Employment lawyers trying to figure out how to abide by California lunch break laws are on pins and needles waiting for the state Supreme Court's decision in Brinker Restaurant v. Superior Court (Hohnbaum) (2008) 165 C.A.4th 25 and Brinkley v. Public Storage (2008) 167 C.A.4th 1278. The case is fully briefed. Progress can be monitored at http://appellatecases.courtinfo.ca.gov/search/case/mainCaseScreen.cfm?dist=0&doc_id=1898028
On review are holdings that the employer only has to provide meal breaks, and does not have to ensure that they are taken. Another issue that may be decided is when exactly does the break have to occur.
Here's a recap of the law as it stands until the Supremes tell us different: According to California Labor Code Section 512, hourly employees must be given their lunch break before the end of their fifth hour of work if they are going to work longer than six hours. How do we know the break must occur before the end of the fifth hour? The California Department of Labor Standards Enforcement said so. http://www.dir.ca.gov/dlse/FAQ_MealPeriods.htm..
Wednesday, July 29, 2009
Tuesday, July 28, 2009
Make a Federal Case Out of It
When I was young, when we kids would start to get worked up about some childhood dispute between us siblings, my dad would say, "Don't make a federal case out of it!" So I grew up believing that only major disputes should be filed in federal court. This isn't actually the rule, however, but there is still some wisdom in that admonishment. Don't make a federal case out of something unless you are ready for some serious rigamarole--defined at http://dictionary.reference.com/browse/rigamarole as "an elaborate or complicated procedure".
Take, for instance, the Central District of California's local rules on e-filing. Once a complaint is filed, all ensuing documents must be filed electronically (and many judges require a paper copy delivered to the tray outside of chambers within 24 hours thereafter). However, if your answer includes a counterclaim, that is considered a "case-initiating document" which must be filed traditionally.
But wait, there's more! You cannot make this traditional appearance at the clerk's filing window with your case-initiating document unless you have first e-filed a "Notice of Manual Filing". At least the clerk will probably be kind enough to tell your messenger "wait here while I call your attorney" and proceed to call and inform you that you need to immediately e-file the Notice of Manual Filing which she is holding in her hand, as she is ready to kick it (and your case-initiating document as well) if you are out to lunch.
So that's a new twist: you can't traditionally file a counterclaim until you e-file a Notice of Manual Filing.
Take, for instance, the Central District of California's local rules on e-filing. Once a complaint is filed, all ensuing documents must be filed electronically (and many judges require a paper copy delivered to the tray outside of chambers within 24 hours thereafter). However, if your answer includes a counterclaim, that is considered a "case-initiating document" which must be filed traditionally.
But wait, there's more! You cannot make this traditional appearance at the clerk's filing window with your case-initiating document unless you have first e-filed a "Notice of Manual Filing". At least the clerk will probably be kind enough to tell your messenger "wait here while I call your attorney" and proceed to call and inform you that you need to immediately e-file the Notice of Manual Filing which she is holding in her hand, as she is ready to kick it (and your case-initiating document as well) if you are out to lunch.
So that's a new twist: you can't traditionally file a counterclaim until you e-file a Notice of Manual Filing.
Counting Paid Days Off
Many California employers wonder whether they should convert their current sick leave policy to one that allows “personal time off”, in which employees are given leave time but do not have to show it is needed for illness. Perhaps the employer plans to continue offering separate “vacation” time, and simply wishes to eliminate the need for employees to claim illness in order to take personal time. Employers are correct to wonder whether this would complicate their company’s leave policy.
If an employer offers leave time that is “unconditioned”, where the employee is not required to prove illness, then the leave time will accrue as deferred wages and will have to be paid out as severance upon termination of employment.
According to the Division of Labor Standards Enforcement, “personal time off” is given without condition, and thus, accrues and vests. DLSE 51.6.18 (personal days off given “without condition” cannot be forfeited and must be paid out as severance). Unconditioned leave (traditionally called “vacation”) must be paid out as severance if the employment terminates with unused leave. California Labor Code § 227.3 (employer policy shall not provide for forfeiture of vested vacation time upon termination) and Suastez v. Plastic Dress-Up Co. (1982) 31 C.3d 774 (paid vacation vests as deferred wages for services rendered).
An employer wishing to cap the amount of vacation time (or unconditioned leave) that accrues must explicitly state the existence of the cap in its policies. If it does, then an employee cannot store up over the years multiple weeks’ worth of pay to be deferred until severance. See Boothby v. Atlas Mechanical, Inc. (1992) 6 CA4th 1595 (cap permitted if stated in policies) and DLSE Manual 15.1.4. So, while there is no “use or lose” limit on vacation time, it is permissible to “cap” accrual until the employee exhausts all leave in the bank.
If an employer offers leave time that is “unconditioned”, where the employee is not required to prove illness, then the leave time will accrue as deferred wages and will have to be paid out as severance upon termination of employment.
According to the Division of Labor Standards Enforcement, “personal time off” is given without condition, and thus, accrues and vests. DLSE 51.6.18 (personal days off given “without condition” cannot be forfeited and must be paid out as severance). Unconditioned leave (traditionally called “vacation”) must be paid out as severance if the employment terminates with unused leave. California Labor Code § 227.3 (employer policy shall not provide for forfeiture of vested vacation time upon termination) and Suastez v. Plastic Dress-Up Co. (1982) 31 C.3d 774 (paid vacation vests as deferred wages for services rendered).
An employer wishing to cap the amount of vacation time (or unconditioned leave) that accrues must explicitly state the existence of the cap in its policies. If it does, then an employee cannot store up over the years multiple weeks’ worth of pay to be deferred until severance. See Boothby v. Atlas Mechanical, Inc. (1992) 6 CA4th 1595 (cap permitted if stated in policies) and DLSE Manual 15.1.4. So, while there is no “use or lose” limit on vacation time, it is permissible to “cap” accrual until the employee exhausts all leave in the bank.
Inventing at Start-Up Ventures
When an employee learns enough on the job to invent a better widget, employers have many ways to make sure the invention belongs to the employer, and to prevent the employee from giving it to a competitor. This is a hazard in start-up companies, where creative employees may get the idea that they don’t need corporate help and can make a profit on their invention. Or they may get “poached” by competitors, either those that are already established in the market or other start-ups. A confidentiality agreement will define the duties of everyone involved.
The confidentiality agreement serves two functions: deterrence and compensation. Employees will be less likely to jump ship to a competitor if they understand they are subject to restrictions. And, in the worst case scenario, if the employee takes an invention to a competitor, a lawsuit can include the employee as well as the competitor.
Employers can also claim ownership of the invention in other ways, such as an by having an employment agreement with a California Labor Code § 2870 provision. Even without an employment agreement, the provisions of Labor Code § 2860 establish employer ownership over the invention. This law states that “Everything which an employee acquires by virtue of his employment, except the compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.”
To some extent, the invention might be a trade secret protected by California Civil Code § 3426 et seq., again owned by the employer. This law establishes and preserves a code of commercial ethics. Taking the invention to a competitor is only permitted if the employee discovered it 1) by independent invention, 2) by reverse engineering an item purchased on the open market, 3) under a license from the owner of the trade secret, 4) by observation of the item in public, or 5) by obtaining the trade secret from published literature.
The “shop right” rule in patent law establishes employer ownership in an invention created on company time using company resources. On the other hand, the employee who independently develops a new invention or product outside of the scope of his or her job duties does not have to give his or her employer any royalty. This is true even if the nature of the employment may have given the employee the chance to conceive the idea, or improved the employee’s skills, scientific knowledge, and ideas.
Start-ups can protect their products by requiring a good confidentiality agreement from their workers, and making it clear that legal consequences will befall those who violate the terms.
The confidentiality agreement serves two functions: deterrence and compensation. Employees will be less likely to jump ship to a competitor if they understand they are subject to restrictions. And, in the worst case scenario, if the employee takes an invention to a competitor, a lawsuit can include the employee as well as the competitor.
Employers can also claim ownership of the invention in other ways, such as an by having an employment agreement with a California Labor Code § 2870 provision. Even without an employment agreement, the provisions of Labor Code § 2860 establish employer ownership over the invention. This law states that “Everything which an employee acquires by virtue of his employment, except the compensation which is due to him from his employer, belongs to the employer, whether acquired lawfully or unlawfully, or during or after the expiration of the term of his employment.”
To some extent, the invention might be a trade secret protected by California Civil Code § 3426 et seq., again owned by the employer. This law establishes and preserves a code of commercial ethics. Taking the invention to a competitor is only permitted if the employee discovered it 1) by independent invention, 2) by reverse engineering an item purchased on the open market, 3) under a license from the owner of the trade secret, 4) by observation of the item in public, or 5) by obtaining the trade secret from published literature.
The “shop right” rule in patent law establishes employer ownership in an invention created on company time using company resources. On the other hand, the employee who independently develops a new invention or product outside of the scope of his or her job duties does not have to give his or her employer any royalty. This is true even if the nature of the employment may have given the employee the chance to conceive the idea, or improved the employee’s skills, scientific knowledge, and ideas.
Start-ups can protect their products by requiring a good confidentiality agreement from their workers, and making it clear that legal consequences will befall those who violate the terms.
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