Bans on Re-employment In Settlement Agreements May be Unenforceable -- Golden v. California Emergency Physicians Medical Group

Employers prefer to include a "no re-hire" provision in their settlement agreements with former employees.  This provision usually states that the former employee will agree never to re-apply for employment and, if he does, the employer will be entitled to reject his application.  

The rationale for these clauses is that any refusal to hire the plaintiff in the future could be characterized as "retaliation" for having raising protected complaints in the prior lawsuit.  And why would an employer want to settle one lawsuit only to set itself up for another?

But the validity of such "no re-hire" clauses has been cast in doubt by the Ninth Circuit opinion in Golden v. California Emergency Physicians Medical Group.  As the Ninth Circuit explained, the problem with these provisions is that they may be at odds with section 16600 of the California Business and Professions Code, which provides that "every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.”

In reviewing the case law interpreting section 16600, the Ninth Circuit found that California's ban on employment restraints is extremely broad in its scope and extremely "stark" in its prohibition.  As a result, the statute does not merely ban traditional "non-compete" agreements in which an employee is precluded from working for a competitor.  Rather,

[T]he crux of the inquiry under section 16600 is not whether the contract constituted a covenant not to compete, but rather whether it imposes “a restraint of a substantial character” regardless of “the form in which it is cast.

Having articulated this standard, the Court declined to apply it to the specific agreement before it, which involved a settlement agreement by a physician that bound him to never again work for "a large consortium of over 1000 physicians."    Instead, it remanded to the district court with directions to determine if the restraint was "of a substantial character," and therefore void.

It is unclear how this "substantial character" standard may be fleshed out over time.  However, relevant factors would presumably include the market share of the employer, the number of viable alternative employment opportunities in the market, and the employee's degree of specialization.  If the foreclosed employment opportunities, in the context of the specific employee and industry, are "substantial" then any "no re-hire" agreement will be void.   



Employees Who Wear "Two Hats" Can Have Two Separate Employment Contracts -- Faigin v. Signature Group Holdings

For various legal and financial reasons large corporations frequently do business through an array of interrelated parent, subsidiary and sibling entities.  Executives and other employees are frequently shifted back and forth or end up working for two different entities at the same tme.  (I have been involved in several cases in which highly placed executives literally did not know which corporate entity employed them.) 

The holding in Faigin v. Signature Group Holdings, Inc. illustrates that one consequence of this scenario is that an employee who works for two different entities may have two different contracts.  The employee may have an integrated, written employment contract with a parent company that is terminable at-will.  But unless the contract is specifically worded to govern all employment with related entities there is no reason that a "dual employee" cannot also have a separate implied agreement with a subsidiary company that requires a higher standard for termination.   As the Faigin Court explains:


A subsidiary employing an individual who has a written employment contract with the parent conceivably could agree to continue to employ the individual unless there is good cause to terminate the employment even if the parent, for whatever reason, terminates the individual's employment with the parent.


Thus, the Court upheld a $1.37 million wrongful termination award against a subsidiary company despite the fact that the executive's written contract with the parent company stated that his employment was terminable at-will.

Employers who wish to avoid this problem might draft their an at-will termination provision to specifically govern any potential employment relationships with related companies.  But  having one corporation control the labor policies of another in this manner naturally tends to erode any claim that they are entirely separate entities and thus open the possibility of alter ego claims and the like.         


Keith Oberman sues Al Gore's Current TV for Wrongful Termination -- Olbermann Broadcasting Empire v. Current TV, LLC

Political commentator Keith Olbermann was recently terminated from Current TV, a start-up political network backed by Al Gore.  The well-publicized termination involved allegations of not showing up for work and being generally insufferable.

Olbermann has now filed his own wrongful termination complaint in Los Angeles Superior Court, alleging that Current TV breached the contract first due to its incompetent production of his show.  The gist of his theory is captured in the opening paragragh:

After being enticed to leave MSNBC and come to Current with promises of editorial control, freedom from corporate influence, and the professional support to produce a high-caliber political commentary show of the type his viewers have come to expect, Keith Olbermann was disheartened to discover Al Gore, Joel Hyatt, and the management of Current are no more than dilettantes portraying industry executives. 

Oddly, while the Complaint is supposedly premised on Current TV's breach of contract, it fails to allege any specific facts establishing the formation of a valid contract, the terms of the contract, or how the alleged conduct (if true) would have been a breach of any particular contract term.    

Olbermann's attorneys undoubtedly realize this makes the lawsuit legally defective on its face.  So the omissions probably stem from one of two reasons, either: (a) the Parties have struck an agreement to keep the contract out of the public record to avoid embarrassment; or (b) the  Complaint is not really intended not as a serious legal pleading but more of a lengthy press release (which is immune from defamation liability as a public filing). 

US Supreme Court Holds Employers May Be Liable Under "Cat's Paw" Theory

Today, the U.S. Supreme Court ruled that an employer can have liability for discrimination based on a “cat’s paw” theory. As the Court explained in its decision Staub v. Proctor Hospital, the theory derives its name from a fable of Aesop. In the fable, a monkey convinces a cat to pull hot chestnuts from a fire (burning its paws in the process) and taking the chestnuts, leaving the cat with nothing for its efforts.

In this case, the plaintiff sued his employer for discrimination in violation of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA). The plaintiff alleged that his supervisors discriminated against him due to his role as a military reservist. The plaintiff did not allege that the person who made the final employment decision to terminate his employment (Proctor’s HR manager, aka the cat), but that the decision was influenced by his two directed supervisors who did have animus towards his military service. As the Court explained:

The central difficulty in this case is construing the phrase “motivating factor in the employer’s action.” When the company official who makes the decision to take an adverse employment action is personally acting out of hostility to the employee’s membership in or obligation to a uniformed service, a motivating factor obviously exists. The problem we confront arises when that official has no discriminatory animus but is influenced by previous company action that is the product of a like animus in someone else.

While this case involved liability under USERRA, the Court noted that USERRA is “very similar” to Title VII which prohibits discrimination based on an individual’s race, color, religion, sex, or national origin. Therefore, it is very likely courts will hold that the “cat’s paw” theory of liability will extend into the more prevalent Title VII claims.

Also, as noted by the Ohio Employer’s Law Blog, this ruling will likely make it very difficult for employers to dispose of discrimination cases at the summary judgment stage as supervisor’s intent and causation issues almost always involve issues of fact. The likely result is that any cat’s paw theory cases will survive summary judgment and be heard before a jury. The case, Staub v. Proctor Hospital, can be downloaded from the Supreme Court’s website here [PDF].

Caution For Employers Regulating Employee's Internet Activity

Recently, the National Labor Relations Board sued American Medical Response of Connecticut Inc. (AMR) on behalf of an employee who was fired for making negative comments about AMR on the Internet. The NLRB argued that the conduct of the employee was protected as free speech under federal labor laws. The NLRB settled the case with AMR.  In addition to paying a confidential settlement to the employee, the company has also agreed to change its blogging and Internet policy so that it no longer prohibits employees from disparaging the company or depicting the company in any way without prior approval from the company. While this case involves federal labor laws, the settlement should be a warning to California employers who have similar Internet prohibitions as California law provides that employers cannot restrict an employee’s legal off-work activities.

First off, in California, Article I, Section I of the California Constitution guarantees citizens a right of privacy:

All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.

This right to privacy carries over to the workplace, but is even more protected when the employee is conducting personal activities during non-working hours. Furthermore, section 96(k) of the Labor Code provides that the California Labor Commissioner may assert on behalf of employees:

Claims for loss of wages as the result of demotion, suspension, or discharge from employment for lawful conduct occurring during nonworking hours away from the employer’s premises.

For example, in Barbee v. Household Automotive Finance Corp. (2003), a court provided some guidance about the ramifications of section 96(k). Barbee was dating a subordinate at work, which violated the company’s policy and created a conflict of interest. The company gave Barbee and the employee with whom he was involved the option that one of them had to resign or to end the relationship. Barbee refused to resign, and they did not end the relationship, so the company terminated Barbee. Barbee sued, arguing that the company violated Labor Code section 96(k) in that his employer was regulating his lawful conduct during personal time. The court rejected Barbee’s argument in stating:

We conclude that Labor Code section 96, subdivision (k) does not set forth an
independent public policy that provides employees with any substantive rights,
but, rather, merely establishes a procedure by which the Labor Commissioner
may assert, on behalf of employees, recognized constitutional rights. Therefore,
in order to prevail on his wrongful termination claim, Barbee must establish that
his employment was terminated because he asserted civil rights guaranteed by
article I of the California Constitution. We conclude that Barbee cannot make this showing and therefore he cannot establish the first necessary element of his wrongful termination claim.

While the court held that the company’s actions in that case did not violate section 96(k), the facts were very favorable to the employer, and there are other arguments available to employees. For example, an employee may also argue violation of Labor Code Section 98.6 which states in part that “no person shall discharge any employee ... because the employee … engaged in any conduct delineated in this chapter, including the conduct described in subdivision (k) of Section 96 ….” An employer may, however, prohibit an employee from any disclosures on the Internet that would be illegal, disclose confidential information, or violate another individual’s (such as co-workers or customers) right to privacy. But with this recent case making national headlines, it is certain that litigation concerning what employees conduct an employer can and cannot regulate on the Internet will be prevalent over the next few years.

Was Juan Williams' Termination By NPR Illegal Under California Law?

NPR announced yesterday that it had terminated "longtime news analyst" Juan Williams because of the views he expressed during a discussion of terrorism and Islam on The O'Reilly Factor.  The specific comment for which he was terminated was apparently the following:

"Look, Bill, I'm not a bigot. You know the kind of books I've written about the civil rights movement in this country. But when I get on the plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they are identifying themselves first and foremost as Muslims, I get worried. I get nervous."

NPR has stated that William's termination was justified because he violated the NPR policy that "News analysts may not take personal public positions on controversial issues." 

Given the peripatetic nature of the news business it is unclear what state law might govern Williams' employment.  (New York or DC are likely candidates).  But if NPR ever intends to fire one of its California employees for taking "positions on controversial issues," it should first consider the implications of California Labor Code section 1102:

No employer shall coerce or influence or attempt to coerce or influence his employees through or by means of threat of discharge or loss of employment to adopt or follow or refrain from adopting or following any particular course or line of political action or political activity.

The scope of the "political" speech and conduct which is protected by Section 1102 is not limited to support or opposition to candidates or parties.  Rather, it has been broadly defined to include the espousal of opinions concerning such matters as publicly supporting gay rights or opposing union closed shop rules.  

Juan Williams' positions (or alleged positions) thus seem to fall squarely within the definition of protected "political" speech -- indeed, NPR's position is that he was fired precisely because his positions were deemed too "political" and "controversial."  California employers should therefore think twice before emulating NPR's conduct in this episode.

Discriminatory "Stray Remarks" May Defeat Summary Judgment -- Reid v. Google

In age discrimination cases, plaintiffs frequently support their claims with evidence of comments by managers such as "you can't teach an old dog new tricks,"  that the company needs "young blood," or referring to some employees as "old timers."  When comments like these are made by those who not involved in the termination decision, or in a context unrelated to the decision, courts have tended to brand them as mere "stray remarks" which are not evidence of discrimination.

In Reid v. Google, Inc., the California Supreme Court held that such "stray remarks" cannot be "categorically" dismissed from consideration, however.   Instead, the Court explained that while such remarks may not be persuasive by themselves, they can tip the scale when combined with other evidence.  Thus when deciding whether to grant or deny summary judgment Courts must analyze the "totality of circumstances." 

In reality, this may not be much of a change in the law as courts were always really applying the "stray remarks" doctrine on a case-by-case, fact-specific basis anyway.  But the lesson for employers is to make all reasonable efforts expunge "politically incorrect" references from official communications.                 

Employers May be Liable for Honoring An Unenforceable Noncompete Agreement With Prior Employer -- Silguero v. Creteguard, Inc.

California takes a dim view of employee non-competion agreements, which are generally unenforceable and against public policy under Business and Professions Code sec. 16600.  Nevertheless, employers (and especially out-of-state employers) persist in including them in employment contracts under the theory that "it can't hurt" to have them as a deterrent and a potential source of leverage. 

When an employee leaves for a competitor these former employers will often send a sternly worded "cease and desist" letter to the new employer.  It has been widely accepted that this type of letter can carry certain risks for the old employer, such as a claim for intentional interference with contract.  But the recent Second District Court of Appeal decision in Silguero v. Creteguard illustrates that the new employer is also exposed to liability if it responds to the threat by terminating the employee.

The Silguero court began with the substantial body of case law holding that, in California, "the interests of the employee in his own mobility and betterment are deemed paramount to the competitive business interests of the employers."  Based on this strong public policy the Court determined that any explicit no-hire agreement between the two companies would have been illegal and unenforceable.  The Court further concluded that terminating Silguero "out of respect for" the non-compete agreement with his prior employer was merely achieving the same result in an indirect manner.  As a result, the Court found that if Silguero could prove his allegations, his new employer would be liable for the common law tort of Wrongful Termination in Violation of Public Policy.

The bottom line is that employers should not automatically terminate a new employee merely because he has executed a (presumably unenforceable) non-compete agreement.

Can An Employer Be Liable For Not Googling A Job Applicant?

I’ve written and spoke a lot during the last year on the topic of using the Internet (primarily Google) to conduct background research on job applicants and employees. I have always maintained that employers are permitted to use the Internet to conduct these “background checks.”

There were a number of attorneys out there who recommended that employers not do this, and there probably attorneys who still are maintaining this position. But a job applicant, or employee, would have a very hard time claiming that they have a privacy interest in anything posted on the Internet for everyone else to see. For example, individuals who do not take careful steps to protect their Facebook information, would have a hard time arguing that because they did not limit access to their information that it would still be private information.

I think the bigger concern these days is if employers do not search out potential applicants on the Internet. As Seth Godin recently noted, a friend of his found some very interesting information through Google about three people he thought would be a good housekeeper.

I could easily see a case made against an employer for negligent hiring when a simple and free Google search would have put the employer on notice that the individual has a criminal record or might pose a threat to other employees or customers. Now, employers still need to be careful about the information they are relying upon: it goes without saying that everything you read on the Internet is not true and some information found in the Internet cannot be used for employment purposes. For example, California’s Megan’s Law website that provides information about registered sex offenders clearly sets forth the information cannot be used for employment purposes.

Associate Sues Skadden For Wrongful Termination -- Green v. Skadden Arps

A labor and employment law associate who was fired from the LA office of Skadden Arps has filed a lawsuit against his ex-employer for retaliation and wrongful termination. 

According to the complaint in Green v. Skadden Arps, Mr. Green wrote an internal performance review in which he accused his own boss and another associate of being "incompetent."  His employer allegedly did not appreciate Mr. Green's dedication to an unvarnished "upward review" process and he was promptly fired for his "poor judgment" in rendering such an "intemperate review."  

The Complaint contains some references to Mr. Green's alleged complaints about vacation and sabatical policies.  But the main thrust of the Complaint is that Skadden supposedly violated public policy by terminating his employment in retaliation for giving a "factually accurate performance review."   As a labor and employment attorney the plaintiff (who is representing himself in pro per) presumably recognizes that there is no public policy protection for internal complaints that other employees are "incompetent."

My guess is that the 50-page Complaint is intended more as a privileged forum for a detailed public airing of the alleged mismanagement, incompetence and deficiencies of his former employer and colleagues.  I can't say the case offers any profound lessons (except that calling your boss "incompetent" is a bad career move).  But anyone who is, or was, an associate navigating the politics of a Big Firm may find the whole affair has a certain voyeuristic entertainment value.             


CA Supreme Court Holds Individuals Not Liable For Retaliation In Jones v. The Lodge At Torrey Pines

The California Supreme Court issued its ruling today in Jones v. The Lodge At Torrey Pines.  The Court held:
In Reno v. Baird (1998) 18 Cal.4th 640 (Reno), we held that, although an employer may be held liable for discrimination under the California Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.), nonemployer individuals are not personally liable for that discrimination. In this case, we must decide whether the FEHA makes individuals personally liable for retaliation. We conclude that the same rule applies to actions for retaliation that applies to actions for discrimination: The employer, but not nonemployer individuals, may be held liable.
The opinion can be read here.

US Supreme Court Tackles Employment Law Cases This Week

Today, the Court will hear argument in Gomez-Perez v. Potter, on whether the Age Discrimination in Employment Act bars retaliation by public employers for the filing of age discrimination complaints.  For more information about the facts of the case, click here.

On Wednesday, the Court is scheduled to hear oral argument in CBOCS West v. Humphries, on whether a race retaliation claim can be brought under 42 U.S.C. § 1981 (Section 1981).  Section 1981 provides that any “person within the jurisdiction of the United States” has the same right to “make and enforce” contracts, regardless of their skin color.  Section 1981 protects parties to a contract (both at the time of formation and post-formation).  The argument arises that Section 1981 applies to aspects of the employment relationship because that relationship is considered contractual, but courts have not defined to what extent this protection exists in the employment context.  Employees who have not filed a lawsuits within the time limits proscribed by Title VII (which allows for retaliation claims), often revert to Section 1981 in order to keep their claim alive. 

California Supreme Court Holds that Employers May Terminate Employees For Use of Medical Marijuana

Last week, the California Supreme Court held that it is not a violation of California law for an employer to terminate an employee who tests positive for marijuana, even though the employee was prescribed the marijuana for medical purposes under California’ Compassionate Use Act of 1996.

The conflict in Ross v. Ragingwire Telecommunications, Inc. was between California's Compassionate Use Act, (which gives a person who uses marijuana for medical purposes on a physician’s recommendation a defense to certain state criminal charges and permission to possess the drug) and Federal law (which prohibits the drug’s possession, even by medical users). The employer in this case terminated plaintiff’s employment based on a positive test for marijuana even through the plaintiff provided a doctor’s note explaining that he was prescribed marijuana to alleviate back pains. 

The Supreme Court explained that the employer's decision to terminate plaintiff was not illegal:
Nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and duties of employers and employees. Under California law, an employer may require preemployment drug tests and take illegal drug use into consideration in making employment decisions. (Loder v. City of Glendale (1997) 14 Cal.4th 846, 882-883.)
Plaintiff’s position might have merit if the Compassionate Use Act gave marijuana the same status as any legal prescription drug. But the act’s effect is not so broad. No state law could completely legalize marijuana for medical purposes because the drug remains illegal under federal law (21 U.S.C. §§ 812, 844(a)), even for medical users (see Gonzales v. Raich, supra, 545 U.S. 1, 26-29; United States v. Oakland Cannabis Buyers’ Cooperative, supra, 532 U.S. 483, 491-495). Instead of attempting the impossible, as we shall explain, California’s voters merely exempted medical users and their primary caregivers from criminal liability under two specifically designated state statutes. Nothing in the text or history of the Compassionate Use Act suggests the voters intended the measure to address the respective rights and obligations of employers and employees.
The Court also provided that a reasonable accommodation, as required under California’s FEHA, does not include an employer’s permission to use illegal drugs:
The FEHA does not require employers to accommodate the use of illegal drugs. The point is perhaps too obvious to have generated appellate litigation, but we recognized it implicitly in Loder v. City of Glendale, supra, 14 Cal.4th 846 (Loder). Among the questions before us in Loder was whether an employer could require prospective employees to undergo testing for illegal drugs and alcohol, and whether the employer could have access to the test results, without violating California’s Confidentiality of Medical Information Act (Civ. Code, § 56 et seq.). We determined that an employer could lawfully do both. In reaching this conclusion, we relied on a regulation adopted under the authority of the FEHA (Cal. Code Regs., tit. 2, § 7294.0, subd. (d); see Gov. Code, § 12935, subd. (a)) that permits an employer to condition an offer of employment on the results of a medical examination. (Loder, at p. 865; see also id. at pp. 861-862.) We held that such an examination may include drug testing and, in so holding, necessarily recognized that employers may deny employment to persons who test positive for illegal drugs. The employer, we explained, was “seeking information that [was] relevant to its hiring decision and that it legitimately may ascertain.” (Id. at p. 883, fn. 15.) We determined the employer’s interest was legitimate “[i]n light of the well-documented problems that are associated with the abuse of drugs and alcohol by employees — increased absenteeism, diminished productivity, greater health costs, increased safety problems and potential liability to third parties, and more frequent turnover . . . .” (Id. at p. 882, fn. omitted.) We also noted that the plaintiff in that case had “cite[d] no authority indicating that an employer may not reject a job applicant if it lawfully discovers that the applicant currently is using illegal drugs or engaging in excessive consumption of alcohol.” (Id. at p. 883, fn. 15.) The employer’s legitimate concern about the use of illegal drugs also led us in Loder to reject the claim that preemployment drug testing violated job applicants’ state constitutional right to privacy. (Id. at pp. 887-898; see Cal. Const., art. I, § 1.)
(footnote omitted).

The Plaintiff also alleged a cause of action for wrongful termination in violation of public policy. Generally, at-will employees can terminate or be terminated from their job at any time, but an employer cannot terminate an employee for reasons that violate a fundamental public policy of the state. The Court rejected plaintiff’s position that there was a fundamental public policy that permitted him to use medical marijuana and be under its influence while at work. “Nothing in the [Compassionate Use Act’s] text or history indicates the voters intended to articulate any policy concerning marijuana in the employment context, let alone a fundamental public policy requiring employers to accommodate marijuana use by employees."

The opinion can be viewed at the Court’s website (WRD) (PDF).

The EEOC's Insatiable Appetite For Publicity In The Litigation Process

Any company that has had to defend a case against the EEOC knows of the special aggravation associated with litigation against the Federal Government. Unlike private litigants, who are motivated primarily by money, the EEOC often pursues political, ideological or bureaucratic agendas that can seem downright baffling to private sector lawyers. For example, the EEOC will often pursue claims that the supposed “victim” does not even wish to pursue – the EEOC lost a case recently against Universal where the individual on behalf who the EEOC was litigating the case settled out of court privately, but the EEOC still litigated the case.  Read more about the EEOC's loss here. 

Furthermore, as noted recently by Judge Frederick J. Martone of the Federal District Court of Arizona (who had distinguished career on Arizona’s Supreme Court prior to being appointed to Federal Court) in E.E.O.C. v. Serrano's Mexican Restaurants, LLC, that the EEOC should not utilize press releases as a litigation tool – a common practice by the EEOC. Judge Martone stated:

Our denial of the defendant’s motion is not an expression of our view on the underlying merits or the propriety of the EEOC in using press releases as part of its approach to litigation. Lawyers have a professional obligation to avoid extrajudicial statements that may prejudice a proceeding, see ER 3.6, and an obligation to be truthful in statements to others, see ER 4.1. LRCiv 83.2(d). There is a big difference between promoting the public’s right to know through keeping proceedings public, on the one hand, see Foltz v. State Farm Mut. Auto. Ins. Co., 331 F.3d 1122 (9th Cir. 2003), and affirmatively issuing press releases, on the other. The United States, and its employees, have a special duty not to injure the reputations of its citizens. Nor should it use press releases as a bargaining tool in litigation.

Judge Martone’s comments are refreshing for employers and individuals who have had to litigate cases against the EEOC and to provide some good language for parties disputing the EEOC’s usual practice of issuing press releases upon settling a case. Hopefully many more judges in the Ninth Circuit follow Judge Martone’s example. 

[Hat tip to Jottings By An Employment Lawyer.]

Tips On Litigation

Mike Dillon, a General Counsel and Corporate Secretary for Sun Microsystems, Inc. has some great thoughts about litigation posted on his blog, The Legal Thing.  He notes:

No. 1 - You only litigate when you have an important interest to protect. Litigation is costly. Incredibly costly. But it is not the expense that is the real issue, it's the diversion of resources. Time employees spend reviewing e-mails and documents, educating lawyers and preparing for depositions is time away from the business. That's the real cost of litigation.

No. 2 - A non-judicial resolution is almost always preferable. When you file a complaint, you are turning over resolution of an issue to a third party - be it a judge, arbitrator or jury. To a great degree you lose control of the outcome.

No. 3 - You litigate when you have a high degree of confidence that you will prevail. Bluffing is for weekend games of Texas Hold'em . When you file suit, you need to have fully evaluated all aspects of the case to ensure that the outcome will be favorable.

No. 4 - You litigate to win. This means that your employees, board and management team fully understand and support the commitment (both financial and time) required to prevail. It also means having seasoned litigation counsel who understand your business and objectives.
While his perspective is towards enforcing a company's intellectual property rights, his analysis can easily be applied to defending employment litigation.  Most notably different is that employers do not chose when to be sued for wrongful termination or wage and hour claims.  However, the company should be completely prepared to defend itself in litigation - in California it is only a matter of when.  In order to develop a strong defense, the company should work with experienced employment attorneys to establish policies that (1) comply with the law and (2) assist the company when a lawsuit is filed.  I mention the second point because while companies have policies that comply with the law, when litigation starts the fact that you have complied with the law is good, but the company needs PROOF that it complied with the law.  An experienced employment litigator can help companies set up policies to document the areas that will most likely be areas of contention during litigation.  For example, California companies should have a clear "at-will" policy signed by the employee, should have a system (preferably computer based) for recording when employees take their meal breaks, and have a clear policy on rest breaks that is in some way acknowledged by employees.

Also, this process of working with an attorney in establishing solid policies is a great period to see if the company likes working with the attorney and (hopefully) develops a good relationship that is critical in any attorney-client relationship.  This also allows the attorney to become familiar with the company and its business and objectives as Mike mentions in No. 4 above.

Finally, companies need to understand Mike's point No. 4 - You litigate to win.  Once a case is filed against a company, the message communicated throughout the company should be that it is extremely important to spend the time necessary to assist the outside counsel in defending the case.  Owners, executives and employees must give their undivided attention to the litigation.  To do otherwise is a costly mistake.

DOL On-Line Self Assessment For Restaurateurs Employing Minors

The U. S. Department of Labor’s Wage and Hour Division website provides a self assessment tool for restaurants that employ minors. The assessment covers common violations of the Fair Labor Standards Act (FLSA ). Restaurant owners should note that this assessment does not cover California state law items. The assessment covers items that the DOL found in the past to be some of the most common problems encountered in restaurants, and therefore, are likely issues a DOL investigator will look for in a restaurant.

Here is a list of a few of the items covered in the assessment:

Do any workers under 18 years of age do the following:
1. Operate or clean power-driven meat slicers or other meat processing machines?

2. Operate or clean any power-driven dough mixer or other bakery machines?

3. Operate, load, or unload scrap papers baler or paper box compactors?

4. Drive a motor-vehicle on the job?

Do any workers under 16 years of age do the following:
5. Cook?

6. Bake?

7. Clean cooking equipment or handle hot oil or grease?

8. Load or unload goods from a truck or conveyor?

9. Work inside a freezer or meat cooler?

10. Operate power-driven bread slicers or bagel slicers?

11. Operate any power-driven equipment?

12. Work from ladders?

13. Work during school hours?

14. Work before 7:00 a.m. on any day?

15. Work past 7:00 p.m. between Labor Day and June 1?

16. Work past 9:00 p.m. between June 1 and Labor Day?

17. Work more than 3 hours on a school day, including Fridays?

18. Work more than 8 hours on any day?

19. Work more than 18 hours in any week when school was in session?

20. Work more than 40 hours in any week when school was not in session?

21. Do you employ any workers who are less than 14 years of age?

22. Do you fail to maintain in your records a date of birth for every employee under 19 years of age?

Click here to take the entire assessment. At the end of the assessment, there is a rules summary that explains an employer’s responsibility under the FLSA for the issues on the assessment.