California Civil Code Section 3294, states:“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”

“Oppression” is defined as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.”

“Fraud” means “intentional misrepresentation or deceit.”

“Malice” is defined as “conduct which is intended by the defendant to cause injury to the plaintiff” or that shows a “willful and conscious disregard of the rights or safety of others.”

What are some of the common scenarios where punitive damages are awarded?In order to be successful in obtaining punitive damages, you must have sufficient evidence to show that one of the above definitions apply under a higher burden of proof (clear and convincing evidence) than a normal civil claim preponderance of the evidence). The difference means that the evidence must be in the plaintiff's favor much more strongly than the 51% standard of a  typical civil claim.  However, there are many instances where punitive damages apply to either a personal injury or an employment claim.  Some common examples include the following:

  • Car accident claims where the defendant was driving under the influence of alcohol or drugs (DUI/ DWI) at the time of the accident.
  • Intentional torts (assault, battery, sexual assault, sexual abuse, etc.)
  • Some wrongful termination claims
  • Cases of fraud
Since these claims allow you to recover additional damages above and beyond just those meant to compensate you for your losses, it is important that you consult with an attorney on these claims as soon as possible following the incident giving rise to the claim to ensure that the evidence needed to prove your claim is properly secured, gathered, and presented at trial.



 
 
Non-compete clauses are those that attempt to restrict a former employee from entering the same trade or profession after departing from a company.  Non-compete clauses have become increasingly prevalent in modern labor market as companies seek to keep their employees from using the experience and information they gain in one position from turning into a liability when those employees find jobs elsewhere.  Although other states allow such clauses, generally, non-compete clauses are illegal in California.  The same is true of non-competition and non-solicitation clauses in employment contracts. 

California has consistently upheld a public policy against any provision that seeks to restrain competition in the context of employment agreements.   In perhaps the most notable case on the topic Edwards v. Arthur Andersen LLP, 44 Cal.4th 937,  the California Supreme Court, unanimously held that Business & Professions Code Section 16600 invalidated a provision in Edwards' employment agreement that restricted him from servicing customers and competing with Arthur Andersen following the termination of his employment.  Notwithstanding the general premise that non-competition agreements are invalid, specific Sections of the B&P Code provide certain exceptions to California's policy against enforcing non-competition covenants which apply in limited circumstances.

There are two notable exceptions:  Sale of Goodwill of a Business, and Dissolution of a Partnership or Limited Liability Company.

When a person who sells the “goodwill of a business” or otherwise disposes of his/her ownership interest in the business entity. This person may agree with the buyer to refrain from carrying on a similar business within a specified geographic area in which the business is sold.  When the goodwill of a business is sold, non-competition covenants are generally enforceable because it would be "unfair" for the seller to engage in competition which diminishes the value of the assets he sold. 

Other exceptions concern the dissolution of either a partnership or limited liability company.  Again, in these circumstances, the person who is leaving the existing entity agrees that he or she will not carry on a similar business within a specified geographic area where the existing partnership or limited liability company is located.


Attempts to avoid California's policy against non-competition covenants by making contracts subject to the laws of a  jurisdiction outside of California often fail.  Typically, California courts will enforce a contractual choice of law provision if the chosen state has a substantial relationship to the parties or their transaction, or if there exists any other reasonable basis for the parties' choice of law, unless, the chosen state's law is contrary to the fundamental public policy of California. 


If you are uncertain whether a clause in an employment agreement is enforceable in California, contact our office for a free evaluation of your specific situation.



 
 
One common question in wage and hour complaints is “When should I receive my final paycheck?” The rules on payment of final wages vary depending on the circumstances of the employee’s departure.

If you were fired: If your employer fires you, the wages earned and unpaid at the time of discharge are due and payable immediately at the place of discharge. (Labor Code §§201(a); 208.)  As with any good rule, there is an exception for employees in “seasonal employment in the curing, canning, or drying of any variety of perishable fruit, fish or vegetables,” who may be paid within 72 hours of termination. (Labor Code §201.)

If you were laid off: Under the opinions from the California Labor Commissioner, an employee who is laid off without a specific return date within the normal pay period has been effectively terminated and must immediately be paid all wages due and payable. If you are laid off with a return date within the pay period, the wages may be paid at the next regular pay day. (2002 Division of Labor Standards Enforcement Policies and Interpretations Manual §3.2.2 (rev 2009).)  

If the business was sold (and closed):  Under the opinions from the California Labor Commissioner, the sale of a business effectively terminates the company’s employees, all of whom must be paid any earned wages, along with any accrued vacation. (DLSE Manual §3.2.2.1.)

If you quit: If the employee doesn’t have a written employment contract for a definite period of time (e.g., a contract for 1 year of employment) and voluntarily quits his or her job, the payment of final wages depends on the timing of the resignation (Lab Code §202):

  • If the employee gave at least 72 hours’ prior notice of his or her intention to quit, the employee must be paid his or final wages on the final day of employment.
  • If the employee gave less than 72 hours’ prior notice of his or her intention to quit, the final wages are due 72 hours after notice of the resignation was provided.
An employee who quits with less than 72 hours’ notice must physically return to the office or agency of the employer in the county in which the work was performed to recover his or her final wages unless the employee requested payment by mail and provided a mailing address for his or her final paycheck. (DLSE Manual §3.7.  Labor Code §208.)

If you are an employer: The best way to ensure that you don’t run into a complaint for payment of final wages is to incorporate the above rules into your policies and ensure your HR department is following them.  

As an example a sound policy addressing the payment of final wages may contain the following four statements:

  1. An employee who is terminated involuntarily will be provided with a final paycheck at the time of termination.
  2. An employee who provides at least 72 hours’ notice of his or her resignation will be provided with a final paycheck on the last day of work.
  3. The final paycheck of an employee who resigns with less than 72 hours’ notice will be made available at the employee’s regular workplace within 72 hours of the employee’s last day of work, unless the employee requests in writing that the paycheck be mailed.
  4. Final paychecks will include payment for wages owed, including any accrued but unused vacation time, minus any authorized or required deductions.
 
 
When your employer takes action against you because of  certain personal characteristics, you may have been the victim of Employment Discrimination.  California and Federal law specifically prohibits employers from treating employees unfairly because of their race, sex, color, national origin, age, religion, disability, marital status, medical condition, sexual orientation or gender identity. For example, if you were fired because you are female, pregnant, or have a disability, you likely have a valid claim of discrimination against your employer. 

If you have experienced job discrimination and you cannot resolve the situation with your employer, you should consult an attorney to assist you with filing a formal claim with The state Department of Fair Employment and Housing (DFEH) and the federal Equal Employment Opportunity Commission (EEOC) who investigate claims of job-related discrimination.  This is the first step in resolving your discrimination claim.  In fact, you cannot file a lawsuit without first filing a claim with one of these agencies.    Your initial statements to the DFEH or EEOC could limit what you are allowed to claim in any future lawsuit. An attorney will help ensure that your claim is filed properly providing you with the best opportunity to obtain a recovery for the discriminatory treatment.  Generally, a claim must be filed with the DFEH within one year of the discriminatory event. Alternatively, a claim must be filed with the EEOC within 300 days of the discriminatory event. 

Finally, if you’ve avoided reporting illegal discrimination or filing a claim with the DFEH or EEOC for fear of retaliation, you should be aware that state and federal law prohibits employers from firing or otherwise retaliating against any employee who complains about discrimination. If you are claiming retaliation, be sure that it is specifically referenced in the form that the agency prepares on your behalf.

Contact the law offices of Sean M. Patrick for an evaluation of your potential discrimination claim.  

 
 
Is there a minimum that I should be paid?The minimum wage in California is $8 per hour until July 1, 2014, when it will increase to $9 an hour. On January 1, 2016, the minimum wage will increase again, to $10 an hour. 

Is the minimum wage different in California for tipped employees?Although the FLSA and the laws of some states allow employers to pay tipped employees a lower minimum wage, California law does not. In California, tipped employees are entitled to the full minimum wage for every hour worked.

Am I entitled to a lunch or rest break in California?
Yes. Employees in California are entitled to a meal break of 30 minutes, unpaid, after five hours, except when the workday will be completed in six hours or less and the employer and employee consent to waive the meal break. The employee cannot work more than ten hours a day without a second 30-minute break, except if the workday is no more than 12 hours. The second meal break may be waived if the first meal break was not waived. An on-duty paid meal period is permitted when the nature of work prevents relief from all duties and the parties agree in writing. Employees are also entitled to a paid ten-minute rest period for each four hours worked or major fraction thereof, as practicable, in the middle of the work period. This is not required for California employees whose total daily work time is less than three-and-a-half hours.

Am I entitled to overtime pay?
In California, eligible employees must receive overtime if they work more than eight hours in a day or 40 hours in a week. After working 12 hours in a day, California employees must receive double time. If an employee works on a seventh day, that employee is entitled to time and a half for the first eight hours of work and double time for additional hours. Not every type of job is eligible for overtime. 


My Employer says I am "exempt."  What does that mean?
Exempt employees are those that meet certain criteria that are not entitled to overtime pay.  Some of the most significant  lawsuits have been the result of an employer's misclassification of employees as nonexempt employees as though they were exempt from California overtime. 


Job titles alone do not determine if a California employee is exempt or nonexempt. An employee with an impressive job title may not qualify as an exempt employee if his/her actual duties do not meet the requirements for one of the exemptions. To determine whether the California employee is primarily engaged in exempt work, the court will examine the work performed by the employee during the workweek.  Also, exempt employees generally must earn a minimum monthly salary of no less than two times the state minimum wage for full-time employment. Paying an employee a salary does not make them exempt, nor does it change any requirements for compliance with wage and hour laws.  Most California employees who are classified as exempt customarily and regularly exercise discretion and independent judgment in their jobs. 


If you believe that your employer is not following the rules for California's Wage and Hour Laws, contact our office for a FREE case evaluation.
 
 
In California, most employment is “at-will” meaning that an employer or employee may terminate the employment at any time for almost any reason.  There are of course exceptions to this general rule.  Those exceptions include any action taken by the employer based on or done because of a protected characteristic. Protected characteristics include race, religion, sexual orientation, mental or physical disability, gender, gender identity, pregnancy, national origin, etc. It is also illegal to fire an employee because the employee complained of or reported illegal acts by the employer. Firing an employee for complaining about labor law violations, such as unpaid overtime or failure to provide meal and rest breaks, is another common basis for a wrongful termination claim.  

California courts have also held that an employer’s general right to terminate an “at-will” employee is ‘subject to limits imposed by public policy, since otherwise the threat of discharge could be used to coerce employees into committing crimes, concealing wrongdoing, or taking other action harmful to the public.

However, if the employer provides oral assurances of continued employment, the “at will” relationship may found to have been modified, which may require the employer to establish “good cause” prior to terminating the employee. In the legal sense of the phrase as used under California state law, “good cause” means “fair and honest reasons, regulated by good faith on the part of the employer, that are not trivial, arbitrary, or capricious, unrelated to business needs or goals, or pretextual.

If you have lost your job and are unsure whether it was wrongful termination, you should have you situation reviewed by an attorney to ensure that you are protecting your rights.

 
 
There is no set definition of the term “independent contractor” and as such, one must look to the interpretations of the courts and enforcement agencies to decide if in a particular situation a worker is an employee or independent contractor. In handling a matter where employment status is an issue, that is, employee or independent contractor, California law starts with the presumption that the worker is an employee. (See Labor Code Section 3357). This is a rebuttable presumption however, and the actual determination of whether a worker is an employee or independent contractor depends upon a number of factors, all of which must be considered, and none of which is controlling by itself. 

Consequently, it is necessary to closely examine the facts of your relationship with your employer and then apply the law to those facts. Generally, this means applying the “multi-factor” or the “economic realities” test adopted by the California Supreme Court in the case of S. G. Borello & Sons, Inc. v Dept. of Industrial Relations (1989) 48 Cal.3d 341. In applying the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered (the employer or principal) has control or the right to control the worker both as to the work done and the manner and means in which it is performed. Additional factors that may be considered depending on the issue involved are: 

1. Whether the person performing services is engaged in an occupation or business distinct from that of the principal; 
2. Whether or not the work is a part of the regular business of the principal or alleged employer; 
3. Whether the principal or the worker supplies the instrumentalities, tools, and the place for the person doing the work; 
4. The alleged employee’s investment in the equipment or materials required by his or her task or his or her employment of helpers; 
5. Whether the service rendered requires a special skill; 
6. The kind of occupation, with reference to whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; 
7. The alleged employee’s opportunity for profit or loss depending on his or her managerial skill; 
8. The length of time for which the services are to be performed; 
9. The degree of permanence of the working relationship; 
10. The method of payment, whether by time or by the job; and 
11. Whether or not the parties believe they are creating an employer-employee relationship may have some bearing on the question, but is not determinative since this is a question of law based on objective tests. 

Even where there is an absence of control over work details, an employer-employee relationship will be found if (1) the principal retains pervasive control over the operation as a whole, (2) the worker’s duties are an integral part of the operation, and (3) the nature of the work makes detailed control unnecessary. (Yellow Cab Cooperative v. Workers Compensation Appeals Board (1991) 226 Cal.App.3d 1288) 

Other points to remember in determining whether a worker is an #employee or independent contractor are that the existence of a written agreement purporting to establish an independent contractor relationship is not determinative (Borello, Id.at 349), and the fact that a worker is issued a 1099 form rather than a W-2 form is also not determinative with respect to independent contractor status. (Toyota Motor Sales v. Superior Court (1990) 220 Cal.App.3d 864, 877)