California Employment Law Update

A handy guide for choosing and using employment practices liability insurance coverage

Thompson Reuters has just published our “handy guide” for choosing and using employment practices liability insurance (“EPLI”).  The article is attached.  There are a number of important things to keep in mind when considering your options and using these insurance policies if and when an employment claim is made or threatened.  Please let one of our employment or insurance lawyers know if we can be of assistance.

Employment Insurance article

“100% Healed From Injury” Policies May Violate the CA Fair Employment and Housing Act

The California Department of Fair Employment and Housing (“DFEH”) recently obtained a settlement on behalf of a custodian for a school district who was fired after an on-the-job injury.  As part of the settlement, the employer agreed to pay $290,000 and offer reinstatement with reasonable accommodations.

During an investigation by the DFEH, the district told the DFEH that it relies on a test of physical capabilities to determine if a person is able to perform custodial duties.  Anyone taking the test must be able to exert “maximal force.”  Because the custodian had a lifting restriction that prevented him from being able to exert “maximal force,” he was not considered eligible to take the test.

DFEH Director Kevin Kish stated: “The testing requirements in this case meant, in practical terms, that the employee had to be 100% healed from an injury before he would be permitted to take a test for a job he was already successfully performing.  That doesn’t make sense.  Policies requiring employees to be ‘100% healed from injury’ in order to work deny employees their right to an individual assessment and violate the FEHA.”

This settlement is a reminder to employers that when an employee seeks an accommodation for his or her disability, the employer must determine whether that employee can perform the duties of the job, with or without an accommodation.  Employers should review their accommodation policies to ensure that such policies do not have the unintended consequence of requiring employees to be fully healed in order to work.

March 2017 California Employment Law Notes

We invite you to review our newly-posted March 2017 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

California Further Limits Use of Criminal Background Information

California’s Fair Employment and Housing Council (“FEHC”) has finalized new regulations further limiting employers’ ability to consider criminal history when making employment decisions. The new FEHC regulations, which are scheduled to take effect on July 1, 2017, largely follow the EEOC’s 2012 Enforcement Guidance.

In addition to the new FEHC regulations and existing California law, which already limits employers’ use of criminal records when making employment decisions, municipal “Ban the Box” ordinances further restrict employers’ use of such information. For example, we previously described Los Angeles’ new Ban the Box Ordinance in our February 8, 2017 post.  Additionally, employers must be mindful of their obligations under the Fair Credit Reporting Act (“FCRA”) when using criminal background reports provided by third party consumer reporting agencies.

Employers should note the following highlights from the FEHC regulations:

First, the regulations expand the list of types of criminal history employers are prohibited from considering to include any non-felony conviction for possession of marijuana if the conviction is more than two years in the past.

Second, before an employer may take adverse action against an applicant based on conviction history, an employer must give the applicant notice of the disqualifying conviction and provide a reasonable opportunity to present evidence that the conviction information is factually inaccurate. This notice is only required when the criminal information is obtained by a source other than the applicant or employee (e.g. through a credit report or internally generated search).  Thus, this notice is different from that required under the FCRA, which requires certain notices only if the employer takes adverse action against an applicant based on information contained in a third-party background check report.

Third, the FEHC regulations prohibit an employer from considering criminal history in employment decisions if doing so will result in an adverse impact on individuals within a protected class (based upon race, national origin, religion, etc.).  The applicant bears the initial burden of proving that an employer’s criminal background screening policy has an adverse impact on a protected class.

Employers should review their employment applications and relevant policies to ensure compliance with not only the new FEHC regulations, but also the FCRA and applicable municipal “Ban the Box” ordinances.


San Jose Passes “Opportunity to Work” Ordinance

San Jose is the third northern California city to enact a scheduling ordinance that further regulates employers’ scheduling and hiring practices.  Following on San Francisco and Emeryville’s lead, San Jose recently passed “The Opportunity to Work Ordinance” (Ordinance No. 2016.1, codified at Chapter 4.101 of the San Jose Municipal Code), which went into effect on February 6, 2017.

The primary aim of the Ordinance is to create more full-time jobs in place of multiple part-time jobs for affected employees by requiring employers to first offer additional hours to existing, part-time employees who, in the employer’s good faith and reasonable judgment, have the relevant skills and experience.  Such hours should be distributed by way of “a transparent and nondiscriminatory process.”  It is only after the employer cannot distribute more hours to qualified and willing part-time employees that it may resort to hiring additional employees or subcontractors, including those hired through staffing or temporary agencies.  However, employers are not required to abide by these procedures if the hours in question would have to be paid at a premium rate (i.e., overtime for more than 8 hours in a day/40 in a week).

San Jose employers also must post a notice informing employees of their rights under the Ordinance and retain various records. Retaliation against employees exercising their rights under the Ordinance is strictly prohibited.

The Ordinance applies to all employers who employ more than 35 employees and who are subject to San Jose’s business tax.  When counting the number of employees, employees should include all persons, including corporate officers and executives, who are directly or indirectly employed, or over whom the employer exercises controls (e.g., with regard to wages, hours, or working conditions).  The employee count also includes all of the business’s employees—even if they are not employed in San Jose—thus subjecting franchises and chain retail stores and restaurants to the new rules.

There are two exceptions in the Ordinance’s application:

  1. Employers that can demonstrate hardship (i.e., that they have, in good faith, taken all reasonable steps to comply but find that complete and immediate compliance is impracticable, impossible, or futile) may be exempt.
  2. Unionized employees may waive the Ordinance provisions and entitlements through collective bargaining.

Employers in San Jose should take immediate attention.  Although fines, fees, and civil penalties (of $50 per employee for each day of violation) will not be assessed for an employer’s first violation, there is no such “first-pass” for the Ordinance’s provision of attorneys’ fees and costs to prevailing aggrieved parties.

This trend regarding local regulation of part-time employee hours is certainly not unique to California, as Seattle passed its own version of a “secure scheduling” ordinance last year and numerous other cities—including Washington D.C., New York, Minneapolis, and Albuquerque—have considered doing the same.

Actors’ Ages to Remain Available Online (At Least for Now)

A federal court has granted IMDb’s request for a preliminary injunction to allow the entertainment website to keep actors’ ages in their online profiles – despite the enactment of a statute in California prohibiting same.

The lawsuit,, Inc. v. Becerra (Case No. 16-cv-06535-VC) was filed in response to the passage of A.B. 1687, which required IMDb.comPro and other commercial online entertainment employment service providers to remove entertainment industry professionals’ birthdates and ages if they requested removal of such information from their profiles.  The law, aimed at preventing age discrimination in Hollywood (and described in greater detail in our September 29, 2016 post), went into effect on January 1, 2017.

In granting the preliminary injunction, Judge Vince Chhabria held that IMDb was likely to succeed in the lawsuit, stating, “It’s difficult to imagine how AB 1687 could not violate the First Amendment.”  Judge Chhabria further held that the government failed to show how the law was “necessary” to prevent age discrimination and that it was “not clear how preventing one mere website from publishing age information could meaningfully combat discrimination at all.”  The State of California will remain enjoined from enforcing A.B. 1687 while v. Becerra is pending.  A case management conference is scheduled for March 21, 2017.

LA’s Ban the Box Ordinance: New Rules and Regulations

As we reported here in December, the City of Los Angeles Fair Chance Initiative for Hiring Ordinance is now effective. The new law, also referred to as the “Ban the Box “ ordinance, restricts employers in the City of Los Angeles from asking job applicants about criminal convictions until after a conditional offer of employment has been made.

This week, the City of Los Angeles released Rules and Regulations to implement the ordinance. Highlights from the Rules and Regulations include:

  • An applicant who submits an application to an employer in Los Angeles is covered by the law regardless of whether the applicant resides outside of Los Angeles when he or she applies for the job.
  • The job application cannot contain any statement that a criminal background check must be passed to be considered for the position.
  • Employers must hold the position open for at least 5 business days after the applicant receives notification of the employer’s intent to withdraw the conditional offer of employment.
  • If an employer relied on oral information to form a determination of Adverse Action, the employer should summarize this information by putting it in writing and maintain it with its employment records. For example, a verbal reference check with a former employer should be documented.

Employers located in the City of Los Angeles should review their employment applications, job advertisements, and relevant employment forms and record retention policies to ensure compliance with both the ordinance and the new rules and regulations.

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