So You Think You Know the Law…(Answers to the Summer Edition 2010 of Gray Matters)
June 2010
Summer 2010
1. A non-competition clause in an employment contract is enforceable in California.
False, with minor exceptions. Pursuant to California Business & Professions Code § 16600, “every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” California courts have consistently held that it is a matter of public policy to ensure that citizens shall retain the right to pursue any lawful employment and enterprise of their choice. Edwards v. Arthur Anderson LLP (2008) 44 Cal.4th 937, 946.
2. Employment case related awards by arbitrators can be overturned in civil courts.
False, with exceptions. Arbitration awards may be vacated only under certain circumstances such as where the existence of corruption, fraud, or arbitrator misconduct can be shown. But see also, Pearson Dental Supplies Inc. v. Superior Court (April 26, 2010) where the court expanded the exception in Moncharsch v. Helly & Blasé where the court found an exception to the general rule when “granting finality to the arbitrator’s decision would be inconsistent with the protection of a party’s statutory rights.”
3. A staffing agency can be sued by its employee for harassment that takes place in another company.
True. Under the California Fair Employment and Housing Act (“FEHA”), where an employer sends an employee to do work for another person, and both have the right to exercise certain powers of control over the employee, that employee may be held to have two employers-his or her original or “general” employer and a second, the “special” employer. Mathieu v. Norrell Corporation (2004) 115 Cal.App.4th 1174, 1183; see also, Kowalski s. Shell Oil Co. (1979) 23 Cal.3d 168, 174. In such cases, the employee may look to either or both employers for enforcement of rights under the FEHA. Id. at 184.
4. An employer is required to pay an employees’ attorney’s fees if the employer is found liable for harassment, discrimination and/or retaliation under the California Fair Employment and Housing Act.
True. Under the California Fair Employment and Housing Act (“FEHA”), an employee is entitled to recover his or her reasonable attorney’s fees. Government Code § 12940(b). The purpose behind the FEHA’s attorneys’ fees provision is to make it easier for an employee with limited means to bring a meritorious suit to vindicate a policy considered of the greatest importance. Beaty v. BET Holdings, Inc. (2000) 222 F.3d.607. This means that if a jury finds that the employer violated the FEHA and awards the employee as little as one dollar, the employer will be responsible for the employee’s attorney’s fees. This is true despite the amount of the jury award. Therefore, there are cases where the attorney’s fees are larger than the jury award. In addition, the jury will never know that an employee is entitled to attorney’s fees. This is an issue that is addressed after a verdict, once the jury has been excused. In employment cases, the fees are typically in the range of $150,000 to $200,000 through trial.
5. Employers are required to pay overtime only if an hourly employee works over 40 hours in one week.
False. California Labor Code § 510 provides that an employee who works in excess of eight hours in one workday, in excess of 40 hours in any one workweek, and the first eight hours worked on the seventh day of work in any one workweek shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee. Any work in excess of 12 hours in one day shall be compensated at the rate of no less than twice the regular rate if pay for an employee. In addition, any work in excess of eight hours on any seventh day of a workweek shall be compensated at the rate of no less than twice the regular rate of pay of an employee.
Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.
