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California Employment Law

Commentary on Issues Facing California Employers

NLRB Says Employer Email Can Be Used for Organizing

Posted in Labor law

In keeping with its clear pro-union agenda, late last year, the NLRB overruled its past precedent and held that employers who grant employees access to their email systems must now allow them to use the email system for Section 7 activity during nonworking time. Under the NLRA, Section 7-protected activity could include such things as emails between employees soliciting support for the union or some other concerted activity for the employees’ mutual aid or protection.

The NLRB will now presume that employees who have been given access to the employer’s email systems in the course of their work have the right to use the email systems to engage in Section 7-protected communications on nonworking time. But an employer may rebut the presumption by demonstrating that special circumstances necessary to maintain production or discipline justify restricting its employees’ usage.

This rule applies to most businesses, whether unionized or not. Employers that did not give employees access to their email systems before do not need to do so now. However, employers that presently restrict access for business purposes only must now give employees access to engage in Section 7 communications during nonworking time, unless they can justify a complete or partial restriction on employee use.

The decision leaves many questions unanswered. For example, what special circumstances are necessary to justify a total ban or partial restriction on email usage?  Also, how can an employer lawfully ensure that its employees are working during working time without conducting unlawful surveillance on the employees—another unfair labor practice under the NLRA?

While waiting for answers to these questions, we will keep you posted of any developments.

A Novel Defense to a Harassment Claim

Posted in Discrimination, Harassment

In Monday’s post, I referenced the pending sex harassment trial – Marchuk v. Faruqi & Faruqi LLP - to highlight the importance of managers setting a good example. I somewhat smugly said that I was going to avoid the more salacious aspects of that case.

And I did, on Monday. But that was before the reports that the alleged harasser, a law firm partner accused of forcing himself on an associate after a holiday party, offered this testimony (as quoted in Law360 (subscription)):

We were both very drunk and it was awkward and we couldn’t really consummate the act, so to speak.

Seriously? That’s a defense? Is it an affirmative defense, that is one you need to plead in your answer? If so, does it have a name? In what other situations can the “too drunk” defense be used? I assume not drunk driving, but maybe I’m not being sufficiently imaginative. Most importantly, is “consummation” an element of a harassment claim I wasn’t aware of?

We will never know exactly what happened between the plaintiff and her alleged harasser on the night in question. In some ways, what happened will be less important than what a jury says happened. Once they render their verdict, we’ll hopefully get to hear how they viewed this novel defense.

 

 

Having Harassment Policies In Place Is Only the First Step

Posted in Discrimination, Employment Litigation, Harassment

There’s a sex harassment case playing out in federal court in New York – Marchuk v. Faruqi & Faruqi LLP -  that’s been getting a lot of attention. The allegations involve a law firm partner forcing himself on an associate after a holiday party. Law360 (subscription) provides daily updates. While there are enough sordid details to fill 10 blog posts, I want to focus on a less salacious issue that arose last week.

Plaintiff is arguing – as harassment plaintiffs invariably do – that the employer didn’t take its obligation to provide a harassment-free workplace seriously. As an example, one of the founders would jokingly exclaim “Handbook!” when someone told a dirty joke. Based on this, the plaintiffs’ attorneys argue that “the handbook at the firm was a joke” and people knew they could violate the harassment policy without consequence.

I can certainly imagine situations where reminding employees of a policy is an effective response to off-color comments. But if that doesn’t get the message across, employers need to be prepared to do more. How managers react to violations can be critical evidence for a jury in determining whether, despite handbook language to the contrary, bad behavior is implicitly tolerated.

Takeaways:

  1. Harassment litigation is less about what the harasser did than about what the company did. When you see a large verdict against an employer, it’s because the plaintiff was able to convince a jury the company didn’t take the issues seriously.
  2. Having updated policies in place is an important first step. But if managers disregard the policies (by word or deed), the policies won’t do you much good. What your managers say (and  how they act) is going to carry more weight than what the policies say. Harassment training is a good way to inform managers what you expect from them.

 

California Employment Arbitration: What Now?

Posted in Class Actions, Employment Litigation, Wage and Hour

For years, the rules surrounding employment arbitration agreements in California have been in a state of flux. In light of the US Supreme Court’s decision this week not to grant review in Iskanian v. CLS Transportation, that law remains unsettled. This uncertainty may persuade some employers not to put arbitration policies in place or to delay doing so until the law becomes better defined.

Dave Faustman, who has been defending the Iskanian case from the outset (with help from  Yesenia GallegosCristina ArmstrongNamal TantulaChip Zuver, Lorraine Harris, and others) and who argued the matter before the CA Supreme Court, has promised to give his take on the decision in a separate post. For now, what’s important to know is that mandatory arbitration agreements can require employees to waive the right to pursue class actions. But whether employees retain the right to pursue a representative action under the Private Attorneys General Act (“PAGA”) depends on which court you’re in. State courts say “no,” but most federal courts in California are saying “yes.” Given that uncertainty, is it worthwhile to require employees to sign arbitration agreements?

I believe it is. Mandatory employment arbitration has its downsides. It’s harder to get summary judgment, arbitrators are expensive, and you have very few options to correct an arbitration decision that goes against you. Plus, as long as Iskanian is controlling in state courts, you could find yourself litigating certain claims in arbitration and still having to litigate PAGA claims in court. Those are daunting obstacles, no question.

There are two reasons, however, why I think every California employer should seriously consider arbitration.

  1. You can require employees to waive the right to bring class actions. Any employer who’s had to defend a class action knows that such waivers can easily save a company millions.
  2. The cases are easier to settle. You no longer have to hear about how sympathetic the jury will find the plaintiff and how the jury will be swayed by their emotions to award a gigantic verdict. That is far less likely when the trier of fact is an arbitrator with experience in these types of cases. I have no doubt that cases heading to arbitration settle more cheaply than cases heading to trial

If you’re still not convinced, look at how hard the plaintiff’s bar and the legislators they support fight to avoid mandatory workplace arbitration. Clarity and certainty in the law on this topic may still be years off. Still, employers looking to reduce their exposure to employment claims should seriously consider requiring their employees to sign arbitration agreements.

 

CA Supreme Court to Decide When Employers Can Recover Litigation Costs

Posted in Discrimination, Employment Litigation

The California Supreme Court may be poised to rewrite the rules on what costs an employer can recover if it wins a discrimination case.

It’s no secret how difficult it is for prevailing employers to recover attorneys’ fees in discrimination cases. Successful plaintiffs get them routinely. But since the courts don’t want to discourage employees from pursuing potentially valid discrimination claims, a defendant can’t recover its fees without showing that the claims were frivolous or unreasonable. It’s a very hard standard to meet. Proving that the plaintiff is a liar of the flaming slacks variety won’t necessarily get you there.

For years though, there have been some minor costs – filing fees, certain transcript fees, fees paid to subpoenaed witnesses – that the prevailing party almost always gets to recover. But that may be about to change. As reported in Law360 (subscription required), the California Supreme Court will hear argument in two weeks in Williams v. Chino Valley Independent Fire District. The issue will be whether a discrimination defendant gets to recover those costs routinely (like virtually every other type of defendant) or whether that recovery is subject to the same heightened standard as attorneys’ fees (i.e. the defendant can only recover if it shows the claims were frivolous, unreasonable, or groundless).

In fact, plaintiffs who bring meritless claims face very little downside. An unsuccessful employer defendant faces a huge financial liability if it loses. An unsuccessful employee plaintiff faces very little. Depending on the outcome of Williams, those plaintiffs may have even less of their proverbial skin in the game.

What can employers do?

  • The best option is to avoid employment claims in the first place. Just within the last several months, we’ve discussed here, here, here, and here how to do that.
  • If you can’t avoid a lawsuit, there are a variety of ways to try to make plaintiffs potentially responsible for all or some of your attorneys’ fees, such as requests for admissions, offers of judgment, and sanctions motions. Also, if you can’t increase the plaintiffs’ downside, try to decrease their upside. Mandatory arbitration agreements reduce the likelihood of the plaintiff obtaining an exorbitant, emotion-fueled recovery.

I understand the goal of encouraging plaintiff’s to bring (and their attorneys’ to take on) valid claims. But if a plaintiff has no financial downside, taking a shot at a windfall verdict will almost always seem more attractive than a reasonable settlement.



CA Judges Bring Class Action Wage Claim

Posted in Class Actions, Wage and Hour

Yesterday, in Robert M. Mallano v. John Chiang et al., the court certified a class of 1,600 active state court judges and 1,800 retired judges and pension beneficiaries. The judges claim that the state has unlawfully withheld wage increases, which in turn affect pension benefits. The fact that the state court judge who heard the case sided with the state court judges bringing the case shouldn’t come as a huge shock.

In fact, California state court judges are seriously underpaid and haven’t had a raise in over six years. You can’t pay judges less than many big-firm associates without it ultimately affecting the number of qualified candidates willing to assume that role.

Also, from an employer’s perspective, it’s OK if the idea of judges bringing a class action surprises you. The surprise you want to avoid is having your own employees bring one. In terms of expense, stress, and disruption to your business, having qualified counsel audit your HR and payroll practices costs a tiny fraction of having to defend one of these claims.

Nice Work If You Can Get It: CA Supreme Court Requires Pay for Sleeping Workers

Posted in Class Actions, Wage and Hour

The California Wage Orders require that employees be paid for “all hours worked.” Mendiola v. CPS Security, a California Supreme Court opinion issued yesterday, addressed how to treat 24-hour security guards at construction sites when they were sleeping in their trailers.

Under federal law, the time would not need to be paid. But here in California, as we’ve mentioned once or twice, the rules are different. The court noted that Wage Order 5, for public housekeeping workers (which includes hospitals), incorporates aspects of the federal standard. But this case arose under Wage Order 4 (for professional, clerical, and similar occupations), which did not incorporate that same standard (except for certain healthcare workers). The court concluded, therefore, that sleep time must be paid. In doing so, it overturned a line of state appellate decisions that said the parties could agree that sleep time would not be paid.

Before you think that courts are insensitive to the difficulties California employers face in trying to determine what law applies, consider this passage from a footnote: “We acknowledge CPS’s efforts to ascertain whether its policy complied with California’s labor laws and recognize the difficulty it and other employers can face in this regard.” But it didn’t change the court’s decision one iota. The court not only decided that sleep time had to be paid in these circumstances, but explicitly made its ruling retroactive. So now other employers who complied with the law as it was understood before yesterday are subject to claims (including class actions) by their own current and former employees who were not paid for sleep time.

Here’s a copy of the Mendiola Opinion (pdf) and two takeaways:

  1. Don’t think that you’re immune from California wage and hour claims just because you comply with federal law. Nothing could be further from the truth.
  2. If you have employees who sleep at work, it’s time to reevaluate whether and how they need to be paid for that time.

    Copyright :  Andrea De Martin

    Copyright : Andrea De Martin

 

Top 10 Things for California Employers to Do in 2015

Posted in Discrimination, Employment Litigation, Labor law, Wage and Hour
Copyright :  Vedran Vukoja (Follow)

Copyright : Vedran Vukoja

Every employer in California needs legal help at some point. The laws are too complex and the penalties too severe for employers to figure it all out on their own. Even the courts and government agencies can’t decide what some of these laws mean.

So the only question for employers is whether you’re going to take preventive steps to avoid legal issues or wait for the legal issues to arise. The former course can be way less expensive, disruptive, and damaging to your reputation. With that in mind, my colleague Nancy Yaffe and I put together a list of 10 things California employers can do to protect themselves in 2015. You can access it here.

And yes, that’s the same Nancy Yaffe who was recently selected by L.A. Biz to receive one of its inaugural Women of Influence Awards. The program honors women business leaders in the LA area who stand out both for their achievements in the marketplace and their commitment to community and mentoring. Way to go Nancy!

CA Court Permits On-Call Rest Periods

Posted in Class Actions, Wage and Hour
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damedeeso

While the 2012 California Supreme Court decision in Brinker clarified some of the landscape for meal and rest period litigation, break requirements continue to give rise to more than their share of class action claims.

In Augustus v. ABM, security guards filed suit in Los Angeles in 2005 arguing that they did not receive adequate rest breaks because they were required to carry radios and be available, if necessary. In 2012, the plaintiff’s moved for summary judgment arguing that the evidence was undisputed that ABM violated the law and that they were entitled to damages, interest, and penalties totaling $103.8 million. Despite the absence of any evidence that anyone’s rest period had actually been interrupted, the superior court granted the motion and awarded plaintiffs $89.7 million.

ABM appealed and the appellate court, in an unpublished opinion, reversed. The appellate court explained that Labor Code § 226.7 said that “[a]n employer shall not require an employee to work during a meal or rest or recovery period.” (The statute has since been amended to include recovery periods to prevent heat illness.) But requiring someone to work is different than requiring them to be available. In addition, while the wage orders clearly state that employees must be relieved of all duties during meal periods, they contain no such requirement for rest periods. So according to the appellate court, employees need not be relieved of all duties during rest periods.

Because the decision is unpublished and can still be taken up for review, this may not be the final word on the topic. [On January 29, 2015, the case was ordered to be published.] Still, it’s nice for our first post of 2015 to be good news for employers.

Lawsuit Filed to Challenge Los Angeles Hotel Citywide Minimum Wage Ordinance

Posted in Wage and Hour

Two hotel trade groups have filed a lawsuit to challenge the Citywide Hotel Worker Minimum Wage Ordinance (Ordinance), passed by the City Council in October, and slated to raise the minimum wage for certain Los Angeles hotels to $15.37 per hour in July 2015. I have written about this Ordinance and all of its requirements.

The main argument in the complaint is that the Ordinance violates federal labor law in a host of different ways. It states: “Under the guise of an ordinance purporting to require that a “fair wage” be paid to hotel workers, the City has constructed, whether by design or consequence, an insidious mechanism that improperly aids the Hotel Worker’s Union … in its efforts to organize employees at all of the City’s hotels that have until now resisted unionization.” The complaint goes on to allege that the Ordinance is pre-empted by federal labor law because it “disrupts the balance struck by Congress between labor and management” and should therefore be rendered void and unenforceable.

The complaint thoroughly reviews the many aspects of the Ordinance, which is about much more than just wages as it regulates service charges, paid time off, and unpaid time off. The possible implications of this broad sweeping Ordinance on Los Angeles area hotels (whether union or nonunion) are addressed in depth, and the alleged impacts are far-and-wide.

Whether the requested relief will be granted and the Ordinance voided, or whether ongoing legal challenges will incentivize the City Council to revisit and perhaps revise the Ordinance, remains to be seen. What is certain is that these trade groups do not intend to allow the Ordinance to go into effect without a fight. Stay tuned.