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Archive for September 12, 2014

New Legislation Sure to Sicken California Employers

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Supporters are calling it “historic” and a shot in the arm to working class Americans. Critics contend it’s a job killer. Me? Just one more thing I can blog about.

On September 10, 2014, Governor Jerry Brown signed the Healthy Workplaces, Healthy Families Act of 2014 (Assembly Bill 1522), making California the second state in our great union (damn you, Connecticut!) to provide paid sick leave to employees. Under the legislation, which will take effect on July 1, 2015, employees will earn a minimum of one hour of paid sick leave for every 30 hours of work.

Before all you California employers start making plans to relocate to Mexico, the law is not as economically crushing as it appears. The HWHFA (seriously, no one could think of an act name with a better acronym?) authorizes employers to limit an employee’s use of paid sick days to 24 hours or 3 days in each year of employment. And the employee’s right to use accrued sick days does not begin until the 90th day of employment. See? Not so bad, right? You can live with that. Just be sure to satisfy the posting, notice and recordkeeping requirements. And make sure not to retaliate against any employee who requests paid sick days—that’ll get you into trouble.

 

CA Supreme Court Delivers Victory for Franchisors in Patterson v. Domino’s

In a long-awaited decision that came down last Thursday, the Supreme Court of California in Patterson v. Domino’s ruled that a franchisor is not the agent or employer of a franchisee’s employees for purposes of holding it vicariously liable for the workplace conduct of those employees if it did not control the employment policies of the franchisee.

The facts are as follows: In September of 2008, Sui Juris, LLC (“Sui Juris”) acquired a Domino’s Pizza (“Domino’s”) franchise in Southern California, employing Renee Miranda (“Miranda”) as assistant manager and Taylor Patterson (“Patterson”) as a server. Long story short, Miranda sexually harassed Patterson (allegedly), and Patterson sued both Sui Juris and Domino’s, claiming Domino’s was their employer and a joint venturer of Sui Juris.

Domino’s moved for summary judgment on the employer/joint venturer issue. The trial court granted Domino’s motion on all counts, determining the franchisor did not control the day-to-day operations or employment practices necessary to find that Sui Juris was its agent or Miranda its employee. The Court of Appeal reversed, finding that reasonable inferences could be drawn that Sui Juris lacked managerial independence based on the standards and procedures imposed by Domino’s.

The Supreme Court granted Domino’s petition for review. At the outset, the Court rejected Patterson’s argument that “the degree of control exercised by franchisors like Domino’s makes each franchisee the agent of the franchisor for all business purposes, and renders each employee of the franchisee an employee of the franchisor in vicarious liability terms.” Such a rule would, in the Court’s view, “turn business format franchising ‘on its head.’”

While ruling in Domino’s favor, the Court tempered the victory for franchisors by noting that a franchisor could, and would, face potential liability if it retained or assumed a general right of control over factors like hiring, direction, supervision, discipline, or discharge.