Articles Posted in California Business Lawsuit

Published on:

When a corporation hires a coach for an executive, that executive probably expects to hone skills that enable her to take on a more advanced role. However, that was not the experience had by Denise Stilwell, a former executive at Twentieth Century Fox.

Gender-Discrimination-105366239-001Stilwell began her employment with Fox in 1999. By 2013, she had been promoted to a vice president position in enterprise rights management. The position came with a four-year contract, which included a promise of promotion to a senior vice president position within the first two years.

Her immediate supervisor accepted a voluntary retirement package in 2016, which meant that she began reporting to Fox CFO Dean Hallett. Shortly after the change, Stilwell was summoned to Hallett’s office. She expected to be given a promotion. Instead, Hallett informed her that she “smiled too much,” and that an executive coach was going to begin working with her.

That coach was Jack Zwissig from Zwissig and Associates. Zwissig allegedly told Stilwell that her “smile is fake,” that she laughed too much and that people generally didn’t like her. Most troubling of all is Stilwell’s assertion that Zwissig told her that she should “lift her skirt.”

Stilwell reported Zwissig’s comments to Hallett, calling them sexist and improper. Almost immediately, she was reassigned to another executive vice president, Joanie Wallace, who refused to meet with her for months. Abruptly in January 2017, Stilwell was fired because her department wasn’t moving in the right direction.

Recently, Stilwell filed a lawsuit naming her former employer, Zwissig and Zwissig’s firm as defendants. The complaint levels charges of gender discrimination, retaliation and hostile work environment, among others. If she prevails, the plaintiff hopes to collect unspecified damages for loss of future earnings and benefits as well as emotional distress.

This situation acts as a vital reminder that all complaints regarding possible harassment and discrimination must be followed up on swiftly and thoroughly. Failing to do so often exacerbates the situation to a point that is difficult to control. Working closely with a qualified employment attorney is the best way to prevent these circumstances from occurring.

Published on:

James Damore, a former Google employee who made headlines last year after his written diatribe regarding why women are barred biologically from being successful at engineering, is making headlines again for suing the company.

Gender-Discrimination-105366239-001In his long and considerably detailed complaint, Damore alleges that the tech giant discriminates in its hiring policies against white, conservative men. He accuses the company of having hiring quotas for workers who are female or belong to an ethnic minority. Citing meetings in which department managers are singled out and chastised for not having reached their quota of female or minority workers, Damore says that it is difficult for a white man who does not hold liberal views to get ahead at Google.

Among the charges, Damore says that Google actively discriminates against white male employees who have “perceived conservative views by Google.” The complaint goes on to state that Google has a practice of disciplinary action against employees who “expressed views deviating from the majority view at Google on political subjects raised in the workplace ….”

Google’s own diversity reporting makes Damore’s claims seem at least partially spurious. The company’s latest reports say that their workforce is 69 percent male and 56 percent white. What is more, their technical employees are 80 percent male and 53 percent of these workers are white. This may make it difficult for Damore to support his claims in court.

At the same time, Google is being sued by four female former employees who say that the company openly discriminates against women, paying them less than male counterparts and making it more difficult for them to advance to more responsible positions. In fact, the government is already investigating Google for suspected discriminatory practices against females and minorities.

Google seems to be embattled on all sides thanks to these lawsuits. Their position is a stark reminder of how important it is to develop hiring, promotional, disciplinary and firing practices that are in strict accordance with the law. Working closely with a business and employment attorney is an excellent way to ensure that your company does not run afoul of the law.

Published on:

Sexual harassment and abuse in a wide range of industries has made major headlines in recent months. Heavyweights in Hollywood and the media, along with CEOs of major corporations, are all losing their reputations as allegations come to light. With more people being aware than ever before about the dangers of sexual impropriety in the workplace, now is an excellent time to introduce more stringent policies and to implement comprehensive training at all levels of any organization.

bribery4The recently passed federal tax law adds another layer of complication to the settlement of sexual harassment and abuse claims in the workplace. Previously, employers could deduct the cost of settlement payments made to the victims of sexual harassment. It also was possible to deduct the cost of severance packages that were given to at-fault employees. The new tax legislation appears to put an end to this practice.

This new tax law adds § 162(q) to the Internal Revenue Code as follows:

“(q) PAYMENTS RELATED TO SEXUAL HARASSMENT AND SEXUAL ABUSE.—No deduction shall be allowed under this chapter for—

(1) any settlement or payment related to sexual harassment or sexual abuse if such settlement or payment is subject to a nondisclosure agreement, or
(2) attorney’s fees related to such a settlement or payment.”

In other words, when the settlement of the sexual harassment claim involves a non-disclosure agreement, the employer will no longer be able to deduct the cost of those proceedings on their federal taxes.

As straightforward as the law’s wording is, its application promises to be complex. What happens if the plaintiff alleges other forms of harassment or discrimination in the same proceedings? Is the cost of settlement for those claims still deductible? If the employer disagrees that the payments should not be deductible, what means do they have to fight it? Going to court would all-but guarantee the publication of information that is subject to the non-disclosure agreement.

The new federal tax law gives employers one more excellent reason to train all employees regarding the dangers of sexual harassment and abuse in the workplace. Preventing these incidents before they happen is the best way to avoid complicated tax questions and litigation.

Feel free to contact me, Richard Oppenheim with your related legal questions. I may be reached at 818-461-8500 or by using the “Contact Us” box in the right column.

Published on:

A majority of Americans rely on coffee to get them going. They expect to get a jolt, but should they also expect a cancer diagnosis? That’s the question behind a long-pending California lawsuit.

Coffee-Poison-80413335-150x150In 2010, an advocacy group called Council for Education and Research on Toxics (CERT) sued Starbucks and other coffee producers and retailers for not including a cancer warning label on their product. The Council is empowered to sue under a law from 1986 which was officially called Proposition 65. Also known as the Safe Drinking Water and Toxic Enforcement Act, the law says that advocacy groups, citizens and lawyers may sue on behalf of the state.

In the case at hand, the Council says that much of the coffee consumed in California includes a carcinogen called acrylamide. The chemical is present in numerous foods, such as french fries, and is introduced naturally to coffee as a byproduct of roasting.

Lawyer Raphael Metzger is leading the charge, just as he did a few years ago when he won a case in which manufacturers of potato chips agreed to remove acrylamide from their products. His goal is for all businesses that make and sell coffee to use a clear and direct warning label so that consumers are informed that they will be ingesting acrylamide.

Some coffee companies already provide such a warning, but there are concerns that the wording is vague or that the label is not placed prominently enough to adequately warn consumers. Businesses in the coffee industry have been fighting the lawsuit for years. Their lawyers have argued that acrylamide is not present in large enough quantities to cause harm.

However, Superior Court Judge Elihu Berle did not think that the defense had presented sufficient evidence in support of their case. It is up to the defense to demonstrate that the chemical would not cause even one excess case of cancer per 100,000 people. The judge contended that the defense failed to do this.

This long-pending lawsuit is bound to continue. Speak with a business attorney to ensure that your products bear all appropriate warning labels.

Published on:

Where is the dividing line between an efficient money-making model and a pyramid scheme? That’s the question that may be answered in a new lawsuit filed against clothing company LuLaRoe.

Pyramid-Scheme-122597965-300x225LuLaRoe began operations in 2012. They have 80,000 “distributors,” most of whom are millennial moms. With more than $1 billion in sales in 2016, the company is on track to double that number in 2017. Their product consists of brightly colored leggings, shirts and dresses.

Unlike traditional retailers, LuLaRoe does not sell its products in brick-and-mortar stores. Instead, they rely upon distributors or consultants who buy the products and then hope to turn a profit when those products are sold to consumers.

Getting started as a consultant isn’t cheap. A basic package of approximately 70 leggings in adult sizes, 10 leggings in “tween” sizes and 25 dresses costs $2,074. Budding entrepreneurs could opt for a larger package containing more than 500 pieces for $9,058.25.

Three consultants from Sacramento County say they were “doomed from the start.” In their lawsuit, they claim that LuLaRoe bombarded them with demands to “buy more/sell more.” Using aggressive pressure tactics, consultants were encouraged to have at least $20,000 worth of merchandise on hand. Even if existing inventory wasn’t moving, the distributors were continually exhorted to purchase more.

The consultants say in their complaint that the company used unfair and sometimes outrageous ploys to get them to buy more inventory. LuLaRoe representatives allegedly counseled distributors to take out loans and use credit cards to purchase more product. One consultant said that she was told to sell her breast milk to raise money for buying more LuLaRoe product to sell.

In addition to accusing LuLaRoe’s principals of running a pyramid scheme, the lawsuit argues that the company violates the federal RICO act. The consultants also say that bonuses promised by the company for recruiting new distributors and buying more merchandise never materialized.

Working with a qualified business attorney helps entrepreneurs to avoid costly and time-consuming litigation. With legal advice, LuLaRoe may have been able to focus on profits without allegedly running afoul of the law.

Feel free to contact me, Richard Oppenheim with your related legal questions. I may be reached at 818-461-8500 or by using the “Contact Us” box in the right column.

Published on:

Three women who used to work at Google have filed suit against their former employer. Their complaint states that the company systematically discriminates against female employees by failing to pay them the same rate that is given to men doing the same jobs.

Gender-Discrimination-105366239-001The plaintiffs include Kelly Ellis, Holly Pease and Kelli Wisuri, and they make the argument that their lawsuit should become a class action on behalf of other female current and former employees. Ellis says that despite having four years of professional experience as a software engineer, Google hired her as a Level 3 employee in 2010. That level was considered entry level, and was designed for recent college graduates. A few weeks later, a male engineer with similar experience was hired at Level 4. This garnered him a larger salary and put him in line for extra bonuses and raises. Ellis further claims that other male employees were brought in at Level 4 even though they had less or comparable experience when compared with hers.

Ellis goes on to claim that Google hired her as a front-end engineer even though her experience was as a back-end engineer. In Google’s hierarchy, it is the back-end engineers who are the most esteemed and higher paid. Ellis says that she and other female engineers were prevented from entering similar positions. The two other plaintiffs share similar accusations.

A spokesperson for Google says that the company disputes “the central allegations” of the case, pointing out that a worker’s level and their promotion track follow a rigorous process that is meant to preclude the danger of gender bias.

However, a study by the Labor Department which recently concluded an audit of the company’s pay practices disputes this. The audit points to “systemic compensation disparities against women pretty much across the entire work force.” Google has not been charged with wrongdoing relating to these allegations.

This latest case is yet another reminder of how critical it is for companies to review their hiring, promotion and wage practices with a business attorney. Running afoul of employment laws is always bad for the bottom line.

Published on:

Sports drink brand Gatorade recently settled a lawsuit that was brought against the company by California Attorney General Xavier Becerra. At the heart of the matter was a free, downloadable game that Becerra argued disparaged water and healthy nutritional choices.

Legal-Fees-PaidGatorade made a game called Bolt! that was available to the public for free download in 2012, 2013, and then for a short time in 2017 as well. Players used a likeness of Olympic track athlete Usain Bolt to race across cell phone and tablet screens. When Bolt encountered Gatorade on the track, his speed increased, but when he encountered water, his performance deteriorated. Allegedly, the game inspired players to maintain their “performance level high and avoid water.”

Becerra argued in his complaint that the game made it appear as if water was an unhealthy choice that most athletes avoid. Accordingly, playing the game would encourage people, particularly children, to choose sports drinks instead of water.

In a statement, Becerra said: “Making misleading statements is a violation of California law. But making misleading statements aimed at our children is beyond unlawful, it’s morally wrong and a betrayal of trust.”

The day after the complaint was filed, Gatorade reached a settlement deal with the state. They agreed to a settlement of $300,000, $120,000 of which is earmarked for the promotion of better nutrition and hydration choices for young people.

Still, Gatorade does not admit to any wrongdoing in connection with the settlement. Katie Vidaillet, spokeswoman for Gatorade, notes: “The mobile game, Bolt!, was designed to highlight the unique role and benefits of sports drinks in supporting athletic performance. We recognize the role water plays in overall health and wellness … .” Moreover, the company has agreed to work harder at meeting the responsible advertising standards set by parent company PepsiCo.

Becerra hopes that the lawsuit and settlement will put other companies on notice about false advertising. While creativity is wonderful for capturing the attention of consumers, it is best to guard against making false claims. Work with a California business attorney to ensure that you company doesn’t run afoul of the law.

Published on:

The Equal Employment Opportunity Commission (EEOC) has announced a lawsuit against Big 5, which is one of the largest sports retailers in the U.S. A black employee named Robert Sanders is suing his employer over ongoing racial harassment. Sanders charges that upper management in the company failed to act even after he repeatedly reported the abuse. This story is a reminder to all employers about the necessity of investigating every harassment complaint with the utmost speed.

Retaliation-32004699-001Robert Sanders was the only black employee at Big 5’s store on Whidbey Island, Washington. As a part of the management training program, he expected to have an opportunity to learn new skills that would help him to embark on a new career. What he claims to have found instead was a racially charged atmosphere that had his coworkers referring to him with slurs like “King Kong,” “boy” and “spook.” Another trainee allegedly said that Sanders had the “face of a janitor.”

Sanders took his story to Big 5’s upper management, but he says that they did nothing to investigate his claims. Tensions reportedly grew worse in the manager training program. Sanders took multiple leaves as he tried to cope with the stress. An assistant manager allegedly told him, “We will hang you, we will seriously lynch you if you call in again this week.”

Sanders says that the behavior didn’t stop, nor did upper management offer to help in any way even after repeated reports. Eventually, Sanders took his complaint to the EEOC, which offered to act on his behalf. The EEOC pointed out to Big 5 that the behavior Sanders had been subjected to was illegal under Title VII of the Civil Rights Act of 1964. Furthermore, Sanders says that his employer retaliated against him, denying him breaks, unreasonably increasing his workload and disciplining him for things he did not do.

Big 5 and the EEOC failed to come to an agreement at the negotiation stage, which led to the filing of the lawsuit. This example demonstrates once again why employers must take swift and immediate action to investigate all harassment claims.

Published on:

 When an employer is sued by an employee, it’s natural to want to end the proceedings quickly. However, it is not legal for an employer to take any retaliatory action against a worker, especially one that is suing them. As a recent decision by the Ninth Circuit Court of Appeals demonstrates, it also may be illegal for an attorney acting on behalf of the employer to retaliate.

Retaliation-32004699-001José Arias was an undocumented alien who had been working for Angelo Dairy for a decade in 2006 when he filed a wage lawsuit. Arias alleged that he had not been paid for overtime hours and that he had not received mandatory rest and meal periods. The dairy retained lawyer Anthony Raimondo to represent them in the lawsuit. Raimondo began working on due diligence, looking into Arias’ past as well as examining other pertinent facts.

A few weeks before the trial was scheduled to begin, Arias had an appointment for a deposition. What he didn’t know was that Raimondo had gotten in touch with Immigration and Custom Enforcement, or ICE, which led the lawyer to the discovery that Arias had no legal status in the U.S. Further, Raimondo had arranged for Arias to be taken into ICE custody at the deposition. Arias learned of the plan and promptly settled the litigation.

Then, the next phase began. Arias filed suit against Raimondo for violation of the Fair Labor Standards Act. While the majority of the provisions in this law apply only to direct employers, the retaliation portions apply to employers and those who are empowered to act on their behalf. An initial court decision on the lawsuit sided with Raimondo, but Arias appealed the decision. The appeals court sided with him.

Most reputable employment lawyers are unlikely to recommend that their clients try to have an employee deported or otherwise take an adverse action against them. To do so only opens the employer up to more legal trouble, and the same is true for the lawyer who takes a direct, punitive action toward an employee. It is far better to let the courts decide.

Feel free to contact me, Richard Oppenheim with employment law questions. I may be reached at 818-461-8500 or by using the “Contact Us” box in the right column.

Published on:

Years of highly contested, and well-publicized, litigation have made employers aware of the dangers of discriminating against workers based on gender, sexual orientation, race and religion. It’s not unusual for company executives to work with an employment attorney when they are developing or revamping their practices. Unfortunately, age discrimination tends to be overlooked.

Age-Discrimination-132214651-e1500063954245This oversight is coming to the forefront with litigation filed in the U.S. District Court in New Jersey. Plaintiffs allege that their former employer, AT&T, systematically shed older workers in an effort to gain a workforce that has more advanced technological skills. The complaint relies largely on the Age Discrimination in Employment Act, a 1967 law that protects applicants and employees who are 40 or older. Essentially, the law makes it illegal for companies to make hiring, firing, promotion and compensation decisions based solely on age.

Plaintiffs argue that AT&T relied on age-based stereotypes to purge older workers. The process involved notifying the older workers that they had been placed on “surplus” status. They had a set amount of time within which they must be accepted into an alternative position within the company. However, the plaintiffs say that the selection process for those alternative positions was biased against the older employees who had been categorized as surplus. When they were unable to find another position, the workers were laid off.

Some of these employees say that they received a severance check, and that they were told by AT&T that they would be unable to sue the company under anti-discrimination laws if they took the money. Lawyers for the plaintiffs say that’s not necessarily the case, especially if the notice given to employees did not contain certain stipulated language.

The former employees cite a company blog post that described AT&T’s “Workplace 2020” program, which admitted that age-based stereotypes are being weighed in employment decisions. According to plaintiff descriptions of the blog post, older workers are the employees of yesterday while younger workers are considered more desirable.

This litigation serves as a timely reminder for all employers to be mindful of their employment practices with respect to older workers.