California’s meal period rules generally prohibit employers from having employees work more than 5 hours without providing a meal period of at least 30 minutes. However, the Wage Orders do recognize an exception to this rule where (1) the nature of the work performed by the employee prevents him/her from being relieved of all duty; and (2) the employee and employer agree in writing to an “on-duty” meal period.
It is important to bear in mind this is not a waiver of the meal period. A couple of additional points:
A persistent question is when does “the nature of the work” performed prevent the employee from being relieved of all duty for at least 30 minutes. Department of Labor Standards Enforcement (DLSE) opinion letters and case law suggest this determination must be made on a case-by case basis. Employers who avail themselves of this meal period exception should be wary of any kind of “blanket” application of the “on-duty” meal period for all employees, restricting its use to only those situations in which the employer can make a colorable argument that a normal, “off-duty” meal period is unrealistic.
Politicians in several states have been lobbying for years to make “bullying” in the workplace illegal. While Tennessee is the only state with such a law currently on its books, California took a step closer when Governor Brown signed AB 2053, which will require certain employers to provide “abusive conduct” training as a component of already mandatory sexual harassment prevention training for supervisory employees.
The existing requirement, found in Government Code section 12950.1, applies to employers with 50 or more employees and requires supervisory employees receive two hours of sexual harassment prevention training, within six (6) months following their assumption of a supervisory role. Follow up training is required every two years.
Here is what the amendment adds to Section 12950.1:
What Employers Should Do – Employers with 50 or more employees should immediately consult with their regular employment attorneys to update training to comply with the new law.
I was recently vetting some potential mediators with a colleague whose opinion I generally respect. In response to one of his proposals, I said, “yeah, but I’ve heard he doesn’t really know employment law.” My colleague responded, and I’m quoting, “I’ve become increasingly jaded that mediators believe the law and facts are impediments to the process.” This struck me as an interesting remark and I’ve continued to ponder it.
There is good reason for lawyers in the defense bar to be at least occasionally jaded about ADR methodologies. I’ve blogged a fair amount about the frustration we feel in knowing that many neutrals feel no compunction about bypassing or loosely enforcing evidence rules when conducting a binding arbitration. In my view, this undermines predictability and erodes the process. On the other hand, at least in the employment context, it is generally the defense that seeks to compel arbitration.
What about mediation? Are the law and facts of a case a waste of time–not only irrelevant, but actually impediments to the mediation process? There’s no point in fence sitting, so I’m going to commit to the ostensibly untenable view that this is both true, and false.
Yes, it’s true. All those times I diligently pursued discovery, and groomed my case to get it in front of a mediator; all that effort I spent meticulously crafting a brief, with notated exhibits; all that time I spent explaining, trying hard to educate the neutral why we had every right to whatever it was we were looking for–all that time and energy was wasted. Utterly.
This is because, from the mediator’s point of view, the deeper my client and I are entrenched in our position, believing our stance is firmly rooted in favorable law and good facts, the harder and longer she will need to work to get us to contribute, to give, to help her bridge the wide gulf that presently divides the parties.
Sure, she read my brief. She was paid to read it. And she has to know what the dispute is about. She might even be slightly impressed with my evidence gathering and presentation of the law. But beyond that, her focus needs to be much more on the dynamics of the parties. What’s at stake? Is the lawsuit ostensibly about money, but really about jealousy or feeling unappreciated? She knows the quicker she penetrates to the heart of the dispute the better her chances of finding a solution. The law and the facts–those that support a claim or defense–might really be impediments if they’re so good for one side that there’s little fear or risk.
I’m speaking here only of the very best mediators. I’m not talking about carrier pigeons, who simply shuttle demands and offers back and forth until the parties–basically on their own–get close enough that one caves simply to avoid seeing the neutral any more. Neither am I referring to mediators who use the raised-voice-cram-down method, essentially trying to procure settlement through intimidation. Interestingly, there is a place for both styles of mediators; they actually can get some cases resolved, but only certain kinds of cases, and the process can be torturous and messy.
The neutrals truly worth their fees, though, go well beyond shuttling demands and fist pounding. They take the time to get the psychic lay of the land. They determine which of the many impediments to settlement will be the biggest challenge and concentrate their energies there. In many instances, at least in the psychology surrounding what it will take to satisfy, scare or discourage the plaintiff sufficiently to reach a settlement, the admissible facts or applicable law may play only a minor role.
* * *
No, it’s false. I promised an inconsistent, untenable view and I will deliver. From the perspective of any civil defendant, the facts and law cannot be an impediment to settlement. There is nothing more important. Sure, the venue, judge and opposing counsel can play a role in the outcome of a lawsuit, but we rarely, if ever, highlight these inputs in a mediation brief or presentation. They are unspoken intangibles.
When a defendant or its lawyers permit the law and the (likely admissible) facts to take a back seat in the mediation process, it is regrettable. If it happens, the defendant trades its status as an agent, capable of acting, evaluating and defending its actions as appropriate or lawful, for the identity of a faceless, soulless “deep pocket,” nothing more.
It is routine, in cases in which the defendant has both a solid legal defense and good facts, for the mediator to harp away on the exorbitant cost of defending the case through trial and the risk, however small, of an adverse verdict. Of course it is–where else is she going to apply pressure to persuade a confident defendant to fork over what it will take to reach a settlement?
I don’t begrudge any defendant the need to think long and hard about defense costs when engaging in settlement negotiations, even if a case seemed otherwise completely airtight. But I believe a defense lawyer’s role in mediation requires him to continuously redirect the discussion back to the favorable law and facts when the neutral attempts to discount these to bring the parties closer (i.e., get my client to pay more). It is crucial to push back against this tendency to marginalize law and facts. In most instances, they are our only leverage.
This is not to say that, backstage, in confidential communications with our clients, we aren’t completely open and honest about risks and costs, regardless how solid its defense may be. In many instances, a defendant’s blind adherence to some good law and facts would be a recipe for disaster. After all, nobody knows what a jury will think and do. But these words are exchanged in private. At the mediation poker table, the defense lawyer must resist a neutral’s efforts to treat the facts and the law as impediments.
Except, of course, when the facts and the law aren’t so favorable.
California lawmakers and Governor Brown have been busy enacting new laws that are guaranteed to impact California businesses, particularly small employers. One requires employers to provide accrued, paid sick leave beginning on July 1, 2015.
The Healthy Workplaces, Healthy Families Act of 2014 (“Act”) will apply to all employers. It will cover employees, including otherwise exempt employees, who work 30 or more days in California within a year from the commencement of their employment. Excluded from the Act are: (1) employees covered by a collective bargaining agreement (“CBA”) that provides for paid sick leave; (2) certain construction employees covered by a CBA, even if it does not provide for paid sick leave; (3) airline flight crew employees who already accrue paid time off of at least one hour for every hour worked; and (4) in-home support service providers. There are additional requirements to trigger these exclusions.
Paid sick leave is accrued at a rate of “not less than” one hour for every 30 hours worked. Employers can limit accrued sick leave to 48 hours (6 days), and can limit carryover to 24 hours (3 days) each year. The hourly rate for sick pay is calculated by dividing the employer’s total wages (no overtime premium) by the total hours worked in the full pay periods of the prior 90 days. Calculating this rate may be challenging for employees paid at varying rates depending on work.
Sick leave will be available for treatment of a health condition or preventative care for the employee or a family member, or if the employee was a victim of domestic violence, sexual assault or stalking. There is a 90-day “threshold” period of employment that the employee must cross before first taking sick leave under the Act.
There are posting requirements. Employers must display a poster explaining the new sick leave accrual requirements. New employees must be informed in writing of sick leave accrual rights. All employees must be given notice of sick time accrued after each pay period. Employers must maintain records reflecting hours worked and sick leave accrued and used for three (3) years, so they can make them available if requested by the employee or Labor Commissioner.
Employers should act proactively to protect themselves from liability under either new law. Over the next few months, employers should revise policies, including handbooks, to reflect compliance with the new paid sick leave law. Employers are encouraged to consult with their regular employment attorneys to ensure they are in full compliance.
When California employees initiate complaints for unpaid wages (including misclassification or for unpaid overtime), the typical procedure is for the Labor Commissioner to schedule a conference, under California Labor Code Section 98.3, to include a Deputy Commissioner, the employer and the aggrieved employee.
A pamphlet issued by the Labor Commissioner says this about these conferences:
“The conference will be conducted informally and the parties will not be under oath. The purpose of the conference is to determine if the claim can be resolved without a hearing. Plaintiffs are not required to prove their case at the conference. The parties should be prepared to talk with the deputy about the claim, including whether there are any witnesses. However, the parties do not need to bring witnesses to the conference. Plaintiffs should bring a copy (not the original) of any document that supports the claim, but should not bring documents that have already been submitted with the claim form. Defendants should also bring any documents that support their position.”
The vast majority of wage claims resolve at this conference. And this should be a goal, since it’s essentially a “free” settlement conference, though the Deputy Labor Commissioners are not usually unbiased, which is why I strongly recommend that employers have attorneys accompany them to the conference.
If the claim does resolve during the conference, the Deputy Labor Commissioner has a form “settlement agreement” that they will fill out which purports to document the settlement. The parties will sign the agreement.
Unfortunately, this agreement is about as narrow as possible, meaning that, in exchange for the employer agreeing to pay a sum, the agreement provides only that the employee releases and waives her rights to further pursue the wage claim, but nothing else. If the employee subsequently decides to pursue a retaliation, discrimination or harassment claim, the agreement will have no impact.
I believe it is a prudent practice, when attending these conferences, to come prepared with a broader settlement agreement that, in exchange for the same sum of money, requires the employee to effectively release all claims she could have up until that point. A poorer alternative, I’ve found, is to make the settlement subject to the employee signing an agreement to be subsequently prepared and provided by the employer’s counsel. This is a poorer alternative because, after the employee leaves the conference, she may decide she wants to pursue additional claims, but will not be bound by any agreement.
What should a full blown settlement agreement include? Lawyers may disagree on this, but my practice is to spell out all potential statutes (i.e., Title VII, FEHA, Railroad Act, etc.). A California Civil Code Section 1542 waiver is routine. My agreement typically also includes both a nondisparagement and confidentiality clause (concerning the terms of the settlement). If the employee is no longer working for my client, I will also include a clause precluding her from applying for future employment, which effectively eliminates any claim that she was subject to retaliation or discrimination if not re-hired. Finally, my agreements always include choice of law, integration and merger clauses.
An employee, either alone or represented by counsel, might refuse to sign such a broad settlement agreement, and insist instead on the narrow agreement provided by the Labor Commissioner. You and your client will need to decide whether this is satisfactory. Perhaps it is. Perhaps it isn’t. Either way, you’ve come prepared.
I recently spent several days preparing inexperienced witnesses for their first depositions. Because it gives me an opportunity to be a teacher of sorts, I find this kind of preparation to be one of the more enjoyable aspects of lawyering.
One point that I feel can never be taught or practiced enough is for the deponent to understand when she has said enough in responding to a question. In other words, when to shut up.
It’s far too simplistic to teach a neophyte deponent “Just answer yes or no.” While that may indeed be excellent advice when the best possible answer is yes or no. And, assuming the deponent knows when the best possible answer is yes or no, answers correctly and stops there, then that tactic makes sense. But over the course of a deposition that lasts several hours or several days, there are going to be a lot of questions that simply cannot be answered using the “yes or no” strategy, and so I won’t have adequately prepared my witness.
This issue becomes particularly sticky in situations in which the examining lawyer does not possess a complete understanding of the subject matter and needs the deponent to guide him. In the arena of employment litigation we see this frequently. A plaintiff’s lawyer will have no practical understanding how the defendant’s business–say, manufacturing plastic widgets–actually operates. While the lawyer could learn everything he needs to know from his own client, I often find he will try instead to do this through deposition of a company Person Most Knowledgeable (PMK) witness.
When preparing such a witness, I begin by asking them to imagine that they are in a completely dark room, groping by hand to find familiar objects–a chair, a picture frame, a light switch! This, I tell the witness, is exactly what the examining lawyer feels like, and he is asking you to take his hand and guide him through the dark to the light switch. The all too human temptation, I warn the witness, is to do whatever you can to guide the helpless lawyer. This is not because the witness feels any affinity for the lawyer–probably the opposite. Rather, it is because the witness incorrectly perceives that, by helping the examining lawyer, she will more quickly bring the deposition to an end, which is what she wants more than anything.
The problem is that helping the examining lawyer will actually have the opposite effect. Every morsel of information the witness offers will give the examiner one more possible avenue to explore, one more path to go down. Instead of shortening the deposition, the additional information makes it go longer, and increases the likelihood that something damaging will make it onto a transcript. I teach that even the most experienced witnesses fall prey to this fallacy. With experts it can be even worse; they can have a tough time shutting up because the deposition gives them the platform they crave in order to showcase their special knowledge and smarts.
The question becomes, then, how to teach a prospective witness when enough is enough? Surprisingly, my favorite guru, Professor McElhaney, does not provide a great deal of guidance. In Litigation, he offers a list of rules to impress upon your client or witness about an upcoming deposition. Number 6 is, “Answer the question — not some other question–just the question you are asked. Say no more than is necessary to answer the question. Do not volunteer extra information or explanations.” Id. at 42.
That’s probably as good summary of the rule as there is. What’s left? Practice! In your mock deposition, take the witness through a lot of questions that she can either answer briefly, or ramble on. Whenever you find her rambling, cut her off. Practice this as much as necessary until she understands the concept.
And then practice some more!
[This article was previously published in the November 2, 2014 issue of California Litigation]
“Believe it or not, the composition and layout of some of my images fall precisely . . . within the Golden Ratio!” -Henri Cartier-Bresson
“I love the smell of napalm in the morning.” -Lt. Col. Kilgore, Apocalypse Now
When I was a young man, my father, a professional cinematographer, taught me the basics of photography. We worked in black and white, with his two cameras: a gracefully aging twin-lens Rolleiflex and a Nikon viewfinder that, even then, was already “vintage.” I attempted portraits of our Great Dane, architectural studies of our house, and still life compositions of houseplants. We even built a first rate darkroom in our basement. Though he could at times be a complicated, difficult man, I hold fond memories of the time spent with my father learning photography.
One lesson I vividly recall was his early counsel against recklessly burning through film in the gamble that I might get a single decent shot. “Any idiot can snap a hundred pictures,” he would say, a good cameraman takes his time, measures the exposure, and composes the shot.
It is interesting how rudimentary lessons we are taught in the context of one discipline often translate well to another. Here I’m thinking about the litigator’s craft. We have at our disposal a wide arsenal with which to conduct discovery, the core activity of building a case or developing a defense. Yet, just as “any idiot” with a camera and a motor drive (that relic from a bygone era in photography that advanced film with such alarming speed and a satisfying, if not utterly thrilling, sound — I acquired one for the brilliant whirring noise alone) could snap off perhaps a hundred shots in a single minute, hoping for just one good photograph, any lawyer deserving that “i”-word label can recklessly avail himself of the entire arsenal of discovery tools, hundreds of interrogatories, admissions and document requests, in the vain search for a single useful item of evidence.
Now, if that single item of evidence wins the case or appreciably improves a client’s bargaining position, it could be worth it, but only if the evidentiary value is not outweighed by the time, corresponding expense, and potential heartache of the ruthless search. But, like a reckless shutterbug who fails to appreciate the beauty of celluloid economy (anybody remember film?), it seems that many lawyers lack the experience, wisdom or restraint to recognize when the wasted time and expense of “scorched earth” style discovery will vastly outweigh any benefits.
Readers of my blog know that, when trying to sketch an image of professional incompetence, I often trot out an earlier iteration of myself as a dashing model of brazen, inexperienced ineptitude. Because it sweetens a bitter pill, I’ll do so again here. As a young grunt toiling at an insurance defense firm, I was often tasked with preparing written discovery, a job I took seriously. Probably every litigator practicing in California state courts knows there is a statutory limit to the number of interrogatories and requests for admission permitted under our state’s Code of Civil Procedure: 35. But, let’s face it, if you’re a second-year associate bent on Absolutely Annihilating the other side, 35 interrogatories is not enough. Oh, no. That’s not nearly enough. Fortunately, for eager young would-be Ninja Assassin litigators, the California Code allows us to serve an essentially unlimited number of interrogatories or RFAs, provided we include a declaration affirming the extra discovery is “warranted” because of the “complexity or the quantity of the existing and potential issues in the case,” the “financial burden on a party entailed in conducting the discovery by oral deposition,” or propounding burdensome written discovery makes sense because it affords a responder “the opportunity to conduct an inquiry, investigation, or search of files or records to supply the information sought.” Well, of course my 135 or so handcrafted, “wait ’til they have to answer these babies,” special interrogatories were always “warranted.” Why? Because I swore in a declaration that they were. Quod erat demonstrandum.
Before you conclude that 135 special interrogatories could have in any way been “warranted” because of the “complexity or the quantity of the existing and potential issues” in most of my cases, let me dispel you of this notion. We weren’t litigating over the patent to an iPhone component, or the copyright to Coming To America. These were typically cases about whether the design of a product hurt someone. While it’s true the issues were more complicated than “What was the color of that banana you slipped on?” the universe of relevant, discoverable evidence was not infinite. But I didn’t see it that way.
So I marched ahead with my flurry of interrogatories. Thirty or so days later, I received pages and pages of nonsense. Boilerplate objections, mostly, with the occasional substantive morsel. Few readers will be surprised to learn that I rarely — actually never — unearthed a detail with hundreds of discovery requests that I couldn’t just as easily have learned with thirty-five or fewer interrogatories. With interrogatories, it was not just a question of quantity. I rarely gave any thought back then to timing of interrogatories, particularly contention interrogatories. I did not, for example, consider that asking many of the same questions by interrogatory that I would later ask in deposition was simply creating an opportunity for my opponent to educate his client how to respond when the same questions were later asked on the record. We all know that lawyers, not clients, answer interrogatories.
I have since become a bigger fan of depositions over contention interrogatories as a substantive discovery tool, in which case asking the same question twice, in two different formats, is just a waste of time of paper. That’s not to say I didn’t also occasionally overdo it with depositions. After all, I reasoned, why dispatch an investigator to interview a peripheral witness to see if she had anything important to say, when I could spend thousands of my client’s dollars and inconvenience everyone by putting them under oath and creating a record?
Who gains and who loses with my old “shotgun” approach? The only winner in this style of discovery could be the lawyers, since discovery is second only to trial preparation as the most expensive aspect of any case. Clients don’t gain, since they’re presumably financing the fact-finding exercise. Already clogged courts grow even more burdened with time-consuming discovery disputes. Ultimately, even lawyers will lose in the long run, as clients ultimately migrate to lawyers and firms that make efficiency a priority.
Practicalities aside, however, I want to suggest there is a larger reason to temper the urge to litigate with a flamethrower, leaving the ground scorched, the parties depleted and parched. It is this. Back when my father and I were toiling away with viewfinders and light meters, he wasn’t so much worried about the quantity of film I would burn (though that was not completely inconsequential). Rather, his goal was to shape me into a better photographer. One who acts more like a serious artist, who plans and composes, who takes care. This translates easily to our profession. As litigators practicing our craft, we should remember that we aren’t paid handsomely to generate make-work. There is always a goal to discovery. We are trying to unearth evidence that is not only admissible, but also useful. In this instance, less can yield the same or more — and better.
Most employers understand, at least implicitly, that California law requires employees to be reimbursed for necessary expenditures or losses incurred in the course of doing their job. The California Court of Appeal recently clarified that this rule applies when employees are required to use their own cell phone or personal data device, even if a third party pays the bill or the call/data plan provides for bulk or unlimited minutes or data usage.
In Cochran v. Schwan’s Home Service, a number of employees sought to bring a class action against Schwan’s because they were not reimbursed for work-related use of their personal cell phones. In determining whether a class action was appropriate, the trial Court assumed that where employees did not purchase separate cell phone plans for work use, or where a family member or some third party paid the phone/data usage bill, the employee had no expenditure and therefore incurred no loss.
On August 12, 2014, the California Court of Appeal issued an opinion in the Cochran case, holding that this assumption was wrong. Specifically, the Court said that reimbursement is required, even where the phone/data bill is for unlimited use or paid by another. “Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee.”
What Should California Employers Do?
The Cochran Court provided guidance on how employers can comply with their reimbursement obligation for work-required cell phone/data device use. It said, “[T]o be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill.”
We recommend employers establish a clear policy, evenly applied to all employees, about work-related cell phone and/or data device use and reimbursement. This policy should be easy to understand and apply, and included in the employer’s up-to-date employee handbook. While you’re at it, this isn’t a bad time to review existing reimbursement policies for all work-related expenditures. If a major correction is required, we encourage employers to involve a skilled employment attorney to develop a strategy to shape and communicate the change in ways that will not invite claims or lawsuits based on past policies or conduct. On that topic, I know a guy . . .
Transparency in the practice of law was not included in my law school curriculum. Was it in yours?
In fact, it wasn’t until I launched a solo practice, 20 years in, that I began to appreciate, as I never did as an associate or Biglaw partner, the value clients place on transparency. No longer representing large, well-heeled or well-insured companies, in which my contact sits in his air-conditioned cubicle at the Home Office in Indiana or wherever, comfortably removed from the collateral damage and financial pain of a lawsuit, these days I deal daily with local mom-and-pop employers for whom the costs of litigation alone could spell financial ruin. These clients not only desire transparency — they feed on it.
What do I mean by transparency? Since I’ve already alluded to litigation costs, let’s start there. My clients from the days of yore nearly always demanded extensive and detailed budgets, often keyed either to the American Bar Association Uniform Task-Based Management System Litigation Code or something more proprietary. These days, my clients — small manufacturers, restaurants, retail and property management concerns — are typically unaware it’s even appropriate to ask for a budget.
Well, it is. And they should.
My argument here is not purely altruistic. If anything was hammered into my head during my two-decade apprenticeship for solo law practice, it was this: I’ve got to get paid! Businesses unfamiliar with the messy business of litigation, who aren’t burning off insurance, are invariably in for a rude awakening when they receive their first bill. If small business owners get heartburn when they receive their lawyer’s bill for negotiating a lease (they do), the bodily response to a litigator’s bill can be more like a heart attack.
This is not to suggest we haven’t legitimately earned our fees, or even that the business owner begrudges paying us — the topic for a different discussion. Rather, it may be they just can’t, and neither of us knew that until he opened my bill.
Sometimes the problem is definitional. Each of us has our own idea of what “expensive” means. Take, for example, an out-of-state deposition. When I tell a client, “we could do that, but it’s likely to be ‘expensive,’” I could be thinking, but leaving unsaid, that $8,000 means “expensive” (my last out-of-state deposition, to Nome, Alaska — literally!). Having no frame of reference for the cost of a lawyer traveling to Alaska and taking an important deposition, my client might be thinking a third or half of this amount is still really “expensive.” When he opens my bill, it’s time to call 911. Fire up the hearse!
Speaking from my own experience, I find my biggest reluctance in being transparent about the anticipated costs of doing something beforehand (it’s all too transparent on the invoice afterwards), results from a fear that the client won’t agree to something I think is necessary. This fear is legitimate. I want to win and some steps are necessary to win (like a deposition in Nome, where the plaintiff lives).
On the other hand, unless I’m prepared to do the work pro bono for my client’s estate (remember it was my invoice that killed him), I’m simply deceiving myself. If anything, the solution to this dilemma is greater, not less, transparency. By this I mean spelling out in writing the recommended action, the reasonably anticipated cost, and the expected consequences if the action is not undertaken. If the client can’t or won’t pay for it, that’s a discussion to have before my plane touches down in Nome.
Strategy is another area where clients appreciate transparency. Hearken again back to my days representing Fortune 500 companies. While my client may have been emotionally removed from the pain and cost of the lawsuit, he or she was usually intellectually involved in the development of our strategy. Detailed reports, including both a discussion of the strategy and the likelihood of success, were de rigueur.
My small business clients are all over the map on the topic of strategy. Some demand to know every detail and want to collaborate, while others just want to sit in the back seat, blissfully unaware whether what I’m doing — and what they’re paying dearly for — is reasonably calculated to actually work. I understand this thinking, and it actually makes my job easier, but I don’t generally countenance it. Why? Because the only surprise worse for my client than opening that bill for the Nome deposition is learning, as we file into the courthouse for closing arguments, that our case isn’t so good.
As I see it, three main reasons prevent us from being completely transparent with our clients on our strategy and chances of success. First, some clients would just prefer to keep their heads in the sand. As I’ve said, this tendency must be resisted. Second, we don’t feel comfortable trying to explain legal strategy to nonlawyers. Every lawyer has experienced this discomfort in his or her career; some experience it daily. Trial lawyers need to get over it, though. If we can’t confront the difficulties of explaining how we intend to apply the law to the evidence to a business owner, how can we reasonably expect to succeed in teaching these principles to jurors, who are only vaguely interested and often less sophisticated, when it comes time for closing argument? The third reason why we shy away from being transparent with clients about strategy is that we haven’t developed a strategy yet. Let me gently suggest that this could be a problem.
I want to suggest that transparency is not a lofty, or overly ambitious goal. It is as important for lawyers as it is for clients. Not only does transparency reduce the frequency of unpaid legal bills, it instills confidence. Long-term clients generally prefer to play the role of partner, rather than purely customer, and transparency fosters feelings of inclusion in the decision process. Finally, for those of us looking for another way to stand out among our peers, appreciating how our clients appreciate transparency is an excellent opportunity.
[This article originally appeared in the Los Angeles Daily Journal]
As we greet Summer, employers may be tempted to offer internship programs to provide students and others valuable real-world experience in their industry. An internship can be a terrific opportunity for both the intern and the employer. However, unless the intern is paid and treated exactly like other employees, in compliance with wage-hour laws, for-profit employers may be violating the law and risking a costly claim or lawsuit.
The U.S. Department of Labor (DOL) has provided the following six-part test for-profit employers should use in evaluating whether they can offer an unpaid internship program without violating wage-hour laws:
1. The internship, even though it includes actual operation of the facilities of the employer, is similar to training that would be given in an educational environment.
2. The internship experience is for the benefit of the intern.
3. The intern does not displace regular employees, but works under close supervision of existing staff.
4. The employer derives no immediate advantage from the activities of the intern, and on occasion, its operations may actually be impeded.
5. The intern is not necessarily entitled to a job at the conclusion of the internship.
6. The employer and the intern both understand that the intern is not entitled to wages for time spent in the internship.
The DOL has said that, if all six factors are met, then an employment relationship does not exist under the Fair Labor Standards Act (FLSA).
What About Nonprofits?
The DOL has said that this six-part test for unpaid interns applies to for-profit employers, and that the FLSA recognizes an “exception” for “individuals who volunteer their time, freely and without anticipation of compensation for religious, charitable, civic, or humanitarian purposes to non-profit organizations.” This is consistent with California Labor Code Section 1720.4.
However, nonprofit organizations using interns or trainees, should avoid paying the individual a stipend, unless it is sufficient to meet the otherwise applicable minimum wage requirements. While it may be appropriate to reimburse interns or trainees for certain out-of-pocket expenses, a stipend below the minimum wage suggests the intern or trainee is actually an underpaid employee, and can expose the organization to wage-hour liability.
Both for-profit and nonprofit organizations that otherwise legally use unpaid interns should still take steps to reduce their exposure in the event an intern suffers an on-the-job injury. It is wise to review the organization’s workers’ compensation insurance policy to ensure the organization is covered in the event of an accident or injury.
Employers planning to use unpaid interns or trainees are wise to consult with a knowledgeable employment law attorney.