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What You Need To Know in 2019 Series: Important Cases of 2019 Part Two

What You Need To Know in 2019 Series:
Important Cases of 2019
6 of 6

Important Cases of 2019: Part Two

A number of recently resolved cases may affect how you do business. Do you know what you have to do as an employer and when? Read more about these important updates to labor and employment law below.


AMN Healthcare v. Aya Healthcare Services (2018): Non-Compete Agreements for Recruiters

California Court of Appeals upheld summary judgment in favor of Defendant employees and their new employer on claims of breach of contract, misappropriation of trade secrets, interference with prospective economic advantage, aiding and abetting misappropriation of trade secrets, and unfair business practices.

The case details:

  • AMN and Aya are competitors in the business of providing travel nurses to medical care facilities
  • Four of AMN’s recruiters were hired by competitor, Aya, and then recruited other AMN employees (travel nurses) to work for Aya.
  • AMN employment agreement provided that “during Employee’s employment with the Company and for a period of one year after the termination….Employee shall not directly or indirectly solicit or induce, or cause others to solicit or induce, any employee of the Company…to leave the service of the Company….”
  • AMN sued four of its former recruiters after they were hired by Aya to recruit nurses

What does the AMN Healthcare decision mean for employers?

In the case, the Court questioned whether provisions prohibiting former employee from soliciting current employees are still enforceable in California, but did not ultimately decide the issue.  Instead, the Court relied on the actual employment functions of the recruiters to conclude that the contract restrained employees from engaging in their profession and was actually an unenforceable non-compete agreement.

  • I.e., since the recruiters’ job was to contact travel nurses and encourage them to come work for their company, preventing them from contacting travel nurses employed by their former employer prevented them from earning a livelihood.

The Court also rejected AMN’s claim that names and contact information of the travel nurses employed by AMN was a trade secret on the basis the information was not actually secret.

  • The names and contact information for the travel nurses was available on a public social media group for travel nurses; and
  • Travel nurses had also applied to work for Aya Healthcare years before working AMN Healthcare, and had provided Aya with their contact information

Hernandez v. Pacific Bell (2018): Company Vehicles and Work Time

Two employees brought a class action against Pacific Bell on behalf of current and former employees who installed and repaired video and Internet services in customers' homes seeking compensation for the time they spent traveling in an employer-provided vehicle—loaded with equipment and tools—between their homes and a customer's residence.

  • Before 2009, all technicians were required to report to work and pick up their Company vehicles (and all equipment and tools) from a Company garage, and their work day began at the garage (i.e., they were paid from the time they arrived at the garage to pick up their Company vehicle).
  • After 2009, technicians were given the option of taking a Company vehicle home with them, loaded with their equipment and tools, and using the Company vehicle to commute from their home to their first work site for the day.  Employees participating in the “home dispatch program” were paid from the time they arrived and began work at their first customer’s residence, and were not paid for the time spent traveling from their home to the customer.

The plaintiffs argued that the time spent traveling in the Company vehicle to and from their homes and their worksites was compensable because they were under the control of the Company, due to the numerous restrictions the Company placed on their use of the Company vehicle.

  • Under the home dispatch program, technicians could use the Company vehicle only for Company business, and only authorized persons could ride in or drive it.
  • For example, technicians could not stop on the way to or from a customer's house to run errands or drop off or pick up children from school.
  • Technicians also were prohibited from talking on their cell phones while driving the Company vehicle-- before using a cell phone while driving was against California law.


What does the Hernandez decision mean for employers?

  • The California Court of Appeals held that the time employees spent commuting from their home to their first customer for the day was not “hours worked,” despite the restrictions placed on the use of the Company vehicles.
  • Not “hours worked” because the “home dispatch program” was optional—employees were not required to use a Company vehicle to commute to and from work.  Employees could choose either to report to work at the garage (as everyone did before 2009) or to take their Company vehicle home with them.
  • The court also found that the fact that they also transported certain Company equipment and tools in the Company vehicle during their commute did not render the time compensable when no extra effort or work was involved in transporting the equipment and tools.

Serrano v. Aerotek (2018): Staffing Agencies and Meal Periods

An employee sued a staffing agency and its client, Bay Bread, alleging claims against both defendants based on their failure to provide meal periods.

  • Bay Bread had its own meal period policy that applied to its employees; temporary employees were covered by the staffing agency’s meal period policy.
  • Staffing agency conducted an orientation and training regarding its policies, including its meal period policy, with the temporary employees;
  • Employee alleged that she took several late meal periods (i.e., beginning after she had worked five hours) and was unable to take several meal periods;
  • Employee was unable to identify any actions taken by the staffing agency that prevented her from taking her meal breaks, but instead alleged that they failed to ensure that Bay Bread (the staffing agency’s client) implemented appropriate meal break policies.
  • Court of Appeal held that staffing agency fulfilled its obligations to provide meal periods.
    • It had compliant meal period policies;
    • It trained its employees on its meal period policies, and instructed employees to notify them if they were unable to take meal periods;
    • Its contract with its client stated that Bay Bread was required to comply with all applicable laws.
    • The court noted that the staffing agency was not required to take affirmative steps to verify that its client Bay Bread was implementing appropriate meal breaks.
    • Court also noted that the staffing agency was under no obligation to investigate when time records showed that employee took late breaks, or missed meal breaks, and specifically rejected contention that time records showing late or missed meal periods create a presumption of violations.

This update is the sixth of six, don’t miss out on the other posts in the
What You Need To Know in 2019 Series.

What You Need To Know in 2019 Series: Important ...

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