UPDATES FOR CALIFORNIA EMPLOYERS – APRIL 2014
Deprivation of Salary or Other Economic Benefits Under the California Labor Code Can Support Constructive Discharge Claim
In Vasquez v. Franklin Management Real Estate Fund, Inc., the California Court of Appeal reversed a trial court’s ruling which dismissed an employee’s claim that his employer had constructively discharged him by failing to reimburse him for automobile expenses. The Court of Appeal ruled that an employee may assert a claim for constructive discharge based on an employer’s violation of the California Labor Code. This ruling is significant because it enables employees to seek compensatory and punitive damages for wrongful termination arising from Labor Code violations.
California Overtime Law Does Not Apply To Employees Covered By Collective Bargaining Agreement
In Vranish v. Exxon Mobil Corp. 223 Cal.App.4th 103 (2014), plaintiffs were employees of Exxon Mobil whose wages were governed by the terms of a collective bargaining agreement. Plaintiffs argued that they were also entitled to overtime compensation under California Labor Code section 514. The Court of Appeal affirmed the trial court’s ruling that the word “overtime” as used in California Labor Code section 514 was defined by the collective bargaining agreement and not the Labor Code. This case confirms that California Labor Code section 514 allows employers and unions to define the word “overtime” in a collective bargaining agreement without violating California’s daily overtime requirements.
United States Supreme Court Holds That Whistleblower Protection Extends To Employees of Private Companies Who Are Contractors or Subcontractors For Covered Public Companies
In Lawson v. FMR, LLC, the United States Supreme Court held that the whistleblower protection provision in Section 806 of the Sarbanes-Oxley Act of 2002 protects employees of publicly traded companies and also employees of privately held companies who are contractors or subcontractors for a covered publicly traded company. The Supreme Court clarified the definition of “covered employee” under the whistleblower protection laws and expanded the scope of protection.