California’s DFEH Announces a Tentative, Multi-Million Dollar Settlement with Verizon to End a Class Action, Family Leave Lawsuit

Home/Blog/California’s DFEH Announces a Tentative, Multi-Million Dollar Settlement with Verizon to End a Class Action, Family Leave Lawsuit

Historic Settlement: California’s Department of Fair Employment and Housing (DFEH) has just announced what could become the largest settlement in the history of the DFEH if approved by the Court. To put this in perspective, the DFEH reports that the proposed settlement amount of $6 million dollars against Verizon, is an amount equivalent to an entire year of settlements by DFEH’s Enforcement Division.

Summary: On November 30, 2010, California’s Department of Fair Employment and Housing announced that Verizon has agreed to pay as much as $6,011,190 to its current and former California employees to settle a class-action lawsuit filed by California’s Department of Fair Employment and Housing (DFEH), challenging the company’s family medical leave practices. DFEH reported that Verizon “cooperated fully” with the DFEH’s investigation and also did not admit to any wrongdoing in settling the lawsuit. This proposed settlement is still subject to final approval by the Court. It should be self-evident that this proposed settlement figure exceeds reported gross earnings for many employers. When Verizon’s cost of defense is added to the proposed settlement figure, the total cost to Verizon will likely be far in excess of 6 million dollars. But, if the settlement is approved by the Court, then the consequences to Verizon are far more than just financial loss.

State Oversight: As part of the proposed settlement, Verizon reportedly agreed to also review its leave policies and procedures; to continue an existing internal review process that employees can invoke to appeal denials of leave; to train all of its California officers, managers, supervisors and human resource personnel in family leave procedures; and to also submit “regular updates” to the DFEH regarding the Company’s compliance with California’s Family Rights Act. In other words, as part of the settlement, DFEH is now engaged in on-going oversight and control of Verizon’s family leave practices. The intrusiveness of this on-going oversight by the state into Verizon’s employment practices should be self-evident and, by itself, should cause any employer to reconsider its current leave policies, practices and procedures.

Two-Year Investigation: Most employers would be mortified to have any state or federal agency conducting an on-going investigation of their employment practices for even a few days, or a week, or a month. DFEH reports that its “Special Investigations Unit” conducted a “two-year investigation” into Verizon’s practices under the California Family Rights Act (CFRA), which is California’s version of the federal Family Medical Leave Act (FMLA). As is often the case, employers that do business in California are generally subject to the requirements of both the state (CFRA) and federal (FMLA), family medical leave laws, if they have (50) fifty or more employees within 75 miles of their worksite(s).

Class-Action Covered 3-Year Period: DFEH’s class-action lawsuit against Verizon covered a three-year period, from 2007 to 2010, alleging that Verizon denied or failed to timely approve class members’ requests for leave for their own serious health condition, or to care for a family member with a serious health condition, or to bond with a new child. The class-action lawsuit also contained allegations of wrongful termination/retaliation. DFEH alleged that Verizon fired some class members for reportedly violating Verizon’s attendance policy for a CFRA-qualifying reason.

DFEH Reports that Such Enforcement Actions Will Continue: When announcing the proposed settlement, DFEH proudly reported that “

[T]he DFEH will continue to pursue high-impact group and class actions to more effectively enforce California’s civil rights laws and to eliminate systemic discrimination.” (Source: DFEH News Brief, November 30, 2010).

General CFRA-FMLA Coverage Provisions: Under both federal (FMLA) and state (CFRA) family medical leave, an eligible employee may receive up to 12 weeks of unpaid leave for an employee’s own serious health condition; or to care for a family member with a serious health condition; or for the birth of/care for a newborn child; or for the adoption or foster care placement of a child with an employee. Recent amendments also include 12 weeks of military exigency leave for an employee when a family member-reservist is called to active duty; as well as 26 weeks (6 months) of leave (less leave already taken) to care for an injured service member during rehabilitation. Finally, family medical leave is just one of a myriad of state and federal leave laws with which an employer must comply.

What You Can Do: Let’s acknowledge the obvious – Many employers will never survive a multi-million dollar settlement described here. As an employer, you cannot underestimate the potential, financial liability that awaits you if you ignore California’s employment laws. In this state, multi-million dollar, class-action lawsuits have become the norm to address violations of wage and hour laws, or as in this case, leave laws. If you wait until the first lawsuit is filed, it may already be too late. The time to act is now. A timely, top-down compliance review of your Company’s current leave policies, practices and procedures should be completed. If you need professional assistance, then you should retain that resource.

As always, it is critical that your management team has the tools, especially the essential training, that it needs to insure that it is capable of acting consistent with both state and federal leave requirements. Finally, when it comes to your employees, you cannot play “hide the ball” with your leave policy. Your leave policies, practices and procedures must be transparent. You must communicate your leave policies, practices and procedures to your employees. Employees must understand their rights and responsibilities when requesting or receiving a leave of absence. Your internal procedures should also include an internal oversight process to insure that employee challenges to leave denials are timely considered and properly addressed. To protect your Company’s interests, it is also absolutely essential that you keep thorough records of all leaves taken as well as all requests for the same. Failure to act could have serious repercussions that you may wish to avoid at all costs.

(This general information is not intended, nor should it be relied upon, as legal advice. All employers are urged to consult with an attorney before taking any action in response to this

December 1st, 2010|Blog|0 Comments

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