Attorney Jonathan Fraser Light discussed business law pitfalls Thursday morning at the University Club of Santa Barbara.
The Santa Barbara Executive Roundtable invited Fraser Light of LightGabler LLP to talk about insurance, workers compensation, embezzlement, business documents, arbitration, confidentiality, overtime, independent contractors, disability and termination.
Fraser Light recommended employment practice liability insurance to start, which covers all legal costs other than punitive damages and wage and hour claims.
“It’s one of the things you can do as a safety net for your company in case you get sued,” he said. “One of these cases can make your life miserable. The average litigation is a $200,000 legal bill, and if you win you don’t get your money back.”
But Fraser Light said he has noticed an uptick in wage and hour claims lawsuits. Before Brinker Restaurant Corporation v. Superior Court, an employee had to take his or her 30-minute meal breaks. The Brinker case established that the meal break is voluntary just like the rest break, Fraser Light said.
“The problem could be that the employee could come back later and say, ‘Well, I had to skip it because the business required me to,’ or, ‘We had too much work that day and had to shorten or delay my lunch after the fifth hour,’” he said.
Employers have to make sure they have offered employees a meal break and that they cannot come back and blame the company, Fraser Light added.
He said one misconception is that exempt employees, or salaried workers, can’t qualify for overtime.
One example is a Starbucks store manager who handled payroll, budgets and human resources business. By federal law, his primary duty is a manager and is exempt from overtime. But California law dictates that the primary duty is defined by whatever the worker spends most of his time doing, Fraser Light said.
“If you walk into Starbucks, what’s the manager doing? More than 50 percent of the time they are cleaning up and pouring coffee like everybody else,” he said. “So they do not qualify for that managerial exemption. Starbucks ponied up about $15 million several years ago all because California is different from everybody else.”
Fraser Light said it’s best to defer to California law.
“Whichever one most favors the employee is the one you have to follow, and typically that’s California law,” he said. “So we have this bright-line test that just paying a manager isn’t enough.”