Author Archives: michael

$1.2 Million Judgment Obtained in Federal Jury Trial

A jury empaneled in a federal district court has returned a verdict of over $1.2 million in an employment lawsuit brought by a former employee against Telecom Italia Sparkle of North America, Inc. (TISNA).

Plaintiff Kevin Monaghan of Carpinteria, California, who worked as an outside salesperson, alleged that TISNA intentionally misclassified him as an independent contractor.  He further alleged that TISNA terminated his employment in retaliation for his complaints about the misclassification and TISNA’s failure to pay him wages owed.  Monaghan also sought pre- and post-termination wages and commissions he had earned, but which TISNA had not paid.

The jury agreed with Monaghan, awarding him $1,233,193.35 against TISNA, plus his attorney’s fees and costs.

The verdict included $252,729 for Monaghan’s back pay and $609,153 for future economic loss on the retaliation claim and $335,000 in unpaid wages and benefits.  TISNA must also display a notice in a prominent portion of its website with an admission that it has violated the law by misclassifying employees as independent contractors.

California law forbids the willful misclassification of employees as independent contractors.  California law also prohibits employers from retaliating against workers who say they intend to make a claim with any government or law enforcement agency about their employer’s illegal employment actions.

“The verdict sends an important message that employers cannot skirt California employment laws by classifying would-be employees as independent contractors,” said Brian D. Hefelfinger, attorney for Strauss & Strauss, APC, attorneys for Monaghan.  “Nor can they simply fire an employee who exercises his right to complain about unlawful practices.”

TISNA, headquartered in New York, is a subsidiary of Telecom Italia, an Italian telecommunications company with a worldwide network of data- and voice-transmission cables.  TISNA caters to North American customers seeking bandwidth on that network.  

During the three-day trial, Monaghan presented evidence that TISNA terminated his employment one week after he voiced his complaints of illegal activities to TISNA’s Human Resource Manager.  In that email, Monaghan said he intended to file a claim with the California Labor Commissioner regarding TISNA’s failure to pay him a bonus he had earned.  The bonus was available to TISNA employees, but Monaghan, classified as an independent contractor, was ineligible.  TISNA swiftly terminated Monaghan’s employment and denied him the bonus and ongoing commissions from sales he had made prior to his termination.

“We tried to expose what we saw as inconsistencies in their story,” said Hefelfinger.  “Any time a party’s story changes, it puts their credibility at issue.  When the employer’s stated reason for a termination changes, it suggests that the real reason was illegal.  We must have done our job, because the jury found in our favor on almost every issue.”

Monaghan may now move for his attorney’s fees and costs, which are available under California law.

The case is Monaghan v. Telecom Italia Sparkle of North America, Inc., United States District Court for the Central District of California case number 2:13-cv-00646 ABC (PLA).  Copies of the documents from the case are available at

Summary Judgment Defeated in Ecolab Institutional Division Overtime Case

Ecolab Inc.’s attempt to knock out a class action brought by California employees in its Institutional Division has failed.  On Thursday, September 26, 2013, the San Francisco County Superior Court issued a ruling denying Ecolab’s Motion for Summary Judgment.  In the motion, Ecolab sought to have the court issue a ruling that plaintiffs and the class were ineligible for overtime pay based on three exemptions: the outside salesperson exemption, the commissioned salesperson exemption, and the haz/mat exemption.  The court, after an all-day hearing, denied Ecolab’s motion on all grounds.

The suit, Icard v. Ecolab Inc., seeks unpaid wages for all of the approximately 250 non-exempt Route Managers and/or Route Sales Managers who have worked in California within four years of the filing of the original complaint (i.e., back to December 21, 2005), do not cross state lines in the performance of their duties, and have not received full and correct pay for all hours worked and have not received accurate paycheck stubs. The wages sought include, but may not be limited to, unpaid overtime.  The plaintiffs additionally seek interest on all wages owed, penalties under Labor Code sections 203 and 226, and their attorneys’ fees and costs.

For more information about the Icard case, visit the Icard v. Ecolab case page at or call us at (805) 641-6600.

Affirmative Defense Defeated in Ecolab Overtime Lawsuit

On January 22, 2013, the United States District Court for the Central District of California came down in favor of Palay Law Firm’s clients on a motion for summary adjudication of Ecolab Inc.’s primary defense in an overtime class action. The case, Ladore v. Ecolab, concerns Ecolab’s misclassification of a class of about 380 pest elimination specialists as exempt from California’s overtime laws.

Ecolab has treated (and to our knowledge, continues to treat) these California workers as exempt from overtime. Ecolab has relied on the overtime exemption for carriers of “hazardous materials.” This “haz/mat” exemption, which is found in California’s IWC Wage Orders, makes an employee exempt from California overtime law if that person’s hours of service are regulated under state or federal transportation laws. Ecolab argued that California law regulates the hours of service of drivers carrying hazardous materials in trucks weighing less than 26,000 pounds and which are not required to have haz/mat placards. Ecolab claimed that anyone who carries so-called “materials of trade” in their work truck would be exempt from California overtime law. Materials of trade are materials carried by workers for the performance of their job, like, for example, a plumber who carries drain de-clogger or a painter who carries paint and paint thinner. Ecolab claimed that its pest elimination specialists, who carry limited amounts of pesticides and similar products in their sub-10,000-pound work trucks that do not require placards, fit into this exemption.

The parties brought cross motions for summary judgment on the question of whether the haz/mat exemption applies to Ecolab’s California-based pest elimination specialists. The court has now held that the exemption does not apply as a matter of law. The court analyzed the statutory and regulatory framework and concluded that “the common sense reading of the relevant regulatory scheme limits application of the Haz/Mat exemption to “drivers” whose primary duty is driving. The class members at issue do not fall within such a definition.”

The court’s decision is important in a number of respects. Had Ecolab’s position been supported by the court, plaintiffs argued that it would have exposed the single greatest loophole in California overtime law. Plaintiffs argued that employers could give their employees a material of trade (like a can of paint thinner), have them drive around the block, and claim that they were exempt from overtime as carriers of hazardous materials. Also, there are hundreds of Ecolab employees in California who are potentially affected by this ruling. The ruling is a victory for workers’ rights in California and we are proud to be a part of it.

A copy of the court’s decision is here.

Judgment against Deer Lodge in Ojai for $80k-plus

deer-lodge-spl421235_001In our experience, it’s the odd employer that fails to pay a Labor Commissioner award, especially ones worth less than $3,000. And most California employers know better than to terminate an employee for making a complaint with the Labor Commissioner. And then there is the Deer Lodge in Ojai, which did not seem to care about California labor law, according to the Ventura County Superior Court. The court recently awarded our client about $30,000 in damages and an additional $50,000 in fees and costs in the case of Walker v. The Old Roadhouse, Inc. d/b/a the Deer Lodge. These were the facts as proven at trial:

On a Tuesday in early December 2009, Plaintiff Walker, who was not working that day, went to the State Labor Commissioner’s office in Santa Barbara to get information about filing a claim for denied meal periods against her employer, The Old Roadhouse, Inc. d/b/a the Deerlodge (“Defendant”). The Deputy Labor Commissioner gave her a notice to provide to Defendant. The notice explained California law with respect to meal periods. Plaintiff proceeded to her workplace to deliver the notice, but, as the establishment was closed, she taped the notice on the front door and left a note explaining that the Labor Commissioner had given her the notice.

Defendant’s manager, Harry Frederick, received the notice and note upon opening the restaurant. The restaurant opened at 11:00 a.m. and about two hours later, at 12:19 p.m., Mr. Frederick left a voicemail for Plaintiff informing her that she need not come in for her 4:30 p.m. shift that day because the restaurant was slow and would likely close early. In fact, the restaurant remained open that day, and Defendant had another bartender cover Plaintiff’s shift.

Plaintiff showed up to work the following Sunday, which she was scheduled to work. She clocked in and, within minutes, Mr. Frederick declared that he had taken her off the schedule for that day because he thought she had quit. Plaintiff reiterated that she had not quit and had simply filed a claim with the Labor Commissioner. Mr. Frederick said it was “her right” to complain to the Labor Commissioner, but he was still taking her off the schedule. He told Plaintiff to call him the following Wednesday “to see if I was going to put her back on the schedule then.” Plaintiff called back on the following Wednesday, asking whether Mr. Frederick had put her back on the schedule. He said he had not done so. Plaintiff asked why not. Mr. Frederick then stated that she was fired.

Plaintiff’s claim proceeded against Defendant with the State Labor Commissioner’s office. The Labor Commissioner issued a decision on July 29, 2010. The decision awarded Plaintiff a total of $2,813.90 in unpaid wages, penalties, and interest. It gave Defendant ten days to appeal or pay.

Mr. Frederick received the decision and called the Labor Commissioner’s office to say he wanted to appeal the decision. However, Defendant never appealed. Defendant never paid the award amount. Plaintiff thereafter filed suit against Defendant for wrongful termination in violation of public policy and for violation of Labor Code section 206, which penalizes employers who willfully fail to pay a Labor Commissioner award.

Plaintiff was successful at trial before Hon. Harry Walsh of the Ventura County Superior Court. (See the Statement of Decision and Judgment.) The court thereafter awarded Plaintiff all of her costs and attorneys fees, which exceeded $50,000.

Unfortunately, collection efforts have been difficult. The Old Roadhouse, Inc. sold the Deer Lodge to Clubland, Inc. after the trial, and the court amended the judgment to add Clubland, Inc. as a judgment debtor.

Mike Strauss is a Panelist at an Employment Mediation Roundtable MCLE

On September 26, 2012, Mike Strauss will be among four employment litigation attorneys who will be panelists at a roundtable discussion about using mediation to resolve employment disputes. The discussion, for which attendees can receive one hour of general MCLE credit, will take place at the Ventura County Bar Association and is hosted by its Alternative Dispute Resolution Section. Mike is expected to give tips and tell stories about his experiences using mediation in his employment cases. For more information, contact Mike at (805) 641-6600.

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