Small Employers Alert: AB 23 - Cal COBRA Amendment

Small employers - take note! Governor Schwarzenegger signed AB 23, which implements the federal COBRA amendments contained in the "stimulus" bill (ARRA) and applies it to small employers covered by Cal-COBRA. This is an "urgency statute" that took effect on May 12, when it was signed into law.

Is your head spinning? Mine too. We're a small employer, too.

Well, the good news is most small employers rely on their health plans to distribute Cal-COBRA notices. So, just check with your insurers and brokers about this, mmmkay? I hope they will have this covered.

In case they don't - The new law will require notices to be sent to anyone having a qualifying event between 9/1/08 and May 12, 2009 ASAP (May 26, even). The notices explain eligibility for premium discounts under ARRA and give those who did not elect Cal-COBRA a second chance to do so.

The premium discounts offered to Cal-COBRA-eligible employees will result in tax deductions taken by the insurance companies in the case of Cal-COBRA. There will be verification of Cal-COBRA qualifying events to ensure those electing Cal-COBRA and seeking premium discounts are eligible under ARRA.

Incidentally, if you've missed all the hullabaloo about ARRA and the COBRA amendments, you can catch up here.

Court of Appeal: Arbitrate DLSE Wage Claim

So, can an employer require employees to bring wage claims in arbitration instead of at the Division of Labor Standards Enforcement? If the arbitration agreement is otherwise drafted properly, Yes.

As explained by the court,

Frank Moreno is a former employee of Sonic, which owns and operates an automobile dealership. As a condition of his employment with Sonic, Moreno signed a predispute agreement that required both parties to submit their employment disputes to "binding arbitration under the Federal Arbitration Act, in conformity with the procedures of the California Arbitration Act (Cal. Code Civ. Proc. sec. 1280 et seq. . . .)." By its terms, the arbitration agreement applied to "all disputes that may arise out of the employment context . . . that either [party] may have against the other which would otherwise require or allow resort to any court or other governmental dispute resolution forum[,] . . . whether based on tort, contract, statutory, or equitable law, or otherwise." At some point, Moreno left his position with Sonic. In December 2006, Moreno filed an administrative wage claim with the Labor Commissioner for unpaid
vacation pay pursuant to section 98 et seq. Moreno alleged that he was entitled
to unpaid "[v]acation wages for 63 days earned 7/15/02 to 7/15/06 at the rate of
$441.29 per day."

So, why was the agreement enforceable even against the Labor Commissioner? The court of appeal decided that there was nothing precluding the substitution of the arbitrator for the deputy labor commissioner. The plaintiff argued that arbitration would not include the special stautory provisions regarding the de novo appeal to superior court after the hearing. But the court was unpersuaded. The court also found that the agreement complied with the protections of the California Supreme Court's decision in Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83. The court did not analyze the agreement's provisions, though. So, we have to assume that this agreement was sufficiently "mutual," provided for the employer to bear the unique costs of arbitration, etc.

The case is Sonic-Calabassas A, Inc. v. Moreno, and the opinion is here.

California Court of Appeal: "Me Too" Declarations Admissible

"Me too" evidence is when a plaintiff attempts to prove discrimination by showing that other employees have suffered discrimination. It can come in the form of live testimony at trial, or declarations in opposition to a motion for summary judgment.

Back in 2008, the Supreme Court of the U.S. held that "me too" evidence was neither categorically admissible nor inadmissible. We posted about that here.

California's Evidence Code is similar to the Federal Rules of Evidence in a number of respects. The Court of Appeal recently decided that co-employees' declarations claiming similar discrimination was admissible to defeat a motion for summary judgment.

Basically, the plaintiff, Dewandra Johnson, claimed discrimination against her because of her pregnancy. The employer, United Cerebral Palsy / Spastic Children's Foundation etc., claimed it fired her because she falsified time records. The Court of Appeal, reversing summary judgment in favor of the employer, found several issues from which the jury could determine that the real reason was discrimination. These evidentiary submissions included declarations from co-workers that claimed the same managers who fired the plaintiff had trumped up reasons for discharging them on the basis of pregnancy. Here's what the court said:

5. Declarations from Other Employees Also Constitute Substantial Evidence That
Requires Reversal of the Summary Judgment
The challenged "me to[o]" declarations that plaintiff included in her opposition to defendant‟s motion for summary judgment constitute substantial evidence requiring reversal of the judgment. Former employees of defendant stated in their declarations that (1) they too were fired by defendant after they became pregnant, (2) they know of someone who was fired by defendant because she was pregnant, (3) they resigned
because Jimenez made their work stressful after they notified her they were trying to become pregnant, or (4) they know of occasions when employees who were
dishonest or cited for dishonesty, were not fired by defendant. These employees
worked at the same facility where plaintiff worked, they were supervised by the
same people that supervised plaintiff (Jimenez and Sandgren), and their supervisors were, in turn, supervised by Jones. This is substantial evidence sufficient to raise a triable issue of material fact as to why defendant fired plaintiff.

The Court of Appeal then surveyed the case law supporting admission of this evidence to show pretext, concluding:

The evidence sets out factual scenarios related by former employees of the defendant that are sufficiently similar to the one presented by the plaintiff
concerning her own discharge by defendant, and the probative value of the
evidence clearly outweighs any prejudice that would be suffered by defendant by
its admission. Dissimilarities between the facts related in the other employees‟ declarations and the facts asserted by plaintiff with regard to her own case go to the weight of the evidence, not its admissibility.

So, the case turns on the similarity between the plaintiff's claims and her co-workers'. Had the co-workers' evidence been less similar, the court might have decided their admissibility a different way.

The case is JOHNSON v. UNITED CEREBRAL PALSY/SPASTIC CHILDREN‟S FOUNDATION OF LOS ANGELES AND VENTURA COUNTIES, and the opinion is here.

DFEH Issues 2008 Annual Report

The California Department of Fair Employment and Housing enforces California's Fair Employment and Housing Act, the anti-discrimination and medical leave law. The agency just issued its annual report for 2008, which you can find here. It's graphic-heavy and mercifully short!

Of note, the DFEH noted discrimination complaints were up nearly 20% over 2007. The agency took in about 20,000 discrimination charges, almost 19,000 of which alleged employment (rather than housing) discrimination.

How does that break down? The most common form of discrimination alleged? Disability (about a third of the charges filed). Retaliation was right behind disability. Race, sexual harassment, and age discrimination constituted about 20% each of the total.

DFEH settled about 960 cases, for about $9.5 million in payments from employers and landlords to complainants.

Finally, the report highlighted the new automated charge filing system, and the new automated right to sue system. They're also working on intake filing by telephone, which should result in a lot more charges.

The best way to avoid a charge is prevention. Besides a solid policy and training, communication with employees and an effective system for complaints are the best way to prevent claims to third parties like the DFEH.

DGV

U.S. Supreme Court: Preganancy Discrimination Act Not Retroactive

AT&T's old pension plan used to provide that employees on pregnancy disability leave did not receive the same service credit as employees on leave for other disabilities. Just before Congress enacted the Preganancy Discrimination Act, in 1978, AT&T modified its service credit calculations prospectively, but still calculated pre-PDA service under its pre-PDA rules. Before the PDA, AT&T's calculations were legal under Supreme Court precedent interpreting Title VII.

Four AT&T employees sued AT&T, claiming that perpetuating the calculation of service credit violated the PDA because their pension benefits were reduced as a result of the pre-PDA calculation. The EEOC joined in, as did the Communication Workers' Union. The district court and Ninth Circuit agreed with the Plaintiffs.

However, the Supreme Court, on a 7-2 vote, reversed. The Court's decision, penned by soon-retiring Justice Souter, turned on a number of reasons, the most significant of which are:
- the prior calculation was a "seniority system" exempt from Title VII (pre-PDA);
- the calculation was considered lawful under Supreme Court precent, General Elec. Co. v. Gilbert, 429 U. S. 125 (1976); therefore, AT&T could not have intentionally discriminated by adopting the old system;
- the PDA was not retroactive;
- the Lilly Ledbetter Fair Pay Act did not save her claim because the underlying pre-PDA decision was not itself discriminatory.

Justice Stevens joined the majority, but also wrote a concurrence noting he was bound by the pre-PDA Supreme Court opinion, General Elec. Co. v. Gilbert, 429 U. S. 125 (1976), although he dissented in that case.

Justices Ginsburg and Breyer dissented. The dissent traced a history of discrimination against pregnancy in the workplace. Acknowleding that the PDA was not retroactive, the dissent in essence argued that because Gilbert was SO wrongly decided, it should not affect the decision in the present case. Here's the essence of the dissent:

The PDA does not require redress for past discrimination. It does not
oblige employers to make women whole for the compensation denied them when,
prior to the Act,they were placed on pregnancy leave, often while still ready, willing, and able to work, and with no secure right to return to their jobs after childbirth.[fn] But the PDA does protect women, from and after April 1979, when the Act became fully effective, against repetition or continuation of pregnancy-based disadvantageous treatment. Congress interred Gilbert more than 30 years ago, but the Court today allows that wrong decision still to hold sway. The plaintiffs (now respondents) in this action will receive, for the rest of their lives, lower pension benefits than colleagues who worked for AT&T no longer than they did. They will experience this discrimination not simply because of the adverse action to which they were subjected pre-PDA. Rather, they are harmed today because AT&T has refused fully to heed the PDA’s core command: Hereafter, for "all employment-related purposes," disadvantageous treatment "on the basis of pregnancy, childbirth, or related medical conditions" must cease. 42 U. S. C. §2000e(k) (emphasis added). I would hold that AT&T committed a current violation of Title VII when, post-PDA, it did not totally discontinue reliance
upon a pension calculation premised on the notion that pregnancy-based
classifications display no gender bias.

The case is AT&T Corp. v. Hulteen, and the opinion is here.

Court of Appeal: Employee's Obligations re Reasonable Accommodation

Carmine Scotch worked as an instructor for The Art Institute of California - Orange County. He had HIV. The institute's accreditation standards require instructors to have certain certification and education credentials / degrees. They allow some instructors to work towards those credentials after hire.

In 2004, the institute's management prepared for accreditation audits by identifying instructors lacking the education credentials required to maintain accreditation, including Scotch. By the end of 2005, Scotch had still not enrolled in a master's program. The institute even agreed to pay for degrees obtained at a local university.

Scotch received a poor performance review in early 2006. He disputed it, claiming it was retaliation for a leave he took during the previous winter. He also disclosed to HR that he had HIV.

By mid-2006, there was a decline in enrollment. Some instructors were laid off; others were reduced to part-time. Because the institute had more instructors than work, it decided to assign only instructors with masters degrees to upper-level courses. Therefore, Scotch's hours were reduced (along with other instructors'). Ultimately, Scotch resigned.

Scotch sued for refusal to accommodate, disability discrimination, failure to engage in the interactive process and wrongful termination. The Court of Appeal affirmed the Superior Court's grant of summary judgment on all causes of action.

Most of the opinion is not new law. The court found that the course load was reduced for legitimate reasons, and that Scotch did not demonstrate pretext. But this opinion is interesting because of the court's analysis of the accommodation claim. Scotch argued that he should have been assigned a full course load despite his failure to achieve the masters degree as a reasonable accommodation. The court found:

His proposed accommodation is not reasonable under the definition we have adopted because it is not a “modification or adjustment to the workplace” necessary to enable him to perform the essential functions of his position. Unlike the employee in Jensen, Scotch was not requesting assignment from a position he could not manage to one he could. Instead, Scotch explained the limitations created by his disability were that he needed to avoid stress and he could not pursue a master‟s degree while teaching full time and fulfilling other professional development requirements—limitations addressed by AIC‟s accommodation. Scotch‟s request of priority in assignment of lower division courses does not accommodate those limitations and was unnecessary to enable him to perform the essential functions of his position.

The opinion also addresses the "interactive process." The court found that the institute did not initiate a meeting before reducing the hours and that, perhaps, a jury would find that it should have. However, the court also found that the failure to have the meeting did not require a trial. That is because the employee must identify a potential accommodation that would have been effective to recover on the cause of action:

To prevail on a claim under section 12940, subdivision (n) for failure to engage in the interactive process, an employee must identify a reasonable accommodation that would have been available at the time the interactive process should have occurred. An employee cannot necessarily be expected to identify and request all possible accommodations during the interactive process itself because "„"[e]mployees do not have at their disposal the extensive information concerning possible alternative positions or possible accommodations which employers have. . . ."‟" (Wysinger, supra, 157 Cal.App.4th at p. 425.) However . . . once the parties have engaged in the litigation process, to prevail, the employee must be able to identify an available accommodation the interactive process should have produced: "Section 12940[, subdivision ](n), which requires proof of failure to engage in the interactive process, is the appropriate cause of action where the employee is unable to identify a specific, available reasonable accommodation while in the workplace and the employer fails to engage in a good faith interactive process to help identify one, but the employee is
able to identify a specific, available reasonable accommodation through the litigation process." (Nadaf-Rahrov, supra, 166 Cal.App.4th at p. 984.)

The case is Scotch v. Art Inst. of Orange Cty. and the opinion is here.

California Supreme Court to Review Section 203 Waiting Time Penalties

The statute of limitations for a penalty is usually one year under California law. But, Labor Code Section 203 says that the statute of limitations for "waiting time penalties" is the same as the limitations period for the underlying wage claim. So, if the underlying wage claim is three years (such as unpaid overtime), then the statute of limitations for late payment of those wages at termination is also three years.

But, what happens if the underlying wages are paid already and an employee just wants to recover penalties in a civil lawsuit? There IS no underlying claim for wages in that case. So, the court of appeal reasoned in Pineda v. Bank of Am., that the one-year statute of limitations should apply in cases where there is no accompanying claim for unpaid wages.

The court in Pineda also clarified that the unfair competition law's four year statute does not apply to waiting time penalties, since the UCL ordinarily only applies to "restitution" of the plaintiff's property, and waiting time penalties are not the employee's property.

The California Supreme Court just accepted review of Pineda on both issues discussed above. The docket is here. We posted about the court of appeal's opinion here.

Ninth Circuit Asks CA Supremes for Guidance on Wage and Hour

The Ninth Circuit has before it three cases involving pharmaceutical sales representatives. These folks visit with doctors and give them information on medications. The Ninth Circuit wants to know if these employees count as "outside salespersons" under California law. So, they asked the California Supreme Court for an opinion:

1. The Industrial Welfare Commission’s Wage Orders 1-2001 and 4-2001 define “outside salesperson” to mean “any person, 18 years of age or over, who customarily and regularly works more than half the working time away from the employer’s place of business selling tangible or intangible items or obtaining orders or contracts for products, services or use of facilities.” 8 Cal. Code Regs., tit. 8, §§ 11010, subd. 2(J); 11040, subd. 2(M). Does a pharmaceutical sales representative (PSR) qualify as an “outside salesperson” under this definition, if the PSR spends more than half the working time away from the employer’s place of business and personally interacts with doctors and hospitals on behalf of drug companies for the purpose of increasing individual doctors’ prescriptions of specific drugs?

If the sales representatives don't qualify as outside salespersons, because they don't take orders or actually sell the medications, the court wants to know if they qualify as "administrative" employees:

2. In the alternative, Wage Order 4-2001 defines a person employed in an
administrative capacity as a person whose duties and responsibilities involve (among other things) “[t]he performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his employer’s customers” and “[w]ho customarily and regularly exercises discretion and independent judgment.” Cal. Code Regs., tit. 8 § 11040, subd. 1(A)(2)(a)(I), 1(A)(2)(b). Is a PSR, as described above, involved in duties and responsibilities that meet these requirements

The Ninth Circuit seeks guidance on the administrative test because California case law is sparse on what it means to "exercise discretion and independent judgment" for the administrative exemption, and whether the PSRs are involved in "office or non-manual work directly related ot management policies or general business operations" of Bayer's customers. The court appears to believe that California law on outside salespersons differs from the federal test under the FLSA such that reliance on FLSA cases would be of "limited" assistance.

The Supreme Court does not have to answer the questions. If the Court chooses not to, then the case will return to the Ninth Circuit for a prediction on how the Supreme Court would rule. Otherwise, this case could provide needed guidance in this area of wage and hour law.

The case is D'Este v. Bayer Corporation and the opinion/request for answers is here.

Stanford Sloan GSB, Entry 21: The Spring Quarter, Star Wars, and the Class of 2010

The Class of 2010

We just met members of the Stanford Sloan Program class of 2010, who are having their orientation this weekend, as I write this. We gave them a “welcome” presentation (“The opening ceremonies for the class of 2010”, as our Master of Ceremonies, Tim, Tim, described it), in Bishop auditorium, the main auditorium at the GSB.

In the words of Darth Vader from Star Wars (more on the Star Wars theme later in this blog post): “The Circle is Now Complete”.

It’s hard to believe that it’s been a year since we sat in Bishop, watching the Sloan class of 2008 give us their wacky and informative presentation about what life was like in the Sloan program, amidst the MBA's at the Stanford Graduate School of Business.

I can remember sitting in the theater, with my then future-friends/classmates, watching these guys and wondering: “Wow, these guys seem to be such good friends and having such a good time – I wonder if our class is going to gel like that?”

Read More ...

I remember the 2008 class members, with their private jokes about texting each other at night and hurrying to a restaurant, bar, or social gathering in Palo Alto. It was clear they were having a good time, and I doubted whether we'd be like that in under a year's time.

I sat with my own personal combination of excitement, anticipation, and even anxiousness, about how I’d fit in to the Stanford GSB. I wondered if I’d like taking classes again (it had been 15 years since I’d been to school), wondering if I’d get along well with my classmates, and more importantly, whether I’d be able to relate to any of them personally.

The Sloan program, after all, consists of a very diverse group of people, from a large number of countries, at very different stages of life (from single Sloanies to families with 4 kids) and stages of work (from entrepreneurs to unemployed to Employed for Life).

As I sat in the audience yesterday, that question was finally answered. We have gelled as a class and it was funny to see in our skits and videos just how well we’ve gotten to know each other (and the faculty and administration, who several members of our class played during the skits). Particularly hilarious was our classmate Bree’s imitation of the director of the Sloan program, Marie – who knew we had such a good impersonator in our class?

The experience turned out to be more emotional for many of us than we expected - Of course our first priority was to welcome the new class with open arms and to give them a preview of what they might be like a year from now – which we did. But it also brought forth the realization that we have come full circle and our year at Stanford is almost over! In fact, there are only 4 weeks of classes left, only one big Sloan party left (The Latin party), and then finals, and finally graduation in June.

Many of us are going on the international study trip to South America, though some of us are more concerned about what we’re doing afterwards, with the job market and economy as it is and won't be attending.

What a year it’s been and what great friendships we’ve formed. I find it funny that even those classmates who I didn’t always get along with, or those I didn’t relate to very much during the school year - have become trusted friends that I’m looking forward to seeing sometime after graduation.

The Spring Quarter
Several of the new members of the class told me they’d been reading this blog regularly (one even said that was how he learned about the program), and asked why I hadn’t written any entries lately.

Honestly this last semester has been really busy – not so much with academics, but since it’s my last semester at Stanford, I’ve been trying to meet with as many interesting folks on and off campus, and figuring out exactly what I might be working on next that academics have fallen to a “lower priority”.

Which leads to a piece of un-asked for advice that I’d give to the new class: Think about why you’re coming to Stanford and what your priorities will be. Of course, there will always be academic, social, and professional aspects of your year here, and in the fall quarter they will be all mixed together. But come January, I would suggest it’s important to have a sense of what you’d like to get out of it – is it more experience with Finance? Is it to meet a team (MBA’s, Engineers) that you’d like to start a company with after the program? Is it to get to know professors that you want to keep in touch with? Is it to break into a new industry? Is it to socialize?

Whatever it is, you've got to focus on what's right for you!

Spring Electives
So to give our future Sloanies and others who are interested in classes at the Stanford Business Schoool, here’s the low down on the classes I’m taking this quarter.

I decided to take only four classes this quarter. There are two required core classes (as part of the Sloan curriculum). I took two electives this quarter, which should (fingers crossed) give me the right number of credits to graduate. I intentionally took a light load this quarter (I had 5 classes in the winter quarter, several of which were very demanding). Again, this gets back to priorities – one of our classmates is taking 6 classes this quarter, because it’s our last quarter at Stanford and he wants to take as many classes as possible.

The core classes:

•Non-market strategy.
This was a term that I hadn’t heard before. The idea of this class is that while most business focus on the “market strategy of a firm” (what are competitors doing, what is my product strategy, m&a, marketing, etc.), many firms (particularly big multi-nationals) have to deal with things that are not directly market-related. What things? A big thing called the government is a good example – many firms are in industries that are regulated, that might face environmental issues, that are attacked by citizen groups, and on and on.

As an example, our first case was about Shell and greenpeace and the media. More recently, we spoke about patents, trademarks, and intellectual property protection. Last week we did simulation based on the Microsoft anti-trust case – where one study group (my study group) played Microsoft and another study group played the Department of Justice and we argued whether Microsoft had violated anti-trust laws or not.

The best thing about this class? It makes me think about things I really don’t think about much. The worst thing about this class? It’s at 8:00 am in the morning – I call it my “sleep killer” class.

• HR class.
This class is about HR-related issues and how to structure personnel and compensation based on the strategy of the firm. Some cases we studied include Southwest Airlines, the Portman hotel, and InfoSys, to name a few.

I like the general theme of this class, because I don’t always think about HR issues as being strategic, but rather operational. However, contrary to my expectations, all the assignments in the class are data regressions, which has cause more than one of my classmates to wonder: “Is this a class about financial modeling, or Human Resources?”.

It seems like many professors here at the GSB in what I would consider “soft subjects” (HR, organizational behavior, marketing.) really want to hammer in the point that business-school in general and their field in particular is about data analysis and quantitative techniques – i.e. that it’s not really touchy feely, but rather quanty-crunchy.

I remember our negotiations instructor, when someone said "negotiation is more of an art than a science". She got very upset and yelled at him: “what have I been teaching you? This is a science, not art!” Of course anyone who’s done complex negotiation in the real world knows that it is as much (if not more) of an art involving personalities as it is a science, so I ask you: what gives?

It seems to me that teachers of soft subjects want to portray their subject as “real science” in order to get “academic respectability” from their peers and of course, to get tenure (can't say I blame them). I remember our Organizational Behavior professor’s grading of our final papers, refusing to acknowledge that the case that he laid out for us had more than one way to come up with a “right answer”.

Oh well what can you do? How about running a data regression on it and see if what I say can be backed up with empirical data LOL!!

Best thing about this HR class? The case discussions. Worst thing about this class? The data regressions, and the fact that it’s a “3-day weekend killer” class – it’s on Friday afternoon and Monday afternoon.

My two electives:
Of course everyone has taken different electives this quarter. I’ve taken two classes that I really like and help me to branch out in my own thinking:

• The Business World: Moral and Spiritual Inquiry through Literature.
It might seem funny to be taking a literature class in business school. But this class has been hailed by many MBA’s as a class to take in your last quarter of business school because it provides a good way to “cap” your experience and to think about larger issues of life, purpose, and where we’re headed in our lives and our careers.

I can’t agree more. Each week we read one book, and then we have our three hour class session on Thursday to have a discussion/debate about the book and the themes that were raised by the book, and how/if they have any relevance in our own lives and careers.

We started off by reading F. Scott Fitzgerald (the Last Tycoon) followed by two well known US plays about salesmen – Death of a Salesman by Arthur Miller, and Glengarry Glen Ross, by David Mamet. We then read a novel that had very strong elements of Jewish-American culture post WW II in it – The Ghost Writer, by Phillip Roth. Then we read a novel about post WW II Japan – An Artist in the Floating World. We’re now reading a spiritual novel about a Japanese characters who travel to India on a spiritual quest – Deep River, by Endo. We have a few more international readings, ending a Tolstoy story..

This class might seem like a lot of work, because we’re supposed to read an entire book every week. But, the books are all pretty small (especially compared to the 800 page Tome we have in Non-Market Strategy) and very easy to read. In fact, I can honestly say that this is the only class in my entire business school experience for which I expect to do 100% of the readings – Why? Because they’re all classic works of literature and all very well written.


• Leadership in the Entertainment Industry.
My final class this term is about the entertainment industry – yes – film-making and TV. Given my interest in the film industry (I have been an executive producer and investor on a few indie film projects in my spare time), this is one of my favorite classes. It is taught by an Oscar-winning documentary film-maker (it was cool to go to Blockbuster after we’d started the class and see Professor Guttentag’s name on a movie there).

Each week, we have speakers from the entertainment industry come by and give us a talk, after which we pepper them with questions. This is definitely the fun part of the class. For example, we had the head of Fox TV channel come by and talk about the issues facing the entertainment industry as it goes on line (they funded Hulu for example, but haven’t figured out how to make advertising profitable online). He talked about the history as well. I tried to get him to tell us if Fox was going to renew “Terminator: The Sarah Conner Chronicles” but he was mum on the subject, since he hadn’t even told the producers yet.

We also had Alexander Payne, the director of the film Sideways come in and talk about directing and his experience in the film industry. He was particularly terse in his answers. It kind of made me laugh when one of us would ask some high-minded artistic question and ask his opinion of it and he’d just stroke his chin and say “I don’t know. Never thought about it. Next question.”

Of course the class has more than speakers – it has field trips, which are particularly fun.

The House that Lucas Built
Last week we went to the Presidio in San Francisco and visited Industrial Light and Magic, the company built by George Lucas after the success of Star Wars.. There are actually several companies housed in this gorgeous complex built on a very large park area on San Francisco Bay.

Anyone who is a fan of movies know about the Star Wars films and George Lucas. It was incredible to be able to go the company and see how people work and how the offices are laid out. We were told that they don’t generally do public tours, so we were very lucky to have gotten a tour. The hallways are lined with artifacts from movies that ILM has worked on. This of course, included props and costumes from the Star Wars films – including Stormtroopers, Darth Vader, Yoda, C3PO, and even Han Solo in carbonite!

ILM also did the special effects for the Indiana Jones movies, and (unbeknownst to many) the Star Trek movies, among many many others. In fact, they did all the special effects for the new Star Trek movie that’s coming out next week. There were artifacts from all these movies strewn throughout the hallways - it was so cool! My favorites turned out to be the Matte paintings that were used as backdrops for scenes in the film. Needless to say a classmate and I "got lost" on this tour, and had to be picked up and led back to the tour!

The complex actually houses several of Lucas’ companies – ILM (the special effects company), Lucasfilm (which is the film production company which owns the Star Wars films), and LucasArts (the video game company). We got a private Q&A with the heads of these companies, which was great. One thing that was interesting to me was the key role of the video games in this entertainment empire as it moves forward.

Since this trip wasn’t listed in the syllabus it came as a surprise to all of us, and definitely contributed to making this one of my favorite classes at the GSB.

We have one more field trip scheduled in the Bay area, which also relates to George Lucas in a roundabout way:

'In the 1980’s Lucasfilm/ILM had developed some animation rendering technology which was spun out as a separate company and was funded by a famous Silicon Valley entrepreneur. That company worked on 3d animation and rendering technology, and eventually used that technology to make animated 3d films. I’ve heard that they don’t give public tours either, but we’re going to visit them the week after next. The company? Pixar!

Now who says Business school isn’t cool?

California Supreme Court Takes Tips

(Or at least they accept tip pooling cases for review. ) What's tip pooling? We blogged about it here and wrote an article here. Yeah, we're on it.

Who knew tip pooling was the new meal break? There have been about four recent appellate decisions on tip pools in recent months. The Supreme Court decided to have its say, accepting review in Lu v. Hawaiian Gardens. We'll see if they grant and hold the rest of them or leave one on the books for guidance to the bar while the Lu review is pending.

DGV