Answers to our Clients’ Most Frequently Asked Questions
Have a question? We probably have answered it in one of our many informative frequently asked questions (FAQ’s). To find the answers you’re looking for, you can click on “Show Answer.” You can also select a specific category from the drop-down box to narrow the results, or use the search box at the top or bottom of the page to access relevant information from anywhere on the site.
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Are there any Affirmative Defenses Employers Can Rely Upon to Defeat Employment-related Claims made by Employees?
Yes, the good news is that there are a lot of affirmative defenses that are raised by the employer typically when it files an answer to a civil complaint (i.e., lawsuit) that if proven will defeat one or more claims alleged by an employee, in whole or in part.
The most common affirmative defenses include, but are not limited to:
- Failure to state a claim upon which relief can be granted;
- Barred by the Statute of limitations;
- Failure to exhaust administrative remedies required by state or federal laws;
- No standing to assert the claims or causes of action within the Complaint;
- Lack of Jurisdiction;
- Barred by Res Judicata and/or Collateral Estoppel;
- Preempted by state or federal laws;
- Improper Venue;
- Not employed by Defendant;
- Barred by Negligence/Fault of others;
- Laches (plaintiff unreasonably delayed in seeking the relief requested to the prejudice of defendant);
- Waiver (plaintiff failed to object to the alleged conduct of defendant and has voluntarily relinquished known rights);
- Estoppel (plaintiff's separate, individual deeds, conduct, omissions and actions led defendant to rely reasonably and properly on such with respect to the transactions at issue);
- Barred by unclean hands or after-acquired evidence:
- Barred by Business Judgment Rule:
- Barred by Avoidable Consequences Defense;
- Prompt Corrective Action was taken;
- Mixed Motive defense; and
- Employed at-will/Lawful Termination.
Is an Attorney Demand Letter Conditioning Payment of Six Figure Settlement Extortion?
You state, "We just received a letter from an attorney representing one of our current/former employees/contractors/workers claiming violations of employment laws and demands that we pay a six figure settlement in seven days or he will file a civil lawsuit. Is this extortion?"
The California Courts of Appeal have generally concluded that an attorney’s pre-litigation communications — including demand letters — constitute extortion if they threaten to file a criminal complaint or otherwise report criminal activities to government authorities.
But Courts have recognized that threats to file non-sham civil litigation are not extortion under California law, as any conclusion to the contrary would likely violate the First Amendment.
What are a Company's legal obligations Upon Receipt of an Attorney Letter claiming the Company Violated Employment laws?
Of course, requesting that an attorney provide all evidence that supports purported claims should be provided to the employer so that you can fully evaluate them, however, it is not required by law. Once legal action is commenced and written discovery requests are served by your Company on the employee, there is no legal obligation for the attorney, and/or his client, to produce anything.
However, the letter does trigger several legal obligations including, identifying and preserving all potentially relevant evidence related to the subject matter (i.e., employee and issues) and informing all persons who may be in possession of such information of the same, which should be done at the direction of experienced employment counsel.
In addition, depending on the claims raised by the attorneys’ letter, you may be legally required to conduct an investigation of the allegations which would allow you to request that the employee participate in the investigation.
Mandated or not, we strongly suggest that an investigation be conducted by counsel immediately so that you can fully evaluate the claims, potential liability, exposure, defenses, potential cross claims so that you can determine how you wish to proceed. Even baseless claims are expensive to defend so it is always best advised to retain counsel to investigate upfront and fully respond to any lawyer letters.
What is a Company's Obligations when an Employee Requests Copies of all Payroll-Related Records?
Under California Labor Code § 226, California employers are required to furnish employees with itemized wage statements that show nine (9) specific categories of information, such as all hourly rates, hours worked, gross wages earned, etc. The employer must provide these wage statements at the time employees are paid or semi-monthly. The scope of this one is easier than California Labor Code §1198.5. In addition to requiring itemized wage statements, this section also requires the employer to produce those wage statements to employees on request or a computer-generated report that shows all nine (9) categories of information required. Employers must make the records available to the employee within twenty-one (21) days.
California Labor Code §226 also authorizes the employee to sue for a court order requiring the employer to produce the information and also a penalty of $750, and employees can also recover attorneys’ fees for bringing the lawsuit.
Violation of the statute is also a criminal infraction, however, unlike California Labor Code §1198.5, there is no exception for pending litigation. Further discussion of the other statutory provisions requesting copies of personnel records and signed documents can be found in other FAQ’s.
What are a Company's obligations when an Employee requests Copies of all Signed Documents?
Under California Labor Code § 432, Any document that an employee (or job applicant) “signs” that is related to obtaining or holding employment must be provided under Labor Code § 432 upon request. Examples include job applications, handbook acknowledgments, arbitration agreements, job descriptions, and any signed policy acknowledgments (anti-harassment, retaliation, discrimination, at-will employment, meal/rest break polices, etc.). There is no timeline for production and there is no private right of action to enforce compliance.
However, it does not mean that employers should ignore requests because as a practical matter, documents covered by this section can also be covered by Labor Code § 1198.5 (i.e., signed performance reviews or signed disciplinary write-ups).
Significantly, failure to comply with such a request is a misdemeanor. Further discussion of the other statutory provisions requesting copies of personnel records and payroll records can be found in other FAQ’s.
What are a California Company's Obligations when an Employee Requests a Copy of his/her Personnel File?
In California, three principal laws govern employee requests to inspect personnel records—California Labor Code §§ 1198.5, 226, and 432.
Under Labor Code § 1198.5, employees (and former employees) have the right to inspect personnel records maintained by the employer “related to the employee’s performance or to any grievance concerning the employee.” Employers must allow inspection or copying within thirty (30) days of the request, which can be made by the employee or their representative (often an attorney). That time period can be extended by five (5) days by mutual agreement.
Documents such as performance reviews, commendation letters, disciplinary notices (“write-ups”), corrective action plans, and complaints about the employee would likely be covered.
The language in Labor Code § 1198.5 is broad; it uses the terms “related to” and “concerning.” As a result, determining exactly what other documents might be covered can be a challenge. But the Labor Commissioner has issued some guidance on its website on what might be included in a “personnel file,” including, in addition to the above, things like an employment application, notices of leaves of absence or vacation, education and training notices, and attendance records. Unfortunately, there is no appellate case interpreting the scope of the current statutory language. So the overall scope of the statute still remains an open-ended question.
However, the statute excludes files that are (1) records about a criminal offense, (2) letters of reference, and (3) ratings, reports or records obtained before the employee’s employment, prepared by identifiable examination committee members, or obtained in connection with a promotional examination. In addition, employers can redact the names of any non-supervisory employee mentioned in the requesting employee’s file.
There are also situations when the statute does not apply. For example, if an employee (or former employee) files a lawsuit that “relates to a personnel matter” against the employer, then the right to inspect or copy the records ceases during the pendency of the lawsuit. The inclusion of this provision strongly suggests that Labor Code §1198.5 is not a replacement for broad civil discovery.
If the employer does not permit the inspection or copying of these records in time, the employee may bring an action to obtain a court order (injunction) for the employer to comply with the statute. Employees are also entitled to a statutory penalty of $750 and an award of attorneys’ fees and costs for bringing the action. In addition, failure to comply is a criminal infraction. Further discussion of the other statutory provisions requesting copies of signed documents and payroll records can be found in other FAQ’s.
Should Company Oppose Employee's Claim for Unemployment Insurance Benefits?
There is much more information needed to advise on this. Generally, unless the employee has engaged in misconduct that would disqualify them from UI benefits that would permit them to obtain free “discovery” in a hearing, it generally is not worth opposing an employee’s claim for unemployment insurance benefits for several reasons.
- First, although the decision is inadmissible in a civil case, the sworn testimony is admissible. This becomes an issue when the employer, not represented by counsel, sends a representative to the hearing whose testimony and evidence binds the employer. When the same issues are presented in a subsequent civil action, the prior sworn testimony can and will be used against them. Since the employer has not fully investigated the issues at the time of the unemployment appeals hearing, it is better to resist the urge to attend.
- Second, employees and employers contribute to unemployment. Employers who challenge an employee’s application for unemployment benefits that the employee is in fact entitled to often times encourages employees to sue the employer civilly. Unemployment insurance benefits are minimal and capped such that the costs of opposing it often will cost more than the benefits at issue.
- Third, unless an employee has voluntarily quit and is not claiming constructive discharge or engaged in serious misconduct, the employee is entitled to and will be awarded unemployment benefits so any such appeal is a waste of time, money and serves no benefit to the employer since the unemployment insurance award is inadmissible in a civil action.
If the stated reasons for denial of UI benefits reported by the employee raises unlawful employment actions, the employer is on notice of anticipated legal action, and is strongly advised to retain counsel immediately to launch an investigation of such claims.
Company's Clients & Vendors Report Former Employee Defaming Company and Seeking to Take Business. What Can Be Done?
Immediately retain experienced employment counsel to issue cease and desist letters to the persons who are identified as having engaged in the reported conduct which may also include filing an immediate motion seeking injunctive relief.
In addition, counsel will recommend launching an attorney-client privileged investigation of the allegations that will dictate future steps.
How Long Does an Employee Have to File a Lawsuit against the Company after Termination or Separation?
The statute of limitations (i.e. the time period to pursue legal action) varies depending the cause of action alleged and underlying laws that apply. Federal statute of limitations provisions set forth the limitations for suits filed in federal courts. State law statute of limitations provisions vary by state and according to the type of case or claim. In California, the statute of limitations for wrongful termination claims varies depending on the type of lawsuit filed. The most common employment claims are:
- Wrongful Termination in Violation of Public Policy
The statute of limitations based on violation of public policy is two years after the date of the termination took place.
- Wrongful Termination based upon Unlawful Discrimination, Harassment, and/or Retaliation under Federal or State Laws.
An employee has the choice of filing under Title VII (federal law) or the Fair Employment and Housing Act (FEHA -state law), although almost always, California employees file claims under FEHA because it is far more employee-friendly.
If the employee files a charge under FEHA, an employee has one year to file a charge of wrongful termination based on discriminatory, harassing or retaliatory acts. A charge is filed with the DFEH, and if the Department does not resolve the case, it issues a notice of right to sue.
Alternatively, an employee can request an immediate right to sue, in which case, no investigation is conducted and the Department issues an immediate right to sue. In either instance, an employee has one year from issuance of the right to sue notice to file a lawsuit in court.
- Wrongful Termination based upon a Breach of Written or Implied Contract
When a written employment contract is in place and the termination violates one of the provisions therein, an employee has four years to file a claim of wrongful termination. The four years will begin from the date that the breach occurred rather than from the date of termination. However, if the employment contract is implied, because of a laws or facts based on the actions and behavior of the employer and employee, the statute of limitations is two years from the date of the breach.
How Can An Employee Prove They Were Constructively Discharged?
Yes. This is one of the most common misperceptions which is covered in our videos. An employee can claim that s/he was constructively discharged. A constructive discharge occurs when the employer’s conduct effectively forces an employee to resign. Although the employee may say ‘I quit,’ the employment relationship is actually severed involuntarily by the employer’s acts, against the employee’s will; a constructive discharge is legally regarded as a firing rather than a resignation.
A California employee must prove the following elements to show that s/he was constructively discharged:
- Intolerable work conditions existed at the time of the employee’s resignation;
- The work conditions were so unusually adverse that a reasonable employee would have felt compelled to resign;
- The employer intentionally created or knowingly permitted these intolerable work conditions; and
- A reasonable employer would have realized that a reasonable person in the employee’s position would be compelled to resign.
The bar to proving intolerable work conditions is high. California courts have found that the following situations alone do not result in intolerable work conditions:
- A reduction in pay.
- A demotion.
- A transfer to a different branch.
- Single incidents of mistreatment.
- Reassignment to graveyard shifts.
- A former subordinate’s promotion over the employee, requiring the employee to answer to a person they used to supervise.
- Unfair performance evaluations.