With the recent spate of new California labor laws adding to employer's bureaucratic burden, and the rise of the #MeToo-inspired lawsuits, the judicial climate for California employers is becoming increasingly oppressive. With massive jury awards being handed out regularly, it pays to be diligent with compliance.
Observers of labor law and employer relations in California have noted that the state has been and is becoming even more "employee-friendly" when it comes to complaints and allegations against employers.
In fact, a recent annual report from The American Tort Reform Foundation, claims that California legislature and courts “extend liability at almost every given opportunity,” such as pursuing “no-injury” litigation in the form of employee PAGA (Private Attorneys General Act) class action lawsuits.
The Top "Worst" Judicial Jurisdictions
The Foundation's report noted that the costs from lawsuits are staggering.
” A recent study released by the U.S. Chamber Institute for Legal Reform highlights both the overall cost and inefficiencies of the tort system. The report states that the cost and compensation paid in the U.S. tort system totaled $429 billion in 2016, accounting for 2.3 percent of the U.S. gross domestic product.”
The report also noted that California is once again the number one jurisdiction for what the Foundation considers tort system abuse.
“…California has once again regained its position atop the Judicial Hellholes list due to the propensity of California judges and legislators to extend liability at almost every given opportunity.”
According to the report, the top five "Judicial Hellholes" for 2018 are as follows:
- California
- Florida
- New York City
- St. Louis, Missouri
- Louisiana
Recent Cases of Large Jury Awards
In May of 2018, a jury in San Diego awarded $18.6 million to a former 30-year Allstate Insurance employee who alleged wrongful termination based on his arrest record and a claim of self-published defamation. The suit was a result of Michael Tilkey's admission that he had been arrested on domestic violence charges. After investigation, the company decided that he had violated company policy against physical harm or violence and fired him.
In response, Tilkey filed suit, claiming that Allstate illegally considered his arrest record when deciding to terminate his employment. In addition, he claimed that he was forced to defame himself when he had to tell prospective employers of the reason he was terminated at Allstate.
The jury in the San Diego Superior Court sided with Tilkey after a week-long trial, and awarded him close to $2.7 million in compensatory damages. This consisted of $960,222.00 for wrongful termination and $1,702,915.00 for his defamation claim.
In addition, the California jury also awarded the plaintiff an additional $15,978,822.00 in punitive damages, which made his total award $18,641,959.00.
More recently, a Los Angeles jury awarded over $11 million to a couple of former employees in Temecula, California. They claimed that they were both sexually harassed by the general manager, Carlos Pineiro, and then retaliated against for complaining about the alleged harassment.
According to an article by Anthony J. Oncidi and Cole Lewis at Proskauer Rose LLP,
"Megan Meadowcroft and Amber Brown, who worked at the Keyways Vineyard and Winery in Temecula, California, alleged they had been harassed by the general manager, Carlos Pineiro. Meadowcroft and Brown filed an FEHA sexual harassment and retaliation lawsuit, claiming that Pineiro made sexually inappropriate comments to Brown, touched her on the knee, was drunk at work, and threated to harm Brown if she complained about his behavior. Meadowcroft alleged that Pineiro also made sexually explicit comments, took pictures of her rear, touched her rear and vagina, and pushed her against a wall and told her that he would make her a manager if she had sex with him. After complaining, the two were taken off the work schedule."
Along with the harassment and retaliation, both Brown and Meadowcroft claimed to be suffering from post-traumatic stress disorder as well as other issues.
The jury sided with the plaintiffs on all of their claims and awarded them each $1 million for past emotional distress damages, $1.5 million for future emotional distress damages, and $3 million in punitive damages. The total verdict of $11 million will be included with the prevailing-party attorney's fees, as well.
Compliance and Training is Critical for California Employers and HR Managers
Simply being aware of new labor laws is not sufficient to protect employers in California from non-compliance and employee claims. Strategic training and regular and consistent reviews of manager's responsibilities, legal obligations and restrictions, and mandated harassment training is essential.
The plethora of regulations and legal requirements placed upon California employers is staggering and only grows larger with each legislative session. The financial damage that jury awards can inflict threatens businesses of all sizes, but smaller firms are especially vulnerable. Prevention, awareness, and strategically proactive processes and policies are essential in this environment.
Your Partner for HR and Workplace Management
Accurate and timely management and HR compliance practices are required for HR professionals in every business. Managing all of this can be challenging, but you do have options.
Accuchex is a reputable workforce management services provider and can not only assist you with the burden of your ongoing compliance demands, but can potentially prove to be a more cost-effective solution, as well.
Click the button below to learn what you need to know about labor law in California. For more immediate information, feel free to call Accuchex Payroll Management Services at 877-422-2824.
