Thursday, March 12, 2009
San Francisco Health Care Security Ordinance
San Francisco's controversial Health Care Security Ordinance, requiring employers to pay assigned amounts of money toward employees’ health care, may be heading toward argument at the U.S. Supreme Court. On March 9, 2009, the United States Court of Appeals for the Ninth Circuit ruled (by majority of a split decision 11-judge panel) on a petition for rehearing, rejecting the argument that the Employee Retirement Income Security Act (ERISA) prevented the city and labor groups from requiring employer-provided health care.
Wednesday, March 11, 2009
EFCA INTRODUCED IN CONGRESS
The long-awaited and much-anticipated Employee Free Choice Act (EFCA) was finally introduced in Congress on March 10, 2009, initiating a new battle between Democrats who argue the bill will bolster the economy and business groups that contend it is an employment killer. The EFCA, which is strongly supported by President Obama, was presented by Democrats in both the U.S. House of Representatives, where it is anticipated to receive overwhelming support, and the Senate, where it will likely confront greater resilience.
As proposed, the EFCA would amend the National Labor Relations Act (NLRA) by eradicating secret ballot elections and replacing them with a card-check procedure that would require unions only to obtain signed authorization cards by a majority of employees in order to organize. If passed, the EFCA, which also contains mandatory arbitration provisions and considerable increases in employer violation penalties, is expected to result in a union membership increase from the current 7.5% of the United States work force to 20%.
As proposed, the EFCA would amend the National Labor Relations Act (NLRA) by eradicating secret ballot elections and replacing them with a card-check procedure that would require unions only to obtain signed authorization cards by a majority of employees in order to organize. If passed, the EFCA, which also contains mandatory arbitration provisions and considerable increases in employer violation penalties, is expected to result in a union membership increase from the current 7.5% of the United States work force to 20%.
Tuesday, March 10, 2009
PROPOSED LEGISLATION MAY CURB SETTLEMENT CONFIDENTIALITY AGREEMENTS
Two United State Senators (Herb Kohl, D-Wisconcin, and Lindsey Graham, R-South Carolina) have introduced legislation that would require courts to consider public health and safety against confidentiality before sealing certain information included in settlement agreements. The proposed bill, which was referred to the Senate Judiciary Committee, would “curb the ongoing abuse of secrecy orders in the federal courts,” Kohl told the Senate.
Under the bill, judges must consider public health and safety before granting a protective order or sealing court records and settlement agreements. Judges would have the discretion to grant or deny secrecy based on an assessment that considers public interest in a potential public health and safety hazard and legitimate interests of privacy. The Bill follows dozens of noted cases in which hazards and threats to public health were not disclosed during court settlements and subsequently resulted in additional fatalities, serious injuries, and illnesses.
Senator Kohl cited Bridgestone - Firestone Inc. as the most famous example of the secretive agreements. He said the company settled dozens of lawsuits secretly as tread separations on tires were causing accidents across the country, many resulting in serious injuries and fatalities. However, it was a news report in 1999 that prompted the company to recall 6.5 million tires. By that time, it was too late for the more than 250 people who had been killed and more than 800 injured in accidents related to defective tires.
While this legislation is neither directly related to nor focused on employment law, it is significant to note that, as proposed, many employment and labor litigation settlement agreements may be directed by such a new law (i.e., whistleblowing, OSHA, etc.).
Under the bill, judges must consider public health and safety before granting a protective order or sealing court records and settlement agreements. Judges would have the discretion to grant or deny secrecy based on an assessment that considers public interest in a potential public health and safety hazard and legitimate interests of privacy. The Bill follows dozens of noted cases in which hazards and threats to public health were not disclosed during court settlements and subsequently resulted in additional fatalities, serious injuries, and illnesses.
Senator Kohl cited Bridgestone - Firestone Inc. as the most famous example of the secretive agreements. He said the company settled dozens of lawsuits secretly as tread separations on tires were causing accidents across the country, many resulting in serious injuries and fatalities. However, it was a news report in 1999 that prompted the company to recall 6.5 million tires. By that time, it was too late for the more than 250 people who had been killed and more than 800 injured in accidents related to defective tires.
While this legislation is neither directly related to nor focused on employment law, it is significant to note that, as proposed, many employment and labor litigation settlement agreements may be directed by such a new law (i.e., whistleblowing, OSHA, etc.).
EMPLOYMENT LAW NEWSLETTER
CALIFORNIA SUPREME COURT GREENLIGHTS PUBLIC EMPLOYEE'S WHISTLEBLOWER SUIT
On February 26, 2008, the California Supreme Court, reversing a decision from the California Court of Appeal for the Third District, ruled the California Whistleblower Protection Act does not require state workers to exhaust remedies with the State Personnel Board before seeking damages in court. The decision in the matter of the State Board of Chiropractic Examiners (SBCE) v. Superior Court, Caroline M. Arbuckle, Real Party In Interest, stems from Carole Arbuckle reporting to her supervisor at the SBCE, that the SBCE chairperson had allowed her professional license to lapse, and asking several times whether she should issue the chairperson a citation. The complaint alleged as a result of Arbuckle's reporting, she experienced a "stressful work environment, including numerous indignities, disputes and acts of favoritism." Further, Arbuckle's duties were changed, she was transferred to a different unit, and her requests for a modified work schedule were denied. She complained to the State Personnel Board in July 2002, alleging whistleblower retaliation, but the board dismissed her complaint. Rather than appealing the board's decision, she sued the SBCE in Superior Court. The SBCE moved for summary judgment, arguing Arbuckle had not exhausted her administrative remedies, and the trial court denied that motion. The SBCE appealed that ruling to the appellate court, which held the trial court should have granted the defendant summary judgment. The Third District ruled the law required the employee to appeal the board's adverse decision to an administrative law judge, and if the board denied an ALJ hearing, the employee should have sought a writ of mandate from the courts to set aside the board decision. Thereafter, the Supreme Court granted Arbuckle's petition for review.
The California Supreme Court found the plain language of the California Whistleblower Protection Act requires only that state employees file a complaint with the personnel board before seeking damages in superior court. The Supreme Court held the state whistleblower law gives employees the right to seek a "completely separate damages action," eliminating the need for the exhaustion of administrative remedies: "[e]xhaustion of every possible state of administrative process is not particularly necessary where the civil action that the Legislature authorized is not one to review the administrative decision, but rather a completely independent remedy."
Please direct any questions or comments you have regarding this item to Basham Parker Attorney and Partner, Alden J. Parker. Mr. Parker has extensive experience representing public employers in matters of litigation, agency claims and hearing, and workplace training.
COMING SOON: THE EMPLOYEE FREE CHOICE ACT
On March 3, 2009, AFL-CIO Executive Council member and union leader James Williams said he expects the controversial Employee Free Choice Act to pass in the next four or five months. On March 2, 2009, Secretary of Labor Hilda Solis met with the Executive Council and Vice President Joe Biden conducted a closed-door address to AFL-CIO leaders on March 4, 2009.
The meetings between high-ranking government officials and union leaders illustrate a marked difference between the relationship organized labor enjoys with the Obama administration compared to the relationship with the Bush administration. Williams stated, the Council is trying to touch base with Capitol Hill and line up the necessary votes to get the EFCA though Congress. Although Democrats lack a filibuster-proof majority in the Senate, Williams suggested additional support from "friendly Republicans."
DOL PRELIMINARY GUIDANCE ON ECONOMIC STIMULUS PACKAGE COBRA SUBSIDY
The U.S. Department of Labor has issued preliminary direction on how the COBRA subsidy recently passed by Congress as part of the economic stimulus package should be handled by employers, noting additional guidance is still being prepared. COBRA programs give workers who lose their employer-sponsored health benefits the right to continue those benefits for a limited period of time; however, individuals who qualify can be required to pay the entire premium for coverage - up to 102% of the cost of the plan, an expense that can be too expensive for many workers who find themselves without a job. The stimulus bill passed by Congress last month, known as the American Recovery and Reinvestment Act of 2009 (ARRA), provided for a 65% government subsidy of the premiums paid for health care coverage under COBRA programs for up to nine months.
Those who can take advantage of the subsidy are employees who were eligible for COBRA continuation coverage between September 1, 2008, and December 31, 2009, and were involuntarily terminated during that period. Employees who can be covered under another health plan, such as one provided by their spouse's employer or Medicare, are not eligible for the subsidy.
The subsidy will apply to premiums paid for periods of COBRA coverage beginning on or after February 17, 2009. Those eligible for the subsidy will be treated as having paid the full premium and the 65% reduction will be reimbursable to the employer, insurer, or health plan as a credit against certain employment taxes.
Employees who were laid off between September 1, 2008, and February 16, 2009, who did not elect COBRA coverage when it was first offered, or who did elect it but are no longer enrolled, have a new 60-day post employer notice window to elect subsidized coverage.
Income standards have been clarified as well. If a worker's income exceeds $145,000 (or $290,000 for joint filers) in the year he or she receives a premium deduction, the subsidy reduction amount will have to be repaid in full. Taxpayers who make between $125,000 and $145,000 (or between $250,000 and $290,000 for joint filers) will have to repay a portion of the premium reduction.
The Labor Department is developing an appeals process for those who think they have been improperly denied eligibility for the COBRA premium reduction and, as earlier set forth, additional guidance on the COBRA subsidy program should be released soon.
Employers are reminded they are still required to notify affected employees of their right to elect COBRA coverage, and that the employee and his or her family have 60 days to make that decision before they lose rights to those benefits.
FAIR EMPLOYMENT AND HOUSING COMMISSION ISSUES COMPARISON TABLES
Continuing its efforts to navigate employers through the vast and complex workplace laws related to the employment of individuals with disabilities and related leave issues, the California Fair Employment and Housing Commission has developed two useful tables: the first comparing the Americans with Disabilities Act, the ADA Amendments Act of 2008, and related provisions of the Fair Employment and Housing (ADA/ADAAA/FEHA Table); and the second comparing the differences between the new Family and Medical Leave Act and the California Family Rights Act and pregnancy disability leave law (FMLA/CFRA/PDL Table).
EMPLOYMENT LAW ALERT UPDATE: GINA REGULATIONS
As Basham Parker first reported in its February 27, 2009, Employment Law Alert, the Equal Employment Opportunity Commission issued proposed regulations intended to implement the Genetic Information Nondiscrimination Act of 2008 (GINA). Those proposed rules have now been posted and are available for viewing on the EEOC website (GINA Regulations). Comments regarding this proposal must be received by the Commission on or before May 1, 2009. Basham Parker welcomes your comments and questions regarding these proposed regulations by email to clientservices@bashamparker.com.
BASHAM PARKER IN THE NEWS
Basham Parker is pleased to acknowledge Attorney and Partner, Alden J. Parker, for his recent contributions to the February 2009 edition of Comstock's Magazine. Parker was interviewed by Bill Romanelli regarding the Worker Adjustment and Retraining Notification Act (WARN), comparable California State WARN law (often referred to as "baby WARN), newly enacted federal and California State legislation (including Assembly Bill 28), and the status of specific California State case law (Brinker Restaurant Corp. v. Superior Court of San Diego County). The article is titled, "You've Been WARNed," and Parker's comments may be viewed online (Comstock's Magazine, "You've Been WARNed").
WELCOME NEW ATTORNEY RACHAEL JUNG
Basham Parker is pleased to announce Rachael Jung has joined the Firm as an Associate Attorney in its San Francisco Bay Area office. Rachael received her Bachlor of Arts degree in Psychology and Legal Studies from the University of California, Berkeley, and her Juris Doctor from Pepperdine University School of Law. She brings to Basham Parker additional legal experience focused on employment law matters. Please join us in welcoming Rachael to our Firm.
On February 26, 2008, the California Supreme Court, reversing a decision from the California Court of Appeal for the Third District, ruled the California Whistleblower Protection Act does not require state workers to exhaust remedies with the State Personnel Board before seeking damages in court. The decision in the matter of the State Board of Chiropractic Examiners (SBCE) v. Superior Court, Caroline M. Arbuckle, Real Party In Interest, stems from Carole Arbuckle reporting to her supervisor at the SBCE, that the SBCE chairperson had allowed her professional license to lapse, and asking several times whether she should issue the chairperson a citation. The complaint alleged as a result of Arbuckle's reporting, she experienced a "stressful work environment, including numerous indignities, disputes and acts of favoritism." Further, Arbuckle's duties were changed, she was transferred to a different unit, and her requests for a modified work schedule were denied. She complained to the State Personnel Board in July 2002, alleging whistleblower retaliation, but the board dismissed her complaint. Rather than appealing the board's decision, she sued the SBCE in Superior Court. The SBCE moved for summary judgment, arguing Arbuckle had not exhausted her administrative remedies, and the trial court denied that motion. The SBCE appealed that ruling to the appellate court, which held the trial court should have granted the defendant summary judgment. The Third District ruled the law required the employee to appeal the board's adverse decision to an administrative law judge, and if the board denied an ALJ hearing, the employee should have sought a writ of mandate from the courts to set aside the board decision. Thereafter, the Supreme Court granted Arbuckle's petition for review.
The California Supreme Court found the plain language of the California Whistleblower Protection Act requires only that state employees file a complaint with the personnel board before seeking damages in superior court. The Supreme Court held the state whistleblower law gives employees the right to seek a "completely separate damages action," eliminating the need for the exhaustion of administrative remedies: "[e]xhaustion of every possible state of administrative process is not particularly necessary where the civil action that the Legislature authorized is not one to review the administrative decision, but rather a completely independent remedy."
Please direct any questions or comments you have regarding this item to Basham Parker Attorney and Partner, Alden J. Parker. Mr. Parker has extensive experience representing public employers in matters of litigation, agency claims and hearing, and workplace training.
COMING SOON: THE EMPLOYEE FREE CHOICE ACT
On March 3, 2009, AFL-CIO Executive Council member and union leader James Williams said he expects the controversial Employee Free Choice Act to pass in the next four or five months. On March 2, 2009, Secretary of Labor Hilda Solis met with the Executive Council and Vice President Joe Biden conducted a closed-door address to AFL-CIO leaders on March 4, 2009.
The meetings between high-ranking government officials and union leaders illustrate a marked difference between the relationship organized labor enjoys with the Obama administration compared to the relationship with the Bush administration. Williams stated, the Council is trying to touch base with Capitol Hill and line up the necessary votes to get the EFCA though Congress. Although Democrats lack a filibuster-proof majority in the Senate, Williams suggested additional support from "friendly Republicans."
DOL PRELIMINARY GUIDANCE ON ECONOMIC STIMULUS PACKAGE COBRA SUBSIDY
The U.S. Department of Labor has issued preliminary direction on how the COBRA subsidy recently passed by Congress as part of the economic stimulus package should be handled by employers, noting additional guidance is still being prepared. COBRA programs give workers who lose their employer-sponsored health benefits the right to continue those benefits for a limited period of time; however, individuals who qualify can be required to pay the entire premium for coverage - up to 102% of the cost of the plan, an expense that can be too expensive for many workers who find themselves without a job. The stimulus bill passed by Congress last month, known as the American Recovery and Reinvestment Act of 2009 (ARRA), provided for a 65% government subsidy of the premiums paid for health care coverage under COBRA programs for up to nine months.
Those who can take advantage of the subsidy are employees who were eligible for COBRA continuation coverage between September 1, 2008, and December 31, 2009, and were involuntarily terminated during that period. Employees who can be covered under another health plan, such as one provided by their spouse's employer or Medicare, are not eligible for the subsidy.
The subsidy will apply to premiums paid for periods of COBRA coverage beginning on or after February 17, 2009. Those eligible for the subsidy will be treated as having paid the full premium and the 65% reduction will be reimbursable to the employer, insurer, or health plan as a credit against certain employment taxes.
Employees who were laid off between September 1, 2008, and February 16, 2009, who did not elect COBRA coverage when it was first offered, or who did elect it but are no longer enrolled, have a new 60-day post employer notice window to elect subsidized coverage.
Income standards have been clarified as well. If a worker's income exceeds $145,000 (or $290,000 for joint filers) in the year he or she receives a premium deduction, the subsidy reduction amount will have to be repaid in full. Taxpayers who make between $125,000 and $145,000 (or between $250,000 and $290,000 for joint filers) will have to repay a portion of the premium reduction.
The Labor Department is developing an appeals process for those who think they have been improperly denied eligibility for the COBRA premium reduction and, as earlier set forth, additional guidance on the COBRA subsidy program should be released soon.
Employers are reminded they are still required to notify affected employees of their right to elect COBRA coverage, and that the employee and his or her family have 60 days to make that decision before they lose rights to those benefits.
FAIR EMPLOYMENT AND HOUSING COMMISSION ISSUES COMPARISON TABLES
Continuing its efforts to navigate employers through the vast and complex workplace laws related to the employment of individuals with disabilities and related leave issues, the California Fair Employment and Housing Commission has developed two useful tables: the first comparing the Americans with Disabilities Act, the ADA Amendments Act of 2008, and related provisions of the Fair Employment and Housing (ADA/ADAAA/FEHA Table); and the second comparing the differences between the new Family and Medical Leave Act and the California Family Rights Act and pregnancy disability leave law (FMLA/CFRA/PDL Table).
EMPLOYMENT LAW ALERT UPDATE: GINA REGULATIONS
As Basham Parker first reported in its February 27, 2009, Employment Law Alert, the Equal Employment Opportunity Commission issued proposed regulations intended to implement the Genetic Information Nondiscrimination Act of 2008 (GINA). Those proposed rules have now been posted and are available for viewing on the EEOC website (GINA Regulations). Comments regarding this proposal must be received by the Commission on or before May 1, 2009. Basham Parker welcomes your comments and questions regarding these proposed regulations by email to clientservices@bashamparker.com.
BASHAM PARKER IN THE NEWS
Basham Parker is pleased to acknowledge Attorney and Partner, Alden J. Parker, for his recent contributions to the February 2009 edition of Comstock's Magazine. Parker was interviewed by Bill Romanelli regarding the Worker Adjustment and Retraining Notification Act (WARN), comparable California State WARN law (often referred to as "baby WARN), newly enacted federal and California State legislation (including Assembly Bill 28), and the status of specific California State case law (Brinker Restaurant Corp. v. Superior Court of San Diego County). The article is titled, "You've Been WARNed," and Parker's comments may be viewed online (Comstock's Magazine, "You've Been WARNed").
WELCOME NEW ATTORNEY RACHAEL JUNG
Basham Parker is pleased to announce Rachael Jung has joined the Firm as an Associate Attorney in its San Francisco Bay Area office. Rachael received her Bachlor of Arts degree in Psychology and Legal Studies from the University of California, Berkeley, and her Juris Doctor from Pepperdine University School of Law. She brings to Basham Parker additional legal experience focused on employment law matters. Please join us in welcoming Rachael to our Firm.
Friday, February 27, 2009
EMPLOYMENT LAW ALERT
EEOC ISSUES HIGHLY-ANTICIPATED GENETIC INFORMATION NONDISCRIMINATION ACT (GINA) EMPLOYMENT REGULATIONS
On Wednesday, the U.S. Equal Employment Opportunity Commission (EEOC) proposed rules to implement the employment provisions of the Genetic Information Nondiscrimination Act of 2008 (GINA). "The addition of genetic information discrimination to the EEOC's mandate is historic, and represents the first legislative expansion of the EEOC's jurisdiction since the Americans with Disabilities Act passed in 1990," said Acting EEOC Chairman Stuart J. Ishimaru.
GINA prohibits discrimination on the basis of genetic information in employment and health insurance. Specifically, the law prohibits: (1) unauthorized or required genetic testing of workers by employers and insurers; (2) employers from seeking out genetic information about employees; and, (3) employers from disclosing genetic information about employees and using genetic tests to discriminate against workers in hiring, firing, and other employment decisions. GINA's employment law provisions become effective November 21, 2009, while its health insurance benefits generally begin on May 21, 2009.
A 60-day public comment period for the new employment provisions commenced on February 25, 2009, and the EEOC has reported the notice of proposed rulemaking would be published in the Federal Register by Friday, February 27, 2009.
Included in the proposed regulations is a stipulation that employers will not be punished for neutral policies that have a disparate impact on employees with genetic diseases. Moreover, the final rules will clarify instances where employers "inadvertently acquire or disclose" genetic information and may be exempt from liability.
Regulations, rules, stipulations, and exemptions aside, GINA opens a brand new door to employee discrimination claims, and increased litigation is predicted by most. Prior to the November 21, 2009, effective date, employers should familiarize themselves with this new field of potential liability and carefully review and consider GINA's responsibilities and restrictions. At first glance, many employers will likely believe GINA will not influence their specific workplace and is very commonsense. Consider this: a manager who visits a sick employee in the hospital and learns the employee's malady has a genetic basis would not have obtained that information inadvertently.
The potential for inadvertent acquisition or disclosure is not implausible given GINA's definition of "genetic information," which includes "the manifestation of a disease or disorder in family members"; and, because GINA does not require a knowing acquisition or disclosure to support a claim. Employer advocates will certainly take advantage of the impending 60-day public comment period to attempt to further clarify many of these alarming concerns.
Basham Parker LLP will continue to provide updates related to the Genetic Information Nondiscrimination Act of 2008 as they develop. For additional information, please visit our website at http://rs6.net/tn.jsp?t=annspycab.0.0.rre7uhcab.0&ts=S0387&p=http%3A%2F%2Fwww.bashamparker.com%2F&id=preview.
On Wednesday, the U.S. Equal Employment Opportunity Commission (EEOC) proposed rules to implement the employment provisions of the Genetic Information Nondiscrimination Act of 2008 (GINA). "The addition of genetic information discrimination to the EEOC's mandate is historic, and represents the first legislative expansion of the EEOC's jurisdiction since the Americans with Disabilities Act passed in 1990," said Acting EEOC Chairman Stuart J. Ishimaru.
GINA prohibits discrimination on the basis of genetic information in employment and health insurance. Specifically, the law prohibits: (1) unauthorized or required genetic testing of workers by employers and insurers; (2) employers from seeking out genetic information about employees; and, (3) employers from disclosing genetic information about employees and using genetic tests to discriminate against workers in hiring, firing, and other employment decisions. GINA's employment law provisions become effective November 21, 2009, while its health insurance benefits generally begin on May 21, 2009.
A 60-day public comment period for the new employment provisions commenced on February 25, 2009, and the EEOC has reported the notice of proposed rulemaking would be published in the Federal Register by Friday, February 27, 2009.
Included in the proposed regulations is a stipulation that employers will not be punished for neutral policies that have a disparate impact on employees with genetic diseases. Moreover, the final rules will clarify instances where employers "inadvertently acquire or disclose" genetic information and may be exempt from liability.
Regulations, rules, stipulations, and exemptions aside, GINA opens a brand new door to employee discrimination claims, and increased litigation is predicted by most. Prior to the November 21, 2009, effective date, employers should familiarize themselves with this new field of potential liability and carefully review and consider GINA's responsibilities and restrictions. At first glance, many employers will likely believe GINA will not influence their specific workplace and is very commonsense. Consider this: a manager who visits a sick employee in the hospital and learns the employee's malady has a genetic basis would not have obtained that information inadvertently.
The potential for inadvertent acquisition or disclosure is not implausible given GINA's definition of "genetic information," which includes "the manifestation of a disease or disorder in family members"; and, because GINA does not require a knowing acquisition or disclosure to support a claim. Employer advocates will certainly take advantage of the impending 60-day public comment period to attempt to further clarify many of these alarming concerns.
Basham Parker LLP will continue to provide updates related to the Genetic Information Nondiscrimination Act of 2008 as they develop. For additional information, please visit our website at http://rs6.net/tn.jsp?t=annspycab.0.0.rre7uhcab.0&ts=S0387&p=http%3A%2F%2Fwww.bashamparker.com%2F&id=preview.
Monday, February 16, 2009
FEDERAL AND CALIFORNIA STATE WARN LEGISLATION
As the national economy continues to deteriorate, an unparalleled number of businesses have been financially devastated, many to the point of closing operations, and others facing the unpleasant realization of mass layoffs. The U.S. Labor Department recently reported 21,137 mass layoffs took place in 2008, resulting in the termination of more than 2.1 million workers. As employers analyze the advantages and disadvantages of mass layoffs and strategize the least laborious manner to implement cutbacks, it is also essential they familiarize themselves with the legal responsibilities associated with these decisions.
Enacted in 1988, the Federal Worker Adjustment and Retraining Notification ("WARN") Act requires covered employers give affected employees at least 60-days notice of a plant closing or mass layoff. Fifteen years later, the California Legislature created an additional obligation for California employers to consider when conducting layoffs and plant closings in the form of the "Baby-WARN" Act. Although similar to the companion federal law in many respects, Baby-WARN extend coverage to businesses with as few as 75 employees and to layoffs of 50 or more employees regardless of the size of the business. In contrast, WARN applies to businesses employing 100 or more full-time employees and to layoffs of 50 or more full-time employees, if the layoff affects 33% of the workforce at a single site or 500 or more people at a single site, during a 30-day period. While the federal statute was accompanied by extensive regulations and guidance from the U.S. Department of Labor, the California legislation passed with little guidance.
Employers who fail to provide the required notice face potential class-action litigation with severe damages and penalties. On February 9, 2009, dynamic random access memory (DRAM) maker Qimonda AG was stricken with a putative class action filed by former factory employees who claim the company violated the Federal WARN Act by failing to give them proper notice before shutting its Virginia plant. (Blair et al. v. Qimonda North America Corp. et al., Case Number 09-CV-00073, in the U.S. District Court for the Eastern District of Virginia.)
According to the current complaint, at least 1,000 workers at Qimonda's Virginia facility were adversely affected by the company's failure to give notice prior to closing the plant on February 4, 2009. Plaintiffs' allege Qimonda failed to pay wages, make pension and 401(k) contributions, and provide health insurance coverage for the 60-day period following their dismissal, in violation of the WARN Act.
The plaintiffs are seeking damages equal to the sum of unpaid wages, salary, commissions, bonuses, accrued holiday and vacation pay, and pension and 401(k) contributions for 60 working days. They also are asking for health insurance coverage and other fringe benefits under the Employee Retirement Income Security Act (ERISA) for 60 working days, attorneys' fees and other costs.
Employers wishing to avoid the harsh realities now facing Qimonda should (1) carefully consider the potential legal ramifications associated with layoffs and other employment decisions made during difficult economic times and (2) always consult with knowledgeable and experienced employment counsel making similar determinations.
As the national economy continues to deteriorate, an unparalleled number of businesses have been financially devastated, many to the point of closing operations, and others facing the unpleasant realization of mass layoffs. The U.S. Labor Department recently reported 21,137 mass layoffs took place in 2008, resulting in the termination of more than 2.1 million workers. As employers analyze the advantages and disadvantages of mass layoffs and strategize the least laborious manner to implement cutbacks, it is also essential they familiarize themselves with the legal responsibilities associated with these decisions.
Enacted in 1988, the Federal Worker Adjustment and Retraining Notification ("WARN") Act requires covered employers give affected employees at least 60-days notice of a plant closing or mass layoff. Fifteen years later, the California Legislature created an additional obligation for California employers to consider when conducting layoffs and plant closings in the form of the "Baby-WARN" Act. Although similar to the companion federal law in many respects, Baby-WARN extend coverage to businesses with as few as 75 employees and to layoffs of 50 or more employees regardless of the size of the business. In contrast, WARN applies to businesses employing 100 or more full-time employees and to layoffs of 50 or more full-time employees, if the layoff affects 33% of the workforce at a single site or 500 or more people at a single site, during a 30-day period. While the federal statute was accompanied by extensive regulations and guidance from the U.S. Department of Labor, the California legislation passed with little guidance.
Employers who fail to provide the required notice face potential class-action litigation with severe damages and penalties. On February 9, 2009, dynamic random access memory (DRAM) maker Qimonda AG was stricken with a putative class action filed by former factory employees who claim the company violated the Federal WARN Act by failing to give them proper notice before shutting its Virginia plant. (Blair et al. v. Qimonda North America Corp. et al., Case Number 09-CV-00073, in the U.S. District Court for the Eastern District of Virginia.)
According to the current complaint, at least 1,000 workers at Qimonda's Virginia facility were adversely affected by the company's failure to give notice prior to closing the plant on February 4, 2009. Plaintiffs' allege Qimonda failed to pay wages, make pension and 401(k) contributions, and provide health insurance coverage for the 60-day period following their dismissal, in violation of the WARN Act.
The plaintiffs are seeking damages equal to the sum of unpaid wages, salary, commissions, bonuses, accrued holiday and vacation pay, and pension and 401(k) contributions for 60 working days. They also are asking for health insurance coverage and other fringe benefits under the Employee Retirement Income Security Act (ERISA) for 60 working days, attorneys' fees and other costs.
Employers wishing to avoid the harsh realities now facing Qimonda should (1) carefully consider the potential legal ramifications associated with layoffs and other employment decisions made during difficult economic times and (2) always consult with knowledgeable and experienced employment counsel making similar determinations.
Friday, December 05, 2008
LEGAL IMPLICATIONS FOR YOUR OFFICE HOLIDAY PARTY
Everyone loves an office holiday party. It also serves many legitimate business purposes -- to reward employees, to raise morale, and to simply commemorate the end of one year and ring in the next. However, for many employers, holiday parties are a source of considerable anxiety and potential liability as management worries about the mistletoe and mayhem so frequently associated with these types of events. To help you make your company’s 2008 office holiday party enjoyable and crisis-free, we offer the following party planning guidelines and suggestions:
1. Remember that office parties are always business events! Remind all attendees to conduct themselves professionally and to avoid inappropriate behavior at all times. Physical, verbal, and visual activity unacceptable in the workplace is also unsuitable at office parties. (For example, abstain from unnecessary and potentially awkward physical greetings and signs of affection; it is no more appropriate to hug or kiss a co-worker at an office party than at the office. Do not allow the seemingly more relaxed environment to open the door for potentially offensive conversation and language. Steer away from swearing, profanity, and stories or comments, intended to be humorous or otherwise, which relate to personal characteristics such as age, color, marital and military status, national origin and ancestry, medical conditions, race, sex, sexual orientation, and gender identity, or such sincerely held personal and controversial convictions as religion and politics. Also, avoid revealing, overly-tight, or provocative dress and attire which may be distasteful and insulting to other party attendees.)
2. To serve or not to serve – that is always the question. Employers should be aware of the potential liability that may develop if an intoxicated employee causes an injury after leaving an office-hosted or sponsored party. California courts have held employers liable for third-party personal injuries caused by employees who drive home from company holiday parties intoxicated. In the matter of Harris v. Trojan Fireworks Company, the Court held the employer liable for injuries caused by an intoxicated employee driving home from an office party. The Court held that, “although the accident occurred away from the employer’s premises and presumably after work, we believe that the operable factors giving rise to the subsequent accident at least make a prima facie showing that the accident occurred in the course of [the employee’s] employment. . . .” (120 Cal. App. 3d 157, at 164 (1981).) An employer choosing to serve alcoholic beverages at an office celebration should consider the following:
(a) Contemplate a no host bar. While this does not eliminate potential employer liability, it weakens the argument that the employer provided the alcohol.
(b) Prior to the event, re-distribute your workplace substance abuse policy; have employees read it, and acknowledge both receipt of the policy and an understanding of it. Make sure your employees know the policy includes the use of alcohol in any work-related event or situation and office social functions.
(c) Host the party at a commercial establishment whereby employees are not distributing the alcohol, and make certain the hired service has a valid liquor license. If a company does hold the event on work property, hire professional bartenders and require servers to check for proof of age of all employees and his or her guest(s). Of course, anybody under the age of 21 or unable to show proof of age should not be served alcohol.
(d) Alcohol should be attended at all times; party attendees should never be able to help themselves to drinks. Do not serve alcohol to any individual who is intoxicated or perceived to be intoxicated. A "last call" should be made at least one hour prior to the event closing time. Also, make non-alcoholic beverages available, including coffee.
(e) Coordinate and plan for alternative transportation. Anticipate the need for departure transportation for all party goers and make these arrangements in advance of the party. Encourage employees to have a designated driver or make use of the alternative transportation if they consume any alcohol.
3. Designate or hire a group of “party chaperones.” These individuals have the responsibility of monitoring for inappropriate behavior, illegal drug use, intoxication, and uninvited guests. Chaperones should report concerns to specified management for any necessary remedial action.
4. Avoid associating the party with any specific religion. Do not assume everyone celebrates the same holiday at the same time of year. Hosting a “holiday party” or “winterfest” encompasses those celebrating Christmas, Hanukkah, Kwanzaa, and other holidays. Refrain from using related decorations (i.e., Christmas Tree, Menorah, Mkeka, etc.), music, and greetings/verbiage (“Merry Christmas!). While this will certainly be noticed by employees and may arouse some discord with those who believe it is their right of religious freedom to exercise their independent customs, it should be easily explained and understood the employer’s attempt is to exclude no employee from the celebration and ensure equality in a diverse work environment.
5. If the party involves the exchange of gifts, ask employees to make suitable purchase choices. First, an employer should distribute its policy on gift-giving and confirm with employees that they will follow the policy. The larger and more structured the employer, the more likely a specific detailed written policy will be required. Request employees pay heed to budgets and refrain from purchasing and bringing gag items, overly personal items or other potentially offensive gifts.
6. Be extremely cautious of activities which may require or encourage physical contact. Avoid dancing and certain party games which provide the opportunity for touching or other potentially inappropriate behavior –which may lead to significant misunderstandings and potential employer liability.
7. Pay close attention to the invitation list. The enjoyment of a holiday party is not only influenced by the conduct of employees, but also by their guests. If you are aware an employee has invited a guest who prompts pre-party apprehension, have a direct discussion with the employee and attempt to prevent a potentially awkward onsite situation. If you see unsuitable behavior by a guest at the party, depending on the nature and degree of the conduct, you may need to ask the employee to intervene, or you may have to ask the guest to leave. Any guest arriving at the party without a known employee connection should not be allowed to enter. Remember, similar to the workplace, liability issues may arise from inappropriate or unsafe behavior by any third-party attending an office party.
With special care, planning, and the application of good judgment, holiday parties can still be fun. Most employers put significant effort into this gathering, genuinely intending to make it one of the most memorable events of the year. Have a good time and enjoy yourself and your co-workers. As is typical with much in life, the concept of moderation and use of common sense are keys to having a safe and liability-free holiday party.
Author Gary R. Basham, Esq., is a founding partner of the employment law firm Basham Parker LLP, where he exclusively practices employment law and related litigation. Mr. Basham has extensive experience with wrongful termination, discrimination, sexual harassment, and retaliation claims and litigation, and regularly defends employers against claims for breach of contract, unfair business practices, violation of wage and hour laws, as well as numerous other tort and statutory employment law causes of action. He frequently speaks and lectures at employment law seminars and provides workplace training and education to both management and employees. Mr. Basham may be reached at either his Sacramento or Walnut Creek, California, offices, by email to gary@bashamparker.com.
Everyone loves an office holiday party. It also serves many legitimate business purposes -- to reward employees, to raise morale, and to simply commemorate the end of one year and ring in the next. However, for many employers, holiday parties are a source of considerable anxiety and potential liability as management worries about the mistletoe and mayhem so frequently associated with these types of events. To help you make your company’s 2008 office holiday party enjoyable and crisis-free, we offer the following party planning guidelines and suggestions:
1. Remember that office parties are always business events! Remind all attendees to conduct themselves professionally and to avoid inappropriate behavior at all times. Physical, verbal, and visual activity unacceptable in the workplace is also unsuitable at office parties. (For example, abstain from unnecessary and potentially awkward physical greetings and signs of affection; it is no more appropriate to hug or kiss a co-worker at an office party than at the office. Do not allow the seemingly more relaxed environment to open the door for potentially offensive conversation and language. Steer away from swearing, profanity, and stories or comments, intended to be humorous or otherwise, which relate to personal characteristics such as age, color, marital and military status, national origin and ancestry, medical conditions, race, sex, sexual orientation, and gender identity, or such sincerely held personal and controversial convictions as religion and politics. Also, avoid revealing, overly-tight, or provocative dress and attire which may be distasteful and insulting to other party attendees.)
2. To serve or not to serve – that is always the question. Employers should be aware of the potential liability that may develop if an intoxicated employee causes an injury after leaving an office-hosted or sponsored party. California courts have held employers liable for third-party personal injuries caused by employees who drive home from company holiday parties intoxicated. In the matter of Harris v. Trojan Fireworks Company, the Court held the employer liable for injuries caused by an intoxicated employee driving home from an office party. The Court held that, “although the accident occurred away from the employer’s premises and presumably after work, we believe that the operable factors giving rise to the subsequent accident at least make a prima facie showing that the accident occurred in the course of [the employee’s] employment. . . .” (120 Cal. App. 3d 157, at 164 (1981).) An employer choosing to serve alcoholic beverages at an office celebration should consider the following:
(a) Contemplate a no host bar. While this does not eliminate potential employer liability, it weakens the argument that the employer provided the alcohol.
(b) Prior to the event, re-distribute your workplace substance abuse policy; have employees read it, and acknowledge both receipt of the policy and an understanding of it. Make sure your employees know the policy includes the use of alcohol in any work-related event or situation and office social functions.
(c) Host the party at a commercial establishment whereby employees are not distributing the alcohol, and make certain the hired service has a valid liquor license. If a company does hold the event on work property, hire professional bartenders and require servers to check for proof of age of all employees and his or her guest(s). Of course, anybody under the age of 21 or unable to show proof of age should not be served alcohol.
(d) Alcohol should be attended at all times; party attendees should never be able to help themselves to drinks. Do not serve alcohol to any individual who is intoxicated or perceived to be intoxicated. A "last call" should be made at least one hour prior to the event closing time. Also, make non-alcoholic beverages available, including coffee.
(e) Coordinate and plan for alternative transportation. Anticipate the need for departure transportation for all party goers and make these arrangements in advance of the party. Encourage employees to have a designated driver or make use of the alternative transportation if they consume any alcohol.
3. Designate or hire a group of “party chaperones.” These individuals have the responsibility of monitoring for inappropriate behavior, illegal drug use, intoxication, and uninvited guests. Chaperones should report concerns to specified management for any necessary remedial action.
4. Avoid associating the party with any specific religion. Do not assume everyone celebrates the same holiday at the same time of year. Hosting a “holiday party” or “winterfest” encompasses those celebrating Christmas, Hanukkah, Kwanzaa, and other holidays. Refrain from using related decorations (i.e., Christmas Tree, Menorah, Mkeka, etc.), music, and greetings/verbiage (“Merry Christmas!). While this will certainly be noticed by employees and may arouse some discord with those who believe it is their right of religious freedom to exercise their independent customs, it should be easily explained and understood the employer’s attempt is to exclude no employee from the celebration and ensure equality in a diverse work environment.
5. If the party involves the exchange of gifts, ask employees to make suitable purchase choices. First, an employer should distribute its policy on gift-giving and confirm with employees that they will follow the policy. The larger and more structured the employer, the more likely a specific detailed written policy will be required. Request employees pay heed to budgets and refrain from purchasing and bringing gag items, overly personal items or other potentially offensive gifts.
6. Be extremely cautious of activities which may require or encourage physical contact. Avoid dancing and certain party games which provide the opportunity for touching or other potentially inappropriate behavior –which may lead to significant misunderstandings and potential employer liability.
7. Pay close attention to the invitation list. The enjoyment of a holiday party is not only influenced by the conduct of employees, but also by their guests. If you are aware an employee has invited a guest who prompts pre-party apprehension, have a direct discussion with the employee and attempt to prevent a potentially awkward onsite situation. If you see unsuitable behavior by a guest at the party, depending on the nature and degree of the conduct, you may need to ask the employee to intervene, or you may have to ask the guest to leave. Any guest arriving at the party without a known employee connection should not be allowed to enter. Remember, similar to the workplace, liability issues may arise from inappropriate or unsafe behavior by any third-party attending an office party.
With special care, planning, and the application of good judgment, holiday parties can still be fun. Most employers put significant effort into this gathering, genuinely intending to make it one of the most memorable events of the year. Have a good time and enjoy yourself and your co-workers. As is typical with much in life, the concept of moderation and use of common sense are keys to having a safe and liability-free holiday party.
Author Gary R. Basham, Esq., is a founding partner of the employment law firm Basham Parker LLP, where he exclusively practices employment law and related litigation. Mr. Basham has extensive experience with wrongful termination, discrimination, sexual harassment, and retaliation claims and litigation, and regularly defends employers against claims for breach of contract, unfair business practices, violation of wage and hour laws, as well as numerous other tort and statutory employment law causes of action. He frequently speaks and lectures at employment law seminars and provides workplace training and education to both management and employees. Mr. Basham may be reached at either his Sacramento or Walnut Creek, California, offices, by email to gary@bashamparker.com.
Tuesday, November 11, 2008
SOME COMMON SENSE RELIEF FROM DISABLED ACCESS LAWSUITS
On October 8, 2008 Governor Arnold Schwarzenegger signed a bill that increases public access for individuals with disabilities while reducing unwarranted litigation. SB 1608 is a bipartisan comprehensive reform measure, authored by Senators Ellen Corbett (D-San Leandro), Tom Harman (R-Huntington Beach) and Ron Calderon (D-Montebello), and Assembly Members Cameron Smyth (R-Santa Clarita) and Lois Wolk (D-Davis). The bill received unanimous support by both houses of the Legislature before being sent to the Governor.
SB 1608 is designed to address two important goals: (1) promoting and increasing compliance with state and federal civil rights laws providing for equal access for individuals with disabilities in public accommodations; and (2) reducing unwarranted, unnecessary litigation that does not advance the goals of disability access. SB 1608 arrives at a solution through a combination of the following key reform provisions: (1) Clarifications in the law to help reduce unwarranted damages and attorneys' fees; (2) A new disability commission which will be tasked with evaluating and providing recommendations on further disability issues having an impact on the disability community and business; (3) Improved continuing education in disability access laws for building inspectors and architects; (4) Incentivizing building owners to use state-certified access specialists to ensure compliance; and (5) A new court procedure to encourage early resolution of disability access lawsuits.
One of the important reforms in SB 1608 is a provision clarifying that plaintiffs may recover damages only for a violation they personally encountered or that deterred access on a particular occasion, rather than for alleged violations that may exist at a place of business but did not cause a denial of access. In addition, SB 1608 clarifies that a court can consider reasonable written settlement offers made and rejected in determining the amount of reasonable attorneys fees to be awarded at the end of a case, which is aimed at reducing unnecessary protraction of litigation by either party.
On October 8, 2008 Governor Arnold Schwarzenegger signed a bill that increases public access for individuals with disabilities while reducing unwarranted litigation. SB 1608 is a bipartisan comprehensive reform measure, authored by Senators Ellen Corbett (D-San Leandro), Tom Harman (R-Huntington Beach) and Ron Calderon (D-Montebello), and Assembly Members Cameron Smyth (R-Santa Clarita) and Lois Wolk (D-Davis). The bill received unanimous support by both houses of the Legislature before being sent to the Governor.
SB 1608 is designed to address two important goals: (1) promoting and increasing compliance with state and federal civil rights laws providing for equal access for individuals with disabilities in public accommodations; and (2) reducing unwarranted, unnecessary litigation that does not advance the goals of disability access. SB 1608 arrives at a solution through a combination of the following key reform provisions: (1) Clarifications in the law to help reduce unwarranted damages and attorneys' fees; (2) A new disability commission which will be tasked with evaluating and providing recommendations on further disability issues having an impact on the disability community and business; (3) Improved continuing education in disability access laws for building inspectors and architects; (4) Incentivizing building owners to use state-certified access specialists to ensure compliance; and (5) A new court procedure to encourage early resolution of disability access lawsuits.
One of the important reforms in SB 1608 is a provision clarifying that plaintiffs may recover damages only for a violation they personally encountered or that deterred access on a particular occasion, rather than for alleged violations that may exist at a place of business but did not cause a denial of access. In addition, SB 1608 clarifies that a court can consider reasonable written settlement offers made and rejected in determining the amount of reasonable attorneys fees to be awarded at the end of a case, which is aimed at reducing unnecessary protraction of litigation by either party.
PRESIDENT BUSH SIGNS LEGISLATIONAMENDING AND GREATLY EXPANDING THE ADA
On Thursday, September 25, 2008 President Bush signed legislation significantly amending the Americans with Disabilities Act. Some of the more significant changes:
Expanded Definition of Major Life ActivitiesA disability is defined as a physical or mental condition that substantially limits a "major life activity." The ADA currently does not include a definition of "major life activities." The EEOC regulations provide examples, such as: "caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working." President Bush's amendments now specifically incorporate these regulations into the ADA by the amendment. The amendment goes farther and also adds "major bodily functions" such as "functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions." This will most likely lead to a substantial expansion of workers considered disabled under federal law. Now, conditions such as high blood pressure, asthma, and other conditions may be considered disabilities under the ADA. Finally, the amendment also expands the definition of disability to include a condition that is in remission or that is episodic, if it would otherwise substantially limit a major life activity when active.
"Substantially Limits" Liberalized
A disability must "substantially limit" a major life activity. The Supreme Court and the EEOC has set a relatively high standard for"substantially limits." An individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people's daily lives. The new ADA amendment categorically rejects this standard.
"Regarded As" Restricted
The ADA protects workers who, while not actually disabled, are regarded as disabled by the employer. The amendment excludes from "regarded as" claims minor/transitory conditions lasting six months or less.
Disregard of Mitigating Measures
U.S. Supreme Court decisions have held that mitigating measures, such as prosthetic devices, should be taken into account when determining whether the workers are disabled. For example, Sutton v. United Airlines, Inc., 527 U.S. 471 (1999), involved myopic twin sisters who were rejected for employment by an airline because of their poor vision, although their vision was correctable with prescription lenses. The airline's policy required "uncorrected visual acuity" at a certain level, which the sisters did not have. The Supreme Court held that because the sisters' vision was correctable, they did not satisfy the ADA definition of "disability" and therefore could not make out a claim for discrimination.The ADA amendment rejects the Supreme Court's interpretation of the ADA. Now, a worker may qualify as disabled under the ADA regardless of whether corrective measures mitigate their condition. Mitigating measures that will not be considered under the new amendments to the ADA include items such as medication, hearing aids and cochlear implants, low-vision devices (which do not include ordinary eyeglasses or contact lenses), mobility devices, prosthetics including limbs and devices, or oxygen therapy equipment and supplies.
Conclusion
In California, a more liberal definition of disability is already in place. For example, the law in California, under the Fair Employment and Housing Act, already includes many of the provisions found in the ADA amendment.It will be some time before the effects of the ADA amendment can be gauged. The EEOC may issue new regulations or guides, which may help employers comply with the new standards. Ultimately, an increase in federal disability law litigation can probably be expected.
On Thursday, September 25, 2008 President Bush signed legislation significantly amending the Americans with Disabilities Act. Some of the more significant changes:
Expanded Definition of Major Life ActivitiesA disability is defined as a physical or mental condition that substantially limits a "major life activity." The ADA currently does not include a definition of "major life activities." The EEOC regulations provide examples, such as: "caring for oneself, performing manual tasks, seeing, hearing, eating, sleeping, walking, standing, lifting, bending, speaking, breathing, learning, reading, concentrating, thinking, communicating, and working." President Bush's amendments now specifically incorporate these regulations into the ADA by the amendment. The amendment goes farther and also adds "major bodily functions" such as "functions of the immune system, normal cell growth, digestive, bowel, bladder, neurological, brain, respiratory, circulatory, endocrine, and reproductive functions." This will most likely lead to a substantial expansion of workers considered disabled under federal law. Now, conditions such as high blood pressure, asthma, and other conditions may be considered disabilities under the ADA. Finally, the amendment also expands the definition of disability to include a condition that is in remission or that is episodic, if it would otherwise substantially limit a major life activity when active.
"Substantially Limits" Liberalized
A disability must "substantially limit" a major life activity. The Supreme Court and the EEOC has set a relatively high standard for"substantially limits." An individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people's daily lives. The new ADA amendment categorically rejects this standard.
"Regarded As" Restricted
The ADA protects workers who, while not actually disabled, are regarded as disabled by the employer. The amendment excludes from "regarded as" claims minor/transitory conditions lasting six months or less.
Disregard of Mitigating Measures
U.S. Supreme Court decisions have held that mitigating measures, such as prosthetic devices, should be taken into account when determining whether the workers are disabled. For example, Sutton v. United Airlines, Inc., 527 U.S. 471 (1999), involved myopic twin sisters who were rejected for employment by an airline because of their poor vision, although their vision was correctable with prescription lenses. The airline's policy required "uncorrected visual acuity" at a certain level, which the sisters did not have. The Supreme Court held that because the sisters' vision was correctable, they did not satisfy the ADA definition of "disability" and therefore could not make out a claim for discrimination.The ADA amendment rejects the Supreme Court's interpretation of the ADA. Now, a worker may qualify as disabled under the ADA regardless of whether corrective measures mitigate their condition. Mitigating measures that will not be considered under the new amendments to the ADA include items such as medication, hearing aids and cochlear implants, low-vision devices (which do not include ordinary eyeglasses or contact lenses), mobility devices, prosthetics including limbs and devices, or oxygen therapy equipment and supplies.
Conclusion
In California, a more liberal definition of disability is already in place. For example, the law in California, under the Fair Employment and Housing Act, already includes many of the provisions found in the ADA amendment.It will be some time before the effects of the ADA amendment can be gauged. The EEOC may issue new regulations or guides, which may help employers comply with the new standards. Ultimately, an increase in federal disability law litigation can probably be expected.
CALIFORNIA BANS "TEXTING" BEHIND THE WHEEL
California has banned text messaging while driving, and employers need to respond promptly by updating policies.SB 28, signed by Governor Schwarzenegger on September 24, 2008, amends the California Vehicle Code to state: "A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication." The penalty for violating the law is $20 for the first violation and $50 for subsequent violations. No violation points will be given as a result of the offense.The new law closes a loophole left by Senate Bill 1613 (Summarized here). Effective July 1, 2008, that new law provides that it is illegal to drive a motor vehicle while using a wireless telephone, unless a hands-free device for the cell phone is used. But the law did not expressly ban texting. (Separate legislation has already banned drivers under age 18 from using cell phones or any texting device while driving.)
What about using your PDA's phone directory to dial out a call? That doesn't count as texting under the new law: "For purposes of this section, a person shall not be deemed to be writing, reading, or sending a text-based communication if the person reads, selects, or enters a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call."
In order to minimize liability issues arising from employees using cell phones, PDAs, or other electronic communication devices on the road while in the course and scope of employment or while taking work-related calls, employers should implement a policy that prohibits employees from using cell phone or PDAs while driving. At a minimum, employers should require all employees to refrain from texting and to use "hands free" devices while driving on company business or when making business calls on the road.
California has banned text messaging while driving, and employers need to respond promptly by updating policies.SB 28, signed by Governor Schwarzenegger on September 24, 2008, amends the California Vehicle Code to state: "A person shall not drive a motor vehicle while using an electronic wireless communications device to write, send, or read a text-based communication." The penalty for violating the law is $20 for the first violation and $50 for subsequent violations. No violation points will be given as a result of the offense.The new law closes a loophole left by Senate Bill 1613 (Summarized here). Effective July 1, 2008, that new law provides that it is illegal to drive a motor vehicle while using a wireless telephone, unless a hands-free device for the cell phone is used. But the law did not expressly ban texting. (Separate legislation has already banned drivers under age 18 from using cell phones or any texting device while driving.)
What about using your PDA's phone directory to dial out a call? That doesn't count as texting under the new law: "For purposes of this section, a person shall not be deemed to be writing, reading, or sending a text-based communication if the person reads, selects, or enters a telephone number or name in an electronic wireless communications device for the purpose of making or receiving a telephone call."
In order to minimize liability issues arising from employees using cell phones, PDAs, or other electronic communication devices on the road while in the course and scope of employment or while taking work-related calls, employers should implement a policy that prohibits employees from using cell phone or PDAs while driving. At a minimum, employers should require all employees to refrain from texting and to use "hands free" devices while driving on company business or when making business calls on the road.
The New Kid on the Block! Getting to Know GINA
On May 21, 2008, President Bush signed the Genetic Information Non-discrimination Act (GINA) into law. However, GINA's employment-related discrimination provisions do not take effect until November 2009. GINA was enacted, in part, to protect individuals from discrimination in employment on the basis of their genetic information. The law's anti-discrimination provisions generally impact employers already covered by Title VII. GINA prohibits employer use of an employee's or applicant's genetic information as a basis fordiscrimination in the application process, or with regard to terms and conditions of employment. With a few enumerated exceptions, employers are also prohibited from requesting or acquiring an employee's genetic information or that of an employee's family member. Like the Americans with Disabilities Act (ADA), GINA contains a provision requiring that employers keep any genetic information maintained on employees in a separate, confidential medical file. Individuals making complaints pursuant to GINA will have to file a charge with the U.S. EqualEmployment Opportunity Commission (EEOC) as a prerequisite to file suit. Compensatory and punitive damages, as well as attorney's fees, may be available to a plaintiff prevailing on a genetic discrimination based claim.
Employers should be prepared to revise their policies and practices to ensure compliance with GINA.
On May 21, 2008, President Bush signed the Genetic Information Non-discrimination Act (GINA) into law. However, GINA's employment-related discrimination provisions do not take effect until November 2009. GINA was enacted, in part, to protect individuals from discrimination in employment on the basis of their genetic information. The law's anti-discrimination provisions generally impact employers already covered by Title VII. GINA prohibits employer use of an employee's or applicant's genetic information as a basis fordiscrimination in the application process, or with regard to terms and conditions of employment. With a few enumerated exceptions, employers are also prohibited from requesting or acquiring an employee's genetic information or that of an employee's family member. Like the Americans with Disabilities Act (ADA), GINA contains a provision requiring that employers keep any genetic information maintained on employees in a separate, confidential medical file. Individuals making complaints pursuant to GINA will have to file a charge with the U.S. EqualEmployment Opportunity Commission (EEOC) as a prerequisite to file suit. Compensatory and punitive damages, as well as attorney's fees, may be available to a plaintiff prevailing on a genetic discrimination based claim.
Employers should be prepared to revise their policies and practices to ensure compliance with GINA.
Is the Indigestion Caused By California's Meal and Rest Period Requirements Nearing an End?; California Court of Appeals Clarifies Meal and Rest Period Requirements
California employers have been under siege from plaintiffs claiming massive wage & hour violations. In a rare positive wage & hour decision for employers, a California Court of Appeal has clarified the meal and rest period requirements for California employees. In addition, the same Court significantly narrowed a plaintiff's ability to certify a putative class action based upon alleged meal and rest period violations.
In Brinker Restaurant Corporation et al. v. Superior Court (7/22/08), several waiters/waitresses brought a putative class action against Brinker for alleged meal and rest period violations, as well as for unpaid hours worked. The servers claimed Brinker failed to absolutely ensure employees received their meal and rest periods. The servers further claimed that Brinker's policy of requiring/permitting employees to take a meal period near the start of their shift, and then requiring the employee to continue working for five or more hours without an additional meal period violated the Labor Code. Finally, the employees claimed that they worked off-the-clock without compensation. Based upon the alleged "across the board" violations, the employees sought class certification of their claims. Brinker's position was that it provides employees with an opportunity to take an appropriate meal and rest period at some point during their shift.
The Court of Appeal rejected the employees' contentions and held that employers need only provide, not ensure, that meal and rest periods are taken. The court explained that the language in section 512 of the California Labor Code means that employers need only offer meal breaks and do not need to police their employees to ensure that meal breaks are actually taken. However, the court did provide examples of how an employer would be non-compliant, such as when an employer did not schedule meal periods, did not have a policy authorizing meal periods, or pressured employees to skip meals. The court noted that if an employer knew that employees were working while eating, and did not take steps to address the situation, the employer would be depriving employees of their breaks and therefore would have failed to "provide" meal periods. The court also expressly rejected the concept of a "rolling 5-hour meal period" advanced by the plaintiffs, holding that employers are not required to provide a meal period for every five consecutive hours worked. An employer need only provide a 30-minute break once at any time during a work period that does not exceed ten hours.In addition, while addressing the class certification issues, the Court of Appeal determined that "because the rest and meal breaks need only be 'made available' and not 'ensured,' individual issues predominate" over class claims as each putative class member's situation must be determined on a case-by-case basis. Thus, based upon the evidence presented to the trial court, the Court of Appeal determined that the employees' claims were not amenable to class treatment. The holding should, in effect, make it more difficult to certify class-wide claims for meal period, rest period, and overtime violations.
Going Forward
The Brinker decision is likely to be appealed, finally placing the issue before the California Supreme Court. Currently, the decision provides California employers with some flexibility in scheduling and permitting employees to take their meal and rest periods. In addition, where the court focused on the Company's policies regarding meal & rest periods, the decision highlights the importance of employers' policies and procedures regarding their wage and hour practices.
[UPDATE: THE CALIFORNIA SUPREME COURT HAS ACCEPTED REVIEW OF THIS DECISION. EMPLOYERS SHOULD SIT TIGHT UNTIL THE CALIFORNIA SUPREME COURT MAKES ITS RULING.]
California employers have been under siege from plaintiffs claiming massive wage & hour violations. In a rare positive wage & hour decision for employers, a California Court of Appeal has clarified the meal and rest period requirements for California employees. In addition, the same Court significantly narrowed a plaintiff's ability to certify a putative class action based upon alleged meal and rest period violations.
In Brinker Restaurant Corporation et al. v. Superior Court (7/22/08), several waiters/waitresses brought a putative class action against Brinker for alleged meal and rest period violations, as well as for unpaid hours worked. The servers claimed Brinker failed to absolutely ensure employees received their meal and rest periods. The servers further claimed that Brinker's policy of requiring/permitting employees to take a meal period near the start of their shift, and then requiring the employee to continue working for five or more hours without an additional meal period violated the Labor Code. Finally, the employees claimed that they worked off-the-clock without compensation. Based upon the alleged "across the board" violations, the employees sought class certification of their claims. Brinker's position was that it provides employees with an opportunity to take an appropriate meal and rest period at some point during their shift.
The Court of Appeal rejected the employees' contentions and held that employers need only provide, not ensure, that meal and rest periods are taken. The court explained that the language in section 512 of the California Labor Code means that employers need only offer meal breaks and do not need to police their employees to ensure that meal breaks are actually taken. However, the court did provide examples of how an employer would be non-compliant, such as when an employer did not schedule meal periods, did not have a policy authorizing meal periods, or pressured employees to skip meals. The court noted that if an employer knew that employees were working while eating, and did not take steps to address the situation, the employer would be depriving employees of their breaks and therefore would have failed to "provide" meal periods. The court also expressly rejected the concept of a "rolling 5-hour meal period" advanced by the plaintiffs, holding that employers are not required to provide a meal period for every five consecutive hours worked. An employer need only provide a 30-minute break once at any time during a work period that does not exceed ten hours.In addition, while addressing the class certification issues, the Court of Appeal determined that "because the rest and meal breaks need only be 'made available' and not 'ensured,' individual issues predominate" over class claims as each putative class member's situation must be determined on a case-by-case basis. Thus, based upon the evidence presented to the trial court, the Court of Appeal determined that the employees' claims were not amenable to class treatment. The holding should, in effect, make it more difficult to certify class-wide claims for meal period, rest period, and overtime violations.
Going Forward
The Brinker decision is likely to be appealed, finally placing the issue before the California Supreme Court. Currently, the decision provides California employers with some flexibility in scheduling and permitting employees to take their meal and rest periods. In addition, where the court focused on the Company's policies regarding meal & rest periods, the decision highlights the importance of employers' policies and procedures regarding their wage and hour practices.
[UPDATE: THE CALIFORNIA SUPREME COURT HAS ACCEPTED REVIEW OF THIS DECISION. EMPLOYERS SHOULD SIT TIGHT UNTIL THE CALIFORNIA SUPREME COURT MAKES ITS RULING.]
Friday, May 30, 2008
Simple Math: More Layoffs Equals More Lawsuits!
When the economy struggles many employers cut costs through layoffs, hiring freezes, and/or reduced recruiting efforts. While these are often business necessities, before taking such any course of action, employers should be aware of the recent rise in charge filings with the U.S. Equal Employment Opportunity Commission (EEOC).
According to recently released EEOC statistics for 2007, charges of employment bias rose nine percent, the biggest annual increase since the early 1990s and the highest volume of charges since 2002. While race continued to be the largest charge category (with 30,510 charges filed in 2007), retaliation charges became the second largest category with 26,663 charges, bypassing, for the first time ever, the 24,826 sex-based charges. the 2007 figures also included 19,103 age-based charges and 17,734 disability discrimination charges.
On the surface, an employer's decision to lay off employees in the midst of a recession has no correlation to claims of discrimination. However, the EEOC itself acknowledged changing economic conditions as one of several possible explanations for the recent rise in the filing of charges of discrimination. Thus, if reductions-in-force or other cost-saving efforts are not well thought out or mis-handled, an employer may see an increase in EEOC charges filed against it. Potential EEOC charges will undoubtedly increase legal fees and will have an impact of savings achieved from employers cost cutting efforts.
Start Up Employees Exempt?: Administrative Exemption Strengthened in California
In California, unless specifically exempted, an employee is presumed to be non-exempt and subject to the provisions of the applicable Wage Order. However, if properly subject to an exemption an employee will be exempt from entitlements under many sections of the Wage Order, including meal & rest periods, recordkeeping, and the minimum wage and overtime provisions.
A recent decision by the California Fourth District Court of Appeal held that an employee working in a fast-paced start-up business operating with a "flat organization"
could still qualify for the administrative exemption for salaried employees as long as all requirements for the exemption were satisfied. In the ruling, the appellate court adopted the common-sense analysis set forth by the federal regulations applicable to the "administrative exemption," which are expressly incorporated by the Industrial Welfare Commission Wage Orders. Combs v. Skyriver Communications.
An employee is properly employed in an administrative capacity under this exemption if the employee satisfies a five-prong test largely centered around whether the employee's duties and responsibilities involve the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer's customers.
To assist in the determination of this so called "duties test," the Wage Order provides that exempt work includes all work that is "directly and closely related to exempt work" and work which is properly viewed as "a means for carrying out exempt functions."
This shows that multi-tasking need not count against an employee's exempt status when the employee is also performing an exempt duty.
The Facts in the Combs Case: Skyriver was a high-speed, wireless, broadband internet service provider. The company was described as a "young start-up company." The employee, Mark Combs, worked as manager of capacity planning, and later as director of network operations. He was paid a salary ranging between $70,000 and $90,000. Combs later depicted his job as nothing but a glorified troubleshooter, complained that he had to carry a pager, that his meal breaks were interrupted, and that he could not take a rest break.
But if Combs were exempt, he would not have been entitled to meal and rest periods.
In his resume, prepared after he left Skyriver, he detailed that, as Skyriver's director of network operations, he was responsible for a broad array of important functions, including project management, budgeting, vendor management, purchasing, forecasting; management of employees, overseas deployment of wireless data network, the integration and standardization of three networks into the Skyriver architecture; and the overseeing of day-to-day network operations of the company.
At trial, Combs and his witnesses acknowledged his resumé was accurate. Among other things, Combs further testified on his own behalf that his "core" responsibility at Skyriver was "maintaining the well-being of the network," and that he spent 60 to 70 percent of his time working alongside other employees in carrying out that responsibility. Combs argued he was non-exempt employee because his work involved production as opposed to purely administrative duties. Combs submitted evidence that the company was a flat organization where "everybody worked with everybody."
The trial court granted Skyriver's motion for judgment, holding that Combs was performing duties that involved matters of substantial importance to running the business.
The mere fact that he worked alongside other employees did not change the fact that he was performing exempt duties. The court held that start-up companies by their nature had fewer employees requiring greater flexibility.
Combs appealed but the appellate court also held that "substantial evidence shows that Comb's exercise of discretion and independent judgment pertained to matters of significance." The court reasoned that Combs' own testimony and documentary exhibits, including emails, demonstrated that he was performing primarily exempt functions. In short, although Combs strained to "dumb down" his duties, the courts saw the job for what it really was: an exempt position.
Ultimately, this case is good news for employers involved in misclassification lawsuits.
However, below are a few tips to try and avoid ever being in the position of being sued over misclassification issues.
Employers must devise job descriptions to satisfy exemption requirements, and ensure that such jobs rationally fit the organizational structure to preserve exempt duties.
Employers should also conduct periodic internal audits of all salaried exempt positions, preferably with the advice of legal counsel, to make sure that the pertinent job descriptions and expectations within the organizational structure properly set out exempt duties. Finally, make sure by observation and that the actual duties performed by employees in exempt jobs are consistent with the reasonable expectations of their job descriptions.
When the economy struggles many employers cut costs through layoffs, hiring freezes, and/or reduced recruiting efforts. While these are often business necessities, before taking such any course of action, employers should be aware of the recent rise in charge filings with the U.S. Equal Employment Opportunity Commission (EEOC).
According to recently released EEOC statistics for 2007, charges of employment bias rose nine percent, the biggest annual increase since the early 1990s and the highest volume of charges since 2002. While race continued to be the largest charge category (with 30,510 charges filed in 2007), retaliation charges became the second largest category with 26,663 charges, bypassing, for the first time ever, the 24,826 sex-based charges. the 2007 figures also included 19,103 age-based charges and 17,734 disability discrimination charges.
On the surface, an employer's decision to lay off employees in the midst of a recession has no correlation to claims of discrimination. However, the EEOC itself acknowledged changing economic conditions as one of several possible explanations for the recent rise in the filing of charges of discrimination. Thus, if reductions-in-force or other cost-saving efforts are not well thought out or mis-handled, an employer may see an increase in EEOC charges filed against it. Potential EEOC charges will undoubtedly increase legal fees and will have an impact of savings achieved from employers cost cutting efforts.
Start Up Employees Exempt?: Administrative Exemption Strengthened in California
In California, unless specifically exempted, an employee is presumed to be non-exempt and subject to the provisions of the applicable Wage Order. However, if properly subject to an exemption an employee will be exempt from entitlements under many sections of the Wage Order, including meal & rest periods, recordkeeping, and the minimum wage and overtime provisions.
A recent decision by the California Fourth District Court of Appeal held that an employee working in a fast-paced start-up business operating with a "flat organization"
could still qualify for the administrative exemption for salaried employees as long as all requirements for the exemption were satisfied. In the ruling, the appellate court adopted the common-sense analysis set forth by the federal regulations applicable to the "administrative exemption," which are expressly incorporated by the Industrial Welfare Commission Wage Orders. Combs v. Skyriver Communications.
An employee is properly employed in an administrative capacity under this exemption if the employee satisfies a five-prong test largely centered around whether the employee's duties and responsibilities involve the performance of office or non-manual work directly related to management policies or general business operations of his/her employer or his/her employer's customers.
To assist in the determination of this so called "duties test," the Wage Order provides that exempt work includes all work that is "directly and closely related to exempt work" and work which is properly viewed as "a means for carrying out exempt functions."
This shows that multi-tasking need not count against an employee's exempt status when the employee is also performing an exempt duty.
The Facts in the Combs Case: Skyriver was a high-speed, wireless, broadband internet service provider. The company was described as a "young start-up company." The employee, Mark Combs, worked as manager of capacity planning, and later as director of network operations. He was paid a salary ranging between $70,000 and $90,000. Combs later depicted his job as nothing but a glorified troubleshooter, complained that he had to carry a pager, that his meal breaks were interrupted, and that he could not take a rest break.
But if Combs were exempt, he would not have been entitled to meal and rest periods.
In his resume, prepared after he left Skyriver, he detailed that, as Skyriver's director of network operations, he was responsible for a broad array of important functions, including project management, budgeting, vendor management, purchasing, forecasting; management of employees, overseas deployment of wireless data network, the integration and standardization of three networks into the Skyriver architecture; and the overseeing of day-to-day network operations of the company.
At trial, Combs and his witnesses acknowledged his resumé was accurate. Among other things, Combs further testified on his own behalf that his "core" responsibility at Skyriver was "maintaining the well-being of the network," and that he spent 60 to 70 percent of his time working alongside other employees in carrying out that responsibility. Combs argued he was non-exempt employee because his work involved production as opposed to purely administrative duties. Combs submitted evidence that the company was a flat organization where "everybody worked with everybody."
The trial court granted Skyriver's motion for judgment, holding that Combs was performing duties that involved matters of substantial importance to running the business.
The mere fact that he worked alongside other employees did not change the fact that he was performing exempt duties. The court held that start-up companies by their nature had fewer employees requiring greater flexibility.
Combs appealed but the appellate court also held that "substantial evidence shows that Comb's exercise of discretion and independent judgment pertained to matters of significance." The court reasoned that Combs' own testimony and documentary exhibits, including emails, demonstrated that he was performing primarily exempt functions. In short, although Combs strained to "dumb down" his duties, the courts saw the job for what it really was: an exempt position.
Ultimately, this case is good news for employers involved in misclassification lawsuits.
However, below are a few tips to try and avoid ever being in the position of being sued over misclassification issues.
Employers must devise job descriptions to satisfy exemption requirements, and ensure that such jobs rationally fit the organizational structure to preserve exempt duties.
Employers should also conduct periodic internal audits of all salaried exempt positions, preferably with the advice of legal counsel, to make sure that the pertinent job descriptions and expectations within the organizational structure properly set out exempt duties. Finally, make sure by observation and that the actual duties performed by employees in exempt jobs are consistent with the reasonable expectations of their job descriptions.
Tuesday, February 27, 2007
THE AFTERSHOCKS OF SAN FRANCISCO’S RECENT ELECTION: PAID SICK LEAVE ORDINANCE GOES INTO EFFECT ON FEBRUARY 5, 2007
On November 7, 2006, San Francisco voters passed the “Paid Sick Leave Ordinance.” This ordinance is set to take effect on February 5, 2007. While many employers throughout California took an amused glance at the Ordinance, the aftershocks of this Employment Law earthquake are now being felt across the country.
The Epicenter: The City and County of San Francisco
Generally, the Ordinance provides that all employers with one or more full-time, part-time, or temporary workers employed within the City and County of San Francisco must provide those employees with paid sick leave coverage. Employers with ten or more employees must enable their employees to earn up to 72 hours of paid sick leave per year, while those with less than ten employees must provide up to 40 hours per year. An employee accrues one hour of sick leave for every 30 hours of work, up to his or her maximum allocation. All accrued leave can be used not only for the employee’s own illness, but for the illness of a parent, child, sibling, grandparent, grandchild, spouse, registered domestic partner, or other related individuals as broadly defined in the Ordinance. While employees who do not receive paid sick leave on equally or more favorable terms begin accruing paid sick leave on February 5, 2007, individuals employed after that date must wait for 90 days to begin accrual.
The Ordinance alters existing California law as it pertains to San Francisco employers. Section 233 of the California Labor Code, which governs the administration of sick leave, applies only to those California employers who choose to provide sick leave; however, it does not require employers to do so. Conversely, the Ordinance affirmatively mandates employers to provide sick leave to their San Francisco employees, and authorizes the enactment of oversight and enforcement procedures.
In addition, employers must post a notice informing employees of their rights in a “conspicuous place at the workplace or job site.” The posting must be in English, Spanish, Chinese, and any other language spoken by at least five percent of the employees at the workplace or job site. The City’s Office of Labor Standards Enforcement is charged with making available translated versions of the notice.
The Ordinance authorizes civil suits by the Office of Labor Standards Enforcement, the City Attorney, any person “aggrieved by a violation,” and those “acting on behalf of the public.” Recovery extends to all “legal or equitable relief as may be appropriate to remedy the violation,” including reinstatement, back pay, the payment of any sick leave unlawfully withheld, liquidated damages, injunctive relief, and reasonable attorneys’ fees.
The Aftershocks: Infecting Employers Statewide
While seemingly San Francisco specific, Employers will be surprised to know that San Francisco's Office of Labor Standards Enforcement takes the position that paid sick leave must accrue when any employee performs any work in San Francisco, even if only temporarily. Once the employee works 30 hours in San Francisco, no matter how long it takes them to do so, the employee accrues an hour of paid sick leave. Surprisingly, the employee is then entitled to only take paid sick leave when scheduled to work in San Francisco.
For example, assume an employee based in Sacramento travels to San Francisco for a morning meeting. Assuming the employee is in San Francisco for a total of three hours, the employer is required by the Ordinance to track that time to determine when the employee earns sick leave after 27 more hours of performing work in San Francisco. Other common examples requiring tracking include a delivery driver who spends 5 hours out of 8 hours delivering in San Francisco per day, a salesperson whose territory includes San Francisco, and an employee who attends a work mandated conference or convention in San Francisco. In each case, the employer must track and total the hours worked in San Francisco and then credit one hour's sick pay for each 30 hours of work within the City and County of San Francisco. In addition, the San Francisco Office of Labor Standards Enforcement takes the position these new rules apply to both non-exempt and exempt employees.
The burdens on employers without paid sick leave are obvious. Many employers who have some employees working periodically in the City or County of San Francisco may have to consider how to track their employees’ time while they are working in San Francisco. While legal challenges to this Ordinance are likely, it will took effect on February 5, 2007. If you have not accounted for this change, we have work to do!
On November 7, 2006, San Francisco voters passed the “Paid Sick Leave Ordinance.” This ordinance is set to take effect on February 5, 2007. While many employers throughout California took an amused glance at the Ordinance, the aftershocks of this Employment Law earthquake are now being felt across the country.
The Epicenter: The City and County of San Francisco
Generally, the Ordinance provides that all employers with one or more full-time, part-time, or temporary workers employed within the City and County of San Francisco must provide those employees with paid sick leave coverage. Employers with ten or more employees must enable their employees to earn up to 72 hours of paid sick leave per year, while those with less than ten employees must provide up to 40 hours per year. An employee accrues one hour of sick leave for every 30 hours of work, up to his or her maximum allocation. All accrued leave can be used not only for the employee’s own illness, but for the illness of a parent, child, sibling, grandparent, grandchild, spouse, registered domestic partner, or other related individuals as broadly defined in the Ordinance. While employees who do not receive paid sick leave on equally or more favorable terms begin accruing paid sick leave on February 5, 2007, individuals employed after that date must wait for 90 days to begin accrual.
The Ordinance alters existing California law as it pertains to San Francisco employers. Section 233 of the California Labor Code, which governs the administration of sick leave, applies only to those California employers who choose to provide sick leave; however, it does not require employers to do so. Conversely, the Ordinance affirmatively mandates employers to provide sick leave to their San Francisco employees, and authorizes the enactment of oversight and enforcement procedures.
In addition, employers must post a notice informing employees of their rights in a “conspicuous place at the workplace or job site.” The posting must be in English, Spanish, Chinese, and any other language spoken by at least five percent of the employees at the workplace or job site. The City’s Office of Labor Standards Enforcement is charged with making available translated versions of the notice.
The Ordinance authorizes civil suits by the Office of Labor Standards Enforcement, the City Attorney, any person “aggrieved by a violation,” and those “acting on behalf of the public.” Recovery extends to all “legal or equitable relief as may be appropriate to remedy the violation,” including reinstatement, back pay, the payment of any sick leave unlawfully withheld, liquidated damages, injunctive relief, and reasonable attorneys’ fees.
The Aftershocks: Infecting Employers Statewide
While seemingly San Francisco specific, Employers will be surprised to know that San Francisco's Office of Labor Standards Enforcement takes the position that paid sick leave must accrue when any employee performs any work in San Francisco, even if only temporarily. Once the employee works 30 hours in San Francisco, no matter how long it takes them to do so, the employee accrues an hour of paid sick leave. Surprisingly, the employee is then entitled to only take paid sick leave when scheduled to work in San Francisco.
For example, assume an employee based in Sacramento travels to San Francisco for a morning meeting. Assuming the employee is in San Francisco for a total of three hours, the employer is required by the Ordinance to track that time to determine when the employee earns sick leave after 27 more hours of performing work in San Francisco. Other common examples requiring tracking include a delivery driver who spends 5 hours out of 8 hours delivering in San Francisco per day, a salesperson whose territory includes San Francisco, and an employee who attends a work mandated conference or convention in San Francisco. In each case, the employer must track and total the hours worked in San Francisco and then credit one hour's sick pay for each 30 hours of work within the City and County of San Francisco. In addition, the San Francisco Office of Labor Standards Enforcement takes the position these new rules apply to both non-exempt and exempt employees.
The burdens on employers without paid sick leave are obvious. Many employers who have some employees working periodically in the City or County of San Francisco may have to consider how to track their employees’ time while they are working in San Francisco. While legal challenges to this Ordinance are likely, it will took effect on February 5, 2007. If you have not accounted for this change, we have work to do!
THE DLSE CLARIFIES POSITION REGARDING PARTIAL DAY DEDUCTIONS FOR EXEMPT EMPLOYEES
The DLSE Has now clarified its position on partial day deductions for exempt employees
The California Division of Labor Standards and Enforcement (DLSE) recently updated its Enforcement Policies and Interpretations Manual to authorize employers to make deductions from an exempt employee's accrued vacation or paid time off (PTO) bank for partial day absences under certain circumstances. This change follows a California Court of Appeal’s decision rendered in July 2005. See, Conley v. Pacific Gas & Electric Co., 131 Cal. App. 4th 260 (Ca. App. 1st Dist., 2005).; DLSE Enforcement Policies and Interpretations Manual sec. 51.6.15.4.)
The DLSE's year long delay in accepting the court's holding caused many California employers to be confused and/or extremely cautious about changing their policies on partial day absences for exempt employees. However, in July 2006, the DLSE finally amended its manual (section 51.6.15.4) and adopted the Conley Court's decision. The DLSE Manual now provides that employers may deduct partial day absences from an exempt employee's accrued vacation/PTO bank for employee absences of 4 hours or more. These rules do not apply to sick leave banks.
Employers should keep in mind the current state of the law on partial day deductions is based on one Court of Appeal decision and the DLSE’s Enforcement Manual. While most courts consider the DLSE’s position on a wage and hour issue to be persuasive, it is not binding. In addition, different California Courts of Appeal may rule differently than the First District in Conley, setting up a California Supreme Court showdown. Employers should contact employment law counsel before making any partial day deductions from exempt employees’ vacation or PTO bank.
The DLSE Has now clarified its position on partial day deductions for exempt employees
The California Division of Labor Standards and Enforcement (DLSE) recently updated its Enforcement Policies and Interpretations Manual to authorize employers to make deductions from an exempt employee's accrued vacation or paid time off (PTO) bank for partial day absences under certain circumstances. This change follows a California Court of Appeal’s decision rendered in July 2005. See, Conley v. Pacific Gas & Electric Co., 131 Cal. App. 4th 260 (Ca. App. 1st Dist., 2005).; DLSE Enforcement Policies and Interpretations Manual sec. 51.6.15.4.)
The DLSE's year long delay in accepting the court's holding caused many California employers to be confused and/or extremely cautious about changing their policies on partial day absences for exempt employees. However, in July 2006, the DLSE finally amended its manual (section 51.6.15.4) and adopted the Conley Court's decision. The DLSE Manual now provides that employers may deduct partial day absences from an exempt employee's accrued vacation/PTO bank for employee absences of 4 hours or more. These rules do not apply to sick leave banks.
Employers should keep in mind the current state of the law on partial day deductions is based on one Court of Appeal decision and the DLSE’s Enforcement Manual. While most courts consider the DLSE’s position on a wage and hour issue to be persuasive, it is not binding. In addition, different California Courts of Appeal may rule differently than the First District in Conley, setting up a California Supreme Court showdown. Employers should contact employment law counsel before making any partial day deductions from exempt employees’ vacation or PTO bank.
The U.S. Department of Labor Determines Restaurants Cannot Deduct for Uniform Cleaning
The United Stated Department of Labor (“DOL”) recently issued a Wage and Hour Opinion Letter, FLSA 2006-21, (June 9, 2006), prohibiting restaurant owners from deducting the costs associated with laundering uniforms from staffs’ wages. The opinion letter stated that “no portion of an employee’s tips may be kicked back to the employer to cover the cost of uniform laundering,” and “even if the tips actually received exceed the maximum tip credit the employer needs to claim toward payment of the minimum wage, these excess tips are not deemed to be wages for purposes of the FLSA.”
The DOL further stated “A policy that employees must wear clean uniforms while on duty and the assurance that servers will always appear in clean, freshly pressed uniform tops, is primarily a convenience and benefit to the employer. As such, the cost of the laundering and pressing of the garment is a cost of doing business that may not be imposed on the employees if doing so would reduce their wages below minimum wage.”
While the DOL Opinion Letter specifically applies to restaurants, there is likely no reason the same standard would not be applied by the government to different work environments, such as security personnel, maintenance workers, or other similar occupations. Employers should be mindful to review their policies regarding uniforms in light of the DOL’s latest Opinion Letter.
The United Stated Department of Labor (“DOL”) recently issued a Wage and Hour Opinion Letter, FLSA 2006-21, (June 9, 2006), prohibiting restaurant owners from deducting the costs associated with laundering uniforms from staffs’ wages. The opinion letter stated that “no portion of an employee’s tips may be kicked back to the employer to cover the cost of uniform laundering,” and “even if the tips actually received exceed the maximum tip credit the employer needs to claim toward payment of the minimum wage, these excess tips are not deemed to be wages for purposes of the FLSA.”
The DOL further stated “A policy that employees must wear clean uniforms while on duty and the assurance that servers will always appear in clean, freshly pressed uniform tops, is primarily a convenience and benefit to the employer. As such, the cost of the laundering and pressing of the garment is a cost of doing business that may not be imposed on the employees if doing so would reduce their wages below minimum wage.”
While the DOL Opinion Letter specifically applies to restaurants, there is likely no reason the same standard would not be applied by the government to different work environments, such as security personnel, maintenance workers, or other similar occupations. Employers should be mindful to review their policies regarding uniforms in light of the DOL’s latest Opinion Letter.
California Supreme Court Applies Proposition 64 To Pending Cases, Clarifying Who Has Standing to Sue Under California's Unfair Competition Law
On July 24, 2006, the California Supreme Court issued two opinions involving what standing is required for private litigants attempting to pursue claims under California's Unfair Competition Law (the "UCL"): Californians for Disability Rights v. Mervyn's, No. S131798 and Branick v. Downey Savings and Loan Association, No. S132433 (July 24, 2006).
In November 2004, California voters approved Proposition 64, legislation attempting to stop abuse of the UCL by restricting standing under the Act. Before Proposition 64, a private litigant could file suit under the UCL on behalf of "the general public" regardless of whether or not he or she had suffered any actual injury or damage by the defendant. Proposition 64 stated that a private litigant can only file suit under the UCL when he or she has suffered actual harm.
The question before the California Supreme Court was whether the “standing” requirement of Proposition 64 would be applied to UCL cases filed before Proposition 64 was passed. The California Supreme Court ruled in Californians for Disability Rights v. Mervyn's that Proposition 64 applies to pending cases, but that a plaintiff who lacks any actual harm and therefore standing under the UCL can attempt to amend his or her lawsuit to add a plaintiff who has standing.
The California Supreme Court acknowledged that generally statutes operate prospectively, absent a clear indication that the voters intended otherwise. The Court observed California voters had not indicated that Proposition 64 was to operate retroactively. The Court nonetheless concluded that Proposition 64 did apply to cases pending at the time it took effect, reasoning that a statute is only applied retroactively when the application of the statute would impose new or different liabilities based upon past conduct. The Court found Proposition 64 "left entirely unchanged the substantive rules governing business and competitive conduct. Nothing a business might lawfully do before Proposition 64 is unlawful now, and nothing earlier forbidden is now permitted." Thus the Court found applying Proposition 64 to cases pending at the time it was passed would not constitute the retroactive application of a statute.
The California Supreme Court in Downey also added that plaintiffs could amend their complaint to substitute in someone who had actually suffered actual injury. Such substitution is to be allowed provided that the new plaintiff does not "state facts which give rise to a wholly distinct and different legal obligation against the defendant." Furthermore, the Court held that if the new plaintiff's claim rests on the same general set of facts and injury as the original plaintiff's claim, the new plaintiff's claim will typically "relate back" to the filing of the original complaint. Therefore, the new plaintiff would be able to seek damages for the four-year period statute of limitations period preceding the filing of the original complaint – not just four years from the date s/he was substituted into the case.
In past years it has been commonplace for plaintiff's attorneys to include a UCL claim when asserting the violation of certain statutes, usually alleged violations of California’s Labor Code. The California Supreme Court's decisions will curtail the abuse of the UCL by union leaders and other “puppet plaintiffs,” absent their ability to locate a current or former employee who feels he or she has suffered actual harm. While the Court’s decision is certainly a victory for California’s employers, it is still no substitute for careful examination and adherence to California’s complex employment laws.
On July 24, 2006, the California Supreme Court issued two opinions involving what standing is required for private litigants attempting to pursue claims under California's Unfair Competition Law (the "UCL"): Californians for Disability Rights v. Mervyn's, No. S131798 and Branick v. Downey Savings and Loan Association, No. S132433 (July 24, 2006).
In November 2004, California voters approved Proposition 64, legislation attempting to stop abuse of the UCL by restricting standing under the Act. Before Proposition 64, a private litigant could file suit under the UCL on behalf of "the general public" regardless of whether or not he or she had suffered any actual injury or damage by the defendant. Proposition 64 stated that a private litigant can only file suit under the UCL when he or she has suffered actual harm.
The question before the California Supreme Court was whether the “standing” requirement of Proposition 64 would be applied to UCL cases filed before Proposition 64 was passed. The California Supreme Court ruled in Californians for Disability Rights v. Mervyn's that Proposition 64 applies to pending cases, but that a plaintiff who lacks any actual harm and therefore standing under the UCL can attempt to amend his or her lawsuit to add a plaintiff who has standing.
The California Supreme Court acknowledged that generally statutes operate prospectively, absent a clear indication that the voters intended otherwise. The Court observed California voters had not indicated that Proposition 64 was to operate retroactively. The Court nonetheless concluded that Proposition 64 did apply to cases pending at the time it took effect, reasoning that a statute is only applied retroactively when the application of the statute would impose new or different liabilities based upon past conduct. The Court found Proposition 64 "left entirely unchanged the substantive rules governing business and competitive conduct. Nothing a business might lawfully do before Proposition 64 is unlawful now, and nothing earlier forbidden is now permitted." Thus the Court found applying Proposition 64 to cases pending at the time it was passed would not constitute the retroactive application of a statute.
The California Supreme Court in Downey also added that plaintiffs could amend their complaint to substitute in someone who had actually suffered actual injury. Such substitution is to be allowed provided that the new plaintiff does not "state facts which give rise to a wholly distinct and different legal obligation against the defendant." Furthermore, the Court held that if the new plaintiff's claim rests on the same general set of facts and injury as the original plaintiff's claim, the new plaintiff's claim will typically "relate back" to the filing of the original complaint. Therefore, the new plaintiff would be able to seek damages for the four-year period statute of limitations period preceding the filing of the original complaint – not just four years from the date s/he was substituted into the case.
In past years it has been commonplace for plaintiff's attorneys to include a UCL claim when asserting the violation of certain statutes, usually alleged violations of California’s Labor Code. The California Supreme Court's decisions will curtail the abuse of the UCL by union leaders and other “puppet plaintiffs,” absent their ability to locate a current or former employee who feels he or she has suffered actual harm. While the Court’s decision is certainly a victory for California’s employers, it is still no substitute for careful examination and adherence to California’s complex employment laws.
Wage & Hour: Companies not liable for subcontractor’s failure to pay correct wages
On April 18, 2006, the California Court of Appeal in Violante v. Communities Southwest Dev. & Constr. Co. held that employees of subcontractors on public works projects may not sue parties other than their direct employer for alleged violations of California prevailing wage laws. There, construction workers alleged thousands of workers “were paid less than prevailing wages as required by California Labor Code section 1770 et seq. for public works projects." The class action complaint alleged violations of Labor Code section 1774, breach of contract and unfair business practices against numerous defendants, including the contractor that hired plaintiffs’ employer, a subcontractor on the project.
The Court found that "Plaintiffs have a right of action against the subcontractor, their direct employer . . . . But the Labor Code nowhere requires the contractor to pay prevailing wages to a subcontractor’s employee or permits a subcontractor’s employee to sue the prime contractor when the subcontractor fails to pay prevailing wages." Also, where there is no violation of the underlying prevailing wage law, the Court ruled plaintiffs could not maintain unfair business practices or unfair competition claims under the Business and Professions Code.
Liability for prevailing wages likely will continue to be a very hot legal issue for developers and contractors. For years, non-union contractors have been under siege with lawsuits initiated by Unions in an attempt to force recognition through settlement, rather than through organization. One unsettled question is how this opinion will affect California Labor Code section 2810, which prohibits contractors from entering into any contract that it knows or should have known does not include sufficient funds to allow the subcontractor to comply with all applicable employment law provisions.
Our attorneys handle numerous wage & hour cases throughout Northern California. While small, our highly skilled attorneys effectively and efficiently defend class actions and invidual claims for wages, meal & rest periods, overtime, etc. We are highly regarded and routinely considered by some of the nation's and region's largest employers to defend against these claims.
On April 18, 2006, the California Court of Appeal in Violante v. Communities Southwest Dev. & Constr. Co. held that employees of subcontractors on public works projects may not sue parties other than their direct employer for alleged violations of California prevailing wage laws. There, construction workers alleged thousands of workers “were paid less than prevailing wages as required by California Labor Code section 1770 et seq. for public works projects." The class action complaint alleged violations of Labor Code section 1774, breach of contract and unfair business practices against numerous defendants, including the contractor that hired plaintiffs’ employer, a subcontractor on the project.
The Court found that "Plaintiffs have a right of action against the subcontractor, their direct employer . . . . But the Labor Code nowhere requires the contractor to pay prevailing wages to a subcontractor’s employee or permits a subcontractor’s employee to sue the prime contractor when the subcontractor fails to pay prevailing wages." Also, where there is no violation of the underlying prevailing wage law, the Court ruled plaintiffs could not maintain unfair business practices or unfair competition claims under the Business and Professions Code.
Liability for prevailing wages likely will continue to be a very hot legal issue for developers and contractors. For years, non-union contractors have been under siege with lawsuits initiated by Unions in an attempt to force recognition through settlement, rather than through organization. One unsettled question is how this opinion will affect California Labor Code section 2810, which prohibits contractors from entering into any contract that it knows or should have known does not include sufficient funds to allow the subcontractor to comply with all applicable employment law provisions.
Our attorneys handle numerous wage & hour cases throughout Northern California. While small, our highly skilled attorneys effectively and efficiently defend class actions and invidual claims for wages, meal & rest periods, overtime, etc. We are highly regarded and routinely considered by some of the nation's and region's largest employers to defend against these claims.
Retaliation: A mixed bag of retaliation between the U.S. Supreme Court and the California Supreme Court
On June 22, 2006, the U.S. Supreme Court issued its opinion in Burlington Northern v. White, changing the rules most federal courts follow when assessing retaliation claims under Title VII of the Civil Rights Act of 1964. Now, under federal law, employers must be careful to avoid any action – whether it takes place in or out of the workplace – that could be considered retaliatory by a “reasonable employee or job applicant.” In Burlington, plaintiff White filed a sexual harassment claim with the Equal Employment Opportunity Commission. Following her complaint, Burlington reassigned her to another position and removed her from her duties as a fork-lift operator. White then filed a second complaint with the EEOC, alleging gender discrimination and retaliation. Burlington suspended her for more than a month without pay for insubordination. Burlington later concluded that no insubordination had taken place and reinstated White with full back-pay.
The Supreme Court rejected the “ultimate employment action” test for retaliation adopted by a number of federal courts, which limited unlawful retaliation to ultimate employment decisions such as termination, demotion or refusal to hire. The Court also ruled that Title VII retaliation is not limited to employer actions that affect the terms and conditions of an employee’s employment. Instead, the Supreme Court held that employees asserting a federal retaliation claim must show that a reasonable employee would find the employer’s actions “materially adverse,” which means it might “dissuade” a “reasonable worker” from engaging in the protected conduct. The Court noted that while failing to ask an employee to join a supervisor for lunch may not rise to retaliation under some circumstances, it might if the supervisor excluded the employee from lunches that would lead to professional advancement. The ruling may result in a sharp increase in federal retaliation claims in California.
While a great deal of discussion and commentary has been offered regarding the U.S. Supreme Court’s recent opinion, little comparison has been done with last year’s California Supreme Court decision in Yanowitz v. L’Oreal USA, Inc. In Yanowitz, the plaintiff refused to obey a supervisor's order to fire an employee who was not sufficiently sexually attractive. The Court held the employee’s refusal was a “protected activity” under California's Fair Employment and Housing Act ("FEHA"), even though the employee never explicitly complained about the supervisor’s order, because the employee “reasonably believed” the supervisor’s directive was discriminatory. Moreover, unlike the United States Supreme Court, the California Supreme Court adopted a narrower standard for defining an "adverse employment action" for purposes of establishing a retaliation claim. The Court adopted the “materiality” test, a standard that requires an employer’s adverse action to materially affect the terms and conditions of employment (a clearly more employer-friendly approach). This includes actions altering the terms and conditions of employment, not just ultimate employment actions such as discharge or demotion. The California Supreme Court in Yanowitz specifically rejected the broader "deterrence" test just adopted by the U.S. Supreme Court in Burlington Northern.
It is rare instance where employment law in California is actually more favorable to employers than corresponding federal law. However, based on the Burlington Northern and Yanowitz opinions, currently it is more difficult for California employees to successfully sue for retaliation under California as opposed to federal law. Regardless of which standard is applied, employers should vigorously train supervisors and managers to comply with their anti-harassment, anti-retaliation and equal opportunity policies, and quickly investigate all claims of discrimination and harassment. In addition, employers should be extremely cautious when dealing with an employee who has complained of unlawful discrimination or harassment, and fiercely monitor for retaliation after a complaint has been made.
Our attorneys routinely defend employers from retaliation claims. Our focus on litigation gives us with the practical experience necessary to provide employers with the best advise and counsel possible when faced with employment law issues.
On June 22, 2006, the U.S. Supreme Court issued its opinion in Burlington Northern v. White, changing the rules most federal courts follow when assessing retaliation claims under Title VII of the Civil Rights Act of 1964. Now, under federal law, employers must be careful to avoid any action – whether it takes place in or out of the workplace – that could be considered retaliatory by a “reasonable employee or job applicant.” In Burlington, plaintiff White filed a sexual harassment claim with the Equal Employment Opportunity Commission. Following her complaint, Burlington reassigned her to another position and removed her from her duties as a fork-lift operator. White then filed a second complaint with the EEOC, alleging gender discrimination and retaliation. Burlington suspended her for more than a month without pay for insubordination. Burlington later concluded that no insubordination had taken place and reinstated White with full back-pay.
The Supreme Court rejected the “ultimate employment action” test for retaliation adopted by a number of federal courts, which limited unlawful retaliation to ultimate employment decisions such as termination, demotion or refusal to hire. The Court also ruled that Title VII retaliation is not limited to employer actions that affect the terms and conditions of an employee’s employment. Instead, the Supreme Court held that employees asserting a federal retaliation claim must show that a reasonable employee would find the employer’s actions “materially adverse,” which means it might “dissuade” a “reasonable worker” from engaging in the protected conduct. The Court noted that while failing to ask an employee to join a supervisor for lunch may not rise to retaliation under some circumstances, it might if the supervisor excluded the employee from lunches that would lead to professional advancement. The ruling may result in a sharp increase in federal retaliation claims in California.
While a great deal of discussion and commentary has been offered regarding the U.S. Supreme Court’s recent opinion, little comparison has been done with last year’s California Supreme Court decision in Yanowitz v. L’Oreal USA, Inc. In Yanowitz, the plaintiff refused to obey a supervisor's order to fire an employee who was not sufficiently sexually attractive. The Court held the employee’s refusal was a “protected activity” under California's Fair Employment and Housing Act ("FEHA"), even though the employee never explicitly complained about the supervisor’s order, because the employee “reasonably believed” the supervisor’s directive was discriminatory. Moreover, unlike the United States Supreme Court, the California Supreme Court adopted a narrower standard for defining an "adverse employment action" for purposes of establishing a retaliation claim. The Court adopted the “materiality” test, a standard that requires an employer’s adverse action to materially affect the terms and conditions of employment (a clearly more employer-friendly approach). This includes actions altering the terms and conditions of employment, not just ultimate employment actions such as discharge or demotion. The California Supreme Court in Yanowitz specifically rejected the broader "deterrence" test just adopted by the U.S. Supreme Court in Burlington Northern.
It is rare instance where employment law in California is actually more favorable to employers than corresponding federal law. However, based on the Burlington Northern and Yanowitz opinions, currently it is more difficult for California employees to successfully sue for retaliation under California as opposed to federal law. Regardless of which standard is applied, employers should vigorously train supervisors and managers to comply with their anti-harassment, anti-retaliation and equal opportunity policies, and quickly investigate all claims of discrimination and harassment. In addition, employers should be extremely cautious when dealing with an employee who has complained of unlawful discrimination or harassment, and fiercely monitor for retaliation after a complaint has been made.
Our attorneys routinely defend employers from retaliation claims. Our focus on litigation gives us with the practical experience necessary to provide employers with the best advise and counsel possible when faced with employment law issues.
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