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California Employment Law

Commentary on Issues Facing California Employers

Sick Day Monday Follows Super Bowl Sunday

Posted in Wage and Hour

An estimated 16.5 million employees may miss work the day after the Super Bowl, with another 7.5 million workers reporting late to work, according to a new study. In fact, 10.5 million people have already requested Monday off of work. And California employers can’t do much about it.

With California’s Paid Sick Leave law in full effect, workers who call in sick must be permitted to use their paid time off. Though we are only a month into the year, remember the law allows employees to carry over up to 48 hours (or 6 days) so that employees are entitled to paid sick leave even at the beginning of the calendar year. Oh, and if you are thinking about asking for a doctor’s note, proceed with caution, as it can be viewed as retaliatory. Perhaps the best bet is providing free bagels and a special office hangover “cocktail” to ensure all productivity is not lost.

CA State Budget Proposes to “Improve” Handling of PAGA Cases

Posted in Class Actions, Wage and Hour

For lawyers who defend wage and hour cases in California, “PAGA” is a four-letter word. The Private Attorneys General Act allows private employees to sue to recover penalties that the state labor commissioner could have collected. Employers and their attorneys dislike PAGA for these reasons:

  • It drastically expands the ways that employers can be sued, because employees can sue for violation of statutes that previously provided no private right of action.
  • It expands the potential liability, since employees can sue on behalf of themselves and other aggrieved employees.
  • PAGA claims are exempt from arbitration agreements.
  • The procedures that apply to PAGA actions are ill-defined. While a class action plaintiff has to satisfy specific requirements to represent a class, no one knows what, if anything, a PAGA plaintiff must show to bring a representative action.

Now comes word that Governor Jerry Brown’s budget proposal for the 2016-2017 budget year seeks “to stabilize and improve the handling of PAGA cases, largely to the benefit of workers, employers, and the state.” It intends to do this by adding additional positions to the Department of Industrial Relations and the Labor and Workforce Development Agency and have those agencies be more involved in reviewing incoming cases, pursuing them administratively, and approving PAGA settlements.

The idea that having the state involved in this process is going to somehow benefit employers is absurd. These agencies are bureaucracies premised on the belief that employers are inherently evil “wage thieves.” Their involvement in the process will only add greater levels of expense and uncertainty to a process that already has plenty of both.

Takeaways: PAGA is a mess that seems likely to get messier. The only way to “win” is not to get sued in the first place. A thorough wage and hour compliance audit can quite literally save even a medium-sized employer millions of dollars.

Can CA Employers Require A Doctor’s Note for Paid Sick Leave (Part 2)

Posted in Advice & Counseling, Discrimination, Retaliation, Wage and Hour

Can California employers require employees who request paid sick leave to provide a note from their doctors? I addressed that question last May in response to a webinar put out by the California Department of Industrial Relations, the agency that enforces California’s Paid Sick Leave law. In that webinar, the DIR said that requiring employees to provide doctors’ notes could be construed as unlawful interference with their statutory right to the leave.

Having heard nothing further on the issue, I wrote an e-mail to the DIR at AB1522@dir.ca.gov.  According to the response I received last week, the agency is sticking to its guns. They say in their response that, since there’s nothing explicitly allowing employers to ask for doctors’ notes, conditioning the leave on the employee providing one “can arguably interfere with the employee’s use of paid sick leave….” The DIR says that it will analyze whether denying leave for failure to provide a note constitutes retaliation “according to the unique facts of the case.”

Here’s the unedited text of the DIR’s response to my inquiry: Text of AB 1522 e-mail.

As I’ve said before, if paid sick leave is intended to provide a benefit for employees who validly need it, prohibiting doctors’ notes is ridiculous. If, instead, the law is intended as another way to subject well-meaning employers to expensive lawsuits and agency enforcement actions, then it makes perfect sense.

I still believe that the risk of an interference or retaliation claim from asking for a doctor’s note is less than the risk of employees abusing this leave to get three extra paid days off per year. However, the law remains unclear on this point, with nothing but a somewhat equivocal agency interpretation to go on. We’ll continue to watch this issue.

Are your hiring managers prepared to answer these questions?

Posted in Advice & Counseling, Disability Discrimination, Discrimination, Wage and Hour

Scenario 1: Someone walks in to one of your locations and requests an application. The applicant has one arm. The manager doesn’t think there’s any way that someone with one arm can do the job. Can the manager tell the applicant not to waste time applying?

Scenario 2: Suppose that an applicant comes in, requests an application, and asks the manager for help filling it out. Can the manager tell the applicant that, if he can’t fill out the application, he won’t be able to do the job?

Scenario 3: An applicant for a retail position comes in wearing a hijab (a veil that covers the head and chest, traditionally worn by some Muslim women). The manager doesn’t know anything about the applicant’s religion, but doesn’t think your customers will be comfortable around a worker wearing a hijab. Can the manager tell the applicant that wearing a hijab violates the company’s dress code?

Scenario 4: You have two open positions. One in San Francisco and one in Sacramento. The best applicant for the one in SF is a man who negotiates the salary fairly aggressively. The best applicant in Sacramento is a woman who does not. You like them both. Can you pay the man more because he negotiated harder? Can you pay him more because he’ll be working in a location with a higher cost of living?

As regular readers of this blog know, the answer to all these questions is “no.” You can find more information on scenarios 1 and 2 here, scenario 3 here, and scenario 4 here.

Of course, it’s not enough for human resource managers to know the answers. Your workers who handle job applications need to be trained on these issues, too. Is training expensive and time-consuming? Hardly, especially when you compare it to the cost in terms of time and money of getting sued.

Don’t Hire a California Fair Pay Act Claim

Posted in Advice & Counseling, Class Actions, Wage and Hour

Your company has been trying to fill a position for months. None of the candidates you’ve seen have the right qualifications. It’s frustrating for management and for the workers who have to do extra work while the position is vacant.

Then a candidate comes in and he seems perfect. He has great job experience, is smart, interviews well, and seems genuinely interested in the position and your company. The only drawback is that he’s currently making more than you typically pay for the position. But to get a great candidate in this hard-to-fill position, it’s worth it to you to pay him more. Right?

The answer depends on what the real costs are. Because if you have women in your organization doing substantially similar work for less money than you’re paying this new hire, you’ve exposed yourself to a claim under California’s Fair Pay Act. Salary history is not a proper justification for a pay disparity.

Here’s another scenario. You have two open positions. One in San Francisco and one in Sacramento. The best applicant for the one in SF is a man who negotiates the salary fairly aggressively. The best applicant in Sacramento is a woman who does not. You like them both. Can you pay the man more because he negotiated harder? Can you pay him more because he’ll be working in a location with a higher cost of living? The answer to both questions is “no.” Those are not permissible considerations under the Fair Pay Act.

We’ve written about this new law extensively. Keith Chrestionson also wrote this excellent piece for Corporate Counsel. As with so many aspects of California employment law, being proactive is the key. The first step is a review of your pay practices and policies, ideally with counsel involved to protect the review under the attorney-client privilege. Another important early step is making sure that the managers doing your hiring understand the permissible bases for differences in compensation.

Litigation under the FPA will be expensive and uncertain. The standards are vague and some unlucky employers are going to serve as guinea pigs while courts figure out what the law really means.

 

You’re Invited to the January 21 Fox Event “Equal Pay for Equal Work”

Posted in Advice & Counseling, Wage and Hour

On Thursday, January 21, 2016, from 8:30 a.m. to 10:00 a.m., Fox partners Yesenia M. Gallegos and Jeffrey S. Kravitz will hold a CLE presentation in the firm’s Los Angeles (Century City) office covering the California Fair Pay Act.

Effective January 1, 2016, the FPA prohibits an employer from paying any employee a lower wage than that paid to employees of the opposite sex for substantially similar work and places the burden on employers to prove that any pay gap between workers is due to nondiscriminatory factors.

Yesenia and Jeff will discuss:

  • California’s existing Equal Pay Laws
  • The new California FPA, its impact on employment litigation and requirements such as:
    • Wage compliance
    • Anti-retaliation provision
    • Recordkeeping compliance
  • The FPA’s impact on industries, including the entertainment, legal services and medical industries
  • Women and negotiating pay
  • Managing risk and avoiding litigation

For more information and to register for “Equal Pay for Equal Work,” please visit the event’s page.

Supreme Court Poised To End Compulsory Union Dues For California Teachers

Posted in Labor Law

Almost 40 years ago, the U.S. Supreme Court in Abood v. Detroit Board of Education ruled that states could require public employees to pay union dues. The Court, however, now seems poised to sidestep, and perhaps even overrule, that decision. On January 11, the Court heard argument in a case brought by dissident teachers in California who claim that compulsory union dues violate their First Amendment rights. In Friedrichs v. California Teachers Association,  the plaintiffs argue that when government requires one to subsidize a particular political cause – i.e., to put one’s money where one’s mouth isn’t – the principle of free speech is violated. The plaintiffs further contend that almost everything about a public employee union is political, and therefore they cannot be compelled to pay dues or even the “agency fees” the teachers’ unions have been allowed to charge non-members. Based upon the comments at the oral argument, it appears that a majority of the Justices may agree.

Justice Kennedy, considered by many observers to be the swing vote on this issue, seemed to tip his hand in questioning the lawyers for the union who argued that the plaintiffs were merely seeking to become “free riders” in the collective bargaining process. He responded, “The union is basically making these teachers compelled riders on issues with which they strongly disagree.”  Justice Scalia drew a distinction between private employment and public employment “where every matter bargained for is a matter of public interest.” Justices Thomas, Roberts and Allito have indicated in other decisions that they may be willing to cast aside Abood.

If the plaintiffs prevail in this case, the cash collecting ability and political clout of the public sector unions in California could be significantly diminished.  A decision is expected in June.

California and Federal Workplace Arbitration Law Remain in Conflict – MHN Govt. Svcs. v. Zaborowski

Posted in Employment Litigation

We asked nearly 4 years ago if Armendariz (the key California Supreme Court case from 2004 on employment arbitration) was on a collision course with Concepcion (the US Supreme Court case from 2011). Concepcion said that the Federal Arbitration Act preempts state laws that “stand[] as an obstacle to the accomplishment and execution of the full purpose and objectives of [the FAA].” Armendariz, however, created numerous requirements that seem to violate that prohibition. (Can you say “modicum of bilaterality”?)

Given the number of issues facing the U.S. Supreme Court, it’s striking how often it finds it necessary to correct California’s interpretation of the FAA. It ended the last term doing so in DIRECTV Inc. v. Imburgia and appeared intent on doing the same near the start of this next term in MHN Government Services Inc. v. Zaborowski.

At the request of the Daily Journal (subscription required), I wrote an opinion piece about Zaborowski. In that case, the petitioners complain that California law since Armendariz applies a different standard to arbitration agreements in deciding whether to strike unlawful provisions and enforce the rest of the agreement or whether, instead, to strike the entire agreement. Oral argument in the case was set for February.

So, are Armendariz and Concepcion on a collision course? It sure looked that way. But the collision has been postponed. As of January 7th, the argument has been removed from the court’s calendar. It looks like the parties may have settled. (While that collision is no longer imminent, I like this image too much to change it.)

Time for CA Supreme Court to Take a Stand on Suitable Seating – Oral Argument in Kilby v. CVS Pharmacy, Inc.

Posted in Advice & Counseling, Class Actions, Wage and Hour

We’ve been writing about California’s suitable seating requirements for over five years and are still waiting for a grown up in authority to tell us what the law means. But don’t feel bad for us. Feel bad for the thousands of California employers who face class actions lawsuits for not complying with a law that no one is able to explain.

Most of the California Wage Orders say that: “All working employees shall be provided with suitable seats when the nature of the work reasonably permits the use of seats.” The only problem with that requirement is that no one knows how to interpret the part that comes after “All working employees shall be provided with.”  What seats are “suitable”? How does the “nature of work” fit into the equation and who determines that? When does that undefined nature of the work “reasonably permit” suitable seats?

The Ninth Circuit asked the California Supreme Court for clarification, the California Supreme Court asked the Division of Labor Standards Enforcement (“DLSE”) to weigh in, and now the issue is back with the California Supreme Court, which heard oral argument yesterday in Kilby v. CVS Pharmacy, Inc. Our own Cristina Armstrong was there. She and Dave Faustman drafted an amicus brief in support of CVS for the Retail Litigation Center. Cristina shared with us this summary of the argument:

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Chief Justice Cantil-Sakauye and Justices Cuellar, Corrigan, Chin, and Liu were present for the argument. It was announced that Justices Werdegar and Kruger were “indisposed,” but would be listening to the arguments.

Plaintiffs’ counsel’s main theme was that the Wage Order seating requirement is a minimum labor standard, akin to overtime or minimum wages, that must have an objective measure. He argued that an employer’s business judgment should never have any part in the analysis of whether to provide seating.

Counsel for CVS advocated the “holistic” approach – an evaluation of the totality of the circumstances – which includes considering an employer’s legitimate business judgment in determining what’s reasonable. CVS’s counsel even used an example from the amicus brief that we wrote for the Retail Litigation Center when describing the importance of customer service. He noted that standing is a sign of respect that we use in many situations, including standing for the Justices when they entered the courtroom. Counsel for JP Morgan emphasized that not all employers are the same, and that the Court’s opinion must guide employers on how to address situations: (1) where employees have duties that require seats all the time, (2) where employees have duties that require them to be on their feet all the time, and, most significantly, (3) where duties that allow employees to sit are intermittent and intertwined with duties that require standing. She, too, supported the holistic approach.

Most of the questions concerned the phrase “nature of the work” and whether the proper unit for analysis was the job as a whole or the discrete duties of each job. Justice Chin asked no questions. Justice Corrigan only asked questions of CVS and JP Morgan, and those questions indicated that she favors the plaintiffs’ position. The Chief Justice asked a few questions to both sides. Most of the questions from the bench came from Justices Cuellar and Liu.  Justice Liu’s commentary seemed to favor the employers. He was most skeptical of plaintiffs’ position that an employer’s business judgment should never be considered in determining whether the nature of the work reasonably permits seats.

It’s hard to say which way the court will go, especially with two Justices absent. My best guess is that the Court will take the position that the DLSE described in the amicus brief the Court requested. Justice Cuellar even quoted the DLSE’s position on the employer’s business judgment during the hearing, which states:

In determining whether the nature of the work “reasonably permits” seating, various facts and conditions, including the physical layout of the workplace, and information from both the employer and employee regarding duties or tasks which give rise to application of the requirement must be objectively assessed and applied in a reasonable and practical manner.  An employer’s business judgment is a factor for consideration, but, where the nature of the work otherwise reasonably permits seating, the employer’s business judgment does not control nor should it be given deferential weight.  The physical characteristics of an employee will typically not be a relevant factor.

The DLSE’s position splits the baby in a way that the Court could find persuasive, but may still not provide the clarity that the 9th Circuit has asked for and, more importantly, that employers need.

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Thanks for that firsthand summary, Cristina. We’ll sit tight (assuming the nature of our work reasonably permits it) and continue to wait for some definitive guidance on this issue.