Recent Developments from Around the States

Local 100 union officials had conceded that the 3-day strike was in violation of New York's 1967 Taylor Law, which bars public employees from striking. Toussaint maintained that the strike was a last resort taken, not out of disrespect for the court, but rather as a response to a final offer by the MTA that was meant to push the matter into binding arbitration, a bargaining tactic Toussaint feels is used by employers and goes unpunished by the Taylor Law.

In late December, a tentative agreement was reached and then rejected by Local 100 membership by a seven-vote margin. This caused the state Public Employee Relations Board to submit the dispute to binding arbitration, even while acknowledging the possibility that the parties might still be able to settle. While MTA officials argue that that tentative agreement has been off the table since Local 100 turned it down in December, the Union, stating that it could not lawfully be held to a deadline for ratification, plans to conduct a second vote on that agreement.

Wage and Hour Misclassification Case Settled

California-based Earl Scheib Inc., which operates automobile paint and body shops, has entered into a $750,000 settlement of claims for its alleged failure to pay shop managers overtime payments required under state law by misclassifying them as exempt employees. Reynolds v. Earl Scheib Inc., Cal. Super. Ct., No. BC226353, settlement announced 4/12/06.

In March 2001, plaintiffs filed a proposed class action lawsuit regarding Earl Scheib's California subsidiary's exempt classification of managers and assistant managers. The complaint charged, among other things, that the company's practice of requiring these employees to work regularly scheduled 59-hour weeks without paying them overtime violated the California Labor Code, Sections 223, 510 and 1994, and Business and Professions Code, Section 17200.

While denying the allegations underlying the complaint, Earl Scheib entered into the settlement agreement to avoid the time and expense associated with litigating the claims. About 450 current and former shop managers and assistant managers will be entitled to make claims to share in the $750,000, which includes payments, taxes and expenses, and administrative and class counsel fees. Earl Scheib's president and chief executive officer, Christian K. Bement, and other company officials will not be held individually liable for the alleged unpaid overtime, as this claim was rejected by the California Supreme Court in August of last year. The company's maximum payment under the settlement agreement will be $250,000, with the rest covered by insurance. The settlement is subject to final approval by the Los Angeles Superior Court.

Hostile Work Environment Disability Discrimination Claim Allowed in MN

The Minnesota Court of Appeals has found that a cause of action for disability discrimination as a result of hostile work environment exists under the Minnesota Human Rights Act (the MHRA). Wenigar v. Johnson, 2006 WL 851786 (Minn.App. April 4).

Appellant Lee Johnson, a pig farmer, employed respondent, Lester Wenigar as a farm hand on his Andover, Minnesota ranch. Wenigar, 57, has a limited ability to read and write and an IQ of 54. He was initially hired by Johnson to clean pig pens, bed pigs and spread manure, among other farmhand duties, 6 days a week from 7 a.m. to 4:30 p.m., but began working overnight on the farm and living on the premises a year later as requested by Johnson. During his employment, Wenigar suffered unwelcomed harassment and discrimination because of his disability. Johnson and Wenigar's coworkers often made insulting comments about Wenigar's limited mental capacity. He was frequently subjected to name-calling, being referred to a 'stupid,' 'you f'ing dumb ass,' 'brain dead,' and 'idiot.' As a result of these and other abuses, Wenigar sought treatment from a clinical psychologist, and was diagnosed with post-traumatic stress disorder and dysthymia. Wenigar sued Johnson in the District Court, Isanti County, alleging, among other claims, disability discrimination as a result of hostile work environment under the MHRA, for which the court found appellant liable.

Upholding the district court's decision, the Minnesota Court of Appeals, recognizing the issue of whether an action exists under the MHRA for disability discrimination as a result of hostile work environment as one of first impression in Minnesota, began by noting the similarities between the state statute and the federal Americans with Disabilities Act (ADA), a statute under which this cause of action had already been recognized. The court noted that while '[t]here is no language under the MHRA that specifically allows for a cause of action for disability discrimination as a result of hostile work environment,' '[b]ecause the language of the MHRA is similar to the language used in the ADA and their purposes are identical ' [the] cause of action exists under the MHRA ' '

The court then assessed Wenigar's claim under the hostile work environment framework, first finding that he is a member of a protected class, the disabled, because 'he is vulnerable as a result of a low IQ, has limited mental capacity, and has no formal education.' The court found that these qualities, together with his age, serve to materially limit his social and economic opportunities. Noting that its holding should be construed narrowly, the court stated that it was not concluding that 'having a low IQ, alone, is a disability for purposes of the MHRA.' Reaffirming the district court's record as to the harassment suffered by Wenigar and its nexus to his disability, the Minnesota Court of Appeals recognized that ”[c]onduct that is merely rude, abrasive, unkind, or sensitive does not come within the scope of the law' but ' that the conduct here was more than merely rude, abrasive, unkind, or insensitive.' Last, the court found that looking at the totality of the circumstances, Wenigar's employment environment was sufficiently hostile, both objectively and subjectively, to alter the conditions of his employment and create an abusive working environment. The court thus affirmed the district court's decision for Wenigar.

California Court of Appeals Rules Wage Order Invalid

The California Court of Appeals, Second District has held that a 2001 wage order issued by California's Industrial Welfare Commission (IWC) relieving employers from an obligation to provide a second meal break to employees working 12-hour shifts who were covered by a valid collective bargaining agreement (CBA) contravened governing Labor Code provisions, and was therefore invalid under state law. Bearden v. U.S. Borax, Inc., 2006 WL 893605 (April 7).

Reversing the lower court's judgment, the California Court of Appeals found that the IWC's wage order, in creating a meal exemption not codified in Section 512 of the Labor Code governing required meal periods under state law, exceeded its authority, therefore making the wage order invalid. Plaintiffs-appellants, six mine workers, had filed a complaint based on their employer's failure to allow a second meal break for the 12-hour shifts they were working. In holding for plaintiffs, the Court of Appeals found that section 512, which mandates that employers give employees working more than 10-hour days a second meal period of 30 minutes, explicitly identifies two exemptions, neither of which was applicable to the case at hand. One allows the waiver of the second meal period by mutual consent of the employer and the employee if the total hours worked is no more than 12, and the other exempts workers in the wholesale baking industry. IWC Wage Order 16-2001, effective Jan. 1, 2001, purported to institute a third exemption from the second meal period requirement for employees in construction, drilling, logging and mining when those employees were covered by a CBA.

Applying the rules of statutory interpretation, the Court of Appeals began by noting that ”[w]henever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute.” Because the additional exemption administered by the IWC wage order was inconsistent with statute, the Court of Appeals found that it could not be found valid. Further, under the rule of statutory construction stating that ”where exceptions to a general rule are specified by statute, other exceptions are not to be presumed unless a contrary legislative intent can be discerned,” the California Court of Appeals found that it could not imply additional exemptions to the Labor Code that weren't contemplated by the California legislature. The court thus found that the IWC's wage order could not control plaintiffs' rights to a second meal break under state law.

Transport Workers Union Fined $2.5 Million for New York City Transit Strike

On April 17, New York Supreme Court Kings County Justice Theodore T. Jones ordered a $2.5 million fine against the Transport Workers Union Local 100 (Local 100 or the Union) for their 3-day illegal transit strike against the New York City subway and bus system in December 2005. New York City Transit Authority v. Transport Workers Union, N.Y. Sup. Ct., No. 37469/05 (April 17).

The action, in which state Attorney General Eliot Spitzer represented the Metropolitan Transportation Authority (MTA), the state parent body of the New York City Transit Authority, also suspended the Union's automatic dues check-off indefinitely, but suggested that the Union would be able to restore the check-off after 90 days. These penalties against the Union followed an April 10th ruling that sentenced Local 100's president, Roger Toussaint, to a 10-day jail term and imposed a $1000 fine against him for defying an injunction barring the strike.

Local 100 union officials had conceded that the 3-day strike was in violation of New York's 1967 Taylor Law, which bars public employees from striking. Toussaint maintained that the strike was a last resort taken, not out of disrespect for the court, but rather as a response to a final offer by the MTA that was meant to push the matter into binding arbitration, a bargaining tactic Toussaint feels is used by employers and goes unpunished by the Taylor Law.

In late December, a tentative agreement was reached and then rejected by Local 100 membership by a seven-vote margin. This caused the state Public Employee Relations Board to submit the dispute to binding arbitration, even while acknowledging the possibility that the parties might still be able to settle. While MTA officials argue that that tentative agreement has been off the table since Local 100 turned it down in December, the Union, stating that it could not lawfully be held to a deadline for ratification, plans to conduct a second vote on that agreement.

Wage and Hour Misclassification Case Settled

California-based Earl Scheib Inc., which operates automobile paint and body shops, has entered into a $750,000 settlement of claims for its alleged failure to pay shop managers overtime payments required under state law by misclassifying them as exempt employees. Reynolds v. Earl Scheib Inc., Cal. Super. Ct., No. BC226353, settlement announced 4/12/06.

In March 2001, plaintiffs filed a proposed class action lawsuit regarding Earl Scheib's California subsidiary's exempt classification of managers and assistant managers. The complaint charged, among other things, that the company's practice of requiring these employees to work regularly scheduled 59-hour weeks without paying them overtime violated the California Labor Code, Sections 223, 510 and 1994, and Business and Professions Code, Section 17200.

While denying the allegations underlying the complaint, Earl Scheib entered into the settlement agreement to avoid the time and expense associated with litigating the claims. About 450 current and former shop managers and assistant managers will be entitled to make claims to share in the $750,000, which includes payments, taxes and expenses, and administrative and class counsel fees. Earl Scheib's president and chief executive officer, Christian K. Bement, and other company officials will not be held individually liable for the alleged unpaid overtime, as this claim was rejected by the California Supreme Court in August of last year. The company's maximum payment under the settlement agreement will be $250,000, with the rest covered by insurance. The settlement is subject to final approval by the Los Angeles Superior Court.

Hostile Work Environment Disability Discrimination Claim Allowed in MN

The Minnesota Court of Appeals has found that a cause of action for disability discrimination as a result of hostile work environment exists under the Minnesota Human Rights Act (the MHRA). Wenigar v. Johnson, 2006 WL 851786 (Minn.App. April 4).

Appellant Lee Johnson, a pig farmer, employed respondent, Lester Wenigar as a farm hand on his Andover, Minnesota ranch. Wenigar, 57, has a limited ability to read and write and an IQ of 54. He was initially hired by Johnson to clean pig pens, bed pigs and spread manure, among other farmhand duties, 6 days a week from 7 a.m. to 4:30 p.m., but began working overnight on the farm and living on the premises a year later as requested by Johnson. During his employment, Wenigar suffered unwelcomed harassment and discrimination because of his disability. Johnson and Wenigar's coworkers often made insulting comments about Wenigar's limited mental capacity. He was frequently subjected to name-calling, being referred to a 'stupid,' 'you f'ing dumb ass,' 'brain dead,' and 'idiot.' As a result of these and other abuses, Wenigar sought treatment from a clinical psychologist, and was diagnosed with post-traumatic stress disorder and dysthymia. Wenigar sued Johnson in the District Court, Isanti County, alleging, among other claims, disability discrimination as a result of hostile work environment under the MHRA, for which the court found appellant liable.

Upholding the district court's decision, the Minnesota Court of Appeals, recognizing the issue of whether an action exists under the MHRA for disability discrimination as a result of hostile work environment as one of first impression in Minnesota, began by noting the similarities between the state statute and the federal Americans with Disabilities Act (ADA), a statute under which this cause of action had already been recognized. The court noted that while '[t]here is no language under the MHRA that specifically allows for a cause of action for disability discrimination as a result of hostile work environment,' '[b]ecause the language of the MHRA is similar to the language used in the ADA and their purposes are identical ' [the] cause of action exists under the MHRA ' '

The court then assessed Wenigar's claim under the hostile work environment framework, first finding that he is a member of a protected class, the disabled, because 'he is vulnerable as a result of a low IQ, has limited mental capacity, and has no formal education.' The court found that these qualities, together with his age, serve to materially limit his social and economic opportunities. Noting that its holding should be construed narrowly, the court stated that it was not concluding that 'having a low IQ, alone, is a disability for purposes of the MHRA.' Reaffirming the district court's record as to the harassment suffered by Wenigar and its nexus to his disability, the Minnesota Court of Appeals recognized that ”[c]onduct that is merely rude, abrasive, unkind, or sensitive does not come within the scope of the law' but ' that the conduct here was more than merely rude, abrasive, unkind, or insensitive.' Last, the court found that looking at the totality of the circumstances, Wenigar's employment environment was sufficiently hostile, both objectively and subjectively, to alter the conditions of his employment and create an abusive working environment. The court thus affirmed the district court's decision for Wenigar.

California Court of Appeals Rules Wage Order Invalid

The California Court of Appeals, Second District has held that a 2001 wage order issued by California's Industrial Welfare Commission (IWC) relieving employers from an obligation to provide a second meal break to employees working 12-hour shifts who were covered by a valid collective bargaining agreement (CBA) contravened governing Labor Code provisions, and was therefore invalid under state law. Bearden v. U.S. Borax, Inc., 2006 WL 893605 (April 7).

Reversing the lower court's judgment, the California Court of Appeals found that the IWC's wage order, in creating a meal exemption not codified in Section 512 of the Labor Code governing required meal periods under state law, exceeded its authority, therefore making the wage order invalid. Plaintiffs-appellants, six mine workers, had filed a complaint based on their employer's failure to allow a second meal break for the 12-hour shifts they were working. In holding for plaintiffs, the Court of Appeals found that section 512, which mandates that employers give employees working more than 10-hour days a second meal period of 30 minutes, explicitly identifies two exemptions, neither of which was applicable to the case at hand. One allows the waiver of the second meal period by mutual consent of the employer and the employee if the total hours worked is no more than 12, and the other exempts workers in the wholesale baking industry. IWC Wage Order 16-2001, effective Jan. 1, 2001, purported to institute a third exemption from the second meal period requirement for employees in construction, drilling, logging and mining when those employees were covered by a CBA.

Applying the rules of statutory interpretation, the Court of Appeals began by noting that ”[w]henever by the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adopted is valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose of the statute.” Because the additional exemption administered by the IWC wage order was inconsistent with statute, the Court of Appeals found that it could not be found valid. Further, under the rule of statutory construction stating that ”where exceptions to a general rule are specified by statute, other exceptions are not to be presumed unless a contrary legislative intent can be discerned,” the California Court of Appeals found that it could not imply additional exemptions to the Labor Code that weren't contemplated by the California legislature. The court thus found that the IWC's wage order could not control plaintiffs' rights to a second meal break under state law.