The Court’s Order preserves the largest jury verdict in the United States this year and the largest recorded jury verdict in Humboldt County.

Read the court’s entire ruling here.

The statute’s phrasing, “in response to a request[,]” makes one think that there must be some formal request by the employee, but that’s just not true.   California courts have decided that there are “no magic words necessary” to be used by the employee, and furthermore, the employer’s “obligation arises once the employer becomes aware of the need to consider an accommodation.”  In other words, employers must be extremely careful to hear “requests” by employees that the employer engage in the interactive process.

A California appellate court recently put some limits on the bounds of an employer’s obligation.  In July, the California Court of Appeal, Fourth Appellate District, decided the case of Milan v. City of Holtville (No. D054139).   There, an employee injured on the job received a letter from her employer’s self-insured workers’ compensation program which told the employee that she would not be able to return to her regular job because of her work injury.  The employee did not communicate with her employer for 18 months after that about her condition or any return to work plans, and she received retraining benefits through the workers’ compensation program.   Tthe employer did not contact the employee to ask about her condition or any plans to return to work.  The employer terminated the employee after 18 months of silence, and the employee filed a FEHA complaint on the grounds that the employer failed to engage in the interactive process.

Reversing the decision of the trial court, the Court of Appeal found for the employer because the employee’s duty was to, at the very least, “communicate to [her employer] that she planned to continue working….”   Good faith, the court decided, required that the employee “directly express” her interest in retaining her job.

While that sounds reasonable, cases where plaintiffs allege a failure of the employer to engage in the interactive process are fact-specific.   And, there’s room in the appellate court’s opinion to believe that employees who make any expression of desire to return to their jobs trip an employer’s obligation to engage in the interactive process in good faith.   In short, employers and employees should be proactive in communicating about reasonable accommodation.

In Narayan, et al. v. EGL, INC., et al., No. 07-16487, the employer, “a global transportation, supply chain management and information services company[,]” was a Texas company with driving operations in California.  Three of the employer’s California drivers signed agreements for “Leased Equipment and Independent Contractor Services,” which provided that the parties’ intentions were to enter into an independent contractor relationship.  Subsequently, the California drivers filed a lawsuit seeking unpaid overtime, expense reimbursement, meal compensation, and reimbursement for unlawful wage deductions—all owed to employees under California law.

The District Court granted summary judgment to the employer on the basis that the drivers were not California employees, by the terms of their own contracts.

The Ninth Circuit reversed, finding that, under California law, the drivers were employees, not independent contractors. The Court explained that its decision was fact-driven because, for example:
- the employer had control over when the drivers arrived for their shifts;
- the employer had control over what the drivers wore;
- the employer had control over what routes the drivers drove;
- the employer had control over how the drivers responded to dispatch;
- the employer had control over how the drivers responded to customer complaints;
- the employment period was for an unspecified term, much like at will;
- there was no specialized skill—largely driving and making deliveries—which weighed against independent contractor;
- the drivers provided some hand tools (like a hand cart), but the employer provided forms, boxes, and identification cards; and
- the employer drafted the contract, which was signed by the drivers, and it automatically renewed by its terms (in other words, there was no evidence of negotiating a contract by the drivers).

This employer received a very expensive lesson: you can’t contract around whether someone is an employee or an independent contractor.  If there’s any question of the appropriate categorization at all, the prudent thing would be to err on the side of categorizing workers as employees, not independent contractors.

On June 1, 2010, the Court issued an opinion in Berghuis v. Thompkins.   New York Times article.

This case did not alter the Miranda requirement that a suspect be told he or she has the right to remain silent.   However, the Court held that statements made by a defendant who received such warning and who did not expressly waive or invoke his or her rights, but who only spoke after remaining silent through hours of interrogations, may be admissible.

In this case, Mr. Thompkins was read his Miranda rights but refused to sign a form acknowledging that he understood them.   He then remained silent through three hours of questioning.   Then, Mr. Thompkins did eventually give a one word answer “yes” to a crucial question:  “Do you pray to God to forgive you for shooting that boy down?”   His affirmative answer to this question was used against him at trial and he appealed.  The U.S. Supreme Court held that the statement was admissible and that the burden would be placed on the suspect to invoke his rights.   Essentially, the Court ruled that a suspect who received the Miranda warnings waives the right to remain silent by making an uncoerced statement to the police.   New U.S. Supreme Court Justice Sotomayor dissented and pointed out the paradox of requiring a suspect to expressly invoke their Miranda right to remain silent by speaking their desire to do so in order to cut off questioning.

The Thompkins case follows two additional decisions in February of 2010 narrowing Miranda protections, Maryland v. Shatzer and Florida v. Powell.   New York Times article.

In the Shatzer case, the Court held that police can take a second run at questioning a suspect who has invoked his Miranda rights, but they must wait until 14 days after the suspect has been released from custody.   In the Powell case, the Court ruled that police may vary the language of the the Miranda warnings and that a warning that a suspect has the right to remain silent and the right to”talk to a lawyer before answering any of our questions” was sufficient (as opposed to the standard: “You have the right to remain silent.  Anything you say can and will be used against you in a court of law.  You have the right to speak to an attorney.  If you cannot afford an attorney, one will be appointed to you.  Do you understand these rights as they have been read to you.”)  Each of these opinions may be found in their entirety at the U.S. Supreme Court website.

It is important for a suspect to be aware that they still have the right to remain silent and to consult with an attorney at all times.   But a suspect should expressly state their desire to invoke such rights, not vary from such express statement or behavior, and consult with an attorney as soon as possible.

If so, do you have a Buy-Sell Agreement that provides for the transfer of your ownership interest if you die, retire, become disabled, or want to sell your interest in the business?

The purpose of a Buy-Sell Agreement is to provide for an orderly transition of ownership interest on the occurrence of any number of events.  In addition to those events mentioned above, a Buy-Sell Agreement can also be important when an owner files for bankruptcy, loses a required license or is voluntarily or involuntarily terminated from his or her employment in the business.

Typically, a Buy-Sell Agreement controls the circumstances under which an owner may sell his or her interest, who is a permitted buyer, and how the price paid will be determined.  A well drafted agreement will anticipate potential conflicts that may create an issue in the operation of the business when an owner desires or is forced to sell his or her interest in the business.

The Buy-Sell Agreement benefits the business and its owners by allowing the remaining owners to determine with whom they will work and share control of the business; preventing outsiders or heirs, whose interests may conflict with those of the remaining owners of the business, from obtaining an ownership interest; insuring the continuation of management and control by the remaining owners;  and providing for the orderly transfer of the owners’ interests in the event of death, disability, retirement or other forced or voluntary withdrawal.

A Buy-Sell Agreement can also create a market for the shares of the deceased, retiring, or withdrawing owner, and it can generate cash to pay for estate taxes and estate settlement costs.

The attorneys of the Janssen Law Firm are experienced in assisting clients in the preparation of these types of agreements, as well as providing advice with most issues that present themselves to small business owners.   If you need legal assistance in preparing a Buy-Sell Agreement, or in any other aspect of your business, please contact us

The 1974 landmark case in the California Supreme Court, Green v. Superior Court, established an important principle called the Implied Warranty of Habitability.  (Green v. Superior Court (1974) 10 Cal.3d 616, 637-638.)  This concept is implied in every residential rental agreement in California and cannot be waived, even with explicit language.  The concept obligates landowners to ensure that every rental property meets minimum standards.  While the landlord is not responsible for damages the tenant causes, the landlord must ensure that the property meets certain minimum standards.  If  he or she does not, the tenant will be justified in withholding rent and can potentially claim other damages as well, especially if the tenant or guests of the tenant are injured on the property.

Prior to renting property, the landowner must bring it into substantial compliance with state and local laws, including building and health codes.  (Green v. Superior Court, 10 Cal.3d at 637-638; Health and Safety Code §17920.3.)  Failure to meet minimum standards, as described in the State Housing Law, will result in the dwelling being “substandard.”  Some obvious problems which would indicate a building is “substandard” include inadequate sanitation,  structural hazards,  faulty wiring,  fire hazards, and nuisances, but even problems with plumbing and failure to comply with building codes could be sufficient to show negligent conduct in a lawsuit.  (Health and Safety Code §17920.3.)

California courts have declared that “the tenant may be financially unable to make the necessary repairs or would be less likely to do so because of his ‘transitory interest’ and that the burden should be on the landlord who derives benefits from the tenancy in the form of rentals.”  Grant v. Hipsher (1967) 257 Cal. App. 2d 375, 383-984.

If you are a tenant in Humboldt County and have reason to believe you have suffered injury resulting from a substandard rental, the Janssen Law Firm may be able to provide you with legal help relating to the habitability of your home.  Similarly, if you are a landlord in Humboldt County and require legal advice on how to best protect yourself from a lawsuit, attorneys at the Janssen Law Firm are available and equipped to assist you.

In most cases involving a significant amount of damages,  it is typical for a mediation to occur prior to trial.   A mediation is a voluntary procedure where the parties select a mutually agreeable facilitator or mediator (typically an experienced trial attorney or retired trial judge) to conduct settlement negotiations with a focus on resolution of the dispute.   Money spent on the resolution process at mediation can save tens of thousands of dollars at trial for expert  testimony and exhibits.

In mediation, the mediator has no authority to force any of the parties to agree to anything;  it is a voluntary process where the parties input gives them some degree of control over the outcome.   In a trial, that control is handed over to the jury, or the court, who may view the case quite differently than the self-interested prospective of the litigants themselves.  The Janssen Law Firm has had very good success in putting the appropriate cases through mediation as an alternative to the expense and uncertainty of trial.

Another dispute resolution mechanism is that of arbitration.  For example, in auto cases in which the defendant driver is either completely uninsured or underinsured (inadequately insured) the California Insurance Code provides that a person’s dispute with their own insurance carrier about resolution of that claim is conducted via an arbitration procedure.   In an arbitration, both sides select a mutually agreeable arbitrator, typically a lawyer or a retired judge, who would conduct an evidentiary hearing on the issue of liability and damages.   The arbitrator then renders a written ruling of his or her findings, the result of which is binding.

The advantages of arbitration are that it can be cheaper than the extensive costs connected to a trial, much of the evidence can be submitted in documents, and it achieves finality because the result is binding without the right of an appeal.

There are, of course, cases that simply must go through jury trial and the attorneys at the Janssen Law Firm excel in that arena.  In fact, usually the best way to get the appropriate settlement result prior to trial is to properly and aggressively prepare the matter for trial, letting the other side know that you are fully prepared to try the case through verdict and prevail.

The attorneys at the Janssen Law Firm are experienced in all three of the dispute resolution procedures outlined above, and stand ready to help you.

Remember that many federal laws are not as broad as California employment laws, and employers in Humboldt County must comply with both federal and state laws.

The case was filed as a class action for the purpose of requiring the defendants to staff their facilities according to California law, which requires that skilled nursing facilities staff at a minimum of 3.2 nursing hours per patient day.  Prior to the class action, the plaintiffs’ attorneys had litigated a number of personal injury cases against nursing homes owned by the same parent corporation, Skilled Healthcare Group, Inc.  During those individual cases, the attorneys identified what they considered to be serious and dangerous understaffing at the facilities.  The result was the class action, the purpose of which was to address systematic understaffing at California skilled nursing facilities owned by Skilled Healthcare Group, Inc.

Later this week, on July 15, 2010, the attorneys will present the punitive damages aspect of the case to the jury.   Plaintiffs’ attorneys, including the Janssen Law Firm, will also request that the Court impose an order on defendants that they comply with California law with respect to nursing staff requirements.

There has been a great deal of local and national press regarding the verdict, some of which is included in the following links:

The Times-Standard, Eureka:   July 7, 2010; July 8, 2010; July 10, 2010.

The Orange County Register:  July 8, 2010.

The Wall Street Journal:  July 7, 2010.

Bloomberg:  July 7, 2010.

Reuters:  July 7, 2010.

Forbes:  July 7, 2010.