trends

Dealing With Your "Former"

One of the most hotly litigated areas of law in hard economic times is employment law, and more specifically, the termination of employees. Often, based on the pure realities of the situation, companies must downsize in order to remain competitive. However, in order not to fall into a situation that could result in potential litigation with a terminated employee, basic employment laws and regulations must be adhered to.

Before one can discuss the termination of an employee, it is first important to define what an employee is. In California, Labor Code Section 3357 controls the issue of whether someone is an employee. However, this is a rebuttable presumption, and the actual determination of whether a worker is an employee or independent contractor depends on a number of factors.

In short the "economic realities" test adopted by the California Supreme Court in the case of S. G. Borello & Sons Inc. vs. Department of Industrial Relations (1989) 48 Cal.3d 341 has set forth the factors used to determined whether an one is an employee or an independent contractor. In regard to the economic realities test, the most significant factor to be considered is whether the person to whom service is rendered has control or the right to control the worker both as to the work done and the manner and means in which it is performed. If not, then the person may be considered an independent contractor.

Assuming that the person terminated is an employee, it is important to keep in mind that California is an "at will" employment state. This basically means that anyone can be fired at any time for any lawful purpose, if there is no employment contract. However, no one can be terminated based upon a protected class — race, color, religion, national origin or sex as well as age and disability. Disability also includes pregnancy.

If an employee is to be terminated for cause — meaning that the termination is based on performance issues of that employee — and the employee fits into one of the protected class, it is imperative that the employer document the performance issues completely before any such termination. Often, verbal warnings are not sufficient, and it is necessary to document the employee's performance or insubordination issues well in advance of the termination. Without such written warnings employers can find themselves in a defensive position attempting to explain why the employee's termination was not a result of discriminatory termination practices.

If the employee is to be terminated without cause and his/her termination is due to the economic business realities of the company's current financial situation, it is more difficult to document the need to lay off the employee. It is recommended that, if possible, layoffs be conducted in groups and not of single employees. If a layoff occurs in group fashion, it will be easier for the employer to justify the layoff of anyone who might be one of the protected classes.

Now that the employer has terminated or laid off the employee, is the relationship concluded? The simple answer usually is no; even if the employee has been terminated for cause, the employer still might have to defend a wage, hour or overtime claim in front of the Division of Labor Standards and Enforcement. The former employee also might file a claim for unemployment insurance benefits.

How this next step proceeds usually depends on why the employee was terminated, how the employee was terminated and whether during the employment the employer properly classified and compensated the employee.

If the employee was terminated without cause and was laid off, they would be entitled to benefits through unemployment insurance. If the employee was terminated for cause, he or she still might file an unemployment claim; however, if the employer has documented the employee's poor performance or insubordination, the claims can be challenged and often defeated in an administrative court.

If the employee was not properly paid for overtime, meal breaks or for their overall compensation, that employee can file a wage and/or overtime claim with the Labor Board or directly with a court of competent jurisdiction. If litigation does ensue, it often can be costly for the employer. Therefore, it also is imperative that employers keep accurate records and time slips during the employee's term of employment. Again, as with any litigation, the most important aspect to remember is to document, document and document some more. Accurate time slips including break times are necessary to defend any claims of improper payment of wages.

A quick note about the classification of employees: Overtime at a rate of one and a half times their usual pay rate must be paid if an employee works more than eight hours per day, whether that employee reaches 40 hours per week or not. This is a recent change in the law. It use to be that overtime would not be due and owing to an employee until after that employee reached 40 hours worked in a calendar week. If an employee is a supervisor and has at least two other subordinate employees under their direct control, they can be classified as managers and not be paid overtime. Whether an employee is an hourly or salaried employee is immaterial to whether they need to be paid overtime.

It also is important to note that most states require that a terminated or laid-off employee be provided their last paycheck within a certain amount of hours and or days from the date of the separation. Therefore, it usually is advisable to provide the former employee with all wages due at the time of the actual notice of separation.

Obviously this article is not exhaustive as to the legal requirements involved with the termination and layoff of employees. Nor is it complete as to the classification of employees or payment of overtime wages. It is strongly recommended that any company seek the advice and counsel of both an attorney well-versed in employment law and a specialist in human resources.

Often, many of the problems with the termination of an employee can be solved in the hiring process. Knowing whom to hire and not hire often is the best defense against possible future claims and lawsuits. Choosing the right potential candidate(s) is a minefield that has to be navigated carefully. Just as with termination, discriminating against certain potential candidates can lead to claims of discrimination and potential litigation.

Michael Fattorosi is founder and managing partner of Fattorosi & Associates, a full-service boutique law firm in Woodland Hills, Calif. Areas of practice include adult entertainment law, music law, business litigation, employment litigation and intellectual property.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More Articles

opinion

Rebranding Sexual Wellness Through a Self-Care Approach

As most of us in the industry already know, sexual wellness remains the black sheep of self-care. Discussions about wellness glorify meditation apps, skincare routines and workout regimens — but mention masturbation or using a sex toy, and most people shy away from the topic.

Hail Groo ·
profile

WIA Profile: Leah Koons

If you’ve been to an industry event lately, odds are you’ve heard Leah Koons even before you’ve seen her. As Fansly’s director of marketing, Koons helps steer one of the fastest-growing creator platforms on the web.

Women in Adult ·
opinion

Why Sex Toy Innovation Isn't What Shoppers Want Right Now

During my first year in the industry, the luxury vibrator on shelves was LELO’s Gigi, priced at $109. It was made with high-quality silicone, boasted an ergonomic design, a travel lock and a warranty. Soon after, Je Joue released its first product, SaSi, which employed “rolling ball” movements to simulate oral sex.

Sarah Tomchesson ·
opinion

What France's New Law Means for Age Verification Worldwide

When France implemented its Security and Regulation of the Digital Space (SREN) law on April 11, it marked a pivotal moment in the ongoing global debate surrounding online safety and access to adult content.

Corey D. Silverstein ·
opinion

How Adult Retailers Can Enhance Sales With Supplements

The supplement industry is big business. In 2024, Future Market Insights estimated it to be valued at $74.3 billion, and other market research firms anticipate that number will grow to upwards of $170 billion in just 10 years.

Rick Magana ·
opinion

From Tariffs to Trends: Staying Resilient in a Shaky Online Adult Market

Whenever I check in with clients these days, I encounter the same concerns. For many, business has not quite bounced back after the typical post-holiday-season slowdown. Instead, consumers have been holding back due to the economic uncertainty around the Trump administration’s new tariffs and their impact on prices.

Cathy Beardsley ·
opinion

Why It's Time the Pleasure Industry Got Serious About IPX Waterproof Ratings

As someone who regularly communicates with manufacturers, retailers and consumers, I’ve seen how this ambiguity can do a disservice to both the customers who use these products and the businesses that sell them.

Alicia Sinclair Rosen ·
opinion

Optimizing Payment Strategies for High Ticket Sales

Payment processing for more expensive items, such as those exceeding $1,000 per order, can create unique challenges. For adult businesses, those challenges are magnified. Increased fraud risk, elevated chargeback ratios and heavier scrutiny from banks and processors are only the beginning.

Jonathan Corona ·
opinion

Tips for Sexual Wellness Brands to Win Over Gen Z This Summer

As summer rolls around, the excitement in the air is palpable, especially for one particular demographic: Gen Z. College and university classes are over, vacations are booked and it’s time to let loose.

Naima Karp ·
opinion

Celebrating the LGBTQ+ Community With Inclusive Packaging Design

Pride Month is a time of visibility, joy and self-expression. In the pleasure industry, projecting that energy can start with something as simple as a box. Market research shows that 72% of U.S. consumers say product packaging influences their purchasing decisions.

Matthew Spindler ·
Show More