California Labor Law Levels the Playing Field
This is a true story.
Diane is a bright, well organized and the type of person you ask when it’s critical to get something done. You know the type, always busy, yet never too busy to help. Diane has both a business and a paralegal background and is a go-to person when problems arise.
One day Harvey who is a neighbor approaches Diane seeking her help. Harvey’s business, which was given to him by his father who retired, is in serious trouble and he is unable to stop its free fall into bankruptcy. Harvey’s old approach was to borrow and throw money at the problem. This economy today is not so forgiving and this time Harvey has run out of economic rope.
Diane agrees to see if she can spot the problem and fashion a plan to put this business back on track. Taking into account that the company has been around for many years there was hope that with the right medicine it could be saved.
Diane found that there was a serious lack of financial discipline and the company needed a good dose of belt tightening and record keeping. When she took on this project no one could tell her what was actually in inventory and even if it held of the right mix of items.
Diane worked on this for about three months only asking that Harvey keep her credit card payments current which was a very modest monthly amount as this project was requiring more than a full time commitment and it was running longer than expected.
After the initial three month period Harvey asked her to stay on and promised to bring her in as a part owner if she would continue working full time. Harvey promised to pay her the same amount as he would draw from the company. And like all such promises made in desperate circumstances they tend to be unreliable, but Diane is honest and trusting by nature.
Six more months goes by and Diane is working extremely long hours. She receives only modest payments with the excuse that there is not enough money to pay her what was promised. Again Harvey promised that she will receive what is owed when things turn around. At about the eighth month Diane accidentally finds out that Harvey has been taking substantial payments from the company even though everyone else had to take a pay cut. In response to this discovery Diane tells Harvey she is quitting. Harvey then promises to pay Diane but because funds were tight it would be paid over time and she is to receive part payment right away.
With these new assurances Diane continues working and the company begins making substantial progress with Diane receiving only some payments over the next six months.
Then Harvey drops the bomb; he fires Diane because he figures he is out of the woods. This occurs after Diane dedicated over a year helping Harvey rescue his company. Although there were numerous discussions and agreement about what she is entitled to, nothing was put in writing.
Diane calls on an old friend who is a lawyer and tells her story, feeling like a fool. She knows that these promises should have been memorialized but she was leading with her heart and not her head.
California Labor Law which has evolved from the early 1900’s recognizes the key elements inherent in the relationship between employers and employees. That is, employers have both greater economic strength and bargaining power. And in recognizing this reality labor law has been carefully designed to level the playing field. By design, California Labor Law provides that no one shall work for less than minimum wage and equally important the burden shall be on the employer to keep those records compute the wages owed to their employees.
No law is worth its salt unless it has teeth and under the California Labor Law there is an array of penalties for violating a workers’ right along with the right for that worker to recover his legal fees and interest.
In this case Diane has a very substantial collection of emails which shows that she regularly worked nights and weekends over and above working at the office five days a week. Using this information she was able to reconstruct a reasonable estimate of the time worked. When all her time was added up along with statutory penalties for failing to pay her timely and for violating the California Labor Law for minimum wage (which provides for a penalty equal to 100% of unpaid minimum wage) plus interest, plus legal expenses incurred, Diane’s claim is well in excess of $150,000. When her claim is computed using the wages promised she will be entitled to over $250,000.
Now is that a happy ending or what!
It is important to seek legal advice with a California Labor Law Attorney if you have any questions regarding your rights, don’t guess and don’t assume. Sometimes you have to put embarrassment aside and you will be surprised how powerful California Labor Law is and it is on your side. It’s time to level the playing field.
