Let the Franchisor Beware: The NLRB Finds That McDonald’s Is Liable for the Conduct of Its Franchisees
Many of the market leaders in the industries that pay the lowest wages (think of fast-food restaurants and convenience stores) use a common device to limit their liability for unlawful conduct: the franchise. These companies (franchisors) grant franchises to other entities (franchisees) to operate locations in their name. 
Often the franchisees have limited assets. As a result, employees who challenge illegal labor practices at the franchises are unable to collect any money even when they prevail on their claims.
Some of these market leaders also use the franchise device to deny responsibility for the conduct of their franchise operators. For example, in response to the growing movement to require fast food restaurants to pay their workers a living wage, many of the market leaders have dubiously claimed that they have no control over the wages that their franchisees pay. They are thus seeking to use the franchise as an excuse for washing their hands of culpability for a situation in which women and men who work full time remain mired in poverty.
SSP Attorney Mana Barari Appointed to State Bar Commission
Hunter Pyle Law is proud to announce that associate attorney Mana Barari has been appointed by the State Bar Board of Trustees to the California Commission on Access to Justice.
The California Commission on Access to Justice was established in 1997 to pursue long-term fundamental improvements in the civil justice system so that it is truly accessible for all, regardless of income, geography, or language ability. The Commission pursues a wide range of projects to fulfill its mission, including funding local legal services programs around the state, helping to establish and expand court-based self-help centers, and the publication of reports focusing attention on possible solutions to access problems.
Ninth Circuit Clarifies California Labor Law Protections for Truck Drivers in Dilts v. Penske Logistics
California labor laws almost always offer stronger protections than their federal counterparts, which set the minimum baseline for all states. However, for some categories of employees, the California Labor Code protections can be preempted by federal laws- meaning the federal law supersedes the California law. Federal 
preemption of California laws almost always translates into fewer protections for employees.
Two federal regulatory schemes in particular contain preemption clauses: the Federal Aviation Administration Authorization Act of 1994 (FAAAA), dealing with motor carriers (the trucking industry), and the Airline Deregulation Act of 1978 (ADA), dealing with the air carriers. Both laws bar the application of California laws “relating to the rates, routes, or services” of any air or motor carrier.
Guidelines from the Northern District Regarding Class Action Settlements
The United States District Court for the Northern District of California has issued a document called “Procedural Guidance for Class Action Settlements” (Guidance). The Guidance is extremely helpful, and offers a glimpse at the prevailing wisdom with respect to settlements of class actions, at least in federal court.
The first section of the Guidance addresses motions for preliminary approval (MPAs), making the following noteworthy points:
Ayala v. Antelope Valley: When are “Independent Contractors” really Employees?
On June 30, 2014, in Ayala v. Antelope Valley Newspapers, Inc., the California Supreme Court clarified the appropriate test to use when determining whether “independent contractors” are actually employees for the purposes of California’s wage and hour laws. The Court also provided a clear road map that lays out how courts should analyze class actions that raise this issue. These clarifications are welcome, and should help more plaintiffs achieve class certification in similar cases in the future.
The plaintiffs in Ayala deliver daily newspapers to people who subscribe to the Antelope Valley Press. Antelope Valley Newspapers, Inc. (Antelope) classifies these delivery men and women (called carriers) as independent contractors, not employees. As a result, they are deprived of the wage and hour protections to which they would otherwise be entitled.
An Epic Dissent: Justice Werdegar Nails it in Iskanian
The majority opinion in Iskanian has been discussed at length, both here and in every other employment blog that touches on California law. What has been overlooked, however, is the incredibly eloquent and persuasive dissenting (and concurring in part) opinion written by Justice Kathryn Werdegar.
The fundamental points made by Justice Werdegar are that (1) class actions are a form of collective action; (2) Congress has made it clear for eighty years that contracts that strip employees of the right to engage in collective action are illegal; and (3) therefore class action waivers are illegal and unenforceable.
Ninth Circuit Clarifies Some Issues and Ducks Others Regarding Arbitration Agreements
The Court of Appeal for the Ninth Circuit recently issued a pair of decisions that help to clarify the law surrounding arbitration agreements: Davis v. Nordstrom (holding that no particular form of notice is required to modify existing arbitration agreements) and Johnmohammadi v. Bloomingdale’s (opportunity to opt out of arbitration agreements with class action waiver defeats argument that federal labor laws bar such waivers).
In Davis v. Nordstrom, Inc. (9th Cir.2014) 2014 DJDAR 8019 the court clarified the law with respect to whether and how an employer can modify an existing arbitration agreement so as to prohibit class actions. The plaintiff in Davis had received an employee handbook that required arbitration but permitted class actions. In 2011, Nordstrom revised the arbitration agreement to bar class actions.
A Win for California Workers: Iskanian Upholds and Strengthens PAGA Claims
In Iskanian v. CLS Transportation Los Angeles, LLC, filed on June 23, 2014, the California Supreme Court strengthened the Private Attorneys General Act (PAGA), Labor Code § 2698, et seq. Specifically, the Court held that arbitration agreements that waive employees’ right to proceed with representative PAGA actions violate public policy. As such, they are not enforceable. This aspect of the Court’s opinion is a huge win for employees, and means that PAGA actions are alive and well even where employers seek to avoid them through contractual waivers. (more…)
The Bad News: Supreme Court finds Qualified Immunity in Lane v. Franks
[This is the second of two posts on the United States Supreme Court’s decision in Lane v. Franks. The facts of the case and its procedural history are set forth in the first post, and will not be repeated here.]
After siding with the plaintiff in the first part of its opinion, the Supreme Court turned its attention to the issue of qualified immunity. Qualified immunity is a judicially created doctrine that drastically limits people’s ability to sue public officials for illegal conduct. The way that it works is that courts are not permitted to award damages in lawsuits against government officials in their personal capacity unless two requirements are met:
First, the government official must have violated a statutory or constitutional right.
Second, the right at issue must have been clearly established at the time of the violation. However, in order for a court to find that a right was clearly established, there does not need to be a prior case with identical, or even materially similar, facts. Instead, the question is whether the preexisting law provided the defendant with fair warning that his or her conduct was unlawful. See Flores v. Morgan Hill (9th Cir.2003) 324 F.3d 1130, 1136-37.
In Lane, the Supreme Court found that the appropriate question for resolving whether qualified immunity applied was whether the defendant, Mr. Franks, could reasonably have believed, at the time that he fired the plaintiff, that a public employer could terminate an employee because of testimony that the employee gave that was outside of the scope of the employee’s normal job duties. (more…)
The Good News: Supreme Court Expands Free Speech Protection in Lane v. Franks
In Lane v. Franks (June 19, 2014) No. 13-483, the Supreme Court of the United States provided further guidance regarding two important issues for government employees who blow the whistle. First, the Court explained that speech that merely concerns the employee’s job duties, as opposed to being part of the employee’s job duties, is protected under the First Amendment. Second, the Court clarified what a government employee must show in order to survive a motion to dismiss based on qualified immunity. (The qualified immunity issue will be discussed in a separate blog post that will follow shortly.) (more…)