All posts by Karen Marshall

And By: Samson R. Elsbernd
401(k) retirement savings plans and similar defined contribution plans generally shift retirement plan risks from employers to employees. However, a recent Supreme Court Case decided this past February, LaRue v. DeWolff, Boberg & Associates, could make 401(k) defined contribution plans riskier for employers.

Defined Benefit Plans v. Defined Contribution Plans
Employers generally offer employees one of two types of retirement plans: defined benefit plans or defined contribution plans. Defined benefit plans provide a set retirement income, which is usually related to the number of years worked and employee compensation. On the other hand, defined contribution plans, also called individual account plans, provide payment according to the individual employee’s retirement account, which depends upon the amounts contributed and the performance of that account. 401(k) retirement savings plans are popular defined contribution plans.

Previously, the Supreme Court, in Massachusetts Mutual Life Insurance Company v. Russell, ruled that an employee could not sue the fiduciary of her plan (her employer) under ERISA (Employee Retirement Income Security Act of 1974) for breach of fiduciary duty concerning a defined benefit retirement plan. However, the Supreme Court recently allowed an employee to sue his employer under ERISA for fiduciary breach concerning his defined contribution plan.

Employees Can Sue Their Employers Regarding Their 401(K) Plans

In LaRue v. DeWolff, Boberg & Associates, the United States Supreme Court clarified that ERISA authorizes individuals to sue and recover for fiduciary breaches that impair the value of the retirement plan assets in the employee’s individual account. LaRue, the employee, sued his employer regarding his 401(k) retirement plan. His plan provided procedures and requirements that enabled individual plan participants to direct the investment of their contributions. LaRue alleged that he directed his employer to make investment changes in his individual account that the employer did not make. Consequently, he claimed his individual retirement account suffered a loss of $150,000 in interest (the Court record did not state whether the loss of interest was a decline or an increase in the value of the assets in the plan). LaRue argued that his employer should cover the loss, and the Supreme Court said LaRue could sue for this fiduciary breach under ERISA. The Court allowed the lawsuit to continue because fiduciary employer misconduct could reduce the benefits available under the retirement plan in the defined contribution system, whereas administrator misconduct in a defined benefit plan will not affect the retirement benefits unless the misconduct causes a risk of default for the entire plan.

LaRue Might Not Be Able To Recover
LaRue might not be able to recover from his employer even though the Supreme Court allowed him to sue. The case will now go back to the trial court, where LaRue has to prove 1) the fiduciary (employer) had breached its obligations, and 2) the breach had a detrimental effect on LaRue’s plan. The Supreme Court merely said employees could sue their employers for fiduciary breaches related to their 401(k) plans. The Court did not consider whether LaRue correctly followed the procedures and regulations of his plan, whether LaRue must exhaust all other remedies provided for in his plan before suing for the fiduciary breach, or whether LaRue started his lawsuit and asserted his rights early enough to get relief from a court. Lessons From LaRue Employers choose defined contribution plans because of their advantages over defined benefit plans, including less regulation and fewer administrative costs. Additionally, defined contribution plans give employees more control over their retirement, especially in an increasingly mobile job market. Perhaps more important to employers, defined contribution plans shift several risks of defined benefit plans from employers to employees, including the dangers of employees outliving the accumulated assets (longevity risk) in the plan and accumulating insufficient assets (investment risk).

The landscape has now changed again and some risk has been shifted to employers who offer defined contribution plans. Now that employees can sue their employers for mismanaging their 401(k) retirement plan accounts, these retirement plans are riskier than defined benefit plans with respect to lawsuits for fiduciary breaches. For example, employers may be susceptible to lawsuits by disgruntled employees whose retirement plans did not grow as large as the employee had hoped. To better defend themselves against this risk, employers should make sure they understand their fiduciary obligations under ERISA and consider having a qualified investment advisor under contract to perform some or all of those obligations. In addition, documentation will be critical in the event of a lawsuit, so employers should keep notes and records of all activity and discussions regarding changes in their employees’ plans. Though these suggestions will not prevent an ERISA, they will help defend against such a claim if one is made.

Wilke, Fleury, Hoffelt, Gould & Birney, LLP Labor & Employment Newsletter, August 2008, Volume 11, Issue 3

2008 was a relatively active year in terms of important legislative changes for California employers.  The following is a synopsis of the more notable changes that were enacted or modified for 2009.

California Law
Text-Based Communication While Driving Prohibited
Effective January 1, 2009, text-based communication while driving is prohibited.  Employers should update existing policies.

Temporary Employees Must Be Paid Weekly
Labor Code section 201.3 requires that temporary employees be paid on a weekly, rather than on bi-weekly, basis.  With certain exclusions, Section 201.3 defines a “temporary services employer” as “an employing unit that contracts with clients or customers to supply workers to perform services for clients or customers” and who negotiates with its clients and customers on such matters as time and place where the services will be provided, type of work, working conditions, and quality and price of the services.  The “temporary services employer” also determines the assignments of workers, retains the authority to assign a worker to another client or customer when the worker is deemed unacceptable to the client or customer, assigns workers to perform services for clients or customers, sets the rate of pay for workers, pays workers from its own account, and retains the right to hire and fire the workers.

The following new rules apply to temporary service employers:

•    With certain exceptions, temporary workers must be paid weekly with the wages for the current week’s work due on the payday of the following week.

•    If a temporary employee is assigned to work “day to day” from a pool of workers, the employee’s wages must be paid at the end of each day.

•    Strike replacements must be paid at the end of each workday.

•    Unless otherwise stated, temporary services employees who are fired or quit must be paid pursuant to Labor Code §§ 201 and 202.

Overtime Exemption For Physicians Paid On An Hourly Basis
A licensed physician or surgeon who is primarily engaged in performing duties for which licensure is required is exempt from overtime if he/she is paid at least the minimum hourly rate set annually by the state.  Effective January 1, 2009, the minimum hourly rate is $69.13. This exemption does not apply to employees in medical internships or resident programs, physician employees covered by collective bargaining agreements or veterinarians.

Monthly or Annual Salaries for Exempt Computer Professionals
California Labor Code § 515.5 has been amended to allow an employer to pay a computer professional who is exempt from overtime a monthly or annual salary.  The salary required for the exemption is $79,050 annually or $6,587.50 monthly.

Earned Income Tax Credit
You must provide notification to all employees that they maybe eligible for the federal earned income tax credit (EITC) within one week before or after, or at the same time, you provide a Form W-2 or a Form 1099 to any employee.

Federal Law
Department Of Homeland Security: Supplemental Final “No-Match Letter” Rule
On October 23, 2008, the Department of Homeland Security (“DHS”) issued its supplemental final rule for employers who receive a “no-match” letter from the Social Security Administration or a Notice of Suspect Documents letter from the DHS.  The final rule will become effective upon the lifting of an injunction put in place during a legal challenge to the original 2007 version.  This will likely take place in early 2009.

The supplemental final rule requires employers to:

•    Verify within 30 days that the mismatch was not the result of a record-keeping error on the employer’s part.  If it is, then correct and communicate the corrected information to the SSA.

•    If the mismatch cannot be resolved as a record keeping error, then the employer must notify the employee within 5 business days and request that the employee confirm the accuracy of the employment records within 90 days of receiving the no-match letter.

•    At the end of the 90 day period, if the mismatch has not been resolved the employer will have 3 days to complete a new I-9 form with the employee.  The questionable Social Security Number may not be used when completing this new form.

The supplemental final rule provides a safe harbor to employers that follow its procedures.  If an employer does nothing to resolve the mismatch or does not act in good faith, then the employer may be liable for employing an unauthorized worker, leading to civil or criminal penalties.

Amendments To The ADA
The ADA Amendments Act of 2008 (“ADAAA”) goes into effect on January 1, 2009.  The effect of the ADAAA on California employers is minimal, as California employers were already required to comply with the Fair Employment and Housing Act which is even more favorable to employees than the ADAAA.  However, employers in should still be aware of the ADAAA and its potential effect on their out-of-state operations.

The ADAAA expands the definition of disability, in several ways, including:

•    Requiring the courts to determine whether an impairment substantially limits a major life activity without taking into account mitigating measures such as hearing aids, prosthetics or insulin.

•    Expanding the definition of “major life activities” to include caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing lifting, bending, speaking, breathing, learning, reading concentrating, thinking, communicating, working and the operation of a major bodily function, such as the immune system, normal cell growth and digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine and reproductive functions.

•    Removing the “substantially limits” requirement, meaning that individuals are not required to establish that their impairment limits or is perceived to limit a major life activity to be “regarded as being disabled.”  However, reasonable accommodations need not be provided to an individual who is only “regarded as” having an impairment.

•    Providing that an impairment that is episodic or in remission is a disability if it would substantially limit a major life activity when active.

Revised Form I-9 for Employers
The U.S. Citizenship and Immigration Services has revised the list of documents that will be acceptable for Form I-9, Employment Eligibility Verification.  The new rule does the following:

•    Requires that all documents presented during the verification process be unexpired;

•    Eliminates List A identity and employment authorization documentation Forms I-688, I-688A (Temporary Resident Card and outdated Employment Authorization Cards);

•    Adds foreign passports containing certain machine-readable immigrant visas to List A; and

•    Adds to List A valid passports for citizens of the Federated States of Micronesia (FSM) and the Republic of the Marshall Islands (RMI), along with Form I-94 or Form I-94A.

The revised Form I-9 is available at www.uscis.gov.  Paper copies of the Form I-9 can be ordered by calling 1-800-870-3676.  Employers are required to use the revised form for all new hires.

Family and Medical Leave Act
The Department of Labor has made changes to the Family and Medical Leave Act that will take effect on January 16, 2009:

Military Family Leave
•    Employees who are family members of covered service members may take up to 26 work weeks of leave in a single 12-month period to care for a covered service member with a serious illness or injury incurred in the line of duty while on active duty.
•    Families of National Guard and Reserve personnel on active duty may take 12 weeks of FMLA job-protected leave to manage their affairs based on “any qualifying exigency,” including short notice deployment, military events and related activities, childcare and school activities, financial and legal arrangements, counseling, rest and recuperation, post deployment activities, and additional activities where the employer and employee agree to the leave.

Employee Eligibility
•    Twelve months of employment need not be consecutive for purpose of determining whether an employee has been employed by an employer for at least 12 months.  An employer need not count a break-in-service of seven years or more, with two exceptions:

1.    An employee’s fulfillment of his/her military obligations; and

2.    A period of approved absences or unpaid leave, such as for education or child-rearing purposes, where a written agreement or collective bargaining agreement exists concerning the employer’s intent to rehire the employee.

•    Time spent fulfilling an employee’s military service obligations now count toward the employee’s 1,250 hour and 12-month requirements for compliance with the Uniformed Services Employment and Reemployment Rights Act.

•    An employee who is not eligible for FMLA protection at the beginning of his/her leave may begin FMLA once he/she has met the eligibility requirements.

Light Duty

•    Light duty does not count against an employee’s FMLA entitlement.  The employee’s right to restoration is suspended during the period of time the employee performs light duty or until the end of the applicable 12-month FMLA leave year.

Waiver of Rights

•    An employee may voluntarily settle or release FMLA claims without approval from a court or the DOL.

Serious Health Condition

•    An employee who is incapacitated for more than three consecutive full calendar days must show that he/she is receiving continuing treatment from a health care provider in order to satisfy the definition of “serious health condition.”  The employee must visit a health care provider two times within 30 days of the first day of incapacity unless extenuating circumstances exist.  The employee must also see a health care provider within seven days of the first day of incapacity and, for a chronic serious health condition, must visit a health care provider at least twice a year.

Perfect Attendance Award

•    An employer may deny “perfect attendance” awards to an employee who does not have a perfect attendance because of FMLA leave as long as the employer treats an employee taking a non-FMLA leave in the same manner.

Employer Notice Requirements
•    An employer is required to provide employees with a general notice about the FMLA, a notice of eligibility and of rights and responsibilities, and a designation notice.

Employee Notice

•    An employee must follow an employer’s normal and customary call-in procedures for FMLA notification, absent unusual circumstances.

Substitution of Paid Leave
•    An employee electing to use any type of paid leave concurrently with FMLA leave must follow the same terms and conditions of the employer’s policy that apply to other employees for the use of such leave.

Computing FMLA Leave During a Holiday Week

•    Whether an employee is charged FMLA leave for a holiday depends on whether the employee needs to take FMLA leave for a full or partial work week.  An employee taking a full week of FMLA leave during a week containing a holiday will have the holiday counted against his/her FMLA allotment.  An employee taking less than a full week of FMLA leave during a week containing a holiday will not have the holiday counted against his/her FMLA allotment unless the employee was otherwise scheduled and expected to work the holiday.

Medical Certification
•    The Health Insurance Portability and Accountability Act applies to communications between an employer and an employee’s health care provider.  The employer’s representative may contact the health care provider, but that representative must be a health care provider, a human resources professional, a leave administrator, or a management official and cannot be the employee’s direct supervisor.  Further, an employer may not ask the health care provider for information beyond what is required by the certification form.

•    An employer may request a medical certification for each leave year for medical conditions that last longer than one year.

The new regulations and the DOL’s commentary are available at http://www.dol.gov/esa/whd/fmla/finalrule.htm.

New W-4 Form (Employee’s Withholding Allowance Certificate)
The Internal Revenue Service has provided a new 2009 Federal W-4 Form.  An employer is required to use the new W-4 Form for all employees.  An employee who previously provided a W-4 Form claiming exemption from federal income tax withholding must file a new 2009 W-4 Form by February 16, 2009 in order to continue the exemption.  If the employee does not give an employer a new W-4 Form, an employer should withhold as if the employee is single, with zero withholding allowances.

Kevin C. Khasigian has joined the firm as an Associate. Mr. Khasigian will focus on administrative law, civil litigation, bankruptcy and estate planning for the firm.

In 2003, Kevin obtained his Bachelor of Arts degree from Brown University and then went on to complete his Juris Doctorate at the University of the Pacific, McGeorge School of Law in 2007 with great distinction. Mr. Khasigian has studied under U.S. Supreme Court Justice Anthony Kennedy in Salzburg, Austria. In addition, he has put forth great effort to aid the victims of the tragic events that followed Hurricane Katrina as a participant in “Project Katrina”, a program for law students who traveled to New Orleans to assist the Public Defender’s office.

Mr. Khasigian is a native of Elk Grove, CA, and a graduate of Jesuit High School in Carmichael. Wilke Fleury also welcomes Latika Sharma and Steven J. Williamson to the firm. Ms. Sharma, who was born in the Fiji Islands and raised in Stockton, CA, attended the University of California, Berkeley where she received a B.A. in Political Science. She received her Juris Doctorate in 2007 from the University of California, Davis School of Law and joined the firm in May of 2008.

Ms. Sharma’s practice focuses on health care and insurance regulatory matters, medical negligence, hospital liability and employment and labor litigation.

Mr. Williamson received his B.A. in Behavioral Science and Law from the University of Wisconsin-Madison, where he was also born. He received his Juris Doctorate from the University of the Pacific, McGeorge School of Law in 2005. Before joining the firm in 2008, he practiced general civil law in Stockton, CA.

Mr. Williamson’s current practice focuses on medical malpractice defense, hospital liability defense, and the defense of skilled nursing facilities.

Wilke Fleury has welcomed veteran litigator Donald A. Lounsbury to the firm where he will serve as Senior Trial Counsel. Mr. Lounsbury brings more than 30 years of legal experience to the law firm and will specialize in complex litigation defense of individual professionals, healthcare institutions and corporations.

Mr. Lounsbury received his undergraduate degree from California State University, Long Beach, where he was a member of the Blue Key National Honor Society. He then went on to obtain his Juris Doctorate from Western State University College of Law. Mr. Lounsbury has completed more than 200 civil and criminal jury trials, court trials, arbitrations and mediations. In addition, he was awarded the highest possible rating by Martindale-Hubbell based on extensive and confidential attorney peer review. Mr. Lounsbury joins the firm from Orange County’s Herzfeld & Rubin, LLP, where he served as Senior Trial Counsel and Managing Attorney.

A Sacramento jury deliberated less than three hours before returning a near-unanimous verdict in favor of Lodi Memorial Hospital in a medical negligence action. The two week trial in Sacramento County Superior Court pitted Joan Perry, the widow of Stanley Perry, against the hospital and its staff after her husband died suddenly of a ruptured aortic aneurysm during a routine treadmill test one day following admission for sudden onset of chest pain. Mrs. Perry claimed that the hospital and others mismanaged her husband’s care.

Retained by Optima Insurance, the insurance carrier for the hospital, Wilke Fleury partner, David A. Frenznick, successfully argued that the hospital had met and exceeded the standard of nursing care in all aspects of Mr. Perry’s care. Mr. Perry presented with classic signs of coronary artery disease and, prior to the treadmill test, his cardiologist was timely informed by the nursing staff of all pertinent changes in the patient’s condition.

Lodi Memorial Risk Manager, Daleen Murray, praised Wilke, Fleury attorneys after receiving the jury’s verdict. “Your devoted time, expertise and professionalism lead us to the desired outcome of a defense verdict,” she said. “We will most definitely call upon Wilke, Fleury and Mr. Frenznick for our future legal needs.”

After a nine week trial in the Federal District Court in Sacramento, a jury unanimously awarded our client, Pacific MDF Products, Inc., $6,670,185. Pacific MDF manufactures home improvement products, such as baseboards and crown moulding, out of fiberboard at its plant in Rocklin, California. The manufacturing process generates a significant amount of sawdust, which must be disposed of in environmentally sensitive ways. Pacific MDF decided to purchase from Defendants, Advanced Recycling, Inc., Bio-Mass Energy Concepts, LLC and Donald Kunkel, a system which would permit Pacific MDF to burn the sawdust to create both steam heat and electricity to run its plant.

When Defendants were unable to overcome both design and manufacturing defects in the cogeneration system, Thomas G. Redmon and Daniel L. Baxter of our office filed the lawsuit alleging 11 different causes of action, including breach of contract, breach of warranty, fraudulent and negligent misrepresentation, and making false promises. The jury deliberated for less than two days before finding in favor of our client on every cause of action.

Pacific MDF expressed praise for the quality of the representation it received based, not just on the end result, but on the fact that Mr. Redmon and Mr. Baxter exhausted every effort on its behalf to settle the matter in a cost effective manner prior to taking the matter to trial.

The International Journal of Occupational & Environmental Health recently published a letter to the editor authored by David A. Frenznick, who heads the firm’s construction law group.  The letter, entitled Courtroom Impact of the ACOEM Statement on Mold, comments on a long-standing medical-legal debate.

Mr. Frenznick represents owners, developers and contractors in residential and commercial construction disputes.

The firm is pleased to announce that Megan Lewis and Trevor Stapleton, both formerly associates, have been made partners in the firm.

Ms. Lewis joined Wilke Fleury in 2002 after graduating from the University of the Pacific, McGeorge School of Law. Her practice areas include representing businesses in all aspects of bankruptcy proceedings and assisting businesses with corporate formation and litigation. She currently serves as Treasurer for Women Lawyers of Sacramento; Vice Chair of the Bankruptcy and Commercial Law Section of the Sacramento County Bar Association; Board Member of California Women Lawyers; and is a member of the Junior League of Sacramento. "

Mr. Stapleton, who joined the firm in 2005, is a transactional attorney advising businesses, professionals and entrepreneurs in all aspects of strategic planning including taxation, formation, sales and mergers, business transactions, asset protection and general business law. His practice also includes estate planning, probate and trust law, tax controversies and audits, as well as advising non-profit organizations. He received his Juris Doctorate and certificate in Dispute Resolution from Willamette University College of Law and his LL.M.in Taxation from the University of Washington School of Law. He is admitted to practice in both Washington and California. He also serves on the Board of Directors and is the Treasurer of the Down Syndrome Information Alliance, a Sacramento non-profit organization providing resources and support for individuals with Down syndrome and their families.

Wilke Fleury Managing Partner, Michael Polis, said, "Megan and Trevor have been recognized for their outstanding service to our clients and to the community. We are delighted to welcome them as new partners and look forward to their long and successful affiliation with our firm."

Michael Polis has been named the firm’s managing partner. Mr. Polis, who has been with the firm since 1994, takes over the position from Jim Krtil. Mr. Polis received his law degree from the University of the Pacific, McGeorge School of Law and his undergraduate degree in economics from the University of California, Los Angeles.

Mr. Polis’ practice focuses on advising Knox-Keene health care service plans and health insurers with compliance-related issues. In addition, he advises insurance agencies and administrators with respect to compliance-related matters. He also advises dentists, physicians, chiropractors and optometrists with respect to corporate formation and tax-related matters. Mr. Polis has written numerous articles on health care, insurance and managed care compliance issues. He has also presented at the California Association of Dental Plans on Knox-Keene compliance-related issues.

Mr. Polis is a member and former chairman of the Health Care Law Section of the Sacramento County Bar Association. He is licensed in California as a Certified Public Accountant and is a member of the California Society of Certified Public Accountants. He is the Chairman of the Board of Fresh Producers, Inc. and former chair of Goodwill Industries of Sacramento Valley, Inc. In addition, he teaches cost accounting, business and corporate law at the University of California, Davis Extension Program.

Former legislator, Rick Keene, has joined the firm as Of Counsel. Keene served in the Assembly for three terms where he rose to assume several Republican leadership positions, including Republican Whip and Vice Chair of the Committee on Water, Parks and Wildlife. He also served as the lead Republican on the Assembly Budget Committee. Prior to being elected to the Assembly, Keene served as a councilman and mayor to the City of Chico, CA.

Keene, who obtained his B.A. from CSU Chico, received his Juris Doctorate degree from Cal Northern School of Law and practiced law in his Chico law firm for 15 years before his election to the Assembly. "Our firm is excited to continue to add colleagues with tremendous and varied backgrounds, such as Rick Keene,” said Michael G. Polis, Managing Partner. “Our clients and future clients will benefit from his local and state government experience, legal knowledge and counsel. "

Third year of law school is typically reserved for long weekends, fretting over the bar exam, finding a job, and rounding out a legal education that, for the first two years, is primarily confined to the classroom.  Like many of my peers, I longed for a practical supplement to my legal education. Specifically, I wanted to get involved and make an impact in a legal forum where I would experience something new, different, and unexpected.  The Katrina-Gideon Project, an immersion program guided by the Sacramento Public Defender’s Office and Pacific-McGeorge School of Law, would present this and much more to fifty law students who traveled to New Orleans, Louisiana in December 2006 to offer assistance to the New Orleans Public Defender’s Office in the aftermath of Hurricane Katrina.

Up until the fall of 2005, New Orleans was primarily known for the Bourbon street experience, a haven for conventions, and a place to indulge in southern delicacies, namely beignets, po’ boys, muffaletta sandwiches, and, of course, Pat O’Brien’s world famous hurricanes.  While New Orleans still conjures up images of joyful French Quarter revelers, Hurricane Katrina and its disastrous effects presented the world with a new image of New Orleans—lack of preparedness and a legal, political, and social infrastructure in disarray.  Like other governmental entities, the New Orleans Public Defender’s office was struggling—case demand was growing due to rising crime and arrest rates, attorneys were moving to other states, and defendants were facing extended waiting times, sometimes without knowing what charges faced them.  As a result, the Public Defender’s office needed assistance with interviewing defendants, working up case files, identifying preliminary legal challenges and drafting pre-trial motions.  The Katrina-Gideon Project would help to alleviate some of these problems, while at the same time offering students like me an opportunity to engage their legal knowledge, help a suffering city, and face several moral and legal issues at a very young point in their legal careers.

The Arrival – Expect the Unexpected
I arrived in New Orleans without having any practical criminal experience.  Sure, I had taken criminal law and criminal procedure, but the Katrina-Gideon Project was my first foray into interviewing, counseling, and applying the criminal foundations I had learned during law school.  Upon landing in New Orleans, my mind raced, thinking about casebook lore… Who was I going to defend?  Did the evidence still exist against my client?  Did the officers give proper Miranda rights?  Was my client innocent?  Man… I was preparing to be (gasp!) a lawyer.  Further, I had no idea what to expect.  There were rumors of lack of preparedness and conflicts between the New Orleans Sheriff and New Orleans Public Defender’s Office.  Put simply, I was scared, excited, frantic, and optimistic upon landing at Louis Armstrong International Airport.

Students involved with the Katrina-Gideon Project were placed into seven groups.  Some of the groups would be going to the local parish prisons to interview prisoners and work up case files, while others would go to the outlying prisons to interview defendants who had been relocated during Hurricane Katrina.  All would be expected to do their best and assist the public defender’s office in any capacity required.  I was fortunate to be placed in the group led by Paulino Duran, the head Sacramento Public Defender. Paulino led my group to Angola State Prison to interview inmates who had been transferred there from New Orleans during Hurricane Katrina.

While I was thankful to be in the group headed to Angola State Prison, I was not excited about waking up at 4:30 a.m. to catch the train to Angola. What I didn’t know, and what Paulino explained on the way to Angola, was that Angola was one of the last plantation-style prisons in the U.S. Specifically, some of the inmates work in the fields during the day and earn two cents an hour for their efforts.  Other inmates worked in the processing plant—Angola is a self-sufficient prison with a processing plant and cannery—while some were required to be in their prison wings for 23 hours a day.  Paulino also explained that Angola was the largest prison in the U.S. in terms of inmate and acreage.  Angola also provided the setting for many highly publicized inmate crimes, escape attempts, as well as being the location du jure for many Hollywood motion pictures, such as Dead Man Walking and Monster’s Ball.

As we approached Angola, the first thing we encountered was the security gate. It was a mammoth over-crossing, and the police detail was extensive. An employee of the prison was assigned to our group, and he led us to where our clients were being held.  We approached our building, a seemingly normal prison building with a security checkpoint, an appeals chamber, and visiting rooms. We entered the security checkpoint and the employee led us to the room where the Orleans Parish Prisoners were being held. Upon entering the room, we were astonished to see about 15 prisoners sitting in rows to our immediately left. Many were our clients—but, much to our surprise, many were not.

My first client was a 40 year-old man arrested for cocaine possession.  He was a gentle man with four children and a steady job. His case was baffling because he had been incarcerated for over two years for possession of .06 grams of cocaine.  In addition, his bail had been continuously increased, with nary a justification.  At the outset, I asked him the questions I had prepared the night before. I wanted to know everything about the alleged crime; where the police were, where he was standing, was it daytime, where any witnesses available?  I also wanted to know about his background—did he have any business references, ties to the community, any prior convictions, was he on parole or probation, did he know how to read, was he taking any medication, was he a U.S. citizen, etc.  My goal was to draft the best possible case memorandum so that the New Orleans P.D. would be prepared for the next court appearance.

My second client was not on my scheduled list, and I did not have a case file related to his alleged criminal charges. As such, I had not prepared any questions, and did not know anything about this individual. He posed a unique challenge because he was charged with homicide and, up until that point, I was under the impression that we would only be dealing with relatively minor felonies. I was a little startled when he told me what crime was charged with, but I just applied the same line of questioning as the first interview.  I asked him about the crime, but because I didn’t have the case file, the questioning had a different tone.  I wanted to know excruciating details.  We wanted to know all of the parties involved, the facts of the underlying charge, was there any seized evidence, had he made any statements, and other questions relating to the basic nature of the charge.

Following the preliminary questions relating to my second client’s alleged crimes, my partner and I took some time to speak with him about everything from the Saints to world politics. This was by far the most engaging and important part of the trip for me. This simple dialogue—void of scripted questions—was what made me to relate to who my client was, and why in fact I wanted to help him.  He was a person just like me.  He had political views just like me.  He was an avid football fan like me, and rooted on Sundays with same zealousness as I did.

Following our interviews, I wrote memoranda to the New Orleans Public Defender’s office summarizing my client interactions and identifying the constellation of legal issues presented in my meetings.  I also made several recommendations regarding case posture and preliminary motions that should be filed.  It took me many days to complete the case summaries and recommendations, but I believe I prepared the public defender while advocating for my clients.  I also learned valuable lessons relating to litigation and the collaborative process.  For instance, I worked with some amazing lawyers, and was able to produce a written document that helped my clients during the disposition of their cases.  In addition, while interviewing my clients and drafting my case memorandum I learned about the basics of litigation and how the “system” actually worked.  I like to say I went to “litigation bootcamp” as it was necessary to get up to speed regarding statutory filing and hearing requirements, supporting paperwork, and making sure my client’s rights were preserved (or if they were violated).  Although couched in criminal pre-trial litigation, the awareness and exposure to filing deadlines, required documentation, and general pre-trial positioning continues to lend itself to my civil practice on a daily basis.

I arrived in New Orleans with lots of book knowledge, but no practical criminal experience. I hoped for a challenging (morally, emotionally, intellectually), eye-opening, influential experience, and I think I received just what I expected—and maybe even more.  As a member of this unique project, I was able to view a ravaged area, participate in the interviews of two men accused of crimes, and have spirited conversations with my peers centering around capital punishment, the criminal justice system, and southern hospitality.  Although all of the aforementioned objectives and experiences were important to me as a member of Katrina-Gideon Project, I think the most important aspect is that I was given an opportunity to help rebuild a historic city and aid individuals at a time when all appeared lost.  For that, I think I am a better person, and lawyer.

In the recent U.S. Supreme Court case of Sprint/United Management Co. v. Mendelsohn, the Court left the door open for plaintiffs in employment cases to introduce damaging evidence that other employees were also harassed or discriminated against. In Sprint, 51 year-old employee Ellen Mendelsohn brought an age-discrimination suit against the company after she was laid off in an ongoing company-wide reduction in force. Mendelsohn wanted to introduce testimony of other former Sprint employees who claimed that their supervisors had discriminated against them too because of their age (“me too” evidence). None of these other witnesses worked in the same department with Mendelsohn, none of them ever worked under any of Mendelsohn’s supervisors and none of them had ever brought a lawsuit alleging age discrimination. Rather than ruling that “me too” evidence either is or is not admissible, the Court held that there is no bright line rule either permitting or excluding such evidence, but that such evidence must be assessed on a case-bycase basis. In other words, each court will be allowed to determine whether such evidence will or will not be allowed in a particular case and the parties will have little or no indication of which way the court will rule before the case actually goes to trial.

How “Me Too” Evidence Impacts Employers
What this means for employers is that “me too” evidence may be admissible against the company in a harassment or discrimination suit. Thus, a plaintiff in a discrimination case may attempt to assemble a large group of disgruntled employees to come to trial and testify that they were also discriminated against, making it much easier for the plaintiff to prove his/her own case by inference. And, since the admissibility of “me too” evidence will be determined on a case-by-case basis, it may be harder for employers to get cases dismissed at an early stage.

How Employers Can Protect Themselves
The prudent employer will try to avoid harassment/discrimination claims in the first place by establishing strong anti-harassment/discrimination policies, providing appropriate supervisor training on those policies and taking every report of harassment/discrimination seriously. In the event a disgruntled employee testifies that he/she was the subject of harassment or discrimination, the employer may be able to diffuse such testimony by demonstrating that the employee never complained while they were employed or that the company took immediate and effective action upon receiving a complaint.

With the declining economy, bankruptcy filings are on the rise. You need to be prepared in case one of your employees files a bankruptcy. There are two types of bankruptcy cases that are commonly filed by individuals. An employee may file a Chapter 7 bankruptcy and attempt to discharge (wipe out) his or her debts. If an employee’s income is too high or an employee has assets that need protection (or for a variety of other reasons), an employee may file a Chapter 13 bankruptcy and establish a repayment plan for his or her debts over 5 years. When an employee files bankruptcy (either Chapter 7 or Chapter 13), an automatic stay is created which prohibits creditors from pursing any actions against the employee to collect a debt or pursue a claim. Typically, unless your employee owes you money for some reason (possibly an advance on income), you will not receive notice of the bankruptcy from the bankruptcy court. However, your employee may choose to tell you that he or she has filed bankruptcy. You will likely be notified if there is an ongoing wage garnishment, because a wage garnishment or levy must stop as a result of the protection of the automatic stay. Once you receive notice of an employee’s bankruptcy, you should immediately stop withholding wages pursuant to a garnishment order until further notice.

Your employee may need to take some time off of work in order to meet with his or her bankruptcy attorney. In addition, after the filing of a bankruptcy, your employee will need to attend a hearing known as a 341 meeting of creditors. The employee will be examined by a bankruptcy trustee concerning his or her assets, liabilities, income and expenses. These hearings can be continued multiple times by the bankruptcy trustee. Your employee has no control over the date and time that these hearings are set. In addition, your employee has little ability to reschedule these hearings. When your employee needs to take time off work to attend these hearings, you should consult your policies concerning employee absences. For example, if you offer PTO (“paid time off”) or time off for personal days, your employee may use this time to attend the bankruptcy hearings. You cannot discriminate against or terminate an employee because he or she filed for bankruptcy. (You also are prohibited from discriminating against job applicants simply because they have filed for bankruptcy protection in the past.) If you have an employment contract with an employee who has filed for bankruptcy and you want to terminate the contract while the bankruptcy case is open, you should consult a bankruptcy attorney because you would need to obtain the court’s permission to get relief from the automatic stay before you terminate the contract.

Be mindful of your employee’s right to privacy. Although bankruptcy petitions are public documents, financial information concerning your employee (such as garnishments) should be kept private between you and the employee. Also, financial records, such as garnishment information, should be maintained separately from personnel records and only accessed on a need to know basis.

If you have a claim against an employee or former employee who files bankruptcy, you may be able to file a complaint to ensure that the debt isn’t discharged through the bankruptcy depending on the type of claim. For example, if you have a claim against an employee for misappropriation of trade secrets or embezzlement, those debts may be nondischargeable. However, you have to file a complaint within 60 days after the meeting of creditors. If you have this situation arise, consult a bankruptcy attorney immediately.

Several high-profile class action lawsuits have been settled recently, with employers agreeing to pay millions to employees for missed meal and rest breaks. In the lawsuits, employees claimed that their employers did not allow them to take meal and rest breaks or to take them in a timely fashion. Generally, these types of class action lawsuits seek compensation for all affected employees for a four year period preceding the date the lawsuit is filed. In order to avoid a similar fate, it is important that you understand and consistently apply the rules regarding meal and rest breaks.

Rest Periods
In California, non-exempt employees must be given a 10 minute rest period for every four hours of work. The rest period is to be taken in the middle of each four hour work period as far as is practical. A rest period need not be provided for employees whose total daily hours of work are less than 3.5 hours. The 10 minute rest periods are considered time worked and must be paid. The employee may not be required to perform any work during a rest period. The rest periods may not be waived. If the employer fails to provide the rest period, the employer must pay the employee one additional hour of pay at the employee’s regular rate for each work day that a rest period is not provided. Although an employee is not required to take his/her rest period, the employer must “authorize and permit” the rest period. Failing to take into the account the need for rest periods when scheduling and assigning tasks may be deemed a failure to permit the rest period.

Meal Periods
Non-exempt employees who work more than five hours per day must be provided with a meal period of not less than 30 minutes. The meal period must begin before the end of the fifth hour of work. If the employee works more than five hours per day, but less than six hours per day, the meal period can be waived by mutual consent. If the employee works more than 10 hours in a given day, a second meal period of not less than 30 minutes must be given. If the hours worked are more than 10 hours per day, but less than 12 hours, the second meal period can be waived by mutual consent only if the first meal period was not waived. If the employer fails to provide the meal period, the employer must pay the employee an additional hour of pay at the employee’s regular rate. However, in contrast to rest breaks, employers have an affirmative obligation to ensure that meal periods are taken as required and to keep proper records with respect to each employee. Accordingly, it is important that you require your employees to sign in and out for their meal breaks.

The meal period may be unpaid unless the employee is not relieved of all duties. An on-duty (paid) meal period may be permitted only when the nature of the work prevents the employee from being relieved of all duty and when there is a written agreement between the employer and the employee for an on-duty meal period. If the employer requires the employee to remain at the work site or facility during the meal period, the meal period must also be paid.

What You Can Do To Protect Yourself
Given the magnitude of the risk associated with claims for missed meal and rest periods, many employers are now proactively addressing this issue. There are several things you might want to consider doing to protect against claims for missed meal and rest periods. First, you should include provisions in your Employee Handbook regarding meal and rest periods, informing your employees in writing that such breaks must be taken. Second, you may want to include a stand alone acknowledgement form, similar to your at-will acknowledgement form, in which employees certify that they have read and understand the company’s meal and rest period policies and that they agree to abide by those policies and take all required meal and rest periods. Finally, you may wish to include a statement on your employees’ time sheets, which the employee signs, certifying that they have worked all hours indicated and that they have taken all required meal and rest breaks for each day worked. While none of these methods guarantees you will not face a missed meal or rest period claim, they will provide you with the best defense possible should such a claim arise.

As most of you know, California’s Fair Employment and Housing Act (“FEHA”) prohibits discrimination and harassment on the basis of sex, race, religion, color, national origin, ancestry, disability, medical condition, marital status, age, pregnancy, and sexual orientation. FEHA also prohibits retaliating against an employee for opposing or complaining about discrimination or harassment.

For the past decade, both the California Legislature and the California Courts have grappled with the issue of whether individual supervisors or co-workers can be held personally liable for discrimination, harassment or retaliation. Ten years ago, the California Supreme Court held that individuals may not be held personally liable for discrimination, and that liability for discrimination instead lies only with the employer. For example, assume that Company X is found to have terminated an employee because of her race. Company X can be held liable for discrimination. The supervisor who made the termination decision, however, cannot be held liable.

In contrast, FEHA specifically provides that individual supervisors and co-workers can be held liable for harassment. So assume that Supervisor Y, who works for Company X, is found to have sexually harassed an employee. In this case, Company X and Supervisor Y can both be held liable for harassment.

What about retaliation? For the past five to ten years, most courts that have considered the issue have held that individuals can be held liable for retaliation. On March 3, 2008, however, the California Supreme Court held that individuals cannot be held personally liable for at least some forms of retaliation. Here’s an example of what this means. Assume an employee of Company X complains to the HR Department that he believes he was passed over for a promotion because of his sexual orientation. The HR Department discusses the issue with the employee’s supervisor, who is angry to learn of the employee’s complaint. One month later, the supervisor fires the employee for performance issues. If the employee can prove that the performance issues were pretextual, and that he was actually fired because of his discrimination complaint, Company X may be liable for retaliation. The supervisor, however, may not be held personally liable.

What if the employee in the above example had instead complained to the HR Department that he was being harassed based on his sexual orientation? Would the result be different? Maybe. That’s because the California Supreme Court stated in a footnote that it was expressing no opinion on whether an individual who is personally liable for harassment would also be personally liable for retaliating against someone who reports that same harassment. Whether or not personal liability exists in this situation is thus a question that will have to be answered by another court or by the California Legislature.

Note that there are 7 Justices on the California Supreme Court, and 3 of them dissented. The dissenting Justices ended by opining that the California Legislature should clarify FEHA to specify precisely whether individuals can be liable for retaliation, and, if so, under what circumstances. It remains to be seen whether the Legislature will take that advice.

While this new decision is a boon to individual supervisors, it does nothing to change an employer’s liability for retaliation. Employers thus need to remain vigilant about promulgating and enforcing policies against discrimination, harassment, and retaliation.