The Court held this plan, as drafted, was not an illegal forfeiture.
The Court also noted even if the options were granted directly, the forfeiture would be valid because it was express and clear.
Of significance to wage and hour wonks, like me, the court also addressed whether payment in stock options was a violation of the Labor Code's requirement of the form of payment. I once posited that issue to a DLSE official and received a chilling answer. But no. The court said Section 212 does not apply when payment is made in stock options. That should give everyone a sigh of relief. ::Sigh::: The case is Schachter v. Citigroup and the opinion is here.
I admit this is an especially nice post to write, considering I principally authored the employer's briefs at the Court of Appeal and in the Supreme Court. Shameless plug, I know, but this has been a long time coming! And a thank you to my former colleagues Marlena (Ct.App.) and Tim (S.Ct.) for their hard work on the briefs, and to my former partner, Rob, for arguing at the Supreme Court.
Here is the gist of it:
The Workers’ Compensation Appeals Board (the WCAB) concluded that Rosemary
Verga was not entitled to compensation for psychiatric injury while employed by United Airlines. According to Verga, her psychiatric injury was the result of harassment and persecution by her supervisor and co-workers. However, the WCAB found “the true fact remains that [Verga] was not actually subject to harassment or persecution, she instead brought upon herself the disdain of her co-workers” because Verga was “a difficult person to get along with”; she was impolite, unpleasant, and co-workers “never knew when [she] might get upset.” The WCAB held: “That disdain is not an actual event of employment” within the meaning of the statute. [par.] We issued a writ of review and shall now affirm the WCAB order.
The case is Verga v. WCAB and the opinion is here.
Have a nice weekend.
As the court pointed out, whether the directors count as "employees"
is governed by the United States Supreme Court’s analysis in Clackamas
Gastroenterology Associates, P.C. v. Wells, 538 U.S. 440 (2003). In Clackamas, the Court addressed whether physicians that were also directors and shareholders of a clinic were employees for purposes of the ADA. The Court noted that Congress had intended the word “employee” to describe “the conventional master-servant relationship as understood by common-law agency doctrine.” Id. at 445 (internal quotation marks and citation omitted). The Court then described six factors relevant to determining whether a director is an employee:
• Whether the organization can hire or fire the individual or set the rules and regulations of the individual’s work
• Whether and, if so, to what extent the organization supervises the individual’s work
• Whether the individual reports to someone higher in the organization
• Whether and, if so, to what extent the individual is able to influence the rganization
• Whether the parties intended that the individual be an employee, as expressed in written agreements or contracts
• Whether the individual shares in the profits, losses, and liabilities of the organization.
Applying this test, the Court held directors are not "employees." The case is Fichman v. Media Center and the opinion is here.
In late-December, the U.S. District Court enjoined San Francisco's Health Care Security Ordinance. That meant that it could not go into effect. Here is our post on the injunction.
The City appealed. Typically, the injunction remains in effect until the appeal is over.
But the City decided to ask the 9th Circuit Court of Appeals to stay the injunction pending resolution of the appeal. That is, the City wants to implement its law that the district court says is illegal.
No way, right? I mean if the stay issues, then the law goes into effect. That's not fair. If the law is later found preempted by the court of appeals, who is going to pay back all those employers who were subjected to an illegal law? (No one.) So, of course, the Ninth Circuit would not engage in an exercise of raw power and basically pre-decide an appeal to facilitate San Francisco's universal health care law, right?
Wrong. The Ninth Circuit just granted the stay based on an expedited motion and an argument on January 3. In granting the stay, the Court basically decided that the city is going to win on appeal. The panel could not have been much stronger in its language. Here is the opinion.
Here's a question the court did not tackle: What's the point of having an full appeal procedure when the court is willing to say, based on an appeal that took less than a week to file, argue, and decide, that there is a "strong likelihood" of reversal? Not much. So, if you ever want to see how well your appeal is going to fare before the Ninth Circuit, apply for a stay!
It seems that if the Golden Gate Restaurant Association intends on winning, it will have to convince the en banc court to decide this case, or the U.S. Supreme Court. In the meantime, the SF Health Care Security Ordinance is going to go into effect. That means we have to read and digest what it requires... which I will do in the future.