Naranjo v. Spectrum Sec. Servs., Inc., No. S258966 (Cal. May 23, 2022)

An employee of a secure custodial services company filed a class action suit in California state court against his employer, alleging the company violated state meal break requirements under the labor code as well as applicable state wage order law. 

The employee sought an additional hour of pay, known as “premium pay,” for each day on which his employer failed to provide a legally compliant meal break. He further alleged his employer was required to report this premium pay on employee wage statements, and to timely provide the pay to employees upon their discharge, but failed to do so. The employee sought damages and penalties for himself and on behalf of the class.

The company argued meal and rest period premiums cannot form the basis for such claims because they did not constitute “wages” as that term is defined in the relevant statute. While the court noted that premium pay is designed to compensate employees for hardships they should not be made to endure, it likewise found that the pay owed can equally be viewed as wages for “rendering work.” The court compared this to other forms of premium pay that are intended to compensate employees for working under hardship conditions, including overtime pay, reporting-time pay, or split-shift pay. Accordingly, the court held that the amounts in question must be included on wage statements, and found non-payment of same can form the basis of a claim for penalties under the law. 



Ziccarelli v. Dart, No. 19-3435 (7th Cir. Jun. 1, 2022)

Recently, the Seventh Circuit Court of Appeals published an opinion that partially revives a lawsuit filed by a retired correctional officer against his former employer and former benefits manager, holding that discouraging an employee from taking leave can violate the Family and Medical Leave Act (“FMLA”), even if the leave request is not formally denied. 

The suit alleged violation of the officer’s rights under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the FMLA.


According to the complaint, over the former officer’s decades-long career, he developed multiple health conditions, including work-related post-traumatic stress disorder (“PTSD”). When the officer had used 304 hours out of the yearly 480 hours allotted to him under FMLA, and requested to use the rest of his hours (as well as his sick leave) to attend a PTSD treatment program, the benefits manager informed him he could not take any more time off, and that he would be disciplined if he attempted to use any more FMLA hours. The former officer claimed that, out of fear of being fired, he retired several days afterward and filed the lawsuit months later.


On appeal, the former officer argued his FMLA rights had been violated when the benefits manager discouraged him from taking leave. The appellate court held in favor of the former officer, pointing out that the plain language of the FMLA broadly prohibits employers from interfering with, retraining, or denying the exercise of an employee’s rights under the statute, and prohibits discriminating against employees for exercising such rights. “Threatening to discipline an employee for seeking or using FMLA leave to which he is entitled clearly qualifies as interference with FMLA rights,” the Seventh Circuit concluded. “A reasonable jury could believe [the former officer’s] account and find that the Sheriff's Office [through its benefits manager] interfered with his remaining FMLA leave hours for [the year] by threatening to discipline him for using them.”


PMTD Rests., LLC v. Houston Cas. Co., 2022 WL 1398149 (N.D. Ga. Mar. 23, 2022)

A former restaurant employee filed a Charge of Discrimination with the U.S. Equal Employment Opportunity Commission (“EEOC”) against their employer. Several months later, the same employee filed another EEOC charge against the employer for discrimination. 

The following year, the employee filed suit against the restaurant. Shortly after the suit was filed, the restaurant first provided notice to its employment practices liability (“EPL”) insurer under the policy in place at the time.

The insurer denied coverage on the grounds that there was no claim “made or brought” during the applicable policy period. After prevailing at trial in the underlying matter, the restaurant filed an action against its insurer seeking reimbursement for its defense costs in connection with the EEOC charges and the lawsuit.

The court held that because both EEOC charges and the lawsuit were brought by the same claimant, the matters were considered “one insured event,” and were therefore deemed “made or brought” on the date of the first EEOC charge, before the inception of policy period under which the suit was noticed. Because there was no claim “made or brought” during the policy period, the restaurant was not entitled to coverage under its EPL policy 


The Takeaway

Timely reporting of any EEOC charge (and not just the lawsuit) would likely have avoided this coverage dispute and the negative outcome for the insured. It is equally important to ensure timely reporting of demands, attorney letters, and other correspondence from claimants or their representatives.