I. When All Else Fails Claim Retaliation – Retaliation Claims Are On the Rise Faster than Claims of Discrimination

07/15/2011

The Goldstein Law Firm

July 2011 Newsletter

By: Charles H. Goldstein, Esq.

  1. I.                   When All Else Fails Claim Retaliation – Retaliation Claims Are On the Rise Faster than Claims of Discrimination:

 

            We have recently noticed a rise in claims of retaliation and found that this is part of a national trend. It is an unlawful employment practice under California’s Fair Employment Housing Act (“FEHA”) for an employer to discharge, expel and/or otherwise discriminate against any person because the person has opposed any unlawful practice. That is why it is essential that when you are faced with a claim of discrimination and/or sexual harassment, you make certain that even if you find there is no merit in the claim, that the employee who made the claim does not become the victim of retaliation.

 

            In the recent case of Kelley v. The Conco Companies, Cal. Court of Appeals 2011 Case No. A126865, an employee was found to have a valid claim of retaliation even though the employee did not have a valid claim for Sexual Harassment and Sex Discrimination, Termination in Violation of Public Policy and Intentional Infliction of Emotional Distress.

 

            The Conco Companies hired Patrick Kelley as an apprentice ironworker at a job site with David Seaman as his supervisor. Kelley complained that Seaman had subjected him to a barrage of sexually demeaning comments and gestures that treated Kelley as gay when Kelley was in fact a heterosexual. Kelley later received similar comments from other male coworkers. Kelley was also subjected to physical threats by coworkers in retaliation for his complaints about Seaman. There was no evidence that Seaman or any manager of Conco orchestrated any of the actions taken by Kelley’s coworkers. Kelley’s employer changed his work locations and Kelley’s union later suspended Kelley rendering him ineligible for employment. There was no evidence that the union’s actions were in retaliation for Kelley’s complaints about Seaman. After the suspension expired, Conco did not rehire Kelley. Kelley sued Seaman and Conco under FEHA alleging sexual harassment and retaliations as well as other related causes of action.

 

            While there was no evidence presented that any Conco supervisory personnel orchestrated retaliatory action against Kelley, Kelley did state in his complaint that he complained about this conduct to Scott Nova two to three times a week and at least one other person (“Tony”). He further alleged that an unidentified Conco supervisor was within earshot when some of the comments were made, but ignored them. Kelley said that the company moved him to different sites in response to his complaint, but that he also said that Nova told him: “Well, that’s the way the trades are man ….. That’s just the way these guys are.”

 

            The Court concluded that “Kelley has raised triable issues as to whether coworkers engaged in retaliatory harassment sufficiently severe to constitute an adverse employment action, whether Conco had actual or constructive knowledge of the improper conduct and whether it took appropriate actions in response.”

 

Tips for Avoiding Retaliation Claims:

 

  1. Thoroughly investigate and document claims of harassment, discrimination and/or the creation of a hostile work environment.
  2. Take remedial action against managers, supervisors and/or employees who engage in acts of harassment, discrimination and/or the creation of a hostile work environment.
  3. Make certain that the employee who reports acts of harassment, discrimination and/or the creation of a hostile work environment is informed of the results of your investigation.
  4. Advise the employee that should they believe that they are being retaliated for coming forward, they should report acts they believe constitute harassment, discrimination and/or the creation of a hostile work environment, and should immediately report their concerns so that you can investigate and take appropriate action to remedy the situation, if warranted.
  5. Monitor the treatment of the employee who reports claims of harassment, discrimination and/or the creation of a hostile work environment after the claims are found to have merit and/or found to be unsupported.
  6. Make certain that any adverse employment actions taken against an employee who has reported acts of harassment, discrimination and/or the creation of a hostile work environment are for legitimate non discriminatory business reasons and not as an act of retaliation.
  7. Seek assistance from your employment attorney when you suspect that an employee is claiming that he or she is being retaliated against because they reported acts of harassment, discrimination and/or the creation of a hostile work environment. 

 

II.        A Common Sense Court Decision on Whether Accountants Who Are Not CPA’s Can Be Considered Exempt  from the California Wage and Hour Laws:

           

            Two thousand unlicensed junior accountants brought a wage and hour class action against PricewaterhouseCoopers LLP (“PWC”) claiming that PWC failed to pay them overtime under California law. In Campbell v. PricewaterhouseCoopers LLP, --- F.3d ----2011 WL 2342740 (9th Cir. 6/15/11). Slip op. at 1, the United States District Court found that PWC is categorically ineligible as a matter of law to fall under two state regulatory exemptions from the mandatory payment of overtime: the professional exemption and the administrative exemption. The liberal United States Court of Appeals for the Ninth Circuit reversed the lower court ruling based on its interpretations of the California regulations.

 

            PWC has seven tiers of personnel job titles for “accounting positions”. From top to bottom those tiers are partner, managing director, director, senior manager, manager, senior associate and associate. PWC requires that personnel holding the first 5 titles have a CPA license, but senior associates and associates need not be licensed accountants.

 

            Accountants who are CPAs are clearly excluded from coverage under the California Wage Orders, including being exempt from overtime, because section (a) of the Wage Order defining the Professional Exemption excludes “an employee who is licensed or certified by the State of California and is primarily engaged in one of the following: recognized professions: …. accounting….” However, the Court concluded that based on its interpretation of the California Wage Orders’ professional exemption language, accountants need not be CPAs to be exempt from the overtime provisions of the Wage Orders. The Court held that non-licensed accountants can be exempt from the Wage Orders and overtime if they meet the requirement to be exempt as a professional because they “primarily engaged in an occupation commonly recognized as a learned or artist profession.”  The Court also held that non-licensed accountants could be exempt as administrative employees if the meet the test for the administrative exemption.

 

Tips for Employers Who Employ Accounting Personnel Applying the Campbell Case:

 

  1. In order for an employee in an non licensed accounting position to be exempt from the California Wage Orders as a professional employee,  the unlicensed accountant:

 

(a)          Must engage in work that is “predominantly intellectual and varied in character”.

(b)         Must engage in work as an accountant in which the employee uses their independent judgment and discretion.

(c)          51% of the work of the unlicensed accountant must be intellectual and varied in character and must allow the non licensed accountant to use their independent judgment and discretion or the work could be found to be “menial and routine”.

 

  1. In order for an unlicensed accounting employee to be exempt as an administrative employee the employee must meet five elements:

 

(a)          The employee performs work “directly related to management policies or general business operations of either the employer or the employer’s clients.”

(b)         The employee customarily and regularly exercises discretion and independent judgment.

(c)          The employee works under only general supervision while either:                      (1) performing work along specialized or technical lines requiring special training, experience or knowledge; or (2) executing special  assignments or tasks;

(d)         The employee is “primarily engaged (51%) in exempt work meeting the above requirements”; and

(e)          The employee meets minimum salary requirements.

 

To prevent potential wage and hour liability for misclassifying your accounting employees as exempt from overtime, conduct your own audit to determine whether based on the Campbell case they are exempt as professionals and/or administrative employees.

 

III.       A Disconcerting Recent Development in the Private Sector that Can Affect Every Employer – With Union membership in the private sector at an all time low, the Obama – packed National Labor Relations Board Issued Proposed Rules For Speeding Up NLRB Secret Ballot Elections:

 

            Unions in the private sector represent less than 7% of the workforce. They blame their declining membership on management’s successful resistance to unionization as exemplified by union election defeats in recent Wal-Mart and Target store secret ballot elections. The unions claim that if the election process was speeded up, they would be more successful in winning elections. In my experience of almost 50 years, the decline in union membership has much more to do with the increased sophistication of employees who the union seeks to organize and who now have many more legal avenues to protect and vindicate their employee rights without paying union dues.

 

Generally, unions conduct their organizing campaigns in secret.  Employers are generally the last to know and often are only made aware of the organizing campaign after receiving notification from the NLRB that a petition for election has been filed by a union seeking to represent the Employer’s employees. Among the new rules proposed by the NLRB to speed up the election process are the following:

 

  1. Election petitions, election notices and voter lists could be transmitted electronically.
  2. The NLRB Regional Director would set a pre-election hearing to begin 7 days after a hearing notice is served and a post election hearing to decide any objections to the election 14 days after the tally of ballots.
  3. Litigation regarding eligibility issues of less than 20% of the voters would be raised after the election and not before.
  4. Employers would have to turn over a voter list including the names, work location, shift, and classification by the pre-election hearing.
  5. The final voter list including phone numbers and email addresses of the voter would be shortened to two days
  6. The parties would be limited to seeking review of the Regional Director’s rulings to a single post election request for review.
  7. The Board in Washington would have the discretion to deny review of post-election rulings permitting the Regional Director to make prompt and final decisions in most cases.

 

The proposed rules if adopted could mean that “Quickie elections” could be held in as little as 10 – 21 days.

 

Tips for Management Dealing with the new NLRB Rules When They Are Adopted:

 

If you are a private sector employer who may be a target of unionization you should:

 

  1. Make certain that your wages, benefits and working conditions are competitive with companies in your industry that are unionized.
  2. Make certain that you have clear employee policies that are contained in an up to date employee handbook.
  3. Train you supervisors to spot the signs that your employees are being unionized.
  4. Form an instant response “Truth Squad” that can instantly respond to a union organizing drive so that employees who have only heard about the “upside of unionization” also hear from the employer about the significant “downside of unionization.”
  5. Develop a plan with professional assistance of how you can respond immediately to a union petition to organize your employees filed under the new rules that will become final unless Congress acts to prevent the NLRB from finalizing these rules.
  6. Make certain that your supervisors know what they can and cannot do and say if your employees are being organized by a union.

 

            I believe that even with the NLRB tipping the scale of fairness in elections to the union side, employees are smart enough to know that in 2011, unions cannot make businesses successful and are certainly not the key to job security and/or financial advancement.

 

IV.       The Goldstein Law Firm 35th Annual Labor and Employment Law Seminar

 

            The Goldstein Law Firm will hold its 35th annual labor and employment law seminar: “Back to Basics – Understanding Labor and Employment Law and Protecting Your Organization”. We will be holding our Seminar at the Cerritos Center for the Performing Arts in October and hope to see all of you there.  We will be sending out invitations for the Seminar in our August Newsletter.

 

The Legal Practice Areas of the Goldstein Law Firm

 

Employment Law     Wage and Hour Law     Labor Law     Shareholder Disputes

Business Litigation     Corporate Law     Corporate Investigations     Appellate Law

Wrongful Death     Training & Workshops     Workers Compensation     EDD Appeals

Sexual Harassment Law       Discrimination Law       Disability Law               Serious Willful Claims

Labor Code 132(a) Claims      Wrongful Death/Substantial Injury Claims   Cal/Fed OSHA

 

The Goldstein Law Firm

8912 Burton Way

Beverly Hills, California 90211

Telephone: (310) 553-4746

Facsimile: (310) 282-8070