WESTERN NEWS (706)
California, Arizona and Nevada
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What has Sacramento done to your business this year
Thursday Oct 24th @ 6:00pm
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The California Autobody Association (CAA) and the Society of Collision Repair Specialists (SCRS) have spent most of this year working to address a growing concern being reported to their offices regarding increased pressure from a few leading carriers to reduce refinish times on repaired panels. The national association noted a significant increase in complaints about this practice in the beginning of 2013, and the concerns have not been isolated to one carrier, or any geographic market. As part of their efforts SCRS issued a series of letters to 6 carriers whom were reported to be systematically reducing refinish times in a variety of markets across the U.S. The letter stated:
An Oakland man suspected of beating and robbing an auto body shop employee who was giving him a courtesy ride home Sept. 28 was arrested Oct. 1 after he returned to Alameda Collision Repair to collect his damaged car, KPIX Channel 5 reported.
The suspect was captured on surveillance video and shop employees alerted police to his return, KPIX said.
Meanwhile the robbery victim remains hospitalized. Friends of the young man told Alameda Patch that he is undergoing surgery for a fractured jaw.
The suspect had taken his vehicle to the shop at 1911 Park St. on Sept. 28 for an estimate and then asked for a ride to his home in Oakland, Police Lt. Jill Ottaviano said.
After they reached Oakland, the customer attacked the driver, who is an Alameda Collision Repair employee, and stole money from him, she said. The amount stolen was not reported.
The driver was taken to a local hospital for treatment. His injuries are not life-threatening, Ottaviano said.
The incident is considered a strong-arm robbery and reportedly no weapon was used, she said.
The incident is being investigated by the Oakland Police Department, she said. Alameda police are assisting with the investigation.
A California body shop owner who shot and killed a dissatisfied customer in Oct. 2011 was sentenced Sept. 27 to 50-years-to-life in prison for first-degree murder, according to reports in the Sacramento Bee.
Anthony Michael Vigil, now 49, first had to duck a tissue box thrown at him in the courtroom by the wife of the victim, Michael Paul Gonzales Jr., 26.
"This man is going to suffer for the rest of his life, his pathetic life, and then for all of eternity, and that's the only thing that brings me satisfaction," Jami Bryan said before Sacramento Superior Court Judge Kevin J. McCormick sentenced Vigil.
Vigil ran Anthony's Body Shop on Amalgam Way, just off Sunrise Boulevard in an industrial neighborhood near Gold River. According to Vigil's probation report, Gonzales brought his car into the shop several months before he was killed the night of Oct. 6, 2011.
"The defendant stated the work would be completed in approximately one week," the probation report said.
When it still wasn't done a week after that, Gonzales "called, texted, and emailed the defendant numerous times, but never received a call or text back," according to the probation report.
Vigil later told Gonzales, "there were issues with his insurance company paying for the repairs," the report said.
Two weeks before the shooting, Gonzales met another customer who said he was having trouble with Vigil. Gonzales agreed to accompany the other man to Vigil's shop to serve him with a small claims suit, the probation report said.
Gonzales and the other man arrived at the shop around 10 p.m. the night of the shooting. When Vigil arrived later, the report said, he retrieved a shotgun from inside his shop, called 911 and told the dispatcher, "Hold on, I'm going to shoot these m------------."
A California Highway Patrol dispatcher heard one gunshot before the line went dead. Paramedics pronounced Gonzales dead at the scene. Vigil waited for sheriff's deputies to arrest him. He claimed the shooting was in self defense.
Vigil has a past felony conviction for filing a false insurance report in 1997 that put him in jail for 10 days and on probation for five years, according to the probation report. The record also shows that he was convicted of a misdemeanor in 2004 for driving without a license.
At the sentencing, Gonzales' family described him as a devoted father of a son who was 3-years-old at the time of the fatal shooting.
Twin investigations led to the arrest of a Phoenix body shop owner on suspicion of identity theft and staging hit-and-run accidents to collect insurance benefits.
Read more HERE
Calif. Gov Jerry Brown has signed legislation to raise California's minimum wage by 25 percent, from $8 an hour to $10 an hour by 2016.
The bill, celebrated by Brown and his labor union allies at an event in Los Angeles, promises the first increase in California's hourly minimum since 2008, when the minimum wage was raised 50 cents to $8.
Read more HERE
The California Air Resources Board recently passed another mandate for auto manufacturers selling vehicles in California. As of 2014, all vehicles sold in California will be required to have windshields which reflect the sun. The windows would have a metallic coating, a window technology said to be in use for some 20 years now.
The board passed the mandate in hopes of not only reducing greenhouse gas emissions but also improving fuel efficiency. By using the sun-reflecting windows, vehicles will maintain a cooler temperature and therefore drivers will use less air conditioning. Apparently the windows are able to keep sedan interiors 14 degrees Fahrenheit cooler, while keeping a truck or SUV about 12 degrees cooler.
As of 2012, one-quarter of vehicles sold in the state of California will require the sun-reflecting windshields. These windshields must block fifty percent of the sun’s heat when a car is parked. By 2014, all vehicles will be required to have such windshields.
Starting in 2016, all vehicles will be required to block sixty percent of the sun’s heat. However, car manufacturers will be allowed to compensate for the temperature control in some other way, as long as it meets the increased standard.
According to statistics involved in the decision, the windshield change will prevent 700,000 metric tons of carbon dioxide from being emitted in the year 2020. This is equal to removing 140,000 vehicles from the road all year. However, this is just a drop in the bucket when you consider the 22 million vehicles in California.
Some are concerned that the metallic coating on the windshields will interfere with the working of cell phones, GPS and toll road electronic passes. However, the windshields are going to have a small area in which the metallic coating is not placed. This is expected to alleviate the problem, although many are still skeptical.
The death of a California teen is under investigation after she was found dead inside a locked car, and police suspect a jammed lock may have led to the teen’s death. The 14-year-girl was found dead inside a very hot car, where temperatures reached 130 degrees, after faulty locks apparently left her trapped inside.
Graciela Martinez was found dead in the backseat of her brother’s BMW outside Madera South High School in Madera, CA, hours after he had gone inside to class.
He drove his sister to school that morning and left her alone in the vehicle because he had a 6.40 am class while her first lesson began at 7.40 am. She had no cellphone, food or water with her. When he and another sister finished classes at the end of the day, they found Graciela white and unresponsive in the back seat.
“They took her to the hospital but they couldn’t save her,” said the victim’s sister, Patricia Martinez.
Police said it now appears the Madera South freshman was accidentally locked inside her car and was unable to escape.
“People don’t think of that, I don’t think of that even after this investigation started, that was the furthest thing from my mind,” said Madera detective Dan Foss.
But things quickly changed when Foss made a disturbing discovery about the car’s locking system. He said investigators found the doors will sometimes lock on both the inside and outside when the key is used, disabling the horn and making it almost impossible to escape.
“Would she feasibly be able to get out of the car? It would be very difficult, she would have to try very hard,” Foss said.
Officers demonstrated how the car can unknowingly turn into a death trap. Investigators said Graciela’s brother was unaware of the risk when he locked her in only to find her dead hours later.
“It’s just sad, you never really know when it is going to happen.” said classmate Brandon Hernandez.
A recent vapor explosion in Missoula, MT, has led to the death of one body shop employee and the injury of another. Both OSHA and the local Missoula fire department are investigating the tragic incident.
Two employees of Rick’s Auto Body were injured the morning of Aug 19, one fatally, after lacquer thinner fumes exploded in an enclosed area in the back of the shop.
Bruce Hall, 44, died early the following morning at Harborview Medical Center in Seattle from third-degree burns suffered over 95% of his body.
Missoula City Fire Marshal Gordy Hughes said the two workers were caught in the fire when static electricity caused paint fumes to ignite, and explode.
Hughes said two other employees rushed to the area after they heard someone yell fire, and doused the flames with a fire extinguisher.
The other man had minor burns and injuries related to inhaling fumes from the explosion, Hughes said. He was hospitalized then released.
Hughes said several items in the shop also caught on fire, but the auto body shop itself sustained minimal damage.
“We’ll be looking at things like what kind of protective system they have in place,” Hughes said.
Rick Booth, who owns Rick’s Auto Body, said the entire shop is devastated by the death of a co-worker.
Hall, who lived in Missoula, had worked at the shop for five years in the detail department and provided customers with rides when their vehicles were in the shop, Booth said. Customers were very fond of Hall, whom Booth described as a quiet guy who liked his job.
“It’s a tragedy,” Booth said. “It’s not what we expect to have happen when we come to work.”
He said he isn’t sure what OSHA or the fire department will be investigating, but said he assumes they are looking at what caused the elements to ignite. They may also be looking at a faulty piece of equipment, he said.
Booth said there may be a mechanical issue with part of the fan that shuts off when it senses fire. “I want to find out what it was, so we can fix the right thing,” Booth said.
Hughes said his inspectors would be looking into the ventilation system and other safety measures in the building. The fire department’s investigation won’t be completed until next week.
Hughes said Rick’s Auto Body is “not negligent as far as the fire department [is concerned.]”
He said that OSHA’s investigation to determine if the building’s safety code was up to standards will be released in a couple of weeks, and potentially an exhaust fan may be part of the issue.
While the shop had safety measures, including training, in place, management acknowledges that the ventilation and equipment is still being investigated.
There are a few things to retain from this incident:
● When transferring flammable liquids in a metal container, the container must always be grounded and bonded.
● When transferring flammable liquids, ensure it is being done away from potential ignition sources.
● Ensure all containers are capped when not being used.
● Just because many paints are now waterborne does not mean that paint operations are without hazards; most clearcoats are still very flammable.
● Employees must be trained on the workplace hazards of their work environment.
This tragic event is a reminder of the seriousness and significance that attention to safety has, particularly with paint and spray operations.
According to a recent California appellate court decision, an employer can be liable for an employee who drank too much at a company party, made it home safely, and then killed a man in a drunk driving accident after he left his house again to drive another employee home.
“It is irrelevant that foreseeable effects of the employee’s negligent conduct (here, the car accident) occurred at a time the employee was no longer acting within the scope of his or her employment,” the court ruled.
Michael Landri was a bartender at the Marriott Del Mar Hotel. He attended the hotel’s annual holiday party in December 2009, beginning his celebration with a beer and a shot of Jack Daniels at home. He also filled a five-ounce flask with Jack Daniels and took it with him to the party, held at the hotel.
At the party, one of the managers acted as a bartender. She filled Landri’s flask on at least one occasion. Another employee drove a group to Landri’s house. Roughly 20 minutes later (and not having consumed any more alcohol) Landri left his house to drive another coworker home. En route, while driving over 100 mph, he rear-ended another car, killing the driver. Landri had a 0.16 blood alcohol level. He pleaded guilty to gross vehicular manslaughter and was sentenced to six years in prison.
The deceased’s parents brought suit against Landri and Marriott. A trial court judge granted summary judgment to the hotel. But the appellate court reversed.
Marriott’s respondeat superior liability (meaning, in many circumstances, an employer is responsible for the actions of employees performed within the course of their employment) followed the risk created by the intoxication, the court said, no matter where it proximately caused harm. Because he became intoxicated at an employee-sponsored party that benefited Marriott, he was acting within the scope of his employment and the employer could be liable.
The court reviewed two divergent doctrines of liability from different jurisdictions addressing similar factual scenarios. In Arizona, Illinois, and Kansas, the court noted, an employer is liable only if the accident itself occurs at a time when the employee is acting within the scope of his or her employment.
Another group of states – including Hawaii, Oregon, and Washington—have found it sufficient, for respondeat superior liability purposes, that the alcohol consumption occurred within the scope of employment.
Aligning California with the latter position, the appellate court said its decision was also in accord with state precedent. “[E]xisting California case law clearly establishes that an employer may be found liable for its employee’s torts as long as the proximate cause of the injury occurred within the scope of employment,” the court wrote. “It is irrelevant that foreseeable effects of the employee’s negligent conduct occurred at a time the employee was no longer acting within the scope of his or her employment.”
The court determined that a reasonable trier of fact could find that Landri was acting within the scope of his employment when he became intoxicated at the party. The consumption of alcoholic beverages by employees at the hotel “was a customary incident to the employment relationship,” the court said. Employees were allowed to finish alcohol left over after parties while on shift, taste new drinks or have drinks purchased for them; at the party, managers served hard alcohol and did shots with employees.
Marriott also benefited from the party because it furthered employer-employee relations and improved employee morale, the court noted.
Marriott argued that allowing it to be liable under the facts of the case would open the doors to broad potential liability for employers. Its responsibility as a result of serving alcohol at the party, it asserted, should have ended when Landri arrived at his home safely.
The panel rejected that contention. “[A] trier of fact could conclude that the proximate cause of the accident, Landri’s intoxication, occurred within the scope of Landri’s employment,” the court said. “[W]e focus on the act on which vicarious liability is based and not on when the act results in injury.”
No reasonable justification exists for “cutting off an employer’s potential liability as a matter of law simply because an employee reaches home,” the court added. Instead, “the employer’s potential liability under these circumstances continues until the risk that was created within the scope of the employee’s employment dissipates.”
The Purton decision opens employers up to potentially broad liability under the court’s analysis, focusing the scope of employment “on the act on which vicarious liability is based and not on when the act results in injury.”
Marriott argued that the decision would judicially legislate new law that employees drinking at an employer function must be escorted home and kept there by escort, in violation of personal privacy and liberties, for employers to avoid liability.
“Not so,” the court said. The employer “created the risk of harm at its party by allowing an employee to consume alcohol to the point of intoxication.” The court added that Marriott could have lessened its risk by enforcing a drink-ticket policy, serving drinks for only a limited time period, serving food or instituting a policy prohibiting smuggled alcohol. “Alternatively, it could have eliminated the risk by forbidding alcohol.”
After the court’s decision, many employers may choose the last option to similarly eliminate the risk of liability. “[I]f a commercial enterprise chooses to allow its employees to consume alcoholic beverages for the benefit of the enterprise, fairness requires that the enterprise should bear the burden of injuries proximately caused by the employees’ consumption,” the court concluded.
Under federal law, employers can meet minimum wage requirements for piece-rate workers by paying them enough so that their total pay meets the minimum wage, on average, for the hours they work in a work week, regardless of whether each hour was productive. But now the California Court of Appeal says that’s not true in California.
In Gonzalez v. Downtown LA Motors, the Court of Appeal held that employers who pay on a piece-rate basis for certain compensable tasks must also pay a separate minimum wage for non-productive time spent between those tasks.
In April of 2013, the California Court of Appeal decided automobile service technicians should be paid while waiting between jobs. The court held that the technicians, who were paid on a “piece-rate” basis, must also be paid at least the minimum hourly wage for the time that they are required to wait between their piece-rate paid repair jobs. The California Court of Appeal case held that piece-rate-paid employees are entitled to separate hourly pay for “waiting” time.
On July 19, the California Supreme Court refused to review the appeal court ruling, making it binding precedent. (Gonzalez v. Downtown LA Motors, LP, B235292, April 2, 2013). In its ruling, the Court of Appeal noted that California law requires that employees be paid “not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise.”
In its decision, the appellate court noted that California law provides: “Every employer shall pay to each employee, on the established payday for the period involved, not less than the applicable minimum wage for all hours worked in the payroll period, whether the remuneration is measured by time, piece, commission, or otherwise.”
This requirement really means, the court ruled, that the minimum hourly wage must be paid for each and every hour worked, no matter how the employee is normally compensated. This means that employers can no longer show that the required minimum wage has been paid by averaging the total compensation over the total number of hours worked in the pay period as permitted by the Fair Labor Standards Act (FLSA) and all other states.
“Hours worked” is defined as “the time during which an employee is subject to the control of an employer, and includes all the time the employee is suffered or permitted to work, whether or not required to do so.”
Downtown LA Motors (DTLA) had argued that its method of paying technicians complied with the plain language of the wage order because under the pay agreement technicians were paid “not less than” the applicable minimum wage for “all hours worked,” and that compliance was achieved by paying the difference if a technician’s piece compensation for all hours on the clock fell below the applicable minimum wage.
The court noted: “Under DTLA’s flag hour system, technicians earn significantly more by working on cars than waiting for vehicles to repair. They will still have the financial incentive to accrue flag hours in order to increase their earnings.” DTLA technicians accrue flag hours only when working on a repair order.
But the technicians argued that public policy does not permit piece-rate wages to be averaged across the waiting time in satisfying the minimum wage because the term “all hours worked” really means “each and every hour” worked only on piece-rate work, and that technicians should have been paid separately, at the applicable minimum wage, for “each and every” hour of time on the non-piece rate work or time spent waiting for repair work.
The appellate court held the general rule that “employers must pay for all hours worked and may not average paid, productive hours with non-paid, non-productive hours” applies to piece-rate employees. Therefore, the class of technicians was “entitled to separate hourly compensation for time spent waiting for repair work or performing other non-repair tasks directed by the employer during their work shifts.”
Federal District Court Concurs
This requirement of the California courts for piece-rate compensated workers was also recently adopted by a federal district court in a trucking case. Con-Way Freight v. Quezada, 3:09-cv-03670-JSW (June 27, 2013). In that case, the court held that drivers who were paid a piece-rate based on a pre-set mileage rate and who were also paid on an hourly rate for work performed such as loading and unloading had not been paid any wages for certain non-driving tasks, such as vehicle inspections and some waiting time at each stop.
This time spent on non-driving tasks is time that the company had contended was properly included in the piece-rate compensation system. As in the Downtown LA Motors case, the court ruled that California law required that this non-driving time be paid at a separate hourly rate, equal to at least the minimum wage.
Court Applies Rule to Commission Sales
Late last year, a similar result was reached as to commissioned salespersons. In Balasanyan v. Nordstrom, a federal trial court held that hours spent in non-sales activities were uncompensated because “compensation must be directly tied to the activity being done, whether it is selling on commission or preparing to sell on commission,” and that “activities only indirectly related to sales or services must also be compensated.”
Nordstrom commission-paid salespersons were required to engage in stocking, pre-opening, and post-closing activities. The court held that those hours were uncompensated because “compensation must be directly tied to the activity being done, whether it is selling on commission or preparing to sell on commission,” and that “activities only indirectly related to sales or services must also be compensated.”
These cases may have a profound impact upon all commission sales work in that the plaintiffs had contended, and the court appeared to agree, that “stocking” time includes all time other than face-to-face customer interaction work, which would make all such time separately compensable on an hourly basis. In a footnote to these cases, the district court indicated that it felt it was constrained by California law to reach this “peculiar result,” which “forces employers to craft hybrid compensation systems for commissioned employees where they are also paying employees per hour for any activity that is not directly related to earning a commission, even when that activity might assist in generating future profits.”
As a consequence of these decision, all California employers who pay employees on a piece rate or commission basis, including flat-rate technicians and salespersons, should review their pay plans to mitigate the risks posed by the Gonzalez v. Downtown LA Motors and Balasanyan decisions.
California employers paying on a piece-rate or commission basis must consider revamping their pay systems to separately pay the minimum wage rate for hours during which employees are subject to the employer’s control and not earning a piece rate or commission.
You can no longer divide piece work pay by total hours worked and assume you are in compliance with the law as long as the resulting hourly rate for all time at the shop is higher than minimum wage. Instead, start with hours at the job and pay minimum wage (or more) for all hours at the site, then pay a bonus based on the piece rate or other performance criteria.
At a minimum, attorneys consulted on this issue recommend:
● Consulting qualified labor and employment counsel to determine whether piece rate and commission pay plans require modification, and whether any other action is appropriate to mitigate risk based on the Gonzalez (DTLA) and Balasanyan (Nordstrom) cases.
● Modifying piece rate and commission compensation to avoid so-called “uncompensated” hours, but paying at least minimum wage directly for each hour worked (including non-flag work and work indirectly related to sales, such as moving cars or participating in team meetings);
● Reviewing and modifying itemized pay statements to ensure compliance with Labor Code section 226, which requires pay statements to show information, including total hours worked by employees, the number of piece rate units earned and any applicable piece rate, and all applicable hourly rates in effect during the pay period and the corresponding number of hours worked.
● Employers should also consider implementing arbitration agreements to control exposure to class-action lawsuits.
Additional Case Denied Review by Supreme Court Review
One chance for review of the issues related (to the requirement that minimum wages be paid for each and every hour worked by employees who are currently compensated on piece-rate and commission systems) was petitioned by the U.S. Chamber of Commerce to the California Supreme Court in late July, but the Court has since declined to hear the case.
That case is Bluford v. Safeway Stores, Inc., C066074 (May 24, 2013). The U.S. Chamber of Commerce urged the California Supreme Court to grant the petition for review. The Chamber argued that this case is yet another employment dispute in which a Court of Appeal superimposed rules developed in the wage-and-hour context on a different compensation system. Here, the appeals court held that an employer using a productivity compensation system must separately compensate piece-rate workers at the minimum hourly wage for the two 10-minute rest breaks per day that must be authorized and permitted by their employers under California law. Prior to this decision, such rest breaks had always been permitted to be included as part of piece-rate and commission plans.
Now the only option for bringing California law in line with the Federal Wage statute is the California Legislature taking action. Efforts are underway to engineer a bill on this matter.
This article is for informational purposes only and should not be considered as any form of legal advice. Always consult a qualified attorney before acting on any such news-based information.
See previous story on Gonzalez v. Downtown Motors: