November 2011 Archives

The Letter of the Law: November 2011

IN THIS ISSUE:

CONSTRUCTION: Contractor Not Liable for Independent Contractor's Safety Failures

COMMUNITY: Kring & Chung Hosts Rising Athlete in Annual Triathlon

BUSINESS: "Red Flags" For Business Owners

EMPLOYMENT: Discriminating Against... the Unemployed?

Contractor Not Liable for Independent Contractor's Safety Failures

By: Brendan J. Coughlin

Early November 2005, at San Francisco International Airport, mechanic Anthony Verdun pulled his injured arm from the moving parts of a baggage conveyor belt. The conveyor had no shields or cover, in alleged violation of Cal-OSHA regulations. Verdun was required to be in a tight, cramped space with little light to perform an inspection on the conveyor while it was in operation.

US Airways hired Verdun's employer, Lloyd W. Aubry Co., to maintain and repair the conveyor. US Airways claimed that it did not direct the work done on the baggage conveyor.

Verdun and SeaBright Insurance Company, his worker's compensation insurer, sued US Airways for his injuries and benefits paid. US Airways' motion for summary adjudication was granted, with the trial court finding that, because Verdun worked for an independent contractor, he could not sue the airline. The Court of Appeal reversed, stating that the safety violations alleged created a non-delegable duty of care on US Airways to provide a safe work environment that could not be passed on to Lloyd W. Aubry Co.

In SeaBright v. US Airways, Inc., (2011) 52 Cal.4th 590, the California Supreme Court reversed the Court of Appeal. This new case affirms the line of cases in California holding that injured employees of independent contractors cannot sue those who contract with their employers. SeaBright expands this rule to include even those instances when the injury is caused by a failure to comply with workplace safety requirements.

Essentially, the Court stated that tort law duties owed under Cal-OSHA regulations to employees of an independent contractor are delegable when the duties arise from the contract with the independent contractor. The Court reasoned that the cost of worker's compensation coverage is incorporated into the contract price negotiated by the responsible employer.

As with any case involving independent contractors, a threshold question is the degree of control over the independent contractor and its employees. In this case, US Airways exerted little influence over how Lloyd W. Aubry Co. and its employees operated the baggage conveyor. Cases of this type are extremely fact-sensitive. The existence of a reasonable dispute as to who controls the employees would have rendered summary adjudication inappropriate.

The attorneys at Kring & Chung understand the important elements of independent contractor issues, and can knowledgeably assist with effective contract formation and safety regulation compliance. We are available to answer your questions.

Kring & Chung Hosts Rising Athlete in Annual Triathlon

Congratulations to Madison Himler who placed first in her age category in the Kring & Chung Newport Beach Triathlon on Sunday, October 23, 2011. Kring & Chung proudly sponsored Madison in the race. Equally, if not more impressive, Madison, who is just 13 years old, had the fastest swim time for any female in the race. Madison also swam without a wetsuit, which is a disadvantage for the swimmer. Quite an accomplishment for a thirteen year old!

Madison was recently named the "Junior Lifeguard of the Year" for the internationally acclaimed Huntington Beach Junior Lifeguards. Madison is currently an honors student at Pioneer Middle School. Congratulations Madison for all that you have accomplished. We are very proud of you! We look forward to following your continuing development as an athlete and student. Madison has some big goals, including competing in the Kona Ironman, attending Stanford University and competing in the 2016 Olympic Games. We look forward to sponsoring you next year in the 2012 Kring & Chung Newport Beach Triathlon.

"Red Flags" For Business Owners

By: Laura C. Hess

Here are some common problems that our clients who are business owners come to see us about:

1. One of your customers represents most of your sales. For this reason, you let it run up a large account receivable, whereas otherwise you would have cut it off long ago. However, you are starting to worry now as to whether this customer is ever going to pay you.

2. One of your salespersons recently quit to take a job elsewhere. Since then, your customers are telling you that this salesperson is calling them and trying to get them to move their business over to his new company.

3. An employee came into your office in tears because of the way her supervisor is treating her. She is complaining to her co-workers and starting to use legal catch phrases, like "hostile work environment."

4. You want to fire an employee. However, right before you were going to fire him, you received a doctor's note saying that the employee will be out on stress leave for the next two weeks.

5. Your distributor called you and said that they are getting a lot of customers complaining about and returning your products. The distributor demands that you determine what is causing the problem and implement better quality control. It is going to stop all sales of your products in the meantime.

6. One of your customers is complaining because it sent you a purchase order a long time ago, but due to circumstances beyond your control, you have not been able to fill the order yet. The customer is getting angrier by the day and says that, if it cannot get the product immediately, it cannot fill its obligations to its own customers and it will lose business.

7. You hired a vendor to do a job for you. You have paid it a lot of money so far. However, the project has not been completed yet, and there is no end in sight. Every day that the project drags on is causing more harm to your business.

8. You learned that there is a potential problem with one of your products that, if it happens, could cause the product to fail, or even hurt someone. You do not know yet how likely it is that this failure will happen or how much product is affected. You are wondering whether you may have to do a product recall, but you do not know whether you are required to do so, or how to go about doing it.

9. You want to fire an employee. His job performance is poor. However, he has a medical condition, and you are worried he will sue you if you let him go.

10. You classified someone who works for you as an independent contractor. Now you are not sure if this person really qualifies as an independent contractor, or whether he should be a W-2 employee. If you make this change, you are worried that this will make this person realize that you had misclassified him before, and invite a lawsuit.

These are all "red flag" situations where you should speak to a lawyer right away. We have experience consulting our clients in these matters and can point you in the right direction.

Discriminating Against ... the Unemployed?

By: Laura C. Hess

Congress is currently considering enacting President Obama's American Jobs Act. A portion of this Act would make it illegal for employers to discriminate against unemployed job applicants.

The Act would make it unlawful for an employer to take into consideration the fact of the applicant's unemployed status, or refuse to hire someone because he or she is unemployed.

The Act further would make it illegal for an employer to publish a job advertisement stating that an applicant will not be considered or hired for a position if he or she is currently unemployed.

However, the Act would not preclude an employer from inquiring about or considering the applicant's employment history, or asking about the reasons why the applicant is unemployed, in order to assess his or her ability to perform a job.

If an employer is found liable for violation the Act, an aggrieved Plaintiff can recover liquidated damages of up to $1,000 for each day of the violation, plus reasonable attorney's fees and costs.

Jill L. Barr Joins Kring & Chung's Sacramento Office

Jill L. Barr joined Kring & Chung as a partner in 2011 to manage the Family Law Department in the firm's Sacramento office.

Barr is a Certified Family Law Specialist, Board of Legal Specialization, State Bar of California and has practiced family law for 25 years. Barr handles all types of family law matters, including marital and domestic partnership dissolution, property division, child custody, support matters and modification or post-judgment proceedings. Barr is trained as a Collaborative Attorney and is also on the Special Master panel for the Sacramento County Superior Court.

Evan D. Schwab Joins Kring & Chung's Las Vegas Office

Evan D. Schwab joins Kring & Chung as an associate in Las Vegas.

Schwab received his undergraduate degree from the University of Wisconsin-Madison in 2004 and graduated with honors from Drake University Law School in 2008 with a certificate in Litigation and Alternative Dispute Resolution. While attending Drake, Schwab has worked as a student attorney and worked for law firms focusing on both civil and criminal law. Prior to joining Kring & Chung, Schwab worked at a Las Vegas general practice law firm.

Schwab's practice focuses primarily on family law and business law. Schwab assists parties in reaching the best outcome for them and their families, be it by agreements reached or through aggressive representation before the Court. Schwab is equally focused on making sure his clients are in a position to understand that agreements reached and decisions made by the family court have an impact in other areas of the client's life as well. Schwab focuses on helping family law and business clients take measures to put themselves in the best position for the future.

Attorneys in the Spotlight

Kyle D. Kring and Allyson K. Thompson recently spoke to school administrators and human resource professionals from across the country at the 73rd Annual American Association of School Personnel Administrators Annual Conference in Reno, NV. Allyson addressed "Avoiding Employment Litigation" and Kyle spoke about "Legal Issues Presented by Technology and Social Media in Schools.

Shane Singh, a partner in Kring & Chung's Sacramento office, was recently featured in an in-depth article published in Comstock's Magazine regarding businesses, litigation, and ADA compliance. Comstock's Magazine is a premier monthly business publication for California's capital region, serving Sacramento and the nine surrounding counties. Singh's litigation experience in the representation of businesses in 600 to 700 cases involving disability access code compliance made him uniquely qualified to add his insights into these issues.

Attorney Advertising. This client newsletter is a periodical publication of Kring & Chung, LLP and should not be construed as legal advice or a legal opinion on any specific facts or circumstances. The contents are intended for general information purposes only, and you are urged to consult a lawyer concerning your own situation and any specific legal questions you may have. Any tax information or written tax advice contained herein (including any attachments) is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer.

3 Easy Steps to Manage the Risk of Products Liability

Every manufacturer must plan for a product liability lawsuit. A product liability case can result in tangible losses, such as lost sales, lost market share, and legal costs; and intangible losses, such as lost reputation, and lost productivity from employees dealing with the lawsuit rather than daily operations.

I'll Bet You Didn't Know - Unemployment Insurance Fund Borrows from Federal Government to Make Payments

The California Unemployment Insurance Program provides workers, who lose their jobs through no fault of their own, with weekly unemployment insurance payments. The Unemployment Insurance program is 100% funded by employers who pay State taxes on wages paid to employees.

How Long of a Medical Leave of Absence Must You Give an Employee?

California's Family Rights Act (CFRA) and the Family Medical Leave Act (FMLA) provides certain employees with up to 12 weeks of unpaid, protected medical leave per year. The employee must be reinstated and cannot lose his or her job for taking this protected leave. Employers sometimes question whether they must hold the employee's job open if the employee takes more than 12 weeks of leave. The answer is that, even though the CFRA/FMLA allow up to 12 weeks of medical leave, the Fair Employment and Housing Act (FEHA) and the Americans with Disabilities Act (ADA) may provide protection for employees to take an extended leave as a reasonable accommodation for a qualified disability, even beyond the 12-week CFRA/FMLA leave.

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