California Employment Law Update

California Expands Parental Leave Protections

California Gov. Jerry Brown has signed Senate Bill 63 into law, expanding parental leave protections to those individuals who work for employers with at least 20 employees.  Under the new law, which is set to take effect on January 1, 2018, employers with at least 20 employees must allow an employee who has more than 12 months of service with the employer to take up to 12 weeks of parental leave to bond with a new child within one year of the child’s birth, adoption, or foster care placement.  The new law expands the protections afforded under existing law, which had previously applied only to employers with 50 or more employees.

The new law also requires the Department of Fair Employment and Housing to create a parental leave mediation pilot program, which permits an employer to request mediation within 60 days of receipt of a right-to-sue notice and thereby stay any civil action by the employee.  However, an employee may notify the Department in response that he or she has elected not to participate in a mediation and thereby proceed with the civil action.

California Enacts Statewide Law Restricting Inquiries into Applicants’ Salary History

California Governor Jerry Brown has signed into law a statewide salary history inquiry law that will largely restrict employers in the state from seeking and relying upon salary history information from applicants during the hiring process.

The law, which will go into effect on January 1, 2018 and will apply to all private and public sector employers, will prohibit employers from:

  • relying on salary history as a factor in determining whether to offer employment to an applicant or what salary to offer; or
  • seeking, orally or in writing or through an agent, salary history information about an applicant.

The law will also require an employer, upon reasonable request by an applicant, to provide the pay scale for a position.

The law further provides that, if an applicant voluntarily and without prompting discloses salary history information to a prospective employer, that employer may then consider and/or rely on that voluntarily disclosed salary history information in determining the salary for that applicant.  However, the law reiterates that, consistent with the state’s currently existing equal pay law, employers may not rely upon voluntarily disclosed prior salary, by itself, to justify any disparity in compensation.

In passing this law, California joins the ranks of Massachusetts, Oregon and Delaware in enacting statewide salary history inquiry protections (while Illinois vetoed a similar bill in late August).  The new law also comes on the heels of a similar San Francisco ordinance enacted this summer.

Along with San Francisco, New York City and Philadelphia have also passed laws at the local level, while Puerto Rico’s salary history law went into effect in March of this year.

We will continue to report on new developments with regard to this law as they arise.

California Becomes a “Sanctuary State,” Restricts Employer Cooperation With Federal Immigration Authorities

On Thursday, October 5th, California Gov. Jerry Brown signed into law nearly a dozen new immigration-related bills, including AB 450, which prohibits employers from cooperating with federal immigration authorities in the absence of a judicial warrant or court order.  Among other things, the new law:

  • Prohibits employers from voluntarily consenting to an immigration enforcement agent’s entering nonpublic areas of the workplace without a warrant;
  • Prohibits employers from voluntarily consenting to an immigration enforcement agent’s accessing, reviewing or obtaining employment records without a subpoena or court order;
  • Prohibits employers from reverifying the employment eligibility of a current employee at a time or in a manner not required by federal law; and
  • Requires employers to provide notice to current employees of an inspection of I-9 forms and other employment records by an immigration agency within 72 hours of receiving the federal notice of inspection.

Penalties for failure to comply with the new law range from $2,000 to $10,000 per violation.

Gov. Brown signed the controversial new laws over objections from the United States Immigration and Customs Enforcement and the California State Sheriffs’ Association, among other groups.

September 2017 California Employment Law Notes

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

It’s Time to Think About Arbitration Agreements Again Following Recent $15 Million+ Employee Verdicts

Jury panels in the Los Angeles Superior Court (which is often referred to as “The Bank” by the plaintiffs’ bar) have recently delivered multimillion-dollar verdicts to former-employee plaintiffs.  Many employers doing business in California already have insulated themselves from such disasters by adopting comprehensive arbitration regimes, which would require that such cases be heard by a retired judge or employment lawyer rather than a jury of the employee’s (not the employer’s) peers.

In one recent case involving alleged wrongful termination and racial discrimination, the jury awarded the former employee $16.6 million, which is the largest such verdict in California state history.  The verdict consisted of $373,514 in lost wages; $2.5 million in emotional distress damages; and $13.8 million in punitive damages.  Added to this will be another $1 million or so in prevailing-party attorney’s fees that will go to the former employee’s lawyer.  Another Los Angeles jury recently awarded $15 million to a former employee who claimed he was discriminated against on the basis of a disability.  That verdict consisted of $5 million in lost wages and emotional distress damages and $10 million in punitive damages.

The fact that such monster verdicts are stalking the land pushes up the settlement value of all cases — and the risk of not settling means the employer is subjecting itself to funding the winnings of those who play the California litigation lottery.  The best antidote?  Arbitration agreements.  Although arbitration is hardly a panacea and carries with it a number of significant limitations and disadvantages, the time has come for employers to shut down this game by choosing arbitration once and for all.

The top three reasons for adopting an employment arbitration agreement today are:

  1. Arbitrators generally provide reasonable awards that fairly compensate an employee who has actually suffered some form of discrimination, harassment or other wrongful treatment.  Unlike a jury, however, they generally do not get carried away and award gargantuan amounts of money for alleged emotional distress and punitive damages — both of which are basically unlimited under California law.
  2. The mere existence of an arbitration agreement functions as a form of “Wolfsbane” that wards off the most aggressive plaintiffs’ lawyers.  Once they find out their client signed an arbitration agreement, they know they have no chance of ever bamboozling a gullible jury into awarding them millions of dollars and they will usually drop the case or settle it on the cheap.
  3. The arbitration agreement can and should include a class-action waiver provision.  This means that any employee who signs such an agreement agrees not to lead or participate in a class action against the employer.  These provisions are perfectly legal (even in employee-friendly California) and alone justify the adoption of such an agreement.

July 2017 California Employment Law Notes

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

San Francisco to Bar Employers from Seeking Disclosure of Salary History

San Francisco has become the latest jurisdiction to pass a law restricting employers from inquiring about prior salary history during the hiring process.  The ordinance, which will go into effect on July 1, 2018, will restrict employers from: (i) considering or relying on an applicant’s salary history as a factor in determining whether to make an offer of employment or what salary to offer; (ii) inquiring about an applicant’s salary history; (iii) refusing to hire or otherwise retaliating against an applicant based on failure to provide salary history; and (iv) releasing the salary history of a current or former employee to that person’s employer or prospective employer without written authorization from the current or former employee. 

Employers will, however, be able to: (i) consider voluntarily disclosed or authorized salary history in determining salary for an applicant and/or verify the salary history information the applicant has voluntarily disclosed; and (ii) without inquiring about salary history, engage in discussion about the applicant’s expectations with respect to salary, including unvested equity or deferred compensation or bonus that an applicant would lose or forfeit by virtue of leaving current employment. 

Employers will have a one year grace period (i.e., until July 1, 2019) during which San Francisco will issue written warnings and notices to correct but will not penalize employers for violation of the new ordinance. Thereafter, monetary penalties will be issued for violations.

San Francisco employers should review their applicant screening and hiring policies to ensure compliance with the new ordinance.

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