The Letter of the Law: September 2014

IN THIS ISSUE:

EMPLOYMENT LAW: California's Historic Adoption of Paid Sick Leave - AB 1522

EMPLOYMENT LAW: The California Supreme Court Adds Another Hurdle For Employees Seeking Class Certification

NEVADA LAW: Admissibility of Expert Testimony in Nevada

California's Historic Adoption of Paid Sick Leave - AB 1522

By: Allyson K. Thompson

On September 10, 2014, Governor Brown signed AB 1522 otherwise known as the Healthy Workplaces, Healthy Families Act of 2014.

Specifically, the Act amends Labor Code § 2810.5 to provide that an employee who, on or after July 1, 2015, works in California for 30-days or more within a year from the commencement of employment is entitled to paid sick days to be accrued at a rate of no less than one hour for every 30 hours worked. The employee is entitled to use accrued sick days after the 91st day of employment, typically the end of the Introductory Period. The Act authorizes an employer to limit an employee's use of paid sick days to 24 hours or 3 days in each year of employment. Failure to comply with the new law subjects an employer to administrative fines imposed by the Labor Commissioner and authorizes the Labor Commissioner or the Attorney General to recover civil penalties, which includes attorneys' fees and costs.

There are some limits on accrual. An employer will be allowed to cap total accrual at 48 hours or six days. Employers that already provide for paid sick leave per their Company policy that covers the new three paid sick days per year, will not have to provide an additional three days. Employers will be required to provide written notice to its employees of this new law.

Some employers are specifically excluded from this law, including in home supportive services, such as home health care givers. Also excluded are individuals employed by an air carrier as flight deck or cabin crew member, whom are covered under federal labor laws.

Governor Brown proclaimed in a written statement, "make no mistake, California is putting its workers first." California is one of only two states (Connecticut) that has adopted a paid sick leave law.

On the road to the Governor's desk, this bill's passage through the Assembly and Senate was not without its share of drama. According to the Bill Analysis, opponents to the bill argued while many employers voluntarily offer sick leave for full-time employees, expanding this mandate on all employer will create a huge fiscal burden on employers. "For example, many employers currently offer paid sick leave which accrues on a per month or per pay period basis. However, this bill requires them to completely change their existing policies in order to mirror the accrual rate proposed under this Bill." Opponents also argue that this creates new exposure for employers who do not comply, opening up the risk for litigation.

Supporters of the Bill include most unions and employee based associations. The author and proponents of the Bill pointed to studies which have found that providing sick days to workers saves money for businesses by reducing turnover, reducing the spread of illness in the workplace, and improving workers' morale and productivity.

Employers will need to anticipate the change which goes into effect on July 1, 2015 and plan accordingly. Planning should include being prepared to provide written notice to all employees. For those employers not already providing paid sick leave of at least three days a year should ensure that the Sick Leave policy in the Employee Handbook or Manual is revised.

The California Supreme Court Adds Another Hurdle for Employees Seeking Class Certification

By: Alis M. Moon

On May 29, 2014, the California Supreme Court issued its highly anticipated decision in Duran v. U.S. Bank Nat'l Assoc., (2014) 59 Cal.4th 1, making clear that before a court can certify a class action, it should require the plaintiff to have a trial plan addressing manageability of the class claims.

The class in Duran was a group of business banking officers that alleged that they were misclassified as exempt from overtime. According to the class of employees, they did not fall within the "outside sales" exemption, which requires that the employee spend more than half of his or her time on sales activities outside the office.

The trial court indicated that any manageability concerns could be alleviated by using a representative sample of testimony from 20 of the 260 class members along with the two named plaintiffs. U.S. Bank was not permitted to introduce evidence regarding the work habits of any other class member outside of this sample. As a result, based upon the representative testimony heard during trial, the trial court found that the entire class of business banking officers were misclassified as exempt.

On appeal, the Court of Appeal reversed the trial court's decision. Thereafter, the California Supreme Court unanimously affirmed the decision of the Court of Appeal, making it unequivocally clear that "in wage and hour cases where a party seeks class certification based on allegations that the employer consistently imposed a uniform policy or a de facto practice on class members, the party must still demonstrate that the illegal effects of this conduct can be proven efficiently and manageably within a class setting." Duran, at 29. The Court went on to state that "trial courts must pay careful attention to manageability when deciding whether to certify a class action."

In its decision, the California Supreme Court heavily criticized the trial court's "seriously flawed" trial plan, stating that the court must preserve a defendant's due process rights by allowing them to have the opportunity to present their affirmative defenses, even if it these defenses hinge upon individualized issues. Further, the Court recognized that although it is not feasible to introduce testimony as to every class member, if individual issues do prove to be unmanageable, the class should not be certified.

What does this mean for employers?

The decision makes it more difficult for employees seeking class certification and prevents trial courts from simply rubber stamping class certification motions. Now, not only must the plaintiff show that common issues predominate, but they must also consider issues related to manageability. If individualized issues predominate, making the case unmanageable, it should not be certified.

Although the Court called this case an "exceedingly rare beast," it certainty brings the issue of manageability into the discussion of class certification, adding one more hurdle for plaintiffs. Nevertheless, Duran provides a clear standard for trial courts to following when deciding whether class certification should be granted.

This decision is certainly good news for employers, and is contrary to a recent trend of decisions in favor of plaintiffs seeking class certification.

If you have any questions concerning these developments, please do not hesitate to contact us.

Admissibility of Expert Testimony in Nevada

By: Justin R. Taruc

Nevada's rule on the admissibility of expert witness testimony is codified in Nevada Revised Statute 50.275, which states that a qualified expert witness may testify as to matters within that expert's scope of knowledge, so long as such testimony will assist the trier of fact to understand the evidence or determine a fact in issue. While the Nevada Legislature laid the foundation to allow expert testimony to be presented and granted judges the discretion as to whether to allow such testimony, it was not until Hallmark v. Eldridge (2008) 124 Nev. 492, that the Nevada Supreme Court gave further clarification on the factors judges were to consider when admitting expert testimony evidence.

In Hallmark, the Nevada Supreme Court clarified the three requirements that must be satisfied before an expert witness is able to testify pursuant to NRS 50.275. First, the witness must be qualified in an area of scientific, technical, or other specialized knowledge (known as the "qualification requirement"). Second, the witness's specialized knowledge must assist the trier of fact to understand the evidence or to determine a fact in issue (known as the "assistance requirement"). Finally, the witness's testimony must be limited to the matters within the scope of the witness's knowledge (known as the "limited scope requirement").

In order to meet the qualification requirement, courts are advised to consider the witness's formal schooling and academic degrees, as well as licensure, employment experience, practical experience, and specialized training. Notably, the Court warned that the enumerated factors were not an exhaustive list, and other factors may be considered. What these factors all have in common is their underlying attempt to show that the witness is competent to provide testimony in a specialized field. Where the witness is not qualified, the witness should not be able to testify.

Likewise, in order to meet the assistance requirement, the Court determined that an expert's testimony will assist the trier of fact only when it is relevant and the product of reliable methodology, considering factors including whether the opinion is within a recognized field of expertise, is testable and has been tested, published and subject to peer review, generally accepted in the scientific community, and based more on particularized facts rather than assumption, conjecture, or generalization. Lastly, to meet the requisite limited scope requirement, the witness must only testify as to matters which are within the scope of his specialized knowledge.

While NRS 50.275 tracks the Federal Rule of Evidence ("FRE") regarding admissibility of expert testimony, namely FRE Rule 702, Hallmark and its progeny markedly differ from those holdings handed down in federal court regarding the rigid application of the factors to be considered when determining whether a witness is to be qualified as an expert. Particularly, while the federal court rulings have focused on a stricter application of the factors as enumerated in Daubert v. Merrell Dow Pharmaceuticals, Inc. (1993) 509 U.S. 579, essentially the Federal Court's equal to Nevada Supreme Court's Hallmark, the Nevada Supreme Court struck down a strict application of the Hallmark factors, and has opted to allow more judicial freedom in determining whether to allow a witness to testify as an expert. Accordingly, there is usually room to argue that Plaintiff's proposed expert witness should not be deemed an expert witness, and Hallmark provides the springboard for such an argument.

NEWS AND EVENTS:

Three Partners Named "2014 Top Attorney" by OC Metro Magazine

Congratulations to Managing Partners, Kyle D. Kring and Kenneth C. Chung, and Partner, Laura C. Hess, on being named "Top Attorneys" in Orange County for 2014. Kring was recognized for his work handling construction matters, while Chung and Hess were recognized for their work handling employment and management matters. OC Metro has partnered with AVVO.com to spotlight the leading attorneys in Orange County. This is the second consecutive year Kring has received this distinction and the third year for Chung and Hess. The full article can be seen in the September 2014 issue of the magazine, or at www.ocmetro.com.

California HR Conference 2014

On August 27, 2014, Kyle Kring and Laura Hess presented So You Received a Sexual Harassment Complaint, What Not to Do, a Trial Lawyer's Perspective to approximately one hundred attendees of the 2014 California HR Conference which took place at the Anaheim Convention Center. "The attendees were savvy human resources professionals looking for more than just the basics on how to conduct sexual harassment investigations," said Laura Hess. "We talked about what the HR staff can do at the investigation level that will really help the lawyers trying the case. Kyle and I have tried many sexual harassment cases, so we shared what juries care about and what they do not." We would like to thank those that attended the informative workshop and look forward to speaking at the conference in the future.

Our employment law group represents employers in all aspects of labor and employment law including advising and counseling to prevent costly litigation.

Andrew Yun Joins Kring & Chung's Irvine, CA Office

Kring & Chung would like to welcome Andrew Yun to the Irvine, CA office. Yun's practice focuses mainly on business and transactional matters. Yun provides an extensive range of services to his business clients including drafting and negotiating nondisclosure agreements, operational agreements, employment and consulting agreements, distributorship and licensing contracts, commercial leases, and all forms of mergers and acquisitions and strategic alliance arrangements. After graduating from Loyola Law School, Yun became well-versed in bankruptcy law while working as an extern and clerk.

Grant Mullen Joins Kring & Chung's Irvine, CA Office

Kring & Chung is pleased to announce that Grant Mullen has joined its Irvine, CA office. Mullen's practice areas include business litigation, business transactions, construction, employment law, insurance, personal injury, products liability, real estate and trucking, crane & rigging. Mullen is a member of American Board of Trial Advocates (ABOTA), a national association of experienced trial attorneys and judges that requires members to be responsible for elevating the standards of integrity, honor, ethics, civility and courtesy in the legal profession.

SCORE Workshop - Avoiding Employment Related Litigation

Allyson Thompson of our Irvine, CA office will be presenting a workshop on how to avoid employment related litigation on October 20, 2014 from 6:00 PM to 9:00 PM. This workshop covers the potential pitfalls of employment issues and how these mistakes can lead to costly litigation. Topics include the hiring process and avoiding discrimination; employee handbooks; wage and hour issues; overtime and meal/rest breaks; handling internal complaints; discipline and performance reviews; independent contractor vs. employee; and wrongful termination. A question-and-answer session will follow her presentation. The seminar will take place at Los Alamitos Branch - OC Public Library, 12700 Montecito, Seal Beach, 90740. SCORE is a nonprofit organization dedicated to helping small businesses grow and achieve their goals through education and mentoring.

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