California’s legislature has passed two new statutes that increase the protections for employees arbitrating workplace disputes.

SB 1007, which passed on September 1, 2016, gives any party to arbitration proceedings “the right to have a certified shorthand reporter transcribe any deposition, proceeding, or hearing as the official record.” I routinely advise employers to have depositions and hearings reported since it makes it easier to cite to the record when there’s a … um … a record.

The other new statute, SB 1241, passed on September 9, 2016. This statute says that arbitration provisions can’t require California employees to arbitrate their claims in other states or require arbitrators to apply other state’s laws.  I think that, even under prior law, such requirements would have been deemed unconscionable, especially since courts have been vigilant in insisting that employees not be required to bear expenses or burdens in arbitration that exceed what they’d be required to bear in court actions. We expect the governor to sign both measures.

If you want to see our analysis of the pros and cons of workplace arbitration from the employer’s perspective, check out my recent guest post for Continuing Education of the Bar ● California (a program of the University of California and the State Bar of California) on their CEBBlog.

We’ve written extensively about mandatory workplace arbitration. But it was still an honor when CEB, a program of the University of California that is cosponsored by the State Bar of California, asked me to write a guest post for their CEBlog on the pros and cons of implementing such a program. You can read that post here. This is an issue that every employer should give serious thought to.

Copyright: maurus / 123RF Stock Photo
Copyright: maurus / 123RF Stock Photo

‘Tis the season for new employment laws in California.  The governor has until September 30th to sign or veto many pending bills on his desk.  So, this blog may be the first of several updates in the coming weeks.

Issues related to domestic violence, sexual assault, and stalking are all over the news.  While existing law provides protected time off to victims of domestic violence, apparently many workers and employers are not aware of those rights.  According to a study by the Legal Aid Society Employment Law Center, nearly 40% of survivors in the state reported being fired or fearing termination due to intimate partner violence.

To address this issue, on September 14th the governor signed AB 2377 a bill that requires employers of 25 or more to provide notice to employees of their rights to take protected time off for domestic violence, sexual assault or stalking.  This new bill requires employers to “inform each employee of his or her rights” upon hire and at any time thereafter upon request.  The Labor Commissioner will develop a form for these purposes and publish it by July 1, 2017.

Copyright: art1980 / 123RF Stock Photo
Copyright: art1980 / 123RF Stock Photo

Until then employers should have a provision in their handbook setting forth existing rights to take time off for the following issues that arise from being a victim of domestic violence, sexual assault, or stalking, including:

  • To seek medical attention for injuries;
  • To obtain services from a domestic violence shelter, program or rape crisis center;
  • To obtain psychological counseling;
  • To participate in safety planning and take related actions (such as temporary or permanent relocation).

Employers should also make sure that managers understand employee rights to such time off (and to use available vacation and/or sick time for such purposes), and are trained to forward such sensitive issues to Human Resources to address any employee concerns about retaliation for actually taking the time to address such serious personal matters.

It’s been barely two months since Tyreen Torner compiled a chart summarizing the paid sick leave laws of California and six cities (San Francisco, Oakland, Emeryville, Los Angeles, San Diego, and Santa Monica). Well, she has now updated the chart, which you can download here: CA State and City Paid Sick Leave Laws. Is Tyreen’s work done? Hardly! Berkeley has enacted its own paid sick leave laws that take effect in 2017. Other cities will also be jumping on the bandwagon and it will be time for another update. Sorry Tyreen!

Copyright: olivier26 / 123RF Stock Photo
Copyright: olivier26 / 123RF Stock Photo

Yesterday, we provided you a copy of our National Survey on Marijuana Laws and Regulations. Because we’re still feeling generous, today we’re providing our 50-state survey on how the laws on restrictive covenants in the employment context vary from state to state. This survey is a joint effort between Fox Rothschild Labor and Employment and Securities Industry practice groups.

Where will this generosity end? That remains to be seen!

Copyright: studiograndouest / 123RF Stock Photo
Copyright: studiograndouest / 123RF Stock Photo

Looking for a handy source that explains the current state of marijuana laws in the U.S.? Joshua Horn and Nicholas Casiello, Jr., who head up our firm’s Cannabis Practice, have the answer. They’ve compiled an E-book entitled: National Survey on Marijuana Laws and Regulations. Here’s a link: E-book Marijuana – August 2016. It provides a state-by-state summary, along with links to the relevant laws and pending legislation.

Here in California, we’re keeping our eyes on Proposition 64 on the November ballot. This proposition, known as the California Adult Use of Marijuana Act, would permit recreational marijuana use by those 21 and over. It would not, however:

Copyright: wollertz / 123RF Stock Photo
Copyright: wollertz / 123RF Stock Photo
  • Restrict employers’ ability to maintain a drug and alcohol free workplace;
  • Require employers to permit the use, possession, sale, or growth of marijuana in the workplace; or
  • Affect the ability of employers to have policies prohibiting the use of marijuana by current and prospective employees.

We’ll continue to monitor this rapidly developing area of law.

The Equal Employment Opportunity Commission issued its new “Enforcement Guidance on Retaliation and Related Issueson On August 25, 2016. Careful readers will be able to deduce from the section titled “Expansive Definition” that the EEOC uses an expansive definition of what constitutes protected activity. This activity is “protected” in the sense that any adverse action taken against someone for engaging in it is, by definition, retaliatory.

The EEOC Enforcement Guidance lists the following types of protected activity:

  1. Complaining about discrimination against oneself or others – This is the prototypical protected activity.
  2. Threatening to complain about discrimination against oneself or others
  3. Providing information in an employer’s investigation of discrimination or harassment
  4. Refusing to obey an order reasonably believed to be discriminatory
  5. “Passive resistance” – The EEOC gives the example here of a supervisor refusing a request to dissuade subordinates from filing EEO complaints. Apparently, the refusal doesn’t need to be articulated. Just not acting on the request is considered protected.

    Copyright: rtimages / 123RF Stock Photo
    Copyright: rtimages / 123RF Stock Photo
  6. Advising an employer on EEO compliance
  7. Resisting harassing behavior – The EEOC gives the example of an employee telling a supervisor to “leave me alone” and “stop it.” The fact that it’s a supervisor seems important here because the supervisor’s knowledge is imputed to the employer.
  8. Intervening to protect others from harassing behavior – Again, the EEOC example involves a co-worker intervening to stop harassment by a supervisor.
  9. Requesting accommodation for a disability or religion
  10. Complaining that pay practices are discriminatory – There doesn’t need to be an explicit reference to discrimination. If a woman says her pay is unfair and asks what men in the job are being paid, the EEOC deems that protected.

By taking a very broad view of what constitutes protected activity, the EEOC all but ensures that retaliation claims will remain the most popular charge it receives. We’ve previously described six steps that employers should take to protect themselves from these charges. As with so many types of employment claims, it pays to be proactive.

Last week, Nancy Yaffe and I hosted approximately 30 Human Resources professionals in the hospitality industry in our Century City office for a working group discussion on the challenges of the Los Angeles Citywide Hotel Worker Minimum Wage Ordinance.

The hoteliers and restaurateurs who participated each had their own operational and financial challenges, but there were some common themes we thought we would share.

34347220 - hotel building, 3d images

 

Operational Challenges:

  1. Disciplining for Absences:  Group consensus is to discipline when the absence is not covered by sick time or hotel ordinance covered time; some have found employees quickly exhausting their time before they accrue additional protected time off.  Some hotels have converted separate sick and vacation to a combined PTO.  This is easy to administer, but makes it hard to discipline because there is so much paid and somewhat protected time off.  Other hotels have kept a separate sick bucket (frontloading 48 hours in compliance with LA Ordinance) with a separate vacation/PTO bucket to meet the 96 hour requirement under hotel ordinance.  This allows hotels to discipline employees for not following call-in protocols after first 48 hours used, and to deny some PTO requests that are not illness based.
  1. Wage Scale Issues:  Many hotels reported employee relations issues because more tenured employees want higher wages than new employees. One option is to provide certain extra benefits based on seniority (such as paid parking).  But, remember, any non-discretionary wage related benefits are included in the overtime rate.

 

Cost-Savings:

The Hotel Ordinance requires an hourly wage of $15.37 (and that is likely to go up in July 2017 based on a cost of living increase).  Accordingly, implementing cost savings measures was a hot topic.  Some ideas included:

  1. Eliminating certain employee benefits like paid parking, dry cleaning, shift premium.
  2. Start charging for meals or eliminate the employee cafeteria.
  3. Eliminate paid holidays or include paid holidays in PTO time.
  4. Eliminate other paid days off:  Bereavement, jury duty.
  5. Stop drug testing all applicants/new hires.
  6. Eliminate commissions for sales and catering — instead pay per performance and meeting quota or quarterly goals.
  7. Outsource to third parties.  Although this may or may not save costs/lower risks.  Be careful about joint employment liability; negotiate for proper indemnification language in vendor contracts.

Service Charges:

  1. Some hotels are eliminating service charges and paying higher wages to banquet servers.
  2. If a service charge is in effect, 100% must be shared equally to the employees who performed the tasks (e.g. room service or delivery) or worked an event, so tracking these hours to ensure proper payment has become cumbersome. It’s still okay to pool tips/gratuities (but not service charges).
  3. Any service charge or administrative fee must be clear on who it goes to.  Any ambiguity could prompt an unfair business practice claim.
  4. Be careful before jointly deciding to implement any new surcharge to offset hotel ordinance fees.  A recent anti-trust class action was just filed against a group of restaurants that got together to institute a 3% surcharge.

Compliance with this type of local ordinance is challenging, so if you would like to part of any future working discussion groups, we would love to have you… just let us know.

When you draft employment arbitration agreements, it’s not enough to know what the law is. You should also know what the law will be at the time that someone challenges the agreement. Since this area of law changes continuously, that’s pretty hard to do without a crystal ball.

For a while, some courts in California were refusing to enforce arbitration agreements that did not attach a copy of the arbitration provider’s procedural rules. More recent cases, including Baltazar v. Forever 21, Inc., decided by the California Supreme Court in March 2016, dismiss that requirement. Now that that issue is supposedly resolved, the issue du jour is whether arbitration agreements can require employees to waive the right to bring a class action.

Last week, the Ninth Circuit issued a split opinion in Morris v. Ernst & Young saying that class action waivers violate the National Labor Relations Act. According to the two-justice majority, class action waivers violate § 7 of the Act, which states that:

“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

While the National Labor Relations Board has taken the position that arbitration agreements are unenforceable in the non-union employment context, most courts to consider the issue have rejected that position as just another example of the Board going rogue. These include the Second,  Fifth, and Eighth Circuit Courts of Appeal. Even the California Supreme Court, in Iskanian v. CLS Transportation, approved such waivers for class actions (but not for the seemingly analogous claims under California’s Private Attorneys General Act).

Copyright: fergregory / 123RF Stock Photo
Copyright: fergregory / 123RF Stock Photo

So employees can waive their right to present employment claims to a jury individually, but not on a class-wide basis? How can that be? More importantly, what should employers drafting arbitration agreements do about class action waivers?

The split between the circuits makes it increasingly likely that the U.S. Supreme Court will eventually address the issue. When that will happen and how the Court will be composed at the time is entirely unclear. So I plan to continue including class action waivers in arbitration agreements. But I will also include language inviting a court reviewing the agreement to strike any provisions that are inconsistent with applicable law as it exists at the time the agreement is being reviewed. My crystal ball says that’s the best way to go here.

The U.S. Department of Labor, among other things, enforces federal wage and hour laws. These include the overtime provisions of the Fair Labor Standards Act. When it believes employers have violated those laws, the DOL can pursue litigation on behalf of employees. Employers that don’t have the resources to litigate against the federal government frequently end up settling. But it’s not like settling with a private party, where the parties can agree to keep the settlement confidential. The DOL will issue a press release and post the settlement on its website.

Copyright: aga7ta / 123RF Stock Photo
Copyright: aga7ta / 123RF Stock Photo

Last week, the DOL agreed  to pay $7 million in back overtime to a union representing a range of white-collar employees (the American Federation of Government Employees, Local 12). For some reason, I can’t find anything about this settlement on the DOL website. Maybe I’m looking in the wrong place. Perhaps I should look under the definition of irony.

Click here to read what our friends over at the Wage & Hour Developments and Highlights have to say about the case.