Starbucks CEO Salary Cut: Spot the Issue

I saw a news item in the WSJ about the Starbucks CEO's announcement that he's cutting his own salary from $1.2 million to $10,000 per year. Great PR, right? But, let's play "spot the wage and hour issue."

Unless I'm missing something, and I've been accused of missing many things,* Mr. Schultz transformed himself into a non-exempt CEO of a publicly traded corporation! (Yes, the salary is too low to qualify him as exempt under federal law).

I got a laugh out of this, because I'm an idiot. But wouldn't they vet this issue with their employment lawyers?

This is probably not a big deal, since Mr. Schultz is likely not going to sue his own company to recover the overtime wages he will be due once he fails the exempt test. me.

*If there is some other aspect of his compensation that qualifies him for the salary test that was not reported in the article, please accept my apologies o SBUX legal team.

Lily Ledbetter "Fair Pay" Act

Ledbetter v. Goodyear was one of those Supreme Court decisions that galvanized politicians, activists, etc. and became a proxy for complaints about "conservative" judges. We posted about that case here. We wrote an article about it here.

The opinion simply held that Title VII discrimination claims apply what's called a "statute of limitations." The "statute of limitations" protects employers from old claims. Claims that cannot be defended because records are gone, witnesses are dead or moved away, etc. It also protects defendants when plaintiffs "sit on their rights" and wait too long to prosecute their claims. By the way, Title VII indeed contains a statute of limitations. The dispute was over how it was applied.

Ledbetter had an Area Manager job with Goodyear for almost 20 years. Over a period of 15 years, her pay slipped as compared with other males. She finally sued for sex discrimination in her compensation under Title VII and the Equal Pay Act. The court held that the claims were time barred, because the allegedly discriminatory decisions to set her compensation were made outside the limitations period. But Ledbetter argued that every time she was paid, it was a new discriminatory act. As if the payroll coordinator knew how her wages were set. Anyway, the Court decided that her claims were time barred because none of the discriminatory decisions occurred within the 300 day limitations period that applies.

The decision hardly broke new ground. But it created a political firestorm, maybe because there was a presidential election campaign going on? Nah. But - but - Ms. Ledbetter spoke at one of the national party political conventions this year. Shhh.

Anyway, new administration, new laws. The Lily Ledbetter Fair Pay Act will make all compensation-based discrimination claims timely as long as one paycheck issued under the discriminatory practice falls within the limitations period. Ripple effects? Settlements, documentation and review of compensation decisions, pay equity studies.... the mind boggles.

Here's the text of the Act, which signed on 1/29/09. Oh its effective date? May 26, 2007 - the day the Supreme Court issued its decision. So, it is retro, at least as to pending cases.

Anyway, this will help you take your mind off Ms. Ledbetter and her new law: EFCA can't be far behind!


Court of Appeal Applies Anti-SLAPP Law to EDD Report

Dible worked for the Haight Ashbury Free Clinic as a counselor. The clinic terminated her employment for performance reasons. The clinic contested her unemployment claim. Ms. Dible sued for defamation and other claims. However, after some litigation, the clinic moved the court under the anti-SLAPP statute to dismiss the claim. Why? Because the clinic exercised its First Amendment rights to make a report in an official proceeding. The Court of Appeal agreed that the anti-SLAPP statute barred her claim. Dible then argued that she should be able to assert a claim for "defamation by compelled self-publication," because the clinic should have known Dible would have to re-publish to third parties the clinic's assertions regarding her performance.

The Court of Appeal disagreed:

Here we are clearly being asked to create a wider exception for claimants who have not republished where it is foreseeable that they might do so in the future. We decline to do so. Such a rule would require courts to engage in considerable speculation as to future conduct and lead to untenable attempts to speculate on future damage. A court could not, for instance, account for the possibility that after a plaintiff has received an award for damages in the form of lost future wages, he or she might republish while seeking a job and be given the job, thus not be damaged, nonetheless.

Since publication or republication to a third person is necessary to establish the cause of action of defamation, we conclude that plaintiff cannot establish a probability of success upon her defamation claim. The motion pursuant to section 425.16 was therefore properly granted.

The case is Dible v. Haight Ashbury Free Clinic and the opinion is here.

U.S. Supreme Court: Retaliation Provisions Cover Investigation Witness

Vicky Crawford worked for the Metropolitan school district of Nashville and Davidson County, TN. The agency was conducing an investigation into a harassment complaint made against an employee, who happened to be the employee relations director.

The investigator from the human resources department asked Crawford whether she had experienced inappropriate behavior by the director. She disclosed she had witnessed certain conduct. The district later fired Crawford, allegedly for embezzlement. She sued for retaliation.

The issue before the Supreme Court was whether Crawford's participation in the investigation fell within Title VII's anti-retaliation protections. The court unanimously ruled that "opposition" includes providing information during an investigation. The lower courts and the employer argued that it would require something more affirmative - such as making a complaint.


Our Little Blog Scores a "TOP" Legal Blogs Mention

We're no. 1! Ok, I'm joking. We're NOT no. 1. No, we're not no. 101 either. But we did score in the top 300 law blogs as measured by rating service Avvo.

And that makes us proud. The kind of pride you feel when someone who has the same first name as you is arrested for pet endangerment. Yes, the crawl-under-your-desk sort of feeling that your humble correspondent has experienced since, oh, fifth grade or so. I know, it's time to up the meds.

Anyway, if you want to find some popular blogs to monitor, here's the list with links to all the heavy hitters. See, you thought this post was going to be a self-indulgent waste of time, didn't you?


EFCA Debate and Article

So, I wrote this column on the Employee Free Choice (sic) Act or EFCA if you haven't seen it already. Someone must have read it, because I was invited to debate EFCA on the radio on Friday, January 23, 2009 at 7:00 a.m. Roy Ulrich, a lawyer and the host of "Morning Review" on KPFK-FM in LA, hosted the forum.

I was up against a professor from my alma mater. I think she would rescind my diploma if it were up to her.

The interesting aspect of the debate is the opinion my opponent offered about the motivation behind this law. It's not about expanding union representation at the workplace for the sake of workers, etc. It's about the labor "movement." The more members the unions get, the more money they earn. The more money they earn, the more they can lobby politicians and affect election outcomes. Their hope is to elect politicians who will change world TRADE POLICY and become anti-"globalization." Now, *I'm* not saying that's what EFCA is really about. Rather, "that's what she said."

Anyway, if you want to hear my radio stylings, you may do so here. The King of all Media has nothing to worry about. (And "baba booey" to you all.)


U.S. Supreme Court Clarifies Standards for Unions to Charge Nonmembers Service Fees

An employee member of a collective bargaining unit may choose not to be a member of the union that represents the unit. However, under First Amendment jurisprudence, the union may charge the non-member a "service fee" for bargaining services. But the union must carve out the portion of dues spent on activities unrelated to collective bargaining (such as political activity). In Locke v. Karass, the Court addressed whether the union could include the costs associated with litigation directed by the national union. The Court in a unanimous opinion held that such expenses may be charged as part of the service fee when:

(1) the subject matter of the (extra-local) litigation is of a kind that would be
chargeable if the litigation were local, e.g., litigation appropriately related to collective bargaining rather than political activities, and (2) the charge is reciprocal in nature, i.e., the contributing local reasonably expects other locals to contribute similarly to the national’s resources used for costs of similar litigation on behalf of the contributing local if and when it takes place.

Wake up. This is important stuff. The case is Locke v. Karass and the opinion is here.

Court of Appeal: Waiting Time Penalties Are...Penalties

The Court of Appeal in Pineda v. Bank of America held that "waiting time" penalties imposed under Lab. Code Section 203 are not a form of "wages" or property of the plaintiff. They are indeed penalties, unlike meal period penal- er - premiums. So, the court found, the plaintiffs could not seek waiting time penalties under the unfair competition law, Bus. Prof. Code section 17200. This is important because section 17200 carries with it a four-year statute of limitations.
A year or so ago, a superior court in another case made the extraordinary determination that waiting time penalties are wages, not penalties, and were recoverable under the UCL. So much for that argument.
The opinion in Pineda is here.

Bye Bye Brinkley

The California Supreme Court granted review in Brinkley v. Public Storage, here. We posted about Brinkley, a very employer-friendly meal and rest period decision, here. Yes, yes, I know. We predicted the Supreme Court would grant review in our earlier post. No wonder we rank among the top 700,000 blogs.


5th Circuit Awards Attorney's Fees Against EEOC

The federal and California courts apply the same standards in awarding attorney's fees in discrimination cases. So, the recent case of EEOC v. Agro Distribution LLC (opinion: here) is relevant to awards of fees in California. And I can write about other circuits' cases if I want to. So there.

The reason I'm writing about this one is that the EEOC pursued a case well beyond the point that it should have determined it lacked merit. The investigator initially assigned to the charge was on a mission. The plaintiff's deposition doomed the plaintiff's claim. The settlement demands were unreasonably high.

The court of appeals first decided that EEOC failed to "conciliate" or attempt to resolve the case in good faith. The agency made a very high demand and then immediately closed conciliation efforts when the demand was rejected, despite the employer's attempt to engage in settlement negotiations. However, the court also found that failure to conciliate is not a jurisdictional defect.

The court then held that the district court's award of fees against the EEOC was within the court's discretion. The district court awarded about $225,000 in fees for the period of time following the plaintiff's deposition until summary judgment. (That's a heck of a bill for post-deposition litigation through summary judgment, but the district court did not find fault in the billings). The court of appeals agreed with the district court that after the plaintiff's deposition, the agency's further prosecution of the case was absolutely unjustifiable.

This case may be used in situations when a case of arguable merit at inception is revealed through discovery to be frivolous, unreasonable, or without foundation. Fees should be awarded in favor of the employer from that point, if not from the beginning of the case.


Court of Appeal Affirms Jury Verdict Finding Adequate Accommodation

Julie Wilson worked as a radio dispatcher for Orange County's emergency communications system. Because of a disability that was aggravated by stress, she sought accommodations that included assignment only to certain shifts at certain times. The county temporarily gave her exactly what she wanted, but decided initially that the accommodation could not be permanent. After substantial negotiating, leaves, and rejected proposals, the County assented to all of Wilson's requests. The key issue was the delay between her initial request and the final accommodation. A jury returned a verdict for the county on her claim for denial of accommodation. The court of appeal affirmed:

The real gist of Wilson’s complaint is not that she wasn’t accommodated, but that it took too long for her supervisors to finally agree to a permanent arrangement--i.e., that she could return to work at Control One, in her same position, with the restrictions she wanted. It is this delay that forms the basis of her interactive process
claim. She argues that as a matter of law, the County failed to engage in a good faith
interactive process with her because it did not commence the interactive process until June 2005, prior to which the County simply “contrived a circumstance” to justify not engaging in the interactive process—namely, that Wilson’s disability was
only temporary.
* * *
Here, the record demonstrates the County engaged in a process aimed at trying to accommodate Wilson. Indeed, the success of its process is borne out by the fact
that in the end, Wilson got exactly what she wanted—albeit after a series of temporary accommodations.

The case is Wilson v. Orange County and the opinion is here.

SV Employment Law Article Pot Pourri

We publish articles bi-weekly in the Sacramento Daily Recorder newspaper, and about monthly in the San Francisco Daily Journal. Here are some of the articles we've published in the past few months:

By Jennifer Brown Shaw and Shane K. Anderies
The Daily Recorder

By Jennifer Brown Shaw and Carolyn Burnette
The Daily Recorder

By Jennifer Brown Shaw and Matthew J. Norfleet
The Daily Recorder

By D. Gregory Valenza
The Daily Journal

By Jennifer Brown Shaw and Becki D. Graham
The Daily Recorder

By Jennifer Brown Shaw and Carolyn G. Burnette
The Daily Recorder

By Jennifer Brown Shaw and Shane K. Anderies
The Daily Recorder

By Jennifer Brown Shaw and D. Gregory Valenza
The Daily Recorder

By D. Gregory Valenza
The Daily Journal

By Jennifer Brown Shaw and Matthew J. Norfleet
The Daily Recorder

By Jennifer Brown Shaw and Becki D. Graham
The Daily Recorder

By Jennifer Brown Shaw and Shane K. Anderies
The Daily Recorder