Monday, November 28, 2011

Prevailing wage applies to tree pruning, removal on state highways

In Reliable Tree Experts v. Baker (Cal.App. 1 Dist.), the Court has ruled that a private contractor providing tree pruning and removal for California Department of Transportation must follow California's Prevailing Wage Law.

California's Prevailing Wage Law can be found at Labor Code §§ 1720-18611.

Here, the contractor, working under contract with Caltrans for the first time, argued that it was not involved in "public works," for purposes of Labor Code § 1720, which defines public works as including construction, alteration, demolition, installation, or repair work done under contract and paid for in whole or in part out of public funds. The Court disagreed.

The Court also found that the contract involved "maintenance work" under Labor Code § 1771, though the contract was the contractor's first contract with Caltrans, it was a one-time contract between the contractor and Caltrans, and a great majority of the work under the contract involved tree removal. Tree work on Caltrans rights-of- way was routine, recurring, and usual work on those rights-of-way.

Interestingly, this case arose out of a $949,600 contract, but the appeal was from a judgment ordering Reliable Tree Experts to pay just $6,767.22. There is no doubt in my mind that the appeal cost the contractor way, way more than $6,767.22: a double loss for the employer in this case.

As always, a disclaimer - every situation is different, and you are advised to consult an attorney for advice specific to your situation. The information in this blog is intended as a service to clients and the community, and nothing in here is intended to create an attorney-client relationship or provide legal advice, nor is it advertising. Now, I'm off to prune some trees!

Thursday, November 10, 2011

Employee moving his truck on jobsite found to be in "course and scope" of employment

When is an employee acting in course and scope of employment, making an employer liable for his acts, omissions and personal safety? The answer varies depending on job description, employment terms and a number of factors. In Vogt v. Herron Const., Inc. (Cal.App. 4 Dist.) the Court of Appeal found a framing contractor's employee was acting within the course and scope of his employment when he moved his truck on a job site. The facts of this case show just how harsh this ruling might be for contractor employers:

Herron was the framing subcontractor on a construction project in Riverside. Jesus Cruz was an employee of Herron. His job duties did not include driving.

On October 31, 2007, Cruz parked his own personal pickup truck at the worksite. No one had told him where to park. There was no designated parking area for subcontractors' employees. Employees typically parked near wherever they were assigned to work that day.

Performance Concrete (Performance) was the concrete subcontractor on the project. Vogt was an employee of Performance. When he noticed Cruz's truck, he thought, "Hey, we got to move th[at] because we can't get the cement truck in." He then asked Cruz to move his truck; he explained that Performance was about to start pouring cement nearby.

It was "normal" for construction workers to be asked to move their cars and other vehicles at a jobsite. As Vogt later explained, "It . . . happens all the time on a job site . . . . We're not going to pour if a car's there because we don't want the liability of splashing the paint."

When Cruz moved his truck, he ran over Vogt, injuring him.

Originally, Cruz and the general contractor, Lyle Parks, Jr., Inc. (Parks), were also defendants. The trial court granted summary judgment to the general contractor, dismissing the case in favor of Parks. Vogt settled with Cruz, leaving only the action between Vogt and his employer, Herron.

Herron argued that Cruz was not acting in the course and scope of his employment. However, the Court considered evidence that the need to move one's personal vehicle when it got in the way of another subcontractor was an "outgrowth" of the employment, "inherent in the working environment," and "typical of or broadly incidental to the [employer's] enterprise." Here, employees were allowed to park their personal vehicles at the worksite during working hours, and it was foreseeable that they would have to move them when they got in the way of construction.

Sending the case back to the trial court, the Appellate Court found that Cruz was acting in the course and scope of his employment, because moving the truck served the employer's overall enterprise, and was necessary to the employee's comfort, convenience, and welfare while on the job.

This case raises a number of issues for employers in the construction industry. Often, parking on the job site is the only parking available for employees, especially in remote sites. Job sites can become crowded, and by their very nature, there is a lot going on (including, as in this case, the arrival of a concrete pour truck). It's a good idea to make sure employees know that safety rules cover the entire site, but you might also want to consider some precautionary measures to prevent liability for employee v. employee accidents like the one in this case.

As always, this information is offered as a service to clients and the community, and is not intended as legal advice or as an advertisement for legal services. Nothing in here is intended to create an attorney client relationship, and every case is different. I offer free thirty minute consultations to employers with employment law questions, and my firm is a proud member of the Santa Barbara and Ventura Contractors' Associations.

Friday, November 4, 2011

Does someone owe your business money?

It's Friday, always a good day in employment law because unscientific personal observation suggests employees are more eager to get to Happy Hour than they are to sue their employers. As a change from my employment-law focus, here is an excellent column written by Napa attorney Mary Luros on debt collection for small businesses:

Mind Your Business by Mary Luros

Tuesday, November 1, 2011

Characterizing employment settlements for pension purposes

Employees lucky enough to be part of an employer-sponsored retirement plan in California have long been familiar with the calculations that go into establishing retirement income. Commonly, the calculation is based on a combination of years worked and highest annual income: but what happens if that annual income spikes because of an employment settlement?

In Molina v. Board of Admin. of California Public Employees' Retirement System ,(Cal.App. 2 Dist.) the Second District, Division Three Appellate Court (covering Los Angeles)has just ruled that wrongful termination settlement proceeds should not be included in a CalPERS pension calculation. CalPERS, or California Public Employees' Retirement System, provides retirement benefits to more than 1.6 million public employees and 3,000 public employers. In short, if you have any other State of California retirement plan, it is likely that this case will apply.

In Molina, a former employee of a local municipality received a $200,000 settlement on a wrongful termination claim. For tax purposes, the settlement was deemed "back pay" and counted towards the employee's taxable income. However, the $200,000 was not "compensation earnable" and did not count towards the CalPERS pension calculation.

Here, the Appellate Court ruled that under the Public Employees Retirement Law (PERL), a settlement only counts towards pension calculation if it it qualifies as "payrate" or "special compensation." There are some technical elements that also protected CalPERS from rewarding the former employee with a higher pension that he would otherwise have earned. In this case, the settlement payment was not the employee's "payrate" because after the settlement the employee was reinstated for one day rather than a year, and the employee was reinstated at his normal monthly rate rather than at a published monthly payrate that would have generated $200,000 in yearly compensation. The payment also was not "special compensation" absent evidence that it was available to similarly situated employees under a labor policy or federal requirement.

Knowing the tax implications of a potential settlement with an aggrieved employee can give you the upper hand in negotiating a claim, but as with all legal matters, you should consult an attorney before doing so. Nothing in this blog is intended to give legal advice or form an attorney-client relationship, and the information herein is offered as a service to clients and the community, not as advertising. I offer free consultations to employers on employment law matters in Santa Barbara, Ventura and San Luis Obispo Counties, and am happy to take your call.