$5.0 Million For Financial Media Employees
$3.0 Million For Home Health Aides
$2.5 Million For Misclassified Tech Worker
$1.7 Million For Media Executive Severance
$1.5 Million For Fintech Workers
$1.5 Million For Home Health Aides
$1.0 Million For Baristas at National Chain
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Proper classification of independent contractors and employees has never been simple, and the passage of California’s new gig law Assembly Bill 5 (“AB5”) ensures this issue will continue to pose challenges for workers and businesses alike. AB5 took effect on January 1, 2020. While the full impact of this new legislation is yet to be seen, there are legitimate concerns about how this law will impact musicians and other independent artists.

What is AB5?

AB5 is the legislative result of the Dynamex decision, whereby the California Supreme Court employed a three-part test to determine employment status and ultimately concluded that Dynamex delivery drivers were employees and not independent contractors. Dynamex Operations W. v. Superior Court, 4 Cal.5th 903, 942 (2018).

Some things seem certain for gig economy companies like Uber in 2020:  they will continue to accrue legal fees and continue to claim they are just “mobile application platforms” and emphatically not service providers.   Let’s look at Uber as an example.  

Even as it defends against multiple lawsuits brought by its drivers, Uber is now suing the State of California. Case No. 2:19-cv-10956. 

The central issue in these lawsuits is whether Uber’s operations constitute a legitimate business model matching independent drivers to riders needing rides, or whether Uber is just a modern profit machine rebuilt from the age-old cogs and widgets of exploited workers 

The new “Gig Economy Law”  also known as Assembly Bill 5 (AB5) – was signed into law on September 18, 2019.  How much the law will actually impact California companies, employees and independent contractors has been a hot topic ever since.   Here are five things you should know about AB5: 

1.  The law’s intent is to guard against further “erosion of the middle class and the rise in income inequality,” and to protect workers from being exploited in the gig economy. 

Experts estimate that it is up to 30% cheaper to hire independent contractors than employees because then companies aren’t required to pay for things like unemployment insurance, workers’ compensation premiums, payroll taxes or Social Security contributions. 

Wet Seal has been charged in California federal court for discriminating in favor of blond-haired, blue-eyed employees, as reported by the Los Angeles Times this week.

The suit, Nicole Cogdell et al v. The Wet Seal Inc et al, was filed in the Northern District of California last week and alleges that the California-based retail chain had a company-wide policy of discriminating against African American managers.

The complaint was filed by three former managers of the chain on behalf of all similarly situated managers who had been discriminated against in hiring, firing or promotion because of their race. With 550 stores across the country, there are up to 250 managers employed by Wet Seal who may be covered by the complaint, exposing Wet Seal to perhaps tens of millions of dollars in liability.

The City of San Francisco has agreed to settle a Department of Parks and Recreation overtime discrimination suit for $250,000 pending approval from the city council, as reported in the Bay Citizen today.

The suit in question, Michael Horan v. City and County of San Francisco et al., was filed in the San Francisco Superior Court in 2009 by an employee of the city’s Department of Parks and Recreation. The plaintiff Michael Horan had worked as a security guard for the Parks Department for a number of years. During his employment, Hogan alleged that workers were collecting overtime benefits for hours they had not worked, and that his supervisor discriminated against non-Asian Americans in the distribution of those hours.

Hogan filed a complaint with the Parks Department about the abuse of overtime hours and the discrimination in the allocation of those hours. After he complained, he immediately faced retaliation and retribution from the workers in his department. He was verbally abused and threatened with physical harm. His complaints to the Department were ignored, and in November 2008 he finally left his job, fearing for his safety.

The Montana Supreme Court has ruled that obesity discrimination is illegal under its state human rights law, as reported last week by the San Francisco Chronicle. The court’s decision marks an unprecedented step towards recognition of obesity as a protected status under both state and federal antidiscrimination laws.

The Montana Supreme Court made its ruling in response to a certified question from the District Court of Montana on the state’s stance on the issue. The case in question, BNSF Railway Co. v. Feit, had been filed under the Montana Human Rights Act by an applicant who claims he was rejected for a position at a railway company because of his obesity. Eric Feit was offered a conditional offer of employment as a conductor trainee at the company, contingent on his passing a drug screening, physical examination and background check. After passing all these screening tests, the company told him that they would only hire him if he lost 10 percent of his body weight and underwent further physical examinations at his own expense, including s sleeping study.

Feit lost the weight, and took all the required examinations except one. He was unable to take the sleeping study however, which at $1,800 he could not afford. After the company refused to hire him, Feit filed suit against the railway company for discriminating against him because of a physical disability under the Montana Human Rights Act.

The Equal Employment Opportunity Commission has begun investigating beauty bias at a chain of Boston coffee shops, indicating a possible growing expansion of the protections of the federal antidiscrimination laws. The investigations were reported by the Boston Globe last month, which had been alerted by the owner of the Marylou’s chain of coffee shops of the EEOC’s interviewing of its former and current employees.

According to the Boston Globe, the EEOC had not received any complaints before its investigation but had initiated it on its own. The Marylou’s chain of coffee shops is known throughout the Boston area for commercials featuring young women in pink and black shorts. The investigation supposedly was triggered by the commercials and by the fact that servers at the restaurant were also often young women in revealing clothing. While the EEOC has not commented on the issue, Marylou’s claims that the agency has been interviewing applicants, workers and customers for months, in what the coffee chain characterized as a “witch hunt.”

While the EEOC has not clarified the basis of its investigation, media commentators have set forth that the agency is targeting beauty bias at the chain. If correct, then this will be the first indication of a move by the EEOC towards a more expansive view of the protections afforded under the federal antidiscrimination laws.

The city of Scranton, Pennsylvania, in a move that has garnered national media attention, has cut all its city workers’ salaries to minimum wage, as reported last week by the New York Times.

The mayor of Scranton, Chris Doherty, made the drastic move after being alerted last week that only $5,000 remained in the economically troubled city’s bank account. Since then, the bank account balance has increased to $133,000, but that is not nearly enough for the city’s expenses for even a single day. As the New York Times reported, Scranton’s decision to unilaterally cut its workers’ pay is unprecedented, and it has expectedly met immediate resistance from the workers’ unions.

City workers received just days’ notice of the change, which is in violation of their union contracts with the city. The unions had immediately filed suit in state court for an injunction as soon as they had received notice of the mayor’s plan. The court found in their favor, forbidding the mayor from cutting the workers’ salaries. Ignoring the injunction, the mayor cut the salaries and issued checks this week for $7.25 an hour for all the city’s workers, including all the city’s firefighters, teachers and policemen, as well as the mayor himself. As a willful violation of the court’s order, the unions have formally requested the court to find the mayor in contempt, which might put him into jail.

Hole front-woman and former wife of Kurt Cobain Courtney Love has just been hit with an overtime suit in Los Angeles Superior Court this week, as reported by the San Francisco Chronicle. The suit was filed by a former administrative assistant who claims Love refused to pay wages, business expenses and overtime during her year of work for the singer. This case marks the third overtime lawsuit against a major celebrity in as many months, following the suits against Celine Dion and Sharon Stone this summer.

The complaint filed this week alleges that Courtney Love refused to pay her assistant overtime, reasonable business expenses and back wages. Jessica Labrie v. Courtney Love Cobain also sets out claims of violation of the employment contract and fraudulent misrepresentation. Labrie claims that she began work for Love in June 2010 after promises that the singer would pay her college tuition and eventually get her a job at her music management company, among other promises. Labrie claims that Love never fulfilled any of her promises and in fact harassed and discriminated against her from June 2010 to June 2011.

Labrie’s overtime claims are premised on the fact that Love had her work over 60 hours a week without paying her overtime at time and a half. Under California Labor Law §510, employers must pay their employees time and a half for all hours worked over 8 hours in a day or 40 hours in a week. There are very few exceptions to this rule, such as for workers who are independent contractors and those who are professional, managerial or outside sales representatives. As Labrie here would not be found to fit within any of these exceptions, Love probably violated the labor code in refusing to pay her overtime for her work.

San Francisco’s Tower Car Wash has agreed to reimburse its workers $500,000 to settle a wage theft suit, as reported last week in the San Francisco Chronicle. The car wash will also pay the City an additional $70,000 for attorneys’ costs and fees. The popular Mission Street car wash had been hit last August by the suit by the City and County of San Francisco after complaints by workers that they weren’t being fully paid for their hours of work. This case exposes the increasing problem of wage theft in San Francisco and across the nation, especially in these trying economic times.

The case in question, City and County of San Francisco v. Vladigor Investments, Inc., dba Tower Car Wash et al was filed last August by the City Attorney in San Francisco Superior Court on behalf of almost 100 of the car wash’s current and former employees. The complaint alleged that Tower Car Wash had a pattern and practice of refusing to pay its workers for their hours at the workplace over a 4-year period. The City alleged that workers at the car wash were required to arrive to work at pre-scheduled times each day. When they arrived, they were placed into a separate room to wait until the car wash was busy. Once the car wash was busy, they were then allowed to clock in. For many workers, their waiting time topped 5 to 6 hours each week. This time was not paid, however, although the workers were required to be there on time or face termination.

The City Attorney set out that these practices violated both California and San Francisco labor laws because the workers should have been paid for the time they spent waiting. First, these practices violated the San Francisco Minimum Wage Ordinance because the time the workers spent waiting before they were allowed to clock in lowered their hourly rate to less than the minimum wage, in violation of the statute. The City also alleged that these practices violated California overtime pay provisions because oftentimes the time spent by the workers at the car wash exceeded 8 hours a day or 40 hours a week when the waiting time was included. As these hours were not calculated by Tower Car Wash, that often left workers working over 8 hours a week without being paid their required time and a half wage. The City also set out that Tower Car Wash violated state and local ordinances in their practice of sending workers home if the wash was not busy enough. Tower Car Wash would send workers back after they waited for up to 2 or 3 hours if the wash was not busy, not allowing them to clock in for any of their time waiting. This practice is in violation of the labor laws requiring payment for all hours worked. The City set out that Tower Car Wash also violated California and San Francisco labor requirements that companies pay any workers who report to work at least a half day’s pay even if they have to send them home.

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