Posted on January 8th, 2019
Tips from Class Action Lawsuit Lawyers: How to Avoid Common Claims
Business owners in California know all too well how challenging California’s labor laws can be.
But one of the most worrisome types of potential lawsuits for employers are class actions and with good reason.
There are countless types of potential labor lawsuits for California business owners to worry about but losing a class action could potentially put you out of business for good.
You will want to make sure you familiarize yourself with class actions so, you are not completely defenseless if one comes up.
Read on for 5 tips on how to avoid the most common claims.
Employment Class Action Lawsuit Basics
Californian laws allow plaintiffs to file class-action lawsuits against pretty much anyone and for any reason.
This is bad news for us employers just trying to run our business in peace and trying to squeeze out a profit.
Among the numerous lawsuits your employees can file, these five types are the most common and the most dangerous ones.
They are:
- Off-the-Clock Work
- Wage-and-hour claims
- Misclassification of independent contractors claims
- Discrimination claims (based on race & gender)
Let us look into how you can avoid these claims below.
1. Off-the-Clock Work
Off-the-clock work has become a big issue for California employers in recent years. These are those “little” tasks employees might do that are related to their work but are done before they officially “clock-in”.
One of the most famous recent cases involving this was ‘Troester vs Starbucks. He successfully argued that he should be paid for the 5-10 minutes spent doing the tasks associated with opening or closing the store while being off-the-clock.
A U.S. District Court ruled against Troester saying the time spent on those tasks was minimal. But California later sided with the employee arguing that this time adds up over the weeks and months.
You should evaluate whether your business runs in a manner requires tasks of your employees where they are not on-the-clock when doing them.
Be sure to find a way to get those tasks done with the employee on-the-clock and getting paid for them.
Also be sure you have records/timekeeping system that proves they are on-the-clock while working. Even if the tasks are just a few minutes daily if you have lots of employees this time could add up.
You could face steep costs if a class action lawsuit came your way from your employees and off-the-clock tasks claim.
2. Wage-And-Hour
Wage-and-hour lawsuits involve anything from overtime to not giving your employees enough time for their lunch break.
To avoid such lawsuits, you first have to avoid rounding down hours worked. You must also make sure you compensate overtime as dictated by law.
Many wage-and-hour frivolous lawsuits focus on the meal break and rest break times. You should make sure you are giving the correct amount and time for meal breaks depending on the length of their shift.
Always consult with your accountant first before finalizing overtime payment. An employee can file a wage-and-hour lawsuit years after they received their last overtime payment.
3. Misclassification of independent contractors
Many employers prefer to use Independent Contractors instead of employees. Why? The cost savings can be tremendous!
But the problem is California has made it so that its almost impossible to classify anyone who works for you regularly as an independent contractor.
In April of 2018, the California Supreme Court unanimously announced a new test for determining whether a worker is an employee or an independent contractor in the landmark decision of Dynamex Operations West, Inc. v. Superior Court of Los Angeles.
Since that decision where California basically went against its own prior stated standards of what makes an Independent contractor, the heat has been on for employers.
If you use lots of independent contractors in your business you need to immediately educate yourself on these new standards before you get blindsided with a lawsuit.
4. Discrimination
Discrimination claims is a common claim against business. It is obvious that you should do all you can to prevent discrimination within your business.
Employees who belong in one or more protected classes of citizens can file a discrimination class action lawsuit against you if they believe your business has discriminated against them.
The federally protected classes include:
- Gender
- Color
- Race
- Age
- National origin
- Nationality
- Current citizenship
- Religious beliefs
- Disability status
- Veteran status
- Family status
- Marital status
- Pregnancy
- Sexual orientation
For example, if an employee claims that you fired them for reasons associated with them belonging to one of the above classes, they can drag you to court for huge potential damages.
If they are many employees in that class and they get together and claim they were all treated a certain way based on their class you could be headed towards a discrimination class action lawsuits.
You need to have systems in place to avoid discrimination claims. Even if you have nothing to do with the alleged behavior your company could still be on the hook.
Especially if its a manager or supervisor who is accused of the discriminatory behavior towards other employees.
A class action could potentially come from any of these protected categories if you have enough employees that fall into them.
But the most common we have seen have been related to gender and race.
Class Action Lawsuit Lawyers You Can Trust
Class action lawsuit lawyers can save you a lot of money and give you peace of mind when dealing with the difficult labor laws in California.
Here at Defend My Biz, we help business owners defend against class action lawsuits.
From personal experience, we know all too well how unfair labor laws can damage your chances of running a successful business in California.
We are here to help you secure your interests, destroy frivolous lawsuits, and protect the business you worked so hard to build.
Contact us today to find out how you can prevail against California’s challenging labor laws!
