Letterman Probably Not Laughing in Light of Unpaid Intern Class Action

Probably not laughing at all:

"ICM Partners might be happy to hear today that they are not the latest industry enterprise to be hit with an interns lawsuit, but it’s a good bet CBS and The Late Show With David Letterman are not. The network and the late-night show have been walloped with a class action of their own: Late last week, Mallory Musallam filed a class action complaint against CBS Broadcasting, CBS Corp. and the retiring late-night host’s Worldwide Pants on behalf herself and everyone who has ever been an intern on the show. 'Named Plaintiff has initiated this action seeking for herself, and on behalf of all similarly situated employees that also worked on The Late Show With David Letterman, all compensation, including minimum wages and overtime compensation, which they were deprived of, plus interest, attorneys’ fees, and costs,' says the jury demanding filing in New York Supreme Court (read it here)." (link)

Will CBS and Letterman go the way of Charlie Rose and his production company and get ahead of this unpaid intern lawsuit (Rose settled early on in litigation for $110,000), go the way of Fox Searchlight and litigate, lose, appeal, and then cross their fingers, or win and face appeal as in the Hearst unpaid intern litigation?

We shall soon see.

Second State To Guarantee Paid Sick Time - Just 48 to Go ...

On August 30, 2014, California became the second state to guarantee sick time.  While, likely a surprise to most people, although federal law provides some protections for at least unpaid medical leave, at least after employees working for certain employers have been on the job for a year (FMLA), there is no federal law broadly guaranteeing paid sick days -- not even just one. 

Some local jurisdictions like NYC have passed local laws.  But, absent local legislative action, there is an enormous gaping hole in protections for sick workers.

Right now -- you're thinking about the fact that you do have sick days at work -- that's great news. The bad news is that those sick days are likely merely your employer's disrcretionary policy and are not mandated under federal law -- which I'm sure you think they should be.

Here is an overview of the new California law from the Labor and Employment Law Blog:

"The new law is called the 'Healthy Workplaces, Healthy Families Act.'  Beginning on July 1, 2015, both public and private employers (of any size) will be required to provide eligible employees with paid sick leave 'at the rate of not less than one hour per every 30 hours worked.'  Eligible employees are those employees who have worked 30 or more days within a year after their date of hire.  Under the new law, exempt employees are deemed to work a 40 hour workweek.  Employees are to be compensated at the same wage as the employee normally earns during regular work hours.  The rate of pay shall be the employee’s hourly wage.  If the employee in the 90 days of employment before taking accrued sick leave had different hourly pay rates, was paid by commission or piece rate, or was a nonexempt salaried employee, then the rate of pay shall be calculated by dividing the employee’s total wages (not including overtime premium pay) by the employee’s total hours worked in the full pay periods of the prior 90 days of employment.

There are a few exceptions in which employers are not required to offer the new paid sick leave benefit and they relate mainly to employees who are covered under a collective bargaining agreement, or who work in the construction industry, the home healthcare industry, or the airline industry." (link)

An in-depth overview of the new California law is available here.

Based on the experience of Connecticut, the only other state to pass a similar state-wide law, concerns raised about the California law are unlikely to be realized:

"California joins Connecticut, the first state to guarantee its residents have paid sick leave.  If that state’s experience is a guide, the California Chamber of Commerce, which called the state’s bill a 'job killer,' should have nothing to worry about.  A year and a half after Connecticut’s law took effect, most employers said the costs had been negligible or non-existent, abuse hadn’t cropped up, and many actually saw benefits.  More than three-quarters support the law, with nearly 40 percent saying they’re very supportive." (link)

Wait -- "more than three-quarters support the law?" Sounds like supporting the rights of workers to take a paid sick day might even attract votes to supportive legislators.

Just 48 states to go . . . including New York.

Liberalized Medical Marijuana Laws Clash With Employer Policies -- Implicating Disability Rights

As covered by the New York Times:

"[M]arijuana’s recent strides toward the legal and cultural mainstream are running aground at the office.  Even as 23 states allow medical or recreational marijuana, employment experts say that most businesses are keeping their drug-free policies.  The result is a clash between a culture that increasingly accepts marijuana and companies that will fire employees who use it." (link)

During July New York passed a medical marijuana law permitting New Yorkers suffering from a narrow list of conditions to obtain marijuana for medical treatment.

This development in turn sets up a future series of conflicts between employers and at least some state and/or local disability discrimination laws, which may require reasonable accommodations for people with disabilities -- the people many of the medical marijuana laws are targeted to assist.

New York is no exception.  Indeed, it appears ripe for this conflict because of the state law's definition of those permitted to use medical marijuana as "disabled" within the meaning of New York disability discrimination law:

"The New York law specifically classifies individuals prescribed medical marijuana as 'disabled.'  Accordingly, employers may need to provide reasonable accommodation for medical marijuana users.  While courts have not yet addressed the issue of what constitutes a 'reasonable accommodation' for medical marijuana use, one suggestion is relaxing an employer's drug policy to permit the employee's medical marijuana use. Whether or not such 'accommodation' is reasonable will depend on the employee's specific job.  While it is low cost to the employer, if the side effects of marijuana have a negative impact on the employee's job, as could be the case of truck drivers or machine operators, such accommodation may not be reasonable."  (link)

Advocates for reasonable accommodations regarding medical marijuana use with respect to drug policies are in no small part assisted by increasing voices in support of the positive medical effects of marijuana -including Dr. Sanja Gupta. 

Dr. Gupta recently noted he is "doubling down on medical marijuana;"

"I have met with hundreds of patients, dozens of scientists and the curious majority who simply want a deeper understanding of this ancient plant. I have sat in labs and personally analyzed the molecules in marijuana that have such potential but are also a source of intense controversy. I have seen those molecules turned into medicine that has quelled epilepsy in a child and pain in a grown adult. I've seen it help a woman at the peak of her life to overcome the ravages of multiple sclerosis.

I am more convinced than ever that it is irresponsible to not provide the best care we can, care that often may involve marijuana.

I am not backing down on medical marijuana; I am doubling down." (link)

This will certainly be one of the more interesting employment law issues over the course of the next few years, particularly given the lack of movement with respect to the federal prohibition on the use of marijuana.

Elizabeth Warren Explains The New American Cheating-Based Economy

Senator Elizabeth Warren always hits it on the nose with consumer protection issues and the American economy.

Here she is talking through the American cheating-based economy and student loan reform with David Letterman.

If these issues matter to you this is a must watch:

New York's Redlining Race Discrimination Remix

These days the most common claims of lending discrimination have been "reverse redlining" cases.

But the NY Attorney General is hot on the trail of apparently resurgent good-old-fashioned redlining discrimination.  The AG filed a suit for discriminatory redlining practices against the parent company of Hamburg-based Evans Bank -- and has described the alleged redlining as a textbook example of an illegal redlining policy:

“This is classic redlining,” Schneiderman said, tracing his finger around the boundary. “If you had to make up a hypothetical to explain to law students what redlining is, you would use a map like this.”

Schneiderman also cited statistics showing that from 2009 to 2012, Evans received 1,114 applications for residential mortgages in the Buffalo metro area, but only four were from African-American applicants. He also said of those 1,114 applications, only eight came from the East Side and just one of those was from an African-American. Schneiderman said that competing banks were lending at much higher rates." (link)

Here's the relevant map of Evan's lending:

To be blunt, this map does very much look like it could be in a lending discrimination textbook.

Moreover, it looks like there's more good-old-fashioned redlining litigation to come:

“We are looking at other banks in other parts of the state, and if banks do not agree to resolve these really disgraceful practices, then there will be further litigation,” Schneiderman said at a news conference in his Buffalo office." (link)

Stay tuned for some discrimination classic hits!

Wage Theft on the Rise

Wage theft claims appear to be on the rise:

"David Weil, the director of the federal Labor Department’s wage and hour division, says wage theft is surging because of underlying changes in the nation’s business structure. The increased use of franchise operators, subcontractors and temp agencies leads to more employers being squeezed on costs and more cutting corners, he said. A result, he added, is that the companies on top can deny any knowledge of wage violations.

'We have a change in the structure of work that is then compounded by a falling level of what is viewed as acceptable in the workplace in terms of how you treat people and how you regard the law,' Mr. Weil said.

His agency has uncovered nearly $1 billion in illegally unpaid wages since 2010. He noted that the victimized workers were disproportionately immigrants." (link)

Here in New York:

"New York’s attorney general, Eric T. Schneiderman, has recovered $17 million in wage claims over the past three years. 'I’m amazed at how petty and abusive some of these practices are,' he said. 'Cutting corners is increasingly seen as a sign of libertarianism rather than the theft that it really is.'” (link)

Some employer advocates claim the rise in wage claims is just "opportunistic lawsuits:"

"Lee Schreter, co-chairwoman of the wage and hour practice group at Littler Mendelson, a law firm that represents employers, said wage theft was not increasing, adding that many companies had become more vigilant about compliance. But that has not stopped lawyers from bringing wage theft complaints because of the potential payoff, Ms. Schreter said. 'These are opportunistic lawsuits,' she said." (link)

But you have to ask yourself -- why would a plaintiff's attorney bring a wage and hour lawsuit on contingency that lacked merit?  If the case has no merit plaintiff's counsel will lose and won't obtain any fees -- an attorney seeking profit is unlikely to do that.

Moreover, wage and hour lawsuits are usually pretty clear-cut -- the employer either paid minimum wage/overtime or the employer did not -- it's often that simple.

What do you think?

Overview of Requirements for "Good Faith" Negotiations in NY Foreclosure Settlement Conferences

Since 2008, courts have wrestled with what the requirement of good faith negotiations in NY foreclosure settlement conferences required.  Recently, the appellate division took the first big step in clarifying the standard in U.S. Bank National Association v. Sarmiento:

In summary, the court concluded:

"[L]egislative history did not indicate what lawmakers thought would be a good faith standard; likewise . . . there were no published decisions that defined good faith in the context of settlement conferences.

[The court] surveyed trial-level decisions and found that some had not required demonstrations of intentional misconduct or gross negligence when deciding there was a lack of good faith.  Other courts considered lenders' lost documents, confusing communications, inexcusable delays and baseless HAMP denials as a lack of good faith, he noted.

[The court] acknowledged the common-law bad faith standard had been used in other contexts, such as an insurance carrier's refusal to accept a settlement offer.

But if the court adopted the proposed standard on questions of good faith settlement conference negotiations, [it concluded] ,'we would undermine the remedial purpose of CPLR 3408.'"

* * *

Events such as a lender's failure to expeditiously review financial information or deny modification without sufficient grounds could constitute a failure to negotiate in good faith, as could a borrower's failure to turn over requested information." (link)

While this is an important clarification of the standard for proving a bank operated in bad faith actually showing this failure takes some substantial legwork.  The homeowner will need to collect extensive documentation of papers submitted to and received from the bank. 

As a result, homeowners wishing to advance their right to good faith negotiations should contact an attorney as soon as possible after they learn they are in foreclosure.

If You're in California Your Employer May Be Paying Your Cell Phone Bill Shortly

Yes - you read correctly Californians.

Sixth Circuit: Collective Action Waiver Unenforceable Without Arbitration Agreement

As covered by Workforce:

"The 6th Circuit held that the waivers were invalid. It concluded that any agreement that deprives one of his or her rights under the FLSA is invalid. Because the waiver deprived the employees of their right to participate in the collective action, it was invalid.

The employer argued that the at-issue agreement does not deprive anyone of any rights, since each employee is free to pursue an individual claim against the company for FLSA violations. The court, however, was not persuaded. Instead, the court concluded that because each employee’s potential claim for unpaid overtime was relatively small, the only real opportunity to pursue the alleged FLSA violation was via a collective action.

'Requiring an employee to litigate on an individual basis grants the employer [a] competitive advantage…. And in cases where each individual claim is small, having to litigate on an individual basis would likely discourage the employee from bringing a claim for overtime wages.'

As the Killion court points out, this decision now creates a split of authority between the 6th other Circuits. The Killion court also pointed out, however, that every other circuit that has decided this issue in the employer’s favor has done so because the agreements also contained arbitration clauses; the agreement in this case lacked that mechanism. It will be interesting to follow if this employer pursues this matter to the Supreme Court, and if that Court is interested in this important issue, or if other circuits follow Killion’s lead in the non-arbitration context." (link)

I think this paragraph puts it perfectly:

"Because no arbitration agreement is present in the case before us, we find no countervailing federal policy that outweighs the policy articulated in the FLSA.  The rationale of Boaz is therefore controlling.  Boaz is based on the general principle of striking down restrictions on the employees’ FLSA rights that would have the effect of granting their employer an unfair advantage over its competitors.  Requiring an employee to litigate on an individual basis grants the employer the same type of competitive advantage as did shortening the period to bring a claim in Boaz.  And in cases where each individual claim is small, having to litigate on an individual basis would likely discourage the employee from bringing a claim for overtime wages.  Boaz therefore controls the result here where arbitration is not a part of the waiver provision" (link)

In summary, a thoughtful and helpful decision from the Sixth Circuit.

Of course, most employment agreements attempting to waive collective action rights will also include mandatory arbitration -- particularly after this decision.  Nonetheless, at least some, like the one in this case, clearly do not. 

At least plaintiff's counsel have one more stone to throw at the arbitration Goliath.

The decision is available here.

Has America's Foreclosure Crisis Immigrated to China?

It appears so:

Foreclosures are starting to be reported in China, home to the most talked about housing market on earth.   According to the 21st Century Business Herald, three cities have reported increases in the number of bank repos of Chinese properties.  Has a foreclosure crisis begun in China? If so, the China housing bears would have been vindicated. (link)