In the past year, employee class action lawsuits seem to have become more common in San Diego.
That is, one ex-employee sues his former employer on behalf of himself and others who have presumably had the same wrong done to them, even those who are still employed, don't realize they have a claim and, in most cases, would never pursue that claim. It's not just large employers being hit.
Small mom and pop businesses have now become targets. The potential damages can range into the hundreds of thousands of dollars.
Whether the case is brought as a traditional class action or under the Labor Code Private Attorney General Act, the main idea is to add up the “damages” owed to many employees and make the case more worthwhile for an attorney to handle on a contingent fee. It's a great deal for the employee's attorney, who will often get far more out of the case than any of the plaintiffs.
It is a terrible deal for the employer, because the case is more expensive to defend and the potential damages and penalties, along with costs and attorney fees, could destroy the business altogether.
Many employers who are hit with lawsuits wonder why an employee has turned on them. After all, most employers believe they are fair, even generous to their employees.
There is no common explanation. Employees are disgruntled for many reasons, particularly those who have been fired.
All the more reason to make sure you leave as few holes in your armor as possible. Know the employment laws, document your decisions and get advice when you need it.
Many employers still don't know that paying a salary does not automatically make an employee exempt from overtime or that calling someone an independent contractor doesn't always make it so. A wrong classification can cost thousands for one employee alone.
The Internet is loaded with information, but some of it is wrong and much of it has no application to California, where the rules are different than the rest of the country. It's a good place to start looking, but never rely on the Internet alone for employment advice.
Of course, there is insurance for some employee claims, and you should ask your broker about Employment Practices Liability coverage. But you will find that some claims, like underpaid wages and penalties, are not covered.
So while the insurance company may pay for an attorney to defend you in an overtime lawsuit, it may not cover damages or a settlement.
We all know it takes years of effort to build a business, and plenty of hard work to keep it going, particularly in a down economy. But the greatest shame of all would be to lose that value because you failed to comply with the law purely out of ignorance.
That is, one ex-employee sues his former employer on behalf of himself and others who have presumably had the same wrong done to them, even those who are still employed, don't realize they have a claim and, in most cases, would never pursue that claim. It's not just large employers being hit.
Small mom and pop businesses have now become targets. The potential damages can range into the hundreds of thousands of dollars.
Whether the case is brought as a traditional class action or under the Labor Code Private Attorney General Act, the main idea is to add up the “damages” owed to many employees and make the case more worthwhile for an attorney to handle on a contingent fee. It's a great deal for the employee's attorney, who will often get far more out of the case than any of the plaintiffs.
It is a terrible deal for the employer, because the case is more expensive to defend and the potential damages and penalties, along with costs and attorney fees, could destroy the business altogether.
Many employers who are hit with lawsuits wonder why an employee has turned on them. After all, most employers believe they are fair, even generous to their employees.
There is no common explanation. Employees are disgruntled for many reasons, particularly those who have been fired.
All the more reason to make sure you leave as few holes in your armor as possible. Know the employment laws, document your decisions and get advice when you need it.
Many employers still don't know that paying a salary does not automatically make an employee exempt from overtime or that calling someone an independent contractor doesn't always make it so. A wrong classification can cost thousands for one employee alone.
The Internet is loaded with information, but some of it is wrong and much of it has no application to California, where the rules are different than the rest of the country. It's a good place to start looking, but never rely on the Internet alone for employment advice.
Of course, there is insurance for some employee claims, and you should ask your broker about Employment Practices Liability coverage. But you will find that some claims, like underpaid wages and penalties, are not covered.
So while the insurance company may pay for an attorney to defend you in an overtime lawsuit, it may not cover damages or a settlement.
We all know it takes years of effort to build a business, and plenty of hard work to keep it going, particularly in a down economy. But the greatest shame of all would be to lose that value because you failed to comply with the law purely out of ignorance.