By Sarah Drechsler

Lobo v. Tamco, a California Court of Appeal decision that came out this week, involves an employee of a steel manufacturer who, as he was leaving the premises of the employer to commute home in his own vehicle, collided with a motorcycle police officer, resulting in the officer’s death.  The officer’s family filed a wrongful death suit against the employer, alleging vicarious liability under the respondent superior theory because the employee was acting in the course and scope of his employment when the accident occurred.  The employer argued that it could not be liable for the accident under the “going and coming” rule which establishes that employees are outside the course and scope of their employment while on their daily commute. Based on this rule, the trial court granted summary judgment in the employer’s favor, exempting the employer from liability.

On appeal, the plaintiffs argued that the employer could be liable under the “required-vehicle” exception to the going and coming rule.  This exception applies where a personally-owned vehicle is either an express or implied condition of employment.  In this case, as part of the employee’s position as a quality control manager, the employee was required to visit customer sites along with a sales engineer when a customer reported a problem with the product.  The employee testified that he did not have to make these trips often, and when he did, he usually went in the engineer’s car. In fact, the employee testified that in the 16 years that he worked for the employer, he used his own car to drive to a customer’s location 10 times or fewer.  The employer argued that, while the employee’s presence was essential when customers had quality complaints, driving was not an integral part of the employee’s job.  The Court of Appeal sided with the plaintiffs, finding that the employee’s commute was within the course and scope of his employment because the employer “requires or reasonably relies upon the employee to make his personal vehicle available to use for the employer’s benefit and the employer derives a benefit from the availability of the vehicle.”  The Court noted that, “the fact that the employer only rarely makes use of the employee’s personal vehicle should not, in and of itself, defeat the plaintiff’s case.”  The Court reversed the trial court's entry of summary judgment for the employer.

This ruling puts employers on notice that by requiring employees to utilize their personal vehicles to perform any aspect of their job, an employer may be opening itself up to potential vicarious liability for conduct occurring outside of work hours.  Employers may want to re-examine positions that require infrequent use of the employee’s personal vehicle to determine if the position can be restructured to eliminate any need for personal vehicle use.
 

By Cindy Caplan

In  McCarther v. Pacific Telesis Group, the California Supreme Court ruled that Labor Code Section 233 does not apply where the employer's sick leave policy provides for an uncapped number of paid sick days.

Pursuant to a collective bargaining agreement, Pacific Telesis provided up to five consecutive days of paid "sickness absence" in any seven-day period for an employee's own illness or injury. The company did not cap the amount of sick leave that may be taken by employees.  Two employees filed suit against Pacific Telesis, alleging that its policy violated Labor Code Section 233 because employees were not compensated for kin care time off under the sickness absence policy.

Labor Code Section 233 provides that “[a]ny employer who provides sick leave for employees shall permit an employee to use in any calendar year the employee’s accrued and available sick leave entitlement, in an amount not less than the sick leave that would be accrued during six months at the employee’s then current rate of entitlement, to attend to an illness of a child, parent, spouse, or domestic employee of the employee.”  The statute defines "sick leave" as "accrued increments of compensated leave."

The Court concluded that, under Pacific Telesis's plan, sick leave was not "accrued" within the meaning of Section 233.  The Court further reasoned that it would be impossible to determine "the sick leave that would be accrued during six months at the employee's current rate fo entitlement" given the nature of the Company's plan.  The Court concluded that Section 233 does not apply to policies in which the employer provides uncapped compensated sick leave.  Thus, where a policy allows for unlimited or uncapped sick leave, the employer is not obligated to provide paid "kin care" leave.  Employers who provide for a specific number of sick leave days per year remain obligated to allow employees to use half of their yearly allowance of paid sick leave to attend to a family member's illness.
 

By Greg Berk and Suzanne Brummett

The U.S. Attorney in Boulder, Colorado has filed a criminal indictment against the owner of several Thai restaurants for various employment tax and immigration violations.

The owner brought in workers from Thailand on employment visas to work at his restaurants. However, he denied them overtime pay and insisted on paying part of their wages in cash.  He then intentionally under-reported their pay to the IRS to avoid paying increased payroll taxes.  If convicted, he faces up to 20 years in prison and $250,000 in fines for each criminal count.

Foreign nationals working in the U.S. are entitled to the same statutory employment protections as U.S. workers.  Any conduct by an employer to exploit an individual based on immigration status is a violation of both federal and state employment and criminal laws.

Carlton DiSante & Freudenberger's immigration practice group is available to assist employers with questions that may arise regarding the employment of foreign nationals on work visas as well as I-9 compliance.  In addition, our employment law attorneys are available to assist employers in making sure that their compensation practices can withstand state and federal scrutiny.  Employers who are uncertain whether their employment practices are fully compliant with all federal and state laws may want to consider having an audit conducted by counsel.  The consequences of non-compliance can be enormous.

To see the full press release regarding the indictment of the restaurant owner by the U.S. Attorneys Office, click here.