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Entries in discrimination claims (13)

Wednesday
Mar222017

Whacky Employment Claims: Who's Whackier? Management or the Employee?

Lawyer for EmployerEmployment Defense

by Nicole Kamm

818.907.3235

 

 

As employment defense attorneys, we see many strange situations arise in the workplace.

The question is, how prepared are you as an employer to handle the wackiness that may potentially arise when your employees make bizarre requests, do odd things, or intentionally violate company rules? And what if those oddball employees happen to be your managers responding to perfectly legitimate claims…?

It's time to illustrate with another Whacky Employee Claims blog. We hope you will find the following employment situations educational, if not entertaining.

 

#5:  Milking Punctuation Errors for All They’re Worth

Seventy-five milk truck drivers in Maine may be getting a $10 million pay day. Three of those drivers filed a class action lawsuit in 2014, claiming Oakhurst Dairy failed to pay them four years of overtime wages.

The problem arose not from a miswritten company policy or employment agreement, but from a state law (known as Exemption F) identifying which employees were exempt from overtime:

“The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of . . .”

One more comma after “packing for shipment” would have distinguished packing and distributing as separate activities. But as the law is written without the serial or “Oxford comma” as it is sometimes known, the Plaintiffs were able to argue their duties fell outside Maine’s exemption law and they were entitled to overtime pay.

A trial court focused on the spirit of the law, and awarded partial summary judgment to the employer. But an Appellate Court disagreed, stating:

Given that the delivery drivers contend that they engage in neither packing for shipment nor packing for distribution, the District Court erred in granting Oakhurst summary judgment as to the meaning of Exemption F. If the drivers engage only in distribution and not in any of the stand-alone activities that Exemption F covers . . . the drivers fall outside of Exemption F’s scope and thus within the protection of the Maine overtime law.

Employer Tip: You don’t have much say in how state and federal laws are written, but when something seems unclear or ambiguous, consult counsel. Additionally, be ultra-careful in how your company policies and employment agreements are written and stay apprised of frequent changes in employment laws. 

 

#4: Simply Not Suited

Jessica Zelinske was an ad accountant at Charter Communications in Minnesota. She was also very attractive, and when she won a modeling gig to pose for Playboy in a 2011 "Hot Housewives" issue, Zelinske contends she got the “o.k.” from her boss.

Zelinske alleged her supervisor assured her she would not be fired if she posed nude, but once the magazine hit sales racks, she received a “Corrective Action Report” notifying her of her immediate termination. The company informed her: "You have violated Charter's professional conduct policy by making the personal choice to pose nude in a well-known publication."

Zelinske sought $150,000 for emotional distress, compensatory damages and legal expenses.

Employer Tip: Management should be familiar with the implications of all company policies to avoid making promises to employees they can't keep. 

 

#3: The Importance of Being Earnest (in Record-Keeping)

John Sederquist and Brenda White sued employer Steven Miller for unpaid overtime. This bothered Miller immensely because a.) He was pretty sure he paid all of his workers all monies owed on time, and b.) He couldn’t remember ever hiring White. So he did some digging.

Some of his other employees knew White, but no one ever remembered hiring her or actually working with her. But she did appear on his payroll for several months a few years before she jointly filed the lawsuit. For those several months, she was paid over $21,000 for work she never did. Suing for unpaid overtime was just salt in the wage and hour wound.

As it turned out, White and Sederquist were romantically involved. At the time of White’s supposed employment, a coordinator who is currently serving 20 years’ probation for thievery was handling Miller’s payroll. Miller decided to litigate, White cracked under pressure during deposition, and both sides dropped the lawsuit.

Employer Tip: If possible, take steps to enforce some checks and balances when it comes to handling payroll. While litigation can be costly, pursuing a case all the way is sometimes the way to go. 

 

#2: "I Dreamed a Dream" (of not being harassed for my weight)

Laura Ziv filed a $6 million lawsuit against her boss and perfumer employer, alleging verbal assaults regarding her looks, and in particular, her weight. Ziv claims her supervisor compared her to Britain's Got Talent star Susan Boyle, and sometimes called her "Fatty" in front of coworkers. 

Additionally, Ziv claims her supervisor wanted her to develop a competing perfume brand with him, while on company time. When she refused a second time, her supervisor removed her from the company's biggest account and took away a promised bonus. Ziv took a medical leave for high blood pressure and was threatened with termination. She claimed she suffered a brain hemorrhage due to stress.

Employer Tip: Comments regarding an employee’s weight or appearance are generally inappropriate, and could potentially lead to hostile work environment claims. Ensure entire staff knows they may report such incidents to people other than their direct supervisors, and that inappropriate remarks will not be tolerated. 

 

#1: It's a Tough Sell

Think you've heard the last of the Wells Fargo fake accounts scandal? Think again. A class action lawsuit by former employees alleges Wells Fargo fired them for ethical behavior – i.e., for refusing to meet sales quotas by opening bogus additional accounts for bank customers.

Alexander Polonsky and Brian Zaghi represent a class of Wells Fargo current and former employees over the past ten years, who may have been terminated, demoted, or retaliated against for not meeting their sales quotas. They allege employees are pressured into coercing family members and friends to open accounts to meet quotas, and were required to work "beyond a typical work schedule" without compensation – or they were threatened with demotion and termination. Plaintiffs seek $2.6 billion, "and possibly more."

Employer Tip: It is important to “walk the walk.” Comply with the law, and don't encourage or incentivize management or employees to act in violation of the law.

 

Nicole Kamm is a Shareholder in our Employment Practice Group

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

 

Wednesday
Mar082017

The Customer Is (Not) Always Right: An Employer's Duty to Protect

Discrimination Claims Prevention 

by Amy I. Huberman

818-907-3014

 

Everyone is entitled to their opinion, and in this political climate, it seems as though more people are comfortable voicing those opinions, even if they may offend someone.

Although free speech is a primary pillar of our democratic heritage, in the employment law context, that particular right may cause liability for the employer.

For example: 

Shortly after the November election, an airline passenger was permanently banned from flying Delta Airlines, for his expletive-ridden pro-Trump/anti-Clinton rant before takeoff. Though the flight crew allowed the passenger to continue on his journey, corporate saw the viral video shot by a fellow passenger and clipped the disruptive passenger’s wings:

We must stay true to Delta’s core values and treat one another with dignity and respect. We also must remain committed more than ever to the safety of our customers and our crew members. We will not tolerate anything less.

In another instance, a Michael’s retail customer went on a tirade and claimed she was discriminated against by African American employees when asked if she wanted to purchase a shopping bag. Like Delta Airlines, the retailer’s corporate office also released an official statement:

At Michaels, we do not tolerate discrimination or racism of any kind against our team members or customers. We regret that our customers and team members were affected by this unfortunate incident and are grateful for the leadership of our store team in working to resolve it without further escalation.

Even more recently, a Walmart customer in Texas said to a store employee, “I know you ain’t leaving. I know you’re here to stay. Y’all should go to your own countries and fix up your own countries.” A fellow Walmart employee filmed the incident. The employee being berated by the customer responded that she didn’t want to hear anymore, and then had her supervisor take over. That employee later expressed concern for her job, should she share the video with the media. Walmart has yet to respond officially.

Thus far, xenophobic incidents (in the employment context) in California aren’t as rampant. But if, and when, something similar does occur, here’s what employers should know:

California Employees Protected Under FEHA

The California Fair Employment and Housing Act protects employees from discrimination, retaliation, harassment and bullying. In 2016, several FEHA amendments expanded protections for job applicants and employees. The amendments require employers to implement a complaint procedure where employees can safely report harassment, discrimination or bullying behavior without fear of retaliation. 

FEHA also mandates that employers must take steps to protect its employees from third parties – including patients, clients and customers; vendors; delivery personnel; or others. Employers cannot turn a blind eye when an employee in the workplace is subjected to harassing, discriminatory or disrespectful conduct based on the following real or perceived characteristics: 

  • Race
  • Color
  • Age (over 40)
  • Gender (identity, expression)
  • Sexual orientation
  • National origin, ancestry or citizenship
  • Religion
  • Marital status, domestic partner status
  • Military or veteran status
  • Sex, pregnancy, childbirth, breastfeeding, related medical conditions
  • Physical or mental disability or conditions
  • Genetic information

FEHA requires employers notify its employees of complaint procedures. In addition, when a complaint by an employee is submitted, that complaint must be: 

  • Responded to in a timely manner
  • Kept as confidential as possible
  • Investigated impartially and as soon as possible

Employers should also:

  • Document and track the investigation’s progress
  • Provide options for remedial actions and resolutions
  • Conclude the investigation in a timely manner 

Although the “customer is always right,” a customer harassing and discriminating against an employee is wrong. Employers should update all policies and procedures to ensure the actions of third parties, such as the conduct described above, does not lead to costly and unnecessary litigation. 

Amy I. Huberman is an Employment Defense Attorney.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Dec292016

Employer Responsibilities re Mental Health Conditions

Wage and Hour Defense Attorney

 

by Sue M. Bendavid & Tal Burnovski Yeyni

 

The Equal Employment Opportunity Commission recently issued a “User-Friendly Document” explaining the rights of job applicants and employees with mental health conditions. In doing so, the EEOC has confirmed that individuals with such conditions are protected from discrimination and harassment.

Employment Law Mental Health Disability

As noted, employers cannot fire, deny a job, deny a promotion or force an employee to take leave because of a mental health condition (there are exceptions when employees pose a “direct threat” to safety or cannot perform their jobs). The guidelines remind employers of the obligation to provide reasonable accommodations that would enable employees perform their jobs.

In our work advising and counseling employers, we often encounter employers who struggle with how to properly respond to disabled employees.

Whether it is an employee’s injury, mental health condition or stress, employers face confusion as to their legal obligations. Since failure to communicate and/or accommodate may sometimes result in costly litigation, we are providing a few basic guidelines to assist employers when facing similar issues.

Do not discriminate against employees with a mental or physical health condition:

Employers do not have to hire or retain employees in jobs they cannot perform, or employ people who pose a “direct threat” to safety (based on objective evidence, not merely myths and stereotypes). However, firing an employee or rejecting an applicant with a disability (whether physical or mental) is prohibited, unless the employee or applicant cannot perform the job with reasonable accommodation.

For example: Jane notified her employer she was depressed and needed two weeks off. Her employer believed depression was not a “real disease” and rejected Jane’s request without further discussion. When Jane failed to show up because of her condition, her employer fired her for unpermitted absence.

The employer’s actions in this scenario were potentially unlawful. When Jane gave notice of her mental condition and asked for accommodations in the form of time off, her employer was required to engage in an “interactive dialogue” (explained below) rather than rejecting her request for time off and then terminating her employment.

Even if you don’t believe an employee’s health condition and request for accommodation are legitimate, you must at least engage in an interactive dialogue. Under some circumstances (e.g., if the need for an accommodation is not obvious), you can ask the employee to provide reasonable medical documentation to confirm the existence of the disability and the need for reasonable accommodation.

Timely engage in “interactive dialogue” with the employee, even if the employee does not “officially” ask for accommodations:

This can be tricky. Under California law, an employer is required to initiate the interactive process when: (1) the employee requests an accommodation; or (2) the employer otherwise becomes aware of the need for an accommodation through a third party or by observation.

For example: Robert was cleaning a window when he fell off a ladder and hurt his hand. Emily, Robert’s supervisor, witnessed the incident. The next day, Robert came back to work with bandages on his hand. Robert never asked for an accommodation but was struggling with his usual manual tasks. As Robert never asked for an accommodation, Emily assumed Robert did not require one.

Emily assumed wrong. Since Emily witnessed the incident and saw Robert’s bandages she was on notice regarding his possible need for accommodations. Even if Robert did not need accommodations, it was Emily’s duty, as the employer, to engage in the interactive process with Robert to determine whether accommodations could be provided.

Even if the employee is not eligible for protected time off under the Family Medical Leave Act or California Family Rights Act, consider time off as reasonable accommodation:

Family and medical leave laws generally cover employers with 50 or more employees. However, even if you are not a covered employer, you may be large enough and must consider whether protected time off can be provided as a reasonable accommodation (See also 2 CCR 11065(p)(2)(M)).

Don’t rely on the undue hardship defense:

Generally, employers are not required to accommodate a disabled employee or applicant if the accommodation would cause an “undue hardship” to the employer. The term “undue hardship” generally means an accommodation that is unduly costly, extensive or substantial, or that would fundamentally alter the nature of the business’s operation. (See definition and factors to consider in 2 CCR 2 11065(r))

However, employers are advised to use the “undue hardship” defense narrowly and only when the accommodations might place extensive financial burden or would prevent the ongoing operation of the business. Further, employers should engage in the interactive dialogue before concluding an undue hardship exists.

For example, an applicant with a severe vision impairment applies for employment with a small market that has only four other employees. The applicant requires assistance to work the register by having another employee present at all times. The business in question would not have to provide the accommodation if, for example, it could not afford the cost of the additional staff or could not afford the cost of remodeling to accommodate two employees at the same time. (From California Department of Fair Employment Housing guidelines).

Keep an employee’s mental or physical health condition confidential:

Medical information that employers obtain regarding the medical or mental conditions or history of an employee or applicant must be maintained in separate medical files and kept confidential. The employee’s medical information may be discussed only under the following circumstances:

1. Supervisors and managers may be informed of restriction(s) on the work or duties of employees with disabilities and necessary reasonable accommodations; and

2. First aid and safety personnel may be informed, where appropriate, that the condition may require emergency treatment; and

3. Government officials investigating compliance are to be provided relevant information on request. (See 2 CCR 11069(g))

Document, Document, Document:

We cannot emphasize this enough. A little documentation can go a long way.

When you meet with an employee as part of the interactive process, prepare a written summary of the meeting and indicate the reasonable accommodation options discussed. If you decide to grant the employee’s request, document that as well. If you deny the employee’s request because of undue hardship, put that in writing and explain the reasons for the denial. You should invite the individual to further engage in the interactive process and keep the door open to other options. In fact, any change in accommodations should be in writing.

Bottom line:

A little communication and documentation can go a long way and prevent costly litigation. Don’t rely on stereotypes or your personal knowledge and beliefs when an employee requests accommodations or gives notice of medical or psychological conditions. Meet with the employee, discuss his/her restrictions and discuss possible accommodations, if necessary.

As always, if you have questions or concerns regarding your obligations as an employer, contact an attorney in our Employment Practice Group: 818-990-2120.

Sue M. Bendavid and Tal Burnovski Yeyni are  Employer Defense Attorneys at our Firm. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Tuesday
Dec202016

California Employer Compliance 2017

Lawyers for Employers

by: Lewitt Hackman's Employment Practice Group

818-990-2120

 

There have been significant changes to state and federal laws in 2016 affecting employers of all sizes and in many industries. We'd like to help our clients stay apprised of some of the more critical changes by reminding all of the important dates below. Except where otherwise indicated, new laws and regulations go into effect as of January 1, 2017.

 

Federal Minimum Salary Threshold

A federal court blocked the Department of Labor's Final Rule with an injunction in late November. As a result, the minimum salary threshold required for overtime exemptions that was to be met December 1, 2016 no longer applies. This may be a temporary reprieve for employers, as the DOL recently filed a Notice of Appeal.

In the meantime, employers should ensure they meet all state and local overtime exemption requirements.


Affordable Care Act

IRS Affordable Care ActUnder the Affordable Care Act, employers must provide employees forms 1094-B (Health Coverage) and 1094-C (Employer-provided Health Insurance Offer and Coverage to Employees) by March 2, 2017.

Information reporting via Forms 1094 and 1095 with the IRS is February 28, 2017 (hard copies) or March 31, 2017 (electronic filing). 

 

New I-9 and Immigration Protections

Employment I-9A new I-9 Form (Employment Eligibility Verification) was released in November. Employers must begin using the new form for new hires by January 22, 2017

Federal law prohibits employers from asking for additional documents other than those required by the I-9. A new California law (Senate Bill 1001) prohibits this practice as well -- violations may incur penalties of up to $10,000. 


California Fair Pay Act

Fair Pay EthnicityThe Fair Pay Act prohibits employers from paying employees of opposite sex different wages for substantially similar work. Any pay differentials must be based on seniority, merit system, quantity or quality of production, or other bona fide factors such as education or experience. Additionally:

Senate Bill 1063 amends and expands the different rates of pay prohibitions to employees of another race or ethnicity.

Assembly Bill 1676 clarifies that prior salary history cannot justify compensation disparities. 


Criminal Background Checks

Background Checks in CaliforniaCalifornia: Employers are prohibited from asking about arrests or detentions that did not result in a conviction, or about those incidents that have been judicially sealed or dismissed. Assembly Bill 1843 expands protections to protect job applicants with juvenile criminal histories as well. 

Los Angeles: Ban the Box, or the Second Chance Initiative, prohibits employers with ten or more employees from including questions about criminal history on job applications. Employers may ask about criminal history AFTER a conditional offer of employment is made to the applicant. There is a process involved regarding the consideration of such information, written notices, maintaining records; and notifications that must be included on all job posts. Read our Ban the Box blog for more information. 


Payroll, Wage Statements & Notices

Employee NoticesCurrently, employers cannot discriminate or retaliate against employees who are victims of domestic violence, sex assault or stalking – and cannot prohibit employees from taking time off to seek treatment or legal actions for these crimes. Assembly Bill 2337 now requires employers to provide written notice of their employment rights should they become victims of these crimes to all new hires and to other employees as requested. Employers are required to comply with the notice requirements when the Labor Commissioner develops a form notice, on or before July 1, 2017.

Employers who must notify employees of eligibility for federal Earned Income Tax Credits (EITCs) must also notify employees of California EITCs per Assembly Bill 1847.

Employers are not required to track hours worked for exempt employees on itemized wage statements. The clarification comes under Assembly Bill 2535.

Employees of Temporary Staffing Agencies must be paid weekly. Assembly Bill 1311 makes this law applicable to security personnel employed by private patrol operators who are also temp service employers, as of July 2016.


Single User Restroom Facilities

Restroom LawAs of March 1, 2017, single-occupant toilet facilities in any business or public building must be identified as "all gender" facilities with signage compliant with Title 24 of the California Code of Regulations. Single-occupant bathrooms have no more than one stall and one urinal. See Assembly Bill 1732.

 

Minimum Wage Hikes

Minimum Wage HikeCalifornia: Businesses with 26 or more employees must pay a minimum wage of $10.50 per hour as of January 1, 2017. Employers with 25 or fewer employers must raise minimum wages to this rate on January 1, 2018

Local Ordinances: In unincorporated Los Angeles County, Los Angeles City, Pasadena and Santa Monica, employers with 25 or fewer employees must begin paying minimums of $10.50 per hour as of July 1, 2017. Employers with 26 or more employees were required to start paying a rate of $10.50 per hour as of July 1, 2016; and will be required to pay $12.00 per hour as of July 1, 2017. (Click: Cty and County Wage Rates for more specific information.) 

 

Sick Time

Sick Leave CaliforniaCalifornia: As of 2015, employers in California must provide 24 hours of paid leave per year for employees who work at least 30 days per year. 

Local Ordinances: In Los Angeles County, employers must provide 48 hours of paid sick leave annually. The time can be front-loaded every 12 months or accrued at the rate of one hour paid sick time for every 30 hours worked. This requirement is part of the Los Angeles Minimum Wage Ordinance, and went into effect last July for employers with 26 or more employees. For employers with 25 or fewer employees, the requirements must be implemented as of July 1, 2017


Arbitration Clauses

Senate Bill 1241 prohibits employers from requiring employees, as a prerequisite of employment, to arbitrate employment disputes under the laws of another state or in another state. This protection applies to all employees who primarily live and work in California. 

An exception to the new law applies to employees represented by an attorney when negotiating terms of an employment contract, including those containing forum selection and choice of law provisions. 


New California Employment Laws: Industry Specific Legislation

 

Janitorial Services

Janitor LawPer Assembly Bill 1978, employers of property service workers (janitorial) must keep records of all employees to include: employee names and addresses; start/stop times and all hours worked; wage rates for each pay period; ages of any minor employees; and conditions of employment – for three years. The law applies to janitorial employees, independent contractors and franchisees. 

Employers in this industry must register with the Labor Commissioner each year as of July 1, 2018. Cost of registration is $500.00.

The new legislation also requires janitorial staff and supervisors to undergo sexual violence and harassment prevention training every two years as of January 1, 2019


Agricultural Workers

Farm Worker LawAssembly Bill 1066 eliminates the one day of rest per seven days worked exemption for California's agricultural industry. Employers cannot require agricultural employees to work more than six days per week.

As of January 1, 2019, agricultural employers must provide overtime wages for more than 9.5 hours worked (or more than 8 hours starting January 2022); meal breaks; and meet other wage and working condition requirements.

Employers with 25 or fewer employees have an additional three years to comply with the criteria above. 


Private Education

Private School Minimum Salary ThresholdAssembly Bill 2230 requires a new minimum earnings test for private school teachers to be exempt from overtime:  salaries for these employees must be comparable to those offered to public schools in the same district or county. The new test is effective as of July 1, 2017

 

 

Salon Services

Salon Worker LawBusinesses licensed by the Board of Barbering and Cosmetology (BBC) are required to post notices regarding wage and hour laws and workplace rights as of July 1, 2017, under Assembly Bill 2437.

Another new law (Assembly Bill 2025) will require BBC schools to provide basic labor law education to license applicants.

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Wednesday
Jul132016

Terminated: A Marriage’s End Should Not Lead to Employment’s End

Divorce Attorney
Discrimination Defense Attorney

by Vanessa Soto Nellis
& Nicole Kamm

 

Last month, the New Jersey Supreme Court ruled in Robert Smith v. Millville Rescue Squad (MRS) that an employer cannot terminate an employee for separating or divorcing – the processes of which apparently falls under the protected category of marital status under New Jersey’s Law Against Discrimination (LAD).

 

Operations director and paramedic Robert Smith and his wife both worked for MRS and decided to separate when he began an affair with a squad volunteer. When Smith asked about continued employment, the squad’s CEO, John Redden, said it “All depends on how it shakes down.”

Redden also allegedly told Smith at a later meeting that the CEO would not take the case to the squad’s board if there had been the slightest chance of Smith and his wife reconciling; and that Smith “had eight months to make things right” with his wife. He also warned Smith the divorce would be “ugly”.

The board decided to terminate Smith based on corporate restructuring, poor work performance, and failure to improve work performance.

Smith sued MRS, alleging wrongful discrimination and wrongful discharge under New Jersey’s LAD. Smith testified that he was never subject to formal discipline, received annual raises, and was promoted twice.

The trial court ruled Smith failed to show he was discriminated against. An appellate court reversed, and the New Jersey Supreme Court unanimously upheld the appellate decision, stating the LAD prohibits employers from discriminating against job candidates and employees because they are single, married or “transitioning from one state to another”. The court considered the CEO’s comments to be biased against people seeking divorce.

Marital status is one of the extensive list of protected categories under California’s Fair Employment and Housing Act. Under Government Code §12940(a), employers are prohibited from refusing to hire, employ, or train; discriminate in compensation, employment conditions or privileges; or terminate an individual because that person is married, single, separated or divorced.

These protections for divorcing employees may raise some issues for business owners and management. Consider the following: 

  • Spouses of partners and employees with complex compensation packages may have a financial interest relating to spousal and child support, which means a company may have to undergo a valuation process.

  • A valuation could mean a disruption in operations as employees gather and provide information for forensic accountants who may need to review the books, inventory, etc.

  • A business’s human resources department may be subpoenaed to provide information. 

So unless a business qualifies for a rather narrow ministerial exception, an employer can’t fire an employee for divorcing. 

An Ounce of Prevention: Protecting Business Interests

From a family law perspective though, there are some things a business owner may do to minimize damage from an employee or business partner’s divorce:  

  • Business partners and highly compensated executives should draw up prenuptial or postnuptial agreements, and have a buy-sell agreement in place.

  • Business owners should compensate themselves and their partners with actual salaries, rather than stock or other interests in the business. An ex-spouse may in certain cases, wind up with ownership interests.

  • Partners and major shareholders going through a divorce should consider hiring a joint forensics accountant to represent both parties, to hopefully reduce disruptions to business operations.

  • Get a valuation of the business at the date of marriage.

  • Management should limit exposure of private records like confidentiality agreements and redactions to agreements. Trade secrets, employee files, and private financial records for the business and individuals may be at stake here. An attorney can provide counsel as to what records need to be provided, to whom, and how to keep them all out of the public record.

  • Client information may need to be protected, particularly under the Health Insurance Portability and Accountability Act.  

Employers should also be aware of the various protected categories and take steps not to discriminate, harass or retaliate against an employee on such bases.

 

Vanessa Soto Nellis and Nicole Kamm are Shareholders at our firm.  

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

LEWITT HACKMAN | 16633 Ventura Boulevard, Eleventh Floor, Encino, California 91436-1865 | 818.990.2120