California Employment Law Update

Chamber of Commerce Urges California to Ease Restrictions on Employers

 

The California Chamber of Commerce and nearly 200 other organizations joined in a January 13 letter to the Governor and the leadership of the state Senate and Assembly, urging them to stave off a growing exodus of businesses by loosening the regulatory yoke on California employers.

  • In the letter, the Chamber encouraged that the Governor “take executive action immediately” to relieve small employers of new regulatory compliance obligations under the California Family Rights Act. As we reported here, on January 1, employers with as few as five employees became subject to CFRA’s extensive leave requirements.  The Chamber noted “small employers should be temporarily spared the cost and burden of new compliance with the extensive leave under CFRA while they are coping with the challenges of the pandemic.”
  • Additionally, the Chamber urged the Governor to eliminate certain mandatory wage payments for employees excluded from the workplace, reasoning that such payments are an onerous burden in light of last year’s SB 1159, which provides employees with paid time off under the workers’ compensation system.
  • After shifting its focus from the Governor, the Chamber encouraged the Legislature to allow for increased scheduling flexibility. Noting the realities of telecommuting—where some employees now have the freedom to choose to work extra hours on one day so they can skip a day or finish early on another—the Chamber pointed to existing state laws that may subject employers to penalties and fines for allowing such a flexible work schedule, which is preferred by both the employee and the employer.
  • Then, addressing PAGA (the much maligned Private Attorneys General Act, or as we refer to it, Prettymuch All Goes to the Attorneys), the Chamber noted the lightning-paced changes businesses have adapted to over the last year, including: reductions in force; work from home transitions; implementing COVID sick pay; and a never-ending stream of federal, state, and local safety regulations. Noting employer fears amid a constant threat of employment litigation, the Chamber asked the Legislature to either temporarily suspend PAGA or reform it to reduce the likelihood of abusive lawsuits brought to “victimize businesses” who are already suffering in the wake of COVID-19 [see our reporting here.]”

In Sickness and In Health – Court Rejects Spouse’s COVID Claim Against Employer

Last week, a California federal judge dismissed with leave to amend a claim made against a Nevada company by the spouse of an employee who contracted COVID-19, allegedly at his workplace, and later transmitted the disease to her.  In its order, the court dismissed the spouse’s claims as preempted by “the exclusive remedy provisions of the California workers’ compensation statutes.”

The plaintiff, Mrs. Kuciemba, alleged she contracted COVID-19 after her husband (an employee of Victory Woodworks) moved from one jobsite to another without a quarantine period preceding the transfer. Further, she claimed Victory, “knew or should have known that its workers at the Mountain View jobsite were all potentially exposed to COVID-19.”  Mrs. Kuciemba characterized the disease as similar to asbestos-caused mesothelioma, for which certain non-employee household members have successfully prosecuted similar claims.  To support her argument, Mrs. Kuciemba pointed to Kesner v. Superior Court (2016) 1 Cal. 5th 1132, in which the California Supreme Court held that when it is reasonably foreseeable that workers will act as vectors carrying asbestos from the jobsite to the household, “employers have a duty of care to prevent this means of transmission.” In so arguing, Mrs. Kuciemba claimed she suffered a direct injury and thus general negligence and “public policy concerns” should apply.

Victory, analogizing the mechanism of transmission between COVID-19 and influenza, noted that “over the last century, no employer has ever been held liable to a household member who contracted influenza from an employee who was exposed at work.”  Essentially, it characterized Mrs. Kuciemba’s claim as derivative of her husband’s on-the-job injury, which would be subject to workers’ compensation preemption.  In so arguing, the company pointed to the impracticalities related to keeping asymptomatic and pre-symptomatic essential employees from entering the jobsite.  Further, in contradicting Mrs. Kuciemba’s public policy claim, Victory noted the stark reality of an outcome in plaintiff’s favor: “plaintiffs are asking the employer to do what the global public health system and pharmaceutical industry failed to do: keep COVID-19 from invading the home.”

While the court did not directly address these arguments, its dismissal indicates an early, pragmatic approach to derivative workplace COVID-19 infection claims in California.

California Supreme Court Hands Employers a Mixed Bag on Meal Periods

On Thursday, a unanimous California Supreme Court issued its long-awaited decision in Donohue v. AMN Services, LLC, providing answers to two important questions about meal periods:  (1) whether it is permissible to round meal period punch times, as with work start and stop times; and (2) whether records showing a missed, late, or short meal period raise a presumption of non-compliance on summary judgment/adjudication, as well as other stages of litigation.

The timekeeping system used by the employer in Donohue rounded all employee “punch times” to the nearest 10-minute increment—including those reflecting meal periods.  As a result, for example, if an employee punched out for lunch at 11:02 a.m. (rounded back to 11:00 a.m.) and punched back in at 11:25 a.m. (rounded forward to 11:30 a.m.), the system recorded a 30-minute meal period (even though only 23 minutes had actually elapsed).  When an employee’s rounded meal punches indicated that a meal was missed, shorter than 30 minutes, or late (e.g., commencing after more than five hours), the system provided a drop-down menu by which an employee was asked to indicate either that the missed, late, or short meal period was the result of:  (1) the employee’s own choice; or (2) the press of work.  Only if the employee selected the latter (press of work) would the employer credit the employee with a meal premium of one additional hour of pay at the regular rate of compensation.

While the Supreme Court recognized that time rounding was, in general, permitted under federal law and prior California decisions, it decided not to follow that authority in the case of meals.  Instead, purported “health and safety concerns” that underlie meal period requirements “distinguish the meal period context from the wage calculation context, in which the practice of rounding time punches was developed,” and “even relatively minor infringements on meal periods can cause substantial burdens to the employee.”  In dicta, the Court even took a swipe at prior decisions that had endorsed rounding, in general, noting that, “[a]s technology continues to evolve, the practical advantages of rounding policies may diminish further.”

The Court went on to endorse a concurrence by Justice Werdegar in Brinker Restaurant Corp. v. Superior Court, 53 Cal. 4th 1004 (2012), oft-cited by plaintiffs’ lawyers, in which she suggested that if an employer’s records did not reflect a compliant meal period, it would raise a rebuttable presumption that none was provided.  Notwithstanding this unfortunate move, the majority did provide helpful clarification about how employers could overcome such a presumption:  “by presenting evidence that employees were compensated for noncompliant meal[s] … or that they had in fact been provided compliant meal periods during which they chose to work.”  The Court also reiterated its prior holding from Brinker that an “employer is not liable if … [an] employee chooses to take a short or delayed meal period or no meal period at all,” and affirmed there is no need “to police meals to make sure no work is performed.”

Although Donohue involved dueling summary judgment/adjudication motions, its lessons extend beyond the case’s procedural posture.  In light of Donohue, employers should promptly revisit their meal period rounding practices (if any), and may want to consider this latest utterance from the California Supreme Court to be a “warning shot” that the days of rounding time up or down, in general, may be numbered.  As to the presumption mentioned above, while the Court seemed to like the employee drop-down attestations insofar as they could demonstrate an employee chose to forgo the opportunity for a meal, in Donohue, it found them insufficient to overcome the presumption because they were tainted by the employer’s rounding of meal periods.  Thus, to address inevitable situations when employees fail to take meal periods, employers should consider requiring similar attestations when records reflect untimely, missed, or short meal periods—without any rounding modification.

As with all important wage/hour developments such as this one, employers should consult with counsel as they adapt to the ever-changing landscape.

California Employers May Be Required to Subsidize Backup Childcare

Last Thursday, Assembly Bill 1179 was introduced to require California employers with 1,000 or more to provide “backup ” for children under 14. To be eligible for the benefit, employees who work in California would need to have been employed by the company for at least 30 days. If passed and signed into law, this mandate would go into effect on January 1, 2022 and be the first of its kind in the United States.

The motivation for this bill is that women are leaving the workforce due to the pandemic. Section 1 of the proposed legislation states:

(b) Prior to the pandemic, the average working parent missed eight days a year due to childcare issues. The increased loss of childcare during the pandemic has forced over 2 million women out of the workforce. Economic recovery through decreased unemployment rates will rely on their continued participation or reentry into the labor force.

(c) Inadequate backup childcare is one of the top reasons women drop out of the workforce.

The proposed legislation would require companies to pay for up to 60 hours of “backup childcare” by:

(1) Contracting with a licensed childcare provider and providing direct payments to the licensed provider for the childcare hours by the employee;

(2) Directly paying a qualified backup childcare provider upon receipt of an invoice detailing the number of childcare hours used by the employee; or

(3) Reimbursing an employee for up to 60 hours for backup childcare paid by the employee.

We will keep you updated as this bill progresses.

Uber/Lyft Drivers Win Latest Round in California

The California Supreme Court has denied a petition for writ of mandate filed by the Service Employees International Union (SEIU).  The SEIU, which was hoping to unionize Uber and Lyft drivers in the wake of AB 5, (read more of our AB 5 coverage here, here, and here), argued that voter-approved Proposition 22 (which permits rideshare drivers to remain independent contractors) should be declared unconstitutional because it “limits the legislature’s authority to provide for a complete system of workers compensation” and “usurps the judiciary’s inherent authority to interpret the constitution.” The Supreme Court denied the petition with a brief docket entry, noting the dismissal was “without prejudice” and allowing petitioners leave to refile their claim in a lower court.

In an argument probably best appreciated by the union itself, the SEIU complained that the measure “grossly deceived the voters” because they were not informed certain bargaining rights wouldn’t exist under the new law. Meanwhile, most reliable polling indicates that rideshare drivers themselves supported Proposition 22 by no less than a 4-to-1 margin.

An Uber driver and spokesman for Protect-App Based Drivers and Services released a statement saying, “We’re thankful, but not surprised, that the California Supreme Court has rejected this meritless lawsuit. We’re hopeful this will send a strong signal to special interests to stop trying to undermine the will of voters who overwhelmingly stood with drivers to pass Proposition 22.” Notably, Proposition 22 received 58% of the November vote which had the state’s largest voter turnout since 1952.

Nike “Just Does It” – Retail Employees Will Wear Transparent Masks

Last summer, Nike began requiring its retail employees to wear masks to combat the spread of COVID-19. A few weeks later, Cali Bunn entered one of its San Diego-area stores to purchase some shoes. Ms. Bunn is deaf and, like other deaf and hearing-impaired customers, relies on her ability to read other’s lips to communicate.

Ms. Bunn sued Nike in federal court in California (Bunn v. Nike Inc.), alleging violations of the Americans with Disabilities Act and corresponding California public accommodation laws. Ms. Bunn argued the opaque masks worn by Nike employees caused communication difficulties because they “muffle sound and conceal the wearers’ mouths and facial expressions.”

Nike recently settled the lawsuit, agreeing to provide transparent masks as well as pens and paper to its retail employees so those employees can more easily communicate with deaf and hearing-impaired customers.

Federal Guidance on Mandating Employee COVID-19 Vaccinations

To date, the California Department of Fair Employment and Housing (DFEH) has not issued relevant guidance regarding mandatory COVID-19 vaccination programs. Despite the current lack of California-specific information, on December 16, 2020, the U.S. Equal Employment Opportunity Commission (EEOC) updated its COVID-19-related guidance, “What You Should Know About COVID-19 and the ADA, the Rehabilitation Act, and Other EEO Laws,” to address questions about requiring employees to be vaccinated.

Although the EEOC historically has taken the position that employers should consider encouraging, rather than mandating, vaccines (e.g., the annual flu shot), this updated guidance clarifies that employers are lawfully permitted to require employees to be vaccinated before returning to the office, subject to certain limitations and exceptions.

Without California-specific guidance, employer vaccine mandates could pose liability concerns. Such uncertain liability includes potential workers’ compensation claims (and possibly civil claims) for a mandated COVID-19 vaccine injury or adverse reaction.

The California’s Workers’ Compensation Act (WCA), Cal. Lab. Code 3600, et seq., addresses “conditions of compensability” if an injury is “work-related.” It is an open question, since there is no precedent, what courts and the WCAB will consider in deciding whether a mandated COVID-19 vaccine injury is work-related; however, older California cases addressing employer liability related to vaccinations focus on whether the vaccination was “at the direction of the employer” and “for the employer’s benefit.” (See, e.g., Roberts v. U.S.O. Camp Shows, 91 Cal. App. 2d 884 (1949) and Maher v. Workers’ Comp. Appeals Bd., 33 Cal. 3d 729 (1983)). Further, enterprising plaintiffs’ lawyers will no doubt seek to “slip the bonds” of the WCA in order to avoid the liability limits that are a feature of that statutory scheme. In short, given the lack of official guidance from the DFEH, potential liability for California employers remains unclear.

Further information may be found in our colleagues’ post on Proskauer’s Law and the Workplace blog and podcast that summarized the EEOC’s guidance as well as other considerations.

$10 Million Lawsuit over January 6th Capitol Riot-Related Firing

On January 26, 2021, a computer programmer and coder named Leah Snyder filed a lawsuit against her former employer (Snyder v. Alight Solutions LLC (8:21-cv-00187)), alleging she was wrongfully terminated after she posted photos of herself at the U.S. Capitol on January 6. In her complaint Snyder alleges that her former employer, an Illinois-based based human resources provider, violated California civil rights law by terminating her employment.

Snyder claims “[s]he listened to speeches being made and walked to the Capitol, and then she left. She did not participate in any rioting, she did not observe any rioting, and she did not hear of any injuries to persons or damages to property during her peaceful visit.” Snyder further alleges she was the victim of cyberbullying in the form of comments made in response to selfies she posted of herself at the Capitol and that, after reporting the harassment to her employer, she was terminated for participating in the events in Washington. Snyder claims she did not do anything illegal by joining those marching to the Capitol and that she was wrongfully terminated for political activity.

Seeking economic and other damages of at least $10 million, the complaint contains three causes of action:

  1. Violation of Tom Bane Act (California Civil Code § 52.1, which prohibits threats to interfere with someone’s constitutional rights);
  2. Wrongful Termination of Employment in Violation of Public Policy; and
  3. Breach of Covenant of Good Faith and Fair Dealing.

More particularly, Snyder alleges that she was terminated for her political affiliation and that her former employer’s action violated California Labor Code Section 1101 (forbidding an employer from controlling or directing political activities or affiliations) and Section 1102 (forbidding an employer from coercing or influencing its employees through threat of discharge or loss of employment for failure to comply with a particular line of political action or political activity).

January 2021 California Employment Law Notes

We invite you to review our newly-posted January 2021 California Employment Law Notes, a comprehensive review of the latest and most significant developments in California employment law. The highlights include:

View PDF

White House “Regulatory Freeze” Memo Dooms DOL Independent Contractor Rule

As expected, the White House issued a memorandum to the heads of all executive departments and agencies within the first few hours after President Biden’s inauguration on January 20, requesting that they halt all non-emergency rulemaking and regulatory activity pending review by the new administration. The memo effectively does away with the U.S. Department of Labor (DOL)’s January 7, 2021 Final Rule on independent contractor classification, which would have reduced the number of primary factors the agency would consider when determining whether a worker is an independent contractor or an employee to two “core factors”—the nature and degree of control over the work and the worker’s opportunity for profit or loss based on initiative and/or investment. Biden has promised to work with Congress to establish a federal standard for independent contractor classification modeled on the “ABC test” for all labor, employment, and tax laws.  The ABC test—used as the basis for several states’ laws, such as California’s AB5 legislation—is the most stringent of various tests used to determine worker status.

Read the full post on Proskauer’s Law and the Workplace blog.

LexBlog