Articles Posted in Employment Law

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A December 2016 decision reached by an Administrative Law Judge in New Jersey may have implications for employers in other states where medical marijuana is legal. With the current trend toward legalization of marijuana, it’s only logical for entrepreneurs to consult with attorneys about how these laws might affect them.

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The current case involved Andrew Watson, a lumber company employee who injured his hand on-the-job. Initially, Watson’s doctors prescribed Percocet to manage his chronic pain. His doctor then recommended that he try medical marijuana. Watson legally purchased medical marijuana, and submitted a claim to his employer’s worker’s compensation insurance. An ounce of medical marijuana costs an average of $489 in New Jersey, which is one of the most expensive prices in the U.S. The insurer refused compensation.

Nonetheless, Watson found that the marijuana helped manage his chronic pain effectively and with fewer side effects than the opiates. He took his case to court so that he could continue with the treatment and have the expenses reimbursed by his employer’s worker’s compensation coverage.

After considering the situation, Judge Ingrid French ruled that Watson’s use of medical marijuana is appropriate and that the insurer should pay for the associated expenses. She notes in her decision that “the effects of the marijuana … is not as debilitating as the effects of the Percocet.” Additionally, French found that Watson had “achieved a greater level of functionality,” because of the medical marijuana use and that “his approach to his pain management needs (is) cautious, mature …”

She went on to say that whether or not medicinal marijuana is used is a matter that should be reserved for doctors and patients in states where its use is legal. While some employers expressed concern over the outcome, others say that it likely will not affect them. That’s because the requirements for qualifying for medical marijuana are so stringent in New Jersey. This, coupled with the relatively limited chances of a worker also qualifying for a worker’s compensation claim, keeps them optimistic.

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U.S. District Judge Susan Illston has ruled that Walmart truck drivers are not entitled to an additional $80 million in a class action lawsuit settlement. The complaint was filed in 2008 with hundreds of California truck drivers claiming that they did not receive at least minimum wage for performing certain tasks. Although the judge denied the plaintiffs’ claim to the $80 million, Walmart will still have to abide by the initial $54 million settlement that was awarded in an earlier jury decision.

walmart-truckclose-up-side-view_129821854433586541-001Walmart asserts that its truck drivers are among the best paid in the industry, with many of them earning between $80,000 and $100,000 per year. Moreover, their attrition rate is low, and the judge commended them for taking rapid action to comply with evolving compensation laws. The drivers argued in their lawsuit that their employer compensated them only based upon miles driven and specific activities rather than hours worked, which constituted a violation of state law. Accordingly, the drivers claimed that they did not receive adequate compensation for tasks like washing and inspecting trucks. They further argued that they were not appropriately paid for mandatory 10-minute breaks and 10-hour layovers.

In November 2016, a jury of seven agreed with the drivers, awarding them approximately $54 million in back pay. This latest decision came in response to the plaintiffs’ request for an additional $5.8 million for restitution, $54.6 million in liquidated damages and $25.6 million in penalties. The judge went along with the request for $5.8 million in restitution, but denied the other claims, saying that there is not sufficient evidence that Walmart acted in bad faith or with “dishonest and wrongful motive.”

It’s possible that Walmart may still appeal the decisions by the judge and the jury. However, they scrapped their former driver-compensation package in 2015 in favor of a new one that is in compliance with California law. Because compensation laws change periodically, it is only sensible for all business owners to have their compensation practices reviewed by an employment attorney on a regular basis. This may prevent a company from finding itself involved in a similar class action lawsuit.

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A heated lawsuit between 21st Century Fox and Netflix reveals a great deal about the inner workings of Hollywood while also providing useful insights for employers in California and across the country. This high-profile case is a helpful reminder about the necessity of consulting with employment attorneys to cement formal contractual agreements with workers.

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The lawsuit was filed by Fox in September 2016. In their complaint, they cite a “brazen campaign” by Netflix “to unlawfully target, recruit, and poach valuable Fox executives.” Mainly at issue are two former Fox employees who now work for Netflix. One of these employees is Marcos Waltenberg, a 10-year veteran at Fox who was a vice president of promotions. The other was Tara Flynn, a vice president of creative affairs who was hired by Fox in 2012.

Waltenberg is a legal alien who needed employer sponsorship to maintain his green card status. In 2012, he asked his supervisor at Fox for a raise. The human resources department responded by saying that they were not required to sponsor Waltenberg’s green card renewal. When Waltenberg dropped his request for a raise, Fox helped him get his green card.

Flynn says she was pressured to take a three-year contract at $75,000 per year even though the compensation was well below the $250,000 annual salary that was typical for her position. She knew that her salary was well below that of two male executives who formerly held the job. When Netflix approached her with a better offer, she let her supervisors know that she was leaving, and that’s when things got ugly.

Waltenberg and Flynn were under contract with Fox when they gave notice. In a response to the complaint, defendants argue that the contracts that are forced on rank-and-file employees at Fox are too reminiscent of the studio era when the lives of actors were micromanaged by executives. The response further contends that these contracts unlawfully constrain employee mobility.

This lawsuit serves as a reminder to all California employers. Companies and HR departments need to regularly review their employment contract practices to ensure that they are keeping up with changing laws.

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With the passage of Proposition 64 in November, California became one of a handful of states to legalize the use of recreational marijuana. Many residents are thrilled with the outcome, but the new law is leaving employers wondering what their rights are.

Marijuana-legalization-94540729-001The good news is that the authors of Proposition 64 foresaw that marijuana legalization might pose a problem to numerous industries. That’s why there is a provision in the law that explicitly maintains the employer’s right to prohibit the use and possession of marijuana, particularly on any work sites. Accordingly, any company is perfectly within its rights to keep their drug-free workplace policies on track, though it does make sense to ensure that everything is in order.

Now is the perfect time to meet with an employment attorney to make certain that an existing company drug policy is sufficiently broad. If a drug policy is not already in place, then it is definitely time to craft one, a project that takes time and considerable legal expertise. Under the new law, employers are still permitted to require pre-employment drug tests, and they maintain the right to not hire candidates who test positive for marijuana. Even if the drug was obtained and used legally, the employer does not have to accept such use among their prospective employees. However, it is critical that any pre-employment drug screenings are conducted fairly and impartially, without any discriminatory element.

Under California’s new law, employers are also permitted to conduct drug tests among existing employees. Once again, it is crucial that this be done in a non-discriminatory manner. Moreover, companies may want to review their written drug policies with all employees to make it clear that marijuana use is not appropriate or acceptable. Management may also need to sit down with human resources staff to ensure that they are ready to field questions from employees.

California’s revolutionary Proposition 64 may have made recreational marijuana use legal, but it still allows employers to make important safety decisions. If you have any questions about how California’s new recreational marijuana law will affect you and/or your employees, feel free to contact me, attorney Rich Oppenheim at 818-461-8500. You may also use the form on the right side of this page.

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The question of whether or not a franchisor is a joint employer of the workers at a franchisee’s location was at the heart of a class action lawsuit in California. In the federal case, the judge ruled that a franchisor could be held accountable for the misdeeds of its franchisee.

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The complaint was filed in a federal court in San Francisco in 2014. Plaintiffs were a group of current and former employees at McDonald’s restaurants in the Bay Area. All of the restaurants were owned by a franchisee, which is known as The Edward J. Smith and Valerie S. Smith Family Limited Partnership. Workers leveled charges at the franchisee for violating California wage and hour laws. These allegations included consistent errors in payroll calculations, failure to pay overtime, not providing rest breaks and meal periods and neglecting to reimburse workers for the time they spent keeping their uniforms clean and ready to wear.

Along with the wage and hours issues, the lawsuit also questioned whether or not the McDonald’s corporation was a joint employer with the Smith partnership. The corporation ultimately agreed to a $3.75 million settlement, but maintains that it is not a joint employer with its franchisees. Instead, they agreed to the settlement in order to avoid the ongoing costs and disruptions of lengthy litigation.

Workers hail the settlement as a major victory that may allow other parent corporations to be held responsible for the actions of a franchisee. However, business owners take a grim view of the development. They are concerned that a trend toward holding parent corporations responsible for the actions or misdeeds of franchisees may be detrimental to entrepreneurism.

At this time, the National Labor Relations Board is making similar arguments that McDonald’s should be considered a joint employer in a worker retaliation case in New York. If this case receives similar treatment, then it may establish a precedent for holding parent corporations responsible as joint employers.

Whether you are a franchisor or a franchisee, it’s vital that you seek legal counsel so that you are aware of your rights and responsibilities as an employer.

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We at Sylvester Oppenheim & Linde would like to take a moment to wish our clients, family and friends (including our loyal blog readers), a very joyous and happy Thanksgiving.

thanksgivingWhether you are celebrating with a small gathering, or preparing for what is shaping up to be dinner for a small country, we wish you and yours all the very best.

It also seems appropriate to quote John F. Kennedy.

“As we express our gratitude, we must never forget that the highest appreciation is not to utter words, but to live by them.”

 

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We regularly receive requests to explain the process of litigation, which we always communicate (using dialog NOT monologue) to prospective clients during our initial consultation. We hope you will find our lawsuit synopsis helpful. Feel free to forward it to others and remember to contact us with any questions about any business or employment lawsuit.

If your lawsuit or legal problem involves business issues, you may find it helpful to visit our website.  Once there you will find the following information: “Eleven Questions to Ask BEFORE Hiring a Business Attorney”.  It has always been one of our most visited web pages.

The litigation process generally involves four (4) phases. The length of each phase varies with the legal and factual complexities of each case.

DT%2019867194%20scale-001.jpgThe initial phase takes place before anything is filed in court. The attorney meets with the client to determine the facts of the claim being advanced by the client or the client’s defense to a claim brought by another. In either case, it is essential that the client meet with the attorney at the earliest opportunity as valuable rights may be lost by delay. Once the attorney meets with the client, the attorney will review any documents relevant to the matter, research the applicable law and possibly speak to witnesses in order to chart a course which is in the best interest of the client.

The next phase involves the filing of an initial pleading in court. Typically, this is the filing of a Complaint or an Answer to a Complaint. The discovery process begins, which may include serving the other side with written questions, called Interrogatories, obtaining evidence which may be in the possession of the adversary or some other party and taking depositions, the oral questioning of parties and witnesses.

Once this phase has been completed, the case is ready to be tried. A trial may be in front of a Jury or a Judge and can vary in length depending upon the number of witnesses and quantity of exhibits offered. Under our system of jurisprudence, the plaintiff has the burden of proof. The plaintiff’s case goes first. The defendant then has an opportunity to respond to the plaintiff’s case with witnesses and evidence to support the defense. If the defendant has brought a Cross-Complaint, it is tried in the same manner. Otherwise, the plaintiff has an opportunity to put on a rebuttal case to counter the evidence offered by the defendant and, on occasion, a defendant may offer a sur-rebuttal to reply to the evidence offered by plaintiff in the rebuttal case.

The final phase of litigation involves the post-trial matters including motions to vacate or correct the judgment, appeals and efforts to collect on the judgment.
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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” attitude 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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Longtime educator Alan Cohen has sued his former employer after being fired. Cohen was employed for 13 months by Speyer Legacy School, which advertises itself as an institution for intellectually gifted children in grades kindergarten through eighth grade. The exclusive private school charges students approximately $40,000 per year to attend.

you are fired 2Cohen spent 20 years working for New York City’s Department of Education before becoming the head of the lower school at the prestigious Portledge School. He made the move to Speyer where he was named the Assistant Head of the school as well as the Head of the lower school. Things appeared to go well. Teachers, administrators, parents and students all took to Cohen. Then, the school’s newly appointed Head Dr. Barbara Tischler told Cohen about another faculty member who was asking questions about Cohen’s sexuality.

Cohen, who happens to be gay, quickly discovered that his sexual orientation was a hot topic of conversation among faculty, administrators and board members. One board member even tried to set up Cohen on a blind date with one of her male friends. Additionally, Dr. Tischler asked Cohen if he could give advice to another administrator at the school. The other administrator was a lesbian, and there was widespread feeling among members of the board that her masculine dress and appearance would render her unsuitable for the Dean of Admissions position.

Cohen brought his concerns over the focus on his sexual orientation to Tischler, but to no avail. In April 2016, Cohen was informed that his contract was not going to be renewed.

Cohen has gone on to find employment at the Harvard Graduate School of Education. A married, heterosexual woman now holds his old job at Speyer. Nonetheless, Cohen’s experiences at the exclusive school suggest an atmosphere of discrimination that violates both state and federal law. Situations like this remind employers how important it is to work with an employment law attorney to avoid  discriminatory actions.

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With approximately 60,000 employees participating in its 401(k) program, Morgan Stanley should be positioned to offer an outstanding retirement investment package. However, a group of employees is now seeking class action status as they sue the investment firm for mismanagement of the company’s 401(k) plan.

Balance in digital background / A concept of technology law or tIn the complaint, plaintiff Robert Patterson alleges that Morgan Stanley only made poorly performing investments available in its 401(k) program. The suit argues that instead of abiding by the Employee Retirement Income Security Act, which states that employers have a fiduciary responsibility to act in the best interests of plan members, Morgan Stanley routinely chose to include some of its least successful funds in the company 401(k).For instance, the available mid-cap fund was Morgan Stanley’s own Institutional Mid-Cap Growth Fund. Investment advisory firm Morningstar, Inc., gave this fund the worst rating for investors who held an interest in the fund over a period of several years. The small-cap fund that Morgan Stanley offered to its employees fared even worse. It underperformed 99 percent of all similar funds in 2014, and its performance didn’t improve much in the subsequent year.

Moreover, the lawsuit claims that Morgan Stanley was charging outrageous fees. Patterson and his co-plaintiffs allege that Morgan Stanley was charging their employees considerably more than outside clients were being charged. In some cases, employees were charged twice the going rate for outside clients.

In the complaint, lawyers for the plaintiffs argue that the company “selected their proprietary funds not based on their merits as investments, or because doing so was in the interest of plan participants, but because these products provided significant revenues and profits to Morgan Stanley.”

Other financial management firms like Edward Jones and Franklin Templeton have been hit with similar lawsuits in recent months. Several high-profile educational institutions like Yale University, the Massachusetts Institute of Technology and Johns Hopkins University have also been accused of similar mismanagement. With lawsuits like these on the rise, it is more important than ever before for employers to ensure that their 401(k) plans comply with ERISA and other applicable legislation.