The Labor and Employment Law Blog

Employment Seminar: The Hottest Wage and Hour Issues Facing Employers Today

Ramona Carrillo — Mon, 14 May 2012 12:13:03 -0800

Download: 5-22-12 EDD Broch FINAL Verif.pdf (191.15 kB)

The Sacramento Employer Advisory Council in partnership with the Employment Development Department present the half-day seminar: "The Hottest Wage and Hour Issues Facing Employers Today."

Wage and Hour Issues

Wage and hour issues continue to plague even the most savvy employers. Navigating through a multitude of often conflicting legal requirements is very tricky, and can lead to an unanticipated financial liability for your organization.

In this half-day seminar, a panel of leading experts, including Labor & Employment attorney Chuck Post, will discuss the latest legal developments in the area of wage and hour law, including:

Meal and rest periods
Overtime exemptions
Handling a claim before the Labor Commissioner

***HRCI Credits Pending***

Who Should Attend:

Business Owners
Employee Benefits Managers/Staff
Financial Officers
Human Resource Managers/Staff
Managers/Supervisors

Tuesday, May 22, 2012

7:30 a.m. to 12:15 p.m
Sacramento State Alumni Center
6000 J Street
Sacramento, CA 95819

To register, please download the flyer above and fax the registration to 916-993-3170 or visit www.caec.com.

Listen Up! Beth West to speak on 105.5 FM on Tuesday, May 15th at 8 a.m.

Ramona Carrillo — Mon, 14 May 2012 09:53:34 -0800

Start Your Day Off Right...
Tune your radio to 105.5 KSAC FM on Tuesday May 15 at 8:00 am for an Important Discussion about Wage & Hour Developments in California

Tune in to Sacramento's Money 105.5 FM, on Tuesday May 15th at 8 a.m. and join Weintraub labor & employment attorney and SEAC Board Chair, Beth West, and SEAC Board member and radio host, Tom Bone, as they discuss recent wage & hour developments that California employers MUST know in order to stay out of trouble.

Beth and Tom's discussion will be a brief summary of the more extensive information employers can obtain at SEAC's upcoming Half Day Spring Seminar on Tuesday, May 22, 2012 at Sac State's Alumni Center. This CAN'T MISS event for California employers will feature a panel of expert employment attorneys and a Sr. Deputy Labor Commissioner who will give employers some of the "inside scoop" directly from the Labor Commissioner's Office.

We hope you can tune in at Money 105.5 FM or Online at: www.smallbiztalkradio.com

For more info and to sign up for the May 22nd seminar, click here

Is Compliance with an Attendance Policy an Essential Function of the Job? The Ninth Circuit says "Yes!"

Ramona Carrillo — Wed, 09 May 2012 10:40:13 -0800

By: Chelcey E. Lieber

Attendance at work seems like an obvious requirement to keep a job, right? The unfortunate answer often given by lawyers to that question is, “it depends.” In the employee-friendly state of California, permitting telecommuting or exemptions to an attendance policy may be a reasonable accommodation if a person has a disability. However, recently, the Ninth Circuit Court of Appeals confirmed that predictable attendance can be an essential function of certain jobs; in this case, the job of a neo-natal intensive care unit (“NICU”) nurse.

In Samper v. Providence St. Vincent Medical Center (9th Cir. 10-35811 4/11/12), Monica Samper was a part-time NICU nurse who sought an accommodation from her employer which would have exempted her from Providence’s attendance policy. Providence’s attendance policy quite generously permitted five unplanned absences of an unlimited duration during a rolling twelve-month period for full-time employees (“Policy”). In addition, absences related to family medical leave, jury duty, and bereavement leave were not counted under the Policy.

Although Samper was a part-time employee, Samper regularly exceeded the number of unplanned absences for full-time employees throughout her employment. Since at least 2005, Samper’s attendance problems were due to her fibromyalgia, a condition that limits her sleep and causes her chronic pain. Due to her disability, Providence provided multiple accommodations to Samper to assist her. In 2002, Samper was placed on work plans to manage her continued absences. However, her attendance problems continued. In 2005, Providence agreed to allow Samper to call in when she was having a bad day and move her shift to another day, and she did not have to find a replacement for her missed shift. This flexibility, however, yielded no results. In 2006, Providence met with Samper again and agreed to yet another accommodation – Samper’s two shifts-per-week would not be scheduled on consecutive days. Again, Samper’s attendance did not improve and she received another verbal warning. Samper then requested a complete exemption from the Policy, which was not granted. In 2008, Providence scheduled another meeting to discuss Samper’s attendance, but Samper was … wait for it … characteristically absent. After Samper essentially broke the last straw on the camel’s back, her employment was terminated for her repeated attendance problems.

Of course, like any good terminated employee, Samper filed suit alleging, among other things, violation of the ADA due to failure to accommodate. The district court granted summary judgment in favor of Providence, reasoning that Samper was unable to adhere to Providence’s Policy, and, therefore, she was not qualified for her position. The district court also held that exempting Samper from the Policy was unreasonable. The Ninth Circuit Court of Appeals affirmed this decision stating that “[t]he common-sense notion that on-site regular attendance is an essential job function could hardly be more illustrative than in the context of a neo-natal nurse.” Further, Providence provided evidence to meet its burden of proof, including demonstrating “attendance” and “punctuality” as listed “standards of performance” in the written job description, and providing a declaration from Samper’s supervisor attesting to the problems unscheduled absences cause for patient care. Thus, it was not only commons-sense, but evidence from Providence, which led the Court to hold that Samper’s regular, predictable presence to perform specialized, life-saving work in a hospital context was an essential function of her job and that Samper’s accommodation that would allow her to miss work whenever she felt she needed to, and apparently for as long as she felt she needed to, was not reasonable, and could, quite literally, be fatal.

The Ninth’s Circuit’s ruling is a nice reminder that even in our high-tech world where telecommuting is possible for many employees, for some jobs, a person’s actual presence in the workplace is essential. For example, some jobs require employees to work as part of a team, interact with customers or clients, or work with equipment on-site. However, the usual caveat exists that this is not a free pass to require strict adherence to attendance policies and terminate employees whenever there is a violation. Employers still must be aware that exemptions to attendance policies may be a reasonable accommodation required under the ADA depending on the job at hand.

UPCOMING SEMINAR: Protecting Trade Secrets - How to Manage Employee Use of Proprietary Information

Ramona Carrillo — Mon, 07 May 2012 09:15:56 -0800

Thursday, May 17, 2012
9:00 a.m. - Registration and Breakfast
9:30 a.m. - 11:30 a.m. - Program
400 Capitol Mall, 11th Floor, Sacramento, CA

Can You Keep a Secret?

From trade secrets like product recipes and algorithms to confidential details about financing, customers and costs, all businesses have information that could be devastating if it were to fall into a competitor’s hands.

By attending this free seminar presented by our intellectual property experts, you will discover the ways employers must designate and guard proprietary information to ensure legal protection of this most critical asset.

Things You Will Learn

• Steps you can take to protect confidential information
• How to draft and enforce confidentiality agreements
• What “noncompetition protection” is and whether it is available to your business
• What to do when a competitor obtains your protected information
• What policies you must have
• What “venue provisions” are and why they are more important than ever

RSVP TO:

Ramona Carrillo
Email: rcarrillo@weintraub.com
Telephone: (916) 558-6046

Closing The Gap Left By Brinker RE Meal-And-Rest-Period Class Actions

Ramona Carrillo — Fri, 27 Apr 2012 09:29:06 -0800

By: Brendan J. Begley

The California Court of Appeal this week provided a shield to employers against attacks left open by the state Supreme Court’s momentous decision earlier this month concerning meal and rest periods. The appellate court in Kinecta Alternative Financial Solutions Inc. v. Superior Court (Malone), No. B235491, decided that a trial court in Los Angeles should have dismissed class-action allegations in a meal-and-rest-period lawsuit.

In so doing, the Court of Appeal also relieved the employer from its obligation to produce confidential contact information of other employees who allegedly were not provided meal or rest periods. The appellate court reached those conclusions because the lead plaintiff and her employer had entered an enforceable arbitration agreement that did not contemplate class arbitration.

Of course, employers in the Golden State were relieved on April 12, 2012, when California’s highest court handed down its opinion in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), No. S166350. That case confirmed that employers are not required to ensure their employees take legally mandated breaks; instead, employers only must provide such breaks to their workers. However, in that decision, the Supreme Court did not negate the ability of employees to file class-action lawsuits alleging meal-and-rest-period violations.

The Brinker decision is momentous because it is much easier for employers to show that they provided meal or rest periods than it is to prove that they ensured their workers actually took such breaks. Nonetheless, defending against any class action can be extremely costly and risky, even when an employer has strong evidence that it provided breaks. Avoiding class actions altogether is much more economical.

Accordingly, while the Supreme Court’s decision in Brinker generated much more fanfare, the Court of Appeal’s opinion in Kinecta may be of greater value to employers. Using an enforceable arbitration agreement to negate a class action at the outset can be a lot cheaper than defending a class action regardless of whether the employer has favorable evidence.

With that said, arbitration agreements may not be suitable for every employer. And when such agreements are desirable, care must be taken to ensure that their terms are enforceable. Thus, prudent employers who wish to explore implementing or updating arbitration agreements to reduce their exposure to meal-and-rest-period class actions should consult with legal counsel in light of the Kinecta decision.

CASE ALERT: California Supreme Court Hands Down Brinker Decision

Ramona Carrillo — Thu, 12 Apr 2012 12:57:12 -0800

By: Charles L. Post and James Kachmar

As many readers of this Blog know, we’ve been awaiting the California Supreme Court to issue its decision in the Brinker case. This morning it did so. As our attorneys continue to analyze the decision involving issues of employee rest periods and meal breaks, we will be publishing several blog updates in the coming days discussing the impact of the decision on California employers.

In the meantime, we wanted to give you three brief takeaways from today’s decision:

• Meal Period: The Court held that when an employee is entitled to a meal break, an employer’s obligation is to relieve the employee of all work duties during that time but that the employer does not have an obligation to ensure that the employee does no work during the meal period. However, as Justice Werdegar points out in her concurring opinion, the burden remains on the employer to prove that an employee was provided with a meal break. Practically speaking employers will want to have documents and practices in place that demonstrate: (1) a policy of relieving employees of all duty obligations during the meal period; (2) a policy prohibiting any supervisor from encouraging or coercing an employee from working during or through a meal period; and (3) to train supervisors on this standard. Employers may also wish to adopt a policy by which employees should report any meal period denial.

• Rest Period Timing: The Brinker plaintiffs argued that an employer was required to provide at least one rest period before any meal period. Plaintiffs wanted to prevent employers from requiring employees to take an “early lunch”, i.e. requiring a meal break at the beginning of an employee’s shift. The Court rejected plaintiffs’ argument and held that there was no requirement regarding the timing of meal periods vs. rest periods.

• Uniform Policies and Class Actions: The Brinker employee-plaintiffs were subgrouped into three classes for certification: (1) those alleging rest break violations; (2) those alleging meal break violations; and (3) those alleging “off the clock work” violations. The Court held that the first group (rest breaks) should be class certified; the third group (“off the clock”) should not be class certified and that the lower court should reanalyze whether to certify the second group (meal breaks) in light of the Court’s meal break ruling described above. The Court’s ruling suggests that when employees are covered by a uniform policy of the employer, it is more likely that class certification will be granted. Given that there was no uniform policy regarding “off the clock work,” the Court held that it was improper to certify this class of employees since each case of “off the clock work” would have to be decided on a case-by-case basis.

Please follow this Blog for further updates regarding this landmark decision.

BREAKING NEWS .... FROM THE CALIFORNIA SUPREME COURT

Ramona Carrillo — Wed, 11 Apr 2012 09:31:55 -0800

By: Lizbeth V. West, Esq.

The California Supreme Court just announced this morning that it will issue its decision in the Brinker v. Superior Court case at 10:00 a.m. tomorrow, April 12, 2012.

For all of our clients and guests who will be joining us at our Sacramento office tomorrow morning for our Wage & Hour seminar (from 9 a.m. – noon), we will of course have the decision hot off the presses to discuss and review with you.

IT WILL BE EXCITING FOR US ALL TO LEARN TOGETHER WHAT THE COURT HAS DECIDED!

Employers - Have You Checked Your Documents Lately?

Ramona Carrillo — Tue, 03 Apr 2012 07:06:28 -0800

By: James Kachmar

As you know, documentation is essential to performing even routine HR functions. You have potential employees fill out numerous pre-hire documents. You have employees sign employment agreements and other documents when hired. During the course of employment, you have employees sign additional documents, such as acknowledgments regarding your employee handbook, change in employment status documents, etc. But have you sat down recently to review whether all of the documents you are having employees sign are consistent? The recent case of Grey v. American Management Services demonstrates why you should.

In the Grey case, the employer, AMS, had Grey complete a pre-hire application packet that included an Issue Resolution Agreement (“IRA”). The IRA provided that all disputes related to Grey’s future employment with AMS would be subject to arbitration. However, when Grey was actually hired by AMS, he was asked to sign an employment contract that stated that only disputes arising out of a breach of the employment contract would be subject to arbitration. That employment contract also contained what’s called an “integration” clause that provided: “This agreement is the entire agreement between the parties in connection with employee’s employment with [AMS] and supersedes all prior and contemporaneous discussions and understandings.”

Grey later sued AMS for a variety of claims and claimed that he was subject to harassment based on his sexual orientation. AMS moved the Court to compel arbitration pursuant to the IRA he signed. The Court ordered the case to arbitration. At arbitration, AMS successfully defended against Grey’s claims and not only had the trial court confirm the arbitration award, but also award costs to AMS for having to defend against Grey’s claims.

Grey appealed the decision and argued that the trial court erred in ordering the case to arbitration. The appellate court agreed. Why? Because of the inconsistency in the arbitration provisions in the employment contract that Grey signed at the time of hire and the IRA he signed during the pre-hire application process.

The Court ruled that, under California law, “the terms of a final integrated contract `may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement’.” The Court found that the employment agreement that Grey signed at the time of hire contained an “integration” clause that meant it was intended to be the “final” contract regarding Grey’s employment and superseded all prior agreements, including the IRA. While the IRA contained an arbitration provision that was broader (requiring the arbitration of any dispute relating to Grey’s employment); the employment contract was much narrower requiring arbitration only of breach of the agreement itself (and not statutory claims such as unlawful harassment). Because the employment agreement superseded the IRA, the Court held that it was improper to rule to order Grey to arbitrate his harassment claims. Therefore, the appellate court vacated the arbitration award and ordered that Grey be allowed to present his claims in state court.

Had the employer in the Grey case simply reviewed the various employment documents it had employees sign to ensure consistency, it may well have avoided the outcome of having won at arbitration but later losing on appeal.

To avoid this potential outcome, all employers should periodically review any documents they have employees sign, such as employment agreements, employee handbook acknowledgments, dispute resolution agreements and other policies. Not only should they ensure that these documents are updated to address any new laws, they should also be reviewed to ensure that they remain consistent with one another over time.

Just InTime For St. Patrick's Day: New ADA Bar Accessibility Requirements Went Into Effect Thursday

Ramona Carrillo — Fri, 16 Mar 2012 09:06:42 -0800

By: Alden J. Parker

What do you think of when you think about St. Patrick’s Day? Corn Beef, Cabbage, Green Beer, John Wayne’s greatest movie “The Quiet Man”, new governmental regulations for bars and restaurants? WHAT!?!

Just in time for one of the busiest days of the year for bars and restaurants, new Americans with Disabilities Act requirements went into effect Thursday. The new requirements require bar countertops to have an accessible section available for disabled patrons. If done before Thursday, restaurants were able to substitute accessible tables instead of lowering a section of the bar.

The substitute tables would have had to meet specific criteria and be located in the same area as the bar. The substitute tables must have a top height of 28 inches to 34 inches and knee space 27 inches high by 30 inches wide and 19 inches deep. A table with a pedestal will not meet these requirements.

If you did not have the substitute table before Thursday, a section of the bar must be lowered to comply with the ADA.

The requirements for foodservice counters and bars are:

Where food or drink is served at counters exceeding 34 inches (865mm) in height for consumption by customers seated on stools or standing at the counter, a portion of the main counter, which is 60 inches (1525 mm) in length minimum, shall be provided in compliance with 34 inches maximum counter height and 19 inches clear depth, or service shall be available at accessible tables within the same area.

Bars and restaurants should review their bar areas immediately to make sure they had a substitute table by Thursday. Otherwise, they will need to work quickly to ensure a lowered bar area exists before the first chorus of Galloway Bay gets sung tomorrow.

Court Invalidates Portions of Recent NLRB Posting Rule

Ramona Carrillo — Wed, 07 Mar 2012 09:30:47 -0800

By: Chelcey E. Lieber

On March 2, 2012, United States District Court Judge Amy Berman Jackson invalidated portions of the National Labor Relations Board’s recent “Notification of Employee Rights” rule, which, as previously discussed in our posts, requires private employers to post a notice to employees explaining their rights under the National Labor Relations Act (the “NLRA”) by April 30, 2012.

In the recent ruling http://www.btlaborrelations.com/files/Uploads/Documents/Misc%20Blog%20Attachments/NAM%20v%20%20NLRB-Opinion-March%202012.pdf, the court upheld the Board’s authority to require that the notice be posted. Judge Jackson held that the dissemination of information to employees about their rights under the NLRA “is well within [the Board’s] bailiwick.” Further, Judge Jackson noted “the Board is not attempting to regulate entities or individuals other than those that Congress expressly authorized it to regulate[.]”

However, the court invalidated two portions of the rule which impose strict penalties. Specifically, Judge Jackson held the Board exceeded their authority by implementing the provision that: (1) deems a failure to post to be an unfair labor practice; and (2) tolls the six-month statute of limitations for filing unfair labor practice actions against employers who have failed to post.

While Judge Jackson ruled that “the Board cannot make a blanket advance determination that a failure to post will always constitute an unfair labor practice,” Judge Jackson also noted that nothing prohibits the Board from finding on a case-by-case basis that a failure to post constitutes an unfair labor practice.

Even though two portions of the “Notification of Employee Rights” rule have been invalidated, this case will likely be appealed, and until the appeal is decided, the posting provision remains in effect. In addition, the Board still has the authority to determine on a case-by-case basis if a failure to post the notice is an unfair labor practice. For now, employers should be finalizing preparations to ensure the “Notification of Employee Rights” is posted, physically and electronically, by April 30th.

The Real Story Behind the $167 Million Verdict

Ramona Carrillo — Thu, 01 Mar 2012 15:48:00 -0800

By: Brendan J. Begley

Making national headlines today is the news of a physician’s assistant who obtained an astronomical $167 million jury verdict against her employer in a Sacramento federal court. Going largely unreported, however, is information about the case (Ani Chopourian v. Catholic Healthcare West) that should be noted by employers in the healthcare industry.

While media outlets accurately have depicted the case as a sexual-harassment lawsuit, the plaintiff also alleged violations of section 1278.5 of California’s Health and Safety Code. The legislature enacted the strong medicine in that anti-retaliation statute to “encourage patients, nurses, members of the medical staff, and other health care workers to notify government entities of suspected unsafe patient care and conditions.”

The colossal award in the Sacramento case most likely was spurred by the jury’s belief that the employer violated this healthcare law. Indeed, while many jurors could be offended by an employer who does not take steps to prevent or stop sexual harassment against healthy employees, such jurors assuredly would be outraged by the idea that an employer punished a healthcare worker for reporting flaws in the delivery of medical care to sick and suffering patients. Either way, employers in the healthcare field should be aware that this law has a lot more teeth – some might say, “more fangs” – than other employment laws.

The statute protects patients and healthcare workers (including members of the medical staff) who present “a grievance, complaint, or report to the facility, to an entity or agency responsible for accrediting or evaluating the facility, or the medical staff of the facility, or to any other governmental entity.” The law also protects such persons who have “initiated, participated, or cooperated in an investigation or administrative proceeding related to, the quality of care, services, or conditions at the facility that is carried out by an entity or agency responsible for accrediting or evaluating the facility or its medical staff, or governmental entity.” Such complaints or participation/cooperation presumably would concern perceived violations of the myriad of regulations that pertain to the healthcare industry.

In forbidding such reprisals, section 1278.5 creates very stern presumptions against healthcare employers. For example, it imposes a “rebuttable presumption” that the employer unlawfully retaliated “against an employee . . . if responsible staff at the facility” knew that the employee filed a grievance or complaint about healthcare flaws and the employer then executed an adverse employment action against the employee “within 120 days of the filing of the grievance or complaint.”

The law also contains a clause that could diminish the protections of the peer-review privilege. In other types of employment cases, this privilege oftentimes may shield an employer’s evaluations of and deliberations about a healthcare professional’s skills and abilities and the reasons for the adverse action.

Finally, as demonstrated by the jury verdict in the Sacramento case, the law provides very generous remedies to prevailing plaintiffs while dosing unsuccessful defendants with severe punishment. For instance, any individual “who willfully violates this section is guilty of a misdemeanor punishable by a fine of not more than twenty thousand dollars ($20,000).” Moreover, a prevailing employee could be “entitled to reinstatement, reimbursement for lost wages and work benefits . . ., and the legal costs associated with pursuing the case,” as well as “any remedy deemed warranted by the court.”

Given the plaintiff’s success in this case and the notoriety of her verdict, healthcare employers in California should brace themselves for many more similar suits to follow. The cost of trying such actions and the size of the jury’s award underscore the need for healthcare employers to consult with employment attorneys who are knowledgeable about the industry (and the many laws and regulations pertaining to it) when making important personnel decisions.

Make Sure to Review Federal Exemptions When Fighting Class Actions in California: Court Finds Truck Route Drivers' Break Claims Preempted By FAAAA

Ramona Carrillo — Wed, 29 Feb 2012 11:26:49 -0800

By: Alden J. Parker

Countless employers have now been faced with class action litigation, making claims for various deviations from the California Labor Code. Many times employers will face these head on with evidence that the claims made by one former employee are not sufficiently common to a substantial number of other past and current employees to merit class action treatment. Other times, employers argue the plaintiff’s allegations don’t demonstrate a uniform set of facts such that the Court would be able to decide a single legal question that would be applicable to an entire class. However, before dealing with these issues head on, California employers should always look beyond our borders to see if Federal law preempts the California Labor Code.

The scourge of California class actions is one factor that has led many employers to be driven from our state’s shores, valleys, and mountains. However, what if your job is to drive into or within California? This is the case faced by many employers in the transportation industry.

Last year, the Ninth Circuit in Am. Trucking Ass’ns, Inc. v. City of Los Angeles (ATA II), 660 F.3rd 384 (2011), and the Southern District of California in Dilts v. Penske Logistics LLC, paved a new highway for California’s transportation companies dealing with meal and rest class actions involving their route drivers. Traveling down this same road, the Central District of California has recently dismissed a putative class action brought by a group of route delivery drivers against Vistar Corp. in Esquivel v. Vistar Corp. dba Roma Food and dba Performance Food Group., Central District of California Case No. 2:11-cv-07284-JHN-PJWx.

In Esquivel the plaintiff route drivers claimed that throughout their employment, their transportation company employer scheduled their delivery routes in such a way so as to prevent them from taking duty-free meal breaks. The plaintiff route drivers also claimed that the time pressures involved in making deliveries by a certain time of day also prevented them from taking breaks. Many customers require that deliveries be done during few specific hours. The plaintiffs attempted to capitalize on this customer requirement to force liability on their employer.

Vistar Corp. moved to dismiss the case on the grounds that the plaintiffs’ claims were preempted by the Federal Aviation Administration Authorization Act (“FAAAA”), 49 U.S.C. § 14501 et seq. The Court agreed and dismissed the case, finding the reasoning in Dilts applicable and persuasive. The Court pointed out that in Dilts, “‘the length and timing of meal and rest breaks seems directly and significantly related to such things as the frequency and scheduling of transportation,’ such that requiring off-duty breaks ‘at specific times throughout the workday . . . would interfere with competitive market forces within the . . . industry.” (quoting Dilts, 2011 WL 4975520 at *9.)

The plaintiffs attempted to argue that the FAAAA does not preempt California’s meal and rest break laws. In support of this failed notion, the citing to various state and federal cases, which the Court found were either “fundamentally distinguishable” from cases involving meal and rest break laws or unpersuasive because they predated ATA II and Dilts. The plaintiffs further argued that Dilts was an “outlier decision” and was “wrongly decided”, but the Court disagreed, finding that Dilts applied a novel test enunciated by the Ninth Circuit in ATA II to cover a previously unanswered question regarding FAAAA preemption.

For motor carriers, this decision is welcome news in that it continues and solidifies the earlier decisions in ATA II and Dilts. For those outside the transportation industry, these cases serve as a great reminder that we should look beyond our state’s borders when addressing wage and hour liabilities to explore whether any Federal laws preempt the draconian California Labor Code provisions often used as the basis for class action litigation. Happy travels!

Recent Developments Warrant Review of Arbitration Agreements

Ramona Carrillo — Wed, 22 Feb 2012 15:05:23 -0800

By: Brendan J. Begley

An employer’s ability to have disputes with employees resolved by arbitrators instead of courts had some ups and downs in recent days. One of those developments suggests that employers should review and perhaps revise their arbitration agreements to keep them enforceable in state court. The other development indicates that arbitration agreements will continue to be treated favorably by federal courts.

In particular, the California Court of Appeal published yet another opinion last week diminishing the ability of employers to enforce arbitration agreements with their employees. On the other hand, the U.S. Supreme Court this week decided yet another case striking down a state law that impairs enforcement of arbitration contracts.

It is widely believed that, all other things being equal, an arbitrator would be less likely than a court to conclude that an arbitration agreement is invalid. Accordingly, many employers prefer to have an arbitrator (instead of a court) decide whether such a contract is valid. However, California’s First Appellate District issued a decision on February 16, 2012, in a case called Ajamian v. CantorCO2e, L.P., indicating that such ambitions are not always easy for employers to obtain.

The appellate court noted that a broadly worded provision in an employer’s arbitration contracts gave “arbitrators the power to decide the validity of [those] arbitration agreements.” Nonetheless, the court said the provision “did not provide clear and unmistakable evidence that the parties intended to delegate authority to the arbitrator, rather than to the court.” As fate would have it, the court went on to find the agreement unenforceable and declined to order the employee to arbitrate the dispute.

A few days later, on February 21, 2012, the U.S. Supreme Court unanimously overturned a West Virginia law that rendered “unenforceable all predispute arbitration agreements that apply to claims alleging personal injury or wrongful death against nursing homes.” In a case called Marmet Health Care Center, Inc. v. Brown, the nation’s highest court reiterated that any state’s “categorical rule prohibiting arbitration of a particular type of claim” is invalid because it runs afoul of federal law.

This much remains certain: California may not adopt a law banning or specifically impairing the arbitration of employment disputes, but care must be taken to ensure that arbitrators can resolve disputes concerning the enforceability of an arbitration agreement. Thus, employers are well advised to confer with counsel to determine if an arbitration contract is desirable.

Where an employer determines that such an agreement is appropriate, legal counsel can provide guidance in terms of what provisions should be included to enhance the enforceability of such a contract. Legal counsel also can help to identify provisions in an employer’s existing arbitration agreements that should be discarded to achieve that goal.

Employers Beware - The Crackdown Continues

Ramona Carrillo — Thu, 16 Feb 2012 11:58:39 -0800

The State of California Signed an MOU with the Federal Department of Labor Together They Will Locate and Punish Those Who Misclassify Independent Contractors

By: Lizbeth V. West, Esq.

In my November 4, 2011 post, I discussed a new California law (Labor Code § 226.8) that imposes serious monetary fines and other sanctions against those who willfully misclassify workers as “independent contractors” rather than “employees.” Those who violate the law can find themselves paying up to $15,000 per violation and up to $25,000 if there is a pattern and practice of misclassification. Also, if the violator is a licensed business, it runs the risk of having its license revoked. Finally, the law provides for publication of a notice to employees and the general public for a period of one year, stating that the violator committed a serious violation of the law.

California’s Secretary of Labor and Labor Commissioner have made it clear that California is serious about enforcing this new law and the state has teamed up with the Feds to help it do so. On February 9, 2012, the Deputy Administrator from the federal Department of Labor (DOL), Nancy J. Leppink, and California’s Labor Commissioner, Julie Su, held a press teleconference announcing that the DOL and California have signed a Memorandum of Understanding (MOU) that provides for the DOL and California to share information and resources as they embark on intensified enforcement efforts against those who misclassify workers as independent contractors. According to the DOL and the State, the purpose of increasing enforcement is to protect the rights of employees and level the playing field for responsible employers by reducing the practice conducted by some businesses of misclassifying employees. This federal/state partnership is the twelfth of its kind for the DOL.

Leppink stated at the press conference that "this memorandum of understanding helps us send a message: We are standing together with the State of California to end the practice of misclassifying employees. …This is an important step toward making sure that the American dream is still available for workers and responsible employers alike."

Su said "California is proud to enter into this partnership with the U.S. Department of Labor to work together to attack the problems of the underground economy, … Gov. Brown just signed an important law that went into effect on Jan. 1, increasing penalties for willful misclassification. With the Labor Department, we are poised to use all the tools in our arsenal to lift the floor for hardworking employers and employees throughout the state." The current term of the MOU is through December 21, 2014.

California businesses must be aware that any business model that attempt to change, obscure or eliminate the employment relationship are illegal if they are used to evade compliance with the law. The misclassification of employees as something else, such as independent contractors, presents a serious problem because these workers often are denied access to certain benefits and protections like family and medical leave, overtime compensation, minimum wage, and unemployment insurance benefits, to which they are entitled. Misclassification can create economic pressure for law-abiding business owners, who often struggle to compete with those who are skirting the law. Finally, and most important to both the federal and state government, employee misclassification generates substantial losses in federal and state tax revenues, unemployment insurance contributions, and workers' compensation funds.

For questions regarding this new MOU or any of the federal or state laws related to the misclassification of independent contractors, or for legal assistance in evaluating your current classifications, feel free to contact Lizbeth West or one of the other employment lawyers in the Employment Group at Weintraub Genshlea Chediak Tobin & Tobin – the employment lawyers who support employers.

Say Hello to Your Newest Hiring Manager: The Government!

Ramona Carrillo — Fri, 27 Jan 2012 11:45:00 -0800

By: Alden J. Parker

Whether you needed a new hiring manager or not, you just got one. On January 23, 2012, the U.S. Supreme Court rejected an appeal by supermarket owners in Los Angeles. While the U.S. Supreme Court did not rule, the effect of their rejection of the appeal is to let stand the California Supreme Court’s earlier ruling, permitting local governments to pass ordinances that require the hiring or retention of employees when a business’s ownership changes hands.

In this case the supermarket owners were challenging the authority of California cities to mandate that workers be hired and kept when a company changes owners. Specifically, the case involved a Los Angeles ordinance requiring supermarkets to keep their workforce for 90 days after a new owner takes over, unless the owner has good cause to fire a particular employee. (Then of course, the employee can sue claiming they were not fired for good cause.) The Los Angeles ordinance at issue in this case passed in 2005 but was blocked by court rulings. However in July 2011, California’s Supreme Court upheld the ordinance in a 6-1 ruling. The California Supreme Court stated that it would not prevent state and local governments from regulating hiring and firing of employees.

Similar local ordinances exist for hotels in Oakland and Emeryville. Other industries are currently affected by these types of ordinances in Berkeley and San Jose. With the U.S. Supreme Court rejecting this appeal, they have cleared the way for other municipalities and even that State to pass similar ordinances. We will continue to monitor this trend as it develops. Now that the government is directly making our hiring decisions like they are employed by us, can we send them a W2? Just a thought…..

Is It Discrimination To Require A High School Diploma?

Ramona Carrillo — Fri, 20 Jan 2012 15:22:25 -0800

By: Scott M. Plamondon

The Equal Employment Opportunity Commission (“EEOC”) thinks so. The EEOC recently posted a letter to its website stating that it may be unlawful for employers to require a job applicant to have obtained a high school diploma if the applicant suffers from a learning disability and has been unable to obtain one. The EEOC’s position represents a significant departure from traditional interpretation by the courts with regard to matters of unintentional discrimination resulting in a disparate impact on certain groups.

In an “informal discussion letter” the EEOC stated that requiring a high school diploma must be “job related for the position in question and consistent with business necessity.” Based on this statement, the EEOC apparently believes that employers might violate the Americans with Disabilities Act (“ADA”) if they require a high school diploma for a particular position which has the effect of disqualifying applicants who have been unable to graduate from high school due to a learning disability. The EEOC’s position appears to place employers in a very difficult position.

Employers who require their job applicants to have obtained a high school diploma generally do so in order to obtain applicants who have demonstrated the commitment and intellectual capacity to enable them to be trusted with more complex tasks in the workplace. Based on the EEOC’s decision, however, an applicant’s failure to have obtained a high school diploma may trigger a duty on the part of the prospective employer to query as to why that applicant has not obtained a high school diploma. Yet, this situation creates a catch-22 for employers. On one hand, an employer is potentially insulated from claims of discrimination asserted by mentally handicapped job applicants if the employer maintains an application process which does not consider (nor does it seek to learn) information regarding an applicant’s disabilities. Yet, on the other hand, turning a blind eye to a learning disability which precluded the applicant from obtaining a high school diploma, according to the EEOC, may violate the ADA. As a result, the EEOC’s position potentially exposes employers to allegations by disabled job applicants who claim that an adverse hiring decision was the result of discriminatory animus, either because the employer asked about disabilities, or because the employer did not select them for employment because they had not obtained a high school diploma and were unable to do so because of their disability.

This circumstance may be avoided where a high school diploma is in fact necessary for an applicant to perform the essential functions of the available job. Accordingly, where a high school diploma requirement is imposed, employers should carefully evaluate the job description and duties associated with the position to ensure that a high school education is actually required to perform the essential functions of the job. Where an employer determines that the essential functions of a job can be performed without having obtained a high school diploma, employers may wish to consider removing this condition as a basis upon which hiring decisions are made.

Attention Employers - Your OSHA Form 300a Annual Summary Must be Posted by February 1, 2012

Ramona Carrillo — Fri, 20 Jan 2012 11:46:00 -0800

By: Lizbeth V. West, Esq.

The employment lawyers at Weintraub Genshlea Chediak Tobin & Tobin (WGCT&T) want to remind all employers that their OSHA 300a Annual Summary Report must be posted in the workplace by February 1, 2012 and remain posted until April 30, 2012. Pursuant to OSHA's recordkeeping requirements, the 300a Annual Summary Report must contain the appropriate information from the employer’s OSHA 300 Logs for workplace injuries and illnesses during 2011.

The 300a Annual Summary Report and guidance for completing it (as well as the 300 Logs) is included in the attached OSHA’s Work-Related Injuries and Illnesses Booklet.

If you have any questions regarding your obligations under OSHA's recordkeeping requirements or need assistance in completing your 300a Annual Summary Report, please feel free to contact one of WGCT&T’s employment lawyers. Otherwise, we all wish you and your employees a healthy and injury-free 2012.

Class Action Waivers in Arbitration Agreements: One Step Forward, Two Steps Back! Class Action Waivers a Violation of the National Labor Relations Act

Ramona Carrillo — Tue, 10 Jan 2012 13:37:12 -0800

By: Alden J. Parker

If you thought all the news from the NLRB these days had to do with Posters and Recess appointments, think again. On January 6, 2012, the National Labor Relations Board emphatically rejected an arbitration agreement that required employees to waive their class action rights. This opinion squarely rejected the U.S. Supreme Court ruling last year in AT&T Mobility v. Concepcion, wherein SCOTUS approved of class action waivers in compulsory arbitration agreements.

This was all done on the very same day that three appointments to fill NLRB vacancies were made while the U.S. Senate was either “in recess” or “not in recess.” But, that is a story for another day.

On the last day of his term, Craig Becker (NLRB member) and Mark Gaston Pearce (NLRB Chairman) (both President Obama appointees) issued an opinion in the highly anticipated case of D.R. Horton, Inc. and Michael Cuda. In D.R. Horton, NLRB held that the holding in AT&T Mobility does not apply in the workplace, and that requiring them as a condition of employment is an unfair labor practice in violation of the NLRA. AT&T Mobility, the NLRB reasoned, was a case about consumer class actions, whereas D.R. Horton involves the workplace and substantive rights granted all employees under the National Labor Relations Act. "Furthermore, AT&T Mobility involved a conflict between the FAA and state law, which is governed by the Supremacy Clause, whereas the present case involves the argument that two federal statutes conflict."

According to the NLRB opinion from Becker and Pearce, "Clearly, an individual who files a class or collective action regarding wages, hours, or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by Section 7" of the National Labor Relations Act. "Such conduct is not peripheral but central to the act's purposes."

The decision will be reviewable by the Eleventh or D.C. Circuit U.S. Court of Appeals. Employers will have to wait and see what the D.C. Circuit does with this decision. However, until then Employers should be cautious when trying to implement compulsory arbitration agreements that contain a class action waiver.

Misclassfied As A Matter of Law?: Not So Fast Say the Supremes!

Ramona Carrillo — Fri, 06 Jan 2012 13:33:41 -0800

By: Alden J. Parker

The California Supreme Court recently addressed whether insurance claims adjusters qualify for the administrative exemption under California law. (Harris v. Superior Court (Liberty Mutual Insurance Co.).) The Court's decision in late December 2011, focused on the issue of the "administrative/production worker dichotomy." Here the Court was looking at whether employees who fall on the "production" side can ever qualify for the administrative exemption.

The lower court held the claims adjusters dealt with individual claims, as opposed to providing advice on general policies or operations of the company. As a result, the Court found the adjusters were production workers and could not qualify for the administrative exemption as a matter of law.

Thankfully, the California Supreme Court reversed, finding that the lower court was too simplistic in their application of the administrative/production worker dichotomy. This does not mean that the Court eliminated the administrative/ production worker analysis. The Court did not address whether the claims adjusters at issue actually qualified for the administrative exemption. However, the Court cited with approval several federal cases finding claims adjusters to be administratively exempt. In dicta, the Court noted that an employee may be exempt where the employee's duties in "servicing" a company are sufficiently important and the employee's duties involve the regular use of discretion and independent judgment.

This is a positive step in defending against misclassification lawsuits. However, employers should be mindful that a successful defense in this area takes planning well in advance of your first lawsuit. Employers should carefully analyze their employees’ job duties and then commit them to job descriptions in order to demonstrate that those duties are sufficient important and involve the use of discretion and independent judgment.

California Pre-Employment Arbitration Agreement Ruled Unconscionable

Ramona Carrillo — Thu, 05 Jan 2012 09:38:14 -0800

By: Chelcey E. Lieber

Including arbitration provisions in employment agreements or employee handbooks is not a guaranteed way to avoid the courtroom. On January 3, 2012, the California Court of Appeal upheld a decision from the Sacramento County Superior Court holding that an arbitration provision contained in a pre-employment agreement was unconscionable, and, therefore, unenforceable.

In Wisdom v. AccentCare, Inc. (Super. Ct. No. 34-2009-00063028 CU OE GDS), the plaintiffs filed a complaint alleging they were not paid for all of the overtime and time they spent handling off-hour calls while they were employed by AccentCare as on-call staffing coordinators.

When they applied for a job with AccentCare, four of the six plaintiffs signed an acknowledgment form titled: "Acknowledge Your Understanding of the following Statements and Agreements by Placing Your Initials in Each Paragraph, then Sign and Date Below." One of the paragraphs was an arbitration agreement that stated:

"I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by AccentCare, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with AccentCare, whether during or after employment, will be submitted to binding arbitration. I agree that such arbitration shall be conducted under the rules then in effect of the American Arbitration Agreement."

After the lawsuit was filed, AccentCare sought to compel arbitration based on the signed acknowledgments. The trial court denied the motion on the ground that the arbitration agreement was unconscionable, and the Court of Appeal affirmed the judgment.

First, the trial court noted that the plaintiffs were not informed that signing the agreement was optional, and the heading indicated that signing was mandatory. Second, there was unequal bargaining power between the parties as few employees are in a position to refuse a job because of an arbitration agreement, and the nature of the employer-employee relationship leads to an inherent power imbalance. The agreement also implied that there was no opportunity to negotiate its terms as the other statements the applicants were directed to acknowledge were terms that an applicant would not expect to negotiate. For example, that the statements in the application were true, that AccentCare could investigate the applicant's references, that AccentCare is a smoke-free and drug-free workplace, and that employment would be at-will.

The trial court also stated that an element of surprise was present because the arbitration agreement was located in the middle of five uniform, single-spaced paragraphs, and was not distinguished in any manner, the meaning of the agreement was not explained, and the plaintiffs did not know what "binding arbitration" meant. Thus, the employees' reasonable expectation that they were entitled to a trial was disappointed.

Further, the trial court held the agreement was unenforceable because it was not mutual - there was no language indicating AccentCare agreed to submit to arbitration. The trial court noted the one-sidedness of the agreement due to the unambiguous phrases "I hereby agree" and "I agree," and pointing out that only the applicant signs at the bottom of the form.

Lastly, the agreement stated that arbitration would be conducted under the rules of the American Arbitration Association, but the rules were not attached. Thus, the employee is "forced to go to another source to find out the full import of what he or she is about to sign -- and must go to that effort prior to signing."

This decision is yet another signal that enforcing pre-employment arbitration agreements continue to be increasingly difficult for employers. Employers should review their arbitration agreements with their legal counsel to determine whether any changes should be made to reduce the risk that the agreement will ultimately be deemed unenforceable.