The Never-Ending Interactive Process: Nadaf-Rahrov v. Neiman Marcus

Employers are required to engage in an interactive process with qualified disabled employees to determine whether such employees can be reasonably accommodated in the workplace. Many employers might conclude that if an employee's doctor says that the employee cannot work, and the employee has been out for seven months, then the employer can terminate the employee.  Not so fast, according to a new California court decision, Nadaf-Rahrov v. Neiman Marcus.  

In Nadaf-Rahrov, the employee, a clothes fitter, had recurrent back and joint pain, and eventually developed carpal tunnel syndrome.   Neiman Marcus provided the employee with various accommodations, including time off and a shortened workweek.  In December 2003, Nadaf-Rahmov went out on family medical leave, based on her doctor's written certification that she was "unable to perform work of any kind."  Her doctor later sent Neiman Marcus a letter recommending that Nadaf-Rahmov be reassigned to a position that would not involve "bending, standing, or kneeling."  

Nadaf-Rahmov's doctor extended her leave several times.  Ultimately, Nadaf-Rahmov exhausted her family medical leave and company-provided vacation and sick leave.  In July 2004, approximately seven months after Nadaf-Rahmov initially went out on leave, Neiman Marcus terminated her.  Neiman Marcus took the position that without a work release from her physician, Nadaf-Rahmov could not return to work.  Furthermore, Neiman Marcus believed it was not obligated to provide Nadaf-Rahmov with further leave as an accommodation.  

The Court of Appeals disagreed, and allowed Nadaf-Rahmov to proceed with her claims of disability discrimination, including failure to reasonably accommodate and failure to engage in the interactive process.  Nadaf-Rahmov's doctor submitted evidence that his "no bending/standing/kneeling" instruction was intended to mean that Nadaf-Rahmov could perform other work at Neiman Marcus.  He also offered his medical records to show that he always felt that Nadaf-Rahmov was capable of performing other jobs.  In addition, the Court found that although Nadaf-Rahmov testified that she was in substantial pain, there was no reason to conclude that she could not perform some type of work.  And, it found that Neiman Marcus had openings in several jobs that Nadaf-Rahmov could have potentially performed.  

The Court found that because Nadaf-Ramov and her doctor subsequently represented that she wanted to be reassigned to another position, Neiman Marcus's continued reliance on the doctor's earlier statement could constitute evidence of failure to interact.  It held that in some cases, an employer may need to consult directly with the employee's physician to determine the employee's restrictions and prognosis.  Furthermore, the Court found Neiman's decision to terminate Nadaf-Rahmov without advance warning or further discussion to be potential evidence of failure to interact.  

This decision indicates that employers can get in trouble by relying too heavily on doctors' notes in the interactive process.  It also suggests that the fluid nature of the interactive process means that a doctor's note must be examined in context, and existing information must be constantly reevaluated as the process moves forward and new information comes to light.  In fact, employers may need to, at some point in the process, directly communicate with an employee's doctor to fully understand the nature of the employee's disability.  Employers should not make assumptions based on information that is not current.  And, they should make sure that before terminating an employee, they have done everything they can to communicate with the employee about all available options, have verified the current opinion of the employee's health care provider, and have given ample notice to the employee before making the termination final.  

Employers Finally Get a Break: Brinker v. Superior Court

In recent years, California employers have faced a rising tide of class action lawsuits.  Often, these lawsuits are based on obscure legal requirements, technicalities, or language in the labor code that even the most seasoned employment lawyers have difficulty interpreting.  Even when the lawsuits have little merit, if "class certification" is granted -- meaning that the court allows one or two employees to sue on behalf of their coworkers -- employers often settle for huge sums.  Employers often prefer the certainty of settlement to the risk of bankruptcy they face in a jury trial, where anything can happen.  

Meal and rest breaks have been a focal point of class action disputes.  Breaks have long been required under California law.  But over the years, conflicting law has muddied the waters on break requirements, creating uncertainty for employers and employees alike.  On July 22, 2008, a California Court of Appeal issued a ruling, Brinker Restaurant Group v. Superior Court, which provides much needed clarity on the break issue.

The plaintiffs in Brinker attempted to represent a class of over 59,000 employees against their employer, an owner of several restaurant chains.  The plaintiffs' primary claim was that the employees had been denied breaks.  They claimed that any time record failing to show that required breaks had been taken established liability.  Because employees in California are entitled to one hour of pay for every missed break, and because claims for breaks can go back up to four years, the employer faced millions of dollars in liability.

The plaintiffs submitted numerous employee statements as evidence of the alleged break violations.  And they claimed that the employer could generate computer records proving that the violations had occurred.  The employer countered that it had a blanket written policy providing all of its employees with the right to take breaks.  It also argued that determining whether any particular employee had been denied a break would require the court to look at the facts relating to that particular employee.  For example, it was impossible to tell from the time records whether a missed break was a result of employer pressure or employee choice.  Thus, the employer argued, a class action was inappropriate. 

The court in Brinker held that employers need only provide employees with the opportunity to take breaks, not ensure that breaks are actually taken.  The court found that to hold otherwise would give employees the incentive to intentionally skip breaks and then sue to collect wages for missed breaks.  Because the time records did not reflect the reason for the missed break, each claim would have to be decided individually.  The class action claim, therefore, was inappropriate.  

The court reached other important conclusions as well.  It held that employers need only authorize and permit rest breaks for every four hours or major fraction thereof, and that rest breaks need not, where impracticable, be in the middle of each work period.  It also concluded that "rolling" meal breaks, are not required, rejecting the plaintiffs' argument that when meal breaks are taken close to the beginning of a shift, employees are entitled to meal periods for every five hours worked after the initial meal period.  And, the court determined that while employers cannot coerce, require, or compel employees to work off the clock, employers are liable only if they knew or should have know that employees were working off the clock.  

Because all of the plaintiffs' claims required case-by-case analysis, the court refused to certify the proposed class of aggrieved employees, effectively killing the lawsuit.  The day Brinker was decided, Gov. Schwarzenegger issued a statement approving the clarity that the decision will hopefully bring to the law of meal and rest breaks.

Brinker might be appealed to the California Supreme Court, and other California courts of appeal might reach different conclusions in similar cases.  In addition, the California legislature might attempt to rewrite the law in this area -- although the Governor's support for the ruling would likely make that difficult while he remains in office.  For now, however, Brinker provides useful guidance in this highly contentious area of California employment law.   

A California employer pays an employee premium pay of time and one half for working on a holiday.  The employee works 12 hours on the holiday.  Normally, twelve hours in a day entitles the employee to four hours of daily overtime in California.  But since the employer already paid premium pay at time and one half, does that satisfy the overtime obligation for that day?  Or does the employer have to pay time and one half on top of the premium rate for the four overtime hours?

According to a ruling issued yesterday by a California Appellate Court in a class action case, Advanced-Tech Security Services, Inc. v. Superior Court (LASC No. BC348282), the employer can use the premium pay as a credit towards overtime, as long as the premium is at least time and one half the employee's regular rate of pay.

This is a good ruling for employers, in that it cuts off another lawsuit angle and clarifies this issue.  However, it also serves as a reminder that California attorneys are very creative when it comes to filing claims for wage hour violations.  To avoid potential problems, employers need to be sure that their wage hour policies are airtight.  

[This post does not constitute legal advice.  For advice in specific situations, seek legal counsel.]

Employee Can Work Similar Job For Another Employer and Still Get Medical Leave

Assume your employee comes to you and requests medical leave.  You grant the leave, and then later learn that while on medical leave, the employee has been performing a similar job for another employer.  Does this prevent the employee from continuing on the medical leave that you granted?  Not necessarily, according to the recent California Supreme Court opinion in Lonicki v. Sutter Health Central.  According to this opinion, the employee's work for another employer in a similar job is evidence that the employee could have performed the job for the leave-granting employer.  But it is not conclusive evidence.  The court gave an example of an emergency room employee.  An emergency room that treats a high-volume of life-threatening injuries may be far more stressful than similar work in the emergency room of a hospital that sees relatively few injuries.  In addition, one position might be full-time, while the other might be part time.

This ruling will make it harder for California employers to challenge employee medical leave requests, because almost no two jobs are exactly alike.  So long as some distinction can be found between the positions at issue, the employee will have an argument that work for another employer in a similar position does not prevent the employee from remaining on leave.  Employers can take some solace in the fact that this situation is probably fairly rare, although, given this opinion, that may change.  

Metters v. Ralphs Grocery Co.:  Don't Disguise Your Arbitration Agreement

A recent California Appellate Court case, Metters v. Ralphs Grocery Co., sends a clear message to employers:  don't disguise your arbitration agreement if you want it to be enforced.  In Metters, the plaintiff employee wanted Ralphs to internally investigate his claim of discrimination.  Ralphs, however, wanted the employee to first sign off an an ambiguously titled "Notice of Dispute and Request for Resolution Form."  The form contained an area where the employee could set forth discrimination claims.  It contained language indicating that the employee could voluntarily mediate disputes with the company.  And it indicated that the employee, by submitting the form, was agreeing to mandatory, binding arbitration of any "covered disputes" as defined in a "Policy" of Ralphs' that was referenced but not attached, and according to the employee, never provided.  The employee signed the form and submitted it.   

The employee claimed he made numerous attempts to follow up with Ralphs regarding his complaint, but received no response.  He subsequently tried to sue Ralphs for discrimination, and Ralphs moved to compel arbitration.  The employee opposed the motion, claiming that he had never agreed to arbitrate his case. 

The trial court ruled that the employee was not bound to arbitrate his claims.  The court of appeal upheld the trial court's finding that there had been no "meeting of the minds" between the employee and Ralphs regarding arbitration.  The "ambiguous, nebulous form" might have been something a "transactional attorney sitting in an office somewhere" could have determined to be an arbitration agreement, but the employee could not be expected to figure that out.  

The lesson for employers?  Make sure your arbitration agreement looks, smells, and tastes like an arbitration agreement.  Clearly label your agreement, and spell out the consequences for an employee that signs it (waiver of jury trial, specific claims to be arbitrated, etc.)  Make it a stand alone agreement.  If the agreement says something is attached, make sure it is attached. And do not condition the investigation of claims of discrimination, as Ralphs did, on an employee's willingness to sign the agreement.  

[This post does not constitute legal advice. For advice regarding specific situations, seek legal counsel.]  

Pregnancy discrimination claims were up 14% in 2007, the biggest annual increase in 13 years, and a 40% increase from a decade ago.  According to an EEOC spokesperson, this may only be "the tip of the iceberg."  

Changing demographics indicate that females are becoming more aware of their rights in the workplace, including state and federal laws that prohibit discrimination against pregnant women.  

Discrimination on the basis of pregnancy, childbirth, or related medical conditions is treated as sex discrimination under both federal and California law.  Pregnant women must be treated the same as all other employees.  In addition, under California law, employers must provide reasonable accommodation for employees if a health care provider says that accommodation is required for pregnancy, childbirth, or related medical conditions.  

Thus, employers that fire, layoff, or discipline a pregnant employee must have ample evidence to demonstrate that the action taken was based on legitimate business reasons, and had nothing to do with the employee's pregnancy. 

In addition, California employers must be aware of the state's Pregnancy Disability Leave law, which provides up to four months of leave for women disabled as a result of pregnancy.  

Employers should review their policies and employee handbooks to ensure that they clearly prohibit pregnancy-based discrimination.  Employers should also train their managers on the risks that attach to decisions affecting pregnant employees, and on how to respond to inquires regarding leaves of absence.  

Note: this is general information, not legal advice.  Contact a lawyer for advice regarding a particular situation.  

Starbucks Tip Pool Ruling

A San Diego Superior Court Judge has issued a $100 million-plus judgment against Starbucks for its practice of allowing supervisors to share in barista tips.  Under California Labor Code Section 351, it's illegal for supervisors to share in tips left for employees.  This statute has been on the books since 1937, and I suspect that it was motivated by the New Deal-Era mentality that workers shouldn't be exploited by their capitalist employers.  The Starbucks ruling, however, shows how ridiculous this approach can be when applied to specific factual situations. Far from being members of the capitalist ruling classes, the Starbucks managers typically work the counter and make coffee for customers.  These customers naturally want to tip the person making their coffee.  Under this ruling, they can't do that.  For example, one of the managers affected by the ruling, shift supervisor Robert Velasquez, 18 years old, is often the only employee working at the crowded Starbucks at La Brea and San Vicente.  "When there are no baristas here, supervisors are the ones who make the drinks.  And we should be able to get the tips," said Velasquez.  Velasquez said he used his $2.50 an hour for tips for gas money, and that he would lose about $100.00 a week because of the ruling.  A harsh way to learn that he's a member of the ruling classes under California labor law.