Letter of the Law: July 2011


EMPLOYMENT LAW: U.S. Supreme Court Shields Wal-Mart From Gender-Bias Class Action Lawsuit

FAMILY LAW: Overview of the Divorce Process

EMPLOYMENT LAW: U.S. Department of Labor’s Latest App: Sue With Your Smartphone

EMPLOYMENT LAW: Two Premium Payments Allowed for Each Meal and Rest Break Missed Per Day

U.S. Supreme Court Shields Wal-Mart From Gender-Bias Class Action Lawsuit

By: Kyle D. Kring

In the most important job-bias case in a decade, Wal-Mart Stores Inc. v. Dukes, the U.S. Supreme Court has dismissed a class action lawsuit of 1.5 million female employees suing Wal-Mart Stores Inc. for gender-based employment discrimination. The lawsuit was first filed in 2001 and aimed to cover every woman who worked at any of the 3,400 Wal-Mart and Sam’s Club stores nationwide since 1998. While this historic ruling does not absolve Wal-Mart of its sex-discrimination allegations, it has clearly made class-action discrimination claims much harder to pursue and has altered the power balance between employers and employees. Had the case proceeded and the workers won, Wal-Mart could have faced billions of dollars in back pay and punitive damages as the world’s largest employer. However, the Court’s ruling has largely eliminated the monetary threat facing big employers and is likely to significantly impact other gender class-action suits, such as the pending case against Costco Wholesale Corp. The decision is the latest in a series of corporate-friendly Supreme Court rulings under Chief Justice John G. Roberts, Jr. The conservative high court majority has been continuously guarding businesses from class actions, including in AT& T Mobility v. Concepcion, an April case regarding a California class action suit against AT&T Inc.

Although all justices agreed that the employees did not have the right to group damages, there was ultimately a 5-4 split based on whether the case should be allowed to continue as a class action. The conservative majority led by Justice Antonin Scalia claimed that the lawsuit brought by the diverse group of class members was too large and the claims too varied to be certified under the federal court rule – Rule 23. Justices Roberts, Anthony Kennedy, Clarence Thomas, and Samuel Alito joined Scalia in holding that a party who wants to certify a class must show that there are common questions of law or fact capable of class-wide resolution. Scalia wrote that the workers provided “no convincing proof of a companywide discriminatory pay and promotion policy.” Employees can file a class action lawsuit only if there is “significant proof” of a “specific employment practice” that unlawfully discriminates.

Meanwhile, the dissenting justices-Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan-stressed that there was substantial evidence of discrimination for the case to go to trial. Leading the dissent opinion, Ginsburg wrote that according to the lower court, promotions at Wal-Mart were made by a “tap on the shoulder” process, with vacancies not regularly posted and managers choosing whom to promote on the basis of their own subjective impressions. The employees presented statistics showing pay and promotion differences along gender lines at Wal-Mart. For example, while women held about 70% of hourly jobs, only 33% of management jobs were held by women. However, Scalia claimed that there were no facts under which the women of Wal-Mart could have been discriminated against in the first place because Wal-Mart had a written policy banning gender discrimination.

It is believed that the new strategy of the workers’ legal team will be to regroup into smaller, more focused class action lawsuits targeting specific regions or stores, or to proceed with the filing of separate individual lawsuits.

As a result of this case, it may be increasingly difficult for plaintiffs to sue large corporations by way of class action lawsuits for business wide discrimination, where the corporations have written non-discrimination policies, and provide area managers with the exclusive authority to make hiring and compensation decisions.

Overview of the Divorce Process


This article will provide an overview of the divorce process (more properly referred to as “dissolution”). The general process is the same, whether the divorce is amicable (uncontested) or litigated (contested). The contested divorce will generally involve more extensive discovery, court appearances, and usually a trial.

The person (aka party) that initiates a divorce proceeding files a petition with the proper court. This will generally be the court within the state and county within which they have lived for 6 months (state) and 3 months (county). That party will be referred to during the process as the petitioner.

The petition and other necessary documents are then served on the other person. Service of these documents cannot be done by the petitioner. Once service of the petition has been completed, the mandatory six-month waiting period in California begins to run, and the party served now has 30 days (by personal service) within which to file a response. This party will be referred to during the process as the respondent. If the respondent does not file a response within the 30 day period, the respondent could be defaulted. Once the petition has been served on the respondent, the court will have jurisdiction over the parties.

Within 60 days of filing the petition, the petitioner must prepare and serve his/her preliminary disclosures on the respondent. Preliminary disclosures consist of several documents and have the purpose of providing to the other party a full disclosure of all material facts and information pertaining to all assets and debts in existence at that time, whether such assets and/or debts are community or separate property. This is a requirement set forth in the Family Code (sections 2100, et seq.) in order for that party to comply with their fiduciary duties to the other spouse. Within 60 days of filing the response, the respondent must prepare and serve their preliminary disclosures. Both parties are required to comply fully with the disclosure requirements even if they are both aware of all assets and debts in existence. In the event that either party sought in the future to set aside a judgment, the court might require the parties to provide the financial disclosures in order to assess whether there was a failure to disclose or inadequate disclosures.

Some parties may choose to conduct additional discovery, such as serving form interrogatories, demands for production of documents, taking depositions and so forth. Whether these discovery methods are elected depends upon the attorney’s judgment based upon the complexities involved, the adequacy of the disclosures, and whether additional information is needed that is not apparent in the disclosures. In the case of uncontested divorces, the parties may be ready to conduct settlement negotiations after the disclosures have been completed.

Often during the divorce process, the parties may need court orders to resolve issues until the divorce is ready to finalize. These would be referred to as temporary orders because they last until further order of the court or until the entry of the final judgment. The issues usually pertain to child custody and visitation, support, attorney fees allocation, restraining or injunctive orders, and so forth. Some cases may never see the inside of a court room. Other cases may be in court on a regular basis.

There are only two ways to resolve issues in any legal proceeding. Either the parties come to agreements and those agreements are reduced to writing and submitted to the court, or the court makes orders on some or all issues. There are several mechanisms that can be used to help reduce the amount of court appearances, and thereby help reduce to the overall cost of the divorce process on the parties. The parties can discuss matters between themselves; the parties and their attorneys can conduct settlement meetings and/or correspondence; the parties can utilize assistance of mediators, outside professionals such as joint experts, private judges or arbitrators, therapists, etc.

Any issues not resolved by the methods discussed above are resolved by trial. The trial process is instigated by submitting a form to the court that informs the court that a trial is being requested. Upon receiving this form, the court will schedule a trial setting conference. Only the attorneys will attend the trial setting conference. At the trial setting conference, the attorneys will choose dates for the mandatory settlement conference (if requested) and/or the trial date. Sometimes the attorneys or the court will not schedule a trial date until it is determined that the mandatory settlement conference proves unsuccessful.

A family law trial does not involve juries. The judge will make final decisions (rulings) on the issues put before him/her. The trial will usually be the conclusion of the divorce process.

U.S. Department of Labor’s Latest App: Sue With Your Smartphone

The United States Department of Labor recently launched its first smartphone application-one that will arguably lead to more wage and hour lawsuits by employees. Available in English and Spanish, the new timesheet app allows employees to track their work hours, including break time and overtime, and the wages their employers owe them. Users can add comments related to their work hours; view a summary of work hours in a daily, weekly and monthly format; and email the summary of work hours and gross pay as an attachment. In addition, links to the Web pages of the department’s Wage and Hour Division provide easy access to a glossary, contract information, and materials about wage laws.

Although this free app is currently compatible with only the iPhone and iPod Touch, the Labor Department is looking to develop versions for other platforms as well, such as Android and Blackberry. The department will also explore developing other pay features: tips, commissions, bonuses, deduction, holiday pay, pay for weekends, shift differentials, and pay for regular days of rest.

According to Secretary of Labor Hilda L. Solis, “This app will help empower workers to understand and stand up for their rights when employers have denied their hard-earned pay.” The app will presumably make it easier for the Wage and Hour Division to make investigations. Nevertheless, it will be important to not rely on the new wage and hour calculator too much. An employee’s own calculations and assumptions may be accidentally wrong, or even purposely false.

Overall, the launch of the application should remind employers to maintain accurate employment records. It is understandable that employers today have a harder time keeping track of employee work time when the employees work outside the boundaries of a traditional work day and office space. However, an employer can mitigate this difficulty by communicating to their employees that correct time records are desired, and if the employees believe there is any discrepancy in their time records, they should immediately notify the employer.

The app can be downloaded from the Wage and Hour Division’s home Web page at http://www.dol.gov/whd. When necessary, employers should consult legal counsel regarding this application or any other wage and hour concerns.

Meal & Rest Breaks: Two Premium Payments Allowed for Each Meal and Rest Break Missed Per Day

On June 2, 2011, the California Court of Appeal, Second Appellate District held in United Parcel Service, Inc. (“UPS”) v. Allen, 2011 DJDAR 8073 that Labor Code Section 226.7 allows for two premium payments per work day, one for failure to provide a meal break and one for failure to provide a rest break. This is in an important clarifying ruling, because often in wage and hour litigation there is a dispute as to the number of premium payments owed based on the number or type of break periods that the employer failed to provide.

This case is also a reminder to employers that, while we still do not have a ruling in the Brinker matter regarding when meal breaks must be provided, California laws are being interpreted favorably towards the employees when it comes to ensuring that employers comply with the current applicable California laws and Wage Orders in providing meal and rest breaks to its employees.

Labor Code Section 226.7 provides, “(a) No employers shall require an employee to work during any meal or rest period mandated by an applicable order of the Industrial Welfare Commission (“IWC”) . . . (b) If an employer fails to provide an employee a meal or rest period in accordance with an applicable IWC, the employer shall pay the employee on additional hour of pay at the employees regular rate of compensation for each work day that the meal or rest period is not provided.”

In the case at issue, UPS was sued by 32 employees in a coordinated action seeking compensation for UPS’s alleged failure to provide meal and rest breaks. UPS argued that only one premium payment is allowable per work day, regardless of the number or type of breaks periods that were not provided. The employees argued that Labor Code Section 226.7 uses the language “meal or rest period,” which means the employees are entitled to a premium payment for a meal period and another premium payment for a missed rest break. The Court agreed with the plaintiff employees’ interpretation.

Kring & Chung, LLP has considerable experience defending meal and rest break violation cases. We can provide your company with guidance on how to defend against and avoid these kinds of lawsuits by implementing sound employment practices and guidelines.

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