Supreme Court Refuses to Hear Unpaid Wage Lawsuit

The rejection of a case by the California Supreme Court means that workers paid at a piece or flag rate must be compensated separately while performing non-flag rate tasks. The case was that of Gonzales v. Downtown LA Motors, LP (), where a class of auto technicians sued their employer for failing to pay them at a separate minimum wage for performing tasks that were performed on the job when piece rate work was not available. This is a big deal for auto technicians and all employees paid on a piece rate basis and a good reminder that sometimes when the Supreme Court refuses to hear a case, it can be good news.

In Gonzalez the California Court of Appeals overturned the former law that allowed employers to avoid paying their workers for performing tasks that were not covered by the employers’ set piece rate system. For example, some auto repair locations pay mechanics for performing maintenance, but do not pay separate rates for time spent cleaning or doing inventory. California Employers used to be able to not pay the employees at all for that time worked so long as their wages for a two week period totaled more than the minimum wage. Such was the case in Gonzalez. The auto technicians there were required to clean, order parts, and train while no work was available. The court held that the employees were not paid properly because they must be paid for all hours worked, and that It was improper to allow the employer to credit their base pay (the minimum wage) with pay from piece rate tasks. The court also awarded the class several hundred thousand dollars in damages including $550,000 in compensation, $1,000,000 for interest, and additional penalties of $230,000 for unpaid wages at termination.

This decision marked a big shift in California law away from federal law, which allows employers to only pay piece rate workers at the minimum wage when they perform some piece rate work and non-piece rate work. The fact that the California Supreme Court denied review means that this decision is now law.

The Gonzalez case will have far reaching implications for flag and piece rate employees all throughout California. If you suspect that your employer has not properly paid you schedule a free consultation with the California employment attorneys of the Law Offices of Michael S. Cunningham, LLP. Call (858) 376-7390 today.

Spearmint Rhino Settles $12.9 Million Lawsuit in Unpaid Wage Dispute

Exotic dancers are frequently denied fair payment of wages. This usually happens when employers claim that exotic dancers are independent contractors, not employees. However, this is often incorrect.

Earlier this month the U.S. District Court in Riverside, California approved the settlement of three California clubs: Spearmint Rhino, Rouge, and Blue Zebra. The lawsuit against the clubs alleged that the clubs had misclassified its exotic dancers as independent contractors, and in doing so violated minimum wage and other state and federal employment law.

One of the accusations was that the club illegally forced the topless dancers to share their tips with managers, DJs, doormen, and other employees that generally do not receive tips. The women in the lawsuit claimed that they had earned nearly $500,000 a year in tips but were forced to distribute it unlawfully. The dancers also alleged that the club threatened them with retaliation if they tried to assert their rights.

The lawsuit was brought on behalf of 14 dancers who worked in Florida, Texas, Kentucky, and Idaho as well as California, although more dancers will be eligible to join the settlement later. The 14 named dancers will receive an additional bonus, or incentive award, which could be as much as $15,000 for taking the time to pursue the case and use their true identity in public court records.

After dividing up attorney’s fees and costs the dancers’ settlement will be divided proportionally. Dancers in California are entitled to 50.14% of the remaining amount of the settlement, Nevada dancers will receive 42.69%, and the remaining dancers will get 7.16%.

As a part of the settlement the clubs agreed to stop treating dancers as independent contractors and will now treat them as employees, or even shareholders and part owners in some cases. The California clubs also agreed to no longer charge dancers stage fees.

The clubs benefitted by settling other claims tangentially related to this lawsuit. The settlement stipulated that the dancers will also end other claims that were pending in California State Court and arbitration in Nevada.

These claims are unfortunately quite common. According to the administrative department responsible for wage and hour violations, approximately. 197,000 workers received $150 million in back pay for overtime violations alone in 2008.

Other types of workers such as mortgage loan officers are also miscategorized by their employers in order to avoid California and federal pay law. If you think your employer is violating your rights to fair pay contact the lawyers of the Law Offices of Michael S. Cunningham today. Call (858) 376-7390 to schedule a free consultation today.

Sleeping On Job: Late Night Security Guards Must be Paid Even if Are Allowed to Sleep

Employees must be paid for time worked. However, this rule gets tricky for certain classes of employees who work long shifts. For example, security guards are commonly required to stay during long shifts that can stretch for 16 or even 24 hours. Some companies allow security guards to sleep, as long as they remain on call. A recent case before the California Court of Appeals explains how this can work in the case of Mendiola v. CPS Security Solutions, Inc.

In Mendiola the employees provided security guard services for CPS Security. The employees were assigned to construction sites where they operated out of residential trailers for 16 hour regular shifts and 8 hour on call shifts during the night. During the night shifts CPS only provided compensation for time spent conducting investigations, meaning that any time they spent not conducting investigations, but being on call, was uncompensated.

The employees filed a class action lawsuit to recover wages for their time spent being on call. The trial court granted the employee’s requests. The employer appealed. The California Court of Appeals said that the guards performed an important function for the employer and its clients by deterring theft and vandalism. Further, the guard’s ability to engage in their private wishes was “substantially restricted” because they did not enjoy the typical freedom of an off-duty worker.

Although federal wage and hour regulations do not require that employees who reside on work grounds be compensated for the time they are on the premises, the court declined to adopt that provision into California law.

The take home point is that just because an employee is not technically on the job by doing work for an employer, if they are on call and remain at the workplace they should be compensated. However, employers in these situations generally require employees to exclude a total number of 8 hours for sleep time that may take place during the job.

If your employer has not paid you the full amount you have earned you may be able to recover your unpaid wages with a lawsuit. To learn more about your legal options contact the experienced California wage and hour attorneys at the Law Offices of Michael S. Cunningham, LLP. Call (858) 376-7390 today for a free consultation. Keep in mind that timely action can make a big difference in a case.

Without a Fixed Salary Employees May be Eligible to Sue for Unpaid Overtime

Earlier this month the California Court of Appeals reviewed a situation where an employee who had been making significantly more money than the average worker, was still subject to California overtime law. In Negri v. Koning & Associates, Mark Negri was an insurance claims adjuster for Koning & Associates. He was paid $29 per hour but was given no minimum guarantee of pay per month. Although he worked more than 40 hours per week, every week, he was never paid more than $29 per hour. As a result Negri sued his employer for violating California overtime law. The employer argued that Negri was a salaried employee, subject to exemption from overtime.

Under California law employees are not subject to overtime pay when:

  1. they meet one of the duties tests for exemption,
  2. they customarily and regularly exercise discretion and independent judgment in performing their duties,
  3. they earn a monthly salary that amounts to twice the minimum wage.

In reviewing these elements the court determined that Negri seemed to satisfy all of the above prongs of the test, except for the salary aspect. Although he earned much more than twice the minimum wage, there was a question as to whether his pay could be classified as a salary. The court found that the definition of salary is quite specific, it does not merely mean pay. Rather, it is “a fixed rate of pay as distinguished from an hourly wage” that is not subject to reduction because of the quantity of hours worked or the quality of work. The employer had admitted that Negri was paid based on the number of hours he worked, and that alone dictated his pay. Because of this the court held that Negri had not been paid a salary and was thus entitled to overtime pay.

This is a very helpful case for employees because Negri would have been entitled to exemption if he merely would have had an established pay rate. There are many reasons why an employee would want to require employees to be paid hourly. The biggest reason is that it ensures that they are only paid for time the employee is productive. However, if an employer does not guarantee a set amount of pay per month or year the work will be considered hourly and subject to overtime law.

Keep in mind that different categories of employees have different overtime requirements. To view a full list of the categories of employees exempt from overtime law visit the California Department of Industrial Relations website.

If your employer has not paid you the full amount you have earned you may be entitled to a class action lawsuit or settlement against them. Contact the experienced California wage and hour attorneys at the Law Offices of Michael S. Cunningham, LLP. Call (858) 376-7390 today for a free consultation.

Resolving a Disability Discrimination or Wrongful Termination Lawsuit

When an employer discriminates against an employee the employer subjects itself to major financial loss far beyond that any rational organization would care to lose. The cost to defend a disability discrimination or other wrongful termination lawsuit is also astonishingly high. Defense attorneys in California may cost employers $450 per hour or more if the employer does not have the proper insurance. For these reasons it is often in the best interests of the employer to settle a pending claim. That is not to say that every lawsuit will be settled out of court without trial, but the vast majority of non-frivolous lawsuits are. There are 3 primary ways to solve a discrimination lawsuit: negotiation, mediation, or arbitration.


Negotiation is a tactic that both sides will employ to get the case settled. There are many different styles and strategies of negotiation. Negotiation is often initiated with a demand letter, which may propose a formal negotiation meeting. If formal negotiations break down, negotiation can continue to play a key role in mediation.


Mediation is when the employer and employee meet and discuss the merits of their positions with a neutral 3rd party, a mediatory. The mediator will question the parties and attempt to get the parties to rethink their approaches and come to a final mutually agreeable solution. This process is informal, and generally non-binding, unless the parties agree to write out a settlement agreement during the mediation.


Arbitration is similar to mediation, but it is much more trial like; although the arbitration rules are much less formal than traditional court hearings. Arbitration may be the first resort for many employment cases because many large employers require their employees to sign arbitration agreements that require the employees to forgo suing the employer in court, leaving arbitration as the only resolution process. There are many legitimate reasons why arbitration is the least favored dispute resolution system for employees.

First, the employer’s arbitration agreement may require that the arbitrator be chosen from a specific panel of arbitrators. Although the arbitrators will not have any interest in the employer in particular, the employer may be a repeat player in arbitration so the arbitrator may slightly favor the employer so that the employer continues using arbitrators from the selected panel. Although most large arbitration organizations can avoid this problem, smaller arbitration panels are more easily susceptible to this bias. Second, arbitration may not allow the employee the benefits of having full discovery, which would allow the employee to obtain evidence that he or she might not otherwise ever get to see. Finally, arbitration generally takes away the right to a jury trial.

To learn more about lawsuit or settlement options for your disability discrimination or wrongful termination lawsuit contact the California employment attorneys of the Law Offices of Michael S. Cunningham, LLP. Schedule a free consultation today, call (858) 376-7390.

Reasonable Accommodation and the Interactive Process in Disability Cases

One of the biggest sources of conflict between disabled employees and their employers is deciding whether to grant an employee a reasonable accommodation as required by the Americans with Disabilities Act (ADA) and the California Fair Housing and Employment Act (FEHA).

The interactive process is a shorthand way of describing the informal negotiations between an employer and employee in finding a reasonable under ADA and FEHA. This process is critically important because failure to engage in the interactive process can be a violation of disability law in and of itself.

Although there are no bright line guides for how the interactive process should proceed, the employer must take steps to ensure that the employer had notice of the existence of a reasonable accommodation.

Problems that can arise during the interactive process include when the communications between employer and employee come to an impasse or break down, the employer refuses to discuss options, or rejects accommodations without reason despite the proposal being clearly simple fixes and not constituting an undue hardship. In these situations an employer may become liable for failure to engage in the interactive process under California law.

For example, in Wysinger v. Automobile Club of Southern California (AAA) (2007) 157 Cal. App. 4th 413 an employee, Wysinger, suffered from lupus and rheumatoid arthritis. After his employer AAA instituted plans to reduce the pay of senior employees he filed an age discrimination claim and also a claim that the employer failed to reasonably accommodate his disabilities because it failed to discuss options in reducing his commute time. Wysinger had requested a transfer in order to reduce his commute time; however AAA rejected this and did not raise any other possibilities.

The California Court of Appeals found that AAA could not rely on its rejection of Wysinger’s suggestion and claim that Wysinger had the burden to request other reasonable accommodations because it is not up to an employee to request multiple types of accommodation that an employer may choose from. The court upheld that under FEHA failure to engage in the process can be a separate claim from failure to provide reasonable accommodations.

If your employer or former employer has failed to discuss reasonable accommodations with you after you told them you needed accommodation you may be entitled to damages. To learn more contact the experienced California Employment law attorneys of the Law Offices of Michael S. Cunningham, LLP. Schedule a free consultation by calling (858) 376-7390 today.

Punitive Damages in Disability and Other Discrimination Lawsuits

Punitive damages are damages designed to punish an organization or individual for particularly bad behavior and deter them from doing it in the future. Punitive damages are possible to receive in employment discrimination lawsuits. However, these damages require a very high level of proof, including the following requirements:

The first requirement is that the employer acted with oppression, fraud or malice. This must be shown with clear and convincing evidence. Clear and convincing evidence is a higher standard than the typical burden of proof in a civil case. Generally, to prove anything to the court requires a preponderance of the evidence, which means that the weight of the admissible evidence rests on your side; in other words it was more likely than not true. By contrast clear and convincing evidence requires that the admissible evidence shows a high probability that what you accuse occurred.

California Civil Code § 3294 defines more explicitly what oppression, fraud, and malice are. Oppression is “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” Fraud means an intentional lie, misrepresentation, or concealment of an important (“material”) fact that was made in order to deprive the person of their property of legal rights. Malice means acts where the employer intentionally caused injury to the plaintiff or acted despicably with a “willful and conscious disregard of the rights or safety of others.”

So unless the employer intentionally lied about an important fact to deceive the employee, committed some other fraud, or intentionally tried to injure the employee, the employee must show that the act of discrimination was despicable. Despicable means conduct that is so bad that it would be looked down upon and despised by ordinary decent people. Some examples of despicable conduct include conduct that is intended to humiliate an employee and force them to quit. It generally requires more than 1 act. For example in McGee v. Tucoemas Fed. Credit Union (2007) an employee with cancer was able to win punitive damages after the employer refused to give the employee extended leave after cancer treatment surgery, and then cancelled the employee’s medical insurance, and demoted the employee.

An employee must also prove with clear and convincing evidence that the employer either authorized the discrimination or learned of the discrimination and did nothing to prevent it; effectively ratifying the discrimination.

If you have been discriminated against due to your disability or perceived disability contact a California employment law attorney right away. Call the employment lawyers of the Law Offices of Michael S. Cunningham, LLP to schedule a free consultation at (858) 376-7390.