Small Details Can Lead to Big Problems

As you know, I don’t normally write “alarmist” pieces, and I rarely alert clients to the activities of other law firms. However, there is a law firm in Southern California that all Employers need to be warned about.

More Than Hearsay  
Personally, I have handled at least 10 claims in the past 6 months resulting from this firm finding clients in the Sacramento area. It is unaware how they are gaining clients, but it is their standard practice to write a letter on behalf of their client (former employee) asking for copies of payroll records and personnel files, which they have a legal right to do. What they don’t tell you is that if you do not respond within twenty-one (21) days with payroll records, and thirty (30) days with the personnel file, then you are already in violation of the law before they even review any of your documents. This firm then proceeds to review those documents and if they find any violation of law (no matter how minor or technical) they send a multi-page letter threatening a class action lawsuit; a claim under the Private Attorney’s General Act, and claiming tens of thousands of dollars in damages.

Settling For Less
It is interesting to note, however, that they then offer to settle the claim for a third or less ($25,000 to $30,000, usually) and then the negotiation begins. This firm, as far as I can tell, settles hundreds of these claims for $6,000 – $10,000 each, which is a fraction of what you would have to spend defending the technical breach of law that you have committed, while rewarding them with a substantial revenue stream. I have also spoken to legal counsel for Employers in the Bay Area that have also handled roughly the same number of these claims and have the exact same experience as I have.

Review, Review, Review!
Forewarned is forearmed, I am advising all Employers to undertake a review of their policies and procedures at this time to make sure every detail is documented and clearly understood. Claims that this firm have brought forward may allege wrongful termination, but often are based more on violations of minor rules such as not having records of meals and rest breaks, when those breaks occurred, or violations of paystub law. These violations can include requiring such things as a beginning and ending date of payroll periods, the last four digits of the employee’s Social Security number or an employee identification number, or the address of the Employer. Other claims are based upon employees not getting the full thirty (30) minutes for their meal period, even though it may have only happened infrequently. Such minor infractions of law would generally not merit much of a case and/or claim by most attorneys, but they do constitute a technical violation and, as noted about, it is difficult to advise clients to spend tens of thousands of dollars defending themselves when the matter can be settled for substantially less.

Take Action Today
What is prudent is to undertake a review and make sure that you are doing things according to law, and avoid these types of claims all together. Any Employer who wishes assistance in this area can call and set up an appointment and I will be glad to assist you in avoiding these claims for a fraction of the cost that it will take even to settle them in the future. Don’t let the Sacramento area be their target any longer.

For further information regarding these requirements and/or assistance in drafting, please contact Dave Cohen at Cohen Durrett/The Employers’ Council (916) 927-8797.  Power Inn Alliance members receive a complimentary initial consultation.