California Employment Law Update

We’re #1 Again! California Tops “Judicial Hellhole” List!

The American Tort Reform Foundation has just released its annual report on “Judicial Hellholes.”  The Report claims that in California, the legislature and courts “extend liability at almost every given opportunity,” including fostering “no-injury” litigation in the form of class action and PAGA (Private Attorneys General Act) lawsuits in the workplace. California takes the number one spot for the fourth time in the last seven years.

Excessive employment-related lawsuits and ubiquitous PAGA claims in particular continue to plague both large and small employers in California  — the Los Angeles Times published a piece on this shortly after California was crowned top “Judicial Hellhole.”

Read the full report here.

The Cost of PAGA to Small Businesses (Los Angeles Times op-ed)

A small business owner wrote an op-ed piece for the Los Angeles Times, explaining how the Private Attorneys General Act (PAGA) hurts employees as well as employers – and primarily benefits lawyers. He uses his own experience defending such a case to demonstrate how PAGA is forcing him to operate his business in a way that benefits neither him nor his employees.

Read the full opinion here:

The Electric Scooter Craze: What Can Employers Do to Protect Themselves from Potential Liability?

If you haven’t ridden one yet, it’s likely you’ve had one fly by you on the sidewalk. Electric scooters – or e-scooters – have quickly descended upon most major cities in America. These app-based scooters let a user ride across the city at up to 15 m.p.h. and then discard the scooter wherever the rider happens to disembark. While relatively new, injuries from riding these scooters are already fairly common, and the scooters also have even been involved in some fatal accidents already. With the use of e-scooters on the rise, an employer should be prepared for the potential legal problems they create.

The increasing popularity of these scooters indicates that some employees will, sooner or later, jump on an e-scooter during work hours. Thus, an employer should lose no time in doing the following:

  • Draft new language for the employee handbook relating to e-scooters;
  • Add e-scooters to an existing section of the handbook that regulates employee use of bikes, motorcycles, cars, or other company vehicles; and
  • Consider providing/mandating safety equipment if the business allows employees to ride e-scooters while on the job.

Although an employer should prepare, it’s worth noting that the law isn’t fully developed yet concerning the contours of employer liability relating to employee use of e-scooters. In New York, for example, an employer was held liable for fines that workers incurred when the workers were operating e-bikes on the employer’s behalf. Such liability could result from an employee’s failure to wear proper safety equipment, riding in an unauthorized manner or off-limits area or the city, or failing to obey traffic signals, among other things. In California, these could be costs or expenses attributable to and requiring reimbursement by the employer under Labor Code § 2802.

Beyond fines, an employer could be liable for injury that occurs when an employee is riding an e-scooter. For example, when an employee uses his/her own car during work hours to perform services for the employer, an employer may incur liability. The same could be applied to e-scooters. In general, if an employee uses an e-scooter to come to or from work, the employer generally would not be liable for injuries that occur (the “Going and Coming Rule”). However, if the employee uses the e-scooter during the workday to accomplish tasks for the employer or is on an errand for the employer while commuting to/from work, the employer may be held liable. Thus, the ubiquity of e-scooters may lead to more employees using them to run errands during work hours, which could in turn result in an uptick in employer liability.

E-scooters have already been the target of numerous legal battles, so we expect the law regulating e-scooters to continue to evolve. Employers would be wise to keep an eye on these developments.

***Photo credit to Lime

Consider the True Implications of Waiving Arbitration

Employers: have you thought about the true implications of waiving arbitration? When considering how to end sexual harassment issues in the workplace, prioritizing training and policy review may be a better course. Read more in Anthony Oncidi’s latest column in the Los Angeles Daily Journal:

November 2018 California Employment Law Notes

We invite you to review our newly-posted November 2018 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

California Has a New Governor – Will it Make Much Difference for Employers?

After Jerry Brown’s second set of 8 years in office (1975-83 and 2011-19), employers now look to Governor-Elect Gavin Newsom for what’s in store for them in the Golden State.  (Although Jerry Brown wasn’t a particularly good friend of employers, he often was the only friend they had in Sacramento, vetoing some of the more radical anti-employer measures that the California legislature routinely passed and sent to him for signature.)   A former mayor of San Francisco and state lieutenant governor, Newsom is unlikely to change the course of California’s decidedly pro-employee, pro-union laws and regulations anytime soon.  That said, California employers should keep a watchful eye on the following moving targets: 

The #MeToo Movement and Arbitration

Newsom is an ardent supporter of the #MeToo movement and vows to “strengthen workplace protections such as creating hotlines for victims, transparent, independent, swift investigations, and real consequences for abusers and harassers.” Leading companies like Google, Microsoft, and Uber have recently decided to end mandatory arbitration of employee sexual harassment claims, leaving their employees free to sue them in state or federal court. One can wonder whether this is the sort of transparency that Newsom would embrace as part of his support of the #MeToo movement.

Gov. Brown repeatedly vetoed recently passed bills that prohibited mandatory arbitration in employment agreements on the perfectly reasonable ground that such legislation unquestionably conflicts with and is preempted by federal law. (Gov. Brown’s veto message.) However, it’s anyone’s guess whether Newsom will part ways with Brown and sign such legislation the next time the legislature passes it (i.e., presumably next term).

“The Future of Work”

Newsom dedicates a portion of his website statements about the economy to what he calls “the future of work.Although amorphous, many of his ideas on “the future of work” would significantly impact employers. For example, Newsom highlights wage insurance to those who lose their jobs to automation, portable benefits to transfer between jobs in the gig economy, and an expansion of the earned income tax credit as areas that need to be addressed.

Newsom, whose campaign for governor was largely funded by contributions from labor unions, has, not surprisingly, expressed his commitment to those same unions – especially in the wake of the Supreme Court’s recent opinion in Janus v. AFSCME, which eliminated mandatory union dues for government employees.  California already has taken numerous steps to limit the rights of government employees who decline to join or wish to leave a union.  Newsom presumably will be very receptive to even more union-friendly legislation in California.

With an expansive pro-employee, pro-union majority (which may in fact turn out to be a “supermajority) in both houses of the California legislature, Gov. Newsom is unlikely to provide much relief to employers (even if he wanted to) and in fact he may make things even more challenging once he starts signing legislation that Gov. Brown may have vetoed.

Court Provides Further Clarification of CA’s New Independent Contractor Test

On May 1, we reported about the Dynamex Operations W., Inc. v. Superior Court opinion in which the California Supreme Court adopted a new standard (the “ABC test”) for determining if a worker may properly be classified as an employee or independent contractor.  Last Monday, the California Court of Appeal clarified that the “ABC” test applies only to claims arising under the California wage orders and not to other issues such as determining employee status for purposes of workers’ compensation, wrongful termination, waiting time penalties, overtime, unfair competition and indemnity claims under the Labor Code.  Garcia v. Border Transportation Group.

The appellate court held that there was “no reason to apply the ABC test categorically to every working relationship” and that it was “logical” to apply it only to claims arising under the California wage orders. The panel explained that because the wage orders regulate basic working conditions, they warrant the broadest definition of employment to the widest group of workers.