Understand Your Rights. Solve Your Legal Problems
California is a perfect example, where its Supreme Court frequently announces law unique to that state and applies its rulings retroactively. This compels organisations to constantly partner with legal counsel to anticipate upcoming decisions or risk significant class action and representative PAGA lawsuits for past and future conduct.
This month, we have the fortune to hear from Seyfarth Shaw partner Paul J. Leaf. In this featured article, he draws upon his wealth of experience in California employment law to explain the pitfalls of and defences to retroactively applying new California Supreme Court rulings, while also delving into ongoing developments in California employment law.
Practicing in one of the most employee-friendly states, there is never a dull moment when advising my business clients about California employment law. I work on a wide range of employment issues, often on the following repeat matters: (1) independent contractor misclassification claims; (2) protecting my clients from the retroactive application of new California employment law that invalidates how they previously operated; and (3) strategising about how to deal with PAGA claims, including by updating arbitration agreements.
In 1989, the California Supreme Court announced that SG Borello & Sons, Inc v Department of Industrial Relations, 48 Cal. 3d 342 (1989) controls whether workers are independent contractors or employees. Under this nine-factor test, no single factor automatically establishes employee status. Indeed, even if multiple factors indicate employee status, a worker can still be deemed an independent contractor.
Despite businesses relying on Borello for nearly 30 years to structure their workforces, in Dynamex v Superior Court, 4 Cal. 5th 903 (2018), the California Supreme Court adopted a three-factor test to replace Borello for certain claims. The ABC test significantly expands the scope of employment, because if the hiring entity fails to establish any factor, the worker is deemed an employee.
After Dynamex, the ABC test became effective immediately. Businesses thus had to scramble to assess whether their existing independent contractor relationships – even if lawful under Borello – could pass the ABC test.
If a hiring entity was unsure whether it could satisfy the ABC test, it had to pivot to an employee model, modify its own business practices, or risk a misclassification lawsuit. The cost of such a lawsuit can be staggering, because misclassifying a worker as an independent contractor gives rise to a litany of derivative claims that may be actionable through class action and PAGA lawsuits, including willful misclassification, unpaid minimum wages and overtime, improper meal and rest breaks, failure to reimburse business expenses, inaccurate wage statements and untimely payment of wages. Willful misclassification alone can give rise to $25,000 in penalties for each worker misclassified as an independent contractor.
Practicing in one of the most employee-friendly states, there is never a dull moment when advising my business clients about California employment law.
What’s more, in Vazquez v Jan-Pro Franchising Int’l, Inc, 10 Cal. 5th 944 (2021), the California Supreme Court ruled that the ABC test applies retroactively. Thus, even if hiring entities had properly utilised workers as independent contractors while Borello controlled, the backwards application of the ABC test created four years of potential class action liability and one year of potential PAGA liability during that Borello period.
Yes, because the California Supreme Court regularly applies its decisions retroactively, including when it announces new law. Based on statutes of limitations, such retroactive decisions generate four years of potential class action liability and one year of potential PAGA liability, often across multiple claims. This is because a single claim for unpaid wages gives rise to derivative claims, including penalties for inaccurate wage statements, penalties for untimely payment of wages and attorneys’ fees. Consider a few examples.
For approximately 70 years, businesses in California relied on a federal doctrine holding that up to 10 minutes of work time each day need not be compensated if the time was difficult to track. This de minimis doctrine was endorsed by the US Supreme Court and then applied to California claims by the Ninth Circuit and the California Division of Labor Standards Enforcement (DLSE) – the state agency charged with enforcing California’s wage and hour laws. Further, a California Court of Appeal applied the federal de minimis doctrine in an employee compensation case. No California court had deemed the federal de minimis doctrine inapplicable under California law.
But in Troester v Starbucks Corp, 5 Cal. 5th 829 (2018), the California Supreme Court rejected the federal de minimis doctrine. Troester is being applied retroactively.
In 1990, 2011 and 2013, the California Court of Appeal held that an eight-hour sleep period could be excluded by written agreement from hours worked in a 24-hour shift. The DLSE agreed that such sleep time need not be compensated. No California court had reached a contrary conclusion.
But in Mendiola v CPS Sec. Sols., Inc, 60 Cal. 4th 833 (2015), the California Supreme Court first announced that sleep time during an on-call shift can be compensable. Mendiola was made retroactive.
Since at least 2012, multiple federal courts concluded that premium pay – the hour of compensation owed to employees for an improper meal or rest break – is paid at an employee’s base hourly wage, not the potentially higher (and more difficult to calculate) regular rate of pay. In 2019, the first California Court of Appeal to consider this issue agreed.
But in Ferra v Loews Hollywood Hotel, LLC, 11 Cal. 5th 858 (2021), the California Supreme Court held that premium pay must be paid at the regular rate of pay. Ferra was made retroactive.
Starting in 2012, three California Courts of Appeal held that premium pay is not a wage that can trigger penalties for inaccurate wage statements or untimely payment of wages. At least seven federal courts applying California law agreed.
But in Naranjo v Spectrum Sec. Servs., Inc, 13 Cal. 5th 93 (2022), the California Supreme Court parted ways with these authorities. The California Supreme Court has not barred retroactive application of Naranjo.
The California Supreme Court regularly applies its decisions retroactively, including when it announces new law.
Among other strategies, I establish a defence that shields my clients from retroactive penalties, because those penalties – as opposed to any unpaid wages – are usually the greatest source of potential liability.
When the California Supreme Court applies new law retroactively, the resulting owed wages are often small, but the derivative penalties stemming from those unpaid wages can be crippling. For example, with one employee, a single unpaid penny in wages can trigger up to $4,000 in penalties for inaccurate wage statements, up to 30 days’ worth of compensation for not timely paying the missing wages at separation (for an employee earning the $15 California minimum wage, these penalties max out at $3,600) and attorneys’ fees. That is $7,600 in penalties, plus attorneys’ fees, for one unpaid penny in wages. Multiply that by hundreds or thousands of employees, including employees earning above the minimum wage who trigger higher waiting time penalties, and companies are quickly facing significant liability.
Under California law, an employer has a good faith dispute defence against these wage statement and waiting time penalties (among other wage-related penalties) if it reasonably believed it was following the law at the time and the law later changed, or if the law was unclear during the pertinent period.
The mere fact that the California Supreme Court chooses to decide a case should necessarily establish the good faith dispute defence. After all, the California Supreme Court often takes up cases to resolve a split of authority among federal or lower state courts. Other times, federal appellate courts find it so difficult to forecast how the California Supreme Court will decide an issue of state law that they ask the California Supreme Court to decide the issue for them.
Yet, as in all of the retroactively applied California Supreme Court cases discussed above, that Court often does not address whether a good faith dispute defence applies. As a result, companies must hire lawyers to litigate whether they are subject to penalties, and many companies are compelled to settle cases at inflated prices due to the spectre of massive penalties.
When the California Supreme Court applies new law retroactively, the resulting owed wages are often small, but the derivative penalties stemming from those unpaid wages can be crippling.
Yes. Starting with prospective application, final California Supreme Court decisions are effective immediately. If a new decision entitles employees to additional wages, the employees should begin accruing those wages right away.
But the California Supreme Court should provide a grace period before derivative penalties stemming from those wages can kick in. After all, some businesses have giant workforces with complicated personnel software controlled by third parties, which makes instant changes impossible. Smaller businesses may not have the resources to immediately figure out how to comply with new law. It is unfair to penalise well-intentioned, diligent employers that are willing to pay the new wages but simply need time to comply.
Employers have advance notice of new laws passed by the legislature well before they become effective, which gives employers time to make changes and avoid penalties. The same should be true of new rules coming out of the California Supreme Court. Retroactively applying new law without the California Supreme Court specifying whether a good faith dispute defence exists essentially requires employers to predict the future or to constantly engage lawyers. Aside from a decision by the California Supreme Court, there is no official authority employers can consult to derive a definitive understanding of what California employment law requires and that will shield against future penalties if the law changes.
As shown by Troester and Mendiola, employers cannot unreservedly rely on what the DLSE says about California law, because the California Supreme Court may ignore that agency’s interpretations and then retroactively apply contrary law without specifying whether the good faith dispute defence governs. Nor can employers unreservedly rely on opinions from the California Courts of Appeal or federal courts, because as shown by Ferra and Naranjo, the California Supreme Court can disagree with those courts and then retroactively apply contrary law without addressing the good faith dispute defence.
The lack of a reliable self-help guide short of a California Supreme Court opinion leaves businesses having to constantly engage lawyers to anticipate forthcoming legal changes. But employment lawyers – even judges – cannot always predict how the California Supreme Court will decide an issue.
For instance, Ferra shows that even when lawyers parse a statute and follow how the California Court of Appeal and multiple federal courts interpreted that statute, the California Supreme Court may disagree, make its decision retroactive without addressing the good faith dispute defence, and open employers who followed their lawyers’ advice and published court opinions to years of potential liability for unpaid compensation and penalties.
The lack of a reliable self-help guide short of a California Supreme Court opinion leaves businesses having to constantly engage lawyers to anticipate forthcoming legal changes.
In Ferra, the California Supreme Court held that premium pay must be paid at the “regular rate of pay”. That phrase is a term of art with a long-established meaning that is often used in statutes and Wage Orders to distinguish from the only other compensation metric available: an employee’s base hourly wage.
The Ferra holding was not obvious beforehand because the statute and Wage Orders that require premium pay do not say it must be given at the regular rate of pay; a different term is used. Several district courts and the California Court of Appeal agreed that premium pay is given at the base hourly wage, because if the legislature intended premium pay to be given at the regular rate of pay, it easily could have said so, as it did elsewhere in statutes for different types of compensation.
The California Supreme Court can resolve this retroactivity problem when it announces new law by opining then whether the good faith dispute defence is available. Sometimes these legal changes may be obvious and employers will be penalised. But when legal changes are not foreseeable, penalties are unfair and no employer should have to spend money fighting over the good faith dispute defence or be forced to accept inflated settlements.
PAGA is a California statute that authorises employees to file lawsuits to recover civil penalties on behalf of themselves, other employees and the State of California for violations of the California Labor Code. A major reason that PAGA lawsuits have often been filed is a line of cases beginning with the California Supreme Court in Iskanian v CLS Transp. Los Angeles, LLC, 59 Cal. 4th 348 (2014), which holds that PAGA claims cannot be waived or compelled to individual arbitration.
But in Viking River Cruises, Inc v Moriana, 142 S. Ct. 1906 (2022), the US Supreme Court held that (1) a plaintiff’s individual PAGA claim can be compelled to arbitration and (2) as a matter of state law standing under the PAGA statute, a representative PAGA claim brought on behalf of other employees must be dismissed once the plaintiff’s individual PAGA claim has been compelled to arbitration. These holdings are significant because they allow businesses to avoid class actions and representative PAGA claims while remaining in arbitration.
When legal changes are not foreseeable, penalties are unfair and no employer should have to spend money fighting over the good faith dispute defence or be forced to accept inflated settlements.
Businesses still face real PAGA risk, however.
First, the California Supreme Court has granted review of Adolph v Uber to consider the second holding of Viking River. The California Supreme Court could decide this statutory standing issue in a way that permits a representative PAGA claim brought on behalf of other employees to proceed in court, irrespective of whether the plaintiff is arbitrating her individual PAGA claim.
Still, some employers can get around Adolph and receive the full benefits of Viking River. For some businesses, all of their employees have signed an arbitration agreement with a PAGA waiver. This means that even if the PAGA standing portion of Viking River is undone by Adolph, and trial courts retain jurisdiction over representative PAGA claims after the plaintiffs have been compelled to arbitrate their individual PAGA claims, there will be no one available to participate in those representative PAGA actions. This conclusion derives from executed waivers, not standing, which makes Adolph irrelevant. To secure a dismissal, businesses must make this argument when courts intend to stay a representative PAGA claim until Adolph is decided. If a court nevertheless stays the case, the employer has great settlement leverage.
Second, if this approach is followed, an employer can face a flood of individual arbitrations, assuming opposing counsel has access to a meaningful percentage of the workforce. Because California law requires employers to pay all expenses unique to mandatory arbitration, employers face significant arbitration costs not present in court, such as filing fees and arbitrator fees.
To minimise these risks, employers can add mass arbitration protections to their arbitration agreements, including a process to arbitrate a few test cases while the rest of the portfolio is stayed and no arbitration fees are incurred.
There are many future developments that employers should watch, including the following:
Based on current trends, the California Supreme Court could make it unlawful for employers to round employee time punches. It already barred rounding of employee meal period time punches in Donohue v AMN Servs., LLC, 11 Cal. 5th 58 (2021). And more recently, the California Court of Appeal in Camp v Home Depot USA, Inc, 2022 WL 13874360 (Cal. App. Oct. 24, 2022), held that if employers have captured the exact amount of time employee have worked, rounding is unlawful, even if it benefitted the employees overall.
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Under California Assembly Bill 51, employers may not require employees as a condition of employment to execute arbitration agreements covering claims under the California Fair Employment and Housing Act or the California Labor Code. In Chamber of Commerce of the US v Bonta, the Ninth Circuit will determine whether AB 51 is preempted by the FAA.
Though PAGA claims need not meet class action procedural requirements, some courts hold that PAGA claims must nevertheless satisfy a similar standard of manageability. The California Supreme Court recently granted review in Estrada v Royalty Carpet Mills, Inc, 76 Cal. App. 5th 685 (2022) to resolve a split of authority concerning whether trial courts may strike or limit PAGA claims as unmanageable.
I was initially a commercial litigator at Kirkland & Ellis LLP, learning from incredibly bright attorneys on ‘bet the company’ cases. But the ‘one and done’ nature of such litigation made it difficult for me to partner with clients so I could help steer their day-to-day business operations. After friends practicing employment law confirmed that working in this area would allow me to more deeply integrate with my clients, I joined Seyfarth Shaw in 2015.
Being an employment lawyer has delivered on all fronts. I regularly work with the same clients on multiple cases, which gives me a significant understanding of their businesses. I then use lessons learned from litigation and attempt to predict future legal precedent to modify my clients’ policies and practices to minimise their liability. I love the challenge of finding creative legal solutions that meet my clients’ business preferences.
My deep interest in employment law and desire to achieve great results for my clients make it easy to work very hard and passionately at my job. I was thus very proud to be recognised last year by the National Hispanic Bar Association as one of the top lawyers under 40 across the US.
Given my interest in policy, I want to argue a case before the California Supreme Court that defines a far-reaching part of California employment law. On a personal level, I want to dedicate more time to international travel with my wife and parents, publishing op-eds about US foreign policy (I have written extensively about China’s rise and other international security issues in the Indo-Pacific region), playing pickleball, and putting more miles on my Peloton tread.
Paul J. Leaf, Partner
2029 Century Park East, Suite 3500, Los Angeles, California 90067-3021, USA
Tel: +1 213-270-9724
Fax: +1 310-551-8449
Paul J. Leaf is a partner in the Los Angeles office of Seyfarth Shaw LLP. He represents businesses in employment and commercial disputes, with a focus on wage and hour class actions and representative PAGA actions. Paul also defends companies against claims of discrimination, harassment, retaliation, breach of fiduciary duty, wrongful termination, non-compete and non-solicitation. Paul enjoys leveraging lessons learned from litigation and anticipating future legal developments to draft forward-looking personnel policies for his clients in order to prevent lawsuits altogether.
Seyfarth Shaw LLP provides advisory, litigation, and transactional legal services to clients worldwide. With approximately 900 lawyers across 17 offices, Seyfarth Shaw and its employment group consistently earn top spots in national rankings of law firms.
Shannon Dorvall, general counsel at Imhoff & Associates, shares her specialised knowledge of expungement and its uses in this article.
Expungement, sealing and confidentiality are three legally distinct methods of dealing with criminal records.
The general idea behind an expungement is a do-over or reset. It is meant for people who committed a minor crime like shoplifting, minor drug offences or driving on a suspended license. People make mistakes. Mistakes should not define people. Expungements are an opportunity to start fresh in job searches and other facets of life.
Several people seeking expungements are people who did something ill-advised in their 20s or 30s and have moved forward, becoming an entirely different person often with a new life. Those small convictions can be the difference in failing to receive job offers or promotions in many fields. The goal is not to paper over someone’s past, but rather to give them another try.
Most states allow for some form of expungement for misdemeanours and over half allow expungement of certain felonies. There is no broad or general federal expungement statute and federal courts do not have the authority to expunge records of a valid federal conviction.
In most states where expungements are available, a person must prove they are worthy of the second chance. The grant of an expungement is not automatic. This is shown through an otherwise clean record, maintaining gainful employment, volunteerism and reference letters from loved ones.
People make mistakes. Mistakes should not define people.
In California, we use the term ‘dismissal’, meaning that the Court reverses a guilty plea and enters a dismissal. On paper, it looks like the case was not prosecuted. Unfortunately, this produces no change to the person’s arrest record. The former requirement to seal and destroy an arrest record was a finding of ‘factual innocence’. This was a nearly impossible standard as the person was required to demonstrate they were actually innocent of the crime versus merely not guilty. This often required a finding that no crime occurred or determining the actual culprit with some finding of guilt regarding that person. Few people were successful in reaching that standard.
Now, the law has been expanded to allow sealing and destruction of arrest records in many more cases, allowing more people a fresh start.
For immigrations purposes, only full and unconditional pardons can avoid deportation for a criminal conviction. Expungements, sealing or other mechanisms are not recognised unless there was a substantive structural or procedural error during the conviction process that led to the post-conviction relief.
Although each state differs, most require the person seeking the expungement to begin the proceedings since the process is not automatic after the completion of a sentence.
The documents and information needed to complete the petition will vary based on jurisdiction. It may be imperative to have as much documentation such as arrest records, case numbers, judgments, etc. as possible to ensure the form is completed accurately.
After the filing is prepared, applicants should be prepared to submit the filing fee required by the court. Applicants should research all the required fees prior to submitting their application to ensure it is not rejected or delayed. Some courts, where applicable, may have a filing fee per offence a petitioner is applying for.
In states where a hearing is required for the expungement, the court will set a date. The hearing may be set anywhere from 30 days to months out depending on scheduling.
Another important thing to remember is that law enforcement and other agencies may take several months to destroy records.
Expungements are an opportunity to start fresh in job searches and other facets of life.
There is a common misconception that juvenile records are automatically sealed upon the juvenile reaching 18. The laws regarding this vary widely by state. Few states allow full expungement or sealing of juvenile records, especially in the case of felonies.
For those select few states, the process is usually not automatic. Probation or the prosecution has to make the request. Where juvenile records are subject to confidentiality while the person is a minor, the states have recognised the unique nature of these documents. The files go well beyond normal criminal proceedings to include things like mental health records, school records, grades, medical records, parental history, history of abuse and dozens of other intimate details. There is a movement to make this process automatic and remove barriers such as filing fees, but it is still off in the horizon.
California has been leading the charge in the area of automatic record sealing. Beginning on 1 August 2022, the court record of convictions set aside at any time under certain diversion and deferred entry of judgment code sections where the person has completed probation terms will be automatically sealed, per the ‘Clean Slate Act’ described below. Under this Act, the state records repository is presently prohibited from including in responses to requests from the public information about convictions that have been set aside in certain situations.
Beginning 1 January 2023, California will expand automatic record relief to all felony non-convictions six years after the date of arrest. California law currently excludes felony arrests from eligibility for automatic relief if the charge is serious enough to potentially result in incarceration at a state prison.
Other felony non-convictions remain eligible for automatic relief after three years unless the charge was punishable by eight years’ incarceration or more in a county jail.
The law also expands eligibility for automatic relief to persons convicted of a felony and sentenced to probation on or after 1 January 2005 if they violated probation but later completed all terms of supervision. Previously, a probation violation would prohibit relief. Convictions for certain serious or violent felonies and registerable sex offences are not eligible for relief.
The expunged offence can still be used as a ‘prior’ to enhance sentences or charges in most instances, barring specific exceptions in state law prohibiting it. The person is usually also required to disclose an expunged conviction if they are seeking a licensure in certain fields like teaching or to obtain security clearance.
In most cases, the expungement orders do not automatically restore firearms rights.
California has been leading the charge in the area of automatic record sealing.
Per 18 U.S.C. § 922(g)(1), convictions in any court punishable by imprisonment exceeding one year, whether the conviction is under state or federal law, are subject to the prohibition on possession of firearms under federal law. Certain state laws may also prohibit possession of a firearm. Domestic violence convictions also terminate firearms rights under federal law § 922(g)(9).
People with state convictions may avoid the federal bars in §§ 922(g)(1) and (g)(9) if their convictions have been pardoned, set aside or expunged, or if their civil rights have been restored, unless the relief they obtained “expressly provides” that they “may not” possess firearms. See 18 U.S.C. §§ 921(a)(20), (a)(33)(ii). Automatic restoration of civil rights can restore firearms possession rights, but ambiguity remains.
Circuits remain split on how to interpret the ambiguous language of § 921(a)(20). What does “free of state firearms disabilities” mean in order for a person to take advantage of the relief offered by §§ 921(a)(20) and (a)(33)? Also, the term ‘expungement’ in these federal laws is overbroad and there is an open question as to whether it applies if a record has been sealed but not completely destroyed.
A few states have information-sharing agreements with private companies that sell records – including juvenile records – online for a nominal fee. Online record check companies often use out-of-date information pulled from public court dockets and arrest or inmate reports with little to no concern for the accuracy of the information.
Those initial reports rarely match the current status of the person’s record but are difficult to correct. The online services can charge to ‘research’ a request for correction but are unlikely to correct the mistake short of a legal action. Clients and counsel should always keep copies of any orders granting sealing or expungement to strengthen their argument if there are online mistakes.
Counsel can assist clients in gathering and presenting the request in the best light. The prosecutors are usually given notice and an opportunity to object to motions where the court has discretion in granting the request. As with any situation involving courts and prosecutors, clients are best served by having an experienced advocate to assist them.
‘Ban the box’ legislation seeks to remove questions about criminal history from employment applications. Specifically, it seeks to eliminate the checkbox that asks if applicants have been convicted of a crime. Approximately 31 states, including California, have passed some form of ban the box legislation or fair chance policy. This generally requires that a conditional offer of employment be made prior to asking about convictions. 11 states also require private employers to remove questions from job applications that ask about previous criminal convictions.
‘Ban the box’ is currently focused on employment laws, but criminal records can negatively impact state or federal licensure, housing availability and education opportunities. If the goal is rehabilitation, forcing someone to wear a scarlet conviction for life prevents moving forward.
Federal employers are also subject to ‘ban the box’ rules that prohibit asking about convictions unless a conditional offer of employment has been made. Anything involving security, transportation or like jobs are excluded from ‘ban the box’ rules.
As with any situation involving courts and prosecutors, clients are best served by having an experienced advocate to assist them.
H.R. 6667, aka ‘The Fresh Start Act of 2022’, is a bill pending in Congress to allow expungement of federal non-violent offences. If passed, the law would require automatic granting of an expungement for certain federal offences seven years after completing the sentence for the offence and discretionary relief one year after completing the sentence. The bill has a low chance of passage given the newly elected Congress that will form in January, but it is a large step in the right direction. Federal law for expungement is sharply limited to first time possession cases if someone was under 21 at the time of the offence.
Courts and prosecutors are reluctant to grant the person a fresh start. Even convictions that should be automatically sealed require vigilance to make sure a person gets the relief they deserve on the local and state level. Some of my biggest fights on these cases come not from the local prosecutor, but the state Department of Justice failing to recognize the relief.
I am one of those people who always wanted to be an attorney without having a clear idea of what they did. There were no other attorneys in my family, but my aunt was a barber who cut hair for many of the local lawyers. I would sit in her shop for hours and talk to various attorneys about the law, why they became lawyers and what they loved about their job. I would listen, completely enraptured, as they discussed a big trial or a hard-fought motion. The litigators were characters who both then and now remind me of street brawlers.
I won my first ‘trial’ in eighth grade. We were doing a project on American History and were assigned roles where we put actions from history on trial in front of a jury to decide if the actions would now be a crime. I was given the role of defence attorney. A local attorney volunteered to assist with the mock trial. My side won and our teacher was very upset because I was supposed to lose. The attorney calmed him down and explained the teacher should appreciate seeing the birth of a future attorney. I was hooked.
Not everyone can be Atticus Finch, but I wanted to try, so I applied to law school.
I attended law school at the University of Montana School of Law. Likely due to my eighth grade History project and watching the OJ Simpson trial live in high school, I was drawn to the criminal and Constitutional law courses. I completed a year of clinical work at the Federal Defenders of Montana around the time Crawford v Washington was decided. Watching the tireless dedication of the attorneys in the office combing through every single file they had ever had to see if someone may have qualified for habeas relief was inspiring. I lost count of the number of habeas I drafted that year.
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I moved to California and have been practicing criminal law with Imhoff & Associates for my entire career. I recently transitioned to General Counsel for our Firm giving me more time to mentor interns and young lawyers.
Learn everything you can from anyone willing to teach you. Many aspects of life prove useful in criminal defence. I had no idea how much math and science I would need to read police reports, DNA profiles, autopsy reports and every other facet of discovery. Be open to seeing every side of an argument. Being blindsided is never fun, but there are definitely fun aspects to the work. I tell every intern the same thing. Do not assume you are right. Do the work and know you are.
Shannon Dorvall, General Counsel
12424 Wilshire Blvd, Suite 700, Los Angeles, CA 90025, USA
E: shannondorvall@criminalattorney.com
Shannon Dorvall is an experienced general counsel who has transitioned from a strong multi-year history of practicing as a trial attorney in criminal defence. Shannon graduated from The University of Montana School of Law and is skilled in trial practice and post-conviction appellate and habeas work. She is licensed to practice in all California state and federal courts as well as the Supreme Court of the United States.
Imhoff & Associates is one of the largest criminal defence law firms in the United States, with a strong presence in most states as well as the District of Columbia and Puerto Rico. Its team handles a wide variety of criminal cases, including DUI/DWI, white collar crime, violent crime and more. The firm also assists in matters involving expungements, parole violations, criminal appeals and bail reduction.
Each of these terms has a different meaning in different states. But regardless of this, each of them is a trial in which a guardian or trustee is responsible for his ward. We will look at the meanings of these terms in California. The main difference between a guardianship and a conservatorship lies in the fact that the first is established over a minor, and the second is already over an adult.
Established by the court to control the finances and personal affairs of a minor. If you have children, the best solution is to appoint a guardian for them in your will. In this case, if there are no living or capable parents left, they will not be left alone, there will be a person who will take care of them. Otherwise, a court will be appointed to appoint a guardian.
On the other hand, you can file a petition to take a minor into your custody. The application form and procedure itself vary from state to state. Examples of appeals to the guardianship authorities can be deprivation of parental rights or abandonment of the child by the parents.
But a person who wants to become or is elected a guardian does not become one immediately but is appointed only after the court satisfies this request. The application for admission is submitted by relatives of the parents, who will be able to participate in the court and object to the appointed person.
There are two types of guardianship: over a person and over the property. The first has the right to manage the personal affairs of the child, for example, place of residence, school, and so on. But he cannot regulate finances, which may be from inheritance, social security, and others.
The guardian of the property has a legal right to the minor's money. Upon reaching the age of majority, he is obliged to file with the court the accounting department and an application for the termination of guardianship.
Appointed when an adult, due to disability or addiction, cannot make decisions regarding medical care, money, and daily life. It can also be subject to undue influence or fraud. Some of the reasons for establishing conservatories may be dementia, stroke, severe psychological illness, or disability. If your relative or a close person needs such guardianship, we recommend that you consult with a conservatorship attorney, he will help you choose the right type and complete all the documents.
The conservatory is appointed only by the court, after hearing evidence that the adult needs help. This body may decide on the already chosen guardian or appoint another independently. A person who is allegedly considered incompetent has the right to hire a lawyer and object to the establishment of guardianship. In some states, a competent person may, at his own request, appoint a person who will dispose of his property. The appointed person is obliged to report his actions concerning his ward before the court. Usually, they decide where the incapacitated person will live, what needs and medical care he needs, and where he will invest his assets. Basically, the money of the ward is placed in safe financial accounts or in bonds, which can be used only with the permission of the court. When this permission is requested, immediate family members such as spouses, children, and parents are also notified. The conservator must report all expenses to the court annually, or more frequently if necessary. This type of assistance, when used correctly, is a very useful method of protecting a person with a disability. And the constant participation in this court is an additional guarantee.
Conservation may be general or limited. General means that the person under guardianship cannot make decisions on his own. And in the limited, most of the work is done by the ward himself, the conservative has the right to control only what is appointed by the court.
Does guardianship end in death? Not quite so, this type of guardianship can be terminated either by a court decision or by the death of the ward. But in the latter case, the custodian is obliged to keep the property until it is transferred to relatives or a personal representative. He will also be required to provide the court with a final account of his actions before and after the death of the ward. Only after all these procedures the conservatory officially ends.
Thus, the difference between these two concepts is quite clearly visible. The conservatory is also considered more difficult because an adult usually has more money, possessions, and responsibilities. But guardianship is also not simple, the appointed person becomes the de facto parent for the minor. But each of these processes is controlled by the court, and if worthy people are appointed, there will be no problems. In case of bad faith or for advice on these issues, we recommend that you contact specialised attorneys such as Barr & Young Attorneys.
A lot of drivers don't like it when motorcyclists overtake traffic. They think that leaving the lane and going in front of other vehicles is unsafe. However, the truth is that not all US states consider the practice illegal. Lane splitting is a safer option for motorcyclists. Giving them the ability to get out of the way of congestion and having to travel at a slower speed than the other traffic. But, is it legal to lane split in every state? Let's take a look at motorcycle lane splitting laws. Read on.
Lane splitting, also called white-lining, nose riding, or lane sharing, is the practice of riding a motorcycle between lanes or lines of stopped or slow-moving cars. It is controversial, and its legality varies from place to place. In the United States, lane splitting is illegal in most states, with a few states allowing it with some exceptions.
Lane splitting has several benefits, chief among them being the decreased likelihood of being rear-ended by a car. It also decreases the amount of time spent stopped in traffic and can be a lifesaver in a traffic jam. However, lane splitting can be dangerous and is not for everyone. It requires skill and experience and even then can be risky. Motorcyclists who choose to lane split should be aware of the risks and be sure to ride defensively.
Lane splitting, or riding between lanes of stopped or slowly moving traffic, is a great debate. Some say it's illegal, while others argue it's a safer way to ride. So, what's the real answer?
In some states, like California, lane splitting is legal, while in others it is not. However, intentionally blocking a motorist is illegal.
In most states, motorcycle lane splitting in the US is not explicitly illegal. However, that doesn't mean it's necessarily legal, either. The best course of action is to check your local laws and use common sense when lane splitting.
Some safety experts argue that lane splitting is safer than riding in a lane of traffic. They say it allows riders to get out of the way of danger, and it can help reduce traffic congestion.
Others say that lane splitting is dangerous and distracting. They argue that it's hard for drivers to see motorcycles splitting lanes, and it can lead to motorcycle lane splitting accidents. You may see this page for more facts.
It can be difficult for motorists to see motorcycle riders who are lane-splitting. This increases the risk of a collision. Additionally, lane splitting can also be dangerous for riders themselves. When a motorcycle rider lane splits, they are more likely to be hit by a car door or be involved in a multi-vehicle collision.
Given the risks, motorcycle riders need to use caution when lane splitting. If possible, they should avoid lane splitting during heavy traffic periods. Additionally, riders should be sure to always use their turn signals when changing lanes.
Motorcycle lane splitting is a dangerous maneuver that is illegal in most states. Riders should know the lane splitting laws in their state before attempting it. Many states have enacted laws specifically prohibiting lane splitting, so riders should be aware of the risks involved.
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In this feature, experienced employment lawyer Elnaz Masoom provides an outline of the process involved in an employment tax audit by California’s EDD, what business owners should expect, and what steps should be taken in the aftermath.
This article covers the general process and important issues that we see come up in the course of California’s Employment Development Department tax audits, with a focus on the employment misclassification audits of businesses that utilise the services of independent contractors. Substantive legal analysis of California’s independent contractor laws is not part of this content.
The EDD audit process will always begin with a notice from the EDD. Oftentimes, this notice will come along with a list of documents or information being requested, a questionnaire, and a general description of the audit process. Following this initial communication, the EDD will set up a visit or a phone call to discuss the documents produced and ask follow-up questions. Once the auditor reviews the available records, the auditor will provide you with a Proposed Notice of Assessment either verbally or in writing, followed by the Notice of Assessment setting forth the findings and your liability assessment. If you are assessed back taxes or penalties, you will also be notified of your right to appeal the EDD’s determinations and assessments.
Random audits are rare. Occasionally, audits are triggered when a former 1099 contractor applies for unemployment benefits with the Employment Development Department (EDD) or by the late payment of payroll taxes. Notably, the most significant source of audits is the Joint Enforcement Strike Force (JESF). Led by the EDD, the JESF is a coalition of California state government enforcement agencies, including the Franchise Tax Board (FTB) and the Division of Labor Standards Enforcement (DLSE), that work together and share information to combat what is known as the “underground economy.” The JESF has procedures for reporting underground operations to the EDD for investigation, often resulting in EDD audits.
Random audits are rare.
The law allowing for the inspection of an employer’s books and records gives the EDD the right to inspect “ordinary and necessary” records relating to workers, whether these workers are employees or outside contractors. [i]
Intrusive audits can easily get out of hand — this can occur if you deal with an inexperienced auditor who goes into a phishing expedition not necessarily with a clear purpose but to see what might be discovered. Other times, the auditor insists on inspecting each and every document listed on the EDD’s Minimum Required Records list, even when they are not relevant to the audit, or are duplicative of other requests[ii]. As interpreted by the US Supreme Court and the California Supreme Court, the information sought must be “reasonably relevant to the intended investigation.”[iii]
Notably, the usual statute of limitations for EDD audits is three years, but on certain occasions may be extended up to eight years if the auditor finds “bad conduct” on behalf of the business. This bad conduct is identified as failing to pay payroll taxes on time without good cause. In the case of fraud or investigation for evading taxes, there is no statute of limitations.
For years, improper audit techniques on the part of EDD have resulted in misclassification findings while creating chaos for businesses. It is the responsibility of the auditor to take a proper representative sample of workers and their functions before considering reclassifying an entire group of workers as employees rather than independent contractors. When an inadequate sampling is conducted, reclassification is improper and lacks support.
If the auditor did not go far enough in taking a representative sample or there is no sampling at all, more interviews and diligence is warranted by the auditor under the employer’s Bill of Rights. [iv]
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Depending on the outcome of your EDD audit, the aftermath will vary. The auditor may find violations, underpayments, or an overpayment of taxes. A determination of underpayment of taxes will warrant your business to pay overdue taxes with interest and penalties. Payment will be due 30 days from when the assessment is finalised; otherwise, a penalty will be added. The taxpayer’s appeal rights are limited and time-sensitive, so the 30 days post-audit are crucial. Within 30 days from the Notice of Assessment, you must either pay the amount fined or file an appeal. Any negative findings of the EDD can have serious repercussions for the future of your business.
Even if you can “afford” the penalties, you may have to change how your business operates. Aside from the penalties that will accompany the EDD’s determination, the way your business operates will need some serious revisions. Changing the way your business operates comes in conjunction with abiding by a whole new set of laws and regulations that you did not have to previously follow.
We have seen over the years that these changes are not easy to implement as they include an analysis of various wage and hour laws and management practices. Plus, most legitimate contractors maintain significant control over how and when they perform their tasks, negotiate mutually agreeable contract terms, are free to complete work without control by another, and would not agree to any other type of business arrangement.
Why Do You Need Legal Counsel by Your Side?
During an EDD audit, consulting with legal counsel will provide you with a better idea of your company’s rights and facilitate communication with the EDD. Legal counsel will also help you build a solid case defending your business practices, as audits can be fast-paced and have serious consequences. Competent legal counsel can spot inadequate audit methods and fight the auditor’s unreasonable expectations. This is probably the most crucial reason to have proper legal advice and representation to protect your business model, which you may be forced to change as a result of an audit. Finally, legal advice is key during the transition from the contractor to an employee model.
Elnaz Masoom, Managing Attorney
1625 The Alameda, Suite 700, San Jose, CA 95126
Tel: +1 408-599-3191
About Elnaz Masoom
Elnaz Masoom is the founder and managing attorney of Masoom Law PC, an employment and litigation law firm based in San Jose, California. Elnaz has practiced employment and business law exclusively since 2010 and has assisted organisations across a multitude of different fields and with widely varied business strategies, cultures and product offerings. With an interdisciplinary understanding of business organisation, management practices and labour laws, Elnaz has successfully represented businesses and employers during employment tax audits up to and including administrative hearings and appeals.
[i] See CUIC §§ 1085, 1092.
[ii] See EDD Publication DE 231 TA.
[iii] See 1980 Younger v. Jensen, 26 Cal 3rd 397; see also US. V Powell (1964) 379 US 48.
[iv] https://edd.ca.gov/siteassets/files/pdf_pub_ctr/de195.pdf.
On Tuesday, British online fashion retailer Boohoo announced it had settled a US class action lawsuit that claims it offered large discounts to customers in California based on inflated original prices.
Boohoo, which sells clothing, accessories, shoes, and beauty products, had agreed to terms for a preliminary settlement back in November 2021.
The retailer says the settlement is without admission of liability and is within its existing legal provisions, which stood at £17.8 million as of February.
In an update on the case, Boohoo said: “Further to the RNS published on 4 November 2021, when the group reported that it had agreed terms of a preliminary settlement relating to a class action claim brought against the group in the United States District Court for the Central District of California, the group is pleased to confirm that the parties have reached a final settlement.
“The settlement is without admission of liability and is consistent with the guidance of 4 November 2021, being within the group’s existing legal provisions disclosed in its latest published audited accounts.
“The settlement remains subject to review and approval by the District Court.”
In San Francisco on Wednesday, US District Judge William Orrick ruled Tesla Inc was liable to a Black former employee who said the EV company ignored racial abuse at the factory where he worked. However, the judge reduced a nearly $137 million jury award to just $15 million.
Judge Orrick made his decision after jurors last October found that Tesla subjected Owen Diaz to a hostile environment at Tesla’s factory in Fremont, California, by failing to stop the racism he faced there.
Diaz worked at the Fremont plant for nine months between 2015 and 2016. He said that other employees at the factory used racist slurs when addressing him and wrote racist language on the walls, including the “N-word”. Diaz also said that one Tesla supervisor drew a racist caricature near his workstation.
Judge Orrick said the evidence amply supported the jury finding Tesla liable for the profound emotional harm Diaz suffered during his time at the company. However, Orrick reduced Diaz’s compensatory and punitive damages significantly, from $6.9 million to $1.5 million and from $130 million to $13.5 million respectively.
Diaz’s lawyer, Bernard Alexander, has said his client plans to appeal the lowered damages award.
AB 218 is a new breath of hope for survivors of childhood sexual abuse. Of course, no child deserves to experience such an unpleasant and traumatic occurrence. However, life could be unfair because some people have chosen to act despicably. Thanks to AB 218 and its modern reformation, there are now additional rights that extend beyond the three-year lookback window. Let us examine these rights.
STATUTE OF LIMITATION
Statute of limitation refers to enacted laws that provide individuals with enough time to take legal proceedings against another party after a dispute. There is always a date that marks the validity of filing a lawsuit. It shows the deadline the individual has.
A major determiner of the Statute of limitation is the kind of offense. Also, is the individual seeking justice against a criminal or only making a civil complaint?
For example, AB 218 has seen a turnaround in its structure. Offenders can be prosecuted no matter how many years ago they could have committed the crime. It helps to pursue justice as long as possible. No evil should be allowed to go unpunished for the deserving punishment.
LEGAL ASPECTS OF AB 218
The California Assembly Bill 218 allows survivors of childhood sexual abuse to take actions towards justice. It has been a source of encouragement for many survivors that are yet to pursue justice. It has been one of the best things that have been signed into law in the last two years.
The additional rights of survivors include;
In as much as they are not yet 40 years old, anyone that has survived sexual abuse as a child can still take actions towards financial compensation. Prior to now, the age limit used to be 26 years old. Nevertheless, people who have passed 40 years since the law was signed into the bill can still file claims.
AB 218 permits the survivor to take legal actions within five years of discovering a psychological injury. Experiencing trauma after harmful incidents like sexual abuse is common. Before AB 218, the duration used to be three years.
AB 218 permits the courts to issue treble damages in cases of wrongdoing. Sounds complicating? No, it should not. The AB 218 triple damage clause means that a survivor should be paid a multiple of three of any compensation or cover-up fee that they may be given.
There are different reasons young survivors may not have voiced out when they experienced sexual abuse. Some of these reasons include;
A child may not know what sexual abuse is. He or she may know something terrible was done towards them but may not understand the implication. Those who may understand may not know how to take legal procedures. They could experience the situation while with a guardian and be unable to share their story till when they are much older.
Sometimes, the post-traumatic syndrome after an occurrence could make one realize the situation was more dangerous than one would have thought. PTSD could bring flashes of bad memories and be disturbing to the person involved. Hence, AB 218 strongly considers PTSD and its possible effect on the survivor.
Much more than the psychological mess sexual abuse brings, there could be damage to the human body too. For some, they could experience discomfort at their genitals. Knowing this later in life will have a different level of response than when it occurred at first. Once the person involved understands the full effect, they will be ready to take action.
California could have set the standard when it comes to the Statute of limitations, but some efforts should be commended. It is essential to say that Gavin Newsom was the Governor when AB 218 was signed into a bill. However, another effort that should be praised is that of Samuel Dordulian, former Deputy District Attorney for Los Angeles County.
According to Mr. Dordulian, the AB 218 is like "a time machine" because it allows solicitors to go "back in time" to take legal actions. Also, he mentioned the fact that the Statute of limitation could have expired.
By expiration, he meant that the “loockback window" had removed the Statute of limitations for three years. Before, survivors only had three years to file their cases against offenders. However, things have evolved as these offenders can now be subjected to litigation irrespective of when the crime could have been committed.
Also, the lookback window will expire by January 1, 2023. Nevertheless, many childhood sexual abuse survivors would have fought for their justice and be happier that justice is served. Also, other states have taken a cue from California and put laws that help survivors in place.
Conclusion
The world is becoming a better place. Thanks to good bills that are enacted to create a saner environment. AB 218 may be expiring by 2023, however, it has been a life-saver for many.
Many employers in California have had the unfortunate experience of either litigating a lawsuit or resolving a pre-litigated matter under the Private Attorneys General Act (PAGA), typically after extensive time, effort and resources have been expended. In both instances, the cost to defend is usually enormous. Indeed, some small (and large) businesses have been forced to declare bankruptcy because of PAGA claims.
Under PAGA, an “aggrieved employee” may bring a representative action on behalf of him or herself and other “aggrieved employees” for civil penalties for various violations of the Labour Code. (Labour Code §§ 2698, et seq.)
PAGA was intended to deputise citizens as private attorneys general to enforce the labour code considering the state government’s limited resources. Particularly, PAGA – sometimes called “the Bounty Hunter” statute – allows these employees to step into the shoes of state regulators to recover civil penalties and to receive part of the amount recovered as compensation: seventy-five per cent (75%) of the penalties recovered go to the state, and twenty-five (25%) go to the employees.
However, since its enactment in 2004, rather than streamline and regulate employer violations of the Labour Code, PAGA claims have skyrocketed for various reasons unrelated to legitimate violations, including the fact that employees cannot waive their right in an arbitration agreement to bring PAGA claims, thereby creating litigation challenges for employers. Further, because PAGA allows for attorneys’ fees, most employers will settle PAGA claims before trial to avoid expensive litigation.
Notably, underlying claims that create exposure in PAGA actions include the full gamut of wage and hour violations, such as missed meal and rest breaks, failure to provide itemised wage statements, and failure to pay overtime. Given the array for potential exposure, even for the scrupulous employer, plaintiffs are incentivised to file complaints alleging a wide variety of purported violations, even if they did not or could not have personally suffered a violation of the subject provision.
In October 2021, several business organisations, including the California Chamber of Commerce, California New Car Dealers Association and Western Growers proposed an initiative, the California Fair Pay and Employer Accountability Act (CFPEAA), for the 2022 ballot. If approved by California voters, the CFPEAA effectively repeals PAGA by eliminating the ability to pursue civil penalties via a representative action.
For employers, the greatest upside of the CFPEAA, as it relates to future PAGA lawsuits, is that it would eliminate the ability for aggrieved employees to stand in the shoes of the Labour Commissioner and recover civil penalties through a representative action. Instead, the Division of Labour Standards Enforcement would have greater enforcement responsibility and the California Legislature would be required to provide funding for the Labour Commissioner to enforce Labour Code violations (i.e., the Labour Commissioner handles violations). This would remove the supposed need for private enforcement.
Additional benefits of the CFPEAA to employers includes, but is not limited to, the following:
Clearly, for employers, the CFPEAA is a promising solution to California’s rampant PAGA problem. Supporters of the initiative have until June 6, 2022, to collect at least 623,212 valid signatures to qualify the measure for the November 2022 general election. While the CFPEAA may admittedly struggle to qualify for the ballot (considering that three PAGA-reform initiatives did not make it on the ballot in 2017), the passage of Proposition 22 in 2020 demonstrates that business-driven employment law ballot measures can be adopted, even in the very employee-friendly Golden State.
About the authors:
Antwoin Wall is a Senior Associate with Pearlman, Brown & Wax, LLP assisting clients in employment matters, including claims of discrimination, harassment, retaliation, wrongful termination, and wage and hour litigation. He can be reached at adw@4pbw.com.
Corinne Spencer is a Senior Employment Counsel and Chair of the Labour and Employment Practice Group at Pearlman, Brown & Wax, LLP. She focuses on counselling clients in employment-related matters including litigation, risk assessment, policy preparation, and training. She can be reached at cds@4pbw.com.
In a lawsuit filed in California on Wednesday, Tesla assembly line worker Erica Cloud has accused defendants, including her former manager, of “continuous and pervasive” sexual harassment. Tesla and other defendants subjected Cloud to "a hostile work environment stemming from animus towards her gender, sexual harassment," the lawsuit says.
Cloud claims her former manager hugged and massaged her while making inappropriate remarks. She said she is now experiencing retaliation from other managers after complaining to the company’s human resources department about the misconduct.
Cloud’s lawsuit is the second lawsuit suing Tesla for sexual harassment in less than a month. On November 19, another female Tesla employee, Jessica Barraza, filed a lawsuit against Tesla alleging rampant sexual harassment at the company’s main factory in Fremont, California.
"The pervasive culture of sexual harassment, which includes a daily barrage of sexist language and behavior, including frequent groping on the factory floor, is known to supervisors and managers and often perpetrated by them," Barraza’s lawsuit claims.
