Avoiding Employee Lawsuits
The California economic environment presents an entrepreneur with virtually unlimited opportunities. At the same time, a California business person faces a confusing and always challenging regulatory environment, especially for employment and labor law.
At Vision Law Corporation, we help businesses create productive work environments by establishing employment policies that discourage potential problems from emerging and assistance to enable companies to comply with California and federal employment law. When an employee lawsuit does arise, we protect our clients’ interests through aggressive litigation defense.
Vision Law believes that the best strategy for California businesses is to avoid an employee lawsuit in the first place. We have assembled a library of employment law resources for business managers and executives.
This includes an informative document called "How to Defeat Employee Lawsuits Before They Ever Happen." The complete document, with tips on avoiding lawsuits, is available in free reports.
Click on one of the Top 10 Lawsuits in the box for a summary and link to more info.
Top 10 Employee Lawsuits and How to Prevent or Defeat Them
Properly classifying employees as exempt versus non-exempt is critical. In our experience, however, most employers, including some large employers have misclassified one or more classes of employees.
The consequences can be devastating. For example, a non-exempt employee must be paid overtime. If a business has improperly classified an employee as exempt (and therefore exempt from overtime pay) and the employee has worked overtime without being paid overtime, the potential for unpaid overtime, penalties, interest and attorneys’ fees can be enormous.
The same idea goes for misclassifying “employees” as “independent contractors,” only now you have added the EDD, FTB, IRS, WCAB to the list of watchdog administrative agencies that may wish to scrutinize your decision. Learn how to avoid a wage and hours lawsuit.
Discrimination claims are one of the obvious and major exceptions to “at-will” employment. In a nut shell, an employer (defined as five or more employees under California law) may terminate employees “at-will,” but not because of their race, religious creed, color, national origin, ancestry, mental or physical disability, medical condition, marital status, sex, age, or sexual orientation. Learn how to avoid a discrimination lawsuit.
Wrongful Termination Claims and Whistle Blowing Claims
Ask any employee who has been fired and they will likely tell you it was “UNFAIR!” But was it “wrongful” in the unlawful sense? Most likely not. Ninety-five percent of the time there has been no violation of any law, statute, code, ordinance, common law (case law) or anything else.
The California Supreme Court carved out this massive exception to at-will employment in an employee lawsuit known as Tameny v. Atlantic Richfield Co. (“Tameny”). This initial exception has expanded over time and the California legislature has gotten into the act and created statutes. At Vision Law we refer to this whole exception group as “wrongful termination.”
The basic concept is employers cannot terminate an otherwise at-will employee if the termination would violate the “public policy” of the state of California.
If you are wondering what that means, welcome to the club. This is just one reason we defense lawyers have full employment when it comes to representing employers. The reality is no one knows in any given circumstance what is or what is not “public policy” sufficient to make an otherwise lawful termination unlawful. This includes, lawyers, judges, the jury, and of course managers and business owners. Learn how to avoid a wrongful termination lawsuit.
Leaves of Absence Related Claims
Your business has a potential leave of absence legal issue any time an employee starts missing work or showing up late to work.
Any time an employee asks you for time off work or has an attendance problem, realize the time off may be protected in some fashion. This does not mean the time off or time missed is beyond reproach and that employees may blow off work rules regarding time off or punctuality.
It does mean you should consider all facts known to you, properly analyze the circumstances and exercise extreme caution before deciding to terminate or take adverse action. This is true whether the termination reason is based on excessive time off, excessive tardiness, poor performance or all three. Learn how to a lawsuit related to leaves of absence.
The most common form of unlawful harassment is sex harassment. The alleged victim is harassed because of his/her sex. Most forget harassment can also be based on any other protected class, including race, religious creed, color, national origin, ancestry, mental or physical disability, medical condition, marital status, age, or sexual orientation.
There is “quid pro quo” harassment—“I’ll give you a raise if you give me sex.” The other kind of unlawful harassment is more subtle and is based on the “work environment” rather than specific trade offs for sex. The environment must be “hostile” to that person’s sex (or religion, or race, or sexual orientation, etc.). Learn how to avoid a harassment lawsuit.
What is a “breach of contract” claim in the employee context? It is another exception to “at-will” employment. They include:
- Breach of an express contract not to terminate the employment except for “good cause” or to keep the employee employed for a certain period of time;
- Breach of implied contract to the same effect;
- Fraudulent inducement (false promise) to employ or to employ for a certain period of time (the worse kind because this is really not a “contract” action, but rather a fraud claim which warrants “tort” damages, including potentially punitive damages).
Learn how to avoid a breach of contract lawsuit
Trade Secret Misappropriation and Unfair Competition
There are limits to unbridled competition. Generally speaking, there are no express prohibitions against hiring a competitor’s employee(s). However, the law will protect trade secrets, and sometimes other confidential information, of any business.
Customer lists and information, business methods, product costs, product pricing, engineering blue prints and designs, and research and development, among many other things, can all be trade secrets.
Thus hiring away a competitor’s employees alone may not be unlawful, but if these employees improperly use trade secrets, they can be sued, in addition to your business. Courts may stop the offending employee/business from using this information. Learn how to avoid a trade secret or unfair competition lawsuit.
Defamation Claims
Defamation (also known as slander or libel) is the verbal or written publication of a false statement of fact that injures a person’s reputation and causes damage.
In the employment context, this most often translates to an employee who is accused of stealing from his or her employer (or some other form of “misconduct”) and is fired as a result. The manager/owner then tells the entire company and all prospective employers who call about the former employee for a job reference. That’s a problem, particularly if it turns out the employer is wrong. Learn how to avoid a defamation lawsuit.
Invasion of Privacy and Drug Testing
Invasion of privacy relates to an employee’s right to be left alone, including at work. The highlights in the employment context relate to drug testing, medical examinations/medical information, computer/internet use, and monitoring of employees, either by video, telephone, or electronically. Privacy issues are some of the grayest in all of employment law and are evolving on a daily basis in the courts. Learn how to avoid a privacy lawsuit.
Class Actions, and Business and Professions Code 17200 Actions
The “class action” is an interesting creature found in both state and federal law that gives short shrift to the classic legal idea that everyone should have his or her own “day in court.” Rather than make each individual alleged victim prove their own case, a “representative” plaintiff can prove their own case on behalf of themselves and many others at the same time.
Business and Professions Code section 17200 Actions (also known as “Unfair Competition Law” or UCL) are a form of “representative action” similar in concept to “class actions.” Recently enacted California law for all intents and purposes closes the gap between “class actions” and Unfair Competition Law actions.
Class actions and UCL actions are vehicles that can exponentially increase the stakes in employment litigation. Learn how to avoid a class action lawsuit.
Top 10 Employee Lawsuits That Can Be Prevented
Contact Us
For a consultation with a Sacramento employment lawyer at Vision Law Corporation, call 916.780.1920, or contact us online.
Our attorneys serve clients throughout Northern California, primarily in the cities of Roseville, Sacramento, Cameron Park, Davis, El Dorado Hills, Folsom, Lincoln, Rancho Cordova, Rocklin, Stockton, and West Sacramento, and Woodland, California.
