Articles Posted in Business Litigation

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The Employee Retirement Income Security Act, or ERISA, is designed to protect the interests of employees who are benefit plan participants. It does this by guarding retirement savings plans from mismanagement. ERISA also ensures that the individuals who are charged with overseeing the plan act in the best interests of the participants.

ERISA-206785026_XS-e1565728450304However, some of these plans are exempted from ERISA oversight. This includes so-called “church plans.” Under this exemption, employee benefit plans for church employees are not subject to ERISA’s minimum standards. However, it isn’t always entirely clear which plans are exempted and which are not. This is true of hospitals that are associated with a religion.

Dignity Health is a healthcare conglomerate that operates in numerous states. It administrates the Dignity Health Pension Plan for its 80,000 employees. Moreover, Dignity Health is associated with the Catholic Church.

Starla Rollins was employed by Dignity from 1986 to 2012, during which time she participated in the Dignity Plan. Rollins and other plan participants sued Dignity under ERISA because it was underfunded. When the complaint was filed, the plan had only enough assets to pay 75 percent of their obligations.

Dignity Health is arguing that their plan isn’t subject to ERISA oversight because it is a church plan. Over the last several years, the Catholic Church has taken over multiple hospitals and other healthcare facilities. Catholic hospitals earn billions of dollars in revenue each year and also receive billions in taxpayer dollars.

However, it is unclear whether or not employees of Dignity Health actually qualify as church employees. Instead, the plaintiffs are arguing that they are the secular employees of a secular health care organization that provides its services through the distant oversight of the Catholic Church.

Rollins’ lawsuit raises a Constitutional objection to the exemption for church plans. This is because Dignity Health has chosen to compete in an industry with other commercial businesses. Thanks to the exemption, Dignity does not have to meet certain costly legal requirements. The outcome of this case may change the way these exemptions are applied to other hospital organizations that are affiliated with religions.

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Women who participated in a massive, decade-long legal battle against the makers of mesh implants are now suing the attorneys who helped them to obtain settlements in those cases.

on-brass-scale-32746330-001The women accuse their former lawyers of unjustly enriching themselves by charging attorneys’ fees that amount to 44 percent of the settlements rather than the 33 percent limit that’s imposed by state law. In another case, women accuse their former attorneys of stretching themselves too thin to provide adequate representation. They claim that court filing deadlines were missed, making it necessary for them to settle with the makers of the pelvic mesh out of court. Those settlements were far less substantial than the ones obtained through litigation.

Each of these suits, which were filed in New Jersey and Texas, is being brought against personal injury firms. Among the claims are negligence and breach of fiduciary duty. This follows on the heels of one of the largest tort cases in American history.

The pelvic mesh lawsuits were brought against half-a-dozen medical manufacturers like Johnson & Johnson and Boston Scientific. In excess of 100,000 plaintiffs have participated in such lawsuits, stemming from the implantation of pelvic mesh, a treatment that is supposed to treat pelvic prolapse.

However, women who underwent the surgery suffered side effects like painful sex, bleeding and uncontrollable urination. The manufacturers agreed to pay billions of dollars in settlements and to stop making the pelvic mesh.

Despite being awarded decisions and settlements worth millions or billions of dollars, many of the plaintiffs in these cases were only promised about $60,000 before legal fees and costs, an amount that they say is not enough to cover their ongoing medical expenses.

While defendants in the new lawsuit have called it “pure nonsense,” attorneys for the plaintiffs say that meeting deadlines for court filings is a basic responsibility of every lawyer. Some legal experts note that the new litigation may even shine a helpful light on a process that gets little oversight from the courts: Administering settlements in mass tort cases to ensure that the process is conducted in accordance with the law.

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Fireworks%2039914849-001.jpgThe team at Sylvester, Oppenheim & Linde and the California Business Litigation blog  wish all of our clients, friends, business associates and blog readers a very safe and extremely fun 4th of July Holiday!

In observance of Independence Day our office will be closed  July 4th.

Enjoy your holiday, stay cool and keep your pets indoors!

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When a new mother returns to the workplace, certain sections of the Fair Labor Standards Act, or FLSA, continue to grant her special protections. Employers that fail to observe these protections may find themselves subject to a costly lawsuit.

Legal-Fees-PaidSuch is the case with the City of Tucson. A recent federal trial court jury’s decision found in favor of a plaintiff to the tune of $3.8 million. The plaintiff, Carrie Clark, was employed by the City of Tucson as a paramedic. Upon returning from maternity leave, Clark needed to be able to express breast milk throughout the day. However, the city assigned her to fire stations that lacked appropriate facilities for meeting this need.

Under Section 7(r) of the FLSA, employers are required to provide break time for nursing mothers to express breast milk. This accommodation must be made for up to a period of one year after the child’s birth. Moreover, employers are required to provide a private, hygienic place, which is not a bathroom, in which the mother can express breast milk away from curious eyes.

The law does not require that employers pay employees for this break time. However, if compensation is provided for such break periods, then it must be paid to the worker.

Section 7(r) is not the most well-known component of the FLSA. Nonetheless, the City of Tucson may now be wishing that they had been more aware of their responsibilities under the law. The jury found that the city appeared to exacerbate the situation by retaliating against Clark when she made repeated requests for adequate accommodations for expressing breast milk.

The April 2019 jury decision found in favor of the plaintiff on all counts. According to the decision, Clark was discriminated against for a pregnancy-related condition. Additionally, because her employer required her to take leave so that she could express breast milk in private and punished her for allegedly “not being in harmony with others,” Clark was awarded further damages.

This case is a stark reminder for employers everywhere to be aware of all facets of FLSA, discrimination and anti-retaliation laws.

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One of the questions I hear frequently is about whether we are accepting new clients.

While the short answer is “Yes”, here is some additional information which many people find interesting.

Great%20Fit%20Gears%2039896521-001.jpgOur law firm, Sylvester Oppenheim & Linde is committed to client service and quality legal representation for each and every client. That means that we only accept clients who we feel are a good match for our expertise, experience and areas of practice.

I learned a long time ago that we can’t be all things to all clients, but we can be all things to some clients: and those are the ones we welcome and serve in an exemplary manner.

The purpose of this blog is to provide helpful information to anyone who reads it. On our website, you will find another example of our “Be of Service” mind-set by reading our Home Page Article “Eleven Questions to ask BEFORE Hiring a Business Attorney“. You will also find a list of our practice areas on that page.

Our clients tell us that they appreciate our honesty, accessibility and guidance. And we appreciate our clients.

Back to the question. The answer is: “Yes, we are always looking for one or two new good clients.” If you have a legal issue, I invite you to call and let’s find out whether we are a great fit for each other. I can be reached at 818-461-8500 or via the Contact form on this page.

Richard Oppenheim

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Mike Hestrin, a district attorney in Riverside County, California, recently filed a civil lawsuit against two law firms and at least five individuals. The lawsuit claims that the defendants violated the state’s unfair competition laws by pursuing dozens of lawsuits against businesses within the county.

ADA-138029727-001In the complaint, the plaintiffs detail a “shakedown” in which the attorneys and a plaintiff who is not an attorney pursued more than 100 lawsuits against small business owners in Riverside County. Each lawsuit accused the defendant of violations of the Americans with Disabilities Act, or ADA. According to the district attorney, the lawyers targeted certain small businesses, making misrepresentations in court filings that were designed to elicit a financial settlement from the defendants.

The defendants in the new Riverside County lawsuit include attorneys Babak Hashemi, Joseph Manning Jr., Michael Manning and Craig Cote. James Rutherford, who served as the plaintiff in many of the ADA lawsuits, also is named as a defendant in the lawsuit. In fact, court records indicate that Rutherford has been named as a plaintiff in at least 200 separate ADA-related lawsuits. These civil actions have been filed against small businesses and individuals in Los Angeles, San Bernardino, San Diego and Orange counties.

Defense attorney David Darnell has taken on representation of the defendants in the district attorney’s action. He says that the lawsuit “is completely misguided and without any merit.” Moreover, he argues that “those corporations that were sued did violate the act, and they settled or tried to settle the cases.”

The district attorney’s office states that it “fully supports accessibility rights for disabled persons” and that “the ADA laws are designed to help and protect disabled persons.” However, the office argues that the defendants in the lawsuit acted for the “purpose of illegitimate financial gain” rather than a disinterested effort to ensure compliance with the ADA.

Darnell argues that the district attorney’s case “is an attack on the ADA” because “this is a law they don’t like.” Moreover, he believes that “a reasonable judge” will immediately see their point of view and decide the case in their favor.

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A recent decision by the Supreme Court of California declares that workers don’t have the right to sue a payroll company with which their employer has a contract. This ruling is a reversal of a decision in a lower court. If that decision had been affirmed, employees would have been empowered to sue payroll companies for tort and breach of contract claims.

Timeclock-45269690-001The case was Goonewardene v. ADP. Plaintiff Sharmalee Goonewardene sued her employer over unpaid wages. Later, her complaint was amended to include Automatic Data Processing, or ADP, which has a contract with her employer for payroll services. Goonewardene alleged that ADP had violated wage orders and the California Labor Code, effectively asserting that she was a joint employee of her employer and ADP.

Goonewardene accused ADP of negligent misrepresentation, professional negligence and breach of contract. However, a trial court dismissed these claims. Goonewardene appealed, and the appeals court decided that she didn’t have the right to sue ADP under the California Labor Code. Nonetheless, the court found that she could sue ADP for other claims such as breach of contract and negligence because she was a third-party beneficiary of the contract between her workplace and ADP. This appeals court opinion made it possible for workers across the state to jointly sue their employer and their employer’s payroll processor.

The Supreme Court of California was called upon to review the case. This court disagreed that the plaintiff was a third-party beneficiary of the contract. The decision was based on the theory that any employer’s agreement with a company like ADP is for their benefit rather than the benefit of employees. Moreover, imposing liability on a payroll services company was judged to be against the expectation of the two parties to the contract.

With this Supreme Court decision, it is clear that a payroll company is not a joint employer with its clients, nor does such a company owe a duty of care to the employees of clients. This is likely to minimize the number of lawsuits that would have proliferated if the appeals court decision had been sustained.

If you are an California employer or business owner with questions about any legal issue feel free to contact me, attorney Richard Oppenheim at 818-461-8500 or via the Contact form on this page.

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A “Charge of Discrimination” filed by the Department of Housing and Urban Development against Facebook is making waves. In the Charge, HUD accuses that Facebook “unlawfully discriminates based on race, color, national origin, religion, familial status, sex, and disability” when it comes to advertisements for housing.  The document can be viewed HERE.

https://www.californiabusinesslitigation.com/wp-content/uploads/sites/283/2016/05/http.www-51883498-001.jpgThrough Facebook’s ad platform, advertisers are able to target users of the social media service who are most likely to be interested in their goods and services. HUD says that these practices may violate the 1968 Fair Housing Act.

HUD Secretary Ben Carson argues: “Facebook is discriminating against people based upon who they are and where they live.” Calling the practice “as discriminatory as slamming a door in someone’s face,” Carson objects to features on the advertising platform such as toggle buttons that make it possible to include or exclude men or women. There’s also a search box that can be used to exclude individuals who are not fluent in a certain language.

Attributes that advertisers can choose or exclude include accessibility, Hispanic culture, hijab fashion and foreigners. Additionally, Facebook’s advertising platform features a map tool that advertisers use to exclude people living in certain areas from seeing specific ads.

A U.S. Administration Law Judge will be responsible for hearing the case unless one of the parties demands a federal court venue instead. The Administrative Law Judge has the power to award damages in the event that discrimination is proved.

The Charge comes just after Facebook announced that they had reached settlements in nearly half-a-dozen housing discrimination lawsuits. Altogether, the social media company will pay $1.95 million to the plaintiffs in these cases. Settlements in the cases also require that Facebook make massive changes to its ad platform as it relates to advertising for credit, employment and housing.

A Facebook spokesperson is surprised by HUD’s new Charge in light of these recent settlements and the changes that are underway with the ad platform. Legal experts are closely watching the situation to see if HUD is using the Charge to warn others to avoid similar advertising practices that could be used in a discriminatory manner.

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Agrochemical giant Monsanto, which is now owned by Bayer, is facing a slew of lawsuits based on its popular Roundup weed killer. Roundup contains an herbicide called glyphosate. Critics argue that this herbicide is carcinogenic and responsible for causing numerous cases of cancer.

949759_dollar_signCalifornia plaintiff Edward Hardeman sued Bayer-Monsanto on the grounds that use of Roundup contributed to his diagnosis with non-Hodgkin lymphoma. Hardeman owns property consisting of more than 50 acres. For 25 years, he sprayed the property with Roundup to control poison ivy and other invasive plants. Attorneys estimate that he used 6,000 gallons of the product throughout those years.

When Hardeman was diagnosed with cancer, it didn’t take long for him and his doctors to start taking a closer look at his habitual use of Roundup. Bayer-Monsanto currently is dealing with in excess of 11,000 lawsuits in the U.S., all of which argue that the glyphosate used in the product causes cancer in people.

Recently, a jury agreed with Hardeman’s conclusion that Roundup caused his illness. Their decision is said to be based on scientific evidence, which is in line with another jury decision from last year. In that case, the plaintiff was a landscaping employee with a public school district. The jury concluded that Roundup was responsible for the plaintiff’s terminal illness, awarding him almost $290 million. Eventually, the verdict was reduced to $78.5 million, a decision that is currently on appeal.

In the second phase of the current trial, plaintiffs will have to demonstrate that Monsanto had knowledge of the possibility that glyphosate could cause cancer and they did not provide adequate warnings. Presiding judge Vincent Chhabria unsealed documents that allegedly demonstrate that Monsanto worked to discredit independent scientific research that showed their product was unsafe. Moreover, the documents may indicate that Monsanto executives persuaded officials at the EPA to approve glyphosate contrary to the scientific evidence.

The outcome of this case remains in the balance, as does the outcome of the thousands of similar lawsuits. It seems Monsanto did a poor job of protecting their customers and in doing so failed to protect themselves.

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A decision in a California lawsuit may have implications for retail employers who require workers to be available for on-call shifts. Under the decision, it may be wise for such employers to consider whether or not their employees are entitled by law to compensation for their time when they are requested to “report to work” by telephone.

clock-overtime-110616811-001Ward v. Tilly’s, Inc. is a class action lawsuit filed by Skylar Ward, an employee of retail chain Tilly’s. The plaintiff alleges that her employer institutes a policy of on-call shifts in which employees are required to call in two hours in advance to ask the employer if they are needed. In the complaint, attorneys argue that such an obligation triggers an employer responsibility to compensate the employee for their time under the California Industrial Welfare Commission’s Wage Orders.

The Wage Orders state that when an employee complies with a requirement to report for work, they are entitled to half of their usual pay or no less than two-hours’ pay. Tilly’s policy stated that employees should assume that they were scheduled to work up until the moment they were told that they weren’t needed. This meant that employees would have to schedule their time as if they were going to be working, leading to arrangements for childcare, giving up social engagements and being unable to schedule academic courses.

Under Tilly’s policy, employees could be disciplined for failing to call in or for refusing to work an on-call shift. Such actions received the same discipline as missing a regularly scheduled shift.

Ward’s complaint was refused by the trial court. An appeal brought the case before the Court of Appeal, which reversed the trial court’s findings two to one. Appeal judges determined that reporting for work under the definition in the Wage Orders means “presenting oneself as ordered.”

The dissenting opinion argued that the Wage Order’s intent applied to the employee’s physical presence at the store. Nonetheless, the outcome of this matter demonstrates the need for employers to review their pre-shift call-in policy to bring it in line with the findings in Ward v. Tilly’s.

If you are an California employer or business owner with questions about any legal issue feel free to contact me, attorney Richard Oppenheim at 818-461-8500 or via the Contact form on this page.