The California Assembly has voted to approve A.B. 1732, which would require all single-occupancy restrooms in any business, public accommodation, or government agency to be branded as “all gender” and ban any single-user bathroom from being designated male- or female-only. The bill also authorizes building inspectors or other local officials responsible for code enforcement to inspect for compliance with this measure. The bill now heads to a California Senate committee for consideration and would go into effect in March 2017 if ultimately approved.
We invite you to review our newly-posted May 2016 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:
- Employee Who Needed To Assist Disabled Son Could Proceed With “Associational Disability Discrimination” Claim;
- Employees Are Entitled To Suitable Seating If The Tasks Being Performed Reasonably Permit Seating;
- Supreme Court Affirms $2.9 Million Class Action Judgment Based On Expert’s Study Of Time Spent On Donning And Doffing Activities;
- Employer Did Not Violate ADA When It Failed To Return Employee To Full-Time Position Following Medical Leave;
- Employee Could Proceed With Misclassification Claim, Though Wrongful Termination Claim Was Properly Rejected;
- EEOC Sufficiently Conciliated Class Claims Before Bringing Suit, And Employee Stated Hostile Environment Claim;
- Employee Who Dismissed Claims Upon Receipt Of Settlement Can Recover Costs As Prevailing Party; and
- Employee’s Qui Tam Fraud Claims Should Not Have Been Dismissed.
In yet another recent development on the hot topic of paid family leave, the San Francisco Board of Supervisors has unanimously approved local legislation requiring businesses to provide employees with up to 6 weeks of fully paid parental leave for the birth or adoption of a child. With this ordinance, San Francisco becomes the first city in the United States to offer parental leave at 100 percent of an employee’s salary.
The new ordinance intends to “supplement” the current California Paid Family Leave program, which entitles eligible employees to receive leave paid at up to 55% of their salary for up to 6 weeks to care for newborns or newly adopted children. The state program is funded entirely by worker contributions and administered through a state insurance fund. The San Francisco ordinance will require employers to privately fund the remaining 45% of an employee’s salary during the 6 week period.
The ordinance will go into effect on January 1, 2017 for businesses with 50 or more employees, and will gradually expand protection to businesses with 35 or more employees beginning July 2017, and finally for businesses with 20 or more employees beginning July 2018. Employees who work 8 hours or more per week and spend at least 40 percent of their work week within San Francisco boundaries will be eligible for the leave. New employees will become eligible after they have worked for a company for 180 days.
San Francisco’s new legislation follows just on the heels of New York’s enactment of a statewide paid family leave law, which will entitle eligible employees to up to 12 weeks of partially paid leave that can be used for the birth, adoption, or foster placement of a child, as well as to care for a seriously ill family member, or to deal with exigencies arising from a family member being called into active military service. The New York law will be funded entirely through employee contributions to a state insurance program, similar to the current state program in place in California.
We will be following up with additional details on this new ordinance as more guidance is made available for employers.
On April 4, 2016, Governor Brown signed Senate Bill 3, which will increase California’s minimum wage annually, reaching $15 per hour for employers with at least 26 employees by January 1, 2022. This bill enacts the highest statewide minimum wage in the nation, on par with New York, which enacted a bill mandating a $15 minimum wage last week.
Governor Brown opposed the bill just a few months ago, stating that it “would put a lot of poor people out of work.” However, during a press conference touting the signing of the bill on April 4, Governor Brown stated that, while the minimum wage “may not make sense” economically, it makes sense “morally and socially and politically.”
For employers with at least 26 employees, California’s minimum wage will increase on the following schedule:
- January 1, 2017 through December 31, 2017: $10.50 per hour.
- January 1, 2018 through December 31, 2018: $11 per hour.
- January 1, 2019 through December 31, 2019: $12 per hour.
- January 1, 2020 through December 31, 2020: $13 per hour.
- January 1, 2021 through December 31, 2021: $14 per hour.
- Beginning January 1, 2022: $15 per hour.
Employers with 25 or fewer employees will follow a minimum wage schedule that lags behind the above schedule by one year. Accordingly, for these employers, the minimum wage will be $10.50 per hour starting on January 1, 2018, $11 per hour on January 1, 2019, and continuing on this schedule until reaching $15 per hour on January 1, 2023.
Beginning on August 1, 2022, and recurring on August 1 of each year thereafter, California’s Director of Finance will increase the minimum wage for the following year based on statistics from the United States Bureau of Labor Statistics.
The Governor has the ability to suspend the above minimum wage increases if certain economic factors indicate that the state is in recession.
Notably, California’s salary basis test for exempt employees is directly tied to the state’s minimum wage. Exempt employees must earn at least twice the state’s minimum wage for full-time employment, meaning that under the current $10 per hour minimum wage, exempt employees must earn an annual salary of $41,600 ($10 per hour x 2 x 40 hours per week x 52 weeks per year). Under a $15 per hour minimum wage, the minimum annual salary jumps to $62,400 ($15 per hour x 2 x 40 hours per week x 52 weeks per year).
Employers are encouraged to start assessing their workforce and compensation policies to prepare to adjust compensation for, at a minimum, nonexempt employees who earn less than $15 per hour and exempt employees who earn less than $62,400 per year.
New California anti-discrimination, anti-harassment, and pregnancy disability leave regulations go into effect on April 1, 2016. The substantive law regarding these issues has not changed. However, the new amendments enumerate detailed requirements regarding anti-harassment policies and investigations, and institute additional notice and recordkeeping requirements.
Anti-Discrimination and Harassment Regulations
The new anti-discrimination and harassment regulations clarify an employer’s duty to take reasonable steps to prevent discriminatory and harassing conduct. Specifically, the amended regulations require employers to create written policies that meet the requirements detailed below.
Policies and Investigations
Beginning April 1, 2016, all California employers must develop a harassment, discrimination, and retaliation prevention policy that:
- is written;
- lists all current protected categories covered under the Fair Employment and Housing Act (“FEHA”)—so it is no longer permissible to list only some protected categories and have a catch-all “or any other characteristic protected by law”;
- states that the law prohibits coworkers, third parties, supervisors and managers from engaging in conduct prohibited by the FEHA;
- creates a complaint process that ensures: confidentiality (to the extent possible under the circumstances); a timely response; impartial, fair, thorough, and timely investigation by qualified personnel; appropriate due process, documentation and tracking; that appropriate conclusions will be made and remedial actions will be taken, and timely closure;
- provides a complaint mechanism that allows employees the option of complaining to an individual or entity other than his or her immediate supervisor;
- instructs supervisors to report any complaints of misconduct to a designated company representative; and
- makes clear that employees shall not be exposed to retaliation as a result of lodging a complaint or participating in a workplace investigation.
Employers must also make their employees aware of their written anti-discrimination and harassment policy by doing one or more of the following: distributing copies of the policy with an acknowledgment form for employees to sign; posting the policy in the workplace; discussing the policies upon hire, or via another method that ensures employees receive and understand the policy.
Further, employers must translate the policy into every language that is spoken by at least 10 percent of its workforce.
Recordkeeping For Sexual Harassment Training
Employers are now required to keep documentation of sexual harassment training for a minimum of two years, including but not limited to, the names of the supervisory employees trained, the date of the training, the sign-in sheet, a copy of all certificates of attendance or completion issued, a copy of all written or recorded materials that comprise the training, and the name of the training provider.
Impact of New Regulations on Employers
Employers should update their anti-discrimination and harassment policies to ensure compliance with the new regulations. Further, Employers should review their investigation procedures and institute any changes necessary to comply with the requirements described above. Finally, employers should update their record retention policies to meet the new regulation’s recordkeeping requirements.
Pregnancy Disability Leave Regulations
Also effective April 1, 2016, employers must comply with new policy and notice requirements related to Pregnancy Disability Leave (“PDL”).
The California Department of Fair Employment and Housing has created a new poster, entitled “Your Rights and Obligations as a Pregnant Employee,” which replaces “Notice A,” a document previously used for providing PDL notice. Employers can meet the new regulation’s posting requirements by posting this notice in a conspicuous place on its premises. While we recommend that employers post this notice in the workplace as soon as possible, the DFEH’s website states that employers will not be penalized if they do not post the new notice immediately upon April 1.
Further, when an employee provides an employer with notice of pregnancy or the need for leave or reasonable accommodation related to pregnancy, employers should provide the employee with the new “Your Rights and Obligations as a Pregnant Employee” notice, instead of the notice previously used by the employer.
Finally, employers are required to either (1) provide employees with notice of their PDL rights in the next version of their employee handbook or (2) send employees a notice of such rights on an annual basis. We recommend including the notice of PDL rights in the employee handbook in order to avoid the administrative burden of distributing an additional annual notice.
Impact of New Regulations on Employers
As discussed above, we recommend posting the updated “Your Rights and Obligations as a Pregnant Employee” notice in the workplace as soon as possible. Also, employers should ensure that they replace their old PDL notices with the “Your Rights and Obligations as a Pregnant Employee” document, and distribute this notice to relevant employees. Additionally, when employers create the next edition of their employee handbook, we recommend ensuring that the new version contains a section notifying employees of their PDL rights that complies with the new regulations.
As always, Proskauer attorneys are available to answer any questions you may have and assist in updating handbooks and polices in order to comply with these new regulations.
We invite you to review our newly-posted March 2016 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:
- Nuclear Plant Maintenance Manager’s Whistleblower Claim Was Properly Dismissed;
- Employer Was Entitled To Obtain Reimbursement Of Short-Term Employee’s Training Costs;
- Department Of Labor’s Rule Extending Tip Pool Restrictions Is Valid;
- Employer Properly Computed Overtime On Flat-Sum Attendance Bonuses;
- Class Action Was Properly Dismissed For Failure To Prosecute; and
- Unaccepted Settlement Offer Does Not Moot Putative Class Action.
We invite you to review our newly-posted January 2016 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:
- Court Reverses $1 Million Discrimination Verdict Entered Against LA Fire Department;
- Former HR Manager Could Proceed With FLSA Retaliation Claim;
- Employee Could Proceed With Wrongful Termination Claim Based Upon Work-Related Injury;
- Trade Secret Misappropriation Claims Should Not Have Been Dismissed;
- Residential Care Facility Could Require Its Employees To Take On-Duty Meals; and
- Agricultural Workers’ Putative Class Action Was Properly Denied Certification.
We invite you to review our newly-posted November 2015 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:
Newly Enacted California Statutes
- Paid Sick Leave Law Is Amended;
- E-Verify Use Is Restricted;
- Grocery Workers Protections Clarified;
- Labor Commissioner’s Enforcement Capabilities Expanded;
- PAGA Cure Period Provided;
- Retaliation Against Family Members Of Whistleblowers Prohibited;
- Piece-Rate Compensation Requirements Changed;
- Meal Period Waiver Rules For Health Care Employees Clarified;
- Gender-Based “Fair Pay Act” Enacted;
- School Activity And Sick Leave Protections Expanded;
- Labor Commissioner Enforcement Authority Broadened, Liability For Managing Agents Expanded; and
- New Protected Classes Added To Unruh Civil Rights Act
New Case Law
- EEOC Is Entitled To More Information From Employer In Connection With Sex Discrimination Case;
- LAPD Requirement That Training Costs Be Reimbursed Violates Labor Code;
- Court Affirms $118,000 Verdict In Favor Of Fired Employee Who Reported A Crime To The Police;
- Terminated Actress Was Not Required To Exhaust Administrative Remedies Before Suing For Retaliation;
- Employees Who Allegedly Breached Employer’s Computer Use Policies Did Not Violate CFAA;
- Trial Court Improperly Failed To Certify Class Action For Unpaid Overtime;
- Employer And Employee Were Each Prevailing Parties On Different Claims;
- Court Affirms Dismissal Of PAGA Claims For Inadequate Notice But Orders Certification Of Class Action; and
- Firefighters Are Not Entitled To Overtime For Time Spent Taking Gear To Temporary Duty Stations.
On October 23, 2015, the U.S. District Court for the Northern District of California largely denied a motion to dismiss a whistleblower retaliation claim brought by a company’s former general counsel, ruling that: (i) the Sarbanes-Oxley Act (“SOX”) and Dodd-Frank anti-retaliation provisions provide for individual liability against board members; and (ii) the Dodd-Frank anti-retaliation provision protects internal whistleblowers (i.e., a whistleblower who did not complain to the SEC). Wadler v. Bio-Rad Laboratories, Inc., 2015 U.S. Dist. LEXIS 144468 (N.D. Cal. Oct. 23, 2015).
Plaintiff Sanford Wadler, the former general counsel of Defendant Bio-Rad Laboratories, Inc. (the “Company”), filed suit against the Company and its individual board members after his employment was terminated in June 2013. Plaintiff asserted six claims against the Company, including whistleblower retaliation claims under SOX, Dodd-Frank and California Labor Code Section 1102.5. Notably, Wadler did not allege that he had ever reported any securities law violations to the SEC. Accordingly, the Company and the individual board members moved to dismiss his whistleblower claims on the grounds that he does not qualify as a protected “whistleblower” under SOX or Dodd-Frank.
The Court’s Ruling
The district court ruled that:
- Although the language of SOX is ambiguous, the legislative intent and context of SOX suggest that board members may be held individually liable as agents;
- Congress intended Dodd-Frank to allow for liability, which was at least as extensive as SOX, so therefore, board members may be held individually liable for retaliating against whistleblowers;
- Plaintiff sufficiently pled his whistleblower claim under CA Labor Code Section 1102.5 because Plaintiff’s allegations supported an inference that Plaintiff refused to participate in a cover-up of allegedly unlawful activity; and
- Internal whistleblowers are protected from retaliation under Dodd-Frank. In this regard, the court relied on the reasoning in an earlier Northern District of California case, Somers v. Digital Realty Trust, to conclude that “Dodd-Frank is ambiguous on the question of whether its anti-retaliation provisions apply to an individual who has provided information regarding possible illegal activity internally but has not provided such information to the SEC.” The court gave deference to the SEC’s expansive interpretation of Dodd-Frank.
The court only dismissed, as untimely, Plaintiff’s SOX whistleblower claim as to the individual board members to whom Plaintiff did not give adequate fair notice in his administrative complaint. Plaintiff only gave adequate fair notice, for SOX purposes, to the CEO. Therefore, the court only allowed the SOX individual liability whistleblower retaliation claim to proceed against the Company’s CEO.
This case continues the trend of whistleblower complaints being filed by in-house counsel and underscores the risks of individual liability under SOX and Dodd-Frank—risks that extend to board members as well.
The latest legislative session has just ended, and, true to form, the California Legislature has added more than a dozen new laws affecting employers doing business in the nation’s largest state. These statutes are in addition to the other six new laws that we reported on in September:
- Signed legislation:
- Sick Leave: Accrual And Limitations Language Clarified (AB 304)
- Employers Prohibited From Using E-Verify For Purposes Not Specified Under Federal Law (AB 622)
- Modifications To AB 359 Which Gives Preferential Treatment To Grocery Workers Affected By A Change In Control (AB 897)
- Labor Commissioner’s Enforcement Capabilities Expanded To Local Jurisdictions (AB 970)
- PAGA Amended To Allow Employers To Cure Certain Wage Statement Violations (AB 1506)
- No Retaliation Against Family Members of Employee Whistleblowers; New Exclusion From Joint Liability Rules (AB 1509)
- Piece-Rate Compensation Becomes More Costly And Difficult To Administer (AB 1513)
- Special Meal Period Waiver Rules For Health Care Employees Clarified (SB 327)
- New Gender-Based “Fair Pay Act” Enacted (SB 358)
- Wage Garnishment Restrictions Modified (SB 501)
- School Activity Leave and Sick Leave Protections Expanded (SB 579)
- Expanded Authority Granted To Labor Commissioner For Judgment Enforcement (SB 588)
- New Protected Classes Added To Unruh Civil Rights Act (SB 600)
- Vetoed Legislation:
- Governor Vetoes AB 465, Saves Mandatory Arbitration Agreements
- Governor Vetoes AB 676 (Employment Discrimination And A Person’s Unemployment Status)
- Governor Vetoes AB 1017 (Prohibition On Seeking Salary Information About An Applicant For Employment)
- Governor Vetoes SB 406 (Expansion Of CFRA: 12 Weeks Of Unpaid Leave To Extend To Kin Care)
Sick Leave: Accrual And Limitations Language Clarified
Governor Brown signed AB 304 into law on July 13, 2015. AB 304, which is effective immediately, clarifies certain ambiguities relating to sick leave accrual and limitations in the California’s Healthy Workplaces, Healthy Families Act of 2014 (AB 1522).
Employers Prohibited From Using E-Verify For Purposes Not Specified Under Federal Law
Governor Brown signed AB 622 into law on October 9, 2015. AB 622 expands the definition of an “unlawful employment practice” to prohibit an employer or any other person or entity from using the E-Verify system at a time or in a manner not required by a specified federal law or not authorized by a federal agency memorandum of understanding to check the employment authorization status of an existing employee or an applicant who has not received an offer of employment, except as required by federal law or as a condition of receiving federal funds. AB 622 also requires an employer that uses the E-Verify system to provide to the affected employee any notification issued by the Social Security Administration or the United States Department of Homeland Security containing information specific to the employee’s E-Verify case or any tentative nonconfirmation notice.
Modifications To AB 359 Which Gives Preferential Treatment To Grocery Workers Affected By A Change In Control
As described in our earlier blog post, AB 359 provides that certain grocery workers must be given preferential treatment following a “change in control.” Governor Brown, in his signing message approving AB 359, stated that the bill is not clear how the provisions apply if an incumbent grocery employer has ceased operations. Effective January 1, 2016, AB 897 amends AB 359 to provide that “grocery establishment” does not include an establishment that has ceased operations for six months or more.
Labor Commissioner’s Enforcement Capabilities Expanded To Local Jurisdictions
Governor Brown signed AB 970 into law on October 11, 2015. AB 970 authorizes the Labor Commissioner to investigate and enforce local overtime and minimum wage laws and to issue citations and penalties for violations, except when the local entity has already cited the employer for the same violation. AB 970 also authorizes the Labor Commissioner to issue citations and penalties to employers who violate the expense reimbursement provisions of Labor Code Section 2802.
PAGA Amended To Allow Employers To Cure Certain Wage Statement Violations
Governor Brown signed AB 1506 into law on October 2, 2015. AB 1506, effective immediately, amends PAGA to provide an employer with the right to cure a violation of the requirement that an employer provide its employees with the inclusive dates of the pay period and the name and address of the employer before an employee may bring a civil action under PAGA. An employer can utilize this cure provision only once during each 12-month period.
AB 1506 provides a cure period to an employer who has not received notice of such a wage statement violation. The question remains as to how AB1506 impacts pending PAGA wage statement violation cases.
No Retaliation Against Family Members of Employee Whistleblowers; New Exclusion From Joint Liability Rules
Governor Brown signed AB 1509, effective January 1, 2016, into law on October 11, 2015. AB 1509 prohibits employers from retaliating against an employee who is a family member of an employee who has or is perceived to have engaged in protected conduct or made a protected complaint (such as whistleblowing). Additionally, AB 1509 excludes certain entities, such as certain household goods carriers, from the imposition of joint liability on client employers for all workers supplied by a labor contractor.
Piece-Rate Compensation Becomes More Costly And Difficult To Administer
Governor Brown signed AB 1513 into law on October 10, 2015. AB 1513 requires employers to pay piece-rate employees for rest and recovery periods and “other nonproductive time” at or above specified minimum hourly rates, separately from any piece-rate compensation. AB 1513 defines “other nonproductive time” as time under the employer’s control, exclusive of rest and recovery periods, that is not directly related to the activity being compensated on a piece-rate basis.
Additionally, employers must specify the following on a piece-rate employee’s itemized wage statement: the total hours of compensable rest and recovery periods, the rate of compensation paid for those periods, and the gross wages paid for those periods during the pay period.
AB 1513 makes it virtually impossible to employ piece-rate employees without being vulnerable to wage and hour class action litigation. Employers may wish to devise new business models to address this issue.
Special Meal Period Waiver Rules For Health Care Employees Clarified
Governor Brown signed SB 327 into law on October 5, 2015. SB 327 clarifies that special meal period waiver rules for employees in the health care industry remain in force, despite the uncertainty caused by the court of appeal decision in Gerard v. Orange Coast Mem. Med. Ctr. (2015).
New Gender-Based “Fair Pay Act” Enacted
Governor Brown signed SB 358, the California Fair Pay Act, into law on October 6, 2015. SB 358 seeks to eliminate the gender wage gap by amending Section 1197.5 of the Labor Code (“Section 1197.5”), relating to private employment. Such amendments will become effective on January 1, 2016. Employers should be aware that, as representative actions under PAGA do not require the plaintiffs to obtain class certification, violations of Section 1197.5, as amended, may also result in PAGA penalties. The material amendments to Section 1197.5 are summarized below:
Broader Prohibition on Gender Wage Differentials
Currently, Section 1197.5 prohibits an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work. SB 358 revises this prohibition, instead prohibiting an employer from paying an employee at wage rates less than the rates paid to employees of the opposite sex for “substantially similar work.” “Substantially similar work” is determined by analyzing a composite of skill, effort, and responsibility, while considering whether the work is being performed under similar working conditions. SB 358 does not require such “substantially similar work” to be “in the same establishment” of the employer as previously required by Section 1197.5. This is bound to be the cause of much litigation.
Employer Required to Demonstrate Exceptions
Section 1197.5 automatically exempted certain gender wage differentials related to payments based on a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than sex. SB 358 amends Section 1197.5 to require that an employer must affirmatively demonstrate that: (i) a wage differential is based on a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than sex; (ii) each factor relied upon is applied reasonably; and (iii) these factors account for the entire wage differential.
Anti-Retaliation Protections Introduced
SB 358 added a provision to Section 1197.5 that prohibits an employer from discharging, discriminating or retaliating against an employee by reason of any action taken by the employee to invoke or assist in any manner the enforcement of this legislation. This new provision authorizes an employee to disclose the employee’s own wages, discuss the wages of others, inquire about another employee’s wages, or aid or encourage other employees to exercise their rights under this legislation.
If an employee is discharged, discriminated or retaliated against in the terms and conditions of his or her employment because the employee engaged in any such protected conduct, such employee may recover, in a civil action, reinstatement and reimbursement for lost wages and work benefits caused by the acts of the employer, including interest thereon, as well as appropriate equitable relief.
Increased Recordkeeping Duration
SB 358 also increases the duration of recordkeeping requirements of wages, wage rates, job classifications, and other terms and conditions of employment from 2 years to 3 years.
Wage Garnishment Restrictions Modified
Governor Brown signed SB 501, effective July 1, 2016, into law on October 11, 2015. SB 501 reduces the prohibited amount of an employee’s weekly earnings subject to levy under an earnings withholding order from exceeding the lesser of (i) 25% of the employee’s weekly earnings or (ii) 50% of the amount by which the employee’s earnings for the week exceed 40 times the minimum wage.
School Activity Leave and Sick Leave Protections Expanded
Governor Brown signed SB 579 into law on October 11, 2015. SB 579 provides for additional circumstances under which employees may take school activities leave. Because of SB 579, California school activities leave now includes the addressing of a child care provider emergency, a school emergency, finding, enrolling, and reenrolling a child in a school or with a child care provider. The pool of eligible employees is expanded by SB 579 to include employees who are stepparents, foster parents or stand in loco parentis to a child.
SB 579 also requires employers to permit employees to use sick leave for the purposes specified in the Healthy Workplaces, Healthy Families Act of 2014 and prohibits an employer from denying or retaliating against such employee for using sick leave for such purposes.
Expanded Authority Granted To Labor Commissioner For Judgment Enforcement
Governor Brown signed SB 588 into law on October 11, 2015. SB 588 expands the Labor Commissioner’s authority with regard to the enforcement of judgments. For example, SB 588 authorizes the Labor Commissioner to issue a lien on an employer’s property for amounts owed to an employee, such as unpaid wages, and other compensation, penalties, and interest.
New Protected Classes Added To Unruh Civil Rights Act
Governor Brown signed SB 600 into law on September 8, 2015. SB 600 expands the protections of the Unruh Civil Rights Act by prohibiting discrimination by business establishments based on citizenship, primary language, or immigration status. Other than what is currently required by law, the bill does not extend so far as to require services or documents to be provided in a language other than English.
Governor Vetoes AB 465, Saves Mandatory Arbitration Agreements
On October 11, 2015, Governor Brown vetoed AB 465, the “Increased Unnecessary Litigation Costs” bill referenced previously in this blog. AB 465 would have precluded mandatory pre-dispute employment arbitration agreements, currently used by many California employers.
In his veto message, Governor Brown referred to AB 465 as “far-reaching,” noting that if arbitration abuses exist, “they should be specified and solved by targeted legislation, not a blanket prohibition.” Furthermore, Governor Brown added that such a blanket ban has been construed in other states as violating the Federal Arbitration Act. Because the Supreme Court is considering two California cases pertaining to FAA preemption of state arbitration policies, Governor Brown noted that he would prefer to see the outcome of those cases prior to enacting a law as broad as AB 465.
Many employers view a “best practice” as encouraging (but not mandating) new employees to sign arbitration agreements and also encouraging (but not mandating) current employees to sign arbitration agreements when rolling out a new arbitration program. This is so because, even though this bill was vetoed, many state court judges view “mandatory” arbitration agreements as contracts of adhesion and unconscionable, despite appellate law to the contrary.
Governor Vetoes AB 676 (Employment Discrimination And A Person’s Unemployment Status)
On October 10, 2015, Governor Brown vetoed AB 676, a bill which would have prohibited an employer from discriminating against job applicants based on the applicant’s status as unemployed. Governor Brown noted in his veto message that AB 676, like the bill he vetoed last year, does not “provide a proper or even effective path to get unemployed people back to work.”
Governor Vetoes AB 1017 (Prohibition On Seeking Salary Information About An Applicant For Employment)
On October 11, 2015, Governor Brown vetoed AB 1017, a bill which would have prohibited an employer from seeking salary information from an applicant for employment. Governor Brown stated in his veto message that unlike SB 358, AB 1017 would “prohibit employers from obtaining relevant information with little evidence that this would assure equitable wages.”
Governor Vetoes SB 406 (Expansion Of CFRA: 12 Weeks Of Unpaid Leave To Extend To Kin Care)
On October 11, 2015, Governor Brown vetoed SB 406, a bill would have allowed a qualified employee to take up to 12 weeks of unpaid leave under the California Family Rights Act (“CFRA”) to care for a seriously ill family member. Governor Brown, in his veto message, noted that SB 406 creates a disparity between CFRA and the Federal Medical Leave Act which could require an employer to provide up to 24 weeks of family leave in a 12 month period. Governor Brown would be open to legislation that does not provide such a loophole.