identify issues to be resolved, and

• Normally suggests a resolution that the parties may accept or use as a basis for further negotiations.

Some courts offer this service at no additional charge.

When is the right time to engage in ADR?

That depends on a number of factors.  Sometimes early ADR efforts can help the parties resolve their differences without litigation, or early in the litigation process.  Early ADR may allow the parties to resolve their differences without incurring substantial costs and before the parties become too entrenched in their positions.  If ADR occurs too early, the parties may not have sufficient time to develop the evidence and therefore may make incorrect assumptions about what the evidence will or will not show.  The inability to examine the evidence that will come out at trial may help the parties resolve their case, but it can also cause one side or the other to over-value the strengths of their position.

Given the significant costs of litigating a case, the Nuddleman Law Firm believes exploring ADR options early makes sense for most clients, but early ADR is not appropriate for every case.  If one side or the other is too entrenched in their position or has an unrealistic expectation of what will occur during the litigation, the parties may need to litigate the case until their positions become clearer or they have a better understanding of what may happen at trial.