California Employment Law Update : Labor and Employment Lawyers & Attorneys : Proskauer Rose Law Firm : Wage & Hour Laws, Disability, Workplace Safety

On April 18, 2012, a California Assembly panel advanced a bill that would exclude overtime hours from the fixed salary of a nonexempt employee, notwithstanding an “explicit mutual wage agreement” to the contrary. Assemblyman Tom Ammiano (http://asmdc.org/members/a13/) drafted the bill, A.B. 2103 (text available at http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_2101-2150/ab_2103_bill_20120410_amended_asm_v97.html), in response to a February 2011 California Court of Appeal decision that held that a fixed salary could cover both regular time and overtime (over eight hours per day or 40 hours per week). See Arechiga v. Dolores Press, Inc., 192 Cal. App. 4th 567 (2011). The analysis by the Assembly Committee on Labor and Employment, which has reviewed and approved the bill specifically declared the Legislature’s intent to overturn Arechiga. (The bill analysis is available at http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_2101-2150/ab_2103_cfa_20120416_140625_asm_comm.html.)

The bill analysis described Arechiga:

In the Arechiga case, a janitor and his employer agreed that payment of a fixed salary of $880 a week would provide compensation for 66 hours of work each week. The Court of Appeal held that this method of payment comported with California overtime law, and that no additional overtime compensation was owed. The Court rejected the employee’s contention that existing Labor Code Section 515(d) prohibits any sort of agreement that would allow a fixed salary to serve as a non-exempt employee’s compensation for anything more than a 40 hour workweek.

The bill must get through more readings in the state Assembly and time in Assembly committees, and ultimately the California Senate, before it becomes law.

• Email This
• Print
• Trackbacks

A federal appeals court has barred the NLRB's ability to require employers to post the employee rights poster while litigation over the legality of the rule continues.

A Federal District Court in South Carolina ruled that the NLRB lacked authority to issue the rule. (See www.laborrelationsupdate.com/nlrb/handing-employers-a-significant-victory-federal-district-court-strikes-down-nlrb-rights-poster-reqiu/.) This occurred after another Federal Court in the District of Columbia held that the rule was valid, but the enforcement mechanism was not. The injunction came in the DC litigation.

Given all of the uncertainty, the DC Circuit Court of Appeals issued a Grant of Injunction Pending Appeal (www.laborrelationsupdate.com/Grant%20of%20Injunction%20Pending%20Appeal.pdf) which effectively acts to stay the requirement pending resolution of the litigation. The Court explained its reasoning as follows:

We note that the Board postponed operation of the rule during the pendency of the district court proceedings in order to give the district court an opportunity to consider the legal merits before the rule took effect. That postponement is in some tension with the Board's current argument that the rule should take effect during the pendency of the court's proceedings before this court has an opportunity to similarly consider the legal merits. We note also that the district court's severability analysis left the posting requirement in place but invalidated the primary enforcement mechanisms for violations of the requirement. The Board has indicated that it may cross-appeal that aspect of the district court's decision. The uncertainty about enforcement counsels further in favor of temporarily preserving the status quo while this court resolves all of the issues on the merits.

So, for the next several months at least, employers are not required to comply with the NLRB's posting requirement. We will keep monitoring the situation and will keep you informed here of new developments.

• Email This
• Print
• Trackbacks

On April 10, 2012, the Ninth Circuit filed its opinion in United States v. Nosal, holding that a former employee cannot be held criminally liable under federal law for receiving confidential company data and information from his former coworkers in violation of company policy. United States v. Nosal, No. 10-10038, 2012 BL 89201 (9th Cir. Apr. 10, 2012), available at http://articles.law360.s3.amazonaws.com/0328000/328700/10-10038.pdf. The court held that it is not a federal crime under the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030, for an employee to violate an employer’s prohibition against using work computers for nonbusiness purposes, or for a user to violate the terms of a website in the way most users probably do on a regular basis.

In this case, Nosal left his employer and then convinced some of his former coworkers to join him in starting a competing business. These coworkers, who were still working for the employer at the time, accessed confidential company information and sent it to Nosal, flouting the employer’s policy. The government charged Nosal criminally on various grounds, “including trade secret theft, mail fraud, conspiracy and violations of the CFAA.” Id. at 3859. The Ninth Circuit held that the CFAA-based charges had to be dismissed because the coworkers did have authorization to access the confidential information that they accessed—though those employees exceeded their authority in accessing the information for purposes of competing with their employer. The government was still free to pursue the non-CFAA counts of the indictment (which included mail fraud and theft of trade secrets). Id. at 3873.

The court said that the CFAA should be interpreted narrowly and that it criminalizes unauthorized access to computerized information (“hacking,” see http://definitions.uslegal.com/c/computer-hacking/ (last accessed Apr. 13, 2012)), but not unauthorized use when the user legitimately has access (as employees have access to their employer’s information). The Ninth Circuit explained that when Congress enacted the CFAA, it was seeking to criminalize hacking, not all misappropriation of computerized information.

Although not raised by the facts of the case, the court was also worried about unintentional violations of website policies, since these policies are frequently both surprisingly stringent and largely unread. The court explained, for example, that “[u]nder the government’s proposed [broad] interpretation of the CFAA, posting for sale an item prohibited by Craigslist’s policy, or describing yourself [on a dating website] as ‘tall, dark and handsome,’ when you’re actually short and homely, will earn you a handsome orange jumpsuit.” Id. at 3869. Instead, the court went with the narrower, “computer hacking” reading.

Chief Judge Kozinski’s majority opinion noted that the decision created a split in the circuits, as it was contrary to earlier decisions from the Fifth, Seventh and Eleventh Circuits. Id. at 3870-71. This increases the likelihood that the United States Supreme Court will take up the issue of the proper interpretation of the CFAA.
 

• Email This
• Print
• Trackbacks

This morning, the California Supreme Court issued its long awaited opinion in Brinker Restaurant Corp. v. Superior Court. Taking up two crucial issues that have spawned dozens of class action suits across the state, the Court answered the questions: (1) must an employer merely provide a meal break to employees or must it ensure that its employees actually take such breaks, and (2) when during the workday must meal and rest breaks be taken and how many must be provided?

With respect to the first issue of what “providing the employee with a meal period” means, the Court concluded that “an employer’s obligation is to relieve its employee of all duty, with the employee thereafter at liberty to use the meal period for whatever purpose he or she desired, but the employer need not ensure that no work is done.”

• Email This
• Print
• Trackbacks

Many employers have a policy that allows employees to bring dogs to work, either regularly or on occasion. Studies indicate that having pets around helps to lower stress levels, and also encourages more social behavior both among pet owners and their coworkers. Yale Law School, for example, makes a therapy dog available for 30-minute borrows during some periods each semester. See Monty the Therapy Dog, Yale Law School Web site, library.law.yale.edu/image/monty-therapy-dog (last visited Apr. 5, 2012); Timothy Williams, For Law Students With Everything, Dog Therapy for Stress, N.Y. TIMES (Mar. 21, 2011), http://www.nytimes.com/2011/03/22/education/22dog.html. Bringing a pet to work may lower the owner’s levels of the stress hormone cortisol. Pets may also encourage communication between coworkers as they bond over common pet ownership or when those without pets at work ask pet owners for some time with the pet. See Eryn Brown, Bringing your dog to work can ease stress, study finds, L.A. TIMES (March 30, 2012), http://www.latimes.com/health/la-he-pets-at-work-stress-20120331,0,6213318.story.

While there appear to be benefits to policies permitting pet presence, employers should keep a few things in mind in developing and implementing them, including:

• The policy should make it clear that the employer retains discretion regarding time, place, and frequency of pet visits, and also regarding specific pets.
• The policy should note that some employees may have pet-related conditions that qualify as disabling, like phobias or allergies. There should be a supervisor or human relations mechanism for reporting these concerns which should provide reporting employees with help and confidentiality.
• Employers should consider liability issues—there are various formats that can be considered for publishing the policy and a waiver, and employers will want to think about what works best for them. One issue, for example, is whether a waiver will be signed only by pet-owning employees, or by all employees.
• The policy should address facilities issues.
• The policy should address office areas that are off-limits to pets.
• Employers may want to address issues of providing pets with food and water, and the related use of company resources.

• Email This
• Print
• Trackbacks

On March 29, 2012, the Equal Employment Opportunity Commission (“EEOC”) issued its final rule to amend its Age Discrimination in Employment Act (“ADEA”) regulations concerning disparate-impact claims and the reasonable factors other than age (“RFOA”) defense (available at www.federalregister.gov/articles/2012/03/30/2012-5896/disparate-impact-and-reasonable-factors-other-than-age-under-the-age-discrimination-in-employment#p-6).

The EEOC initially issued proposed regulations in response to Smith v. City of Jackson, 544 U.S. 228 (2005), in which the Supreme Court held that the appropriate test for determining the lawfulness of a practice that disproportionately affects older individuals is the RFOA test, rather than the business-necessity test. After revisions based on comments on two sets of proposed rules, the EEOC’s rule is now final. The rule states that “[a] reasonable factor other than age is a non-age factor that is objectively reasonable when viewed from the position of a prudent employer mindful of its responsibilities under the ADEA under like circumstances.”

The regulations offer a non-exhaustive list of factors that are relevant to the establishment of a RFOA defense. The regulations also note that the presence of one or more of the enumerated factors does not automatically establish the defense, nor does their absence preclude the defense. The listed factors are:

(i) The extent to which the factor is related to the employer’s stated business purpose;

(ii) The extent to which the employer defined the factor accurately and applied the factor fairly and accurately, including the extent to which managers and supervisors were given guidance or training about how to apply the factor and avoid discrimination;

(iii) The extent to which the employer limited supervisors’ discretion to assess employees subjectively, particularly where the criteria that the supervisors were asked to evaluate are known to be subject to negative age-based stereotypes;

(iv) The extent to which the employer assessed the adverse impact of its employment practice on older workers; and

(v) The degree of the harm to individuals within the protected age group, in terms of both the extent of injury and the numbers of persons adversely affected, and the extent to which the employer took steps to reduce the harm, in light of the burden of undertaking such steps.

• Email This
• Print
• Trackbacks

On March 28, 2012, a California Assembly committee considered a bill that would expand the scope of California’s Family Rights Act (CFRA). These proposed expansions to CFRA could potentially increase the amount of unpaid leave time taken by employees in California and would almost certainly add to the challenges already faced by California employers seeking to comply with complex state and federal leave laws while ensuring adequate staffing. Currently, CFRA requires any employer with 50 or more employees to allow employees who have worked at least 1,250 hours over the last year to take up to 12 weeks of protected leave over a 12-month period for their own serious medical condition, for the birth or placement of a child, or to care for the serious medical condition of a child, spouse or parent (which includes non-parents acting in loco parentis).

A.B. 2039, introduced by Sandre Swanson, D-Alameda, would extend CFRA leave rights to those caring for adult children, parents-in-law, grandparents and siblings. While proponents of the bill say it will prevent employees from having to choose between their work and the well-being of their family members, others have highlighted the significant additional costs the bill would impose on employers already stretched thin by a weakened economy. In their application, CFRA and similar statutes can disrupt business operations and force employers to find temporary (and frequently costly) staffing solutions for employees on protected leaves of absence. The California Chamber of Commerce notes that the provision, if passed, would discourage small employers from growing to 50 employees in order to avoid triggering the CFRA requirements. The bill would also cover leave that is already provided for under current law, as a grandparent or step-parent who stands in loco parentis to a child can already take protected leave to care for that child, and vice versa.

Stay tuned to Proskauer’s California Employment Law Update for future developments on this bill and other issues concerning employee leave.

• Email This
• Print
• Trackbacks

Creative Artists Agency (CAA) and representatives of a class of television writers today announced the settlement of a case alleging age discrimination in the representation of television writers.

The case was the last of 23 separate class actions that were filed a decade ago by the writers against the major television networks, production studios, and talent agencies. The other 22 cases settled over the past six years for a combined amount of $74.5 million. The announcement of today’s news – wherein CAA has agreed to make a $150,000 donation and provide limited consulting services to a non-profit entity that assists older television writers – was made jointly by CAA and counsel for the 115 named plaintiffs and the settlement class. The settlement is subject to final approval by the California Superior Court in and for the County of Los Angeles.

• Email This
• Print
• Trackbacks

We invite you to review our newly-posted March 2012 California Employment Law Notes – a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

• Teacher/Minister's Disability Discrimination Claim Is Barred By The First Amendment 
• Community College Employee Is Entitled To New Trial On Whistleblower Claims
• LAPD Officer's $2.1 Million Jury Award For Retaliation Is Reversed
• Army Corps Of Engineers Employee Could Proceed With Age Discrimination Claim
• PAGA Judgment Is Mostly Affirmed In Employee's Favor
• Employer Was Deprived Of Due Process By Trial Court's Erroneous Use Of Representative Sampling
• California Law Should Have Been Applied To Determine If Drivers Were Employees Or Independent Contractors
• Jury Awards Record $168 Million to Employee in Workplace Harassment Suit

• Email This
• Print
• Trackbacks

Duran v. U.S. Bank Nat’l Ass’n, No. A125557, 2012 WL 366590 (Feb. 6, 2012)

In a decision destined to have significant statewide ramifications, the California Court of Appeal for the First District reversed a trial court’s certification of a wage-hour class and determination of liability, concluding that the trial court had failed to follow “established statistical procedures” in adopting the trial management plan under which class-wide liability was determined by the testimony of only a relative handful of the class members.

Four current and former U.S. Bank Business Banking Officers (BBO) filed suit on behalf of themselves and all current and former BBOs within the relevant period, alleging that they had been misclassified as exempt outside sales people and therefore illegally deprived of overtime pay. After certifying the class, the trial court, over U.S. Bank’s strenuous objections, adopted a trial management plan in which a random sample of 20 (out of 260) class members would testify as representatives of the class, and the court would use this testimony to determine class-wide liability. After bench trials, the court awarded the class members $15 million in unpaid overtime and prejudgment interest, as well as $18 million in attorney’s fees.

• Email This
• Print
• Trackbacks

A federal court jury on Wednesday awarded a record $168 million to a physician’s assistant who complained of multiple instances of sexual harassment by her supervisors in the cardiovascular surgery department at Sacramento’s Mercy General Hospital. The verdict is believed to be the largest ever awarded to a single plaintiff in an employment case. The plaintiff, Ani Chopourian, complained that she was sexually harassed on multiple occasions during her employment. Among other things, she alleged that one surgeon called her a "stupid chick" in the operating room, said she did surgery "like a girl," disparaged her Armenian heritage by asking if she had joined Al Qaeda, and referred to patients as "pieces of sh*t." Another surgeon allegedly stabbed her with a needle and broke the ribs of an anesthetized heart patient in a fit of rage, and yet another surgeon greeted the plaintiff each morning by saying "I’m horny" and slapping her on the bottom.

• Email This
• Print
• Trackbacks

Ruiz v. Affinity Logistics Corp., 2012 WL 388171 (9th Cir. 2012)

Fernando Ruiz and similarly situated drivers filed a class action against Affinity alleging violations of the Fair Labor Standards Act and California law for failure to pay overtime, failure to pay wages, improper charges for workers' compensation insurance and unfair business practices. To work for Affinity, the drivers had to enter into an "Independent Truckman's Agreement and Equipment Lease Agreement" with Affinity, which stated that the parties were entering into an independent contractor relationship and that Georgia law applied to any disputes. The district court applied Georgia law and ruled in favor of Affinity, but the Ninth Circuit vacated the judgment and remanded the case after concluding that the parties' choice of Georgia law was unenforceable and that California (not Georgia) law applied. On remand, the district court was ordered to apply California law in order to determine whether the drivers are employees or independent contractors.

• Email This
• Print
• Trackbacks

Duran v. U.S. Bank Nat'l Ass'n, 2012 WL 366590 (Cal. Ct. App. 2012)

U.S. Bank ("USB") appealed a $15 million judgment that was entered against it following a bifurcated bench trial. The plaintiffs are 260 current and former business banking officers who claimed they were misclassified by USB as outside sales personnel exempt from overtime pay. The Court of Appeal agreed with USB that the trial management plan prevented it from defending against the individual claims of over 90 percent of the class because the plan erroneously relied on a representative sampling of 21 of the 260 class members. Citing the Supreme Court's opinion in Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011), the Court stated that "While Wal-Mart is not dispositive of our case, we agree with the reasoning that underlies the court's view that representative sampling may not be used to prevent employers from asserting individualized affirmative defenses in cases where they are entitled to do so." See also Muldrow v. Surrex Solutions Corp., 202 Cal. App. 4th 1232 (2012) (trial court properly determined that recruiters were exempt commissioned employees).

• Email This
• Print
• Trackbacks

Thurman v. Bayshore Transit Mgmt., Inc., 2012 WL 604037 (Cal. Ct. App. 2012)

Leander Thurman sued Bayshore for alleged violations of the Private Attorneys General Act of 2004 ("PAGA") and the Unfair Competition Law and, following a bench trial, a judgment was entered imposing civil penalties, including unpaid wages, against Bayshore in the total amount of $358,588 and awarding Thurman restitution in the amount of $28,605. Both sides appealed, and the Court of Appeal generally affirmed the judgment except it reversed the trial court's award for missed meal periods after July 2003 because Thurman's complaint contained judicial admissions that defendants had provided meal periods as required since that date. The Court of Appeal affirmed the trial court's orders denying a continuance of the trial; denying Thurman's motion to certify the case as a class action; denying PAGA penalties under a wage order (as opposed to a statute); reducing defendants' civil penalties by 30 percent because they had attempted to comply with the law; awarding underpaid wages as part of a civil penalty; and permitting PAGA penalties for missed rest periods. See also Bridgeford v. Pacific Health Corp., 202 Cal. App. 4th 1034 (2012) (unnamed putative members of a class that was never certified are not bound by collateral estoppel, and PAGA claims should not have been dismissed); Pickett v. Superior Court, 2012 WL 556314 (Cal. Ct. App. 2012) (two related PAGA cases were not "one action" for purposes of a Cal. Code Civ. Proc. § 170.6 peremptory challenge to the judge).

• Email This
• Print
• Trackbacks