“Freaky Fast” Oppression? Jimmy John’s Should Reconsider its Approach to Blanket Noncompete Agreements

Most competent employment lawyers with experience pursuing and/or rebuffing enforcement of noncompetition agreements know that enforcement against low level workers is highly unlikely.  If recent news reports are true, Jimmy John’s apparently never got that memo.

According to reports in The New York Times, The Oregonian and the Huffington Post, the restaurant franchise is requiring all workers, including sandwich makers, to sign broad noncompetition agreements that restrict their employment opportunities for two years after leaving their cushy, highly technical jobs at Jimmy John’s.

Let’s start with the understanding that courts don’t like noncompetition restrictions, which limit a worker’s ability to pursue his career as he sees fit.  Courts use a variety of tools to limit the enforcement of those clauses.  Although courts use different terms to describe it, almost every decision analyzing enforcement of a noncompetition agreement talks about whether the former employer has a “protectible interest.”  In layman terms that means, is there something legitimate that the former employer actually needs to protect by restricting the post-termination employment opportunities of its former employees?  Customer relationships, knowledge of the company’s confidential or trade secret information, or specialized training provided by the former employer are often found to be sufficient “protectible interests” to justify enforcement of a contract clause which limits the worker’s future employment opportunities.  If there is no “protectible interest,” a court won’t enforce the agreement.

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Video Interview: Discussing California’s Paid Sick Leave with LXBN TV

My colleague Bryan Hawkins recently discussed California’s new paid sick leave law with Colin O’Keefe of LXBN. You can catch the interview on the clip below. As Bryan noted in his original post, California is the second state in the nation (after Connecticut) to enact a state-wide law requiring most employers to provide paid sick leave to employees, marking the latest development in a growing trend that has seen similar paid sick leave laws enacted in other jurisdictions, mostly at the city level.

California Court of Appeal Rules Employers Must Reimburse Employees For Work Calls on Personal Cell Phones

The California Court of Appeal’s recent decision in Cochran v. Schwan’s Home Service, Inc.  was simple.  When employees must use their personal cell phones for work, California law requires employers to reimburse them, regardless of whether the cell phone plans are for limited or unlimited minutes.  This decision, however, could have a wide ranging impact on California employment law.

The plaintiff in Cochran sought to bring a class action lawsuit against his employer based on his employer’s alleged failure to reimburse him and similarly situated employees for use of their personal cell phones for work-related calls.  The superior court denied plaintiff’s motion for class certification, finding that the claim was not suitable for class treatment because individual issues predominated.  Specifically, the superior court reasoned that the defendant employer’s liability to prospective class members depended on individual factual issues such as whether employees paid for the cell phone plan themselves, whether employees purchased different cell phone plans because of their work cell phone usage, or whether employees suffered any “actionable expenditure or loss,” i.e., loss of cell phone minutes.

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California Enacts State-Wide Paid Employee Sick Leave Law

iStock_000011905991SmallOn September 10, 2014, California Governor Jerry Brown signed AB 1522 (the “Healthy Workplaces, Healthy Families Act of 2014”) and made California the second state in the nation (after Connecticut) to enact a state-wide law requiring most California employers to provide paid sick leave to employees.  This marks the latest development in a growing trend that has seen similar paid sick leave laws enacted in other jurisdictions in recent years, mostly at the city level, including in Seattle in 2012, in Portland, OR in 2013, and in Eugene, OR in 2014.

Under the California law, most California employees who work 30 or more days within a year will accrue one hour of paid sick leave at their regular rate of pay for every 30 hours worked.  The law also imposes new notice and recordkeeping requirements onto California employers.

The law allows employees to carry over accrued paid sick days from one year to the next.  Employers, however, are allowed to limit an employee’s use of paid sick days to 24 hours or three days a year and to cap accrued paid sick leave at either 48 hours or 6 days.  While an employer is not obligated to pay out accrued but unused paid sick leave at termination, if an employee separates from an employer and is rehired within one year from the date of separation, previously accrued and unused paid sick days must be reinstated.  If an employer already has a paid leave policy or paid time off policy, it is not required to provide additional paid sick days under the new law so long as its existing policy satisfies certain requirements, including making available an amount of leave that may be used for the same purposes and under the same conditions as specified in the Act.

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World of Employment Blog Launches New Responsive Design and Enhanced Reader Features

Dear World of Employment Blog readers. We’ve been blogging since 2008, and while our commitment to keep you informed on major employment law developments hasn’t changed, technology certainly has. Six years ago, it was still a desktop- and RSS-dominated world. Today, more and more of you are reading our posts on tablets and smartphones. As readers ourselves, we understand your need for news on-the-go and at your convenience.

So we’re very excited to announce to you today a completely new – and improved – blog design, along with new feature sets we think will enhance your content experience.

  • First, World of Employment Blog now uses a responsive design format. So no matter where – or on what device – you visit us, you can be assured of a consistent, clean and crisp reader experience.
  • Second, we’ve added new social sharing features to our posts. With easy-to-read social icons, sharing World of Employment blog posts with your social networks is now a snap.
  • Third, we’ve improved our content subscription options. We’ve expanded the number of RSS subscription feeds, optimized the look and feel of our email subscription service, and added links to our Twitter feed as an alternative content consumption option.

We hope you find these changes useful. Thanks again for visiting and keeping us among your must-read bookmarks!

California Supreme Court Clarifies When a Franchisee’s Employees Can Bring Employment Claims Against the Franchisor in Taylor Patterson v. Domino’s Pizza, LLC

In Taylor Patterson v. Domino’s Pizza, LLC, the California Supreme Court restricted the ability of a franchisee’s employees to sue the franchisor based on theories of vicarious liability and the theory that the franchisor was an “employer” under California’s Fair Employment and Housing Act (“FEHA”). With this decision, franchisors can breathe a sigh of relief as the Supreme Court’s decision could have opened the flood gates for employment claims brought by employees seeking a recovery from the perceived “deep pocket” franchisor.

The plaintiff in Taylor alleged that she was sexually harassed by her supervisor while employed at a Domino’s Pizza franchise owned and run by a company called Sui Juris. She subsequently filed suit against her supervisor, Sui Juris, and the franchisor, Defendant Domino’s Pizza Franchising, LLC (“Domino’s”). Plaintiff’s claims against Domino’s were premised on the theory that Domino’s was her and her supervisor’s employer.

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9th Cir. Finds FedEx Delivery Drivers Are Employees, Not Contractors

Last week, the 9th Circuit held in two related cases from California and Oregon that FedEx misclassified approximately 2,600 delivery truck drivers as independent contractors, rather than as employees. The cases—Alexander v. FedEx and Slayman v. FedEx—are an important reminder for employers that reality matters more than labels when it comes to classifying workers. 

On that note, the most succinct (and most memorable) summary of the rulings appears in Judge Trott’s short concurrence in Alexander:

“Abraham Lincoln reportedly asked, ‘If you call a dog’s tail a leg, how many legs does a dog have?’ His answer was, ‘Four. Calling a dog’s tail a leg does not make it a leg.’ . . . Labeling the drivers ‘independent contractors’ in FedEx’s Operating Agreement does not conclusively make them so . . . .”

The two cases dealt with virtually identical facts. FedEx’s Operating Agreement (“OA”), which principally governed its business relationships with the 2,300 California drivers and 363 Oregon drivers in each class, contained several generalized clauses that suggested the drivers were independent contractors. For example, the OAs provided that “the manner and means of reaching [the parties’ “mutual business objectives”] are within the discretion of the [driver], and no officer or employee of FedEx . . . shall have the authority to impose any term or condition on the driver . . . which is contrary to this understanding.” The two opinions noted, however, that neither California nor Oregon law views a contract’s description of a worker as an independent contractor as dispositive of the worker’s true status.

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“Isn’t there supposed to be a good cop?” — 9th Circuit Holds Bilious Conduct Not a Disability Under ADA

Cantankerous employees beware! Being a jerk is not a disability and, at least according to the Ninth Circuit in Weaving v. City of Hillsboro, blaming bad behavior on a physical or mental impairment does not guarantee protection under the Americans with Disabilities Act ("ADA").

Matthew Weaving was diagnosed with ADHD as a child, but stopped exhibiting symptoms at the age of 12 and was taken off of his ADHD medication. His interpersonal problems continued through adolescence and into adulthood. Weaving pursued a career as a police officer and eventually joined the Hillsboro (Oregon) Police Department in 2006. His relationship with subordinates and peers was strained. Co-workers complained that he often was demeaning and derogatory. Following a subordinate’s complaint about Weaving in 2009, the Police Department placed him on leave pending investigation.

While on leave, Weaving decided that some of his interpersonal difficulties might have been due to ADHD so he sought a mental health evaluation. The psychologist concluded that Weaving had adult ADHD and sent a letter to the police department explaining his diagnosis. The next day, Weaving sent a letter informing his employer about the diagnosis and requesting “all reasonable accommodations.”

A few weeks later, the police department concluded its investigation, finding that Weaving had created and fostered a “hostile work environment for his subordinates and peers,” noting that they described him as “tyrannical, unapproachable, non-communicative, belittling, demeaning, threatening, intimidating, arrogant and vindictive.” Following a fitness for duty examination in which two doctors found Weaving fit for duty despite his ADHD diagnosis, the police department terminated Weaving’s employment.

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Washington Court of Appeals Expands “Jeopardy” Element of Claim for Wrongful Discharge in Violation of Public Policy

This month the Washington State Court of Appeals, Division III issued a ruling in Becker v. Community Health Systems, Inc. that expands protections in a wrongful termination action based on violation of a public policy.

In Becker, the Plaintiff, a former chief financial officer for Community Health Systems, Inc. (“CHS”), alleged that while CHS initially represented that it would have a $4 million operating loss, Becker calculated a projected $12 million operating loss in 2012. When CHS requested Becker revise his projection prior to submitting it to the U.S. Securities and Exchange Commission (“SEC”), Becker refused. CHS placed Becker on a performance improvement plan and conditioned his continued employment on revising the loss projection. Becker documented his concern with the CHS calculation and advised the company that unless it remedied its misconduct he would be forced to resign. CHS accepted Becker’s notice as a resignation. 

Becker sued in superior court for wrongful discharge in violation of public policy (he also filed a whistleblower retaliation complaint with the U.S. Occupational Safety and Health Administration).  After the trial court denied CHS’s motion to dismiss for failure to state a claim under CR 12(b)(6), CHS sought discretionary review with the Court of Appeals.

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Facebook “Like” Button – Protected Activity? It Depends on What You “Like”!

In an ever expanding arc of decisions that extends the NLRA’s protections to a wide range of employee conduct – both on-and off-duty, and in union and non-union settings alike – the NLRB last week decided that merely clicking on Facebook’s “Like” Button was concerted, protected activity. Triple Play Sports Bar, 361 NLRB No. 31 (August 22, 2014).

Triple Play Sports Bar is a non-union employer whose owners had a little difficulty preparing annual payroll tax calculations, and as a result, employees owed state income tax in arrears. One of the employees – not happy at the prospect of back taxes – posted on her Facebook “Status Update,”

Maybe someone should do the owners of Triple Play a favor and buy it from them. They can’t even do the tax paperwork correctly‼! Now I OWE money … Wtf‼!

Other employees chimed in with comments of their own (“[the owner] f***** up the paperwork…as per usual”; “[the owner is] such a shady little man. He prolly [sic] pocketed it all from our paychecks…”; “Such an a******”), as did a couple of the Sport’s Bar’s customers. But one employee simply pressed the “Like” button and made no other comments. Company owners terminated the employees for defamation and disloyalty.

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