So what does this mean to you if you are an employee or an employer?  Before I turn to my view of the case and its affects, please note that this opinion is by no means a complete analysis of the Decision.  I’m simply discussing some of the highlights that I found interesting after reading the opinion and listening to commentary from legal scholars.

Facts

The facts of the case are pretty straight forward.  The case started in 2000, when a 54-year-old Wal-Mart worker in California named Betty Dukes filed a sex discrimination claim against her employer. Dukes claimed that, despite six years of hard work and excellent performance reviews, she was denied the training she needed to advance to a higher salaried position. Wal-Mart’s position is that Dukes clashed with a female Wal-Mart supervisor and was disciplined for admittedly returning late from lunch breaks.

Dukes filed a class action lawsuit in U.S. District Court in San Francisco on behalf of herself and 1.6 million female plaintiffs, including all those who work or have previously worked in a Wal-Mart store since December 26, 1998.  Dukes’ position was that Wal-Mart’s corporate policy was to refuse management training to women, but provide it to men.  What is critical in the Plaintiff’s claim is that Wal-Mart did not have an explicit policy refusing management training to women. Instead, Dukes claimed that such a policy existed because evidence the management at Wal-Mart was predominately male.  The Supreme Court ultimately ruled against Dukes and held that the case could not continue as a class action.

Employee

So if you are an employee what does this mean?  Unfortunately because of this decision it will be very difficult, if not impossible, for groups of employees to bring a class action lawsuit for race/sex discrimination against an employer unless there is an explicit corporate policy encouraging discrimination, which usually doesn’t exist – most companies aren’t that stupid.  Anything less and the case cannot continue as a class action.

Next, and even more frightening for employees and other plaintiffs, is that the decision could extend to other class actions.  Since the Supreme Court issued the decision, other courts have extended the ruling to class actions involving nonpayment of wages (overtime and minimum wage) and toxic tort claims in an effort to prevent class actions from proceeding.  My understanding is that these courts are claiming that the Dukes decision supports the claim that a class action cannot proceed if the court must conduct an analysis on each individual in the class to determine that person’s specific damage.

Employer

Conversely, if you are an employer, especially a large one, the decision is a victory for you.  The Dukes decision virtually eliminates the possibility that employees can come together and bring a class action lawsuit against your company based on discrimination.  The decision also reminds employers to carefully develop objective factors to determine when an employee is entitled to a promotion.  These factors coupled with an extensive anti-discrimination policy should be an effective tool to protect the employer from discrimination suits.

The Future of the Case

Legal scholars, particularly on the plaintiff’s side, are already discussing how the case can be overturnned.  One theory is that legislation can be passed by Congress that amends Title 7 and includes an exception to the Dukes decision.  Sample legislation has already been drafted by a Columbia Law School Professor, but it is unlikely that it will be introduced or passed by Congress since they can’t seem to agree on anything these days.

The next, and more likely way that the case will be overturned, is through a subsequent decision by the Supreme Court.  The decision in Duke’s was decided 5 to 4 (Five justices voting for it, and four voting against it).  Therefore all that is needed is for one of the majority members to retire, for the President to appoint someone who will overturn Dukes, a similar case to be brought before the Supreme Court, and then the Court, consisting of the new member, overturns the case with its new decision.

Who is to say when this will happen, but you can bet that during the next senate confirmation hearing of whoever is appointed, members from both sides will be asking questions to determine how the potential justice views the decision in Dukes.

My View

I disagree with the Court.  As a matter of public policy we need to provide Plaintiff’s with some avenue to have their case heard when it would be too burdensome for the plaintiff to proceed on his or her own.  Think about it, in many class actions, the class is made up of individual plaintiffs whose claim by itself would not justify the legal costs associated with an individual case.  The only way to make such an action feasible is for individuals with similar claims, to pull them together as one group, (i.e. a class) and then bring them at the same time.  If we eliminate this avenue, such as the Duke’s case attempts to do, then thousands of Plaintiff’s due process rights will be affected.  These Plaintiff’s will have no feasible way to bring their case before a court so their rights will continue to be violated and they will have limited or no judicial recourse for such violations.

Conclusion

As discussed above, the Dukes decision is clearly a controversial decision that has affected the rights of employees, employers and anyone else who is either a plaintiff or defendant in a class action.  Only time will tell how long this decision and its affects will last.

In an effort to kill two birds with one stone, when I watched the movie I thought of various employment laws that arose so I could combine those examples into my review about the movie.  The final product resulted in what you’ll read below.  My article essentially consists of the various employment laws that were called into question during the movie and of course my review of the film.  Oh, and don’t worry, I won’t reveal anything that spoils the ending.  

Employment Laws

The employment law issues I picked out of the movie were 1) payment for travel time and 2) the at-will employee relationship. 

Payment for Travel Time

If you’ve seen the movie, you know that the bride to be, Lillian, lives in Milwaukee, but commutes to Chicago for work.  The first issue I spotted here was whether she is entitled to compensation by her employer for time that she travels.  The answer is, probably not.  Compensation for travel time only arises in the context of non-exempt employees.  A non-exempt employee is a person who is (i) not paid on a salary basis, and/or (ii) not employed in an executive, administrative, professional or outside sales capacity.  I don’t know what Lillian did for a living, but if it required her to drive back and forth from Chicago, I assume she probably fell into the professional or outside sales capacity.  Now if she was a non-exempt employee, then the FLSA (Fair Labor Standards Act), Portal to Portal Act and/or Department of Labor Regulations would apply and she might be entitled to some form of compensation.  If you want to learn more about these laws/regulations in this context, feel free to review the following article by clicking here. 

At-Will Employment

The next employment law issue that arose addressed the ever popular at-will employee relationship.  In the movie, the maid of honor, Annie, is terminated on the spot after calling a customer a vulgar word (I’ll exclude the word  for professional reasons).  Of course, the issue I  identified from this, putting aside the comment, was the question of “Could Annie just be fired on the spot?”  

Now if Annie was in Washington State, the answer to this question would likely be “yes” so long as she is an at-will employee.  Employees in Washington are generally at-will, meaning they can quit or be fired at anytime.  Gardner v. Loomis Armored Inc., 128 Wash.2d 931.  In contrast to employment at-will, some employees are given greater protection from termination.  This type of employment is commonly referred to as “just cause employment”.  This higher protection typically arises if the employee has an employment contract with the employer or is working under a collective bargaining agreement which states that the employee can only be terminated for “cause”.  Now the term “cause” can vary, but if you are the employee it’s best to have the definition of “cause” be as narrow as possible.  Conversely, if you are the employer, you want the definition of “cause” to be as broad as possible.   

Now that we know all this, let’s turn back to Annie.   Chances are she was an at-will employee because she likely didn’t have an employment contract and I doubt she was employed under a collective bargaining agreement.   Therefore, her termination was permitted.  In addition, even if she was a “just cause employee”, I’m sure calling a customer a vulgar name would fall under any definition of the term “cause”, particularly the word she used.  Sorry to say this Annie, but your employer’s actions were legal. 

My Review

Okay, now that the boring stuff is out of the way, let’s talk about the movie itself.  From a guys’ perspective, I thought it was great.  Despite the fact that it was hard for me to relate to the challenges of a bridesmaid, I had a good time watching Kristen Wiig and the other actresses deal with the pressures and responsibilities of it.  Kristen Wiig is hilarious and also co-wrote the script.  If you like her on Saturday Night Live, you’ll certainly enjoy her performance.  I think the best part was her reaction on the airplane after mixing medication and scotch.  Calling “Steve” “Stove” was pretty classic.  In sum, I thought it was a fantastic movie.  If you are a guy and your wife / girlfriend / partner is asking you to see it, go! You’ll not only score points with him or her, but also have an enjoyable time and have some good laughs.

Since I practice law in Washington I naturally looked at our state’s case law, but couldn’t find a case on point to answer my question. I expanded my search to other states and found two relevant cases, one in Illinois and the other in Missouri. In 2001, an Illinois’ court found that an employer has no protectible interest in an employee’s customers unless the employer can show the employee would not have had contact with the customers absent his association with the employer. Com-Co Ins. Agency, Inc. v. Service Ins. Agency Inc., 748 N.E.2d 298, *302 (2001). I interpret this to mean that in state of Illinois, that when an employee leaves their employer he or she can bring their clients with him as long as that person brought them to the company at the time they were hired. In addition to this Illinois case, I also found a Missouri case that held the exact opposite. Naegele v. Biomedical Systems Corp., 272 S.W.3d 385, *389 (2008).

So now the question remains, would the Washington court follow Illinois or Missouri? My opinion is that a Washington court would follow Illinois, and here’s why. The backbone of decisions regarding non-competes are that the agreement must be reasonable. In fact, a court in WA will not enforce a non-compete or a provision of the non-compete if it results in an unreasonable outcome. This would be the case if the state followed the Missouri case law. Think about it, in Missouri an employer can hire a salesperson, have them bring their clients to the company, terminate the employee right after the hire date, and prevent the employee from contacting the same clients that he or she brought to the Company. Sounds unreasonable to me, and I think the Washington courts would agree. Therefore, I believe that the Illinois holding discussed above would be adopted by a Washington court.

In the end of it all I guess my niece, i.e. the company, doesn’t get to keep something if it doesn’t belong to them in the first place. Sorry Bailey, but I’ll buy you some M & M’s to make up for it.

In the state of Washington all employees are subject to the minimum wage unless excluded by statute. RCW 49.46.010 excludes certain volunteers as “employees”. The applicable statutes related to interns are RCW 49.46.010(5)(d) and (e). Those sections read as follows:

RCW 49.46.010(d)

Any individual engaged in the activities of an educational, charitable, religious, state or local governmental body or agency, or nonprofit organization where the employer-employee relationship does not in fact exist or where the services are rendered to such organizations gratuitously.

RCW 49.46.010(e)

Any individual employed full time by any state or local governmental body or agency who provides voluntary services but only with regard to the provision of the voluntary services.

The Department of Labor and Industries has also enacted an official policy statement interpreting the above. Most applicable is the section that reads:

DOL Policy

Volunteers are not allowed in a “for-profit” business. Any individual, partnership, association, corporation, business trust, or any person or group of persons acting directly or indirectly in the interest of an employer, who permits any individual to work, is subject to the provisions of the MWA.

In sum, even if the intern is willing to work free the “for profit” business must pay the intern. But come on, interns are usually smart, enthusiastic, and willing to do whatever is needed to get experience. In my mind an employee like that is worth at least $8.55 per hour.

Although the firm working on the litigation was based in Pennsylvania, I thought I would give my readers some background on the regulations in Washington which require contingency fee agreements to be in writing.

The Rule of Professional Conduct (RPC), in addition to other state laws, governs an attorney’s conduct in Washington State. RPC 1.5 specifically requires that if a lawyer is paid by a client through a contingency fee, the lawyer must have a signed agreement with the client which explains how the fee is paid.

In regards to the Sterling Financial case, the attorney representing the lead plaintiff likely failed to obtain a signed copy of this agreement. Therefore, under the RPC’s it likely would have been unethical for the firm to continue the representation.

Assuming the case was not dismissed with prejudice, a new lead plaintiff will likely come forward, sign the required forms, and proceed with the lawsuit. However, until that occurs the case will be on hold.

http://seattletimes.nwsource.com/html/localnews/2009518030_apwawalmartsettlement.html

During his presentation, he forecasted that employment growth in the Seattle area would be negative for the rest of 2009 but that employer revenue levels would remain constant.  In response to this statement a member of the audience asked, “How will companies maintain their current revenue while continuing to layoff employees?”  Gardner’s response: “Companies will work their employees harder and require longer hours to make up for the layoffs.”

After this dialogue concluded, my fiancé who was with me asked me: “Can an employer just work their employees harder without paying overtime?”  As with most legal questions, the answer to the question is “it depends.”

Only nonexempt employees are entitled to overtime.  Employers often classify their employees as either nonexempt or exempt.  However, even if an employer classifies an employee as exempt, he/she may still be entitled to overtime and other benefits under federal and Washington state wage/hour laws.  What counts is whether the worker is exempt within the meaning of those laws not what the employer calls him/her. There are several exceptions and tests that a lawyer considers to determine if an employee is in fact exempt.  Unfortunately, there isn’t enough space here for me to list all this information.

Long story short, if your employer is working you long hours in excess of 40 hours a week and not paying you overtime, your employer could be violating your rights.  To find out more about your right to overtime or other wages feel free to contact me or Tim Pauley at 206-583-0050.

The Internal Revenue Service has a 20 factor test that is used to determine whether a worker providing services is an independent contractor or and employee under the law. The IRS 20 factors are set forth at: http://www.ftmn.com/Employee.html Review them and see if you think you and/or your co workers are independent contractors or employees.

You DO NOT have to have all of the characteristics of an employee listed in the 20 factor test to be considered an employee. Some of these factors are more important than others. For example, the most important is whether the company or you have the right to control your work tasks, schedule and method of performing work on a daily basis.  Report writing is relevant but not that critical, etc.

In addition, Washington law requires that to be legally considered an independent contractor rather than an employee you must meet additional requirements such as maintaining a separate book of records regarding your business, have a business identifier number from the State of Washington and file a schedule of business expenses with the IRS annually.

If you feel you and/or your co-workers have been unlawfully denied benefits and/or the payment of overtime for hours worked over 40 in a workweek because you are an employee rather than an independent contractor as your employer has classified you, call Tim Pauley at Connell, Cordova, Hunter & Pauley, pllc for a free consultation. He has worked in the labor and employment law field for over 30 years and has handled many cases regarding independent contractor or employee status issues.

- By requiring employees to work “off the clock.” Examples of this include telling employees to report less hours than they actually work, requiring workers to take work home and not report that time worked, not paying workers for travel when they are working out of town, failing to pay overtime to employees when they attend training and other work related meetings and failing to pay employees for on-call time.

- By labeling non-exempt employees as exempt employees and denying them payment of overtime. Examples of this practice include misclassifying employees as executives, administrators, professionals or outside salespersons. Employers often mischaracterize workers as independent contractors or consultants also to avoid overtime pay that is legally due workers.

- By “working backwards” to pay for overtime compensation. This practice involves paying employees different hourly rates of pay each week to ensure a certain maximum amount of compensation is paid each week even when more than 40 hours are worked in the week and overtime at a premium rate should be paid.

- By requiring workers to take “comp time” off instead of being paid overtime; that is, take as time off in another workweek the amount of overtime hours they worked in an earlier workweek instead of being paid the overtime at a premium rate they are entitled to under state and federal law.

- By refusing to pay workers for overtime work because it has not been “pre-approved” or because the employer has a rule that overtime cannot be worked while supervisors require employees to work overtime either directly or by suggestion.

If you feel you and/or your co-workers have been unlawfully denied the payment of overtime for hours worked over 40 in a workweek, call Tim Pauley at Pauley & Associates for a free consultation. He has worked in the wage/hour field for over 30 years, prosecuted cases for the U.S. Secretary of Labor early in his career and has represented employees in overtime matters in many situations including class actions here in Washington State against such employers as United Parcel Service and Bank of America.

The answer to this question will likely depend on a few factors.  First, was there a clause in the employment contract which states that the bonus will not be paid if the employee is terminated or laid off by the end of the year?  If there is, the employee is likely not entitled to receive his or her bonus.  If there is no such language, then the employee is entitled to believe that completing the year was not a requirement to receiving the bonus.  Therefore, he or she will likely have a claim for the bonus.

In addition to looking for the specific clause above, an employee should also look through the agreement to see if there is any ambiguous language regarding the bonus.  If there is, then the ambiguity will likely be resolved in the employee’s favor because it will be construed against the drafting party, the employer.

Every employee’s situation will be specific to the facts in his or her case.  If you have specific questions, please contact Tim Pauley at 206-583-0050.  He is an experienced attorney in the fields of employment law, particularly non-payment of wages and/or overtime.